VIVAKOR,INC. 2008INCENTIVE PLAN NOTICE OFNONSTATUTORY STOCK OPTION GRANT

December 2, 2009

Fritz Lin

250,000

$ 0.24

December 2, 2009

o Incentive Stock Option

o Nonstatutory Stock Option

Grant of Stock Option. As of the Date of Grant (identified in Section 19 below), Vivakor, Inc., a Nevada corporation (the “Company”), hereby grants a Nonstatutory Stock Option (the “Option”) to the Optionee (identified above), a director of the Company, to purchase the number of shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”), identified in Section 19 below (the “Shares”), subject to the terms and conditions of this agreement (the “Stock Option Agreement”) and the Company’s 2008 Incentive Plan effective February 1, 2008 (the “Plan”), which is hereby incorporated herein in its entirety by reference. The Shares, when issued to the Optionee upon the exercise of the Option, shall be fully paid and nonassessable. The Option is not an “incentive stock option” as defined in Section 422 of the Internal Revenue Code.

Definitions. All capitalized terms used herein shall have the meanings set forth in the Plan unless otherwise specifically provided herein. Section 19 below sets forth meanings for various capitalized terms used in this Agreement.

Option Term. The Option shall commence on the Date of Grant (identified in Section 19 below) and terminate on the date immediately prior to the tenth (10th) anniversary of the Date of Grant. The period during which the Option is in effect and may be exercised is referred to herein as the “Option Period.”

Option Price. The Option Price per Share is identified in Section 19 below.

Vesting. The total number of Shares subject to this Option shall vest in accordance with the Vesting Schedule (identified in Section 19 below). The Shares may be purchased at any time after they become vested, in whole or in part, during the Option Period; provided, however, the Option may only be exercisable to acquire whole Shares. The right of exercise provided herein shall be cumulative so that if the Option is not exercised to the maximum extent permissible after vesting, the vested portion of the Option shall be exercisable, in whole or in part, at any time during the Option Period.

Method of Exercise. The Option is exercisable by delivery of a written notice (a form of which is attached hereto) to the attention of the Chief Financial Officer of the Company at the address for notices to the Company provided below, signed by the Optionee, specifying the number of Shares to be acquired on, and the effective date of, such exercise. The Optionee may withdraw notice of exercise of this Option, in writing, at any time prior to the close of business on the business day preceding the proposed exercise date.

Method of Payment. The Option Price upon exercise of the Option shall be payable to the Company in full either: (i) in cash or its equivalent, or (ii) subject to prior approval by the Board of Directors or the Compensation Committee in its discretion, by tendering previously acquired Shares having an aggregate Fair Market Value (as defined in the Plan) at the time of exercise equal to the total Option Price (provided that the Shares must have been held by the Optionee for at least six (6) months prior to their tender to satisfy the Option Price), or (iii) subject to prior approval by the Board of Directors or the Compensation Committee in its discretion, by withholding Shares which otherwise would be acquired on exercise having an aggregate Fair Market Value at the time of exercise equal to the total Option Price (as determined pursuant to Section 2.3 of the Plan), or (iv) subject to prior approval by the Board of Directors or the Compensation 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 delivery of such shares to the Chief Financial Officer of the Company, duly endorsed in blank or accompanied by stock powers duly executed in blank, together with any other documents as the Chief Financial Officer may require. If the payment of the Option Price is remitted partly in Shares, the balance of the payment of the Option Price shall be paid in either cash, certified check, bank cashiers’ check, or by wire transfer.

 

The Board of Directors or the Compensation Committee, in its discretion, may allow (i) a “cashless exercise” as permitted under Federal Reserve Board’s Regulation T, 12 CFR Part 220 (or its successor), and subject to applicable securities law restrictions and tax withholdings, or (ii) any other means of exercise which the Board of Directors or the Compensation Committee, in its discretion, determines to be consistent with the Plan’s purpose and applicable law.

 

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

Restrictions on Exercise. The Option may not be exercised if the issuance of such Shares or the method of payment of the consideration for such Shares would constitute a violation of any applicable federal or state securities or other laws or regulations, including any such laws or regulations or Company policies respecting blackout periods, or any rules or regulations of any stock exchange on which the Common Stock may be listed.

Termination of Employment. Voluntary or involuntary termination of Employment and the death or Disability of Optionee shall affect Optionee’s rights under the Option as follows:

Non-Qualification as an Incentive Stock Option. The Optionee understands that the Option is not intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code. The Optionee further understands and agrees, that neither the Company nor the Board of Directors or the Compensation Committee shall be liable or responsible for any additional tax liability incurred by the Optionee because this Option is not an “incentive stock option” within the meaning of the Code.

Independent Legal and Tax Advice. Optionee acknowledges that the Company has advised Optionee to obtain independent legal and tax advice regarding the grant and exercise of the Option and the disposition of any Shares acquired thereby.

Reorganization of Company. The existence of the Option shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Shares or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

Adjustment of Shares. In the event of stock dividends, spin-offs of assets or other extraordinary dividends, stock splits, combinations of shares, recapitalizations, mergers, consolidations, reorganizations, liquidations, issuances of rights or warrants and similar transactions or events involving Company, appropriate adjustments shall be made to the terms and provisions of this Option as provided in the Plan.

No Rights in Shares. Optionee shall have no rights as a stockholder in respect of the Shares until the Optionee becomes the record holder of such Shares.

Investment Representation. Optionee will enter into such written representations, warranties and agreements as Company may reasonably request in order to comply with any federal or state securities law. Moreover, any stock certificate for any Shares issued to Optionee hereunder may contain a legend restricting their transferability as determined by the Company in its discretion. Optionee agrees that Company shall not be obligated to take any affirmative action in order to cause the issuance or transfer of Shares hereunder to comply with any law, rule or regulation that applies to the Shares subject to the Option.

No Guarantee of Employment. The Option shall not confer upon Optionee any right to continued Employment with the Company or any subsidiary or affiliate thereof.

Withholding of Taxes. This Option is subject to and the Company shall have the right to take any action as may be necessary or appropriate to satisfy any federal, state, or local tax withholding obligations, including at the Board of Directors or the Compensation Committee’s discretion, to make deductions from the number of Shares otherwise deliverable upon exercise of the Option in an amount sufficient to satisfy withholding of any federal, state or local taxes required by law.

 

Re:

Exercise of Nonstatutory Stock Option

My check in the amount of $___________.

Other (specify):                                                                                                           .