EXHIBIT 10.4
EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into on May 22, 2009
(“Effective Date”) by and between Petro Resources Corporation, a Delaware
corporation (“Company”), and Ronald D. Ormand (“Executive”).
 
R E C I T A L
 
Company is desirous of employing Executive in an executive capacity on the terms
and conditions and for the consideration, hereinafter set forth and Executive is
desirous of being employed by Company on such terms and conditions and for such
consideration.
 
A G R E E M E N T
 
It is agreed as follows:
 
ARTICLE I
 
DEFINITIONS AND INTERPRETATIONS
 
1.1  Definitions.
 
(a)  “Annual Base Salary” shall mean Executive’s annual base salary as of the
date of his Involuntary Termination, determined pursuant to Section 4.1.
 
(b)  “Board” shall mean the board of directors of Company.
 
(c)  “Business Territories” shall mean all field locations in which the Company
has activities directly related to the exploration or production and sale of oil
and gas, including but not limited to, any location as to which the Company has
devoted any significant efforts for production, analysis, joint venture
consideration or interest even if efforts for the actual exploration or
production of oil and gas have not yet commenced.
 
(d)  “Cause” shall mean Executive (i) has engaged in gross negligence, gross
incompetence, or willful misconduct in the performance of his duties at the
Company, (ii) has refused, without proper reason, to perform his duties, (iii)
has materially breached any provision of this Agreement, (iv) has willfully and
materially breached a significant corporate policy or code of conduct
established by Company, (v) has willfully engaged in conduct that is materially
injurious to Company or its subsidiaries (monetarily or otherwise), (vi) has
committed an act of fraud, embezzlement, or breach of a fiduciary duty to
Company or an affiliate of Company (including the unauthorized disclosure of
material confidential or proprietary information of the Company or an
affiliate), (vii) has been convicted of (or pleaded no contest to) a criminal
act involving fraud, dishonesty, or moral turpitude or any felony, or (viii) has
been convicted for any violation of U.S. or foreign securities laws or has
entered into a cease and desist order with the Securities and Exchange
Commission alleging violation of U.S. or foreign securities laws.
 
 

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(e)  “Change of Control” shall mean a “Change in Control,” as defined under the
Incentive Plan as in effect on the Effective Date.
 
(f)  “Change of Control Period” shall mean, with respect to a Change of Control,
the one-year period beginning on the date upon which such Change of Control
occurs.
 
(g)  “Code” shall mean the Internal Revenue Code of 1986, as amended.
 
(h)  “Compensation Committee” shall mean the Compensation and Nominating
Committee of the Board.
 
(i)  “Disability” shall mean that, as a result of Executive’s incapacity due to
physical or mental illness, Executive shall have been absent from the full-time
performance of his duties for six consecutive months and shall not have returned
to full-time performance of his duties within 30 days after written notice of
termination is given to Executive by Company (provided, however, that such
notice may not be given prior to 30 days before the expiration of such six-month
period).
 
(j)  “Good Reason” shall mean the occurrence of any one or more of the
following:
 
(i)  a diminution in Executive’s Annual Base Salary not in accordance with
Section 4.1;
 
(ii)  a material diminution in Executive’s authority, duties, or
responsibilities from those applicable to him as of the Effective Date,
including a material change in the reporting structure so that Executive reports
to someone other than the Board;
 
(iii)  a material change in the geographic location at which Executive must
perform services, which for purposes of this Agreement includes only Company
requiring Executive to involuntarily relocate the geographic location of
Executive’s principal place of employment by more than 10 miles from Houston,
Texas; or
 
(iv)  a material breach by Company of any provision of this Agreement
(including, without limitation, the requirements of paragraphs 2.2, 4.2, or 4.3
of this Agreement).
 
Notwithstanding the foregoing provisions of this Section 1.1(j) or any other
provision in this Agreement to the contrary, any assertion by Executive of a
termination of employment for “Good Reason” shall not be effective unless all of
the following conditions are satisfied: (1) any condition described in clauses
(i) through (iv)  of this Section 1.1(j) giving rise to Executive’s termination
of employment must have arisen without Executive’s consent; (2) Executive must
provide written notice to Company of such condition in accordance with Section
9.3 within 30 days of the initial existence of the condition; (3) the condition
specified in such notice must remain uncorrected for a period of 30 days
following receipt of such notice by Company; and (4) the date of Executive’s
termination of employment must occur within one year following the initial
existence of the condition specified in such notice.
 
 
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(k)  “Incentive Plan” shall mean the Petro Resources 2006 Stock Incentive Plan.
 
(l)  “Involuntary Termination” shall mean any termination of Executive’s
employment with Company which:
 
(i)  does not result from a resignation by Executive (other than a resignation
pursuant to clause (ii) of this Section 1.1(l)); or
 
(ii)  results from a resignation by Executive for Good Reason;
 
provided, however, the term “Involuntary Termination” shall not include a
termination for Cause or any termination as a result of death or Disability.
 
(m)  “Payment Date” shall mean the later of (i) the date that is 30 days after
Executive’s termination of employment with Company or (ii) the date upon which
the Release described in Section 5.6 becomes irrevocable by Executive.
 
1.2  Interpretations.  In this Agreement, unless a clear contrary intention
appears, (a) the words “herein,” “hereof,” “hereunder,” and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, or other subdivision, (b) reference to any Article or Section
means such Article or Section hereof, (c) the word “including” (and with
correlative meaning, “include”) means including, without limiting the generality
of any description preceding such term, and (d) where any provision of this
Agreement refers to action to be taken by either party, or which such party is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such party.
 
ARTICLE II

 
EMPLOYMENT AND DUTIES
 
2.1  Employment.  Effective as of the Effective Date and continuing for the
period of time set forth in Section 3.1 of this Agreement, Executive’s
employment by Company shall be subject to the terms and conditions of this
Agreement.
 
2.2  Positions.  From and after the Effective Date, Company shall employ
Executive in the positions of Executive Vice President and Chief Financial
Officer of the Company or in such other position or positions as the parties
mutually may agree.
 
2.3  Duties and Services.  Executive agrees to serve in the positions referred
to in Section 2.2 and to perform diligently and to the best of his abilities the
duties and services appertaining to such offices, as well as such additional
duties and services appropriate to such offices which the parties mutually may
agree upon from time to time.  Executive also agrees to serve, if elected, as an
officer or director of any wholly-owned subsidiary or affiliate of Company so
long as such service is commensurate with Executive’s duties and
responsibilities to Company.  Executive’s employment shall also be subject to
the policies maintained and established by Company that are of general
applicability to Company’s executive employees, as such policies may be amended
from time to time.
 
 
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2.4  Other Interests.  Executive agrees, during the period of his employment by
Company, to devote substantially all of his business time, energy, and best
efforts to the business and affairs of Company and its affiliates and not to
engage, directly or indirectly, in any other business or businesses, whether or
not similar to that of Company, except as herein permitted or with the consent
of the Board.  The foregoing notwithstanding, the parties recognize and agree
that Executive may engage in passive personal investment and charitable
activities that do not conflict with the business and affairs of Company or
interfere with Executive’s performance of his duties hereunder, which shall be
at the sole determination of the Board.  The Company acknowledges that Executive
has disclosed to the Company Executive’s membership on the board of directors of
Tremisis Energy Acquisition II Corp. and Help Worldwide, Inc. and Executive’s
equity interest in Gruy Petroleum Management Co. LLC and Perugia Advisors,
Inc.   Company’s acknowledgement of the foregoing outside activities shall not
relieve Executive of his obligation to ensure that such activities do not
conflict with the business and affairs of Company or interfere with Executive’s
performance of his duties hereunder.
 
2.5  Duty of Loyalty.  Executive acknowledges and agrees that Executive owes a
fiduciary duty of loyalty to act at all times in the best interests of
Company.  In keeping with such duty, Executive shall make full disclosure to
Company of all business opportunities pertaining to Company’s business and shall
not appropriate for Executive’s own benefit, or appropriate for the benefit of
any third party, business opportunities concerning Company’s business.
 
2.6  Place of Employment.  Executive’s place of employment hereunder shall be at
Company’s executive offices in the greater Houston, Texas metropolitan area.
 
ARTICLE III

 
TERM AND TERMINATION OF EMPLOYMENT
 
3.1  Term.  Unless sooner terminated pursuant to other provisions hereof,
Company agrees to employ Executive for the period beginning on the Effective
Date and ending on the third anniversary of the Effective Date.
 
3.2  Company’s Right to Terminate.  Notwithstanding the provisions of Section
3.1, Company shall have the right to terminate Executive’s employment under this
Agreement at any time for any of the following reasons:
 
(a)  upon Executive’s death;
 
(b)  upon Executive’s Disability;
 
(c)  for Cause; or
 
 
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(d)  at any time, for any other reason whatsoever, in the sole discretion of the
Board.
 
3.3  Executive’s Right to Terminate.  Notwithstanding the provisions of Section
3.1, Executive shall have the right to terminate his employment under this
Agreement for any of the following reasons:
 
(a)  for Good Reason; or
 
(b)  at any time for any other reason whatsoever, in the sole discretion of
Executive.
 
3.4  Notice of Termination.  If Company desires to terminate Executive’s
employment hereunder at any time prior to expiration of the term of employment
as provided in Section 3.1, it shall do so by giving a 30-day written notice to
Executive that it has elected to terminate Executive’s employment hereunder and
stating the effective date and reason for such termination, provided that no
such action shall alter or amend any other provisions hereof or rights arising
hereunder.  If Executive desires to terminate his employment hereunder at any
time prior to expiration of the term of employment as provided in Section 3.1,
he shall do so by giving a 30-day written notice to Company that he has elected
to terminate his employment hereunder and stating the effective date and reason
for such termination, provided that no such action shall alter or amend any
other provisions hereof or rights arising hereunder.
 
3.5  Deemed Resignations.  Unless otherwise agreed to in writing by Company and
Executive prior to the termination of Executive’s employment, any termination of
Executive’s employment shall constitute an automatic resignation of Executive as
an officer of Company and each affiliate of Company and an automatic resignation
of Executive from the Board (if applicable) and from the board of directors or
similar governing body of any affiliate of Company and from the board of
directors or similar governing body of any corporation, limited liability
entity, or other entity in which Company or any affiliate holds an equity
interest and with respect to which board or similar governing body Executive
serves as Company’s or such affiliate’s designee or other representative.
 
3.6  Meaning of Termination of Employment.  For all purposes of this Agreement,
Executive shall be considered to have terminated employment with Company when
Executive incurs a “separation from service” with Company within the meaning of
Section 409A(a)(2)(A)(i) of the Code and applicable administrative guidance
issued thereunder.
 
ARTICLE IV

 
COMPENSATION AND BENEFITS
 
4.1  Base Salary.  During the period of this Agreement, Executive shall receive
a minimum base salary of $180,000 per annum during the first full year of
employment, $200,000 per annum during the second full year of employment, and
$220,000 per annum during the third full year of employment.  Executive’s base
salary shall be reviewed by the Compensation Committee on an annual basis, and,
in the sole discretion of the Compensation Committee, such base salary may be
increased, but not decreased (except with the prior written consent of
Executive), effective as of any date determined by the Compensation
Committee.  Executive’s base salary shall be paid in equal installments in
accordance with Company’s standard policy regarding payment of compensation to
executives but no less frequently than monthly.
 
 
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4.2  Stock Compensation.  Executive shall receive a grant of 1,250,000 shares of
common stock of the Company pursuant to the terms and subject to the conditions
of a Restricted Stock Agreement of even date herewith between Executive and
Company.
 
4.3  Option Compensation.  Executive shall receive a grant of 1,250,000
non-statutory stock options, at an exercise equal to the volume weighted average
price of the Company’s common stock on the Effective Date, pursuant to the terms
and subject to the conditions of a Stock Option Agreement of even date herewith
between Executive and Company.
 
4.4  Bonuses and Long-Term Incentive.
 
(a)  Annual Bonus.  Executive shall be eligible for an annual bonus of up to
100% of Executive’s Base Salary based on performance criteria set by the
Compensation Committee and to otherwise participate in Company’s annual bonus
plan or plans applicable to Executive, all as approved from time to time by the
Compensation Committee in amounts to be determined by the Compensation Committee
based upon criteria established by the Compensation Committee.
 
(b)  Long-Term Incentive Plan.  Subject to the sole discretion of the
Compensation Committee, Executive shall also be eligible for participation in
the Incentive Plan or such other long-term incentive arrangement of Company as
may from time to time be made available to other executive officers of
Company.  Any awards made under the Incentive Plan or such other arrangements
shall be governed by Section 5.9 herein.
 
4.5  Other Perquisites.  During his employment hereunder, Executive shall be
afforded the following benefits as incidences of his employment:
 
(a)  Business and Entertainment Expenses - Subject to Company’s standard
policies and procedures with respect to expense reimbursement as applied to its
executive employees generally, Company shall reimburse Executive for, or pay on
behalf of Executive, reasonable and appropriate expenses incurred by Executive
for business-related purposes, including dues and fees to industry and
professional organizations and costs of entertainment and business development.
 
(b)  Vacation - During his employment hereunder, Executive shall be entitled to
4 weeks of paid vacation each calendar year (or a pro rata portion of such
four-week vacation period for any partial year) and to all holidays provided to
executives of Company generally.
 
(c)  Other Company Benefits - Executive and, to the extent applicable,
Executive’s spouse, dependents, and beneficiaries, shall be allowed to
participate in all benefits, plans, and programs, including improvements or
modifications of the same, which are now, or may hereafter be, available to
other executive employees of Company.  Such benefits, plans, and programs shall
include, without limitation, any profit sharing plan, thrift plan, health
insurance or health care plan, life insurance, disability insurance, pension
plan, supplemental retirement plan, vacation and sick leave plan, and the like
which may be maintained by Company. Company shall not, however, by reason of
this paragraph be obligated to institute, maintain, or refrain from changing,
amending, or discontinuing, any such benefit plan or program, so long as such
changes are similarly applicable to executive employees generally.
 
 
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ARTICLE V

 
EFFECT OF TERMINATION ON COMPENSATION; ADDITIONAL PAYMENTS
 
5.1  Termination Other Than an Involuntary Termination.  If Executive’s
employment hereunder shall terminate upon expiration of the term provided in
Section 3.1 hereof or if Executive’s employment hereunder shall terminate for
any other reason except those described in Sections 5.2 and 5.3, then Company
shall continue to provide all compensation and benefits to Executive hereunder
until the date of such termination of employment, and such compensation and
benefits shall terminate contemporaneously with such termination of employment.
 
5.2  Involuntary Termination Other Than During a Change of Control
Period.  Subject to the provisions of Sections 5.6 and 5.7 hereof, if
Executive’s employment by Company or any successor thereto shall be subject to
an Involuntary Termination which occurs prior to the date that Change of Control
Period begins or after the expiration of a Change of Control Period, then
Company shall, as additional compensation for services rendered to Company
(including its subsidiaries), pay to Executive the following amounts and take
the following actions:
 
(a)  Pay Executive a lump sum cash payment in an amount equal to Executive’s
Annual Base Salary on or before the Payment Date.
 
(b)  During the portion, if any, of the 12-month period commencing on the date
of such Involuntary Termination that Executive is eligible to elect and elects
to continue coverage for himself and his eligible dependents under Company’s or
a subsidiary’s group health plans, as applicable, under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, and/or Sections 601 through 608
of the Employee Retirement Income Security Act of 1974, as amended, Company
shall promptly reimburse Executive on a monthly basis for the difference between
the amount Executive pays to effect and continue such coverage and the employee
contribution amount that active senior executive employees of Company pay for
the same or similar coverage under such group health plans; provided, however,
that such reimbursement shall cease to be effective if and to the extent
Executive becomes eligible to receive medical and/or dental coverage from a
subsequent employer (and any such eligibility shall be promptly reported to
Company by Executive).
 
5.3  Involuntary Termination During a Change of Control Period.  Subject to the
provisions of Sections 5.6 and 5.7, if Executive’s employment by Company or any
successor thereto shall be subject to an Involuntary Termination during a Change
of Control Period, then Company shall, as additional compensation for services
rendered to Company (including its subsidiaries), pay to Executive the following
amounts and take the following actions:
 
 
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(a)  Pay Executive a lump sum cash payment in an amount equal to two times
Executive’s Annual Base Salary on or before the Payment Date.
 
(b)  During the portion, if any, of the 12-month period commencing on the date
of such Involuntary Termination that Executive is eligible to elect and elects
to continue coverage for himself and his eligible dependents under Company’s or
a subsidiary’s group health plans, as applicable, under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, and/or Sections 601 through 608
of the Employee Retirement Income Security Act of 1974, as amended, Company
shall promptly reimburse Executive on a monthly basis for the difference between
the amount Executive pays to effect and continue such coverage and the employee
contribution amount that active senior executive employees of Company pay for
the same or similar coverage under such group health plans; provided, however,
that such reimbursement shall cease to be effective if and to the extent
Executive becomes eligible to receive medical and/or dental coverage from a
subsequent employer (and any such eligibility shall be promptly reported to
Company by Executive).
 
5.4  Interest on Late Payments.  If any payment provided for in Section 5.2 or
5.3 hereof is not made when due (applying the deferred payment date provided for
in Section 5.7 as the due date, if applicable) then Company shall pay to
Executive interest on the amount payable from the date that such payment should
have been made under such Section until such payment is made, which interest
shall be calculated at the prime or base rate of interest announced by JPMorgan
Chase Bank (or any successor thereto) at its principal office in New York and
shall change when and as any such change in such prime or base rate shall be
announced by such bank.
 
5.5  Parachute Payments.  Notwithstanding anything to the contrary in this
Agreement, in the event that any payment, distribution, or provision of a
benefit by Company to or for the benefit of Executive, whether paid or payable,
distributed or distributable, or provided or to be provided pursuant to the
terms of this Agreement or otherwise (a “Payment”), would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest or
penalties, are hereinafter collectively referred to as the “Excise Tax”),
Company shall pay to Executive on or as soon as administratively practicable
following the day on which the Excise Tax is remitted by or on behalf of
Executive (but no later than the end of the taxable year following the year in
which the Excise Tax is remitted) an additional payment (a “Gross-up Payment”)
in an amount such that after payment by Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any Excise
Tax imposed on any Gross-up Payment, Executive retains an amount of the Gross-up
Payment equal to the Excise Tax imposed upon the Payments.  Company and
Executive shall make an initial determination as to whether a Gross-up Payment
is required and the amount of any such Gross-up Payment.  Executive shall notify
Company in writing of any claim by the Internal Revenue Service which, if
successful, would require Company to make a Gross-up Payment (or a Gross-up
Payment in excess of that, if any, initially determined by Company and
Executive) within ten days of the receipt of such claim.  Company shall notify
Executive in writing at least ten days prior to the due date of any response
required with respect to such claim if it plans to contest the claim.  If
Company decides to contest such claim, Executive shall cooperate fully with
Company in such action; provided, however, Company shall bear and pay directly
or indirectly all costs and expenses (including additional interest and
penalties) incurred in connection with such action and shall indemnify and hold
Executive harmless, on an after-tax basis, for any Excise Tax or income tax,
including interest and penalties with respect thereto, imposed as a result of
Company’s action.  If, as a result of Company’s action with respect to a claim,
Executive receives a refund of any amount paid by Company with respect to such
claim, Executive shall promptly pay such refund to Company.  If Company fails to
timely notify Executive whether it will contest such claim or Company determines
not to contest such claim, then Company shall immediately pay to Executive the
portion of such claim, if any, which it has not previously paid to Executive.
 
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5.6  Release and Full Settlement.  As a condition to the receipt of any
severance compensation and benefits under this Agreement, Executive must first
execute a release and agreement, in a form reasonably satisfactory to Company,
which (a) shall release and discharge Company and its affiliates, and their
officers, directors, employees, and agents, from any and all claims or causes of
action of any kind or character, including all claims or causes of action
arising out of Executive’s employment with Company or its affiliates or the
termination of such employment, and (b) must be effective and irrevocable within
55 days after the termination of Executive’s employment.  If Executive is
entitled to and receives the benefits provided hereunder, performance of the
obligations of Company hereunder will constitute full settlement of all claims
that Executive might otherwise assert against Company on account of Executive’s
termination of employment.
 
5.7  Payments Subject to Section 409A of the Code.  Notwithstanding the
foregoing provisions of this Article 5, if the payment of any severance
compensation or severance benefits under this Agreement would be subject to
additional taxes and interest under Section 409A of the Code because the timing
of such payment is not delayed as provided in Section 409A(a)(2)(B) of the Code,
then any such payments that Executive (or Executive’s estate) would otherwise be
entitled to during the first six months following the date of Executive’s
termination of employment shall be accumulated and paid on the date that is six
months after the date of Executive’s termination of employment (or if such
payment date does not fall on a business day of Company, the next following
business day of Company), or such earlier date upon which such amount can be
paid under Section 409A of the Code without being subject to such additional
taxes and interest.  Executive hereby agrees to be bound by Company’s
determination of its “specified employees” (as such term is defined in Section
409A of the Code) in accordance with any of the methods permitted under the
regulations issued under Section 409A of the Code.
 
5.8  Liquidated Damages.  In light of the difficulties in estimating the damages
for an early termination of Executive’s employment under this Agreement, Company
and Executive hereby agree that the payments, if any, to be received by
Executive pursuant to this Article 5 shall be received by Executive as
liquidated damages.
 
5.9  Other Benefits.  This Agreement governs the rights and obligations of
Executive and Company with respect to Executive’s base salary and certain
perquisites of employment.  Except as expressly provided herein, Executive’s
rights and obligations both during the term of his employment and thereafter
with respect to stock options, restricted stock, incentive and deferred
compensation, life insurance policies insuring the life of Executive, and other
benefits under the plans and programs maintained by Company shall be governed by
the separate agreements, plans and other documents and instruments governing
such matters.
 
 
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ARTICLE VI
 
PROTECTION OF CONFIDENTIAL INFORMATION
 
6.1  Disclosure to and Property of Company.
 
(a)  Confidential Information. All information, designs, ideas, concepts,
improvements, product developments, discoveries, and inventions, whether
patentable or not, that are conceived, made, developed, or acquired by
Executive, individually or in conjunction with others, during the period of
Executive’s employment by Company (whether during business hours or otherwise
and whether on Company’s premises or otherwise) that relate to Company’s (or any
of its affiliates’) business, trade secrets, products, or services (including,
without limitation, all such information relating to corporate opportunities,
product specification, compositions, manufacturing and distribution methods and
processes, research, forms, policies, procedures, financial and sales data,
pricing terms, costs, evaluations, opinions, interpretations, acquisition
prospects, employee lists, property lists, the identity of customers or their
requirements, the identity of key contacts within the customer’s organizations
or within the organization of acquisition prospects, marketing and merchandising
techniques, business plans, negotiation and documentation strategies, computer
software or programs, computer software and database technologies, prospective
names, and marks (collectively, “Confidential Information”) shall be disclosed
to Company and are and shall be the sole and exclusive property of Company (or
its affiliates).
 
(b)  Work Product. Moreover, all documents, videotapes, written presentations,
brochures, drawings, memoranda, notes, records, files, correspondence, manuals,
models, specifications, computer programs, E-mail, voice mail, electronic
databases, maps, drawings, architectural renditions, proposals, and all other
writings or materials of any type embodying any of such information, ideas,
concepts, improvements, discoveries, inventions, and other similar forms of
expression (including but not limited to (i) maps, data, and reports that relate
to results of exploration, drilling, drill cores, cuttings, and other samples
relating to the production and operation of Company’s oil and gas properties
(whether owned or prospective) and (ii) title opinions; abstracts of title;
land, accounting, production, or operating expense records; engineering,
geological, or geophysical data; development plans and permits; or any other
material or writing of whatever kind embodying any other information relating to
the production and operation of Company’s oil and gas properties (whether owned
or prospective)) (collectively, “Work Product”) are and shall be the sole and
exclusive property of Company (or its affiliates).
 
 
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Upon Executive’s termination of employment with Company, for any reason,
Executive promptly shall deliver such Confidential Information and Work Product,
and all copies thereof, to Company.
 
6.2  Disclosure to Executive.  Company has and will disclose to Executive, or
place Executive in a position to have access to or develop, Confidential
Information and Work Product of Company (or its affiliates); and/or has and will
entrust Executive with business opportunities of Company (or its affiliates);
and/or has and will place Executive in a position to develop business good will
on behalf of Company (or its affiliates).  Executive agrees to preserve and
protect the confidentiality of all Confidential Information or Work Product of
Company (or its affiliates).
 
6.3  No Unauthorized Use or Disclosure.  Executive agrees that he will not, at
any time during or after Executive’s employment by Company, make any
unauthorized disclosure of Confidential Information or Work Product of the
Company (or its affiliates), and will not make any use thereof, except in the
carrying out of Executive’s responsibilities during the course of Executive’s
employment with Company.  Executive shall have no obligation hereunder to keep
confidential any Confidential Information if and to the extent disclosure
thereof is specifically required by law; provided, however, that in the event
disclosure is required by applicable law, Executive shall provide Company with
prompt notice of such requirement prior to making any such disclosure, so that
Company may seek an appropriate protective order.  At the request of Company at
any time, Executive agrees to deliver to Company all Confidential Information
that he may possess or control.  Executive agrees that all Confidential
Information of Company (whether now or hereafter existing) conceived,
discovered, or made by him during the period of Executive’s employment by
Company exclusively belongs to Company (and not to Executive), and Executive
will promptly disclose such Confidential Information to Company and perform all
actions reasonably requested by Company to establish and confirm such exclusive
ownership.  Affiliates of Company shall be third party beneficiaries of
Executive’s obligations under this Article 6.  As a result of Executive’s
employment by Company, Executive may also from time to time have access to, or
knowledge of, Confidential Information or Work Product of third parties, such as
customers, suppliers, partners, joint venturers, and the like, of Company and
its affiliates.  Executive also agrees to preserve and protect the
confidentiality of such third party Confidential Information and Work Product to
the same extent, and on the same basis, as Company’s Confidential Information
and Work Product.
 
6.4  Ownership by Company.  If, during Executive’s employment by Company,
Executive creates any work of authorship fixed in any tangible medium of
expression that is the subject matter of copyright (such as videotapes, written
presentations, or acquisitions, computer programs, E-mail, voice mail,
electronic databases, drawings, maps, architectural renditions, models, manuals,
brochures, or the like) relating to Company’s business, products, or services,
whether such work is created solely by Executive or jointly with others (whether
during business hours or otherwise and whether on Company’s premises or
otherwise), including any Work Product, Company shall be deemed the author of
such work if the work is prepared by Executive in the scope of Executive’s
employment; or, if the work is not prepared by Executive within the scope of
Executive’s employment but is specially ordered by Company as a contribution to
a collective work, as a part of a motion picture or other audiovisual work, as a
translation, as a supplementary work, as a compilation, or as an instructional
text, then the work shall be considered to be work made for hire and Company
shall be the author of the work.  If such work is neither prepared by Executive
within the scope of Executive’s employment nor a work specially ordered that is
deemed to be a work made for hire, then Executive hereby agrees to assign, and
by these presents does assign, to Company all of Executive’s worldwide right,
title, and interest in and to such work and all rights of copyright therein.
 
 
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6.5  Assistance by Executive.  During the period of Executive’s employment by
Company and thereafter, Executive shall assist Company and its nominee, at any
time, in the protection of Company’s (or its affiliates’) worldwide right,
title, and interest in and to Work Product and the execution of all formal
assignment documents requested by Company or its nominee and the execution of
all lawful oaths and applications for patents and registration of copyright in
the United States and foreign countries.
 
6.6  Remedies.  Executive acknowledges that money damages would not be
sufficient remedy for any breach of this Article 6 by Executive, and Company or
its affiliates shall be entitled to enforce the provisions of this Article 6 by
terminating payments then owing to Executive under this Agreement or otherwise
and to specific performance and injunctive relief as remedies for such breach or
any threatened breach.  Such remedies shall not be deemed the exclusive remedies
for a breach of this Article 6 but shall be in addition to all remedies
available at law or in equity, including the recovery of damages from Executive
and his agents.
 
ARTICLE VII

 
NON-COMPETITION AND NON-SOLICITATION OBLIGATIONS
 
7.1  General.  As part of the consideration for Company’s employment of
Executive and the compensation and benefits that may be paid to Executive
hereunder; to protect the trade secrets and Confidential Information of Company
and its affiliates that will in the future be disclosed or entrusted to
Executive, the business good will of Company and its affiliates that will in the
future be developed by Executive, or the business opportunities that will in the
future be disclosed or entrusted to Executive by Company or its affiliates; and
as an additional incentive for Company to enter into this Agreement, Company and
Executive agree to the provisions of this Article 7.  Executive agrees that
during his employment with Company and for a period of six months following the
termination of Executive’s employment with Company for any reason (the
“Non-Compete Period”), Executive shall not, without the prior written consent of
Company:
 
(a)  directly or indirectly participate in the ownership, management, operation,
or control of, or be connected as an officer, employee, partner, director,
consultant, contractor, or otherwise with, or have any financial interest in or
aid or assist anyone else in the conduct of, any oil and gas exploration or
production business in any of the Business Territories of the Company (a
“Competitive Operation”); provided, however, that this provision shall not
preclude Executive after the termination of his employment with Company from (i)
owning less than 5% of the equity securities of any publicly held Competitive
Operation so long as Executive does not serve as an employee, officer, director,
or consultant to such business, (ii) being engaged as an investment banker
and/or financial advisor to oil and gas exploration or production business
entities, or (iii) being employed by a commercial bank or investment management
company;
 
 
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(b)  call upon any prospective acquisition candidate on Executive’s own behalf
or on behalf of any Competitive Operation, which candidate is a Competitive
Operation or which candidate was, to Executive’s knowledge after due inquiry,
either called upon by Company or an affiliate or for which Company or an
affiliate made an acquisition analysis, for the purpose of acquiring such
entity; or
 
(c)  directly or indirectly, either as principal, agent, independent contractor,
consultant, director, officer, employee, employer, advisor, member, stockholder,
partner, or in any other individual or representative capacity whatsoever,
either for his own benefit or for the benefit of any other person or entity
either (i) hire, contract, or solicit or attempt any of the foregoing with
respect to hiring any then present employee (or person who was an employee at
any time during the six-month period prior to termination of Executive’s
employment) of Company or any affiliate, or (ii) induce or otherwise counsel,
advise, or encourage any employee of Company or any affiliate to leave the
employment of Company or any affiliate.
 
7.2  Non-Disparagement. During Executive’s employment with Company and following
any termination of employment with Company, Executive and Company mutually agree
not to disparage, either orally or in writing, Executive, Company, or any of
affiliates’ business, products, services, or practices, or any of Company’s or
its affiliates’ directors, officers, agents, representatives, stockholders,
partners, members, employees, or affiliates.
 
7.3  Remedies.  Executive acknowledges that money damages would not be
sufficient remedy for any breach of this Article 7 by Executive, and Company or
its affiliates shall be entitled to enforce the provisions of this Article 7 by
terminating payments then owing to Executive under this Agreement or otherwise
and to specific performance and injunctive relief as remedies for such breach or
any threatened breach.  Such remedies shall not be deemed the exclusive remedies
for a breach of this Article 7 but shall be in addition to all remedies
available at law or in equity, including the recovery of damages from Executive
and his agents.
 
7.4  Reformation.  Company and Executive agree that the foregoing restrictions
are reasonable under the circumstances and that any breach of the covenants
contained in this Article 7 would cause irreparable injury to Company.  If any
of the aforesaid restrictions are found by a court of competent jurisdiction to
be unreasonable, or overly broad as to geographic area or time, or otherwise
unenforceable, the parties intend for the restrictions therein set forth to be
modified by the court making such determination so as to be reasonable and
enforceable and, as so modified, to be fully enforced.  By agreeing to this
contractual modification prospectively at this time, Company and Executive
intend to make this provision enforceable under the law or laws of all
applicable States so that the entire agreement not to compete and this Agreement
as prospectively modified shall remain in full force and effect and shall not be
rendered void or illegal.  Such modification shall not affect the payments made
to Executive under this Agreement.
 
 
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ARTICLE VIII
 
DISPUTE RESOLUTION
 
8.1  General.  Executive and the Company explicitly recognize that no provision
of this Article VIII shall prevent either party from seeking to resolve any
dispute relating to Article VI or Article VII of this Agreement in a court of
law.
 
8.2  Negotiation.  The parties shall attempt in good faith to resolve any
dispute arising out of or relating to this Agreement promptly by negotiations
between Executive and an executive officer of Company who has authority to
settle the controversy.  Any party may give the other party written notice of
any dispute not resolved in the normal course of business.  Within ten days
after the effective date of such notice, Executive and an executive officer of
Company shall meet at a mutually acceptable time and place within the Houston,
Texas metropolitan area, and thereafter as often as they reasonably deem
necessary, to exchange relevant information and to attempt to resolve the
dispute.  If the matter has not been resolved within 30 days of the disputing
party’s notice, or if the parties fail to meet within ten days, either party may
initiate arbitration of the controversy or claim as provided in Section 8.3
below.  If a negotiator intends to be accompanied at a meeting by an attorney,
the other negotiator shall be given at least three business days’ notice of such
intention and may also be accompanied by an attorney.  All negotiations pursuant
to this Section 8.2 shall be treated as compromise and settlement negotiations
for the purposes of the federal and state rules of evidence and procedure.
 
8.3  Arbitration.  Company and Executive agree that after efforts to negotiate
any dispute in accordance with Section 8.2 have failed, then either party may by
written notice (the “Notice”) demand arbitration of the dispute as set out
below, and each party hereto expressly agrees to submit to, and be bound by,
such arbitration.
 
(a)  Each party will, within ten business days of the Notice, nominate an
arbitrator, who shall be a non-neutral arbitrator. Each nominated arbitrator
must be someone experienced in dispute resolution and of good character without
moral turpitude and not within the employ or direct or indirect influence of the
nominating party.  The two nominated arbitrators will, within ten business days
of nomination, agree upon a third arbitrator, who shall be neutral. If the two
appointed arbitrators cannot agree on a third arbitrator within such period, the
parties may seek such an appointment through any permitted court proceeding or
by the American Arbitration Association (“AAA”).  The three arbitrators will set
the rules and timing of the arbitration, but will generally follow the rules of
the AAA and this Agreement where same are applicable and shall provide for a
reasoned opinion.
 
(b)  The arbitration hearing will in no event take place more than 180 days
after the appointment of the third arbitrator.
 
(c)  The arbitration will take place in Houston, Texas unless otherwise
unanimously agreed to by the parties.
 
 
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(d)  The results of the arbitration and the decision of the arbitrators will be
final and binding on the parties, and each party agrees and acknowledges that
these results shall be enforceable in a court of law.
 
(e)  All administrative costs and expenses of the mediation and arbitration
shall be borne equally by the Company and Executive during the pendency of the
proceedings.  Such costs and expenses do not include attorney’s fees, expert
witness fees or other party generated expenses.  Upon the conclusion of the
proceedings, the prevailing party shall be entitled to recover reasonable and
necessary attorneys’ fees, expert witness fees, and costs and expenses of
arbitration.
 
ARTICLE IX

 
MISCELLANEOUS
 
9.1  Indemnification.  Company shall continue to indemnify Executive following
any termination of this Agreement to the fullest extent permitted by applicable
law consistent with the Articles of Incorporation and By-Laws of Company in
effect as of the date of the termination with respect to Executive’s sole,
joint, or concurrent negligence and any acts of or omissions he may have
committed during the period during which he was an officer, director, and/or
employee of (a) Company, (b) any subsidiary thereof for which he served as an
officer, director, or employee at the request of Company, or (c) any successor
thereto; provided, however, Company shall have no obligation to indemnify
Executive for any claim based on facts or circumstances that served or could
have served as grounds for termination of Executive’s employment under this
Agreement by the Company for Cause.  Any reimbursement of reasonable attorneys’
fees and disbursements required under this Section 9.1 shall be made within
thirty days of the date that Executive submits an invoice for payment or
reimbursement.  In the event Company and Executive shall have entered into a
separate indemnity agreement, the terms of such agreement, and not this Section
9.1, shall govern Company’s obligations to indemnify Executive following the
termination of this Agreement.
 
9.2  Payment Obligations Absolute.  Except as specifically provided in Sections
6.6 and 7.4, Company’s obligation to pay (or cause one of its subsidiaries to
pay) Executive the amounts and to make the arrangements provided herein shall be
absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense,
or other right which Company (including its subsidiaries) may have against
Executive or anyone else.  All amounts payable by Company (including its
subsidiaries hereunder) shall be paid without notice or demand.  Executive shall
not be obligated to seek other employment in mitigation of the amounts payable
or arrangements made under any provision of this Agreement, and, except as
provided in Sections 5.2(b) and 5.3(b) hereof, the obtaining of any such other
employment shall in no event effect any reduction of Company’s obligations to
make (or cause to be made) the payments and arrangements required to be made
under this Agreement.
 
 
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9.3  Notices.  Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
set forth on the signature pages attached hereto prior to 3:30 p.m. (Houston
time) on  any day except Saturday, Sunday and any day which shall be a federal
legal holiday in the United States (“Business Day”), (b) the next Business Day
after the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached
hereto on a day that is not a Business Day or later than 3:30 p.m. (Houston
time) on any Business Day, (c) the 2nd Business Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
upon actual receipt by the party to whom such notice is required to be
given.  The address for such notices and communications shall be as set forth on
the signature pages attached hereto.  All notices and demands to Executive or
the Company may be given to them at the following addresses:
 
 
If to Executive to:
Ronald D. Ormand
11622 Monica Lane
Houston, Texas  77024
 
  If to Company:
Petro Resources Corporation
777 Post Oak Blvd., Suite 910
Houston, Texas  77056

 
Such parties may designate in writing from time to time such other place or
places that such notices and demands may be given.
 
9.4  Applicable Law; Submission to Jurisdiction.
 
(a)  This Agreement is entered into under, and shall be governed for all
purposes by, the laws of the State of Texas, without regard to conflict of law
principals thereof.
 
(b)  With respect to any claim or dispute related to or arising under this
Agreement, the parties hereto hereby consent to the exclusive jurisdiction,
forum, and venue of the state or federal (to the extent federal jurisdiction
exists) courts located in Harris County in the State of Texas.
 
9.5  No Waiver.  No failure by either party hereto at any time to give notice of
any breach by the other party of or to require compliance with, any condition or
provision of this Agreement shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
 
9.6  Severability.  Any provision in this Agreement which is prohibited or
unenforceable in any jurisdiction by reason of applicable law shall, as to such
jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating or affecting the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
 
 
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9.7  Counterparts.  This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which together will
constitute one and the same Agreement.
 
9.8  Withholding of Taxes and Other Employee Deductions.  Company may withhold
from any benefits and payments made pursuant to this Agreement all federal,
state, city, and other taxes as may be required pursuant to any law or
governmental regulation or ruling and all other customary employee deductions
made with respect to Company’s employees generally.
 
9.9  Headings.  The Section headings have been inserted for purposes of
convenience and shall not be used for interpretive purposes.
 
9.10  Gender and Plurals.  Wherever the context so requires, the masculine
gender includes the feminine or neuter, and the singular number includes the
plural and conversely.
 
9.11  Assignment.  This Agreement shall be binding upon and inure to the benefit
of Company and any successor of Company, by merger or otherwise.  This Agreement
shall also be binding upon and inure to the benefit of Executive and his heirs,
representatives and assigns.  If Executive shall die prior to full payment of
amounts due pursuant to this Agreement, such amounts shall continue to be
payable pursuant to the terms of this Agreement.  Executive shall not have any
right to pledge, hypothecate, anticipate, or assign any portion of this
Agreement or any of the rights hereunder, except by will or the laws of descent
and distribution.
 
9.12  Term.  This Agreement has a term co-extensive with the term of employment
provided in Section 3.1.  Termination of this Agreement shall not affect any
right or obligation of any party which is accrued or vested prior to such
termination.  The provisions of Section 3.5 and Articles 6 and 7 shall survive
the termination of this Agreement and shall be binding upon Executive and his or
her legal representatives, successors, and assigns following such termination.
 
9.13  Entire Agreement.  This Agreement constitutes the entire agreement of the
parties with regard to the subject matter hereof and contains all the covenants,
promises, representations, warranties, and agreements between the parties with
respect to such subject matter.  Without limiting the scope of the preceding
sentence, all understandings and agreements preceding the date of execution of
this Agreement and relating to the subject matter hereof are hereby null and
void and of no further force and effect, including, without limitation, all
prior employment and severance agreements, if any, by and between Company and
Executive.  Any modification of this Agreement will be effective only if it is
in writing and signed by the party to be charged.
 
9.14  Expenses.  The Company shall reimburse Executive the non-accountable sum
of $2,500 for his legal fees and expenses.  Each party shall otherwise pay all
fees and expenses incurred by such party incident to the negotiation,
preparation and execution of this Agreement.
 
 
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IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of
the date first written above.
 
 

 
“Company”
 
Petro Resources Corporation
a Delaware corporation
 
 
    By:  /s/ Wayne P. Hall       Wayne P. Hall      
Chief Executive Officer
   

 
 
“Executive”
 
Ronald D. Ormand
 
   

/s/ Ronald D. Ormand
   
Ronald D. Ormand
 

 
 
 
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