Blueprint
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 8-K
CURRENT
REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date of
Report (Date of Earliest Event Reported): May 10, 2018
001-35922
(Commission file number)
PEDEVCO CORP.
(Exact name of registrant as specified in its charter)
|
Texas
|
|
22-3755993
|
|
(State or other jurisdiction of incorporation
or organization)
|
|
(IRS Employer Identification No.)
|
4125 Blackhawk Plaza Circle, Suite 201
Danville, California 94506
(Address of principal executive offices)
(855) 733-2685
(Issuer’s telephone number)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
|
[
]
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|
|
|
|
|
[
]
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
|
|
|
[
]
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
|
|
|
|
|
[
]
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
|
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this
chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
Item
1.01 Entry Into a Material Definitive
Agreement.
On May
10, 2018, PEDEVCO Corp. (the “Company”,
“we”
and “us”) entered into the
Ingriselli Employment Agreement, Separation Agreement and Peterson
Consulting Agreement, each as described below under Item
5.02.
Item
5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
Executive Employment Agreement
In connection with the pending departure of Mr.
Michael L. Peterson as President and Chief Executive Officer of the
Company effective May 31, 2018 (as previously disclosed in the
Current Report on Form 8-K filed by the Company on April 24, 2018),
Mr. Frank C. Ingriselli, the Company’s current Chairman of
the Board of Directors and former President and Chief Executive
Officer of the Company, has agreed to assume the executive offices
of Chief Executive Officer and President of the Company, effective
May 31, 2018, and continue in his role as Chairman of the
Company’s Board of Directors, as reflected in an Employment
Agreement entered into by and between Pacific Energy Development,
our wholly-owned subsidiary and Mr. Ingriselli on May 10, 2018 (the
“Ingriselli Employment
Agreement”).
Pursuant to the Ingriselli Employment Agreement,
which has an effective date of June 1, 2018, Mr. Ingriselli shall
serve as our President and Chief Executive Officer at a current
annual base salary of $250,000, and a target annual cash bonus
of between 20% and 40% of his base salary, awardable by the Board
of Directors in its discretion. The Company also agreed to pay Mr.
Ingriselli standard benefits as other executive officers of the
Company. In addition, the Ingriselli Employment Agreement includes
certain termination and severance provisions which provide for,
among other things, severance payment provisions that would require
the Company to make lump sum payments equal to 18 months’
salary and target bonus (payable within thirty days after
termination) to Mr. Ingriselli in the event his employment is
terminated due to his death or disability, terminated without
“Cause”
or if he voluntarily resigns for “Good
Reason” (36 months in
connection with a “Change of
Control”), and
continuation of benefits for up to 36 months (48 months in
connection with a “Change of
Control”), as such terms
are defined in the Ingriselli Employment
Agreement.
For purposes of the Ingriselli Employment
Agreement, the term “Cause”
means his (1) conviction of, or plea of nolo contendere to, a
felony or any other crime involving moral turpitude; (2) fraud on
or misappropriation of any funds or property of our company or any
of its affiliates, customers or vendors; (3) act of material
dishonesty, willful misconduct, willful violation of any law, rule
or regulation, or breach of fiduciary duty involving personal
profit, in each case made in connection with his responsibilities
as an employee, officer or director of our company and which has,
or could reasonably be deemed to result in, a Material Adverse
Effect upon our company; (4) illegal use or distribution of drugs;
(5) material violation of any policy or code of conduct of our
company; or (6) material breach of any provision of the employment
agreement or any other employment, non-disclosure, non-competition,
non-solicitation or other similar agreement executed by him for the
benefit of our company or any of its affiliates, all as reasonably
determined in good faith by the board of directors of our company.
However, an event that is or would constitute
“Cause”
shall cease to be “Cause”
if he reverses the action or cures the default that constitutes
“Cause”
within 10 days after our company notifies him in writing that Cause
exists. No act or failure to act on Mr. Ingriselli’s part
will be considered “willful”
unless it is done, or omitted to be done, by him in bad faith or
without reasonable belief that such action or omission was in the
best interests of our company. Any act or failure to act that is
based on authority given pursuant to a resolution duly passed by
the board of directors, or the advice of counsel to our company,
shall be conclusively presumed to be done, or omitted to be done,
in good faith and in the best interests of the
Company.
For purposes of the Ingriselli Employment
Agreement, “Material Adverse
Effect” means any event,
change or effect that is materially adverse to the condition
(financial or otherwise), properties, assets, liabilities,
business, operations or results of operations of our company or its
subsidiaries, taken as a whole.
For purposes of the Ingriselli Employment
Agreement, “Good
Reason” means the
occurrence of any of the following without his written consent: (a)
the assignment to him of duties substantially inconsistent with
this employment agreement or a material adverse change in his
titles or authority; (b) any failure by our company to comply with
the compensation provisions of the agreement in any material way;
(c) any material breach of the employment agreement by our company;
or (d) the relocation of him by more than fifty (50) miles from the
location of our company’s principal office located in
Danville, California. However, an event that is or would constitute
“Good
Reason” shall cease to be
“Good
Reason” if: (i) he does
not terminate employment within 45 days after the event occurs;
(ii) before he terminates employment, we reverse the action or cure
the default that constitutes “Good
Reason” within 10 days
after he notifies us in writing that Good Reason exists; or (iii)
he was a primary instigator of the “Good
Reason” event and the
circumstances make it inappropriate for him to receive
“Good
Reason” termination
benefits under the employment agreement (e.g., he agrees
temporarily to relinquish his position on the occurrence of a
merger transaction he assists in negotiating).
For purposes of the Ingriselli Employment
Agreement, “Change of
Control” means: (i) a
merger, consolidation or sale of capital stock by existing holders
of capital stock of our company that results in more than 50% of
the combined voting power of the then outstanding capital stock of
our company or its successor changing ownership; (ii) the sale, or
exclusive license, of all or substantially all of our
company’s assets; or (iii) the individuals constituting our
company’s board of directors as of the date of the employment
agreement (the “Incumbent Board of
Directors”) cease for any
reason to constitute at least 1/2 of the members of the board of
directors; provided, however, that if the election, or nomination
for election by our stockholders, of any new director was approved
by a vote of the Incumbent Board of Directors, such new director
shall be considered a member of the Incumbent Board of Directors.
Notwithstanding the foregoing and for purposes of clarity, a
transaction shall not constitute a Change in Control if: (w) its
sole purpose is to change the state of our company’s
incorporation; (x) its sole purpose is to create a holding company
that will be owned in substantially the same proportions by the
persons who held our company’s securities immediately before
such transaction; or (y) it is a transaction effected primarily for
the purpose of financing our company with cash (as determined by
the board of directors in its discretion and without regard to
whether such transaction is effectuated by a merger, equity
financing or otherwise).
In
addition, as additional consideration for Mr. Ingriselli rejoining
the Company as its President and Chief Executive Officer, on May
10, 2018, the Company granted Mr. Ingriselli 80,000 shares of
restricted Company common stock under the Company’s Amended
and Restated 2012 Equity Incentive Plan, vesting with respect to
60,000 shares on the six (6) month anniversary of June 1, 2018 and
20,000 of the shares on the nine (9) month anniversary of June 1,
2018, subject to his continued service as an employee of or
consultant to the Company on such vesting dates, and subject to the
terms and conditions of a Restricted Shares Grant Agreement to be
entered into by and between the Company and Mr.
Ingriselli.
Mr.
Ingriselli, age 64, has served as the Chairman of the board of
directors since our acquisition of Pacific Energy Development in
July 2012, served as our Chief Executive Officer from July 2012 to
May 2016 and served as our President from July 2012 to October
2014. Mr. Ingriselli also served as the President, Chief Executive
Officer, and Director of Pacific Energy Development since its
inception in February 2011 through its July 2012 acquisition by the
Company. Mr. Ingriselli began his career at Texaco, Inc. in 1979
and held management positions in Texaco’s Producing-Eastern
Hemisphere Department, Middle East/Far East Division, and
Texaco’s International Exploration Company. While at Texaco,
Mr. Ingriselli negotiated a successful foreign oil development
investment contract in China in 1983. In 1992, Mr. Ingriselli was
named President of Texaco International Operations Inc. and over
the next several years directed Texaco’s global initiatives
in exploration and development. In 1996, he was appointed President
and CEO of the Timan Pechora Company, a Houston, Texas
headquartered company owned by affiliates of Texaco, Exxon, Amoco
and Norsk Hydro, which was developing an investment in Russia. In
1998, Mr. Ingriselli returned to Texaco’s Executive
Department with responsibilities for Texaco’s power and
natural gas operations, merger and acquisition activities, pipeline
operations and corporate development. In August 2000, Mr.
Ingriselli was appointed President of Texaco Technology Ventures,
which was responsible for all of Texaco’s global technology
initiatives and investments. In 2001, Mr. Ingriselli retired from
Texaco after its merger with Chevron, and founded Global Venture
Investments LLC, which we refer to as GVEST, an energy consulting
firm, for which Mr. Ingriselli continues to serve as the President
and Chief Executive Officer. In February 2016, Mr. Ingriselli
founded Blackhawk Energy Ventures Inc., which we refer to as BEV,
an energy consulting firm wholly-owned by him for which Mr.
Ingriselli currently serves as President and Chief Executive
Officer. We believe Mr. Ingriselli’s positions with GVEST and
BEV require only an immaterial amount of Mr.
Ingriselli’s time and do not conflict with his roles or
responsibilities with our company. In 2005, Mr. Ingriselli
co-founded Erin Energy Corporation (formerly CAMAC Energy, Inc.) a
publicly traded independent energy company headquartered in
Houston, Texas, and served as its President, Chief Executive
Officer and a member of its board of directors from 2005 to July
2010 and currently serves as Chairman of Erin Energy
Corporation after being re-appointed in May 2017.
From 2000 to 2006, Mr. Ingriselli sat on the board
of directors of the Electric Drive Transportation Association
(where he was also Treasurer) and the Angelino Group, and was an
officer of several subsidiaries of Energy Conversion Devices Inc.,
a U.S. public corporation engaged in the development and
commercialization of environmental energy technologies. From 2001
to 2006, he was a Director and Officer of General Energy
Technologies Inc., a “technology
facilitator” to Chinese
industry serving the need for advanced energy technology and the
demand for low-cost high quality components, and Eletra Ltd, a
Brazilian hybrid electric bus developer. Mr. Ingriselli currently
sits on the Board of Trustees of the Eurasia Foundation, a
Washington D.C.-based non-profit that funds programs that build
democratic and free market institutions in the new independent
states of the former Soviet Union, and since May 2015, as a
non-executive director and Chairman of the Board of Caspian Energy
Inc., an oil and gas exploration company operating in
Kazakhstan.
Mr.
Ingriselli graduated from Boston University in 1975 with a Bachelor
of Science degree in Business Administration. He also earned a
Master of Business Administration degree from New York University
in both Finance and International Finance in 1977 and a Juris
Doctor degree from Fordham University School of Law in
1979.
A copy of the form of Restricted Shares Grant
Agreement for the award granted to Mr. Ingriselli on May 10, 2018
is attached as Exhibit 4.2
to the Company’s Registration
Statement on Form S-8 filed with the U.S. Securities and Exchange
Commission on October 31, 2013 and is incorporated by reference
into this Item 5.02.
The
foregoing description of the Ingriselli Employment Agreement does
not purport to be complete and is qualified in its entirety by
reference to the Ingriselli Employment Agreement, a copy of which
is filed herewith as Exhibit 10.1 and incorporated
in this Item 5.02 by reference.
Consulting Agreement and Separation Agreement
In connection with Mr. Michael L. Peterson’s
pending May 31, 2018 departure as the Company’s President and
Chief Executive Officer to assume the position of President of the
Taiwan Mission of The Church of Jesus Christ of Latter-day Saints
in Taipei, Taiwan (as previously disclosed in the Current Report on
Form 8-K filed by the Company on April 24, 2018), the Company and
Mr. Peterson have entered into a customary Employee Separation and
Release (the “Separation
Agreement”), pursuant to
which Mr. Peterson agreed to fully-release the Company from all
claims, in exchange for the Company agreeing to make a lump sum
payment of $20,000 upon effectiveness of the Separation Agreement.
In addition, in order to assist in the transition of his executive
duties to Mr. Ingriselli, and to continue to support the
Company’s ongoing efforts to restructure its debt prior to
its maturity in the second quarter of 2019, Mr. Peterson has agreed
to continue to work with the Company in a consulting capacity for a
period of twelve (12) months commencing June 1, 2018 (the
“Consulting
Term”, which is renewable
thereafter for additional one month terms pursuant to the terms of
the agreement) pursuant to an Independent Contractor Agreement
dated May 10, 2018 entered into by and between the Company and Mr.
Peterson (the “Peterson Consulting
Agreement”). Pursuant to the
Peterson Consulting Agreement, Mr. Peterson shall provide the
Company with executive transition, debt restructuring, strategic
planning and capital markets support and services through the
Consulting Term in exchange for monthly fee of $5,000. The Peterson
Consulting Agreement is terminable by the Company at any time for
“Cause”,
as similarly defined under the Ingriselli Employment Agreement as
described above.
The
foregoing descriptions of the Separation Agreement and the Peterson
Consulting Agreement do not purport to be complete and are
qualified in their entirety by reference to the Separation
Agreement and Peterson Consulting Agreement, copies of which are
filed as Exhibits
10.2 and 10.3 hereto, respectively, and
incorporated in this Item 5.02 by reference.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits.
|
Exhibit No.
|
|
Description
|
|
|
|
|
|
|
|
Employment
Agreement, dated May 10, 2018, by and between Frank C. Ingriselli
and Pacific Energy Development Corp.
|
|
|
|
Employee
Separation and Release, dated May 10, 2018, by and between Michael
L. Peterson and PEDEVCO Corp.
|
|
|
|
Independent
Contractor Agreement, dated May 10, 2018, by and between Michael L.
Peterson and PEDEVCO Corp.
|
* Filed herewith.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
|
|
|
|
|
|
PEDEVCO CORP.
|
|
|
|
|
|
|
By:
|
/s/ Michael L. Peterson
|
|
|
|
Michael
L. Peterson
|
|
|
|
President
and Chief Executive
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Date: May
10, 2018
EXHIBIT INDEX
|
Exhibit No.
|
|
Description
|
|
|
|
|
|
|
|
Employment
Agreement, dated May 10, 2018, by and between Frank C. Ingriselli
and Pacific Energy Development Corp.
|
|
|
|
Employee Separation and Release, dated May 10, 2018, by and between
Michael L. Peterson and PEDEVCO Corp.
|
|
|
|
Independent Contractor Agreement, dated May 10, 2018, by and
between Michael L. Peterson and PEDEVCO Corp.
|
* Filed herewith.