Document:

exv10w1

 

Exhibit 10.1

February 19, 2008

Approach Resources, Inc.

One Ridgmar Centre

6500 West Freeway, Suite 800

Fort Worth, Texas 76116

Attn.: J. Ross Craft

			
	     Re:     	 	Credit Agreement (the “Loan Agreement”) dated effective as of January 18, 2008
by and among APPROACH RESOURCES INC., a Delaware corporation (“Borrower”), and THE
FROST NATIONAL BANK, a national banking association, and JPMORGAN CHASE BANK, N.A.
(collectively, “Lenders”) and APPROACH OIL & GAS INC., APPROACH OIL AND GAS (CANADA),
INC. and APPROACH RESOURCES I, LP (collectively, “Guarantors”)

Dear Mr. Craft:

     Reference is hereby made to the Loan Agreement. Capitalized terms set forth herein shall have
the meanings ascribed to them under the Loan Agreement.

     Lenders hereby waive the provisions of Section 13(a)(ii) and 13(g) of the Loan Agreement
insofar as such Sections would prohibit the transfer of any of the Oil and Gas Properties between
Borrower and any Guarantor or between Guarantors.

     Additionally, Section 13(a)(ii) of the Loan Agreement is hereby amended to provide as follows:

     “13. Negative Covenants.

     (a) Negative Pledge. Neither Borrower nor any Guarantor shall,
without the prior written consent of Required Lenders:

          (i) ..........................

          (ii) during any annual period, sell, convey, exchange, lease or otherwise
dispose of during any annual period any of its Oil and Gas Properties having an
aggregate value as determined in the most recent engineering report delivered to
Agent under Section 7(b) hereof in excess of ten percent (10%) of the Borrowing
Base, excluding (i) obsolete or worn-out equipment and (ii) oil, gas and
hydrocarbons sold in the ordinary course of Borrower’s or Guarantors’ business and
(iii) Oil and Gas Properties that have been given no Engineered Value in the
Borrowing Base then in effect and (iv) transfers of Oil and Gas Properties between
Borrower and any Guarantor or between Guarantors. After a Borrowing Base has been
determined, upon the sale of any oil and gas properties, the Borrowing Base shall
be reduced, effective on the date of consummation of such sale, by an amount which
the Required Lenders determine is the Borrowing

 

 

Base value last assigned to such oil and gas properties according to the most
recent reserve report or update thereof delivered to Agent. Agent shall provide
Borrower with written notice of the redetermined Borrowing Base made in accordance
with this Section 13(a)(ii), which written notice shall be sufficient to give
effect to such redetermined Borrowing Base without further amendment to this
Agreement.”

     The waivers of Section 13(a)(ii) and 13(g) and the amendment of Section 13(a)(ii) refer
specifically to the provisions above and do not apply to any other covenants, representations,
warranties, or other provisions contained in the Loan Agreement. Except as specifically provided
herein, nothing contained herein shall be construed as a waiver by Lenders of any other covenant or
provision of the Loan Agreement, the other Loan Documents, or of any other contract or instrument
between Borrower and Lenders, and the failure of Lenders at any time or times hereafter to require
strict performance by Borrower of any provision thereof shall not waive, affect or diminish any
right of Lenders to thereafter demand strict compliance therewith. Lenders hereby reserves all
rights granted under the Loan Agreement, the other Loan Documents, this waiver and amendment any
other contract or instrument between Borrower and Lenders.

     The Loan Agreement as amended by this letter represents the final agreement on this matter and
may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements
between the parties. There are no unwritten oral agreements between the parties.

	 	 	 	 	 	 	 	 	 	 	 
	LENDERS:	 	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	THE FROST NATIONAL BANK	 	 	 	APPROACH RESOURCES INC.,

 a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ John S. Warren
	 	 	 	By:
	 	/s/ J. Ross Craft	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	John S. Warren, Senior Vice President
	 	 	 	 	 	J. Ross Craft, President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	JPMORGAN CHASE BANK, N.A.	 	 	 	GUARANTORS:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Wm. Mark Cranmer	 	 	 	APPROACH OIL & GAS INC.,	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 	 	Wm. Mark Cranmer, Senior Vice President	 	 	 	a Delaware corporation	 	 
	 

	 		 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ J. Ross Craft	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	J. Ross Craft, President and Chief Executive Officer	 	 
	 

	 	 	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	APPROACH OIL & GAS (CANADA), INC.,	 	 
	 	 	 	 	 	 	an Alberta, Canada corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ J. Ross Craft	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	J. Ross Craft, President and Chief	 	 
	 

	 	 	 	 	 	 	 	Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	APPROACH RESOURCES I, LP,	 	 
	 	 	 	 	 	 	a Texas limited partnership	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	Approach Operating, LLC,	 	 
	 

	 	 	 	 	 	 	 	a Delaware limited liability company,	 	 
	 

	 	 	 	 	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	Approach Resources Inc.,	 	 
	 

	 	 	 	 	 	 	 	a Delaware corporation,	 	 
	 

	 	 	 	 	 	 	 	its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ J. Ross Craft	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	J. Ross Craft, President and Chief	 	 
	 

	 	 	 	 	 	 	 	Executive Officerexv10w01

 

EXHIBIT 10.01

SILICON IMAGE, INC.

NOTICE OF GRANT OF RESTRICTED STOCK UNITS

(For U.S. Participants)

The Participant has been granted an award of Restricted Stock Units (the “Award” or “RSUs”)
pursuant to the Silicon Image, Inc. 1999 Equity Incentive Plan, as amended to the Grant Date (the
“Plan”), each of which represents the right to receive on the applicable Vesting Date one (1)
Share, as follows:

	 	 	 	 	 	 	 	 	 
	Participant:

	 	 	 	 	 	Employee ID:
	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Grant Date:

	 	 	 	 	 	Grant No.:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Number of RSUs:	 	                    , subject to adjustment as provided
by the Award Agreement.	 	 
	 
	 	 	 	 	 	 	 	 
	Vesting Schedule:	 	Subject to Participant’s continued
service to the Company or a Parent or
Subsidiary of the Company through the
applicable “Vesting Date”, RSUs shall
vest, if at all, and become “Vested
RSUs” on each applicable Vesting
Date, as set forth in Exhibit A
attached hereto, and on the terms and
conditions of which are incorporated
herein.	 	 

By their signatures below or by electronic acceptance or authentication in a form authorized by the
Company, the Company and the Participant agree that the Award is governed by this Notice and by the
provisions of the Plan and the Award Agreement, both of which are made a part of this document.
Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms
in the Award Agreement or the Plan. The Participant acknowledges that copies of the Plan, the
Award Agreement and the prospectus for the Plan are available on the Company’s internal web site
and may be viewed and printed by the Participant for attachment to the Participant’s copy of this
Notice. The Participant represents that the Participant has read and is familiar with the
provisions of the Plan and the Award Agreement, and hereby accepts the Award subject to all of
their terms and conditions.

	 	 	 	 	 	 	 	 	 
	SILICON IMAGE, INC.	 	 	 	PARTICIPANT	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Signature	 	 
	Its:
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Date	 	 
	Address:

	 	1060 E. Arques Avenue	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Sunnyvale, CA 94085, USA
	 	 	 	Address	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

			
	ATTACHMENTS:	 	1999 Equity Incentive Plan, as amended to the Grant Date; Award Agreement and Plan
Prospectus

 

 

SILICON IMAGE, INC.

RESTRICTED STOCK UNITS AGREEMENT

(For U.S. Participants)

     Silicon Image, Inc. has granted to the Participant named in the Notice of Grant of Restricted
Stock Units (the “Notice”) to which this Restricted Stock Units Agreement (the “Award Agreement”)
is attached an award consisting of Restricted Stock Units (the “Award” or “RSUs”) subject to the
terms and conditions set forth in the Notice and this Award Agreement. The Award has been granted
pursuant to the Silicon Image, Inc. 1999 Equity Incentive Plan (the “Plan”), as amended to the
Grant Date, the provisions of which are incorporated herein by reference. By signing the Notice,
the Participant: (a) acknowledges receipt of and represents that the Participant has read and is
familiar with the Notice, this Award Agreement, the Plan and a prospectus for the Plan (the “Plan
Prospectus”) in the form most recently prepared in connection with the registration with the
Securities and Exchange Commission of Shares issuable pursuant to the Plan, (b) accepts the Award
subject to all of the terms and conditions of the Notice, this Award Agreement and the Plan and
(c) agrees to accept as binding, conclusive and final all decisions or interpretations of the
Compensation Committee (the “Committee”) or by the Company’s Board of Directors (the “Board”)
acting as the Committee (upon any questions arising under the Notice, this Award Agreement or the
Plan.

     1. Definitions and Construction.

          1.1 Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings
assigned to such terms in the Notice or the Plan.

          1.2 Construction. Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of this Award Agreement. Except when
otherwise indicated by the context, the singular shall include the plural and the plural shall
include the singular. Use of the term “or” is not intended to be exclusive, unless the context
clearly requires otherwise.

     2. Administration.

          All questions of interpretation concerning the Notice, this Award Agreement and the Plan shall
be determined by the Committee or by the Board acting as the Committee. All determinations by the
Committee or the Board shall be final and binding upon all persons having an interest in the Award.
Any officer of the Company shall have the authority to act on behalf of the Company with respect
to any matter, right, obligation, or election which is the responsibility of or which is allocated
to the Company herein, provided that such officer has apparent authority with respect to such
matter, right, obligation, or election.

     3. The Award.

          3.1 Grant of RSUs. On the Grant Date, the Participant shall acquire, subject to the
provisions of this Award Agreement, the Number of RSUs set forth in the Notice, subject to
adjustment as provided in section 2.2 of the Plan. Each RSU represents a right to receive on a
date determined in accordance with the Notice and this Award Agreement one (1) Share.

1

 

          3.2 No Monetary Payment Required. The Participant is not required to make any monetary
payment (other than applicable tax withholding, if any) as a condition to receiving the RSUs or
Shares issued upon settlement of the RSUs, the consideration for which shall be past services
actually rendered and/or future services to be rendered to the Company (or any Parent or
Subsidiary) or for its benefit. Notwithstanding the foregoing, if required by applicable corporate
law, the Participant shall furnish consideration in the form of cash or past services rendered to
the Company (or any Parent or Subsidiary) or for its benefit having a value not less than the par
value of the Shares issued upon settlement of the RSUs. The Participant may also be subject to,
where applicable, the methods of payment required by the Plan.

     4. Vesting of RSUs.

          Except as otherwise provided by this section, the RSUs shall vest and become Vested RSUs as
provided in the Notice. In the event that a Vesting Date as provided in the Notice (an “Original
Vesting Date”) would occur on a date on which a sale by the Participant of the Shares to be issued
in settlement of the RSUs becoming Vested RSUs on such Original Vesting Date would violate the
Company’s written policy pertaining to the purchase, sale, transfer or other disposition of the
Company’s equity securities by directors, officers, employees or other service providers who may
possess material, nonpublic information regarding the Company or its securities (the “Insider
Trading Policy”), such Vesting Date, in the discretion of the Company, may be deferred until the
first to occur of (a) the next business day on which a sale by the Participant of such Shares would
not violate the Insider Trading Policy or (b) the later of (i) the last day of the calendar year in
which the Original Vesting Date occurred or (ii) the last day of the Company’s taxable year in
which the Original Vesting Date occurred.

     5. Company Reacquisition Right.

          In the event that the Participant’s service Terminates for any reason or no reason, with or
without Cause, the Participant shall forfeit and the Company shall automatically reacquire all RSUs
which are not, as of the time of such Termination, Vested RSUs, and the Participant shall not be
entitled to any payment therefor.

     6. Settlement of the Award.

          6.1 Issuance of Shares. Subject to the provisions of section 6.3 below, the Company shall
issue to the Participant on the Vesting Date with respect to each Vested RSU to be settled on such
date one (1) Share. Shares issued in settlement of Vested RSUs shall not be subject to any
restriction on transfer other than any such restriction as may be required pursuant to section 6.3,
section 7 or the Company’s Insider Trading Policy.

          6.2 Beneficial Ownership of Shares; Certificate Registration. The Participant hereby
authorizes the Company, in its sole discretion, to deposit for the benefit of the Participant with
a broker selected by the Company and with which the Participant has an account relationship any or
all Shares acquired by the Participant pursuant to the settlement of the Vested RSUs. Except as
provided by the preceding sentence, a certificate for the Shares as to which the Award is settled
shall be registered in the name of the Participant, or, if applicable, in the names of the heirs of
the Participant.

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          6.3 Restrictions on Grant of the Award and Issuance of Shares. The grant of the Award and
issuance of Shares upon settlement of the Vested RSUs shall be subject to compliance with all
applicable requirements of federal, state law or foreign law with respect to such securities. No
Shares may be issued hereunder if the issuance of such Shares would constitute a violation of any
applicable federal, state or foreign securities laws or other law or regulations or the
requirements of any stock exchange or market system upon which the Shares may then be listed. The
inability of the Company to obtain from any regulatory body having jurisdiction the authority, if
any, deemed by the Company’s legal counsel to be necessary for the lawful issuance of any Shares
subject to the Award shall relieve the Company of any liability in respect of the failure to issue
such Shares as to which such requisite authority shall not have been obtained. As a condition to
the settlement of the Vested RSUs, the Company may require the Participant to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto as may be requested
by the Company.

          6.4 Fractional Shares. The Company shall not be required to issue fractional Shares upon the
settlement of the Award.

     7. Tax Withholding.

          7.1 In General. At the time the Notice is executed, or at any time thereafter as requested by
the Company, the Participant hereby authorizes withholding from payroll and any other amounts
payable to the Participant, and otherwise agrees to make adequate provision for, any sums required
to satisfy the federal, state, local and foreign tax withholding obligations of the Company, if
any, which arise in connection with the Award or the issuance of Shares in settlement thereof.
Alternatively, or in addition, if permissible under applicable law, the Company may require the
Participant to satisfy such tax withholding obligations through either or both of the methods
described in sections 7.2 and 7.3 below. The Company shall have no obligation to process the
settlement of the Award or to deliver Shares until the tax withholding obligations as described in
this section have been satisfied by the Participant.

          7.2 Assignment of Sale Proceeds. Subject to compliance with applicable law and the Company’s
Insider Trading Policy, the Company may, in its discretion, require the Participant to satisfy all
or any portion of the tax withholding obligations in accordance with procedures established by the
Company providing for delivery by the Participant to the Company or a broker approved by the
Company of properly executed instructions, in a form approved by the Company, providing for the
assignment to the Company of the proceeds of a sale with respect to some or all of the Shares being
acquired upon settlement of Vested RSUs.

          7.3 Withholding in Shares. The Company may, in its discretion, require the Participant to
satisfy all or any portion of the tax withholding obligations by deducting from the Shares
otherwise deliverable to the Participant in settlement of the Vested RSUs a number of whole Shares
having a Fair Market Value, as determined by the Company as of the date on which the tax
withholding obligations arise, not in excess of the amount of such tax withholding obligations
determined by the applicable minimum statutory withholding rates.

3

 

     8. Compliance with Laws and Regulations

          The vesting of the Award and the issuance and transfer of the Shares shall be subject to
compliance by the Company and Participant with all applicable requirements of federal and state
securities laws and with all applicable requirements of any stock exchange or market system on
which the Company’s common stock may be listed at the time of such issuance or transfer. The
Participant understands that the Company is under no obligation to register or qualify the Shares
with the SEC, any state securities commission or any stock exchange or market system to effect such
compliance.

     9. Rights as a Stockholder or Employee.

          The Participant shall have no rights as a stockholder with respect to any Shares which may be
issued in settlement of this Award until the date of the issuance of such Shares (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized transfer agent of the
Company). No adjustment shall be made for dividends, distributions or other rights for which the
record date is prior to the date such Shares are issued, except as provided in section 2.2 of the
Plan. If the Participant is an employee, the Participant understands and acknowledges that, except
as otherwise provided in a separate, written employment agreement between the Company or a Parent
or Subsidiary and the Participant, the Participant’s employment is “at will” and is for no
specified term. Nothing in this Award Agreement shall confer upon the Participant any right to
continue in service or interfere in any way with any right of the Company or any Parent or
Subsidiary to Terminate the Participant’s service at any time.

     10. Legends.

          The Company may at any time place legends referencing any applicable federal, state or foreign
securities law restrictions on all certificates representing Shares issued pursuant to this Award
Agreement. The Participant shall, at the request of the Company, promptly present to the Company
any and all certificates representing Shares acquired pursuant to this Award in the possession of
the Participant in order to carry out the provisions of this section.

     11. Miscellaneous Provisions.

          11.1 Termination or Amendment. The Board may terminate or amend the Plan or this Award
Agreement at any time; provided, however, that except as provided in section 19 of the Plan in
connection with a corporate transaction, no such termination or amendment may adversely affect the
Participant’s rights under this Award Agreement without the consent of the Participant unless such
termination or amendment is necessary to comply with applicable law or government regulation. No
amendment or addition to this Award Agreement shall be effective unless in writing.

          11.2 Nontransferability of the Award. Prior the issuance of Shares on the applicable Vesting
Date, neither this Award nor any RSUs subject to the Award shall be subject in any manner to
anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment
by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the
laws of descent and distribution. All rights with respect to the

4

 

Award shall be exercisable during the Participant’s lifetime only by the Participant or the
Participant’s guardian or legal representative.

          11.3 Further Instruments. The parties hereto agree to execute such further instruments and to
take such further action as may reasonably be necessary to carry out the intent of this Award
Agreement.

          11.4 Binding Effect. This Award Agreement shall inure to the benefit of the successors and
assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding
upon the Participant and the Participant’s heirs, executors, administrators, successors and
assigns.

          11.5 Delivery of Documents and Notices. Any document relating to participation in the Plan or
any notice required or permitted hereunder shall be given in writing and shall be deemed
effectively given (except to the extent that this Award Agreement provides for effectiveness only
upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail
address, if any, provided for the Participant by the Company or a Parent or Subsidiary, or upon
deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with
a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the
other party at the address shown below that party’s signature to the Notice or at such other
address as such party may designate in writing from time to time to the other party.

               (a) Description of Electronic Delivery. The Plan documents, which may include but do not
necessarily include: the Plan, the Notice, this Award Agreement, the Plan Prospectus, and any
reports of the Company provided generally to the Company’s stockholders, may be delivered to the
Participant electronically. In addition, the Participant may deliver electronically the Notice to
the Company or to such third party involved in administering the Plan as the Company may designate
from time to time. Such means of electronic delivery may include but do not necessarily include
the delivery of a link to a Company intranet or the internet site of a third party involved in
administering the Plan, the delivery of the document via e-mail or such other means of electronic
delivery specified by the Company.

               (b) Consent to Electronic Delivery. The Participant acknowledges that the Participant has
read section 11.5(a) of this Award Agreement and consents to the electronic delivery of the Plan
documents and Notice, as described in section 11.5(a). The Participant acknowledges that he or she
may receive from the Company a paper copy of any documents delivered electronically at no cost to
the Participant by contacting the Company by telephone or in writing. The Participant further
acknowledges that the Participant will be provided with a paper copy of any documents if the
attempted electronic delivery of such documents fails. Similarly, the Participant understands that
the Participant must provide the Company or any designated third party administrator with a paper
copy of any documents if the attempted electronic delivery of such documents fails. The
Participant may revoke his or her consent to the electronic delivery of documents described in
section 11.5(a) or may change the electronic mail address to which such documents are to be
delivered (if Participant has provided an electronic mail address) at any time by notifying the
Company of such revoked consent or revised e-mail address by telephone, postal service or
electronic mail. Finally, the Participant

5

 

understands that he or she is not required to consent to electronic delivery of documents
described in section 11.5(a).

          11.6 Integrated Agreement. The Plan is incorporated herein by reference. The Notice, this
Award Agreement and the Plan shall constitute the entire understanding and agreement of the
Participant and the Company with respect to the subject matter contained herein or therein and
supersedes any prior agreements, understandings, restrictions, representations, or warranties
between the Participant and the Company with respect to such subject matter other than those as set
forth or provided for herein or therein. To the extent contemplated herein or therein, the
provisions of the Notice and the Award Agreement shall survive any settlement of the Award and
shall remain in full force and effect.

          11.7 Applicable Law. This Award Agreement shall be governed by and construed in accordance
with the laws of the State of California as such laws are applied to agreements between California
residents entered into and to be performed entirely within the State of California.

          11.8 Interpretation. Any dispute regarding the interpretation of this Award Agreement shall be
submitted by Participant or the Company to the Compensation Committee for review. The resolution
of such a dispute by the Committee shall be final and binding on the Company and Participant.

          11.9 Counterparts. The Notice may be executed in counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument.

6

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