Document:

exhibit_10-7.htm

    
      

    

    Exhibit
      10.7

    

    Amendment
      to Promissory Note

    

    

    November
      2, 2007

     

     

    W2
      Energy
      Inc.

    26
      Densley Ave

    Toronto
      Ontario

    M6M
      2R1

     

    Attn:
      Board of Directors of W2 Energy Inc.

     

    Via
      Facsimile

     

     

    Re:
      Amendment to Promissory Note.

     

    Gentlemen

     

    Premier
      Capital is amending the Promissory Note of $750,000.00 with 9.5% interest rate
      of which as of September 30, 2007 there was a balance of
      $550,685.35.

     

    Premier
      Capital herby amends the note to have a repayment term of 48 months from the
      date of this letter. Payments of $11,472.61 plus interest shall be made at
      the
      1st of each
      month commencing November 1st 2007.

     

    Should
      the company become insolvent during this time the note will become due and
      payable immediately.

     

    All
      other
      terms and conditions and remedies of the note shall remain without
      amendment.

     

    

     

    Sincerely,

     

     

    Mike
      McLaren

    PresidentBernard McDougall

Bernard McDougall

1750 W. King Edward

Vancouver, BC  V6J 2V9

November 2, 2007

Micron Enviro Systems, Inc.

#1205 – 789 West Pender Street

Vancouver, BC  V6C 1H2

To the Board of Directors:

I, Bernard McDougall, tender my resignation as a Director and president of Micron Enviro Systems, Inc., effective immediately.   

Yours truly,

/s/ Bernard McDougall

Bernard McDougallemploymentagreement.htm

    EMPLOYMENT
      AGREEMENT

     

    This
      Employment Agreement (this “Agreement”), effective as of November 1, 2007 (the
“Effective Date”), is between Rosetta Resources Inc., a Delaware corporation
      (“Employer”), and Randy L. Limbacher (“Executive”).

     

    WHEREAS,
      Employer wishes to employ Executive as its President and Chief Executive Officer
      and Executive wishes to accept such employment; and

     

    WHEREAS,
      the parties wish to set forth the terms and conditions of such
      employment;

     

    NOW,
      THEREFORE, the parties hereto agree as follows:

     

    1.  Definitions.  As
      used in this Agreement, the following terms have the following
      meanings:

     

    (a)  “Affiliate”
      means, with respect to any entity, any other corporation, organization,
      association, partnership, sole proprietorship or other type of entity, whether
      incorporated or unincorporated, directly or indirectly controlling or controlled
      by or under direct or indirect common control with such entity.

     

    (b)  “Annual
      Period” means the time period of each year beginning on the first day of the
      Employment Term and ending on the day before the anniversary of that
      date.

     

    (c)  “Board”
      means the Board of Directors of Employer.

     

    (d)  “Cause”
      means a finding by the Board of acts or omissions constituting, in the Board’s
      reasonable judgment, any of the following occurring during the Employment
      Term:

     

    (i)
      a
      material breach of duty by Executive in the course of his employment with
      Employer or its Affiliates involving fraud, acts of dishonesty (other than
      inadvertent acts or omissions), disloyalty to Employer or its Affiliates or
      moral turpitude constituting criminal felony; (ii) conduct by Executive that
      is
      materially detrimental to Employer, monetarily or otherwise, or that reflects
      unfavorably on Employer or Executive to such an extent that Employer’s best
      interests reasonably require the termination of Executive’s employment; (iii)
      acts or omissions of Executive materially in violation of his obligations under
      this Agreement or at law; (iv) Executive’s material failure to comply with or
      enforce the personnel policies of Employer or its Affiliates,
specifically including those concerning equal employment
      opportunity
      and those related to harassing conduct; (v) Executive’s material insubordination
      to the Board; (vi) subject to the details of Paragraph 4(b), Executive’s failure
      to devote his full working time and best efforts to the performance of his
      responsibilities to Employer or its Affiliates; (vii) Executive’s conviction of,
      or entry of a plea agreement or consent decree or similar arrangement with
      respect to a felony or any material violation of federal or state securities
      laws, in either case, having a material adverse effect on Employer or its
      Affiliates; or (viii) Executive’s material failure to cooperate with any
      investigation or inquiry authorized by the Board or conducted by a governmental
      authority related to Employer’s or an Affiliate’s business or Executive’s
      conduct related to Employer or an Affiliate.

     

    (e)  “Competitor”
      means any person or entity that is engaged in the acquisition, exploration,
      development and production of oil and gas properties in competition with the
      activities of Employer or an Affiliate.

     

    (f)  “Confidential
      Information” means, without limitation, all documents or information, in
      whatever form or medium, concerning or evidencing sales; costs; pricing;
      strategies; forecasts and long range plans; financial and tax information;
      personnel information; business, marketing and operational projections, plans
      and opportunities; customer, vendor, and supplier information; geological and
      geophysical maps, data, interpretations, and analyses; project and prospect
      locations and leads; well logs, interpretations, and analyses; and production
      information; but excluding any such information that is or becomes generally
      available to the public other than as a result of any breach of this Agreement
      or other unauthorized disclosure by Executive.

     

    (g)  “Corporate
      Change” means (i) the dissolution or liquidation of Employer; (ii) a
      reorganization, merger or consolidation of Employer with one or more
      corporations (other than a merger or consolidation effecting a reincorporation
      of Employer in another state or any other merger or consolidation in which
      the
      shareholders of the surviving corporation and their proportionate interests
      therein immediately after the merger or consolidation are substantially
      identical to the shareholders of Employer and their proportionate interests
      therein immediately prior to the merger or consolidation) (collectively, a
      “Corporate Change Merger”); (iii) the sale of all or substantially all of the
      assets of Employer or an Affiliate as defined in the Rosetta Resources, Inc.
      2005 Long-Term Incentive Plan; or (iv) the occurrence of a Change in Control.
      A
“Change in Control” shall be deemed to have occurred if (x) individuals who were
      directors of Employer immediately prior to a Control Transaction shall cease,
      within two years of such Control Transaction to constitute a majority of the
      Board of Directors of Employer (or of the Board of Directors of any successor
      to
      Employer or to a company which has acquired all or substantially all its assets)
      other than by reason of an increase in the size of the membership of the
      applicable Board that is approved by at least a majority of the individuals
      who
      were directors of Employer immediately prior to such Control Transaction or
      (y)
      any entity, person or Group acquires shares of Employer in a transaction or
      series of transactions that result in such entity, person or Group directly
      or
      indirectly owning beneficially 50% or more of the outstanding shares of Common
      Stock. As used herein, “Control Transaction” means (A) any tender offer for or
      acquisition of capital stock of Employer pursuant to which any person, entity,
      or Group directly or indirectly acquires beneficial ownership of 20% or more
      of
      the outstanding shares of Common Stock; (B) any Corporate Change Merger of
      Employer; (C) any contested election of directors of Employer; or (D) any
      combination of the foregoing, any one of which results in a change in voting
      power sufficient to elect a majority of the Board of Directors of Employer.
      As
      used herein, “Group” means persons who act “in concert” as described in Sections
      13(d)(3) and/or 14(d)(2) of the Securities Exchange Act of 1934, as
      amended.  Notwithstanding the foregoing, “Corporate Change” shall not
      include the Acquisition, the Offering or any public offering of equity of
      Employer pursuant to a registration that is effective under the Securities
      Act
      of 1933, as amended. As used herein, “Acquisition” and “Offering” shall have the
      same meaning given to those terms in the Rosetta Resources Inc. 2005 Long-Term
      Incentive Plan.

     

    (h)  “Employment
      Termination Date” means the effective date of termination of Executive’s
      employment as established under Paragraph 6(g).

     

    (i)  “Good
      Reason” means any of the following actions if taken without Executive’s prior
      written consent: (i) any material diminution in Executive’s authority,
      responsibilities or duties; (ii) any material diminution in Executive’s base
      compensation; (iii) any permanent relocation of Executive’s regular place of
      business to a location 50 miles or more from the location of Employer’s
      executive offices on the Effective Date; or (iv) any other action or inaction
      by
      Employer that constitutes a material breach by Employer of its obligations
      under
      this Agreement. Neither a transfer of employment among Employer and any of
      its
      Affiliates nor a change in the co-employment relationship, standing alone,
      constitutes “Good Reason.”

     

    (j)  “Inability
      to Perform” means and shall be deemed to have occurred if Executive has been
      determined under Employer’s long-term disability plan to be eligible for
      long-term disability benefits. In the absence of Executive’s participation in,
      application for benefits under, or existence of such a plan, “Inability to
      Perform” means Executive’s inability to perform the essential functions of his
      position because of an illness or injury for (i) a period
      of six
      consecutive months or (ii) an aggregate of six months within any period of
      12
      consecutive months.

     

    (k)  “Work
      Product” means all ideas, works of authorship, inventions, and other creations,
      whether or not patentable, copyrightable, or subject to other
      intellectual-property protection, that are made, conceived, developed or worked
      on in whole or in part by Executive while employed by Employer and/or any of
      its
      Affiliates, that relate in any manner whatsoever to the business, existing
      or
      then-proposed, of Employer and/or any of its Affiliates, or any other business
      or research or development effort in which Employer and/or any of its Affiliates
      engages during Executive’s employment.

     

    2.  Employment.  Employer
      agrees to employ Executive (directly or through an Affiliate), and Executive
      agrees to be employed, for the period set forth in Paragraph 3. Executive will
      be employed in the position and with the duties and responsibilities set forth
      in Paragraph 4(a) and upon the other terms and conditions set out in this
      Agreement. Employer and Executive agree that such employment may be through
      a
      co-employment relationship with a professional employer organization, subject
      to
      the requirements of Paragraph 4(a).

     

    3.  Term.  Executive’s
      employment shall commence on the Effective Date and shall be for an initial
      term
      of one Annual Period (the “Employment Term”), unless sooner terminated as
      provided in this Agreement. Subject to earlier termination as provided in this
      Agreement, the Employment Term shall be automatically extended for an additional
      Annual Period (not to exceed nine additional Annual Periods) unless either
      Executive or Employer gives written notice to the other six months or more
      prior
      to the end of the initial term or, if the Agreement has been automatically
      extended beyond the initial term, six months or more prior to the end of the
      additional Annual Period. In the event of such an automatic extension, each
      additional Annual Period shall be part of the “Employment Term.”  Upon
      such timely written notice or at the end of the nine additional periods
      contemplated above, Executive’s employment will end upon the expiration of the
      Employment Term.

     

    4.  Position
      and Duties.

     

    (a)  During
      the Employment Term, Executive shall be employed as President and Chief
      Executive Officer of Employer, under the direction and subject to the control
      of
      the Board (which direction shall be such as is customarily exercised over a
      chief executive officer), and Executive shall be responsible for the business,
      affairs, properties and operations of Employer and shall have general executive
      charge, management and control of Employer, with all such powers and authority
      with respect to such business, affairs, properties and operations as may be
      reasonably incident to such duties and responsibilities.  In addition,
      Executive shall have such other duties, functions, responsibilities, and
      authority as are from time to time delegated to Executive by the Board;
      provided, however, that such duties, functions, responsibilities, and authority
      are reasonable and customary for a person serving in the same or similar
      capacity of an enterprise comparable to Employer.

     

    (b)  During
      the Employment Term, Executive shall devote his full business time, skill,
      and
      attention and his best efforts to the business and affairs of Employer to the
      extent necessary to discharge fully, faithfully, and efficiently the duties
      and
      responsibilities delegated and assigned to Executive in or pursuant to this
      Agreement, except for usual, ordinary, and customary periods of vacation and
      absence due to illness or other disability and as otherwise specified in this
      paragraph.  Employer agrees that it shall not be a violation of this
      paragraph for Executive to (i) serve on corporate, civic or charitable boards
      or
      committees, (ii) deliver lectures, fulfill speaking engagements or teach at
      educational institutions, and (iii) manage personal investments, so long as
      in
      the case of (i), (ii) and (iii) above such activities do not significantly
      interfere or conflict with the performance of Executive’s responsibilities under
      this Agreement or the interests of Employer.  Specifically, Employer
      acknowledges that Executive currently serves on the Board of Directors of CARBO
      Ceramics, Inc. and currently serves as the Chairman of Junior Achievement for
      Southeast Texas and represents that such service shall not be considered a
      violation of this paragraph unless such activities significantly interfere
      with
      Executive’s performance of his responsibilities under this
      Agreement.  Executive shall not become a member of the board of
      directors or committees of any other business organization without
      the prior written consent
      of the Board.

     

    (c)  In
      connection with Executive’s employment under this Agreement, Executive shall be
      based in Houston, Texas, or at any other place where the principal executive
      offices of Employer may be located during the Employment Term, subject to the
      provisions of Paragraph 1(i)(iii). Executive also will engage in such travel
      as
      the performance of Executive’s duties in the business of Employer may
      require.

     

    (d)  All
      services that Executive may render to Employer or any of its Affiliates in
      any
      capacity during the Employment Term shall be deemed to be services required
      by
      this Agreement and the consideration for such services is that provided for
      in
      this Agreement.

     

    (e)  Executive
      hereby acknowledges that he has read and is familiar with Employer’s policies
      regarding business ethics and conduct, and will comply with all such provisions,
      and any amendments thereto, during the Employment Term.

     

    5.  Compensation
      and Related Matters.

     

    (a)  Base
      Salary and Sign-On Bonus.

     

    (i)  Base
      Salary. During each Annual Period of the Employment Term, Employer shall pay
      to Executive for his services under this Agreement an annual base salary (“Base
      Salary”). The Base Salary on the Effective Date shall be $625,000. The Base
      Salary is subject to annual adjustments beginning in January 2009, at the
      discretion of the Board, but in no event shall Employer pay Executive a Base
      Salary less than that set forth above, or any increased Base Salary later in
      effect, without the consent of Executive. The Base Salary shall be payable
      in
      installments in accordance with the general payroll practices of Employer,
      or as
      otherwise mutually agreed upon.

     

    (ii)  Sign-On
      Bonus. No later than ten (10) business days following the Effective Date,
      Employer will pay to Executive a sign-on bonus in the amount of $1,000,000.
      If
      Executive’s employment is terminated before the end of the initial term by the
      Employee pursuant to Paragraph 6(e) or by Employer pursuant to Paragraph 6(c),
      Executive agrees to repay to Employer the amount of the sign-on bonus received
      from Employer less amounts deducted or withheld pursuant to applicable law
      within 30 days of such termination.

     

    (b)  Annual
      Incentives.  Beginning in calendar year 2008 and during the
      Employment Term, Executive will participate in any incentive compensation plan
      (ICP) applicable to Executive’s position, as may be adopted by Employer from
      time to time and in accordance with the terms of such
      plan(s).  Executive’s target award opportunity under the ICP will be
      100% of Executive’s Base Salary, and shall be subject to such other terms,
      conditions and restrictions as may be established by the Board or the ICP
      committee.

     

    (c)  Long-Term
      Incentives.  During the Employment Term, Executive will
      participate in Employer’s 2005 Long-Term Incentive Plan (“LTI Plan”) applicable
      to Executive’s position, or any successor plan as may be adopted by Employer
      from time to time, in accordance with the terms of such plan(s). Except as
      provided in Paragraph 5(d), Executive will participate in such long term
      incentive opportunities (“LTI opportunities”) as may be determined by the Board
      or the LTI Plan committee, as applicable; provided that, in no event shall
      the
      LTI opportunities provided to Executive ever be less than the LTI opportunities
      then provided to other senior executives of Employer without the consent of
      Executive

     

    (d)  Equity
      Grants Related to Initial Employment.  Executive shall be granted
      the following awards pursuant to the terms of the LTI Plan:

     

    (i)  On
      the
      Effective Date, a nonqualified stock option to purchase 102,100 shares of
      Employer’s common stock at an exercise price equal to the Fair Market Value (as
      defined in the LTI Plan) of Employer’s common stock on the Effective Date, which
      option will have a ten year term and be 100% vested on the date of
      grant.

     

    (ii)  On
      the
      Effective Date, 102,100 shares of restricted common stock in Employer, which
      will vest as follows: (A) 25% of such shares (if a fractional number, then
      the
      next lower whole number) will vest on the first anniversary of the Effective
      Date, provided Executive is in the continuous service of Employer or an
      Affiliate until and on such vesting date; (B) an additional 25% of such shares
      (if a fractional number, then the next lower whole number) will vest on the
      second anniversary of the Effective Date, provided Executive is in the
      continuous service of Employer or an Affiliate until and on such vesting date;
      and (C) the remaining shares will vest on the third anniversary of the Effective
      Date, provided Executive is in the continuous service of Employer or an
      Affiliate until and on such vesting date.

     

    (iii)  On
      January 1, 2008 (if Executive is employed by Employer on such date), $3,500,000
      in value of sign-on restricted common stock in Employer, which will vest in
      full
      on the fifth anniversary of the Effective Date, provided that Executive is
      in
      the continuous service of Employer or an Affiliate until and on such vesting
      date. The number of shares of restricted common stock to be granted to Executive
      in respect of the $3,500,000 in value shall be determined by dividing $3,500,000
      by the Fair Market Value (as defined in the LTI Plan) of Employer’s common stock
      on the Effective Date; provided, however, that no more than 200,000 shares
      of
      restricted common stock shall be granted to Executive pursuant to this Paragraph
      5(d)(iii).

     

    Notwithstanding
      the foregoing, the percentage indicated below of the total number of shares
      of
      restricted common stock granted Executive under this Paragraph 5(d)(iii) will
      vest on the date on which the Fair Market Value per share of Employer’s common
      stock has reached a level indicated below (each a “Target Level”) and remained
      at or above such Target Level for 30 consecutive trading days, provided that
      Executive is in the continuous service of Employer or an Affiliate until and
      on
      the applicable vesting date:

     

    $22
      per
      share 15%

    $25
      per
      share 20%

    $30
      per
      share 30%

    $35
      per
      share 20%

    $40
      per
      share 15%

     

    To
      the
      extent that a specified percentage of shares vests based on a particular Target
      Level, and the shares associated with any lower Target Level have not previously
      vested, the shares associated with that lower Target Level shall vest on the
      same date.

     

    The
      equity award grants provided for in this Paragraph 5(d) shall be subject to
      the
      terms and conditions of the LTI Plan and the award agreements covering such
      awards, which shall be substantially in the forms collectively attached hereto
      as Exhibit A, but only to the extent that such forms are not inconsistent with
      the terms and conditions of this Agreement.  In the event of an
      inconsistency between this Agreement and any such award, the terms of this
      Agreement shall govern (including, for example, the definitions of “Cause” and
“Good Reason”).

     

    (e)  Employee
      Benefits.  During the Employment Term, Executive shall be entitled
      to participate in all employee benefit plans, programs, and arrangements that
      are generally made available by Employer to its similarly situated employees,
      including without limitation Employer’s life insurance, long-term disability,
      and health plans. Executive acknowledges and agrees that cooperation and
      participation in medical or physical examinations may be required by one or
      more
      insurance companies in connection with the applications for such life and/or
      disability insurance policies.

     

    (f)  Expenses.  Executive
      shall be entitled to receive reimbursement for all reasonable expenses incurred
      by Executive during the Employment Term in performing his duties and
      responsibilities under this Agreement, consistent with Employer’s policies or
      practices for reimbursement of expenses incurred by other senior executives
      of
      Employer (“Business Expenses”). Notwithstanding the foregoing, (i) the amount of
      expenses eligible for reimbursement during a calendar year may not affect the
      expenses eligible for reimbursement in any other calendar year, (ii) the
      reimbursement must be made on or before the last day of the calendar year
      following the calendar year in which the expense was incurred and (iii) the
      right to reimbursement shall not be subject to liquidation or exchange for
      any
      other benefit.

     

    (g)  Vacations.  During
      each Annual Period of the Employment Term, Executive shall be eligible for
      four
      weeks’ paid vacation, as well as sick pay and other paid and unpaid time off in
      accordance with the policies and practices of Employer. Executive agrees to
      use
      his vacation and other paid time off at such times that are (i) consistent
      with
      the proper performance of his duties and responsibilities and (ii) mutually
      convenient for Employer and Executive.

     

    (h)  Fringe
      Benefits.  During the Employment Term, Executive shall be entitled
      to the perquisites and other fringe benefits that are made available by Employer
      to its senior executives generally and to such perquisites and fringe benefits
      that are made available by Employer to Executive in particular, subject to
      any
      applicable terms and conditions of any specific perquisite or other fringe
      benefit.

     

    6.  Termination
      of Employment.

     

    (a)  Death.  Executive’s
      employment shall terminate automatically upon his death.

     

    (b)  Inability
      to Perform.  Employer may terminate Executive’s employment for
      Inability to Perform.

     

    (c)  Termination
      by Employer for Cause.  Employer may terminate Executive’s
      employment for Cause by providing Executive with a Notice of Termination as
      set
      out in Paragraph 6(f). Before terminating Executive’s employment for Cause,
      Employer must provide Executive with written notice of its intent to do so,
      which notice must specify the particular circumstances or events that Employer
      contends gives rise to the existence of Cause; provided, however, that if
      Employer intends to exercise its right to terminate Executive’s employment in
      whole or part under provisions (iii), (iv), (v), (vi) or (viii) of the
      definition of Cause, Employer must first provide Executive with a reasonable
      period of time to correct those circumstances or events Employer contends give
      rise to the existence of Cause under such provision(s) (the “Correction
      Period”), but not to the extent the Board makes a
      reasonable, good faith determination that those circumstances or events cannot
      reasonably be corrected. A 30-day Correction Period shall be presumptively
      reasonable. Executive will be given the opportunity within 30 calendar days
      of
      his receipt of Employer’s written notice of its intent to terminate Executive’s
      employment for Cause to defend himself with respect to the circumstances or
      events specified in such notice and in a manner and under such procedures as
      the
      Board may establish. Nothing in this Paragraph 6(c) precludes informal
      discussions between Executive and any member of the Board regarding such
      circumstances or events.

     

    (d)  Termination
      by Executive for Good Reason.  Executive may terminate his
      employment for Good Reason. To exercise his right to terminate for Good Reason,
      Executive must provide written notice to Employer of his belief that Good Reason
      exists within 60 days of the date he first becomes aware of the condition(s)
      giving rise to the Good Reason, and that notice shall describe the condition(s)
      believed to constitute Good Reason. Employer shall have 30 days to remedy the
      Good Reason condition(s). If not remedied within that 30-day period, Executive
      may submit a Notice of Termination; provided, however, that the Notice of
      Termination invoking Executive’s right to terminate his employment for Good
      Reason must be given no later than 100 days after the date Executive first
      became aware of the condition(s) giving rise to the Good Reason; otherwise,
      Executive is deemed to have accepted the condition(s), or Employer’s correction
      of such condition(s), that may have given rise to the existence of Good
      Reason.

     

    (e)  Termination
      by Either Party Without Cause or Without Good Reason.  Either
      Employer or Executive may terminate Executive’s employment without Cause or
      without Good Reason upon at least 60 days’ prior written notice to the other
      party.

     

    (f)  Notice
      of Termination.  Any termination of Executive’s employment by
      Employer or by Executive (other than a termination pursuant to Paragraph 6(a))
      shall be communicated by a Notice of Termination. A “Notice of Termination” is a
      written notice that must (i) indicate the specific termination provision in
      this
      Agreement relied upon; (ii) in the case of a termination for Inability to
      Perform, Cause, or Good Reason, set forth in reasonable detail the facts and
      circumstances claimed to provide a basis for termination of Executive’s
      employment under the provision invoked; and (iii) if the termination is by
      Executive under Paragraph 6(e), or by Employer for any reason, specify the
      Employment Termination Date.  The failure by Employer or Executive to
      set forth in the Notice of Termination any fact or circumstance that contributes
      to a showing of Cause or Good Reason shall not waive any right of Employer
      or
      Executive or preclude either of them from asserting such fact or circumstance
      in
      enforcing or defending their rights.

     

    (g)  Employment
      Termination Date.  The Employment Termination Date, whether
      occurring before or after a Corporate Change, shall be as follows: (i) if
      Executive’s employment is terminated by his death, the date of his death; (ii)
      if Executive’s employment is terminated by Employer because of his Inability to
      Perform or for Cause, the date specified in the Notice of Termination, which
      date shall be no earlier than the date such notice is given; (iii) if
      Executive’s employment is terminated by Executive for Good Reason, the date on
      which the Notice of Termination is given; (iv) if the termination is under
      Paragraph 6(e), the date specified in the Notice of Termination, which date
      shall be no earlier than 60 days after the date such notice is given, or (v)
      if
      Executive’s employment is terminated by expiration of the Employment Term, or
      Executive or Employer gives timely notice pursuant to Paragraph 3, the date
      the
      Employment Term expires.

     

    (h)  Deemed
      Resignation.  In the event of termination of Executive’s
      employment, Executive agrees that if at such time he is a member of the Board
      or
      is an officer of Employer or a director or officer of any of its Affiliates,
      he
      shall be deemed to have resigned from such position(s) effective on the
      Employment Termination Date, unless the Board and Executive agree in writing
      prior to the Employment Termination Date that Executive shall remain a member
      of
      the Board, in which case Executive shall not be deemed to have resigned his
      position as a member of the Board merely by virtue of the termination of his
      employment. Executive agrees to execute and deliver any documents evidencing
      his
      resignation from such positions that Employer may reasonably request; provided,
      however, that no such document shall affect the date that Executive ceased
      to be
      a Board member as described above such that Executive continues to have duties
      as a Board member beyond the date specified in the preceding
      sentence.

     

    (i)  Investigation;
      Suspension.  Employer may suspend Executive with pay pending (a)
      an investigation as described in Paragraph 1(d)(viii), or (b) a determination
      by
      the Board whether Executive has engaged in acts or omissions constituting
      Cause.  Such a paid suspension shall not constitute a termination of
      Executive’s employment, or Good Reason.  Executive agrees to cooperate
      with Employer in connection with any such investigation.

     

    7.  Compensation
      Upon Termination of Employment.

     

    (a)  Death.  If
      Executive’s employment is terminated by reason of Executive’s death, Employer
      shall pay to such person as Executive shall designate in a written notice to
      Employer (or, if no such person is designated, to his estate) any unpaid portion
      of Executive’s Base Salary through the Employment Termination Date (the
“Compensation Payment”), any earned but unused vacation (the “Vacation
      Payment”), and any unreimbursed Business Expenses, at the time and in the manner
      required by applicable law but in no event later than 30 business days after
      the
      Employment Termination Date.

     

    (b)  Inability
      to Perform.  If Executive’s employment is terminated by reason of
      Executive’s Inability to Perform, Employer shall pay to Executive the
      Compensation Payment, the Vacation Payment, and any unreimbursed Business
      Expenses at the time and in the manner required by applicable law but in no
      event later than 30 business days after the Employment Termination
      Date.

     

    (c)  Termination
      by Executive Without Good Reason.  If Executive’s employment is
      terminated by Executive pursuant to and in compliance with Paragraph 6(e),
      Employer shall pay to Executive the Compensation Payment, the Vacation Payment,
      and any unreimbursed Business Expenses, at the time and in the manner required
      by applicable law but in no event later than 30 business days after the
      Employment Termination Date.

     

    (d)  Termination
      for Cause.  If Executive’s employment is terminated by Employer
      for Cause, Employer shall pay to Executive the Compensation Payment, the
      Vacation Payment, and any unreimbursed Business Expenses, at the time and in
      the
      manner required by applicable law but in no event later than 30 business days
      after the Employment Termination Date.

     

    (e)  Termination
      Without Cause or With Good Reason or Upon Expiration of Employment
      Term.

     

    (i)  If
      Executive’s employment is terminated by Employer for any reason other than
      death, Inability to Perform, or Cause, or is terminated by Executive for Good
      Reason during the Employment Term, or if Executive’s employment ends upon the
      expiration of the Employment Term, Employer shall pay to Executive the
      Compensation Payment, the Vacation Payment, and any unreimbursed Business
      Expenses, at the time and in the manner required by applicable law but in no
      event later than 30 business days after the Employment Termination
      Date.

     

    (ii)  In
      addition, if Executive’s employment is terminated by Employer for any reason
      other than death, Inability to Perform, or Cause, or is terminated by Executive
      for Good Reason during the Employment Term, or if Employer gives timely notice
      pursuant to Paragraph 3 and Executive’s employment therefore ends upon the
      expiration of the Employment Term, Employer shall pay or provide to Executive
      in
      lieu of any other severance or separation benefits, at the time and in the
      manner provided in Paragraph 7(e)(iii), the following if, within 45 days after
      the Employment Termination Date, Executive has signed a general release
      agreement substantially in the form attached hereto as Exhibit B and Executive
      does not revoke such release:

     

    (A)  Executive’s
      Base Salary as in effect on the Employment Termination Date (but in no event
      less than the Base Salary on the Effective Date), multiplied by
      three;

     

    (B)  Executive’s
      ICP award at the target level for the performance period in effect on the
      Employment Termination Date (but in no event less than the target level
      specified in Paragraph 5(b)), multiplied by three;

     

    (C)  Immediate
      grant, and full and immediate vesting, of the restricted stock grant described
      Paragraph 5(d)(iii) if not previously granted;

     

    (D)  Full
      and
      immediate vesting of all Employer stock options and restricted stock awards
      held
      by Executive as of the Employment Termination Date;

     

    (E)  Executive
      will have twelve months after the Employment Termination Date, to exercise
      all
      Employer stock options, provided that in no event may such stock options be
      exercised after the latest date upon which the options would have expired by
      their original terms.

     

    Notwithstanding
      the foregoing, Employer’s obligation under this Paragraph 7(e)(ii) is limited as
      follows:

     

    (X)           If
      Executive engages in any conduct that materially violates Paragraph 8 or engages
      in any of the Restricted Activities described in Paragraph 9, Employer’s
      obligation to make payments to Executive under this Paragraph 7(e)(ii), if
      any
      such obligation remains, shall end as of the date Employer so notifies Executive
      in writing; and

     

    (Y)           If
      Executive is found guilty or enters into a plea agreement, consent decree,
      or
      similar arrangement with respect to any felony criminal offense or any material
      violation of federal or state securities laws, or has a cease-and-desist order,
      injunction, or other penalty or judgment issued or entered in any material
      civil
      enforcement action brought against him by any United States regulatory agency
      or
      by a court of competent jurisdiction in a proceeding commenced by such a
      regulatory agency (in either case, regardless of whether Executive admits or
      denies the substantive allegations, and in each case for actions or omissions
      related to his employment with Employer or any of its Affiliates), (1)
      Employer’s obligation to make payments to Executive under this Paragraph
      7(e)(ii) shall end as of the date that Employer so notifies Executive in
      writing, and (2) Executive shall repay to Employer any amounts paid to him
      pursuant to this Paragraph 7(e)(ii) within 30 days after receipt of a written
      request to do so by Employer.

     

    (iii)  The
      amounts provided for under Paragraphs 7(e)(ii)(A) and 7(e)(ii)(B) shall be
      paid
      as follows:

     

    (A)  An
      amount
      equal to (1) 50% of the amount provided for under Paragraph 7(e)(ii)(A) plus
      (2)
      the sum (to the extent that such sum exceeds zero) of the amounts provided
      for
      under Paragraphs 7(e)(ii)(A) and 7(e)(ii)(B) less the payment under Paragraph
      7(e)(iii)(A)(1) less the Section 409A Exempt Amount, shall be paid in a single
      lump sum no later than 60 days after the Employment Termination Date, provided
      that the Employment Termination Date, constitutes a separation from service
      for
      purposes of Code Section 409A. For purposes of this Agreement, the “Section 409A
      Exempt Amount” is two times the lesser of (x) Executive’s annualized
      compensation based upon the annual rate of pay for services provided to Employer
      for the calendar year preceding the calendar year in which Executive has a
      separation from service (as defined in the Code and the final regulations and
      other guidance thereunder (“Code Section 409A”)) with Employer (adjusted for any
      increase during that year that was expected to continue indefinitely if the
      service provider had not separated from service) or (y) the maximum amount
      that
      may be taken into account under a qualified plan pursuant to Section 401(a)(17)
      of the Code for the year in which Executive has a separation from
      service.

     

    (B)  The
      Section 409A Exempt Amount or, if less, the excess of the amount provided for
      under Paragraphs 7(e)(ii)(A) and 7(e)(ii)(B) over the amount paid under
      Paragraph 7(e)(iii)(A), shall be paid in equal monthly installments over a
      period of 18 months commencing on the first day of the sixth month following
      the
      Employment Termination Date, provided that the Employment Termination Date
      constitutes a separation from service for purposes of Code Section
      409A.

     

    (f)  Termination
      of Employment Following Corporate Change.

     

    (i)  If,
      within the two-year period following a Corporate Change, Executive’s employment
      with Employer or an Affiliate or successor of Employer is terminated for any
      reason other than death, Inability to Perform, or Cause, is terminated by
      Executive for Good Reason, or if Employer or an Affiliate or successor of
      Employer gives timely notice pursuant to Paragraph 3 and Executive’s employment
      therefore ends upon the expiration of the Employment Term, Executive will be
      paid the Compensation Payment, the Vacation Payment and any unreimbursed
      Business Expenses, at the time and in the manner required by applicable law
      but
      in no event later than 30 business days after the Employment Termination
      Date.  In addition, if, within 45 days after the Employment
      Termination Date, Executive has signed a general release agreement substantially
      in the form attached hereto as Exhibit B and Executive does not revoke such
      release, in lieu of any other payments under Paragraph 7(e)(ii), Employer shall
      (A) pay Executive a lump-sum amount equivalent to the sum of the amounts
      specified in Paragraph 7(e)(ii)(A) and 7(e)(ii)(B), and (B) provide Executive
      the benefits described in Paragraph 7(e)(ii)(C), 7(e)(ii)(D) and
      7(e)(ii)(E).  The provisions of Paragraph 7(e)(ii)(X) and 7(e)(ii)(Y)
      shall not apply to this Paragraph 7(f).

     

    (ii)  The
      payment provided for in Paragraph 7(f)(i)(A) shall be paid in a single lump
      sum
      payment on the 60th business day after the Employment Termination
      Date.

     

    (iii)  In
      the
      event that it is determined that any payment (other than the Gross-Up payment
      provided for in this Paragraph 7(f)(iii)) or distribution by Employer or any
      of
      its Affiliates to or for the benefit of Executive, whether paid or payable
      or
      distributed or distributable pursuant to the terms of this Agreement or
      otherwise pursuant to or by reason of any other agreement, policy, plan, program
      or arrangement, including without limitation any stock option or similar right,
      or the lapse or termination of any restriction on or the vesting or
      exercisability of any of the foregoing (a “Payment”), would be subject to the
      excise tax imposed by Section 4999 of the Code (or any successor provision
      thereto) by reason of being considered “contingent on a change in ownership or
      control” of Employer, within the meaning of Section 280G of the Code or any
      successor provision thereto (such tax being hereafter referred to as the “Excise
      Tax”), then Executive will be entitled to receive an additional payment or
      payments (a “Gross-Up Payment”). The Gross-Up Payment will be in an amount such
      that, after payment by Executive of all taxes, including any Excise Tax imposed
      upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
      equal to the Excise Tax imposed upon the Payment. For purposes of determining
      the amount of the Gross-Up Payment, Executive will be considered to pay (x)
      federal income taxes at the highest rate in effect in the year in which the
      Gross-Up Payment will be made and (y) state and local income taxes at the
      highest rate in effect in the state or locality in which the Gross-Up Payment
      would be subject to state or local tax, net of the maximum reduction in federal
      income tax that could be obtained from deduction of such state and local taxes.
      The determination of whether an Excise Tax would be imposed, the amount of
      such
      Excise Tax, and the calculation of the amounts referred to in this Paragraph
      7(f)(iii) will be made at the expense of Employer by Employer’s regular
      independent accounting firm (the “Accounting Firm”), which shall provide
      detailed supporting calculations. Any determination by the Accounting Firm
      will
      be binding upon Employer and Executive. The Gross-Up Payment will be paid to
      Executive as soon as administratively practicable following, but no later than
      the end of the calendar year in which falls the date on which Executive remits
      the related taxes.

     

    (g)  Health
      Insurance.  In addition, if Executive’s employment with Employer
      or an Affiliate or successor of Employer is terminated or ends under the
      circumstances set forth in Paragraph 7(f), Executive will receive, in addition
      to any other payments due under this Agreement, the following benefit: if,
      at
      the time of the Employment Termination Date, Executive participates in one
      or
      more health plans offered or made available by Employer and Executive is
      eligible for and elects to receive continued coverage under such plans in
      accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985
      (“COBRA”) or any successor law, Employer will reimburse Executive during the
      18-month period following the Employment Termination Date, for the difference
      between the total amount of the monthly COBRA premiums for the same coverage
      as
      in effect on the Employment Termination Date, that are actually paid by
      Executive for such continued health plan benefits and the total monthly amount
      of the same premiums charged to active senior executives of Employer for health
      insurance coverage. Such reimbursement shall be made within the 90-day period
      following Executive’s payment of each monthly COBRA premium. Provided, however,
      that Employer’s reimbursement obligation under this Paragraph 7(g) shall
      terminate upon the earlier of (i) the expiration of the time period described
      above or (ii) the date Executive becomes eligible for health insurance coverage
      under a subsequent employer’s plan without being subject to any
      preexisting-condition exclusion under that plan, which occurrence Executive
      shall promptly report to Employer.

     

    (h)  Exclusive
      Compensation and Benefits.  The compensation and benefits
      described in this Paragraph 7, along with the associated terms for payment,
      constitute all of Employer’s obligations to Executive with respect to the ending
      of Executive’s employment with Employer and/or its Affiliates, subject to
      Paragraph 24 and the remainder of this Paragraph 7(h).  Accordingly,
      Executive and Employer expressly acknowledge and agree that, following the
      Employment Termination Date, Executive shall have no rights to any employment
      by
      Employer or its Affiliates (including employment as described in Paragraphs
      2, 3
      and 4 of this Agreement), and no rights to any further compensation or benefits
      under Paragraph 5 of this Agreement.  Executive and Employer further
      acknowledge and agree that nothing in this Agreement is intended to limit or
      terminate (i) any obligations of Employer or Executive under the other terms
      of
      this Agreement, including, but not limited to, with respect to Employer, its
      obligations under Paragraphs 12 and 20, and, with respect to Executive, his
      obligations under Paragraphs 6(h), 8, 9, 10, 13, 22, and 23, or (ii) any earned,
      vested benefits (other than any entitlement to severance or separation pay,
      if
      any) that Executive may have under the applicable provisions of any benefit
      plan
      of Employer in which Executive is participating at the time of the termination
      of employment.

     

    (i)           Code
      Section 409A Matters.  This Agreement is intended to comply with
      Code Section 409A and any ambiguous provisions will be construed in a manner
      that is compliant with or exempt from the application of Code Section
      409A.  If a provision of the Agreement would result in the imposition
      of an applicable tax under Code Section 409A, the parties agree that such
      provision shall be reformed to avoid imposition of the applicable tax, with
      such
      reformation effected in a manner that has the most favorable result to
      Executive.

     

    For
      purposes of Code Section 409A, each payment or amount due under this Agreement
      shall be considered a separate payment, and Executive’s entitlement to a series
      of payments under this Agreement is to be treated as an entitlement to a series
      of separate payments.

     

    If
      (x)
      Executive is a “specified employee,” as such term is defined in Code Section
      409A and determined as described below in this Paragraph 7(i), and (y) any
      payment due under this Agreement is subject to Code Section 409A and is required
      to be delayed under Code Section 409A because Executive is a specified employee,
      that payment shall be payable on the earlier of (A) the first business day
      that
      is six months after Executive’s separation from service, as such term is defined
      in Code Section 409A, (B) the date of Executive’s death, or (C) the date that
      otherwise complies with the requirements of Section 409A.  This
      Paragraph 7(i) shall be applied by accumulating all payments that otherwise
      would have been paid within six months of Executive’s separation and paying such
      accumulated amounts on the earliest business day which complies with the
      requirements of Code Section 409A.  For purposes of determining the
      identity of specified employees, the Board may establish procedures as it deems
      appropriate in accordance with Code Section 409A.

     

    (j)           Payment
      after Executive’s Death.  In the event of Executive’s death after
      he becomes entitled to a payment or payments pursuant to this Paragraph 7,
      any
      remaining unpaid amounts shall be paid, at the time and in the manner such
      payments otherwise would have been paid to Executive, to such person as
      Executive shall designate in a written notice to Employer (or, if no such person
      is designated, to his estate).

     

    (k)           Offset.  Executive
      agrees that Employer may set off against, and Executive authorizes Employer
      to
      deduct from, any payments due to Executive, or to his heirs, legal
      representatives, or successors, as a result of the termination of Executive’s
      employment any amounts which may be due and owing to Employer or any of its
      Affiliates by Executive, whether arising under this Agreement or otherwise;
      provided, however, that any such set off and deduction shall be made in a manner
      that complies with Code Section 409A to the extent applicable.

     

    8.  Confidential
      Information.

     

    (a)  Executive
      acknowledges and agrees that (i) Employer and its Affiliates are engaged in
      a
      highly competitive business; (ii) Employer and its Affiliates have expended
      considerable time and resources to develop goodwill with their customers,
      vendors, and others, and to create, protect, and exploit Confidential
      Information; (iii) Employer must continue to prevent the dilution of its and
      its
      Affiliates’ goodwill and unauthorized use or disclosure of its Confidential
      Information to avoid irreparable harm to its legitimate business interests;
      (iv)
      in the oil and gas acquisition, exploration, development and production
      business, his participation in or direction of Employer’s or its Affiliates’
day-to-day operations and strategic planning are an integral part of Employer’s
      continued success and goodwill; (v) given his position and responsibilities,
      he
      necessarily will be creating Confidential Information that belongs to Employer
      and enhances Employer’s goodwill, and in carrying out his responsibilities he in
      turn will be relying on Employer’s goodwill and the disclosure by Employer to
      him of Confidential Information; and (vi) he will have access to Confidential
      Information that could be used by any Competitor of Employer in a manner that
      would irreparably harm Employer’s competitive position in the marketplace and
      dilute its goodwill.  Employer acknowledges and agrees that nothing in
      this Agreement precludes Executive from accepting employment from any third
      party employer after termination of employment with Employer and its Affiliates
      for whatever reason, provided that Executive complies with his obligations
      under
      Paragraph 8(d) and at law with respect to the Confidential
      Information.

     

    (b)  Employer
      acknowledges and agrees that Executive must have and continue to have throughout
      his employment the benefits and use of its and its Affiliates’ goodwill and
      Confidential Information in order to properly carry out his responsibilities.
      Employer accordingly promises upon execution and delivery of this Agreement
      to
      provide Executive immediate and continuing access to Confidential Information
      and to authorize him to engage in activities that will create new and additional
      Confidential Information.

     

    (c)  Employer
      and Executive thus acknowledge and agree that during Executive’s employment with
      Employer, and upon execution and delivery of this Agreement, he (i) will receive
      Confidential Information that is unique, proprietary, and valuable to Employer
      and/or its Affiliates; (ii) will create Confidential Information that is unique,
      proprietary, and valuable to Employer and/or its Affiliates; and (iii) will
      benefit, including without limitation by way of increased earnings and earning
      capacity, from the goodwill Employer and its Affiliates have generated and
      from
      the Confidential Information.

     

    (d)  Accordingly,
      Executive acknowledges and agrees that at all times during his employment by
      Employer and/or any of its Affiliates and thereafter:

     

    (i)  all
      Confidential Information shall remain and be the sole and exclusive property
      of
      Employer and/or its Affiliates;

     

    (ii)  he
      will
      protect and safeguard all Confidential Information;

     

    (iii)  he
      will
      hold all Confidential Information in strictest confidence and not, directly
      or
      indirectly, disclose or divulge any Confidential Information to any person
      other
      than an officer, director, or employee of, or legal counsel for, Employer or
      its
      Affiliates, to the extent necessary for the proper performance of his
      responsibilities unless authorized to do so by Employer or compelled to do
      so by
      law or valid legal process;

     

    (iv)  if
      he
      believes he is compelled by law or valid legal process to disclose or divulge
      any Confidential Information, he will notify Employer in writing sufficiently
      in
      advance of any such disclosure to allow Employer the opportunity to defend,
      limit, or otherwise protect its interests against such disclosure;

     

    (v)  at
      the
      end of his employment with Employer for any reason or at the request of Employer
      at any time, he will return to Employer all Confidential Information and all
      copies thereof, in whatever tangible form or medium, including electronic;
      and

     

    (vi)  absent
      the promises and representations of Executive in this Paragraph 8 and in
      Paragraph 9, Employer would require him immediately to return any tangible
      Confidential Information in his possession, would not provide Executive with
      new
      and additional Confidential Information, would not authorize Executive to engage
      in activities that will create new and additional Confidential Information,
      and
      would not enter or have entered into this Agreement.

     

    9.  Nonsolicitation
      Obligations.  In consideration of Employer’s promises to provide
      Executive with Confidential Information and to authorize him to engage in
      activities that will create new and additional Confidential Information upon
      execution and delivery of this Agreement, and the other promises and
      undertakings of Employer in this Agreement, Executive agrees that, while he
      is
      employed by Employer and/or any of its Affiliates and for a 2-year period
      following the end of that employment for any reason, he shall not engage in
      any
      of the following activities (the “Restricted Activities”):

     

    (a)  He
      will
      not, whether on his own behalf or on behalf of any other individual,
      partnership, firm, corporation or business organization, either directly or
      indirectly solicit, induce, persuade, or entice, or endeavor to solicit, induce,
      persuade, or entice, any person who is then employed by or otherwise engaged
      to
      perform services for Employer or its Affiliates to leave that employment or
      cease performing those services; and

     

    (b)  He
      will
      not, whether on his own behalf or on behalf of any other individual,
      partnership, firm, corporation or business organization, either directly or
      indirectly solicit, induce, persuade, or entice, or endeavor to solicit, induce,
      persuade, or entice, any person who is then a customer, supplier, or vendor
      of
      Employer or any of its Affiliates to cease being a customer, supplier, or vendor
      of Employer or any of its Affiliates or to divert all or any part of such
      person’s or entity’s business from Employer or any of its
      Affiliates.

     

    Executive
      acknowledges and agrees that the restrictions contained in this Paragraph 9
      are
      ancillary to an otherwise enforceable agreement, including without limitation
      the mutual promises and undertakings set forth in Paragraph 8; that Employer’s
      promises and undertakings set forth in Paragraph 8 and Executive’s position and
      responsibilities with Employer give rise to Employer’s interest in restricting
      Executive’s post-employment activities; that such restrictions are designed to
      enforce Executive’s promises and undertakings set forth in this Paragraph 9 and
      his common-law obligations and duties owed to Employer and its Affiliates;
      that
      the restrictions are reasonable and necessary, are valid and enforceable under
      Texas law, and do not impose a greater restraint than necessary to protect
      Employer’s goodwill, Confidential Information, and other legitimate business
      interests; that he will immediately notify Employer in writing should he believe
      or be advised that the restrictions are not, or likely are not, valid or
      enforceable under Texas law or the law of any other state that he contends
      or is
      advised is applicable; that the mutual promises and undertakings of Employer
      and
      Executive under Paragraphs 8 and 9 are not contingent on the duration of
      Executive’s employment with Employer; that absent the promises and
      representations made by Executive in this Paragraph 9 and Paragraph 8, Employer
      would require him to return any Confidential Information in his possession,
      would not provide Executive with new and additional Confidential Information,
      would not authorize Executive to engage in activities that will create new
      and
      additional Confidential Information, and would not enter or have entered into
      this Agreement; and that his obligations under Paragraphs 8 and 9 supplement,
      rather than supplant, his common-law duties of confidentiality and loyalty
      owed
      to Employer.

     

    Employer
      agrees that any action that is undertaken by a subsequent employer of Executive
      will not be treated as an action by Executive for purposes of the foregoing
      provisions of this Paragraph 9 unless Executive personally engages in a
      Restricted Activity, whether directly or indirectly.

     

    10.  Intellectual
      Property.

     

    (a)  In
      consideration of Employer’s promises and undertakings in this Agreement,
      Executive agrees that all Work Product will be disclosed promptly by Executive
      to Employer, shall be the sole and exclusive property of Employer, and is hereby
      assigned to Employer, regardless of whether (i) such Work Product was conceived,
      made, developed or worked on during regular hours of his employment or his
      time
      away from his employment, (ii) the Work Product was made at the suggestion
      of
      Employer; or (iii) the Work Product was reduced to drawing, written description,
      documentation, models or other tangible form. Without limiting the foregoing,
      Executive acknowledges that all original works of authorship that are made
      by
      Executive, solely or jointly with others, within the scope of his employment
      and
      that are protectable by copyright are “works made for hire,” as that term is
      defined in the United States Copyright Act (17 U.S.C., Section 101), and are
      therefore owned by Employer from the time of creation.

     

    (b)  Executive
      agrees to assign, transfer, and set over, and Executive does hereby assign,
      transfer, and set over to Employer, all of his right, title and interest in
      and
      to all Work Product, without the necessity of any further compensation, and
      agrees that Employer is entitled to obtain and hold in its own name all patents,
      copyrights, and other rights in respect of all Work Product. Executive agrees
      to
      (i) cooperate with Employer during and after his employment with Employer in
      obtaining patents or copyrights or other intellectual-property protection for
      all Work Product; (ii) execute, acknowledge, seal, and deliver all documents
      tendered by Employer to evidence its ownership thereof throughout the world;
      and
      (iii) cooperate with Employer in obtaining, defending, and enforcing its rights
      therein.

     

    (c)  Executive
      represents that there are no other contracts to assign inventions or other
      intellectual property that are now in existence between Executive and any other
      person or entity. Executive further represents that he has no other employment
      or undertakings that might restrict or impair his performance of this Agreement.
      Executive will not in connection with his employment by Employer, use or
      disclose to Employer any confidential, trade secret, or other proprietary
      information of any previous employer or other person that Executive is not
      lawfully entitled to disclose.

     

    11.  Reformation.  If
      the provisions of Paragraphs 8, 9, or 10 are ever deemed by a court to exceed
      the limitations permitted by applicable law, Executive and Employer agree that
      such provisions shall be, and are, automatically reformed to the maximum
      limitations permitted by such law.

     

    12.  Indemnification
      and Insurance.  Employer shall indemnify Executive both (i) to the
      fullest extent permitted by the laws of the State of Delaware, and (ii) in
      accordance with the more favorable of Employer’s certificate of incorporation,
      bylaws and standard indemnification agreement as in effect on the Effective
      Date
      or as in effect on the date as of which the indemnification is
      owed.  In addition, Employer shall provide Executive with coverage
      under directors’ and officers’ liability insurance policies on terms not less
      favorable than those provided to any of its other directors and officers as
      in
      effect from time to time.

     

    13.  Assistance
      in Litigation.  During the Employment Term and thereafter for the
      lifetime of Executive, Executive shall, upon reasonable notice, furnish such
      information and proper assistance to Employer or any of its Affiliates as may
      reasonably be required by Employer in connection with any litigation,
      investigations, arbitrations, and/or any other fact-finding or adjudicative
      proceedings involving Employer or any of its Affiliates. This obligation shall
      include, without limitation, to promptly upon request meet with counsel for
      Employer or any of its Affiliates and provide truthful testimony at the request
      of Employer or as otherwise required by law or valid legal process. Following
      the Employment Term, Employer shall reimburse Executive for all reasonable
      out-of-pocket expenses incurred by Executive and approved in advance by Employer
      in rendering such assistance (such as travel, parking, and meals but not
      attorney’s fees), but shall have no obligation to compensate Executive for his
      time in providing information and assistance in accordance with this Paragraph
      13, provided that such reimbursement shall be made on or before the last day
      of
      the calendar year following the calendar year in which the expense is incurred,
      and provided further that Executive’s obligations under this Paragraph 13
      following the Employment Termination Date shall not unreasonably interfere
      with
      Executive’s employment or other activities and endeavors.

     

    14.  No
      Obligation to Pay. With regard to any payment due to Executive under this
      Agreement, it shall not be a breach of any provision of this Agreement for
      Employer to fail to make such payment to Executive if (i) Employer is prohibited
      from making the payment; (ii) Employer would be obligated to recover the payment
      if it was made; or (iii) Executive would be obligated to repay the payment
      if it
      was made; provided, however, that this Paragraph 14 shall only apply if such
      prohibition or obligation is legally imposed by statute or
      regulation.

     

    15.  Deductions
      and Withholdings. With respect to any payment to be made to Executive,
      Employer shall deduct, where applicable, any amounts authorized by Employee,
      and
      shall withhold and report all amounts required to be withheld and reported
      by
      applicable law.

     

    16.  Notices.  All
      notices, requests, demands, and other communications required or permitted
      to be
      given or made by either party shall be in writing and shall be deemed to have
      been duly given or made (a) when delivered personally, or (b) when deposited
      in
      the United States mail, first class registered or certified mail, postage
      prepaid, return receipt requested, to the party for which intended at the
      following addresses (or at such other addresses as shall be specified by the
      parties by like notice, except that notices of change of address shall be
      effective only upon receipt):

     

    (i)  If
      to
      Employer, at:

     

    Rosetta
      Resources Inc.

    Attn:
      General Counsel

    717
      Texas

    Suite
      2800

    Houston,
      Texas 77002

     

    (ii)  If
      to
      Executive, at Executive’s then-current home address on file with
      Employer.

     

    17.  Injunctive
      Relief.  Executive acknowledges and agrees that Employer would not
      have an adequate remedy at law and would be irreparably harmed in the event
      that
      any of the provisions of Paragraphs 8, 9, and 10 were not performed in
      accordance with their specific terms or were otherwise breached. Accordingly,
      Executive agrees that Employer shall be entitled to equitable relief, including
      preliminary and permanent injunctions and specific performance, in the event
      Executive breaches or threatens to breach any of the provisions of such
      Paragraphs, without the necessity of posting any bond or proving special damages
      or irreparable injury. Such remedies shall not be deemed to be the exclusive
      remedies for a breach or threatened breach of this Agreement by Executive,
      but
      shall be in addition to all other remedies available to Employer at law or
      equity.

     

    18.  Mitigation.  Executive
      shall not be required to mitigate the amount of any payment provided for in
      this
      Agreement by seeking other employment or otherwise, nor shall the amount of
      any
      payment provided for in this Agreement be reduced by any compensation earned
      by
      Executive as the result of employment by another employer after the date of
      termination of Executive’s employment with Employer, or otherwise.

     

    19.  Binding
      Effect; No Assignment by Executive; No Third Party Benefit.  This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective heirs, legal representatives, successors, and assigns;
      provided, however, that Executive shall not assign or otherwise transfer this
      Agreement or any of his rights or obligations under this Agreement. Subject
      to
      Paragraph 20, Employer is authorized to assign or otherwise transfer this
      Agreement or any of its rights or obligations under this Agreement only to
      an
      Affiliate of Employer. Executive shall not have any right to pledge,
      hypothecate, anticipate, or in any way create a lien upon any payments or other
      benefits provided under this Agreement; and no benefits payable under this
      Agreement shall be assignable in anticipation of payment either by voluntary
      or
      involuntary acts, or by operation of law, except by will or pursuant to the
      laws
      of descent and distribution. Nothing in this Agreement, express or implied,
      is
      intended to or shall confer upon any person other than the parties, and their
      respective heirs, legal representatives, successors, and permitted assigns,
      any
      rights, benefits, or remedies of any nature whatsoever under or by reason of
      this Agreement.

     

    20.  Assumption
      by Successor.  Employer shall ensure that any successor or
      assignee (whether direct or indirect, by purchase, merger, consolidation, or
      otherwise) to all or substantially all the business and/or assets of Employer
      or
      the oil and gas acquisition, exploration, development and production business
      of
      Employer, either by operation of law or written agreement, assumes the
      obligations of this Agreement (the “Assumption Obligation”). If Employer fails
      to fulfill the Assumption Obligation, such failure shall be considered Good
      Reason; provided, however, that the compensation to which Executive would be
      entitled to upon a termination for Good Reason pursuant to Paragraph 7(f) shall
      be the sole remedy of Executive for any failure by Employer to fulfill the
      Assumption Obligation. As used in this Agreement, “Employer” shall include any
      successor or assignee (whether direct or indirect, by purchase, merger,
      consolidation, or otherwise) to all or substantially all the business and/or
      assets of Employer or the oil and gas exploration, development and production
      business of Employer that executes and delivers the agreement provided for
      in
      this Paragraph 20 or that otherwise becomes obligated under this Agreement
      by
      operation of law.

     

    21.  Legal
      Fees and Expenses.  Employer will reimburse Executive for all
      reasonable legal fees and expenses incurred by Executive in connection with
      the
      preparation, review, and negotiation of this Agreement prior to its execution,
      provided that any such reimbursement shall be made within the same calendar
      year
      in which falls the Effective Date.

     

    22.  Governing
      Law; Venue.  This Agreement and the employment of Executive shall
      be governed by the laws of the State of Texas except for its laws with respect
      to conflict of laws. The exclusive forum for any lawsuit arising from or related
      to Executive’s employment or this Agreement shall be a state or federal court in
      Harris County, Texas. This provision does not prevent Employer from removing
      to
      an appropriate federal court any action brought in state court.
EXECUTIVE HEREBY CONSENTS TO, AND WAIVES ANY OBJECTIONS TO, REMOVAL
      TO
      FEDERAL COURT BY EMPLOYER OF ANY ACTION BROUGHT AGAINST IT BY
      EXECUTIVE.

     

    23.  JURY
      TRIAL WAIVER.  IN THE EVENT THAT ANY DISPUTE ARISING FROM OR
      RELATED TO THIS AGREEMENT OR EXECUTIVE’S EMPLOYMENT WITH EMPLOYER RESULTS IN A
      LAWSUIT, BOTH EMPLOYER AND EXECUTIVE MUTUALLY WAIVE ANY RIGHT THEY MAY OTHERWISE
      HAVE FOR A JURY TO DECIDE THE ISSUES IN THE LAWSUIT, REGARDLESS OF THE PARTY
      OR
      PARTIES ASSERTING CLAIMS IN THE LAWSUIT OR THE NATURE OF SUCH CLAIMS. EMPLOYER
      AND EXECUTIVE IRREVOCABLY AGREE THAT ALL ISSUES IN SUCH A LAWSUIT SHALL BE
      DECIDED BY A JUDGE RATHER THAN A JURY.

     

    24.  Entire
      Agreement.  This Agreement contains the entire agreement between
      the parties concerning the subject matter expressly addressed herein and
      supersedes all prior agreements and understandings, written and oral, between
      the parties with respect to such subject matter.  However, nothing in
      this Paragraph 24 is intended to limit any obligations of the parties under
      any
      other agreement that Employer may enter into with Executive after the earlier
      of
      the Effective Date or the execution of this Agreement by Executive.

     

    25.  Modification;
      Waiver.  No person, other than pursuant to a resolution duly
      adopted by the members of the Board, shall have authority on behalf of Employer
      to agree to modify, amend, or waive any provision of this Agreement. Further,
      this Agreement may not be changed orally, but only by a written agreement signed
      by the party against whom any waiver, change, amendment, modification or
      discharge is sought to be enforced. Executive acknowledges and agrees that
      no
      breach by Employer of this Agreement or failure to enforce or insist on its
      rights under this Agreement shall constitute a waiver or abandonment of any
      such
      rights or defense to enforcement of such rights.

     

    26.  Construction.  This
      Agreement is to be construed as a whole, according to its fair meaning, and
      not
      strictly for or against any of the parties.

     

    27.  Severability.  If
      any provision of this Agreement shall be determined by a court to be invalid
      or
      unenforceable, the remaining provisions of this Agreement shall not be affected
      thereby, shall remain in full force and effect, and shall be enforceable to
      the
      fullest extent permitted by applicable law.

     

    28.  Counterparts.  This
      Agreement may be executed by the parties in any number of counterparts, each
      of
      which shall be deemed an original, but all of which shall constitute one and
      the
      same agreement.

     

    
      
              

                                                                                                                                           
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, Employer has caused this Agreement to be executed on its behalf
      by its duly authorized officer, and Executive has executed this Agreement,
      effective as of the date first set forth above.

    
 

    
      
        	
                EMPLOYER  

              	
                 

              	
                EXECUTIVE

              
	
                Rosetta
                  Resources
                  Inc.                                                                                 

              	
                 

              	
                 

              
	
                
                  By:       
                    /s/ D.
                    Henry Houston

                

              	
                 

              	
                By:

              	
                /s/
                  Randy L. Limbacher

              
	
                
                  
                    
                                
                        D. HENRY HOUSTON

                    

                  

                

              	
                 

              	
                 

              	
                RANDY
                  L. LIMBACHER

              
	
                
                  
                              
                      CHAIRMAN, BOARD OF DIRECTORS

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