Exhibit 10.1

RETIREMENT AGREEMENT

This RETIREMENT AGREEMENT (this “Agreement”), dated as of June 23, 2022, is entered into by and among Epsilon Energy USA, Inc. (the “Company”), Epsilon Energy Ltd. (“Parent”) and Michael Raleigh (“Executive”).

WHEREAS, Executive currently serves as Chief Executive Officer (“CEO”) of the Company and Parent and as a member of the Board of Directors of Parent (the “Board”);

WHEREAS, Executive has indicated that he intends to retire from the Company;

WHEREAS, the Board has determined that it is in the Company’s best interests to enter into this Agreement to ensure a smooth leadership transition in connection with Executive’s retirement;

WHEREAS, Executive and the Company entered into that certain Executive Employment Agreement dated effective as of January 1, 2021 (the “Employment Agreement”) pursuant to which Executive may be entitled to certain payments and benefits following a termination of employment; and

WHEREAS, the Company and Executive desire to enter into this Agreement to provide for the payments and benefits that Executive will be entitled to receive in connection with his retirement notwithstanding, and in lieu of, any payments and benefits he may have otherwise been entitled to under the Employment Agreement, and to provide for an orderly succession and transition to the CEO.

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

1.            SCHEDULED RETIREMENT DATE. Executive’s Retirement Date shall be June 30, 2022 (the “Retirement Date”). Executive shall continue to serve as CEO until the Retirement Date and shall perform such duties as are customarily associated with the position of CEO, consistent with the bylaws of the Company and as required by the Board. Executive shall resign as an officer of the Company and of the Parent, and resign as a member of the Board of the Parent and the board of directors and all other positions of the Company, the Parent, and any of their subsidiaries or affiliates, effective upon the Retirement Date. Following the Retirement Date, the Company will owe no further payments, duties or obligations to Executive other than as provided for in this Agreement.

2.            TRANSITION. Executive shall cooperate in the effort to affect an orderly, smooth, and efficient transition of Executive’s duties and responsibilities to a successor as CEO (a “Successor”), as the Board or a Successor may reasonably request for up to three months after the Retirement Date, including consulting with a Successor on matters that arose while Executive served as CEO and providing information regarding the Company’s operations, practices and policies. Executive shall provide customary and reasonable certifications and representations in connection with the filing of the Company’s annual and periodic reports with the Securities and Exchange Commission, as well as the completion of the external audit reviews of the Company’s financial statements and internal controls, regarding any period in which Executive was employed by the Company consistent with applicable law and as reasonably requested by the Successor, including but not limited to Executive’s knowledge of any material misstatements or omissions of material fact, ineffective disclosure controls or procedures, internal control weaknesses, practices or policies inconsistent with Generally Accepted Accounting Principles, or material violations of law that have not been previously disclosed to the Company’s Audit Committee. The obligations under this Section 2 extend from the date of signing this agreement until six months after the Retirement Date.

3.            CONSIDERATION. Subject to the terms and conditions of this Agreement, including the requirements described in or defined under Section 4 below, the Company will provide Executive with the following consideration:

(a)            Salary Payments. The Company shall pay Executive a total amount of $150,000 (i.e., base salary payments for a period of 12 months at Executive’s current base salary rate), payable in 12 equal monthly installments over the 12 months immediately following the Release Effective Date (as defined in Section 4 below).

(b)            Healthcare Subsidy. The Company shall continue to pay Executive a monthly payment equal to the monthly employer contribution that the Company would have made to Executive to cover Executive’s healthcare expenses if Executive had remained employed by the Company until the first anniversary of the Retirement Date.

(c)            Equity Award Treatment.

(i)            In lieu of receiving an equity award for calendar year 2021, the Company will pay Executive an amount equal to $330,000 in a lump sum payment within ten business days after the Release Effective Date.

(ii)           In lieu of receiving an equity award for calendar year 2022, the Company will pay Executive an amount equal to $150,000 (i.e., two-times Executive’s current annual base salary rate pro-rated for the months worked during calendar year 2022) in a lump sum payment within ten business days after the Release Effective Date.

(iii)          All unvested equity awards previously granted to Executive by the Company under the Epsilon Energy LTD Share Compensation Plan (the “Equity Plan”) that are outstanding as of the Retirement Date, including both performance-based restricted stock awards and restricted stock award (“Outstanding Equity Awards”), shall immediately accelerate and vest as of the Release Effective Date, with any performance vesting conditions or criteria being deemed met at target levels. All Outstanding Equity Awards are forth on Exhibit A to this Agreement. All Outstanding Equity Awards will otherwise remain subject to the terms and conditions of the Equity Plan and the applicable award agreements.

In addition, and notwithstanding whether Executive signs or revokes his acceptance of this Agreement, Executive shall continue to be entitled to (i) the portion of any unpaid base salary accrued and earned by Executive up to and including the date of employment termination, (ii) benefits under the Company’s employee benefit plans vested as of the date of employment termination as required under applicable law, payable or deliverable as provided under applicable plan terms, (iii) any unreimbursed expenses properly incurred by Executive under the applicable Company policy, as may be in effect from time to time, prior to the date of employment termination; and (iv) the rights and benefits to continued coverage under the directors’ and officers’ liability insurance policy coverage referenced in Section 3(d) of the Executive Employment Agreement as well as to indemnification under the indemnification agreement referenced in Section 3(d) of the Executive Employment as well as under state or other law or the governing documents of the Company and Parent, in each case relating to the period when he was a director, officer, or employee of the Company or Parent. The payments and benefits just referenced in (i)-(iv) shall constitute the “Accrued Benefits” and shall be paid when due under this Agreement, the plans and policies of the Company and Parent, and applicable law.

4.            RESTRICTIVE COVENANTS AND GENERAL RELEASE. The obligation of the Company to pay any and all amounts under this Agreement (other than the Accrued Benefits) after Executive’s termination of employment, whether such termination occurs on the Retirement Date or a different date, shall be contingent upon Executive (a) entering into a written agreement with the Company (in the form attached hereto as Exhibit B) in which Executive agrees to a general release of any claims against the Company and its affiliates (the “Release Agreement”) on or within twenty-one days after employment termination (or such longer period of time as required under applicable law to have a binding release of one or more claims) that has become irrevocable (such date on which such release agreement becomes irrevocable, the “Release Effective Date”) and (b) complying with the confidentiality and non-disparagement provisions in Section 5 and Section 6 below. For avoidance of doubt, all rights to receive or continue to receive the payments and benefits referred to in Section 3 (other than the Accrued Benefits) shall cease if Executive does not enter into the Release Agreement, revokes the Release Agreement or materially breaches any of the covenants referred to in this Section 4. The form of general release to be signed by Executive pursuant to this Section 4 shall in no way prohibit Executive from reporting possible violations of law to any governmental agency or entity in accordance with applicable whistleblower protection provisions including, without limitation, the rules promulgated under Section 21F of the Exchange Act or Section 806 of the Sarbanes-Oxley Act of 2002, or require Executive to notify the Company (or obtain its prior approval) of any such reporting. The Company acknowledges that the Board does not have knowledge of any facts or circumstances that would form the basis of a claim or action by the Company against the Executive under federal or state law for damages, injuries, losses, contributions, indemnities or otherwise.

5.            NON-DISPARAGEMENT. Executive agrees that prior to and at any time after the Retirement Date he will not make statements to clients, customers and suppliers of the Company (or any of its affiliates) or to other members of the public, the media or the investment community that are in any way disparaging or negative towards the Company, any of its affiliates, or the products, services, representatives or employees of any of the foregoing. Company agrees to instruct its directors and executive officers to not make statements to clients, customers and suppliers of the Company (or any of its affiliates) or to other members of the public, the media or the investment community that are in any way disparaging or negative towards Executive. This Section 5 does not, in any way, restrict or impede either party from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order. Executive shall promptly provide written notice of any such order to the Board.

6.             CONFIDENTIAL INFORMATION.

(a)            Confidential Information. As used in this Agreement, the term “Confidential Information” means information of any kind, nature, or description, that (i) relates to the Company’s business (for purposes of this Section 6, references to the Company shall include the Company’s parents, subsidiaries, predecessors, successors, members, the Board, and affiliates), including, information that relates to the Company’s business that is or was learned or developed by Executive as a direct or indirect result, or during the course, of Executive’s employment with the Company (ii) provides the Company economic value or any business advantage and (iii) is not generally known to the public. Additionally, Confidential Information includes: (x) the Company’s trade secrets and inventions; (y) all information concerning operational matters involving the business of the Company; and (z) all notes, analyses, compilations, studies, summaries, and other material prepared by the Company or its representatives to the extent that it contains or is based, in whole or in part, upon any information noted above. Confidential Information shall not include any information in the public domain, through no disclosure or wrongful act of Executive, to such an extent as to be readily available to competitors.

(b)            Non-Disclosure of Confidential Information. Executive agrees not to, directly or indirectly, participate in the unauthorized use, disclosure, or conversion of any Confidential Information. Specifically, but without limitation, Executive agrees not to use Confidential Information for his sole benefit, or for the benefit of any person or entity in any way that harms the Company or diminishes the value of the Confidential Information to the Company. However, nothing in this Agreement prohibits Executive from reporting or otherwise disclosing possible violations of federal law or regulation to any government agency or entity, or from receiving an award or monetary recovery in connection therewith. Executive does not need prior authorization to make reports or disclosures to any government agency or entity and is not required to notify the Company if Executive has made or will make any such report or disclosure.

(c)            The Company’s Property. All documents and things, including Confidential Information, provided to Executive by the Company for use in connection with Executive’s employment, or created by Executive in the course and scope of Executive’s employment with the Company, are the sole property of the Company and shall be held by Executive as a fiduciary on behalf of the Company. Immediately upon termination of Executive’s employment—without the requirement of a prior demand by the Company—Executive shall surrender to the Company all such documents and things, including all Confidential Information or other Company property, together with all copies, recordings, abstracts, notes, reproductions, or electronic versions of any kind made from or about the documents and things and the information they contain.

(d)            Notice of Immunity Under the Economic Espionage Act of 1996, as amended by the Defend Trade Secrets Act of 2016 (“DTSA”). Executive will not be held criminally or civilly liable under any federal or state law for any disclosure of a trade secret that: (i) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the Company’s trade secrets to his attorney and use the trade secret information in the court proceeding if Executive files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.

7.            cooperation. During and after Executive’s employment, and at reasonable times, Executive shall cooperate fully with the Company in (i) the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while Executive was employed by the Company, and (ii) the investigation, whether internal or external, of any matters about which the Company believes Executive may have knowledge or information. Executive’s full cooperation in connection with such claims, actions or investigations shall include, but not be limited to, being available to meet with counsel to answer questions or to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient and reasonable times. During and after Executive’s employment, the Executive also shall at reasonable times cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while Executive was employed by the Company. The Company shall reimburse Executive for any reasonable out-of-pocket expenses incurred in connection with the Executive’s performance of obligations pursuant to this Section 7.

8.            NOTICE. Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and either delivered in person or sent by first class, certified or registered mail, postage prepaid, if to the Company at the Company’s principal place of business addressed to the General Counsel, and if to Executive, at his home address most recently filed with the Company, or to such other address as either party shall have designated in writing to the other party.

9.            GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas without giving effect to principles of conflicts of laws that would apply the laws of another jurisdiction. All claims arising out of or relating to this Agreement shall be heard and determined exclusively in any federal or state court sitting in Houston, Texas. Consistent with the preceding sentence, the Parties irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, any claim that it is not subject personally to the jurisdiction of the aforementioned courts, that its property is exempt or immune from attachment or execution, that the claim is brought in an inconvenient forum, that the venue of the claim is improper, or that this Agreement or the transactions contemplated by this Agreement may not be enforced in or by any of the aforementioned courts.

10.           SEVERABILITY AND CONSTRUCTION. If any provision of this Agreement is declared by any court of competent jurisdiction to be void or unenforceable or against public policy, such provision shall be deemed severable and severed from this Agreement and the balance of this Agreement shall remain in full force and effect. If a court of competent jurisdiction determines that any restriction in this Agreement is overbroad or unreasonable under the circumstances, such restriction shall be modified or revised by such court to include the maximum reasonable restriction allowed by law.

11.           WAIVER. Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant or condition. Any waiver of rights under this Agreement shall be in writing. If either party should waive any breach of any provisions of this Agreement, such party shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

12.            ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements, oral and written, between the parties hereto with respect to the subject matter hereof, including the Employment Agreement. For avoidance of doubt, the compensation defined or described in this Agreement shall be in lieu of any payments defined or described in the Employment Agreement. In the event of any inconsistency between any provision of this Agreement and any provision of the Employment Agreement, any plan, employee handbook, personnel manual, program, policy, arrangement or agreement of the Company or any of its subsidiaries, the provisions of this Agreement shall control. This Agreement may be modified or amended only by an instrument in writing signed by both parties. Each of the parties hereto has relied on his or its own judgment in entering into this Agreement.

13.            WITHHOLDING. All payments made to Executive pursuant to this Agreement will be subject to withholding of employment taxes and other lawful deductions, as applicable.

14.            SURVIVAL. Provisions of this Agreement which by their terms must survive the termination of this Agreement in order to effectuate the intent of the parties will survive any such termination, whether by termination of Executive’s employment, or otherwise, for such period as may be appropriate under the circumstances. For avoidance of doubt, the Company’s obligations to make payments and provide benefits under Section 3 and Executive’s obligations defined in or described under Section 4 shall survive termination of this Agreement. In the event of the Executive’s death, this Agreement shall be enforceable by his estate, executors, or legal representatives.

15.            Consultation with Counsel. Executive acknowledges that he has had a full and complete opportunity to consult with counsel or other advisers of his own choosing concerning the terms, enforceability and implications of this Agreement and the Release Agreement, that the Company has not made any representations or warranties to Executive concerning the terms, enforceability and implications of this Agreement other than as are reflected in this Agreement, and that Executive’s execution of this Agreement is knowing and voluntary.

16.            SUCCESSORS AND ASSIGNS. This Agreement shall bind and shall inure to the benefit of the Company and any and all of its successors and assigns. This Agreement is personal to Executive and shall not be assignable by Executive. The Company may assign this Agreement to any entity which (i) purchases all or substantially all of the assets of the Company or (ii) is a direct or indirect successor (whether by merger, sale of stock or transfer of assets) of the Company. Any such assignment shall be valid so long as the entity which succeeds to the Company expressly assumes the Company’s obligations hereunder and complies with its terms.

17.            SECTION HEADINGS. The section headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement.

18.            COUNTERPARTS. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same agreement.

19.            Section 409a compliance. The intent of the parties is that payments and benefits under this Agreement comply with, or be exempt from, Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. Any payments under this Agreement that may be excluded from Code Section 409A, either as separation pay due to an involuntary separation from service, as a short-term deferral, or as a settlement payment pursuant to a bona fide legal dispute shall be excluded from Code Section 409A to the maximum extent possible. For purposes of Code Section 409A, Executive’s right to receive payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., payment shall be made within thirty (30) days following the date of termination), the actual date of payment within the specified period shall be within the sole discretion of the Company. Any payments to be made under this Agreement upon a termination of employment shall only be made upon a “separation from service” under Code Section 409A. Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed by the Company at the time of his “separation from service” to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, and if any of the payments upon “separation from service” set forth herein and/or under any other agreement with the Company are deemed to be “deferred compensation”, then to the extent delayed commencement of any portion of such payments is required in order to avoid a prohibited distribution in violation of Code Section 409A, such payments shall not be provided to Executive prior to the earliest of (i) the expiration of the six-month period measured from the date of Executive’s “separation from service” with the Company, (ii) the date of Executive’s death or (iii) such earlier date as permitted under Code Section 409A without the imposition of adverse taxation (the “Delayed Payment Period”). Upon the first business day following the Delayed Payment Period, all payments deferred pursuant to this Section 19 shall be paid in a lump sum to Executive, and any remaining payments due shall be paid as otherwise provided herein or in the applicable agreement. No interest shall be due on any amounts so deferred. All expenses or other reimbursements as provided herein shall be payable in accordance with the Company’s policies in effect from time to time, but in any event shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Executive. Nothing contained in this Agreement shall constitute any representation or warranty by the Company regarding compliance with Code Section 409A. The Company has no obligation to take any action to prevent the assessment of any tax under Code Section 409A on any person and neither the Parent, Company nor their subsidiaries, nor any of their employees or representatives shall have any liability to Executive with respect thereto. In no event whatsoever shall the Parent, Company or any of their subsidiaries be liable for any additional tax, interest or penalties that may be imposed on Executive by Code Section 409A or any damages for failing to comply with Code Section 409A or this Section 19.

20.            FURTHER ASSURANCES. The Company and Executive agree to execute and deliver any additional documents and instruments and perform any additional acts that may be necessary or appropriate to effectuate and perform the provisions of this Agreement and the transaction contemplated by this Agreement.

The Remainder of this Page is Left Intentionally Blank

IN WITNESS WHEREOF, the parties hereto have executed this Retirement Agreement as of the date first written above.

exhibit A

outstanding equity AWARDS

Set forth below are the number of unvested shares under the Outstanding Equity Awards that are eligible to vest under Section 3 of the Retirement Agreement.

Performance Vesting Restricted Stock - TSR

10,417 shares subject to award agreement with a September 1, 2020 [revised grant date]

20,833 shares subject to award agreement with a September 1, 2020 [revised grant date]

20,750 shares subject to award agreement with a December 31, 2020 [revised grant date]

Performance Vesting Restricted Stock – CFDAS Growth

10,416 shares subject to award agreement with a September 1, 2020 [revised grant date]

20,834 shares subject to award agreement with a September 1, 2020 [revised grant date]

20,750 shares subject to award agreement with a December 31, 2020 [revised grant date]

Time Vested Restricted Stock

19,167 shares granted to Executive pursuant to award agreement dated December 31, 2019.

31,000 shares granted to Executive pursuant to award agreement dated December 31, 2020.

Grand Total of Unvested Shares under Outstanding Equity Awards = 154,167 shares

EXHIBIT B

RELEASE AGREEMENT

1.            I, Michael Raleigh, have served as Chief Executive Officer (“CEO”) of Epsilon Energy USA, Inc. (the “Company”) and Epsilon Energy Ltd. (“Parent”) and serve as a member of the Board of Directors of Parent (the “Board”). The Company and I entered the Retirement Agreement dated as of June [__], 2022 (the “Retirement Agreement”). I will cease to serve as CEO of the Company and Parent and as a member of the Board and the board of directors of any of its subsidiaries as of June 30, 2022 (the “Separation Date”).

2.            I agree to the terms, commitments, covenants, conditions and general release of claims contained in this Release Agreement (this “Agreement”), in consideration for the compensation set forth in Section 3 of the Retirement Agreement. I understand this Agreement must be returned to the Company no later than 21 calendar days after the day I received this Agreement and this Agreement may be revoked by written notice to the Company for 7 days after it is signed. The Company has advised me to consult with an attorney prior to signing this Agreement.

3.            I acknowledge and agree that other than as specifically set forth in Section 3 of the Retirement Agreement, following the Separation Date, I am not and will not be due any additional compensation and will not be eligible to earn or accrue additional benefits under the benefit plans of the Company after the Separation Date. My participation (if any) in any of the compensation or benefit plans of the Company as of and after the Separation Date shall be subject to and determined in accordance with the terms and conditions of such plans as they may be amended from time to time.

4.            I, on behalf of myself, my heirs, administrators, representatives, executors, successors, and assigns, hereby irrevocably and unconditionally release, acquit, and forever discharge the Company and Parent and each of their respective predecessors, parents, subsidiaries, affiliates, divisions, any related entity, successors and assigns, and all of their current and former agents, officers, directors, shareholders, employees, members, trustees, fiduciaries, representatives, attorneys and all persons acting by, through, under or in concert with any of them (the “Released Parties”) from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, damages, causes of action, suits, demands, losses, debts, and expenses of any nature whatsoever, known or unknown (“Claims”) which I have, had or claim to have against any Released Party up to and including the date I sign this Agreement. This general release of Claims shall include, without limitation, Claims relating to my employment and retirement from employment with the Company, Claims of discrimination under the common law or any federal or state statute (including, without limitation, the Civil Rights Act of 1964, the Americans with Disabilities Act and the Age Discrimination in Employment Act, all as amended), Claims for wrongful discharge, Claims for the payment of any salary, wages, bonuses, commissions, vacation pay, severance pay or benefits, Claims of detrimental reliance, and all other statutory, common law or other Claims of any nature whatsoever, to the extent permitted by law. This general release of Claims does not apply to any Claims concerning a breach of the Retirement Agreement, claims for indemnification (including without limitation pursuant to the directors’ and officers’ liability insurance policy coverage referenced in Section 3(d) of the Executive Employment Agreement or the indemnification agreement referenced in Section 3(d) of the Executive Employment as well as under state or other law or the governing documents of the Company and Parent, in each case relating to the period when I was a director, officer, or employee of the Company or Parent), claims for Accrued Benefits (as defined in the Retirement Agreement) or any claims arising after the date I sign this Agreement, or any Claims for or related to my continuing ownership of the Outstanding Equity Awards or any equity awards of the Company, Parent, or their affiliates which I owned as of the date my employment terminated. With respect to the Claims I am waiving herein, I acknowledge that I am waiving my right to receive money or any other relief in any action instituted by me or on my behalf by any other person, entity or government agency.

5.            To the maximum extent permitted by law, I covenant not to sue or to institute or cause to be instituted any action in any federal, state, or local agency or in court against any of the Released Parties, including, without limitation, any of the Claims released by this Agreement. Notwithstanding the foregoing, nothing herein shall prevent me or any of the Released Parties from filing a charge with an administrative agency related to the validity of this Agreement, from instituting any action required to enforce the terms of this Agreement, or from challenging whether the release outlined in Section 4 above is knowing and voluntary. However, I may not recover monetary damages resulting from any charge filed with an administrative agency related to the validity of this Agreement. In addition, nothing herein shall be construed to prevent me from enforcing any rights I may have to recover vested benefits under the Employee Retirement Income Security Act of 1974, as amended.

6.            I understand that notwithstanding any other provision of this Agreement, nothing contained in this Agreement limits my ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (collectively, “Government Agencies”), or prevents me from providing truthful testimony in response to a lawfully issued subpoena or court order. Further, nothing in this Agreement shall (1) prohibit me from making reports of possible violations of federal law or regulation to any Government Agencies, including but not limited to the Securities and Exchange Commission, in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934, as amended, or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of federal law or regulation, or (2) require notification or prior approval by the Company of any such report; provided that I am not authorized to disclose communications with counsel that were made for the purpose of receiving legal advice or that contain legal advice or that are protected by the attorney work product or similar privilege. Further, this Agreement does not limit my ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. This Agreement does not limit my right to seek an award pursuant to Section 21F of the Securities Exchange Act of 1934. In addition, for the avoidance of doubt, pursuant to the federal Defend Trade Secrets Act of 2016, I shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (x) is made (i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

7.            I acknowledge by signing this Agreement that I have read and understand this document, that I have conferred with or had opportunity to confer with my attorney regarding the terms and meaning of this Agreement, that I have had sufficient time to consider the terms provided for in this Agreement, that no representations or inducements have been made to me except as set forth in this Agreement, and that I have signed the same KNOWINGLY AND VOLUNTARILY.

8.            In the event that any one or more of the provisions of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby. Moreover, if any one or more of the provisions contained in this Agreement are held to be excessively broad as to duration, scope, activity or subject, such provisions will be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law.

Date:____________________, 2022

Exhibit 10.2

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of June 23, 2022 by and among Epsilon Energy USA Inc. (the “Company” or “Epsilon”), a wholly owned subsidiary of Epsilon Energy Ltd. (“Parent”), and Jason Stabell (the “Executive” and, together with the Company, the “Parties”) with reference to the following:

WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company pursuant to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth in this Agreement, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:

1.            Employment and Duties. Executive shall commence employment with the Company on July 1, 2022 or such other date as mutually agreed to by the parties (the “Effective Date”). Executive shall be employed by the Company and serve as the Chief Executive Officer for the Company and the Parent. Executive shall report directly to the Parent’s board of directors (the “Board”). Executive shall have such duties and responsibilities, commensurate with Executive’s position, as may be reasonably assigned to Executive from time to time by the Board. Executive’s duties under this Agreement shall further include the following: (i) Executive shall devote Executive’s full business time, best efforts, and attention to rendering his duties to the Company; and (ii) Executive shall use good faith efforts to perform all services under this Agreement in accordance with all applicable federal, state, and local laws and regulations and all requirements of all applicable regulatory, self-regulatory, and administrative bodies, and, Executive shall follow and comply with the rules, regulations, policies, and guidelines adopted from time to time by the Parent and the Company that apply to executive officers, each as in effect from time to time. Executive’s principal place of employment shall be in the greater Houston, Texas metropolitan area.

2.            At Will Employment. Executive’s employment with the Company is an at-will employee and nothing in this Agreement shall be interpreted or construed to alter this status, or to confer upon Executive any right with respect to continuance of employment by the Company for any specified duration or by any of its affiliates, nor interfere in any way with the right of the Company to terminate Executive’s employment at any time. This Agreement commences upon the Effective Date and terminates upon the termination (the “Date of Termination”) of Executive’s employment with the Company and its subsidiaries (the “Employment Period”). The termination of Executive’s employment shall not affect any of the obligations that expressly extend beyond continued employment, including the Continuing Obligations set forth in Section 7 of this Agreement.

3.            Compensation and Benefits. Subject to the provisions of this Agreement, the Company shall pay and provide the following compensation and other benefits to Executive during the Employment Period as compensation for services rendered hereunder:

(a)           Base Salary. The Company shall pay to Executive an annual salary of $300,000 (the “Base Salary”) in substantially equal monthly installments in accordance with the Company’s then-current payroll practices as established, and as may be modified, from time to time. For the avoidance of doubt, the term “Base Salary” as used in this Agreement shall not be deemed to include any of the additional benefits or amounts outlined in Sections 3(b)-(f) hereof. The Company shall have the right, but not the obligation, to increase Executive’s Base Salary from time to time.

(b)          Annual Bonus. In addition to the Base Salary, Executive shall be eligible to receive an annual incentive bonus (the “Annual Bonus”) targeted at $200,000 (the “Target Bonus”) for achieving performance goals established by the Compensation Committee of the Parent’s Board of Directors (the “Committee”) in its sole discretion (the “Performance Goals”) for the then current calendar year. It is anticipated that, for any given year, the amount of the Annual Bonus could range from 0% of Target Bonus (in the event of a failure to achieve any of the Performance Goals), to 100% of Target Bonus (in the event of achievement of the Performance Goals at target), to between 100% and 150% of Target Bonus (in the event that a substantial number of the Performance Goals are significantly exceeded). The determination of whether Executive has achieved or significantly exceeded the Performance Goals shall be in the Committee’s reasonable discretion. The Committee may in its discretion determine that the Performance Goals on balance as a whole have been met notwithstanding the fact that certain of the Performance Goals may not have been met if other Performance Goals are exceeded. All Performance Goals may be adjusted in the discretion of the Committee as it deems appropriate (i) to exclude the effect of extraordinary, unusual and/or non-recurring items, discontinued operations and accounting charges and (ii) to reflect such other facts as the Board deems appropriate so as to reflect the Performance Goals and not distort the calculation of the Performance Goals. The Annual Bonus, if earned, shall be paid on or about the March 15^th immediately following the performance year, provided Executive is employed on such date, or any earlier date approved by the Compensation Committee for executive officer bonuses. For the period from the Effective Date through December 31, 2022, Executive’s Target Bonus shall be prorated to reflect the date on which Executive commences employment with the Company under this Agreement.

(c)           Equity Award. On the Effective Date, Executive shall receive restricted stock units (“RSUs”) with a grant date value of $600,000, based on the closing price of the Company’s common stock on such date. The RSUs will be granted under, and subject to, the terms of the Epsilon Energy Ltd. 2020 Equity Incentive Plan (the “Plan”) and an award agreement issued to Executive under the Plan. The RSUs shall vest over a four year period beginning on the Effective Date as follows: twenty-five percent (25%) of the RSUs on the first anniversary of the Effective Date, and an additional 6.25% of the RSUs vesting on the first day of each subsequent quarter, with full vesting on July 1, 2026, provided that Executive is employed by the Company on each such vesting date. All outstanding RSUs shall vest at target upon a Change in Control, as defined in the Plan, provided Executive then remains employed by the Company. Executive shall be eligible to receive an annual equity award under the Plan on such terms and conditions as determined in the discretion of the Compensation Committee of the Board.

(d)           Expenses. The Company will reimburse Executive for all reasonable and necessary business expenses incurred by Executive in the performance of his duties under this Agreement, subject to any maximum annual limit and other restrictions on such expenses set by the Company, and also subject to submission of such reasonable substantiation and documentation as may be required from time to time. Executive’s right to payment or reimbursement for business expenses hereunder shall further be subject to the following additional rules: (i) the amount of expenses eligible for payment or reimbursement during any calendar year shall not affect the expenses eligible for payment or reimbursement in any other calendar year; (ii) payment or reimbursement shall be made upon or as soon as practicable after submission of such substantiation or documentation, and in any event, not later than December 31st of the calendar year following the calendar year in which the expense or payment was incurred; and (iii) the right to payment or reimbursement is not subject to liquidation or exchange for any other benefit.

(e)           Vacation Policy. Executive shall be entitled to participate in a flexible vacation policy, which policy is based on mutual trust between the Company and Executive and allows Executive the opportunity to work or take time off as Executive sees fit, as long as he fulfills the duties and responsibilities set forth herein. Executive does not accrue time off so the Company will not pay out unused time upon resignation or termination of employment. This policy does not interfere or change eligibility for legally established leaves.

(f)            Executive Benefits. Executive shall be entitled to participate in all applicable Company benefit plans, programs, or arrangements that the Company may offer to its executives generally, from time to time, and as may be amended from time to time. Participation will be subject to the terms of the applicable plan documents and generally applicable Company policies, as may be in effect from time to time, and any other restrictions or limitations imposed by law. During the Employment Period, the Company will purchase and maintain, at its own expense, directors’ and officers’ liability insurance providing coverage to Executive on terms equivalent to those provided to other executive officers and members of the Board.

(g)          Accrued Obligations. If Executive’s employment with the Company is terminated for any reason, the Company shall pay or provide to the Executive (or to the Executive’s authorized representative or estate) (i) any Base Salary earned through the Date of Termination; (ii) unpaid expense reimbursements (subject to, and in accordance with, Section 3(d) of this Agreement); and (iii) any then vested benefits Executive may have under any employee benefit plan or compensation arrangement of the Parent or the Company (including equity compensation plans and insurance coverages) through the Date of Termination, which vested benefits shall be paid and/or provided in accordance with the terms of such employee benefit plans. In the event that the Executive terminates employment due to death or disability, Executive (or in the case of death, the Executive’s estate) shall be entitled to receive the Earned Bonus (as defined in Section 5(a)), if any, at the same time bonuses are paid to other employees who are actively employed by the Company. The amounts described under this Section 3(g) are referred to below as the “Accrued Obligations.”

4.            Termination of Employment Upon Executive’s Death or Disability, or by the Company for Cause, or by Executive without Good Reason.

(a)           Termination of Employment Due to Executive’s Death. If Executive’s employment with the Company terminates due to death, the Company shall pay to the estate of Executive such compensation as would otherwise have been payable to Executive (and any expense reimbursements for expenses incurred) up to the date of his death. Other than the obligations set forth in this Section 4(a), the Company shall have no additional financial obligation under this Agreement to Executive or his estate.

(b)           Termination of Employment Due to Executive’s Disability, Illness, or Incapacity. If, in the opinion of a physician selected by the Company and reasonably approved by Executive, Executive becomes physically or mentally disabled or develops an illness or incapacity during the Employment Period that renders Executive at least temporarily unable to perform (either with or without reasonable accommodation) the essential functions of his job for a period of 180 days within any continuous 12-month period, then Executive shall continue to receive the Base Salary until the end of such 180-day period, less any benefits received during the foregoing respective period by Executive under any disability insurance carried or provided by the Company. If Executive’s employment is terminated due to a permanent disability, as reasonably determined by the Company in accordance with applicable law, then the Company shall pay to Executive such compensation as would otherwise have been payable to Executive (and any expense reimbursements for expenses incurred) up to the end of the month in which Executive’s employment is terminated, and the Company shall have no additional obligation under this Agreement to Executive. The Company is not obligated to, but may, carry disability insurance for its employees.

(c)           Termination of Employment by the Company for Cause, or by Executive without Good Reason. If the Company terminates the employment of Executive for Cause (defined below), then the Company shall pay to Executive compensation earned by Executive (and any expense reimbursements for expenses incurred) up to the Date of Termination, and no other compensation, bonus, or other amount shall be due and owing to Executive. Executive may terminate Executive’s employment hereunder voluntarily and without Good Reason (defined below) upon giving at least 30 days’ prior written notice to the Company. If Executive terminates Executive’s employment voluntarily and without Good Reason, then the Company shall pay to Executive compensation earned by Executive up to Date of Termination, and no other compensation, bonus, or other amount shall be due and owing to Executive

(1)            For purposes of this Agreement, the term “Good Reason” shall mean without Executive’s prior written consent: (i) a material diminution in the nature or scope of Executive’s authority, duties, responsibilities, or title from those applicable to Executive as of the Effective Date; (ii) a relocation of Executive’s principal worksite that increases Executive’s one-way commute by more than 30 miles; or (iii) a material breach by the Company of any term or provision of this Agreement. Notwithstanding anything in this Section 4(c)(1) to the contrary, no event or condition described in this Section shall constitute Good Reason unless: (x) within 90 days from Executive first acquiring actual knowledge of the existence of the Good Reason condition described in this Section, Executive provides the Company written notice of Executive’s intention to terminate Executive’s employment for Good Reason and the grounds for such termination; (y) such grounds for termination (if susceptible to correction) are not corrected by the Company as soon as reasonably practicable, but in any case within 30 days of the Company’s receipt of such notice (or, in the event that all such grounds cannot be corrected within such 30-day period, the Company has substantially corrected such grounds within such 30-day period and is making correction as soon as reasonably practicable); and (z) Executive terminates Executive’s employment with the Company immediately following expiration of such 30-day period.

(2)            For purposes of this Agreement, the term “Cause” shall mean a termination by the Company of Executive’s employment because of: (i) any act or omission that constitutes an intentional and material breach by Executive of any of Executive’s obligations under this Agreement; (ii) Executive’s conviction of, or plea of nolo contendere to, any felony or another crime involving dishonesty; (iii) Executive willfully engaging in any misconduct, negligence, act of dishonesty, violence or threat of violence (including any violation of federal securities laws) that is materially injurious to the Company or any of its parents, subsidiaries, or affiliates; (iv) Executive’s intentional and material breach of a known written policy of the Company or the rules of any governmental or regulatory body applicable to the Company that is or could reasonably be materially injurious to the Company; (v) Executive’s repeated refusal to follow the lawful directions of the Company that are consistent with Executive’s duties and responsibilities under this Agreement; or (vi) any other willful misconduct by Executive that is materially injurious to the financial condition or business reputation of the Company or any of its parents, subsidiaries, or affiliates.

5.           Termination of Employment by Executive for Good Reason, or by the Company Without Cause. If Executive’s employment is terminated by the Company without Cause (and not for death or disability) or Executive terminates employment for Good Reason, then, in addition to the Accrued Obligations, and subject to (i) Executive signing a separation agreement and release substantially in the form attached hereto as Exhibit A (the “Separation Agreement”), which provides that if Executive materially breaches any of the Continuing Obligations (as defined in Section 7 below), all payments of the Severance Amount shall immediately cease, (ii) the Separation Agreement becoming irrevocable, and (iii) Executive not being eligible for benefits due to a qualifying termination during the Change in Control Period under Section 6 below:

(a)           Cash Severance. The Company shall pay Executive an amount equal to (i) twenty-four (24) months of Executive’s Base Salary, plus (ii) an amount equal to Executive’s then current Target Bonus or Target Bonus for the prior year if higher, pro rated for the number of complete or partial months of employment during the then-current year (the “Severance Amount”), and, (iii) in the event that Executive’s employment is terminated after the end of the calendar year but prior to the payment of any Annual Bonus for the immediately preceding calendar year, Executive shall be entitled to receive a lump sum payment of any unpaid Annual Bonus earned based on achievement of Performance Goals, without any reduction for individual performance, with respect to such immediately preceding calendar year (the “Earned Bonus”).

(b)           Accelerated Vesting of Equity Awards. Notwithstanding anything to the contrary in any equity award under the Plan or otherwise, any time-based equity awards shall immediately accelerate and become fully vested and exercisable or nonforfeitable upon the Date of Termination and any employment or service based requirement under any performance-based equity award shall be fully waived, with payment to be made based on the achievement of the Company’s actual performance during the performance period.

(c)           COBRA Premiums. Subject to Executive’s copayment of premium amounts at the applicable active employees’ rate and Executive’s timely election to receive benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay to the group health plan provider or the COBRA provider a monthly payment equal to the monthly employer contribution that the Company would have made to provide health insurance to Executive if Executive had remained employed by the Company until the earliest of (A) the twelve month anniversary of the Date of Termination; (B) the date that Executive becomes eligible for group medical plan benefits under any other employer’s group medical plan; or (C) the cessation of Executive’s health continuation rights under COBRA; provided, however, that if the Company determines that it cannot pay such amounts to the group health plan provider or the COBRA provider (if applicable) without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then the Company shall convert such payments to payroll payments directly to Executive for the time period specified above. Such payments to Executive shall be subject to tax-related deductions and withholdings and paid on the Company’s regular payroll dates.

(d)           Severance Payment Timing. The amounts payable under this Section 5 (other than the Earned Bonus, as applicable), to the extent taxable, shall be paid or commence to be paid within sixty (60) days after the Date of Termination; provided, however, that if the period applicable to Executive’s termination of employment begins in one calendar year and ends in a second calendar year, such payments to the extent they qualify as “non-qualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), shall be paid or commence to be paid in the second calendar year by the last day of such period. Half of the Severance Amount shall be paid in a single lump sum, the remaining half in twelve equal monthly installments and the Earned Bonus, if any, shall be paid at the same time as if Executive had remained employed with the Company through the payment date.

6.            Severance Pay and Benefits Upon Termination by the Company without Cause or by Executive for Good Reason within the Change in Control Period. The provisions of this Section 6 shall apply in lieu of, and expressly supersede, the provisions of Section 5 if (i) Executive’s employment is terminated either by the Company without Cause or by Executive for Good Reason and (ii) the Date of Termination occurs on or within twelve months of a Change in Control (as defined under the Plan), which is referred to herein as the “Change in Control Period.” These provisions of this Section 6 shall terminate and be of no further force or effect after the end of the Change in Control Period. If Executive’s employment is terminated by the Company without Cause or Executive terminates employment for Good Reason, and in each case the Date of Termination occurs during the Change in Control Period, then, in addition to the Accrued Obligations, and subject to the signing of, and compliance with, the Separation Agreement by Executive and the Separation Agreement becoming fully effective, all within the time frame set forth in the Separation Agreement:

(a)           Cash Severance. The Company shall pay Executive a lump sum in cash in an amount equal to the sum of (A) twenty-four (24) months of Executive’s then-current Base Salary (or Executive’s Base Salary in effect immediately prior to the Change in Control, if higher), and (B) an amount equal to Executive’s Target Bonus for the then-current year (or Executive’s Target Bonus in effect immediately prior to the Change in Control, if higher), pro rated for the number of complete or partial months of employment during the then-current year, plus, if applicable, any Earned Bonus (the “Change in Control Payment”).

(b)          COBRA Premiums. The COBRA related payments described in Section 5(b) above shall be eligible to extend for eighteen (18) months after the Date of Termination.

(c)           Accelerated Vesting of Equity Awards. Notwithstanding anything to the contrary in any equity award under the Plan or otherwise, any time-based equity awards shall immediately accelerate and become fully vested and exercisable or nonforfeitable upon the Date of Termination and any employment or service based requirement under any performance-based equity award shall be fully waived, with payment to be made based on the achievement of the Company’s actual performance during the performance period, as reasonably determined in the Company’s discretion.

(d)          Change in Control Payment Timing. With the exception of the payment of any performance-based equity awards, the amounts payable under this Section 6, to the extent taxable, shall be paid or commence to be paid within sixty (60) days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payments to the extent they qualify as “non-qualified deferred compensation” within the meaning of Section 409A of the Code, shall be paid or commence to be paid in the second calendar year by the last day of such 60-day period. The Change in Control Payment shall be paid in a single lump sum and the Earned Bonus, if any, shall be paid at the same time as if Executive had remained employed with the Company through the payment date.

7.            Continuing Obligations.

(a)           Restrictive Covenants Agreement. As a condition of entering into this Agreement, Executive agrees to the terms of the Employee Proprietary Information and Inventions Assignment Agreement, to be dated as of the Effective Date, between the Company and Executive (the “Restrictive Covenants Agreement”). For purposes of this Agreement, the obligations in this Section 7 and those that arise in the Restrictive Covenants Agreement and any other agreement relating to confidentiality, assignment of inventions, or other restrictive covenants that may later be agreed to by Executive shall collectively be referred to as the “Continuing Obligations.”

(b)           Third-Party Agreements and Rights. Executive hereby represents, warrants, covenants, understands and agrees that: (i) Executive is free to enter into this Agreement; (ii) Executive is not obligated or a party to any engagement, commitment or agreement with any person or entity that will, does or could conflict with or interfere with Executive’s full and faithful performance of this Agreement, nor does Executive have any commitment, engagement or agreement of any kind requiring Executive to render services or preventing or restricting Executive from rendering services or respecting the disposition of any rights or assets that Executive has or may hereafter acquire or create in connection with his services hereunder; (iii) Executive shall not intentionally use any material or content of any kind in connection with Executive’s products, software or website that is copyrighted or owned or licensed by a party other than the Company or Parent or that would or could infringe the rights of any other party; and (iv) Executive shall not intentionally use in the course of Executive’s performance under this Agreement, and shall not disclose to the Company, any confidential information belonging, in part or in whole, to any third party.

(c)           Litigation and Regulatory Cooperation. During and after Executive’s employment, Executive shall, upon Company’s request, cooperate with the Company in (i) the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while Executive was employed by the Company, and (ii) the investigation, whether internal or external, of any matters about which the Company believes Executive may have knowledge or information. Executive’s full cooperation in connection with such claims, actions or investigations shall include, but not be limited to, being available to meet with counsel upon reasonable notice to answer questions or to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after Executive’s employment, Executive also shall reasonably cooperate with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while Executive was employed by the Company. All such activities shall be scheduled, to the extent reasonably possible, to accommodate Executive’s business and personal obligations at the time. The Company shall reimburse Executive for any reasonable out of pocket expenses incurred in connection with Executive’s performance of obligations pursuant to this Section 7(c), which shall be in addition to its obligations to provide indemnification to Executive. If Executive is requested or required to provide material cooperation under this Section 7(c) more than 24 months after the Date of Termination, Employee shall be compensated at an hourly rate (based on Executive’s Base Salary as of the Date of Termination), except to the extent prohibited by applicable law.

(d)           Relief. Executive agrees that it would be difficult to measure any damages caused to the Company which might result from any breach by Executive of the Continuing Obligations, and that in any event monetary damages would be an inadequate remedy for any such breach. Accordingly, Executive agrees that if Executive breaches, or proposes to breach, any portion of the Continuing Obligations, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company.

8.            280G Limitation.

(a)          Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Code, and the applicable regulations thereunder (the “Aggregate Payments”), would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which Executive becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it would result in Executive receiving a higher After Tax Amount (as defined below) than Executive would receive if the Aggregate Payments were not subject to such reduction. In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code: (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).

(b)           For purposes of this Section 8, the “After Tax Amount” means the amount of the Aggregate Payments less all federal, state, and local income, excise and employment taxes imposed on Executive as a result of Executive’s receipt of the Aggregate Payments. For purposes of determining the After Tax Amount, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

(c)           For purposes of determining whether and the extent to which the Aggregate Payments will be subject to the excise tax, (i) no portion of the Aggregate Payments the receipt or enjoyment of which Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken into account, (ii) no portion of the Aggregate Payments shall be taken into account which, in the written opinion of independent auditors or advisors of nationally recognized standing (“Independent Advisors”) selected by the Company prior to a Change in Control, does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the excise tax, no portion of such Aggregate Payments shall be taken into account which, in the opinion of Independent Advisors, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as defined in Section 280G(b)(3) of the Code) allocable to such reasonable compensation, and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Aggregate Payments shall be determined by the Independent Advisors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. The Independent Advisors shall provide detailed supporting calculations both to the Company and Executive within fifteen (15) business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or Executive. Any determination by the Independent Advisors shall be binding upon the Parties.

9.            Section 409A.

(a)          Anything in this Agreement to the contrary notwithstanding, if at the time of Executive’s separation from service within the meaning of Section 409A of the Code, the Company determines that Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that Executive becomes entitled to under this Agreement or otherwise on account of Executive’s separation from service would be considered deferred compensation otherwise subject to the 20% additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six (6) months and one day after Executive’s separation from service, or (B) Executive’s death. If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the 6-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.

(b)          All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by Executive during the time periods set forth in this Agreement. All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses). Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

(c)           To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon Executive’s termination of employment, then such payments or benefits shall be payable only upon Executive’s “separation from service.” The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

(d)          The parties intend that this Agreement will be administered in a manner not intended to violate Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). Any such payment that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral (each as described in Treasury regulations issued under Section 409A) shall be excluded from Section 409A to the greatest extent possible.

(e)            The Company makes no representation or warranty and shall have no liability to Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, Section 409A.

10.            Recoupment. Executive shall be required to repay incentive pay to the Company as described in this Section 10, and the Company may offset payments otherwise due and payable under this Agreement by the amounts required to be repaid under this Section 10. Repayment of incentive pay shall be required if, and to the extent that, the Committee determines, in its sole discretion, that repayment is due on account of a restatement of the Parent’s financial statements or otherwise pursuant to any clawback or compensation recoupment policy as may be in effect or amended from time to time (the “Recoupment Policy”). Where the result of a performance measure was a factor in determining the compensation awarded or paid, but (i) the subsequently-restated performance measure was not the only factor used to determine the compensation awarded or paid, or (ii) the incentive-based compensation is not awarded or paid on a formulaic basis, the Committee will determine in its sole discretion the amount, if any, by which the payment or award should be reduced. If the Committee seeks to recover payment of incentive pay as a result of a restatement of the Company’s financial statements or otherwise under the Recoupment Policy, Executive shall pay to the Company, as applicable, (A) all or a portion (as determined by the Committee in its reasonable discretion) of the amount by which the payment received by Executive exceeds the amount that would have been paid to Executive based on the restated financial statements, or (B) the amount (as determined by the Committee in its reasonable discretion) to be repaid pursuant to the Recoupment Policy. Nothing in this Section 10 shall preclude the Company, the Parent or any other person from taking any other action.

11.          No Mitigation; Offset. In the event of any termination of employment and service hereunder, Executive shall be under no obligation to seek other employment, and there shall be no offset against any amounts due Executive under this Agreement on account of any remuneration attributable to any subsequent employment that Executive may obtain. The preceding sentence shall not limit the Company’s right to discontinue payments due to a violation of Continuing Obligations or exercise its recoupment rights under Section 11.

12.          Indemnification. The Company will (i) indemnify Executive with respect to claims arising out of any action taken or not taken in Executive’s capacity as an officer or employee of the Company or its subsidiaries; provided, that Executive acted in good faith and in a manner that he reasonably believed to be in or not opposed to the best interests of the Company or its subsidiaries, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his conduct was unlawful, (ii) advance to Executive all reasonable and documented out of pocket costs and expenses incurred by Executive in connection with the foregoing clause (i), including but not limited to attorneys’ fees, and (iii) provide for Executive to be covered by D&O insurance, with respect to clauses (i) and (ii), on the same terms as are made available to the CEO and/or members of the Board, as applicable; provided that, this Agreement constitutes an undertaking that amounts advanced under clause (ii) shall be promptly repaid to the Company by Executive if it shall ultimately be determined by a court of competent jurisdiction that Executive is not entitled to be indemnified by the Company pursuant to this Section 12. Nothing herein shall limit any right that Executive may have in respect of indemnification, advancement or liability insurance coverage under the organizational documents of the applicable entity, any other policy, plan, contract or arrangement of the Company, the Parent or their respective subsidiaries or under applicable law with respect to his services as an officer or employee for the Parent, Company or their subsidiaries.

13.          Resignation of All Other Positions. To the extent applicable, Executive shall be deemed to have resigned from all officer and board member positions that Executive holds with the Company, Parent, or any of their respective subsidiaries and affiliates upon the Date of Termination. Executive shall execute any documents in reasonable form as may be requested to confirm or effectuate any such resignations.

14.          Survival. The provisions of this Agreement shall survive the termination of this Agreement and/or the termination of Executive’s employment to the extent necessary to effectuate the terms contained herein, including but not limited to the Company’s obligation to make severance payments or provide indemnification and Executive’s obligations to comply with the Continuing Obligations.

15.          Waiver of Breach. The waiver of a breach of any of the provisions of this Agreement by the Parties shall not be construed as a waiver of any subsequent breach by the breaching party.

16.          Binding Effect; Assignment. The rights and obligations of the Company under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Company. This Agreement is a personal employment contract, and the rights, obligations, and interests of Executive hereunder may not be sold, assigned, delegated, transferred, pledged, or hypothecated.

17.          Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, if any, between the Company and Executive with respect to the terms and conditions of Executive’s employment with the Company. No supplement, modification, amendment, or waiver of any of the terms, conditions, or provisions in this Agreement can be made unless in writing and signed by both an authorized representative of the Company, the Board, and Executive.

18.          Notice. All notices that are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given: When received if personally delivered; when transmitted if transmitted by telecopy or similar electronic transmission method; one business day after it is sent, if sent by recognized expedited delivery service; and five days after it is sent, if mailed, first class mail, certified mail, return receipt requested, with postage prepaid. In each case notice shall be sent to:

If to Executive:

16945 Northchase Drive, Suite 1610 

Houston, Texas 77060 

Attn: Lane Bond

19.          Severability. If any provision of this Agreement or the application of any such provision to any party or circumstances shall be determined by any court of competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this Agreement or the application of such provision to such person or circumstances other than those to which it is so determined to be invalid and unenforceable shall not be affected, and each provision of this Agreement shall be validated and shall be enforced to the fullest extent permitted by law.

20.          Taxes. All salary, benefits, reimbursements and any other payments to Executive under this Agreement shall be subject to all applicable payroll and withholding taxes and deductions required by any law, rule or regulation of and federal, state or local authority. Executive shall in all events be solely responsible for payment of all applicable federal and state taxes that may be assessed against compensation or benefits paid or payable by the Parent or the Company or Parent under this Agreement or otherwise, and no representation or warranty is provided by either the Company or Parent as to any particular tax consequences associated with any item of compensation or benefits.

21.          Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas without giving effect to principles of conflicts of laws that would apply the laws of another jurisdiction.  All claims arising out of or relating to this Agreement shall be heard and determined exclusively in any federal or state court sitting in Harris County, Texas. Consistent with the preceding sentence, the Parties irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, any claim that it is not subject personally to the jurisdiction of the aforementioned courts, that its property is exempt or immune from attachment or execution, that the claim is brought in an inconvenient forum, that the venue of the claim is improper, or that this Agreement or the transactions contemplated by this Agreement may not be enforced in or by any of the aforementioned courts.

22.          Employee’s Representations and Warranties. EXECUTIVE UNDERSTANDS ALL OF THE TERMS OF THIS "AT WILL" EMPLOYMENT AGREEMENT AND HAS REVIEWED THIS AGREEMENT FULLY AND IN DETAIL PRIOR TO AGREEING TO EACH AND ALL OF THE PROVISIONS HEREOF and no statement, representation, promise, or inducement has been made to Executive, in connection with the terms of this Agreement, the execution hereof or otherwise, except as is expressly set forth in this Agreement.

23.          Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

[SIGNATURES ON NEXT PAGE]

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement this 24 day of June 2022.

EXHIBIT A

GENERAL RELEASE OF ALL CLAIMS

This General Release of All Claims is made as of __________(“General Release”), by and between ______________ (“Executive”) and Epsilon Energy USA Inc. (the “Company”).

WHEREAS, the Company and Executive are parties to an Employment Agreement dated as of June [ ], 2022 (the “Employment Agreement”);

WHEREAS, [the Executive has terminated employment with the Company for Good Reason under the Employment Agreement] [the Company has terminated Executive’s employment with the Company without Cause under the Employment Agreement];

WHEREAS, the execution of this General Release is a condition precedent to the payment of severance benefits under the Employment Agreement;

WHEREAS, in consideration for Executive’s signing of this General Release, the Company will make payments to Executive pursuant to [Section 5] [Section [6] of the Employment Agreement; and

WHEREAS, Executive and the Company intend that this General Release satisfies the obligation to provide a Release under the Employment Agreement.

NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements herein contained, the Company and Executive agree as follows:

1.            Executive, for himself, Executive’s spouse, heirs, administrators, children, representatives, executors, successors, assigns, and all other persons claiming through Executive, if any (collectively, “Releasers”), does hereby release, waive, and forever discharge the Company and each of its respective agents, subsidiaries, parents, affiliates, related organizations, employees, officers, directors, attorneys, successors, and assigns (collectively, the “Releasees”) from, and does fully waive any obligations of Releasees to Releasers for, any and all liability, actions, charges, causes of action, demands, damages, or claims for relief, remuneration, sums of money, accounts or expenses (including attorneys’ fees and costs) of any kind whatsoever, whether known or unknown or contingent or absolute, which heretofore has been or which hereafter may be suffered or sustained, directly or indirectly, by Releasers in consequence of, arising out of, or in any way relating to: (a) Executive’s employment with the Company or any of its subsidiaries or affiliates; (b) the termination of Executive’s employment with the Company and any of its subsidiaries or affiliates; (c) the Employment Agreement; or (d) any and all events occurring on or prior to the date of this General Release. The foregoing release, discharge and waiver includes, but is not limited to, all claims and any obligations or causes of action arising from such claims, under common law including wrongful or retaliatory discharge, breach of contract (including but not limited to any claims under the Employment Agreement and any claims under any equity incentive arrangements between Executive, on the one hand, and the Company or any of its subsidiaries or affiliates, on the other hand) and any action arising in tort including libel, slander, defamation or intentional infliction of emotional distress, and claims under any federal, state or local statute including the Age Discrimination in Employment Act (“ADEA”), Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866 and 1871 (42 U.S.C. § 1981), the National Labor Relations Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, the Americans with Disabilities Act of 1990, the Rehabilitation Act of 1973, or the discrimination or employment laws of any state or municipality, any claims as a stockholder of the Company (including but not limited to any breach of fiduciary duty claims) and/or any claims under any express or implied contract which Releasers may claim existed with Releasees. This also includes a release of any claims for wrongful discharge and all claims for alleged physical or personal injury, emotional distress relating to or arising out of Executive’s employment with the Company or any of its subsidiaries or affiliates or the termination of that employment; and any claims under the WARN Act or any similar law, which requires, among other things, that advance notice be given of certain work force reductions. Nothing in this Section 1 shall be deemed to operate or shall operate as a release, settlement or discharge of any (i) obligation, undertaking, or commitment by the Company under the Employment Agreement that survives the termination of Executive’s employment with the Company; (ii) any right to indemnification, defense, and advancement of expenses now existing under the Company’s (or its parent, subsidiary, affiliated companies, and their successors’) certificates of formation, articles of incorporation, bylaws, and other Company policies of indemnification or under any insurance policies available to the Company (or its parent, subsidiary, affiliated companies, and their successors) or Executive; (iii) any rights to the receipt of Executive’s employee benefits that were accrued and vested on or prior to the date of this General Release; and (0v) the right to receive payments under [Section 5] [Section 6] of the Employment Agreement.

2.            Excluded from this General Release and waiver are any claims which cannot be waived by law, including but not limited to the right to file a charge with a government agency or participate in an investigation conducted by certain government agencies. Executive does, however, waive Executive’s right to any monetary recovery should any agency (such as the Equal Employment Opportunity Commission) pursue any claims on Executive’s behalf. Executive represents and warrants that Executive has not filed any complaint, charge, or lawsuit against the Releasees with any government agency or any court. The Company represents and warrants that neither it, nor any of its parent, subsidiary, and affiliated companies, have filed any complaint, charge, or lawsuit against Executive Releasees with any government agency or court.

3.            Executive agrees never to seek personal recovery from Releasees in any forum for any claim covered by the above waiver and release language, except that Executive may bring a claim under the ADEA to challenge this General Release. If Executive violates this General Release by suing Releasees, other than under the ADEA or as otherwise set forth in Section 1 hereof, Executive shall be liable to the Company for its reasonable attorneys’ fees and other litigation costs incurred in defending against such a suit. Nothing in this General Release is intended to reflect any party’s belief that Executive’s waiver of claims under ADEA is invalid or unenforceable, it being the intent of the parties that such claims are waived.

4.            Executive acknowledges and agrees that Executive shall continue to be bound by the Continuing Obligations set forth and described in Section 7 of the Employment Agreement, including the Restrictive Covenants Agreement (as defined in the Employment Agreement). The Company acknowledges and agrees that the Company shall continue to be bound by the provisions of the Employment Agreement that survive the termination of Executive’s employment with the Company. Executive understands that notwithstanding any other provision of the Employment Agreement and this General Release, nothing contained in the Employment Agreement or this General Release limits Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (collectively, “Government Agencies”), or prevents the Executive from providing truthful testimony in response to a lawfully issued subpoena or court order. Further, nothing in the Employment Agreement or this General Release shall (a) prohibit the Executive from making reports of possible violations of federal law or regulation to any Government Agencies, including but not limited to the Securities and Exchange Commission, in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934, as amended, or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of federal law or regulation, or (b) require notification or prior approval by the Company of any such report; provided that the Executive is not authorized to disclose communications with counsel that were made for the purpose of receiving legal advice or that contain legal advice or that are protected by the attorney work product or similar privilege. Further, the Employment Agreement and this General Release do not limit the Executive’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. The Employment Agreement and this General Release do not limit Executive’s right to seek an award pursuant to Section 21F of the Securities Exchange Act of 1934. In addition, for the avoidance of doubt, pursuant to the federal Defend Trade Secrets Act of 2016, Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (x) is made (i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

5.            Executive agrees that Executive shall not issue, circulate, publish or utter any false or disparaging statement or remarks about the Releasees unless giving truthful testimony under subpoena or court order. Notwithstanding anything to the contrary in this Release, Executive may provide truthful information to any governmental agency or self-regulatory organization with or without subpoena or court order.

6.            Executive agrees that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed or construed at any time to be an admission by the Company, any Releasee or Executive of any improper or unlawful conduct.

8.            This General Release shall be governed by the internal laws (and not the choice of laws) of the State of Texas, except for the application of pre-emptive Federal law.

9.            Executive shall have 7 days from the date he executes this General Release to revoke his waiver of any ADEA claims by providing written notice of the revocation to the Company. The Company represents and warrants that the individual signing this General Release has the full authority and right to execute it upon its behalf.

10.          Defined terms not defined in this General Release have the meanings given in the Employment Agreement.

PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

EXECUTIVE:

____________________________________ Date: ____________________

1 In the event the Company determines that Executive’s termination constitutes “an exit incentive or other employment termination program offered to a group or class of employees” under the ADEA, the Company will provide Executive with: (1) 45 days to consider the General Release; and (2) the disclosure schedules required for an effective release under the ADEA.

Exhibit 10.3

June 23, 2022

Mr. B. Lane Bond
9844 Cypresswood Dr., #1801
Houston, TX 77070

Dear Lane:

This Retirement and Consulting Letter Agreement (this “Agreement”) sets forth our agreement regarding your retirement from Epsilon Energy USA, Inc. (“Epsilon USA”) and Epsilon Energy Ltd. and their related subsidiaries and affiliated entities (collectively, the “Company”), effective June 30, 2022, and service as a consultant thereafter to the Company until March 31, 2023, or such earlier date as may be determined under Section 4 below.

1.             RETIREMENT. You agree that your last day of employment with the Company will be June 30, 2022 (the “Retirement Date”),  and you hereby resign, effective as of the Retirement Date, from your positions at the Company, including but not limited to Chief Financial Officer of the Company and all other offices and directorships you hold with the Company or any subsidiary or affiliate thereof without further action on either your part or by the relevant entity. You agree to execute and deliver any documents reasonably necessary to effectuate such resignations, and hereby irrevocably appoint Andrew Williamson, who has been approved to serve as the chief financial officer of the Company (“CFO”) effective July 1, 2022, with the power to act as your attorney-in-fact to execute any such documents and do anything in your name to affect such resignations.

2.             TERMINATION OF OFFER LETTER. By signing this Agreement, you acknowledge and agree that the offer letter between you and Epsilon USA dated September 1, 2013 (the “Offer Letter”) is hereby terminated and cancelled. You further release and discharge the Company and its affiliates from any and all obligations and liabilities, whether fixed or contingent, under or by virtue of the Offer Letter.

3.             TERMINATION PAYMENTS. In consideration of the covenants and releases contained in this Agreement, your consulting services to the Company, and in lieu of any other payments which may be due under the Offer Letter or otherwise, Epsilon USA agrees to provide you with the following termination payments:

You and the Company agree that the obligation of the Company to provide you with accelerated vesting of the RSUs, the Pro-Rata 2022 Bonus and the Supplemental Lump Sum is conditioned on and subject to your execution of a release substantially in the form attached hereto as Exhibit B (the “Release”) as of the Release Effective Date.

The obligation of the Company to pay any and all amounts under this Section 3 (other than the Accrued Benefits) on and after the Retirement Date shall be contingent upon you (i) entering into a written agreement with the Company (in the form attached hereto as Exhibit B) in which Executive agrees to a general release of any claims against the Company and its affiliates (the “Release Agreement”) on or within twenty-one days after employment termination (or such longer period of time as required under applicable law to have a binding release of one or more claims) that has become irrevocable (such date on which such release agreement becomes irrevocable, the “Release Effective Date”) and (b) complying with the confidentiality and non-disparagement provisions in Section 6 and Section 7 below. For avoidance of doubt, all rights to receive or continue to receive the payments and benefits referred to in Section 3 (other than the Accrued Benefits) shall cease if you do not enter into the Release Agreement, revoke the Release Agreement or materially breach any of the covenants referred to in this Section 3. The form of general release to be signed by you pursuant to this Section 3 shall in no way prohibit you from reporting possible violations of law to any governmental agency or entity in accordance with applicable whistleblower protection provisions including, without limitation, the rules promulgated under Section 21F of the Exchange Act or Section 806 of the Sarbanes-Oxley Act of 2002 or require you to notify the Company (or obtain its prior approval) of any such reporting.

4.             CONSULTING SERVICES. From July 1, 2022 through March 31, 2023, but in no event prior to the filing of SEC Form 10-K for the 2022 fiscal year by Epsilon Energy Ltd. (the “Consulting Term”), you agree to assist the CFO in order to affect an orderly, smooth and efficient transition of your former duties as Mr. Williamson may reasonably request as CFO during the Consulting Term, including consulting on matters that arose while serving the Company on or prior to the Retirement Date and providing information regarding the Company’s operations, practices and policies. You shall provide customary and reasonable certifications and representations in connection with the filing of the Company’s annual and periodic reports with the Securities and Exchange Commission, as well as the completion of the external audit reviews of the Company’s financial statements and internal controls, regarding any period in which you were employed by the Company consistent with applicable law and as reasonably requested by the CFO, including but not limited to your knowledge of any material misstatements or omissions of material fact, ineffective disclosure controls or procedures, internal control weaknesses, practices or policies inconsistent with Generally Accepted Accounting Principles, or material violations of law that have not been previously disclosed to the Company’s Audit Committee. You agree to render up to 30 hours of service for the month of July 2022 and up to 10 hours of service per calendar month during the remainder Consulting Term, as may be requested by the CFO. During the Consulting Term, the Company shall pay you a fee of $16,666.67 per calendar month, payable within five business days after the end of each month (the “Consulting Fee”). Further, you shall be entitled to reimbursement for all reasonable expenses incurred by you in the performance of consulting services hereunder, in accordance with the policies of the Company, including monthly cellphone expenses.

5.             INDEPENDENT CONTRACTOR STATUS. Your status during the Consulting Term shall be that of an independent contractor and not, for any purpose, that of an employee or agent with authority to bind the Company in any respect. You shall not have the right (express or implied) to act on behalf of the Company or its affiliates. The parties intend that the services provided by you during the Consulting Term will result in you having a “separation from service” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) as of July 31, 2022. All payments and other consideration made or provided to you under Section 4 of this Agreement shall be made or provided without withholding or deduction of any kind, and you shall assume sole responsibility for discharging all tax or other obligations associated therewith. All other payments described in this Agreement will be subject to applicable tax withholding. In your capacity as a consultant to the Company, you shall not be entitled to any benefits, coverages or privileges, including, without limitation, social security, unemployment, medical, requirement or equity compensation awards, made available to active employees of the Company.

7.             NON-DISPARAGEMENT. You agree not to make statements to clients, customers and suppliers of the Company (or any of its affiliates) or to other members of the public, the media or the investment community that are in any way disparaging or negative towards the Company, any of its affiliates, or the products, services, representatives or employees of any of the foregoing. The Company agrees to instruct its directors and executive officers to not make statements to clients, customers and suppliers of the Company (or any of its affiliates) or to other members of the public, the media or the investment community that are in any way disparaging or negative towards you. This Section 7 does not, in any way, restrict or impede either party from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order. You shall promptly provide written notice of any such order to the Board.

8.             RETURN OF COMPANY PROPERTY AND RECORDS. You agree that on or before the Retirement Date you will surrender to the Company in good condition (reasonable wear and tear excepted) all property and equipment belonging to the Company and all records kept by you containing any proprietary or confidential information of the Company or any operational, financial or other documents given to you during your employment with the Company. Notwithstanding the foregoing, you shall be permitted to keep any Company provided phone that may have been provided to you during your employment if it is appropriately wiped clean of any proprietary or confidential data or information pertaining to the Company or its business.

9.             EQUITABLE RELIEF AND OTHER REMEDIES. You and the Company acknowledge and agree that the other party’s remedies at law for a breach or threatened breach of any of the provisions of Sections 6 through 8 of this Agreement would be inadequate and, in recognition of this fact, the parties agree that, in the event of such a breach or threatened breach, in addition to any remedies at law, the other party, without posting any bond, shall be entitled to seek equitable relief in the form of specific performance, temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available.

10.           SECTION 409A. The intent of the parties is that payments and benefits under this Agreement be exempt from or comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), to the extent subject thereto, and accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered in accordance with such intention. Notwithstanding anything contained herein to the contrary, you shall not be considered to have terminated employment with the Company for purposes of any payments under this Agreement which are subject to Section 409A until Executive would be considered to have incurred a “separation from service” from the Company within the meaning of Section 409A. Each amount to be paid or benefit to be provided under this Agreement shall be construed as a separate identified payment for purposes of Section 409A. The Company makes no representation that any or all of the payments described in this Agreement shall be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to any such payment. The Executive shall be solely responsible for the payment of any taxes and penalties incurred under Section 409A.

11.           SECTION HEADINGS; INCONSISTENCY. The section headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement. If there is any inconsistency between this Agreement and any other agreement (including but not limited to any option, stock, long-term incentive or other equity award agreement), plan, program, policy or practice (collectively, “Other Provision”) of the Company, the terms of this Letter Agreement shall control over such Other Provision; provided, however, that nothing in this Letter Agreement shall adversely affect your entitlement to the Accrued Amounts.

12.           NO ASSIGNMENT. This Agreement is personal to each of the parties hereto. No party may assign or delegate any rights or obligations hereunder without first obtaining the written consent of the other party hereto, except that the Company may assign this Agreement to any successor to all or substantially all of the business and/or assets of the Company provided the Company shall require such successor to expressly assume and agree in writing to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place and shall deliver a copy of such assignment to you.

13.           SEVERABILITY. The provisions of this Agreement shall be deemed severable and the invalidity of unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

14.           COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instruments. One or more counterparts of this Agreement may be delivered by facsimile, with the intention that delivery by such means shall have the same effect as delivery of an original counterpart thereof.

15.           MISCELLANEOUS. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by you and such officer or director as may be designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement together with all exhibits hereto sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Texas without regard to its conflicts of law principles.

16.           REPRESENTATIONS. You represent and warrant to the Company that you have the legal right to enter into this Letter Agreement and to perform all of the obligations on your part to be performed hereunder in accordance with its terms and that you are not a party to any agreement or understanding, written or oral, which could prevent you from entering into this Letter Agreement or performing all of your obligations hereunder.

If you agree with the terms as contained in this letter, please confirm your acceptance of same by signing below and returning this letter to me.

Acknowledged and Agreed 

as of the first date written above

 /s/ B. Lane Bond

B. Lane Bond

EXHIBIT A

RESTRICTED STOCK UNITS

EXHIBIT B

RELEASE AGREEMENT

1.            I, B. Lane Bond, have served as Chief Financial Officer (“CFO”) of Epsilon Energy USA, Inc. (“Epsilon USA”) and Epsilon Energy Ltd. (“Parent”). Epsilon USA and I entered the Retirement and Consulting Agreement dated as of June [__], 2022 (the “Retirement Agreement”). I will cease to serve as CFO of Epsilon USA and Parent and as a member of the board of directors of any of their subsidiaries as of June 30, 2022 (the “Separation Date”).

2.            I agree to the terms, commitments, covenants, conditions and general release of claims contained in this Release Agreement (this “Agreement”), in consideration for the compensation set forth in Section 3 of the Retirement Agreement. I understand this Agreement must be returned to Epsilon USA no later than 45 calendar days after the day I received this Agreement and this Agreement may be revoked by written notice to the Company for 7 days after it is signed. Epsilon USA has advised me to consult with an attorney prior to signing this Agreement.

3.            I acknowledge and agree that other than as specifically set forth in the Retirement Agreement, following the Separation Date, I am not and will not be due any additional compensation and will not be eligible to earn or accrue additional benefits under the benefit plans of Epsilon USA after the Separation Date. My participation (if any) in any of the compensation or benefit plans of Epsilon USA as of and after the Separation Date shall be subject to and determined in accordance with the terms and conditions of such plans as they may be amended from time to time.

4.            I, on behalf of myself, my heirs, administrators, representatives, executors, successors, and assigns, hereby irrevocably and unconditionally release, acquit, and forever discharge Epsilon USA and Parent and each of their respective predecessors, parents, subsidiaries, affiliates, divisions, any related entity, successors and assigns, and all of their current and former agents, officers, directors, shareholders, employees, members, trustees, fiduciaries, representatives, attorneys and all persons acting by, through, under or in concert with any of them (the “Released Parties”) from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, damages, causes of action, suits, demands, losses, debts, and expenses of any nature whatsoever, known or unknown (“Claims”) which I have, had or claim to have against any Released Party up to and including the date I sign this Agreement. This general release of Claims shall include, without limitation, Claims relating to my employment and retirement from employment with Epsilon USA, Claims of discrimination under the common law or any federal or state statute (including, without limitation, the Civil Rights Act of 1964, the Americans with Disabilities Act and the Age Discrimination in Employment Act, all as amended), Claims for wrongful discharge, Claims for the payment of any salary, wages, bonuses, commissions, vacation pay, severance pay or benefits, Claims of detrimental reliance, and all other statutory, common law or other Claims of any nature whatsoever, to the extent permitted by law. This general release of Claims does not apply to any Claims concerning a breach of the Retirement Agreement, claims for indemnification, claims for Accrued Benefits (as defined in the Retirement Agreement) or any claims arising after the date I sign this Agreement. With respect to the Claims I am waiving herein, I acknowledge that I am waiving my right to receive money or any other relief in any action instituted by me or on my behalf by any other person, entity or government agency.

5.            To the maximum extent permitted by law, I covenant not to sue or to institute or cause to be instituted any action in any federal, state, or local agency or in court against any of the Released Parties, including, without limitation, any of the Claims released by this Agreement. Notwithstanding the foregoing, nothing herein shall prevent me or any of the Released Parties from filing a charge with an administrative agency related to the validity of this Agreement, from instituting any action required to enforce the terms of this Agreement, or from challenging whether the release outlined in Section 5 above is knowing and voluntary. However, I may not recover monetary damages resulting from any charge filed with an administrative agency related to the validity of this Agreement. In addition, nothing herein shall be construed to prevent me from enforcing any rights I may have to recover vested benefits under the Employee Retirement Income Security Act of 1974, as amended.

6.            I understand that notwithstanding any other provision of this Agreement, nothing contained in this Agreement limits my ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (collectively, “Government Agencies”), or prevents me from providing truthful testimony in response to a lawfully issued subpoena or court order. Further, nothing in this Agreement shall (1) prohibit me from making reports of possible violations of federal law or regulation to any Government Agencies, including but not limited to the Securities and Exchange Commission, in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934, as amended, or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of federal law or regulation, or (2) require notification or prior approval by Epsilon USA or Parent of any such report; provided that I am not authorized to disclose communications with counsel that were made for the purpose of receiving legal advice or that contain legal advice or that are protected by the attorney work product or similar privilege. Further, this Agreement does not limit my ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to Epsilon USA. This Agreement does not limit my right to seek an award pursuant to Section 21F of the Securities Exchange Act of 1934. In addition, for the avoidance of doubt, pursuant to the federal Defend Trade Secrets Act of 2016, I shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (x) is made (i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

7.            I acknowledge by signing this Agreement that I have read and understand this document, that I have conferred with or had opportunity to confer with my attorney regarding the terms and meaning of this Agreement, that I have had sufficient time to consider the terms provided for in this Agreement, that no representations or inducements have been made to me except as set forth in this Agreement, and that I have signed the same KNOWINGLY AND VOLUNTARILY.

8.            If any one or more of the provisions of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby. Moreover, if any one or more of the provisions contained in this Agreement are held to be excessively broad as to duration, scope, activity or subject, such provisions will be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law.

Exhibit 10.4

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of June 23, 2022 by and among Epsilon Energy USA Inc. (the “Company” or “Epsilon”), a wholly owned subsidiary of Epsilon Energy Ltd. (“Parent”), and Andrew Williamson (the “Executive” and, together with the Company, the “Parties”) with reference to the following:

WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company pursuant to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth in this Agreement, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:

1.            Employment and Duties. Executive shall commence employment with the Company on July 1, 2022 or such other date as mutually agreed to by the parties (the “Effective Date”). Executive shall be employed by the Company and serve as the Chief Financial Officer for the Company and the Parent. Executive shall report directly to the Chief Executive Officer (“CEO”). Executive shall have such duties and responsibilities, commensurate with Executive’s position, as may be reasonably assigned to Executive from time to time by the CEO. Executive’s duties under this Agreement shall further include the following: (i) Executive shall devote Executive’s full business time, best efforts, and attention to rendering his duties to the Company; and (ii) Executive shall use good faith efforts to perform all services under this Agreement in accordance with all applicable federal, state, and local laws and regulations and all requirements of all applicable regulatory, self-regulatory, and administrative bodies, and, Executive shall follow and comply with the rules, regulations, policies, and guidelines adopted from time to time by the Parent and the Company that apply to executive officers, each as in effect from time to time. Executive’s principal place of employment shall be in the greater Houston, Texas metropolitan area.

2.            At Will Employment. Executive’s employment with the Company is an at-will employee and nothing in this Agreement shall be interpreted or construed to alter this status, or to confer upon Executive any right with respect to continuance of employment by the Company for any specified duration or by any of its affiliates, nor interfere in any way with the right of the Company to terminate Executive’s employment at any time. This Agreement commences upon the Effective Date and terminates upon the termination (the “Date of Termination”) of Executive’s employment with the Company and its subsidiaries (the “Employment Period”). The termination of Executive’s employment shall not affect any of the obligations that expressly extend beyond continued employment, including the Continuing Obligations set forth in Section 7 of this Agreement.

3.            Compensation and Benefits. Subject to the provisions of this Agreement, the Company shall pay and provide the following compensation and other benefits to Executive during the Employment Period as compensation for services rendered hereunder:

(a)          Base Salary. The Company shall pay to Executive an annual salary of $230,000 (the “Base Salary”) in substantially equal monthly installments in accordance with the Company’s then-current payroll practices as established, and as may be modified, from time to time. For the avoidance of doubt, the term “Base Salary” as used in this Agreement shall not be deemed to include any of the additional benefits or amounts outlined in Sections 3(b)-(f) hereof. The Company shall have the right, but not the obligation, to increase Executive’s Base Salary from time to time.

(b)          Annual Bonus. In addition to the Base Salary, Executive shall be eligible to receive an annual incentive bonus (the “Annual Bonus”) targeted at $150,000 (the “Target Bonus”) for achieving performance goals established by the Compensation Committee of the Parent’s Board of Directors (the “Committee”) in its sole discretion (the “Performance Goals”) for the then current calendar year. It is anticipated that, for any given year, the amount of the Annual Bonus could range from 0% of Target Bonus (in the event of a failure to achieve any of the Performance Goals), to 100% of Target Bonus (in the event of achievement of the Performance Goals at target), to between 100% and 150% of Target Bonus (in the event that a substantial number of the Performance Goals are significantly exceeded). The determination of whether Executive has achieved or significantly exceeded the Performance Goals shall be in the Committee’s reasonable discretion. The Committee may in its discretion determine that the Performance Goals on balance as a whole have been met notwithstanding the fact that certain of the Performance Goals may not have been met if other Performance Goals are exceeded. All Performance Goals may be adjusted in the discretion of the Committee as it deems appropriate (i) to exclude the effect of extraordinary, unusual and/or non-recurring items, discontinued operations and accounting charges and (ii) to reflect such other facts as the Committee deems appropriate so as to reflect the Performance Goals and not distort the calculation of the Performance Goals. The Annual Bonus, if earned, shall be paid on or about the March 15^th immediately following the performance year, provided Executive is employed on such date, or any earlier date approved by the Compensation Committee for executive officer bonuses. For the period from the Effective Date through December 31, 2022, Executive’s Target Bonus shall be prorated to reflect the date on which Executive commences employment with the Company under this Agreement.

(c)          Equity Award. On the Effective Date, Executive shall receive restricted stock units (“RSUs”) with a grant date value of $250,000, based on the closing price of the Company’s common stock on such date. The RSUs will be granted under, and subject to, the terms of the Epsilon Energy Ltd. 2020 Equity Incentive Plan (the “Plan”) and an award agreement issued to Executive under the Plan. The RSUs shall vest over a four year period beginning on the Effective Date as follows: twenty-five percent (25%) of the RSUs on the first anniversary of the Effective Date, and an additional 6.25% of the RSUs vesting on the first day of each subsequent quarter, with full vesting on July 1, 2026, provided that Executive is employed by the Company on each such vesting date. All outstanding RSUs shall vest at target upon a Change in Control, as defined in the Plan, provided Executive then remains employed by the Company. Executive shall be eligible to receive an annual equity award under the Plan on such terms and conditions as determined in the discretion of the Compensation Committee of the Board.

(d)            Expenses. The Company will reimburse Executive for all reasonable and necessary business expenses incurred by Executive in the performance of his duties under this Agreement, subject to any maximum annual limit and other restrictions on such expenses set by the Company, and also subject to submission of such reasonable substantiation and documentation as may be required from time to time. Executive’s right to payment or reimbursement for business expenses hereunder shall further be subject to the following additional rules: (i) the amount of expenses eligible for payment or reimbursement during any calendar year shall not affect the expenses eligible for payment or reimbursement in any other calendar year; (ii) payment or reimbursement shall be made upon or as soon as practicable after submission of such substantiation or documentation, and in any event, not later than December 31st of the calendar year following the calendar year in which the expense or payment was incurred; and (iii) the right to payment or reimbursement is not subject to liquidation or exchange for any other benefit.

(e)            Vacation Policy. Executive shall be entitled to participate in a flexible vacation policy, which policy is based on mutual trust between the Company and Executive and allows Executive the opportunity to work or take time off as Executive sees fit, as long as he fulfills the duties and responsibilities set forth herein. Executive does not accrue time off so the Company will not pay out unused time upon resignation or termination of employment. This policy does not interfere or change eligibility for legally established leaves.

(f)            Executive Benefits. Executive shall be entitled to participate in all applicable Company benefit plans, programs, or arrangements that the Company may offer to its executives generally, from time to time, and as may be amended from time to time. Participation will be subject to the terms of the applicable plan documents and generally applicable Company policies, as may be in effect from time to time, and any other restrictions or limitations imposed by law. During the Employment Period, the Company will purchase and maintain, at its own expense, directors’ and officers’ liability insurance providing coverage to Executive on terms equivalent to those provided to other executive officers and members of the Parent’s Board of Directors (the “Board”).

(g)            Accrued Obligations. If Executive’s employment with the Company is terminated for any reason, the Company shall pay or provide to the Executive (or to the Executive’s authorized representative or estate) (i) any Base Salary earned through the Date of Termination; (ii) unpaid expense reimbursements (subject to, and in accordance with, Section 3(d) of this Agreement); and (iii) any then vested benefits Executive may have under any employee benefit plan or compensation arrangement of the Parent or the Company (including equity compensation plans and insurance coverages) through the Date of Termination, which vested benefits shall be paid and/or provided in accordance with the terms of such employee benefit plans. In the event that the Executive terminates employment due to death or disability, Executive (or in the case of death, the Executive’s estate) shall be entitled to receive the Earned Bonus (as defined in Section 5(a)), if any, at the same time bonuses are paid to other employees who are actively employed by the Company. The amounts described under this Section 3(g) are referred to below as the “Accrued Obligations.”

4.            Termination of Employment Upon Executive’s Death or Disability, or by the Company for Cause, or by Executive without Good Reason.

(a)           Termination of Employment Due to Executive’s Death. If Executive’s employment with the Company terminates due to death, the Company shall pay to the estate of Executive such compensation as would otherwise have been payable to Executive (and any expense reimbursements for expenses incurred) up to the date of his death. Other than the obligations set forth in this Section 4(a), the Company shall have no additional financial obligation under this Agreement to Executive or his estate.

(b)           Termination of Employment Due to Executive’s Disability, Illness, or Incapacity. If, in the opinion of a physician selected by the Company and reasonably approved by Executive, Executive becomes physically or mentally disabled or develops an illness or incapacity during the Employment Period that renders Executive at least temporarily unable to perform (either with or without reasonable accommodation) the essential functions of his job for a period of 180 days within any continuous 12-month period, then Executive shall continue to receive the Base Salary until the end of such 180-day period, less any benefits received during the foregoing respective period by Executive under any disability insurance carried or provided by the Company. If Executive’s employment is terminated due to a permanent disability, as reasonably determined by the Company in accordance with applicable law, then the Company shall pay to Executive such compensation as would otherwise have been payable to Executive (and any expense reimbursements for expenses incurred) up to the end of the month in which Executive’s employment is terminated, and the Company shall have no additional obligation under this Agreement to Executive. The Company is not obligated to, but may, carry disability insurance for its employees.

(c)           Termination of Employment by the Company for Cause, or by Executive without Good Reason. If the Company terminates the employment of Executive for Cause (defined below), then the Company shall pay to Executive compensation earned by Executive (and any expense reimbursements for expenses incurred) up to the Date of Termination, and no other compensation, bonus, or other amount shall be due and owing to Executive. Executive may terminate Executive’s employment hereunder voluntarily and without Good Reason (defined below) upon giving at least 30 days’ prior written notice to the Company. If Executive terminates Executive’s employment voluntarily and without Good Reason, then the Company shall pay to Executive compensation earned by Executive up to Date of Termination, and no other compensation, bonus, or other amount shall be due and owing to Executive.

(1)            For purposes of this Agreement, the term “Good Reason” shall mean without Executive’s prior written consent: (i) a material diminution in the nature or scope of Executive’s authority, duties, responsibilities, or title from those applicable to Executive as of the Effective Date; (ii) a relocation of Executive’s principal worksite that increases Executive’s one-way commute by more than 30 miles; or (iii) a material breach by the Company of any term or provision of this Agreement. Notwithstanding anything in this Section 4(c)(1) to the contrary, no event or condition described in this Section shall constitute Good Reason unless: (x) within 90 days from Executive first acquiring actual knowledge of the existence of the Good Reason condition described in this Section, Executive provides the Company written notice of Executive’s intention to terminate Executive’s employment for Good Reason and the grounds for such termination; (y) such grounds for termination (if susceptible to correction) are not corrected by the Company as soon as reasonably practicable, but in any case within 30 days of the Company’s receipt of such notice (or, in the event that all such grounds cannot be corrected within such 30-day period, the Company has substantially corrected such grounds within such 30-day period and is making correction as soon as reasonably practicable); and (z) Executive terminates Executive’s employment with the Company immediately following expiration of such 30-day period.

(2)            For purposes of this Agreement, the term “Cause” shall mean a termination by the Company of Executive’s employment because of: (i) any act or omission that constitutes an intentional and material breach by Executive of any of Executive’s obligations under this Agreement; (ii) Executive’s conviction of, or plea of nolo contendere to, any felony or another crime involving dishonesty; (iii) Executive willfully engaging in any misconduct, negligence, act of dishonesty, violence or threat of violence (including any violation of federal securities laws) that is materially injurious to the Company or any of its parents, subsidiaries, or affiliates; (iv) Executive’s intentional and material breach of a known written policy of the Company or the rules of any governmental or regulatory body applicable to the Company that is or could reasonably be materially injurious to the Company; (v) Executive’s repeated refusal to follow the lawful directions of the Company that are consistent with Executive’s duties and responsibilities under this Agreement; or (vi) any other willful misconduct by Executive that is materially injurious to the financial condition or business reputation of the Company or any of its parents, subsidiaries, or affiliates.

5.            Termination of Employment by Executive for Good Reason, or by the Company Without Cause. If Executive’s employment is terminated by the Company without Cause (and not for death or disability) or Executive terminates employment for Good Reason, then, in addition to the Accrued Obligations, and subject to (i) Executive signing a separation agreement and release substantially in the form attached hereto as Exhibit A (the “Separation Agreement”), which provides that if Executive materially breaches any of the Continuing Obligations (as defined in Section 7 below), all payments of the Severance Amount shall immediately cease, (ii) the Separation Agreement becoming irrevocable, and (iii) Executive not being eligible for benefits due to a qualifying termination during the Change in Control Period under Section 6 below:

(a)           Cash Severance. The Company shall pay Executive an amount equal to (i) twenty-four (24) months of Executive’s Base Salary, plus (ii) an amount equal to Executive’s then current Target Bonus or Target Bonus for the prior year if higher, pro rated for the number of complete or partial months of employment during the then-current year (the “Severance Amount”), and, (iii) in the event that Executive’s employment is terminated after the end of the calendar year but prior to the payment of any Annual Bonus for the immediately preceding calendar year, Executive shall be entitled to receive a lump sum payment of any unpaid Annual Bonus earned based on achievement of Performance Goals, without any reduction for individual performance, with respect to such immediately preceding calendar year (the “Earned Bonus”).

(b)           Accelerated Vesting of Equity Awards. Notwithstanding anything to the contrary in any equity award under the Plan or otherwise, any time-based equity awards shall immediately accelerate and become fully vested and exercisable or nonforfeitable upon the Date of Termination and any employment or service based requirement under any performance-based equity award shall be fully waived, with payment to be made based on the achievement of the Company’s actual performance during the performance period.

(c)           COBRA Premiums. Subject to Executive’s copayment of premium amounts at the applicable active employees’ rate and Executive’s timely election to receive benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay to the group health plan provider or the COBRA provider a monthly payment equal to the monthly employer contribution that the Company would have made to provide health insurance to Executive if Executive had remained employed by the Company until the earliest of (A) the six month anniversary of the Date of Termination; (B) the date that Executive becomes eligible for group medical plan benefits under any other employer’s group medical plan; or (C) the cessation of Executive’s health continuation rights under COBRA; provided, however, that if the Company determines that it cannot pay such amounts to the group health plan provider or the COBRA provider (if applicable) without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then the Company shall convert such payments to payroll payments directly to Executive for the time period specified above. Such payments to Executive shall be subject to tax-related deductions and withholdings and paid on the Company’s regular payroll dates.

(d)           Severance Payment Timing. The amounts payable under this Section 5 (other than the Earned Bonus, as applicable), to the extent taxable, shall be paid or commence to be paid within sixty (60) days after the Date of Termination; provided, however, that if the period applicable to Executive’s termination of employment begins in one calendar year and ends in a second calendar year, such payments to the extent they qualify as “non-qualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), shall be paid or commence to be paid in the second calendar year by the last day of such period. Half of the Severance Amount shall be paid in a single lump sum, the remaining half in twelve equal monthly installments and the Earned Bonus, if any, shall be paid at the same time as if Executive had remained employed with the Company through the payment date.

6.            Severance Pay and Benefits Upon Termination by the Company without Cause or by Executive for Good Reason within the Change in Control Period. The provisions of this Section 6 shall apply in lieu of, and expressly supersede, the provisions of Section 5 if (i) Executive’s employment is terminated either by the Company without Cause or by Executive for Good Reason and (ii) the Date of Termination occurs on or within twelve months of a Change in Control (as defined under the Plan), which is referred to herein as the “Change in Control Period.” These provisions of this Section 6 shall terminate and be of no further force or effect after the end of the Change in Control Period. If Executive’s employment is terminated by the Company without Cause or Executive terminates employment for Good Reason, and in each case the Date of Termination occurs during the Change in Control Period, then, in addition to the Accrued Obligations, and subject to the signing of, and compliance with, the Separation Agreement by Executive and the Separation Agreement becoming fully effective, all within the time frame set forth in the Separation Agreement:

(a)           Cash Severance. The Company shall pay Executive a lump sum in cash in an amount equal to the sum of (A) twenty-four (24) months of Executive’s then-current Base Salary (or Executive’s Base Salary in effect immediately prior to the Change in Control, if higher), and (B) an amount equal to Executive’s Target Bonus for the then-current year (or Executive’s Target Bonus in effect immediately prior to the Change in Control, if higher), pro rated for the number of complete or partial months of employment during the then-current year, plus, if applicable, any Earned Bonus (the “Change in Control Payment”).

(b)           COBRA Premiums. The COBRA related payments described in Section 5(b) above shall be eligible to extend for twelve (12) months after the Date of Termination.

(c)           Accelerated Vesting of Equity Awards. Notwithstanding anything to the contrary in any equity award under the Plan or otherwise, any time-based equity awards shall immediately accelerate and become fully vested and exercisable or nonforfeitable upon the Date of Termination and any employment or service based requirement under any performance-based equity award shall be fully waived, with payment to be made based on the achievement of the Company’s actual performance during the performance period, as reasonably determined in the Company’s discretion.

(d)           Change in Control Payment Timing. With the exception of the payment of any performance-based equity awards, the amounts payable under this Section 6, to the extent taxable, shall be paid or commence to be paid within sixty (60) days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payments to the extent they qualify as “non-qualified deferred compensation” within the meaning of Section 409A of the Code, shall be paid or commence to be paid in the second calendar year by the last day of such 60-day period. The Change in Control Payment shall be paid in a single lump sum and the Earned Bonus, if any, shall be paid at the same time as if Executive had remained employed with the Company through the payment date.

7.            Continuing Obligations.

(a)           Restrictive Covenants Agreement. As a condition of entering into this Agreement, Executive agrees to the terms of the Employee Proprietary Information and Inventions Assignment Agreement, to be dated as of the Effective Date, between the Company and Executive (the “Restrictive Covenants Agreement”). For purposes of this Agreement, the obligations in this Section 7 and those that arise in the Restrictive Covenants Agreement and any other agreement relating to confidentiality, assignment of inventions, or other restrictive covenants that may later be agreed to by Executive shall collectively be referred to as the “Continuing Obligations.”

(b)           Third-Party Agreements and Rights. Executive hereby represents, warrants, covenants, understands and agrees that: (i) Executive is free to enter into this Agreement; (ii) Executive is not obligated or a party to any engagement, commitment or agreement with any person or entity that will, does or could conflict with or interfere with Executive’s full and faithful performance of this Agreement, nor does Executive have any commitment, engagement or agreement of any kind requiring Executive to render services or preventing or restricting Executive from rendering services or respecting the disposition of any rights or assets that Executive has or may hereafter acquire or create in connection with his services hereunder; (iii) Executive shall not intentionally use any material or content of any kind in connection with Executive’s products, software or website that is copyrighted or owned or licensed by a party other than the Company or Parent or that would or could infringe the rights of any other party; and (iv) Executive shall not intentionally use in the course of Executive’s performance under this Agreement, and shall not disclose to the Company, any confidential information belonging, in part or in whole, to any third party.

(c)           Litigation and Regulatory Cooperation. During and after Executive’s employment, Executive shall, upon Company’s request, cooperate with the Company in (i) the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while Executive was employed by the Company, and (ii) the investigation, whether internal or external, of any matters about which the Company believes Executive may have knowledge or information. Executive’s full cooperation in connection with such claims, actions or investigations shall include, but not be limited to, being available to meet with counsel upon reasonable notice to answer questions or to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after Executive’s employment, Executive also shall reasonably cooperate with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while Executive was employed by the Company. All such activities shall be scheduled, to the extent reasonably possible, to accommodate Executive’s business and personal obligations at the time. The Company shall reimburse Executive for any reasonable out of pocket expenses incurred in connection with Executive’s performance of obligations pursuant to this Section 7(c), which shall be in addition to its obligations to provide indemnification to Executive. If Executive is requested or required to provide material cooperation under this Section 7(c) more than 24 months after the Date of Termination, Employee shall be compensated at an hourly rate (based on Executive’s Base Salary as of the Date of Termination), except to the extent prohibited by applicable law.

(d)           Relief. Executive agrees that it would be difficult to measure any damages caused to the Company which might result from any breach by Executive of the Continuing Obligations, and that in any event monetary damages would be an inadequate remedy for any such breach. Accordingly, Executive agrees that if Executive breaches, or proposes to breach, any portion of the Continuing Obligations, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company.

8.             280G Limitation.

(a)           Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Code, and the applicable regulations thereunder (the “Aggregate Payments”), would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which Executive becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it would result in Executive receiving a higher After Tax Amount (as defined below) than Executive would receive if the Aggregate Payments were not subject to such reduction. In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code: (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).

(b)            For purposes of this Section 8, the “After Tax Amount” means the amount of the Aggregate Payments less all federal, state, and local income, excise and employment taxes imposed on Executive as a result of Executive’s receipt of the Aggregate Payments. For purposes of determining the After Tax Amount, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

(c)            For purposes of determining whether and the extent to which the Aggregate Payments will be subject to the excise tax, (i) no portion of the Aggregate Payments the receipt or enjoyment of which Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken into account, (ii) no portion of the Aggregate Payments shall be taken into account which, in the written opinion of independent auditors or advisors of nationally recognized standing (“Independent Advisors”) selected by the Company prior to a Change in Control, does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the excise tax, no portion of such Aggregate Payments shall be taken into account which, in the opinion of Independent Advisors, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as defined in Section 280G(b)(3) of the Code) allocable to such reasonable compensation, and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Aggregate Payments shall be determined by the Independent Advisors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. The Independent Advisors shall provide detailed supporting calculations both to the Company and Executive within fifteen (15) business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or Executive. Any determination by the Independent Advisors shall be binding upon the Parties.

9.             Section 409A.

(a)            Anything in this Agreement to the contrary notwithstanding, if at the time of Executive’s separation from service within the meaning of Section 409A of the Code, the Company determines that Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that Executive becomes entitled to under this Agreement or otherwise on account of Executive’s separation from service would be considered deferred compensation otherwise subject to the 20% additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six (6) months and one day after Executive’s separation from service, or (B) Executive’s death. If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the 6-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.

(b)            All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by Executive during the time periods set forth in this Agreement. All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses). Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

(c)            To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon Executive’s termination of employment, then such payments or benefits shall be payable only upon Executive’s “separation from service.” The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

(d)            The parties intend that this Agreement will be administered in a manner not intended to violate Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). Any such payment that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral (each as described in Treasury regulations issued under Section 409A) shall be excluded from Section 409A to the greatest extent possible.

(e)            The Company makes no representation or warranty and shall have no liability to Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, Section 409A.

10.            Recoupment. Executive shall be required to repay incentive pay to the Company as described in this Section 10, and the Company may offset payments otherwise due and payable under this Agreement by the amounts required to be repaid under this Section 10. Repayment of incentive pay shall be required if, and to the extent that, the Committee determines, in its sole discretion, that repayment is due on account of a restatement of the Parent’s financial statements or otherwise pursuant to any clawback or compensation recoupment policy as may be in effect or amended from time to time (the “Recoupment Policy”). Where the result of a performance measure was a factor in determining the compensation awarded or paid, but (i) the subsequently-restated performance measure was not the only factor used to determine the compensation awarded or paid, or (ii) the incentive-based compensation is not awarded or paid on a formulaic basis, the Committee will determine in its sole discretion the amount, if any, by which the payment or award should be reduced. If the Committee seeks to recover payment of incentive pay as a result of a restatement of the Company’s financial statements or otherwise under the Recoupment Policy, Executive shall pay to the Company, as applicable, (A) all or a portion (as determined by the Committee in its reasonable discretion) of the amount by which the payment received by Executive exceeds the amount that would have been paid to Executive based on the restated financial statements, or (B) the amount (as determined by the Committee in its reasonable discretion) to be repaid pursuant to the Recoupment Policy. Nothing in this Section 10 shall preclude the Company, the Parent or any other person from taking any other action.

11.            No Mitigation; Offset. In the event of any termination of employment and service hereunder, Executive shall be under no obligation to seek other employment, and there shall be no offset against any amounts due Executive under this Agreement on account of any remuneration attributable to any subsequent employment that Executive may obtain. The preceding sentence shall not limit the Company’s right to discontinue payments due to a violation of Continuing Obligations or exercise its recoupment rights under Section 11.

12.            Indemnification. The Company will (i) indemnify Executive with respect to claims arising out of any action taken or not taken in Executive’s capacity as an officer or employee of the Company or its subsidiaries; provided, that Executive acted in good faith and in a manner that he reasonably believed to be in or not opposed to the best interests of the Company or its subsidiaries, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his conduct was unlawful, (ii) advance to Executive all reasonable and documented out of pocket costs and expenses incurred by Executive in connection with the foregoing clause (i), including but not limited to attorneys’ fees, and (iii) provide for Executive to be covered by D&O insurance, with respect to clauses (i) and (ii), on the same terms as are made available to the CEO and/or members of the Board, as applicable; provided that, this Agreement constitutes an undertaking that amounts advanced under clause (ii) shall be promptly repaid to the Company by Executive if it shall ultimately be determined by a court of competent jurisdiction that Executive is not entitled to be indemnified by the Company pursuant to this Section 12. Nothing herein shall limit any right that Executive may have in respect of indemnification, advancement or liability insurance coverage under the organizational documents of the applicable entity, any other policy, plan, contract or arrangement of the Company, the Parent or their respective subsidiaries or under applicable law with respect to his services as an officer or employee for the Parent, Company or their subsidiaries.

13.            Resignation of All Other Positions. To the extent applicable, Executive shall be deemed to have resigned from all officer and board member positions that Executive holds with the Company, Parent, or any of their respective subsidiaries and affiliates upon the Date of Termination. Executive shall execute any documents in reasonable form as may be requested to confirm or effectuate any such resignations.

14.            Survival. The provisions of this Agreement shall survive the termination of this Agreement and/or the termination of Executive’s employment to the extent necessary to effectuate the terms contained herein, including but not limited to the Company’s obligation to make severance payments or provide indemnification and Executive’s obligations to comply with the Continuing Obligations.

15.            Waiver of Breach. The waiver of a breach of any of the provisions of this Agreement by the Parties shall not be construed as a waiver of any subsequent breach by the breaching party.

16.            Binding Effect; Assignment. The rights and obligations of the Company under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Company. This Agreement is a personal employment contract, and the rights, obligations, and interests of Executive hereunder may not be sold, assigned, delegated, transferred, pledged, or hypothecated.

17.            Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, if any, between the Company and Executive with respect to the terms and conditions of Executive’s employment with the Company. No supplement, modification, amendment, or waiver of any of the terms, conditions, or provisions in this Agreement can be made unless in writing and signed by both an authorized representative of the Company, the Board, and Executive.

18.            Notice. All notices that are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given: When received if personally delivered; when transmitted if transmitted by telecopy or similar electronic transmission method; one business day after it is sent, if sent by recognized expedited delivery service; and five days after it is sent, if mailed, first class mail, certified mail, return receipt requested, with postage prepaid. In each case notice shall be sent to:

Houston, TX 77030

16945 Northchase Drive, Suite 1610

Houston, Texas 77060

Attn: Lane Bond

19.            Severability. If any provision of this Agreement or the application of any such provision to any party or circumstances shall be determined by any court of competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this Agreement or the application of such provision to such person or circumstances other than those to which it is so determined to be invalid and unenforceable shall not be affected, and each provision of this Agreement shall be validated and shall be enforced to the fullest extent permitted by law.

20.            Taxes. All salary, benefits, reimbursements and any other payments to Executive under this Agreement shall be subject to all applicable payroll and withholding taxes and deductions required by any law, rule or regulation of and federal, state or local authority. Executive shall in all events be solely responsible for payment of all applicable federal and state taxes that may be assessed against compensation or benefits paid or payable by the Parent or the Company or Parent under this Agreement or otherwise, and no representation or warranty is provided by either the Company or Parent as to any particular tax consequences associated with any item of compensation or benefits.

21.            Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas without giving effect to principles of conflicts of laws that would apply the laws of another jurisdiction.  All claims arising out of or relating to this Agreement shall be heard and determined exclusively in any federal or state court sitting in Harris County, Texas. Consistent with the preceding sentence, the Parties irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, any claim that it is not subject personally to the jurisdiction of the aforementioned courts, that its property is exempt or immune from attachment or execution, that the claim is brought in an inconvenient forum, that the venue of the claim is improper, or that this Agreement or the transactions contemplated by this Agreement may not be enforced in or by any of the aforementioned courts.

22.            Employee’s Representations and Warranties. EXECUTIVE UNDERSTANDS ALL OF THE TERMS OF THIS "AT WILL" EMPLOYMENT AGREEMENT AND HAS REVIEWED THIS AGREEMENT FULLY AND IN DETAIL PRIOR TO AGREEING TO EACH AND ALL OF THE PROVISIONS HEREOF and no statement, representation, promise, or inducement has been made to Executive, in connection with the terms of this Agreement, the execution hereof or otherwise, except as is expressly set forth in this Agreement.

23.            Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement this 24 day of June 2022.

EXHIBIT A

GENERAL RELEASE OF ALL CLAIMS

This General Release of All Claims is made as of __________(“General Release”), by and between ______________ (“Executive”) and Epsilon Energy USA Inc. (the “Company”).

WHEREAS, the Company and Executive are parties to an Employment Agreement dated as of June [ ], 2022 (the “Employment Agreement”);

WHEREAS, [the Executive has terminated employment with the Company for Good Reason under the Employment Agreement] [the Company has terminated Executive’s employment with the Company without Cause under the Employment Agreement];

WHEREAS, the execution of this General Release is a condition precedent to the payment of severance benefits under the Employment Agreement;

WHEREAS, in consideration for Executive’s signing of this General Release, the Company will make payments to Executive pursuant to [Section 5] [Section [6] of the Employment Agreement; and

WHEREAS, Executive and the Company intend that this General Release satisfies the obligation to provide a Release under the Employment Agreement.

NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements herein contained, the Company and Executive agree as follows:

1.            Executive, for himself, Executive’s spouse, heirs, administrators, children, representatives, executors, successors, assigns, and all other persons claiming through Executive, if any (collectively, “Releasers”), does hereby release, waive, and forever discharge the Company and each of its respective agents, subsidiaries, parents, affiliates, related organizations, employees, officers, directors, attorneys, successors, and assigns (collectively, the “Releasees”) from, and does fully waive any obligations of Releasees to Releasers for, any and all liability, actions, charges, causes of action, demands, damages, or claims for relief, remuneration, sums of money, accounts or expenses (including attorneys’ fees and costs) of any kind whatsoever, whether known or unknown or contingent or absolute, which heretofore has been or which hereafter may be suffered or sustained, directly or indirectly, by Releasers in consequence of, arising out of, or in any way relating to: (a) Executive’s employment with the Company or any of its subsidiaries or affiliates; (b) the termination of Executive’s employment with the Company and any of its subsidiaries or affiliates; (c) the Employment Agreement; or (d) any and all events occurring on or prior to the date of this General Release. The foregoing release, discharge and waiver includes, but is not limited to, all claims and any obligations or causes of action arising from such claims, under common law including wrongful or retaliatory discharge, breach of contract (including but not limited to any claims under the Employment Agreement and any claims under any equity incentive arrangements between Executive, on the one hand, and the Company or any of its subsidiaries or affiliates, on the other hand) and any action arising in tort including libel, slander, defamation or intentional infliction of emotional distress, and claims under any federal, state or local statute including the Age Discrimination in Employment Act (“ADEA”), Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866 and 1871 (42 U.S.C. § 1981), the National Labor Relations Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, the Americans with Disabilities Act of 1990, the Rehabilitation Act of 1973, or the discrimination or employment laws of any state or municipality, any claims as a stockholder of the Company (including but not limited to any breach of fiduciary duty claims) and/or any claims under any express or implied contract which Releasers may claim existed with Releasees. This also includes a release of any claims for wrongful discharge and all claims for alleged physical or personal injury, emotional distress relating to or arising out of Executive’s employment with the Company or any of its subsidiaries or affiliates or the termination of that employment; and any claims under the WARN Act or any similar law, which requires, among other things, that advance notice be given of certain work force reductions. Nothing in this Section 1 shall be deemed to operate or shall operate as a release, settlement or discharge of any (i) obligation, undertaking, or commitment by the Company under the Employment Agreement that survives the termination of Executive’s employment with the Company; (ii) any right to indemnification, defense, and advancement of expenses now existing under the Company’s (or its parent, subsidiary, affiliated companies, and their successors’) certificates of formation, articles of incorporation, bylaws, and other Company policies of indemnification or under any insurance policies available to the Company (or its parent, subsidiary, affiliated companies, and their successors) or Executive; (iii) any rights to the receipt of Executive’s employee benefits that were accrued and vested on or prior to the date of this General Release; and (iv) right to receive payments under [Section 5] [Section 6] of the Employment Agreement.

2.            Excluded from this General Release and waiver are any claims which cannot be waived by law, including but not limited to the right to file a charge with a government agency or participate in an investigation conducted by certain government agencies. Executive does, however, waive Executive’s right to any monetary recovery should any agency (such as the Equal Employment Opportunity Commission) pursue any claims on Executive’s behalf. Executive represents and warrants that Executive has not filed any complaint, charge, or lawsuit against the Releasees with any government agency or any court. The Company represents and warrants that neither it, nor any of its parent, subsidiary, and affiliated companies, have filed any complaint, charge, or lawsuit against Executive Releasees with any government agency or court.

3.            Executive agrees never to seek personal recovery from Releasees in any forum for any claim covered by the above waiver and release language, except that Executive may bring a claim under the ADEA to challenge this General Release. If Executive violates this General Release by suing Releasees, other than under the ADEA or as otherwise set forth in Section 1 hereof, Executive shall be liable to the Company for its reasonable attorneys’ fees and other litigation costs incurred in defending against such a suit. Nothing in this General Release is intended to reflect any party’s belief that Executive’s waiver of claims under ADEA is invalid or unenforceable, it being the intent of the parties that such claims are waived.

4.            Executive acknowledges and agrees that Executive shall continue to be bound by the Continuing Obligations set forth and described in Section 7 of the Employment Agreement, including the Restrictive Covenants Agreement (as defined in the Employment Agreement). The Company acknowledges and agrees that the Company shall continue to be bound by the provisions of the Employment Agreement that survive the termination of Executive’s employment with the Company. Executive understands that notwithstanding any other provision of the Employment Agreement and this General Release, nothing contained in the Employment Agreement or this General Release limits Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (collectively, “Government Agencies”), or prevents the Executive from providing truthful testimony in response to a lawfully issued subpoena or court order. Further, nothing in the Employment Agreement or this General Release shall (a) prohibit the Executive from making reports of possible violations of federal law or regulation to any Government Agencies, including but not limited to the Securities and Exchange Commission, in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934, as amended, or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of federal law or regulation, or (b) require notification or prior approval by the Company of any such report; provided that the Executive is not authorized to disclose communications with counsel that were made for the purpose of receiving legal advice or that contain legal advice or that are protected by the attorney work product or similar privilege. Further, the Employment Agreement and this General Release do not limit the Executive’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. The Employment Agreement and this General Release do not limit Executive’s right to seek an award pursuant to Section 21F of the Securities Exchange Act of 1934. In addition, for the avoidance of doubt, pursuant to the federal Defend Trade Secrets Act of 2016, Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (x) is made (i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

5.            Executive agrees that Executive shall not issue, circulate, publish or utter any false or disparaging statement or remarks about the Releasees unless giving truthful testimony under subpoena or court order. Notwithstanding anything to the contrary in this Release, Executive may provide truthful information to any governmental agency or self-regulatory organization with or without subpoena or court order.

6.            Executive agrees that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed or construed at any time to be an admission by the Company, any Releasee or Executive of any improper or unlawful conduct.

8.            This General Release shall be governed by the internal laws (and not the choice of laws) of the State of Texas, except for the application of pre-emptive Federal law.

9.            Executive shall have 7 days from the date he executes this General Release to revoke his waiver of any ADEA claims by providing written notice of the revocation to the Company. The Company represents and warrants that the individual signing this General Release has the full authority and right to execute it upon its behalf.

10.            Defined terms not defined in this General Release have the meanings given in the Employment Agreement.

PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

EXECUTIVE:

1  In the event the Company determines that Executive’s termination constitutes “an exit incentive or other employment termination program offered to a group or class of employees” under the ADEA, the Company will provide Executive with: (1) 45 days to consider the General Release; and (2) the disclosure schedules required for an effective release under the ADEA.