(a) SALARY: A base salary of $41,667 per month, prorated for any partial period of employment(“Salary”). Such Salary shall be paid in installments in accordance with the Company’s regularpayroll practices.          (b) BONUS: A bonus at the sole discretion of the Board of Directors of the Company in anamount up to the equivalent of the Salary earned during the Executive’s tenure as President andChief Executive Officer of the Company.          (c) STOCK OPTIONS: Options to purchase an aggregate of 250,000 shares of the Company’s commonstock at an exercise price equal to the closing market price of the Company’s common stock on theNew York Stock Exchange on January 2, 2009. Such options shall be subject to the terms andconditions of the Company’s 2007 Long Term Incentive Plan (the “Plan”) and a Stock Option Agreementin the form attached hereto as Exhibit A, which the Company and the Executive are enteringinto concurrently with the execution of this Agreement.     1.5 NO EMPLOYMENT BENEFITS. Except as set forth in this Agreement, the Executive shall not beentitled to participate in any of the Company’s employee benefit plans.     1.6 WORKING FACILITIES. During the term of this Agreement, the Company shall provide, at itsexpense, office space, furniture, equipment, supplies and personnel as shall be adequate for theExecutive’s use in performing the Executive’s duties and responsibilities under this Agreement.     1.7 EXPENSES. The Company shall promptly reimburse the Executive for all reasonable businessexpenses incurred during the term of this Agreement by the Executive in performing serviceshereunder, including all reasonable expenses of travel and living expenses while away from home onbusiness or at the request of and in the service of the Company; provided, in each case, that suchexpenses are incurred and accounted for in accordance with the policies and procedures establishedby the Company applicable to its professional and other employees.2. TERMINATION     2.1 TERMINATION. Notwithstanding anything herein to the contrary, this Agreement and theExecutive’s employment hereunder may be terminated without any breach of this Agreement at any timeduring the term hereof by reason of and in accordance with the following provisions:          (a) DEATH. If the Executive dies during the term of this Agreement and while in the employ ofthe Company, this Agreement shall automatically terminate as of the date of the Executive’s death,and the Company shall have no further liability hereunder to the Executive or the Executive’sestate, except to the extent set forth in Section 2.2(a) hereof.          (b) DISABILITY. If, during the term of this Agreement, the Executive shall be prevented fromperforming the Executive’s duties hereunder, for a period of not less than 20 consecutive days oran aggregate of 40 days during the term of this Agreement by reason of becoming disabled ashereinafter defined, the Company may terminate this Agreement immediately upon written notice tothe Executive without any further liability hereunder to the
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Executive, except as set forth in Section 2.2(b) hereof. For purposes of this Agreement, theExecutive shall be deemed to have a “Disability” when the Board of Directors of the Company, uponthe written report of a qualified physician reasonably acceptable to the Board of Directors of theCompany, shall have determined that the Executive has become mentally, physically and/oremotionally incapable of performing the Executive’s duties and services under this Agreement.          (c) TERMINATION BY THE COMPANY FOR CAUSE. Prior to the expiration of the term of thisAgreement, the Company may discharge the Executive for cause and terminate this Agreementimmediately upon written notice to the Executive without any further liability hereunder to theExecutive, except to the extent set forth in Section 2.2(c) hereof. For purposes of this Agreement,a “discharge for cause” shall mean termination of the Executive upon written notice to theExecutive limited, however, to one or more of the following reasons:               (i) Conviction of the Executive by a court of competent jurisdiction of a felony or a crimeinvolving moral turpitude;               (ii) The Executive’s engaging in conduct amounting to fraud, dishonesty, gross negligence,willful misconduct or conduct that is unprofessional, unethical or detrimental to the reputation,character or standing of the Company; or               (iii) The Executive’s failure to faithfully and diligently perform the duties requiredhereunder or to comply with the provisions of this Agreement.Prior to terminating this Agreement pursuant to Section 2.1(c)(iii), theCompany shall furnish the Executive written notice of the Executive’salleged failure to abide by or alleged breach of this Agreement. TheExecutive shall have thirty (30) days after the Executive’s receipt of suchnotice to cure such failure to abide or breach and the Company’s Board ofDirectors, in its sole discretion, shall determine if the failure to abideor breach is cured.          (d) TERMINATION BY THE COMPANY WITH NOTICE. The Company may terminate this Agreement at anytime, for any reason, other than as set forth in subparagraphs (a), (b) or (c) of this Section 2.1,with or without cause, in the Company’s sole discretion, immediately upon written notice to theExecutive without any further liability hereunder to the Executive, except to the extent set forthin Section 2.2(d) hereof.          (e) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive may terminate this Agreementat any time for Good Reason (as hereinafter defined) in which event the Company shall have nofurther liability hereunder to the Executive, except to the extent set forth in Section 2.2(e)hereof. For purposes of this Agreement, the term “Good Reason” shall mean, without the Executive’sexpress written consent, the occurrence of any of the following circumstances:               (i) The Company’s failure to pay the Executive the Compensation pursuant to the terms of thisAgreement, which failure has not been cured within 30 days after notice of such noncompliance hasbeen given by the Executive to the Company; or
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               (ii) Any failure by the Company to comply with any material provision of this Agreement, whichfailure has not been cured within 30 days after notice of such noncompliance has been given by theExecutive to the Board of Directors of the Company. The Executive shall make a good faithdetermination whether the failure has been cured and shall so notify the Board of Directors of theCompany within five days after the expiration of such 30 day period.          (f) TERMINATION BY THE EXECUTIVE WITH NOTICE. The Executive may terminate this Agreement 15days in advance for any reason, in the Executive’s sole discretion other than Good Reason, bygiving the Company 15 days prior written notice, in which event the Company shall have no furtherliability hereunder to the Executive, except to the extent set forth in Section 2.2(f) hereof.     2.2 COMPENSATION UPON TERMINATION.          (a) DEATH. In the event the Executive’s employment hereunder is terminated pursuant to theprovisions of Section 2.1(a) hereof due to the death of the Executive, the Company shall have nofurther obligation to the Executive or the Executive’s estate, except to pay to the Executive’sspouse, or if none, to the estate of the Executive any Salary that has accrued as of the date ofdeath, but was then unpaid. Any amount due the Executive under this Section 2.2(a) shall be paid ina lump sum in cash within 30 days after the death of the Executive.          (b) DISABILITY. In the event the Executive’s employment hereunder is terminated pursuant tothe provisions of Section 2.1(b) hereof due to Disability of the Executive, the Company shall berelieved of all of its obligations under this Agreement, except to pay the Executive any Salarythat has accrued as of the date on which such Disability is determined, but was then unpaid. Anyamount due the Executive under this Section 2.2(b) shall be paid in a lump sum in cash within 30days after the termination of the Executive’s employment under Section 2.1(b).          (c) TERMINATION BY THE COMPANY FOR CAUSE. In the event the Executive’s employment hereunder isterminated by the Company for cause pursuant to the provisions of Section 2.1(c) hereof, theCompany shall have no further obligation to the Executive under this Agreement except to pay theExecutive any Salary that has accrued as of the date of such termination, but was then unpaid. Anyamount due the Executive under this Section 2.2(c) shall be paid in a lump sum in cash within 60days after the termination of the Executive’s employment under Section 2.1(c).          (d) TERMINATION BY THE COMPANY WITH NOTICE. In the event the Executive’s employment hereunderis terminated by the Company pursuant to the provisions of Section 2.1(d) hereof, the Executiveshall be entitled to receive (i) any Salary that has accrued as of the date of such termination,but was then unpaid and (ii) an amount equal to the Executive’s full Salary payable for the thenremaining term of this Agreement. Any amount due the Executive under this Section 2.2(d) shall bepaid in a lump sum in cash within 30 days after the termination of the Executive’s employment underSection 2.1(d).
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          (e) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. In the event this Agreement is terminated bythe Executive pursuant to the provisions of Section 2.1(e) hereof, the Executive shall be entitledto receive (i) any Salary that has accrued as of the date of such termination, but was then unpaidand (ii) an amount equal to the Executive’s full Salary payable for the then remaining term of thisAgreement. Any amount due the Executive under this Section 2.2(e) shall be paid in a lump sum incash within 30 days after the termination of the Executive’s employment under Section 2.1(e).          (f) TERMINATION BY THE EXECUTIVE WITH NOTICE. In the event the Executive’s employmenthereunder is terminated by the Executive pursuant to the provisions of Section 2.1(f) hereof, allfuture compensation to which Executive is entitled and all future benefits for which Executive iseligible shall cease and terminate as of the date of such termination. Executive shall be entitledto any accrued, but unpaid, Salary through the date of such termination. Any amount due theExecutive under this Section 2.2(f) shall be paid in a lump sum in cash within 30 days after thetermination of the Executive’s employment under Section 2.1(f).          (g) TERMINATION OF OBLIGATIONS OF THE COMPANY UPON PAYMENT OF COMPENSATION. Upon payment ofthe amount, if any, due the Executive pursuant to the preceding provisions of this Section 2, theCompany shall have no further obligation to the Executive under this Agreement.     2.3 CHANGE OF CONTROL. For this Agreement, a CHANGE OF CONTROL shall be deemed to occur if:          (a) any person (other than the Company, an employee benefit plan of the Company or any holderof the Company’s voting securities on the date hereof), acquires directly or indirectly theBeneficial Ownership (as defined in Section 13(d) of the Exchange Act) of any voting security ofthe Company and immediately after such acquisition such person is, directly or indirectly, theBeneficial Owner of voting securities representing more than 50 percent of the total voting powerof all of the then outstanding voting securities of the Company;          (b) the following individuals no longer constitute a majority of the members of the Board: (A)the individuals who, as of the date hereof, constitute the Board (the “Original Directors”); (B)the individuals who thereafter are elected to the Board and whose election, or nomination forelection, to the Board was approved by a vote of at least two-thirds of the Original Directors thenstill in office (such directors becoming “Additional Original Directors” immediately followingtheir election); or (C) the individuals who are elected to the Board and whose election, ornomination for election, to the Board was approved by a vote of at least two-thirds of the OriginalDirectors and Additional Original Directors then still in office (such directors also becoming“Additional Original Directors” immediately following their election);          (c) the stockholders of the Company approve a merger, consolidation, recapitalization orreorganization of the Company, or a reverse stock split of outstanding voting securities, orconsummation of any such transaction if stockholder approval is not obtained, other than any suchtransaction which would result in at least 50 percent of the total voting power represented by thevoting securities of the surviving entity outstanding immediately after such
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transaction being Beneficially Owned by at least 50 percent of the holders of outstandingvoting securities of the Company immediately prior to the transaction, with the voting power ofeach such continuing holder relative to other such continuing holder not substantially altered inthe transaction; or          (d) the stockholders of the Company shall approve a plan of complete liquidation of theCompany or an agreement for the sale or disposition by the Company of all or a substantial portionmore than 50 percent of the value of the total assets of the Company.     In the event of a Change of Control, the Company will require any and all successors to theCompany to expressly assume and agree pursuant to an appropriate written assumption agreement toperform this Agreement in the same manner and to the same extent that the Company would be requiredto perform it if no such succession had taken place. Failure of the Company to obtain suchagreement prior to or contemporaneously with the effectiveness of any such successor shall be abreach of the Agreement and shall entitle the Executive, as his sole remedy, to terminate theExecutive’s employment contemporaneously with the effectiveness of any such successor and receive(i) any Salary that has accrued as of the date of such termination, but was then unpaid and (ii) anamount equal to the Executive’s full Salary payable for the then remaining term of this Agreement.In the event the successor assumes and agrees, pursuant to a written assumption agreement, toperform this Agreement, but terminates this Agreement pursuant to Section 2.1(d) prior to the endof the term of this Agreement, then the successor shall pay such Executive (i) any Salary that hasaccrued as of the date of such termination, but was then unpaid and (ii) an amount equal to theExecutive’s full Salary payable for the then remaining term of this Agreement.     2.4 OFFSET. The Company shall have the right to deduct from any amounts due the Executivepursuant to Section 2 any obligations owed by the Executive to the Company.3. PROTECTION OF INFORMATION AND NON-COMPETITION     3.1 PROTECTIVE COVENANTS. The Executive recognizes that his employment by the Company is oneof the highest trust and confidence because (i) the Executive will become fully familiar with allaspects of the Company’s business during the term of this Agreement, (ii) certain information ofwhich the Executive will gain knowledge during his employment is proprietary and confidential andhas special and peculiar value to the Company, and (iii) if any such proprietary and confidentialinformation were imparted to or became known by any person, including the Executive, engaging in abusiness in competition with that of the Company, hardship, loss or irreparable injury and damagecould result to the Company, the measurement of which would be difficult if not impossible toascertain. The Executive acknowledges that the Company has developed unique skills, concepts,designs, marketing programs, marketing strategy, business practices, methods of operation, geologicand geophysical information, trademarks, licenses, hiring and training methods, financial and otherconfidential and proprietary information concerning its operations and expansion plans (“TradeSecrets”). Therefore, the Executive agrees that it is necessary for the Company to protect itsbusiness from such damage, and the Executive further agrees that the following covenants constitutea reasonable and appropriate means, consistent with the best interest of both the Executive and the
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Company, to protect the Company against such damage and shall apply to and be binding upon theExecutive as provided herein:          (a) TRADE SECRETS. The Executive recognizes that his position with the Company is one of thehighest trust and confidence by reason of the Executive’s access to and contact with certain TradeSecrets of the Company. The Executive agrees and covenants to use his best efforts and exerciseutmost diligence to protect and safeguard the Trade Secrets of the Company. The Executive furtheragrees and covenants that, except as may be required by the Company in connection with thisAgreement, or with the prior written consent of the Company, the Executive shall not, either duringthe term of this Agreement or thereafter, directly or indirectly, use for the Executive’s ownbenefit or for the benefit of another, or disclose, disseminate, or distribute to another, anyTrade Secret (whether or not acquired, learned, obtained, or developed by the Executive alone or inconjunction with others) of the Company or of others with whom the Company has a businessrelationship. All memoranda, notes, records, drawings, documents, or other writings whatsoevermade, compiled, acquired or received by the Executive during the term of this Agreement arising outof, in connection with, or related to any activity or business of the Company, including, but notlimited to, Trade Secrets, are, and shall continue to be, the sole and exclusive property of theCompany, and shall, together with all copies thereof and all advertising literature, be returnedand delivered to the Company by the Executive upon the termination of this Agreement if requestedby the Board of Directors of the Company, or at any time upon demand by the Board of Directors ofthe Company.          (b) RESTRICTION ON SOLICITING EMPLOYEES OF THE COMPANY. The Executive covenants that duringthe term of this Agreement and for a period of one year (“Non-Solicitation Period”) following thetermination of this Agreement, he will not, either directly or indirectly, call on, solicit, ortake away, or attempt to call on, solicit, induce or take away any employee of the Company, eitherfor himself or for any other person, firm, corporation or other entity. Further, the Executiveshall not induce any employee of the Company to terminate his or her employment with the Company.          (c) COVENANT NOT TO COMPETE. The Executive hereby covenants and agrees that during the term ofthis Agreement and for one year after the date of his termination (“the Non-Compete Period”), hewill not, directly or indirectly, either as an employee, employer, consultant, agent, principal,partner, shareholder (other than through ownership of publicly-traded capital stock of acorporation which represents less than 5% of the outstanding capital stock of such corporation),corporate officer, director, investor, financier or in any other individual or representativecapacity, engage or participate in any business competitive with the business conducted by theCompany within the oil and gas prospect or producing areas in which the Company is operating orevaluating properties on the date of the termination of this Agreement (“Designated Area(s)”).          (d) SURVIVAL OF COVENANTS. Each covenant of the Executive set forth in this Section 3 shallsurvive the termination of this Agreement and shall be construed as an agreement independent of anyother provision of this Agreement, and the existence of any claim or cause of action of theExecutive against the Company whether predicated on this Agreement or otherwise shall notconstitute a defense to the enforcement by the Company of such covenant.
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          (e) REMEDIES. In the event of breach or threatened breach by the Executive of any provision ofthis Section 3, the Company shall be entitled to relief by temporary restraining order, temporaryinjunction, or permanent injunction or otherwise, in addition to other legal and equitable reliefto which it may be entitled, including any and all monetary damages which the Company may incur asa result of such breach, violation or threatened breach or violation. The Company may pursue anyremedy available to it concurrently or consecutively in any order as to any breach, violation, orthreatened breach or violation, and the pursuit of one of such remedies at any time will not bedeemed an election of remedies or waiver of the right to pursue any other of such remedies as tosuch breach, violation, or threatened breach or violation, or as to any other breach, violation, orthreatened breach or violation.          (f) LIMITATIONS. The obligations of confidentiality regarding Trade Secrets, including, butnot limited to, geologic or geophysical information regarding Designated Areas, set forth in thisSection 3.1 shall not apply if (i) it can be demonstrated by the Executive to have been within hislegitimate possession prior to the time of disclosure by the disclosing party, (ii) it was in thepublic domain prior to such disclosure, or (iii) if such disclosure comes into the public domainthrough no fault of the Executive.     The Executive hereby acknowledges that the Executive’s agreement to be bound by the protectivecovenants set forth in this Section 3 was a material inducement for the Company entering into thisAgreement and agreeing to pay the Executive the compensation and benefits set forth herein.Further, Executive understands the foregoing restrictions may limit his or her ability to engage incertain businesses during the period of time provided for, but acknowledges that the Executive willreceive sufficiently high remuneration and other benefits under this Agreement to justify suchrestriction.4. GENERAL PROVISIONS     4.1 NOTICES. All notices, requests, consents and other communications under this Agreementshall be in writing and shall be deemed to have been delivered on the date personally delivered oron the date deposited in a receptacle maintained by the United States Postal Service for suchpurpose, postage prepaid, by certified mail, return receipt requested, addressed to the respectiveparties as follows:               IF TO THE EXECUTIVE: