Document:

Exhibit 10.45

 

NOBLE ENVIRONMENTAL POWER

 

ANNUAL INCENTIVE PLAN

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1

  	
  BACKGROUND AND PURPOSE

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Effective Date

  	
  1

  
	
  1.2

  	
  Purpose of the Plan

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 2

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  “Actual Award”

  	
  1

  
	
  2.2

  	
  “Affiliate”

  	
  1

  
	
  2.3

  	
  “Board”

  	
  1

  
	
  2.4

  	
  “Bonus Pool”

  	
  1

  
	
  2.5

  	
  “Code”

  	
  1

  
	
  2.6

  	
  “Committee”

  	
  1

  
	
  2.7

  	
  “Company”

  	
  1

  
	
  2.8

  	
  “Disability”

  	
  1

  
	
  2.9

  	
  “Employee”

  	
  2

  
	
  2.10

  	
  “Participant”

  	
  2

  
	
  2.11

  	
  “Performance Period”

  	
  2

  
	
  2.12

  	
  “Plan”

  	
  2

  
	
  2.13

  	
  “Target Award”

  	
  2

  
	
  2.14

  	
  “Termination of Service”

  	
  2

  
	
   

  	
   

  	
   

  
	
  SECTION 3

  	
  SELECTION OF PARTICIPANTS AND DETERMINATION OF
  AWARDS

  	
  2

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Selection of Participants

  	
  2

  
	
  3.2

  	
  Determination of Target Awards

  	
  2

  
	
  3.3

  	
  Bonus Pool

  	
  2

  
	
  3.4

  	
  Discretion to Modify Awards

  	
  2

  
	
  3.5

  	
  Discretion to Determine Criteria

  	
  2

  
	
   

  	
   

  	
   

  
	
  SECTION 4

  	
  PAYMENT OF AWARDS

  	
  3

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Right to Receive Payment

  	
  3

  
	
  4.2

  	
  Timing of Payment

  	
  3

  
	
  4.3

  	
  Form of Payment

  	
  3

  
	
   

  	
   

  	
   

  
	
  SECTION 5

  	
  ADMINISTRATION

  	
  3

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Committee is the Administrator

  	
  3

  
	
  5.2

  	
  Committee Authority

  	
  3

  
	
  5.3

  	
  Decisions Binding

  	
  4

  
	
  5.4

  	
  Delegation by the Committee

  	
  4

  
	
   

  	
   

  	
   

  
	
  SECTION 6

  	
  GENERAL PROVISIONS

  	
  4

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Tax Withholding

  	
  4

  
	
  6.2

  	
  No Effect on Employment or Service

  	
  4

  

 

i

 

	
  6.3

  	
  Participation

  	
  4

  
	
  6.4

  	
  Successors

  	
  4

  
	
  6.5

  	
  Nontransferability of Awards

  	
  4

  
	
   

  	
   

  	
   

  
	
  SECTION 7

  	
  AMENDMENT, TERMINATION AND DURATION

  	
  5

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Amendment, Suspension or
  Termination

  	
  5

  
	
  7.2

  	
  Duration of the Plan

  	
  5

  
	
   

  	
   

  	
   

  
	
  SECTION 8

  	
  LEGAL CONSTRUCTION

  	
  5

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Gender and Number

  	
  5

  
	
  8.2

  	
  Severability

  	
  5

  
	
  8.3

  	
  Requirements of Law

  	
  5

  
	
  8.4

  	
  Governing Law

  	
  5

  
	
  8.5

  	
  Captions

  	
  5

  

 

ii

 

 

NOBLE
ENVIRONMENTAL POWER

 

ANNUAL
INCENTIVE PLAN

 

SECTION 1

BACKGROUND AND PURPOSE

 

1.1           Effective Date.  The
Board adopted the Plan effective as of January 1,
2008.

 

1.2           Purpose of the Plan.  The
Plan is intended to increase stockholder value and the success of the Company
by motivating employees (a) to perform to the best of their abilities, and
(b) to achieve the Company’s objectives.

 

SECTION 2

DEFINITIONS

 

The
following words and phrases shall have the following meanings unless a
different meaning is plainly required by the context:

 

2.1           “Actual Award” means as to any
Performance Period, the actual award (if any) payable to a Participant for the
Performance Period, subject to the Committee’s authority under Section 3.4
to modify the award.

 

2.2           “Affiliate” means any
corporation or other entity (including, but not limited to, limited liability
companies, partnerships and joint ventures) controlled by the Company.

 

2.3           “Board” means the Board of
Managers (or similar governing body) of the Company.

 

2.4           “Bonus Pool” means the pool of
funds available for distribution to Participants.  Subject to the terms of the Plan, the
Committee establishes the Bonus Pool for each Performance Period.

 

2.5           “Code” means the Internal
Revenue Code of 1986, as amended. 
Reference to a specific section of the Code or regulation thereunder
shall include such section or regulation, any valid regulation promulgated
thereunder, and any comparable provision of any future legislation or
regulation amending, supplementing or superseding such section or regulation.

 

2.6           “Committee” means the Board or
the committee appointed by the Board (pursuant to Section 5.1) to
administer the Plan.

 

2.7           “Company” means Noble
Environmental Power, LLC, a Delaware limited liability company, or any
successor thereto.

 

2.8           “Disability” means a permanent
and total disability determined in accordance with uniform and
nondiscriminatory standards adopted by the Committee from time to time.

 

 

2.9           “Employee” means any employee
of the Company or of an Affiliate, whether such individual is so employed at
the time the Plan is adopted or becomes so employed subsequent to the adoption
of the Plan.

 

2.10         “Participant” means as to any
Performance Period, an Employee who has been selected by the Committee for
participation in the Plan for that Performance Period.

 

2.11         “Performance Period” means the
period of time for the measurement of the performance criteria that must be met
to receive an Actual Award, as determined by the Committee in its sole
discretion.  A Performance Period may be
divided into one or more shorter periods if, for example, but not by way of
limitation, the Committee desires to measure some performance criteria over 12
months and other criteria over 3 months.

 

2.12         “Plan” means the Noble
Environmental Power Annual Incentive Plan, as set forth in this instrument and
as hereafter amended from time to time.

 

2.13         “Target Award” means the target
award, at 100% performance achievement, payable under the Plan to a Participant
for the Performance Period, as determined by the Committee in accordance with Section 3.2.

 

2.14         “Termination of Service” means a
cessation of the employee-employer relationship between an Employee and the
Company or an Affiliate for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, Disability,
retirement, or the disaffiliation of an Affiliate, but excluding any such
termination where there is a simultaneous reemployment by the Company or an
Affiliate.

 

SECTION 3

SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS

 

3.1           Selection of Participants. 
The Committee, in its sole discretion, shall select the Employees who shall be
Participants for any Performance Period. 
Participation in the Plan is in the sole discretion of the Committee, on
a Performance Period by Performance Period basis.  Accordingly, an Employee who is a Participant
for a given Performance Period in no way is guaranteed or assured of being
selected for participation in any subsequent Performance Period or Periods.

 

3.2           Determination of Target Awards. 
The Committee, in its sole discretion, may establish a Target Award for each
Participant.

 

3.3           Bonus Pool.  The
Committee, in its sole discretion, shall establish a Bonus Pool for each
Performance Period.  Actual Awards shall
be paid from the Bonus Pool.

 

3.4           Discretion to Modify Awards. 
Notwithstanding any contrary provision of the Plan, the Committee may, in its
sole discretion and at any time, (a) increase, reduce or eliminate a
Participant’s Actual Award, and/or (b) increase, reduce or eliminate the
amount allocated to the 

 

2

 

Bonus Pool.  The Committee may determine the amount of any
reduction on the basis of such factors as it deems relevant.

 

3.6           Discretion to Determine Criteria. 
Notwithstanding any contrary provision of the Plan, the Committee shall, in its
sole discretion, determine the performance requirements applicable to any
Target Award.  The requirements may be on
the basis of any factors the Committee determines relevant, and may be on an
individual, divisional, business unit or Company-wide basis. Failure to meet
the requirements will result in a failure to earn the Target Award, except as
provided in Section 3.4.

 

SECTION 4

PAYMENT OF AWARDS

 

4.1           Right to Receive Payment. 
Each Actual Award paid in cash shall be paid solely from the general assets of
the Company and the Company may use all or a portion of its cash reserves to
satisfy its obligations under the Plan. 
Nothing in this Plan shall be construed to create a trust or to
establish or evidence any Participant’s claim of any right other than as an
unsecured general creditor with respect to any payment to which he or she may
be entitled.

 

4.2           Timing of Payment. 
Payment of each Actual Award shall be made after the end of the Performance
Period and after the Committee has determined the amount of the Actual
Award  that has been earned.  Unless otherwise determined by the Committee,
a Participant must be employed by the Company or any Affiliate on the date of
payment, whether or not after the Performance Period, to receive a payment
under the Plan.

 

4.3           Form of Payment. 
Each Actual Award shall be paid in cash (or its equivalent) or such other
consideration as may be determined by the Committee.  The payment may be subject to additional
restrictions as may be determined by the Committee.

 

SECTION 5

ADMINISTRATION

 

5.1           Committee is the Administrator. 
The Plan shall be administered by the Committee.  The Committee shall consist of not less than
two (2) members of the Board.  If
the Committee is not the Board, then the members of the Committee shall be
appointed from time to time by, and serve at the request of, the Board.

 

5.2           Committee Authority.  It
shall be the duty of the Committee to administer the Plan in accordance with
the Plan’s provisions.  The Committee
shall have all powers and discretion necessary or appropriate to administer the
Plan and to control its operation, including, but not limited to, the power to (a) determine
which Employees shall be granted awards, (b) prescribe the terms and
conditions of awards, (c) interpret the Plan and the awards, (d) adopt
such procedures and subplans as are necessary or appropriate to permit
participation in the Plan by Employees who are foreign nationals or employed
outside of the United States, (e) adopt rules for the administration,

 

3

 

interpretation and
application of the Plan as are consistent therewith, and (f) interpret,
amend or revoke any such rules.

 

5.3           Decisions Binding.  All
determinations and decisions made by the Committee and any delegate of the
Committee pursuant to the provisions of the Plan shall be final, conclusive,
and binding on all persons, and shall be given the maximum deference permitted
by law.

 

5.4           Delegation by the Committee. 
The Committee, in its sole discretion and on such terms and conditions as it
may provide, may delegate all or part of its authority and powers under the
Plan to one or more directors and/or officers of the Company; provided, that no
officer may have authority or powers under the Plan with respect to his or her
own Actual Award.

 

SECTION 6

GENERAL PROVISIONS

 

6.1           Tax Withholding.  The
Company shall withhold all applicable taxes from any Actual Award, including
any federal, state and local taxes (including, but not limited to, the
Participant’s FICA and SDI obligations).

 

6.2           No Effect on Employment or Service. 
Nothing in the Plan shall interfere with or limit in any way the right of the
Company or any of its Affiliates to terminate any Participant’s employment or
service at any time, with or without cause. 
For purposes of the Plan, transfer of employment of a Participant
between the Company and any one of its Affiliates (or between Affiliates) shall
not be deemed a Termination of Service. 
Employment with the Company and its Affiliates is on an at-will basis
only.  The Company expressly reserves the
right, which may be exercised at any time and without regard to when during a
Performance Period such exercise occurs, to terminate any individual’s
employment with or without cause, and to treat him or her without regard to the
effect that such treatment might have upon him or her as a Participant.

 

6.3           Participation.  No Employee
shall have the right to be selected to receive an award under this Plan, or,
having been so selected, to be selected to receive a future award.

 

6.4           Successors.  All
obligations of the Company under the Plan, with respect to awards granted
hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the
business or assets of the Company.

 

6.5           Nontransferability of Awards. 
No award granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will, by the laws of descent
and distribution.  All rights with
respect to an award granted to a Participant shall be available during his or
her lifetime only to the Participant.

 

4

 

SECTION 7

AMENDMENT, TERMINATION AND DURATION

 

7.1           Amendment, Suspension or
Termination.  The Committee, in its sole discretion, may amend or
terminate the Plan, or any part thereof, at any time and for any reason.

 

7.2           Duration of the Plan. 
The Plan shall commence on the date specified herein, and subject to Section 7.1
(regarding the Committee’s right to amend or terminate the Plan), shall remain
in effect thereafter.

 

SECTION 8

LEGAL CONSTRUCTION

 

8.1           Gender and Number. 
Except where otherwise indicated by the context, any masculine term used herein
also shall include the feminine; the plural shall include the singular and the
singular shall include the plural.

 

8.2           Severability.  In the
event any provision of the Plan shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining parts of
the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.

 

8.3           Requirements of Law.  The
granting of awards under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

 

8.4           Governing Law.  The Plan
and all awards shall be construed in accordance with and governed by the laws
of the State of Delaware but without regard to its conflict of law provisions.

 

8.5           Captions.  Captions are
provided herein for convenience only, and shall not serve as a basis for
interpretation or construction of the Plan.

 

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  EXHIBIT 10.84    
    

 
 

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

        THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT ("Amendment") is made and entered into by and between  Cano Petroleum Inc., a Delaware corporation with its principal
executive offices in Fort Worth, Texas (the "Company"), and  S. Jeffrey Johnson, an individual currently residing in Tarrant County, Texas ("Executive"), effective as of the 31st day of May, 2008
(the
"Amendment Effective Date"). 

        WHEREAS, the Company and Executive entered into that certain Employment Agreement dated as of January 1, 2006 (the "Agreement"); 

        WHEREAS, the Company and Executive now desire to amend, alter, modify and change the terms and provisions of the Agreement, as follows. 

        NOW THERFORE, for and in consideration of the mutual benefits to be obtained hereunder and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed, Company and Executive do hereby agree to amend, alter, modify and change the Agreement, effective prospectively, as of the
Amendment Effective Date as follows: 

        1.    Section 2.    Term.
shall be deleted in its entirety and the following substituted in place and in lieu thereof.

        2.    Term.    The employment of Executive by the Company as provided in this Section will be for a term of three
(3) years (the "Term") commencing on the Effective Date and expiring at the close of business on May 31, 2011. 

Except
as specifically amended, altered, modified and changed hereby, the Agreement remains in full force and effect as originally written. 

Signatures

        To
evidence the binding effect of the covenants and agreements described above, the parties hereto have executed this Amendment effective as of the date First above written. 

					
	
	 	 THE COMPANY:

	
	 	 CANO PETROLEUM, INC.

	
	 	 By:
	 	 /s/ DONALD W. NIEMIEC

Donald W. Niemiec

Chairman of the Compensation Committee
	
	 	 EXECUTIVE:

	
	 	 By:
	 	 /s/ S. JEFFREY JOHNSON

S. Jeffrey Johnson

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EXHIBIT 10.84

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

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