Item 5.02 Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
(a)
Resignation of Mr. Frank Ingriselli and Ms. Elizabeth
Smith
On
and effective September 27, 2018, immediately following the Annual
Meeting (defined below), Mr. Frank C. Ingriselli and Ms. Elizabeth
P. Smith resigned as members of the Board of Directors of the
Company, to pursue other opportunities and not in connection with a
disagreement with the Company on any matter relating to the
Company’s operations, policies or practices. Mr. Ingriselli
served as the Chairman of the Board of Directors prior to his
resignation.
At
the time of their resignations, Mr. Ingriselli did not serve on any
committees of the Board of Directors and Ms. Smith served as the
Chairperson of the Compensation Committee.
(d)
Appointment of H. Douglas Evans as a member of the Board of
Directors
Following the resignations of Mr. Ingriselli and
Ms. Smith as discussed above, on September 27, 2018, the Board of
Directors, pursuant to the power provided to the Board of Directors
by the Company’s Bylaws, as amended, decreased the size of
the Board of Directors to four (4) members and appointed Mr. H.
Douglas Evans as a member of the Board of Directors to fill the one
(1) remaining vacancy on the Board of Directors, effective
September 27, 2018. The Board of Directors also affirmatively
determined that Mr. Evans was
“
independent
”
as defined in Section 803(A) of the NYSE American Company
Guide.
Mr. Evans previously invested $200,000 in the
Company’s August 1, 2018 sale of Convertible Promissory Notes
in an aggregate principal amount of $23.6 million (each, a
“
Convertible
Note
”), as disclosed in
greater detail in the Current Report on Form 8-K filed by the
Company with the Securities and Exchange Commission on August 1,
2018, which Convertible Note he continues to hold. The Convertible
Note and all accrued interest thereon is convertible into shares of
the Company’s common stock, from time to time at the option
of the holder, at a conversion price of $2.13 per share, as
described in greater detail in the Current Report on Form 8-K filed
by the Company with the Securities and Exchange Commission on
September 4, 2018.
Other
than the Convertible Note, Mr. Evans is not a party to any material
plan, contract or arrangement (whether or not written) with the
Company and there are no arrangements or understandings between Mr.
Evans and any other person pursuant to which he was selected to
serve as a director of the Company, nor is he a participant in any
related party transaction required to be reported pursuant to Item
404(a) of Regulation S-K.
There
are no family relationships between any director or executive
officer of the Company, including, but not limited to Mr.
Evans.
Mr. Evans was appointed as a member of the
Compensation Committee,
Audit
Committee and Nominating and Corporate Governance Committee (as
Chairman).
Biographical
information for Mr. Evans is provided below:
Mr. H. Douglas Evans, Age 70
Mr. Evans has more than 45 years of oil and gas
industry experience, 40 years of which have been spent in various
executive management positions with Gulf Interstate Engineering
Company (“
GIE
”), a privately-held Houston, Texas-based
firm specializing in the engineering of oil, gas and liquid
pipeline systems, where he currently serves as Chairman since 2017,
and previously as President and Chief Executive Officer
(2004-2017), President (2003-2017), Senior Vice President
(1994-2003), and in various other roles since he joined the company
in 1978. During Mr. Evans’ tenure as an executive at GIE, he
has successfully overseen the company’s organic growth from
$25 million in sales in 1996 to over $250 million in sales in
recent years, with GIE involved in almost every major onshore oil
and gas pipeline in the world over the last 20
years.
Mr.
Evans holds a B.Sc. Civil Engineering and Master of Business
Administration from Queen’s University at Kingston, Ontario,
and is a registered Professional Engineer in Ontario and Alberta,
Canada. Mr. Evans currently serves as a member of the Board of
Directors and Chairman of GIE (since 2017), a member of the Board
of Directors of Gulf Interstate Field Services, a GIE affiliate
engaged in providing oil and gas pipeline construction inspection
services (since 2003), the Board of Directors and Chairman of the
Strategy Committee for the International Pipe Line and Offshore
Contractors Association (IPLOCA) (since 2006), a member of the
Board of Houston, Texas-based Crossroads School, Inc., and a former
member of the Board of the Cystic Fibrosis Foundation – Texas
Gulf Coast Chapter.
Change In Board of Directors Committee Compositions
In connection with Mr.
Ingriselli’s resignation as a member of the
Board of Directors of the Company and as Chairman of the Board of
Directors, the Board of Directors, on September 27, 2018, appointed
Mr. John Scelfo as Chairman of the Board of
Directors.
Effective
September 27, 2018, the Board of Directors of the Company changed
the composition of the committees of the Board of Directors in
connection with the changes in members of the Board of Directors
effective on such date, and such committees of the Board of
Directors consist of the following members effective September 27,
2018:
Director
|
|
Audit
Committee
|
|
Compensation
Committee
|
|
Nominating and Corporate Governance Committee
|
|
Independent
|
Dr.
Simon Kukes
|
|
|
|
|
|
|
|
|
Ivar
Siem
|
|
|
|
|
|
|
|
|
John J.
Scelfo*
|
|
C
|
|
C
|
|
M
|
|
X
|
H.
Douglas Evans
|
|
M
|
|
M
|
|
C
|
|
X
|
C – Chairman of Committee.
M – Member.
* Chairman of the Board of Directors.
(e)
Stockholder
Approval of
an
Amendment to the PEDEVCO CORP. 2012 Equity Incentive
Plan
At the Annual Meeting of Stockholders of the
Company held on September 27, 2018 (the “
Annual
Meeting
”), the
stockholders of the Company approved an amendment to the
Company’s Amended and Restated 2012 Equity Incentive Plan
(the “
Plan
”)
to
increase by 3,000,000 (to 6,000,000), the number of
shares of common stock reserved for issuance under the
Plan
. The Company’s stockholders
approved the Plan in accordance with the voting results set forth
below under
Item
5.07
. The increase to the Plan
was originally approved by the Board of Directors of the Company on
August 10, 2018, subject to stockholder
approval.
The Plan was originally adopted in 2012. The
material terms of the Plan were described in the Company’s
Proxy Statement under the caption “
Proposal 2 –
Amendment to the PEDEVCO Corp. 2012 Equity Incentive
Plan
” filed with the SEC
on August 13, 2018. The Plan provides for awards of incentive stock
options, non-statutory stock options, rights to acquire restricted
stock, stock appreciation rights, or SARs, and performance units
and performance shares. Incentive stock options granted
under the Plan are intended to qualify as
“
incentive
stock options
” within the
meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the “
Code
”).
The above description of the Plan does not purport
to be complete, and is qualified in its entirety by reference to
the full text of the Plan, which is attached as
Exhibit 4.1
to the Company’s Registration
Statement on Form S-8 filed with the U.S. Securities and Exchange
Commission on September 27, 2018 and is incorporated by reference
into this
Item
5.02
.
(e)
Restricted
Stock and Option Awards
On
September 27, 2018, the Company granted 20,000 shares of restricted
Company common stock under the Plan to Mr. John Scelfo and Mr. H.
Douglas Evans (who was appointed to the Board of Directors on the
same date as discussed above), each non-employee directors, which
shares vest on July 12, 2019 and September 27, 2019, respectively,
in each case subject to the recipient of the shares being a member
of the Company’s Board of Directors on such vesting date, and
subject to the terms and conditions of a Restricted Shares Grant
Agreement entered into by and between the Company and each
recipient.
In
addition, on September 27, 2018, the Company granted options to
purchase 120,000 shares of common stock to Mr. Scelfo and options
to purchase 100,000 shares of common stock to Mr. Evans, which
options have an exercise price of $2.19 per share, expire in five
(5) years from the date of grant and vest on July 12, 2019 and
September 27, 2019, respectively, in each case subject to the
recipient of the shares being a member of the Company’s Board
of Directors on such vesting date, and subject to the terms and
conditions of a Stock Option Agreement entered into by and between
the Company and each recipient.
The
restricted stock and options were issued and granted in
consideration for Mr. Scelfo and Mr. Evans serving as independent
non-employee directors of the Company.
A copy
of the form of Restricted Shares Grant Agreement and form of Stock
Option Agreement for the awards granted on September 27, 2018 are
attached as
Exhibits
4.2 and 4.3
, respectively, to the Company’s
Registration Statement on Form S-8 filed with the U.S. Securities
and Exchange Commission on October 31, 2013 and are incorporated by
reference into this
Item
5.02
.
None of
the other members of the Board of Directors are receiving any
consideration for their services to the Board of Directors, and as
previously reported, Dr. Simon Kukes, a member of the Board of
Directors and the Company’s Chief Executive Officer, has
agreed to accept an annual salary of $1 for his services as an
officer of the Company.