Exhibit 10.2


 


EMPLOYEE RESTRICTED STOCK AWARD


 


CANO PETROLEUM, INC.


2005 LONG-TERM INCENTIVE PLAN


 


Pursuant to
the Cano Petroleum, Inc. 2005 Long-Term Incentive Plan (the “Plan”) for key
employees, key consultants, and outside directors of Cano Petroleum, Inc.,
a Delaware corporation (the “Company”) and its Subsidiaries,


 


Ben
Daitch


(the
“Participant”)


 


has been granted a
Restricted Stock Award in accordance with Section 6.4 of the Plan.


 


1.               Terms of Award.  The number of shares of Common Stock awarded
under this Award Agreement (this “Agreement”) is 100,000 shares (the “Awarded Shares”).  The Date of Grant of this Award is June 23,
2008.


 


2.               Subject to Plan.  This Agreement is subject to the terms and
conditions of the Plan, and the terms of the Plan shall control to the extent
not otherwise inconsistent with the provisions of this Agreement.  The capitalized terms used herein that are
defined in the Plan shall have the same meanings assigned to them in the Plan.  This Agreement is subject to any rules promulgated
pursuant to the Plan by the Board or the Committee and communicated to the
Participant in writing.


 


3.               Vesting.  Except as specifically provided in this
Agreement and subject to certain restrictions and conditions set forth in the
Plan, the Awarded Shares shall be vested as follows:


 


a.               One-third (1/3)
of the total Awarded Shares shall vest on June 23, 2009, provided the
Participant is employed by (or, if the Participant is a Consultant, is
providing services to) the Company or a Subsidiary on that date.


 


b.              One-third (1/3)
of the total Awarded Shares shall vest on June 23, 2010, provided the
Participant is employed by (or, if the Participant is a Consultant, is
providing services to) the Company or a Subsidiary on that date.


 


c.               The remaining
one-third (1/3) of the total Awarded Shares shall vest on
June 23, 2011, provided the Participant is employed (or, if the
Participant is a Consultant, is providing services to) to Company or a
Subsidiary on that date.


 


Notwithstanding the foregoing, in the event that a Change in Control
occurs, then immediately prior to the effective date of such Change in Control,
the total restricted stock not previously vested shall thereupon immediately
become vested.


 

















 


4.               Forfeiture of
Awarded Shares. Awarded Shares that are not vested in accordance with Section 3
shall be forfeited on the date of the Participant’s Termination of Service.
Upon forfeiture, all of the Participant’s rights with respect to the forfeited
Awarded Shares shall cease and terminate, without any further obligations on
the part of the Company.


 


5.               Restrictions on
Awarded Shares. Awarded Shares that are not vested in accordance with Section 3
and which are subject to forfeiture in accordance with Section 4
shall be subject to the terms, conditions, provisions, and limitations of this Section 5.


 


a.               Subject to the
provisions of the Plan and the other terms of this Agreement, from the Date of
Grant until the date the Awarded Shares are vested in accordance with Section 3
and no longer subject to forfeiture in accordance with Section 4
(the “Restriction Period”),
the Participant shall not be permitted to sell, transfer, pledge or assign
shares any of the Awarded Shares.


 


b.              Except as provided
in paragraph (a) above, the Participant shall have, with respect to his or
her Awarded Shares, all of the rights of a stockholder of the Company,
including the right to vote the shares, and the right to receive any dividends
thereon.


 


6.               Legend.  The following legend shall be placed on all
certificates representing Awarded Shares:


 


On the face of the certificate:


 


“Transfer of this stock is restricted in accordance with conditions
printed on the reverse of this certificate.”


 


On the reverse:


 


“The shares of stock evidenced by this certificate are subject to and
transferable only in accordance with that certain Cano Petroleum, Inc.
2005 Long-Term Incentive Plan, a copy of which is on file at the principal
office of the Company in Fort Worth, Texas. 
No transfer or pledge of the shares evidenced hereby may be made except
in accordance with and subject to the provisions of said Plan.  By acceptance of this certificate, any
holder, transferee or pledgee hereof agrees to be bound by all of the
provisions of said Plan.”


 


The following legend shall be inserted on a certificate evidencing
Common Stock issued under the Plan if the shares were not issued in a
transaction registered under the applicable federal and state securities laws:


 


“Shares of stock represented by this certificate have been acquired by
the holder for investment and not for resale, transfer or distribution, have
been issued pursuant to exemptions from the registration requirements of
applicable state and federal securities laws, and may not be offered for sale,
sold or transferred other than pursuant to 


 


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effective registration under such laws, or in transactions otherwise in
compliance with such laws, and upon evidence satisfactory to the Company of
compliance with such laws, as to which the Company may rely upon an opinion of
counsel satisfactory to the Company.”


 


All Awarded Shares owned by the Participant shall be subject to the
terms of this Agreement and shall be represented by a certificate or
certificates bearing the foregoing legend.


 


7.               Delivery of
Certificates.  Certificates for
Awarded Shares free of restriction under this Agreement shall be delivered to
the Participant promptly after, and only after, the Restriction Period shall
expire without forfeiture in respect of such shares of Common Stock.  Certificates for shares of Common Stock
forfeited pursuant to Section 4 shall be promptly returned to the
Company by the Participant.  In
connection with the issuance of a certificate for Restricted Stock, the
Participant shall endorse such certificate in blank or execute a stock power in
a form satisfactory to the Company in blank and deliver such certificate and
executed stock power to the Company.  The
parties acknowledge that remedies at law will be inadequate remedies for breach
of this Section 7 and consequently agree that this Section 7
shall be enforceable by specific performance. 
The remedy of specific performance shall be cumulative of all of the
rights and remedies at law or in equity of the parties under this Section 7.


 


8.               Voting.  The Participant, as record holder of the
Awarded Shares, has the exclusive right to vote, or consent with respect to,
such Awarded Shares until such time as the Awarded Shares are transferred in
accordance with this Agreement; provided, however, that this Section 8
shall not create any voting right where the holders of such Awarded Shares
otherwise have no such right.


 


9.               Representations,
Etc.  Each spouse individually is
bound by, and such spouse’s interest, if any, in any Awarded Shares is subject
to, the terms of this Agreement.  Nothing
in this Agreement shall create a community property interest where none
otherwise exists.


 


10.         Participant’s
Representations.  Notwithstanding any
of the provisions hereof, the Participant hereby agrees that he will not
acquire any Awarded Shares, and that the Company will not be obligated to issue
any Awarded Shares to the Participant hereunder, if the issuance of such shares
shall constitute a violation by the Participant or the Company of any provision
of any law or regulation of any governmental authority.  Any determination in this connection by the
Company shall be final, binding, and conclusive.  The obligations of the Company and the rights
of the Participant are subject to all applicable laws, rules, and regulations.


 


11.         Participant’s
Acknowledgments.  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 the terms and provisions thereof. The Participant hereby agrees
to accept as binding, conclusive, and final all decisions or interpretations of
the Board or the Committee upon any questions arising under the Plan or this
Agreement.


 


12.         Law Governing.  This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Texas (excluding any conflict of laws rule or
principle of Texas law 


 


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that might
refer the governance, construction, or interpretation of this agreement to the
laws of another state).


 


13.         Legal Construction.  In the event that any one or more of the
terms, provisions, or agreements that are contained in this Agreement shall be
held by either a court of competent jurisdiction, with respect to claims under Section 7,
or by an arbitrator, with respect to all other claims under the Agreement, to
be invalid, illegal, or unenforceable in any respect for any reason, the
invalid, illegal, or unenforceable term, provision, or agreement shall not
affect any other term, provision, or agreement that is contained in this
Agreement and this Agreement shall be construed in all respects as if the
invalid, illegal, or unenforceable term, provision, or agreement had never been
contained herein.


 


14.         Covenants and Agreements
as Independent Agreements. Each of the covenants and agreements that is set
forth in this Agreement shall be construed as a covenant and agreement
independent of any other provision of this Agreement.  The existence of any claim or cause of action
of the Participant against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
the covenants and agreements that are set forth in this Agreement.


 


15.         Entire Agreement.  This Agreement together with the Plan
supersede any and all other prior understandings and agreements, either oral or
in writing, between the parties with respect to the subject matter hereof and
constitute the sole and only agreements between the parties with respect to the
said subject matter.  All prior
negotiations and agreements between the parties with respect to the subject
matter hereof are merged into this Agreement. 
Each party to this Agreement acknowledges that no representations,
inducements, promises, or agreements, orally or otherwise, have been made by
any party or by anyone acting on behalf of any party, which are not embodied in
this Agreement or the Plan and that any agreement, statement or promise that is
not contained in this Agreement or the Plan shall not be valid or binding or of
any force or effect.


 


16.         Parties Bound.  The terms, provisions, and agreements that
are contained in this Agreement shall apply to, be binding upon, and inure to
the benefit of the parties and their respective heirs, executors,
administrators, legal representatives, and permitted successors and assigns,
subject to the limitation on assignment expressly set forth herein.  No person or entity shall be permitted to
acquire any Awarded Shares without first executing and delivering an agreement
in the form satisfactory to the Company making such person or entity subject to
the restrictions on transfer contained in Section 5 hereof.


 


17.         Modification.  No change or modification of this Agreement
shall be valid or binding upon the parties unless the change or modification is
in writing and signed by the parties; provided, however, that the Company may
change or modify this Agreement without the Participant’s consent or signature
if the Company determines, in its sole discretion, that such change or
modification is necessary for purposes of compliance with or exemption from the
requirements of Section 409A of the Code or any regulations or other
guidance issued thereunder. 
Notwithstanding the preceding sentence, the Company may amend the Plan
to the extent permitted by the Plan.


 


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18.         Headings.  The headings that are used in this Agreement
are used for reference and convenience purposes only and do not constitute
substantive matters to be considered in construing the terms and provisions of
this Agreement.


 


19.         Gender and Number.  Words of any gender used in this Agreement
shall be held and construed to include any other gender, and words in the
singular number shall be held to include the plural, and vice versa, unless the
context requires otherwise.


 


20.         Notice.  Any notice required or permitted to be
delivered hereunder shall be deemed to be delivered only when actually received
by the Company or by the Participant, as the case may be, at the addresses set
forth below, or at such other addresses as they have theretofore specified by
written notice delivered in accordance herewith:


 


(a)                                  Notice to the
Company shall be addressed and delivered as follows:


 


Cano Petroleum, Inc.


Burnett Plaza


801 Cherry Street


Suite 3200, Unit 25


Fort Worth, Texas  76102


Attn:  General Counsel


Facsimile:  (817) 698-0796


 


(b)                                 Notice to the
Participant shall be addressed and delivered as set forth on the signature
page.


 


21.         Tax Requirements.  The Participant is hereby advised to consult
immediately with his or her own tax advisor regarding the tax consequences of
this Agreement, the method and timing
for filing an election to include this Agreement in income under Section 83(b) of
the Code, and the tax consequences of such election.  By
execution of this Agreement, the Participant agrees that if the Participant
makes such an election, the Participant shall provide the Company with written
notice of such election in accordance with the regulations promulgated under
Code Section 83(b).  The
Company or, if applicable, any Subsidiary (for purposes of this Section 21,
the term “Company”
shall be deemed to include any applicable Subsidiary), shall have the right to
deduct from all amounts paid in cash or other form in connection with the Plan,
any Federal, state, local, or other taxes required by law to be withheld in
connection with this Award.  The Company
may, in its sole discretion, also require the Participant receiving shares of
Common Stock issued under the Plan to pay the Company the amount of any taxes
that the Company is required to withhold in connection with the Participant’s
income arising with respect to this Award. 
Such payments shall be required to be made when requested by Company and
may be required to be made prior to the delivery of any certificate
representing shares of Common Stock. 
Such payment may be made (i) by the delivery of cash to the Company
in an amount that equals or exceeds (to avoid the issuance of fractional shares
under (iii) below) the required tax withholding obligations of the
Company; (ii) if the Company, in its sole discretion, so consents in
writing, the actual delivery by the exercising Participant to the Company of
shares of Common Stock that the Participant has not acquired from the Company
within six (6) months prior to the date of exercise, which shares


 


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so delivered have an aggregate Fair Market
Value that equals or exceeds (to avoid the issuance of fractional shares under (iii) below)
the required tax withholding payment; (iii) if the Company, in its sole
discretion, so consents in writing, the Company’s withholding of a number of
shares to be delivered upon the exercise of this Award, which shares so
withheld have an aggregate fair market value that equals (but does not exceed)
the required tax withholding payment; or (iv) any combination of (i),
(ii), or (iii).  The Company may, in its
sole discretion, withhold any such taxes from any other cash remuneration
otherwise paid by the Company to the Participant.


 


[Signature
Page to Follow]


 


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IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed by its duly authorized officer, and the Participant,
to evidence his consent and approval of all the terms hereof, has duly executed
this Agreement, as of the date specified in Section 1 hereof.


 


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  CANO PETROLEUM, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ S.
  Jeffrey Johnson

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
    S.
  Jeffrey Johnson

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
    Chairman
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PARTICIPANT:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature: 

  	
  /s/ Ben
  Daitch

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  BEN DAITCH

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
								



 


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