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RESTRICTED STOCK
AGREEMENT
THIS RESTRICTED STOCK
AGREEMENT ("Agreement") is dated the 6 th
day of June, 2008, but effective as of April 1, 2007, by and
between BASIC EARTH SCIENCE
SYSTEMS, INC . (the "Company"), a Delaware
corporation, and _____________
(the "Board Member").
In consideration of the
mutual covenants hereinafter set forth and other good and
valuable consideration, the parties agree as
follows:
1.
Purpose.
The purpose of this Agreement is to partially
compensate the Board Member for his service on the Company's
Board of Directors and to give him the incentive to be an
active and key participant in the growth of the Company, and
among other things, to provide guidance, strategies,
introductions and decisions that steer the Company in the
best interest of the shareholders by providing him with the
opportunity to own common stock of the
Company. This Agreement is in conformance with the
current director compensation plan refined through a series
of Board Meetings and documented in the Board meeting minutes
of March 8, 2008 through April 12, 2008.
2.
Stock
Ownership. In making this grant, the Board
expects the Board Member, within three years of the date he
becomes a member of the Board of Directors, to own an amount
of common stock equal to one year of his average total board
compensation. Stock received from this grant may
be used to meet this requirement
3.
Restricted
Stock Grant. Subject to the terms and
conditions of this Agreement including, without limitation,
the provisions of Paragraph 4, the Company hereby grants to
the Board Member 22,713 restricted
shares (the "Shares") of the Company's common
stock. Stock certificates evidencing the Shares
will contain a restrictive legend conspicuously noted on the
face thereof which shall state as follows:
This certificate and the shares of stock represented hereby shall
not vest until April 1, _______. In addition, this
certificate and the shares of stock represented hereby are subject
to the provisions of a Restricted Stock Agreement dated June 6,
2008 whereby vesting of ownership of the shares evidenced by this
certificate are set forth and a corresponding risk of forfeiture is
set forth. A copy of said Restricted Stock Agreement is on file at
the registered office of the Company where it may be inspected with
proper authorization.
In addition to the
foregoing, the certificate evidencing the Shares shall
contain an investment restrictive legend conspicuously noted
on the face thereof which identifies that the Shares are
unregistered and may not be transferred except upon an
effective registration statement or in compliance
with the requirements of Rule144 as promulgated under the
Securities Act of 1933, as amended.
4.
Vesting
and Risk of Forfeiture. The Board Member
is expected to remain as a member of the Company’s
Board of Directors and carry out, to the best of his
abilities, the duties of this position along with any
committee chairmanship and/or committee member assignments.
If the
Board
Member's participation as a member of the Board of Directors
ceases or is terminated for any reason prior to the date the
Shares are fully vested in accordance with this Paragraph, the
unvested portion of the Shares shall be automatically
forfeited and reassigned to the Company. The Board Member
shall vest in the Shares as set forth in the following table
if the Board Member has continuously remained as a member of
the Board of Directors from the effective date of this
Agreement through the respective date(s) set forth in the
table:
April 1,
2008 7,571
shares shall be vested (33.333%)
April 1,
2009 7,571
shares shall be vested (33.333%)
April 1,
2010 7,571
shares shall be vested (33.333%)
In addition, the Shares
shall be fully vested in the Board Member upon (i) the
closing of any merger, combination, consolidation or similar
business transaction involving the Company in which the
holders of common stock of the Company immediately prior to
such transaction are not the holders of a majority of the
ordinary voting securities of the surviving corporation in
such transaction; (ii) the closing of any sale by the Company
of all or substantially all of its assets to an acquiring
corporation in which the holders of the common stock of the
Company immediately prior to such closing are not the holders
of a majority of the ordinary voting securities of the
acquiring entity; or (iii) the closing of any sale by the
holders of the common stock of the Company to someone other
than a current holder of common stock of
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