0001111741falseNONE00011117412024-06-032024-06-03
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Date of Report: June 7, 2024 Date of earliest event reported: June 3, 2024 |
DYNARESOURCE, INC.
(Exact name of Registrant as Specified in Its Charter)
|
|
|
|
|
Delaware |
000-30371 |
94-1589426 |
(State or Other Jurisdiction
of Incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.) |
|
|
|
|
|
The Urban Towers 222 W. Las Colinas Blvd. Suite 1910 - North Tower |
|
Irving, Texas |
|
75039 |
(Address of Principal Executive Offices) |
|
(Zip Code) |
|
Registrant’s Telephone Number, Including Area Code: (972) 869-9400 |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
|
|
|
|
|
Title of each class
|
|
Trading
Symbol(s) |
|
Name of each exchange on which registered
|
N/A |
|
N/A |
|
N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 8.01
Item 1.01. Entry into a Material Definitive Agreement.
On June 3, 2024, the Company entered into a Memorandum of Understanding (the “MOU”) with Ocean Partners Holdings Limited (“Ocean Partners”), a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference. The material terms of the MOU, are as follows, with such summary qualified in its entirety by reference to the full text of the MOU:
•Ocean Partners will provide the Company a temporary additional credit line (the “TACL”) in the amount of Four Million Dollars ($4,000,000) payable November 30, 2024, with interest accruing at the same rate as the Company’s outstanding Revolving Credit Line (“RCL”) with Ocean Partners.
•The TACL may not be redrawn once repaid. The RCL may be redrawn when paid in full. Assuming full repayment of the TACL and RCL, the maximum principal amount of the RCL will be increased to Twelve Million Five Hundred Thousand Dollars ($12,500,000) after November 30, 2024. The Advance Credit Line previously available to the Company will no longer be available.
•The TACL proceeds will be used, in part, to pay installments due under the RCL in the aggregate amount of One Million Four Hundred Sixty-Two Thousand Five Hundred Dollars ($1,462,500), with the remainder to be used as approved by the Company’s Board of Directors.
•The offtake contract pursuant to which an affiliate of Ocean Partners purchases 100% of the Company’s ore production (the “Offtake Contract”) is extended until December 31, 2028 with automatic annual extensions until either party provides notice of non-renewal at least 365 days prior to the date of termination.
•If there is a change of control of the Company prior to December 31, 2028 or if, following such change of control, the Company is unable to meet the notice requirements for termination of the Offtake Contract, the Company will pay an early termination fee of Two Million Dollars ($2,000,000) to Ocean Partners.
•The Company will have a put option (the “Put Option”) to require Ocean Partners to purchase shares of Common Stock of the Company for a purchase price expected to be approximately $1.62 per share. The Company may exercise the Put Option by written notice to Ocean Partners given between November 1 and 30, 2024. If the Company exercises the Put Option for more than Four Million Dollars ($4,000,000), the maximum principal amount of the RCL available will be reduced on a dollar-for-dollar basis by such excess.
•The Company will grant to Ocean Partners a security interest in its Mexican IVA tax claims to secure the amounts outstanding under the RCL and TACL.
•Ocean Partners will offer the Company a margin-free hedging facility to forward price payable gold ounces using market-rate features or options of up to 10,000 payable ounces of gold to be sold in concentrate form in no longer than six months’ duration and to be no more than 80% of the estimated payable gold sales during such period. Any pricings completed shall be subject to a 1/8 of 1% commission payable to Ocean Partners.
In connection with the MOU and the various stock awards and issuances discussed in this Form 8-K, Golden Post Rail, LLC (“GP”) has agreed to waive its antidilution rights and to purchase one million five hundred fifty-two thousand seven hundred ninety-five (1,552,795) shares of Common Stock of the Company (the “GP Shares”) for a purchase price of Two Million Five Hundred Thousand Dollars ($2,500,000). The GP Shares will be issued at the time that the definitive agreement contemplated in the MOU is executed.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
See the discussion of the MOU and TACL in Item 1.01.
Item 3.02 Unregistered Sales of Equity Securities.
As described in Items 1.01 and 5.02, the Company has agreed to issue the GP Shares to GP and certain shares and options to Rohan Hazelton and K.D. Diepholz (the “Compensatory Shares”), which would aggregate (assuming full vesting of the Compensatory Shares) more than five percent (5%) of the total outstanding shares of the Company as of the date of this Form 8-K. The date of sale, title and amount of securities sold, consideration, and terms of exercise (where applicable) for the GP Shares and the Compensatory Shares are as stated in Items 1.01 and 5.02, respectively. The GP Shares are being issued under the exemption from registration found in Section 4(a)(2) of the Securities Act of 1933 (the “Securities Act”). The Compensatory Shares are being issued under the exemption from registration found in Rule 701 promulgated under the Securities Act.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On June 3, 2024, the Company’s Board of Directors approved the following changes to the Company’s officers and Board:
•Mr. Rene Mladosich resigned his position as a director of the Company.
•Mr. Koy D. Diepholz resigned his position as President, Chief Executive Officer, and interim Chief Financial Officer of the Company.
•Mr. Diepholz was appointed to serve as the non-executive Chairman of the Board of Directors.
•Mr. Rohan Hazelton, age 50, was appointed to serve as a director, filling the vacancy arising from Mr. Mladosich’s resignation, and as the Company’s new President, Chief Executive Officer, and interim Chief Financial Officer.
•Mr. Rene Mladosich will remain as an employee of the Company in the role of General Manager at San Jose de Gracía.
Mr. Hazelton has over 20 years of leadership experience in the mining industry, with financing and operational expertise, and experience building and expanding mines and leading high-performance teams which are the foundations for world-class companies. Mr. Hazelton has significant operational experience in Mexico. Prior to joining the Company, Mr. Hazelton was Chief Executive Officer of NorZinc Ltd, a zinc-lead-silver developer, Chief Financial Officer of both Cerrado Gold (TSXV: CERT) and Ascendant Resources (TSX: ASND), and co-founded KORE Mining (TSXV: KORE), serving as KORE’s CEO. Prior to that, he worked at Goldcorp, and its predecessor Wheaton River Minerals, as one of its earliest employees and held roles of increasing leadership and responsibility throughout the organization including CFO Goldcorp Mexico and VP Strategy.
Mr. Hazelton has served on the Board of Directors of NorZinc, Primero Mining, Terrane Metals and Gryphon Gold as well as several non-profits. He holds the Chartered Professional Accountant designation and graduated from Harvard University with Honors, with a Bachelor of Arts in Applied Math and Economics.
Mr. Hazelton has entered into an Employment Agreement with the Company (the “Employment Agreement”), a copy of which is attached hereto as Exhibit 10.2 and incorporated herein by reference. The material terms of the Employment Agreement, are as follows, with such summary qualified in its entirety by reference to the full text of the Employment Agreement:
•Base salary: $225,000 per year plus 10% in lieu of ordinary executive benefits while Mr. Hazelton works primarily from his Canadian office.
•Annual discretionary bonus: up to 50% of the base salary, to be paid entirely in deferred stock units (“DSUs”) issued under the Company’s 2024 Amended and Restated Equity Incentive Plan (the “Plan”).
oOption to purchase up to 750,000 shares of Common Stock of the Company at an exercise price of $1.75 per share, with such shares vesting one-third per year on the first three anniversaries of the grant date.
o500,000 DSUs issued under the Plan and payable in Common Stock of the Company upon achievement of performance targets to be established within 90 days following the grant date.
o500,000 restricted stock units issued under the Plan and payable in Common Stock of the Company on a three-year vesting schedule, with one-third of the shares vesting on each of the first three anniversaries of the grant date.
•Severance: Upon a termination by the Company without Cause, by Mr. Hazelton for Good Reason, within 12 months following a Change in Control, or upon Mr. Hazelton’s death or Disability (as the foregoing capitalized terms are defined in the Employment Agreement), Mr. Hazelton will be entitled to a lump sum severance payment equal to 24 months of his base salary plus his maximum annual, discretionary bonus.
Mr. Diepholz has entered into a Revised and Amended Agreement Concerning the Business Relationship dated as of June 3, 2024 (the “Chairman Agreement”), a copy of which is attached hereto as Exhibit 10.3 and incorporated herein by reference. The material terms of the Chairman Agreement, are as follows, with such summary qualified in its entirety by reference to the full text of the Chairman Agreement:
•Mr. Diepholz ceased to serve as the Company’s President, CEO, and interim CFO effective June 3, 2024 but will continue as an employee to provide transition services through June 30, 2024.
•Mr. Diepholz has been appointed to serve as the non-executive Chairman of the Board of Directors effective June 3, 2024.
•Mr. Diepholz’s award of 700,000 shares of restricted Common Stock of the Company, which was granted on December 28, 2022, were accelerated to vest in full on June 3, 2024.
•While Mr. Diepholz remains on the Board of Directors, he will receive the following compensation (the “Board Compensation”):
oCash compensation in the amount of $150,000 for the remainder of 2024, $325,000 for 2025, and $350,000 for 2026.
oAn annual bonus, payable in Common Stock of the Company, of 186,355 shares for 2023, and $100,000 worth of shares in each of 2024, 2025, and 2026 at the respective market prices upon the date of grant in such years.
•If (a) the Company receives a 43-101-compliant technical report on or before December 31, 2026 demonstrating a minimum of two million (2,000,000) economically viable ounces of gold from operations and (b) Mr. Diepholz continues to serve as a director or Chairman Emeritus of the Company when such report is issued, Mr. Diepholz will receive an award of 500,000 shares of Common Stock.
•The Company will pay 12 months of health, dental, and vision insurance premiums if Mr. Diepholz elects to continue his coverage under COBRA.
•If Mr. Diepholz ceases to serve on the Company’s board for any reason other than removal for cause prior to payment in full of the Board Compensation, he will receive severance payments equal to the amount of Board Compensation unpaid through the date of his cessation to serve as a director.
To make sufficient shares of Common Stock available for grants under the Company’s 2024 Equity Incentive Plan, on June 3, 2024, the Board of Directors approved the amendment and restatement of the Plan. The only change to the Plan is to increase the number of shares of Common Stock issuable thereunder from two million seven hundred thousand (2,700,000) to four million (4,000,000). The Plan, as amended and restated, will be submitted for approval by the shareholders at the next annual meeting of the shareholders of the Company. A copy of the Plan is attached hereto as Exhibit 10.4 and incorporated herein by reference.
Item 8.01 Other Events
On June 7, 2024, the Company issued a press release discussing the changes to the Company’s Board of Directors and CEO disclosed above. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
|
|
|
|
DYNARESOURCE, INC. |
|
|
|
|
Date: |
June 7, 2024 |
By: |
/s/ Rohan Hazelton |
|
|
|
Rohan Hazelton
Chief Executive Officer |
May 30, 2024
DynaResource, Inc.
222 West Las Colinas Blvd.
Suite 1910 North
Irving, TX 75039
Subject: Additional Credit Line - DynaResource and Ocean Partners
Dear Rohan,
Thank you for the discussions around the recent expansions at San Jose de Gracia and we wanted to provide you a proposal on a temporary additional credit line and hedging proposal for you and your board to consider. We understand that the expansions have put the balance sheet under some strain and we would like to find a way to help and further extend our partnership.
Our current contract comes to an end at the end of 2026 and we are keen to extend this contract with you given the excellent concentrate quality, high levels of trust built between our groups and extremely professional working relationship and attitude between our groups.
Our proposal would be as follows:
-OP to provide a temporary additional credit line (the “TACL”) in the form of a one- time amount of US$4.00 million due and payable November 30, 2024 (or earlier at the Company’s option). Interest to accrue at the same rate as the Revolving Credit Line (“RCL”) which currently has approximately US$8.25M outstanding. Once repaid the TACL may not be redrawn. The RCL may be redrawn once paid in full and the RCL shall be increased to US$12.5M after November 30, 2024 and the repayment of the RCL and TACL.
-The TACL proceeds must be used to pay the March, April and May RCL installments totaling $1,462,500. The balance of amounts to be used on projects agreed by the Board of Directors of DynaResource.
-The current concentrate contract is extended until December 31, 2028 with the contract to automatically extend annually on an evergreen basis, thereafter unless written notice is given by either party no later than 365 days before the date of termination. I.E., if either party wishes to terminate the contract (which cannot be any earlier than December 31, 2027), notice would need to be given by January 1, 2028 otherwise the contract would extend through December 31, 2029 with this process repeated annually until one party provides notice to terminate. On a change of control event, if DynaResource is unable to meet the notice requirements or if it is before the extension date of December 31, 2028, then DynaResource, Inc. may terminate the contract early and will pay Ocean Partners an early termination fee of Two Million Dollars ($2,000,000.00) with notice being effective on the payment of the termination fee and any outstanding loan amounts.
-OP to provide DynaResource a put option to sell OP up to US$9.00 million of DynaResource shares at a strike price equivalent to the Golden Post private placement and the management share grant related to 2023 bonuses, expected to be approximately $1.62 per share, not exercisable before November 1, 2024, expiring November 30,
Ocean Partners Holdings Limited
The Pearce Building, 3rd Floor, West Street, Maidenhead, Berkshire, SL6 1RL UK
Telephone : +44 1628 644060 Fax : +44 1628 644070
Registered in England : No 5171663 VAT Number : GB 849 7393 65
2024. These shares, if exercised, may not be sold by Ocean Partners within 180 days of exercise except in the case of a takeover bid accepted by DynaResource.
-Golden Post agrees to waive its anti-dilution rights on the put option.
-If any amounts over $4.00M are exercised under the put option, the amount of the RCL available shall reduce on a dollar-for-dollar basis.
-OP to offer DynaResource a margin free hedging facility to forward price payable gold ounces using market rate futures or options of up to 10,000 payable ounces of gold to be sold in concentrate form in no longer than six months duration and to be no more than 80% of the estimated payable gold sales during that period. Any pricings completed shall be subject to a 1/8 of 1% commission to cover OP’s broker and line costs.
-OP to receive a first ranking security charge over DynaMéxico IVA claims to cover outstanding amounts under the RCL and TACL.
-Due to practicality reasons related to security and the put option, the Advance Credit Line shall no longer be available and the regular US$12.5 RCL (limit subject to exercise of the put option above $4.00M) shall be the remaining credit line available for DynaResource going forward.
-Proposal is subject to the approval of the board of directors of OP and DynaResource.
-Proposal is subject to formal documentation.
We very much look forward to continuing our excellent working partnership we have developed and hope to be doing so for many years to come.
Kind regards,
Ocean Partners Holdings Limited
Brent Omland
Director and Co-CEO
Acceptance of the above terms and conditions.
`
/s/ Rohan Hazelton ______________
DynaResource Inc.
Rohan Hazelton
President and CEO
Ocean Partners Holdings Limited
The Pearce Building, 3rd Floor, West Street, Maidenhead, Berkshire, SL6 1RL UK
Telephone : +44 1628 644060 Fax : +44 1628 644070
Registered in England : No 5171663 VAT Number : GB 849 7393 65
Employment Agreement
This Employment Agreement (this “Agreement”) is made as of the 3rd day of June, 2024 (the “Effective Date”), by and between DynaResource, Inc., a Delaware corporation (the “Company”), and Rohan Hazelton (“Executive”).
RECITALS
WHEREAS, the Company desires to employ Executive, and Executive desires to accept employment, as the Chief Executive Officer of the Company, pursuant to the terms of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and agreements contained in this Agreement, including the compensation to be paid to Executive, the parties hereby agree as follows:
1.Employment; Term; Duties and Responsibilities.
1.1.Employment as Chief Executive Officer. The Company wishes to employ Executive as its Chief Executive Officer, and Executive hereby accepts such employment, subject to the terms and conditions of this Agreement. Executive represents and warrants to the Company that he is not a party to any agreement that would restrict or prohibit him from being employed by the Company.
1.2.Term. The provisions of this Agreement shall be effective as of the Effective Date and shall continue in force until terminated as provided in Section 3 (the “Term”). While Section 3 provides details on the consequences of termination that depend on how and why termination occurs, the parties acknowledge that Executive’s employment with the Company is AT WILL and may be terminated by the Company at any time.
1.3.Duties and Responsibilities. Executive shall report directly to the Board of Directors of the Company (the “Board”). Executive shall have such duties and responsibilities, and the power and authority, normally associated with the position of Chief Executive Officer, as well as any additional duties and responsibilities, that shall, from time to time, be adopted, delegated, or assigned to him by the Board including but not limited to the duties, responsibilities, power, and authority described in the job description attached hereto as Exhibit A. Executive shall comply with all Company policies and procedures, as such may be adopted and modified from time to time. Executive shall keep the Board fully informed of any and all matters of a material nature, and seek Board approval of appropriate matters, in accordance with his fiduciary duties to the Company and its shareholders.
1.4.Devotion of Time. During the Term, Executive shall devote all of his working time, care and attention to his duties, responsibilities and obligations to the Company. Executive may manage personal investments, serve on the boards of civic and charitable entities, and, with the prior written consent of the Board, serve on the boards of other for-profit entities; provided, however, that such activities do not, either individually or in the aggregate, interfere or conflict with Executive’s duties and responsibilities with the Company.
1.5.Principal Office. Executive’s primary office location will be at his home in Toronto, Canada, but his primary office location may be changed upon mutual agreement with the Board. Regardless
of the location of his primary office, Executive is expected to spend a significant number of days (but less than 183 days) each calendar year of the Term at the Company’s mine location in Mexico.
2.Compensation; Benefits. As compensation and consideration for the services to be rendered by Executive to the Company in accordance with the terms and conditions of this Agreement, and while Executive is employed with the Company, Executive shall be entitled to the compensation and benefits set forth in this Section 2 (subject, in each case, to the provisions of Section 3 of this Agreement).
2.1.Base Salary. Executive shall receive an annual base salary (the “Base Salary”) of Two Hundred Twenty-Five Thousand and no/100 Dollars ($225,000.00) per year, payable in accordance with the Company’s standard payroll dates and practices. Executive’s Base Salary may be reviewed and adjusted no more frequently than annually by the Compensation Committee of the Board (the “Comp Committee”).
2.2.Annual Bonus. Executive shall be eligible to receive an annual, discretionary bonus, as determined by the Comp Committee (the “Discretionary Bonus”), in an amount up to 50% of the Base Salary paid in the previous calendar year. For the avoidance of doubt, the “Base Salary paid in the previous calendar year” means that, for a partial calendar year, the Discretionary Bonus would be based on the Base Salary paid for the actual number of days worked during such year, rather than the entire annual Base Salary. The Discretionary Bonus shall be payable entirely in deferred stock units (“DSUs”) under the Company’s 2023 Amended and Restated Equity Incentive Plan (the “Plan”), as the Plan may be amended, or any subsequent equity compensation plan. The Discretionary Bonus for each completed calendar year shall be determined after year-end and paid at the same time as corresponding bonuses to other senior executives of the Company generally but no later than March 31 following the end of each calendar year during the Term. At the time of awarding DSUs for each annual Discretionary Bonus, the Comp Committee shall specify the conditions for earning the Common Stock underlying such DSUs. Executive must remain employed by the Company at the time of payment to receive the Discretionary Bonus for a prior calendar year.
(a)Option Award. Upon executing this Agreement, Executive will receive an option to purchase seven hundred fifty thousand (750,000) shares of Common Stock of the Company (the “Option”) at an exercise price equal to the closing price reported on otcmarkets.com for the last trading day prior to the date of the Agreement, pursuant to an Award Agreement (the “Option Agreement”) under the Plan. Pursuant to the terms of the Plan and the Option Agreement, the Option will vest and become exercisable one-third per year on each of the first three anniversaries of the grant date and will be exercisable for a period of five years from the grant date.
(b)DSU Award. Upon executing this Agreement, Executive will receive an award of five hundred thousand (500,000) DSUs (the “Grant Date DSUs”) pursuant to an Award Agreement (the “DSU Agreement”) under the Plan. The DSU Agreement will provide that the Comp Committee will establish performance metrics for the Grant Date DSUs within 90 days following the grant date.
(c)RSU Award. Upon executing this Agreement, Executive will receive an award of five hundred thousand (500,000) restricted stock units (the “Grant Date RSUs”) pursuant to an Award Agreement (the “RSU Agreement”) under the Plan. Pursuant to the terms of the Plan and the RSU Agreement, the RSUs will vest and become exercisable one-third per year on each of the first three anniversaries of the grant date.
2.4.Payment in Lieu of Other Benefits. While Executive’s primary office location is outside the United States, in lieu of the right to participate in healthcare, retirement, and other benefit plans and programs that the Company makes generally available from time to time to its employees, the Company will pay to executive an amount in cash equal to ten percent (10.0%) of the amount of his Base Salary each year (the “Benefit Pay”) divided into installments according to the Company’s normal payroll schedule. If Executive relocates his primary office location to the United States, then upon Executive’s mutual agreement with the Company, the Benefit Pay will cease and Executive will become eligible to participate in all healthcare, retirement, and other benefit plans and programs of the Company generally available from time to time to employees of the Company and for which Executive qualifies under the terms thereof. Nothing in this Agreement shall limit the Company’s ability to change, modify, cancel, amend or discontinue any of these plans.
2.5.Reimbursement of Expenses. The Company shall pay directly or reimburse Executive for reasonable business-related expenses and disbursements incurred by him for and on behalf of the Company in connection with the performance of his duties for the Company, subject to the Company’s written policies relating to business-related expenses as in effect from time to time. Executive shall submit to the Company, no later than the month after the month during which he incurred any such business-related expenses and disbursements, a report of such expenses and disbursements in the form normally used by the Company and receipts with respect thereto, and the Company’s obligations under this Section 2.5 shall be subject to compliance therewith. Reimbursement of any business-related expenses and disbursements shall be made in accordance with the Company’s written policies relating to business-related expenses as in effect from time to time. In no event will reimbursement of any business-related expenses and disbursements be made later than the last day of the calendar year following the calendar year in which any such expense or disbursement was incurred.
2.6.Vacation. Executive shall be entitled to six weeks of paid vacation each calendar year in accordance with the Company’s Paid Time Off (PTO) policy in effect from time to time.
2.7.Professional Fees. The Company shall pay all of Executive’s normal Canadian CPA dues and the costs of required professional learning/training certifications, courses, and continuing education requirements arising during the Term for Executive to maintain his Canadian CPA license.
2.8.Deductions; Withholdings. All compensation payable to Executive under the terms of this Agreement shall be subject to any applicable income, payroll or other tax withholding requirements.
3.1.Termination by the Company. The Company shall have the right, subject to the terms of this Agreement, to terminate Executive’s employment at any time, with or without Cause (as defined below). The Company shall give Executive written notice of a termination for Cause (the “Cause Notice”) in accordance with Section 7.2. The Cause Notice shall state the particular action(s) or inaction(s) giving rise to the termination for Cause. If Executive remedies the action(s) or inaction(s) giving rise to the Cause Notice to the satisfaction of the Comp Committee within the 30-day period following his receipt of the Cause Notice, the Cause Notice shall be deemed rescinded and of no force or effect.
3.2.Termination by Executive. Executive shall have the right, subject to the terms of this Agreement, to terminate his employment at any time, for any reason or for no reason. Executive shall also have the right, subject to the terms of this Agreement, to terminate his employment at any time for “Good Reason (as defined below). Executive must give the Company written notice, in accordance with Section
7.2 of this Agreement, of any Good Reason termination of employment. Such notice must be given within 60 days following Executive’s knowledge of the first occurrence (as determined without regard to any prior occurrence that was subsequently remedied by the Company) of a Good Reason circumstance, and must specify which of the Good Reason circumstances Executive is relying on, the particular action(s) or inaction(s) giving rise to such circumstance, and the date that Executive intends to separate from service, as defined under Section 409A of the Internal Revenue Code of 1986, as amended, which shall be no earlier than thirty (30) days following the date of the Company’s receipt of the notice. Executive’s termination shall not be deemed a Good Reason termination of employment if (i) within 30 days of the Company’s receipt of such notice, the Company remedies the circumstance(s) giving rise to the notice, or (ii) Executive’s termination of his employment does not occur within 60 days after the end of the 30-day period provided to the Company to remedy the circumstances giving rise to the notice.
3.3.Death. If Executive dies during the Term, Executive’s employment shall automatically terminate, such termination to be effective on the date of Executive’s death.
3.4.Disability. If Executive shall suffer a Disability (as defined below), the Company shall have the right to terminate Executive’s employment, such termination to be effective upon the giving of notice to Executive in accordance with Section 7.2 of this Agreement. Executive cannot be terminated for Disability unless the Company has delivered a written demand for substantial performance to Executive, specifically identifying the manner in which Executive has not substantially performed his duties, and Executive does not cure such failure within sixty (60) days of such demand.
3.5.Termination of Employment following a Change in Control.
(a)Triggering Event. Executive may not invoke Change in Control (as defined below) protections under this Agreement unless a Triggering Event (as defined below) occurs following the occurrence of a Change in Control. For clarity, nothing in the provision derogates from the Executive's right under Section 3.2 to give the Company notice of any Good Reason at any time during the Term, including following a Change of Control.
(b)Company Successor. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as the Executive would be entitled to hereunder if the Company had terminated Executive without Cause as of the day immediately before such succession became effective. As used in this Section 3.5(b), the “Company” shall mean the Company as defined in the first sentence of this Agreement and any successor to all or substantially all its business or assets or which otherwise becomes bound by all the terms and provisions of this Agreement, whether by the terms hereof, by operation of law or otherwise.
3.6.Effect of Termination.
(a)Termination by the Company for Cause or by the Executive without Good Reason. In the event of the termination of Executive’s employment by the Company for Cause or by Executive without Good Reason, the Company shall pay to Executive (or his beneficiary, heirs or
estate, in the event of his death) (i) any Base Salary, to the extent not previously paid, earned prior to the date of termination; (ii) any reimbursable business expenses that have not yet been reimbursed; (iii) the cash equivalent of any unused vacation time accrued to the date of termination in accordance with the Company’s PTO policies then in effect; and (iv) any Benefit Pay or (if applicable) benefits payable under the Company’s retirement, healthcare, and other plans in which Executive was a participant at the time of termination (collectively, the “Accrued Obligations”). The Accrued Obligations shall be paid within 30 days after the date of termination. Nothing in this Agreement shall be construed to limit the rights and remedies which may be available to the Company in the event of a termination of Executive’s employment by the Company for Cause.
(b)Termination by the Company without Cause, by Executive for Good Reason, Resulting from Executive’s Death or Disability, or in the Event of a Triggering Event following a Change in Control. In the event of termination of Executive’s employment by the Company without Cause, by Executive for Good Reason, or as a result of Executive’s death or Disability, or in the event of a Triggering Event following a Change in Control, Executive (or, in the case of death, his beneficiary, heir or estate) shall be entitled to the Accrued Benefits and an additional payment (the “Severance Payment”) equal to the Base Salary and maximum Discretionary Bonus to which Executive would have been entitled if the Agreement had remained in effect for an additional twenty-four (24) months following his termination. Subject to Section 7.10, the Accrued Benefits and Severance Payment shall be paid in a single lump sum within sixty (60) days following termination or the occurrence of a Triggering Event.
3.7.Conditions of Payment. Any payments or benefits made or provided in connection with the termination of Executive’s employment with the Company in accordance with Section 3.6 (other than payments made or provided in accordance with Section 3.6(a) or due to a termination of Executive’s employment due to his death) are subject to Executive’s:
(a)compliance with all applicable provisions of this Agreement, including the restrictive covenants identified in Sections 4 and 5 of this Agreement;
(b)delivery to the Company of a resignation from all offices, directorships and fiduciary positions with the Company, its affiliates and employee benefit plans prior to the scheduled date for which the applicable payment or benefit is to be made or provided; and
(c)delivery by Executive of an executed, concurrently-effective, General Release substantially in the form attached to this Agreement as Exhibit B, with such changes or additions as needed under then applicable law to give effect to its intent and purpose.
3.8.Cooperation; Assistance. Following termination of Executive’s employment for any reason, Executive agrees to cooperate fully, subject to reimbursement by the Company of reasonable out-of-pocket costs and expenses (including reasonable attorney fees), with the Company or any subsidiary and its or their counsel with respect to any matter (including any litigation, investigation or governmental proceeding) which relates to matters with which Executive was involved or about which he had knowledge during his employment with the Company or any subsidiary. Such cooperation shall include appearing from time to time at the offices of the Company or any subsidiary or its or their counsel for conferences and interviews and, in general, providing the officers of the Company or any subsidiary and its or their counsel with the full benefit of Executive’s knowledge with respect to any such matter. Executive further agrees, upon termination of his employment for any reason, and if the Comp Committee or Board requests, to assist
his successor in the transition of his duties and responsibilities to such successor. Executive agrees to render such cooperation in a timely fashion and at such times as may be mutually agreeable to the parties.
3.9.Certain Definitions. For purposes of this Section 3, the following terms shall have meanings set forth in this Section 3.9.
(i)Executive’s conviction of or plea of nolo contendere to a felony;
(ii)any act of fraud, theft, embezzlement, or gross negligence by Executive,
(iii)material dishonesty, breach of fiduciary duty, or misconduct in performance of Executive’s duties to the Company;
(iv)the Executive’s material violation of the Company’s written policies or codes of conduct, including written policies related to discrimination, harassment, performance of illegal or unethical activities, and ethical misconduct;
(v)a material breach by Executive of any of the terms or provisions of this Agreement; or
(vi)Executive’s failure to perform (other than as a result of Executive’s Disability) or substantial neglect in the performance of Executive’s duties and responsibilities to the Company, including but not limited to, the Executive’s willful failure to comply with any valid and legal directive of the Board.
(b)A “Change in Control” shall be deemed to have occurred as of the first day any one or more of the following conditions shall have been satisfied:
(i)Any person (other than (i) the Company or any subsidiary of the Company, (ii) a corporation or other entity owned, directly or indirectly, by the shareholders of the Company as of the Effective Date in substantially the same proportions as their ownership of the Company, or (iii) an employee benefit plan (or related trust) sponsored or maintained by the Company or any subsidiary of the Company, becomes the beneficial owner, directly or indirectly, of securities of the Company, representing fifty-one percent (51%) or more of the combined voting power of the Company’s then outstanding securities; or
(ii)A merger, consolidation, reorganization or share exchange, or sale of all or substantially all of the assets, of the Company, unless, immediately following such transaction, all or substantially all of the beneficial owners of the Company immediately prior to such transaction will beneficially own in substantially the same proportions, directly or indirectly, more than 51% of the combined voting power of the then outstanding voting securities of the corporation or other entity resulting from such transaction (including, without limitation, a corporation or other entity which, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets, either directly or through one or more subsidiaries) (the “Successor Entity”).
(iii)All terms used in this Section 3.10(c) shall be interpreted in a manner consistent with the Securities Exchange Act of 1934.
(c)“Disability” shall mean any physical or mental incapacity as a result of which Executive is unable to perform substantially all of his essential duties for an aggregate of six (6) months, whether or not consecutive, during any calendar year, and which cannot be reasonably accommodated by the Company without undue hardship.
(d)“Good Reason” shall mean the occurrence of any of the following during the Term without Executive’s prior written consent:
(i)a material diminution in the Executive’s authority, duties and/or responsibilities, generally, or, for the first 12 months following the date of this Agreement, any material change in the ordinary and customary delineation of duties between the Executive and the non-executive members of the Board of Directors;
(ii)a material failure by the Company to comply with the provisions of this Agreement, including any failure to pay Executive’s Base Salary or Benefit Pay (provided that an isolated, insubstantial or inadvertent action or omission that is not in bad faith and is remedied by the Company promptly after receipt of notice thereof given by Executive shall not constitute Good Reason);
(iii)in the event of the occurrence of a Change in Control, the failure of a successor to the Company to explicitly assume and agree to be bound by the terms of the Change in Control provisions contained in this Agreement; or
(iv)failure of the Company’s shareholders to approve the Plan at the 2024 annual meeting of shareholders.
(e)“Triggering Event” shall mean a termination of the Executive’s employment with the Company or any Successor Entity at any time prior to the end of the twelve (12) month period following a Change in Control (such period of time being referred to as the “Employment Period”), unless (i) such termination is by reason of the Executive’s Total Disability or death; or (ii) the Company terminates the Executive’s employment with the Company or Successor Entity for Cause; or (iii) the Executive terminates his employment with the Company or Successor Entity without Good Reason.
4.1.Acknowledgements. Executive acknowledges and agrees that:
(a)by reason of his employment with the Company and his service as an officer of the Company, Executive will have knowledge of all aspects of the Company’s operations and will be entrusted with and have access to confidential and secret proprietary business information and trade secrets of the Company, including but not limited to:
(i)information regarding the Company’s business priorities and strategic plans;
(ii)information regarding the Company’s personnel;
(iii)financial and marketing information (including but not limited to information about costs, prices, profitability and sales information not available outside the Company);
(iv)secret and confidential plans for and information about new or existing services, and initiatives to address the Company’s competition;
(v)information regarding customer relationships; and
(vi)proprietary or Confidential Information of customers or clients for which the Company may owe an obligation not to disclose such information.
(all such information shall be collectively referred to as “Confidential Information”);
(b)the Company and its subsidiaries, affiliates and divisions will suffer substantial and irreparable damage that will not be compensable through money damages if Executive should divulge or make use of Confidential Information acquired by Executive in the course of his employment with the Company and service to the Board other than as may be required or appropriate in connection with Executive’s work as an employee of the Company; and
(c)the provisions of this Agreement are reasonable and necessary for the protection of Confidential Information, the business of the Company and its subsidiaries, affiliates and divisions, and the stability of their workforces.
4.2.Confidentiality. Except as may be required or appropriate in connection with Executive’s work as an employee of the Company, Executive shall keep confidential all Confidential Information he learns of during his employment with the Company regarding the Company, its business, operations, systems, employees, customers, clients and prospective clients. In addition, Executive agrees that he will not disclose Confidential Information obtained from the Company or its officers, directors or management during his employment, including, but not limited to, information regarding, or statements by, the Company or its officers, directors or management, to anyone other than as required by law or in response to a lawful court order or subpoena.
4.3.Witness Participation. Nothing in this Section 4 shall prohibit Executive from participating as a witness at the request of the Company or a third party in any investigation by the SEC or any other governmental agency charged with the investigation of any matters related to Executive’s employment with the Company, nor shall Executive be prohibited from testifying in response to a subpoena, court order or notice of deposition. Executive agrees to notify the Company’s General Counsel, in writing, at least ten (10) days prior to the response deadline or appearance date (whichever is earlier) for any such subpoena, court order or notice of deposition issued by a court or investigating agency which seeks disclosure of any Confidential Information, or as much notice as feasible if the response deadline or appearance date is less than ten (10) days from the date of Executive’s receipt of any such subpoena, court order or notice of deposition. Executive further agrees to take any actions reasonably requested by the Company to allow the Company to protect the release of information regarding Executive’s employment from the Company in such court or agency proceeding.
4.4.Use Limitations. Executive agrees that:
(a)he will not, at any time, remove from the Company’s premises any notebooks, software, data or other Confidential Information relating to the Company, except to the extent necessary or appropriate to perform his duties and responsibilities under the terms of this Agreement;
(b)upon the expiration or termination of this Agreement for any reason whatsoever, Executive shall promptly deliver to the Company any and all notebooks, software, data and documents and material, including all copies thereof, in his possession or under his control relating to any Confidential Information, or which is otherwise the property of the Company; and
(c)he will not use any Confidential Information for his own benefit or for the benefit of any new employer or any third person.
4.5.Company. For purposes of this Section 4, the term “Company” shall mean and include the Company and any and all subsidiaries and affiliated entities of the Company in existence from time to time.
5.Non-Competition and Non-Solicitation.
5.1.Acknowledgements. Executive acknowledges that, by virtue of Executive’s position with the Company, Executive will be exposed to and acquire significant Confidential Information about the Company and its existing and future plans and strategies. As a result, Executive acknowledges that the Company has a legitimate business interest supporting the restrictive covenants set forth in this Section 5.
5.2.Covenants. During Executive’s employment with the Company and until the first anniversary of the date of termination of Executive’s employment with the Company for any reason, Executive shall not in any manner, directly or indirectly, within the United States (without the prior written consent of a duly authorized officer of the Company):
(a)act as a Competitive Enterprise (as defined below) or accept any engagement in any capacity that involves Executive performing management, consultation, advisory, sales, or other services of any kind with or for a Competitive Enterprise, directly or indirectly;
(b)Solicit (as defined below) any Customer (as defined below) to reduce or refrain from doing any business with the Company or any of its subsidiaries;
(c)transact business with any Customer that would cause Executive to be a Competitive Enterprise;
(d)interfere with or damage any relationship between the Company or any its subsidiaries with a Customer; or
(e)Solicit anyone who is then an employee of the Company or any of its subsidiaries (or who was an employee of the Company or any of its subsidiaries within the prior 12 months) to resign from the Company or any of its subsidiaries or to apply for or accept employment with any other business or enterprise.
5.3.Certain Definitions. For purposes of this Section 5, the following terms shall have meanings set forth in this Section 5.3:
(a)“Competitive Enterprise” means any business enterprise that either (A) operates a mine within 100 miles of the location of any mine operated by the Company or any of its subsidiaries; or (B) holds a greater than 5% equity, voting or profit participation interest in any enterprise that operates a mine within 60 miles of the location of any mine operated by the Company or any of its subsidiaries.
(b)“Customer” means any customer or prospective or potential customer of the Company or any of its subsidiaries whose identity became known to Executive in connection with Executive’s relationship with or employment by the Company or any of its subsidiaries and who may be a customer within 12 months after the termination of this Agreement.
(c)“Solicit” means any direct or indirect communication of any kind, regardless of who initiates it, that in any way invites, advises, encourages or requests any person to take or refrain from taking any action.
6.Injunctive Relief. If Executive commits a breach, or threatens to commit a breach, of any of the provisions of Section 4 or 5 of this Agreement, the Company shall have the right and remedy (which shall be in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity) to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction without posting a bond or proving irreparable injury, it being acknowledged by Executive that any such breach or threatened breach will or may cause irreparable injury to the Company and that money damages will or may not provide an adequate remedy to the Company.
7.1.Benefit of Agreement, Assignment; Beneficiary. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. This Agreement shall also inure to the benefit of, and be enforceable by, Executive and his personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
7.2.Notices. Any notice required or permitted under this Agreement shall be in writing and shall be sufficiently given if personally delivered or if sent by certified mail, postage prepaid, with return receipt requested or by reputable overnight courier, addressed: (a) in the case of the Company, to the General Counsel of the Company at the Company’s then-current corporate headquarters, and (b) in the case of Executive, to Executive’s last known address as reflected in the Company’s records, or to such other address as either party shall designate by written notice to the other party. Any notice given hereunder shall be deemed to have been given at the time of receipt thereof by the person to whom such notice is given if personally delivered or at the time of mailing if sent by certified mail or by courier.
7.3.Entire Agreement; Amendment. Except as specifically provided in this Agreement, this Agreement contains the entire agreement of the parties to this Agreement with respect to the terms and conditions of Executive’s employment during the Term, and supersedes all prior agreements and understandings, whether written or oral, between the parties with respect to compensation due for services rendered under this Agreement; provided, however, that, except to the extent expressly provided in this Agreement, any outstanding award agreements and cash or equity incentive arrangements between the Company and Executive shall remain in effect following the Effective Date. For the avoidance of doubt, in the event of any inconsistency between this Agreement and any plan, program or arrangement of the Company or its affiliates, the terms of this Agreement shall control. This Agreement may not be changed or modified except by an instrument in writing signed by both of the parties.
7.4.Waiver. The waiver of either party of a breach of any provision of this Agreement shall not operate or be construed as a continuing waiver or as a consent to or waiver of any subsequent breach.
7.5.Headings. The section headings in this Agreement are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or affect any of the provisions of this Agreement.
7.6.Governing Law. This Agreement shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of Texas, without reference to the principles of conflicts of laws.
7.7.Survivorship. The respective rights and obligations of the parties under this Agreement shall survive any termination of this Agreement to the extent necessary to effectuate the intended preservation of such rights and obligations, including, without limitation, Section 4 and 5 of this Agreement.
7.8.Validity. The invalidity on unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision or provisions of this Agreement, which shall remain in full force and effect. If any provision of this is held to be invalid, void or unenforceable, any court so holding shall substitute a valid, enforceable provision that preserves, to the maximum lawful extent, the terms and intent of this Agreement.
7.9.Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state or local statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” shall mean including without limitation.
(a)Notwithstanding the due date of any post-employment payments, if at the time of the termination of Executive’s employment Section 409A is triggered and if Executive or Company would be subject to liability or other penalty for failure to comply with 409A, and if Executive is a “specified employee” (as defined in Section 409A), Executive will not be entitled to any payments upon termination of employment that are subject to Section 409A until the later of (i) the date that payments are scheduled to be made under this Agreement, or (ii) the earlier of (A) the first day of the seventh month following the date of termination of his employment with the Company for any reason other than death, or (B) the date of Executive’s death. The provisions of this paragraph will only apply if 409A is triggered, and will only apply if and to the extent required to avoid any “additional tax” under Section 409A either to Executive or Company. If 409A is triggered, the parties to this Agreement intend that the determination of Executive’s termination of employment shall be made in accordance with Treasury Reg. Section 1.409A-1(h) and that Executive will be paid as set forth in Section 3.6, to the extent consistent with law.
(b)If Section 409A is triggered and if Executive or Company would be subject to liability or other penalty for failure to comply with 409A, the Parties to this Agreement intend that this Agreement and Company’s and Executive’s exercise of authority or discretion hereunder shall comply with the provisions of Section 409A and the Treasury regulations relating thereto so as not
to subject Executive to the payment of interest and tax penalty which may be imposed under Section 409A. In furtherance of this objective, to the extent that any regulations or other guidance issued under Section 409A would result in Executive being subject to payment of “additional tax” under Section 409A, the parties agree to use their best efforts to amend this Agreement in order to avoid the imposition of any such “additional tax” under Section 409A, which such amendment shall be designed to minimize the adverse economic effect on Executive without increasing the cost to the Company (other than transactions costs), all as reasonably determined in good faith by the Company and Executive to maintain to the maximum extent practicable the original intent of the applicable provisions. This Section 7.10 does not guarantee that payments under this Agreement will not be subject to “additional tax” under Section 409A.
7.11.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which will constitute one and the same instrument. The parties agree that electronic signatures, including signatures delivered in PDF format, by DocuSign, or in any other electronic format, shall constitute originals for all purposes.
[Signature page follows]
IN WITNESS WHEREOF, each of the parties has duly executed this Agreement on the date first set forth above.
DynaResource, Inc.
By: /s/ Phillip Rose
Phillip Rose, Chairman of the Audit Committee
By: /s/ Rohan Hazelton
Rohan Hazelton, Individually
Exhibit A
Job Description
The Chief Executive Officer of the Corporation (the “Chief Executive Officer”) shall perform such duties as may be assigned to him from time to time by the Board of Directors. Subject to the direction of the Board of Directors, he shall have, and exercise, direct charge of, and general supervision over, the business and affairs of the Corporation and shall be its chief policy making officer. He shall from time to time report to the Board of Directors all matters within his knowledge that the interests of the Corporation may require to be brought to its notice, and shall also have such other powers and perform such other duties as may be specifically assigned to him from time to time by the Board of Directors. The Chief Executive Officer shall see that all resolutions and orders of the Board of Directors are carried into effect, and in connection with the foregoing, shall be authorized to delegate to a Vice President and the other officers such of his powers and such of his duties as the Board of Directors may deem to be advisable. The Chief Executive Officer shall possess the power to sign all contracts, certificates and other instruments of the Corporation as the Board of Directors from time to time may prescribe.
Exhibit B
General Release
8.Release by Executive. For valuable consideration, the adequacy of which is hereby acknowledged, the undersigned executive (“Executive”), on his own behalf and on behalf of his family members, heirs, executors, administrators, personal representatives, distributees, devisees, legatees, and successors and assigns (collectively, the “Releasing Parties”), does hereby knowingly, voluntarily and unconditionally release, waive, acquit and fully discharge, and agree to hold harmless Dynaresource, Inc., a Delaware corporation (the “Company”) and all of its present and past subsidiaries and affiliates, and its and their officers, directors, shareholders, employee benefit plans, plan fiduciaries and trustees, insurers, employees, agents, representatives, successors and assigns (collectively referred to as the “Releasees”) from any and all claims and causes of action, whether known or unknown, arising out of or related to Executive’s employment with the Company and his separation therefrom, including but not limited to: (a) any and all contract and tort claims including, without limitation, negligence, gross negligence, negligent hiring, retention and/or supervision, malice, defamation, conspiracy, assault, battery, intentional infliction of emotional distress, breach of implied or express contracts, unjust enrichment, quantum meruit, misrepresentation, fraud, estoppel, constructive discharge or wrongful discharge, invasion of privacy; (b) claims for salary, benefits, bonuses, overtime, exemplary damages, lost pay, severance pay, vacation pay, medical, psychiatric or psychological treatment payments (as defined in the Texas Labor Code or any other state or local law); (c) claims for discrimination, harassment or retaliation based on age, disability, race, color, religion, sex, genetic information, national origin, or any other unlawful discrimination, harassment or retaliation; and (d) claims arising pursuant to any law, statute, ordinance, rule or regulation, including but not limited to, the Texas Labor Code, Texas Workers’ Compensation Act, Texas Payday Act and specifically Chapter 21 of the Texas Labor Code; Title VII of the Civil Rights Act of 1964, as amended in 1991;42 U.S.C. § 1981; The Americans With Disabilities Act; The Executive Retirement Income Security Act; The Age Discrimination in Employment Act; The Older Worker Benefit Protection Act; The Fair Labor Standards Act; The Family and Medical Leave Act; The National Labor Relations Act; The Fair Credit Reporting Act; The Immigration Reform Control Act; Executive Order 11246; Occupational Safety and Health Act; The Equal Pay Act; the Worker Adjustment and Retraining Notification Act; the Electronic Communication Privacy Act; the Computer Fraud & Abuse Act; the Sarbanes-Oxley Act; and any state or federal anti-discrimination, consumer protection and/or trade practices act.
9.Claims Not Released. The release set forth in Section 1 is not intended to release any claims that cannot be released by law, such as claims for vested pension benefits. Nor is Section 1 intended to prevent, restrict or otherwise interfere with Executive’s right to (i) file a charge with any appropriate federal, state or local agency; (ii) cooperate with the investigation of any charge before such agency; (iii) enforce this Agreement; or (iv) seek a judicial determination of the validity of the release set forth in Section 1. If an administrative agency or court assume jurisdiction over any charge or complaint involving claims that are released by Section 1, Executive hereby agrees to not, directly or indirectly, accept, recover or receive any monetary damages or other equitable relief that otherwise would be due, and Executive hereby expressly waives any rights to any such recovery or relief.
10.Confidential Information. Executive agrees to preserve the confidentiality of all trade secrets and other Confidential Information (as defined in Section 4 of that certain Employment Agreement dated as of April 19, 2023 by and between Executive and the Company (the “Employment Agreement”)) of the Company and its clients. Specifically, Executive acknowledges and agrees that the Company has disclosed Confidential Information which, for purposes of this Agreement, is defined as information which is not generally known in the business or community in which the Company and its clients are engaged or may become engaged or which would logically be considered confidential or proprietary or which would do the
Company or its clients harm if divulged. Executive agrees to treat all such Confidential Information as having been entrusted to him solely for use in his capacity as an employee of the Company and agrees to abide by all of his obligations under Section 4 of the Employment Agreement with respect to all Confidential Information. Executive agrees to respond to inquiries made by the Company related to the services he performed while employed with the Company
11.Return of Property. Executive agrees he has returned to the Company in good condition and good working order all company property in his possession or control as of the Termination Date, including all Confidential Information.
12.No Filing of Claims. Executive agrees that neither he, nor any person, organization, or other entity claiming by, through or on behalf of Executive has filed a charge, claim, lawsuit, or cause or permit to file a charge, claim, lawsuit or any action for damages or other relief (including injunctive, declaratory, monetary relief or other) against the Company involving any matter occurring in the past up to the date of this Agreement, or involving and based upon any claims, demands, causes of action, obligations, damages or liabilities which are the subject of this Agreement, unless allowed by law and/or compelled by subpoena or court order.
13.No Admission of Liability. Neither this Agreement nor anything contained herein shall be construed as an admission by the Company that it has in any respect violated or abridged any federal, state, or local law or any right or obligation that it may owe or may have owed to Executive, nor will this Agreement or its terms be admissible in any proceedings other than a proceeding for breach of the terms contained herein.
14.Confidentiality of Agreement. Executive agrees and acknowledges that Executive shall keep the existence and terms of this Agreement confidential and that Executive has not and will not directly or indirectly disclose the existence or terms to third persons other than a C.P.A. (or other tax advisor), a minister (or other religious advisor), or spouse, any or all of whom shall first be advised of and agree to this confidentiality promise; other disclosure is, however, permitted where compelled by subpoena and/or court order. In the event Executive receives such a subpoena or court order, Executive agrees to immediately notify the Company before such disclosure is made to allow the Company an opportunity to seek court intervention to prevent such disclosure.
15.Cooperation. Executive agrees to reasonably cooperate in the defense of any potential claim, dispute, penalty, demand, deficiency or obligation that may be initiated against the Company now or in the future related in any way to the Company’s operations during Executive’s employment, even if Executive is not named as a party. Such cooperation includes, without limitation, making himself available to the Company upon reasonable notice, without subpoena, to provide complete, truthful and accurate information in internal meetings, witness interviews, depositions, and trial testimony. The Company will reimburse Executive for reasonable out-of-pocket expenses he incurs in connection with any such cooperation (excluding foregone wages), provided he obtains advance approval from the Company in writing to incur such expenses. The Company will make reasonable efforts to accommodate Dodson’s scheduling needs to meet the obligations of this provision.
16.Non-Disparagement. Executive agrees that he will not make any written, oral or online derogatory, misleading, harmful or inflammatory statements concerning the Company, and/or Executive’s employment with the Company which disparage the reputation or goodwill of the Company or which could harm the Company’s business.
17.Knowing and Voluntary/ Consult Attorney. Executive affirms that he has carefully read this Agreement and knows and understands its contents and that Executive executes it at his own free act and will, and enters into the Agreement knowingly and voluntarily. Executive also affirms that the Company advised Executive to consult with an attorney of Executive’s choice (at Executive’s expense) before Executive signs this Agreement, whether or not Executive chooses to do so.
18.Time Limits, Revocation, Effective Date. Executive acknowledges and agrees that Executive received this Agreement on the Termination Date. Executive understands that he has twenty-one (21) days from the date Executive receives this Agreement to consider its terms and sign this Agreement, whether or not he chooses to do so. Changes to this Agreement, if any, whether material or not, will not extend the 21-day period. If Executive signs this Agreement, Executive may still revoke Executive’s acceptance of this Agreement for up to seven (7) calendar days after Executive signs it, by notifying the Company in writing before the seven-day period has expired. The written notice must be delivered in person on or before the 7th day after signing the Agreement or, if sent by mail, postmarked no later than the 7th day after signing this Agreement and emailed or mailed to the Chairman of the Compensation Committee of the Board of Directors at the Company’s executive headquarters address.
19.Effect of Declining or Revoking. Importantly, if Executive does not sign this Agreement within the 21-day period, or if Executive timely revokes this Agreement during the seven-day revocation period, this Agreement will not become effective and Executive will not be entitled to the consideration provided in Section 3.6(b) of the Employment Agreement. If Executive does not revoke this Agreement, this Agreement will take effect on the eighth (8th) day after the Agreement is signed by Executive.
20.Entire Agreement/Severability. The parties agree that this Agreement may not be modified, altered or changed except by a written agreement signed by the parties hereto. The parties acknowledge that this Agreement constitutes the entire agreement between them superseding all prior written and oral agreements, except that this Agreement does not supersede the obligations set forth in Sections 4, 5, 6, and 7 of the Employment Agreement, which provisions survived the termination of the Employment Agreement and which Executive acknowledges remain in full force and effect. Should any provision of this Agreement be declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, excluding the general release language in Section 1 of this Agreement, such provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect. If the general release language in Section 1 of this Agreement is found to be illegal or unenforceable, Executive agrees to immediately execute a binding legal and enforceable replacement release for Section 1 of this Agreement.
21.Governing Law. This Agreement is made in the state of Texas and shall be construed, enforced and governed by and under the laws of the state of Texas.
22.Counterparts. This Agreement may be executed in counterparts, by either an original signature or signature transmitted by facsimile transmission or other similar process and each copy so executed shall be deemed to be an original and all copies so executed shall constitute one and the same agreement.
23.Jurisdiction and Jury Waiver. In the event of any future dispute, controversy or claim between any parties arising from or relating to this Agreement, its breach, any matter addressed by this Agreement, and/or Executive’s employment with and/or separation from the Company, all parties to the Claim WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY TO THE CLAIM. The parties hereby
agree and consent to the jurisdiction and venue of the United States District Court for the Southern District of Texas, Houston Division, for any dispute, controversy or claim.
THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. PLEASE READ AND CONSIDER THIS AGREEMENT CAREFULLY BEFORE SIGNING IT.
Date: June 3, 2024
By: /s/ Rohan Hazelton
Rohan Hazelton, Individually
REVISED AND AMENDED AGREEMENT CONCERNING THE BUSINESS RELATIONSHIP BETWEEN K.D. DIEPHOLZ AND DYNARESOUNCE, INC.
This comprehensive agreement (“Agreement”) is made as of the 3rd day of June, 2024 (the “Effective Date”), by and between DynaResource, Inc., a Delaware corporation (the “Company”), and Koy W. (“K.D.”) Diepholz (“Diepholz”). For purposes of this Agreement Diepholz and the Company may be referred to as the “Parties”. This Agreement amends, replaces and supersedes any and all agreements and understandings between the Parties including, but not limited to, the employment agreement between the Company and Director dated April 19, 2023.
RECITALS
WHEREAS, Diepholz presently serves as the Chief Executive Officer and Chairman of the Company and presently serves as the President of DynaResource de Mexico, S.A. de C.V., the Company’s wholly owned subsidiary;
WHEREAS, Diepholz and the Company have determined that it is their mutual best interests for Diepholz to cease involvement in the day to day management of the Company and it is in their mutual interests for Diepholz to transition out of his role as Chief Executive Officer and any other roles as an employee or officer of the Company or its subsidiaries;
WHEREAS, the Company is appreciative of and grateful for Diepholz’s many contributions to the development and maturation of the Company;
WHEREAS, the Company considers the establishment and maintenance of a sound and vital Board of Directors to be in the best interests of the Company and its stockholders;
WHEREAS, Diepholz is expected to continue to make a meaningful contribution to the strength of the Company as a member of the Board of Directors and, subject to the terms of this Agreement and the Company’s by-laws, as non-executive chairman of the Board of Directors (hereinafter “Chairman of the Board”); and
WHEREAS, Diepholz and the Company desire to use this Agreement to set forth the terms of his continued relationship with the Company.
SUBSTANTIVE AGREEMENT TERMS
NOW, THEREFORE, in consideration of the mutual promises and agreements contained in this Agreement, including the compensation to be paid to Diepholz, the Parties hereby agree as follows:
1
DOCPROPERTY "DOCID" * MERGEFORMAT #503514859_v1 If numpages 21 = 1 DOCPROPERTY "DOCID" * MERGEFORMAT ""
1.Resignation of Employment, Effective Date, Separation Date and other Terms related to role on Board of Directors.
1.1.Voluntary Resignation of Employment as Chief Executive Officer and Other Employee Officer Positions of the Company or its Subsidiaries. As of the Effective Date of this Agreement Diepholz voluntarily resigns from his position as Chief Executive Officer as well as all other executive positions with the Company and its subsidiaries. Diepholz voluntarily resigns his employment status with Company effective at 5:00 p.m. on June 30, 2024 (the “Separation Date”). Effective as of the Separation Date, Diepholz shall be relieved of his duties, responsibilities, and authorities for Company except as expressly provided in Section 2 below and elsewhere in this Agreement. After the Separation Date, Diepholz will not represent himself as being an employee, officer, agent, or representative of Company or its subsidiaries and affiliates for any purpose or in any capacity other than as Chairman or member of the Board of Directors. Except as otherwise set forth in this Agreement, the Separation Date will be Diepholz’s separation date for all employment purposes, meaning, except as specifically set forth below, Diepholz will no longer be entitled to any further employee compensation, perquisites, or employment benefits from Company or its subsidiaries and affiliates, including coverage under any benefit plans or programs sponsored by Company.
1.2.Duties and Responsibilities During Transition Period. Diepholz understands that the Company intends to select and appoint another individual to the position of Chief Executive Officer who may also be appointed to other officer positions within the Company or its subsidiaries. Between the Effective Date of this Agreement and the Separation Date (the “Transition Period”), Diepholz shall no longer be required to devote his full time to the performance of regular duties, responsibilities, and authorities but shall remain an employee of the Company and continue to receive the same salary and benefits as he received immediately prior to the Effective Date. During this Transition Period Diepholz shall cooperate fully and completely with the Company, at its request, in all matters in which it reasonably requests assistance, including without limitation in all matters relating to the transition of his employment duties, responsibilities, and authorities for the Company (the “Transition Duties”). The Transition Duties include but are not limited to Diepholz promptly responding to telephone calls, e-mails, text messages, meeting requests and other communications from the Company and its officers or employees and meeting with officers and employees of the Company at reasonable times upon request. Diepholz shall promptly provide and perform such reasonably requested Transition Duties to the best of his ability.
1.3.Appointment as non-executive chairman of the Board. Subject to the terms of Section 1.5 below, as soon as practical following the execution of this Agreement Diepholz shall be appointed Chairman of the Board of Directors. It is expressly recognized herein that Diepholz will be acting in the capacity of a non-executive chairman of the board of directors, and expressly not acting as an executive chairman of the Board. The Initial Term for such appointment as
Chairman of the Board shall be for the later of: a) a minimum period of one (1) year from the Date of this Agreement or b) until the 2025 annual meeting of shareholders. If the majority of the Board of Directors vote in favor of extending Diepholz’s term the Initial Term, as Chairman of the Board, the Initial Term may be extended. To the extent any amendments or modifications to the Company’s bylaws are required to effect the appointment as Chairman of the Board, such amendments or modifications shall be executed and effected by the Company promptly and not unreasonably delayed. Nothing herein shall limit the Shareholders’ rights to vote for Diepholz as a member of the Board of Directors or to extend his term as Chairman of the Board.
1.4.Duties and Responsibilities of Chairman of the Board as a non-executive Chairman. As Chairman of the Board, Diepholz shall have no duties or responsibilities for the day to day management or leadership of the Company. As Chairman of the Board, Diepholz shall have no right to bind the Company except through action of the Board of Directors on matters that are properly brought before the Board in accordance with the bylaws of the Company and in accordance with applicable federal or Delaware law.
Diepholz’s duties as Chairman of the Board are significant but exclude the day to day management of the Company. Generally, Diepholz’s duties as Chairman of the Board are as follows:
-Solicit Board meeting agenda items from the Board of Directors and work with Chief Executive Officer to finalize agenda for the Company’s Board of Directors meetings;
-Coordinate with Company to carry out procedural and administrative functions of the Company’s Board meetings;
-Coordinate with the Company on written resolutions of the Board of Directors;
-Moderate the Board Meetings and the Executive Sessions at Board meetings;
-Substantively participate in meetings of the Board of Directors along with other participants;
-Coordinate with other Board members to provide performance feedback for the Chief Executive Officer and any other designated members of the management team (provided that other Board members or the full Board may also provide feedback as they deem appropriate);
-As requested by the Company participate in investigations, exercises or issue analysis if requested by the Chief Executive Officer; and
-Following the expiration of the Transition Period discussed in Section 1.2 above, Diepholz shall be available on reasonable request to provide counsel and advice requested by the Chief Executive Officer (depending on the particular situation and the nature of the particular request this specific activity may be performed as an individual or in coordination with other members of the Board of Directors).
It is a specific and significant requirement of this Agreement that except for Transition Services and similar requests by the Chief Executive Officer, Diepholz’s involvement in the ongoing
business of the Company shall be as one of the several members of the Board of Directors rather than as an individual acting separately from the Board.
The appointment of Diepholz as Chairman of the Board shall not entitle him to be chairman of any committees of the Board.
It is expressly agreed and understood that unless specifically requested by the Company, Diepholz shall not be involved in, nor shall he seek to be involved in, day to day decisions or operations of the Company’s business. Examples of day to day decisions or operations of the Company’s business referenced in the preceding sentence include, but are not limited to, personnel decisions, decisions to enter or withdraw from certain lines of business, decisions to be made in response to business risks or business opportunities; and decisions as to the deployment of capital, physical resources or personnel.
The Parties recognize that the role of Diepholz as Chairman of the Board of Directors is a new role and that expectations and understandings concerning that role will continue to be developed and refined as the Parties gain experience with the non-executive chairman role. As such, should the Company have concerns that Diepholz is acting inconsistently with the duties and directives set forth above, the Company will attempt to provide feedback to Diepholz. Accordingly, Diepholz agrees to listen to and be guided by such feedback.
Should the Chief Executive Officer of the Company and the majority of the Board of Directors vote to determine that either: 1) Diepholz is involving himself or attempting to involve himself in the day to day management or leadership of the Company in a manner that is inconsistent with the duties and directives set forth in this Section, or 2) Diepholz is not constructively responding to any feedback that may be provided concerning expectations for the role of Chairman of the Board, as expressly provided in this Section 1.4 , such determination may constitute a breach of this Agreement, in which case the Company shall provide written notice to Diepholz and a fifteen (15) day opportunity to cure such breach. In the event that any such alleged breach is not cured within fifteen (15) days, such shall be grounds for removal from the position of Chairman of the Board or removal from the Board of Directors pursuant to the Director removal provisions of the Company’s bylaws. For purposes of clarity it is agreed and understood that the Company shall only be required to provide three (3) such notices and opportunities to cure for conduct identified in items 1) or 2) of the first sentence of this paragraph.
1.5.Initial Term as Chairman of the Board and ability to stand for subsequent terms on the Board of Directors. As soon as practical following the execution of this Agreement, Diepholz shall be appointed Chairman of the Board and the Initial Term for such appointment shall be the later of: 1) a period of one (1) year from the Date of this Agreement, or 2) until the 2025 annual meeting of shareholders. After the Initial Term as Chairman of the Board Diepholz may, at his
option, stand for election to the Board of Directors in a manner consistent with Company bylaws and applicable federal law or Delaware law. In the event Diepholz continues to serve as a member of the Board of Directors following the Initial Term, and if the Board decides to continue utilizing the non-executive chairman role after the expiration of the Initial Term, Diepholz may, at his option seek to be selected to the position of non-executive chairman in a manner consistent with the Company’s then current bylaws.
1.6.Nomination of Tayler Diepholz in the event of certain contingencies. Upon exiting the role as non-executive chairman upon expiration of the Initial Term, or resignation from the Board of Directors, or other reasons except a “for cause” termination as defined below in Section 5, in addition to certain severance benefits payable to Diepholz, the Company shall nominate Tayler Diepholz as a regular member of the Board of Directors for a term not to extend beyond December 31, 2026. By separate letter agreement shareholders Ocean Partners and Golden Post have agreed to support and vote for Tayler Diepholz in the event of this contingency. PROVIDED HOWEVER, that in the event Diepholz is removed from the Board or removed from the position of Chairman of the Board for “cause”, as expressly defined herein, then the Company shall not be required to nominate Tayler Diepholz. PROVIDED FURTHER, that this Section 1.6 shall not be construed or interpreted to require the nomination of Tayler Diepholz as set forth herein so long as K.D. Diepholz remains on the Board.
1.7.Equity Grant Number 1 to Vest on Effective Date. Diepholz received a restricted stock grant of 700,000 Company shares on December 28, 2022 and the Parties agree that those share shall vest as of the Effective Date of this Agreement.
1.8.Chairman Emeritus Designation. Subject to compliance with the terms of this Agreement, whenever Diepholz ultimately rotates off of the Board of Directors for any reason other than termination for cause, death or disability, Diepholz shall be then designated by the Company as “Chairman Emeritus”. The title “Chairman Emeritus” is an non-compensated honorary position that has no governance, oversight or other substantive role. However, subject to the provisions of this Agreement, if so appointed Diepholz can publicly represent himself as “Chairman Emeritus” and hold himself out as “Chairman Emeritus” because the Company has recognized Diepholz’s many contributions to the development and maturation of the Company.
2.Post Employment Compensation and Benefits. If Diepholz timely signs and complies with the terms of this Agreement, including execution of a release of claims attached as Appendix A of this Agreement, and in exchange for the mutual promises contained in this Agreement, Company will provide Diepholz with the compensation set forth below.
2.1.Annual Compensation for Diepholz’s Service on the Board of Directors. In lieu of any other compensation generally payable to directors on the Company’s Board of Directors, and subject to the other provisions of this Agreement, Diepholz shall receive the following amounts payable in USD as annual compensation for his Board service:
2024: $150,000 ($300,000 salary * 6/12 for July 1-December 31, 2024)
2025: $325,000
2026: $350,000
Payments of the compensation for Board Service shall be paid monthly basis and payments shall be paid within fifteen (15) days of the last day of the month when such compensation was earned. It is mutually recognized that this compensation for Board Service is contingent upon continued service on the Board of Directors and is not in the nature of an employment severance payment.
2.2.Annual Bonus. So long as Diepholz remains on the Board of Directors he shall be eligible to receive an annual bonuses on the following schedule:
2023: 186,355 shares of Company stock.
2024: $100,000 USD worth of shares of Company stock according to the determination of share price based on December 2024 VWAP share price.
2025: $100,000 USD worth of shares of Company stock according to the determination of share price based on December 2025 VWAP share price.
2026: $100,000 USD worth of shares of Company stock according to the determination of share price based on December 2026 VWAP share price.
Annual bonuses are generally payable in the year following the year they are earned. Diepholz’s annual bonus shall be awarded at a date or time to generally coincide with the Company’s payment of other annual bonuses but generally no later than March 31st of the year following the year the bonus was earned. PROVIDED HOWEVER, that the Company shall make reasonable efforts to pay the 2026 bonus on or before January 31, 2027.
Diepholz’s 2023 bonus is already earned and vested.
2.3.Conditional Share Grant Number 2: Diepholz will receive the 500,000 shares previously contemplated and referenced as “Grant 2” conditioned upon: 1) continued service on the Company’s Board of Directors or as Chairman Emeritus, and 2) the issuance of a third party 43-101 compliant technical report (I.e. a PEA/PFS/BFS) demonstrating a minimum of two million (2,000,000) economically viable ounces of gold from operations of the Company so long as this report is issued before December 31, 2026.
2.4.Effect of Company Bankruptcy on the Agreement’s Compensation Provisions. The compensation described in Section 2.1 above and the shares described in Sections 2.2 and 2.3 above are “at risk” and notwithstanding the stated values or specific amounts associated with this compensation amounts, bonuses or grants, these anticipated payments or grants are not unconditionally guaranteed. In the event of Company bankruptcy, insolvency or ceasing to do
business as a going concern, Diepholz shall be treated as an unsecured creditor with respect to these compensation amounts or anticipated award of shares.
2.5.Payment of any other earned, accrued or otherwise owed compensation or reimbursements. Within twenty one (21) calendar days of the Separation Date Diepholz shall be paid any unpaid earned salary, earned but unused vacation or reimbursable expenses that accrued prior to the Separation Date.
2.6.COBRA Payments. If Diepholz timely elects to continue his group health, dental, and/or vision insurance under the Company’s plans pursuant to terms of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), Company will pay on his behalf the monthly premium costs for such coverage for twelve (12) months following the Separation Date or until Diepholz becomes eligible for group health insurance coverage due to subsequent employment or otherwise and notifies Company within five (5) business days of such eligibility, whichever is sooner. In the event Diepholz opts for these COBRA coverage the Company will pay the monthly COBRA premium amounts directly to the insurance administrator for the earlier of the three months just described or until Diepholz becomes eligible for other health insurance coverage.
2.7.Cessation of Participation in all other employee or officer compensation programs or benefit programs. Except as expressly set forth in this Agreement, following the Separation Date, Diepholz shall cease to be eligible to participate in any of the Company’s existing or future compensation or benefit plans for officers or employees including but not limited to: 1) employee salary; 2) the “Discretionary Bonus” plan; 3) the “Annual Bonus” plan; 4) any long term equity compensation; 5) any other long term compensation plan; 6) any and all of the Company’s welfare benefit plans such as any medical benefit plans, dental or vision benefit plans, vacation plans or other paid leave benefit plans; and 7) any and all of the Company’s retirement benefit plans and programs. As of the Separation Date Director shall be ineligible for reimbursement of expenses under any of the Company’s written policies relating to employee business-related expenses. PROVIDED HOWEVER, that the provisions of this Section shall not affect any vested rights under the aforementioned plans. PROVIDED FURTHER, that except for monetary compensation for Board service, which for Diepholz shall be limited to the Annual Compensation for Board Services described in Section 2.1 and 2.2 above, so long as Diepholz remains a member of the Board of Directors he shall otherwise be entitled to any other benefits or plans generally available to other Board members. A hypothetical example is provided for illustration purposes only to put the preceding sentence in context: If the Company adopted a plan or program for Board members allowing for Board members to travel at Company expense to the Company’s operations in Mexico, then so long as Diepholz remained a member of the Board of Directors, Diepholz would also be eligible to travel at Company expense to its Mexico operations (again, this is a hypothetical example for illustrative purposes only).
2.8. Conditions for Any Severance Payment. Notwithstanding any plan, program or practice of the Company with respect to severance payments, in light of the mutual promises and other consideration contained in this Agreement so long as Diepholz remains on the Company’s Board of Directors it is expressly agreed and understood that Diepholz is not entitled to any severance payment. However, should Diepholz rotate off of the Board, resign from the Board or be removed from the Board for certain reasons specified in Section 5 below prior to December 31, 2026, then the Compensation for Board Service may be terminated and the Severance amounts described in Section 5 may become due and payable according to the terms of Section 5.
2.9.Deductions; Tax Withholdings. All compensation payable to Diepholz under the terms of this Agreement shall be subject to any applicable income or other tax withholding requirements.
2.10.Section 409A Compliance. This Agreement is intended to comply with Internal Revenue Code Section 409A and any corresponding regulations and guidance promulgated thereunder (“Section 409A”), or an exemption thereto. The Compensation for Board Service amounts described above in Section 2.1 of the Agreement are not contemplated or anticipated to be subject to Section 409A, or they are intended to be exempt from Section 409A to the maximum extent applicable. Notwithstanding the foregoing, the Company makes no representations whatsoever as to the tax treatment of the Compensation for Board Service or any other compensation or payments under this Agreement. To the extent that any amounts payable in accordance with this Agreement are subject to Section 409A, this Agreement shall be interpreted and administered in such a way as to comply with Section 409A to the maximum extent possible. If payment of any amount subject to Section 409A is triggered by the separation from employment that occurs on the Separation Date and if Diepholz deemed a “specified employee” for purposes of Section 409A, such that the payment of any amounts under this Agreement is required to be delayed for a period of six months after the Separation Date, then payment of such amounts shall be delayed as required by Section 409A. In the event of Diepholz’s death during the aforementioned six-month period but prior to the payments in question, then any amounts withheld on account of Section 409A shall be paid to the personal representative of Diepholz’s estate within sixty (60) days after the date of his demise.
Nothing in this Agreement shall be construed as a guarantee of any particular tax treatment to Diepholz. It is acknowledged and agreed that Diepholz shall be solely responsible for the tax consequences with respect to all amounts payable under this Agreement, and in no event shall the Company have any responsibility or liability if any or all of the compensation to be paid to Diepholz under this Agreement does not meet any applicable requirements for exemption or exclusion from Section 409A.
2.11. Office Facilities. So long as Diepholz remains Chairman of the Board, Diepholz shall be provided with office space and certain administrative support. It is expressly agreed and
understood that the use of these office facilities and support services will be for purposes that are not inconsistent with the role of non-executive chairman of the Company. It is further agreed and understood that the use of Company provided office facilities and support shall cease when Diepholz ceases to be Chairman of the Board and that the position of Chairman Emeritus shall not entitle Diepholz to the use of Company provided office facilities or administrative support.
2.11.This Agreement Supersedes Prior Agreements. This Agreement expressly amends, replaces and supersedes all other agreements with or representations by the Company with respect to Diepholz’s employment including, but not limited to, the employment agreement between the Company and Director dated April 19, 2023 and any of Company’s compensation plans, programs or previously awarded compensation.
3.Continuing Obligations and Commitments of Diepholz.
3.1. Cooperation; Assistance. During the term of this Agreement and thereafter, Director agrees to cooperate fully with the Company or any subsidiary and its or their counsel with respect to any matter (including any litigation, investigation or governmental proceeding) which relates to matters with which Diepholz was involved or about which he had knowledge concerning the Company or any subsidiary. Such cooperation shall include appearing from time to time at the offices of the Company or any subsidiary or its or their counsel for conferences and interviews and, in general, providing the officers of the Company or any subsidiary and its or their counsel with the full benefit of Diepholz’s knowledge with respect to any such matter. Diepholz further agrees to render such cooperation in a timely fashion and at such times as may be mutually agreeable to the parties. PROVIDED HOWEVER, that the obligations described in this Section 3.1 are subject to reimbursement by the Company of reasonable out of-pocket costs and expenses (including reasonable attorney fees).
3.2 Protection of Confidential Information. Diepholz acknowledges and agrees that:
(a) by reason of his prior employment with the Company, his service as an officer of the Company, and/or his service as Director or as Chairman of the Board, he will have knowledge of all aspects of the Company’s operations including confidential and secret proprietary business information and trade secrets of the Company, including but not limited to:
(i) information regarding the Company’s business priorities and strategic plans;
(ii) information regarding the Company’s personnel;
(iii) financial and marketing information (including but not limited to information about costs, prices, profitability and sales information not available outside the Company);
(iv) secret and confidential plans for and information about new or existing services, and initiatives to address the Company’s competition;
(v) information regarding customer relationships; and
(vi) proprietary or Confidential Information of customers or suppliers for which the Company may owe an obligation not to disclose such information.
(all such information shall be collectively referred to as “Confidential Information”);
(b) the Company and its subsidiaries, affiliates and divisions will suffer substantial and irreparable damage that will not be compensable through money damages if Diepholz should divulge or make use of Confidential Information acquired in the course of his employment with the Company and service to the Board (other than as may be appropriate in connection with Diepholz’s service with the Company); and
(c) the provisions of this Agreement are reasonable and necessary for the protection of Confidential Information, the business of the Company and its subsidiaries, affiliates and divisions, and the stability of their workforces.
(d) except as may be required or appropriate in connection with Diepholz’s service with the Company, Diepholz shall keep confidential all Confidential Information regarding the Company, its business, operations, systems, employees and customers. In addition, Diepholz agrees that he will not disclose Confidential Information obtained from the Company or its officers, directors or management to anyone other than as required by law or in response to a lawful court order or subpoena.
3.3. Witness Participation with Government Investigations. Nothing in this Agreement shall prohibit Diepholz from participating as a witness at the request of the Company or a third party in any investigation by any governmental agency charged with the investigation of any matters related to the Company, nor shall Diepholz be prohibited from testifying in response to a subpoena, court order or notice of deposition. Diepholz agrees to notify the Company’s General Counsel, in writing, at least ten (10) days prior to the response deadline or appearance date (whichever is earlier) for any such subpoena, court order or notice of deposition issued by a court or investigating agency which seeks disclosure of any Confidential Information, or as much notice as feasible if the response deadline or appearance date is less than ten (10) days from the date of Diepholz’s receipt of any such subpoena, court order or notice of deposition. Diepholz further agrees to take any actions reasonably requested by the Company to allow the Company to protect the release of information in such court or agency proceeding regarding Diepholz’s employment or other service with the Company.
3.4. Limitations on Use of Company Materials.
Diepholz agrees that:
(a) he will not, at any time, remove from the Company’s premises any notebooks, software, data or other Confidential Information relating to the Company, except to the extent necessary or appropriate to perform his duties and responsibilities under the terms of this Agreement;
(b) prior to the Separation Date Diepholz shall deliver to the Company any and all notebooks, software, data and documents and material, including all copies thereof, in his possession or under his control relating to any Confidential Information, or which is otherwise the property of the Company; and
(c) Diepholz will not use any Confidential Information for any purpose except as necessary for service on the Board of Directors and ii) as approved by the Company.
3.5 Mutual Non-Disparagement Obligation. Diepholz agrees that he will not at any time make, publish, or communicate to any person or entity or in any public forum defamatory or disparaging remarks, comments, or statements concerning Company or the Company’s subsidiaries, officers, employees or affiliates. In executing this Agreement, Diepholz acknowledges and agrees that he has knowingly, voluntarily, and intelligently waived any free speech, free association, free press, or First Amendment to the United States Constitution (including, without limitation, any counterpart or similar provision or right under the Constitution of any State) rights to disclose, communicate, or publish any statements prohibited by this Section 3.5.
The Company also agrees that it will not make, publish, or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments, or statements concerning Diepholz.
The provisions of this Section 3.5 shall not apply to any action to enforce the terms of this Agreement. Nor shall the provisions of this Agreement preclude truthful responses to either Party’s participation in government investigations or other legal proceedings as set forth above.
The provisions of this Section 3.5 shall not apply to truthful statements by either Party that are communicated to the other Party with respect to the performance of duties, responsibilities, or other legitimate business related to the Company and its subsidiaries or related to Diepholz’s services for the Company or pursuant to this Agreement.
4.Non-Competition and Non-Solicitation Commitments of Diepholz.
4.1. Acknowledgements. Diepholz acknowledges that, by virtue of his various positions and service with the Company, Diepholz has acquired significant Confidential Information about the Company and its existing and future plans and strategies. As a result, Diepholz acknowledges that the Company has a legitimate business interest supporting the restrictive covenants set forth in this Section 4.
4.2. Covenants. During Diepholz’s continued tenure on the Board of Directors and for one (1) year following the date Diepholz shall cease to be a Board member for any reason, Diepholz shall not in any manner, directly or indirectly, within the United States or Mexico:
(a) act as a Competitive Enterprise (as defined below) or accept any engagement in any capacity that involves Diepholz performing management, consultation, advisory, sales, or other services of any kind with or for a Competitive Enterprise, directly or indirectly;
(b) solicit (as defined below) any Customer (as defined below) to transact business with a Competitive Enterprise or to reduce or refrain from doing any business with the Company or any of its subsidiaries;
(c) transact business with any Customer that would cause Diepholz to be a Competitive Enterprise;
(d) interfere with or damage any relationship between the Company or any its subsidiaries with a Customer; or
(e) Solicit anyone who is then an employee of the Company or any of its subsidiaries (or who was an employee of the Company or any of its subsidiaries within the prior six months) to resign from the Company or any of its subsidiaries or to apply for or accept employment with any other business or enterprise.
4.3. Certain Definitions. For purposes of this Section 4, the following terms shall have meanings set forth in this Section 4.3:
(a) ”Competitive Enterprise” means any business enterprise anywhere in the United States or Mexico that either (A) engages in a business that competes with any business in which the Company or any of its subsidiaries is then engaged; or (B) holds a greater than 5% equity, voting or profit participation interest in any enterprise in the United States or Mexico that competes with or is in the same business as any business or business activity that the Company or any of its subsidiaries is then engaged in. PROVIDED HOWEVER, that if: (i) the Company, including any subsidiary, ceases or and exits, a particular type of business activity, then following such exit the Company and its subsidiaries will be deemed not to be “then engaged” in such business; or (ii) the Company, including any of its subsidiaries, was not engaged in a particular type of business activity (and was not contemplating such business activity), while Diepholz was employed by or serving as a Director for the Company, then for the purposes of this Agreement, the Company and its subsidiaries will be deemed not to be “then engaged” in such business.
(b) “Customer” means any customer or prospective or potential customer of the Company or any of its subsidiaries whose identity became known to Diepholz in connection with Diepholz’s relationship with or employment by the Company or any of its subsidiaries and who may be a customer within 12 months after the termination of this Agreement.
(c) “Solicit” means any direct or indirect communication of any kind, regardless of who initiates it, that in any way invites, advises, encourages or requests any person to take or refrain from taking any action.
4.Removal or Resignation from Company’s Board of Directors.
4.1.Removal of Diepholz from the Company’s Board of Directors for Cause. During the term of this Agreement the Company shall have the right, subject to the terms of this Agreement and the Company’s bylaws, to initiate activity by the Company’s Board of Directors to remove Diepholz from the Board of Directors for cause (as defined below).
4.2.Removal of Diepholz from the Company’s Board of Directors if not Elected to the Board. Following the Initial Term as defined in Section 1.5 above, Diepholz may, at his option, stand for election to the Board of Directors in a manner consistent with Company bylaws and
applicable federal law or Delaware law. If for any reason Diepholz is not elected to the Board of Directors after the Initial Term, Diepholz shall be removed from the Board of Directors.
4.3.Resignation from the Company’s Board of Directors by Diepholz . Diepholz shall have the right, subject to the terms of this Agreement, to resign his position on the Company’s Board of Directors at any time, for any reason or for no reason.
4.4.Disability. If Diepholz shall suffer a Disability (as defined below), the Company shall then have the right to initiate proceedings under the Company’s bylaws to remove Diepholz from the Board of Directors.
4.5.Effect of Removal from Company’s Board of Directors.
(a)Removal by the Company for Cause. In the event of the removal of Diepholz from the Board of Directors for Cause in accordance with the bylaws of the Company and this Agreement, Diepholz shall forfeit or be otherwise ineligible for any of the remaining and unpaid compensation set forth in Section 2 above and shall not be eligible for any Severance Payment as described below.
(b)Removal from the Board of Directors for Situations that are not for Cause. In the event Diepholz: 1) resigns from the Board; 2) rotates off of the Board; 3) does not stand for election or is otherwise not reelected to the Board; 4) is removed from the Board by the Company or its Successor without Cause; 5) is removed from the Board by reason of Diepholz’s death or Disability, then in such case Diepholz (or, in the case of death, his beneficiary, heir or estate) shall not be entitled to any additional unpaid Compensation for Board Service as set forth in Sections 2.1 and 2.2 above.
However, in the event Diepholz is removed from the Board for any of the Situations that are not for Cause as delineated immediately above, then in such case Diepholz (or, in the case of death, his beneficiary, heir or estate) shall be entitled to certain “Severance Payments”.
(c) Calculation of Any Required Severance Payments. The amount of such Severance Payments shall be determined according to: 1) the amounts set forth below (which are intended to mirror certain contemplated compensation in Section 2.1 and Section 2.2 above); 2) the date of such removal from the Board of Directors; and 3) by the amounts of compensation already earned and paid under Section 2 above. The calculation of any Severance Payment shall be based on and reflect the remaining anticipated Annual Compensation for Board Service under Section 2.1, and the Annual Bonus for Board Service under Section 2.2 that Diepholz did not receive based on his removal from the Board for reasons other than Cause. The amounts reflective of the specified compensation for Board Service for the Term of this Agreement are as follows:
2024: $250,000 ( one half of $300,000 board service comp + 100,000 annual bonus and assumes the $300,000 in shares annual bonus for 2023 already paid);
2025: $425,000 ($325,000 Board service comp + $100,000 annual bonus for 2024);
2026: $550,000 ($350,000 Board service comp. + $100,000 annual bonus for 2025 + $100,000 annual bonus for 2026);
In the calculation of any required Severance Payments there is to be no “double counting” or pyramiding of the specified compensation attributable to any given year. For example, at the end of the Term on December 31, 2026 if all of the specified compensation under Section 2.1 and 2.2 has already been paid, then no Severance Payment is due. For another example, if removal from the Board for reasons other than Cause occurred on January 1, 2026 and all Section 2.1 Compensation for Board Service and the 2024 Annual Bonus was paid in 2025, then the Severance Payment would be $550,000 reflecting $350,000 annual compensation for Board Service in 2026 and the $100,000 Annual Bonus earned in 2025 but not yet paid and the $100,000 Annual Bonus for 2026).
Subject to Section 2.10 above, and subject to Diepholz’s continued compliance with the various commitments and conditions contained in this Agreement, the Severance Payments shall be paid either as a lump sum or ratably in United States Dollars (rather than shares) on a basis no less frequently than monthly and payment shall be made within fifteen (15) days of the close of each month for which Severance is payable. Whether any severance is paid in a lump sum or periodically as set forth above is to be determined by the Company.
4.6.Conditions of Severance Payment. Any Severance Payments made or provided in connection with the removal of Diepholz from the Board of Director’s for reasons other than for Cause are subject to Diepholz continued compliance with all applicable provisions of this Agreement, including the restrictive covenants identified in Sections 3 and 4 of this Agreement.
4.7.Certain Definitions. For purposes of this Section 5, the following terms shall have meanings set forth in this Section 5.7.
(i)Diepholz’s failure to abide by the terms of this Agreement or Diepholz’s breach of this Agreement including, but not limited to the circumscribed Duties and Responsibilities as non-executive Chairman as set forth in Section 1.4 above subject to the notice and opportunity to cure provisions therein;
(ii)Diepholz’s failure to perform (other than as a result of Executive’s Disability) or substantial neglect in the performance of duties as non-executive chairman of the Company under Section 1.4 of this Agreement,
or any applicable Delaware or federal law, or the willful failure to comply with any valid and legal directives provided by the Company or the Board.
(iii)Conviction of or plea of nolo contendere to a felony;
(iv)any act of fraud, theft, embezzlement, or gross negligence by Diepholz;
(v)material dishonesty, breach of fiduciary duty, or misconduct in performance of Diepholz duties on the Company’s Board of Directors;
(vi)Diepholz’s material violation of the Company’s written policies or codes of conduct that are applicable to all of its Directors, including written policies related to discrimination, harassment, performance of illegal or unethical activities, and ethical misconduct;
(b)“Disability” shall mean any physical or mental incapacity as a result of which Diepholz is unable to perform substantially all of his essential duties as a member of the Company’s Board of Directors.
The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Diepholz to compensation from the Company, including any Separation Pay, in the same amount and on the same terms as he would be entitled to hereunder if the Company had removed Diepholz from the Board without Cause as of the day immediately before such succession became effective. As used in this Section “Company” shall mean the Company as defined in the first sentence of this Agreement and any successor to all or substantially all its business or assets or which otherwise becomes bound by all the terms and provisions of this Agreement, whether by the terms hereof, by operation of law or otherwise. PROVIDED HOWEVER, that the Company’s commitments under this Section shall only apply to the economic terms of this Agreement and the Company makes no representations or promises with respect to Diepholz’s ongoing role, if any, on the Board of Director’s following any successor’s completion of a direct or indirect Change in Control whether by purchase, merger, consolidation or otherwise.
If Diepholz commits a breach, or threatens to commit a breach, of any of the provisions of Section 4 or 5 of this Agreement, the Company shall have the right and remedy (which shall be in
addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity) to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction without posting a bond or proving irreparable injury, it being acknowledged by Diepholz that any such breach or threatened breach will or may cause irreparable injury to the Company and that money damages will or may not provide an adequate remedy to the Company.
The provisions of this Agreement shall be effective as of the Effective Date and shall continue in force until December 31, 2026 (the “Term”) unless earlier terminated as provided in Section 5. PROVIDED HOWEVER, that certain items of this Agreement such as the expiration of the Initial Term as Chairman of the Board will occur prior to December 31, 2026.
8.1.Benefit of Agreement, Assignment; Beneficiary. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. This Agreement shall also inure to the benefit of, and be enforceable by, Diepholz and his personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
8.2.Notices. Any notice required or permitted under this Agreement shall be in writing and shall be sufficiently given if personally delivered or if sent by certified mail, postage prepaid, with return receipt requested or by reputable overnight courier, addressed: (a) in the case of the Company, to the General Counsel of the Company at the Company’s then-current corporate headquarters, and (b) in the case of Diepholz, to his last known address as reflected in the Company’s records, or to such other address as either party shall designate by written notice to the other party. Any notice given hereunder shall be deemed to have been given at the time of receipt thereof by the person to whom such notice is given if personally delivered or at the time of mailing if sent by certified mail or by courier.
8.3.Entire Agreement; Amendment. Except as specifically provided in this Agreement, this Agreement contains the entire agreement of the parties to this Agreement with respect to the terms and conditions of Diepholz’s employment, cessation of employment, continuing service as a member of the Board of Directors, and other commitments throughout the Term of the Agreement . This Agreement supersedes all prior agreements and understandings, whether written or oral, between the parties with respect to compensation due for services rendered as an employee, officer or Director of Company. For the avoidance of doubt, in the event of any inconsistency between this Agreement and any plan, program or arrangement of the Company or its affiliates, the terms of this Agreement shall control. This Agreement may not be changed or modified except by an instrument in writing signed by both of the Parties.
8.4.Confidential Nature of this Agreement. Diepholz understands and agrees that, except as required or specifically permitted by law, neither Diepholz nor Company shall disclose the terms of this Agreement to any person or entity; except that Diepholz or Company may disclose the existence and terms of this Agreement to any legal counsel, financial advisor, or tax preparer, and Diepholz may disclose the Agreement’s existence and terms to Diepholz’s immediate family members, religious advisor, medical or mental health provider, if any, and/or mental or behavioral health therapeutic support group, if any. Diepholz and Company agree that any person to whom disclosure is permitted shall be told of these confidentiality obligations. PROVIDED HOWEVER, that notwithstanding the confidential nature of the terms of this Agreement, the existence of the Agreement and certain limited provisions may need to be disclosed in accordance with the material event disclosure rules of the Securities and Exchange Commission.
8.5.Waiver. The waiver of either party of a breach of any provision of this Agreement shall not operate or be construed as a continuing waiver or as a consent to or waiver of any subsequent breach.
8.6.Headings. The section headings in this Agreement are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or affect any of the provisions of this Agreement.
8.7.Governing Law. This Agreement shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of Texas, without reference to the principles of conflicts of laws.
8.8.Survivorship. The respective rights and obligations of the Parties under this Agreement shall survive any termination of this Agreement to the extent necessary to effectuate the intended preservation of such rights and obligations, including, without limitation, Sections 3 and 4 of this Agreement.
8.9.Validity. The invalidity on unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision or provisions of this Agreement, which shall remain in full force and effect. If any provision of this is held to be invalid, void or unenforceable, any court so holding shall substitute a valid, enforceable provision that preserves, to the maximum lawful extent, the terms and intent of this Agreement.
8.10.Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state or local statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” shall mean including without limitation.
8.11.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which will constitute one and the same instrument. The parties agree that electronic signatures, including signatures delivered in PDF format, by DocuSign, or in any other electronic format, shall constitute originals for all purposes.
[Signature page follows]
IN WITNESS WHEREOF, each of the parties has duly executed this Agreement on the date first set forth above.
Dynaresource, Inc.
By: /s/ Phillip Rose
Mr. Phillp Rose
Independent Director and Chairman of Audit Committee
Koy W. “K.D.” Diepholz, Member of the Company’s Board of Directors and referred to as “Diepholz” for purposes of this Agreement.
By: /s/ K.D. Diepholz
Mr. K.D. Diepholz, Individually
19
DOCPROPERTY "DOCID" * MERGEFORMAT #503514859_v1 If numpages 21 = 1 DOCPROPERTY "DOCID" * MERGEFORMAT ""
Appendix A
Release of Claims
1.Diepholz does not believe that the Company or any of the Company’s parent companies, affiliates, subsidiaries, or any of their respective representatives, officers, directors, agents, attorneys, or employees (collectively, the “Released Parties”) bear any liability to Diepholz arising out of the employment relationship, the circumstances under which that relationship is being terminated, or any other matter. Nevertheless, for the avoidance of any doubt or controversy in the future, and in consideration of the Parties’ promises, covenants, and agreements set forth herein, Diepholz, individually and for his heirs, successors, administrators, and assignees, (collectively, the “Diepholz representatives”) hereby UNCONDITIONALLY RELEASES, DISCHARGES, AND FOREVER EXTINGUISHES ANY AND ALL CLAIMS LIABILITIES, DEMANDS AND CAUSES OF ACTION Diepholz may have or have had against the Company and/or any of the Released Parties for any matter, whether known or unknown, based on facts existing or arising prior to the Effective Date, including but not limited to all claims and liabilities relating to Diepholz’s employment with the Company and the termination of Diepholz’s employment relationship with the Company. It is agreed that this is a general release and it is to be broadly construed as a release of all claims, except those that cannot be released by law. By signing this Agreement, Diepholz acknowledges that he is doing so knowingly and voluntarily. Diepholz also represents that Employee has not transferred or assigned, to any person or entity, any claim that Diepholz is hereby releasing.
2.Without limitation of the foregoing general release, Diepholz expressly acknowledges that this release shall apply to any and all claims, including but not limited to claims for: personal injury; breach of contract; wrongful discharge; defamation; intentional infliction of emotional distress; tort; invasion of privacy; violation of public policy; negligence; discrimination by reason of race, sex, national origin, handicap, religion or age; and any claims arising from any alleged violation by the Company or any of the Released Parties of any federal, state, or local statutes (as such statutes exists or may be amended), regulations, ordinances or common law, including, but not limited to: the Age Discrimination in Employment Act; the Older Workers Benefit Protection Act; Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; 42 U.S.C. §1981; the Americans with Disabilities Act; ; the Employee Retirement Income Security Act; the Occupational Safety and Health Act;; the Family Medical Leave Act, and other similar state or local laws.
3.Based on Employee’s release of claims set forth in this Agreement, Diepholz understands that he is releasing all claims that Employee may have, as well as, to the extent permitted by applicable law, Employee’s right to recover monetary damages or obtain other relief that is personal to Diepholz in connection with any claim he is releasing under this Agreement.
4.The Company does not believe that Diepholz bears any liability to Company arising out of the employment relationship, the circumstances under which that relationship is being terminated, Diepholz’s performance of his usual and customary job duties as Chief
Executive Officer or any other matter arising out of Diepholz’s performance of job duties in the ordinary course of business. Nevertheless, for the avoidance of any doubt or controversy in the future, and in consideration of the Parties’ promises, covenants, and agreements set forth herein, the Company on behalf of any parent companies, affiliates, subsidiaries, or any of their respective representatives, officers, directors, agents, or attorneys hereby UNCONDITIONALLY RELEASES, DISCHARGES, AND FOREVER EXTINGUISHES ANY AND ALL CLAIMS LIABILITIES, DEMANDS AND CAUSES OF ACTION that Company has or may have against Diepholz for any matter arising out of related to Diepholz’s employment performance in the ordinary course of business that is based on facts currently existing or arising prior to the Effective Date.
5.Company and Diepholz acknowledge and agree that this release applies to claims that either currently exist, are already known, or could be known through the exercise of reasonable diligence. That is by signing and executing this release neither Diepholz nor the Company is releasing claims for alleged acts, omissions or breaches of contract that have not yet occurred.
6.Mutual Agreement Not To Sue. Except as expressly set forth in Section 5 above, Employee, for himself/herself and all Diepholz Representatives, and the Company on behalf of any parent companies, affiliates, subsidiaries, or any of their respective representatives, officers, directors, agents, attorneys, or employees agrees not to file or otherwise participate in any lawsuit, claim, complaint, or action of any nature whatsoever asserting against the Company or any of the Released Parties any claim released under this Agreement.
Dynaresource, Inc.
By: /s/ Phillip Rose
Mr. Phillp Rose
Independent Director and Chairman of Audit Committee
Koy W. “K.D.” Diepholz, Member of the Company’s Board of Directors and referred to as “Diepholz” for purposes of this Agreement.
By: /s/ K.D. Diepholz
Mr. K.D. Diepholz, Individually
DYNARESOURCE, INC. 2024
AMENDED AND RESTATED
EQUITY INCENTIVE PLAN
1.1General Purpose. The name of this plan is the DynaResource, Inc. 2024 Amended and Restated Equity Incentive Plan (the “Plan”). The purposes of the Plan are to (a) enable DynaResource, Inc., a Delaware corporation (the “Company”), and any Affiliate to attract and retain the types of Employees, Consultants and Directors who will contribute to the Company’s long range success; (b) provide incentives that align the interests of Employees, Consultants and Directors with those of the shareholders of the Company; and (c) promote the success of the Company’s business.
1.2Eligible Award Recipients. The persons eligible to receive Awards are the Employees, Consultants and Directors of the Company and its Affiliates and such other individuals designated by the Committee who are reasonably expected to become Employees, Consultants and Directors after the receipt of Awards.
1.3Available Awards. Awards that may be granted under the Plan include: (a) Incentive Stock Options, (b) Non-qualified Stock Options, (c) Stock Appreciation Rights, (d) Restricted Awards, (e) Performance Share Awards, (f) Cash Awards, and (g) Other Equity-Based Awards.
“Affiliate” means a corporation or other entity that, directly or through one or more intermediaries, controls, is controlled by or is under common control with, the Company.
“Applicable Laws” means the requirements related to or implicated by the administration of the Plan under applicable state corporate law, United States federal and state securities laws, the Code, any stock exchange or quotation system on which the shares of Common Stock are listed or quoted, and the applicable laws of any foreign country or jurisdiction where Awards are granted under the Plan.
“Award” means any right granted under the Plan, including an Incentive Stock Option, a Non-qualified Stock Option, a Stock Appreciation Right, a Restricted Award, a Performance Share Award, a Cash Award, or an Other Equity-Based Award.
“Award Agreement” means a written agreement, contract, certificate or other instrument or document evidencing the terms and conditions of an individual Award granted under the Plan which may, in the discretion of the Company, be transmitted electronically to any Participant. Each Award Agreement shall be subject to the terms and conditions of the Plan.
“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular Person, such Person shall be deemed to have beneficial ownership of all securities that such Person has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.
“Board” means the Board of Directors of the Company, as constituted at any time.
“Cash Award” means an Award denominated in cash that is granted under 1910 of the Plan.
“Cause” means:
With respect to any Employee or Consultant, unless the applicable Award Agreement states otherwise:
(a) If the Employee or Consultant is a party to an employment or service agreement with the Company or its Affiliates and such agreement provides for a definition of Cause, the definition contained therein; or
(b) If no such agreement exists, or if such agreement does not define Cause: (i) the commission of, or plea of guilty or no contest to, a felony or a crime involving moral turpitude or the commission of any other act involving willful malfeasance or material fiduciary breach with respect to the Company or an Affiliate; (ii) conduct that brings or is reasonably likely to bring the Company or an Affiliate negative publicity or into public disgrace, embarrassment, or disrepute; (iii) gross negligence or willful misconduct with respect to the Company or an Affiliate; (iv) material violation of state or federal securities laws; or (v) material violation of the Company’s written policies or codes of conduct, including written policies related to discrimination, harassment, performance of illegal or unethical activities, and ethical misconduct.
With respect to any Director, unless the applicable Award Agreement states otherwise, a determination by a majority of the disinterested Board members that the Director has engaged in any of the following:
(a) malfeasance in office;
(b) gross misconduct or neglect;
(c) false or fraudulent misrepresentation inducing the director’s appointment;
(d) willful conversion of corporate funds; or
2
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
(e) repeated failure to participate in Board meetings on a regular basis despite having received proper notice of the meetings in advance.
The Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to whether a Participant has been discharged for Cause.
“Change in Control” means:
(a) The direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its subsidiaries, taken as a whole, to any Person that is not a subsidiary of the Company;
(b) A majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election;
(c) The date which is 10 business days prior to the consummation of a complete liquidation or dissolution of the Company;
(d) The acquisition by any Person of Beneficial Ownership of 50% or more (on a fully diluted basis) of either (i) the then outstanding shares of Common Stock of the Company, taking into account as outstanding for this purpose such Common Stock issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise of any similar right to acquire such Common Stock (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this Plan, the following acquisitions shall not constitute a Change in Control: (A) any acquisition by the Company or any Affiliate, (B) any acquisition by any employee benefit plan sponsored or maintained by the Company or any subsidiary, (C) any acquisition which complies with clauses, (i), (ii) and (iii) of subsection (e) of this definition or (D) in respect of an Award held by a particular Participant, any acquisition by the Participant or any group of persons including the Participant (or any entity controlled by the Participant or any group of persons including the Participant); or
(e) The consummation of a reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company that requires the approval of the Company’s shareholders, whether for such transaction or the issuance of securities in the transaction (a “Business Combination”), unless immediately following such Business Combination: (i) more than 50% of the total voting power of (A) the entity resulting from such Business Combination (the “Surviving Company”), or (B) if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of sufficient voting securities eligible to elect a majority of the members of the board of directors (or the analogous governing body) of the Surviving Company (the “Parent Company”), is represented by the Outstanding Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is
3
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
represented by shares into which the Outstanding Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of the Outstanding Company Voting Securities among the holders thereof immediately prior to the Business Combination; (ii) no Person (other than any employee benefit plan sponsored or maintained by the Surviving Company or the Parent Company) is or becomes the Beneficial Owner, directly or indirectly, of 50% or more of the total voting power of the outstanding voting securities eligible to elect members of the board of directors of the Parent Company (or the analogous governing body) (or, if there is no Parent Company, the Surviving Company); and (iii) at least a majority of the members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) following the consummation of the Business Combination were Board members at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination.
“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time. Any reference to a section of the Code shall be deemed to include a reference to any regulations promulgated thereunder.
“Committee” means a committee of one or more members of the Board appointed by the Board to administer the Plan in accordance with 103.3 and 103.4.
“Common Stock” means the common stock, $0.01 par value per share, of the Company, or such other securities of the Company as may be designated by the Committee from time to time in substitution thereof.
“Company” means DynaResource, Inc., a Delaware corporation, and any successor thereto.
“Consultant” means any individual or entity which performs bona fide services to the Company or an Affiliate, other than as an Employee or Director, and who may be offered securities registerable pursuant to a registration statement on Form S-8 under the Securities Act.
“Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Consultant or Director, is not interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s Continuous Service; provided further that if any Award is subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent with Section 409A of the Code. For example, a change in status from an Employee of the Company to a Director of an Affiliate will not constitute an interruption of Continuous Service. The Committee or its delegate, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal or family
4
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
leave of absence. The Committee or its delegate, in its sole discretion, may determine whether a Company transaction, such as a sale or spin-off of a division or subsidiary that employs a Participant, shall be deemed to result in a termination of Continuous Service for purposes of affected Awards, and such decision shall be final, conclusive and binding.
“Deferred Stock Units (DSUs)” has the meaning set forth in 178.1(b) hereof.
“Director” means a member of the Board.
“Disability” means, unless the applicable Award Agreement says otherwise, that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment; provided, however, for purposes of determining the term of an Incentive Stock Option pursuant to 156.10 hereof, the term Disability shall have the meaning ascribed to it under Section 22(e)(3) of the Code. The determination of whether an individual has a Disability shall be determined under procedures established by the Committee. Except in situations where the Committee is determining Disability for purposes of the term of an Incentive Stock Option pursuant to 156.10 hereof within the meaning of Section 22(e)(3) of the Code, the Committee may rely on any determination that a Participant is disabled for purposes of benefits under any long-term disability plan maintained by the Company or any Affiliate in which a Participant participates.
“Disqualifying Disposition” has the meaning set forth in 2417.12.
“Effective Date” shall mean the date that the Company’s shareholders approve this Plan if such shareholder approval occurs before the first anniversary of the date the Plan is adopted by the Board.
“Employee” means any person, including an Officer or Director, employed by the Company or an Affiliate; provided, that, for purposes of determining eligibility to receive Incentive Stock Options, an Employee shall mean an employee of the Company or a parent or subsidiary corporation within the meaning of Section 424 of the Code. Mere service as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “employment” by the Company or an Affiliate.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fair Market Value” means, as of any date, the value of the Common Stock as determined below. If the Common Stock is listed on any established stock exchange or a national market system, including without limitation, the New York Stock Exchange, the Nasdaq Stock Market, or the Toronto Stock Exchange, the Fair Market Value shall be the closing price of a share of Common Stock (or if no sales were reported the closing price on the date immediately preceding such date) as quoted on such exchange or system on the day of determination, as reported by such exchange. In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Committee and such determination shall be conclusive and binding on all persons.
“Fiscal Year” means the Company’s fiscal year.
5
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
“Free Standing Rights” has the meaning set forth in 157.
“Good Reason” means, unless the applicable Award Agreement states otherwise:
(a) If an Employee or Consultant is a party to an employment or service agreement with the Company or its Affiliates and such agreement provides for a definition of Good Reason, the definition contained therein; or
(b) If no such agreement exists or if such agreement does not define Good Reason, the occurrence of one or more of the following without the Participant’s express written consent, which circumstances are not remedied by the Company within thirty (30) days of its receipt of a written notice from the Participant describing the applicable circumstances (which notice must be provided by the Participant within ninety (90) days of the Participant’s knowledge of the applicable circumstances): (i) any material, adverse change in the Participant’s duties, responsibilities, authority, title, status or reporting structure; (ii) a material reduction in the Participant’s base salary or bonus opportunity; or (iii) a geographical relocation of the Participant’s principal office location by more than fifty (50) miles.
“Grant Date” means the date on which the Committee adopts a resolution, or takes other appropriate action, expressly granting an Award to a Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in such resolution, then such date as is set forth in such resolution.
“Incentive Stock Option” means an Option that is designated by the Committee as an incentive stock option within the meaning of Section 422 of the Code and that meets the requirements set out in the Plan.
“Incumbent Directors” means individuals who, on the Effective Date, constitute the Board, provided that any individual becoming a Director subsequent to the Effective Date whose election or nomination for election to the Board was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for Director without objection to such nomination) shall be an Incumbent Director. No individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to Directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be an Incumbent Director.
“Non-Employee Director” means a Director who is a “non-employee director” within the meaning of Rule 16b-3.
“Non-qualified Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.
6
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
“Option” means an Incentive Stock Option or a Non-qualified Stock Option granted pursuant to the Plan.
“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.
“Option Exercise Price” means the price at which a share of Common Stock may be purchased upon the exercise of an Option.
“Other Equity-Based Award” means an Award that is not an Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, or Performance Share Award that is granted under 1910 and is payable by delivery of Common Stock and/or which is measured by reference to the value of Common Stock.
“Participant” means an eligible person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.
“Performance Goals” means, for a Performance Period, the one or more goals established by the Committee for the Performance Period based upon business criteria or other performance measures determined by the Committee in its discretion.
“Performance Period” means the one or more periods of time, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Performance Share Award or a Cash Award.
“Performance Share Award” means any Award granted pursuant to 199 hereof.
“Performance Share” means the grant of a right to receive a number of actual shares of Common Stock or share units based upon the performance of the Company during a Performance Period, as determined by the Committee.
“Permitted Transferee” means: (a) a member of the Optionholder’s immediate family (child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships), any person sharing the Optionholder’s household (other than a tenant or employee), a trust in which these persons have more than 50% of the beneficial interest, a foundation in which these persons (or the Optionholder) control the management of assets, and any other entity in which these persons (or the Optionholder) own more than 50% of the voting interests; (b) third parties designated by the Committee in connection with a program established and approved by the Committee pursuant to which Participants may receive a cash payment or other consideration in consideration for the transfer of a Non-qualified Stock Option; and (c) such other transferees as may be permitted by the Committee in its sole discretion.
7
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
“Person” means a person as defined in Section 13(d)(3) of the Exchange Act.
“Plan” means this DynaResource, Inc. 2024 Equity Incentive Plan, as amended and/or amended and restated from time to time.
“Related Rights” has the meaning set forth in 157.
“Restricted Award” means any Award granted pursuant to 168.
“Restricted Period” has the meaning set forth in 168.
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.
“Securities Act” means the Securities Act of 1933, as amended.
“Stock Appreciation Right” means the right pursuant to an Award granted under 157 to receive, upon exercise, an amount payable in cash or shares equal to the number of shares subject to the Stock Appreciation Right that is being exercised multiplied by the excess of (a) the Fair Market Value of a share of Common Stock on the date the Award is exercised, over (b) the exercise price specified in the Stock Appreciation Right Award Agreement.
“Stock for Stock Exchange” has the meaning set forth in 136.4.
“Substitute Award” has the meaning set forth in 124.6.
“Ten Percent Shareholder” means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of any of its Affiliates.
“Total Share Reserve” has the meaning set forth in 114.1.
3.1Authority of Committee. The Plan shall be administered by the Committee or, in the Board’s sole discretion, by the Board. Subject to the terms of the Plan, the Committee’s charter and Applicable Laws, and in addition to other express powers and authorization conferred by the Plan, the Committee shall have the authority:
(a)to construe and interpret the Plan and apply its provisions;
(b)to promulgate, amend, and rescind rules and regulations relating to the administration of the Plan;
(c)to authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;
8
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
(d)to delegate its authority to one or more Officers of the Company with respect to Awards that do not involve “insiders” within the meaning of Section 16 of the Exchange Act;
(e)to determine when Awards are to be granted under the Plan and the applicable Grant Date;
(f)from time to time to select, subject to the limitations set forth in this Plan, those eligible Award recipients to whom Awards shall be granted;
(g)to determine the number of shares of Common Stock to be made subject to each Award;
(h)to determine whether each Option is to be an Incentive Stock Option or a Non-qualified Stock Option;
(i)to prescribe the terms and conditions of each Award, including, without limitation, the exercise price and medium of payment and vesting provisions, and to specify the provisions of the Award Agreement relating to such grant;
(j)to determine the target number of Performance Shares to be granted pursuant to a Performance Share Award, the performance measures that will be used to establish the Performance Goals, the Performance Period(s) and the number of Performance Shares earned by a Participant;
(k)to amend any outstanding Awards, including for the purpose of modifying the time or manner of vesting, or the term of any outstanding Award; provided, however, that if any such amendment impairs a Participant’s rights or increases a Participant’s obligations under his or her Award or creates or increases a Participant’s federal income tax liability with respect to an Award, such amendment shall also be subject to the Participant’s consent;
(l)to determine the duration and purpose of leaves of absences which may be granted to a Participant without constituting termination of their employment for purposes of the Plan, which periods shall be no shorter than the periods generally applicable to Employees under the Company’s employment policies;
(m)to make decisions with respect to outstanding Awards that may become necessary upon a change in corporate control or an event that triggers anti-dilution adjustments;
(n)to interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan and any instrument or agreement relating to, or Award granted under, the Plan; and
(o)to exercise discretion to make any and all other determinations which it determines to be necessary or advisable for the administration of the Plan.
9
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
The Committee also may modify the purchase price or the exercise price of any outstanding Award, provided that if the modification effects a repricing, shareholder approval shall be required before the repricing is effective.
3.2Committee Decisions Final. All decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on the Company and the Participants, unless such decisions are determined by a court having jurisdiction to be arbitrary and capricious.
3.3Delegation. The Committee or, if no Committee has been appointed, the Board may delegate administration of the Plan to a committee or committees of one or more members of the Board, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated. The Committee shall have the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board or the Committee shall thereafter be to the committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. The members of the Committee shall be appointed by and serve at the pleasure of the Board. From time to time, the Board may increase or decrease the size of the Committee, add additional members to, remove members (with or without cause) from, appoint new members in substitution therefor, and fill vacancies, however caused, in the Committee. The Committee shall act pursuant to a vote of the majority of its members or, in the case of a Committee comprised of only two members, the unanimous consent of its members, whether present or not, or by the written consent of the majority of its members and minutes shall be kept of all of its meetings and copies thereof shall be provided to the Board. Subject to the limitations prescribed by the Plan and the Board, the Committee may establish and follow such rules and regulations for the conduct of its business as it may determine to be advisable.
3.4Committee Composition. Except as otherwise determined by the Board, the Committee shall consist solely of two or more Non-Employee Directors. The Board shall have discretion to determine whether or not it intends to comply with the exemption requirements of Rule 16b-3. However, if the Board intends to satisfy such exemption requirements, with respect to any insider subject to Section 16 of the Exchange Act, the Committee shall be a compensation committee of the Board that at all times consists solely of two or more Non-Employee Directors. Within the scope of such authority, the Board or the Committee may delegate to a committee of one or more members of the Board who are not Non-Employee Directors the authority to grant Awards to eligible persons who are not then subject to Section 16 of the Exchange Act. Nothing herein shall create an inference that an Award is not validly granted under the Plan in the event Awards are granted under the Plan by a compensation committee of the Board that does not at all times consist solely of two or more Non-Employee Directors.
3.5Indemnification. In addition to such other rights of indemnification as they may have as Directors or members of the Committee, and to the extent allowed by Applicable Laws, the Committee shall be indemnified by the Company against the reasonable expenses, including attorney’s fees, actually incurred in connection with any action, suit or proceeding or in connection with any appeal therein, to which the Committee may be party by reason of
10
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
any action taken or failure to act under or in connection with the Plan or any Award granted under the Plan, and against all amounts paid by the Committee in settlement thereof (provided, however, that the settlement has been approved by the Company, which approval shall not be unreasonably withheld) or paid by the Committee in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Committee did not act in good faith and in a manner which such person reasonably believed to be in the best interests of the Company, or in the case of a criminal proceeding, had no reason to believe that the conduct complained of was unlawful; provided, however, that within 60 days after the institution of any such action, suit or proceeding, such Committee shall, in writing, offer the Company the opportunity at its own expense to handle and defend such action, suit or proceeding.
4.Shares Subject to the Plan.
4.1Subject to adjustment in accordance with 2114, no more than four million (4,000,000) shares of Common Stock shall be available for the grant of Awards under the Plan (the “Total Share Reserve”). During the terms of the Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Awards.
4.2Shares of Common Stock available for distribution under the Plan may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares reacquired by the Company in any manner.
4.3Subject to adjustment in accordance with 2114, no more than five hundred thousand (500,000) shares of Common Stock may be issued in the aggregate pursuant to the exercise of Incentive Stock Options (the “ISO Limit”).
4.4The maximum number of shares of Common Stock subject to Awards granted during a single Fiscal Year to any Non-Employee Director, together with any cash fees paid to such Non-Employee Director during the Fiscal Year shall not exceed a total value of $1,500,000.00 (calculating the value of any Awards based on the grant date fair value for financial reporting purposes).
4.5Any shares of Common Stock subject to an Award that expires or is canceled, forfeited, or terminated without issuance of the full number of shares of Common Stock to which the Award related will again be available for issuance under the Plan. Notwithstanding anything to the contrary contained herein: shares subject to an Award under the Plan shall not again be made available for issuance or delivery under the Plan if such shares are (a) shares tendered in payment of an Option, (b) shares delivered or withheld by the Company to satisfy any tax withholding obligation, or (c) shares covered by a stock-settled Stock Appreciation Right or other Awards that were not issued upon the settlement of the Award.
4.6Awards may, in the sole discretion of the Committee, be granted under the Plan in assumption of, or in substitution for, outstanding awards previously granted by an entity acquired by the Company or with which the Company combines (“Substitute Awards”). Substitute Awards shall not be counted against the Total Share Reserve; provided, that, Substitute Awards issued in connection with the assumption of, or in substitution for,
11
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
outstanding options intended to qualify as Incentive Stock Options shall be counted against the ISO limit. Subject to applicable stock exchange requirements, available shares under a shareholder-approved plan of an entity directly or indirectly acquired by the Company or with which the Company combines (as appropriately adjusted to reflect such acquisition or transaction) may be used for Awards under the Plan and shall not count toward the Total Share Limit.
4.7For the avoidance of doubt, any incentive awards of any type issued by the Company prior to the adoption of this Plan shall not count toward the Total Share Reserve or be governed by this Plan.
5.1Eligibility for Specific Awards. Incentive Stock Options may be granted only to Employees. Awards other than Incentive Stock Options may be granted to Employees, Consultants and Directors and those individuals whom the Committee determines are reasonably expected to become Employees, Consultants and Directors following the Grant Date.
5.2Ten Percent Shareholders. A Ten Percent Shareholder shall not be granted an Incentive Stock Option unless the Option Exercise Price is at least 110% of the Fair Market Value of the Common Stock on the Grant Date and the Option is not exercisable after the expiration of five years from the Grant Date.
6.Option Provisions. Each Option granted under the Plan shall be evidenced by an Award Agreement. Each Option so granted shall be subject to the conditions set forth in this Section 6, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. All Options shall be separately designated Incentive Stock Options or Non-qualified Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. Notwithstanding the foregoing, the Company shall have no liability to any Participant or any other person if an Option designated as an Incentive Stock Option fails to qualify as such at any time or if an Option is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and the terms of such Option do not satisfy the requirements of Section 409A of the Code. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions:
6.1Term. Subject to the provisions of 125.2 regarding Ten Percent Shareholders, no Incentive Stock Option shall be exercisable after the expiration of 10 years from the Grant Date. The term of a Non-qualified Stock Option granted under the Plan shall be determined by the Committee; provided, however, no Non-qualified Stock Option shall be exercisable after the expiration of 10 years from the Grant Date.
6.2Exercise Price of an Incentive Stock Option. Subject to the provisions of 125.2 regarding Ten Percent Shareholders, the Option Exercise Price of each Incentive Stock Option shall be not less than 100% of the Fair Market Value of the Common Stock subject to the
12
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
Option on the Grant Date. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an Option Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.
6.3Exercise Price of a Non-qualified Stock Option. The Option Exercise Price of each Non-qualified Stock Option shall be not less than 100% of the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, a Non-qualified Stock Option may be granted with an Option Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 409A of the Code.
6.4Consideration. The Option Exercise Price of Common Stock acquired pursuant to an Option shall be paid, 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 or (b) in the discretion of the Committee, upon such terms as the Committee shall approve, the Option Exercise Price may be paid: (i) by delivery to the Company of other Common Stock, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the Option Exercise Price (or portion thereof) due for the number of shares being acquired, or by means of attestation whereby the Participant identifies for delivery specific shares of Common Stock that have an aggregate Fair Market Value on the date of attestation equal to the Option Exercise Price (or portion thereof) and receives a number of shares of Common Stock equal to the difference between the number of shares thereby purchased and the number of identified attestation shares of Common Stock (a “Stock for Stock Exchange”); (ii) a “cashless” exercise program established with a broker; (iii) by reduction in the number of shares of Common Stock otherwise deliverable upon exercise of such Option with a Fair Market Value equal to the aggregate Option Exercise Price at the time of exercise; (iv) by any combination of the foregoing methods; or (v) in any other form of legal consideration that may be acceptable to the Committee. Unless otherwise specifically provided in the Option, the exercise price of Common Stock acquired pursuant to an Option that is paid by delivery (or attestation) to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the Company that have been held for more than six months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes). Notwithstanding the foregoing, during any period for which the Common Stock is publicly traded (i.e., the Common Stock is listed on any established stock exchange or a national market system) an exercise by a Director or Officer that involves or may involve a direct or indirect extension of credit or arrangement of an extension of credit by the Company, directly or indirectly, in violation of Section 402(a) of the Sarbanes-Oxley Act of 2002 shall be prohibited with respect to any Award under this Plan.
6.5Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form
13
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.
6.6Transferability of a Non-qualified Stock Option. A Non-qualified Stock Option may, in the sole discretion of the Committee, be transferable to a Permitted Transferee, upon written approval by the Committee to the extent provided in the Award Agreement. If the Non-qualified Stock Option does not provide for transferability, then the Non-qualified Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.
6.7Vesting of Options. Each Option may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Committee may deem appropriate. The vesting provisions of individual Options may vary. No Option may be exercised for a fraction of a share of Common Stock. The Committee may, but shall not be required to, provide for an acceleration of vesting and exercisability in the terms of any Award Agreement upon the occurrence of a specified event.
6.8Termination of Continuous Service. Unless otherwise provided in an Award Agreement or in an employment agreement the terms of which have been approved by the Committee, in the event an Optionholder’s Continuous Service terminates (other than upon the Optionholder’s death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (a) the date three months following the termination of the Optionholder’s Continuous Service or (b) the expiration of the term of the Option as set forth in the Award Agreement; provided that, if the termination of Continuous Service is by the Company for Cause, all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable. If, after termination, the Optionholder does not exercise his or her Option within the time specified in the Award Agreement, the Option shall terminate.
6.9Extension of Termination Date. An Optionholder’s Award Agreement may also provide that if the exercise of the Option following the termination of the Optionholder’s Continuous Service for any reason would be prohibited at any time because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act or any other state or federal securities law or the rules of any securities exchange or interdealer quotation system, then the Option shall terminate on the earlier of (a) the expiration of the term of the Option in accordance with 126.1 or (b) the expiration of a period after termination of the Participant’s Continuous Service that is three months after the end of the period during which the exercise of the Option would be in violation of such registration or other securities law requirements.
14
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
6.10Disability of Optionholder. Unless otherwise provided in an Award Agreement, in the event that an Optionholder’s Continuous Service terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of (a) the date 12 months following such termination or (b) the expiration of the term of the Option as set forth in the Award Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified herein or in the Award Agreement, the Option shall terminate.
6.11Death of Optionholder. Unless otherwise provided in an Award Agreement, in the event an Optionholder’s Continuous Service terminates as a result of the Optionholder’s death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Optionholder’s death, but only within the period ending on the earlier of (a) the date 12 months following the date of death or (b) the expiration of the term of such Option as set forth in the Award Agreement. If, after the Optionholder’s death, the Option is not exercised within the time specified herein or in the Award Agreement, the Option shall terminate.
6.12Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder 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.
7.Stock Appreciation Rights. Each Stock Appreciation Right granted under the Plan shall be evidenced by an Award Agreement. Each Stock Appreciation Right so granted shall be subject to the conditions set forth in this Section 7, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. Stock Appreciation Rights may be granted alone (“Free Standing Rights”) or in tandem with an Option granted under the Plan (“Related Rights”).
7.1Grant Requirements for Related Rights. Any Related Right that relates to a Non-qualified Stock Option may be granted at the same time the Option is granted or at any time thereafter but before the exercise or expiration of the Option. Any Related Right that relates to an Incentive Stock Option must be granted at the same time the Incentive Stock Option is granted.
7.2Term. The term of a Stock Appreciation Right granted under the Plan shall be determined by the Committee; provided, however, no Stock Appreciation Right shall be exercisable later than the tenth anniversary of the Grant Date.
7.3Vesting. Each Stock Appreciation Right may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Stock Appreciation Right may be subject to such other terms and conditions on the time or times
15
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
when it may be exercised as the Committee may deem appropriate. The vesting provisions of individual Stock Appreciation Rights may vary. No Stock Appreciation Right may be exercised for a fraction of a share of Common Stock. The Committee may, but shall not be required to, provide for an acceleration of vesting and exercisability in the terms of any Stock Appreciation Right upon the occurrence of a specified event.
7.4Exercise and Payment Upon exercise of a Stock Appreciation Right, the holder shall be entitled to receive from the Company an amount equal to the number of shares of Common Stock subject to the Stock Appreciation Right that is being exercised multiplied by the excess of (i) the Fair Market Value of a share of Common Stock on the date the Award is exercised, over (ii) the exercise price specified in the Stock Appreciation Right or related Option. Payment with respect to the exercise of a Stock Appreciation Right shall be made on the date of exercise. Payment shall be made in the form of shares of Common Stock (with or without restrictions as to substantial risk of forfeiture and transferability, as determined by the Committee in its sole discretion), cash or a combination thereof, as determined by the Committee.
7.5Exercise Price The exercise price of a Free Standing Right shall be determined by the Committee, but shall not be less than 100% of the Fair Market Value of one share of Common Stock on the Grant Date of such Stock Appreciation Right. A Related Right granted simultaneously with or subsequent to the grant of an Option and in conjunction therewith or in the alternative thereto shall have the same exercise price as the related Option, shall be transferable only upon the same terms and conditions as the related Option, and shall be exercisable only to the same extent as the related Option; provided, however, that a Stock Appreciation Right, by its terms, shall be exercisable only when the Fair Market Value per share of Common Stock subject to the Stock Appreciation Right and related Option exceeds the exercise price per share thereof and no Stock Appreciation Rights may be granted in tandem with an Option unless the Committee determines that the requirements of Section 7.1 are satisfied.
7.6Reduction in the Underlying Option Shares Upon any exercise of a Related Right, the number of shares of Common Stock for which any related Option shall be exercisable shall be reduced by the number of shares for which the Stock Appreciation Right has been exercised. The number of shares of Common Stock for which a Related Right shall be exercisable shall be reduced upon any exercise of any related Option by the number of shares of Common Stock for which such Option has been exercised.
8.Restricted Awards A Restricted Award is an Award of actual shares of Common Stock (“Restricted Stock”) or hypothetical Common Stock units (“Restricted Stock Units”) having a value equal to the Fair Market Value of an identical number of shares of Common Stock, which may, but need not, provide that such Restricted Award may not be sold, assigned, transferred or otherwise disposed of, pledged or hypothecated as collateral for a loan or as security for the performance of any obligation or for any other purpose for such period (the “Restricted Period”) as the Committee shall determine. Each Restricted Award granted under the Plan shall be evidenced by an Award Agreement. Each Restricted Award so granted shall be subject to the conditions set forth in this Section 8, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement.
16
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
8.1Restricted Stock and Restricted Stock Units
(a)Each Participant granted Restricted Stock shall execute and deliver to the Company an Award Agreement with respect to the Restricted Stock setting forth the restrictions and other terms and conditions applicable to such Restricted Stock. If the Committee determines that the Restricted Stock shall be held by the Company or in escrow rather than delivered to the Participant pending the release of the applicable restrictions, the Committee may require the Participant to additionally execute and deliver to the Company (A) an escrow agreement satisfactory to the Committee, if applicable and (B) the appropriate blank stock power with respect to the Restricted Stock covered by such agreement. If a Participant fails to execute an agreement evidencing an Award of Restricted Stock and, if applicable, an escrow agreement and stock power, the Award shall be null and void. Subject to the restrictions set forth in the Award, the Participant generally shall have the rights and privileges of a shareholder as to such Restricted Stock, including the right to vote such Restricted Stock and the right to receive dividends.
(b)The terms and conditions of a grant of Restricted Stock Units shall be reflected in an Award Agreement. No shares of Common Stock shall be issued at the time a Restricted Stock Unit is granted, and the Company will not be required to set aside funds for the payment of any such Award. A Participant shall have no voting rights with respect to any Restricted Stock Units granted hereunder. The Committee may also grant Restricted Stock Units with a deferral feature, whereby settlement is deferred beyond the vesting date until the occurrence of a future payment date or event set forth in an Award Agreement (“Deferred Stock Units”). At the discretion of the Committee, each Restricted Stock Unit or Deferred Stock Unit (representing one share of Common Stock) may be credited with an amount equal to the cash and stock dividends paid by the Company in respect of one share of Common Stock (“Dividend Equivalents”). Dividend Equivalents shall be paid currently (and in no case later than the end of the calendar year in which the dividend is paid to the holders of the Common Stock or, if later, the 15th day of the third month following the date the dividend is paid to holders of the Common Stock).
(a)Restricted Stock awarded to a Participant shall be subject to the following restrictions until the expiration of the Restricted Period, and to such other terms and conditions as may be set forth in the applicable Award Agreement: (A) if an escrow arrangement is used, the Participant shall not be entitled to delivery of the stock certificate; (B) the shares shall be subject to the restrictions on transferability set forth in the Award Agreement; (C) the shares shall be subject to forfeiture to the extent provided in the applicable Award Agreement; and (D) to the extent such shares are forfeited, the stock certificates shall be returned to the Company, and all rights of the Participant to such shares and as a shareholder with respect to such shares shall terminate without further obligation on the part of the Company.
17
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
(b)Restricted Stock Units and Deferred Stock Units awarded to any Participant shall be subject to (A) forfeiture until the expiration of the Restricted Period, and satisfaction of any applicable Performance Goals during such period, to the extent provided in the applicable Award Agreement, and to the extent such Restricted Stock Units or Deferred Stock Units are forfeited, all rights of the Participant to such Restricted Stock Units or Deferred Stock Units shall terminate without further obligation on the part of the Company and (B) such other terms and conditions as may be set forth in the applicable Award Agreement.
(c)The Committee shall have the authority to remove any or all of the restrictions on the Restricted Stock, Restricted Stock Units and Deferred Stock Units whenever it may determine that, by reason of changes in Applicable Laws or other changes in circumstances arising after the date the Restricted Stock or Restricted Stock Units or Deferred Stock Units are granted, such action is appropriate.
With respect to Restricted Awards, the Restricted Period shall commence on the Grant Date and end at the time or times set forth on a schedule established by the Committee in the applicable Award Agreement.
No Restricted Award may be granted or settled for a fraction of a share of Common Stock. The Committee may, but shall not be required to, provide for an acceleration of vesting in the terms of any Award Agreement upon the occurrence of a specified event.
8.4Delivery of Restricted Stock and Settlement of Restricted Stock Units Upon the expiration of the Restricted Period with respect to any shares of Restricted Stock, the restrictions set forth in 178.2 and the applicable Award Agreement shall be of no further force or effect with respect to such shares, except as set forth in the applicable Award Agreement. If an escrow arrangement is used, upon such expiration, the Company shall deliver to the Participant, or his or her beneficiary, without charge, the stock certificate evidencing the shares of Restricted Stock which have not then been forfeited and with respect to which the Restricted Period has expired (to the nearest full share) and any cash dividends or stock dividends credited to the Participant’s account with respect to such Restricted Stock and the interest thereon, if any. Upon the expiration of the Restricted Period with respect to any outstanding Restricted Stock Units, or at the expiration of the deferral period with respect to any outstanding Deferred Stock Units, the Company shall deliver to the Participant, or his or her beneficiary, without charge, one share of Common Stock for each such outstanding vested Restricted Stock Unit or Deferred Stock Unit (“Vested Unit”) and cash equal to any Dividend Equivalents credited with respect to each such Vested Unit in accordance with 178.1(b) hereof and the interest thereon or, at the discretion of the Committee, in shares of Common Stock having a Fair Market Value equal to such Dividend Equivalents and the interest thereon, if any; provided, however, that, if explicitly provided in the applicable Award Agreement, the Committee may, in its sole discretion, elect to pay cash or part cash and part Common Stock in lieu of delivering only shares of Common Stock for Vested Units. If a cash payment is made in lieu of delivering shares of Common Stock, the amount of such payment shall be
18
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
equal to the Fair Market Value of the Common Stock as of the date on which the Restricted Period lapsed in the case of Restricted Stock Units, or the delivery date in the case of Deferred Stock Units, with respect to each Vested Unit.
8.5Stock Restrictions Each certificate representing Restricted Stock awarded under the Plan shall bear a legend in such form as the Company deems appropriate.
9.Performance Share Awards Each Performance Share Award granted under the Plan shall be evidenced by an Award Agreement. Each Performance Share Award so granted shall be subject to the conditions set forth in this Section 9, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. The Committee shall have the discretion to determine: (i) the number of shares of Common Stock or stock-denominated units subject to a Performance Share Award granted to any Participant; (ii) the Performance Period applicable to any Award; (iii) the conditions that must be satisfied for a Participant to earn an Award; and (iv) the other terms, conditions and restrictions of the Award.
9.1Earning Performance Share Awards The number of Performance Shares earned by a Participant will depend on the extent to which the performance goals established by the Committee are attained within the applicable Performance Period, as determined by the Committee.
10.Other Equity-Based Awards and Cash Awards The Committee may grant Other Equity-Based Awards, either alone or in tandem with other Awards, in such amounts and subject to such conditions as the Committee shall determine in its sole discretion. Each Equity-Based Award shall be evidenced by an Award Agreement and shall be subject to such conditions, not inconsistent with the Plan, as may be reflected in the applicable Award Agreement. The Committee may grant Cash Awards in such amounts and subject to such Performance Goals, other vesting conditions, and such other terms as the Committee determines in its discretion. Cash Awards shall be evidenced in such form as the Committee may determine.
11.Securities Law Compliance. Each Award Agreement shall provide that no shares of Common Stock shall be purchased or sold thereunder unless and until (a) 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 and (b) if required to do so by the Company, the Participant has executed and delivered to the Company a letter of investment intent in such form and containing such provisions as the Committee may require. The Company shall use reasonable efforts to seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Awards and to issue and sell shares of Common Stock upon exercise of the Awards; provided, however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Award or any Common Stock issued or issuable pursuant to any such Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Awards unless and until such authority is obtained.
19
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
12.Use of Proceeds from Stock. Proceeds from the sale of Common Stock pursuant to Awards, or upon exercise thereof, shall constitute general funds of the Company.
13.1Acceleration of Exercisability and Vesting. The Committee shall have the power to accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest.
13.2Shareholder Rights. Except as provided in the Plan or an Award Agreement, no Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Award unless and until such Participant has satisfied all requirements for exercise of the Award pursuant to its terms and no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions of other rights for which the record date is prior to the date such Common Stock certificate is issued, except as provided in 2114 hereof.
13.3No Employment or Other Service Rights. Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or shall affect the right of the Company or an Affiliate to terminate (a) the employment of an Employee with or without notice and with or without Cause or (b) the service of a Director pursuant to the By-laws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.
13.4Transfer; Approved Leave of Absence. For purposes of the Plan, no termination of employment by an Employee shall be deemed to result from either (a) a transfer of employment to the Company from an Affiliate or from the Company to an Affiliate, or from one Affiliate to another, or (b) an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the Employee’s right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Committee otherwise so provides in writing, in either case, except to the extent inconsistent with Section 409A of the Code if the applicable Award is subject thereto.
13.5Withholding Obligations. To the extent provided by the terms of an Award Agreement and subject to the discretion of the Committee, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under an Award by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (a) tendering a cash payment; (b) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Award, provided, however, that no shares of Common Stock are withheld with a value exceeding the
20
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
maximum amount of tax required to be withheld by law; or (c) delivering to the Company previously owned and unencumbered shares of Common Stock of the Company.
14.Adjustments Upon Changes in Stock. In the event of changes in the outstanding Common Stock or in the capital structure of the Company by reason of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization occurring after the Grant Date of any Award, Awards granted under the Plan and any Award Agreements, the exercise price of Options and Stock Appreciation Rights, the Performance Goals to which Performance Share Awards and Cash Awards are subject, the maximum number of shares of Common Stock subject to all Awards stated in 114 will be equitably adjusted or substituted, as to the number, price or kind of a share of Common Stock or other consideration subject to such Awards to the extent necessary to preserve the economic intent of such Award. In the case of adjustments made pursuant to this Section 14, unless the Committee specifically determines that such adjustment is in the best interests of the Company or its Affiliates, the Committee shall, in the case of Incentive Stock Options, ensure that any adjustments under this Section 14 will not constitute a modification, extension or renewal of the Incentive Stock Options within the meaning of Section 424(h)(3) of the Code and in the case of Non-qualified Stock Options, ensure that any adjustments under this Section 14 will not constitute a modification of such Non-qualified Stock Options within the meaning of Section 409A of the Code. Any adjustments made under this Section 14 shall be made in a manner which does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act. The Company shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall be conclusive and binding for all purposes.
15.Effect of Change in Control.
15.1Unless otherwise provided in an Award Agreement, notwithstanding any provision of the Plan to the contrary:
(a)In the event of a Change in Control, all outstanding Options and Stock Appreciation Rights shall become immediately exercisable with respect to 100% of the shares subject to such Options or Stock Appreciation Rights, and/or the Restricted Period shall expire immediately with respect to 100% of the outstanding shares of Restricted Stock or Restricted Stock Units.
(b)With respect to Performance Share Awards and Cash Awards, in the event of a Change in Control, all incomplete Performance Periods in respect of such Awards in effect on the date the Change in Control occurs shall end on the date of such change and the Committee shall (i) determine the extent to which Performance Goals with respect to each such Performance Period have been met based upon such audited or unaudited financial information then available as it deems relevant and (ii) cause to be paid to the applicable Participant partial or full Awards with respect to Performance Goals for each such Performance Period based upon the Committee’s determination of the degree of attainment of Performance Goals or, if not determinable, assuming that the applicable “target” levels of performance have been attained, or on such other basis determined by the Committee.
21
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
To the extent practicable, any actions taken by the Committee under the immediately preceding clauses (a) and (b) shall occur in a manner and at a time which allows affected Participants the ability to participate in the Change in Control with respect to the shares of Common Stock subject to their Awards.
15.2In addition, in the event of a Change in Control, the Committee may in its discretion and upon at least 10 days’ advance notice to the affected persons, cancel any outstanding Awards and pay to the holders thereof, in cash or stock, or any combination thereof, the value of such Awards based upon the price per share of Common Stock received or to be received by other shareholders of the Company in the event. In the case of any Option or Stock Appreciation Right with an exercise price (or SAR Exercise Price in the case of a Stock Appreciation Right) that equals or exceeds the price paid for a share of Common Stock in connection with the Change in Control, the Committee may cancel the Option or Stock Appreciation Right without the payment of consideration therefor.
15.3The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company and its Affiliates, taken as a whole.
16.Amendment of the Plan and Awards.
16.1Amendment of Plan. The Board at any time, and from time to time, may amend or terminate the Plan. However, except as provided in 2114 relating to adjustments upon changes in Common Stock and 2216.3, no amendment shall be effective unless approved by the shareholders of the Company to the extent shareholder approval is necessary to satisfy any Applicable Laws. At the time of such amendment, the Board shall determine, upon advice from counsel, whether such amendment will be contingent on shareholder approval.
16.2Shareholder Approval. The Board may, in its sole discretion, submit any other amendment to the Plan for shareholder approval.
16.3Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees, Consultants and Directors with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options or to the nonqualified deferred compensation provisions of Section 409A of the Code and/or to bring the Plan and/or Awards granted under it into compliance therewith.
16.4No Impairment of Rights. Rights under any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing.
16.5Amendment of Awards. The Committee at any time, and from time to time, may amend the terms of any one or more Awards; provided, however, that the Committee may not affect any amendment which would otherwise constitute an impairment of the rights under
22
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
any Award unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing.
17.1Forfeiture Events. The Committee may specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain events, in addition to applicable vesting conditions of an Award. Such events may include, without limitation, breach of non-competition, non-solicitation, confidentiality, or other restrictive covenants that are contained in the Award Agreement or otherwise applicable to the Participant, a termination of the Participant’s Continuous Service for Cause, or other conduct by the Participant that is detrimental to the business or reputation of the Company and/or its Affiliates.
17.2Clawback. Notwithstanding any other provisions in this Plan, the Company may cancel any Award, require reimbursement of any Award by a Participant, and effect any other right of recoupment of equity or other compensation provided under the Plan in accordance with any Company policies that may be adopted and/or modified from time to time (“Clawback Policy”). In addition, a Participant may be required to repay to the Company previously paid compensation, whether provided pursuant to the Plan or an Award Agreement, in accordance with the Clawback Policy. By accepting an Award, the Participant is agreeing to be bound by the Clawback Policy, as in effect or as may be adopted and/or modified from time to time by the Company in its discretion (including, without limitation, to comply with applicable law or stock exchange listing requirements).
17.3Other Compensation Arrangements. Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.
17.4Sub-Plans. The Committee may from time to time establish sub-plans under the Plan for purposes of satisfying securities, tax or other laws of various jurisdictions in which the Company intends to grant Awards. Any sub-plans shall contain such limitations and other terms and conditions as the Committee determines are necessary or desirable. All sub-plans shall be deemed a part of the Plan, but each sub-plan shall apply only to the Participants in the jurisdiction for which the sub-plan was designed.
17.5Unfunded Plan. The Plan shall be unfunded. Neither the Company, the Board nor the Committee shall be required to establish any special or separate fund or to segregate any assets to assure the performance of its obligations under the Plan.
17.6Recapitalizations. Each Award Agreement shall contain provisions required to reflect the provisions of 2114.
17.7Delivery. Upon exercise of a right granted under this Plan, the Company shall issue Common Stock or pay any amounts due within a reasonable period of time thereafter. Subject
23
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
to any statutory or regulatory obligations the Company may otherwise have, for purposes of this Plan, 30 days shall be considered a reasonable period of time.
17.8No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan. The Committee shall determine whether cash, additional Awards or other securities or property shall be issued or paid in lieu of fractional shares of Common Stock or whether any fractional shares should be rounded, forfeited or otherwise eliminated.
17.9Other Provisions. The Award Agreements authorized under the Plan may contain such other provisions not inconsistent with this Plan, including, without limitation, restrictions upon the exercise of Awards, as the Committee may deem advisable.
17.10Section 409A. The Plan is intended to comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and administered to be in compliance therewith. Any payments described in the Plan that are due within the “short-term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless Applicable Laws require otherwise. Notwithstanding anything to the contrary in the Plan, to the extent required to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6) month period immediately following the Participant’s termination of Continuous Service shall instead be paid on the first payroll date after the six-month anniversary of the Participant’s separation from service (or the Participant’s death, if earlier). Notwithstanding the foregoing, neither the Company nor the Committee shall have any obligation to take any action to prevent the assessment of any additional tax or penalty on any Participant under Section 409A of the Code and neither the Company nor the Committee will have any liability to any Participant for such tax or penalty.
17.11Disqualifying Dispositions. Any Participant who shall make a “disposition” (as defined in Section 424 of the Code) of all or any portion of shares of Common Stock acquired upon exercise of an Incentive Stock Option within two years from the Grant Date of such Incentive Stock Option or within one year after the issuance of the shares of Common Stock acquired upon exercise of such Incentive Stock Option (a “Disqualifying Disposition”) shall be required to immediately advise the Company in writing as to the occurrence of the sale and the price realized upon the sale of such shares of Common Stock.
17.12Section 16. It is the intent of the Company that the Plan satisfy, and be interpreted in a manner that satisfies, the applicable requirements of Rule 16b-3 as promulgated under Section 16 of the Exchange Act so that Participants will be entitled to the benefit of Rule 16b-3, or any other rule promulgated under Section 16 of the Exchange Act, and will not be subject to short-swing liability under Section 16 of the Exchange Act. Accordingly, if the operation of any provision of the Plan would conflict with the intent expressed in this Section 17.12, such provision to the extent possible shall be interpreted and/or deemed amended so as to avoid such conflict.
24
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
17.13Beneficiary Designation. Each Participant under the Plan may from time to time name any beneficiary or beneficiaries by whom any right under the Plan is to be exercised in case of such Participant’s death. Each designation will revoke all prior designations by the same Participant, shall be in a form reasonably prescribed by the Committee and shall be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime.
17.14Expenses. The costs of administering the Plan shall be paid by the Company.
17.15Severability. If any of the provisions of the Plan or any Award Agreement is held to be invalid, illegal or unenforceable, whether in whole or in part, such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining provisions shall not be affected thereby.
17.16Plan Headings. The headings in the Plan are for purposes of convenience only and are not intended to define or limit the construction of the provisions hereof.
17.17Non-Uniform Treatment. The Committee’s determinations under the Plan need not be uniform and may be made by it selectively among persons who are eligible to receive, or actually receive, Awards. Without limiting the generality of the foregoing, the Committee shall be entitled to make non-uniform and selective determinations, amendments and adjustments, and to enter into non-uniform and selective Award Agreements.
18.Effective Date of Plan. The Plan shall become effective as of the Effective Date, but no Award shall be exercised (or, in the case of a stock Award, shall be granted) unless and until the Plan has been approved by the shareholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board.
19.Termination or Suspension of the Plan. The Plan shall terminate automatically on February 18, 2034. No Award shall be granted pursuant to the Plan after such date, but Awards theretofore granted may extend beyond that date. The Board may suspend or terminate the Plan at any earlier date pursuant to 2216.1 hereof. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
20.Choice of Law. The law of the State of Delaware shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such state’s conflict of law rules.
As adopted by the Board of Directors of DynaResources, Inc. on February 19, 2024 and amended and restated with the approval of the Board of Directors on May 31, 2024.
As approved by the shareholders of DynaResources, Inc. on [DATE].
25
DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>> <<NUM>>.<<VER>> * MERGEFORMAT PL 4325869.1
DynaResource Announces Offtake Extension, Credit Line Expansion and Private Placement
Extension of Commercial Offtake Agreement through December 2028; Ocean Partners to extend a $4M Temporary Additional Credit Line and to increase Revolving Credit Line to $12.5M, following certain conditions; Major Shareholder Golden Post LLC to purchase $2.5M Shares of Common Stock of DynaResource Inc at $1.61 per share.
IRVING, TX / June 7, 2024 / DYNR-DynaResource, Inc. (OTCQX:DYNR) (“DynaResource”, or “the Company”) is pleased to report the following update regarding the Company and its 100%-owned San Jose de Gracia high grade gold project in Sinaloa, México (“SJG”). All figures in United States Dollars (“USD”).
•Ocean Partners UK Limited (“Ocean Partners”), through its 100% owned subsidiary in Mexico – MK Metals Trading Mexico S.A. de CV (“MK”), and the Company have formalized the extension of their commercial offtake agreement through December 31, 2028, and with revision of terms as per below:
oOcean Partners agreed to provide a Temporary Additional Credit Line (“TACL”) of $4M, payable November 30, 2024;
oOcean Partners agreed to increase the Revolving Credit Line (“RCL) from $10M to $12.5M after November 30, 2024 and following the repayment of the TACL and RCL;
oOcean Partners to provide the Company a Put Option to convert up to $9M of the Revolving Credit Line into Common Stock at a price expected to be approximately $1.61 per share, exercisable between November 1 and 30, 2024.
•The Company has agreed to issue 1,552,795 shares of Common Stock to Golden Post Rail LLC (“Golden Post”) in exchange for $2.5M USD.
The Company plans to utilize the funds received from Ocean Partners and Golden Post to further expand and increase mining and milling activities at SJG, to expand the tailings storage facility, to continue exploration drilling and related exploration activities, and for general corporate purposes.
“We are pleased to receive this strong level of support from key stakeholders being Ocean Partners, our offtake partner, and Golden Post, our largest shareholder,” stated Rohan Hazelton, President & CEO DynaResource. “These funds are an endorsement of our business plans to optimize operations and increase shareholder value.”
On behalf of Ocean Partners, Brent Omland, co-CEO of Ocean Partners commented: “We are very pleased to expand our strong relationship with DynaResource and are excited to be a part of the continuing development and expansion of the world class SJG Project.”
On behalf of the Board of Directors of DynaResource, Inc.
Rohan Hazelton
President & Chief Executive Officer
About DynaResource
DynaResource is a junior gold mining producer trading on the OTCQX under the symbol “DYNR”. DynaResource is actively mining and expanding the historic San Jose de Gracia gold mining district in Sinaloa, Mexico.
IMPORTANT CAUTIONARY NOTE REGARDING CANADIAN DISCLOSURE STANDARDS
The Company is an “OTC Reporting Issuer” as that term is defined in Multilateral Instrument 51-509, Issuers Quoted in the U.S. Over-the-Counter Markets, promulgated by various Canadian Provincial Securities Commissions. Accordingly, certain disclosure in this news release or other disclosure provided by the Company has been prepared in accordance with the requirements of securities laws in effect in Canada, which differ from the requirements of United States securities laws. In Canada, an issuer is required to provide technical information with respect to mineralization, including reserves and resources, if any, on its mineral exploration properties in accordance with Canadian requirements, which differ significantly from the requirements of the United States Securities and Exchange Commission (the “SEC”) applicable to registration statements and reports filed by United States companies pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. As such, information contained in this news release or other disclosure provided by the Company concerning descriptions of mineralization under Canadian standards may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements of the SEC and not subject to Canadian securities legislation. This news release or other disclosure provided by the Company may use the terms “measured mineral resources”, “indicated mineral resources” and “inferred
mineral resources”. While these terms are recognized and required by Canadian regulations (under National Instrument 43-101, Standards of Disclosure for Mineral Projects), the SEC does not recognize them. United States investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted to reserves. In addition, “inferred mineral resources” have a great amount of uncertainty as to their existence and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities legislation, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, although they may form, in certain circumstances, the basis of a “preliminary economic assessment” as that term is defined in National Instrument 43-101, Standards of Disclosure for Mineral Projects. U.S. investors are cautioned not to assume that part or all of an inferred mineral resource exists, or is economically or legally mineable.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This news release contains forward-looking statements within the meaning of Section 27 A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Certain information contained in this news release, including any information relating to future financial or operating performance may be deemed “forward-looking”. All statements in this news release, other than statements of historical fact, that address events or developments that DynaResource expects to occur, are “forward-looking information”. These statements relate to future events or future performance and reflect the Company’s expectations regarding the future growth, results of operations, business prospects and opportunities of DynaResource. These forward-looking statements reflect the Company’s current internal projections, expectations or beliefs and are based on information currently available to DynaResource. In some cases, forward-looking information can be identified by terminology such as “may”, “will”, “should”, “expect”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “projects”, “potential”, “scheduled”, “forecast”, “budget” or the negative of those terms or other comparable terminology. Certain assumptions have been made regarding the Company’s plans at the San Jose de Gràcia property. Many of these assumptions are based on factors and events that are not within the control of DynaResource and there is no assurance they will prove to be correct. Such factors include, without limitation: capital requirements, fluctuations in the international currency markets and in the rates of exchange of the currencies of the United States and México; price volatility in the spot and forward markets for commodities; discrepancies between actual and estimated production, between actual and estimated reserves and resources and between actual and
estimated metallurgical recoveries; changes in national and local governments in any country which DynaResource currently or may in the future carry on business; taxation; controls; regulations and political or economic developments in the countries in which DynaResource does or may carry on business; the speculative nature of mineral exploration and development, including the risks of obtaining necessary licenses and permits, diminishing quantities or grades of reserves; competition; loss of key employees; additional funding requirements; actual results of current exploration or reclamation activities; changes in project parameters as plans continue to be refined; accidents; labor disputes; defective title to mineral claims or property or contests over claims to mineral properties. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance or inability to obtain insurance, to cover these risks) as well as those risks referenced in the Annual Report for DynaResource available at www.sec.gov. Forward-looking information is not a guarantee of future performance and actual results, and future events could differ materially from those discussed in the forward-looking information. All of the forward-looking information contained in this news release is qualified by these cautionary statements. Although DynaResource believes that the forward-looking information contained in this news release is based on reasonable assumptions, readers cannot be assured that actual results will be consistent with such statements. Accordingly, readers are cautioned against placing undue reliance on forward-looking information. DynaResource expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise.
For Information on DynaUSA and DynaMéxico, please visit www.dynaresource.com, or contact:
Brad J. Saulter, DynaUSA V.P. – Investor Relations: 972-996-7417;
General Inquiries: 972-869-9400
Rohan Hazelton, DynaUSA – President & CEO
Contact Information
Brad J. Saulter
DynaUSA V.P. – Investor Relations
972-869-9400
v3.24.1.1.u2
Document And Entity Information
|
Jun. 03, 2024 |
| Cover [Abstract] |
|
| Document Type |
8-K
|
| Amendment Flag |
false
|
| Document Period End Date |
Jun. 03, 2024
|
| Entity Registrant Name |
DYNARESOURCE, INC.
|
| Entity Central Index Key |
0001111741
|
| Entity Emerging Growth Company |
false
|
| Entity File Number |
000-30371
|
| Entity Incorporation, State or Country Code |
DE
|
| Entity Tax Identification Number |
94-1589426
|
| Entity Address, Address Line One |
The Urban Towers
|
| Entity Address, Address Line Two |
222 W. Las Colinas Blvd.
|
| Entity Address, Address Line Three |
Suite 1910 - North Tower
|
| Entity Address, City or Town |
Irving
|
| Entity Address, State or Province |
TX
|
| Entity Address, Postal Zip Code |
75039
|
| City Area Code |
(972)
|
| Local Phone Number |
869-9400
|
| Written Communications |
false
|
| Soliciting Material |
false
|
| Pre-commencement Tender Offer |
false
|
| Pre-commencement Issuer Tender Offer |
false
|
| Title of 12(b) Security |
N/A
|
| No Trading Symbol Flag |
true
|
| Security Exchange Name |
NONE
|
| X |
- DefinitionBoolean flag that is true when the XBRL content amends previously-filed or accepted submission.
| Name: |
dei_AmendmentFlag |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionFor the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
| Name: |
dei_DocumentPeriodEndDate |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:dateItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
| Name: |
dei_DocumentType |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:submissionTypeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionAddress Line 1 such as Attn, Building Name, Street Name
| Name: |
dei_EntityAddressAddressLine1 |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionAddress Line 2 such as Street or Suite number
| Name: |
dei_EntityAddressAddressLine2 |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionAddress Line 3 such as an Office Park
| Name: |
dei_EntityAddressAddressLine3 |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- Definition
+ References
+ Details
| Name: |
dei_EntityAddressCityOrTown |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCode for the postal or zip code
| Name: |
dei_EntityAddressPostalZipCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the state or province.
| Name: |
dei_EntityAddressStateOrProvince |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:stateOrProvinceItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityCentralIndexKey |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:centralIndexKeyItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionIndicate if registrant meets the emerging growth company criteria. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityEmergingGrowthCompany |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
| Name: |
dei_EntityFileNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:fileNumberItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
| Name: |
dei_EntityIncorporationStateCountryCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarStateCountryItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityRegistrantName |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityTaxIdentificationNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:employerIdItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionLocal phone number for entity.
| Name: |
dei_LocalPhoneNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true only for a security having no trading symbol.
| Name: |
dei_NoTradingSymbolFlag |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:trueItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
| Name: |
dei_PreCommencementIssuerTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
| Name: |
dei_PreCommencementTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTitle of a 12(b) registered security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
| Name: |
dei_Security12bTitle |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:securityTitleItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the Exchange on which a security is registered. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
| Name: |
dei_SecurityExchangeName |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarExchangeCodeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14a
-Subsection 12
| Name: |
dei_SolicitingMaterial |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
| Name: |
dei_WrittenCommunications |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
Dynaresource (QX) (USOTC:DYNR)
Historical Stock Chart
From May 2024 to Jun 2024
Dynaresource (QX) (USOTC:DYNR)
Historical Stock Chart
From Jun 2023 to Jun 2024
