Document:

ex_126461.htm

 

Exhibit 10.10

 

CONSULTING AGREEMENT

 

This Consulting Agreement (this “Agreement”) is entered into effective as of March 1, 2018, by and between Royale Energy, Inc., (“Royale”), and Meeteetse Limited Partnership (tax ID 56-2298132) (“Consultant”).

 

RECITALS

 

WHEREAS, Royale desires to engage Consultant for the purposes set forth in this Agreement; and

 

WHEREAS, Consultant desires to perform such services for Royale under the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing premises, and the mutual covenants, representations, warranties, and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Consultant and Royale, intending to be legally bound, hereby agree as follows:

 

1.     Services. Royale hereby engages Consultant to provide advisory services related to Royale’s operations as Consulting Senior Geologist and Business Advisor. Consultant will report directly to the Chief Executive Officer of Royale. Jeffrey Kerns will be the primary person who will be providing services for Consultant under this Agreement.

 

2.     Compensation.

 

(a)     Consultant hereby accepts the engagement described in paragraph 1 above. As compensation for his services, Royale agrees to pay Consultant a monthly retainer fee of $10,000.00 (the “Retainer”) for the period March 1, 2018 to June 30, 2018. After July 1, 2018, Royale agrees to pay Consultant $75/hr for services provided. Consultant will provide an invoice to Royale at the end of each month documenting hours worked in the previous month. Payment will be made in the form of Royale common stock to be issued each month within 45 days of receiving the invoice. Number of shares issued as compensation will be calculated based on the arithmetic average of the VWAPs of Royale’s common stock for each trading day of the calendar month covered by the invoice. Consultant acknowledges that he will receive an IRS Form 1099-MISC from the Company, and that he shall be solely responsible for all federal, state, and local taxes, as set out in Section 6 of this Agreement. Royale agrees to pay Consultant a lump sum amount of $40,000 (representing the Retainer amount for the period March 1, 2018 through the June 30, 2018) to be paid in the form of common stock. The number of shares to be issued will be calculated based on the arithmetic average of the VWAPs for the Royale common stock for each trading day between the dates March 1, 2018 to July 1, 2018. Shares will be issued by September 1, 2018. A 1 1⁄2% penalty will be added for each month after September 1, 2018 that the shares are not issued.

 

(b)     In this Agreement, “VWAP” means, with respect to the Royale common stock on each trading day, the price determined by the first of the following clauses that applies:

 

 

 

 

(a) if the Common Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such Trading Day on the Trading Market on which the Common Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Shares are not then listed or quoted for trading on a Trading Market and if prices for the Common Shares are then reported in the “Pink Sheets” published by OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the daily volume weighted average price of the Common Shares so reported for such Trading Day, or (c) in all other cases, the fair market value of one Common Share as determined by an independent appraiser selected in good faith by the Purchaser and reasonably acceptable to the Corporation, the fees and expenses of which shall be paid by the Corporation.

 

(c)     Consultant may, in his sole discretion, elect to receive all or any part of his compensation to be paid pursuant to this Agreement in shares of common stock issued by Royale (the “Shares”). In order to receive compensation payments in Shares, Consultant must notify the Company of the payment to be made in Shares, either as a dollar amount or as a percentage of the compensation to be paid for the period covered by the notice, using the form attached at the end of this Agreement. The form must be received at least two business days prior to the date on which the payment is expected to be made.

 

3.     Term. This Agreement will become effective upon execution and will remain in effect for one year after the date of execution. The Agreement is automatically renewable for additional one year terms unless either party notifies the other party at least 10 days prior to the end of the Agreement term of their intent not to renew. This Agreement may be terminated at any time by mutual agreement of the parties, and may be terminated by either party in the event of material breach by the other party, which breach is not cured within 30 days after written notice of the breach is given by the non-breaching party to the breaching party. In the event the Agreement is terminated, Consultant shall be entitled to the Retainer payable through the end of the month in which the Agreement is terminated.

 

4.     Expenses. Royale shall be responsible for paying all reasonable documented out-of-pocket expenses incurred by Consultant in connection with the performance of services under this Agreement including, but not limited to, expenses such as travel, data processing, production data acquisition, printing, copying, delivery and mailing. Expenses shall be billed to Royale concurrently with Fees and shall be due at the same time Fees are due. Consultant shall not incur expenses greater than $250.00 without Royale’s prior written approval.

 

5.     Confidentiality, Non-Disclosure, and Other Covenants.

 

(a)     Non-Disparagement. For so long as this Agreement remains in effect and thereafter, Consultant will not, directly or indirectly, in any individual or representative capacity whatsoever, make any statement, oral or written, or perform any act or omission which is or could be detrimental or disparaging in any material respect to the goodwill of the Royale. Nothing herein, however, prohibits consultant from testifying in a legal proceeding or participating in any manner in an investigation or proceeding with the Securities Exchange Commission or similar agency.

 

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(b)     Covenant of Confidentiality. Consultant recognizes and acknowledges that he will be provided access to confidential information and trade secrets of Royale, and other entities doing business with Royale relating to research, development, marketing, financial, and other business-related activities or may discover, conceive, perfect, or develop, solely or jointly with others, inventions, discoveries, improvements, know-how, computer programs, or other technical, manufacturing, marketing, customer, and/or financial data and information, including, without limitation, access to information regarding the upgrading of current Royale products and the development of new products (hereinafter "Confidential Information"). Such Confidential Information constitutes valuable, special, and unique property of Royale, and/or other entities doing business with Royale. In consideration of such access to Confidential Information, Consultant will not, during or after the term of his employment by Royale, make any use of, or disclose any of such Confidential Information to any person or firm, corporation, association, or other entity for any reason or purpose whatsoever, except as is generally available to the public or as specifically allowed in writing by an authorized representative of Royale. This subsection (b) will indefinitely survive the expiration or termination of this Agreement.

 

(c)     Return of Confidential Information. Upon the expiration of the term or termination of this Agreement, Consultant will surrender to Royale all tangible Confidential Information in the possession of, or under the control of, Consultant, including, but without limitation, the originals and all copies of all software, drawings, manuals, letters, notes, notebooks, reports, and all other media, material, and records of any kind, and all copies thereof pertaining to Confidential Information acquired or developed by Consultant during the term of Consultant's employment (including the period preceding the Effective Date).

 

(d)     Non-Solicitation. During the term of this Agreement and for a period of one year after termination of the Agreement (the Applicable Period), Consultant will not induce, or attempt to induce, any employee or independent contractor of Royale to cease such employment or contractual relationship with Royale. Consultant furthermore agrees that in the event an employee or independent contractor terminates their employment or contractual relationship with Royale, or such employee or independent contractor is terminated by Royale, Consultant, without the prior written consent of Royale will not, during the Applicable Period, directly or indirectly, offer employment to, employ, or enter into any agreement or contract with (whether written or oral) such employee or independent contractor, or in any other manner deal with such employee or contractor; provided, that the provisions of this subsection (d) shall not apply to contacts with or solicitations of any person who was an associated person of Royale immediately prior to execution of the Purchase Agreement.

 

(e)     Right to Injunctive Relief. Consultant acknowledges that a violation or attempted violation on his part of any agreement in this Section 5 will cause irreparable damage to the Royale and its affiliates, and accordingly Consultant agrees that the Royale shall be entitled as a manner of right to an injunction, out of any court of competent jurisdiction restraining any violation or further violation of such agreements by Consultant; such right to an injunction, however, shall be cumulative and in addition to whatever other remedies the Royale may have. The terms and agreements set forth in this Section 5 shall survive the expiration of the term or termination of this Agreement for any reason. The existence of any claim of Consultant, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Royale of the agreements contained in this Section 5.

 

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(f)     Independent Contractor. Royale and Consultant agree that in the performance of the services contemplated herein, Consultant shall be, and is, an independent contractor, and this Agreement shall not be construed to create any association, partnership, joint venture, employee, or agency relationship between Consultant and Royale for any purpose. Consultant will be responsible for tools, equipment and all other supplies needed to fully perform its services under the contract. Consultant has and shall retain the right to exercise full control over the employment, direction, compensation and discharge of all persons assisting Consultant. Consultant shall be solely responsible for, and shall hold Royale harmless from all matters relating to the payment of Consultant’s employees, including compliance with the Social Security Administration, Internal Revenue Service, withholdings and all other regulations governing such matters. Consultant has no authority (and shall not hold itself out as having authority) to bind Royale and Consultant shall not make any agreements or representations on Royale’s behalf without Royale’s prior written consent. Consultant and its employees or contractors will not be eligible to participate in any vacation, group medical or life insurance, disability, profit sharing or retirement benefits, or any other fringe benefits or benefit plans offered by Royale to its employees, and Royale will not be responsible for withholding or paying any income, payroll, Social Security, or other federal, state, or local taxes, making any insurance contributions, including for unemployment or disability, or obtaining workers' compensation insurance on Consultant’s behalf. Consultant shall be responsible for, and shall indemnify Royale against, all such taxes or contributions, including penalties and interest. Any persons employed or engaged by Consultant in connection with the performance of the Services shall be your employees or contractors and you shall be fully responsible for them and indemnify Royale against any claims made by or on behalf of any such employee or contractor.

 

6.     Indemnification. Consultant is an independent contractor and not an employee for Royale, which agrees to hold Consultant harmless and indemnify it for any and all claims, lawsuits, judgements, or obligations, including counsel fees, experts’ fees and costs for suit arising as a result of work performed pursuant to the Agreement, which are not caused by, nor arise from, any act of Consultant or its employees or representatives, in whole or in part. This Section does not minimize or restrict the contractual obligations of Royale to reimburse Consultant for expenses it incurs on behalf of Royale. The terms of this Section shall survive the termination of this Agreement.

 

7.     Miscellaneous.

 

(a)     Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF CALIFORNIA.

 

(b)     Entirety and Amendments. This Agreement embodies the entire agreement between the parties and supersedes all prior agreements and understandings relating to the subject matter hereof; provided, however, that this Agreement does not supersede or terminate the obligations and assignments of Consultant arising under any separate assignment and nondisclosure agreement (however styled) that may have been, or may be, entered into

 

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between the Royale and Consultant. This Agreement may be amended or modified only in writing.

 

(c)     Notices. Any notice or other communication hereunder must be in writing to be effective and shall be deemed to have been given when personally delivered to Consultant or the Royale or, if mailed, on the third day after it is enclosed in an envelope and sent certified mail/return receipt requested in the United States mail. Either party may from time to time change its address for notification purposes by giving the other party written notice of the new address and the date upon which it will become effective. The address for each party for notices hereunder is as set forth on the signature page.

 

(d)     Attorney's Fees. In the event that either party is required to obtain the services of an attorney in order to enforce any right or obligation hereunder, the prevailing party shall be entitled to recover reasonable attorney's fees and court costs from the other party.

 

(e)     Assignability; Binding Nature. This Agreement is binding upon the Royale and Consultant and their respective successors, heirs, and assigns. The rights and obligations of the Royale hereunder may be assigned by the Royale to any entity that succeeds to all or substantially all of the assets of the Royale through merger, consolidation, liquidation, acquisition of assets, or otherwise.

 

(f)     Headings. The headings of paragraphs contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement.

 

(g)     Severability. If, but only to the extent that, any provision of this Agreement is declared or found to be illegal, unenforceable, or void, so that both the Royale and Consultant would be relieved of all obligations arising under such provision, it is the agreement of the Royale and Consultant that this Agreement shall be deemed amended by modifying such provision to the extent necessary to make it legal and enforceable while preserving its intent. If such amendment is not possible, another provision that is legal and enforceable and achieves the same objective shall be substituted therefor. If the remainder of this Agreement is not affected by such declaration or finding and is capable of substantial performance by both the Royale and Consultant, then the remainder shall be enforced to the extent permitted by law.

 

(h)     Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be part of the same instrument.

 

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Executed as of the date first set forth above by:

 

Royale Energy, Inc.                                                Meeteetse LP, by Hot Springs Ranch

                                                                                 Corp., its General Partner

 

 

By:           /s/ Stephen M Hosmer                              /s/ Jeffrey R Kerns

Name:     Stephen M. Hosmer                                  Name: Jeffrey R Kerns

Title:       Chief Financial Officer                             Title: Vice President of  

                                                                                           Hot Springs Ranch Corp.

 

Notices: Royale Energy, Inc.                                     Notices: Meeteetse LP

1870 Cordell Court, Suite 210                                   PO Box 5885

El Cajon, CA 92020                                                  Santa Barbara, CA 93150

 

 

 

Page 6ex_126463.htm

 

Exhibit 10.11

 

Incentive Stock Option Award Agreement

 

This Incentive Stock Option Award Agreement (this “Award Agreement”) is made and entered into as of October 10, 2018, by and between Royale Energy, Inc., a Delaware corporation (the “Company”) and Stephen M. Hosmer (the “Participant”).

 

Grant Date: October 10, 2018

 

Exercise Price per Share: $0.31

 

Number of Option Shares: 250,000

 

1.     Grant of Option.

 

1.1     Grant; Type of Option. The Company grants to the Participant an option (the “Option”) to purchase the total number of shares of Common Stock of the Company equal to the number of Option Shares set forth above, at the Exercise Price per Share set forth above. The Option is granted pursuant to the terms of Royale Energy, Inc., 2018 Equity Incentive Plan (the “Plan”). The Option is intended to be an incentive stock option within the meaning of Section 422 of the Code, although the Company makes no representation or guarantee that the Option will qualify as an incentive stock option. To the extent that the aggregate Fair Market Value (determined on the Grant Date) of the shares of Common Stock with respect to which incentive stock options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and its Affiliates) exceeds $100,000, the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as non-qualified stock options.

 

1.2     Consideration; Subject to Plan. The grant of the Option is made in consideration of the services to be rendered by the Participant to the Company and is subject to the terms and conditions of the Plan. Capitalized terms used but not defined herein will have the meaning ascribed to them in the Plan.

 

2.       Exercise Period; Vesting.

 

2.1     Vesting Schedule. The Option will become vested and exercisable immediately in accordance with Section 6.7 of the Plan.

 

2.2     Expiration. The Option will expire ten years from the Grant Date set forth above, in accordance with Section 6.1 of the Plan.

 

3.       Termination of Continuous Service.

 

3.1     Termination for Cause and Voluntary Termination. If the Participant’s Continuous Service is terminated for cause, the unexercised portion of the Option shall terminate on the date of termination. In this Section, “Cause” means:

 

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(a)     the Participant's failure to perform his duties (other than any such failure resulting from incapacity due to physical or mental illness);

 

(b)     the Participant's failure to comply with any valid and legal directive of the person to whom the Participant then reports;

 

(c)     the Participant's engagement in dishonesty, illegal conduct or misconduct, which is, in each case, injurious to the Company or its affiliates;

 

(d)     the Participant's embezzlement, misappropriation or fraud, whether or not related to the Participant's employment with the Company;

 

(e)     the Participant's conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent) or a crime that constitutes a misdemeanor involving moral turpitude;

 

(f)     the Participant's violation of a material policy of the Company; or

 

(g)     the Participant's breach of any material obligation under this Agreement or any other written agreement between the Participant and the Company.

 

3.2     Termination without Cause. If the Participant’s Continuous Services is terminated other than for Cause, the Participant may exercise the Option, but only within such period of time ending on the earlier of: (a) the date 3 months following the Participant’s termination of Continuous Service or (b) the Expiration Date.

 

3.3     Termination due to Disability. If the Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise the Option, but only within such period of time ending on the earlier of: (a) the date 12 months following the Participant’s termination of Continuous Service or (b) the Expiration Date.

 

3.4     Termination due to Death. If the Participant’s Continuous Service terminates as a result of the Participant’s death, or if the Participant dies within three months of the termination of the Participant’s Continuous Service (or within 12 months of the termination of the Participant’s Continuous Service as a result of the Participant’s Disability), the Option may be exercised by the Participant’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance, or by the person designated to exercise the Option upon the Participant’s death, but in all of those three cases only within the time period ending on the earlier of: (a) the date 12 months following the Participant’s date of death or (b) the Expiration Date.

 

4.       Manner of Exercise.

 

4.1     Election to Exercise. To exercise the Option, 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 to the Company an executed stock option exercise agreement in such form as is approved by the Committee from time to time (the “Exercise Agreement”), which shall set forth, inter alia:

 

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(a)     the election to exercise the Option;

 

(b)     the number of shares of Common Stock being purchased;

 

(c)     any restrictions imposed on the shares; and

 

(d)     any representations, warranties and agreements regarding investment intent and access to information as may be required by the Company to comply with applicable securities laws.

 

If someone other than the Participant exercises the Option, then such person must submit documentation reasonably acceptable to the Company verifying that such person has the legal right to exercise the Option. 

 

4.2     Payment of Exercise Price. The entire Exercise Price of the Option shall be payable in full at the time of exercise to the extent permitted by applicable statutes and regulations, either:

 

(a)     in cash or by certified or bank check at the time the Option is exercised;

 

(b)     to the extent permitted under Regulation T of the Federal Reserve Board, by delivering a properly executed notice of exercise of the Option to the Company and a broker, with irrevocable instructions to the Company to deliver to such broker the stock certificates for the shares issued pursuant to such exercise and irrevocable instructions to such broker to deliver to the Company on or before the settlement date cash in an amount necessary to pay the aggregate Option Price for the shares being purchased, and, if requested by the Company, the amount of any federal, state, local or foreign withholding taxes;

 

(c)     by instructing the Administrator to withhold a number of shares being issued upon exercise of the Option having a Fair Market Value (defined in the Plan) on the date of exercise equal to the aggregate exercise price of the exercised Option

 

(d)     by any combination of the foregoing methods; or

 

(e)     in any other form of legal consideration that may be acceptable to the Company.

 

4.3     Issuance of Shares. Provided that the Exercise Agreement and payment are in form and substance satisfactory to the Company, the Company shall issue the shares of Common Stock registered in the name of the Participant, the Participant’s authorized assignee, or the Participant’s legal representative which shall be evidenced by stock certificates representing the shares with the appropriate legends affixed thereto, appropriate entry on the books of the Company or of a duly authorized transfer agent, or other appropriate means as determined by the Company.

 

5.     No Right to Continued Employment; No Rights as Stockholder. Neither the Plan nor this Award Agreement shall confer upon the Participant any right to be retained in any

 

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position, whether as an Employee or Director of the Company. Further, nothing in the Plan or this Award Agreement shall be construed to limit the discretion of the Company to terminate the Participant’s Continuous Service at any time, with or without cause. The Participant shall not have any rights as a stockholder with respect to any shares of Common Stock subject to the Option unless and until certificates representing the shares have been issued by the Company to the holder of such shares, or the shares have otherwise been recorded on the books of the Company or of a duly authorized transfer agent as owned by such holder.

 

6.     Transferability. The Option is not transferable by the Participant other than to a designated beneficiary upon the Participant’s death or by will or the laws of descent and distribution, and is exercisable during the Participant’s lifetime only by him or her. No assignment or transfer of the Option, or the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except to a designated beneficiary upon the Participant’s death or by will or the laws of descent or distribution) will vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the Option will terminate and become of no further effect.

 

7.     Adjustments. The shares of Common Stock subject to the Option may be adjusted or terminated in any manner as contemplated by Section 11 of the Plan.

 

8.     Tax Liability and Withholding. Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains the Participant’s responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting, exercise of the Option, or the subsequent sale of any shares acquired on exercise; and (b) does not commit to structure the Option to reduce or eliminate the Participant’s liability for Tax-Related Items.

 

9.     Qualification as an Incentive Stock Option. This Option is intended to qualify as an incentive stock option as defined in Section 422 of the Code to the extent permitted under Applicable Law. Accordingly, the Participant understands that in order to obtain the benefits of an incentive stock option, no sale or other disposition may be made of shares for which incentive stock option treatment is desired within one (1) year following the date of exercise of the Option or within two (2) years from the Grant Date. The Participant understands and agrees that the Company shall not be liable or responsible for any additional tax liability the Participant incurs if the Internal Revenue Service for any reason determines that this Option does not qualify as an incentive stock option within the meaning of the Code.

 

10.     Disqualifying Disposition. If the Participant disposes of the shares of Common Stock before the expiration of either two (2) years from the Grant Date or one (1) year from the date the shares are transferred to the Participant pursuant to the exercise of the Option (a “Disqualifying Disposition”), the Participant shall notify the Company in writing of the date and terms of such disposition within thirty (30) days after such disposition. The Participant also agrees to provide the Company with any information concerning any such disposition as the Company requires for tax purposes.

 

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11.     Repurchase on Termination for Cause or Voluntary Termination. In the event that Participant’s employment with the Company is terminated for Cause or voluntarily by Participant within one (1) year after grant of this Option, the Company shall have the option to repurchase any and all shares of Common Stock which may have been purchased upon exercise of the Option at any time within one (1) years from the date of such termination at the purchase price(s) paid for such equity interests by Optionee.

 

12.     Compliance with Law. The exercise of the Option and the issuance and transfer of shares of Common Stock shall be subject to compliance by the Company and the Participant with all applicable requirements of federal and state securities laws. No shares of Common Stock shall be issued pursuant to this Option unless and until any then applicable requirements of state or federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. The Participant understands that the Company is under no obligation to register the shares with the Securities and Exchange Commission, any state securities commission, or any stock exchange to effect such compliance.

 

13.     Notices. Any notice required to be delivered to the Company under this Award Agreement shall be in writing and addressed to the Secretary of the Company at the Company’s principal corporate offices. Any notice required to be delivered to the Participant under this Award Agreement shall be in writing and addressed to the Participant at the Participant’s address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.

 

14.     Governing Law. This Award Agreement will be construed and interpreted in accordance with the laws of the State of Delaware, without regard to conflict of law principles.

 

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

 

16.     Options Subject to Plan. This Award Agreement is subject to the Plan as approved by the Company’s stockholders. The terms and provisions of the Plan as it may be amended from time to time are incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

 

17.     Successors and Assigns. The Company may assign any of its rights under this Award Agreement. This Award Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Award Agreement will be binding upon the Participant and the Participant’s beneficiaries, executors, administrators and the persons to whom this Award Agreement may be transferred by will or the laws of descent or distribution.

 

18.     Severability. The invalidity or unenforceability of any provision of the Plan or this Award Agreement shall not affect the validity or enforceability of any other provision of the

 

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Plan or this Award Agreement, and each provision of the Plan and this Award Agreement shall be severable and enforceable to the extent permitted by law.

 

19.     Discretionary Nature of Plan and Awards. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of the Option in this Award Agreement does not create any contractual right or other right to receive any Options or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Participant’s employment with the Company.

 

20.     Amendment. The Committee has the right to amend, alter, suspend, discontinue, or cancel the Option, prospectively or retroactively; provided, that, no such amendment shall adversely affect the Participant’s material rights under this Award Agreement without the Participant’s consent.

 

21.     No Impact on Other Benefits. The value of the Participant’s Option is not part of his or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance, or similar employee benefit.

 

22.     Counterparts. This Award Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Award Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

 

23.     Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan and this Award Agreement. The Participant has read and understands the terms and provisions thereof, and accepts the Option subject to all of the terms and conditions of the Plan and this Award Agreement. The Participant acknowledges that adverse tax consequences may occur upon exercise of the Option or disposition of the underlying shares and that the Participant should consult a tax advisor before such exercise or disposition.

 

IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement as of the date first above written.

 

	
			ROYALE ENERGY, INC.

			 

			 

			/s/ Jonathan Gregory

				 	
			STEPHEN M. HOSMER

			 

			 

			/s/ Stephen M. Hosmer

			
	
			By:

				
			Jonathan Gregory

				 	 
	
			Title:

				
			Vice Chairman

				 	 
	 	 	 

 

 

 

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