EXHIBIT 10.3


 


STOCK OPTION AGREEMENT



ARMADA OIL, INC.


 


THIS AGREEMENT is entered into as of the
____ day of _______, 201_ (the “Date of Grant”)


 


BETWEEN:


 


ARMADA OIL, INC., a company
incorporated pursuant to the laws of the State of Nevada,


 


(the “Company”)


 


		AND:	[Name of Recipient]



 


(the “Optionee”).


 


WHEREAS:


 


The Board of Directors of the Company (the
“Board”) has approved and adopted the Armada Oil, Inc. 2012 Long-Term Incentive Plan (the “2012 Plan”),
pursuant to which the Board is authorized to grant to employees and other selected persons stock options to purchase common shares
of the Company (the “Common Stock”);


 


The 2012 Plan provides for the granting
of stock options that either (i) are intended to qualify as “Incentive Stock Options” within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the “Code”), or (ii) do not qualify under Section 422 of the
Code (“Non-Qualified Stock Options”); and


 


The Board has authorized the grant to Optionee
of options to purchase a total of _______________________ (_______) shares of Common Stock (the “Options”),
which Options are intended to be (select one):


 


[  ]    Incentive Stock Options;


[  ]   Non-Qualified Stock
Options


 


NOW THEREFORE, the Company agrees to offer
to the Optionee the option to purchase, upon the terms and conditions set forth herein and in the Plan, __________________ (______)
shares of Common Stock. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the 2012
Plan.


 


1.          Exercise Price.
The exercise price of the options shall be US $_____ per share.


 


2.          Limitation on the
Number of Shares. If the Options granted hereby are Incentive Stock Options, the number of shares which may be acquired upon
exercise thereof is subject to any limitations set forth in the 2012 Plan.








    	 



    	 



    

 


3.          Vesting Schedule.
The Options shall vest in accordance with Exhibit A. In the event of a Change in Control, the vesting schedule shall accelerate
and any options not yet vested shall become vested concurrent with the closing of that event.


 


4.          Options not
Transferable. The Options may not be transferred, assigned, pledged or hypothecated in any manner (whether by operation of
law or otherwise) other than by will, by applicable laws of descent and distribution or, in the case of a Non-Qualified Stock Option,
pursuant to a qualified domestic relations order, and shall not be subject to execution, attachment or similar process; provided,
however, that if the Options represent a Non-Qualified Stock Option, such Option is transferable without payment of consideration
to immediate family members of the Optionee or to trusts or partnerships established exclusively for the benefit of the Optionee
and Optionee’s immediate family members. Upon any attempt to transfer, pledge, hypothecate or otherwise dispose of any Option
or of any right or privilege conferred by the 2012 Plan contrary to the provisions thereof, or upon the sale, levy or attachment
or similar process upon the rights and privileges conferred by the 2012 Plan, such Option shall thereupon terminate and become
null and void.


 


5.          Investment Intent.
By accepting the Options, the Optionee represents and agrees that none of the shares of Common Stock purchased upon exercise of
the Options will be distributed in violation of applicable federal and state laws and regulations. In addition, the Company may
require, as a condition of exercising the Options, that the Optionee execute an undertaking, in such a form as the Company shall
reasonably specify, that the Stock is being purchased only for investment and without any then-present intention to sell or distribute
such shares.


 


6.          Termination
of Service and Options. Vested Options shall terminate, to the extent not previously exercised, upon the occurrence of the
first of the following events:


 


		(a)	Expiration. Five (5) years from the Date of Grant.



 


		(b)	Termination for Cause. The date of the first discovery by the Company of any reason for
an Optionee’s Termination of Service with the Company or any Subsidiary for cause (as determined in the sole discretion of
the Board, the Committee or the Committee-designated officer, the “2012 Plan Administrator”), and, if an Optionee’s
employment or contractual relationship is suspended pending any investigation by the Company as to whether the Optionee’s
Termination of Service should be for cause, the Optionee’s rights under this Agreement and the 2012 Plan shall likewise be
suspended during the period of any such investigation.



 


		(c)	Termination Due to Death or Total and Permanent Disability. The expiration of one (1) year
from the date of the death of the Optionee or the Termination of Service of an Optionee by reason of Total and Permanent Disability.
If an Optionee’s Termination of Service is caused by death, any Option held by the Optionee shall be exercisable only by
the person or persons to whom such Optionee’s rights under such Option shall pass by the Optionee’s will or by the
laws of descent and distribution.



 




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		(d)	Termination for Any Other Reason. The expiration of twelve (12) months from the date of
an Optionee’s Termination of Service with the Company or any Subsidiary for any reason whatsoever other than Termination
of Service for cause, death or Total and Permanent Disability.



 


Each unvested Option granted pursuant hereto
shall terminate immediately upon the Optionee’s Termination of Service with the Company or Subsidiary for any reason whatsoever,
including Total and Permanent Disability unless otherwise provided by the 2012 Plan Administrator.


 


7.          Stock. In
the case of any stock split, stock dividend or like change in the nature of shares of Stock covered by this Agreement, the number
of shares and exercise price shall be proportionately adjusted as provided in Articles 11 and 12 of the 2012 Plan.


 


8.          Exercise of
Option. Options shall be exercisable, in full or in part, at any time after vesting, until termination; provided, however,
that any Optionee who is subject to the reporting and liability provisions of Section 16 of the Securities Exchange Act of 1934
with respect to the Common Stock shall be precluded from selling or transferring any Common Stock or other security underlying
an Option during the six (6) months immediately following the grant of that Option. If less than all of the shares included in
the vested portion of any Option are purchased, the remainder may be purchased at any subsequent time prior to the expiration of
the Option term. No portion of any Option for less than fifty (50) shares (as adjusted pursuant to Articles 11 or 12 of the 2012
Plan) may be exercised; provided, that if the vested portion of any Option is less than fifty (50) shares, it may be exercised
with respect to all shares for which it is vested. Only whole shares may be issued pursuant to an Option, and to the extent that
an Option covers less than one (1) share, it is unexercisable.


 


Each exercise of the Option shall be by
means of delivery of a notice of election to exercise (which may be in the form attached hereto as Exhibit B) to the CEO
of the Company at its principal executive office, specifying the number of shares of Common Stock to be purchased and accompanied
by payment in cash by certified check or cashier’s check in the amount of the full exercise price for the Common Stock to
be purchased. In addition to payment in cash by certified check or cashier’s check, an Optionee or transferee of an Option
may pay for all or any portion of the aggregate exercise price by complying with one or more of the following alternatives:


 


		(a)	by delivering to the Company shares of Common Stock previously held by such person, duly endorsed
for transfer to the Company, or by the Company withholding shares of Common Stock otherwise deliverable pursuant to exercise of
the Option, which shares of Common Stock received or withheld shall have a fair market value at the date of exercise (as determined
by the 2012 Plan Administrator) equal to the aggregate purchase price to be paid by the Optionee upon such exercise;



 




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Solely for the purposes of this
paragraph, “fair market value” per share of Common Stock shall mean (A) the average of the closing sales prices, as
quoted on the primary national or regional stock exchange on which the Common Stock is listed, or, if not listed, the OTC Markets
if quoted thereon, on the twenty (20) trading days immediately preceding the date on which the notice of election to exercise is
deemed to have been sent to the Company, or (B) if the Common Stock is not publicly traded as set forth above, as reasonably and
in good faith determined by the Board of Directors of the Company as of the date which the notice of election to exercise is deemed
to have been sent to the Company.


 


For purposes of Rule 144 promulgated
under the Securities Act, it is intended, understood and acknowledged that the shares of Common Stock issued in a cashless exercise
transaction shall be deemed to have been acquired by the Optionee, and the holding period for such shares shall be deemed to have
commenced, on the date the Options were originally issued; or


 


		(b)	by complying with any other payment mechanism approved by the 2012 Plan Administrator at the time
of exercise.



 


It is a condition precedent to the issuance
of shares of Common Stock that the Optionee execute and/or deliver to the Company all documents and withholding taxes required
in accordance with Section 15.7 of the 2012 Plan.


 


9.          Holding period
for Incentive Stock Options. In order to obtain the tax treatment provided for Incentive Stock Options by Section 422 of the
Code, the shares of Common Stock received upon exercising any Incentive Stock Options received pursuant to this Agreement must
be sold, if at all, after a date which is later of two (2) years from the date this agreement is entered into or one (1) year from
the date upon which the Options are exercised. The Optionee agrees to report sales of shares prior to the above determined date
to the Company within one (1) business day after such sale is concluded. The Optionee also agrees to pay to the Company, within
five (5) business days after such sale is concluded, the amount necessary for the Company to satisfy its withholding requirement
required by the Code in the manner specified in Section 15.7 of the 2012 Plan. Nothing in this Section 9 is intended as a representation
that Common Stock may be sold without registration under state and federal securities laws or an exemption therefrom or that such
registration or exemption will be available at any specified time.


 


10.         Resale restrictions
may apply. Any resale of the shares of Common Stock received upon exercising any Options will be subject to resale restrictions
contained in the securities legislation applicable to the Optionee. The Optionee acknowledges and agrees that the Optionee is solely
responsible (and the Company is not in any way responsible) for compliance with applicable resale restrictions.


 


11.         Subject to
2012 Plan. The terms of the Options are subject to the provisions of the 2012 Plan, as the same may from time to time be amended,
and any inconsistencies between this Agreement and the 2012 Plan, as the same may be from time to time amended, shall be governed
by the provisions of the 2012 Plan, a copy of which has been delivered to the Optionee, and which is available for inspection at
the principal offices of the Company.


 




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12.          Professional
Advice. The acceptance of the Options and the sale of Common Stock issued pursuant to the exercise of Options may have consequences
under federal and state tax and securities laws which may vary depending upon the individual circumstances of the Optionee. Accordingly,
the Optionee acknowledges that he or she has been advised to consult his or her personal legal and tax advisor in connection with
this Agreement and his or her dealings with respect to Options. Without limiting other matters to be considered with the assistance
of the Optionee’s professional advisors, the Optionee should consider: (a) the implications of alternative minimum tax pursuant
to the Code; (b) the merits and risks of an investment in the underlying shares of Common Stock; and (c) any resale restrictions
that might apply under applicable securities laws.


 


13.          No Employment
Commitment. The grant of the Options shall in no way constitute any form of agreement or understanding binding on the Company
or any Subsidiary, express or implied, that the Company or any Subsidiary will employ or contract with the Optionee, for any length
of time, nor shall it interfere in any way with the Company’s or, where applicable, a Subsidiary’s right to terminate
Optionee’s employment at any time, which right is hereby reserved.


 


14.          Entire Agreement.
This Agreement is the only agreement between the Optionee and the Company with respect to the Options, and this Agreement and the
2012 Plan supersede all prior and contemporaneous oral and written statements and representations and contain the entire agreement
between the parties with respect to the Options.


 


15.          Notices.
Any notice required or permitted to be made or given hereunder shall be mailed or delivered personally to the addresses set forth
below, or as changed from time to time by written notice to the other:


 


	The Company:	Armada Oil, Inc.
	 	5220 Spring Valley Rd
	 	Suite 615
	 	Dallas, TX 75254
	 	Attention:  CEO
	 	 
	With a copy to:	Gottbetter & Partners, LLP
	 	488 Madison Avenue, 12th Floor
	 	New York, NY 10022
	 	Attention: Adam S. Gottbetter
	 	 
	The Optionee:	 


 




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	ARMADA OIL, INC.	 
	 	 	 
	Per:	 	 
	 	Randy M. Griffin, CEO	 
	 	 	 
	 	 
	[Name of Recipient]	 
	 	 	 
	 	 
	Tax ID #	 


 




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EXHIBIT
A


 


TERMS OF THE OPTION


 


 


	Name of the Optionee:	____________________
	 	 
	Date of Grant:	_____ __, 201_
	 	 
	Designation:	[Incentive] [Non-Qualified] Stock Options
	 	 
	1.       Number of Options granted:	___________ shares
	 	 
	2.       Purchase Price:	$______ per share
	 	 
	3.       Vesting Dates:	
         _____ __, 201_ – _________ shares

	 	 
	4.       Expiration Date:	_____ __, 201_


 




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EXHIBIT
B


 


		To:	Armada Oil, Inc.



 


Attention: CEO


 


Notice of Election to Exercise


 


This Notice of Election to Exercise shall
constitute proper notice under Armada Oil, Inc.’s (the “Company”) 2012 Long-Term Incentive Plan (the “2012
Plan”) pursuant to Section 8 of that certain Stock Option Agreement (the “Agreement”) dated as of the ___ day
of _______, 201_, between the Company and the undersigned.


 


The undersigned hereby elects to
exercise Optionee’s option to purchase ______________ shares of the common stock of the Company at a price of US$____
per share, for aggregate consideration of US$_________, on the terms and conditions set forth in the Agreement and the 2012 Plan. Such
aggregate consideration, in the form specified in Section 8 of the Agreement, accompanies this notice.


 


The Optionee hereby directs the Company
to issue, register and deliver the certificates representing the shares as follows:


 


	Registration Information:	 	Delivery Instructions:
	 	 	 
	Name to appear on certificates	 	Name
	 	 	 
	Address	 	Address
	 	 	 
	 	 	 
	 	 	 
	 	 	Telephone Number


 


DATED at ____________________________________, the day of ________________________,
20___.


 


	 	 
	 	(Name of Optionee – Please type or print)
	 	 
	 	 
	 	(Signature and, if applicable, Office)
	 	 
	 	 
	 	(Address of Optionee)
	 	 
	 	 
	 	(City, State, and Zip Code of Optionee)


 




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