Second Amended and Restated Independent Director Appointment Agreement
Exhibit
10.3
Second
Amended and Restated
Independent
Director Appointment Agreement
This
Second Amended and Restated Independent Director Appointment Agreement
(“Agreement”) is entered into and made effective as of May 1, 2010, by and
between Recovery Energy, Inc. a Nevada corporation (the “Company”), and Xxxxx X.
Xxxxxx (“Xxxxxx”).
WHEREAS,
the Company and Xxxxxx previously entered into an Independent Director
Appointment Agreement dated as November 16, 2009 and an Amended and Restated
Independent Director Appointment Agreement dated as of December 31, 2009
(together, the "Original Agreement") in connection with the retention
of Xxxxxx’x services as set forth herein, and the Company and Xxxxxx wish to
amend the Original Agreement in order to continue to retain Xxxxxx'x services
under the terms set forth herein;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants set forth
below, the Original Agreement is amended and restated as follows:
1. Appointment: The
Company hereby agrees to appoint Xxxxxx as the Independent Director on the Board
of Directors (the “Board”) of the Company, and Xxxxxx hereby accepts such
position, on the terms and conditions set forth below. Xxxxxx’x
authority shall be consistent with that normally associated with and appropriate
for such a position.
2. Start
Date: Xxxxxx’x appointment will be effective on November 16,
2009 (the “Effective Date”).
3. Compensation
and Expenses:
(a) Stock
Compensation:
(i) Initial
Grant. On January 1, 2011, the Company will issue to Xxxxxx
200,000 shares of common stock (the “Initial Grant”), which common stock shall
vest, subject to acceleration as provided below, in the following increments on
the specified dates, so long as Xxxxxx is a director on such date:
(A) 101,666
shares shall vest on January 1, 2011;
(B) 15,000
shares shall vest on April 1, 2011;
(C) 15,000
shares shall vest on July 1, 2011;
(D) 15,000
shares shall vest on September 1, 2011;
(E) 26,667
shares shall vest on January 1, 2012; and
(F) 26,667
shares shall vest on January 1, 2013.
Notwithstanding
any provision to the contrary, the Initial Grant shall vest upon the earlier to
occur of a “Change in Control” of the Company (provided Xxxxxx is a director
immediately prior to the "Change in Control") or the termination of Xxxxxx’x
service as an Independent Director other than by Xxxxxx’x involuntary
resignation or for “Cause” (as each term is defined below).
For
purposes of this Agreement, “Change in Control” shall mean the occurrence,
subsequent to the Effective Date, of any of the following: (A) by a transaction
or series of transactions, any “person” or “group” (within the meaning of
Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)), becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of more than 30% of the
combined voting power of the Company’s then outstanding securities (provided
such person or group was not a beneficial owner of more than 30% of the combined
voting power of the Company’s then outstanding securities as of the Effective
Date); (B) as a result of any merger, consolidation, combination or sale or
issuance of securities of the Company, or as a result of or in connection with a
contested election of directors, the persons who were directors of the Company
as of the Effective Date cease to constitute a majority of the Board; (C) by a
transaction or series of transactions, the authority of the Board over any
activities of the Company becomes subject to the consent, agreement or
cooperation of a third party other than shareholders of the
Company.
For
purposes of this Agreement, “Cause” shall mean (A) Xxxxxx’x conviction by a
court of competent jurisdiction as to which no further appeal can be taken of a
felony (other than a violation based on operation of a vehicle) or entering the
plea of nolo contendere to such crime by Xxxxxx; (B) Xxxxxx’x commission of a
crime involving fraud or intentional dishonesty, which results in Xxxxxx’x
substantial personal enrichment and material adverse effect to the Company; (C)
Xxxxxx’x becoming subject to any securities related sanctions related to the
Company other than those based on an act of the Company itself for which Xxxxxx
is charged solely as a result of his position with the Company.
(b) Cash
Compensation: On a quarterly basis, the Company shall pay to
Xxxxxx $2,500 in cash compensation as directors fees.
(c) Expenses for this
Agreement: Within 30 days of receipt of an invoice, the
Company will reimburse Xxxxxx for reasonable legal expenses incurred in
connection with this Agreement.
(d) Registration of
Shares. Upon request of Xxxxxx from time to time, the Company
will promptly file a registration statement with the Securities and Exchange
Commission covering the shares of Common Stock contained in the Initial Grant
and the Subsequent Grants, provided, that each such registration statement must
cover a minimum of 100,000 shares of Common Stock. The Company may
include shares of Common Stock owned by other persons or to be issued by the
Company in each such registration statement.
4. Scope of
Responsibilities. As an Independent Director, subject to the
terms of the immediately following paragraph, Xxxxxx shall be responsible for
contributing to the development and implementation of the Company’s strategic
plan, locating and reviewing prospective acquisition targets, overseeing the
development plan of acquired properties, and providing input on the Company’s
development plan. Xxxxxx will initially serve on the Company’s
Compensation Committee and as Board Secretary. Xxxxxx shall provide those
services required of an Independent Director under the Company’s articles of
incorporation and bylaws, as both may be amended from time to time, and under
the General Corporation Law of Nevada, the federal securities laws and other
state and federal laws and regulations, as applicable; provided, however, in the
event of a conflict or inconsistency between this Agreement and any governing
document of the Company, this Agreement shall control. In performing
such activities, Xxxxxx will devote only such time as he in his sole discretion
deems necessary and appropriate.
Xxxxxx
for his own account and in collaboration with others is engaged in and will
continue to be engaged in oil and gas exploration, development and production
outside of the Company’s business. The Company expressly acknowledges
and agrees that if Xxxxxx becomes aware of a business opportunity, he shall have
no affirmative duty to present or make such opportunity available to the
Company. Furthermore, in the event Xxxxxx pursues an opportunity for
his own account or in collaboration with others, the Company shall not be
entitled to any interest in or profits from such property or otherwise claim any
right or damages resulting from Xxxxxx’x pursuit of such
opportunity.
The
relationship between the parties shall be that of independent contracting
parties. The Board and the Company expressly acknowledge and agree that neither
shall have the right to direct Xxxxxx with respect to the means or manner in
which he fulfills his obligations and responsibilities under this Agreement. The
Board and the Company are solely interested in the results obtained by Xxxxxx in
connection with his performance of services required
hereunder. Except as specifically provided in this Agreement, the
Company hereby waives any conflict or potential conflict resulting from Xxxxxx’x
activities conducted apart from the business of the Company.
5. Termination. Either
party may terminate this Agreement, thereby terminating Xxxxxx’x service as an
Independent Director, for any reason whatsoever, upon 30 days written notice as
provided in Section 10 herein. In the event of such notice of
termination by the Company or by Xxxxxx, within 30 days, the Company shall pay
Xxxxxx any expenses, if any, he has incurred on the Company’s behalf to date
that have not otherwise been reimbursed. Following termination of
Xxxxxx’x service, the Initial Grant shall vest as provided in Section 3(a)(i)
and the Subsequent Grants shall be issued as provided in Section
3(a)(ii).
6. Location. Xxxxxx’x
office for Company business will be based in the vicinity of Denver,
Colorado. Xxxxxx will have the authority to office where he chooses
and to change such office if and when he chooses, but the Company’ contribution
for related expenses shall be limited as provided in Section 3(b)
herein.
7. Representations
and Warranties. The Company represents and warrants to Xxxxxx
that this Agreement has been duly authorized, executed and delivered by the
Company and, upon execution by Xxxxxx, constitutes a legal, valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms.
8. Indemnity. The
Company agrees that if Xxxxxx is made a party to or is threatened to be made a
party to any action, suit or proceeding, whether civil, criminal, administrative
or investigative (a “Proceeding”), by reason of the fact that Xxxxxx is or was a
trustee, director or officer of the Company or any predecessor or successor to
the Company or any of their affiliates or is or was serving at the request of
the Company, any predecessor or successor to the Company or any of their
affiliates as a trustee, director, officer, member, employee or agent of another
corporation or a partnership, joint venture, limited liability company, trust or
other enterprise, including, without limitation, service with respect to
employee benefit plans, whether or not the basis of such Proceeding alleges
action in an official capacity as a trustee, director, officer, member, employee
or agent while serving as a trustee, director, officer, member, employee or
agent, Xxxxxx shall be indemnified and held harmless by the Company to the
fullest extent authorized by Nevada law, as the same exists or may hereafter be
amended, against all Costs (as defined below) incurred or suffered by Xxxxxx in
connection therewith, and such indemnification shall continue as to Xxxxxx even
if he has ceased to be an officer, director, trustee or agent, or is no longer
employed by the Company and shall inure to the benefit of his heirs, executors
and administrators. The foregoing indemnity is contractual and will
survive any adverse amendment to or repeal of the bylaws or any other governing
document of the Company.
(a) Costs. For
purposes of this Section 8, the term “Costs” shall include, without limitation
unless deemed for cause, damages, losses, judgments, liabilities, fines,
penalties, excise taxes, settlements, and costs, attorneys’ fees, accountants’
fees, and disbursements and costs of attachment or similar bonds,
investigations, and any expenses of establishing a right to indemnification
under this Agreement.
(b) Enforcement. If
a claim or request under this Section 8 is not paid by the Company or on its
behalf, within thirty (30) days after a written claim or request has been
received by the Company, Xxxxxx may at any time thereafter bring suit against
the Company to recover the unpaid amount of the claim or request and if
successful in whole or in part, Xxxxxx shall be entitled to be paid also the
expenses of prosecuting such suit. All obligations for indemnification hereunder
shall be subject to, and paid in accordance with, applicable Nevada
law.
(c) Payment of
Costs. Costs incurred by Xxxxxx in connection with any
Proceeding shall be paid by the Company within thirty (30) days notice of
Xxxxxx’x request for such payment, provided that Xxxxxx has delivered to the
Company written notification of (i) his agreement to reimburse the Company for
Costs with respect to which Xxxxxx is not eligible for payment or reimbursement,
and (ii) a statement of his good faith belief that he has satisfied the standard
of conduct necessary for indemnification under this Section 8.
(d) Insurance. The
Company will maintain a Director’s and Officer’s Insurance Policy naming Xxxxxx
as a covered party in amount deemed mutually sufficient to the Company and
Xxxxxx.
9. Registration
of Shares. All shares issued pursuant to this Agreement, as of
the date of issuance, shall have been registered under the Securities Act of
1933 and shall be freely transferable without restriction, subject only to the
vesting requirements under Section 3(a)(ii) herein, as applicable.
10. Survival
of Certain Provisions. The
representations, warranties and covenants and indemnity provisions contained in
Sections 7 and 8 of this Agreement and the Company’s obligation to pay or issue
to Xxxxxx, or to cause Xxxxxx to vest in, any compensation or compensatory
awards earned pursuant hereto shall remain operative and in full force and
effect regardless of any completion or termination of this Agreement and shall
be binding upon, and shall inure to the benefit of any successors, assigns,
heirs and personal representatives of the Company, the indemnified parties and
any such person.
11. Notices. Notice
given pursuant to any of the provisions of this Agreement shall be in writing
and shall be mailed or delivered (a) if to the Company, at its offices at 0000
Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000, with a copy to Xxxxxxx Xxxxxxx, at
his office at Xxxxxxxxxx Hyatt Xxxxxx Xxxxxxx, LLP, 000 00xx
Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000 and (b) if to Xxxxxx, at his
offices at 0000 X. Xxxxxxxx Xxx, #000, Xxxxxxxxx Xxxxxxx, XX 00000.
12. Counterparts. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument.
13. Third
Party Beneficiaries. This Agreement has been and is made
solely for the benefit of the Parties hereto, and their respective successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement.
14. Severability. Whenever
possible, each provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction
but this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained
herein.
15. Legal
Fees. If any
arbitration or litigation shall rise between the Company and Xxxxxx regarding
any provision of this Agreement, the Company shall reimburse Xxxxxx for all
legal fees and expenses incurred by him in connection with such contest or
dispute unless an unlawful act has preceded, but only if Xxxxxx substantially
prevails in such action. Such reimbursement shall be made as soon as practicable
following the resolution of such contest or dispute (whether or not appealed) to
the extent the Company receives reasonable written evidence of such fees and
expenses.
16. Reimbursement
of Expenses. Xxxxxx shall be reimbursed by the Company for all
ordinary and necessary expenses incurred by Xxxxxx in the performance of his
duties or otherwise in furtherance of the business of the Company, as well as
any expenses specified in this Agreement, in accordance with the policies of the
Company in effect from time to time. No reimbursement will be made
later than the close of the calendar year following the calendar year in which
the expense was incurred. Expenses eligible for payment or
reimbursement in any one taxable year shall not affect the amount of expenses
eligible for payment or reimbursement in any other taxable year, and the right
to expense payment or reimbursement shall not be subject to liquidation or
exchange for any other benefit.
17. Modification;
Entire Agreement. No provisions of this Agreement may be
amended, modified, or waived unless such amendment or modification is agreed to
in writing signed by Xxxxxx and by a duly authorized officer of the Company, and
such waiver is set forth in writing and signed by the party to be charged. No
waiver by either party hereto at any time of any breach by the other party
hereto of 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. 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 set forth
expressly in this Agreement. The respective rights and obligations of the
parties hereunder of this Agreement shall survive the termination of this
Agreement to the extent necessary for the intended preservation of such rights
and obligations. Except or otherwise provided in Section 8 herein, the validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Colorado without regard to its conflicts of law
principles.
18. Choice of
Law, Jurisdiction and Venue. This Agreement shall be governed
by, construed, and enforced in accordance with the laws of the State of
Colorado, without regard to Colorado’s choice of law rules. Any and
all actions, suits, or judicial proceedings upon any claim arising from or
relating to this Agreement, subject to Section 8 herein, shall be instituted and
maintained in the State of Colorado. If it is judicially determined that either
party may file an action, suit or judicial proceeding in federal court, such
action, suit or judicial proceeding shall be in the Federal District Court for
the District of Colorado.
The
parties’ authorized representatives have executed this Agreement as of the date
above.
Xxxxx
X.
Xxxxxx
Recovery Energy, Inc.
By: /s/
Xxxxx X.
Xxxxxx By: /s/
Xxxxxxx X.
Xxxxxxx
Xxxxxxx
X. Xxxxxxx,
Chief Financial
Officer
