EMPLOYMENT AGREEMENT

 

 

This Employment Agreement (this “Agreement”) is made and entered into by and
between American Eagle Energy Corporation (the “Company”) and Thomas G. Lantz
(“Executive”). This Agreement shall become effective as of the 1st day of May,
2013, (the “Effective Date”). The Company and Executive may be referred to
herein collectively as “Parties” and individually as “Party.” In consideration
of the mutual promises, covenants and conditions hereinafter set forth and other
good and valuable consideration, the receipt and sufficiency of which the
Parties acknowledge, the Parties agree as follows:

 

1. Employment and Duties. This Agreement amends, supersedes, and replaces that
certain Employment Agreement dated effective April 12, 2011 by and between
Thomas G. Lantz and American Eagle Energy, Inc. The Company shall employ
Executive in the position of Chief Operating Officer or such other senior
executive position as may be assigned to him by the Company’s Board of Directors
(the “Board”). As Chief Operating Officer, Executive shall support the work of
the Company’s Chairman of the Board (“Chairman”) and Chief Executive Officer
(“CEO”), focusing on the establishment and optimization of the Company’s day to
day operations, including, without limitation, the Company’s exploration and
development activities, advising the Board, Chairman and CEO on key planning
issues and making recommendations to the Board, Chairman and CEO on key
strategic planning, resource allocation and implementation issues. Executive
shall report directly to the CEO of the Company, or such other persons as the
Board may designate.

 

2. Extent of Services. Executive shall devote his entire time, attention and
energy to the Company’s business, and shall not, directly or indirectly, during
the term of this Agreement, be engaged in any other business activity, whether
or not in competition with the Company, and whether or not such activity is
pursued for gain, profit, or other pecuniary advantage, without the prior
written approval of the Company. However, nothing herein shall be construed to
limit Executive’s right to own, directly or indirectly, solely as an investment,
securities of any entity which are traded on any securities exchange if
Executive (i) is not a controlling person of, or a member of a group which
controls, such entity or (ii) does not, directly or indirectly own five percent
or more of any class of securities of such entity.

 

3. Term of Agreement. The term of this Agreement shall commence on the Effective
Date and shall continue through and including April 30, 2016 (the “Expiration
Date”), subject to the provisions of the Section in this Agreement entitled
“Termination or Expiration of Agreement” (the “Term”). Notwithstanding the
foregoing, the provisions of the Sections in this Agreement entitled
“Non-competition; Secrecy,” “Representations and Warranties” and “Miscellaneous”
shall survive, and continue in full force and effect, after any termination or
expiration of this Agreement, irrespective of the reason for the termination or
any claim that the termination was wrongful or illegal.

 

4. Compensation and Other Benefits. The Company shall provide the following
compensation and other benefits to Executive during the Term in consideration of
Executive’s performance of all of his obligations under this Agreement:

 

4.1 Base Salary. Subject to the provisions of the Section in this Agreement
entitled “Termination or Expiration of Agreement,” during the Term the Company
shall pay Executive an annual base salary of Two Hundred Fifty Two Thousand and
No/100s US Dollars ($252,000.00 USD), payable in arrears on the last day of each
calendar month, in gross monthly installments of Twenty One Thousand and No/100s
US Dollars ($21,000.00 USD). The base salary to be paid to Executive hereunder,
as changed by the Parties from time to time, may be referred to herein as “Base
Salary.”

 

 

 

 

4.2 Fringe Benefits. As additional compensation under this Agreement, Executive
shall be entitled to receive the following benefits (the “Fringe Benefits”):

 

4.2.1 Employee Benefit Plans. During the Term, the Company will pay the premiums
incurred to provide group medical insurance coverage for Executive and his
dependents. During the Term, the Company will also allow Executive to
participate in such other group health, pension, welfare, and insurance plans
(together with the group medical insurance plan, the “Employee Benefit Plans”)
maintained by the Company from time to time for the general benefit of its
executive employees, as such Employee Benefit Plans may be modified from time to
time in the Company’s sole and absolute discretion.

 

4.2.2 Other Benefits. The Company shall provide Executive with all other
benefits and perquisites as are made generally available to the Company’s
executive employees under the Company’s Employee Handbook, as such Employee
Handbook may be modified from time to time in the Company’s sole and absolute
discretion.

 

4.2.3 Vacation; Sick Leave and Holidays. Executive shall be entitled to six (6)
weeks of paid vacation and such sick leave and paid holidays as are generally
made available to the Company’s executive employees under the Company’s Employee
Handbook, as such Employee Handbook may be modified from time to time in the
Company’s sole and absolute discretion.

 

4.2.4 Reimbursement of Business Expenses. The Company shall reimburse Executive
for all reasonable travel, entertainment and other expenses incurred by
Executive in connection with the performance of his duties under this Agreement,
upon submission by Executive to Company of reasonable documentation pertaining
to such expenses.

 

4.3 Deferred Compensation. Any deferred compensation (within the meaning of
Section 409A of the Internal Revenue Code) payable under this Agreement on
account of Executive’s separation from service shall not commence prior to six
months following such separation if Executive is a key employee (within the
meaning of Section 409A). Provided, that in determining whether Executive is a
key employee, any compensation realized on account of the exercise of a stock
option or a disqualifying disposition of stock acquired through exercise of an
incentive stock option shall be disregarded.

 

4.4 Withholding. All customary withholding taxes and other employment taxes
which the Company is required by law to withhold and pay with respect to
compensation paid by an employer to an employee shall be subtracted and withheld
from all compensation paid by the Company to Executive for services rendered by
Executive for the Company.

 

5. Termination or Expiration of Agreement.

 

5.1 Termination at Company’s Election. The Company may terminate Executive’s
employment at any time during the Term, for any reason or no reason, with or
without Cause (defined below), and with or without notice, subject to provisions
of the Subsections of this Section entitled “Termination for Cause,”
“Termination Without Cause” and “Severance Following a Change in Control.”

 

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5.1.1 Termination for Cause. If Executive’s employment is terminated for Cause
(defined below), Executive shall be entitled to receive only the following: (i)
payment of Executive’s Base Salary through and including the date of
termination; (ii) payment for all accrued and unused vacation time as of the
date of termination, which will be paid at a rate calculated in accordance with
Executive’s Base Salary at the time of termination; and (iii) reimbursement of
business expenses incurred prior to termination. Except as expressly set forth
in this Subsection, Executive shall not be entitled to receive any Base Salary,
Fringe Benefits or severance benefits in the event Executive’s employment is
terminated for Cause, except that Executive may continue to participate in the
Employee Benefit Plans to the extent permitted by and in accordance with the
terms of those plans or as otherwise required by law.

 

5.1.2 Termination Without Cause or Good Reason. If Executive’s employment by the
Company is terminated by the Company without Cause (defined below) or if
Executive’s employment is terminated for Good Reason (defined below), Executive
shall receive: (i) payment of Executive’s Base Salary through and including the
date of termination; (ii) payment for all accrued and unused vacation time as of
the date of termination, which will be paid at a rate calculated in accordance
with Executive’s Base Salary at the time of termination; and (iii) reimbursement
of business expenses incurred prior to termination. In addition, if the
severance of Executive’s employment falls within the terms of this Subsection
and if the terms of the Subsection of this Section entitled “Termination
Following a Change in Control” do not apply to the severance of Executive’s
employment with the Company, then, subject to the condition precedent that
Executive sign a general release of all claims in a form approved by the Company
in the exercise of its sole discretion, Executive shall also receive, and the
Company shall pay Executive, a severance payment in an amount equal to
Executive’s annual Base Salary as the same may have been changed through the
date of the severance of Executive’s employment, less applicable withholdings.

 

5.1.3 Termination Following a Change in Control.

 

A. If, immediately prior to or within twelve months following a Change in
Control (defined below): (i) Executive’s employment is terminated by the Company
without Cause; or (ii) Executive’s employment is terminated for Good Reason
(defined below), Executive shall receive from the Company: (x) payment of
Executive’s Base Salary through and including the date of termination; (y)
payment for all accrued and unused vacation time existing as of the date of
termination, which will be paid at a rate calculated in accordance with
Executive’s Base Salary at the time of termination; and (z) reimbursement of
business expenses incurred prior to the date of termination. In addition, if the
severance of Executive’s employment falls within the terms of this Subsection,
then, subject to the condition precedent that Executive sign a general release
of all claims in a form approved by the Company in the exercise of its sole
discretion, Executive shall also receive, and the Company shall pay Executive, a
severance payment in an amount equal to the product of two times Executive’s
annual Base Salary as the same may have been changed through the date of the
termination of Executive’s employment, less applicable withholdings.

 

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B. If Executive severs employment with the Company within sixty (60) days of a
Change in Control (defined below) for any reason other than Good Reason (defined
below), Executive shall receive: (x) payment of Executive’s Base Salary through
and including the date of termination; (y) payment for all accrued and unused
vacation time existing as of the date of termination, which will be paid at a
rate calculated in accordance with Executive’s Base Salary at the time of
termination; and (z) reimbursement of business expenses incurred prior to the
date of termination. In addition, if Executive severs employment with the
Company within sixty (60) days of a Change in Control for any reason other than
Good Reason, then, subject to the condition precedent that Executive sign a
general release of all claims in a form approved by the Company in the exercise
of its sole discretion, Executive shall also receive, and the Company shall pay
Executive, a severance payment in an amount equal to Executive’s annual Base
Salary as the same may have been changed through the date of the termination of
Executive’s employment, less applicable withholdings.

 

C. For purposes of this Agreement, the term “Change in Control” shall mean the
occurrence of any of the following events: (i) the consummation of any
transaction after the Effective Date in which any person or entity or group of
related persons and/or entities becomes the beneficial owner, directly or
indirectly, of securities representing more than twenty percent (20%) of the
combined voting power of the Company’s outstanding voting securities, (ii) three
or more directors, whose election or nomination for election is not approved by
a majority of the members of the Company’s Board of Directors on the Effective
Date, are elected within any twelve month period to serve on its Board of
Directors, or (iii) any merger (other than a merger in which the Company is the
survivor and there is no change of control pursuant to (i) or (ii) of this
sentence), reorganization, consolidation, liquidation, winding up or dissolution
of the Company or the sale of all or substantially all of its assets.

 

5.1.4 “Cause.” As used in this Agreement, “Cause” means:

 

A. Criminal Conduct. Executive’s conviction of a crime punishable as a felony or
of any offense involving moral turpitude, dishonesty or immoral conduct;

 

B. Incarceration. Executive’s incarceration for any reason. For purposes of this
provision, incarceration means any confinement of Executive by any federal,
state or local governmental agency which causes Executive to be unable to
provide services for and on behalf of the Company at its principal place of
business for the period of Executive’s confinement;

 

C. Neglect or Other Misconduct. Executive’s conduct, neglect or failure to act
which (i) materially and adversely affects the business or reputation of the
Company; or (ii) renders his continued service in the employment of the Company
materially detrimental to the ordinary, continued, or successful operation of
its business, or (iii) is or is likely to be materially detrimental to, or which
materially interferes with, his ability to effectively perform his duties for
the Company; or (iv) constitutes the misappropriation, misuse, or misdirection
of the Company’s funds or property; or (v) materially interferes with or
materially impairs the ordinary operation of the Company’s business; or (vi)
involves moral turpitude and which is reasonably likely to cause material damage
to the Company’s business, its reputation or its goodwill;

 

D. Absence. Executive’s absence from the active performance of his duties in the
operation of the Company’s business on more than an occasional basis, other than
as a result of (i) approved vacations, medical leave or personal leave, or (ii)
a Permanent Disability, defined below;

 

E. Violation of the Company’s Rules. Executive’s violation of the Company’s
material written rules, policies or procedures (which do not conflict with the
terms of this Agreement), after notice and not less than five (5) business days
opportunity to cure such failure or refusal;

 

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F. Failure to Perform Duties. Executive’s failure or refusal to perform the
duties reasonably required of him pursuant to the terms of this Agreement, after
notice and not less than five (5) business days opportunity to cure such failure
or refusal; or

 

G. Violations of the Board of Director Directives. Executive’s intentional
violation of the lawful directives of the Company’s Board of Directors.

 

5.1.5 “Good Reason.” As used in this Agreement, “Good Reason” means the
occurrence of any of the following without Executive’s prior written consent and
in the absence of any circumstance that constitutes Cause: (i) the regular
assignment to Executive of duties materially inconsistent with the position and
status of Executive; (ii) a material reduction in the nature, status or prestige
of Executive’s responsibilities or a materially detrimental change in
Executive’s title or reporting level, excluding for this purpose an isolated,
insubstantial or inadvertent action by the Company which is remedied by the
Company promptly after the Company’s receipt of written notice from Executive;
(iii) a reduction by the Company of Executive’s annual Base Salary; or (iv) if
Executive shall be required to perform his duties for the Company at a physical
location which is more than twenty miles from 2549 West Main Street, Littleton,
CO 80120 or if the Company’s principal office is moved to a location which is
more than twenty miles from 2549 West Main Street, Littleton, CO 80120.

 

5.2 Termination upon Death or Permanent Disability.

 

5.2.1 Termination Resulting from Death or Permanent Disability. This Agreement
will terminate automatically on Executive’s death or if Executive becomes
Permanently Disabled (as defined below) and the Base Salary, Fringe Benefits and
other payments and benefits which Executive, or Executive’s beneficiaries or
estate, shall be entitled to receive shall be determined exclusively by
operation of this Subsection. In the event of the termination of Executive’s
employment as a result of his death or Permanent Disability, Executive, or
Executive’s beneficiaries or estate, shall receive from the Company: (x) payment
of Executive’s Base Salary through and including the date of termination; (y)
payment for all accrued and unused vacation time existing as of the date of
termination, which will be paid at a rate calculated in accordance with
Executive’s Base Salary at the time of termination; and (z) reimbursement of
business expenses incurred prior to the date of termination. In addition,
subject to the condition precedent that Executive or his estate or his legal
representative, as the case may be, sign a general release of all claims in a
form approved by the Company in the exercise of its sole discretion, Executive
shall also receive, and the Company shall pay Executive, a severance payment in
an amount equal to the product of one-half times Executive’s annual Base Salary
as the same may have been changed through the date of the termination of
Executive’s employment, less applicable withholdings.

 

5.2.2 Permanent Disability. As used in this Agreement, “Permanent Disability”
and “Permanently Disabled” shall mean the incapacity of Executive due to
illness, accident, or any other reason to perform his duties for a period of
ninety (90) days, whether or not consecutive, during any twelve month period of
the Term, all as determined by the Company in its reasonable discretion. All
determinations as to the date and extent of incapacity of Executive shall be
made by the Company’s Board of Directors, upon the basis of such evidence,
including independent medical reports and data, as the Board of Directors in its
discretion deems necessary and desirable. All such determinations of the Board
of Directors shall be final and binding upon the Parties.

 

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5.3 Termination at Executive’s Election. Executive may resign from employment
with the Company prior to the expiration of the Term for any reason by providing
written notice to the Company at least thirty (30) days prior to the date
selected for resignation. If Executive resigns from employment before expiration
of the Term under any circumstances other than: (i) for Good Reason (defined
above), or (ii) within sixty (60) days of a Change in Control (defined above)
for any reason other than Good Reason (defined above), then Executive shall be
entitled to receive only the following: (i) payment of Executive’s Base Salary
through and including the date of resignation; (ii) payment for all accrued and
unused vacation time existing as of the date of resignation, which will be paid
at a rate calculated in accordance with Executive’s Base Salary at the time of
resignation; and (iii) reimbursement of business expenses incurred prior to the
date of resignation. Except as expressly set forth in this Subsection, Executive
shall not be entitled to receive any Base Salary, Fringe Benefits or severance
benefits in the event Executive resigns from employment before expiration of the
Term, except that Executive may continue to participate in the Employee Benefit
Plans to the extent permitted by and in accordance with the terms thereof or as
otherwise required by law and except as otherwise provided by this Agreement.

 

5.4 Termination on Expiration of Term. If this Agreement is terminated on the
expiration of the Term in accordance with the Section in this Agreement entitled
“Term of Agreement,” Executive shall receive: (i) payment of Executive’s Base
Salary through and including the date of termination; (ii) payment for all
accrued and unused vacation time existing as of the date of termination, which
will be paid at a rate calculated in accordance with Executive’s Base Salary at
the time of expiration of the Term; and (iii) reimbursement of business expenses
incurred prior to the date of the expiration of the Term. Except as expressly
set forth in this Subsection, Executive shall not be entitled to receive any
Base Salary, Fringe Benefits or severance benefits in the event that this
Agreement is terminated on the expiration of the Term in accordance with the
Section in this Agreement entitled “Term of Agreement,” except that Executive
may continue to participate in the Employee Benefit Plans to the extent
permitted by and in accordance with the terms thereof or as otherwise required
by law and except as otherwise provided by this Agreement.

 

6. Non-competition; Secrecy.

 

6.1 Assistance to Competitors. Unless otherwise provided in this Subsection or
in the Section in this Agreement entitled “Extent of Services,” Executive shall
not during the Term and for a period of two years following the severance of
Executive’s employment with the Company own a material interest in, render
financial assistance to, or offer personal services to (whether for payment or
otherwise), (i) any person or entity that competes with the Company in the
Company Business (as defined below), or (ii) any person or entity or any
subsidiary or affiliate of any person or entity which is pursuing any business
or investment opportunity which the Company reviewed within the previous six
month period. “Company Business” shall mean the conduct of the oil and gas
exploration and development business in those basins or areas of mutual interest
(i) within which the Company directly or indirectly owns, leases or otherwise
holds mineral interests, (ii) as to which the Company is actively evaluating the
desirability of directly or indirectly acquiring mineral interests, or (iii) as
to which the Company is endeavoring to directly or indirectly acquire mineral
interests. Notwithstanding anything to the contrary set forth in this Agreement,
Executive shall have the right to own a material interest in or render financial
assistance to any person or entity in connection with a project or opportunity
in which the Company has failed or declined to exercise its right of first
refusal described below. Executive agrees that during the Term he will offer the
Company a right of first refusal, in writing, to pursue all opportunities of
which Executive learns involving the exploration, development and production of
hydrocarbons. Contemporaneously with Executive’s delivery of such written
notification to the Company, Executive shall provide the Company with all
material information in Executive’s possession or control which is reasonably
necessary to enable the Company to evaluate the economic viability and risks of
pursuing each such opportunity. Company shall exercise its right of first
refusal to pursue such an opportunity by giving Executive written notice of its
exercise within forty five business days of its receipt of Executive’s written
notification and all of the information described above.

 

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6.2 Confidential Information. Executive acknowledges and agrees that the Company
is engaged in business activities in which it is and will in the future be
crucial to develop and retain proprietary, trade secret, or confidential
information for the benefit of the Company (collectively, “Confidential
Information”). Accordingly, Executive shall not at any time during the Term or
for a period of three years following the termination or expiration of this
Agreement, either directly or indirectly, (i) divulge, convey or communicate any
Confidential Information to any person or entity, except as may be expressly
authorized in writing by the Company or as may be necessary for Executive to
perform his duties hereunder, or (ii) use any Confidential Information for
Executive’s own benefit or the benefit of any person or entity other than the
Company. Confidential Information includes, but is not limited to geological,
geophysical, and engineering data, models, analyses, compilations, estimates of
reserves, interpretations, data, studies, reports, business plans, business
methods, contractual and financial information, matters of a technical or
intellectual nature such as inventions, designs, improvements, processes of
discovery, techniques, methods, ideas, discoveries, developments, know-how,
techniques, formulae, compounds, compositions, specifications, trade secrets,
specialized knowledge, or matters of a business nature such as information about
costs and profits, records, customer lists, customer data or sales data and
other data in whatever form stored or maintained, whether oral, written,
documentary, digital, computer storage or otherwise.

 

6.3 Ownership of Ideas. The Company shall own, and Executive hereby transfers
and assigns to the Company, all rights, of every kind and character throughout
the world, in perpetuity, in and to any and all materials, ideas, concepts and
results inuring from or in connection with Executive’s performance of services
for the Company, or conceived of or produced by Executive during the Term and
which relate to the Company Business. The Parties acknowledge and agree,
however, that such transfer and assignment shall not apply to, or attach in and
to, any materials, ideas or concepts which fall outside the ambit of this
Agreement. Executive shall execute and deliver to the Company such assignments,
certificates of authorship, or other instruments as the Company may require from
time to time to evidence the Company’s ownership of material, ideas and other
results inuring from or in connection with Executive’s performance of services
for the Company, or conceived of or produced by Executive during the Term and
which relate to the Company Business.

 

6.4 Company Property. All records, papers, documents, materials, and
electronically stored data kept, made, or received by Executive in the
performance of his duties while employed by the Company, or generated for, in
the course of, or in connection with the business of the Company, whether or not
containing Confidential Information, shall be and remain the exclusive property
of the Company (collectively referred to as “Company Property”) at all times
during and after Executive’s employment with the Company, without regard to how
Executive came into possession of any Company Property or whether Executive
played any role in creating any Company Property. Executive shall not destroy
any Company Property or remove any Company Property from the Company’s premises,
whether during or after employment by the Company, except as expressly directed
for the purpose of performing services on behalf of the Company. Upon the
termination of Executive’s employment with the Company at any time and for any
reason, or upon the Company’s request at any time and for any reason, Executive
shall promptly return all Company Property to the Company, without keeping a
copy of any such Company Property for himself or any other entity or individual.
Executive will, upon request by Company, certify his compliance with the terms
of this Subsection.

 

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6.5 Interference with Employees and Clients.

 

6.5.1 Non-Solicitation of Employees. For so long as Executive is employed by the
Company, and for a three-year period thereafter, Executive shall not, directly
or indirectly, whether for his own benefit or for the benefit of any other
entity or individual: (i) solicit, encourage, or in any way influence any person
employed by, or engaged to render services on behalf of, the Company, to cease
performing services for the Company, or to engage in any activity contrary to or
conflicting with the interests of the Company; (ii) hire away any person
employed by, or engaged to render services on behalf of, the Company; or (iii)
otherwise interfere to the Company’s detriment in any way in the Company’s
relationship with any person who is employed by, or engaged to render services
on behalf of, the Company.

 

6.5.2 Non-Solicitation of Clients. For so long as Executive is employed by the
Company, and for a three-year period thereafter, Executive shall not, whether
for his own benefit or for the benefit of any other entity or individual, take
any action which could cause any customer or client of the Company to limit,
curtail or terminate its business relationship with the Company.

 

6.5.3 Injunctive Relief. Executive and the Company acknowledge and agree that
(i) Executive’s breach of his obligations under this Section would cause the
Company irreparable harm and that monetary damages alone would not be an
adequate remedy for any such breach; and, therefore, (ii) if Executive breaches
this Section, the Company shall be entitled to obtain injunctive relief (and any
other form of equitable relief), as well as any other remedies (including
monetary damages) to which the Company is entitled as a consequence of such
breach or otherwise.

 

7. Representation and Warranties. Executive represents and warrants to the
Company that Executive is under no contractual or other restriction or
obligation that is materially inconsistent with the execution of this Agreement,
the performance of his duties hereunder, or the rights of the Company hereunder,
including, without limitation, any development agreement, non-competition
agreement or confidentiality agreement previously entered into by Executive.

 

8. Miscellaneous.

 

8.1 Severability. In the event that any provision of this Agreement should be
held to be void, voidable, unlawful or for any reason unenforceable, the
remaining provisions or portions of this Agreement shall remain in full force
and effect.

 

8.2 Amendment and Waiver. No provision of this Agreement can be modified,
amended, supplemented or waived in any manner except by an instrument in writing
signed by both Executive and the Company. The waiver by either Party of
compliance with any provision of this Agreement by the other Party shall not
operate or be construed as a waiver of any other provision of this Agreement, or
of any subsequent breach by such Party of any provision of this Agreement.

 

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8.3 Applicable Law. This Agreement, Executive’s employment relationship with the
Company, and any and all matters or claims arising out of or related to this
Agreement or Executive’s employment relationship with the Company, shall be
governed by, and construed in accordance with, the laws of the State of
Colorado, regardless of choice of law provisions of any jurisdiction.

 

8.4 Arbitration.

 

8.4.1 Exclusive Remedy. Except as set forth in the Subsection in this Section
entitled “Claims Not Subject to Arbitration,” arbitration shall be the sole and
exclusive remedy for any dispute, claim, or controversy of any kind or nature (a
“Claim”) arising out of, related to, or connected with this Agreement,
Executive’s employment relationship with the Company, or the termination of
Executive’s employment relationship with the Company, including any Claim
against any parent, subsidiary, or affiliated entity of the Company, or any
director, officer, employee, or agent of the Company or of any such parent,
subsidiary, or affiliated entity. It also includes any Claim against the
Executive by the Company, or any parent, subsidiary or affiliated entity of the
Company.

 

8.4.2 Claims Subject to Arbitration. Except for claims described in the
Subsection in this Section entitled “Claims Not Subject to Arbitration,” this
Agreement specifically includes (without limitation) all Claims under or
relating to any federal, state or local law or regulation prohibiting
discrimination, harassment or retaliation based on race, color, religion,
national origin, sex, sexual orientation, age, disability or any other condition
or characteristic protected by law; demotion, discipline, termination or other
adverse action in violation of any contract, law or public policy; entitlement
to wages or other economic compensation; any Claim for personal, emotional,
physical, economic or other injury; and any Claim for business torts or
misappropriation of confidential information or trade secrets.

 

8.4.3 Claims Not Subject to Arbitration. This Subsection does not preclude
either Party from making an application to a court of competent jurisdiction for
provisional remedies (e.g., temporary restraining order or preliminary
injunction), subject to Colorado Revised Statutes. This Agreement also does not
apply to any claims by Executive: (i) for workers’ compensation benefits; (ii)
for unemployment insurance benefits; (iii) under a benefit plan where the plan
specifies a separate arbitration procedure; (iv) filed with an administrative
agency which are not legally subject to arbitration under this Agreement; or (v)
which are otherwise expressly prohibited by law from being subject to
arbitration under this Agreement.

 

8.4.5 Procedure. The arbitration shall be conducted in the City and County of
Denver. Any Claim submitted to arbitration shall be decided by a single, neutral
arbitrator (the “Arbitrator”). The Parties to the arbitration shall mutually
select the Arbitrator not later than 45 days after service of the demand for
arbitration. If the Parties for any reason do not mutually select the Arbitrator
within the 45 day period, then any Party may apply to any court of competent
jurisdiction to appoint a retired judge as the Arbitrator. The arbitration shall
be conducted in accordance with the Colorado Revised Statutes, except as
modified by this Agreement. The Arbitrator shall apply the substantive federal,
state, or local law and statute of limitations governing any Claim submitted to
arbitration. In ruling on any Claim submitted to arbitration, the Arbitrator
shall have the authority to award only such remedies or forms of relief as are
provided for under the substantive law governing such Claim. The Arbitrator
shall issue a written decision revealing the essential findings and conclusions
on which the decision is based. Judgment on the Arbitrator’s decision may be
entered in any court of competent jurisdiction.

 

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8.4.6 Interpretation of Arbitrability. The Arbitrator, and not any federal or
state court, shall have the exclusive authority to resolve any issue relating to
the interpretation, formation or enforceability of this Subsection, or any issue
relating to whether a Claim is subject to arbitration under this Subsection,
except that any Party may bring an action in any court of competent jurisdiction
to compel arbitration in accordance with the terms of this Section.

 

8.5 Entire Agreement. All Exhibits to this Agreement are incorporated herein by
this reference. This Agreement constitutes the entire agreement between the
Parties relating to the subject matter of this Agreement and supersedes all
prior and contemporaneous negotiations, understandings, or agreements between
the Parties, whether oral or written, expressed or implied.

 

8.6 Counterparts. This Agreement may be executed by the Parties in counterparts,
each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.

 

8.7 Headings. The headings of sections and subsections of this Agreement are
included solely for convenience of reference and shall not control the meaning
or interpretation of any of the provisions of this Agreement.

 

8.8 Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given (a) when delivered to and
received personally by the recipient, (b) when sent to and received by the
recipient by facsimile (receipt electronically confirmed by sender’s facsimile
machine) if during normal business hours of the recipient, otherwise on the next
business day, (c) one business days after the date when sent to the recipient by
overnight delivery by reputable express courier service (charges prepaid) and
delivery confirmed, or (d) three business days after the date when mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid and such receipt is confirmed. Such notices, demands and other
communications shall be sent to Parties at the addresses indicated below or to
such other address as a Party may direct on written notice given pursuant to the
terms of this Subsection:

 

  If to Executive: Thomas G. Lantz     5615 West Ida Drive     Littleton, CO
80123         If to the Company: American Eagle Energy Corporation     2549 West
Main Street, Suite 202     Littleton, CO  80120

 

8.9 Attorneys’ Fees. If any Party shall commence any action or proceeding
against another Party in order to enforce the provisions hereof, or to recover
damages as the result of alleged breach of any of the provisions hereof, the
prevailing Party therein shall be entitled to recover all reasonable costs
incurred in connection therewith, including, but not limited to, reasonable
attorney' fees.

 

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8.10 Independent Legal Advice. Executive acknowledges that he has been advised
to obtain independent legal advice with respect to this Agreement and that he
has had the opportunity to do so.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and
year first above written.

 

THOMAS G. LANTZ   AMERICAN EAGLE ENERGY CORPORATION       /s/ Thomas G. Lantz  
By: /s/ Bradley M. Colby Thomas G. Lantz     Bradley M. Colby, Chief Executive
Officer

 

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