ZULU ENERGY CORP. RESTRICTED STOCK AGREEMENT
a
Zulu
Energy Corp., a Colorado corporation (the “Company”),
hereby grants shares of its common stock (the “Stock”)
to the
Grantee named below, subject to the vesting conditions set forth in the
attachment. Additional terms and conditions of the grant are set forth in this
cover sheet and in the attachment.
Grant
Date:
Name
of
Grantee:
Grantee's
Social Security Number: _____-____-_____
Number
of
Shares of Stock Covered by
Grant:
Number
of
Shares to be Deposited into
Escrow:
Xxxxx
Xxxxx per Share of Stock: $
By
signing this cover sheet, you agree to all of the terms and conditions described
in the attached Agreement.
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Grantee:
(Signature)
Address:
0;
Company:
(Authorized
Signature)
Title:
Attachment
This
is not a stock certificate or a negotiable instrument.
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Restricted
Stock/ Nontransferability
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This
grant is an award of Stock in the number of shares set forth on
the cover
sheet, at the xxxxx xxxxx set forth on the cover sheet, and subject
to the
vesting conditions described below (“Restricted
Stock”).
To the extent not yet vested, your Restricted Stock may not be
sold,
transferred, assigned, pledged, hypothecated, or otherwise disposed
of,
whether by operation of law or otherwise, and will be subject to
a risk of
forfeiture.
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Issuance
and Vesting
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The
Company will issue your Restricted Stock in your name as of the
Xxxxx
Date.
As
described below, your right to the Stock under this Restricted
Stock grant
vests on the vesting date that you remain in Service and is subject
to
conditions, as follows:
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Vesting
Date and Condition
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Percentage
of Shares of
Restricted
Stock Vested
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January
1, 2009 - Grantee shall be in Service to the Company on January
1, 2009
and the Company shall have successfully drilled three stratigraphic
test
xxxxx before that date.
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40%
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January
1, 2010 - Grantee shall be in Service to the Company on January
1, 2010,
and the Company shall have successfully located and tested a potentially
viable hydrocarbon reservoir prior to that date.
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30%
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January
1, 2011 - Grantee shall be in Service to the Company on January
1,
2011
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30%
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The
resulting aggregate number of vested shares will be rounded to
the nearest
whole number, and you cannot vest in more than the number of shares
covered by this grant. The determination of whether the vesting
dates and
conditions have been satisfied shall be made by the Board of Directors
of
the Company and shall be final and
binding.
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2
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For
purposes of this agreement, “Service”
means service as an employee of the Company pursuant to the Employment
Agreement entered into between you and the Company dated as of
March 1,
2008 (the “Employment Agreement”).
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Effect
of Change in Control
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In
the event of a Change in Control of the Company as defined in your
Employment Agreement, all of the Stock under this Restricted Stock
grant
shall be fully vested.
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Escrow
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The
certificates for the unvested Restricted Stock (each of which shall
correspond to the applicable vesting percentages described above)
shall be
deposited in escrow with the Secretary of the Company to be held
in
accordance with the provisions of this paragraph. Each deposited
certificate shall be accompanied by a duly executed Assignment
Separate
from Certificate in the form attached hereto as Exhibit
A.
The deposited certificates shall remain in escrow until such time
or times
as the certificates are to be released or otherwise surrendered
for
cancellation as discussed below.
All
regular cash dividends on the Stock (or other securities at the
time held
in escrow) shall be paid directly to you and shall not be held
in escrow.
However, in the event of any stock dividend, stock split, recapitalization
or other change affecting the Company's outstanding common stock
as a
class effected without receipt of consideration or in the event
of a stock
split, a stock dividend or a similar change in the Company’s stock, any
new, substituted or additional securities or other property which
is by
reason of such transaction distributed with respect to the Stock
shall be
immediately delivered to the Secretary of the Company to be held
in escrow
hereunder, but only to the extent the Stock is at the time subject
to the
escrow requirements hereof.
The
shares of Stock held in escrow hereunder shall be subject to the
following
terms and conditions relating to their release from escrow or their
surrender to the Company for cancellation:
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·
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As your interest in the shares of Restricted Stock vests as described above, the certificates for such vested shares shall be released from escrow and delivered to you, at your request, within thirty (30) days following the date on which such shares become vested. | |
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·
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Upon termination of your Service, any escrowed shares shall be promptly released from escrow or surrendered to the Company for cancellation as provided in the Employment Agreement. |
3
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Withholding
Taxes
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You
agree, as a condition of this grant, that you will make acceptable
arrangements to pay any withholding or other taxes that may be
due as a
result of the vesting of Stock acquired under this grant. If the
Company
determines that any federal, state, local or foreign tax or withholding
payment is required relating to the vesting of shares arising from
this
grant, the Company shall have the right to require such payments
from you,
or withhold such amounts from other payments due to you from the
Company
or any Affiliate.
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Section
83(b)
Election
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Under
Section 83 of the Internal Revenue Code of 1986, as amended (the
“Code”),
the fair market value of the Stock on the date any forfeiture restrictions
applicable to the shares lapse will be reportable as ordinary income
at
that time. You acknowledge your understanding of your right to
elect to be
taxed currently rather than when such shares cease to be subject
to such
forfeiture restrictions by filing an election under Section 83(b)
of the
Code with the Internal Revenue Service within thirty days after
the Grant
Date and that the failure to make this filing within the thirty
day period
results in the recognition of ordinary income by you (in the event
the
fair market value of the shares increases after the date of the
grant) as
the forfeiture restrictions lapse.
YOU
ACKNOWLEDGE THAT IT IS YOUR SOLE RESPONSIBILITY, AND NOT THE COMPANY'S,
TO
FILE A TIMELY ELECTION UNDER SECTION 83(b), EVEN IF YOU REQUEST
THE
COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON YOUR BEHALF.
YOU ARE
RELYING SOLELY ON YOUR OWN ADVISORS WITH RESPECT TO THE DECISION
AS TO
WHETHER TO FILE ANY 83(b) ELECTION.
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Market
Stand-off Agreement
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In
connection with any underwritten public offering by the Company
of its
equity securities pursuant to an effective registration statement
filed
under the U.S. Securities Act of 1933, as amended (the “Securities Act”),
you agree not to sell, make any short sale of, loan, hypothecate,
pledge,
grant any option for the purchase of, or otherwise dispose or transfer
for
value or agree to engage in any of the foregoing transactions with
respect
to any shares of vested Stock without the prior written consent
of the
Company or its underwriters, for such period of time after the
effective
date of such registration statement as may be requested by the
Company or
the underwriters (not to exceed 180 days in
length).
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4
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Investment
Representations
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You
hereby agree and represent, as a condition of this grant of Restricted
Stock, that:
(i)
you are acquiring the shares of Restricted Stock for investment
for your
own account and not with a view to, or intention of, or otherwise
for
resale in connection with, any distribution to any person or entity,
(ii) neither
the offer nor the grant of the shares of Restricted Stock hereunder,
or
the shares of Restricted Stock themselves, have been registered
under the
Securities Act or registered or qualified under any applicable
state
securities laws and that the shares of Restricted Stock are being
granted
to you by reason of and in reliance upon a specific exemption from
the
registration provisions of the Securities Act and exemptions from
registration or qualification provisions of such applicable state
or other
jurisdiction's securities laws which depend upon, among other things,
the
bona fide nature of the investment intent as expressed herein and
the
truth and accuracy of your representations, warranties, agreements,
acknowledgments and understandings as set forth herein,
(iii)
you must, and are able to, bear the economic risk of the value
of the
shares of Restricted Stock for an indefinite period of time,
(iv)
you are sophisticated in financial matters and have such knowledge
and
experience in financial and business matters as to be capable of
evaluating the risks and benefits of your investment in the shares
of
Restricted Stock,
(v) you
are as of the date hereof an “accredited investor” as such term is defined
under Rule 501 of the Securities Act, and
(vii)
the Company has made available to you all documents that you have
requested relating to the Company, the shares of Restricted Stock
and your
acquisition of the shares of Restricted Stock, and you have had
an
opportunity to ask questions and receive answers concerning the
Company
and the terms and conditions of the offering and acquisition of
the shares
of Restricted Stock pursuant to this Restricted Stock Agreement
and have
had full access to such other information concerning the Company
and the
shares of Restricted Stock as you deemed necessary or
desirable.
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Registration
Obligation
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On
or before November 17, 2008, the Company shall file a registration
statement under the Securities Act with the U.S. Securities and
Exchange
Commission to register for resale your Restricted
Stock.
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5
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Retention
Rights
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This
Agreement does not give you the right to be retained or employed
by the
Company (or any parent, subsidiary or affiliate) in any capacity.
The
description of vesting schedules in this Agreement in units of
years or
months shall not be construed as guaranteeing you any term of employment
or service to the end of any such period of time or for any period
of
time. The Company (and any parent, subsidiary or affiliate) reserve
the
right to terminate your Service at any time and for any
reason.
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Shareholder
Rights
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You
have the right to vote the Restricted Stock and to receive any
dividends
declared or paid on such stock. Any distributions you receive as
a result
of any stock split, stock dividend, combination of shares or other
similar
transaction shall be deemed to be a part of the Restricted Stock
and
subject to the same conditions and restrictions applicable thereto.
The
Company may in its sole discretion require any dividends paid on
the
Restricted Stock to be reinvested in shares of Stock, which the
Company
may in its sole discretion deem to be a part of the shares of Restricted
Stock and subject to the same conditions and restrictions applicable
thereto. Except as described in the Plan, no adjustments are made
for
dividends or other rights if the applicable record date occurs
before your
stock certificate is issued.
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Adjustments
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In
the event of a stock split, a stock dividend or a similar change
in the
Company’s stock, the number of shares covered by this grant may be
adjusted (and rounded down to the nearest whole number) pursuant
to the
Plan. Your Restricted Stock shall be subject to the terms of the
agreement
of merger, liquidation or reorganization in the event the Company
is
subject to such corporate activity.
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Legends
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All
certificates representing the Stock issued in connection with this
grant
shall, where applicable, have endorsed thereon substantially the
following
legends:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON TRANSFER AND A RIGHT OF FORFEITURE ON BEHALF OF THE COMPANY
ON SUCH
SHARES SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED
HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT
IS
ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED
UPON
WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF
RECORD OF
THE SHARES REPRESENTED BY THIS
CERTIFICATE.”
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THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.
THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, TRANSFERRED
OR
ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT
FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(B) AN
OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY,
THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
PURSUANT
TO RULE 144 OR RULE 144A UNDER SAID ACT.
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Applicable
Law
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This
Agreement will be interpreted and enforced under the laws of the
State of
Colorado, other than any conflicts or choice of law rule or principle
that
might otherwise refer construction or interpretation of this Agreement
to
the substantive law of another jurisdiction, except that the Colorado
Revised Statutes shall govern as to corporate law.
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Entire
Agreement
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This
Agreement and the Employment Agreement constitute the entire understanding
between you and the Company regarding this grant of Restricted
Stock. All
references to phantom stock in the Employment Agreement are superseded
by
this Agreement and are no longer of any force and effect. You acknowledge
your understanding that you have no rights to any phantom stock.
Any prior
agreements, commitments or negotiations concerning this grant are
superseded.
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Amendment
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This
Agreement may be amended or modified only by a written instrument
executed
by both the Company and the Grantee.
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Notice
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All
notices required or permitted hereunder shall be in writing and
deemed
effectively given upon personal delivery or five days after deposit
in the
United States Post Office, by registered or certified mail, postage
prepaid, if to the Grantee, to the address set forth below on the
records
of the Company, and if to the Company, to the Company’s principal
executive offices, attention of the Corporate Secretary or Chief
Financial
Officer.
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Binding
Effect
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This
Agreement shall be binding upon and inure to the benefit of the
Company
and the Grantee and their respective heirs, executors, administrators,
legal representatives, successors and assigns, subject to the restrictions
on transfer set forth in this Agreement.
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Pronouns
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Whenever
the context may require, any pronouns used in this Agreement shall
include
the corresponding masculine, feminine or neuter forms, and the
singular
form of nouns and pronouns shall include the plural, and
vice versa.
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Waiver
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Any
provision for the benefit of the Company contained in this Agreement
may
be waived, either generally or in any particular instance, by the
Board of
Directors of the Company.
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Severability
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The
invalidity or unenforceability of any provision of this Agreement
shall
not affect the validity or enforceability of any other provision
of this
Agreement, and each other provision of this Agreement shall be
severable
and enforceable to the extent permitted by
law.
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By
signing the cover sheet of this Agreement, you agree to all of the terms and
conditions
described above.
8
ASSIGNMENT
SEPARATE FROM CERTIFICATE
FOR
VALUE
RECEIVED, _____________ (the “Grantee”)
hereby
sells, assigns and transfers unto Zulu Energy Corp., a Colorado corporation
(the
“Company”),
_____________________ (________) shares of common stock of the Company
represented by Certificate No. ___ herewith and does hereby irrevocable
constitute and appoint the Company as Attorney to transfer the said stock on
the
books of the Company with full power of substitution in the
premises.
| Dated:____________, 200_ | |
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__________________________________________
Print
Name
__________________________________________
Signature
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Spouse
Consent (if applicable)
___________________
(Grantee's spouse) indicates by the execution of this Assignment his or her
consent to be bound by the terms herein as to his or her interests, whether
as
community property or otherwise, if any, in the shares of common stock of the
Company.
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__________________________________________
Signature
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INSTRUCTIONS:
PLEASE DO NOT FILL IN ANY BLANKS OTHER THAN THE SIGNATURE LINE. THE PURPOSE
OF
THIS ASSIGNMENT IS TO RETURN THE SHARES TO THE COMPANY IN THE EVENT THE GRANTEE
FORFEITS ANY SHARES AS SET FORTH IN THE AGREEMENT WITHOUT REQUIRING ADDITIONAL
SIGNATURES ON THE PART OF GRANTEE.
9
