Exhibit 10.1

April 8, 2019

BY EMAIL AND FEDEX

J. Ross Craft

[***]

 

 

Dear Ross:

This letter agreement (the “Agreement”) confirms our agreement relating to your
separation from employment with Approach Resources Inc. (the “Company”).

1.Separation Date:  Your employment with the Company shall end by your voluntary
resignation effective as of the close of business on the date this Agreement is
signed by you as set forth beneath your signature below (the “Separation
Date”).  Such resignation shall constitute a “Termination Without Good Reason”
of the Amended and Restated Employment Agreement between you and the Company
dated January 1, 2011 (the “Employment Agreement”) under Section 7(c) of the
Employment Agreement.  The Company has agreed to waive the 120-day notice period
for a Termination Without Good Reason under Section 6(f) of the Employment
Agreement.  Any position you hold as an officer, manager, director, member of
the Board of Directors, agent or in any other capacity of the Company or any of
its affiliates (the “Affiliates”), or as a trustee or fiduciary of any employee
benefit plans covering employees or other service providers of the Company or
any of its Affiliates, shall also end by your voluntary resignation effective as
of the Separation Date.  Simultaneously with your signing of this Agreement you
will sign a letter effectuating such voluntary resignations in the form attached
hereto as Exhibit A.  You further agree to sign such other documents as the
Company may reasonably request to effect such voluntary resignations.  You
represent, acknowledge and agree that your voluntary resignation from the Board
of Directors of the Company is not because of a disagreement with the Company on
any matter relating to the Company’s operations, policies or practices for
purposes of Item 5.02 of the Company’s Form 8-K to be filed with the Securities
and Exchange Commission.  As used in this Agreement, “Affiliates” of the Company
shall include, without limitation, Approach Oil & Gas Inc., Approach Operating,
LLC, Approach Delaware, LLC, Approach Resources I, LP, Approach Services, LLC
and Approach Midstream Holdings, LLC, and each of their respective predecessors,
successors, parents, subsidiaries, divisions and other affiliated companies.  On
and after the Separation Date, you shall no longer enter or have access to the
Company’s offices or facilities, except to the extent requested by the Board or
the Company in order to perform your obligation to cooperate under Section 11 of
this Agreement, or to perform the consulting services pursuant to the Consulting
Agreement described in Section 4 of this Agreement.

2.Accrued Obligations; Bonuses; Severance Payments and Benefits:  

a.As a result of your Termination of the Employment Agreement under Section 7(c)
of the Employment Agreement Without Good Reason, the Company shall pay you all
payments and benefits defined as “Accrued Obligations” under the Section 7 of
the

 

 

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Employment Agreement, including all base salary earned prior to the Separation
Date, all benefits to which you have a vested entitlement as of the Separation
Date, a payment for earned but unused vacation, and a payment for all approved
but unreimbursed business expenses (following submission of an expense report in
accordance with Company policy).  The Company shall pay you for all Accrued
Obligations after the Separation Date on the regularly scheduled payroll cycle
in accordance with its customary payroll practices, and the Accrued Obligations
shall be less all payroll deductions required by law.  You represent,
acknowledge and agree that (i) as of December 31, 2018, you have twenty (20)
days of earned but unused vacation and as of the Separation Date you have no
unreimbursed business expenses and (ii) all equity-based awards and cash-settled
awards to which you have a vested entitlement have been settled in full and no
further payment is due on any such awards.  You further acknowledge and agree
that your accrual for vacation for 2019 shall be prorated for the period from
January 1, 2019, through the Separation Date.  The Company acknowledges and
agrees that following the Separation Date, you will continue to be covered (for
the period you were employed by the Company as an officer and/or a member of the
Board of Directors of the Company) by the Company’s Directors and Officers
liability insurance (or any (i) renewal, extension or extended reporting period
thereof or (ii) replacement coverage applicable to the period you were employed
by the Company as an officer and/or a member of the Board of Directors of the
Company as provided to the Company’s officers and directors upon any change of
control of the Company or business combination transaction involving the
Company), subject in each case to the terms thereof as applicable to the
coverage provided thereunder to officers and directors.

b.You acknowledge and agree that the Company’s payments to you for the Accrued
Obligations as provided in Section 2(a) of this Agreement immediately above are
in complete satisfaction of any and all compensation or benefits due to you from
the Company, whether for services provided to the Company or otherwise, and no
further compensation or benefits are owed to you in connection with your
employment by the Company or any of its Affiliates or any position as an
officer, director or member of the Board of Directors of the Company or any of
its Affiliates or as a trustee or fiduciary of any employee benefit plans
covering employees or other service providers of the Company or any of its
Affiliates or the termination of your employment with the Company or resignation
or termination of any such positions, whether pursuant to the Employment
Agreement or otherwise.  You further acknowledge and agree that the Company
shall have no obligation to pay any bonuses or severance benefits to you under
the Employment Agreement or under any policy, practice or arrangement of the
Company.  Accordingly, as of the Separation Date, you hereby (i) forfeit and
waive any and all rights to outstanding, unvested equity incentive awards,
future incentive awards, and any incentive cash payments pursuant to the
Employment Agreement and any award agreement between you and the Company, and
all outstanding award agreements with respect to such equity incentive awards
shall be deemed terminated hereby and such equity and cash-based incentive
awards are hereby forfeited and (ii) acknowledge and agree that you are and
shall not be entitled to, and forfeit and waive, any and all rights to any
Change in Control benefits or payments pursuant to Sections 8(b) or 8(c) of the
Employment Agreement.

3.Termination of Benefit Plan Participation:  Your participation, and if
applicable, your dependent(s)’ coverage, under all employee benefit plans
sponsored by the Company shall end as of the Separation Date, provided, however,
that you shall receive separate notification from the Company regarding (a) your
and your dependent(s)’ right to continue

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participation in any group health care benefit plan sponsored by the Company at
your and/or your dependent(s)’ own expense under COBRA, and (b) your right to
keep your vested benefits in the Company’s 401(k) plan, or to roll over your
vested benefits in such plan.

4.Consulting Agreement:  Simultaneously with your signing this Agreement, you
and the Company shall enter into the Consulting Agreement attached hereto as
Exhibit B (the “Consulting Agreement”) which shall be effective as of the
Effective Date (as defined in Section 21 of this Agreement).  For avoidance of
doubt, if you sign this Agreement, but subsequently revoke this Agreement prior
to the expiration of the Revocation Period (as provided in Section 21 of this
Agreement), the Consulting Agreement shall be null and void ab initio and the
parties shall have no rights or obligations under such Consulting Agreement.

5.Release of Claims; Waiver of Future Employment:

a.In consideration of the terms of this Agreement, you agree to and do release
(on behalf of yourself, your heirs and personal representatives) and forever
discharge the Company, its Affiliates and (in their capacities as such) the
current and former officers, directors and stockholders of the Company and its
Affiliates, and each of their respective successors, assigns, agents and
representatives (collectively, the “Released Parties”) from any and all claims,
rights, demands, debts, obligations, losses, liens, agreements, contracts,
covenants, actions, causes of action, suits, services, judgments, orders,
counterclaims, controversies, setoffs, affirmative defenses, third party
actions, damages, penalties, costs, expenses, attorneys’ fees, liabilities and
indemnities of any kind or nature whatsoever, direct or indirect (collectively,
the “Claims”), whether asserted, unasserted, absolute, fixed or contingent,
known or unknown, suspected or unsuspected, accrued or unaccrued or otherwise,
that you may have, related to your period of employment by the Company or
otherwise, through the date on which this Agreement is executed, including any
and all claims under your Employment Agreement or arising out of or relating to
your employment by the Company or your resignation from or termination of such
employment, including, but not limited to, wrongful discharge, breach of
contract, tort, fraud, defamation and claims under the Civil Rights Acts, the
Age Discrimination in Employment Act (“ADEA”), the Americans With Disabilities
Act, the Employee Retirement Income Security Act, the Family and Medical Leave
Act, the Texas Commission on Human Rights Act, Chapter 451 of the Texas Labor
Code, the Texas Payday Law, and any other federal, state, or local or foreign
laws, rules, or regulations relating to employment, discrimination in
employment, termination of employment, wages, benefits, human rights, or
otherwise (“Released Claims”).  You represent that you have not assigned any
Released Claims to any third party.

b.The release of the Released Claims set forth in Section 5(a) above does not
include your right to enforce the terms of this Agreement, your right to receive
an award from a Government Agency under its whistleblower program for reporting
in good faith a possible violation of law to such Government Agency, your right
to coverage under the Company’s liability insurance policies, any recovery to
which you may be entitled pursuant to applicable workers’ compensation and
unemployment insurance laws, your right to challenge the validity of your waiver
and release of ADEA claims, or any right where a waiver is expressly prohibited
by law.  For purposes of this agreement, “Government Agency” means the Equal
Employment Opportunity Commission, the National Labor Relations Board, the
Occupational

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Safety and Health Administration, the U.S. Securities and Exchange Commission,
the Financial Industry Regulatory Authority, or any other self-regulatory
organization or any other federal, state, or local governmental agency or
commission.

c.In consideration of the terms of this Agreement, you have agreed to and do
waive any claims you may have for employment by, or membership on the board of
directors of, the Company and/or its Affiliates.  You have further agreed in the
future not to seek such employment or reemployment with, or appointment to the
board of directors of, the Company and/or its Affiliates.  

6.Protected Activities:  You acknowledge that neither this Agreement nor any
other agreement or policy of the Company or its Affiliates shall be construed or
applied in a manner which limits or interferes with your right, without notice
to or authorization of the Company and/or its Affiliates, to communicate and
cooperate in good faith with a Government Agency for the purpose of (i)
reporting a possible violation of any U.S. federal, state, or local law or
regulation, (ii) participating in any investigation or proceeding that may be
conducted or managed by any Government Agency, including by providing documents
or other information, or (iii) filing a charge or complaint with a Government
Agency.  Additionally, you shall not be held criminally or civilly liable under
any federal or state trade secret law for the disclosure of a trade secret that
is made (a) in confidence to a federal, state, or local government official, or
to an attorney, solely for the purpose of reporting or investigating a suspected
violation of law, (b) in a complaint or other document filed in a lawsuit or
other proceeding, if such filing is made under seal; or (c) in court proceedings
if you file a lawsuit for retaliation by an employer for reporting a suspected
violation of law, or to your attorney in such lawsuit, provided that you must
file any document containing the trade secret under seal, and you may not
disclose the trade secret, except pursuant to court order.  The activities or
disclosures described in this Section 6 shall be referred to in this Agreement
as “Protected Activities.”  Notwithstanding the foregoing, under no circumstance
will you be authorized to make any disclosures as to which the Company and/or
its Affiliates may assert protections from disclosure under the attorney-client
privilege or the attorney work product doctrine, without prior written consent
of an authorized officer designated by the Company.

7.Covenant Not To Sue:  In consideration of the terms of this Agreement, you
represent that you have not filed or permitted to be filed against the Released
Parties any charges, complaints or lawsuits and you covenant and agree that you
will not file or permit to be filed any lawsuits at any time after you sign this
Agreement with respect to the subject matter of this Agreement and the Released
Claims released pursuant to Section 5 of this Agreement, including without
limitation any claims relating to the termination of your employment, provided,
however, that this covenant not to sue shall not be construed or applied in a
manner which limits or interferes with your right to engage in any Protected
Activities.  While the release of claims set forth in Section 5 of this
Agreement does not prevent you from in the future filing a charge or complaint
with any Government Agency or from engaging in any other Protected Activities,
you acknowledge and agree that if you file a charge or complaint with a
Government Agency, or a Government Agency asserts a claim on your behalf, your
release of claims and waiver of your right to seek reemployment or appointment
to the board of directors set forth in Section 5 of this Agreement shall bar you
from receiving monetary relief or reinstatement, except you do not waive: (a)
your right to receive an award from a Government

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Agency under its whistleblower program for reporting in good faith a possible
violation of law to such Government Agency, (b) any recovery to which you may be
entitled pursuant to Texas’ workers’ compensation and unemployment insurance
laws, and (c) any other right where a waiver is expressly prohibited by law.

8.Return of Property:  You agree to return to the Company upon your signing this
Agreement all property and documents of the Company and/or its Affiliates in
your possession, custody or control, including, without limitation, any
company-owned or issued cell phone, computer, tablet, printer, keyboard, mouse,
monitor, laminator, customer gifts, marketing materials, stationery,
instructional and policy manuals, mailing lists, computer software, financial
and accounting records, reports and files, portable media and devices (such as
flash drives, external hard drives, CD’s, and DVD’s), and you further agree not
to retain copies of any such documents of the Company and/or its Affiliates in
any form, excluding publicly available documents and documents relating directly
to your own compensation and employee benefits. Notwithstanding the foregoing,
you may retain your cell phone for number [***], subject to the Company’s right
to retrieve and/or remove all Company data stored on or embedded in such phone,
and you shall deliver such phone to the Company upon execution of this Agreement
to allow the Company or a third party vendor engaged by the Company to retrieve
and/or remove all Company data stored on or embedded in such phone in accordance
with the protocol set forth on Exhibit C attached to this Agreement; upon
completion of certain steps of such protocol the Company shall return such phone
to you as provided on Exhibit C, and you may be present for such protocol
process until the phone is returned to you. To the extent you have possession or
control of any electronic documents which contain any information relating to
the business of the Company, you agree to identify such documents to the
Company, to deliver an identical copy of any or all such documents to the
Company, and to follow instructions regarding the permanent deletion of any or
all such documents, or the preservation of any or all such documents for any
potential use by the Company in the future.  You represent to the Company that
you have not removed from the Company’s offices or facilities any property or
documents of the Company and/or its Affiliates that have not been returned to
the Company or its offices or facilities. You also agree that upon execution of
this Agreement you will return to the Company all keys, key cards, access cards
relating to the Company’s offices or facilities, corporate identification cards
or badges and corporate credit cards, and that you shall not have access to the
Company’s offices, facilities or electronic networks other than as expressly
provided in the Consulting Agreement. You acknowledge and agree that all “Work
Product” (as defined below) resulting from the performance of your services as
an employee of the Company are the sole property of the Company and you hereby
assign any and all rights in or to such Work Product to the Company.  “Work
Product” shall mean all developments of any kind that relate to the Company’s
business or assets or confidential information and that you conceived, made,
developed or acquired at any time during your employment by the Company and
within the scope of your employment by the Company, including without
limitation, any programs, trade secrets, discoveries, inventions, improvements,
ideas, diagrams, processes or designs, classes, curriculum, custom courses and
related training materials, whether or not reduced to writing, patented,
copyrighted or trademarked.

9.Restrictive Covenants:  This Agreement does not amend, modify, waive, or
affect in any way (i) the Company’s and/or its Affiliates’ rights or your
duties, obligations, or restrictions under Section 14 and Section 15 of the
Employment Agreement, and you

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acknowledge and agree that such restrictions shall survive and continue in full
force and effect after the Separation Date.  You acknowledge and agree that you
shall not be entitled to, and will not be paid, the “Discretionary Monthly
Non-Compete Payments” described in Section 15(d) of the Employment Agreement,
and, without affecting the enforceability of such restrictive covenants as in
effect and construed under the Employment Agreement, the payment under Section
3(a) of the Consulting Agreement, and the goodwill and Confidential Information
of which you are aware from your employment with the Company (as defined in the
Employment Agreement), constitutes adequate consideration for these restrictive
covenants.  You acknowledge and agree that the Post-Termination Non-Compete Term
shall be for a period of six (6) months following the Separation Date, provided
that your obligations under Section 15(c) of the Employment Agreement
(Non-Solicitation Obligations) shall be for a period of twelve (12) months
following the Separation Date.  You further agree to maintain the terms of this
Agreement confidential unless otherwise required by law; provided, however, that
you may disclose the terms of this Agreement to your immediate family members
living in the same house and to your attorneys, accountants, financial or tax
advisors.  You may disclose this Agreement or Confidential Information (as
defined in the Employment Agreement) to Government Agencies only to the extent
such disclosure constitutes a Protected Activity as defined in Section 6 of this
Agreement.  

10.Non-Disparagement:  You agree that you will not, at any time, disparage,
portray in a negative light or take any similar action which would be harmful to
or lead to unfavorable publicity for the Company, any of its Affiliates or any
of their respective current or former officers, directors, stockholders,
employees, agents, consultants, contractors, owners, subsidiaries, divisions,
parents or any of their respective affiliates, and their respective assets,
operations, personnel or services, whether public or private.  Your
non-disparagement obligation shall not be construed or applied to limit or
interfere with your right to engage in any Protected Activities as defined in
Section 6 of this Agreement.  If you reasonably believe that the Company or any
of its Affiliates or any of their respective current or former officers,
directors, stockholders, employees, agents, consultants, contractors or owners
has disparaged you or portrayed you in a negative light (the “Negative Remark”),
you shall have the right to respond reasonably to such Negative Remark,
provided, however, that prior to making such response, within ten (10) days of
you becoming aware of the occurrence of the Negative Remark you shall (a) notify
the Company of the specific words you believe to have been a Negative Remark,
(b) give the Company an opportunity within ten (10) days of such notice to (i)
issue a corrective statement, or (ii) agree with you to issue a joint statement
which addresses the Negative Remark to the parties’ mutual satisfaction.

11.Cooperation:  Subject to reasonable notice and other demands on your time,
you agree to fully cooperate with the Company, and its counsel, in connection
with any investigation, complaint, charge, administrative proceeding or
litigation, relating to any matter that commenced or occurred during your
employment, or otherwise arising out of or pertaining to your employment, in
which you have knowledge or have been identified as an individual with
knowledge, including any investigation, complaint, charge, administrative
proceeding or litigation, that is in any way related to your employment or
employment relationship with the Company.  Such cooperation includes, but will
not be limited to, (i) meeting with Company representatives and/or the Company’s
counsel to disclose and discuss any facts that you may know, to respond
truthfully to any inquiries that may arise with respect to matters in which you

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were involved or had knowledge of during your employment, and to furnish your
honest and good faith advice, information, judgment and knowledge with respect
to matters you were responsible for or involved in during your employment; (ii)
preparing with Company counsel for any deposition, trial, hearing, or other
proceeding; (iii) attending any deposition, trial, hearing or other proceeding
to provide truthful testimony; and (iv) executing documents as the Company and
its counsel may deem, in the judgment of its counsel, necessary.  To the extent
allowed by law, you also acknowledge and agree that you will advise the Company
promptly of your receipt of any inquiries, subpoenas, or requests regarding the
Company or any of its Affiliates.  The Company shall reimburse you for
reasonable expenses, such as travel, lodging and meal expenses, you incur
pursuant to this Section 11 at the Company’s request, and consistent with the
Company’s policies for reimbursement of expenses.  Your obligations to provide
assistance and advice to the Company as required in this Section 11 of the
Agreement shall not be construed or applied in a manner that limits or
interferes with your rights to engage in Protected Activities as described in
Section 6 of this Agreement.

12.Third Party Beneficiaries: You agree that the Affiliates of the Company shall
be third party beneficiaries of your obligations under this Agreement that are
applicable to such Affiliates.

13.Remedies:  You understand and agree that if you breach any representation
made by you in Section 1 or Section 14 this Agreement or breach any obligations
under Section 9, Section 10 or Section 11 of this Agreement, any obligations
under Section 1 of the Consulting Agreement, or any of your continuing
obligations under Section 14 or Section 15 of the Employment Agreement, in
addition to any other remedies at law or in equity available to the Company,
including under Section 17(c) of the Employment Agreement, you shall repay to
the Company all payments previously made to you under the Consulting
Agreement.  You acknowledge and agree that your repayment of payments previously
made to you under the Consulting Agreement shall be liquidated damages
(“Liquidated Damages”) payable to the Company with respect to such breach of
this Agreement, the Consulting Agreement or of any of your obligations under
Sections 14 or Section 15 of the Employment Agreement.  The parties acknowledge
and agree that the harm caused by any such breach would be impossible or very
difficult to accurately estimate at the time of the breach and that the
Liquidated Damages are a reasonable estimate of the anticipated or actual harm
that might arise from any such breach.  You agree that the Liquidated Damages
are not a penalty, but are instead a reasonable prediction of the minimum amount
of actual damages the Company would sustain as a result of any such breach of
this Agreement, the Consulting Agreement or any of your obligations under
Section 14 or Section 15 of the Employment Agreement.  You also agree to
indemnify the Company for all losses to the Company caused by any breach of
Section 7 of this Agreement, including, without limitation, reimbursement by you
for all its reasonable attorneys’ fees and costs incurred by it arising out of
any such breach.  The remedies set forth in this Section 13 shall not apply to
any challenge to the validity of the waiver and release of your rights under the
ADEA.  If you challenge the validity of the waiver and release of your rights
under the ADEA, then the Company’s right to attorneys’ fees and costs shall be
governed by the provisions of the ADEA, so that the Company may recover such
fees and costs if the lawsuit is brought by you in bad faith.  Any such action
permitted to the Company by this Section 13, however, shall not be construed or
applied in a manner which limits or interferes with your right to engage in
Protected Activities, or with any of your obligations under this Agreement,
including without limitation,

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the release of claims in Section 5 of this Agreement.  You further agree that
nothing in this Agreement shall preclude the Company from recovering attorneys’
fees, costs or any other remedies specifically authorized under applicable law.

14.Your Representations Regarding the Compliance With Law:  By this Agreement,
and based upon the actions and findings of the Company’s Audit Committee, you
represent and acknowledge that (i) you have disclosed to the Company in writing
any industrial illnesses or injuries you have suffered arising out of your
employment with Company and (ii) you are not aware of any conduct involving the
Company and its Affiliates (including any conduct by you) that you have any
reason to believe may be unlawful, unethical or otherwise inappropriate,
including any past or present violation, potential or actual, of the company’s
code of conduct or of any law, illegal or improper conduct such as unlawful
discrimination or harassment or conduct in violation of the Securities Act of
1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the
Dodd-Frank Wall Street Reform and Consumer Protection Act, the Foreign Corrupt
Practices Act, the federal False Claims Act or any state false claims
act.  Based upon the actions and findings of the Company’s Audit Committee, you
represent and acknowledge that you are not aware of any matters for which you
were responsible or that came to your attention as an employee of the Company,
or any situations of which you otherwise have knowledge, that might give rise
to, evidence or support any claim of illegal or improper conduct, regulatory
violation, unlawful discrimination or harassment, retaliation, or other cause of
action against the Company or its Affiliates, including any matter relating to
possible qui tam actions or any matter in violation of the federal False Claims
Act or any state false claims act.  Based upon the actions and findings of the
Company’s Audit Committee, you further represent and certify that to the best of
your knowledge, information and belief, no member of management or any other
employee (including you) has committed or caused any violation of those
statutes, including by committing any fraud or engaging in any act, practice or
course of conduct that operates or would operate as a fraud or deceit upon any
person or entity.  You understand and agree that these representations are a
material inducement for the Company to enter into this Agreement.  For the
avoidance of doubt, your disclosures as required by this Section 14 shall not
limit your ability to engage in Protected Activities as outlined in Section 6 of
this Agreement.

15.No Admission of Wrongdoing:  Neither by offering to make nor by making this
Agreement does either party admit any failure of performance, wrongdoing, or
violation of law.  

16.Entire Agreement; Amendments; Successors and Assigns:  This Agreement sets
forth the entire understanding of the parties and supersedes any and all prior
agreements, oral or written, relating to your employment by the Company or the
termination of your employment, including, without limitation the Employment
Agreement and all equity awards or arrangements you have with the
Company.  Accordingly, as a result of your Termination Without Good Reason, the
Employment Agreement is hereby terminated, provided, however, that the
Consulting Agreement (from and after the Effective Date, subject to Section 4)
and Sections 14, 15 and 17 of the Employment Agreement (subject to the time
limitations in Section 9) shall continue in full force and effect after the
Separation Date; provided, for clarity, Sections 12 and 13 of the Employment
Agreement shall not apply with respect to any periods after the Separation Date
(provided you do not revoke this Agreement prior to the Effective

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Date).  This Agreement may not be modified except by a writing, signed by you
and by a duly authorized officer of the Company.  This Agreement shall be
binding upon your heirs and personal representatives, and the successors and
assigns of the Company.  You acknowledge that in entering into this Agreement,
you are not relying upon any representation that is not specified in this
Agreement or the Consulting Agreement, including without limitation any
representations concerning future employment or additional payments.

17.Governing Law:  Jurisdiction and Venue:  This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas without regard
to its choice of law rules.  Any action or proceeding by either you or the
Company to enforce this Agreement shall be brought in any state or federal court
in Tarrant County, Texas.  You and the Company hereby irrevocably submit to the
exclusive jurisdiction of these courts and waive the defense of inconvenient
forum to the maintenance of any action or proceeding in such venue.

18.Waiver of Jury Trial:  NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT,
YOU AND THE COMPANY SHALL, AND HEREBY DO, IRREVOCABLY WAIVE THE RIGHT TO TRIAL
BY JURY WITH RESPECT TO ANY DISPUTE. IN ADDITION, EMPLOYEE SHALL, AND HEREBY
DOES, IRREVOCABLY WAIVE THE RIGHT TO PARTICIPATE IN ANY CLASS OR COLLECTIVE
ACTION WITH RESPECT TO ANY DISPUTE.

19.Voluntary Agreement:  You acknowledge that before entering into this
Agreement, you have had the opportunity to consult with any attorney or other
advisor of your choice, and you are hereby advised to do so if you choose.  You
further acknowledge that you have entered into this Agreement of your own free
will, and that no promises or representations have been made to you by any
person to induce you to enter into this Agreement other than the express terms
set forth herein.  You further acknowledge that you have read this Agreement and
understand all of its terms, including the waiver and release of claims set
forth in Section 5 above.

20.Counterparts: This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
Agreement.  Counterparts may be delivered via facsimile, electronic mail
(including PDF or any electronic signature complying with the U.S. federal ESIGN
Act of 2000, e.g., www.docusign.com) or other transmission method, and any
counterpart so delivered shall be deemed to have been duly and validly delivered
and be valid and effective for all purposes.

21.Execution; Effective Date:  If the foregoing is acceptable to you, please
print and sign a copy of this Agreement and return a PDF of the Agreement to me
by email or an original hard copy of the Agreement by regular mail or
FedEx.  You may take up to forty-five (45) days from today to consider, sign,
and return this Agreement.  You acknowledge that at the commencement of the
forty-five (45) day consideration period, you were provided with the following
information set forth on Exhibit D hereto: (i) the class, unit, or group of
individuals covered by the Employment Termination Program (the “Program”) as
defined in Exhibit D; (ii) any eligibility factors for the Program; (iii) the
time limits applicable to the Program, if any; and (iv) the job titles and ages
of all individuals eligible or selected for the Program and the job

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titles and ages of all individuals in the same decisional unit who are not
eligible or selected for the Program.  In addition, you may revoke the Agreement
after signing it, but only by delivering a signed revocation notice to Approach
Resources Inc., 6500 West Freeway, Suite 800, Fort Worth, Texas 76116,
attention: General Counsel, jdazey@approachresources.com, facsimile (817)
989-9001 within seven (7) days of your signing this Agreement (the “Revocation
Period”).  This Agreement shall be effective on the eighth day after you sign
and return it to Approach Resources Inc., 6500 West Freeway, Suite 800, Fort
Worth, Texas 76116, attention: General Counsel, jdazey@approachresources.com,
facsimile (817) 989-9001, provided that you have not revoked the Agreement
(“Effective Date”).  

Very truly yours,

Approach Resources Inc.

 

By: /s/ Josh Dazey

Name: Josh Dazey

Title: VP & General Counsel

 

ACCEPTED AND AGREED:

 

 

/s/ J. Ross Craft

J. Ross Craft

 

April 8, 2019

Date signed

 

 

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Exhibit A

 

April __, 2019

Approach Resources

6500 West Freeway, Suite 800

Fort Worth, Texas 76116

 

To Board of Directors of Approach Resources Inc.,

 

I, J. Ross Craft, do hereby resign from any and all positions that I hold as an
officer, manager, director, member of the Board of Directors, agent or in any
other capacity of Approach Resources Inc. (the “Company”) and each of its
Affiliates, or as a trustee or fiduciary of any employee benefit plans covering
employees or other service providers of the Company or any of its Affiliates,
effective as of the date of this Letter.  “Affiliates” of the Company shall mean
Approach Oil & Gas Inc., Approach Operating, LLC, Approach Delaware, LLC,
Approach Resources I, LP, Approach Services, LLC and Approach Midstream
Holdings, LLC.  I acknowledge and agree that my resignation from the Board of
Directors of the Company is not because of a disagreement with the Company on
any matter relating to the Company’s operations, policies or practices for
purposes of Item 5.02 of the Company’s Form 8-K to be filed with the Securities
and Exchange Commission.

Very truly yours,

 

J. Ross Craft

 

 

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Exhibit B

 

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (this “Agreement”) is executed as of April __, 2019,
to be effective as of the Effective Date (defined below) by and between Approach
Resources Inc., a Delaware corporation (the “Company”), and J. Ross Craft
(“Consultant”; Company and Consultant shall sometimes be referred to herein as
“Party” and collectively as “Parties”).

WHEREAS, the Company and Consultant have entered into a letter agreement (the
“Separation Agreement”) dated April __, 2019, and executed by Consultant on
April __, 2019 (the “Execution Date”); and

WHEREAS, this Agreement will become effective on the eighth (8th) day after
Execution Date, provided that Consultant does not revoke the Separation
Agreement in accordance with Section 21 of the Separation Agreement during the
seven-day period after the Execution Date (the “Effective Date”); and

WHEREAS, the Company desires to engage Consultant as of the Effective Date to
provide certain services as described herein for the Company and its affiliates,
and Consultant desires to provide such services;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
promises in this Agreement, the Parties agree as follows:

1.Services.

(a)The Company hereby engages Consultant as of the Effective Date, and
Consultant hereby agrees to serve, as an independent contractor, and not as an
employee, to provide services to the Company similar to those as provided while
formerly employed as Chief Executive Officer of the Company and to facilitate
the transition of Consultant’s former duties as Chief Executive Officer to such
employee(s) of the Company who assume such duties, in each case as requested by
the Chief Executive Officer of the Company and/or Board of Directors of the
Company (“Board”) from time to time (the “Services”), and Consultant hereby
accepts such engagement.  The Consultant shall perform the Services within an
area no greater than the distance from his principal home address (as in effect
from time to time during the Service Period) to the Company’s headquarters
located at 6500 West Freeway, Suite 800, Fort Worth, Texas (the “Geographic
Area”) and will not be required to travel outside of the Geographic Area except
as required to comply with Consultant’s duties to cooperate with the Company as
referred to in Section 11 of the Separation Agreement.  Consultant shall perform
Consultant’s duties, responsibilities and functions to the best of Consultant’s
abilities in a faithful, diligent, trustworthy, businesslike and efficient
manner.  During the Service Period (defined below), unless otherwise instructed
by the Board, Consultant shall not hold himself out to third parties as having
authority to speak on behalf of the Company or the Board.

 

 

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(b)The Company shall provide Consultant with access to the Company’s offices and
facilities as reasonably necessary to perform Services as requested by the Chief
Executive Officer of the Company or the Board. Except as provided in the
preceding sentence, Consultant shall not have access to the Company’s offices or
facilities during the Service Period.  

(c)All “Work Product” (as defined below) resulting from the performance of
Consultant’s Services for the Company will be the sole property of the Company
and Consultant hereby assigns any and all rights in or to such Work Product to
the Company.  “Work Product” shall include all developments of any kind that
relate to the Company’s business or confidential information and that Consultant
conceives, makes, develops or acquires at any time during Consultant’s
engagement by the Company and within the scope of his engagement by the Company,
including without limitation, any programs, trade secrets, discoveries,
inventions, improvements, ideas, diagrams, processes or designs, classes,
curriculum, custom courses and related training materials, whether or not
reduced to writing, patented, copyrighted or trademarked.  Consultant will
disclose the Work Product to the Company; assign the Work Product to the Company
where necessary; and cooperate with the Company as necessary for the Company to
obtain patents, copyrights or other forms of protection for the Work
Product.  Consultant acknowledges that no additional compensation will be due
him with regard to any Work Product.

2.Independent Contractor Status; Authority.  Consultant and the Company agree
that this Agreement does not create an employee/employer relationship.  It is
expressly acknowledged that the intention of both Consultant and the Company is
that Consultant will serve as an independent contractor, and not as the
Company’s employee.  As such, pursuant to this Agreement, the Company will not
provide coverage under, or allow Consultant to participate in, any retirement,
profit sharing, medical and dental insurance, short-term disability, long-term
disability, bonus, or any other employee benefit plan, or fringe benefit
program, other than as provided pursuant to the terms of the Separation
Agreement.  Consultant shall not have authority to commit or otherwise bind the
Company or any of its subsidiaries and shall not undertake to do so or represent
to the contrary to any person.  

3.Service Fees; Expense Reimbursement.  

(a)In consideration for the performance of the Services, Consultant will receive
a one-time retainer of $1,800,000.00 (the “Retainer Payment”) within fifteen
(15) business days after the Effective Date.  The Company shall have the right
to withhold all taxes and other amounts required to be withheld from the
Retainer Payment under this Section 3 under applicable law.  

(b)The Company shall reimburse Consultant, in accordance with the policies and
procedures of the Company and subject to provision by Consultant of
documentation satisfactory to the Company, for all documented, reasonable and
necessary business expenses which are incurred by Consultant with the prior
consent of the Company while performing Consultant’s duties under this
Agreement; provided that in no event shall the Company be required to reimburse
any expenses for which reimbursement is not requested in accordance with the
policies and procedures of the Company within thirty (30) days after Consultant
incurs the underlying expense.  

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4.Service Period; Termination.  

(a)The engagement shall last for a period commencing on Effective Date and
terminating on the earliest of either (i) six (6) months following the Effective
Date, (ii) Consultant’s death or disability, (iii) immediately upon written
notice of termination delivered by the Company to Consultant or (iv) by mutual
written agreement of the Parties (such period, the “Service Period”).
Notwithstanding the foregoing, if Consultant revokes the Separation Agreement
prior to the expiration of the Revocation Period (as defined in the Separation
Agreement), this Agreement shall be null and void ab initio and the Parties
shall have no rights or obligations under this Agreement.

(b)From and after the termination of the Service Period, neither Party shall
have any further obligation to the other Party pursuant to this Agreement except
that the Company shall reimburse Consultant any reimbursable expenses properly
incurred by Consultant prior to the date of such termination in accordance with
Section 3(b) and Consultant shall continue to be subject to the Separation
Agreement.  The foregoing is not intended to limit the Parties’ rights and
obligations under the Separation Agreement.  

5.Taxes.  Consultant acknowledges and agrees that Consultant shall be
exclusively liable and solely responsible for the payment of all income, sales
and use taxes that may be payable by Consultant as a result of any payments to
Consultant hereunder and the filing of required returns relating
thereto.  Consultant further acknowledges and agrees that, during and after the
Consultant’s termination of service with the Company, Consultant will indemnify,
defend and hold the Company harmless from all taxes, interest, penalties, fees,
damages, liabilities, obligations, losses and expenses arising from a failure or
alleged failure to make the required reports and payments for income taxes.

6.Governing Law: Jurisdiction and Venue.  This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas without regard
to its choice of law rules.  Any action or proceeding by either Consultant or
the Company to enforce this Agreement shall be brought in any state or federal
court in Tarrant County, Texas.  Consultant and the Company hereby irrevocably
submit to the exclusive jurisdiction of these courts and waive the defense of
inconvenient forum to the maintenance of any action or proceeding in such venue.

7.Waiver of Jury Trial.  NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT,
CONSULTANT AND THE COMPANY SHALL, AND HEREBY DO, IRREVOCABLY WAIVE THE RIGHT TO
TRIAL BY JURY WITH RESPECT TO ANY DISPUTE. IN ADDITION, CONSULTANT SHALL, AND
HEREBY DOES, IRREVOCABLY WAIVE THE RIGHT TO PARTICIPATE IN ANY CLASS OR
COLLECTIVE ACTION WITH RESPECT TO ANY DISPUTE.

8.Modification and Waiver.  This Agreement may not be modified or amended, nor
may any provisions of this Agreement be waived, except by an instrument in
writing signed by the Parties.  No written waiver will be deemed to be a
continuing waiver unless specifically stated therein, and each such waiver will
operate only as to the specific term or condition waived

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and shall not constitute a waiver of such term or condition for the future or as
to any act other than that specifically waived.  

9.Notices.  Any notice, request, instruction or other document to be given
hereunder by any Party hereto to the other Party hereto shall be in writing and
shall be given by delivery in person, by email, by overnight courier or by
registered or certified mail, postage prepaid to the address set forth below or
such other address as such Party may give to the other Party by notice pursuant
to this Section 9.  Notice shall be deemed given on (a) the date such notice is
personally delivered, (b) the date of scheduled delivery if sent by overnight
courier, or (c) the date such notice is transmitted by facsimile or email and
receipt electronically confirmed, if such transmission is prior to 5:00 p.m.
Central time on a business day, or the next succeeding business day if such
transmission is after 5:00 p.m. Central time.  If to the Company, to:  Approach
Resources Inc., 6500 West Freeway, Suite 800, Fort Worth, Texas 76116,
attention: General Counsel, jdazey@approachresources.com, facsimile (817)
989-9001.  If to Consultant to: J. Ross Craft, [***].

10.No Reliance.  In entering into this Agreement, Consultant is not relying upon
any representation that is not specified in this Agreement or the Separation
Agreement, including without limitation any representations concerning future
employment or additional payments.

11.Miscellaneous.  This Agreement sets forth the entire agreement of the Parties
relating to the subject matter of this Agreement and supersedes all prior and
contemporaneous agreements, negotiations, correspondence, undertakings and
communications of the Parties, oral or written, respecting such subject
matter.  Notwithstanding the foregoing, nothing contained herein shall affect
any post-termination obligations of either Party contained in the Separation
Agreement, including but not limited to the restrictive covenants described in
the Separation Agreement.  In the event of a conflict between the Separation
Agreement and this Agreement with respect to any post-termination obligation
under the Separation Agreement, the Separation Agreement shall govern and
control.  The headings and other captions in this Agreement are included solely
for convenience of reference and will not control the meaning and interpretation
of any provision of this Agreement.  This Agreement shall not be assignable by
the Consultant without the prior written consent of the Company.  For avoidance
of doubt, the Company may, without the prior approval of Consultant, assign any
or all of its rights and interests hereunder to any affiliate or to a successor
in interest.  This Agreement will be binding upon and inure to the benefit of
Consultant, the Company and their respective successors and permitted
assigns.  This Agreement may be executed in separate counterparts and may be
executed by facsimile or PDF copies, each of which is deemed to be an original
and all of which, taken together, constitute one and the same agreement.  

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and Consultant has signed this Agreement, as of the
date first above written.

APPROACH RESOURCES INC.

By:

Name:

Title:

CONSULTANT

 

 

 

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Exhibit C

 

Protocol For Imaging and Review of Craft Mobile Phone

 

(a)

Approach shall engage a computer forensics expert (the “Expert”)

 

(b)

The Expert will follow a three step imaging, recovery, and disclosure process as
follows.

Imaging Step:

 

(c)

J. Ross Craft (“Craft”) will make available to the Expert, at Approach’s
headquarters his personal cell phone with the phone number [***] (the
“Device”).  The Expert shall promptly create a digital or mirror image of the
Device.  

 

(d)

The Expert shall not remove the Device from Approach’s headquarters.  Only the
Expert and employees of the Expert are authorized to inspect, or otherwise
handle such Device.  After the inspection, copying, and imaging of the Device,
the Expert shall securely wipe and permanently delete all Approach data,
metadata and documents on the Device including the emails and associated
attachments from Craft’s Approach email account.  The Expert shall then return
the Device to Craft and may perform the remainder of its responsibilities at
Approach headquarters and/or the Expert’s place of business.  

 

(e)

No employee of Approach, or its counsel, will inspect or otherwise handle the
Device.  The Expert will maintain all information in the strictest confidence
and will maintain a copy of the mirror image and all recovered data and
documents for a period of six (6) years after the inspection, copying and
imaging of the Device.

 

(f)

Within ten (10) days of the inspection, copying, and imaging of the Device, the
Expert shall provide Approach and Craft with a report describing the Device and
the Expert’s actions with respect thereto.  This report shall include a detailed
description of the Device inspected, copied, or imaged by the Expert, including
the name of the manufacturer of the equipment and its model number and serial
number; and the name of any network card manufacturer and its model number,
serial number, and the media access control address wherever possible. 

Recovery Step:

 

(g)

After providing the report in paragraph (f), the Expert shall recover all
documents from the mirror image capable of being extracted, including, but not
limited to, all word processing documents, email messages, text messages,
PowerPoint or similar presentations, spreadsheets and other files, including
deleted files (the “Extracted Documents”).  Thereafter, the Expert may from time
to time, at the request of Approach, assist Approach in searching the Extracted
Documents for data that constitutes information relating to Approach’s business
and/or Craft’s employment at Approach (“Approach Information”).  The Expert may
use all

 

 

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reasonable methods necessary to identify Approach Information, including,
without limitation, using searches for key words, date ranges, or other search
criteria that are reasonably designed to identify Approach Information.  To the
extent the Expert discovers Approach Information that was not securely and
permanently deleted as per paragraph (d) above, Craft shall promptly deliver the
Device to the Expert and allow the Expert to arrange for such permanent
deletion.

Disclosure Step:

 

(h)

As the Expert from time to time locates Approach Information, it shall provide
all such Approach Information to Approach’s attorneys.  The Expert shall not
provide to Approach’s attorneys copies of any documents or information which is
not Approach Information.  The Expert shall not provide to Craft any documents
or information which constitutes Approach Information.

 

(i)

All employees and staff of the Expert involved with the inspection and copying
of the forensic image of the Device shall use such information only in
accordance with this search protocol and shall not use such information for any
other purpose, including, business, governmental, commercial, or administrative
or judicial proceedings.  The costs of the Expert’s time and services shall paid
by Approach.

 

 

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Exhibit D

OLDER WORKERS BENEFIT PROTECTION ACT DISCLOSURE

The Older Workers Benefit Protection Act (OWBPA) requires that employers provide
certain information to employees who are 40 years of age or older and asked to
execute an agreement which includes a release of claims in connection with a
“termination program.” The Company believes it negotiated your separation from
employment with you on an individual, arms-length basis, and not as part of any
“termination program.”  However, in recognition that other members of management
also are being offered separation agreements in connection with a pending
business reorganization, in an abundance of caution the Company will treat your
separation and those of such other members of management as part of a
“termination program” (the “Program”).  This Exhibit D provides you the
information required under the OWBPA as if the Program was a “termination
program.”  

The class, unit, or group of individuals covered by the Program includes members
of senior management of the Company who work at the Company’s headquarters, who
have written employment agreements providing for payment of severance benefits
under certain circumstances in exchange for executing a separation agreement
that includes a general release of all claims, and who are separating from the
Company in connection with a business reorganization of senior management being
undertaken at the behest of the Company’s Board of Directors.  

Employees selected for the Program have forty-five (45) days from the date of
their receipt of a proposed separation agreement to participate by signing and
returning the agreement.  Employees who choose to sign a separation agreement
shall have seven (7) days after signing and returning it to the Company to
revoke it by delivering a signed revocation notice to the Company as provided in
Section 21 of the Agreement.  

The following is a list of the ages and job titles of employees who were
selected for the Program as well as the ages of those employees with the same
job title who were not selected for the Program:

Job Title

Age

No. Selected

No. Not Selected

Chief Executive Officer

62

1

0

Chief Administrative Officer

56

1

0

Chief Operating Officer

55

1

0