Exhibit 10.4

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) by and between Christopher K.
Hulburt (the “Executive”) and Rex Energy Operating Corp., a Delaware corporation
(the “Company”), is made and entered into this 1st day of August, 2007, to be
effective on the date that the initial public offering of the common stock of
its parent, Rex Energy Corporation (“Rex”), is consummated (the “Effective
Date”).

WITNESSETH

WHEREAS, the Executive has been appointed as the Executive Vice President,
Secretary and General Counsel of Rex by its board of directors (the “Board of
Rex”);

WHEREAS, the Company provides management and administrative services to Rex and
its subsidiaries;

WHEREAS, due to Rex’s planned initial public offering and the related
reorganization of its subsidiaries, the Board of Directors of the Company (the
“Board”) desires to retain the Executive as the Executive Vice President,
Secretary and General Counsel of the Company and to enter into an employment
agreement with the Executive in order to encourage the continued attention and
dedication to the Company and Rex of the Executive as a member of the Company’s
management, in the best interests of the Company, Rex and its shareholders, and
to compensate him for the additional duties the Executive will undertake as an
officer of a public company;

WHEREAS, the Executive is willing to commit himself to continue to serve the
Company and Rex, on the terms and conditions herein provided;

WHEREAS, the Company and the Executive desire to set forth in this Agreement the
terms and conditions of the Executive’s employment; and

NOW, THEREFORE, in consideration of the premises and the respective covenants
and agreements of the parties herein contained, and intending to be legally
bound hereby, the parties hereto agree as follows:

1. Employment and Term. The Company hereby agrees to employ the Executive, and
the Executive hereby accepts such employment, on the terms and conditions
hereinafter set forth. The period of employment of the Executive by the Company
hereunder (the “Employment Period”) shall commence on the Effective Date and
shall end on the Executive’s Date of Termination (as defined in Section 7(b)
hereof). The term of this Agreement (the “Term”) shall begin on the Effective
Date and shall end on the third anniversary thereof; provided, that, on July 30,
2010, and each anniversary of July 30 thereafter, the Term shall be extended for
one additional year unless, prior to May 30, 2010 with respect to the extension
on July 30, 2010 and each anniversary of May 30 thereafter with respect to each
subsequent annual extension, the Company or the Executive shall have given
written notice not to extend the Term or the Executive shall have incurred a
termination of employment with the Company.

 

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2. Position and Duties.

(a) As of the Effective Date, the Executive shall serve as the Executive Vice
President, Secretary and General Counsel of the Company, in which capacity the
Executive shall perform the usual and customary duties of such office, which are
normally inherent in such capacity in U.S. publicly held corporations of similar
size and character as Rex. The Executive shall report to the Chief Executive
Officer. The Executive agrees and acknowledges that, in connection with his
employment relationship with the Company, the Executive owes fiduciary duties to
the Company and will act accordingly.

(b) During the Employment Period, the Executive agrees to devote substantially
his full time, attention and energies to the Company’s business and agrees to
faithfully and diligently endeavor to the best of his ability to further the
best interests of the Company, Rex and its shareholders. The Executive shall not
engage in any other business activity, whether or not such business activity is
pursued for gain, profit or other pecuniary advantage. Subject to the covenants
of Section 10 herein, this shall not be construed as preventing the Executive
from investing his own assets in such form or manner as will not require his
services in the daily operations of the affairs of the companies in which such
investments are made. Further, subject to Section 10 herein, the Executive may
serve as a director of other companies, if such service is approved by the
Compensation Committee of the Board (the “Compensation Committee”), so long as
such service is not detrimental to the Company or Rex, does not interfere with
the Executive’s service to the Company and does not present the Executive with a
conflict of interest.

(c) In keeping with the Executive’s fiduciary duties to the Company, the
Executive agrees that he shall not, directly or indirectly, become involved in
any conflict of interest, or upon discovery thereof, allow such a conflict to
continue. Moreover, the Executive agrees that he shall promptly disclose to the
Board any facts which might involve any reasonable possibility of a conflict of
interest, or be perceived as such.

(d) Circumstances in which a conflict of interest on the part of the Executive
would or might arise, and which should be reported immediately by the Executive
to the Board, include the following: (i) ownership of a material interest in,
acting in any capacity for, or accepting directly or indirectly any payments,
services or loans from a supplier, contractor, subcontractor, customer or other
entity with which the Company does business; (ii) misuse of information or
facilities to which the Executive has access in a manner which will be
detrimental to the Company’s interest; (iii) disclosure or other misuse of
Confidential Information (as defined in Section 10); (iv) acquiring or trading
in, directly or indirectly, other properties or interests connected with the
design, manufacture or marketing of products designed, manufactured or marketed
by the Company; (v) the appropriation to the Executive or the diversion to
others, directly or indirectly, of any opportunity in which it is known or could
reasonably be anticipated that the Company would be interested; and (vi) the
ownership, directly or indirectly, of a material interest in an enterprise in
competition with the Company or its dealers and

 

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distributors or acting as a director, officer, partner, consultant, employee or
agent of any enterprise which is in competition with the Company or its dealers
or distributors.

(e) Further, the Executive covenants, warrants and represents that he shall:

(i) devote his full and best efforts to the fulfillment of his employment
obligations;

(ii) exercise the highest degree of fiduciary loyalty and care and the highest
standards and conduct in the performance of his duties; and

(iii) endeavor to prevent any harm, in any way, to the business or reputation of
the Company, Rex or its subsidiaries.

3. Place of Performance. In connection with the Executive’s employment by the
Company, the Executive’s principal business address shall be at the Company’s
current principal executive offices in State College, Pennsylvania (the
“Principal Place of Employment”). Executive hereby agrees to perform a
substantial amount of his duties at the Principal Place of Employment, and
understands and agrees that he will be required to travel from time to time for
business purposes.

4. Compensation and Related Matters.

(a) Base Salary. During the Employment Period, the Company shall pay the
Executive an annual base salary (“Base Salary”) in an amount that shall be
established from time to time by the Compensation Committee, payable in
approximately equal installments in accordance with the Company’s customary
payroll practices. The Base Salary shall be set initially at $185,000. The
Compensation Committee shall review the Executive’s Base Salary at least
annually thereafter during the Employment Period. The Executive’s Base Salary
may be increased but not decreased during the Employment Period.

(b) Bonuses. During the Employment Period, the Executive shall be eligible to
participate in the annual incentive compensation plan for executives, when and
if such plan is established or adopted by the Company, or any successor plan, if
any, thereto (the “Annual Incentive Plan”. The bonus opportunity afforded the
Executive pursuant under the Annual Incentive Plan, if any, may vary from year
to year and any bonus earned thereunder, if any, (the “Annual Bonus”) shall be
paid at a time and in a manner consistent with the Company’s customary
practices. The Executive’s bonus levels established under the Annual Incentive
Plan, if any, will be contingent upon the Company achieving predetermined
performance goals and approval by the Compensation Committee.

(c) Equity-Based Compensation and Performance Awards. During the Employment
Period, the Executive shall be entitled to receive equity-based compensation
awards and performance awards on substantially similar terms and conditions no
less favorable than awards made to the other senior executive officers of the
Company.

 

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(d) Expenses. The Company shall promptly reimburse the Executive for all
reasonable legal expenses that the Executive has incurred in connection with
entering into this Agreement and all reasonable business expenses incurred
during the Employment Period by the Executive in performing services hereunder,
including all expenses of travel and living expenses while away from home on
business or at the request of and in the service of the Company; provided, in
each case, that such expenses are incurred and accounted for in accordance with
the policies and procedures established by the Company.

(e) Other Benefits. During the Employment Period, the Executive shall be
entitled to participate in all of the employee benefit plans and arrangements
made available by the Company to its other senior executive officers, subject to
and on a basis consistent with the terms, conditions and overall administration
of such plans and arrangements, and shall be entitled to perquisites that may be
added with the approval of the Compensation Committee. Notwithstanding the
foregoing, the Company shall have the right to change, amend or discontinue any
benefit plan, program, or perquisite, so long as such changes are similarly
applicable to senior executive officers of the Company generally. The Executive
will also be entitled to a monthly vehicle allowance in the amount of $500.00
per month payable in accordance with the Company’s normal payroll practices.

(f) Vacation. During the Employment Period, the Executive shall be entitled to
15 days of vacation per year.

(g) Services Furnished. During the Employment Period, the Executive shall at all
times be provided with office space, stenographic assistance and such other
facilities and services as are suitable to his position and no less favorable
than those being provided to the Executive by the Company as of the date hereof.

5. Offices. Subject to Sections 2, 3 and 4 hereof, the Executive agrees to serve
without additional compensation, if elected or appointed thereto, as a director
of any of Rex’s subsidiaries and as a member of any committees of the board of
directors of any such corporations, and in one or more executive positions of
Rex or any of the Rex’s or the Company’s subsidiaries; provided, that the
Executive is indemnified for serving in any and all such capacities on a basis
no less favorable than is currently or may be provided to any other director of
the Company, Rex or any of its subsidiaries, or in connection with any such
executive position, as the case may be. This indemnity is in addition to and not
in replacement of the Company’s obligations to provide indemnity pursuant to
Section 11 hereof.

6. Termination. The Employment Period shall end in the event of a termination of
the Executive’s employment in accordance with any of the provisions of Section 6
or 7, and the Term shall expire in the event of a termination of Executive’s
employment by the Company for Cause or by the Executive without Good Reason, in
each case, on the Executive’s Date of Termination. Otherwise the Term shall
expire as set forth in Section 1.

(a) Death. The Executive’s employment hereunder shall terminate upon his death.

 

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(b) Disability. If, as a result of the Executive’s incapacity due to physical or
mental illness, the Executive shall have been absent from the full-time
performance of his duties hereunder for the entire period of ninety (90) days in
the aggregate during any period of twelve (12) consecutive months or it is
reasonably expected that such disability will exist for more than such period of
time, and within thirty (30) days after written Notice of Termination (as
defined in Section 7) is given (which notice may be given during such ninety
(90) day period) shall not have returned to the performance of his duties
hereunder on a full-time basis, the Company may terminate the Executive’s
employment hereunder for “Disability.”

During any period that the Executive fails to perform his duties hereunder as a
result of incapacity due to physical or mental illness (“Disability Period”),
the Executive shall continue to receive his Base Salary at the rate in effect at
the beginning of such period as well as all other payments and benefits set
forth in Section 4 hereof, reduced by any payments made to the Executive during
the Disability Period under the disability benefit plans of the Company then in
effect or under the Social Security disability insurance program.

(c) Cause. The Company may terminate the Executive’s employment hereunder for
Cause. For purposes of this Agreement, the Company shall have “Cause” to
terminate the Executive’s employment hereunder upon the occurrence of any of the
following events:

(i) the Executive is convicted of an act of fraud, embezzlement, theft or other
criminal act constituting a felony;

(ii) a material breach by the Executive of any provision of this Agreement;

(iii) the failure by the Executive to perform any and all covenants contained in
Sections 2(c), 2(d), 2(e) and 10 of this Agreement for any reason other than the
Executive’s death, Disability or following the Executive’s delivery of a Notice
of Termination for Good Reason; or

(iv) a material breach by the Executive of the Company’s or Rex’s Standards of
Ethical Conduct;

provided, that, the Executive shall have thirty (30) business days from the date
on which the Executive receives the Company’s Notice of Termination for Cause
under clause (ii), (iii) or (iv) above to remedy any such occurrence otherwise
constituting Cause under such clause (ii), (iii) or (iv).

Cause shall not exist unless and until the Company has delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than two-thirds (2/3) of the entire membership of the Board at a meeting of
the Board called and held for such purpose (after reasonable notice to the
Executive and an opportunity for the Executive, together with his counsel, to be
heard before the Board), finding that in the good faith opinion of the Board,
the Executive was guilty of the conduct set forth in this Section 6(c) and
specifying the particulars thereof in detail.

 

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(d) Good Reason. The Executive may terminate his employment hereunder for “Good
Reason”. Good Reason for the Executive’s termination of employment shall mean
the occurrence, without the Executive’s prior written consent, of any one or
more of the following:

(i) the assignment to the Executive of any duties inconsistent with the
Executive’s position (including status, office, title and reporting
requirements), authorities, duties or other responsibilities as contemplated by
Section 2 of this Agreement;

(ii) the relocation of the Principal Place of Employment to a location more than
twenty five (25) miles from the Principal Place of Employment; or

(iii) a material breach by the Company of any provision of this Agreement;

provided, in any case, that the Company shall have thirty (30) business days
from the date on which the Company receives the Executive’s Notice of
Termination for Good Reason to remedy any such occurrence otherwise constituting
Good Reason.

If one or more Changes in Control of the Company occurs prior to the termination
of this Agreement, Good Reason for the Executive’s termination of employment
shall, in addition to the events listed above, also mean the occurrence, without
the Executive’s prior written consent, of any one or more of the following:

(i) the Company or its successor reduces the Executive’s Base Salary as in
effect immediately before the occurrence of the first Change in Control of the
Company or as the Executive’s Base Salary may be increased from time to time
after that occurrence;

(ii) the Company or its successor reduces the Executive’s Annual Bonus (x) to an
amount less than the Annual Bonus as in effect immediately before the occurrence
of the first Change in Control of the Company or (y) if more than one Annual
Bonus has been paid to Executive under this Agreement, to an amount less than
the average of the two annual bonuses earned by such Executive with respect to
the two preceding years;

(iii) the Company or its successor fails to (x) continue in effect any bonus,
incentive, profit sharing, performance, savings, retirement or pension policy,
plan, program or arrangement (such policies, plans, programs and arrangements
collectively being referred to herein as “Basic Benefit Plans”), including, but
not limited to, any deferred compensation, supplemental executive retirement or
other retirement income, stock option, stock purchase, stock appreciation, or
similar policy, plan, program or arrangement of the Company, in

 

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which the Executive was a participant immediately before the occurrence of the
first Change in Control of the Company, or any substitute plan adopted by the
Board of Directors and in which the Executive was a participant immediately
before the occurrence of the last Change in Control of the Company, unless an
equitable and reasonably comparable arrangement (embodied in a substitute or
alternative benefit or plan) shall have been made with respect to such Basic
Benefit Plan promptly following the occurrence of the last Change in Control of
the Company, or (y) continue the Executive’s participation in any Basic Benefit
Plan (or any substitute or alternative plan) on substantially the same basis,
both in terms of the amount of benefits provided to the Executive (which are in
any event always subject to the terms of any applicable Basic Benefit Plan) and
the level of the Executive’s participation relative to other participants, as
existed immediately before the occurrence of the first Change in Control of the
Company;

(iv) the Company or its successor fails to continue to provide the Executive
with benefits substantially similar to those enjoyed by the Executive under any
of the Company’s other executive benefit plans, policies, programs and
arrangements, including, but not limited to, life insurance, medical, dental,
health, hospital, accident or disability plans, in which the Executive was a
participant immediately before the occurrence of the first Change in Control of
the Company;

(v) the Company or its successor takes any action that would directly or
indirectly materially reduce any other non-contractual benefits that were
provided to the Executive by the Company immediately before the occurrence of
the first Change in Control of the Company or deprive the Executive of any
material fringe benefit enjoyed by the Executive immediately before the
occurrence of the first Change in Control of the Company;

(vi) the Company or its successor fails to provide the Executive with the number
of paid vacation days to which the Executive was entitled in accordance with the
Company’s vacation policy in effect immediately before the occurrence of the
first Change in Control of the Company;

(vii) the Company or its successor requires the Executive to perform a majority
of his duties outside the Executive’s principal office for a period of more than
21 consecutive days or for more than 90 days in any calendar year;

(viii) the Company or its successor fails to honor any provision of any
agreement Executive has or may in the future have with the Company or fail to
honor any provision of this Agreement;

(ix) the Company or its successor gives effective notice of an election to
terminate at the end of the term or the extended term of any employment
agreement Executive has or may in the future have with the Company or the
Successor in accordance with the terms of any such agreement; or

 

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(x) the Company or its successor purports to terminate the Executive’s
employment by the Company unless notice of that termination shall have been
given to the Executive pursuant to, and that notice shall meet the requirements
of, Section 7(a);

provided, in any case, that the Company or its successor shall have thirty
(30) business days from the date on which the Company or its successor receives
the Executive’s Notice of Termination for Good Reason to remedy any such
occurrence otherwise constituting Good Reason.

(e) Change in Control. For purposes of this Agreement, a “Change in Control of
the Company” shall mean the occurrence of any of the following after the
Effective Date:

(i) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
from time to time, (the “Exchange Act”) (a “Covered Person”) of beneficial
ownership (within the meaning of rule 13d-3 promulgated under the Exchange Act)
of 30% or more of either (i) the then outstanding shares of the common stock of
Rex (the “Outstanding Company Common Stock”), or (ii) the combined voting power
of the then outstanding voting securities of Rex entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that for purposes of this subsection (i) of this
Section 6(e), the following acquisitions shall not constitute a Change in
Control of Rex: (1) any acquisition directly from Rex, (2) any acquisition by
Rex, (3) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by Rex or any entity controlled by Rex, or (4) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (1), (2) and (3) of subsection (iii) of this Section 6(e); or

(ii) Individuals who, as of the Effective Date, constitute the Board of Rex (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board of Rex; provided, however, that any individual becoming a director
subsequent to the Effective Date whose election, or nomination for election by
Rex’s shareholders, was approved by a vote of at least two-thirds of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Covered Person other than the Board of Rex; or

(iii) Consummation of (xx) a reorganization, merger or consolidation or sale of
Rex or any subsidiary of Rex, or (yy) a disposition of all or substantially all
of the assets of Rex (a “Business Combination”), in each case, unless, following
such Business Combination, (1) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the

 

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Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, direct or
indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns Rex
or all or substantially all of Rex’s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (2) no
Covered Person (excluding any employee benefit plan (or related trust) of Rex or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 30% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation, except to the extent that such ownership existed
prior to the Business Combination, and (3) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board of Directors, providing for
such Business Combination.

(f) Termination of Agreement. Either party hereto may terminate this Agreement
at any time by giving the Board or the Executive, as the case may be, no more
than thirty (30) days’ prior written notice, in accordance with Section 7
hereof, of such party’s intent to so terminate this Agreement.

If one or more Changes in Control of Rex shall have occurred prior to the third
anniversary of the Effective Date (or during any period for which the term of
this Agreement shall have been automatically extended pursuant to the second
sentence of Section 1), the term of this Agreement shall be extended until the
third anniversary of the date on which the last Change in Control of Rex
occurred.

7. Termination Procedure.

(a) Notice of Termination. Any termination of the Executive’s employment by the
Company or by the Executive (other than termination pursuant to Section 6(a)
hereof) shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 13 hereof. For purposes of this
Agreement, a “Notice of Termination” shall mean a notice that shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated.

(b) Date of Termination. “Date of Termination” shall mean (i) if the Executive’s
employment is terminated pursuant to Section 6(a) above, the date of the
Executive’s death, (ii) if the Executive’s employment is terminated pursuant to

 

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Section 6(b) above, thirty (30) days after Notice of Termination is given
(provided that the Executive shall not have returned to the performance of his
duties on a full-time basis during such thirty (30) day period), (iii) if the
Executive’s employment is terminated pursuant to Section 6(c) above, the date
specified in the Notice of Termination, which date may be no earlier than the
date the Executive is given notice in accordance with Section 13 hereof, (iv) if
the Executive’s employment is terminated pursuant to Section 6(d) above, the
date on which a Notice of Termination is given or any later date (within thirty
(30) days of the date of such Notice of Termination) set forth in such Notice of
Termination and (v) if the Executive’s employment is terminated for any other
reason, the date specified in the Notice of Termination, which date shall be not
later than thirty (30) days following the date on which Notice of Termination is
given; provided, that, if within ten (10) days after any Notice of Termination
is given the party receiving such Notice of Termination notifies the other party
that a dispute exists concerning such termination, the Date of Termination shall
be the date on which the dispute is finally determined, either by mutual written
agreement of the parties or by a binding and final arbitration award.

(c) Compensation During Dispute. If a purported termination occurs during the
Term, and such termination is disputed in accordance with subsection (b) of this
Section 7, the Company shall continue to pay the Executive the full compensation
in effect when the notice giving rise to the dispute was given (including, but
not limited to, Base Salary) and continue the Executive as a participant in all
compensation, benefit and insurance plans in which the Executive was
participating when the notice giving rise to the dispute was given, until the
Date of Termination, determined in accordance with subsection (b) of this
Section 7. Amounts paid under this Section 7(c) are in addition to all other
amounts due under this Agreement and shall not be offset against or reduce any
other amounts due under this Agreement.

8. Additional Payments.

(a) Notwithstanding anything in this Agreement or any other agreement to the
contrary, in the event it is determined that any payments or distributions
(including, without limitation, the vesting of an option or other non-cash
benefit or property or the forgiveness of any indebtedness) by the Company or
any affiliate (as defined under the Securities Act of 1933, as amended, and the
regulations thereunder) thereof or any other person to or for the benefit of the
Executive, whether paid or payable pursuant to the terms of this Agreement, or
pursuant to any other agreement or arrangement with the Company or any such
affiliate (“Payments”), would be subject to the excise tax imposed by
Section 4999 of the Code, or any successor provision, or any interest or
penalties with respect to the excise tax (the excise tax, together with any
interest and penalties, are hereinafter collectively referred to as the “Excise
Tax”), then the Executive will be entitled to receive an additional payment from
the Company (a “Gross-Up Payment”) in an amount that after payment by the
Executive of all taxes (including, without limitation, any interest or penalties
imposed with respect to such taxes and any Excise Tax) imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments. The amount of the Gross-Up Payment will be
calculated by the Company’s independent accounting firm, engaged

 

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immediately prior to the event that triggered the payment, in consultation with
the Company’s outside legal counsel. For purposes of making the calculations
required by this Section, the accounting firm may make reasonable assumptions
and approximations concerning applicable taxes and may rely on reasonable, good
faith interpretations concerning the application of Sections 280G and 4999 of
the Code, provided that the accounting firm’s determinations must be made with
substantial authority (within the meaning of Section 6662 of the Code). The
Gross-Up Payment will be paid on the Executive’s last day of employment or on
the occurrence of the event that results in the imposition of the Excise Tax, if
later. If the precise amount of the Gross-Up Payment cannot be determined on the
date it is to be paid, an amount equal to the best estimate of the Gross-Up
Payment will be made on that date and, within 10 days after the precise
calculation is obtained, either the Company will pay any additional amount to
the Executive or the Executive will pay any excess amount to the Company, as the
case may be. If subsequently the Internal Revenue Service (the “IRS”) claims
that any additional Excise Tax is owing, an additional Gross-Up Payment will be
paid to the Executive within 30 days of the Executive providing substantiation
of the claim made by the IRS. After payment to the Executive of the Gross-Up
Payment, the Executive will provide to the Company any information reasonably
requested by the Company relating to the Excise Tax, the Executive will take
those actions as the Company reasonable requests to contest the Excise Tax,
cooperate in good faith with the Company to effectively contest the Excise Tax
and permit the Company to participate in any proceedings contesting the Excise
Tax. The Company will bear and pay directly all costs and expenses (including
any interest or penalties on the Excise Tax), and indemnify and hold the
Executive harmless, on an after-tax basis, from all such costs and expenses
related to such contest. Should it ultimately be determined that any amount of
an Excise Tax is not properly owed, the Executive will refund to the Company the
related amount of the Gross-Up Payment.

(b) Notwithstanding anything in this Section to the contrary, all Gross-Up
Payments due under this Section shall be made prior to the end of the
Executive’s taxable year following the year in which the related taxes are
remitted to the taxing authority.

9. Compensation upon Termination or During Disability.

(a) Accrued Obligation Defined. For purposes of this Agreement, payment of the
“Accrued Obligation” shall mean payment by the Company to the Executive (or his
designated beneficiary or legal representative, as applicable), when due, of all
vested benefits to which the Executive is entitled under the terms of the
employee benefit plans in which the Executive is a participant as of the Date of
Termination and a lump sum amount in cash equal to the sum of (i) the
Executive’s Base Salary through the Date of Termination, (ii) any compensation
previously deferred by the Executive (together with any accrued interest or
earnings thereon) and any accrued vacation pay and (iii) any other amounts due
the Executive as of the Date of Termination, in each case to the extent not
theretofore paid.

 

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(b) Disability; Death. Following the termination of the Executive’s employment
pursuant to Sections 6(a) or (b) hereof, the Company shall pay to the Executive
(or his designated beneficiary or legal representative, if applicable):

(i) the Accrued Obligation,

(ii) a lump sum in cash equal to one-half of the Executive’s Base Salary as in
effect on the Date of Termination (for each year and prorated for any partial
years) for the remainder of the Term, and

(iii) a lump sum in cash equal to the Executive’s expected value of the
Executive’s bonus opportunity under the Annual Incentive Plan for the fiscal
year of the Company in which the Date of Termination occurs. Such payment is an
accelerated payment of the full year expected value bonus for the fiscal year in
which the Date of Termination occurs and is in lieu of all other bonus payments
that would have otherwise been due to the Executive under the Annual Incentive
Plan after the completion of the fiscal year.

The Company shall pay the Executive the amounts required pursuant to this
Section 9(b) no later than 60 days after the termination of the Executive’s
employment pursuant to Sections 6(a) or (b) hereof.

(c) By the Company for Cause. If during the Term the Executive’s employment is
terminated by the Company pursuant to Section 6(c) hereof, the Company shall pay
to the Executive the Accrued Obligation within thirty (30) days following the
Date of Termination. Following such payment, the Company shall have no further
obligations to the Executive other than as may be required by law or the terms
of an employee benefit plan of the Company.

(d) By the Executive Without Good Reason. If during the Term the Executive
terminates his employment for any reason other than Good Reason, the Company
shall pay to the Executive the Accrued Obligation within thirty (30) days
following the Date of Termination. Following such payment, the Company shall
have no further obligations to the Executive other than as may be required by
law or the terms of an employee benefit plan of the Company. The Executive shall
not have breached this Agreement if he terminates his employment for any reason.

(e) By the Company Without Cause or by the Executive for Good Reason. If during
the Term the Executive’s employment is terminated by the Company other than for
Cause, death or Disability or if the Executive terminates his employment for
Good Reason, then :

(i) Within thirty (30) days after the Date of Termination the Company shall pay
the Executive the Accrued Obligation.

(ii) Subject to clause (viii), within sixty (60) days after the Date of
Termination the Company shall also pay to the Executive a lump sum cash
severance payment in an amount equal to two times his Base Salary (at the rate
in effect as of the Date of Termination).

 

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(iii) Subject to clause (viii), within sixty (60) days after the Date of
Termination the Company shall also pay to the Executive a lump sum in cash equal
to the expected value of the Executive’s bonus opportunity under the Annual
Incentive Plan for the fiscal year of the Company in which the Date of
Termination occurs prorated to the Date of Termination. Such payment is an
accelerated payment of the bonus for the fiscal year in which the Date of
Termination occurs and is in lieu of all other bonus payments that would have
otherwise been due to the Executive under the Annual Incentive Plan after the
completion of the fiscal year.

(iv) For the remainder of the Term, the Company shall arrange to provide the
Executive and his dependents medical insurance benefits substantially similar to
those provided to the Executive and his dependents immediately prior to the Date
of Termination (at no greater cost to the Executive than such cost to the
Executive in effect immediately prior to the Date of Termination, or, if
greater, the cost to similarly situated active employees of the Company under
the applicable group health plan of the Company).

(v) Subject to clause (viii), no later than 60 days after the Date of
Termination the Company shall pay the Executive an amount equivalent to the
product of (1) the monthly basic life insurance premium applicable to the
Executive’s basic life insurance coverage immediately prior to the Date of
Termination and (2) the number of full and fractional months remaining in the
Term. The Executive may, at his option, convert his basic life insurance
coverage to an individual policy after the Date of Termination by completing the
forms required by the Company for this purpose.

(vi) For the remainder of the Term the Company shall continue to provide the
Executive perquisites, other than executive life insurance, in the manner
specified in Section 4(e). Subject to clause (viii), these amounts shall be paid
on the first of each month following the month in which such amounts should have
otherwise been paid.

(vii) Subject to the Executive’s group health plan coverage continuation rights
under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended,
the benefits and perquisites listed in clauses (iv), (v) and (vi) of this
Section 9(e) shall be reduced to the extent benefits and perquisites of the same
type are received by or made available to the Executive during such period, and
provided, further, that the Executive shall have the obligation to notify the
Company that he is entitled to or receiving such benefits and perquisites. The
Company agrees that, if the Executive’s employment with the Company terminates
for any reason during the Term, the Executive is not required to seek other
employment or to attempt in any way to reduce any amounts payable to the
Executive by the Company pursuant to this Section 9. Further, except with
respect

 

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to the benefits provided pursuant to clause (iv), (v) and (vi) above, the amount
of any payment or benefit provided for in this Agreement shall not be reduced by
any compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, or by offset against any amount claimed to be
owed by the Executive to the Company. Payments to the Executive under this
Section 9 (other than Accrued Obligations) are contingent upon the Executive’s
execution of a release substantially in the form of Exhibit A hereto.

(viii) If the Board of Directors (or its delegate) determines in its sole
discretion that as of the date of the Executive’s termination the Executive is a
“specified employee” (as defined in Section 409A(a)(2)(B)(i) of the Code, and
Department of Treasury regulations and other interpretive guidance issued
thereunder) as of the date of the Executive’s termination and that Section 409A
of the Code applies with respect to such payment, any payments due under clauses
(ii), (iii) and (iv) during the six-month period commences on and follows the
Executive’s Date of Termination shall be paid in one lump sum amount on the
first business day following the six-month anniversary of the date of the
Executive’s Date of Termination.

(f) The following shall occur immediately upon the occurrence of a Change in
Control of the Company:

(i) all options to acquire any stock of Rex and all stock appreciation rights
pertaining to such stock held by the Executive immediately prior to a Change in
Control of Rex shall become fully exercisable, regardless of whether or not the
vesting conditions set forth in the relevant stock option agreements have been
satisfied in full; and

(ii) all restrictions on any restricted stock of Rex granted to the Executive
prior to a Change in Control of Rex shall be removed and the stock shall be
freely transferable, regardless of whether the conditions set forth in the
relevant restricted stock agreements have been satisfied in full.

10. Confidential Information; Non-Competition; Non-Solicitation.

(a) Confidential Information. The Executive shall hold in a fiduciary capacity
for the benefit of the Company all trade secrets, confidential information, and
knowledge or data relating to the Company, Rex or its subsidiaries and their
businesses, which shall have been obtained by the Executive during the
Executive’s employment by the Company and which shall not have been or hereafter
become public knowledge (other than by acts by the Executive or representatives
of the Executive in violation of this Agreement) (hereinafter being collectively
referred to as “Confidential Information”). For the avoidance of doubt,
Confidential Information shall not include information that:

(i) is already in Executive’s possession; provided that the information is not
known by the Executive to be subject to another confidentiality agreement with,
or other obligation of secrecy to, the Company , Rex or any of its subsidiaries,

 

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(ii) becomes generally available to the public other than as a result of a
disclosure by the Executive, or

(iii) becomes available to the Executive on a non-confidential basis from a
source other than the Company, Rex or any of its subsidiaries or any of their
respective directors, officers, employees, agents or advisors; provided, that
such source is not known by the Executive to be bound by a confidentiality
agreement with or other obligation of secrecy to the Company, Rex or any of its
subsidiaries.

The Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal process, communicate or divulge any
such trade secrets, information, knowledge or data to anyone other than the
Company and those designated by the Company. Any termination of the Executive’s
employment or of this Agreement shall have no effect on the continuing operation
of this Section 10(a). The Executive agrees to return all Confidential
Information, including all photocopies, extracts and summaries thereof, and any
such information stored electronically on tapes, computer disks or in any other
manner to the Company at any time upon request by the Company and upon the
termination of his employment hereunder for any reason.

(b) Non-Competition. During the Employment Period and for a period of one
(1) year following the Date of Termination (such period following the Employment
Period, the “Restricted Period”), the Executive shall not, within the Restricted
Territory, as defined below, engage in Competition, as defined below, with the
Company, Rex or any of its subsidiaries; provided, that it shall not be a
violation of this Section 10(b) for the Executive to become the registered or
beneficial owner of up to five percent (5%) of any class of the capital stock of
a corporation registered under the Securities Exchange Act of 1934, as amended,
provided that the Executive does not actively participate in the business of
such corporation until such time as this covenant expires. Notwithstanding the
foregoing, the restrictions imposed by this Section 10(b) shall not apply if the
termination of the Executive’s employment was by the Company without Cause or by
the Executive with Good Reason, or occurs by reason of expiration of the term of
this Agreement (which term includes any extension period pursuant to the
operation of Section 12 hereof).

 

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For purposes of this Agreement, “Restricted Territory” means anywhere within a
two (2) mile radius of any Area of Mutual Interest or oil or gas producing
property in which the Company, Rex or any of its subsidiaries has an interest as
of the Date of Termination. “Competition” by the Executive means the Executive’s
engaging in, or otherwise directly or indirectly being employed by or acting as
a consultant or lender to, or being a director, officer, employee, principal,
agent, stockholder, member, owner or partner of, or permitting his name to be
used in connection with the activities of any other business or organization
which competes, directly or indirectly, with the business of the Company, Rex or
its subsidiaries as the same shall be constituted at any time during the Term.

(c) Non-Solicitation. During the Restricted Period, the Executive agrees that he
will not, directly or indirectly, for his benefit or for the benefit of any
other person, firm or entity, do any of the following:

(i) solicit from any customer doing business with the Company, Rex or its
subsidiaries as of the Date of Termination that is known to Executive, business
of the same or of a similar nature to the business of the Company, Rex or its
subsidiaries with such customer;

(ii) solicit from any potential customer of the Company, Rex or its subsidiaries
that is known to the Executive business of the same or of a similar nature to
that which has been the subject of a known written or oral bid, offer or
proposal by the Company, Rex or its subsidiaries, or of substantial preparation
with a view to making such a bid, proposal or offer, within six (6) months prior
to such Date of Termination;

(iii) solicit the employment or services of any person who was known to be
employed by or was a known consultant to the Company, Rex or its subsidiaries
upon the Date of Termination, or within six (6) months prior thereto; or

(iv) otherwise knowingly interfere with the business or accounts of the Company,
Rex or its subsidiaries.

The Executive and the Company agree and acknowledge that the Company has a
substantial and legitimate interest in protecting the Company’s, Rex’s and its
subsidiaries’ Confidential Information and goodwill. The Executive and the
Company further agree and acknowledge that the provisions of this Section 10 are
reasonably necessary to protect the Company’s, Rex’s and its subsidiaries’
legitimate business interests and are designed to protect the Company’s, Rex’s
and its subsidiaries’ Confidential Information and goodwill.

The Executive agrees that the scope of the restrictions as to time, geographic
area, and scope of activity in this Section 10 are reasonably necessary for the
protection of the Company’s, Rex’s and its subsidiaries’ legitimate business
interests and are not oppressive or injurious to the public interest. The
Executive agrees that in the event of a

 

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breach or threatened breach of any of the provisions of this Section 10 the
Company shall be entitled to injunctive relief against the Executive’s
activities to the extent allowed by law, and the Executive waives any
requirement for the posting of any bond by the Company in connection with such
action. The Executive further agrees that any breach or threatened breach of any
of the provisions of Section 10(a) would cause injury to the Company for which
monetary damages alone would not be a sufficient remedy.

11. Indemnification; Insurance. The Company and/or Rex shall indemnify the
Executive to the fullest extent permitted by the laws of the Company’s state of
incorporation in effect at that time, or certificate of incorporation and
by-laws of the Company, whichever affords the greater protection to the
Executive. The Executive will be entitled to any insurance policies the Company
or Rex may elect to maintain generally for the benefit of their respective
officers and directors against all costs, charges and expenses incurred in
connection with any action, suit or proceeding to which he may be made a party
by reason of being a director or officer of the Company, Rex or its
subsidiaries.

12. Successors; Binding Agreement.

(a) Company’s Successors. The Company will 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 expressly
assume 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. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as he would be entitled to hereunder if he
terminated his employment for Good Reason, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used in this Agreement,
“Company” shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which executes and delivers the
agreement provided for in this Section 12 or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of law.

(b) Executive’s Successors. This Agreement and all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die while any
amounts would still be payable to him hereunder if he had continued to live, all
such amounts unless otherwise provided herein shall be paid in accordance with
the terms of this Agreement to the Executive’s devisee, legatee or other
designee or, if there is no such designee, to the Executive’s estate.

 

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13. Notice. For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or (unless otherwise specified)
mailed by United States certified or registered mail, return receipt requested,
postage prepaid, addressed as follows:

If to the Executive:

Christopher K. Hulburt

1975 Waddle Road

State College, Pennsylvania 16803

If to the Company:

Rex Energy Operating Corp.

Attention: Chief Executive Officer

1975 Waddle Road

State College, Pennsylvania 16803

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

14. Amendment or Modification; Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and such officer of the Company as
may be specifically designated by the Board or its Compensation Committee. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not set forth expressly in Agreement.

15. Dispute Resolution. Any dispute or controversy arising under or in
connection with this Agreement, the Executive’s employment by the Company or the
Executive’s compensation or benefits (a “Dispute”) shall be settled in
accordance with the procedures described in this Section 15.

(a) First, the parties shall attempt in good faith to resolve any Dispute
promptly by negotiations between the Executive and executives or directors of
the Company who have authority to settle the Dispute. Either party may give the
other disputing party written notice of any Dispute not resolved in the normal
course of business. Within five days after the effective date of that notice,
the Executive and such executives or directors of the Company shall agree upon a
mutually acceptable time and place to meet and shall meet at that time and
place, and thereafter as often as they reasonably deem necessary, to exchange
relevant information and to attempt to resolve the Dispute. The first of those
meetings shall take place within 30 days of the effective date of the disputing
party’s notice. If the Dispute has not been resolved within 60 days of the
disputing party’s notice, or if the parties fail to agree on a time and place
for an initial meeting within five days of that notice, either party may
initiate mediation and arbitration of the Dispute as provided hereinafter. If a
negotiator intends to be accompanied at a meeting by an attorney, the other
negotiators shall be given at least three business days’ notice of that
intention and may also be accompanied by an attorney.

 

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All negotiations pursuant to this Section 15 shall be treated as compromise and
settlement negotiations for the purposes of applicable rules of evidence and
procedure.

(b) Second, if the Dispute is not resolved through negotiation as provided in
Section 15(a), either disputing party may require the other to submit to
non-binding mediation with the assistance of a neutral, unaffiliated mediator.
If the parties encounter difficulty in agreeing upon a neutral, they shall seek
the assistance of the American Arbitration Association in the selection process.

(c) Any Dispute that has not been resolved by the non-binding procedures
provided in Sections 15(a) and 15(b) within 90 days of the initiation of the
first of the procedures shall be finally settled by arbitration conducted
expeditiously in accordance with the Commercial Arbitration Rules of the
American Arbitration Association or of such similar organization as the parties
hereto may mutually agree; provided, that if one party has requested the other
to participate in a non-binding procedure and the other has failed to
participate within 30 days of the written request, the requesting party may
initiate arbitration before the expiration of the period. The arbitration shall
be conducted by three independent and impartial arbitrators. Executive shall
appoint one arbitrator, the Company shall appoint a second arbitrator, and a
third arbitrator not appointed by the parties shall be appointed by the first
two arbitrators selected. The arbitration shall be held in Centre County,
Pennsylvania. Judgment may be entered on the arbitrator’s award in any court
having jurisdiction. The arbitrators shall award the prevailing party in the
arbitration its costs and expenses, including reasonable attorney’s fees,
incurred in connection with the Dispute. The arbitrators shall not award any
amount to either the Executive or the Company in excess of the compensation,
employee benefits and indemnification amounts that the Company paid or should
have paid to the Executive pursuant to this Agreement.

(d) Notwithstanding the Dispute resolution provisions of this Section 15, either
party may bring an action in a court of competent jurisdiction in an effort to
enforce the provisions of this Section 15 and to seek injunctive relief to
protect the party’s rights pending resolution of a Dispute pursuant to this
Section 15, including, without limitation, the Company’s rights pursuant to
Section 10 of this Agreement.

(e) The Company shall pay all costs and expenses of Company and Executive
(including, but not limited to, reasonable attorneys’ fees, the fees of the
arbitrators and any other related costs) for any arbitration proceeding or legal
action; provided, however, that if in any such arbitration proceeding or legal
action, the arbitrator or court, respectively, determines that Executive has
prosecuted or defended any issue in such proceeding or action in bad faith, the
arbitrator or court, respectively, may allocate the portion of such costs and
expenses relating to such issue between the parties in any other manner deemed
fair, equitable and reasonable by the arbitrator or court, respectively.

16. Governing Law. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the Commonwealth of Pennsylvania
without regard to its conflicts of law principles.

 

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17. Miscellaneous. All references to sections of any statute shall be deemed
also to refer to any successor provisions to such sections. The obligations of
the parties under Sections 9, 10, 11 and 15 hereof shall survive the expiration
of the Term. The compensation and benefits payable to the Executive or his
beneficiary under Section 9 of this Agreement shall be in lieu of any other
severance benefits to which the Executive may otherwise be entitled upon his
termination of employment under any severance plan, program, policy or
arrangement of the Company.

18. Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect throughout the Term. Should any one or more of the provisions of this
Agreement be held to be excessive or unreasonable as to duration, geographical
scope or activity, then that provision shall be construed by limiting and
reducing it so as to be reasonable and enforceable to the extent compatible with
the applicable law.

19. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

20. Release. In consideration of the benefits and compensation which may be
awarded to the Executive pursuant to Section 9 of this Agreement, the Executive
hereby agrees to execute and be bound by, as a condition precedent to receiving
said benefits and compensation, the Release attached hereto as Exhibit A, such
Release being incorporated herein by reference.

21. Deferred Compensation. This Agreement is intended to meet the requirements
of Section 409A of the Code and shall be administered in a manner that is
intended to meet those requirements and shall be construed and interpreted in
accordance with such intent. To the extent that an award or payment, or the
settlement or deferral thereof, is subject to Section 409A of the Code, except
as the Board of Directors and Executive otherwise determine in writing, the
award shall be granted, paid, settled or deferred in a manner that will meet the
requirements of Section 409A of the Code, including regulations or other
guidance issued with respect thereto, such that the grant, payment, settlement
or deferral shall not be subject to the excise tax applicable under Section 409A
of the Code. In the event additional regulations or other guidance is issued
under Section 409A of the Code or a court of competent jurisdiction provides
additional authority concerning the application of Section 409A with respect to
the payments described hereunder, then the provisions regarding such payments
shall be amended to permit such payments to be made at the earliest time allowed
under such additional regulations, guidance or authority that is practicable and
achieves the original intent of this Agreement.

22. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and, as of the
Effective Date, supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto.

 

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23. Effectiveness. This Agreement shall become effective upon approval of the
Board of Directors. The Company shall provide a certified copy of the resolution
evidencing such approval as soon as practical after such approval.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.

 

Rex Energy Operating Corp. (the “Company”) By   /s/ John A. Lombardi   Chairman
of the Compensation Committee Rex Energy Corporation

 

Christopher K. Hulburt (“Executive”) By   /s/ Christopher K. Hulburt  
Christopher K. Hulburt

 

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EXHIBIT A

RELEASE

The Executive hereby irrevocably and unconditionally releases, acquits and
forever discharges the Company (as defined in the Executive’s Employment
Agreement) and its affiliated companies and their directors, officers, employees
and representatives, (collectively “Releasees”), from any and all claims,
liabilities, obligations, damages, causes of action, demands, costs, losses
and/or expenses (including attorneys’ fees) of any nature whatsoever, whether
known or unknown, including, but not limited to, rights arising out of alleged
violations of any contracts, express or implied, any covenant of good faith and
fair dealing, express or implied, or any tort, or any legal restrictions on the
Company’s right to terminate employees, or any federal, state or other
governmental statute, regulation, or ordinance, including, without limitation,
Title VII of the Civil Rights Act of 1964, as amended and the Age Discrimination
in Employment Act of 1967, as amended, which the Executive claims to have
against any of the Releasees (in each case, except as to indemnification
provided by (a) the Executive’s Employment Agreement with the Company (as
amended or superseded from time to time) and/or (b) by the Company’s bylaws and
any indemnification agreement or arrangement permitted by Section 145 of the
Delaware General Corporation Law and by directors, officers and other liability
insurance coverage’s to the extent you would have enjoyed such coverages had you
remained a director or officer of the Company). In addition, the Executive
waives all rights and benefits afforded by any state laws which provide in
substance that a general release does not extend to claims which a person does
not know or suspect to exist in his favor at the time of executing the release
which, if known by him, must have materially affected the Executive’s settlement
with the other person. The only exception to the foregoing are claims and rights
that may arise after the date of execution of this Release, claims and rights
arising under any employee benefit plan (including, but not limited to the Long
Term Incentive Plan and the Annual Incentive Plan) and claims and rights arising
under Section 9 of the Executive’s Employment Agreement.

The Executive understands and agrees that:

 

  A. He has a period of 21 days within which to consider whether he desires to
execute this Agreement, that no one hurried him into executing this Agreement
during that 21-day period, and that no one coerced him into executing this
Agreement.

 

  B. He has carefully read and fully understands all of the provisions of this
Agreement, and declares that the Agreement is written in a manner that he fully
understands.

 

  C. He is, through this Agreement, releasing the Releasees from any and all
claims he may have against the Releasees, and that this Agreement constitutes a
release and discharge of claims arising under the Age Discrimination in
Employment Act of 1967, as amended, 29 U.S.C. §§ 621-634, including the Older
Workers’ Benefit Protection Act, 29 U.S.C. § 626(f).

 

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  D. He declares that his agreement to all of the terms set forth in this
Release is knowing and is voluntary.

 

  E. He knowingly and voluntarily intends to be legally bound by the terms of
this Release.

 

  F. He was advised and hereby is advised in writing to consult with an attorney
of his choice concerning the legal effect of this Release prior to executing
this Release.

 

  G. He understands that rights or claims that may arise after the date this
Agreement is executed are not waived.

 

  H. He understands that, in connection with the release of any claim of age
discrimination, he has a period of seven days to revoke his acceptance of this
Release, and that he may deliver notification of revocation by letter or
facsimile addressed to the General Counsel of the Company, at _____________, or
(            ) -___.____. Executive understands that this Agreement will not
become effective and binding with respect to a claim of age discrimination until
after the expiration of the revocation period. The revocation period commences
when Executive executes this Agreement and ends at 11:59 p.m. on the seventh
calendar day after execution, not counting the date on which Executive executes
this Agreement. Executive understands that if he does not deliver a notice of
revocation before the end of the seven-day period described above, that this
Agreement will become a final, binding and enforceable release of any claim of
age discrimination. This right of revocation shall not affect the release of any
claim other than a claim of age discrimination arising under federal law.

 

  I. He understands that nothing in this Agreement shall be construed to
prohibit Executive from filing a charge or complaint, including a challenge to
the validity of this Agreement, with the Equal Employment Opportunity Commission
or participating in any investigation or proceeding conducted by the Equal
Employment Opportunity Commission.

AGREED AND ACCEPTED, on this _____ day of ________________, _______.

 

    

 

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