prc_8k-ex1004.htm


    
      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.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (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.

     

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    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;

     

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    (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.

     

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    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.

     

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    (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.

     

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    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.

     

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    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.

     

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    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

                

              	 


      

       

       

       

      -18-