EX-10.11






Exhibit 10.11




NGAS Resources, Inc.




LONG TERM INCENTIVE AGREEMENT




     This LONG TERM INCENTIVE AGREEMENT is entered into as of December 9, 2008 between NGAS
Resources, Inc., a British Columbia corporation (the “Company”), and                                         ,
the                      of the Company (the “Executive”).



     The parties desire to establish an incentive for the Executive to remain with the Company on a
long term basis by providing for a cash bonus and stock option award vesting on the terms and
subject to the conditions of this Agreement. Accordingly, the parties hereto agree as follows.



     1. Definitions. The following terms used in this Agreement shall have the respective meanings
set forth below.



          1.1 “Adjudication” means an adjudication and final judgment determining the rights or
obligations of a party hereunder in any court of competent jurisdiction.




          1.2 “Change of Control Agreement” means the Change of Control Agreement dated February
25, 2004 between the Company and the Executive, and “Change of Control” has the meaning set
forth in the Change of Control Agreement.




          1.3 “Common Stock” means the common stock, no par value, of the Company now or
hereafter outstanding, or any capital shares or other securities of the Company issued in exchange,
conversion or substitution therefor by the Company, it successors and assigns, including any
successor resulting from any merger or consolidation involving the Company.




          1.4 “Company” means NGAS Resources, Inc. and its subsidiaries unless the context
otherwise requires or, following a Change of Control, any successor to all or substantially all the
business or assets of the Company, whether direct or indirect, by purchase, merger, consolidation
or otherwise.




          1.5 “Compensation” means the Executive’s annual compensation, comprised of base
salary, any cash bonus and the value of any stock bonus award, for the calendar year immediately
preceding the year in which an Incentive Payout vests hereunder.




          1.6 “Final Vesting Date” means the earlier of (a) February 25, 2014 or (b) following
any Change of Control, the date on which the Executive’s employment with the Company is terminated
by the Executive for Good Reason (as defined in the Change of Control Agreement) or by the Company
other than for Cause (as defined in the Change of Control Agreement) or the death or Disability (as
defined in the Change of Control Agreement) of the Executive.




          1.7 “Incentive Payout” means the cash compensation set forth in Section 2.1.




          1.8 “Incentive Plan” means the Company’s 2003 Incentive Stock and Stock Option Plan.




          1.9 “Initial Vesting Date” means the earlier of (a) February 25, 2012 or (b) the date
determined under Section 1.6(b).




          1.10
“Option” and “Option Period” have
the respective meanings set forth in Section 3.1.




          1.11 “Securities” means the Securities Act of 1933, as amended.




          1.12
“Shares” has the meaning set forth in
Section 3.1.




     2. Incentive Payout.



          2.1 Entitlement.




               (a) Initial Vesting. In the event that the Executive continues to serve as an executive
officer of the Company until the Initial Vesting Date, the Executive shall be entitled to an
Incentive Payout in an amount equal



 









 







to 40% of the Executive’s total Compensation for the preceding year.



               (b) Final Vesting. In the event that the Executive continues to serve as an executive officer
of the Company until the Final Vesting Date, the Executive shall be entitled to an Incentive Payout
in an amount equal to 100% of the Executive’s total Compensation for the preceding year, less the
amount of any Incentive Payout received by the Executive under Section 2.1(a).



          2.2 Payment. A vested Incentive Payout shall be payable by the Company in cash on the
Initial Vesting Date, if applicable, and the Final Vesting Date in the amounts provided under
Section 2.1 or, at the election of the Executive, in periodic installment payments, subject
in either case to any applicable withholding taxes.




          2.3 Reserves. Unless prohibited under any credit agreement or other debt instruments
of the Company, as long as the Executive continues to serve as an executive officer of the Company
prior to the Final Vesting Date, the Company shall establish annual cash reserves equal to 20% of
the estimated total Incentive Payout to secure its payment obligation under Section 2.2.




     3. Stock Option



          3.1 Grant and Vesting. The Company hereby grants to the Executive the right and
option (the “Option”) to purchase an aggregate of ___shares of Common Stock (the
“Shares”) at an exercise price of $1.51 per Share, reflecting the closing price of the
Common Stock on the Valuation Date (as defined in the Incentive Plan). In the event that the
Executive continues to serve as an executive officer of the Company until a vesting event, the
Option shall vest and become exercisable for 40% of the Shares on the Initial Vesting Date and for
100% of the Shares on the Final Vesting Date and shall remain exercisable until the second
anniversary of the vesting event (the “Option Period”).




          3.2 Exercise. During the Option Period, the Executive may exercise the Option in
whole or in part by delivering to the Company’s offices a written notice signed by the Executive
stating the number of Shares that he has elected to purchase and accompanied by payment (in the
form prescribed by Section 3.3) of an amount equal to the exercise price for the Shares to
be purchased. The exercise notice must also contain a statement confirming that the Executive is
acquiring the Shares for investment. Following receipt by the Company of the exercise notice and
full payment of the exercise price for the Shares covered thereby, the Company shall instruct its
stock transfer agent to issue, as expeditiously as practicable, a certificate representing the
Shares so purchased in the name of the Executive and to deliver the certificate to the Executive at
the address specified in the exercise notice. The certificate shall bear no restrictive legend
under the Securities Act, reflecting the effectiveness of the Company’s registration statement on
Form S-8 covering the resale of Common Stock issued under the Plan in accordance with Rule 415
under the Securities Act.




          3.3 Payment of Exercise Price. The exercise price for Shares purchased under the
Option shall be payable either (a) by personal check or official bank check, (b) with shares of
Common Stock already owned by the Executive or (c) any combination of those forms of payment. Any
shares of Common Stock used to satisfy the exercise price for Shares purchased under the Option
shall be valued at their fair market value (determined in accordance with the Plan) on the date of
the exercise notice. If the Executive elects to pay any portion of the exercise price for Shares
with shares of Common Stock, the exercise notice shall state the number of shares of Common Stock
to be applied toward the exercise price and shall be accompanied by the certificate(s) representing
those shares of the Common Stock, together with stock powers therefor duly executed by the
Executive.




          3.4 Transferability of Option. The Option shall not be transferable other than by
will or by




          the laws of descent and distribution and may be exercised only by the Executive or his personal
representatives.




          3.5. Incorporation of Incentive Plan. The Option is subject to, and governed by, the
terms and conditions of the Incentive Plan, which are hereby incorporated by reference.




     4. Remedies of the Executive.



          4.1 Right to Adjudication. In the event that (a) payments required to be made by the
Company hereunder are not timely made or (b) the Executive otherwise seeks to enforce his rights
under this Agreement, the Executive shall be entitled to an Adjudication, and the Company will not
oppose the Executive’s right to seek the Adjudication.




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          4.2 Burden of Proof in Adjudication. In any Adjudication, the Executive shall be
presumed to be entitled to the benefits provided under this Agreement following a vesting event,
and the Company shall have the burden of proof to overcome that presumption. In any Adjudication,
the Company shall be precluded from asserting that the procedures and presumptions provided in this
Agreement are not valid, binding and enforceable. The Company shall stipulate that it is bound by
all the provisions of this Agreement and shall be precluded from making any assertion to the
contrary.




          4.3 Expenses of Adjudication. Expenses reasonably incurred by the Executive in
connection with the enforcement of this Agreement through an Adjudication shall be borne by the
Company if the Executive is successful in the Adjudication.




     5. Nature of Obligations.



          5.1 Direct Obligations. The Company’s obligations hereunder shall be absolute and
unconditional and shall not be subject to any setoff, counterclaim, recoupment, defense or other
right that the Company may have against the Executive or any other person. Any amounts payable by
the Company hereunder shall be made without notice or demand. The Company waives any rights it may
now have or hereafter acquire, by statute or otherwise, to cancel, terminate or rescind this
Agreement in whole or in part.




          5.2 Obligations under Change of Control Agreement. For purposes of determining the
Executive’s rights under the Change of Control Agreement, the definition of the term “Incentive
Agreement” in Section 1.8 of the Change of Control Agreement is hereby amended to include this
Agreement, and any failure by the Company to honor its obligations under this Agreement shall
constitute “Good Reason,” as defined in Section 1.7 of the Change of Control Agreement. As
modified hereby, the Change of Control Agreement shall remain in full force and effect.




     6. Successor and Assigns. This Agreement shall be binding on the successors and assigns of
the Company and shall inure to the benefit of and be enforceable by the legal representatives,
executors, administrators, heirs, distributees, devises and legatees of the Executive. Upon any
Change of Control, the Company shall require any successor to all or substantially all the business
or assets of the Company, whether direct or indirect, by purchase, merger, consolidation or
otherwise, by written agreement satisfactory in form and substance to the Executive, to expressly
assume and agree to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no succession had taken place.



     7. Miscellaneous.



          7.1 Reservation of Rights. Nothing in this Agreement shall affect any right that the
Company may otherwise have to terminate the Executive’s employment at any time in any lawful
manner, subject to providing any benefits required hereunder, under the Change of Control Agreement
or under any severance policy of the Company then in effect. The rights and remedies provided by
this Agreement are cumulative, and the use of any one right or remedy by a party shall not preclude
or waive that party’s right to use any or all other remedies. Those rights and remedies are given
in addition to any other rights the parties may have by law, statute, ordinance or otherwise.




          7.2 Waiver of Provisions. No provisions of this Agreement may be modified, amended,
waived or discontinued unless agreed to in writing by the parties hereto. No waiver at any time by
either party of any breach by the other party or waiver of compliance with any condition or
provision to be performed by the other party shall be deemed a waiver of similar or dissimilar
breaches, conditions or provisions at the same time or any prior or subsequent time.




          7.3 Integration. This Agreement contains the entire agreement of the parties with
respect to the subject matter hereof. No assurances or representations, oral or otherwise, express
or implied, with respect to the subject matter of this Agreement have been made by either party
except as expressly set forth herein.




          7.4 Amendment. This Agreement shall not be amended or modified except by a written
instrument signed by both parties.




          7.5 Governing Law. This Agreement and the rights and obligations of the parties shall
be governed by and construed in accordance with the laws of the state of Delaware, excluding any
conflict of laws rules of that State or other principle that might refer the governance or
construction of this Agreement to the laws of any other jurisdiction.




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          7.6 Notices. Any notice, request or other communication required or permitted under
this Agreement shall be made in writing and shall be deemed to have been duly given or made if
delivered personally, or mailed (postage prepaid by registered or certified mail), or sent by
facsimile to the party (or to an executive officer of the Company) at their respective addresses
provided in writing to the other party for that purpose. Any notice, request or other
communication so sent shall be deemed to have been given or delivered (a) at the time that it is
personally delivered, (b) two business days after the date deposited in the United States mail, (c)
one business day after delivery to an overnight courier or (d) when receipt is acknowledged, if
sent by facsimile.




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



	 	 	 	 	 
	 	NGAS RESOURCES, INC.

 	 
	 	By  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	EXECUTIVE:

 	 
	 	 	 
	 	
 	 
	 	 	 
	 




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