Exhibt 10.4
 
Independent Director Appointment Agreement
 
 
This Agreement (“Agreement”) is entered into and made effected November 16,
2009, by and between Recovery Energy, Inc. a Delaware Corporation (the
“Company”), and James J. Miller (“Miller”).
 
WHEREAS, the Company wishes to retain Miller’s services as set forth herein, and
Miller wishes to provide such services under the terms set forth herein;
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants set
forth below, the Company and Miller hereby agree as follows:
 
1. Appointment:  The Company hereby agrees to appoint Miller as the Independent
Director on the Board of Directors (the “Board”) of the Company, and Miller
hereby accepts such position, on the terms and conditions set forth
below.  Miller’s authority shall be consistent with that normally associated
with and appropriate for such a position.
 
2. Start Date:  Miller’s appointment will be effective on November 16, 2009 (the
“Effective Date”).
 
3. Compensation and Expenses:
 
(a) Stock Compensation:
 
(i) Initial Grant.  On January 1, 2010, the Company will issue to Miller 10,000
shares of Company stock (the “Initial Grant”), which stock shall vest, subject
to acceleration as provided below, in the following increments on the specified
dates:
 
(A) 2,500 shares shall vest on January 1, 2010;
 
(B) 2,500 shares shall vest on April 1, 2010;
 
(C) 2,500 shares shall vest on July 1, 2010; and
 
(D) 2,500 shares shall vest on September 1, 2010.
 
Notwithstanding any provision to the contrary, the Initial Grant shall vest upon
the earlier to occur of a “Change in Control” of the Company or the termination
of Miller’s service as an Independent Director other than by Miller’s
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.
 
 
 
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For purposes of this Agreement, “Cause” shall mean (A) Miller’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 Miller; (B) Miller’s commission of a
crime involving fraud or intentional dishonesty, which results in Miller’s
substantial personal enrichment and material adverse effect to the Company; (C)
Miller’s becoming subject to any securities related sanctions related to the
Company other than those based on an act of the Company itself for which Miller
is charged solely as a result of his position with the Company.
 
For each year Miller is a member of the Board, Miller shall be awarded 10,000
shares of Company Stock, subject to an annual review of compensation by the
Board.
 
(b) Cash Compensation:  On a quarterly basis, the Company shall pay to Miller
$2,500 in cash compensation as directors fees.
 
(c) Expenses for this Agreement:  Within thirty (30) days of receipt of an
invoice, the Company will reimburse Miller for reasonable legal expenses
incurred in connection with this Agreement.
 
4. Scope of Responsibilities.  As an Independent Director, subject to the terms
of the immediately following paragraph, Miller 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.  Miller will initially serve on the Company’s Compensation
Committee and as Board Secretary. Miller 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 Delaware, 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,
Miller will devote only such time as he in his sole discretion deems necessary
and appropriate.
 
Miller 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 Miller 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 Miller 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 Miller’s 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 Miller 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 Miller 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 Miller’s activities conducted apart from
the business of the Company.
 
 
 
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5. Termination.  Either party may terminate this Agreement, thereby terminating
Miller’s service as an Independent Director, for any reason whatsoever, upon
thirty (30) days written notice as provided in Section 10 herein.  In the event
of such notice of termination by the Company or by Miller, within thirty (30)
days, the Company shall pay Miller any expenses, if any, he has incurred on the
Company’s behalf to date that have not otherwise been reimbursed.  Following
termination of Miller’s 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.  Miller’s office for Company business will be based in the vicinity
of Denver, Colorado.  Miller 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
Miller that this Agreement has been duly authorized, executed and delivered by
the Company and, upon execution by Miller, 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 Miller 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 Miller 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, Miller 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 Costs (as defined
below) incurred or suffered by Miller in connection therewith, and such
indemnification shall continue as to Miller 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, Miller 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, Miller 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 Delaware law.
 
 
 
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(c) Payment of Costs.  Costs incurred by Miller in connection with any
Proceeding shall be paid by the Company within thirty (30) days notice of
Miller’s request for such payment, provided that Miller has delivered to the
Company written notification of (i) his agreement to reimburse the Company for
Costs with respect to which Miller 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 Miller as a covered party in amount deemed mutually sufficient to
the Company and Miller.
 
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 Miller, or to cause
Miller 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 1515 Wynkoop Street, Suite 200, Denver, CO 80202, with a copy to
Jeffrey Knetsch, at his office at Brownstein Hyatt Farber Schreck, LLP, 410 17th
Street, Suite 2200, Denver, CO  80202 and (b) if to Miller, at his offices at
____________________________,.
 
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 Miller regarding any provision of this Agreement, the Company shall
reimburse Miller 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
Miller 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.
 
 
 
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16. Reimbursement of Expenses.  Miller shall be reimbursed by the Company for
all ordinary and necessary expenses incurred by Miller 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 Miller 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
Effective Date, as defined above.
 
 

James J. Miller       Recovery Energy, Inc.            
By: /s/ James J. Miller  
   
By:   /s/ Jeffrey A. Beunier   
 
 
   
Jeffrey A. Beunier,
 
 
   
CEO & Chairman of the Board of Directors
 

 
                                                                    
 
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