Battalion Oil Corp PRE 14A, filed Apr 17, 2025
Battalion Oil Corp (BATL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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the Securities Exchange Act of 1934
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| | BATTALION OIL CORPORATION 820 Gessner Road, Suite 1100 |
| |
NOTICE OF 2025 Annual Meeting of Stockholders
April [ ], 2025
To the Stockholders of Battalion Oil Corporation:
The 2025 Annual Meeting of Stockholders (the “Annual Meeting”) of Battalion Oil Corporation (the “Company”) will be held on Thursday, June 12, 2025, at 11:00 a.m., Central Time, at Two Memorial City Plaza, 820 Gessner Road, Magnolia Conference Room (Suite 280), Houston, Texas 77024, for the following purposes:
1. | To elect six directors to serve until the next annual meeting of stockholders in accordance with our certificate of incorporation and bylaws; |
2. | To approve, in a non-binding advisory vote, the executive compensation of the Company’s named executive officers; |
3. | To determine, in a non-binding advisory vote, whether a stockholder vote to approve the compensation of the Company’s named executive officers should occur every one, two or three years; |
4. | To approve a proposed amended and restated certificate of incorporation, which will amend and restate our current Amended and Restated Certificate of Incorporation (the “Charter”), to: |
4(a) | adopt a provision to provide for the exculpation of officers as permitted by recent amendments to Delaware law (the “Officer Exculpation Amendment”); |
4(b) | adopt a provision to waive the corporate opportunity doctrine with respect to the Company’s stockholders, directors and their affiliates (the “Corporate Opportunity Amendment”); |
4(c) | adopt a provision revising the votes required to amend, revise, or otherwise modify the terms of preferred stock, including when set forth in a certificate of designations (the “Preferred Stock Voting Amendment”); and |
4(d) | further update the Charter’s text by removing or modifying expired provisions, integrating previously approved amendments and making minor clarifications and other updates, including to approve the amended terms of our Series A-1 Redeemable Convertible Preferred Stock that had been previously approved by holders of our preferred stock but not by our common stockholders (the “Charter Updates”). |
5. | To transact such other business as may properly come before the Annual Meeting or any adjournment thereof. |
If you were a stockholder as of the close of business on April 17, 2025 (the “Record Date”), you are entitled to notice of, and to vote at, the Annual Meeting and at any adjournment thereof. Admittance at the Annual Meeting will be limited to stockholders of record as of the Record Date. Stockholders will need to provide a valid photo ID and proof of ownership of our common stock (e.g., the Notice, voting instruction form or brokerage statement).
We are pleased to furnish our proxy materials, including the Company’s Annual Report on Form 10-K, for the fiscal year ended December 31, 2024, to each stockholder of record, over the Internet, as permitted by Securities and Exchange Commission rules. This process will enable us to provide you with a convenient way to access our proxy materials, while reducing the amount of paper necessary to produce these materials, as well as the costs associated with mailing these materials to all stockholders of record. Accordingly, on or about April [ ], 2025, the Company mailed the Notice of Internet Availability of Proxy Materials (the “Notice”) to all stockholders of record as of the Record Date and posted its proxy materials on the website referenced in the Notice. As more fully described in the Notice, all stockholders may choose to access the proxy materials on the website referred to in the Notice or may request a printed set of the proxy materials.
Your vote is important. Please vote your proxy promptly so your shares can be represented, even if you plan to attend the Annual Meeting in person. You can vote by Internet or by telephone by using the voting procedures described in the Notice, or by requesting a printed copy of the proxy materials (including the proxy card), and completing, signing and returning the proxy card enclosed by mail. All stockholders of record as of the Record Date are cordially invited to attend the Annual Meeting.
By order of the Board of Directors of Battalion Oil Corporation: | |
/s/ Jonathan D. Barrett | |
| Jonathan D. Barrett, Chairman of the Board |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
The 2025 Annual Meeting of Stockholders TO BE HELD ON June 12, 2025
The Notice and our proxy materials, including the Company’s Annual Report on Form 10-K, for the fiscal year ended December 31, 2024, are available on the Internet at www.proxyvote.com and at http://www.battalionoil.com/investors/annual-report-proxy-materials/.
Table of Contents
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820 Gessner Road, Suite 1100 ⁞ Houston, Texas 77024
Telephone: 832.538.0300
Proxy Statement
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON June 12, 2025
General Information
These proxy materials are being furnished to you in connection with the solicitation of proxies by the board of directors (“Board”) of Battalion Oil Corporation, a Delaware corporation (referred to in this proxy statement as “Battalion,” the “Company,” “we,” “us,” or “our”), for use at the annual meeting of stockholders, and any adjournments or postponements thereof, to be held on Thursday, June 12, 2025 at 11:00 a.m., Central Time, at Two Memorial City Plaza, 820 Gessner Road, Magnolia Conference Room (Suite 280), Houston, Texas 77024.
Electronic Availability of Proxy Statement and Annual Report
As permitted under the rules of the Securities and Exchange Commission (the “SEC”), Battalion is making this proxy statement and its Annual Report on Form 10-K, for the fiscal year ended December 31, 2024, available to its stockholders electronically via the Internet. On or about April [ ], 2025, Battalion mailed a Notice of Internet Availability of Proxy Materials (the “Notice”) to its stockholders of record, as of the close of business on April 17, 2025 (the “Record Date”), which Notice sets forth instructions for accessing Battalion’s proxy materials electronically and instructions on how a stockholder can request to receive paper or e-mail copies of Battalion’s proxy materials.
Attendance and Participation
Attendance at the Annual Meeting will be limited to stockholders of record as of the Record Date. To be admitted to the Annual Meeting, you will be required to provide a photo ID and documentation showing that you owned common stock as of the Record Date. If you are a beneficial owner, you will also be required to provide the notice or voting instruction form you received from your broker, bank or other nominee or a brokerage statement reflecting your ownership of common stock as of the Record Date.
Even if you plan to attend the Annual Meeting in person, the Company strongly recommends that you vote your shares in advance (as described below) to ensure that your vote is counted, should you later be unable to attend the Annual Meeting.
Voting and Revocation of Proxies
If you provide specific voting instructions, your shares will be voted as you instruct. Whether you hold shares directly as a stockholder of record, or beneficially in street name, you may direct how your shares are voted at the annual meeting. If you are a stockholder of record, you may vote by submitting a proxy or by voting at the annual meeting, and if you hold your shares in street name, you may vote by submitting voting instructions to your broker, trustee or other nominee.
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You may cast your vote by proxy as follows:
| Internet at www.proxyvote.com by following the instructions on the Notice, or if you received proxy materials by mail, the proxy card; |
| Telephone by calling 1-800-690-6903 and following the voice prompts; or |
| Mailing the completed, signed and dated proxy card if you received proxy materials by mail, in the pre-addressed postage-paid envelope enclosed therewith. |
Unless you otherwise direct in your proxy, the individuals named in the proxy card will vote the shares represented by such proxy in accordance with the recommendations of our Board. If you hold your shares in street name, please refer to the proxy card forwarded by your broker, trustee or other nominee to see which voting options are available to you and for instructions on how to vote. If you vote by Internet or by telephone, you need not return your proxy card. Proxies granted by telephone or over the Internet, in accordance with the procedures set forth on the proxy card, will be valid under Delaware law.
If you sign the proxy card of your broker, trustee or other nominee but do not provide voting instructions, your shares will not be voted unless your broker, trustee or other nominee has discretionary authority to vote. When a broker, trustee or other nominee holding shares for a beneficial owner is unable to vote on a particular proposal because such broker, trustee or other nominee does not have discretionary authority to vote in the absence of timely instructions from the beneficial owner, this is referred to as a “broker non-vote.” It is therefore particularly important that you indicate on the proxy card of your broker, trustee or other nominee how you want your shares to be voted in the election of the six director nominees named in this proxy statement and the other proposals to be voted upon at our annual meeting.
The Board is not aware of any business to be brought before the annual meeting other than as indicated in the Notice. If any other matter does come before the meeting, the persons named in the proxy card will vote the shares represented by the proxy in his or her best judgment.
Revocation of Proxy. A proxy may be revoked by a stockholder at any time prior to it being voted by delivering a revised proxy (by one of the methods described above) bearing a later date; voting in person at the annual meeting; or notifying our Corporate Secretary of the revocation in writing at our address set forth above in time to be received before the annual meeting.
Attendance at the meeting alone will not effectively revoke a previously executed and delivered proxy. If a proxy is properly executed and is not revoked by the stockholder, the shares it represents will be voted at the meeting in accordance with the instructions from the stockholder. If the proxy card is signed and returned without specifying choices, the shares will be voted in accordance with the recommendations of our Board. If your shares are held in an account at a broker, trustee or other nominee, you should contact your broker, trustee or other nominee to change your vote.
Record Date and Vote Required for Approval. The record date with respect to this solicitation is April 17, 2025. Our voting stock consists of issued and outstanding shares of our common stock. Except as otherwise required by law or the Company’s certificate of incorporation, holders of our preferred stock shall not be entitled vote on matters submitted to the Company’s stockholders for approval. All holders of record of our common stock as of the close of business on April 17, 2025, are entitled to vote at the annual meeting and any adjournment or postponement thereof for which a new record date has not been established. As of the record date, we had 16,456,563 shares of common stock outstanding each of which entitles its holder to one vote on each matter submitted to our stockholders. Our stockholders do not have cumulative voting rights. In accordance with our bylaws, the holders of a majority of our common stock issued and outstanding and entitled to vote at the annual meeting, represented in attendance or by proxy, shall constitute a quorum at the annual meeting. If a quorum is not present at the annual meeting, a vote for adjournment will be taken among the stockholders present or represented by proxy. If a majority of the stockholders present or represented by proxy vote for adjournment, it is our intention to adjourn the meeting until a later date and to vote proxies received at such adjourned meeting. The place and date
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to which the annual meeting would be adjourned would be announced at the meeting, but would in no event be expected to be more than 30 days after the date of the annual meeting.
Election of director nominees requires that each director be elected by a majority of the votes present in attendance or represented by proxy at the annual meeting and entitled to vote on this matter, thus the number of shares voted “FOR” a nominee must exceed the number of shares voted as “Withhold” from such nominee. For purposes of determining the outcome for each nominee broker non-votes will not be counted as entitled to vote and will have no effect on the outcome of the vote.
As an advisory vote, the proposal to approve the compensation of our named executive officers is not binding upon the Company. Additionally, the proposal regarding frequency of a stockholder advisory vote on executive compensation will be determined on an advisory basis by whichever of the choices —“1 YEAR,” “2 YEARS,” or “3 YEARS”— receives the greatest number of votes cast. Although advisory in nature, the Compensation Committee of our Board, which is responsible for overseeing our executive compensation program, values the opinions expressed by our stockholders and will consider the outcomes of those votes when making future compensation decisions.
The affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock entitled to vote at the 2025 Annual Meeting is required to adopt the proposed amendment and restatement of the Company’s existing Certificate of Incorporation (the “Charter”), or to approve any of the proposed amendments to be included in the Second Amended and Restated Certificate of Incorporation (the “A&R Charter”). In the absence of voting instructions from the beneficial owner, brokers do not have discretionary authority to vote on the proposals related to amending the Charter; therefore, brokers are not entitled to vote on this proposal. Abstentions and broker non-votes will have the same effect as votes “Against” the proposal with respect to such vote.
In addition, with respect to the Corporate Opportunity Amendment and the Preferred Stock Voting Amendment (each as defined below), the affirmative vote of a majority of the votes cast by our disinterested stockholders (within the meaning of Section 144 of the DGCL (as defined below)) with respect to each such proposal is required to adopt the amendments contemplated by such proposal (the “Disinterested Majority Standard”). Abstentions and broker non-votes will have no effect on such proposals with respect to such votes.
As of the Record Date, the Disinterested Majority Standard would be satisfied by the affirmative vote of (i) a majority of the total votes cast of shares of common stock not owned, directly or indirectly, by (x) Luminus Management, LLC, Oaktree Capital Management, LP, and Gen IV Investment Opportunities, LLC or affiliates thereof (affiliates are noted on the footnotes to the “Security Ownership of Certain Beneficial Owners and Management” table off this proxy statement) (collectively, the “Significant Stockholders”), or (y) a non-employee director of the Company for the Corporate Opportunity Amendment; and (ii) a majority of the total votes cast of shares of common stock not owned, directly or indirectly, by a holder of shares of preferred stock of the Company for the Preferred Stock Voting Amendment.
For purposes of the Corporate Opportunity Amendment, we have determined that, as of the Record Date, (i) the Significant Stockholders, which are the direct owners of shares of common stock and preferred stock of the Company, are affiliated with one or more non-employee directors and, together with our non-employee directors, are not disinterested stockholders for purposes of the Corporate Opportunity Amendment; (ii) no other affiliates or associates of such stockholders or non-employee directors own, directly or indirectly, any other shares of common stock; and (iii) no other stockholders (other than our non-employee directors) have a material interest in the Corporate Opportunity Amendment or a material relationship with any controlling stockholder or any other person that does have such a material interest. For purposes of the Preferred Stock Voting Amendment, as of the Record Date, (i) the Significant Stockholders are the direct owners of all the issued and outstanding shares of preferred stock of the Company and are not disinterested stockholders for purposes of the Preferred Stock Voting Amendment; and (ii) we have determined that (x) no other affiliates or associates of such stockholders own, directly or indirectly, any shares of common stock of the Company, other than and (y) no other stockholders have a material interest in the Preferred Stock Voting Amendment or a material relationship with any controlling stockholder or any other person that does have such a material interest.
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If our stockholders do not approve the proposed amendments to the Company’s Charter, each such amendment, respectively, will not be adopted and incorporated into the A&R Charter.
If our stockholders do not approve A&R Charter, then the Second Amended and Restated Certificate of Incorporation, attached to this proxy statement as Appendix A, will not be adopted.
Proxy Solicitation. We will bear all costs relating to the solicitation of proxies. Our officers, directors and employees may solicit proxies personally, by mail, telephone, e-mail or other electronic means.
Submission of Stockholder Proposals. The deadline for submitting stockholder proposals for inclusion in our proxy statement for our next annual meeting is 120 calendar days before the one year anniversary of the date of this proxy statement. See “Submission of Stockholder Proposals for Our Next Annual Meeting of Stockholders” below for additional information.
We will provide to any stockholder, without charge and upon written request, a copy (without exhibits, unless otherwise specified) of our Annual Report on Form 10-K, as filed with the SEC for the fiscal year ended December 31, 2024. Any such request should be directed to: Battalion Oil Corporation, Attn: Corporate Secretary, 820 Gessner Road, Suite 1100, Houston, Texas 77024, telephone number: (832) 538-0300. The Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2024 is not part of the proxy solicitation materials.
Proposal 1
—Election of Directors
Our Board is committed to recruiting and retaining directors for election who will provide value to the Board through their diversity of skills, experiences and backgrounds to support the oversight of the Company’s strategy and business objectives. The Board and the Nominating & Corporate Governance Committee annually evaluate the needs of the Board as a whole and each Directors’ skills, experience and overall qualifications including independence.
Our bylaws state that the number of Directors will not be less than one nor more than seven directors. Effective June 10, 2021, the Company set the size of the Board to consist of six (6) directors. Our certificate of incorporation provides that each director nominee will then stand for election to a term expiring at the subsequent annual meeting of stockholders. Notwithstanding the expiration date of their term, each Director holds office until his or her successor is duly elected and qualified, or until such director’s earlier death, incapacity, resignation or removal. As of the date of this proxy statement, our Board consists of six (6) directors, five (5) of whom have been determined to be independent directors, as set forth in the applicable corporate governance rules of the NYSE American.
All of our current directors, Jonathan D. Barrett, David Chang, Gregory S. Hinds, Ajay Jegadeesan, William D. Rogers and Matthew B. Steele have been nominated for re-election at the 2025 Annual Meeting. If Messrs. Barrett, Chang, Hinds, Jegadeesan, Rogers and Steele each receive a majority of votes cast in favor of his continued service on the Board, each will serve for a term expiring at the next annual meeting of stockholders.
If any nominee should for any reason become unable to serve prior to the date of the annual meeting, the shares represented by all valid proxies will be voted for the election of such other person as the Board may designate as a replacement following recommendation by the Nominating & Corporate Governance Committee, or the Board may reduce the number to eliminate the vacancy.
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Director Nominees and Board Recommendations
The following table reflects the names and ages of our current directors, the positions and offices held and the length of their continuous service as a director:
Name |
| Director |
| Age |
| Position |
|---|---|---|---|---|---|---|
Jonathan D. Barrett | | May 2020 | | 57 | | Director (Chairman of the Board); |
David Chang | | Oct. 2019 | | 45 | | Director; |
Gregory S. Hinds | | Oct. 2019 | | 61 | | Director; |
Ajay Jegadeesan | | May 2023 | | 43 | | Director; |
William D. Rogers | | Jun. 2021 | | 64 | | Director; |
Matthew B. Steele | | Apr. 2023 | | 46 | | Director; |
| The Board unanimously proposes and recommends that you vote “FOR” each of the nominees for re-election to the board of directors. |
Directors:
Jonathan D. Barrett | Independent Director and Chairman of the Board | |
Director Bio and Qualification Highlights: ■Mr. Barrett is the President of Luminus Management (“Luminus”), an investment management firm focused on investments across the capital structure of companies within the broader energy ecosystem. ■Mr. Barrett joined Luminus shortly after its founding in 2003 and has led the firm since 2011. From 2005 to 2007, he served as Managing Director and a member of the Investment Committee of LS Power Equity Advisors, the private equity arm of LS Power, a former affiliate of Luminus focused on the North American power and energy infrastructure industries. ■Prior to joining Luminus, Mr. Barrett was a Director in Salomon Smith Barney’s Merger and Acquisition Group. ■Mr. Barrett graduated with honors in Accounting from the University of Witwatersrand in Johannesburg, South Africa. ■He currently serves as a director on the boards of Luminus affiliates and certain private companies and non-profit organizations. | |
David Chang | Independent Director | |
Director Bio and Qualification Highlights: ■Mr. Chang is a Senior Vice President at LS Power Development, LLC (“LS Power”) where he is responsible for originating and managing investments in the energy sector across capital structures. ■Prior to joining LS Power in 2011, Mr. Chang was an analyst in the Global Energy investment-banking group at Credit Suisse. ■Mr. Chang holds a Bachelor of Arts in Economics and Mathematics from Columbia University. | |
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Gregory S. Hinds | Independent Director | |
Director Bio and Qualification Highlights: ■Mr. Hinds is the founder of Fenceline Minerals, LLC (“Fenceline”), a privately held company formed in 2017. ■Prior to forming Fenceline, Mr. Hinds was the Chief Operating Officer of Jagged Peak Energy, LLC (“Jagged Peak”), having joined Jagged Peak at its inception in April 2013 through March 2017. ■Prior to his tenure at Jagged Peak, Mr. Hinds was Chief Operating Officer of Ute Energy (“Ute”), a private equity backed oil and gas company with operations focused in the Uinta Basin of Northeastern Utah, which was sold in November of 2012. ■Before Ute, Mr. Hinds was the Vice President of Uinta Basin Assets for the Bill Barrett Corporation (“Barrett”), where he was primarily responsible for the development of the West Tavaputs field as well as Barrett’s Blacktail Ridge and Lake Canyon properties. Prior to joining Barrett, he served as Geological Manager for Pennaco Energy and as an Exploration Geologist for Barrett Resources. ■Mr. Hinds holds a Bachelor of Science in Geology from Louisiana State University and a Master of Science in Geology from Texas A&M University. He is a Registered Professional Geologist in Utah, Wyoming and Texas. ■He currently serves on the board of directors of Terra Energy Partners and has previously served on the boards of Altamont Energy and Ridge Runner Resources. | |
Ajay Jegadeesan | Independent Director | |
Director Bio and Qualification Highlights: ■Mr. Jegadeesan is a Senior Advisor within the Global Opportunities fund at Oaktree Capital (“Oaktree”) where he is responsible for managing investments in the energy sector across capital structures. ■Prior to joining Oaktree in 2018, Mr. Jegadeesan worked in various engineering, leadership, exploration, asset development and operational roles at W.D. Von Gonten and Company, a boutique engineering advisory firm, where he led the due diligence and asset valuations for financial institutions and exploration & production companies culminating in deployment of over 20+ billion dollars in capital from 2011-2018 and Nutech Energy Alliance, and Schlumberger Technology Corporation. ■Mr. Jegadeesan holds a Master of Science degree in Chemical Engineering from Oklahoma State University and a Masters of Petroleum Engineering degree from the University of Houston. ■Mr. Jegadeesan currently serves as a director on the board of Sierra Energy Holdings and previously served on the board of PureWest Energy. | |
Matthew B. Steele | Director and Chief Executive Officer | |
Director Bio and Qualification Highlights: ■Mr. Steele has served as a director and Chief Executive Officer of the Company since April 2023. ■Mr. Steele was a founder and has been a member of the board of directors of CarbonPath, Inc. since March 2021. ■He previously served on the board of directors of Bowline Energy LLC from August 2021 to December 2023 and the board of directors of Bruin Management Operating LLC from March 2021 to October 2023. ■He also served as a Senior Advisor for Yellow Rock LLC from October 2021 to June 2023. ■Mr. Steele was the founder of Bruin E&P Partners LLC and served as Chief Executive Officer and President from September 2015 through March 2021. ■Mr. Steele holds a Bachelor of Science in Chemical Engineering with Honors from the University of Houston. | |
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William D. Rogers | Independent Director | |
Director Bio and Qualification Highlights: ■Mr. Rogers is Managing Partner of CCE Advisory, LLC and CCE Investments LLC, providing advisory services to private equity infrastructure funds from 2019 to present. ■Mr. Rogers previously served as Executive Vice President and Chief Financial Officer of CenterPoint Energy from March 2015 to April 2019. ■Prior to his tenure at CenterPoint Energy, Mr. Rogers was Vice President and Treasurer of American Water Works Company, Inc., the largest publicly traded U.S. water and wastewater utility company, from October 2010 to January 2015. ■Mr. Rogers was also Chief Financial Officer of NV Energy, Inc. (“NV Energy”), an investor-owned utility headquartered in Las Vegas, Nevada, from February 2007 to February 2010. He has previously served as NV Energy’s Vice President of Finance, Risk and Tax, as well as Corporate Treasurer. ■Before joining NV Energy in June 2005, Mr. Rogers was a managing director in capital markets at Merrill Lynch and prior to that worked in a similar role at JPMorgan Chase in New York. ■Prior to his various roles across the utility, financial and banking industries, Mr. Rogers had a distinguished career as a commissioned officer in the United States Army. ■Mr. Rogers holds a Bachelor of Science degree from the United States Military Academy and a Master of Business Administration degree with concentration in Accounting and Finance from Duke University. ■Currently, Mr. Rogers serves as a director on the board of Grupo Protexa SA de CV, since June 2020, and previously served on the boards of Verdant Power Inc., from March 2021 to April 2022, and Enable GP, LLC (the general partner of Enable Midstream Partners, LP), from February 2015 to March 2019. He has also served as a member of the boards of directors of numerous non-profit organizations. | |
Additional information regarding the nominees for director, and all of our other directors, can be found under the sections entitled “Our Board of Directors and Its Committees,” “Security Ownership of Certain Beneficial Owners and Management,” and “Director Compensation” of this proxy statement.
Votes Required
Directors are elected by a majority vote of the votes present in person or represented by proxy and entitled to vote, thus the number of shares voted “FOR” a nominee must exceed the number of shares voted as “Withhold” from such nominee. For purposes of determining the outcome for each nominee, broker non-votes will not be counted as entitled to vote and will have no effect on the outcome of the vote. If you sign your proxy card but do not give instructions with respect to the voting of directors, your shares will be voted for each nominee for director. However, if you hold your shares in street name and do not instruct your broker how to vote in the election of directors, your shares will constitute a broker non-vote and will not be voted for any of the nominees. See the section of this proxy statement entitled “General Information—Voting and Revocation of Proxies.”
Our Board of Directors and its Committees
Meetings of Our Board of Directors and Committees of the Board
Our Board currently has four standing committees: Audit, Compensation, Nominating & Corporate Governance, and Reserves. Actions taken by our committees are reported to the full Board. Each committee conducts an annual evaluation of its duties and is expected to conduct an annual review of its charter and also has authority to retain, set the compensation for, and terminate consultants, outside counsel and other advisers as that committee determines to be appropriate. Our Board held twenty-three(23) meetings during 2024, including telephonic meetings, and acted by unanimous written consent eight (8) times. Each director attended at least 75% of the total meetings of the Board and the committee(s) on which such director serves during the period that such director served as a director or as a member on such committee(s).
The written charter of each of the Board’s committees is available on our website at www.battalionoil.com.
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Committees of the Board
Director |
| Audit |
| Compensation |
| Nominating & Corporate Governance |
| Reserves |
|---|---|---|---|---|---|---|---|---|
Jonathan D. Barrett | | | | | |
| | |
David Chang | | | |
| | | |
|
Gregory S. Hinds | |
| |
| | | |
|
Ajay Jegadeesan | | | | | |
| |
|
William D. Rogers | |
| |
| |
| | |
Matthew B. Steele | | | | | | | ||
| | | | | | | | |
Meetings held in 2024 | | 4 | | 3 | | 4 | | 4 |
| | | |
| = | Chair | |
| = | Member | |
Audit Committee. The members of our Audit Committee are Gregory S. Hinds and William D. Rogers, with Mr. Rogers serving as the chairman. Our Board has determined that all members of our Audit Committee are financially literate within the meaning of SEC rules, under the current listing standards of the NYSE American and in accordance with our audit committee charter. Our Board has also determined that all members of the Audit Committee are independent, within the meaning of SEC and applicable NYSE American regulations for independence for audit committee members, under our corporate governance guidelines, and in accordance with our Audit Committee Charter. Our Board determined that Mr. Rogers is an “audit committee financial expert” (as defined under SEC rules) because he possesses: (i) an understanding of generally accepted accounting principles in the United States of America and financial statements; (ii) the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves; (iii) experience analyzing and evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by our financial statements; (iv) an understanding of internal control over financial reporting; and (v) an understanding of audit committee functions. Mr. Rogers acquired these attributes through his educational background and by having held various positions that provided relevant experience, as described in his biography under “Proposal 1 —Election of Directors” above.
The Audit Committee is responsible for oversight of Company risks relating to accounting matters, financial reporting, cybersecurity matters and related legal and regulatory compliance. The Audit Committee annually considers the qualifications and evaluates the performance of our independent auditor and selects and engages our independent auditor. The Audit Committee meets quarterly with representatives of the independent auditor and is available to meet at the request of the independent auditor. During these meetings, the Audit Committee receives reports regarding our books of accounts, accounting procedures, financial statements, audit policies and procedures, internal accounting and financial controls, and other matters within the scope of the Audit Committee’s duties. The Audit Committee reviews the plans for and the results of audits for us and our subsidiaries. The Audit Committee reviews the independence of the independent auditor and considers and authorizes the fees for both audit and non-audit services provided by the independent auditor.
Compensation Committee. The members of our Compensation Committee are David Chang, Gregory S. Hinds and William D. Rogers, with Mr. Chang serving as the chairman. Our Board has determined that each member of the Compensation Committee meets the NYSE American standards for independence, and is a “non-employee director” as defined in Rule 16b-3 under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), an “outside director” as defined for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended, and meets the enhanced independence requirements set forth in Rule 10C-1 under the Exchange Act.
The Compensation Committee is entrusted with the overall responsibility for establishing, implementing and monitoring the compensation for our executive officers, administers the Battalion Oil Corporation 2020 Long-Term Incentive Plan (as amended, the “Plan”), and recommends awards and other stock-based grants under the Plan for our executive officers.
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Our Compensation Committee may engage an outside independent compensation-consulting firm or seek other third-party advisement to assist the Board and the Compensation Committee in crafting our compensation program for our executive officers and to assist the Board in determining compensation for our non-employee directors. In connection with any engagement, the independent compensation consultant is tasked with, among other things, making recommendations to the Compensation Committee regarding an appropriate compensation peer group, assisting the Compensation Committee in establishing a competitive executive compensation program and making recommendations and providing analysis regarding the compensation of our executive officers, including the named executive officers, discussed below under the heading “Executive Compensation.”
Nominating & Corporate Governance Committee. The members of our Nominating & Corporate Governance Committee are Jonathan D. Barrett, Ajay Jegadeesan and William D. Rogers, with Mr. Rogers serving as the chairman. Our Board has determined that all members of the Nominating & Corporate Governance Committee are independent pursuant to the applicable NYSE American rules, under our corporate governance guidelines, and in accordance with our Nominating & Corporate Governance Committee Charter.
Our Nominating & Corporate Governance Committee is responsible for identifying qualified candidates to be presented to our Board for nomination as directors, ensuring that our Board and our organizational documents are structured in a way that best serves our practices and objectives, and developing and recommending a set of corporate governance principles. The Nominating & Corporate Governance Committee may consider candidates for our Board from any reasonable source, including a search firm engaged by the Nominating & Corporate Governance Committee, recommendations of the Board, management or nominations from our stockholders, in accordance with the procedures set forth in our bylaws. Although there is no specific policy regarding the consideration of diversity in identifying candidates, our Nominating & Corporate Governance Committee seeks to ensure the Board has diverse representation and the necessary skills to meet the corporate objectives and may consider whether the nominee, if elected, assists in achieving a mix of Board members that represents a diversity of thoughts, industry experience, corporate and technical experience, age, gender, racial and ethnic background.
Reserves Committee. The members of our Reserves Committee are David Chang, Gregory S. Hinds and Ajay Jegadeesan, with Mr. Hinds serving as the chairman. Our Reserves Committee is composed solely of non-employee directors who are independent under our corporate governance guidelines and in accordance with our Reserves Committee Charter. Our Reserves Committee assists our Board with oversight in the preparation by independent petroleum engineers of annual and any special reserve reports and/or audits of the estimated amounts of our consolidated hydrocarbon reserves and related information. The Reserves Committee selects, engages and determines funding for the independent petroleum engineers, who evaluate our hydrocarbon reserves, and also determines their independence from the Company in accordance with, among other things, the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers.
Corporate Governance Matters
Corporate Governance Web Page and Available Documents. We maintain a corporate governance page on our website at www.battalionoil.com/investors/corporate-governance where you can find the following documents:
| ● | our Corporate Governance Guidelines; |
| ● | our Code of Ethics for the Chief Executive Officer and Senior Financial Officers; |
| ● | our Code of Conduct; |
| ● | our |
| ● | our Regulation FD Policy; and |
| ● | charters of our Audit, Compensation, Nominating & Corporate Governance, and Reserves Committees. |
Notwithstanding any reference to our website contained in this proxy statement, the information you may find on our website is not part of this proxy statement. We will provide a printed copy of these documents, without charge, to stockholders who request copies in writing from: Battalion Oil Corporation, Attn: Corporate Secretary, 820 Gessner Road, Suite 1100, Houston, Texas 77024.
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Director Independence. The current listing standards of the NYSE American require that our Board affirmatively determine the independence of each director and disclose such determination in the proxy statement for each annual meeting of our stockholders. On March 27, 2025, the Board affirmatively determined that each of Jonathan D. Barrett, David Chang, Gregory S. Hinds, Ajay Jegadeesan and William D. Rogers is an “independent director” under the guidelines described below and the applicable independence rules of the NYSE American.
In connection with its assessment of independence, our Board reviewed information regarding relevant relationships, arrangements or transactions between the Company and each director or parties affiliated with such director. Our Board has established the standards set forth below for determining director independence in our corporate governance guidelines.
A majority of the directors on our Board must be “independent.” No director qualifies as “independent” unless the Board affirmatively determines that such director has no “material relationship” with the Company, either directly, or as a partner, stockholder or officer of an organization that has a relationship with the Company. A “material relationship” is a relationship that the Board determines, after consideration of all relevant facts and circumstances, compromises the director’s independence from management. Our Board’s determination of independence must be consistent with all applicable requirements of the NYSE American, the SEC, and any other applicable legal requirements. Our Board may adopt specific standards or guidelines for independence in its discretion from time to time, consistent with those requirements.
Our corporate governance guidelines set forth our policy with respect to qualifications of the members of the Board, the standards of director independence, director responsibilities, Board meetings, director access to management and independent advisors, director orientation and continuing education, director compensation, management evaluation and succession, annual performance evaluation of the Board, and executive sessions.
Nomination Process. The Nominating & Corporate Governance Committee will consider stockholder nominees for election as directors. Any stockholder nominations must be received by us not less than sixty (60) days nor more than ninety (90) days prior to the annual meeting; provided however, that in the event that less than seventy (70) days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder, to be timely, must be received no later than the close of business on the tenth (10th) day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made, whichever first occurs. Nominations should be delivered to the Nominating & Corporate Governance Committee at the following address: Nominating & Corporate Governance Committee, c/o Battalion Oil Corporation, Attn: Corporate Secretary, 820 Gessner Road, Suite 1100, Houston, Texas 77024.
The stockholder’s nomination notice must set forth: (i) as to each person whom the stockholder proposes to nominate for election or re-election as a director: (a) the name, age, business address and residence address of the person; (b) the principal occupation or employment and business experience of the person for at least the previous five years; (c) the class and number of shares of our capital stock which are beneficially owned by the person; and (d) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to the rules and regulations of the SEC under Section 14 of the Exchange Act; and (ii) as to the stockholder giving the notice: (a) the name and record address of the stockholder; and (b) the class and number of shares of our capital stock beneficially owned by the stockholder. Such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director, if elected. We may require any proposed nominee to furnish such other information as may reasonably be required by us to determine the eligibility of such proposed nominee to serve as a director.
In considering possible candidates for election as a director, the Nominating & Corporate Governance Committee is guided by the principles that each director should be an individual of high character and integrity and have:
| ● | independence; |
| ● | business experience that will contribute meaningfully to the deliberations of our Board; |
| ● | a proven record of accomplishment; |
| ● | a willingness to commit time and energy to our business affairs; and |
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| ● | diversity of thoughts and knowledge to challenge both the Board and management on technical and business matters. |
In considering possible candidates for election as directors, the Nominating & Corporate Governance Committee may, in its discretion, review the qualifications and backgrounds of existing directors and other nominees (without regard to whether a nominee has been recommended by stockholders), as well as the overall composition of our Board, and recommend the slate of directors to be nominated for election at the ensuing annual meeting of stockholders.
The charter of our Nominating & Corporate Governance Committee provides that the committee will evaluate our corporate governance effectiveness and recommend such revisions, as it deems appropriate, to improve our corporate governance. The areas of evaluation may include such matters as the size and independence requirements of our Board, Board committees, management succession and planning, and regular meetings of our non-employee directors without management in executive sessions.
The Nominating & Corporate Governance Committee has not received any stockholder recommendations for nomination to our Board in connection with this year’s annual meeting. The Nominating & Corporate Governance Committee has recommended Messrs. Barrett, Chang, Hinds, Jegadeesan, Rogers and Steele for re-election.
Board Diversity. Our Nominating & Corporate Governance Committee charter requires the committee to review the composition of the Board as a whole and recommend, if necessary, measures to be taken so that our Board not only contains the required number of independent directors, but also reflects a diverse set of skills with the balance of knowledge, experience, skills, expertise, integrity, analytical ability and diversity as a whole that the committee deems appropriate. This review includes an assessment as to our Board’s current and anticipated need for directors with specific qualities, skills, experience or backgrounds; the availability of highly qualified candidates; committee workloads and membership needs; and anticipated director retirements. In making its recommendations, the Nominating & Corporate Governance Committee will also consider diversity on gender, racial, ethnic and any other self-identified diversity characteristics of directors and candidates to become directors, all with a view towards enhancing the effectiveness of our Board.
Leadership Structure. The Company’s bylaws provide that our Board annually elect one of its members to serve as Chairman; Mr. Jonathan Barrett currently serves as Chairman of the Board. Our Board believes that the interests of the Company and its stockholders are best served by maintaining the positions of Chairman and Chief Executive Officer separate and that this division of responsibilities provides an effective and efficient approach for addressing risk management.
Our corporate governance guidelines currently provide that non-management directors must meet at regularly scheduled executive sessions without management. During 2024, our non-management directors held four (4) executive sessions without management present.
Risk Oversight. It is the job of our executive officers, and other members of our senior management, to identify, assess, and manage our exposure to risk. At times, management has retained outside consultants to assist in identifying, assessing, analyzing and developing plans to mitigate enterprise risks. Our Board plays an important role in overseeing management’s performance of these functions. Our Board requires management to discuss and review efforts, policies and risks related to environmental, social, and governance (ESG). Identified metrics are measured and monitored with on-going dialogue with management on additional regulatory, compliance and community related requirements. Our Board has approved the Audit Committee Charter, which lists the primary responsibilities of the Audit Committee. Those responsibilities require the Audit Committee to discuss with management our major financial risk exposures and the steps management has taken to monitor and control such exposures, including cyber security risks, the substance of any significant litigation, contingencies or claims that had, or may have, a significant impact on the financial statements. The Audit Committee is also required to discuss with management and review the mechanisms, guidelines and policies that govern the processes by which risk assessment and management are undertaken.
Each of the Board’s other committees also oversee the management of risks that fall within such committee’s area of responsibility. Our Compensation Committee incorporates risk considerations, including the risk
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of loss of key personnel, as it evaluates the performance of our executive officers, reviews management development and determines compensation structure and amounts. Our Nominating & Corporate Governance Committee focuses on issues and risks relating to Board composition, leadership structures, succession planning and corporate governance matters. The focus of our Reserves Committee is on the integrity of the process of selecting our independent petroleum engineers and whether reports prepared by our independent petroleum engineers are prepared in accordance with the accepted or required petroleum engineering standards.
Our Board receives reports from its committees regarding the risks considered in their respective areas to ensure that our Board has a broad view of our strategy and overall risk management process. In performing its risk oversight function, each committee has full access to management, as well as the ability to engage advisors. Each committee’s charter is available on our website at www.battalionoil.com.
Policies as to Hedging and Company Securities. Our insider trading policy provides that the Company’s directors, officers (including named executive officers) and other employees (and certain other covered individuals) are specifically prohibited from, among other things, (i) selling Company securities short; or (ii) in respect of Company securities, engaging in put options, call options or other derivative securities on an exchange or in any other organized market. Our employees and directors are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan. Additionally, the policy provides for restrictions on the unauthorized disclosure of any non-public information acquired in the workplace and the misuse of material non-public information in securities trading. The Company’s trading window is managed to meet the objectives of this policy and to maintain compliance with SEC guidelines.
Incentive Compensation Recoupment Policy. On November 28, 2023, our Board adopted an Incentive Compensation Recoupment Policy (the “Recoupment Policy”). Under the Recoupment Policy, our Board, unless the Compensation Committee deems it impracticable, may take reasonably prompt action to recoup all amounts of erroneously awarded compensation in the event that the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under U.S. securities laws, including any required accounting restatement to correct a material error in previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.
Communications with Directors. Our Board welcomes communications from our stockholders and other interested parties. Stockholders and any other interested parties may send communications to our (i) Board; (ii) any committee of our Board; (iii) Chairman of the Board; or (iv) any director in particular, directed to: Battalion Oil Corporation, Attn: Corporate Secretary, 820 Gessner Road, Suite 1100, Houston, Texas 77024.
Any correspondence addressed to our Board, to any committee of our Board, to the Chairman of the Board, or to any one of the directors in care of our offices is required to be forwarded to the addressee or addressees without review by any person to whom such correspondence is not addressed.
Directors’ Attendance at Stockholder Meetings. Our corporate governance guidelines provide that our directors are encouraged, but not required, to attend annual meetings of our stockholders. At the 2024 annual meeting of stockholders, none of our non-employee directors were able to attend the meeting.
Certain Relationships and Related Party Transactions
As required under SEC rules, the Company is required to disclose in our proxy statements any transactions that are determined to be directly or indirectly material to the Company or a related person.
In 2023 and 2024, the Company entered into the purchase agreements (further described below) with Luminus Management, LLC (“Luminus Management”), Oaktree Capital Management, LP (“Oaktree Capital”), and Gen IV Investment Opportunities, LLC (“Gen IV”), or affiliates thereof (collectively, the “Investors”), our largest three (3) existing shareholders, whose appointed representatives make up fifty percent (50%) of our Board, namely (i) Mr. Barrett, President of Luminus Management, (ii) Mr. Jegadeesan, Senior Advisor at Oaktree Capital, and (iii) Mr. Chang, Senior Vice President at LS Power Development, LLC (an affiliate of Gen IV). Each of the transactions
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contemplated by the purchase agreements was approved by our Board upon recommendation by a special committee of disinterested directors that was established to evaluate the proposed terms of each transaction.
Series A Preferred Stock Purchase Agreement. Purchase Agreement dated March 24, 2023, pursuant to which the Company issued an aggregate of 25,000 shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”) for an aggregate purchase price of approximately $24,375,000. The allocated shares of Series A Preferred Stock issued to, and purchase price paid by, each of the Investors was: (i) 13,336 shares of Series A Preferred Stock issued to Luminus Energy Partners Master Fund, Ltd. (an affiliate of Luminus Management, collectively, “Luminus”) for the purchase price of $13,002,600; (ii) 6,526 shares of Series A Preferred Stock issued to OCM HLCN Holdings, L.P. (an affiliate of Oaktree Capital, collectively “Oaktree”) for the purchase price of $6,362,850; and (iii) 5,138 shares of Series A Preferred Stock issued to Gen IV for the purchase price of $5,009,550.
Series A-1 Preferred Stock Purchase Agreement. Purchase Agreement dated September 6, 2023, pursuant to which the Company issued an aggregate of 38,000 shares of Series A-1 Convertible Preferred Stock (the “Series A-1 Preferred Stock”) for an aggregate purchase price of approximately $37,050,000. The allocated shares of Series A-1 Preferred Stock issued to, and purchase price paid by, each of the Investors was: (i) 20,269 shares of Series A-1 Preferred Stock issued to Luminus for the purchase price of $19,762,275; (ii) 9,921 shares of Series A-1 Preferred Stock issued to Oaktree for the purchase price of $9,672,975; and (iii) 7,810 shares of Series A-1 Preferred Stock issued to Gen IV for a purchase price of $7,614,750.
Series A-2 Preferred Stock Purchase Agreement. Purchase Agreement dated December 15, 2023, pursuant to which the Company issued an aggregate of 35,000 shares of Series A-2 Convertible Preferred Stock (the “Series A-2 Preferred Stock”) for an aggregate purchase price of approximately $34,125,000. The allocated shares of Series A-2 Preferred Stock issued to, and purchase price paid by, each of the Investors was: (i) 17,211 shares of Series A-2 Preferred Stock issued to Luminus for the purchase price of $16,780,725; (ii) 11,159 shares of Series A-2 Preferred Stock issued to Oaktree for the purchase price of $10,880,025; and (iii) 6,630 shares of Series A-2 Preferred Stock issued to Gen IV for a purchase price of $6,464,250.
Series A-3 Preferred Stock Purchase Agreement. Purchase Agreement dated March 27, 2024, pursuant to which the Company issued an aggregate of 20,000 shares of Series A-3 Convertible Preferred Stock (the “Series A-3 Preferred Stock”) for an aggregate purchase price of approximately $19,500,000. The allocated shares of Series A-3 Preferred Stock issued to, and purchase price paid by, each of the Investors was: (i) 9,835 shares of Series A-3 Preferred Stock issued to Luminus for the purchase price of $9,589,125; (ii) 6,376 shares of Series A-3 Preferred Stock issued to Oaktree for the purchase price of $6,216,600; and (iii) 3,789 shares of Series A-3 Preferred Stock issued to Gen IV for a purchase price of $3,694,275.
Series A-4 Preferred Stock Purchase Agreement. Purchase Agreement dated May 13, 2024, pursuant to which the Company issued an aggregate of 20,000 shares of Series A-4 Convertible Preferred Stock (the “Series A-4 Preferred Stock”) for an aggregate purchase price of approximately $19,500,000. The allocated shares of Series A-4 Preferred Stock issued to, and purchase price paid by, each of the Investors was: (i) 9,835 shares of Series A-4 Preferred Stock issued to Luminus for the purchase price of $9,589,125; (ii) 6,376 shares of Series A-4 Preferred Stock issued to Oaktree for the purchase price of $6,216,600; and (iii) 3,789 shares of Series A-4 Preferred Stock issued to Gen IV for a purchase price of $3,694,275.
Code of Conduct and Code of Ethics
The Company’s Code of Conduct and Code of Ethics for the Chief Executive Officer and Senior Financial Officers can be found on the Company’s website located at www.battalionoil.com. Any stockholder may request a printed copy of such materials by submitting a written request to: Battalion Oil Corporation, Attn: Corporate Secretary, 820 Gessner Road, Suite 1100, Houston, Texas 77024.
If the Company amends the Code of Ethics or grants a waiver, including an implicit waiver, from the Code of Ethics, the Company will disclose the information on its website. The waiver information will remain on the website for at least twelve months after the initial disclosure of such waiver.
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Executive Officers of the Company
The following table sets forth the names and ages of our executive officers, the positions and offices with us currently held by such persons and the months and years in which continuous service began:
Name |
| Exec. Officer |
| Age | | Position |
|
Matthew B. Steele | | Apr. 2023 | | 46 | | Chief Executive Officer | |
Daniel P. Rohling | | Oct. 2019 | | 42 | | Executive Vice President and Chief Operating Officer | |
Walter R. Mayer | | Feb. 2013 | | 49 | | Senior Vice President, General Counsel and Corporate Secretary | |
Our executive officers are appointed to serve until the meeting of the Board following the next annual meeting of stockholders and until their successors have been elected and qualified. Biographical information about each of our currently serving executive officers is set forth below, other than Mr. Steele, whose biographical information is included under the heading “Proposal 1—Election of Directors” above.
Daniel P. Rohling | Executive Vice President and Chief Operating Officer | |
|---|---|
Executive Officer Bio Highlights: ■Mr. Rohling has served as Executive Vice President and Chief Operating Officer since October 2019 and previously served as Vice President, Operations from September 2019 until October 2019. ■Prior to joining the Company, Mr. Rohling served as the Asset Vice President of Ajax Resources, LLC (“Ajax”), from January 2018 until it sold substantially all of its assets to Diamondback Energy, Inc. in October 2018, after which Mr. Rohling pursued additional opportunities. ■Prior to his tenure at Ajax, he served as Executive Vice President and General Manager - Rockies at XRO Energy, LLC from November 2017 to January 2018. ■Mr. Rohling began his career with El Paso Corporation (EP Energy Corporation) and served in various operations, business development and management roles, ultimately serving as Permian Basin Asset Manager from June 2013 to November 2017. ■Mr. Rohling has more than 18 years of oil and gas operations experience, earned a Bachelor of Science degree in Petroleum Engineering from Texas A&M University, and is an active member of the Society of Petroleum Engineers. | |
Walter R. Mayer | Senior Vice President, General Counsel and Corporate Secretary | |
|---|---|
Executive Officer Bio Highlights: ■Mr. Mayer has served as Senior Vice President, General Counsel since January 2023 and previously served as Vice President, Legal since 2013. ■Prior to joining the Company, Mr. Mayer served as Associate General Counsel at Petrohawk Energy Corporation starting in 2010. ■Mr. Mayer previously worked in the litigation group of Vinson & Elkins LLP focusing on commercial energy litigation. ■Mr. Mayer earned his law degree from the University of Virginia School of Law and is board certified in oil, gas and mineral law by the Texas Board of Legal Specialization. | |
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Security Ownership of Certain Beneficial Owners and Management
The following sets forth information regarding the beneficial ownership of our common stock as of March 31, 2025 by (i) each person known by us to be the beneficial owner of more than 5% of our common stock; (ii) each of our named executive officers; (iii) each of our directors; and (iv) all or our current executive officers and directors as a group. As of March 31, 2025, 16,456,563 shares of our common stock were outstanding. Unless otherwise noted, the mailing address of each person or entity named below is 820 Gessner Road, Suite 1100, Houston, Texas 77024.
Name and Address |
| Amount and Nature of |
| Percent of | |
|---|---|---|---|---|---|
Luminus Management, LLC (2) | | 16,661,693 | | 61.8 | % |
Oaktree Capital Group, LLC (3) | | 10,065,897 | | 44.7 | % |
Gen IV Investment Opportunities, LLC (4) | | 6,419,006 | | 31.3 | % |
Matthew B. Steele | | 8,782 | | * | |
Daniel P. Rohling | | 28,899 | | * | |
Walter R. Mayer | | 7,165 | | * | |
Jonathan D. Barrett (5) | | 16,661,693 | | 61.8 | % |
David Chang | | — | | * | |
Gregory S. Hinds | | 11,601 | | * | |
Ajay Jegadeesan | | — | | * | |
William D. Rogers | | 4,000 | | * | |
All current directors and executive officers as a group (8 individuals) | | 16,722,130 | | 62 | % |
| * | Less than one percent. |
| (1) | Unless otherwise indicated, each stockholder has sole voting and investment power with respect to all shares of common stock indicated as being beneficially owned by such stockholder. Shares of common stock that are not outstanding, but which a designated stockholder has the right to acquire within 60 days, are included in the number of shares beneficially owned by such stockholder and are deemed to be outstanding for purposes of determining the percentage of outstanding shares beneficially owned by such stockholder, but not for purposes of determining the percentage of outstanding shares beneficially owned by any other designated stockholder. |
| (2) | According to, and based solely upon, Schedule 13D/A filed by Luminus Management, LLC and Luminus Energy Partners Master Fund, Ltd. (collectively, “Luminus”) with the SEC on June 20, 2024. The business address for Luminus is 1811 Bering Drive, Suite 400, Houston, Texas 77057. Ownership and voting rights shared with Jonathan D. Barrett. |
| (3) | According to, and based solely upon, Schedule 13D/A filed by OCM HLCN Holdings, L.P., Oaktree Fund GP, LLC, Oaktree Fund GPI, L.P., Oaktree Capital I, L.P., OCM Holdings I, LLC, Oaktree Holdings, LLC and Oaktree Capital Group, (collectively, “Oaktree”) with the SEC on May 15, 2024. The business address for Oaktree is 333 S. Grand Avenue, 28th Floor, Los Angeles, California 90071. |
| (4) | According to, and based solely upon, Schedule 13D/A filed by Gen IV Investment Opportunities, LLC, LSP Generation IV, LLC and LSP Investment Advisors, LLC (collectively, “Gen IV”) with the SEC on June 20, 2024. The business address for Gen IV is 1700 Broadway, 35th Floor, New York, New York 10019. |
| (5) | Ownership and voting rights shared with Luminus Management, LLC. |
Executive Compensation
The following discussion of executive compensation contains descriptions of various employment-related agreements and employee benefit plans. These descriptions are qualified in their entirety by reference to the full text of the referenced agreements and plans, which have been filed by us as exhibits to our reports on Forms 10-K, 10-K/A, 10-Q and 8-K filed with the SEC.
Our compensation philosophies and programs are designed, structured and administered under the oversight of the Compensation Committee. Among the important responsibilities delegated to the Compensation Committee by our Board is evaluating the performance of, and making recommendations on the compensation of, the senior management of the Company, including the performance and compensation of our executive officers discussed below.
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For the purposes of our discussion, our named executive officers (“NEO”) for 2024 are:
Name | | | | | Title | |
|---|---|---|---|---|---|---|
Matthew B. Steele | Chief Executive Officer | |||||
Daniel P. Rohling | Executive Vice President, Chief Operating Officer | |||||
Walter R. Mayer | Senior Vice President, General Counsel and Corporate Secretary | |||||
Our Compensation Committee
The Compensation Committee of the Board is comprised entirely of independent directors in accordance with the applicable rules of the NYSE American. The primary duties and responsibilities of the Compensation Committee are to implement our compensation policies and programs for senior management, including the NEOs. The Compensation Committee has the authority under its charter to select and engage the services of a compensation consultant, independent legal counsel or other advisor after considering certain factors relevant to independence from management. After conducting its independence assessment, the Compensation Committee has the authority to engage, obtain the advice of, oversee, terminate and determine funding for such independence professional advisors, including but not limited to consulting firms, independent legal counsel or other advisors, as the Compensation Committee determines appropriate to carry out its functions. A current copy of the Compensation Committee charter is available on our website at www.battalionoil.com under the section entitled “Investors — Corporate Governance.” The Compensation Committee also reviews and assesses the adequacy of its charter, at least annually, and recommends any proposed changes to our Board for approval.
The chairman of the Compensation Committee works with our Chief Executive Officer, or the officer of the Company responsible for managing employee compensation, to establish an agenda for each meeting of the Compensation Committee and to prepare meeting materials. Various members of management, including our Chief Executive Officer, may be invited to attend all or a portion of a Compensation Committee meeting depending on the nature of the matters to be discussed. Only members of the Compensation Committee vote on items before the Compensation Committee; however, the Compensation Committee and the Board often solicit the views of senior management on compensation matters, in particular as they relate to the compensation of other members of senior management.
The Role of Our Independent Compensation Consultant
In 2024, the Compensation Committee determined not to engage an independent compensation consulting firm and relied on previously provided reports, analyses, and/or advice regarding the appropriate compensation benchmarks for our 2024 compensation program for senior management, including our NEOs.
2024 Executive Compensation
Summary Compensation Table. The table below sets forth information regarding compensation for our NEOs for the years indicated:
Name and Principal Position |
| Year |
| Salary (1) |
| Bonus |
| All Other |
| Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Matthew B. Steele | | 2024 | | $ | 294,063 | | $ | 367,500 | | $ | 1,107 | | $ | 662,670 | |
Chief Executive Officer | | 2023 | | $ | 187,500 | | $ | 125,000 | | $ | 683 | | $ | 313,183 | |
Daniel P. Rohling | | 2024 | | $ | 356,562 | | $ | 367,500 | | $ | 24,107 | | $ | 748,169 | |
Executive Vice President and Chief Operating Officer | | 2023 | | $ | 350,000 | | $ | 350,000 | | $ | 22,982 | | $ | 722,982 | |
Walter R. Mayer | | 2024 | | $ | 284,350 | | $ | 231,263 | | $ | 24,107 | | $ | 521,720 | |
Senior Vice President, General Counsel & Corporate Secretary | | 2023 | | $ | 275,000 | | $ | 179,688 | | $ | 23,607 | | $ | 478,295 | |
| (1) | Represents actual base salary paid in the year. |
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| (2) | For 2024, the amounts reported for “All Other Compensation” include amounts provided to the NEOs as outlined in the table below, with respect to (a) the matching contribution that we make on account of employee contributions under our 401(k) Savings Plan; and (b) premiums paid by the Company for executive long-term disability insurance. |
All Other Compensation | |||||||||
Named Executive Officer |
| (a) |
| (b) |
| ||||
Matthew B. Steele | | | — | | $ | 1,107 | | | |
Daniel P. Rohling | | $ | 23,000 | | $ | 1,107 | | | |
Walter R. Mayer | | $ | 23,000 | | $ | 1,107 | | | |
Pay versus Performance Table
The table below sets forth information regarding compensation for our principal executive officer and the financial performance of the Company for the years indicated:
|
| Pay |
| Performance | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | PEO (1) | | Average of other NEOs (2) | | | | | ||||||||||||||||||
Year |
| Summary |
| Summary |
| Compensation |
| Compensation |
| Summary |
| Average |
| Value of |
| Net Income | ||||||||||
2024 | | $ | | | — | | $ | | | — | | $ | | $ | | | $ | | $ | ( | ||||||
2023 | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | ( | |||||||||
2022 | | | — | | $ | | | — | | $ | | | $ | | $ | | | $ | | $ | ||||||
| (1) | For 2024 and Apr. – Dec. 2023, |
| (2) | The Non-PEO NEOs were, for the respective year: (a) Daniel P. Rohling and Walter R. Mayer for 2024 and 2022; and (b) Daniel P. Rohling, Walter R. Mayer and Leah R. Kasparek for 2023. |
Pay versus Performance Graphs.
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Narrative Disclosure to Summary Compensation Table
The principal elements of our executive compensation program are base salary, annual cash incentives (which are dependent upon our annual assessment of management performance), long-term equity incentives and post-termination severance (under certain circumstances), and other benefits and perquisites, consisting of life and health insurance benefits, a qualified 401(k) savings plan and limited tax gross ups. From time to time, we may vary the mix of compensation utilized, depending upon our current view of the most effective method to provide incentives under current market conditions, taking into account the compensation practices of our compensation peer group and the advice of our independent compensation consultant. All long-term incentives are awarded under the Plan. No grants of Plan-based awards were made to our NEOs during 2024.
Base Salary. We review base salaries for our executive officers annually to determine if a change is appropriate. In reviewing base salaries, we consider several factors, including a comparison to base salaries paid for comparable positions in our compensation peer group, the relationship among base salaries paid within our Company and individual experience and contributions. Our intent is to set base salaries at levels that we believe are consistent with our compensation program design objectives and align our executives with peers to allow the Company to retain executive talent in a competitive environment.
In 2024, the Board approved merit-based compensation adjustments for our NEOs, as follows:
Name |
| Adjusted Base Salary |
| |
Matthew B. Steele (1) | | $ | 367,500 | |
Daniel P. Rohling (1) | | $ | 367,500 | |
Walter R. Mayer (2) |
| $ | 284,350 |
|
(1)Pay rate effective August 16, 2024. (2)Pay rate effective January 1, 2024. | | |||
Annual Cash Incentives. We typically determine annual cash incentives following the end of the year on the basis of management performance during the year. Generally, at the beginning of the year, the Compensation Committee establishes certain operating and financial performance metrics, assigns them relative weightings and establishes annual targets for payout for each of them. Targeted payouts may range from 0% of base salary for not meeting the minimum annual targets, 100% of base salary for achieving more aggressive annual targets and 200% of base salary for achieving the most aggressive, or “stretch,” annual targets. Targets at the 100% payout level are intended to be achievable but challenging to reach. Individual performance may also factor into establishing annual cash incentives as our Compensation Committee recognizes that each member of senior management will contribute to the overall success in the achievement of our goals to varying degrees, and it may take these relative contributions into account when considering compensation generally, and annual cash incentives in particular.
Our Compensation Committee typically retains a significant level of discretion with respect to annual cash incentive awards regardless of the degree to which pre-established operating and financial performance metrics are met because of the limitations inherent in pre-established quantitative measures of performance when operating in a dynamic business environment. At the beginning of 2024, our Compensation Committee established operating and financial performance metrics covering the following areas:
| ● | health and safety, including total reportable incident rate targets; non-planned H2S alarms; serious incident near misses; OSHA recordable events; and average quality field observations per quarter; |
| ● | capital efficiency, as evidenced by oil production volume and capital expenditure targets; |
| ● | controlling costs, including lease operating expense per Boe, cash G&A and average well cost targets; |
| ● | financial targets for EBITDA, leverage ratio and oil deducts; |
| ● | consummation of transaction resulting in a change in control of the Company; and |
| ● | corporate targets, including increases in market capitalization, syndication of the revolving credit agreement and monetization of certain assets. |
The specific targets adopted were intended to be challenging but achievable. Incentive opportunities for the named executives were 100% of base salary for achieving minimum targets up to a maximum of 200% for achieving stretch targets, with performance falling between targets determined using linear interpolation. As noted
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earlier, as a general matter we do not believe that strictly formulaic or inflexible compensation programs are necessarily appropriate for our Company, particularly given the dynamic nature of our Company and business environment, nor do we believe that such programs will necessarily provide appropriate incentives or rewards for the performance that we expect; therefore, our Compensation Committee typically retains significant discretion in assessing the performance of the Company or an individual, may alter performance metrics and targets as circumstances warrant and, in doing so, take such factors into consideration as may be deemed appropriate from time to time. Accordingly, compensation, including annual cash compensation, may vary greatly from year to year and from executive to executive as a consequence of corporate performance and individual contribution relative to such factors that we may consider important, which may carry varying weight over time depending on the circumstances.
In March 2025, the Compensation Committee reviewed the performance of the Company and management for the year ended December 31, 2024, against the performance metrics established at the beginning of 2024. Based on performance and adjustments, the Compensation Committee recommended, and the Board approved, short-term incentive payments to our current named executive officers, as reflected under the column heading “Bonus” in the “Summary Compensation Table” appearing elsewhere herein.
Additionally, pursuant to the R&I Plan (defined below), the Compensation Committee recommended, and the Board approved, payment of cash bonuses (the “Retention Bonuses”) to participants who were employees at the time the Plan was implemented, including our NEOs, and who remain employed by the Company through December 31, 2026 (the “Retention Bonus Term”). Subject to certain restrictions, the Retention Bonuses consist of two payments, the first payment occurred in early March 2025, and the second will become payable at the end of the Retention Bonus Term. The Retention Bonuses are subject to the participant’s continued employment with the Company and would be owed back to the Company if the participant leaves the Company without good reason or if their employment is terminated for cause before the Retention Bonus Term. Participants, including our NEOs, will also receive a partial advance payment on their 2025 bonus equal to 50% of their target bonus (the “2025 Bonus Prepayment”), which will be payable after the second quarter of 2025. The 2025 Bonus Prepayment is subject to the participant’s continued employment with the Company and would be owed back to the Company if the participant leaves the Company without good reason or if their employment is terminated for cause before December 31, 2025.
Employment Contracts, Termination of Employment and Change-in-Control Arrangements. The Company has entered into employment agreements with each of Messrs. Rohling and Mayer, which automatically renew annually for successive one (1) year periods unless either party provides written notice of non-renewal at least thirty (30) days prior to the expiration of the then-effective term.
Retention and Incentive Plan. On March 4, 2025, the Company adopted a Retention and Incentive Plan (the “R&I Plan”) to provide for certain compensation for retention and incentives to eligible employees of the Company, including NEOs. Under the R&I Plan, the Company entered into a retention agreement with each of the named executive officers referenced below. Additionally, pursuant to the R&I Plan, each of the participants thereunder, including NEOs, agreed to and waived all rights to the Equity Grant Units, awarded under the previously disclosed Merger Incentive Plan, dated as of September 19, 2024, which would have vested upon a change in control event, resulting in such awards being rescinded and deemed null and void, and the associated Equity Grant Units were cancelled.
Pursuant to the employment agreements and retention agreements, if the Company terminates an executive’s employment without “Cause” or the executive terminates his employment with the Company for “Good Reason” prior to the end of the then-applicable employment term or retention term, such executive is entitled to the termination benefits set forth on the following table, both prior to and after the occurrence of a change of control of our Company.
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|
| Severance |
| Vesting of |
| 2025 Bonus & Retention |
| Change of Control |
|
|
| ||||||||
| | Payment (1) | | RSUs (2) | | Retention (3) | | Bonus (4) | | Other (5) | | Total | | ||||||
Without Cause/For Good Reason | | | | | | | | | | | | | | | | | | | |
Matthew B. Steele | | $ | 28,269 | | | — | | $ | 321,250 | | | — | | $ | 5,398 | | $ | 354,917 | |
Daniel P. Rohling | | $ | 500,000 | | | — | | $ | 328,750 | | | — | | — | | $ | 828,750 | | |
Walter R. Mayer | | $ | 284,350 | | | — | | $ | 181,631 | | | — | | $ | 23,692 | | $ | 489,673 | |
| | | | | | | | | | | | | | ||||||
Following Change of Control | | | | | | | | | | | | | | | | | | | |
Matthew B. Steele | | $ | 28,269 | | — | | $ | 321,250 | | $ | 1,270,000 | | $ | 5,398 | | $ | 1,624,917 | | |
Daniel P. Rohling | | $ | 500,000 | | $ | 45,690 | | $ | 328,750 | | $ | 1,000,000 | | — | | $ | 1,874,440 | | |
Walter R. Mayer | | $ | 284,350 | | $ | 15,231 | | $ | 181,631 | | $ | 450,000 | | $ | 23,692 | | $ | 954,904 | |
| (1) | Pursuant to the Company’s Severance Policy, Mr. Steele’s severance payment would be four (4) weeks of his current base salary. Mr. Rohling’s severance payment would be the exact dollar amounts listed. Mr. Mayer’s severance payment would be calculated as one-time his current base salary. |
| (2) | As reflected above, the value of unvested restricted stock units, that would vest under each of these termination scenarios is based on a common stock consideration price of $1.72 per share, the last trading day of our 2024 fiscal year. Amounts reflected under “Following a Change of Control” assumes in part, certain RSUs granted vesting in full upon achievement of certain business combination goals, as defined in the award agreements. |
| (3) | Includes advance payment of key employee retention agreements and a prorated bonus calculated at target (prorated through June 30, 2025, using target rates). |
| (4) | Discretionary bonus pool to be allocated by the Board based on a successful change of control. |
| (5) | Other severance benefits, include payments for COBRA premiums plus $2,000, representing the cost of outplacement services. |
Each executive’s right to receive termination payments is conditioned upon executing a general release of claims in the Company’s favor. The executive must also agree to refrain from disclosing the Company’s confidential information during or at any time following his employment with the Company and from soliciting the Company’s employees or consultants for one (1) year following termination of his employment. Mr. Rohling must also agree to refrain from such competing activities for six (6) months following termination of employment.
Retirement Benefits. We do not maintain a defined benefit pension plan or retiree medical program that covers members of senior management. Retirement benefits to our senior management, including the named executive officers, are currently provided solely through a tax-qualified profit sharing and 401(k) plan (our “Savings Plan”). We match 100% of the amount an employee contributes to the Savings Plan, subject to a 10% maximum based on the employee’s compensation as defined in the Savings Plan. Members of senior management participate in the Savings Plan on the same basis as other eligible employees.
The Savings Plan provides for various investment options, for which the participant has sole discretion in determining how both the employer and employee contributions are invested. The independent trustee of the Savings Plan then invests the assets of the Savings Plan as directed by participants. The Savings Plan does not provide our employees the option to invest directly in our securities. The Savings Plan offers in-service withdrawals in the form of after-tax account distributions and age 59.5 distributions. We believe that the Savings Plan supports the objectives of our compensation structure, including the ability to recruit and retain senior and experienced mid- to late-career executive talent for critical positions within our organization.
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Outstanding Equity Awards at Fiscal Year End
The following table summarizes the number of securities underlying outstanding plan awards for each named executive officer as of December 31, 2024.
| Option Awards |
| Stock Awards |
| ||||||||||||||||
Name |
| Number of |
| Number of |
| Option |
| Option |
| Number of |
| Market |
| Equity Incentive | | |||||
Matthew B. Steele | | — | | — | | | — | | — | | — | | | — | | — | | |||
Daniel P. Rohling | | 26,564 | | — | | $ | 18.91 | | 2/20/2027 | | 26,564 | | $ | 45,690 | | — | | |||
| | 26,564 | | — | | $ | 28.23 | | 2/20/2027 | | — | | | — | | — | | |||
| | 26,564 | | — | | $ | 37.83 | | 2/20/2027 | | — | | | — | | — | | |||
Walter R. Mayer | | 8,855 | | — | | $ | 18.91 | | 2/20/2027 | | 8,855 | | $ | 15,231 | | — | | |||
| | 8,855 | | — | | $ | 28.23 | | 2/20/2027 | | — | | | — | | — | | |||
| | 8,855 | | — | | $ | 37.83 | | 2/20/2027 | | — | | | — | | — | | |||
| (1) | Calculated based upon the closing market price of our common stock as of December 31, 2024, the last trading day of our 2024 fiscal year ($1.72) multiplied by the number of unvested awards at year-end. As of December 31, 2024, a business combination, as defined in the award agreements, had not been consummated. Base RSU shares were settled and paid in cash at the value of the share price on the scheduled vesting date in March 2025. |
| (2) | Represents unvested performance units at the maximum number of shares that may be earned. The Performance units, scheduled to vest on February 20, 2024, provided that our total shareholder return relative to the total shareholder return of certain of our peer companies is achieved as defined in the award agreements over the Performance Period (the “Performance Metrics”). The Performance Metrics were not achieved by February 20, 2024; accordingly, the performance units did not vest. The Company has terminated these awards and underlying units. |
Director Compensation
2024 Director Compensation
The table below sets forth certain information concerning the compensation earned in 2024 by our non-employee directors for service on our Board and committees of the Board.
Name |
| Fees Earned or |
| Stock |
| Option |
| All Other |
| Total |
| |||||
Jonathan D. Barrett | | $ | 225,000 | | | — | | | — | | | — | | $ | 225,000 | |
David Chang | | $ | 175,000 | | | — | | | — | | | — | | $ | 175,000 | |
Gregory S. Hinds | | $ | 175,000 | | | — | | | — | | | — | | $ | 175,000 | |
Ajay Jegadeesan | | $ | 150,000 | | | — | | | — | | | — | | $ | 150,000 | |
William D. Rogers | | $ | 200,000 | | | — | | | — | | | — | | $ | 200,000 | |
Discussion of Director Compensation Table
Annual compensation for each committee chairperson and committee member for all of the committees of our Board for 2024 is set forth below:
Non-Employee Directors |
| Amount |
| |
Annual Retainer: | | | | |
Non-Executive Chairman of the Board | | $ | 225,000 | |
Non-Employee Director | | $ | 150,000 | |
Additional Annual Retainers— Committee Chair: | | | | |
Audit Committee Chair | | $ | 25,000 | |
Compensation Committee Chair | | $ | 25,000 | |
Nominating & Corporate Governance Committee Chair | | $ | 25,000 | |
Reserves Committee Chair | | $ | 25,000 | |
Fees are paid in four equal quarterly installments.
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Employee directors receive no additional compensation for service on our Board or any committee of the Board. All directors receive actual expense reimbursements associated with attending Board and committee meetings. We revisit non-employee director compensation as circumstances warrant and may adjust compensation in response to competitive market conditions and other factors. Historically, we have targeted non-employee director compensation at the 50th percentile of our compensation peer group.
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Accountants and Audit Committee
Audit Committee Report
Dear Stockholder:
The Audit Committee has reviewed and discussed with management of Battalion and Deloitte & Touche LLP (“Deloitte”), the firm serving as the independent registered public accountant of Battalion, the audited financial statements of Battalion as of, and for the fiscal year ended December 31, 2024 (the “Audited Financial Statements”). In addition, we have discussed with Deloitte the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC.
The Audit Committee also has received the written disclosures and the letter from Deloitte, required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee, concerning independence, and the Audit Committee has discussed with that firm its independence from Battalion. Upon such review, the Audit Committee has concluded that the independent registered public accountant is independent from Battalion and its management. We have also discussed with management of Battalion and Deloitte such other matters and received such assurances from them as we deemed appropriate.
Management is responsible for Battalion’s internal controls and the financial reporting process. Deloitte is responsible for performing an independent audit of Battalion’s financial statements in accordance with generally accepted auditing standards and issuing a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes.
Based on the foregoing monitoring and oversight process, discussions with management and a review of the report of Deloitte with respect to the Audited Financial Statements, and relying thereon, the Committee has recommended to the Board the inclusion of the Audited Financial Statements in Battalion’s Annual Report on Form 10-K for the year ended December 31, 2024 for filing with the SEC.
The Audit Committee has considered the requirements of the Sarbanes-Oxley Act of 2002 with respect to the responsibilities of audit committees of public companies. The Audit Committee and the Board of Battalion are committed to compliance with all provisions of that statute and related regulations. Actions will be taken by the Audit Committee and the Board as statutory and regulatory provisions become effective for Battalion and for audit committees and independent registered public accountants generally.
| MEMBERS OF THE COMMITTEE: |
| |
| William D. Rogers (Chairman) Gregory S. Hinds |
(The foregoing Audit Committee Report does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing of Battalion under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that Battalion specifically incorporates the Report by reference therein.)
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Independent Registered Public Accounting Firm
PCAOB ID No: | 34 | Auditor Name: | Deloitte & Touche LLP | Auditor Location: | Houston, Texas |
Deloitte is the independent registered public accounting firm selected by our Audit Committee as the independent registered public accountant for the fiscal years ended December 31, 2024 and 2023. During the years ended December 31, 2024 and 2023, neither the Company nor anyone acting on its behalf consulted Deloitte with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, or any other matters or reportable events as defined in Items 304(a)(1)(iv) and (v) of Regulation S-K.
Attendance at the Annual Meeting by Deloitte Representative
A representative of Deloitte will be invited to the annual meeting of the stockholders. If in attendance, Deloitte will have the opportunity to make a statement if it desires to do so, and the Deloitte representative is expected to be available to respond to appropriate questions.
Fees
The following table presents fees billed for professional audit services rendered by Deloitte, our principal accounting firm for the years ended December 31, 2024 and 2023. The table also presents fees for other services rendered by Deloitte during those periods; we paid all such fees.
|
| 2024 |
| 2023 |
| ||
Audit Fees | | $ | 1,520,000 | | $ | 1,660,000 | |
Audit-Related Fees | | | 305,000 | | | — | |
Tax Fees | | $ | 113,000 | | $ | 271,592 | |
All Other Fees | | | — | | | — | |
Total | | $ | 1,938,000 | | $ | 1,931,592 | |
As used above, the following terms have the meanings set forth below:
Audit Fees. The fees for professional services rendered by Deloitte for the audit of our annual financial statements, for the review of the financial statements included in our quarterly reports on Form 10-Q and for services that are normally provided by the accountants in connection with statutory and regulatory filings or engagements and private placements, including but not limited to registration statements, for the years ended December 31, 2024 and 2023.
Tax Fees. The fees for professional services rendered by Deloitte for tax compliance, tax advice, and tax planning.
Audit Committee Pre-Approval Policy
All audit fees, audit-related fees and tax fees as described above for the years ended December 31, 2024 and 2023 were pre-approved by our Audit Committee, which concluded that the provision of such services by Deloitte was compatible with the maintenance of their respective independence in the conduct of their auditing functions. Our Audit Committee’s pre-approval policy provides that pre-approval of all such services must be approved separately by the Audit Committee. The Audit Committee has not delegated any such pre-approval authority to anyone outside the Audit Committee. The chairman of the Audit Committee has been delegated the authority to pre‑approve services to be performed by our independent registered public accountant in the annual amounts of (i) $1,850,000 for audit-related services, without restriction; and (ii) $160,000 for other permissible non-audit services, including services associated with the Company's SEC filings.
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Proposal 2
—Advisory Vote to Approve Executive Compensation
In accordance with Section 14A of the Exchange Act, we provide our stockholders with the opportunity to vote to approve, on a non-binding advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s compensation disclosure rules.
As more particularly described in detail under the heading “Executive Compensation” of this proxy statement, we operate in a highly competitive environment and as such, our executive compensation program is designed to attract, motivate and retain high quality individuals, utilizing a mix of fixed and at risk compensation that is related to our overall performance and the creation of stockholder value. We believe that our program continues to be appropriately designed to achieve our goals and aligns the interests of senior management and other key employees with those of our stockholders by combining competitive compensation with the opportunity for greater rewards for superior performance and the creation of stockholder value.
The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s compensation disclosure rules. The vote is advisory, which means that it is not binding on the Company, our Board or our Compensation Committee. To the extent there is any significant vote against our named executive officer compensation as disclosed in this proxy statement, our Compensation Committee will evaluate whether any action is necessary to address the concerns of stockholders.
Accordingly, we ask our stockholders to vote on the following resolution at our annual meeting:
“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s proxy statement for the 2025 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Executive Compensation section, the Director Compensation section, the Summary Compensation Table and the other related tables and disclosures.”
| The Board unanimously proposes and recommends that you vote “FOR” the approval of the compensation of our named executive officers as disclosed in this proxy statement. |
Proposal 3
—Advisory Vote on Frequency of Stockholder Vote on Executive Compensation
Section 14A of the Exchange Act provides that stockholders must be given the opportunity to vote, on a non-binding, advisory basis, for their preference as to how frequently we should seek future advisory votes on the compensation of our named executive officers as disclosed in accordance with the SEC’s compensation disclosure rules, which we refer to as an advisory vote on executive compensation. By voting on this Proposal No. 3, stockholders may indicate whether they would prefer that we conduct future advisory votes on executive compensation once every one, two, or three years. Stockholders also may, if they wish, abstain from casting a vote on this proposal.
Our Board has determined that a triennial advisory vote on executive compensation will allow our stockholders to provide direct input on our executive compensation philosophy, policies and practices at an interval between votes that allows a meaningful comparison between compensation and performance. Because our compensation program and philosophy is straightforward and does not materially change from year to year, the Board believes that triennial voting is a more appropriate pace for evaluating how well our Compensation Committee is aligning executive compensation with long term performance and is consistent with our efforts to best evaluate the effectiveness of our compensation program, particularly relating to the long term incentive components of compensation which comprise a substantial component of executive compensation.
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The vote is advisory and as such, is not binding on the Company, our Board or our Compensation Committee. Our Board and our Compensation Committee will take into account the outcome of the vote, however, when considering the frequency of future advisory votes on executive compensation the Board may decide that it is in the best interests of our stockholders and the Company to hold an advisory vote on executive compensation more or less frequently than the frequency receiving the most votes cast by our stockholders.
Most recently, at our 2024 annual meeting of stockholders, our stockholders approved an annual advisory vote on the compensation of our named executive officers by casting 11,375,124, or approximately 79% of all votes cast by the holders of our common stock present in person or by proxy. Following this vote, our Board adopted an annual voting policy, expressing its intention to schedule the next advisory vote on executive compensation for the 2025 Annual Meeting of Stockholders. See “Proposal 2—Advisory Vote to Approve Executive Compensation” above.
The proxy card provides stockholders with the opportunity to choose among four options (holding the vote every one, two or three years, or abstaining) and, therefore, stockholders will not be voting to approve or disapprove the recommendation of the Board.
The advisory vote regarding frequency of a stockholder advisory vote on executive compensation will be determined by whichever of the choices — “1 YEAR,” “2 YEARS,” or “3 YEARS”— receives the greatest number of votes cast. If triennial advisory votes are approved by the stockholders again, we expect that our next advisory vote on executive compensation will occur at our 2027 annual meeting of stockholders. Shares represented by proxies that are marked to indicate abstentions from this proposal and broker non votes with respect to this proposal will not affect its outcome. If no voting specification is made on a properly returned or voted proxy card, the proxies named on the proxy card will vote FOR a frequency of once every “3 YEARS” for future advisory votes on executive compensation.
| The Board unanimously proposes and recommends that you vote for the option of once every “3 YEARS” as the preferred frequency for future advisory votes on executive compensation. |
Proposal 4
—Approval of A&R Charter
Stockholders are being asked to approve the A&R Charter, which will amend and restate our Charter to:
| (a) | adopt a provision to provide for the exculpation of officers as permitted by recent amendments to Delaware law (the “Officer Exculpation Amendment”); |
| (b) | adopt a provision to waive the corporate opportunity doctrine with respect to the Company’s stockholders, directors and their affiliates (the “Corporate Opportunity Amendment”); |
| (c) | adopt a provision revising the votes required to amend, revise, or otherwise modify the terms of preferred stock, including when set forth in a certificate of designations (the “Preferred Stock Voting Amendment”); and |
| (d) | further update the Charter’s text by removing or modifying expired provisions, integrating previously approved amendments and making minor clarifications and other updates, including to approve the amended terms of our Series A-1 Redeemable Convertible Preferred Stock that had been previously approved by holders of our preferred stock but not by our common stockholders (the “Charter Updates”). |
After a review of our Charter and for the reasons discussed in Proposals 4(a)–(d) below, our Board has determined that it is advisable to approve the A&R Charter and the Charter amendments, and has recommended that stockholders approve, each of Proposals 4(a),4(b), 4(c) and 4(d).
The proposed amendments are being presented pursuant to the guidance of the SEC as four separate sub-proposals. Stockholders will have the opportunity to vote separately on each of Proposals 4(a), 4(b) 4(c) and 4(d). None of Proposals 4(a)–(d) are conditioned on the adoption of each other, and if fewer than all the proposed
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amendments, but including Proposal 4(d), are approved by our stockholders at the Annual Meeting we will file a revised A&R Charter, that includes only those approved amendments, except that we will not file the A&R Charter if Proposal 4(d) is not approved by the stockholders.
The form of the A&R Charter that the Board intends to file with the Secretary of State of the State of Delaware, if each of Proposals 4(a),4(b), 4(c) and 4(d) are approved, is attached to this proxy statement as Appendix A. The following summary of the proposed amendments to be included in the A&R Charter is qualified in its entirety by reference to the text of Appendix A. Proposed additions are double-underlined, in blue font, and proposed deletions are stricken through, in red font.
| The Board unanimously proposes and recommends that you vote “FOR” the approval of the A&R Charter, including each of the amendments to the Charter described in Proposals 4(a), 4(b), 4(c) and 4(d). |
Proposal 4 (a)
—Officer Exculpation Amendment
Background. Section 102(b)(7) of the Delaware General Corporation Law (the “DGCL”) was amended effective August 1, 2022, to authorize exculpation of officers of Delaware corporations (the “Section 102(b)(7) Amendment”). Specifically, the Section 102(b)(7) Amendment extends the opportunity for Delaware corporations to exculpate their officers, in addition to their directors, for personal liability for breach of the duty of care in certain actions (the “officer exculpation”). Prior to the Section 102(b)(7) Amendment, Delaware law had permitted Delaware corporations to exculpate directors from personal liability for monetary damages associated with breaches of the duty of care, but that protection did not extend to a Delaware corporation’s officers. Consequently, stockholder plaintiffs employed a tactic of bringing certain claims that would otherwise be exculpated if brought against directors, against individual officers, to avoid dismissal of such claims. The Section 102(b)(7) Amendment was adopted to address inconsistent treatment between officers and directors and to address rising litigation and insurance costs for companies and their stockholders.
Purpose of the Amendment.Adoption of the Executive Officer Exculpation in the Company’s Charter would maintain provisions consistent with the governing statutes contained in the DCGL and would provide protection to officers to the fullest extent permitted by law in order to attract and retain top talent, and to reduce the risk and cost to the Company of frivolous claims involving the Company’s officers, including claims brought only to increase the settlement value of a lawsuit, against which our existing Charter currently protects our directors but not our officers. As is currently the case with directors under the Company’s Charter, this provision would not exculpate officers from liability for breach of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. Nor would this provision exculpate such officers from liability for claims brought by or in the right of the corporation, such as derivative claims.
Timing and Effect of the Amendment.The Officer Exculpation Amendment, among other things, would amend the exculpation and liability provision in Article Seventh, Section A, of our Charter to include officers, in the form shown on the A&R Charter, attached as Appendix A to this proxy statement. After the effectiveness of the Officer Exculpation Amendment, the revised exculpation and liability provision would apply only with respect to acts or omissions by our officers occurring after the adoption date of the Officer Exculpation Amendment.
If Proposal 4(a) is approved by stockholders, following the Annual Meeting, the Company intends to file the A&R Charter with the Secretary of State of the State of Delaware to effect the amendments to the Charter described in this Proposal 4(a). If Proposal 4(a) is not approved, then any amended and restated certificate of incorporation we may file with the Delaware Secretary of State will not contain the amendments contemplated by the Officer Exculpation Amendment. Notwithstanding stockholder approval of Proposal 4(a), the Board has the authority to abandon any of the amendments to our Charter contained in the Officer Exculpation Amendment.
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Votes Required and Board Recommendation.The affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock entitled to vote at the 2025 Annual Meeting is required to adopt the amendments contemplated by this Proposal 4(a). Abstentions and broker non-votes will have the same effect as votes against this proposal.
| The Board recommends that you vote “FOR” the approval of the Officer Exculpation Amendment. |
Proposal 4 (b)
—Corporate Opportunity Amendment
Background. The proposed amendment is intended to regulate and define the conduct of certain affairs of the Company with respect to certain classes or categories of business opportunities as they may involve the Company’s stockholders, non-employee directors or their respective affiliates and the powers, rights, duties and liabilities of the Company and its directors, officers and stockholders in connection therewith. Mr. Barrett is the President of Luminus, and Mr. Jegadeesan is a Senior Advisor with Oaktree, which entities (either directly, indirectly or through affiliated entities) respectively beneficially own approximately 61.8% and 44.7% of the Company’s common stock. In addition, Mr. Chang is Senior Vice President of LS Power Development, LLC, an affiliate of Gen IV, which beneficially owns approximately 31.3% of the Company’s common stock. For additional information, see the sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Certain Relationships and Related Party Transactions” of this proxy statement. These directors and other affiliated individuals and entities of these Significant Stockholders, as well as our independent directors and affiliated entities of these individuals, may from time to time be presented with certain corporate opportunities of potential interest to both the Company, these stockholders and other entities of which such entities, persons or related or affiliated persons or entities serve as principals, members, managers, directors, partners, shareholders, officers, employees or other representatives. This proposed amendment in part would renounce our right to certain corporate opportunities in order to more clearly delineate the responsibilities of our stockholders and non-employee directors (and their respective affiliates) with respect to corporate opportunities of which they may become aware.
Purpose of the Amendment.The proposed amendment would exempt the Company’s stockholders, non-employee directors, or their respective affiliates (collectively, the “Identified Persons”), from the doctrine of corporate opportunity, or any other analogous doctrine. Directors and officers of a corporation, as part of their duty of loyalty to the corporation and its stockholders, generally have a fiduciary duty, which may be waived by the corporation, to disclose to the corporation opportunities that are related to its business and are thereby prohibited from pursuing those opportunities unless such corporation determines that it is not going to pursue them. As a result, directors and officers that serve in a fiduciary capacity of multiple entities could become conflicted as to which entity should be presented with any given corporate opportunity. Section 122(17) of the DGCL expressly permits a Delaware corporation, such as the Company, to include in its certificate of incorporation an advance waiver of corporate opportunities, by renouncing any interest or expectancy of the corporation in, or in being offered an opportunity to participate in, specified business opportunities or specified classes or categories of business opportunities that are presented to the corporation or one or more of its officers, directors or stockholders. The proposed amendment limits or eliminates such duty to the fullest extent permitted under the DGCL.
The proposed amendment would acknowledge that none of the Identified Persons have any duty to refrain from directly or indirectly (x) engaging in a business opportunity in the same or similar business activities or lines of business in which the Company or any of its affiliates now engages, engages in the future or proposes to engage, (y) making investments in any kind of property or other interests in which the Company makes or may make investments, or (z) otherwise competing with the Company or any of its affiliates. In addition, we would renounce any interest and expectancy in any business opportunity that an Identified Person acquires knowledge of that may be a corporate opportunity of ours or our affiliates (other than a corporate opportunity that is expressly offered to an Identified Person solely in his or her capacity as a director or officer of the Company), and the proposed amendment provides that if an Identified Person acquires knowledge of a matter which may be an opportunity in which the Company may have an interest (other than an opportunity that is expressly offered to an Identified Person
29
solely in his or her capacity as a director or officer of the Company), the Identified Person will have no duty to communicate such opportunity to the Company and the Identified Person will not have any liability to the Company or its stockholders for breach of such Identified Person’s fiduciary duties because such Identified Person pursues or acquires such opportunity or offers such opportunity to another person or entity.
Timing and Effect of the Amendment.The Corporate Opportunity Amendment, among other things, would add exemption provisions in a new Article Tenth to our Charter, in the form shown on the A&R Charter, attached as Appendix A to this proxy statement. After the effectiveness of the Corporate Opportunity Amendment, the exemption provision would apply only with respect to certain events occurring after the adoption of the Corporate Opportunity Amendment.
If Proposal 4(b) is approved by stockholders, following the Annual Meeting, the Company intends to file the A&R Charter with the Secretary of State of the State of Delaware to effect the amendments to the Charter described in this Proposal 4(b). If Proposal 4(b) is not approved, then any amended and restated certificate of incorporation we may file with the Delaware Secretary of State will not contain the amendments contemplated by the Corporate Opportunity Amendment. Notwithstanding stockholder approval of Proposal 4(b), the Board has the authority to abandon any of the amendments to our Charter contained in the Corporate Opportunity Amendment.
Votes Required and Board Recommendation.The affirmative vote of the (i) holders of a majority of the outstanding shares of the Company’s common stock entitled to vote at the 2025 Annual Meeting; and (ii) a majority of the votes cast by our disinterested stockholders (within the meaning of Section 144 of the DGCL) is required to adopt the amendments contemplated by this Proposal 4(b). Abstentions and broker non-votes will have the same effect as votes against this proposal.
| The Board recommends that you vote “FOR” the approval of the Corporate Opportunity Amendment. |
Proposal 4 (c)
—Preferred Stock Voting Amendment
Background. Pursuant to the Company’s Charter and Sections 102(a)(4) and 151 of the DGCL, the Board is authorized, by adopting resolutions, to create and issue a new series of preferred stock, which resolutions, including the terms of such preferred stock, would then be set forth in a certificate of designations filed with the Delaware Secretary of State in order to create such new series of preferred stock. Under Section 151(g) of the DGCL, once a certificate of designations has been filed and become effective, it has the effect of amending a corporation’s certificate of incorporation. Under Section 242 of the DGCL, the approval of the majority of outstanding stock entitled to vote is required to adopt an amendment to a corporation’s certificate of incorporation, including to a certificate of designations authorized solely by the Board in the manner described above, and such vote may include both preferred and common stockholders in addition to any required vote of any class or series of stock under the DGCL or a corporation’s organizational documents. In 2023 and 2024 the Company adopted certain certificates of designations and issued shares of preferred stock governed thereby (see section entitled “Certain Relationships and Related Party Transactions” of this proxy statement for more information), each of which entitles the holders of the affected series of preferred stock to vote on any amendment to the certificate of designations for such series of preferred stock if it materially adversely affects the special rights, preferences, privileges or voting powers of such series (the “Preferred Only Consent Right”).
Purpose of the Amendment.The Preferred Stock Voting Amendment would expand and clarify the original intent of the Preferred Only Consent Right provision by including a correlative provision in the Company’s Charter. The adoption of the proposed amendment would allow the Company to retain the flexibility to seek to change the terms of preferred stock in situations where the holders of the affected series of preferred stock are entitled to vote without having to obtain the consent of the common stockholders, which consent may be burdensome and costly since seeking such consent would need to be effected pursuant to the rules and regulations of the SEC and the DGCL. Although the consent of our preferred stockholders would still be required for such
30
amendments, the solicitation of such consents would not be subject to the SEC’s proxy rules and would be much less burdensome to obtain given the limited number of existing holders of our outstanding shares of preferred stock.
Timing and Effect of the Amendment.The Preferred Stock Voting Amendment would add a provision under Section 4.B of Article Fourth to our Charter, in the form shown on the A&R Charter, attached as Appendix A to this proxy statement. After the effectiveness of the Preferred Stock Voting Amendment, only the vote of the holders of any series of affected preferred stock would be required to amend the terms of such preferred stock and where applicable adopt a certificate of amendment to the respective certificate of designations, if the holders of the affected series of preferred stock are entitled to vote on such amendment. The Preferred Stock Voting Amendment would eliminate the existing right of the common stockholders to vote on amendments to the Company’s Charter (including any certificates of designations) to the extent relating to the terms of the Company’s preferred stock, except in instances where the holders of the effected series of preferred stock are not entitled to vote on such amendments, and allow modifications to the terms of the Company’s preferred stock that would otherwise require the consent of our common stockholders, which terms may be detrimental to our other stockholders or otherwise modify or change their rights in their capacity as stockholders adversely.
If Proposal 4(c) is approved by stockholders, following the Annual Meeting, the Company intends to file the A&R Charter with the Secretary of State of the State of Delaware to effect the amendments to the Charter described in this Proposal 4(c). If Proposal 4(c) is not approved, then any amended and restated certificate of incorporation we may file with the Delaware Secretary of State will not contain the amendments contemplated by the Preferred Stock Voting Amendment. Notwithstanding stockholder approval of Proposal 4(c), the Board has the authority to abandon any of the amendments to our Charter contained in the Preferred Stock Voting Amendment.
Votes Required and Board Recommendation.The affirmative vote of the holders of (i) a majority of the outstanding shares of the Company’s common stock entitled to vote at the 2025 Annual Meeting; and (ii) a majority of the votes cast by our disinterested stockholders (within the meaning of Section 144 of the DGCL), is required to adopt the amendments contemplated by this Proposal 4(c). Abstentions and broker non-votes will have the same effect as votes against this proposal with respect to the vote referred to in clause (i) and no effect with respect to the vote referred to in clause (ii).
| The Board recommends that you vote “FOR” the approval of the Preferred Stock Voting Amendment. |
Proposal 4 (d)
—Charter Updates
Background. The Company’s existing Charter, dated effective as of October 9, 2019, was adopted under a Joint Prepackaged Chapter 11 Plan of Reorganization of the Company and its Affiliated Debtors, as modified by the Confirmation Order and on January 21, 2020 the Company adopted a Charter amendment to change the name of the Company (the “Name Change Amendment”). Pursuant to the terms of the Plan of Reorganization, the Company’s Charter contained certain sunset provisions, including Board classification and restrictions on the removal of certain directors.
Purpose of the Amendment.The proposed amendment seeks to update the text of the Charter by (i) integrating the Name Change Amendment; (ii) removing the sunset provisions, which terms have now expired; and (iii) incorporating various other updates and technical, clarifying and conforming changes.
The proposed revisions to the sunset provisions include (i) removal of the named directors, (ii) removal of language providing for a classified board; (iii) revisions to the requirements for to the removal of directors by stockholders before the 2021 Annual Meeting; (iv) removal of the initial terms of the named directors; (v) other revisions referencing the 2021 Annual Meeting, in respect of the terms of vacancy appointed directors; (vi) removal of duplicative vacancy provisions and modifications to clarify the right of preferred holders to establish separate rights with respect to such vacancies to the extent entitled to elect separate directors; and (vii) inclusion of the
31
previously filed preferred stock designations as annexes, including the certificate of amendment to the Certificate of Designations for the Series A-1 Preferred Stock (the “Series A-1 CoD”), which was filed on December 15, 2023 (such amendment, the “Series A-1 CoD Amendment”).
The Series A-1 CoD Amendment, which has been approved by the requisite holder(s) of Company Series A-1 Preferred Stock, amends, among other things, certain provisions of the Series A-1 CoD, as follows: (a) the period during which holders of Series A-1 Preferred Stock may convert their shares of Series A-1 Preferred Stock into common stock shall not commence until the date that is 240 days following the Issuance Date (as defined in the Series A-1 CoD); (b) the period during which the Company may redeem shares of Series A-1 Preferred Stock at a price per share equal to 102% of the then-current Liquidation Preference (as defined in the Series A-1 CoD) has been changed such that the period shall begin on the date that is 120 days after the Issuance Date and end on the date that is 239 days after such Issuance Date; (c) the period during which the Company may redeem shares of Series A-1 Preferred Stock at a price per share equal to 105% of the then-current Liquidation Preference (as defined in the Series A-1 CoD) has been changed such that the period shall begin on the date that is 240 days after the Issuance Date and end on the first anniversary of the Issuance Date; (d) (i) with respect to the option of the holders of Series A-1 Preferred Stock to convert their Series A-1 Preferred Stock into a right to receive a cash payment per share of Series A-1 Preferred Stock in connection with a Change of Control (as defined in the Series A-1 CoD), the cash price has been changed from an amount equal to the then-applicable Liquidation Preference to an amount equal to the then-applicable Redemption Price (as defined in the Series A-1 CoD) per share of such Series A-1 Preferred Stock, and (ii) the period during which holders of Series A-1 Preferred Stock may exercise such conversion option in connection with a Change of Control has been changed from any time on or prior to the 150th day to the 240th day following the Issuance Date; (e) the period during which the Company must offer each holder of Series A-1 Preferred Stock a cash payment per share of Series A-1 Preferred Stock equal to the then-applicable Redemption Price in connection with a Change of Control has been changed from the period following the occurrence of both the 150th day following the Issuance Date and the end of the Term Loan Restricted Period (as described in the Series A-1 CoD) to the period following the occurrence of both the 240th day following the Issuance Date and the end of the Term Loan Restricted Period, and (f) the period during which the Company shall have the option to offer each holder of Series A-1 Preferred Stock a cash payment per share of Series A-1 Preferred Stock equal to the then-applicable Redemption Price in connection with a Change of Control has been changed from the period beginning on the 150th day following the Issuance Date and ending at the end of the Term Loan Restricted Period to the period beginning on the 240th day following the Issuance Date and ending at the end of the Term Loan Restricted Period.
Timing and Effect of the Amendment.The Charter Updates, among other things, would restate and integrate and further amend, among other things, the Charter language containing sunset provisions and update the Company name, in the form shown on the A&R Charter, attached as Appendix A to this proxy statement.
If Proposal 4(d) is approved by stockholders, following the Annual Meeting, the Company intends to file the A&R Charter with the Secretary of State of the State of Delaware to effect the amendments to the Charter described in this Proposal 4(d). If Proposal 4(d) is not approved, then any amended and restated certificate of incorporation we may file with the Delaware Secretary of State will not contain the amendments contemplated by the Charter Updates, although we do not intend to file an amended and restated certificate of incorporation if Proposal 4(d) is not approved by our stockholders. Notwithstanding stockholder approval of Proposal 4(d), the Board has the authority to abandon any of the amendments to our Charter contained in the Charter Updates.
Votes Required and Board Recommendation.The affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock entitled to vote at the 2025 Annual Meeting is required to adopt the amendments contemplated by this Proposal 4(d). Abstentions and broker non-votes will have the same effect as votes against this proposal. Additionally, the holders of the Company’s preferred stock have indicated their approval of the Amended Charter, and the Company expects to receive their consent concurrently with the vote held at the 2025 Annual Meeting.
| The Board recommends that you vote “FOR” the approval of Charter Updates |
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Submission of Stockholder Proposals
for our Next Annual Meeting of Stockholders
Stockholder proposals intended to be presented under Rule 14a-8 under the Exchange Act for inclusion in our proxy statement and accompanying proxy for our next annual meeting of stockholders, including nomination of an individual for election as a director at the next annual meeting of stockholders, must be received at our principal executive offices in Houston, Texas, not less than 120 calendar days before the one year anniversary of the date of this proxy statement, and must meet all the requirements of Rule 14a-8. However, if the date of the next annual meeting of stockholders changes by more than 30 days before or 60 days from the one year anniversary of this annual meeting’s date, then the deadline is a reasonable time before the Company begins to print and send its proxy materials. If a stockholder intends to present a proposal at our next annual meeting but has not sought the inclusion of such proposal in our proxy materials, the written notice of such proposal must be delivered to our Corporate Secretary not less than sixty (60) nor more than ninety (90) days prior to the one year anniversary of the Annual Meeting date, in connection with this proxy statement. If we mail or otherwise provide notice, or public disclosure, of the date of our annual meeting on a date that is less than seventy (70) days prior to the date of the annual meeting, the stockholder’s notice that he or she proposes to bring business before the annual meeting must be received by us no later than the tenth business day following the day on which our notice of the annual meeting was mailed, or public disclosure was made, whichever event first occurs.
Proposals and other notices should be sent to (the use of certified mail, return receipt requested, is suggested): Battalion Oil Corporation, Attn: Corporate Secretary, 820 Gessner Road, Suite 1100, Houston, Texas 77024.
Other Matters
The Board knows of no other proposals that may properly be presented for consideration at the annual meeting but, if other matters do properly come before the annual meeting, and provided you vote your shares using the instructions on the notice of Internet availability of proxy materials, or, if you received a paper copy of the proxy card, by completing, signing, dating and returning the proxy card, thereby consenting to be represented at the annual meeting by proxy, the persons named in the proxy will vote your shares according to their best judgment.
| |
By Order of the Board of Directors | |
33
Appendix A
Form of A&R Charter
Second AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
Battalion Oil Corporation
Battalion Oil Corporation, a Delaware corporation (the “Corporation”), organized and existing under the provisions of the Delaware General Corporation Law (the “DGCL”), hereby certifies as follows:
FIRST: The name of the corporation is Halcón Resources Corporation Battalion Oil Corporation (the “Corporation”).
SECOND: The Corporation’s registered office in the State of Delaware is located at 1675 S. State Street, Suite B, Dover, Kent County, Delaware 19901. The name of its registered agent at such address is Capitol Services, Inc.
THIRD: The purpose of the Corporation shall be to engage in any lawful act or activity for which corporations may be organized under the DGCL.
FOURTH: The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 101,000,000, of which 100,000,000 shares shall be common stock, par value $0.0001 per share (“Common Stock”), and 1,000,000 shares shall be preferred stock, par value $0.0001 per share (“Preferred Stock”).
Form of A&R Charter | 1
Annex I–Series A Redeemable Convertible Preferred Stock
Annex II–Series A-1 Redeemable Convertible Preferred Stock
Annex III–Series A-2 Redeemable Convertible Preferred Stock
Annex IV–Series A-3 Redeemable Convertible Preferred Stock
Annex V–Series A-4 Redeemable Convertible Preferred Stock
FIFTH: The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to the authority and powers conferred upon the Board of Directors by the DGCL or other provisions of this Certificate of Incorporation, the Board of Directors is hereby authorized and empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject to the provisions of the DGCL, this Certificate of Incorporation and the bylaws of the Corporation; provided, however, that no bylaws hereafter adopted by the stockholders of the Corporation, or
Form of A&R Charter | 2
any amendments thereto, shall invalidate any prior act of the Board of Directors that would have been valid if such bylaws or amendment had not been adopted.
B.Vacancies. Except as the DGCL may otherwise require, in the interim between annual meetings of the stockholders, any vacancies in the Board of Directors, including vacancies resulting from the removal of directors for cause, or resulting from death, resignation, retirement, disqualification, or other cause may be filled by the vote of the remaining directors then in office, although less than a quorum, and each director so chosen shall hold office for the unexpired portion of the full term of the director whose vacancy has been filled, or as otherwise provided by the Board of Directors.
SIXTH: The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:
B.Until the second annual meeting of stockholders following the effectiveness of this ARTICLE SIXTH (the “2021 Annual Meeting”), the Board of Directors shall be divided into two classes, designated as Group I and Group II. As of the effectiveness of this ARTICLE SIXTH, the Board of Directors shall be as follows:
GROUP I: Richard Little, 1000 Louisiana Street, Suite 6600, Houston, TX 77002; Gregory Hinds, 5113 Pronghorn Avenue, Elizabeth, CO 80107; Scott Germann, 1004 N. Big Spring, Suite 325, Midland, TX 79701; and William Transier, 12128 Madeleine Circle, Dallas, TX 75230 (the “Group I Directors” and each, a “Group I Director”)
GROUP II: William Carapucci, 4400 Post Oak Parkway, Suite 1550, Houston, TX 77027; David Chang, 1700 Broadway, 38th Floor, New York, NY 10019; and Allen Li, 333 S. Grand Avenue, 28th Floor, Los Angeles, CA 90071 (the “Group II Directors” and each, a “Group II Director”).
Each Group I Director shall initially serve until the next annual meeting of stockholders following the effectiveness of this ARTICLE SIXTH (the “2020 Annual Meeting”), and each Group II Director shall initially serve until the 2021 Annual meeting. At the 2020 Annual Meeting, the Group I Directors shall stand for election to a one-year term expiring at the 2021 Annual Meeting and until such director’s successor shall be duly elected and shall qualify or until such director’s earlier resignation, retirement, removal from office, death or incapacity. Commencing with the 2021 Annual Meeting, the foregoing classification of the Board of Directors shall cease. At the 2021 Annual Meeting and at each annual meeting of stockholders thereafter, each nominee for director
Form of A&R Charter | 3
shall stand for election to a one-year term expiring at the next annual meeting of stockholders and until such individual’s successors is duly elected and qualified, subject to such individual’s earlier resignation, retirement, removal from office, death or incapacitation.
SEVENTH: A.A director or officer of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, except for liability (i) for any breach of the director’s or officer’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) of a director under Section 174 of the DGCL, or (iv) for any transaction from which the director or officer derived an improper personal benefit, or (v) for any action by an officer by or in the right of the Corporation. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. Any repeal or modification of this Section 7.paragraph A by the stockholders of the Corporation shall not adversely affect any right or protection of a director or officer of the Corporation with respect to events occurring prior to the time of such repeal or modification.
Form of A&R Charter | 4
Form of A&R Charter | 5
EIGHTH: Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or stockholder of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine, in each case subject to said Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein.
NINTH: The Corporation shall not be governed by Section 203 of the DGCL.
TENTH: The provisions of this Article Tenth are set forth to regulate and define the conduct of certain affairs of the Corporation with respect to certain classes or categories of business opportunities as they may involve the Corporation’s stockholders, the Non-Employee Directors (as defined below) or their respective Affiliates and the powers, rights, duties and liabilities of the Corporation and the Corporation’s directors, officers and stockholders in connection therewith.
Form of A&R Charter | 6
C.The Corporation does not renounce its interest in any corporate opportunity offered to any Non-Employee Director if such opportunity is expressly offered to such Person solely in his or her capacity as a director or officer of the Corporation and the provisions of Section 10.B shall not apply to any such corporate opportunity.
D.In addition to and notwithstanding the foregoing provisions of this Article Tenth, a corporate opportunity shall not be deemed to be a corporate opportunity or potential corporate opportunity for the Corporation if it is a business opportunity that the Corporation is not financially able or contractually permitted or legally able to undertake, or that is, from its nature, not in the line of the Corporation’s business or is of no practical advantage to it or that is one in which the Corporation has no interest or reasonable expectancy.
E.For purposes of this Certificate of Incorporation (i) “Affiliate” shall mean (x) in respect of stockholders of the Corporation, any Person that, directly or indirectly, is controlled by such stockholder, controls such stockholder or is under common control with such stockholder and shall include any principal, member, manager, director, partner, shareholder, officer, employee or other representative of such stockholder and any of the foregoing (other than the Corporation and any entity that is controlled by the Corporation), (y) in respect of a Non-Employee Director, any Person that, directly or indirectly, is controlled by such Non-Employee Director (other than the Corporation and any entity that is controlled by the Corporation), and (z) in respect of the Corporation, any Person that, directly or indirectly, is controlled by the Corporation; (ii) “Person” shall mean any individual, corporation, general or limited partnership, limited liability company, joint venture, trust, association or any other entity; and (iii) the Persons identified in Section 10.B.(i) and 10.B.(ii) above shall be referred to, collectively, as “Identified Persons” and, individually, as an “Identified Person”; provided, however, that no employee, consultant or officer of the Corporation shall be an Identified Person.
F.To the fullest extent permitted by law, any Person purchasing or otherwise acquiring any interest in any shares of capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article Tenth.
TENTHEleventh: The Corporation reserves the right at any time, and from time to time, to amend or repeal any provision contained in this Amended and Restated Certificate of Incorporation, and add other provisions authorized by the laws of the State of Delaware at the time in force, in the manner now or hereafter prescribed by applicable law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Amended and Restated Certificate of Incorporation (as amended) are granted subject to the rights reserved in this ARTICLE EleventhTENTH.
[Remainder of Page Intentionally Left Blank]
Form of A&R Charter | 7
IN WITNESS WHEREOF, this Second Amended and Restated Certificate of Incorporation has been executed by a duly authorized officer of the Corporation on this [ ] day of [ ], 2025.
Battalion Oil Corporation
By:
Name:
Title:
[Signature Page to Second Amended and Restated Certificate of Incorporation - Battalion Oil Corporation]
Annex I
BATTALION OIL CORPORATION
____________________
CERTIFICATE OF DESIGNATIONS
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
____________________
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK
(Par Value $0.0001 Per Share)
Battalion Oil Corporation (the “Corporation”), a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “General Corporation Law”), hereby certifies that, pursuant to the authority expressly granted to and vested in the Board of Directors of the Corporation (the “Board of Directors”) by the Amended and Restated Certificate of Incorporation of the Corporation (as amended from time to time in accordance with its terms and the General Corporation Law, the “Certificate of Incorporation”), which authorizes the Board of Directors to issue shares of the preferred stock of the Corporation (the “Preferred Stock”), in one or more series of Preferred Stock and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional, or other special rights and such qualifications, limitations or restrictions thereof, and in accordance with the provisions of Section 151 of the General Corporation Law, the Board of Directors duly adopted on March 23, 2023 the following resolution:
RESOLVED, that the rights, powers and preferences, and the qualifications, limitations and restrictions, of the Series A Preferred Stock as set forth in this Certificate of Designations are hereby approved and adopted by the Board of Directors and Series A Preferred Stock is hereby authorized out of the Corporation’s authorized preferred stock, par value $0.0001 per share; and the form, terms and provisions of this Certificate of Designations are hereby approved, adopted, ratified and confirmed in all respects as follows:
| 1. | General. |
Annex I to A&R Charter | 1
Term | Section |
|---|---|
30 Day Date | Section 8(c) |
Board of Directors | Preamble |
Business Day | Section 4(b) |
Capital Stock | Section 1(d) |
Certificate of Incorporation | Preamble |
Change of Control | Section 8(b)(iv) |
CoC Conversion Consideration | Section 8(b)(ii) |
Common Stock | Section 1(d)(i) |
Conversion Notice | Section 7(a) |
Conversion Price | Section 7(a) |
Conversion Ratio | Section 7(a) |
Corporation | Preamble |
Corporation Event | Section 7(f) |
Debt | Section 7(b)(ii) |
Dividend Payment Date | Section 2(a) |
Dividend Period | Section 2(a) |
General Corporation Law | Preamble |
Holder | Section 3(a) |
Issuance Date | Section 2(a) |
Issuer Conversion Notice | Section 7(b) |
Junior Stock | Section 1(d)(i) |
Liquidation | Section 3(a) |
Liquidation Distribution | Section 3(a) |
Liquidation Preference | Section 3(a) |
Mandatory CoC Redemption Offer | Section 8(b)(ii) |
Mandatory Conversion Conditions | Section 7(b) |
Material Adverse Effect | Section 7(b) |
Maturity Date | Section 8(b)(vii) |
Annex I to A&R Charter | 2
Term | Section |
|---|---|
NYMEX Prices | Section 7(b)(v) |
NYSE American Issuance Limitation | Section 9(a) |
Optional CoC Conversion | Section 8(b)(iii) |
Optional CoC Redemption Offer | Section 8(b)(iii) |
Optional Holder Conversion | Section 7(a) |
Parity Stock | Section 1(d)(ii) |
PDP PV-20 | Section 7(b)(i) |
Permitted Holder | Section 8(b)(iv) |
Person | Section 8(b)(ix) |
Preferred Stock | Preamble |
Proved Developed Producing Reserves | Section 7(b)(iv) |
Purchase Agreement | Section 5(b) |
Redemption Notice | Section 8(a) |
Redemption Price | Section 8(a) |
Schedule 14C Action | Section 9(c) |
SEC | Section 9(c) |
Senior Stock | Section 1(d)(iii) |
Series A Dividend | Section 2(a) |
Series A Dividend Rate | Section 2(a) |
Series A Preferred Stock | Section 1(a) |
Stockholder Approval | Section 9(b) |
Subject Transaction | Section 9(d) |
Term Loan Credit Agreement | Section 8(b)(vi) |
Term Loan Restricted Period | Section 8(b)(v) |
Unpaid Dividend Accrual | Section 2(d) |
Working Capital Adjustments | Section 7(b)(iii) |
| 2. | Dividends. |
Annex I to A&R Charter | 3
| 3. | Liquidation. |
Annex I to A&R Charter | 4
| 4. | Voting. |
Annex I to A&R Charter | 5
If the Corporation shall propose to take any action enumerated above in clauses (i) through (vi) of this Section 4(b) then, and in each such case, the Corporation shall give notice of such proposed action to each Holder of record appearing on the stock books of the Corporation as of the date of such notice at the address of said Holder shown therein. Such notice shall specify, inter alia (x) the proposed effective date of such action; (y) the date on which a record is to be taken for the purposes of such action, if applicable; and (z) the other material terms of such action. Such notice shall be given at least two Business Days prior to the applicable date or effective date specified above. For the purposes of this Certificate of Designations, “Business Day” shall mean each day that is not a Saturday, Sunday or other day on which banking institutions in Houston, Texas or New York, New York are authorized or required by law to close. If at any time the Corporation shall cancel any of the proposed actions for which notice has been given under this Section 4(b) prior to the consummation thereof, the Corporation shall give prompt notice of such cancellation to each holder of record of the shares of Series A Preferred Stock appearing on the stock books of the Corporation as of the date of such notice at the address of said Holder shown therein. For the avoidance of doubt, if a holder of record of shares of Series A Preferred Stock does not respond to the aforementioned notice, such non-response shall in no way be deemed to constitute the written consent or affirmative vote of such Holder regarding any of the aforementioned actions in this Section 4(b) or described within such notice.
| 5. | Reservation of Common Stock. |
| 6. | Uncertificated Shares |
The shares of Series A Preferred Stock shall be in uncertificated, book-entry form as permitted by the Seventh Amended and Restated Bylaws of the Corporation (the “Bylaws”) and the General Corporation Law. Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof any written notice as required by the General Corporation Law.
| 7. | Conversion. |
Annex I to A&R Charter | 6
Annex I to A&R Charter | 7
Annex I to A&R Charter | 8
| 8. | Redemption |
Annex I to A&R Charter | 9
Annex I to A&R Charter | 10
Annex I to A&R Charter | 11
| 9. | NYSE American Issuance Limitation. |
Annex I to A&R Charter | 12
| 10. | Additional Procedures. |
| 11. | No Other Rights. |
The shares of Series A Preferred Stock shall not have any powers, designations, preferences or relative, participating, optional, or other special rights, nor shall there be any qualifications, limitations or restrictions or any powers, designations, preferences or rights of such shares, other than as set forth herein or in the Certificate of Incorporation, or as may be provided by law.
| 12. | Other Provisions. |
Annex I to A&R Charter | 13
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERS SET FORTH IN THE CERTIFICATE OF DESIGNATIONS FILED WITH THE SECRETARY OF STATE FOR THE STATE OF DELAWARE PURSUANT TO SECTION 202 OF THE DELAWARE GENERAL CORPORATION LAW (THE “CERTIFICATE OF DESIGNATIONS”). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THE CERTIFICATE OF DESIGNATIONS. A COPY OF THE CERTIFICATE OF DESIGNATIONS WILL BE FURNISHED WITHOUT CHARGE BY THE CORPORATION TO THE HOLDER UPON REQUEST.
| 13. | Effective Date. |
This Certificate of Designations shall become effective on March 24, 2023.
[The Remainder of this Page Intentionally Left Blank]
Annex I to A&R Charter | 14
Annex A-1
Conversion Notice
The undersigned holder of Series A Preferred Stock hereby irrevocably elects to convert the number of shares of Series A Preferred Stock indicated below pursuant to Section 7(a) of the Certificate of Designations into shares of Common Stock at the Conversion Ratio. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designations of Series A Redeemable Convertible Preferred Stock, filed by Battalion Oil Corporation on March 24, 2023 (the “Certificate of Designations”).
Conversion Calculations:
Number of shares of Series A Preferred Stock owned prior to conversion: [_____]
Number of shares of Series A Preferred Stock to be converted: [_____]
Number of shares of Common Stock to be issued: [_____]
[HOLDER]
Annex I to A&R Charter | 15
Annex A-2
Issuer Conversion Notice
Battalion Oil Corporation, a Delaware corporation, hereby irrevocably elects to convert the number of shares of Series A Preferred Stock held by you indicated below into shares of Common Stock at the Conversion Ratio on the date set forth below pursuant to Section 7(b) of the Certificate of Designations. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designations of Series A Redeemable Convertible Preferred Stock, filed by Battalion Oil Corporation on March 24, 2023 (the “Certificate of Designations”).
Holder: [_____]
Conversion Calculations:
Number of Shares of Series A Preferred Stock owned by you prior to conversion: [_____]
Number of Shares of Series A Preferred Stock owned by you to be converted: [_____]
Number of shares of Common Stock to be issued: [_____]
BATTALION OIL CORPORATION
Annex I to A&R Charter | 16
Annex B
Redemption Notice
Battalion Oil Corporation, a Delaware corporation, hereby irrevocably elects to redeem the number of shares of Series A Preferred Stock held by you indicated below on the date set forth below. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designations of Series A Redeemable Convertible Preferred Stock, filed by Battalion Oil Corporation on March 24, 2023.
Holder: [_____]
Date of redemption: [_____]
Redemption Calculations:
Number of Shares of Series A Preferred Stock owned by you prior to redemption: [_____]
Number of Shares of Series A Preferred Stock owned by you to be redeemed: [_____]
Redemption Price: [___]
Elect a Single Form of Payment of Redemption Price:
___ Cash (Cash payment to be made to you: [_____])
BATTALION OIL CORPORATION
Annex I to A&R Charter | 17
Annex II
BATTALION OIL CORPORATION
____________________
CERTIFICATE OF DESIGNATIONS
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
____________________
SERIES A-1 REDEEMABLE CONVERTIBLE PREFERRED STOCK
(Par Value $0.0001 Per Share)
Battalion Oil Corporation (the “Corporation”), a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “General Corporation Law”), hereby certifies that, pursuant to the authority expressly granted to and vested in the Board of Directors of the Corporation (the “Board of Directors”) by the Amended and Restated Certificate of Incorporation of the Corporation (as amended from time to time in accordance with its terms and the General Corporation Law, the “Certificate of Incorporation”), which authorizes the Board of Directors to issue shares of the preferred stock of the Corporation (the “Preferred Stock”), in one or more series of Preferred Stock and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional, or other special rights and such qualifications, limitations or restrictions thereof, and in accordance with the provisions of Section 151 of the General Corporation Law, the Board of Directors duly adopted on September 5, 2023 the following resolution:
RESOLVED, that the rights, powers and preferences, and the qualifications, limitations and restrictions, of the Series A-1 Preferred Stock as set forth in this Certificate of Designations are hereby approved and adopted by the Board of Directors and Series A-1 Preferred Stock is hereby authorized out of the Corporation’s authorized preferred stock, par value $0.0001 per share; and the form, terms and provisions of this Certificate of Designations are hereby approved, adopted, ratified and confirmed in all respects as follows:
| 1. | General. |
Annex II to A&R Charter | 1
Term | Section |
|---|---|
30 Day Date | Section 8(c) |
Board of Directors | Preamble |
Business Day | Section 4(b) |
Capital Stock | Section 1(d) |
Certificate of Incorporation | Preamble |
Change of Control | Section 8(b)(iv) |
CoC Conversion Consideration | Section 8(b)(ii) |
Common Stock | Section 1(d)(i) |
Conversion Notice | Section 7(a) |
Conversion Price | Section 7(a) |
Conversion Ratio | Section 7(a) |
Corporation | Preamble |
Corporation Event | Section 7(f) |
Debt | Section 7(b)(ii) |
Dividend Payment Date | Section 2(a) |
Dividend Period | Section 2(a) |
General Corporation Law | Preamble |
Holder | Section 3(a) |
Issuance Date | Section 2(a) |
Issuer Conversion Notice | Section 7(b) |
Junior Stock | Section 1(d)(i) |
Liquidation | Section 3(a) |
Liquidation Distribution | Section 3(a) |
Liquidation Preference | Section 3(a) |
Mandatory CoC Redemption Offer | Section 8(b)(ii) |
Mandatory Conversion Conditions | Section 7(b) |
Material Adverse Effect | Section 7(b) |
Annex II to A&R Charter | 2
Term | Section |
|---|---|
Maturity Date | Section 8(b)(vii) |
NYMEX Prices | Section 7(b)(v) |
NYSE American Issuance Limitation | Section 9(a) |
Optional CoC Conversion | Section 8(b)(iii) |
Optional CoC Redemption Offer | Section 8(b)(iii) |
Optional Holder Conversion | Section 7(a) |
Parity Stock | Section 1(d)(ii) |
PDP PV-20 | Section 7(b)(i) |
Permitted Holder | Section 8(b)(iv) |
Person | Section 8(b)(ix) |
Preferred Stock | Preamble |
Proved Developed Producing Reserves | Section 7(b)(iv) |
Purchase Agreement | Section 5(b) |
Redemption Notice | Section 8(a) |
Redemption Price | Section 8(a) |
Schedule 14C Action | Section 9(c) |
SEC | Section 9(c) |
Senior Stock | Section 1(d)(iii) |
Series A-1 Dividend | Section 2(a) |
Series A-1 Dividend Rate | Section 2(a) |
Series A-1 Preferred Stock | Section 1(a) |
Stockholder Approval | Section 9(b) |
Subject Transaction | Section 9(d) |
Term Loan Credit Agreement | Section 8(b)(vi) |
Term Loan Restricted Period | Section 8(b)(v) |
Unpaid Dividend Accrual | Section 2(d) |
Working Capital Adjustments | Section 7(b)(iii) |
| 2. | Dividends. |
Annex II to A&R Charter | 3
| 3. | Liquidation. |
Annex II to A&R Charter | 4
| 4. | Voting. |
Annex II to A&R Charter | 5
If the Corporation shall propose to take any action enumerated above in clauses (i) through (vi) of this Section 4(b) then, and in each such case, the Corporation shall give notice of such proposed action to each Holder of record appearing on the stock books of the Corporation as of the date of such notice at the address of said Holder shown therein. Such notice shall specify, inter alia (x) the proposed effective date of such action; (y) the date on which a record is to be taken for the purposes of such action, if applicable; and (z) the other material terms of such action. Such notice shall be given at least two Business Days prior to the applicable date or effective date specified above. For the purposes of this Certificate of Designations, “Business Day” shall mean each day that is not a Saturday, Sunday or other day on which banking institutions in Houston, Texas or New York, New York are authorized or required by law to close. If at any time the Corporation shall cancel any of the proposed actions for which notice has been given under this Section 4(b) prior to the consummation thereof, the Corporation shall give prompt notice of such cancellation to each holder of record of the shares of Series A-1 Preferred Stock appearing on the stock books of the Corporation as of the date of such notice at the address of said Holder shown therein. For the avoidance of doubt, if a holder of record of shares of Series A-1 Preferred Stock does not respond to the aforementioned notice, such non-response shall in no way be deemed to constitute the written consent or affirmative vote of such Holder regarding any of the aforementioned actions in this Section 4(b) or described within such notice.
| 5. | Reservation of Common Stock. |
| 6. | Uncertificated Shares. |
The shares of Series A-1 Preferred Stock shall be in uncertificated, book-entry form as permitted by the Seventh Amended and Restated Bylaws of the Corporation (the “Bylaws”) and the General Corporation Law. Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof any written notice as required by the General Corporation Law.
| 7. | Conversion. |
Annex II to A&R Charter | 6
Annex II to A&R Charter | 7
Annex II to A&R Charter | 8
| 8. | Redemption |
Annex II to A&R Charter | 9
Annex II to A&R Charter | 10
Annex II to A&R Charter | 11
| 9. | NYSE American Issuance Limitation. |
Annex II to A&R Charter | 12
| 10. | Additional Procedures. |
| 11. | No Other Rights. |
The shares of Series A-1 Preferred Stock shall not have any powers, designations, preferences or relative, participating, optional, or other special rights, nor shall there be any qualifications, limitations or restrictions or any powers, designations, preferences or rights of such shares, other than as set forth herein or in the Certificate of Incorporation, or as may be provided by law.
| 12. | Other Provisions. |
Annex II to A&R Charter | 13
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERS SET FORTH IN THE CERTIFICATE OF DESIGNATIONS FILED WITH THE SECRETARY OF STATE FOR THE STATE OF DELAWARE PURSUANT TO SECTION 202 OF THE DELAWARE GENERAL CORPORATION LAW (THE “CERTIFICATE OF DESIGNATIONS”). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THE CERTIFICATE OF DESIGNATIONS. A COPY OF THE CERTIFICATE OF DESIGNATIONS WILL BE FURNISHED WITHOUT CHARGE BY THE CORPORATION TO THE HOLDER UPON REQUEST.
| 13. | Effective Date. |
This Certificate of Designations shall become effective on September 6, 2023.
[The Remainder of this Page Intentionally Left Blank]
Annex II to A&R Charter | 14
Annex A-1
Conversion Notice
The undersigned holder of Series A-1 Preferred Stock hereby irrevocably elects to convert the number of shares of Series A-1 Preferred Stock indicated below pursuant to Section 7(a) of the Certificate of Designations into shares of Common Stock at the Conversion Ratio. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designations of Series A-1 Redeemable Convertible Preferred Stock, filed by Battalion Oil Corporation on September 6, 2023 (the “Certificate of Designations”).
Conversion Calculations:
Number of shares of Series A-1 Preferred Stock owned prior to conversion: [_____]
Number of shares of Series A-1 Preferred Stock to be converted: [_____]
Number of shares of Common Stock to be issued: [_____]
[HOLDER]
Annex II to A&R Charter | 15
Annex A-2
Issuer Conversion Notice
Battalion Oil Corporation, a Delaware corporation, hereby irrevocably elects to convert the number of shares of Series A-1 Preferred Stock held by you indicated below into shares of Common Stock at the Conversion Ratio on the date set forth below pursuant to Section 7(b) of the Certificate of Designations. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designations of Series A-1 Redeemable Convertible Preferred Stock, filed by Battalion Oil Corporation on September 6, 2023 (the “Certificate of Designations”).
Holder: [_____]
Conversion Calculations:
Number of Shares of Series A-1 Preferred Stock owned by you prior to conversion: [_____]
Number of Shares of Series A-1 Preferred Stock owned by you to be converted: [_____]
Number of shares of Common Stock to be issued: [_____]
BATTALION OIL CORPORATION
Annex II to A&R Charter | 16
Annex B
Redemption Notice
Battalion Oil Corporation, a Delaware corporation, hereby irrevocably elects to redeem the number of shares of Series A-1 Preferred Stock held by you indicated below on the date set forth below. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designations of Series A-1 Redeemable Convertible Preferred Stock, filed by Battalion Oil Corporation on September 6, 2023.
Holder: [_____]
Date of redemption: [_____]
Redemption Calculations:
Number of Shares of Series A-1 Preferred Stock owned by you prior to redemption: [_____]
Number of Shares of Series A-1 Preferred Stock owned by you to be redeemed: [_____]
Redemption Price: [___]
Elect a Single Form of Payment of Redemption Price:
___ Cash (Cash payment to be made to you: [_____])
BATTALION OIL CORPORATION
Annex II to A&R Charter | 17
Annex II(a)
BATTALION OIL CORPORATION
____________________
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF DESIGNATIONS
Pursuant to Section 151 of the General Corporation Law of the State of Delaware
____________________
SERIES A-1 REDEEMABLE CONVERTIBLE PREFERRED STOCK
(Par Value $0.0001 Per Share)
Battalion Oil Corporation (the “Corporation”), a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:
Whereas, pursuant to the authority expressly granted to and vested in the Board of Directors of the Corporation (the “Board”) by the Amended and Restated Certificate of Incorporation of the Corporation (as amended from time to time in accordance with its terms and the DGCL, the “Certificate of Incorporation”), the Board has previously authorized the creation and issuance of a series of preferred stock, with a par value of $0.0001 per share, of the Corporation designated as the “Series A-1 Redeemable Convertible Preferred Stock” (the “Series A-1 Preferred Stock”), with terms set forth in that certain Certificate of Designation filed with the Secretary of State of the State of Delaware on September 6, 2023 (the “Certificate of Designations”);
Whereas, on December 14, 2023, the Board duly approved and adopted resolutions for purposes of amending certain provisions of the Certificate of Designations (this “Amendment”); and
Whereas, pursuant to Section 4(b) of the Certificate of Designation, the holders of at least two-thirds (66 ⅔%) of the then outstanding shares of Series A-1 Preferred Stock (the “Requisite Series A-1 Holders”), by written consent, approved this Amendment on the terms set forth herein.
NOW, THEREFORE, BE IT RESOLVED, that, pursuant to the authority expressly vested in the Board and in accordance with the provisions of the Certificate of Incorporation and the DGCL, the Certificate of Designations be, and hereby is amended as follows:
Annex II to A&R Charter | 18
Annex II to A&R Charter | 19
[The Remainder of this Page Intentionally Left Blank]
Annex II to A&R Charter | 20
Annex III
BATTALION OIL CORPORATION
____________________
CERTIFICATE OF DESIGNATIONS
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
____________________
SERIES A-2 REDEEMABLE CONVERTIBLE PREFERRED STOCK
(Par Value $0.0001 Per Share)
Battalion Oil Corporation (the “Corporation”), a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “General Corporation Law”), hereby certifies that, pursuant to the authority expressly granted to and vested in the Board of Directors of the Corporation (the “Board of Directors”) by the Amended and Restated Certificate of Incorporation of the Corporation (as amended from time to time in accordance with its terms and the General Corporation Law, the “Certificate of Incorporation”), which authorizes the Board of Directors to issue shares of the preferred stock of the Corporation (the “Preferred Stock”), in one or more series of Preferred Stock and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional, or other special rights and such qualifications, limitations or restrictions thereof, and in accordance with the provisions of Section 151 of the General Corporation Law, the Board of Directors duly adopted on December 15, 2023 the following resolution:
RESOLVED, that the rights, powers and preferences, and the qualifications, limitations and restrictions, of the Series A-2 Preferred Stock as set forth in this Certificate of Designations are hereby approved and adopted by the Board of Directors and Series A-2 Preferred Stock is hereby authorized out of the Corporation’s authorized preferred stock, par value $0.0001 per share; and the form, terms and provisions of this Certificate of Designations are hereby approved, adopted, ratified and confirmed in all respects as follows:
| 1. | General. |
Annex III to A&R Charter | 1
Term | Section |
|---|---|
30 Day Date | Section 8(c) |
Board of Directors | Preamble |
Business Day | Section 4(b) |
Capital Stock | Section 1(d) |
Certificate of Incorporation | Preamble |
Change of Control | Section 8(b)(iv) |
CoC Conversion Consideration | Section 8(b)(ii) |
Common Stock | Section 1(d)(i) |
Conversion Notice | Section 7(a) |
Conversion Price | Section 7(a) |
Conversion Ratio | Section 7(a) |
Corporation | Preamble |
Corporation Event | Section 7(f) |
Debt | Section 7(b)(ii) |
Dividend Payment Date | Section 2(a) |
Dividend Period | Section 2(a) |
General Corporation Law | Preamble |
Holder | Section 3(a) |
Issuance Date | Section 2(a) |
Issuer Conversion Notice | Section 7(b) |
Junior Stock | Section 1(d)(i) |
Liquidation | Section 3(a) |
Liquidation Distribution | Section 3(a) |
Liquidation Preference | Section 3(a) |
Mandatory CoC Redemption Offer | Section 8(b)(ii) |
Mandatory Conversion Conditions | Section 7(b) |
Annex III to A&R Charter | 2
Term | Section |
|---|---|
Material Adverse Effect | Section 7(b) |
Maturity Date | Section 8(b)(vii) |
NYMEX Prices | Section 7(b)(v) |
NYSE American Issuance Limitation | Section 9(a) |
Optional CoC Conversion | Section 8(b)(iii) |
Optional CoC Redemption Offer | Section 8(b)(iii) |
Optional Holder Conversion | Section 7(a) |
Parity Stock | Section 1(d)(ii) |
PDP PV-20 | Section 7(b)(i) |
Permitted Holder | Section 8(b)(iv) |
Person | Section 8(b)(ix) |
Preferred Stock | Preamble |
Proved Developed Producing Reserves | Section 7(b)(iv) |
Purchase Agreement | Section 5(b) |
Redemption Notice | Section 8(a) |
Redemption Price | Section 8(a) |
Schedule 14C Action | Section 9(c) |
SEC | Section 9(c) |
Senior Stock | Section 1(d)(iii) |
Series A-2 Dividend | Section 2(a) |
Series A-2 Dividend Rate | Section 2(a) |
Series A-2 Preferred Stock | Section 1(a) |
Stockholder Approval | Section 9(b) |
Subject Transaction | Section 9(d) |
Term Loan Credit Agreement | Section 8(b)(vi) |
Term Loan Restricted Period | Section 8(b)(v) |
Unpaid Dividend Accrual | Section 2(d) |
Working Capital Adjustments | Section 7(b)(iii) |
| 2. | Dividends. |
Annex III to A&R Charter | 3
| 3. | Liquidation. |
Annex III to A&R Charter | 4
| 4. | Voting. |
Annex III to A&R Charter | 5
If the Corporation shall propose to take any action enumerated above in clauses (i) through (vi) of this Section 4(b) then, and in each such case, the Corporation shall give notice of such proposed action to each Holder of record appearing on the stock books of the Corporation as of the date of such notice at the address of said Holder shown therein. Such notice shall specify, inter alia (x) the proposed effective date of such action; (y) the date on which a record is to be taken for the purposes of such action, if applicable; and (z) the other material terms of such action. Such notice shall be given at least two Business Days prior to the applicable date or effective date specified above. For the purposes of this Certificate of Designations, “Business Day” shall mean each day that is not a Saturday, Sunday or other day on which banking institutions in Houston, Texas or New York, New York are authorized or required by law to close. If at any time the Corporation shall cancel any of the proposed actions for which notice has been given under this Section 4(b) prior to the consummation thereof, the Corporation shall give prompt notice of such cancellation to each holder of record of the shares of Series A-2 Preferred Stock appearing on the stock books of the Corporation as of the date of such notice at the address of said Holder shown therein. For the avoidance of doubt, if a holder of record of shares of Series A-2 Preferred Stock does not respond to the aforementioned notice, such non-response shall in no way be deemed to constitute the written consent or affirmative vote of such Holder regarding any of the aforementioned actions in this Section 4(b) or described within such notice.
| 5. | Reservation of Common Stock. |
| 6. | Uncertificated Shares |
The shares of Series A-2 Preferred Stock shall be in uncertificated, book-entry form as permitted by the Seventh Amended and Restated Bylaws of the Corporation (the “Bylaws”) and the General Corporation Law. Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof any written notice as required by the General Corporation Law.
| 7. | Conversion. |
Annex III to A&R Charter | 6
Annex III to A&R Charter | 7
Annex III to A&R Charter | 8
| 8. | Redemption |
Annex III to A&R Charter | 9
Annex III to A&R Charter | 10
Annex III to A&R Charter | 11
| 9. | NYSE American Issuance Limitation. |
Annex III to A&R Charter | 12
| 10. | Additional Procedures. |
| 11. | No Other Rights. |
The shares of Series A-2 Preferred Stock shall not have any powers, designations, preferences or relative, participating, optional, or other special rights, nor shall there be any qualifications, limitations or restrictions or any powers, designations, preferences or rights of such shares, other than as set forth herein or in the Certificate of Incorporation, or as may be provided by law.
| 12. | Other Provisions. |
Annex III to A&R Charter | 13
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERS SET FORTH IN THE CERTIFICATE OF DESIGNATIONS FILED WITH THE SECRETARY OF STATE FOR THE STATE OF DELAWARE PURSUANT TO SECTION 202 OF THE DELAWARE GENERAL CORPORATION LAW (THE “CERTIFICATE OF DESIGNATIONS”). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THE CERTIFICATE OF DESIGNATIONS. A COPY OF THE CERTIFICATE OF DESIGNATIONS WILL BE FURNISHED WITHOUT CHARGE BY THE CORPORATION TO THE HOLDER UPON REQUEST.
| 13. | Effective Date. |
This Certificate of Designations shall become effective on December 15, 2023.
[The Remainder of this Page Intentionally Left Blank]
Annex III to A&R Charter | 14
Annex A-2 Annex A-1
Conversion Notice
The undersigned holder of Series A-2 Preferred Stock hereby irrevocably elects to convert the number of shares of Series A-2 Preferred Stock indicated below pursuant to Section 7(a) of the Certificate of Designations into shares of Common Stock at the Conversion Ratio. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designations of Series A-2 Redeemable Convertible Preferred Stock, filed by Battalion Oil Corporation on December 15, 2023 (the “Certificate of Designations”).
Conversion Calculations:
Number of shares of Series A-2 Preferred Stock owned prior to conversion: [_____]
Number of shares of Series A-2 Preferred Stock to be converted: [_____]
Number of shares of Common Stock to be issued: [_____]
[HOLDER]
Annex III to A&R Charter | 15
Annex A-2
Issuer Conversion Notice
Battalion Oil Corporation, a Delaware corporation, hereby irrevocably elects to convert the number of shares of Series A-2 Preferred Stock held by you indicated below into shares of Common Stock at the Conversion Ratio on the date set forth below pursuant to Section 7(b) of the Certificate of Designations. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designations of Series A-2 Redeemable Convertible Preferred Stock, filed by Battalion Oil Corporation on December 15, 2023 (the “Certificate of Designations”).
Holder: [_____]
Conversion Calculations:
Number of Shares of Series A-2 Preferred Stock owned by you prior to conversion: [_____]
Number of Shares of Series A-2 Preferred Stock owned by you to be converted: [_____]
Number of shares of Common Stock to be issued: [_____]
BATTALION OIL CORPORATION
Annex III to A&R Charter | 16
Annex B
Redemption Notice
Battalion Oil Corporation, a Delaware corporation, hereby irrevocably elects to redeem the number of shares of Series A-2 Preferred Stock held by you indicated below on the date set forth below. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designations of Series A-2 Redeemable Convertible Preferred Stock, filed by Battalion Oil Corporation on December 15, 2023.
Holder: [_____]
Date of redemption: [_____]
Redemption Calculations:
Number of Shares of Series A-2 Preferred Stock owned by you prior to redemption: [_____]
Number of Shares of Series A-2 Preferred Stock owned by you to be redeemed: [_____]
Redemption Price: [___]
Elect a Single Form of Payment of Redemption Price:
___ Cash (Cash payment to be made to you: [_____])
BATTALION OIL CORPORATION
Annex III to A&R Charter | 17
Annex IV
BATTALION OIL CORPORATION
____________________
CERTIFICATE OF DESIGNATIONS
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
____________________
SERIES A-3 REDEEMABLE CONVERTIBLE PREFERRED STOCK
(Par Value $0.0001 Per Share)
Battalion Oil Corporation (the “Corporation”), a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “General Corporation Law”), hereby certifies that, pursuant to the authority expressly granted to and vested in the Board of Directors of the Corporation (the “Board of Directors”) by the Amended and Restated Certificate of Incorporation of the Corporation (as amended from time to time in accordance with its terms and the General Corporation Law, the “Certificate of Incorporation”), which authorizes the Board of Directors to issue shares of the preferred stock of the Corporation (the “Preferred Stock”), in one or more series of Preferred Stock and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional, or other special rights and such qualifications, limitations or restrictions thereof, and in accordance with the provisions of Section 151 of the General Corporation Law, the Board of Directors duly adopted on March 27, 2024 the following resolution:
RESOLVED, that the rights, powers and preferences, and the qualifications, limitations and restrictions, of the Series A-3 Preferred Stock as set forth in this Certificate of Designations are hereby approved and adopted by the Board of Directors and Series A-3 Preferred Stock is hereby authorized out of the Corporation’s authorized preferred stock, par value $0.0001 per share; and the form, terms and provisions of this Certificate of Designations are hereby approved, adopted, ratified and confirmed in all respects as follows:
| 1. | General. |
Annex IV to A&R Charter | 1
Term | Section |
|---|---|
30 Day Date | Section 8(c) |
Board of Directors | Preamble |
Business Day | Section 4(b) |
Capital Stock | Section 1(d) |
Certificate of Incorporation | Preamble |
Change of Control | Section 8(b)(iv) |
CoC Conversion Consideration | Section 8(b)(ii) |
Common Stock | Section 1(d)(i) |
Conversion Notice | Section 7(a) |
Conversion Price | Section 7(a) |
Conversion Ratio | Section 7(a) |
Corporation | Preamble |
Corporation Event | Section 7(f) |
Debt | Section 7(b)(ii) |
Dividend Payment Date | Section 2(a) |
Dividend Period | Section 2(a) |
General Corporation Law | Preamble |
Holder | Section 3(a) |
Issuance Date | Section 2(a) |
Issuer Conversion Notice | Section 7(b) |
Junior Stock | Section 1(d)(i) |
Liquidation | Section 3(a) |
Liquidation Distribution | Section 3(a) |
Liquidation Preference | Section 3(a) |
Mandatory CoC Redemption Offer | Section 8(b)(ii) |
Annex IV to A&R Charter | 2
Term | Section |
|---|---|
Mandatory Conversion Conditions | Section 7(b) |
Material Adverse Effect | Section 7(b) |
Maturity Date | Section 8(b)(vii) |
NYMEX Prices | Section 7(b)(v) |
NYSE American Issuance Limitation | Section 9(a) |
Optional CoC Conversion | Section 8(b)(iii) |
Optional CoC Redemption Offer | Section 8(b)(iii) |
Optional Holder Conversion | Section 7(a) |
Parity Stock | Section 1(d)(ii) |
PDP PV-20 | Section 7(b)(i) |
Permitted Holder | Section 8(b)(iv) |
Person | Section 8(b)(ix) |
Preferred Stock | Preamble |
Proved Developed Producing Reserves | Section 7(b)(iv) |
Purchase Agreement | Section 5(b) |
Redemption Notice | Section 8(a) |
Redemption Price | Section 8(a) |
Schedule 14C Action | Section 9(c) |
SEC | Section 9(c) |
Senior Stock | Section 1(d)(iii) |
Series A-3 Dividend | Section 2(a) |
Series A-3 Dividend Rate | Section 2(a) |
Series A-3 Preferred Stock | Section 1(a) |
Stockholder Approval | Section 9(b) |
Subject Transaction | Section 9(d) |
Term Loan Credit Agreement | Section 8(b)(vi) |
Term Loan Restricted Period | Section 8(b)(v) |
Unpaid Dividend Accrual | Section 2(d) |
Working Capital Adjustments | Section 7(b)(iii) |
| 2. | Dividends. |
Annex IV to A&R Charter | 3
| 3. | Liquidation. |
Annex IV to A&R Charter | 4
| 4. | Voting. |
Annex IV to A&R Charter | 5
If the Corporation shall propose to take any action enumerated above in clauses (i) through (vi) of this Section 4(b) then, and in each such case, the Corporation shall give notice of such proposed action to each Holder of record appearing on the stock books of the Corporation as of the date of such notice at the address of said Holder shown therein. Such notice shall specify, inter alia (x) the proposed effective date of such action; (y) the date on which a record is to be taken for the purposes of such action, if applicable; and (z) the other material terms of such action. Such notice shall be given at least two Business Days prior to the applicable date or effective date specified above. For the purposes of this Certificate of Designations, “Business Day” shall mean each day that is not a Saturday, Sunday or other day on which banking institutions in Houston, Texas or New York, New York are authorized or required by law to close. If at any time the Corporation shall cancel any of the proposed actions for which notice has been given under this Section 4(b) prior to the consummation thereof, the Corporation shall give prompt notice of such cancellation to each holder of record of the shares of Series A-3 Preferred Stock appearing on the stock books of the Corporation as of the date of such notice at the address of said Holder shown therein. For the avoidance of doubt, if a holder of record of shares of Series A-3 Preferred Stock does not respond to the aforementioned notice, such non-response shall in no way be deemed to constitute the written consent or affirmative vote of such Holder regarding any of the aforementioned actions in this Section 4(b) or described within such notice.
| 5. | Reservation of Common Stock. |
| 6. | Uncertificated Shares |
The shares of Series A-3 Preferred Stock shall be in uncertificated, book-entry form as permitted by the Seventh Amended and Restated Bylaws of the Corporation (the “Bylaws”) and the General Corporation Law. Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof any written notice as required by the General Corporation Law.
Annex IV to A&R Charter | 6
| 7. | Conversion. |
Annex IV to A&R Charter | 7
Annex IV to A&R Charter | 8
| 8. | Redemption |
Annex IV to A&R Charter | 9
Annex IV to A&R Charter | 10
Annex IV to A&R Charter | 11
| 9. | NYSE American Issuance Limitation. |
Annex IV to A&R Charter | 12
| 10. | Additional Procedures. |
| 11. | No Other Rights. |
The shares of Series A-3 Preferred Stock shall not have any powers, designations, preferences or relative, participating, optional, or other special rights, nor shall there be any qualifications, limitations or restrictions or any powers, designations, preferences or rights of such shares, other than as set forth herein or in the Certificate of Incorporation, or as may be provided by law.
| 12. | Other Provisions. |
Annex IV to A&R Charter | 13
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERS SET FORTH IN THE CERTIFICATE OF DESIGNATIONS FILED WITH THE SECRETARY OF STATE FOR THE STATE OF DELAWARE PURSUANT TO SECTION 202 OF THE DELAWARE GENERAL CORPORATION LAW (THE “CERTIFICATE OF DESIGNATIONS”). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THE CERTIFICATE OF DESIGNATIONS. A COPY OF THE CERTIFICATE OF DESIGNATIONS WILL BE FURNISHED WITHOUT CHARGE BY THE CORPORATION TO THE HOLDER UPON REQUEST.
| 13. | Effective Date. |
This Certificate of Designations shall become effective on March 27, 2024.
[The Remainder of this Page Intentionally Left Blank]
Annex IV to A&R Charter | 14
Annex A-1
Conversion Notice
The undersigned holder of Series A-3 Preferred Stock hereby irrevocably elects to convert the number of shares of Series A-3 Preferred Stock indicated below pursuant to Section 7(a) of the Certificate of Designations into shares of Common Stock at the Conversion Ratio. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designations of Series A-3 Redeemable Convertible Preferred Stock, filed by Battalion Oil Corporation on March 27, 2024 (the “Certificate of Designations”).
Conversion Calculations:
Number of shares of Series A-3 Preferred Stock owned prior to conversion: [_____]
Number of shares of Series A-3 Preferred Stock to be converted: [_____]
Number of shares of Common Stock to be issued: [_____]
[HOLDER]
Annex IV to A&R Charter | 15
Annex A-2
Issuer Conversion Notice
Battalion Oil Corporation, a Delaware corporation, hereby irrevocably elects to convert the number of shares of Series A-3 Preferred Stock held by you indicated below into shares of Common Stock at the Conversion Ratio on the date set forth below pursuant to Section 7(b) of the Certificate of Designations. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designations of Series A-3 Redeemable Convertible Preferred Stock, filed by Battalion Oil Corporation on March 27, 2024 (the “Certificate of Designations”).
Holder: [_____]
Conversion Calculations:
Number of Shares of Series A-3 Preferred Stock owned by you prior to conversion: [_____]
Number of Shares of Series A-3 Preferred Stock owned by you to be converted: [_____]
Number of shares of Common Stock to be issued: [_____]
BATTALION OIL CORPORATION
Annex IV to A&R Charter | 16
Annex B
Redemption Notice
Battalion Oil Corporation, a Delaware corporation, hereby irrevocably elects to redeem the number of shares of Series A-3 Preferred Stock held by you indicated below on the date set forth below. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designations of Series A-3 Redeemable Convertible Preferred Stock, filed by Battalion Oil Corporation on March 27, 2024.
Holder: [_____]
Date of redemption: [_____]
Redemption Calculations:
Number of Shares of Series A-3 Preferred Stock owned by you prior to redemption: [_____]
Number of Shares of Series A-3 Preferred Stock owned by you to be redeemed: [_____]
Redemption Price: [___]
Elect a Single Form of Payment of Redemption Price:
___ Cash (Cash payment to be made to you: [_____])
BATTALION OIL CORPORATION
Annex IV to A&R Charter | 17
Annex V
BATTALION OIL CORPORATION
____________________
CERTIFICATE OF DESIGNATIONS
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
____________________
SERIES A-4 REDEEMABLE CONVERTIBLE PREFERRED STOCK
(Par Value $0.0001 Per Share)
Battalion Oil Corporation (the “Corporation”), a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “General Corporation Law”), hereby certifies that, pursuant to the authority expressly granted to and vested in the Board of Directors of the Corporation (the “Board of Directors”) by the Amended and Restated Certificate of Incorporation of the Corporation (as amended from time to time in accordance with its terms and the General Corporation Law, the “Certificate of Incorporation”), which authorizes the Board of Directors to issue shares of the preferred stock of the Corporation (the “Preferred Stock”), in one or more series of Preferred Stock and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional, or other special rights and such qualifications, limitations or restrictions thereof, and in accordance with the provisions of Section 151 of the General Corporation Law, the Board of Directors duly adopted on May 13, 2024 the following resolution:
RESOLVED, that the rights, powers and preferences, and the qualifications, limitations and restrictions, of the Series A-4 Preferred Stock as set forth in this Certificate of Designations are hereby approved and adopted by the Board of Directors and Series A-4 Preferred Stock is hereby authorized out of the Corporation’s authorized preferred stock, par value $0.0001 per share; and the form, terms and provisions of this Certificate of Designations are hereby approved, adopted, ratified and confirmed in all respects as follows:
| 1. | General. |
Annex V to A&R Charter | 1
Term | Section |
|---|---|
30 Day Date | Section 8(c) |
Board of Directors | Preamble |
Business Day | Section 4(b) |
Capital Stock | Section 1(d) |
Certificate of Incorporation | Preamble |
Change of Control | Section 8(b)(iv) |
CoC Conversion Consideration | Section 8(b)(ii) |
Common Stock | Section 1(d)(i) |
Conversion Notice | Section 7(a) |
Conversion Price | Section 7(a) |
Conversion Ratio | Section 7(a) |
Corporation | Preamble |
Corporation Event | Section 7(f) |
Debt | Section 7(b)(ii) |
Dividend Payment Date | Section 2(a) |
Dividend Period | Section 2(a) |
General Corporation Law | Preamble |
Holder | Section 3(a) |
Issuance Date | Section 2(a) |
Issuer Conversion Notice | Section 7(b) |
Junior Stock | Section 1(d)(i) |
Liquidation | Section 3(a) |
Liquidation Distribution | Section 3(a) |
Liquidation Preference | Section 3(a) |
Annex V to A&R Charter | 2
Term | Section |
|---|---|
Mandatory CoC Redemption Offer | Section 8(b)(ii) |
Mandatory Conversion Conditions | Section 7(b) |
Material Adverse Effect | Section 7(b) |
Maturity Date | Section 8(b)(vii) |
NYMEX Prices | Section 7(b)(v) |
NYSE American Issuance Limitation | Section 9(a) |
Optional CoC Conversion | Section 8(b)(iii) |
Optional CoC Redemption Offer | Section 8(b)(iii) |
Optional Holder Conversion | Section 7(a) |
Parity Stock | Section 1(d)(ii) |
PDP PV-20 | Section 7(b)(i) |
Permitted Holder | Section 8(b)(iv) |
Person | Section 8(b)(ix) |
Preferred Stock | Preamble |
Proved Developed Producing Reserves | Section 7(b)(iv) |
Purchase Agreement | Section 5(b) |
Redemption Notice | Section 8(a) |
Redemption Price | Section 8(a) |
Schedule 14C Action | Section 9(c) |
SEC | Section 9(c) |
Senior Stock | Section 1(d)(iii) |
Series A-4 Dividend | Section 2(a) |
Series A-4 Dividend Rate | Section 2(a) |
Series A-4 Preferred Stock | Section 1(a) |
Stockholder Approval | Section 9(b) |
Subject Transaction | Section 9(d) |
Term Loan Credit Agreement | Section 8(b)(vi) |
Term Loan Restricted Period | Section 8(b)(v) |
Unpaid Dividend Accrual | Section 2(d) |
Working Capital Adjustments | Section 7(b)(iii) |
| 2. | Dividends. |
Annex V to A&R Charter | 3
| 3. | Liquidation. |
Annex V to A&R Charter | 4
| 4. | Voting. |
Annex V to A&R Charter | 5
If the Corporation shall propose to take any action enumerated above in clauses (i) through (vi) of this Section 4(b) then, and in each such case, the Corporation shall give notice of such proposed action to each Holder of record appearing on the stock books of the Corporation as of the date of such notice at the address of said Holder shown therein. Such notice shall specify, inter alia (x) the proposed effective date of such action; (y) the date on which a record is to be taken for the purposes of such action, if applicable; and (z) the other material terms of such action. Such notice shall be given at least two (2) Business Days prior to the applicable date or effective date specified above. For the purposes of this Certificate of Designations, “Business Day” shall mean each day that is not a Saturday, Sunday or other day on which banking institutions in Houston, Texas or New York, New York are authorized or required by law to close. If at any time the Corporation shall cancel any of the proposed actions for which notice has been given under this Section 4(b) prior to the consummation thereof, the Corporation shall give prompt notice of such cancellation to each holder of record of the shares of Series A-4 Preferred Stock appearing on the stock books of the Corporation as of the date of such notice at the address of said Holder shown therein. For the avoidance of doubt, if a holder of record of shares of Series A-4 Preferred Stock does not respond to the aforementioned notice, such non-response shall in no way be deemed to constitute the written consent or affirmative vote of such Holder regarding any of the aforementioned actions in this Section 4(b) or described within such notice.
| 5. | Reservation of Common Stock. |
| 6. | Uncertificated Shares. |
The shares of Series A-4 Preferred Stock shall be in uncertificated, book-entry form as permitted by the Seventh Amended and Restated Bylaws of the Corporation (the “Bylaws”) and the General Corporation Law. Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof any written notice as required by the General Corporation Law.
Annex V to A&R Charter | 6
| 7. | Conversion. |
Annex V to A&R Charter | 7
Annex V to A&R Charter | 8
| 8. | Redemption. |
Annex V to A&R Charter | 9
Annex V to A&R Charter | 10
Annex V to A&R Charter | 11
| 9. | NYSE American Issuance Limitation. |
Annex V to A&R Charter | 12
| 10. | Additional Procedures. |
| 11. | No Other Rights. |
The shares of Series A-4 Preferred Stock shall not have any powers, designations, preferences or relative, participating, optional, or other special rights, nor shall there be any qualifications, limitations or restrictions or any powers, designations, preferences or rights of such shares, other than as set forth herein or in the Certificate of Incorporation, or as may be provided by law.
| 12. | Other Provisions. |
Annex V to A&R Charter | 13
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERS SET FORTH IN THE CERTIFICATE OF DESIGNATIONS FILED WITH THE SECRETARY OF STATE FOR THE STATE OF DELAWARE PURSUANT TO SECTION 202 OF THE DELAWARE GENERAL CORPORATION LAW (THE “CERTIFICATE OF DESIGNATIONS”). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THE CERTIFICATE OF DESIGNATIONS. A COPY OF THE CERTIFICATE OF DESIGNATIONS WILL BE FURNISHED WITHOUT CHARGE BY THE CORPORATION TO THE HOLDER UPON REQUEST.
| 13. | Effective Date. |
This Certificate of Designations shall become effective on May 13, 2024.
[The Remainder of this Page Intentionally Left Blank]
Annex V to A&R Charter | 14
Annex A-1
Conversion Notice
The undersigned holder of Series A-4 Preferred Stock hereby irrevocably elects to convert the number of shares of Series A-4 Preferred Stock indicated below pursuant to Section 7(a) of the Certificate of Designations into shares of Common Stock at the Conversion Ratio. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designations of Series A-4 Redeemable Convertible Preferred Stock, filed by Battalion Oil Corporation on May 13, 2024 (the “Certificate of Designations”).
Conversion Calculations:
Number of shares of Series A-4 Preferred Stock owned prior to conversion: [_____]
Number of shares of Series A-4 Preferred Stock to be converted: [_____]
Number of shares of Common Stock to be issued: [_____]
[HOLDER]
Annex V to A&R Charter | 15
Annex A-2
Issuer Conversion Notice
Battalion Oil Corporation, a Delaware corporation, hereby irrevocably elects to convert the number of shares of Series A-4 Preferred Stock held by you indicated below into shares of Common Stock at the Conversion Ratio on the date set forth below pursuant to Section 7(b) of the Certificate of Designations. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designations of Series A-4 Redeemable Convertible Preferred Stock, filed by Battalion Oil Corporation on May 13, 2024 (the “Certificate of Designations”).
Holder: [_____]
Conversion Calculations:
Number of Shares of Series A-4 Preferred Stock owned by you prior to conversion: [_____]
Number of Shares of Series A-4 Preferred Stock owned by you to be converted: [_____]
Number of shares of Common Stock to be issued: [_____]
BATTALION OIL CORPORATION
Annex V to A&R Charter | 16
Annex B
Redemption Notice
Battalion Oil Corporation, a Delaware corporation, hereby irrevocably elects to redeem the number of shares of Series A-4 Preferred Stock held by you indicated below on the date set forth below. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designations of Series A-4 Redeemable Convertible Preferred Stock, filed by Battalion Oil Corporation on May 13, 2024.
Holder: [_____]
Date of redemption: [_____]
Redemption Calculations:
Number of Shares of Series A-4 Preferred Stock owned by you prior to redemption: [_____]
Number of Shares of Series A-4 Preferred Stock owned by you to be redeemed: [_____]
Redemption Price: [___]
Elect a Single Form of Payment of Redemption Price:
___ Cash (Cash payment to be made to you: [_____])
BATTALION OIL CORPORATION
Annex V to A&R Charter | 17
| Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. V74124-P32687 01) Jonathan D. Barrett 02) David Chang 03) Gregory S. Hinds 04) Ajay Jegadeesan 05) Matthew B. Steele 06) William D. Rogers For All Withhold All For All Except For Against Abstain To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. Nominees: 2. To approve, in a non-binding advisory vote, executive compensation of the Company's named executive officers. 3. To determine, in a non-binding advisory vote, whether a stockholder vote to approve the compensation of the Company's named executive officers should occur every one, two or three years. BATTALION OIL CORPORATION The Board of Directors recommends you vote FOR the following: The Board of Directors recommends you vote FOR the following proposal: NOTE: To transact such other business as may properly come before the Annual Meeting or any adjournment thereof. The Board of Directors recommends you vote "3 Years" on the following proposal: Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. 1. To elect six directors to serve until the next Annual Meeting of Stockholders in accordance with our certificate of incorporation and bylaws. The Board of Directors recommends you vote FOR each of the following: 4. To approve a proposed amended and restated certificate of incorporation, which will amend and restate our current Amended and Restated Certificate of Incorporation (the “Charter”), to: 4b. adopt a provision to waive the corporate opportunity doctrine with respect to the Company's stockholders, directors and their affiliates (the “Corporate Opportunity Amendment”); 4a. adopt a provision to provide for the exculpation of officers as permitted by recent amendments to Delaware law (the “Officer Exculpation Amendment”); 4c. adopt a provision revising the votes required to amend, revise, or otherwise modify the terms of preferred stock, including when set forth in a certificate of designations (the “Preferred Stock Voting Amendment”); and ! ! ! ! ! ! ! 1 Year 2 Years 3 Years Abstain For Against Abstain 4d. further update the Charter's text by removing or modifying expired provisions, integrating previously approved amendments and making minor clarifications and other updates, including to approve the amended terms of our Series A-1 Preferred Stock (the “Charter Updates”). ! ! ! ! ! ! ! ! ! ! ! ! BATTALION OIL CORPORATION C/O BROADRIDGE P.O. BOX 1342 BRENTWOOD, NY 11717 !!! SCAN TO VIEW MATERIALS & VOTEZ VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. Eastern Time on June 11, 2025. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. Eastern Time on June 11, 2025. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
| V74125-P32687 BATTALION OIL CORPORATION Annual Meeting of Stockholders June 12, 2025 11:00 AM This proxy is solicited by the Board of Directors The stockholders hereby appoint Matthew B. Steele and Walter Mayer, or either of them, as proxies, each with the power to appoint their substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common stock of BATTALION OIL CORPORATION that the stockholders are entitled to vote at the Annual Meeting of Stockholders to be held at 11:00 AM Central Time on June 12, 2025, at Two Memorial City Plaza, 820 Gessner Road, Magnolia Conference Room (Suite 280), Houston, Texas 77024, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. Continued and to be signed on reverse side Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. |
