Document:

EXHIBIT 10.4

 

FIRST AMENDMENT TO THE

CANO PETROLEUM, INC.

NONQUALIFIED STOCK OPTION
AGREEMENT

 

This
FIRST AMENDMENT (the “Amendment”)
to the Nonqualified Stock Option Agreement (the “Agreement”)
dated December 13, 2005, is hereby made and entered as of the 2nd day of
January, 2008 by and between Cano Petroleum, Inc., a Delaware corporation
(the “Company”) and Donnie Dale
Dent (the “Participant”).  Terms used in this Amendment with initial
capital letters that are not otherwise defined herein shall have the meanings
ascribed to such terms in the Agreement.

 

WHEREAS, Section 24 of the Agreement provides that the
parties to the Agreement may change or modify the Agreement in a writing signed
by the parties; and

 

WHEREAS, the parties desire to amend the Agreement’s
vesting provisions to reflect changes made by the Compensation Committee of
Cano Petroleum, Inc. and the Board of Directors, on June 28, 2007 and
the Participant’s resignation as a director in good standing from the Board of
Directors on December 12, 2007.

 

NOW THEREFORE, pursuant to Section 24 of the
Agreement, in consideration of the mutual promises, conditions and covenants
contained herein and in the Agreement, and other good and valuable
consideration, the adequacy of which is hereby acknowledged, the parties agree
as follows:

 

1.             Section 3
of the Agreement shall be amended in its entirety to read as follows:

 

3.               Vesting; Time of Exercise.  100% of the total Optioned Shares shall vest
immediately upon the Participant’s resignation on December 12, 2007 and
the Stock Option shall become exercisable for an extended period of Twenty-Four
(24) months from the date of resignation with the exercise period ending at
5:00 p.m. on December 12, 2009.

 

2.                                       Section 27.a.
of the Agreement shall be amended to read as follows:

 

a.                                       Notice to the
Company shall be addressed and delivered as follows:

 

Cano Petroleum, Inc.

Burnett Plaza

801 Cherry Street

Suite 3200, Unit 25

Fort Worth, TX  76102

Attn:  Corporate Secretary

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed
this Amendment the day and year first above written.

 

	
   

  	
  CANO
  PETROLEUM, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  S. Jeffrey Johnson

  
	
   

  	
  Name:

  	
  S.
  Jeffrey Johson

  
	
   

  	
  Title:

  	
  Chairman
  and Chief Executive Officer

  

 

 

	
   

  	
  PARTICIPANT

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Donnie Dale Dent

  
	
   

  	
  Name:

  	
  DONNIE
  DALE DENTEXHIBIT 10.5

 

FIRST AMENDMENT TO THE

CANO PETROLEUM, INC.

NONQUALIFIED STOCK OPTION
AGREEMENT

 

This
FIRST AMENDMENT (the “Amendment”)
to the Nonqualified Stock Option Agreement (the “Agreement”)
dated December 28, 2006, is hereby made and entered as of the 2nd day of
January, 2008 by and between Cano Petroleum, Inc., a Delaware corporation
(the “Company”) and Donnie Dale
Dent (the “Participant”).  Terms used in this Amendment with initial
capital letters that are not otherwise defined herein shall have the meanings
ascribed to such terms in the Agreement.

 

WHEREAS, Section 24 of the Agreement provides that the
parties to the Agreement may change or modify the Agreement in a writing signed
by the parties; and

 

WHEREAS, the parties desire to amend the Agreement’s
vesting provisions to reflect changes made by the Compensation Committee of
Cano Petroleum, Inc. and the Board of Directors, on June 28, 2007 and
the Participant’s resignation as a director in good standing from the Board of
Directors as determined by Cano Petroleum’s Compensation Committee on December 12,
2007.

 

NOW THEREFORE, pursuant to Section 24 of the
Agreement, in consideration of the mutual promises, conditions and covenants
contained herein and in the Agreement, and other good and valuable consideration,
the adequacy of which is hereby acknowledged, the parties agree as follows:

 

1.                                       Sections 3 and
4 of the Agreement shall be amended in their entirety to read as follows:

 

3.               and 4.  Vesting; Time of Exercise.  100% of the total Optioned Shares shall vest
immediately upon the Participant’s resignation on December 12, 2007, and
the Stock Option shall become exercisable for an extended period of Twenty-Four
(24) months from the date of resignation with the exercise period ending at 5 p.m.
on December 12, 2009.

 

2.                                       Section 27.a.
of the Agreement shall be amended to read as follows:

 

a.                                       Notice to the
Company shall be addressed and delivered as follows:

 

Cano Petroleum, Inc.

Burnett Plaza

801 Cherry Street

Suite 3200, Unit 25

Fort Worth, TX  76102

Attn:  Corporate Secretary

 

 

 

IN WITNESS WHEREOF, the parties hereto have
executed this Amendment the day and year first above written.

 

	
   

  	
  CANO
  PETROLEUM, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  S. Jeffrey Johnson

  	
   

  
	
   

  	
  Name:

  	
  S.
  Jeffrey Johnson

  	
   

  
	
   

  	
  Title:

  	
  Chairman
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PARTICIPANT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Donnie Dale Dent

  	
   

  
	
   

  	
  Name:

  	
  DONNIE
  DALE DENTEXHIBIT 10.6

 

SUMMARY SHEET: 2008 NON-EMPLOYEE DIRECTOR COMPENSATION CHANGES

 

Effective
on January 1, 2008, Cano Petroleum, Inc. increased the annual
retainer for each non-employee director from $25,000 to $30,000 and increased
the annual retainer for the chairman of the Compensation Committee from $3,000
to $10,000.Exhibit 10.1

 

6 November 2007

 

Mr JJ Haley 

President and Chief Executive Officer 

Watson Wyatt Worldwide, Inc 

901 N. Glebe Road 

Arlington, VA 22203

 

Dear John

 

Contingent
Stock

 

In accordance with
Schedule 7 to the Business Transfer Agreement (“BTA”), we hereby 

confirm that we agree the Purchaser’s determination of the 2007 Net Revenue and
the 

2007 Aggregate Staff Costs.  Since it
falls 40 Business Days after the date on which a 

statement of the aforementioned amounts was delivered to Ringley House LLP,
today, 

November 6, 2007, becomes the Final Determination Date for the purposes of
the BTA.

 

According to Clause 4.4
of the BTA, Watson Wyatt Worldwide, Inc is required to issue 

the Contingent Stock within 10 Business Days of today’s date - that is, by
Tuesday 

November 20, 2007. However, we have requested that the issue of the
Contingent Stock 

be deferred until on or after 14 April 2008, and accordingly we agree that
this provision 

of the BTA should be waived and replaced by a requirement to issue the
Contingent 

Stock not later than 30 April 2008.

 

We confirm that former
Main Partners are aware that they will not be entitled to 

dividends on the Contingent Stock until it is issued, and that this will apply
regardless of 

the dividend policy of Watson Wyatt Worldwide, Inc.

 

For and on behalf of
Ringley House LLP,

 

	
  /s/Nick Drumbeck

  	
   

  	
  /s/ Ian Skinner

  
	
   

  	
   

  	
   

  
	
  Nick Dumbreck

  	
   

  	
  Ian Skinner

  
	
  Designated Member

  	
   

  	
  Designated Member

  

 

 

 

Ringley House LLP 

Watson House, London Road, Reigate, Surrey RH2 9PQ, UK\+44(0)1737 241144
Telephone\+44 (0)1737 241496 Fax

 

Ringley
House LLP is a limited liability partnership registered in England and Wales

Registration number: OC 301975, Registered address: Watson House, London Road,
Reigate, Surrey RH2 9PQ.EXHIBIT 10.1

 

Base Salary and Target
Bonus Levels

for Named Executive
Officers (and President)

under Annual
Incentive Plan for 2008

 

	
   

  	
   

  	
  2008

  Base Salary

  	
   

  	
  2008

  Target Bonus

  As a Percentag

  of Base Salary

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Daniel D. Rosenthal

  President and Chief Executive Officer

  	
   

  	
  $

  	
  650,000

  	
   

  	
  120

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Frederic R. McGill

  President 

  	
   

  	
  $

  	
  590,000  

  	
   

  	
  100  

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Brian E. Côté

  Executive Vice President and Chief Financial Officer 

  	
   

  	
  $

  	
  310,000

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thomas E. Prince

  Chief Operating Officer

  	
   

  	
  $

  	
  520,000

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cliff J. Piscitelli

  Executive Vice President and Director of Asset Management

  	
   

  	
  $

  	
  413,000

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jon A. MacDonald

  Executive Vice President and General Counsel

  	
   

  	
  $

  	
  330,000

  	
   

  	
  75

  	
  %EXHIBIT 10.2

 

ANNUAL INCENTIVE PLAN

 

DOWNEY FINANCIAL CORP.

 

2008 Annual Incentive
Plan

Executive Management

 

OBJECTIVE

 

The
Downey Financial Corp. Annual Incentive Plan (the “Plan”) is designed to
motivate and reward eligible executive management of Downey Financial Corp.,
Downey Savings and Loan Association, F.A., and DSL Service Company (the “Company”)
for performance that results in achievement of key organizational and
individual executive goals.  Objectives
are established to align executives’ interest and performance with the
interests of Downey Financial Corp.

 

ELIGIBILITY

 

Those
eligible to participate in this Plan include executives with broad
responsibility and decision-making authority who have a major impact on the
results of their own functional areas and on the overall performance of the
Company.  Plan participation and
participation level (expressed as a percentage of base salary) is subject to
the approval of the Compensation Committee and the Board of Directors and may
be modified by the Board.  For those
individuals who become eligible to participate after January 1, 2008, the
incentive award will be prorated for the percentage of the year the employee is
eligible to participate.  If an eligible
employee receives a base salary adjustment during the Plan Year, the annual
base salary will be prorated for the percentage of the year each salary was in
effect and the incentive payment will be calculated on the adjusted base
salary.

 

PERFORMANCE MEASURES

 

The Plan consists of two separate measurement
factors which are combined to establish the total incentive opportunity.  A participant’s ability to earn any portion
of the incentive is based on the successful attainment of the Company’s
Business Performance as measured by net income and the individual performance
of participants.

 

BUSINESS PERFORMANCE

 

In
determining any potential award, the business performance component will be
based on a Net Income target of [*].  In
order for any award to be paid, the Business Performance Percentage must be
100% or greater.

 

*
confidential information has been omitted

 

INDIVIDUAL PERFORMANCE

 

Individual performance will be evaluated and a
performance rating established by the Chief Executive Officer, and reviewed by
the Compensation Committee and the Board of Directors of Downey. In making this
evaluation, appropriate weight is given to the degree of achievement of
pre-determined division/department objectives as well as evaluation of job
responsibilities and performance factors.

 

The
table below summarizes the Individual Performance ratings and corresponding
Individual Performance Percentages.

 

 

	
   

  	
   

  	
  Individual

  	
   

  
	
   

  	
   

  	
  Performance

  	
   

  
	
  Individual Performance

  	
   

  	
  Percentage

  	
   

  
	
  5 — Outstanding
  Performance

  	
   

  	
  110%
  - 120

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  4 — Exceeds Expectations

  	
   

  	
  100%
  - 110

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  3 — Meets Expectations

  	
   

  	
  80%
  - 100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2 — Needs Improvement

  	
   

  	
  0%
  - 80

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  1 — Not Performing Job

  	
   

  	
  0

  	
  %

  

 

 

CALCULATION
OF AWARD

 

The
actual award received, if any, will be based on the following Formula (see
attached example):

 

	
  Base

  	
   

  	
   

  	
   

  	
  Individual
  Target

  	
   

  	
   

  	
   

  	
  Business

  	
   

  	
   

  	
   

  	
  Individual

  	
   

  	
   

  	
   

  	
   

  
	
  Salary

  	
   

  	
  x

  	
   

  	
  Bonus
  %

  	
   

  	
  x

  	
   

  	
  Performance
  %

  	
   

  	
  x

  	
   

  	
  Performance
  %

  	
   

  	
  =

  	
   

  	
  Bonus

  

 

PAYMENT

 

Overall
performance will be assessed and awards under this Plan will be paid, if at
all, within 60 days after the end of the Plan Year.  The participant must be actively employed on
the date of the payout in order to receive an incentive payment, unless
termination is due to death, incapacitation or retirement.  Payment will be prorated in these situations.  All payments are subject to applicable tax
withholdings as well as any 401(k) and/or deferred compensation
deductions.

 

TERMINATION AND MODIFICATION

 

This
Plan will be reviewed periodically to evaluate its effectiveness.  The Board of Directors has the authority, in
its sole and subjective discretion, to modify or terminate all or any part of
this Plan at any time with or without notice.

 

EFFECTIVE DATE

 

The
Plan operates on a fiscal year basis and this Plan summary is effective January 1,
2008 and amends all prior Annual Incentive Plans for Executive Management
previously approved by the Board of Directors of Downey Financial Corp. and/or
its affiliates, including the plan approved on April 28, 1993.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]