EMPLOYMENT AGREEMENT
 
This EMPLOYMENT AGREEMENT (this “Agreement”) is hereby entered into on December
17, 2019, between Lilis Energy, Inc. (the “Company”) and Joseph Daches
(“Executive”).  This Agreement shall be effective as of January 1, 2020 (the
“Effective Date”). Executive and the Company are each referred to individually
as as “Party” and collectively as the “Parties.”
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
1.
Employment. The Company shall employ Executive, and Executive hereby accepts
employment with the Company, upon the terms and conditions set forth in this
Agreement. The period in which Executive is employed by the Company is referred
to herein as the “Employment Period.” The effective date on which Executive’s
Employment Period ends for any reason or no reason is referred to herein as the
“Termination Date.”

2.
Term. Subject to earlier termination as provided herein, the Company hereby
agrees to continue Executive in its employ, and Executive hereby agrees to
remain in the employ of the Company, for the term of this Agreement. The initial
term of Executive’s employment under this Agreement shall be for the period
beginning on the Effective Date and ending on the second anniversary of the
Effective Date (the “Initial Period”); provided, however, that upon the
expiration of the Initial Period and on each subsequent anniversary of the
Effective Date thereafter, the term of Executive’s employment under this
Agreement shall automatically renew and extend for an additional one-year period
(each period, a “Renewal Period”) unless, on or before the date that is one
hundred eighty (180) days prior to the expiration of the then-applicable Initial
Period or Renewal Period, either Party provides the other Party with written
notice of non-renewal, in which case the term of this Agreement shall expire
upon the expiration of the then-existing Initial Period or Renewal Period
(unless earlier terminated pursuant to Section 5 below). Notwithstanding any
provision of this Agreement to the contrary, Executive's employment pursuant to
this Agreement may be terminated at any time in accordance with Section 5 below.

3.
Position and Duties.

(a)
During the term of Executive’s employment with the Company under this Agreement,
Executive will serve as the Chief Executive Officer of the Company and Executive
will report directly to the Company’s Board of Directors (the “Board”).   

(b)
Executive shall have such responsibilities, duties and authorities, and will
render such services for the Company and its subsidiaries or affiliates, as the
Board may reasonably request from time to time.  During the Employment Period,
Executive will devote substantially all of Executive’s business time, energy and
efforts to Executive’s obligations hereunder and to the affairs of the Company;
provided that

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the foregoing shall not prevent Executive from (i) participating in charitable,
civic, educational, professional, community or industry affairs or serving on
the board of up to two for-profit companies, and (ii) managing Executive’s
passive personal investments, in each case, so long as such activities,
individually or in the aggregate, do not materially interfere with Executive’s
duties hereunder or create a potential business conflict.
4.
Compensation and Benefits.

(a)
Base Salary.  During the Employment Period, Executive’s base salary shall be not
less than $515,000 per annum. Said base salary shall be payable by the Company
to Executive in regular installments in accordance with the Company’s general
payroll practices, less taxes and other applicable withholdings, and subject to
review and adjustment from time to time by the Board or the Compensation
Committee thereof (the “Committee”), in either case, in its discretion (as
modified from time to time, the “Base Salary”).

(b)
Annual Bonus.  After each fiscal year during the Employment Period, Executive
shall be eligible to receive an annual incentive payment (the “Annual Bonus”),
based on a percent of Executive’s then-current Base Salary, which may be
adjusted from time to time by the Board in its sole discretion, with the actual
Annual Bonus amount calculated based upon the attainment of one or more
performance-based objectives established by the Board or the Committee in its
sole discretion.  The initial target annual bonus opportunity will be not less
than 100% of salary. The Annual Bonus shall furthermore be subject to the terms
and conditions of the annual bonus plan as determined and approved by the Board
or Committee each year and any claw back, recoupment or forfeiture policies
adopted by the Board under which bonuses are generally payable to senior
executives of the Company, and which are in effect during the then current
Initial Period or Renewal Period, and except as otherwise set forth in Section 5
below, the Annual Bonus shall be paid to Executive at the same time as annual
bonuses are generally payable to other senior executives of the Company, but in
all events no later than March 15th of the year following the year in which the
Annual Bonus is earned.  

(c)
Equity Awards.  During the Employment Period, Executive shall be eligible to
receive grants of equity-based awards as determined by the Committee and the
Board in their sole discretion. With respect to the annual grant during the
Employment Period, the Company will grant Executive a number of restricted stock
units equal to (i) 200% of Base Salary divided by (ii) the closing price of a
share of Company common stock on the NYSE American exchange on the last trading
date prior to the grant date, rounded down to the nearest whole number. Equity
awards will be governed by the terms of the Company’s 2016 Omnibus Incentive
Plan or successor Omnibus Incentive Plan (as such plan may be amended, restated
or replaced from time to time) (the “Omnibus Incentive Plan”).

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(d)
Employee Benefits. During the Employment Period, Executive shall be entitled to
participate in all of the Company’s benefit programs for which employees of the
Company are generally eligible, including insurance and health benefits, subject
to the eligibility and participation requirements thereof. Executive recognizes
that the Company reserves the right to change its benefits from time to time and
the Company’s right to make such changes shall not be restricted by this
Agreement.

(e)
Vacation.  Executive shall be entitled to accrue and be paid for vacation (which
may be taken at such time and in such increments as Executive may choose) on the
same basis as other senior executives of the Company.

(f)
Reimbursement for Business Expenses.  During the Employment Period, the Company
shall reimburse Executive for all reasonable out-of-pocket expenses incurred by
him in the course of performing his duties and responsibilities under this
Agreement which are on the same basis as similarly situated employees generally
and consistent with the Company’s policies in effect from time to time with
respect to travel, entertainment and other business expenses, subject to the
Company’s requirements with respect to reporting and documentation of such
expenses.  

(g)
Withholding. The Company may withhold from any and all amounts payable to
Executive hereunder such federal, state and local taxes as may be required to be
withheld pursuant to any applicable law or regulation.

5.
Termination. The rights of Executive upon termination shall be governed solely
by terms of this Agreement, and specifically by the terms of this Section 5.

(a)
Definitions. For purposes of this Section 5, the words and phrases below have
the following definitions:

(i)
“Cause” shall mean (1) Executive’s conviction, whether following trial or by
plea of guilty or nolo contendere (or similar plea), in a criminal proceeding
(A) on a charge of any crime involving fraud, embezzlement, bribery, forgery,
counterfeiting, extortion, dishonesty, or misappropriation; or (B) on any felony
or any crime involving moral turpitude; (2) any act or omission by Executive
involving dishonesty, disloyalty, or fraud with respect to the Company or a
breach of fiduciary duty to the Company; (3) Executive’s substantial, willful,
or repeated disregard of the lawful, material and reasonable directives of the
Board clearly communicated in writing to Executive, provided that if such
disregard is capable of remedy, Executive shall have thirty (30) days from
receipt of written notification of such disregard by the Company in which to
remedy such disregard; (4) the entry of an order, ruling or determination by a
government body, court, or self-regulatory organization that imposes a bar or
disqualification on Executive from employment with the Company (either
permanently or for a period exceeding 180 days); (5) a material violation of the
Company’s policies,

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including the Company’s Code of Business Conduct or this Agreement; or (6)
abandonment or gross dereliction of Executive’s work duties.
(ii)
“Change in Control” shall mean (1) a change in the ownership of the Company,
which occurs on the date that any one person, or more than one person acting as
a group, acquires ownership of the Company that, together with ownership held by
such person or persons acting in concert, constitutes more than fifty percent
(50%) of the total voting power of the Company; (2) any merger or consolidation
of the Company with or into another entity (other than any such merger or
consolidation in which the stockholders of the Company immediately prior to such
merger or consolidation continue to hold at least a majority of the voting power
of the outstanding capital stock or other ownership interests in the surviving
company); (3) a majority of the members of the Board is replaced during any
twelve (12)-month period; or (4) any sale, transfer or other disposition, in a
single transaction or series of related transactions, of all or substantially
all of the assets of the Company.

(iii)
“Good Reason” shall mean any of the following: (1) a material diminution in
Executive’s base compensation (i.e., a reduction in base compensation of greater
than 10%) unless the Base Salary of a majority of other employees at the same
level as Executive is also proportionately reduced; (2) a change in the
geographic location at which Executive must perform his services of greater than
fifty (50) miles; or (3) any other action or inaction that constitutes a
material breach by the Company of this Agreement. In order for Executive to
terminate for Good Reason, (i) Executive must notify the Board in writing of his
intent to terminate his employment within ninety (90) days of the event
constituting Good Reason, such writing must specifically identify in reasonable
detail the facts and events that Executive believes constitute Good Reason; (ii)
the event must remain uncured for thirty (30) days following the date that
Executive notifies the Board in writing of Executive’s intent to terminate
employment for Good Reason (the “Notice Period”); and (iii) the termination date
must occur within sixty (60) days after the expiration of the Notice Period.

(iv)
“Involuntary Termination” shall mean either a termination without Cause or a
termination for Good Reason. In no event will it be deemed an independent and
sufficient basis for an Involuntary Termination if Executive is offered
substantially equivalent employment and total compensation with the purchaser or
acquirer in a Change in Control or with any other entity created in connection
with a Change in Control, in each case regardless of their beneficial ownership.
Involuntary termination shall further include non-renewal by the Company as
described in Section 2 above if such non-renewal occurs within 18 months of any
Change in Control of the Company as defined in Section 5(iii) above.

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(b)
Involuntary Termination After Change in Control. If, prior to the expiration of
the then existing Initial Period or Renewal Period and within eighteen (18)
months following a Change in Control as defined in Section 5(a)(iii) above,
Executive is subject to an Involuntary Termination (as defined in Section
5(a)(iv), and specifically including, for avoidance of doubt, any notice of
non-renewal by the Company pursuant to Section 2 herein), then the Company shall
pay “Change in Control Severance Benefits” to Executive (which shall be the sole
benefits Executive is entitled to under these circumstances). The Change in
Control Severance Benefits shall consist of (i) a payment (less applicable
withholdings and deductions) equivalent to 24 months of Executive’s Base Salary
(as in effect during the Initial Period or Renewal Period in effect immediately
prior to (1) the Change in Control or (2) the date of the termination of
Executive’s employment, whichever is greater), payable as a single lump sum
within 15 days of Executive’s termination of employment; (ii) 100% of
Executive’s most recent target bonus payment as a single lump sum within 15 days
of delivery of a release of all claims in a form satisfactory to Company; and
(iii) taxable cash payments paid each calendar month for 24 months in an amount
equal to the monthly COBRA premium at the time of Executive’s termination for
the health, dental and vision benefits that were in place for Executive and
Executive’s eligible dependents under the Company’s plans immediately prior to
Executive’s termination.

(c)
Involuntary Termination – No Change in Control. If Executive is subject to an
Involuntary Termination (as defined in Section 5(a)(iv), and specifically
including, for avoidance of doubt, any notice of non-renewal by the Company
pursuant to Section 2 herein) prior to the expiration of the then existing
Initial Period or Renewal Period, and no Change in Control as defined in Section
5(a)(iii) above has occurred in the preceding eighteen (18) months, the Company
shall pay “Severance Benefits” to Executive (which shall be the sole benefits
Executive is entitled to under these circumstances). The Severance Benefits
shall consist of (i) a payment (less applicable withholdings and deductions)
equivalent to 12 months of Executive’s Base Salary as in effect immediately
prior to the date of the termination of Executive’s employment, payable as a
single lump sum within 15 days of delivery of a release of all claims in a form
satisfactory to Company; (ii) the pro-rated amount of the bonus Executive would
have received had Executive remained employed through the calendar year, to be
determined at the sole discretion of the Board based on Executive’s performance
and Company performance achievement against goals set forth in the annual bonus
plan as adopted by the Board for the year of termination payable as a single
lump sum at the same time as annual bonuses are generally payable to other
senior executives of the Company, but in all events no later than March 15th of
the year following the year in which the Annual Bonus is earned; and (iii)
taxable cash payments paid each calendar month for 12 months in an amount equal
to the monthly COBRA premium at the time of Executive’s termination for the
health, dental and vision benefits that Executive and Executive’s eligible
dependents had in effect under the Company’s plans immediately prior to
Executive’s termination.

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(d)
Voluntary Resignation; Termination For Cause. If Executive’s employment with the
Company terminates (i) voluntarily by Executive (other than for Good Reason
during the period following a Change in Control), but including, for avoidance
of any doubt, non-renewal by Executive pursuant to Section 2 above or (ii) by
the Company for Cause as defined in Section 5(a)(i) above , then Company shall
have no duty to make any payments or provide any benefits to Executive pursuant
to this Agreement other than the amount of Executive’s Base Salary and vested
benefits, if any, accrued through the Termination Date. If the Company
terminates Executive for Cause, the Company must notify Executive, in writing,
that Executive is being terminated for Cause, and such notice shall identify in
reasonable detail the facts and events that the Company believes constitutes
Cause.

(e)
Accrued Wages; Expenses. Without regard to the reason for, or the timing of,
Executive’s termination of employment: (i) the Company will pay Executive any
unpaid Base Salary due for periods prior to the Termination Date, and (ii)
following submission of proper expense reports and supporting documentation by
Executive, the Company will reimburse Executive for all expenses reasonably and
necessarily incurred by Executive in connection with the business of the Company
prior to the Termination Date. These payments will be made promptly after the
Termination Date and within the period of time mandated by law, subject to the
provisions set forth herein.

(f)
No Further Obligations. The Company and its subsidiaries and affiliates shall
have no further obligations hereunder or otherwise with respect to Executive’s
employment from and after the Termination Date, and the Company and its
subsidiaries and affiliates shall continue to have all other rights available
hereunder (including without limitation, all rights hereunder at law or in
equity).

6.
Confidentiality.  During the course of Executive’s employment with the Company,
Executive will have access to Confidential Information.  For purposes of this
Agreement, “Confidential Information” means all data, information, ideas,
concepts, discoveries, trade secrets, inventions (whether or not patentable or
reduced to practice), innovations, improvements, know-how, developments,
techniques, methods, processes, treatments, drawings, sketches, specifications,
designs, plans, patterns, models, plans, and strategies, and all other
confidential or proprietary information or trade secrets in any form or medium
(whether merely remembered or embodied in a tangible or intangible form or
medium) whether now or hereafter existing, relating to or arising from the past,
current or potential business, activities and/or operations of the Company or
any of its affiliates, including, without limitation, any such information
relating to or concerning finances, sales, marketing, advertising, transition,
promotions, pricing, personnel, customers, suppliers, vendors, raw partners
and/or competitors.   Executive agrees that Executive shall not, directly or
indirectly, use, make available, sell, disclose or otherwise communicate to any
person, other than in the course of Executive’s assigned duties with the Company
and for the benefit of the Company, either during the period of Executive’s
employment or at any time thereafter, any Confidential Information or other
confidential or proprietary information received from

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third parties subject to a duty on the Company’s and its subsidiaries’ and
affiliates’ part to maintain the confidentiality of such information, and to use
such information only for certain limited purposes, in each case, which shall
have been obtained by Executive during Executive’s employment by the Company (or
any predecessor).  The foregoing shall not apply to information that (a) was
known to the public prior to its disclosure to Executive; (b) becomes generally
known to the public subsequent to disclosure to Executive through no wrongful
act of Executive or any representative of Executive; or (c) Executive is
required to disclose by applicable law, regulation or legal process (provided
that Executive provides the Company with prior notice of the contemplated
disclosure and cooperates with the Company at its expense in seeking a
protective order or other appropriate protection of such information).
7.
Non-Solicitation; Non-Competition.  In order to protect the Company’s
Confidential Information, business goodwill, customer and employee
relationships, and other legitimate business interests, and in consideration of
the Company’s promise to provide Executive with its Confidential Information and
business goodwill, Executive agrees to the following Non-Solicitation and
Non-Competition provisions:

(a)
For a period of twelve (12) months following the Termination Date, Executive
agrees that Executive shall not, directly or indirectly, individually or on
behalf of any other person, firm, corporation or other entity, solicit, aid or
induce any employee of the Company or any of its subsidiaries or affiliates to
leave such employment or to accept employment with or render services to or with
any other person, firm, corporation or other entity unaffiliated with the
Company or take any action to materially assist or aid any other person, firm,
corporation or other entity in identifying or soliciting any such employee.  

(b)
Executive hereby covenants that during the period of Executive’s employment by
the Company, and for a period of twelve (12) months following a termination for
any reason, Executive shall not, without the prior written consent of the Board,
accept a position to perform duties similar to those performed by Executive
while at the Company, directly or indirectly (whether as proprietor,
stockholder, director, partner, employee, agent, independent contractor,
consultant, trustee or in any other capacity), with respect to any property,
drilling program, oil or gas leasehold, project or field, in which the Company
participates, or has any investment or other business interest in, within five
miles of the boundary of any existing Company leasehold in the United States in
which the Company has conducted business at any time within the one-year period
immediately preceding termination (a “Competing Enterprise”); provided, however,
that Executive shall not be deemed to be participating or engaging in a
Competing Enterprise solely by virtue of Executive’s ownership of not more than
4.9% of any class of stock or other securities which are publicly traded on a
national securities exchange or in a recognized over-the-counter market.

(c)
Executive may not avoid the purpose and intent of Section 7 by engaging in
conduct within the geographically limited area from a remote location through
means such

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as telecommunications, written correspondence, computer-generated or assisted
communications or other similar methods.
(d)
Executive has read and considered these restrictions (including the duration of
the restrictions, the geographic scope, and the scope of activity restrained)
and agrees that they are fair and reasonable in light of the Confidential
Information and business goodwill Executive will receive and his employment and
position with the Company, and further agrees that they are reasonably required
for the protection of the legitimate business interests of the Company, its
owners, officers, and employees.  Executive further agrees that these
restrictions will allow Executive to find suitable work that will not violate
this Agreement during the twelve (12) month period following the Termination
Date.

(e)
In the event that any provision of the Non-Competition provision shall be
declared by a court of competent jurisdiction to exceed the maximum time period
or restrictions such court deems reasonable and enforceable, the restrictions
deemed reasonable and enforceable by the court shall become and thereafter be
the maximum restrictions.

(f)
Executive acknowledges that a breach or threatened breach of these
Confidentiality, Non-Solicitation, or Non-Competition provisions in Sections 6
and 7 will result in (or have a reasonable likelihood of resulting in) material
irreparable injury to the Company for which there can be no adequate remedy at
law; that it will not be possible to measure damages for such injuries
precisely; and that, in the event of such a breach or threatened breach, the
Company shall be entitled to obtain a temporary restraining order and a
preliminary and/or permanent injunction restraining Executive from engaging in
activities prohibited by this Agreement and/or granting such other relief as may
be required to enforce the covenants contained herein, in addition to any other
remedies available to the Company.  In addition, Executive agrees that he will
be responsible for the payment of any and all attorneys’ fees incurred by the
Company if the Company files a legal proceeding to enforce any or all of the
terms of this Agreement.

8.
Notices. Any notices provided for in this Agreement shall be in writing and
shall be effective when delivered in person or deposited in the United States
mail, postage prepaid, and addressed to Executive at his last known address on
the books of the Company or, in the case of the Company, to it at its principal
place of business, attention of the Board (with a copy to the General Counsel of
the Company), or to such other address as either Party may specify by notice to
the other actually received.

9.
Complete Agreement. This Agreement embodies the complete agreement and
understanding among Executive and the Company and its subsidiaries and, as of
the Effective Date, shall supersede and preempt any prior understandings,
agreements or representations by or among the Parties, written or oral, which
may have related to the subject matter hereof in any way.

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10.
No Assignment. This Agreement is personal to each of the Parties hereto, and no
party may assign or delegate any right or obligation hereunder without first
obtaining the written consent of the other party hereto.

11.
Counterparts; Delivery by Facsimile or PDF. This Agreement may be executed in
separate counterparts (including by facsimile or PDF signature pages), each of
which is deemed to be an original and all of which taken together constitute one
and the same agreement. This Agreement and any amendments hereto, to the extent
signed and delivered by means of a facsimile machine or PDF, shall be treated in
all manner and respects as an original agreement or instrument and shall be
considered to have the same binding legal effect as if it were the original
signed version thereof delivered in person.

12.
Governing Law. This Agreement shall be construed and enforced in accordance
with, and all questions concerning the construction, validity, interpretation
and performance of this Agreement shall be governed by, the laws of the state of
Texas without giving effect to provisions thereof regarding conflict of laws.

13.
Severability.  Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

14.
Amendment and Waiver. Any provision of this Agreement may be amended or waived
only with the prior written consent of the Company and Executive, and no course
of conduct or course of dealing or failure or delay by any Party hereto in
enforcing or exercising any of the provisions of this Agreement shall affect the
validity, binding effect or enforceability of this Agreement or be deemed to be
an implied waiver of any provision of this Agreement.

15.
Survival. The rights and obligations of Executive and Company set forth in
Section 1(a), Section 4(b), Section 5, Section 6, and Section 7 hereto will
survive the Employment Period and the expiration of this Agreement, and are
intended to apply without regard to any specific duration unless specifically
specified therein.

16.
Section 409A. The intent of the Parties is that payments and benefits under this
Agreement comply with Internal Revenue Code Section 409A and the regulations and
guidance promulgated thereunder (collectively, “Code Section 409A”) and,
accordingly, to the maximum extent permitted, this Agreement will be interpreted
to be in compliance therewith.  To the extent that any provision hereof is
modified in order to comply with Code Section 409A, such modification will be
made in good faith and will, to the maximum extent reasonably possible, maintain
the original intent and economic benefit to Executive and the Company of the
applicable provision without violating the provisions of Code Section 409A.  To
the extent that reimbursements or other in-kind benefits under this Agreement
constitute “nonqualified deferred compensation” for purposes of Code Section
409A, (a)

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all expenses or other reimbursements hereunder will be made on or prior to the
last day of the taxable year following the taxable year in which such expenses
were incurred by Executive, (b) any right to reimbursement or in-kind benefits
shall not be subject to liquidation or exchanges for another benefit, and (c) no
such reimbursement, expenses eligible for reimbursement, or in-kind benefits
provided in any table year will in any way affect the expenses eligible for
reimbursement, or in-kind benefits to be provided, in any other taxable year.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first written above.
 
 
 
LILIS ENERGY, INC.

 
By:    /s/ David M. Wood            
Name:    David M. Wood            
Title:    Chairman of the Board of Directors    
 

 
ACCEPTED AND AGREED:

EXECUTIVE
 
/s/ Joseph Daches                
Name:    Joseph Daches                

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