Document:

exhibit102_021408.htm

    
      Exhibit
        10.2

       

      2008
        Bonus

      Terms
        and Conditions 

    

     

     

    This
      is a summary of the terms and conditions of the Plan. The full terms and
      conditions of the DIRECTV Group, Inc., Executive Officer Cash Bonus Plan govern
      the Bonuses.

    

    
      	
              TERM/CONCEPT

            	
              EXPLANATION

            
	
              Eligibility

            	
              Executives
                of DIRECTV Group who may become subject to Internal Revenue Code,
                or IRC,
                Section 162(m) are eligible to participate in the Plan.

            
	
              Plan
                Year

            	
              January
                1 – December 31

            
	
              Administration

            	
              The
                Compensation Committee of the Board of Directors, or Committee,
                administers the Plan. The Plan and its administration are intended
                to
                comply with IRC Section 162(m). In the beginning of the Plan Year,
                the
                Committee:

              §  Selects
                one or more annual performance measures for the Plan,

              §  Sets
                individual executive target bonuses as a percentage of base salary
                or as a
                dollar amount, and

              §  Establishes
                the maximum funding for each executive in the Plan,

              At
                the end of the Plan Year, the Committee determines final
                bonuses.

            
	
              Company
                Performance Measures

            	
              For
                2008, the Committee has selected growth in cash flow before interest
                and
                taxes (“CFBIT”) as the performance measure. If the Company’s CFBIT exceeds
                $1.5 billion, the available bonus fund will be equal to or greater
                than
                the target bonus.

            
	
              Bonus
                Determination

            	
              §  Following
                the end of the Plan Year, the Committee will review Company and individual
                performance and determine bonuses.

              §  Typically,
                when determining bonuses the Committee will reduce bonuses from the
                funded
                amounts to align the bonuses with Company and individual performance.
                The
                Committee may also consider other performance factors in its sole
                discretion as it determines the actual bonuses. These factors may
                include
                net subscriber growth, churn, ARPU growth, SAC, margin improvement,
                customer satisfaction, revenue growth, cash flow growth and OPBDA
                growth.
                This is known as exercising negative discretion.

            
	
              Timing
                of Payments

            	
              Bonuses,
                if any, are paid by March 15 following the end of the Plan
                Year.

            

    

    
       

       

       

    

    
      	
              TERM/CONCEPT

            	
              EXPLANATION

            
	
              Pro-Rated
                Bonuses

            	
              An
                executive who participates in the Plan for less than a full year
                may be
                eligible for a pro-rated target bonus. A pro rata calculation may
                also
                apply to changes in base salary or target bonus percentage that occur
                during the year.

            
	
              Taxation

            	
              Bonuses
                are subject to applicable income and employment tax withholding.
                The
                Company will also withhold contributions for the savings benefit
                plans.
                The following tax withholding rates are current as of January 2008
                and may
                change at the time of actual payout each year.

               

            
	
              Tax

            	
              Withholding
                Rate

            	
              Description

            
	
              Federal
                Income Tax

            	
              25.00%1

            	
              Federal
                supplemental earnings tax withholding rate

            
	
              State
                Income Tax

            	
              9.30%

            	
              California
                supplemental earnings tax withholding rate (or other state withholding
                rates depending upon your location)

            
	
              FICA
                Social Security

              (if
                applicable)

            	
              6.20%

            	
              Up
                to a maximum tax of $6,324 which is 6.2% of the first $102,000 of
                2008
                wages

            
	
              FICA
                Medicare

            	
              1.45%

            	
              No
                limit on maximum tax

            
	
              California
                State Disability Insurance (SDI) (if applicable)

            	
              0.80%

            	
              Up
                to a maximum tax of $693.58 which is the first $86,698 of 2008
                wages

            
	
              Employment
                Status:

              §  Resignation
                or Termination for Cause

            	
              §  A
                voluntary resignation during the Plan Year will result in the forfeiture
                of the bonus.

              §  A
                termination for cause during the Plan Year or at any time before
                payment
                of the bonus will result in the forfeiture of the
                bonus.

            
	
               

              ·  Retire2,
                Layoff,
                Death or Disability

               

            	
              Executives
                who terminate for these reasons are eligible to receive a pro-rated
                bonus
                during the usual payout cycle. Individual employment agreements may
                have
                other terms and conditions. The Committee may use daily, monthly
                or other
                methods to pro rate the bonuses.

            
	
               

              ·  Leave
                of Absence During the Year

               

            	
              Executives
                who are on an unpaid Company-approved leave of absence during the
                Plan
                Year are eligible to receive a bonus (pro-rated to exclude the period
                of
                their absence) during the usual payout cycle.

            
	
              Employee
                Benefits

            	
              Bonuses
                are Covered Compensation for purposes of determining 401K and pension
                benefits.

            

    

    

    

    
      	
              1
                35% for
                amounts in excess of $1 million.

            

    

    
      	
              2“Retirement”
                means termination of employment at age 55 or older, with 5 or more
                years
                of Continuous Service as defined in the Pension Plan and immediate
                commencement of Pension Plan
                benefits.exh10-1_note.htm

     

    
      

      

    

     

     

     

     

     

    EXHIBIT 10.1

     

    SUBORDINATED UNSECURED PROMISSORY NOTE

    DATED FEBRUARY 14, 2008

     

    
 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    THIS
SUBORDINATED UNSECURED PROMISSORY NOTE (THIS “NOTE”) AND THE INDEBTEDNESS
EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN
THAT CERTAIN SUBORDINATION AGREEMENT DATED AS OF FEBRUARY 14, 2008 (AS
AMENDED, RESTATED SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE
“SUBORDINATION
AGREEMENT”) AMONG GALAXY ENERGY CORPORATION, THE SUBORDINATED CREDITORS
NAMED THEREIN, THE LENDERS NAMED THEREIN, AND PROMETHEAN ASSET MANAGEMENT
L.L.C., TO THE SENIOR INDEBTEDNESS (AS DEFINED IN THE SUBORDINATION AGREEMENT);
AND EACH HOLDER OF THIS PROMISSORY NOTE (EACH A “HOLDER”, AND COLLECTIVELY THE
“HOLDERS”), BY ITS
ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE SUBORDINATION
AGREEMENT.

     

     

     

    This Security has not been registered
under the Securities Act of 1933 (hereinafter the “1933 Act”) or under
applicable state securities law (hereinafter the “State Acts”) and may not be
sold, assigned, pledged, transferred or hypothecated, whether or not for
consideration, by the holder except upon issuance to the Company of a favorable
written opinion of Counsel for the Company or upon submission to the Company of
such other evidence as may be satisfactory to counsel to the Company to the
effect that any such sale, assignment, pledge, transfer or hypothecation will
not be in violation of the 1933 Act or the State Acts.

    

    

    GALAXY ENERGY
CORPORATION

     

    Subordinated Unsecured Promissory
Note

    

    February 14,
2008

    

    $200,000.00                                                                                                                                                                                                   
Denver, Colorado

     

    FOR VALUE
RECEIVED, Galaxy Energy
Corporation, a Colorado corporation (hereinafter the “Company”) promises
to pay to the order of Bruner
Family Trust UTD March 28, 2005 (hereinafter the “Holder”), the principal
sum of Two Hundred Thousand Dollars ($200,000.00), together with
interest at the rate of eight percent (8.0%) per annum (hereinafter “Interest”),
such principal and Interest to be payable ON THE LATER OF, (i) the date upon
which all of the Senior Indebtedness (as defined in the Subordination Agreement)
has been indefeasibly paid in full, and (ii) one hundred twenty (120) days from
the date hereof, in each case, in lawful money of the United States of America,
subject, however, to the restrictions contained in the Subordination
Agreement.  Holder shall advance the principal amount of this Note to
the Company in one or more advances and interest shall accrue from the date of
each such advance.

    

    

    
      
        Galaxy
Energy Corporation Subordinated Promissory Note -
Page 1 of 4

      

      
        
        

        
          

        

      

      
        
        

      

    

    1. EVENTS OF DEFAULT.

    

    If one or more of the following events
(hereinafter “events of default”) shall occur:

    

    (a) default in the payment of any
principal of or interest on this Note and the continuation of such default for a
period of 10 days;

    

    (b) breach of any covenant contained in
this Note and the continuation of such breach for a period of 30 days or more
after written notice thereof;

     

    (c) the
Company or any of its subsidiaries files or is served with any petition for
relief under the Bankruptcy Code or any similar federal or state statute (the
“Code”) or the entry by a court of competent jurisdiction of a decree or order
adjudging the company or the subsidiary, as the case may be, a bankrupt or
insolvent or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company or the
subsidiary under the Code or appointing a receiver, trustee or other similar
official of the Company or the subsidiary or all or substantially all of its
assets or the subsidiary’s assets, or ordering the winding up or liquidation of
its affairs or the subsidiary’s affairs, and the continuation of such decree or
order unstayed and in effect for a period of 60 consecutive days;

     

    (d) the
institution by the Company or any of its subsidiaries or the consent to the
institution by the Company or its subsidiary of proceedings to adjudicate the
Company or its subsidiary a bankrupt or insolvent or the filing or consent by
the Company or its subsidiary to the filing of a petition or answer seeking
reorganization or relief under the Code, the consent by the Company or its
subsidiary to the appointment of a receiver, trustee or other similar official
of the Company or its subsidiary or of any substantial part of its property of
its subsidiary’s property, an assignment by the Company or its subsidiary for
the benefit of creditors or the admission by the Company or its subsidiary in
writing of its inability to pay its debts generally as they become due;
or

     

    (e) a
default by the Company in any of its obligations under any other promissory note
or any mortgage, credit agreement or other facility, indenture agreement,
factoring agreement or other instrument under which there may be issued, or by
which there may be secured or evidenced any indebtedness for borrowed money or
money due under any long term leasing or factoring arrangement of the Company in
an amount exceeding $50,000, whether such indebtedness now exists or shall
hereafter be created and such default shall result in such indebtedness becoming
or being declared due and payable prior to the date on which it would otherwise
become due and payable;

    

    then,
subject to the terms, provisions and restrictions contained in the Subordination
Agreement, the Holder of this Note may, by written notice to the Company,
declare the entire unpaid principal of and accrued and unpaid Interest on this
Note to be due and payable and, upon such declaration, the same shall become due
and payable forthwith without further demand or notice, the payment on such
declaration, however, being subject to the subordination provisions of this
Note.

     

     

    
 

    
      
        Galaxy
Energy Corporation Subordinated Promissory Note -
Page 2 of 4

      

      
        
        

        
          

        

      

      
        
        

      

    

    2. MISCELLANEOUS.

     

    2.1. All
powers and remedies given by this Note to the Holder hereof shall, to the extent
permitted by law, be deemed cumulative and not exclusive of any other power or
remedy or of any other powers and remedies available to the Holder hereof, by
judicial proceedings or otherwise, to enforce the performance or observance of
the covenants and agreements contained in this Note.  No delay or
omission of the Holder hereof to exercise any right or power accruing upon any
default occurring and continuing as aforesaid shall impair any such right or
power or shall be construed to be a waiver of any such default or any
acquiescence therein.  Every power and remedy given by this Note or by
law to the Holder hereof may be exercised from time to time, and as often as
shall be deemed expedient, by the Holder hereof, all subject, as hereinabove
provided, to the payment of the principal of and the interest on this Note being
expressly subordinated in right of payment to the prior payment in full of all
Senior Indebtedness.

    

    2.2. In addition to the payments
provided for above, subject to the terms, provisions and restrictions contained
in the Subordination Agreement, the Company agrees to pay all expenses incurred,
including reasonable attorneys’ fees, if this Note is placed in the hands of an
attorney for collection or if it is collected through bankruptcy or other
judicial proceedings.

    

    2.3. The Company, to the extent
permitted by law, waives notice, demand, presentment for payment, protest, the
filing of suit or the taking of any other action by any Holder hereof for the
purpose of fixing its liability hereon.

    

    2.4. This Note has been executed and
delivered in and shall be governed by and construed in accordance with the laws
of the State of Colorado.

    

    
      
        Galaxy
Energy Corporation Subordinated Promissory Note -
Page 3 of 4    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    IN WITNESS WHEREOF, the Company has
executed this Note under seal on the day and year first above
written.

    

     

    
      	 	GALAXY ENERGY
    CORPORATION	 
	 	 	 	 
	
               

            	
              By:
    

            	/s/    
      Christopher S. Hardesty	 
	 	 	Christopher S.
      Hardesty 	 
	 	 	Chief Financial Officer	 
	 	 	 	 

    

    

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Galaxy
Energy Corporation Subordinated Promissory Note - Page
4 of 4

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