EX-10.3






Exhibit 10.3





MAGELLAN PETROLEUM CORPORATION




NON-QUALIFIED STOCK OPTION AWARD AGREEMENT




     This Agreement, made as of the grant date indicated in Section 3 below (the “Grant
Date”), and between Magellan Petroleum Corporation, a Delaware corporation (the “Company”), and the
undersigned individual (the “Optionee”), pursuant to the Magellan Petroleum Corporation 1998 Stock
Option Plan, as amended on October 24, 2007, as further amended and renamed the “1998 Stock
Incentive Plan” on December 11, 2008 (the “Plan”). Terms used but not defined herein shall have
the same meaning as in the Plan).



     Whereas, the Optionee is the President and Chief Executive Officer and a director of
the Company and the Company; and



     Whereas, the Company, acting through the Compensation Committee and the full Board of
Directors has approved the award of Nonqualified Stock Options (“Options”) under the Plan to the
Optionee (“Award”).



     Now, Therefore, in consideration of the terms and conditions of this Agreement and
pursuant to the Plan, the parties agree as follows:




	1.	 	Grant of Options. The Company hereby grants to the Optionee the right and option to
purchase from the Company, at the exercise price set forth in Section 3 below, all or any part
of the aggregate number of shares of common stock, par value $0.01 per share, of the Company,
as such common shares are presently constituted (the “Stock”), set forth in said Section 3.






	2.	 	Terms and Conditions. It is understood and agreed that the Options evidenced hereby
shall at all times be subject to the provisions of the Plan (which are incorporated herein by
reference) and the following terms and conditions:






	 	(a)	 	Expiration Date. The Options evidenced hereby shall expire on the
date specified in Section 3 below, or earlier as provided in Section 7 of the Plan.
	 
	 	(b)	 	Exercise of Option. The Options evidenced hereby shall be
exercisable from time to time by (i) providing written notice of exercise ten (10)
days prior to the date of exercise specifying the number of shares for which the
Options are being exercised, addressed to the Company at its principal place of
business, and (ii) either:






	 	(A)	 	Cash Only Exercise – submitting the full cash purchase price
of the exercised Stock; or




 









 






	 	(B)	 	Cashless Exercise – submitting appropriate authorization for
the sale of Stock in an amount sufficient to provide the full purchase price
in accordance with Section 5(d) of the Plan, or
	 
	 	(C)	 	Combination – tendering a combination of (i) and (ii) above.






	 	(c)	 	Withholding Taxes. Without regard to the method of exercise and
payment, the Optionee shall pay to the Company, upon notice of the amount due, any
withholding taxes payable with respect to such exercise, which payment may be made
with shares of Stock which would otherwise be issued pursuant to the Options.
	 
	 	(d)	 	Vesting. The shares covered by the Options shall vest as follows:
	 
	 	(i)	 	six hundred and twelve thousand, five hundred (612,500) Option shares shall
vest in full on December 11, 2009;
	 
	 	(ii)	 	six hundred and twelve thousand, five hundred (612,500) Option shares shall
vest in full on December 11, 2010; and
	 
	 	(iii)	 	six hundred and twelve thousand, five hundred (612,500) Option shares shall
vest in full on December 11, 2011.
	 
	 	(e)	 	Acceleration. The Options evidenced hereby shall immediately be
accelerated and vest in full upon:
	 
	 	(i)	 	a “change of control” of the Company as defined in Section 15 of the Plan;
	 
	 	(ii)	 	the Company’s termination of the Optionee’s employment with the Company
without “Cause” (as such term is defined in the Optionee’s Employment Agreement with
the Company); or
	 
	 	(iii)	 	upon the Optionee’s resignation from the Company for “Good Reason” (as such
term is defined in the Optionee’s Employment Agreement with the Company).
	 
	 	(f)	 	Compliance with Laws and Regulations. The Options evidenced hereby
are subject to restrictions imposed at any time on the exercise or delivery of shares
in violation of the By-Laws of the Company or of any law or governmental regulation
that the Company may find to be valid and applicable.
	 
	 	(g)	 	Interpretation. Optionee hereby acknowledges that this Agreement is
governed by the Plan, a copy of which Optionee hereby acknowledges having received,
and by such administrative rules and regulations relative to the Plan and not
inconsistent therewith as may be adopted and amended from time by




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	 	 	 	the Committee (the “Rules”). Optionee agrees to be bound by the terms and provisions
of the Plan and the Rules.






	3.	 	Option Data.





	 	 	 
	Optionee’s Name:

	 	William H. Hastings
	 
	 	 
	Number of shares of Stock
	 	 
	Subject to this Option:

	 	1,837,500 (one million, eight hundred thirty-seven
thousand, five hundred)
	 
	 	 
	Grant Date:

	 	December 11, 2008
	 
	 	 
	Exercise Price Per Share:

	 	$1.20 per share
	 
	 	 
	Expiration Date:

	 	December 11, 2018







	4.	 	Award of Options Contingent Upon Shareholder Approval. The award of the Options to
the Optionee hereby are expressly conditioned upon, and shall only take effect, if the
Company’s shareholders approve an amendment and restatement of the Plan at either (i) the
Company’s 2008 annual meeting of shareholders to be held in the near future, or (ii) at any
subsequent annual or special meeting of shareholders of the Company held on or before December
31, 2009, which approval is required under the terms of the Plan and the listing requirements
of the Nasdaq Stock Market, Inc. Optionee acknowledges and agrees that, should the required
shareholder approval of the Plan not be obtained on or prior to December 31, 2009, then the
Award of Options evidenced hereby shall be null and void and of no further force and effect.
	 
	5.	 	Miscellaneous. This Agreement and the Plan (a) contains the entire Agreement of the
parties relating to the subject matter of this Agreement and supersedes any prior agreements
or understandings with respect thereto; and (b) shall be binding upon and inure to the benefit
of the Company, its successors and assigns and the Optionee, his heirs, devisees and legal
representatives. In the event of the Optionee’s death or a judicial determination of his
incompetence, reference in this Agreement to the Optionee shall be deemed to refer to his
legal representative, heirs or devisees, as the case may be.




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* * * * * *




     In Witness Whereof, the Company has caused this instrument to be executed by its
authorized officer, as of the date identified below.



	 	 	 	 	 	 	 	 	 
	Agreed to:	 	 	 	MAGELLAN PETROLEUM CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ William H. Hastings
 


	 	 	 	By:
	 	/s/ Walter McCann
 

	 	 
	Optionee: William H. Hastings

	 	 	 	 	 	Name: Walter McCann	 	 
	 

	 	 	 	 	 	Title: Chairman of the Board	 	 





Date: February 3, 2009





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