prc_8k-ex1002.htm


    
      EXHIBIT
10.2

    

    NON-STATUTORY
STOCK OPTION AGREEMENT

     

    THIS NON-STATUTORY STOCK OPTION AGREEMENT
(“Agreement”)
is entered into effective as of May 22, 2009 (“Effective
Date”) by and between Petro Resources Corporation, a Delaware corporation
(“Company”),
and Gary C. Evans (“Optionee”).

     

    R
E C I T A L S

     

    A.  The
Company wishes to grant Optionee options to purchase 2,750,000 shares of the
Corporation’s $.01 par value common stock (“Common
Stock”) on the terms and subject to the conditions set forth
below.

     

    B.  The
options and option shares will not be granted under the Company’s 2006 Stock
Incentive Plan (“Plan”),
however, as a matter of convenience, this Agreement incorporates certain terms
and conditions from the Plan, as it exists as of the Effective Date, as
expressly provided for herein.

     

    C.  This
Agreement is entered into concurrent with the execution and delivery of that
certain Employment Agreement (“Employment
Agreement”) of even date herewith between Optionee and the
Company.

     

    A
G R E E M E N T

     

    It is
hereby agreed as follows:

     

    1.  Grant
of Options.  The
Company hereby grants to Optionee, options (“Options”)
to purchase all or any part of 2,750,000 shares (“Shares”)
of the Corporation’s Common Stock, upon the terms and subject to the conditions
set forth herein.  Except as otherwise determined by the board of
directors (“Board”) of
the Company, this Agreement and the Options granted hereby shall be administered
on behalf of the Company by the Compensation and Nominating Committee (“Committee”)
of the Board. All agreements, notices and waivers to be made by, or delivered
to, the Company under this Agreement shall be made by, or delivered to, the
Committee, except as otherwise determined by the Board.

     

    2.  Option
Period.  The
Options shall vest and become exercisable, unless earlier terminated pursuant to
Section 6 of this Agreement, as set forth in this Section 2.  All
outstanding Options shall expire on May 22, 2014.

     

    (a)  Options
to purchase 687,500 Shares shall vest and first become exercisable subject to
and upon the Company’s acquisition of at least $20 million of additional debt
capital, equity capital, or oil and gas properties, or any combination thereof,
whether in one transaction or in a series of transactions, during the period
commencing on the Effective Date and ending on  May 22,
2010.  Recapitalization of existing equity and refinancing of existing
debt shall be excluded from the calculation of acquired capital.  In
the case of credit facilities, (i) all draw downs on the credit facilities of
the Company or its subsidiaries existing as of the Effective Date shall be
excluded from calculation of acquired debt capital, (ii) the initiation of a new
credit facility on the part of the Company or its subsidiaries subsequent to the
Effective Date or any increase in the borrowing amount of a credit facility
existing as of the Effective Date (each a “New Credit
Facility”), shall be excluded from calculation of acquired debt capital
and (iii) all draw downs on a New Credit Facility shall be included in
calculation of acquired debt capital.  In the case of acquisitions of
oil and gas properties, the purchase price paid by the Company for the oil and
gas properties shall be used for purposes of this Section 2(a) and any financing
acquired by the Company for purposes of financing the acquisition shall be
excluded from any calculation of acquired capital pursuant to this Section
2(a).

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)  Options
to purchase 687,500 Shares shall vest and first become exercisable subject to
and upon the Common Stock trading at a VWAP (as defined below) of $0.75 per
share (as adjusted for splits, combinations and the like) for 20 of any 30
consecutive trading days during the period commencing on the Effective Date and
ending on May 22, 2011. The term “VWAP”
means, for any date, the price determined by the first of the following clauses
that applies: (i) if the Common Stock is then listed or quoted on a stock market
or stock exchange other than the OTC Bulletin Board, the daily volume weighted
average price of the Common Stock for such date (or the nearest preceding date)
on the trading market on which the Common Stock is then listed or quoted for
trading as reported by Bloomberg Financial L.P. (based on a trading day from
9:30 a.m. (New York City time) to 4:02 p.m. (New York City time); (ii) if
the OTC Bulletin Board is the trading market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on the OTC
Bulletin Board; (iii) if the Common Stock is not then quoted for trading on the
OTC Bulletin Board and if prices for the Common Stock are then reported in the
“Pink Sheets” published by Pink Sheets, LLC (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported; or (iv) in all other cases, the fair
market value of a share of Common Stock as determined by the Board in good
faith.

     

    (c)  Options
to purchase 687,500 Shares shall vest and first become exercisable subject to
and upon the Common Stock trading at a VWAP of $1.25 per share (as adjusted for
splits, combinations and the like) for 20 of any 30 consecutive trading days
during the period commencing on the Effective Date and ending on May 22,
2012.

     

    (d)  Options
to purchase 687,500 Shares shall vest and first become exercisable subject to
and upon the Company achieving daily production of 1,400 boe per day during the
period commencing on the Effective Date and ending on May 22, 2011. The term
“boe” means
barrels of crude oil equivalent, determined using the ratio of six mcf of
natural gas to one bbl of crude oil, condensate or natural gas
liquids.

     

    3.  Method
of Exercise.  The
Options shall be exercisable by Optionee by giving written notice to the Company
of the election to purchase and of the number of Shares Optionee elects to
purchase, such notice to be accompanied by such other executed instruments or
documents as required by this Agreement or as the Company may otherwise
reasonably require, and unless otherwise directed by the Company, Optionee shall
at the time of such exercise tender the purchase price of the Shares he has
elected to purchase.  Optionee may purchase less than the total number
of Shares for which the Option is exercisable, provided that a partial exercise
of an Option may not be for less than 100 Shares.  If Optionee shall
not purchase all of the Shares which he is entitled to purchase under the
Options, his right to purchase the remaining unpurchased Shares shall continue
until expiration of the Options.  The Options shall be exercisable
with respect of whole Shares only, and fractional Share interests shall be
disregarded.

     

     

    
      
        
        

      

      
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    4.  Amount
of Purchase Price.  The
purchase price (“Purchase
Price”) per Share for each Share which Optionee is entitled to purchase
under the Options shall be $0.37 per Share.

     

    5.  Payment
of Purchase Price.  At
the option of the Executive, all or any part of the Options may be paid in cash
or in shares of Common Stock equal to the Purchase Price, or in a combination of
cash and shares of the Common Stock of the Company.  At the time of
Optionee’s notice of exercise of the Options, Optionee shall designate the
manner of payment and shall tender (a) in cash or by certified or bank cashier’s
check payable to the Company, the Purchase Price for all Shares then being
purchased for cash, and (b) shares of Common Stock of the Company for the
Purchase Price for all Shares then being purchased not involving a cash payment,
accompanied by appropriate stock powers with original signatures and Medallion
guarantees.  In the case of payment in shares of Common Stock, the per
share value shall be the VWAP for the 20 trading days preceding the Company’s
receipt of the notice of exercise and other deliverables required by this
Section 5.

     

    6.  Effect
of Termination of Employment or Other Relationship.  If
Optionee’s employment with the Company terminates, the effect of the termination
on the Optionee’s rights to acquire Shares shall be as follows:

     

    6.1  Termination
Due to Death or Disability.  In
the event Optionee’s employment with the Company is terminated by reason of
death or Disability (as such term is defined in the Employment Agreement), all
outstanding Options then held by Optionee will, to the extent exercisable as of
such termination, remain exercisable for a period of six (6) months after such
termination (but in no event after the expiration date of any such
Option).  Options not exercisable as of such death or Disability will
be forfeited and terminate.

     

    6.2  Termination
Due to Resignation.  In
the event Optionee’s employment with the Company is terminated by reason of
resignation by Optionee, excluding any resignation by Optionee for Good Reason
(as such term is defined in the Employment Agreement), all outstanding Options
then held by Optionee will, to the extent exercisable as of such termination,
remain exercisable in full for a period of three (3) months after such
termination (but in no event after the expiration date of any such
Option).  Options not exercisable as of such resignation will be
forfeited and terminate.

     

    6.3  Termination
For Cause.  In the event
Optionee’s employment with the Company is terminated by the Company for Cause
(as such term is defined in the Employment Agreement), all outstanding Options
then held by Optionee will be forfeited and terminate, without notice of any
kind, effective as of the time of termination for Cause. The Company may defer
the exercise of any Option for a period of up to forty-five (45) days in order
for the Committee to make any determination as to the existence of
Cause.

     

    6.4  Termination for Reasons Other than
Death, Disability, Resignation or Cause.  In the event
Optionee’s employment with the Company is terminated for any reason other than
as contemplated by Sections 6.1 through 6.3 above, all outstanding Options then
held by Optionee will, to the extent exercisable as of such termination, remain
exercisable in full until the expiration date of any such
Option.  Options not exercisable as of such termination of employment
shall remain outstanding and will be forfeited and terminate on the earlier of
(a) the vesting date with respect to such Options set forth in Section 2 if the
applicable vesting condition has not been satisfied on or prior to such date and
(b) either (y)  the second anniversary of the date of such termination
of employment in the event  such termination of employment occurs on
or before the first anniversary of the Effective Date or (z) the first
anniversary of the date of such termination of employment in the
event  such termination of employment occurs after the first
anniversary of the Effective Date.  Options that vest prior to the
termination provisions of the preceding sentence shall remain exercisable in
full until the expiration date of such Option.

     

     

    
      
        
        

      

      
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    6.5  Modification
of Rights Upon Termination.  Notwithstanding
the other provisions of this Section 6, upon Optionee’s termination of
employment with the Company, the Committee may, in its sole discretion (which
may be exercised at any time on or after the date of grant, including following
such termination), cause Options (or any part thereof) then held by Optionee to
become or continue to become exercisable and/or remain exercisable following
such termination of employment, in the manner determined by the
Committee.

     

    6.6  Determination
of Termination of Employment.  Unless
the Committee otherwise reasonably determines, Optionee’s employment will, for
purposes of this Agreement, be deemed to have terminated on the date recorded on
the personnel or other records of the Company, as reasonably determined by the
Committee upon such records.

     

    7.  Payment
of Withholding Taxes.  The Company is
entitled to (a) withhold and deduct from future wages of the Optionee (or from
other amounts that may be due and owing to the Optionee from the Company), or
make other arrangements for the collection of, all legally required amounts
necessary to satisfy any and all federal, foreign, state and local withholding
and employment-related tax requirements attributable to the Options, or (b)
require the Optionee promptly to remit the amount of such withholding to the
Company before taking any action, including issuing any shares of Common Stock,
with respect to an Option.

     

    8.  Change
in Control.

     

    8.1  General.  In
the event of a Change in Control (as such term is defined in the Plan as of the
Effective Date), the Company, if approved by the Committee in its sole
discretion, and without the consent of Optionee, may determine
that:

     

    (a)  all
Options that have been outstanding for at least six months will become
immediately exercisable in full and will remain exercisable in accordance with
their terms;

     

    (b)  Optionee
will receive, with respect to some or all of the Shares of Common Stock subject
to outstanding Options, either (i) as of the effective date of any such Change
in Control, cash in an amount equal to the excess of the Fair Market Value (as
such term is defined in the Plan as of the Effective Date) of such Shares on the
last business day prior to the effective date of such Change in Control over the
Purchase Price per share of such Shares, (ii) immediately prior to such Change
of Control, a number of shares of Common Stock having an aggregate Fair Market
Value equal to the excess of the Fair Market Value of the Shares as of the last
business day prior to the effective date of such Change in Control over the
Purchase Price per share of such Shares; or (iii) any combination of cash or
shares of Common Stock with the amount of each component to be determined by the
Committee not inconsistent with the foregoing clauses (i) and (ii), as
proportionally adjusted; and

     

     

    
      
        
        

      

      
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    (c)  any
Options which, as of the effective date of any such Change in Control, are
“underwater” (as defined in Section 3.2(d) of the Plan as of the Effective Date)
or not vested shall terminate as of the effective date of any such Change in
Control.

     

    8.2  Limitation
on Change in Control Payments.  Notwithstanding
anything in this Agreement to the contrary, if  the acceleration of
the exercisability of an Option as provided in Section 8.1(a) or the
payment of cash or shares of Common Stock in exchange for all or part of an
Option as provided in Section 8.1(b) (which acceleration or payment could be
deemed a “payment” within the meaning of Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended (“Code”)),
together with any other “payments” that such Optionee has the right to receive
from the Company or any corporation that is a member of an “affiliated group”
(as defined in Section 1504(a) of the Code without regard to
Section 1504(b) of the Code) of which the Company is a member, would
constitute a “parachute payment” (as defined in Section 280G(b)(2) of the
Code), then the “payments” to such Optionee pursuant to Section 8.1 will be
reduced to the largest amount as will result in no portion of such “payments”
being subject to the excise tax imposed by Section 4999 of the Code; provided,
however, that if Optionee is subject to a separate agreement with the Company
which specifically provides that payments attributable to one or more forms of
employee stock incentives or to payments made in lieu of employee stock
incentives will not reduce any other payments under such agreement, even if it
would constitute an excess parachute payment, or provides that the Optionee will
have the discretion to determine which payments will be reduced in order to
avoid an excess parachute payment, then the limitations of this Section 8.2
will, to that extent, not apply.

     

    9.  Anti-Dilution.

     

    9.1  Stock
Dividends and Splits.  If
the Company, at any time while Options are outstanding: (a) pays a stock
dividend or otherwise makes a distribution or distributions on shares of its
Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock, (b) subdivides or reclassifies outstanding shares of
Common Stock into a larger number of shares, (c) combines or reclassifies
(including by way of reverse stock split) outstanding shares of Common Stock
into a smaller number of shares, (d) makes a distribution on its Common Stock in
shares of its capital stock other than Common Stock, or (e) issues by
reclassification of shares of the Common Stock any shares of capital stock of
the Company, then in each case the Purchase Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event and the number of shares issuable upon
exercise of the Options shall be proportionately adjusted so that Optionee shall
be entitled to receive the number of shares of capital stock of the Company
which Optionee would have owned immediately following such action had such
Options been exercised immediately prior thereto.

     

     

    
      
        
        

      

      
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    9.2  Fundamental
Transaction.  Subject
to the Company’s rights under Section 8, if at any time while the Options are
outstanding, (a) the Company effects any merger or consolidation or other
business combination with and into another entity, (b) the Company effects any
sale of all or substantially all of its assets in one or a series of related
transactions or (c) the Company effects any reclassification of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property
(in any such case, a “Fundamental
Transaction”), and such Fundamental Transaction constitutes a Change of
Control then, unless the Company shall have made a determination in accordance
with Section 8.1 above, upon consummation of such transaction the Options shall
automatically become exercisable for the kind and amount of securities, cash or
other assets which Optionee would have owned immediately after the Fundamental
Transaction if Optionee had exercised the Options immediately before the
effective date of such transaction, without further action required on the part
of any party (the “Alternate
Consideration”).  To the extent necessary to effectuate the
foregoing provisions, and subject to the Corporation’s rights under Section 8,
any successor to the Company or surviving entity in such Fundamental Transaction
shall issue to Optionee new Options consistent with the foregoing provisions and
evidencing Optionee’s right to exercise such Options into Alternate
Consideration.

     

    10.  Nontransferability
of Options.  The
Options shall not be transferable or assignable, either voluntarily or by
operation of law, except as provided in Section 12.3 of the Plan.

     

    11.  Time
of Granting Options.  The
time the Options shall be deemed granted, sometimes referred to herein as the
“date of grant,” shall be May 22, 2009.

     

    12.  Privileges
of Stock Ownership.  Optionee
shall not be entitled to the privileges of stock ownership as to any Shares not
actually issued and delivered to Optionee.  No Shares shall be
purchased upon the exercise of any Options unless and until, in the opinion of
the Company’s counsel, any then applicable requirements of any laws, or
governmental or regulatory agencies having jurisdiction, and of any exchanges
upon which the stock of the Company may be listed shall have been fully complied
with.

     

    13.  Securities
Laws Compliance.  The
Company will diligently endeavor to comply with all applicable securities laws
before any stock is issued pursuant to the Options.  Without limiting
the generality of the foregoing, the Company may require from the Optionee such
investment representation or such agreement, if any, as counsel for the Company
may consider necessary in order to comply with the Securities Act of 1933 as
then in effect, and may require that the Optionee agree that any sale of the
Shares will be made only in such manner as is permitted by the
Corporation.  The Company may in its discretion cause the Shares
underlying the Options to be registered under the Securities Act of 1933 as
amended by filing a Form S-8 Registration Statement covering the Options and the
Shares underlying the Options.  Optionee shall take any action
reasonably requested by the Company in connection with registration or
qualification of the Shares under federal or state securities laws.

     

    14.  Intended
Treatment as Non-Statutory Stock Options.  The
Options granted herein are intended to be non-statutory stock options described
in U.S. Treasury Regulation (“Treas.
Reg.”) §1.83-7 to which Sections 421 and 422 of the Code, do not
apply, and shall be construed to implement that intent.  If all or any
part of the Options shall not be described in Treas. Reg. §1.83-7 or be subject
to Sections 421 and 422 of the Code, the Options shall nevertheless be
valid and carried into effect.

     

     

    
      
        
        

      

      
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    15.  Shares
Subject to Legend.  If
deemed necessary by the Company’s counsel, all certificates issued to represent
Shares purchased upon exercise of the Options shall bear such appropriate legend
conditions as counsel for the Company shall require.

     

    16.  No
Rights to Continued Employment or Relationship.  Nothing
contained in this Agreement shall obligate the Company to employ or have another
relationship with Optionee for any period or interfere in any way with the right
of the Company to reduce Optionee’s compensation or to terminate the employment
of or relationship with Optionee at any time.

     

    17.  Miscellaneous.

     

    17.1  Binding
Effect.  This
Agreement shall bind and inure to the benefit of the successors, assigns,
transferees, agents, personal representatives, heirs and legatees of the
respective parties.

     

    17.2  Further
Acts.  Each
party agrees to perform any further acts and execute and deliver any documents
which may be necessary to carry out the provisions of this
Agreement.

     

    17.3  Amendment.  This
Agreement may be amended at any time by the written agreement of the Company and
the Optionee.

     

    17.4  Syntax.  Throughout
this Agreement, whenever the context so requires, the singular shall include the
plural, and the masculine gender shall include the feminine and neuter
genders.  The headings and captions of the various Sections hereof are
for convenience only and they shall not limit, expand or otherwise affect the
construction or interpretation of this Agreement.

     

    17.5  Choice
of Law.  The
parties hereby agree that this Agreement has been executed and delivered in the
State of Texas and shall be construed, enforced and governed by the laws
thereof.  This Agreement is in all respects intended by each party
hereto to be deemed and construed to have been jointly prepared by the parties
and the parties hereby expressly agree that any uncertainty or ambiguity
existing herein shall not be interpreted against either of them.

     

    17.6  Severability. In the
event that any provision of this Agreement shall be held invalid or
unenforceable, such provision shall be severable from, and such invalidity or
unenforceability shall not be construed to have any effect on, the remaining
provisions of this Agreement.

     

    17.7  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 Optionee or the Company may be
given to them at the following addresses:

     

     

    
      
        
        

      

      
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              If
      to Optionee:

            	
              Gary
      C. Evans

              
                1046
      Texan Trail

                Grapevine,
      Texas 76051

                 

              

            
	 	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.

     

    17.8  Entire
Agreement.  This
Agreement constitutes the entire agreement between the parties hereto pertaining
to the subject matter hereof, this Agreement supersedes all prior and
contemporaneous agreements and understandings of the parties, and there are no
warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as set forth or referred to
herein.  No supplement, modification or waiver or termination of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby.  No waiver of any of the provisions of this Agreement shall
constitute a waiver of any other provision hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.

     

    17.9  Attorneys’
Fees.  In
the event that any party to this Agreement institutes any action or proceeding,
including, but not limited to, litigation or arbitration, to preserve, to
protect or to enforce any right or benefit created by or granted under this
Agreement, the prevailing party in each respective such action or proceeding
shall be entitled, in addition to any and all other relief granted by a court or
other tribunal or body, as may be appropriate, to an award in such action or
proceeding of that sum of money which represents the attorneys’ fees reasonably
incurred by the prevailing party therein in filing or otherwise instituting and
in prosecuting or otherwise pursuing or defending such action or proceeding,
and, additionally, the attorneys’ fees reasonably incurred by such prevailing
party in negotiating any and all matters underlying such action or proceeding
and in preparation for instituting or defending such action or
proceeding.

     

    17.10  Counterparts.  This
Agreement may be executed in two or more separate counterparts, each of which
shall be an original, and all of which together shall constitute one and the
same agreement.

     

     

    
      
        
        

      

      
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    IN WITNESS WHEREOF, the
parties have entered into this Agreement as of the date first set forth
above.

     

    
       

      
        	 	
                “Company”

                 

                Petro
      Resources Corporation

                a
      Delaware corporation

                 

                 

              	 
	 	By: 	/s/ Wayne P.
      Hall	 
	 	 	Wayne P. Hall, Chief
      Executive Officer	 
	 	 	 	 
	 	
                
                

                 

                 

                

                  “Optionee”

                

                 

                 

              	 
	 	
                
                

                
                  /s/ Gary C.
      Evans

                

              	 
	 	
                Gary
      C. Evans

              	 


      

       

       

       

       

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