Exhibit 10.1

 

Summary of Cubic Energy, Inc. Employee Separation Plan

 

The key terms of the Employee Separation Plan (the “Separation Plan”) of Cubic
Energy, Inc. (the “Company”) are:

 

·                  All employees of the Company are eligible to receive payments
pursuant to the Separation Plan, other than any employee otherwise entitled to
receive severance benefits pursuant to a then-effective employment agreement
with the Company.

 

·                  Payments under the Separation Plan would be made only if the
employee’s employment with the Company or its successors and assigns is
terminated without cause in connection with a change in control of the Company,
determined in accordance with the U.S. Treasury regulations promulgated under
Section 280G of the Internal Revenue Code (the “Code”); provided, however, in no
event shall any termination that occurs more than six months after any change in
control be deemed to have occurred in connection therewith.

 

·                  Larry Badgley, should he be entitled to receive a payment
pursuant to the Separation Plan, shall be entitled to receive a separation
payment equal to 100% of his base salary with the Company for the preceding
twelve months, and all other employees shall be entitled to receive a separation
payment equal to 50% of his or her base salary with the Company for the
preceding twelve months.  To the extent that any such employee’s term of service
with the Company is less than twelve months at the time of termination, the base
salary for such employee for purposes of the foregoing computation shall be
determined on an annualized basis.

 

·                  All payments under the Separation Plan are intended to be
made in such manner and at such time so that, to the extent practicable, paying
any amount would not cause the employee to incur an additional tax under
Section 409A of the Code; provided, however, that the Company shall not be
responsible in any manner for any such additional tax that is incurred.

 

·                  The Separation Plan shall not in any way alter any eligible
employee’s status as an employee “at will,” and the Company shall retain the
right to terminate any eligible employee at any time for any reason, or for no
reason.

 

·                  All payments under the Separation Plan are subject to all
required withholding obligations.

 

·                  All determinations under the Separation Plan, including
whether any termination is for “cause” or is “in connection with a change in
control,” shall be made by the Compensation Committee of the Company’s Board of
Directors.

 

·                  Unless extended by the Compensation Committee or the Board of
Directors, the Separation Plan will terminate if no change of control has
occurred by February 28, 2015.

 

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