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QUEST RESOURCE CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
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To:
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Eddie M. LeBlanc, III ("you" or the
"Grantee")
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NOTICE OF GRANT:
Quest Resource Corporation (the "Company"), hereby grants you an
option (the "Option") to purchase common shares, $0.01 par value
per share, of Quest Resource Corporation ("Shares"), subject to the
terms and conditions of the Option Award Agreement between you and
the Company, attached as Exhibit A, as follows:
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Grant Date:
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January 12, 2009
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Total Number of Shares Subject to
Option:
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Three Hundred Thousand
(300,000)
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Option Price per Share ($):
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$ 0.62 (representing the closing price of the
Shares on Nasdaq on January 12, 2009)
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Expiration Date:
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January 12, 2019
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In order to fully understand your rights under the Option Award
Agreement, attached as Exhibit A, you are encouraged to read this
Agreement carefully. By accepting this Option, you are also
agreeing to be bound by Exhibit A .
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QUEST RESOURCE CORPORATION
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By:
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/s/ Jon H. Rateau
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Jon H. Rateau,
Chairman of the Board
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ACCEPTED BY GRANTEE
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/s/ Eddie M. LeBlanc, III
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Name:
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Eddie M. LeBlanc, III
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Date:
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January 14, 2009
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EXHIBIT A
AGREEMENT:
In consideration of the mutual promises and covenants contained
herein and other good and valuable consideration paid by the
Grantee to the Company, the Grantee and the Company agree as
follows:
In addition to those terms otherwise defined in
this Agreement, whenever used in this Agreement, the following
terms shall have the meanings set forth in the Glossary at the end
of this Agreement.
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Section 2.
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Grant of Nonqualified Stock
Option
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As of the Grant Date identified above, the
Company grants to the Grantee, subject to the terms and conditions
set forth herein, the right, privilege, and option (the "Option")
to purchase that number of Shares identified above opposite the
heading "Total Number of Shares Subject to Option," at the per
Share price specified above opposite the heading "Option Price per
Share."
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Section 3.
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Exercisability of Option
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(a)
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Except to the extent the Option is permitted to
be transferred to a person set forth in Section 8(b) of this Award
Agreement, during the Grantee's lifetime, this Option may be
exercised only by the Grantee. Provided the below Time Vesting
criteria are satisfied, as of the dates specified below, this
Option, except as specifically provided elsewhere under the terms
of this Award Agreement, shall become exercisable with respect to
that number of shares under the column stated "Number of Shares
Subject to Option Exercisable," provided that the Grantee is an
employee, and at all times since the Grant Date has been an
employee, of the Company on applicable Option exercise
date.
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Time Vesting
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Subject to accelerated vesting as provided below,
the Option may only be exercised as follows:
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On or After
January 9, 2010*
January 9, 2011
January 9, 2012
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Number of Shares Subject
to Option Exercisable
100,000 (1/3 of Option)
200,000 (2/3 of Option)
300,000 (100% of Option)
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*Anniversary of Grantee's Employment Commencement
Date
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(b)
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In no event will the Options granted under this
Agreement become fully exercisable if the Grantee has a Termination
of Affiliate on account of death or Disability.
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(c)
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If you have a Termination of Affiliation during
the Change of Control Period which is initiated by the Company or a
Subsidiary other than for Cause, or initiated by you for Good
Reason, then any unexercised portion of the Option, whether or not
exercisable on the date of such Termination of Affiliation, shall
thereupon be fully exercisable.
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Section 4.
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Method of Exercise
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Provided this Option has not expired, been
terminated or cancelled, that number of shares subject to the
Option which are exercisable in accordance with Section 3 above may
be exercised, in whole or in part and from time to time, by
delivery to the Company or its designee a written notice to the
Company or its designee which shall:
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(a)
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set forth the number of Shares with respect to
which the Option is to be exercised (such number must be in a
minimum amount of 50 Shares);
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(b)
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if the person exercising this Option is not the
Grantee, be accompanied by satisfactory evidence of such person's
right to exercise this Option; and
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(c)
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be accompanied by payment in full of the Option
Price (i) in the form of cash, personal or certified bank check or
electronic wire transfer payable to the order of the Company, (ii)
through the sale of the Shares acquired on exercise of this Option
through a broker-dealer to whom the Grantee has submitted an
irrevocable notice of exercise and irrevocable instructions to
deliver promptly to the Company the amount of sale or loan proceeds
sufficient to pay for such Shares, together with, if requested by
the Company, the amount of federal, state, local or foreign
withholding taxes payable by the Grantee by reason of such
exercise, (iii) through simultaneous sale through a broker of
Shares acquired on exercise, as permitted under Regulation T of the
Federal Reserve Board, (iv) by delivery to the Company (either by
authorization for direct transfer or by physical delivery through
proper endorsement of certificates) of a number of Shares then
owned by the Grantee, the Fair Market Value of which equals the
purchase price of the Shares purchased in connection with the
Option exercise; provided however, that Shares used for this
purpose must have been owned by the Grantee for such minimum period
of time as may be established from time to time by the Committee;
and provided further that the Fair Market Value of any Shares
delivered in payment of the purchase price upon exercise of the
Options shall be the Fair Market Value as of the exercise date,
which shall be the date of the transfer of the Stock used as
payment of the exercise price, or in lieu of actually surrendering
to the Company the Stock then owned by the Grantee, the Committee
may, in its discretion permit the Grantee to submit to the Company
a statement affirming ownership by the Grantee of such number of
Shares and request that such Shares, although not actually
surrendered, be deemed to have been surrendered by the Grantee as
payment of the exercise price, or (v) any other means allowable by
the Committee which, in its sole discretion, determines will
provide legal consideration for the Shares.
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3
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Section 5.
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Expiration of Option
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Unless terminated earlier in accordance with the
terms of this Award Agreement , the Option granted herein shall
expire at 5:00 P.M., Oklahoma City time, on the tenth (10
th ) Anniversary of the Grant Date (the "Expiration
Date"). In the event the Expiration Date is a Saturday, Sunday or
any other day which is a holiday of the United States Federal
Government (a "Non-Business Day"), then the Option granted herein
shall expire, unless earlier terminated in a accordance with the
terms of this Award Agreement, at 5:00 P.M., Oklahoma City time, on
the first day that is not a Non-Business Day (a "Business Day")
following such Expiration Date.
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Section 6.
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Effect of Termination of
Affiliation
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If the Grantee has a Termination of Affiliation
for any reason, including termination by the Company with or
without Cause, voluntary resignation, death, or Disability, the
effect of such Termination of Affiliation on all or any portion of
this Option is as provided below.
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(a)
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If the Grantee has a Termination of Affiliation
within the Option Term due to the Grantee's ceasing to be employed
by the Company, the Option, to the extent exercisable, may be
exercised by the Grantee at any time prior to 5:00 P.M., Oklahoma
City time, on the ninetieth (90th) calendar day following the
Grantee's Termination of Affiliation (but in no event later than
the Expiration Date). In the event that such ninetieth (90th) day
shall not be a Business Day, then the Option shall expire at 5:00
P.M., Oklahoma City time, on the first (1st) Business Day
immediately following such ninetieth (90th) day. In any such case,
the Option may be exercised only as to the Shares as to which the
Option had become exercisable on or before the date of the
Termination of Affiliation.
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(b)
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If the Grantee dies or becomes Disabled within
the Option Term (A) while he or she is an employee of the Company,
or (B) within the ninety-day period referred to in clause (a)
above, the Option may be exercised by the Grantee or the Grantee's
Beneficiaries entitled to do so at any time prior to 5:00 P.M.,
Oklahoma City time, on the 365 th calendar day following
the date of the Grantee's death or Disability (but in no event
later than the Expiration Date). In the event that the 365
th day is not a Business Day, then the Option shall
expire at 5:00 P.M., Oklahoma City time, on the first (1st)
Business Day immediately following such 365 th
day.
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Section 7.
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Investment Intent
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The Grantee agrees that the Shares acquired on
exercise of this Option shall be acquired for his/her own account
for investment only and not with a view to, or for resale in
connection with, any distribution or public offering thereof within
the meaning of the Securities Act of 1933 (the "1933 Act") or other
applicable securities laws. If the Committee so determines, any
share certificates issued upon exercise of this Option shall bear a
legend to the effect that the Shares have been so acquired. The
Company may, but in no event shall be required to, bear any
expenses of complying with the 1933 Act, other applicable
securities laws or the rules and regulations of any national
securities exchange or other regulatory authority in connection
with the registration, qualification, or
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transfer, as the case may be, of this Option or
any Shares acquired upon the exercise thereof. The foregoing
restrictions on the transfer of the Shares shall be inoperative if
(a) the Company previously shall have been furnished with an
opinion of counsel, satisfactory to it, to the effect that such
transfer will not involve any violation of the 1933 Act and other
applicable securities laws or (b) the Shares shall have been duly
registered in compliance with the 1933 Act and other applicable
state or federal securities laws. If this Option, or the Shares
subject to this Option, are so registered under the 1933 Act, the
Grantee agrees that he will not make a public offering of the said
Shares except on a national securities exchange on which the common
shares of the Company are then listed.
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Section 8.
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Nontransferability of
Option
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(a)
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Except as provided above in Section 6(b) (in the
event of the Grantee's death) or below in Section 8(b), no portion
of the Option granted hereunder may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by
will, by the laws of descent and distribution. All rights with
respect to the Option granted to the Grantee shall be available
during his or her lifetime only to the Grantee.
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(b)
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Pursuant to conditions and procedures established
by the Committee from time to time, the Committee may permit the
Option to be transferred to, exercised by and paid to (a) the
Grantee's child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law (including adoptive
relationships), (b) any person sharing the Grantee's household
(other than a tenant or employee), (c) a trust in which persons
described in (a) or (b) have more than 50% of the beneficial
interest, (d) a foundation in which persons described in (a) or (b)
or the Grantee owns more than 50% of the voting interests; provided
such transfer is not for value. Any pe
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