Form of Executive Employment Agreement - S. Robert Zola


    Exhibit
      10.1

     

     

    

      EXECUTIVE
        EMPLOYMENT AGREEMENT

      


      AN
        EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") dated this 1st
        day of
        January, 2006, by and between Sharp Energy, Inc., a Delaware corporation
        (the
        "Company"), and S. Robert Zola ("Executive").

      


      WITNESSETH:

      


      WHEREAS,
        the Company is currently obtaining the benefit of Executive's services as
        a
        full-time executive employee in the capacity of President;

      


      WHEREAS,
        the Company's Board of Directors (the "Board") has authorized the Company
        to
        agree to provide for Executive's con-tinued employment pursuant to the terms
        of
        this Agreement; and

      


      WHEREAS,
        Executive is willing, in consideration of the covenants hereinafter provided,
        to
        continue to be employed by the Company in the capacity of President and to
        render services incident to such position during the term of this
        Agreement.

      


      NOW,
        THEREFORE, in consideration of the mutual promises and covenants contained
        herein, the Company and Executive hereby agree as follows:

      1. Employment.
        The
        Company agrees to employ Executive, and Executive agrees to accept employment,
        as an executive officer of the Company in the capacity of President, with
        such
        reasonable duties and responsibilities as are consistent with the By-laws
        of the
        Company as of the date hereof, including, but not limited to, establishing
        policies and procedures and managing the data processing, human resources,
        communication and other administrative areas of the Company.

      2. Term.

      (a) Term
        of Agreement.
        The
        term of this Agreement ("Term") shall be the Initial Term (as defined in
        Paragraph 2(b) hereof), and, if applicable, the Extended Term (as defined
        in
        Paragraph 2(c) hereof).

      (b) Initial
        Term.
        Subject
        to Paragraph 2(c) hereof, the Initial Term of this Agreement shall extend
        for
        one (1) year commencing on the date of this Agreement. 

      (c) Extended
        Term.
        Upon
        the occurrence of a Change in Control (as defined in Paragraph 2(d) hereof),
        the
        Initial Term shall end and the Term of this Agreement shall thereupon
        automatically be extended, commencing on the date of such Change in Control,
        for
        the shorter of three (3) years or the period until Executive attains the
        earliest age, if any, at which his compulsory retirement is permitted under
        section 12(c) of the Age Discrimination in Employment Act of 1967, as amended,
        29 U.S.C. § 631(c), or its successor (such extended three-year or shorter
        term constituting the "Extended Term").

      (d) Change
        In Control.
        For the
        purposes of this Agreement, Change in Control shall mean a change in the
        control
        of the Company during the Term of this Agreement, which shall be deemed to
        have
        occurred if:

      (i)
        The
        registration of the Company's voting securities under the Securities Exchange
        Act of 1934, as amended (the "1934 Act"), terminates or the Company shall
        have
        fewer than 300 stockholders of record; or

      (ii)
        any
        person or group (within the meaning of Sections 13(d) and 14(d) of the 1934
        Act), other than the Company or any of its majority-controlled subsidiaries,
        becomes the beneficial owner (within the meaning of Rule 13d-3 under the
        1934
        Act) of 30 percent or more of the combined voting power of the Company's
        then
        outstanding voting securities; or

      (iii)
        a
        tender offer or exchange offer (other than an offer by the Company or a
        majority-con-trolled subsidiary), pursuant to which 30 percent or more of
        the
        combined voting power of the company's then outstanding voting securities
        was
        purchased, expires; or

      (iv)
        the
        stockholders of the Company approve an agreement to merge or consolidate
        with
        another corporation (other than a majority-controlled subsidiary of the Company)
        unless the stockholders of the Company immediately before the merger or
        consolidation are to own more than 70 percent of the combined voting power
        of
        the resulting entity's voting securities; or

      (v)
        the
        Company's stockholders approve an agreement (including, without limitation,
        a
        plan of liquidation) to sell or otherwise dispose of all or substantially
        all of
        the business or assets of the Company; or

      (vi)  during
        any period of two consecutive years, individuals who, at the beginning of
        such
        period, constituted the Board cease for any reason to constitute at least
        a
        majority thereof, unless the election or the nomination for election by the
        Company's stockholders of each new director was approved by a vote of at
        least
        two-thirds of the directors then still in office who were directors at the
        beginning of the period; or

      (vii)  
        the
        acquisition of direct or indirect beneficial ownership of more than 15 percent
        of the Company's then outstanding voting securities by any person or group
        is
        approved over the formal objection of the Company by the Securities and Exchange
        Commission pursuant to Section 9 of the Public Utility Holding Company Act
        of
        1935, as amended.

      However,
        no Change in Control shall be deemed to have occur-red by reason of any event
        involving a transaction in which Executive, or a group of persons or entities
        with which Executive acts in concert, acquires, directly or indirectly, more
        than 30 percent of the common stock or the business or assets of the Company;
        any event involving or arising out of a proceeding under Title 11 of the
        United
        States Code (or the provisions of any future United States bankruptcy law),
        an
        assignment for the benefit of creditors or an insolvency proceeding under
        state
        or local law; or any event constituting approval by the Company's stockholders
        of a merger or consolidation if a majority of the group consisting of the
        President and Vice Presidents of the Company who are parties to agreements
        conferring rights upon a Change in Control shall have agreed in writing prior
        to
        such approval that approval shall be deemed not to constitute a Change in
        Control.

      3. Time.
        Executive agrees to devote all reasonable full time and best efforts for
        the
        benefit of the Company and any subsidiary of the Company, and not to serve
        any
        other business enterprise or organization in any capacity during the Term
        hereof
        without the prior written consent of the Company, which consent shall not
        be
        unreasonably with-held.

      4. Office.

      (a) Initial
        Term.
        During
        the Initial Term, the Company shall elect Executive as its President of Sharp
        Energy, Inc.

      (b) Extended
        Term.
        During
        the Extended Term of this Agreement: 

      (i) Executive
        shall hold and perform an office with the responsibility, importance and
        scope
        within the Company at least equal to that of the office described and
        contemplated in Paragraph 1 hereof; and 

      (ii)  Executive's
        office shall be located in Salisbury, Maryland, and Executive shall not be
        required, without his written consent, to change his office location or to
        be
        absent therefrom on business for more than 60 working days in any
        year.

      5. Compensation.

      (a)
        Initial
        Term.
        The
        Company shall compensate Executive for his services hereunder during the
        Initial
        Term at a rate of $130,000 per annum, payable in equal semi-monthly
        installments, or such greater or lesser amount as the Board may determine
        ("Base
        Compensation"). The Base Compensation rate shall be reviewed annually and
        may be
        increased or decreased from time to time.

      (b) Extended
        Term.
        During
        the Extended Term, the Company shall compensate Executive for his services
        hereun-der at a rate per annum, payable in equal semi-monthly installments,
        equal to his Base Compensation at the time the Extended Term commences,
        increased:

      (i)
        effective on each anniversary of the date of this Agreement during the Extended
        Term by an amount equal to the product of such Base Compensation times the
        increase in the preceding calendar year of the Consumer Price Index for Urban
        Wage Earners and Clerical Workers for the Philadelphia metropolitan region
        as
        reported by the U.S. Department of Labor (or, if such index is no longer
        reported, the corresponding increase in a comparable index); and

      (ii) by
        such
        additional amounts as the Board may determine from time to time based, in
        part,
        on an annual review of Executive's compensation. 

      6. Expenses.
        During
        the Term of this Agreement, the Company shall pay all necessary and reasonable
        business expenses incurred by Executive on behalf of the Company in the course
        of his employment hereunder, including, without limitation, expenses incurred
        in
        the conduct of the Company's business while away from his domicile and expenses
        for travel, meals, lodging, entertainment and related expenses that are for
        the
        benefit of the Company.

      7. Other
        Benefits.

      (a) Executive
        shall be entitled to participate in all profit-sharing, insurance, medical
        and
        retirement benefit plans, together with vacation and other employee benefits
        of
        the Company, now in effect or as hereafter amended or established, in which
        the
        Company executive employees are permitted to participate. The Executive’s
        participation shall be in accordance with the terms and provisions of such
        plans.

      (b)  The
        Company shall furnish Executive with a suitable office, necessary administrative
        support and customary furniture and furnishings for such office. The Company
        further agrees that Executive shall have the use of a Company-owned or
        Company-leased and Company-maintained automobile, new every three years,
        of a
        kind and model appropriate to his position with the Company.

      (c)  Nothing
        in this Agreement shall preclude the Company from amending or terminating
        any
        employee benefit plan or practice, but, it being the intent of the parties
        that
        the Executive shall continue to be entitled during the Extended Term to benefits
        and perquisites as set forth in Paragraphs 7(a) and 7(b) hereof at least
        equal
        to those attached to his position on the date of this Agreement, nothing
        in this
        Agreement shall operate as, or be construed to authorize, a reduction during
        the
        Extended Term without Executive's written consent in the level of such benefits
        or perquisites as in effect on the date of a Change in Control. If and to
        the
        extent that such benefits or perquisites are not payable or provided to
        Executive under any such plan or practice by reason of an amendment thereto
        or
        termination thereof during the Extended Term, the Company shall pay or provide
        such benefits or perquisites to Executive.

      8. Termination.

      (a)
        Termination
        for Cause.
        This
        Agreement and Executive's employment hereunder may be terminated by the Company
        at any time for Cause. In the event of termination for Cause, the Executive
        shall not be entitled to any severance benefits under this agreement. During
        the
        Initial Term, Cause shall be as the Board may reasonably determine. During
        the
        Extended Term, termination of this Agreement and the Executive's employment
        shall be deemed to have been for Cause only if it shall have been the result
        of:

      (i)
        conduct by Executive that constitutes a felony under the laws of the United
        States or a state in which Executive works or resides;

      (ii)
        an
        act or acts of dishonesty by Execu-tive resulting or intended to result directly
        or indirectly in material gain to or personal enrichment of Executive at
        the
        Company's expense;

      (iii)
        a
        deliberate and intentional refusal by Executive during the Extended Term
        (except
        by reason of incapacity due to illness or accident) to comply with the
        provisions of Paragraph 1 hereof, provided that such breach shall have resulted
        in demonstrably material injury to the Company and the Executive shall have
        failed to remedy such breach within thirty days after notice from the Secretary
        of the Company demanding that the Executive remedy such breach; or

      (iv)
        the
        engagement in conduct by Executive that is materially injurious to the Company
        if such conduct was undertaken without good faith and the reasonable belief
        that
        such conduct was in the best interest of the Company. 

      (b) Termination
        During Extended Term.
        During
        the

      Extended
        Term of this Agreement, the term "Termination" shall mean:

      (i)
        Termination by the Company of Executive's employment; or

      (ii)
        Termination by Executive of his employ-ment following the occurrence of any
        of
        the following events:

      (A)
        Failure to elect or reelect Execu-tive to, or removal of Executive from,
        the
        office or offices set forth in Paragraph 1 hereof, or the Board if Executive
        shall have been a member of the Board immedi-ately prior to a Change in Control
        of the Company;

      (B)
        Executive's good-faith determination that there has been a significant change
        in
        the nature or scope of his authorities, powers, functions, duties or
        responsibilities attached to the positions contemplated in Paragraph 1 hereof
        or
        a reduction in his compensation as provided in Paragraph 5 hereof or his
        benefits as provided in Para-graph 7, which change or reduction is not remedied
        within thirty days after notice to the Company by Executive;

      (C)
        Any
        other breach by the Company of any provision of this Agreement (including,
        without limitation, relocation of Executive in violation of Paragraph 4(b)
        hereof), which breach is not remedied within thirty days after notice to
        the
        Company by Executive; or

      (D)
        The
        liquidation, dissolution, consolidation or merger of the Company or transfer
        of
        all or a significant portion of its assets unless a successor or successors
        (by
        merger, consolidation or otherwise) to which all or a significant portion
        of its
        assets has been transferred shall have assumed all duties and obligations
        of the
        Company under this Agreement;

      provided
        that in any event set forth in this Paragraph 8(b)(ii), Executive shall have
        elected to terminate his employment under this Agreement upon not less than
        forty (40) and not more than ninety (90) days' notice to the Board, attention
        of
        the Secretary, given, except in the case of a continuing breach, within three
        calendar months after (1) failure to be so elected or reelected, or such
        removal, (2) expiration of the 30-day cure period with respect to such event,
        or
        (3) the closing date of such liquidation, dissolution, consolidation, merger
        or
        transfer of assets. 

      An
        election by Executive to terminate his employment under the provisions of
        this
        Paragraph shall not be deemed a voluntary termination of employment by Executive
        for the purpose of this Agreement or any plan or practice of the
        Company.

      (c) Payment
        Upon Termination During Extended Term.
        In the
        event of a Termination of this Agreement during the Extended Term hereof
        for any
        reason other than Cause or Executive's death, the Company shall, subject
        to
        Paragraph 9 hereof, pay to Executive (or, in the event of his death following
        the Termination, his legal representative) in cash within thirty (30) days
        after
        the date of such Termination (the "Termination Date"):

      (i)  
        An
        amount equal to the product of multiplying the monthly rate of Base Compensation
        to which Executive was entitled under Paragraph 5(b) hereof on the day
        immediately prior to the Termination Date by the lesser of (A) twelve (12)
        months or (B) the number of months remaining in the Term of this Agreement
        (the
        shorter of such periods constituting the "Covered Period"); 

      (ii)  
        An
        amount equal to the present value of the additional benefits that would have
        been paid Executive under the Company's retirement plans if he had continued
        to
        be employed pursuant to this Agreement during the Covered Period and the
        retirement plans had continued during such period without change from the
        date
        of the Change in Control;

      (iii)
        For
        each share of Company stock subject to a stock option that was awarded to
        Executive under a Company stock option plan, was held by Executive on the
        day
        immediately prior to his Termination Date, was not exercisable on that date
        but
        would have become exercisable during the Covered Period if Executive's
        employment with the Company had continued during that period, an amount equal
        to
        the excess of (A) the daily average closing price for a share of the Company's
        stock on the New York Stock Exchange, or such other national securities exchange
        on which such stock may be listed, during the 30-day period ending upon the
        date
        of the Change in Control, or, if higher, during the 30-day period ending
        upon
        the Termination Date (adjusted as appropriate for any changes in the capital
        structure of the Company) over (B) the option price for a share of the Company's
        stock subject to the option; and

      (iv) An
        amount
        equal to the aggregate of the Company's contributions to the Company's savings
        plan in respect of Executive that were not vested on the day immediately
        prior
        to the Termination Date but that would have been vested at the end of the
        Covered Period if Executive had remained employed by the Company for the
        duration of that period.

      For
        purposes of calculating the present value specified in Paragraph 8(c)(ii),
        the
        discount rate shall equal the PBGC interest rate for immediate annuities,
        as
        provided in 29 C.F.R. Part 4044, Appendix B, Table II or its successor, in
        effect for a valuation date coinciding with the Termination Date. If that
        rate
        should no longer be published, the discount rate shall be such closely
        comparable interest rate as the Company may reasonably determine.

      (d) Payment
        Upon Termination During Initial Term.
        In the
        event that the Company terminates this Agreement during, or elects pursuant
        to
        Paragraph 17 hereof not to renew this Agreement at the end of, the Initial
        Term
        hereof for any reason other than Cause or Executive’s death, the Company shall
        continue to pay to Executive (or in the event of his death following such
        termination, his legal representative) his Base Compensation under Paragraph
        5(a) hereof, at the semi-monthly rate in effect immediately prior to the
        date of
        such termination (“Termination Date”), for a period of six months following the
        Termination Date.

      9. Maximum
        Payment Upon Termination.
        Notwithstanding any other provision of this Agreement, if the Company should
        determine, in consultation with tax advisors satisfactory to Executive, that
        any
        amount payable to Executive pursuant to Paragraph 8 of this Agreement during
        the
        Extended Term, either alone or in conjunc-tion with any payments or benefits
        to
        or on behalf of Executive pursuant to this Agreement or otherwise, would
        not be
        deductible by the Company, in whole or in part, for federal income tax purposes
        by reason of section 280G of the Internal Revenue Code or its successor,
        then
        the aggregate amount payable to Executive pursuant to Paragraph 8 shall be
        reduced to the largest amount that, in the opinion of such tax advisors,
        the
        Company could pay Executive under Para-graph 8 without any part of that amount
        being nondeductible by the Company as a result of Section 280G or its successor.
        

      10.  Mitigation.
        Executive shall not be required to mitigate the amount of any payment provided
        for in this Agreement either by seeking other employment or otherwise. The
        amount of any payment provided for herein shall not be reduced by any
        remuneration that Executive may earn from employment with another employer
        or
        otherwise following his Termination Date.

      11.  Noncompetition
        Covenant.
        For a
        period of one year following the Termination Date and, if Executive has given
        a
        notice pursuant to Paragraph 8(b)(ii) hereof, for a period of 15 months
        following the giving of such notice, Executive shall assist no individual
        or
        entity other than the Company to acquire any entity with respect to which
        a
        proposal to acquire was presented to the Board prior to the beginning of
        the
        period.

      12. Indemnification.
        The
        Company shall indemnify Executive to the fullest extent permitted by applicable
        Delaware law (as may be amended from time to time), includ-ing the advance
        of
        expenses permitted therein.

      13. Performance.
        The
        failure of either party to this Agreement to insist upon strict performance
        of
        any provision hereof shall not constitute a waiver of its rights subse-quently
        to insist upon strict performance of such provision or any other provision
        of
        this Agreement.

      14. Non-Assignability.
        Neither
        party shall have the right to assign this Agreement or any rights or obligations
        hereunder without the consent of the other party.

      15. Invalidity.
        If any
        provisions of this Agreement shall be found to be invalid by any court of
        competent jurisdiction, such finding shall not affect the remaining provisions
        of this Agreement, all of the which shall remain in full force and
        effect.

      16. Arbitration
        and Legal Fees.
        In the
        event of any dispute regarding a refusal or failure by the Company to make
        payments or provide benefits hereunder for any reason, Executive shall have
        the
        right, in addition to all other rights and remedies provided by law, to
        arbitration of such dispute under the rules of the American Arbitration
        Asso-ciation, which right shall be invoked by serving upon the Company a
        notice
        to arbitrate, stating the place of arbi-tration, within ninety (90) days
        of
        receipt of notice in any form (including, without limitation, failure by
        the
        Company to respond to a notice from Executive within thirty (30) days) that
        the
        Company is withholding or proposes to withhold payments or provisions of
        benefits. In the event of any such dis-pute, whether or not Executive exercises
        his right to arbitration, if it shall ultimately be determined that the
        Company's refusal or failure to make payments or provide benefits hereunder
        was
        wrongful or otherwise inconsistent with the terms of this Agreement, the
        Company
        shall indemni-fy and hold harmless Executive from and against any and all
        expenses incurred in connection with such determination, including legal
        and
        other fees and expenses. Without limitation of or by the foregoing, the Company
        shall, within ten (10) days after notice from Executive, provide Executive
        with
        an irrevocable letter of credit in the amount of $100,000 from a bank
        satisfactory to Executive against which Executive may draw to pay legal fees
        and
        other fees and expenses in connection with any attempt by Executive to enforce
        any of his rights under this Agreement during the Extended Term. Said letter
        of
        credit shall not expire before ten (10) years following the date of this
        Agreement.

      17. Renewal.
        If the
        Initial Term of this Agreement expires without there having been a Change
        in
        Control, this Agreement shall be renewed, as of the day following such
        expiration, unless, during the period beginning 90 days prior and ending
        30 days
        prior to such day, either the Company or Executive shall have given notice
        to
        the other that this Agreement will not be renewed. If this Agreement is renewed
        as provided under this Paragraph, the new Agreement shall be identical to
        this
        Agreement (except insofar as the Company and Executive may otherwise agree
        in
        writing) except that the date of the new Agreement shall be as of the day
        following the expiration of the Initial Term of this Agreement.

      18. Successors.
        This
        Agreement shall be binding upon and inure to the benefit of the Executive
        (and
        his personal representative), the Company and any successor organization
        or
        organizations that shall succeed to substantially all of the business and
        property of the Company, whether by means of merger, consolidation, acquisition
        of substantially all of the assets of the Company or otherwise, including
        by
        operation of law.

      19. Set-off.
        The
        Company shall have no right of set-off or counterclaim in respect of any
        claim,
        debt or obligation against any payments or benefits provided for in this
        Agreement.

      20. Amendments.
        No
        Amendment to this Agreement shall be effective unless in writing and signed
        by
        both the Company and Executive.

      21. Governing
        Law.
        This
        Agreement shall be interpret-ed and enforced in accordance with the laws
        of the
        State of Delaware.

      22. Notices.
        Unless
        otherwise stated herein, all notices hereunder shall be in writing and shall
        be
        deemed to be given when personally delivered or mailed by United States
        registered or certified mail, postage prepaid, to, if to the Company, 909
        Silver
        Lake Boulevard, Dover, Delaware 19904, and, if to Executive, the last address
        therefore shown on the records of the Company. Either the Company or Executive
        may, by notice to the other, designate an address other than the foregoing
        for
        the receipt of subsequent notices.

      23. Withholding.
        The
        Company may withhold from any amounts payable to Executive hereunder all
        federal, state, city or other taxes that the Company may reasonably deter-mine
        are required to be withheld pursuant to any applicable law or
        regulation.

      24. Nature
        of Payments Upon Termination.
        All
        payments to Executive pursuant to Paragraphs 8 and 9 of this Agree-ment shall
        be
        considered as liquidated damages or, in the case of certain payments pursuant
        to
        Paragraph 8(d), as severance payments in consideration of Executive's past
        services to the Company, and no such payment shall be regarded as a penalty
        to
        the Company.

      	25.  	
              Acknowledgment.
                The parties hereto each acknowl-edge that each has read this Agreement
                and
                understands the same and that each enters into this Agreement freely
                and
                voluntarily.

            


      


      


      IN
        WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
        date
        first above written.

      


      SHARP
        ENERGY, INC.

      


      [CORPORATE
        SEAL]   By: _______________________________

      Chairman

      ATTEST:

      


      


      __________________________

      Secretary     EXECUTIVE

      


      


      ____________________________________