Document:

Exhibit 10.2

 

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”)
is made effective as of May 1, 2015 between AMERICA’S CAR MART, INC., an Arkansas corporation (the “Company”)
and JEFFREY A. WILLIAMS (the “Associate”).

 

W I T N E S S E T H:

 

WHEREAS, the Company is engaged in the business
of the sale and financing of used vehicles (“Company Business”); and

 

WHEREAS, the
Associate is a Senior Executive Officer of the Company, and the Company desires to continue the employment of the Associate, and
the Associate desires to provide his services to the Company upon the terms and conditions hereinafter set forth;

 

WHEREAS, the
Company periodically sells its finance receivables to Colonial Auto Finance, Inc., an Arkansas corporation (“Colonial”)
and services those loans on Colonial’s behalf (collectively, the Company and Colonial are referred to herein as “Car-Mart”);
and

 

WHEREAS, America’s
Car-Mart, Inc., a Texas corporation (the “Parent Company”), owns 100% of the outstanding common stock of the Company;

 

WHEREAS, in order to conduct its business, the
Company owns and uses trade secrets as defined under applicable law, as well as confidential and propriety information; and

 

WHEREAS, the Associate, during the term of his
employment with the Company and in order to carry out his duties with the Company, has or will have contact with the Company’s
customers and employees and has or will have access to and has or will become privy to or acquainted with certain confidential
information and trade secrets, which are owned by the Company and which are regularly used in the business of the Company and which
are generally not known to its competitors;

 

NOW, THEREFORE,
in consideration of the mutual covenants and promises contained herein, the parties hereto, each intending to be legally
bound hereby, agree as follows:

 

1.       Employment.
The Company hereby continues the employment of the Associate as a Senior Executive Officer of the Company, and the Associate accepts
such employment. During the term of employment under this Agreement (the “Employment Term”), the Associate shall perform
such duties as shall reasonably be required of a Senior Executive Officer of the Company. The Associate further agrees to perform,
without additional compensation, such other work for the Company and for any subsidiary or affiliate of the Company in which the
Company has an interest, including, without limitation, Colonial and the Parent Company, as the Board of Directors of the Company
or the Parent Company shall from time to time reasonably specify. It is expressly agreed and understood between the Company and
the Associate that the term of this Agreement is in no way dependent upon the Associate’s holding or being elected to any
office of the Company. The Associate may be deemed an employee of, and paid by the Company, Colonial, or the Parent Company, as
reasonably determined by the Company.

 

*Filed under application for confidential treatment.

     

     

    

 

2.       Performance.
The Associate agrees to devote his entire business efforts to the performance of his duties hereunder, provided, however, that
the Associate may engage in personal investment activities not involving the Company so long as they do not interfere with the
performance of his duties hereunder.

 

3.       Term.
Unless otherwise terminated in accordance with Sections 8, 9, 10 or 11, the Employment Term shall be for a term ending April 30,
2020. This Agreement shall be automatically renewed for successive additional Employment Terms of one (1) year each unless notice
of termination is given in writing by either party to the other party at least thirty (30) days prior to the expiration of the
initial Employment Term or any renewal Employment Term.

 

4.       Compensation.

 

(a)       Base
Salary and Benefits. The basic annual salary of the Associate for his employment services hereunder shall be $367,290 or such higher
annual salary, if any, as shall be approved by the Board of Directors of the Parent Company from time to time (the “Base
Salary”), which shall be payable in accordance with the Company’s payroll policy. Nothing contained herein shall affect
or in any way limit the Associate’s rights as an Associate of the Company to participate in any Company 401(k) profit sharing
plan or medical and life insurance programs offered by the Company to its employees, all of which shall be available to the Associate
to the same extent as if this Agreement had not existed, and compensation received by the Associate hereunder shall be in addition
to the foregoing. In addition, nothing contained herein shall affect or in any way limit the Associate’s eligibility to participate
in any nonqualified deferred compensation plan of the Company or the Parent.

 

(b)       Bonus.
In addition to the Base Salary and fringe benefits described above, the Associate shall be eligible to earn an annual cash bonus
(the “Bonus”) during the term hereof beginning May 1, 2015 and ending April 30, 2020. The Bonus shall be based upon
Parent Company’s projected fully diluted earnings per share calculated in accordance with GAAP for each fiscal year (“GAAP
Earnings Per Share”). The Bonus will depend on the Parent Company attaining a minimum of 95% of its projected GAAP Earnings
Per Share, as set forth in Appendix A to this Agreement. The Bonus, if any, shall be paid each fiscal year, within fifteen
(15) days following the Parent Company’s filing of its annual report on Form 10-K for such fiscal year (but no later than
two and one-half (21⁄2) months following the calendar year in which the Bonus was earned), based upon the Parent Company’s
GAAP Earnings Per Share for that fiscal year. Any Bonus shall be deemed to be earned by the Associate if the Associate was an employee
of the Company as of the last day of the fiscal year in question.

 

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(c)       Non-Qualified
Stock Options.

 

(i)       Subject
to Section 4(c)(iii) herein, the Parent Company will grant to the Associate, pursuant to the Parent Company’s Amended and
Restated Stock Option Plan (the “Option Plan”), non-qualified stock options to purchase an aggregate of 30,000 shares
of Parent Company Stock, as follows:

 

(A)       A
non-qualified stock option to purchase 10,000 shares of Parent Company Stock, which will vest in full (or “cliff” vest)
on April 30, 2020, subject to the Associate’s continuous service (as that term is defined in the Option Plan) as of the vesting
date; and

 

(B)       A
non-qualified stock option to purchase 20,000 shares of Parent Company Stock, with vesting of such option subject to the attainment
of certain performance conditions based on the Parent Company’s consolidated net income growth during fiscal years 2016 through
2020. If the Parent Company’s cumulative consolidated net income growth, calculated on a compound basis, for the five (5)
fiscal years ending April 30, 2020 is equal to 10% or more, the stock option will “cliff” vest in its entirety (20,000
shares) on the date which marks the fifth (5th) anniversary of the stock option grant date (the “Vesting Date”).
If the Parent Company’s cumulative consolidated net income growth, calculated on a compound basis, for the five (5) fiscal
years ending April 30, 2020 is equal to 5% or more but less than 10%, the stock option will “cliff” vest as to 10,000
shares on the Vesting Date. If the Company’s cumulative consolidated net income growth, calculated on a compound basis, for
the five (5) fiscal years ending April 30, 2020 is less than 5%, the stock option will be forfeited.

 

(ii)       For
purposes of this Section 4(c), “consolidated net income” for a given fiscal year shall mean “Net income”
as reported in the Company’s consolidated statement of operations included in the Company’s Annual Report on Form 10-K
for such fiscal year as filed with the Securities and Exchange Commission, except that if on the Vesting Date the Company has not
yet filed its Annual Report on Form 10-K for the fiscal year ending April 30, 2020, “consolidated net income” for fiscal
year 2020 shall be the Company’s “Net income” as reported in the Company’s public earnings press release
for such fiscal year. All terms used in this Section 4(c) shall have the definitions set forth in this Agreement, the Option Plan
or the applicable Stock Option Agreement, as the case may be.

 

(iii)       The
stock option grants under this Section 4(c) shall be made on August 5, 2015, the date of the Parent Company’s annual meeting
of shareholders, subject to and contingent upon the approval by such shareholders of the Option Plan.

 

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5.       Expense
Account and Vacations. Matters relating to expense accounts for the Associate, vacations and the like shall be mutually agreed
upon from time to time. However, the Company agrees to reimburse the Associate for all expenses reasonably incurred by him on behalf
of the Company in accordance with the prevailing practices and policies of the Company. In addition, the Associate shall be entitled
to that number of days of paid vacation and paid sick leave as is consistent with the prevailing practices and policies of the
Company for other employees in the same or similar position as that held by the Associate hereunder.

 

6.       Non-Competition,
Non-Solicitation, Non-Disclosure, and Confidentiality Provisions

 

(a)       Non-Solicitation:
Customers. During Associate’s employment and for one (1) year immediately following the cessation of Associate’s employment
with the Company for any reason, Associate shall not, on his own behalf or on behalf of any person, firm, partnership, association,
corporation or business organization, entity or enterprise (except the Company), solicit, call upon, or attempt to solicit or call
upon, any customer of the Company, or any representative of any customer of the Company with a view to selling or providing any
product or service competitive with any product or service sold or provided by the Company in the Company Business, as defined
herein, during the twelve (12) month period immediately preceding cessation of Associate’s employment with the Company, provided
that the restrictions set forth in this section shall apply only to customers of the Company, or representatives of customers of
the Company with whom Associate had material contact during such twelve (12) month period. “Material contact” exists
between Associate and each of the Company’s existing customers: (i) with whom Associate actually dealt for a business purpose
while employed by the Company or to further a business relationship between the customer and the Company; or (ii) whose business
dealings with the Company were handled, coordinated or supervised by Associate or performed by Associate in whole or in part.

 

(b)       Non-Solicitation:
Employees. During Associate’s employment and for one (1) year immediately following the cessation of Associate’s employment
with the Company for any reason, Associate will not solicit or in any manner encourage employees of the Company to leave the employ
of the Company. The foregoing prohibition applies only to employees with whom Associate had material contact pursuant to Associate’s
duties during the twelve (12) month period immediately preceding cessation of Associate’s employment with the Company. “Material
contact” means interaction between Associate and another employee of the Company: (i) with whom Associate actually dealt
or worked with; or (ii) whose employment or dealings with the Company or services for the Company were handled, coordinated or
supervised by Associate. 

 

(c)       Non-Disclosure.

 

(i)       TRADE
SECRETS. Associate acknowledges that the Company owns and uses trade secrets as defined under applicable law. “Trade secret(s)”
means information, without regard to form, including, but not limited to, technical or non-technical data, a formula, a pattern,
a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans,
or a list of actual or potential customers or suppliers which is not commonly known by or available to the public and which information:
(a) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure or use; and (b) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy. Associate further acknowledges that in the course of Associate’s employment
with the Company and in order to carry out Associate’s duties thereunder, Associate has or will become privy to the Trade
Secrets of the Company. Accordingly, Associate shall not disclose, divulge, publish to others, or use for any purpose, except
as necessary to perform Associate’s duties while employed by the Company, any Trade Secret of the Company without the prior
written consent of the Company, for so long as such information shall remain a Trade Secret under applicable law.

 

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(ii)       CONFIDENTIAL
INFORMATION. Associate acknowledges that in order to conduct its business, the Company owns and uses written and unwritten confidential
information. “Confidential Information” means data and information relating to the business of the Company (which
may not rise to the level of a Trade Secret under applicable law) which is or has been disclosed to Associate or of which Associate
became aware as a consequence of or through Associate’s relationship with the Company and which has value to the Company
and is not generally known to its competitors. Confidential Information shall not include any data or information that has been
voluntarily disclosed to the public by the Company (except where such public disclosure has been made by Associate without authorization)
or that has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means.
Associate further acknowledges that in the course of his employment with the Company and in order to carry out his duties thereunder,
Associate has or will become privy to Confidential Information of the Company. Accordingly, Associate agrees that while employed
by the Company, and for a period of two (2) years from the conclusion of Associate’s employment with the Company for any
reason, Associate will not disclose, divulge, publish to others or use for any purpose any Confidential Information of the Company
except to the extent necessary to perform his duties and responsibilities as an Associate for the Company, without the prior written
consent of the Company.

 

(iii)       NOTICE
OF TRADE SECRETS AND CONFIDENTIAL INFORMATION. Associate acknowledges that the Company hereby designates Trade Secrets and Confidential
Information to include, by way of illustration but not limitation, confidential customer and prospective customer lists; information
provided to the Company by its customers or clients or prospective customers or clients; customer preferences; client contacts;
marketing plans, presentations and strategies; products; processes; designs; formulas; methods; clinical data; licenses; software;
computer or electronic data disks or tapes; processes; research and plans for research; computer programs; methods of operations
and costs data; contracts; personnel information; credit terms; financial information (including without limitation information
regarding fee and pricing structures, assets, status of client accounts or credit); or any other information designated as a trade
secret, confidential or proprietary by the Company.

 

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(iv)       TREATMENT
OF TRADE SECRETS AND CONFIDENTIAL INFORMATION. Associate understands and agrees to treat whatever information the Company wants
to protect from disclosure as genuinely “confidential”, i.e., restricting access by pass code, stamping hardcopies
of customer lists “confidential,” and restricting access to the customer list to designated and appropriate personnel,
and the like. Associate further agrees, as an Associate, to use his best efforts and the utmost diligence to guard and protect
the Company’s Trade Secrets and Confidential Information from disclosure to any competitor, customer or supplier of the
Company or any other person, firm, corporation or other entity, unless such disclosure has been specifically authorized by the
Company in writing.

 

(d)       Non-Competition.
Associate acknowledges that the Company is engaged in the Company Business as defined herein. Associate further acknowledges that
the Company Business is primarily concentrated in and focused in Alabama, Arkansas, Georgia, Kentucky, Mississippi, Missouri, Oklahoma,
Tennessee and Texas (hereinafter the “Territory”), and that Associate’s duties and responsibilities were not
limited to any particular area within that region but will be within and throughout the entire Territory, and rendered in connection
with Company Business. Associate further agrees and acknowledges that because of his association with the Company and his access
to Trade Secrets and confidential, proprietary information of the Company which relate to the Company Business as herein defined,
Associate’s competition with the Company as or with a direct competitor in the same line of business as the Company would
damage and impair the business of the Company. Therefore, during the term of his employment and for a period of one (1) year from
the conclusion of Associate’s employment with the Company for any reason, Associate shall not, for himself or on behalf of
any other person, firm, partnership, association, corporation, business organization, entity or enterprise, perform duties which
are substantially similar to the duties performed by Associate on behalf of Company within the Territory for any business engaged
in the Company Business as defined herein.

 

(e)       Ownership
of Work Product. For purposes of this Agreement, “Work Product” shall mean the data, materials, documentation, computer
programs, inventions (whether or not patentable), and all works of authorship, including all worldwide rights therein under patent,
copyright, trade secret, confidential information, and other property rights, created or developed in whole or in part by Associate,
relating to the Company Business whether prior to the date of this Agreement or in the future, either (i) while employed by the
Company and that have been or will be paid for by the Company, or (ii) while employed by the Company (whether developed during
working hours or not) and not otherwise the subject of a written agreement between the Company and Associate. All Work Product
shall be considered work made for hire by Associate and owned by the Company. If any of the Work Product may not, by operation
of law, be considered work made for hire by Associate for the Company, or if ownership of all rights, title, and interest of the
intellectual property rights therein shall not otherwise vest exclusively in the Company, Associate hereby assigns to the Company,
and upon the future creation thereof automatically assigns to the Company without further consideration, the ownership of all
Work Product. The Company shall have the right to obtain and hold in its own name patents, copyrights, registrations and any other
protection available in the Work Product. Associate agrees to perform, during and after his employment, such further acts as may
be necessary or desirable to transfer, perfect, and defend the Company’s ownership of the Work Product as reasonably requested
by the Company.

 

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(f)       Return
of Company Property. All Company property, including, but not limited to, equipment, devices, records, correspondence, documents,
files, reports, studies, manuals, compilations, drawings, blueprints, sketches, videos, memoranda, computer software and programs,
data or any other information, including Trade Secrets and Confidential Information as set forth herein, (whether originals, copies
or extracts, stored in any medium), whether prepared or developed by Associate or otherwise coming into Associate’s possession,
whether maintained by Associate in the facilities of the Company, at Associate’s home, or at any other location, is, and
shall remain, the exclusive property of the Company and shall be promptly delivered to the Company, with no copies or reproductions
retained by Associate, in the event of Associate’s termination for any reason, or at any other time or times the Company
may request. Upon termination of employment for any reason, Associate agrees to sign and deliver the “Termination Certification”
attached hereto as Appendix B.

 

(g)       Reasonable
Restrictions. Associate agrees and acknowledge that the restrictions contained in this Agreement are reasonable and necessary
in order to protect the valuable proprietary assets, goodwill and business of the Company and that the restrictions will not prevent
or unreasonably restrict his ability to earn a livelihood. Associate also agrees and acknowledges that if his employment with
the Company ends for any reason, Associate will be able to earn a livelihood without violating the restrictions contained in this
Agreement and that Associate’s ability to earn a livelihood without violating said restrictions is an important reason in
Associate choosing to sign this Agreement.

 

7.       Remedies.
The Associate expressly agrees that the remedy at law for any breach of the provisions of Section 6 will be inadequate and that
upon any such breach or threatened breach, the Company shall be entitled, as a matter of right, to injunctive relief in any court
of competent jurisdiction, in equity or otherwise, to enforce the specific performance of the Associate’s obligations under
these provisions without the necessity of proving the actual damage to the Company or the inadequacy of a legal remedy.

 

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8.       Termination
Without Compensation.

 

(a)       The
Employment Term will terminate as of the end of the term of this Agreement unless terminated earlier in accordance with this Section
8, Section 9, Section 10, or Section 11.

 

(b)       The
Employment Term may also be terminated by the Company for cause (“Cause”) with written notice to the Associate upon
the occurrence of any of the following:

 

(i)       the
commission by the Associate of any deliberate and premeditated act involving moral turpitude detrimental to the economic interests
of the Company;

 

(ii)       the
conviction of the Associate of a felony;

 

(iii)       the
willful failure or refusal of the Associate to perform his duties hereunder (which failure or refusal persists after written notice
from the Company to the Associate complaining of such failure or refusal) or the Associate’s gross negligence of a material
nature in connection with the performance of such duties; or

 

(iv)       the
breach by the Associate of any provision of this Agreement which is not cured within thirty (30) days subsequent to written notice
from the Company to the Associate of the breach.

 

(c)       Upon
termination of the Employment Term under subsections (a) or (b) above, the parties hereto will be relieved of any further obligations
hereunder except for any obligations set forth in Section 6.

 

9.       Termination
Without Cause. The Company shall have the right to terminate the Employment Term without Cause at any time. If the termination
is effected by the Company other than as described in Section 8, then, under such circumstances and subject to the Associate’s
continued compliance with the terms of this Agreement, (i) the Associate’s Base Salary then in effect hereunder will
continue to be payable in accordance with the Company’s payroll policy through the Employment Term, (ii) the Associate
shall be paid within sixty (60) days after termination the pro rata portion of the Bonus earned, if any, through the date of termination,
(iii) all outstanding and unvested stock options previously granted to the Associate by the Parent Company shall immediately vest
in full without regard to the achievement of any applicable performance conditions, unless otherwise prohibited by the Option Plan
(or successor plan) or the stock option agreements between the Parent Company and the Associate with respect to such stock options,
and (iv) all outstanding and unvested shares of restricted stock (if any) previously granted to the Associate by the Parent Company
shall immediately vest in full without regard to the achievement of any applicable performance conditions, unless otherwise prohibited
by the Amended and Restated Stock Incentive Plan (the “Incentive Plan”) (or successor plan) or the restricted stock
agreements between the Parent Company and the Associate with respect to such restricted stock awards; provided, however, that any
shares of restricted stock that are intended to constitute performance-based compensation within the meaning of Section 162(m)
of the Internal Revenue Code of 1986, as amended (the “Code”), shall become vested only to the extent provided pursuant
to the terms of the applicable restricted stock agreement and the provisions of this Section 9 shall not apply to any shares of
restricted stock that are intended to constitute performance-based compensation. Bonus payments to the Associate in accordance
with this Section 9 shall be paid no later than two and one-half (21⁄2) months following the calendar year in which the termination
without Cause occurred.

 

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Notwithstanding the foregoing, the Associate
shall not be entitled to receive any of the payments or benefits described in Section 9 unless, not later than sixty (60) days
after the termination date, the Associate has executed a release of claims against the Company and its affiliates (the “Release”),
and the period during which the Release may be revoked has expired without the Associate having revoked the Release. None of the
payments or benefits described in Section 9 shall be paid until the Release has been signed and become effective, and any payments,
which would otherwise be payable during such sixty-day period prior to the date the Release becomes effective, shall be accumulated
and paid to the Associate on the first payroll date following the date the Release becomes effective, without interest, or, if
such sixty-day period begins in one calendar year and ends in a second calendar year, the first payroll date during the second
calendar year following the date the Release becomes effective, as described above.

 

10.       Death
of the Associate. If the Associate dies during the Employment Term, the Employment Term shall terminate, and within 60 days
after death, or as soon thereafter as administratively practicable, the Company will pay to the Associate’s estate (i) the
Associate’s Base Salary then in effect through the end of the calendar month in which such death occurs, and (ii) the
pro rata portion of the Bonus earned, if any, through the date of death. In addition, all outstanding and unvested stock options
previously granted to the Associate by the Parent Company shall immediately vest in full, without regard to the achievement of
any applicable performance conditions, unless otherwise prohibited by the Option Plan (or successor plan) or the stock option agreements
between the Parent Company and the Associate with respect to such stock options, and all outstanding and unvested shares of restricted
stock (if any) previously granted to the Associate by the Parent Company shall immediately vest in full, without regard to the
achievement of any applicable performance conditions, unless otherwise prohibited by the Incentive Plan (or successor plan) or
the restricted stock agreements between the Parent Company and the Associate with respect to such restricted stock awards.

 

11.       Termination
Following Disability. If the Associate becomes disabled during the Employment Term, the Company may terminate the Employment
Term, in which event the Company will pay to the Associate the Associate’s Base Salary then in effect, payable in accordance
with the Company’s payroll policy through the end of the Employment Term; provided, however, any amounts payable to the Associate
under the Company’s disability insurance policy shall be deducted from the amounts payable to the Associate hereunder. For
the purposes of this Agreement, the Associate shall be deemed to be “disabled” when, by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be expected to last for a period of not less than
twelve (12) consecutive months, he has received replacement income for a period of at least three (3) months under the Company’s
disability insurance policy, or if the Company does not have a disability insurance policy for the Associate, the Associate shall
be deemed disabled if he is unable to perform his services or discharge his duties as an Associate of the Company by reason of
any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for
a period of not less than twelve (12) consecutive months. Any disability, as defined herein, shall not constitute “Cause”
for purposes of Section 8(b) hereof. In addition, all outstanding and unvested stock options previously granted to the Associate
by the Parent Company shall immediately vest in full, without regard to the achievement of any applicable performance conditions,
unless otherwise prohibited by the Option Plan (or successor plan) or the stock option agreements between the Parent Company and
the Associate with respect to such stock options, and all outstanding and unvested shares of restricted stock (if any) previously
granted to the Associate by the Parent Company shall immediately vest in full, without regard to the achievement of any applicable
performance conditions, unless otherwise prohibited by the Incentive Plan (or successor plan) or the restricted stock agreements
between the Parent Company and the Associate with respect to such restricted stock awards.

 

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12.       Change
in Control of the Parent Company

 

(a)       If
a Double Trigger Event (as defined in Section 12(c) herein) occurs in connection with a Change in Control (as defined in Section
12(b) herein) of the Parent Company, on the sixty-day anniversary of the date of the Double Trigger Event, (i) the Company shall
pay to the Associate a lump sum cash payment equal to 2.99 times the Associate’s Base Salary in effect immediately prior
to the Change in Control; (ii) all outstanding and unvested stock options previously granted to the Associate by the Parent Company
shall immediately vest in full, without regard to the achievement of any applicable performance conditions, unless otherwise prohibited
by the Option Plan (or successor plan) or the stock option agreements between the Parent Company and the Associate with respect
to such stock options; and (iii) all outstanding and unvested shares of restricted stock (if any) previously granted to the Associate
by the Parent Company shall immediately vest in full, without regard to the achievement of any applicable performance conditions,
unless otherwise prohibited by the Incentive Plan (or successor plan) or the restricted stock agreements between the Parent Company
and the Associate with respect to such restricted stock awards (collectively, (i), (ii) and (iii) are referred to as the “Change
in Control Payments”).

 

Notwithstanding the foregoing, the
Associate shall not be entitled to receive any of the payments or benefits described in Section 12 unless, not later than sixty
(60) days after the termination date, the Associate has executed a release of claims against the Company and its affiliates (the
“Release”), and the period during which the Release may be revoked has expired without the Associate having revoked
the Release. None of the payments or benefits described in Section 12 shall be paid until the Release has been signed and become
effective, and any payments, which would otherwise be payable during such sixty-day period prior to the date the Release becomes
effective, shall be accumulated and paid to the Associate on the first payroll date following the date the Release becomes effective,
without interest, or, if such sixty-day period begins in one calendar year and ends in a second calendar year, the first payroll
date during the second calendar year following the date the Release becomes effective, as described above.

 

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(b)       For
purposes of this Section 12, “Change in Control” of the Parent Company shall mean:

 

(i)       Change
in Ownership. The acquisition by an individual, entity or group (within the meaning of Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”)) (a “Person”) of ownership of stock of the Parent Company that, together
with stock held by such Person, constitutes more than 50% of the total fair market value or total voting power of the stock of
the Parent Company. However, if any Person is considered to own more than 50% of the total fair market value of total voting power
of the stock of the Parent Company, the acquisition of additional stock by the same Person is not considered to cause a change
in ownership of the Parent Company (or to cause a change in the effective control of the Parent Company). An increase in the percentage
of stock owned by any one Person as a result of a transaction in which the Parent Company acquires its stock in exchange for property
will be treated as an acquisition of stock for purposes of this paragraph. This paragraph applies only when there is a transfer
of stock of the Parent Company (or issuance of stock of the Parent Company) and stock in the Parent Company remains outstanding
after the transaction; or

 

(ii)       Change
in Effective Control. (A) the acquisition by any Person during the 12-month period ending on the date of the most recent acquisition
by such Person, of ownership of stock of the Parent Company possessing 35% or more of the total voting power of the stock of the
Parent Company; or (B) the replacement of a majority of members of the Parent Company’s Board of Directors during any 12-month
period by directors whose appointment or election is not endorsed by a majority of the members of the Parent Company’s Board
of Directors prior to the date of the appointment or election.

 

A change in effective control also may
occur in any transaction in which either of the two corporations involved in the transaction has a “Change in Ownership”
under paragraph (i) or “Change in Ownership of a Substantial Portion of the Company’s Assets” under paragraph
(iii). If any one Person is considered to effectively control the Parent Company, the acquisition of additional control of the
Parent Company by the same Person is not considered to cause a change in the effective control of the Parent Company (or to cause
a “Change in Ownership” of the Parent Company within the meaning of paragraph (i) above); or

 

(iii)       Change
in Ownership of a Substantial Portion of Assets. The acquisition by any Person during the 12-month period ending on the date of
the most recent acquisition by such Person, of assets from the Parent Company that have a total gross fair market value equal to
or more than 40% of the total gross fair market value of all of the assets of the Parent Company immediately prior to such acquisition(s).
For this purpose, gross fair market value means the value of the assets of the Parent Company, or the value of the assets being
disposed of, determined without regard to any liabilities associated with such assets. No Change in Control shall be deemed to
have occurred in the event of a transfer to a related person or as described in Code Section 409A.

 

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The definition of Change in Control
in this Subsection 12(b), and all other terms and provisions of this Agreement, shall be interpreted at all times in such a manner
as to comply with Code Section 409A, meaning that no additional income tax is imposed on the Associate pursuant to Code Section
409A(1)(a).

 

(c)       For
purposes of this Section 12, a “Double Trigger Event” shall be deemed to occur if, within the period beginning six
(6) months prior to a Change in Control and ending two (2) years following such Change in Control, (i) the Associate’s employment
is involuntarily terminated by the Company or the Parent Company (or the surviving or acquiring entity, as the case may be), other
than for Cause, or (ii) the Associate terminates his employment for Good Reason (as defined in Section 12(d) herein). If the termination
of the Associate’s employment, as contemplated by this Section 12(c), occurs prior to the Change in Control, then the Associate
shall be treated for purposes of this Section 12 as being employed on the date the Change in Control becomes effective and the
Associate’s Base Salary in effect immediately prior to such termination shall be deemed in effect, for purposes of this Section
12, immediately prior to the Change in Control. For purposes of this Section 12, the date of the Double Trigger Event shall be
the later of the effective date of the Change in Control and the date of the Associate’s termination of employment as contemplated
in this Section 12(c).

 

(d)       For
purposes of this Section 12, “Good Reason” shall mean:

 

(i)        If
the Associate is a party to an employment or service agreement with the Company, the Parent Company or an affiliate of the Company
that supersedes and replaces, in whole or in part, any provisions of this Agreement and such agreement provides for a definition
of Good Reason, the definition contained therein; or

 

(ii)       If
no such agreement exists, the Associate’s resignation from the Company within thirty (30) days following the occurrence of
any of the following events with respect to the Associate:

 

(A)       Without
the Associate’s express written consent, the significant reduction of the Associate’s duties, authority, responsibilities,
or reporting relationships relative to the Associate’s duties, authority, responsibilities, or reporting relationships as
in effect immediately prior to such reduction, or the assignment to the Associate of such reduced duties, authority, responsibilities,
or reporting relationships, which reduction or assigned reduction remains in effect five (5) business days after written notice
by the Associate to the Chief Executive Officer or the Chief Financial Officer of the Parent Company (or the surviving or acquiring
entity, as the case may be) of such conditions; provided, however, that the mere occurrence of a Change in Control shall not, in
and of itself, constitute a material adverse change in the Associate’s duties, authority, responsibilities or reporting relationships.

 

    12

     

    

 

(B)       A
material reduction by the Company or the Parent Company (or the surviving or acquiring entity, as the case may be) in the Base
Salary, bonus structure or benefits of the Associate as in effect immediately prior to such reduction, with the result that the
Associate’s overall benefits package is significantly reduced; or

 

(C)       The
relocation of the Associate’s principal work location to a facility or a location more than fifty (50) miles from the Associate’s
then present principal work location, without the Associate’s express written consent.

 

(e)       The
Change in Control Payments shall be in addition to any other rights and benefits for which the Associate is eligible, either by
way of contract or with respect to rights and benefits generally available to other executive officers or Associates of the Company.

 

13.       Definition
of Termination of Employment. “Termination of Employment” as used in this Agreement shall have the same meaning
as set out in, and shall occur on the date determined in accordance with, Section 1.409A-1(h) of the regulations promulgated under
Code Section 409A.

 

14.Specified Employee Delay. If the
Associate is a “specified employee” within the meaning of Code Section 409A, any benefits or payments (including installments
and insurance premiums and contributions) which (a) constitute a “deferral of compensation” under Code Section 409A,
(b) become payable as a result of the Associate’s termination of employment for reasons other than death, and (c) become
due under this Agreement during the first six (6) months (or such longer period as required by Code Section 409A) after termination
of employment shall be delayed and all such delayed payments (or delayed installments, premiums or contributions) shall be paid
to the Associate in full in the seventh (7th) month after the date of termination and all subsequent payments (or installments)
shall be paid in accordance with their original payment schedule. To the extent that any insurance premiums or other benefit contributions
constituting a “deferral of compensation” become subject to the above delay, the Associate shall be responsible for
paying such amounts directly to the insurer or other third party and shall receive reimbursement from Company for such amounts
in the seventh (7th) month as described above. This paragraph shall not apply to payments made as a result of a termination
of employment that is the result of the Associate’s death.

 

15.       Notices.
All notices, demands and requests which may be given or which are required to be given by either party to the other, and any exercise
of a right of termination provided by this Agreement, shall be in writing and shall be deemed effective when either: (a) personally
delivered to the intended recipient; (b) sent by certified or registered mail, return receipt requested, addressed to the
intended recipient at the address specified below; (c) delivered in person to the address set forth below for the party to
which the notice was given; (d) deposited into the custody of a nationally recognized overnight delivery service such as FedEx
Corporation or United Parcel Service, Inc., addressed to such party at the address specified below; or (e) sent by facsimile,
telegram or telex, provided that receipt for such facsimile, telegram or telex is verified by the sender and followed by a notice
sent in accordance with one of the other provisions set forth above. Notices shall be effective on the date of delivery, or receipt
of, if delivery is not accepted, on the earlier of the date that delivery is refused or three (3) days after the date the notice
is mailed. For purposes of this paragraph, the addresses of the parties for all notices are as follows (unless changes by similar
notice in writing are given by the particular person whose address is to be changed):

 

    13

     

    

 

If to the Associate, to Jeffrey A.
Williams, ____________________________ ________________________________________________;

 

If to the Company, to America’s
Car-Mart, Inc., 802 S. E. Plaza Avenue, Suite 200, Bentonville, Arkansas 72712, Fax #479-273-7556.

 

With a copy to W. Brett Papasan, Chief
Legal Officer, 802 S. E. Plaza Avenue, Suite 200, Bentonville, Arkansas 72712, Fax #479-271-0796;

 

And a copy to William H. Henderson,
Chief Executive Officer, 802 S. E. Plaza Avenue, Suite 200, Bentonville, Arkansas 72712, Fax #479-464-4234.

 

Any party hereto may designate a different address
by written notice given to the other parties.

 

16.       Governing
Law. This agreement shall be construed in accordance with and governed by the laws of the State of Arkansas.

 

17.       Compliance
with Section 409A. The payments due under this Agreement are intended to comply with Section 409A of the Code (“Code
Section 409A”) or an exemption thereunder and shall be construed and administered in accordance with Section 409A.
Notwithstanding any other provision of this Agreement, payments of “nonqualified deferred compensation” provided under
this Agreement may only be made upon an event and in a manner that complies with Code Section 409A or an applicable exemption.
Any payments under this Agreement that may be excluded from Code Section 409A either as separation pay due to an involuntary separation
from service or as a short-term deferral shall be excluded from Code Section 409A to the maximum extent possible. To the extent
Code Section 409A applies, each installment payment provided under this Agreement shall be treated as a separate payment. Any payments
of “nonqualified deferred compensation” to be made under this Agreement by reason of a termination of employment shall
only be made if such termination of employment constitutes a “separation from service” under Code Section 409A. Notwithstanding
the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Code
Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses
that may be incurred by the Associate on account of non-compliance with Code Section 409A. To the extent required by Code Section
409A, each reimbursement or in-kind benefit provided under this Agreement shall be provided in accordance with the following: (i)
the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (ii) any reimbursement of an eligible
expense shall be paid to the Associate on or before the last day of the calendar year following the calendar year in which the
expense was incurred; and (iii) any right to reimbursements or in-kind benefits under this Agreement shall not be subject to liquidation
or exchange for another benefit.

 

    14

     

    

 

18.       Section
280G.

 

(a)       In
the event that the total amount of payments to be received by the Associate, pursuant to this Agreement or otherwise, that are
contingent upon a change in ownership or control (within the meaning of Section 280G of the Code) would, but for this Section 18(a),
be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the amount of payments
to be received by the Associate pursuant to this Agreement or otherwise shall be reduced to the maximum amount that will cause
the total amounts of the payments not to be subject to the Excise Tax, but only if the amount of such payments, after such reduction
and after payment of all applicable taxes on the reduced amount, is equal to or greater than the amount of such payments the Associate
would otherwise be entitled to retain without such reduction after the payment of all applicable taxes, including the Excise Tax.

 

(b)       The
accounting firm engaged by the Company for general audit purposes (the “Audit Firm”) shall perform any calculations
necessary in connection with this Section 18; provided that, if for any reason the Audit Firm is unable to, or declines to, perform
such calculations, the Company shall engage such other accounting firm as the Audit Firm shall recommend in writing to the Company
to perform such calculations (the Audit Firm or such other accounting firm, as applicable, being hereinafter referred to as the
“Accounting Firm”).  The Company shall bear all expenses with respect to the determinations by such Accounting
Firm required to be made hereunder. The Accounting Firm engaged to make the determinations under this Section 18 shall provide
its calculations, together with detailed supporting documentation, to the Associate and the Company within fifteen (15) calendar
days after the date on which the Associate’s right to a payment contingent on a Change in Control is triggered (if requested
at that time by Associate or the Company) or such other time as requested by the Associate or the Company.  If the Accounting
Firm determines that no Excise Tax is payable with respect to such payments, it shall furnish the Associate and the Company with
an opinion reasonably acceptable to Associate that no Excise Tax will be imposed with respect to such payments.  Any good
faith determinations of the Accounting Firm made hereunder shall be final, binding, and conclusive upon Associate and the Company.
If a reduction in payments or benefits constituting “parachute payments” is required by Section 18(a), the reduction
shall occur in the following order unless the Associate elects in writing a different order (provided, however, that such election
shall be subject to the Company’s approval if made on or after the date on which the event that triggers the payment occurs
and to the extent that such election does not violate Code Section 409A): reduction of cash payments (in reverse order of the date
on which such cash payments would otherwise be made with the cash payments that would otherwise be made last being reduced first);
cancellation of accelerated vesting of stock awards; reduction of employee benefits.  In the event that accelerated vesting
of stock awards is to be reduced, such accelerated vesting shall be cancelled in the reverse order of the grant date of the Associate’s
stock awards unless the Associate elects in writing a different order for cancellation.

 

    15

     

    

 

19. Assignability. The Associate may
not assign his interest in or delegate his duties under this Agreement. The rights and obligations of the Company hereunder may
be assigned only by operation of law in connection with a merger in which the Company is not the surviving corporation or in connection
with the sale of substantially all of the assets of the Company; and in the latter event, such assignment shall not relieve the
Company of its obligations hereunder.

 

20.       Binding
Effect. This Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns.

 

21.       Entire
Agreement; Modification. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject
matter hereof and may not be modified or amended in any way except in writing by the parties hereto. This Agreement supersedes
and replaces any and all prior employment agreements between the Company and the Associate, all of which are hereby terminated
and declared null and void; provided, however, this Agreement shall not affect, in any manner, previously awarded restricted stock
or stock options, which awards shall remain in full force and effect in accordance with the terms of such previous awards.

 

22.       Duration.
Notwithstanding the termination of the Employment Term and of the Associate’s employment by the Company, this Agreement shall
continue to bind the parties for so long as any obligations remain under this Agreement, and, in particular, the Associate shall
continue to be bound by the terms of Section 6.

 

23.       Waiver.
No waiver by the Company of any breach by the Associate of this Agreement shall be construed to be a waiver as to succeeding breaches.

 

24.       Enforceability.
The covenants and provisions contained herein are severable and are to be interpreted as such to the extent permitted by applicable
law. The parties understand, acknowledge and agree that should any provision of this Agreement be declared or determined by any
court of competent jurisdiction to be unenforceable or invalid for any reason, the validity of the remaining parts, terms or provisions
of this Agreement shall not be affected thereby, and that the Agreement will be amended to delete or modify, as necessary, any
invalid or unenforceable parts, terms or provisions to the extent necessary to allow for enforcement.

 

25.       Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same agreement.

 

[SIGNATURE PAGE FOLLOWS.]

 

    16

     

    

 

IN WITNESS WHEREOF, the parties have executed
this Agreement on June 22, 2015, but this Agreement shall be effective as of the day and year first above written.

 

 

	 	COMPANY:	 
	 	 	 
	 	AMERICA’S CAR-MART, INC., an	 
	 	Arkansas corporation	 
	 	 	 	 
	 	By:	 	 
	 	 	 	 
	 	Name:	 	 
	 	 	 	 
	 	Title:	 	 
	 	 	 	 
	 	 	 	 
	 	ASSOCIATE:	 
	 	 	 	 
	 	 	 
	 	Jeffrey A. Williams	 
	 	 	 	 

 

 

 

 

 

(Signature Page to Employment Agreement of Jeffrey
A. Williams)

 

    17

     

    

 

APPENDIX A

 

Applicable to the Bonus pursuant to Section
4(b) 

of Employment Agreement

 

 

	 	Fiscal Year
	 	2016	2017	2018	2019	2020
	Projected GAAP Earnings Per Share	2015 Actual GAAP Earnings Per Share multiplied by 1.10	2016 Projected GAAP Earnings Per Share multiplied by 1.10	2017 Projected GAAP Earnings Per Share multiplied by 1.10	2018 Projected GAAP Earnings Per Share multiplied by 1.10	2019 Projected GAAP Earnings Per Share multiplied by [X.XX]*
	Bonus Potential:	$40,000	$50,000	$60,000	$70,000	$80,000

 

If Parent Company’s actual GAAP Earnings Per Share equals 95-99%
of Parent Company’s projected GAAP Earnings Per Share (rounded to the nearest whole percentage point), the Bonus for such
fiscal year shall be the Bonus Potential for such fiscal year multiplied by 0.67.

 

If Parent Company’s actual GAAP Earnings Per Share equals 100-104%
of Parent Company’s projected GAAP Earnings Per Share (rounded to the nearest whole percentage point), the Bonus for such
fiscal year shall be the Bonus Potential for such fiscal year multiplied by 1.00.

 

If Parent Company’s actual GAAP Earnings Per Share equals 105%
or more of Parent Company’s projected GAAP Earnings Per Share (rounded to the nearest whole percentage point), the Bonus
for such fiscal year shall be the Bonus Potential for such fiscal year multiplied by 1.33.

 

 

 

 

 

*Filed under an
application for confidential treatment.

    A-1

     

    

 

APPENDIX B

 

TERMINATION CERTIFICATION

 

The undersigned Associate certifies that he/she
does not possess and has not failed to return any property belonging to AMERICA’S CAR MART, INC., its parent, subsidiaries,
affiliates, successors or assigns (together, the “Company”) or its customers, including, but not limited to, equipment,
devices, records, correspondence, documents, files, reports, studies, manuals, compilations, drawings, blueprints, sketches, videos,
memoranda, computer software and programs, data or any other information, including Trade Secrets and Confidential Information
as set forth herein (whether originals, copies or extracts, stored in any medium), whether prepared or developed by Associate or
otherwise coming into Associate’s possession, whether maintained by Associate in the facilities of the Company, at Associate’s
home, or at any other location.

 

Associate further certifies that he/she will
comply with all the terms of his/her Non-Competition, Non-Solicitation, Non-Disclosure, and Confidentiality Agreement.

 

	Date:	 	 	 
	 	 	 	Associate
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

 

 

 

 

 

 

B-1Exhibit 10.1

 

Execution Version

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

RICHARD SCOTT SLOAN

 

This EMPLOYMENT
AGREEMENT (this “Agreement”), dated as of July 16, 2019 (the “Effective Date”)
is by and between Grizzly Energy, LLC (“Grizzly”, together with its subsidiaries, the “Company”)
and Richard Scott Sloan (“Executive”).

 

WHEREAS, the
predecessor to Grizzly, Vanguard Natural Resources, Inc., and Executive previously entered into that certain Employment Agreement,
effective as of January 16, 2018, as amended on January 22, 2019 (collectively, the “Prior Agreements”);
and

 

WHEREAS, the
parties desire to amend and restate the Prior Agreements; and

 

WHEREAS, the
parties desire to set forth in writing the terms and conditions of their understandings and agreements in this Agreement.

 

NOW, THEREFORE,
in consideration of the mutual covenants and obligations contained herein, Grizzly hereby agrees to continue to employ Executive
and Executive hereby accepts such continued employment upon the terms and conditions set forth in this Agreement as follows, which
terms shall supplement and amend the Prior Agreements as applicable:

 

1.           Effectiveness;
Employment Period. 

 

(a)          This
Agreement shall become effective and binding upon the Company and the Executive at 12:00 a.m. prevailing Central Standard Time,
on the Effective Date.

 

(b)          Subject
to Section 5, Grizzly hereby agrees to employ Executive, and Executive hereby agrees to be employed by Grizzly, in accordance
with the terms and provisions of this Agreement, for the period commencing as of the Effective Date and ending on December 31,
2020 (the “Employment Period”); provided, however, that the Employment Period shall automatically be
renewed and extended for an additional period of twelve (12) months commencing on January 1, 2021 and expiring on January 1,
2022, and on each successive January 1 thereafter, unless at least ninety (90) days prior to the ensuing expiration date
(but no more than twelve (12) months prior to such expiration date), Grizzly or Executive shall have given ninety (90) days
written notice to the other that it or he, as applicable, does not wish to extend this Agreement (a “Non-Renewal Notice”).
The term “Employment Period” as utilized in this Agreement, shall refer to the Employment Period as so
automatically extended.

 

(c)          During
the term of Executive’s employment with Grizzly, Executive shall serve as the President and Chief Executive Officer of Grizzly
and in so doing, shall report to the Board of Directors of Grizzly (the “Board”). In addition, Executive
shall serve as a member of the Board of Grizzly unless removed by a vote of the shareholders or unless the Nominating Committee
of the Board fails to nominate Executive. Executive shall have supervision and control over, and responsibility for, such management
and operational functions of the Company currently assigned to such positions, and shall have such other powers and duties (including
holding officer positions with Grizzly and one or more subsidiaries of Grizzly) as may from time to time be prescribed by the Board,
so long as such powers and duties are reasonable and customary for the President and Chief Executive Officer of an enterprise comparable
to the Company.

 

     

     

    

 

(d)          During
the term of Executive’s employment with Grizzly, and excluding any periods of vacation and sick leave to which Executive
is entitled, Executive agrees to devote substantially all of his business time to the business and affairs of Grizzly and, to the
extent necessary to discharge the responsibilities assigned to Executive hereunder or by the Board hereafter, to use Executive’s
reasonable best efforts to perform faithfully, effectively and efficiently such responsibilities. During the term of Executive’s
employment with Grizzly, it shall not be a violation of this Agreement for Executive to (i) serve on corporate, civic or charitable
boards or committees, provided that service on any corporate board or committee shall be subject to the prior approval of the Board,
which shall not be unreasonably withheld, (ii) deliver lectures or fulfill speaking engagements, and (iii) manage personal
investments, so long as such activities do not materially interfere with the performance of Executive’s responsibilities
as an employee of the Company in accordance with this Agreement.

 

(e)          The
parties expressly acknowledge that any performance of Executive’s responsibilities hereunder shall necessitate, and the Company
shall provide, access to or the disclosure of Confidential Information (as defined in Section 9(a) below) to Executive and
that Executive’s responsibilities shall include the development of the Company’s goodwill through Executive’s
contacts with the Company’s customers and suppliers.

 

2.          Compensation. 

 

(a)          Base
Salary. Grizzly shall pay Executive an annual base salary (“Base Salary”) at the rate of $720,000
for the period commencing on the Effective Date. The Board shall review Executive’s Base Salary at least annually and may
at its discretion elect to increase Executive’s Base Salary at any time if they deem an increase is warranted. Subject to
Section 5(c)(ii) hereof, the Board may not decrease Executive’s annual Base Salary without his prior written approval.
Base Salary shall be payable in accordance with the ordinary payroll practices of Grizzly, but in no event shall the Base Salary
be paid to Executive less frequently than monthly. The term “Base Salary” as used in this Agreement shall refer to
the Base Salary as it may be so adjusted from time to time.

 

(b)          Annual
Bonus. Executive shall be eligible to receive an annual cash bonus (the “Annual Bonus”) in an amount
to be determined by the Board or compensation committee of the Board (“Committee”) based on performance
goals established by the Board or Committee, as applicable, on an annual basis, with Executive being eligible to receive a target
bonus equal to no less than one hundred percent (100%) of his Base Salary (“Target Bonus”). For
the 2019 calendar year, Executive’s Annual Bonus will be determined in accordance with Schedule 1 to this Agreement.

 

(c)          MIP
Grants. Executive shall be eligible to participate in the Company’s management incentive plan (“MIP”),
if any, in accordance with the terms thereof and as determined by the Board.

 

    	 	2	 

     

    

 

(d)          2019
Bonus. The Company will have paid Executive a cash lump sum payment in the amount of $1,000,000 (the “2019 Bonus”)
on or before January 23, 2019. Executive agrees that in the event Executive’s employment with the Company terminates for
any reason other than a Qualifying Termination before December 31, 2019 (the “Completion Date”), Executive
will be required to repay to the Company within ten (10) days of such termination 100% of the After-Tax Value of the 2019 Bonus.
Notwithstanding anything to the contrary contained herein, in the event of Executive’s Qualifying Termination before the
Completion Date, Executive will not be required to repay any portion of the 2019 Bonus. For purposes of this Section 2(d), (i)
“After-Tax Value of the 2019 Bonus” means the aggregate amount of the 2019 Bonus net of any taxes withheld
by the Company in respect of the 2019 Bonus and (ii) “Qualifying Termination” means the termination of
Executive’s employment (A) by the Company for a reason other than Cause, (B) by Executive for Good Reason, or (C) due to
Executive’s death or Disability.

 

3.          Employee
Benefits.

 

(a)          During
the Employment Period, Grizzly shall provide Executive with coverage under all employee pension and welfare benefit programs, plans
and practices, which Grizzly makes available to its senior executives (including, without limitation, participation in health,
dental, group life, disability, retirement and all other plans and fringe benefits to the extent generally provided to such senior
executives), commensurate with his position in the Company, to the extent permitted under the employee benefit plan or program,
and in accordance with the terms of the program and/or plan.

 

(b)          Executive
shall be entitled to vacation time in accordance with the Company’s published vacation policy which currently provides Executive
with twenty five (25) business days paid vacation in each calendar year. Such vacation time shall accrue at a rate of two
(2) vacation days for each calendar month worked; provided, however, that during any given calendar year, Executive shall
be able to take vacation days that will accrue during that calendar year, even if such days have not yet accrued. A maximum of
ten (10) business days of accrued but unused vacation may be carried over from one calendar year to the next.

 

(c)          Executive
is authorized to incur reasonable expenses in carrying out his duties and responsibilities under this Agreement and promoting the
business of the Company, including, without limitation, reasonable expenses for travel, lodgings, entertainment and similar items
related to such duties and responsibilities. Grizzly will promptly reimburse Executive for all such expenses upon presentation
by Executive of appropriately itemized and approved (consistent with Grizzly’s policy) accounts of such expenditures, in
accordance with the Company’s expense reimbursement policy; provided, however, that in no event shall the expense reimbursement
be made after the last day of the taxable year following the year in which the expense was incurred by Executive, although in the
event that the reimbursement would constitute taxable income to Executive, such reimbursements will be paid no later than March 15th
of the calendar year following the calendar year in which the expense was incurred. No reimbursement or expenses eligible for reimbursement
in any taxable year shall affect the expenses eligible for reimbursement in any other taxable year, nor may the right to receive
a reimbursement of expenses be subject to liquidation or exchanged for another benefit.

 

    	 	3	 

     

    

 

4.          Termination
in Connection with a Change of Control.

 

(a)          Definition
of Change of Control. For purposes of this Agreement, a “Change of Control” shall mean the occurrence
of one or more of the following events:

 

(i)          Any
“person” or “group” within the meaning of those terms as used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended, other than an affiliate of Grizzly, shall become the beneficial owner,
by way of merger consolidation, recapitalization, reorganization or otherwise, of fifty percent (50%) or more of the combined
voting power of the equity interests in Grizzly;

 

(ii)         Grizzly’s
shareholders approve, in one or a series of transactions, a plan of complete liquidation of Grizzly;

 

(iii)        The
sale or other disposition by Grizzly of all or substantially all of its assets in one or more transactions to any person other
than an affiliate of Grizzly; or

 

(iv)        The
“Effective Date” of the Company’s chapter 11 plan of reorganization confirmed in connection with the Company’s
jointly administered chapter 11 cases in Case No. 19-31786 (the “Plan”) (for purposes of this Section
4(a)(iv), “Effective Date” shall have such meaning as defined in the Plan).

 

Notwithstanding the foregoing, (x) with
respect to a payment that is subject to section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
a “Change of Control” shall mean a “change of control event” as defined in the regulations and guidance
issued under section 409A of the Code, and (y) a Change of Control shall not be deemed to have occurred solely by virtue of
the filing of a voluntary petition by, or an involuntary petition against, the Company under Chapter 11 of Title 11 of the U.S.
Code, it being understood, however, that the foregoing shall not (i) apply to consummation of a plan of reorganization or any other
transactions or series of transactions pursuant to, arising from, in connection with, or following, any such petition filing and
(ii) limit in any way a Change of Control under Section 4(a)(iv) of this Agreement.

 

(b)          If,
during the twelve (12) months immediately following the occurrence of a Change of Control of Grizzly (the “Change
of Control Period”), Executive is terminated by the Company without Cause or resigns for Good Reason (as defined
below), (i) Executive will be entitled to receive (A) within ten (10) business days after the Date of Termination
(as defined below), his Accrued Compensation and Reimbursements (as defined below) and (B) on the 60th day following
the Date of Termination, a lump sum payment of an amount equaling two (2) times the sum of his Base Salary and the Annual
Bonus paid or payable with respect to the calendar year preceding the year in which the Change of Control occurs (the “Change
of Control Payment”) and (ii) unless more favorable treatment is provided for in the applicable award agreement,
any unvested awards under the MIP, if any, will immediately vest (assuming achievement at target for any performance-based awards).
Executive shall also receive (i) any Annual Bonus for the year prior to the year in which the Date of Termination occurred that
was earned but not yet paid, which will be paid at the time annual bonuses are paid to other senior management, but in no event
later than March 15th of the calendar year following the calendar year in which the Date of Termination occurs (the
“Earned but Unpaid Bonus”) and (ii) the Pro Rata Bonus (as defined below). Notwithstanding the foregoing,
in the event that Executive experiences a termination under this Section 4(b) in calendar years 2019 or 2020, the Change
of Control Payment shall instead be equal to two (2) times the sum of Executive’s Base Salary and Target Bonus. Solely
for purposes of the Change of Control Payment, Executive’s Base Salary (and Target Bonus, as applicable) shall be valued
as in effect at the time of the Change of Control.

 

    	 	4	 

     

    

 

5.          Termination
of Employment.

 

(a)          Termination
without Cause or Resignation by Executive for Other than Good Reason. Unless otherwise specified in a separate provision of
this Section 5, either Executive or Grizzly, by action of the Board, may terminate this Agreement, and Executive’s employment
by Grizzly, for any reason after providing thirty (30) days written notice to the non-terminating party. If Executive terminates
this Agreement pursuant to this provision for a reason other than Good Reason, Grizzly will pay Executive within ten (10) business
days after the Date of Termination (as defined below) (i) all accrued but unpaid Base Salary, (ii) a prorated amount
of Executive’s Base Salary for accrued but unused vacation days, and (iii) yet unpaid reimbursements for any reasonable
and necessary business expenses incurred by Executive prior to the Date of Termination in connection with his duties hereunder
(such amounts collectively, the “Accrued Compensation and Reimbursements”). Upon termination by Grizzly
of this Agreement pursuant to this Section 5(a) without Cause (other than during a Change of Control Period, which shall be
governed by Section 4(b)) or upon the expiration of the Employment Period due to the non-renewal of Executive’s employment
pursuant to the terms of a Non-Renewal Notice given by the Company under Section 1(b) of this Agreement, Grizzly shall pay
or provide to Executive the following: (A) within ten (10) business days after the Date of Termination, the Accrued Compensation
and Reimbursements; (B) on the 60th day following the Date of Termination, a lump sum payment (the “Severance
Payment”) equal to the amount of Executive’s Base Salary (at the rate in effect hereunder as of the Date of
Termination) for thirty (30) months; (C) the Earned but Unpaid Bonus; and (D) a pro rata Annual Bonus in respect of the number
of months that Executive was employed by the Company during the year in which the Date of Termination occurs, based on actual performance
and paid at the same time annual bonuses are paid to other executives (but in no event later than March 15th of the calendar year
following the calendar year in which the Date of Termination occurs) (the “Pro Rata Bonus”). Notwithstanding
the foregoing, in the event that Executive experiences a termination under this Section 5(a) in calendar year 2019, the
Pro Rata Bonus shall instead be determined in accordance with Schedule 1 to this Agreement. Treatment of any unvested awards under
the MIP, if any, will be as provided under the terms and conditions of the MIP, if any, and the applicable individual award agreement.
Notwithstanding any other provision of this Agreement, the non-renewal of Executive’s employment pursuant to the terms of
a Non-Renewal Notice given by Executive under Section 1(b) of this Agreement shall not constitute a termination of this Agreement
entitling Executive to the Severance Payment under this Section 5(a) or any Change of Control Payment under Section 4(b).

 

(b)          Termination
for Cause. Grizzly, by action of the Board may terminate this Agreement at any time for Cause. Upon termination by Grizzly
for Cause, Executive shall only be entitled to Accrued Compensation and Reimbursements, which amount shall be paid within ten (10) business
days after the Date of Termination. For purposes hereof, “Cause” means any of the following:

 

    	 	5	 

     

    

 

(i)          Executive’s
commission of theft, embezzlement, any other act of dishonesty relating to his employment with Grizzly or any willful violation
of any law, rules or regulation applicable to the Company, including, but not limited to, those laws, rules or regulations established
by the Securities and Exchange Commission, or any self-regulatory organization having jurisdiction or authority over Executive
or the Company; or

 

(ii)         Executive’s
conviction of, or Executive’s plea of guilty or nolo contendere to, any felony or of any other crime involving fraud,
dishonesty or moral turpitude; or

 

(iii)        A
good faith determination by the Board that Executive has materially breached this Agreement (other than during any period of Disability,
as defined below) where such breach is not remedied within ten business (10) days after written demand by the Board for substantial
performance is actually received by Executive which specifically identifies the manner in which the Board believes Executive has
so breached; or

 

(iv)        Executive’s
willful failure to perform his reasonable and customary duties as the President and Chief Executive Officer of Grizzly, which such
failure is not remedied within ten business (10) days after written demand by the Board for substantial performance is actually
received by Executive which specifically identifies the nature of such failure.

 

For purposes of the definition of Cause,
no act or failure to act, on the part of Executive, shall be considered “willful” unless it is done, or omitted to
be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission was in, or not opposed
to, the best interests of the Company. Any act, or failure to act, based upon authority given by the Board or based upon the advice
of counsel for Grizzly shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the
best interests of the Company. Grizzly, by action of the Board, may terminate Executive’s employment for Cause only after:
(i) providing written notice to Executive, which identifies the Cause for Executive’s termination (which notice must
be given within ninety (90) days after the actual notice or discovery of the act(s) or omission(s) constituting such Cause)
and (ii) Executive has been given an opportunity, together with his counsel, to be heard by the Board at a time and location
reasonably designated by the Board.

 

(c)          Termination
with Good Reason. Executive may terminate this Agreement for Good Reason, and thereby resign his employment, after providing
thirty (30) days’ written notice to the Company of the act(s) or omission(s) constituting Good Reason (which notice
must be given within ninety (90) days after the occurrence of such act(s) or omission(s) and describe the act(s) or omission(s)
in reasonable detail) if such act(s) or omission(s) is/are not cured by the Company within thirty (30) days after Executive
provides such written notice. For purposes hereof, “Good Reason” means any of the following reasons that
occurs without Executive’s written consent:

 

    	 	6	 

     

    

 

(i)          A
material reduction in Executive’s authority, duties, or responsibilities (for this purpose, any removal of Executive from
membership on the Board that is due to a vote of the shareholders or due to the failure of the Nominating Committee of the Board
to nominate Executive shall not be treated as satisfying the requirements of this Section 5(c)(i)); or

 

(ii)         Any
reduction in Executive’s Base Salary, other than a cumulative reduction of 0-10% when the Company’s senior management
is affected in a similar manner; or

 

(iii)        Executive’s
removal from his position as President and Chief Executive Officer of Grizzly, other than for Cause or by death or Disability,
during the Employment Period, to a position that is not at least equivalent in authority and duties to President and Chief Executive
Officer of Grizzly; or

 

(iv)        Relocation
of Executive’s principal place of business to a location fifty (50) or more miles from its location as of the Effective
Date; or

 

(v)         A
material breach by Grizzly of this Agreement, which materially and adversely affects Executive; or

 

(vi)        Grizzly’s
failure to make any material payment to Executive required to be made under the terms of this Agreement; or

 

(vii)       Executive’s
voluntary resignation during the 30-day period following the three-month anniversary of the “Effective Date” of the
Plan (for purposes of this Section 5(c)(vii) “Effective Date” shall have such meaning as defined in the Plan).

 

Upon termination of this Agreement pursuant
to this Section 5(c) (other than during a Change of Control Period, which shall be governed by Section 4(b)), Grizzly shall
pay or provide to Executive the following: (i) within ten (10) business days after the Date of Termination, his Accrued Compensation
and Reimbursements, (ii) on the 60th day following the Date of Termination, the Severance Payment, (iii) the Earned but Unpaid
Bonus, and (iv) the Pro Rata Bonus (as modified by Schedule 1 if such termination occurs during calendar year 2019). Treatment
of any unvested awards under the MIP will be as provided under the terms and conditions of the MIP and the applicable individual
award agreement. The parties agree that “Good Reason” shall not exist solely by virtue of the filing of a voluntary
petition by, or an involuntary petition against, the Company under Chapter 11 of Title 11 of the U.S. Code, it being understood,
however, that the foregoing shall not (i) apply to consummation of a plan of reorganization or any other transactions or series
of transactions pursuant to, arising from, in connection with, or following, any such petition filing and (ii) limit in any way
a Change of Control under Section 4(a)(iv) of this Agreement.

 

    	 	7	 

     

    

 

(d)          Termination
by Disability. Grizzly, by action of the Board, may terminate this Agreement at any time if Executive shall be deemed in the
reasonable judgment of the Board to have sustained a “Disability.” Executive shall be deemed to have
sustained a Disability if and only if he shall have been unable to substantially perform his duties as an employee of Grizzly as
a result of sickness or injury, and shall have remained unable to perform any such duties for a period of more than 180 consecutive
days in any twelve (12) month period. Upon termination of this Agreement for Disability, Executive shall only be entitled
to (i) Accrued Compensation and Reimbursements, which amount shall be paid within ten (10) business days after the Date
of Termination, (ii) any other amounts or benefits to which Executive may be entitled under a separate plan, policy or program
maintained by the Company, (iii) the Pro Rata Bonus (as modified by Schedule 1 if such termination occurs during calendar year
2019), and (iv) the Earned but Unpaid Bonus.

 

(e)          Termination
by Death. This Agreement will terminate automatically upon Executive’s death. Upon termination of this Agreement because
of Executive’s death, Grizzly shall pay or provide Executive’s estate with the following: (i) Accrued Compensation
and Reimbursements, which amount shall be paid within ten (10) business days after the Date of Termination, (ii) any
other amounts or benefits to which Executive may be entitled under a separate plan, policy or program maintained by the Company,
(iii) the Pro Rata Bonus (as modified by Schedule 1 if such termination occurs during calendar year 2019), and (iv) the Earned
but Unpaid Bonus.

 

(f)          Date
of Termination. As used in this Agreement, “Date of Termination” means (i) if Executive’s
employment is terminated by his death, the date of his death; (ii) if Executive’s employment is terminated as a result
of a Disability or by Grizzly for Cause or without Cause, then the date specified in a notice delivered to Executive by Grizzly
of such termination, (iii) if Executive’s employment is terminated by Executive for Good Reason, then the date specified
in the notice of such termination delivered to Grizzly by Executive, (iv) if Executive’s employment terminates due to
the giving of a Non-Renewal Notice, the last day of the Employment Period, and (v) if Executive’s employment is terminated
for any other reason, the date specified therefore in the notice of such termination.

 

6.          Employment.

 

Upon termination of
this Agreement, Executive’s employment shall also terminate and cease, and Executive shall be deemed to have voluntarily
resigned from all positions and the Board, if Executive is a member of the Board. Executive shall confirm the foregoing resignation(s)
by submitting to the Company written confirmation of Executive’s resignation(s), and the Company’s obligations to pay
the Severance Payment or the Change of Control Payment shall be subject to the Company’s receipt of such written confirmation.

 

7.          Mitigation.

 

Upon termination of
this Agreement for any reason, amounts to be paid per the express terms of this Agreement shall not be reduced whether or not Executive
obtains other employment.

 

8.          Release.

 

Notwithstanding any
other provision in this Agreement to the contrary, as a condition precedent to receiving any change of control or severance payments
or benefits set forth in Section 4 or 5 of this Agreement (other than the Accrued Compensation and Reimbursements) in
connection with any applicable termination scenario, Executive agrees to execute (and not revoke) a customary severance and release
agreement, including a waiver of all claims, reasonably acceptable to the Company (the “Release”), within
the forty-five (45) day period immediately following the Date of Termination. All revocation rights and timing restrictions
shall be set forth in such Release. If Executive fails to execute and deliver the Release, or revokes the Release, Executive agrees
that he shall not be entitled to receive any severance payments or benefits set forth in Section 4 or 5 of this Agreement
(other than the Accrued Compensation and Reimbursements) in connection with any applicable termination scenario. For purposes of
this Agreement, the Release shall be considered to have been executed by Executive if it is signed by his legal representative
in the case of legal incompetence or on behalf of Executive’s estate in the case of his death.

 

    	 	8	 

     

    

 

9.          Nondisclosure.

 

(a)          It
is understood that Executive during his tenure with the Company has received and will continue to receive access to some or all
of the Company’s various trade secrets and confidential or proprietary information, including information he has not received
before, consisting of, but not limited to, information relating to (i) business operations and methods, (ii) existing
and proposed investments and investment strategies, (iii) financial performance, (iv) compensation arrangements and amounts
(whether relating to the Company or to any of its employees), (v) contractual relationships, (vi) business partners and
relationships, and (vii) marketing strategies (all of the forgoing, “Confidential Information”).
Confidential Information shall not include: (A) information that Executive may furnish to third parties regarding his obligations
under this Section 9 and under Section 10 or (B) information that (1) is general knowledge of Executive or
information that becomes generally available to the public by means other than Executive’s breach of this Section 9
(for example, not as a result of Executive’s unauthorized release of marketing materials), (2) is in Executive’s
possession, or becomes available to Executive, on a non-confidential basis, from a source other than the Company or (3) Executive
is required by law, regulation, court order or discovery demand to disclose; provided, however, that in the case of clause (3),
Executive gives the Company, to the extent permitted by law, reasonable notice prior to the disclosure of the Confidential Information
and the reasons and circumstances surrounding such disclosure to provide the Company an opportunity to seek a protective order
or other appropriate request for confidential treatment of the applicable Confidential Information.

 

(b)          Executive
agrees that all Confidential Information, whether prepared by Executive or otherwise coming into his possession, shall remain the
exclusive property of the Company during Executive’s employment with the Company. Executive further agrees that Executive
shall not, except for the benefit of the Company pursuant to the exercise of his duties in accordance with this Agreement or with
the prior written consent of the Company, use or disclose to any third party any of the Confidential Information described herein,
directly or indirectly, either during Executive’s employment with the Company or at any time following the termination of
Executive’s employment with the Company.

 

(c)          Upon
termination of this Agreement, Executive agrees that all Confidential Information and other files, documents, materials, records,
notebooks, customer lists, business proposals, contracts, agreements and other repositories containing information concerning the
Company or the business of the Company (including all copies thereof) in Executive’s possession, custody or control, whether
prepared by Executive or others, shall remain with or be returned to the Company as soon as practicable after the Date of Termination.

 

    	 	9	 

     

    

 

(d)          Nothing
in this Agreement will preclude, prohibit or restrict Executive from (i) communicating with, any federal, state or local administrative
or regulatory agency or authority, including but not limited to the Securities and Exchange Commission (the “SEC”);
(ii) participating or cooperating in any investigation conducted by any governmental agency or authority; or (iii) filing
a charge of discrimination with the United States Equal Employment Opportunity Commission or any other federal state or local administrative
agency or regulatory authority. Nothing in this Agreement, or any other agreement between the parties, prohibits or is intended
in any manner to prohibit, Executive from (A) reporting a possible violation of federal or other applicable law or regulation
to any governmental agency or entity, including but not limited to the Department of Justice, the SEC, the U.S. Congress,
and any governmental agency Inspector General, or (B) making other disclosures that are protected under whistleblower provisions
of federal law or regulation. This Agreement does not limit Executive’s right to receive an award (including, without limitation,
a monetary reward) for information provided to the SEC. Executive does not need the prior authorization of anyone at the Company
to make any such reports or disclosures, and Executive is not required to notify the Company that Executive has made such reports
or disclosures. Nothing in this Agreement or any other agreement or policy of the Company is intended to interfere with or restrain
the immunity provided under 18 U.S.C. §1833(b). Executive cannot be held criminally or civilly liable under any federal
or state trade secret law for the disclosure of a trade secret that is made (i) (A) in confidence to federal, state or local
government officials, directly or indirectly, or to an attorney, and (B) for the purpose of reporting or investigating a suspected
violation of law; (ii) in a complaint or other document filed in a lawsuit or other proceeding, if filed under seal; or (iii) in
connection with a lawsuit alleging retaliation for reporting a suspected violation of law, if filed under seal and does not disclose
the trade secret, except pursuant to a court order. The foregoing provisions regarding protected disclosures are intended to comply
with all applicable laws. If any laws are adopted, amended or repealed after the execution of this Agreement, this Section 9(d)
shall be deemed to be amended to reflect the same.

 

10.         Non-Competition
and Non-solicitation.

 

(a)          As
part of the consideration for the compensation and benefits to be paid to Executive hereunder, to protect Confidential Information
of the Company and its customers and clients that have been and will be entrusted to Executive, the business goodwill of the Company
and its subsidiaries that will be developed in and through Executive and the business opportunities that will be disclosed or entrusted
to Executive by the Company and its subsidiaries, and as an additional incentive for the Company to enter into this Agreement,
during Executive’s employment with Grizzly and through the first anniversary of the Date of Termination (the “Restricted
Period”), Executive will not (other than for the benefit of the Company pursuant to this Agreement), directly or
indirectly:

 

    	 	10	 

     

    

(i)          engage
in, or carry on or assist, individually or as a principal, owner, officer, director, employee, shareholder, consultant, contractor,
partner, member, joint venturer, agent, equity owner or in any other capacity whatsoever any (A) Competing Business or (B) Business
Enterprise (as defined below) that is otherwise directly competitive with the Company within the states in which the Company conducts
business. “Competing Business” means, during Employment Period, any business directly competitive with
the business in which the Company is engaged from time to time in connection with the exploration and production of oil and gas
in recognized basins and, following the Employment Period, where Grizzly was actively conducting such business as of the Date of
Termination and during the one year period preceding the Date of Termination;

 

(ii)         perform
for any corporation, partnership, limited liability company, sole proprietorship, joint venture or other business association or
entity (a “Business Enterprise”) engaged in any Competing Business any duty Executive has performed for
the Company that involved Executive’s access to, or knowledge or application of, Confidential Information;

 

(iii)        induce
or attempt to induce any customer, supplier, licensee or other business relation of the Company to cease doing business with the
Company or in any way interfere with the relationship between any such customer, supplier, licensee or business relation and the
Company;

 

(iv)        induce
or attempt to induce any customer, supplier, licensee or other business relation of the Company with whom Executive had direct
business contact in dealings during the Employment Period in the course of his employment with the Company to cease doing business
with the Company or in any way interfere with the relationship between any such customer, supplier, licensee or business relation
and the Company; or

 

(v)         solicit
with the purpose of hiring or hire any person who is or, within 180 days after such person ceased to be an employee of the
Company, was an employee of the Company.

 

(b)          Notwithstanding
the duration of the restrictions set forth in Section 10(a) above and subject to Section 10(e) below, the restrictions
set forth under Sections 10(a)(i) and (ii) shall expire after 180 days following the Date of Termination, if Executive
terminates this Agreement under Sections 5(c) or 4(b) hereof or the Company terminates Executive’s employment without
Cause under Sections 5(a) or 4(b).

 

(c)          Notwithstanding
the foregoing restrictions of this Section 10, nothing in this Section 10 shall prohibit (i) any investment by Executive,
directly or indirectly, in securities which are issued by a Business Enterprise involved in or conducting a Competing Business,
provided that Executive, directly or indirectly, does not own more than five percent (5%) of the outstanding equity or voting
securities of such Business Enterprise or (ii) Executive, directly or indirectly, from owning any interest in any Business
Enterprise which conducts a Competing Business if such interest in such Business Enterprise is owned as of the date of this Agreement
and Executive does not have the right, in the case of (i) or (ii), through the ownership of a voting interest or otherwise,
to direct the activities of or associated with the business of such Business Enterprise.

    	 	11	 

     

    

 

(d)          Executive
acknowledges that each of the covenants of Section 10(a) are in addition to, and shall not be construed as a limitation upon,
any other covenant provided in Section 10(a). Executive agrees that the geographic boundaries, scope of prohibited activities,
and time duration of each of the covenants set forth in Section 10(a) are reasonable in nature and are no broader than are
necessary to maintain the confidentiality and the goodwill of the Company’s proprietary and Confidential Information, plans
and services and to protect the other legitimate business interests of the Company, including without limitation the goodwill developed
by Executive with Company’s customers, suppliers, licensees and business relations.

 

(e)          If,
during any portion of the Restricted Period, Executive is not in compliance with the terms of Section 10(a), the Company shall
be entitled to, among other remedies, compliance by Executive with the terms of Section 10(a) for an additional period of
time (i.e., in addition to the Restricted Period) that shall equal the period(s) over which such noncompliance occurred.

 

(f)          The
parties hereto intend that the covenants contained in Section 10(a) be construed as a series of separate covenants, one for
each defined province in each geographic area in which Executive on behalf of the Company conducts business. Except for geographic
coverage, each such separate covenant shall be deemed identical in terms to the applicable covenant contained in Section 10(a).
Furthermore, each of the covenants in Section 9(a) shall be deemed a separate and independent covenant, each being enforceable
irrespective of the enforceability (with or without reformation) of the other covenants contained in Section 10(a).

 

11.         Notices.

 

All notices and other
communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered
personally, mailed by certified mail (return receipt requested) or sent by overnight delivery service to the parties at the following
addresses or at such other addresses as shall be specified by the parties by like notice, in order of preference of the recipient:

 

To Grizzly or the Company:  To Executive:

To the Secretary of Grizzly   At the most recent address on file

 

Notice so given shall, in the case of mail,
be deemed to be given and received on the fifth calendar day after posting, and in the case overnight delivery service, on the
date of actual delivery.

 

12.         Severability
and Reformation.

 

If any one or more
of the terms, provisions, covenants or restrictions of this Agreement shall be determined by a court of competent jurisdiction
to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions shall remain in full force
and effect, and the invalid, void or unenforceable provisions shall be deemed severable. Moreover, if any one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or
subject, it shall be reformed by limiting and reducing it to the minimum extent necessary, so as to be enforceable to the extent
compatible with the applicable law as it shall then appear.

    	 	12	 

     

    

 

13.         Assignment.

 

This Agreement shall
be binding upon and inure to the benefit of the heirs and legal representatives of Executive and the permitted assigns and successors
of Grizzly, but neither this Agreement nor any rights or obligations hereunder shall be assignable or otherwise subject to hypothecation
by Executive without the express written consent of Grizzly (except in the case of death by will or by operation of the laws of
intestate succession) or by Grizzly, except that Grizzly may assign this Agreement to any successor (whether by merger, purchase
or otherwise) to all or substantially all of the stock assets or businesses of Grizzly, if such successor expressly agrees to assume
the obligations of Grizzly hereunder.

 

14.         Amendment.

 

This Agreement may
be amended only by writing signed by both Executive and by a duly authorized representative of Grizzly (other than Executive).

 

15.         Assistance
in Litigation.

 

Executive shall reasonably
cooperate with the Company in the defense or prosecution of any claims or actions now in existence or that may be brought in the
future against or on behalf of the Company that relate to events or occurrences that transpired while Executive was employed by
the Company. Executive’s cooperation in connection with such claims or actions shall include, but not be limited to, being
available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient
times. Executive also shall cooperate fully with the Company in connection with any investigation or review by any Federal, state,
or local regulatory authority as any such investigation or review relates, to events or occurrences that transpired while Executive
was employed by the Company. The Company will pay Executive an agreed upon hourly rate for Executive’s cooperation pursuant
to this Section 15.

 

16.         Beneficiaries;
References.

 

Executive shall be
entitled to select (and change, to the extent permitted under any applicable law) a beneficiary or beneficiaries to receive any
compensation or benefit payable hereunder following Executive’s death, and may change such election, in either case by giving
the Company written notice thereof. In the event of Executive’s death or a judicial determination of his incompetence, reference
in this Agreement to Executive shall be deemed, where appropriate, to refer to his beneficiary, estate or other legal representative.
Any reference to the masculine gender in this Agreement shall include, where appropriate, the feminine.

 

17.         Use
of Name, Likeness and Biography.

 

The Company shall have
the right (but not the obligation) to use, publish and broadcast, and to authorize others to do so, the name, approved likeness
and approved biographical material of Executive to advertise, publicize and promote the business of the Company and its affiliates,
but not for the purposes of direct endorsement without Executive’s consent. This right shall terminate upon the termination
of this Agreement. An “approved likeness” and “approved biographical material” shall be, respectively,
any photograph or other depiction of Executive, or any biographical information or life story concerning the professional career
of Executive.

 

    	 	13	 

     

    

 

18.         Governing
Law.

 

THIS AGREEMENT SHALL
BE CONSTRUED, INTERPRETED AND GOVERNED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE TO RULES RELATING
TO CONFLICTS OF LAW.

 

19.         Entire
Agreement.

 

This Agreement contains
the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes in all respects any
prior or other agreement (including the Prior Agreements) or understanding, written or oral, between the Company or any affiliate
of the Company and Executive with respect to such subject matter. For the avoidance of doubt, the Indemnification Agreement between
Executive and the Company, dated August 1, 2017 shall remain in effect.

 

20.         Withholding.

 

The Company shall be
entitled to withhold from payment to Executive of any amount of withholding required by law.

 

21.         Counterparts.

 

This Agreement may
be executed in two or more counterparts, each of which will be deemed an original.

 

22.         Remedies.

 

The parties recognize
and affirm that in the event of a breach of Sections 9 or 10 of this Agreement, money damages would be inadequate and
Grizzly would not have an adequate remedy at law. Accordingly, the parties agree that in the event of a breach or a threatened
breach of Sections 9 or 10, Grizzly may, in addition and supplementary to other rights and remedies existing in its favor,
apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive or other relief in order
to enforce or prevent any violations of the provisions hereof (without posting a bond or other security). In addition, Executive
agrees that in the event a court of competent jurisdiction or an arbitrator finds that Executive violated Section 9 or 10,
the time periods set forth in those Sections shall be tolled until such breach or violation has been cured. Executive further agrees
that Grizzly shall have the right to offset the amount of any damages found by a court of competent jurisdiction or an arbitrator
as resulting from a breach by Executive of Section 9 or 10 against any payments due Executive under this Agreement. The
parties agree that if one of the parties is found to have breached this Agreement by a court of competent jurisdiction or arbitrator,
the breaching party will be required to pay the non-breaching party’s attorneys’ fees reasonably incurred in prosecuting
the non-breaching party’s claim of breach.

    	 	14	 

     

    

 

23.         Non-Waiver.

 

The failure by either
party to insist upon the performance of any one or more terms, covenants or conditions of this Agreement shall not be construed
as a waiver or relinquishment of any right granted hereunder or of any future performance of any such term, covenant or condition,
and the obligation of either party with respect hereto shall continue in full force and effect, unless such waiver shall be in
writing signed by Grizzly (other than Executive) and Executive.

 

24.         Announcement.

 

The Company shall have
the right to make public announcements concerning the execution of this Agreement and the terms contained herein, at the Company’s
discretion.

 

25.         Construction.

 

The headings and captions
of this Agreement are provided for convenience only and are intended to have no effect in construing or interpreting this Agreement.
The language in all parts of this Agreement shall be in all cases construed in accordance to its fair meaning and not strictly
for or against the Company or Executive.

 

26.         Right
to Insure.

 

The Company shall have
the right to secure, in its own name or otherwise, and at its own expense, life, health, accident or other insurance covering Executive,
and Executive shall have no right, title or interest in and to such insurance. Executive shall assist the Company in procuring
such insurance by submitting to reasonable and lawful examinations and by signing such applications and other instruments as may
be reasonably and lawfully required by the insurance carriers to which application is made for any such insurance.

 

27.         No
Inconsistent Obligations.

 

Executive represents
and warrants that to his knowledge he has no obligations, legal, in contract, or otherwise, inconsistent with the terms of this
Agreement or with his undertaking employment with the Company to perform the duties described herein. Executive will not disclose
to the Company, or use, or induce the Company to use, any confidential, proprietary, or trade secret information of others.

 

28.         Binding
Agreement.

 

This Agreement shall
inure to the benefit of and be binding upon Executive, his heirs and personal representatives, and the Company, its successors
and assigns.

 

    	 	15	 

     

    

 

29.         Voluntary
Agreement.

 

Each party to this
Agreement has read and fully understands the terms and provisions hereof, has had an opportunity to review this Agreement with
legal counsel, has executed this Agreement based upon such party’s own judgment and advice of counsel (if any), and knowingly,
voluntarily, and without duress, agrees to all of the terms set forth in this Agreement. The parties have participated jointly
in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement
will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring
any party because of authorship of any provision of this Agreement. Except as expressly set forth in this Agreement, neither the
parties nor their affiliates, advisors and/or their attorneys have made any representation or warranty, express or implied, at
law or in equity with respect of the subject matter contained herein. Without limiting the generality of the previous sentence,
the Companies, their affiliates, advisors, and/or attorneys have made no representation or warranty to Executive concerning the
state or Federal tax consequences to Executive regarding the transactions contemplated by this Agreement.

 

30.         Section 409A
of the Code.

 

This Agreement is intended
to comply with Section 409A of the Code, and the Treasury regulations and other interpretive guidance issued thereunder (collectively,
“Section 409A”), or to be treated as exempt therefrom, and shall be construed and administered in
accordance with such intent. Any payments under this Agreement that may be excluded from Section 409A either as separation
pay due to an involuntary separation from service, as a short-term deferral, or as any other compensation that is otherwise exempt
from Section 409A shall be excluded from Section 409A to the maximum extent possible. Any payments to be made under this
Agreement upon a termination of Executive’s employment that are subject to Section 409A shall only be made if such termination
of employment constitutes a “separation from service” under Section 409A. Notwithstanding any provision in this
Agreement to the contrary, if any payment or benefit provided for herein would be subject to additional taxes and interest under
Section 409A if Executive’s receipt of such payment or benefit is not delayed until the earlier of (i) the date
of Executive’s death or (ii) the date that is six months after the Date of Termination of Executive’s employment
hereunder (such date, the “Section 409A Payment Date”), then such payment or benefit shall not be
provided to Executive (or Executive’s estate, if applicable) until the Section 409A Payment Date. Any such payment shall
be immediately deposited in a segregated account pending its distribution to Executive on the Section 409A Payment Date. Each payment
under this Agreement is intended to be a “separate payment” and not one of a series of payments for purposes of Section 409A.
Notwithstanding the foregoing, the Company does not guarantee any particular tax effect, and Executive shall be solely responsible
and liable for the satisfaction of all taxes, penalties and interest that may be imposed on or for the account of Executive in
connection with the Agreement (including any taxes, penalties and interest under Section 409A), and neither the Company, nor
any of its affiliates, shall have any obligation to indemnify or otherwise hold Executive (or any beneficiary) harmless from any
or all of such taxes, penalties or interest.

 

31.         Section 280G

 

Notwithstanding any
other provisions in this Agreement, in the event that any payment or benefit received or to be received by Executive (including,
without limitation, any payment or benefit received in connection with a Change of Control of the Company or the termination of
Executive’s employment, whether pursuant to the terms of this Agreement or any other plan, program, arrangement or agreement)
(all such payments and benefits, together, the “Total Payments”) would be subject (in whole or part),
to any excise tax imposed under Section 4999 of the Code, or any successor provision thereto (the “Excise Tax”),
then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such
other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion
of the Total Payments is subject to the Excise Tax (but in no event to less than zero); provided, however, that the Total Payments
will be reduced only if (a) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of
federal, state, municipal and local income and employment taxes on such reduced Total Payments and after taking into account the
phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal
to (b) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state,
municipal and local income and employment taxes on such Total Payments and the amount of Excise Tax to which Executive would be
subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal
exemptions attributable to such unreduced Total Payments).

 

    	 	16	 

     

    

 

In the case of a reduction
in the Total Payments, the Total Payments will be reduced in the following order: (1) payments that are payable in cash that
are valued at full value under Treasury Regulation Section 1.280G-l, Q&A24(a) will be reduced (if necessary, to zero
), with amounts that are payable last reduced first; (2) payments and benefits due in respect of any equity valued at full
value under Treasury Regulation Section 1.280G-1, Q&A24(a), with the highest values reduced first (as such values
are determined under Treasury Regulation Section 1.280G-1, Q&A 24), will next be reduced; (3) payments
that are payable in cash that are valued at less than full value under Treasury Regulation Section l .280G-1, Q&A 24,
with amounts that are payable last reduced first, will next be reduced; ( 4) payments and benefits due in respect of any equity
valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced
first (as such values are determined under Treasury Regulation Section 1.280G-l, Q&A 24), will next be reduced;
and (5) all other non-cash benefits not otherwise described in clause (2) or (4) will be next reduced pro-rata.
Any reductions made pursuant to each of clauses (1) through (4) above will be made in the following manner: first, a
pro-rata reduction of cash payment and payments and benefits due in respect of any equity not subject to Section 409A of the
Code, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to Section 409A
of the Code as deferred compensation.

 

For purposes of determining
whether and the extent to which the Total Payments will be subject to the Excise Tax: (A) no portion of the Total Payments
the receipt or enjoyment of which Executive shall have waived at such time and in such manner as not to constitute a “payment”
within the meaning of Section 280G(b) of the Code will be taken into account; (B) no portion of the Total Payments will
be taken into account that, in the opinion of the Company, does not constitute a “parachute payment” within the meaning
of Section 280G(b)(2) of the Code (including, without limitation, by reason of Section 280G(b)(4)(A) of the Code) and,
in calculating the Excise Tax, no portion of such Total Payments will be taken into account that, in the opinion of the Company,
constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code,
in excess of the “base amount” (as set forth in Section 280G(b)(3) of the Code) that is allocable to such reasonable
compensation; and (C) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments
will be determined by the Company in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.

 

    	 	17	 

     

    

 

32.         Indemnification

 

Grizzly will defend
and indemnify Executive as provided in Grizzly’s Bylaws and Certificate of Incorporation in effect on the date hereof, and
to the maximum extent permitted pursuant to applicable law. The obligations under this section shall survive termination of Executive’s
employment or this Agreement. During the Employment Period and thereafter (with respect to events occurring during the Employment
Period), Grizzly will maintain and provide Executive with coverage under its directors’ and officers’ liability policy
to the same extent that it provides such coverage to its other officers and directors.

 

    	 	18	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have executed this Employment Agreement on the dates below

 

	 	EXECUTIVE
	 	 
	 	/s/ Richard Scott Sloan
	 	Richard Scott Sloan
	 	 
	 	Date:  July 16, 2019
	 	 
	 	GRIZZLY ENERGY, LLC
	 	 
	 	/s/ Ryan Midgett
	 	Ryan Midgett, CFO
	 	 
	 	Date:  July 16, 2019

 

    	 	19	 

     

    

 

Schedule 1 – 2019 Annual Bonus

 

1.          Definitions.
Any capitalized term used in this Schedule 1 that is not otherwise defined in this Schedule 1 shall have the meaning set forth
in the Employment Agreement.

 

“Good
Leaver” means Executive if his employment with the Company is terminated by the
Company for a reason other than Cause, is terminated by Executive for Good Reason or is terminated due to Executive’s death
or Disability. 

 

“Performance
Goals” means the Performance Metrics established by the Board for the Board, that
will consist of (i) Quarterly Threshold Performance Goals, (ii) Quarterly Target Performance Goals, and (iii) Quarterly Maximum
Performance Goals, collectively, the “Quarterly Performance Goals”.
For purposes of catch-up payments described in Section 2(b) below, “Performance Goals” will consist of (i) Cumulative
Threshold Performance Goals; (ii) Cumulative Target Performance Goals; and (iii) Cumulative Maximum Performance Goals, collectively,
the “Cumulative Performance Goals” of applicable Performance
Metrics. 

 

“Performance
Metric” means the specific performance criteria used in determining Performance
Goals for the Performance Period; provided that each Performance Metric shall be adjusted on a pro forma basis (i) to take into
account any acquisitions or dispositions consummated during the Performance Period, (ii) to the extent relevant, to exclude costs
and benefits associated with the Company’s potential or actual Restructuring and (iii) to take into account material changes
in the Company’s business plan that have been approved by the Board prior to, on, or after the Effective Date of this Agreement.
The Performance Metric set forth on Schedule 1 were established as of January 22, 2019 and will be updated based on changes in
the Company’s business plan approved after that date.

 

“Performance
Period” means each successive calendar quarter commencing during 2019. 

 

“Quarterly
Bonus” shall mean the bonus payment payable to Executive under this Schedule 1
for the applicable Performance Period. 

 

“Restructuring”
means (i) any potential or actual restructuring, reorganization settlement and/or recapitalization of any or all of the Company’s
outstanding indebtedness or other obligations, (ii) any potential or actual transaction or series of transactions involving an
acquisition, merger, consolidation, or other business combination pursuant to which the business or assets of the Company are,
directly or indirectly, combined with another company, or (iii) any other potential or actual purchase or acquisition, directly
or indirectly, by a buyer or buyers of significant assets, securities or other interests of the Company.

 

“Target
Bonus” means Executive’s target incentive for each Performance Period, which
is equal to $180,000 per Performance Period ($720,000/year).

 

    	 	20	 

     

    

 

2.          Terms
of 2019 Annual Bonus.

 

a.           Single
Quarter Measurement. Subject to the provisions of this Schedule 1, Executive shall earn a Quarterly Bonus as of the end of
each Performance Period, depending upon the extent to which the Performance Goals have been achieved for such Performance Period.

 

b.           Cumulative
Measurement. In addition to being measured on a quarterly basis, each Performance Metric shall be measured cumulatively as
of the end of the second Performance Period and each Performance Period thereafter (a “Relevant Performance Period”).
A “catch-up” payment will be made to the extent the Company equals or exceeds the Cumulative Performance Goals/Metrics
for the applicable Performance Period. The amount of the catch-up payment will be equal to the excess of (i) the aggregate Quarterly
Bonus payable for such Relevant Performance Period based on the achievement of the applicable Cumulative Performance Goals for
such Relevant Period over (ii) the aggregate amount of Quarterly Bonuses previously paid to Executive and the amount payable to
Executive under Section 2(a) above for the Relevant Performance Period.

 

c.           Performance
Goals. Section 3 below sets forth the (i) relevant Performance Goals for each Performance Period and (ii) the percentage
of Executive’s Quarterly Bonus amount payable upon the achievement of the applicable Performance Goals. The amount of Executive’s
Quarterly Bonus for Executive shall be based on the (i) Executive’s Target Bonus and (ii) the level of achievement of the
applicable Performance Metrics for a particular Performance Period. Except as otherwise may be provided by the Board, in its sole
discretion, no Quarterly Bonus shall be payable for a Performance Metric unless the Quarterly Threshold Performance Goals for such
Performance Metric are achieved.

 

d.           Continued
Employment. Except as set forth below, (i) to earn a Quarterly Bonus for any Performance Period, Executive must remain employed
by the Company through the end of such Performance Period and (ii) Executive shall forfeit the right to any Quarterly Bonus for
a Performance Period if his employment with the Company terminates for any reason prior to the end of such Performance Period.
Notwithstanding the foregoing, if Executive becomes a Good Leaver during a Performance Period, he shall be entitled to a pro rata
portion (based on the percentage of the Performance Period Executive was engaged by the Company) of the Quarterly Bonus that would
otherwise have been earned for such Performance Period.

 

e.           Performance
Certification. Promptly after the end of each Performance Period and as soon as quarterly financials are estimable, the Board
shall certify the degree to which the applicable Performance Goals have been achieved and the amount of Quarterly Bonus payable
to Executive hereunder. Any Quarterly Bonus required to be made under this Schedule 1 shall be paid in cash on a fully-vested basis
by the Company as soon as possible after the end of the applicable Performance Period, but in any event not later than 30 days
after the end of the Performance Period.

 

f.            Supplemental
Bonus Payment. Executive may earn a supplemental bonus payment in an amount equal to 10% of Executive’s Base Salary (the
“Supplemental Bonus”) if the Company obtains on or before December 31, 2019 additional third party debt or equity
financing if at least $5 million of such financing is not required to be used to repay existing debt of the Company (the “Condition”).
Executive must be employed on the date the Condition is achieved to be entitled to receive the Supplemental Bonus. Any Supplemental
Bonus will be paid in cash within 15 days of the date the Condition is achieved.

 

    	 	21	 

     

    

 

3.          Performance
Metrics. This Section 3 sets for the percentage of Executive’s Target Bonus that will be earned based on the achievement
of the Performance Goals set forth below.

 

Performance Metrics and Goals

 

	1.    Payable if Quarterly Threshold Performance Metric Achieved:	50% of the Applicable Portion of Executive’s Target Bonus 
	2.    Payable if Quarterly Target Performance Metric Achieved: 	100% of the Applicable Portion of Executive’s Target Bonus
	3.    Payable if Quarterly Maximum Performance Metric Achieved:	200% of the Applicable Portion of Executive’s Target Bonus
	4.    Payable if Cumulative Quarterly Threshold Performance Metric Achieved:*	50% of the Applicable Portion of Executive’s aggregate Target Bonus through the end of the Applicable Performance Period
	5.    Payable if Cumulative Quarterly Target Performance Metric Achieved:*	100% of the Applicable Portion of Executive’s aggregate Target Bonus through the end of the Applicable Performance Period
	6.    Payable if Cumulative Quarterly Maximum Performance Metric Achieved:*	200% of the Applicable Portion of Executive’s aggregate Target Bonus through the end of the Applicable Performance Period
	7.    Portion of Applicable Portion Payable if Achievement is Between Performance Metrics:	Calculated on the basis of straight-line interpolation
	8.    Overall Payment Cap	Bonus payments will be capped as follows:  In no event shall Executive’s total Bonus for a Quarter that is based on achieving a Quarterly Performance Metric exceed 150% of Executive’s Target Bonus for that Quarter (“Limit 1”) and in no event shall Executive’s Bonus for a Quarter that is based on achieving a Cumulative Performance Metric exceed 150% of Executive’s aggregate Target Bonus through the end of such Quarter (“Limit 2” and, along with Limit 1, the “Limits”). Notwithstanding the foregoing, a Bonus payment shall be made to the extent it satisfies either Limit 1 or Limit 2.  If Limit 1 or Limit 2 is exceeded, the amounts allocated to each performance metric shall be reduced on a pro rata basis for purposes of determining the amounts payable in subsequent Quarters.  The Limits will be applied solely to the Bonuses paid under Section 2(a)-(e) and will not take into account any Supplemental Bonus.

		*	As set forth in Section 2(b), payments for achieving
Cumulative Performance Metrics reduced by amounts paid or payable for current and previous Quarters.

 

		(i)	Performance Metric: Operated Production (mmscfe)

Applicable Portion of Target
Bonus:     25%

 

	Performance Period:	First

Performance

Period	Second

Performance

Period	Third Performance

Period	Fourth Performance

Period
	Quarterly Threshold Performance Goal	13,644	13,478	13,303	12,963
	Quarterly Target Performance Goal	14,830	14,650	14,460	14,090
	Quarterly Maximum Performance Goal	16,016	15,822	15,617	15,217
	 	 	 	 	 
	Cumulative Threshold Performance Goal 	N/A	27,122	40,425	53,388
	Cumulative Target Performance Goal	N/A	29,480	43,940	58,030
	Cumulative Maximum Performance Goal	N/A	31,838	47,455	62,672

 

    	 	22	 

     

    

 

		(ii)	Performance Metric: Operated LOE ($/mscfe)

Applicable
Portion of Target Bonus:     25%

 

	Performance Period:	First

Performance

Period	Second

Performance 

Period	Third Performance

 Period	Fourth Performance

 Period
	Quarterly Threshold Performance Goal	1.41	1.51	1.43	1.39
	Quarterly Target Performance Goal	1.27	1.36	1.29	1.25
	Quarterly Maximum Performance Goal	1.13	1.21	1.15	1.11
	 	 	 	 	 
	Cumulative Threshold Performance Goal 	N/A	1.46	1.45	1.44
	Cumulative Target Performance Goal	N/A	1.31	1.31	1.29
	Cumulative Maximum Performance Goal	N/A	1.17	1.16	1.15

 

		(iii)	Performance Metric: Cash G&A ($ thousands)

Applicable
Portion of Target Bonus:     25%

 

	Performance Period:	First

Performance

Period	Second

Performance

Period	Third Performance

 Period	
        Fourth Performance

        Period

	Quarterly Threshold Performance Goal	12,460	11,890	11,582	11,799
	Quarterly Target Performance Goal	10,930	10,430	10,160	10,350
	Quarterly Maximum Performance Goal	9,400	8,970	8,738	8,901
	 	 	 	 	 
	Cumulative Threshold Performance Goal 	N/A	24,350	35,933	47,732
	Cumulative Target Performance Goal	N/A	21,360	31,520	41,870
	Cumulative Maximum Performance Goal	N/A	18,370	27,107	36,008

 

    	 	23	 

     

    

		(iv)	Performance Metric: Carnrite Cash Flow Improvements
($ thousands)

Applicable
Portion of Target Bonus:     25%

 

	Performance Period:	First

Performance

Period	Second

Performance

Period	Third Performance

Period	Fourth Performance

Period
	Quarterly Threshold Performance Goal	0	1,840	2,040	2,300
	Quarterly Target Performance Goal	0	2,300	2,550	2,875
	Quarterly Maximum Performance Goal	0	2,760	3,060	3,450
	 	 	 	 	 
	Cumulative Threshold Performance Goal 	N/A	1,840	3,880	6,180
	Cumulative Target Performance Goal	N/A	2,300	4,850	7,725
	Cumulative Maximum Performance Goal	N/A	2,760	5,820	9,270

 

Definitions.

“Cash G&A”
means the Company’s general and administrative expenses related to the Company’s day-to-day business that are funded
from the Company’s cash, excluding, without limitation, severance payments.

 

“Carnrite Cash Flow Improvements”
means increases in the Company’s net cash flow resulting from lower costs, increased production and/or better pricing designed
by and implemented by the Carnrite Consulting Group.

 

    	 	24

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