CURRENT ASSETS

EX-10.10 2 d64975exv10w10.htm EX-10.10 exv10w10
Exhibit 10.10
APPROACH RESOURCES INC.
2007 STOCK INCENTIVE PLAN
RESTRICTED STOCK AWARD AGREEMENT
     THIS AGREEMENT, made and entered into as of the ___ day of                     , 20___, by and between Approach Resources Inc., a Delaware corporation (“Approach”), and                                         , an employee, outside director or other individual providing services to Approach or one of its Affiliates (“Participant”).
     WHEREAS, the Compensation Committee of Approach’s Board of Directors or such other committee designated by Approach’s Board of Directors (the “Committee”), acting under Approach’s 2007 Stock Incentive Plan (the “Plan”), has the authority to award restricted shares of Approach’s common stock, $0.01 par value per share (the “Common Stock”), to employees, outside directors or other individuals providing services to Approach or an Affiliate; and
     WHEREAS, pursuant to the Plan, the Committee has determined to make such an award to Participant on the terms and conditions and subject to the restrictions set forth in the Plan and this Agreement, and Participant desires to accept such award;
     NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
     1. Restricted Stock Award. On the terms and conditions and subject to the restrictions, including forfeiture, hereinafter set forth, Approach hereby awards to Participant, and Participant hereby accepts, a restricted stock award (the “Award”) of                      shares (the “Restricted Shares”) of Common Stock. The Award is made on the ___ day of                                         , 20___ (the “Grant Date”). A certificate representing the Restricted Shares shall be issued in the name of Participant (or, at the option of Approach, in the name of a nominee of Approach) as of the Grant Date and delivered to Participant on the Grant Date or as soon thereafter as practicable. Participant shall cause the certificate representing the Restricted Shares, upon receipt thereof by Participant, to be deposited, together with stock powers and any other instrument of transfer reasonably requested by Approach duly endorsed in blank, with Approach, to be held by Approach in escrow for Participant’s benefit until such time as the Restricted Shares represented by such certificate are either forfeited by Participant to Approach or the restrictions thereon terminate as set forth in this Agreement.
     2. Vesting and Forfeiture.
     (a) The Restricted Shares shall be subject to a restricted period (the “Restricted Period”) that shall commence on [the Grant Date/                    , 20___] and shall end on [the third anniversary of the Grant Date/                    , 20___]. During the Restricted Period, the Restricted Shares shall be subject to being forfeited by Participant to Approach as provided in this Agreement, and Participant may not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of any of the Restricted

 


 

Shares (the “Restrictions”), other than by will or pursuant to the applicable laws of descent and distribution, except that the Restrictions shall be removed as to:
     (i) 33-1/3% of such shares (if a fractional number, then the next lower whole number) on [the first anniversary of the Grant Date/                    , 20___], provided Participant is in the continuous service of Approach or an Affiliate until such date;
     (ii) an additional 33-1/3% of such shares (if a fractional number, then the next lower whole number) on [the second anniversary of the Grant Date/                                        , 20___], provided Participant is in the continuous service of Approach or an Affiliate until such date; and
     (iii) the remaining shares on [the third anniversary of the Grant Date/                                        , 20___], provided Participant is in the continuous service of Approach or an Affiliate until such date.
Following the removal of the Restrictions on any Restricted Shares, Approach shall deliver to Participant from escrow a certificate representing such shares of Common Stock and Participant shall be free to sell, transfer, pledge, exchange, hypothecate or otherwise dispose of such shares of Common Stock, subject to applicable securities laws and the policies of Approach then in effect.
     (b) Subject to paragraph (c) of this Section, upon termination of Participant’s employment or service with Approach or an Affiliate, (i) Participant shall have no rights whatsoever in and to any of the Restricted Shares as to which the Restrictions have not by that time been removed pursuant to paragraph (a) of this Section, (ii) all of the Restricted Shares as to which the Restrictions have not by that time been removed pursuant to paragraph (a) of this Section shall automatically revert to Approach at no cost and (iii) neither Participant nor any of his or her heirs, beneficiaries, executors, administrators or other personal representatives shall have any rights with respect thereto.
     (c) The Change of Control provisions in Article XIII of the Plan shall apply with respect to the Restricted Shares.
     3. Rights as Stockholder. Subject to the provisions of this Agreement, upon the issuance of a certificate or certificates representing the Restricted Shares to Participant, Participant shall become the record and beneficial owner thereof for all purposes and shall have all rights as a stockholder, including without limitation voting rights and the right to receive dividends and distributions (provided that any such dividend or distribution shall be paid no later than the 15th day of the third month of the calendar year following the calendar year in which the dividend or distribution is declared by Approach), with respect to the Restricted Shares. If and to the extent Approach shall effect a stock split, stock dividend or similar distribution with respect to the Common Stock, (i) the stock distributed pursuant thereto shall be held by Approach with respect to those Restricted Shares as to which the Restrictions have not yet been removed pursuant to Section 2; (ii) such additional stock shall enjoy the privileges and be subject to the

2


 

Restrictions applicable to the Restricted Shares; and (iii) Participant shall be entitled to sell, transfer, pledge, exchange, hypothecate or otherwise dispose of such additional stock when the Restrictions on the Restricted Shares to which the distribution relates have been removed pursuant to Section 2.
     4. Optional Issuance in Book-Entry Form. Notwithstanding the foregoing, at the option of Approach, any shares of Common Stock that under the terms of this Agreement are issuable in the form of a stock certificate may instead be issued in book-entry form.
     5. Withholding Taxes.
     (a) Participant may elect, within 30 days of the Grant Date and on notice to Approach and the Internal Revenue Service in accordance with Section 83(b) of the Internal Revenue Code of 1986, as amended, and the regulations and other guidance thereunder, to realize income for federal income tax purposes equal to the fair market value of the Restricted Shares on the Grant Date. In such event, Participant shall make arrangements satisfactory to Approach or the appropriate Affiliate to pay in the calendar year that includes the Grant Date any federal, state or local taxes required to be withheld with respect to such shares.
     (b) If no election is made by Participant pursuant to Section 5(a) hereof, then upon the termination of the Restrictions applicable hereunder to all or any portion of the Restricted Shares, Participant (or in the event of Participant’s death, the administrator or executor of Participant’s estate) will pay to Approach or the appropriate Affiliate, or make arrangements satisfactory to Approach or such Affiliate regarding payment of, any federal, state or local taxes of any kind required by law to be withheld with respect to the Restricted Shares with respect to which such Restrictions have terminated. Approach may allow the Participant to pay the amount of such taxes required by law to be withheld with respect to the Restricted Shares by (i) withholding shares of Common Stock from any issuance of Common Stock due as a result of the removal of the Restrictions on any Restricted Shares, or (ii) permitting the Participant to deliver to Approach previously acquired shares of Common Stock, in each case having an aggregate fair market value equal to the amount of such required withholding taxes.
     (c) Any provision of this Agreement to the contrary notwithstanding, if Participant does not satisfy his or her obligations under paragraphs (a) or (b) of this Section, Approach shall, to the extent permitted by law, have the right to deduct from any payments made under the Plan, regardless of the form of such payment, or from any other compensation payable to Participant, whether or not pursuant to this Agreement or the Plan and regardless of the form of payment, any federal, state or local taxes of any kind required by law to be withheld with respect to the Restricted Shares.
     6. Reclassification of Shares. In the event of any reorganization, recapitalization, stock split, stock dividend, merger, consolidation, combination of shares or other change affecting the Common Stock, the Committee shall make adjustments in accordance with the Plan. Any such adjustments made by the Committee shall be conclusive.

3


 

     7. Effect on Employment. Nothing contained in this Agreement shall confer upon Participant the right to continue in the employment of Approach or any Affiliate, or affect any right which Approach or any Affiliate may have to terminate the employment of Participant. This Agreement does not constitute evidence of any agreement or understanding, express or implied, that Approach or any Affiliate will retain Participant as an employee for any period of time or at any particular rate of compensation.
     8. Investment Representations.
     (a) The Shares are being received for Participant’s own account with the intent of holding them and without the intent of participating, directly or indirectly, in a distribution of such Shares and not with a view to, or for resale in connection with, any distribution of such Shares or any portion thereof.
     (b) A legend may be placed on any certificate(s) or other document(s) delivered to Participant or substitute therefore indicating restrictions on transferability of the Shares pursuant to this Agreement or referring to any stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, NASDAQ or any other stock exchange or association upon which the common stock of Approach is then listed or quoted, any applicable federal or state securities laws, and any applicable corporate law, and any transfer agent of Approach shall be instructed to require compliance therewith.
     9. Assignment. Approach may assign all or any portion of its rights and obligations under this Agreement. The Award, the Restricted Shares and the rights and obligations of Participant under this Agreement may not be sold, transferred, pledged, exchanged, hypothecated or otherwise disposed of by Participant other than by will or the applicable laws of descent and distribution.
     10. Binding Effect. This Agreement shall be binding upon and inure to the benefit of (i) Approach and its successors and assigns, and (ii) Participant and his or her heirs, devisees, executors, administrators and personal representatives.
     11. Notices. All notices between the parties hereto shall be in writing and given in the manner provided in Section 15.7 of the Plan. Notices to Participant shall be given to Participant’s address as contained in Approach’s records. Notices to Approach shall be addressed to the Corporate Secretary at the principal executive offices of Approach as set forth in Section 15.7 of the Plan.
     12. Governing Law; Exclusive Forum; Consent to Jurisdiction. This Agreement shall be governed by the laws of the State of Delaware except for its laws with respect to conflict of laws. The exclusive forum for any lawsuit arising from or related to this Agreement shall be a state or federal court in Tarrant County, Texas. This provision does not prevent Approach from removing to an appropriate federal court any action brought in state court. PARTICIPANT HEREBY CONSENTS TO, AND WAIVES ANY OBJECTIONS TO, REMOVAL TO

4


 

FEDERAL COURT BY APPROACH OF ANY ACTION BROUGHT AGAINST IT BY PARTICIPANT.
     IN WITNESS WHEREOF, Approach and Participant have executed this Agreement as of the date first written above.
                 
    APPROACH RESOURCES INC.    
 
               
 
      By:        
 
               
 
      Name:        
 
               
 
      Title:        
 
               
 
               
    PARTICIPANT    
 
               
             
        Participant Signature    
 
               
             
        Participant Printed Name    

5


 

STOCK POWER AND ASSIGNMENT
SEPARATE FROM CERTIFICATE
     FOR VALUE RECEIVED and pursuant to that certain Approach Resources Inc. 2007 Stock Incentive Plan and the Restricted Stock Award Agreement dated                     , 20___ (the “Agreement”), the undersigned Participant hereby sells, assigns and transfers unto                                         ,                      shares of Common Stock, $0.01 par value per share, of Approach Resources Inc., a Delaware corporation (“Approach”), standing in the undersigned’s name on the books of Approach and does hereby irrevocably constitute and appoint the Corporate Secretary of Approach as the undersigned’s attorney-in-fact, with full power of substitution, to transfer said stock on the books of Approach. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND ANY EXHIBITS THERETO.
Dated:                                         
         
 
  PARTICIPANT    
 
       
 
       
 
  Participant Signature    
 
       
 
       
 
  Participant Printed Name