Exhibit 10.5

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), is made and
entered into as of March 25, 2014 (the “Effective Date”), by and between Alta
Mesa Services, LP, a Texas limited partnership (hereafter “Partnership”) and
Michael E. Ellis (hereafter “Executive”).  The Partnership and Executive may
sometimes hereafter be referred to singularly as a “Party” or collectively as
the “Parties.”

WITNESSETH:

WHEREAS, the Partnership desires to continue to secure the employment services
of Executive subject to the terms and conditions hereafter set forth;

WHEREAS the Partnership provides various services including management services
to Alta Mesa Holdings, LP (“Holding Co.”), Alta Mesa Holdings GP (“General
Partner”), and all Subsidiaries of Holding Co., under the Shared Services and
Expenses Agreement dated as of January 1, 2006, between the Partnership, Holding
Co., General Partner and the Subsidiaries (“Services Agreement”);

WHEREAS, the Partnership and the Executive previously entered into an Employment
Agreement as of August 31, 2006, and both parties desire to amend and restate
that Employment Agreement upon the terms and conditions hereafter set forth;

NOW, THEREFORE, in consideration of Executive’s employment with the Partnership,
and the premises and mutual covenants contained herein, the Parties hereto agree
as follows:

1.     Employment. During the Employment Period (as defined in Section 4
hereof), the Partnership shall employ Executive, and Executive shall serve as,
Vice President and Chief Operating Officer of the Partnership. Executive’s
principal place of employment shall be at the main business offices of the
Partnership in Houston, Texas.

2.     Compensation.

(a)     Base Salary.  The Partnership shall pay to Executive during the
Employment Period a base salary of $485,000 per year, as adjusted pursuant to
the subsequent provisions of this paragraph (the “Base Salary”). The Base Salary
shall be payable in accordance with the Partnership’s normal payroll schedule
and procedures for its executives. Nothing contained herein shall preclude the
payment of any other compensation to Executive at any time as determined by the
Partnership.

(b)     Annual Bonus. In addition to the Base Salary in Section 2(a), for each
annual fiscal year of the Partnership during the Employment Period (as
defined in Section (4)) (each such annual period being referred to as a “Bonus
Period”), Executive shall be entitled to a bonus equal to a percentage of
Executive’s Base Salary paid during each such one year period 

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(referred to herein as the “Annual Bonus”), such percentage to be established by
the Partnership in its sole discretion, and approved by Holding Co.; provided,
however, Executive shall be entitled to the Annual Bonus only if Executive has
met the performance criteria set by the Partnership for the applicable period.

In the event that the Employment Period ends before the end of the Bonus Period,
Executive shall be entitled to a pro rata portion of the Annual Bonus for that
year (based on the number of
days in which Executive was employed during the year divided by 365), as
determined based on satisfaction of the performance criteria for that period on
a pro rata basis, unless Executive was terminated for Cause (as defined in
Section 6(d)(2)), in which event Executive shall not be entitled to any Annual
Bonus for that year.  Executive acknowledges that the amount and performance
criteria for Executive’s Annual Bonus to be earned for each Bonus Period shall
be set on or before the beginning of the applicable Bonus Period.  Executive
shall be informed in writing of the performance criteria prior to applicable
Bonus Period.  If Executive successfully
meets the performance criteria established by the Partnership, the Partnership shall pay
Executive the
earned Annual Bonus amount within the earlier of:  (i) sixty days (60) days after
the end of the Bonus Period or (ii) sixty days (60) after the end of the
Employment Period, as applicable.

(c)     Compensation in Event of Injury or Sickness. In the event Executive
becomes injured or suffers a medically determinable physical or mental illness,
as determined by a physician acceptable to both the Partnership and Executive in
the same manner as provided in Section 6(d)(5), Executive shall be entitled to
receive continued Base Salary as set forth in Section 2(a) for a period of six
(6) months following the occurrence of such injury or sickness; provided,
however, such Base Salary shall be reduced by any short-term and/or long-term
disability benefits that are received by Executive under such programs sponsored
by the Partnership during such six (6) month period.

(d)     Special Bonus.  In addition to other compensation paid to Executive
hereunder, Executive shall be entitled to a one-time only special bonus payment
in an aggregate amount equal to (i) the Executive’s net investment income tax
under Sections 1 and 1411 of the Code, respectively, directly associated with
the Executive’s contribution of Class A Limited Partner interests in the
Partnership to Alta Mesa Investment Holdings Inc., a Delaware corporation
(“AMIH”) in the calendar year 2014, plus (ii) the Executive’s  federal and state
(as the case may be) tax liabilities directly associated with his employment by
the Partnership, including any tax liabilities directly associated with
Executive providing services to the Holding Co., the General Partner, or any of
the Subsidiaries, (collectively, subsections (i) and (ii), the “Tax Liability”);
provided, that, in no event will this one-time special bonus payment for the Tax
Liability made to Executive under this Section 2(d) exceed $550,000.  The amount
due Executive hereunder shall be paid by the Partnership upon ten (10) days
written notice from Executive to the Partnership, which shall include a tax
analysis of such Tax Liability from Executive’s certified public accountant. 

3.     Duties and Responsibilities of Executive.  During the Employment Period,
Executive’s services shall be devoted on substantially a full-time basis to (i)
the business of the Partnership as directed by the General Partner under the
Services Agreement and (ii) performance of the duties and responsibilities
assigned to Executive by the Board or the Chief

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Executive Officer, to the best of Executive’s ability and with reasonable
diligence. In determining Executive’s duties and responsibilities, Executive
shall not be assigned duties and responsibilities that are inappropriate for
Executive’s position.  This Section 3 shall not be construed as preventing
Executive from (a) engaging in reasonable volunteer services for charitable,
educational or civic organizations, or (b) investing personal assets in such a
manner that will not require a material amount of the Executive’s time or
services in the operation of the businesses in which such investments are made;
provided, however, no such other activity shall conflict with Executive’s
loyalties and duties to the Partnership.  Executive shall at all times use best
efforts to comply in good faith with United States laws applicable to
Executive’s actions on behalf of the Partnership and its Affiliates (as defined
in Section 6(d)(l)).  Executive understands and agrees that Executive may be
required to travel from time to time for purposes of the Partnership’s
business.  The Parties agree that Executive’s principal work location cannot be
relocated further than 50 miles from Executive’s principal work location on the
Effective Date, except as mutually agreed by the Parties.

4.     Term of Employment.  Executive’s initial term of employment with the
Partnership under this Agreement shall be for the period from the Effective Date
through the date that is four (4) years from the Effective Date (the “Initial
Term of Employment”).  Thereafter, the Employment Period hereunder shall be
automatically extended repetitively for an additional one (1) year period on
each anniversary of the Effective Date, unless Notice of Termination (pursuant
to Section 7) is given by either the Partnership or Executive to the other Party
at least sixty (60) days prior to the end of the Initial Term of Employment or
any one-year extension thereof, as applicable, that the Agreement will not be
renewed for a successive one-year period after the end of the current one-year
period. The Partnership and Executive shall each have the right to give Notice
of Termination at will, with or without cause, at any time subject, however, to
the terms and conditions of this Agreement regarding the rights and duties of
the Parties upon termination of employment.  The Initial Term of Employment and
any one-year extension of employment hereunder, shall each be referred to herein
as a “Term of Employment.”  The period from the Effective Date through the date
of Executive’s termination of employment with the Partnership and all
Affiliates, for whatever reason, shall be referred to herein as the “Employment
Period.” Notwithstanding the above, Executive agrees to remain available beyond
the Employment Period to provide assistance to the Partnership or its Affiliates
in the event the Partnership or its Affiliate become involved in litigation
regarding matters of which Executive has relevant knowledge resulting from
Executive’s employment with the Partnership. Such post-termination assistance
shall be provided by Executive in the capacity of an independent contractor at
an agreed-upon, reasonable consulting fee, and shall not be deemed to create or
continue an employee-employer relationship or to represent a continuation of any
provision of this Agreement.

5.     Benefits.  Subject to the terms and conditions of this Agreement, during
the Employment Period, Executive shall be entitled to all of the following:

(a)     Reimbursement of Business Expenses. The Partnership shall pay or
reimburse Executive for all reasonable travel, entertainment and other business
expenses paid or incurred by Executive in the performance of duties
hereunder.  The Partnership shall also provide Executive with suitable office
space, including staff support, paid parking, and necessary equipment, including
but not limited to cellular telephone and laptop computer.

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(b)     Other Employee Benefits.  Executive shall be entitled to participate in
any pension, retirement, 401(k), profit-sharing, and other employee benefits
plans or programs of the Partnership to the same extent as available to other
key management employees of the Partnership under the terms of such plans or
programs.  Executive shall also be entitled to participate in any group
insurance, hospitalization, medical, dental, health, life, accident, disability
and other employee benefits plans or programs of the Partnership to the extent
available to other key management employees of the Partnership, and their
spouses and eligible dependents, under the terms of such plans or programs
including any medical expense reimbursement account and post-retirement medical
program as available to other key management employees of the Partnership.

(c)     Vacation and Holidays. Executive shall be entitled to four (4) weeks of
paid vacation per calendar year (prorated in any calendar year during which
Executive is employed for less than the entire year based on the number of days
in such calendar year in which Executive was employed).  Executive shall also be
entitled to all paid holidays and personal days provided by the Partnership for
its key management employees under the Partnership’s personnel policy as then
effective. Unused vacation shal1 not carry over to the following year unless
specifically approved by the Partnership.

(d)     Nonqualified Deferred Compensation. Executive shall be entitled to
participate in any nonqualified plan of deferred compensation maintained by the
Partnership, Holding Co., the General Partner or any of the Subsidiaries, to the
same extent as available to any other key management employees of such
entities.  If, and to the extent, that any such plan relates or is attributable
to compensation derived from the equity of Holding Co., such compensation shall
come solely from the interests held by the Class A Limited Partners in Holding
Co.

(e)     Equity Grants. Executive shall be entitled to participate in any
long-term incentive plan providing for equity grants or other incentive awards,
the amount of which is based upon the value of the Partnership or an Affiliate,
to the same extent as available to any other key management employees of the
Partnership.  Specifically, the Partnership shall provide a participation in the
equity of Holding Co. for the benefit of the Executive.  Such participation in
any equity plan shall come solely from the interests held by the Class A Limited
Partners in Holding Co.

(f)     Annual Physical. Executive shall be entitled to be reimbursed by the
Partnership for the full cost of an annual physical examination by a physician
(i) selected by the Partnership or (ii) selected by Executive and approved by
the Partnership.

(g)     Key Man Life Insurance. The Partnership may, at any time during the term
of this Agreement, apply for and procure as owner, and for its sole benefit,
life insurance on the Executive’s life in such amounts and in such forms as the
Partnership may select.  Executive hereby acknowledges that Executive will have
no interest whatsoever in any such insurance policy.  Executive must submit to
such medical examinations, supply such information, and execute such documents
as may be reasonably requested by the insuring companies to obtain any such key
man policy.

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(h)     Tax Planning, Preparation and Advice.  Executive shall be entitled to be
reimbursed by the Partnership for the full cost of annual tax preparation and
planning by a certified financial planner or certified public accountant (i)
selected by the Partnership or (ii) selected by Executive and approved by the
Partnership, provided that said annual reimbursement shall not exceed $5,000.00.

(i)     Automobile Allowance.  The Partnership shall provide Executive with an
automobile, as well as gas and insurance for said automobile.  In the event that
the Partnership no longer provides said automobile, the Partnership will provide
the Executive with a monthly automobile allowance of $1,500.00.

6.     Rights and Payments upon Termination.  The Executive’s right to
compensation and benefits for periods after the date on which Executive’s
employment terminates with the Partnership and all Affiliates (the “Termination
Date’’), shall be determined in accordance with this Section 6, as follows:

(a)     Minimum Payments and Vesting. Executive shall be entitled to the
following minimum payments under this Section 6(a) in addition to any other
payments or benefits to which Executive is entitled to receive under the terms
of any employee benefit plan or program or Section 6(b):

(1)     unpaid salary for the full month in which the Termination Date occurred;
provided, however, if Executive is terminated for Cause (as defined in
Section 6(d)), Executive shall only be entitled to receive accrued but unpaid
salary through the Termination Date;

(2)     unpaid vacation days for that year which have accrued through the
Termination Date;

(3)     reimbursement of reasonable business expenses which were incurred but
unpaid as of the Termination Date; and

(4)     to the extent Executive participated in any nonqualified deferred
compensation or incentive plan or program with vesting criteria, or received any
equity grant that is not fully vested, Executive will be automatically 100%
vested as of the Termination Date.

Such salary and accrued vacation days shall be paid to Executive within five (5)
business days following the Termination Date in a cash lump sum less applicable
withholdings. Business expenses shall be reimbursed in accordance with the
Partnership’s normal procedures.

(b)     Other Severance Payments. In the event that during the Term of
Employment (i) Executive’s employment is involuntarily terminated by the
Partnership (except due to a “No Severance Benefits Event” (as defined in
Section 6(d)(8)), (ii) Executive’s employment is terminated due to “Disability”
or “Retirement’ (as such terms are defined in Section 6(d)(5) and 6(d)(9)),
(iii) Executive terminates his employment for Good Reason (as defined in Section
6(d)(7)), or (iv) the Partnership provides notice in accordance with Section 4

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that the Agreement shall not be renewed for an additional one-year period after
the Term of Employment (as provided in Section 4); then in any such event under
clause (i), clause (ii) clause (iii), or clause (iv), the following severance
benefits shall be provided to Executive or, in the event of death before
receiving all such benefits, to Executive’s ‘‘Designated Beneficiary” (as
defined in Section 6(d)(4)) following death:

(1)     The Partnership shall pay as additional compensation (the “Additional
Payment”), (A) an amount equal to two (2) years of Base Salary in effect as of
the Termination Date, and (B) an amount equal  to two times (2x) the amount of
the Annual Bonus paid to the Executive for the year immediately preceding the
Termination Date.   The Partnership shall make the Additional Payment to
Executive in a cash lump sum, net of applicable withholdings, not later than
sixty (60) calendar days following the Termination Date.

(2)     COBRA Coverage.  The Partnership shall maintain continued group health
plan coverage following the Termination Date under all plans subject to the
Consolidated Omnibus Budget Reconciliation Act of 1985 as amended (“COBRA”) (as
codified in Code Section 4980B and Part 6 of Subtitle B of Title I of ERISA) for
Executive and Executive’s eligible spouse and dependents for the maximum period
for which such qualified beneficiaries are eligible to receive COBRA
coverage.  However, Executive (and Executive’s spouse and dependents) shall not
be required to pay more for such COBRA coverage than is charged by the
Partnership to its key management employees who are then in active service for
the Partnership and receiving coverage under such plan and, therefore, the
Partnership shall be responsible for the difference between the amount charged
hereunder and the full COBRA premiums for a period of one (1) year following
Executive’s Termination Date.  In all other respects, Executive (and Executives
spouse and dependents) shall be treated the same as other COBRA qualified
beneficiaries under the terms of such plans and the provisions of COBRA.  In the
event of any change to a group health plan following the Termination Date,
Executive and Executive’s spouse and dependents, as applicable, shall be treated
consistently with the then-current key management employees of the Partnership
with respect to the terms and conditions of coverage and other substantive
provisions of the plan.  Executive and Executive’s spouse hereby agree to
acquire and maintain any and all coverage that either or both of them are
entitled to at any time during their lives under the Medicare program or any
similar program of the United States or any agency thereof. Executive and
Executive’s spouse further agree to pay any required premiums for Medicare
coverage from their personal funds.

For purposes of clarity, in the event that (i) Executive voluntarily resigns or
otherwise voluntarily terminates employment, except due to Disability or
Retirement or for Good Reason (as such terms are defined in Section 6(d)), (ii)
Executive’s employment is terminated due to a No Severance Benefits Event (as
defined in Section 6(d)), or (iii) the Executive provides notice in accordance
with Section 4 that the Agreement shall not be renewed for an additional
one-year period after the Term of Employment (as provided in Section 4) then, in
any such event under clause (i), (ii) or (iii), the Partnership shall have no
obligation to provide the severance benefits described in paragraphs (1) and (2)
(above) of this Section 6(b), except to offer COBRA coverage (as required by
COBRA law) but not at the discounted rate described in paragraph (2).

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Executive shall still be entitled to the minimum benefits provided under
Section 6(a). The severance payments provided under Section 6(b) shall supersede
and replace any severance payments under any severance pay plan that the
Partnership or any Affiliate maintains for key management employees or employees
generally.

(c)     Release Agreement.  Notwithstanding any provision of the Agreement to
the contrary, in order to receive the severance benefits provided under Section
6(b), the Executive must first execute an appropriate release agreement (on a
form provided by the Partnership) whereby the Executive agrees to release and
waive, in return for such severance benefits, any claims that Executive may have
against the Partnership or any of its Affiliates including, without limitation,
for unlawful discrimination (e.g., Title VII of the Civil Rights Act); provided,
however, such release agreement shall not release any claim or cause of action
by or on behalf of the Executive for (a) any payment or benefit that may be due
or payable under this Agreement or any employee benefit plan or program prior to
the receipt thereof, (b) non­ payment of salary or benefits to which Executive
is entitled from the Partnership as of the Termination Date, or (c) a breach of
this Agreement by the Partnership.

(d)     Definitions.

(1)      “Affiliate” means Holding Co., General Partner, the Subsidiaries and
any parent or subsidiary company, or any other entity in whatever form, of which
the Partnership has any controlling ownership interest or ownership or
management control, or vice-versa, as determined by the Partnership.

(2)      “Cause” means any of the following:  (A) the Executive’s conviction by
a court of competent jurisdiction of a crime involving moral turpitude or a
felony, or entering the plea of nolo contendere to such crime by the Executive;
(B) the commission by the Executive of a demonstrable act of fraud, or a
misappropriation of funds or property, of or upon the Partnership or any
Affiliate; (C) the engagement by the Executive, without the written approval of
the Partnership and Holding Co., in any material activity which directly
competes with the business of the Partnership or any Affiliate, or which would
directly result in a material injury to the business or reputation of the
Partnership or any Affiliate (including the partners of Holding Co.); or (D) (i)
the breach by Executive of any material provision of this Agreement, and
Executive’s continued failure to cure such breach within a reasonable time
period set by the Partnership but in no event less than twenty (20) calendar
days after Executive’s receipt of such notice.

(3)      ‘‘Code” means the Internal Revenue Code of 1986, as amended or its
successor.  References herein to any Section of the Code shall include any
successor provisions of the Code.

(4)      “Designated Beneficiary” means the Executive’s surviving spouse, if
any.  If there is no such surviving spouse at the time of Executive’s death,
then the Designated Beneficiary hereunder shall be Executive’s estate.

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(5)      “Disability” shall mean that (a) Executive is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or last for a
continuous period of not less than 12 months, or (b) by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or to last for a continuous period of not less than 12 months, Executive
is receiving income replacement for a period of not less than three months under
an accident and health plan covering employees of the Partnership. Evidence of
such Disability shall be certified by a physician acceptable to both the
Partnership and Executive. In the event that the Parties are not able to agree
on the choice of a physician, each shall select one physician who, in turn,
shall select a third physician to render such certification. All costs relating
to the determination of whether Executive has incurred a Disability shall be
paid by the Partnership.  Executive agrees to submit to any examinations that
are reasonably required by the attending physician or other healthcare service
providers to determine whether Executive has a Disability.

(6)      “Dispute” means any dispute, disagreement, claim, or controversy
arising from, in connection with, or relating to (a) the employment, or
termination of employment, of Executive, or (b) the Agreement, or the validity,
interpretation, performance, breach or termination of the Agreement.

(7)      “Good Reason” means the occurrence of any of the following, if not
cured and corrected by the Partnership or its successor, within 60 days after
written notice thereof is provided by Executive to the Partnership or its
successor: (a) the demotion or reduction in title or rank of Executive, or the
assignment to Executive of duties that are materially inconsistent with
Executive’s current positions, duties, responsibilities and status with the
Partnership, or any removal of the Executive from, or any failure to re­ elect
the Executive to, any of such positions (other than a change due to the
Executive’s Disability or as an accommodation under the American with
Disabilities Act), except for any such demotion, reduction, assignment, removal
or failure that occurs in connection with (i) Executive’s termination of
employment for Cause, Disability or death, or (ii) Executive’s prior written
consent; (b) the reduction of the Executive’s annual base salary or bonus
opportunity as compared to base salary and bonus opportunity as effective
immediately prior to such reduction without the prior written consent of
Executive; (c) a relocation of Executive’s principal work location to a location
in excess of 50 miles from its then current location.

(8)      “No Severance Benefits Event” means termination of Executive’s
employment by the Partnership (i) for Cause (as defined above) or due to death.

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(9)      “Retirement” means the termination of Executive’s employment for normal
retirement at or after attaining age seventy (70), provided that, on the date of
retirement, Executive has accrued at least five years of active service as an
employee with the Partnership or its Affiliates.

7.     Notice of Termination.  Any termination by the Partnership or the
Executive shall be communicated by Notice of Termination to the other Party
hereto.  For purposes of this Agreement, the term “Notice of Termination” means
a written notice which indicates the specific termination provision of this
Agreement relied upon and 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.

8.     No Mitigation.  Subject to Section 6(b)(2), Executive shall not be
required to mitigate the amount of any payment or other benefits provided under
this Agreement by seeking other employment or in any other manner.

9.     Restrictive Covenants.  As an inducement to the Partnership to enter into
this Agreement, Executive represents to, and covenants with or in favor of, the
Partnership that Executive will comply with all of the restrictive covenants in
Sections 9 through 17, as a condition to the Partnership’s obligation to provide
any benefits to Executive under this Agreement.

10.    Trade Secrets.

(a)     Access to Trade Secrets.  As of the Effective Date and on an ongoing
basis, the Partnership agrees to give Executive access to Trade Secrets which
the Executive did not have access to, or knowledge of, before the Effective
Date.

(b)          Agreement Not to Use or Disclose Trade Secrets. In exchange for the
Partnership’s promises to provide Executive with access to Trade Secrets and the
other consideration and benefits provided to Executive under this Agreement,
Executive agrees, during the Employment Period, and any time thereafter, not to
disclose to anyone, including, without limitation, any person, firm, corporation
or other entity, or publish or use for any purpose, any Trade Secrets, except as
required in the ordinary course of the Partnership’s business or as authorized
by the Partnership.

(c)     Agreement to Refrain from Defamatory Statements. Executive shall
refrain, both during the Employment Period and thereafter, from publishing any
oral or written statements about any directors, partners, officers, employees,
agents, investors or representatives of the Partnership or any Affiliate that
are slanderous, libelous, or defamatory; or that disclose private or
confidential information about the business affairs, directors, partners,
officers, employees, agents, investors or representatives of the Partnership or
any Affiliate; or that constitute an intrusion into the seclusion or private
lives of any such person; or that give rise to unreasonable publicity about the
private life of any such person; or that place any such person in a false light
before the public; or that constitute a misappropriation of the name or likeness
of any such person. A violation or threatened violation of these restrictive
covenants may be enjoined by a court of law notwithstanding the arbitration
provisions of Section 29.

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(d)     Definitions.  The following terms, when used in this Agreement, are
defined below:

(1)      “Restricted Territory”   means any county, or equivalent political or
governmental subdivision, of any state, district, or territory of North America
in which the Partnership conducts its business; and any area adjacent to such
counties, or equivalent political or governmental subdivision, to the extent
such adjacent areas are within a 50-mile radius of any producing property or
leasehold of the Partnership.

(2)      “Trade Secrets” means any and all information and materials (in any
form or medium) that are proprietary to the Partnership or an Affiliate, or are
treated as confidential by the Partnership or Affiliate as part of, or relating
to, all or any portion of its or their business, including information and
materials about the products and services offered by the Partnership or an
Affiliate; compilations of information, records and specifications, properties,
processes, programs, and systems of the Partnership or Affiliate; research for
the Partnership or an Affiliate; and methods of doing business of the
Partnership or an Affiliate.  Trade Secrets include, without limitation, all of
the Partnership’s or Affiliate’s technical and business information, whether
patentable or not, which is of a confidential, trade secret or proprietary
character, and which is either developed by the Executive alone, or with others
or by others; lists of customers; identity of customers contract terms; bidding
information and strategies; pricing methods or information; computer software;
computer software methods and documentation; hardware; the Partnership’s or
Affiliate’s methods of business operations; the procedures, forms and techniques
used in conducting its business operations; and other documents, information or
data that the Partnership requires to be maintained in confidence for the
Partnership’s business success.

11.    Duty to Return Partnership Documents and Property. Upon termination of
the Employment Period, Executive shall immediately return and deliver to the
Partnership any and all papers, books, records, documents, memoranda and
manuals, e-mail, electronic or magnetic recordings or data, including all copies
thereof, belonging to the Partnership or relating to its business, in
Executive’s possession, whether prepared by Executive or others.  If at any time
after the Employment Period, Executive determines that Executive has any Trade
Secrets in Executive’s possession or control, Executive shall immediately
.return them to the Partnership, including all copies thereof.

12.    Best Efforts and Disclosure.  Executive agrees that, while employed with
the Partnership, Executive’s services shall be devoted on a full time basis to
the Partnership’s business, and Executive shall use best efforts to promote its
success.  Further, Executive shall promptly disclose to the Partnership all
ideas, inventions, computer programs, and discoveries, whether or not patentable
or copyrightable, which Executive may conceive or make, alone or with others,
during the Employment Period, whether or not during working hours, and which
directly or indirectly:

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(a)     relate to a matter within the scope, field, duties or responsibility of
Executive’s employment with the Partnership; or

(b)     are based on any knowledge of the actual or anticipated business or
interests of the Partnership; or

(c)     are aided by the use of time, materials, facilities or information of
the Partnership.

Executive assigns to the Partnership, without further compensation, any and all
rights, titles and interest in all such ideas, inventions, computer programs and
discoveries in all countries of the world.  Executive recognizes that all ideas
inventions, computer programs and discoveries of the type described above,
conceived or made by Executive alone or with others within 12 months after the
Termination Date (voluntary or otherwise), are likely to have been conceived in
significant part either while employed by the Partnership or as a direct result
of knowledge Executive had of proprietary information or Trade
Secrets.  Accordingly, Executive agrees that such ideas, inventions or
discoveries shall be presumed to have been conceived during the Employment
Period, unless and until the contrary is clearly established by the Executive.

13.    Inventions and Other Works.    Any and all writings, computer software,
inventions, improvements, processes, procedures and/or techniques which
Executive may make, conceive, discover, or develop, either solely or jointly
with any other person or persons, at any time during the Employment Period,
whether at the request or upon the suggestion of the Partnership or otherwise,
which relate to or are useful in connection with any business now or hereafter
carried on or contemplated by the Partnership, including developments or
expansions of its present fields of operations, shall be the sole and exclusive
property of the Partnership. Executive agrees to take any and all actions
necessary or appropriate so that the Partnership can prepare and present
applications for copyright or Letters Patent therefor, and secure such copyright
or Letters Patent wherever possible, as well as reissue renewals, and extensions
thereof, and obtain the record title to such copyright or patents. Executive
shall not be entitled to any additional or special compensation or reimbursement
.regarding any such writings, computer software, inventions, improvements,
processes, procedures and techniques. Executive acknowledges that the
Partnership from time to time may have agreements with other persons or entities
which impose obligations or restrictions on the Partnership regarding inventions
made during the course of work thereunder or
regarding the confidential nature of such work.    Executive agrees to be bound
by all such obligations and restrictions, and to take all action necessary to
discharge the obligations of the Partnership.

14.    Non-Solicitation Restriction.  Executive hereby agrees that in order to
protect Trade Secrets, it is necessary to enter into the following restrictive
covenant, which is ancillary to the enforceable promises between the Partnership
and Executive in Sections 9 through 13 and other provisions of this
Agreement.  During the Executive’s employment and for a period of one (1) year
following the Termination Date (regardless of the reason for
termination), Executive hereby covenants and agrees that Executive will not,
directly or indirectly, without the prior written consent of the Partnership,
either individually or as a principal, partner, agent, consultant, contractor,
employee, or as a director or officer of any entity, or in any other manner or
capacity

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whatsoever, except on behalf of the Partnership, solicit business, attempt to
solicit business, or conduct business, in products or services competitive with
any products or services offered or performed by the Partnership or its
Affiliates in any business which the Partnership or any of its Affiliates does
business or has any business interest within the Restricted Territory as of the
Termination Date, (a) from those individuals or entities with whom the
Partnership or Affiliate conducted business in the Restricted Territory during
the Executive’s employment with the Partnership or (b) with respect to any
assets or holdings in which the Partnership or Affiliate had any interest in the
Restricted Territory, at any time during the one (1) year period preceding the
Termination Date.

15.    Non-Competition Restriction. Executive hereby agrees that in order to
protect Trade Secrets, it is necessary to enter into the following restrictive
covenant, which is ancillary to the enforceable promises between the Partnership
and Executive in Sections 9 through 14 and other provisions of this
Agreement.  Executive hereby covenants and agrees that during the Employment
Period, and for a period of one (1) year following the Termination Date
(regardless of the reason for termination), Executive will not, without the
prior written consent of the Partnership, engage in any capacity in which
Executive would perform any similar duties to those performed while at the
Partnership, directly or indirectly (whether as proprietor, stockholder,
director, partner, employee, agent, independent contractor, consultant, trustee,
or in any other capacity), with respect to any entity engaged or preparing to
engage in the business of oil and gas exploration and production within the
Restricted Territory (a “Competing Enterprise”); provided, however, Executive
shall not be deemed to be participating or engaging in a Competing Enterprise
solely by virtue of the ownership of not more than one percent (1%) of any class
of stock or other securities which are publicly traded on a national securities
exchange or in a recognized over-the-counter market.

16.    No Recruitment Restriction.  Executive agrees that during the Employment
Period, and for a period of one (1) year following the Termination Date
(regardless of the reason for termination), Executive will not, either directly
or indirectly, or by acting in concert with others, hire any employee or
independent contractor performing services for the Partnership or any Affiliate
or solicit or influence, or seek to solicit or influence, any employee or
independent contractor performing services for the Partnership or any Affiliate
to terminate, reduce or otherwise adversely affect Executive’s employment or
other relationship with the Partnership or any Affiliate.

17.    Business Opportunities.  During the Employment Period and for a period of
one (1) year following the Termination Date (regardless of the reason for
termination), the Executive assigns and agrees to assign without further
compensation to the Partnership, its Affiliates and its successors, assigns or
designees, all of the Executive’s right, title and interest in and to all
Business Opportunities (defined below), and further acknowledges and agrees that
all Business Opportunities constitute the exclusive property of the Partnership.
 The Executive shall present all Business Opportunities to the Partnership, and
shall not exploit a Business Opportunity.  For purposes of this Agreement,
“Business Opportunities” means all business ideas, prospects, or proposals
pertaining to oil and gas exploration and production, or any other aspect of the
Partnership’s or Affiliate’s business, and any business the Partnership or any
Affiliate prepared to conduct, or contemplated conducting during Executive’s
employment with the Partnership, which are developed by the Executive or
originated by any third party and brought to the

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attention of the Executive, together with information relating thereto;
 provided however, that for the one (1) year period following the Termination
Date, “Business Opportunities” shall be limited to those Business Opportunities
in the Restricted Territory.  For the avoidance of doubt, this Section 17 is not
intended to limit or narrow the Executive’s duties or obligations under federal
or state law with respect to corporate opportunities. 

18.    Tolling.  If Executive violates any of the restrictions contained in
Sections 9 through 17, then notwithstanding any provision hereof to the
contrary, the restrictive period will be suspended and will not run in favor of
Executive from the time of the commencement of any such violation, unless and
until such time when the Executive cures the violation to the reasonable
satisfaction of the Partnership.

19.    Reformation.  If a court or arbitrator rules that any time period or the
geographic area specified in any restrictive covenant in Sections 9 through 17
is unenforceable, then the time period will be reduced by the number of months,
or the geographic area will be reduced by the elimination of such unenforceable
portion, or both, so that the restrictions may be enforced in the geographic
area and for the time to the full extent permitted by law.

20.    No Previous Restrictive Agreements.  Executive represents that, except as
disclosed in writing to the Partnership as of the Effective Date, Executive is
not bound by the terms of any agreement with any previous employer or other
third party to (a) refrain from using or disclosing any confidential or
proprietary information in the course of Executive’s employment by the
Partnership or (b) refrain from competing, directly or indirectly, with the
business of such previous employer or any other person or entity.  Executive
further represents that Executive’s performance under this Agreement and work
duties for the Partnership do not, and will not, breach any agreement to keep in
confidence proprietary information, knowledge or data acquired by Executive in
confidence or in trust prior to Executive’s employment with the Partnership, and
Executive will not disclose to the Partnership or induce the Partnership to use
any confidential or proprietary information or material belonging to any
previous employer or others.

21.    Conflicts of Interest.  In keeping with Executive’s fiduciary duties to
Partnership, Executive hereby agrees that Executive shall not become involved in
a conflict of interest, or upon discovery thereof, allow such a conflict to
continue at any time during the Employment Period. In this respect, Executive
agrees to fully comply with the conflict of interest agreement entered into by
Executive as an employee, officer or director of the Partnership or an
Affiliate.  In the instance of a violation of the conflict of interest agreement
to which Executive is a party, it may be necessary for the Partnership to
terminate Executive’s employment for Cause (as defined in Section 6(d)).

22.    Remedies.  Executive acknowledges that the restrictions contained in
Sections 9 through 21 of this Agreement, in view of the nature of the
Partnership’s business, are reasonable and necessary to protect the
Partnership’s legitimate business interests, and that any violation of this
Agreement would result in irreparable injury to the Partnership. Notwithstanding
the arbitration provisions in Section 29, in the event of a breach or a
threatened breach by Executive of any provision of Sections 9 through 21 of this
Agreement, the Partnership shall be entitled to a temporary restraining order
and injunctive relief restraining Executive from the commission of

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any breach, and to recover the Partnership s attorneys’ fees, costs and expenses
related to the breach or threatened breach. Nothing contained in this Agreement
shall be construed as prohibiting the Partnership from pursuing any other
remedies available to it for any such breach or threatened breach, including,
without limitation, the recovery of money damages, attorneys’ fees, and costs.
 These covenants and agreements shall each be construed as independent of any
other provisions in this Agreement, and the existence of any claim or cause of
action by Executive against the Partnership, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Partnership of such covenants and agreements.

23.    Withholdings; Right of Offset.  The Partnership may withhold and deduct
from any benefits and payments made or to be made pursuant to this Agreement (a)
all federal, state, local and other taxes as may be required pursuant to any law
or governmental regulation or ruling, (b) all other normal employee deductions
made with respect to Partnership’s employees generally, and (c) any advances
made to Executive and owed to Partnership.

24.    Nonalienation.  The right to receive payments under this Agreement shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge or encumbrance by Executive, dependents or beneficiaries of
Executive, or to any other person who is or may become entitled to receive such
payments hereunder.  The right to receive payments hereunder shall not be
subject to or liable for the debts, contracts, liabilities, engagements or torts
of any person who is or may become entitled to receive such payments, nor may
the same be subject to attachment or seizure by any creditor of such person
under any circumstances, and any such attempted attachment or seizure shall be
void and of no force and effect.

25.    Incompetent or Minor Payees.  Should the Partnership determine, in its
discretion, that any person to whom any payment is payable under this Agreement
has been determined to be legally incompetent or is a minor, any payment due
hereunder, notwithstanding any other provision of this Agreement to the
contrary, may be made in any one or more of the following ways: (a) directly to
such minor or person; (b) to the legal guardian or other duly appointed personal
representative of the person or estate of such minor or person; or (c) to such
adult or adults as have, in the good faith knowledge of the Partnership, assumed
custody and support of such minor or person; and any payment so made shall
constitute full and complete discharge of any liability under this Agreement in
respect to the amount paid.

26.    Severability.  It is the desire of the Parties hereto that this Agreement
be enforced to the maximum extent permitted by law, and should any provision
contained herein be held unenforceable by a court of competent jurisdiction or
arbitrator (pursuant to Section 29), the Parties hereby agree and consent that
such provision shall be reformed to create a valid and enforceable provision to
the maximum extent permitted by law; provided, however, if such provision cannot
be reformed, it shall be deemed ineffective and deleted herefrom without
affecting any other provision of this Agreement.  This Agreement should be
construed by limiting and reducing it only to the minimum extent necessary to be
enforceable under then applicable law.

27.    Title and Headings; Construction.  Titles and headings to Sections hereof
are for the purpose of reference only and shall in no way limit, define or
otherwise affect the provisions

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hereof. The words “herein”, “hereof’, “hereunder” and other compounds of the
word “here” shall refer to the entire Agreement and not to any particular
provision.

28.    Governing Law; Jurisdiction.  All matters or issues relating to the
interpretation, construction, validity, and enforcement of this Agreement shall
be governed by the laws of the State of Texas, without giving effect to any
choice-of-law principle that would cause the application of the laws of any
jurisdiction other than Texas.  Jurisdiction and venue of any action or
proceeding relating to this Agreement or any Dispute (to the extent arbitration
is not required under Section 28) shall be exclusively in Harris County, Texas.

29.    Mandatory Arbitration.  Except as provided in subsection (h) of this
Section 29, any Dispute (as defined in Section 6(d)) must be resolved by binding
arbitration in accordance with the following:

(a)     Either Party may begin arbitration by filing a demand for arbitration in
accordance with the Arbitration Rules and concurrently notifying the other Party
of that demand. If the Parties are unable to agree upon a panel of three neutral
arbitrators within twenty days after the demand for arbitration was filed (the
Parties agree to a one-time, reasonable extension of that twenty-day period),
either Party may request the Houston, Texas office of the American Arbitration
Association (“AAA”) to appoint the arbitrator or arbitrators necessary to
complete the panel in accordance with the Arbitration Rules.  Each arbitrator so
appointed shall be deemed accepted by the Parties as part of the
panel.  Notwithstanding the foregoing, the Parties, by mutual consent, may agree
to a single arbitrator instead of a panel of three arbitrators and, in such
event, references herein to “panel” shall refer to the single appointed
arbitrator.

(b)     The arbitration shall be conducted in the Houston, Texas metropolitan
area at a place and time agreed upon by the Parties with the panel, or if the
Parties cannot agree, as designated by the panel. The panel may, however, call
and conduct hearings and meetings at such other places as the Parties may agree
or as the panel may, on the motion of one Party, determine to be necessary to
obtain significant testimony or evidence.

(c)     The panel may authorize any and all forms of discovery upon a Party’s
showing of need that the requested discovery is likely to lead to material
evidence needed to resolve the Dispute and is not excessive in scope, timing, or
cost.

(d)     The arbitration shall be subject to the Federal Arbitration Act and
conducted in accordance with the Commercial Arbitration Rules of the AAA to the
extent that they do not conflict with this Section 29.  The Parties and the
panel may, however, agree to vary to provisions of this Section 29 or the
matters otherwise governed by the Arbitration Rules as permitted by law.

(e)     The arbitration hearing shall be held within 60 days after the
appointment of the panel. The panel’s final decision or award shall be made
within 30 days after the hearing. That final decision or award shall be made by
unanimous or majority vote or consent of the arbitrators constituting the panel,
and shall be deemed issued at the place of arbitration.  The panel’s final
decision or award shall be based on the terms and conditions of this Agreement
and applicable law.

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(f)     The panel’s final decision or award may include injunctive relief in
response to any actual or impending breach of this Agreement or any other actual
or impending action or omission of a Party under or in connection with this
Agreement.

(g)     The panel’s final decision or award shall be final and binding upon the
Parties, and judgment upon that decision or award may be entered in any court
having jurisdiction.  The Parties waive any right to apply or appeal to any
court for re1ief from the preceding sentence or from any decision of the panel
that is made before the final decision or award.

(h)     Nothing in this Section 29 limits the right of either Party to apply to
a court having jurisdiction to (i) enforce the agreement to arbitrate in
accordance with this Section 29, (ii) seek provisional or temporary injunctive
relief, in response to an actual or impending breach of the Agreement or
otherwise so as to avoid an irreparable damage or maintain the status quo, until
a final arbitration decision or award is rendered or the Dispute is otherwise
resolved, or challenge or vacate any final arbitration decision or award that
does not comply with this Section 29. In addition, nothing in this Section
29 prohibits the Parties from resolving any Dispute (in whole or in part) at any
time by mutual agreement or compromise. This Section 29 shall also not preclude
the Parties at any time from mutually agreeing to pursue non-binding mediation
of the Dispute.

(i)     The panel may proceed to an award notwithstanding the failure of any
Party to participate in such proceedings.  The prevailing Party in the
arbitration proceeding may be entitled to an award of reasonable attorneys’ fees
incurred in connection with the arbitration in such amount, if any, as
determined by the panel in its discretion.  The costs of the arbitration shall
be borne equally by the Parties unless otherwise determined by the panel in its
award.

(j)     The panel shall be empowered to impose sanctions and to take such other
actions as it deems necessary to the same extent a judge could impose sanctions
or take such other actions pursuant to the Federal Rules of Civil Procedure and
applicable law. Each party agrees to keep all Disputes and arbitration
proceedings strictly confidential except for disclosure of information required
by applicable law which cannot be waived.

30.    Binding Effect; Third Party Beneficiaries.  This Agreement shall be
binding upon and inure to the benefit of the Parties hereto, and to their
respective heirs, executors, beneficiaries, personal representatives, successors
and. permitted assigns hereunder.  Holding Co. and its partners shall expressly
be deemed to be third party beneficiaries of the covenants and agreements of the
parties hereto; otherwise this Agreement shall not be for the benefit of any
third parties.

31.    Entire Agreement; Amendment and Termination. This Agreement contains the
entire agreement of the Parties hereto with respect to the matters covered
herein; moreover, this Agreement supersedes all prior and contemporaneous
agreements and understandings, oral or written, between the Parties concerning
the subject matter hereof.  This Agreement may be amended, waived or terminated
only by a written instrument that is identified as an amendment, waiver or
termination hereto, and is executed on behalf of both Parties.    The Executive
acknowledges and represents that in executing this Agreement, the Executive did
not rely on, has

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not relied on, and specifically disavows any reliance on any communications,
promises, statements, inducements, or representation(s), oral or written, by the
Company, except as expressly contained in this Agreement.  The Parties represent
that they relied on their own judgment in entering into this Agreement.

32.    Survival of Certain Provisions. Wherever appropriate to the intention of
the Parties, the respective rights and obligations of the Parties hereunder
shall survive any termination or expiration of this Agreement.

33.    Waiver of Breach. No waiver by either Party hereto of a breach of any
provision of this Agreement by any other Party, or of compliance with any
condition or provision of this Agreement to be performed by such other Party,
will operate or be construed as a waiver of any subsequent breach by such other
Party or any similar or dissimilar provision or condition at the same or any
subsequent time.  The failure of either Party hereto to take any action by
reason of any breach will not deprive such Party of the right to take action at
any time while such breach continues.

34.    Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Partnership and its Affiliates (and its and their
successors), as well as upon any person or entity acquiring, whether by merger,
consolidation, purchase of assets, dissolution or otherwise, all or
substantially all of the capital stock, business and/or assets of the
Partnership (or its successor) regardless of whether the Partnership is the
surviving or resulting corporation.  The Partnership shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, dissolution or
otherwise) to all or substantially all of the capital stock, business or assets
of the Partnership to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Partnership would be required to
perform it if no such succession had occurred; provided, however, no such
assumption shall relieve the Partnership of any of its duties or obligations
hereunder unless otherwise agreed, in writing, by Executive.

This Agreement shall inure to the benefit of and be enforceable by Executive’s
personal or legal representative, executors, administrators, successors, and
heirs.  In the event of the death of Executive while any amount is payable
hereunder, all such amounts shall be paid to the Designated Beneficiary (as
defined in Section 6(d)).

35.    Notice.  Each notice or other communication required or permitted under
this Agreement shall be in writing and transmitted, delivered, or sent by
personal delivery, prepaid courier or messenger service (whether overnight or
same-day), prepaid certified United States mail (with return receipt requested),
addressed (in any case) to the other Party at the address for that Party set
forth below that Party’s signature on this Agreement, or at such other address
as the recipient has designated by Notice to the other Party,  by electronic
mail, delivery and read receipt required, or by facsimile, confirmation of
delivery required.

Each notice or communication so transmitted, delivered, or sent (a) in person,
by courier or messenger service, or by certified United States mail shall be
deemed given, received, and effective on the date delivered to or refused by the
intended recipient (with the return receipt, or the equivalent record of the
courier or messenger, being deemed conclusive evidence of delivery or refusal),
or (b) by telecopy or facsimile shall be deemed given received) and effective on
the

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date of actual receipt (with the confirmation of transmission being deemed
conclusive evidence of receipt, except where the intended recipient has promptly
notified the other Party that the transmission is illegible).  Nevertheless, if
the date of delivery or transmission is not a business day, or if the delivery
or transmission is after 5:00 p.m. on a business day, the notice or other
communication shall be deemed given, received, and effective on the next
business day.

36.    Executive Acknowledgment.  Executive acknowledges (a) being knowledgeable
and sophisticated as to business matters, including the subject matter of this
Agreement, (b) having read this Agreement and understanding its terms and
conditions, (c) having been given an ample opportunity to discuss this Agreement
with Executive’s personal legal counsel prior to execution, and (d) that no
strict rules of construction shall apply for or against the drafter or any other
Party.  Executive hereby represents that Executive is free to enter into this
Agreement including, without limitation, that Executive is not subject to any
covenant not to compete that would conflict with any duties under this
Agreement.

37.    Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same
instrument.  Each counterpart may consist of a copy hereof containing multiple
signature pages, each signed by one party hereto, but together signed by both
Parties.

 (Signature page follows)

 

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IN WITNESS WHEREOF, Executive has executed this Agreement and the Partnership
has caused this Agreement to be executed in its name and on its behalf by its
duly authorized representative, to be effective as of the Effective Date. 

 

 

 

 

 

/s/ Michael E. Ellis

 

 

MICHAEL E. ELLIS

 

 

 

 

 

 

 

 

 

 

Date:

March 25, 2014

 

 

 

 

 

 

Address for Notices:

 

 

 

 

 

 

Michael E. Ellis

 

 

c/o Alta Mesa Investment Holdings Inc.

 

 

15021 Katy Freeway, Suite 400

 

 

Houston, Texas 77094

 

 

 

 

Signatures Continued on Next Page.

 

 

 

 

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ALTA MESA SERVICES, LP,

 

 

a Texas limited partnership

 

 

 

 

 

 

 

 

 

 

By:

/s/ Michael A. McCabe

 

 

 

Michael A. McCabe

 

 

 

Chief Financial Officer

 

 

 

 

 

 

Date:

March 25, 2014

 

 

 

 

 

 

Address for Notices:

 

 

 

 

 

 

Alta Mesa Services, LP

 

 

c/o Alta Mesa Investment Holdings Inc.

 

 

15021 Katy Freeway, Suite 400

 

 

Houston, Texas 77094

 

 

 

 

 

End of Signatures.

 

 

 

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