RESTRICTED STOCK AGREEMENT
FOR
XXXXX X. XXXXX, XX.
This RESTRICTED STOCK AGREEMENT (the "Agreement") is made and entered into
effective as of April 17, 2007 (the "Effective Date") by and between DUNE
ENERGY, INC., a Delaware corporation ("Company"), and XXXXX X. XXXXX, XX., an
individual resident in the State of Texas ("Xx. Xxxxx").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its shareholders
to appoint Xx. Xxxxx as Senior Vice President and Chief Financial Officer and to
provide incentive to Xx. Xxxxx to join the Company by making this grant of
common stock in accordance with the terms and subject to the conditions provided
in this Agreement;
NOW, THEREFORE, for and in consideration of the mutual premises, covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
1. Award of Restricted Stock. The Board hereby grants to Xx. Xxxxx Seventy-Five
Thousand (75,000) shares of common stock, par value $0.001 per share (the
"Common Stock"), of the Company (collectively the "Restricted Stock"), which
shares are and shall be subject to the terms, provisions and restrictions set
forth in this Agreement.
2. Vesting of Restricted Stock.
(a) Except as otherwise provided in Sections 2(b), 2(c) and 2(d), the
shares of Restricted Stock shall become vested in the following manner and at
the following times, provided that the Continuous Service (as defined in Section
2(d)(ii) below) of Xx. Xxxxx continues through and on the applicable Vesting
Date:
Number of Shares of Restricted
Stock Vesting Date
25,000 The Effective Date
25,000 First anniversary of the Effective Date
25,000 Second anniversary of the Effective Date
There shall be no proportionate or partial vesting of shares of Restricted Stock
in or during the months, days or periods prior to each of the respective Vesting
Dates, and all vesting of shares of Restricted Stock shall occur only on the
respective Vesting Dates. Upon the termination or cessation of Xx. Xxxxx'x
Continuous Service, any portion of the Restricted Stock that is not yet then
vested, and which does not then become vested pursuant to this Section 2, shall
be subject to re-purchase by the Company from Xx. Xxxxx as provided in Section
4, below.
(b) Notwithstanding any other term or provision of this Agreement, in the
event that (i) a "Change in Control" (as defined in Section 2(d)(i) below) of
the Company occurs during Xx. Xxxxx'x Continuous Service, or (ii) Xx. Xxxxx'x
Continuous Service is terminated by the Company without cause (as defined in
that employment agreement of even date herewith between Xx. Xxxxx and the
Company), the shares of Restricted Stock subject to this Agreement shall become
immediately vested as of the date of the Change in Control or such termination
without cause.
(c) Notwithstanding any other term or provision of this Agreement, the
Board shall be authorized, in its sole discretion, based upon its review and
evaluation of the performance of Xx. Xxxxx and of the Company, to accelerate the
vesting of any shares of Restricted Stock under this Agreement, at such times
and upon such terms and conditions as the Board shall deem advisable.
(d) For purposes of this Agreement, the following terms shall have the
meanings indicated:
(i) "Change in Control" shall mean any of the following events:
(1) a merger of consolidation to which the Company is a p arty
if the individuals and entities who were stockholders of the Company immediately
prior to the effective date of such merger or consolidation have beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act) of less than 50% of
the total combined voting power for election of directors of the surviving
corporation following the effective date of such merger or consolidation;
(2) the acquisition or holding of direct or indirect
beneficial ownership (as defined under Rule 13d-3 of the Exchange Act) of
securities of the Company representing in the aggregate 30% or more of the total
combined voting power of the Company's then issued and outstanding voting
securities by any person, entity or group of associated persons or entities
acting in concert, other than any employee benefit plan of the Company or of any
subsidiary of the Company, or any entity holding such securities for or pursuant
to the terms of any such plan;
(3) the sale of all or substantially all of the assets of the
Company to any person or entity that is not a wholly-owned subsidiary of the
Company; or
(4) the approval by the stockholders of the Company of any
plan or proposal for the liquidation of the Company or its material
subsidiaries, other than into the Company.
(ii) "Continuous Service" shall mean the continuous service to the
Company or a Related Entity, without interruption, of Xx. Xxxxx, in Xx. Xxxxx'x
capacity as the Senior Vice President and Chief Financial Officer of the Company
or of any Related Entity. Continuous Service shall not be considered interrupted
(or to have ceased or terminated) in the case of (1) any approved leave of
absence, (2) transfers among the Company, any Related Entity, or any successor
thereto, so long as Xx. Xxxxx continues in his capacity as the Senior Vice
President and Chief Financial Officer thereof, or (3) any change in status, if
and so long as (A) Xx. Xxxxx remains in the service of the Company or a Related
Entity in the capacity of Senior Vice President and Chief Financial Officer
(except as otherwise provided herein), and (B) which change in status is
approved in writing by the Company or a Related Entity in its sole discretion
(with an express acknowledgement that such change in status continues, and does
not cease or terminate, "Continuous Service" for purposes of this Agreement). An
approved leave of absence shall include sick leave or any other authorized
personal leave approved by the Company in writing.
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(iii) "Non-Vested Shares" means any portion of the Restricted Stock
subject to this Agreement that has not become vested pursuant to this Section 2.
(iv) Related Entity" shall mean any Subsidiary, and any business,
corporation, partnership, limited liability company, trust or other entity in
which the Company or a Subsidiary holds a substantial ownership interest,
directly or indirectly.
(v) "Subsidiary" shall mean any corporation or other entity in which
the Company has a direct or indirect ownership interest of 50% or more of the
total combined voting power of the then outstanding securities or interests of
such corporation or other entity entitled to vote generally in the election of
directors or in which the Company has the right to receive 50% or more of the
distribution of profits or 50% or more of the assets on liquidation or
dissolution.
(vi) "Vested Shares" shall mean any portion of the Restricted Stock
subject to this Agreement that is and has become vested pursuant to this Section
2.
3. Delivery of Restricted Stock.
(a) One or more stock certificates evidencing the Restricted Stock shall
be issued in the name of Xx. Xxxxx but shall be held and retained by the
Secretary of the Company until the latest date on which the shares subject to
this Restricted Stock award become Vested Shares pursuant to Section 2 hereof
(the "Applicable Date"). All such stock certificates shall bear the following
legends, along with such other legends that the Board shall deem necessary and
appropriate or which are otherwise required or indicated pursuant to any
applicable stockholders agreement:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A
REGISTRATION UNDER THE 1933 ACT AND SUCH OTHER APPLICABLE LAWS (AS
APPLICABLE) IS IN EFFECT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SAID ACT AND LAWS AS CONFIRMED TO THE ISSUER BY
AN OPINION (IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER) OF
COUNSEL (SATISFACTORY TO THE ISSUER).
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
SUBSTANTIAL VESTING AND OTHER RESTRICTIONS AS SET FORTH IN THE
RESTRICTED STOCK AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL
HOLDER OF THE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. SUCH RESTRICTIONS ARE BINDING ON
TRANSFEREES OF THESE SHARES, AND INCLUDE VESTING CONDITIONS WHICH
MAY RESULT IN THE COMPLETE FORFEITURE OF THE SHARES.
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(b) Xx. Xxxxx shall deposit with the Company stock powers or other
instruments of transfer or assignment, duly endorsed in blank with signature(s)
guaranteed, corresponding to each certificate representing shares of Restricted
Stock until such shares become Vested Shares. If Xx. Xxxxx shall fail to provide
the Company with any such stock power or other instrument of transfer or
assignment, Xx. Xxxxx hereby irrevocably appoints the Secretary of the Company
as his attorney-in-fact, with full power of appointment and substitution, to
execute and deliver any such power or other instrument which may be necessary to
effectuate the transfer of the Restricted Stock (or assignment of distributions
thereon) on the books and records of the Company.
(c) On the Applicable Date (as defined in Section 3(a) above) or as soon
as administratively practicable thereafter, the Company shall promptly cause a
new certificate or certificates to be issued for and with respect to all Vested
Shares and shall deliver the new certificate or certificates, to Xx. Xxxxx. The
new certificate or certificates shall continue to bear those legends and
endorsements that the Company shall deem necessary or appropriate (including
those relating to restrictions on transferability and/or obligations and
restrictions under the Securities Laws).
4. Termination or Cessation of Continuous Service. Upon the termination or
cessation of Xx. Xxxxx'x Continuous Service, any portion of the Restricted Stock
that is not yet then vested, and which does not then become vested pursuant to
Section 2, shall be subject to re-purchase by the Company from Xx. Xxxxx, and
Xx. Xxxxx shall sell to the Company upon the exercise of such right by the
Company, at a purchase price per share of $0.01, the number of shares of
Restricted Stock (rounded up to the nearest whole share) not yet then vested.
The number of shares of Xx. Xxxxx'x Restricted Stock subject to repurchase, at
the time of any stock dividend or other distribution made on or in respect of
Xx. Xxxxx'x Restricted Stock or any subdivision, combination, redemption or
reclassification of the outstanding capital stock of the Company or received in
exchange for Xx. Xxxxx'x Restricted Stock or any part thereof, shall be adjusted
to give effect to such stock dividend, other distribution, subdivision,
combination, redemption or reclassification. The Board shall have the power and
authority to enforce on behalf of the Company any and all rights of the Company
under this Agreement in the event of Xx. Xxxxx'x forfeiture of Non-Vested Shares
pursuant to this Section 4.
5. Rights with Respect to Restricted Stock.
(a) Except as otherwise provided in this Agreement, Xx. Xxxxx shall have,
with respect to all of the shares of Restricted Stock, whether Vested Shares or
Non-Vested Shares, all of the rights of a holder of shares of common stock of
the Company, including without limitation (i) the right to vote such Restricted
Stock, (ii) the right to receive cash dividends, if any, as may be declared on
the Restricted Stock from time to time, and (iii) the rights available to all
holders of shares of common stock of the Company upon any merger, consolidation,
reorganization, liquidation or dissolution, stock split-up, stock dividend or
recapitalization undertaken by the Company; provided, however, that all of such
rights shall be subject to the terms, provisions, conditions and restrictions
set forth in this Agreement (including without limitation conditions under which
all such rights shall be forfeited).
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(b) Notwithstanding any term or provision of this Agreement to the
contrary, the existence of this Agreement, or of any outstanding Restricted
Stock awarded hereunder, shall not affect in any manner the right, power or
authority of the Company to make, authorize or consummate: (i) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger, consolidation or
similar transaction by or of the Company; (iii) any offer, issue or sale by the
Company of any capital stock of the Company, including any equity or debt
securities, or preferred or preference stock that would rank prior to or on
parity with the Restricted Stock and/or that would include, have or possess
other rights, benefits and/or preferences superior to those that the Restricted
Stock includes, has or possesses, or any warrants, options or rights with
respect to any of the foregoing; (iv) the dissolution or liquidation of the
Company; (v) any sale, transfer or assignment of all or any part of the stock,
assets or business of the Company; or (vi) any other corporate transaction, act
or proceeding (whether of a similar character or otherwise).
6. Transferability. The shares of Restricted Stock are not transferable until
and unless they become Vested Shares in accordance with this Agreement. The
terms of this Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of Xx. Xxxxx. Any attempt to effect a Transfer of
any shares of Restricted Stock prior to the date on which the shares become
Vested Shares shall be void ab initio. For purposes of this Agreement,
"Transfer" shall mean any sale, transfer, encumbrance, gift, donation,
assignment, pledge, hypothecation, or other disposition, whether similar or
dissimilar to those previously enumerated, whether voluntary or involuntary, and
including, but not limited to, any disposition by operation of law, by court
order, by judicial process, or by foreclosure, levy or attachment.
Notwithstanding the foregoing, the shares of restricted Stock may be Transferred
to any member of Xx. Xxxxx'x immediate family, to any trust or other entity of
which Xx. Xxxxx and members of his family are the sole beneficiaries or the
beneficial holders of all equity interests. Any shares of Restricted Stock
transferred pursuant to the immediately preceding sentence shall remain subject
to the right of repurchase in favor of the Company provided for of Section 4
hereof.
7. Amendment, Modification & Assignment; Non-Transferability. This Agreement may
only be modified or amended in a writing signed by the parties hereto. No
promises, assurances, commitments, agreements, undertakings or representations,
whether oral, written, electronic or otherwise, and whether 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. Unless otherwise consented to in
writing by the Company, in its sole discretion, this Agreement (and Xx. Xxxxx'x
rights hereunder) may not be assigned by Xx. Xxxxx, and the obligations of Xx.
Xxxxx hereunder may not be delegated, in whole or in part. The rights and
obligations created hereunder shall be binding on Xx. Xxxxx and his heirs and
legal representatives and on the successors and assigns of the Company.
8. Complete Agreement. This Agreement (together with those agreements and
documents expressly referred to herein, for the purposes referred to herein)
embody the complete and entire agreement and understanding between the parties
with respect to the subject matter hereof, and supersede any and all prior
promises, assurances, commitments, agreements, undertakings or representations,
whether oral, written, electronic or otherwise, and whether express or implied,
which may relate to the subject matter hereof in any way.
9. Miscellaneous.
(a) No Right to Continued Employment or Service. This Agreement and the
grant of Restricted Stock hereunder shall not confer, or be construed to confer,
upon Xx. Xxxxx any right to employment or service, or continued employment or
service, with the Company or any Related Entity.
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(b) No Limit on Other Compensation Arrangements. Nothing contained in this
Agreement shall preclude the Company or any Related Entity from adopting or
continuing in effect other or additional compensation plans, agreements or
arrangements, and any such plans, agreements and arrangements may be either
generally applicable or applicable only in specific cases or to specific
persons.
(c) Taxes. Xx. Xxxxx shall be responsible for all Federal tax imposed on
him under the Internal Revenue Code of 1986, as amended (the "Code"), and any
state or local tax code or regulations, if applicable, together with any
interest or penalties incurred by Xx. Xxxxx with respect to any such taxes
(collectively, the "Taxes"), as a result of being awarded the Restricted Stock.
(d) Severability. If any term or provision of this Agreement is or becomes
or is deemed to be invalid, illegal or unenforceable in any jurisdiction or
under any applicable law, rule or regulation, then such provision shall be
construed or deemed amended to conform to applicable law (or if such provision
cannot be so construed or deemed amended without materially altering the purpose
or intent of this Agreement and the grant of Restricted Stock hereunder, such
provision shall be stricken as to such jurisdiction and the remainder of this
Agreement and the award hereunder shall remain in full force and effect).
(e) No Trust or Fund Created. Neither this Agreement nor the grant of
Restricted Stock hereunder shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Company or any
Related Entity and Xx. Xxxxx or any other person. To the extent that Xx. Xxxxx
or any other person acquires a right to receive payments from the Company
pursuant to this Agreement, such right shall be no greater than the right of any
unsecured general creditor of the Company.
(f) (Law Governing. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware (without
reference to the conflict of laws rules or principles thereof).
(g) Interpretation. Xx. Xxxxx accepts the Restricted Stock subject to all
of the terms, provisions and restrictions of this Agreement. The undersigned Xx.
Xxxxx hereby accepts as binding, conclusive and final all decisions or
interpretations of the Board upon any questions arising under this Agreement.
(h) Headings. Section, paragraph and other headings and captions are
provided solely as a convenience to facilitate reference. Such headings and
captions shall not be deemed in any way material or relevant to the
construction, meaning or interpretation of this Agreement or any term or
provision hereof.
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(i) Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by air courier or first class certified or registered mail, return
receipt requested and postage prepaid, addressed as follows:
If to Xx. Xxxxx, to: to his address on file with the Company
If to the Company, to: Dune Energy, Inc.
0000 Xxxx Xxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
with a copy to: Xxxxx & Xxx Xxxxxx
0 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of delivery if
personally delivered; on the business day after the date when sent if sent by
air courier; and on the third business day after the date when sent if sent by
mail, in each case addressed to such party as provided in this Section or in
accordance with the latest written direction from such party.
(j) Non-Waiver of Breach. The waiver by any party hereto of the other
party's prompt and complete performance, or breach or violation, of any term or
provision of this Agreement shall be effected solely in a writing signed by such
party, and shall not operate nor be construed as a waiver of any subsequent
breach or violation, and the waiver by any party hereto to exercise any right or
remedy which he or it may possess shall not operate nor be construed as the
waiver of such right or remedy by such party, or as a bar to the exercise of
such right or remedy by such party, upon the occurrence of any subsequent breach
or violation.
(k) Counterparts. This Agreement may be executed in two or more separate
counterparts, each of which shall be an original, and all of which together
shall constitute one and the same agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have executed this Agreement as of the date first written above.
DUNE ENERGY, INC.
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: Xxxxx X. Xxxx
Title: President & CEO
AGREED AND ACCEPTED:
/s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------------
Xxxxx X. Xxxxx, Xx.
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