Document:

Exhibit

Exhibit 10.20
	
		
	Callaway Golf Company
	Recipient:

	Employee/Consultant
	Effective Grant Date:

	Stock Unit Grant
	Number of Stock Units/Equivalent Shares:

	 
	Plan: Amended and Restated 2004 Incentive Plan

CALLAWAY GOLF COMPANY, a Delaware corporation (the “Company”), has elected to grant to you, Recipient named above, a Stock Unit award subject to the restrictions and on the terms and conditions set forth below, in consideration for your services to the Company.  Terms not otherwise defined in this Stock Unit Grant Agreement (“Agreement”) will have the meanings ascribed to them in the Plan identified above (the “Plan”). 
		
	1.
	Governing Plan.  Recipient hereby acknowledges receipt of a copy of the Plan and the prospectus for the Plan (the “Plan Prospectus”).  This Stock Unit award is subject in all respects to the applicable provisions of the Plan, which are incorporated herein by this reference.  In the case of any conflict between the provisions of the Plan and this Agreement, the provisions of the Plan will control.

		
	2.
	Grant of Stock Unit.  Effective as of the Effective Grant Date identified above, the Company has granted and issued to Recipient the Number of Stock Units with respect to the Company’s Common Stock identified above (the “SUs”), representing an unfunded, unsecured promise of the Company to deliver shares of Common Stock in the future, subject to the claims of the Company’s creditors and the terms, conditions and restrictions set forth in this Agreement.  Nothing contained in this Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between Recipient and the Company or any other person.

		
	3.
	Restrictions on the SU.  The SU is subject to the following restrictions:

		
	(a)
	No Transfer.  The SU and the shares of Common Stock it represents may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or encumbered until shares are actually issued, and any additional requirements or restrictions contained in this Agreement have been satisfied, terminated or waived by the Company in writing.

		
	(b)
	Cancellation of Unvested Shares.  In the event Recipient ceases to provide “Continuous Service” (as defined below) for any reason before the SU vests pursuant to paragraph 4 and the restrictions set forth in paragraph 3 expire, this award shall be cancelled with respect to any then unvested SUs (and any related unvested Dividend SUs (as defined below)) and no additional shares of Common Stock shall vest; provided, however, that the Committee may, in its discretion, determine not to cancel and void all or part of such unvested award, in which case the Committee may impose whatever conditions it considers appropriate with respect to such portion of the unvested award.

For purposes of this Agreement, “Continuous Service” means that Recipient’s service with the Company or its “parent” or “subsidiary” as such terms are defined in Rule 405 of the Securities Act (each an “Affiliate” and together “Affiliates”), whether as an employee, director or consultant, is not interrupted or terminated. The Committee shall have the authority to determine the time or times at which 

    

“parent” or “subsidiary” status is determined within the foregoing definition of Affiliate.  A change in the capacity in which Recipient renders service to the Company or an Affiliate as an employee, consultant or director or a change in the entity for which Recipient renders such service, provided that there is no interruption or termination of Recipient’s service with the Company or an Affiliate, shall not terminate a Recipient’s Continuous Service.  For example, a change in status from an employee of the Company to a consultant of a subsidiary or to a director shall not constitute an interruption of Continuous Service.  To the extent permitted by law, the Committee, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave.  Notwithstanding the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting in the SU only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to Recipient, or as otherwise required by law.
		
	4.
	Lapse of Restrictions.  The restrictions imposed under paragraph 3 will lapse and expire, and the SU will vest, in accordance with the following:

		
	(a)
	Vesting Schedule.  Subject to earlier cancellation, and subject to the accelerated vesting provisions, if any, set forth in any agreement between Recipient and the Company or its Affiliate, as the same may be amended, modified, extended or renewed from time to time, the restrictions imposed under paragraph 3 will lapse and be removed with respect to the number of SUs set forth below in accordance with the vesting schedule set forth below (the “Vesting Schedule”):

Number of Shares            Date Restrictions Lapse    
The Committee, however, may, in its discretion, accelerate the Vesting Schedule (in which case, the Committee may impose whatever conditions it considers appropriate on the accelerated portion).  
In addition, in the event of a Change in Control, the Committee shall provide that either:  (i) the SUs subject to this Agreement will continue, or be assumed or replaced with an equivalent award by the successor or acquiring corporation (if any), which continuation, assumption or replacement will be binding on Recipient; or (ii) if the SUs are not continued, assumed or replaced, then the restrictions imposed under paragraph 3 shall lapse and be removed and the SUs shall be deemed to have vested immediately prior to the Change in Control.  In the event that the SUs covered by this Agreement are continued, assumed or replaced pursuant to clause (i) of the preceding sentence in connection with a Change in Control, then (A) the SUs shall continue under the same terms and conditions or shall continue under the same terms and conditions with respect to shares of a successor company that may be issued in exchange or settlement of such SUs in connection with a Change in Control and (B) vesting of such continued, assumed or replacement award shall be immediately accelerated upon the termination of Recipient’s Continuous Service with the Company and/or the successor or acquiring corporation (if any) without Substantial Cause, or by Recipient’s resignation with Good Reason, in each case, 

2.

within the one-year period immediately following such Change in Control.  For purposes hereof, “Substantial Cause”, “Good Reason” and “Change in Control” shall each have the meanings set forth in Exhibit A attached hereto.
		
	(b)
	Effect of Vesting.  The Company will deliver to Recipient a number of shares of Common Stock equal to the number of vested shares of Common Stock subject to the SU within ten (10) days following the vesting date or dates provided herein. Notwithstanding the foregoing, in the event that the Company (i) does not withhold shares otherwise issuable to Recipient to satisfy the Company’s tax withholding obligation and (ii) determines that Recipient’s sale of shares of Common Stock on the date the shares subject to the award are scheduled to be delivered (the “Original Distribution Date”), would violate its policy regarding insider trading of the Common Stock, as determined by the Company in accordance with such policy, then such shares shall not be delivered on such Original Distribution Date and shall instead be delivered as soon as practicable following the next date that Recipient could sell such shares pursuant to such policy; provided, however, that (A) if the Original Distribution Date occurs before a Change in Control, then in no event shall the delivery of the shares be delayed pursuant to this provision beyond the later of: (1) December 31st of the same calendar year of the Original Distribution Date, or (2) the 15th day of the third calendar month following the Original Distribution Date, and (B) if the Original Distribution Date occurs on or after a Change in Control then in no event shall the delivery of the shares be delayed pursuant to this provision beyond the 15th day of the third calendar month following the Original Distribution Date.

		
	(c)
	Payment of Taxes.  If applicable, upon vesting and/or issuance of Common Stock in accordance with the foregoing, Recipient must pay in the form of a check or cash or other cash equivalents to the Company such amount as the Company determines it is required to withhold under applicable laws as a result of such vesting and/or issuance.  In this regard, the Company may withhold from the shares of Common Stock otherwise issuable to Recipient upon vesting of the SUs that number of shares having an aggregate Fair Market Value (as defined in the Plan), determined as of the date the withholding tax obligation arises, equal to the amount of the total withholding tax obligation; provided, however, that in no event shall the aggregate Fair Market Value of the shares of Common Stock so withheld exceed the maximum individual statutory tax rate in the applicable jurisdiction at the time of such withholding (or such other rate as may be required to avoid the liability classification of the applicable award under generally accepted accounting principles in the United States of America); provided, further, that the number of shares withheld by the Company to satisfy the tax withholding with respect to the SUs shall be rounded up to the nearest whole share to the extent rounding up to the nearest whole share does not result in the liability classification of the SUs under generally accepted accounting principles in the United States of America.  Alternatively, a Recipient who is subject to Section 16 of the Exchange Act at the time the tax withholding obligation arises may request to satisfy his or her tax withholding obligation directly through an immediate payment to the Company equal to the amount of the tax withholding obligation.  If such a Recipient does not satisfy the tax withholding obligation pursuant to the preceding sentence, Recipient authorizes and directs the Company to withhold from the shares of Common Stock otherwise issuable to Recipient upon vesting of the SUs that number of shares having an aggregate Fair Market Value (as defined in the Plan), determined as of the date the withholding tax obligation arises, equal to the amount of the total withholding tax obligation.  Recipient acknowledges that the ultimate liability for all tax-related items legally due by Recipient is and remains Recipient’s responsibility and that Company and/or its Affiliates (1) make no representations or undertakings regarding the 

3.

treatment of any tax-related items in connection with any aspect of the SU grant, including the grant or vesting of the SU, the subsequent sale of shares of Common Stock and the receipt of any dividends; and (2) do not commit to structure the terms of the grant or any aspect of the SU to reduce or eliminate Recipient’s liability for tax-related items.
		
	a.
	Voting and Other Rights.  Notwithstanding anything to the contrary in the foregoing, until the issuance of shares of Common Stock pursuant to paragraph 4(b), Recipient shall not have any right in, to or with respect to any of the shares of Common Stock (including any voting rights or rights with respect to Dividend SUs (as defined below (except as provided in paragraph 6 below) issuable under this Agreement until the shares are actually issued to Recipient.

		
	b.
	Dividend Equivalents.  If a cash dividend is paid with respect to shares of Common Stock, Recipient shall be credited with additional SUs as dividend equivalent payments (“Dividend SUs”) on unissued SUs which will be earned upon the vesting of the SUs on which the Dividend SUs were credited, and paid out upon issuance of the Common Stock represented by the SUs on which the Dividend SUs were credited.  Any credited Dividend SUs will be included in future calculations of unissued SUs that are eligible to receive additional SUs as dividend equivalent payments in connection with subsequent cash dividend payments.  Dividend SUs shall be paid in additional shares of Common Stock at the time of settlement of the related SUs pursuant to paragraph 4, except that any fractional Dividend SUs shall be paid in cash. 

		
	5.
	Nature of Grant.  In accepting the grant, Recipient acknowledges that:

		
	(a)
	the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Agreement;

		
	(b)
	the grant of the SU is voluntary and occasional and does not create any contractual or other right to receive future grants of SUs, or benefits in lieu of SUs, even if SUs have been granted repeatedly in the past, and all decisions with respect to future SU grants, if any, will be at the sole discretion of the Company; 

		
	(c)
	Recipient’s participation in the Plan shall not create a right to Continued Service with the Company or an Affiliate and shall not interfere with the ability the Company or an Affiliate to terminate Recipient’s service relationship at any time with or without cause; 

		
	(d)
	Recipient is voluntarily participating in the Plan; 

		
	(e)
	the SU is an extraordinary benefit and is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or an Affiliate; 

		
	(f)
	the future value of the underlying shares of Common Stock is unknown and cannot be predicted with certainty, and if Recipient vests in the SU and obtains shares of Common Stock, the value of those shares may increase or decrease in value; and

4.

		
	(g)
	in consideration of the grant of the SU, no claim or entitlement to compensation or damages shall arise from termination of the SU or diminution in value of the SU or shares of Common Stock acquired through vesting of the SU resulting from termination of Recipient’s Continuous Service by the Company or an Affiliate (for any reason whatsoever) and Recipient irrevocably releases the Company and its Affiliates from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Agreement, Recipient shall be deemed irrevocably to have waived his or her entitlement to pursue such claim.

		
	6.
	Electronic Delivery.  The Company may, in its sole discretion, decide to deliver any documents related to the SU and participation in the Plan or future SUs that may be granted under the Plan by electronic means or to request Recipient consent to participate in the Plan by electronic means.  Recipient hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

		
	7.
	Taxable Event.  Recipient acknowledges that the issuance/vesting/settlement of the SUs will have significant tax consequences to Recipient and Recipient is hereby advised to consult with Recipient’s own tax advisors concerning such tax consequences.  A general description of the U.S. federal income tax consequences related to SUs is set forth in the Plan prospectus. 

		
	8.
	Amendment.   Except as otherwise provided in the Plan, this Agreement may be amended only by a writing executed by the Company and Recipient which specifically states that it is amending this Agreement. Notwithstanding the foregoing, and except as otherwise provided in the Plan, this Agreement may be amended solely by the Committee by a writing which specifically states that it is amending this Agreement, so long as a copy of such amendment is delivered to Recipient, and provided that no such amendment adversely affecting Recipient’s rights hereunder may be made without Recipient’s written consent. Without limiting the foregoing, the Committee reserves the right to change, by written notice to Recipient, the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change will be applicable only to rights relating to that portion of the award which is then subject to restrictions as provided herein.

		
	9.
	Miscellaneous.   

		
	(a)
	The rights and obligations of the Company under this Agreement will be transferable by the Company to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by the Company’s successors and assigns.

		
	(b)
	Recipient agrees upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of this Agreement.

5.

		
	(c)
	Recipient acknowledges that the SU award granted to Recipient under the Plan, and its underlying shares of Common Stock, are subject to all general Company policies as amended from time to time, including the Company’s insider trading policies. 

		
	(d)
	To the extent applicable, this Agreement and the SUs shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder.  The SUs are not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder.  For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), each payment that Recipient may be eligible to receive under this Agreement shall be treated as a separate and distinct payment.  Notwithstanding anything to the contrary in the Plan, if the SUs constitute “deferred compensation” under Section 409A of the Code and Recipient is a “specified employee” for purposes of Section 409A of the Code, no distribution or payment of any amount that is due because of Recipient’s “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) will be issued or paid (a) unless Recipient’s termination of Continuous Service is a “separation from service” and (b) before the date this six (6) months following the date of Recipient’s “separation from service” or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six (6) month period elapses.

		
	10.
	Severability.  The provisions of this Agreement shall be deemed to be severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.  If any provision of this Agreement, or the application thereof to any person or any circumstance, is held to be invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severed, and in lieu thereof there shall automatically be added as part of this Agreement a suitable and equitable provision in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision.

		
	11.
	Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the State of Delaware and applicable federal law.

		
	12.
	Irrevocable Arbitration of Disputes.

		
	(a)
	You and the Company agree that any dispute, controversy or claim arising hereunder or in any way related to this Agreement, its interpretation, enforceability, or applicability, that cannot be resolved by mutual agreement of the parties shall be submitted to binding arbitration.  The parties agree that arbitration is the parties’ only recourse for such claims and hereby waive the right to pursue such claims in any other forum, unless otherwise provided by law.  Any court action involving a dispute which is not subject to arbitration shall be stayed pending arbitration of arbitrable disputes.

		
	(b)
	You and the Company agree that the arbitrator shall have the authority to issue provisional relief.  You and the Company further agree that each has the right, pursuant to California Code of Civil Procedure Section 1281.8, to apply to a court for a provisional 

6.

remedy in connection with an arbitrable dispute so as to prevent the arbitration from being rendered ineffective.  
		
	(c)
	Any demand for arbitration shall be in writing and must be communicated to the other party prior to the expiration of the applicable statute of limitations. 

		
	(d)
	The arbitration shall be administered by JAMS pursuant to its Employment Arbitration Rules and Procedures.  The rules may be found online at www.jamsadr.org.  The arbitration shall be conducted in San Diego by a former or retired judge or attorney with at least ten (10) years’ experience in employment-related disputes, or a non-attorney with like experience in the area of dispute, who shall have the power to hear motions, control discovery, conduct hearings and otherwise do all that is necessary to resolve the matter.  The parties must mutually agree on the arbitrator.  If the parties cannot agree on the arbitrator after their best efforts, an arbitrator will be selected from JAMS pursuant to its Employment Arbitration Rules and Procedures.  The Company shall pay the costs of the arbitrator’s fees and all administrative costs of the arbitration in excess of any court filing fee Recipient would have incurred to initiate suit in court.  

		
	(e)
	The arbitration will be decided upon a written decision of the arbitrator stating the essential findings and conclusions upon which the award is based.  The arbitrator shall have the authority to award damages, if any, and attorneys’ fees and costs to the extent that they are available under applicable law(s).  The arbitration award shall be final and binding, and may be entered as a judgment in any court having competent jurisdiction.  Either party may seek review pursuant to California Code of Civil Procedure Section 1286, et seq.

		
	(f)
	It is expressly understood that the parties irrevocably agree to arbitrate any dispute identified above and have chosen arbitration to avoid the burdens, costs and publicity of a court proceeding, and the arbitrator is expected to handle all aspects of the matter, including discovery and any hearings, in such a way as to minimize the expense, time, burden and publicity of the process, while assuring a fair and just result.  In particular, the parties expect that the arbitrator will limit discovery by controlling the amount of discovery that may be taken (e.g., the number of depositions or interrogatories) and by restricting the scope of discovery only to those matters clearly relevant to the dispute.  However, at a minimum, each party will be entitled to at least one (1) deposition and shall have access to essential documents and witnesses as determined by the arbitrator. 

		
	(g)
	The provisions of this paragraph shall survive the expiration or termination of the Agreement, and shall be binding upon the parties.

		
	13.
	Data Privacy.  Recipient hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of his or her personal data as described in this document by and among, as applicable, the Company and its Affiliates for the exclusive purpose of implementing, administering and managing Recipient’s participation in the Plan.

7.

Recipient understands that the Company and its Affiliates may hold certain personal information about Recipient, including, but not limited to, Recipient’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all SUs or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Recipient’s favor, for the purpose of implementing, administering and managing the Plan (“Data”).  Recipient understands that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these Data recipients may be located in Recipient’s country or elsewhere, and that the Data recipients’ country may have different data privacy laws and protections than Recipient’s country.  Recipient understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting the local human resources representative.  Recipient authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing Recipient’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom Recipient may elect to deposit any SUs or shares of Common Stock.  Recipient understands that Data will be held only as long as is necessary to implement, administer and manage Recipient’s participation in the Plan.  Recipient understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, without cost, by contacting in writing the local human resources representative.  Recipient understands, however, that refusing or withdrawing consent may affect Recipient’s ability to participate in the Plan.  For more information on the consequences of refusal to consent or withdrawal of consent, Recipient understands that he or she may contact the local human resources representative.
		
	14.
	Language.  If you have received this Agreement or any other document related to the Plan translated into a language other than English and if the translated version is different than the English version, the English version will control.

IN WITNESS WHEREOF, the Company and Recipient have executed this Agreement effective as of the Effective Grant Date.
CALLAWAY GOLF COMPANY                RECIPIENT
By:                                                     
 

8.

EXHIBIT A
A “Change in Control” means the following and shall be deemed to occur if any of the following events occurs:
(a)    Any person, entity or group, within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) but excluding the Company and its subsidiaries and any employee benefit or stock ownership plan of the Company or its subsidiaries and also excluding an underwriter or underwriting syndicate that has acquired the Company’s securities solely in connection with a public offering thereof (such person, entity or group being referred to herein as a “Person”) becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either the then outstanding shares of Common Stock or the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors; or
(b)    Individuals who, as of the effective date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any individual who becomes a director after the effective date hereof whose election, or nomination for election by the Company’s shareholders, is approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered to be a member of the Incumbent Board unless that individual was nominated or elected by any Person having the power to exercise, through beneficial ownership, voting agreement and/or proxy, 20% or more of either the outstanding shares of Common Stock or the combined voting power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors, in which case that individual shall not be considered to be a member of the Incumbent Board unless such individual’s election or nomination for election by the Company’s shareholders is approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board; or
(c)    Consummation by the Company of the sale, lease, exchange or other disposition (in one transaction or a series of related transactions) by the Company of all or substantially all of the Company’s assets or a reorganization or merger or consolidation of the Company with any other person, entity or corporation, other than
		
	(i)
	a reorganization or merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto (or, in the case of a reorganization or merger or consolidation that is preceded or accomplished by an acquisition or series of related acquisitions by any Person, by tender or exchange offer or otherwise, of voting securities representing 5% or more of the combined voting power of all securities of the Company, immediately prior to such acquisition or the first acquisition in such series of acquisitions) continuing to represent, either by remaining outstanding or by being converted into voting securities of another entity, more than 50% of the combined voting power of the voting securities of the Company or such other entity outstanding immediately after such reorganization or merger or consolidation (or series of related transactions involving such a reorganization or merger or consolidation), or

9.

		
	(ii)
	a reorganization or merger or consolidation effected to implement a recapitalization or reincorporation of the Company (or similar transaction) that does not result in a material change in beneficial ownership of the voting securities of the Company or its successor; or

(d)    The liquidation or dissolution of the Company.
If required for purposes of compliance with Section 409A of the Code, in no event will a Change in Control be deemed to have occurred if such transaction is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).  The Board may, in its sole discretion and without a Participant’s consent, amend the definition of “Change in Control” to conform to the definition of “Change in Control” under Section 409A and the regulations thereunder.
The term “Substantial Cause” shall have the meaning ascribed such term in Recipient’s employment agreement with the Company and, if Recipient does not have an employment agreement with the Company defining such term, then “Cause” shall mean Recipient’s (1) failure to substantially perform his or her duties; (2) misconduct, including but not limited to, use or possession of illegal drugs during work and/or any other action that is damaging or detrimental in a significant manner to the Company; (3) conviction of, or plea of guilty or nolo contendere to, a felony; or (4) failure to cooperate with, or any attempt to obstruct or improperly influence, any investigation authorized by the Board or any governmental or regulatory agency.
The term “Good Reason” shall have the meaning ascribed such term in Recipient’s employment agreement with the Company and, if Recipient does not have an employment agreement with the Company defining such term, then “Good Reason” shall mean (1) the Company’s material breach of any employment agreement between the Company and Recipient; (2) any material diminishment in the title, position, duties, responsibilities or status that Recipient had with the Company, as a publicly traded entity, immediately prior to the Change in Control; (3) any material reduction of Recipient’s base salary provided to Recipient immediately prior to the Change in Control; or (4) any requirement that Recipient relocate or any assignment to Recipient of duties that would make it unreasonably difficult for Recipient to maintain the principal residence Recipient had immediately prior to the Change in Control.  Within ninety (90) days of the date Recipient knows, or should have known, that Recipient has Good Reason to resign his or her employment, Recipient shall notify the Company in writing of the Good Reason and Recipient’s intent to terminate his or her employment for Good Reason no earlier than thirty (30) days later.  The Company shall then have thirty (30) days to cure the condition underlying Recipient’s notice or inform Recipient, in writing, of its intent not to do so.  If the Company fails to cure the condition, or states that it does not intend to attempt to cure the condition underlying Recipient’s notice, then Recipient shall have the right to terminate for Good Reason no later than ninety (90) days following the expiration of the cure period or the written statement of intent not to cure. 

10.Exhibit

Exhibit 10.24
Execution Version

FIRST AMENDMENT TO CONTRIBUTION AGREEMENT

THIS FIRST AMENDMENT TO CONTRIBUTION AGREEMENT (this “Amendment”) is made and entered into this 31st day of August, 2017, by and among Linn Energy Holdings, LLC, a Delaware limited liability company (“LEH”), Linn Operating, LLC, a Delaware limited liability company (“LOI” and together with LEH, “Linn”), Citizen Energy II, LLC, an Oklahoma limited liability company (“Citizen”), and Roan Resources, LLC, a Delaware limited liability Company (“Company”).  Linn, Citizen and Company are sometimes referred to collectively as the “Parties” and individually as a “Party.”  Capitalized terms used but not defined in this Amendment will have the meanings given to such terms in the Contribution Agreement (defined below).

RECITALS

WHEREAS, the Parties entered into that certain Contribution Agreement, dated as of June 27, 2017 (the “Contribution Agreement”).

WHEREAS, the Parties desire to amend and modify certain terms and conditions of the Contribution Agreement.

NOW, THEREFORE, for and in consideration of the mutual agreements herein contained, the benefits to be derived by each Party, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

		
	1.
	Linn Additional Leases.

		
	a.
	Subpart (ii) of the definition of “Linn Additional Leases” is hereby deleted in its entirety and replaced and substituted with the following for all purposes: “..., (ii) after April 1, 2017 and prior 5:00 pm (Central Time) on October 27, 2017, as long as Linn has entered into a definitive agreement to acquire such interest prior to the Closing (for which both written notice of, and a copy of, such definitive agreement (including all exhibits) has been provided to Citizen prior to Closing); or, alternatively, other oil and gas leases identified to Citizen by Linn prior to Closing as Linn Additional Leases for which there is a commitment to acquire but the acquisition has not closed, such as with regard to leases that have been executed but have not been released to Linn pending payment of the bonus, or leases to be acquired in connection with a pending OCC pooling order, or leases acquired by a broker (insofar as the acquisition by the broker was prior to Closing) for which the broker owes Linn an assignment thereof (insofar as the documentation and instruments evidencing such commitments relative to these other leases have been provided to Citizen in writing on or before 5:00 pm Central Time on the date that is seven (7) Business Days after Closing),...”  (any such Linn Additional Lease acquired under subpart (ii) of the definition for such term is referred to herein as a “Deferred Linn Additional Lease”).

		
	b.
	Notwithstanding anything to the contrary in Section 4.2(e)(i) of the Contribution Agreement, with respect to each Linn Additional Lease that was not listed on Exhibit A-5-1 as of the date the Contribution Agreement was executed (individually, a “Subsequent Linn Additional Lease”, and collectively, the “Subsequent Linn Additional Leases”), Linn shall be deemed to be in compliance with its disclosure obligations in Section 4.2(e)(i) of the Contribution Agreement with respect to such Subsequent Linn Additional Lease to the extent it provides the information required in Section 4.2(e)(i) of the Contribution Agreement with respect to such Linn Additional Lease on or before the day that is 15 Business Days after the Closing, provided that in the case of any Deferred Linn Additional Lease, Linn shall be deemed to be in compliance with its disclosure obligations in Section 4.2(e)(i) of the Contribution Agreement with respect to such Deferred Linn Additional Lease to the extent it provides the information required by Section 4.2(e)(i) of the Contribution Agreement with respect to such Deferred Linn Additional Lease on or before the day that is the earlier of five (5) Business Days after such Party’s acquisition of such Deferred Linn Additional Lease and October 27, 2017. 

		
	c.
	Notwithstanding anything to the contrary in the Contribution Agreement, (i) the Review Period for any Linn Additional Lease other than an Initial Linn Additional Lease shall expire on November 30, 2017, and the Title Cure Period for any such Linn Additional Lease shall expire on December 7, 2017; and (ii) the Review Period for any Initial Linn Additional Lease expired on August 28, 2017.

		
	d.
	Notwithstanding anything to the contrary in the Contribution Agreement, “Linn Cost Credited Asset Acquisition Costs” shall exclude all actual attorneys’ fees, broker fees, abstract costs, title opinion costs, title curative costs and other associated Third Party costs of due diligence incurred by the applicable Party in connection with the acquisition of any Linn Cost Credited Lease and associated Linn Additional Asset, and shall instead be deemed to include $100 of such Third Party due diligence costs per Net Acre of each relevant Linn Cost Credited Lease.

		
	e.
	The term “Initial Linn Additional Lease” shall mean any Linn Additional Lease that was listed on Exhibit A-5-1 as of the date the Contribution Agreement was executed.

		
	2.
	Citizen Additional Leases.

		
	a.
	Subpart (ii) of the definition of “Citizen Additional Leases” is hereby deleted in its entirety and replaced and substituted with the following for all purposes: “..., (ii) after April 1, 2017 and prior 5:00 pm (Central Time) on October 27, 2017, as long as Citizen has entered into a definitive agreement to acquire such interest prior to the Closing (for which both written notice of, and a copy of, such definitive agreement (including all exhibits) has been provided to 

2

Linn prior to Closing); or, alternatively, other oil and gas leases identified to Linn by Citizen prior to Closing as Citizen Additional Leases for which there is a commitment to acquire but the acquisition has not closed, such as with regard to leases that have been executed but have not been released to Citizen pending payment of the bonus, or leases to be acquired in connection with a pending OCC pooling order, or leases acquired by a broker (insofar as the acquisition by the broker was prior to Closing) for which the broker owes Citizen an assignment thereof (insofar as the documentation and instruments evidencing such commitments relative to these other leases have been provided to Linn in writing on or before 5:00 pm Central Time on the date that is seven (7) Business Days after Closing),...”  (any such Citizen Additional Lease acquired under subpart (ii) of the definition for such term is referred to herein as a “Deferred Citizen Additional Lease”).
		
	b.
	Notwithstanding anything to the contrary in Section 4.3(e)(i) of the Contribution Agreement, with respect to each Citizen Additional Lease that was not listed on Exhibit A-5-2 as of the date the Contribution Agreement was executed (individually, a “Subsequent Citizen Additional Lease”, and collectively, the “Subsequent Citizen Additional Leases”), Citizen shall be deemed to be in compliance with its disclosure obligations in Section 4.3(e)(i) of the Contribution Agreement with respect to such Subsequent Citizen Additional Lease to the extent it provides the information required in Section 4.3(e)(i) of the Contribution Agreement with respect to such Citizen Additional Lease on or before the day that is 15 Business Days after the Closing, provided that in the case of any Deferred Citizen Additional Lease, Citizen shall be deemed to be in compliance with its disclosure obligations in Section 4.3(e)(i) of the Contribution Agreement with respect to such Deferred Citizen Additional Lease to the extent it provides the information required by Section 4.3(e)(i) of the Contribution Agreement with respect to such Deferred Citizen Additional Lease on or before the day that is the earlier of five (5) Business Days after such Party’s acquisition of such Deferred Citizen Additional Lease and October 27, 2017. 

		
	c.
	Notwithstanding anything to the contrary in the Contribution Agreement, (i) the Review Period for any Citizen Additional Lease other than an Initial Citizen Additional Lease shall expire on November 30, 2017, and the Title Cure Period for any such Citizen Additional Lease shall expire on December 7, 2017; and (ii) the Review Period for any Initial Citizen Additional Lease expired on August 28, 2017.

		
	d.
	Notwithstanding anything to the contrary in the Contribution Agreement, “Citizen Cost Credited Asset Acquisition Costs” shall exclude all actual attorneys’ fees, broker fees, abstract costs, title opinion costs, title curative costs and other associated Third Party costs of due diligence incurred by the applicable Party in connection with the acquisition of any Citizen Cost Credited Lease and associated Citizen Additional Asset, and shall instead be 

3

deemed to include $100 of such Third Party due diligence costs per Net Acre of each relevant Citizen Cost Credited Lease.
		
	e.
	The term “Initial Citizen Additional Lease” shall mean any Citizen Additional Lease that was listed on Exhibit A-5-2 as of the date the Contribution Agreement was executed.

		
	3.
	Subsequent Closing.  Notwithstanding anything to the contrary in the Contribution Agreement, (i) the Parties shall not contribute and convey the Citizen Additional Assets (other than the Initial Citizen Additional Leases and related Citizen Additional Assets) or Linn Additional Assets (other than the Initial Linn Additional Leases and related Linn Additional Assets) at the initial Closing to be held on the Scheduled Closing Date, and (ii) the Parties shall have a subsequent Closing with regard to all Deferred Linn Additional Leases and Deferred Citizen Additional Leases on December 8, 2017. 

		
	4.
	Initial Value Closing Adjustments.  Notwithstanding anything to the contrary in the Contribution Agreement, (i) the Parties desire that all adjustments to the Linn Consideration Units and the Citizen Consideration Units be applied in connection with the Post-Closing Linn Statement (and the calculation of the Final Linn Adjustment Amount) and Post-Closing Citizen Statement (and the calculation of the Final Citizen Adjustment Amount), and (ii) the Linn Closing Settlement Statement and Citizen Closing Settlement Statement shall be provided for information purposes only in connection with the initial Closing to be held on the Scheduled Closing Date, but the Preliminary Linn Adjustment Amount and Preliminary Citizen Adjustment Amount shall each be deemed to be zero solely for purposes of initial Closing to be held on the Scheduled Closing Date.

		
	5.
	Curative Process.

		
	a.
	Linn hereby designates Justin Vick to be Linn’s representative (as such Person may be replaced by Linn by written notice to Citizen from time to time, the “Linn Curative Representative”) with respect to all matters relating to curative work for any Linn Title Defect or any Citizen Title Defect.  Citizen hereby designates Brian Wade to be Citizen’s representative (as such Person may be replaced by Citizen by written notice to Linn from time to time, the “Citizen Curative Representative”) with respect to all matters relating to curative work for any Linn Title Defect or any Citizen Title Defect.  The Linn Curative Representative and Citizen Curative Representative shall each use commercially reasonable efforts to discuss, cooperate and mutually agree curative actions (or partially curative actions) proposed by the Linn Curative Representative with respect to Linn Title Defects and by the Citizen Curative Representative with respect to Citizen Title Defects.  Each of Linn and Citizen agrees to cause the Company to issue limited powers of attorney to the Linn Curative Representative and the Citizen Curative Representative to implement any curative actions agreed by such Persons.  Notwithstanding anything stated 

4

herein to the contrary, (i) nothing herein shall be deemed to limit Linn’s or Citizen’s rights in Section 4.4 of the Contribution Agreement with respect to Title Disputes, (ii) to the extent the Linn Curative Representative and the Citizen Curative Representative do not mutually agree on the effectiveness of any proposed curative actions (or partially curative actions) to cure the applicable Linn Title Defect or Citizen Title Defect, and a Party provides written notice to the other Party prior to December 7, 2017 that it desires to resolve such dispute as a Title Dispute under Section 4.4 of the Contribution Agreement, then if (A) the Title Arbitrator finds in favor of Linn with regard to the curative action proposed by the Linn Curative Representative being effective to cure (or, as applicable, partially cure) the Linn Title Defect in question, then the Title Cure Period for such Linn Title Defect shall be extended for a reasonable period of time (not to exceed seven (7) days after receiving the ruling of the Title Arbitrator) after the ruling of such Title Arbitrator as to the same to allow such Linn Curative Representative to pursue and complete such curative action proposed, and (B) the Title Arbitrator finds in favor of Citizen with regard to the curative action proposed by the Citizen Curative Representative being effective to cure (or, as applicable, partially cure) the Citizen Title Defect in question, then the Title Cure Period for such Citizen Title Defect shall be extended for a reasonable period of time (not to exceed seven (7) days after receiving the ruling of the Title Arbitrator ) after the ruling of such Title Arbitrator as to the same to allow such Citizen Curative Representative to pursue and complete such curative action proposed.
		
	6.
	Certain Provisions.  The Parties acknowledge and agree that following Sections of the Contribution Agreement are incorporated herein by reference mutatis mutandis: Sections 1.2 (References and Rules of Construction), 17.1 (Governing Law), 17.2 (Conspicuous Language), 17.3 (Dispute Resolution), 17.4 (Counterparts), 17.5 (Notices), 17.6 (Expenses), 17.7 (Waiver; Rights Cumulative), 17.10 (Parties in Interest), 17.11 (Binding Effect), 17.12 (Preparation of Agreement), 17.13 (Severability), 17.14 (Limitation on Damages), 17.15 (Assignment), and 17.9 (Amendment).

		
	7.
	Ratification.  Except as modified by this Amendment, the Contribution Agreement remains in full force and effect in accordance with its terms.

[Signature page follows]

5

IN WITNESS WHEREOF, the Parties have executed and delivered this Amendment as of the date first set forth above.

	
			
	 
	PARTIES:

	 
	 

	 
	LINN ENERGY HOLDINGS, LLC

	 
	 

	 
	 

	 
	By:
	/s/ Candice Wells

	 
	Name:
	Candice Wells

	 
	Title:
	Senior Vice President, General Counsel and Corporate Secretary

	 
	 

	 
	 

	 
	LINN OPERATING, LLC

	 
	 

	 
	 

	 
	By:
	/s/ Candice Wells

	 
	Name:
	Candice Wells

	 
	Title:
	Senior Vice President, General Counsel and Corporate Secretary

Signature Page to First Amendment to Contribution Agreement

	
			
	 
	CITIZEN ENERGY II, LLC

	 
	 

	 
	 

	 
	By:
	/s/ James R. Woods

	 
	Name:
	James R. Woods

	 
	Title:
	Manager

	
			
	 
	ROAN RESOURCES LLC

	 
	 

	 
	By: Citizen Energy II, LLC, its sole member

	 
	 

	 
	 

	 
	By:
	/s/ James Woods

	 
	Name:
	James Woods

	 
	Title:
	Manager

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