Document:

Specimen Oil and Gas Lease for University Lands

 Exhibit 10.19 
 FORM 44 
 OIL AND GAS LEASE #_______ 

This OIL AND GAS LEASE (this “Lease”) is made and entered into to be effective (the “effective date”), by and
between the State of Texas, acting through the Board for Lease of University Lands (“Lessor”) and _________________________________ (“Lessee”), whose address is __________________________________________ . The
Premises (hereinafter defined) were offered for lease by Lessor by sealed bid sale. Lessee submitted the high bid for the Premises. This Lease is awarded to Lessee by Lessor as a result of and pursuant to the bid offered by Lessee. By submitting the
bid, Lessee agreed to be bound by the terms and provisions of this Lease, and other conditions as may have been specified in the notice of sale. 
 W I T N E S S E T H: 
 For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and the covenants contained herein, the parties agree as follows: 

1. TERM: Subject to the terms and conditions set out in this Lease, Lessor demises, grants, and leases to Lessee the oil and gas in and under land
described below (the “Premises”) for a period of three (3) years commencing on the effective date, such 3-year period being the primary term of the Lease, and as long thereafter as oil or gas is produced in paying quantities from the
Premises. This Lease is made for the sole and only purpose of prospecting and drilling for, and producing oil and gas that may be found and produced from, the Premises, to-wit: 

 

									
	 Part\Section
	  	Block	  	Grantee	  	Acres	  	County
		  		  	University	  		  	

 2. RESERVATION: Lessee’s right hereunder to prospect for oil and gas from the Premises is non- exclusive. The
Board of Regents of the University of Texas System (the “Board of Regents”) expressly retains and reserves the concurrent right to grant third parties seismic, geophysical and geological permits and to enter into other agreements with
third parties, which permits or agreements shall allow such third parties to conduct geophysical, geological or seismic surveys on, over, under, through and across the land covered herein during the term of this Lease. Such seismic, geophysical or
geological surveys shall not unreasonably interfere with Lessee’s drilling or production activities on the Premises. 
 3. ROYALTY:
Lessee shall pay or cause to be paid: 
 (a) OIL: As used herein, the term “oil” shall mean and refer to
any hydrocarbons produced from the Premises, regardless of gravity, capable of being produced in liquid form at the well by ordinary production methods including without limitation condensate, distillate and other liquid hydrocarbons recovered from
oil or gas run through a separator or other equipment on the Premises. As royalty on any and all oil produced from the Premises pursuant to this Lease, Lessee shall pay to the Board of Regents 25% of the gross oil production or the value thereof.
The value of oil production shall be based on the highest posted price, plus premium, if any, offered or paid for oil, condensate, distillate, or other liquid hydrocarbons, respectively, of similar gravity and type in the general area, or the
prevailing market price thereof in the general area, or the proceeds of the sale thereof, whichever is greater. Unless otherwise approved in accordance with the Rules, Lessee shall assure that gas produced from the Premises that contains liquid
hydrocarbons recoverable in commercial quantities is run through an adequate oil and gas separator of conventional type or other equipment at least as efficient to the end that all liquid hydrocarbons recoverable from the gas by such means will be
recovered before the gas is sold, used, or processed in a plant, and royalty is paid thereon. 
 (b) GAS: As used herein,
the term “gas” shall mean and refer to all natural gas produced from the Premises (including casinghead gas) and all of its constituent elements, including but not limited to sulfur contained in the gas, and natural gasoline, condensate,
distillate, butanes, propanes, and other 

  

 
hydrocarbons condensed, absorbed, or separated out of or from the gas after it leaves the Premises, including without limitation casinghead gas and flared or vented gas. Royalty shall be payable
under this Paragraph 3(b) on all hydrocarbons produced from the Premises other than oil. Except as provided in Paragraph 3(c), as royalty on any and all gas produced from the Premises pursuant to this Lease, Lessee shall pay to the Board of Regents:

 (1) 25% of the gross production of gas not processed in a plant for the extraction of gasoline, liquid
hydrocarbons or other products or the value thereof. The value of such gas production shall be determined on the basis of the greater of (a) the market value of the gas; or (b) the total value accruing to the producer from the sale or use
of the production, including proceeds and any other thing of value received by Lessee or the operator. The volume of gas shall be measured in accordance with the Rules. 

(2) 25% of the gross production of gas processed in a plant for the extraction of gasoline, liquid hydrocarbons or other
products or the value thereof, such value to be determined on the basis of (a) the highest value reasonably available to Lessee (valued as provided in Paragraph 3(f) below) if Lessee sells and delivers the gas at a point before the inlet to the
processing plant to an unaffiliated third party processor; (b) if Lessee owns the processing plant in which the gas is processed or trades the gas for gas that is processed in a plant owned by Lessee, then the value of the gas shall be the
value, determined as in Paragraph 3(b)(1) above of 100% of the residue gas and 100% of the liquids attributable to the gas produced from the Premises; or (c) if Lessee sells the gas at or beyond the tailgate of the plant, but Lessee does not
own the processing plant in which the gas is processed and does not trade the gas for gas that is processed in a plant owned by Lessee, then the value of the gas shall be the highest value, determined as in Paragraph 3(b)(1) above, of the fraction
of residue gas and liquids attributable to the gas produced from the Premises to which Lessee is entitled. For purposes of this Lease, Lessee shall be deemed to own the processing plant if Lessee or Lessee’s affiliate owns a five percent or
greater interest in the plant. An “affiliate” includes, but is not limited to, the parent company or a subsidiary of Lessee, a corporation or other entity having common ownership with Lessee, a partner or joint venturer of Lessee with
respect to the ownership or operation of the processing plant, a corporation or other entity in which Lessee owns a ten percent or greater interest, or any individual, corporation or other entity that owns a ten percent or greater interest in
Lessee. Lessee shall submit to the Board of Regents a disclosure statement regarding whether the Lessee or an affiliate of Lessee owns the processing plant in accordance with the Rules. 

(c) KEEP WHOLE: If oil or gas production from the Premises is processed in a plant for the extraction of gasoline, liquid
hydrocarbons or other products, the value of the gross production shall for purposes of determining royalty due never be less than if such gas had not been processed. 
 (d) RECYCLED GAS: Subject to the consent in writing of Lessor, Lessee may inject gas into any oil- or gas-producing formation in the Premises after the liquid hydrocarbons contained in the gas have
been removed, and no royalties shall be payable on the gas so injected until such time as the same may thereafter be produced and sold or used. 
 (e) CONSERVATION: Lessee shall use all reasonable means to prevent the underground or above ground waste of oil or gas and to avoid the physical waste, flaring, or venting of gas produced from the
Premises. 
 (f) NO DEDUCTIONS: Lessee shall pay or cause to be paid royalties due under this Lease without deduction for
the cost of producing, gathering, storing, separating, treating, dehydrating, compressing, transporting, and otherwise making the oil, gas and other products hereunder ready for sale or use; provided, however, with respect to gas processed for the
extraction of gasoline, liquid hydrocarbons or other products in a plant not owned by Lessee (as described in Paragraph 3(b)(2)), no royalty shall be due on gas volumes used or flared in the plant to the extent such volumes are reasonable and
allocable to the Lease. For purposes of determining the royalty due, the gross production shall be valued at the point of sale and delivery from Lessee to an unaffiliated third party. In determining the value for royalty purposes of the oil, gas,
and other products produced, no cost of producing, gathering, storing, separating, treating, dehydrating, compressing, transporting, and otherwise making the oil, gas and other products hereunder ready for sale or use shall be taken into account,
whether borne by Lessee or by third-party purchasers and whether stated as a deduction from the price or an adjustment to the price based on location or condition. No field deductions for lost product will ever be allowed. All such costs shall be
the responsibility of the Lessee. Lessee shall exercise due diligence and use all reasonable efforts in marketing any and all production from the Premises to obtain the best price reasonably available for the oil and gas. 

  
 Page 2 of 10

 (g) ROYALTY IN KIND: Lessee shall pay cash royalties based on the value of the gross
production from the Premises, unless Lessor elects to receive royalty in kind. Lessee shall pay oil or gas royalty, or both, in kind at the option of Lessor. Lessor may exercise its option to take oil or gas royalty in kind, or if royalty is taken
in kind, Lessor may elect to take cash royalties, at any time or from time to time by giving Lessee notice of such election not less than sixty (60) days in advance. If Lessor elects to take its royalty production in kind, Lessor may elect to
have the royalty production delivered in kind at the wellhead, at the oil and gas separator, into a pipeline connected at the well, at the location Lessee sells its production, or at another location mutually acceptable to Lessor and Lessee. Lessee
shall bear all costs to the point of delivery. 
 (h) ROYALTY ON CONTRACT SETTLEMENTS: Lessee shall pay to the Board of
Regents royalty at the applicable royalty rate on any monetary settlement received by Lessee from any breach of contract by Lessee’s purchaser relating to the marketing, pricing, or taking of oil or gas production from the Premises. 

4. PRE-PAID DELAY RENTALS AND MINIMUM ROYALTY: 
 (a) PRE-PAID DELAY RENTALS: Lessee paid a delay rental payment of $25/acre concurrently with the submission of its bid on this Lease. For such consideration paid to Lessor, Lessee shall not be
obligated, except as otherwise provided, to commence or to continue any operations during the primary term, or to make any additional delay rental payments during the primary term. No part of such delay rental payment shall be refundable under any
circumstance. 
 (b) MINIMUM ROYALTY: One year after the expiration of the primary term and each year thereafter during
the term of this Lease, Lessee shall pay to the Board of Regents an amount equal to the positive difference, if any, between an amount equal to $5.00 multiplied by the total number of acres in the Premises (the “minimum royalty”) and
royalties from this Lease actually paid and received in the immediately previous lease year. Such amount shall be due and payable within sixty (60) days after each anniversary date of this Lease. No minimum royalty is due if royalties from this
Lease actually paid and received during the previous lease year were greater than the minimum royalty. 
 5. PAYMENTS, SUBMISSIONS, AND
NOTICES TO LESSOR: 
 (a) CASH ROYALTY PAYMENTS: All royalties not paid in kind at the election of Lessor shall be
paid to the Board of Regents. Royalty on oil shall be due and payable on or before the 5th day of the second month succeeding the month of production or such later date as may be prescribed in the Rules. Royalty on gas shall be due and payable on or
before the 15th day of the second month succeeding the month of production or such later date as may be prescribed in the Rules. 
 (b) MANNER AND TIMELINESS OF PAYMENTS: A payment that is not submitted electronically shall be considered timely paid if delivered to the Lessor on or before the applicable due date or if deposited
in a postpaid, properly addressed wrapper with a post office or official depository under the care and custody of, and postmarked by, the United States Postal Service before the applicable due date. A payment that is submitted electronically shall
be considered to be timely paid if such payment is successfully transmitted to the proper account with the Comptroller on or before the due date. 
 (c) PENALTIES AND INTEREST: Lessee shall pay penalties and interest on late royalty payments, minimum royalty payments, and other sums due, and for failure to provide documents, as provided by law
or the Rules. The right to collect penalties and interest is in addition to, and shall not in any way limit or restrict, the rights of Lessor or the Board of Regents to pursue other remedies in law or in equity, including without limitation
forfeiture of this Lease. 
 (d) PAYMENTS, NOTICES, AND CORRESPONDENCE TO LESSOR: Lessee shall assure that all royalty
payments, shut-in royalty payments, extension payments, deferred drilling fees and all other payments due under this Lease, documents, reports, notices and other information unless expressly provided herein that such payment or information be
directed to another office, are directed to the following address: 
 University Lands 

P.O. Box 553 

Midland, Texas 79702-0553 
 or
such other address as may then be specified in the Rules. Any payments submitted electronically shall be delivered by electronic funds transfer to the proper account with the Comptroller of the State of Texas. 

(e) NOTICES AND CORRESPONDENCE TO LESSEE: Notices and correspondence to Lessee shall be sent to the address shown on the bid
submitted to Lessor or such other address as Lessee shall provide in writing to Lessor. Any such notice of change of address must specifically reference this Lease. 

  
 Page 3 of 10

 (f) TIME NOTICE GIVEN: Notices shall be deemed given when actually delivered or three
(3) days after deposit in the United States mail. 
 6. CONTRACTS, RESERVES, AND OTHER RECORDS: As provided by law and the Rules, Lessee
shall submit to the Board of Regents a copy of each and every contract or amendment thereto under which oil or gas is sold or processed, together with a summary of such contract, within thirty (30) days after any such contract or amendment is
made. Lessee shall, upon request, provide to the Board of Regents an estimate of oil and gas reserves in the Premises or allocable to this Lease. All such reserve information, when received, shall be held in confidence by the Board of Regents and
disclosed only as contracts for the sale of production may be disclosed as allowed or required by law. 
 7. CONTINUATION OF TERM: If at
the expiration of the primary term oil or gas in paying quantities is not being produced from the Premises, this Lease shall terminate; provided, however, the term of this Lease may be extended on one or more of the following conditions: 

(a) CESSATION OF PRODUCTION: In the event production of oil or gas from the Premises, once obtained, shall cease for any cause
within sixty days before the expiration of the primary term of this Lease or at any time or times thereafter, this Lease shall not terminate (i) if Lessee commences additional drilling or reworking operations within sixty (60) days
thereafter, and the Lease shall remain in full force and effect so long as operations continue in good faith and in workmanlike manner without interruptions totaling more than sixty (60) days during any one such operation; and if such drilling
or reworking operations result in the production of oil or gas, the Lease shall remain in full force and effect so long as oil or gas is produced therefrom in paying quantities or payment of shut-in oil or gas well royalty or compensatory royalties
is made as provided herein or (ii) if production in paying quantities is restored within sixty (60) days after such cessation. 
 (b) SHUT-IN ROYALTIES: If at the expiration of the primary term or at any time thereafter there is located on the Premises a well or wells capable of producing oil or gas in paying quantities and
such oil or gas is not produced for lack of suitable production facilities or a suitable market for the gas and such conditions are outside the reasonable control of Lessee, and this Lease is not being otherwise maintained in force and effect, then
this Lease will not terminate and shall be extended for a period of one year if Lessee timely submits an application in form approved by the Lessor and, upon approval of said application, pays a shut-in royalty in the amount specified in the Rules
(as hereinafter defined) at the time the shut-in payment is made. Lessee must remit the shut-in royalty payment, together with the required certification, while this Lease is otherwise maintained in force and effect. Payment of shut-in royalty after
the expiration or other termination of this Lease will not revive or extend this Lease. Lessee may extend the Lease for a maximum of four additional and successive periods of one-year each by the payment of a like sum of money each year on or before
the expiration of the extended term so long as the conditions that allow such extension continue. 
 (c) EXTENSIONS: If
at the expiration of the primary term or any extension term provided for in this Paragraph 7(c) oil or gas is not being produced in paying quantities from the Premises, but drilling operations are being conducted on the Premises in good faith and in
good and workmanlike manner, Lessee may, on or before the expiration of the primary term or the then current extension term, as appropriate, make written application in the approved form to the Board of Regents for a 30-day extension of the term of
this Lease, such application to be accompanied by a payment of an amount equal to the then current fee for such lease extension as set out in the Rules; provided however that in no event shall this Lease be so extended for a cumulative period of
more than 360 days. 
 8. DRILLING AND DEVELOPMENT: 
 (a) FULL DEVELOPMENT: After a well capable of producing oil or gas has been completed on the Premises, Lessee shall exercise the diligence of a reasonably prudent operator in drilling such
additional well or wells as may be reasonably necessary to fully develop the Premises. Neither bonus, pre- paid delay rental, royalties, nor other fees paid or to be paid hereunder shall relieve Lessee from the obligation to fully develop the
Premises. Additionally, Lessee will, upon reasonable request from an adjoining lessee of other lands, join with such requesting lessee in pooling to achieve secondary or advanced recovery of oil, gas, and other hydrocarbons that might be produced
through the use of enhanced methods covering a greater area than the Premises. 

  
 Page 4 of 10

 (b) CONTINUOUS DRILLING OBLIGATION: 

(i) In addition to any other well or wells commenced on or before the expiration of the primary term, Lessee shall spud in
a new well within one-hundred twenty (120) days after the expiration of the primary term unless on or before such date productive wells have been drilled on the Premises to the maximum density permitted by the Rules, regulations or orders of
the Railroad Commission. Such well shall be drilled to completion in good faith and in a good and workmanlike manner without interruptions totaling more than sixty (60) days during such drilling operation. Upon the completion of such well,
either as a dry hole or a producing well, Lessee will thereafter diligently conduct continuous drilling operations on the Premises with no cessation of more than sixty (60) days between the completion of one well, either as a dry hole or a
producing well, and the spudding in of the next well. Each such well shall also be drilled to completion in good faith and in a good and workmanlike manner without interruptions totaling more than sixty (60) days during each such drilling
operation. This drilling obligation shall continue until wells have been drilled on the Premises to the maximum density permitted by the rules, regulations or orders of the Railroad Commission. If a Railroad Commission rule or order allows the
drilling of optional wells in any field underlying the Premises, Lessee shall drill such optional wells into such field unless the Lessor agrees in writing that the successful completion of any optional well or wells would not result in the recovery
of additional hydrocarbons from such field. For purposes of this provision, the completion of a well is defined as the potential test date or the date of plugging, if applicable, appearing on the official completion report filed with the Railroad
Commission or one hundred twenty (120) days after the commencement of the drilling of such well, whichever is earlier. 
 (ii) On or before the date upon which Lessee is obligated to spud in a well under Paragraph 8(b)(i), Lessee may remit a fee (the “Deferred Drilling Fee”) in the amount of twenty dollars ($20.00)
per acre for all acreage in the Premises except Productive Acreage. Timely payment of the deferred drilling fee entitles Lessee to extend the time period for spudding in a well under Paragraph 8(b)(i) by thirty (30) days. Lessee may extend the
time period for spudding in the well for two additional and successive periods of thirty days each by the payment of a like sum of money on or before the expiration of the then current extended time period. 

(c) PRODUCTIVE ACREAGE/DEPTHS ONLY HELD: “Productive Acreage” as used in this Paragraph 8 shall mean and refer to the
minimum acreage required by the Railroad Commission for a well for production purposes without an exception to applicable spacing and/or proration rules, unless Lessor agrees in writing to a larger unit. “Unproductive Depths” as used in
this Paragraph 8 shall mean and refer to all depths below one hundred feet (100’) below the deepest depth drilled by Lessee on the Premises. 
 (i) If any well is not timely spudded in or is not drilled as required in Paragraph 8(b), then, notwithstanding any provision in this Lease to the contrary, this Lease will terminate as to all acreage in
the Premises except Productive Acreage and as to all Unproductive Depths underlying Productive Acreage. The effective date of such termination shall always be the date that Lessee failed to spud in a well as required under Paragraph 8(b). If on such
effective date Lessee is diligently drilling or completing a well on the Premises or is diligently working to establish the Productive Acreage for any completed well on the Premises, then the Productive Acreage ultimately established for these types
of wells shall also remain included in this Lease under this Paragraph 8(c)(i); provided, however, that the effective date of the lease termination in such case shall still be the date that Lessee failed to spud in a well as required under Paragraph
8b. 
 (ii) If Lessee drills wells on the Premises to the maximum density permitted by the rules, regulations or
orders of the Railroad Commission, then, notwithstanding any provision in this Lease to the contrary, two (2) years after the expiration of the primary term this Lease will terminate as to all Unproductive Depths. If on such date Lessee is
diligently conducting drilling operations on the Premises, then by written notice to Lessee, the Lessor may delay the partial termination of this Lease under this Paragraph 8(c)(ii) up to four (4) years after the expiration of the primary term
of this Lease. 
 (d) RELEASE: The acreage retained under Paragraph 8(c) as to each producing well shall, as nearly as
practical, be in the form of a square with the well located in the center thereof, or such other shape as may be approved by the Lessor. Lessee shall execute and record a release containing a satisfactory description of the acreage and depths not
retained hereunder and promptly submit to the Lessor for filing in the records of the Board of Regents the recorded release, or a legible copy of same. 
 (e) EASEMENT: Upon the termination of this Lease pursuant to Paragraph 8(c) as to a part but not all of the Premises, Lessee shall have a continuing non-exclusive easement across the surface of the
Premises for access to that portion of the Premises with respect to which this Lease is not terminated, and, Lessor shall have, and expressly reserves, an easement over, across and through the retained Premises,

  
 Page 5 of 10

 
including all of the retained depths and formations, to enable exploration for, and production and development of, oil, gas and/or minerals from any depths and lands which are not thereafter
subject to this Lease. Lessor, its agent or assignee, shall not have the right to use any wellbores drilled by Lessee or any equipment installed by Lessee in connection with any such drilling or production operations for a period of one
(1) year after such termination without the written consent of Lessee. The easement reserved herein by Lessor shall be fully assignable by Lessor to any party, including any oil, gas, and mineral lessee of depths or lands no longer subject to
this Lease, and in the event Lessor assigns such easement to any third party, Lessee shall look only to such third party, and not to Lessor, for any claims, costs, expenses or damages occasioned by such third party’s use of the easement herein
reserved, specifically including, but not limited to, any claims that such third party’s activities interfered with or damaged Lessee’s well(s), reserves, equipment, operations, or other rights hereunder. 

(f) FIELD RULES AND EXCEPTIONS: If specific field rules do not exist with respect to the Premises, and if Lessee requests a
hearing for the establishment of field rules, or if Lessee requests the consolidation of existing field rules or an exemption from field rules or statewide rules, Lessee shall notify Lessor of such request prior to any Railroad Commission hearing.

 9. OFFSET WELLS: Lessee shall adequately protect the oil and gas under the Premises from drainage from adjacent lands or leases,
including non-University lands and University lands leased at a lesser royalty. If oil or gas should be produced in paying quantities from a well draining the Premises, Lessee shall, within sixty (60) days after notice from the Lessor of such
producing well, begin in good faith and pursue diligently operations leading to the drilling of an offset well and such offset well shall be drilled to such depth as may be necessary to prevent drainage of the Premises, and Lessee shall use all
means necessary in a good faith effort to make such offset well produce oil or gas in paying quantities. Any well located within one thousand (1,000) feet of the Premises shall be presumed to be draining the Premises. Lessee may rebut this
presumption only with evidence acceptable to Lessor, in Lessor’s sole discretion. Payment of the bonus, the delay rental payment, deferred drilling fees, royalties paid or to be paid, shut-in royalty, or other amounts due hereunder shall not
relieve Lessee from its obligations under this Paragraph 9. 
 10. REMOVAL OF EQUIPMENT: If this Lease is forfeited or terminated for any
reason, Lessee shall not remove the casing or any equipment from the Premises without the written consent of the Lessor until wells have been plugged to the satisfaction of the Railroad Commission, all pits have been properly filled and all debris
has been removed from the Premises. 
 11. OPERATIONS: 
 (a) WELL LOCATION: Prior to commencement of drilling on the Premises, Lessee shall provide written notice to Lessor of Lessee’s intent to drill a well, together with a plat of the Premises
showing the location of each well to be drilled. Prior to commencement of any surface preparation in connection with a drill site or the construction of a road to a drill site, Lessee shall obtain any necessary easements, pay amounts required under
the then current Rate and Damage Schedule, and give notice to Lessor and the surface occupant. 
 (b) RAILROAD COMMISSION
FORMS: Copies of all forms and other information filed with the Railroad Commission pertaining to operations under this Lease shall be filed simultaneously by Lessee with Lessor. Lessee shall submit copies of correspondence and other information
received by Lessee from the Railroad Commission to Lessor within ten (10) days after receipt by Lessee, the operator, or other contractor or agent of Lessee. 
 (c) LOGS: Lessee shall have an electric or radioactivity survey made of the bore-hole section, from the total depth of the well to the surface of the ground, of all wells drilled on the Premises
and shall provide a copy of each and every log of each required survey, along with copies of logs of all other bore- hole surveys completed with respect to the well, to Lessor within fifteen (15) days after the making of the survey. 

(d) FAILURE TO LOG: Upon failure of Lessee to have an electric or radioactivity survey made of the bore-hole section from the
total depth of the well to the surface of the ground and submit to Lessor a copy of the required logs, for any reason other than impossibility demonstrated to the satisfaction of the Lessor, Lessee shall re-enter the well and run the required
surveys and provide a copy of the required logs to Lessor or, at the option of the Lessor, Lessee shall pay to the Board of Regents a sum equal to the cost of completing the required surveys at then current market rates multiplied by two (2), which
amount shall be considered liquidated damages for Lessee’s failure to provide such logs to Lessor as required hereby, the parties acknowledging that actual damages would be difficult to determine. 

  
 Page 6 of 10

 (e) DRILLING RECORDS: Lessee shall submit to Lessor copies of any records, memoranda,
accounts, reports, cuttings and cores on same day that Lessee obtains such information. Lessee shall also submit any other information relating to the operations on the Premises as may be requested in writing by a representative of Lessor in the
time and manner reflected in such written request. This Paragraph 11(e) does not constitute a waiver of any other requirement contained in this Lease that Lessee provide documents, records, or other information to Lessor or the Board of Regents.

 12. USE OF THE SURFACE AND WATER: 
 (a) RIGHT TO USE SURFACE: Except as otherwise expressly provided in this Lease, Lessee shall have the right to use only so much of the surface of the Premises as reasonably necessary for the full
exercise and enjoyment of the oil and gas rights and interests granted by this Lease. Lessee may lay and maintain gathering lines, erect and maintain telephone and utility lines, and other appliances and equipment necessary for the operation of oil
and gas wells on the Premises. Lessee shall have the right of ingress and egress and right of way to any point of operations provided that Lessee will assure that such right of way and ingress and egress result in the least injury and inconvenience
to any occupant of the surface. Notwithstanding the foregoing or anything else to the contrary contained in this Lease, operations conducted on the surface of the Premises shall be subject to the payments as set out in the then current Rate and
Damage Schedule. 
 (b) MAINTENANCE OF WELL SITES AND IDENTIFICATION MARKERS: Lessee shall build and maintain fences
around any of its facilities on the Premises if requested by Lessor and Lessee will take all necessary care and precaution to protect livestock against loss, damage, or injury. Upon completion or abandonment of any well or wells, Lessee shall fill
and level all slush pits and cellars and completely clean up drilling sites of all rubbish thereon to the satisfaction of the Lessor. Lessee shall erect, at a distance not to exceed twenty-five (25) feet from each well on the Premises, a
legible sign showing the name of operator, the lease designation, and the well number. Where two or more wells on the same lease or where wells on two or more leases are connected to the same tank battery, whether by individual flow line connections
direct to the tank or tanks or by use of a multiple header system, each line between each well and such tank or header shall be legibly identified at all times, either by a firmly attached tag or plate or an identification properly painted on such
line at a distance not to exceed three (3) feet from such tank or header connection. Signs, tags, plates or other identification markers shall be maintained in a legible condition throughout the term of this Lease. 

(c) BURYING PIPELINES AND RESTORATION OF THE SURFACE: Upon request of Lessor, Lessee will (i) bury all pipelines below
ordinary plow depth; (ii) fill and level all pits and mounds, and level and fill all roads as soon as is reasonably practical after completion of each well or wells; and (iii) restore the surface of the ground to as nearly as is possible
its original state. Lessee shall not drill a well within three hundred (300) feet of any residence or barn without the written consent of the Lessor. Lessee shall, upon expiration or termination of this Lease, remove all of Lessee’s
equipment, fill and level all pits, and restore the surface to the satisfaction of the Lessor. 
 (d) DAMAGE TO THE
SURFACE: Lessee shall repair all damages of any kind or character to the Premises and improvements which might be caused by Lessee, its agents, servants, employees, subcontractors, successors or assigns and Lessee shall pay all damages resulting
from operations under this Lease, including without limitation damages to any personal property, improvements, livestock, and crops on the Premises or adjacent lands owned or controlled by the Board of Regents. Lessee shall be liable for same,
whether or not such agents, employees, or licensees, at the time of occasioning such damage, are acting within the scope of their employment or license. 
 (e) CULTURAL RESOURCES: Lessee shall comply with the Antiquities Code (Texas Natural Resources Code, Chapter 191 or its successor statute) and applicable rules promulgated thereunder by the
Historical Commission, or its successor. Lessee shall undertake its activities on the Premises in a manner consistent with public policy relating to the location and preservation of archeological sites and other cultural resources in, on, or under
public lands, including University lands. Lessee shall use the highest degree of care and all reasonable safeguards to prevent the taking, alteration, damage, destruction, salvage, or excavation of cultural resources and/or landmarks on University
lands. Upon discovery of an archeological site, Lessee shall immediately give written notice of such discovery to Lessor and to the Texas Antiquities Committee, as set out in the Commission’s rules. Lessee, its contractors and employees, shall
have no right, title, or interest in or to any archaeological articles, objects, or artifacts, or other cultural resources located or discovered on University lands. 

  
 Page 7 of 10

 (f) POLLUTION: Lessee shall use the highest degree of care and all reasonable
safeguards to prevent contamination or pollution of any environmental medium, including soil, surface waters, groundwater, sediments, and surface or subsurface strata, ambient air or any other environmental medium in, on, or under, the Premises, by
any waste, pollutant, or contaminant. Lessee shall not bring or permit to remain on the Premises any explosives, toxic materials, or substances regulated as hazardous wastes, hazardous materials, hazardous substances, or toxic substances under any
federal, state, or local law or regulation (“Hazardous Materials”), except products commonly used in connection with oil and gas exploration and development operations and stored in the usual manner and quantities. Lessee shall clean up,
remove, remedy and repair any soil or ground water contamination and damage caused by the presence or release of any Hazardous Materials in, on, under, or about the Premises resulting from Lessee’s operations on the Premises. The obligations of
Lessee hereunder shall survive the expiration or earlier termination, for any reason, of this Lease. 
 (g) SURFACE
WATER: Lessee shall have no right to use any surface water found on property owned or controlled by the Board of Regents or any water from water wells or stock tanks controlled by the Board of Regents or its surface tenants. 

(h) SUBSURFACE WATER: Lessee shall have the right to use, at a price determined by the then current Rate and Damage Schedule,
subsurface water found and produced or impounded by Lessee on the Premises for drilling operations only in connection with primary production. The use of such water for any enhanced recovery operations is prohibited. The right to use water from the
Premises is subject to Lessee’s compliance with and performance of the requirements set out in this Paragraph 12(h) and compliance with all applicable Rules, rules of the Board of Regents, and rules and regulations of any local, state, or
federal regulatory authority having jurisdiction. 
 (i) WATER WELL OPERATIONS AND REPORTS: Prior to Lessee’s
commencing any water well drilling, reentry or water production operations, Lessee shall file or cause to be filed written notice of such operations with Lessor. Lessee shall also submit to Lessor, within fifteen (15) days after completion of
water well operations or as otherwise requested, the following information: 
 (i) a plat showing the location of
each water well; 
 (ii) all information that may be requested including without limitation sample logs, downhole
equipment and casing, static water levels, producing capacity, chemical analyses, and any other information requested by Lessor; and 
 (iii) copies of all forms, applications, permits, correspondence, and other documents sent to or received from any local, state or federal regulatory agencies concerned with water operations or water well
borehole maintenance operations. Within ten (10) days after cessation of use of any water well, Lessee shall give written notice thereof to Lessor. Within fifteen (15) days after receipt of such notice from Lessee, Lessor may elect to
require Lessee to either cap or plug the well. After receipt of Lessors’ election, Lessee shall cap or plug the well within ninety (90) days thereafter, at Lessee’s expense, in whatever manner Lessor may require. If Lessor fails to
make an election within such 15-day period, Lessor will be deemed to have elected to have the well plugged. 
 13. RELEASE AND INDEMNITY:
Lessee hereby releases and discharges Lessor, The University of Texas System, and their respective regents, members, officers, employees, and agents from all and any actions and causes of action of every nature, or other harm, including
environmental harm, for which recovery of damages is sought, including, but not limited to, all losses and expenses which arise out of, are incidental to, or result from, the operations of or on behalf of Lessee on the Premises, or that may arise
out of or be occasioned by Lessee’s breach of any of the terms or provisions of this Lease, or by any other negligent act or omission of Lessee for which Lessee may be held strictly liable. Further, Lessee hereby agrees to be liable for,
exonerate, indemnify, defend and hold harmless Lessor, The University of Texas System, and their respective regents, members, officers, employees and agents, and their successors or assigns, against any and all claims, liabilities, losses, damages,
actions, personal injury (including death), costs and expenses, or other harm for which recovery of damages is sought, including attorneys’ fees and other legal expenses, including those related to environmental hazards on the Premises or in
any way related to Lessee’s failure to comply with any and all environmental laws; those arising from or in any way related to Lessee’s operations or any other of Lessee’s activities on the Premises; those arising from Lessee’s
use of the surface of the Premises; and those that may arise out of or be occasioned by Lessee’s breach of any of the terms or provisions of this Lease or any other act or omission of Lessee, its directors, officers, employees, agents,

  
 Page 8 of 10

 
contractors, guests or invitees. Each assignee of this Lease, or an interest therein, agrees to be liable for, exonerate, indemnify, defend and hold harmless Lessor, The University of Texas
System, and their respective regents, members, officers, employees, and agents in the same manner provided above in connection with the activities of such Lessee, its officers, employees, and agents as described in this Paragraph 13. 

14. INSURANCE: Lessee shall assure that Lessee and any person acting on Lessee’s behalf under this Lease carry the following insurance with
one or more insurance carriers licensed by the Texas Department of Insurance at any and all times such party or person is on or about the Premises or acting pursuant to this Lease, in such amounts as from time to time reasonably required by Lessor:

 (i) Worker’s Compensation and Employer’s Liability Insurance; 

(ii) Commercial General Liability and Umbrella Liability Insurance; and 

(iii) Business Auto and Umbrella Liability Insurance. 

The Lessee shall cause Certificates of Insurance evidencing the above coverage to be provided promptly upon request to Lessor, or to such
other representative of Lessor as Lessor may from time to time designate. The insurance policies required under (ii) and (iii) above, shall name the State of Texas and The University of Texas System as additional insured with regard to the
Premises; shall reflect that The University of Texas System will receive thirty (30) days prior written notice of cancellation or material change in coverage; and shall reflect that the insurer has waived any right of subrogation against the
State of Texas or The University of Texas System. 
 Lessee may satisfy its obligation to maintain insurance as specified in
this section by means of self insurance, provided that Lessee notifies Lessor of its intent to self-insure and submits annually to the Lessor Lessee’s published annual report that is audited by an independent certified public accountant. Such
report shall demonstrate that Lessee has a net worth of no less than One Hundred Million Dollars ($100,000,000.00), adjusted for inflation from the date of this Lease by reference to the Consumer Price Index or other equivalent index published by
the U. S. Department of Labor. 
 15. LIEN: By acceptance of this Lease, Lessee grants to the Board of Regents an express contractual
lien on and security interest in all oil and gas in and extracted from the area covered by the Lease, all proceeds which may accrue to Lessee from the sale of the oil and gas, whether the proceeds are held by Lessee or another person, and all
fixtures on and improvements to the Premises used in connection with the production or processing of the oil and gas to secure the payment of royalties and other amounts due or to become due under this Lease or Subchapter D, Chapter 66, Texas
Education Code and to secure payment of damages or loss that the state may suffer by reason of Lessee’s breach of a covenant or condition of this Lease, whether express or implied. 
 16. FORFEITURE: This Lease shall be subject to forfeiture as provided in Subchapter D, Chapter 66, Texas Education Code and the Rules. The remedy of forfeiture shall not be the exclusive remedy,
but a suit for damages or specific performance, or both, may be instituted. 
 17. ASSIGNMENTS; RELEASE: The assignment or relinquishment
of rights acquired under this Lease shall be governed by the provisions of Subchapter D, Chapter 66, Texas Education Code and the Rules. Any assignment or relinquishment shall not relieve the Lessee of any obligations theretofore accrued hereunder,
or impair the lien provided for by law and in this Lease. 
 18. VENUE: The venue for any suit arising out of a provision of this Lease,
whether express or implied, regarding interpretation of this Lease, or relating in any way to this Lease or to applicable case law, statutes, or administrative rules, shall be in the county in which the Premises are located. 

  
 Page 9 of 10

 19. MISCELLANEOUS: 
 (a) RULES: As used herein, the term “Rules” shall mean and refer to the Rules promulgated by the Board for Lease of University Lands, as the same may be amended from time to time. This
Lease shall be subject to and construed and enforced in accordance with the Rules. Lessee agrees to comply at all times with the Rules and failure to comply with the Rules shall constitute a default hereunder. A copy of the Rules may be obtained
from University Lands. 
 (b) SUCCESSORS AND ASSIGNS: The covenants, conditions, and agreements contained herein shall be
binding upon the heirs, executors, administrators, successors, or assigns of Lessee as to all or any part of Lessee’s interests in this Lease. 
 (c) SEVERABILITY: If any clause or provision of this Lease is invalid or unenforceable at any time under then current laws, the remainder of this Lease shall not be affected thereby, and this Lease
shall be modified so that in place of each such clause or provision of this there will be added as a part of this Lease a legal, valid, and enforceable clause or provision as similar in terms to such illegal, invalid or unenforceable clause or
provision as may be possible. 
 (d) CAPTIONS: The captions of the several paragraphs of this Lease are for reference
purposes only and shall not affect the meaning or interpretation of this Lease. 
 (e) DEFINED TERMS: The terms
“completion” and “drilling operations” shall have the meaning ascribed to such terms in the Rules. Each reference to Subchapter D, Chapter 66, Texas Education Code shall refer to such subchapter, as amended from time to
time, or any successor statutory provisions. The term “production” or “producing” shall mean production in paying quantities. “Railroad Commission” shall refer to the Railroad Commission of Texas (or any successor
agency having jurisdiction in oil and gas matters). The term “Rate and Damage Schedule” shall mean and refer to the rate and damage schedule published by the University of Texas System in effect at the time of the particular action,
payment, or notice. 
 IN TESTIMONY WHEREOF, witness the signature of the Commissioner of the General Land Office under the Seal
thereof to be effective on the date first written above. 

	
	
	  
	Commissioner, General Land Office of Texas

 Form 44 

  
 Page 10 of 10EXHIBIT 10.1

 Exhibit 10_1 
  

BioCryst Pharmaceuticals, Inc. 
 Annual Incentive Plan 
 Communication Summary for Participants 

 
 Effective March 9, 2012 

 BioCryst Pharmaceuticals, Inc. Annual Incentive Plan 

Effective March 9, 2012 

Plan Summary 
 Objective 

The BioCryst Pharmaceuticals Annual Incentive Plan (AIP) is designed to provide senior leaders with an incentive to achieve critical Company objectives and to
perform on an individual basis. The AIP offers Executive Directors and above an opportunity to share in the Company’s success on an annual basis. 

Overview 
 As a participant in the AIP, you are eligible to
receive an annual incentive award based on two performance components: 
  

	 	•	 	 BioCryst’s performance relative to annual business objectives established for the plan year. 

 

	 	•	 	 Your individual performance during the plan year, defined as the degree to which you achieve your individual objectives and carry out ongoing responsibilities,
and the competencies (behaviors/skills) you exhibit as you work toward the achievement of results. 

 Your award opportunity is
expressed as an annual incentive range, which is stated as a percentage of your base salary. Your incentive range includes a minimum, a target, and a maximum. Incentive targets are established based on competitive practice and vary by organizational
level. Based on BioCryst’s actual performance and your performance, your actual incentive award in any given year may vary from $0 (0% of base salary) to a maximum incentive opportunity established for your organizational level.

 Awards are typically paid during mid-March in the year following the completion of the plan year. Participants must be employed by BioCryst on the date
of payout to eligible to receive an award. Awards may be paid in cash or in shares of the Company’s stock issued under the Company’s Stock Incentive Plan, at the discretion of the Company’s Compensation Committee. To the extent that
an award is paid in shares of Company stock, the number of shares will be determined by dividing the value of the award being paid in stock by the closing price of the stock on the grant date. For example, if $20,000 of a bonus were paid in stock
and the stock price were $5 per share, then 4,000 shares would be issued. 
 Annual Incentive Opportunity 

At the beginning of each plan year, eligible employees are notified of their participation in the new plan year and the annual incentive range based on their
position’s assigned organizational level. Annual incentive targets and ranges vary by organizational level and are expressed as a percentage of base salary. (An individual’s base salary as of the end of

  
 1 

 
the plan year is used for calculation purposes.) A range includes a minimum (0%), a target, and a maximum. 
 Performance Components and Measures 
 Annual incentive awards are based on two performance components:
BioCryst’s Performance and Individual Performance. The following provides further details so that you can understand how the Plan works. 

Company Performance Component 
 At the beginning of the plan
year, BioCryst establishes a set of critical performance objectives that the Company must strive to achieve during the year. These objectives represent BioCryst’s goals and reflect the Company’s top priorities for the plan year. The
objectives typically vary from year-to-year and focus on research milestones and outcomes, clinical development milestones, organizational processes, financial targets, and other short-term objectives and initiatives. The objectives are reviewed and
approved by BioCryst’s Board of Directors. 
 At the completion of the plan year, BioCryst’s performance is assessed against the established
business objectives for the plan year. This assessment is based on the extent to which BioCryst’s annual objectives are achieved – either meeting objectives, partially meeting objectives, exceeding objectives, or not meeting objectives.
This assessment serves as a basis for the determining the annual incentive pool available for eligible plan participants. 
 If BioCryst meets all its
objectives, the pool is roughly equal to the sum of the individual targets for the eligible participants in the Plan. As a simplistic example, if there were ten participants in the AIP who all have a base salary of $100,000 and a target of 25%, the
annual incentive pool if the Company met all its objectives would be roughly $250,000 ( $100,000 x .25 x 10 ). This pool may be adjusted upward or downward based on actual Company performance during the plan year. 

Individual Performance Component 
 As a participant, your
annual incentive is determined based on your overall performance during the plan year: the degree to which you achieve your annual objectives and carry out your ongoing responsibilities, and the competencies (behaviors/skills) you exhibit in the
process of achieving results. This year-end assessment is captured in your Performance Plan for the year as a part of BioCryst’s Performance Management Program. 
 The individual incentive target is only relevant when BioCryst achieves all of its objectives. For a year in which the Company does achieve all its objectives, an employee who is rated as a “strong
performer” would be eligible to receive an award at or close to target. Under BioCryst’s Performance Management Program, a “strong performer” is defined as: 

 

	 	•	 	 Achieved all individual objectives 

  

	 	•	 	 Most competencies are strong 

  

	 	•	 	 Fully meets all defined performance expectations of position 

  

	 	•	 	 Consistently carries out ongoing responsibilities as defined by role 

  
 2 

	 	•	 	 Strong contributions consistently made during the year 

  

	 	•	 	 Solid performer, someone you can always count on 

 Incentive Award Calculation 
 Once the overall annual incentive pool is determined, the individual incentive
targets are adjusted based on actual Company performance for the plan year. Individual incentive awards are determined based on the adjusted incentive targets and individual performance. 
 Incentive awards will vary relative to the incentive ranges, with differentiation based on individual performance. In all cases the approved incentive pool must be maintained. In addition, the individual maximums
(expressed as a percentage of base salary) always represent the maximum incentive possible. 
 Annual incentive awards are typically paid by March 15
of the year following the completion of the plan year and, whether they are paid in cash or stock, are subject to applicable tax withholding based on the current tax laws at the time of distribution. 

Illustration 
 To illustrate, assume an individual’s
annual incentive range is: 0% (minimum), 25% (target) and 30% (maximum). If, based on BioCryst’s performance, the annual incentive pool is determined to be 75% of the target incentive pool, then the individual’s target is adjusted
accordingly to 18.75% ( 25% x .75 ) for the plan year. In order for the employee to receive an incentive at roughly 18-19%, he or she would need to be assessed as a “strong performer” under the Performance Management Program. The maximum
incentive possible remains at 30%. 
 Incentive Restrictions 
 The Plan has two “safety nets” that prevent BioCryst from paying out incentive awards if specific performance levels are not achieved: 
 Company Performance:  For each plan year, the Board establishes both a minimum company performance level and a threshold company performance level. The minimum is the level below which the
company component would be paid at 0%, but an award would still be possible based on individual performance. The threshold represents the performance level that must be achieved for any annual incentive payouts to occur, regardless of
individual performance. This threshold protects the company from paying out awards in a year in which BioCryst’s results are poor. This threshold is set below the minimum level. It is at the Board’s discretion to decide the
minimum and threshold, and they typically vary from year to year. 
 Individual Performance:  No annual incentive is paid for any
individual who performs poorly and is assessed as a “weak performer,” regardless of whether the individual is placed on a Performance Improvement Plan or not. If such an employee subsequently improves his or her performance, the employee
will become eligible for an incentive in the following plan year. 

  
 3 

 Administrative Information 
 Plan Participation 
 BioCryst Pharmaceuticals employees whose positions are assigned to organizational levels
1, 2 and 3 (Executive Director and above) are eligible to participate in the BioCryst Annual Incentive Plan. 
 New eligible employees
hired on November 1 through the end of the plan year will wait until the next plan year to participate. New eligible employees who join BioCryst prior to November 1 are eligible for a pro rata incentive award based on the time period the
employee was employed by BioCryst during the year. Such prorated calculations are made based on whole months (month is counted in calculation if new hire date is the 15th or earlier). 
 Changes in
Employment 
 If you separate from BioCryst during the plan year due to death, retirement, or permanent disability, you are eligible to receive a pro
rata award based on your base salary on the date of separation during the plan year which you were considered an active employee and the number of whole months actively worked. If you voluntarily or involuntarily terminate employment with BioCryst
before the annual incentive awards are paid, you will forfeit all incentive award opportunities, regardless of individual and Company performance during the plan year. 
 Promotions and Demotions 
 If an eligible employee is promoted or demoted and the change in position results in
a change in organizational level, BioCryst will calculate the employee’s incentive based on the annual incentive ranges in the old and new positions. This pro rata calculation rounds to the number of full months in each position. 

Questions and Answers 
 Question: Will BioCryst’s
Company performance objectives change from year-to-year? 
 Answer: Most likely. Because the Annual Incentive Plan is a short-term plan, it
focuses on the achievement of business and individual objectives for a specific plan year. Although the same financial measure, performance measure or milestone may be used from year-to-year, performance objectives and achievements will be
established and assessed for the specific plan year. 
 Question:  Will BioCryst establish an annual incentive pool for every plan year?

 Answer:  The annual incentive pool is determined based on BioCryst’s performance during the year and the extent to which
Company objectives are achieved. If BioCryst does not achieve its objectives and performance thresholds are not attained, no pool will be established and no annual incentive awards will be earned. Conversely, if BioCryst exceeds performance
expectations, the pool will be set at a level above the target incentive 

  
 4 

 
pool. In all cases, the distribution of any incentive pool is based on the performance of the individuals participating in the AIP. 
 BioCryst’s Board of Directors also reserves the right not to establish an incentive pool or to reduce the pool if the financial health of the Company is in jeopardy, regardless of performance during a plan
year. 
 Question:  Will I have to pay taxes on my annual incentive award? 
 Answer:  After the completion of a plan year, awards are then determined based on the extent to which BioCryst met its objectives and based on your performance during the year. If you are eligible
for an award, your award will be paid and will be subject to applicable withholding taxes based on the current tax laws at the time of distribution. 

Question:  Am I eligible for an annual incentive award if my performance warrants being placed on a Performance Improvement Plan? 

Answer:  No annual incentive is paid for any individual who performs poorly and is assessed as a “weak performer,” regardless of whether
the individual is placed on a Performance Improvement Plan or not. If such an employee subsequently improves his or her performance, the employee will become eligible for an incentive in the following plan year. 

Question:  If I leave BioCryst before awards are paid, am I entitled to receive a portion of the Annual Incentive Award? 

Answer:  If you voluntarily or involuntarily leave the Company before payment of the award, you will forfeit your entire annual incentive award.
If, however, you leave the Company due to other circumstances, different rules may apply (see above). 
 Question:  What happens if I am on a
leave of absence during the plan year? 
 Answer:  Awards are prorated based on the time actively worked and time spent on a paid
leave of absence. Any period of time on an unpaid leave of absence will not be counted and the award will be prorated accordingly. 
 A Final Word

 This Plan Summary describes the provisions of the BioCryst Pharmaceuticals, Inc. Annual Incentive Plan. BioCryst Pharmaceuticals has the full right
to amend, suspend or terminate the plan at any time. The Compensation Committee of the Board has the right to interpret, modify or adjust any Plan provision. Enrollment in this plan is not a guarantee of employment. 

For illustration purposes, a hypothetical employee and award have been used in this plan summary. Actual awards, if any, will be determined by the performance of
BioCryst Pharmaceuticals and the individual participant. 

  
 5 

  

									
			
	  
	  	  
	  	Annual Incentive Range
					
	 Annual
 Incentive Plan
 Eligible Levels
	  	 	  	  
	 	  
	 	  

	  	        Position Titles        	  	        Minimum        	 	        Target        	 	        Maximum        
					
	1	  	CEO	  	0%	 	50%	 	75%
					
	2	  	SVP and VP	  	0%	 	30%	 	36%
					
	3	  	Executive Director	  	0%	 	25%	 	30%

  
 6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00201-of-00352.parquet"}]]