Document:

exv10w33

 

Exhibit 10.33

ENDEAVOUR INTERNATIONAL CORPORATION

NONSTATUTORY STOCK OPTION AGREEMENT

     THIS NONSTATUTORY STOCK OPTION AGREEMENT (this “Agreement”) is made and entered into by and
between Endeavour International Corporation (the “Company”), and J. Michael Kirksey (“Grantee”), an
employee of the Company effective as of the Date of Grant as defined below.

     WHEREAS, Grantee shall be an employee of the Company on September 26, 2007, and as an
inducement for such employment and in connection with such employment, the Compensation Committee
of the Board of Directors of the Company, on behalf of the Company, authorized a grant to Grantee
of a nonstatutory stock option to purchase the Company’s common stock, par value $.001 per share
(the “Common Stock”), effective September 26, 2007, in the amount indicated below, which shall be
subject to the terms and conditions of this Agreement, with a view to increasing Grantee’s interest
in the Company’s welfare and growth; and

     WHEREAS, Grantee desires to receive such a nonstatutory option to purchase shares of Common
Stock as an inducement for his employment and in connection with his employment with the Company.

     NOW, THEREFORE, in consideration of the premises, mutual covenants and agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

     1. Grant of Nonstatutory Stock Option. Subject to the restrictions, forfeiture
provisions and other terms set forth herein, the Company hereby grants to the Grantee an option
(the “Option” or “Stock Option”) to purchase 400,000 full shares (the “Optioned Shares”) of Common
Stock at an “Option Price” equal to $2.00 per share. The Date of Grant of this Stock Option is
September 26, 2007.

     The “Option Period” shall commence on the Date of Grant and shall expire on the date
immediately preceding the fifth (5th) anniversary of the Date of Grant. This Stock
Option is a Nonstatutory Stock Option.

     2. Administration. This Agreement and the grant of the Option are subject to
administration by and the rules and procedures established by the “Committee” (as defined herein)
to administer this Agreement. The Committee shall mean the members of the compensation committee
of the Board who are independent members of the compensation committee of the Board and who at
least constitute a majority thereof, or if no such members are available, a majority of the
independent members of the Board. The Committee shall have the authority to construe and interpret
the terms of this Agreement and to provide omitted terms or definitions of terms to carry out this
Agreement. The Committee shall have the authority to take all actions that it deems advisable for
the administration of this Agreement. Any decision of the Committee in connection with this
Agreement shall be final, binding and conclusive on the parties hereto and any third parties,
including any individual or entity.

 

 

     3. Vesting: Time of Exercise. Except as specifically provided in this Agreement, the
Stock Option shall be vested and exercisable as follows:

     (a) With respect to 33.3% of the total Optioned Shares, the Stock Option shall vest and
become exercisable on September 26, 2008, provided the Grantee is employed by the Company or
a subsidiary on that date.

     (b) With respect to 33.3% of the total Optioned Shares, the Stock Option shall vest
and become exercisable on September 26, 2009, provided the Grantee is employed by the
Company or a subsidiary on that date.

     (c) With respect to 33.3% of the total Optioned Shares, the Stock Option shall vest
and become exercisable on September 26, 2010, provided the Grantee is employed by the
Company or a subsidiary on that date.

     (d) Grantee shall become 100% vested in the total Optioned Shares hereunder on the day
preceding an event which constitutes a Change in Control.

     For purposes of this Agreement, a “Change in Control” shall mean the occurrence of any of the
following events:

     (i) the Company (A) shall not be the surviving entity in any merger,
consolidation or other reorganization (or survives only as a subsidiary of an entity
other than a previously wholly-owned subsidiary of the Company) or (B) is to be
dissolved and liquidated, and as a result of or in connection with such transaction,
the persons who were directors of the Company before such transaction shall cease to
constitute a majority of the Board, or

     (ii) any person or entity, including a “group” as contemplated by Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains
ownership or control (including, without limitation, power to vote) of 30% or ore of
the outstanding shares of the Company’s voting stock (based upon voting power), and
as a result of or in connection with such transaction, the persons who were
directors of the Company before such transaction shall cease to constitute a
majority of the Board, or

     (iii) the Company sells all or substantially all of the assets of the Company
to any other person or entity (other than a wholly-owned subsidiary of the Company)
in a transaction that requires shareholder approval pursuant to applicable corporate
law; or

     (iv) During a period of two consecutive calendar years, individuals who at the
beginning of such period constitute the Board, and any new director(s) whose
election by the Board or nomination for election by the Company’s stockholders was
approved by a vote of at least a majority of the directors then still in office, who
either were directors at the beginning of the two (2) year period or whose election
or nomination for election was previously so approved, cease for any reason to
constitute a majority of the Board; or

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     (v) any other event that a majority of the Board, in its sole discretion, shall
determine constitutes a Change in Control hereunder.

     4. Term; Forfeiture. In the event of Grantee’s termination of employment with the
Company and its affiliates (a “Termination of Employment”) for any reason (including for cause)
other than Grantee’s death, disability or retirement, the Option outstanding on such date of
Termination of Employment, to the extent vested on such date, may be exercised by Grantee (or, in
the event of Grantee’s subsequent death, by Grantee’s Heir (as defined below)) within three months
following such Termination of Employment, but not thereafter. In the event that, as a result of
such Termination of Employment, Grantee is eligible to receive severance benefits under any Company
plan, program or severance agreement, the Option outstanding on such date of Termination of
Employment, to the extent vested on such date, may be exercised by Grantee (or, in the event of
Grantee’s subsequent death, by Grantee’s Heir (as defined below)) within twelve months following
such Termination of Employment, but not thereafter. However, in no event shall the Option be
exercisable after the fifth (5th) anniversary of the Grant Date. To the extent the
Option is not vested on Grantee’s date of Termination of Employment, the Option shall automatically
lapse and be canceled unexercised as of such date.

     In the event of Grantee’s Termination of Employment by reason of death, disability or
retirement, as determined by the Committee in its sole discretion, the Option shall be fully vested
on such date of termination and may be exercised by Grantee or, in the event of Grantee’s death, by
the person to whom Grantee’s rights shall pass by will or the laws of descent and distribution
(“Heir”), at any time within the two-year period beginning on Grantee’s Termination of Employment,
but not thereafter. However, in no event shall the Option be exercisable after the fifth
(5th) anniversary of the Grant Date.

     5. Who May Exercise. Subject to the terms and conditions set forth in Sections 3 and 4
above, during the lifetime of the Grantee, the Stock Option may be exercised only by the Grantee,
or by the Grantee’s guardian or personal or legal representative (in the event of his or her
Disability or by a broker dealer subject to Section 7 below).

     6. No Fractional Shares. The Stock Option may be exercised only with respect to full
shares, and no fractional share of stock shall be issued.

     7. Manner of Exercise. Subject to such administrative regulations as the Committee may
from time to time adopt, the Option may be exercised by the delivery of written notice to the
Committee or designated Company representative setting forth the number of shares of Common Stock
with respect to which the Option is to be exercised, the date of exercise thereof (the “Exercise
Date”) which shall be at least three (3) days after giving such notice unless an earlier time shall
have been mutually agreed upon. On the Exercise Date, the Grantee shall deliver to the Company
consideration with a value equal to the total Option Price of the shares to be purchased, payable
to the Company in full in either: (i) in cash or its equivalent, or (ii) subject to prior approval
by the Committee in its discretion, by tendering previously acquired shares of Common Stock having
an aggregate fair market value at the time of exercise equal to the total Option Price (provided
that the shares of Common Stock which are tendered must have been held by the Grantee for at least
six (6) months prior to their tender to satisfy the Option Price), or (iii) subject to prior
approval by the Committee in its discretion, by withholding shares of

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Common Stock which otherwise would be acquired on exercise having an aggregate fair market
value at the time of exercise equal to the total Option Price, or (iv) subject to prior approval by
the Committee in its discretion, by a combination of (i), (ii), and (iii) above. Any payment in
shares of Common Stock shall be effected by the surrender of such shares to the Company in good
form for transfer and shall be valued at their fair market value on the date when the Stock Option
is exercised. Unless otherwise permitted by the Committee in its discretion, the Grantee shall not
surrender, or attest to the ownership of, shares of Common Stock in payment of the Option Price if
such action would cause the Company to recognize compensation expense (or additional compensation
expense) with respect to the Option for financial reporting purposes.

     The Committee, in its discretion, also may allow the Option Price to be paid with such other
consideration as shall constitute lawful consideration for the issuance of shares of Common Stock
(including, without limitation, effecting a “cashless exercise” with a broker of the Option),
subject to applicable securities law restrictions and tax withholdings, or by any other means which
the Committee determines to be consistent with the Agreement’s purpose and applicable law. A
“cashless exercise” of an Option is a procedure by which a broker provides the funds to the Grantee
to effect an Option exercise, to the extent consented to by the Committee in its discretion. At
the direction of the Grantee, the broker will either (i) sell all of the shares of Common Stock
received when the Option is exercised and pay the Grantee the proceeds of the sale (minus the
Option Price, withholding taxes and any fees due to the broker) or (ii) sell enough of the shares
of Common Stock received upon exercise of the Option to cover the Option Price, withholding taxes
and any fees due the broker and deliver to the Grantee (either directly or through the Company) a
stock certificate for the remaining shares of Common Stock. Dispositions to a broker effecting a
cashless exercise are not exempt under Section 16 of the Exchange Act. In no event will the
Committee allow the Option Price to be paid with a form of consideration, including a loan or a
“cashless exercise,” if such form of consideration would violate the Sarbanes-Oxley Act of 2002 as
determined by the Committee in its discretion.

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

     If the Grantee fails to pay for any of the shares of Common Stock specified in such notice or
fails to accept delivery thereof, then the Option, and right to purchase such shares of Common
Stock may be forfeited by the Company.

     8. Nonassignability. The Stock Option is not assignable or transferable by the
Grantee except by will or by the laws of descent and distribution or pursuant to a domestic
relations order that would qualify as a qualified domestic relations order as defined in Section
414(p) of the Code, if such provision were applicable to the Stock Option.

     9. Rights as Stockholder. The Grantee will have no rights as a stockholder with
respect to any shares covered by the Stock Option until the issuance of a certificate or
certificates to the Grantee for the Optioned Shares. The Optioned Shares shall be subject to the
terms and

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conditions of this Agreement regarding such shares. Except as otherwise provided in Section 10
hereof, no adjustment shall be made for dividends or other rights for which the record date is
prior to the issuance of such certificate or certificates.

     10. Adjustment of Number of Optioned Shares and Related Matters. In the event that
any dividend or other distribution (whether in the form of cash, Common Stock, or other property),
recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off,
combination, repurchase, share exchange, liquidation, dissolution or other similar transaction or
event affects the Common Stock such that an adjustment is determined by the Committee to be
appropriate under this Agreement, then the Committee may make adjustments to this Agreement and the
Optioned Shares in accordance with applicable laws as it may deem equitable.

     11. Community Property. Each spouse individually is bound by, and such spouse’s
interest, if any, in any share of Common Stock is subject to, the terms of this Agreement. Nothing
in this Agreement shall create a community property interest where none otherwise exists.

     12. Dispute Resolution.

     (a) Arbitration. All disputes and controversies of every kind and nature
between any parties hereto arising out of or in connection with this Agreement or the
transactions described herein as to the construction, validity, interpretation or meaning,
performance, non-performance, enforcement, operation or breach, shall be submitted to
arbitration pursuant to the following procedures:

     (i) After a dispute or controversy arises, any party may, in a written notice
delivered to the other parties to the dispute, demand such arbitration. Such notice
shall designate the name of the arbitrator (who shall be an impartial person)
appointed by such party demanding arbitration, together with a statement of the
matter in controversy.

     (ii) Within 30 days after receipt of such demand, the other parties shall, in a
written notice delivered to the first party, name such parties’ arbitrator (who
shall be an impartial person). If such parties fail to name an arbitrator, then the
second arbitrator shall be named by the American Arbitration Association (the
“AAA”). The two arbitrators so selected shall name a third arbitrator (who shall be
an impartial person) within 30 days, or in lieu of such agreement on a third
arbitrator by the two arbitrators so appointed, the third arbitrator shall be
appointed by the AAA. If any arbitrator appointed hereunder shall die, resign,
refuse or become unable to act before an arbitration decision is rendered, then the
vacancy shall be filled by the method set forth in this Section for the original
appointment of such arbitrator.

     (iii) Each party shall bear its own arbitration costs and expenses. The
arbitration hearing shall be held in Houston, Texas at a location designated by a
majority of the arbitrators. The Commercial Arbitration Rules of the American

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Arbitration Association shall be incorporated by reference at such hearing and
the substantive laws of the State of Texas (excluding conflict of laws provisions)
shall apply.

     (iv) The arbitration hearing shall be concluded within ten (10) days unless
otherwise ordered by the arbitrators and the written award thereon shall be made
within fifteen (15) days after the close of submission of evidence. An award
rendered by a majority of the arbitrators appointed pursuant to this Agreement shall
be final and binding on all parties to the proceeding, shall resolve the question of
costs of the arbitrators and all related matters, and judgment on such award may be
entered and enforced by either party in any court of competent jurisdiction.

     (v) Except as set forth in Section 12(b) below, the parties stipulate that the
provisions of this Section shall be a complete defense to any suit, action or
proceeding instituted in any federal, state or local court or before any
administrative tribunal with respect to any controversy or dispute arising out of
this Agreement or the transactions described herein. The arbitration provisions
hereof shall, with respect to such controversy or dispute, survive the termination
or expiration of this Agreement.

No party to an arbitration may disclose the existence or results of any arbitration
hereunder without the prior written consent of the other parties; nor will any party to an
arbitration disclose to any third party any confidential information disclosed by any other
party to an arbitration in the course of an arbitration hereunder without the prior written
consent of such other party.

     (b) Emergency Relief. Notwithstanding anything in this Section 12 to the
contrary, any party may seek from a court any provisional remedy that may be necessary to
protect any rights or property of such party pending the establishment of the arbitral
tribunal or its determination of the merits of the controversy or to enforce a party’s
rights under Section 12.

     13. Grantee’s Representations. Notwithstanding any of the provisions hereof, the
Grantee hereby agrees that he will not exercise the Stock Option granted hereby, and that the
Company will not be obligated to issue any shares to the Grantee hereunder, if the exercise thereof
or the issuance of such shares of Common Stock shall constitute a violation by the Grantee or the
Company of any provision of any law or regulation of any governmental authority or Company
policies, or the rules of the stock exchange on which the Common Stock is listed or traded. Any
determination in this connection by the Company shall be final, binding, and conclusive. The
obligations of the Company and the rights of the Grantee are subject to all applicable laws, rules,
and regulations, rules of the stock exchange on which the Common Stock is listed or traded and
policies of the Company.

     14. Investment Representation. The Grantee represents and warrants to the Company that
all Common Stock which may be purchased hereunder will be acquired by the Grantee for

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investment purposes for his own account and not with any intent for resale or distribution in
violation of federal or state securities laws.

     15. Grantee’s Acknowledgments. The Grantee represents that he or she is familiar with
the terms and provisions of this Agreement, and hereby accepts this Option subject to all the terms
and provisions thereof. The Grantee hereby agrees to accept as binding, conclusive, and final all
decisions or interpretations of the Committee, the Company or the Board, as appropriate, upon any
questions arising under this Agreement.

     16. Law Governing. This Agreement shall be governed by, construed, and enforced in
accordance with the laws of the State of Texas (excluding any conflict of laws rule or principle of
Texas law that might refer the governance, construction, or interpretation of this agreement to the
laws of another state).

     17. No Right to Continue Service or Employment. Nothing herein shall be construed to
confer upon the Grantee the right to be employed or to provide services to the Company, its
affiliates or any parent or subsidiary or their affiliates, whether as an employee or as a
consultant or as a director of the Board, or interfere with or restrict in any way the right of the
Company or any of the other foregoing entities to discharge the Grantee as an employee, consultant
or director of the Board at any time.

     18. Legal Construction. In the event that any one or more of the terms, provisions, or
agreements that are contained in this Agreement shall be held by a court of competent jurisdiction
to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or
unenforceable term, provision, or agreement shall not affect any other term, provision, or
agreement that is contained in this Agreement and this Agreement shall be construed in all respects
as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained
herein.

     19. Covenants and Agreements as Independent Agreements. Each of the covenants and
agreements that is set forth in this Agreement shall be construed as a covenant and agreement
independent of any other provision of this Agreement. The existence of any claim or cause of action
of the Grantee against the Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of the covenants and agreements that are set
forth in this Agreement.

     20. Entire Agreement. This Agreement supersedes any and all other prior understandings
and agreements, either oral or in writing, between the parties with respect to the subject matter
hereof and constitute the sole and only agreements between the parties with respect to the said
subject matter. All prior negotiations and agreements between the parties with respect to the
subject matter hereof are merged into this Agreement. Each party to this Agreement acknowledges
that no representations, inducements, promises, or agreements, orally or otherwise, have been made
by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement
and that any agreement, statement or promise that is not contained in this Agreement shall not be
valid or binding or of any force or effect.

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     21. Parties Bound. The terms, provisions, and agreements that are contained in this
Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their
respective heirs, executors, administrators, legal representatives, and permitted successors and
assigns, subject to the limitation on assignment expressly set forth herein.

     22. Modification. No change or modification of this Agreement shall be valid or
binding upon the parties unless the change or modification is in writing and signed by the parties.

     23. Headings. The headings that are used in this Agreement are used for reference and
convenience purposes only and do not constitute substantive matters to be considered in construing
the terms and provisions of this Agreement.

     24. Gender and Number. Words of any gender used in this Agreement shall be held and
construed to include any other gender, and words in the singular number shall be held to include
the plural, and vice versa, unless the context requires otherwise.

     25. Independent Legal and Tax Advice. Grantee acknowledges that the Company has
advised Grantee to obtain independent legal and tax advice regarding entering into this Agreement,
the grant and exercise of the Option and the disposition of any shares of Common Stock acquired
thereby.

     26. Notice. Any notice required or permitted to be delivered hereunder shall be deemed
to be delivered only when actually received by the Company or by the Grantee, as the case may be,
at the addresses set forth below, or at such other addresses as they have theretofore specified by
written notice delivered in accordance herewith:

	 	(a)	 	Notice to the Company shall be addressed and delivered as follows:

	 	 	 	Endeavour International Corporation

1000 Main Street, Suite 3300

Houston, Texas 77002

Facsimile: (713) 307-8794

Attention: Corporate Secretary
	 
	 	(b)	 	Notice to the Grantee shall be addressed and delivered as set forth on the
signature page.

     27. Tax Requirements.

          (a) Tax Withholding. The Company shall have the power and the right to deduct
or withhold, or require the Grantee to remit to the Company, an amount sufficient to satisfy
the amount of federal, state, and local taxes, domestic or foreign, required by law or
regulation to be withheld with respect to any taxable event arising as a result of the
Agreement and this Option.

          (b) Share Withholding. With respect to tax withholding required upon the
exercise of Stock Options or upon any other taxable event arising as a result of the Stock
Option, Grantee may elect, subject to the approval of the Committee in its discretion, to

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satisfy the withholding requirement, in whole or in part, by having the Company
withhold shares of Common Stock having a fair market value on the date the tax is to be
determined equal to the statutory total tax which could be imposed on the transaction. All
such elections shall be made in writing, signed by the Grantee, and shall be subject to any
restrictions or limitations that the Committee, in its discretion, deems appropriate. Any
fraction of a share of Common Stock required to satisfy such obligation shall be disregarded
and the amount due shall instead be paid in cash by the Grantee.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer, and the Grantee, to evidence his consent and approval of all the terms hereof,
has duly executed this Agreement, effective as of the date specified in Section 1 hereof.

	 	 	 	 	 
	 

	 	COMPANY:
	 	 
	 
	 	 	 	 
	 	 	ENDEAVOUR INTERNATIONAL
	 	 	CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Don Teague 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

	 	 	 	 	 
	 

	 	GRANTEE:	 	 
	 
	 	 	 	 
	 	 	/s/ J. Michael Kirksey
	 	 	 
	 	 	J. Michael Kirksey
	 
	 	 	 	 
	 

	 	Address:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 

10exv10w34

 

Exhibit 10.34

ENDEAVOUR INTERNATIONAL CORPORATION

NONSTATUTORY STOCK OPTION AGREEMENT

     THIS NONSTATUTORY STOCK OPTION AGREEMENT (this “Agreement”) is made and entered into by and
between Endeavour International Corporation (the “Company”), and John G. Williams (“Grantee”), an
employee of the Company effective as of the Date of Grant as defined below.

     WHEREAS, Grantee shall be an employee of the Company on October 1, 2007, and as an inducement
for such employment and in connection with such employment, the Compensation Committee of the Board
of Directors of the Company, on behalf of the Company, authorized a grant to Grantee of a
nonstatutory stock option to purchase the Company’s common stock, par value $.001 per share (the
“Common Stock”), effective October 1, 2007, in the amount indicated below, which shall be subject
to the terms and conditions of this Agreement, with a view to increasing Grantee’s interest in the
Company’s welfare and growth; and

     WHEREAS, Grantee desires to receive such a nonstatutory option to purchase shares of Common
Stock as an inducement for his employment and in connection with his employment with the Company.

     NOW, THEREFORE, in consideration of the premises, mutual covenants and agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

     1. Grant of Nonstatutory Stock Option. Subject to the restrictions, forfeiture
provisions and other terms set forth herein, the Company hereby grants to the Grantee an option
(the “Option” or “Stock Option”) to purchase 200,000 full shares (the “Optioned Shares”) of Common
Stock at an “Option Price” equal to $1.14 per share. The Date of Grant of this Stock Option is
October 1, 2007.

     The “Option Period” shall commence on the Date of Grant and shall expire on the date
immediately preceding the fifth (5th) anniversary of the Date of Grant. This Stock
Option is a Nonstatutory Stock Option.

     2. Administration. This Agreement and the grant of the Option are subject to
administration by and the rules and procedures established by the “Committee” (as defined herein)
to administer this Agreement. The Committee shall mean the members of the compensation committee
of the Board who are independent members of the compensation committee of the Board and who at
least constitute a majority thereof, or if no such members are available, a majority of the
independent members of the Board. The Committee shall have the authority to construe and interpret
the terms of this Agreement and to provide omitted terms or definitions of terms to carry out this
Agreement. The Committee shall have the authority to take all actions that it deems advisable for
the administration of this Agreement. Any decision of the Committee in connection with this
Agreement shall be final, binding and conclusive on the parties hereto and any third parties,
including any individual or entity.

 

 

     3. Vesting: Time of Exercise. Except as specifically provided in this Agreement, the
Stock Option shall be vested and exercisable as follows:

     (a) With respect to 33.3% of the total Optioned Shares, the Stock Option shall vest and
become exercisable on October 1, 2008, provided the Grantee is employed by the Company or a
subsidiary on that date.

     (b) With respect to 33.3% of the total Optioned Shares, the Stock Option shall vest and
become exercisable on October 1, 2009, provided the Grantee is employed by the Company or a
subsidiary on that date.

     (c) With respect to 33.3% of the total Optioned Shares, the Stock Option shall vest and
become exercisable on October 1, 2010, provided the Grantee is employed by the Company or a
subsidiary on that date.

     (d) Grantee shall become 100% vested in the total Optioned Shares hereunder on the day
preceding an event which constitutes a Change in Control.

     For purposes of this Agreement, a “Change in Control” shall mean the occurrence of any of the
following events:

     (i) the Company (A) shall not be the surviving entity in any merger,
consolidation or other reorganization (or survives only as a subsidiary of an entity
other than a previously wholly-owned subsidiary of the Company) or (B) is to be
dissolved and liquidated, and as a result of or in connection with such transaction,
the persons who were directors of the Company before such transaction shall cease to
constitute a majority of the Board, or

     (ii) any person or entity, including a “group” as contemplated by Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains
ownership or control (including, without limitation, power to vote) of 30% or ore of
the outstanding shares of the Company’s voting stock (based upon voting power), and
as a result of or in connection with such transaction, the persons who were
directors of the Company before such transaction shall cease to constitute a
majority of the Board, or

     (iii) the Company sells all or substantially all of the assets of the Company
to any other person or entity (other than a wholly-owned subsidiary of the Company)
in a transaction that requires shareholder approval pursuant to applicable corporate
law; or

     (iv) During a period of two consecutive calendar years, individuals who at the
beginning of such period constitute the Board, and any new director(s) whose
election by the Board or nomination for election by the Company’s stockholders was
approved by a vote of at least a majority of the directors then still in office, who
either were directors at the beginning of the two (2) year period or whose election
or nomination for election was previously so approved, cease for any reason to
constitute a majority of the Board; or

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     (v) any other event that a majority of the Board, in its sole discretion, shall
determine constitutes a Change in Control hereunder.

     4. Term; Forfeiture. In the event of Grantee’s termination of employment with the
Company and its affiliates (a “Termination of Employment”) for any reason (including for cause)
other than Grantee’s death, disability or retirement, the Option outstanding on such date of
Termination of Employment, to the extent vested on such date, may be exercised by Grantee (or, in
the event of Grantee’s subsequent death, by Grantee’s Heir (as defined below)) within three months
following such Termination of Employment, but not thereafter. In the event that, as a result of
such Termination of Employment, Grantee is eligible to receive severance benefits under any Company
plan, program or severance agreement, the Option outstanding on such date of Termination of
Employment, to the extent vested on such date, may be exercised by Grantee (or, in the event of
Grantee’s subsequent death, by Grantee’s Heir (as defined below)) within twelve months following
such Termination of Employment, but not thereafter. However, in no event shall the Option be
exercisable after the fifth (5th) anniversary of the Grant Date. To the extent the
Option is not vested on Grantee’s date of Termination of Employment, the Option shall automatically
lapse and be canceled unexercised as of such date.

     In the event of Grantee’s Termination of Employment by reason of death, disability or
retirement, as determined by the Committee in its sole discretion, the Option shall be fully vested
on such date of termination and may be exercised by Grantee or, in the event of Grantee’s death, by
the person to whom Grantee’s rights shall pass by will or the laws of descent and distribution
(“Heir”), at any time within the two-year period beginning on Grantee’s Termination of Employment,
but not thereafter. However, in no event shall the Option be exercisable after the fifth
(5th) anniversary of the Grant Date.

     5. Who May Exercise. Subject to the terms and conditions set forth in Sections 3 and 4
above, during the lifetime of the Grantee, the Stock Option may be exercised only by the Grantee,
or by the Grantee’s guardian or personal or legal representative (in the event of his or her
Disability or by a broker dealer subject to Section 7 below).

     6. No Fractional Shares. The Stock Option may be exercised only with respect to full
shares, and no fractional share of stock shall be issued.

     7. Manner of Exercise. Subject to such administrative regulations as the Committee may
from time to time adopt, the Option may be exercised by the delivery of written notice to the
Committee or designated Company representative setting forth the number of shares of Common Stock
with respect to which the Option is to be exercised, the date of exercise thereof (the “Exercise
Date”) which shall be at least three (3) days after giving such notice unless an earlier time shall
have been mutually agreed upon. On the Exercise Date, the Grantee shall deliver to the Company
consideration with a value equal to the total Option Price of the shares to be purchased, payable
to the Company in full in either: (i) in cash or its equivalent, or (ii) subject to prior approval
by the Committee in its discretion, by tendering previously acquired shares of Common Stock having
an aggregate fair market value at the time of exercise equal to the total Option Price (provided
that the shares of Common Stock which are tendered must have been held by the Grantee for at least
six (6) months prior to their tender to satisfy the Option Price), or (iii) subject to prior approval by the Committee in its discretion, by withholding shares of

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Common Stock which otherwise would be acquired on exercise having an aggregate fair market value at
the time of exercise equal to the total Option Price, or (iv) subject to prior approval by the
Committee in its discretion, by a combination of (i), (ii), and (iii) above. Any payment in shares
of Common Stock shall be effected by the surrender of such shares to the Company in good form for
transfer and shall be valued at their fair market value on the date when the Stock Option is
exercised. Unless otherwise permitted by the Committee in its discretion, the Grantee shall not
surrender, or attest to the ownership of, shares of Common Stock in payment of the Option Price if
such action would cause the Company to recognize compensation expense (or additional compensation
expense) with respect to the Option for financial reporting purposes.

     The Committee, in its discretion, also may allow the Option Price to be paid with such other
consideration as shall constitute lawful consideration for the issuance of shares of Common Stock
(including, without limitation, effecting a “cashless exercise” with a broker of the Option),
subject to applicable securities law restrictions and tax withholdings, or by any other means which
the Committee determines to be consistent with the Agreement’s purpose and applicable law. A
“cashless exercise” of an Option is a procedure by which a broker provides the funds to the Grantee
to effect an Option exercise, to the extent consented to by the Committee in its discretion. At
the direction of the Grantee, the broker will either (i) sell all of the shares of Common Stock
received when the Option is exercised and pay the Grantee the proceeds of the sale (minus the
Option Price, withholding taxes and any fees due to the broker) or (ii) sell enough of the shares
of Common Stock received upon exercise of the Option to cover the Option Price, withholding taxes
and any fees due the broker and deliver to the Grantee (either directly or through the Company) a
stock certificate for the remaining shares of Common Stock. Dispositions to a broker effecting a
cashless exercise are not exempt under Section 16 of the Exchange Act. In no event will the
Committee allow the Option Price to be paid with a form of consideration, including a loan or a
“cashless exercise,” if such form of consideration would violate the Sarbanes-Oxley Act of 2002 as
determined by the Committee in its discretion.

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

     If the Grantee fails to pay for any of the shares of Common Stock specified in such notice or
fails to accept delivery thereof, then the Option, and right to purchase such shares of Common
Stock may be forfeited by the Company.

     8. Nonassignability. The Stock Option is not assignable or transferable by the
Grantee except by will or by the laws of descent and distribution or pursuant to a domestic
relations order that would qualify as a qualified domestic relations order as defined in Section
414(p) of the Code, if such provision were applicable to the Stock Option.

     9. Rights as Stockholder. The Grantee will have no rights as a stockholder with
respect to any shares covered by the Stock Option until the issuance of a certificate or
certificates to the Grantee for the Optioned Shares. The Optioned Shares shall be subject to the terms and

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conditions of this Agreement regarding such shares. Except as otherwise provided in Section 10
hereof, no adjustment shall be made for dividends or other rights for which the record date is
prior to the issuance of such certificate or certificates.

     10. Adjustment of Number of Optioned Shares and Related Matters. In the event that
any dividend or other distribution (whether in the form of cash, Common Stock, or other property),
recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off,
combination, repurchase, share exchange, liquidation, dissolution or other similar transaction or
event affects the Common Stock such that an adjustment is determined by the Committee to be
appropriate under this Agreement, then the Committee may make adjustments to this Agreement and the
Optioned Shares in accordance with applicable laws as it may deem equitable.

     11. Community Property. Each spouse individually is bound by, and such spouse’s
interest, if any, in any share of Common Stock is subject to, the terms of this Agreement. Nothing
in this Agreement shall create a community property interest where none otherwise exists.

     12. Dispute Resolution.

     (a) Arbitration. All disputes and controversies of every kind and nature
between any parties hereto arising out of or in connection with this Agreement or the
transactions described herein as to the construction, validity, interpretation or meaning,
performance, non-performance, enforcement, operation or breach, shall be submitted to
arbitration pursuant to the following procedures:

     (i) After a dispute or controversy arises, any party may, in a written notice
delivered to the other parties to the dispute, demand such arbitration. Such notice
shall designate the name of the arbitrator (who shall be an impartial person)
appointed by such party demanding arbitration, together with a statement of the
matter in controversy.

     (ii) Within 30 days after receipt of such demand, the other parties shall, in a
written notice delivered to the first party, name such parties’ arbitrator (who
shall be an impartial person). If such parties fail to name an arbitrator, then the
second arbitrator shall be named by the American Arbitration Association (the
“AAA”). The two arbitrators so selected shall name a third arbitrator (who shall be
an impartial person) within 30 days, or in lieu of such agreement on a third
arbitrator by the two arbitrators so appointed, the third arbitrator shall be
appointed by the AAA. If any arbitrator appointed hereunder shall die, resign,
refuse or become unable to act before an arbitration decision is rendered, then the
vacancy shall be filled by the method set forth in this Section for the original
appointment of such arbitrator.

     (iii) Each party shall bear its own arbitration costs and expenses. The
arbitration hearing shall be held in Houston, Texas at a location designated by a majority of the arbitrators. The Commercial Arbitration Rules of the American

5

 

Arbitration Association shall be incorporated by reference at such hearing and the
substantive laws of the State of Texas (excluding conflict of laws provisions) shall
apply.

     (iv) The arbitration hearing shall be concluded within ten (10) days unless
otherwise ordered by the arbitrators and the written award thereon shall be made
within fifteen (15) days after the close of submission of evidence. An award
rendered by a majority of the arbitrators appointed pursuant to this Agreement shall
be final and binding on all parties to the proceeding, shall resolve the question of
costs of the arbitrators and all related matters, and judgment on such award may be
entered and enforced by either party in any court of competent jurisdiction.

     (v) Except as set forth in Section 12(b) below, the parties stipulate that the
provisions of this Section shall be a complete defense to any suit, action or
proceeding instituted in any federal, state or local court or before any
administrative tribunal with respect to any controversy or dispute arising out of
this Agreement or the transactions described herein. The arbitration provisions
hereof shall, with respect to such controversy or dispute, survive the termination
or expiration of this Agreement.

     No party to an arbitration may disclose the existence or results of any arbitration
hereunder without the prior written consent of the other parties; nor will any party to an
arbitration disclose to any third party any confidential information disclosed by any other
party to an arbitration in the course of an arbitration hereunder without the prior written
consent of such other party.

     (b) Emergency Relief. Notwithstanding anything in this Section 12 to the
contrary, any party may seek from a court any provisional remedy that may be necessary to
protect any rights or property of such party pending the establishment of the arbitral
tribunal or its determination of the merits of the controversy or to enforce a party’s
rights under Section 12.

     13. Grantee’s Representations. Notwithstanding any of the provisions hereof, the
Grantee hereby agrees that he will not exercise the Stock Option granted hereby, and that the
Company will not be obligated to issue any shares to the Grantee hereunder, if the exercise thereof
or the issuance of such shares of Common Stock shall constitute a violation by the Grantee or the
Company of any provision of any law or regulation of any governmental authority or Company
policies, or the rules of the stock exchange on which the Common Stock is listed or traded. Any
determination in this connection by the Company shall be final, binding, and conclusive. The
obligations of the Company and the rights of the Grantee are subject to all applicable laws, rules,
and regulations, rules of the stock exchange on which the Common Stock is listed or traded and
policies of the Company.

     14. Investment Representation. The Grantee represents and warrants to the Company that
all Common Stock which may be purchased hereunder will be acquired by the Grantee for

6

 

investment purposes for his own account and not with any intent for resale or distribution in
violation of federal or state securities laws.

     15. Grantee’s Acknowledgments. The Grantee represents that he or she is familiar with
the terms and provisions of this Agreement, and hereby accepts this Option subject to all the terms
and provisions thereof. The Grantee hereby agrees to accept as binding, conclusive, and final all
decisions or interpretations of the Committee, the Company or the Board, as appropriate, upon any
questions arising under this Agreement.

     16. Law Governing. This Agreement shall be governed by, construed, and enforced in
accordance with the laws of the State of Texas (excluding any conflict of laws rule or principle of
Texas law that might refer the governance, construction, or interpretation of this agreement to the
laws of another state).

     17. No Right to Continue Service or Employment. Nothing herein shall be construed to
confer upon the Grantee the right to be employed or to provide services to the Company, its
affiliates or any parent or subsidiary or their affiliates, whether as an employee or as a
consultant or as a director of the Board, or interfere with or restrict in any way the right of the
Company or any of the other foregoing entities to discharge the Grantee as an employee, consultant
or director of the Board at any time.

     18. Legal Construction. In the event that any one or more of the terms, provisions, or
agreements that are contained in this Agreement shall be held by a court of competent jurisdiction
to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or
unenforceable term, provision, or agreement shall not affect any other term, provision, or
agreement that is contained in this Agreement and this Agreement shall be construed in all respects
as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained
herein.

     19. Covenants and Agreements as Independent Agreements. Each of the covenants and
agreements that is set forth in this Agreement shall be construed as a covenant and agreement
independent of any other provision of this Agreement. The existence of any claim or cause of action
of the Grantee against the Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of the covenants and agreements that are set
forth in this Agreement.

     20. Entire Agreement. This Agreement supersedes any and all other prior understandings
and agreements, either oral or in writing, between the parties with respect to the subject matter
hereof and constitute the sole and only agreements between the parties with respect to the said
subject matter. All prior negotiations and agreements between the parties with respect to the
subject matter hereof are merged into this Agreement. Each party to this Agreement acknowledges
that no representations, inducements, promises, or agreements, orally or otherwise, have been made
by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement
and that any agreement, statement or promise that is not contained in this Agreement shall not be
valid or binding or of any force or effect.

7

 

     21. Parties Bound. The terms, provisions, and agreements that are contained in this
Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their
respective heirs, executors, administrators, legal representatives, and permitted successors and
assigns, subject to the limitation on assignment expressly set forth herein.

     22. Modification. No change or modification of this Agreement shall be valid or
binding upon the parties unless the change or modification is in writing and signed by the parties.

     23. Headings. The headings that are used in this Agreement are used for reference and
convenience purposes only and do not constitute substantive matters to be considered in construing
the terms and provisions of this Agreement.

     24. Gender and Number. Words of any gender used in this Agreement shall be held and
construed to include any other gender, and words in the singular number shall be held to include
the plural, and vice versa, unless the context requires otherwise.

     25. Independent Legal and Tax Advice. Grantee acknowledges that the Company has
advised Grantee to obtain independent legal and tax advice regarding entering into this Agreement,
the grant and exercise of the Option and the disposition of any shares of Common Stock acquired
thereby.

     26. Notice. Any notice required or permitted to be delivered hereunder shall be deemed
to be delivered only when actually received by the Company or by the Grantee, as the case may be,
at the addresses set forth below, or at such other addresses as they have theretofore specified by
written notice delivered in accordance herewith:

	 	(a)	 	Notice to the Company shall be addressed and delivered as follows:
	 
	 	 	 	Endeavour International Corporation
	 
	 	 	 	1000 Main Street, Suite 3300
	 
	 	 	 	Houston, Texas 77002
	 
	 	 	 	Facsimile: (713) 307-8794
	 
	 	 	 	Attention: Corporate Secretary

     (b) Notice to the Grantee shall be addressed and delivered as set forth on the
signature page.

     27. Tax Requirements.

     (a) Tax Withholding. The Company shall have the power and the right to deduct
or withhold, or require the Grantee to remit to the Company, an amount sufficient to satisfy
the amount of federal, state, and local taxes, domestic or foreign, required by law or
regulation to be withheld with respect to any taxable event arising as a result of the
Agreement and this Option.

     (b) Share Withholding. With respect to tax withholding required upon the
exercise of Stock Options or upon any other taxable event arising as a result of the Stock
Option, Grantee may elect, subject to the approval of the Committee in its discretion, to

8

 

satisfy the withholding requirement, in whole or in part, by having the Company
withhold shares of Common Stock having a fair market value on the date the tax is to be
determined equal to the statutory total tax which could be imposed on the transaction. All
such elections shall be made in writing, signed by the Grantee, and shall be subject to any
restrictions or limitations that the Committee, in its discretion, deems appropriate. Any
fraction of a share of Common Stock required to satisfy such obligation shall be disregarded
and the amount due shall instead be paid in cash by the Grantee.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer, and the Grantee, to evidence his consent and approval of all the terms hereof,
has duly executed this Agreement, effective as of the date specified in Section 1 hereof.

	 	 	 	 	 	 	 
	 

	 	COMPANY:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ENDEAVOUR INTERNATIONAL

CORPORATION	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Don Teagye
	 

	 	 	 	 	 	 
	 	 	Name:	 	Don Teague	 	 
	 	 	Title:	 	Executive Vice President and
	 	 	 	 	General Counsel
	 
	 	 	 	 	 	 
	 	 	GRANTEE:
	 
	 	 	 	 	 	 
	 	 	/s/ John G. Williams
	 	 	 
	 	 	John G. Williams	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	 	 	 

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