Document:

exv10w2

Exhibit 10.2

EMPLOYMENT AGREEMENT

          This Employment Agreement (this “Agreement”) is made by and between Resolute Energy
Corporation, a Delaware corporation (the “Company”), and James M. Piccone (“Employee”) effective as
of April 1, 2011 (the “Effective Date”).

     WHEREAS, the Company currently employs Employee as its President and Employee provides
services to the Company and its direct and indirect subsidiaries (the “Subsidiaries”);

     WHEREAS, the Company desires to continue to employ Employee and Employee desires to continue
to be employed by the Company and to commit himself to serve the Company on the terms herein
provided.

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

1. Employment. The Company shall continue to employ Employee, and Employee accepts
continued employment with the Company, upon the terms and conditions set forth in this Agreement.
Unless earlier terminated pursuant to Section 4 below, the initial term of this Agreement shall
begin on the Effective Date and end on December 31, 2011 (the “Initial Term”), provided,
however, that the term shall be automatically renewed for successive one-year periods (each
such period an “Extension Term”) unless the Company provides a written notice of non-renewal to
Employee more than 60 days before the end of the Initial Term or the then-current Extension Term.
The Initial Term together with each Extension Term, if any, shall be the “Term.” If the Company
gives timely notice of non-renewal, then Employee’s employment shall end on the last day of the
then-current Term. A termination of Employee’s employment at the end of the Term by reason of
notice of non-renewal given by the Company shall be considered a termination without Cause for
purposes of Sections 4, 5 and 6, as applicable.

2. Position and Duties; Exclusive Compensation and Services.

          (a) Employee shall initially hold the title of President; provided however that this title
may be changed from time to time during the Term by the Board of Directors (the “Board”) or any
duly authorized committee thereof to a different title which shall have at least equivalent rank to
Employee’s initial title. The Company and Employee agree that Employee shall have duties and
responsibilities consistent with the assigned position in a company the size and of the nature of
the Company, and such other duties and authority that are assigned to Employee from time to time by
the Board or the Company’s Chief Executive Officer. Employee shall report to the Company’s Chief
Executive Officer.

          (b) During the Term, Employee agrees to devote his full business time and attention to the
business and affairs of the Company. Notwithstanding the foregoing, so long as such activities do
not conflict with the Company’s interests, interfere with Employee’s duties and responsibilities or
violate Employee’s obligations hereunder, Employee will not be prohibited

 

 

from (i) managing his personal, financial, and legal affairs; (ii) engaging in professional,
charitable or community activities or organizations; or (iii) serving on the boards of directors,
or advisory boards of directors, of not-for-profit charitable organizations, not-for-profit
professional organizations, or for-profit corporations, so long as Employee secures the Board’s
express written consent for Employee to serve on any such for-profit board positions prior to
undertaking such service.

          (c) During the Term, Employee agrees to comply with the policies of the Company, including
without limitation such policies with respect to legal compliance, conflicts of interest,
confidentiality, compensation recovery (clawback), professional conduct and business ethics as are
from time to time in effect, including but not limited to the Company’s Code of Business Conduct
and Ethics.

3. Compensation.

          (a) Base Salary. Initially, Employee’s base salary shall be $362,000 per annum.
Employee’s base salary may be increased (but not decreased, including after any increase, without
Employee’s written consent or pursuant to a decrease broadly applied to all similarly situated
employees) by the Board (or the Compensation Committee) in its sole discretion (as adjusted from
time to time, the “Base Salary”). The Base Salary shall be payable to Employee in regular
installments in accordance with the Company’s general payroll practices and subject to withholdings
required by applicable law.

          (b) Short Term Incentive Compensation. During the Term, as determined by the Board
(or the Compensation Committee) in its sole discretion, Employee shall be eligible to receive an
annual short term incentive compensation payment (an “STI Payment”) for each calendar year pursuant
to the Company’s short term incentive plan then in effect (the “STI Plan”). Pursuant to the terms
of the STI Plan, each annual STI Payment shall be payable based on the achievement of performance
targets. Initially, Employee’s target STI Payment shall be equal to 85% (the “Target STI
Percentage”) of Employee’s annual Base Salary (the “Target STI Amount”). The Target STI Percentage
may be increased (but not decreased below the initial Target STI Percentage stated above without
Employee’s written consent or pursuant to a decrease broadly applied to all similarly situated
employees) in its sole discretion. The STI Payment shall be subject to increase or decrease based
on achievement of performance targets and in accordance with the terms of the STI Plan. For each
calendar year in the Term, the Board (or the Compensation Committee) will determine and will
establish in writing (i) the Target STI Amount, (ii) the applicable performance targets, (iii) the
percentage of annual Base Salary payable to Employee if some lesser or greater percentage of the
annual performance target is achieved, and (iv) such other applicable terms and conditions of the
STI Plan necessary to satisfy the requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”).

          (c) Long Term Incentive Compensation. During the Term, as determined by the Board
(or the Compensation Committee) in its sole discretion, Employee shall be eligible to receive
annual grants of equity or equity-related awards (an “LTI Grant”) pursuant to the Company’s 2009
Performance Incentive Plan or any other long-term incentive plan(s) in effect

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from time to
time, subject to the terms and conditions thereof. Initially, Employee’s target LTI Grant
shall have a value (as determined by the Board in its reasonable discretion) equal to 300% (“Target
LTI Percentage”) of Employee’s annual Base Salary (the “Target LTI Amount”). The Target LTI Amount
may be increased (but not decreased below the initial Target LTI Percentage stated above without
Employee’s written consent or pursuant to a decrease broadly applied to all similarly situated
employees) by the Board (or the Compensation Committee) in its sole discretion. Any grants
previously awarded to Employee pursuant to the Company’s 2009 Performance Incentive Plan that are
outstanding on the Effective Date hereof shall continue to be governed by the terms and conditions
of such plan and award agreements, subject to any vesting modifications made herein.

          (d) Employee Benefits. During the Term, Employee will be entitled to receive such
welfare benefits and other fringe benefits (including, but not limited to vacation, medical,
dental, life insurance, 401(k) and other employee benefits and perquisites) as the Company may
offer from time to time to similarly situated executive level employees, subject to applicable
eligibility requirements. The Company shall not, however, by reason of this Section 3(d), be
obligated to refrain from changing, amending, or discontinuing any such benefit plan or program, on
a prospective basis, so long as any such changes are similarly applicable to similarly situated
employees of the Company.

          (e) Business Expenses. The Company shall reimburse Employee for all reasonable
expenses incurred by him in the course of performing his duties during the Term to the extent
consistent with the Company’s written policies in effect from time to time with respect to travel,
entertainment and other business expenses and subject to the Company’s requirements with respect to
reporting and documentation of such expenses (“Business Expenses”).

          (f) Leave of Absence Due to Disability. Employee shall be entitled to a paid
leave of absence of up to 180 days in the event of Disability where there is a reasonable
expectation that the Employee will return to his duties with Employer, provided that the Company
may offset the payment of Employee’s Base Salary then in effect by the amount of any short-term or
long-term Company-paid disability benefits Employee receives pursuant to Section 3(d) above. For
purposes of this Agreement, “Disability” means Employee’s inability to perform the duties of
Employee’s position, with or without reasonable accommodation, due to a physical or mental
impairment that is expected to last for more than 30 days. The existence of any such Disability
shall be certified by a physician acceptable to both the Company and Employee. If the parties are
not able to agree on the choice of a physician, each party shall select a physician who, in turn,
shall select a third physician to render such certification.

4. Termination of Employment. Unless otherwise agreed to in writing by the Company
and Employee, Employee’s employment hereunder may be terminated under the following circumstances:

          (a) Death. Employee’s employment hereunder shall terminate upon his death.

          (b) Disability. Employee’s employment may be terminated by the Company or
Employee may terminate his employment with the Company, if Employee has incurred a

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Disability; provided, however, that if Employee is on a leave of absence due to Disability
under Section 3.1(f), the Company may not terminate Employee and Employee may not terminate his
Employment due to Disability pursuant to this Section 4(b) before the 180th consecutive
day of paid leave due to Disability has elapsed. No termination of employment due to Disability
shall have occurred unless the Employer or Employee has given the other party at least 30 days
written notice pursuant to Section 5(f).

          (c) Termination by the Company. The Company may terminate Employee’s employment
with or without Cause. For purposes of this Agreement, the term “Cause” means (i) Employee’s
conviction of, or plea of guilty or nolo contendere to, any felony or to any crime or offense
causing substantial harm to the Company or its affiliates or involving acts of theft, fraud,
embezzlement, moral turpitude or similar conduct; (ii) Employee’s repeated intoxication by alcohol
or drugs during the performance of Employee’s duties in a manner that materially and adversely
affects Employee’s performance of such duties; (iii) malfeasance in the conduct of Employee’s
duties, including, but not limited to, (A) willful and intentional misuse or diversion of funds or
assets of the Company or its affiliates, (B) embezzlement, or (C) fraudulent or willful and
material misrepresentations or concealments on any written reports submitted to the Company or its
affiliates; (iv) Employee’s material violation of any provision of a material written agreement
between Employee and the Company that remains uncured for a period of 30 days after notice thereof;
or (v) Employee’s material failure to perform the duties of Employee’s employment or material
failure to follow or comply with the reasonable and lawful written directives of the Board or
Employee’s supervisor or superior, in either case after Employee shall have been informed, in
writing, of such material failure and given a period of not less than 60 days to remedy same.
Prior to any termination for Cause, the Company shall be entitled to suspend Employee with pay and
terminate all access to the premises and databases of the Company during any investigation of any
of the circumstances described above.

          (d) Termination by Employee. Employee may, upon giving the Company no less than 30
days’ advance written notice, resign and terminate Employee’s employment without Good Reason or for
Good Reason (as defined in Section 6(e) below). The Company may in its sole discretion, elect to
waive all or any part of the 30-day notice period.

5. Compensation Upon Termination in Absence of Change in Control.

          (a) Without Cause or For Good Reason. In the event Employee’s employment is
terminated by the Company without Cause or by Employee for Good Reason (but in the absence of a
Change in Control which shall be governed under Section 6), the Company shall pay to Employee (i)
any unpaid portion of the Base Salary through the Termination Date at the rate then in effect, (ii)
any earned but yet unpaid STI Payment for the calendar year prior to the Termination Date, (iii)
any unreimbursed Business Expenses through the Termination Date, and (iv) such employee benefits,
if any, as to which Employee may be entitled pursuant to the terms governing such benefits. The
amounts, if any, set forth in (i), (ii), (iii), and (iv) shall be collectively referred to herein
as the “Accrued Payments”. In addition, and contingent upon Employee satisfying the Severance
Conditions (as defined below), the Company shall also provide the following payments and other
benefits (the “Severance Package”):

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     (i) Payment of an amount equal to the equivalent of twenty-one months of Employee’s
Base Salary as of the Termination Date, payable in substantially equal monthly installments
over a period of twenty one (21) months beginning on the first payroll date which occurs in
the first month following the Termination Date; plus

     (ii) Payment of an amount equal to 1.75 times the Target STI Payment, calculated
based on Employee’s Base Salary in effect on the Termination Date, payable in substantially
equal monthly installments over a period of twenty one (21) months beginning on the first
payroll date which occurs in the first month following the Termination Date; plus

     (iii) Payment of an amount equal to a pro-rata portion of the STI Payment that
Employee would have been entitled to receive pursuant to Section 3(b) hereof for the
calendar year of termination, multiplied by a fraction, the numerator of which is the number
of days during which Employee was employed by the Company in the calendar year of Employee’s
termination, and the denominator of which is 365 (the “Pro-Rata Bonus”), payable as soon as
administratively feasible following preparation of the Company’s audited financial
statements for the applicable calendar year, but in no event later than March 31 (or earlier
than January 1) of the calendar year following the calendar year to which such STI Payment
relates; plus

     (iv) Pay or reimburse on a monthly basis the premiums required to continue
Employee’s group health care coverage for a period of eighteen (18) months following
Employee’s Termination Date, under the applicable provisions of the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“COBRA”), provided that Employee or his dependents, as
applicable, elect to continue and remain eligible for these benefits under COBRA. If
necessary to avoid inclusion in taxable income by Employee of the value of in-kind benefits,
such health care continuation premiums shall be provided in the form of taxable payments to
Employee, which payments shall be made without regard to whether Employee elects to continue
and remain eligible for such benefits under COBRA, and in which event Company shall pay to
Employee, with each monthly reimbursement, an additional amount of cash equal to A/(1-R)-A,
where A is the amount of the reimbursement for the month, and R is the sum of the maximum
federal individual income tax rate then applicable to ordinary income and the maximum
individual Colorado income tax rate then applicable to ordinary income.

To receive the Severance Package, (i) Employee must execute and return to the Company on or prior
to the 30th day following the Termination Date a waiver and release of claims agreement in the
Company’s customary form (which may be amended by the Company to reflect changes in applicable laws
and regulations), which shall exclude claims by the Employee for indemnification, claims for
coverage under officer and director policies, and claims as a stockholder of the Company (the
“Release”), and where contemplated by applicable law, not timely revoke such Release, and (ii) must
comply in all material respects with the covenants in Sections 8 and 10 of this Agreement
(together, the “Severance Conditions”). No payment of any part of a Severance Package or Change in
Control Severance Package, or pursuant to Section 5(d), shall be made unless the Employee (or
Employee’s estate) has complied with the Severance

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Conditions. If Employee (or Employee’s estate) has complied with the Severance Conditions, then
any payment that would have become payable prior to the execution of the Release and the end of the
revocation period shall be made at the expiration of the 30 day period.

          (b) Resignation. In the event Employee’s employment is terminated by Employee
other than for Good Reason (but in the absence of a Change in Control which shall be governed under
Section 6), the Company shall pay to Employee (i) any unpaid portion of the Base Salary through the
Termination Date at the rate then in effect, (ii) any unreimbursed Business Expenses through the
Termination Date, and (iii) such employee benefits, if any, as to which Employee may be entitled
pursuant to the terms governing such benefits. Employee shall not be eligible to receive any STI
Payment for the calendar year prior to the Termination Date nor any Pro-Rata Bonus for the year in
which the Termination Date occurs.

          (c) For Cause. In the event Employee’s employment is terminated by the Company
for Cause, the Company shall pay to Employee (i) any unpaid portion of the Base Salary through the
Termination Date at the rate then in effect, (ii) any unreimbursed Business Expenses through the
Termination Date, and (iii) such employee benefits, if any, as to which Employee may be entitled
pursuant to the terms governing such benefits. Employee shall not be eligible to receive any STI
Payment for the calendar year prior to the Termination Date nor any Pro-Rata Bonus for the year in
which the Termination Date occurs.

          (d) Death or Disability. In the event Employee’s employment terminates by reason
of his death, or either party terminates Employee’s employment due to Disability pursuant to
Section 4(b), the Company shall pay to Employee the Accrued Payments. In addition, and contingent
upon Employee (or Employee’s estate) satisfying the Severance Conditions, the Company shall also
provide the Employee (or Employee’s estate) the following payments and other benefits:

     (i) Payment of an amount equal to twenty-one (21) months of Employee’s Base Salary
as of the Termination Date, payable in a lump sum on the 30th day following the
Termination Date; plus

     (ii) Payment of an amount equal to 1.75 times the Target STI Payment, calculated
based on Employee’s Base Salary in effect on the Termination Date, payable in a lump sum on
the 30th day following the Termination Date; plus

     (iii) Payment of a Pro-Rata Bonus for the calendar year of termination, payable as
soon as administratively feasible following preparation of the Company’s audited financial
statements for the applicable calendar year, but in no event later than March 31 (or earlier
that January 1) of the calendar year following the calendar year to which such STI Payment
relates; plus

     (iv) Payment or reimbursement on a monthly basis of the premiums required to
continue Employee’s group health care coverage for a period of eighteen (18) months
following Employee’s Termination Date, under the applicable provisions of COBRA, provided
that Employee or his dependents, as applicable, elect to continue and remain

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eligible for these benefits under COBRA. If necessary to avoid inclusion in taxable
income by Employee of the value of in-kind benefits, such health care continuation premiums
shall be provided in the form of taxable payments to Employee, which payments shall be made
without regard to whether Employee elects to continue and remain eligible for such benefits
under COBRA, and in which event Company shall pay to Employee, with each monthly
reimbursement, an additional amount of cash equal to A/(1-R)-A, where A is the amount of the
reimbursement for the month, and R is the sum of the maximum federal individual income tax
rate then applicable to ordinary income and the maximum individual Colorado income tax rate
then applicable to ordinary income.

          (e) Exclusive Compensation and Benefits. The compensation and benefits described
in this Section 5 or in Section 6, as applicable, along with the associated terms for payment,
constitute all of the Company’s obligations to Employee with respect to the termination of
Employee’s employment. Nothing in this Agreement, however, is intended to limit any vested
benefits that Employee may have under the applicable provisions of any benefit plan of the Company
in which Employee is participating on the Termination Date, any rights Employee may have to
continue or convert coverage under certain employee benefit plans in accordance with the terms of
those plans and applicable law, or any rights Employee may have under long-term incentive or equity
compensation plan.

          (f) Notice of Termination. Any termination of Employee’s employment shall be
communicated to the other party by written notice that (i) indicates the specific termination
provisions of this Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for the termination (provided that an explanation shall
not be required in the event of a resignation unless the Employee is resigning for Good Reason),
and (iii) specifies the Termination Date (a “Notice of Termination”).

          (g) Termination Date. For purposes of this Agreement, “Termination Date” means the
date of receipt of the Notice of Termination or any later date specified therein or required by
this Agreement, as the case may be; provided, however that if Employee’s employment is terminated
by reason of his death, the Termination Date shall be the date of death of Employee.

          (h) Deemed Resignations. Unless otherwise agreed to in writing by the Company and
Employee prior to termination of Employee’s employment hereunder, any termination of Employee’s
employment shall constitute an automatic immediate resignation of Employee from all positions he
then holds as an employee, officer, director, manager or other service provider of the Company and
each Subsidiary.

          (i) Application of Section 409A. This Agreement is intended to comply with Code
Section 409A and the Treasury Regulations promulgated thereunder (“Section 409A”) and shall be
construed accordingly. It is the intention of the parties that payments or benefits payable under
this Agreement not be subject to the additional tax or interest imposed pursuant to Section 409A.
To the extent such potential payments or benefits are or could become subject to Section 409A, the
Parties shall cooperate to amend this Agreement with the goal of giving Employee the economic
benefits described herein in a manner that does not result in such tax or interest being

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imposed. Notwithstanding anything in this Agreement to the contrary, the following provisions
shall apply.

          For purposes of this Agreement, whenever and to the extent that it would be necessary to
comply with the requirements of Section 409A, Employee’s employment will be treated as terminating
when and only when Executive experiences a Separation from Service. For purposes of this
Agreement, the term “Separation from Service” means when Executive dies, retires or otherwise has a
termination of employment from the Company that constitutes a “separation from service” within the
meaning of Treasury Regulation Section 1.409A-1(h).

          If a payment that could be made under this Agreement would be subject to additional taxes and
interest under Section 409A, the Company in its sole discretion may accelerate some or all of a
payment otherwise payable under the Agreement to the time at which such amount is includible in the
income of Employee, provided that such acceleration shall only be permitted to the extent permitted
under Treasury Regulation Section 1.409A-3(j)(4)(vii) and the amount of such acceleration does not
exceed the amount permitted under Treasury Regulation Section 1.409A-3(j)(vii).

          No payment to be made under this Agreement shall be made at a time earlier than that provided
for in this Agreement unless such payment is (i) an acceleration of payment permitted to be made
under Treasury Regulation Section 1.409A-3(j)(4) or (ii) a payment that would otherwise not be
subject to additional taxes and interest under Section 409A. Each payment of benefits pursuant to
Sections 5 or 6 shall be a separate payment to the maximum extent permitted by Section 409A.

          The portion of any payment under this Agreement that would constitute a “short-term deferral”
within the meaning of Treasury Regulation Section 1.409A-1(b)(4),would meet the requirements for
separation pay due to involuntary separation from service under Treasury Regulation Section
1.409A-1(b)(9)(iii), or would otherwise be exempt from Section 409A shall be treated as a
separately identified and determinable amount for purposes of Section 409A.

          In the event that the Company becomes subject to the sanctions imposed pursuant to Section
2716 of the Public Health Service Act by reason of this Agreement, the parties shall cooperate to
amend this Agreement with the goal of giving Executive the economic benefits described herein in a
manner that does not result in such sanctions being imposed.

          Notwithstanding any other provision in this Agreement, if (i) Employee is a “specified
employee” on the date of the Employees “separation from service” within the meaning of Code
Sections 409A(a)(2)(A)(i) and 409A(a)(2)(B)(i), and (ii) as a result of such separation from
service the Employee would receive any payment that, absent the application of this paragraph,
would be subject to the interest and additional tax imposed pursuant to Code Section 409A(a) as a
result of the application of Code Section 409A(a)(2)(B)(i), then such payment shall be made on the
date that is the earliest of: (A) the first day following the day that is 6 months after the
Employee ‘s separation from service, (B) the Employee’s date of death, or (C) such other date on
which such payment will not be subject to such interest and additional tax.

          Notwithstanding any other provision in this Agreement, if the terms of payment of any

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payment of all or a portion of a Severance Package or a Change in Control Severance Package
would cause any amount to be subject to the additional tax or interest imposed pursuant to Section
409A by reason of Treasury Regulations Sections 1.409A-3(a) or (c), such payment shall be made, if
at all, in a lump sum on the 30th day following the Termination Date or, if the
preceding paragraph is applicable to Employee, upon the earliest date permitted under such
preceding paragraph.

6. Change in Control.

          (a) Vesting of Equity Awards. If, in connection with a Change in Control (as
defined in Section 6(d) below), the vesting of outstanding equity awards is accelerated under the
terms of the Company’s 2009 Performance Incentive Plan or any other long-term incentive plan(s)
then in effect, then the vesting of any outstanding equity awards held by Employee shall also be
accelerated. If the vesting of outstanding equity awards is not accelerated or only partially
accelerated in connection with the Change in Control under the terms of the Company’s 2009
Performance Incentive Plan or any other long-term incentive plan(s) then in effect, then the
following terms shall apply following the Change in Control with respect to the remaining unvested
equity awards held by Employee:

     (i) Any performance-based equity awards held by Employee shall immediately vest to
the extent that the stock price target or other performance thresholds applicable to such
awards are met in the Change in Control transaction, as determined by the Board in its
reasonable discretion. Any performance-based equity awards held by Employee that are not
vested under the preceding sentence shall be automatically converted to time-based equity
awards in equal one-third proportions and the vesting of those awards shall be amended such
that those awards shall vest over Employee’s next three regularly scheduled vesting dates.

     (ii) All equity awards held by Employee that remain unvested following application
of the foregoing provisions of this Section 6(a) shall vest on the established vesting date
of such equity awards; provided however, that in the event of a termination of Employee’s
employment by the Company (or its successor) for any reason other than for Cause, or a
termination of Employee’s employment by Employee for Good Reason, within two years following
a Change in Control, such unvested equity awards shall immediately and automatically vest in
full and, in the case of options or other exercisable equity awards, shall remain
exercisable for two years following such termination of employment.

In addition, if Employee’s employment was terminated (A) by the Company for any reason other than
for Cause or (B) by Employee for Good Reason within the six months prior to the occurrence of a
Change in Control, then Employee shall be treated for purposes of this Section 6(a) as if he
continued to be employed through the date of the Change in Control and the termination of his
Employment occurred immediately following the Change in Control.

     (b) Severance Benefits. In addition, if a Change in Control Severance
Payment Event (as defined below) occurs, then the Company shall pay to Employee the Accrued
Payments, and

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contingent upon Employee satisfying the Severance Conditions, the Company shall also provide
Employee the following payments and other benefits (the “Change in Control Severance Package”):

     (i) Payment of an amount equal to 2.5 times the sum of (i) Employee’s annual rate
of Base Salary as of the Termination Date or as of the date of the Change in Control,
whichever is greater, plus (ii) Employee’s Target STI Payment, calculated based on
Employee’s Base Salary as of the Termination Date or, if greater, as of the date of the
Change in Control, payable to Employee on the 30th day following the Termination
Date in a lump sum payment; plus

     (ii) Payment of a Pro-Rata Bonus for the calendar year of termination, payable as
soon as administratively feasible following preparation of the Company’s audited financial
statements for the applicable calendar year, but in no event later than March 31 (or earlier
than January 1) of the calendar year following the calendar year to which such STI Payment
relates; and

     (iii) The Company shall pay or reimburse on a monthly basis the premiums required
to continue Employee’s group health care coverage for a period of eighteen (18) months
following Employee’s Termination Date, under the applicable provisions of COBRA, provided
that Employee or his dependents, as applicable, elect to continue and remain eligible for
these benefits under COBRA. If necessary to avoid inclusion in taxable income by Employee of
the value of in-kind benefits, such health care continuation premiums shall be provided in
the form of taxable payments to Employee, which payments shall be made without regard to
whether Employee elects to continue and remain eligible for such benefits under COBRA, and
in which event Company shall pay to Employee, with each monthly reimbursement, an additional
amount of cash equal to A/(1-R)-A, where A is the amount of the reimbursement for the month,
and R is the sum of the maximum federal individual income tax rate then applicable to
ordinary income and the maximum individual Colorado income tax rate then applicable to
ordinary income;

     (iv) Provided, however, that the sum of (i) and (ii) above shall be reduced, but
not below zero, by the sum of any actually benefits provided to Employee pursuant to Section
5(a)(i), (ii), or (iii) and any payments otherwise required pursuant to Section 5(a)(i),
(ii), and (iii) shall not be made.

Nothing in this Section 6 shall relieve the Company or any successor-in-interest thereof of its
obligation to continue, following any Change in Control, to provide Employee with the compensation
due pursuant to Section 3 of this Agreement or to otherwise comply with its obligations hereunder
in the event Employee’s service continues pursuant to this Agreement following the occurrence of
such Change in Control.

          A “Change in Control Severance Payment Event” shall mean (i) termination of Employee’s
employment by the Company (or its successor) for any reason other than for Cause, or a termination
of Employee’s employment by Employee for Good Reason, within two years

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following a Change in Control or (ii) a Change in Control that occurs within six months after a
termination of Employee’s employment by the Company for any reason other than for Cause or a
termination of Employee’s employment by Employee for Good Reason; provided, however, that in no
event shall a termination due to Disability pursuant to Section 4(b) be Change in Control Severance
Event.

          (c) (i) If any of the payments or benefits received or to be received by Employee in
connection with Employee’s termination of employment in respect of a Change in Control, whether
pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the
Company (all such payments and benefits, being hereinafter referred to as the “Total Payments”)
would be subject to the excise tax (the “Excise Tax”) imposed under Code Section 4999, Employee
shall receive the Total Payments from the Company and be responsible for the Excise Tax; provided,
however that Employee shall not receive the Total Payments and the Total Payments shall be reduced
to the Safe Harbor amount if (1) the net amount of such Total Payments, as so reduced (and after
subtracting the net amount of federal, state and local income taxes on such reduced Total Payments)
is greater than or equal to (2) the net amount of such Total Payment without such reduction (but
after subtracting the net amount of federal, state and local income taxes on such Total Payments
and the amount of Excise Tax to which Employee would be subject in respect of such unreduced Total
Payments). The “Safe Harbor Amount” is the amount to which the Total Payments would hypothetically
have to be reduced so that no portion of the Total Payments would be subject to the Excise Tax.

               (ii) For purposes of determining whether any of the Total Payments will be subject to the
Excise Tax and the amount of such Excise Tax, (1) all of the Total Payments shall be treated as
“parachute payments” (within the meaning of Code Section 280G(b)(2)) unless, in the opinion of an
independent accounting firm selected by the Company (the “Auditor”), such payments or benefits (in
whole or in part) do not constitute parachute payments, including by reason of Code Section
280G(b)(4)(A), (2) all “excess parachute payments” within the meaning of Code Section 280G(b)(1)
shall be treated as subject to the Excise Tax unless, in the opinion of the Auditor, such excess
parachute payments (in whole or in part) represent reasonable compensation for services actually
rendered (within the meaning of Code Section 280G(b)(4)(B)) in excess of the base amount (within
the meaning of Code Section 280G(b)(3)) allocable to such reasonable compensation, or are otherwise
not subject to the Excise Tax, and (3) the value of any noncash benefits or any deferred payment or
benefit shall be determined by the Auditor in accordance with the principles of Code Sections
280G(d)(3) and (4). If the Auditor is prohibited by applicable law or regulation from performing
the duties assigned to it hereunder, then a different auditor, acceptable to both the Company and
Employee, shall be selected. The fees and expenses of the Auditor shall be paid by the Company.

               (iii) In the event it is determined that the Safe Harbor amount is payable to Employee,
unless Employee shall have given prior written notice to the Company specifying a different order
of reductions, the cash payments provided under Section 6 shall first be reduced on a pro rata
basis until the Safe Harbor amount is reached. In the event further reduction is needed to reach
the Safe Harbor amount after reducing all cash payments to zero, the non-cash severance payments
shall thereafter be reduced on a pro rata basis to the extent necessary so that no portion of the
Total Payments is subject to the Excise Tax; provided, however, that no

11

 

payment shall be reduced unless it is determined to be contingent on a change in the ownership or
effective control of the Company or in the ownership of a substantial portion of the assets of the
Company. Employee may specify the order of reduction of the payments only to the extent that doing
so does not directly or indirectly alter the time or form of payment of any amount that is deferred
compensation subject to (and not exempt from) Section 409A.

               (iv) At the time of the initial determination by the Auditor hereunder, it is possible
that Payments will have been made by the Company which should not have been made (an “Overpayment”)
or that an amount which will not have been made by the Company could have been made (an
“Underpayment”), in each case, consistent with the calculations required to be made hereunder. In
the event that the Auditor, based upon the assertion of a deficiency by the Internal Revenue
Service against Employee that the Auditor believes has a high probability of success, determines an
Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the
benefit of Employee shall be repaid by Employee to the Company together with interest at the
applicable Federal rate provided in Code Section 7872(f)(2); provided, however, that no amount
shall be payable by Employee to the Company if and to the extent such deemed payment would not
either reduce the amount on which Employee is subject to tax under Code Section 61 and Code Section
4999 or generate a refund of such taxes. In the event that the Auditor, based upon controlling
precedent or other substantial authority, determines that an Underpayment has occurred, any such
Underpayment shall be promptly paid by the Company to or for the benefit of Employee together with
interest at the applicable Federal rate provided in Code Section 7872(f)(2); provided further that
any such Underpayment shall constitute a payment (within the meaning of Treasury Regulation Section
1.409A-2(b)(2)) separate and apart from the Total Payments; and provided, further that any such
Underpayment shall be deemed a disputed payment (within the meaning of Treasury Regulation Section
1.409A-3(g)) and shall be made no later than the end of the first taxable year of the Company in
which the Auditor determines pursuant to this Section 6(c)(iv) that such Underpayment is due.

               (v) This Section 6(c) shall be interpreted, to the maximum extent possible, so as to avoid
the imposition of excise taxes on Employee under Code Section 4999 or the disallowance of a
deduction to the Company pursuant to Code Section 280G(a) with respect to any amount payable, or to
be provided, under this Agreement.

(d) For the purposes of this Agreement, “Change in Control” shall mean:

     (i) an acquisition in one or series of related transactions of the beneficial
ownership of 40% of the Company’s outstanding voting stock by any person or group, unless
the stock is acquired (a) by the Company or its Subsidiaries, (b) directly from the Company,
(c) by an entity in a Business Combination (as defined below) that otherwise does not
constitute a Change in Control, or (d) by an employee benefit plan (or related trust)
sponsored by the Company or its Subsidiaries;

     (ii) the liquidation, dissolution or winding-up of the Company;

     (iii) a reorganization, merger or consolidation of the Company or a sale
or other disposition of all or substantially all of the company’s assets (a “Business

12

 

Combination”), immediately following which individuals who constitute the incumbent
board cease to constitute at least a majority of the governing body of the surviving entity;
or

     (iv) a majority of the members of the Board of the Company is replaced during any
12-month period by directors whose appointment or election is not endorsed or recommended by
a majority of the members of the Board prior to the date of the appointment or election.

          (e) For purposes of this Agreement, the term “Good Reason” shall mean, without the express
written consent of Employee, the occurrence of one of the following arising on or after the
Effective Date, as determined in a manner consistent with Treasury Regulation Section
1.409A-1(n)(2)(ii): (i) a material reduction in Employee’s Base Salary, Target STI Percentage or
Target LTI Percentage, (ii) a material diminution in Employee’s authority, duties, title or
responsibilities, (iii) a permanent relocation in the geographic location at which Employee must
perform services to a location more than 50 miles from the location at which Employee normally
performed services immediately before the relocation; or (iv) any other action or inaction that
constitutes a material breach by the Company of this Agreement or any material written agreement
between the Company and Employee. Neither a transfer of employment among the Company and any of
its Subsidiaries nor the Company or a Subsidiary entering into or discontinuing a co-employer
relationship with a personnel services organization constitutes Good Reason. In the case of
Employee’s allegation of Good Reason, (i) Employee shall provide notice to the Company of the event
alleged to constitute Good Reason within 60 days after the initial occurrence of such event, and
(ii) the Company shall have the opportunity to remedy the alleged Good Reason event within 30 days
from receipt of notice of such allegation (the “Cure Period”). If not remedied within the Cure
Period, Employee may submit a Notice of Termination pursuant to Section 5(e), provided that the
Notice of Termination must be given no later than 90 days after the expiration of the Cure Period;
otherwise, Employee is deemed to have accepted such event, or the Company’s remedy of such event,
that may have given rise to the existence of Good Reason; provided, however, such acceptance shall
be limited to the occurrence of such event and shall not waive Employee’s right to claim Good
Reason with respect to future similar or other events.

7. Business Opportunities and Intellectual Property.

          (a) Employee represents that he has disclosed to the Company all Business Opportunities
and Intellectual Property (as defined below) that exist on the date hereof. Employee agrees to
promptly disclose to the Company all Business Opportunities and Intellectual Property that become
such during the Term or the Post Termination Non-Compete Term.

          (b) Except with respect to the properties identified on the Disclosure Schedule
(“Disclosed Assets”) attached to the Confidentiality and Non-Compete Agreement previously executed
by Employee, Employee hereby assigns and agrees to assign to the Company, its successors, assigns,
or designees, all of Employee’s right, title, and interest in and to all Business Opportunities and
Intellectual Property that exist on the date hereof or become such during the

13

 

Term, and further acknowledges and agrees that all Business Opportunities and Intellectual
Property that exist on the date hereof or become such during the Term constitute the exclusive
property of the Company.

          (c) For purposes hereof, “Business Opportunities” shall mean all business ideas,
prospects, proposals and other opportunities pertaining to the lease, acquisition, exploration,
production, gathering or marketing of hydrocarbons and related products and the exploration
potential of geographical areas on which hydrocarbon exploration prospects are located, that are:

     (i) developed by Employee: (A) during the period that Employee is employed by the
Company or any of its Subsidiaries, or (B) before the date hereof, if such opportunities
were developed in connection with (I) assets that have been sold or contributed to the
Company by Employee, or (II) Employee’s activities in the oil and gas industry, and are
directly or indirectly related to the Company’s properties or assets acquired during the
period that Employee is employed by the Company or any of its Subsidiaries; and

     (ii) originated by any third parties and brought to the attention of Employee,
whether before or during the Term, except to the extent that (A) such opportunities are not
applicable, directly or indirectly, to any of the Company’s properties or assets acquired
during the period that Employee is employed by the Company or any of its Subsidiaries, and
(B) third parties possess valid and enforceable rights to such opportunities;

together with information relating thereto, including, without limitation, the Business Records (as
defined below).

          (d) For purposes of this Agreement, “Intellectual Property” shall mean all ideas,
inventions, discoveries, processes, designs, methods, substances, articles, computer programs, and
improvements (including, without limitation, enhancements to, or further interpretation or
processing of, information that was in the possession of Employee prior to the date of this
Agreement), whether or not patentable or copyrightable, which do not fall within the definition of
Business Opportunities, and which are discovered, conceived, invented, created, or developed by
Employee, alone or with others if such discovery, conception, invention, creation, or development
(i) occurs in the course of Employee’s employment with the Company, or (ii) occurs with the
substantial use of the Company’s time, materials, assets or facilities (including assets sold or
contributed to the Company by Employee), or (iii) in the opinion of at least a majority of the
Board, relates or pertains in any way to the Company’s properties or assets acquired during the
period that Employee is employed by the Company or any of its Subsidiaries, except to the extent
that any third party possesses a valid and enforceable right to such Intellectual Property.

8. Confidentiality Obligations.

          (a) Employee hereby acknowledges that all trade secrets and confidential or proprietary
information of the Company (collectively referred to herein as “Confidential

14

 

Information”) constitute valuable, special and unique assets of the Company’s business, and
that access to and knowledge of such Confidential Information is essential to the performance of
Employee’s duties. Employee agrees that during the Term and during the twenty-four (24) month
period following the Termination Date, Employee will hold the Confidential Information in strict
confidence and will not publish, disseminate or otherwise disclose, directly or indirectly, to any
person other than the Company and its officers, directors and employees, any Confidential
Information or use any Confidential Information for Employee’s own personal benefit or for the
benefit of anyone other than the Company. The Company agrees to provide Confidential Information
to Employee in exchange for Employee’s agreement to keep such Confidential Information, and any
Confidential Information to which Employee has already become privy, in strict confidence as
provided in this Agreement.

          (b) For purposes of this Section 8, it is agreed that Confidential Information includes,
without limitation, any information heretofore or hereafter acquired, developed or used by the
Company relating to Business Opportunities or Intellectual Property or other geological,
geophysical, economic, financial or management aspects of the business, operations, properties or
prospects of the Company whether oral or in written form, whether or not included in the Company’s
Business Records, but shall exclude any information which (A) is or has become part of common
knowledge or understanding in the oil and gas industry or otherwise in the public domain (other
than from disclosure by Employee in violation of this Agreement or any other confidentiality
agreement with the Company); (B) was rightfully in the possession of Employee, as shown by
Employee’s records, prior to the date of this Agreement and which is not directly applicable to the
business of the Company or any of its properties or assets; (C) is lawfully acquired by Employee
after the Term from any third party not bound by an obligation of confidence to the disclosing
party; or (D) is independently developed by or for Employee after the Term without using the
Confidential Information of the Company; provided, however, that Employee shall provide to the
Company copies of all information described in clause (B) to the extent reasonably requested by the
Company. Notwithstanding the foregoing, this Section 8 shall not be applicable to the extent (1)
Employee is required to testify in a judicial or regulatory proceeding pursuant to the order of a
judge or administrative law judge after Employee requests that such Confidential Information be
preserved, or (2) Employee receives a valid and effective subpoena, interrogatory or other legally
enforceable request for information in connection with a judicial process; provided, however, that
if and when such a disclosure is required pursuant to clause (1) or (2) above, Employee shall
promptly provide the Company with notice of such requirement, so that the Company may (x) seek a
protective order or other remedy (including, without limitation, participation in any proceeding),
or (y) waive compliance with the terms of this Agreement in the Company’s sole discretion (but such
waiver will be limited to the Confidential Information required to be disclosed). Employee shall
be entitled to furnish only such Confidential Information as Employee is advised by legal counsel
that he is legally required to disclose and will use commercially reasonable efforts to obtain
confidential treatment of any and all Confidential Information disclosed.

          (c) Employee agrees to promptly deliver to the Company, upon termination of Employee’s
employment with the Company, or at any other later time when the Company so requests, all documents
and electronic data in existence on the Termination Date relating to the business of the Company,
including, without limitation: all geological and geophysical reports

15

 

and related data such as maps, charts, logs, seismographs, seismic records and other reports
and related data, calculations, summaries, memoranda and opinions relating to the foregoing,
production records, electric logs, core data, pressure data, lease files, well files and records,
land files, abstracts, title opinions, title or curative matters, contract files, notes, records,
drawings, manuals, correspondence, financial and accounting information, customer lists,
statistical data and compilations, patents, copyrights, trademarks, trade names, inventions,
formulae, methods, processes, agreements, contracts, manuals or any other documents relating to the
business of the Company (collectively, the “Business Records”), and all copies thereof and
therefrom that are in the possession or under the control of Employee.

          (d) Employee confirms that all of the Business Records (and all copies thereof and
therefrom) that are required to be delivered to the Company pursuant to this Section 8 constitute
the exclusive property of the Company.

          (e) The obligation of confidentiality set forth in this Section 8 shall continue
notwithstanding Employee’s delivery of any Business Records to the Company. The provisions of this
Section 8 shall continue in effect notwithstanding termination of Employee’s employment for any
reason.

          (f) Notwithstanding the foregoing provisions of this Section 8 or any other provision of
this Agreement, Employee shall be entitled to retain any written materials which, as shown by
Employee’s records, were in Employee’s possession on or prior to the date Employee was employed by
the Company or any of its predecessors, subject to the Company’s right to receive a copy of such
materials or, in lieu thereof, proof that such materials were in existence on the date hereof.

9. Non-Compete Obligations During Employment Term.

          (a) Except as set forth in subsection (b) of this Section 9 and in the Disclosure
Schedule, Employee agrees that during the Term:

     (i) Employee will not, other than through the Company, engage or participate in any
manner, whether directly or indirectly through any Family Member or as an employee,
employer, consultant, agent, principal, partner, more than five percent equity-holder,
officer, director, licensor, lender, lessor or in any other individual or representative
capacity, in any business or activity which is engaged in leasing, acquiring, exploring,
producing, gathering or marketing hydrocarbons and related products; and

     (ii) all investments made by Employee (whether in Employee’s own name or in the
name of any Family Members or made by any Controlled Affiliates, as defined below), which
relate to the lease, acquisition, exploration, production, gathering or marketing of
hydrocarbons and related products shall be made solely through the Company; and Employee
will not (directly or indirectly through any Family Members), and will not permit any
Controlled Affiliate to: (A) invest or otherwise participate alongside the Company in any
Business Opportunities, or (B) invest or otherwise

16

 

participate in any business or activity relating to a Business Opportunity, regardless
of whether the Company ultimately participates in such business or activity.

For purposes hereof, “Controlled Affiliates” are entities in which Employee and Employee’s
Family Members collectively own, directly or indirectly, a majority of the equity or voting
interests. The restrictions of this Section 9(a) do not apply to purely passive investments
in companies in the energy industry provided such investments do not exceed five percent of
the outstanding equity securities of the applicable company.

          (b) Employee represents that neither Employee nor his Controlled Affiliates or his “Family
Members” (defined as Employee’s spouse and minor children living in Employee’s household) own any
investments or interests which relate to the lease, acquisition, exploration, production, gathering
or marketing of hydrocarbons and related products, other than Employee’s interest in the Disclosed
Assets. This paragraph shall not apply to, and Employee shall be entitled to hold and acquire
purely passive investments in companies in the energy industry provided such investments do not
exceed five percent of the outstanding equity securities of the applicable company.

10. Obligations After Termination Date.

          (a) The purposes of the provisions of Section 8 and this Section 10 are to protect the
Company from unfair loss of goodwill and business advantage and to shield Employee from pressure to
use or disclose Confidential Information or to trade on the goodwill belonging to the Company.
Accordingly, during the Post-Termination Non-Compete Term (as defined below), Employee will not
engage or participate in (whether directly or indirectly through any Family Member or as an
employee, employer, consultant, agent, principal, partner, shareholder, officer, director,
licensor, lender, lessor or in any other individual or representative capacity), in any business or
activity (including leasing, acquiring, exploring, producing, gathering or marketing hydrocarbons
and related products) in such a manner that Employee’s knowledge of Confidential Information could
be used to compete with Company, within a ten (10) mile radius of the boundaries of, any mineral
property interest of the Company (including, without limitation, a mineral lease, overriding
royalty interest, production payment, net profits interest, mineral fee interest, or option or
right to acquire any of the foregoing, or an area of mutual interest as designated pursuant to
contractual agreements between the Company and any third party) as of the Termination Date or any
other property on which the Company has, or is in the process of negotiating, an option, right,
license, or authority to conduct or direct exploratory activities, such as three dimensional
seismic acquisition or other seismic, geophysical and geochemical activities (but not including any
preliminary geological mapping), as of the Termination Date; provided that, this Section 10 shall
not preclude Employee from making purely passive investments in companies in the energy industry
provided such investments do not exceed five percent of the outstanding equity securities of the
applicable company.

          (b) For purposes hereof, the duration of the “Post-Termination Non-Compete Term” shall be
determined as follows (but may be shortened by the Board in its sole discretion pursuant to
subsection (d) below):

17

 

     (i) in the event that (A) Employee’s employment by the Company was terminated for
Cause, (B) Employee voluntarily terminated his position (but not for Good Reason), or (C)
Employee breached in any material respect any of the provisions of Sections 8 or 10 hereof,
the Post-Termination Non-Compete Period shall be the 18 month period following the
Termination Date; or

     (ii) in the event (A) Employee’s services as an employee are terminated by the
Company other than for Cause or (B) Employee voluntarily terminated his employment for Good
Reason, in either case outside the period that is six months prior to or two years following
a Change in Control, the Post-Termination Non-Compete Period shall be the twenty-one (21)
month period following the Termination Date during which time the Company provides the
Severance Package to Employee pursuant to Section 5(a) above; or

     (iii) in the event that, within six months prior to or two years following a Change
in Control (A) Employee’s services as an employee are terminated by the Company other than
for Cause or (B) Employee voluntarily terminated his employment for Good Reason, the
Post-Termination Non-Compete Period shall be the twenty-four (24) month period following the
Termination Date, provided that the Employee receives (or is receiving) payments under a
Change in Control Severance Package.

          (c) Employee acknowledges that any severance payments made to Employee under this
Agreement, as well as the Company’s agreement to provide Confidential Information to Employee, will
constitute adequate consideration for Employee’s agreements set forth in Section 10(a) above.

          (d) The Board shall consider in good faith any request made by Employee to limit the
duration, geographical area, or scope of activity of Employee’s non-compete obligations under this
Section 10; provided however, that the Board shall determine in its sole discretion whether to
approve any such request and any conditions upon which such approval would be based.

          (e) Employee will not, during the twenty-four (24) month period following the Termination
Date, solicit, entice, persuade or induce, directly or indirectly, any employee (or person who
within the preceding 90 days was an employee) of the Company or any other person who is under
contract with or rendering services to the Company, to (i) terminate his or her employment by, or
contractual relationship with, such person, (ii) refrain from extending or renewing the same (upon
the same or new terms), (iii) refrain from rendering services to or for such person, (iv) become
employed by or enter into contractual relations with any persons other than such person, or (v)
enter into a relationship with a competitor of the Company.

11. General Provisions.

          (a) Amendments and Waiver. The terms and provisions of this Agreement may not be
modified or amended, nor may any of the provisions hereof be waived, temporarily or permanently,
unless such modification or amendment is agreed to in writing and signed by Employee and by a duly
authorized officer of the Company, and such waiver is set out in writing

18

 

and signed by the party to be bound by waiver. The failure of any party to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the right of such party thereafter to enforce each and every provision of this Agreement
in accordance with its terms, and a waiver on one occasion shall not be deemed to be a waiver of
the same or any other type of breach on a future occasion.

          (b) Withholding and Deductions. With respect to any payment to be made to
Employee, the Company 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.

          (c) Mitigation. Employee 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
Employee as the result of employment by another employer after the Termination Date, or otherwise.

          (d) Survival. The termination of Employee’s employment shall not impair the
rights or obligations of any party that have accrued prior to such termination or which by their
nature or terms survive termination of the Term, including without limitation the Company’s
obligations under Sections 5 and 6 and Employee’s obligations under Sections 8 and 10.

          (e) Validity. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect. In the event that any provision of this
Agreement shall be held invalid or unenforceable by a court of competent jurisdiction by reason of
the geographic or business scope or the duration thereof, such invalidity or unenforceability shall
attach only to the scope or duration of such provision and shall not affect or render invalid or
unenforceable any other provision of this Agreement, and, to the fullest extent permitted by law,
this Agreement shall be construed as if the geographic or business scope or the duration of such
provision had been more narrowly drafted so as not to be invalid or unenforceable.

          (f) Entire Agreement. This Agreement constitutes the entire agreement of the
parties with regard to the subject matter hereof, and contains all the covenants, promises,
representations, warranties and agreements between the parties with respect to employment of
Employee by the Company. Without limiting the scope of the preceding sentence, all understandings
and agreements preceding the date of execution of this Agreement and relating to the subject matter
hereof (including specifically the Confidentiality and Non-Compete Agreement executed by Employee)
are hereby superseded and of no further force and effect. This Agreement, however, shall have no
effect on the Indemnification Agreement between Employee and the Company, which shall remain in
effect.

          (g) Successors and Assigns; Binding Agreement. This Agreement shall bind and
inure to the benefit of and be enforceable by the parties hereto and their respective successors,
permitted assigns, heirs and personal representatives and estates, as the case may be. Neither
this Agreement nor any right or obligation hereunder of any party may be assigned or delegated
without the prior written consent of the other party hereto; provided, however, that the Company

19

 

may assign this Agreement to any of its Subsidiaries and Employee may direct payment of any
benefits that will accrue upon death. Employee 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. This Agreement shall not confer any rights or remedies
upon any person or legal entity other than the parties hereto and their respective successors and
permitted assigns.

          (h) Notices. All notices or other communications required or permitted to be
given under this Agreement shall be in writing and be duly given as follows: (a) if addressed to
Employee, when delivered to the Employee personally or to the address furnished to the Company by
Employee, or (b) if addressed to the Company, when delivered to the Company at its principal place
of business at such address, to the attention of the President. Either party may change its
address by giving the other party notice of such change in accordance with the provisions of this
section.

          (i) Termination of Agreement. The obligations of Employee under Section 10 shall
be terminated if the Company ceases to conduct business as a result of the insolvency or failure of
the Company.

          (j) Construction. The language used in this Agreement shall be deemed to be the
language chosen by the parties to express their mutual intent, and no rule of strict construction
shall be applied against any party. The section headings in this Agreement are for convenience of
reference only, and they form no part of this Agreement and shall not affect its construction.

          (k) Remedies. Employee acknowledges that the Company’s remedy at law for any
breach of the provisions of this Agreement is and will be insufficient and inadequate and that the
Company shall be entitled to equitable relief, including by way of temporary and permanent
injunction, in addition to any remedies the Company may have at law. The parties agree that no
claim for breach of this Agreement may be made by either party following the date that is one year
following the date of discovery by the affected party of the alleged breach.

          (l) Governing Law; Construction. The parties agree that this Agreement is
governed by and shall be construed and enforced in accordance with Colorado law, excluding its
choice-of-law principles, except where federal law may preempt the application of state law and
also agree that this Agreement is to be construed as a whole, according to its fair meaning, and
not strictly for or against any of the parties.

          (m) Disputes; Venue; Jury-Trial Waiver; Mandatory Arbitration. In the event of
any dispute, controversy or claim between the Company and Employee arising out of or relating to
the interpretation, application or enforcement of the provisions of Sections 8, 9 or 10, the
Company and Employee agree and consent to the exclusive personal jurisdiction of the state and
local courts of Colorado State Judicial Branch and/or the United States District Court for the
District of Colorado for resolution of the dispute, controversy or claim, and that those courts,
and only those courts, will have jurisdiction to determine any dispute, controversy or claim
related to, arising under or in connection with Section 8, 9 or 10 of this Agreement. The Company
and

20

 

Employee (i) agree that those courts are convenient forums for the parties to any such
dispute, controversy or claim and for any potential witnesses, (ii) waive any objection to such
venue, (iii) agree that process issued out of any such court or in accordance with the rules of
practice of that court may be served by mail or other forms of substituted service to the Company
at the address of its principal executive offices and to Employee at him last known address as
reflected in the Company’s records, (iv) that any judgment in any such action or proceeding may be
enforced in other jurisdictions, and (v) irrevocably waive the right to trial by jury and agree not
to ask for a jury in any such proceeding.

          In the event of any dispute relating to this Agreement, other than a dispute relating solely
to Section 8, 9 or 10, the parties will use their best efforts to settle the dispute, claim,
question, or disagreement. To this effect, they will consult and negotiate with each other in good
faith and, recognizing their mutual interests, attempt to reach a just and equitable solution
satisfactory to both parties. If such a dispute cannot be settled through negotiation, the parties
agree first to try in good faith to settle the dispute by mediation administered by the American
Arbitration Association under its Commercial Mediation Rules before resorting to arbitration,
litigation, or some other dispute resolution procedure. If the parties do not reach such solution
through negotiation or mediation within a period of sixty (60) days, then, upon notice by either
party to the other, all disputes, claims, questions, or differences will be finally settled by
arbitration administered by the American Arbitration Association in accordance with the provisions
of its Commercial Arbitration Rules. The arbitrator will be selected by agreement of the parties
or, if they do not agree on an arbitrator within thirty (30) days after either party has notified
the other of him or its desire to have the question settled by arbitration, then the arbitrator
will be selected pursuant to the procedures of the American Arbitration Association (the “AAA”) in
Denver, Colorado. The determination reached in such arbitration will be final and binding on all
parties. Enforcement of the determination by such arbitrator may be sought in any court of
competent jurisdiction. Unless otherwise agreed by the parties, any such arbitration will take
place in Denver, Colorado, and will be conducted in accordance with the Commercial Arbitration
Rules of the AAA. The prevailing party in the arbitration proceeding may be entitled to
an award of reasonable attorneys’ fees incurred in connection with the arbitration in such amount,
if any, as determined by the panel in its discretion. The costs of the arbitration shall be borne
equally by the parties unless otherwise determined by the panel in its award.

          (m) Limitations Reasonable. The parties to this Agreement agree that the
limitations contained in Section 10 with respect to time, geographical area, and scope of activity
are reasonable. However, if any court shall determine that the time, geographical area, or scope
of activity of any restriction contained in Section 10 is unenforceable, it is the intention of the
parties that such restrictive covenant set forth herein shall not thereby be terminated but shall
be deemed amended to the extent required to render it valid and enforceable.

          (n) Clawback. Employee hereby acknowledges and agrees that any payment hereunder
will be subject to recovery by the Company pursuant to applicable law and any applicable Company
compensation recovery policy as may be from time to time in effect.

21

 

          IN
WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement on April 25,
2011 effective as of the Effective Date.

	 	 	 	 	 
	 	RESOLUTE ENERGY CORPORATION

 	 
	 	By:  	/s/
Nicholas J. Sutton 	 
	 	 	Nicholas J. Sutton 	 
	 	 	Chief Executive Officer 	 
	 
	 	EMPLOYEE:

 	 
	 	By:  	/s/
James M. Piccone 	 
	 	 	James M. Piccone 	 

22exv10w3

Exhibit 10.3

EMPLOYMENT AGREEMENT

          This Employment Agreement (this “Agreement”) is made by and between Resolute Energy
Corporation, a Delaware corporation (the “Company”), and Theodore Gazulis (“Employee”) effective as
of April 1, 2011 (the “Effective Date”).

     WHEREAS, the Company currently employs Employee as its Senior Vice President and Chief
Financial Officer and Employee provides services to the Company and its direct and indirect
subsidiaries (the “Subsidiaries”);

     WHEREAS, the Company desires to continue to employ Employee and Employee desires to continue
to be employed by the Company and to commit himself to serve the Company on the terms herein
provided.

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

1. Employment. The Company shall continue to employ Employee, and Employee accepts
continued employment with the Company, upon the terms and conditions set forth in this Agreement.
Unless earlier terminated pursuant to Section 4 below, the initial term of this Agreement shall
begin on the Effective Date and end on December 31, 2011 (the “Initial Term”), provided,
however, that the term shall be automatically renewed for successive one-year periods (each
such period an “Extension Term”) unless the Company provides a written notice of non-renewal to
Employee more than 60 days before the end of the Initial Term or the then-current Extension Term.
The Initial Term together with each Extension Term, if any, shall be the “Term.” If the Company
gives timely notice of non-renewal, then Employee’s employment shall end on the last day of the
then-current Term. A termination of Employee’s employment at the end of the Term by reason of
notice of non-renewal given by the Company shall be considered a termination without Cause for
purposes of Sections 4, 5 and 6, as applicable.

2. Position and Duties; Exclusive Compensation and Services.

          (a) Employee shall initially hold the title of Senior Vice President and Chief Financial
Officer; provided however that this title may be changed from time to time during the Term by the
Board of Directors (the “Board”) or any duly authorized committee thereof to a different title
which shall have at least equivalent rank to Employee’s initial title. The Company and Employee
agree that Employee shall have duties and responsibilities consistent with the assigned position in
a company the size and of the nature of the Company, and such other duties and authority that are
assigned to Employee from time to time by the Board or such other officer of the Company as shall
be designated by the CEO or the Board. Employee shall report to such officer of the Company as
shall be designated from time to time by the CEO or the Board.

 

 

          (b) During the Term, Employee agrees to devote his full business time and attention to the
business and affairs of the Company. Notwithstanding the foregoing, so long as such activities do
not conflict with the Company’s interests, interfere with Employee’s duties and responsibilities or
violate Employee’s obligations hereunder, Employee will not be prohibited from (i) managing his
personal, financial, and legal affairs; (ii) engaging in professional, charitable or community
activities or organizations; or (iii) serving on the boards of directors, or advisory boards of
directors, of not-for-profit charitable organizations, not-for-profit professional organizations,
or for-profit corporations, so long as Employee secures the Board’s express written consent for
Employee to serve on any such for-profit board positions prior to undertaking such service.

          (c) During the Term, Employee agrees to comply with the policies of the Company, including
without limitation such policies with respect to legal compliance, conflicts of interest,
confidentiality, compensation recovery (clawback), professional conduct and business ethics as are
from time to time in effect, including but not limited to the Company’s Code of Business Conduct
and Ethics.

3. Compensation.

          (a) Base Salary. Initially, Employee’s base salary shall be $310,000 per annum.
Employee’s base salary may be increased (but not decreased, including after any increase, without
Employee’s written consent or pursuant to a decrease broadly applied to all similarly situated
employees) by the Board (or the Compensation Committee) in its sole discretion (as adjusted from
time to time, the “Base Salary”). The Base Salary shall be payable to Employee in regular
installments in accordance with the Company’s general payroll practices and subject to withholdings
required by applicable law.

          (b) Short Term Incentive Compensation. During the Term, as determined by the Board (or
the Compensation Committee) in its sole discretion, Employee shall be eligible to receive an annual
short term incentive compensation payment (an “STI Payment”) for each calendar year pursuant to the
Company’s short term incentive plan then in effect (the “STI Plan”). Pursuant to the terms of the
STI Plan, each annual STI Payment shall be payable based on the achievement of performance targets.
Initially, Employee’s target STI Payment shall be equal to 70% (the “Target STI Percentage”) of
Employee’s annual Base Salary (the “Target STI Amount”). The Target STI Percentage may be
increased (but not decreased below the initial Target STI Percentage stated above without
Employee’s written consent or pursuant to a decrease broadly applied to all similarly situated
employees) in its sole discretion. The STI Payment shall be subject to increase or decrease based
on achievement of performance targets and in accordance with the terms of the STI Plan. For each
calendar year in the Term, the Board (or the Compensation Committee) will determine and will
establish in writing (i) the Target STI Amount, (ii) the applicable performance targets, (iii) the
percentage of annual Base Salary payable to Employee if some lesser or greater percentage of the
annual performance target is achieved, and (iv) such other applicable terms and conditions of the
STI Plan necessary to satisfy the requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”).

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          (c) Long Term Incentive Compensation. During the Term, as determined by the Board (or
the Compensation Committee) in its sole discretion, Employee shall be eligible to receive annual
grants of equity or equity-related awards (an “LTI Grant”) pursuant to the Company’s 2009
Performance Incentive Plan or any other long-term incentive plan(s) in effect from time to time,
subject to the terms and conditions thereof. Initially, Employee’s target LTI Grant shall have a
value (as determined by the Board in its reasonable discretion) equal to 200% (“Target LTI
Percentage”) of Employee’s annual Base Salary (the “Target LTI Amount”). The Target LTI Amount may
be increased (but not decreased below the initial Target LTI Percentage stated above without
Employee’s written consent or pursuant to a decrease broadly applied to all similarly situated
employees) by the Board (or the Compensation Committee) in its sole discretion. Any grants
previously awarded to Employee pursuant to the Company’s 2009 Performance Incentive Plan that are
outstanding on the Effective Date hereof shall continue to be governed by the terms and conditions
of such plan and award agreements, subject to any vesting modifications made herein.

          (d) Employee Benefits. During the Term, Employee will be entitled to receive such
welfare benefits and other fringe benefits (including, but not limited to vacation, medical,
dental, life insurance, 401(k) and other employee benefits and perquisites) as the Company may
offer from time to time to similarly situated executive level employees, subject to applicable
eligibility requirements. The Company shall not, however, by reason of this Section 3(d), be
obligated to refrain from changing, amending, or discontinuing any such benefit plan or program, on
a prospective basis, so long as any such changes are similarly applicable to similarly situated
employees of the Company.

          (e) Business Expenses. The Company shall reimburse Employee for all reasonable
expenses incurred by him in the course of performing his duties during the Term to the extent
consistent with the Company’s written policies in effect from time to time with respect to travel,
entertainment and other business expenses and subject to the Company’s requirements with respect to
reporting and documentation of such expenses (“Business Expenses”).

          (f) Leave of Absence Due to Disability. Employee shall be entitled to a paid leave of
absence of up to 180 days in the event of Disability where there is a reasonable expectation that
the Employee will return to his duties with Employer, provided that the Company may offset the
payment of Employee’s Base Salary then in effect by the amount of any short-term or long-term
Company-paid disability benefits Employee receives pursuant to Section 3(d) above. For purposes of
this Agreement, “Disability” means Employee’s inability to perform the duties of Employee’s
position, with or without reasonable accommodation, due to a physical or mental impairment that is
expected to last for more than 30 days. The existence of any such Disability shall be certified by
a physician acceptable to both the Company and Employee. If the parties are not able to agree on
the choice of a physician, each party shall select a physician who, in turn, shall select a third
physician to render such certification.

4. Termination of Employment. Unless otherwise agreed to in writing by the Company and
Employee, Employee’s employment hereunder may be terminated under the following circumstances:

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          (a) Death. Employee’s employment hereunder shall terminate upon his death.

          (b) Disability. Employee’s employment may be terminated by the Company or Employee
may terminate his employment with the Company, if Employee has incurred a Disability; provided,
however, that if Employee is on a leave of absence due to Disability under Section 3.1(f), the
Company may not terminate Employee and Employee may not terminate his Employment due to Disability
pursuant to this Section 4(b) before the 180th consecutive day of paid leave due to
Disability has elapsed. No termination of employment due to Disability shall have occurred unless
the Employer or Employee has given the other party at least 30 days written notice pursuant to
Section 5(f).

          (c) Termination by the Company. The Company may terminate Employee’s employment with
or without Cause. For purposes of this Agreement, the term “Cause” means (i) Employee’s conviction
of, or plea of guilty or nolo contendere to, any felony or to any crime or offense causing
substantial harm to the Company or its affiliates or involving acts of theft, fraud, embezzlement,
moral turpitude or similar conduct; (ii) Employee’s repeated intoxication by alcohol or drugs
during the performance of Employee’s duties in a manner that materially and adversely affects
Employee’s performance of such duties; (iii) malfeasance in the conduct of Employee’s duties,
including, but not limited to, (A) willful and intentional misuse or diversion of funds or assets
of the Company or its affiliates, (B) embezzlement, or (C) fraudulent or willful and material
misrepresentations or concealments on any written reports submitted to the Company or its
affiliates; (iv) Employee’s material violation of any provision of a material written agreement
between Employee and the Company that remains uncured for a period of 30 days after notice thereof;
or (v) Employee’s material failure to perform the duties of Employee’s employment or material
failure to follow or comply with the reasonable and lawful written directives of the Board or
Employee’s supervisor or superior, in either case after Employee shall have been informed, in
writing, of such material failure and given a period of not less than 60 days to remedy same.
Prior to any termination for Cause, the Company shall be entitled to suspend Employee with pay and
terminate all access to the premises and databases of the Company during any investigation of any
of the circumstances described above.

          (d) Termination by Employee. Employee may, upon giving the Company no less than 30
days’ advance written notice, resign and terminate Employee’s employment without Good Reason or for
Good Reason (as defined in Section 6(e) below). The Company may in its sole discretion, elect to
waive all or any part of the 30-day notice period.

5. Compensation Upon Termination in Absence of Change in Control.

          (a) Without Cause or For Good Reason. In the event Employee’s employment is
terminated by the Company without Cause or by Employee for Good Reason (but in the absence of a
Change in Control which shall be governed under Section 6), the Company shall pay to Employee (i)
any unpaid portion of the Base Salary through the Termination Date at the rate then in effect, (ii)
any earned but yet unpaid STI Payment for the calendar year prior to the Termination Date, (iii)
any unreimbursed Business Expenses through the Termination Date, and (iv) such employee benefits,
if any, as to which Employee may be entitled pursuant to the terms governing such benefits. The
amounts, if any, set forth in (i), (ii), (iii), and (iv) shall be

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collectively referred to herein as the “Accrued Payments”. In addition, and contingent upon
Employee satisfying the Severance Conditions (as defined below), the Company shall also provide the
following payments and other benefits (the “Severance Package”):

     (i) Payment of an amount equal to the equivalent of eighteen (18) months of Employee’s
Base Salary as of the Termination Date, payable in substantially equal monthly installments
over a period of eighteen (18) months beginning on the first payroll date which occurs in
the first month following the Termination Date; plus

     (ii) Payment of an amount equal to 1.5 times the Target STI Payment, calculated based
on Employee’s Base Salary in effect on the Termination Date, payable in substantially equal
monthly installments over a period of eighteen (18) months beginning on the first payroll
date which occurs in the first month following the Termination Date; plus

     (iii) Payment of an amount equal to a pro-rata portion of the STI Payment that Employee
would have been entitled to receive pursuant to Section 3(b) hereof for the calendar year of
termination, multiplied by a fraction, the numerator of which is the number of days during
which Employee was employed by the Company in the calendar year of Employee’s termination,
and the denominator of which is 365 (the “Pro-Rata Bonus”), payable as soon as
administratively feasible following preparation of the Company’s audited financial
statements for the applicable calendar year, but in no event later than March 31 (or earlier
than January 1) of the calendar year following the calendar year to which such STI Payment
relates; plus

     (iv) Pay or reimburse on a monthly basis the premiums required to continue Employee’s
group health care coverage for a period of eighteen (18) months following Employee’s
Termination Date, under the applicable provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”), provided that Employee or his dependents, as
applicable, elect to continue and remain eligible for these benefits under COBRA. If
necessary to avoid inclusion in taxable income by Employee of the value of in-kind benefits,
such health care continuation premiums shall be provided in the form of taxable payments to
Employee, which payments shall be made without regard to whether Employee elects to continue
and remain eligible for such benefits under COBRA, and in which event Company shall pay to
Employee, with each monthly reimbursement, an additional amount of cash equal to A/(1-R)-A,
where A is the amount of the reimbursement for the month, and R is the sum of the maximum
federal individual income tax rate then applicable to ordinary income and the maximum
individual Colorado income tax rate then applicable to ordinary income.

To receive the Severance Package, (i) Employee must execute and return to the Company on or prior
to the 30th day following the Termination Date a waiver and release of claims agreement in the
Company’s customary form (which may be amended by the Company to reflect changes in applicable laws
and regulations), which shall exclude claims by the Employee for indemnification, claims for
coverage under officer and director policies, and claims as a stockholder of the Company (the
“Release”), and where contemplated by applicable law, not

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timely revoke such Release, and (ii) must comply in all material respects with the covenants in
Sections 8 and 10 of this Agreement (together, the “Severance Conditions”). No payment of any part
of a Severance Package or Change in Control Severance Package, or pursuant to Section 5(d), shall
be made unless the Employee (or Employee’s estate) has complied with the Severance Conditions. If
Employee (or Employee’s estate) has complied with the Severance Conditions, then any payment that
would have become payable prior to the execution of the Release and the end of the revocation
period shall be made at the expiration of the 30 day period.

          (b) Resignation. In the event Employee’s employment is terminated by Employee other
than for Good Reason (but in the absence of a Change in Control which shall be governed under
Section 6), the Company shall pay to Employee (i) any unpaid portion of the Base Salary through the
Termination Date at the rate then in effect, (ii) any unreimbursed Business Expenses through the
Termination Date, and (iii) such employee benefits, if any, as to which Employee may be entitled
pursuant to the terms governing such benefits. Employee shall not be eligible to receive any STI
Payment for the calendar year prior to the Termination Date nor any Pro-Rata Bonus for the year in
which the Termination Date occurs.

          (c) For Cause. In the event Employee’s employment is terminated by the Company for
Cause, the Company shall pay to Employee (i) any unpaid portion of the Base Salary through the
Termination Date at the rate then in effect, (ii) any unreimbursed Business Expenses through the
Termination Date, and (iii) such employee benefits, if any, as to which Employee may be entitled
pursuant to the terms governing such benefits. Employee shall not be eligible to receive any STI
Payment for the calendar year prior to the Termination Date nor any Pro-Rata Bonus for the year in
which the Termination Date occurs.

          (d) Death or Disability. In the event Employee’s employment terminates by reason of
his death, or either party terminates Employee’s employment due to Disability pursuant to Section
4(b), the Company shall pay to Employee the Accrued Payments. In addition, and contingent upon
Employee (or Employee’s estate) satisfying the Severance Conditions, the Company shall also provide
the Employee (or Employee’s estate) the following payments and other benefits:

     (i) Payment of an amount equal to eighteen (18) months of Employee’s Base Salary as of
the Termination Date, payable in a lump sum on the 30th day following the
Termination Date; plus

     (ii) Payment of an amount equal to 1.5 times the Target STI Payment, calculated based
on Employee’s Base Salary in effect on the Termination Date, payable in a lump sum on the
30th day following the Termination Date; plus

     (iii) Payment of a Pro-Rata Bonus for the calendar year of termination, payable as soon
as administratively feasible following preparation of the Company’s audited financial
statements for the applicable calendar year, but in no event later than March 31 (or earlier
that January 1) of the calendar year following the calendar year to which such STI Payment
relates; plus

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     (iv) Payment or reimbursement on a monthly basis of the premiums required to continue
Employee’s group health care coverage for a period of eighteen (18) months following
Employee’s Termination Date, under the applicable provisions of COBRA, provided that
Employee or his dependents, as applicable, elect to continue and remain eligible for these
benefits under COBRA. If necessary to avoid inclusion in taxable income by Employee of the
value of in-kind benefits, such health care continuation premiums shall be provided in the
form of taxable payments to Employee, which payments shall be made without regard to whether
Employee elects to continue and remain eligible for such benefits under COBRA, and in which
event Company shall pay to Employee, with each monthly reimbursement, an additional amount
of cash equal to A/(1-R)-A, where A is the amount of the reimbursement for the month, and R
is the sum of the maximum federal individual income tax rate then applicable to ordinary
income and the maximum individual Colorado income tax rate then applicable to ordinary
income.

          (e) Exclusive Compensation and Benefits. The compensation and benefits described in
this Section 5 or in Section 6, as applicable, along with the associated terms for payment,
constitute all of the Company’s obligations to Employee with respect to the termination of
Employee’s employment. Nothing in this Agreement, however, is intended to limit any vested
benefits that Employee may have under the applicable provisions of any benefit plan of the Company
in which Employee is participating on the Termination Date, any rights Employee may have to
continue or convert coverage under certain employee benefit plans in accordance with the terms of
those plans and applicable law, or any rights Employee may have under long-term incentive or equity
compensation plan.

          (f) Notice of Termination. Any termination of Employee’s employment shall be
communicated to the other party by written notice that (i) indicates the specific termination
provisions of this Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for the termination (provided that an explanation shall
not be required in the event of a resignation unless the Employee is resigning for Good Reason),
and (iii) specifies the Termination Date (a “Notice of Termination”).

          (g) Termination Date. For purposes of this Agreement, “Termination Date” means the
date of receipt of the Notice of Termination or any later date specified therein or required by
this Agreement, as the case may be; provided, however that if Employee’s employment is terminated
by reason of his death, the Termination Date shall be the date of death of Employee.

          (h) Deemed Resignations. Unless otherwise agreed to in writing by the Company and
Employee prior to termination of Employee’s employment hereunder, any termination of Employee’s
employment shall constitute an automatic immediate resignation of Employee from all positions he
then holds as an employee, officer, director, manager or other service provider of the Company and
each Subsidiary.

          (i) Application of Section 409A. This Agreement is intended to comply with Code
Section 409A and the Treasury Regulations promulgated thereunder (“Section 409A”) and shall be
construed accordingly. It is the intention of the parties that payments or benefits payable under
this Agreement not be subject to the additional tax or interest imposed pursuant to Section

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409A. To the extent such potential payments or benefits are or could become subject to
Section 409A, the Parties shall cooperate to amend this Agreement with the goal of giving Employee
the economic benefits described herein in a manner that does not result in such tax or interest
being imposed. Notwithstanding anything in this Agreement to the contrary, the following
provisions shall apply.

          For purposes of this Agreement, whenever and to the extent that it would be necessary to
comply with the requirements of Section 409A, Employee’s employment will be treated as terminating
when and only when Executive experiences a Separation from Service. For purposes of this
Agreement, the term “Separation from Service” means when Executive dies, retires or otherwise has a
termination of employment from the Company that constitutes a “separation from service” within the
meaning of Treasury Regulation Section 1.409A-1(h).

          If a payment that could be made under this Agreement would be subject to additional taxes and
interest under Section 409A, the Company in its sole discretion may accelerate some or all of a
payment otherwise payable under the Agreement to the time at which such amount is includible in the
income of Employee, provided that such acceleration shall only be permitted to the extent permitted
under Treasury Regulation Section 1.409A-3(j)(4)(vii) and the amount of such acceleration does not
exceed the amount permitted under Treasury Regulation Section 1.409A-3(j)(vii).

          No payment to be made under this Agreement shall be made at a time earlier than that provided
for in this Agreement unless such payment is (i) an acceleration of payment permitted to be made
under Treasury Regulation Section 1.409A-3(j)(4) or (ii) a payment that would otherwise not be
subject to additional taxes and interest under Section 409A. Each payment of benefits pursuant to
Sections 5 or 6 shall be a separate payment to the maximum extent permitted by Section 409A.

          The portion of any payment under this Agreement that would constitute a “short-term deferral”
within the meaning of Treasury Regulation Section 1.409A-1(b)(4),would meet the requirements for
separation pay due to involuntary separation from service under Treasury Regulation Section
1.409A-1(b)(9)(iii), or would otherwise be exempt from Section 409A shall be treated as a
separately identified and determinable amount for purposes of Section 409A.

          In the event that the Company becomes subject to the sanctions imposed pursuant to Section
2716 of the Public Health Service Act by reason of this Agreement, the parties shall cooperate to
amend this Agreement with the goal of giving Executive the economic benefits described herein in a
manner that does not result in such sanctions being imposed.

          Notwithstanding any other provision in this Agreement, if (i) Employee is a “specified
employee” on the date of the Employees “separation from service” within the meaning of Code
Sections 409A(a)(2)(A)(i) and 409A(a)(2)(B)(i), and (ii) as a result of such separation from
service the Employee would receive any payment that, absent the application of this paragraph,
would be subject to the interest and additional tax imposed pursuant to Code Section 409A(a) as a
result of the application of Code Section 409A(a)(2)(B)(i), then such payment shall be made on the
date that is the earliest of: (A) the first day following the day that is 6 months after the
Employee ‘s separation from service, (B) the Employee’s date of death, or (C) such other date on

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which such payment will not be subject to such interest and additional tax.

          Notwithstanding any other provision in this Agreement, if the terms of payment of any payment
of all or a portion of a Severance Package or a Change in Control Severance Package would cause any
amount to be subject to the additional tax or interest imposed pursuant to Section 409A by reason
of Treasury Regulations Sections 1.409A-3(a) or (c), such payment shall be made, if at all, in a
lump sum on the 30th day following the Termination Date or, if the preceding paragraph
is applicable to Employee, upon the earliest date permitted under such preceding paragraph.

6. Change in Control.

          (a) Vesting of Equity Awards. If, in connection with a Change in Control (as defined
in Section 6(d) below), the vesting of outstanding equity awards is accelerated under the terms of
the Company’s 2009 Performance Incentive Plan or any other long-term incentive plan(s) then in
effect, then the vesting of any outstanding equity awards held by Employee shall also be
accelerated. If the vesting of outstanding equity awards is not accelerated or only partially
accelerated in connection with the Change in Control under the terms of the Company’s 2009
Performance Incentive Plan or any other long-term incentive plan(s) then in effect, then the
following terms shall apply following the Change in Control with respect to the remaining unvested
equity awards held by Employee:

     (i) Any performance-based equity awards held by Employee shall immediately vest to the
extent that the stock price target or other performance thresholds applicable to such awards
are met in the Change in Control transaction, as determined by the Board in its reasonable
discretion. Any performance-based equity awards held by Employee that are not vested under
the preceding sentence shall be automatically converted to time-based equity awards in equal
one-third proportions and the vesting of those awards shall be amended such that those
awards shall vest over Employee’s next three regularly scheduled vesting dates.

     (ii) All equity awards held by Employee that remain unvested following application of
the foregoing provisions of this Section 6(a) shall vest on the established vesting date of
such equity awards; provided however, that in the event of a termination of Employee’s
employment by the Company (or its successor) for any reason other than for Cause, or a
termination of Employee’s employment by Employee for Good Reason, within two years following
a Change in Control, such unvested equity awards shall immediately and automatically vest in
full and, in the case of options or other exercisable equity awards, shall remain
exercisable for two years following such termination of employment.

In addition, if Employee’s employment was terminated (A) by the Company for any reason other than
for Cause or (B) by Employee for Good Reason within the six months prior to the occurrence of a
Change in Control, then Employee shall be treated for purposes of this Section 6(a) as if he
continued to be employed through the date of the Change in Control and the termination of his
Employment occurred immediately following the Change in Control.

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          (b) Severance Benefits. In addition, if a Change in Control Severance Payment
Event (as defined below) occurs, then the Company shall pay to Employee the Accrued Payments, and
contingent upon Employee satisfying the Severance Conditions, the Company shall also provide
Employee the following payments and other benefits (the “Change in Control Severance Package”):

     (i) Payment of an amount equal to 2.0 times the sum of (i) Employee’s annual rate of
Base Salary as of the Termination Date or as of the date of the Change in Control, whichever
is greater, plus (ii) Employee’s Target STI Payment, calculated based on Employee’s Base
Salary as of the Termination Date or, if greater, as of the date of the Change in Control,
payable to Employee on the 30th day following the Termination Date in a lump sum
payment; plus

     (ii) Payment of a Pro-Rata Bonus for the calendar year of termination, payable as soon
as administratively feasible following preparation of the Company’s audited financial
statements for the applicable calendar year, but in no event later than March 31 (or earlier
than January 1) of the calendar year following the calendar year to which such STI Payment
relates; and

     (iii) The Company shall pay or reimburse on a monthly basis the premiums required to
continue Employee’s group health care coverage for a period of eighteen (18) months
following Employee’s Termination Date, under the applicable provisions of COBRA, provided
that Employee or his dependents, as applicable, elect to continue and remain eligible for
these benefits under COBRA. If necessary to avoid inclusion in taxable income by Employee of
the value of in-kind benefits, such health care continuation premiums shall be provided in
the form of taxable payments to Employee, which payments shall be made without regard to
whether Employee elects to continue and remain eligible for such benefits under COBRA, and
in which event Company shall pay to Employee, with each monthly reimbursement, an additional
amount of cash equal to A/(1-R)-A, where A is the amount of the reimbursement for the month,
and R is the sum of the maximum federal individual income tax rate then applicable to
ordinary income and the maximum individual Colorado income tax rate then applicable to
ordinary income;

     (iv) Provided, however, that the sum of (i) and (ii) above shall be reduced, but not
below zero, by the sum of any actually benefits provided to Employee pursuant to Section
5(a)(i), (ii), or (iii) and any payments otherwise required pursuant to Section 5(a)(i),
(ii), and (iii) shall not be made.

Nothing in this Section 6 shall relieve the Company or any successor-in-interest thereof of its
obligation to continue, following any Change in Control, to provide Employee with the compensation
due pursuant to Section 3 of this Agreement or to otherwise comply with its obligations hereunder
in the event Employee’s service continues pursuant to this Agreement following the occurrence of
such Change in Control.

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          A “Change in Control Severance Payment Event” shall mean (i) termination of Employee’s
employment by the Company (or its successor) for any reason other than for Cause, or a termination
of Employee’s employment by Employee for Good Reason, within two years following a Change in
Control or (ii) a Change in Control that occurs within six months after a termination of Employee’s
employment by the Company for any reason other than for Cause or a termination of Employee’s
employment by Employee for Good Reason; provided, however, that in no event shall a termination due
to Disability pursuant to Section 4(b) be Change in Control Severance Event.

          (c) (i) If any of the payments or benefits received or to be received by Employee in
connection with Employee’s termination of employment in respect of a Change in Control, whether
pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the
Company (all such payments and benefits, being hereinafter referred to as the “Total Payments”)
would be subject to the excise tax (the “Excise Tax”) imposed under Code Section 4999, Employee
shall receive the Total Payments from the Company and be responsible for the Excise Tax; provided,
however that Employee shall not receive the Total Payments and the Total Payments shall be reduced
to the Safe Harbor amount if (1) the net amount of such Total Payments, as so reduced (and after
subtracting the net amount of federal, state and local income taxes on such reduced Total Payments)
is greater than or equal to (2) the net amount of such Total Payment without such reduction (but
after subtracting the net amount of federal, state and local income taxes on such Total Payments
and the amount of Excise Tax to which Employee would be subject in respect of such unreduced Total
Payments). The “Safe Harbor Amount” is the amount to which the Total Payments would hypothetically
have to be reduced so that no portion of the Total Payments would be subject to the Excise Tax.

               (ii) For purposes of determining whether any of the Total Payments will be subject to the
Excise Tax and the amount of such Excise Tax, (1) all of the Total Payments shall be treated as
“parachute payments” (within the meaning of Code Section 280G(b)(2)) unless, in the opinion of an
independent accounting firm selected by the Company (the “Auditor”), such payments or benefits (in
whole or in part) do not constitute parachute payments, including by reason of Code Section
280G(b)(4)(A), (2) all “excess parachute payments” within the meaning of Code Section 280G(b)(1)
shall be treated as subject to the Excise Tax unless, in the opinion of the Auditor, such excess
parachute payments (in whole or in part) represent reasonable compensation for services actually
rendered (within the meaning of Code Section 280G(b)(4)(B)) in excess of the base amount (within
the meaning of Code Section 280G(b)(3)) allocable to such reasonable compensation, or are otherwise
not subject to the Excise Tax, and (3) the value of any noncash benefits or any deferred payment or
benefit shall be determined by the Auditor in accordance with the principles of Code Sections
280G(d)(3) and (4). If the Auditor is prohibited by applicable law or regulation from performing
the duties assigned to it hereunder, then a different auditor, acceptable to both the Company and
Employee, shall be selected. The fees and expenses of the Auditor shall be paid by the Company.

               (iii) In the event it is determined that the Safe Harbor amount is payable to Employee, unless
Employee shall have given prior written notice to the Company specifying a different order of
reductions, the cash payments provided under Section 6 shall first be reduced on a pro rata basis
until the Safe Harbor amount is reached. In the event further reduction is

11

 

needed to reach the Safe Harbor amount after reducing all cash payments to zero, the non-cash
severance payments shall thereafter be reduced on a pro rata basis to the extent necessary so that
no portion of the Total Payments is subject to the Excise Tax; provided, however, that no payment
shall be reduced unless it is determined to be contingent on a change in the ownership or effective
control of the Company or in the ownership of a substantial portion of the assets of the Company.
Employee may specify the order of reduction of the payments only to the extent that doing so does
not directly or indirectly alter the time or form of payment of any amount that is deferred
compensation subject to (and not exempt from) Section 409A.

               (iv) At the time of the initial determination by the Auditor hereunder, it is possible that
Payments will have been made by the Company which should not have been made (an “Overpayment”) or
that an amount which will not have been made by the Company could have been made (an
“Underpayment”), in each case, consistent with the calculations required to be made hereunder. In
the event that the Auditor, based upon the assertion of a deficiency by the Internal Revenue
Service against Employee that the Auditor believes has a high probability of success, determines an
Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the
benefit of Employee shall be repaid by Employee to the Company together with interest at the
applicable Federal rate provided in Code Section 7872(f)(2); provided, however, that no amount
shall be payable by Employee to the Company if and to the extent such deemed payment would not
either reduce the amount on which Employee is subject to tax under Code Section 61 and Code Section
4999 or generate a refund of such taxes. In the event that the Auditor, based upon controlling
precedent or other substantial authority, determines that an Underpayment has occurred, any such
Underpayment shall be promptly paid by the Company to or for the benefit of Employee together with
interest at the applicable Federal rate provided in Code Section 7872(f)(2); provided further that
any such Underpayment shall constitute a payment (within the meaning of Treasury Regulation Section
1.409A-2(b)(2)) separate and apart from the Total Payments; and provided, further that any such
Underpayment shall be deemed a disputed payment (within the meaning of Treasury Regulation Section
1.409A-3(g)) and shall be made no later than the end of the first taxable year of the Company in
which the Auditor determines pursuant to this Section 6(c)(iv) that such Underpayment is due.

               (v) This Section 6(c) shall be interpreted, to the maximum extent possible, so as to avoid the
imposition of excise taxes on Employee under Code Section 4999 or the disallowance of a deduction
to the Company pursuant to Code Section 280G(a) with respect to any amount payable, or to be
provided, under this Agreement.

          (d) For the purposes of this Agreement, “Change in Control” shall mean:

     (i) an acquisition in one or series of related transactions of the beneficial ownership
of 40% of the Company’s outstanding voting stock by any person or group, unless the stock is
acquired (a) by the Company or its Subsidiaries, (b) directly from the Company, (c) by an
entity in a Business Combination (as defined below) that otherwise does not constitute a
Change in Control, or (d) by an employee benefit plan (or related trust) sponsored by the
Company or its Subsidiaries;

     (ii) the liquidation, dissolution or winding-up of the Company;

12

 

     (iii) a reorganization, merger or consolidation of the Company or a sale or
other disposition of all or substantially all of the company’s assets (a “Business
Combination”), immediately following which individuals who constitute the incumbent board
cease to constitute at least a majority of the governing body of the surviving entity; or

     (iv) a majority of the members of the Board of the Company is replaced during any
12-month period by directors whose appointment or election is not endorsed or recommended by
a majority of the members of the Board prior to the date of the appointment or election.

          (e) For purposes of this Agreement, the term “Good Reason” shall mean, without the express
written consent of Employee, the occurrence of one of the following arising on or after the
Effective Date, as determined in a manner consistent with Treasury Regulation Section
1.409A-1(n)(2)(ii): (i) a material reduction in Employee’s Base Salary, Target STI Percentage or
Target LTI Percentage, (ii) a material diminution in Employee’s authority, duties, title or
responsibilities, (iii) a permanent relocation in the geographic location at which Employee must
perform services to a location more than 50 miles from the location at which Employee normally
performed services immediately before the relocation; or (iv) any other action or inaction that
constitutes a material breach by the Company of this Agreement or any material written agreement
between the Company and Employee. Neither a transfer of employment among the Company and any of
its Subsidiaries nor the Company or a Subsidiary entering into or discontinuing a co-employer
relationship with a personnel services organization constitutes Good Reason. In the case of
Employee’s allegation of Good Reason, (i) Employee shall provide notice to the Company of the event
alleged to constitute Good Reason within 60 days after the initial occurrence of such event, and
(ii) the Company shall have the opportunity to remedy the alleged Good Reason event within 30 days
from receipt of notice of such allegation (the “Cure Period”). If not remedied within the Cure
Period, Employee may submit a Notice of Termination pursuant to Section 5(e), provided that the
Notice of Termination must be given no later than 90 days after the expiration of the Cure Period;
otherwise, Employee is deemed to have accepted such event, or the Company’s remedy of such event,
that may have given rise to the existence of Good Reason; provided, however, such acceptance shall
be limited to the occurrence of such event and shall not waive Employee’s right to claim Good
Reason with respect to future similar or other events.

7. Business Opportunities and Intellectual Property.

          (a) Employee represents that he has disclosed to the Company all Business Opportunities and
Intellectual Property (as defined below) that exist on the date hereof. Employee agrees to
promptly disclose to the Company all Business Opportunities and Intellectual Property that become
such during the Term or the Post Termination Non-Compete Term.

          (b) Except with respect to the properties identified on the Disclosure Schedule (“Disclosed
Assets”) attached to the Confidentiality and Non-Compete Agreement previously

13

 

executed by Employee, Employee hereby assigns and agrees to assign to the Company, its
successors, assigns, or designees, all of Employee’s right, title, and interest in and to all
Business Opportunities and Intellectual Property that exist on the date hereof or become such
during the Term, and further acknowledges and agrees that all Business Opportunities and
Intellectual Property that exist on the date hereof or become such during the Term constitute the
exclusive property of the Company.

          (c) For purposes hereof, “Business Opportunities” shall mean all business ideas, prospects,
proposals and other opportunities pertaining to the lease, acquisition, exploration, production,
gathering or marketing of hydrocarbons and related products and the exploration potential of
geographical areas on which hydrocarbon exploration prospects are located, that are:

     (i) developed by Employee: (A) during the period that Employee is employed by the
Company or any of its Subsidiaries, or (B) before the date hereof, if such opportunities
were developed in connection with (I) assets that have been sold or contributed to the
Company by Employee, or (II) Employee’s activities in the oil and gas industry, and are
directly or indirectly related to the Company’s properties or assets acquired during the
period that Employee is employed by the Company or any of its Subsidiaries; and

     (ii) originated by any third parties and brought to the attention of Employee, whether
before or during the Term, except to the extent that (A) such opportunities are not
applicable, directly or indirectly, to any of the Company’s properties or assets acquired
during the period that Employee is employed by the Company or any of its Subsidiaries, and
(B) third parties possess valid and enforceable rights to such opportunities;

together with information relating thereto, including, without limitation, the Business Records (as
defined below).

          (d) For purposes of this Agreement, “Intellectual Property” shall mean all ideas, inventions,
discoveries, processes, designs, methods, substances, articles, computer programs, and improvements
(including, without limitation, enhancements to, or further interpretation or processing of,
information that was in the possession of Employee prior to the date of this Agreement), whether or
not patentable or copyrightable, which do not fall within the definition of Business Opportunities,
and which are discovered, conceived, invented, created, or developed by Employee, alone or with
others if such discovery, conception, invention, creation, or development (i) occurs in the course
of Employee’s employment with the Company, or (ii) occurs with the substantial use of the Company’s
time, materials, assets or facilities (including assets sold or contributed to the Company by
Employee), or (iii) in the opinion of at least a majority of the Board, relates or pertains in any
way to the Company’s properties or assets acquired during the period that Employee is employed by
the Company or any of its Subsidiaries, except to the extent that any third party possesses a valid
and enforceable right to such Intellectual Property.

14

 

8. Confidentiality Obligations.

          (a) Employee hereby acknowledges that all trade secrets and confidential or proprietary
information of the Company (collectively referred to herein as “Confidential Information”)
constitute valuable, special and unique assets of the Company’s business, and that access to and
knowledge of such Confidential Information is essential to the performance of Employee’s duties.
Employee agrees that during the Term and during the twenty-four (24) month period following the
Termination Date, Employee will hold the Confidential Information in strict confidence and will not
publish, disseminate or otherwise disclose, directly or indirectly, to any person other than the
Company and its officers, directors and employees, any Confidential Information or use any
Confidential Information for Employee’s own personal benefit or for the benefit of anyone other
than the Company. The Company agrees to provide Confidential Information to Employee in exchange
for Employee’s agreement to keep such Confidential Information, and any Confidential Information to
which Employee has already become privy, in strict confidence as provided in this Agreement.

          (b) For purposes of this Section 8, it is agreed that Confidential Information includes,
without limitation, any information heretofore or hereafter acquired, developed or used by the
Company relating to Business Opportunities or Intellectual Property or other geological,
geophysical, economic, financial or management aspects of the business, operations, properties or
prospects of the Company whether oral or in written form, whether or not included in the Company’s
Business Records, but shall exclude any information which (A) is or has become part of common
knowledge or understanding in the oil and gas industry or otherwise in the public domain (other
than from disclosure by Employee in violation of this Agreement or any other confidentiality
agreement with the Company); (B) was rightfully in the possession of Employee, as shown by
Employee’s records, prior to the date of this Agreement and which is not directly applicable to the
business of the Company or any of its properties or assets; (C) is lawfully acquired by Employee
after the Term from any third party not bound by an obligation of confidence to the disclosing
party; or (D) is independently developed by or for Employee after the Term without using the
Confidential Information of the Company; provided, however, that Employee shall provide to the
Company copies of all information described in clause (B) to the extent reasonably requested by the
Company. Notwithstanding the foregoing, this Section 8 shall not be applicable to the extent (1)
Employee is required to testify in a judicial or regulatory proceeding pursuant to the order of a
judge or administrative law judge after Employee requests that such Confidential Information be
preserved, or (2) Employee receives a valid and effective subpoena, interrogatory or other legally
enforceable request for information in connection with a judicial process; provided, however, that
if and when such a disclosure is required pursuant to clause (1) or (2) above, Employee shall
promptly provide the Company with notice of such requirement, so that the Company may (x) seek a
protective order or other remedy (including, without limitation, participation in any proceeding),
or (y) waive compliance with the terms of this Agreement in the Company’s sole discretion (but such
waiver will be limited to the Confidential Information required to be disclosed). Employee shall
be entitled to furnish only such Confidential Information as Employee is advised by legal counsel
that he is legally required to disclose and will use commercially reasonable efforts to obtain
confidential treatment of any and all Confidential Information disclosed.

15

 

          (c) Employee agrees to promptly deliver to the Company, upon termination of Employee’s
employment with the Company, or at any other later time when the Company so requests, all documents
and electronic data in existence on the Termination Date relating to the business of the Company,
including, without limitation: all geological and geophysical reports and related data such as
maps, charts, logs, seismographs, seismic records and other reports and related data, calculations,
summaries, memoranda and opinions relating to the foregoing, production records, electric logs,
core data, pressure data, lease files, well files and records, land files, abstracts, title
opinions, title or curative matters, contract files, notes, records, drawings, manuals,
correspondence, financial and accounting information, customer lists, statistical data and
compilations, patents, copyrights, trademarks, trade names, inventions, formulae, methods,
processes, agreements, contracts, manuals or any other documents relating to the business of the
Company (collectively, the “Business Records”), and all copies thereof and therefrom that are in
the possession or under the control of Employee.

          (d) Employee confirms that all of the Business Records (and all copies thereof and therefrom)
that are required to be delivered to the Company pursuant to this Section 8 constitute the
exclusive property of the Company.

          (e) The obligation of confidentiality set forth in this Section 8 shall continue
notwithstanding Employee’s delivery of any Business Records to the Company. The provisions of this
Section 8 shall continue in effect notwithstanding termination of Employee’s employment for any
reason.

          (f) Notwithstanding the foregoing provisions of this Section 8 or any other provision of this
Agreement, Employee shall be entitled to retain any written materials which, as shown by Employee’s
records, were in Employee’s possession on or prior to the date Employee was employed by the Company
or any of its predecessors, subject to the Company’s right to receive a copy of such materials or,
in lieu thereof, proof that such materials were in existence on the date hereof.

9. Non-Compete Obligations During Employment Term.

          (a) Except as set forth in subsection (b) of this Section 9 and in the Disclosure Schedule,
Employee agrees that during the Term:

          (i) Employee will not, other than through the Company, engage or participate in any
manner, whether directly or indirectly through any Family Member or as an employee,
employer, consultant, agent, principal, partner, more than five percent equity-holder,
officer, director, licensor, lender, lessor or in any other individual or representative
capacity, in any business or activity which is engaged in leasing, acquiring, exploring,
producing, gathering or marketing hydrocarbons and related products; and

          (ii) all investments made by Employee (whether in Employee’s own name or in the name of
any Family Members or made by any Controlled Affiliates, as defined below), which relate to
the lease, acquisition, exploration, production, gathering or marketing of hydrocarbons and
related products shall be made solely through the

16

 

Company; and Employee will not (directly or indirectly through any Family Members), and
will not permit any Controlled Affiliate to: (A) invest or otherwise participate alongside
the Company in any Business Opportunities, or (B) invest or otherwise participate in any
business or activity relating to a Business Opportunity, regardless of whether the Company
ultimately participates in such business or activity.

For purposes hereof, “Controlled Affiliates” are entities in which Employee and Employee’s
Family Members collectively own, directly or indirectly, a majority of the equity or voting
interests. The restrictions of this Section 9(a) do not apply to purely passive investments
in companies in the energy industry provided such investments do not exceed five percent of
the outstanding equity securities of the applicable company.

          (b) Employee represents that neither Employee nor his Controlled Affiliates or his “Family
Members” (defined as Employee’s spouse and minor children living in Employee’s household) own any
investments or interests which relate to the lease, acquisition, exploration, production, gathering
or marketing of hydrocarbons and related products, other than Employee’s interest in the Disclosed
Assets. This paragraph shall not apply to, and Employee shall be entitled to hold and acquire
purely passive investments in companies in the energy industry provided such investments do not
exceed five percent of the outstanding equity securities of the applicable company.

10. Obligations After Termination Date.

          (a) The purposes of the provisions of Section 8 and this Section 10 are to protect the Company
from unfair loss of goodwill and business advantage and to shield Employee from pressure to use or
disclose Confidential Information or to trade on the goodwill belonging to the Company.
Accordingly, during the Post-Termination Non-Compete Term (as defined below), Employee will not
engage or participate in (whether directly or indirectly through any Family Member or as an
employee, employer, consultant, agent, principal, partner, shareholder, officer, director,
licensor, lender, lessor or in any other individual or representative capacity), in any business or
activity (including leasing, acquiring, exploring, producing, gathering or marketing hydrocarbons
and related products) in such a manner that Employee’s knowledge of Confidential Information could
be used to compete with Company, within a ten (10) mile radius of the boundaries of, any mineral
property interest of the Company (including, without limitation, a mineral lease, overriding
royalty interest, production payment, net profits interest, mineral fee interest, or option or
right to acquire any of the foregoing, or an area of mutual interest as designated pursuant to
contractual agreements between the Company and any third party) as of the Termination Date or any
other property on which the Company has, or is in the process of negotiating, an option, right,
license, or authority to conduct or direct exploratory activities, such as three dimensional
seismic acquisition or other seismic, geophysical and geochemical activities (but not including any
preliminary geological mapping), as of the Termination Date; provided that, this Section 10 shall
not preclude Employee from making purely passive investments in companies in the energy industry
provided such investments do not exceed five percent of the outstanding equity securities of the
applicable company.

17

 

          (b) For purposes hereof, the duration of the “Post-Termination Non-Compete Term” shall be
determined as follows (but may be shortened by the Board in its sole discretion pursuant to
subsection (d) below):

     (i) in the event that (A) Employee’s employment by the Company was terminated for
Cause, (B) Employee voluntarily terminated his position (but not for Good Reason), or (C)
Employee breached in any material respect any of the provisions of Sections 8 or 10 hereof,
the Post-Termination Non-Compete Period shall be the 18 month period following the
Termination Date; or

     (ii) in the event (A) Employee’s services as an employee are terminated by the Company
other than for Cause or (B) Employee voluntarily terminated his employment for Good Reason,
in either case outside the period that is six months prior to or two years following a
Change in Control, the Post-Termination Non-Compete Period shall be the eighteen (18) month
period following the Termination Date during which time the Company provides the Severance
Package to Employee pursuant to Section 5(a) above; or

     (iii) in the event that, within six months prior to or two years following a Change in
Control (A) Employee’s services as an employee are terminated by the Company other than for
Cause or (B) Employee voluntarily terminated his employment for Good Reason, the
Post-Termination Non-Compete Period shall be the twenty-four (24) month period following the
Termination Date, provided that the Employee receives (or is receiving) payments under a
Change in Control Severance Package.

          (c) Employee acknowledges that any severance payments made to Employee under this Agreement,
as well as the Company’s agreement to provide Confidential Information to Employee, will constitute
adequate consideration for Employee’s agreements set forth in Section 10(a) above.

          (d) The Board shall consider in good faith any request made by Employee to limit the duration,
geographical area, or scope of activity of Employee’s non-compete obligations under this Section
10; provided however, that the Board shall determine in its sole discretion whether to approve any
such request and any conditions upon which such approval would be based.

          (e) Employee will not, during the twenty-four (24) month period following the Termination
Date, solicit, entice, persuade or induce, directly or indirectly, any employee (or person who
within the preceding 90 days was an employee) of the Company or any other person who is under
contract with or rendering services to the Company, to (i) terminate his or her employment by, or
contractual relationship with, such person, (ii) refrain from extending or renewing the same (upon
the same or new terms), (iii) refrain from rendering services to or for such person, (iv) become
employed by or enter into contractual relations with any persons other than such person, or (v)
enter into a relationship with a competitor of the Company.

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11. General Provisions.

          (a) Amendments and Waiver. The terms and provisions of this Agreement may not be
modified or amended, nor may any of the provisions hereof be waived, temporarily or permanently,
unless such modification or amendment is agreed to in writing and signed by Employee and by a duly
authorized officer of the Company, and such waiver is set out in writing and signed by the party to
be bound by waiver. The failure of any party to enforce any of the provisions of this Agreement
shall in no way be construed as a waiver of such provisions and shall not affect the right of such
party thereafter to enforce each and every provision of this Agreement in accordance with its
terms, and a waiver on one occasion shall not be deemed to be a waiver of the same or any other
type of breach on a future occasion.

          (b) Withholding and Deductions. With respect to any payment to be made to Employee,
the Company 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.

          (c) Mitigation. Employee 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 Employee as the
result of employment by another employer after the Termination Date, or otherwise.

          (d) Survival. The termination of Employee’s employment shall not impair the rights or
obligations of any party that have accrued prior to such termination or which by their nature or
terms survive termination of the Term, including without limitation the Company’s obligations under
Sections 5 and 6 and Employee’s obligations under Sections 8 and 10.

          (e) Validity. The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect. In the event that any provision of this
Agreement shall be held invalid or unenforceable by a court of competent jurisdiction by reason of
the geographic or business scope or the duration thereof, such invalidity or unenforceability shall
attach only to the scope or duration of such provision and shall not affect or render invalid or
unenforceable any other provision of this Agreement, and, to the fullest extent permitted by law,
this Agreement shall be construed as if the geographic or business scope or the duration of such
provision had been more narrowly drafted so as not to be invalid or unenforceable.

          (f) Entire Agreement. This Agreement constitutes the entire agreement of the parties
with regard to the subject matter hereof, and contains all the covenants, promises,
representations, warranties and agreements between the parties with respect to employment of
Employee by the Company. Without limiting the scope of the preceding sentence, all understandings
and agreements preceding the date of execution of this Agreement and relating to the subject matter
hereof (including specifically the Confidentiality and Non-Compete Agreement executed by Employee)
are hereby superseded and of no further force and effect. This Agreement, however, shall have no
effect on the Indemnification Agreement between Employee and the Company, which shall remain in
effect.

          (g) Successors and Assigns; Binding Agreement. This Agreement shall bind and

19

 

inure to the benefit of and be enforceable by the parties hereto and their respective
successors, permitted assigns, heirs and personal representatives and estates, as the case may be.
Neither this Agreement nor any right or obligation hereunder of any party may be assigned or
delegated without the prior written consent of the other party hereto; provided, however, that the
Company may assign this Agreement to any of its Subsidiaries and Employee may direct payment of any
benefits that will accrue upon death. Employee 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. This Agreement shall not confer any rights or remedies
upon any person or legal entity other than the parties hereto and their respective successors and
permitted assigns.

          (h) Notices. All notices or other communications required or permitted to be given
under this Agreement shall be in writing and be duly given as follows: (a) if addressed to
Employee, when delivered to the Employee personally or to the address furnished to the Company by
Employee, or (b) if addressed to the Company, when delivered to the Company at its principal place
of business at such address, to the attention of the President. Either party may change its
address by giving the other party notice of such change in accordance with the provisions of this
section.

          (i) Termination of Agreement. The obligations of Employee under Section 10 shall be
terminated if the Company ceases to conduct business as a result of the insolvency or failure of
the Company.

          (j) Construction. The language used in this Agreement shall be deemed to be the
language chosen by the parties to express their mutual intent, and no rule of strict construction
shall be applied against any party. The section headings in this Agreement are for convenience of
reference only, and they form no part of this Agreement and shall not affect its construction.

          (k) Remedies. Employee acknowledges that the Company’s remedy at law for any breach
of the provisions of this Agreement is and will be insufficient and inadequate and that the Company
shall be entitled to equitable relief, including by way of temporary and permanent injunction, in
addition to any remedies the Company may have at law. The parties agree that no claim for breach
of this Agreement may be made by either party following the date that is one year following the
date of discovery by the affected party of the alleged breach.

          (l) Governing Law; Construction. The parties agree that this Agreement is governed by
and shall be construed and enforced in accordance with Colorado law, excluding its choice-of-law
principles, except where federal law may preempt the application of state law and also agree that
this Agreement is to be construed as a whole, according to its fair meaning, and not strictly for
or against any of the parties.

          (m) Disputes; Venue; Jury-Trial Waiver; Mandatory Arbitration. In the event of any
dispute, controversy or claim between the Company and Employee arising out of or relating to the
interpretation, application or enforcement of the provisions of Sections 8, 9 or 10, the Company
and Employee agree and consent to the exclusive personal jurisdiction of the state and

20

 

local courts of Colorado State Judicial Branch and/or the United States District Court for the
District of Colorado for resolution of the dispute, controversy or claim, and that those courts,
and only those courts, will have jurisdiction to determine any dispute, controversy or claim
related to, arising under or in connection with Section 8, 9 or 10 of this Agreement. The Company
and Employee (i) agree that those courts are convenient forums for the parties to any such dispute,
controversy or claim and for any potential witnesses, (ii) waive any objection to such venue, (iii)
agree that process issued out of any such court or in accordance with the rules of practice of that
court may be served by mail or other forms of substituted service to the Company at the address of
its principal executive offices and to Employee at him last known address as reflected in the
Company’s records, (iv) that any judgment in any such action or proceeding may be enforced in other
jurisdictions, and (v) irrevocably waive the right to trial by jury and agree not to ask for a jury
in any such proceeding.

          In the event of any dispute relating to this Agreement, other than a dispute relating solely
to Section 8, 9 or 10, the parties will use their best efforts to settle the dispute, claim,
question, or disagreement. To this effect, they will consult and negotiate with each other in good
faith and, recognizing their mutual interests, attempt to reach a just and equitable solution
satisfactory to both parties. If such a dispute cannot be settled through negotiation, the parties
agree first to try in good faith to settle the dispute by mediation administered by the American
Arbitration Association under its Commercial Mediation Rules before resorting to arbitration,
litigation, or some other dispute resolution procedure. If the parties do not reach such solution
through negotiation or mediation within a period of sixty (60) days, then, upon notice by either
party to the other, all disputes, claims, questions, or differences will be finally settled by
arbitration administered by the American Arbitration Association in accordance with the provisions
of its Commercial Arbitration Rules. The arbitrator will be selected by agreement of the parties
or, if they do not agree on an arbitrator within thirty (30) days after either party has notified
the other of him or its desire to have the question settled by arbitration, then the arbitrator
will be selected pursuant to the procedures of the American Arbitration Association (the “AAA”) in
Denver, Colorado. The determination reached in such arbitration will be final and binding on all
parties. Enforcement of the determination by such arbitrator may be sought in any court of
competent jurisdiction. Unless otherwise agreed by the parties, any such arbitration will take
place in Denver, Colorado, and will be conducted in accordance with the Commercial Arbitration
Rules of the AAA. The prevailing party in the arbitration proceeding may be entitled to
an award of reasonable attorneys’ fees incurred in connection with the arbitration in such amount,
if any, as determined by the panel in its discretion. The costs of the arbitration shall be borne
equally by the parties unless otherwise determined by the panel in its award.

          (m) Limitations Reasonable. The parties to this Agreement agree that the limitations
contained in Section 10 with respect to time, geographical area, and scope of activity are
reasonable. However, if any court shall determine that the time, geographical area, or scope of
activity of any restriction contained in Section 10 is unenforceable, it is the intention of the
parties that such restrictive covenant set forth herein shall not thereby be terminated but shall
be deemed amended to the extent required to render it valid and enforceable.

21

 

          (n) Clawback. Employee hereby acknowledges and agrees that any payment hereunder will
be subject to recovery by the Company pursuant to applicable law and any applicable Company
compensation recovery policy as may be from time to time in effect.

22

 

     IN
WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement on April 25,
2011 effective as of the Effective Date.

	 	 	 	 	 
	 	RESOLUTE ENERGY CORPORATION

 	 
	 	By:  	/s/
James M. Piccone 	 
	 	 	James M. Piccone 	 
	 	 	President 	 
	 
	 	EMPLOYEE

 	 
	 	By:  	
/s/ Theodore Gazulis 	 
	 	 	Theodore Gazulis 	 
	 	 	 	 
	 

23

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