Document:

Blueprint

 

 

 

Yuma Energy, Inc.

 

2014
LONG-TERM INCENTIVE PLAN

 

NOTICE OF STOCK OPTION AWARD

 

	
 

	
 

	

Participant:

	
 

	

  (the
“Participant”)

	
 

	
 

	
 

	

Notice:

	

You
have been granted the following award of stock options of Yuma
Energy, Inc., a Delaware corporation (the “Company”), in accordance with the
terms of this Notice of Stock Option Award (this
“Notice”), the
Yuma Energy, Inc. 2014 Long-Term Incentive Plan, as assumed by the
Company in October 2016, as in effect and as amended from time to
time (the “Plan”), and the attached Stock
Option Agreement (the “Agreement”).

	
 

	
 

	

Date of Grant:

	
 

	

(the
“Date of
Grant”)

	
 

	
 

	
 

	
 

	
 

	
 

	

Aggregate Number of Stock Options:

	
 

	

 (the
“Options”)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

Type of Option:

	

 Nonqualified
Stock Option

	
 

	

       Incentive
Stock Option

	
 

	
 

	
 

	
 

	

Term:

	

The
close of business on the day before the 10th anniversary of the
Date of Grant (the “Expiration Date”)

	
 

	
 

	
 

	

Vesting Schedule:

	

Options

(Number
of Shares)

	

Vesting
Date

(each,
a “Vesting
Date”)

	
 

	

Exercise
Price Per Share

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

The
vesting of the Options is subject to your continued service as an
employee of the Company or any of its subsidiaries through such
Vesting Date, and upon the terms of this Notice, the Plan and the
Agreement.

	
 

	
 

	
 

 

You, by your
signature as the Participant below, acknowledge that you (i) have
reviewed the Agreement and the Plan in their entirety and have had
the opportunity to obtain the advice of counsel prior to executing
this Notice, (ii) understand that the award of the Options is
granted under and governed by the terms and provisions of this
Notice, the Agreement and the Plan, and (iii) agree to accept as
binding all of the determinations and interpretations made by the
Compensation Committee of the Board of Directors of the Company
with respect to matters arising under or relating to this Notice,
the Agreement and the Plan.

 

	
 

	
 

	

PARTICIPANT

	
 

	
 

	

YUMA ENERGY, INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

By:

	
 

	
 

	

By:

	
 

	
 

	
 

	

Name:

	
 

	
 

	

Name:

	
 

	
 

	
 

	
 

	
 

	
 

	

Title:

	
 

	
 

1

 

YUMA ENERGY, INC.

 

STOCK OPTION AGREEMENT

 

1. Award of Stock Options. Yuma
Energy, Inc., a Delaware corporation (the “Company”), hereby grants to the
Participant under the Yuma Energy, Inc. 2014 Long-Term Incentive
Plan, as in effect and as amended from time to time (the
“Plan”), an
award (the “Award”) of options to purchase an
aggregate number of shares (the “Shares”) of common stock, $0.001
par value per share, of the Company (the “Common Stock”), set forth in the
Notice of Stock Option Award (the “Notice”) attached to this Stock
Option Agreement (this “Agreement”), at each of the
exercise prices per share (collectively, the “Exercise Price”) set forth in the
Notice and each vesting date set forth in the Notice (collectively,
the “Vesting
Date”), subject to the terms, definitions and
provisions of the Plan and the terms of this Agreement. This
Agreement consists of the Notice and the terms and conditions of
the Plan. Unless otherwise provided herein, capitalized terms
herein will have the same meanings as in the Plan or in the
Notice.

 

2. Designation of Option. This
Award is intended to be an Incentive Stock Option as defined in
Section 422 of the Code only to the extent so designated in
the Notice, and to the extent it is not so designated or to the
extent this Award does not qualify as an Incentive Stock Option, it
is intended to be a Nonqualified Stock Option.

 

Notwithstanding the
above, if designated as an Incentive Stock Option, in the event
that the Shares subject to this Award (and all other Incentive
Stock Options granted to Participant) that first become exercisable
in any calendar year have an aggregate fair market value
(determined for each Share as of the Date of Grant of this Award
covering such Share) in excess of $100,000, the Shares in excess of
$100,000 shall be treated as subject to a Nonqualified Stock
Option.

 

3. Vesting.

 

(a) Vesting of the Options. Except
as otherwise provided in this Agreement or the Plan, the Options
awarded by this Agreement are scheduled to vest and be exercisable
in accordance with the vesting schedule (the “Vesting Schedule”) set forth in
the Notice; provided, however, no Options shall vest after the
Expiration Date. The Options scheduled to vest on a Vesting Date
will vest only if the Participant remains in continued service as
an employee of the Company or any of its subsidiaries through such
Vesting Date. Should the Participant’s continued service as
an employee of the Company or any of its subsidiaries end
(“Termination of
Service”) at any time (the “Termination Date”), any unvested
Options will be immediately terminated and forfeited. However, the
Compensation Committee (the “Committee”) of the Board of
Directors (the “Board”) of the Company may, in its
discretion, vest any unvested Options upon the Participant’s
Termination of Service.

 

(b) Change of Control Event. If
there is a Change of Control Event, any unvested Options shall not
vest immediately and shall remain outstanding and continue subject
to restrictions in accordance with the terms hereof, unless one of
the following things happens:

 

(i) the Committee, in
its sole discretion, without the consent of the Participant or
holder of this Award, and on such terms and conditions as it deems
appropriate, may take any one or more of the actions or make the
adjustments set forth in Section 12.2 of the Plan in connection
with such Change in Control Event; and

 

(ii) unless
the terms contained in any employment agreement between the
Participant and the Company provide otherwise, if the Participant
incurs a Termination of Service within a period beginning sixty
(60) days before and ending twelve (12) months following a Change
of Control Event on account of (1) a termination by the Company or
any of its subsidiaries for any reason other than Cause, or (2) a
termination by the Participant for Good Reason, then any unvested
Options shall vest on the Termination Date.

 

 

2

 

 

For
purposes of this Agreement, the following definitions
apply:

 

“Good Reason” means without the
Participant’s written consent (A) a material reduction
in the Participant’s authority, duties or responsibilities
compared to the Participant’s authority, duties and
responsibilities immediately prior to the Change of Control Event;
(B) the Participant’s principal work location being
moved more than thirty-five (35) miles, from the location
immediately prior to the Change of Control Event; (C) the
Company or any of its subsidiaries materially reduces the
Participant’s base salary (unless the base salaries of
substantially all other senior executives of the Company are
similarly reduced); or (D) if the Participant is a party to an
employment agreement with the Company, any material breach of such
employment agreement by the Company.  The Participant
will not resign for Good Reason without first providing the Company
with written notice of the acts or omissions constituting the
grounds for “Good Reason” within ninety (90) days of
the initial existence of the grounds for “Good Reason”
and the Company must have an opportunity within thirty (30) days
following delivery of such notice to cure the Good Reason
condition.

 

“Cause” means (A) the
Participant’s failure to perform (other than due to
Disability or death) the duties of the Participant’s position
(as they may exist from time to time) to the reasonable
satisfaction of the Company or any of its subsidiaries after
receipt of a written warning and at least fifteen (15) days’
opportunity for the Participant to cure the failure, (B) any
act of fraud or dishonesty committed by the Participant against or
with respect to the Company or any of its subsidiaries or customers
as shall be reasonably determined to have occurred by the Board,
(C) the Participant’s conviction or plea of no contest
to a crime that negatively reflects on the Participant’s
fitness to perform the Participant’s duties or harms the
Company’s or any of its subsidiaries’ reputation or
business, (D) the Participant’s willful misconduct that
is injurious to the Company or any of its subsidiaries, or
(E) the Participant’s willful violation of a material
Company or any of its subsidiaries policy. The preceding definition
shall not be deemed to be inclusive of all the acts or omissions
that the Company or any of its subsidiaries may consider as grounds
for the dismissal or discharge of the Participant or any other
individual in the service of the Company or any of its
subsidiaries.  Notwithstanding the foregoing, if the
Participant is a party to an employment agreement with the Company,
the definition of “cause” as defined in the employment
agreement will supersede the above definition.

 

(c) All Options held by
the Participant which are not vested on the Termination Date
pursuant to the provisions of Sections 3(a) or 3(b) shall be deemed
terminated and forfeited.

 

4. Exercise of the Options. This
Award will be exercisable during its term in accordance with the
Vesting Schedule set forth in the Notice as follows:

 

(a) Right to Exercise.

 

(i) This Award may not
be exercised for a fraction of a share of Common
Stock.

 

(ii) This
Award may not be exercised if the issuance of Common Stock at that
time would violate any law or regulation.

 

(iii) In
no event may this Award be exercised after the Expiration Date set
forth in the Notice.

 

(b) Method of Exercise. This Award,
or any exercisable portion thereof, may be exercised, prior to the
Expiration Date to the extent such Option is vested, solely by
delivery of the Exercise Notice (attached hereto as Exhibit A) to the Corporate
Secretary of the Company.

 

(c) Payment of Exercise Price.
Payment of the Exercise Price may be by any of the following, or a
combination thereof, at the election of the
Participant:

 

(i) cash or
check;

 

 

3

 

 

(ii) Common
Stock already owned by the Participant for at least six (6) months
prior to the date of exercise and based on the Fair Market Value of
the Common Stock on the date this Award is exercised;

 

(iii) irrevocable
instructions to a broker to deliver promptly to the Company the
amount of sale or broker loan proceeds necessary to pay the
Exercise Price;

 

(iv) net
cashless exercise; or

 

(v) any combination of
(i), (ii), (iii), or (iv) above.

 

(d) Withholding. The Participant
will not be allowed to exercise this Award unless he or she makes
arrangements acceptable to the Company to pay any withholding taxes
that may be due as a result of the Option exercise as set forth in
Section 6.

 

5. Termination of the
Award.

 

(a) Term. This Award expires in any
event at the close of business at Company headquarters on the day
before the 10th anniversary of the Date of Grant, set forth in the
Notice. (It will expire earlier if the Participant’s service
as an employee of the Company or any of its subsidiaries ceases, as
described herein.)

 

(b) Termination for Reasons Other Than
Cause, Death, Disability. If the Participant’s
continued service as an employee of the Company or any of its
subsidiaries ends for any reason other than Cause, death or
Disability, the Participant may exercise the vested Options, but
only within such period of time ending on the earlier of (i) the
date three (3) months following the Participant’s Termination
Date and (ii) the Expiration Date.

 

(c) Termination Due to Disability.
If the Participant’s continued service as an employee of the
Company or any of its subsidiaries ends as a result of the
Participant’s Disability, the Participant may exercise the
vested Options, but only within such period of time ending on the
earlier of (i) the date twelve (12) months following the
Participant’s Termination Date and (ii) the Expiration
Date.

 

(d) Termination Due to Death. If
the Participant’s continued service as an employee of the
Company or any of its subsidiaries ends as a result of the
Participant’s death, the vested Options may be exercised by
the Participant’s estate, by a person who acquired the right
to exercise the Options by bequest or inheritance or by the person
designated to exercise the Options upon the Participant’s
death, but only within the time period ending on the earlier of (i)
the date twelve (12) months following the Participant’s
Termination Date and (ii) the Expiration Date.

 

(e) Termination for Cause. If the
Participant’s continued service as an employee of the Company
or any of its subsidiaries ends for Cause, the Options (whether
vested or unvested) shall immediately terminate and cease to be
exercisable.

 

6. Taxes.

 

(a) Tax Liability.  The
Participant is ultimately liable and responsible for all taxes owed
by the Participant in connection with this Award, regardless of any
action the Company takes with respect to any tax withholding
obligations that arise in connection with this Award. The
Company does not make any representation or undertaking regarding
the treatment of any tax withholding in connection with the grant
or vesting of this Award or the subsequent exercise of the
Options. The Company does not commit and is under no
obligation to structure this Award to reduce or eliminate the
Participant’s tax liability.

 

(b) Payment of Withholding
Taxes.   In the event required by federal, state
or local law, the Company will have the right and is hereby
authorized to withhold, and/or to require the Participant to pay
upon the occurrence of the event triggering the requirement, any
applicable withholding taxes in respect of the Options, their
grant, vesting, exercise or otherwise and to take such other action
as may be necessary in the opinion of the Committee to satisfy all
obligations for the payment of such withholding taxes. The Company,
in its sole discretion and pursuant to such procedures as it may
specify from time to time, may permit the Participant to satisfy
such tax withholding obligation, in whole or in part (without
limitation) by (i) paying cash; (ii) electing to have the Company
withhold otherwise then deliverable shares of Common Stock upon
exercise of the Options having a Fair Market Value equal to the
minimum amount required to be withheld; (iii) delivering to
the Company, vested and owned shares of Common Stock having a Fair
Market Value equal to the amount required to be withheld; or (iv)
through any other lawful manner. The Participant agrees to
indemnify and hold the Company harmless from any losses, costs,
damages, or expenses relating to inadequate withholding. The
Company shall withhold from any dividends paid during the vesting
period only the amounts the Company is required to withhold to
satisfy any applicable tax withholding requirements with respect to
such dividends based on minimum statutory withholding rates for
federal and state tax purposes, including any payroll
taxes.

 

 

4

 

 

YOU FURTHER ACKNOWLEDGE THAT THE COMPANY HAS DIRECTED YOU TO SEEK
INDEPENDENT ADVICE REGARDING THE APPLICABLE PROVISIONS OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”),
AND THE INCOME TAX LAWS OF ANY MUNICIPALITY OR STATE IN WHICH YOU
MAY RESIDE.

 

7. No Rights as Stockholder. Until
the issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company)
of the Shares, no right to vote or receive dividends or any other
rights as a stockholder will exist with respect to the Shares
subject to the Award, notwithstanding the exercise of this Award.
The Shares so acquired will be issued to the Participant as soon as
practicable after exercise of the Award. No adjustment will be made
for a dividend or other right for which the record date is prior to
the date of issuance, except as provided in the Plan.

 

8. No Effect on Employment.
Nothing contained in this Agreement shall confer upon the
Participant the right to continue as an employee of the Company or
any of its subsidiaries.

 

9. Address for Notices. Any notice
to be given to the Company under the terms of this Agreement shall
be addressed to the Company, Attn: Corporate Secretary, at the
Company’s headquarters, 1177 West Loop South, Suite 1825,
Houston, Texas 77027, or at such other address as the Company may
hereafter designate in writing. Any notice to be given to the
Participant will be addressed to such Participant at the address
maintained by the Company for such person or at such other address
as the Participant may specify in writing to the
Company.

 

10. Award is Not Transferable. This
Award and the rights and privileges conferred hereby will not be
transferred, assigned, pledged or hypothecated in any way (whether
by operation of law or otherwise) and will not be subject to sale
under execution, attachment or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this
Award, or of any right or privilege conferred hereby, or upon any
attempted sale under any execution, attachment or similar process,
this Award and the rights and privileges conferred hereby
immediately will become null and void.

 

11. Compliance with Laws and
Regulations.

 

(a) If the Participant
is an “affiliate” of the Company, as that term is
defined in Rule 144 (“Rule
144”) under the Securities Act of 1933, as amended
(the “Securities
Act”), the Participant may not sell the Common Stock
received upon exercise of any Options unless in compliance with
Rule 144. Further, the Participant’s subsequent sale of the
Common Stock received upon the exercise of this Award will be
subject to any market blackout-period that may be imposed by the
Company and must comply with the Company’s insider trading
policies and any other applicable securities laws. The Participant
acknowledges and agrees that, prior to the sale of any Common Stock
acquired hereunder, it is the Participant’s responsibility to
determine whether or not such sale of such Common Stock will
subject the Participant to liability under insider trading rules or
other applicable federal securities laws.

 

(b) The obligation of
the Company to deliver Common Stock upon exercise hereunder will be
subject in all respects to (i) all applicable federal and
state laws, rules and regulations and (ii) any registration,
qualification, approvals or other requirements imposed by any
government or regulatory agency or body which the Committee will,
in its discretion, determine to be necessary or applicable.
Moreover, the Company will not issue any Common Stock to the
Participant or any other person pursuant to this Agreement if doing
so would be contrary to applicable law. If at any time the Company
determines, in its discretion, that the listing, registration or
qualification of the Common Stock upon any national securities
exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or
desirable, the Company will not be required to issue any Common
Stock to the Participant or any other person pursuant to this
Agreement unless and until such listing, registration,
qualification, consent or approval has been effected or obtained,
or otherwise provided for, free of any conditions not acceptable to
the Company.

 

 

5

 

 

12. Market Standoff Agreement. The
Participant agrees in connection with any registration of the
Company’s securities under the Securities Act that, upon the
request of the Company or the underwriter(s) managing any
registered public offering of the Company’s securities, the
Participant will not sell or otherwise dispose of any shares of
Common Stock acquired pursuant to this Agreement without the prior
written consent of the Company or such underwriters, as the case
may be, for such period of time (not to exceed one hundred eighty
(180) days) after the effective date of such registration requested
by such managing underwriter(s) and subject to all restrictions as
the Company or the managing underwriter(s) may specify for
employees, directors or other service provider stockholders
generally. The Participant further agrees to enter into any
agreement reasonably required by the underwriter(s) to implement
the foregoing.

 

13. Binding Agreement. This
Agreement will be binding upon and inure to the benefit of the
heirs, legatees, legal representatives, successors and assigns of
the parties hereto.

 

14. Committee Authority. All
actions taken and all interpretations and determinations made by
the Committee will be final and binding upon the Participant, the
Company and all other persons, and will be given the maximum
deference permitted by law. No member of the Committee will be
personally liable for any action, determination or interpretation
made in good faith with respect to this Agreement.

 

15. Captions. Captions provided
herein are for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.

 

16. Provisions Severable. In the
event that any provision in this Agreement is held invalid or
unenforceable, such provision will be severable from, and such
invalidity or unenforceability will not be construed to have any
effect on, the remaining provisions of this Agreement.

 

17. Entire Agreement. This
Agreement, including the Notice, and the Plan constitute the entire
understanding of the parties relating to the subjects covered
herein. The Participant expressly warrants that he or she is not
executing the Notice in reliance on any promises, representations
or inducements other than those contained herein and in the
Plan.

 

18. Modifications to this
Agreement. No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, will
be effective unless made in writing signed by the Participant and a
duly authorized officer of the Company. All modifications of or
amendments to this Agreement must either (a) comply with Section
409A of the Code or (b) not cause this Award to be subject to
Section 409A of the Code if this Award is not already subject to
Section 409A of the Code.

 

19. Amendment, Suspension or Termination
of the Plan. By accepting this Award, the Participant
expressly warrants that he or she has received an award under the
Plan, and has received, read and understood a description of the
Plan. The Participant understands that the Plan is discretionary in
nature and may be modified, suspended or terminated by the Company
at any time.

 

20. Recoupment Policy.
Notwithstanding the vesting terms of this Agreement, this Award is
subject to any compensatory recovery (clawback) policy in effect at
the time of each Vesting Date.

 

21. Governing Law; Dispute
Resolution.

 

 

6

 

 

(a) This Agreement will
be governed by, and construed in accordance with, the laws of the
State of Texas, without regard to its conflict of law
provisions.

 

(b) Any dispute arising
out of, or relating to this Agreement or any breach hereof, shall
be resolved by binding arbitration in Harris County, Texas, in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect, and judgment on the award
rendered by the arbitrator(s) may be entered in any court of
competent jurisdiction. The location of such arbitration in Harris
County, Texas, shall be selected by the Company in its sole and
absolute discretion. All costs and expenses, including
attorneys’ fees, relating to the resolution of any such
dispute shall be borne by the party incurring such costs and
expenses.

 

22. Data Protection. By accepting
this Award, the Participant agrees and consents:

 

(a) to the collection,
use, processing and transfer by the Company of certain personal
information about the Participant, including the
Participant’s name, home address and telephone number, date
of birth, other employee information, details of the Options
granted to the Participant, and of Common Stock issued or
transferred to the Participant pursuant to this Agreement
(“Data”);
and

 

(b) to the Company
transferring Data to any subsidiary or affiliate of the Company for
the purposes of implementing, administering and managing this
Agreement; and

 

(c) to the use of such
Data by any person for such purposes; and

 

(d) to the transfer to
and retention of such Data by third parties in connection with such
purposes.

 

23. Plan Governs. Except where
explicitly stated in this Agreement, this Agreement is subject to
all terms and provisions of the Plan. In the event of a conflict
between one or more provisions of this Agreement and one or more
provisions of the Plan, the provisions of the Plan shall govern,
unless the Committee shall determine otherwise.

 

24. Adjustments. In the event of a
stock split, a stock dividend or a similar change in the Common
Stock, the number of shares covered by this Award and the Exercise
Price may be adjusted pursuant to the Plan.

 

25. Notice of Disqualifying Disposition of
Incentive Stock Option Shares. If this Award granted to
Participant herein is an Incentive Stock Option, and if Participant
sells or otherwise disposes of any shares of Common Stock acquired
pursuant to the Incentive Stock Option on or before (i) the
date two (2) years after the Date of Grant, or (ii) the
date one (1) year after the date of transfer to the
Participant of the Common Stock, Participant will immediately
notify the Company in writing of such disposition. Participant
agrees that Participant may be subject to additional income tax
withholding by the Company on his salary or wages as a result of
the compensation income recognized by the Participant.

 

26. Participant Acknowledgements.
The Participant acknowledges receipt of a copy of the Plan and
represents that he or she is familiar with the terms and provisions
thereof, and hereby accepts this Award subject to all of the terms
and provisions hereof and thereof. The Participant has reviewed
this Agreement and the Plan in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing the
Notice and fully understands all provisions of this Agreement,
including the Notice, and the Plan.

 

THE
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE OPTIONS WILL VEST, IF
AT ALL, ONLY DURING THE PERIOD OF THE PARTICIPANT’S CONTINUED
SERVICE AS AN EMPLOYEE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES
(NOT THROUGH THE ACT OF BEING GRANTED THIS AWARD OR ACQUIRING
COMMON STOCK HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES AND
AGREES THAT NOTHING IN THE NOTICE, THIS AGREEMENT NOR THE PLAN WILL
CONFER UPON THE PARTICIPANT ANY RIGHT WITH RESPECT TO CONTINUATION
OF THE PARTICIPANT’S SERVICE AS AN EMPLOYEE OF THE COMPANY OR
ANY OF ITS SUBSIDIARIES.

 

 

7

 

 

 

Yuma Energy, Inc.

 

2014 LONG-TERM INCENTIVE PLAN

 

EXERCISE NOTICE

Yuma
Energy, Inc.

1177
West Loop South, Suite 1825

Houston,
Texas 77027

 

Attention:
Corporate Secretary

 

1. Exercise of Award. Effective as
of today,             ,
        ,
the undersigned (the “Purchaser”) hereby elects to
purchase                         
shares (the “Shares”) of the Common Stock of
Yuma Energy, Inc., a Delaware corporation (the “Company”), under and pursuant to
the Yuma Energy, Inc. 2014 Long-Term Incentive Plan, as amended
(the “Plan”),
and the Stock Option Agreement dated                 
(the “Agreement”). The purchase price
for the Shares will be $                     
, as required by the Agreement. Unless otherwise provided herein,
capitalized terms herein will have the same meanings as in the Plan
or the Agreement.

 

2. Delivery of Payment. The
Purchaser herewith delivers to the Company the full purchase price
of the Shares and any required tax withholding to be paid in
connection with the exercise of the Award.

 

3. Representations of Purchaser.
The Purchaser acknowledges that the Purchaser has received, read
and understood the Plan and the Agreement and agrees to abide by
and be bound by their terms and conditions.

 

4. Rights as Stockholder. Until
the issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company)
of the Shares, no right to vote or receive dividends or any other
rights as a stockholder will exist with respect to the Shares
subject to the Award, notwithstanding the exercise of the Award.
The Shares so acquired will be issued to the Purchaser as soon as
practicable after exercise of the Award. No adjustment will be made
for a dividend or other right for which the record date is prior to
the date of issuance, except as provided in the Plan.

 

5. Tax Consultation. The Purchaser
understands that the Purchaser may suffer adverse tax consequences
as a result of the Purchaser’s purchase or disposition of the
Shares. The Purchaser represents that the Purchaser has consulted
with any tax consultants the Purchaser deems advisable in
connection with the purchase or disposition of the Shares and that
the Purchaser is not relying on the Company for any tax
advice.

 

6. Entire Agreement; Governing
Law. The Plan and Agreement are incorporated herein by
reference. This Exercise Notice, the Plan and the Agreement
constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and the Purchaser with
respect to the subject matter hereof, and may not be modified
adversely to the Purchaser’s interest except by means of a
writing signed by the Company and the Purchaser. This Exercise
Notice will be governed by, and construed in accordance with, the
laws of the State of Texas, without regard to its conflict of law
provisions.

 

	
 

	
 

	
	

Submitted By:

	
 

	
 

	

Accepted By:

	
 

	
 

	
 

	
	

PURCHASER

	
 

	
 

	

YUMA ENERGY, INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

By:

	
 

	
 

	
 

	
 

	

Name:

	
 

	

Name:

	
 

	
 

	
 

	
 

	
 

	
 

	

Title:

	
 

	
 

 

 

8Exhibit

Exhibit 10.1

FELCOR LODGING TRUST INCORPORATED
FELCOR ODGING LIMITED PARTNERSHIP
125 E. John Carpenter Freeway, Suite 1600
Irving, TX 75062

April 23, 2017

[EXECUTIVE]
c/o FelCor Lodging Trust Incorporated

Dear [EXECUTIVE]:
Thank you for your commitment to FelCor Lodging Trust Incorporated and FelCor Lodging Limited Partnership (the “Company”) as we work to complete the pending merger transaction with RLJ Lodging Trust and RLJ Lodging Trust, L.P. (the “Merger”).  If the Merger is completed, it will constitute a Change in Control of the Company under your Change in Control and Severance Agreement with the Company (your “Agreement”), which would entitle you to the enhanced severance protection under your Agreement in the event you have a qualifying termination of employment.  In consideration for the increased benefits that you will receive in the Merger and our agreement that the Merger constitutes a change in control under your Agreement, we request that you agree to certain amendments to your Agreement, including that payment of severance benefits under your Agreement be conditioned on your execution and non-revocation of a waiver and release in the form attached to this letter as Exhibit A (the “Release”).
Specifically, we ask that you agree as follows:
If your employment terminates in connection with the Merger, your right to severance benefits will be determined in accordance with the terms of your Agreement, except that the severance benefits will be payable only if you sign the attached Release within 45 days after your Date of Termination and no earlier than your Date of Termination, as defined in the Agreement, and you do not revoke the Release within seven days after you have signed it.
Notwithstanding anything to the contrary in the Agreement, if given written notice of your termination of employment without Cause, you will terminate employment with the Company and all affiliates on the Date of Termination set forth in such Notice of Termination that is coincident with or following the consummation of the Merger, and, subject to your execution of the Release and receipt of severance benefits, you will not dispute such termination, Date of Termination or Notice of Termination. You agree that a written notice of termination without Cause need not include any information besides a statement that you are being terminated without Cause and the Date of Termination. You will be provided at least 30 days’ notice, 30 

days’ of pay in-lieu of notice or a combination thereof covering at least 30 days, which will be paid regardless of whether you sign the Release.
The Severance Payment Date under your Agreement will be the first business day after the Release becomes effective (except that (a) if the 45-day period following your Date of Termination straddles two years, then it will be paid it the later year to the extent required by applicable tax law and (b) if required by the Agreement due to the application of federal tax law, the Severance Payment Date may be delayed by six months).  
This letter agreement is effective as of the date it is signed by you, but will terminate if the Merger is not consummated.  
Please acknowledge your agreement with the terms set forth herein by signing this letter where indicated below and returning a copy to me.
Sincerely,

FELCOR LODGING TRUST INCORPORATED, acting individually and as the sole general partner of FelCor Lodging Limited Partnership

 
By: _________________________     
Name:                      
Title:                      

Accepted:
_______________________________ 
[EXECUTIVE]
Date: April 23, 2017

Exhibit A
RELEASE AGREEMENT
This Release Agreement (the “Agreement”) is made by and among (i) [EXECUTIVE] (“Executive”) and (ii) FelCor Lodging Trust Incorporated, and any parent, subsidiary, and/or affiliate companies or entities (including FelCor Lodging Limited Partnership) (collectively, the “Company”), as well as any officers, directors, managers, members, shareholders, investors, administrators, general or limited partners, agents, employees, accountants, and/or attorneys associated or affiliated with the Company. The signatories to this Agreement will be referred to collectively as the “Parties” and individually as a “Party.” The effective date of this Agreement shall be the date that falls seven (7) days after Executive signs this Agreement without revocation (the “Effective Date”).
WHEREAS, Executive and the Company have entered into a Change in Control and Severance Agreement (the “Severance Agreement”);
WHEREAS, Executive and the Company have entered into a letter agreement dated April 23, 2017 (the “Letter Agreement”) that modifies certain provisions (but not any provisions relating to the amount or value of severance benefits) in the Severance Agreement; and
WHEREAS, Executive and the Company desire to end the employment relationship that has existed between them, to provide for the orderly transition of Executive’s duties and responsibilities, and provide Executive with Severance Benefits (defined below) in connection with Executive’s departure from the Company in accordance with the terms of the Severance Agreement, the Letter Agreement, and this Agreement.
NOW, THEREFORE, in consideration of the covenants and mutual promises and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
Release and Waiver Agreement. Executive acknowledges and understands that this Agreement is a release and waiver contract and that this document is legally binding. Executive and the Company understand and acknowledge that by executing this Agreement, each Party has confirmed that he and it has read and understood each provision and he and it agree to all of the provisions set forth in this Agreement.
Claims Covered by Agreement. Executive and the Company acknowledge and understand that this Agreement applies only to claims that accrue or have accrued prior to the date Executive signs this Agreement.
Consultation with Attorney, Review Period, and Revocation Period.
Executive is advised, and acknowledges that he has been advised, to consult with an attorney prior to executing this Agreement concerning the meaning, import, and legal significance 

of this Agreement. Executive acknowledges that he has read completely and fully understands this Agreement, as signified by his signature hereto, and is voluntarily executing the same after having the opportunity to obtain advice of counsel for the purposes and consideration herein expressed.
Executive acknowledges that he has been provided with a period of at least forty-five (45) days within which to consider, review, and reflect upon the terms of this Agreement (the “Consideration Period”), during which time he may seek counsel. The Parties agree that any discussions about or changes to this Agreement, whether material or immaterial, will not restart the running of the Consideration Period.
Executive acknowledges that he understands that he has seven (7) days in which he may revoke this Agreement after he signs it; this Agreement shall not be effective until the expiration of seven (7) days after Executive signs this Agreement, without revocation; and any revocation of this Agreement must be delivered to the Company’s General Counsel prior to the expiration of seven (7) days after Executive signs this Agreement.  If Executive timely revokes his acceptance of this Agreement, this Agreement shall be voided in its entirety, and Executive shall not be entitled to receive any of the Severance Benefits (defined below), and to the extent Executive already received Severance Benefits, he must immediately return the amount received.
Severance Benefits. In exchange for the promises made, covenants contained, and consideration provided by Executive in this Agreement, the Company shall pay to Executive the severance benefits (the “Severance Benefits”) set forth in the Severance Agreement, as applicable depending upon the circumstances relating to Executive’s departure from the Company. The Parties agree that the specific Severance Benefits to be provided are as follows:
A lump sum payment equal to the Applicable Multiple times your Annual Compensation, as those terms are defined and set forth in the Severance Agreement;
Continued benefits coverage for Executive and his or her dependents for a period of 24 months following the Date of Termination, which includes life, disability, accident and health insurance benefits that are substantially identical to those Executive (and his or her dependents) was receiving immediately prior to the Date of Termination, subject to the terms of Section 6(d) of the Severance Agreement; and
To the extent provided under the Severance Agreement and triggered by the Merger (as defined in the Letter Agreement), any amount due as a Gross Up Payment under Section 7 of such agreement.
The Company will also pay all legal fees and expenses incurred by the Executive as a result of the termination in connection with the enforcement of your rights or benefits under the Severance Agreement (as modified by the Letter Agreement) or any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Internal Revenue Code of 1986, as amended. For the avoidance of doubt, regardless of whether Executive executes this Agreement and allows it to become effective, Executive will receive (1) the benefits set forth in Section 4 of the Severance Agreement; (2) Executive’s full base salary through the Date of Termination (and, if applicable, pay in lieu of notice as described in the Letter Agreement), plus all amounts to which you are then 

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irrevocably vested and to which you are then entitled under any compensation plan of the Company, at the time such payments are due under the terms of such plan and (3) compensation or other awards payable or due to you in respect of any period preceding the Date of Termination under any incentive compensation plan or agreement thereunder, in accordance with and subject to the terms of such plans and agreements.
The Company’s payment of the Severance Benefits is subject to applicable federal, state, and local taxes and withholding. Executive acknowledges and agrees that the Severance Benefits, when provided to Executive, constitute the totality of all benefits of any kind due and owing to Executive upon the termination of his employment with the Company and that, upon receipt of those Severance Benefits, Executive shall be entitled to no other benefits, payments, distributions, transfers, penalties or other amounts or consideration of any kind from the Company upon the occurrence of the termination of his employment as a consequence of, relating to, or in connection with Executive’s employment by the Company or the termination of such employment by the Company.
Release and Waiver by Executive.
In consideration of the payment or provision of certain benefits set forth in the Severance Agreement, the promises and mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Executive, for himself and on behalf of his descendants, dependents, heirs, executors, trustees, administrators, assigns, and successors, knowingly and voluntarily releases and forever discharges the Released Parties (as defined below in this Section 5) from any and all manner of action or actions, cause or causes of action, suits, debts, contracts, agreements, promises, liability, claims, demands, damages payments, compensation, loss, cost, or expense, of any nature whatsoever, known or unknown, in law or in equity (hereinafter “Claims”), which he now has or may have against any of the Released Parties arising out of, based upon, or indirectly or directly related to any matter, cause, or thing that occurs, accrues, or otherwise exists on or before the date of execution of this Agreement. Claims released by Executive include, without limitation, claims relating to or arising out of (i) his hiring, compensation, benefits, and employment with the Company; (ii) his separation from employment from the Company; (iii) any claimed bonus or any other payments,  (iv) the right to raise a “dispute” under Section 5(e) of the Severance Agreement; and (v) all Claims arising out of his employment known or unknown that could or have been asserted by him against the Company, at law or in equity, or sounding in contract, express or implied, (including breach of or any rights under any agreement to which Executive, on the one hand, and the Company, on the other hand, are parties), sounding in tort, and any and all fraud-based Claims. Additionally, Claims released herein specifically include, but are not limited to, any Claims arising under any federal, state, or local laws of any jurisdiction that prohibit age, sex, race, national origin, color, disability, religion, veteran, military status, sexual orientation, or any other form of discrimination, harassment, or retaliation, including, without limitation, all Claims under the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621, et seq. (the “ADEA”), the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, the Rehabilitation Act, the Equal Pay Act, the Family and Medical Leave Act, 42 U.S.C. §1981, the Civil Rights Act of 1991, the Civil Rights Act of 1866 and/or 1871, the Sarbanes Oxley Act, the Occupational Safety and Health Act, the Employee Polygraph Protection Act, the Uniform Services 

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and Employment and Re- Employment Rights Act, the Worker Adjustment Retraining Notification Act, the Lilly Ledbetter Act, the Genetic Information and Nondiscrimination Act, the National Labor Relations Act, the retaliation provisions of the Fair Labor Standards Act, the Labor Management Relations Act, and any other similar or equivalent federal, state, or local laws, all as amended; all Claims under any federal, state, local, municipal, or common law concerning whistleblower protection; and all Claims arising under the Employee Retirement Income Security Act. This release shall run to and be for the benefit of the Company, RLJ Lodging Trust, RLJ Lodging Trust, L.P., and their respective parents, divisions, subsidiaries,  and related or affiliated entities, and each of their associates, owners, representatives, trustees, shareholders, members, directors, officers, partners, employees, insurers, contractors, agents, and attorneys, past or present, and all persons acting by, through, under or in concert with any of them and all predecessors, successors, and assigns thereof (collectively the “Released Parties”).
Executive acknowledges and agrees that his release and waiver of Claims also includes without limitation all Claims under the ADEA, as amended, including by the Older Workers Benefit Protection Act, and any municipal, state, or federal law regarding age discrimination. The following terms and conditions apply to and are part of the release of ADEA claims under this Agreement: (i) Executive is not waiving or releasing a claim challenging the validity of Executive’s release and waiver of Claims based on the ADEA; and (ii) Executive is not waiving or releasing any right or claim under the ADEA that may arise after he signs this Agreement.
Executive hereby specifically covenants and agrees that Executive will not initiate, or cause to be initiated, any action or cause of action against the Company or any of the other Released Parties in the future asserting any Claim covered by the release.  Executive further represents and warrants that he has not previously filed any claim or joined in any claim or suit against the Released Parties.
The Parties acknowledge that they are parties to a Guaranty Agreement date ________ (the “Guaranty Agreement”). The Parties agree that, upon payment of the Severance Benefits to Executive, the Guaranty Agreement is hereby amended to provide that all rights to the Severance Benefits under the Guaranty Agreement are satisfied and extinguished.
Under the terms of this Agreement, Executive is not waiving or releasing (i) the right to file a charge with, or participate in an investigation by, the Equal Employment Opportunity Commission or any other federal or state agency, but he acknowledges and agrees that the consideration provided under this Agreement shall be the sole relief to him for any claims released herein, and he is not entitled to recover, and agrees to waive, any monetary benefits or recovery against the Released Parties in connection with any such charge or investigation, without regard to who filed such charge or initiated such investigation; (ii) any rights or claims that may arise after the date on which he signs this Agreement, including Claims arising from or related to a breach of the Severance Agreement; (iii) any rights or claims which cannot be waived by law, including his right to workers compensation; (iv) any rights to unemployment, state disability and/or paid family leave insurance benefits pursuant to the terms of applicable law; (v) any rights that Executive has as a holder of securities of the Company or other Person; (vi) any rights to vested benefits and (vii) any rights to indemnification and directors and officers liability insurance coverage.  

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Notwithstanding anything to the contrary herein, this Agreement does not prohibit Executive, where applicable, from confidentially or otherwise communicating or filing a charge or complaint with a governmental or regulatory entity, participating in a governmental or regulatory entity investigation, or giving truthful testimony or statements or other disclosures to a federal, state or local governmental or regulatory entity, in each case without having to disclose any such conduct to the Released Parties, or from responding if properly subpoenaed or otherwise required to do so under applicable law.  Nothing in this Agreement shall limit Executive’s ability to disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law or to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.  To the extent permitted by law, Executive agrees that if any claim is made based on any matter released herein, Executive hereby waives, and agrees that Executive shall not be entitled to recover and the Released Parties shall not be liable for, any further monetary or other relief arising out of or related to any such matter for any actual or alleged personal injury or damages to Executive, including without limitation any costs, expenses and attorneys' fees incurred by or on behalf of Executive (it being understood, however, that this Agreement does not limit Executive’s right to receive an award from a governmental or regulatory entity for information provided to such an entity, and not as compensation for actual or alleged personal injury or damages to Executive).
No Admission of Liability. This Agreement does not amount to, and shall not be construed as, an admission of liability or wrongdoing of any kind on the part of Executive or the Released Parties.
Eligibility for Rehire. Executive acknowledges and agrees that, by signing this Agreement, he is voluntarily giving up any right he may have to maintain an employment, independent contractor, or consultant relationship with the Company. Executive further agrees not to seek any employment, independent contractor or consultant relationship with, or to submit an application to, the Company at any time in the future.
Termination. Executive acknowledges and agrees that, subject to receipt of Executive’s Severance Benefits, his employment and service ended effective as of the Date of Termination (as defined in the Severance Agreement), including with respect to all of the offices, directorships, appointments and other positions he holds with the Company and all of its parents, subsidiaries, and affiliates. Executive hereby acknowledges that he received adequate notice of termination and is not entitled to any “cure” period or pay in lieu of notice, beyond what he has already been provided pursuant to the Letter Agreement.
Amendments to Severance Agreement. In exchange for the Severance Benefits and other consideration provided herein, Executive acknowledges and reaffirms the modifications to the Severance Agreement made in Paragraph 2 of the Letter Agreement.
Miscellaneous.
Choice of Law. This Agreement (including any claim or controversy arising out of or relating to this Agreement) shall be governed by the Law of the State of Texas, without regard 

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to conflict of Law principles that would result in the application of any Law other than the Law of the State of Texas, it being stipulated by the Parties that Texas has a compelling state interest in the subject matter of this Agreement and that Executive has had or will continue to have regular contact with Texas in the performance of this Agreement. The Parties also agree that, except for an action for injunctive relief filed by the Company, the venue of any action to enforce the provisions of this Agreement, or any document executed in connection herewith, shall be in Dallas County, Texas.
Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction or a properly empaneled arbitrator to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitations, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, which is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
Amendment; Entire Agreement. This Agreement may be modified or amended only by a writing signed by Executive and the Company. This Agreement constitutes the entire understanding and agreement of the Parties, and supersedes prior understandings and agreements, if any, among or between the Parties, with respect to the subject matter of this Agreement. There are no representations, agreements, arrangements or understandings, oral or written, concerning the subject matter hereof between and among the Parties which are not fully expressed or incorporated by reference in this Agreement.
Disputes Relating to Agreement. If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the party prevailing in any such litigation may be awarded from the adverse party its actual damages and reasonable costs and expenses, including, without limitation, reasonable attorneys’ fees incurred in connection with such dispute and litigation. In the event of the violation or threatened violation of any of the covenants and/or promises in this Agreement, the Company shall be entitled to seek injunctive relief, both preliminary and final, enjoining and restraining such violation or threatened violation, without posting a bond and without the need to show irreparable harm, which injunctive relief shall be in addition to all other remedies available to the non-breaching party, at law or in equity.
Knowing and Voluntary Agreement. Executive and the Company hereby represent and warrant that, prior to signing below, each has had the opportunity to consult with legal counsel of his/its choice, has read this document in its entirety and fully or satisfactorily understands its content and effect, and that he/it has not been subject to any form of duress in connection with this settlement, is completely satisfied with the settlement reflected in this Agreement, and accordingly agrees to be bound as described in this Agreement.
ADEA Disclosure. Executive acknowledges that with his receipt of this Agreement he also received an “Age Discrimination in Employment Act Disclosure,” attached as Attachment 1, that contains information regarding (i) any class, unit, or group of individuals covered by a 

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group termination program (the “Program”), any eligibility factors for the Program, and any time limits applicable to the Program; and (ii) the job titles and ages of all individuals selected for the Program, and the ages of all individuals in the same job classification or organizational unit who are not selected for the Program.

THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

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IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective as of the Effective Date.  Executive may not execute this Agreement before his last day of employment.

EXECUTIVE: 

________________________ 
Name: [EXECUTIVE] 
Date:                 

FELCOR LODGING TRUST INCORPORATED, acting individually and as the sole general partner of FelCor Lodging Limited Partnership

 
By: _________________________     
Name:                      
Title:                      

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Attachment 1

Age Discrimination in Employment Act Disclosure

[To include]
    

 

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