Document:

exv10w1

 

Exhibit 10.1

CHEVRON CORPORATION

NON-EMPLOYEE DIRECTORS’ EQUITY COMPENSATION AND DEFERRAL PLAN

As Adopted by the Board of Directors Effective March 26, 2003 and

Approved by the Stockholders on May 22, 2003, and as

Amended and Restated on December 6, 2006 to be Effective January 1, 2005

Amended and Restated on February 28, 2007

Amended and Restated on April 25, 2007

	1.	 	PURPOSE.
	 
	 	 	The Chevron Corporation Non-Employee Directors’ Equity Compensation and Deferral Plan is a
merger and an amendment and restatement of the Chevron Restricted Stock Plan for Non-Employee
Directors and the Chevron Corporation Deferred Compensation Plan for Directors. The purposes
of the Plan are to attract and retain qualified individuals not employed by Chevron
Corporation or its subsidiaries or affiliates to serve on the Board of Directors of the
Corporation and to align the interests of such Directors with those of the stockholders of
the Corporation.
	 
	2.	 	DEFINITIONS.
	 
	 	 	For purposes of the Plan, the following terms shall have the meanings set forth below:

	 	(a)	 	“Account” means the bookkeeping account maintained on behalf of a
Director to which shall be credited any amount described in Section 9.
	 
	 	(b)	 	“Annual Meeting” means the annual meeting of the stockholders of the
Corporation.
	 
	 	(c)	 	“Annual Cash Retainer” means any yearly fees, including the Committee
chair retainer, payable in cash to a Director for service as a non-employee Director
during a 12-month period, or fees that are prorated to the Board’s discretion, including
the Committee chair retainer, payable in cash to a Director who is elected between
Annual Meetings for service as a non-employee Director during a period which is less
than 12 months.
	 
	 	(d)	 	“Award” or “Awards” means a grant of an Option, Restricted Stock
or Stock Units under the Plan.
	 
	 	(e)	 	“Board” means the Board of Directors of the Corporation.
	 
	 	(f)	 	“Change in Control” shall have the meaning set forth in Article VI of the
By-Laws of the Corporation, as such By-Laws may be amended from time to time.
	 
	 	(g)	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	(h)	 	“Committee” means the Board Nominating and Governance Committee.
	 
	 	(i)	 	“Common Stock” means the $0.75 par value common stock of the Corporation
or any security of the Corporation identified by the Committee as having been issued in
substitution, exchange or lieu thereof.
	 
	 	(j)	 	“Corporation” means Chevron Corporation, a Delaware corporation, or any
successor corporation.
	 
	 	(k)	 	“Director” means a member of the Board who is not employed by the
Corporation or its subsidiaries or affiliates.
	 
	 	(l)	 	“Disability” means a condition which causes a Director to be unable, by
reason of any medically determinable physical or mental impairment which can be expected
to last for a continuous period of not less than 12

48

 

Exhibit 10.1

	 	 	 	months, to engage in any essential activity required of a Director. Whether a
Director has a Disability shall be determined by the Committee on the basis of
competent medical evidence.
	 
	 	(m)	 	“Discretionary Transaction” shall mean a transaction pursuant to any
benefit plan that: (i) is at the volition of a plan participant; (ii) is not made in
connection with the participant’s death, disability, retirement or termination of
employment; (iii) is not required to be made available to a plan participant pursuant to
a provision of the Internal Revenue Code; and (iv) results in either an intra-plan
transfer involving an equity securities fund of the Corporation, or a cash distribution
funded by a volitional disposition of an equity security of the Corporation, or
otherwise as such term is defined under Rule 16b-3(b)(1) of the Exchange Act or
successor provision thereto.
	 
	 	(n)	 	“Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, or any successor statute.
	 
	 	(o)	 	“Fair Market Value” of a Share as of a specified date means the price per
share at which Shares were traded at the close of business on such date as reported on
the New York Stock Exchange (or other established exchange or exchanges) or, if no
trading of Common Stock is reported for that day, the preceding day on which trading was
reported.
	 
	 	(p)	 	“Option” means a nonstatutory stock option awarded pursuant to the Plan.
“Option Agreement” means the agreement between the Corporation and the Director that
contains the terms and conditions pertaining to an Option.
	 
	 	(q)	 	“Plan” means the Chevron Corporation Non-Employee Directors’ Equity
Compensation and Deferral Plan, as amended from time to time.
	 
	 	(r)	 	“Restricted Stock” means Shares awarded pursuant to Section 7.
	 
	 	(s)	 	“Restriction Period” means the period of time commencing with the date of
grant of a Restricted Stock Award and ending on the date on which all Shares of
Restricted Stock in such Award either vest or are forfeited.
	 
	 	(t)	 	“Rules” means regulations and rules adopted from time to time by the
Committee to interpret or administer the Plan.
	 
	 	(u)	 	“Share” means one share of Common Stock, adjusted in accordance with
Section 10 (if applicable).
	 
	 	(v)	 	“Stock Unit” means a right to receive, in accordance with the provisions
set forth herein and in the Rules, a Share.

	3.	 	ADMINISTRATION.

	 	(a)	 	Composition and Powers of the Committee.
	 
	 	 	 	Unless otherwise designated by the Board, the Plan shall be administered by the Board
Nominating and Governance
Committee. The Committee shall have the power to construe and interpret the Plan and the
Rules and to make all other
determinations necessary for the administration of the Plan. Subject to the requirements
of applicable law, the
Committee may designate persons other than members of the Committee to carry out its
responsibilities and may
prescribe such conditions and limitations as it may deem appropriate. Any determination,
decision or action of the
Committee in connection with the construction, interpretation, administration or
application of the Plan shall be final,
conclusive and binding on all persons. The Committee shall consist of two or more
Directors who satisfy the
requirements of Rule 16b-3 (or its successor) under the Exchange Act to the extent
necessary for grants of Awards to the
Directors under Section 16 of the Exchange Act.
	 
	 	(b)	 	Liability of Board and Committee Members.
	 
	 	 	 	No member of the Board or the Committee shall be liable for any action or determination
made in good faith by the
Board or the Committee with respect to the Plan or any Award under it.

49

 

Exhibit 10.1

	 	(c)	 	Administration of the Plan Following a Change in Control. 
	 
	 	 	 	Within 30 days after the occurrence of a Change in Control, the Committee shall appoint an
independent organization
which shall thereafter administer the Plan and have all of the powers and duties formerly
held and exercised by the
Committee with respect to the Plan as provided in Section 3(a). Upon such appointment, the
Committee shall cease to
have any responsibility with respect to the administration of the Plan.

	4.	 	DURATION OF THE PLAN AND SHARES SUBJECT TO THE PLAN.

	 	(a)	 	Duration of the Plan.
	 
	 	 	 	The Plan shall remain in effect until terminated by the Board.
	 
	 	(b)	 	Shares Subject to the Plan.
	 
	 	 	 	The maximum number of Shares for which Awards may be granted under the Plan is 800,000
Shares (adjusted for the
two-for-one stock split dated September 10, 2004), including the number of Shares
previously authorized for use but
unissued pursuant to the Chevron Restricted Stock Plan for Non-Employee Directors. The
limitation set forth in this
Section 4(b) shall be subject to adjustment as provided in Section 10.
	 
	 	(c)	 	Accounting for Numbers of Shares.
	 
	 	 	 	For the purpose of computing the total number of Shares available for Awards under the Plan
there shall be counted
against the limitation under the Plan the number of Shares issued or subject to issuance
upon exercise or settlement of
Options and Restricted Stock Awards granted and the number of Shares that equals the number
of Stock Units granted,
determined as of the dates on which Stock Unit Awards are granted. Dividends paid,
dividend equivalents granted and
interest or other amounts credited with respect to any Award outstanding under the Plan
shall not apply against the Plan
limitation.
	 
	 	 	 	If Stock Units, Restricted Stock or Shares issued upon the exercise of Options are
forfeited or otherwise terminated
before exercise or settlement, then the corresponding Shares shall again become available
for Awards under the Plan. If
Stock Units are settled, then only the number of Shares (if any) actually issued in
settlements of such Stock Units shall
reduce the number available for Awards.
	 
	 	(d)	 	Source of Stock Issued Under the Plan.
	 
	 	 	 	Common Stock issued under the Plan may be either authorized and unissued Shares or issued
Shares that have been
reacquired by the Corporation, as determined in the sole discretion of the Committee. No
fractional Shares shall be
issued under the Plan.

	5.	 	PERSONS ELIGIBLE FOR AWARDS.
	 
	 	 	Members of the Board who are not employees of the Corporation or its subsidiaries or
affiliates are eligible for Awards. A Director may receive more than one Award, including
Awards of the same type, subject to the restrictions of the Plan.
	 
	6.	 	OPTIONS.
	 
	 	 	Each Director may be awarded an Option to purchase that number of Shares determined pursuant
to the Rules. All such Options shall be subject to the following terms and conditions and
shall contain such additional terms and conditions, not inconsistent with the express
provisions of the Plan, as the Committee in its sole discretion shall deem desirable.

	 	(a)	 	Option Awards.

50

 

Exhibit 10.1

	 	 	 	The terms of each Option shall be set forth in an Option Agreement, which shall contain
such provisions not inconsistent
with the terms of the Plan, including, without limitation, restrictions upon the exercise
of the Option, as the Committee
shall deem advisable in its sole discretion. Any Option may be sold, assigned,
transferred, pledged or otherwise
encumbered only as specifically permitted in the Rules.
	 
	 	(b)	 	Number of Shares Covered by Option.
	 
	 	 	 	Each Option shall state the number of Shares to which it pertains and shall provide for the
adjustment thereof in
accordance with the provisions of Section 10. No fractional Shares shall be issued
pursuant to the exercise of an Option.
	 
	 	(c)	 	Exercise Price.
	 
	 	 	 	The exercise price of each Share covered by an Option shall be one hundred percent (100%)
of the Fair Market Value of
a Share on the date the Option is awarded.
	 
	 	(d)	 	Rights as a Stockholder.
	 
	 	 	 	A Director who has been awarded an Option or any transferee of an Option (to the extent
transfers of an Option are
permitted under the Rules) shall have no rights with respect to any Shares covered by his
or her Option until the date
such interest is recorded as a book entry on the records of the Corporation. No adjustment
shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or distributions
or other rights for which the
record date is prior to the date the Director’s interest is recorded as a book entry on the
records of the Corporation, except
as provided elsewhere in this Plan or in the Rules.
	 
	 	(e)	 	Nonstatutory Stock Options.
	 
	 	 	 	All Options shall be designated as nonstatutory stock options which do not qualify as
incentive stock options under
Section 422 of the Code.

	7.	 	RESTRICTED STOCK.
	 
	 	 	Awards of Restricted Stock shall be subject to the following terms and conditions and to such
additional terms and conditions, not inconsistent with the express provisions of the Plan, as
the Committee in its sole discretion shall deem desirable.

	 	(a)	 	Awards.
	 
	 	 	 	As of the date of each Annual Meeting at which a Director is elected to serve on the Board,
each such Director may receive
an Award of a specified number of shares of Restricted Stock, the number to be determined
by the Board in its sole
discretion by resolution adopted on or before the date of the applicable Annual Meeting.
The Board, in its sole discretion,
may grant to a Director who is elected to the Board between Annual Meetings an Award of a
proportionate number of shares
of Restricted Stock, the number to be determined by the Board in its sole discretion by
resolution adopted on or before the
grant date of the Restricted Stock Award. The grant date of the Restricted Stock Award
shall be on or after the date the
Director begins providing services as a Director. This annual Restricted Stock Award shall
be subject to adjustment as
provided in Section 10.
	 
	 	(b)	 	Terms and Conditions of Awards.
	 
	 	 	 	The terms of each Restricted Stock Award shall be set forth in Rules, which Rules shall
contain such provisions (including,
without limitation, rules regarding vesting and forfeiture) as the Committee determines to
be necessary or appropriate to
carry out the intent of the Plan with respect to such Award. Except as otherwise provided
in the Rules, any Restricted
Stock Award may not be sold, assigned, transferred, pledged or otherwise encumbered prior
to the date all applicable
restrictions lapse. The Corporation shall maintain in its records a book entry account to
which the Shares represented by
each Restricted Stock Award shall be credited. The shares in the book entry account
represented by such Restricted Stock

51

 

Exhibit 10.1

	 	 	 	Award shall be subject to the terms, conditions, and restrictions applicable to such Award.
The Committee shall require
that no change shall be made in the book entry account representing a Restricted Stock
Award until the restrictions thereon
shall have lapsed. At that time, a book entry shall be made in the records of the
Corporation in the name of the Director in
the amount of Shares as to which the restrictions have lapsed.
	 
	 	(c)	 	Stockholders’ Rights.
	 
	 	 	 	Except as provided in the Rules, the holders of Restricted Stock Awards shall have the same
voting, dividend and other
rights as the Corporation’s other stockholders.

	8.	 	STOCK UNITS.

	 	(a)	 	Awards.
	 
	 	 	 	Each Stock Unit Award shall be subject to the terms and conditions set forth in the Rules.
	 
	 	(b)	 	Number of Shares Covered by Stock Units.
	 
	 	 	 	As of the date of each Annual Meeting at which a Director is elected to serve on the Board
until the following Annual
Meeting, each such Director shall receive an Award of a specified number of Stock Units,
the number and time of award
to be determined by resolution adopted by the Board on or before the date of the applicable
Annual Meeting. The Board,
in its sole discretion, may grant to a Director who is elected to the Board between Annual
Meetings an Award of a
proportionate number of shares of Stock Units, the number to be determined by the Board in
its sole discretion by
resolution adopted on or before the grant date of the Stock Unit Award. The grant date of
the Stock Unit Award shall be
on or after the date the Director begins providing services as a Director. Stock Unit
Awards shall be subject to adjustment
as provided in Section 10.
	 
	 	(c)	 	Terms and Conditions.
	 
	 	 	 	In addition to the terms and conditions specified in the Rules, Stock Unit Awards made
pursuant to this Section 8 shall be
subject to the following:

	 	(i)	 	Except as otherwise provided in the Rules, any Stock Unit Award may
not be sold, assigned, transferred, pledged or otherwise encumbered prior to the
date on which the Shares are issued or the Award becomes payable.
	 
	 	(ii)	 	The Rules shall contain provisions dealing with the disposition of
Stock Unit Awards in the event of a termination of an individual’s status as a
Director.

	 	(d)	 	Stockholders’ Rights.
	 
	 	 	 	Unless and until such time as a Director receives a distribution of all or a portion of a
Stock Unit Award in the form of
Shares and prior to the date the Director’s interest in such Shares is recorded as a book
entry on the records of the
Corporation, the Director shall have no dividend rights, voting rights or other rights as a
stockholder with respect to such
Shares covered by his or her Stock Unit Award. The holders of Stock Units shall have no
voting rights. Prior to settlement
or forfeiture, if the Rules so provide, any Stock Unit awarded under the Plan may carry
with it dividend equivalents. Such
right entitles the holder to be credited with an amount equal to all cash dividends paid on
one Share while such Stock Unit is
outstanding. Dividend equivalents may be converted into additional Stock Units, as
provided in the Rules.
	 
	 	(e)	 	Stock Unit Accounts.
	 
	 	 	 	The “stock unit account” of each Director who received an award of “stock units” under the
Chevron Corporation Restricted
Stock Plan for Non-Employee Directors with respect to service as a Director prior to the
1997 Annual Meeting shall

52

 

Exhibit 10.1

	 	 	 	continue to be maintained pursuant to the terms of such plan as in effect prior to April
30, 1997.

	9.	 	DEFERRED COMPENSATION.

	 	(a)	 	Optional Deferral. A Director may elect to defer receipt of all or a
portion of the Annual Cash Retainer.
	 
	 	(b)	 	Rules Regarding Deferrals. The Committee shall promulgate Rules, in
accordance with Section 409A of the Code, governing (i) elections by Directors to defer
all or any part of the Director’s Annual Cash Retainer, (ii) the establishment of
Accounts to which shall be credited amounts deferred, (iii) the designation of
investments to be used to measure the value of such Accounts, (iv) the crediting of
interest or earnings to such Accounts, and (v) the time, form and value of distributions
from such Accounts.

	10.	 	RECAPITALIZATION.
	 
	 	 	Subject to any required action by the stockholders, the number of Shares covered by the Plan
as provided in Section 4, the number of Shares covered by or referred to in each outstanding
Award and the exercise price, if applicable, of each outstanding Award shall be
proportionately adjusted for: (a) any increase or decrease in the number of issued and
outstanding Shares resulting from a subdivision or combination or consolidation of issued and
outstanding Shares by reclassification or otherwise, (b) the payment of a stock dividend (but
only of Common Stock) or any other increase or decrease in the number of such Shares effected
without receipt of consideration by the Corporation, (c) the declaration of a dividend
payable in a form other than Shares in an amount that has a material effect on the price of
issued Shares, or (d) a recapitalization, spinoff or similar occurrence.
	 
	 	 	In the event of a dissolution or liquidation of the Corporation or a merger, consolidation or
other reorganization, the Shares subject to each non-vested Award shall be handled in
accordance with the terms of the agreement of merger, consolidation or reorganization which
may provide for the full vesting, cash-out or assumption of such Awards.
	 
	 	 	The Committee shall prescribe Rules governing the adjustment of the number of Shares covered
by the Plan as provided in Section 4, the number of Shares covered by or referred to in each
outstanding Award and the exercise price, if applicable, of each outstanding Award in the
event that preferred stock purchase rights issued pursuant to any stockholder rights plan
detach from the Common Stock and become exercisable.
	 
	 	 	Except as provided in this Section 10, a Director shall have no rights by reason of any
subdivision or consolidation of shares of stock of any class, the payment of any dividend or
any other increase or decrease in the number of shares of stock of any class. Except as
provided in this Section 10, any issue by the Corporation of shares of stock of any class, or
securities convertible into shares of stock of any class, shall not affect, and no adjustment
by reason thereof shall be made with respect to, the number or exercise price of Shares
subject to an Award. The grant of an Award pursuant to the Plan shall not affect in any way
the right or power of the Corporation to make adjustments, reclassifications, or
reorganizations or changes of its capital or business structure, to merge or consolidate or
to dissolve, liquidate, sell or transfer all or any part of its business or assets.
	 
	11.	 	SECURITIES LAW REQUIREMENTS.
	 
	 	 	No Shares shall be issued and no Options shall become exercisable pursuant to the Plan unless
and until the Corporation has determined that: (i) it and the Director have taken all
actions required to register the Shares under the Securities Act of 1933, as amended, or
perfect an exemption from the registration requirements thereof; (ii) any applicable listing
requirement of any stock exchange on which the Common Stock is listed has been satisfied; and
(iii) any other applicable provision of state or federal law has been satisfied.
	 
	12.	 	AMENDMENTS OF THE PLAN AND AWARDS.

	 	(a)	 	Plan Amendments.

53

 

Exhibit 10.1

	 	 	 	The Board may, insofar as permitted by law, from time to time and in its discretion, with
respect to any Shares at the time
not subject to Awards, suspend the Plan or revise or amend it in any respect whatsoever
without stockholder approval.
However, unless the Board specifically otherwise provides, any revision or amendment that
would cause the Plan to fail
to comply with any requirement of applicable law or regulation if such amendment were not
approved by the
stockholders of the Corporation shall not be effective unless and until the approval of the
stockholders of the Corporation
is obtained.
	 
	 	(b)	 	Amendments of Awards.
	 
	 	 	 	Subject to the terms and conditions and within the limitations of the Plan, the Board may
amend, cancel, modify, extend
or renew outstanding Awards granted under the Plan, or accept the exchange of outstanding
non-vested Awards (to the
extent not theretofore exercised) for the granting of new Awards in substitution therefore.
	 
	 	(c)	 	Rights of Directors.
	 
	 	 	 	No amendment, suspension or termination of the Plan nor any amendment, cancellation or
modification of any Award
outstanding under it that would adversely affect the right of any Director in an Award
previously granted under the Plan
shall be effective without the written consent of the affected Director.

	13.	 	TERMINATION OF THE PLAN

	 	(a)	 	Termination.
	 
	 	 	 	The Committee may terminate the Plan at any time. In the event of termination of the Plan,
any deferred amounts may
be distributed within the period beginning twelve months after the date the Plan was
terminated and ending twenty-four
months after the date the Plan was terminated, or pursuant to Sections IV-VI of the Rules,
if earlier. If the Plan is
terminated and deferred amounts are distributed, the Corporation shall terminate all
account balance non-qualified
deferred compensation plans with respect to all participants and shall not adopt a new
account balance non-qualified
deferred compensation plan for at least five years after the date the Plan was terminated.
	 
	 	(b)	 	Dissolution or Bankruptcy
	 
	 	 	 	The Plan shall automatically terminate upon a dissolution of the Corporation that is taxed
under Code section 331 or with
the approval of a bankruptcy court pursuant to 11 U.S.C. section 503(b)(1)(A), provided
that the deferred amounts are
distributed and included in the gross income of the Directors by the latest of (i) the
calendar year in which the Plan
terminates or (ii) the first calendar year in which payment of the deferred amounts is
administratively practicable.

	14.	 	GENERAL PROVISIONS.

	 	(a)	 	Application of Funds.
	 
	 	 	 	The proceeds received by the Corporation from the sale of Common Stock pursuant to the
exercise of an Option shall be
used for general corporate purposes.
	 
	 	(b)	 	Creditors’ Rights.
	 
	 	 	 	Directors shall have no rights other than those of a general creditor of the Corporation
with respect to Stock Unit Awards and
any Account established pursuant to Section 9. These interests shall represent unfunded
and unsecured obligations of the
Corporation, subject to the terms and conditions of the applicable Rules.
	 
	 	(c)	 	No Obligation to Exercise Option.
	 
	 	 	 	The award of an Option shall impose no obligation upon the Director to exercise such Option.

54

 

Exhibit 10.1

	 	(d)	 	Costs of the Plan.
	 
	 	 	 	The costs and expenses of administering the Plan shall be borne by the Corporation.
	 
	 	(e)	 	Director’s Beneficiary.
	 
	 	 	 	The Rules may provide that a Director may designate a beneficiary with respect to any Award
in the event of death of such
Director. If such beneficiary is the executor or administrator of the estate of the
Director, any rights with respect to such
Award may be transferred to the person or persons or entity (including a trust, if
permitted under the Rules) entitled thereto
by bequest of or inheritance from the holder of such Award.
	 
	 	(f)	 	Prohibition of Opposite Way Transactions.
	 
	 	 	 	To the extent any transactions executed by a Director in securities of the Corporation
would be considered a non-exempt
purchase or sale of an equity security of the Corporation for purposes of the short-swing
profit recovery provisions of
Section 16(b) of the Exchange Act, such Director shall be prohibited from executing, or
electing to enter into, any
transaction relating to or resulting from Awards under this Plan that would be considered
an opposite way transaction within
six months from such prior non-exempt transaction.
	 
	 	 	 	In addition, a Director shall be prohibited from engaging in, or electing to engage in, a
Discretionary Transaction under the Plan if the election to engage in such transaction is less than six months after an
election to engage in an opposite way
Discretionary Transaction under any benefit plan of the Corporation, including this Plan.
	 
	 	(g)	 	Severability.
	 
	 	 	 	The provisions of the Plan shall be deemed severable and the validity or unenforceability
of any provision shall not affect the
validity or enforceability of the other provisions hereof.
	 
	 	(h)	 	Binding Effect of Plan.
	 
	 	 	 	The Plan shall be binding upon and shall inure to the benefit of the Corporation, its
successors and assigns and the
Corporation shall require any successor or assign to expressly assume and agree to perform
the Plan in the same manner and
to the same extent that the Corporation would be required to perform it if no such
succession or assignment had taken place.
The term “the Corporation” as used herein shall include such successors and assigns. The
term “successors and assigns” as
used herein shall mean a corporation or other entity directly or indirectly acquiring all
or substantially all the assets and
business of the Corporation (including the Plan) whether by operation of law or otherwise.
	 
	 	(i)	 	No Waiver of Breach.
	 
	 	 	 	No waiver by either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or
provision of the Plan to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions of
conditions at the same or at any prior or subsequent time.
	 
	 	(j)	 	Authority to Establish Grantor Trust.
	 
	 	 	 	The Committee is authorized in its sole discretion to establish a grantor trust for the
purpose of providing security for the
payment of Awards under the Plan; provided, however, that no Director shall be considered
to have a beneficial ownership
interest (or any other sort of interest) in any specific asset of the Corporation or of its
subsidiaries or affiliates as a result of
the creation of such trust or the transfer of funds or other property to such trust.

55

 

Exhibit 10.1

	15.	 	APPROVAL OF STOCKHOLDERS.
	 
	 	 	Adoption of the Plan shall be subject to approval by affirmative vote of the stockholders of
the Corporation in accordance with applicable law.

56exv10w48

 

Exhibit 10.48

ESCROW AGREEMENT

     This Escrow Agreement (this “Agreement”) is dated as of the                      th day of
June, 2006, among Gran Tierra Energy, Inc. (the “Company”) and McGuireWoods LLP (the “Escrow
Agent”).

Recitals:

     Whereas, the Company is offering to sell up to 50,000,000 units (“Units”) of its
securities for an aggregate offering price of $75,000,000 (the “Offering”). Each Unit consists of
one share of the Company’s common stock, par value $0.001 per share (“Common Stock”) and a warrant
to purchase one half share of the Company’s Common Stock for five years at an exercise price of
$1.75 per whole share;

     Whereas, on June 20, 2006, the Company conducted an initial closing of the Offering
selling 43,336,051 Units of its securities and deriving gross proceeds of $65,004,076;

     Whereas, the closing of the Offering is expected to occur on or about June 30, 2006
(the “Closing Date”);

     Whereas, the investors in the Offering (the “Investors”), in connection with their
intent to purchase Units in the Offering, shall execute and deliver Subscription Agreements (the
“Subscription Agreements”), Securities Purchase Agreements (the “Securities Purchase Agreements”)
and Purchaser Questionnaires (the “Purchaser Questionnaires”) memorializing the Investors’
agreement to purchase and the Company’s agreement to sell the number of Units set forth therein
(the “Investor’s Units”) and Registration Rights Agreements (the “Registration Rights Agreements”)
pursuant to which the Company will provide certain registration rights related to the shares of
Common Stock underlying the Units and the Investor Warrants on the terms set forth therein (the
Subscription Agreements, Securities Purchase Agreements, Purchaser Questionnaires and Registration
Rights Agreements are collectively referred to as the “Transaction Documents”);

     Whereas, Canaccord Capital Corporation (“Canaccord”) is acting as finder in
connection with the Offering and will be introducing certain investors to the Company (the
“Canaccord Investors”) who will making investments (“Canaccord Investment Proceeds”) through the
purchase of Units from the Company;

     Whereas, the parties hereto desire to provide for the safekeeping of the Transaction
Documents and the Escrowed Funds (as defined in Section 2.1 herein) delivered by Canaccord
Investors until such time as such Transaction Documents and Escrowed Funds are released by the
Escrow Agent in accordance with the terms and conditions of this Agreement; and

     Whereas, the Escrow Agent is willing to serve as escrow agent pursuant to the terms
and conditions of this Agreement.

     Now Therefore, the parties agree as follows:

1

 

ARTICLE I

INTERPRETATION

     1.1 Entire Agreement. This Agreement and the Transaction Documents constitute the entire
agreement between the parties hereto pertaining to the subject matter contained herein and
supersede all prior agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. There are no warranties, representations or other agreements made by the
parties in connection with the subject matter hereof except as specifically set forth in this
Agreement or as set forth in the Transaction Documents.

     1.2 Extended Meanings. In this Agreement words importing the singular number include the
plural and vice versa; words importing the masculine gender include the feminine and neuter
genders. The word “person” includes an individual, body corporate, partnership, or other entity in
whatever form, a trustee or trust or unincorporated association, an executor, administrator or
legal representative.

     1.3 Waivers and Amendments. This Agreement may be amended, modified, superseded, cancelled,
renewed or extended, and the terms and conditions hereof may be waived, only by a written
instrument signed by all parties, or, in the case of a waiver, by the party waiving compliance.
Except as expressly stated herein, no delay on the part of any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any
party of any right, power or privilege hereunder preclude any other or future exercise of any other
right, power or privilege hereunder.

     1.4 Headings. The division of this Agreement into articles, sections, subsections and
paragraphs and the insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Agreement.

     1.5 Law Governing this Agreement. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles of conflicts of
laws. Any action brought by either party against the other concerning the transactions contemplated
by this Agreement may be brought in the state courts of New York or in the federal courts located
in the state of New York. The parties and the individuals executing this Agreement and other
agreements referred to herein or delivered in connection herewith agree to submit to the
jurisdiction of such courts. The prevailing party shall be entitled to recover from the other party
its reasonable attorney’s fees and costs. In the event that any provision of this Agreement or any
other agreement delivered in connection herewith is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any
such provision which may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of any agreement.

     1.6 Specific Enforcement, Consent to Jurisdiction. The Company acknowledges and agrees that
irreparable damage would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise

2

 

breached. It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof or thereof, this being in addition to any other remedy
to which any of them may be entitled by law or equity. Nothing in this Section shall affect or
limit any right to serve process in any other manner permitted by law.

ARTICLE II

DELIVERIES TO THE ESCROW AGENT

     2.1 Subscriber Deliveries. On or before the Closing Date, Canaccord shall have delivered to
the Escrow Agent the purchase price for the Canaccord Investor’s Units less any deduction of fees
and expenses agreed to between the Company and Canaccord (the aggregate funds for all Canaccord
Investors being referred to as the “Escrowed Funds”) by wire transfer of immediately available
funds pursuant to the wire transfer instructions provided below and the completed and executed
Transaction Documents to the address provided below. Canaccord shall have also provided to the
Escrow Agent a reconciliation letter outlining a breakdown of the portion of the Escrowed Funds
received from investors from the province of Alberta, Canada (the “Alberta Escrowed Funds”) and
funds received from investors outside the province of Alberta, Canada (the “Non-Alberta Escrowed
Funds”).

Escrow Agent—Wire Transfer Instructions:

BANK OF AMERICA — Jacksonville, FL

ABA: 026009593 (Domestic Wires)

Swift Code: BOFAUS3N (International Wires)

Credit: McGuireWoods LLP IOLTA Account

Account Number: 2101206537

Reference: Louis Zehil—Gran Tierra Escrow—20461 12-0005

McGuireWoods Accounting Contact: Julie Aaron (804) 775-1224

Bank Contact: Patrick Comia (888) 841-8159, Opt. 2, Ext. 2160

Escrow Agent—Mailing Address and Facsimile Number:

McGuireWoods LLP

50 North Laura Street

Suite 3300

Jacksonville, Florida 32202

Facsimile Number: (904) 798-3260

Attention: Nova D. Harb

Telephone Number: (904) 798-2639

     2.2 Company Delivery of Canaccord Notice. The Company shall deliver to the Escrow Agent,
before providing the Instructions as described in Section 3.1, written notice, acknowledged by
Canaccord (the “Canaccord Notice”), setting forth:

3

 

          (a) a representation that the original warrants to be issued to the Canaccord Investors in
connection with the offering have been delivered to Canaccord pursuant to Canaccord’s delivery
instructions;

          (b) a representation that certificates representing the shares of Common Stock purchased by
the Canaccord Investors have been delivered to Canaccord pursuant to Canaccord’s delivery
instructions;

          (c) a representation that an original warrant to be issued in connection with Canaccord’s
compensation is delivered to Canaccord pursuant to Canaccord’s delivery instructions:

          (d) a representation that Canaccord has provided written confirmation to the Company that the
original warrants and the certificates representing the shares of Common Stock have been received
by Canaccord;

          (e) a representation that subscriptions in the amount of the Canaccord Investment Proceeds
have been accepted by the Company;

          (f) the amount of Common Stock to be issued to Canaccord Investors;

          (g) a list of the Canaccord Investors whose subscriptions were not accepted by the Company, if
any;

          (h) the amount due Canaccord for Canaccord’s commissions and fees;

          (i) the amount of fees to be paid to Canaccord’s counsel; and

          (j) the time, place and method of delivery of all funds to be delivered to the Company,
Canaccord, and Canaccord’s counsel, and to the Canaccord Investors whose subscriptions were
rejected, if any.

     2.3 Intention to Create Escrow over Transaction Documents and Escrowed Funds. The Company
intends that the Transaction Documents and the Escrowed Funds shall be held in escrow by the Escrow
Agent pursuant to this Agreement for its benefit and for the benefit of the Investors. The Escrow
Agent shall provide copies of the Transaction Documents to the Company promptly after their receipt
in order for the Company to determine whether to accept the subscriptions for the Investor’s Units
evidenced thereby.

     2.4 Escrow Agent to Deliver Transaction Documents and Escrowed Funds. The Escrow Agent shall
hold and release the Transaction Documents and the Escrowed Funds only in accordance with the terms
and conditions of this Agreement.

4

 

ARTICLE III

RELEASE OF TRANSACTION DOCUMENTS AND ESCROWED FUNDS

     3.1 Release of Escrow. Subject to the provisions of Sections 4.l(d) and 4.2, the Escrow Agent
shall release the Transaction Documents and Escrowed Funds as follows:

          (a) First Release of Non-Alberta Escrowed Funds and Transaction Documents upon Closing. In
addition to the Canaccord Notice, the Company shall deliver to Escrow Agent written instructions
(the “Instructions”) duly executed by its principal executive officer acknowledging that as of the
Closing Date the conditions to releasing the Non-Alberta Escrowed Funds have been fully satisfied
and specifying the time, place and method of delivery of the Non-Alberta Escrowed Funds, and the
Transaction Documents. The Escrow Agent shall, at the time and place and by the method specified in
the Instructions, deliver the Non-Alberta Escrowed Funds and the Transaction Documents (the “First
Release”).

          (b) Until such time as the Company delivers to Canaccord the Evidence of the Removal of Resale
Restrictions, as described in Section 3.2(d), the Alberta Escrowed Funds will be held in escrow,
and will not be released to the Company. Upon receipt of the Evidence of the Removal of Resale
Restrictions, the Company will provide the Escrow Agent with a notice, acknowledged by Canaccord,
that the Evidence of the Removal of Resale Restrictions has been delivered to and accepted by
Canaccord. If the Company fails to provide Canaccord with Evidence of the Removal of Resale
Restrictions within 60 days of the First Release, or such other date as Canaccord may agree, the
Company will, upon the request of Canaccord, require the Escrow Agent to forthwith return the
Alberta Escrowed Funds to Canaccord upon delivery by Canaccord to the Escrow Agent of the share and
warrant certificates originally issued to Alberta Investors (as described in section 3.2(d).

          (c) Return of Escrowed Funds and Transaction Documents on Rejection of Subscription. In the
event the Company determines it necessary or appropriate to reject the subscription of any
Canaccord Investor for whom the Escrow Agent has received Escrowed Funds and Transaction Documents,
the Company shall deliver written notice of such event to the Escrow Agent which notice shall
include the time, place and method of delivery for the return to such Investor of the Purchase
Price and Transaction Documents delivered by such Investor and the Escrow Agent shall deliver such
funds and documents pursuant to such written notice.

          (d) Delivery Pursuant to Court Order. Notwithstanding an provision contained herein, upon
receipt by the Escrow Agent of a final and non-appealable judgment, order, decree or award of a
court of competent jurisdiction (a “Court Order”), the Escrow Agent shall deliver the Transaction
Documents and the Escrowed Funds in accordance with the Court Order. Any Court Order shall be
accompanied by an opinion of counsel for the party presenting the Court Order to the Escrow Agent
(which opinion shall be satisfactory to the Escrow Agent) to the effect that the court issuing the
Court Order has competent jurisdiction and that the Court Order is final and non-appealable.

5

 

     3.2 Acknowledgement of Company.

          (a) The Company acknowledges that the only terms and conditions upon which the Transaction
Documents and Escrowed Funds are to be released are set forth in Sections 2.2, 3.1, 4.1(d) and 4.2
of this Agreement.

          (b) The Company reaffirms its agreement to abide by the terms and conditions of this Agreement
with respect to the release of the Transaction Documents and the Escrowed Funds.

          (c) The Company acknowledges that any dispute with respect to the release of the Transaction
Documents or Escrowed Funds shall be resolved pursuant to Section 4.2.

          (d) The Company further acknowledges that with respect to any Canaccord Investment Proceeds
received from residents of the Province of Alberta, Canada (the “Alberta Investors”), the Company
will provide Canaccord, within 60 days of the First Release, with such evidence, satisfactory to
Canaccord and its legal counsel, that the securities issued to the Alberta Investors will not be
subject to resale restrictions under the securities laws of the Province of Alberta (“Evidence of
the Removal of Resale Restrictions”).

          (e) The Company shall notify Canaccord, as soon as reasonably practicable, and in any event,
prior to the release of any of the Canaccord Investment Proceeds, when the subscription funds of
the Canaccord Investors have been received by the Escrow Agent. Such notice to Canaccord shall be
deemed made upon e-mail to robert_anderson@canaccord.com and to glenda_chin@canaccord.com by the
Company or the Company’s agent.

ARTICLE IV

CONCERNING THE ESCROW AGENT

     4.1 Duties and Responsibilities of the Escrow Agent. The Escrow Agent’s duties and
responsibilities shall be subject to the following terms and conditions:

          (a) The Company acknowledges and agrees that the Escrow Agent (i) shall not be responsible for
or bound by, and shall not be required to inquire into whether the Company is entitled to receipt
of the Transaction Documents or Escrowed Funds pursuant to, any other agreement or otherwise; (ii)
shall be obligated only for the performance of such duties as are specifically assumed by the
Escrow Agent pursuant to this Agreement; (iii) may rely on and shall be protected in acting or
refraining from acting upon any written notice, instruction, instrument, statement, request or
document furnished to it hereunder and believed by the Escrow Agent in good faith to be genuine and
to have been signed or presented by the proper person or party, without being required to determine
the authenticity or correctness of any fact stated therein or the propriety or validity or the
service thereof; (iv) may assume that any person believed by the Escrow Agent in good faith to be
authorized to give notice or make any statement or execute any document in connection with the
provisions hereof is so authorized; (v) shall not be under any duty to give the property held by
Escrow Agent hereunder any greater degree of care than Escrow Agent gives its own similar property,
but in no event less than a reasonable amount of care; and (vi) may consult counsel satisfactory to
Escrow Agent, the

6

 

opinion of such counsel to be full and complete authorization and protection in respect of any
action taken, suffered or omitted by Escrow Agent hereunder in good faith and in accordance with
the opinion of such counsel.

          (b) The Company acknowledges that the Escrow Agent is acting solely as a stakeholder at their
request and that the Escrow Agent shall not be liable for any action taken by Escrow Agent in good
faith and believed by Escrow Agent to be authorized or within the rights or powers conferred upon
Escrow Agent by this Agreement. The Company agrees to indemnify and hold harmless the Escrow Agent
and any of Escrow Agent’s partners, employees, agents and representatives for any action taken or
omitted to be taken by Escrow Agent or any of them hereunder, including the fees of outside counsel
and other costs and expenses of defending itself against any claim or liability under this
Agreement, except in the case of gross negligence, willful misconduct or material breach of this
Agreement on Escrow Agent’s part committed in its capacity as Escrow Agent under this Agreement.
The Escrow Agent shall owe a duty only to the Company under this Agreement and to no other person.

          (c) The Company agrees to reimburse the Escrow Agent for outside counsel fees, to the extent
authorized hereunder and incurred in connection with the performance of its duties and
responsibilities hereunder.

          (d) The Escrow Agent may at any time resign as Escrow Agent hereunder by giving five (5) days
prior written notice of resignation to the Company. Prior to the effective date of the resignation
as specified in such notice, the Company will issue to the Escrow Agent an Instruction authorizing
delivery of the Transaction Documents and the Escrowed Funds to a substitute Escrow Agent selected
by the Company. If no successor Escrow Agent is named by the Company, the Escrow Agent may apply to
a court of competent jurisdiction in the State of New York for appointment of a successor Escrow
Agent, and to deposit the Transaction Documents and Escrowed Funds with the clerk of any such
court.

          (e) The Escrow Agent does not have and will not have any interest in the Transaction Documents
or the Escrowed Funds, but is serving only as escrow agent, having only possession thereof.

          (f) This Agreement sets forth exclusively the duties of the Escrow Agent with respect to any
and all matters pertinent thereto, and no implied duties or obligations shall be read into this
Agreement.

          (g) The provisions of this Section 4.1 shall survive the resignation of the Escrow Agent or
the termination of this Agreement.

     4.2 Dispute Resolution: Judgments. Resolution of disputes arising under this Agreement shall
be subject to the following terms and conditions:

          (a) If any dispute shall arise with respect to the delivery, ownership, right of possession or
disposition of the Transaction Documents or the Escrowed Funds, or if the Escrow Agent shall in
good faith be uncertain as to its duties or rights hereunder, the Escrow Agent shall be authorized,
without liability to anyone, to (i) refrain from taking any action other than to continue to hold
the Transaction Documents or the Escrowed Funds pending receipt of an

7

 

Instruction from the Company, or (ii) deposit the Transaction Documents and Escrowed Funds
with any court of competent jurisdiction in the State of New York, in which event the Escrow Agent
shall give written notice thereof to the Company and shall thereupon be relieved and discharged
from all further obligations pursuant to this Agreement. The Escrow Agent may, but shall be under
no duty to, institute or defend any legal proceedings which relate to the Transaction Documents or
the Escrowed Funds. The Escrow Agent shall have the right to retain counsel if it becomes involved
in any disagreement, dispute or litigation on account of this Agreement or otherwise determines
that it is necessary to consult counsel.

(b) The Escrow Agent is hereby expressly authorized to comply with and obey any Court Order.
In case the Escrow Agent obeys or complies with a Court Order, the Escrow Agent shall not be liable
to the Investors, the Company or to any other person, firm, corporation or entity by reason of such
compliance.

ARTICLE V

GENERAL MATTERS

     5.1 Termination. This escrow shall terminate upon the disbursement in accordance with the
provisions herein of the Transaction Documents and the Escrowed Funds in full or at any time upon
the agreement in writing of the Company.

     5.2 Notices. All notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall
be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt
requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to
such other address as such party shall have specified most recently by written notice. Any notice
or other communication required or permitted to be given hereunder shall be deemed effective (a)
upon hand delivery or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second business day following the
date of mailing by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for such communications
shall be:

	 	 	 	 	 
	 

	 	(a)
	 	If to the Company, to:
	 
	 	 	 	 
	 

	 	 	 	Gran Tierra Energy Inc.
	 

	 	 	 	300,611-10th Avenue S.W. Floor.
	 

	 	 	 	610-8th Avenue S.W.
	 

	 	 	 	Calgary, Alberta
	 

	 	 	 	Canada
	 

	 	 	 	Attention: James Hart, Chief Financial Officer
	 

	 	 	 	Facsimile: (403) 265-3242

8

 

	 	 	 	 	 
	 

	 	(b)
	 	If to the Escrow Agent, to:
	 
	 	 	 	 
	 

	 	 	 	McGuireWoods LLP
	 

	 	 	 	1345 Avenue of the Americas
	 

	 	 	 	Seventh Floor
	 

	 	 	 	New York, New York 10105
	 

	 	 	 	Attention: Louis W. Zehil, Esq.
	 

	 	 	 	Facsimile Number: (212) 548-2175

or to such other address as any of them shall give to the others by notice made pursuant to this
Section 5.2.

     5.3 Interest. The Escrowed Funds shall not be held in an interest bearing account nor will
interest be payable in connection therewith. In the event the Escrowed Funds are deposited in an
interest bearing account, each Investor shall be entitled to receive its pro rata portion of any
accrued interest thereon, but only if the Escrow Agent receives from such Investor the Investor’s
United States taxpayer identification number and other requested information and forms.

     5.4 Assignment; Binding Agreement. Neither this Agreement nor any right or obligation
hereunder shall be assignable by any party without the prior written consent of the other parties
hereto. This Agreement shall inure to the benefit of and be binding upon the parties hereto and
their respective legal representatives, successors and assigns.

     5.5 Invalidity. In the event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal, or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way impaired thereby,
it being intended that all of the rights and privileges of the parties hereto shall be enforceable
to the fullest extent permitted by law.

     5.6 Counterparts/Execution. This Agreement may be executed in any number of counterparts and
by different signatories hereto on separate counterparts, each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute but one and the same instrument.
This Agreement may be executed by facsimile transmission and delivered by facsimile transmission.

     5.7 Agreement. Each of the undersigned states that he has read the foregoing Escrow Agreement
and understands and agrees to it.

[SIGNATURE PAGES FOLLOW]

9

 

           In Witness Whereof, the parties hereto have duly executed this Escrow Agreement as of
the date first above written.

	 	 	 	 	 
	 	 	Gran Tierra Energy, Inc.
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James Hart
	 

	 	 	 	 
	 	 	Name:  James Hart
	 	 	Title:  Chief Financial Officer

[SIGNATURE PAGE FOR ESCROW AGENT FOLLOWS]

10

 

	 	 	 	 	 
	 	 	ESCROW AGENT
	 
	 	 	 	 
	 	 	McguireWoods LLP 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Louis W. Zehil
	 

	 	 	 	 
	 	 	Name:  Louis W. Zehil
	 	 	Title:  Partner

11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}]]