EX-10.1







Exhibit 10.1




TERM SHEET




Summarizing Terms and Conditions of Employment for

William H. Hastings to serve as CEO, President and Director of

Magellan Petroleum Corporation




December 11, 2008




     This Term Sheet sets forth the principal terms and conditions under which William H. Hastings
(“WHH”) would serve as the President, Chief Executive Officer and a Director of Magellan Petroleum
Corporation (the “Company”). Although this Term Sheet summarizes the principal terms and
conditions under which WHH would serve in such positions, it is not intended to constitute a
complete statement of such terms and conditions or a legally binding agreement between the parties.
The specific terms and conditions governing the employment of WHH will be set forth in a mutually
acceptable, definitive Employment Agreement entered into between the parties (a “Definitive
Agreement”) as soon as practicable after the date hereof.




	 	•	 	WHH title/responsibilities: Chief Executive Officer, President and
Director of Magellan Petroleum Corporation (MPC). In addition, the Board
of MPC will recommend that WHH be elected a Director of Magellan Petroleum
Australia Limited (MPAL). These roles are full-time commitments.
Accordingly, WHH will devote substantially all of his business time and
attention to the business and affairs of MPC and MPAL.
	 
	 	•	 	Base Salary: US$300,000 per year, subject to yearly increase of the
greater of 4% or compounded monthly CPI from the prior year. Said sum to
be wired to the WHH account monthly.
	 
	 	•	 	Term: Five (5) years.
	 
	 	•	 	Annual Bonus: None, although in the ordinary course of business, the
Company’s Compensation Committee may consider and pay bonuses commensurate
with WHH’s and the Company’s performance.
	 
	 	•	 	Severance: If at any time prior to the end of the 5-year term, the
Company terminates WHH’s employment without Cause or WHH resigns for Good
Reason, WHH would be entitled to continue to receive his then-current base
salary for the rest of the 5-year term, with a minimum severance period of
two years.
	 
	 	•	 	Location: WHH will be permitted to work remotely from Portland, Maine,
with a view toward moving the Company’s main office and official
headquarters to Portland by March 1, 2009.




 









 






	 	•	 	Stock Options: WHH will be entitled to receive an initial grant of
non-qualified stock options, which shall be subject to shareholder
approval, covering 3.1 million shares of the common stock of the Company
at an exercise price equal to $1.20 per share, the vesting of which shall
be as follows:






	 	§	 	Options covering 2.1 million shares will vest in three
equal annual installments, commencing twelve months after
the effective date of WHH’s employment with the Company.
	 
	 	§	 	Options covering an additional 1 million shares will
vest upon the attainment of either of the following
mutually acceptable performance goals: (i) upon
monetizing tail gas at a price (or trade value)
acceptable to the Board of Directors of the Company, or
(ii) upon the trading price of the Company’s common stock
being greater than $1.50 per share for a period of sixty
consecutive days.






	 	 	 	The options would provide for a cashless exercise using a third party to
execute the transaction pursuant to corporate counsel guidance. The vesting
of the options would accelerate upon: (i) a change of control of the
Company, (ii) upon the termination of WHH’s employment by the Company
without Cause, or (iii) upon WHH’s resignation from the Company for Good
Reason. In the event that shareholder approval of the foregoing options is
not obtained, WHH’s base salary would be adjusted to bring it to the median
of a peer group identified and selected by MPC’s compensation consultant.
	 
	 	 	 	Raising capital will be a primary goal of WHH’s responsibilities as the CEO
of MPC. In the event that MPC consummates a significant capital raising
transaction, WHH would be entitled to receive additional options with a
strike price equal to the price at which such additional capital is issued.
	 
	 	•	 	Non-Compete: WHH would be bound by a customary non-compete agreement
during his employment with the Company and for two years after termination
of his employment for any reason whether voluntarily or involuntarily and
whether with or without Cause or Good Reason. The applicable jurisdiction
for the non-compete would be everywhere the Company holds material mineral
assets or otherwise is actively engaged in the business or has definitive
plans to do so within the following 12 months.
	 
	 	•	 	Leased Automobile: The Company would lease an auto for WHH’s use.




-2-









 






	 	•	 	Business Expenses: The Company would reimburse WHH for his reasonable
travel and other business expenses incurred in connection with his service
as CEO, President and Director of the Company.
	 
	 	•	 	Advisory Expenses: The Company will reimburse WHH, on an as-incurred
basis, for his out-of-pocket expenses reasonably incurred by WHH in
connection with considering, negotiating and documenting his employment and
compensation arrangements, including the fees of legal counsel and tax
advisors.
	 
	 	•	 	Vacation: WHH would be entitled to 4 weeks of vacation per year.
	 
	 	•	 	Director Liability: The Company would enter into a customary Indemnity
Agreement with WHH, whereby the Company would agree to indemnify WHH to the
fullest extent allowed by law for any claims related to WHH’s service to
the Company as CEO, President and/or Director, and the Company would agree
to acquire and maintain appropriate D&O liability insurance with tail
coverage.




-3-