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EXHIBIT 4.1    
    

 
 

TRANSMERIDIAN EXPLORATION, INC.
  
    2003 STOCK COMPENSATION PLAN    
    

SECTION 1. PURPOSE.  

        The purpose of this 2003 Stock Compensation Plan (the "Plan") of Transmeridian Exploration, Inc. (together with any subsidiaries, affiliates or successor
thereto, the "Company") is (a) to promote the identity of interests between shareholders, employees, and directors of the Company by encouraging and creating significant ownership of Common
Stock of the Company by such officers, employees, and directors of the Company and its subsidiaries; (b) to enable the Company to attract and retain qualified officers, employees and directors
who contribute to the Company's success by their ability, ingenuity and industry; (c) to provide meaningful motivation and incentive for officers, employees, and directors who are responsible
for the success of the Company and who are in a position to make significant contributions toward its objectives; and (d) to provide a means to compensate officers, employees and directors of
the Company as well as to compensate consultants, advisors, and other third parties who provide valuable services for the Company. Certain capitalized terms used in this Agreement are defined either
in the body of the Agreement or in Section 12, "Definitions". 

        Pursuant
to the terms and conditions of this Plan, the Company is authorized to issue shares of Common Stock of the Company, $.0006 par value, under the Plan, including the issuance of
the following types of Awards: 

	•
	Restricted
Stock Awards

	•
	Payments
of Bonuses in Stock

	•
	Payment
for Services to Consultants in Stock

	•
	Employer
Contributions to 401-K Plan

	•
	Stock
Appreciation Rights

	•
	Warrants

SECTION 2. SHARES SUBJECT TO THE PLAN.  

        Subject to adjustment as provided in Section 9, the total number of Shares reserved and available for Awards under the Plan during the term hereof shall be
2,500,000 million shares. For purposes of this Section 2, the number of and time at which Shares shall be deemed to be subject to Awards and therefore counted against the number of
Shares reserved and available under the Plan shall be the earliest date at which the Committee can reasonably estimate the number of Shares to be distributed in settlement of an Award or with respect
to which payments will be made; provided, however, that, subject to the requirements of Rule 16b-3, the Committee may adopt procedures for the counting of Shares relating to any
Award for which the number of Shares to be distributed or with respect to which payment will be made cannot be fixed at the date of grant to ensure appropriate counting, avoid double counting (in the
case of tandem or substitute awards), and provide for adjustments in any case in which the number of Shares actually distributed or with respect to which payments are actually made differs from the
number of Shares previously counted in connection with such Award. 

        If
any Shares to which an Award relates are forfeited or the Award is settled or terminates without a distribution of Shares (whether or not cash, other Awards, or other property is
distributed with respect to such Award), any Shares counted against the number of Shares reserved and available under the Plan with respect to such Award shall, to the extent of any such forfeiture,
settlement or termination, again be available for Awards under the Plan; provided, however, that such Shares shall be available for issuance only to the extent that the related award would be exempt
under Rule 16b-3. 

 

SECTION 3. ELIGIBILITY.  

        Awards may be granted only to individuals who are officers, employees (including employees who are also directors), directors and Consultants of the Company or a
Subsidiary; provided, however, that no Award shall be granted to any member of the Committee. 

SECTION 4. SPECIFIC TERMS OF AWARDS.  

        4.01.    General.    Awards may be granted on the terms and conditions set forth in this Section 4. In
addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 10.02), such additional terms and conditions, not inconsistent
with the provisions of the Plan, as the Committee shall determine, including without limitation the acceleration of vesting of any Awards or alteration of terms requiring forfeiture of Awards in the
event of termination of employment by the Participant. 

        4.02.    Restricted Stock.    The Committee is authorized to grant Restricted Stock to Participants on the following
terms and conditions: 

                (i)    Issuance
and Restrictions.    Restricted Stock shall be subject to such restrictions on transferability and other restrictions as the Committee
may impose. The Committee shall have the authority to set the period of time during which the restrictions shall apply and the vesting provisions relating to such Restricted Stock. Such Restricted
Stock shall vest either: (x) if the Committee so determines, in full with respect to all Shares underlying such Award of Restricted Stock at the expiration of the restriction period; or
(y) if the Committee so determines, proportionally in installments of the Shares underlying such Award of Restricted Stock over the restriction period, except that such restrictions may lapse
earlier in the event of death, disability, termination of employment, or retirement of an awardee, on such terms as the Committee shall determine, or in accordance with Section 8 hereof. The
Committee shall have the authority to accelerate the vesting of an Award of Restricted Stock. The Committee shall have the authority to award Restricted Stock without cash consideration or, if it so
determines, for an exercise price. 

                (ii)    Termination.    The
Committee shall have the authority to determine the events giving rise to the termination of such Restricted Stock and the
terms and provisions relating to such Restricted Stock in the event of the termination of any employee's, officer's, director's, or Consultant's relationship with the Company. The Committee may
provide, by rule or regulation or in any Award Agreement, or may determine in any individual case after the award has been made, that restrictions or forfeiture conditions relating to Restricted Stock
will be waived in whole or in part in the event of terminations resulting from specified causes. 

                (iii)    Certificates
of Shares.    Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. The
Company, or if the Committee so designates, an escrow agent acting on behalf of the Company, shall retain physical possession of the certificates until such time as the shares are no longer
restricted, and the Participant shall deliver a stock power to the Company or such agent, endorsed in blank, relating to the Restricted Stock. 

                (iv)    Restrictions
on Transfer.    Except as may be otherwise expressly permitted by the Award Agreement, no right or interest of any Participant in
the Restricted Stock prior to vesting of such Restricted Stock will be assignable or transferable, or subjected to any lien, either voluntarily or involuntarily, directly or indirectly, by operation
of law or otherwise. 

                (v)    Ownership.    During
the restriction period relating to the Restricted Stock, the Participant shall possess all incidents of ownership of such
shares, including the right to vote and to receive dividends, subject to the restrictions set forth in this Plan, the Award Agreement, or as otherwise determined by the Committee. 

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                (vi)    Dividends
and Distributions.    Unless otherwise set forth in the Award Agreement, the Committee shall determine at the time of the declaration
of any dividends or distributions with respect to shares of
Common Stock subject to the unvested portion of an Award whether such dividends or distributions will be subject to the same restrictions (including risk of forfeiture) as the shares to which such
dividends or distributions relate. The Committee shall also determine whether the Company will withhold any such dividends or distributions pending vesting of the shares to which it relates and, in
such event, the Committee will determine whether any interest will be paid on such dividends or distributions. 

        4.03.    Bonus Awards.    The Committee is authorized to grant Bonus Awards to Participants on the following terms and
conditions: 

                (i)    Awards
and Conditions.    A Bonus Award shall confer upon the Participant rights, valued as determined by the Committee, and payable to, or
exercisable by, the Participant to whom the Bonus Award is granted, in whole or in part, as determined by the Committee, conditioned upon, or in recognition of, the achievement of any performance
criteria determined by the Committee. 

                (ii)    Performance
Period.    The period of time with respect to which it is to be determined whether the performance criteria applicable to a Bonus
Award have been achieved shall be such period of time as shall be determined by the Committee. A Bonus Award may be granted for past performance by a Participant and may include discretionary criteria
for such performance as determined by the Committee. The vesting requirements, if any, attributable to Bonus Awards shall be determined by the Committee. 

                (iii)    Other
Terms.    A Bonus Award shall be denominated in Shares and may be payable in cash, Shares, other Awards, or other property, and have such
other terms as shall be determined by the Committee. 

        4.04    Payment for Services by Consultants.    The Committee is authorized to issue Shares of the Company as direct
payment for services by Consultants. The Committee shall establish the number of Shares to be issued to such Consultant as equivalent value for the services rendered by such Consultants, and the
Committee shall otherwise make all determinations regarding the payment for such services in the form of Shares. 

        4.05.    Employer Contributions to 401-K Plan.    The Committee is authorized to issue Shares under the
Plan as employer contributions to any 401-K Plan established by the Company. The Committee shall approve the terms of any such 401-K Plan(s), including the employee
contributions eligible for employer matching contributions and the provisions of such matching contributions, including vesting periods and terms of forfeiture. 

        4.06.    Stock Appreciation Rights.    The Committee is authorized to grant Stock Appreciation Rights to Participants
on the following terms and conditions: 

                (i)    Right
to Payment.    A Stock Appreciation Right shall confer on the Participant to whom it is granted a right to receive, upon exercise thereof,
the excess of (A) the Fair Market Value of one Share on the date of exercise (or, if the Committee shall so determine in the case of any such right, the Fair Market Value of one Share at any
time during a specified period before or after the date of exercise or the Change of Control Price as defined in Section 8.03) over (B) the base price of the Stock Appreciation Right as
determined by the Committee as of the date of grant of the Stock Appreciation Right, which shall be not less than the Fair Market Value of one Share on the date of grant. On and after the date of
grant of a Stock Appreciation Right hereunder, the Committee shall not have the authority to reduce the base price of such Stock Appreciation Right, except as provided in Section 9 hereof. 

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                (ii)    Other
Terms.    The Committee shall determine the time or times at which a Stock Appreciation Right may be exercised in whole or in part, the
method of exercise, method of settlement, form of consideration payable in settlement, method by which Shares will be delivered or deemed to be delivered to Participants, and any other terms and
conditions of any Stock Appreciation Right. 

        4.07.    Warrants.    The Committee is authorized to grant Warrants to purchase Shares of the Company. The Committee
shall establish the number of Shares to be exercised pursuant to such Warrants, the terms and conditions applicable to the Warrants (including, without limitation, the exercise price, which does not
need to equal or exceed the Fair Market Value of the Shares at the date of the grant of the Warrant, and the period during which the Warrant is exercisable), and the criteria for issuing such
Warrants. The Committee shall make all determinations regarding such Warrants and the rights thereto. 

SECTION 5. ADMINISTRATION.  

        5.01.    Authority
of the Committee.    The Plan shall be administered by the Committee. The Committee shall have full and final authority to take the following
actions, in each case subject to and consistent with the provisions of the Plan: 

                (i)    to
select and designate Participants; 

                (ii)    to
designate Subsidiaries; 

                (iii)    to
determine the type or types of Awards to be granted to each Participant; 

                (iv)    to
determine the number of Awards to be granted, the number of Shares to which an Award will relate, the terms and conditions of any Award granted under
the Plan (including, but not limited to, any exercise price, grant price, or purchase price, any restriction or condition, any schedule for lapse of restrictions or conditions relating to
transferability or forfeiture, exercisability, or settlement of an Award, and waivers or accelerations thereof, and waiver of performance conditions relating to an Award, based in each case on such
considerations as the Committee shall determine), and all other matters to be determined in connection with an Award; 

                (v)    to
determine whether, to what extent, and under what circumstances an Award may be settled, or the exercise price of an Award may be paid, in cash, Shares,
other Awards, or other property, or an Award may be cancelled, forfeited, or surrendered; 

                (vi)    to
determine whether, to what extent, and under what circumstances cash, Shares, other Awards, or other property payable with respect to an Award will be
deferred either automatically, at the election of the Committee, or pursuant to an agreement between the Company and the Participant; 

                (vii)    to
prescribe the form of each Award Agreement, which need not be identical for each Participant; 

                (viii)    to
adopt, amend, suspend, waive, and rescind such rules and regulations and appoint such agents as the Committee may deem necessary or advisable to
administer the Plan; 

                (ix)    to
correct any defect or supply any omission or reconcile any inconsistency in the Plan and to construe and interpret the Plan and any Award, rules and
regulations, Award Agreement, or other instrument hereunder; 

                (x)    to
interpret and administer the Plan and any instrument or agreement relating to, or Award under, the Plan; and 

                (xi)    to
make all other decisions and determinations as may be required under the terms of the Plan or as the Committee may deem necessary or advisable for the
administration of the Plan. 

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        5.02.    Manner
of Exercise of Committee Authority.    Unless authority is specifically reserved to the Board under the terms of the Plan, or applicable law, the
Committee shall have sole discretion in exercising such authority under the Plan. Any action of the Committee with respect to the Plan shall be final, conclusive, and binding on all persons, including
the Company, Subsidiaries, Participants, any person claiming any rights under the Plan from or through any Participant, and shareholders. The express grant of any specific power to the Committee, and
the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. The Committee may delegate to officers or managers of the Company or any
Subsidiary the authority, subject to such terms as the Committee shall determine, to perform administrative functions under the Plan. 

        5.03.    Limitation
of Liability.    Each member of the Committee shall be entitled to, in good faith, rely or act upon any report or other information furnished to
him by any officer or other employee of the Company or any Subsidiary, the Company's independent certified public accountants, or any executive compensation consultant or other professional retained
by the Company to assist in the administration of the Plan. No member of the Committee, nor any officer or employee of the Company acting on behalf of the Committee, shall be personally liable for any
action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Committee and any officer or employee of the Company acting on their behalf,
shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action, determination, or interpretation. 

SECTION 6. CERTAIN PROVISIONS APPLICABLE TO AWARDS.  

        6.01.    Stand-Alone,
Additional, Tandem, and Substitute Awards.    Awards granted under the Plan may, in the discretion of the Committee, be granted either alone or
in addition to or in tandem with any other Award granted under the Plan or any award granted under any other plan of the Company, any Subsidiary, or any business entity to be acquired by the Company
or a Subsidiary, or any other right of a Participant to receive payment from the Company or any Subsidiary. Awards granted in addition to or in tandem with other Awards or awards may be granted either
as of the same time as or a different time from the grant of such other Awards or awards. 

        6.02.    Exchange
Provisions.    The Committee may at any time offer to exchange or buy out any previously granted Award for a payment in cash, Shares, or other
property based on such terms and conditions as the Committee shall determine and communicate to the Participant at the time that such offer is made. 

        6.03.    Term
of Awards.    The term of each Award shall be for such period as may be determined by the Committee; provided, however, that in no event shall the term
of any Stock Appreciation Right granted in tandem therewith exceed a period of ten years from the date of its grant (or such shorter period as may be required under Section 422 of the Code). 

        6.04.    Form
of Payment under Awards.    Subject to the terms of the Plan and any applicable Award Agreement, payments (if any) to be made by the Company or a
subsidiary upon the grant or exercise of an Award may be made in such forms as the Committee shall determine, including without limitation, cash, Shares, other Awards, or other property, and may be
made in a single payment or transfer, in installments, or on a deferred basis. Such payments may include, without limitation, provisions for the payment or crediting of reasonable interest on
installment or deferred payments. 

        6.05.    Loan
Provisions.    With the consent of the Committee, and subject to compliance with applicable laws and regulations, the Company may make, guarantee, or
arrange for, a loan or loans to a Participant with respect to the exercise of any Option or other payment in connection with any Award, including the payment by a Participant of any or all federal,
state, or local income or other taxes due in connection with any Award. Subject to such limitations, the Committee shall have full 

5

 

authority
to decide whether to make a loan or loans hereunder and to determine the amount, terms, and provisions of any such loan or loans, including the interest rate to be charged in respect of any
such loan or loans, whether the loan or loans are to be with or without recourse against the borrower, the terms on which the loan is to be repaid and conditions, if any, under which the loan or loans
may be forgiven. Nothing in this Section shall be construed as implying that the Committee shall or will offer such loans. 

SECTION 7. GENERAL RESTRICTIONS APPLICABLE TO AWARDS.  

        7.01.    Restrictions
Under Rule 16b-3.    If and to the extent the Company is (or becomes) subject to Section 16 under the Exchange Act,
then at such time, the following provisions shall apply: 

                (i)    Six-Month
Holding Period.    Unless a Participant could otherwise transfer an equity security, derivative security, or Shares issued
upon exercise of a derivative security granted under the Plan without incurring liability under Section 16(b) of the Exchange Act, (i) an equity security issued under the Plan, other
than an equity security issued upon exercise or conversion of a derivative security granted under the Plan, shall be held for at least six months from the date of acquisition; (ii) with respect
to a derivative security issued under the Plan, at least six months shall elapse from the date of acquisition of the derivative security to the date of disposition of the derivative security (other
than upon exercise or conversion) or its underlying equity security; and (iii) any Award in the nature of a Stock Appreciation Right must be held for six months from the date of grant to the
date of cash settlement. 

                (ii)    Nontransferability.    Awards
which constitute derivative securities (including any option, stock appreciation right, or similar right) shall
not be transferable by a Participant except upon such terms and conditions as the Committee may determine to an Immediate Family Member of such Participant, or to a trust, partnership or limited
liability company all of whose beneficiaries, partners or members, as the case may be, are Immediate Family Members, or by will or the laws of descent and distribution (except pursuant to a
beneficiary designation authorized under Section 7.02) or, if then permitted under Rule 16b-3, pursuant to a qualified domestic relations order as defined under the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder, and, in the case of an Incentive Stock Option or, if then required by
Rule 16b-3, any other derivative security granted under the Plan, shall be exercisable during the lifetime of a Participant only by such Participant or his legal representative. 

                (iii)    Compliance
with Rule 16b-3.    It is the intent of the Company that this Plan comply in all respects with
Rule 16b-3 in connection with any Award granted to a person who is subject to Section 16 of the Exchange Act. Accordingly, if any provision of this Plan or any Award
Agreement does not comply with the requirements of Rule 16b-3 as then applicable to any such person, such provision shall be construed or deemed amended to the extent necessary to
conform to such requirements with respect to such person. 

        7.02.    Limits
on Transfer of Awards; Beneficiaries.    Except as provided in Section 7.01(ii), no right or interest of a Participant in any Award shall be
pledged, encumbered or hypothecated to or in favor of any party (other than the Company or a Subsidiary), or shall be subject to any lien, obligation, or liability of such Participant to any party
(other than the Company or a Subsidiary). Unless otherwise determined by the Committee (subject to the requirements of Section 7.01(ii)), no Award subject to any restriction shall be assignable
or transferable by a Participant otherwise than by will or the laws of descent and distribution (except to the Company under the terms of the Plan); provided, however, that a Participant may, in the
manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of the Participant, and to receive any distribution, with respect to any Award, upon the death of
the Participant. A beneficiary, guardian, legal representative, or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and 

6

 

conditions
of the Plan and any Award Agreement applicable to such Participant or other agreement applicable to such, except to the extent the Plan and such Award Agreement or other agreement otherwise
provide with respect to such persons, and to any additional restrictions deemed necessary or appropriate by the Committee. 

        7.03.    Registration
and Listing Compliance.    The Company shall not be obligated to deliver any Award or distribute any Shares with respect to any Award in a
transaction subject to regulatory approval, registration, or any other applicable requirement of federal or state law, or subject to a listing requirement under any listing or similar agreement
between the Company and any national securities exchange, until such laws, regulations, and contractual obligations of the Company have been complied with in full, although the Company shall be
obligated to use its best efforts to obtain any such approval and comply with such requirements as promptly as practicable. 

        7.04.    Share
Certificates.    All certificates for Shares delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such
stop-transfer order and other restrictions as the Committee may deem advisable under applicable federal or state laws, rules and regulations thereunder, and the rules of any national
securities exchange or the OTC Bulletin Board on which Shares are listed. The Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such
restrictions or any other restrictions that may be applicable to Shares, including under the terms of the Plan or any Award Agreement. In addition, during any period in which Awards or Shares are
subject to restrictions under the terms of the Plan or any Award Agreement, or during any period during which delivery or receipt of an Award or Shares has been deferred by the Committee or a
Participant, the Committee may require the Participant to enter into an agreement providing that certificates representing Shares issuable or issued pursuant to an Award shall remain in the physical
custody of the Company or such other person as the Committee may designate. 

SECTION 8. CHANGE OF CONTROL PROVISIONS.  

        Notwithstanding any other provision of the Plan, the following acceleration and valuation provisions shall apply in the event of a "Change of Control" as defined
in this Section 8. 

        8.01.    Acceleration
and Cash-Out Rights.    In the event of a "Change of Control," as defined in Section 8.02, automatically in the case of all
Participants: 

                (i)    The
performance criteria of all Bonus Awards shall be deemed fully achieved and all such Awards shall be fully earned and vested, subject only to the
restrictions on dispositions of equity securities set forth in Section 7.01(i) and legal restrictions on the issuance of Shares set forth in Sections 7.03 and 7.04; 

                (ii)    Any
Stock Appreciation Right and other Award in the nature of a right that may be exercised which was not previously exercisable and vested shall become
fully exercisable and vested, subject only to the restrictions on disposition of equity securities set forth in Section 7.01(i) and legal restrictions on the issuance of Shares set forth
in Sections 7.03 and 7.04; 

                (iii)    The
restrictions, deferral limitations, and forfeiture conditions applicable to any other Award granted under the Plan shall lapse and such Awards shall
be deemed fully vested, subject only to the restrictions on dispositions of equity securities set forth in Section 7.01(i) and legal restrictions on the issuance of Shares set forth in
Sections 7.03 and 7.04; 

                (iv)    In
the sole discretion of the Committee, all outstanding Awards may be cancelled and in such event a Participant holding any such Award shall be paid in
cash therefor on the basis of the "Change of Control Price" (as defined in Section 8.03) as of the date that the Change of Control occurs, or such other date as the Committee may determine
prior to the Change of Control; provided, however, that this Section 8.01(iv) shall not apply in the case of any Award if the cancellation of and 

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payment
for such Award would cause the Participant to incur actual short-swing profits liability under Section 16(b) of the Exchange Act; and 

                (v)    To
the extent Section 8.01(iv) of this Section 8 does not apply and at any time after the Change of Control the Shares are no longer
readily tradable on an established exchange or the OTC Bulletin Board, a Participant shall, as of the date on which the Change of Control occurs, be entitled to receive,
consistent with Rule 16b-3, and the Company shall use its best efforts to compel and obligate the surviving or resulting company in the Change of Control and/or the other party to
the agreement or transaction resulting in the Change of Control to grant to the Participant, substitute Stock Appreciation Rights and/or Restricted Stock, as the case may be, in respect of the shares
of common stock or other capital stock of such surviving or resulting company, or such other party involved in the Change of Control, on such terms and conditions, as to the number of shares, pricing,
vesting, exercisability and otherwise, which shall substantially preserve the value, rights and benefits of any affected Stock Appreciation Rights and/or Restricted Stock, as the case may be,
previously granted hereunder. 

        8.02.    Change
of Control.    For purposes of Section 8.01, a "Change of Control" shall mean a change in ownership or control of the Company effected through
any of the following transactions: 

                (i)    the
direct or indirect acquisition by any person or related group of persons (other than by the Company or a person that directly or indirectly controls,
is controlled by, or is under common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than 50%
of the total combined voting power of the Company's outstanding securities pursuant to a tender or exchange offer made directly to the Company's shareholders, or other transaction, in each case which
the Board does not recommend such shareholders to accept; or 

                (ii)    a
change in the composition of the Board over a period of 24 consecutive months or less such that a majority of the Board members (rounded up to the next
whole number) ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (i) have been Board members continuously since the beginning
of such period or (ii) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (i) who were still
in office at the time such election or nomination was approved by the Board; or 

                (iii)    any
Corporate Transaction. 

        8.03.    Change
of Control Price.    For purposes of this Section 8, "Change of Control Price" means the highest price per share paid in any transaction
reported on the securities exchange or trading system on which the Shares are then primarily listed or traded, or paid or offered in any transaction related to a Change of Control of the Company at
any time during the preceding 60-day period as determined by the Committee, except that in the case of Stock Appreciation Rights relating thereto, such price shall be based only on
transactions reported for the date on which the Committee decides to cash out such Awards. 

SECTION 9. ADJUSTMENT PROVISIONS.  

        In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or
event, affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the rights of Participants under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and kind of Shares which may thereafter be issued in connection with Awards (ii) the 

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number
and kind of Shares issued or issuable in respect of outstanding Awards, and (iii) the exercise price, base price, or purchase price relating to any Award or, if deemed appropriate, make
provision for a cash payment with respect to any outstanding Award. In addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in
recognition of unusual or nonrecurring events (including, without limitation, events described in the preceding sentence) affecting the Company or any Subsidiary or the financial statements of the
Company or any Subsidiary, or in response to changes in applicable laws, regulations, or accounting principles. 

SECTION 10. CHANGES TO THE PLAN AND AWARDS.  

        10.01.    Changes
to the Plan.    The Board may amend, alter, suspend, discontinue or terminate the Plan without the consent of shareholders or Participants, except
that any such amendment, alteration, suspension, discontinuation, or termination shall be subject to the approval of the Company's shareholders within one year after such Board action if such
shareholder approval is required by any federal or state law or regulation or the rules of any stock exchange on which the Shares may be listed in order to maintain compliance therewith, or if the
Board in its discretion determines that obtaining such shareholder approval is for any reason advisable; provided, however, that, without the consent of an affected Participant, no amendment,
alteration, suspension, discontinuation, or termination of the Plan after initial shareholder approval of the Plan may materially impair the rights of such Participant under any Award theretofore
granted to him. 

        10.02.    Changes
to Awards.    The Committee may, unless otherwise expressly prohibited by the Plan, waive any conditions or rights under, or amend, alter, suspend,
discontinue, or terminate, any Award theretofore granted and any Award Agreement relating thereto; provided, however, that, without the
consent of an affected Participant, no such amendment, alteration, suspension, discontinuation, or termination of any Award may materially impair the rights of such Participant under such Award. 

SECTION 11. GENERAL PROVISIONS.  

        11.01.    No Rights to Awards.    No Participant or employee shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Participants and employees. 

        11.02.    No
Shareholder Rights.    Except to the extent provided in this Plan, an Award Agreement, or as otherwise designated by the Committee, no Award shall confer
on any Participant any of the rights of a shareholder of the Company unless and until Shares are duly vested, issued or transferred to the Participant in accordance with the terms of the Award.
However, the Committee may specifically convey such rights pursuant to an Award. 

        11.03.    Tax
Withholding.    To the extent and in the manner permitted by applicable law, the Company or any Subsidiary is authorized to withhold from any Award
granted (or from any payment relating to an Award under the Plan), any amounts of withholding and other taxes due with respect thereto, and to take such other action as the Committee may deem
necessary or advisable to enable the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax liabilities relating to any Award. This authority shall include
authority to withhold or receive Shares or other property and to make cash payments in respect thereof in satisfaction of the Participant's tax obligations. The Committee is also authorized to require
any Participant promptly to remit the amount necessary to satisfy any tax obligation to the Company before taking any action under the Plan, including the issuance of any Shares, with respect to an
Award. 

        11.04.    No
Right to Employment.    Nothing contained in the Plan or any Award Agreement shall confer, and no grant of an Award shall be construed as conferring,
upon any employee any right to 

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continue
in the employment of the Company or any Subsidiary or to interfere in any way with the right of the Company or any Subsidiary to terminate such employment at any time or increase or decrease
such employee's compensation from the rate in existence at the time of granting of an Award. 

        11.05.    Unfunded
Status of Awards.    With respect to any payments not yet made to a Participant pursuant to an Award the Plan constitutes a mere promise to make
the benefit payments provided for herein, and nothing contained in the Plan or any Award shall give any such Participant any rights that are greater than those of a general creditor of the Company;
provided, however, that the Committee may authorize the creation of trusts or make other arrangements to meet the Company's obligations under
the Plan to deliver cash, Shares, other Awards, or other property pursuant to any award, which trusts or other arrangements shall be consistent with the unfunded status of the Plan. 

        11.06.    Other
Compensatory Arrangements.    The Company or any Subsidiary shall be permitted to adopt other or additional compensation arrangements (which may
include arrangements which relate to Awards), and such arrangements may be either generally applicable or applicable only in specific cases. 

        11.07.    Fractional
Shares.    No fractional Shares shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determined whether cash,
other Awards, or other property shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or otherwise eliminated. 

        11.08.    Governing
Law.    The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan, and any Award Agreement shall be
determined in accordance with the laws of the State of Texas, without giving effect to principles of conflicts of laws, and applicable federal law. 

SECTION 12. DEFINITIONS.  

        In addition to the terms defined elsewhere in the Plan, the following shall be defined terms under the Plan: 

        12.01.    "Award"
means any Restricted Stock Award, Bonus Award, payment for services of a Consultant, Stock Appreciation Right, Warrant, or any other right or interest
relating to Shares or cash, granted to a Participant under the Plan. 

        12.02.    "Award
Agreement" means any written agreement, contract, or other instrument or document evidencing an Award. 

        12.03.    "Board"
means the Board of Directors of the Company. 

        12.04    "Bonus
Award" means a right, granted to a Participant under Section 4.03, to receive cash, Shares, other Awards, or other property. 

        12.05    "Corporate
Transaction" means any of the following shareholder-approved transactions to which the Company is a party 

                (i)    a
merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the
jurisdiction in which the Company is incorporated; 

                (ii)    the
sale, transfer or other disposition of all or substantially all of the assets of the Company in complete liquidation or dissolution of the Company; or 

                (iii)    any
reverse merger in which the Company is the surviving entity but in which securities possessing more than 50% of the total combined voting power of
the Company's outstanding securities 

10

 

are
transferred to a person or persons different from the persons holding those securities immediately prior to such merger. 

        12.06.    "Code"
means the Internal Revenue Code of 1986, as amended from time to time. References to any provision of the Code shall be deemed to include successor provisions
thereto and regulations thereunder. 

        12.07.    "Committee"
means the Compensation Committee of the Board, or such other Board committee as may be designated by the Board to administer the Plan, or any subcommittee
of either; provided, however, that if and when the Company shall be or become subject to Section 16 of the Exchange Act, then the Committee, and any subcommittee thereof, shall consist of two
or more directors (or such lesser number as may be permitted by applicable law or rule), each of whom is a "disinterested person" within the meaning of the applicable provisions of
Rule 16b-3 under the Exchange Act. 

        12.08.    "Consultant"
means any person who is engaged by the Company or a Subsidiary to render consulting, advisory or other services to the Company or a Subsidiary. 

        12.09.    "Disability"
shall mean the inability of a Grantee to perform his or her duties and responsibilities for a period of 90 consecutive days or an aggregate period of
180 days in any two year period. 

        12.10.    "Exchange
Act" means the Securities Exchange Act of 1934, as amended from time to time. References to any provision of the Exchange Act shall be deemed to include
successor provisions thereto and any rules and regulations thereunder. 

        12.11.    "Fair
Market Value" means, with respect to Shares, Awards, or other property, the fair market value of such Shares, Awards, or other property determined by such
methods or procedures as shall be established from time to time by the Committee. Unless otherwise determined by the Committee, the Fair Market Value of Shares as of any date shall be the closing
price of the Shares on the date of the grant of the Award, as reported in The Wall Street Journal (or if not so reported, as otherwise reported by the National Association of Securities Dealers
Automated Quotation System, Small Cap or National Markets, or the National Association of Securities Dealers OTC Bulletin Board). 

        12.12.    "Immediate
Family Member" means, with respect to any Participant, any of such Participant's spouse, children, parents or siblings. 

        12.13.    "Participant"
shall mean any officer, director, employee, or Consultant of the Company who has been granted an Award under the Plan. 

        12.14.    "Restricted
Stock" means Shares granted to a Participant under Section 4.02, that are subject to certain restrictions and to a risk of forfeiture. 

        12.15.    "Rule 16b-3"
means Rule 16b-3, as from time to time amended and applicable to Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act. 

        12.16.    "Shares"
means the Common Stock, $0.0006 par value per share, of the Company and such other securities of the Company as may be substituted for Shares or such other
securities pursuant to the Plan. 

        12.17.    "Stock
Appreciation Right" means a right, granted to a Participant under Section 4.05, to be paid an amount measured by the appreciation in the Fair Market
Value of Shares from the date of grant to the date of exercise of the right, with payment to be made in cash, Shares, other Awards, or other property as specified in the Award or determined by the
Committee. 

11

 

        12.18.    "Subsidiary"
means any company (other than the Company) with respect to which the Company owns, directly or indirectly, 50% or more of the total combined voting power
for all classes of stock. In addition, any other related entity may be designated by the Board or the Committee as a Subsidiary, provided the Board or the Committee determines that the Company has a
substantial ownership interest in such entity. 

        12.19.    "Year"
means a calendar year. 

EFFECTIVE DATE. The Plan is effective May 27, 2003. 

DATE APPROVED BY BOARD OF DIRECTORS: May 27, 2003 

12

QuickLinks

EXHIBIT 4.1

TRANSMERIDIAN EXPLORATION, INC. 2003 STOCK COMPENSATION PLANExhibit 4.1

 

PRIVATE
AND CONFIDENTIAL

 

 

DATED

 

as of
20 December 2003

 

 

PRUDENTIAL
SERVICES LIMITED (1)

 

and

 

MARK
NORBOM (2)

 

and

 

PRUDENTIAL
PLC (3)

 

 

EXECUTIVE
DIRECTOR CONTRACT OF EMPLOYMENT

 

 

 

PARTIES

 

(1)                                  PRUDENTIAL SERVICES LIMITED of 142 Holborn Bars, London EC1N 2NH]  (“the Company”) and

 

(2)                                  Mark Norbom of
3-42 Minami-Azabu, 5-chome, Minato-ku, Tokyo 106-0047, Japan (“the Executive”)

 

(3)                                  PRUDENTIAL PLC
of Laurence Pountney Hill, London, EC4R 0HH (“Prudential”)

 

1.                                      DEFINITIONS

 

In this Agreement unless the context otherwise
requires:-

 

“Board” means the Board of Directors of Prudential;

 

“Commencement
Date” means 1 January 2004;

 

 “Prudential Group” means Prudential and each
of its subsidiaries as  “subsidiaries”
is defined by section 736 of the Companies Act 1985.

 

2.                                      APPOINTMENT

 

(1)                                  The
Company shall employ the Executive and the Executive shall serve the Company as
Chief Executive Asia and in other such
capacity as may be agreed (“the Appointment”).  The Executive shall report to the Group Chief Executive.

 

(2)                                  The Appointment is deemed to be effective from the Commencement Date
and shall, without prejudice to the provisions of clause 9(2), continue unless
and until terminated by the Company giving to the Executive not less than 12
months’ prior written notice to expire at any time or the Executive giving to
the Company not less than not less than 12 months’ prior written notice to
expire at any time.

 

(3)                                  Notwithstanding Clause 2(2) above, the Appointment shall
automatically terminate without notice on the Executive attaining the age of
60.

 

3.                                      DUTIES OF THE EXECUTIVE

 

(1)                                  During the Appointment the Executive shall use his best endeavours
to promote the interests of the Company and each company in the Prudential
Group and shall carry out 

 

 

his duties
with all due expertise, diligence and technical skill, giving at all times the
full benefit of his knowledge and experience.

 

(2)                                  The Executive shall perform such duties and exercise such powers in
relation to the conduct and management of the affairs of the Prudential Group
as may from time to time reasonably be assigned or communicated to or vested in
him by the Board consistent with the nature of the Appointment.

 

(3)                                  Where notice of termination has been served by either the Company or
the Executive whether in accordance with clause 2(2) or otherwise, the Company
shall be under no obligation to provide work for or assign any duties to the
Executive for the whole or any part of the relevant notice period and may
require him:

 

(i)                                     not to attend any premises of the Company or any other company in
the Prudential Group; and/or

 

(ii)                                  to resign with immediate effect from any offices he holds with the
Company or any other company in the Prudential Group (and any related
trusteeships); and/or

 

(iii)                               to refrain from business contact with any customers, clients or
employees of the Company or any other company in the Prudential Group; and/or

 

(iv)                              to take any accrued holiday during any period of suspension under
this clause 3(3).

 

The provision
of clause 4(2) shall remain in full force and effect during any period of
suspension under this clause 3(3).  For
the avoidance of doubt the Executive will continue to be bound by duties of
good faith and fidelity to the Company in any period during which he is not
required to attend work.

 

During such
suspension the Executive shall be entitled to the remuneration and benefits due
under this Agreement.

 

(4)                                  The Board may also suspend all or any of the Executive’s duties and
powers during any period in which the Company and/or the Board is carrying out
an investigation into any alleged act or default of the Executive.  Such a suspension shall be on such terms as
the Board considers expedient (including a term that the Executive shall not
attend at the Company’s premises during
such suspension) providing that:

 

(i)                                     the Board on or before such suspension notifies
the Executive in writing of such grounds; and

 

(ii)                                  during such suspension the Executive shall be
entitled to the remuneration and benefits due under this Agreement.

 

(5)                                  The Executive shall at all times promptly give
to the Company and the Board (in writing if so required) all such information
and explanations concerning the affairs of any company within the Prudential
Group as the Company or the Board shall require and of which the Executive is
aware.

 

(6)                                  The Executive shall comply with all
instructions and directions from time to time laid down by the Company and/or
the Board for senior executives including those rules 

 

 

relating
to holding and dealing in the shares of Prudential Group.  The Executive shall also comply with the
requirements laid down by all external regulatory bodies.

 

(7)                                  The Executive shall allow the Company
supervised access on reasonable notice to all or any of the properties in which
he resides from time to time in order for the Company to assess, and, if the
Company considers it desirable, to carry out at its own expense those security
measures which the Company may consider advisable for the protection of the
Executive.

 

4.                                      PERFORMANCE OF DUTIES

 

(1)                                  During the continuance of the Appointment, the
Executive shall (unless prevented by ill-health or accident or otherwise
directed by the Board) devote such of his  time, attention and abilities to the
business and interests of the Company or any other company in the Prudential
Group as the proper performance of his duties hereunder demands.

 

(2)                                  The Executive shall not (unless otherwise
agreed by the Company and/or the Board) undertake any other business or
profession, or be, or become directly or indirectly concerned, or interested in
any other business or profession except as holder or beneficial owner, for the
purpose only of a passive minority investment, of securities dealt in or on any
recognized stock exchange (not exceeding 5 per cent of the total number or
value of such securities from time to time in issue).

 

(3)                                  The Executive shall perform his duties at such offices of the
Company in Asia or London or at such other locations as may be agreed from time
to time as the Company or the Board may from time to time reasonably require.

 

5.                                      REMUNERATION

 

(1)                                  During the Appointment the Company will pay the Executive an annual
salary as separately notified, to accrue from day to day and to be payable by
equal monthly instalments in arrears to a bank nominated by the Executive.  The rate of salary shall be subject to
periodic review but shall not be reduced without the prior written agreement of
the Executive.  The Company reserves the
right to withhold or deduct from the Executive’s salary any amount owed by the
Executive to the Company or any company in the Prudential Group.

 

(2)                                 The Executive will be paid a salary supplement
for pension purposes of a percentage of base salary.

 

 

The contribution is on an age related scale:

 

	
  Age

  	
   

  	
  Percentage

  
	
  35-39

  	
   

  	
  23%

  
	
  40-44

  	
   

  	
  26%

  
	
  45-49

  	
   

  	
  30%

  
	
  50-54

  	
   

  	
  34%

  
	
  55-60

  	
   

  	
  38%

  

 

The
Executive will be required to provide evidence to the Company that this
supplement is used for retirement benefits.

 

(3)                                  The Company will meet the cost of providing
death in service cover equal to four times the Executive’s annual basic
salary.  A medical examination will be
needed to satisfy the underwriting requirements.

 

(4)                                  Subject to production, if requested, of medical certificates
satisfactory to the Company, full remuneration will continue to be payable
notwithstanding the Executive’s incapacity for work due to sickness or accident
(unless and until the Appointment shall be determined under any terms hereof)
for the first six months of such incapacity. 
During this period of incapacity, the Company shall only give notice
terminating the Appointment on grounds of redundancy, falling within
section 139 of The Employment Rights Act 1996 or those circumstances as
set out in clause 9(2). Thereafter
the Company may at its discretion discontinue the payment of remuneration under
this Agreement in which event the rules of the Prudential Staff Long Term
Incapacity Scheme as from time to time in force, will apply to the Executive.

 

(5)                                  If the Executive is incapable of performing his
duties by reason of injury sustained wholly or partly as a result of
negligence, nuisance or breach of any statutory duty on the part of any third
party all payments made to the Executive by the Company shall (insofar as
lawful) be by way of interest free loan repayable to the Company only when and
to the extent that compensation is recovered for loss of earnings from that
third party by legal action or otherwise in so far as it is not repayable to
the Department of Social Security.

 

(6)                                  The Executive, his wife and his  unmarried
children below the age of 18 (or 21 if in full time education) will be eligible
free of charge to participate with effect from the Commencement Date until
termination of employment in the Prudential Group medical insurance scheme 

 

 

which
in Asia is currently provided by BUPA International.
The Company will pay for the cost of medical cover (currently BUPA membership
under Company rules), with the exception of routine maternity care.

 

(7)                                  The Executive is eligible to participate in the
remuneration plans available from time to time to senior executives of the
Prudential Group (subject to the rules governing the availability of those
benefits generally) which currently include:

 

(a)                                  the Prudential Restricted Share Plan (“RSP”);

 

(b)                                 the Prudential Annual Incentive Plan (“AIP”);

 

(c)                                  any other annual incentive arrangements
generally established for senior executives from time to time;

 

(d)                                 While the Executive is employed as Chief Executive, Prudential
Corporation Asia, at the discretion of the Company he will be eligible for
invitation to participate in the Asian Regional Long Term Incentive Plan.
Participation is subject to the rules of the Plan, as set and amended from time
to time at the discretion of the Company;

 

(e)                                  the Prudential Savings Related Share Option
Scheme,     details of which have been supplied to the
Executive.

 

(8)                                  Participation in the Prudential RSP, AIP,
Regional Long Term Incentive Plan, any other annual or long term incentive
arrangement and Savings Related Share Option Scheme is a matter entirely
separate from the Executive’s terms and conditions of employment; the Company
has no contractual obligation to invite the Executive’s  participation in any plan cycle; and in
particular if the Executive’s employment shall terminate for whatever reason
(whether lawfully or in breach of contract) he shall not be entitled to any
compensation for any loss of any right or benefit or prospective right or
benefit under any scheme which he might otherwise have enjoyed whether such
compensation is claimed by way of damages for wrongful dismissal or other
breach of contract or by way of compensation for loss of office or otherwise.

 

6.                                      EXPENSES

 

The
Company, on production of the relevant receipts and/or invoices, shall
reimburse the Executive for all travelling, hotel, entertainment and other
out-of-pocket expenses properly incurred by him from time to time in the
execution of his duties 

 

 

hereunder
in accordance with the relevant rules of the Company for the time being in
force.

 

7.                                      TAX

 

The
Executive is responsible for ensuring the appropriate tax is paid on his
earnings.  Because of the Company’s
concern that tax obligations are met, the Company is prepared to meet the costs
of obtaining professional tax advice from an organisation acceptable to the Company.

 

8.                                      HOLIDAY

 

The
Executive shall be entitled to such holiday with pay in each calendar year (in
addition to statutory holidays) as the proper performance of his  duties
hereunder permits and in accordance with the guidelines laid down by the
Company from time to time.

 

9.                                      ASSIGNMENT IN HONG KONG

 

While
the Executive is based in Hong Kong the Company will:

 

(a)          reimburse
the expenses of appropriate fully furnished accommodation in Hong Kong
including the cost of essential services i.e. water, gas and telephone but
excluding the cost of personal foreign phone calls. The Executive should agree
the accommodation selected with the Group Chief Executive, Prudential prior to
making any commitments.  The Company
will agree with the Executive an appropriate budget for furnishings if
required.

 

(b)         reimburse one return first class flight for the
Executive and his family between Hong Kong and the US per annum.

 

(c)          Reimburse the cost of appropriate school fees for the Executive’s
children.

 

(d)         subject
to prior written approval by the Group Chief Executive, the Company will pay
the entrance fees and annual subscriptions for those clubs to which it is
appropriate the Executive belongs in order to undertake his role effectively.

 

 

10.                               NON-SOLICITATION

 

(1)                                  The Executive undertakes that during the
Appointment and (subject to clause 10(2)) for a period of 12 months following
the termination of the Appointment (the “Exclusion Period”) he shall not
whether on his own account or otherwise and whether directly or indirectly:

 

(a)                                  solicit, interfere with, endeavour to entice
away or induce to leave their employment any director or senior manager who is
then or was at the date of termination of the Appointment an employee of  or engaged by the Company or any other
company within the Prudential Group and with whom the Executive ad business
dealings during the course of his employment in the 12 month period immediately
prior to the termination of the Appointment. 
Nothing in this clause shall prohibit the
seeking or doing of business not in direct or indirect competition with the
business of the Company or any company within the Prudential Group; or

 

(b)                                 solicit, interfere with or endeavour to or
actually entice away from the Company or any company within the Prudential
Group business orders, or custom for products or services similar to those
being provided by the Company or any company within the Prudential Group from
any person, firm or corporation who was at the date of termination of the
Appointment, or had been at any time within the year ending on that date, a
customer or in the habit of doing business with the Company or any company in
the Prudential Group and with whom the Executive was directly concerned in the
twelve months before the termination of the Appointment.  Nothing in this clause shall prohibit the seeking or doing of business not in direct or
indirect competition with the business of the Company or any company within the
Prudential Group; or

 

(c)                                  carry on, set up, be employed, engaged or interested in a business
anywhere in Asia which is or is about to be in competition with the business of
the Company or any company within the Prudential Group as at the date of  with which the Executive was actively
involved during the 12 month period immediately prior to termination of the
Appointment, including (but not limited to) the businesses of the companies
listed in Schedule 1 (or such other companies as may, from time to time,
carry on such businesses).  It is agreed
that in the event that any such company ceases to be in competition with the
Company and/or any company within the Prudential Group, this clause 10(1)(c)
shall, with effect from that date, cease to apply in respect of such
company.  The provisions of this clause
10(1)(c) shall not, at any time following the termination of the Appointment,
prevent the Executive from holding shares or other capital not amounting to
more than 3% of the total issued share capital of any company whether listed on
a recognised stock exchange or not and, in addition, shall not prohibit the
seeking or doing of business not in direct or indirect competition with the
business of the Company or any company within the Prudential Group.

 

(2)                                  The period during which the restrictions
referred to in clause 10 shall apply following the termination of the
Appointment shall be reduced by the period of notice actually served.  The amount of time during which, if at all,
the Company suspends the 

 

 

Employee
under the provision of clause 3(3), shall also reduce the period during which
the restrictions referred to in clause 10 shall apply.

 

(3)                                  The Executive acknowledges and agrees that:

 

(a)                                  each of sub-clauses 10(1)(a) (b) and (c) hereof
constitute an entirely separate and independent restriction on him;

 

(b)                                 the duration extent and application of each of
the restrictions are no greater than is necessary for the reasonable protection
of the proper interests of the Prudential Group; and

 

(c)                                  if any such restriction is found by any court
of competent jurisdiction to be void or unenforceable as going beyond what is
reasonable in the circumstances for the protection of the interests of the
Prudential Group but would be valid if part of the wording was deleted and/or
the period thereof was reduced and/or the territory concerned was reduced the
restriction shall apply within the jurisdiction of that court with such
modifications as may be necessary to make it valid and effective.

 

11.                               TERMINATION OF EMPLOYMENT

 

(1)                                  The Appointment may be terminated by either
party by notice given in accordance with Clause 2.

 

(2)                                  Notwithstanding the other provisions of this
Agreement and without prejudice to the rights and remedies of the Company for
any breach of this Agreement, and to the Executive’s continuing obligations
under Clauses 10 and 13, the Company shall at any time be entitled by notice in
writing to the Executive to terminate the Appointment immediately in any of the
following circumstances, namely:

 

(a)                                  if he is or becomes bankrupt or has a receiving
order made against him or compounds with his creditors or otherwise takes
advantage of any statute for the time being in force offering relief for
insolvent debtors; or

 

(b)                                 if  he is guilty of serious misconduct or
behavior such as to bring any company in the Prudential
Group into disrepute (including but without limitation the commission of a
criminal offence (excluding Land Traffic offences) or commits any serious
breach of any of his obligations to the Company or any other company in the
Prudential Group (whether under this Agreement or otherwise) and such misconduct
behavior or breach justifies summary dismissal; or

 

(c)                                  if he  refuses to comply with any lawful orders
or directions reasonably given to him by the Company or the Board or neglects
so to comply with material adverse consequences for the Prudential Group; or

 

(d)                                 if he fails or refuses to perform substantially
the duties of the position which 

 

 

he holds under
this Agreement or engages in willful or reckless conduct injurious to or
damaging to the reputation of the Company or any other company within the
Prudential Group; or

 

(e)                                  if he is prevented from carrying out his duties by reason of a
personal disqualification by an industry regulator, caused by reasons
attributable to the Executive; or

 

(f)                                    commits any serious or repeated breach of any of his obligations
under this Agreement or the Appointment

 

(3)                                  The Executive shall have no claim against the Company for damages or
otherwise by reason of such termination. 
Any delay or forbearance by the Company in exercising any such right of
termination shall not constitute a waiver of its rights in respect of any
subsequent occurrence giving rise to such a right.

 

(4)                                  Without prejudice to the Transfer of
Undertakings (Protection of Employment) Regulations 1981, if at any time during
this Agreement the Executive’s employment is terminated by reason of
reconstruction or amalgamation of the Company and the Executive is offered
employment with any concern or undertaking resulting from such reconstruction
or amalgamation upon terms and conditions no less favourable than the terms of
this Agreement and of similar status then the Executive shall have no claim
against the Company in respect of the termination of the Appointment.

 

(5)                                  The Executive shall promptly deliver to the
Company upon the date of termination:

 

(a)                                  any credit cards or any property provided by
the Company or any other company within the Prudential Group; and

 

(b)                                 all lists of clients or customers,
correspondence, books, and all other documents, papers and records which may
have been prepared by him or have come into his possession in the course of his
employment and the Executive shall not be entitled to and shall not retain any
copies thereof: title and copyright therein shall at all times remain in the
Company.  The Company will on request
make available copies of board minutes and supporting documents which the
Executive reasonably requires in connection with any legal or regulatory
proceedings in which he is or may become involved.

 

(6)                                  In the event that the Appointment is terminated
under this clause or otherwise and the Executive becomes entitled to any
compensation in connection with the Appointment or its Termination, the Company
shall be entitled to pay any such compensation to the Executive over 12 monthly
installments payable on the last day of every month, where the amount of each
monthly installment shall be equal to A minus B, where A is equal to the total
compensation payable to the Executive divided by 12, and, B is equal to the
total earnings of the Executive (less required deductions
for income tax and employees’ national insurance contributions) referable to any engagement or employment that
the Executive has carried out during that month.

 

 

12.                               EXECUTIVE’S POSITION AS DIRECTOR

 

(1)                                  The duties of the Executive as a director of any
company within the Prudential Group shall be subject to the Articles of
Association of the relevant company for the time being and (subject to
sub-clause (2) below) shall be separate from and additional to his duties
pursuant to the Appointment.  The Executive’s
salary under this Agreement is inclusive of any remuneration to which the
Executive may be entitled as a director of Prudential or any other company
within the Prudential Group.

 

(2)                                  If the Executive is removed from office as a
director of Prudential during the Appointment by any resolution of a general
meeting or of the Board or by not being re-elected after retiring by rotation
pursuant to the Articles of Association of Prudential the Executive
acknowledges and agrees that such removal or cessation shall not amount to a
breach of the Appointment and shall not entitle the executive to bring a claim
of constructive dismissal, but such removal or cessation shall automatically constitute the Company
giving notice to terminate the Appointment within the provisions of clause
2(2).

 

(3)                                  Upon termination of the Appointment for
whatever reason the Executive shall forthwith in writing resign his position as
a director of Prudential and of any other company within the Prudential Group,
without compensation for loss of office but without prejudice to any other
claims the Executive may have for damages for breach of this Agreement.

 

(4)                                  If the Executive fails to comply with his
obligations in sub-clause 12(3) hereof, he  hereby irrevocably authorises Prudential to
appoint some person in his name and on his behalf to sign any documents and/or
do all things necessary to give effect to the resignations referred to in
sub-clause 12(3) above.

 

13.                               CONFIDENTIAL INFORMATION

 

(1)                                  The Executive shall not, either during the
continuance of the Appointment or thereafter, use to the detriment or prejudice
of the Company or any other company within the Prudential Group or, except in
the proper course of his duties, divulge to any person any Confidential
Information concerning the business or affairs of the Company or any other
company within the Prudential Group which may have come to his knowledge during
his employment.  For the purposes of
this Agreement “Confidential Information” shall mean details of suppliers and
their terms of business, details of customers, prices charged to and terms of
business with customers, marketing plans and sales forecasts, any proposals
relating to the acquisition or disposal of a company or business or any part
thereof, details of employees and officers and of the remuneration and other
benefits paid to them and any other information which may reasonably be
classified as confidential, but so that these instructions shall cease to apply
to any information which shall become available generally otherwise than
through the fault of the Executive.  The restrictions in this clause shall not apply:

 

 

(i)                                     to any disclosure or use authorised by the Board or required by law
or by the Appointment; or

 

(ii)                                  so as to prevent the Executive from using his own personal skill in
any business in which he may be lawfully engaged after the Appointment is ended
or

 

(iii)                               to prevent the Executive making a protected disclosure within the
meaning of s43A of the Employment Rights Act 1996.

 

(2)                                  The Executive shall maintain all necessary and proper security
precautions when in the possession of Confidential Information and shall remove
Confidential Information (in non-electronic form) from Prudential’s premises
only to the extent it is strictly necessary for the proper performance of his
duties hereunder. The Executive will comply with the Company’s standards
relating to confidentiality of information in electronic form.

 

14.                               GRATUITIES AND CODES OF CONDUCT

 

(1)                                  Without the Company’s permission the Executive
shall not directly or indirectly accept any commission, rebate, discount or
gratuity, in cash or in kind, from any person who has or is likely to have a
business relationship with any company in the Prudential Group. Express
permission is not required for reasonable business entertainment such as
lunches, sporting, cultural or social events undertaken in the normal course of
the Executive’s duties and in accordance with any directions given by the
Company.

 

(2)                                  The Executive shall comply with all codes of
conduct from time to time adopted by the Board and with all applicable rules
and regulations of The Stock Exchange and any other relevant regulatory body.

 

15.                               DATA PROTECTION

 

(1)                                  The Executive consents to the Company and any company within the
Prudential Group processing data relating to him at any time (whether before,
during or after the Employment) for the following purposes:

 

(i)                                     performing its obligations under the Agreement (including
remuneration, payroll, pension, insurance and other benefits, tax and national
insurance obligations);

 

(ii)                                  the legitimate interests of the Company and any company within the
Prudential Group including for the purposes of any sickness policy, working
time policy, investigating acts or defaults (or alleged or suspected acts or
defaults) of the Executive, security, management forecasting or planning and
negotiations with the Executive;

 

 

(iii)                               processing in connection with any corporate transaction  in which the Company or any company within
the Prudential Group is involved or any transfer of any business in which the
Executive performs his duties; and

 

(iv)                              transferring data to countries outside the European Economic Area
for any of the purposes referred to in (i), (ii) or (iii) above.

 

(2)                                  The Executive explicitly consents to the Company and any company
within the Prudential Group processing sensitive personal data (within the
meaning of the Data Protection Act 1998) at any time (whether before, during or
after the Appointment) for the following purposes:

 

(i)                                     where the sensitive personal data relates to the Executive’s health,
any processing in connection with the operation of the sickness policy of the
Company (or any company within the Prudential Group) or any relevant pension
scheme or monitoring absence;

 

(ii)                                  where the sensitive personal data relates to an offence committed,
or allegedly committed, by the Executive or any related proceedings, processing
for the purpose of the disciplinary purposes of the Company or of any company
within the Prudential Group;

 

(iii)                               for all sensitive personal data, any processing in connection with
any merger, sale or acquisition of a company or business in which the Company
or any company within the Prudential Group is involved or any transfer of any
business in which the Executive performs his duties; and

 

(iv)                              for all sensitive personal data, any processing in the legitimate
interests of the Company or any company within the Prudential Group.

 

16.                               ASSIGNMENT

 

The
Company may assign its interest in this Agreement to any other company within the Prudential
Group with the agreement of the Executive such agreement not to be unreasonably
withheld.

 

17.                               STATUTORY REQUIREMENTS

 

The
Executive shall also be subject to the terms set out in the
Schedule attached to this Agreement in connection with the Employment
Rights Act 1996.

 

 

18.                               NOTICES

 

Any
notice or other document to be given hereunder shall either be delivered
personally or be sent by first class recorded delivery or fax.  The address for service on the Company shall
be its registered office for the time being and the address for service on the
Executive shall be his last known place of residence.  A notice shall be deemed to have been served as follows:-

 

(a)                                  if personally delivered, at the time of
delivery;

 

(b)                                 if posted, at the expiration of 48 hours after
the envelope containing the same was delivered into the custody of the postal
authorities;

 

(c)                                  if sent by fax, at the time of dispatch.

 

In
proving such service it shall be sufficient to prove that personal delivery was
made, or that the envelope containing such notice was properly addressed and
delivered into the custody of the postal authorities as a pre-paid, first
class, recorded delivery letter, or that the 
fax was properly addressed and dispatched as the case may be.

 

19.                               MISCELLANEOUS

 

(1)                                  This Agreement forms the entire understanding
of the parties as to its subject matter and both parties acknowledge that
neither of them has entered into this Agreement in reliance upon any
representation warranty or undertaking which is not set out in this Agreement
as forming part of the contract of employment of the Executive.

 

(2)                                  Any reference in this Agreement to an Act of
Parliament shall be deemed to include any statutory modification or
re-enactment thereof whenever made.

 

(3)                                  The headings shall be disregarded in construing
this Agreement.

 

IN
WITNESS the hands of the Executive and of the duly authorized representative of
the Company on the date first above written.

 

 

THE SCHEDULE

 

In
accordance with the Employment Rights Act 1996, the following terms of the
Executive’s appointment apply on the date of the Agreement as provided
therein:-

 

(a)                                  Remuneration -  Clause 5(1)

 

(b)                                 Hours of Work - There are no fixed hours of work - 
Clause 4

 

(c)                                  Holidays -  Clause 7

 

(d)                                 Sickness and Injury - the Executive is entitled to be paid during
any period of absence from work due to sickness or injury, subject however to
the provisions of sub-clause 5(3)

 

(e)                                  Pension Arrangements - 
Clause 5(2)

 

(f)                                    Notice -  Clause 2(2)

 

(g)                                 Job Title -  Clause 2(1)

 

(h)                                 Grievance Procedure - If the Executive seeks to redress any
grievance relating to his employment he should apply in writing to the Chief
Executive of the  Prudential Group.

 

(i)                                     Disciplinary Procedure - There are no disciplinary rules applicable
to senior executives so that any disciplinary action relevant to the Executive
will be considered and handled according to the particular circumstances and
the Executive’s position.  Should the
Executive be dissatisfied with any disciplinary decision he/she should appeal
in writing to the Chief Executive of the Prudential Group.

 

(j)                                     Date of Commencement of Employment - The date of commencement of employment (i.e.
date of joining Prudential) is the Commencement Date - Clause 1.

 

(k)                                  Place of work - Clause 4(3).

 

(l)                                     Collective Agreements which directly affect the Executive’s terms
and conditions - none.

 

 

	
  SIGNED
  by Jonathan Bloomer

  	
   

  
	
  on
  behalf of PRUDENTIAL PLC

  	
  /s/
  J W Bloomer

  
	
   

  	
   

  
	
  In
  the presence of:-   /s/ P Evans

  	
   

  
	
   

  	
   

  
	
  SIGNED
  by Mark Norbom

  	
  /s/
  M Norbom

  
	
   

  	
   

  
	
  In
  the presence of:-   /s/ A Garlick

  	
   

  
	
   

  	
   

  
	
  SIGNED
  by Jane Celia Kibbey

  	
  /s/
  Jane Kibbey

  
	
  on
  behalf of PRUDENTIAL SERVICES LIMITED

  	
   

  
	
   

  	
   

  
	
  In
  the presence of:-   /s/ C Asherson

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