Code shall mean the Internal Revenue Code of 1986, as amended, and the applicablerules, notices and regulations thereunder, as amended from time to time.Common Stock means the Company’s common stock, par value $.001 per share.Company means PetroQuest Energy, Inc., a Delaware corporation, the principal executiveoffice of which is located at 400 E. Kaliste Saloom Road, Suite 6000, Lafayette, Louisiana 70508.Confidential Information shall have the meaning assigned thereto in Section 8.2hereof.Date of Termination means the earliest to occur of (i) the date of the Employee’sdeath, (ii) the date on which the Employee terminates this Amended Agreement and his employment forany reason or (iii) the date of receipt of the Notice of Termination, or such later date as may beprescribed in the Notice of Termination in accordance with Section 5.5 hereof; provided, however,notwithstanding anything herein to the contrary, for the purposes of Code Section 409A, withrespect to any amounts payable hereunder that are deferred compensation subject to Code Section409A or that are intended to be exempt from Code Section 409A that require Employee’s termination,the Employee’s termination shall mean a “Separation from Service” within the meaning of CodeSection 409A.Disability means an illness or other disability which prevents the Employee fromdischarging his responsibilities under this Amended Agreement for a period of 180 consecutivecalendar days, or an aggregate of 180 calendar days in any calendar year, during the EmploymentPeriod, all as determined in good faith by the Board of Directors of the Company (or a committeethereof).Employee means Mark K. Stover, whose business address is 450 Gears Road, Suite 330,Houston, Texas 77067.Employment Period shall have the meaning assigned thereto in Section 3 hereof.Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules andregulations promulgated by the Securities and Exchange Commission thereunder, all as in effect fromtime to time during the Employment Period.Initial Term shall have the meaning assigned thereto in Section 3 hereof.Notice of Termination shall have the meaning assigned thereto in Section 5.5 hereof.Original Effective Date means June 7, 2007.Termination Agreement means the Termination Agreement dated the Original EffectiveDate between the Company and the Employee, as amended effective December 31, 2008 by the AmendedTermination Agreement and as amended from time to time.Voting Stock means all outstanding shares of capital stock of the Company entitled tovote generally in an election of directors; provided, however, that if the Company has shares ofVoting Stock entitled to more or less than one vote per share, each reference to a proportionof the issued and outstanding shares of Voting Stock shall be deemed to refer to the proportion ofthe aggregate votes entitled to be cast by the issued and outstanding shares of Voting Stock.Without Cause shall have the meaning assigned thereto in Section 5.4 hereof.
 
 

 
2. General Duties of Company and Employee.2.1 The Company agrees to employ the Employee, and the Employee agrees to accept employment bythe Company and to serve the Company as Executive Vice President — Corporate Development. Theauthority, duties and responsibilities of the Employee shall be consistent with those of executiveofficers in a public company with a similar title, and such other or additional duties as may fromtime to time be assigned to the Employee by the Board of Directors (or a committee thereof) andagreed to by the Employee. While employed hereunder, the Employee shall devote full time andattention during normal business hours to the affairs of the Company and use his best efforts toperform faithfully and efficiently his duties and responsibilities. The Employee may (i) serve oncorporate, civic or charitable boards or committees, (ii) deliver lectures, fulfill speakingengagements or teach at educational institutions and (iii) manage personal investments, so long assuch activities do not significantly interfere with the performance of the Employee’s duties andresponsibilities.2.2 The Employee agrees and acknowledges that he owes a fiduciary duty of loyalty, fidelityand allegiance to act at all times in the best interests of the Company and to do no act and tomake no statement, oral or written, which would injure Company’s business, its interests or itsreputation.2.3 The Employee agrees to comply at all times during the Employment Period with allapplicable policies, rules and regulations of the Company, including, without limitation, theCompany’s code of ethics and the Company’s policy regarding trading in the Common Stock, as each isin effect from time to time during the Employment Period.3. Term. Unless sooner terminated pursuant to other provisions hereof, the Employee’speriod of employment under this Amended Agreement shall be a period of three years beginning on theOriginal Effective Date (the “Initial Term”). After the expiration of the Initial Term, theEmployee’s period of employment under this Amended Agreement shall be automatically renewed forsuccessive one-year terms on each anniversary of the Original Effective Date (the Initial Term andany and all renewals thereof are referred to herein collectively as the “Employment Period”).4. Compensation and Benefits.4.1 Base Salary. As compensation for services to the Company, the Company shall payto the Employee until the Date of Termination an annual base salary of $320,000, including anyincreases thereon from time to time (the “Base Salary”). The Board of Directors (or a committeethereof), in its discretion, may increase the Base Salary based upon relevant circumstances. TheBase Salary shall be payable in equal semi-monthly installments or in accordance with the Company’sestablished policy, subject only to such payroll and withholdingdeductions as may be required by law and other deductions applied generally to employees ofthe Company for insurance and other employee benefit plans.
 
 

 
4.2 Bonus. In addition to the Base Salary, the Employee may be awarded, for eachfiscal year until the Date of Termination, an annual bonus (either pursuant to a bonus or incentiveplan or program of the Company or otherwise) in an amount to be determined by the Board ofDirectors (or a committee thereof), in its sole discretion (the “Annual Bonus”). Each such AnnualBonus shall be payable at a time to be determined by the Board of Directors (or a committeethereof) in its sole discretion.4.3 Incentive, Savings and Retirement Plans. Until the Date of Termination, theEmployee shall be eligible to participate in and shall receive all benefits under all executiveincentive, savings and retirement plans (including 401(k) plans) and programs currently maintainedor hereinafter established by the Company for the benefit of its executive officers and/oremployees.4.4 Welfare Benefit Plan. Until the Date of Termination, the Employee and/or theEmployee’s family, as the case may be, shall be eligible to participate in and shall receive allbenefits under each welfare benefit plan of the Company currently maintained or hereinafterestablished by the Company for the benefit of its employees. Such welfare benefit plans mayinclude, without limitation, medical, dental, disability, group life, accidental death and travelaccident insurance plans and programs.4.5 Reimbursement of Expenses. The Employee may from time to time until the Date ofTermination incur various business expenses customarily incurred by persons holding positions oflike responsibility, including, without limitation, travel, entertainment and similar expensesincurred for the benefit of the Company. Subject to the Company’s policy regarding thereimbursement of such expenses as in effect from time to time during the Employment Period, whichdoes not necessarily allow reimbursement of all such expenses, the Company shall reimburse theEmployee for such expenses from time to time, at the Employee’s request, and the Employee shallaccount to the Company for all such expenses by providing reasonable written documentation thereofto the Company and all such expenses shall be paid promptly, but in no event, later than 21/2 monthsafter the end of Employee’s tax year in which such expenses were incurred.4.6 Life Insurance. The Company shall provide to the Employee life insurance on termsthat are mutually agreeable to the Company and the Employee.5. Termination.5.1 Death. This Amended Agreement shall terminate automatically upon the death of theEmployee.5.2 Disability. The Company may terminate this Amended Agreement and Employee’semployment, upon written notice to the Employee delivered in accordance with Sections 5.5 and 12.1hereof, upon the Disability of the Employee.
 
 

 
5.3 Cause. The Company may terminate this Amended Agreement and Employee’semployment, upon written notice to the Employee delivered in accordance with Sections 5.5 and 12.1hereof, for Cause. For purposes of this Amended Agreement, “Cause” means (i) the conviction of theEmployee of a felony (which, through lapse of time or otherwise, is not subject to appeal), (ii)the Employee’s willful refusal, without proper legal cause, to perform his duties andresponsibilities as contemplated in this Amended Agreement or (iii) the Employee’s willful engagingin activities which would (A) constitute a breach of any term of this Amended Agreement, theCompany’s code of ethics, the Company’s policies regarding trading in the Common Stock orreimbursement of business expenses or any other applicable policies, rules or regulations of theCompany, or (B) result in a material injury to the business, condition (financial or otherwise),results of operations or prospects of the Company or its Affiliates (as determined in good faith bythe Board of Directors of the Company or a committee thereof).5.4 Without Cause. The Company may terminate this Amended Agreement Without Cause andEmployee’s employment, upon written notice to the Employee delivered in accordance with Sections5.5 and 12.1 hereof. For purposes of this Amended Agreement, the Employee will be deemed to havebeen terminated “Without Cause” if the Employee is terminated by the Company for any reason otherthan Cause, Disability or death.5.5 Notice of Termination. Any termination of this Amended Agreement and Employee’semployment by the Company for Cause, Without Cause or as a result of the Employee’s Disabilityshall be communicated by Notice of Termination to the Employee given in accordance with thisAmended Agreement. For purposes of this Amended Agreement, a “Notice of Termination” means awritten notice which (i) indicates the specific termination provision in this Amended Agreementrelied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide abasis for termination of the Employee’s employment under the provision so indicated and (iii)specifies the termination date, if such date is other than the date of receipt of such notice(which termination date shall not be more than 15 days after the giving of such notice).6. Obligations of Company upon Termination.6.1 Cause or by Employee. If this Amended Agreement shall be terminated either by theCompany for Cause or by the Employee for any reason, the Company shall pay to the Employee, in alump sum in cash within 30 days after the Date of Termination, the aggregate of the Employee’s BaseSalary (as in effect on the Date of Termination) through the Date of Termination, if nottheretofore paid, and, in the case of compensation previously deferred by the Employee, all amountsof such compensation previously deferred shall be paid in accordance with the plan documentsgoverning such deferrals. All other obligations of the Company and rights of the Employeehereunder shall terminate effective as of the Date of Termination.
 
 

 
6.2 Death or Disability.(a) Subject to the provisions of this Section 6.2, if this Amended Agreement isterminated as a result of the Employee’s death or Employee’s termination in connection witha Disability, the Company shall pay to the Employee or his estate, in equal semi-monthlyinstallments, the Employee’s Base Salary (as in effect on the Date ofTermination) for 12 months after such Date of Termination. The Company may purchaseinsurance (which shall be owned by the Company) to cover all or any part of the obligationcontemplated in the foregoing sentence, and the Employee agrees to submit to a physicalexamination to facilitate the procurement of such insurance.(b) Whenever compensation is payable to the Employee hereunder during a period in whichhe is partially or totally disabled, and such Disability would (except for the provisionshereof) entitle the Employee to Disability income or salary continuation payments from theCompany according to the terms of any plan or program presently maintained or hereafterestablished by the Company but prior to Employee’s Disability that is a bona fide disabilityplan under Treasury Regulation 1.409A-1(a)(5), the Disability income or salary continuationpaid to the Employee pursuant to any such plan or program shall be considered a portion ofthe payment to be made to the Employee pursuant to this Section 6.2 and shall not be inaddition hereto. If Disability income is payable directly to the Employee by an insurancecompany under the terms of an insurance policy paid for by the Company that is a bona fidedisability plan under Treasury Regulation 1.409A-1(a)(5), the amounts paid to the Employeeby such insurance company shall be considered a portion of the payment to be made to theEmployee pursuant to this Section 6.2 and shall not be in addition hereto.6.3 Without Cause. If this Amended Agreement shall be terminated by the CompanyWithout Cause:(a) the Company shall pay to the Employee, in a lump sum in cash within 30 days afterthe Date of Termination, the aggregate of the following amounts:(1) if not theretofore paid, the Employee’s Base Salary (as in effect on theDate of Termination) through the Date of Termination; and(2) in the case of compensation previously deferred by the Employee, allamounts of such compensation previously deferred and not yet paid by the Companyshall be paid in accordance with the plan documents governing such deferrals;(b) the Company shall, promptly upon submission by the Employee of supportingdocumentation, pay or reimburse to the Employee any costs and expenses (including moving andrelocation expenses) paid or incurred by the Employee which would have been payable underSection 4.5 of this Amended Agreement if the Employee’s employment had not terminated, to bepaid no later than 21/2 months after the end of the calendar year in which such expenses wereincurred; and
 
 

 
(c) for the 12-month period commencing on the Date of Termination, the Company shallpay the Company portion of any premiums and shall otherwise continue benefits to theEmployee and/or the Employee’s family in accordance with the Company’s normal payrollpractices at least equal to those which would have been provided to them under Section 4.4if the Employee’s employment had not been terminated. With respect to benefits set forth inthis subsection (c), to the extent possible,all insurance premium and/or benefit payments by the Company shall be made so as to beexempt from Code Section 409A, and for the purposes thereof, each payment shall be treatedas a separate payment under Code Section 409A. Notwithstanding the foregoing, with respectto any benefits that are for medical, dental or vision expenses under a self-insured plan,the Employee shall pay the premiums for such coverage and the Company shall reimburse theEmployee for the Company portion of the cost of such premiums by the 15th day ofthe month following the month such premiums are paid by the Employee. After the grouphealth benefits hereunder have expired, the Employee and his dependents shall be eligible toelect continuation of health insurance coverage under COBRA and shall be responsible for theapplicable premiums under COBRA. With respect to any other premiums or amounts payableunder this Section 6.3(c), to the extent that such amounts are taxable and not otherwiseexempt from deferred compensation under Code Section 409A, the Employee shall pay thepremiums for such coverage and the Company shall promptly reimburse the Employee uponEmployee’s submission of reasonable documentation of such premiums, and the Company’spayment of such reimbursements or any other benefits under this Section 6.3(c) shall besubject to the following: (i) all amounts to be paid under this paragraph and that areincludable in Employee’s income shall only be paid if such expenses are incurred during the2 year period after the Termination Date; (ii) any amount reimbursable or paid in one taxyear shall not affect the amount to be reimbursed or paid in another tax year; (iii) ifEmployee is reimbursed for any expenses hereunder, he must provide the Company withreasonable documentation of such expenses; (iv) payments for such expenses will be made incash promptly after the expenses are incurred but in no event later than the end ofEmployee’s taxable year following the tax year in which the expenses are incurred; and (v)the payments under this paragraph cannot be substituted for another benefit.(d) the Company shall pay to the Employee, in equal semi-monthly installments, theEmployee’s Base Salary (as in effect on the Date of Termination) for 12 months after theDate of Termination.6.4 Termination of Employment Following a Change in Control. Notwithstanding theprovisions of Section 6.3 hereof to the contrary, if the Employee’s employment by the Company isterminated by the Company in accordance with the terms of Section 4 of the Termination Agreementand the Employee is entitled to benefits provided in Section 5 of the Termination Agreement, theCompany shall pay to the Employee, in a lump sum in cash within 30 days after the Date ofTermination, the aggregate of the Employee’s Base Salary (as in effect on the Date of Termination)through the Date of Termination, if not theretofore paid, and, in the case of compensationpreviously deferred by the Employee, all amounts of such compensation previously deferred shall bepaid in accordance with the plan documents governing such deferral. Except with respect to theobligations set for forth in the Termination Agreement, notwithstanding any provisions herein tothe contrary, all other obligations of the Company and rights of the Employee hereunder shallterminate effective as of the Date of Termination.
 
 

 
6.5 Specified Employee Status. In the event that, as of the date of Employee’sSeparation from Service, as defined in Treasury Regulation Section 1.409A-1(h), Employee is a“specified employee,” as defined in Treasury Regulation Section 1.409A-1(i), to the extent that anyof the payments under this Amended Agreement payable on account of a Separation fromService, including without limitation, Sections 6.2, 6.3 or 6.4 are subject to, and not exemptfrom, Code Section 409A, such amounts shall be paid not earlier than (1) six months after the dateof the Employee Separation from Service, or (2) the date of Employee’s death, as required inaccordance with Section 409A(a)(2)(B)(i) of the Code and Treasury Regulation Section 1.409A-3(i)(2)(“Waiting Period”); any payments withheld during the Waiting Period will be paid in a lump sumamount on the first business day of the seventh month following the Employee’s Separation fromService and payments thereafter shall be otherwise paid as provided herein.7. Employee’s Obligation to Avoid Conflicts of Interest.7.1 In keeping with the Employee’s fiduciary duties to the Company, the Employee agrees thathe shall not knowingly become involved in a conflict of interest with the Company, or upondiscovery thereof, allow such a conflict to continue. The Employee further agrees to disclose tothe Company, promptly after discovery, any facts or circumstances which might involve a conflict ofinterest with the Company.7.2 The Company and the Employee recognize that it is impossible to provide an exhaustive listof actions or interests which constitute a “conflict of interest.” Moreover, the Company and theEmployee recognize that there are many borderline situations. In some instances, full disclosureof facts by the Employee to the Company is all that is necessary to enable the Company to protectits interests. In others, if no improper motivation appears to exist and the Company’s interestshave not suffered, prompt elimination of the outside interest will suffice. In still others, itmay be necessary for the Company to terminate the employment relationship. The Company and theEmployee agree that the Company’s determination as to whether or not a conflict of interest existsshall be conclusive. The Company reserves the right to take such action as, in its judgment, willend the conflict of interest.7.3 In this connection, it is agreed that any direct or indirect interest in, connection withor benefit from any outside activities, particularly commercial activities, which interest might inany way adversely affect the Company or its Affiliates, involves a possible conflict of interest.Circumstances in which a conflict of interest on the part of the Employee would or might arise, andwhich should be reported immediately to the Company, include, but are not limited to, thefollowing:(a) Ownership of a material interest in any lender, supplier, contractor,subcontractor, customer or other entity with which the Company does business.(b) Acting in any capacity, including director, officer, partner, consultant, employee,distributor, agent or the like, for any lender, supplier, contractor, subcontractor,customer or other entity with which the Company does business.(c) Acceptance, directly or indirectly, of payments, services or loans from a lender,supplier, contractor, subcontractor, customer or other entity with which the Company doesbusiness, including, without limitation, gifts, trips, entertainment or other favors of morethan a nominal value, but excluding loans from publicly held insurance companies andcommercial or savings banks at market rates of interest.
 
 

 
(d) Use of information or facilities to which the Employee has access in a manner whichwill be detrimental to the Company’s interests, such as use for the Employee’s own benefitof know-how or information developed through the Company’s business activities.(e) Disclosure or other misuse of information of any kind obtained through theEmployee’s connection with the Company.(f) Acquiring or trading in, directly or indirectly, oil and gas properties orinterests for his own account or the account of his Affiliates without the prior writtenconsent of the Board of Directors.8. Employee’s Confidentiality Obligation.8.1 The Employee hereby acknowledges, understands and agrees that all Confidential Informationis the exclusive and confidential property of the Company and its Affiliates which shall at alltimes be regarded, treated and protected as such in accordance with this Section 8. The Employeeacknowledges that all such Confidential Information is in the nature of a trade secret.8.2 For purposes of this Amended Agreement, “Confidential Information” means information,which is used in the business of the Company or its Affiliates and (i) is proprietary to, about orcreated by the Company or its Affiliates, (ii) gives the Company or its Affiliates some competitivebusiness advantage or the opportunity of obtaining such advantage or the disclosure of which couldbe detrimental to the interests of the Company or its Affiliates, (iii) is designated asConfidential Information by the Company or its Affiliates, is known by the Employee to beconsidered confidential by the Company or its Affiliates, or from all the relevant circumstancesshould reasonably be assumed by the Employee to be confidential and proprietary to the Company orits Affiliates, or (iv) is not generally known by non-Company personnel. Such ConfidentialInformation includes, without limitation, the following types of information and other informationof a similar nature (whether or not reduced to writing or designated as confidential):(a) Internal personnel and financial information of the Company or its Affiliates,information regarding oil and gas properties including reserve information, vendorinformation (including vendor characteristics, services, prices, lists and agreements),purchasing and internal cost information, internal service and operational manuals, and themanner and methods of conducting the business of the Company or its Affiliates;(b) Marketing and development plans, price and cost data, price and fee amounts,pricing and billing policies, bidding, quoting procedures, marketing techniques, forecastsand forecast assumptions and volumes, and future plans and potential strategies (including,without limitation, all information relating to any oil and gas prospect and the identity ofany key contact within the organization of any acquisition prospect) of the Company or itsAffiliates which have been or are being discussed;
 
 

 
(c) Names of customers and their representatives, contracts (including their contentsand parties), customer services, and the type, quantity, specifications and content ofproducts and services purchased, leased, licensed or received by customers of the Company orits Affiliates; and(d) Confidential and proprietary information provided to the Company or its Affiliatesby any actual or potential customer, government agency or other third party (includingbusinesses, consultants and other entities and individuals).8.3 As a consequence of the Employee’s acquisition or anticipated acquisition of ConfidentialInformation, the Employee shall occupy a position of trust and confidence with respect to theaffairs and business of the Company and its Affiliates. In view of the foregoing and of theconsideration to be provided to the Employee, the Employee agrees that it is reasonable andnecessary that the Employee make each of the following covenants:(a) At any time during the Employment Period and thereafter, the Employee shall notdisclose Confidential Information to any person or entity, either inside or outside of theCompany, other than as necessary in carrying out his duties and responsibilities as setforth in Section 2 hereof, without first obtaining the Company’s prior written consent(unless such disclosure is compelled pursuant to court orders or subpoena, and at which timethe Employee shall give notice of such proceedings to the Company).(b) At any time during the Employment Period and thereafter, the Employee shall notuse, copy or transfer Confidential Information other than as necessary in carrying out hisduties and responsibilities as set forth in Section 2 hereof, without first obtaining theCompany’s prior written consent.(c) On the Date of Termination, the Employee shall promptly deliver to the Company (orits designee) all written materials, records and documents made by the Employee or whichcame into his possession prior to or during the Employment Period concerning the business oraffairs of the Company or its Affiliates, including, without limitation, all materialscontaining Confidential Information.9. Disclosure of Information, Ideas, Concepts, Improvements, Discoveries and Inventions.As part of the Employee’s fiduciary duties to the Company, the Employee agrees that during hisemployment by the Company and for a period of three years following the Date of Termination, theEmployee shall promptly disclose in writing to the Company all information, ideas, concepts,improvements, discoveries and inventions, whether patentable or not, and whether or not reduced topractice, which are conceived, developed, made or acquired by the Employee, either individually orjointly with others, and which relate to the business, products or services of the Company or itsAffiliates, irrespective of whether the Employee used the Company’s time or facilities andirrespective of whether such information, idea, concept, improvement, discovery or invention wasconceived, developed, discovered or acquired by the Employee on the job, at home, or elsewhere.This obligation extends to all types of information, ideas and concepts, including information,ideas and concepts relating to new types of services,corporate opportunities, acquisition prospects, the identity of key representatives withinacquisition prospect organizations, prospective names or service marks for the Company’s businessactivities, and the like.
 
 

 
10. Ownership of Information, Ideas, Concepts, Improvements, Discoveries and Inventions, andall Original Works of Authorship.10.1 All information, ideas, concepts, improvements, discoveries and inventions, whetherpatentable or not, which are conceived, made, developed or acquired by the Employee or which aredisclosed or made known to the Employee, individually or in conjunction with others, during theEmployee’s employment by the Company and which relate to the business, products or services of theCompany or its Affiliates (including, without limitation, all such information relating tocorporate opportunities, research, financial and sales data, pricing and trading terms,evaluations, opinions, interpretations, acquisition prospects, the identity of customers or theirrequirements, the identity of key contacts within the customers’ organizations or within theorganization of acquisition prospects, marketing and merchandising techniques, and prospectivenames and service marks) are and shall be the sole and exclusive property of the Company.Furthermore, all drawings, memoranda, notes, records, files, correspondence, manuals, models,specifications, computer programs, maps and all other writings or materials of any type embodyingany of such information, ideas, concepts, improvements, discoveries and inventions are and shall bethe sole and exclusive property of the Company.10.2 In particular, the Employee hereby specifically sells, assigns, transfers and conveys tothe Company all of his worldwide right, title and interest in and to all such information, ideas,concepts, improvements, discoveries or inventions, and any United States or foreign applicationsfor patents, inventor’s certificates or other industrial rights which may be filed in respectthereof, including divisions, continuations, continuations-in-part, reissues and/or extensionsthereof, and applications for registration of such names and service marks. The Employee shallassist the Company and its nominee at all times, during the Employment Period and thereafter, inthe protection of such information, ideas, concepts, improvements, discoveries or inventions, bothin the United States and all foreign countries, which assistance shall include, but shall not belimited to, the execution of all lawful oaths and all assignment documents requested by the Companyor its nominee in connection with the preparation, prosecution, issuance or enforcement of anyapplications for United States or foreign letters patent, including divisions, continuations,continuations-in-part, reissues and/or extensions thereof, and any application for the registrationof such names and service marks.10.3 In the event the Employee creates, during the Employment Period, any original work ofauthorship fixed in any tangible medium of expression which is the subject matter of copyright(such as, videotapes, written presentations on acquisitions, computer programs, drawings, maps,architectural renditions, models, manuals, brochures or the like) relating to the Company’sbusiness, products or services, whether such work is created solely by the Employee or jointly withothers, the Company shall be deemed the author of such work if the work is prepared by the Employeein the scope of his employment; or, if the work is not prepared by the Employee within the scope ofhis employment but is specially ordered by the Company as a contribution to a collective work, as apart of a motion picture or other audiovisual work, as a translation, as a supplementary work, as acompilation or as an instructional text, then the work shall be considered to be work made for hire, and the Company shall be the author of suchwork. If such work is neither prepared by the Employee within the scope of his employment nor awork specially ordered and deemed to be a work made for hire, then the Employee hereby agrees tosell, transfer, assign and convey, and by these presents, does sell, transfer, assign and convey,to the Company all of the Employee’s worldwide right, title and interest in and to such work andall rights of copyright therein. The Employee agrees to assist the Company and its Affiliates, atall times, during the Employment Period and thereafter, in the protection of the Company’sworldwide right, title and interest in and to such work and all rights of copyright therein, whichassistance shall include, but shall not be limited to, the execution of all documents requested bythe Company or its nominee and the execution of all lawful oaths and applications for registrationof copyright in the United States and foreign countries.
 
 

 
11. Employee’s Non-Competition Obligation.11.1 (a) Until the Date of Termination, the Employee shall not, acting alone or in conjunctionwith others, directly or indirectly, in any of the business territories in which the Company or anyof its Affiliates is presently or from time to time during the Employment Period conductingbusiness, invest or engage, directly or indirectly, in any business which is competitive with thatof the Company or accept employment with or render services to such a competitor as a director,officer, agent, employee or consultant, or take any action inconsistent with the fiduciaryrelationship of an employee to his employer; provided, however, that the beneficial ownership bythe Employee of up to three percent of the Voting Stock of any corporation subject to the periodicreporting requirements of the Exchange Act shall not violate this Section 11.1(a).(b) In addition to the other obligations agreed to by the Employee in this AmendedAgreement, the Employee agrees that until the Date of Termination, he shall not at any time,directly or indirectly, (i) induce, entice or solicit any employee of the Company to leavehis employment, (ii) contact, communicate or solicit any customer or acquisition prospect ofthe Company derived from any customer list, customer lead, mail, printed matter or otherinformation secured from the Company or its present or past employees or (iii) in any othermanner use any customer lists or customer leads, mail, telephone numbers, printed materialor other information of the Company relating thereto.11.2 (a) If this Amended Agreement is terminated either by the Company for Cause or by theEmployee for any reason, then for a period of one year following the Date of Termination, theEmployee shall not, acting alone or in conjunction with others, directly or indirectly, in any ofthe business territories in which the Company or any of its Affiliates is presently or at the Dateof Termination conducting business, invest or engage, directly or indirectly, in any business whichis competitive with that of the Company as of the Date of Termination or accept employment with orrender services to such a competitor as a director, officer, agent, employee or consultant, or takeany action inconsistent with the fiduciary relationship of an employee to his employer; provided,however, that the beneficial ownership by the Employee of up to three percent of the Voting Stockof any corporation subject to the periodic reporting requirements of the Exchange Act shall notviolate this Section 11.2(a).
 
 

 
(b) In addition to the other obligations agreed to by the Employee in this AmendedAgreement, the Employee agrees that if this Amended Agreement is terminated either by theCompany for Cause or by the Employee for any reason, then for a period of one year followingthe Date of Termination, he shall not at any time, directly or indirectly, (i) induce,entice or solicit any employee of the Company to leave his employment, (ii) contact,communicate or solicit any customer or acquisition prospect of the Company derived from anycustomer list, customer lead, mail, printed matter or other information secured from theCompany or its present or past employees or (iii) in any other manner use any customer listsor customer leads, mail, telephone numbers, printed material or other information of theCompany relating thereto.11.3 If this Amended Agreement is terminated by the Company Without Cause, then the Employeeshall not be subject to any non-competition obligation.12. Miscellaneous.12.1 Notices. All notices and other communications required or permitted hereunder ornecessary or convenient in connection herewith shall be in writing and shall be deemed to have beengiven when delivered by hand or mailed by registered or certified mail, return receipt requested,as follows (provided that notice of change of address shall be deemed given only when received):If to the Company or PELLC to:400 E. Kaliste Saloom RoadSuite 6000Lafayette, Louisiana 70508If to the Employee to:450 Gears RoadSuite 330Houston, Texas 77067or to such other names or addresses as the Company, PELLC or the Employee, as the case may be,shall designate by notice to the other party hereto in the manner specified in this Section 12.1.12.2 Waiver of Breach. The waiver by any party hereto of a breach of any provision ofthis Amended Agreement shall neither operate nor be construed as a waiver of any subsequent breachby any party.12.3 Assignment. This Amended Agreement shall be binding upon and inure to thebenefit of the Company and PELLC, and each of their respective successors, legal representativesand assigns, and upon the Employee, his heirs, executors, administrators, representatives andassigns; provided, however, the Employee agrees that his rights and obligations hereunder arepersonal to him and may not be assigned without the express written consent of the Company.
 
 

 
12.4 Entire Agreement; No Oral Amendments. This Amended Agreement, together with anyexhibit attached hereto and any document, policy, rule or regulation referred to herein, replacesand merges all previous agreements and discussions relating to the same or similar subject matterbetween the Employee and each of the Company and PELLC and constitutes the entire agreement amongthe Employee, the Company and PELLC with respect to the subject matter of this Amended Agreement,including the Prior Agreement, and the Prior Agreement and the Prior Agreement was terminated bymutual consent of the Employee and PELLC effective as of the Original Effective Date, except forSections 3.3, 3.9 and 3.10 thereof, which shall survive the execution and delivery of this AmendedAgreement and the termination of the Prior Agreement; provided; however, that the right of theEmployee to (i) receive overriding royalty assignments pursuant to Section 3.3, (ii) participate asa working interest owner pursuant to Section 3.9 and (iii) negotiate a trade or transaction withthird parties with respect to certain prospects and to receive a percentage of the interest orother consideration retained in such trade or transaction pursuant to Section 3.10, shall, in eachcase, be limited the projects set forth on Exhibit A attached hereto and as furtherdepicted on Exhbits B-1 through B-12 attached hereto; provided, further, that the definedterm the defined term “Term of Employment” shall be amended to have the same meaning as the meaningassigned to “Employment Period” in Section 3 hereof and the defined term “PELLC Prospect GenerationTeam” shall be amended to mean the Employee, Mark K. Castell, Mark H. Parrot and other employees ofthe Company as designated from time to time by the Company. This Amended Agreement may not bemodified in any respect by any verbal statement, representation or agreement made by any employee,officer, or representative of the Company or PELLC or by any written agreement unless signed by anofficer of the Company and of PELLC who is expressly authorized by the Company and PELLC to executesuch document.12.5 Enforceability. If any provision of this Amended Agreement or applicationthereof to anyone or under any circumstances shall be determined to be invalid or unenforceable,such invalidity or unenforceability shall not affect any other provisions or applications of thisAmended Agreement which can be given effect without the invalid or unenforceable provision orapplication.12.6 Jurisdiction; Arbitration. The laws of the State of Louisiana shall govern theinterpretation, validity and effect of this Amended Agreement without regard to the place ofexecution or the place for performance thereof. Any controversy or claim arising out of orrelating to this Amended Agreement, or the breach thereof, shall be settled by arbitration locatedin Houston, Texas administered by the American Arbitration Association in accordance with itsapplicable arbitration rules, and the judgment on the award rendered by the arbitrator(s) may beentered in any court having jurisdiction thereof, which judgment shall be binding upon the partieshereto.12.7 Injunctive Relief. The Company, PELLC and the Employee agree that a breach ofany term of this Amended Agreement by the Employee would cause irreparable damage to the Companyand PELLC and that, in the event of such breach, the Company and PELLC shall have, in addition toany and all remedies of law, the right to any injunction, specific performance and other equitablerelief to prevent or to redress the violation of the Employee’s duties or responsibilitieshereunder.
 
 

 
13. Code Section 409A. This Amended Agreement shall be interpreted in accordance with theapplicable requirements of, and exemptions from, Section 409A of the Code and the TreasuryRegulations thereunder.14. No Guarantee of Tax Consequences. None of the Company, its Affiliates or any of theirofficers, directors, employees or agents are responsible for or guarantee the tax consequences toEmployee with respect to any payments or benefits provided under this Amended Agreement including,without limitation, any excise tax, interest or penalties that may be imposed under Code Section409A.*[Signature page follows]*
 
 

 
\IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this AmendedAgreement as of the date first written above.      PETROQUEST ENERGY, INC.