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Exhibit 10.6    
  

EMPLOYMENT AGREEMENT  

        This Employment Agreement, dated as of September 7, 1999, is by and between Key Production Company, Inc., a Delaware corporation (the "Employer"),
and Paul Korus (the "Employee"). 

RECITALS  

        The Employer has determined that it is in the best interests of the Employer and its stockholders to employ the Employee as Vice President and Chief Financial
Officer of the Employer, and the Employee is willing to accept such employment on the terms and conditions described below. 

AGREEMENT  

        In consideration of and subject to the agreements, terms and conditions contained herein, the parties hereto agree as follows: 

ARTICLE I

EMPLOYMENT  

        Section 1.1. Employment of the Employee. The Employer hereby employs the Employee, and the Employee hereby
accepts employment by the Employer, upon the terms and conditions hereinafter set forth. The term "Period of Employment" as used herein shall mean the period from September 7, 1999, until the
first to occur of the end of the term of this Agreement as provided in Section 1.2 or the date of the Employee's termination as provided herein. 

        Section 1.2.
Term. The term of this Agreement shall be two years. 

        Section 1.3.
Commencement of Duties. The Employee shall commence his duties as an employee of the Employer on September 20,
1999. 

ARTICLE II

DUTIES  

        Section 2.1. Duties. During the Period of Employment, the Employee shall, subject to the authority of the
Chairman of the Board of the Employer, be employed as Vice President and Chief Financial Officer, with such duties, responsibilities and authority as are consistent with such office, and with such
additional responsibilities and duties as may be reasonably assigned to him by the Chairman of the Board, which in each case he shall faithfully and diligently perform. 

        Section 2.2.
Time to be Devoted to Employment, Etc. Except for vacations, which in no event shall be less than four paid weeks each
year, and absences due to temporary illness or disability, the Employee shall devote his full time, attention and energies on a full-time basis to the business of the Employer. Nothing in
this Agreement, however, shall preclude the Employee from devoting reasonable periods to (a) engaging in charitable and community activities or (b) managing his personal investments. 

ARTICLE III

COMPENSATION  

        Section 3.1. Base Salary. The Employer shall pay to the Employee a base salary equal to
$12,500.00 monthly or $150,000.00 annually (the "Base Salary"), payable bi-monthly in arrears. The Base Salary may be adjusted as determined by the Chairman, but shall not be
decreased below the Base Salary in existence immediately prior to such adjustment. 

        Section 3.2.  Annual Incentive Bonuses. The Employee shall be eligible for incentive bonuses as approved by the Employer's Board of
Directors (the "Board"). 

 

        Section 3.3.
Reimbursement for Expenses. The Employer shall reimburse the Employee for all reasonable and necessary travel expenses
and other reasonable disbursements made by him for or on behalf of the Employer in the performance of his duties hereunder on the Employer's business, upon presentation by the Employee to the Employer
of appropriate vouchers. 

        Section 3.4.
Incidental Benefits. The Employer shall provide life insurance coverage for the Employee in a face amount equal to two
times his annual salary and a covered parking space. 

        Section 3.5.
Employee Benefit Plans. During the Period of Employment, the Employee and his immediate family shall be entitled to
participate in employee benefit plans. The Employer has established, and the Employee shall be eligible to participate in, a health and dental plan, a long-term disability plan, a deferred
compensation plan, an income continuance plan, and a 401(k) plan with an Employer matching contribution of at least four percent of the Employee's Base Salary (subject to any limitations on such
contributions imposed by the Internal Revenue Code of 1986 or the Employee Retirement Income Security Act of 1974). 

        Section 3.6.
Option Grant. The Board shall grant to the Employee on September 7, 1999, a stock option in the form adopted by
the Employer for options granted under its Employee Stock Option Plan previously approved by the Board, with such option to cover the purchase of 120,000 shares of the Employer's common stock at an
exercise price equal to the fair market value of such common stock on September 7, 1999. Such option is to be exercisable until the earlier of ten years after its grant date or the termination
of the Employee's employment with the Employer. Such option shall vest with respect to one-third of the shares covered by the option after each year of the Employee's employment with the
Employer. 

        Section 3.7.
Stock Grant. The Board shall grant to Employee on September 20, 1999, 10,000 shares of the Employer's common
stock, subject to the restrictions contained in a Restricted Stock Agreement in the form previously approved by the Board for restricted stock grants. Such grant shall vest after three years of the
Employee's employment with the Employer, except for earlier vesting provisions in the case of death, disability or retirement after the age of 65 of the Employee. 

ARTICLE IV

DISABILITY OR DEATH OF THE EMPLOYEE  

        Section 4.1. Disability. If the Employee is incapacitated or disabled by accident, sickness or otherwise so
as to render him mentally or physically incapable of performing the services required to be performed by him under this Agreement for a period of 90 consecutive days or for a total of 120 days
in any twelve-month period, the Employer may, at its option, if payments to the Employee have commenced
under the Employer's long-term disability plan, at that time or any time thereafter, terminate the Period of Employment immediately (provided that both such disability and payments under
the Employer's long-term disability plan shall have continued to the time of termination) upon giving him notice to that effect. Until the Employer shall have terminated the Employee's
employment in accordance with the foregoing, the Employee shall be entitled to receive his compensation, pursuant to Article III notwithstanding any such physical or mental disability. Nothing
herein shall limit the Employee's right to receive any amounts to be paid to the Employee under any disability or employee benefit plan of the Employer, if any, or under any other disability insurance
policy or plan covering the Employee. 

        Section 4.2.
Death. If the Employee dies during the Period of Employment, his employment, his employment hereunder and the Period
of Employment shall terminate on the date of his death. 

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ARTICLE V

TERMINATION FOR CAUSE  

        Section 5.1. Termination for Cause. The Employer may, by summary notice in writing, terminate the Period of
Employment for cause. For the purposes of this Agreement, the term "cause" shall mean: 

        (a)  a
serious breach or any continued default by the Employee in the substantial performance of his duties under this Agreement (other than resulting from his disability)
for a 30-day period after a demand for substantial performance is delivered to the Employee by the Employer, which demand specifies and identifies the manner in which the Employee has not
substantially performed his duties. 

        (b)  misconduct
by the Employee which is injurious to himself or the Employer, provided that conduct will not be deemed misconduct if it was engaged in by the Employee in
good faith in the belief that it was in, or not opposed to, the interests of the Employer, or was engaged in at the direction of the President or the Board; or 

        (c)  the
intentional commission by the Employee of either: 

        (i)    a
business crime the intended purpose of which was to enrich the Employee at the expenses of the Employer; or 

        (ii)  a
felony of which the Employee is convicted or to which he pleads guilty or nolo contendere. 

ARTICLE VI

TERMINATION WITHOUT CAUSE  

        Section 6.1. Employer Termination. The Employer may terminate the Period of Employment without cause at any
time by giving the Employee 30 days prior written notice. Upon the expiration of such 30-day period, the Period of Employment shall terminate. 

        Section 6.2.
Employee Termination. For purposes of this Agreement, the Period of Employment shall be deemed to have been terminated
without cause if the Employee resigns under any of the following conditions: 

        (a)  upon
the continued default (including a material reduction in the duties, responsibilities and authority of the Employee as set forth in Article II) by the
Employer in the substantial performance of its obligations hereunder for a 30-day period after a demand for substantial performance is delivered to the Employer by the Employee, which
demand specifies and identifies the manner in which the Employer has not substantially performed its obligations; or 

        (b)  upon
the Employee being directed by the President or the Board to engage in any activity which the Employee, based upon written advice of competent legal counsel,
believes would constitute criminal activity, provided that the Employee gives notice to the Employer providing it with a copy of the written advice of his legal counsel and the Employer does not,
within five business days after its receipt of such notice, withdraw its request that the Employee engage in the activity in question. 

ARTICLE VII

EFFECT OF TERMINATION OF PERIOD OF EMPLOYMENT  

        Section 7.1. Termination for Cause or Voluntarily. Upon termination of the Period of Employment pursuant to
Article V, or by the Employee (except under the conditions set forth in Section 6.2), neither the Employee nor his beneficiaries or estate shall have any further rights or claims against
the Employer under this Agreement except to receive: 

        (a)  the
unpaid portion of the Employee's Base Salary provided for in Section 3.1, computed on a pro-rata basis to the date of termination; 

3

 

        (b)  reimbursement
for any expenses for which the Employee shall not have theretofore been reimbursed as provided in Section 3.3; and 

        (c)  any
benefits, including the right to continued coverage under the Employer's health plans, which are mandated by law for terminated employees. 

        Section 7.2.
Termination for Death, Disability or Without Cause. Upon the termination of the Period of Employment pursuant to
Articles IV or VI, neither the Employee nor his beneficiaries or estate shall have any further rights or claims against the Employer under this Agreement except to receive: 

        (a)  compensation
at the then applicable Base Salary rate through the term of this Agreement as provided in Section 1.2, provided that any payments described in this
paragraph (a) shall be reduced by any payments to the Employee under the Employer's long term disability plan; 

        (b)  reimbursement
for any expenses for which the Employee shall not have theretofore been reimbursed as provided in Section 3.3; and 

        (c)  any
benefits, including the right to continued coverage under the Employer's health plans, which are mandated by law for terminated employees. 

        Section 7.3.  Other Employer Obligations. The provisions of this Article VII shall in no way limit any rights or claims which
the Employee may have by virtue of any other agreements entered into with Employer. 

ARTICLE VIII

CHANGE OF CONTROL  

        Section 8.1. Change of Control. If the Employee continues as an employee of the Employer after the term of
this Agreement, as provided in Section 1.2, and if during the period of such extended employment the Employee is terminated without cause following a "Change in Control" (as defined below), the
Employee shall be entitled to immediate payment of an amount equal to twice the Employee's annual salary at the rate in effect when the Change in Control occurs. The term "Change in Control" as used
herein means the occurrence, after the date of this Agreement, of any of the following: 

        (a)  the
acquisition by any person or group of beneficial ownership of securities (including securities convertible into or exchangeable for or options or other rights to
acquire securities) of the Employer, representing in the aggregate 25% or more of the combined voting power of all securities of the Employer entitled to vote in the election of directors, without the
prior approval of the acquisition resulting in such person or group acquiring such percentage by at least two-thirds of the directors of the Employer who are not affiliates or associates
of such person or group; 

        (b)  during
any period of up to 24 consecutive months, commencing after the date of this Agreement, individuals who at the beginning of such 24-month period were
directors of the Employer ceasing for any reason to constitute two-thirds of the total number of directors of the Employer unless the individuals serving as new or replacement directors
were nominated by at least a majority of the directors of the Employer in office immediately prior to such period; 

        (c)  the
adoption of any plan or proposal to liquidate or dissolve the Employer; or 

        (d)  any
merger or consolidation of the Employer unless thereafter (I) directors of the Employer immediately prior thereto continue to constitute at least
two-thirds of the directors of the surviving entity or transferee or (ii) the Employer's securities continue to represent or are converted into securities that represent more than
80% of the combined voting power of the surviving entity or transferee. 

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        As
applicable, all terms used in this definition of "Change of Control" shall be given their meanings as used in Section 13(d) of the Securities Exchange Act of 1934 as in effect
on the date of this Agreement or Rule 13d-3 or Rule 12b-2 issued thereunder as in effect on the date of this Agreement. 

ARTICLE IX

CONFIDENTIALITY  

        Section 9.1. Confidentiality. The Employee shall not make use of or otherwise reveal any trade secret or
confidence of the Employer, including any information about the Employer or its business which is not generally available to the public including, but not limited to, any such information involving
planning, analysis or strategy, or any investor, financial, legal, geological, geophysical or other proprietary information. Upon termination of employment, the Employee shall promptly surrender all
documents, maps, records, data and other information representing, reflecting or containing trade secrets or confidences. The provisions of this Article IX shall survive for a period of three
years after the end of the Period of Employment. 

ARTICLE X

ARBITRATION  

        Section 10.1. Arbitration. If a dispute arises between the Employer and the Employee as to the
interpretation of this Agreement, the Employer and the Employee agree to submit the matter to binding arbitration in accordance with the Center for Public Resources Rules for
Non-Administered Arbitration of Business Disputes, as modified herein, by a sole arbitrator, in Denver, Colorado, selected in accordance with the provisions of Section 11.2. The
arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. § 1-16, and judgment upon the award rendered by the arbitrator may be entered by any court having
jurisdiction thereof. 

        Section 10.2.
Selection of Arbitrator. The parties shall have 10 days from the date when written notice is provided to
either party by the other party of a request for arbitration to agree upon a mutually acceptable neutral person not affiliated with either of the parties to act as arbitrator. If no arbitrator has
been selected within such time, the parties agree jointly to request the Center for Public Resources or another mutually agreed-upon organization to supply within 10 days a list of
potential arbitrators with qualifications as specified by the parties in the joint request. Within five days of receipt of the list, the parties shall independently rank the proposed candidates, shall
simultaneously exchange rankings, and shall select as the arbitrator the individual receiving the highest combined ranking who is available to serve. 

        Section 10.3.
Cost of Arbitration. The costs of arbitration shall be apportioned between the Employer and the Employee as
determined by the arbitrator in such manner as the arbitrator deems reasonable taking into account the circumstances of the case, the conduct of the parties during the proceeding and the result of the
arbitration. 

ARTICLE XI

MISCELLANEOUS  

        Section 11.1. Necessary Acts. All parties to this Agreement shall perform any and all acts as well as
execute any and all documents that may be reasonably necessary to fully carry out the provisions and intent of this Agreement. 

        Section 11.2.
Notices. All notices, demands, requests or other communications required or permitted by this Agreement or by law to
be served on, given to or delivered to any party hereto by any other party to this Agreement shall be in writing and shall be deemed duly served, given, received and delivered (a) on the date
of service if served personally on the party to whom notice is given, 

5

 

(b) on the day of transmission if sent via facsimile transmission to the facsimile number given below, provided telephone confirmation of receipt is obtained promptly after completion of
transmission, (c) on the business day after delivery to an overnight courier service or the Express Mail service maintained by the United States Postal Service, provided receipt of delivery has
been confirmed, or (d) five days after being sent by registered or certified mail, provided receipt of delivery is confirmed, first-class postage prepaid, properly address to the respective
parties as follows: 

	 	 	If to the Employer:	 	707 Seventeenth Street, Suite 3300

Denver, CO 80202
	

 	
 	

If to the Employee:	
 	

8027 South Fairfax Court

Littleton, Colorado 80122

or
to such other address as may be designated by any such addressees by a notice given in conformity herewith. 

        Section 11.3.
Binding on Successors. This Agreement shall inure to the benefit of and be binding on the parties hereto and on each
of their respective heirs, executors, administrators, personal representatives, successors and assignees. 

        Section 11.4.
Choice of Law and Forum. This Agreement shall be construed and governed by the laws, commercial usages and customs of
the State of Colorado, without giving effect to the principles of conflict of laws thereof. In the event that any dispute, action, proceeding or litigation arises between the parties based on or
arising out of this Agreement, or any agreement or instrument delivered pursuant to this Agreement, subject to the arbitration provisions of Article X the parties agree to submit themselves to
and irrevocably consent to the jurisdiction of the courts of the State of Colorado, and any federal court located in the State of Colorado. 

        Section 11.5.
Headings. The headings of the articles and sections of this Agreement have been inserted solely for convenience of
reference and shall in no way restrict or modify any of the terms or provisions hereof. 

        Section 11.6.  Sole and Only Agreement. This Agreement and the agreements referred to herein constitute the only agreements of the
parties hereto relating to the subject matter hereof. Any prior agreements, promises, negotiations or representations concerning the subject matter of this Agreement not expressly set forth in this
Agreement shall have no force or effect. 

        Section 11.7.
Amendment and Extension. This Agreement may not be amended or extended except by an instrument in writing signed on
behalf of each of the parties hereto. 

        Section 11.8.  Severability. Should any provision or portion of this Agreement be held unenforceable or invalid for any reason, the
remaining provisions and portions of this Agreement shall be unaffected by such holding, unless to do so would alter substantially the intended effect of this Agreement or cause a substantial hardship
for any party hereto. 

        Section 11.9.
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same agreement. 

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        The
parties have duly executed this Agreement as of the date first written above. 

	

 	
 	

EMPLOYER:
	

 	
 	

KEY PRODUCTION COMPANY, INC.
	

 	
 	

By:	
 	

/s/  F. H. MERELLI      
 F. H. Merelli

Chairman of the Board and Chief Executive Officer
	

 	
 	

EMPLOYEE:
	

 	
 	

/s/  PAUL KORUS      
 PAUL KORUS

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Exhibit 10.7    
  

EMPLOYMENT AGREEMENT  

        This Employment Agreement, dated as of October 25, 1993, is by and between Key Production Company, Inc., a Delaware corporation (the "Employer"),
and Thomas E. Jorden (the "Employee"). 

RECITALS  

        The Employer has determined that it is in the best interests of the Employer and its stockholders to employ the Employee as Chief Geophysisist of the Employer,
and the Employee is willing to accept such employment on the terms and conditions described below. 

AGREEMENT  

        In consideration of and subject to the agreements, terms and conditions contained herein, the parties hereto agree as follows: 

ARTICLE I

EMPLOYMENT  

        Section 1.1. Employment of the Employee. The Employer hereby employs the Employee, and the Employee hereby
accepts employment by the Employer, upon the terms and conditions hereinafter set forth. The term "Period of Employment" as used herein shall mean the period from November 8, 1993, until the
first to occur of the end of the term of this Agreement as provided in Section 1.2 or the date of the Employee's termination as provided herein. 

        Section 1.2.
Term. The term of this Agreement shall be three years. 

        Section 1.3.
Commencement of Employment. Employee shall use his best efforts to make the necessary arrangements to enable him to
commence employment with the Employer on November 8, 1993. However, both parties recognize that contingencies exist which may make such commencement date impracticable and, if such
contingencies occur, Employee shall commence employment as soon as possible, but in no event later than November 15, 1993. If Employee commences on a date other than November 8, 1993,
the references in Sections 1.1 and 3.6 to such date shall be deemed to be the actual date employment is commenced. 

ARTICLE II

DUTIES  

        Section 2.1. Duties. During the Period of Employment, the Employee shall, subject to the authority of the
President of the Employer, be employed as Chief Geophysisist of the Employer, with such duties, responsibilities and authority as are consistent with such office, and with such additional
responsibilities and duties as may be reasonably assigned to him by the President, which in each case he shall faithfully and diligently perform. 

        Section 2.2.
Time to be Devoted to Employment, Etc. Except for vacations, which in no event shall be less than three paid weeks
each year, and absences due to temporary illness or disability, the Employee shall devote his full time, attention and energies on a full-time basis to the business of the Employer. Nothing in this
Agreement, however, shall preclude the Employee from devoting reasonable periods to (a) engaging in charitable and community activities or (b) managing his personal investments. 

ARTICLE III

COMPENSATION  

        Section 3.1. Base Salary. The Employer shall pay to the Employee a base salary equal to $7,500.00 monthly
or $90,000.00 annually (the "Base Salary"), payable bi-monthly in arrears. The Base Salary 

 

may be adjusted as determined by the President, but shall not be decreased below the Base Salary in existence immediately prior to such adjustment. 

        Section 3.2.  Annual Incentive Bonuses. The Employee shall be eligible for incentive bonuses as approved by the Employer's Board of
Directors (the "Board"). 

        Section 3.3.
Reimbursement for Expenses. The Employer shall reimburse the Employee for all reasonable and necessary travel expenses
and other reasonable disbursements made by him for or on behalf of the Employer in the performance of his duties hereunder on the Employer's business, upon presentation by the Employee to the Employer
of appropriate vouchers. 

        Section 3.4.  Incidental Benefits. The Employer shall provide life insurance coverage for the Employee in a face amount equal to two
times his annual salary and a covered parking space. 

        Section 3.5.
Employee Benefit Plans. During the Period of Employment, the Employee and his immediate family shall be entitled to
participate in employee benefit plans. The Employer has established, and the Employee shall be eligible to participate in, a health and dental plan, a long-term disability plan and a
401(k) plan with an Employer matching contribution of at least four percent of the Employee's Base Salary (subject to any limitations on such contributions imposed by the Internal Revenue Code
of 1986 or the Employee Retirement Income Security Act of 1974). 

        Section 3.6.
Option Grant. The Board shall grant to the Employee on November 8, 1993 a stock option in the form adopted by
the Employer for options granted under its Employee Stock Option Plan previously approved by the Board, with such option to cover the purchase of 80,000 shares of the Employer's common stock at an
exercise price equal to the fair market value of such common stock on November 8, 1993. Such option is to be exercisable until the earlier of ten years after its grant date or the termination
of the Employee's employment with the Employer. Such option shall vest with respect to one-third of the shares covered by the option after each year of the Employee's employment with the Employer. 

        Section 3.7.
Reimbursement for Moving Expenses. The Employer shall reimburse the Employee for all reasonable and necessary expenses
and disbursements made by him in connection with the physical relocation of his primary residence to Denver, Colorado, upon presentation by the Employee to the Employer of appropriate vouchers. 

ARTICLE IV

DISABILITY OR DEATH OF THE EMPLOYEE  

        Section 4.1. Disability. If the Employee is incapacitated or disabled by accident, sickness or otherwise so
as to render him mentally or physically incapable of performing the services required to be performed by him under this Agreement for a period of 90 consecutive days or for a total of
120 days in any twelve-
month period, the Employer may, at its option, if payments to the Employee have commenced under the Employer's long-term disability plan, at that time or any time thereafter, terminate the Period of
Employment immediately (provided that both such disability and payments under the Employer's long-term disability plan shall have continued to the time of termination) upon giving him notice to that
effect. Until the Employer shall have terminated the Employee's employment in accordance with the foregoing, the Employee shall be entitled to receive his compensation, pursuant to Article III
notwithstanding any such physical or mental disability. Nothing herein shall limit the Employee's right to receive any amounts to be paid to the Employee under any disability or employee benefit plan
of the Employer, if any, or under any other disability insurance policy or plan covering the Employee. 

        Section 4.2.
Death. If the Employee dies during the Period of Employment, his employment, his employment hereunder and the Period
of Employment shall terminate on the date of his death. 

2

 

ARTICLE V

TERMINATION FOR CAUSE  

        Section 5.1. Termination for Cause. The Employer may, by summary notice in writing, terminate the Period of
Employment for cause. For the purposes of this Agreement, the term "cause" shall mean: 

        (a)  a
serious breach or any continued default by the Employee in the substantial performance of his duties under this Agreement (other than resulting from his disability)
for a 30-day period after a demand for substantial performance is delivered to the Employee by the Employer, which demand specifies and identifies the manner in which the Employee has not
substantially performed his duties. 

        (b)  misconduct
by the Employee which is injurious to himself or the Employer, provided that conduct will not be deemed misconduct if it was engaged in by the Employee in
good faith in the belief that it was in, or not opposed to, the interests of the Employer, or was engaged in at the direction of the President or the Board; or 

        (c)  the
intentional commission by the Employee of either: 

        (i)    a
business crime the intended purpose of which was to enrich the Employee at the expenses of the Employer; or 

        (ii)  a
felony of which the Employee is convicted or to which he pleads guilty or nolo contendere. 

ARTICLE VI

TERMINATION WITHOUT CAUSE  

        Section 6.1. Employer Termination. The Employer may terminate the Period of Employment without cause at any
time by giving the Employee 30 days prior written notice. Upon the expiration of such 30-day period, the Period of Employment shall terminate. 

        Section 6.2.
Employee Termination. For purposes of this Agreement, the Period of Employment shall be deemed to have been terminated
without cause if the Employee resigns under any of the following conditions: 

        (a)  upon
the continued default (including a material reduction in the duties, responsibilities and authority of the Employee as set forth in Article II) by the
Employer in the substantial performance of its obligations hereunder for a 30-day period after a demand for substantial performance is delivered to the Employer by the Employee, which demand specifies
and identifies the manner in which the Employer has not substantially performed its obligations; or 

        (b)  upon
the Employee being directed by the President or the Board to engage in any activity which the Employee, based upon written advice of competent legal counsel,
believes would constitute criminal activity, provided that the Employee gives notice to the Employer providing it with a copy of the written advice of his legal counsel and the Employer does not,
within five business days after its receipt of such notice, withdraw its request that the Employee engage in the activity in question. 

ARTICLE VII

EFFECT OF TERMINATION OF PERIOD OF EMPLOYMENT  

        Section 7.1. Termination for Cause or Voluntarily. Upon termination of the Period of Employment pursuant to
Article V, or by the Employee (except under the conditions set forth in Section 6.2), neither the Employee nor his beneficiaries or estate shall have any further rights or claims against
the Employer under this Agreement except to receive: 

        (a)  the
unpaid portion of the Employee's Base Salary provided for in Section 3.1, computed on a pro-rata basis to the date of termination; 

3

 

        (b)  reimbursement
for any expenses for which the Employee shall not have theretofore been reimbursed as provided in Section 3.3; and 

        (c)  any
benefits, including the right to continued coverage under the Employer's health plans, which are mandated by law for terminated employees. 

        Section 7.2.
Termination for Death, Disability or Without Cause. Upon the termination of the Period of Employment pursuant to
Articles IV or VI, neither the Employee nor his beneficiaries or estate shall have any further rights or claims against the Employer under this Agreement except to receive: 

        (a)  compensation
at the then applicable Base Salary rate through the term of this Agreement as provided in Section 1.2, provided that any payments described in this
paragraph (a) shall be reduced by any payments to the Employee under the Employer's long term disability plan; 

        (b)  reimbursement
for any expenses for which the Employee shall not have theretofore been reimbursed as provided in Section 3.3; and 

        (c)  any
benefits, including the right to continued coverage under the Employer's health plans, which are mandated by law for terminated employees. 

        Section 7.3.  Other Employer Obligations. The provisions of this Article VII shall in no way limit any rights or claims which
the Employee may have by virtue of any other agreements entered into with Employer. 

ARTICLE VIII

CHANGE OF CONTROL  

        Section 8.1. Change of Control. If the Employee continues as an employee of the Employer after the term of
this Agreement, as provided in Section 1.2, and if during the period of such extended employment the Employee is terminated without cause following a "Change in Control" (as defined below), the
Employee shall be entitled to immediate payment of an amount equal to twice the Employee's annual salary at the rate in effect when the Change in Control occurs. The term "Change
in Control" as used herein means the occurrence, after the date of this Agreement, of any of the following: 

        (a)  the
acquisition by any person or group of beneficial ownership of securities (including securities convertible into or exchangeable for or options or other rights to
acquire securities) of the Employer, representing in the aggregate 25% or more of the combined voting power of all securities of the Employer entitled to vote in the election of directors, without the
prior approval of the acquisition resulting in such person or group acquiring such percentage by at least two-thirds of the directors of the Employer who are not affiliates or associates of such
person or group; 

        (b)  during
any period of up to 24 consecutive months, commencing after the date of this Agreement, individuals who at the beginning of such 24-month period were
directors of the Employer ceasing for any reason to constitute two-thirds of the total number of directors of the Employer unless the individuals serving as new or replacement directors were nominated
by at least a majority of the directors of the Employer in office immediately prior to such period; 

        (c)  the
adoption of any plan or proposal to liquidate or dissolve the Employer; or 

        (d)  any
merger or consolidation of the Employer unless thereafter (i) directors of the Employer immediately prior thereto continue to constitute at least two-thirds
of the directors of the surviving entity or transferee or (ii) the Employer's securities continue to represent or are converted into securities that represent more than 80% of the combined
voting power of the surviving entity or transferee. 

4

 

        As
applicable, all terms used in this definition of "Change of Control" shall be given their meanings as used in Section 13(d) of the Securities Exchange Act of 1934 as in
effect on the date of this Agreement or Rule 13d-3 or Rule 12b-2 issued thereunder as in effect on the date of this Agreement. 

ARTICLE IX

CONFIDENTIALITY  

        Section 9.1. Confidentiality. The Employee shall not make use of or otherwise reveal any trade secret or
confidence of the Employer, including any information about the Employer or its business which is not generally available to the public including, but not limited to, any such information involving
planning, analysis or strategy, or any investor, financial, legal, geological, geophysical or other proprietary information. Upon termination of employment, the Employee shall promptly surrender all
documents,
maps, records, data and other information representing, reflecting or containing trade secrets or confidences. The provisions of this Article IX shall survive for a period of three years after
the end of the Period of Employment. 

ARTICLE X

ARBITRATION  

        Section 10.1. Arbitration. If a dispute arises between the Employer and the Employee as to the
interpretation of this Agreement, the Employer and the Employee agree to submit the matter to binding arbitration in accordance with the Center for Public Resources Rules for Non-Administered
Arbitration of Business Disputes, as modified herein, by a sole arbitrator, in Denver, Colorado, selected in accordance with the provisions of Section 11.2. The arbitration shall be governed by
the United States Arbitration Act, 9 U.S.C. § 1-16, and judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. 

        Section 10.2.
Selection of Arbitrator. The parties shall have 10 days from the date when written notice is provided to
either party by the other party of a request for arbitration to agree upon a mutually acceptable neutral person not affiliated with either of the parties to act as arbitrator. If no arbitrator has
been selected within such time, the parties agree jointly to request the Center for Public Resources or another mutually agreed-upon organization to supply within 10 days a list of potential
arbitrators with qualifications as specified by the parties in the joint request. Within five days of receipt of the list, the parties shall independently rank the proposed candidates, shall
simultaneously exchange rankings, and shall select as the arbitrator the individual receiving the highest combined ranking who is available to serve. 

        Section 10.3.
Cost of Arbitration. The costs of arbitration shall be apportioned between the Employer and the Employee as
determined by the arbitrator in such manner as the arbitrator deems reasonable taking into account the circumstances of the case, the conduct of the parties during the proceeding and the result of the
arbitration. 

ARTICLE XI

MISCELLANEOUS  

        Section 11.1. Necessary Acts. All parties to this Agreement shall perform any and all acts as well as
execute any and all documents that may be reasonably necessary to fully carry out the provisions and intent of this Agreement. 

        Section 11.2.  Notices. All notices, demands, requests or other communications required or permitted by this Agreement or by law to
be served on, given to or delivered to any party hereto by any other party
to this Agreement shall be in writing and shall be deemed duly served, given, received and delivered (a) on the date of service if served personally on the party to whom notice is given, 

5

 

(b) on the day of transmission if sent via facsimile transmission to the facsimile number given below, provided telephone confirmation of receipt is obtained promptly after completion of
transmission, (c) on the business day after delivery to an overnight courier service or the Express Mail service maintained by the United States Postal Service, provided receipt of delivery has
been confirmed, or (d) five days after being sent by registered or certified mail, provided receipt of delivery is confirmed, first-class postage prepaid, properly address to the
respective parties as follows: 

	 	 	If to the Employer:	 	One Norwest Center

20th Floor

1700 Lincoln

Denver, CO 80203
	

 	
 	

If to the Employee:	
 	

1806 Rockridge Terrace

Fort Worth, Texas 76110

or
to such other address as may be designated by any such addressees by a notice given in conformity herewith. 

        Section 11.3.
Binding on Successors. This Agreement shall inure to the benefit of and be binding on the parties hereto and on each
of their respective heirs, executors, administrators, personal representatives, successors and assignees. 

        Section 11.4.
Choice of Law and Forum. This Agreement shall be construed and governed by the laws, commercial usages and customs of
the State of Colorado, without giving effect to the principles of conflict of laws thereof. In the event that any dispute, action, proceeding or litigation arises between the parties based on or
arising out of this Agreement, or any agreement or instrument delivered pursuant to this Agreement, subject to the arbitration provisions of Article X the parties agree to submit themselves to
and irrevocably consent to the jurisdiction of the courts of the State of Colorado, and any federal court located in the State of Colorado. 

        Section 11.5.
Headings. The headings of the articles and sections of this Agreement have been inserted solely for
convenience of reference and shall in no way restrict or modify any of the terms or provisions hereof. 

        Section 11.6.  Sole and Only Agreement. This Agreement and the agreements referred to herein constitute the only agreements of the
parties hereto relating to the subject matter hereof. Any prior agreements, promises, negotiations or representations concerning the subject matter of this Agreement not expressly set forth in this
Agreement shall have no force or effect. 

        Section 11.7.
Amendment and Extension. This Agreement may not be amended or extended except by an instrument in writing signed on
behalf of each of the parties hereto. 

        Section 11.8.  Severability. Should any provision or portion of this Agreement be held unenforceable or invalid for any reason, the
remaining provisions and portions of this Agreement shall be unaffected by such holding, unless to do so would alter substantially the intended effect of this Agreement or cause a substantial hardship
for any party hereto. 

        Section 11.9.
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same agreement. 

6

 

        The
parties have duly executed this Agreement as of the date first written above. 

	

 	
 	

EMPLOYER:
	

 	
 	

KEY PRODUCTION COMPANY, INC.
	

 	
 	

By:	
 	

/s/  F. H. MERELLI      
 F. H. Merelli

President and Chief Executive Officer
	

 	
 	

EMPLOYEE:
	

 	
 	

/s/  THOMAS E. JORDEN      
 THOMAS E. JORDEN

7

QuickLinks

Exhibit 10.7

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