vivakor_8k-ex1009.htm


    EXHIBIT
10.9

    


    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
U.S. SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE OR FOREIGN
JURISDICTION, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED
PURSUANT TO THE RELEVANT PROVISIONS OF U.S. FEDERAL AND STATE OR APPLICABLE
FOREIGN SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER U.S.
FEDERAL AND STATE OR APPLICABLE FOREIGN SECURITIES LAWS IS NOT
REQUIRED.

     

     

    VIVAKOR,
INC.

    2008
INCENTIVE PLAN

    NOTICE OF
NONSTATUTORY STOCK OPTION GRANT

     

    VIVAKOR,
INC. (the “Company”) hereby grants you the following Option to purchase
shares of its common stock (“Shares”).  The terms and conditions of
this Option are set forth in the Stock Option Agreement (“Stock Option
Agreement”) that follows and the VIVAKOR,
INC. 2008 Incentive Plan (the “Plan”), both of which are attached to and
made a part of this document.  This page is meant to be a cover page
for informational purposes only, in the event any of the terms hereon are in
conflict with the Stock Option Agreement and/or the Plan, the terms of the Stock
Option Agreement and/or the Plan shall supersede the information on this
page.

     

     

    
      	
              Date
      of Grant:

            	
              December
      2, 2009

            
	 	 
	
              Name
      of Optionee:

            	
              Francis
      Chen

            
	 	 
	
              Number
      of Option Shares:

            	
              250,000

            
	 	 
	
              Exercise
      Price per Share:

            	
              $
      0.24

            
	 	 
	
              Vesting
      Start Date:

            	
              December
      2, 2009

            
	 	 
	
              Type
      of Option:

            	
              oIncentive Stock Option

            	
              xNonstatutory Stock Option

            
	 	 	 
	
              Vesting
      Schedule:

            	
              The
      option shares shall vest on a quarterly basis over 8 (eight) quarters at a
      rate of 31,250 shares per quarter.  The first vesting date shall
      be February 28, 2010.

            
	 	 
	
              Payment
      Forms:

            	
              By
      cash, cash equivalents, or Shares owned by the Optionee for at least six
      months, and if the Company’s Shares become publicly traded, by “cashless”
      exercise, as set forth in the Stock Option
  Agreement.

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    VIVAKOR, INC.

    


    NONSTATUTORY  STOCK  OPTION
AGREEMENT

    


    Optionee: Francis
Chen

    


    
      	
              1.  

            	
              Grant
      of Stock Option. As of the Date of Grant
      (identified in Section 19 below), Vivakor, Inc., a Nevada
      corporation (the “Company”), hereby grants
      a Nonstatutory Stock Option (the “Option”) to the Optionee
      (identified above), a director of the Company, to purchase the number of
      shares of the Company’s common stock, $0.001 par value per share (the
      “Common Stock”),
      identified in Section 19 below (the “Shares”), subject to the
      terms and conditions of this agreement (the “Stock Option Agreement”) and the
      Company’s 2008 Incentive Plan effective February 1, 2008 (the “Plan”), which is hereby
      incorporated herein in its entirety by reference. The Shares, when issued
      to the Optionee upon the exercise of the Option, shall be fully paid and
      nonassessable. The Option is not an
      “incentive stock option” as defined in Section 422 of the Internal
      Revenue Code.

            


    

    


    
      	
              2.  

            	
              Definitions.
      All capitalized terms used herein shall have the meanings set forth in the
      Plan unless otherwise specifically provided herein. Section 19 below
      sets forth meanings for various capitalized terms used in this
      Agreement.

            


    

    


    
      	
              3.  

            	
              Option
      Term. The Option shall commence on the Date of Grant (identified in
      Section 19 below) and terminate on the date immediately prior to the
      tenth (10th)
      anniversary of the Date of Grant. The period during which the Option is in
      effect and may be exercised is referred to herein as the “Option
      Period.”

            


    

    


    
      	
              4.  

            	
              Option
      Price. The Option Price per Share is identified in Section 19
      below.

            


    

     

    
      	
              5.  

            	
              Vesting.
      The total number of Shares subject to this Option shall vest in accordance
      with the Vesting Schedule
      (identified in Section 19 below). The Shares may be purchased
      at any time after they become vested, in whole or in part, during the
      Option Period; provided, however, the Option may only be exercisable to
      acquire whole Shares. The right of exercise provided herein shall be
      cumulative so that if the Option is not exercised to the maximum extent
      permissible after vesting, the vested portion of the Option shall be
      exercisable, in whole or in part, at any time during the Option
      Period.

            


    

    


    
      	
              6.  

            	
              Method
      of Exercise. The Option is exercisable by delivery of a written
      notice (a form of which is attached hereto) to the attention of the Chief
      Financial Officer of the Company at the address for notices to the Company
      provided below, signed by the Optionee, specifying the number of Shares to
      be acquired on, and the effective date of, such exercise. The Optionee may
      withdraw notice of exercise of this Option, in writing, at any time prior
      to the close of business on the business day preceding the proposed
      exercise date.

            


    

    


    
      	
              7.  

            	
              Method of Payment. The
      Option Price upon exercise of the Option shall be payable to the Company
      in full either: (i) in cash or its equivalent, or (ii) subject
      to prior approval by the Board of Directors or the Compensation Committee
      in its discretion, by tendering previously acquired Shares having an
      aggregate Fair Market Value (as defined in the Plan) at the time of
      exercise equal to the total Option Price (provided that the Shares must
      have been held by the Optionee for at least six (6) months prior to
      their tender to satisfy the Option Price), or (iii) subject to prior
      approval by the Board of Directors or the Compensation Committee in its
      discretion, by withholding Shares which otherwise would be acquired on
      exercise having an aggregate Fair Market Value at the time of exercise
      equal to the total Option Price (as determined pursuant to
      Section 2.3 of the Plan), or (iv) subject to prior approval by
      the Board of Directors or the Compensation Committee in its discretion, by
      a combination of (i), (ii), and (iii) above. Any payment in shares of
      Common Stock shall be effected by the delivery of such shares to the Chief
      Financial Officer of the Company, duly endorsed in blank or accompanied by
      stock powers duly executed in blank, together with any other documents as
      the Chief Financial Officer may require. If the payment of the Option
      Price is remitted partly in Shares, the balance of the payment of the
      Option Price shall be paid in either cash, certified check, bank cashiers’
      check, or by wire transfer.

               

              The
      Board of Directors or the Compensation Committee, in its discretion, may
      allow (i) a “cashless exercise” as permitted under Federal Reserve
      Board’s Regulation T, 12 CFR Part 220 (or its successor), and
      subject to applicable securities law restrictions and tax withholdings, or
      (ii) any other means of exercise which the Board of Directors or the
      Compensation Committee, in its discretion, determines to be consistent
      with the Plan’s purpose and applicable law.

               

              As
      soon as practicable after receipt of a written notification of exercise
      and full payment, the Company shall deliver to or on behalf of the
      Optionee, in the name of the Optionee or other appropriate recipient,
      Share certificates for the number of Shares purchased under the Option.
      Such delivery shall be effected for all purposes when a stock transfer
      agent of the Company shall have deposited such certificates in the United
      States mail, addressed to Optionee or other appropriate
      recipient.

            


    

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
    

    
      	
              8.  

            	
              Restrictions
      on Exercise. The Option may not be exercised if the issuance of
      such Shares or the method of payment of the consideration for such Shares
      would constitute a violation of any applicable federal or state securities
      or other laws or regulations, including any such laws or regulations or
      Company policies respecting blackout periods, or any rules or regulations
      of any stock exchange on which the Common Stock may be
    listed.

            


    

    


    
      	
              9.  

            	
              Termination
      of Employment. Voluntary or involuntary termination of Employment
      and the death or Disability of Optionee shall affect Optionee’s rights
      under the Option as follows:

            


    

    


    
      
        	
              	
                (a) 

              	
                Termination for
      Cause. The vested and non-vested portions of the Option shall
      expire on 12:01 am. (Pacific Time) on the date of termination of
      Employment and shall not be exercisable to any extent if Optionee’s
      Employment with the Company is terminated for Cause (as defined in the
      Plan at the time of such termination of
  Employment).

              


      

    

    


    
      
        	
              	
                (b)

              	
                Other Involuntary
      Termination or Voluntary Termination. If Optionee’s Employment with
      the Company is terminated for any reason other than for Cause, retirement,
      death or Disability (as defined in the Plan at the time of termination of
      Employment), then (i) the non-vested portion of the Option shall
      immediately expire on the termination date (ii) the vested portion of
      the Option shall expire to the extent not exercised within three
      (3) months after the date of such termination of Employment. In no
      event may the Option be exercised by anyone after the earlier of
      (A) the expiration of the Option Period or (B) three
      (3) months after termination of
Employment.

              


      

    

    


    
      
        	
              	
                (c)

              	
                Death or
      Disability. If Optionee’s Employment with the Company is terminated
      by death or Disability, then the vesting of the Option will be accelerated
      and the entire Option shall be 100% vested on the date of termination of
      Employment and shall expire 365 calendar days after the date of such
      termination of Employment to the extent not exercised by Optionee or, in
      the case of death, by the person or persons to whom Optionee’s rights
      under the Option have passed by will or by the laws of descent and
      distribution or, in the case of Disability, by Optionee’s legal
      representative. In no event may the Option be exercised by anyone after
      the earlier of (i) the expiration of the Option Period or (ii) 365
      days after Optionee’s death or termination of Employment due to
      Disability.

              


      

    

    


    
      
        	
              	
                (d)

              	
                Retirement. In
      the event of termination due to retirement, the vested portion of the
      Option shall expire on the earlier of (i) the Option Period or
      (ii) three (3) months after the date of retirement, and the unvested
      portion of the Option shall
expire.

              


      

    

    


    
      
        	
              	
                (e)

              	
                Change of
      Control. In the event of a “Change in Control” of the Company (as
      defined below) the vesting of the Option will be accelerated and the
      entire Option shall be 100% vested as of the date immediately preceding a
      Change in Control and the Option may be accelerated and the Option shall
      otherwise be affected as provided in the Plan at such time. For the
      purposes of this Agreement, a “Change in Control” of the Company shall
      include any event as defined in the Plan, and the Board has determined
      that pursuant to Section 6.7(f) of the Plan, a “Change in Control” of
      the Company shall also include any other event that constitutes a “Change
      in Control” of the Company as defined in the Optionee’s Termination
      Agreement with the Company.

              


      

    

    


    
      	
              10.  

            	
              Non-Qualification
      as an Incentive Stock Option. The Optionee
      understands that the Option is not intended to qualify as an “incentive
      stock option” within the meaning of Section 422 of the Code. The
      Optionee further understands and agrees, that neither the Company nor the
      Board of Directors or the Compensation Committee shall be liable or
      responsible for any additional tax liability incurred by the Optionee
      because this Option is not an “incentive stock option” within the meaning
      of the Code.

            


    

    


    
      	
              11.  

            	
              Independent
      Legal and Tax Advice. Optionee acknowledges that the Company has
      advised Optionee to obtain independent legal and tax advice regarding the
      grant and exercise of the Option and the disposition of any Shares
      acquired thereby.

            


    

    


    
      	
              12.  

            	
              Reorganization
      of Company. The existence of the Option shall not affect in any way
      the right or power of the Company or its stockholders to make or authorize
      any or all adjustments, recapitalizations, reorganizations or other
      changes in Company’s capital structure or its business, or any merger or
      consolidation of the Company, or any issue of bonds, debentures, preferred
      or prior preference stock ahead of or affecting the Shares or the rights
      thereof, or the dissolution or liquidation of the Company, or any sale or
      transfer of all or any part of its assets or business, or any other
      corporate act or proceeding, whether of a similar character or
      otherwise.

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              13.  

            	
              Adjustment
      of Shares. In the event of stock dividends, spin-offs of assets or
      other extraordinary dividends, stock splits, combinations of shares,
      recapitalizations, mergers, consolidations, reorganizations, liquidations,
      issuances of rights or warrants and similar transactions or events
      involving Company, appropriate adjustments shall be made to the terms and
      provisions of this Option as provided in the
  Plan.

            


    

    


    
      	
              14.  

            	
              No
      Rights in Shares. Optionee shall have no rights as a stockholder in
      respect of the Shares until the Optionee becomes the record holder of such
      Shares.

            


    

    


    
      	
              15.  

            	
              Investment
      Representation. Optionee will enter into such written
      representations, warranties and agreements as Company may reasonably
      request in order to comply with any federal or state securities law.
      Moreover, any stock certificate for any Shares issued to Optionee
      hereunder may contain a legend restricting their transferability as
      determined by the Company in its discretion. Optionee agrees that Company
      shall not be obligated to take any affirmative action in order to cause
      the issuance or transfer of Shares hereunder to comply with any law, rule
      or regulation that applies to the Shares subject to the
      Option.

            


    

     

    
      	
              16.  

            	
              No
      Guarantee of Employment. The Option shall not
      confer upon Optionee any right to continued Employment with the Company or
      any subsidiary or affiliate
thereof.

            


    

    


    
      	
              17.  

            	
              Withholding
      of Taxes. This Option is subject to and the Company shall have the
      right to take any action as may be necessary or appropriate to satisfy any
      federal, state, or local tax withholding obligations, including at the
      Board of Directors or the Compensation Committee’s discretion, to make
      deductions from the number of Shares otherwise deliverable upon exercise
      of the Option in an amount sufficient to satisfy withholding of any
      federal, state or local taxes required by
law.

            


    

    


    
      	
              18.  

            	
              General.

            


    

    


    
      
        	
              	
                (a)

              	
                Notices. All
      notices under this Agreement shall be mailed or delivered by hand to the
      parties at their respective addresses set forth beneath their signatures
      below or at such other address as may be designated in writing by either
      of the parties to one another. Notices shall be effective upon
      receipt.

              


      

    

    


    
      
        	
              	
                (b)

              	
                Shares
      Reserved. Company shall at all times during the Option Period
      reserve and keep available under the Plan such number of Shares as shall
      be sufficient to satisfy the requirements of this
  Option.

              


      

    

    


    
      
        	
              	
                (c)

              	
                Nontransferability of
      Option. The Option granted pursuant to this Agreement is not
      transferable other than by will, the laws of descent and distribution or
      by a qualified domestic relations order (as defined in Section 414(p) of
      the Internal Revenue Code). The Option will be exercisable during
      Optionee’s lifetime only by Optionee or by Optionee’s legal representative
      in the event of Optionee’s Disability. No right or benefit hereunder shall
      in any manner be liable for or subject to any debts, contracts,
      liabilities, obligations or torts of
Optionee.

              


      

    

    


    
      
        	
              	
                (d)

              	
                Amendment and
      Termination. No amendment, modification or termination of the
      Option or this Agreement shall be made at any time without the written
      consent of Optionee and
Company.

              


      

    

    


    
      
        	
              	
                (e)

              	
                No Guarantee of Tax
      Consequences. The Company and the Board of Directors or the
      Compensation Committee make no commitment or guarantee that any federal or
      state tax treatment will apply or be available to any person eligible for
      benefits under the Option. The Optionee has been advised and been provided
      the opportunity to obtain independent legal and tax advice regarding the
      grant and exercise of the Option and the disposition of any Shares
      acquired thereby.

              


      

    

    


    
      
        	
              	
                (f)

              	
                Severability.
      In the event that any provision of this Agreement shall be held illegal,
      invalid, or unenforceable for any reason, such provision shall be fully
      severable, but shall not affect the remaining provisions of the Agreement,
      and the Agreement shall be construed and enforced as if the illegal,
      invalid, or unenforceable provision had not been included
      herein.

              


      

    

    


    
      
        	
              	
                (g)

              	
                Supersedes Prior
      Agreements. This Agreement shall supersede and replace all prior
      agreements and understandings, oral or written, between the Company and
      the Optionee regarding the grant of the Options covered
      hereby.

              


      

    

    


    
      
        	
              	
                (h)

              	
                Governing Law.
      The Option shall be construed in accordance with the laws of the State of
      Nevada without regard to its conflict of law provisions, to the extent
      federal law does not supersede and preempt Nevada
  law.

              


      

    

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      


      
        	
                19.

              	
                Definitions and Other
      Terms. The following capitalized
      terms shall have those meanings set forth opposite
      them:

              


      

      


      
        
          	
                	
                  (a)

                	
                  Optionee:    
      Francis
      Chen                                                       

                


        

      

      


      
        
          	
                	
                  (b)

                	
                  Type
      of Option:     Nonstatutory Stock
      Option                                           

                


        

      

      


      
        
          	
                	
                  (c)

                	
                  Date
      of Grant:     December 2,
      2009                                                                

                


        

      

      


      
        
          	
                	
                  (d)

                	
                  Vesting
      Start Date:     December 2,
      2009                                                        

                


        

      

      


      
        
          	
                	
                  (e)

                	
                  Shares:  250,000 shares
      of the Company’s Common
Stock.

                


        

      

      


      
        
          	
                	
                  (f)

                	
                  Option
      Price:     $0.24  per
      Share                                                                    
      .

                


        

      

      


      
        
          	
                	
                  (g)

                	
                  
                    Vesting
      Schedule: Options for Shares shall vest as follows:

                     

                    The option shares shall vest on a quarterly basis over 8
      (eight) quarters at a rate of 31,250 shares per quarter.  The
      first vesting date shall be February 28,
2010.

                  

                


        

      

      
Decided
by resolution of the Board of Directors

    

    


     

     

    IN WITNESS WHEREOF, the
Company has, as of December 2, 2009, caused this Stock Option Agreement to be
executed on its behalf by its duly authorized officer, and Optionee has hereunto
executed this Stock Option Agreement as of the same date.

    


     

    
      	VIVAKOR, INC.	OPTIONEE
	 	 
	By:                                                                               
      	                                                   
	Title:                                                                            	Francis
    Chen
	 	 
	Address for Notices
      to the Company:	Address for Notices
      to Optionee:
	 	 
	2590 Holiday Rd.,
      Suite 100	________________________________
	Coralville, IA 
      52241	________________________________


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    NOTICE
OF EXERCISE AND COMMON STOCK PURCHASE AGREEMENT

    


    


    Vivakor,
Inc.

    2590
Holiday Road, Suite 100

    Coralville,
IA  52241

    Attn:  Chief
Financial Officer

    


    
      	
               
      

            	
              Re:

            	
              Exercise
      of Nonstatutory Stock Option

            


    

     

    Dear Sir
or Madam:

    


    Pursuant
to the Nonstatutory Stock Option Agreement dated December 2,
2009  (the “Stock
Option Agreement”), I hereby elect to purchase _____________ shares
of the Common Stock of the Company (“Common Stock”) at the
aggregate exercise price of $____________.  I enclose the following
documents (check all that are applicable):

     

    
      	
              o

            	
              My
      check in the amount of
$___________.

            


    

     

    
      	
              o

            	
              Other
      (specify):                                                                                                           .

            


    

     

    The
Common Stock is to be issued and registered in the name(s) of:

     

    ___________________________________

     

    ___________________________________

     

    I understand that
there may be tax consequences as a result of the purchase or disposition of the
Common Stock, I have consulted with any tax consultant I desired to consult, and
I am not relying on the Company for any tax advice. I understand that my
exercise is governed by my Nonstatutory Stock Option Agreement and agree to
abide by and be bound by its terms and conditions. I represent that the Common
Stock is being acquired solely for my own account and not as a nominee for any
other party, or for investment, and that I will not offer, sell or otherwise
dispose of any such Common Stock except under circumstances that will not result
in a violation of the Securities Act of 1933, as amended, or the securities laws
of any state.

     

    Dated:  ___________________,
200_.

    
___________________________________

        (Signature)

     

    ___________________________________
    (Please Print
Name)

     

    ___________________________________

    ___________________________________
    (Address)

     

    
      
        
        

      

      
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