Exhibit 10.1

 

JONES ENERGY, LLC.

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT (this “Agreement”) dated as of February 27, 2019, between
Jones Energy, LLC, a Delaware corporation (the “Company”), and Thomas Hester
(the “Employee”).

 

W I T N E S S E T H

 

WHEREAS, the Employee is currently serving as the Chief Financial Officer of the
Company; and

 

WHEREAS, the Company desires to continue to employ the Employee as its Chief
Financial Officer, and the Employee desires to continue to be employed by the
Company in such position on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
contained herein and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

1.             POSITION AND DUTIES.

 

(a)           During the Employment Term (as defined in Section 2 hereof), the
Employee shall serve as the Chief Financial Officer of the Company.  In this
capacity, the Employee shall have the duties, authorities and responsibilities
as are commensurate with the duties, authorities and responsibilities of persons
in similar capacities in similarly sized companies, and such other duties,
authorities and responsibilities as may reasonably be assigned to the Employee
by the Company’s Chief Executive Officer (the “CEO”) that are not inconsistent
with the Employee’s position as Chief Financial Officer of the Company.  The
Employee’s principal place of employment with the Company shall be in Austin,
Texas, provided that the Employee understands and agrees that the Employee may
be required to travel from time to time for business purposes. The Employee
shall report directly to the CEO.

 

(b)           During the Employment Term, the Employee shall devote
substantially all of the Employee’s business time, energy, business judgment,
knowledge and skill and the Employee’s best efforts to the performance of the
Employee’s duties with the Company, provided that the foregoing shall not
prevent the Employee from (i) serving on the boards of directors of non-profit
organizations, (ii) participating in charitable, civic, educational,
professional, community or industry affairs, and (iii) managing the Employee’s
passive personal investments so long as such activities in the aggregate do not
materially interfere or conflict with the Employee’s duties hereunder or create
a potential business or fiduciary conflict.

 

2.             EMPLOYMENT TERM.  The Company agrees to employ the Employee
pursuant to the terms of this Agreement, and the Employee agrees to be so
employed, for a term of two (2) years (the “Initial Term”) commencing as of
February 27, 2019 (the “Effective Date”).

 

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On each anniversary of the Effective Date following the Initial Term, the term
of this Agreement shall be automatically extended for successive one-year
periods, provided, however, that either party hereto may elect not to extend
this Agreement by giving written notice to the other party at least one hundred
and twenty (120) days prior to any such anniversary date.  Notwithstanding the
foregoing, the Employee’s employment hereunder may be earlier terminated in
accordance with Section 7  hereof, subject to Section 8 hereof.  The period of
time between the Effective Date and the termination of the Employee’s employment
hereunder shall be referred to herein as the “Employment Term.”

 

3.             BASE SALARY.  The Company agrees to pay the Employee a base
salary at an annual rate of $378,000, payable in accordance with the regular
payroll practices of the Company, but not less frequently than monthly. The
Employee’s Base Salary shall be subject to annual review by the Company’s Board
of Directors (the “Board”) (or a committee thereof), and may be adjusted, from
time to time by the Board, subject to Section 7(e) hereof. The base salary as
determined herein and adjusted from time to time shall constitute “Base Salary”
for purposes of this Agreement.

 

4.             ANNUAL BONUS.  Commencing with the 2019 performance year and
during the Employment Term, the Employee shall be eligible to receive an annual
discretionary incentive payment under the Company’s annual bonus plan as may be
in effect from time to time (the “Annual Bonus”) based on a target bonus
opportunity of eighty percent (80%) of Base Salary (the “Target Bonus”)
(provided that the Board or the Company’s Compensation Committee (the
“Committee”) may, in its discretion, pay the Employee a greater Annual Bonus),
upon the attainment of certain pre-established performance goals established by
the Board or the Committee after discussion with the CEO in its sole discretion,
and subject to the Employee’s continued employment with the Company through the
date of payment (provided such payment is made in the ordinary course of
business and consistent with historical practices) of any such Annual Bonus
ultimately earned.

 

5.             EQUITY AWARDS.  The Employee will be eligible to participate in
any future Management Incentive Plan established by the Company or any successor
thereto.

 

6.             EMPLOYEE BENEFITS.

 

(a)           BENEFIT PLANS.  During the Employment Term, the Employee shall be
entitled to participate in any employee benefit plan that the Company has
adopted or may adopt, maintain or contribute to for the benefit of its employees
generally, subject to satisfying the applicable eligibility requirements, except
to the extent such plans are duplicative of the benefits otherwise provided to
hereunder.  The Employee’s participation will be subject to the terms of the
applicable plan documents and generally applicable Company policies. 
Notwithstanding the foregoing, the Company may modify or terminate any employee
benefit plan at any time.

 

(b)           VACATIONS.  During the Employment Term, the Employee shall be
entitled to twenty (20) days of paid vacation per calendar year (as prorated for
partial years) in accordance with the Company’s policy on accrual and use
applicable to employees as in effect from time to time.  Up to five (5) days of
any accrued and unused vacation time may be carried forward to use in the first
quarter of the following year. The Employee will also be eligible for up to five
(5) days

 

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of personal time each calendar year which do not carry forward.  Vacation may be
taken at such times and intervals as the Employee determines, subject to the
business needs of the Company.

 

(c)           BUSINESS EXPENSES.  Upon presentation of reasonable substantiation
and documentation as the Company may specify from time to time, the Employee
shall be reimbursed in accordance with the Company’s expense reimbursement
policy, for all reasonable out-of-pocket business expenses incurred and paid by
the Employee during the Employment Term and in connection with the performance
of the Employee’s duties hereunder.

 

7.             TERMINATION.  The Employee’s employment and the Employment Term
shall terminate on the first of the following to occur:

 

(a)           DISABILITY.  Upon ten (10) business days’ prior written notice by
the Company to the Employee of termination due to Disability.  For purposes of
this Agreement, “Disability” shall be defined as the inability of the Employee
to have performed the Employee’s material duties hereunder due to a physical or
mental injury, infirmity or incapacity for one hundred eighty (180) days
(including weekends and holidays) in any 365-day period as determined by the
Board in its reasonable discretion.  The Employee shall cooperate in all
respects with the Company if a question arises as to whether the Employee has
become disabled, including, without limitation, submitting to reasonable
examinations by one or more medical doctors and other health care specialists
selected by the Company and authorizing such medical doctors and other health
care specialists to discuss the Employee’s condition with the Company.

 

(b)           DEATH.  Automatically upon the date of death of the Employee.

 

(c)           CAUSE.  Immediately upon written notice by the Company to the
Employee of a termination for Cause.  “Cause” shall mean:

 

(i)            the refusal to perform the Employee’s material job duties that
continues for at least ten (10) days after written notice from the Company;

 

(ii)           material violation of a material policy of the Company that
causes material damage to the Company and that is not cured within fifteen (15)
days of written notice from the Company;

 

(iii)          the Employee’s failure to cooperate in any audit or investigation
of the business or financial practices of the Company or any of its
subsidiaries;

 

(iv)          willful misconduct or gross negligence in the course of the
Employee’s duties that causes material damage to the Company;

 

(v)           indictment for, conviction of, or pleading of guilty or nolo
contendere to a felony or any crime involving moral turpitude; or

 

(vi)          the material breach of the restrictive covenant provisions in
Section 10 hereof, that causes material damage to the Company and that is not
cured within fifteen (15) days of written notice from the Company.

 

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Any determination of Cause by the Company will be made by a resolution approved
by a majority of the members of the Board, provided, that no such determination
may be made until the Employee has been given written notice detailing the
specific Cause event and a period of thirty (30) days following receipt of such
notice to cure such event (if susceptible to cure) to the satisfaction of the
Board.  Notwithstanding anything to the contrary contained herein, the
Employee’s right to cure as set forth in Sections 7(c)(i), (ii), and (v) hereof 
shall not apply if there are habitual or repeated breaches by the Employee.

 

(d)           WITHOUT CAUSE.  Immediately upon written notice by the Company to
the Employee of an involuntary termination without Cause (other than for death
or Disability).

 

(e)           GOOD REASON.  Upon written notice by the Employee to the Company
of a termination for Good Reason.  “Good Reason” shall mean the occurrence of
any of the following events, without the express written consent of the
Employee, unless such events are fully corrected in all material respects by the
Company within fifteen (15) days following written notification by the Employee
to the Company of the occurrence of one of the reasons set forth below:

 

(i)            diminution in the Employee’s Base Salary or Target Bonus;

 

(ii)           material diminution in the Employee’s titles, duties,
authorities, or responsibilities (other than temporarily while physically or
mentally incapacitated or as required by applicable law);

 

(iii)          the Company’s material violation of this Agreement;

 

(iv)          relocation of the Employee’s primary office location by more than
35 miles; or

 

(v)           a material reduction in the Employee’s severance benefits (it
being understood that any such reduction shall not be applied to the Employee
terminating for Good Reason as a result of such reduction).

 

(f)            The Employee shall provide the Company with a written notice
detailing the specific circumstances alleged to constitute Good Reason within
forty-five (45) days after the first occurrence of such circumstances, and
actually terminate employment within fifteen (15) days following the expiration
of the Company’s fifteen (15)-day cure period described above.  Otherwise, any
claim of such circumstances as “Good Reason” shall be deemed irrevocably waived
by the Employee.

 

(g)           WITHOUT GOOD REASON.  Upon ninety (90) days’ prior written notice
by the Employee to the Company of the Employee’s voluntary termination of
employment without Good Reason (which the Company may, in its sole discretion,
make effective earlier than any notice date).

 

(h)           EXPIRATION OF EMPLOYMENT TERM; NON-EXTENSION OF AGREEMENT.  Upon
the expiration of the Employment Term due to a non-extension of the Agreement by
the Company or the Employee pursuant to the provisions of Section 2 hereof.

 

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8.             CONSEQUENCES OF TERMINATION.

 

(a)           DEATH.  In the event that the Employee’s employment and the
Employment Term ends on account of the Employee’s death, the Employee or the
Employee’s estate, as the case may be, shall be entitled to the following (with
the amounts due under Sections 8(a)(i) through 8(a)(iv) hereof to be paid within
sixty (60) days following termination of employment, or such earlier date as may
be required by applicable law):

 

(i)            any unpaid Base Salary through the date of termination;

 

(ii)           any Annual Bonus earned but unpaid with respect to the fiscal
year ending on or preceding the date of termination;

 

(iii)          reimbursement for any unreimbursed business expenses incurred
through the date of termination;

 

(iv)          any accrued but unused vacation time in accordance with Company
policy; and

 

(v)           all other payments, benefits or fringe benefits to which the
Employee shall be entitled under the terms of any applicable compensation
arrangement or benefit, equity or fringe benefit plan or program or grant or
this Agreement (collectively, Sections 8(a)(i) through 8(a)(v) hereof shall be
hereafter referred to as the “Accrued Benefits”).

 

In addition, the Company shall pay the Employee’s estate a pro-rata portion of
the Employee’s Annual Bonus for the fiscal year in which the Employee’s
termination occurs based on actual results for such year (determined by
multiplying the amount of such bonus which would be due for the full fiscal year
by a fraction, the numerator of which is the number of days during the fiscal
year of termination that the Employee is employed by the Company and the
denominator of which is 365) payable at the same time bonuses for such year are
paid to other senior executives of the Company.

 

(b)           DISABILITY.  In the event that the Employee’s employment and/or
Employment Term ends on account of the Employee’s Disability, the Company shall
pay or provide the Employee with the Accrued Benefits. In addition, the Company
shall pay the Employee a pro-rata portion of the Employee’s Annual Bonus for the
fiscal year in which the Employee’s termination occurs based on actual results
for such year (determined by multiplying the amount of such bonus which would be
due for the full fiscal year by a fraction, the numerator of which is the number
of days during the fiscal year of termination that the Employee is employed by
the Company and the denominator of which is 365) payable at the same time
bonuses for such year are paid to other senior executives of the Company.

 

(c)           TERMINATION FOR CAUSE OR WITHOUT GOOD REASON OR AS A RESULT OF
EMPLOYEE NON-EXTENSION OF THIS AGREEMENT.  If the Employee’s employment is
terminated (x) by the Company for Cause, (y) by the Employee without Good
Reason, or (z) as a result of the Employee’s non-extension of the Employment
Term as provided in Section 2 hereof, the Company shall pay to the Employee the
Accrued Benefits other than the benefit described in Section 8(a)(ii) hereof if
such termination is for Cause.

 

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(d)           TERMINATION WITHOUT CAUSE OR FOR GOOD REASON OR AS A RESULT OF
COMPANY NON-EXTENSION OF THIS AGREEMENT.  If the Employee’s employment by the
Company is terminated (x) by the Company other than for Cause (excluding a
Change of Control as set forth under Section 8(e)), (y) by the Employee for Good
Reason, or (z) as a result of the Company’s non-extension of the Employment Term
as provided in Section 2 hereof (excluding a Change of Control as set forth
under Section 8(e)), the Company shall pay or provide the Employee with the
following, subject to the provisions of Section 24 hereof and the Employee’s
continued compliance with the obligations in Sections 9, 10 and 11 hereof:

 

(i)            the Accrued Benefits;

 

(ii)           a pro-rata portion of the Employee’s Annual Bonus for the fiscal
year in which the Employee’s termination occurs based on actual results for such
year (determined by multiplying the amount of such bonus which would be due for
the full fiscal year by a fraction, the numerator of which is the number of days
during the fiscal year of termination that the Employee is employed by the
Company and the denominator of which is 365) payable at the same time bonuses
for such year are paid to other senior executives of the Company;

 

(iii)          an amount equal to the Employee’s Base Salary plus the Employee’s
Target Bonus, payable in a lump sum within the first thirty (30) days following
the Employee’s termination; and

 

(iv)          subject to (A) the Employee’s timely election of continuation
coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”) and (B) the Employee’s continued copayment of premiums at the
same level and cost to the Employee as if the Employee were an employee of the
Company (excluding, for purposes of calculating cost, an employee’s ability to
pay premiums with pre-tax dollars),continued participation in the Company’s
group health plan (to the extent permitted under applicable law and the terms of
such plan) which covers the Employee (and the Employee’s eligible dependents)
for a period of twelve (12) months, provided that the Employee is eligible and
remains eligible for COBRA coverage; provided, further, that the Company may
modify the continuation coverage contemplated by this Section 8(d)(iv) to the
extent reasonably necessary to avoid the imposition of any excise taxes on the
Company for failure to comply with the nondiscrimination requirements of the
Patient Protection and Affordable Care Act of 2010, as amended, and/or the
Health Care and Education Reconciliation Act of 2010, as amended (to the extent
applicable); and provided, further, that in the event that the Employee obtains
other employment that offers group health benefits, such continuation of
coverage by the Company under this Section 8(d)(iv) shall immediately cease.

 

Payments and benefits provided in this Section 8(d) shall be in lieu of any
termination or severance payments or benefits for which the Employee may be
eligible under any of the plans, policies or programs of the Company or under
the Worker Adjustment Retraining Notification Act of 1988 or any similar state
statute or regulation.

 

(e)           TERMINATION IN CONNECTION WITH A CHANGE OF CONTROL.

 

(i)            Definition of Change of Control.  For purposes of this Agreement,
a “Change of Control” shall mean the occurrence of one or more of the following
events:

 

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1.             Any “person” or “group” within the meaning of those terms as used
in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended, other than an affiliate of the Company, shall become the beneficial
owner, by way of merger consolidation, recapitalization, reorganization or
otherwise, of fifty percent (50%) or more of the combined voting power of the
equity interests in the Company;

 

2.             The Company’s shareholders approve, in one or a series of
transactions, a plan of complete liquidation of the Company; or

 

3.             The sale or other disposition by the Company of all or
substantially all of its assets in one or more transactions to any person other
than an affiliate of the Company.

 

Notwithstanding the foregoing, (x) with respect to a payment that is subject to
section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), a
“Change of Control” shall mean a “change of control event” as defined in the
regulations and guidance issued under section 409A of the Code, and (y) a Change
of Control shall not be deemed to have occurred solely by virtue of the filing
of a voluntary petition by, or an involuntary petition against, the Company
under Chapter 11 of Title 11 of the U.S. Code, it being understood, however,
that the foregoing shall not apply to consummation of a plan of reorganization
or any other transactions or series of transactions pursuant to, arising from,
in connection with, or following, any such petition filing.

 

(ii)           If, (1) during the twelve (12) months immediately following the
occurrence of a Change of Control of the Company, Executive is terminated by the
Company without Cause or resigns for Good Reason (as defined above) or (2) in
the three (3) months immediately following Executive’s termination by the
Company without Cause (the “Tail Period”), (i) a Change of Control occurs, or
(ii) the Company enters into a definitive agreement to undergo a Change of
Control and such Change in Control actually occurs (each, as applicable, the
“Change of Control Period”), Executive will be entitled to receive (A) within
thirty (30) days after the date of termination, his Accrued Benefits (as defined
above); (B) on the 60th day following the date of termination, a lump sum
payment of an amount equaling two (2) times the sum of Employee’s Base Salary
and Employee’s Target Bonus paid or payable with respect to the calendar year
preceding the year in which the Change of Control occurs; and (C) a pro-rata
portion of the Employee’s Annual Bonus for the fiscal year in which the
Employee’s termination occurs based on actual results for such year (determined
by multiplying the amount of such bonus which would be due for the full fiscal
year by a fraction, the numerator of which is the number of days during the
fiscal year of termination that the Employee is employed by the Company and the
denominator of which is 365) payable at the same time bonuses for such year are
paid to other senior executives of the Company (collectively, the “Change of
Control Payment”).  For the sake of clarity, if benefits become payable under
Section 8(d) during the Tail Period, such benefits shall be paid and Executive
will be trued up if benefits under this Section 8(e) subsequently become payable
thereunder. Solely for purposes of the Change of Control Payment, Executive’s
Base Salary (and Target Bonus, as applicable) shall be valued as in effect at
the time of the Change of Control.

 

(f)            CODE SECTION 280G.  To the extent that any amount payable to the
Employee hereunder, as well as any other “parachute payment,” as such term is
defined under Section 280G of the Internal Revenue Code, payable to the Employee
in connection with the Employee’s

 

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employment by the Company or any of its affiliates, exceed the limitations of
Section 280G of the Internal Revenue Code such that an excise tax will be
imposed under Section 4999 of the Code, such parachute payments shall be reduced
to the extent necessary to avoid application of the excise tax in the following
order:  (i) any cash severance based on a multiple of Base Salary or Annual
Bonus, (ii) any other cash amounts payable to the Employee, (iii) benefits
valued as parachute payments, and (iv) acceleration of vesting of any equity
awards.

 

(g)           OTHER OBLIGATIONS.  Upon any termination of the Employee’s
employment with the Company, the Employee shall promptly resign from the Board
and any other position as an officer, director or fiduciary of any
Company-related entity.

 

(h)           EXCLUSIVE REMEDY.  The amounts payable to the Employee following
termination of employment and the Employment Term hereunder pursuant to Sections
7 and 8 hereof shall be in full and complete satisfaction of the Employee’s
rights under this Agreement and any other claims that the Employee may have in
respect of the Employee’s employment with the Company or any of its affiliates,
and the Employee acknowledges that such amounts are fair and reasonable, and are
the Employee’s sole and exclusive remedy, in lieu of all other remedies at law
or in equity, with respect to the termination of the Employee’s employment
hereunder or any breach of this Agreement.

 

9.             RELEASE; NO MITIGATION.  Any and all amounts payable and benefits
or additional rights provided pursuant to this Agreement beyond the Accrued
Benefits (other than amounts described in Section 8(a)(iii) hereof) shall only
be payable if the Employee delivers to the Company and does not revoke a general
release of claims in favor of the Company in substantially the form set forth as
Exhibit A hereto.  Such release shall be executed and delivered (and no longer
subject to revocation, if applicable) within sixty (60) days following
termination.  The Employee shall not be required to mitigate his damages in
order to receive the amounts payable under Sections 7 and 8 hereof.

 

10.          RESTRICTIVE COVENANTS.

 

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

 

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proprietary information received from third parties subject to a duty on the
Company’s and its subsidiaries’ and affiliates’ part to maintain the
confidentiality of such information, and to use such information only for
certain limited purposes, in each case, which shall have been obtained by the
Employee during the Employee’s employment by the Company (or any predecessor). 
The foregoing shall not apply to information that (i) was known to the public
prior to its disclosure to the Employee; (ii) becomes generally known to the
public subsequent to disclosure to the Employee through no wrongful act of the
Employee or any representative of the Employee; or (iii) the Employee is
required to disclose by applicable law, regulation or legal process (provided
that the Employee provides the Company with prior notice of the contemplated
disclosure and cooperates with the Company at its expense in seeking a
protective order or other appropriate protection of such information).  The
terms and conditions of this Agreement shall remain strictly confidential, and
the Employee hereby agrees not to disclose the terms and conditions hereof to
any person or entity, other than immediate family members, legal advisors or
personal tax or financial advisors, or prospective future employers solely for
the purpose of disclosing the limitations on the Employee’s conduct imposed by
the provisions of this Section 10 who, in each case, agree to keep such
information confidential.

 

(b)           NONCOMPETITION.  The Employee acknowledges that (i) the Employee
performs services of a unique nature for the Company that are irreplaceable, and
that the Employee’s performance of such services to a competing business will
result in irreparable harm to the Company, (ii) the Employee has had and will
continue to have access to Confidential Information which, if disclosed, would
unfairly and inappropriately assist in competition against the Company or any of
its affiliates, (iii) in the course of the Employee’s employment by a
competitor, the Employee would inevitably use or disclose such Confidential
Information, (iv) the Company and its affiliates have substantial relationships
with their customers and the Employee has had and will continue to have access
to these customers, (v) the Employee has received and will receive specialized
training from the Company and its affiliates, and (vi) the Employee has
generated and will continue to generate goodwill for the Company and its
affiliates in the course of the Employee’s employment.  Accordingly, during the
Employee’s employment hereunder and for a period of one (1) year thereafter, the
Employee agrees that the Employee will not, directly or indirectly, own, manage,
operate, control, be employed by (whether as an employee, consultant,
independent contractor or otherwise, and whether or not for compensation) or
render services to any person, firm, corporation or other entity, in whatever
form, engaged in competition with the Company or any of its subsidiaries or
affiliates in any other material business in which the Company or any of its
subsidiaries or affiliates is engaged on the date of termination or in which the
Board has considered, on or prior to such date, to have the Company or any of
its subsidiaries or affiliates become engaged in on or after such date, in
Oklahoma and the Texas Panhandle, and any basin or area in which the Company’s
Board has actively considered having the Company operate during the Employment
Term.  Notwithstanding the foregoing, nothing herein shall prohibit the Employee
from being a passive owner of not more than one percent (1%) of the equity
securities of a publicly traded corporation engaged in a business that is in
competition with the Company or any of its subsidiaries or affiliates, so long
as the Employee has no active participation in the business of such corporation.
 In addition, the provisions of this Section 10(b) shall not be violated by the
Employee commencing employment with a subsidiary, division or unit of any entity
that engages in a business in competition with the Company or any of its
subsidiaries or affiliates so long as the Employee and such subsidiary, division
or unit does not engage in a business in competition with the Company or any of
its subsidiaries or affiliates.

 

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(c)           NONSOLICITATION; NONINTERFERENCE.  (i)  During the Employee’s
employment with the Company and for a period of one (1) year thereafter, the
Employee agrees that the Employee shall not, except in the furtherance of the
Employee’s duties hereunder, directly or indirectly, individually or on behalf
of any other person, firm, corporation or other entity, solicit, aid or induce
any customer of the Company or any of its subsidiaries or affiliates to purchase
goods or services then sold by the Company or any of its subsidiaries or
affiliates from another person, firm, corporation or other entity or assist or
aid any other persons or entity in identifying or soliciting any such customer.

 

(ii)           During the Employee’s employment with the Company and for a
period of one (1) years thereafter, the Employee agrees that the Employee shall
not, except in the furtherance of the Employee’s duties hereunder, directly or
indirectly, individually or on behalf of any other person, firm, corporation or
other entity, (A) solicit, aid or induce any employee, representative or agent
of the Company or any of its subsidiaries or affiliates to leave such employment
or retention or to accept employment with or render services to or with any
other person, firm, corporation or other entity unaffiliated with the Company or
hire or retain any such employee, representative or agent, or take any action to
materially assist or aid any other person, firm, corporation or other entity in
identifying, hiring or soliciting any such employee, representative or agent, or
(B) interfere, or aid or induce any other person or entity in interfering, with
the relationship between the Company or any of its subsidiaries or affiliates
and any of their respective vendors, joint venturers or licensors.  An employee,
representative or agent shall be deemed covered by this Section 10(c)(ii) while
so employed or retained and for a period of six (6) months thereafter.

 

(d)           NONDISPARAGEMENT.  During the Employee’s employment with the
Company and for a period of one (1) year thereafter, the Employee agrees not to
make negative comments or otherwise disparage the Company or its officers,
directors, employees, shareholders, agents or products other than in the good
faith performance of the Employee’s duties to the Company while the Employee is
employed by the Company.  The Company agrees that it will direct its directors
and executive officers not to, while employed by the Company or serving as a
director of the Company, as the case may be, make negative comments about the
Employee or otherwise disparage the Employee in any manner that is likely to be
harmful to the Employee’s business reputation.  The foregoing shall not be
violated by truthful statements in response to legal process, required
governmental testimony or filings (including SEC filings), or administrative or
arbitral proceedings (including, without limitation, depositions in connection
with such proceedings), and the foregoing limitation on the Company’s executives
and directors shall not be violated by statements that they in good faith
believe are necessary or appropriate to make in connection with performing their
duties and obligations to the Company.

 

(e)           INVENTIONS.  (i)  The Employee acknowledges and agrees that all
ideas, methods, inventions, discoveries, improvements, work products,
developments, software, know-how, processes, techniques, methods, works of
authorship and other work product, whether patentable or unpatentable, (A) that
are reduced to practice, created, invented, designed, developed, contributed to,
or improved with the use of any Company resources and/or within the scope of the
Employee’s work with the Company or that relate to the business, operations or
actual or demonstrably anticipated research or development of the Company, and
that are made or conceived by the Employee, solely or jointly with others,
during the Employment Term, or (B) suggested by any work that the Employee
performs in connection with the Company, either while

 

10

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performing the Employee’s duties with the Company or on the Employee’s own time,
shall belong exclusively to the Company (or its designee), whether or not patent
or other applications for intellectual property protection are filed thereon
(the “Inventions”).  The Employee will keep full and complete written records
(the “Records”), in the manner prescribed by the Company, of all Inventions, and
will promptly disclose all Inventions completely and in writing to the Company. 
The Records shall be the sole and exclusive property of the Company, and the
Employee will surrender them upon the termination of the Employment Term, or
upon the Company’s request.  The Employee irrevocably conveys, transfers and
assigns to the Company the Inventions and all patents or other intellectual
property rights that may issue thereon in any and all countries, whether during
or subsequent to the Employment Term, together with the right to file, in the
Employee’s name or in the name of the Company (or its designee), applications
for patents and equivalent rights (the “Applications”).  The Employee will, at
any time during and subsequent to the Employment Term, make such applications,
sign such papers, take all rightful oaths, and perform all other acts as may be
requested from time to time by the Company to perfect, record, enforce, protect,
patent or register the Company’s rights in the Inventions, all without
additional compensation to the Employee from the Company.  The Employee will
also execute assignments to the Company (or its designee) of the Applications,
and give the Company and its attorneys all reasonable assistance (including the
giving of testimony) to obtain the Inventions for the Company’s benefit, all
without additional compensation to the Employee from the Company.

 

(ii)           In addition, the Inventions will be deemed Work for Hire, as such
term is defined under the copyright laws of the United States, on behalf of the
Company and the Employee agrees that the Company will be the sole owner of the
Inventions, and all underlying rights therein, in all media now known or
hereinafter devised, throughout the universe and in perpetuity without any
further obligations to the Employee.  If the Inventions, or any portion thereof,
are deemed not to be Work for Hire, or the rights in such Inventions do not
otherwise automatically vest in the Company, the Employee hereby irrevocably
conveys, transfers and assigns to the Company, all rights, in all media now
known or hereinafter devised, throughout the universe and in perpetuity, in and
to the Inventions, including, without limitation, all of the Employee’s right,
title and interest in the copyrights (and all renewals, revivals and extensions
thereof) to the Inventions, including, without limitation, all rights of any
kind or any nature now or hereafter recognized, including, without limitation,
the unrestricted right to make modifications, adaptations and revisions to the
Inventions, to exploit and allow others to exploit the Inventions and all rights
to sue at law or in equity for any infringement, or other unauthorized use or
conduct in derogation of the Inventions, known or unknown, prior to the date
hereof, including, without limitation, the right to receive all proceeds and
damages therefrom.  In addition, the Employee hereby waives any so-called “moral
rights” with respect to the Inventions.  The Employee hereby waives any and all
currently existing and future monetary rights in and to the Inventions and all
patents and other registrations for intellectual property that may issue
thereon, including, without limitation, any rights that would otherwise accrue
to the Employee’s benefit by virtue of the Employee being an employee of or
other service provider to the Company.

 

(f)            RETURN OF COMPANY PROPERTY.  On the date of the Employee’s
termination of employment with the Company for any reason (or at any time prior
thereto at the Company’s request), the Employee shall return all property
belonging to the Company or its affiliates (including, but not limited to, any
Company-provided laptops, computers, cell phones, wireless electronic mail
devices or other equipment, or documents and property belonging to the

 

11

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Company).  The Employee may retain the Employee’s rolodex and similar address
books provided that such items only include contact information.

 

(g)           REASONABLENESS OF COVENANTS.  In signing this Agreement, the
Employee gives the Company assurance that the Employee has carefully read and
considered all of the terms and conditions of this Agreement, including the
restraints imposed under this Section 10 hereof.  The Employee agrees that these
restraints are necessary for the reasonable and proper protection of the Company
and its affiliates and their Confidential Information and that each and every
one of the restraints is reasonable in respect to subject matter, length of time
and geographic area, and that these restraints, individually or in the
aggregate, will not prevent the Employee from obtaining other suitable
employment during the period in which the Employee is bound by the restraints. 
The Employee acknowledges that each of these covenants has a unique, very
substantial and immeasurable value to the Company and its affiliates and that
the Employee has sufficient assets and skills to provide a livelihood while such
covenants remain in force.  The Employee further covenants that the Employee
will not challenge the reasonableness or enforceability of any of the covenants
set forth in this Section 10, and that the Employee will reimburse the Company
and its affiliates for all costs (including reasonable attorneys’ fees) incurred
in connection with any action to enforce any of the provisions of this
Section 10 if the Employee challenges the reasonableness or enforceability of
any of the provisions of this Section 10.  It is also agreed that each of the
Company’s affiliates will have the right to enforce all of the Employee’s
obligations to that affiliate under this Agreement, including without limitation
pursuant to this Section 10.

 

(h)           REFORMATION.  If it is determined by a court of competent
jurisdiction in any state that any restriction in this Section 10 is excessive
in duration or scope or is unreasonable or unenforceable under applicable law,
it is the intention of the parties that such restriction may be modified or
amended by the court to render it enforceable to the maximum extent permitted by
the laws of that state.

 

(i)            TOLLING.  In the event of any violation of the provisions of this
Section 10, the Employee acknowledges and agrees that the post-termination
restrictions contained in this Section 10 shall be extended by a period of time
equal to the period of such violation, it being the intention of the parties
hereto that the running of the applicable post-termination restriction period
shall be tolled during any period of such violation.

 

(j)            SURVIVAL OF PROVISIONS.  The obligations contained in Sections 10
and 11 hereof shall survive the termination or expiration of the Employment Term
and the Employee’s employment with the Company and shall be fully enforceable
thereafter.

 

11.          COOPERATION.  Upon the receipt of reasonable notice from the
Company (including outside counsel), the Employee agrees that while employed by
the Company and thereafter, the Employee will respond and provide information
with regard to matters in which the Employee has knowledge as a result of the
Employee’s employment with the Company, and will provide reasonable assistance
to the Company, its affiliates and their respective representatives in defense
of any claims that may be made against the Company or its affiliates, and will
assist the Company and its affiliates in the prosecution of any claims that may
be made by the Company or its affiliates, to the extent that such claims may
relate to the period of the Employee’s employment with the Company
(collectively, the “Claims”).  The Employee agrees to promptly inform the

 

12

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Company if the Employee becomes aware of any lawsuits involving Claims that may
be filed or threatened against the Company or its affiliates.  The Employee also
agrees to promptly inform the Company (to the extent that the Employee is
legally permitted to do so) if the Employee is asked to assist in any
investigation of the Company or its affiliates (or their actions) or another
party attempts to obtain information or documents from the Employee (other than
in connection with any litigation or other proceeding in which the Employee is a
party-in-opposition) with respect to matters the Employee believes in good faith
to relate to any investigation of the Company or its affiliates, in each case,
regardless of whether a lawsuit or other proceeding has then been filed against
the Company or its affiliates with respect to such investigation, and shall not
do so unless legally required.  During the pendency of any litigation or other
proceeding involving Claims, the Employee shall not communicate with anyone
(other than the Employee’s attorneys and tax and/or financial advisors and
except to the extent that the Employee determines in good faith is necessary in
connection with the performance of the Employee’s duties hereunder) with respect
to the facts or subject matter of any pending or potential litigation or
regulatory or administrative proceeding involving the Company or any of its
affiliates without giving prior written notice to the Company or the Company’s
counsel.  Upon presentation of appropriate documentation, the Company shall pay
or reimburse the Employee for all reasonable attorneys’ fees and out-of-pocket
expenses, including travel, duplicating or telephonic expenses, incurred by the
Employee in complying with this Section 11.

 

12.          WHISTLEBLOWER PROTECTION. Notwithstanding anything to the contrary
contained herein, no provision of this Agreement shall be interpreted so as to
impede the Employee (or any other individual) from reporting possible violations
of federal law or regulation to any governmental agency or entity, including but
not limited to the Department of Justice, the Securities and Exchange
Commission, the Congress, and any agency Inspector General, or making other
disclosures under the whistleblower provisions of federal law or regulation. The
Employee does not need the prior authorization of the Company to make any such
reports or disclosures and the Employee shall not be not required to notify the
Company that such reports or disclosures have been made.

 

13.          EQUITABLE RELIEF AND OTHER REMEDIES.  The Employee acknowledges and
agrees that the Company’s remedies at law for a breach or threatened breach of
any of the provisions of Section 10 or Section 11 hereof would be inadequate
and, in recognition of this fact, the Employee agrees that, in the event of such
a breach or threatened breach, in addition to any remedies at law, the Company,
without posting any bond or other security, shall be entitled to obtain
equitable relief in the form of specific performance, a temporary restraining
order, a temporary or permanent injunction or any other equitable remedy which
may then be available, without the necessity of showing actual monetary
damages.  In the event of a violation by the Employee of Section 10 or
Section 11 hereof, any severance being paid to the Employee pursuant to this
Agreement or otherwise shall immediately cease, and any severance previously
paid to the Employee shall be immediately repaid to the Company.

 

14.          NO ASSIGNMENTS.  This Agreement is personal to each of the parties
hereto.  Except as provided in this Section 14 hereof, no party may assign or
delegate any rights or obligations hereunder without first obtaining the written
consent of the other party hereto.  The Company may assign this Agreement to any
successor to all or substantially all of the business and/or assets of the
Company, provided that the Company shall require such successor to expressly

 

13

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assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.  As used in this Agreement, “Company” shall mean the Company
and any successor to its business and/or assets, which assumes and agrees to
perform the duties and obligations of the Company under this Agreement by
operation of law or otherwise.

 

15.          NOTICE.  For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given (a) on the date of delivery, if delivered by
hand, (b) on the date of transmission, if delivered by confirmed facsimile or
electronic mail, (c) on the first business day following the date of deposit, if
delivered by guaranteed overnight delivery service, or (d) on the fourth
business day following the date delivered or mailed by United States registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

 

If to the Employee:

At the address (or to the facsimile number) shown
in the books and records of the Company.

If to the Company:
807 Las Cimas Parkway
Suite 350
Austin, TX 78746

 

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

 

16.          SECTION HEADINGS; INCONSISTENCY.  The section headings used in this
Agreement are included solely for convenience and shall not affect, or be used
in connection with, the interpretation of this Agreement.  In the event of any
inconsistency between the terms of this Agreement and any form, award, plan or
policy of the Company, the terms of this Agreement shall govern and control.

 

17.          SEVERABILITY.  The provisions of this Agreement shall be deemed
severable.  The invalidity or unenforceability of any provision of this
Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Agreement in such jurisdiction or the
validity, legality or enforceability of any provision of this Agreement in any
other jurisdiction, it being intended that all rights and obligations of the
parties hereunder shall be enforceable to the fullest extent permitted by
applicable law.

 

18.          COUNTERPARTS.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

 

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19.          INDEMNIFICATION.  The Company hereby agrees to indemnify the
Employee and hold the Employee harmless to the extent provided under the By-Laws
of the Company against and in respect of any and all actions, suits,
proceedings, claims, demands, judgments, costs, expenses (including reasonable
attorney’s fees), losses, and damages resulting from the Employee’s good faith
performance of the Employee’s duties and obligations with the Company.  This
obligation shall survive the termination of the Employee’s employment with the
Company.

 

20.          LIABILITY INSURANCE.  The Company shall cover the Employee under
directors’ and officers’ liability insurance both during and, while potential
liability exists, after the term of this Agreement in the same amount and to the
same extent as the Company covers its other officers and directors.

 

21.          GOVERNING LAW; ARBITRATION.  This Agreement, the rights and
obligations of the parties hereto, and any claims or disputes relating thereto,
shall be governed by and construed in accordance with the laws of the State of
Texas (without regard to its choice of law provisions).  Each of the Parties
agrees that any dispute or controversy arising under or in connection with this
Agreement or the Employee’s employment with  the Company, other than injunctive
relief under Section 13 hereof, shall be settled exclusively by arbitration,
conducted before a single arbitrator in the metropolitan area of Houston, Texas
in accordance with the National Rules for the Resolution of Employment Disputes
of the American Arbitration Association then in effect.  The decision of the
arbitrator will be final and binding upon the parties hereto.  Judgment may be
entered on the arbitrator’s award in any court having jurisdiction.  The parties
acknowledge and agree that in connection with any such arbitration and
regardless of outcome, (a) each party shall pay all of its own costs and
expenses, including, without limitation, its own legal fees and expenses, and
(b) the arbitration costs shall be borne entirely by the Company, provided, that
the Employee’s costs and expenses, including, without limitation, its own legal
fees and expenses shall be reimbursed by the Company to the Employee within
fifteen (15) days of the arbitrator’s final decision, if such decision indicates
that the Employee has prevailed on a material issue in dispute.

 

22.          MISCELLANEOUS.  No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Employee and such officer or director as may be
designated by the Board.  No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.  This Agreement together with all exhibits hereto sets
forth the entire agreement of the parties hereto in respect of the subject
matter contained herein and supersedes any and all prior agreements or
understandings between the Employee and the Company with respect to the subject
matter hereof.  No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement.

 

23.          REPRESENTATIONS.  The Employee represents and warrants to the
Company that (a) the Employee has the legal right to enter into this Agreement
and to perform all of the obligations on the Employee’s part to be performed
hereunder in accordance with its terms, and (b) the Employee is not a party to
any agreement or understanding, written or oral, and is not

 

15

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subject to any restriction, which, in either case, could prevent the Employee
from entering into this Agreement or performing all of the Employee’s duties and
obligations hereunder.  In addition, the Employee acknowledges that the Employee
is aware of Section 304 (Forfeiture of Certain Bonuses and Profits) of the
Sarbanes-Oxley Act of 2002 and the right of the Company to be reimbursed for
certain payments to the Employee in compliance therewith.

 

24.          TAX MATTERS.

 

(a)           WITHHOLDING.  The Company may withhold from any and all amounts
payable under this Agreement or otherwise such federal, state and local taxes as
may be required to be withheld pursuant to any applicable law or regulation.  In
the event that the Company fails to withhold any taxes required to be withheld
by applicable law or regulation, the Employee agrees to indemnify the Company
for any amount paid with respect to any such taxes, together with any interest,
penalty and/or expense related thereto.

 

(b)           SECTION 409A COMPLIANCE.

 

(i)            The intent of the parties is that payments and benefits under
this Agreement comply with Internal Revenue Code Section 409A and the
regulations and guidance promulgated thereunder (collectively “Code
Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement
shall be interpreted to be in compliance therewith.  To the extent that any
provision hereof is modified in order to comply with Code Section 409A, such
modification shall be made in good faith and shall, to the maximum extent
reasonably possible, maintain the original intent and economic benefit to the
Employee and the Company of the applicable provision without violating the
provisions of Code Section 409A.  In no event whatsoever shall the Company be
liable for any additional tax, interest or penalty that may be imposed on the
Employee by Code Section 409A or damages for failing to comply with Code
Section 409A.

 

(ii)           A termination of employment shall not be deemed to have occurred
for purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Code
Section 409A and, for purposes of any such provision of this Agreement,
references to a “termination,” “termination of employment” or like terms shall
mean “separation from service.”  Notwithstanding anything to the contrary in
this Agreement, if the Employee is deemed on the date of termination to be a
“specified employee” within the meaning of that term under Code
Section 409A(a)(2)(B), then with regard to any payment or the provision of any
benefit that is considered deferred compensation under Code Section 409A payable
on account of a “separation from service,” such payment or benefit shall not be
made or provided until the date which is the earlier of (A) the expiration of
the six (6)-month period measured from the date of such “separation from
service” of the Employee, and (B) the date of the Employee’s death, to the
extent required under Code Section 409A.  Upon the expiration of the foregoing
delay period, all payments and benefits delayed pursuant to this
Section 24(b)(ii) (whether they would have otherwise been payable in a single
sum or in installments in the absence of such delay) shall be paid or reimbursed
to the Employee in a lump sum following the date of the “separation from
service”, and any remaining payments and benefits due under this Agreement shall
be paid or provided in accordance with the normal payment dates specified for
them herein.

 

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(iii)          To the extent that reimbursements or other in-kind benefits under
this Agreement constitute “nonqualified deferred compensation” for purposes of
Code Section 409A, (A) all expenses or other reimbursements hereunder shall be
made on or prior to the last day of the taxable year following the taxable year
in which such expenses were incurred by the Employee, (B) any right to
reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit, and (C) no such reimbursement, expenses eligible
for reimbursement, or in-kind benefits provided in any taxable year shall in any
way affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year.

 

(iv)          For purposes of Code Section 409A, the Employee’s right to receive
any installment payments pursuant to this Agreement shall be treated as a right
to receive a series of separate and distinct payments.  Whenever a payment under
this Agreement specifies a payment period with reference to a number of days,
the actual date of payment within the specified period shall be within the sole
discretion of the Company.

 

(v)           Notwithstanding any other provision of this Agreement to the
contrary, in no event shall any payment under this Agreement that constitutes
“nonqualified deferred compensation” for purposes of Code Section 409A be
subject to offset by any other amount unless otherwise permitted by Code
Section 409A.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

 

COMPANY

 

 

 

 

 

JONES ENERGY, INC.

 

 

 

By:

/s/ Carl F. Giesler, Jr.

 

Name:

Carl F. Giesler, Jr.

 

 

 

 

Title:

Chief Executive Officer

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

/s/ Thomas Hester

 

Thomas Hester

 

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EXHIBIT A

 

GENERAL RELEASE

 

I,                          , in consideration of and subject to the performance
by Jones Energy, Inc. (together with its subsidiaries, the “Company”), of its
obligations under the Employment Agreement dated as of [DATE] (the “Agreement”),
which are further described on Schedule A attached hereto, do hereby release and
forever discharge as of the date hereof the Company and its respective
affiliates and all present, former and future managers, directors, officers,
employees, successors and assigns of the Company and its affiliates and direct
or indirect owners (collectively, the “Released Parties”) to the extent provided
below (this “General Release”).  The Released Parties are intended to be
third-party beneficiaries of this General Release, and this General Release may
be enforced by each of them in accordance with the terms hereof in respect of
the rights granted to such Released Parties hereunder.  Terms used herein but
not otherwise defined shall have the meanings given to them in the Agreement.

 

1.             My employment or service with the Company and its affiliates
terminated as of [DATE], and I hereby resign from any position as an officer,
member of the board of managers or directors (as applicable) or fiduciary of the
Company or its affiliates (or reaffirm any such resignation that may have
already occurred).  I understand that any payments or benefits paid or granted
to me under Section 8(d) of the Agreement represent, in part, consideration for
signing this General Release and are not salary, wages or benefits to which I
was already entitled.  I understand and agree that I will not receive certain of
the payments and benefits specified in Section 8(d) of the Agreement unless I
execute this General Release and do not revoke this General Release within the
time period permitted hereafter.  Such payments and benefits will not be
considered compensation for purposes of any employee benefit plan, program,
policy or arrangement maintained or hereafter established by the Company or its
affiliates.

 

2.             Except as provided in paragraphs 4 and 5 below and except for the
provisions of the Agreement which expressly survive the termination of my
employment with the Company, I knowingly and voluntarily (for myself, my heirs,
executors, administrators and assigns) release and forever discharge the Company
and the other Released Parties from any and all claims, suits, controversies,
actions, causes of action, cross-claims, counter-claims, demands, debts,
compensatory damages, liquidated damages, punitive or exemplary damages, other
damages, claims for costs and attorneys’ fees, or liabilities of any nature
whatsoever in law and in equity, both past and present (through the date that
this General Release becomes effective and enforceable) and whether known or
unknown, suspected, or claimed against the Company or any of the Released
Parties which I, my spouse, or any of my heirs, executors, administrators or
assigns, may have as of the date hereof, including claims that arise out of or
are connected with my employment with, or my separation or termination from, the
Company and any allegation, claim or violation, arising under:  Title VII of the
Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age
Discrimination in Employment Act of 1967, as amended (including the Older
Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the
Americans with Disabilities Act of 1990; the Family and Medical Leave Act of
1993; the Worker Adjustment Retraining and Notification Act; the Employee
Retirement Income Security Act of 1974; any applicable Executive Order Programs;
the Fair Labor Standards Act; or their state or local

 

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counterparts; or under any other federal, state or local civil or human rights
law, or under any other local, state, or federal law, regulation or ordinance;
or under any public policy, contract or tort, or under common law; or arising
under any policies, practices or procedures of the Company; or any claim for
wrongful discharge, breach of contract, infliction of emotional distress,
defamation; or any claim for costs, fees, or other expenses, including
attorneys’ fees incurred in these matters) (all of the foregoing collectively
referred to herein as the “Claims”).

 

3.             I represent that I have made no assignment or transfer of any
right, claim, demand, cause of action, or other matter covered by paragraph 2
above.

 

4.             I agree that this General Release does not waive or release any
rights or claims that I may have under the Age Discrimination in Employment Act
of 1967 which arise after the date I execute this General Release. I acknowledge
and agree that my separation from employment with the Company in compliance with
the terms of the Agreement shall not serve as the basis for any claim or action
(including, without limitation, any claim under the Age Discrimination in
Employment Act of 1967).

 

5.             I agree that I hereby waive all rights to sue or obtain
equitable, remedial or punitive relief from any or all Released Parties of any
kind whatsoever in respect of any Claim, including, without limitation,
reinstatement, back pay, front pay, and any form of injunctive relief. 
Notwithstanding the above, I further acknowledge that I am not waiving and am
not being required to waive any right that cannot be waived under law, including
the right to file an administrative charge or participate in an administrative
investigation or proceeding; provided, however, that I disclaim and waive any
right to share or participate in any monetary award resulting from the
prosecution of such charge or investigation or proceeding.  Additionally, I am
not waiving (i) any right to the Accrued Benefits or any severance benefits to
which I am entitled under Schedule A, (ii) any claim relating to directors’ and
officers’ liability insurance coverage or any right of indemnification under the
Company’s organizational documents or otherwise, or (iii) my rights as an equity
or security holder in the Company or its affiliates.

 

6.             In signing this General Release, I acknowledge and intend that it
shall be effective as a bar to each and every one of the Claims hereinabove
mentioned or implied. I expressly consent that this General Release shall be
given full force and effect according to each and all of its express terms and
provisions, including those relating to unknown and unsuspected Claims
(notwithstanding any state or local statute that expressly limits the
effectiveness of a general release of unknown, unsuspected and unanticipated
Claims), if any, as well as those relating to any other Claims hereinabove
mentioned or implied.  I acknowledge and agree that this waiver is an essential
and material term of this General Release and that without such waiver the
Company would not have agreed to the terms of the Agreement.  I further agree
that in the event I should bring a Claim seeking damages against the Company, or
in the event I should seek to recover against the Company in any Claim brought
by a governmental agency on my behalf, this General Release shall serve as a
complete defense to such Claims to the maximum extent permitted by law.  I
further agree that I am not aware of any pending claim of the type described in
paragraph 2 above as of the execution of this General Release.

 

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7.             I agree that neither this General Release, nor the furnishing of
the consideration for this General Release, shall be deemed or construed at any
time to be an admission by the Company, any Released Party or myself of any
improper or unlawful conduct.

 

8.             I agree that if I violate this General Release by suing the
Company or the other Released Parties, I will pay all costs and expenses of
defending against the suit incurred by the Released Parties, including
reasonable attorneys’ fees.

 

9.             I agree that this General Release and the Agreement are
confidential and agree not to disclose any information regarding the terms of
this General Release or the Agreement, except to my immediate family and any
tax, legal or other counsel I have consulted regarding the meaning or effect
hereof or as required by law, and I will instruct each of the foregoing not to
disclose the same to anyone.

 

10.          Any non-disclosure provision in this General Release does not
prohibit or restrict me (or my attorney) from responding to any inquiry about
this General Release or its underlying facts and circumstances by the Securities
and Exchange Commission (SEC), the Financial Industry Regulatory Authority
(FINRA), any other self-regulatory organization or any governmental entity.

 

11.          I hereby acknowledge that Sections 8 through 15, 19 through 22 and
24 of the Agreement shall survive my execution of this General Release.

 

12.          I represent that I am not aware of any claim by me other than the
claims that are released by this General Release.  I acknowledge that I may
hereafter discover claims or facts in addition to or different than those which
I now know or believe to exist with respect to the subject matter of the release
set forth in paragraph 2 above and which, if known or suspected at the time of
entering into this General Release, may have materially affected this General
Release and my decision to enter into it.

 

13.          Notwithstanding anything in this General Release to the contrary,
this General Release shall not relinquish, diminish, or in any way affect any
rights or claims arising out of any breach by the Company or by any Released
Party of the Agreement after the date hereof.

 

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

 

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

 

1.                                      I HAVE READ IT CAREFULLY;

 

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2.                                      I UNDERSTAND ALL OF ITS TERMS AND KNOW
THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER
THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE
CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS
WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED;

 

3.                                      I VOLUNTARILY CONSENT TO EVERYTHING IN
IT;

 

4.                                      I HAVE BEEN ADVISED TO CONSULT WITH AN
ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND
CONSIDERATION, I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;

 

5.                                      I HAVE HAD AT LEAST [21][45] DAYS FROM
THE DATE OF MY RECEIPT OF THIS RELEASE TO CONSIDER IT, AND THE CHANGES MADE
SINCE MY RECEIPT OF THIS RELEASE ARE NOT MATERIAL OR WERE MADE AT MY REQUEST AND
WILL NOT RESTART THE REQUIRED [21][45]-DAY PERIOD;

 

6.                                      I UNDERSTAND THAT I HAVE SEVEN (7) DAYS
AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT
BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;

 

7.                                      I HAVE SIGNED THIS GENERAL RELEASE
KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE
ME WITH RESPECT TO IT; AND

 

8.                                      I AGREE THAT THE PROVISIONS OF THIS
GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN
INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND
BY ME.

 

SIGNED:

 

 

DATED:

 

 

 

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