Exhibit 10.3

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (the “Agreement”) is made and entered into
as of October 21, 2016 (the “Effective Date”) by and between MIDSTATES PETROLEUM
COMPANY, INC. (the “Company”) and Frederic F. Brace (the “Executive”).

 

In consideration of the respective agreements and covenants set forth in this
Agreement, the receipt of which is hereby acknowledged, the parties intending to
be legally bound agree as follows:

 

AGREEMENTS

 

1.             Term. The Company agrees to employ Executive, and Executive
agrees to be employed by the Company, upon the terms and conditions set forth in
this Agreement for a period (the “Initial Term”) commencing on the Effective
Date and ending on the first anniversary of such date, unless earlier terminated
in accordance with Section 3. If neither party gives at least sixty (60) days
written notice to the other party that it intends for this Agreement to
terminate on such first anniversary, then this Agreement shall continue for
successive one year terms (each a “Renewal Term”), unless earlier terminated in
accordance with Section 3, until either party gives at least sixty (60) days
written notice to the other party that the other party intends for this
Agreement to terminate at the end of any such one year period. The Initial Term
and any Renewal Terms shall, together, constitute the “Term”.

 

2.             Terms of Employment.

 

(a)           Position and Duties.

 

(1)           During the Term, and in addition to serving as a member of the
Company’s Board of Directors (the “Board”), the Executive shall serve as the
Company’s President and Chief Executive Officer and, in so doing, shall possess
the duties and responsibilities consistent with that position in a company of
the size and nature of the Company, and such other duties, responsibilities, and
authority reasonably assigned to the Executive from time to time by the Board
that are consistent with the Executive’s positions set forth above.

 

(2)           During the Term (and subject to the Executive’s commitments and
duties to various boards of directors upon which he sits as a director as of,
and Executive’s other existing contractual commitments in effect on, the
Effective Date (each of which have been disclosed in writing to the Company)
(collectively, the “Other Engagements”)), the Executive agrees to devote a
material portion of his working time to the business and affairs of the Company;
provided that nothing herein shall prevent the Executive from engaging in other
for profit activities during the Term in addition to the Other Engagements or
constitute a violation of this Agreement.

 

(b)           Compensation.

 

(1)           Base Salary. During the Term, the Executive shall receive an
annualized base salary (“Base Salary”), which shall be paid in accordance with
the customary payroll practices of the Company, in an amount equal to $700,000.
The Board (or a committee of the Board, designated by the Board to make such
decisions), in its sole discretion, may at any time adjust (but not decrease)
the amount of the Base Salary as it may deem appropriate, and the term “Base
Salary,” as used in this Agreement, shall refer to the Base Salary as it may be
so adjusted.

 

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(2)           Bonus, Incentive, Savings, Profit Sharing and Retirement Plans.
For each calendar year ending during the Term beginning with the 2017 calendar
year, the Executive shall be paid an annual cash performance bonus (an “Annual
Bonus”), of no less than 100% of the Executive’s Base Salary (the “Target
Bonus”), which may be increased based upon the achievement of reasonably
achievable performance goals established in good faith by the Board; provided
that subjective criteria may be used to determine the Executive’s Annual Bonus
to the extent the Company’s Board agrees to the use of subjective performance
measures. The performance criteria for any particular calendar year shall be
determined in good faith by the Board no later than sixty (60) days after the
commencement of the relevant bonus period.  The Executive’s Annual Bonus for a
bonus period shall be determined by the Board after the end of the applicable
bonus period and shall be paid to the Executive when annual bonuses for that
year are paid to other senior executives of the Employer generally, but in no
event later than March 15 of the year following the year to which such Annual
Bonus relates. In carrying out its functions under this Section 2(b)(2), the
Board shall at all times act reasonably and in good faith.  For the 2016
calendar year, the Executive will be eligible to earn incentive compensation in
accordance with the terms of the Company’s 2016 Senior Executive Incentive Plan.

 

(3)           Welfare Benefit Plans. During the Term, and subject to the terms
and conditions of applicable plans or programs, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for participation in
and shall receive all benefits under the welfare benefit plans, practices,
policies and programs applicable generally to other similarly situated employees
of the Company (which may include programs such as salary continuance, medical,
prescription, dental, disability, employee life, group life, accidental death
and travel accident insurance plans and programs), as adopted or amended from
time to time (“Welfare Plans”).

 

(4)           Perquisites. During the Term, the Executive shall be entitled to
receive (in addition to the benefits described above) such perquisites and
fringe benefits appertaining to his position in accordance with any policies,
practices, and procedures established by the Board, as amended from time to
time, and in any event no less favorable than those applicable to senior
executives of the Company.

 

(5)           Expenses and Lodging. Executive is authorized to incur reasonable
business expenses that, in Executive’s reasonable business judgment, are
necessary or appropriate to carry out his duties for the Company under this
Agreement, including Executive’s reasonable expenses incurred to secure and
maintain an apartment (or other similar lodging) in Tulsa, Oklahoma. Executive
shall be entitled to reimbursement for such expenses, in accordance with the
Company’s standard procedures and policies, for all reasonable travel (including
travel to and from Tulsa, Oklahoma for the performance of his duties as the
President and Chief Executive Officer of the Company), entertainment and other
expenses incurred in connection with the Company’s business and the performance
of his duties hereunder.

 

(6)           Vacation. During the Term, the Executive shall be entitled to five
(5) weeks of paid vacation each calendar year, subject to the Company’s standard
carryover policy.

 

3.             Termination of Employment.

 

(a)           Death or Disability. The Executive’s employment shall terminate
automatically upon the Executive’s death or Disability during the Term. If the
Disability of the Executive has occurred during the Term (pursuant to the
definition of Disability set forth below), the Company may give to the Executive
written notice in accordance with Section 8(c) of its intention to terminate the
Executive’s employment. In such event, the Executive’s employment with the
Company shall terminate effective on the 30th day after receipt of such notice
by the Executive (the “Disability Effective Date”), provided that, within the 30
days after such receipt, the Executive shall not have returned to perform, with
or without

 

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reasonable accommodation, the essential functions of his position. For purposes
of this Agreement, “Disability” shall mean the Executive’s inability to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months. The
determination of “Disability” will be made by a physician selected by the
Executive that is reasonably acceptable to the Company.

 

(b)           Cause. The Company may terminate the Executive’s employment at any
time during the Term for Cause or without Cause. For purposes of this Agreement,
“Cause” shall mean (1) a breach by the Executive of the Executive’s obligations
under this Agreement, which constitutes nonperformance by the Executive of his
obligations and duties hereunder, as determined by the Board, that is not cured
within 15 days of the Executive’s receipt of written notice thereof from the
Board, (2) commission by the Executive of an act of fraud, embezzlement,
misappropriation, willful misconduct or breach of fiduciary duty against the
Company, (3) a material breach by the Executive of any restrictive covenants
contained within this Agreement that is not cured within 15 days of the
Executive’s receipt of written notice thereof from the Board, (4) the
Executive’s conviction, plea of no contest or nolo contendere, deferred
adjudication or unadjudicated probation for any felony or any crime involving
fraud, dishonesty, or moral turpitude or causing material harm, financial or
otherwise, to the Company, (5) the willful refusal or intentional failure of the
Executive to carry out, or comply with, in any material respect, any lawful and
material written directive of the Board (of which the Board will give the
Executive written notice of and a reasonable opportunity to remedy), (6) the
Executive’s unlawful use (including being under the influence) or possession of
illegal drugs, or (7) the Executive’s willful and material violation of any
federal, state, or local law or regulation applicable to the Company or its
business which adversely affects the Company that is not cured after written
notice from the Board.  For purposes of the definition of “Cause”, no act or
failure to act on the Executive’s part shall be deemed “willful” unless done, or
omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive’s action or omission was in the best interest of the
Company. The Company may suspend the Executive’s title and authority pending the
hearing provided for above. For purposes of this Agreement, a termination
“without Cause” shall mean a termination by the Company of the Executive’s
employment during the Term at the Company’s sole discretion for any reason other
than a termination based upon Cause, death or Disability.

 

(c)           Good Reason. The Executive’s employment may be terminated during
the Term by the Executive for Good Reason or without Good Reason; provided,
however, that the Executive agrees not to terminate his employment for Good
Reason unless (i) the Executive has given the Company written notice of his
intent to terminate his employment for Good Reason no later than 30 days
following the initial existence of the condition that the Executive believes
gives rise to his right to terminate his employment for Good Reason, which
notice shall specify the facts and circumstances constituting Good Reason,
(ii) the Company was given a period of 30 days during which it may remedy the
condition (the “Company Cure Period”) and, if the condition is remedied during
that period, the Executive would no longer have a right to terminate employment
for Good Reason based on that occurrence of the condition, (iii) the Company did
not remedy the facts and circumstances constituting Good Reason within the
Company Cure Period, and (iv) the Executive separates from service on or before
the 60th day after the Company Cure Period. For purposes of this Agreement,
“Good Reason” shall mean any of the following, but only if occurring without the
Executive’s consent: (1) a material diminution in the Executive’s Base Salary or
Target Bonus opportunity, (2) a material diminution in the Executive’s titles,
positions, authority, duties, or responsibilities, (3) the relocation of the
Executive’s principal office to an area more than 50 miles from its location
immediately prior to such relocation, or (4) the failure of the Company to
comply with any material provision of the Executive’s employment agreement or
equity agreement. Such termination by the Executive shall not preclude the
Company from terminating the Executive’s

 

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employment prior to the Date of Termination (as defined below) established by
the Executive’s Notice of Termination (as defined below).

 

(d)           Notice of Termination. Any termination by the Company for Cause or
without Cause or because of the Executive’s Disability, or by the Executive for
Good Reason or without Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 8(c). For
purposes of this Agreement, a “Notice of Termination” means a written notice
which (1) indicates the specific termination provision in this Agreement relied
upon, (2) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated and (3) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall not be more than 30 days after the giving
of such notice). The failure by the Company or the Executive to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Cause or Good Reason, as applicable shall not waive any right of the Company or
the Executive under this Agreement or preclude the Company or the Executive from
asserting such fact or circumstance in enforcing the Company’s or Executive’s
rights under this Agreement.

 

(e)           Date of Termination. “Date of Termination” means (1) if the
Executive’s employment is terminated by the Company for Cause or without Cause,
or by the Executive for Good Reason or without Good Reason, the date of receipt
of the Notice of Termination or any later date specified therein pursuant to
Section 3(d), as the case may be, provided that if such date is not also the
date of Executive’s “Separation from Service” with the Company (within the
meaning of Treasury Regulation 1.409A-1(h)) then the “Date of Termination” shall
instead be the date of the Executive’s Separation from Service, or (2) if the
Executive’s employment is terminated by reason of death or Disability, the date
of death of the Executive or the Disability Effective Date, as the case may be.

 

4.             Obligations of the Company upon Termination.

 

(a)           If the Company shall terminate the Executive’s employment for any
reason or no reason or the Executive resigns from his employment with or without
Good Reason during the Initial Term, the Company shall have no further payment
obligations to the Executive or his legal representatives, other than for the
payment of: (1) in a cash lump sum within thirty (30) days after the Date of
Termination (or such earlier date as required by applicable law) that portion of
the Executive’s Annual Base Salary accrued through the Date of Termination to
the extent not previously paid, any expense reimbursement accrued and unpaid,
any employee benefits pursuant to the terms of the applicable employee benefit
plan, and any accrued but unused vacation (the “Accrued Obligations”); (2) in a
cash lump sum within thirty (30) days after the Date of Termination, the
Executive’s Target Bonus;  and (3) the Executive’s Base Salary, payable in
installments in accordance with the Company’s normal payroll practices until the
earlier of (A) the conclusion of the Initial Term or (B) the date on which the
Executive begins full-time employment with another entity; and (4) beginning on
the Date of Termination and thereafter in accordance with the customary payroll
practices of the Company, a monthly payment equal to the cost of continued
medical, dental and vision coverage for the Executive and his spouse and any
eligible dependents until the end of the earlier of (i) the second anniversary
of the Executive’s Date of Termination and (ii) the date on which the Executive
begins full-time employment with another entity that provides comparable health
and welfare benefits (the payments in clauses (2) through (4), collectively, the
“Termination Payments”). In addition to the payment obligations described in the
preceding sentence, if the Executive’s employment is terminated by the Company
without Cause, or if the Executive resigns for Good Reason, all unvested awards
granted to the Executive under the Midstates Petroleum Company, Inc. 2016 Long
Term Incentive Plan (the “MIP”) shall vest.

 

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(b)           Section 409A. The amounts payable pursuant to Section 4 of this
Agreement are intended to be exempt from Section 409A of the Code. However, if
any amounts payable under this Agreement are not excepted from Section 409A of
the Code, it is intended that this Agreement be administered in a manner that
complies with Section 409A of the Code to the extent applicable. To the extent
that the Executive is a “specified employee” within the meaning of the Treasury
Regulations issued pursuant to Section 409A of the Code as of the Executive’s
Date of Termination, no amount that constitutes a deferral of compensation which
is payable on account of the Executive’s separation from service shall be paid
to the Executive before the date (the “Delayed Payment Date”) which is the first
day of the seventh month after the Executive’s Date of Termination or, if
earlier, the date of the Executive’s death following such Date of Termination.
All such amounts that would, but for this Section 4(b), become payable prior to
the Delayed Payment Date will be accumulated and paid on the Delayed Payment
Date. No interest will be paid by the Company with respect to any such delayed
payments. For purposes of Section 409A of the Code, each payment or amount due
under this Agreement shall be considered a separate payment, and the Executive’s
entitlement to a series of payments under this Agreement is to be treated as an
entitlement to a series of separate payments. To the extent that any in-kind
benefits or reimbursements pursuant to this Agreement are taxable to Executive
and constitute deferred compensation subject to Section 409A of the Code, any
reimbursement payment due to Executive shall be paid to Executive on or before
the last day of the Executive’s taxable year following the taxable year in which
the related expense was incurred. In addition, any such in-kind benefit or
reimbursement is not subject to liquidation or exchange for another benefit and
the amount of such benefit or reimbursement that Executive receives in one
taxable year shall not affect the amount of such benefit and reimbursements that
Executive receives in any other taxable year.

 

5.             Excise Taxes. If the Board determines, in its good faith
discretion, that Section 280G of the Code applies to any compensation payable to
the Executive, then the provisions of this Section 5 shall apply. If any
payments or benefits to which the Executive is entitled from the Company, any
affiliate, any successor to the Company or an affiliate, or any trusts
established by any of the foregoing by reason of, or in connection with, any
transaction that occurs after the Effective Date (collectively, the “Payments,”
which shall include, without limitation, the vesting of any equity awards or
other non-cash benefit or property) are, alone or in the aggregate, more likely
than not, if paid or delivered to the Executive, to be subject to the tax
imposed by Section 4999 of the Code or any successor provisions to that section,
then the Payments (beginning with any Payment to be paid in cash hereunder),
shall be either (a) reduced (but not below zero) so that the present value of
such total Payments received by the Executive will be one dollar ($1.00) less
than three times the Executive’s “base amount” (as defined in
Section 280G(b)(3) of the Code) and so that no portion of such Payments received
by the Executive shall be subject to the excise tax imposed by 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 Executive, (iii) benefits valued as parachute
payments, and (iv) acceleration of vesting of any equity awards, or (b) paid in
full, whichever of (a) or (b) produces the better net after tax position to the
Executive (taking into account any applicable excise tax under Section 4999 of
the Code and any other applicable taxes). The determination as to whether any
Payments are more likely than not to be subject to taxes under Section 4999 of
the Code and as to whether reduction or payment in full of the amount of the
Payments provided hereunder results in the better net after tax position to the
Executive shall be made by the Board and the Executive in good faith. If, as a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination hereunder, it is subsequently determined that
additional Payments could have been made to the Executive without the imposition
of the excise tax imposed by Section 4999 of the Code (an “Underpayment”), the
Underpayment shall be paid by the Company to the Executive within thirty (30)
days after such determination.

 

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6.             Confidential Information.

 

(a)           The Executive acknowledges that the Company has trade, business
and financial secrets and other confidential and proprietary information
(collectively, the “Confidential Information”) which shall be provided to the
Executive during the Executive’s employment by the Company. Confidential
information includes, but is not limited to, sales materials, technical
information, strategic information, business plans, processes and compilations
of information, records, specifications and information concerning customers or
venders, customer lists, and information regarding methods of doing business.

 

(b)           The Executive is aware of those policies implemented by the
Company to keep its Confidential Information secret, including those policies
limiting the disclosure of information on a need-to-know basis, requiring the
labeling of documents as “confidential,” and requiring the keeping of
information in secure areas. The Executive acknowledges that the Confidential
Information has been developed or acquired by the Company through the
expenditure of substantial time, effort and money and provides the Company with
an advantage over competitors who do not know or use such Confidential
Information. The Executive acknowledges that all such Confidential Information
is the sole and exclusive property of the Company.

 

(c)           During, and all times following, the Executive’s employment by the
Company, the Executive shall hold in confidence and not directly or indirectly
disclose or use or copy or make lists of any Confidential Information: except
(i) to the extent determined appropriate by the Executive in his reasonable
discretion to discharge his duties to the Company; (ii) where such information
is, at the time of disclosure by the Executive, generally available to the
public other than as a result of any direct or indirect act or omission of the
Executive in breach of this Agreement; or (iii) where the Executive is compelled
by legal process. The Executive agrees to use reasonable efforts to give the
Company prompt written notice of any and all attempts to compel disclosure of
any Confidential Information. Such written notice shall include either (y) the
subpoena(s) or order(s) (or other similar documents) compelling such disclosure,
or (z) a reasonable description of the information to be disclosed, the court,
government agency, or other forum through which the disclosure is sought, and
the date by which the information is to be disclosed, and a copy of the
subpoena, order or other process used to compel disclosure.

 

(d)           The Executive will take such precautions as deemed reasonable by
the Executive to prevent disclosure of Confidential Information in his
possession or control to any unauthorized individual or entity. The Executive
further agrees not to use, whether directly or indirectly, any Confidential
Information for the benefit of any person, business, corporation, partnership,
or any other entity other than the Company.

 

(e)           All equipment, documents or files concerning the Company,
including, but not limited to, Company cell phones, desktop and laptop
computers, devices (including USB, external hard drives, etc.), keys, access
cards, passwords, ID cards, customer data, materials, processes, letters,
financial data, Confidential Information, or other written or electronically
recorded material (in whatsoever form, format or medium), whether or not
produced by the Executive (collectively, “Company Property”), belongs to the
Company.  Upon termination of employment, the Executive agrees to return to the
Company all Company Property.

 

(f)            As used in this Section 6, “Company” shall include Midstates
Petroleum Company, Inc. and any of its affiliates.

 

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7.             Mutual Non-Disparagement. The Executive agrees not to
intentionally make, or intentionally cause any other person to make, any public
statement that is intended to criticize or disparage the Company, any of its
affiliates, or any of their respective officers, managers or directors. The
Company agrees to use commercially reasonable efforts to cause its officers and
members of its Board not to intentionally make, or intentionally cause any other
person to make, any public statement that is intended to criticize or disparage
the Executive. This Section 7 shall not be construed to prohibit any person from
responding publicly to incorrect public statements or from making truthful
statements when required by law, subpoena, court order, or the like.

 

8.             Miscellaneous.

 

(a)           Survival and Construction. Executive’s obligations under this
Agreement will be binding upon Executive’s heirs, executors, assigns, and
administrators and will inure to the benefit of the Company, its subsidiaries,
successors, and assigns. The language of this Agreement shall in all cases be
construed as a whole according to its fair meaning, and not strictly for or
against any of the parties. The section and paragraph headings used in this
Agreement are intended solely for the convenience of reference and shall not in
any manner amplify, limit, modify, or otherwise be used in the interpretation of
any of the provisions hereof.

 

(b)           Definitions. As used in this Agreement, “affiliate” means, with
respect to a person, any other person controlling, controlled by or under common
control with the first person; the term “control,” and correlative terms, means
the power, whether by contract, equity ownership or otherwise, to direct the
policies or management of a person; and “person” means an individual,
partnership, corporation, limited liability company, trust or unincorporated
organization, or a government or agency or political subdivision thereof.

 

(c)           Notices. All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

 

If to the Executive:
To the address on file with the Company

 

If to the Company:
Attn: General Counsel
321 S. Boston, Suite 600
Tulsa, OK 74103

 

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

 

(d)           Enforcement. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a portion of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of such illegal, invalid
or unenforceable provision there shall be added automatically as part of this
Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

 

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(e)           Withholding. The Company may withhold from any amounts payable
under this Agreement such Federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation as determined by the
Company.

 

(f)            No Waiver. No waiver by either party at any time of any breach by
the other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at any time.

 

(g)           Equitable and Other Relief. The Executive acknowledges that money
damages would be both incalculable and an insufficient remedy for a breach of
Section 6 by the Executive and that any such breach would cause the Company
irreparable harm. Accordingly, the Company, in addition to any other remedies at
law or in equity it may have, shall be entitled, without the requirement of
posting of bond or other security, to equitable relief, including injunctive
relief and specific performance, in connection with a breach of Section 6 by the
Executive.

 

(h)           Complete Agreement. The provisions of this Agreement constitute
the entire and complete understanding and agreement between the parties with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous oral and written agreements, representations and understandings
of the parties, which are hereby terminated. Other than expressly set forth
herein, the Executive and Company acknowledge and represent that there are no
other promises, terms, conditions or representations (or written) regarding any
matter relevant hereto. This Agreement may be executed in two or more
counterparts.

 

(i)            Arbitration. The Company and the Executive agree to the
resolution by binding arbitration of all claims, demands, causes of action,
disputes, controversies or other matters in question (“claims”), whether or not
arising out of this Agreement or the Executive’s employment (or its
termination), whether sounding in contract, tort or otherwise and whether
provided by statute or common law, that the Company may have against the
Executive or that the Executive may have against the Company or its parents,
subsidiaries and affiliates, and each of the foregoing entities’ respective
officers, directors, employees or agents in their capacity as such or otherwise;
except that this agreement to arbitrate shall not limit the Company’s right to
seek equitable relief, including injunctive relief and specific performance, and
damages and any other remedy or relief (including the recovery of attorney fees,
costs and expenses) in a court of competent jurisdiction for an alleged breach
of Section 6 of this Agreement, and the Executive expressly consents to the
non-exclusive jurisdiction of the district courts of the State of Oklahoma for
any such claims. Claims covered by this agreement to arbitrate also include
claims by the Executive for breach of this Agreement, wrongful termination,
discrimination (based on age, race, sex, disability, national origin or any
other factor) and retaliation. In the event of any breach of this Agreement by
the Company, it is expressly agreed that notwithstanding any other provision of
this Agreement, the only damages to which the Executive shall be entitled is
lost compensation and benefits in accordance with Section 2(b) or 4. The Company
and the Executive agree that any arbitration shall be in accordance with the
Federal Arbitration Act (“FAA”) and, to the extent an issue is not addressed by
the FAA, with the then-current National Rules for the Resolution of Employment
Disputes of the American Arbitration Association (“AAA”) or such other rules of
the AAA as applicable to the claims being arbitrated. If a party refuses to
honor its obligations under this agreement to arbitrate, the other party may
compel arbitration in either federal or state court. The arbitrator shall apply
the substantive law of the State of Oklahoma (excluding, to the extent
applicable, choice-of-law principles that might call for the application of some
other state’s law), or federal law, or both as applicable to the claims
asserted. The arbitrator shall have exclusive authority to resolve any dispute
relating to the interpretation, applicability, enforceability or formation of
this agreement to arbitrate, including any claim that all or part of this

 

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Agreement is void or voidable and any claim that an issue is not subject to
arbitration. The parties agree that venue for arbitration will be in Tulsa
County, Oklahoma, and that any arbitration commenced in any other venue will be
transferred to Tulsa County, Oklahoma, upon the written request of any party to
this Agreement. Any and all of the arbitrator’s orders, decisions and awards may
be enforceable in, and judgment upon any award rendered by the arbitrator may be
confirmed and entered by, any federal or state court having jurisdiction. All
proceedings conducted pursuant to this agreement to arbitrate, including any
order, decision or award of the arbitrator, shall be kept confidential by all
parties. THE EMPLOYEE ACKNOWLEDGES THAT, BY SIGNING THIS AGREEMENT, THE EMPLOYEE
IS WAIVING ANY RIGHT THAT THE EMPLOYEE MAY HAVE TO A JURY TRIAL OR, EXCEPT AS
EXPRESSLY PROVIDED HEREIN, A COURT TRIAL OF ANY EMPLOYMENT-RELATED CLAIM THAT
THE EMPLOYEE MAY ALLEGE.

 

(j)            Survival. Sections 6 and 7 of this Agreement shall survive the
termination of this Agreement.

 

(k)           Choice of Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Oklahoma without reference to
principles of conflict of laws of Oklahoma or any other jurisdiction, and, where
applicable, the laws of the United States.

 

(l)            Amendment. This Agreement may not be amended or modified at any
time except by a written instrument approved by the Board and executed by the
Company and the Executive.

 

(m)          Assignment. This Agreement is personal as to the Executive and
accordingly, the Executive’s duties may not be assigned by the Executive. This
Agreement may be assigned by the Company without the Executive’s consent to any
entity which is a successor in interest to the Company’s business, provided such
successor expressly assumes the Company’s obligations hereunder.

 

(n)           Clawback. Notwithstanding any other provisions in this Agreement
to the contrary, any incentive-based compensation, or any other compensation,
paid to the Executive pursuant to this Agreement or any other agreement or
arrangement with the Company or its affiliates, which is subject to recovery
under any law, government regulation or stock exchange listing requirement, will
be subject to such deductions and clawback as may be required to be made
pursuant to such law, government regulation or stock exchange listing
requirement (or any policy adopted by the Company or its affiliates pursuant to
any such law, government regulation or stock exchange listing requirement).

 

(o)           Severability. If an arbitrator or court of competent jurisdiction
determines that any provision of this Agreement (or part thereof) is invalid or
unenforceable, then such provision (or part thereof) shall be severable and the
invalidity or unenforceability of that provision (or part thereof) shall not
affect the validity or enforceability of any other provision (or parts thereof)
of this Agreement, and all other provisions (and parts thereof) shall remain in
full force and effect

 

(p)           Executive Acknowledgment. The Executive acknowledges that he has
read and understands this Agreement, is fully aware of its legal effect, has not
acted in reliance upon any representatives or promises made by the Company other
than those contained in writing herein, and has entered into this Agreement
freely based on his own judgment.

 

9

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IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from the Board, the Company has caused this
Agreement to be executed in its name on its behalf, all as of the day and year
first above written.

 

 

 

EXECUTIVE:

 

 

 

 /s/ Frederic F. Brace

 

 Frederic F. Brace

 

 

 

 

 

MIDSTATES PETROLEUM COMPANY, INC.,

 

 

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Alan J. Carr

 

Name:

Alan J. Carr

 

Title:

Chairman of the Board of Directors

 

Signature Page to Executive Employment Agreement

 

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