HALLADOR PETROLEUM COMPANY RESTRICTED STOCK UNIT ISSUANCE AGREEMENT
exhibit
10.2
This
RESTRICTED STOCK UNIT ISSUANCE AGREEMENT (this “Agreement”) is made and entered
into as of June 28, 2007 by and between Hallador Petroleum Company, a Colorado
corporation (the “Corporation”), and Xxxxxx X. Xxxxxx, an individual
(“Participant”).
RECITALS
A. Participant
is to render valuable services to the Corporation, and this Agreement evidences
the special equity incentive award the Board has authorized for Participant
as
an inducement to continue in the Corporation’s service.
B.
All
capitalized terms in this Agreement shall have the meaning assigned to them
in
the attached Appendix A.
NOW,
THEREFORE,
it is
hereby agreed as follows:
1. Grant
of Restricted Stock Units.
The
Corporation hereby awards to Participant, as of the Award Date, Restricted
Stock
Units for the number of shares of Common Stock indicated below. Each Restricted
Stock Unit which vests during Participant’s period of Service shall entitle
Participant to receive one share of Common Stock on the specified issue date.
The number of shares of Common Stock subject to the awarded Restricted Stock
Units, the applicable vesting schedule for those shares, the applicable date
or
dates on which those vested shares shall become issuable to Participant and
the
remaining terms and conditions governing the award (the “Award”) shall be as set
forth in this Agreement.
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Award
Date:
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June
28, 2007
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Number
of Shares Subject
to Award:
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390,000
shares of Common Stock (the “Shares”)
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Vesting
Schedule:
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The
Shares shall vest upon Participant’s completion of the three (3)-year
period of Service measured from the Award Date. However, the Shares
may be
subject to accelerated vesting in accordance with the provisions
of
Paragraph 5 below. The Shares which vest hereunder shall be issued
in
accordance with the provisions of Paragraph 7 of this Agreement,
subject
to the Corporation’s collection of the applicable Withholding
Taxes.
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2. Limited
Transferability.
Prior
to actual receipt of the Shares which vest and become issuable hereunder,
Participant may not transfer any interest in the Award or the underlying Shares.
Any Shares which vest hereunder but which otherwise remain unissued at the
time
of Participant’s death may be transferred pursuant to the provisions of
Participant’s will or the laws of inheritance or to Participant’s designated
beneficiary or beneficiaries of this Award. Participant may make such a
beneficiary designation at any time by filing the appropriate form with the
Board or its designee.
3. Cessation
of Service.
Should
Participant cease Service for any reason prior to vesting in the Shares subject
to this Award, then the Restricted Stock Units awarded hereunder shall be
immediately cancelled, and Participant shall thereupon cease to have any right
or entitlement to receive any Shares under those cancelled units.
4. Stockholder
Rights.
The
holder of this Award shall not have any stockholder rights, including voting,
dividend or liquidation rights, with respect to the Shares subject to the Award
until the Participant becomes the record holder of those Shares upon their
actual issuance following the Corporation’s collection of the applicable
Withholding Taxes.
5. Reorganization/Change
in Control.
A. Any
Restricted Stock Units subject to this Award at the time of a Reorganization
may
be assumed by the successor entity or otherwise continued in full force and
effect. In the event of such assumption or continuation of the Award, no
accelerated vesting of the Restricted Stock Units shall occur at the time of
the
Reorganization; provided,
however, that
if
the Reorganization event also constitutes a Change in Control, then the special
vesting acceleration provisions of Paragraph 5.C of this Agreement shall be
applicable.
B. In
the
event the Award is assumed or otherwise continued in effect, the Restricted
Stock Units subject to the Award will be adjusted immediately after the
consummation of the Reorganization so as to apply to the number and class of
securities into which the Shares subject to those units immediately prior to
the
Reorganization would have been converted in consummation of that Reorganization
had the Shares actually been issued and outstanding at that time.
C. If
the
Restricted Stock Units subject to this Award at the time of the Reorganization
are not assumed or otherwise continued in effect in accordance with Paragraph
5.A above or in event such Reorganization also constitutes a Change in Control,
then those units shall vest immediately upon the effective date of such
Reorganization or Change in Control. The Shares subject to those vested units
shall be issued on the closing date of the Change in Control or Reorganization
transaction triggering such accelerated vesting (or shall otherwise be converted
into the right to receive the same consideration per share of Common Stock
payable to the other stockholders of the Corporation in consummation of that
Reorganization or Change in Control and distributed at the same time as such
stockholder payments), subject to the Corporation’s collection of applicable
Withholding Taxes pursuant to the provisions of Paragraph 7. In no event,
however, shall the issuance of the vested Shares or the distribution of any
other consideration for those Shares be made to Participant later than the
later
of
(i)
the close of the calendar year in which the Change in Control or Reorganization
transaction is effected, or (ii) the fifteenth (15th) day of the third (3rd)
calendar month following the effective date of such transaction.
D. This
Agreement shall not in any way affect the right of the Corporation to adjust,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
6. Adjustment
in Shares.
Should
any change be made to the Common Stock by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of shares, spin-off
transaction, extraordinary dividend or distribution or other similar change
affecting the outstanding Common Stock as a class without the Corporation’s
receipt of consideration, or should the value of outstanding shares of Common
Stock be substantially reduced as a result of a spin-off transaction or an
extraordinary dividend or distribution, or should there occur any merger,
consolidation or other reorganization, then equitable
adjustments shall be made to the total number and/or class of securities
issuable
pursuant to this Award. Such adjustments shall be made in such manner as the
Board deems appropriate in order to reflect such change and thereby preclude
a
dilution or enlargement of benefits hereunder. The determination of the Board
shall be final, binding and conclusive. In the event of a Change in Control
or
Reorganization, the adjustments (if any) shall be made in accordance with the
provisions of Paragraph 5.
7. Issuance
of Shares of Common Stock/Collection of Withholding
Taxes.
A. On
the
date on which the Shares vest in accordance with the provisions of this
Agreement or as soon as administratively practicable following such vesting
date, the Corporation shall issue to or on behalf of Participant a certificate
for those vested Shares, subject to the Corporation’s collection of the
applicable Withholding Taxes and Participant’s delivery of any representations
required of him or her pursuant to Paragraph 8.B. Such issuance shall be
effected no later than the later
of (i)
the end of the calendar year in which the applicable vesting date occurs, or
(ii) the fifteenth (15th) day of the third (3rd) calendar month following such
vesting date, with the applicable Withholding Taxes to be collected on or before
such issuance.
B. Unless
Participant (i) otherwise makes satisfactory arrangements with the Corporation
on or before the date on which the Shares vest under this Award to pay the
applicable Withholding Taxes through the delivery of a check payable to the
Corporation in a dollar
amount equal to the Withholding Taxes which the Corporation must collect from
Participant in connection with the vesting and concurrent issuance of such
Shares, and
(ii)
in fact delivers such check to the Corporation not later than that vesting
date,
the Corporation shall collect the applicable Withholding Taxes by withholding
from the vested Shares otherwise issuable to Participant at that time, a portion
of those Shares with a Fair Market Value (measured as of the vesting date)
equal
to the applicable Withholding Taxes; provided,
however,
that
the number of Shares so withheld shall not exceed in Fair Market Value the
amount necessary to satisfy the Corporation’s required tax withholding
obligations using the minimum statutory withholding rates for federal and state
tax purposes, including payroll taxes, that are applicable to supplemental
taxable income.
C. Except
as
otherwise provided in Paragraph 5 and Paragraph 7.B, the settlement of all
Restricted Stock Units which vest under the Award shall be made solely in shares
of Common Stock. In no event, however, shall any fractional shares be issued.
Accordingly, the total number of shares of Common Stock to be issued pursuant
to
that Award shall, to the extent necessary, be rounded down to the next whole
share in order to avoid the issuance of a fractional share.
8. Securities
Law Compliance
A. The
Shares issued under this Agreement will not be registered under the 1933 Act
and
will be issued to Participant in reliance upon the private placement exemption
from such registration provided under Section 4(2) of the 1933 Act. Participant
hereby confirms that Participant has been informed that the issued Shares will
be restricted securities under the 1933 Act and may not be resold or transferred
unless those shares are first registered under the Federal securities laws
or
unless an exemption from such registration is available. Accordingly,
Participant hereby acknowledges that Participant will acquire the Shares for
investment purposes only and not with a view to resale and will hold the Shares
for an indefinite period and that Participant is aware that SEC Rule 144 issued
under the 1933 Act which exempts certain resales of restricted securities will
require such shares to be held for a period of at least one year after their
issuance pursuant to this Agreement.
B. Upon
demand by the Corporation, Participant shall deliver to the Corporation a
representation in writing that Participant will acquire the Shares issued under
this Agreement for investment only and not for resale or with a view to
distribution, and containing such other representations and provisions with
respect thereto as the Corporation may require. Should the Corporation make
such
demand, then delivery of such representation shall be a condition precedent
to
Participant’s right to the issuance of the Shares.
C. Participant
shall make no disposition of the issued Shares unless and until there is
compliance with all of the following requirements:
(i) Participant
shall have provided the Corporation with a written summary of the terms and
conditions of the proposed disposition.
(ii) Participant
shall have provided the Corporation with an opinion of counsel, in form and
substance satisfactory to the Corporation, that (i) the proposed disposition
does not require registration of the Shares under the 1933 Act, or (ii) all
appropriate action necessary for compliance with the registration requirements
of the 1933 Act or any exemption from registration available under the 1933
Act
(including Rule 144) has been taken.
The
Corporation shall not
be
required (i) to transfer on its books any Shares issued pursuant to this
Agreement which have been sold or transferred in violation of the provisions
of
this Agreement, or
(ii) to
treat as the owner of those Shares, or otherwise to accord voting, dividend
or
liquidation rights to, any transferee to whom the Shares have been transferred
in contravention of this Agreement.
D.
The
stock certificates for any Shares issued under this Agreement shall be endorsed
with the following restrictive legend:
“The
shares represented by this certificate have not been registered under the
Securities Act of 1933. The shares may not be sold or offered for sale in the
absence of (a) an effective registration statement for the shares under such
Act, (b) a ‘no action’ letter of the Securities and Exchange Commission with
respect to such sale or offer or (c) an opinion of counsel, in form satisfactory
to the Corporation, that registration under such Act is not required with
respect to such sale or offer.”
9. Benefit
Limit. In
the
event the vesting and issuance of the Shares subject to this Award would
constitute a parachute payment under Code Section 280G, the vesting and issuance
of those Shares shall be subject to reduction to the extent necessary to assure
that the number of Shares which vest and are issued under this Award will be
limited to the greater
of
(i) the number of Shares which can vest and be issued without triggering a
parachute payment under Code Section 280G, or (ii) the maximum number of
Shares which can vest and be issued under this Award so as to provide the
Participant with the greatest after-tax amount of such vested and issued Shares
after taking into account any excise tax the Participant may incur under Code
Section 4999 with respect to those Shares and any other benefits or payments
to
which the Participant may be entitled in connection with any change in control
or ownership of the Corporation or the subsequent termination of the
Participant’s Service.
10. Compliance
with Other Laws and Regulations.
The
issuance of shares of Common Stock pursuant to the Award shall be subject to
compliance by the Corporation and Participant with all applicable requirements
of law relating thereto and with all applicable regulations of any Stock
Exchange on which the Common Stock may be listed for trading at the time of
such
issuance.
11. Notices.
Any
notice required to be given or delivered to the Corporation under the terms
of
this Agreement shall be in writing and addressed to the Corporation at its
principal corporate offices. Any notice required to be given or delivered to
Participant shall be in writing and addressed to Participant at the address
indicated below Participant’s signature line on this Agreement. All notices
shall be deemed effective upon personal delivery or upon deposit in the U.S.
mail, postage prepaid and properly addressed to the party to be
notified.
12. Successors
and Assigns.
Except
to the extent otherwise provided in this Agreement, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the Corporation
and its successors and assigns and Participant and the legal representatives,
heirs and legatees of Participant’s estate and any beneficiaries of the Award
designated by Participant.
13. Construction.
All
interpretations and constructions of the provisions of this Agreement and all
determinations on any questions arising under this Agreement shall be made
by
the Board, and its decisions on such matters shall be conclusive and binding
on
all persons having an interest in this option.
14. Governing
Law.
The
interpretation, performance and enforcement of this Agreement shall be governed
by the laws of the State of Colorado without resort to that State’s
conflict-of-laws rules.
15. Employment
at Will.
Nothing
in this Agreement shall confer upon Participant any right to continue in Service
for any period of specific duration or interfere with or otherwise restrict
in
any way the rights of the Corporation (or any Subsidiary employing or retaining
Participant) or of Participant, which rights are hereby expressly reserved
by
each, to terminate Participant’s Service at any time for any reason, with or
without cause.
IN
WITNESS WHEREOF,
the
parties have executed this Agreement on the day and year first indicated
above.
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By:
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/s/
Xxxxx Xxxxxx
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Title:
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Chairman
of the Board
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PARTICIPANT:
Xxxxxx
X. Xxxxx
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Signature:
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/s/
Xxxxxx X. Xxxxxx
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Address:
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1-LA/943456.2
APPENDIX
A
DEFINITIONS
The
following definitions shall be in effect under the Agreement:
A. Agreement shall
mean this Restricted Stock Unit Issuance Agreement.
B. Award
shall
mean the award of Restricted Stock Units made to Participant pursuant to the
terms of the Agreement.
C. Award
Date
shall
mean the date the Restricted Stock Units are awarded to Participant pursuant
to
the Agreement and shall be the date indicated in Paragraph 1 of the
Agreement.
D. Board
shall
mean the Corporation’s Board of Directors.
E. Change
in Control
shall
mean any change in control or ownership of the Corporation which occurs by
reason of one or more of the following events:
(i) the
acquisition of any person or group of related persons (as determined pursuant
to
section 13(d)(3) of the 0000 Xxx) of beneficial ownership of securities of
the
Corporation representing fifty percent (50%) or more of the total number of
votes that may be cast for the election of Board members, or
(ii) stockholder
approval of (A) any agreement for a merger or consolidation in which the
Corporation will not survive as an independent corporation or (B) any sale,
exchange or other disposition of all or substantially all of the Corporation’s
assets.
In
determining whether a subparagraph (i) acquisition has occurred, the person
acquiring beneficial ownership of the securities must be someone other than
a
person or an affiliate of a person that, as of January 15, 1993, is the
beneficial owner of securities of the Corporation representing twenty percent
(20%) or more of the total number of votes that may be cast for the election
of
Board members. The Board’s reasonable determination as to whether a Change in
Control event has occurred shall be final and conclusive.
F. Code shall
mean the Internal Revenue Code of 1986, as amended.
G. Common
Stock
shall
mean the shares of the Corporation’s common stock.
H. Corporation
shall
mean Hallador Petroleum Company and any successor corporation to all or
substantially all of the assets or voting stock of Hallador Petroleum Company,
which shall by appropriate action assume the Award.
I. Employee
shall
mean an individual who is in the employ of the Corporation (or any Parent or
Subsidiary), subject to the control and direction of the employer entity as
to
both the work to be performed and the manner and method of
performance.
J. Fair
Market Value
per
share of Common Stock on any relevant date shall be determined in accordance
with the following provisions:
(i) If
the
Common Stock is listed upon one or more established Stock Exchanges, then the
Fair Market Value per share shall be deemed to be the averages of the quoted
closing prices of the Common Stock on such Stock Exchanges on the date for
which
the determination is made, or if no sale shall have been made on any Stock
Exchange on that day, on the next preceding day on which there was such a sale.
(ii) If
the
Common Stock is not listed upon an established Stock Exchange but is actively
traded on the NASDAQ System, the Fair Market Value per share shall be deemed
to
be the last reported sale price for the date for which the determination is
made
or (in the absence of any sale on such date) the mean between the dealer “bid”
and “ask” closing prices of the Common Stock on the NASDAQ System on such day
or, if there shall have been no trading or quotes of the Common Stock on that
day, on the next preceding day on which there was such trading or quotes.
(iii) If
none
of the foregoing apply, the Fair Market Value per share shall be deemed to
be an
amount as determined in good faith by the Board by applying any reasonable
valuation method.
K. 1933
Act
shall
mean the Securities Act of 1933, as amended.
L. 1934
Act
shall
mean the Securities Exchange Act of 1934, as amended.
M. Participant
shall
mean the person to whom the Award is made pursuant to the
Agreement.
N. Parent shall
mean any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation, provided each corporation in the
unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
O. Restricted
Stock Unit shall
mean each unit subject to the Award which shall entitle Participant to receive
one (1) share of Common Stock upon the vesting of that unit.
P. Reorganization
shall
mean the occurrence of any of the following transactions:
(i) the
Corporation is merged or consolidated with another corporation and the
Corporation is not the surviving corporation, or
(ii) all
or
substantially all of the assets of the Corporation are acquired by another
entity, or
(iii) the
Corporation is liquidated or reorganized,
Q. Service
shall
mean Participant’s performance of services for the Corporation (or any Parent or
Subsidiary) in the capacity of an Employee, a non-employee member of the Board
or a consultant or independent advisor. Participant shall be deemed to cease
Service immediately upon the occurrence of either of the following events:
(i)
Participant no longer performs services in any of the foregoing capacities
for
the Corporation (or any Parent or Subsidiary), or (ii) the entity for which
Participant performs such services ceases to remain a Parent or Subsidiary
of
the Corporation, even though Participant may subsequently continue to perform
services for that entity. Service shall not be deemed to cease during a period
of military leave, sick leave or other personal leave approved by the
Corporation. Except to the extent otherwise required by law or expressly
authorized by the Board or the Corporation’s written leave of absence policy, no
Service credit shall be given for vesting purposes for any period Participant
is
on a leave of absence.
R. Stock
Exchange shall
mean the American Stock Exchange, the Nasdaq Global or Global Select Market
or
the New York Stock Exchange.
S. Subsidiary
shall
mean any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation, provided each corporation (other
than the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
T. Withholding
Taxes
shall
mean (i) the employee portion of the federal, state and local employment taxes
required to be withheld by the Corporation in connection with the vesting and
concurrent issuance of the shares of Common Stock under the Award and (ii)
the
federal, state and local income taxes required to be withheld by the Corporation
in connection with such vesting and issuance of those shares.
