Exhibit 10.2
HARVEST NATURAL RESOURCES
Stock Option Agreement
          Agreement (this “Agreement”) made at Houston, Texas, USA, as of May 7,
2007, by and between HARVEST NATURAL RESOURCES, INC. (the “Company”) and Keith
L. Head (the “Optionee”).
     1.  Definitions:

  (a)   “BOARD” OR “BOARD OF DIRECTORS” shall mean the Board of Directors of the
Company.     (b)   “CODE” shall mean the Internal Revenue Code of 1986, as
amended from time to time.     (c)   “COMMITTEE” shall mean the Human Resources
Committee of the Board of Directors, or, if there is no Human Resources
Committee, the committee designated by the non-employee members of the Board of
Directors to administer the Company’s long-term incentive plans.     (d)   “FAIR
MARKET VALUE” of Stock shall mean the average of the highest price and the
lowest price at which Stock shall have been sold on the applicable date as
reported by the New York Stock Exchange Composite Transactions. In the event
that the applicable date is a date on which there were no such sales of Stock,
the Fair Market Value of Stock on such date shall be the mean of the average of
the highest price and the lowest price at which Stock shall have been sold on
the last trading day preceding such date.     (e)   “STOCK” shall mean the
common stock of the Company.     (f)   “SUBSIDIARY” shall mean any corporation
or similar legal entity (other than the Company) in which the Company or a
Subsidiary of the Company owns fifty percent (50%) or more of the total combined
voting power of all classes of stock, or such lesser amount of ownership
determined by the Committee.     (g)   “TOTAL DISABILITY” and “TOTALLY DISABLED”
shall normally have such meaning as that defined under the Company’s group
insurance plan covering total disability and determinations of Total Disability
normally shall be made by the insurance company providing such coverage on the
date on which the Employee, whether or not eligible for benefits under such
insurance plan, becomes Totally Disabled. In the absence of such insurance plan
or in the event the individual is a Director or Consultant, the Committee shall
make such determination.

     It is hereby agreed as follows:

 

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  2.   Grant of Option; Consideration. The Company hereby grants to the Optionee
on May 7, 2007, a nonqualified stock option to purchase up to 50,000 shares of
the Company’s Common Stock, par value $0.01 per share (the “Shares”), at an
exercise price of $10.065 per share (the “Option”). The Option granted hereunder
is not intended to constitute an incentive stock option within the meaning of
Section 422 of the Code. The terms of the Option are subject to adjustment in
certain circumstances, as provided in this Agreement.

The Optionee shall be required to pay no consideration for the grant of the
Option, except for his agreement to serve as an employee of the Company or any
Subsidiary and other agreements set forth herein.

  3.   Vesting. Subject to all of the terms and conditions of this Agreement,
including acceleration of vesting in the event of a Change of Control or Total
Disability, the Optionee may purchase up to 16,667 Shares upon exercise of this
Option on or after May 6, 2008, an additional 16,667 Shares upon exercise of
this Option on or after May 6, 2009, and the remaining 16,666 Shares upon
exercise of this Option on or after May 6, 2010.     4.   Term and Termination
of Service. This Option, to the extent it has not been previously exercised,
shall expire at 5:00 p.m. (Central Time) on May 6, 2014 or, if earlier, at 5:00
p.m. (Central Time):

  (i)   on the date 3 months after the Optionee ceases to be an employee of the
Company or any Subsidiary for any reason other than a Change of Control, Total
Disability or death;     (ii)   on the date 12 months after the Optionee ceases
to be an employee of the Company or any Subsidiary by reason of Total
Disability;     (iii)   on the date 12 months after the date of the Optionee’s
death while in the employ of the Company or a Subsidiary or within 3 months
after the termination of such employment; or     (iv)   on the date 12 months
after the Optionee’s termination of employment or service if such employment or
service is terminated within 730 days after the effective date of a Change of
Control.

Except in the case of a termination subject to (ii) above, the Option shall be
exercisable after the date of such termination of Optionee’s service or
employment only to the extent the Option was exercisable at the date of such
termination. In the case of termination subject to (ii) above, any Options that
are not exercisable shall become exercisable effective as of Optionee’s
termination date.
Notwithstanding anything to the contrary in the Agreement, if and for so long as
Optionee is subject to an Employment Agreement with the Company, then the terms
of the Employment Agreement will govern the early expiration of the Option
including,

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without limitation, vesting and expiration dates. In the event of any conflict
between the Employment Agreement and this Agreement, the terms of the Employment
Agreement shall govern.

  5.   Option Exercise. The Option may be exercised in whole or in part (to the
extent then exercisable) by contacting the Company’s designated agent for
processing Option exercises. An Option exercise must be accompanied by payment
in full of the exercise price (i) in cash, (ii) through the withholding of
shares of Stock (which would otherwise be delivered to the Optionee) with an
aggregate Fair Market Value on the exercise date equal to the aggregate exercise
price of the Option, (iii) a combination of a cash payment and such surrender of
shares, (iv) by means of a broker-assisted cashless exercise to the extent then
permitted under rules and regulations adopted by the Committee, or (v) in such
other manner as may then be permitted under rules and regulations adopted by the
Committee. As soon as practicable after the valid exercise of the Option, the
Company shall deliver to the Optionee one or more stock certificates
representing the Shares so purchased, with any requisite legend affixed.     6.
  Non-Transferability. No right or interest of the Optionee in the Option shall
be pledged, encumbered, or hypothecated to or in favor of any third party or
shall be subject to any lien, obligation, or liability of the Optionee to any
third party. The Option shall not be transferable to any third party by the
Optionee otherwise than (i) by will or the laws of descent and distribution,
(ii) pursuant to a qualified domestic relations order as defined under the Code
or Title I of the Employee Retirement Income Security Act of 1974 to an
immediate family member, or (iii) to the extent authorized by the Committee, to
an immediate family member of the Optionee who acquires the options from the
Optionee through a gift.     7.   Compliance with Laws and Regulations. The
obligation of the Company to deliver Shares upon the exercise of this Option is
conditioned upon compliance by the Optionee and by the Company with all
applicable laws and regulations, including regulations of federal and state
agencies. If requested by the Company, the Optionee shall provide to the
Company, as a condition to the valid exercise of this Option and the delivery of
any certificates representing Shares, appropriate evidence, satisfactory in form
and substance to the Company, that he is acquiring the Shares for investment and
not with a view to the distribution of the Shares or any interest in the Shares,
and a representation to the effect that the Optionee shall make no sale or other
disposition of the Shares unless (i) the Company shall have received an opinion
of counsel satisfactory to it in form and substance that such sale or other
disposition may be made without compliance with registration or other applicable
requirements of federal and state laws and regulations, and (ii) all steps
required to comply with such laws and regulations in connection with the sale or
other disposition of the Shares have been taken and all necessary approvals have
been received. The certificates representing the Shares may bear an appropriate
legend giving notice that the shares have not been registered under the
Securities Act of 1933 (the “Act”) and are “Restricted Securities” as that term
is defined in Rule 144 under the Act and, further, giving notice of the
foregoing restrictions on transfer of the Shares, and any other restrictive
legend deemed necessary or appropriate by the Committee.

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  8.   Tax Withholding. Whenever Shares are to be delivered upon exercise of the
Option, the Company shall be entitled to require as a condition of delivery or
payment that the Optionee remit or, in appropriate cases, agree to remit when
due an amount sufficient to satisfy all federal, state, and local withholding
tax requirements relating thereto. The Optionee will be entitled to elect to
have the Company withhold from the Shares to be delivered upon the exercise of
the Option, a sufficient number of such shares to satisfy the Optionee’s
federal, state, and local withholding tax obligations relating to the Option
exercise to the extent then permitted under rules and regulations adopted by the
Committee and in effect at the time of the exercise of the Option. In such case,
the Shares withheld or the shares surrendered will be valued at the Fair Market
Value at the time of the exercise of the Option.     9.   Administration.

  (i)   The Committee. This Agreement shall be administered by the Committee.
Subject to such approvals and other authority as the Board may reserve to itself
from time to time, the Committee shall, consistent with the provisions of the
Agreement, from time to time establish such rules and regulations and appoint
such agents as it deems appropriate for the proper administration of this
Agreement, and make such determinations under, and such interpretations of, and
take such steps in connection with this Agreement as it deems necessary or
advisable.     (ii)   Authority of the Committee. Subject to the provisions
herein, the Committee shall have the full power to construe and interpret this
Agreement and to amend the terms and conditions of this Agreement to the extent
such terms and conditions are within the sole discretion of the Committee;
provided, however, that no amendments shall, without the consent of the
Optionee, alter or impact any rights or obligations under this Agreement.    
(iii)   Decisions Binding. All determinations and decisions of the Committee as
to any disputed question arising under this Agreement, including questions of
construction and interpretation, shall be final, binding and conclusive upon all
parties. The Optionee hereby agrees to be bound by all decisions and
determinations of the Committee.

  10.   Adjustment Upon Changes in Stock. The number of shares of Stock covered
by this Agreement and the Option exercise price per share shall be adjusted
proportionately, and any other appropriate adjustments shall be made, for any
increase or decrease in the total number of issued and outstanding Stock (or
change in kind) resulting from any change in the Stock or Options through a
merger, consolidation, reorganization, recapitalization, subdivision or
consolidation of shares or other capital adjustment or the payment of a stock
dividend or other increase or decrease (or change in kind) in such shares. In
the event of any such adjustment, fractional shares shall be eliminated.

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  11.   Change in Control. Notwithstanding anything to the contrary in this
Agreement, in the event of a Change in Control, any outstanding Options that are
not exercisable shall become exercisable effective as of the date of a Change in
Control. If an Optionee’s employment is terminated within 730 days after the
effective date of a Change in Control, to the extent that any Option was
exercisable at the time of the Optionee’s termination of employment, such Option
may be exercised within twelve months following the date of termination of
employment.

For purposes of this Agreement, a “Change in Control” means the occurrence of
any of the following:

  (i)   The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934) (a
“Covered Person”) of beneficial ownership (within the meaning of rule 13d-3
promulgated under the Securities Exchange Act of 1934) of 50 percent or more of
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the “Voting
Securities”); provided, however, that for purposes of this subsection (a) of
this Article X the following acquisitions shall not constitute a Change in
Control: (i) any acquisition by the Company, (ii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any entity controlled by the Company, or (iii) any acquisition by any entity
pursuant to a transaction which complied with clauses (i), (ii) and (iii) of
subsection (c) of this Article X; or     (ii)   Individuals who, as of the date
of this Agreement, constitute the board of directors of the Company (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
board of directors of the Company; provided, however, that any individual
becoming a director after the date of this Agreement whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors; or     (iii)   The consummation
of a reorganization, merger or consolidation or sale of the Company, or a
disposition of at least 50 percent of the assets of the Company including
goodwill (a “Business Combination”), provided, however, that for purposes of
this subsection (c), a Business Combination will not constitute a change in
control if the following three requirements are satisfied:

following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Company’s voting securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50 percent of the ownership
interests of the entity resulting from such Business Combination (including,
without limitation, an entity which as a result of

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such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries or other affiliated
entities) in substantially the same proportions as their ownership immediately
prior to such Business Combination, (ii) no Covered Person (excluding any
employee benefit plan [or related trust] of the Company or such entity resulting
from such Business Combination) beneficially owns, directly or indirectly,
50 percent or more of, respectively, the ownership interests in the entity
resulting from such Business Combination, except to the extent that such
ownership existed prior to the Business Combination, and (iii) at least a
majority of the members of the board of directors of the entity resulting from
such Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the board of directors
of the Company, providing for such Business Combination. For this purpose any
individual who becomes a director after the date of this Agreement, and whose
election or nomination for election by the Company’s stockholders, was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors.

  12.   Transfer of Employment. Transfer of employment between the Company and a
Subsidiary shall not constitute termination of employment or service for the
purpose of this Agreement. Whether any leave of absence shall constitute
termination of employment for the purposes of this Agreement shall be determined
in each case by the Committee.     13.   Governing Law. This Agreement shall be
governed and construed in accordance with the laws of Texas, except to the
extent that federal law applies.     14.   Binding Effect: Integration: No Other
Rights Created. This Agreement shall be binding upon the heirs, executors,
administrators and successors of the parties. This Agreement constitutes the
entire agreement between the parties with respect to the Option, and supersedes
any prior agreements or documents with respect to the Option. No amendment,
alteration, suspension, discontinuation or termination of this Agreement which
may impose any additional obligation upon the Company or impair the rights of
the Optionee with respect to the Option shall be valid unless in each instance
such amendment, alteration, suspension, discontinuation or termination is
expressed in a written instrument duly executed in the name and on behalf of the
Company and by the Optionee. Neither this Agreement nor the grant of the Option
shall constitute an employment agreement, nor shall either confer upon the
Optionee any right with respect to his continued status with the Company.

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            HARVEST NATURAL RESOURCES, INC.
      BY:   /s/ James A. Edmiston         James A. Edmiston          TITLE:
President and CEO        OPTIONEE:
      /s/ Keith L. Head       Keith L. Head        DATE: June 6, 2007     

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