Exhibit 10.3

 

Amended and Restated Employment Agreement

 

Amended and Restated Employment Agreement (this “Agreement”) dated as of
June 13, 2012 (the “Effective Date”) by and between Prospect Global Resources
Inc. a Nevada corporation (the “Company”), and Wayne E. Rich (the “Executive”).

 

WHEREAS, the Company and the Executive are parties to an Employment Agreement,
dated as of September 6, 2011 (the “Original Agreement”); and

 

WHEREAS, the Company and the Executive desire to amend and restate the Original
Agreement, in its entirety, on the terms and subject to the conditions set forth
herein, effective as of the Effective Date.

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants set
forth below, Company and the Executive agree as follows:

 

1.                                      Employment:  The Company hereby agrees
to employ the Executive as the Chief Financial Officer and Vice President of
Finance (“CFO”) of the Company, and the Executive hereby accepts such
employment, on the terms and conditions set forth below.

 

2.                                      Compensation and Related Matters:

 

a.                                      Base Salary. During the Executive’s term
of service (the “Employment Period”), the Company shall pay the Executive a base
salary at the rate of not less than $275,000 per year (“Base Salary”).  The
Executive’s base Salary shall be paid in accordance with the Company’s normal
payroll practice or, if no such practice is established, in equal installments
at the end of each month (with a partial month for the month of September,
2011).  If the Executive’s Base Salary is increased by the Company, such
increased Base Salary shall then constitute the Base Salary for all purposes of
this agreement.

 

b.                                      Stock Options: Subject to approval by
the Company’s Board of Directors, within 60 days of the Effective Date the
Executive will be granted options to purchase 1,000,000 shares (the “Base
Options”) of the Company’s common stock (“Common Stock”) at fair market value
(as determined pursuant to the Company’s 2011 Employee Equity Incentive Plan). 
The Options shall vest, subject to acceleration as provided below, as follows: 
250,000 Base Options on the grant date, 250,000 Base Options on the 180th day
after the Effective Date and 500,000 Base Options on the one year anniversary of
the Effective Date, in each case so long as the Executive either (i) is employed
as the Company’s CFO on such date or (ii) has died or become permanently
disabled prior to such date and was employed as the Company’s CFO at the time of
death or disability.  If the exercise price of the Base Options is greater than
$4.50

 

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per share, subject to approval by the Company’s Board of Directors, at the time
the Base Options are granted the Executive will be granted additional options to
purchase 200,000 shares (the “Additional Options” and, together with the Base
Options, the “Options”) of Common Stock at the same exercise price as the Base
Options.  The Additional Options shall vest, subject to acceleration as provided
below, on the one year anniversary of the Effective Date, in each case so long
as the Executive either (i) is employed as the Company’s CFO on such date or
(ii) has died or become permanently disabled prior to such date and was employed
as the Company’s CFO at the time of death or disability.

 

Notwithstanding any provision to the contrary, the Options shall immediately
vest in full upon either a “Change in Control” or the termination of the
Executive’s services as CFO by the Company other than for “Cause” or by the
Executive for “Good Reason” (all as 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 35% 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 35% 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 of
Directors of the Company (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) the Executive’s
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 the Executive;
(B) the Executive’s commission of a crime involving fraud or intentional
dishonesty, which results in the Executive’s substantial personal enrichment and
material adverse effect to the Company; or (C) the Executive becoming subject to
any securities

 

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related sanctions related to the Company other than those based on an act of the
Company itself for which the Executive is charged solely as a result of his
position with the Company.

 

c.                                       Annual Bonus: For each full fiscal year
of the Company that begins and ends during the Employment Period, and for the
portion of the fiscal year of the Company that begins in 2011 (“Fiscal Year
2011”), the Executive shall be eligible to earn an annual cash bonus in such
amount as shall be determined by the Compensation Committee of the Board (the
“Compensation Committee”) (the “Annual Bonus”) based on the achievement by the
Company of performance goals established by the Compensation Committee (or the
Board if there is no Compensation Committee) for each such fiscal year (or
portion of Fiscal Year 2011), which may include targets related to the earnings
before interest, taxes, depreciation and amortization (“EBITDA”), financial
reporting, financial controls, acquisitions, leases, permitting, etc. of the
Company; provided, that the Annual Bonus shall be no less than 80% and no
greater than 120% of the then-current Base Salary and the Annual Bonus for 2011
shall be not less than $100,000. The Compensation Committee (or the Board if
there is no Compensation Committee) shall establish objective criteria to be
used to determine the extent to which performance goals have been satisfied. 
This criteria shall be established within 60 days of the Effective Date.  The
amount of each annual bonus shall be not less than 80% nor greater than 120% of
the then-current Base Salary).

 

d.                                      Vacation: The Executive shall be
entitled to four weeks of vacation per fiscal year. Up to three weeks of
vacation not taken during the applicable fiscal year shall be carried over to
the next following fiscal year.  Vacation shall accrue to the Executive at rate
of not less than one week per quarter in advance.

 

e.                                       Expenses: The Company will reimburse
the Executive for all expenses related to Company business, including, but not
limited to travel, marketing, communication, due diligence, legal fees and
expenses, etc.

 

f.                                        Welfare, Pension and Incentive Benefit
Plans: During the Employment Period, the Executive (and his eligible spouse and
dependents) shall be entitled to participate in all the welfare benefit plans
and programs maintained by the Company from time to time for the benefit of its
senior executives including, without limitation, all medical, hospitalization,
dental, disability, accidental death and dismemberment and travel accident
insurance plans and programs.  In addition, during the Employment Period, the
Executive shall be eligible to participate in all pension, retirement, savings
and other employee benefit plans and programs maintained from time to time by
the Company for the benefit of its senior executives.

 

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g.                                       Professional Development.  The Company
will reimburse the Executive for education and professional development expenses
related to courses or programs selected by the Executive in the natural
resources sector up to $10,000 per calendar year. The Executive may take such
courses during normal business hours and will not be required to utilize
vacation time.

 

3.                                      Responsibilities: As the CFO, the
Executive will have the responsibilities of a chief financial officer and shall
also assist the Company’s President and Chief Executive Officer in developing
the Company’s strategic direction, identifying and pursuing acquisition targets,
personnel hiring, budget preparation, development of an annual operating plan
and periodic long range plans, overseeing all portfolio companies’ operations,
finances, budgets and strategic direction, and compliance with all regulatory
requirements developing and implementing the Company’s business plan.  The CFO
shall report directly to the Company’s President and Chief Executive Officer. 
With the approval of the President and Chief Executive Officer, finance and
accounting staff may be hired by the Executive.

 

4.                                      At-Will Employment; Severance: The
Executive’s employment with the Company is on an at-will basis.  If terminated
by the Company for any reason other than Cause, including a change of control,
or by the Executive for Good Reason, the Company shall provide severance to the
Executive, payable in accordance with the Company’s normal payroll practice, of
12 month’s Base Salary, an Annual Bonus of 120% of the then-current Base Salary,
accrued vacation, and any reimbursement of all business and professional
development expenses incurred but not yet reimbursed.  In addition the Company
shall reimburse the Executive for COBRA payments made by the Executive for 12
months following termination by the Company for any reason other than Cause, or
by the Executive for Good Reason.

 

5.                                      Location: The Executive will be based in
the Denver, Colorado, metropolitan area.  During the Employment Period, the
Company shall provide the Executive with an office and appropriate equipment and
support staff.

 

6.                                      Representations and Warranties: The
Company represents and warrants to the Executive that this Agreement has been
duly authorized, executed and delivered by the Company and, assuming the due
execution by the Executive, constitutes a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms.

 

7.                                      Indemnity:  The Company agrees that if
the Executive is made a party 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 the Executive is or was a trustee,
director, member, agent or officer of the Company or any predecessor to the
Company or any of their affiliates or is or was serving at the request of the
Company, any predecessor to the Company or any of their affiliates as a trustee,

 

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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 is alleged 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, the
Executive shall be indemnified and held harmless by the Company to the fullest
extent authorized by Delaware law, as the same exists or may hereafter be
amended, against all Expenses incurred or suffered by the Executive in
connection therewith, and such indemnification shall continue as to the
Executive even if the Executive 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.

 

a.                                      Expenses. As used in this Section 7, the
term “Expenses” shall include, without limitation, 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 7 is not paid by the Company or on its behalf, within 30 days after
a written claim or request has been received by the Company, the Executive 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, the
Executive 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 Colorado law.

 

c.                                       Advances of Expenses. Expenses incurred
by the Executive in connection with any Proceeding shall be paid by the Company
in advance upon request of the Executive that the Company pay such Expenses, but
only in the event that the Executive shall have delivered in writing to the
Company (i) an undertaking to reimburse the Company for Expenses with respect to
which the Executive is not entitled to indemnification and (ii) a statement of
his good faith belief that the standard of conduct necessary for indemnification
by the Company has been met.

 

d.                                      Insurance.  The Company will maintain a
Director’s and Officer’s Insurance Policy naming the Executive as a covered
party in an amount deemed mutually sufficient to the Company and the Executive. 
The Company will use its best commercial efforts to have this policy in place
within 90 days of the Effective Date.

 

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8.                                      Survival of Certain Provisions: The
representations, warranties and covenants and indemnity provisions contained in
Sections 2, 4, 6 and 7 of this Agreement and the Company’s obligation to pay the
Executive any compensation 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.

 

9.                                      Notices: Any notice given with respect
to this Agreement shall be in writing and shall be mailed or delivered (a) if to
the Company, at its offices at 600 17th Street, Suite 2800-South, Denver, CO
80202, and (b) if to the Executive, at 11074 Grayledge Circle, Highlands Ranch,
CO 80130, in either case with a copy to the Company’s legal counsel, Jeff
Knetsch, Brownstein Hyatt Farber Schreck, LLP, 410 17th Street, 22nd Floor,
Denver, CO 80202.

 

10.                               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.

 

11.                               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.

 

12.                               Validity: The invalidity or unenforceability
of any provision or provisions of this Agreement shall not affect the validity
or enforceability of any other provision of this Agreement, which shall remain
in full force and effect.

 

13.                               Dispute Resolution: If a dispute arises out of
or relating to this Agreement or the breach of this Agreement, and if the
dispute cannot be settled through direct discussions, the parties agree to first
endeavor to settle the dispute in an amicable manner by mediation. Mediation
shall consist of an informal, nonbinding conference or conferences between the
parties and the mediator jointly, and at the discretion of the mediator, then in
separate caucuses in which the mediator will seek to guide the parties to a
resolution of the case. Each party shall pick a mediator selector and the two
mediator selectors shall then pick and appoint a mediator.  The Company will pay
all mediation related costs, including, without limitation, the Executive’s
costs and reasonable fees, including attorneys’ fees, incurred in selecting a
mediator and obtaining counsel for purposes of the mediation.

 

14.                               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. Any and all actions, suits, or judicial
proceedings upon any claim arising from or relating to this Agreement, shall be
instituted and maintained in the State or

 

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Federal courts sitting in the State of Colorado.  Each party waives the right to
change of venue.

 

15.                               Miscellaneous: No provisions of this Agreement
may be amended, modified, or waived unless such amendment or modification is
agreed to in writing signed by the Executive and by a duly authorized officer or
a director 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
Executive’s termination of employment and the termination of this Agreement to
the extent necessary for the intended preservation of such rights and
obligations.

 

16.                               Section Headings: The section headings in this
Agreement are for convenience of reference only, and they form no part of this
Agreement and shall not affect its interpretation.

 

The parties have executed this Agreement as of the Effective Date, as defined
above.

 

Wayne E. Rich

 

Prospect Global Resources Inc.

 

 

 

 

 

 

 

 

/s/ Wayne E. Rich

 

By:

/s/ Patrick L. Avery

 

 

 

Patrick L. Avery

 

 

 

President and Chief Executive Officer

 

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