UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY
STATEMENT SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to
Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant x
Filed by a Party other than the Registrant ¨
Check the appropriate box:
| ¨ | Preliminary Proxy Statement |
| ¨ | Confidential, For Use of the Commission Only (as permitted
by Rule 14a-6(e)(2)) |
| x | Definitive Proxy Statement |
| ¨ | Definitive Additional Materials |
| ¨ | Soliciting Material Pursuant to Section 240.14a-12 |
AMERICAN EAGLE ENERGY CORPORATION
(Name of Registrant as Specified
in its Charter)
(Name of Person(s) Filing Proxy
Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| ¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11. |
| (1) | Title of each class of securities to which transaction
applies: |
| (2) | Aggregate number of securities to which transaction
applies: |
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule
0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| (4) | Proposed maximum aggregate value of transaction: |
| ¨ | Fee paid previously with preliminary materials. |
| ¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify
the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing. |
| (1) | Amount Previously Paid: |
| (2) | Form, Schedule or Registration Statement No.: |
American Eagle Energy Corporation
2549 W. Main Street, Suite 202
Littleton, Colorado 80120
Telephone: (330) 558-2600
November 5, 2014
Dear Stockholder:
You are cordially invited to attend the 2014 Annual
Meeting of Stockholders of American Eagle Energy Corporation (the “Company”), which will be held on Friday, December
5, 2014, at 10 a.m., Mountain Standard Time, at the Company’s offices located at 2549 W. Main Street, Suite 202, Littleton,
Colorado 80120.
The attached Notice of Annual Meeting and Proxy Statement
describe the matters that we expect to be acted upon at the Annual Meeting. Management will be available to answer any questions
you may have immediately after the Annual Meeting.
The Company has enclosed a copy of its Annual Report
on Form 10-K for the fiscal year ended December 31, 2013 with this Notice of Annual Meeting of Stockholders and Proxy Statement.
If you would like another copy of the 2013 Annual Report, please email ir@amzgcorp.com or visit the Company’s website at
www.americaneagleenergy.com.
Whether or not you choose to attend the Annual Meeting,
it is important that your shares be represented. Regardless of the number of shares you own, please vote your shares via telephone,
over the Internet, or sign and date the enclosed proxy card and promptly return it to us in the enclosed postage-paid envelope.
If you sign and return your proxy card without specifying your votes, your shares will be voted in accordance with the recommendations
of the Board of Directors contained in the Proxy Statement.
Sincerely,
/s/ Bradley M. Colby
Bradley M. Colby
President and Chief Executive Officer
American Eagle Energy Corporation
2549 W. Main Street, Suite
202
Littleton, Colorado 80120
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
December 5, 2014
The Annual Meeting of Stockholders
of American Eagle Energy Corporation., a Nevada corporation, will be held on Friday, December 5, 2014, at 10 a.m., Mountain Standard
Time, at the Company’s offices located at 2549 W. Main Street, Suite 202, Littleton, Colorado 80120, for the following purposes:
| |
1. |
To elect six directors; |
| |
2. |
To ratify the appointment of Hein & Associates LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2014; |
| |
3. |
To approve the American Eagle Energy Corporation 2013 Equity Incentive Plan; and |
| |
4. |
To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. |
The Board of Directors has fixed
the close of business on October 20, 2014 as the record date for the determination of stockholders entitled to notice of, and to
vote at, the Annual Meeting or any adjournment or postponement thereof.
By Order of the Board of Directors
/s/ Laura Peterson
Laura Peterson
Secretary
November 5, 2014
Even if you expect to attend the Annual Meeting, please promptly
complete, sign, date and mail the enclosed proxy card. A self-addressed envelope is enclosed for your convenience. No postage is
required if mailed in the United States. Stockholders who attend the Annual Meeting may revoke their proxy and vote in person if
they so desire. In addition, registered stockholders can cast their vote electronically at http://www.hivedms.com/AEE.
Important notice
regarding the availability of proxy materials for the stockholder meeting to be held on DECEMBER 5, 2014: This Proxy
Statement, proxy card, and the Company’s Annual Report on Form 10-K are also available, free of charge, at http://www.hivedms.com/AEE.
AMERICAN EAGLE ENERGY CORPORATION
2549 W. Main Street, Suite
202
Littleton, Colorado 80120
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished
in connection with the solicitation by the Board of Directors (the “Board”) of American Eagle Energy Corporation, a
Nevada corporation (the “Company”), of proxies to be used at the Annual Meeting of Stockholders of the Company to be
held on December 5, 2014 (the “Annual Meeting”). This Proxy Statement and the related proxy card and Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2013 are being mailed or made available via the Internet to stockholders
commencing on or about November 5, 2014.
PROXIES AND VOTING
Stockholders of record of the
Company at the close of business on October 20, 2014 (the “Record Date”) will be entitled to vote at the Annual Meeting.
On that date, 30,448,714 shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”) were
outstanding and entitled to vote. Each share of Common Stock is entitled to one vote at the meeting.
Voting
If the enclosed proxy card is
executed and returned, the shares represented by it will be voted as directed on all matters properly coming before the Annual
Meeting for a vote. Returning your completed proxy card will not prevent you from voting in person at the Annual Meeting should
you be present and desire to do so. If your shares are registered directly in your name with the Company’s transfer agent,
Interwest Transfer Company, Inc., you are considered the stockholder of record with respect to those shares and you may cast your
vote in person at the meeting or by any one of the following ways:
By Telephone: You may call
the toll-free number indicated on your proxy card. Follow the simple instructions and use the personalized control number specified
on your proxy card to vote your shares. You will be able to confirm that your vote has been properly recorded. Your telephone vote
authorizes the named proxies to vote your shares in the same manner as if you had marked, signed, and returned a proxy card.
Over the Internet: You
may visit the website indicated on your proxy card. Follow the simple instructions and use the personalized control number specified
on your proxy card to vote your shares. You will be able to confirm that your vote has been properly recorded. Your Internet vote
authorizes the named proxies to vote your shares in the same manner as if you had marked, signed, and returned a proxy card.
By Mail: You may mark,
sign, and date the enclosed proxy card and return it in the postage-paid envelope provided.
If your shares of Common Stock
are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the “beneficial
owner” of shares held in “street name.” The organization holding your account is considered the stockholder of
record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to instruct that organization on
how to vote the shares held in your account. If you request printed copies of these proxy materials by mail, you will receive a
voting instruction form.
Proxy Revocation
Any proxy given pursuant to this
solicitation may be revoked by the person giving it at any time before it is voted at the Annual Meeting. Proxies may be revoked
by (i) delivering to the Secretary of the Company, before the taking of the vote at the Annual Meeting, a written notice of revocation
bearing a later date than the proxy, (ii) duly completing a later-dated proxy card relating to the same shares and presenting it
to the Secretary of the Company before the taking of the vote at the Annual Meeting, or (iii) attending the Annual Meeting and
voting in person (although attendance at the Annual Meeting will not in and of itself constitute a revocation of a proxy). Any
written notice of revocation or subsequent proxy should be delivered to the Company’s Secretary at the Company’s principal
executive offices, the address of which is noted on the Notice of Annual Meeting, or hand delivered to the Secretary of the Company,
in either case before the taking of the vote at the Annual Meeting.
Quorum
The holders of a majority of the
total number of outstanding shares of Common Stock entitled to vote must be present in person or by proxy to constitute the necessary
quorum for any business to be transacted at the Annual Meeting. The inspectors of election appointed for the Annual Meeting will
determine whether a quorum is present. Broker non-votes will be considered “present” for purposes of determining whether
a quorum has been achieved at the Annual Meeting. Shares that abstain from voting on any proposal and “broker non-votes”
will be counted as shares that are present and entitled to vote for purposes of determining whether a quorum exists at the Annual
Meeting. For purposes of determining the outcome of any matter as to which a broker (or other nominee) has not received instructions,
and for which it does not have discretionary voting authority, those shares will be treated as not present and not entitled to
vote with respect to that matter (even though those shares are considered entitled to vote for purposes of determining whether
a quorum exists and may be entitled to vote on other matters). For proposals that require a majority of votes outstanding to pass,
these shares will be treated as voted “against” such proposal.
Required Votes
The nominees for Director receiving
the greatest number of votes cast at the Annual Meeting in person or by proxy will be elected. Consequently, any shares of Common
Stock present in person or by proxy at the Annual Meeting, but not voted for any reason, have no impact in the election of Directors.
Stockholders have no right to cumulative voting as to any matter, including the election of Directors.
Regarding the proposal to ratify the appointment
of Hein & Associates LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2014
and the proposal to approve the American Eagle Energy Corporation 2013 Equity Incentive Plan, an affirmative vote of a majority
of the shares present in person or by proxy and entitled to vote is required for approval. Abstentions will have the same effect
as votes against the proposal. Broker non-votes will not be considered shares present and entitled to vote on the proposal and
will not have a positive or negative effect on the outcome of this proposal.
PROPOSAL ONE:
ELECTION OF DIRECTORS
At the Annual Meeting, stockholders
will consider the election of three Directors for terms ending at the next annual meeting of stockholders and/or until their respective
successors are duly elected and qualified. The following pages contains information about the Company’s Directors, including
the nominees for re-election, the Director whose term expires at this meeting and will not stand for re-election and an individual
not yet a Director who has been nominated for election to our Board.
The current terms of office for
Messrs. Anderson, Colby, Findley, Rumler and Whyte will expire on the day of the Annual Meeting (as soon as they or their successors
are elected). Our Board has nominated each of these incumbents for re-election at the Annual Meeting to hold office until the next
annual meeting of stockholders and/or until their respective successors are duly elected and qualified. In addition, our Board
has nominated Bruce Poignant for election at this Annual Meeting. Mr. Calerich, whose term expires on the day of the Annual Meeting,
will not stand for re-election.
If any nominee becomes unavailable
for any reason before the election, which event is not anticipated, the proxies will be voted for the election of such other person
as a Director as our Board may recommend.
THE BOARD
RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE ELECTION OF THE NOMINEES NAMED BELOW.
NOMINEES FOR DIRECTORS
Following is information about
the six Directors nominated for election or re-election, as applicable, as this Annual Meeting:
| Name |
|
Director Since |
|
Age |
|
Position(s) |
| John Anderson |
|
2005 |
|
50 |
|
Director |
| Bradley M. Colby |
|
2005 |
|
58 |
|
Director |
| Richard Findley |
|
2011 |
|
63 |
|
Director (Chairman of the Board) |
| Paul E. Rumler |
|
2007 |
|
61 |
|
Director |
| James N. Whyte |
|
2014 |
|
56 |
|
Director |
| Bruce Poignant |
|
-- |
|
51 |
|
Director |
John Anderson – Mr. Anderson
was appointed as one of our directors on November 4, 2005. From December 1994 to the present, he has served as President
of Purplefish Capital Ltd., a personal consulting and investing company primarily involved in capital raising for private and public
companies in North America, Europe, and Asia. Mr. Anderson was the founder and General Partner of Aquastone Capital Partners
LLC, a New York-based private gold and special situations fund, which successfully operated from 2006-2009. He serves as
a director for the following publicly traded natural resources companies with operations around the world:
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· |
Cadan Resources Corp. (TSX – Venture Exchange), a gold and copper producing company operating in the Philippines – director since February 2007, becoming the Chairman of the Board in January 2010 and serving as its Executive Chairman in from October 2010 through May 2013, after all permits were granted and construction was completed. |
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· |
Dawson Gold Corporation (TSX – Venture Exchange), a mineral exploration company – director since March 2008. |
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· |
Huakan International Mining, Inc. (TSX – Venture Exchange), a gold and exploration company in British Columbia, Canada and Washington State – director from June 2010 through April 2013. |
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· |
Northern Freegold Resources Ltd. (TSX – Venture Exchange), a gold exploration and development company in Yukon, Canada – director since January 2010. Appointed Chairman in 2012. |
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· |
Sona Resource Corp. (TSX – Venture Exchange), a mine development company – director since June 2006. |
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¨ |
Huakan International Mining, Inc. (TSX – Venture Exchange), a gold and exploration company in British Columbia, Canada and Washington State – director from June 2010 through April 2013. |
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¨ |
Northern Freegold Resources Ltd. (TSX – Venture Exchange), a gold exploration and development company in Yukon, Canada – director since January 2010. Appointed Chairman in 2012. |
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¨ |
Sona Resource Corp. (TSX – Venture Exchange), a mine development company – director since June 2006. |
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¨ |
Strategic Resources Ltd. (Other OTC), a Nevada company in the business of exploring, acquiring and developing advanced precious metals and base metal properties – President, Chief Executive Officer, Secretary and Treasurer and a director since May 2004. |
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¨ |
Wescorp Energy, Inc. (OTC Bulletin Board), an oil and gas operations solution and engineering company – director between October 2001 and May 2009, Secretary and Treasurer from April 2003 to May 2009 and President and Chief Executive Officer between March 2003 and May 2004. |
We believe Mr. Anderson’s qualifications
to serve on our Board include his leadership roles in various businesses and knowledge and experience gained from serving on the
boards of various public companies.
Bradley M. Colby – Mr. Colby
was appointed as our President, Chief Executive Officer, and Treasurer and as one of our directors on November 4, 2005. From November
2010 until January 1, 2012, he also served as our Chief Financial and Accounting Officer. For the four years prior to joining us,
Mr. Colby was a principal at Westport Petroleum, Inc., where he bought and sold producing properties for his own account. Mr. Colby
received a BS in Business-Minerals Land Management from the University of Colorado in 1979 and studied petroleum engineering at
the Colorado School of Mines. We believe Mr. Colby’s qualifications to serve on our Board include his extensive understanding
of the Company’s business and his education and experience in the energy industry.
Richard (“Dick”) Findley
– Mr. Findley was appointed as our Chairman of the Board of Directors immediately following the closing of the consummation
of our merger with American Eagle Energy Inc. (“AEE Inc.”) in December 2011 (the “2011 Merger”). Prior
to the closing of the 2011 Merger and since December 14, 2009, he served as the President, Secretary, Treasurer, and sole director
of AEE Inc. Mr. Findley is a geologist engaged in exploration for oil and gas. His 39-year career began in February 1975 with Tenneco
Oil Company, located in Denver, Colorado, and continued with Patrick Petroleum, located in Billings, Montana, in January 1978.
Mr. Findley formed Prospector Oil, Inc. in September 1983 to build an independent company working within the Williston Basin and
Northern Rockies. He served as Chairman of the Board for Ryland, a company engaged in Bakken exploitation in Saskatchewan and North
Dakota, from June 2007 until November 2007 and he served as a board member for RPT Uranium Inc. from July 2008 until June 2009.
From October 19, 2010 to March 12, 2012, Mr. Findley served as an Executive Director of Passport, a Canadian resources company
traded on the Canadian National Stock Exchange.
Mr. Findley has been credited with the discovery
of Elm Coulee Field, which has been ranked as the 23rd largest oil field in terms of liquid proved reserves in the United States
and is also the analogy for the Bakken Play in Montana, North Dakota, and Canada. His story has been featured in the Wall Street
Journal and the Canadian National Post, as well as other international papers in Italy and the Netherlands. He has also
been the subject in oil and gas trade journals, including the American Oil and Gas Reporter, Petroleum Intelligence Weekly,
and the AAPG Explorer magazine.
Mr. Findley holds a BS (1973) and an MS
(1975) from Texas A&M University. He was awarded a Tenneco Fellowship Grant from 1973 to 1975 and received a best paper award
– Third Place, Gulf Coast Association of Geological Societies in 1973. He also received the Michel T. Halbouty Fellowship
in 1974. In December 2006, Texas A&M awarded him the Michel Halbouty Medal for distinguished achievement in geosciences and
earth resources exploration development and conservation following the discovery of Elm Coulee. Mr. Findley has been a member of
the American Association of Petroleum Geologists since 1974 and received its “Outstanding Explorer Award” in 2006 for
his discovery of Elm Coulee Field. We believe Mr. Findley’s qualifications to serve on our Board include his expertise in
the energy field and his service as a director and an executive for several businesses.
Paul E. Rumler – Mr.
Rumler was appointed as one of our directors on July 26, 2007, and was our corporate Secretary between October 22, 2007 and October
31, 2014. Mr. Rumler also served as the sole member of our Special Committee that reviewed and evaluated the transactions that
ultimately became the 2011 Merger. For more than the preceding five years, Mr. Rumler has been the principal stockholder and the
managing stockholder at Rumler Tarbox Lyden Law Corporation, PC, in Denver, Colorado. He is a business attorney, whose areas of
practice include general corporate and business planning matters and mergers and acquisitions, primarily in the closely held market
place. Mr. Rumler is also a stockholder and a member of the board of directors of Stargate International, Inc., a manufacturer
located in the Denver, Colorado, metropolitan area. We believe Mr. Rumler’s qualifications to serve on our Board include
his experience with corporate legal matters and his years of leadership with the Company.
James N. Whyte – Mr. Whyte
has served as Executive Vice President of Human Resources and Risk Management of Intrepid Potash, Inc., a public company whose
common stock is listed on the NYSE, since December 2007. Prior to that time, Mr. Whyte served as the Vice President of Human Resources
and Risk Management for Intrepid Mining LLC, a wholly-owned subsidiary of Intrepid Potash, Inc., since May 2004. Prior to joining
Intrepid Potash, Inc., he spent 17 years in the property and casualty insurance industry, including roles with Marsh and McLennan,
Incorporated, American Re-Insurance, and a private insurance brokerage firm that he founded. We believe Mr. Whyte’s qualifications
to serve on our Board include his experience in senior management positions and his extensive knowledge base related to human resources
and risk management activities.
Bruce Poignant – Mr. Poignant
has served in a variety of positions at the New York Stock Exchange (the “NYSE”), most recently, through August of
2014, as Managing Director in the NYSE’s Capital Markets Group. Prior to the NYSE’s 2008 acquisition of the American
Stock Exchange (the “Amex”), Mr. Poignant served, among other positions, as a Vice President of the Amex. Since leaving
the NYSE, he has been a senior consultant to Donohoe Advisory Associates LLC, principally focused on assisting reporting issuers
with the listing processes for a primary stock exchange. During more than 20 years at the NYSE and the Amex, Mr. Poignant worked
with listed and prospectively listed companies with regulatory and compliance issues, including their ongoing disclosure compliance
and corporate governance issues, as well as assisting numerous companies, both public and private, with their IPO readiness and
navigation through the exchange’s original listing process. Working closely with the regulatory arms of the NYSE and, before
that, the Amex, he would counsel companies on compliance with listing standards and the applicability of standards, processes,
and timelines. Prior to his more than two decades at the NYSE and the Amex, Mr. Poignant spent three years at Dean Witter Reynolds
in its operations and retail units. Mr. Poignant received a BS in the School of Education & Human Services from Montclair State
University in 1986 and a Masters in Public Administration from the Dyson School at Pace University in 2002. We believe Mr. Poignant’s
qualifications to serve on our Board include his extensive experience with listed companies’ regulatory and compliance issues,
including financial reporting and ongoing disclosure compliance and corporate governance issues.
DIRECTOR NOT STANDING FOR RE-ELECTION
Mr. Calerich’s term of office expires
on the day of the Annual Meeting and he will not stand for re-election.
Andrew
P. Calerich – Mr. Calerich, 49, was appointed as one of our directors on February 21, 2012. He held various positions,
including president, chief financial officer, and director, of American Oil & Gas Inc. from July 2003 until its merger into
Hess Bakken Investments I Corporation (a wholly-owned subsidiary of Hess Corporation) in December 2010. Prior to the merger, American
Oil & Gas Inc. was a publicly traded independent oil and gas exploration and production company that was engaged in the acquisition
of oil and gas mineral leases and the exploration and development of crude oil and natural gas reserves and production, most recently
in the Williston Basin of North Dakota and Montana. Since the merger, he has been on sabbatical from full-time employment. During
his 20-year professional career, Mr. Calerich has served public companies engaged in upstream oil and gas businesses in a variety
of capacities, most recently (January 2011) becoming an independent director for Earthstone Energy, Inc., a Delaware corporation,
whose common stock is listed on the NYSE MKT. Earthstone is primarily engaged in the exploration, development, and production of
oil and natural gas properties, whose operating activities are concentrated in the North Dakota and Montana portions of the Williston
basin and the southern portions of Texas. Mr. Calerich holds an inactive Certified Public Accountant license and earned BS degrees
in both Accounting and Business Administration at Regis College, in Denver. We believe Mr. Calerich’s qualifications to serve
on our Board include his extensive industry experience and accounting background.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Director Independence
Our Board reviews the independence of each
Director at least annually. During these reviews, the Board will consider transactions and relationships between each Director
(and his immediate family and affiliates) and the Company and our management to determine whether any such transactions or relationships
are inconsistent with a determination that the Director was independent. The Board determined that Messrs. Anderson, Calerich and
Whyte are independent directors. The determination of independence of directors has been made using the definition of “independent
director” contained in Section 803A of the NYSE MKT LLC Company Guide.
Board Meetings
Our Board held 11 formal meetings during
the year ended December 31, 2013, at which each then-elected Director was present. All other proceedings of our Board were conducted
by resolutions consented to in writing by all of the Directors and filed with the minutes of the proceedings of our Board.
Attendance at Annual Meeting
Although the Company does not have a policy
with respect to attendance by members of our Board at its annual meeting of stockholders, Directors are encouraged to attend.
Committees
Following consummation of the 2011 Merger,
our Board established three committees: the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance
Committee.
Audit Committee. Messrs. Anderson,
Calerich, and Whyte, each of whom qualifies as an “independent director” within the meaning of Section 803A of the
NYSE MKT Company Guide and Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), served
on the Audit Committee throughout 2013. The Audit Committee is responsible for oversight of the integrity of the Company’s
financial statements, the selection and retention of our independent registered public accounting firm, review of the scope of
their audit function, and review of the audit reports rendered by them. The Audit Committee is not responsible for conducting audits,
preparing financial statements, or the accuracy of any financial statements or filings, all of which remain the responsibility
of management and our independent registered public accounting firm. Effective October 10, 2014, our Board designated Mr. Anderson
as the Audit Committee’s Chairman and named financial expert as defined in Section 407 of the Sarbanes-Oxley Act and the
Security and Exchange Commission rules under that statute. Prior to that date, Mr. Calerich served in that role from the inception
of the Audit Committee. The charter of the Audit Committee may be found on our website (www.americaneagleenergy.com). The Audit
Committee held 5 meetings during 2013.
Compensation
Committee. Messrs. Anderson, Calerich, and Rumler served on the Compensation Committee during 2013. On November 4, 2014,
our Board elected James N. Whyte as Chairman of the Compensation Committee given his experience and extensive knowledge base related
to human resources and risk management. Messrs. Rumler (the committee’s former Chairman) and Anderson will remain
the other two members of the Compensation Committee, as Mr. Calerich steps down. The Compensation Committee is responsible for
reviewing and approving our goals and objectives relevant to compensation, evaluating the performance of our senior executive
officers (including our Chief Executive Officer) with respect to such goals and objectives, approving the compensation of our
senior executive officers (including our Chief Executive Officer), and overseeing our compensation and benefits policies. The
charter of the Compensation Committee may be found on our website (www.americaneagleenergy.com). As noted in his biography
above, Mr. Rumler has been our corporate secretary (until October 31, 2014) and one of our directors since 2007. He became
a member of the Compensation Committee upon its formation in 2011. For NYSE MKT purposes, Mr. Rumler’s prior service
as our corporate secretary may preclude a determination that his status is as an “independent director.” As
part of our listing application process with the NYSE MKT, we utilized certain exemptions that permitted Mr. Rumler to serve on
such Committee until November 20, 2015 (two years from the date of our listing). That exemption requires us to disclose
that our Board determined that our best interests and those of our stockholders require Mr. Rumler’s membership on
the Compensation Committee. In that context, we believe that his perspective and historical knowledge of our operations
and the enhancement of our economic value brought about through the efforts of management, as we continue to mature as an enterprise,
warrant his membership on this Committee during such two-year period. The Compensation Committee held 1 meeting during 2013.
Nominating and Corporate Governance Committee.
Messrs. Anderson, Calerich, and Rumler served on the Nominating and Corporate Governance Committee throughout 2013. The Nominating
and Corporate Governance Committee is responsible for recommending corporate governance principles and a code of conduct and ethics
to our Board, overseeing adherence to the corporate governance principles adopted by our Board, recommending policies for compensation
of Directors, recommending criteria and qualifications for new Directors, and recommending individuals to be nominated as Directors
and committee members. This function includes evaluation of the new candidates, as well as evaluation of qualifications of the
current Directors. Our Board has designated Mr. Rumler as the Nominating and Corporate Governance Committee’s Chairman. As
noted in his biography above, Mr. Rumler has been our corporate secretary (until October 31, 2014) and one of our Directors since
2007. He became a member of the Nominating and Corporate Governance Committee upon its formation in 2011. For NYSE MKT purposes,
Mr. Rumler’s prior service as our corporate secretary may preclude a determination that his status is as an “independent
director.” As part of our listing application process with the NYSE MKT, we utilized certain exemptions that permitted Mr. Rumler
to serve on such Committee until November 20, 2015 (two years from the date of our listing). That exemption requires us to disclose
that our best interests and those of our stockholders require Mr. Rumler’s membership on the Nominating and Corporate Governance
Committee. In that context, we believe that his perspective and historical knowledge of our operations and our changing and developing
needs in respect of the types of persons whom we believe would be assets on our Board warrant his membership on this Committee
during such two-year period. The Nominating and Corporate Governance Committee did not hold any meetings during 2013.
The Nominating and Corporate Governance
Committee will consider nominees for Director recommended by our stockholders. A stockholder’s recommendation must be submitted
in writing to: Nominating and Corporate Governance Committee, American Eagle Energy Corporation, 2459 W. Main Street, Suite 202,
Littleton, Colorado 80120. The recommendation should include the nominee’s name and biography. The Nominating and Corporate
Governance Committee may also require a candidate to furnish additional information regarding his or her eligibility and qualifications.
The charter of the Nominating and Corporate Governance Committee may be found on our website (www.americaneagleenergy.com).
Board Leadership Structure
Our Board does not have a formal policy
on whether the roles of Chief Executive Officer and Chairman of the Board should be separate. However, Mr. Colby currently serves
as our President and Chief Executive Officer and Mr. Findley serves as our Chairman of the Board. Our Board has considered its
leadership structure and believes at this time that the Company and its stockholders are best served by having separate individuals
in these positions. Our Board expects to review its leadership structure periodically to ensure that it continues to meet our needs.
The Board’s Role in Risk Oversight
Our Board oversees the risk management of
the Company. The full Board, as supplemented by the appropriate Board committee in the case of risks that are overseen by a particular
committee, reviews information provided by management in order for Our Board to oversee risk identification, risk management, and
risk mitigation strategies. Our Board committees assist the full Board’s oversight of our material risks by focusing on risks
related to the particular area of concentration of the relevant committee. For example, our Compensation Committee oversees risks
related to our executive compensation plans and arrangements; our Audit Committee oversees the financial reporting and control
risks; and our Nominating and Corporate Governance Committee oversees risks associated with the independence of our Board and potential
conflicts of interest. Each committee reports on these discussions of the applicable relevant risks to our full Board during the
committee reports portion of each Board meeting, as appropriate. Our full Board incorporates the insight provided by these reports
into its overall risk management analysis.
Code of Ethics
We adopted a Code of Conduct and Ethics
that applies to all of our Directors, executive officers, and employees. A copy of our Code of Conduct and Ethics is available
on our website (www.americaneagleenergy.com) and is also available free of charge by writing to: Investor Relations, American Eagle
Energy Corporation, 2459 W. Main Street, Suite 202, Littleton, Colorado 80120. Our Nominating and Corporate Governance Committee
is responsible for the review and oversight of our ethical policies. Our management believes our Code of Conduct and Ethics is
reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely, and understandable
disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability
for adherence to the Code. Any amendment, exception or waiver to the Code of Conduct and Ethics with respect to a Director or an
executive officer must be approved by our Board and any amendment, exception, or wavier for other employees must be approved by
the Nominating and Corporate Governance Committee. In addition, a description of any exception, amendment, or waiver to the Code
of Conduct and Ethics with respect to the Chief Executive Officer, Chief Financial Officer, our principal accounting officer, controller,
or persons performing similar functions will be posted on our website within four business days following the date of such exception,
amendment, or waiver.
Communication with the Board of Directors
Security holders may send communications
to Board by writing to American Eagle Energy Corporation, 2549 West Main Street, Suite 202, Littleton, Colorado 80120, attention:
Board of Directors or to any specified Director. Any correspondence received at the foregoing address to the attention of one
or more Directors is promptly forwarded to such Director or Directors.
Certain Relationships and Related Transactions
Power Energy Partners Ltd.
The Company is under contract through February
2015 to sell 100% of its oil, gas, and liquids production to Power Energy Partners, Ltd. In January 2014, Power Energy purchased
1,000,000 shares of our common stock at price of $4.00 per share via a private placement. In August 2013, Power Energy purchased
an additional 1,250,000 shares of Common Stock at a price of $8.00 per share via a public offering.
Synergy Resources LLC
In January 2010, AEE Inc. engaged Synergy
Resources LLC, a privately-held company (“Synergy”), to provide geological and engineering consulting services. Mr.
Findley, who currently serves as a Director of the Company, and Mr. Lantz, who currently serves as Chief Operating Officer of the
Company, are each a member of Synergy. We purchased $168,000 of consulting fees from Synergy during each of the years ended December
31, 2013 and 2012. Synergy and we mutually terminated the services agreement as of June 30, 2014.
Paul E. Rumler
We routinely obtain legal services from
a firm for which Mr. Rumler, one of our Directors, serves as a principal. Fees paid this firm totaled $36,528 and $23,644 for the
years ended December 31, 2013 and 2012, respectively.
Richard Findley
Mr. Findley, our Chairman, owns overriding
royalty interests in certain of our operated wells. The overriding royalty interests were obtained prior to the Company’s
acquisition of AEE Inc. in December 2011. Revenues paid to Mr. Findley totaled $608,455 and $67,426 for the years ended December
31, 2013 and 2012, respectively.
Thomas G. Lantz
Mr. Lantz, our Chief Operating Officer,
owns overriding royalty interests in certain of our operated wells. The overriding royalty interests were obtained prior to the
Company’s acquisition of AEE Inc. in December 2011. Revenues paid to Mr. Lantz totaled $540,009 and $51,858 for the years
ended December 31, 2013 and 2012, respectively.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table provides information
relating to compensation for the Company’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer (collectively,
the “Named Executive Officers”) for the fiscal years ended December 31, 2013 and 2012.
| Name and Principal Position | |
Year | |
Salary
($) | | |
Bonus
($) | | |
Stock Awards
($) | | |
Option Awards
($)(1) | | |
Non-Equity Incentive Plan Compensation
($) | | |
Nonqualified Deferred Compensation Earnings
($) | | |
All Other Compensation
($) | | |
Total
($) | |
| Bradley M. Colby | |
2013 | |
| 252,000 | | |
| 400,000 | | |
| — | | |
| 325,650 | | |
| — | | |
| — | | |
| — | | |
| 977,650 | |
| President, CEO, and Treasurer | |
2012 | |
| 204,000 | | |
| 100,000 | | |
| — | | |
| 100,395 | | |
| — | | |
| — | | |
| — | | |
| 404,395 | |
| Kirk A. Stingley | |
2013 | |
| 165,000 | | |
| 40,000 | | |
| — | | |
| 97,695 | | |
| — | | |
| — | | |
| — | | |
| 302,695 | |
| Chief Financial Officer | |
2012 | |
| 150,000 | | |
| 30,000 | | |
| — | | |
| 22,310 | | |
| — | | |
| — | | |
| — | | |
| 202,310 | |
| Thomas G. Lantz | |
2013 | |
| 252,000 | | |
| 100,000 | | |
| — | | |
| 244,238 | | |
| — | | |
| — | | |
| — | | |
| 596,238 | |
| Chief Operating Officer | |
2012 | |
| 204,000 | | |
| 100,000 | | |
| — | | |
| 44,620 | | |
| — | | |
| — | | |
| — | | |
| 348,620 | |
| (1) | The amounts reported in the “Option Awards” column of the table above reflect the
aggregate dollar amounts recognized for option awards for financial statement reporting purposes with respect to our 2013 and 2012
fiscal years. For a discussion of the assumptions and methodologies used to value the awards reported in table above, please see
the discussion of option awards contained in Note 12 (Equity Transactions – Stock Options) to our Consolidated Financial
Statements, which is included in Item 8 of our 2013 Annual Report. |
Narrative Disclosure to Summary
Compensation Table
Overview
The following should be read
in conjunction with the information presented in the compensation tables, the footnotes to those tables and the related disclosures
appearing elsewhere in this Proxy Statement. The tables and related disclosures contain specific information about the compensation
earned or paid during the fiscal years ended December 31, 2013 and 2012 to the Named Executive Officers.
The compensation and benefits
payable to the Company’s executive officers are established by the Compensation Committee (the “Committee”) of
our Board. For the fiscal year ended December 31, 2013, the Committee consisted of three members: Messrs. Anderson, Calerich, and
Rumler (Chairman).
The Committee held 1 meeting during
fiscal 2013. Agendas for the meetings were established by the Chairman of the Committee. The Committee generally invites the Company’s
Chief Executive Officer to the meetings, and occasionally invites other members of senior management to provide relevant data and
information, individual performance assessment and compensation recommendations. In addition, the Committee regularly meets in
executive session without management. Because the Committee is satisfied with its experience in the Company’s industry and
has reviewed publicly available information regarding the compensation of executives of similar companies in the industry, the
Committee has not engaged a corporate compensation consultant.
Compensation Philosophy
The Company’s basic objectives
for executive compensation are to recruit and keep top quality executive leadership focused on attaining long-term corporate goals
and increasing stockholder value.
Employment Agreements and
Change of Control Agreements
We have entered into written employment
agreements with each of Named Executive Officers, the material terms of which are:
| Officer | |
Annual Compensation | | |
Term | |
Expiration Date |
| Bradley M. Colby | |
$ | 350,000 | | |
3 Years | |
04/30/2016 |
| Kirk A. Stingley | |
$ | 185,000 | | |
2 Years | |
04/30/2015 |
| Thomas G. Lantz | |
$ | 300,000 | | |
3 Years | |
04/30/2016 |
In the event that we terminate Mr. Colby’s
or Mr. Lantz’s employment “without cause” or such officer terminates his employment “for good reason,”
as each such term is defined in his respective employment agreement, then such individual would be entitled to the following benefits:
(i) payment of all accrued salary through the date of such termination, payment for all accrued, but unused, vacation, and reimbursement
of all business expenses; (ii) upon the signing and delivering to us of a general release of all claims against us, a severance
payment equal to one times his then-current annual base salary; and (iii) continuation of group health, vision, and dental
benefits in accordance with the relevant benefit plan. If, upon or within 12 months of a “change of control,” as such
term is defined in his respective employment agreement, such individual’s employment is terminated “without cause”
or “for good reason,” then such individual would be entitled to the following benefits: (i) payment of all accrued
salary through the date of such termination, payment for all accrued, but unused, vacation, and reimbursement of all business expenses;
(ii) upon the signing and delivering to us of a general release of all claims against us, a severance payment equal to two times
his then-current annual base salary; and (iii) continuation of group health, vision, and dental benefits in accordance with the
relevant benefit plan. If, within 60 days of a “change of control,” such individual terminates his employment for any
reason other than “for good reason,” then such individual would be entitled to the following benefits: (i) payment
of all accrued salary through the date of such termination, payment for all accrued, but unused, vacation, and reimbursement of
all business expenses; (ii) upon the signing and delivering to us of a general release of all claims against us, a severance payment
equal to two times his then-current annual base salary; and (iii) continuation of group health, vision, and dental benefits in
accordance with the relevant benefit plan. We may also terminate such officer’s employment “for cause,” as such
term is defined in his respective employment agreement. In such event, such individual would be entitled to receive payment of
all accrued salary through the date of such termination, payment for all accrued, but unused, vacation, and reimbursement of all
business expenses.
In the event that we terminate Mr. Stingley’s
employment “without cause” or he terminates his employment “for good reason,” as each such term is defined
in his employment agreement, then he would be entitled to the following benefits: (i) payment of all accrued salary through the
date of such termination, payment for all accrued, but unused, vacation, and reimbursement of all business expenses; (ii) upon
the signing and delivering to us of a general release of all claims against us, a severance payment equal to one-half times his
then-current annual base salary; and (iii) continuation of group health, vision, and dental benefits in accordance with the relevant
benefit plan. If, upon or within 12 months of a “change of control,” as such term is defined in his respective employment
agreement, his employment is terminated “without cause” or “for good reason,” then he would be entitled
to the following benefits: (i) payment of all accrued salary through the date of such termination, payment for all accrued, but
unused, vacation, and reimbursement of all business expenses; (ii) upon the signing and delivering to us of a general release of
all claims against us, a severance payment equal to his then-current annual base salary; and (iii) continuation of group health,
vision, and dental benefits in accordance with the relevant benefit plan. If, within 60 days of a “change of control,”
he terminates his employment for any reason other than “for good reason,” then he would be entitled to the following
benefits: (i) payment of all accrued salary through the date of such termination, payment for all accrued, but unused, vacation,
and reimbursement of all business expenses; (ii) upon the signing and delivering to us of a general release of all claims
against us, a severance payment equal to one times his then-current annual base salary; and (iii) continuation of group health,
vision, and dental benefits in accordance with the relevant benefit plan. We may also terminate his employment “for cause,”
as such term is defined in his employment agreement. In such event, he would be entitled to receive payment of all accrued salary
through the date of such termination, payment for all accrued, but unused, vacation, and reimbursement of all business expenses.
Stock Option Grants to Management
During 2012, we granted five-year options
to purchase 440,000 shares of Common Stock to members of our management team, directors, employees, and/or key consultants. The
per-share exercise prices ranged from $2.88 to $4.72. Fifty percent of the stock options vest on the one-year anniversary of the
grant date, with the other fifty percent vesting on the two-year anniversary of the grant date, in each case subject to the grantee’s
continued service as a director, officer, employee, or consultant, as applicable, through such dates. The exercise price at which
these options were issued was equal to the average closing price of our Common Stock for the five-day period preceding the date
of grant.
During 2013, we granted five-year options
to purchase 648,125 shares of Common Stock to members of our management team, directors, employees, and/or key consultants. The
per-share exercise prices ranged from $2.76 to $9.56. Fifty percent of the stock options vest on the one-year anniversary of the
grant date, with the other fifty percent vesting on the two-year anniversary of the grant date, in each case subject to the grantee’s
continued service as a director, officer, employee, or consultant, as applicable, through such dates. The exercise price at which
these options were issued was equal to the average closing price of Common Stock for the 5-day period preceding the date of grant.
As of December 31, 2013, the following stock
options were outstanding and held by the Named Executive Officers:
Outstanding Equity Awards 2013
Fiscal Year-End
| Name | |
Number of Securities Underlying Unexercised Options Exercisable | | |
Number of Securities Underlying Unexercised Options Unexercisable | | |
Option Exercise Price | | |
Option Expiration Date |
| Bradley M. Colby | |
| 75,000 (5) | | |
| 75,000 | | |
$ | 8.68 | | |
12/12/2018 |
| | |
| 56,250 (4) | | |
| 56,250 | | |
$ | 2.96 | | |
12/13/2017 |
| | |
| 128,195 (1) | | |
| 128,195 | | |
$ | 0.90 | | |
10/30/2019 |
| | |
| 36,104 (1)(2) | | |
| 36,104 | | |
$ | 2.96 | | |
12/30/2015 |
| Kirk A. Stingley | |
| 22,500 (5) | | |
| 22,500 | | |
$ | 8.68 | | |
12/12/2018 |
| | |
| 12,500 (4) | | |
| 12,500 | | |
$ | 2.96 | | |
12/13/2017 |
| | |
| 37,500 (3) | | |
| 37,500 | | |
$ | 4.72 | | |
12/28/2016 |
| Thomas G. Lantz | |
| 56,250 (5) | | |
| 56,250 | | |
$ | 8.68 | | |
12/12/2018 |
| | |
| 56,250 (4) | | |
| 56,250 | | |
$ | 2.96 | | |
12/13/2017 |
| | |
| 108,312 (2) | | |
| 108,312 | | |
$ | 2.96 | | |
12/30/2015 |
| (1) | All options vested 100% and were exercisable immediately
upon grant. |
| (2) | These options were granted by the Company in exchange
for options to purchase shares of AEE Inc. common stock that were tendered in connection with the 2011 Merger. |
| (3) | Fifty percent of the options granted on December 28, 2011 vested on December 28, 2012, and fifty
percent of such options vested on December 28, 2013. |
| (4) | Fifty percent of the options granted on December 14, 2012 vested on December 14, 2013, and fifty
percent of such options vest on December 14, 2014, in each event subject to the grantee’s continued service as a director
or officer, as applicable, of the Company through such dates. |
| (5) | Fifty percent of the options granted on December 13, 2013 vest on December 13, 2014, and fifty
percent of such options vest on December 13, 2015, in each event subject to the grantee’s continued service as a director
or officer, as applicable, of the Company through such dates. |
Director Compensation
During fiscal year
2013, independent Directors were paid $2,000 for each board or committee meeting that they attended in person, and $1,000 for
each board or committee meeting in which they participated via telephone. Directors are reimbursed for reasonable travel expenses
incurred to participate in such meetings. Additionally, independent Directors were compensated in the amount of $5,000 for each
full calendar quarter the independent Director served on our Board and its committees.
Director Compensation for Fiscal Year 2013
The following table sets forth information
regarding fiscal year 2013 compensation for each Director other than Mr. Colby, whose compensation is set forth above under the
heading “Executive Compensation.”
| Name | |
Fees Earned or Paid in Cash | | |
Stock Awards | | |
Option Awards | | |
Non-Equity Incentive Plan Compensation | | |
Nonqualified Deferred Compensation Earnings | | |
All Other Compensation | | |
Total | |
| John D. Anderson | |
$ | 10,000 | | |
| | | |
$ | 162,825 | | |
| | | |
| | | |
| | | |
$ | 172,825 | |
| Andrew P. Calerich | |
$ | 11,000 | | |
| | | |
$ | 162,825 | | |
| | | |
| | | |
| | | |
$ | 173,825 | |
| Richard L. Findley | |
| - | | |
| | | |
$ | 54,275 | | |
| | | |
| | | |
| | | |
$ | 54,275 | |
| Paul E. Rumler | |
$ | 12,000 | | |
| | | |
$ | 162,825 | | |
| | | |
| | | |
| | | |
$ | 174,825 | |
| James N. Whyte | |
| - | | |
| | | |
$ | 54,275 | | |
| | | |
| | | |
| | | |
$ | 54,275 | |
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information
regarding the shares of Common Stock beneficially owned or deemed to be beneficially owned as of October 20, 2014 by: (i) each
person known to beneficially own more than 5% of our Common Stock, (ii) each of our directors, (iii) the Named Executive Officers,
and (iv) all the Directors and executive officers as a group.
Except as indicated by the footnotes below,
our management believes, based on the information furnished to us, that the persons and entities named in the table below have
sole voting and investment power with respect to all shares of Common Stock that they beneficially own, subject to applicable community
property laws.
Beneficial ownership of the Common
Stock has been determined for this purpose in accordance with the applicable rules and regulations promulgated under the Exchange
Act, and includes shares of our Common Stock subject to options or warrants held by that person that are currently exercisable
or exercisable within 60 days of October 20, 2014. We did not deem such shares outstanding, however, for the purpose of computing
the percentage ownership of any other person.
| Name of Beneficial Owner / Management and Address | |
Shares of Common Stock Beneficially Owned (1) | | |
Percent of Common Stock Beneficially Owned (1) | |
| Bradley M. Colby (2) | |
| 932,953 | | |
| 3.04 | % |
| Kirk A. Stingley (3) | |
| 64,421 | | |
| * | |
| Thomas G. Lantz (4) | |
| 702,252 | | |
| 2.29 | % |
| Richard L. Findley (5) | |
| 737,379 | | |
| 2.41 | % |
| John D. Anderson (6) | |
| 284,486 | | |
| * | |
| Andrew P. Calerich (7) | |
| 106,250 | | |
| * | |
| Paul E. Rumler (8) | |
| 141,540 | | |
| * | |
| James N. Whyte (9) | |
| 31,250 | | |
| * | |
| All directors and executive officers as a group (10) | |
| 3,000,531 | | |
| 9.79 | % |
| Five Percent Beneficial Owner: | |
| | | |
| | |
| Power Energy Partners LLC (11) | |
| 2,250,000 | | |
| 7.39 | % |
* Less than 1%
| (1) | The
applicable percentage ownership is based on 30,448,714 shares of Common Stock outstanding at October 20, 2014. The number of shares
of Common Stock owned are those “beneficially owned” as determined under the rules of the Securities and Exchange
Commission, including any shares of Common Stock as to which a person has sole or shared voting or investment power and any shares
of Common Stock which the person has the right to acquire within 60 days as of October 20, 2014 through the exercise of any option,
warrant or right. |
| (2) | Includes 629,955 shares owned by Mr.
Colby and an aggregate of 44,950 shares owned of record by his spouse and their minor child as to which he disclaims
beneficial ownership. Also
includes
258,048 shares underlying options that are exercisable within 60 days of October 20, 2014. The business address for this
person is 2549 W. Main Street, Suite 202, Littleton, Colorado 80120. |
| (3) | Includes
3,171 shares owned by Mr. Stingley and 61,250 shares underlying options that are exercisable within 60 days of October 20, 2014.
The business address for this person is 2549 W. Main Street, Suite 202, Littleton, Colorado 80120. |
| (4) | Includes
540,815 shares owned by Mr. Lantz. Also includes 161,437 shares underlying options that are exercisable within 60 days of October 20, 2014. The business address
for this person is 2549 W. Main Street, Suite 202, Littleton, Colorado 80120. |
| (5) | Includes
574,213 shares held by Golden Vista Energy, LLC (“Golden Vista”). Mr. Findley is the sole member of Golden Vista and
beneficially owns all of the shares held by Golden Vista. Also includes 163,166 shares underlying options that are exercisable
within 60 days of October 20, 2014. The business address for this person is 27 North 27th Street, Suite 21G, Billings, Montana
59101. |
| (6) | Includes
202,278 shares owned by Mr. Anderson and 82,208 shares underlying options that are exercisable within 60 days of October 20, 2014.
The business address for this person is 52 Powell Street, Suite 200, Vancouver, British Columbia V6A 1E7. |
| (7) | Includes
25,000 shares owned by Mr. Calerich and 81,250 shares underlying options that are exercisable within 60 days of October 20, 2014.
The business address for this person is PO Box 1571, Eastlake, Colorado 80614. |
| (8) | Includes
47,790 shares owned by Mr. Rumler and 93,750 shares underlying options that are exercisable within 60 days of October 20, 2014.
The business address for this person is 1777 South Harrison Street, Suite 1250, Denver, Colorado 80210. |
| (9) | Includes 31,250 shares underlying options that are exercisable within 60 days of October
20, 2014. The business address for this person is c/o Intrepid Potash, Inc., 707 17th Street, Suite 4200, Denver, Colorado 80202. |
| (10) | Includes
all shares and options referenced in notes 2 through 9. Bruce Poignant, who has been nominated to serve as a member of our Board,
does not, as of the Record Date, beneficially own any shares of Common Stock. |
| (11) | George
Archos is the managing member and has voting and dispositive power over these shares. Mr. Archos disclaims beneficial ownership
except to the extent of his pecuniary interests therein. The business address for this holder is 484 W. Wood Street, Palatine,
Illinois 60067. |
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange
Act requires officers, directors, and persons who own more than 10% of any class of our securities registered under Section 12(g)
of the Exchange Act to file reports of ownership and changes in ownership with the SEC. Officers, directors, and greater than 10%
stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. To our knowledge, based
solely on review of the copies of such reports furnished to us, during the fiscal year ended December 31, 2013, or with respect
to such fiscal year, all Section 16(a) filing requirements were met.
PROPOSAL TWO:
RATIFICATION OF THE APPOINTMENT OF OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Hein & Associates LLP (“Hein”)
served as independent registered public accounting firm to the Company in 2013 and is expected to be retained to serve in such
capacity in 2014. Our Board has directed management to submit the selection of the independent registered public accounting firm
for ratification by the stockholders at the Annual Meeting.
Although stockholder ratification of this
appointment is neither required by law nor binding on the Audit Committee, the Audit Committee believes that stockholders should
be given the opportunity to express their views. If the stockholders do not ratify the appointment of Hein as the Company’s
independent auditors, the Audit Committee will consider this vote in determining whether or not to continue the engagement of Hein.
Representatives of Hein will attend the Annual Meeting. They will have an opportunity to make a statement if they desire to do
so and will be available to respond to appropriate questions.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS
VOTE “FOR” THE RATIFICATION OF HEIN & ASSOCIATES LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FOR 2014.
Other Independent Registered Accounting
Firm Information
Principal Accounting Fees and Services
The aggregate fees billed for
professional services by Hein for the years ended December 31, 2013 and 2012 were as follows:
| Fee Category | |
2013 | | |
2012 | |
| Audit Fees | |
$ | 317,137 | | |
$ | 216,755 | |
| Audit-Related Fees | |
$ | 40,000 | | |
$ | — | |
| Tax Fees | |
$ | 34,100 | | |
$ | 68,071 | |
| All Other Fees | |
$ | — | | |
$ | — | |
| Total | |
$ | 391,237 | | |
$ | 284,826 | |
Audit Fees. Audit fees include fees billed in connection
with the audit of the Company’s annual financial statements and review of the Company’s quarterly financial statements,
as reported on Form 10-K, Form 10-Q and/or included in other registration statements, and related consents and comfort letters.
Audit-Related Fees. Audit-related fees includes fees
billed for assurance and related services related to the performance of the audit or review of the Company’s financial statements,
including participation in the Company’s Audit Committee meetings.
Tax Fees. Tax fees include fees associated with the performance
of tax compliance services, including the preparation of US Federal, US State and Canadian tax returns, tax advisory services and
tax planning services.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee has sole responsibility, in consultation
with management, for approving the terms and fees for the engagement of the independent registered public accounting firm for audits
of the Company’s financial statements and internal control over financial reporting. In addition, the Audit Committee has
sole responsibility for determining whether and under what circumstances the Company’s independent registered public accounting
firm may be engaged to perform audit-related and non-audit services and must pre-approve any audit-related and non-audit services
performed by the independent registered public accounting firm consistent with applicable regulations. Under no circumstance is
the Company’s independent registered public accounting firm permitted to perform services of the nature described in Section
201 of the Sarbanes-Oxley Act.
AUDIT COMMITTEE REPORT
The Audit Committee of our Board
is composed of three Directors who are independent within the meaning of Section 803A of the NYSE MKT Company Guide and Rule 10A-3
under the Exchange Act. The Audit Committee operates under a written Audit Committee charter adopted and approved by our Board.
In accordance with its written charter, the Audit Committee assists our Board in fulfilling its responsibility relating to corporate
accounting, reporting practices of the Company, and the quality and integrity of financial reports and other financial information
provided by the Company to any governmental body or to the public. Management is responsible for the financial statements and the
reporting process, including the system of internal controls. The independent registered public accounting firm is responsible
for expressing an opinion on whether the audited financial statements are in conformity with accounting principles generally accepted
in the United States of America.
The Audit
Committee has reviewed and discussed with the Company’s management and Hein, the Company’s independent registered public
accounting firm, the audited financial statements of the Company for the year ended December 31, 2013. The Audit Committee also
discussed with Hein the matters required to be discussed by Auditing Standards No. 16, Communications with Audit Committee.
The Audit Committee has received
and reviewed the written disclosures and the letter from Hein required by applicable requirements of the Public Company Accounting
Oversight Board regarding Hein’s communications with the Audit Committee concerning independence and has discussed with Hein
their independence.
Based on the review and discussions
noted to above, the Audit Committee recommended to our Board that the audited financial statements be included in the Company’s
2013 Annual Report on Form 10-K for the fiscal year ended December 31, 2013, for filing with the Securities and Exchange Commission.
Submitted by the Audit Committee
Andrew P. Calerich, Chairman
John Anderson
James N. Whyte
PROPOSAL THREE:
APPROVAL OF THE AMERICAN EAGLE
ENERGY CORPORATION
2013 EQUITY INCENTIVE PLAN
On December 13, 2013, our Board, upon the
recommendation of our Compensation Committee, approved the American Eagle Energy Corporation 2013 Equity Incentive Plan (the “2013
Plan”). The Plan will authorize equity and performance-based compensation arrangements that the Company needs to remain competitive
with its peers, adapt compensation awards to changes in corporate objectives and the marketplace, effectively attract, motivate,
and retain the caliber of employees essential to the Company’s success, and preserve the tax deductibility of performance-based
compensation paid to certain executive officers under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).
Currently, equity awards are granted to
key employees and Directors under the American Eagle Energy Corporation 2012 Equity Incentive Plan (the “2012 Plan”)
and the 2013 Plan. As of December 13, 2013, all equity awards previously available under the 2012 Plan have been granted. The Company
expects that the shares of Common Stock requested under the 2013 Plan will enable the Company to make grants for the next three
years before seeking stockholder approval to grant shares of Common Stock.
As of October 20, 2014, the Company had
outstanding 774,114 options to purchase Common Stock with a weighted average exercise price of $5.86 and a weighted average remaining
term of 3.89 years granted under the 2012 Plan and 247,761 options to purchase Common Stock with a weighted average exercise price
of $8.35and a weighted average remaining term of 4.52 years granted under the 2013 Plan.
The 2013 Plan reserves an aggregate of
1,375,000 shares, of which 247,761 are currently reserved and of which 1,127,239 will be available for new awards. Shares subject
to awards that are outstanding under the 2012 Plan will not become available for future grants under the 2013 Plan if they are
cancelled, forfeited, or expire prior to being exercised. The awards outstanding under the 2012 Plan consist primarily of options
that have a weighted average exercise price of $5.42 as of October 20, 2014.
Our Board is seeking stockholder approval
of the Plan so that the shares currently reserved for issuance under the Plan may be listed on the NYSE MKT. Pursuant to the rules
of the NYSE MKT, the Company may grant options that qualify as incentive stock options under the Code.
We also are seeking stockholder approval
of the 2013 Plan so that compensation attributable to grants under the 2013 Plan may qualify for an exemption from the $1 million
deduction limit under Section 162(m) of the Code. See “Description of the 2013 Plan – Types of Awards – Performance
Awards” herein.
The following summary of the material terms
of the 2013 Plan is qualified in its entirety by reference to the full text of the 2013 Plan, a copy of which is attached as Appendix
A to this proxy statement.
Description of the 2013 Plan
The purposes of the 2013 Plan are to motivate
and reward those employees and other individuals, who are expected to contribute significantly to the success of the Company, to
perform at the highest level and to further the best interests of the Company and its stockholders.
The 2013 Plan is an “omnibus”
plan that provides for several different kinds of awards, including stock options, stock appreciation rights (“SARs”),
restricted stock, restricted stock units, performance awards, and other stock-based awards.
Shares Authorized for Issuance under the 2013 Plan; Share
Counting Procedure
A maximum of 5,500,000 shares are proposed
to be available for awards.
Shares subject to an award under the 2013
Plan that expires, is canceled, forfeited, or otherwise terminates without delivery of such shares, including (i) the number of
shares delivered (or withheld upon settlement) in payment of the exercise price of an award or in payment of tax withholding obligations
and (ii) shares subject to an award to the extent that award is settled without the issuance of shares, will be added back to the
total shares available under the 2013 Plan.
Limitations on Individual Awards
With respect to any award intended to be
Section 162(m) compensation, the 2013 Plan contains the following limitations on the amount that may be awarded to any participant
in any calendar year, subject to any adjustments as provided in the 2013 Plan:
| · | The maximum number of shares underlying options and SARs is 250,000.
|
| · | The maximum number of shares underlying performance awards is 250,000.
|
| · | The maximum dollar amount of cash-based awards is $500,000. |
Eligible Participants
All of our employees and Directors are
eligible to receive awards under the 2013 Plan. Consultants who provide bona fide services to us also are eligible to participate
in the 2013 Plan, provided that the consultants’ services are not in connection with the offer and sale of our securities
in a capital-raising transaction and the consultants do not directly or indirectly promote or maintain a market in our securities.
Incentive stock options may only be granted to our employees and employees of our parent or a subsidiary (as defined in the 2013
Plan). Holders of equity-based awards granted by an entity acquired by the Company or with which the Company combines are eligible
for grants of “substitute awards” (as defined in the 2013 Plan) to the extent permitted under applicable listing standards
of any stock exchange on which the Company is listed.
Administration
The 2013 Plan will be administered by the
Compensation Committee, or in our Board’s sole discretion, by our Board. The Compensation Committee has the authority, among
other things, to designate participants, determine the type or types of awards to be granted, to determine the number of shares
subject to each award, to determine the terms and conditions of any award and to interpret and administer the 2013 Plan and any
instrument or agreement relating thereto. The Compensation Committee may delegate day-to-day administration of the 2013 Plan to
a committee or committees of one or more members of the Committee or to our Board.
Term
The 2013 Plan was effective upon approval
by our Board, and will terminate ten years after such approval, or on December 13, 2023.
Types of Awards
Stock Options
The 2013 Plan authorizes the grant of stock
options, which may be either incentive stock options within the meaning of Section 422 of the Code, which are eligible for special
tax treatment, or nonqualified stock options. The aggregate fair market value of shares, determined as of the date of grant, for
which any employee may be granted incentive stock options that are exercisable for the first time in any calendar year may not
exceed $100,000. To the extent that an incentive stock option exceeds the $100,000 threshold, or otherwise does not comply with
the applicable conditions of Section 422 of the Code, the stock option will be treated as a non-qualified stock option.
The term of a stock option granted under
the 2013 Plan cannot be longer than 10 years from the date of grant, and the exercise price per share underlying the option may
not be less than the fair market value of a share of Common Stock on the date of grant. The Compensation Committee will determine
the acceptable forms of consideration for exercise of the option, which may include (i) cash or check, or a combination thereof,
or broker-assisted cashless exercise or (ii) to the extent expressly permitted by the Compensation Committee, (a) other shares
that have a fair market value on the date of surrender equal to the aggregate exercise price of the shares as to which said option
shall be exercised or (b) such other consideration and method of payment for the issuance of shares to the extent permitted by
applicable laws. Re-pricing of options (i.e., reducing the exercise price or cancelling an option in exchange for
cash, another award, or an option with a lower exercise price) is not permitted under the 2013 Plan without approval of our stockholders.
Stock Appreciation Rights
The 2013 Plan authorizes the grant of SARs
to participants. The term of an SAR under the 2013 Plan cannot be longer than 10 years from the date of grant, and the exercise
or hurdle price per share under an SAR, except in the case of a substitute award, shall not be less than the fair market value
of a share on the grant date of such SAR. The Compensation Committee shall determine the time or times at which an SAR may be exercised
or settled in whole or in part. The Compensation Committee may specify in an award agreement that an “in-the-money”
SAR shall be automatically exercised on its expiration date. Re-pricing of SARs is not permitted under the 2013 Plan without approval
of our stockholders.
Restricted Stock and Restricted Stock Units
Under the 2013 Plan, the Compensation Committee
may grant participants awards of restricted stock and restricted stock units that will be subject to such restrictions as the Compensation
Committee may impose (including any limitation on the right to vote a share of restricted stock or the right to receive any dividend,
dividend equivalent, or other right). The award agreement will specify the vesting schedule and, with respect to restricted stock
units, the delivery schedule. Any share of restricted stock granted under the 2013 Plan may be evidenced in such manner as the
Compensation Committee may deem appropriate, including book-entry registration or issuance of a stock certificate or certificates.
Any such certificate shall be registered in the name of the participant and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such restricted stock.
Performance Awards
The Compensation Committee may grant participants
performance awards, which may be denominated as a cash amount, number of shares, or a combination thereof and are awards that may
be earned upon achievement or satisfaction of performance conditions specified by the Compensation Committee. The Compensation
Committee may specify that any other award shall constitute a performance award by conditioning the right of a participant to exercise
the award or have it settled, and the timing thereof, upon achievement or satisfaction of such performance conditions as determined
by the Committee.
If the Compensation Committee intends that
a performance award should constitute Section 162(m) compensation, such performance award shall include a pre-established formula,
such that payment, retention, or vesting of the award is subject to the achievement during a performance period or periods, as
determined by the Compensation Committee, of one or more levels of performance measures. Performance measures may be established
on an absolute or relative basis, and may be established on a Company-wide basis or with respect to one or more business units,
divisions, subsidiaries, or business segments. Relative performance may be measured against a group of peer companies, a financial
market index, or other acceptable objective and quantifiable indices.
The award agreement may provide that the
Compensation Committee has discretion to modify performance objectives or the related minimum acceptable level of achievement,
in whole or in part, as the Compensation Committee deems appropriate and equitable. The Compensation Committee may impose such
other restrictions on awards as it may deem necessary or appropriate to ensure that such awards satisfy all requirements for Section
162(m) compensation.
Performance Awards shall be settled in cash,
shares, other awards, other property, net settlement, or any combination thereof, in the discretion of the Committee and only after
the end of the relevant performance period. The Compensation Committee shall specify the circumstances in which, and the extent
to which, Performance Awards shall be paid or forfeited in the event of termination of employment, service or board membership.
Other Stock-Based Awards
The Compensation Committee may grant participants
stock awards, which may be denominated or payable in shares or factors that may influence the value of shares, including convertible
or exchangeable debt securities, other rights convertible or exchangeable into shares, purchase rights for shares, awards with
value, and payment contingent upon performance measures or any other factors designated by the Compensation Committee. The Compensation
Committee shall determine the terms and conditions of such awards. Shares delivered pursuant to an award in the nature of a purchase
right shall be purchased for such consideration, paid for at such times, by such methods and in such forms, including cash, shares,
other awards, other property, or any combination thereof, as the Compensation Committee shall determine. Cash awards, as an element
of or supplement to any other award under the 2013 Plan, may also be granted.
Automatic Grants to Outside Directors
Our Board or a committee thereof may institute,
by resolution, automatic award grants to new and continuing members of our Board. Our Board or its committee may, in their sole
discretion, determine the number and type of such awards and the terms, conditions, and criteria of the awards, if any.
Transferability
Unless determined otherwise by the Compensation
Committee, awards are not transferable, other than by will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order (as defined in the Code or the Employment Retirement Income Security Act of 1974, as amended) except that,
if so provided in the award agreement, the participant may transfer an award, other than an incentive stock option, during the
participant’s lifetime to one or more members of the participant’s family, to one or more trusts for the benefit of
one or more of the participant’s family, to a partnership or partnerships of members of the participant’s family, or
to a charitable organization as defined in Section 501(c)(3) of the Code, but only if the transfer would not result in the loss
of any exemption under Rule 16b-3 of the Exchange Act with respect to any award. The transferee of an award will be subject to
all restrictions, terms, and conditions applicable to the award prior to its transfer, except that the award will not be further
transferable by the transferee other than by will or by the laws of descent and distribution.
Termination of Board Membership or Employment
The Compensation Committee may specify
the effect of termination of service as a director or termination of employment on an award at the time of grant, subject to the
administrator’s right to modify the award terms after the date of grant in accordance with the terms of the 2013 Plan. In
the absence of such specification, the following provisions apply to stock options and SARs.
| · | Vested stock options and SARs held by a participant whose employment
is terminated due to the participant’s disability (as defined in the 2013 Plan) will remain exercisable for the lesser of
one year from the termination or the remaining term of the option. |
| · | Vested stock options and SARs held by a participant whose employment
is terminated due to the participant’s death (a) during the term of the option and while employed or (b) within one year
after termination will remain exercisable by the participant’s estate or beneficiary for the lesser of six months from the
date of death or the remaining term of the option. |
| · | Vested stock options and SARs held by a participant, whose employment
is terminated for any other reason, will remain exercisable for the lesser of three months from the date of death or the remaining
term of the option. |
| · | Unvested stock options and SARs shall terminate immediately upon termination
of employment. |
Change of Control
In the event of a change of control of
the Company (as defined in the 2013 Plan), the Compensation Committee may provide for accelerated vesting of an award upon or as
a result of specified events following a change of control, either in an award agreement or in connection with the change of control.
In the event of a change of control, the Compensation Committee may cause any award (i) to be canceled in consideration of a payment
in cash or other consideration to the participant in an amount per share equal to the excess, if any, of the price or implied price
per share in a change of control over the per share exercise or purchase price of such award, which may be paid immediately or
over the vesting schedule of the award or (ii) to be assumed or substituted by the successor to the Company. If the award is not
assumed or substituted, the award shall become fully vested immediately prior to the change of control and shall thereafter terminate.
Amendment and Termination of 2013 Plan
Our
Board may at any time amend, alter, suspend, discontinue, or terminate the 2013 Plan or any award made under the plan, subject
to approval by our stockholders to the extent required by applicable law or the consent of the affected participant, if such action
would materially adversely affect his or her rights. Unless approved by our stockholders, the Compensation Committee may not
reduce the minimum exercise price for stock options or SARs, or reprice
(i.e., reduce the exercise price or cancel in exchange for cash, another award, or an option or SAR with a lower
exercise price) outstanding stock options or SARs. As noted above, an amendment to an award under the 2013 Plan may not, without
the written agreement of the participant, materially impair the award.
Grants Under the Plan
As of the date of this Proxy Statement,
247,761 stock options have been granted under the 2013 Plan. Grants under the 2013 Plan are discretionary, so it is not possible
to predict the number of shares of Common Stock that will be awarded or who will receive awards under the 2013 Plan. The closing
price of a share of our Common Stock on the NYSE MKT on October 20, 2014 was $2.40.
Tax Matters
The following is a general summary of the
United States federal income tax consequences to us and participants in the 2013 Plan. The following is only a general description
intended for the information of stockholders and not as tax guidance for participants as consequences may vary depending on the
types of awards granted, the identity of the participants and the method of payment or settlement. This summary is based on the
federal tax laws in effect as of the date of this Proxy Statement. In addition, this summary assumes that all awards are exempt
from, or comply with, the rules under Section 409A of the Code regarding nonqualified deferred compensation. Changes to these laws
could alter the tax consequences described below. In addition, this summary does not address the effects of other federal taxes
(including possible “golden parachute” excise taxes) or taxes imposed under state, local or foreign tax laws.
Incentive Stock Options
A participant will not recognize income
upon the grant of an incentive stock option. A participant will recognize income upon the sale of the stock acquired under an incentive
stock option at a profit (if sales proceeds exceed the exercise price). The type of income will depend on when the participant
sells the stock. If a participant sells the stock more than two years after the option was granted and more than one year after
the option was exercised, then all of the profit will be long-term capital gains and we will not be entitled to a tax deduction
(although, for alternative minimum tax purposes, a participant must include the excess of the fair market value of the stock over
the exercise price in alternative minimum taxable income for the year of exercise). If a participant sells the stock prior to satisfying
these waiting periods, then the participant will have engaged in a “disqualifying disposition” and will recognize ordinary
income at the time of the disposition equal to the difference between the fair market value of the shares on the date of exercise
(or the amount realized on the disposition, if less) and the exercise price; we will be entitled to a tax deduction equal to that
amount. The gain, if any, in excess of the amount recognized as ordinary income will be long-term or short-term capital gains,
depending upon the length of time a participant holds shares prior to the disposition.
Nonqualified Stock Options
A participant will not recognize income
upon the grant of a nonqualified stock option. A participant will recognize income upon the exercise of a nonqualified stock option
equal to the fair market value of the stock on the day the participant exercised the option less the exercise price. Upon sale
of the stock, the participant will have short-term or long-term capital gains or losses, depending on the length of time the participant
held the shares, equal to the difference between the sales proceeds and the value of the stock on the day the option was exercised.
SARs
The grant of a SAR will not result in any
tax consequences for the participant or us. A participant generally will recognize ordinary income upon the exercise of a SAR equal
to the amount of the cash and the fair market value of any stock received less the exercise price, and we will be entitled to a
tax deduction in that amount. Upon the sale of any stock received, the participant will have short-term or long-term capital gains
or losses, depending on the length of time the participant held the shares, equal to the difference between the sales proceeds
and the value of the stock on the day the SAR was exercised.
Stock Awards and Other Stock-Based Awards
As a general rule, a participant will recognize
ordinary income at the time of delivery of shares of Common Stock or payment of cash under the 2013 Plan. Future appreciation on
shares of Common Stock held beyond the ordinary income recognition event will be taxable when the shares are sold as long-term
or short-term capital gains, depending on the length of time the participant held the shares. We, as a general rule, will be entitled
to a tax deduction that corresponds in time and amount to the ordinary income recognized by the participant. However, if shares
of Common Stock, when delivered, are subject to substantial risk of forfeiture by reason of any employment or performance related
condition, ordinary income taxation and our tax deduction will be delayed until the risk of forfeiture lapses, unless the participant
makes a special election to accelerate taxation under Section 83(b) of the Code.
Code Section 162(m)
Section 162(m) of the Code generally disallows
a tax deduction to public companies for compensation in excess of $1,000,000 paid to a company’s chief executive officer
or any of its other four most highly paid executive officers (not including the chief financial officer). Performance-based compensation
is specifically exempt from the deduction limit if it otherwise meets the requirements of Section 162(m). Stock options and SARs
granted under the 2013 Plan are intended to qualify as “qualified performance-based compensation.” Other awards will
be “qualified performance-based compensation” if they are so designated and if their grant, vesting, or settlement
is subject to the performance criteria set forth in the 2013 Plan. Stock awards and other stock-based awards that vest solely upon
the passage of time do not qualify as “qualified performance-based compensation.”
Code Section 409A
To the extent that any award under the
2013 Plan is or may be considered to constitute deferred compensation subject to Code Section 409A, the Company intends that the
terms and administration of such award shall comply with the provisions of such section, applicable Internal Revenue Service guidance
and good faith reasonable interpretations thereof.
Vote Required and Board’s Recommendation
The affirmative vote of a majority of the
shares present in person or by proxy and entitled to vote at the Annual Meeting is required for approval of this proposal.
THE BOARD RECOMMENDS THAT YOU
FOR “FOR” APPROVAL OF THE AMERICAN EAGLE ENERGY CORPORATION 2013 EQUITY INCENTIVE PLAN.
SUBMISSION OF STOCKHOLDER
PROPOSALS
The Company must receive by June
15, 2015 any proposal of a stockholder intended to be presented at the 2015 Annual Meeting of Stockholders of the Company (the
“2015 Meeting”) and to be included in the Company’s proxy card, notice of meeting, and proxy statement related
to the 2015 Meeting pursuant to Rule 14a-8 under the Exchange Act. Such proposals must be addressed to American Eagle Energy Corporation,
2549 W. Main Street, Suite 202, Littleton, Colorado 80120, and should be submitted to the attention of Laura Peterson by certified
mail, return receipt requested. Proposals of stockholders submitted outside the processes of Rule 14a-8 under the Exchange Act
(“Non-Rule 14a-8 Proposals”) in connection with the 2015 Meeting must be received by the Company by August 17, 2015
or such proposals will be considered untimely under Rule 14a-4(c) of the Exchange Act. The Company’s proxy related to the
2015 Meeting will give discretionary authority to the proxy holders to vote with respect to all Non-Rule 14a-8 Proposals received
by the Company after August 18, 2015.
PROXY SOLICITATION AND COSTS
The Company will bear the costs
of soliciting proxies from its stockholders. In addition to the use of the mails, proxies may be solicited by the Directors, officers,
and employees of the Company by personal interview or telephone. Such Directors, officers, and employees will not be additionally
compensated for such solicitation but may be reimbursed for out-of-pocket expenses incurred in connection with such solicitation.
Arrangements will also be made with brokerage houses and other custodians, nominees, and fiduciaries for the forwarding of solicitation
materials to the beneficial owners of Common Stock held of record by such persons, and the Company will reimburse such brokerage
houses, custodians, nominees, and fiduciaries for reasonable out-of-pocket expenses incurred in connection with such solicitation.
STOCKHOLDERS SHARING THE SAME
ADDRESS
Under rules of the Securities
and Exchange Commission, to minimize mailing costs we are permitted to send a single set of annual reports and proxy statements
to any household at which two or more stockholders reside if they appear to be members of the same family. A number of brokerage
firms have also instituted this practice with respect to the delivery of documents to stockholders residing at the same address.
With this practice, however, each stockholder continues to receive a separate proxy card for voting. Any stockholder affected by
this practice who desires to receive multiple copies of annual reports and proxy statements in the future should call Investor
Relations at 303-798-5235.
OTHER MATTERS
The Directors know of no other
matters which are likely to be brought before the Annual Meeting. The Company knows of no other matters to be submitted to the
stockholders at the Annual Meeting. Therefore, the enclosed proxy card grants to the persons named in the proxy card the authority
to vote in their best judgment regarding all other matters properly raised at the Annual Meeting.
By Order of the Board of Directors
/s/ Laura Peterson
Laura Peterson
Secretary
November 5, 2014
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY.
EVEN IF YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY COMPLETE, SIGN, DATE, AND MAIL THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IN ADDITION, REGISTERED STOCKHOLDERS CAN CAST THEIR
VOTE ELECTRONICALLY AT HTTP://WWW.HIVEDMS.COM/AEE
Appendix A
AMERICAN EAGLE ENERGY CORPORATION
2013 EQUITY INCENTIVE PLAN
SECTION 1. Purpose.
The purposes of the American Eagle Energy Corporation 2013 Equity Incentive Plan (the “Plan”) are to motivate
and reward those employees and other individuals, who are expected to contribute significantly to the success of American Eagle
Energy Corporation (the “Company”) and its Affiliates, to perform at the highest level and to further the best
interests of the Company and its stockholders.
SECTION 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth below:
(a) “Affiliate”
means (i) any entity that, directly or indirectly, is controlled by the Company and (ii) any entity in which the Company has a
significant equity interest, in each case as determined by the Committee.
(b) “Award”
means any Option, SAR, Restricted Stock, Restricted Stock Unit, Performance Award, or Other Stock-Based Award granted under the
Plan, including a Substitute Award.
(c) “Award
Agreement” means any agreement, contract, or other instrument or document, which may be in electronic format, evidencing
any Award granted under the Plan, which may, but need not, be executed or acknowledged by a Participant. Each Award Agreement shall
be subject to the terms and conditions of the Plan.
(d) “Beneficial
Owner” has the meaning ascribed to such term in Rule 13d-3 under the Exchange Act.
(e) “Beneficiary”
means a person named by a Participant to be entitled to receive payments or other benefits or exercise rights that are available
under the Plan in the event of such Participant’s death. If no such person is named by a Participant, or if no Beneficiary
designated by such Participant is eligible to receive payments or other benefits or exercise rights that are available under the
Plan at such Participant’s death, such Participant’s Beneficiary shall be such Participant’s estate.
(f) “Board”
means the board of directors of the Company.
(g) “Change
of Control” means the occurrence of any one or more of the following events (unless otherwise specified in an Award Agreement
that is subject to Section 409A of the Code):
(i) any
Person (other than the Company, any trustee, or other fiduciary holding securities under any employee benefit plan of the Company
or any entity owned, directly or indirectly, by the stockholders of the Company immediately prior to the occurrence with respect
to which the evaluation is being made in substantially the same proportions as their ownership of the common stock of the Company)
becomes the Beneficial Owner (except that a Person shall be deemed to be the Beneficial Owner of all shares that any such Person
has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants, or options or
otherwise, without regard to the 60-day period referred to in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company, representing 35% or more of the combined voting power of the Company’s then-outstanding securities;
(ii) during
any twelve-month period, a majority of the members of the Board is replaced by individuals, who were not members of the Board at
the Effective Date and whose election by the Board or nomination for election by the Company’s stockholders was not approved
by a vote of at least a majority of the directors then still in office, who either were directors at the Effective Date or whose
election or nomination for election was previously so approved;
(iii) the
consummation of a merger or consolidation of the Company with any other entity, other than a merger or consolidation that would
result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving or resulting entity) 35% or more of the combined voting
power of the surviving or resulting entity outstanding immediately after such merger or consolidation; or
(iv) the
consummation of a sale or disposition of all or substantially all of the assets of the Company (other than such a sale or disposition
immediately after which such assets will be owned directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of the common stock of the Company immediately prior to such sale or disposition).
(h) “Code”
means the Internal Revenue Code of 1986, as amended from time to time, and the rules, regulations, and guidance thereunder. Any
reference to a provision in the Code shall include any successor provision thereto.
(i) “Consultant”
means any person, including an advisor, who is providing consulting or advisory services to the Company or any Affiliate.
(j) “Continuous
Service Status” means the absence of any interruption or termination of service as an Employee, Director, or Consultant.
Continuous Service Status shall not be considered interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other
leave of absence approved by the Committee, provided that such leave is for a period of not more than ninety (90) days,
unless reemployment upon the expiration of such leave is guaranteed by contract or statute or unless provided otherwise pursuant
to Company policy adopted from time to time; or (iv) in the case of transfers between locations of the Company or between the Company,
its Affiliates, or their respective successors. A change in status from an Employee to a Consultant (or Director), from a Consultant
to an Employee (or Director) or from Director to a Consultant (or Employee) will not constitute an interruption of Continuous Service
Status.
(k) “Director”
means any member of the Board.
(l) “Disability”
means, with respect to any Participant, “disability” as defined in such Participant’s Employment Agreement, if
any, or if not so defined, except as otherwise provided in such Participant’s Award Agreement, at any time that the Company
or any Affiliate sponsors a long-term disability plan that covers such Participant, “disability” as defined in such
plan for the purpose of determining such Participant’s eligibility for benefits; provided that, if such plan contains
multiple definitions of disability, then “Disability” shall refer to that definition of disability, which, if Participant
qualified for such benefits, would provide coverage for the longest period. The determination of whether Participant has a Disability
shall be made by the person or persons required to make final disability determinations under such plan. At any time that a Participant
is not a party to an Employment Agreement and the Company and its Affiliates do not sponsor a long-term disability plan that covers
such Participant, Disability shall mean Participant’s physical or mental incapacity that renders him or her unable for a
period of 90 consecutive days or an aggregate of 120 days in any consecutive 12-month period to perform his or her duties to the
Company or any Affiliate. With respect to any Incentive Stock Option, “Disability” shall mean “permanent and
total disability” as defined in Section 22(e)(3) of the Code.
(m) “Effective
Date” means the date as of which this Plan is adopted by the Board.
(n) “Employee”
means any person employed by the Company or any Affiliate, with the status of employment determined based upon such factors as
are deemed appropriate by the Committee in its sole and absolute discretion, subject to any requirements of the Code or applicable
laws.
(o) “Employment
Agreement” means any employment, severance, consulting, or similar agreement between the Company or any of its Affiliates
and a Participant.
(p) “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules, regulations, and guidance
thereunder. Any reference to a provision in the Exchange Act shall include any successor provision thereto.
(q) “Fair
Market Value” means, with respect to Shares, the closing price of a Share on the date in question (or, if there is no
reported sale on such date, on the last preceding date on which any reported sale occurred) on the principal stock market or exchange
on which the Shares are quoted or traded, or if Shares are not so quoted or traded, fair market value as determined by the Committee,
and, with respect to any property other than Shares, the fair market value of such property determined by such methods or procedures
as shall be established from time to time by the Committee.
(r) “Incentive
Stock Option” means an option representing the right to purchase Shares from the Company, granted pursuant to Section
6, that meets the requirements of Section 422 of the Code.
(s) “Non-Employee
Director” mans a Director who is a “non-employee director” within the meaning of Rule 16b-3 of the Exchange
Act.
(t) “Nonqualified
Stock Option” means an option representing the right to purchase Shares from the Company, granted pursuant to Section
6, that is not an Incentive Stock Option. Awards of Options may include the right to receive dividend equivalent payments with
respect to vested Options and payments contingent on vesting with respect to unvested Options.
(u) “Option”
means an Incentive Stock Option or a Nonqualified Stock Option.
(v) “Other
Stock-Based Award” means an Award granted pursuant to Section 10.
(w) “Outside
Director” means a Director who is an “outside director” within the meaning of Section 162(m) of the Code
of Treasury Regulations Section 1.162-27(e)(3) or any successor to such statute and regulation.
(x) “Participant”
means the recipient of an Award granted under the Plan.
(y) “Performance
Award” means an Award granted pursuant to Section 9.
(z) “Performance
Measure” means one of the following performance measures with respect to the Company: net sales; revenue;
revenue growth or product revenue growth; operating income (before or after taxes); pre- or after-tax income or loss (before or
after allocation of corporate overhead and bonus); net earnings; earnings per share; net income or loss (before or after taxes);
return on equity; total stockholder return; return on assets or net assets; appreciation in and/or maintenance of stock price;
market share; gross profits; earnings or loss (including earnings or loss before taxes, before interest and taxes, or before earnings
before interest, taxes, depreciation, and amortization); economic value-added models or equivalent metrics; comparisons with various
stock market indices; reductions in costs; cash-flow or cash-flow per share (before or after dividends); return on capital (including
return on total capital or return on invested capital); cash-flow return on investment; improvement in or attainment of expense
levels or working capital levels, including cash, inventory, and accounts receivable; operating margin; gross margin; cash margin;
year-end cash; debt reduction; stockholder equity; operating efficiencies; market share; employee satisfaction; exploration, research,
and development achievements; exploration, research and development costs; regulatory achievements (including submitting or filing
applications or other documents with regulatory authorities or receiving approval of any such applications or other documents and
passing pre-approval inspections; financial ratios, including those measuring liquidity, activity, profitability, or leverage;
financing and other capital raising transactions (including sales of the Company’s equity or debt securities; sales or licenses
of the Company’s assets, whether in a particular jurisdiction, territory, or globally or through partnering transactions);
implementation, completion, or attainment of measurable objectives with respect to research, development, drilling, production
volume levels, acquisitions, and divestitures; reserve additions; reserve value or reserve value per share; factoring transactions;
and recruiting and maintaining personnel.
(aa) “Person”
has the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including
“group” as defined in Section 13(d) thereof.
(bb) “Restricted
Stock” means any Shares granted pursuant to Section 8.
(cc) “Restricted
Stock Unit” means a contractual right granted pursuant to Section 8 that is denominated in Shares. Each Restricted Stock
Unit represents a right to receive the value of one Share (or a percentage of such value) in cash, Shares, or a combination thereof.
Awards of Restricted Stock Units may include the right to receive dividend equivalents.
(dd) “SAR”
means any right granted pursuant to Section 7 to receive, upon exercise by a Participant or settlement, in cash, Shares, or a combination
thereof, the excess of (i) the Fair Market Value of one Share on the date of exercise or settlement over (ii) the exercise or hurdle
price of the right on the date of grant, or, if granted in connection with an Option, on the date of grant of the Option.
(ee) “Section
162(m) Compensation” means “qualified performance-based compensation” under Section 162(m) of the Code.
(ff) “Shares”
means shares of the Company’s common stock, par value $0.001 per share.
(gg) “Substitute
Award” means an Award granted in assumption of, or in substitution for, an outstanding award previously granted by an
entity acquired by the Company or with which the Company combines.
SECTION 3. Eligibility.
(a) Awards
may be granted to Employees, Consultants, and Directors.
(b) Holders
of equity-based awards granted by an entity acquired by the Company or with which the Company combines are eligible for grants
of Substitute Awards under the Plan to the extent permitted under applicable listing standards of any stock exchange on which the
Company is listed.
SECTION 4.
Administration.
(a) Administration
of the Plan. The Plan shall be administered by the Compensation Committee of the Board (the “Committee”),
or in the Board’s sole discretion, by the Board. All decisions of the Committee shall be final, conclusive, and binding upon
all parties, including the Company, its stockholders, and Participants and any Beneficiaries thereof. The Committee shall issue
rules and regulations for administration of the Plan.
(b) Delegation.
The Committee, or if Board has not established the Committee, the Board, may delegate administration of the Plan to a committee
or committees of one or more members of the Committee or the Board, as applicable, and the term “Committee” shall apply
to any person or persons whom such authority has been delegated. The Committee shall have the authority 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 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 by the unanimous vote or by unanimous written consent of its members, and minutes shall
be kept of all of its meetings and copies thereof shall be provided to the Board.
(c) Composition
of Committee. To the extent necessary or desirable to comply with applicable regulatory regimes, including, without limitation,
Section 162(m) of the Code, any action by the Board or the Committee, as applicable, shall require the approval of the Directors
or Committee members, as applicable, who are (i) independent, within the meaning of and to the extent required by applicable rulings
and interpretations of the applicable stock market or exchange on which the Shares are quoted or traded; (ii) Non-Employee Directors;
and (iii) Outside Directors. The Board may designate one or more directors as alternate members of the Committee who may replace
any absent or disqualified member at any meeting of the Committee. To the extent permitted by applicable law, the Committee may
delegate to one or more officers of the Company the authority to grant Options and SARs, except that such delegation shall not
be applicable to any Award for a person then covered by Section 16 of the Exchange Act.
(d) Authority
of the Committee. Subject to the terms of the Plan and applicable law, the Committee (or its delegate) shall have full power
and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to each Participant under
the Plan; (iii) determine the number of Shares to be covered by (or with respect to which payments, rights, or other matters are
to be calculated in connection with) Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what
extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other Awards, other property, net settlement,
or any combination thereof, or canceled, forfeited, or suspended, and the method or methods by which Awards may be settled, exercised,
canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances a tax withholding obligation
may be satisfied in cash, Shares, other Awards, or other property; (vii) determine whether, to what extent and under what circumstances
cash, Shares, other Awards, other property, and other amounts payable with respect to an Award under the Plan shall be deferred
either automatically or at the election of the holder thereof or of the Committee; (viii) interpret and administer the Plan and
any instrument or agreement relating to, or Award made under, the Plan; (ix) establish, amend, suspend, or waive such rules, and
regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (x) make any other
determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.
(e) Dodd-Frank
Clawback. The Committee shall full authority to implement any policies and procedures necessary to comply with Section 10D
of the Exchange Act and any rules promulgated thereunder. Without limiting the foregoing, the Committee may provide in Award Agreements
that, in the event of a financial restatement that reduces the amount of previously awarded incentive compensation that would not
have been earned had results been properly reported, outstanding Awards will be cancelled and the Company may clawback (i.e.,
recapture) realized Option/SAR gains and realized value for vested Restricted Stock or Restricted Stock Units or earned Performance
Awards.
(f) Restrictive
Covenants. The Committee may impose restrictions on any Award with respect to non-competition, confidentiality, and other restrictive
covenants as it deems necessary or appropriate in its sole discretion.
SECTION 5. Shares
Available for Awards.
(a) Subject
to adjustment as provided in Section 5(d) and except for Substitute Awards, the maximum number of Shares available for issuance
under the Plan shall not exceed in the aggregate 5,500,000 shares of Common Stock.
(b) Any
Shares subject to an Award (other than a Substitute Award), that expires, is canceled, forfeited, or otherwise terminates without
the delivery of such Shares, including (i) the number of Shares surrendered or withheld in payment of any grant, purchase, exercise,
or hurdle price of an Award or taxes related to an Award (other than Shares already issued and surrendered for payment of taxes)
and (ii) any Shares subject to an Award to the extent that Award is settled without the issuance of Shares, shall again be, or
shall become, available for issuance under the Plan.
(c) In
the event that, as a result of any dividend or other distribution (whether in the form of cash, Shares, or other securities), recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange
of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the
Company, issuance of Shares pursuant to the anti-dilution provisions of securities of the Company, or other similar corporate transaction
or event affecting the Shares, an adjustment is appropriate in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, then the Committee shall adjust equitably any or all of:
(i) the
number and type of Shares (or other securities) that thereafter may be made the subject of Awards, including the aggregate limits
specified in Section 5(a) and the individual limits specified in Section 5(f);
(ii) the
number and type of Shares (or other securities) subject to outstanding Awards;
(iii) the
grant, purchase, exercise, or hurdle price with respect to any Award or, if deemed appropriate, make provision for a cash payment
to the holder of an outstanding Award; and
(iv) Performance
Measures set forth in any Performance Awards that are based on, derived from, or related to Share value;
provided, however, that
the number of Shares subject to any Award denominated in Shares shall always be a whole number.
(d) With
respect to any Award intended to be Section 162(m) Compensation, the following limits shall apply to the amount that may be awarded
to any Participant during any calendar year, subject to adjustment as provided in Section 5(c): (A) Options and SARs that relate
to no more than 250,000 Shares; (B) Performance Awards that relate to no more than 250,000 Shares; and (C) cash-based Awards that
relate to no more than $500,000.
SECTION 6. Options.
The Committee may grant Options to Participants with the following terms and conditions and with such additional terms and
conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine:
(a) The
exercise price per Share under an Option shall be determined by the Committee; provided, however, that, except in
the case of Substitute Awards, such exercise price shall not be less than the Fair Market Value of a Share on the date of grant
of such Option.
(b) The
term of each Option shall be fixed by the Committee but shall not exceed 10 years from the date of grant of such Option; provided
that the Committee may (but shall not be required to) provide in an Award Agreement for an extension of such 10-year term in the
event the exercise of the Option would be prohibited by law on the expiration date.
(c) The
Committee shall determine the time or times at which an Option become vested and exercisable in whole or in part. The Committee
may specify in an Award Agreement that an “in-the-money” Option shall be automatically exercised on its expiration
date.
(d) The
consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined
by the Committee. Such consideration, to the extent permitted by applicable laws, may consist of one or a combination of: (i) cash
or check or combination thereof or broker-assisted cashless exercise or (ii) to the extent expressly permitted by the Committee,
(A) other Shares that have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as
to which said Option shall be exercised or (B) such other consideration and method of payment for the issuance of Shares to the
extent permitted by applicable laws.
(e) The
terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the
Code. Incentive Stock Options may be granted only to employees of the Company or of a parent or subsidiary corporation (as defined
in Section 424(a) of the Code). Notwithstanding any designation as an Incentive Stock Option, to the extent that the aggregate
Fair Market Value of Shares subject to a Participant’s incentive stock options that become exercisable for the first time
during any calendar year exceeds $100,000, such excess Options shall be treated as Nonqualified Stock Options. For purposes of
the foregoing, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time of grant. No Incentive Stock Options may be issued more than ten years following
the earlier of (i) the date of adoption or (ii) the most recent date of approval of this Plan by the Company’s stockholders.
(f) Unless
otherwise determined by the Committee or unless otherwise set forth in an Award Agreement, the following provisions shall be applicable
upon termination of a Participant’s Continuous Service Status:
(i) If termination
of the Participant’s Continuous Service Status is as a result of the Participant’s Disability, the Participant may
exercise the Option at any time within twelve months following the date of termination (but in no event later than the expiration
of the term of such Option as set forth in the Award Agreement), but only to the extent the Option was vested and exercisable as
of the date of termination of Continuous Service Status, after which time the Option shall terminate.
(ii) If
a Participant dies (a) during the term of the Option and while in Continuous Service Status or (b) within twelve months after termination
of Continuous Service Status, the Option may be exercised at any time within six months following the date of death (but in no
event later than the expiration of the term of such Option as set forth in the Award Agreement) by the Participant’s estate
or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent the Option was vested
and exercisable as of the termination of Continuous Service Status, after which time the Option shall terminate.
(iii) If
a Participant’s Continuous Service Status terminates for any other reason, the Participant may exercise his or her Option
at any time within three months after such termination (but in no event later than the expiration of the term of such Option as
set forth in the Award Agreement), but only to the extent that the Option was vested and exercisable at the date of such termination.
(iv) To
the extent that a Participant’s Option was not vested and exercisable at the date of termination of the Participant’s
Continuous Service Status, the Option shall terminate immediately upon such termination of Continuous Service Status.
SECTION 7. Stock
Appreciation Rights. The Committee may grant SARs to Participants with the following terms and conditions and with
such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine:
(a) The
exercise or hurdle price per Share under a SAR shall be determined by the Committee; provided, however, that, except
in the case of Substitute Awards, such exercise or hurdle price shall not be less than the Fair Market Value of a Share on the
date of grant of such SAR.
(b) The
term of each SAR shall be fixed by the Committee but shall not exceed 10 years from the date of grant of such SAR.
(c) The
Committee shall determine the time or times at which a SAR may be exercised or settled in whole or in part. Unless otherwise determined
by the Committee or unless otherwise set forth in an Award Agreement, the provisions set forth in Section 6(f) above with respect
to exercise of an Award following termination of Continuous Service Status shall apply to any SAR. The Committee may specify in
an Award Agreement that an “in-the-money” SAR shall be automatically exercised on its expiration date.
SECTION 8. Restricted
Stock and Restricted Stock Units. The Committee may grant Awards of Restricted Stock and Restricted Stock Units
to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent
with the provisions of the Plan, as the Committee shall determine:
(a) The
Award Agreement shall specify the vesting schedule and, with respect to Restricted Stock Units, the delivery schedule (which may
include deferred delivery later than the vesting date).
(b) Shares
of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may impose (including any
limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend, dividend equivalent, or other
right), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as
the Committee may deem appropriate.
(c) Any
share of Restricted Stock granted under the Plan may be evidenced in such manner as the Committee may deem appropriate, including
book-entry registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect
of shares of Restricted Stock granted under the Plan, such certificate shall be registered in the name of such Participant and
shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock.
SECTION 9. Performance
Awards. The Committee may grant Performance Awards to Participants with the following terms and conditions and with such
additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine:
(a) Performance
Awards may be denominated as a cash amount, number of Shares, or a combination thereof and are Awards which may be earned upon
achievement or satisfaction of performance conditions specified by the Committee. In addition, the Committee may specify that any
other Award shall constitute a Performance Award by conditioning the right of a Participant to exercise the Award or have it settled,
and the timing thereof, upon achievement or satisfaction of such performance conditions as may be specified by the Committee. The
Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance
conditions. Subject to the terms of the Plan, the performance goals to be achieved during any performance period, the length of
any performance period, the amount of any Performance Award granted and the amount of any payment or transfer to be made pursuant
to any Performance Award shall be determined by the Committee.
(b) If
the Committee intends that a Performance Award should constitute Section 162(m) Compensation, such Performance Award shall include
a pre-established formula, such that payment, retention, or vesting of the Award is subject to the achievement during a Performance
Period or Performance Periods, as determined by the Committee, of a level or levels of, or increases in, in each case as determined
by the Committee, one or more Performance Measures. Performance Measures may be established on an absolute (e.g., plan or
budget) or relative basis, and may be established on a corporate-wide basis or with respect to one or more business units, divisions,
subsidiaries, or business segments. Relative performance may be measured against a group of peer companies, a financial market
index, or other acceptable objective and quantifiable indices. The Award Agreement may provide that if the Committee determines
that a change in the business, operations, corporate structure, or capital structure of the Company, or the manner in which the
Company conducts its business, or other events or circumstances render the performance objectives unsuitable, the Committee may
modify the performance objectives, or the related minimum acceptable level of achievement, in whole or in part, as the Committee
deems appropriate and equitable. Performance Measures may vary from Performance Award to Performance Award, respectively, and from
Participant to Participant, and may be established on a stand-alone basis, in tandem or in the alternative. The Committee shall
have the power to impose such other restrictions on Awards subject to this Section 9(b) as it may deem necessary or appropriate
to ensure that such Awards satisfy all requirements for Section 162(m) Compensation. Notwithstanding any provision of the Plan
to the contrary, with respect to any Award intended to be Section 162(m) Compensation, the Committee shall not be authorized to
increase the amount payable under any Award to which this Section 9(b) applies upon attainment of such pre-established formula,
except as provided in Section 5(c)(iv).
(c) Settlement
of Performance Awards shall be in cash, Shares, other Awards, other property, net settlement, or any combination thereof, in the
discretion of the Committee. The Committee shall specify the circumstances in which, and the extent to which, Performance Awards
shall be paid or forfeited in the event of termination of a Continuous Service Status.
(d) Performance
Awards will be settled only after the end of the relevant Performance Period. Any settlement that changes the form of payment from
that originally specified shall be implemented in a manner such that the Performance Award and other related Awards do not, solely
for that reason, fail to qualify as Section 162(m) Compensation.
SECTION 10. Other
Stock-Based Awards. The Committee may, subject to limitations under applicable law, grant to Participants such other Awards
that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Shares
or factors that may influence the value of Shares, including convertible or exchangeable debt securities, other rights convertible
or exchangeable into Shares, purchase rights for Shares, Awards with value and payment contingent upon performance of the Company
or business units thereof or any other factors designated by the Committee. The Committee shall determine the terms and conditions
of such Awards. Shares delivered pursuant to an Award in the nature of a purchase right granted under this Section 10 shall be
purchased for such consideration, paid for at such times, by such methods and in such forms, including cash, Shares, other Awards,
other property, or any combination thereof, as the Committee shall determine. Cash awards, as an element of or supplement to any
other Award under the Plan, may also be granted pursuant to this Section 10.
SECTION 11. Automatic
Grants to Outside Directors. The Board or a committee thereof may institute, by resolution, automatic Award grants to new
and to continuing members of the Board, with the number and type of such Awards, with such terms and conditions, and based upon
such criteria, if any, as is determined by the Board or its committee, in their sole discretion.
SECTION 12. Effect
of a Change of Control on Awards.
(a) The
Committee may (but shall not be required to) provide for accelerated vesting of an Award upon, or as a result of specified events
following, a Change of Control, either in an Award Agreement or in connection with the Change of Control.
(b) In
the event of a Change of Control, the Committee may cause any Award:
(i) to be
canceled in consideration of a payment in cash or other consideration to such Participant who holds such Award in an amount per
share equal to the excess, if any, of the price or implied price per Share in a Change in Control over the per Share exercise or
purchase price of such Award, which may be paid immediately or over the vesting schedule of the Award; or
(ii) to
be assumed or a substantially equivalent Award shall be substituted by the successor corporation or a parent or subsidiary of such
successor corporation (the “Successor Corporation”), unless the Successor Corporation does not agree to assume
the award or to substitute an equivalent option or right (or agree to cashout the Award as provided in clause (i)), in which case
such Award shall become fully vested immediately prior to the Change of Control and shall thereafter terminate. An Award shall
be considered assumed, without limitation, if, at the time of issuance of the stock or other consideration upon a Change of Control,
as the case may be, each holder of an Award would be entitled to receive upon exercise of the award the same number and kind of
shares of stock or the same amount of property, cash, or securities as such holder would have been entitled to receive upon the
occurrence of the transaction if the holder had been, immediately prior to such transaction, the holder of the number of Shares
covered by the award at such time; provided that, if such consideration received in the transaction is not solely common
stock of the Successor Corporation, the Committee may, with the consent of the Successor Corporation, provide for the consideration
to be received upon exercise of the assumed award to be solely common stock of the Successor Corporation.
SECTION 13. General
Provisions Applicable to Awards.
(a) Awards
shall be granted for such cash or other consideration, if any, as the Committee determines; provided that, in no event,
shall Awards be issued for less than such minimal consideration as may be required by applicable law.
(b) Awards
may, in the discretion of the Committee, be granted either alone or in addition to or in tandem with any other Award or any award
granted under any other plan of the Company. Awards granted in addition to or in tandem with other Awards, or in addition to or
in tandem with awards granted under any other plan of the Company, may be granted either at the same time as or at a different
time from the grant of such other Awards or awards.
(c) Subject
to the terms of the Plan, payments or transfers to be made by the Company upon the grant, exercise, or settlement of an Award may
be made in the form of cash, Shares, other Awards, other property, net settlement, or any combination thereof, as determined by
the Committee in its discretion, whether at the time of grant, at the time of exercise or settlement or otherwise, and may be made
in a single payment or transfer, in installments or on a deferred basis, in each case in accordance with rules and procedures established
by the Committee. Such rules and procedures may include provisions for the payment or crediting of reasonable interest on installment
or deferred payments or the grant or crediting of dividend equivalents in respect of installment or deferred payments.
(d) Except
as may be permitted by the Committee (except with respect to Incentive Stock Options) or as specifically provided in an Award Agreement,
(i) no Award and no right under any Award shall be assignable, alienable, saleable, or transferable by a Participant otherwise
than by will or pursuant to Section 13(e) and (ii) during a Participant’s lifetime, each Award, and each right under any
Award, shall be exercisable only by such Participant or, if permissible under applicable law, by such Participant’s guardian
or legal representative. The provisions of this Section 13(d) shall not preclude forfeiture of an Award in accordance with the
terms thereof.
(e) A
Participant may designate a Beneficiary or change a previous Beneficiary designation at such times prescribed by the Committee
by using forms and following procedures approved or accepted by the Committee for that purpose.
(f) All
certificates for Shares and/or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be
subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations,
and other requirements of the Securities and Exchange Commission, any stock market or exchange upon which such Shares or other
securities are then quoted, traded, or listed, and any applicable securities laws, and the Committee may cause a legend or legends
to be put on any such certificates to make appropriate reference to such restrictions.
SECTION 14. Amendments
and Termination.
(a) Amendment
of Plan. Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award Agreement or
in the Plan, the Board may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time; provided,
however, that no such amendment, alteration, suspension, discontinuation, or termination shall be made without (i) stockholder
approval if such approval is required by applicable law or the rules of the stock market or exchange, if any, on which the Shares
are principally quoted or traded or (ii) the consent of the affected Participant, if such action would materially adversely affect
the rights of such Participant under any outstanding Award, except (x) to the extent any such amendment, alteration, suspension,
discontinuance, or termination is made to cause the Plan to comply with applicable law, stock market, or exchange rules and regulations
or accounting or tax rules and regulations or (y) to impose any “clawback” or recoupment provisions on any Awards in
accordance with Section 4(d) of the Plan. Notwithstanding anything to the contrary in the Plan, the Committee may amend the Plan,
or create sub-plans, in such manner as may be necessary for the purpose of qualifying for preferred tax treatment under non-U.S.
tax laws or complying with local rules and regulations. The Committee may correct any defect, supply any omission, or reconcile
any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect.
(b) Dissolution
or Liquidation. In the event of the dissolution or liquidation of the Company, each Award will terminate immediately prior
to the consummation of such action, unless otherwise determined by the Committee.
(c) Terms
of Awards. The Committee may waive any conditions or rights under, amend any terms of, or amend, alter, suspend, discontinue,
or terminate any Award theretofore granted, prospectively or retroactively, without the consent of any relevant Participant or
holder or Beneficiary of an Award; provided, however, that no such action shall materially adversely affect the rights of
any affected Participant or holder or Beneficiary under any Award theretofore granted under the Plan, except (x) to the extent
any such action is made to cause the Plan to comply with applicable law, stock market or exchange rules and regulations, or accounting
or tax rules and regulations or (y) to impose any “clawback” or recoupment provisions on any Awards in accordance with
Section 4(d) of the Plan.
(d) No
Repricing. Notwithstanding the foregoing, except as provided in Section 5(d), no amendment to the terms of outstanding Options
or SARs that reduces the exercise or hurdle price of such Options or SARs and no cancellation of any outstanding options or SARs
in exchange for Options or SARs with an exercise price that is less than the exercise price of the original Options or SARs shall
be made without approval of the Company’s stockholders.
SECTION 15. Miscellaneous.
(a) No
employee, Participant or other person shall have any claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of employees, Participants, or holders or Beneficiaries of Awards under the Plan. The terms and conditions
of Awards need not be the same with respect to each recipient. Any Award granted under the Plan shall be a one-time Award that
does not constitute a promise of future grants. The Company, in its sole discretion, maintains the right to make available future
grants under the Plan.
(b) The
grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of, or to continue to provide
services to, the Company or any Affiliate. Further, the Company or the applicable Affiliate may at any time dismiss a Participant,
free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement
or in any other agreement binding the parties. The receipt of any Award under the Plan is not intended to confer any rights on
the receiving Participant except as set forth in the applicable Award Agreement.
(c) Nothing
contained in the Plan shall prevent the Company from adopting or continuing in effect other or additional compensation arrangements,
and such arrangements may be either generally applicable or applicable only in specific cases.
(d) The
Company shall be authorized to withhold from any Award granted or any payment due or transfer made under any Award or under the
Plan or from any compensation or other amount owing to a Participant the amount (in cash, Shares, other Awards, other property,
net settlement, or any combination thereof) of applicable withholding taxes due in respect of an Award, its exercise or settlement
or any payment or transfer under such Award or under the Plan and to take such other action (including providing for elective payment
of such amounts in cash or Shares by such Participant) as may be necessary in the opinion of the Company to satisfy all obligations
for the payment of such taxes; provided that, if the Committee allows the withholding or surrender of Shares to satisfy
a Participant’s tax withholding obligations, the Company shall not allow Shares to be withheld in an amount that exceeds
the minimum statutory withholding rates for federal and state tax purposes, including payroll taxes.
(e) If
any provision of the Plan or any Award Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction,
or as to any person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the intent of the Plan or the Award Agreement, such provision
shall be stricken as to such jurisdiction, person, or Award and the remainder of the Plan and any such Award Agreement shall remain
in full force and effect.
(f) Neither
the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship
between the Company and a Participant or any other person. To the extent that any person acquires a right to receive payments from
the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company.
(g) No
fractional Shares shall be issued or delivered pursuant to the Plan or any Award and the Committee shall determine whether cash
or other securities shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights
thereto shall be canceled, terminated, or otherwise eliminated.
(h) Non-Transferability
of Awards. No Award shall be transferable by any Participant other than by will or by the laws of descent and distribution
or pursuant to a qualified domestic relations order (as defined in the Code or the Employment Retirement Income Security Act of
1974, as amended) except that, if so provided in the Award Agreement, the Participant may transfer the Award, other than an Incentive
Stock Option, during the Participant’s lifetime to one or more members of the Participant’s family, to one or more
trusts for the benefit of one or more of the Participant’s family, to a partnership or partnerships of members of the Participant’s
family, or to a charitable organization as defined in Section 501(c)(3) of the Code, but only if the transfer would not result
in the loss of any exemption under Rule 16b-3 of the Exchange Act with respect to any Award. The transferee of an Award will be
subject to all restrictions, terms, and conditions applicable to the Award prior to its transfer, except that the Award will not
be further transferable by the transferee other than by will or by the laws of descent and distribution.
SECTION 16. Effective
Date of the Plan. The Plan shall be effective as of the Effective Date.
SECTION 17. Term
of the Plan. No Award shall be granted under the Plan after the earliest to occur of (i) the tenth year anniversary
of the Effective Date; provided that, to the extent permitted by the listing rules of any stock exchange on which a class
or series of equity or debt of the Company is listed, such ten-year term may be extended indefinitely so long as the maximum number
of Shares available for issuance under the Plan have not been issued; (ii) the maximum number of Shares available for issuance
under the Plan have been issued; or (iii) the Board terminates the Plan in accordance with Section 14(a). However, unless otherwise
expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond such date and
the authority of the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award, or to waive any conditions
or rights under any such Award, and the authority of the Board to amend the Plan, shall extend beyond such date.
SECTION 18. Section
409A of the Code. With respect to Awards subject to Section 409A of the Code, the Plan is intended to comply with
the requirements of Section 409A of the Code and the regulations thereunder (“Section 409A”); the provisions
of the Plan and any Award Agreement shall be interpreted in a manner that satisfies the requirements of Section 409A; and the Plan
shall be operated accordingly. If any provision of the Plan or any term or condition of any Award would otherwise frustrate or
conflict with this intent, the provision, term, or condition will be interpreted and deemed amended so as to avoid this conflict.
Notwithstanding anything else in the Plan, if the Board determines a Participant to be one of the Company’s “specified
employees” under Section 409A(2)(B)(i) of the Code at the time of such Participant’s separation from service (as defined
in Section 409A(2)(A)(i)) in accordance with the identification date specified in Section 1.409A-1(d)(i)(4) of the Treasury Regulations
and the amount hereunder is “deferred compensation” subject to Section 409A, then any distribution that otherwise would
be made to such Participant with respect to this Award as a result of such termination shall not be made until the date that is
six months after such separation from service or , if earlier, the date of the death of the Participant.
SECTION 19. Governing
Law. The Plan and each Award Agreement shall be governed by the laws of the State of Nevada, excluding any conflicts
or choice of law rule or principle that might otherwise refer construction or interpretation of this Plan to the substantive law
of another jurisdiction.
PROXY SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY FOR THE ANNUAL
STOCKHOLDERS MEETING ON DECEMBER
5, 2014
The undersigned hereby constitutes
and appoints Bradley M. Colby and Paul E. Rumler, his true and lawful agents and proxies with full power of substitution in each,
to represent the undersigned at the Annual Meeting of Stockholders of American Eagle Energy Corporation to be held at the Company’s
offices located at 2549 W. Main Street, Suite 202, Littleton, Colorado 80120, on Friday, December 5, 2014, at 10 a.m. Mountain
Standard Time, and at any adjournments or postponements thereof, as follows and in accordance with their judgment upon any other
matters coming before said meeting.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING
THE APPROPRIATE BOXES, SEE REVERSE SIDE, AND SHARES REPRESENTED BY THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED
OR, IF DIRECTIONS ARE NOT INDICATED, WILL BE VOTED IN ACCORDANCE WITH THE BOARD OF DIRECTORS’ RECOMMENDATIONS. THE PROXIES
CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
YOUR VOTE IS IMPORTANT.
| SEE REVERSE SIDE |
(change of address) |
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| PLEASE MARK, DATE AND SIGN THIS PROXY AND |
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| RETURN IT IN THE ENCLOSED ENVELOPE. |
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| (CONTINUED AND TO BE SIGNED ON REVERSE SIDE.) |
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(If you have written in the above space, please mark the corresponding box on the reverse side of this card.) |
FOLD AND DETACH HERE
AMERICAN EAGLE ENERGY CORPORATION
PLEASE MARK VOTE IN BOX IN
THE FOLLOWING MANNER USING DARK INK ONLY.
| 1. |
Election of Directors— |
For |
Withhold |
For All |
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Nominees: |
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Except |
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John Anderson |
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Bradley M. Colby |
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Richard Findley |
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Paul E. Rumler |
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James N. Whyte |
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Bruce Poignant |
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For |
Against |
Abstain |
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Ratification of the appointment of Hein & Associates LLP as the Company’s independent registered public accounting firm |
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Approval of the American Eagle Energy Corporation 2013 Equity Incentive Plan |
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To attend meeting, mark the box. |
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To change your address, mark the box. |
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Dated: |
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Signature(s): |
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NOTE: |
Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee, or guardian, please give full title as such. |
YOUR VOTE IS IMPORTANT
PLEASE MARK, DATE, AND SIGN THIS PROXY
AND RETURN IT IN THE ENCLOSED ENVELOPE.
Immage Biotherapeutics (CE) (USOTC:IMMG)
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