PROPOSAL THREE
APPROVAL OF AMENDMENTS TO LTIP
General
On September 13, 2005, subject to stockholder approval, the Board adopted the Abraxas Petroleum Corporation 2005 Employee Long-Term Equity
Incentive Plan, or LTIP, which was approved by our stockholders at the 2006 annual meeting and amended by our stockholders at the 2008 annual meeting.
On June 29, 2009, the Board amended the LTIP, subject to stockholder approval, to increase the number of shares of common stock reserved
for issuance under the LTIP to 5,200,000 shares, which was approved on October 5, 2009 by our stockholders.
On March 9,
2012, the Board amended the LTIP, subject to stockholder approval, to increase the number of shares of common stock reserved for issuance under the LTIP to 9,200,000 shares, which was approved on May 4, 2012 by our stockholders.
On March 3, 2015, the Board amended and restated the LTIP, subject to stockholder approval, to increase the number of shares of common
stock reserved for issuance under the LTIP by 1,400,000 shares, which was approved on May 5, 2015. Due to a clerical mistake in the proxy statement for our annual meeting in 2015, the number of shares reserved for issuance under the LTIP was
incorrectly stated as 6,600,000 shares, which was less than the 9,200,000 shares previously approved for issuance by the stockholders in 2012. The Board had intended that a total of 10,600,000 shares be reserved for issuance under the LTIP when it
approved the increase in 2015. Upon discovering this mistake, it was determined that we should seek the affirmative vote of the stockholders to ratify that a total of 10,600,000 shares are reserved for issuance under the LTIP and to correct the LTIP
as it appeared in our proxy statement for the 2015 annual meeting to reflect that a total of 10,600,000 shares are reserved for issuance under the LTIP, which was approved on May 10, 2016 by our stockholders.
On March 14, 2017, the Board of Directors approved, subject to stockholder approval, an amendment to the LTIP to increase the number of
shares of common stock reserved for issuance under the LTIP to 12,600,000 shares and an amendment to change the vesting of awards in the event of a Change of Control (as defined in the LTIP), which was approved by our stockholders at the 2017 annual
meeting.
On October 19, 2020 the Board of Directors effected a reverse stock split of the authorized, issued, and outstanding shares
of Abraxas common stock at a ratio of 1-for-20, such that every holder of such common stock received one share of common stock for every 20 shares they held. As of
December 31, 2020, a total of 183,639 shares of Abraxas common stock were reserved under the LTIP.
On [April 14], 2021, the
Board of Directors approved, subject to stockholder approval, an amendment to the LTIP to increase the number of shares of common stock reserved for issuance under the LTIP to 1,683,639 shares and an amendment to increase the maximum annual award
for any one employee under the LTIP to 250,000. In order to effectuate the increase in the number of authorized shares, Section 4(a) of the LTIP would be amended to read, in its entirety, as follows:
(a) Reservation of Shares. The shares of Common Stock reserved under this Plan shall be 1,683,639 shares of Common
Stock. If an Award expires, is forfeited or becomes unexercisable for any reason without having been exercised in full, the undelivered Shares which were subject thereto shall, unless this Plan has been terminated, become available for future Awards
under this Plan. The Shares may be authorized but unissued, or reacquired shares of Common Stock. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the
requirements of this Plan.
In order to effectuate the increase in the maximum number of shares an employee can potentially be awarded
each year, Section 6(b) of the LTIP would be amended to read, in its entirety, as follows:
(b) Maximum Annual
Participant Award. The aggregate number of Shares with respect to which an Award or Awards may be granted to any one Participant in any one taxable year of the Company shall not exceed 250,000 shares of Common Stock (subject to adjustment as set
forth in Section 5(a)).
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