OSAGE EXPLORATION AND DEVELOPMENT, INC. RESTRICTED STOCK AGREEMENT GREG FRANKLIN
OSAGE
EXPLORATION AND DEVELOPMENT, INC.
XXXX
XXXXXXXX
THIS
AGREEMENT, dated and effective as of November 9, 2007 (the "Grant Date") by
and
between Osage Exploration and Development, Inc., a Delaware corporation (the
“Company"), and Xxxx Xxxxxxxx (the "Executive"), is entered into as
follows:
WHEREAS,
the Company and the Executive are parties to an Employment Agreement made and
entered into on November 9, 2007 (the "Employment Agreement"); and
WHEREAS,
pursuant to the Employment Agreement, the Effective Date of the Executive's
employment with the Company is November 9, 2007 ("Effective Date");
and
WHEREAS,
the Board of Directors of the Company has determined that, as an inducement
material to the Executive's agreement to enter into employment with the Company,
in satisfaction of the Company's obligation under Section 4(c) of the Employment
Agreement, and subject to the restrictions stated below, the Executive should
be
granted shares of the Company’s $0.0001 par value Common Stock (the "Restricted
Stock");
NOW,
THEREFORE, the parties hereby agree as follows:
1.
Grant
of Stock.
Pursuant
to Section 4(c) of the Employment Agreement, the Executive is hereby granted,
effective on the Grant Date and subject to the terms and conditions of this
Agreement, 2,000,000 shares of the Company’s Common Stock $0.0001 par value (the
“Restricted Stock”).
2.
Issuance of Stock.
As
soon
as practicable, the Company shall cause the shares of Restricted Stock to be
issued in the Executive's name. The Restricted Stock shall be held in the
custody of the Company or its designee for the Executive's account. The
Restricted Stock shall be subject to the restrictions described herein. The
Restricted Stock shall bear appropriate legends with respect to the restrictions
described herein. The Restricted Stock has been granted pursuant to the Osage
Exploration and Development, Inc. 2007 Equity Based Compensation Plan (the
“Plan”) and is subject to all provisions of the Plan, which are hereby
incorporated herein by reference, and to the following provisions of this
Agreement (capitalized terms not defined herein are used as defined in the
Plan):
3.
Vesting.
(a)
The
interest of the Executive in the Restricted Stock shall vest as to 100% of
the
Restricted Stock (2,000,000) on January 1, 2009.
(b)
Notwithstanding the foregoing, pursuant to and in accordance with the terms,
conditions and definitions of the Employment Agreement, the interest of the
Executive in the Stock shall vest as to 100% of the then unvested Restricted
Stock upon the Executive's termination of employment (i) through a Change of
Control, (ii) upon termination of employment for Good Reason or (iii) upon
termination without Cause (as such terms are defined in the Employment
Agreement).
4.
Restrictions.
(a)
No
portion of the Restricted Stock or rights granted hereunder may be sold,
transferred, assigned, pledged or otherwise encumbered or disposed of by the
Executive until such portion of the Restricted Stock becomes vested in
accordance with Section 3 of this Agreement. The period of time between the
date
hereof and the date all Restricted Stock becomes vested is referred to herein
as
the "Restriction Period."
(b)
If
the Executive's employment with the Company is terminated for any reason which
does not give rise to 100% vesting of the Restricted Stock, as provided in
Section 3 above, the balance of the Restricted Stock subject to the provisions
of this Agreement which have not vested at the time of the Executive's
termination of employment shall be forfeited by the Executive, and ownership
transferred back to the Company.
5.
Executive Shareholder Rights.
During
the Restriction Period, the Executive shall have all the rights of a shareholder
with respect to the Restricted Stock except for the right to transfer the
Restricted Stock, as set forth in Section 4 of this Agreement. Accordingly,
the
Executive shall have the right to vote the Restricted Stock and to receive
any
cash dividends paid to or made with respect to the Restricted Stock, provided,
however, that dividends paid, if any, with respect to that Restricted Stock
which has not vested at the time of the dividend payment shall be held in the
custody of the Company and shall be subject to the same restrictions that apply
to the corresponding Restricted Stock.
6.
Changes in Stock.
In
the
event that as a result of any stock dividend, stock split or other change in
the
Restricted Stock, and by virtue of any such change, the Executive shall in
his
capacity as owner of unvested shares of Restricted Stock which have been awarded
to him (the "Prior Stock") be entitled to new or additional or different shares
or securities, such new or additional or different shares or securities shall
thereupon be considered to be unvested Restricted Stock and shall be subject
to
all of the conditions and restrictions which were applicable to the Prior Stock
pursuant to this Agreement.
7.
Taxes.
Regardless
of any action the Company takes with respect to any or all income tax, social
insurance, payroll tax, payment on account or other tax-related withholding
(“Tax-Related Items”), the Executive acknowledges that the ultimate liability
for all Tax-Related Items is and remains the Executive’s responsibility and that
the Company.
The
Executive shall pay or make adequate arrangements satisfactory to the Company
to
satisfy all withholding and payment on account obligations of the Company.
If
the Executive does not make such payment to or arrangements with the Company,
the Company shall have the right to withhold from any payment of any kind
otherwise due to the Executive from the Company, any federal, state or local
taxes of any kind required by law to be withheld with respect to the award
or
vesting of the Restricted Stock. Alternatively, or in addition, if permissible
under local law, the Company may (a) sell or arrange for the sale of the
Restricted Stock or (b) withhold such amount in shares of Restricted Stock
to
meet the withholding obligation for Tax-Related Items.
For
purposes of Internal Revenue Code Section 83, the Executive’s receipt of
Restricted Stock may be deemed a transfer in connection with the performance
of
services. Because of the restrictions on transfer and vesting requirements,
the
Executive will recognize taxable income in the tax year in which the Restricted
Stock vests. The amount of taxable income is the fair market value of the
Restricted Stock at
the time the Restricted Stock vests.
As an alternative, an election is available under Internal Revenue Code
Section 83(b) to include the excess amount in taxable income for the year of
the
grant. If
a Section 83(b) election were made, the Company would report the value of the
Restricted Stock to the Internal Revenue Service and will include the excess
amount on your W-2 for the year of grant. IN
CONSIDERATION OF THE EXECUTIVE’S EMPLOYMENT AND THE ISSUANCE OF THE RESTRICTED
STOCK TO THE EXECUTIVE, THE EXECUTIVE AGREES NOT TO MAKE A SECTION 83(b)
ELECTION WITH RESPECT TO THE RESTRICTED STOCK.
8.
Miscellaneous.
(a)
The
Company shall not be required (i) to transfer on its books any shares of
Restricted Stock which shall have been sold or transferred in violation of
any
of the provisions set forth in this Agreement, or (ii) to treat as owner of
such
shares or to accord the right to vote as such owner or to pay dividends to
any
transferee to whom such shares shall have been so transferred.
(b)
The
parties agree to execute such further instruments and to take such action as
may
reasonably be necessary to carry out the intent of this Agreement.
(c)
Any
notice required or permitted hereunder shall be given in writing and shall
be
deemed effectively given upon delivery to the Executive at her address then
on
file with the Company.
(d)
This
Agreement shall not be construed so as to grant the Executive any right to
remain in the employ of the Company.
(e)
The
parties agree that: (i) this Restricted Stock Agreement and the grant of
Restricted Stock hereunder are in full and final satisfaction of the Company's
obligations under Section 4(c) of the Employment Agreement; (ii) the Company
shall have no further obligation to the Executive pursuant to Section 4(c)
of
the Employment Agreement except as stated herein; and (iii) the Company shall
not have any further obligation to the Executive relating to the grant of stock
except as stated herein.
(f)
This
Agreement and the Employment Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof.
IN
WITNESS WHEREOF, the undersigned have executed this Agreement effective on
the
date first set above.
| EXECUTIVE | OSAGE EXPLORATION AND DEVELOPMENT, INC. |
| _________________ | ____________________________________________ |
| Xxxx Xxxxxxxx | Xxx Xxxxxxxx, President and Chief Executive Officer |
