Document:

Employment Agreement - Mike Liddell

 Exhibit 10.5 
 EMPLOYMENT AGREEMENT 
 THIS EMPLOYMENT AGREEMENT, made and entered into as of this 18th day of May,
1999, to be effective as of June 1, 1999 (“Effective Date”), by and between GULFPORT ENERGY CORPORATION, a Delaware corporation, with address of 6307 Waterford Blvd., Suite 100, Oklahoma City, OK 73118, and MIKE LIDDELL, an
individual, residing at 18824 Otter Creek Drive, Edmond, OK 73003 (“Employee”). 
 WITNESSETH: 
 WHEREAS, Employer is engaged in the exploration and development of crude oil and natural gas fields and in the gathering, processing, transportation and
marketing of hydrocarbons and in secondary recovery activities. 
 WHEREAS, Employee is and has been for some time a principal officer of
Employer, and is highly experienced in the management and conducting of the business of Employer. Employer is desirous of entering into an agreement with Employee, whereby said Employee will continue to be employed by Employer in order to serve on
an ongoing basis as the Chief Executive Officer of Employer, upon the terms and conditions hereinafter provided; and 
 WHEREAS, Employee is
willing to enter into this Employment Agreement with Employer to serve as the Chief Executive Officer of Employer, in consideration of the payments to be made to him by Employer, and certain other additional and valuable benefits and inducements to
be granted to him by Employer as hereinafter set forth and in accordance with the conditions hereinafter provided. 
 NOW, THEREFORE, for and
in consideration of the conditions hereinbelow to be performed on the part of the respective parties hereto, and in consideration of the mutual covenants and agreements hereinafter set forth, it is hereby jointly and severally agreed by and between
Employer and Employee as follows, to-wit: 
 1. EMPLOYMENT. Employer hereby employs Employee to render the services and perform the duties
described below for Employer and Employee hereby accepts employment with Employer, upon the terms and conditions hereinafter set forth. 
 2. TERM OF
EMPLOYMENT. Subject to the provisions on termination of employment contained in Paragraph 9 herein, the term of the employment provided for herein of Employee by Employer shall be for a period of five (5) years, beginning on the
Effective Date of this Agreement and ending on the date which is the last day prior to the fifth (5th) anniversary of the Effective Date. Subject to the provisions on termination of employment as provided for in paragraph 9 below, this
Agreement shall be automatically renewed for successive terms of one (1) year each, on the date which is the fifth (5th) anniversary date of the Effective Date of this Agreement, and on the anniversary date of the Effective Date of this
Agreement in each ensuing year thereafter, unless within sixty (60) days prior to such renewal date, either party to this Agreement shall notify the other party hereto in writing, that said Agreement shall terminate and end at the close of the
then current employment term. 
 3. DUTIES. Employee shall render services to the Employer as its Chief Executive officer to the best of his
ability for and on behalf of the Employer. The Employee shall comply with all 

 
laws, statutes, ordinances, rules and regulations relating to the performances of services for the Employer under this Agreement. During the term of this
Agreement, Employee shall serve as the Chief Executive Officer of Employer, and in that capacity shall, subject to the control of the Board of Directors of Employer, generally supervise, plan and direct the business and affairs of Employer and shall
preside at all meetings of the shareholders of Employer and of the Board of Directors of Employer. As Chief Executive Officer of Employer, Employee shall exercise and perform such other powers and duties as are usually vested in a president and
chief executive or operating officer, or as may be from time to time prescribed or assigned to him by the Employer’s Board of Directors, or as may be otherwise prescribed by the Bylaws of the Employer. The designation by Employer’s Board
of Directors of any other duties or any other titles for Employee during the term of this Agreement shall not affect Employee’s compensation as provided for herein. 
 4. COMPENSATION. 
 a. During the term of this Agreement, the Employee shall be paid an annual
base salary by Employer for the services rendered to Employer by Employee, as described above, in the amount of TWO HUNDRED THOUSAND AND NO/100 DOLLARS ($200,000.00) per year. This salary shall be payable to Employee in twelve (12) monthly
installments of SIXTEEN THOUSAND SIX HUNDRED AND SIXTY SIX AND 66/100 DOLLARS ($16,666.66) per month for each month during which services are rendered by Employee to Employer during the term of this Agreement. The base salary of TWO HUNDRED THOUSAND
AND NO/100 ($200,000.00) to be paid by Employer to Employee each year during the term of this Agreement shall be increased annually in an amount equal to any increase in the cost of living as determined in accordance with the formula set forth below
in this subparagraph a. 
 (i) As promptly as practicable at the end of each year during the original or extended term of this Agreement,
Employer shall compute the increase, if any, in the cost of living, using as the basis of such computation the “Consumer Price Index—Urban Wage Earners (1967 = 100)” (hereinafter called the Index), as published by the Bureau of Labor
Statistics of the United States Department of Labor. 
 (ii) The Index number in the column for Oklahoma City, Oklahoma entitled “all
items” for the month which includes the Effective Date of this Agreement, shall be the Base Index Number (“BIN”) and the corresponding Index number for the month preceding the anniversary month of the Effective Date of this Agreement
for each year during the initial term hereof or any renewal thereof, shall be the Current Index Number (“CIN”). 
 (iii) The
increase in the cost of living on each anniversary of this Agreement shall be determined by dividing the current Index number (“CIN”) by the Base Index Number (“BIN”) and subtracting the integer 1 from the quotient, in accordance
with the following formula: 
 Increase to cost of living = (CIN/BIN)—1 
 (iv) The percentage of increase in the cost of living, determined in the foregoing manner, shall then be multiplied by $200,000.00, the product of which
shall be the amount of annual increase, if any, in the Employee’s base salary to be determined by this 

  

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subparagraph. The amount so determined shall be added to the amount of base salary payable to Employee for the ensuing year to be paid in twelve equal,
monthly installments. This calculation of adjustment to base salary shall be made for each year during the term of this Agreement or any renewal term thereof. 
 (v) Appropriate adjustments shall be promptly made in case there is a published amendment of the Index figures upon which the foregoing computation is based. Any portion of the increase retroactively due as a result
of such an adjustment shall be payable within five days after the computation of the adjustment has been made hereunder. 
 (vi) If
publication of the Consumer Price Index is discontinued for any reason, the Employer and Employee shall accept comparable statistics on the cost of living for the City of Oklahoma City, Oklahoma, as computed and published by an agency of the United
States of America, or by a responsible financial periodical of recognized authority to be mutually selected, at such time, by the Employer and the Employee. 
 b. Employer shall pay Employee the amount determined in subparagraph a above, as adjusted each year for increases in the Index as set forth above, on a monthly basis on the first day of each month, subject to normal
salary deductions for the amount so owing, including, but not limited to, those Social Security, Medicare, Federal and state income withholding taxes. Employee’s base salary may be increased in the future, other than the annual adjustment for
increases in the Index as set forth in subparagraph a above, from time to time, by the action of Employer’s Board of Directors, based upon Employee’s performance and other relevant factors and Employer’s Board of Directors will review
Employee’s salary for the purposes of determining any appropriate increase in the base salary of employee at least annually. In addition, Employer may, from time to time, enter into supplemental agreements or memoranda in writing with Employee
for the award and payment to him of additional compensation or bonuses upon such terms and conditions as Employer shall deem to be in its best interest and in the event of the execution by Employer of any such agreement or memorandum, the right of
Employee to additional compensation or bonuses shall be determined in accordance with the applicable provisions thereof. In the absence of any such supplemental agreements or memoranda, Employer shall not be obligated to pay to Employee any
additional compensation or bonus whatsoever, irrespective of the payments of additional compensation or bonus to Employee in any past or succeeding year, or the payment of additional compensation or bonus to other employees of Empoyer at the end of
the year, but may do so in the sole discretion of the Employer’s Board of Directors, and the termination of Employer’s Board of Directors, in the exercise of such discretion, with respect to the payment and amount of any additional
compensation or bonus to Employee for any fiscal year of Employer if made, shall be final and conclusive. 
 5. GRANTING OF STOCK OPTIONS. As
an additional inducement to Employee to enter into this Agreement with Employer and to render his services to Employer under a long-term basis and as additional compensation to him for services to be rendered under the provisions of this Agreement,
Employer has agreed to grant to Employee certain stock options to acquire Employer’s Common Stock on or before June 1, 1999. The stock options have been granted by Employer to Employee pursuant to that certain Gulfport Energy Corporation
Stock Option Plan (“Plan”) to be enacted by Employer. In order to evidence these stock options, the Employer has also prepared and will execute and enter into with Employee, contemporaneously with this 

  

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Agreement, that certain Gulfport Energy Corporation Stock Option Agreement (“Stock Option Agreement”), which will set forth the terms and
conditions of the successive stock options to be granted to Employee by Employer in accordance herewith and the manner and method of exercising such options and acquiring such stock by Employee. Attached as Exhibit “A” to this
Agreement, and by this reference made a part hereof, is an executed copy of the Stock Option Agreement entered into by and between Employer and Employee this same date in fulfillment of the contractual obligations of Employer. 
 6. ADDITIONAL EMPLOYEE BENEFITS. In addition to the annual base salary, as adjusted, provided above, Employer agrees to provide to employee, or reimburse
Employee for, the following additional benefits and expenses: 
 a. During the term of this Agreement, Employer shall furnish and provide to
Employee, at its sole cost and expense, the following described employee benefits, upon the same basis that Employer accords these same benefits to its other executive employees. In the event Employer does not provide any of the following benefits
to its executive level employees, it shall not be required to initiate a program solely to provide such benefits to Employee. However, if Employer should at any time in the future provide such benefits to its employees, any such benefits shall also
be provided to Employee upon the same basis that it is provided to such other employees of Employer, whether or not such benefit is listed below: 
 (i) Hospitalization, Dental, Accident and Major Medical Insurance Benefits to Employee and all members of Employee’s immediate family. The opportunity to participate in any group life insurance program on a basis comparable to the
participation provided under any plans of such kind to other executive officers of Employer. In any case, Employer will be expected to make contributions toward the cost of such plans for Employee at the same rate and in the same manner as it makes
for its other employees of like status who participate therein. 
 (ii) The right and opportunity to participate in and become vested under
and pursuant to the 401(k) pension and profit sharing plan maintained by Employer or any other qualified pension and profit sharing plans hereafter maintained by Employer upon the same basis accorded to other full-time employees of Employer. The
right to participate in the incentive bonus plan maintained by Employer on the same basis provided to any other full-time employee of Employer. In addition, Employer shall provide to Employee such other fringe benefits as may be provided by Employer
to its executives, or its other employees, in accordance with the policies heretofore or hereafter adopted by Employer. 
 b. In addition to
the compensation above set forth, Employee shall also be entitled to reimbursement by Employer for his actual out-of-pocket expenses incurred in the conduct of Employer’s business, which shall be limited to ordinary and necessary items and such
other valid expenditures as may be determined to be appropriate expenditures on behalf of Employer by its Board of Directors, from time to time. The reimbursement of said expenses and the amounts and the extent to which they shall be reimbursed
shall be decided on a case-by-case basis by the Board of Directors of Employer, as the case may be; provided, however, the Board of Directors of Employer may, at any time, and from time to time, establish a policy or policies for allowing certain
amounts for reimbursements of certain types of specified business expenses, incurred by Employee. Employee shall, in every instance, wherever practical, support any claims for reimbursement for expenses by adequate proof of such expenditures in the
form of cancelled checks, vouchers, bills or in any other forms satisfactory to the Board of Directors of Employer. 
  

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 c. Employee shall be entitled to such period of vacation as may be permitted by the Board of Directors of
Employer on a case-by-case basis, in its sole discretion, or pursuant to any policy established by the Board of Directors of the Employer for the benefit of its executive employees, from time to time, with pay during any one (1) year of the
term of this Agreement. Employee agrees that he will take vacation days only at such times that will not unduly interfere with or hamper the operation of Employer’s business. 
 7. DISABILITY. 
 a. For purposes of this Agreement, the Employee shall be deemed to be
“disabled” or have a “disability” if the Employee shall have an illness, injury or other physical or mental condition which results in the Employee’s inability to perform substantially the duties he performed in his
employment capacity for Employer under this Agreement to the extent he was performing such duties immediately prior to the commencement of such condition. 
 b. If the Employee shall be disabled for not more than ninety (90) days during any twelve (12) month period of the term of this Agreement, then the Employee, during the continuance of such disability, shall
remain employed by the Employer hereunder, shall continue to receive his base salary and other compensation pursuant to this Agreement and otherwise shall continue to have all of the rights and be subject to all of the Employee’s obligations
and duties under this Agreement other than the obligation and duty to render services to Employer otherwise in accordance with this Agreement during the period of such disability. 
 c. If the Employee shall be disabled for more than ninety (90) days during any twelve (12) month period during the term of this Agreement, but
not more than one hundred twenty (120) days during any twelve (12) month period, then, from and after the expiration of the ninetieth (90) day of disability and during the continuance of such disability up to and including the day
immediately preceding the one hundred twentieth (120th) day, the Employee shall be deemed to have taken a leave of absence from Employer commencing on the ninetieth (90th) day of such disability and, during the continuance of such
disability, the following provisions shall apply: 
 (i) Employee’s base salary shall be apportioned up to and including the
ninetieth (90th) day of such disability and from and after the ninetieth (90th) day of such disability and up to and including the day immediately preceding the one hundred twentieth (120th) day of such disability, the Employer shall
pay no salary to the Employee and the Employee shall receive no salary from the Employer. 
 (ii) The Employer, in the sole discretion of its
Board of Directors, shall have the right and power to remove the Employee from the position of Chief Executive Officer of the Employer, or to delegate all or any portion of the Employee’s duties, as Chief Executive Officer of the Employer, to
one or more other employees of the Employer. 
 (iii) The Employee shall otherwise have all of the rights and be subject to all of the
Employee’s obligations and duties under this Agreement, except that the Employee shall have no obligation or duty to render services to the Employer otherwise in accordance with this 

  

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Agreement during such period of time; provided that Employer shall be excused from providing any insurance coverage or benefits which by reason of the
Employee’s disability, the Employer shall not be able to obtain, continue or maintain at substantially the same cost or expense or substantially the same terms and conditions that the Employer was able to obtain, continue or maintain
immediately prior to the commencement of the Employee’s disability. 
 d. If the Employee shall be disabled for more than one hundred
twenty (120) days in any twelve (12) month period during the term of this Agreement, the employment of the Employee hereunder shall cease and terminate pursuant to the provisions of Paragraph 9 below. 
 e. If Employer and Employee are unable to agree whether the Employee is disabled within the meaning of this Paragraph 7, then this issue shall be
submitted to arbitration in the manner provided for in Paragraph 12 of this Agreement below. 
 8. CONFIDENTIAL INFORMATION. 

a. Employee acknowledges that in the Employee’s employment hereunder, the Employee will be making use of, acquiring and adding to the
Employer’s trade secrets and its confidential and proprietary information of a special and unique nature and value relating to such matters as, but not limited to, the employer’s business operations, internal structure, financial affairs,
programs, software, systems procedures, manuals, confidential reports, list of investors, all of which shall be deemed to be confidential information. The Employee acknowledges that such confidential information has been and will continue to be of
central importance to the business of Employer and that disclosure of it to or its use by others could cause substantial loss to Employer. Accordingly, during the initial term and any renewal term of this Agreement and for a period of five (5)
years from and after leaving the employ of Employer for any reason whatsoever, the Employee shall not, for any purpose whatsoever, directly or indirectly, divulge or disclose to any person or entity any of such confidential information which was
obtained by Employee as a result of Employee’s employment with Employer or any trade secrets of the Employer, but shall hold all of the same confidential and inviolate. 
 b. All contracts, agreements, financial books, records, instruments and documents, investor lists, memoranda, data, reports, programs, software, tapes,
rolodexes, telephone and address books, letters, research, cardex, listings, programming, and any other instruments, records or documents relating or pertaining to the business of the Employer (collectively, the “Records”) shall at all
times be and remain the property of Employer. Upon termination of this Agreement and the Employee’s employment under this Agreement for any reason whatsoever, the Employee shall return to employer all Records (whether furnished by Employer or
prepared by Employee). 
 c. All inventions and other creations, whether or not patented or copyrightable, and all ideas, reports and other
creative works, including, without limitation, computer programs, manuals and related materials, made or conceived in whole or in part by the Employee while employed by the Employer which relate in any manner whatsoever to the business, existing or
proposed, of Employer or any other business or research or development effort in which Employer or any of its subsidiaries or affiliates engages in during Employee’s employment by Employer will be disclosed promptly by the Employee to the
Employer and shall be the sole and exclusive property of Employer. 
  

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 9. TERMINATION OF EMPLOYMENT. 
 In addition to the option and right of Employer and Employee to elect not to renew the term of this Agreement in accordance with the procedures set forth in Paragraph 2 above, this Employment Agreement shall be
terminated only upon the happening of one or more of the following events: 
 a. Employer shall be entitled to terminate the Employee’s
employment hereunder for cause upon the occurrence of any one or more of the following events: 
 (i) the voluntary or involuntary dissolution
of Employer; 
 (ii) the voluntary or involuntary liquidation of winding-up of Employer; 
 (iii) the death of Employee, or the disability of Employee for more than one hundred twenty (120) days in any twelve (12) month period of time
during the term of this Agreement pursuant to the provisions of Paragraph 7 of this Agreement above; 
 (iv) the conviction of Employee
for a felony or other crime involving moral turpitude, or which otherwise results in material injury to Employer; 
 (v) the deliberate and
intentional refusal (except by reason of disability) by Employee to devote the amount of business time required to perform his duties, after failure to cure such refusal or problem within thirty (30) days after receiving written notice
detailing the alleged refusal or cause for such dismissal under this subparagraph from Employer. 
 (vi) if Employee is placed in bankruptcy,
whether voluntary or involuntary (if involuntary only if the petition is not discharged within a period of 90 days after filed), or Employee makes an assignment for the benefit of his creditors. 
 If Employee dies during the term of this Agreement, any monthly salary due Employee under this Agreement shall be paid to the person or entity designated
by Employee, or in the absence of such written designation to the person or entity designated in Employee’s Last Will and Testament, or, in absence thereof, to his surviving spouse or, if none, to his estate. 
 b. Employer may terminate the employment of Employee under this Agreement, without cause at any time during the term of this Agreement, to be effective
not less than sixty (60) days from delivery of written notice of such termination without cause by Employer to Employee. 
 c.
Employee may voluntarily terminate his employment under this Agreement with Employer, with or without cause, effective not less than sixty (60) days from delivery of written notice of such termination by Employee to Employer. 
 d. Upon termination of the Employee’s employment under this Agreement pursuant to this Paragraph 9, neither party shall thereafter have any
further rights, duties or obligations under this Agreement, except as otherwise specifically provided hereunder, but each party shall remain liable and responsible to the other for all prior obligations and duties hereunder for all acts and
omissions of such party, its agents, servants and employees prior to such termination. 
  

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 10. EMPLOYEE’S RIGHTS TO ADDITIONAL COMPENSATION AND BENEFITS UPON TERMINATION OF HIS EMPLOYMENT BY EMPLOYER
WITHOUT CAUSE. If Employee is terminated under this Agreement by Employer without cause pursuant to the provisions of Paragraph 9b of this Agreement, above, then and in that sole event, Employee shall be entitled to the following
additional rights and benefits by reason thereof. 
 a. Employer shall be required to pay to Employee, within ten (10) days of the
effective date of the termination of Employee’s employment under this Employment Agreement without cause pursuant to the provisions of Paragraph 9b above, an aggregate amount equal to twelve (12) months of his then current base
salary, as set forth and described in Paragraph 4 of this Agreement, above, or as it may have been increased pursuant to the provisions of that paragraph hereafter from time to time. 
 b. Upon the effective date of the termination of Employee’s employment under this Agreement by Employer without cause pursuant to
Paragraph 9b of this Agreement, all portions of the Options which have been granted to Employee under the terms and conditions of the Stock Option Agreement in fulfillment of the requirements made in Paragraph 5 of this Agreement which are
still unexercisable shall become immediately exercisable by the Employee under the Stock Option Agreement, including all portions of the Options which, but for the provisions of this subparagraph 10c, would not yet be exercisable under the
terms of the Stock Option Agreement, and such exercisable Options shall expire on their respective expiration dates under the Stock Option Agreement, except as otherwise specifically provided therein. 
 11. REIMBURSEMENT OF DISALLOWED EXPENSES. If any expenses paid by Employer for Employee or any reimbursement of expenses by Employer to Employee shall,
upon audit or other examination of the income tax returns of Employer, be determined to be not allowable deductions from the gross income of Employer and such determination shall be acceded to by Employer, or such determination shall be made final
by the appropriate state or federal taxing authority or a final judgment of a court of competent jurisdiction, and no appeal shall be taken therefrom, or the applicable period for the filing of a notice of appeal shall have expired, then, and n such
event, Employee shall rebate to Employer the dollar amount of such disallowed expenses. Such repayment may not be waived by Employer. 
 12. BINDING
ARBITRATION. Unless both Employer and Employee expressly agree otherwise in writing, all disputes relating to this Agreement, or any breach thereof or the meaning and effect of any term and provisions hereof, shall be submitted to binding
arbitration by Employer and employee pursuant to the Oklahoma Uniform Arbitration Act, 15 O.S. Section 801, et seq. (the “Act”) and in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the
“Rules”). In the event a dispute arises which cannot be informally resolved by the parties hereto, a panel of three (3) arbitrators shall be selected to settle the dispute. Within twenty (20) days following the demand by either
party for arbitration of a dispute arising under this Agreement, Employer shall appoint an arbitrator knowledgeable and experienced in the oil and gas business and Employee shall appoint an arbitrator knowledgeable and experienced in the oil and gas
business. The two (2) arbitrators so appointed shall together appoint a third arbitrator, also knowledgeable and experienced in the oil and gas business, within twenty (20) days following the appointment of the last arbitrator selected by
Employer and Employee. In the event that the two (2) arbitrators selected by the parties hereto are unable to mutually select a third arbitrator within the twenty (20) day period, the third arbitrator shall be 

  

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selected by the then presiding judge of the Oklahoma County, Oklahoma District Court. If the presiding judge of the Oklahoma County, Oklahoma District Court
is unable or unwilling to make such selection, the parties will request that the Chief U.S. District Judge of the U.S. District Court for the Western District of Oklahoma make such selection. The panel of three (3) arbitrators shall then
determine a time and a place for the hearing and shall notify the parties in writing personally or by registered mail no less than twenty (20) days before the hearing. The arbitrators will hear the dispute in accordance with the Act and the
Rules. Each party shall be entitled to be represented by counsel. A majority of the arbitrators shall render a final award within twenty (20) days following the conclusion of the hearing which shall be final and binding upon the parties hereto.
The expenses and fees of the third arbitrator mutually selected by the first two (2) arbitrators shall be divided equally between the parties. Each party shall be solely responsible for the expenses and fees of the arbitrator whom it selected.
The arbitrators may include, as part of any award, for the recovery of attorney’s fees by the prevailing party. All other expenses incurred in the conduct of the arbitration shall be divided equally between the parties. Judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction thereof. 
 13. MISCELLANEOUS PROVISIONS. 
 a. This Agreement shall be binding upon and shall inure to the benefit of Employer and Employee, and their respective heirs, personal and legal
representatives, successors and assigns. 
 b. In view of the fact that the principal offices of Employer are located in the State of
Oklahoma, and the services to be rendered herein are to be substantially rendered in the State of Oklahoma, it is understood and agreed by the parties hereto that the construction and interpretation of this Agreement shall at all times and in all
respects be governed by the laws of the State of Oklahoma. 
 c. All notices required or permitted herein must be in writing and shall be
deemed to have been duly given on the date of service if served personally or by telecopier, telex or other similar communication to the party or parties to whom notice is to be given, on the next day if notice is effected by overnight mail service,
or on the third business day after mailing, if mailed to the party or parties to whom notice is to be given by registered or certified mail, return receipt requested, postage pre-paid, to the address of such party, as set forth in the first
paragraph of this Agreement, or to such other addresses as any party to this Agreement may designate to the other from time to time for this purpose. Any communication which is mailed by overnight mail or sent by telecopier or telex shall be
confirmed immediately, but failure to so confirm shall not affect the effectiveness of such notice from and after the day on which such notice is actually received. 
 d. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof and any prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. 
 e. This Agreement contains the entire agreement and
understanding by and between Employer and Employee with respect to Employee’s employment by Employer as herein 

  

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described, and supersedes all prior agreements and understandings between the parties to this Agreement, relating to the subject matter of this Agreement. No
change or modification of this Agreement shall be valid or binding unless the same is in writing and signed by the party intending to be so bound. No waiver of any provision of this Agreement shall be valid unless the same is in writing and signed
by the party against whom such waiver is sought to be enforced. Moreover, no valid waiver of any provision of this Employment Agreement, at any time, shall be deemed to be a waiver of any other provision of this Employment Agreement at such time, or
will be deemed a valid waiver of such provision at any other time. 
 f. This Agreement may be executed in two (2) or more counterparts,
each of which shall be deemed an original, but all of which shall constitute but one and the same instrument. 
 g. Time shall be of the
essence with respect to the performance by the parties hereto of their respective obligations hereunder. 
 [SIGNATURE PAGE FOLLOWS]

  

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 IN WITNESS WHEREOF, Employer and Employee have duly executed this Employment Agreement as of the day and
year first above written to be effective as of the date stated in the first paragraph above. 
  

			
	 GULFPORT ENERGY CORPORATION,
 A Delaware
Corporation

	
	“EMPLOYER”
		
	By:	 	 /s/ DAVID HOUSTON

		 	David Houston
		 	Chairman of the Compensation Committee
		
		 	“EMPLOYEE”
		
		 	 /s/ MIKE LIDDELL

		 	Mike Liddell

  

 11Employee Severance Plan

 Exhibit 10.1 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 FEDERAL
HOME LOAN BANK 
 OF CHICAGO 
 EMPLOYEE SEVERANCE PLAN 
 Effective as of May 1, 2007 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  

  

 FEDERAL HOME LOAN BANK OF CHICAGO 
 EMPLOYEE SEVERANCE PLAN 
 TABLE OF CONTENTS 
  
  

			
	 Section 1. PLAN NAME AND EFFECTIVE DATE
	  	1
		
	 Section 2. PURPOSE
	  	1
		
	 Section 3. DEFINITIONS
	  	1
		
	 Section 4. ELIGIBILITY
	  	2
		
	 Section 5. SEVERANCE PAYMENT CALCULATION; PAYMENT, AND BENEFIT CONTINUATION
	  	2
		
	 Section 6. ADMINISTRATION
	  	4
		
	 Section 7. CLAIMS PROCEDURE
	  	4
		
	 Section 8. GENERAL INFORMATION
	  	5
		
	 Section 9. ERISA RIGHTS STATEMENT
	  	5
		
	 Section 10. GOVERNING LAW
	  	7

  

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 FEDERAL HOME LOAN BANK OF CHICAGO 
 EMPLOYEE SEVERANCE PLAN 
 SECTION 1. PLAN NAME AND EFFECTIVE DATE 
 1.1 The name of the Plan is the Federal Home Loan Bank of Chicago Employee Severance Plan. The effective date of the Plan shall be May 1, 2007.

 SECTION 2. PURPOSE 
 2.1 The
purpose of the Plan is to provide severance pay to eligible Employees under the conditions set forth in this Plan. Severance payments under the Plan are designed to provide the Employee with funds while seeking other employment. 
 SECTION 3. DEFINITIONS 
 3.1 Bank shall
mean the Federal Home Loan Bank of Chicago. 
 3.2 Board shall mean the Board of Directors (or a Committee thereof) of the Bank.

 3.3 Cause shall mean: (a) a violation by the Employee of any applicable law or regulation respecting the business of the Bank;
(b) the Employee having committed or being indicted for a felony or an act of dishonesty in connection with the performance of his duties as an employee of the Bank; (c) the failure of the Employee to fulfill the duties and
responsibilities of his position; or (d) any other conduct or actions which would be grounds for termination under the Employee Handbook. The Employee shall be entitled to at least seven (7) days’ prior written notice of the
Bank’s intention to terminate his or her employment for any Cause, specifying the grounds for such termination and the means, if any, to rectify such conduct, and seven (7) days to rectify or appeal in writing to the Board regarding the
existence of such Cause. 
 3.4 Constructive Discharge shall mean any one of the following events: (i) the Employee is moved from
the position(s) most recently held with the Bank, other than (x) as a result of the Employee’s appointment to one or more position(s) of equal or superior scope and responsibility or (y) pursuant to the mutual agreement of the Bank
and the Employee; or (ii) the Employee shall fail to be vested by the Bank with the powers, authority and support services of any of such position(s); or (iii) the Bank otherwise commits a material breach of its obligations under this
Plan. The Employee shall be required to notify the Bank within 90 days of the occurrence of the event or the conduct constituting the Constructive Discharge, and the Bank shall be entitled to 60 days in which to rectify such occurrence or conduct.

 3.5 Employee shall mean a regular, active full-time, part-time, or Part-time Plus employee of the Bank, but excludes an employee
who has a written employment agreement, severance agreement, or similar agreement with the Bank providing for severance payment(s) in the event of termination of employment. 
  

 3.6 Participant shall mean an Employee who satisfies the eligibility requirements as set forth in
Section 4.1. 
 3.7 Pay shall mean the base or regular compensation rate as of the calendar month preceding the date of
employment termination. In the case of a non-exempt Employee, “Pay” shall not include overtime compensation paid to such Employee during such month. 
 3.8 Payment Period shall mean, with respect to payment by the Bank of the Severance Payment pursuant to Section 5.1, the number of weeks or months of Pay a Participant is entitled to under
Section 5.1. With respect to the COBRA continuation payments described in Section 5.5, Payment Period shall mean the period of time beginning with the first calendar month to begin after the Participant becomes eligible to start receiving
installments of the Severance Payment and ending on the last day of the calendar month that began immediately before the last scheduled Severance Payment payment date. The Payment Period is not dependent on whether a benefit payment under
Section 5 is made periodically or in a lump sum. 
 3.9 Plan shall mean this Federal Home Loan Bank of Chicago Employee Severance
Plan as it may be amended from time to time. 
 3.10 Service shall mean all employment with the Bank, or any successor thereof.

 3.11 Severance Payment has the meaning given to such term in Section 5.1. 
 SECTION 4. ELIGIBILITY 
 4.1 An Employee shall
be eligible to receive a Severance Payment and employee benefits under the Plan, as set forth in Section 5, if: 
 (a)
the Employee is terminated by the Bank, other than under the circumstances described in Section 5.6; and 
 (b) the
Employee signs a general release waiving any employment-related claims against the Bank in a form provided by the Bank. 
 SECTION 5. SEVERANCE PAYMENT
CALCULATION; PAYMENT, AND BENEFIT CONTINUATION 
 5.1 A Participant under the Plan shall be eligible to receive a severance payment
calculated as follows (the “Severance Payment”): 
 Management Committee – the greater of: (a) four (4) weeks’ Pay for
each completed year of Service, calculated based on the Employee’s hire date but not to exceed 104 weeks; or (b) one (1) year’s Pay. 
 Senior Vice President or Vice President – the greater of: (a) three (3) weeks’ Pay for each completed year of Service, calculated based on the Employee’s hire date; or (b) nine (9) months’ Pay.

  

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 Assistant Vice President – the greater of: (a) three (3) weeks’ Pay for each completed year of
Service, calculated based on the Employee’s hire date; or (b) six (6) months’ Pay. 
 Exempt Employee or Non-Exempt Employees
(non-officer) – the greater of: (a) two (2) weeks’ Pay for each completed year of Service, calculated based on the Employee’s hire date, or (b) three (3) months’ Pay. 
 In addition, notwithstanding the terms of any Bank incentive compensation plan, if an Employee who is eligible to receive a Severance Payment under this Plan would also
be eligible to receive an incentive award under an applicable incentive compensation plan, then the Employee will be eligible to receive as an addition to the Severance Payment an amount equal to such incentive award, provided that the
Employee’s employment is terminated after December 31 of the preceding year but prior to the Payment Date of the incentive awards under the terms of such incentive compensation plan in effect at the time of such Employee’s
termination. Notwithstanding Section 5.3, payment to an Employee pursuant to this paragraph shall be made to the Employee in the same manner as award payments under the applicable incentive compensation plan are made to the Bank’s
employees. 
 The Severance Payment shall not exceed two (2) times the lesser of: 
 (a) the Participant’s annual compensation (as defined in Internal Revenue Code of 1986, as amended (the “Code”) Regulation
Section 1.415-2(d)(2)) for the calendar year preceding the calendar year in which the employment terminates; and 
 (b)
the maximum amount of compensation under Section 401(a)(17) of the Code for the calendar year in which occurs the date of employment termination. 
 5.2 The Bank reserves the right to offset the payments described in Section 5.1 above against any monies the Participant owes the Bank. 
 5.3 Payments under the Plan shall be made during the Payment Period in accordance with the regular payroll schedule of the Bank, subject to any necessary
or required benefit or tax withholding. 
 5.4 If a Participant dies before receiving a payment due under the Plan, such payment shall
continue to be paid to the beneficiary designated by the Participant under the Bank’s defined benefit plan (Financial Institutions Retirement Fund). If no beneficiary has been designated, then such payments shall be made to the
Participant’s estate. 
 5.5 A Participant may elect to continue group medical insurance coverage after termination of employment under
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”). If such an election is made, during the Payment Period the Bank shall pay the employer’s portion of the premiums for such continuation coverage and the
Participant will be responsible for paying the employee’s portion of the premiums. After the end of the Payment Period, the Participant will be required to pay the full COBRA premium for such coverage until the end of the COBRA continuation
period. 
  

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 5.6 In the event of an involuntary termination for Cause, the voluntary termination by the Employee of
his or her employment for any reason other than a Constructive Discharge, or termination of employment after the Plan terminates, the Employee will not be entitled to any compensation or benefits under this Section 5, other than regular
compensation and benefits to which the Employee is entitled through the date of termination. 
 SECTION 6. ADMINISTRATION 
 6.1 The Plan is sponsored and shall be administered by the Bank. The Director of Compensation and Benefits of the Bank shall be the named fiduciary under
the Plan. 
 6.2 The Bank may at any time delegate to a person or body, or reserve therefore, any of the fiduciary responsibilities or
administrative duties with respect to the Plan. The Bank, or any such delegate, shall have the complete discretion and authority to interpret the Plan, including matters regarding eligibility and benefit entitlement. 
 6.3 Subject to the limitation of the provisions of the Plan, the Bank may establish such rules for the administration of the Plan as the Bank may deem
desirable. 
 6.4 The expenses of administering the Plan, including the benefits, shall be paid by the Bank out of its general assets.

 6.5 The Plan and all of its records shall be kept on a calendar year basis, beginning January 1 and ending December 31 of each
calendar year. 
 6.6 Except as required by applicable law, benefits provided under the Plan shall not be subject to assignment or
alienation, since they are primarily for the support and maintenance of the Participants. Likewise, such benefits shall not be subject to attachment by creditors of or through legal process against the Bank or any Participant. 
 6.7 The Bank reserves the right to change or amend the Plan in order to carry out the intent hereof by a resolution adopted by a majority of the Board.
The Plan shall be reviewed annually by the Personnel & Compensation Committee of the Board. Participants will be notified of any changes, and all changes will be subject to the Plan’s provisions and applicable laws. 
 6.8 Nothing herein shall be construed as giving to any Employee of the Bank any right to remain in the employ of the Bank, nor shall it provide or be
construed as providing any right to claim any pension or other benefit or allowance after termination of employment with the Bank. 
 SECTION 7. CLAIMS
PROCEDURE 
 7.1 Employees normally do not need to take any action to receive benefits under the Plan. Employees will normally be
contacted by the Bank or its delegate concerning the receipt of benefits. Employees who are not so contacted, and who believe they are entitled to benefits under the Plan, must submit a written claim to the Bank within sixty (60) days of the
date of the alleged occurrence giving rise to the claim. If the Bank or any delegate believes that the claim should be denied, the Employee shall be notified in writing of the denial of the claim within 

  

 4 

 
ninety (90) days after the Bank’s receipt of the claim. Such notice shall (a) set forth the specific reason or reasons for the denial, making
reference to the pertinent provisions of the Plan on which the denial is based; (b) describe any additional material or information that should be received before the claim may be acted upon favorably and explain the reason why such material or
information, if any, is needed; (c) inform the Employee of his or her right pursuant to this section to request review of the decision by the Bank; and (d) explain the Plan’s claims review procedure and the time limits applicable to
such procedures, including a statement of the Employee’s right to bring a civil action under Section 502(a) of ERISA following an adverse determination on review. An Employee who believes that he or she has submitted all available and
relevant information may appeal the denial of a claim to the Bank by submitting a written request for review within sixty (60) days after the date on which such denial is received. Such period may be extended by the Bank for good cause shown.
During this period, the Employee making the request for review may examine the Plan documents, records and other information relevant to the Employee’s claim for benefits. The Bank shall decide whether or not to grant the claim within sixty
(60) days after receipt of the request for review, but this period may be extended by the Bank for up to an additional sixty (60) days in special circumstances. The Bank’s decision shall be in writing, shall include specific reasons
for the decision, shall refer to pertinent provisions of the Plan on which the decision is based, and shall be conclusive and binding on all persons. 
 SECTION 8. GENERAL INFORMATION 
 8.1 The Plan administrative contact and agent for service of process is the
Bank’s Director of Compensation and Benefits, who can be contacted at: 
 Federal Home Loan Bank of Chicago 

111 East Wacker Drive 
 Chicago, IL 60601 
 (312) 565-5700 
 8.2 The Bank Employer Identification Number is 36-6001019 and the Plan number is 510. 
 SECTION 9. ERISA RIGHTS STATEMENT 
 9.1 As a Participant in the Plan, you are entitled to
certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that you are entitled to: 
  

	 	•	 	 Examine, without charge at the office of the Plan administrator, all Plan documents, including copies of all documents filed by the Plan with the U.S. Department of
Labor, such as annual reports; 

  

	 	•	 	 Obtain copies of the Plan document and other documents governing the operation of the Plan upon written request to the Plan administrator. The administrator may
make a reasonable charge for the copies. 

  

 5 

 In addition to creating rights for plan participants, ERISA imposes duties upon the people who are responsible for the
operation of an employee benefit plan. The people who operate your Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other participants. 
 No one may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit or exercising your rights under ERISA. 
 If your claim for a benefit is denied in whole or in part, you must receive a written explanation of the reason for the denial. You have the right to have the Plan
administrator review and reconsider your claim. 
 Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request
materials from the Plan administrator and do not receive them within thirty (30) days, you may file suit in a federal court. In such case, the court may require the Plan administrator to provide the materials and pay up to $110 a day until you
receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan administrator. 
 If you have a claim for a
benefit which is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that Plan fiduciaries misuse the Plan’s assets, or if you are discriminated against for asserting your rights, you may
seek assistance from the U.S. Department of Labor, or you may file a suit in federal court. 
 The court will decide who should pay court costs and legal
fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees if, for example, it finds your claim is frivolous. 
 If you have questions about the Plan, you should contact the Plan administrator. If you have any questions about this statement or your rights under ERISA, you should
contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S.
Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications under ERISA by calling the publications hotline of the Employee Benefits Security Administration. 
  

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 SECTION 10. GOVERNING LAW 
 10.1 The Plan and the rights of the parties hereunder shall be governed by and interpreted in accordance with federal law, and, to the extent applicable, the laws of the State of Illinois. The invalidity or
unenforceability of any provision or any part of any provision, hereof shall in no way effect the validity or enforceability of any other provision or part hereof. 
  
 APPROVED BY THE BOARD OF 
 DIRECTORS THIS 24TH DAY OF 
 APRIL, 2007 
  
  

			
	
	 By:
	 	 /s/    Peter E. Gutzmer

		 	Its Corporate Secretary

  

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