Document:

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

     

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    (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:

     

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              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

              	 

      

       

       

       

       

       -9-prc_8k-ex1003.htm

    
      EXHIBIT
10.3

    

    RESTRICTED
STOCK AGREEMENT

     

    THIS RESTRICTED STOCK
AGREEMENT (“Agreement”)
is entered into on May 22, 2009 by and between Petro Resources Corporation,
a Delaware corporation (the “Company”),
and Gary C. Evans (the “Recipient”).

     

    R
E C I T A L S

     

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

     

    B.  The
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 date of this Agreement, as
expressly provided herein.

     

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

     

    A
G R E E M E N T

     

    It is
hereby agreed as follows:

     

    1.  Grant
of Restricted Stock.  The
Company hereby grants, as of May 22, 2009 (the “Date of
Grant”), to Recipient, 2,750,000 shares of restricted Common Stock
(collectively the "Restricted
Stock").  The Restricted Stock shall be subject to the terms,
conditions and restrictions set forth in this Agreement.  Except as
otherwise determined by the board of directors (“Board”) of
the Company, this Agreement and the Restricted Stock 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.  Vesting
of Restricted Stock.

     

    (a)  The
shares of Restricted Stock shall become vested in the following amounts, at the
following times and upon the following conditions, provided that the Recipient
remains in continuous employment of the Company through and on the applicable
vesting date:

     

    (i)  1,000,000
Shares shall vest on January 1, 2010.

     

    (ii)  437,500
Shares shall vest subject to and upon the Company’s satisfaction in full of the
performance condition set forth in Section 2(a) of the Option Agreement on or
before May 22, 2010.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iii)  437,500
Shares shall vest subject to and upon the Common Stock’s satisfaction in full of
the performance condition set forth in Section 2(b) of the Option Agreement on
or before May 22, 2011.

     

    (iv)  437,500
Shares shall vest subject to and upon the Common Stock’s satisfaction in full of
the performance condition set forth in Section 2(c) of the Option Agreement on
or before May 22, 2012.

     

    (v)  437,500
Shares shall vest subject to and upon the Company’s satisfaction in full of the
performance condition set forth in Section 2(d) of the Option Agreement on or
before May 22, 2011.

    There
shall be no proportionate or partial vesting of shares of Restricted Stock in or
during the months, days or periods prior to each vesting date, and all vesting
of shares of Restricted Stock shall occur only on the applicable vesting
date.

     

    (b)  The
Restricted Stock also shall become vested at such earlier times, if any, as
shall be provided in this Agreement or as shall otherwise be determined by the
Committee in its sole and absolute discretion.

     

    (c)  For
purposes of this Agreement, the following terms shall have the meanings
indicated:

     

    (i)  “Non-Vested Shares” means any
portion of the Restricted Stock subject to this Agreement that has not become
vested pursuant to this Section 2.

     

    (ii)  “Vested Shares” means any
portion of the Restricted Stock subject to this Agreement that is and has become
vested pursuant to this Section 2.

     

    3.  Delivery of Restricted
Stock.

     

    (a)  One
or more stock certificates evidencing the Restricted Stock shall be issued in
the name of the Recipient but shall be held and retained by the Secretary of the
Company until the date (the “Applicable
Date”) on which the shares (or a portion thereof) subject to this
Restricted Stock award become Vested Shares pursuant to Section 2 hereof,
subject to the provisions of Section 4 hereof.  All such stock
certificates shall bear the following legends, along with such other legends
that the Committee shall deem necessary and appropriate or which are otherwise
required or indicated pursuant to any applicable stockholders
agreement:

     

    THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO SUBSTANTIAL VESTING AND
OTHER RESTRICTIONS AS SET FORTH IN THE RESTRICTED STOCK AGREEMENT BETWEEN THE
ISSUER AND THE ORIGINAL HOLDER OF THE SHARES, A COPY OF WHICH MAY BE OBTAINED AT
THE PRINCIPAL OFFICE OF THE ISSUER.  SUCH RESTRICTIONS ARE BINDING ON
TRANSFEREES OF THESE SHARES, AND INCLUDE VESTING CONDITIONS WHICH MAY RESULT IN
THE COMPLETE FORFEITURE OF THE SHARES.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (b)  Recipient
shall deposit with the Company stock powers or other instruments of transfer or
assignment, duly endorsed in blank with signature(s) guaranteed, corresponding
to each certificate representing shares of Restricted Stock until such shares
become Vested Shares.  If Recipient shall fail to provide the Company
with any such stock power or other instrument of transfer or assignment,
Recipient hereby irrevocably appoints the Secretary of the Company as his
attorney-in-fact, with full power of appointment and substitution, to execute
and deliver any such power or other instrument which may be necessary to
effectuate the transfer of the Restricted Stock (or assignment of distributions
thereon) on the books and records of the Company.

     

    (c)  On
or after each Applicable Date, upon written request to the Company by Recipient,
the Company shall promptly cause a new certificate or certificates to be issued
for and with respect to all shares that become Vested Shares on that Applicable
Date, which certificate(s) shall be delivered to Recipient as soon as
administratively practicable after the date of receipt by the Company of
Recipient's written request.  The new certificate or certificates
shall not bear the legend set forth in Section 3(a) but shall continue to bear
those other legends and endorsements that the Company shall deem necessary or
appropriate (including those relating to restrictions on transferability and/or
obligations and restrictions under the Securities Act of 1933, as
amended).

     

    4.  Effect
of Termination of Employment or Other Relationship.  In
the event Recipient’s employment with the Company terminates for any reason, all
Non-Vested Shares then held by Recipient shall be forfeited immediately upon
such termination and shall revert back to the Company without any payment to
Recipient; provided, however, in the event
Recipient’s employment with the Company terminates due to Involuntary
Termination (as such term is defined in the Employment Agreement), then any
Non-Vested Shares as of the date of such Involuntary Termination shall remain
outstanding and subject to this Agreement and shall become vested if the vesting
condition with respect to such Non-Vested Shares set forth in Section 2 is
satisfied on the earlier of (a) the vesting date with respect to such Non-Vested
Shares set forth in Section 2 and (b) the (i) second anniversary of the date of
such Involuntary Termination if such Involuntary Termination occurs on or before
the first anniversary of the Effective Date and (ii) first anniversary of the
date of such Involuntary Termination if such Involuntary Termination occurs
after the first anniversary of the Effective Date.  Non-Vested Shares
as of the date of such Involuntary Termination shall be forfeited immediately
upon the earlier of the dates sets forth in subsections (a) and (b) above if the
vesting condition with respect to such Non-Vested Shares is not satisfied by the
earlier of the two aforementioned dates.  Unless the Committee
otherwise determines in its reasonable discretion, Recipient’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 determined by the
Committee in its reasonable discretion based upon such records.  The
Committee shall have the power and authority to enforce on behalf of the Company
any rights of the Company under this Agreement in the event of Recipient’s
forfeiture of Non-Vested Shares pursuant to this Section 4.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    5.  Rights
with Respect to Restricted Stock.

     

    (a)  Except
as otherwise provided in this Agreement, the Recipient shall have, with respect
to all of the shares of Restricted Stock, whether Vested Shares or Non-Vested
Shares, all of the rights of a holder of shares of Common Stock of the Company,
including without limitation (i) the right to vote such Restricted Stock, (ii)
the right to receive dividends, if any, as may be declared on the Restricted
Stock from time to time, and (iii) the rights available to all holders of shares
of Common Stock of the Company upon any merger, consolidation, reorganization,
liquidation or dissolution, stock split-up, stock dividend or recapitalization
undertaken by the Company; provided, however, that all of
such rights shall be subject to the terms, provisions, conditions and
restrictions set forth in this Agreement (including without limitation
conditions under which all such rights shall be forfeited).   Any
shares of Common Stock issued to the Recipient as a dividend with respect to
shares of Restricted Stock shall have the same status and bear the same legend
as the shares of Restricted Stock and shall be held by the Company, if the
shares of Restricted Stock that such dividend is attributed to is being so held,
unless otherwise determined by the Committee.  In addition,
notwithstanding any provision to the contrary herein, any cash dividends
declared with respect to shares of Restricted Stock subject to this Agreement
shall be held in escrow by the Committee until such time as the shares of
Restricted Stock that such cash dividends are attributed to shall become Vested
Shares, and in the event that such shares of Restricted Stock are subsequently
forfeited, the cash dividends attributable to such portion shall be forfeited as
well.

     

    (b)  If
at any time while this Agreement is in effect (or shares of Restricted Stock
granted hereunder shall be or remain unvested and outstanding), there shall be
any increase or decrease in the number of issued and outstanding shares of
Common Stock of the Company through the declaration of a stock dividend or
through any recapitalization resulting in a stock split-up, combination or
exchange of such shares of Common Stock, then and in that event, in view of such
change, the number of shares of Restricted Stock then subject to this Agreement
shall be appropriately adjusted.  If any such adjustment shall result
in a fractional share, such fraction shall be disregarded.

     

    (c)  Notwithstanding
any term or provision of this Agreement to the contrary, the existence of this
Agreement, or of any outstanding Restricted Stock awarded hereunder, shall not
affect in any manner the right, power or authority of the Company to make,
authorize or consummate: (i) any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business; (ii) any merger, consolidation or similar transaction by or of the
Company; (iii) any offer, issue or sale by the Company of any capital stock of
the Company, including any equity or debt securities, or preferred or preference
stock that would rank prior to or on parity with the Restricted Stock and/or
that would include, have or possess other rights, benefits and/or preferences
superior to those that the Restricted Stock includes, has or possesses, or any
warrants, options or rights with respect to any of the foregoing; (iv) the
dissolution or liquidation of the Company; (v) any sale, transfer or assignment
of all or any part of the stock, assets or business of the Company; or (vi) any
other corporate transaction, act or proceeding (whether of a similar character
or otherwise).

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    6.  Non-Transferability
of Non-Vested Shares.  Non-Vested
Shares shall not be pledged, hypothecated or otherwise encumbered or subject to
any lien, obligation or liability of Recipient to any party (other than the
Company), or assigned or transferred by Recipient otherwise than by will or the
laws of descent and distribution or to a beneficiary upon the death of
Recipient.  A beneficiary or other person claiming any rights under
this Agreement from or through Recipient shall be subject to all of the terms
and conditions of this Agreement, except as otherwise determined by the
Committee, and to any additional terms and conditions deemed necessary or
appropriate by the Committee.

     

    7.  Tax
Matters; Section 83(b) Election.

     

    (a)  If
Recipient properly elects, within thirty (30) days of the Date of Grant, to
include in gross income for federal income tax purposes an amount equal to the
fair market value (as of the Date of Grant) of the Restricted Stock pursuant to
Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”),
Recipient shall make arrangements satisfactory to the Company to pay to the
Company any federal, state or local income taxes required to be withheld with
respect to the Restricted Stock.  If Recipient shall fail to make such
tax payments as are required, the Company shall, to the extent permitted by law,
have the right to deduct from any payment of any kind otherwise due to Recipient
any federal, state or local taxes of any kind required by law to be withheld
with respect to the Restricted Stock.

     

    (b)  If
Recipient does not properly make the election described in Subsection 7(a)
above, Recipient shall, no later than the date or dates as of which the
restrictions referred to in this Agreement hereof shall lapse, pay to the
Company, or make arrangements reasonably satisfactory to the Committee for
payment of, any federal, state or local taxes of any kind required by law to be
withheld with respect to the Restricted Stock (including without limitation the
vesting thereof), and the Company shall, to the extent permitted by law, have
the right to deduct from any payment of any kind otherwise due to Recipient any
federal, state, or local taxes of any kind required by law to be withheld with
respect to the Restricted Stock.

     

    (c)  Tax
consequences on Recipient (including without limitation federal, state, local
and foreign income tax consequences) with respect to the Restricted Stock
(including without limitation the grant, vesting and/or forfeiture thereof) are
the sole responsibility of Recipient.  Recipient shall consult with
his or her own personal accountant(s) and/or tax advisor(s) regarding these
matters, the making of a Section 83(b) election, and Recipient’s filing,
withholding and payment (or tax liability) obligations.

     

    8.  Miscellaneous.

     

    8.1  No
Right to (Continued) Employment or Service.  This
Agreement and the grant of Restricted Stock hereunder shall not confer, or be
construed to confer, upon Recipient any right to employment or service, or
continued employment or service, with the Company.

     

    8.2  No
Limit on Other Compensation Arrangements.  Nothing
contained in this Agreement shall preclude the Company from adopting or
continuing in effect other or additional compensation plans, agreements or
arrangements, and any such plans, agreements and arrangements may be either
generally applicable or applicable only in specific cases or to specific
persons.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    8.3  No
Trust or Fund Created.  Neither
this Agreement nor the grant of Restricted Stock hereunder shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company and Recipient or any other
person.  To the extent that Recipient or any other person acquires a
right to receive payments from the Company pursuant to this Agreement, such
right shall be no greater than the right of any unsecured general creditor of
the Company.

     

    8.4  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.

     

    8.5  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.

     

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

     

    8.7  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.

     

    8.8  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.

     

    8.9  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.

     

    8.10  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 Recipient or the Company may be given to them at the following
addresses:

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              If
      to Recipient:

            	
              Gary
      C. Evans

              
                1046
      Texan Trail

                Grapevine,
      Texas 76051

                 

              

            
	 	If
      to Company:	
              Petro
      Resources Company

              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.

    

     

    8.11  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.

     

    8.12  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.

     

    8.13  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.

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the parties 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	 
	 	
                
                

                 

                 

                “Recipient”

                 

                 

              	 
	 	
                
                

                
                  /s/ Gary C.
      Evans

                

              	 
	 	
                Gary
      C. Evans

              	 

      

       

       

       

       

       8

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