EMPLOYMENT AGREEMENT
JONATHAN C. CURTH
This EMPLOYMENT AGREEMENT (this “Agreement”), dated as of January 22, 2019, is
by and between Vanguard Natural Resources, Inc. (“VNR”, together with its
subsidiaries, the “Company”) and Jonathan C. Curth (“Executive”).
WHEREAS, VNR and Executive previously entered into that certain Employment
Agreement, effective as of December 4, 2017 (the “Prior Agreement”); and
WHEREAS, the parties desire to amend and restate the Prior Agreement; and
WHEREAS, the parties desire to set forth in writing the terms and conditions of
their understandings and agreements in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein, VNR hereby agrees to employ Executive and Executive hereby
accepts such employment upon the terms and conditions set forth in this
Agreement:
1.Effectiveness; Employment Period.
(a)    This Agreement shall become effective and binding upon the Company and
the Executive at 12:00 a.m. prevailing Central Standard Time, on the date one
(1) day after the date on which the 2019 Bonus (as defined herein) has been paid
(the “Effective Date”).
(b)    Subject to Section 5, VNR hereby agrees to employ Executive, and
Executive hereby agrees to be employed by VNR, in accordance with the terms and
provisions of this Agreement, for the period commencing as of the Effective Date
and ending on December 31, 2020 (the “Employment Period”); provided, however,
that the Employment Period shall automatically be renewed and extended for an
additional period of twelve (12) months commencing on January 1, 2021 and
expiring on January 1, 2022, and on each successive January 1 thereafter, unless
at least ninety (90) days prior to the ensuing expiration date (but no more than
twelve (12) months prior to such expiration date), VNR or Executive shall have
given ninety (90) days written notice to the other that it or he, as applicable,
does not wish to extend this Agreement (a “Non-Renewal Notice”). The term
“Employment Period” as utilized in this Agreement, shall refer to the Employment
Period as so automatically extended.
(c)    During the term of Executive’s employment with VNR, Executive shall serve
as the General Counsel, Corporate Secretary and Vice President of Land of VNR
and in so doing, shall report to the President and Chief Executive Officer of
the Company (the “CEO”) and the Board of Directors of the Company (the “Board”).
Executive shall have supervision and control over, and responsibility for, such
management, operational and legal functions of the Company currently assigned to
such positions, and shall have such other powers and duties (including holding
officer positions with VNR and one or more subsidiaries of VNR) as may from time
to time be

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prescribed by the CEO or the Board, so long as such powers and duties are
reasonable and customary for the General Counsel, Corporate Secretary and Vice
President of Land of an enterprise comparable to the Company.
(d)    During the term of Executive’s employment with VNR, and excluding any
periods of vacation and sick leave to which Executive is entitled, Executive
agrees to devote substantially all of his business time to the business and
affairs of VNR and, to the extent necessary to discharge the responsibilities
assigned to Executive hereunder or by the CEO or Board hereafter, to use
Executive’s reasonable best efforts to perform faithfully, effectively and
efficiently such responsibilities. During the term of Executive’s employment
with VNR, it shall not be a violation of this Agreement for Executive to
(i) serve on corporate, civic or charitable boards or committees, provided that
service on any corporate board or committee shall be subject to the prior
approval of the Board, which shall not be unreasonably withheld, (ii) deliver
lectures or fulfill speaking engagements, and (iii) manage personal investments,
so long as such activities do not materially interfere with the performance of
Executive’s responsibilities as an employee of the Company in accordance with
this Agreement.
(e)    The parties expressly acknowledge that any performance of Executive’s
responsibilities hereunder shall necessitate, and the Company shall provide,
access to or the disclosure of Confidential Information (as defined in
Section 9(a) below) to Executive and that Executive’s responsibilities shall
include the development of the Company’s goodwill through Executive’s contacts
with the Company’s customers and suppliers.
2.    Compensation.
(a)    Base Salary. VNR shall pay Executive an annual base salary (“Base
Salary”) at the rate of $380,000 for the period commencing on the Effective
Date. The Board shall review Executive’s Base Salary at least annually and may
at its discretion elect to increase Executive’s Base Salary at any time if they
deem an increase is warranted. Subject to Section 5(c)(ii) hereof, the Board may
not decrease Executive’s annual Base Salary without his prior written approval.
Base Salary shall be payable in accordance with the ordinary payroll practices
of VNR, but in no event shall the Base Salary be paid to Executive less
frequently than monthly. The term “Base Salary” as used in this Agreement shall
refer to the Base Salary as it may be so adjusted from time to time.
(b)    Annual Bonus. Executive shall be eligible to receive an annual cash bonus
(the “Annual Bonus”) in an amount to be determined by the Board or compensation
committee of the Board (“Committee”) based on performance goals established by
the Board or Committee, as applicable, on an annual basis, with Executive being
eligible to receive a target bonus equal to no less than eighty percent (80%)of
his Base Salary (“Target Bonus”). For the 2019 calendar year, Executive’s Annual
Bonus will be determined in accordance with Schedule 1 to this Agreement.
(c)    MIP Grants. Executive shall be eligible to participate in the Company’s
management incentive plan (“MIP”) in accordance with the terms thereof and as
determined by the Board.

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(d)    2019 Bonus. The Company will pay Executive a cash lump sum payment in the
amount of $380,000 (the “2019 Bonus”) on or before January 23, 2019. Executive
agrees that in the event Executive’s employment with the Company terminates for
any reason other than a Qualifying Termination before December 31, 2019 (the
“Completion Date”), Executive will be required to repay to the Company within
ten (10) days of such termination 100% of the After-Tax Value of the 2019 Bonus.
Notwithstanding anything to the contrary contained herein, in the event of
Executive’s Qualifying Termination before the Completion Date, Executive will
not be required to repay any portion of the 2019 Bonus. For purposes of this
Section 2(d), (i) “After-Tax Value of the 2019 Bonus” means the aggregate amount
of the 2019 Bonus net of any taxes withheld by the Company in respect of the
2019 Bonus and (ii) “Qualifying Termination” means the termination of
Executive’s employment (A) by the Company for a reason other than Cause, (B) by
Executive for Good Reason, or (C) due to Executive’s death or Disability.
3.    Employee Benefits.
(a)    During the Employment Period, VNR shall provide Executive with coverage
under all employee pension and welfare benefit programs, plans and practices,
which VNR makes available to its senior executives (including, without
limitation, participation in health, dental, group life, disability, retirement
and all other plans and fringe benefits to the extent generally provided to such
senior executives), commensurate with his position in the Company, to the extent
permitted under the employee benefit plan or program, and in accordance with the
terms of the program and/or plan.
(b)    Executive shall be entitled to vacation time in accordance with the
Company’s published vacation policy which currently provides Executive with
twenty five (25) business days paid vacation in each calendar year. Such
vacation time shall accrue at a rate of two (2) vacation days for each calendar
month worked; provided, however, that during any given calendar year, Executive
shall be able to take vacation days that will accrue during that calendar year,
even if such days have not yet accrued. A maximum of ten (10) business days of
accrued but unused vacation may be carried over from one calendar year to the
next.
(c)    Executive is authorized to incur reasonable expenses in carrying out his
duties and responsibilities under this Agreement and promoting the business of
the Company, including, without limitation, reasonable expenses for travel,
lodgings, entertainment and similar items related to such duties and
responsibilities. VNR will promptly reimburse Executive for all such expenses
upon presentation by Executive of appropriately itemized and approved
(consistent with VNR’s policy) accounts of such expenditures, in accordance with
the Company’s expense reimbursement policy; provided, however, that in no event
shall the expense reimbursement be made after the last day of the taxable year
following the year in which the expense was incurred by Executive, although in
the event that the reimbursement would constitute taxable income to Executive,
such reimbursements will be paid no later than March 15th of the calendar year
following the calendar year in which the expense was incurred. No reimbursement
or expenses eligible for reimbursement in any taxable year shall affect the
expenses eligible for reimbursement in any other taxable year, nor may the right
to receive a reimbursement of expenses be subject to liquidation or exchanged
for another benefit.

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4.    Termination in Connection with a Change of Control.
(a)    Definition of Change of Control. For purposes of this Agreement, a
“Change of Control” shall mean the occurrence of one or more of the following
events:
(i)    Any “person” or “group” within the meaning of those terms as used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended,
other than an affiliate of VNR, shall become the beneficial owner, by way of
merger consolidation, recapitalization, reorganization or otherwise, of fifty
percent (50%) or more of the combined voting power of the equity interests in
VNR;
(ii)    VNR’s shareholders approve, in one or a series of transactions, a plan
of complete liquidation of VNR; or
(iii)    The sale or other disposition by VNR of all or substantially all of its
assets in one or more transactions to any person other than an affiliate of VNR.
Notwithstanding the foregoing, (x) with respect to a payment that is subject to
section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), a
“Change of Control” shall mean a “change of control event” as defined in the
regulations and guidance issued under section 409A of the Code, and (y) a Change
of Control shall not be deemed to have occurred solely by virtue of the filing
of a voluntary petition by, or an involuntary petition against, the Company
under Chapter 11 of Title 11 of the U.S. Code, it being understood, however,
that the foregoing shall not apply to consummation of a plan of reorganization
or any other transactions or series of transactions pursuant to, arising from,
in connection with, or following, any such petition filing.
(b)    If, during the twelve (12) months immediately following the occurrence of
a Change of Control of VNR (the “Change of Control Period”), Executive is
terminated by the Company without Cause or resigns for Good Reason (as defined
below),   Executive will be entitled to receive (i) within ten (10) business
days after the Date of Termination (as defined below), his Accrued Compensation
and Reimbursements (as defined below) and (ii) on the 60th day following the
Date of Termination, a lump sum payment of an amount equaling two (2) times the
sum of his Base Salary and the Annual Bonus paid or payable with respect to the
calendar year preceding the year in which the Change of Control occurs (the
“Change of Control Payment”). Executive shall also receive (i) any Annual Bonus
for the year prior to the year in which the Date of Termination occurred that
was earned but not yet paid, which will be paid at the time annual bonuses are
paid to other senior management, but in no event later than March 15th of the
calendar year following the calendar year in which the Date of Termination
occurs (the “Earned but Unpaid Bonus”) and (ii) the Pro Rata Bonus (as defined
below). Notwithstanding the foregoing, in the event that Executive experiences a
termination under this Section 4(b) in calendar years 2019 or 2020, the Change
of Control Payment shall instead be equal to two (2) times the sum of
Executive’s Base Salary and Target Bonus. Solely for purposes of the Change of
Control Payment, Executive’s Base Salary (and Target Bonus, as applicable) shall
be valued as in effect at the time of the Change of Control. Treatment of any
awards under the MIP will be as provided under the terms and conditions of the
MIP and the applicable individual award agreement.

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5.    Termination of Employment.
(a)    Termination without Cause or Resignation by Executive for Other than Good
Reason. Unless otherwise specified in a separate provision of this Section 5,
either Executive or VNR, by action of the Board, may terminate this Agreement,
and Executive’s employment by VNR, for any reason after providing thirty
(30) days written notice to the non-terminating party. If Executive terminates
this Agreement pursuant to this provision for a reason other than Good Reason,
VNR will pay Executive within ten (10) business days after the Date of
Termination (as defined below) (i) all accrued but unpaid Base Salary, (ii) a
prorated amount of Executive’s Base Salary for accrued but unused vacation days,
and (iii) yet unpaid reimbursements for any reasonable and necessary business
expenses incurred by Executive prior to the Date of Termination in connection
with his duties hereunder (such amounts collectively, the “Accrued Compensation
and Reimbursements”). Upon termination by VNR of this Agreement pursuant to this
Section 5(a) without Cause (other than during a Change of Control Period, which
shall be governed by Section 4(b)) or upon the expiration of the Employment
Period due to the non-renewal of Executive’s employment pursuant to the terms of
a Non-Renewal Notice given by the Company under Section 1(b) of this Agreement,
VNR shall pay or provide to Executive the following: (A) within ten
(10) business days after the Date of Termination, the Accrued Compensation and
Reimbursements; (B) on the 60th day following the Date of Termination, a lump
sum payment (the “Severance Payment”) equal to the amount of Executive’s Base
Salary (at the rate in effect hereunder as of the Date of Termination) for
twenty four (24) months; (C) the Earned but Unpaid Bonus; and (D) a pro rata
Annual Bonus in respect of the number of months that Executive was employed by
the Company during the year in which the Date of Termination occurs, based on
actual performance and paid at the same time annual bonuses are paid to other
executives (but in no event later than March 15th of the calendar year following
the calendar year in which the Date of Termination occurs) (the “Pro Rata
Bonus”). Notwithstanding the foregoing, in the event that Executive experiences
a termination under this Section 5(a) in calendar year 2019, the Pro Rata Bonus
shall instead be determined in accordance with Schedule 1 to this Agreement.
Treatment of any awards under the MIP will be as provided under the terms and
conditions of the MIP and the applicable individual award agreement.
Notwithstanding any other provision of this Agreement, the non-renewal of
Executive’s employment pursuant to the terms of a Non-Renewal Notice given by
Executive under Section 1(b) of this Agreement shall not constitute a
termination of this Agreement entitling Executive to the Severance Payment under
this Section 5(a) or any Change of Control Payment under Section 4(b).
(b)    Termination for Cause. VNR, by action of the Board may terminate this
Agreement at any time for Cause. Upon termination by VNR for Cause, Executive
shall only be entitled to Accrued Compensation and Reimbursements, which amount
shall be paid within ten (10) business days after the Date of Termination. For
purposes hereof, “Cause” means any of the following:
(i)    Executive’s commission of theft, embezzlement, any other act of
dishonesty relating to his employment with VNR or any willful violation of any
law, rules or regulation applicable to the Company, including, but not limited
to, those laws, rules or

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regulations established by the Securities and Exchange Commission, or any
self-regulatory organization having jurisdiction or authority over Executive or
the Company; or
(ii)    Executive’s conviction of, or Executive’s plea of guilty or nolo
contendere to, any felony or of any other crime involving fraud, dishonesty or
moral turpitude; or
(iii)    A determination by the Board that Executive has materially breached
this Agreement (other than during any period of Disability, as defined below)
where such breach is not remedied within ten business (10) days after written
demand by the Board for substantial performance is actually received by
Executive which specifically identifies the manner in which the Board believes
Executive has so breached; or
(iv)    Executive’s willful failure to perform his reasonable and customary
duties as the General Counsel, Corporate Secretary and Vice President of Land of
VNR, which such failure is not remedied within ten business (10) days after
written demand by the Board for substantial performance is actually received by
Executive which specifically identifies the nature of such failure.
For purposes of the definition of Cause, no act or failure to act, on the part
of Executive, shall be considered “willful” unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive’s
action or omission was in, or not opposed to, the best interests of the Company.
Any act, or failure to act, based upon authority given by the Board or based
upon the advice of counsel for VNR shall be conclusively presumed to be done, or
omitted to be done, by Executive in good faith and in the best interests of the
Company. VNR, by action of the Board, may terminate Executive’s employment for
Cause only after: (i) providing written notice to Executive, which identifies
the Cause for Executive’s termination (which notice must be given within ninety
(90) days after the actual discovery of the act(s) or omission(s) constituting
such Cause) and (ii) Executive has been given an opportunity, together with his
counsel, to be heard by the Board at a time and location reasonably designated
by the Board.
(c)    Termination with Good Reason. Executive may terminate this Agreement for
Good Reason, and thereby resign his employment, after providing thirty
(30) days’ written notice to the Company of the act(s) or omission(s)
constituting Good Reason (which notice must be given within ninety (90) days
after the occurrence of such act(s) or omission(s) and describe the act(s) or
omission(s) in reasonable detail) if such act(s) or omission(s) is/are not cured
by the Company within thirty (30) days after Executive provides such written
notice. For purposes hereof, “Good Reason” means any of the following reasons
that occurs without Executive’s written consent:
(i)    A material reduction in Executive’s authority, duties, or
responsibilities; or
(ii)    A material reduction in Executive’s Base Salary, other than a reduction
affecting senior management similarly and in no event more than 10% from the
Base Salary in effect on the date hereof; or

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(iii)    Executive’s removal from his position as General Counsel, Corporate
Secretary and Vice President of Land of VNR, other than for Cause or by death or
Disability, during the Employment Period, to a position that is not at least
equivalent in authority and duties to General Counsel, Corporate Secretary and
Vice President of Land; or
(iv)    Relocation of Executive’s principal place of business to a location
fifty (50) or more miles from its location as of the Effective Date; or
(v)    A material breach by VNR of this Agreement, which materially and
adversely affects Executive; or
(vi)    VNR’s failure to make any material payment to Executive required to be
made under the terms of this Agreement.
Upon termination of this Agreement pursuant to this Section 5(c) (other than
during a Change of Control Period, which shall be governed by Section 4(b)), VNR
shall pay or provide to Executive the following: (i) within ten (10) business
days after the Date of Termination, his Accrued Compensation and Reimbursements,
(ii) on the 60th day following the Date of Termination, the Severance Payment,
the Earned but Unpaid Bonus and (iv) the Pro Rata Bonus (as modified by Schedule
1 if such termination occurs during calendar year 2019). Treatment of any awards
under the MIP will be as provided under the terms and conditions of the MIP and
the applicable individual award agreement. The parties agree that “Good Reason”
shall not exist solely by virtue of the filing of a voluntary petition by, or an
involuntary petition against, the Company under Chapter 11 of Title 11 of the
U.S. Code, it being understood, however, that the foregoing shall not apply to
consummation of a plan of reorganization or any other transactions or series of
transactions pursuant to, arising from, in connection with, or following, any
such petition filing.
(d)    Termination by Disability. VNR, by action of the Board, may terminate
this Agreement at any time if Executive shall be deemed in the reasonable
judgment of the Board to have sustained a “Disability.” Executive shall be
deemed to have sustained a Disability if and only if he shall have been unable
to substantially perform his duties as an employee of VNR as a result of
sickness or injury, and shall have remained unable to perform any such duties
for a period of more than 180 consecutive days in any twelve (12) month period.
Upon termination of this Agreement for Disability, Executive shall only be
entitled to (i) Accrued Compensation and Reimbursements, which amount shall be
paid within ten (10) business days after the Date of Termination, (ii) any other
amounts or benefits to which Executive may be entitled under a separate plan,
policy or program maintained by the Company, (iii) the Pro Rata Bonus (as
modified by Schedule 1 if such termination occurs during calendar year 2019),
and (iv) the Earned but Unpaid Bonus.
(e)    Termination by Death. This Agreement will terminate automatically upon
Executive’s death. Upon termination of this Agreement because of Executive’s
death, VNR shall pay or provide Executive’s estate with the following:
(i) Accrued Compensation and Reimbursements, which amount shall be paid within
ten (10) business days after the Date of Termination and (ii) any other amounts
or benefits to which Executive may be entitled under a separate plan, policy or
program maintained by the Company, (iii) the Pro Rata Bonus (as modified

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by Schedule 1 if such termination occurs during calendar year 2019), and (iv)
the Earned but Unpaid Bonus.
(f)    Date of Termination. As used in this Agreement, “Date of Termination”
means (i) if Executive’s employment is terminated by his death, the date of his
death; (ii) if Executive’s employment is terminated as a result of a Disability
or by VNR for Cause or without Cause, then the date specified in a notice
delivered to Executive by VNR of such termination, (iii) if Executive’s
employment is terminated by Executive for Good Reason, then the date specified
in the notice of such termination delivered to VNR by Executive, (iv) if
Executive’s employment terminates due to the giving of a Non-Renewal Notice, the
last day of the Employment Period, and (v) if Executive’s employment is
terminated for any other reason, the date specified therefore in the notice of
such termination.
6.    Employment.
Upon termination of this Agreement, Executive’s employment shall also terminate
and cease, and Executive shall be deemed to have voluntarily resigned from all
positions and the Board, if Executive is a member of the Board. Executive shall
confirm the foregoing resignation(s) by submitting to the Company written
confirmation of Executive’s resignation(s), and the Company’s obligations to pay
the Severance Payment or the Change of Control Payment shall be subject to the
Company’s receipt of such written confirmation.
7.    Mitigation.
Upon termination of this Agreement for any reason, amounts to be paid per the
express terms of this Agreement shall not be reduced whether or not Executive
obtains other employment.
8.    Release.
Notwithstanding any other provision in this Agreement to the contrary, as a
condition precedent to receiving any change of control or severance payments or
benefits set forth in Section 4 or 5 of this Agreement (other than the Accrued
Compensation and Reimbursements) in connection with any applicable termination
scenario, Executive agrees to execute (and not revoke) a customary severance and
release agreement, including a waiver of all claims, reasonably acceptable to
the Company (the “Release”), within the forty-five (45) day period immediately
following the Date of Termination. All revocation rights and timing restrictions
shall be set forth in such Release. If Executive fails to execute and deliver
the Release, or revokes the Release, Executive agrees that he shall not be
entitled to receive any severance payments or benefits set forth in Section 4
or 5 of this Agreement (other than the Accrued Compensation and Reimbursements)
in connection with any applicable termination scenario. For purposes of this
Agreement, the Release shall be considered to have been executed by Executive if
it is signed by his legal representative in the case of legal incompetence or on
behalf of Executive’s estate in the case of his death.
9.    Nondisclosure.

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(a)    It is understood that Executive during his tenure with the Company has
received and will continue to receive access to some or all of the Company’s
various trade secrets and confidential or proprietary information, including
information he has not received before, consisting of, but not limited to,
information relating to (i) business operations and methods, (ii) existing and
proposed investments and investment strategies, (iii) financial performance,
(iv) compensation arrangements and amounts (whether relating to the Company or
to any of its employees), (v) contractual relationships, (vi) business partners
and relationships, and (vii) marketing strategies (all of the forgoing,
“Confidential Information”). Confidential Information shall not include:
(A) information that Executive may furnish to third parties regarding his
obligations under this Section 9 and under Section 10 or (B) information that
(1) is general knowledge of Executive or information that becomes generally
available to the public by means other than Executive’s breach of this Section 9
(for example, not as a result of Executive’s unauthorized release of marketing
materials), (2) is in Executive’s possession, or becomes available to Executive,
on a non-confidential basis, from a source other than the Company or
(3) Executive is required by law, regulation, court order or discovery demand to
disclose; provided, however, that in the case of clause (3), Executive gives the
Company, to the extent permitted by law, reasonable notice prior to the
disclosure of the Confidential Information and the reasons and circumstances
surrounding such disclosure to provide the Company an opportunity to seek a
protective order or other appropriate request for confidential treatment of the
applicable Confidential Information.
(b)    Executive agrees that all Confidential Information, whether prepared by
Executive or otherwise coming into his possession, shall remain the exclusive
property of the Company during Executive’s employment with the Company.
Executive further agrees that Executive shall not, except for the benefit of the
Company pursuant to the exercise of his duties in accordance with this Agreement
or with the prior written consent of the Company, use or disclose to any third
party any of the Confidential Information described herein, directly or
indirectly, either during Executive’s employment with the Company or at any time
following the termination of Executive’s employment with the Company.
(c)    Upon termination of this Agreement, Executive agrees that all
Confidential Information and other files, documents, materials, records,
notebooks, customer lists, business proposals, contracts, agreements and other
repositories containing information concerning the Company or the business of
the Company (including all copies thereof) in Executive’s possession, custody or
control, whether prepared by Executive or others, shall remain with or be
returned to the Company as soon as practicable after the Date of Termination.
(d)    Nothing in this Agreement will preclude, prohibit or restrict Executive
from (i) communicating with, any federal, state or local administrative or
regulatory agency or authority, including but not limited to the Securities and
Exchange Commission (the “SEC”); (ii) participating or cooperating in any
investigation conducted by any governmental agency or authority; or (iii) filing
a charge of discrimination with the United States Equal Employment Opportunity
Commission or any other federal state or local administrative agency or
regulatory authority. Nothing in this Agreement, or any other agreement between
the parties, prohibits or is intended in any manner to prohibit, Executive from
(A) reporting a possible violation of federal or other applicable law or
regulation to any governmental agency or entity, including but not limited to
the Department of

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Justice, the SEC, the U.S. Congress, and any governmental agency Inspector
General, or (B) making other disclosures that are protected under whistleblower
provisions of federal law or regulation. This Agreement does not limit
Executive’s right to receive an award (including, without limitation, a monetary
reward) for information provided to the SEC. Executive does not need the prior
authorization of anyone at the Company to make any such reports or disclosures,
and Executive is not required to notify the Company that Executive has made such
reports or disclosures. Nothing in this Agreement or any other agreement or
policy of the Company is intended to interfere with or restrain the immunity
provided under 18 U.S.C. §1833(b). Executive cannot be held criminally or
civilly liable under any federal or state trade secret law for the disclosure of
a trade secret that is made (i) (A) in confidence to federal, state or local
government officials, directly or indirectly, or to an attorney, and (B) for the
purpose of reporting or investigating a suspected violation of law; (ii) in a
complaint or other document filed in a lawsuit or other proceeding, if filed
under seal; or (iii) in connection with a lawsuit alleging retaliation for
reporting a suspected violation of law, if filed under seal and does not
disclose the trade secret, except pursuant to a court order. The foregoing
provisions regarding protected disclosures are intended to comply with all
applicable laws. If any laws are adopted, amended or repealed after the
execution of this Agreement, this Section 9(d) shall be deemed to be amended to
reflect the same.
10.    Non-Competition and Non-solicitation.
(a)    As part of the consideration for the compensation and benefits to be paid
to Executive hereunder, to protect Confidential Information of the Company and
its customers and clients that have been and will be entrusted to Executive, the
business goodwill of the Company and its subsidiaries that will be developed in
and through Executive and the business opportunities that will be disclosed or
entrusted to Executive by the Company and its subsidiaries, and as an additional
incentive for the Company to enter into this Agreement, from the date hereof
through the first anniversary of the Date of Termination (the “Restricted
Period”), Executive will not (other than for the benefit of the Company pursuant
to this Agreement), directly or indirectly:
(i)    engage in, or carry on or assist, individually or as a principal, owner,
officer, director, employee, shareholder, consultant, contractor, partner,
member, joint venturer, agent, equity owner or in any other capacity whatsoever,
any (A) any business directly competitive with the business in which the Company
is engaged from time to time (“Competing Business”) or (B) Business Enterprise
(as defined below) that is otherwise directly competitive with the Company
within the states in which the Company conducts business;
(ii)    perform for any corporation, partnership, limited liability company,
sole proprietorship, joint venture or other business association or entity (a
“Business Enterprise”) engaged in any Competing Business any duty Executive has
performed for the Company that involved Executive’s access to, or knowledge or
application of, Confidential Information;
(iii)    induce or attempt to induce any customer, supplier, licensee or other
business relation of the Company to cease doing business with the Company or in
any way interfere with the relationship between any such customer, supplier,
licensee or business relation and the Company;

10

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(iv)    induce or attempt to induce any customer, supplier, licensee or other
business relation of the Company with whom Executive had direct business contact
in dealings during the Employment Period in the course of his employment with
the Company to cease doing business with the Company or in any way interfere
with the relationship between any such customer, supplier, licensee or business
relation and the Company; or
(v)    solicit with the purpose of hiring or hire any person who is or, within
180 days after such person ceased to be an employee of the Company, was an
employee of the Company.
(b)    Notwithstanding the duration of the restrictions set forth in
Section 10(a) above and subject to Section 10(e) below, the restrictions set
forth under Sections 10(a)(i) and (ii) shall expire after 180 days following the
Date of Termination, if Executive terminates this Agreement under Sections 5(c)
or 4(b) hereof or the Company terminates Executive’s employment without Cause
under Sections 5(a) or 4(b).
(c)    Notwithstanding the foregoing restrictions of this Section 10, nothing in
this Section 10 shall prohibit (i) any investment by Executive, directly or
indirectly, in securities which are issued by a Business Enterprise involved in
or conducting a Competing Business, provided that Executive, directly or
indirectly, does not own more than five percent (5%) of the outstanding equity
or voting securities of such Business Enterprise or (ii) Executive, directly or
indirectly, from owning any interest in any Business Enterprise which conducts a
Competing Business if such interest in such Business Enterprise is owned as of
the date of this Agreement and Executive does not have the right, in the case of
(i) or (ii), through the ownership of a voting interest or otherwise, to direct
the activities of or associated with the business of such Business Enterprise.
Further, the foregoing restrictions of this Section 10 will be limited to the
extent required to comply with applicable law, Rule 5.06(a) of the Texas
Disciplinary Rules of Professional Conduct, or other similar ethical or
professional rules or restrictions.
(d)    Executive acknowledges that each of the covenants of Section 10(a) are in
addition to, and shall not be construed as a limitation upon, any other covenant
provided in Section 10(a). Executive agrees that the geographic boundaries,
scope of prohibited activities, and time duration of each of the covenants set
forth in Section 10(a) are reasonable in nature and are no broader than are
necessary to maintain the confidentiality and the goodwill of the Company’s
proprietary and Confidential Information, plans and services and to protect the
other legitimate business interests of the Company, including without limitation
the goodwill developed by Executive with Company’s customers, suppliers,
licensees and business relations.
(e)    If, during any portion of the Restricted Period, Executive is not in
compliance with the terms of Section 10(a), the Company shall be entitled to,
among other remedies, compliance by Executive with the terms of Section 10(a)
for an additional period of time (i.e., in addition to the Restricted Period)
that shall equal the period(s) over which such noncompliance occurred.
(f)    The parties hereto intend that the covenants contained in Section 10(a)
be construed as a series of separate covenants, one for each defined province in
each geographic area in which Executive on behalf of the Company conducts
business. Except for geographic coverage,

11

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each such separate covenant shall be deemed identical in terms to the applicable
covenant contained in Section 10(a). Furthermore, each of the covenants in
Section 9(a) shall be deemed a separate and independent covenant, each being
enforceable irrespective of the enforceability (with or without reformation) of
the other covenants contained in Section 10(a).
11.    Notices.
All notices and other communications required or permitted to be given hereunder
shall be in writing and shall be deemed to have been duly given if delivered
personally, mailed by certified mail (return receipt requested) or sent by
overnight delivery service to the parties at the following addresses or at such
other addresses as shall be specified by the parties by like notice, in order of
preference of the recipient:
To VNR or the Company:    To Executive:
To the Secretary of VNR    At the most recent address on file
Notice so given shall, in the case of mail, be deemed to be given and received
on the fifth calendar day after posting, and in the case overnight delivery
service, on the date of actual delivery.
12.    Severability and Reformation.
If any one or more of the terms, provisions, covenants or restrictions of this
Agreement shall be determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions shall remain in full force and effect, and the
invalid, void or unenforceable provisions shall be deemed severable. Moreover,
if any one or more of the provisions contained in this Agreement shall for any
reason be held to be excessively broad as to duration, geographical scope,
activity or subject, it shall be reformed by limiting and reducing it to the
minimum extent necessary, so as to be enforceable to the extent compatible with
the applicable law as it shall then appear.
13.    Assignment.
This Agreement shall be binding upon and inure to the benefit of the heirs and
legal representatives of Executive and the permitted assigns and successors of
VNR, but neither this Agreement nor any rights or obligations hereunder shall be
assignable or otherwise subject to hypothecation by Executive without the
express written consent of VNR (except in the case of death by will or by
operation of the laws of intestate succession) or by VNR, except that VNR may
assign this Agreement to any successor (whether by merger, purchase or
otherwise) to all or substantially all of the stock assets or businesses of VNR,
if such successor expressly agrees to assume the obligations of VNR hereunder.
14.    Amendment.
This Agreement may be amended only by writing signed by both Executive and by a
duly authorized representative of VNR (other than Executive).
15.    Assistance in Litigation.

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Executive shall reasonably cooperate with the Company in the defense or
prosecution of any claims or actions now in existence or that may be brought in
the future against or on behalf of the Company that relate to events or
occurrences that transpired while Executive was employed by the Company.
Executive’s cooperation in connection with such claims or actions shall include,
but not be limited to, being available to meet with counsel to prepare for
discovery or trial and to act as a witness on behalf of the Company at mutually
convenient times. Executive also shall cooperate fully with the Company in
connection with any investigation or review by any Federal, state, or local
regulatory authority as any such investigation or review relates, to events or
occurrences that transpired while Executive was employed by the Company. The
Company will pay Executive an agreed upon reasonable hourly rate for Executive’s
cooperation pursuant to this Section 15.
16.    Beneficiaries; References.
Executive shall be entitled to select (and change, to the extent permitted under
any applicable law) a beneficiary or beneficiaries to receive any compensation
or benefit payable hereunder following Executive’s death, and may change such
election, in either case by giving the Company written notice thereof. In the
event of Executive’s death or a judicial determination of his incompetence,
reference in this Agreement to Executive shall be deemed, where appropriate, to
refer to his beneficiary, estate or other legal representative. Any reference to
the masculine gender in this Agreement shall include, where appropriate, the
feminine.
17.    Use of Name, Likeness and Biography.
The Company shall have the right (but not the obligation) to use, publish and
broadcast, and to authorize others to do so, the name, approved likeness and
approved biographical material of Executive to advertise, publicize and promote
the business of the Company and its affiliates, but not for the purposes of
direct endorsement without Executive’s consent. This right shall terminate upon
the termination of this Agreement. An “approved likeness” and “approved
biographical material” shall be, respectively, any photograph or other depiction
of Executive, or any biographical information or life story concerning the
professional career of Executive.
18.    Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED AND GOVERNED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE TO RULES RELATING TO CONFLICTS
OF LAW.
19.    Entire Agreement.
This Agreement contains the entire understanding between the parties hereto with
respect to the subject matter hereof and supersedes in all respects any prior or
other agreement (including the Prior Agreement) or understanding, written or
oral, between the Company or any affiliate of the Company and Executive with
respect to such subject matter.
20.    Withholding.

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The Company shall be entitled to withhold from payment to Executive of any
amount of withholding required by law.
21.    Counterparts.
This Agreement may be executed in two or more counterparts, each of which will
be deemed an original.
22.    Remedies.
The parties recognize and affirm that in the event of a breach of Sections 9
or 10 of this Agreement, money damages would be inadequate and VNR would not
have an adequate remedy at law. Accordingly, the parties agree that in the event
of a breach or a threatened breach of Sections 9 or 10, VNR may, in addition and
supplementary to other rights and remedies existing in its favor, apply to any
court of law or equity of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce or prevent any violations of the
provisions hereof (without posting a bond or other security). In addition,
Executive agrees that in the event a court of competent jurisdiction or an
arbitrator finds that Executive violated Section 9 or 10, the time periods set
forth in those Sections shall be tolled until such breach or violation has been
cured. Executive further agrees that VNR shall have the right to offset the
amount of any damages resulting from a breach by Executive of Section 9 or 10
against any payments due Executive under this Agreement. The parties agree that
if one of the parties is found to have breached this Agreement by a court of
competent jurisdiction or arbitrator, the breaching party will be required to
pay the non-breaching party’s attorneys’ fees reasonably incurred in prosecuting
the non-breaching party’s claim of breach.
23.    Non-Waiver.
The failure by either party to insist upon the performance of any one or more
terms, covenants or conditions of this Agreement shall not be construed as a
waiver or relinquishment of any right granted hereunder or of any future
performance of any such term, covenant or condition, and the obligation of
either party with respect hereto shall continue in full force and effect, unless
such waiver shall be in writing signed by VNR (other than Executive) and
Executive.
24.    Announcement.
The Company shall have the right to make public announcements concerning the
execution of this Agreement and the terms contained herein, at the Company’s
discretion.
25.    Construction.
The headings and captions of this Agreement are provided for convenience only
and are intended to have no effect in construing or interpreting this Agreement.
The language in all parts of this Agreement shall be in all cases construed in
accordance to its fair meaning and not strictly for or against the Company or
Executive.
26.    Right to Insure.

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The Company shall have the right to secure, in its own name or otherwise, and at
its own expense, life, health, accident or other insurance covering Executive,
and Executive shall have no right, title or interest in and to such insurance.
Executive shall assist the Company in procuring such insurance by submitting to
examinations and by signing such applications and other instruments as may be
required by the insurance carriers to which application is made for any such
insurance.
27.    No Inconsistent Obligations.
Executive represents and warrants that to his knowledge he has no obligations,
legal, in contract, or otherwise, inconsistent with the terms of this Agreement
or with his undertaking employment with the Company to perform the duties
described herein. Executive will not disclose to the Company, or use, or induce
the Company to use, any confidential, proprietary, or trade secret information
of others. Executive represents and warrants that to his knowledge he has
returned all property and confidential information belonging to all prior
employers, if he is obligated to do so.
28.    Binding Agreement.
This Agreement shall inure to the benefit of and be binding upon Executive, his
heirs and personal representatives, and the Company, its successors and assigns.
29.    Voluntary Agreement.
Each party to this Agreement has read and fully understands the terms and
provisions hereof, has had an opportunity to review this Agreement with legal
counsel, has executed this Agreement based upon such party’s own judgment and
advice of counsel (if any), and knowingly, voluntarily, and without duress,
agrees to all of the terms set forth in this Agreement. The parties have
participated jointly in the negotiation and drafting of this Agreement. If an
ambiguity or question of intent or interpretation arises, this Agreement will be
construed as if drafted jointly by the parties and no presumption or burden of
proof will arise favoring or disfavoring any party because of authorship of any
provision of this Agreement. Except as expressly set forth in this Agreement,
neither the parties nor their affiliates, advisors and/or their attorneys have
made any representation or warranty, express or implied, at law or in equity
with respect of the subject matter contained herein. Without limiting the
generality of the previous sentence, the Companies, their affiliates, advisors,
and/or attorneys have made no representation or warranty to Executive concerning
the state or Federal tax consequences to Executive regarding the transactions
contemplated by this Agreement.
30.    Section 409A of the Code.
This Agreement is intended to comply with Section 409A of the Code, and the
Treasury regulations and other interpretive guidance issued thereunder
(collectively, “Section 409A”), or to be treated as exempt therefrom, and shall
be construed and administered in accordance with such intent. Any payments under
this Agreement that may be excluded from Section 409A either as separation pay
due to an involuntary separation from service, as a short-term deferral, or as
any other compensation that is otherwise exempt from Section 409A shall be
excluded from Section 409A to the maximum extent possible. Any payments to be
made under this Agreement

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upon a termination of Executive’s employment that are subject to Section 409A
shall only be made if such termination of employment constitutes a “separation
from service” under Section 409A. Notwithstanding any provision in this
Agreement to the contrary, if any payment or benefit provided for herein would
be subject to additional taxes and interest under Section 409A if Executive’s
receipt of such payment or benefit is not delayed until the earlier of (i) the
date of Executive’s death or (ii) the date that is six months after the Date of
Termination of Executive’s employment hereunder (such date, the “Section 409A
Payment Date”), then such payment or benefit shall not be provided to Executive
(or Executive’s estate, if applicable) until the Section 409A Payment Date. Each
payment under this Agreement is intended to be a “separate payment” and not one
of a series of payments for purposes of Section 409A. Notwithstanding the
foregoing, the Company does not guarantee any particular tax effect, and
Executive shall be solely responsible and liable for the satisfaction of all
taxes, penalties and interest that may be imposed on or for the account of
Executive in connection with the Agreement (including any taxes, penalties and
interest under Section 409A), and neither the Company, nor any of its
affiliates, shall have any obligation to indemnify or otherwise hold Executive
(or any beneficiary) harmless from any or all of such taxes, penalties or
interest.
1.    Section 280G
Notwithstanding any other provisions in this Agreement, in the event that any
payment or benefit received or to be received by Executive (including, without
limitation, any payment or benefit received in connection with a Change of
Control of the Company or the termination of Executive’s employment, whether
pursuant to the terms of this Agreement or any other plan, program, arrangement
or agreement) (all such payments and benefits, together, the “Total Payments”)
would be subject (in whole or part), to any excise tax imposed under
Section 4999 of the Code, or any successor provision thereto (the “Excise Tax”),
then, after taking into account any reduction in the Total Payments provided by
reason of Section 280G of the Code in such other plan, program, arrangement or
agreement, the Company will reduce the Total Payments to the extent necessary so
that no portion of the Total Payments is subject to the Excise Tax (but in no
event to less than zero); provided, however, that the Total Payments will be
reduced only if (a) the net amount of such Total Payments, as so reduced (and
after subtracting the net amount of federal, state, municipal and local income
and employment taxes on such reduced Total Payments and after taking into
account the phase out of itemized deductions and personal exemptions
attributable to such reduced Total Payments), is greater than or equal to
(b) the net amount of such Total Payments without such reduction (but after
subtracting the net amount of federal, state, municipal and local income and
employment taxes on such Total Payments and the amount of Excise Tax to which
Executive would be subject in respect of such unreduced Total Payments and after
taking into account the phase out of itemized deductions and personal exemptions
attributable to such unreduced Total Payments).
In the case of a reduction in the Total Payments, the Total Payments will be
reduced in the following order: (1) payments that are payable in cash that are
valued at full value under Treasury Regulation Section 1.280G-l, Q&A24(a) will
be reduced (if necessary, to zero ), with amounts that are payable last reduced
first; (2) payments and benefits due in respect of any equity valued at full
value under Treasury Regulation Section 1.280G-1, Q&A24(a), with the highest
values reduced first (as such values are determined under Treasury
Regulation Section 1.280G-1, Q&A 24), will

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next be reduced; (3) payments that are payable in cash that are valued at less
than full value under Treasury Regulation Section l .280G-1, Q&A 24, with
amounts that are payable last reduced first, will next be reduced; ( 4) payments
and benefits due in respect of any equity valued at less than full value under
Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced
first (as such values are determined under Treasury Regulation Section 1.280G-l,
Q&A 24), will next be reduced; and (5) all other non-cash benefits not otherwise
described in clause (2) or (4) will be next reduced pro-rata. Any reductions
made pursuant to each of clauses (1) through (4) above will be made in the
following manner: first, a pro-rata reduction of cash payment and payments and
benefits due in respect of any equity not subject to Section 409A of the Code,
and second, a pro-rata reduction of cash payments and payments and benefits due
in respect of any equity subject to Section 409A of the Code as deferred
compensation.
For purposes of determining whether and the extent to which the Total Payments
will be subject to the Excise Tax: (A) no portion of the Total Payments the
receipt or enjoyment of which Executive shall have waived at such time and in
such manner as not to constitute a “payment” within the meaning of
Section 280G(b) of the Code will be taken into account; (B) no portion of the
Total Payments will be taken into account that, in the opinion of the Company,
does not constitute a “parachute payment” within the meaning of
Section 280G(b)(2) of the Code (including, without limitation, by reason of
Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no
portion of such Total Payments will be taken into account that, in the opinion
of the Company, constitutes reasonable compensation for services actually
rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of
the “base amount” (as set forth in Section 280G(b)(3) of the Code) that is
allocable to such reasonable compensation; and (C) the value of any non-cash
benefit or any deferred payment or benefit included in the Total Payments will
be determined by the Company in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.

2.    Indemnification
VNR will defend and indemnify Executive as provided in VNR’s Bylaws and
Certificate of Incorporation in effect on the date hereof, and to the maximum
extent permitted pursuant to applicable law. The obligations under this section
shall survive termination of Executive’s employment or this Agreement. During
the Employment Period and thereafter (with respect to events occurring during
the Employment Period), VNR will maintain and provide Executive with coverage
under its directors’ and officers’ liability policy to the same extent that it
provides such coverage to its other officers and directors.

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IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
on the dates below
EXECUTIVE
/s/ Jonathan C. Curth    
Jonathan C. Curth
Date: January 22, 2019
VANGUARD NATURAL RESOURCES, INC.
By:     /s/ R. Scott Sloan    
R. Scott Sloan, President and CEO
Date: January 22, 2019

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Schedule 1 – 2019 Annual Bonus
1.Definitions. Any capitalized term used in this Schedule 1 that is not
otherwise defined in this Schedule 1 shall have the meaning set forth in the
Employment Agreement.

“Good Leaver” means Executive if his employment with the Company is terminated
by the Company for a reason other than Cause, is terminated by Executive for
Good Reason or is terminated due to Executive’s death or Disability.
“Performance Goals” means the Performance Metrics established by the Board for
the Board, that will consist of (i) Quarterly Threshold Performance Goals, (ii)
Quarterly Target Performance Goals, and (iii) Quarterly Maximum Performance
Goals, collectively, the “Quarterly Performance Goals”. For purposes of catch-up
payments described in Section 2(b) below, “Performance Goals” will consist of
(i) Cumulative Threshold Performance Goals; (ii) Cumulative Target Performance
Goals; and (iii) Cumulative Maximum Performance Goals, collectively, the
“Cumulative Performance Goals” of applicable Performance Metrics.
“Performance Metric” means the specific performance criteria used in determining
Performance Goals for the Performance Period; provided that each Performance
Metric shall be adjusted on a pro forma basis (i) to take into account any
acquisitions or dispositions consummated during the Performance Period, (ii) to
the extent relevant, to exclude costs and benefits associated with the Company’s
potential or actual Restructuring and (iii) to take into account material
changes in the Company’s business plan that have been approved by the Board.
“Performance Period” means each successive calendar quarter commencing during
2019.
“Quarterly Bonus” shall mean the bonus payment payable to Executive under this
Schedule 1 for the applicable Performance Period.
“Restructuring” means (i) any potential or actual restructuring, reorganization
settlement and/or recapitalization of any or all of the Company’s outstanding
indebtedness or other obligations, (ii) any potential or actual transaction or
series of transactions involving an acquisition, merger, consolidation, or other
business combination pursuant to which the business or assets of the Company
are, directly or indirectly, combined with another company, or (iii) any other
potential or actual purchase or acquisition, directly or indirectly, by a buyer
or buyers of significant assets, securities or other interests of the Company.

“Target Bonus” means Executive’s target incentive for each Performance Period,
which is equal to $76,000 per Performance Period ($304,000/year).
2.    Terms of 2019 Annual Bonus.Single Quarter Measurement. Subject to the
provisions of this Schedule 1, Executive shall earn a Quarterly Bonus as of the
end of each Performance Period,

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depending upon the extent to which the Performance Goals have been achieved for
such Performance Period.
a.    Cumulative Measurement. In addition to being measured on a quarterly
basis, each Performance Metric shall be measured cumulatively as of the end of
the second Performance Period and each Performance Period thereafter (a
“Relevant Performance Period”). A “catch-up” payment will be made to the extent
the Company equals or exceeds the Cumulative Performance Goals/Metrics for the
applicable Performance Period. The amount of the catch-up payment will be equal
to the excess of (i) the aggregate Quarterly Bonus payable for such Relevant
Performance Period based on the achievement of the applicable Cumulative
Performance Goals for such Relevant Period over (ii) the aggregate amount of
Quarterly Bonuses previously paid to Executive and the amount payable to
Executive under Section 2(a) above for the Relevant Performance Period.
b.    Performance Goals. Section 3 below sets forth the (i) relevant Performance
Goals for each Performance Period and (ii) the percentage of Executive’s
Quarterly Bonus amount payable upon the achievement of the applicable
Performance Goals. The amount of Executive’s Quarterly Bonus for Executive shall
be based on the (i) Executive’s Target Bonus and (ii) the level of achievement
of the applicable Performance Metrics for a particular Performance Period.
Except as otherwise may be provided by the Board, in its sole discretion, no
Quarterly Bonus shall be payable for a Performance Metric unless the Quarterly
Threshold Performance Goals for such Performance Metric are achieved.
c.    Continued Employment. Except as set forth below, (i) to earn a Quarterly
Bonus for any Performance Period, Executive must remain employed by the Company
through the end of such Performance Period and (ii) Executive shall forfeit the
right to any Quarterly Bonus for a Performance Period if his employment with the
Company terminates for any reason prior to the end of such Performance Period.
Notwithstanding the foregoing, if Executive becomes a Good Leaver during a
Performance Period, he shall be entitled to a pro rata portion (based on the
percentage of the Performance Period Executive was engaged by the Company) of
the Quarterly Bonus that would otherwise have been earned for such Performance
Period.
d.    Performance Certification. Promptly after the end of each Performance
Period and as soon as quarterly financials are estimable, the Board shall
certify the degree to which the applicable Performance Goals have been achieved
and the amount of Quarterly Bonus payable to Executive hereunder. Any Quarterly
Bonus required to be made under this Schedule 1 shall be paid in cash on a
fully-vested basis by the Company as soon as possible after the end of the
applicable Performance Period, but in any event not later than 30 days after the
end of the Performance Period.
e.    Supplemental Bonus Payment. Executive may earn a supplemental bonus
payment in an amount equal to 10% of Executive’s Base Salary (the “Supplemental
Bonus”) if the Company obtains on or before December 31, 2019 additional third
party debt or equity financing if at least $5 million of such financing is not
required to be used to repay existing debt of the Company (the “Condition”).
Executive must be employed on the date the Condition is achieved to be entitled
to receive the Supplemental Bonus. Any Supplemental Bonus will be paid in cash
within 15 days of the date the Condition is achieved.

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3.    Performance Metrics. This Section 3 sets for the percentage of Executive’s
Target Bonus that will be earned based on the achievement of the Performance
Goals set forth below.
Performance Metrics and Goals
1.    Payable if Quarterly Threshold Performance Metric Achieved:
50% of the Applicable Portion of Executive’s Target Bonus
2.    Payable if Quarterly Target Performance Metric Achieved:
100% of the Applicable Portion of Executive’s Target Bonus
3.    Payable if Quarterly Maximum Performance Metric Achieved:
200% of the Applicable Portion of Executive’s Target Bonus
4.    Payable if Cumulative Quarterly Threshold Performance Metric Achieved:*
50% of the Applicable Portion of Executive’s aggregate Target Bonus through the
end of the Applicable Performance Period
5.    Payable if Cumulative Quarterly Target Performance Metric Achieved:*
100% of the Applicable Portion of Executive’s aggregate Target Bonus through the
end of the Applicable Performance Period
6.    Payable if Cumulative Quarterly Maximum Performance Metric Achieved:*
200% of the Applicable Portion of Executive’s aggregate Target Bonus through the
end of the Applicable Performance Period
7.    Portion of Applicable Portion Payable if Achievement is Between
Performance Metrics:
Calculated on the basis of straight-line interpolation
8.    Overall Payment Cap
Bonus payments will be capped as follows: In no event shall Executive’s total
Bonus for a Quarter that is based on achieving a Quarterly Performance Metric
exceed 150% of Executive’s Target Bonus for that Quarter (“Limit 1”) and in no
event shall Executive’s Bonus for a Quarter that is based on achieving a
Cumulative Performance Metric exceed 150% of Executive’s aggregate Target Bonus
through the end of such Quarter (“Limit 2” and, along with Limit 1, the
“Limits”). Notwithstanding the foregoing, a Bonus payment shall be made to the
extent it satisfies either Limit 1 or Limit 2. If Limit 1 or Limit 2 is
exceeded, the amounts allocated to each performance metric shall be reduced on a
pro rata basis for purposes of determining the amounts payable in subsequent
Quarters. The Limits will be applied solely to the Bonuses paid under Section
2(a)-(e) and will not take into account any Supplemental Bonus.

*
As set forth in Section 2(b), payments for achieving Cumulative Performance
Metrics reduced by amounts paid or payable for current and previous Quarters.

(i)
Performance Metric: Operated Production (mmscfe)

Applicable Portion of Target Bonus:    25%

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Performance Period:
First Performance Period
Second Performance Period
Third Performance Period
Fourth Performance Period
Quarterly Threshold Performance Goal
13,644
13,478
13,303
12,963
Quarterly Target Performance Goal
14,830
14,650
14,460
14,090
Quarterly Maximum Performance Goal
16,016
15,822
15,617
15,217
 
 
 
 
 
Cumulative Threshold Performance Goal
N/A
27,122
40,425
53,388
Cumulative Target Performance Goal
N/A
29,480
43,940
58,030
Cumulative Maximum Performance Goal
N/A
31,838
47,455
62,672

(ii)
Performance Metric: Operated LOE ($/mscfe)

Applicable Portion of Target Bonus:    25%
Performance Period:
First Performance Period
Second Performance Period
Third Performance Period
Fourth Performance Period
Quarterly Threshold Performance Goal
1.41
1.51
1.43
1.39
Quarterly Target Performance Goal
1.27
1.36
1.29
1.25
Quarterly Maximum Performance Goal
1.13
1.21
1.15
1.11
 
 
 
 
 
Cumulative Threshold Performance Goal
N/A
1.46
1.45
1.44
Cumulative Target Performance Goal
N/A
1.31
1.31
1.29
Cumulative Maximum Performance Goal
N/A
1.17
1.16
1.15

(iii)
Performance Metric: Cash G&A ($ thousands)

Applicable Portion of Target Bonus:    25%

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Performance Period:
First Performance Period
Second Performance Period
Third Performance Period
Fourth Performance Period
Quarterly Threshold Performance Goal
12,460
11,890
11,582
11,799
Quarterly Target Performance Goal
10,930
10,430
10,160
10,350
Quarterly Maximum Performance Goal
9,400
8,970
8,738
8,901
 
 
 
 
 
Cumulative Threshold Performance Goal
N/A
24,350
35,933
47,732
Cumulative Target Performance Goal
N/A
21,360
31,520
41,870
Cumulative Maximum Performance Goal
N/A
18,370
27,107
36,008

(iv)
Performance Metric: Carnrite Cash Flow Improvements ($ thousands)

Applicable Portion of Target Bonus:    25%
Performance Period:
First Performance Period
Second Performance Period
Third Performance Period
Fourth Performance Period
Quarterly Threshold Performance Goal
0
1,840
2,040
2,300
Quarterly Target Performance Goal
0
2,300
2,550
2,875
Quarterly Maximum Performance Goal
0
2,760
3,060
3,450
 
 
 
 
 
Cumulative Threshold Performance Goal
N/A
1,840
3,880
6,180
Cumulative Target Performance Goal
N/A
2,300
4,850
7,725
Cumulative Maximum Performance Goal
N/A
2,760
5,820
9,270

Definitions.
“Cash G&A” means the Company’s general and administrative expenses related to
the Company’s day-to-day business that are funded from the Company’s cash,
excluding, without limitation, severance payments.
“Carnrite Cash Flow Improvements” means increases in the Company’s net cash flow
resulting from lower costs, increased production and/or better pricing designed
by and implemented by the Carnrite Consulting Group.

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