Exhibit 10.23


 


RESACA
EXPLOITATION, INC.


 


NONQUALIFIED
STOCK OPTION AGREEMENT


 


Optionee:
Marc Neatherlin


 


1.              Grant of Stock Option. As of the Grant Date (identified in Section 18 below), Resaca
Exploitation, Inc., a Texas corporation (the “Company”) hereby grants a Nonqualified Stock
Option (the “Option”)  to
the Optionee (identified above), an Employee of the
Company, to purchase the number of shares of the Company’s common stock, $0.01
par value per share (the “Common Stock”),  identified
in Section 18 below (the “Shares”),  subject
to the terms and conditions of this agreement (the “Agreement”)  and the Resaca Exploitation, Inc. 2008
Stock Incentive Plan (the “Plan”). The
Plan is hereby incorporated herein in its entirety by reference. The Shares, when
issued to Optionee upon the exercise of the Option, shall be fully paid and
nonassessable. The Option is not an “incentive stock option” as defined in Section
422 of the Internal Revenue Code.


 


2.              Definitions. All capitalized terms used herein shall
have the meanings set forth in the Plan unless otherwise provided herein. Section
18 sets forth meanings for certain of the capitalized terms used in this
Agreement.


 


3.              Option Term. The Option shall commence on the Grant
Date (identified in Section 18 below) and terminate on the eighth (8th) anniversary
of the Grant Date as specified in Section 18. The period during which
the Option is in effect and may be exercised is referred to herein as the “Option Period”.


 


4.              Option Price. The Option Price per Share is identified
in Section 18.


 


5.              Vesting. The total number of Shares subject to
this Option shall vest in accordance with the Vesting
Schedule (described in Section 18). The Shares may be
purchased at any time after they become vested, in whole or in part, during the
Option Period; provided, however, the Option may only be exercisable to acquire
whole Shares. The right of exercise provided herein shall be cumulative so that
if the Option is not exercised to the maximum extent permissible after vesting,
the vested portion of the Option shall be exercisable, in whole or in part, at
any time during the Option Period.


 


6.              Method of Exercise. The Option is exercisable by delivery of
a written notice to the Secretary of the Company, signed by the Optionee, specifying
the number of Shares to be acquired on, and the effective date of, such
exercise. The Optionee may withdraw notice of exercise of this Option, in
writing, at any time prior to the close of business on the business day that
immediately precedes the proposed exercise date.


 


7.              Method of Payment. Subject to applicable provisions of the
Plan, the Option Price upon exercise of the Option shall be payable to the
Company in full either: (i) in cash or its equivalent; (ii) subject to prior
approval by the Committee in its discretion, by tendering previously acquired
Shares having an aggregate Fair Market Value (as defined in the Plan) at the
time of exercise equal to the total Option Price; (iii) subject to prior
approval by the Committee


 

















 


in its discretion, by
withholding Shares which otherwise would be acquired on exercise having an
aggregate Fair Market Value at the time of exercise equal to the total Option
Price; or (iv) any other permitted method pursuant to the applicable terms and
conditions of the Plan.


 


As soon as practicable
after receipt of a written notification of exercise and full payment, the
Company shall deliver to or on behalf of the Optionee, in the name of the
Optionee or other appropriate recipient, Share certificates or other evidence
of ownership for the number of Shares purchased under the Option.


 


8.              Restrictions on Exercise. The Option may not be exercised if the
issuance of such Shares or the method of payment of the consideration for such
Shares would constitute a violation of any applicable federal or state
securities or other laws or regulations, or any rules or regulations of any
stock exchange on which the Common Stock is listed. In addition, Optionee
understands and agrees that the Option cannot be exercised if the Company
determines that such exercise, at the time of such exercise, will be in
violation of the Company’s insider trading policy.


 


9.              Termination of
Employment. Voluntary
or involuntary termination of Employment shall affect Optionee’s rights under
the Option as follows:


 


(a)               Termination for Cause. The non-vested portion of the Option
shall expire and terminate on the date of termination of Employment and shall
not be exercisable to any extent if Optionee’s Employment is terminated for
Cause (as defined in the Plan at the time of such termination of Employment). The
vested portion of the Option shall expire on the thirty (30) day anniversary of
the termination of Employment to the extent not previously exercised by
Optionee. In no event may the Option be exercised after the earlier of (i) the
expiration of the Option Period or (ii) the thirty (30) day anniversary of the
date of termination of Employment for Cause.


 


(b)               Voluntary Termination or Retirement. If Optionee’s Employment is voluntarily
terminated by Optionee or terminated for Retirement, then (i) the non-vested
portion of the Option shall immediately expire on the termination date and (ii)
the vested portion of the Option shall expire to the extent not previously
exercised before the one (1) year anniversary of the date of such termination
of Employment. In no event may the Option be exercised after the earlier of (i)
the expiration of the Option Period or (ii) the one (1) year anniversary of the
date of termination of Employment due to voluntary termination or Retirement.


 


(c)               Death or Disability. If Optionee’s Employment is terminated
due to death or Disability (as defined in the Plan at the time of such
termination), then (i) the Option shall immediately become fully vested on the
termination of Employment date and (ii) the vested portion of the Option shall
expire on the one (1) year anniversary date of the termination of Employment
date to the extent not previously exercised by Optionee or, in the case of
death, by the person or persons to whom Optionee’s rights under the Option have
passed by will or by the laws of descent and distribution or, in the case of
Disability, by Optionee or Optionee’s legal representative. In no event may the
Option be exercised


 


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by anyone on or after the
earlier of (i) the expiration of the Option Period or (ii) one (1) year after
the date of termination of Employment due to Optionee’s death or Disability.


 


(d)               Other Involuntary Termination. If Optionee’s Employment is terminated for
any reason other than for Cause, Retirement, death or Disability, or voluntary
termination, then (i) the Option shall immediately become fully vested on the
termination of Employment date and (ii) the vested portion of the Option shall
expire to the extent not previously exercised within one (1) year after such
termination date. In no event may the Option be exercised by anyone after the
earlier of (i) the expiration of the Option Period or (ii) one (1) year after
the termination of Employment date even if Optionee becomes deceased during
such period. The termination of Employment of Optionee due to or as a result of
the termination or expiration of the Co-Employer Agreement, dated July 11, 2008,
by and between the Company and Torch Energy Advisors Incorporated shall be
considered an involuntary termination of Optionee’s Employment for purposes of
this Agreement.


 


10.            Independent Legal and
Tax Advice. Optionee
acknowledges that the Company has advised Optionee to obtain independent legal
and tax advice regarding the grant and exercise of the Option and the
disposition of any Shares acquired thereby.


 


11.            Reorganization of
Company. The
existence of the Option shall not affect in any way the right or power of the
Company or its shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in Company’s capital structure or its business,
or any merger or consolidation of the Company, or any issue of bonds, debentures,
preferred or prior preference stock ahead of or affecting the Shares or the
rights thereof, or the dissolution or liquidation of the Company, or any sale
or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.


 


12.            Adjustment of Shares. In the event of stock dividends, spin-offs
of assets or other extraordinary dividends, stock splits, combinations of
shares, recapitalizations, mergers, consolidations, reorganizations, liquidations,
issuances of rights or warrants and similar transactions or events involving
Company, appropriate adjustments shall be made to the terms and provisions of
the Option as provided in the Plan.


 


13.            No Rights in Shares. Optionee shall have no rights as a
shareholder in respect of the Shares until the Optionee becomes the record
holder of such Shares.


 


14.            Investment
Representation. Optionee will enter into such written representations,
warranties and agreements as Company may reasonably request in order to comply
with any federal or state securities law. Moreover, any stock certificate for
any Shares issued to Optionee hereunder may contain a legend restricting their
transferability as determined by the Company in its discretion. Optionee agrees
that Company shall not be obligated to take any affirmative action in order to
cause the issuance or transfer of Shares hereunder to comply with any law, rule
or regulation that applies to the Shares subject to the Option.


 


15.            No Guarantee of
Employment. The
Option shall not confer upon Optionee any right to continued employment with
the Company or any affiliate thereof.


 


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16.            Withholding of Taxes. The Company shall have the right to (a) make
deductions from the number of Shares otherwise deliverable upon exercise of the
Option in an amount sufficient to satisfy withholding of any federal, state or
local taxes required by law, or (b) take such other action as may be necessary
or appropriate to satisfy any such tax withholding obligations.


 


17.            General.


 


(a)               Notices. All notices under this Agreement shall be mailed or
delivered by hand to the parties at their respective addresses set forth
beneath their signatures below or at such other address as may be designated in
writing by either of the parties to one another, or to their permitted
transferees if applicable. Notices shall be effective upon receipt.


 


(b)               Shares Reserved. The Company shall at all times during
the Option Period reserve and keep available under the Plan such number of
Shares as shall be sufficient to satisfy the requirements of this Option.


 


(c)               Transferability of Option. The Option is transferable only to the
extent permitted under the Plan at the time of transfer (i) by will or by the
laws of descent and distribution, (ii) by a qualified domestic relations order
(as defined in Section 414(p) of the Internal Revenue Code), or (iii) to
Optionee’s Immediate Family or entities established for the benefit of, or
solely owned by, the Optionee’s Immediate Family, but only to the extent
permitted under the Plan. No right or benefit hereunder shall in any manner be
liable for or subject to any debts, contracts, liabilities, obligations or
torts of Optionee or any permitted transferee thereof.


 


(d)            
Amendment and
Termination. No
amendment, modification or termination of this Agreement shall be made at any
time without the written consent of Optionee and Company.


 


(e)               No Guarantee of Tax Consequences. The Company makes no commitment or
guarantee that any tax treatment will apply or be available to Optionee or any
other person. The Optionee has been advised, and provided with the opportunity,
to obtain independent legal and tax advice regarding the grant and exercise of
the Option and the disposition of any Shares acquired thereby.


 


(f)                Severability. In the event that any provision of this
Agreement shall be held illegal, invalid, or unenforceable for any reason, such
provision shall be fully severable, but shall not affect the remaining
provisions of the Agreement, and the Agreement shall be construed and enforced
as if the illegal, invalid, or unenforceable provision had not been included
herein.


 


(g)               Supersedes Prior Agreements. This Agreement shall supersede and
replace all prior agreements and understandings, oral or written, between the
Company and the Optionee regarding the grant of the Options covered hereby.


 


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(h)               Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Texas, without regard to its conflict
of law provisions, to the extent federal law does not supersede and preempt
Texas law.


 


18.           Definitions and Other
Terms. The
following capitalized terms shall have those meanings set forth opposite them:


 


	
  (a)           Optionee:

  	
  Marc Neatherlin

  
	
   

  	
   

  
	
  (b)           Grant Date:

  	
  September 25, 2009

  
	
   

  	
   

  
	
  (c)           Shares:

  	
  Seventy Five Thousand
  (75,000) Shares of the Company’s Common Stock.

  
	
   

  	
   

  
	
  (d)           Option Price:

  	
  50 pence per Share

  
	
   

  	
   

  
	
  (e)           Option Period:

  	
  September 25, 2009
  through September 25, 2017 (until 5:00 p.m. CST).

  



 


(f)           
Vesting Schedule:  Options
covered by this Option Agreement shall become vested, provided that, subject to
Section 9, Optionee is then, and continuously from the Grant Date has
been, an Employee of the Company, in accordance with the following schedule:


 


	
  Vesting Date

  	
   

  	
  Vested %

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  First
  Anniversary of the Grant Date

  	
   

  	
  33 1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Second Anniversary
  of the Grant Date

  	
   

  	
  33 1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Third
  Anniversary of the Grant Date

  	
   

  	
  33 1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  100

  	
  %

  



 


Notwithstanding the above
vesting schedule, in the event of a “Change in Control” of the Company (as
defined in the Plan at the time of such event), the non-vested portion of the
Option shall become immediately 100% vested as of the Change in Control date.


 


[Signature page follows]


 


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IN
WITNESS WHEREOF, the
Company, as of the Grant Date, has caused this Agreement to be executed on its
behalf by its duly authorized officer and Optionee has hereunto executed this
Agreement as of the same date.


 


	
   

  	
   

  	
  RESACA EXPLOITATION, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Mary Lou Fry

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mary Lou Fry

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title: 

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notices:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Resaca Exploitation, Inc.

  
	
   

  	
   

  	
  1331 Lamar Street,
  Suite 1450

  
	
   

  	
   

  	
  Houston, TX 77010

  
	
   

  	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OPTIONEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Marc Neatherlin

  
	
   

  	
   

  	
  MARC NEATHERLIN

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notices:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c/o Resaca Operating
  Company

  
	
   

  	
   

  	
  2600 W, 1-20

  
	
   

  	
   

  	
  Odessa, Texas
  79763-5100

  



 


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