RETENTION BONUS AWARD
Exhibit 10.19
This Retention Bonus Award (this “Award”) is made and entered into this ___day of
September, 2009 by and among Resolute Energy Corporation (the “Company”), Resolute Holdings
Sub, LLC (“Holdings Sub”), Resolute Holdings, LLC (“Holdings”) and _________
(“Employee”). The Company, Holdings Sub, Holdings and Employee are referred to
collectively as the “Parties” and individually as a “Party.”
RECITALS
WHEREAS, the Company, Holdings Sub and Holdings have entered into a Purchase and IPO
Reorganization Agreement with Xxxxx Acquisition Company I, Inc., Resolute Subsidiary Corporation,
Resolute Aneth, LLC, and HH-HACI, L.P., pursuant to which the Company will succeed to the ownership
of certain oil and natural gas assets previously owned by indirect subsidiaries of Holdings and
become parent of Xxxxx Acquisition Company I, Inc. (the “Transactions”); and
WHEREAS, in consideration of the contribution of oil and natural gas assets to the Company,
Holdings Sub is entitled to receive 9,200,000 shares of common stock, $0.0001 per share, of the
Company (the “Common Stock”), 200,000 of which (the “Retention Bonus Shares”) may,
at the direction of Holdings Sub, be allocated to persons who have been employees of indirect
subsidiaries of Holdings Sub (“Resolute Employees”); and
WHEREAS, Holdings Sub has directed the Company to issue the Retention Bonus Shares to Resolute
Employees, subject, in the case of forfeiture of Retention Bonus Shares by such employees, to cause
such shares to be reissued in the name of Holdings; and
WHEREAS, the Company has selected Employee for receipt of an award, reflecting its desire (i)
to reward Employee for his/her assistance in completing the Transactions and (ii) to create an
incentive for Employee to remain employed by the Company through the closing date of the
Transactions (the “Closing Date”) and for at least one year thereafter; and
WHEREAS, Employee desires to accept the award on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and promises
contained herein, the sufficiency of which is hereby acknowledged, the Parties agree as follows:
AGREEMENT
1. Direction Regarding Retention Shares. Holdings Sub directs the Company to issue
the Retention Bonus Shares to Resolute Employees, subject to the terms and conditions set forth
herein.
2. Retention Bonus.
(a) Award. The Company hereby awards to Employee, and Employee hereby accepts from
the Company on the terms and conditions set forth herein, a retention bonus payable as follows:
(i) Cash Award.
(1) The Company will pay Employee a lump sum cash payment in the amount of $___on the
Closing Date, provided, however, that no such payment will be made unless Employee is employed by
the Company on the Closing Date, and provided further that such payment shall be made no later than
March 15, 2010; and
(2) The Company will pay Employee a lump sum cash payment in the amount of $___on the
first anniversary of the Closing Date (the “Deferred Payment Date,” and the payment to be
made on such date being referred to herein as the “Deferred Payment”), provided, however,
that such payment shall be made no later than the first March 15th following the end of
the year in which the Deferred Payment Date falls, or, in the event that payment is made pursuant
to Section 5 or Section 6, such payment shall be made no later than the first March 15th
following the end of the year in which Employee terminates his or her employment with the Company
or the year in which a Change in Control occurs.
(ii) Stock Award.
(1) Holdings Sub directs the Company to issue to Employee ___shares of Common Stock on
the Closing Date, provided, however, that no such issuance will be made unless Employee is employed
by the Company on the Closing Date and provided further that such issuance shall be made no later
than March 15, 2010; and
(2) Holdings Sub directs the Company to issue and deposit, on the Closing Date, into an escrow
account maintained by Holdings ___shares of Common Stock, to be delivered to Employee on the
Deferred Payment Date (the issuance on such date being referred to herein as the “Deferred
Issuance” and the shares to be issued on the Deferred Payment Date being referred to herein as
the “Deferred Issuance Shares”), provided, however, that such issuance shall be made no
later than the first March 15th following the end of the year in which the Deferred
Payment Date falls, or, in the event that issuance is made pursuant to Section 5 or Section 6, such
issuance shall be made no later than the first March 15th following the end of the year
in which Employee terminates his or her employment with the Company or the year in which a Change
in Control occurs.
(3) Notwithstanding anything herein to the contrary, the Company shall not issue to Employee
any such shares of Common Stock issuable hereunder which, when aggregated with all other shares of
Common Stock issued to Resolute Employees pursuant to a Retention Bonus Award, exceed 200,000
shares of Common Stock.
(iii) Condition to Receipt of Deferred Payment and Deferred Issuance Shares. The
Company will not be required to make the Deferred Payment to Employee or to issue the Deferred
Issuance Shares to Employee unless the Employee remains continuously
2
employed by the Company through the Deferred Payment Date, except under the circumstances set
forth in Section 5 or Section 6 below. Except as so provided, in the event that the Employee’s
employment with the Company is terminated for any reason by the Company or is terminated by him or
her voluntarily, then, in either such event, the Employee’s rights under this Award and any right
to receive the Deferred Payment or the Deferred Issuance Shares shall lapse and terminate
immediately upon the effective date of termination. The Parties acknowledge that Employee has no
rights in the Deferred Issuance Shares prior to the Deferred Payment Date, and that the Deferred
Issuance Shares are not eligible for an election to be taxed at the time of grant under Section
83(b) of Internal Revenue Code of 1986, as amended (the “Code”). Accordingly, if Employee
does make such an election under Section 83(b) of the Code, then any right of Employee under this
Award to receive the Deferred Issuance Shares will lapse and terminate immediately upon the date of
such election.
(iv) Escrow. The Deferred Issuance Shares will be held in an escrow account to be
maintained by Holdings, as escrow agent. During the one-year period prior to vesting, the Deferred
Issuance Shares shall, in combination with all other Retention Bonus Shares subject to Deferred
Issuance, be represented by a stock certificate (the “Deferred Issuance Certificate”) in
the name of Holdings, which shall hold such shares on behalf of Employee. Upon satisfaction of the
vesting condition, Holdings shall request that the Company issue a new certificate representing the
Deferred Issuance Shares in the name of Employee and make a corresponding reduction in the number
of Retention Bonus Shares represented by the Deferred Issuance Certificate. Prior to the Deferred
Payment Date, Holdings shall have the right to vote the Deferred Issuance Shares in such manner as
Holdings shall determine and, subject to Section 10, to receive any distributions paid on the
Deferred Issuance Shares. Holding shall be treated as the owner of the Deferred Issuance Shares
for federal income tax purposes while such shares are held in escrow and until the Deferred Payment
Date.
(v) Disposition of Deferred Issuance Shares in the Event of Forfeiture. In the event
that Employee is not employed by the Company at the Deferred Payment Date (other than by reason of
the events set forth in Section 5 or under the circumstances contemplated by Section 6), Holdings
Sub shall request that the Company reissue the Deferred Issuance Shares so forfeited by Employee in
the name of Holdings, and Holdings shall be the owner of such shares for all purposes. If
requested by the Company, Employee shall execute and deliver to the Company blank stock powers for
use in connection with the transfer to Holdings of Deferred Issuance Shares that do not become
vested.
3. Withholding and Taxes.
(a) Employee is required to pay to the Company, and the Company has the right and is hereby
authorized to withhold, from any cash or shares of Common Stock deliverable under any Award or from
any compensation or other amounts owing to Employee, the amount (in cash, Common Stock, other
securities or other property) of any required withholding taxes in respect of the Award, or any
payment or transfer under an Award and to take such other action as may be necessary in the opinion
of the Company to satisfy all obligations for the payment of such withholding and taxes.
3
(b) Without limiting the generality of clause (a) above, the Company may, in its sole
discretion, satisfy, in whole or in part, the foregoing withholding liability by withholding from
the number of shares of Common Stock otherwise issuable or deliverable pursuant to the settlement
of the Award a number of shares with a Fair Market Value (as defined below) equal to such
withholding liability (but no more than the minimum required statutory withholding liability). The
Company may require Employee, through payroll withholding, cash payment, or otherwise, to make
adequate provisions for any such tax withholding obligation of the Company arising in connection
with such Award.
(c) Employee agrees to be responsible for the payment of any taxes due on any and all
compensation provided by the Company pursuant to the Award. Employee agrees to indemnify the
Company and hold the Company harmless from any and all claims or penalties asserted against the
Company for any failure to pay taxes due on any compensation provided by the Company pursuant to
the Award.
(d) For purposes of this Agreement, “Fair Market Value” per share means the last sale
price for a share of Common Stock as furnished by the New York Stock Exchange (“NYSE”) or
other principal stock exchange on which the Common Stock is then listed for the date in question
or, if no sales of Common Stock were reported by the NYSE or other such exchange on that date, the
last price for a share of Common Stock as furnished by the NYSE or other such exchange for the next
preceding day on which sales of Common Stock were reported by the NYSE. If the Common Stock is no
longer listed or is no longer actively traded on the NYSE or listed on a principal stock exchange
as of the applicable date, the Fair Market Value of the Common Stock shall be the value as
reasonably determined by the Company for purposes of the award in the circumstances.
(e) It is the intention of the Parties that payments or issuances of stock under this Award
qualify for the exception from Section 409A of the Code for “short-term deferrals and this Award
shall be interpreted consistently with such intent.
4. At-Will Employment. Nothing in this Award alters Employee’s status as an at-will
employee with the Company. Both the Company and Employee reserve the right to terminate Employee’s
employment at any time, for any reason or no reason, with or without warning or notice.
5. Termination of Employment by Reason of Death or Disability.
(a) In the event that Employee’s employment with the Company is terminated by reason of
Employee’s death or Disability, the Company shall provide that the Deferred Payment and the
Deferred Issuance be made as of or promptly following the date of termination, and any such payment
or issuance shall be made within the time period prescribed by Section 2(a), above.
(b) For purposes of this Section 5, “Disability” means that Employee, in the
determination of the Company, is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment that can be expected to result in death or
can be expected to last for a continuous period of not less than 12 months.
4
6. Possible Acceleration of Award Upon Change in Control.
(a) The Company may, in its discretion, provide that the Deferred Payment and Deferred
Issuance be made upon the occurrence of a Change in Control, and any such payment or issuance shall
be made within the time period prescribed by Section 2(a) above.
(b) For purposes of this Section 6, a “Change in Control” will be deemed to occur
upon:
(i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more
than 50% of either (1) the then-outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (2) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that, for
purposes of this definition, the following acquisitions shall not constitute a Change in Control:
(A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any
acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company
or any affiliate of the Company or a successor, or (D) any acquisition by any entity pursuant to a
transaction that complies with Sections (iii)(1), (2) and (3) below;
(ii) Individuals who, as of the date of this Award and after giving effect to the completion
of the Transactions, constitute the Company’s board of directors (the “Incumbent Board”)
cease for any reason to constitute a majority of the directors of the Company; provided, however,
that any individual becoming a director subsequent to the date of this Award whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of at least
two-thirds of the directors then comprising the Incumbent Board (including for these purposes, the
new members whose election or nomination was so approved, without counting the member and his
predecessor twice) shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Company’s board of directors;
(iii) Consummation of a reorganization, merger, statutory share exchange or consolidation or
similar corporate transaction involving the Company or any of its subsidiaries, a sale or other
disposition of all or substantially all of the assets of the Company, or the acquisition of assets
or stock of another entity by the Company or any of its subsidiaries (each, a “Business
Combination”), in each case unless, following such Business Combination, (1) all or
substantially all of the individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of directors, as the case may be, of
the entity resulting from such Business Combination (including, without
5
limitation, an entity that, as a result of such transaction, owns the Company or all or
substantially all of the Company’s assets directly or through one or more subsidiaries (a
“Parent”)) in substantially the same proportions as their ownership immediately prior to
such Business Combination of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities, as the case may be; (2) no person (excluding any entity resulting from such
Business Combination or a Parent or any employee benefit plan (or related trust) of the Company or
such entity resulting from such Business Combination) beneficially owns, directly or indirectly,
more than 50% of, respectively, the then-outstanding shares of common stock of the entity resulting
from such Business Combination or the combined voting power of the then-outstanding voting
securities of such entity, except to the extent that the ownership in excess of 50% existed prior
to the Business Combination; and (3) a majority of the members of the Company’s board of directors
or trustees of the entity resulting from such Business Combination or a Parent were members of the
Incumbent Board at the time of the execution of the initial agreement or of the action of the Board
providing for such Business Combination; or
(iv) Approval by the stockholders of the Company of a complete liquidation or dissolution of
the Company other than in the context of a transaction that does not constitute a Change in Control
under clause (iii) above.
Notwithstanding the foregoing, (1) the board may waive the requirement described in paragraph
(i) above that a person must acquire more than 50% of the Outstanding Company Stock or Outstanding
Company Voting Securities for a Change in Control to have occurred if the board determines that the
percentage acquired by a person is significant (as determined by the board in its discretion) and
that waiving such condition is appropriate in light of all facts and circumstances, and (2) no
compensation that has been deferred for purposes of Section 409A of the Code shall be payable as a
result of a Change in Control unless the Change in Control qualifies as a change in ownership or
effective control of the Company within the meaning of Section 409A of the Code.
7. Company Decisions. All decisions and interpretations of this Award by the Company,
including by its board of directors or any committee charged with the interpretation and
administration hereof, shall be final, binding and conclusive. In particular, the Company is
entitled to establish what constitutes a termination of employment and will be the sole judge for
purposes of this Award of whether Employee continues to render services to the Company and the
date, if any, upon which such employment will be deemed to have terminated. Unless otherwise
provided by an express policy of the Company, the employment relationship will not be considered
terminated in the case of (a) sick leave, (b) military leave, or (c) any other leave of absence
authorized by the Company; provided that unless reemployment upon the expiration of such leave is
guaranteed by contract or law, such leave is for a period of not more than three months. In the
case of any Employee on an approved leave of absence, continued vesting of the Award while on leave
from the employ of the Company may be suspended until the Employee returns to service, unless the
Company otherwise provides or applicable law otherwise requires.
8. Nontransferability of Rights. Employee does not have the power or right to
transfer, assign, anticipate, mortgage, or otherwise encumber his or her rights under this Award.
Rights under this Award shall not be subject to seizure for the payment of debts, judgments,
6
alimony, or separate maintenance or be transferable by operation of law in the event of
bankruptcy, insolvency, divorce or separation.
9. No Claim Against Employee. Nothing contained herein shall be construed as giving
Employee or Employee’s beneficiary, or any other person, any equity or other interest of any kind
in any assets of the Company, or creating a trust of any kind or a fiduciary relationship of any
kind between the Company any such person.
10. Confidentiality. All discussions pertaining to this Award, including but not
limited to the amount of consideration or other terms or conditions of the negotiations or the
agreement reached, shall be kept strictly confidential by Employee from all persons and entities
other than the Parties to this Award. However, Employee may disclose the Award received only if
necessary (i) for the rendition of professional advice or services from an attorney, financial
advisor, insurance provider, or accountant (after instructing them that the amount is
confidential), (ii) for the limited purpose of making disclosures required by law to agents of
local, state, or federal governments, or (iii) in response to compulsory process. In the latter
instance, Employee will give the Company ten days advance notice prior to any disclosure to afford
the Company the opportunity to obtain any necessary or appropriate protective orders.
11. Adjustments. In the event of a stock split, stock dividend, reverse stock split,
reclassification or recapitalization, the Company shall, to the extent (if any) and at such time as
it deems appropriate and equitable in the circumstances, proportionately adjust the number of
shares of Common Stock subject to Deferred Issuance. In the event of a merger, consolidation or
other reorganization that does not constitute a Change in Control, the Company shall, to the extent
(if any) and at such time as it deems appropriate and equitable in the circumstances, make
provision for the assumption, substitution or exchange of Deferred Issuance Shares for the shares
of the resulting entity in the merger, consolidation or reorganization. Any adjustment,
substitution or exchange made pursuant to this Section 10 shall be made in a manner that, in the
good faith determination of the Company, will not likely result in the imposition of additional
taxes or interest under Section 409A of the Code.
12. Representations and Warranties. Employee represents and warrants as follows:
(a) This Award has been read by Employee, and Employee agrees to the conditions and
obligations set forth in it.
(b) Employee is voluntarily executing this Award after having been advised to consult with
legal counsel and after having had the opportunity to consult with legal counsel and without being
pressured or influenced by any statement or representation or omission of any person acting on
behalf of the Company (other than those expressly contained herein).
(c) Employee has full and complete legal capacity to enter into this Award.
(d) Employee has not assigned or transferred, and will not assign or transfer, any of his or
her rights under this Award.
(e) Employee is not otherwise entitled to receive the consideration given to him pursuant to
this Award.
7
13. Enforcement. The Parties are free to pursue any remedies available to them to
enforce this Award.
14. Amendment. This Award may be amended, modified or supplemented only by the
written agreement of Employee, the Company and Holdings.
15. Binding Effect. This Award and the rights and obligations hereunder are binding
upon and inure to the benefit of the Parties hereto and their respective heirs, legal
representatives, and successors.
16. Headings. The headings in this Award are inserted for convenience and
identification only and are not intended to describe, interpret, define, or limit the scope,
extent, or intent of this Award or any provision hereof.
17. Choice of Law and Venue. The validity of this Award and any of its terms and
provisions, as well as the rights and duties of the Parties hereunder, is governed by the laws of
the State of Colorado (without regard to its conflicts of law doctrines). Any dispute arising from
or relating to this Award shall be resolved in the Colorado state or federal courts.
18. Severability and Invalid Provisions. If any provision of this Award is held to be
illegal, invalid, or unenforceable under present or future laws effective during the term hereof,
such provision is fully severable; and this Award will be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance herefrom.
19. Entire Award. This Award embodies the entire agreement and understanding of the
parties hereto, and supersedes all prior agreements or understandings (whether written or oral),
with respect to the subject matter hereof. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly set forth or referred to herein.
20. Counterparts. This Award may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument.
8
IN WITNESS WHEREOF, this Award has been duly executed as of the date set forth above:
RESOLUTE ENERGY CORPORATION
|
EMPLOYEE | |
By: Title: |
Signature | |
| PRINT NAME | ||
RESOLUTE HOLDINGS, LLC |
||
By: |
||
By: Title: |
||
RESOLUTE HOLDINGS SUB, LLC |
||
By: |
||
By: Title: |
9
