EX-10.4






Exhibit 10.4




19 September 2014



Derek Neilson


Mansefield


Alford Aberdeenshire AB33 8NL



Re: Key Employee Retention Plan



Dear Derek:



In recognition of your continuing key role at Endeavour Energy UK Limited (the “Company”),
you shall be entitled to certain bonuses upon the terms and conditions set forth in this letter
(“Agreement”). This Agreement is between you and the Company.



Terms and Conditions



The Company agrees to make the following payments, in addition to your normal salary and benefits,
to you, subject to the terms and conditions in this Agreement and execution and delivery of this
Agreement to the Company by September 19, 2014 (the “Delivery Date”):




	 	1.	 	Commitment Amount: If you agree to continue your employment with the Company
and not resign, and your employment with the Company is not terminated for “Cause” (as
hereinafter defined), before the earlier of (i) the “Transaction Date” (as defined below)
or (ii) September 26, 2015, you shall be entitled to the “Commitment Amount” set
forth on the attached Schedule A. Provided you return a fully executed copy of
this Agreement by the Delivery Date, the Commitment Amount will be advanced to you on the
next regular payroll date that follows the Delivery Date. However, if you resign your
employment, or are terminated with Cause, prior to the earlier of the Transaction Date or
September 26, 2015, you agree that, within ten (10) calendar days, you will pay to the
Company the full amount of the Commitment Amount you received (i.e., the net amount of the
Commitment Amount after reduction by all amounts withheld therefrom). You agree that the
Company may recover such payment (or any part therefrom) from you by making deductions from
your salary and/or any other sums owed to you by the Company, subject to applicable law.






	 	2.	 	Retention Bonus: If you remain an employee of the Company and do not resign,
and your employment with the Company is not terminated for Cause, before the “Transaction
Date” (as defined below) then you shall be paid the “Retention Bonus” in the amount
set forth on the attached Schedule A. Payment of the Retention Bonus shall be made
within fifteen (15) calendar days following the Transaction Date. In the event that prior
to the Transaction Date your employment with Endeavor is terminated without “Cause” (as
defined below), or by reason of death or permanent disability (under the Company’s group
income protection plan), you shall also be entitled to the Retention Bonus, payable on the
date that is thirty (30) calendar days following your termination date. Payment of a
Retention Bonus on account of a termination without Cause shall be contingent on your
executing and not revoking an agreement, in a form provided by the Company, granting a full
release of all actual and potential claims you have or may have against the Company, or any
of its affiliates (the “Release”), which shall be provided on your termination
date.






	 	3.	 	Amount of Payments. The amount of the Commitment Amount and Retention Bonus
(together, the “Payments”) are set forth on the Attached Schedule A
(reduced by the amount of required income tax withholdings under PAYE and any employee
National Insurance contributions (and all and any other deductions required by law). The
Payments will not be taken into account to increase any benefits or compensation provided
(such as calculating any pension contributions), or to continue coverage, under any other
plan, program, policy or arrangement of the Company or its affiliates, except as otherwise
expressly provided in such other plan, program, policy or arrangement.






	 	4.	 	Definitions. For purposes of this Agreement, the following terms shall have
the meanings set forth below:






“Transaction Date” means: the date of the earlier to occur of: (i) the closing
date of any out of court agreement for the restructuring of Endeavour Operating
Corporation’s (“Endeavour”) balance sheet, (ii) the effective date of a
confirmed plan of reorganization under chapter 11 of title 11 of the United States Code
(the “Bankruptcy Code”) providing for the restructuring of Endeavour’s balance
sheet, (iii) the closing date of a sale of all or substantially all of the assets or a
majority of the outstanding stock of Endeavour in one or more transactions under section
363 of the Bankruptcy Code or pursuant to a confirmed chapter 11 plan, and (iv) the date
of the entry of an order of a United States Bankruptcy Court ordering the conversion of
Endeavour’s chapter 11 case to a case under chapter 7 of the Bankruptcy Code.




“Cause” means any act or omission by you which constitutes: (i) fraud,
embezzlement or material, willful misconduct; (ii) any indictment for, conviction of or
entry of a plea of nolo contendere to any criminal offence (other than an offence under
any road traffic legislation for which a penalty of imprisonment cannot be imposed;
(iii) illegal possession or use of any drug or narcotic, (iv) any violation of the
Endeavour Code of Business Conduct, (v) termination for poor performance, poor
attendance, misconduct or gross misconduct as described in the Endeavour UK Disciplinary
and Dismissal Policy, as amended from time to time, or (vi) any other reason entitling
Endeavour to dismiss you lawfully and summarily. Any determination of Cause shall be
reasonably made by the management of the Company and shall be binding on you and your
successors and assigns.




	 	5.	 	Forfeiture of Rights. Because your continued performance of services is an
important reason for the Payments, your rights to such Payments may be forfeited under
certain circumstances described below.






	 	a.	 	Commitment Amount: As provided above, your
rights to retain the Commitment Amount will be forfeited if you resign or
are terminated with Cause from your employment before the earlier of the
Transaction Date or September 26, 2015. Thus, you will not forfeit your
rights to retain the Commitment Amount if you die, become permanently
disabled (under the Company’s group income protection plan) or are
terminated without Cause before the earlier of Transaction Date or
September 26, 2015.






	 	b.	 	Retention Bonus: As provided above, your rights
to receive payment of the Retention Bonus will be forfeited upon the
termination of your employment prior to the Transaction Date for any
reason, unless such termination is without Cause, death or permanent
disability.





You may not assign your rights under this Agreement except upon your death. The Company may assign
its obligations hereunder to any successor (including any acquirer of substantially all of the
assets of the Company).



This Agreement sets forth the entire understanding of the Company and you regarding any retention
or incentive bonus, and may be changed only by a written agreement signed by you and the Company.



This Agreement and any dispute or claim arising out of or in connection with it or its subject
matter or formation (including non-contractual disputes or claims) shall be governed by and
construed in accordance with the law of England and Wales. Each party irrevocably agrees that the
Courts of England and Wales shall have non-exclusive jurisdiction to settle any dispute or claim
that arises out of or in connection with this Agreement or its subject matter or formation
(including non-contractual disputes or claims).



This Agreement may be executed in two or more counterparts, and by the different parties in
separate counterparts, each of which when executed shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement electronically (including portable document
format (pdf.)) or by facsimile shall be as effective as delivery of a manually executed counterpart
of this Agreement.



To accept this Agreement, please sign where indicated below, and return on or before Friday,
September 19, 2014 in a confidential envelope to Julie Ferro, 811 Main, Suite 2100, Houston, Texas
77002, via confidential facsimile at +1 713-583-3651 or to julie.ferro@endeavourcorp.com.




Sincerely




ENDEAVOUR ENERGY UK LIMITED




/s/Cathy Stubbs 

By: Cathy Stubbs

Title: Director




ACCEPTED AND AGREED AS OF THE


DATE FIRST SET FORTH ABOVE:



/s/Derek Neilson 


By: Derek Neilson



1



Schedule A




Commitment Amount: £100,000



Retention Bonus: £100,000




2