Exhibit 10.1

 

Execution Version

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of October
26, 2018 by and between Harvest Oil & Gas Corp., a Delaware corporation
(hereafter the "Company") and Ryan Stash ("Employee"). The Company and Employee
are referred to herein individually as a "Party" and together as the "Parties."

 

RECITALS

 

WHEREAS, the Company desires, for its success, to have the benefit of services
of experienced management personnel like Employee and thus believes it is in the
best interest of the Company and its owners that Employee be reasonably secure
in his employment and position with the Company so that Employee can exercise
independent judgment regarding the best interests of the Company and its owners
without distraction by uncertainties or risks regarding Employee's employment
with the Company that would be created by the possibility of Employee's
termination by the Company without Cause (as defined below) (other than due to
death or disability (as such term is defined under Section 22(e)(3) of the Code)
during the term of this Agreement;

 

WHEREAS, the Company believes it is in its best interests to provide Employee
with certain severance benefits in the event Employee's employment with the
Company and any of its Affiliates (as defined below) is terminated without Cause
by the Company (other than due to death or disability), in order to induce
Employee to provide employment services as described in this Agreement, and
Employee desires to provide employment services as described herein;

 

WHEREAS, Employee agrees that the severance benefits referenced in this
Agreement constitute a meaningful incentive for Employee to be reasonably secure
regarding Employee's continued employment with the Company throughout the
Employment Period (as defined below); and

 

WHEREAS, the Company hereby agrees to employ Employee effective as of the
Effective Date (as defined below), and Employee hereby accepts such employment,
on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the mutual promises set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto agree as follows:

 

1.           Definitions. In addition to the terms defined in the text of this
Agreement, for all purposes of this Agreement, the following terms shall have
the meanings ascribed thereto in this Section 1:

 

(a)          "Affiliate" of any specified Person means any other Person
controlling, controlled by or under common control with such specified Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of such specified Person whether through the
ownership of voting securities, by contract or otherwise.

 

 

 

 

(b)          "Base Salary" means Employee's annual base salary, as specified in
Section 3(a). For purposes of calculating the Severance Payment described in
Section 4(b), "Base Salary" shall mean Employee's then current Base Salary in
effect as of the Employment Termination Date (or, if Employee's Base Salary was
reduced within ninety (90) days prior to the Employment Termination Date without
Employee's written consent, Employee's annual Base Salary as in effect
immediately prior to the date of such reduction).

 

(c)          "Board" means the then-current Board of Directors of the Company.

 

(d)          "Business Day" means any Monday through Friday, excluding any such
day on which banks are authorized to be closed in Texas.

 

(e)          "Cause" means any of the following: (1) Employee's conviction by a
court of competent jurisdiction as to which no further appeal can be taken of a
felony or entering the plea of guilty or nolo contendere to any such felony by
Employee; (2) the commission by Employee of a demonstrable act of fraud, or a
misappropriation of material funds or property, of or upon the Company or any of
its Affiliates; (3) the engagement by Employee, without the prior written
approval of the Board or the Compensation Committee, in any material activity
which directly competes with the business of the Company or any of its
Affiliates, or which would directly result in a material injury to the business
or reputation of the Company or any of its Affiliates; or (4) the repeated
nonperformance of Employee's duties to the Company or any of its Affiliates
(other than by reason of Employee's illness or incapacity) that continues after
Notice (defined below) from the Board or the Compensation Committee to Employee
of such nonperformance (which Notice specifically identifies the manner and sets
forth specific facts, circumstances and examples of which the Board or
Compensation Committee believes that Employee has not substantially performed
duties hereunder) and Employee's continued failure to remedy such
nonperformance.

 

(f)          "Code" means the Internal Revenue Code of 1986, as amended.

 

(g)          "Compensation Committee" means the Compensation Committee of the
Board.

 

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(h)          "Confidential Information" means information (whether or not
recorded in documentary form, or stored on any magnetic or optical disk or
memory) relating to the business, products, affairs and finances of the Company
or any of its Affiliates for the time being confidential to the Company or any
of its Affiliates, and trade secrets including, without limitation, technical
data and know-how relating to the business of the Company or any of its
Affiliates or any of their business contacts, including in particular (by way of
illustration only and without limitation): (1) information relating to the
business of exploring, acquiring, developing, exploiting and disposing of oil
and natural gas resources (regardless of when conceived, made, developed or
acquired); (2) information relating to the business or prospective business,
current or projected plans or internal affairs of the Company or any of its
Affiliates; (3) information relating to the current or prospective marketing or
sales of any products or services of the Company or any of its Affiliates,
including non-public lists of customers' and suppliers' names, addresses and
contacts; sales targets and statistics; market share and pricing information;
marketing surveys; research and reports; non-public advertising and promotional
material; strategies; and financial and sales data; (4) information relating to
any actual or prospective business strategies of the Company or any of its
Affiliates; (5) information relating to any actual acquisitions, investments or
corporate opportunities or prospective acquisition, investment targets or
corporate opportunity; (6) know-how, trade secrets, unpublished information
relating to the Company or any of its Affiliates' intellectual property or to
the creation, production or supply of any products or services of the Company or
any of its Affiliates; (7) information to which the Company or any of its
Affiliates owes an obligation of confidence to a third party (including, without
limitation, customers, clients, suppliers, partners, investors, joint venturers
and professional advisors of the Company or any of its Affiliates); and (8)
other commercial, financial or technical information relating to the business or
prospective business of the Company or any of its Affiliates, or to any past,
current or prospective client, customer, investor, supplier, licensee, officer
or employee, agent of the Company or any of its Affiliates, or any Person
interested in the share capital or assets of the Company or any of its
Affiliates, and any other Person to whom the Company or any of its Affiliates
may provide or from whom they may receive information (whether marked
confidential or not).

 

(i)          "Employment Period" means from the beginning of the Initial Term
(as defined below) of employment (and any extension thereof) through Employee's
Employment Termination Date, subject to the provisions of Section 2(a).

 

(j)          "Employment Termination Date" means the date that Employee's
employment with the Company, and all of its Affiliates, if applicable,
terminates for whatever reason. Notwithstanding anything contained herein to the
contrary, the date on which such a Separation from Service (as defined below)
occurs shall be the "Employment Termination Date" with respect to any payment of
deferred compensation hereunder that is subject to, and not exempt under, Code
Section 409A.

 

(k)          "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.

 

(l)          "Good Reason" means the occurrence of any of the following events
(without Employee's express written consent) (1) a reduction of Employee's Base
Salary; (2) a material reduction in Employee's authority, duties or
responsibilities of employment, provided that the sale of any portion of the
Company’s assets, which results in the Company reducing in size, shall not
constitute Good Reason under this clause (2); (3) Employee's primary place of
employment is moved to a location greater than fifty (50) miles away from its
then current location; or (4) any other action or inaction that constitutes a
material breach by the Company of the Agreement.

 

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In the case of Employee's allegation of a Good Reason event, (i) Employee shall
provide Notice to the Board or Compensation Committee of the event alleged to
constitute Good Reason within sixty (60) days of Employee's knowledge of such
event, and (ii) the Company shall have the opportunity to remedy the alleged
Good Reason event within thirty (30) days from receipt of Notice of such
allegation (the "Cure Period"). If the Company does not cure the circumstance
giving rise to Good Reason prior to the end of the Cure Period, the Employment
Termination Date must occur within thirty (30) days following the end of the
Cure Period in order for such termination to be considered a termination for
Good Reason.

 

(m)          "Notice" means a written communication complying with Section 23 of
the Agreement ("notify" has the correlative meaning).

 

(n)          "Notice of Termination" means a written Notice which (1) indicates
the specific termination provision in the Agreement that is being relied upon,
(2) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for the termination of Employee's
employment under the provision so indicated, and (3) if the Employment
Termination Date is other than the date of receipt of such Notice, specifies the
Employment Termination Date (which date, in the case of a termination by
Employee without Good Reason, shall be at least forty-five (45) days after the
giving of such Notice). Any termination of Employee's employment whether by the
Company or by Employee (other than due to death or disability), shall be
communicated by Notice of Termination to the other Party.

 

(o)          "Person" means any individual, firm, corporation, partnership,
limited liability company, trust, or other entity, including any successor (by
merger or otherwise) of such person or entity.

 

(p)          "Qualifying Termination" means Employee's Separation from Service
during the Employment Period due to (1) a termination of Employee's employment
by Employee for Good Reason; (2) a termination of Employee's employment by the
Company without Cause; or (3) a non-renewal of this Agreement by the Company
under Section 2(a). For purposes of clarity, a termination of Employee's
employment due to Employee's death or disability shall not be considered a
"Qualifying Termination."

 

(q)          "Separation from Service" means a termination of all services
provided by Employee to the Company and its Affiliates, whether voluntarily or
involuntarily, as determined by the Company in accordance with the requirements
of Code Section 409A.

 

(r)          "Specified Employee" means a "specified employee," as such term is
defined under Code Section 409A.

 

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2.           Employment.

 

(a)          Employment Period. Subject to the third sentence of this Section
2(a), Employee's initial term of employment with the Company under this
Agreement shall be for the period commencing on October 29, 2018 (the “Effective
Date”) and ending on December 31, 2019 (the "Initial Term"). Thereafter,
Employee's term of employment shall be automatically extended repetitively for
an additional one (1) year period on January 1, 2019, and each one (1)-year
anniversary thereof, unless Notice of Termination (pursuant to Sections 1(n) and
5) is given by either the Company or Employee to the other Party at least sixty
(60) days prior to the end of the Initial Term or any one-year extension
thereof, as applicable, that the Agreement will not be renewed for a successive
one-year period after the end of the Initial Term or the current one-year
period, as applicable. Additionally, the Company and Employee shall each have
the right to give Notice of Termination to terminate Employee's employment and
this Agreement (including during the Initial Term and any extension thereof)
subject, however, to the terms and conditions of this Agreement, including with
respect to the rights and duties of the Parties following the Employment
Termination Date; provided, however, that the Parties agree that in the event of
the death or disability of Employee, the Company will not be required to provide
Notice of Termination to terminate Employee's employment and this Agreement and
Employee's employment and the Agreement will automatically terminate upon
Employee's death or disability.

 

(b)          Employment. Effective as of the Effective Date and continuing
during the Employment Period, Employee's employment by the Company shall be
subject to the terms and conditions of this Agreement.

 

(c)          Position. As of the Effective Date and during the Employment
Period, Employee will serve as Vice President and Chief Financial Officer of the
Company.

 

(d)          Duties and Services. During the Employment Period, Employee agrees
to serve in the position(s) referred to in Section 2(c) of this Agreement and to
perform the duties and services appertaining to such offices, as well as such
additional duties and services appropriate to such offices upon which the
Parties mutually may agree from time to time. Employee's employment shall also
be subject to the policies maintained and established by the Company from time
to time, as the same may be amended or otherwise modified.

 

Employee shall at all times use his best efforts to in good faith comply with
United States and foreign laws applicable to Employee's actions on behalf of the
Company and its Affiliates. Employee understands and agrees that he may be
required to travel extensively at times for purposes of the Company's business.

 

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(e)          Other Interests. Employee agrees that, during the Employment
Period, he will devote substantially all his business time to the business and
affairs of the Company and its Affiliates. The foregoing notwithstanding, the
Parties recognize and agree that Employee may engage in passive personal
investments (such as real estate investments and rental properties) and other
civic and charitable activities (such as continued service on non-profit and/or
educational boards) that do not materially conflict with the business and
affairs of the Company or materially interfere with Employee's performance of
his duties hereunder; provided, however, Employee agrees that if the
Compensation Committee determines in good faith that continued service with one
or more civic or charitable entities is inconsistent with Employee's duties
hereunder and gives written notice to Employee, he will promptly resign from
each such position.

 

3.           Compensation and Benefits.

 

(a)          Base Salary. During the Employment Period, Employee shall receive a
minimum annual base salary of $250,000, which shall be prorated for any period
of less than 12 months. The Company shall review Employee's Base Salary on an
annual basis and may, in its sole discretion, increase (but not decrease) the
Base Salary, and thereafter references in this Agreement to "Base Salary" shall
refer to annual Base Salary as adjusted. The Base Salary shall be paid in equal
installments in accordance with the Company's standard policy regarding payment
of compensation to executives, but no less frequently than monthly.

 

(b)          Annual Bonus. During the Employment Period, Employee shall be
eligible to receive an annual discretionary bonus (the “Annual Bonus”) under the
Company’s annual bonus program as may be in effect from time to time. For fiscal
year 2018, Employee shall be entitled to receive a guaranteed prorated Annual
Bonus equal to $150,000, determined based on a fraction, the numerator being the
number of days during the period commencing on the Effective Date through
December 31, 2018, and the denominator being 365. Commencing in fiscal year
2019, Employee shall be eligible to receive an Annual Bonus based on a target
bonus opportunity equal to between $100,000 and $200,000 upon the attainment of
one or more pre-established goals established by the Board or the Compensation
Committee in its sole discretion. Employee must be employed on the date of that
any Annual Bonus is paid in order to earn such Annual Bonus.

 

(c)          Incentive Equity. On or as soon as reasonably practicable following
the Effective Date, Executive shall be granted a total of 48,000 restricted
stock units (“RSUs”), subject to the terms and conditions of an award agreement
to be entered into (the “RSU Agreement”) and the Company's 2018 Omnibus
Incentive Plan. 30,000 RSUs will time vest in equal annual installments of 1/3
on each of June 5, 2019, June 5, 2020 and June 5, 2021, which will be designated
as the time vesting RSUs and the remaining 18,000 RSUs will vest upon the
closing of each applicable asset sale which will be designated as the
performance vesting RSUs as set forth in the RSU Agreement.

 

(d)          Reimbursement of Business Expenses. During the Employment Period,
subject to the Company's standard policies and procedures with respect to
expense reimbursement as applied to its executives generally, the Company shall
reimburse Employee for, or pay on behalf of Employee, the reasonable and
appropriate expenses incurred by Employee for business related purposes,
including reasonable and customary dues and fees to industry and professional
organizations and costs of entertainment and business development.

 

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(e)          Employee and Executive Benefits Generally. During the Employment
Period, Employee shall be eligible to participate in any employee benefit plan
that the Company has adopted or may adopt, maintain or contribute to for the
benefit of its employees generally, subject to satisfying the applicable
eligibility requirements, except to the extent such plans are duplicative of the
benefits otherwise provided hereunder. Employee’s participation will be subject
to the terms of the applicable plan documents and generally applicable Company
policies. Nothing herein shall be construed to prevent the Company (or other
plan sponsor of any plan) from amending or terminating any such plan or benefit
at any time during the Employment Period, in its discretion, subject to the
terms and conditions of the plan or benefit, as applicable. Notwithstanding the
foregoing, the Company may amend or terminate any such plan or benefit at any
time, subject to the terms and conditions of the plan or benefit, as
applicable,.

 

(f)          Paid Time Off. During the Employment Period, Employee shall be
entitled initially to 30 days of paid time off ("PTO") per calendar year, as
accrued in accordance with the Company's PTO policy as in effect from time to
time.

 

4.           Rights and Payments Upon Termination. Employee's right to
compensation and benefits for periods after the Employment Termination Date
shall be determined in accordance with this Section 4, as follows:

 

(a)          Minimum Payments. Employee shall be entitled to the following
minimum payments under this Section 4(a), in addition to any other payments or
benefits to which he is entitled to receive under the terms of this Agreement or
any employee benefit plan or program:

 

(1)         Employee's accrued and unpaid Base Salary through the Employment
Termination Date;

 

(2)         Employee's accrued and unused PTO through the Employment Termination
Date (subject to the terms and conditions of the PTO policy); and

 

(3)         reimbursement of Employee's reasonable business expenses that were
incurred but unpaid as of the Employment Termination Date.

 

Such salary and accrued vacation days shall be paid to Employee within the next
applicable pay period following the Employment Termination Date in a cash lump
sum less all required payroll taxes and any other appropriate withholdings and
deductions. Business expenses shall be reimbursed in accordance with the
Company's normal policy and procedures.

 

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(b)          Severance Payment. Subject to the other provisions of this
Agreement, if Employee incurs a Qualifying Termination and timely executes and
returns to the Company (and does not revoke) a release of claims in the form
provided to Employee by the Company for such purpose at the time of Employee's
Qualifying Termination (the "Release"), as provided for in Section 15 of this
Agreement,

 

(1)         the Company shall pay Employee a lump sum cash payment equal to one
(1) times the sum of Employee's Base Salary, less all required payroll taxes and
any other appropriate withholdings and deductions, on the first payroll date
immediately following the date that the Release becomes effective. In the event
that the period for signing, returning and revoking the Release spans two (2)
tax years, the payment will be paid in the second taxable year; and

 

(2)         the Company shall, or shall use commercially reasonable efforts to
cause the sponsor of the group health plan in which Employee participates to,
maintain continued group health plan coverage following the Employment
Termination Date under all group health plans in which Employee participates as
of the Employment Termination Date that are subject to the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (as codified in Code Section 4980B
and Part 6 of Subtitle B of Title I of ERISA) ("COBRA") for Employee and
Employee's eligible spouse and dependents for the maximum period for which such
qualified beneficiaries are eligible to receive any such COBRA coverage in
accordance with applicable law. However, Employee (and Employee's spouse and
dependents) shall not be required to pay more for such COBRA coverage than is
charged by the Company to its officers who are then in active service for the
Company and receiving coverage under such plan (or, if there are no officers in
active service participating in such plan during which COBRA coverage is
provided under this Section 4(b)((2), then Employee shall not be required to pay
more for such COBRA coverage than the monthly premium rate as in effect as of
the Employment Termination Date) and, therefore, the Company shall be
responsible for the difference between the amount charged hereunder and the full
COBRA premiums; provided that if COBRA coverage ceases during the period in
which it is to be provided under this Section 4(b)(2) due to the Company
liquidating and no such plan being in existence (the "Liquidating Event"), the
Company shall pay to Employee an amount equal to the product of (x) the
Company's portion of the monthly premium rate in effect as of the Employment
Termination Date and (y) the number of full or partial months remaining in the
eighteen (18) month period after the Employment Termination Date following the
occurrence of a Liquidating Event, payable in a lump sum within sixty (60) days
following the occurrence of a Liquidating Event. In all other respects, Employee
(and Employee's spouse and dependents) shall be treated the same as other COBRA
qualified beneficiaries under the terms of such plans and the provisions of
COBRA. In the event of any change to a group health plan following the
Employment Termination Date, Employee and Employee's spouse and dependents, as
applicable, shall be treated consistently with the then-current officers of the
Company with respect to the terms and conditions of coverage and other
substantive provisions of the plan. Following the Employment Termination Date,
Employee and Employee's spouse hereby agree to acquire and maintain any and all
coverage that either or both of them are entitled to at any time during their
lives under the Medicare program or any similar program of the United States or
any agency thereof. Employee and Employee's spouse further agree to pay any
required premiums for Medicare coverage from their personal funds.

 

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(c)          Limitation on Severance Payment. For purposes of clarity, in the
event of (i) resignation or other voluntary termination of Employee's employment
by Employee without Good Reason, (ii) termination of Employee's employment by
the Company for Cause, (iii) non-renewal of this Agreement by Employee under
Section 2(a), or (iv) termination of Employee's employment due to Employee's
death or disability, the Company shall have no obligation to provide the
Severance Payment described in Section 4(b), except, solely with respect to any
plan sponsored by the Company, to offer COBRA coverage (to the extent required
by COBRA) but not at the discounted rate described in Section 4(b)(2). Employee
shall still be entitled to receive the minimum payments provided under Section
4(a).

 

5.           Notice of Termination. If the Company or Employee desires to
terminate Employee's employment hereunder at any time during, as of, or prior
to, expiration of the Employment Period, such Party shall do so by giving
written Notice of Termination to the other Party, provided that no such action
shall alter or amend any other provisions hereof or rights arising hereunder. No
further renewals of Employee's term of employment hereunder shall occur pursuant
to Section 2(a) after the giving of such Notice of Termination.

 

6.           No Rights as an Owner. Employee shall not have any rights as an
owner of the Company or any of its Affiliates as a result of this Agreement, or
as a result of any action taken (or omitted to be taken) by the Company or any
of its Affiliates with respect to this Agreement.

 

7.           Restrictive Covenants. As an inducement to the Company to enter
into this Agreement, Employee represents to, and covenants with or in favor of,
the Company that Employee will comply with all of the restrictive covenants set
out in Sections 8 through 12 and Section 17, as a condition to the Company's
obligation to provide the Severance Payment and any other benefits to Employee
under the Agreement.

 

8.           Trade Secrets.

 

(a)          Access to Trade Secrets. As of the Effective Date and on an ongoing
basis, the Company agrees to give Employee access to Trade Secrets which
Employee did not have access to, or knowledge of, before the Effective Date.

 

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(b)          Access to Specialized Training. As of the Effective Date and on an
ongoing basis, the Company has provided, and agrees to provide on an ongoing
basis, Employee with Specialized Training which Employee does not have access
to, or knowledge of, before the Effective Date.

 

(c)          Agreement Not to Use or Disclose Trade Secrets. In exchange for the
Company's promises to provide Employee with access to Trade Secrets and
Specialized Training and the other consideration provided to Employee under this
Agreement, during and following Employee's employment by the Company or an
Affiliate, Employee agrees not to disclose to any Person, or publish or use for
any purpose, any Trade Secrets, except as provided in Section 9(b) below, as
required in the ordinary course of business of the Company or an Affiliate or as
authorized by the Board or Compensation Committee.

 

(d)          Definitions. The following terms, when used in this Agreement, are
defined below:

 

(1)         "Specialized Training" includes the training the Company or an
Affiliate provides to Employee that is unique to its business and enhances
Employee's ability to perform Employee's job duties effectively.

 

(2)         "Trade Secrets" means any and all information and materials (in any
form or medium) that are proprietary to the Company or an Affiliate, or are
treated as confidential by the Company or Affiliate as part of, or relating to,
all or any portion of its or their business, including information and materials
about the products and services offered, or the needs of customers served, by
the Company or Affiliate; compilations of information, records and
specifications, properties, processes, programs, and systems of the Company or
Affiliate; research of or for the Company or Affiliate; and methods of doing
business of the Company or Affiliate. Trade Secrets include, without limitation,
all of the Company's or Affiliate's technical and business information, whether
patentable or not, which is of a confidential, trade secret or proprietary
character, and which is either developed by Employee alone, with others or by
others; lists of customers; identity of customers; contract terms; bidding
information and strategies; pricing methods or information; computer software;
computer software methods and documentation; hardware; the Company's or
Affiliate's methods of operation; the procedures, forms and techniques used in
servicing accounts; and other documents, information or data that the Company
requires to be maintained in confidence for the business success of the Company
or any Affiliate.

 

9.           Confidential Information.

 

(a)          Confidential Information Defined. For purposes of this Section 9,
the term "Company" shall include the Company and its Affiliates. During the
course of Employee's employment with the Company, the Company will (1) disclose
or entrust to Employee, and provide Employee with access to, Confidential
Information, (2) place Employee in a position to develop business goodwill
belonging to the Company, and (3) disclose or entrust to Employee business
opportunities to be developed for the Company.

 

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(b)          Protection of Confidential Information.

 

(1)         Employee acknowledges that Confidential Information has been and
will be developed or acquired by the Company or an Affiliate through the
expenditure of substantial time, effort and money and provides the Company or an
Affiliate with an advantage over competitors who do not know or use the
Confidential Information. Employee further acknowledges and agrees that the
nature of the Confidential Information obtained during Employee's employment
would make it difficult, if not impossible, for Employee to perform in a similar
capacity for a business competitive with the Company or an Affiliate without
disclosing or utilizing Confidential Information.

 

(2)         During and following Employee's employment by the Company or an
Affiliate, Employee shall hold in confidence and not directly or indirectly
disclose except in the course of performance of his duties for the Company or an
Affiliate, use, copy or make lists of any Confidential Information, except to
the extent necessary to carry out Employee's duties on behalf of the Company or
an Affiliate. Subject to Section 9(b)(4), below, if Employee receives a
subpoena, document request, information request, discovery request, court order,
or other legal process (collectively, "Process") that would or may require
disclosure of Confidential Information, while employed by the Company or
thereafter, Employee will (x) give prompt written notice to the Company, along
with a copy of such Process and a copy of all documents and information in the
Participant's possession, custody, or control that Employee believes is
responsive; (y) reasonably cooperate with the Company (at the Company's expense)
in any lawful response as the Company may reasonably request, including in
connection with the Company's pursuit of an appropriate protective order; and
(z) unless advised by counsel otherwise, not make any disclosure until the
Company has had a full opportunity to respond to the Process, including by
seeking an appropriate protective order.

 

(3)         This confidentiality covenant shall be in addition to, and shall not
waive, limit or restrict in any way, any confidentiality provisions in any other
confidentiality agreement or post-employment covenant between the Parties or
otherwise.

 

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(4)         Notwithstanding anything herein to the contrary, in accordance with
the Defend Trade Secrets Act, 18 U.S.C. § 1833(b), and other applicable law,
nothing in this Agreement, the Release, or any other agreement or policy shall
prevent Employee from, or expose Employee to criminal or civil liability under
federal or state trade secret law for, (x) directly or indirectly sharing any
trade secrets of the Company or any of its subsidiaries or affiliates or other
Confidential Information (except information protected by the attorney-client or
work product privilege) with an attorney or with any federal, state, or local
government agencies, regulators, or officials, for the purpose of investigating
or reporting a suspected violation of law, whether in response to a subpoena or
otherwise, without notice to the Company, or (y) disclosing the trade secrets of
the Company or any of its subsidiaries or affiliates in a filing in connection
with a legal claim, provided that the filing is made under seal. Further,
nothing herein shall prevent Employee from discussing or disclosing information
related to Employee's general job duties or responsibilities and/or to employee
compensation.

 

10.          Duty to Return Company Documents and Property. On or before the
Employment Termination Date, Employee shall immediately return and deliver to
the Company any and all papers, books, records, documents, memoranda and
manuals, e-mail, electronic or magnetic recordings or data, including all copies
thereof, belonging to the Company or an Affiliate or relating to their
businesses, in Employee's possession, whether prepared by Employee or others. If
at any time after the Employment Termination Date, Employee determines that
Employee has any Trade Secrets or Confidential Information in Employee's
possession or under his control, Employee shall immediately return same to the
Company, including all copies thereof.

 

All writings, records, and other documents and things comprising, containing,
describing, discussing, explaining, or evidencing any Confidential Information
or Trade Secrets, and all equipment, computers, mobile phones, components,
manuals, parts, keys, tools, and the like in Employee's custody, possession or
under his control that have been obtained by, prepared by, or provided to,
Employee by the Company or any Affiliate in the course or scope of Employee's
employment with the Company (or any Affiliate) shall be the exclusive property
of the Company (or such Affiliate, as applicable), shall not be copied and/or
removed from the premises of the Company or any Affiliate, except in pursuit of
the business of the Company or an Affiliate, and shall be delivered to the
Company or an Affiliate, as applicable, without Employee retaining any copies or
electronic versions, within one (1) day following the Employment Termination
Date or at any other time requested by the Company.

 

11.          Inventions and Other Works. Any and all writings, computer
software, inventions, improvements, processes, procedures and/or techniques
which Employee may make, conceive, discover, or develop, either solely or
jointly with any other Person, at any time during employment, whether at the
request or upon the suggestion of the Company or an Affiliate or otherwise,
which relate to or are useful in connection with any business now or hereafter
carried on or contemplated by the Company or an Affiliate, including
developments or expansions of its present fields of operations, shall be the
sole and exclusive property of the Company or an Affiliate, as applicable.
Employee agrees to take any and all actions necessary or appropriate so that the
Company or the Affiliate can prepare and present applications for copyright or
Letters Patent therefor, and secure such copyright or Letters Patent wherever
possible, as well as reissue renewals, and extensions thereof, and obtain the
record title to such copyright or patents. Employee shall not be entitled to any
additional or special compensation or reimbursement regarding any such writings,
computer software, inventions, improvements, processes, procedures and
techniques.

 

 12 

 

 

12.          Non-Solicitation Restriction. While employed and for a period of
twelve (12) months after the Employment Termination Date, Employee will not,
whether for his own account or for the account of any other Person (other than
the Company or its Affiliates), intentionally solicit, endeavor to entice away
from the Company or its Affiliates, or otherwise interfere with the relationship
of the Company or its Affiliates with any Person who is employed by the Company
or an Affiliate (including any independent consultants).

 

13.          Tolling. If Employee violates any of the restrictions contained in
Sections 8 through 12 or Section 17, then notwithstanding any provision hereof
to the contrary, the restricted period will be suspended and will not run in
favor of Employee from the time of the commencement of any such violation,
unless and until such time when Employee cures the violation to the reasonable
satisfaction of the Board or the Compensation Committee.

 

14.          Reformation. If a court rules that any time period, the geographic
area or any other restriction specified in any restrictive covenant in Sections
8 through 12 or Section 17 is unenforceable, then the time period will be
reduced by the number of months, or the geographic area will be reduced by the
elimination of such unenforceable portion, or the restriction will be otherwise
modified so that the restrictions may be reasonable and fully enforced in the
geographic area and for the time to the full extent permitted by law.

 

15.          Release Agreement. As a condition to the receipt of the Severance
Payment under Section 4(b), Employee must first execute the Release and return
it to the Company. The Release shall be in substantially the same form as
attached hereto as Exhibit A (with any changes to such form as the Company may
reasonably require, in its discretion, to reflect the circumstances relating to
the termination of Employee's employment, any changes in applicable law or other
legal authority, or any agreement by the Company not to require a release with
respect to one or more particular or potential claims). The Company shall
deliver the Release to Employee within five (5) Business Days after the
Employment Termination Date. Employee must return the executed Release within
the twenty-one (21) or forty-five (45) day, whichever is applicable, period
following the date of his receipt of the Release, as applicable and stated in
the Release. If the Release delivery, execution and non-revocation period spans
two taxable years, the Severance Payment will always be made in the second
taxable year. The Company shall also execute the Release, after it has been
signed and returned by Employee, within three (3) Business Days after the end of
the revocation period specified in the Release. No Severance Payment shall be
provided by the Company unless and until the Release has been executed and
delivered to the Company by Employee, has not been revoked, and is no longer
subject to revocation by Employee. The Release shall not release any claim or
cause of action by or on behalf of Employee for (a) any payment or other benefit
that is required under this Agreement prior to the receipt of such benefit by or
on behalf of Employee or (b) a breach of this Agreement by the Company.

 

 13 

 

 

16.          No Additional Severance Payments. Employee acknowledges and agrees
that he shall not be a participant in, and he hereby waives any right to
participate in, any severance pay plan (as the same may be amended from time to
time) that generally covers employees of the Company or an Affiliate such as to
preclude duplicative severance pay benefits that are in addition to those
provided to Employee under the terms of this Agreement and, in such event, such
other severance pay benefits shall not be provided to Employee.

 

17.          No Disparaging Comments. Subject to Section 9(b) above, (x)
Employee shall refrain from any criticisms or disparaging comments about the
Company, its direct and indirect subsidiaries and its and their directors,
officers and owners and (y) the Company and its direct and indirect subsidiaries
and each of their directors and officers shall refrain from any criticisms or
disparaging comments about Employee; provided, however, that nothing in this
Agreement shall apply to or restrict in any way the communication of information
to any governmental law enforcement agency by either Party that is required by
compulsion of law or for internal statements in the course of performance of his
duties for the Company. A violation or threatened violation of this prohibition
may be enjoined by a court of competent jurisdiction. The rights under this
provision are in addition to any and all rights and remedies otherwise afforded
by law to the Parties.

 

Employee acknowledges that in executing this Agreement, he has knowingly,
voluntarily, and intelligently waived any free speech, free association, free
press or First Amendment to the United States Constitution (including, without
limitation, any counterpart or similar provision or right under any other state
constitution which may be deemed to apply) and rights to disclose, communicate,
or publish disparaging information or comments concerning or related to the
Company, provided, however, nothing in this Agreement shall be deemed to prevent
Employee from testifying fully and truthfully in response to a subpoena from any
court or from responding to an investigative inquiry from any governmental
agency.

 

18.          Tax Withholding. The Company or its Affiliate shall withhold from
any payments or benefits under this Agreement (whether or not otherwise
acknowledged under this Agreement) all federal, state, local, or other taxes
that it is required to withhold.

 

19.          Employment Status. Nothing in this Agreement provides Employee with
any right to continued employment with the Company or any Affiliate, or shall
interfere with the right of the Company or an Affiliate to terminate Employee's
employment at any time subject to their obligations under this Agreement.

 

20.          Company's Successor and Assignment. In addition to any obligations
imposed by law upon any successor to the Company, this Agreement shall be
binding upon and inure to the benefit of the Company and any successor of the
Company (whether direct or indirect, by purchase, merger, consolidation or
otherwise). The Company shall require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company, as previously
defined, and any successor by operation of law or otherwise, and any successor
to the business and/or assets of the Company (as provided above) which assumes
and agrees to perform this Agreement.

 

 14 

 

 

21.          Employee's Successor. This Agreement is personal to Employee and
shall not be assigned by Employee. Any purported assignment by Employee shall be
null and void from the initial date of the purported assignment. If Employee
should die after the occurrence of a Qualifying Termination event, but before
any payment or other benefit to which Employee is entitled to receive under this
Agreement has been fully received by Employee, all payments or other benefits
which Employee would have been entitled to receive had he continued to live
shall be made or provided in accordance with the terms of this Agreement to
Employee's surviving lawful spouse, if any, or if not, to his estate upon
receipt by the Company of proper instructions regarding the lawful
representative of such estate.

 

22.          Restricted Assignment. Except as expressly provided in Sections 20
and 21, this Agreement, and the rights and obligations of the Parties hereunder,
are personal in nature, and neither this Agreement, nor any right, benefit, or
obligation of either Party hereto, shall be subject to voluntary or involuntary
assignment, alienation or transfer, whether by operation of law or otherwise,
without the prior written consent of the other Party. Any attempted assignment,
transfer, or delegation in violation of the preceding sentence shall be void and
of no force or effect.

 

23.          Notice. Each Notice or other communication required or permitted
under this Agreement shall be in writing and transmitted or delivered by
personal delivery, prepaid courier or messenger service (whether overnight or
same-day), prepaid telecopy or facsimile, or prepaid certified United States
mail (with return receipt requested), addressed (in any case) to the other Party
at the address for that Party set forth below that Party's signature on this
Agreement, or at such other address as the recipient has designated by Notice to
the other Party.

 

Each Notice or communication so transmitted, delivered, or sent in person, by
courier or messenger service, or by certified United States mail, shall be
deemed given, received, and effective on the date delivered to or refused by the
intended recipient (with the return receipt, or the equivalent record of the
courier or messenger, being deemed conclusive evidence of delivery or refusal.)
Nevertheless, if the date of delivery is after 5:00 p.m. (local time of the
recipient) on a Business Day, the Notice or other communication shall be deemed
given, received and effective on the next Business Day.

 

24.          Waiver and Amendment. No term or condition of this Agreement shall
be deemed waived other than by a writing signed by the Party against whom or
which enforcement of the waiver is sought. Without limiting the generality of
the preceding sentence, a Party's failure to insist upon the other Party's
strict compliance with any provision of this Agreement or to assert any right
that a Party may have under this Agreement shall not be deemed a waiver of that
provision or that right. Any written waiver shall operate only as to the
specific term or condition waived under the specific circumstances, and shall
not constitute a waiver of that term or condition for the future or a waiver of
any other term or condition. No amendment, termination or other modification of
this Agreement shall be effective unless stated in a writing signed by the
Parties.

 

 15 

 

 

25.          Severability and Reformation. It is the desire of the Parties
hereto that this Agreement be enforced to the maximum extent permitted by law,
and should any provision contained herein be held invalid or otherwise
unenforceable by a court of competent jurisdiction, the Parties hereby agree
that such provision shall be reformed to create a valid and enforceable
provision to the maximum extent permitted by law; provided, however, if such
provision cannot be reformed, it shall be deemed ineffective and deleted
herefrom without affecting any other provision of this Agreement which shall
remain fully enforceable. This Agreement should be construed by limiting and
reducing it only to the minimum extent necessary to be enforceable under
applicable law. Any such determination or reformation shall not be binding on
any court or other governmental authority not otherwise bound to follow such
conclusions under applicable law.

 

26.          Compliance with Code Section 409A. Any provisions of the Agreement
that are subject to Code Section 409A and the regulations and other authority
issued thereunder by the appropriate governmental entity ("Section 409A") are
intended to comply with all applicable requirements of Section 409A, or an
exemption from the application of Section 409A, and shall be interpreted and
administered accordingly. Notwithstanding any provision of this Agreement to the
contrary, a termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any
amount or benefit that constitutes "non-qualified deferred compensation" (within
the meaning of Section 409A) upon or following a termination of Employee's
employment unless such termination is also a Separation from Service and, for
purposes of any such provision, references herein to a "termination,"
"termination of employment" or like terms shall mean a Separation from Service.

 

Notwithstanding any provision of this Agreement to the contrary, if any payment
or other benefit provided herein would be subject to additional taxes and
interest under Section 409A because the timing of such payment is not delayed as
required by Section 409A for a Specified Employee, then if Employee is on the
applicable date a Specified Employee, any such payment that Employee would
otherwise be entitled to receive during the first six months following his
Separation from Service shall be accumulated and paid, within ten (10) days
after the date that is six months following the Employment Termination Date, or
such earlier date upon which such amount can be paid under Section 409A without
being subject to such additional taxes and interest such as, for example, upon
Employee's death.

 

With respect to any amounts or benefits that are subject to Section 409A, this
Agreement shall in all respects be administered in accordance with Section 409A.
Each payment under this Agreement shall be treated as a separate payment for
purposes of Section 409A. In no event may Employee, directly or indirectly,
designate the calendar year of any payment to be made under this Agreement.

 

 16 

 

 

All reimbursements and in-kind benefits provided under this Agreement that
constitute non-qualified deferred compensation (within the meaning of Section
409A) shall be made or provided in accordance with the requirements of Section
409A. Within the time period permitted by Section 409A, the Company may, in
consultation with Employee, modify the Agreement in the least restrictive manner
necessary and without any diminution in the value of payments or other benefits
to Employee hereunder, in order to avoid the imposition of accelerated tax,
additional tax and/or penalties on Employee under Section 409A.

 

Notwithstanding the foregoing, the Company makes no representations, warranties,
or guarantees regarding the tax treatment of this Agreement or the Severance
Payment under Section 409A or otherwise, and has advised Employee to obtain his
own tax advisor regarding the tax consequences of this Agreement.

 

27.          Cooperation. Employee agrees that he will reasonably cooperate
(taking into account his personal and professional schedule) in any litigation,
proceeding, investigation or inquiry in which the Company or any of its
Affiliates may be or become involved. Employee also agrees to reasonably
cooperate with any internal investigation or inquiry conducted by or on behalf
of the Company or any of its Affiliates. Such cooperation shall include Employee
making himself reasonably available (taking into account his personal and
professional schedule), upon the request of the Company or any of its
Affiliates, or its counsel, for depositions, court appearances and interviews by
such counsel. The Company shall reimburse Employee for all reasonable and
documented out-of-pocket expenses incurred by him in connection with such
cooperation. To the extent permitted by law, Employee agrees that he will notify
the Board if he is contacted by any government agency or any other Person
contemplating or maintaining any claim or legal action against the Company or
any of its Affiliates or by any agent or attorney of such Person. Nothing
contained in this Section 27 shall preclude Employee from providing truthful
testimony in response to a valid subpoena, court order, regulatory request or as
may be required by law. For the avoidance of doubt, this Section 27 is subject
to the terms of Section 9(b) above. Payment for expenses to be reimbursed under
this Section 27 may not be made after December 31st of the year following the
year in which the expense was incurred.

 

28.          No Duties. Except to the extent required by any unwaiveable
requirement under applicable law, no employee of the Company (and none of its
Affiliates) shall have any duties or liabilities, including without limitation
any fiduciary duties, to Employee (or any Person claiming by and through
Employee) as a result of this Agreement or any claim arising hereunder. This
Agreement does not create, nor shall it be construed as creating, any principal
and agent, trust, or other fiduciary duty or special relationship running from
the Company to Employee.

 

29.          No Trust or Funding. The Company (and not any of its Affiliates)
will be solely responsible for the payment of the Severance Payment hereunder.
This Agreement shall at all times be entirely unfunded and no provision shall at
any time be made with respect to segregating assets of the Company for payment
of any Severance Payment or other benefit hereunder. This Agreement shall not
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company and Employee. Neither Employee nor
any other Person shall have any interest in any particular assets of the Company
(or any of its Affiliates) by reason of the right to receive any payment or
other benefit under this Agreement. To the extent that Employee acquires a right
to receive any payment from the Company pursuant to this Agreement, such right
shall be no greater than the right of any general unsecured creditor of the
Company.

 

 17 

 

 

30.          Controlling Law; Arbitration; Enforcement.

 

(a)          This Agreement shall be governed by and construed under the laws of
the State of Texas.

 

(b)          Arbitration. Except as provided in Section 30(c) below, Employee
and the Company irrevocably and unconditionally agree that any past, present, or
future dispute, controversy or claim arising under or relating to this
Agreement; arising under any federal, state, local, or foreign statute,
regulation, law, ordinance, or the common law (including, but not limited to,
any law governing discrimination, harassment, or retaliation); or arising in
connection with Employee's employment or the termination thereof; involving
Employee on the one hand and the Company on the other hand, including both
claims brought by Employee and claims brought against Employee, shall be
submitted for resolution to binding arbitration as provided herein; provided
that nothing herein shall require arbitration of a claim or charge which, by
law, cannot be the subject of a compulsory arbitration agreement. Any such
arbitration shall be administered by the American Arbitration Association
("AAA") in Harris County, Texas. Such arbitration shall be conducted in
accordance with the AAA Commercial Arbitration Rules, as modified herein; and
shall be conducted by a single arbitrator, who shall be a partner at an "AmLaw
200" law firm based in Harris County, Texas with experience in employment
disputes and the oil and gas industry. The arbitrator will apply Texas law,
including federal statutory law as applied in Texas courts, without giving
effect to any choice of law or conflict of law rules or provisions. Except as
set forth in Section 30(c) below, the arbitrator, and not any federal, state, or
local court or agency, shall have exclusive authority to resolve any dispute
relating to the interpretation, applicability, enforceability, and/or formation
of this Agreement or the Release, including, but not limited to, any dispute as
to whether a particular claim is subject to arbitration hereunder and/or whether
any part of this Section 30(b) is void or voidable. The arbitral award shall be
in writing, state the reasons for the award, and be final and binding on the
Parties. In agreeing to arbitrate such claims hereunder, Employee hereby
recognizes and agrees that Employee is waiving the right to a trial in court
and/or by a jury. In the event of any court proceeding to challenge or enforce
an arbitrator's award, the Company and Employee consent to the exclusive
jurisdiction of the United States District Court for the Southern District of
Texas or a state district court of competent jurisdiction in Harris County,
Texas; agree to exclusive venue in that jurisdiction; and waive any claim that
such jurisdiction is an inconvenient forum.

 

 18 

 

 

(c)          Enforcement. The Company and Employee agree that the covenants
contained in Sections 8 through 12 and Section 17 are reasonable under the
circumstances and that any breach of any of foregoing Sections would cause
irreparable harm to the Company for which there is no adequate remedy at law,
such that the Company shall be permitted to obtain an injunction to enforce
these provisions, as well as recovering any other relief available in law or in
equity. Thus, in addition to the Company's right to arbitrate disputes
hereunder, the Company shall be entitled to obtain emergency equitable relief,
including a temporary restraining order and/or preliminary injunction, in aid of
arbitration, from any state or federal court of competent jurisdiction, without
first posting a bond or other security, to restrain any such breach or
threatened breach. Such relief shall be in addition to any and all other
remedies available to the Company against Employee for such breaches or
threatened breaches. Upon the issuance (or denial) of an injunction, the
underlying merits of any dispute will be resolved in accordance with the
arbitration provisions of Section 30(b) of this Agreement. The Participant
irrevocably consents to the jurisdiction of the United States District Court for
the Southern District of Texas or a state district court of competent
jurisdiction in Harris County, Texas, in connection with any action for
injunctive relief under this Section 30(c).

 

31.          Employee Acknowledgment. Employee acknowledges that (a) he is
knowledgeable and sophisticated as to business matters, including the subject
matter of this Agreement, (b) he has read this Agreement and understands its
terms and conditions, (c) he has had ample opportunity to discuss this Agreement
with his legal counsel prior to execution, and (d) no strict rules of
construction shall apply for or against the drafter or any other Party. Employee
represents that he is free to enter into this Agreement including, without
limitation, that he is not subject to any restrictive covenant that would
conflict with his duties and covenants under this Agreement.

 

32.          Survival of Certain Provisions. Wherever appropriate to the
intention of the Parties, the respective rights and obligations of the Parties
hereunder shall survive any termination or expiration of this Agreement. For the
avoidance of doubt, surviving provisions include Sections 7 through 17 herein.

 

33.          Entire Agreement and Amendment. This Agreement constitutes the
final and complete expression of agreement among the Parties with respect to the
subject matter hereof, and fully supersedes any and all prior agreements,
understanding or representations between the Company (or any current or former
Affiliate) and Employee pertaining to or concerning the subject matter of this
Agreement (including, for the avoidance of doubt, that certain Offer Letter,
dated as of October 5, 2018, by and between the Company and Employee, but
excluding the RSU Agreement). No oral statements or prior written material not
specifically incorporated in this Agreement shall be of any force and effect,
and no changes in or additions to this Agreement shall be recognized, unless
incorporated in this Agreement by written amendment executed by both Parties,
such amendment to become effective on the date stipulated in it. Employee
acknowledges and represents that he did not rely, and has not relied, on any
communications, promises, statements, inducements, or representations, oral or
written, by the Company or any of its Affiliates in connection with this
Agreement. Employee confirms that he has relied solely and exclusively on
Employee's own judgment in entering into this Agreement, and he expressly
disclaims that he is owed any duty, including the duty of good faith and fair
dealing, which is not expressly set forth in this Agreement.

 

 19 

 

 

34.          Interpretive Matters. In the interpretation of the Agreement,
except where the context clearly otherwise requires:

 

(a)          "including" or "include" does not denote or imply any limitation;

 

(b)          "or" has the inclusive meaning "and/or";

 

(c)          the singular includes the plural, and vice versa, and each gender
includes each of the others;

 

(d)          captions or headings are for reference purposes only, and they are
not to be considered in interpreting the Agreement;

 

(e)          "Section" refers to a Section of the Agreement, unless otherwise
stated in the Agreement;

 

(f)          "month" refers to a calendar month; and

 

(g)          a reference to any statute, rule, or regulation includes any
amendment thereto or any statute, rule, or regulation enacted or promulgated in
replacement thereof, as well as any regulation or other authority issued by the
appropriate governmental entity under, or with respect to, a statute.

 

35.          Counterparts. This Agreement may be executed by the Parties in
multiple counterparts, whether or not all signatories appear on these
counterparts (including via electronic signatures and exchange of PDF documents
via email), each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.

 

[Signature page follows.]

 

 20 

 

 

IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of
the Effective Date above first written above.

 

  EMPLOYEE       /s/ Ryan Stash   Name:  Ryan Stash       Address for Notices:  
   

Harvest Oil & Gas Corp.

      1001 Fannin, Suite 450       Houston, TX 77002

 

  HARVEST OIL & GAS CORP.       /s/ Michael E. Mercer   Name: Michael E. Mercer
  Title: President and CEO

 

  Address for Notices:      

Harvest Oil & Gas Corp.

      1001 Fannin, Suite 450       Houston, TX 77002

 

[Exhibits A follows.]

 

[Signature page to Employment Agreement]

 

 

 

 

EXHIBIT A
TO
EMPLOYMENT AGREEMENT
CONFIDENTIAL RELEASE AGREEMENT

 

In consideration of the Severance Payment and other consideration described in
the Employment Agreement dated as of October 26, 2018 (the "Employment
Agreement"), and as it may be amended thereafter, by and between
Harvest Oil & Gas Corp. (the "Company") and Ryan Stash (the "Employee"), this
Release Agreement (this "Agreement") is made and entered into by the Company and
Employee. The Company and Employee may be individually referred to herein as
"Party" and collectively as the "Parties."

 

By signing this Agreement, Employee and the Company hereby agree as follows:

 

1.Purpose. Terms used in this Agreement with initial capital letters that are
not defined herein are defined in the Employment Agreement between the Parties.
The purpose of this Agreement is to provide for the orderly termination of the
employment relationship between the Parties, and to voluntarily resolve any
actual or potential disputes or claims that Employee has or might have, as of
the date of Employee's execution of this Agreement, against the Company and all
of its owners, parents, predecessors, successors, divisions, subsidiaries and
Affiliates, and its and their present and former agents, employees, managers,
officers, directors, attorneys, owners, plan fiduciaries, assigns,
representatives, Employees, consultants, and all other Persons acting by,
through, or in concert with any of them (individually and collectively, the
"Released Parties"). Neither the fact that this Agreement has been proposed or
executed, nor the terms of this Agreement, are intended to suggest, or should be
construed as suggesting, that the Released Parties have acted unlawfully or
violated any federal, state or local law or regulation, or any other duty,
policy or contract.

 

2.Termination of Employment. Effective ___________ (the "Termination Date"),
Employee's employment with the Company and all of its Affiliates has terminated.

 

3.Termination Benefits. In consideration for Employee's execution of, and
required performance under, this Agreement, the Company shall provide Employee
with the Severance Payment. Employee confirms and agrees that he would not
otherwise have received, or been entitled to receive, the Severance Payment or
benefits other than those that are required to be provided under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or such other laws
that cannot be waived. All payments hereunder shall be net of withholding for
applicable federal, state and local taxes to the extent required by law.

 

4.Waiver of Additional Compensation or Benefits. The Severance Payment to be
paid to Employee constitute the entire amount of compensation and consideration
due to Employee under this Agreement, and Employee acknowledges that he has no
right to seek, and will not seek, any additional or different compensation or
consideration for executing or performing under this Agreement.

 

 

 

 

5.Neutral Employment Reference. The Company shall provide a neutral employment
reference to any potential employers that consider the employment of Employee or
seek information concerning the reasons for the departure of Employee. The
Company will provide to any such potential employers the identity of the
positions held by Employee and the dates of Employee's employment with the
Company.

 

6.Tax Consequences. The Company has made no representations to Employee
regarding the tax consequences of any benefits received, or to be received, by
Employee under the Employment Agreement.

 

7.Certain Continuing Obligations. Employee acknowledges and agrees that the
post-termination restrictive covenants and obligations that apply to Employee as
set forth in the Employment Agreement shall survive termination of the
employment relationship and the execution of this Agreement, and Employee shall
continue to fully honor his post-employment obligations.

 

8.Employee Representations. Employee expressly agrees to and acknowledges,
confirms and represents to the following, and intends for the Company to rely
upon the following in entering this Agreement:

 

(a)          The term "Released Parties" means the Company and all of its
Affiliates, and its and their present and former employees, managers, officers,
directors, owners, partners, agents, attorneys, owners, plan fiduciaries,
representatives, and successors and assigns, all other Persons acting by,
through or in concert with any of them (collectively, the "Released Parties").

 

(b)          Employee has not filed any complaints, charges, claims or actions
against the Company or any of the other Released Parties with any court, agency,
or commission regarding any of the matters related to this Agreement or to his
employment or separation from service with the Company. By executing this
Agreement, Employee is not waiving or releasing the right to file a charge with,
or participate in an investigation by, the Equal Employment Opportunity
Commission ("EEOC") or any other federal or state agency. Employee is, however,
waiving the right to receive or obtain any monetary recovery from the Company or
any of the other Released Parties in connection with (i) a charge filed with the
EEOC, whether such charge is filed by Employee or any other Person, or (ii) any
lawsuit or arbitration brought by any other Person, in each case except as
prohibited by law.

 

(c)          Employee, by entering into this Agreement, is releasing the
Released Parties from any and all claims that Employee may have against them
under federal, state, or local laws, which have arisen on or before the Release
Effective Date (as defined on the signature page of this Agreement), except as
otherwise provided in Section 9 below.

 

 2 

 

 

(d)          Employee, by entering into this Agreement, is waiving all claims
that Employee may have against the Released Parties under the federal Age
Discrimination in Employment Act of 1967, as amended (i.e., 29 USC § 621 et
seq.), which have arisen on or before the Release Effective Date.

 

(e)          Employee has reviewed all aspects of this Agreement, and has
carefully read and fully understands this Agreement.

 

(f)          Employee has been hereby advised to consult with an attorney of his
choice before signing this Agreement.

 

(g)          Employee is knowingly and voluntarily entering into this Agreement,
and has relied solely and completely upon his own judgment and, if applicable,
the advice of his attorney before entering into this Agreement.

 

(h)          Employee is not relying upon any representations, promises,
predictions, projections, or statements made by or on behalf of the Company or
any of the other Released Parties, other than those that are specifically stated
in this Agreement.

 

(i)          Employee represents and acknowledges that in executing this
Release, he does not rely, and has not relied, on any prior oral or written
communications, promises, agreements, statements, inducements, understandings,
or representations by the Company or any of the Released Parties, except as
expressly contained in this Agreement. Further, Employee expressly disclaims any
reliance on any prior oral or written communications, promises, agreements,
statements, inducements, understandings, or representations in entering into
this Agreement and, therefore, Employee understands and agrees that he is
precluded from bringing any fraud or similar claim against the Company or any of
the other Released Parties associated with any such communications, promises,
agreements, statements, inducements, understandings, or representations, and he
is hereby entering into this Agreement based on his own independent judgment.

 

(j)          Employee acknowledges that this Agreement shall be binding on
Employee, and on his spouse, heirs, administrators, representatives, executors,
beneficiaries, successors and assigns.

 

(k)          Employee agrees that this Agreement shall, in all cases, be
construed as a whole, according to its fair meaning, and not strictly for or
against, either of the Parties.

 

(l)          Employee does not waive any right or claim that initially arose for
the first time after the Release Effective Date.

 

 3 

 

 

(n)          Employee will receive payment of consideration under this Agreement
that is beyond what Employee was entitled to receive before entering into this
Agreement.

 

(o)          Employee understands and agrees that this Agreement shall not in
any way be construed as an admission by the Released Parties of any unlawful or
wrongful acts whatsoever against Employee or any other Person; and the Released
Parties specifically disclaim any liability to, or wrongful acts against,
Employee or any other Person.

 

9.Release. Employee, on behalf of himself and his spouse, heirs, administrators,
representatives, executors, beneficiaries, successors and assigns (individually
and collectively, the "Releasing Parties"), hereby fully, unconditionally and
forever releases, acquits and discharges the Released Parties, jointly and
severally, from and against any and all claims, demands, actions, lawsuits,
grievances, liabilities, and obligations of any nature whatsoever that the
Releasing Parties had, have or may ever have against the Released Parties, or
that might be assigned by the Releasing Parties, whether known or unknown, fixed
or contingent, as of the Release Effective Date. Employee acknowledges,
understands and agrees that this Agreement specifically includes, without
limitation, (a) law or equity claims; (b) contract (express or implied) or tort
claims; (c) claims arising under any federal, state or local laws of any
jurisdiction that prohibit age, sex, race, national origin, color, disability,
religion, veteran, military status, sexual orientation or any other form of
discrimination, harassment, hostile work environment or retaliation (including,
without limitation, the Age Discrimination in Employment Act of 1967, the Older
Workers Benefit Protection Act, the Americans with Disabilities Act of 1990, the
Americans with Disabilities Act Amendments Act of 2008, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Acts of 1866
and/or 1871, 42 U.S.C. Section 1981, the Rehabilitation Act, the Family and
Medical Leave Act, the Sarbanes-Oxley Act, the Employee Polygraph Protection
Act, the Worker Adjustment and Retraining Notification Act, the Equal Pay Act of
1963, the Lilly Ledbetter Fair Pay Act, the Uniformed Services Employment and
Reemployment Rights Act of 1994, the Genetic Information and Nondiscrimination
Act of 2008, the Texas Commission on Human Rights Act, the Texas Labor Code,
Section 1558 of the Patient Protection and Affordable Care Act of 2010, the
Consolidated Omnibus Budget Reconciliation Act of 1985, and any other federal,
state or local laws of any jurisdiction); (d) claims under any other federal,
state, local, municipal or common law whistleblower protection, discrimination,
wrongful discharge, anti-harassment or anti-retaliation statute or ordinance;
(e) claims arising under ERISA; or (f) any other statutory or common law claims
related to Employee's employment or separation from employment with the Company
or its Affiliate. Employee further represents that, as of the Release Effective
Date, he has not been the victim of any illegal or wrongful acts by any of the
Released Parties, including, without limitation, discrimination, retaliation,
harassment or any other wrongful act based on sex, age, race, religion, or any
other legally protected characteristic.

 

 4 

 

 

The release contained in this Section 9 does not include the following: (a) a
claim for which the facts giving rise to such claim first occurred after the
Release Effective Date; (b) any eligibility to receive continuation of health
care coverage to the extent required under COBRA; (c) any vested benefit under
any employee benefit plan to the extent required by ERISA and the terms of the
plan; (d) any claim for worker's compensation benefits that is currently pending
as of the Release Effective Date; (e) any right of Employee to be indemnified by
D&O, or the Company or an Affiliate in his capacity as a director, officer or
employee of the Company or any Affiliate during his employment period through
the Termination Date, or as an insured under any applicable liability policy;
(f) any claim challenging the validity of this release under the Older Workers
Benefit Protection Act; (g) any claim that cannot be waived or released as a
matter of law; or (h) any claim or breach of the surviving provisions pursuant
to Section 32 of the Employment Agreement by the Company.

 

10.Time to Consider Offer of Termination Benefits. Employee shall have, and by
signing this Agreement Employee acknowledges and represents that he has been
given, a time period of at least [insert twenty-one (21) or forty-five (45) as
appropriate] days to consider whether to elect to sign this Agreement, and to
thereby waive and release the rights and claims addressed in this Agreement.
Although Employee may sign this Agreement prior to the end of the applicable
time period (as specified above), Employee may not sign this Agreement on or
before the Termination Date. In addition, if Employee signs this Agreement prior
to the end of the applicable time period, Employee shall be deemed, by doing so,
to have certified and agreed that the decision to make such election prior to
the expiration of the applicable time period is knowing and voluntary and was
not induced by the Company through: (a) fraud, misrepresentation, or a threat to
withdraw or alter the offer prior to the end of the applicable time period; or
(b) an offer to provide different terms or benefits in exchange for signing the
Agreement prior to the expiration of applicable time period.

 

11.Seven Day Revocation Period. Employee may revoke this Agreement at any time
within seven (7) days after he signs it. To revoke the Agreement, Employee must
deliver written Notice of such revocation to the attention of the Chief
Executive Officer, or other person with known authority to receive the
revocation, within seven (7) days after the date that he signs this Agreement.
Employee further understands that if he does not revoke the Agreement within
seven (7) days following its execution (excluding the date of execution), it
will become effective, binding, and enforceable as of the Release Effective
Date.

 

12.Agreement Not to Sue. Except as otherwise provided in Section 8, Section 9,
this Agreement or as otherwise required by law, Employee agrees that he will not
commence, maintain, initiate, or prosecute, or cause, encourage, assist,
volunteer, advise or cooperate with any other Person to commence, maintain,
initiate or prosecute, any action, lawsuit, proceeding, charge, petition,
complaint or claim before any court, agency or tribunal against the Company or
any other Released Party arising from, concerned with, or otherwise relating to,
in whole or in part, Employee's employment or separation from employment with
the Company or an Affiliate, or any of the other matters discharged and released
in this Agreement. Employee further understands and agrees that if he, or
someone acting on his behalf, should file, or cause to be filed, any such claim,
charge, complaint, or action against the Company and/or any other Released
Party, Employee expressly waives any and all rights to recover any damages or
other relief from the Company and/or other Released Party including, without
limitation, costs and attorneys' fees. Employee further represents and warrants
that he has not filed or lodged, and has no outstanding claims, including,
without limitation, any lawsuits, charges of discrimination, or administrative
proceedings, against the Company or any of the Released Parties regarding
matters that have been released pursuant to this Agreement.

 

 5 

 

 

13.Participation in Investigations. Notwithstanding any other provision of the
Agreement to the contrary, the Agreement is not intended to interfere or prevent
Employee from filing a charge or claim with any governmental agency charged with
investigating employment claims, including, but not limited to, the EEOC, or,
from participating in, cooperating with, or providing truthful evidence in
connection with an investigation being conducted by a governmental agency
responsible for investigating employment claims; provided, however, Employee
hereby agrees that such filing or participation does not give Employee the right
to recover any damages or equitable relief (including, but not limited to,
reinstatement, back pay, front pay, damages, and attorneys' fees) against the
Company or any of the other Released Parties based on his release of claims in
this Agreement. By executing this Agreement, Employee also hereby waives the
right to recover monetary damages in any proceeding he may bring before the EEOC
or any state or local human rights commission or in any proceeding brought by
the EEOC or any state or local human rights commission (or any other agency) on
Employee's behalf.

 

14.Cooperation. After Employee's termination of employment, he agrees to
cooperate with the Company on the terms and conditions as set out in Section 27
of the Employment Agreement and subject to Section 9(b) of the Employment
Agreement.

 

15.Severability. Should any provision of this Agreement be declared or be
determined by any court of competent jurisdiction to be illegal, invalid or
unenforceable, all remaining provisions of this Agreement shall otherwise remain
in full force and effect and be construed as if such illegal, invalid, or
unenforceable provision has not been included herein.

 

16.Relief. It is further understood and agreed that if a violation of any term
of this Agreement is asserted, the Party who asserts such violation shall have
the right to seek specific performance of that term and/or any other necessary
and proper relief, without bond or other security, as permitted by law or
equity, including but not limited to, damages from any court of competent
jurisdiction, and the prevailing Party shall be entitled to recover its
reasonable costs and attorney's fees. Nothing in this Agreement will be
construed to prevent Employee from challenging the validity of this Agreement
under the Age Discrimination in Employment Act or Older Workers' Benefit
Protection Act. Employee further understands and agrees that if he, or someone
acting on his behalf, files, or causes to be filed, any such claim, charge,
complaint, or action against the Company, any Affiliate, or other Released
Parties, Employee expressly fully waives and relinquishes any right to recover
any damages or other relief, whatsoever, from the Company, its Affiliates,
and/or other Persons, including costs and attorneys' fees.

 

17.Binding Effect. This Agreement shall be binding upon and inure to the benefit
of the Parties, and their respective heirs, executors, beneficiaries, personal
representatives, successors and permitted assigns hereunder, but otherwise this
Agreement shall not be for the benefit of any third parties.

 

 6 

 

 

18.Entire Agreement. This Agreement sets forth the entire agreement of the
Parties and fully supersedes and replaces any and all prior agreements,
promises, representations, or understandings, written or oral, between the
Company (and any other Released Party) and Employee that relates to the subject
matter of this Agreement. This Agreement may be amended or modified only by a
written instrument identified as an amendment hereto that is executed by both
Parties. Employee acknowledges that in executing this Agreement, Employee does
not rely, and has not relied, upon any oral or written representation, promise
or inducement by the Company and/or any of the other Released Parties, except as
expressly contained in this Agreement.

 

19.Choice of Law and Dispute Resolution. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS, EXCEPT TO THE EXTENT PREEMPTED BY CONTROLLING FEDERAL LAW, BUT WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS THAT MIGHT DIRECT THE APPLICATION OF
THE LAW OF ANOTHER JURISDICTION. Any disputes with respect to this Agreement or
otherwise arising between the Parties shall be governed by Section 30(b) and
Section 30(c) of the Employment Agreement.

 

20.Waiver. A Party's waiver of any breach or violation of any provision of this
Agreement shall not operate as, or be construed to be, a waiver of any later
breach of the same or any other provision hereof by such Party.

 

21.Assignment. The Agreement may be assigned by the Company to its successor in
interest, in which case the rights and obligations of the Company under the
Agreement shall inure to the benefit of and shall be binding upon its successor
in interest which shall then be the "Company" Party as referenced herein. Except
as provided in the Agreement, Employee may not assign the Agreement, or any of
his rights or obligations under the Agreement, without the written consent of
the Company. Any attempted assignment by Employee in violation of the Agreement
shall be null and void.

 

22.Amendment. The Agreement may be amended or modified only by a written
instrument identified as an amendment hereto that is executed by both Parties.

 

23.Survival of Certain Provisions. Wherever appropriate to the intention of the
Parties, the respective rights and obligations of the Parties hereunder shall
survive any termination or expiration of this Agreement.

 

[Intentionally blank]

 

 7 

 

 

PLEASE READ CAREFULLY BEFORE SIGNING

 

·Employee acknowledges that he has carefully read and understands the terms of
this Agreement and his obligations hereunder.

 

·Employee acknowledges that he has been advised to review this Agreement with an
attorney of his choosing.

 

·Employee acknowledges that he has been given at least [insert twenty-one (21)
or forty-five (45) as appropriate] days to consider whether to sign this
Agreement. Employee acknowledges that if he signs this Agreement before the end
of such period, it will be his personal and voluntary decision to do so.

 

·Employee understands that this Agreement will not become effective or
enforceable until after the 7-day revocation period has expired. The Company
will have no obligations to Employee under this Agreement or the Employment
Agreement if Employee revokes the Agreement during such 7-day period.

 

·This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall be deemed one and
the same instrument.

 

I ACKNOWLEDGE THAT (1) I HAVE CAREFULLY READ THE FOREGOING AGREEMENT, (2) I
UNDERSTAND ALL OF ITS TERMS AND CONDITIONS, (3) I AM RELEASING CLAIMS, AND (4) I
AM VOLUNTARILY ENTERING INTO THIS AGREEMENT.

 

[Signature page follows.]

 

 8 

 

 

Please review this document carefully as it includes a release of claims.

 

IN WITNESS WHEREOF, Employee has entered into this Agreement, and the Company
has caused this Agreement to be executed in its name and on its behalf by its
duly authorized officer, to be effective as of the date this Agreement is
executed by Employee as set forth beneath Employee's signature below (the
"Release Effective Date").

 

This document was presented to Employee on                         ,
20                   .

 

COMPANY     Address for Notice:         By:                                
Printed Name:             Title:             Date:    

 

Note: Employee may not sign this Agreement on or before his Termination Date.

 

EMPLOYEE     WITNESS           Employee's
Signature     Witness'
Signature             Printed Name:   Printed Name:           Date:   Title:    
            Date:

Address for Notice:

 

                             

 

[Signature page to Confidential Release Agreement]