Exhibit 10.19

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”), effective October 1, 2015 (the
“Effective Date”), is between Hyperdynamics Corporation (“Employer”), and Paolo
Amoruso (“Executive”) (each a “Party” and together the “Parties”).

 

WHEREAS, Employer wishes to employ Executive as its Vice President of Commercial
and Legal and Corporate Secretary and Executive wishes to accept such
employment; and

 

WHEREAS, the Parties wish to set forth the terms and conditions of such
employment;

 

NOW, THEREFORE, the Parties hereto agree as follows:

 

1.                                    Definitions. As used in this Agreement,
the following terms have the following meanings:

 

(a)                              “Affiliate” means, with respect to any entity,
any other corporation, organization, association, partnership, sole
proprietorship or other type of entity, whether incorporated or unincorporated,
directly or indirectly controlling or controlled by or under direct or indirect
common control with such entity.

 

(b)                              “Annual Period” means the time period of each
year beginning on the first day of the Employment Term and ending on the day
before the anniversary of that date, except that the first Annual Period under
this Agreement shall have been deemed to have commenced on July 1, 2015 and will
end on June 30, 2016.  Accordingly, the second Annual Period will commence on
July 1, 2016 and will end on June 30, 2017.

 

(c)                               “Board” means the Board of Directors of
Employer.

 

(d)                              “Cause” means a finding by the Board of acts or
omissions constituting, in the Board’s reasonable judgment, any of the following
occurring during the Employment Term:

 

(i)                                   a material breach of duty by Executive in
the course of his employment with Employer or its Affiliates involving fraud,
acts of dishonesty (other than inadvertent acts or omissions), disloyalty to
Employer or its Affiliates or moral turpitude constituting criminal felony;

 

(ii)                                 conduct by Executive that is materially
detrimental to Employer or its Affiliates, monetarily or otherwise, or that
reflects unfavorably on Employer or Executive to such an extent that Employer or
its Affiliates have been materially harmed or would be materially harmed if
Executive’s employment were not terminated;

 

(iii)                           acts or omissions of Executive that are
materially in violation of his obligations under this Agreement or at law and
that have a material adverse effect on Employer or its Affiliates;

 

(iv)                          Executive’s material failure to comply with or
enforce the personnel policies of Employer or its Affiliates, specifically
including those concerning equal employment opportunity and those related to
harassing conduct;

 

(v)                             Executive’s material insubordination to the
Board;

 

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(vi)                          subject to the details of Paragraph 4(b),
Executive’s failure to devote his full working time and best efforts to the
performance of his responsibilities to Employer or its Affiliates;

 

(vii)                       Executive’s conviction of, or entry of a plea
agreement or consent decree or similar arrangement with respect to a felony or
any material violation of federal or state securities laws, in either case,
having a material adverse effect on Employer or its Affiliates; or

 

(viii)                    Executive’s material failure to cooperate with any
investigation or inquiry authorized by the Board or conducted by a governmental
authority related to Employer’s or an Affiliate’s business or Executive’s
conduct related to Employer or an Affiliate.

 

(e)                                “Code” means the Internal Revenue Code of
1986, as amended.

 

(f)                                 “Competitor” means any person or entity that
is engaged in the acquisition, development, production and marketing of crude
oil and natural gas, chemicals and other hydrocarbon commodities in competition
with the activities of Employer or an Affiliate.

 

(g)                                “Confidential Information” means, without
limitation, all documents or information, in whatever form or medium, concerning
or evidencing seismic data, geological data; geophysical data; energy
exploration data; oil and gas production data; sales; costs; pricing;
strategies; forecasts and long range plans; financial and tax information;
personnel information; business, marketing and operational projections, plans
and opportunities; customer, vendor, and supplier information; project and
prospect locations and leads; and production information; but excluding any such
information that is or becomes generally available to the public other than as a
result of any breach of this Agreement or other unauthorized disclosure by
Executive.

 

(h)                               “Employment Termination Date” means the
effective date of termination of Executive’s employment as established under
Paragraph 6(g).

 

(i)                                   “Fully Earned” shall have the meaning set
forth in Paragraph 7(e)(ii)(B).

 

(j)                                  “Good Reason” means, with respect to
Executive, any of the following actions or failures to act:

 

(i)                                a material diminution in Executive’s
authority, duties, or responsibilities in effect immediately prior to the
effective date of such change, but excluding any such change that occurs in
connection with Executive’s death, Inability to Perform or retirement;

 

(ii)                            a material reduction by Employer of Executive’s
compensation in effect immediately prior to the effective date of such
reduction;

 

(iii)                         any change of more than 75 miles in the location
of Executive’s principal place of employment immediately prior to the effective
date of such change; or

 

(iv)                        any material breach by Employer of this Agreement.

 

(k)                               “Inability to Perform” means and shall be
deemed to have occurred if Executive has been determined under Employer’s
long-term disability plan, if any, to be eligible for long-term disability
benefits. In the absence of Executive’s participation in, application for
benefits under, or existence of such a plan, “Inability to Perform” means
Executive’s inability to perform the essential functions of his position with
Employer because of an illness or injury for (i) a period of six consecutive
months or (ii) an aggregate of six months within any period of 12 consecutive
months.

 

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(l)                                   “Section 409A” means Code Section 409A and
the regulations and other guidance promulgated thereunder.

 

(m)                         “Work Product” means all ideas, works of authorship,
inventions, and other creations, whether or not patentable, copyrightable, or
subject to other intellectual property protection, that are made, conceived,
developed or worked on in whole or in part by Executive while employed by
Employer and/or any of its Affiliates, that relate in any manner whatsoever to
the business, existing or then-proposed, of Employer and/or any of its
Affiliates, or any other business or research or development effort in which
Employer and/or any of its Affiliates engages during Executive’s employment.

 

2.                                    Employment. Employer agrees to employ
Executive (directly or through an Affiliate), and Executive agrees to be
employed, for the Employment Term set forth in Paragraph 3. Executive will be
employed in the position and with the duties and responsibilities set forth in
Paragraph 4(a) and upon the other terms and conditions set out in this
Agreement. Employer and Executive agree that such employment may be through a
co-employment relationship with a professional employer organization, subject to
the requirements of Paragraph 4(a). Executive represents, covenants, and
warrants that his employment by Employer does not and will not breach agreements
that Executive may have entered into with other companies. For the avoidance of
doubt, Executive represents, covenants, and warrants that his employment by
Employer will not breach any confidentiality agreements, non-competition
agreements or non-solicitation agreements that Executive may have entered into
with others.

 

3.                                    Term. Executive’s employment under this
Agreement shall continue from the Effective Date until June 30, 2016 (the
“Employment Term”), unless sooner terminated as provided in this Agreement. The
Employment Term shall be extended automatically for a one-year period beginning
July 1, 2016 and each successive Annual Period thereafter on which Executive
remains employed by Employer; provided, however, that if, prior to May 31 during
any such Annual Period, either Party shall give written notice to the other that
no such automatic extension shall occur, then Executive’s employment shall
terminate on the last day of the Annual Period during which such notice is given
unless sooner terminated as provided in this Agreement.

 

4.                                    Position and Duties.

 

(a)                             During the Employment Term, Executive shall be
employed as Vice President of Legal and Commercial Affairs and Corporate
Secretary, under the direction and subject to the control of the Chief Executive
Officer and the Board (which direction shall be such as is customarily exercised
over Executive), and Executive shall have all such powers and authority with
respect to the business, affairs, properties and operations as may be reasonably
incident to Executive’s duties and responsibilities. In addition, Executive
shall have such other duties, functions, responsibilities, and authority as are
from time to time delegated to Executive by the Chief Executive Officer and the
Board; provided, however, that such duties, functions, responsibilities, and
authority are reasonable and customary for a person serving in the same or
similar capacity of an enterprise comparable to Employer. The assignment to
Executive of duties and/or responsibilities that are materially inconsistent
with Executive’s status, positions, duties, responsibilities and functions with
Employer immediately prior to the effective date of such assignment or the
removal of Executive from, or the failure to re-elect Executive to, any material
corporate office of Employer held by Executive immediately prior to such
effective date shall constitute a material breach of this Agreement by Employer.

 

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(b)                               During the Employment Term, Executive shall
devote his full business time, skill, and attention and his best efforts to the
business and affairs of Employer to the extent necessary to discharge fully,
faithfully, and efficiently the duties and responsibilities delegated and
assigned to Executive in or pursuant to this Agreement, except for usual,
ordinary, and customary periods of vacation and absence due to illness or other
disability and as otherwise specified in this Paragraph. Employer agrees that it
shall not be a violation of this Paragraph for Executive to (i) serve on
corporate, civic or charitable boards or committees, (ii) deliver lectures,
fulfill speaking engagements or teach at educational institutions, and
(iii) manage personal investments, so long as in the case of (i), (ii) and
(iii) above such activities do not significantly interfere or conflict with the
performance of Executive’s responsibilities under this Agreement or the
interests of Employer. Executive shall not become a member of the board of
directors or committees of any other for profit business organization without
prior written consent of the Board.

 

(c)                                In connection with Executive’s employment
under this Agreement, Executive shall be based in Houston, Texas, or at any
other place where the principal executive offices of Employer may be located
during the Employment Term, subject to the provisions of Paragraph 1(j)(iii).
Executive also will engage in such travel as the performance of Executive’s
duties in the business of Employer may require.

 

(d)                               All services that Executive may render to
Employer or any of its Affiliates in any capacity during the Employment Term
shall be deemed to be services required by this Agreement and the consideration
for such services is that provided for in this Agreement.

 

(e)                                Executive hereby acknowledges that he has
read and is familiar with Employer’s policies regarding business ethics and
conduct, and will comply with all such provisions, and any amendments thereto,
during the Employment Term.

 

5.                                      Compensation and Related Matters.

 

(a)                               Base Salary. During each Annual Period of the
Employment Term, Employer shall pay to Executive for his services under this
Agreement an annual base salary (“Base Salary”). The Base Salary on the
Effective Date shall be $281,000. On January 1, 2016 the Base Salary will
increase to $295,000. The Base Salary is subject to further adjustments, at the
discretion of the Board, but in no event shall Employer pay Executive a Base
Salary less than that set forth above, or than any increased Base Salary later
in effect, without the consent of Executive. The Base Salary is earned pro rata
and shall be payable in installments in accordance with the general payroll
practices of Employer, or as otherwise mutually agreed upon.

 

(b)                              Annual Incentives.

 

(i)                               Beginning with the Effective Date, Executive
will participate in any incentive compensation plan (“ICP”) applicable to
Executive’s position, as may be adopted by Employer from time to time and in
accordance with the terms of such plan. Executive’s annual cash target award
opportunity under the ICP will be 75% of Executive’s Base Salary (as in effect
at the end of the Annual Period) with a threshold of 50% and a 100% maximum, and
shall be subject to such other terms, conditions and restrictions as may be
established by the Board or the Compensation, Nominating, and Corporate
Governance Committee of the Board (“ICP Bonus Award”). Executive and the Board
have agreed that the performance metrics for the ICP Bonus Award applicable to
the first Annual Period will mirror the metrics of the Chief Executive Officer
as approved by the Compensation, Nominating, and Corporate Governance Committee
in May 2015 subject to the above minimum and maximum thresholds. With respect to
any subsequent Annual Period(s), Executive and the Chief Executive Officer will
develop and submit to the

 

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Compensation, Nominating, and Corporate Governance Committee of the Board, for
review and approval, proposed performance metrics by no later than May 1 of the
then-current Annual Period, and the Board and Executive will strive to have the
performance metrics finalized by no later than May 15. Any ICP Bonus Award
determined earned will be paid to Executive within 30 days after the end of the
Annual Period to which it relates.

 

(ii)                            In addition to any ICP Bonus Award that he earns
under the ICP, Employer will also grant Executive an annual award of stock
options under its equity incentive plan then in effect in an amount equal to 25%
of the number of dollars of the cash award (e.g., if the cash award is $100,000,
Executive would receive an award of options to purchase 25,000 shares of
Employer’s common stock) (the “ICP Options”). The ICP Options will have an
exercise price equal to the fair market value of Employer’s common stock on the
grant date, with vesting and expiration as set by the Board or the Compensation,
Nominating, and Corporate Governance Committee, it being understood that the
agreement for the ICP Options may include a provision that the ICP Options may
not be exercised unless the Company’s stockholders approve an amendment to the
Company’s equity incentive plan that increases the number of shares authorized
under the plan. In addition to the equity award grants provided for in this
Paragraph, Employer may grant Executive additional grants based on achieving
longer-term performance metrics.

 

(c)                               Employee Benefits. During the Employment Term,
Executive shall be entitled to participate in all employee benefit plans,
programs, and arrangements that are generally made available by Employer to its
senior executives, including without limitation Employer’s life insurance,
long-term disability, and health plans. Executive acknowledges and agrees that
cooperation and participation in medical or physical examinations may be
required by one or more insurance companies in connection with the applications
for such life and/or disability insurance policies.

 

(d)                              Expenses. Executive shall be entitled to
receive reimbursement for all reasonable expenses incurred by Executive during
the Employment Term in performing his duties and responsibilities under this
Agreement, consistent with Employer’s policies or practices for reimbursement of
expenses incurred by other senior executives of Employer (“Business Expenses”).
Notwithstanding the foregoing or any other provision of this Agreement to the
contrary, for purposes of this Paragraph 5(d), Paragraph 7(g) (to the extent the
280G Gross-Up Payment and 409A Gross-Up Payment are subject to Section 409A),
and Paragraph 7(h), (i) the amount of expenses eligible for reimbursement during
a calendar year may not affect the expenses eligible for reimbursement in any
other calendar year, (ii) the reimbursement must be made on or before the last
day of the calendar year following the calendar year in which the expense was
incurred and (iii) the right to reimbursement shall not be subject to
liquidation or exchange for any other benefit.

 

(e)                              Vacation. During each Annual Period of the
Employment Term, Executive shall be eligible for five weeks’ paid vacation, as
well as sick pay and other paid and unpaid time off in accordance with the
policies and practices of Employer. Executive agrees to use his vacation and
other paid time off at such times that are (i) consistent with the proper
performance of his duties and responsibilities and (ii) mutually convenient for
Employer and Executive.

 

(f)                               Fringe Benefits. During the Employment Term,
Executive shall be entitled to the perquisites and other fringe benefits that
are made available by Employer to its senior executives generally and to such
perquisites and fringe benefits that are made available by Employer to Executive
in particular, subject to any applicable terms and conditions of any specific
perquisite or other fringe benefit. However, Executive shall NOT receive a
fringe benefit for club memberships or non-profit organization memberships.

 

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(g)                              Directors and Officers (D&O) Liability
Insurance. Employer has obtained a D&O insurance policy and provided Executive a
copy of the policy.

 

6.                                      Termination of Employment.

 

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

 

(b)                             Inability to Perform. Employer may terminate
Executive’s employment for Inability to Perform.

 

(c)                              Termination by Employer for Cause. Subject to
the provisions of this Paragraph 6(c), Employer may terminate Executive’s
employment for Cause by providing Executive with a Notice of Termination as set
out in Paragraph 6(f). If Employer notifies Executive of its intent to terminate
Executive’s employment in whole or part under provisions (ii), (iii), (iv), (v),
(vi) or (viii) of the definition of Cause, the Notice of Termination must first
provide Executive with a reasonable period of time to correct those
circumstances or events Employer contends give rise to the existence of Cause
under such provision(s) (the “Correction Period”), but not to the extent the
Board makes a reasonable, good faith determination that those circumstances or
events cannot reasonably be corrected, in which case, the Notice of Termination
must describe the basis for that determination. A 30-day Correction Period shall
be presumptively reasonable. In all cases, Executive will be given the
opportunity within 30 calendar days after his receipt of Employer’s Notice of
Termination for Cause to defend himself with respect to the circumstances or
events specified in such notice and in a manner and under such procedures as the
Board may establish. At a minimum, such procedures shall allow Executive to meet
with the Board, with Executive’s attorney if desired by Executive. Nothing in
this Paragraph 6(c) precludes informal discussions between Executive and any
member of the Board regarding such circumstances or events.

 

(d)                             Termination by Executive for Good Reason.
Executive may terminate his employment for Good Reason. To exercise his right to
terminate for Good Reason, Executive must provide a Notice of Termination
(subject to Employer’s opportunity to remedy as described below) within 90 days
after the date he first becomes aware of the condition(s) giving rise to the
Good Reason; otherwise, Executive is deemed to have accepted the condition(s),
or Employer’s correction of such condition(s), that may have given rise to the
existence of Good Reason. Employer shall have 30 days to remedy the Good Reason
condition(s). If not remedied within that 30-day period, Executive may terminate
for Good Reason in accordance with the Notice of Termination.

 

(e)                               Termination by Either Party Without Cause or
Without Good Reason. Either Employer or Executive may terminate Executive’s
employment without Cause or without Good Reason upon at least 30 days’ prior
written notice to the other Party. Upon termination without Cause or upon
receipt of a Notice of Termination from Executive without Good Reason, Employer
may elect to relieve Executive of his duties, and pay his pro rata Base Salary
and provide him his employment benefits for the notice period, none of which
shall constitute Good Reason.

 

(f)                                Notice of Termination. Any termination of
Executive’s employment by Employer or by Executive (other than a termination
pursuant to Paragraph 6(a)) shall be communicated by a written Notice of
Termination. A “Notice of Termination” is a written notice that must
(i) indicate the specific termination provision in this Agreement relied upon;
(ii) in the

 

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case of a termination for Inability to Perform, Cause, or Good Reason, set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision invoked; and (iii) if
the termination is by Executive under Paragraph 6(e), or by Employer for any
reason, specify the Employment Termination Date. The failure by Employer or
Executive to set forth in the Notice of Termination any fact or circumstance
that contributes to a showing of Cause or Good Reason shall not waive any right
of Employer or Executive or preclude either of them from asserting such fact or
circumstance in enforcing or defending their rights.

 

(g)                               Employment Termination Date. The “Employment
Termination Date”, whether occurring before or after a change of control of
Employer, shall be as follows: (i) if Executive’s employment is terminated by
his death, the date of his death; (ii) if Executive’s employment is terminated
by Employer because of his Inability to Perform the date specified in the Notice
of Termination, which date shall be no earlier than the date such notice is
given; (iii) if Executive’s employment is terminated by Employer for Cause, the
date specified in the Notice of Termination, which date shall not be earlier
than the last day of the Correction Period (if applicable); (iv) if Executive’s
employment is terminated by Executive for Good Reason, the last day of
Employer’s remedy period, which date shall be 30 days after the date on which
the Notice of Termination is given in accordance with Paragraph 6(d); (v) if the
termination is under Paragraph 6(e), the date specified in the Notice of
Termination, which date shall be no earlier than 30 days after the date such
notice is given; or (vi) if Executive’s employment is terminated by expiration
of the Employment Term, the date the Employment Term expires.

 

(h)                              Deemed Resignation. In the event of termination
of Executive’s employment, Executive agrees that if at such time he is a member
of the Board or is an officer of Employer or a director or officer of any of its
Affiliates, he shall be deemed to have resigned from such position(s) effective
on the Employment Termination Date, unless the Board and Executive agree in
writing prior to the Employment Termination Date that Executive shall remain a
member of the Board, in which case Executive shall not be deemed to have
resigned his position as a member of the Board merely by virtue of the
termination of his employment. Executive agrees to execute and deliver any
documents evidencing his resignation from such positions that Employer may
reasonably request; provided, however, that no such document shall affect the
date that Executive ceased to be a Board member as described above such that
Executive continues to have duties as a Board member beyond the date specified
in the preceding sentence.

 

(i)                                  Investigation: Suspension. Employer may
suspend Executive with pay pending (a) an investigation as described in
Paragraph 1(d)(viii), or (b) a determination by the Board whether Executive has
engaged in acts or omissions constituting Cause. Such a paid suspension shall
not constitute a termination of Executive’s employment, or Good Reason.
Executive agrees to cooperate with Employer in connection with any such
investigation.

 

7.                                       Compensation Upon Termination of
Employment.

 

(a)                              Death. If Executive’s employment is terminated
by reason of Executive’s death, Employer shall pay to such person as Executive
shall designate in a written notice to Employer (or, if no such person is
designated, to his estate) any unpaid portion of Executive’s Base Salary earned
pro rata through the Employment Termination Date and any ICP Bonus Award earned
during a previous Annual Period that has not been paid to Executive (the
“Compensation Payment”), any earned but unused vacation (the “Vacation
Payment”), and any unreimbursed Business Expenses, at the time and in the manner
required by applicable law but in no event later than 30 business days after the
Employment Termination Date. In addition, all Employer stock options and
restricted stock awards held by Executive as of the Employment Termination Date
shall be fully and immediately vested, and Executive’s estate or other
authorized representative or

 

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beneficiary will have twelve months after the Employment Termination Date to
exercise all Employer stock options, provided that in no event may such stock
options be exercised after the latest date upon which the options would have
expired by their original terms.

 

(b)                              Inability to Perform. If Executive’s employment
is terminated by reason of Executive’s Inability to Perform, Employer shall pay
to Executive the Compensation Payment, the Vacation Payment, and any
unreimbursed Business Expenses at the time and in the manner required by
applicable law but in no event later than 30 business days after the Employment
Termination Date. In addition, all Employer stock options and restricted stock
awards held by Executive as of the Employment Termination Date shall be fully
and immediately vested, and Executive will have twelve months after the
Employment Termination Date to exercise all Employer stock options, provided
that in no event may such stock options be exercised after the latest date upon
which the options would have expired by their original terms.

 

(c)                               Termination by Executive Without Good Reason
or Upon Expiration of Employment Term Due to Executive Notice. If Executive’s
employment is terminated by Executive pursuant to and in compliance with
Paragraph 6(e) or if Executive notifies Employer under Paragraph 3 of the
discontinuance of automatic extensions of the Employment Term and as a result
Executive’s employment ends upon the expiration of the Employment Term, Employer
shall pay to Executive the Compensation Payment, the Vacation Payment, and any
unreimbursed Business Expenses, at the time and in the manner required by
applicable law but in no event later than 30 business days after the Employment
Termination Date.

 

(d)                             Termination for Cause. If Executive’s employment
is terminated by Employer for Cause, Employer shall pay to Executive the
Compensation Payment, the Vacation Payment, and any unreimbursed Business
Expenses, at the time and in the manner required by applicable law but in no
event later than 30 business days after the Employment Termination Date.

 

(e)                              Termination Without Cause or With Good Reason
or Upon Expiration of Employment Term Due to Employer Notice. If Executive’s
employment is terminated by Employer for any reason other than death, Inability
to Perform, or Cause; is terminated by Executive for Good Reason during the
Employment Term; or ends upon the expiration of the Employment Term due to
Employer notifying Executive under Paragraph 3 of the discontinuance of
automatic extensions of the Employment Term,

 

(i)                                   Employer shall pay to Executive the
Compensation Payment, the Vacation Payment, and any unreimbursed Business
Expenses, at the time and in the manner required by applicable law but in no
event later than 30 business days after the Employment Termination Date.

 

(ii)                                In addition but subject to subparagraph
(iii) of this Paragraph 7(e), Employer shall pay or provide to Executive in lieu
of any other severance or separation benefits (including, without limitation,
those set forth in Employer’s Involuntary Termination Severance Plan), the
following if, within 45 days (or within the expiration of such other applicable
review and revocation period as may then be mandated by law) after the
Employment Termination Date, Executive has signed a general release agreement
and does not revoke such release:

 

(A)                             An amount equal to Executive’s annual Base
Salary as in effect on the Employment Termination Date;

 

(B)                             An amount equal to the greater of
(i) Executive’s Fully Earned but unpaid annual ICP Bonus Award for the Annual
Period in effect on the Employment

 

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Termination Date, or (ii) if Executive’s ICP Bonus Award has not been Fully
Earned, the annual ICP Bonus Award at the target level for the Annual Period in
effect on the Employment Termination Date.  For purposes of this Paragraph,
“Fully Earned” means Executive has achieved (i) for the first Annual Period, the
performance metrics of the Chief Executive Officer for the ICP Bonus Award
applicable to the first Annual Period as approved by the Compensation,
Nominating, and Corporate Governance Committee in May 2015, or (ii) for any
subsequent Annual Period, the performance metrics of Executive Officer as
approved by the Compensation, Nominating, and Corporate Governance Committee for
the ICP Bonus Award applicable to the Annual Period in effect on the Employment
Termination Date;

 

(C)                             Full and immediate vesting of all Employer stock
options and restricted stock awards held by Executive as of the Employment
Termination Date;

 

(D)                             Executive will have twelve months after the
Employment Termination Date, to exercise all Employer stock options, provided
that in no event may such stock options be exercised after the latest date upon
which the options would have expired by their original terms.

 

(E)                              Amounts payable under Paragraphs
7(e)(ii)(A)—(B) shall be payable to Executive in a single lump sum payment in
cash within 60 days after the Employment Termination Date; provided that if such
60-day period begins in one taxable year and ends in a subsequent taxable year,
payment shall occur in the second taxable year of such 60-day period.

 

(iii)                             Employer’s obligation under Paragraph
7(e)(ii) is limited as follows:

 

(A)                        If Executive engages in any conduct that materially
violates Paragraph 8 or engages in any of the Restricted Activities described in
Paragraph 9, Employer’s obligation to make payments to Executive under Paragraph
7(e)(ii), if any such obligation remains, shall end as of the date Employer so
notifies Executive in writing; provided that such obligation shall not end if an
arbitrator finally determines in accordance with Paragraph 27 that Executive did
not materially violate Paragraph 8 or engage in any of the Restricted Activities
described in Paragraph 9; and

 

(B)                         If Executive is found guilty or enters into a plea
agreement, consent decree, or similar arrangement with respect to any felony
criminal offense or any material violation of federal or state securities laws,
or has a cease-and-desist order, injunction, or other penalty or judgment issued
or entered in any material civil enforcement action brought against him by any
United States regulatory agency or by a court of competent jurisdiction in a
proceeding commenced by such a regulatory agency (in either case, regardless of
whether Executive admits or denies the substantive allegations, and in each case
for actions or omissions related to his employment with Employer or any of its
Affiliates), (1) Employer’s obligation to make payments to Executive under
Paragraph 7(e)(ii) shall end as of the date that Employer so notifies Executive
in writing, and (2) Executive shall repay to Employer any amounts paid to him
pursuant to Paragraph 7(e)(ii) within 30 days after receipt of a written request
to do so by Employer.

 

(f)                                  Parachute Payment Excise Tax Gross Up. In
the event that it is determined that any payment (other than the 280G Gross-Up
Payment provided for in this Paragraph 7(f)) or distribution by Employer or any
of its Affiliates to or for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement, policy, plan, program
or arrangement, including without limitation any stock option or similar right,
or the lapse or termination of any restriction on or the vesting or
exercisability of any of the foregoing (a “Payment”), would be subject to the

 

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excise tax imposed by Section 4999 of the Code (or any successor provision
thereto) by reason of being considered “contingent on a change in ownership or
control” of Employer, within the meaning of Section 280G of the Code or any
successor provision thereto (such tax being hereafter referred to as the “280G
Excise Tax”), then Executive will be entitled to receive an additional payment
or payments (a “280G Gross-Up Payment”). The 280G Gross-Up Payment will be in an
amount such that, after payment by Executive of all taxes, including any 280G
Excise Tax imposed upon the 280G Gross-Up Payment, Executive retains an amount
of the 280G Gross-Up Payment equal to the 280G Excise Tax imposed upon the
Payment. For purposes of determining the amount of the 280G Gross-Up Payment,
Executive will be considered to pay (x) federal income taxes at the highest rate
in effect in the year in which the 280G Gross-Up Payment will be made and
(y) state and local income taxes at the highest rate in effect in the state or
locality in which the 280G Gross-Up Payment would be subject to state or local
tax, net of the maximum reduction in federal income tax that could be obtained
from deduction of such state and local taxes. The determination of whether the
280G Excise Tax would be imposed, the amount of such 280G Excise Tax, and the
calculation of the amounts referred to in this Paragraph 7(f) will be made at
the expense of Employer by Employer’s regular independent accounting firm (the
“Accounting Firm”), which shall provide detailed supporting calculations. Any
determination by the Accounting Firm will be binding upon Employer and
Executive. The 280G Gross-Up Payment will be paid to Executive as soon as
administratively practicable following, but no later than the end of the
calendar year in which falls the date on which Executive remits the related
taxes.

 

(g)                                Section 409A Excise Tax Gross Up. Executive
and Employer each acknowledges and agrees that if the terms of this Agreement
(as may be modified pursuant to Paragraph 7(j)) or any action or omission by
Employer in its performance under this Agreement, causes any payment or benefit
received or to be received by Executive from Employer pursuant to this Agreement
(the “Agreement Payments”) to be subject to the excise tax and additional
interest imposed by Code Section 409A(a)(l)(B) as a result of a nonappealable
decision by a court of competent jurisdiction (the “409A Excise Tax”), Employer
shall pay Executive, at the time specified below, an additional amount (the
“409A Gross-Up Payment”) such that the net amount that Executive retains, after
deduction of the 409A Excise Tax on the Agreement Payments; any federal, state,
and local income and employment taxes upon the 409A Gross-Up Payment; any
additional 409A Excise Taxes upon the 409A Gross-Up Payment; and any interest,
penalties, or additions to tax payable by Executive with respect thereto, shall
be equal to the total present value (using the applicable federal rate (as
defined in section 1274(d) of the Code) in such calculation) of the Agreement
Payments at the time such payments are to be made. Payment of such additional
amount shall occur on or before the earlier to occur of (i) the date which
Employer is required to withhold any such taxes and (ii) the date on which
Executive remits such taxes to the Internal Revenue Service (to the extent not
withheld). For purposes of determining the amount of the 409A Gross-Up Payment,
Executive shall be deemed to pay federal income taxes at the highest marginal
rates of federal income taxation applicable to individuals in the calendar year
in which the 409A Gross-Up Payment is to be made and state and local income
taxes at the highest marginal rates of taxation applicable to individuals as are
in effect in the state and locality of Executive’s residence in the calendar
year in which the 409A Gross-Up Payment is to be made, net of the maximum
reduction in federal income taxes that can be obtained from deduction of such
state and local taxes, taking into account any limitations applicable to
individuals subject to federal income tax at the highest marginal rates. The
409A Gross-Up Payment is not intended to duplicate any payments that may be due
under Section 7(e) of this Agreement and will not limit in any way Executive’s
obligations with respect to executing and not revoking a general release as
provided under Section 7(e).

 

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(h)                               Health Insurance. In addition, if Executive’s
employment with Employer or an Affiliate or successor of Employer is terminated
or ends under the circumstances set forth in Paragraph 7(e), Executive will
receive, in addition to any other payments due under this Agreement, the
following benefit: if, at the time of the Employment Termination Date, Executive
participates in one or more health plans offered or made available by Employer
and Executive is eligible for and elects to receive continued coverage under
such plans in accordance with Code Section 4980B(f) and the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“COBRA”) or any successor law, Employer will,
to the extent not a violation of applicable law relating to insured health plans
including violations that would result in the imposition of penalties upon
Employer, reimburse Executive during the 18-month period following the
Employment Termination Date, for the difference between the total amount of the
monthly COBRA premiums for the same coverage as in effect on the Employment
Termination Date, that are actually paid by Executive for such continued health
plan benefits and the total monthly amount of the same premiums charged to
active senior executives of Employer for health insurance coverage. Such
reimbursement shall be made within the 90-day period following Executive’s
payment of each monthly COBRA premium. Provided, however, that Employer’s
reimbursement obligation under this Paragraph 7(h) shall terminate upon the
earlier of (i) the expiration of the time period described above or (ii) the
date Executive becomes eligible for health insurance coverage under a subsequent
employer’s plan without being subject to any preexisting-condition exclusion
under that plan, which occurrence Executive shall promptly report to Employer.

 

(i)                                  Exclusive Compensation and Benefits. The
compensation and benefits described in this Paragraph 7, along with the
associated terms for payment, constitute all of Employer’s obligations to
Executive with respect to the ending of Executive’s employment with Employer
and/or its Affiliates, subject to Paragraph 23 and the remainder of this
Paragraph 7(i). Accordingly, Executive and Employer expressly acknowledge and
agree that, following the Employment Termination Date, Executive shall have no
rights to any employment by Employer or its Affiliates (including employment as
described in Paragraphs 2, 3, and 4 of this Agreement), and no rights to any
further compensation or benefits under Paragraph 5 of this Agreement, provided
that Executive shall remain eligible for coverage under Employer’s D&O insurance
policy or policies to the extent provided by the terms of such policy or
policies. Executive and Employer further acknowledge and agree that nothing in
this Agreement is intended to limit or terminate (i) any obligations of Employer
or Executive under the other terms of this Agreement, including, but not limited
to, with respect to Employer, its obligations under Paragraphs 12 and 20, and,
with respect to Executive, his obligations under Paragraphs 6(h), 8, 9, 10, 13,
21, and 22, or (ii) any earned, vested benefits (other than any entitlement to
severance or separation pay, if any) that Executive may have under the
applicable provisions of any benefit plan of Employer in which Executive is
participating at the time of the termination of employment.

 

(j)                                 Section 409A Matters. This Agreement is
intended to comply with Section 409A, including the exceptions thereto, and will
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 involuntary separation from service or as a short-term deferral shall be
excluded from Section 409A to the maximum extent possible. If a provision of the
Agreement would result in the imposition of an applicable tax under
Section 409A, the Parties agree that such provision shall be amended to the
extent permitted by Section 409A to avoid imposition of the applicable tax, with
such amendment effected in a manner that has the most favorable result to
Executive.

 

For purposes of Section 409A, each payment or amount provided for or due under
this Agreement shall be considered a separate payment, and Executive’s
entitlement to a series of payments under this Agreement is to be treated as an
entitlement to a series of separate payments. Any payments to

 

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be made under this Agreement in connection with Executive’s termination of
employment shall only be made if such termination of employment constitutes a
“separation from service” as defined in Section 409A.

 

If (i) Executive is a “specified employee,” as such term is defined in
Section 409A and determined as described below in this Paragraph 7(j), and
(ii) any payment due under this Agreement is subject to Section 409A and is
required to be delayed under Section 409A because Executive is a specified
employee, that payment shall be payable on the earlier of (A) the first business
day that is six months after Executive’s separation from service, as such term
is defined in Section 409A, (B) the date of Executive’s death, or (C) the date
that otherwise complies with the requirements of Section 409A. This Paragraph
7(j) shall be applied by accumulating all payments that otherwise would have
been paid within six months after Executive’s separation and paying such
accumulated amounts on the earliest business day which complies with the
requirements of Section 409A. For purposes of determining the identity of
specified employees, the Board may establish procedures as it deems appropriate
in accordance with Section 409A.

 

(k)                             Payment after Executive’s Death. In the event of
Executive’s death after he becomes entitled to a payment or payments pursuant to
this Paragraph 7, any remaining unpaid amounts shall be paid, at the time and in
the manner such payments otherwise would have been paid to Executive, to such
person as Executive shall designate in a written notice to Employer (or, if no
such person is designated, to his estate).

 

(l)                                 Offset. Executive agrees that Employer may
set off against, and Executive authorizes Employer to deduct from, any payments
due to Executive, or to his heirs, legal representatives, or successors, as a
result of the termination of Executive’s employment any amounts which may be due
and owing to Employer or any of its Affiliates by Executive, whether arising
under this Agreement or otherwise; provided, however, that any such set off and
deduction shall be made only to the extent it does not result in the imposition
of any additional tax under Section 409A to the extent applicable.

 

8.                                     Confidential Information.

 

(a)                             Executive acknowledges and agrees that
(i) Employer and its Affiliates are engaged in a highly competitive business;
(ii) Employer and its Affiliates have expended considerable time and resources
to develop goodwill with their customers, vendors, and others, and to create,
protect, and exploit Confidential Information; (iii) Employer must continue to
prevent the dilution of its and its Affiliates’ goodwill and unauthorized use or
disclosure of its Confidential Information to avoid harm to its legitimate
business interests; (iv) in the acquisition, development and marketing of crude
oil and natural gas, chemicals or other hydrocarbon products, his participation
in or direction of Employer’s or its Affiliates’ day-to-day operations and
strategic planning are an integral part of Employer’s continued success and
goodwill; (v) given his position and responsibilities, he necessarily will be
creating Confidential Information that belongs to Employer and enhances
Employer’s goodwill, and in carrying out his responsibilities he in turn will be
relying on Employer’s goodwill and the disclosure by Employer to him of
Confidential Information; and (vi) he will have access to Confidential
Information that could be used by any Competitor of Employer in a manner that
would harm Employer’s competitive position in the marketplace and dilute its
goodwill. Employer acknowledges and agrees that nothing in this Agreement
precludes Executive from accepting employment from any third party employer
after termination of employment with Employer and its Affiliates for whatever
reason, provided that Executive complies with his obligations under Paragraph
8(d) and at law with respect to the Confidential Information.

 

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(b)                             Employer acknowledges and agrees that Executive
must have and continue to have throughout his employment the benefits and use of
its and its Affiliates’ goodwill and Confidential Information in order to
properly carry out his responsibilities. Employer accordingly promises upon
execution and delivery of this Agreement to provide Executive immediate and
continuing access to Confidential Information and to authorize him to engage in
activities that will create new and additional Confidential Information.

 

(c)                               Employer and Executive thus acknowledge and
agree that during Executive’s employment with Employer, and upon execution and
delivery of this Agreement, he (i) will receive Confidential Information that is
unique, proprietary, and valuable to Employer and/or its Affiliates; (ii) will
create Confidential Information that is unique, proprietary, and valuable to
Employer and/or its Affiliates; and (iii) will benefit, including without
limitation by way of increased earnings and earning capacity, from the goodwill
Employer and its Affiliates have generated and from the Confidential
Information.

 

(d)                               Accordingly, Executive acknowledges and agrees
that at all times during his employment by Employer and/or any of its Affiliates
and thereafter:

 

(i)                                  all Confidential Information shall remain
and be the sole and exclusive property of Employer and/or its Affiliates;

 

(ii)                               he will protect and safeguard all
Confidential Information;

 

(iii)                            he will hold all Confidential Information in
strictest confidence and not, directly or indirectly, disclose or divulge any
Confidential Information to any person other than an officer, director, or
employee of, or legal counsel for, Employer or its Affiliates, to the extent
necessary for the proper performance of his responsibilities unless authorized
to do so by Employer or compelled to do so by law or valid legal process;

 

(iv)                           if he believes he is compelled by law or valid
legal process to disclose or divulge any Confidential Information, he will
notify Employer in writing sufficiently in advance of any such disclosure to
allow Employer the opportunity to defend, limit, or otherwise protect its
interests against such disclosure;

 

(v)                              at the end of his employment with Employer for
any reason or at the request of Employer at any time, he will return to Employer
all Confidential Information and all copies thereof, in whatever tangible form
or medium, including electronic; and

 

(vi)                           absent the promises and representations of
Executive in this Paragraph 8 and in Paragraph 9, Employer would require him
immediately to return any tangible Confidential Information in his possession,
would not provide Executive with new and additional Confidential Information,
would not authorize Executive to engage in activities that will create new and
additional Confidential Information, and would not enter or have entered into
this Agreement.

 

9.                                     Nonsolicitation Obligations. In
consideration of Employer’s promises to provide Executive with Confidential
Information and to authorize him to engage in activities that will create new
and additional Confidential Information upon execution and delivery of this
Agreement, and the other promises and undertakings of Employer in this
Agreement, Executive agrees that, while he is employed by Employer and/or any of
its Affiliates and for a 2-year period following the end of that employment for
any reason, he shall not engage in any of the following activities (the
“Restricted Activities”):

 

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(a)                            He will not, whether on his own behalf or on
behalf of any other individual, partnership, firm, corporation or business
organization, either directly or indirectly solicit, induce, persuade, or
entice, or endeavor to solicit, induce, persuade, or entice, any person who is
then employed by or otherwise engaged to perform services for Employer or its
Affiliates to leave that employment or cease performing those services; and

 

(b)                            He will not, whether on his own behalf or on
behalf of any other individual, partnership, firm, corporation or business
organization, either directly or indirectly solicit, induce, persuade, or
entice, or endeavor to solicit, induce, persuade, or entice, any person who is
then a customer, supplier, or vendor of Employer or any of its Affiliates to
cease being a customer, supplier, or vendor of Employer or any of its Affiliates
or to divert all or any part of such person’s or entity’s business from Employer
or any of its Affiliates.

 

Executive acknowledges and agrees that the restrictions contained in this
Paragraph 9 are ancillary to an otherwise enforceable agreement, including
without limitation the mutual promises and undertakings set forth in Paragraph
8; that Employer’s promises and undertakings set forth in Paragraph 8 and
Executive’s position and responsibilities with Employer give rise to Employer’s
interest in restricting Executive’s post-employment activities; that such
restrictions are designed to enforce Executive’s promises and undertakings set
forth in this Paragraph 9 and his common-law obligations and duties owed to
Employer and its Affiliates; that the restrictions are reasonable and necessary,
are valid and enforceable under Texas law, and do not impose a greater restraint
than necessary to protect Employer’s goodwill, Confidential Information, and
other legitimate business interests; that he will immediately notify Employer in
writing should he believe or be advised that the restrictions are not, or likely
are not, valid or enforceable under Texas law or the law of any other state that
he contends or is advised is applicable; that the mutual promises and
undertakings of Employer and Executive under Paragraphs 8 and 9 are not
contingent on the duration of Executive’s employment with Employer; that absent
the promises and representations made by Executive in this Paragraph 9 and
Paragraph 8, Employer would require him to return any Confidential Information
in his possession, would not provide Executive with new and additional
Confidential Information, would not authorize Executive to engage in activities
that will create new and additional Confidential Information, and would not
enter or have entered into this Agreement; and that his obligations under
Paragraphs 8 and 9 supplement, rather than supplant, his common-law duties of
confidentiality and loyalty owed to Employer.

 

Employer agrees that any action that is undertaken by a subsequent employer of
Executive will not be treated as an action by Executive for purposes of the
foregoing provisions of this Paragraph 9 unless Executive personally engages in
a Restricted Activity, whether directly or indirectly.

 

10.                              Intellectual Property.

 

(a)                            In consideration of Employer’s promises and
undertakings in this Agreement, Executive agrees that all Work Product will be
disclosed promptly by Executive to Employer, shall be the sole and exclusive
property of Employer, and is hereby assigned to Employer, regardless of whether
(i) such Work Product was conceived, made, developed or worked on during regular
hours of his employment or his time away from his employment, (ii) the Work
Product was made at the suggestion of Employer; or (iii) the Work Product was
reduced to drawing, written description, documentation, models or other tangible
form. Without limiting the foregoing, Executive acknowledges that all original
works of authorship that are made by Executive, solely or jointly with others,
within the scope of his employment and that are protectable by copyright are
“works made for hire,” as that term is defined in the United States Copyright
Act (17 U.S.C., Section 101), and are therefore owned by Employer from the time
of creation.

 

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(b)                             Executive agrees to assign, transfer, and set
over, and Executive does hereby assign, transfer, and set over to Employer, all
of his right, title and interest in and to all Work Product, without the
necessity of any further compensation, and agrees that Employer is entitled to
obtain and hold in its own name all patents, copyrights, and other rights in
respect of all Work Product. Executive agrees to (i) cooperate with Employer
during and after his employment with Employer in obtaining patents or copyrights
or other intellectual-property protection for all Work Product; (ii) execute,
acknowledge, seal, and deliver all documents tendered by Employer to evidence
its ownership thereof throughout the world; and (iii) cooperate with Employer in
obtaining, defending, and enforcing its rights therein.

 

(c)                              Executive represents that there are no other
contracts to assign inventions or other intellectual property that are now in
existence between Executive and any other person or entity. Executive further
represents that he has no other employment or undertakings that might restrict
or impair his performance of this Agreement. Executive will not in connection
with his employment by Employer, use or disclose to Employer any confidential,
trade secret, or other proprietary information of any previous employer or other
person that Executive is not lawfully entitled to disclose.

 

11.                           Reformation. If the provisions of Paragraphs 8, 9,
or 10 are ever deemed by a court to exceed the limitations permitted by
applicable law, Executive and Employer agree that such provisions shall be, and
are, automatically reformed to the maximum limitations permitted by such law.

 

12.                           Indemnification and Insurance. Employer shall
indemnify Executive both (i) to the fullest extent permitted by the laws of the
State of Delaware, and (ii) in accordance with the more favorable of Employer’s
certificate of incorporation, bylaws and standard indemnification agreement as
in effect on the Effective Date or as in effect on the date as of which the
indemnification is owed. In addition, Employer shall provide Executive with
coverage under directors’ and officers’ liability insurance policies on terms
not less favorable than those provided to any of its other directors and
officers as in effect from time to time.

 

13.                           Assistance in Litigation. During the Employment
Term and thereafter for the lifetime of Executive, Executive shall, upon
reasonable notice, furnish such information and proper assistance to Employer or
any of its Affiliates as may reasonably be required by Employer in connection
with any litigation, investigations, arbitrations, and/or any other fact-finding
or adjudicative proceedings involving Employer or any of its Affiliates. This
obligation shall include, without limitation, to promptly upon request meet with
counsel for Employer or any of its Affiliates and provide truthful testimony at
the request of Employer or as otherwise required by law or valid legal process.
Following the Employment Term, Employer shall reimburse Executive for all
reasonable out-of-pocket expenses incurred by Executive and approved in advance
by Employer in rendering such assistance (such as travel, parking, and meals but
not attorney’s fees), but shall have no obligation to compensate Executive for
his time in providing information and assistance in accordance with this
Paragraph 13, provided that such reimbursement shall be made on or before the
last day of the calendar year following the calendar year in which the expense
is incurred, and provided further that Executive’s obligations under this
Paragraph 13 following the Employment Termination Date shall not unreasonably
interfere with Executive’s employment or other activities and endeavors.

 

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14.                            No Obligation to Pay. With regard to any payment
due to Executive under this Agreement, it shall not be a breach of any provision
of this Agreement for Employer to fail to make such payment to Executive if
(i) Employer is prohibited from making the payment; (ii) Employer would be
obligated to recover the payment if it was made; or (iii) Executive would be
obligated to repay the payment if it was made; provided, however, that this
Paragraph 14 shall only apply if such prohibition or obligation is legally
imposed by statute or regulation.

 

15.                            Deductions and Withholdings. With respect to any
payment to be made to Executive, Employer shall deduct, where applicable, any
amounts authorized by Employee, and shall withhold and report all amounts
required to be withheld and reported by applicable law.

 

16.                            Notices. All notices, requests, demands, and
other communications required or permitted to be given or made by either Party
shall be in writing and shall be deemed to have been duly given or made (a) when
delivered personally, or (b) when deposited in the United States mail, first
class registered or certified mail, postage prepaid, return receipt requested,
to the Party for which intended at the following addresses (or at such other
addresses as shall be specified by the Parties by like notice, except that
notices of change of address shall be effective only upon receipt):

 

(i)                                  If to Employer, at:

 

Hyperdynamics Corporation

Attn: Chairman of the Board of Directors

12012 Wickchester Lane Suite 475

Houston, Texas 77079

 

(ii)                               If to Executive, at Executive’s then-current
home address on file with Employer.

 

17.                            Injunctive Relief. Executive acknowledges and
agrees that Employer would not have an adequate remedy at law and would be
irreparably harmed in the event that any of the provisions of Paragraphs 8, 9,
and 10 were not performed in accordance with their specific terms or were
otherwise breached. Accordingly, Executive agrees that Employer shall be
entitled to equitable relief, including preliminary and permanent injunctions
and specific performance, in the event Executive breaches or threatens to breach
any of the provisions of such Paragraphs, without the necessity of posting any
bond or proving special damages or irreparable injury. Such remedies shall not
be deemed to be the exclusive remedies for a breach or threatened breach of this
Agreement by Executive, but shall be in addition to all other remedies available
to Employer at law or equity.

 

18.                         Mitigation. Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise, nor shall the amount of any payment provided for
in this Agreement be reduced by any compensation earned by Executive as the
result of employment by another employer after the date of termination of
Executive’s employment with Employer, or otherwise.

 

19.                         Binding Effect; No Assignment by Executive: No Third
Party Benefit. This Agreement shall be binding upon and inure to the benefit of
the Parties and their respective heirs, legal representatives, successors, and
assigns; provided, however, that Executive shall not assign or otherwise
transfer this Agreement or any of his rights or obligations under this
Agreement. Subject to Paragraph 20, Employer is authorized to assign or
otherwise transfer this Agreement or any of its rights or obligations under this
Agreement only to an Affiliate of Employer. Executive shall not have any right
to pledge, hypothecate, anticipate, or in any way create a lien upon any
payments or other benefits provided under this Agreement; and no benefits
payable under this Agreement shall be assignable in anticipation of payment
either by voluntary or involuntary acts, or by operation of law, except by will
or pursuant to the laws of descent and distribution.

 

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Nothing in this Agreement, express or implied, is intended to or shall confer
upon any person other than the Parties, and their respective heirs, legal
representatives, successors, and permitted assigns, any rights, benefits, or
remedies of any nature whatsoever under or by reason of this Agreement.

 

20.                         Assumption by Successor. Employer shall ensure that
any successor or assignee (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all the business and/or
assets of Employer or the oil and gas acquisition, exploration, development and
production business of Employer, either by operation of law or written
agreement, assumes the obligations of this Agreement (the “Assumption
Obligation”). If Employer fails to fulfill the Assumption Obligation, such
failure shall be considered a material breach of this Agreement for purposes of
Paragraph 1(i)(iv); provided, however, that the compensation to which Executive
would be entitled pursuant to Paragraph 7 upon a termination for Good Reason
shall be the sole remedy of Executive for any failure by Employer to fulfill the
Assumption Obligation. As used in this Agreement, “Employer” shall include any
successor or assignee (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all the business and/or
assets of Employer or the oil and gas exploration, development and production
business of Employer that executes and delivers the agreement provided for in
this Paragraph 20 or that otherwise becomes obligated under this Agreement by
operation of law.

 

21.                         Governing Law. This Agreement and the employment of
Executive, as well as any arbitration proceedings hereunder, shall be governed
by the laws of the State of Texas except for its laws with respect to conflict
of laws

 

22.                         Entire Agreement. This Agreement contains the entire
agreement between the Parties concerning the subject matter expressly addressed
herein and supersedes all prior agreements and understandings, written and oral,
between the Parties with respect to such subject matter. However, nothing in
this Paragraph 22 is intended to limit any obligations of the Parties under any
other agreement that Employer may enter into with Executive after the earlier of
the Effective Date or the execution of this Agreement by Executive. The
provisions of this Agreement which provide for accelerated vesting and extended
exercisability of stock options shall constitute amendments to any stock option
agreements previously or hereafter entered into between Executive and Employer.

 

23.                         Modification; Waiver. No person, other than pursuant
to a resolution duly adopted by the members of the Board, shall have authority
on behalf of Employer to agree to modify, amend, or waive any provision of this
Agreement. Further, this Agreement may not be changed orally, but only by a
written agreement signed by the Party against whom any waiver, change,
amendment, modification or discharge is sought to be enforced. Each Party
acknowledges and agrees that no breach by the other Party of this Agreement or
failure to enforce or insist on its rights under this Agreement shall constitute
a waiver or abandonment of any such rights or defense to enforcement of such
rights.

 

24.                         Construction. This Agreement is to be construed as a
whole, according to its fair meaning, and not strictly for or against any of the
Parties.

 

25.                         Severability. If any provision of this Agreement
shall be determined by a court to be invalid or unenforceable, the remaining
provisions of this Agreement shall not be affected thereby, shall remain in full
force and effect, and shall be enforceable to the fullest extent permitted by
applicable law.

 

26.                         Counterparts. This Agreement may be executed by the
Parties in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same agreement.

 

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27.                         ARBITRATION. ALL DISPUTES RELATING TO OR ARISING OUT
OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION THE SCOPE AND INTERPRETATION OF
THIS ARBITRATION CLAUSE AND THE JURISDICTION OF THE ARBITRATOR, SHALL BE
RESOLVED BY ARBITRATION USING THREE ARBITRATORS FOLLOWING THE RULES OF
ARBITRATION OF THE AMERICAN ARBITRATION ASSOCIATION. ALL COSTS OF THE
ARBITRATION SHALL BE PAID BY EMPLOYER. THE ARBITRATION PANEL SHALL BE SELECTED
AS FOLLOWS: EMPLOYER SHALL SELECT ONE ARBITRATOR, EXECUTIVE SHALL SELECT ONE
ARBITRATOR, AND THE TWO ARBITRATORS THUS SELECTED SHALL SELECT THE THIRD
ARBITRATOR. THE ARBITRATOR SHALL HAVE THE DISCRETION TO MODIFY THE ARBITRATION
PROVISIONS OF THIS AGREEMENT TO THE EXTENT NECESSARY TO AVOID A FINDING THAT
SUCH ARBITRATION PROVISIONS ARE UNCONSCIONABLE OR UNENFORCEABLE. SUCH
ARBITRATION SHALL BE THE SOLE AND EXCLUSIVE REMEDY FOR ALL SUCH DISPUTES AND
CONTROVERSIES RELATING TO OR ARISING OUT OF THIS AGREEMENT. THE DECISION OF THE
ARBITRATOR SHALL BE FINAL AND BINDING WITH REGARD TO EACH PARTY TO THE
ARBITRATION.

 

IN WITNESS WHEREOF, Employer has caused this Agreement to be executed on its
behalf by its duly authorized officer, and Executive has executed this
Agreement, effective as of the date first set forth above.

 

 

EMPLOYER

 

EXECUTIVE

 

 

 

 

 

 

HYPERDYNAMICS CORPORATION

 

 

 

 

 

 

 

 

By:

/s/ RAY LEONARD

 

By:

/s/ PAOLO AMORUSO

Name: Ray Leonard

 

Name: Paolo Amoruso, Individually

Title:   Chief Executive Officer

 

Title:   Vice President of Legal and Commercial
Affairs and Corporate Secretary

 

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