Exhibit
10.1 


 


EMPLOYMENT AGREEMENT


 


This EMPLOYMENT AGREEMENT
(this “Agreement”) is made and entered into effective as of January 1, 2015 (the “Effective Date”), by
and between Emerald Oil, Inc., a Delaware corporation (the “Company”), and Michael Dickinson (“Employee”).
Notwithstanding the foregoing, the provisions of Section 8 shall be effective immediately on the signing of this Agreement by the
Company and the Employee.


 


WITNESSETH:


 


WHEREAS, the Company
desires to employ Employee and Employee desires to be employed by the Company in accordance with the terms and conditions set forth
herein.


 


NOW, THEREFORE, in
consideration of the promises and mutual covenants contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and Employee hereby agree as follows:


 


Section 1.              Definitions.


 


(a)          “2011
Equity Incentive Plan” shall mean the Emerald Oil, Inc. Second Amended and Restated 2011 Equity Incentive Plan,
as may be amended from time to time.


 


(b)          “Accounting
Firm” shall have the meaning set forth in Section 9(b).


 


(c)          “Accrued
Obligations” shall mean (i) all accrued but unpaid Base Salary through the date of termination of Employee’s employment,
(ii) any unpaid or unreimbursed expenses incurred in accordance with Section 7 below, (iii) any benefits provided under the Company’s
employee benefit plans upon a termination of employment, in accordance with the terms contained therein, and (iv) reasonable relocation
costs, to the extent unpaid or unreimbursed, payable to Employee by the Company, in accordance with written Company policy.


 


(d)          “Affiliate”
shall mean any person controlling, controlled by, or under common control with, another Person.


 


(e)          Intentionally
left blank.


 


(f)          “Annual
Bonus” shall mean the aggregate value of the Annual Cash Bonus and the Annual Equity Bonus.


 


(g)          “Annual
Cash Bonus” shall have the meaning set forth in Section 4(b).


 


(h)          “Annual
Equity Bonus” shall have the meaning set forth in Section 4(c).


 


(i)          “Agreement”
shall have the meaning set forth in the preamble hereto.


 


(j)          “Base
Salary” shall mean the salary provided for in Section 4(a) or any increased salary granted to Employee pursuant to Section
4(a).


 




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(k)          “Board”
shall mean the Board of Directors of the Company.


 


(l)          “Cause”
shall mean (i) a material breach of the terms and conditions of Employee’s employment agreement with the Company, (ii) Employee’s
act(s) of gross negligence or willful misconduct in the course of Employee’s employment hereunder that is injurious to the
Company or any other member of the Company Group, (iii) willful failure or refusal by Employee to perform in any material respect
Employee’s duties or responsibilities, (iv) misappropriation by Employee of any assets of the Company or any other member
of the Company Group, (v) embezzlement or fraud committed by Employee, or at Employee’s direction, (vi) Employee’s
conviction of, or pleading “guilty” or “no contest” to a felony under state or federal law.


 


(m)          Intentionally
left blank.


 


(n)          
“COBRA” shall mean the health care continuation provisions of Section 4980B(f) of the Code.


 


(o)          “Code”
shall mean the Internal Revenue Code of 1986, as amended.


 


(p)          “Company”
shall have the meaning set forth in the preamble hereto, and shall include any of its successors or assigns.


 


(q)          “Company
Business” shall have the meaning in set forth in Section 13(a).


 


(r)          “Company
Group” shall mean the Company together with any direct or indirect subsidiaries of the Company or any of its Affiliates.


 


(s)          “Compensation
Committee” shall mean the committee of the Board designated to make compensation decisions relating to senior executive officers
of the Company Group.


 


(t)          “Confidential
Information” shall have the meaning in set forth in Section 11(b).


 


(u)          “Disability”
shall mean any physical or mental disability or infirmity of the Employee that has prevented the performance of Employee’s
duties for a period of (i) ninety (90) consecutive days or (ii) one hundred twenty (120) non-consecutive days during any six (6)
month period. Any question as to the existence, extent, or potentiality of Employee’s Disability upon which Employee and
the Company cannot agree shall be determined by a qualified, independent physician selected by the Company and approved by Employee
(which approval shall not be unreasonably withheld). The determination of any such physician shall be final and conclusive for
all purposes of this Agreement.


 


(v)         “Dodd-Frank
Act” shall have the meaning in set forth in Section 24.


 


(w)          “Effective
Date” shall have the meaning set forth in the preamble hereto.


 


(x)          “Employee”
shall have the meaning set forth in the preamble hereto.


 




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(y)          “Excise
Tax” shall have the meaning in set forth in Section 9(a).


 


(z)          “Good
Reason” shall mean, without Employee’s consent, (i) a material diminution in Employee’s title, duties, or responsibilities,
(ii) the failure of the Company to pay any compensation hereunder when due or to perform any other obligation of the Company under
this Agreement, or (iii) the relocation of Employee’s Principal Place of Employment by more than fifty (50) miles.


 


(aa)         “Non-Exempt
Deferred Compensation” shall have the meaning set forth in Section 14(d).


 


(bb)         “Original
Agreement” shall have the meaning set forth in the recitals hereto.


 


(cc)         “Parachute
Payments” shall have the meaning in set forth in Section 9(a).


 


(dd)         “Performance
Criteria” shall have the meaning set forth in Section 4(b).


 


(ee)         “Person”
shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company,
trust (charitable or non-charitable), unincorporated organization, or other form of business entity.


 


(ff)         “Principal
Place of Employment” shall mean Denver, Colorado or any future geographic location that is mutually agreed upon by the Company
and Employee.


 


(gg)         “Required
Delay Period” shall have the meaning in set forth in Section 14(d)(i).


 


(hh)         “Restricted
Territory” shall have the meaning set forth in Section 13(a).


 


(ii)           “Rules” shall have the meaning set forth in Section 20.


 


(jj)           “Severance Benefits” shall have the meaning in set forth in Section 8(h).


 


(kk)         
“Specified Employee” shall have the meaning set forth in Section 14(d).


 


(ll)           “Term” shall mean the period specified in Section 2.


 


(mm)       “Work
Product” shall have the meaning set forth in Section 12.


 


Section 2.               Acceptance
and Term. The Company agrees to employ Employee on an “at-will” basis, and Employee agrees to serve the Company
on an “at-will” basis, subject to the terms and conditions set forth herein. The “Term” shall mean the
period commencing on the Effective Date and, unless terminated sooner as provided in Section 8 hereof, continuing until December
31, 2015.  Following the end of the Term, the Employee shall continue to be employed on an “at-will” basis,
provided that the provisions of this Agreement shall no longer apply except to the extent that a provision hereunder specifically
continues to apply after the end of the Term, including but not limited to Sections 11, 12 and 13.


 




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Section 3.             Position,
Duties, and Responsibilities; Place of Performance.


 


(a)          During
the Term, Employee shall be employed and serve as the Chief Operating Officer of the Company and shall have such duties and responsibilities
as are commensurate with such title. The Employee shall report to the Chief Executive Officer of the Company and shall carry out
and perform all orders, directions and policies given to Employee by the Chief Executive Officer of the Company consistent with
his position and title.


 


(b)          Employee
shall devote his best efforts to the performance of his duties under this Agreement and shall not engage in any other business
or occupation during the Term that interferes with Employee’s exercise of judgment in the Company’s best interests.
Notwithstanding the foregoing, nothing herein shall preclude Employee from (i) serving as a member of the boards of directors or
advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses, (ii) engaging in charitable
activities and community affairs, and (iii) managing his personal investments and affairs; provided, however, that
the activities set out in clauses (i), (ii), and (iii) shall be limited by Employee so as not to materially interfere, individually
or in the aggregate, with the performance of his duties and responsibilities hereunder.


 


Section 4.             Compensation.
During the Term, Employee shall be entitled to the following compensation:


 


(a)          Base
Salary. Employee shall be paid an annualized Base Salary, payable in United States dollars and less applicable taxes and deductions
and in accordance with the regular payroll practices of the Company, of Three Hundred Seventy Five Thousand Dollars ($375,000)
with increases, if any, as may be approved in writing by the Compensation Committee.


 


(b)          Annual
Cash Bonus. During the Company’s 2015 fiscal year starting January 1, 2015 and ending December 31, 2015, and subject
to the satisfaction of applicable Performance Criteria (as defined below) and any other conditions required by the Compensation
Committee, the Employee shall be entitled to an annual bonus cash award (“Annual Cash Bonus”) equal to a minimum of
eighty percent (80%) times the Base Salary and a maximum amount of one hundred six point six-six-seven percent (106.667%) times
the Base Salary for the 2015 fiscal year of the Company as determined by the Compensation Committee in its sole discretion; provided,
however, that the Annual Cash Bonus for the 2015 fiscal year will be paid to the Employee within the period necessary to satisfy
the exemption from Code Section 409A (as defined below) for short term deferrals set forth in Treas. Reg. §1.409A-1(b)(4)
(which generally requires that payment be made not later than 2-1/2 months after the end of the year in which the amount becomes
vested). A minimum threshold level of performance predetermined by the Compensation Committee for such Performance Criteria must
be achieved or no Annual Cash Bonus will be paid during such performance period. The Annual Cash Bonus shall be based on the Compensation
Committee’s evaluation of the condition of Company’s business, the results of operations, Employee’s individual
performance for the performance period, the satisfaction by Employee or the Company of goals and milestones, including goals based
on Performance Objectives (as that term is defined in the 2011 Equity Incentive Plan), and the goals set forth in Section 4(d)
below, as may be established by the Compensation Committee, or any combination thereof (collectively, “Performance Criteria”).
The performance period for the Annual Cash Bonus shall be the 2015 fiscal year of the Company or such other performance period
as established by the Compensation Committee in its sole discretion, with the applicable Annual Cash Bonus amounts adjusted for
such performance period in proportion to the annual amounts set above. For an Annual Cash Bonus payment that is intended to constitute
performance-based compensation exempt from the deduction limitations of Section 162(m) of the Code, the amount of the Annual Cash
Bonus payable shall be contingent upon the achievement of reasonable, pre-established, and objective performance goals established
by the Compensation Committee in accordance with Treas. Reg. §1.162-27(e) for the fiscal year and communicated to Employee
and shall be subject to applicable limitations as specified in the 2011 Equity Incentive Plan (or any applicable successor plan).


 




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(c)          Annual
Equity Bonus Grants. During the Company’s 2015 fiscal year starting January 1, 2015 and ending December 31, 2015, and
subject to the satisfaction of applicable Performance Criteria and any other conditions required by the Compensation Committee,
the Employee shall be eligible to receive an annual equity grant (“Annual Equity Bonus”) pursuant to the 2011 Equity
Incentive Plan (or any applicable successor plan subject to applicable limitations in such plan(s)) with a minimum value equal
to one hundred-thirteen percent (113%) times the Base Salary and a maximum value of one hundred-forty percent (140%) times the
Base Salary for the 2015 fiscal year of the Company as determined by the Compensation Committee in its sole discretion. A minimum
threshold level of performance predetermined by the Compensation Committee for such Performance Criteria must be achieved or no
Annual Equity Bonus will be paid during such performance period. For an Annual Equity Bonus grant that is intended to constitute
performance-based compensation exempt from the deduction limitations of Section 162(m) of the Code (other than grants of options
or stock appreciation rights), the amount of the Annual Equity Bonus payable shall be contingent upon the achievement of reasonable,
pre-established, and objective performance goals established by the Compensation Committee in accordance with Treas. Reg. §1.162-27(e)
for the taxable year and communicated to Employee and shall be subject to applicable limitations as specified in the 2011 Equity
Incentive Plan (or any applicable successor plan).


 


(d)          Determination
of the Size of the Annual Cash Bonus and Annual Equity Bonus. The determination of whether the minimum amount or the maximum
amount of each of the Annual Cash Bonus and the Annual Equity Bonus will be paid shall be determined based on the operational status
of the wells set forth in the attached Exhibit A (the “Bonus Test Wells”) during the period between April 1,
2015 and December 31, 2015 (the “Well Test Period”). If the Bonus Test Wells are operable for greater than eighty percent
(80%) of the Well Test Period, then the Employee shall receive the minimum amount of the Annual Cash Bonus and the Annual Equity
Bonus. If the Bonus Test Wells are operable for greater than eighty-five percent (85%) of the Well Test Period, then the Employee
shall receive the maximum amount of the Annual Cash Bonus and the Annual Equity Bonus.


 


(e)          Additional
Compensation Opportunities. In addition to the compensation Employee is otherwise eligible for pursuant to the terms of this
Section 4, Employee shall be granted that number of restricted stock units necessary to equal the values set forth in the following
table, which restricted stock units shall vest pursuant to the terms of the 2011 Equity Incentive Plan (or any applicable successor
plan), based on the closing price per share of the Company’s common stock on the NYSEMKT exchange on December 31, 2015 (the
“Closing Determination Date”).


 




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	Closing Price Per Share of the Company’s Common
 Stock on December 31, 2015	 	Value of Restricted Stock Units to Be Granted to
 Employee	 
	Between $3.00 and $3.99	 	$	500,000.00	 
	Between $4.00 and $4.99	 	$	1,000,000.00	 
	Between $5.00 and $5.99	 	$	1,500,000.00	 
	Between $6.00 and $6.99	 	$	2,500,000.00	 
	$7.00 or Greater	 	$	3,000,000.00	 



 


(f)          Adjustment
for Recapitalization. Notwithstanding any of the foregoing in this Section 4, in the event of an increase or decrease in the
number of shares of common stock resulting from a stock split, reverse split, combination or reclassification of the common stock,
then the Company, in its sole and absolute discretion, may appropriately adjust the size of any stock issuance to which you are
eligible hereunder.


 


Section 5.            Employee
Benefits.


 


(a)          General.
During the Term, Employee shall be entitled to participate in health insurance, retirement plans, directors’ and officers’
insurance coverage and other benefits provided to other senior executives of the Company, as in effect from time to time.


 


(b)          Vacation
and Time Off. During each calendar year of the Term, Employee shall be eligible for twenty (20) days paid vacation, as well
as sick pay and other paid and unpaid time off in accordance with the policies and practices of the Company, as in effect from
time to time.


 


Section 6.             Key-Man
Insurance. At any time during the Term, the Company shall have the right to insure the life of Employee for the sole benefit
of the Company, in such amounts, and with such terms, as it may determine. All premiums payable thereon shall be the obligation
of the Company. Employee shall have no interest in any such policy, but agrees to cooperate with the Company in procuring such
insurance by submitting to physical examinations, supplying all information required by the insurance company, and executing all
necessary documents, provided that no financial obligation is imposed on Employee by any such documents. Upon the termination of
his employment for any reason, Company will allow Employee to convert the insurance policy to a permanent personal life insurance
policy.


 


Section 7.            Reimbursement
of Business Expenses. Employee is authorized to incur reasonable business expenses in carrying out his duties and responsibilities
under this Agreement, and the Company shall promptly reimburse Employee for all such reasonable business expenses, subject to documentation
in accordance with written Company policy, as in effect from time to time.


 




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Section 8.            Termination
of Employment.


 


(a)          General.
The Term shall terminate earlier than as provided in Section 2 hereof upon the earliest to occur of (i) Employee’s death,
(ii) a termination by reason of a Disability, (iii) a termination by the Company with or without Cause, or (iv) a termination by
Employee with or without Good Reason.


 


(b)          Termination
Due to Death or Disability. Employee’s employment shall terminate automatically upon his death. The Company may terminate
Employee’s employment immediately upon the occurrence of a Disability. In the event Employee’s employment is terminated
during the Term due to his death or Disability, subject to Section 8(h) of this Agreement for a termination due to Disability,
Employee or his estate or his beneficiaries, as the case may be, shall be entitled to:


 


(i)          The
Accrued Obligations, which amount shall be paid within thirty (30) days from the date of such termination; and


 


(ii)         Any
unpaid Annual Bonus in respect of any completed fiscal year that has ended prior to the date of such termination with such amount
determined based on actual performance during such fiscal year as determined by the Compensation Committee, which amount shall
be paid on the sixtieth (60th) day following the date of such termination; and


 


(iii)        Any
Annual Bonus that would have been payable based on actual performance with respect to the year of termination in the absence of
the Employee’s death or Disability, pro-rated for the period the Employee worked prior to his death or Disability, and payable
at the same time as the bonus would have been paid in the absence of the Employee’s death or Disability; and


 


(iv)        Immediate
vesting of any and all equity or equity-related awards previously awarded to the Employee, irrespective of type of award.


 


Following such termination
of Employee’s employment by reason of death or Disability, except as set forth in this Section 8(b), Employee shall have
no further rights to any compensation or any other benefits under this Agreement.


 


(c)          Termination
by the Company for Cause.


 


(i)          The
Company may terminate Employee’s employment at any time for Cause.


 


(ii)         In
the event the Company terminates Employee’s employment for Cause, Employee shall be entitled only to the Accrued Obligations,
which amount shall be paid within thirty (30) days from the date of such termination, and any equity awards or equity-related awards
that are not vested as of the date of termination shall be cancelled. Following such termination of Employee’s employment
for Cause, except as set forth in this Section 8(c)(ii), Employee shall have no further rights to any compensation or any other
benefits under this Agreement (including, but not limited to, any payment of any bonus that has not been paid as of the date of
Employee’s termination of employment).


 




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(d)          Termination
by the Company without Cause. The Company may terminate Employee’s employment at any time without Cause. In the event
Employee’s employment is terminated during the Term by the Company without Cause (other than due to death or Disability)
and subject to the terms of Section 8(h), Employee shall be entitled to:


 


(i)          The
Accrued Obligations; and


 


(ii)         Any
unpaid Annual Bonus in respect of any completed fiscal year that has ended prior to the date of such termination with such amount
determined based on actual performance during such fiscal year as determined by the Compensation Committee; and


 


(iii)        A
lump sum cash payment equal to eighteen (18) times the “applicable percentage” of the monthly COBRA premium cost applicable
to Employee if Employee (or his dependents) were to elect COBRA coverage, or similar coverage as provided by similar state law,
in connection with such termination, (for purposes hereof, the “applicable percentage” shall be the percentage of Employee’s
health care premium costs covered by the Company as of the date of termination); and


 


(iv)        Immediate
vesting of any and all equity or equity-related awards previously awarded to the Employee, irrespective of type of award.


 


Any amounts payable
to Employee under clause (i), (ii), or (iii) of this Section 8(d) shall be paid in lump sum on the sixtieth (60th) day
following the date of Employee’s termination of employment, subject to Section 8(h) of this Agreement. Following such termination
of Employee’s employment by the Company without Cause, except as set forth in this Section 8(d), Employee shall have no further
rights to any compensation or any other benefits under this Agreement.


 


(e)          Termination
by Employee with Good Reason. Employee may terminate Employee’s employment during the Term with Good Reason by providing
the Company thirty (30) days’ written notice setting forth in reasonable specificity the event that constitutes Good Reason
(which notice must be given no later than ninety (90) days after the initial occurrence of such event). During such thirty (30)
day notice period, the Company shall have a cure right (if curable), and if not cured within such period, Employee’s termination
will be effective upon the expiration of such cure period, and, subject to the terms of Section 8(h), Employee shall be entitled
to:


 


(i)          The
Accrued Obligations; and


 


(ii)         Any
unpaid Annual Bonus in respect of any completed fiscal year that has ended prior to the date of such termination with such amount
determined based on actual performance during such fiscal year as determined by the Compensation Committee; and


 


(iii)        A
lump sum cash payment equal to eighteen (18) times the “applicable percentage” of the monthly COBRA premium cost applicable
to Employee if Employee (or his dependents) were to elect COBRA coverage, or similar coverage as provided by similar state law,
in connection with such termination, (for purposes hereof, the “applicable percentage” shall be the percentage of Employee’s
health care premium costs covered by the Company as of the date of termination).


 




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Any amounts payable
to Employee under clause (i), (ii), or (iii) of this Section 8(e) shall be paid in lump sum on the sixtieth (60th) day
following the date of Employee’s termination of employment, subject to Section 8(h) of this Agreement. Following such termination
of Employee’s employment by Employee with Good Reason, except as set forth in this Section 8(e), Employee shall have no further
rights to any compensation or any other benefits under this Agreement.


 


(f)          Termination
by Employee without Good Reason. Employee may terminate Employee’s employment without Good Reason by providing the Company
sixty (60) days’ written notice of such termination. In the event of a termination of employment by Employee under this Section
8(f), Employee shall be entitled only to the Accrued Obligations, and any equity awards or equity-related awards that are not vested
as of the date of termination shall be cancelled. In the event of termination of Employee’s employment under this Section
8(f), the Company may, in its sole and absolute discretion, by written notice accelerate such date of termination without changing
the characterization of such termination as a termination by Employee without Good Reason. Following such termination of Employee’s
employment by Employee without Good Reason, except as set forth in this Section 8(f), Employee shall have no further rights to
any compensation or any other benefits under this Agreement.


 


(g)          Release.
Notwithstanding any provision herein to the contrary, and as a condition precedent to payment of any amount or provision of any
benefit pursuant to subsection 8(b), (d), or (e) (other than payment of any Accrued Obligations) (the “Severance Benefits”),
Employee or Employee’s estate, as applicable, shall execute and shall not rescind, a release in favor of the Company Group
and all related companies, individuals, and entities, in a form satisfactory to the Company, and any revocation period applicable
to such release must have expired as of the sixtieth (60th) day following Employee’s termination of employment.
If Employee fails to execute the release in such a timely manner so as to permit any revocation period to expire prior to the end
of such sixty (60) day period, or timely revokes his acceptance of such release following its execution, Employee shall not be
entitled to any of the applicable Severance Benefits. Further, to the extent that (i) such termination of employment occurs
within sixty (60) days of the end of any calendar year, and (ii) any of the Severance Benefits constitutes “nonqualified
deferred compensation” for purposes of Section 409A, any payment of any amount or provision of any benefit otherwise scheduled
to occur prior to the sixtieth (60th) day following the date of Employee’s termination of employment hereunder,
but for the condition on executing the release as set forth herein, shall not be made prior to the first day of the second calendar
year, after which any remaining Severance Benefits shall thereafter be provided to Employee according to the applicable schedule
set forth herein.


 




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Section 9.             Parachute
Payments; Modified Cutback.


 


(a)          If
any payment, benefit or distribution of any type to or for the benefit of Executive, whether paid or payable, provided or to be
provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise (collectively, the “Parachute
Payments”) would subject Employee to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”),
the Parachute Payments shall be reduced so that the maximum amount of the Parachute Payments (after reduction) shall be one dollar
($1.00) less than the amount which would cause the Parachute Payments to be subject to the Excise Tax; provided that the
Parachute Payments shall only be reduced to the extent the after-tax value of amounts received by Employee after application of
the above reduction would exceed the after-tax value of the amounts received without application of such reduction.  For this
purpose, the after-tax value of an amount shall be determined taking into account all federal, state, and local income, employment
and excise taxes applicable to such amount.  Unless Employee shall have given prior written notice to the Company to effectuate
a reduction in the Parachute Payments if such a reduction is required, any such notice consistent with the requirements of Section
409A to avoid the imputation of any tax, penalty or interest thereunder, the Company shall reduce or eliminate the Parachute Payments
by first reducing or eliminating any cash severance benefits (with the payments to be made furthest in the future being reduced
first), then by reducing or eliminating any accelerated vesting of stock options or similar awards, then by reducing or eliminating
any accelerated vesting of restricted stock or similar awards, then by reducing or eliminating any other remaining Parachute Payments;
provided, that no such reduction or elimination shall apply to any non-qualified deferred compensation amounts (within the
meaning of Section 409A) to the extent such reduction or elimination would accelerate or defer the timing of such payment in manner
that does not comply with Section 409A.


 


(b)          An
initial determination as to whether (i) any of the Parachute Payments received by Employee in connection with the occurrence
of a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of
the Company shall be subject to the Excise Tax, and (ii) the amount of any reduction, if any, that may be required pursuant
to Section 9(a) above, shall be made by an independent accounting firm selected by the Company and reasonably acceptable to Employee
(the “Accounting Firm”) prior to the consummation of such change in the ownership or effective control of the Company
or in the ownership of a substantial portion of the assets of the Company.  Employee shall be furnished with notice of all
determinations made as to the Excise Tax payable with respect to Employee’s Parachute Payments, together with the related
calculations of the Accounting Firm, promptly after such determinations and calculations have been received by the Company.


 


(c)          For
purposes of this Section 9:


 


(i)          no
portion of the Parachute Payments, the receipt or enjoyment of which Employee shall have effectively waived in writing prior to
the date of payment of the Parachute Payments, shall be taken into account;


 


(ii)         no
portion of the Parachute Payments shall be taken into account which in the opinion of the Accounting Firm does not constitute a
“parachute payment” within the meaning of Section 280G(b)(2) of the Code;


 


(iii)        the
Parachute Payments shall be reduced only to the extent necessary so that the Parachute Payments (other than those referred to in
the immediately preceding clause (i) or (ii)) in their entirety constitute reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4) of the Code or are otherwise not subject to disallowance as deductions, in the opinion
of the Accounting Firm; and


 




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(iv)        the
value of any non-cash benefit or any deferred payment or benefit included in the Parachute Payments shall be determined by the
Accounting Firm based on Sections 280G and 4999 of the Code, or on substantial authority within the meaning of Section 6662 of
the Code.


 


Section 10.           Representations
and Warranties of Employee. Employee represents and warrants to the Company that:


 


(a)          Employee
is entering into this Agreement voluntarily and that Employee’s employment hereunder and compliance with the terms and conditions
hereof will not conflict with or result in the breach by Employee of any agreement to which Employee is a party or by which Employee
may be bound;


 


(b)          Employee
has not violated, and in connection with Employee’s employment with the Company will not violate, any non-solicitation, non-competition,
or other similar covenant or agreement of a prior employer by which Employee is or may be bound; and


 


(c)          in
connection with Employee’s employment with the Company, Employee will not use any confidential or proprietary information
Employee may have obtained in connection with employment with any prior employer.


 


Section 11.           Nondisclosure
and Nonuse of Confidential Information.


 


(a)          Employee
will not disclose or use at any time, either during the Term or thereafter, any Confidential Information (as defined below) of
which Employee is or becomes aware, whether or not such information is developed by him, except to the extent that such disclosure
or use is directly related to and required by Employee’s performance in good faith of duties assigned to Employee by the
Company. Employee will take all appropriate steps to safeguard Confidential Information and to protect it against disclosure, misuse,
espionage, loss and theft. Employee shall deliver to the Company at the termination of the Term, or at any time the Company may
request, all memoranda, notes, plans, records, reports, disks, computer tapes and software and other documents and data (and copies
thereof, regardless of the form thereof, including electronic copies) relating to the Confidential Information or the Work Product
(as defined below) of the business of the Company or any of the Company’s Affiliates, which Employee may then possess or
have under his control.


 


(b)          As
used in this Agreement, the term “Confidential Information” means confidential, proprietary, trade secret, proprietary,
scientific, technical, business or financial information that is not generally known to the public and that is used, developed
or obtained by the Company or any Affiliate, in connection with their respective businesses, including, but not limited to, information,
observations and data obtained or learned by Employee while employed by the Company or any of its Affiliates (including those obtained
or learned prior to the date of this Agreement) concerning (i) the business or affairs of the Company or any Affiliate, (ii) products
or services, (iii) geologic data, (iv) seismic data, (v) analyses, (vi) drawings, photographs and reports, (vii) computer software,
including operating systems, applications and program listings, (viii) flow charts, manuals and documentation, (ix) data bases,
(x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether patentable or unpatentable
and whether or not reduced to practice, (xii) customers, clients, suppliers and subcontractors and customer, client, supplier and
subcontractor lists, (xiii) other copyrightable works, (xiv) all drilling methods, processes, technology and trade secrets, (xv)
business strategies, acquisition plans and target properties, financial or other performance data and personnel lists and data,
and (xvi) all similar and related information in whatever form. All such Confidential Information is extremely valuable and is
intended to be kept secret to the Company and its clients and customers, is the sole and exclusive property of the Company or its
clients and customers, and is subject to the restrictive covenants set forth herein.


 




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Notwithstanding anything
to the contrary contained herein, Employee shall not be required to maintain as confidential any information or material which:


 


(i)          is
now, or hereafter becomes, through no act or failure to act on the part of Employee which would constitute a breach of this Section
11, generally known or available to the public;


 


(ii)         is
furnished to Employee by a third party who, to the knowledge of Employee, is not under obligations of confidentiality to the Company
or any of its Affiliates, without restriction on disclosure;


 


(iii)        is
disclosed with the written approval of the Company;


 


(iv)        is
required to be disclosed by law, court order, or similar compulsion; provided, however, that such disclosure shall be limited
to the extent so required or compelled; and provided, further, that Employee shall give the Company notice of such disclosure
and cooperate (without cost to Employee) with the Company in seeking suitable protection; or


 


(v)         is
disclosed pursuant to or in connection with any legal proceeding involving Employee and/or the Company or any Affiliate thereof.


 


Section 12.           Inventions,
Discoveries and Patents. Employee agrees that all inventions, discoveries, innovations, improvements, technical information,
systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and
all similar or related information (whether patentable or unpatentable) which relate to the Company’s or any of its Affiliates’
business or research and development and any existing or future products or services and which are or were discovered, conceived,
developed or made by Employee (whether or not during usual business hours or on the premises of the Company and whether or not
alone or in conjunction with any other person) while employed by the Company or any Affiliate (including those conceived, developed
or made prior to the date of this Agreement) together with all patent applications, letters patent, trademark, trade name and service
mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing (collectively
referred to herein as, the “Work Product”), belong in all instances to the Company or such Affiliate. Employee will
promptly disclose such Work Product to the Board and assign to and otherwise perform (without cost to Employee) all actions reasonably
requested by the Board (whether during or after the employment period) to establish and confirm the Company’s or Affiliate’s
exclusive ownership of such Work Product (including, without limitation, the execution and delivery of assignments, consents, oaths,
powers of attorney and other instruments) and to provide reasonable assistance to the Company or any of its Affiliates in connection
with the prosecution of any applications for patents, trademarks, trade names, service marks or reissues thereof or in the prosecution
or defense of interferences relating to any Work Product.


 




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Section 13.           Post-Termination
Non-Compete, Non-Solicitation.


 


(a)          If
Employee’s employment terminates pursuant to Sections 8(c), 8(d), 8(e), or 8(f) hereof during the Term or for any reason
thereafter, Employee agrees that, for a period ending one (1) year from the date of his termination of employment, Employee shall
not (except on behalf of the Company or with the prior written consent of the Company), directly or indirectly, (i) engage in the
business in which the Company is engaged or proposes to be engaged (the “Company Business”), within the Restricted
Territory (as defined below), (ii) interfere with the Company Business or the business of any Affiliate, or (iii) own, manage,
control, participate in, consult with, render services for or in any manner engage in or represent any business within the Restricted
Territory that is competitive with the Company Business or the business of any Affiliate thereof or any product of the Company
or any Affiliate, as such business is conducted or proposed to be conducted from and after the date of this Agreement. As used
in this Agreement, the term “Restricted Territory” means any county in the United States where the company holds mineral
lease interests. Nothing herein shall prohibit Employee from being a passive owner of not more than two percent (2%) of the outstanding
stock of any class of a corporation that is competitive with the Company Business and which is publicly traded, so long as Employee
has no active participation in the business of such corporation.


 


(b)          If
Employee’s employment terminates pursuant to Sections 8(c), 8(d), 8(e), or 8(f) hereof during the Term or for any reason
thereafter, Employee agrees that, for a period ending one (1) year from the date of his termination of employment, Employee shall
not directly or indirectly through another person or entity (i) induce or attempt to induce any employee of the Company or any
Affiliate of the Company to leave the employ of the Company or such Affiliate, or in any way interfere with the relationship between
the Company or any such Affiliate, on the one hand, and any employee or consultant thereof, on the other hand, (ii) hire or engage
as a consultant or otherwise any person who is or was an employee or consultant of the Company or any Affiliate thereof until six
(6) months after such individual’s employment or consulting relationship with the Company or such Affiliate has been terminated
or (iii) induce or attempt to induce any customer, supplier, subcontractor, licensee or other business relation of the Company
or any Affiliate to cease doing business with the Company or such Affiliate, or in any way interfere with the relationship between
any such customer, supplier, subcontractor, licensee or business relation, on the one hand, and the Company or any Affiliate, on
the other hand.


 


(c)          Employee
acknowledges that the covenants contained in this Section 13, including those related to duration, geographic scope, and the scope
of prohibited conduct, are reasonable and necessary to protect the legitimate interests of the Company. Employee acknowledges that
he is an executive and management level employee as referenced in, and governed by, C.R.S. § 8-2-113(2)(d). Employee further
acknowledges that the covenants contained in this Section 13 are necessary to protect, and reasonably related to the protection
of, the Company’s trade secrets, to which Employee will be exposed and with which Employee will be entrusted.


 




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(d)          Employee
shall inform any prospective or future employer of any and all restrictions contained in this Agreement and provide such employer
with a copy of such restrictions (but no other terms of this Agreement), prior to the commencement of that employment.


 


Section 14.           Taxes.


 


(a)          Withholding.
The Company may withhold and deduct from any payments made under this Agreement all applicable taxes, including but not limited
to income, employment, and social security taxes, as shall be required by applicable law. Employee acknowledges and represents
that the Company has not provided any tax advice to Employee in connection with this Agreement and that Employee has been advised
by the Company to seek tax advice from Employee’s own tax advisors regarding this Agreement and payments that may be made,
and the benefits to be provided, to Employee pursuant to this Agreement, including specifically, the application of the provisions
of Section 409A of the Code to such payments.


 


(b)          Section
409A – General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable
hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements Section 409A
of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder.


 


(c)          Definitional
Restrictions. Notwithstanding anything in this Agreement to the contrary, no payment that is due upon Employee’s termination
of employment shall be made unless and until Employee has incurred a “separation from service,” as defined under Treas.
Reg. §1.409A-1(h).


 


(d)          Six-Month
Delay in Certain Circumstances. Notwithstanding any other provision of this Agreement, if Employee is a Specified Employee
(as defined below) at the time of termination of employment, then, to the extent that payments and benefits under this Agreement
constitute “deferred compensation” under Section 409A of the Code and are not eligible for any exemption thereunder
(“Non-Exempt Deferred Compensation”), and payment of cash or provision of his benefits is pursuant to a termination
of employment, then:


 


(i)          the
amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following
Employee’s separation from service will be accumulated through and paid or provided on the first day of the seventh month
following Employee’s separation from service (or, if Employee dies during such period, within 30 days after Employee’s
death) (in either case, the “Required Delay Period”); and


 


(ii)         the
normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay
Period.


 




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For purposes of this
Agreement, the term “Specified Employee” has the meaning given such term in Treas. Reg. §1.409A-1(i).


 


(e)          Treatment
of Installment Payments. Each payment of termination benefits under Section 8 of this Agreement shall be considered a separate
payment, as described in Treas. Reg. §1.409A-2(b)(2), for purposes of Section 409A of the Code.


 


(f)          Timing
of Reimbursements and In-kind Benefits. If Employee is entitled to be paid or reimbursed for any taxable expenses under Section
7, and such payments or reimbursements are includible in Employee’s federal gross taxable income, the amount of such expenses
reimbursable in any one calendar year shall not affect the amount reimbursable in any other calendar year, the reimbursement of
an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred, and the
right of Employee to reimbursement of such expenses shall not be subject to exchange or liquidation for any other benefit or payment.


 


(g)          Permitted
Acceleration. The Company shall have the sole authority to make any accelerated distribution permissible under Treas. Reg.
Section 1.409A-3(j)(4) to Employee of deferred amounts, provided that such distribution meets the requirements of Treas. Reg. §1.409A-3(j)(4).


 


Section 15.           Set
Off; Mitigation. The Company’s obligation to pay Employee the amounts provided and to make the arrangements provided
hereunder shall be subject to set-off, counterclaim, or recoupment of amounts owed by Employee to the Company or its Affiliates,
provided that such amounts owed have been acknowledged by Employee in writing. To the extent any amount so subject to set-off,
counterclaim, or recoupment is payable in installments hereunder, such set-off, counterclaim, or recoupment shall not modify the
applicable payment date of any installment, and to the extent an obligation cannot be satisfied by reduction of a single installment
payment, any portion not satisfied shall remain an outstanding obligation of Employee and shall be applied to the next installment
only at such time the installment is otherwise payable pursuant to the specified payment schedule.


 


Section 16.           Successors
and Assigns; No Third-Party Beneficiaries.


 


(a)          The
Company. This Agreement shall inure to the benefit of the Company and its respective successors and assigns. In the event of
change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company,
this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor, and such successor
shall discharge and perform all the promises, covenants, duties, and obligations of the Company hereunder.


 


(b)          Employee.
Employee’s rights and obligations under this Agreement shall not be transferable by Employee by assignment or otherwise,
without the prior written consent of the Company; provided, however, that if Employee shall die, all amounts then
payable to Employee hereunder shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee,
or other designee, or if there be no such designee, to Employee’s estate.


 




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(c)          No
Third-Party Beneficiaries. Except as otherwise set forth in Section 16(a) or Section 16(b) hereof, nothing expressed or
referred to in this Agreement will be construed to give any Person other than the Company, the other members of the Company Group,
and Employee any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement.


 


(d)          Enforcement.
Because Employee’s services are unique and because Employee has access to Confidential Information and Work Product, the
parties hereto agree that money damages would be an inadequate remedy for any breach of Sections 11, 12 and 13 of this Agreement.
Therefore, in the event of a breach or threatened breach of Sections 11, 12 and 13 of this Agreement, all parties hereto and their
respective successors or assigns will be entitled to injunctive relief, in addition to other rights and remedies existing in their
favor at law or in equity in order to enforce, or prevent any violations of, the provisions hereof without posting a bond or other
security.


 


Section 17.           Waiver
and Amendments. Any waiver, alteration, amendment, or modification of any of the terms of this Agreement shall be valid only
if made in writing and signed by each of the parties hereto. No waiver by either of the parties hereto of their rights hereunder
shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver
specifically states that it is to be construed as a continuing waiver.


 


Section 18.           Severability.
If any covenants or such other provisions of this Agreement are found to be invalid or unenforceable by a final determination of
a court of competent jurisdiction, (a) the remaining terms and provisions hereof shall be unimpaired, and (b) the invalid or unenforceable
term or provision hereof shall be deemed replaced by a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision hereof.


 


Section 19.           Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado, without regard
to its conflicts of law or choice of law provisions which would result in the application of the law of any other jurisdiction.


 


Section 20.           Arbitration.
Any controversy or claim arising out of or relating to this Agreement or any transactions provided for herein, or the breach thereof,
other than a claim for injunctive relief for a breach of Sections 11, 12 and 13, will be settled by arbitration in accordance with
the commercial Arbitration Rules of the American Arbitration Association (the “Rules”) in effect at the time demand
for arbitration is made by any party. The evidentiary and procedural rules in such proceedings will be kept to the minimum level
of formality that is consistent with the Rules. The Company and Employee shall agree on a sole arbitrator of the controversy or
claim. The arbitrator must be experienced in the matters in dispute. If the sole arbitrator cannot be agreed upon by the Company
and the Employee within 10 business days, either the Company or Employee may request the American Arbitration Association to name
a sole arbitrator. Arbitration will occur in Denver, Colorado, or such other location agreed to by the Company and the Employee.
The award made by the arbitrator will be final and binding, and judgment may be entered in any court of law having competent jurisdiction.
The award is subject to confirmation, modification, correction or vacation only as explicitly provided in Title 9 of the United
States Code. The prevailing party will be entitled to an award of pre- and post-award interest as well as reasonable attorneys'
fees incurred in connection with the arbitration and any judicial proceedings related thereto and any costs incurred paying the
fees or expenses of the arbitrator.


 




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Section 21.           Notices.


 


(a)          Every
notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party
for whom or which it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to
the other party as herein provided; provided, that unless and until some other address be so designated, all notices and
communications by Employee to the Company shall be mailed or delivered to the Company at its principal executive office at 1600
Broadway, Suite 1360, Denver, Colorado 80202, and all notices and communications by the Company to Employee may be given to Employee
personally or may be mailed to Employee at Employee’s last known address, as reflected in the Company’s records.


 


(b)          Any
notice so addressed shall be deemed to be given (i) if delivered by hand, on the date of such delivery, (ii) if mailed by courier
or by overnight mail, on the first business day following the date of such mailing, and (iii) if mailed by registered or certified
mail, on the third business day after the date of such mailing.


 


Section 22.           Section
Headings; Mutual Drafting.


 


(a)          The
headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute
a part thereof or affect the meaning or interpretation of this Agreement or of any term or provision hereof.


 


(b)          The
parties are sophisticated and have been represented (or have had the opportunity to be represented) by their separate attorneys
throughout the transactions contemplated by this Agreement in connection with the negotiation and drafting of this Agreement and
any agreements and instruments executed in connection herewith. As a consequence, the parties do not intend that the presumptions
of laws or rules relating to the interpretation of contracts against the drafter of any particular clause should be applied to
this Agreement or any document or instrument executed in connection herewith, and therefore waive their effects.


 


Section 23.           Entire
Agreement. This Agreement, together with any exhibits attached hereto, constitutes the entire understanding and agreement of
the parties hereto regarding the employment of Employee. This Agreement supersedes all prior negotiations, discussions, correspondence,
communications, understandings, and agreements between the parties relating to the subject matter of this Agreement.


 


Section 24.           Dodd-Frank
Act and Other Applicable Law Requirements. Employee agrees (i) to abide by any compensation recovery, recoupment, anti-hedging
or other policy applicable to executives of the Company and its Affiliates, as may be in effect from time to time, as approved
by the Board or a duly authorized committee thereof or as required by the Dodd-Frank Wall Street Reform and Consumer Protection
Act of 2010 (“Dodd-Frank Act”) or other applicable law, and (ii) that the terms and conditions of this Agreement shall
be deemed automatically amended as may be necessary from time to time to ensure compliance by Employee and this Agreement with
such policies, the Dodd-Frank Act, or other applicable law.


 




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Section 25.           Survival
of Operative Sections. Upon any termination of Employee’s employment, the provisions of this Agreement (together with
any related definitions set forth in Section 1 hereof) shall survive to the extent necessary to give effect to the provisions thereof,
including but not limited to Sections 11, 12 and 13.


 


Section 26.           Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together
shall constitute one and the same instrument. The execution of this Agreement may be by actual or facsimile signature.


 





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


 


	 	COMPANY:  
	 	 
	 	EMERALD OIL, INC.
	 	 	 
	 	By:	            /s/ Seth Setrakian
	 	Name:	 	Seth Setrakian
	 	Title:	 	Chairman of the Compensation Committee
	 	Date:	 	December 8, 2014
	 	 	 
	 	EMPLOYEE:
	 	 	 
	 	By:	          /s/ Michael Dickinson
	 	Name:	 	Michael Dickinson 
	 	Date:	 	December 8, 2014


 




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Exhibit A:


Bonus Test Wells


 




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