Document:

EXHIBIT 10.1

 

Employee Stock Option Grant

 

On September 8, 2014, as approved by the Compensation Committee of the Pernix Group, Inc. Board of Directors, employee stock option grants were awarded in the amount and upon the terms and conditions set forth below.

 

General Terms of Grant:

 

·                  Form of grant: Stock option award for President and Chief Executive Officer.

 

·                  Term and vesting of stock options: The stock option grants vest equally over a 3 year period and are coterminous with the expiration date of the plan or 10 years from the date of the grant, whichever occurs sooner.

 

·                  Grant date: September 8, 2014.

 

·                  Exercise Price for Stock Options: To be determined based on fair market value.

 

·                  Number of stock options:

 

	
 
    	
 
    	
 
    	
 
    	
Stock Options
    	
 
    
	
Nidal Z. Zayed, President and CEO
    	
 
    	
-
    	
 
    	
1,000,000Exhibit 10.2

 

Form of Employee Stock Option Award Notice and Agreement

 

Pernix Group, Inc.

Equity Incentive Plan (“EIP” or the “Plan”)

STOCK OPTION AWARD AGREEMENT

 

THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT of 1933, AS AMENDED.

 

This Stock Option Agreement (“Agreement”) is made and entered into as of the date of grant set forth below (the “Date of Grant”)

 

	
BETWEEN:
    	
Pernix Group, Inc. (the “Company”), a corporation organized and existing under   the laws of the State of Delaware, with its head   office located at: 151 East 22nd Street, Lombard, Illinois   60148
    
	
 
    	
 
    
	
AND:
    	
                 (the   “Optionee”), an individual with his or her main address at:                                          
    

 

Capitalized terms not defined herein shall have the meaning ascribed to them in the Pernix Group, Inc. Equity Incentive Plan (the “Plan”).

 

Total Stock Options:                    

 

Exercise Price Per Share: Equal to the fair market value of the Pernix Group, Inc. Common Stock (“Common Stock” or “Stock”) as of the Date of Grant. Fair market value shall be determined in accordance with the Plan document as defined.

 

Date of Grant:                        

 

Vesting Date: One third of the total number of options granted under this Agreement shall become exercisable in cumulative fashion on the first anniversary                      through the third anniversary                    of the Date of Grant.

 

Acceleration of Vesting: In the event the employee is terminated by the Company, without regard to cause or reason for termination, all options granted to this employee under this award agreement shall fully vest. No vesting shall be accelerated on this option award or any other previously issued award(s) granted to this employee under the EIP or the Incentive Stock Option Plan in the event the Employee initiates his own termination / resignation.

 

Expiration Date for Exercise of Options:  Each option granted under this award that becomes vested on or before the date of the employee’s termination shall not by its terms expire until and shall be exercisable until the earlier of the expiration of ten years from the Date of Grant or as of the date of the initial expiration of the Plan in 2023.

 

Type of Stock Option (indicate type of award):

 

o Qualified Incentive Stock Option (Employees) OR

o Non-Qualified Stock Option (Non-Employee Board Directors)

 

 

Terms and Conditions

 

To the extent any provisions of this award agreement are in conflict with the terms of the EIP or Incentive Stock Option Plan, the provisions of this award agreement take precedence over the EIP and the Incentive Stock Option Plan.

 

	
Acknowledgement of Optionee
    	
 
    	
 
    
	
 
    	
 
    	
Optionee Signature
    
	
Date:
    	
 
    	
 
    	
 
    
				

 

CONSENT OF SPOUSE IF APPLICABLE

 

The undersigned spouse of the Optionee to the foregoing Stock Option Agreement acknowledges on his or her own behalf that: I have read the foregoing Stock Option Agreement and I know its contents. I hereby consent to and approve of the provisions of the Stock Option Agreement, and agree that the Stock issued upon exercise of the options covered thereby and my interest in them are subject to the provisions of the Stock Option Agreement and that I will take no action at any time to hinder operation of the Stock Option Agreement on those Shares of Stock or my interest in them.

 

	
 
    	
 
    
	
NAME OF SPOUSE (IF APPLICABLE)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
[ADDRESS], [CITY], [STATE], [ZIP]
    	
 
    

 

 

The Corporation and the Optionee hereby agree to the terms and conditions of this Agreement and have executed it as of the Date of Grant.

 

Approval by Optionee

 

 

	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name of Optionee
    	
 
    	
Signature of Optionee
    	
 
    	
Date of Grant
    

 

Approval of Pernix Group, Inc. or of the Compensation Committee of the Board of Directors *

 

	
 
    	
 
    	
Chairman of the Board of Directors
    
	
Don Gunther
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Director
    
	
C. Robert Campbell
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Director
    
	
Carl Smith
    	
 
    	
 
    

 

*The approval of the Board of Directors (Board) is required on this Agreement if the Option award is being granted to the President and Chief Executive Officer of Pernix Group, Inc. or for Members of the Board of Directors unless previously approved by Board resolution. For other Option awards, the approval of the President and Chief Executive Officer of Pernix Group, Inc. is required on this Agreement and the Compensation Committee may approve the total awards to be approved by the President and Chief Executive Officer award in the form of a Compensation Committee Board Resolution.

 

 

Exhibit A

 

PERNIX GROUP, INC. EQUITY INCENTIVE PLAN

 

EXERCISE NOTICE

 

COMPANY NAME:  Pernix Group, Inc.

 

Attention:

 

1. Exercise of Option. Effective as of today,               , the undersigned Optionee hereby elects to exercise Optionee’s option to purchase                  Shares of the Common Stock of Pernix Group, Inc. (the Company.) under and pursuant to the Equity Incentive Plan (the “Plan”) and the Stock Option Award Agreement dated September 8, 2014 (the “Option Agreement”).

 

2. Delivery of Payment. Purchaser herewith delivers to the Company the full purchase price of the Shares, as set forth in the Option Agreement.

 

3. Representations of Optionee. Optionee acknowledges that Optionee has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions.

 

4. Rights as Shareholder. Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the optioned Stock, notwithstanding the exercise of the Option. The Shares shall be issued to the Optionee as soon as practicable after the Option is exercised. No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance except as provided under the terms of the Plan.

 

5. Tax Consultation. Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee’s purchase or disposition of the Shares.  Optionee represents that Optionee has consulted with any tax consultants Optionee deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company for any tax advice.

 

6. Successors and Assigns. The Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this Exercise Notice shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Exercise Notice shall be binding upon Optionee and his or her heirs, executors, administrators, successors and assigns.

 

7. Interpretation. Any dispute regarding the interpretation of this Exercise Notice shall be submitted by Optionee or by the Company forthwith to the Administrator which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Administrator shall be final and binding on all parties.

 

8. Governing Law; Severability. This Exercise Notice is governed by the laws of the State of Delaware.

 

9. Entire Agreement. The Plan and Option Agreement are incorporated herein by reference. This Exercise Notice, the Plan, and the Option 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 Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee.

 

	
Submitted by:
    	
 
    	
Accepted by:
    
	
 
    	
 
    	
Pernix   Group, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature By
    	
 
    
	
Optionee
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
President and   Chief Executive Officer
    
	
Address:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date Received:Exhibit 10.10 First Amendment

FIRST AMENDMENT TO CREDIT AGREEMENT
AMONG
EVOLUTION PETROLEUM CORPORATION THE GUARANTOR PARTY HERETO
AND
TEXAS CAPITAL BANK, N.A.

Effective November 1, 2012

TABLE OF CONTENTS
 

Page

ARTICLE I    DEFINITIONS AND INTERPRETATION    1
1.1        Terms Defined Above                                1
1.2        Terms Defined in Agreement.        1
1.3        References        1
1.4        Articles and Sections        2
1.5        Number and Gender        2
1.6        Negotiated Transaction        2
ARTICLE II    AMENDMENTS  TO AGREEMENT    2
2.1        Amendment to Section 2.9        2
2.2        Amendment to Section 5.4        2
ARTICLE III     CONDITIONS TO EFFECTIVENESS    3
ARTICLE IV     RATIFICATION AND ACKNOWLEDGEMENT    3
ARTICLE V    REPRESENTATIONS  AND WARRANTIES    3
ARTICLE VI     MISCELLANEOUS    3
6.1        Successors and Assigns        3
6.2        Rights of Third Parties        3
6.3        Counterparts        3
6.4        Integration        4
6.5        Invalidity        4
6.6        Governing Law        4

- 1 -

FIRST AMENDMENT TO CREDIT AGREEMENT

This FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is made and entered into effective the 1st day of November, 2012 (the "Effective Date"), by and among EVOLUTION PETROLEUM CORPORATION, a Nevada corporation (the "Borrower"), NGS SUB. CORP., a Delaware corporation ("NGS Sub"), TERTIAIRE RESOURCES COMPANY, a Texas corporation ("Tertiaire"), NGS TECHNOLOGIES, INC., a Delaware corporation ("NGS Technologies"), EVOLUTION OPERATING CO.,  INC., a Texas corporation ("Evolution Operating," and NGS Sub, Tertiaire, NGS Technologies and Evolution  Operating, collectively, the "Initial Guarantors"), and TEXAS CAPITAL BANK, N.A.,  a national  banking  association (the  "Lender").

WITNESSTH:

WHEREAS, the Borrower, the Initial Guarantors and the Lender are parties to that certain Credit Agreement dated as of February 29, 2012 (the "Agreement");

WHEREAS, the Borrower has requested that the Lender waive the redetermination of the Borrowing Base and the Monthly Reduction Amount, respectively, to have occurred, pursuant to Section 2.9(b) of the Agreement, as soon as practicable following receipt by the Lender of the Reserve Report prepared as of January 1, 2012, and the Lender has agreed to do so as provided in this Amendment; and

WHEREAS, the Borrower and the Lender desire to amend the Agreement in the particulars hereinafter provided and the Initial Guarantors desire to join in execution of this Amendment to evidence their consent to such amendment;

NOW, THEREFORE, in consideration of the premises and  the mutual covenants and agreements herein contained, the parties hereto hereby agree as follows:

ARTICLE I 
DEFINITIONS  AND  INTERPRETATION

1.1    Terms Defined  Above.  As used in this First Amendment to Credit  Agreement, each of the terms "Agreement," "Amendment," "Borrower," "Effective Date,"  "Evolution Operating," "Initial Guarantors," "Lender," "NGS Sub," "NGS Technologies" and  "Tertiaire" shall have the meaning assigned to such term hereinabove.

1.2    Terms  Defined   in  Agreement.    Each  term  defined  in the  Agreement  and  used herein without definition shall have the meaning assigned to such term in the Agreement,  unless expressly provided to the contrary.

1.3    References. References in this Amendment to Schedule, Exhibit, Article, or Section numbers shall be to Schedules, Exhibits, Articles, or Sections of this Amendment, unless expressly stated to the contrary. References in this Amendment to "hereby," "herein," "hereinafter," "hereinabove," "herein below," "hereof " "hereunder" and words of similar import shall be to this Amendment in its entirety and not only to the particular Schedule, Exhibit,

Article, or Section in which such reference appears. Specific  enumeration  herein  shall  not exclude the general and, in such regard, the terms "includes" and "including" used herein shall mean "includes, without limitation," or "including, without limitation," as  the  case  may  be, where appropriate. Except as otherwise indicated, references in this Amendment to statutes, sections, or regulations are to be construed as including all statutory or regulatory provisions consolidating, amending, replacing, succeeding, or supplementing  the  statute,  section,  or regulation referred to. References in this Amendment to "writing" include printing, typing, lithography, facsimile reproduction, and other means of reproducing words in a tangible visible form. References in this Amendment to amendments and other contractual instruments shall be deemed to include all exhibits and appendices attached thereto and all subsequent amendments and other modifications to such instruments, but only to the extent such amendments and other modifications are not prohibited by the terms of this Amendment. References  in  this Amendment to Persons include their respective successors and permitted assigns.

1.4    Articles and Sections. This Amendment, for convenience only, has been divided into Articles and Sections; and it is understood that the rights and other legal relations of the parties hereto shall be determined from this instrument as an entirety and without regard to the aforesaid division into Articles and  Sections and without regard to headings prefixed to such Articles or Sections.

1.5    Number   and  Gender.   Whenever  the  context requires,  reference  herein  made  to the  single number  shall be understood  to include  the plural;  and likewise,  the plural  shall  be understood to include the singular. Definitions of terms defined in the singular or plural shall be equally  applicable  to  the plural  or  singular,  as the  case may  be,  unless  otherwise  indicated. Words denoting sex shall be construed to include the masculine, feminine and neuter, when such construction is appropriate;  and specific enumeration shall not exclude the general  but shall be construed as cumulative.

1.6    Negotiated Transaction. Each party to this Amendment affirms to the other that it has had the opportunity to consult, and discuss the provisions of this Amendment with, independent counsel and fully understands the legal effect of each provision.

ARTICLE II
 AMENDMENTS  TO  AGREEMENT

As of the Effective Date, the Agreement is amended as follows:

2.1    Amendment to Section 2.9. Section 2.9(b) is amended to (a) substitute "annually" for "semi-annually" appearing three times in such Section 2.9(b), (b) substitute "two such requests" for "one such request" appearing in the proviso in the second sentence of such Section 2.9(b) and (c) substitute "twice" for "once" appearing in the proviso in the third sentence of such Section 2.9(b).

2.2    Amendment  to  Section  5.4.   Section 5.4 of the Agreement is amended to read  as follows    entirety:

"(b) RESERVED".

ARTICLE III 
CONDITIONS  TO  EFFECTIVENESS

The effectiveness of this Amendment is subject to satisfaction of the condition that the Lender shall have received from the Borrower payment, in immediately available  funds, of an engineering fee in the amount of $1,500 in connection with the redetermination of the Borrowing Base and the Monthly Reduction Amount to the respective amounts set forth in Article V. Upon satisfaction of the foregoing condition, this Amendment shall be effective as of the Effective Date.

ARTICLE IV
RATIFICATION   AND ACKNOWLEDGEMENT

The Borrower, each of the Initial Guarantors and the Lender does hereby adopt, ratify and confirm the Agreement, as the same is amended hereby, and acknowledges and agrees that the Agreement, as amended hereby, is and remains in full force and effect. Each of the Borrower and the Lender hereby agrees and acknowledges that, as of the date of execution of this Amendment, the Borrowing Base is $5,000,000 and the Monthly Reduction Amount is $0, which amounts it is agreed shall remain in effect until the next redetermination of the Borrowing Base and the Monthly Reduction Amount in accordance with the applicable provisions of the Agreement.

ARTICLE V
REPRESENTATIONS   AND  WARRANTIES

The Borrower and  each of the Initial Guarantors does hereby re-make in favor of the Lender each of the representations and warranties made by it in the Loan Documents to which it is a party and further represents and warrants that each of such representations and warranties made by it remains true and correct as of the date of execution of this Amendment.

ARTICLE VI 
MISCELLANEOUS

6.1    Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted pursuant to the Agreement.

6.2    Rights  of Third  Parties.   Except as provided  in Section  7 .1, all provisions  herein are imposed solely and exclusively for the benefit of the parties hereto.

6.3    Counterparts. This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument and shall be enforceable upon the execution of one or more counterparts hereof by each of the parties hereto. In this regard, each of the parties hereto acknowledges that a counterpart of this Amendment containing a set of counterpart execution pages reflecting the execution of each party hereto shall be sufficient to reflect the execution of this Amendment by each necessary party hereto and shall constitute one instrument.

6.4    Integration. THIS AMENDMENT CONSTITUTES THE ENTIRE  AGREEMENT  AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF. ALL PRIOR UNDERSTANDINGS, STATEMENTS 

AND AGREEMENTS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT HEREOF  ARE  SUPERSEDED BY THIS AMENDMENT.

6.5    Invalidity. In the event that any one or more of the provisions contained in this Amendment shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Amendment.

6.6    Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF SUCH LAWS RELATING TO CONFLICTS OF LAW.

(Signatures appear on following pages)

IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed  and  delivered  this  First Amendment to Credit Agreement to be effective as of the Effective Date.

BORROWER:

EVOLUTION PETROLEUM CORPORATION

By:_____/s/ Sterling H. McDonald___________
Sterling H. McDonald Vice President

INITIAL  GUARANTORS: NGS SUB. CORP.

By:_____/s/ Sterling H. McDonald___________
Sterling H. McDonald Chief Financial Officer

TERTIAIRE RESOURCES COMPANY

By:_____/s/ Sterling H. McDonald___________
Sterling H. McDonald Vice President

NGS TECHNOLOGIES, INC.

By:_____/s/ Sterling H. McDonald___________
Sterling H. McDonald
Chief Financial Officer

(Signatures continue on following pages)

EVOLUTION OPERATING CO., INC.

By:____/s/ Sterling H. McDonald__________
Sterling H. McDonald Vice President

(Signatures continue on following page)

LENDER:

TEXAS CAPITAL BANK, N .A.

By:____/s/  W. David McCarver IV__________
W. David McCarver IV
Senior Vice President

8724216v.3    - 7-

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