ORIENT PETROLEUM AND ENERGY, INC. RESTRICTED STOCK AGREEMENT
Exhibit 99.2
ORIENT PETROLEUM AND ENERGY, INC.
This Restricted Stock Agreement (“Agreement”) is made and entered into as of the date set forth below, by and between Orient Petroleum and Energy, Inc., a Nevada corporation (the “Company”) and the employee of the Company named in Section 1(b) (“Grantee”).
In consideration of the covenants herein set forth, the parties hereto agree as follows:
1. Stock Grant Information.
(a) Grant Date: Xxxxx 0, 0000
(x) Grantee: Xxxxxx Xxxxxxx Xxxx
(c) Number of Shares: 10,000
(d) Original Value: $8.40
2. Shares; Value. The Company hereby grants to Grantee, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) (the “Shares”), which Shares have a fair value per share (“Original Value”) equal to the amount set forth in Section 1(d). For the purpose of this Agreement, the terms “Share” or “Shares” shall include the original Shares plus any shares derived therefrom, regardless of the fact that the number, attributes or par value of such Shares may have been altered by reason of any recapitalization, subdivision, consolidation, stock dividend or amendment of the corporate charter of the Company. The number of Shares covered by this Agreement and the Original Value thereof shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a recapitalization, subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company.
3. Vesting. The Shares shall vest in eighteen (18) monthly installments, which shall be as nearly equal as possible, on the last day of the month beginning on March 31, 2011, provided that on the first anniversary of the closing date of an underwritten public offering by the Company of its securities, any unvested Shares shall immediately vest in full. The vesting of the Shares shall be subject to the provisions of this Agreement, including those relating to Grantee’s continued employment with the Company and its Affiliates. If Grantee’s employment is terminated prior to the vesting in full of the Shares, any unvested portion of such Shares shall be
subject to the Repurchase Right of the Company as set forth in Section 4.
3. Investment Intent. Grantee represents and agrees that Grantee is accepting the Shares for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that, if requested, Grantee shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares are registered under the Securities Act of 1933, as amended (the “Act”), Grantee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing
written statement.
4. Restriction upon Transfer. The Shares may not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated by Grantee except as hereinafter provided.
(a) Repurchase Right on Termination of Employment. For the purposes of this Section, a “Repurchase Event” shall mean an occurrence of (i) termination of Grantee's employment by the Company, voluntary or involuntary and with or without cause; or (ii) any attempted transfer by Grantee of the Shares, or any interest therein, in violation of this Agreement. Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation) to purchase all or any
portion of the unvested Shares of Grantee, at a price equal to the par value of the Shares as of the date of the Repurchase Event (“Repurchase Right”). In the event the Company elects to purchase such unvested Shares, the stock certificates representing the same shall be returned to the Company for cancellation.
(b) Exercise of Repurchase Right. Any Repurchase Right under Section 4(a) shall be exercised by giving notice of exercise as provided herein to Grantee. Such right shall be exercised, and the repurchase price thereunder shall be paid, by the Company within a ninety (90) day period beginning on the date of notice to the Company of the occurrence of such Repurchase Event (except in the case of termination of employment, where such option period shall begin upon the occurrence of the Repurchase Event). Such repurchase price shall be payable only in the form of cash (including a check drafted on immediately available funds). Any
Shares not purchased by the Company hereunder shall no longer be subject to the provisions of this Section 4.
(c) Right of First Refusal. In the event Grantee desires to transfer any Shares during his or her lifetime, Grantee shall first offer to sell such Shares to the Company. Grantee shall deliver to the Company written notice of the intended sale, such notice to specify the number of Shares to be sold, the proposed purchase price and terms of payment, and grant the Company an option for a period of thirty (30) days following receipt of such notice to purchase the offered Shares upon the same terms and conditions. To exercise such option, the Company shall give notice of that fact to Grantee within the thirty (30) day notice
period and agree to pay the purchase price in the manner provided in the notice. If the Company does not purchase all of the Shares so offered during foregoing option period, Grantee shall be under no obligation to sell any of the offered Shares to the Company, but may dispose of such Shares in any lawful manner during a period of one hundred and eighty (180) days following the end of such notice period, except that Grantee shall not sell any such Shares to any other person at a lower price or upon more favorable terms than those offered to the Company.
(d) Acceptance of Restrictions. Acceptance of the Shares shall constitute the Grantee's agreement to such restrictions and the legending of Grantee’s certificates with respect thereto. Notwithstanding such restrictions, however, so long as Grantee is the holder of the Shares, or any portion thereof, Grantee shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect thereto.
(e) Permitted Transfers. Notwithstanding any provisions in this Section 4 to the contrary, Grantee may transfer Shares subject to this Agreement to Grantee’s parents, spouse, children, or grandchildren, or a trust for the benefit of Grantee or any such transferee(s); provided, however, that such permitted transferee(s) shall hold the Shares subject to all the provisions of this Agreement (all references to Grantee herein shall in such cases refer mutatis mutandis to the permitted transferee, except in the case of clause (iv) of Section 4(a) wherein the permitted transfer shall be deemed to be rescinded); and provided
further, that notwithstanding any other provisions in this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of Grantee and the Company.
5. Representations and Warranties of Grantee. This Agreement and the grant and issuance of the Shares hereunder is made by the Company in reliance upon the express representations and warranties of Grantee, which by acceptance hereof Grantee confirms that:
(a) The Shares granted to him pursuant to this Agreement are being acquired by Grantee for Grantee’s own account, for investment purposes, and not with a view to, or for sale in connection with, any distribution of the Shares;
(b) The Shares must be held by Grantee indefinitely unless they are subsequently registered under the Act and any applicable state securities laws, or an exemption from such registration is available. The Company is under no obligation to register the Shares or to make available any such exemption;
(c) Grantee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition and to obtain additional information reasonably necessary to verify the accuracy of such information;
(d) Unless and until the Shares represented by this Agreement are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN STOCK AWARD AGREEMENT DATED MARCH 7, 2011, BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.
and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares shall also be placed with the Company's transfer agent; and
(e) Grantee understands that Grantee will recognize income, for federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, as of the Grant Date, exceeds the price paid by Grantee, if any. The acceptance of the Shares by Grantee shall constitute an agreement by Grantee to report such income in accordance with then applicable law. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Grantee’s then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Grantee to make a cash payment to cover such
liability.
6. Lock-up Agreement. Grantee agrees that, in connection with any registration of the Company's securities under the Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company's securities, Grantee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than such Shares as may be included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of 180 days following the effective date of registration of such offering. This Section 6 shall survive any termination of this Agreement.
7. Termination of Agreement. This Agreement shall terminate on the occurrence of any one of the following events: (a) written agreement of all parties to that effect; (b) a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets of the Company; or (c) dissolution, bankruptcy, or insolvency of the Company.
8. Applicable Law. This Agreement shall be governed by the laws of the State of Nevada and subject to the exclusive jurisdiction of the courts therein.
9. Miscellaneous.
(a) Notices. Any notice required to be given pursuant to this Agreement shall be in writing and shall be deemed to have been duly delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Grantee at the last address provided by Grantee for use in the Company's records.
(b) Entire Agreement. This instrument constitutes the sole agreement of the parties hereto with respect to the Shares. Any prior agreements, promises or representations concerning the Shares not included or reference herein shall be of no force or effect. This Agreement shall be binding on, and shall inure to the benefit of, the Parties hereto and their respective transferees, heirs, legal representatives, successors, and assigns.
(c) Enforcement. This Agreement shall be construed in accordance with, and governed by, the laws of the State of Nevada and subject to the exclusive jurisdiction of the courts located in the State of Nevada. If Grantee attempts to transfer any of the Shares subject to this Agreement, or any interest in them in violation of the terms of this Agreement, the Company may apply to any court for an injunctive order prohibiting such proposed transaction, and the Company may institute and maintain proceedings against Grantee to compel specific performance of this Agreement without the necessity of proving the existence or extent of
any damages to the Company. Any such attempted transaction shares in violation of this Agreement shall be null and void.
(d) Validity of Agreement. The provisions of this Agreement may be waived, altered, amended, or repealed, in whole or in part, only on the written consent of all parties hereto. It is intended that each section of this Agreement shall be viewed as separate and divisible, and in the event that any Section shall be held to be invalid, the remaining sections shall continue to be in full force and effect.
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ORIENT PETROLEUM AND ENERGY, INC.
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By:
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/s/ Anping Yao
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Its:
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Chief Executive Officer and Chairman of the Board
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ACCEPTANCE OF AGREEMENT
Grantee hereby voluntarily and knowingly accepts this Agreement and the Shares granted to him or her under this Agreement subject to all provisions of this Agreement.
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/s/ Xxxxxx Xxxxxxx Xxxx
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Grantee’s Signature
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March 7, 2011
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Date
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