Blueprint





 











 



 


Yuma Energy, Inc.


 

2014
LONG-TERM INCENTIVE PLAN


 


NOTICE OF STOCK APPRECIATION RIGHTS AWARD

 


	


Participant:

	
 

	

 (the
“Participant”)


	
 

	
 


	


Notice:

	

You
have been granted the following award of stock appreciation rights
of Yuma Energy, Inc., a Delaware corporation (the
“Company”), in
accordance with the terms of this Notice of Stock Appreciation
Rights Award (this “Notice”), the Yuma Energy, Inc.
2014 Long-Term Incentive Plan, as assumed by the Company in October
2016, as in effect and as amended from time to time (the
“Plan”), and the
attached Stock Appreciation Rights Agreement (the
“Agreement”).


	
 

	
 

	
 

	
 


	


Date of Grant:

	
 

	

 (the
“Date of
Grant”)

	
 


	
 

	
 

	
 

	
 


	


Number of Stock Appreciation Rights:

	
 

	

 (the
“SARs”)

	
 


	
 

	
 


	


Exercise Price:

	
 

	

 (the
“Exercise
Price”)

	
 


	
 

	
 


	


Expiration Date:

	

The
seventh anniversary of the Date of Grant (the “Expiration Date”)


	
 

	
 


	


Vesting Schedule:

	

Number
of SARs

	

Vesting
Date (each, a “Vesting
Date”)


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	

The
vesting of the SARs is subject to your continued service as an
employee of the Company or any of its subsidiaries through such
Vesting Date, and upon the terms of this Notice, the Plan and the
Agreement.


	
 

	
 

	
 






You, by your
signature as the Participant below, acknowledge that you (i) have
reviewed the Agreement and the Plan in their entirety and have had
the opportunity to obtain the advice of counsel prior to executing
this Notice, (ii) understand that the award of the SARs is granted
under and governed by the terms and provisions of this Notice, the
Agreement and the Plan, and (iii) agree to accept as binding all of
the determinations and interpretations made by the Compensation
Committee of the Board of Directors of the Company with respect to
matters arising under or relating to this Notice, the Agreement and
the Plan.


 


	
 

	
 

	


PARTICIPANT

	
 

	
 

	


YUMA ENERGY, INC.

	
 


	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	

By:

	
 

	
 

	

By:

	
 

	
 


	
 

	

Name:

	
 

	
 

	

Name:

	
 

	
 


	
 

	
 

	
 

	
 

	

Title:

	
 

	
 












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YUMA ENERGY, INC.


 



STOCK APPRECIATION RIGHTS AGREEMENT


 

1. Award of Stock Appreciation
Rights.  Yuma Energy, Inc., a Delaware corporation
(the “Company”),
hereby grants to the Participant under the Yuma Energy, Inc. 2014
Long-Term Incentive Plan, as in effect and as amended from time to
time (the “Plan”), an award (the
“Award”) of the
number of stock appreciation rights (the “SARs”) set forth in the Notice of
Stock Appreciation Rights Award (the “Notice”) attached to this Stock
Appreciation Rights Agreement (this “Agreement”). This Agreement
consists of the Notice and the terms and conditions of the Plan.
Unless otherwise provided herein, capitalized terms herein will
have the same meanings as in the Plan or in the
Notice.


 

2. Vesting.


 

(a) Vesting of the SARs. Except as
otherwise provided in this Agreement or the Plan, the SARs awarded
by this Agreement are scheduled to vest and be exercisable in
accordance with the vesting schedule (the “Vesting Schedule”) set forth in
the Notice; provided, however, no SARs shall vest after the
Expiration Date. The SARs scheduled to vest on a Vesting Date will
vest only if the Participant remains in continued service as an
employee of the Company or any of its subsidiaries through such
Vesting Date. Should the Participant’s continued service as
an employee of the Company or any of its subsidiaries end
(“Termination of
Service”) at any time (the “Termination Date”), any unvested
SARs will be immediately terminated and forfeited. However, the
Compensation Committee (the “Committee”) of the Board of
Directors (the “Board”) of the Company may, in its
discretion, vest any unvested SARs upon the Participant’s
Termination of Service.


 

(b) Change of Control Event. If
there is a Change of Control Event, any unvested SARs shall not
vest immediately and shall remain outstanding and continue subject
to restrictions in accordance with the terms hereof, unless one of
the following things happens:


 


(i) the
Committee, in its sole discretion, without the consent of the
Participant or holder of this Award, and on such terms and
conditions as it deems appropriate, may take any one or more of the
actions or make the adjustments set forth in Section 12.2 of the
Plan in connection with such Change in Control Event;
and


 


(ii) unless
the terms contained in any employment agreement between the
Participant and the Company provide otherwise, if the Participant
incurs a Termination of Service within a period beginning sixty
(60) days before and ending twelve (12) months following a Change
of Control Event on account of (1) a termination by the Company or
any of its subsidiaries for any reason other than Cause, or (2) a
termination by the Participant for Good Reason, then any unvested
SARs shall vest on the Termination Date.


 


For
purposes of this Agreement, the following definitions
apply:


 


“Good Reason” means without the
Participant’s written consent (A) a material reduction
in the Participant’s authority, duties or responsibilities
compared to the Participant’s authority, duties and
responsibilities immediately prior to the Change of Control Event;
(B) the Participant’s principal work location being
moved more than thirty-five (35) miles, from the location
immediately prior to the Change of Control Event; (C) the
Company or any of its subsidiaries materially reduces the
Participant’s base salary (unless the base salaries of
substantially all other senior executives of the Company are
similarly reduced); or (D) if the Participant is a party to an
employment agreement with the Company, any material breach of such
employment agreement by the Company.  The Participant
will not resign for Good Reason without first providing the Company
with written notice of the acts or omissions constituting the
grounds for “Good Reason” within ninety (90) days of
the initial existence of the grounds for “Good Reason”
and the Company must have an opportunity within thirty (30) days
following delivery of such notice to cure the Good Reason
condition.


 



 

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“Cause” means (A) the
Participant’s failure to perform (other than due to
Disability or death) the duties of the Participant’s position
(as they may exist from time to time) to the reasonable
satisfaction of the Company or any of its subsidiaries after
receipt of a written warning and at least fifteen (15) days’
opportunity for the Participant to cure the failure, (B) any
act of fraud or dishonesty committed by the Participant against or
with respect to the Company or any of its subsidiaries or customers
as shall be reasonably determined to have occurred by the Board,
(C) the Participant’s conviction or plea of no contest
to a crime that negatively reflects on the Participant’s
fitness to perform the Participant’s duties or harms the
Company’s or any of its subsidiaries’ reputation or
business, (D) the Participant’s willful misconduct that
is injurious to the Company or any of its subsidiaries, or
(E) the Participant’s willful violation of a material
Company or any of its subsidiaries policy. The preceding definition
shall not be deemed to be inclusive of all the acts or omissions
that the Company or any of its subsidiaries may consider as grounds
for the dismissal or discharge of the Participant or any other
individual in the service of the Company or any of its
subsidiaries.  Notwithstanding the foregoing, if the
Participant is a party to an employment agreement with the Company,
the definition of “cause” as defined in the employment
agreement will supersede the above definition.


 

3. Exercise of the
SARs.


 

(a) When to Exercise. Except as
otherwise provided in the Plan or this Agreement, the Participant
(or in the case of exercise after the Participant’s death or
incapacity, the Participant’s executor, administrator, heir
or legatee, as the case may be) may exercise his or her vested
SARs, in whole or in part, at any time after vesting and until the
Expiration Date or earlier termination pursuant to Section 4
hereof, by following the procedures set forth in this Section 3. If
partially exercised, the Participant may exercise the remaining
unexercised portion of the SARs at any time after vesting and until
the Expiration Date or earlier termination pursuant to Section 4
hereof. No SARs shall be exercisable after the Expiration
Date.


 

(b) Election to Exercise. To
exercise the SARs, the Participant (or in the case of exercise
after the Participant’s death or incapacity, the
Participant’s executor, administrator, heir or legatee, as
the case may be) must deliver the Exercise Notice (attached hereto
as Exhibit A) to
the Corporate Secretary of the Company which sets forth the number
of SARs being exercised, together with any additional documents as
the Company may require. Each such notice must satisfy whatever
then-current procedures apply to the SARs and must contain such
representations as the Company requires.


 

(c) Documentation of Right to
Exercise. If someone other than the Participant exercises
the SARs, then such person must submit documentation reasonably
acceptable to the Company verifying that such person has the legal
right to exercise the SARs.


 

(d) Date of Exercise. The SARs
shall be deemed to be exercised on the third (3rd) business day
after the Company receives a fully executed Exercise Notice. If the
notice is received after business hours, then the notice shall be
deemed to be received by the Company on the following business
day.


 



 

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(e) Receipt of Cash Upon Exercise.
Upon exercise of the SARs, the Company shall deliver to the
Participant cash equal in value to (i) the excess, if any, of (x)
the Fair Market Value of one share of Common Stock as of the date
of exercise over (y) the Exercise Price, multiplied by (ii) the
number of SARs with respect to which this Award is being exercised.
The Company shall deliver such cash as soon as practicable
following the exercise, subject to any withholding taxes that may
be due as a result of the exercise of the SARs as set forth in
Section 5.


 




4.

Termination of the
Award.






 

(a) Termination for Reasons Other Than
Cause, Death, Disability. If the Participant’s
continued service as an employee of the Company or any of its
subsidiaries ends for any reason other than Cause, death or
Disability, the Participant may exercise the vested SARs, but only
within such period of time ending on the earlier of (i) the date
three (3) months following the Participant’s Termination Date
and (ii) the Expiration Date.


 

(b) Termination Due to Disability.
If the Participant’s continued service as an employee of the
Company or any of its subsidiaries ends as a result of the
Participant’s Disability, the Participant may exercise the
vested SARs, but only within such period of time ending on the
earlier of (i) the date twelve (12) months following the
Participant’s Termination Date and (ii) the Expiration
Date.


 

(c) Termination Due to Death. If
the Participant’s continued service as an employee of the
Company or any of its subsidiaries ends as a result of the
Participant’s death, the vested SARs may be exercised by the
Participant’s estate, by a person who acquired the right to
exercise the SARs by bequest or inheritance or by the person
designated to exercise the SARs upon the Participant’s death,
but only within the time period ending on the earlier of (i) the
date twelve (12) months following the Participant’s
Termination Date and (ii) the Expiration Date.


 

(d) Termination for Cause. If the
Participant’s continued service as an employee of the Company
or any of its subsidiaries ends for Cause, the SARs (whether vested
or unvested) shall immediately terminate and cease to be
exercisable.


 




5.

Taxes.






 


(a)  Tax
Liability.  The Participant is ultimately liable
and responsible for all taxes owed by the Participant in connection
with this Award, regardless of any action the Company takes with
respect to any tax withholding obligations that arise in connection
with this Award. The Company does not make any representation
or undertaking regarding the treatment of any tax withholding in
connection with the grant or vesting of this Award or the
subsequent exercise of the SARs. The Company does not commit
and is under no obligation to structure this Award to reduce or
eliminate the Participant’s tax liability.


 


(b) Payment
of Withholding Taxes.   In the event required by
federal, state or local law, the Company will have the right and is
hereby authorized to withhold, and/or to require the Participant to
pay upon the occurrence of the event triggering the requirement,
any applicable withholding taxes in respect of the SARs, their
grant, vesting, exercise or otherwise and to take such other action
as may be necessary in the opinion of the Committee to satisfy all
obligations for the payment of such withholding taxes. The
Participant hereby authorizes the Company to satisfy such tax
withholding obligation, in whole or in part (without limitation) by
deducting all applicable federal, state and local tax withholding
with respect to exercise of the SARs from (i) the
Participant’s wages or other cash compensation payable to the
Participant by the Company and/or (ii) from any cash payment(s) due
upon exercise of the SAR, as determined by the Company in its sole
discretion. The Participant agrees to indemnify and hold the
Company harmless from any losses, costs, damages, or expenses
relating to inadequate withholding. The Company shall withhold
from any dividends paid during the vesting period only the amounts
the Company is required to withhold to satisfy any applicable tax
withholding requirements with respect to such dividends based on
minimum statutory withholding rates for federal and state tax
purposes, including any payroll taxes.


 



 

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YOU FURTHER ACKNOWLEDGE THAT THE COMPANY HAS DIRECTED YOU TO SEEK
INDEPENDENT ADVICE REGARDING THE APPLICABLE PROVISIONS OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”),
AND THE INCOME TAX LAWS OF ANY MUNICIPALITY OR STATE IN WHICH YOU
MAY RESIDE.


 

6. No Effect on Employment.
Nothing contained in this Agreement shall confer upon the
Participant the right to continue as an employee of the Company or
any of its subsidiaries.


 

7. No Rights as Stockholder. The
Participant is not be entitled to any rights of a stockholder with
respect to the SARs (including the right to vote the shares of
Common Stock underlying the SARs and the right to receive
dividends).


 

8. Address for Notices. Any notice
to be given to the Company under the terms of this Agreement shall
be addressed to the Company, Attn: Corporate Secretary, at the
Company’s headquarters, 1177 West Loop South, Suite 1825,
Houston, Texas 77027, or at such other address as the Company may
hereafter designate in writing. Any notice to be given to the
Participant will be addressed to such Participant at the address
maintained by the Company for such person or at such other address
as the Participant may specify in writing to the
Company.


 

9. Award is Not Transferable. This
Award and the rights and privileges conferred hereby will not be
transferred, assigned, pledged or hypothecated in any way (whether
by operation of law or otherwise) and will not be subject to sale
under execution, attachment or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this
Award, or of any right or privilege conferred hereby, or upon any
attempted sale under any execution, attachment or similar process,
this Award and the rights and privileges conferred hereby
immediately will become null and void.


 

10. Binding Agreement. This
Agreement will be binding upon and inure to the benefit of the
heirs, legatees, legal representatives, successors and assigns of
the parties hereto.


 

11. Committee Authority. All
actions taken and all interpretations and determinations made by
the Committee will be final and binding upon the Participant, the
Company and all other persons, and will be given the maximum
deference permitted by law. No member of the Committee will be
personally liable for any action, determination or interpretation
made in good faith with respect to this Agreement.


 

12. Captions. Captions provided
herein are for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.


 

13. Provisions Severable. In the
event that any provision in this Agreement is held invalid or
unenforceable, such provision will be severable from, and such
invalidity or unenforceability will not be construed to have any
effect on, the remaining provisions of this Agreement.


 

14. Entire Agreement. This
Agreement, including the Notice, and the Plan constitute the entire
understanding of the parties relating to the subjects covered
herein. The Participant expressly warrants that he or she is not
executing the Notice in reliance on any promises, representations
or inducements other than those contained herein and in the
Plan.


 



 

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15. Modifications to this
Agreement. No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, will
be effective unless made in writing signed by the Participant and a
duly authorized officer of the Company. All modifications of or
amendments to this Agreement must either (a) comply with Section
409A of the Code or (b) not cause this Award to be subject to
Section 409A of the Code if this Award is not already subject to
Section 409A of the Code.


 

16. Amendment, Suspension or Termination
of the Plan. By accepting this Award, the Participant
expressly warrants that he or she has received an award under the
Plan, and has received, read and understood a description of the
Plan. The Participant understands that the Plan is discretionary in
nature and may be modified, suspended or terminated by the Company
at any time.


 

17. Recoupment Policy.
Notwithstanding the vesting terms of this Agreement, this Award is
subject to any compensatory recovery (clawback) policy in effect at
the time of each Vesting Date.


 

18. Governing Law; Dispute
Resolution.


 

(a) This Agreement will
be governed by, and construed in accordance with, the laws of the
State of Texas, without regard to its conflict of law
provisions.


 

(b) Any dispute arising
out of, or relating to this Agreement or any breach hereof, shall
be resolved by binding arbitration in Harris County, Texas, in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect, and judgment on the award
rendered by the arbitrator(s) may be entered in any court of
competent jurisdiction. The location of such arbitration in Harris
County, Texas, shall be selected by the Company in its sole and
absolute discretion. All costs and expenses, including
attorneys’ fees, relating to the resolution of any such
dispute shall be borne by the party incurring such costs and
expenses.


 

19. Data Protection. By accepting
this Award, the Participant agrees and consents:


 


(a) to the
collection, use, processing and transfer by the Company of certain
personal information about the Participant, including the
Participant’s name, home address and telephone number, date
of birth, other employee information, details of the SARs granted
to the Participant, and of the payment of cash to the Participant
pursuant to this Agreement (“Data”); and


 


(b) to the
Company transferring Data to any subsidiary or affiliate of the
Company for the purposes of implementing, administering and
managing this Agreement; and


 


(c) to the use
of such Data by any person for such purposes; and


 


(d) to the
transfer to and retention of such Data by third parties in
connection with such purposes.


 

20. Plan Governs. Except where
explicitly stated in this Agreement, this Agreement is subject to
all terms and provisions of the Plan. In the event of a conflict
between one or more provisions of this Agreement and one or more
provisions of the Plan, the provisions of the Plan shall govern,
unless the Committee shall determine otherwise.


 



 

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21. Adjustments. In the event of a
stock split, a stock dividend or a similar change in the Common
Stock, the number of SARs covered by this Award and the Exercise
Price may be adjusted pursuant to the Plan.

 

22. Participant Acknowledgements.
The Participant acknowledges receipt of a copy of the Plan and
represents that he or she is familiar with the terms and provisions
thereof, and hereby accepts this Award subject to all of the terms
and provisions hereof and thereof. The Participant has reviewed
this Agreement and the Plan in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing the
Notice and fully understands all provisions of this Agreement,
including the Notice, and the Plan.


 


THE
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE SARS WILL VEST, IF AT
ALL, ONLY DURING THE PERIOD OF THE PARTICIPANT’S CONTINUED
SERVICE AS AN EMPLOYEE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES
(NOT THROUGH THE ACT OF BEING GRANTED THIS AWARD). THE
PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THE
NOTICE, THIS AGREEMENT NOR THE PLAN WILL CONFER UPON THE
PARTICIPANT ANY RIGHT WITH RESPECT TO CONTINUATION OF THE
PARTICIPANT’S SERVICE AS AN EMPLOYEE OF THE COMPANY OR ANY OF
ITS SUBSIDIARIES.


 


 




 

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Yuma Energy, Inc.


 



2014 LONG-TERM INCENTIVE PLAN


 



EXERCISE NOTICE


 


Yuma
Energy, Inc.


1177
West Loop South, Suite 1825


Houston,
Texas 77027


 


Attention:
Corporate Secretary


 

1. Exercise of SARs. Effective as
of today, _____________, 20___, the undersigned (the
“Participant”)
hereby notifies the Company of his or her election to exercise the
Participant’s stock appreciation rights (“SARs”) with respect to __________
SARs of Yuma Energy, Inc., a Delaware corporation (the
“Company”),
under and pursuant to the Yuma Energy, Inc. 2014 Long-Term
Incentive Plan, as amended (the “Plan”), and the Stock Appreciation
Rights Agreement dated ___________ (the “Agreement”). Unless otherwise
provided herein, capitalized terms herein will have the same
meanings as in the Plan or the Agreement.


 

2. Representations of the
Participant. The Participant acknowledges that the
Participant has received, read and understood the Plan and the
Agreement and agrees to abide by and be bound by their terms and
conditions.


 

3. Tax Consultation. The
Participant understands that the Participant may suffer adverse tax
consequences as a result of the Participant’s receipt of
cash. The Participant represents that the Participant has consulted
with any tax consultants the Participant deems advisable in
connection with the receipt of cash and that the Participant is not
relying on the Company for any tax advice.


 

4. Entire Agreement; Governing
Law. The Plan and Agreement are incorporated herein by
reference. This Exercise Notice, the Plan and the Agreement
constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and the Participant with
respect to the subject matter hereof, and may not be modified
adversely to the Participant’s interest except by means of a
writing signed by the Company and the Participant. This Exercise
Notice will be governed by, and construed in accordance with, the
laws of the State of Texas, without regard to its conflict of law
provisions.


 


 


	
 

	
 

	


Submitted By:

	
 

	
 

	


Accepted By:

	
 


	
 

	
 

	


PARTICIPANT

	
 

	
 

	


YUMA ENERGY, INC.

	
 


	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	

By:

	
 

	
 


	
 

	
 

	

Name:

	
 

	

Name:

	
 

	
 


	
 

	
 

	
 

	
 

	

Title:

	
 

	
 


	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	

Date
Received:

	
 

	
 







 


 




 

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