RESOLUTE ENERGY CORPORATION
2009 PERFORMANCE INCENTIVE PLAN
1.1 The
purpose of this 2009 Performance Incentive Plan (this “
Plan ”) of Resolute Energy Corporation, a Delaware
corporation (the “ Corporation ”), is to promote
the success of the Corporation and to increase stockholder value by
providing an additional means through the grant of awards to
attract, motivate, retain and reward selected employees and other
eligible persons.
2.1 The
Administrator (as such term is defined in Section 3.1) may
grant awards under this Plan only to those persons that the
Administrator determines to be Eligible Persons. An “
Eligible Person ” is any person who is either:
(a) an officer (whether or not a director) or employee of the
Corporation or one of its Subsidiaries; (b) a director of the
Corporation or one of its Subsidiaries; or (c) an individual
consultant or advisor who renders or has rendered bona fide
services to the Corporation or one of its Subsidiaries and who is
selected to participate in this Plan by the Administrator;
provided, however, that a person who is otherwise an Eligible
Person under clause (c) above may participate in this Plan
only if such participation would not adversely affect either the
Corporation’s eligibility to use Form S-8 to register under
the Securities Act of 1933, as amended (the “ Securities
Act ”), the offering and sale of shares issuable under
this Plan by the Corporation or the Corporation’s compliance
with any other applicable laws. An Eligible Person who has been
granted an award (a “ participant ”) may, if
otherwise eligible, be granted additional awards if the
Administrator shall so determine. As used herein, “
Subsidiary ” means any corporation or other entity a
majority of whose outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Corporation; and
“ Board ” means the Board of Directors of the
Corporation.
3.1 The
Administrator . This Plan shall be administered by and all
awards under this Plan shall be authorized by the Administrator.
The “ Administrator ” means the Board or one or
more committees appointed by the Board or another committee (within
its delegated authority) to administer all or certain aspects of
this Plan. Any such committee shall be comprised solely of one or
more directors or such number of directors as may be required under
applicable law. A committee may delegate some or all of its
authority to another committee so constituted. The Board or a
committee comprised solely of directors may also delegate, to the
extent permitted by Section 157(c) of the Delaware General
Corporation Law and any other applicable law, to one or more
officers of the Corporation, its powers under this Plan (a) to
designate the officers and employees of the Corporation and its
Subsidiaries who will receive grants of awards under this Plan, and
(b) to determine the number of shares subject to, and the other
terms and conditions of, such awards. The Board may delegate
different levels of authority to different committees with
administrative and grant authority under this Plan. Unless
otherwise provided in the Bylaws of the
Corporation or
the applicable charter of any Administrator: (a) a majority of
the members of the acting Administrator shall constitute a quorum,
and (b) the vote of a majority of the members present assuming
the presence of a quorum or the unanimous written consent of the
members of the Administrator shall constitute action by the acting
Administrator.
With respect to
awards intended to satisfy the requirements for performance-based
compensation under Section 162(m) of the Internal Revenue Code of
1986, as amended (the “ Code ”), this Plan shall
be administered by a committee consisting solely of two or more
outside directors (as this requirement is applied under Section
162(m) of the Code); provided, however, that the failure to satisfy
such requirement shall not affect the validity of the action of any
committee otherwise duly authorized and acting in the matter. Award
grants, and transactions in or involving awards, intended to be
exempt under Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”), must be
duly and timely authorized by the Board or a committee consisting
solely of two or more non-employee directors (as this requirement
is applied under Rule 16b-3 promulgated under the Exchange
Act). To the extent required by any applicable listing agency, this
Plan shall be administered by a committee composed entirely of
independent directors (within the meaning of the applicable listing
agency). Awards granted to non-employee directors shall not be
subject to the discretion of any officer or employee of the
Corporation and shall be administered exclusively by a committee
consisting solely of independent directors.
3.2 Powers
of the Administrator . Subject to the express provisions of
this Plan, the Administrator is authorized and empowered to do all
things necessary or desirable in connection with the authorization
of awards and the administration of this Plan (in the case of a
committee or delegation to one or more officers, within the
authority delegated to that committee or person(s)), including,
without limitation, the authority to:
(a) determine
eligibility and, from among those persons determined to be
eligible, the particular Eligible Persons who will receive an award
under this Plan;
(b) grant awards
to Eligible Persons, determine the price at which securities will
be offered or awarded and the number of securities to be offered or
awarded to any of such persons, determine the other specific terms
and conditions of such awards consistent with the express limits of
this Plan, establish the installments (if any) in which such awards
shall become exercisable or shall vest (which may include, without
limitation, performance and/or time-based schedules), or determine
that no delayed exercisability or vesting is required, establish
any applicable performance targets, and establish the events of
termination or reversion of such awards;
(c) approve the
forms of award agreements (which need not be identical either as to
type of award or among participants);
(d) construe and
interpret this Plan and any agreements defining the rights and
obligations of the Corporation, its Subsidiaries, and participants
under this Plan, further define the terms used in this Plan, and
prescribe, amend and rescind rules and regulations relating to the
administration of this Plan or the awards granted under this
Plan;
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(e) cancel,
modify, or waive the Corporation’s rights with respect to, or
modify, discontinue, suspend, or terminate any or all outstanding
awards, subject to any required consent under
Section 8.6.5;
(f) accelerate or
extend the vesting or exercisability or extend the term of any or
all such outstanding awards (in the case of options or stock
appreciation rights, within the maximum ten-year term of such
awards) in such circumstances as the Administrator may deem
appropriate (including, without limitation, in connection with a
termination of employment or services or other events of a personal
nature) subject to any required consent under
Section 8.6.5;
(g) adjust the
number of shares of Common Stock subject to any award, adjust the
price of any or all outstanding awards or otherwise change
previously imposed terms and conditions, in such circumstances as
the Administrator may deem appropriate, in each case subject to
Sections 4 and 8.6 and the applicable requirements of Code
Section 162(m) and Treasury Regulations thereunder with respect to
awards that are intended to satisfy the requirements for
performance-based compensation under Section 162(m), and
provided that in no case (except due to an adjustment contemplated
by Section 7 or any repricing that may be approved by
stockholders) shall such an adjustment constitute a repricing (by
amendment, cancellation and regrant, exchange or other means) of
the per share exercise or base price of any option or stock
appreciation right, and further provided that any adjustment or
change in terms made pursuant to this Section 3.2(g) shall be
made in a manner that, in the good faith determination of the
Administrator will not likely result in the imposition of
additional taxes or interest under Section 409A of the
Code;
(h) determine the
date of grant of an award, which may be a designated date after but
not before the date of the Administrator’s action (unless
otherwise designated by the Administrator, the date of grant of an
award shall be the date upon which the Administrator took the
action granting an award);
(i) determine
whether, and the extent to which, adjustments are required pursuant
to Section 7 hereof and authorize the termination, conversion,
substitution or succession of awards upon the occurrence of an
event of the type described in Section 7;
(j) acquire or
settle (subject to Sections 7 and 8.6) rights under awards in
cash, stock of equivalent value, or other consideration;
and
(k) determine the
Fair Market Value (as defined in Section 5.6) of the Common
Stock or awards under this Plan from time to time and/or the manner
in which such value will be determined.
3.3 Binding
Determinations . Any action taken by, or inaction of, the
Corporation, any Subsidiary, or the Administrator relating or
pursuant to this Plan and within its authority hereunder or under
applicable law shall be within the absolute discretion of that
entity or body and shall be conclusive and binding upon all
persons. Neither the Board nor any Board committee, nor any member
thereof or person acting at the direction thereof, shall be liable
for any act, omission, interpretation, construction or
determination made in good faith in connection with this Plan
(or
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any award made
under this Plan), and all such persons shall be entitled to
indemnification and reimbursement by the Corporation in respect of
any claim, loss, damage or expense (including, without limitation,
attorneys’ fees) arising or resulting therefrom to the
fullest extent permitted by law and/or under any directors and
officers liability insurance coverage that may be in effect from
time to time.
3.4
Reliance on Experts . In making any determination or in
taking or not taking any action under this Plan, the Board or a
committee, as the case may be, may obtain and may rely upon the
advice of experts, including employees and professional advisors to
the Corporation. No director, officer or agent of the Corporation
or any of its Subsidiaries shall be liable for any such action or
determination taken or made or omitted in good faith.
3.5
Delegation . The Administrator may delegate ministerial,
non-discretionary functions to individuals who are officers or
employees of the Corporation or any of its Subsidiaries or to third
parties.
4. SHARES OF
COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMITS
4.1 Shares
Available . Subject to the provisions of Section 7.1,
the capital stock that may be delivered under this Plan shall be
shares of the Corporation’s authorized but unissued Common
Stock and any shares of its Common Stock held as treasury shares.
For purposes of this Plan, “ Common Stock ”
shall mean the common stock of the Corporation and such other
securities or property as may become the subject of awards under
this Plan, or may become subject to such awards, pursuant to an
adjustment made under Section 7.1.
4.2 Share
Limit . The maximum number of shares of Common Stock that
may be delivered pursuant to awards granted to Eligible Persons
under this Plan is equal to 5% of the shares of Common Stock
outstanding at closing of the transactions contemplated by the
Acquisition Agreement but not to exceed 2,760,000 shares of Common
Stock (the “ Share Limit ”).
The foregoing
numerical limit is subject to adjustment as contemplated by
Section 4.3, Section 7.1, and Section 8.10. For purposes
of Section 4.2, “Acquisition Agreement” means that
certain Purchase and IPO Reorganization Agreement dated
August 2, 2009, by and among the Hicks Acquisition Company I,
Inc., the Company, Resolute Subsidiary Corporation, Resolute Aneth,
LLC, Resolute Holdings, LLC, Resolute Holdings Sub, LLC, and
HH-HACI, L.P.
4.3 Awards
Settled in Cash, Reissue of Awards and Shares . To the
extent that an award is settled in cash or a form other than shares
of Common Stock, the shares that would have been delivered had
there been no such cash or other settlement shall not be counted
against the shares available for issuance under this Plan. Shares
that are subject to or underlie awards which expire or for any
reason are cancelled or terminated, are forfeited, fail to vest, or
for any other reason are not paid or delivered under this Plan
shall again be available for subsequent awards under this Plan. The
foregoing adjustments to the share limit of this Plan are subject
to any applicable limitations under Section 162(m) of the Code with
respect to awards intended as performance-based compensation
thereunder.
4.4
Reservation of Shares; No Fractional Shares . The
Corporation shall at all times reserve a number of shares of Common
Stock sufficient to cover the Corporation’s obligations
and
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contingent
obligations to deliver shares with respect to awards then
outstanding under this Plan (exclusive of any dividend equivalent
obligations to the extent the Corporation has the right to settle
such rights in cash). No fractional shares shall be delivered under
this Plan. The Administrator may pay cash in lieu of any fractional
shares in settlements of awards under this Plan.
5.1 Type
and Form of Awards . The Administrator shall determine the
type or types of award(s) to be made to each selected Eligible
Person. Awards may be granted singly, in combination or in tandem.
Awards also may be made in combination or in tandem with, in
replacement of, as alternatives to, or as the payment form for
grants or rights under any other employee or compensation plan of
the Corporation or one of its Subsidiaries. The types of awards
that may be granted under this Plan are:
5.1.1 Stock
Options . A stock option is the grant of a right to
purchase a specified number of shares of Common Stock during a
specified period as determined by the Administrator. An option may
be intended as an incentive stock option within the meaning of
Section 422 of the Code (an “ ISO ”) or a
nonqualified stock option (an option not intended to be an ISO).
The award agreement for an option will indicate if the option is
intended as an ISO; otherwise it will be deemed to be a
nonqualified stock option. The maximum term of each option (ISO or
nonqualified) shall be ten (10) years. The per share exercise
price for each option shall be not less than 100% of the Fair
Market Value of a share of Common Stock on the date of grant of the
option. When an option is exercised, the exercise price for the
shares to be purchased shall be paid in full in cash or such other
method permitted by the Administrator consistent with
Section 5.5.
5.1.2
Additional Rules Applicable to ISOs . To the extent
that the aggregate Fair Market Value (determined at the time of
grant of the applicable option) of stock with respect to which ISOs
first become exercisable by a participant in any calendar year
exceeds $100,000, taking into account both Common Stock subject to
ISOs under this Plan and stock subject to ISOs under all other
plans of the Corporation or one of its Subsidiaries (or any parent
or predecessor corporation to the extent required by and within the
meaning of Section 422 of the Code and the regulations
promulgated thereunder), such options shall be treated as
nonqualified stock options. In reducing the number of options
treated as ISOs to meet the $100,000 limit, the most recently
granted options shall be reduced first. To the extent a reduction
of simultaneously granted options is necessary to meet the $100,000
limit, the Administrator may, in the manner and to the extent
permitted by law, designate which shares of Common Stock are to be
treated as shares acquired pursuant to the exercise of an ISO. ISOs
may only be granted to employees of the Corporation or one of its
subsidiaries (for this purpose, the term “subsidiary”
is used as defined in Section 424(f) of the Code, which generally
requires an unbroken chain of ownership of at least 50% of the
total combined voting power of all classes of stock of each
subsidiary in the chain beginning with the Corporation and ending
with the subsidiary in question). There shall be imposed in any
award agreement relating to ISOs such other terms and conditions as
from time to time are required in order that the option be an
“incentive stock option” as that term is defined in
Section 422 of the Code. No ISO may be granted to any person
who, at the
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time the option
is granted, owns (or is deemed to own under Section 424(d) of the
Code) shares of outstanding Common Stock possessing more than 10%
of the total combined voting power of all classes of stock of the
Corporation, unless the exercise price of such option is at least
110% of the Fair Market Value of the stock subject to the option
and such option by its terms is not exercisable after the
expiration of five years from the date such option is
granted.
5.1.3 Stock
Appreciation Rights . A stock appreciation right or “
SAR ” is a right to receive a payment, in cash and/or
Common Stock, equal to the excess of the Fair Market Value of a
specified number of shares of Common Stock on the date the SAR is
exercised over the Fair Market Value of a share of Common Stock on
the date the SAR was granted (the “ base price
”) as set forth in the applicable award agreement. The
maximum term of a SAR shall be ten (10) years.
(a)
Restrictions . Restricted stock is Common Stock subject to
such restrictions on transferability, risk of forfeiture and other
restrictions, if any, as the Administrator may impose, which
restrictions may lapse separately or in combination at such times,
under such circumstances (including based on achievement of
performance goals and/or future service requirements), in such
installments or otherwise, as the Administrator may determine at
the date of grant or thereafter. Except to the extent restricted
under the terms of this Plan and the applicable award agreement
relating to the restricted stock, a participant granted restricted
stock shall have all of the rights of a stockholder, including the
right to vote the restricted stock and the right to receive
dividends thereon (subject to any mandatory reinvestment or other
requirement imposed by the Administrator).
(b)
Certificates for Stock . Restricted stock granted under this
Plan may be evidenced in such manner as the Administrator shall
determine. If certificates representing restricted stock are
registered in the name of the participant, the Administrator may
require that such certificates bear an appropriate legend referring
to the terms, conditions and restrictions applicable to such
restricted stock, that the Corporation retain physical possession
of the certificates, and that the participant deliver a stock power
to the Corporation, endorsed in blank, relating to the restricted
stock.
(c) Dividends
and Splits . As a condition to the grant of an award of
restricted stock, the Administrator may require or permit a
participant to elect that any cash dividends paid on a share of
restricted stock be automatically reinvested in additional shares
of restricted stock or applied to the purchase of additional awards
under this Plan. Unless otherwise determined by the Administrator,
stock distributed in connection with a stock split or stock
dividend, and other property distributed as a dividend, shall be
subject to restrictions and a risk of forfeiture to the same extent
as the restricted stock with respect to which such stock or other
property has been distributed.
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5.1.5
Restricted Stock Units .
(a) Grant of
Restricted Stock Units . A restricted stock unit, or “
RSU ”, represents the right to receive from the
Corporation on the respective scheduled vesting or payment date for
such RSU, one share of Common Stock. An award of RSUs may be
subject to the attainment of specified performance goals or
targets, forfeitability provisions and such other terms and
conditions as the Administrator may determine, subject to the
provisions of this Plan. At the time an award of RSUs is made, the
Administrator shall establish a period of time during which the
restricted stock units shall vest.
(b) Dividend
Equivalent Accounts . If (and only if) required by the
applicable award agreement, prior to the expiration of the
applicable vesting period of an RSU, the Corporation shall pay
dividend equivalent rights with respect to RSUs, in which case the
Corporation shall establish an account for the participant and
reflect in that account any securities, cash or other property
comprising any dividend or property distribution with respect to
the share of Common Stock underlying each RSU. Each amount or other
property credited to any such account shall be subject to the same
vesting conditions as the RSU to which it relates. The participant
shall have be paid the amounts or other property credited to such
account upon vesting of the RSU.
(c) Rights as a
Stockholder . Subject to the restrictions imposed under the
terms and conditions of this Plan and the applicable award
agreement, each participant receiving RSUs shall have no rights as
a stockholder with respect to such RSUs until such time as shares
of Common Stock are issued to the participant. Except as otherwise
provided in the applicable award agreement, Common Stock issuable
under an RSU shall be treated as issued on the first date that the
holder of the RSU is no longer subject to a substantial risk of
forfeiture as determined for purposes of Section 409A of the
Code, and the holder shall be the owner of such Common Stock on
such date. An award agreement may provide that issuance of Common
Stock under an RSU may be deferred beyond the first date that the
RSU is no longer subject to a substantial risk of forfeiture,
provided that such deferral is structured in a manner that is
intended to comply with the requirements of Section 409A of the
Code.
5.1.6 Cash
Awards . The Administrator may, from time to time, subject
to the provisions of the Plan and such other terms and conditions
as it may determine, grant cash bonuses (including without
limitation, discretionary awards, awards based on objective or
subjective performance criteria, awards subject to other vesting
criteria or awards granted consistent with Section 5.2 below).
Cash awards shall be awarded in such amount and at such times
during the term of the Plan as the Administrator shall
determine.
5.1.7 Other
Awards. The other types of awards that may be granted under
this Plan include: (a) stock bonuses, performance stock,
phantom stock, dividend equivalents, or similar rights to purchase
or acquire shares, whether at a fixed or variable price or ratio
related to the Common Stock (subject to the requirements of
Section 5.1.1), upon the
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passage of
time, the occurrence of one or more events, or the satisfaction of
performance criteria or other conditions, or any combination
thereof; or (b) any similar securities with a value derived
from the value of or related to the Common Stock and/or returns
thereon.
5.2
Section 162(m) Performance-Based Awards . Without
limiting the generality of the foregoing, any of the types of
awards listed in Sections 5.1.4 through 5.1.7 above may be,
and options and SARs granted with an exercise or base price not
less than the Fair Market Value of a share of Common Stock at the
date of grant (“ Qualifying Options ” and
“ Qualifying SARs ,” respectively) typically
will be, granted as awards intended to satisfy the requirements for
“performance-based compensation” within the meaning of
Section 162(m) of the Code (“ Performance-Based Awards
”). The grant, vesting, exercisability or payment of
Performance-Based Awards may depend (or, in the case of Qualifying
Options or Qualifying SARs, may also depend) on the degree of
achievement of one or more performance goals relative to a
pre-established targeted level or levels using the Business
Criteria provided for below for the Corporation on a consolidated
basis or for one or more of the Corporation’s subsidiaries,
segments, divisions or business units, or any combination of the
foregoing. Such criteria may be evaluated on an absolute basis or
relative to prior periods, industry peers, or stock market indices.
Any Qualifying Option or Qualifying SAR shall be subject to the
requirements of Section 5.2.1 and 5.2.3 in order for such
award to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code. Any other
Performance-Based Award shall be subject to all of the following
provisions of this Section 5.2.
5.2.1
Class; Administrator . The eligible class of persons for
Performance-Based Awards under this Section 5.2 shall be
officers and employees of the Corporation or one of its
Subsidiaries. The Administrator approving Performance-Based Awards
or making any certification required pursuant to Section 5.2.4
must be constituted as provided in Section 3.1 for awards that are
intended as performance-based compensation under Section 162(m) of
the Code.
5.2.2
Performance Goals . The specific performance goals for
Performance-Based Awards (other than Qualifying Options and
Qualifying SARs) shall be, on an absolute or relative basis,
established based on such business criteria as selected by the
Administrator in its sole discretion (“ Business
Criteria ”), including the following: earnings per share,
cash flow (which means cash and cash equivalents derived from
either net cash flow from operations or net cash flow from
operations, financing and investing activities), total stockholder
return, gross revenue, revenue growth, operating income (before or
after taxes), net earnings (before or after interest, taxes,
depreciation and/or amortization), return on equity, capital
employed, or on assets or on net investment, cost containment or
reduction, operating margin, debt reduction, finding and
development costs, production growth or production growth per
share, reserve replacement or reserves per share growth or any
combination thereof. These terms are used as applied under
generally accepted accounting principles or in the financial
reporting of the Corporation or of its Subsidiaries. To qualify
awards as performance-based under Section 162(m), the
applicable Business Criterion (or Business Criteria, as the case
may be) and specific performance goal or goals (“
targets ”) must be established and approved by the
Administrator during the first 90 days of the performance
period (and, in the case of performance periods of less than one
year, in no event after 25% or more of the performance period has
elapsed) and while performance
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relating to
such target(s) remains substantially uncertain within the meaning
of Section 162(m) of the Code. Performance targets shall be
adjusted to mitigate the unbudgeted impact of material, unusual or
nonrecurring gains and losses, accounting changes or other
extraordinary events not foreseen at the time the targets were set
unless the Administrator provides otherwise at the time of
establishing the targets; provided that the Administrator may not
make any adjustment to the extent it would adversely affect the
qualification of any compensation payable under such performance
targets as “performance-based compensation” under
Section 162(m). The applicable performance measurement period
may not be less than 3 months nor more than
10 years.
5.2.3 Form
of Payment . Grants or awards under this Section 5.2
may be paid in cash or shares of Common Stock or any combination
thereof.
5.2.4
Certification of Payment . Before any Performance-Based
Award under this Section 5.2 (other than Qualifying Options and
Qualifying SARs) is paid and to the extent required to qualify the
award as performance-based compensation within the meaning of
Section 162(m) of the Code, the Administrator must certify in
writing that the performance target(s) and any other material terms
of the Performance-Based Award were in fact timely
satisfied.
5.2.5
Reservation of Discretion . The Administrator will have
the discretion to determine the restrictions or other limitations
of the individual awards granted under this Section 5.2
including the authority to reduce awards, payouts or vesting or to
pay no awards, in its sole discretion, if the Administrator
preserves such authority at the time of grant by language to this
effect in its authorizing resolutions or otherwise.
5.2.6
Expiration of Grant Authority . As required pursuant to
Section 162(m) of the Code and the regulations promulgated
thereunder, the Administrator’s authority to grant new awards
that are intended to qualify as performance-based compensation
within the meaning of Section 162(m) of the Code (other than
Qualifying Options and Qualifying SARs) shall terminate upon the
first meeting of the Corporation’s stockholders that occurs
in the fifth year following the year in which the
Corporation’s st
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