TOREADOR RESOURCES
CORPORATION
2005 LONG-TERM INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
1. Grant
of Option . Pursuant to the Toreador Resources Corporation 2005
Long-Term Incentive Plan (the “ Plan ”),
as adopted by Toreador Resources Corporation, a Delaware
corporation (the “ Company ”), the
Company grants to
Nigel J. Lovett
(the “ Participant ”)
who is an
employee of the Company, an option (sometimes referred to herein as
the (“ Stock Option ”) to purchase from
the Company a total of 38,070 full shares of Common Stock,
$0.15625 par value per share, of the Company (the “
Optioned Shares ”) at an “ Option
Price ” equal to $ 7.88 per share (being the
Fair Market Value per share of the Common Stock on this Date of
Grant or 110% of such Fair Market Value, in the case of a ten
percent (10%) or more stockholder as provided in Section 422
of the Internal Revenue Code of 1986, as amended (the “
Code ”)), in the amounts, during the periods
and upon the terms and conditions set forth in this
Agreement.
The “
Date of Grant ” of this Stock Option is
May 15, 2008 . The “ Option Period
” shall commence on the Date of Grant and shall expire on the
date immediately preceding the tenth (10 th )
anniversary of the Date of Grant (or the date immediately preceding
the fifth (5 th )
anniversary of the Date of Grant, in the case of a ten percent
(10%) or more stockholder as provided in Section 422 of the
Code). The Stock Option is intended to be an Incentive Stock
Option.
2.
Subject to Plan . This Stock Option and its exercise are
subject in all respects to the terms and conditions of the Plan,
and the terms of the Plan shall control to the extent not otherwise
inconsistent with the provisions of this Agreement. The defined
terms used herein that are defined in the Plan shall have the same
meanings defined for and assigned to them in the Plan. In addition,
this Stock Option is subject to any rules promulgated pursuant to
the Plan by the Board or the Committee and communicated to the
Participant in writing.
3.
Vesting; Time of Exercise . Except as otherwise provided in
the Plan or as specifically provided elsewhere in this Agreement,
this Stock Option shall be vested and exercisable no sooner than as
follows:
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Exercise
Date
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Number of
Shares
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1. One
(1) year from the Date of Grant
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Up to 33.33% of
the total Optioned Shares under the Stock Option
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2. Two
(2) years from the Date of Grant
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Up to an
additional 33.33% of the total Optioned Shares under the Stock
Option
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3. Three
(3) years from the Date of Grant
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Up to an
additional 33.34% of the total Optioned Shares under the Stock
Option
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2005 Long-Term
Incentive Plan
Incentive Stock Option Agreement — Lovett
May 15, 2008
2
provided , however , that in the event of:
(i) the Participant’s death; (ii) the
Participant’s Termination of Service by reason of Total and
Permanent Disability; or (iii) during the Employment Term (as
defined in the Employment Agreement dated March 12, 2008 by
and between the Company and the Participant, as may be amended (the
“Employment Agreement”), the occurrence of a Change in
Control and, following such Change in Control: (A) the
Participant’s Termination of Service by the Company without
Cause; (B) the Participant is demoted from the positions of
Chief Executive Officer and President; or (C) the
Participant’s authorities, powers, functions,
responsibilities or duties attached to the Participant’s
position with the Company which the Participant held on
March 12, 2008 are materially reduced, all shares of Common
Stock under this Stock Option which have not previously vested and
become exercisable shall automatically be accelerated and become
vested and exercisable in full, without regard to the vesting
limitations set forth above.
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(a)
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Except as otherwise provided in this
Agreement, to the extent the unexercised portion of this Stock
Option relates to Optioned Shares that are not vested on the
Participant’s Termination of Service, the Stock Option will
terminate on such date. The unexercised portion of this Stock
Option that relates to Optioned Shares that are vested will
terminate at the first to occur of the following:
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(i)
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5
p.m. on the date the Option Period terminates;
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(ii)
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5
p.m. on the date which is twelve (12) months following the
date of the Participant’s Termination of Service with the
Company or an Affiliate by reason of the Participant’s death
or Total and Permanent Disability;
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(iii)
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Immediately upon the
Participant’s Termination for Cause (as defined
herein);
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(iv)
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5
p.m. on the date which is three (3) months following the date
of the Participant’s Termination of Service for any reason
other than as set forth in subparagraphs (a)(ii) or (a)(iii) above
of this Section 4 .
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(v)
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5
p.m. on the date the Company causes any portion of the Stock Option
to be forfeited pursuant to Section 7
hereof.
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(b)
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For
purposes of this Sections 3 and 4 , “
Cause ” shall mean (i) the
Participant’s commission of a dishonest or fraudulent act in
connection with the Participant’s employment, or the
misappropriation of Company property; (ii) the
Participant’s conviction of, or plea of nolo contendere to, a
felony or crime involving dishonesty; (iii) the
Participant’s inattention to duties, unsatisfactory
performance, or failure to perform the Participant duties
hereunder, provided in each case the Company gives the Participant
written notice and thirty (30) days to correct the
Participant’s
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2005 Long-Term
Incentive Plan
Incentive Stock Option Agreement — Lovett
May 15, 2008
3
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performance to the Company’s
satisfaction; (iv) a substantial failure to comply with the
Company’s policies; (v) a material and willful breach of
the Participant’s fiduciary duties in any material respect,
provided in each case the Company gives the Participant written
notice and thirty (30) days to correct; (vi) the
Participant’s failure to comply in any material respect with
any legal written directive of the Board; or (vii) any act or
omission of the Participant which is of substantial detriment to
the Company because of the Participant’s intentional failure
to comply with any statute, rule or regulation, except any act or
omission believed by the Participant in good faith to have been in
or not opposed to the best interest of the Company (without intent
of the Participant to gain, directly or indirectly, a profit to
which the Participant was not legally entitled). Any determination
of whether an the Participant should be terminated for Cause
pursuant to this Agreement shall be made in the sole, good faith
discretion of the Board, and shall be binding upon all parties
affected thereby.
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5. Who
May Exercise . Subject to the terms and conditions set forth in
Sections 3 and 4 above, this Stock Option may be
exercised during the lifetime of the Participant only by the
Participant or by the Participant’s guardian or legal
representative. If the Participant’s Termination of Service
is due to death or Total and Permanent Disability prior to the
termination date specified in Section 4(a)(i) hereof,
the following persons may exercise this Stock Option on behalf of
the Participant at any time prior to the earlier of the dates
specified in Sections 4(a)(i), (ii) or (v) hereof:
(i) if the Participant has a Total and Permanent Disability,
the Participant or the guardian of the Participant; or (ii) if
the Participant dies, the personal representative of the
Participant’s estate or the person who acquired the right to
exercise this Stock Option by bequest or inheritance or by reason
of the death of the Participant; provided that this Stock Option
shall remain subject to the other terms of this Agreement, the
Plan, and applicable laws, rules and regulations.
6.
Restrictions on Exercise . This Stock Option may be
exercised in whole or in part, but only with respect to full shares
of Common Stock, and no fractional share of stock shall be issued.
In no event may this Stock Option be exercised or shares of Common
Stock be issued pursuant to this Agreement if any registration
under state or federal securities laws required under the
circumstances has not been accomplished.
7. Manner
of Exercise . Subject to such administrative regulations as the
Committee may from time to time adopt, the Stock Option may be
exercised by the delivery of written notice to the Committee
setting forth the number of shares of Common Stock with respect to
which the Stock 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, and
whether the Optioned Shares to be exercised will be considered as
deemed granted under an Incentive Stock Option as provided in
Section 11 . On the Exercise Date, the Participant
shall deliver to the Company consideration with a value equal to
the total Option Price of the shares to be purchased, payable as
follows: (a) cash, check, bank draft, or money order payable
to the order of the Company, (b) Common Stock (including
Restricted Stock) owned by the Participant on the
2005 Long-Term
Incentive Plan
Incentive Stock Option Agreement — Lovett
May 15, 2008
4
Exercise Date,
valued at its Fair Market Value on the Exercise Date, and which the
Participant has not acquired from the Company within six
(6) months prior to the Exercise Date, (c) by delivery
(including by FAX) to the Company or its designated agent of an
executed irrevocable option exercise form together with irrevocable
instructions from the Participant to a broker or dealer, reasonably
acceptable to the Company, to sell certain of the shares of Common
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