-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A+rd9TBjE5eAt5gP418phKOg/3uGXAbu6ImS1U1ZDdRRLKcbcvaO0c5vQ/QgdwHE SZwMTqHZaajO9VhlmcUa3w== 0000950129-99-003509.txt : 19990810 0000950129-99-003509.hdr.sgml : 19990810 ACCESSION NUMBER: 0000950129-99-003509 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19990805 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PETROQUEST ENERGY INC CENTRAL INDEX KEY: 0000872248 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 980115468 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-19020 FILM NUMBER: 99681414 BUSINESS ADDRESS: STREET 1: 625 E KALISTE SALOOM ROAD SUITE 400 CITY: LAFAYETTE STATE: LA ZIP: 70508 BUSINESS PHONE: 3182327028 MAIL ADDRESS: STREET 1: 600 595 HOWE ST STREET 2: VANCOUVER BRITISH COLUMBIA CITY: CANADA V6C 2T5 STATE: A1 FORMER COMPANY: FORMER CONFORMED NAME: OPTIMA PETROLEUM CORP DATE OF NAME CHANGE: 19950726 8-K 1 PETROQUEST ENERGY, INC. - DATED AUGUST 5, 1999 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 5, 1999 PETROQUEST ENERGY, INC. (Exact name of registrant as specified in its charter) Delaware (State of incorporation) 1-9020 98-0115468 (Commission File Number) (IRS Employer Identification No.) 625 E. Kaliste Saloom Road, Suite 400 Lafayette, Louisiana 70508 (Address of Registrant's principal executive offices) Registrant's telephone number, including area code (318) 232-7028 Not Applicable (Former name or former address, if changed since last report) 2 ITEM 5. OTHER EVENTS On August 5, 1999, PetroQuest Energy, Inc. announced the initial funding of a private placement of 5 million units at a purchase price of US$1.00 per unit for a total consideration of US$5,000,000 before fees and expenses. Of the total consideration, US$4,000,000 has been received with the remaining funds expected to be received within the next two weeks. The proceeds from the private placement will be used for drilling and exploration costs, delay rentals on oil and gas leases and working capital and general corporate purposes. Each unit sold in the private placement consists of one share of the Company's common stock and one warrant exercisable to purchase one-half a share of the Company's common stock. Each warrant is exercisable at any time through the fourth year after issuance to purchase one-half of a share of the Company's common stock at a per share purchase price of US$1.25. In addition, the Company has agreed to file a registration statement covering the resale of the Company's common stock underlying the units and the shares of Company common stock issuable on exercise of the warrants within 60 days after the closing of the private placement. The securities offered pursuant to the private placement will not be or have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The foregoing includes certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in the foregoing that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future, including drilling of wells, reserve estimates, future production of oil and gas, future cash flows and other such matters are forward-looking statements. Such forward-looking statements are subject to certain risks, uncertainties and other factors which could cause actual results to differ materially from those currently anticipated. These factors include, without limitation, uncertainties inherent in estimating proven oil and gas reserves, future rates of production and timing of development expenditures; results of exploratory and developmental drilling; operating hazards attendant to the oil and gas business; the successful identification, acquisition and development of properties; and changes in the price received for oil and gas which may effect results of operation and cash flows. Readers are cautioned that any such statements are not guarantees of future performance and the Company can give no assurance that actual results or developments will not differ materially from those projected in the forward-looking statements. ITEM 7. FINANCIAL STATEMENT AND EXHIBITS a. Financial Statement of Business Acquired None. 3 b. Pro Forma Financial Information None. c. Exhibits 4.1 Form of Warrant 4.2 Form of Placement Agent Warrant 10.1 First Amendment to Executive Employment Agreement between the Company and Charles T. Goodson dated July 30, 1999. 10.2 First Amendment to Executive Employment Agreement between the Company and Alfred J. Thomas, II dated July 30, 1999. 10.3 First Amendment to Executive Employment Agreement between the Company and Ralph J. Daigle dated July 30, 1999. 10.4 First Amendment to Executive Employment Agreement between the Company and Robert R. Brooksher dated July 30, 1999. 10.5 First Amendment to Termination Agreement between the Company and Charles T. Goodson dated July 30, 1999. 10.6 First Amendment to Termination Agreement between the Company and Alfred J. Thomas, II dated July 30, 1999. 10.7 First Amendment to Termination Agreement between the Company and Ralph J. Daigle dated July 30, 1999. 10.8 First Amendment to Termination Agreement between the Company and Robert R. Brooksher dated July 30, 1999. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: August 6, 1999 PETROQUEST ENERGY, INC. By: /s/ Robert R. Brooksher ------------------------------------- Robert R. Brooksher Chief Financial Officer and Secretary 4 INDEX OF EXHIBITS
Exhibit Number Description -------------- ----------- 4.1 Form of Warrant 4.2 Form of Placement Agent Warrant 10.1 First Amendment to Executive Employment Agreement between the Company and Charles T. Goodson dated July 30, 1999. 10.2 First Amendment to Executive Employment Agreement between the Company and Alfred J. Thomas, II dated July 30, 1999. 10.3 First Amendment to Executive Employment Agreement between the Company and Ralph J. Daigle dated July 30, 1999. 10.4 First Amendment to Executive Employment Agreement between the Company and Robert R. Brooksher dated July 30, 1999. 10.5 First Amendment to Termination Agreement between the Company and Charles T. Goodson dated July 30, 1999. 10.6 First Amendment to Termination Agreement between the Company and Alfred J. Thomas, II dated July 30, 1999. 10.7 First Amendment to Termination Agreement between the Company and Ralph J. Daigle dated July 30, 1999. 10.8 First Amendment to Termination Agreement between the Company and Robert R. Brooksher dated July 30, 1999.
EX-4.1 2 FORM OF WARRANT 1 EXHIBIT 4.1 [FORM OF WARRANT] THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ARE SUBJECT TO CERTAIN RESTRICTIONS, CONTAINED IN SECTION 5 HEREOF, WITH RESPECT TO THEIR TRANSFER. THE SECURITIES ISSUABLE UPON EXERCISE HEREOF ARE LISTED ON THE TORONTO STOCK EXCHANGE; HOWEVER, THE SAID SECURITIES CAN NOT BE TRADED THROUGH THE FACILITIES OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT GOOD DELIVERY IN SETTLEMENT OF TRANSACTIONS ON THE TORONTO STOCK EXCHANGE. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF PETROQUEST ENERGY, INC. WARRANT NO. SHARES ---------- ---------- ___________, 1999 This Warrant certifies that, for value received, ____________________ (or any subsequent permitted transferee of this Warrant, as applicable the "Holder") is entitled initially to subscribe for and purchase from PetroQuest Energy, Inc., a Delaware corporation (the "Company"), _________ shares of the Company's common stock, par value $.001 per share (the common stock, including any stock into which it may be changed, reclassified or converted, is herein referred to as the "Common Stock"), at the purchase price (the "Exercise Price") of $1.25 per share (subject to adjustment as provided herein). This Warrant is subject to the following provisions, terms and conditions: 1. EXERCISE OF WARRANTS A. EXERCISE OF WARRANTS. This Warrant may be exercised by the Holder, in whole or in part, subject to the provisions hereof (but not as to a fractional share of Common Stock), 1 2 by (a) surrender of this Warrant at the principal office of the Company located at 625 E. Kaliste Saloom Road, Suite 400, Lafayette, Louisiana 70508 (or such other office or agency of the Company as may be designated by notice in writing to the Holder at the address of such Holder appearing on the books of the Company) with the appropriate form attached hereto duly executed, at any time within the period beginning August 3, 1999 and expiring at 5:00 p.m. Lafayette, Louisiana time on August 2, 2003 [four years from date hereof] (the "Exercise Period") and (b) payment to the Company by certified check or bank draft of the Exercise Price for such shares. The Company agrees that the shares of Common Stock so purchased shall be and are deemed to be issued to the Holder and/or the Holder's designee as the record owner of such shares of Common Stock as of the close of business on the date on which the Warrant shall have been surrendered and payment made for such shares of Common Stock. Certificates representing the shares of Common Stock so purchased, together with any cash for fractional shares of Common Stock paid pursuant to Section 2G, shall be delivered to the Holder promptly and in no event later than 10 days after the Warrants shall have been so exercised, and, unless the Warrants have expired, a new Warrant representing the number of shares of Common Stock, if any, in respect of which this Warrant shall not have been exercised also shall be delivered to the Holder within such time. 2. ADJUSTMENTS A. ADJUSTMENT OF EXERCISE PRICE. In case (i) the outstanding shares of the Common Stock shall be subdivided into a greater number of shares, (ii) a dividend or other distribution in Common Stock shall be paid in respect of Common Stock, (iii) the outstanding shares of Common Stock shall be combined into a smaller number of shares thereof, or (iv) any shares of the Company's capital stock are issued by reclassification of the Common Stock (including any reclassification upon a consolidation or merger in which Company is the continuing corporation), the Exercise Price per share in effect immediately prior to such subdivision, combination or reclassification or at the record date of such dividend or distribution shall simultaneously with the effectiveness of such subdivision, combination or reclassification or immediately after the record date of such dividend or distribution be proportionately adjusted to equal the product obtained by multiplying the Exercise Price by a fraction, the numerator of which is the number of outstanding shares of Common Stock (on a fully diluted basis) prior to such combination, subdivision, reclassification or dividend, and the denominator of which is that number of outstanding shares of Common Stock (on a fully diluted basis) after giving effect to such combination, subdivision, reclassification or dividend. Any dividend paid or distributed on the Common Stock in stock or any other securities convertible into shares of Common Stock shall be treated as a dividend paid in Common Stock to the extent that shares of Common Stock are issuable upon the conversion thereof. 2 3 For purposes of this Warrant, "on a fully diluted basis" means that all outstanding options, rights or warrants to subscribe for shares of Common Stock and all securities convertible into or exchangeable for shares of Common Stock (such options, rights, warrants and securities are collectively referred to herein as "Convertible Securities") and all options or rights to acquire Convertible Securities have been exercised, converted or exchanged. Whenever the Exercise Price per share is adjusted as provided in the immediately preceding paragraph, the number of shares of the Common Stock purchasable upon exercise of the Warrant immediately prior to such Exercise Price adjustment shall be adjusted, effective simultaneously with such Exercise Price adjustment, to equal the product obtained (calculated to the nearest full share) by multiplying such number of shares of the Common Stock by a fraction, the numerator of which is the Exercise Price per share in effect immediately prior to such Exercise Price adjustment and the denominator of which is the Exercise Price per share in effect upon such Exercise Price adjustment, which adjusted number of shares of the Common Stock shall thereupon be the number of shares of the Common Stock purchasable upon exercise of the Warrant until further adjusted as provided herein. B. NOTICE OF ADJUSTMENTS OF EXERCISE PRICE. Whenever the Exercise Price is adjusted as herein provided, the Company shall deliver to each Holder, within 20 days after such adjustment, a written notice setting forth (1) the adjusted Exercise Price and the adjusted number of shares of Common Stock that may be acquired on the exercise of this Warrant, (2) the calculation of such adjustment and (3) the facts upon which such calculation is based. C. PARTIAL LIQUIDATING DIVIDEND. In the event that the Company shall make any distribution of its assets upon or with respect to its Common Stock as a partial liquidating dividend, other than as a dividend payable out of earnings or any surplus legally available for dividends under the laws of the state of incorporation of the Company, the Holder shall, upon the exercise of this Warrant after the record date for such distribution or, in the absence of a record date, after the date of such distribution, receive, in addition to the shares subscribed for, the amount of such assets which would have been distributed to the Holder if it had exercised this Warrant immediately prior to the record date for such distribution or, in the absence of a record date, immediately prior to the date of such distribution. D. RECLASSIFICATION, CONSOLIDATION, MERGER, SALE, ETC. If any capital reorganization or reclassification of the capital stock of the Company or any other corporation Controlled (as defined below) by or under common Control with the Company, or a consolidation or merger of the Company or such other corporation with another corporation, or the sale of all or substantially all of the Company's or such other corporation's assets to another corporation, shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities, cash or assets with respect to or in exchange for Common Stock, then, as a condition for such reorganization, reclassification, consolidation, merger or sale, the Company or such successor purchasing corporation shall agree that the Holder of this Warrant 3 4 shall have the right thereafter and until the expiration of the Exercise Period to exercise this Warrant into the kind and amount of stock, securities, cash or assets receivable upon such reorganization, reclassification, consolidation, merger or sale that the Holder hereof would have been entitled to receive had such Holder exercised this Warrant immediately prior to such reorganization, reclassification, consolidation, merger or sale, subject to adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for herein. In such case, the Company shall take such steps in connection with such reorganization, consolidation, merger or sale as may be necessary to assure the Holder that the provisions of this Warrant shall be applicable to the shares of stock or other securities or property thereafter deliverable upon the exercise of this Warrant. In the case of partial exercise of this Warrant under such circumstances, the number of shares of Common Stock underlying this Warrant or other securities or property which have been receivable upon the full exercise of this Warrant, and the sum payable therefor, shall be proportionately reduced. For purposes of this Warrant, "Control" (and with its correlative meanings "Controlled by" and "under common Control with") means, in the case of a corporation, the ownership of more than 50% of the outstanding voting securities thereof or the right to acquire such securities within 60 days and, in the case of any other type of entity, an interest that results in the ability to direct or cause the direction of the management and policies of such entity or the power to appoint 50% or more of the members of the governing body of the entity. E. ADJUSTMENT FOR ISSUANCE OR SALE OF COMMON STOCK AT LESS THAN THE EXERCISE PRICE. In case at any time or from time to time the Company prior to expiration of the Exercise Period issues Common Stock for a consideration with a value per share less than the Exercise Price, or Convertible Securities which are exercisable or convertible into Common Stock at an effective conversion or exercise price per share less than the Exercise Price, then the Exercise Price shall be computed by dividing (i) the sum of (X) the product obtained by multiplying the number of shares of Common Stock of the Company outstanding immediately prior to such issue or sale (on a fully diluted basis) by the Exercise Price per share in effect immediately prior to such issue or sale, plus (Y) the aggregate consideration, if any, received by the Company upon such issue or sale, plus (Z) the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exercise thereof, by (ii) the number of shares of Common Stock of the Company outstanding immediately after such issue or sale (on a fully diluted basis). Whenever the Exercise Price per share is adjusted based on the computation set forth in the immediately preceding paragraph, the number of shares of Common Stock purchasable upon exercise of the Warrant immediately prior to such Exercise Price adjustment shall be computed, effective simultaneous with the Exercise Price adjustment, to equal the product obtained (calculated to the nearest full share) by multiplying such number of shares of Common Stock by a fraction, the numerator of which is the Exercise Price per share in effect immediately prior to such Exercise Price adjustment and the denominator of which is the adjusted Exercise Price per 4 5 share computed under the immediately preceding paragraph, which adjusted number of shares of Common Stock shall thereupon be the number of shares of Common Stock purchasable upon exercise of the Warrant until further adjusted as provided herein. F. STATEMENT ON WARRANT CERTIFICATES. This Warrant need not be amended or modified because of any change in the Exercise Price or in the number or kind of shares purchasable upon the exercise of this Warrant. Any Warrant thereafter issued, whether in exchange or substitution for any outstanding Warrant or otherwise, may be in the form so amended or modified. G. FRACTIONAL INTEREST. The Company shall not be required to issue fractional shares of Common Stock on the exercise of this Warrant. The number of full shares of Common Stock which shall be issuable upon such exercise shall be computed on the basis of the aggregate number of whole shares of Common Stock purchasable on exercise of the Warrant so presented. If any fraction of a share of Common Stock would, except for the provisions of this Section 2G, be issuable on the exercise of this Warrant, the Company shall, in lieu of issuing such fractional share of Common Stock, pay an amount in cash equal to the Current Fair Market Value per share of Common Stock (as defined below), multiplied by the fraction of a share of Common Stock otherwise issuable. For purposes of this Warrant, the "CURRENT FAIR MARKET VALUE" of a share of Common Stock on any day shall mean (i) the closing sales price on the immediately preceding business day of a share of Common Stock as reported on the principal securities exchange on which shares of Common Stock are then listed or admitted to trading or (ii) if not so reported, the average of the closing bid and asked prices for a share of Common Stock on the immediately preceding business day as quoted on the National Association of Securities Dealers Automated Quotation System ("NASDAQ") or (iii) if not quoted on NASDAQ, the average of closing bid and asked prices for a share of Common Stock as quoted by the National Quotation Bureau's "Pink Sheets" or the National Association of Securities Dealers' OTC Bulletin Board System. If the price of a share of Common Stock shall not be so reported, the Current Fair Market Value of a share of Common Stock shall be determined by the Board in good faith. 3. RESERVATION AND AUTHORIZATION OF COMMON STOCK The Company represents and warrants (a) that all shares of Common Stock which may be issued upon the exercise of this Warrant will, upon issuance, be validly issued, fully paid and nonassessable and free of all transfer taxes, liens and charges with respect to the issue thereof, (b) that during the Exercise Period, the Company will at all times have authorized, and reserved for the purpose of issue or transfer upon exercise of this Warrant, sufficient shares of Common Stock to provide for the exercise of this Warrant and (c) that the shares of Common Stock issuable upon the exercise of this Warrant may be so issued without violation of any applicable 5 6 law or regulation, or any requirement of any securities exchange upon which any capital stock of the Company may be listed. 4. NO VOTING RIGHTS This Warrant shall not entitle the Holder hereof to any voting rights or other rights as a stockholder of the Company. 5. RESTRICTIONS ON TRANSFER This Warrant is transferable by the Holder only to its "affiliates;" provided, however, if such Affiliate is a resident of Ontario Canada, no transfer of this Warrant shall be permitted until after February 3, 2000. "Affiliate" means a person or entity that directly or indirectly controls, is controlled by or is under common control with, the Holder. Subject to the provisions of this Section 5, this Warrant is transferable in the same manner and with the same effect as in the case of a negotiable instrument payable to a specified person. The Company, however, may treat the registered Holder hereof as the owner hereof for all purposes until this Warrant shall have been surrendered for transfer as hereinafter provided. Upon surrender of this Warrant duly executed by the Holder hereof or his agent or attorney, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and this Warrant shall promptly be canceled. This Warrant and the shares of Common Stock issuable upon the exercise of this Warrant are not transferable directly or indirectly, in whole or in part, except in the case of any such transfer (a) which is in compliance with applicable federal and state securities laws, including but not limited to, the Securities Act and (b) for which the Company is provided with an opinion of counsel to the Holder, reasonably satisfactory to the Company, to the effect that such transfer is not in violation of any of said securities laws. The certificates representing the shares of Common Stock issuable upon the exercise of this Warrant will bear restrictive legends evidencing such restrictions. 6. CLOSING OF BOOKS The Company will at no time close its transfer books against the transfer of any Warrant or of any shares of Common Stock or other securities issuable upon the exercise of any Warrant in any manner which interferes with the timely exercise of the Warrants. 6 7 7. WARRANTS EXCHANGEABLE; LOSS, THEFT This Warrant is exchangeable, upon the surrender hereof by any Holder at the office or agency of the Company referred to in Section 1 hereof, for a new Warrant or Warrants of like tenor representing in the aggregate the right to subscribe for and purchase the number of shares of Common Stock which may be subscribed for and purchased hereunder, each such new Warrant to represent the right to subscribe and purchase such number of shares of Common Stock as shall be designated by said Holder hereof at the time of such surrender. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation, or upon surrender or cancellation of this Warrant, the Company will issue to the Holder hereof a new Warrant of like tenor, in lieu of this Warrant, representing the right to subscribe for and purchase the number of shares of Common Stock which may be subscribed for and purchased hereunder. 8. INCORPORATION OF SUBSCRIPTION AGREEMENT The terms and conditions of the subscription agreement between the Company and the Holder dated the date hereof (including the representations, warranties and covenants made therein) are incorporated herein by reference and shall be deemed to be made herein. 9. OTHER COVENANTS A. NO IMPAIRMENT. The Company shall not by any action, including, without limitation, amending its certificate of incorporation, any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate to protect the rights of the Holder hereof against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any shares of Common Stock issuable upon the exercise of this Warrant above the amount payable therefor upon such exercise, (b) take all such action as may be necessary or appropriate in order that the Company may validly issue full paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (c) obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant. B. INDEMNIFICATION. The Company shall indemnify, save and hold harmless the Holder from and against any and all liability, loss, cost, damage, reasonable attorneys' and accountants, fees and expenses, court costs and all other out-of-pocket expenses incurred in connection with or arising from any default by the Company under this Warrant. 7 8 10. NOTICE OF CERTAIN EVENTS If, at any time prior to the expiration of this Warrant and prior to its exercise, any of the following events shall occur: A. The Company shall take a record of the holders of its shares of Common Stock for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of current or retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company; or B. The Company shall offer to the holders of its Common Stock any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor; or C. A dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or merger) or a sale of all or substantially all of its property, assets and business as an entirety shall be proposed; or D. Any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, any reclassification of change of Common Stock issuable upon exercise of this Warrant, or a tender offer or exchange offer for shares of Common Stock; then, in any one or more of such events, the Company shall give written notice of such event at least 15 days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the shareholders entitled to such dividend, distribution, convertible or exchangeable securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of closing the transfer books, as the case may be. Failure to give such notice or any defect therein shall not affect the validity of any action taken in connection with the declaration or payment of any such dividend, or the issuance of any convertible or exchangeable securities, or subscription rights, options or warrants, or any proposed dissolution, liquidation, winding up or sale. The Company shall give 15 days' prior written notice of any change in the Company's principal office. 11. NOTICES All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been duly made when delivered: 8 9 A. If to the registered Holder of this Warrant, to the address of such Holder as shown on the books of the Company; or B. If to the Company, to the address set forth on the first page of this Warrant, or to such other address specified in prior written notice given and delivered by the Company to the Holder. 12. SUCCESSORS All the covenants, agreements, representations and warranties contained in this Warrant shall bind the parties hereto and their respective heirs, personal representatives, successors and assigns. 13. LAW GOVERNING This Warrant shall be construed and enforced in accordance with, and governed by, the laws of the State of New York. [SIGNATURE PAGE FOLLOWS] 9 10 Dated this ___ day of ____________, 1999. PETROQUEST ENERGY, INC. By: ------------------------------------- Charles T. Goodson President and Chief Executive Officer 10 11 [FORM OF ELECTION TO PURCHASE] (To be executed upon exercise of Warrant.) The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to purchase _____ shares of Common Stock and herewith tenders in payment for such shares a certified check or bank draft payable to the order of PetroQuest Energy, Inc. in the amount of $__________, all in accordance with the terms hereof. The undersigned requests that a certificate for such shares be registered in the name of ____________________ whose address is __________________________________________ and that such certificate (or any payment in lieu thereof) be delivered to ________________________ whose address is _____________________________________. Dated: -------------------- --------------------------------------- (Signature must conform in all respects to name of Holder as specified on the face of the Warrant.) 11 12 [FORM OF ASSIGNMENT] (To be signed only upon transfer of Warrant) For value received, the undersigned hereby sells, assigns and transfers unto __________________________________ the right represented by the enclosed Warrant to purchase _______________ shares of Common Stock of PetroQuest Energy, Inc. to which the enclosed Warrant relates, and appoints ______________________ Attorney to transfer such right on the books of PetroQuest Energy, Inc. with full power of substitution in the premises. The undersigned represents and warrants that the transfer of the enclosed Warrant is permitted by the terms of the Warrant Agreement pursuant to which the enclosed Warrant has been issued, and the transferee hereof, by his acceptance of this Agreement, represents and warrants that he is familiar with the terms of said Warrant Agreement and agrees to be bound by the terms thereof with the same force and effect as if a signatory thereto. Dated: -------------------- --------------------------------------- (Signature must conform in all respects to name of Holder as specified on the face of the Warrant.) --------------------------------------- (Address) Signed in the presence of: - --------------------------------- 12 EX-4.2 3 FORM OF PLACEMENT AGENT WARRANT 1 EXHIBIT 4.2 [FORM OF PLACEMENT AGENT WARRANT] THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ARE SUBJECT TO CERTAIN RESTRICTIONS, CONTAINED IN SECTION 6 HEREOF, WITH RESPECT TO THEIR TRANSFER. THE SECURITIES ISSUABLE UPON EXERCISE HEREOF ARE LISTED ON THE TORONTO STOCK EXCHANGE; HOWEVER, THE SAID SECURITIES CAN NOT BE TRADED THROUGH THE FACILITIES OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT GOOD DELIVERY IN SETTLEMENT OF TRANSACTIONS ON THE TORONTO STOCK EXCHANGE. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF PETROQUEST ENERGY, INC. WARRANT NO. SHARES ------- ------- ___________, 1999 This Warrant certifies that, for value received, _____________ (or any subsequent permitted transferee of this Warrant, as applicable, the "Holder") is entitled initially to subscribe for and purchase from PetroQuest Energy, Inc., a Delaware corporation (the "Company"), ________ shares of the Company's common stock, par value $.001 per share (the common stock, including any stock into which it may be changed, reclassified or converted, is herein referred to as the "Common Stock"), at the purchase price (the "Exercise Price") of $1.25 per share (subject to adjustment as provided herein). This Warrant is subject to the following provisions, terms and conditions: 1. EXERCISE OF WARRANTS A. EXERCISE OF WARRANTS. This Warrant may be exercised by the Holder, in whole or in part, subject to the provisions hereof (but not as to a fractional share of Common Stock), 2 by (a) surrender of this Warrant at the principal office of the Company located at 625 E. Kaliste Saloom Road, Suite 400, Lafayette, Louisiana 70508 (or such other office or agency of the Company as may be designated by notice in writing to the Holder at the address of such Holder appearing on the books of the Company) with the appropriate form attached hereto duly executed, at any time within the period beginning _____________, 1999 and expiring at 5:00 p.m. Lafayette, Louisiana time on _____________ [five years from date hereof] (the "Exercise Period") and (b) payment to the Company by certified check or bank draft of the Exercise Price for such shares. The Company agrees that the shares of Common Stock so purchased shall be and are deemed to be issued to the Holder and/or the Holder's designee as the record owner of such shares of Common Stock as of the close of business on the date on which the Warrant is surrendered and payment made for such shares of Common Stock. Certificates representing the shares of Common Stock so purchased, together with any cash for fractional shares of Common Stock paid pursuant to Section 2G, shall be delivered to the Holder no later than 10 days after the date on which the Warrants have been so exercised, and, unless the Warrants have expired, a new Warrant representing the number of shares of Common Stock, if any, in respect of which this Warrant has not been exercised also shall be delivered to the Holder within such time. 2. ADJUSTMENTS A. ADJUSTMENT OF EXERCISE PRICE. In case (i) the outstanding shares of the Common Stock shall be subdivided into a greater number of shares, (ii) a dividend or other distribution in Common Stock shall be paid in respect of Common Stock, (iii) the outstanding shares of Common Stock shall be combined into a smaller number of shares thereof, or (iv) any shares of the Company's capital stock are issued by reclassification of the Common Stock (including any reclassification upon a consolidation or merger in which Company is the continuing corporation), the Exercise Price per share in effect immediately prior to such subdivision, combination or reclassification or at the record date of such dividend or distribution shall simultaneously with the effectiveness of such subdivision, combination or reclassification or immediately after the record date of such dividend or distribution be adjusted to equal the product obtained by multiplying such Exercise Price by a fraction, the numerator of which is the number of outstanding shares of Common Stock (on a fully diluted basis) prior to such combination, subdivision, reclassification or dividend, and the denominator of which is that number of outstanding shares of Common Stock (on a fully diluted basis) after giving effect to such combination, subdivision, reclassification or dividend. Any dividend paid or distributed on the Common Stock in any securities convertible into or exchanged into shares of Common Stock shall be treated as a dividend paid in Common Stock to the extent that shares of Common Stock are issuable upon the conversion thereof. For purposes of this Warrant, "on a fully diluted basis" means the number of shares of Common Stock outstanding, if all outstanding options, rights or warrants to subscribe for shares 2 3 of Common Stock and all securities convertible into or exchangeable for shares of Common Stock (such options, rights, warrants and securities are collectively referred to herein as "Convertible Securities") and all options or rights to acquire Convertible Securities were exercised, converted or exchanged. Whenever the Exercise Price per share is adjusted as provided in the immediately preceding paragraph, the number of shares of the Common Stock purchasable upon exercise of the Warrant immediately prior to such Exercise Price adjustment shall be adjusted, effective simultaneously with such Exercise Price adjustment, to equal the product obtained (calculated to the nearest full share) by multiplying such number of shares of the Common Stock by a fraction, the numerator of which is the Exercise Price per share in effect immediately prior to such Exercise Price adjustment and the denominator of which is the Exercise Price per share in effect upon such Exercise Price adjustment, which adjusted number of shares of the Common Stock shall thereupon be the number of shares of the Common Stock purchasable upon exercise of the Warrant until further adjusted as provided herein. B. NOTICE OF ADJUSTMENTS OF EXERCISE PRICE. Whenever the Exercise Price is adjusted as herein provided, the Company shall deliver to each Holder, within 20 days after such adjustment, a written notice setting forth (1) the adjusted Exercise Price and the adjusted number of shares of Common Stock that may be acquired on the exercise of this Warrant, (2) the calculation of such adjustment and (3) the facts upon which such calculation is based. C. PARTIAL LIQUIDATING DIVIDEND. In the event that the Company shall make any distribution of its assets upon or with respect to its Common Stock as a partial liquidating dividend, other than as a dividend payable out of earnings, or any surplus legally available for dividends under the laws of the state of incorporation of the Company, the Holder shall, upon the exercise of this Warrant after the record date for such distribution or, in the absence of a record date, after the date of such distribution, receive, in addition to the shares subscribed for, the amount of such assets which would have been distributed to the Holder if it had exercised this Warrant immediately prior to the record date for such distribution or, in the absence of a record date, immediately prior to the date of such distribution. D. RECLASSIFICATION, CONSOLIDATION, MERGER, SALE, ETC. If any capital reorganization or reclassification of the capital stock of the Company or any other corporation Controlled (as defined below) by or under common Control with the Company, or a consolidation or merger of the Company or such other corporation with another corporation, or the sale of all or substantially all of the Company's or such other corporation's assets to another corporation, shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities, cash or assets with respect to or in exchange for Common Stock, then, as a condition for such reorganization, reclassification, consolidation, merger or sale, the Company or such successor purchasing corporation shall agree that the Holder of this Warrant shall have the right thereafter and until the expiration of the Exercise Period to exercise this Warrant into the kind and amount of stock, securities, cash or assets receivable upon such reorganization, reclassification, consolidation, merger or sale that the Holder hereof would have 3 4 been entitled to receive had such Holder exercised this Warrant immediately prior to such reorganization, reclassification, consolidation, merger or sale, subject to adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for herein. In such case, the Company shall take such steps in connection with such reorganization, consolidation, merger or sale as may be necessary to assure the Holder that the provisions of this Warrant shall be applicable to the shares of stock or other securities or property thereafter deliverable upon the exercise of this Warrant. In the case of partial exercise of this Warrant under such circumstances, the number of shares of Common Stock underlying this Warrant or other securities or property which have been receivable upon the full exercise of this Warrant, and the sum payable therefor, shall be proportionately reduced. For purposes of this Warrant, "Control" (and with its correlative meanings "Controlled by" and "under common Control with") means, in the case of a corporation, direct or indirect ownership (or the right to acquire such ownership within 60 days of the date in question) of more than 50% of the then outstanding voting securities of such corporation and, in the case of any other type of entity, an interest that results in the ability to direct or cause the direction of the management and policies of such entity or the power to appoint 50% or more of the members of the governing body of the entity. E. ADJUSTMENT FOR ISSUANCE OR SALE OF COMMON STOCK AT LESS THAN THE EXERCISE PRICE. In case at any time or from time to time the Company prior to expiration of the Exercise Period issues Common Stock for a consideration with a value per share less than the Exercise Price, or Convertible Securities which are exercisable or convertible into Common Stock at an effective conversion or exercise price per share less than the Exercise Price, then an adjusted Exercise Price shall be determined by dividing (i) the sum of (X) the product obtained by multiplying the number of shares of Common Stock of the Company outstanding immediately prior to such issue or sale (on a fully diluted basis) by the Exercise Price per share in effect immediately prior to such issue or sale, plus (Y) the aggregate consideration, if any, received by the Company upon such issue or sale, plus (Z) the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exercise thereof, by (ii) the number of shares of Common Stock of the Company outstanding immediately after such issue or sale (on a fully diluted basis). Whenever the Exercise Price per share is adjusted based on the computation set forth in the immediately preceding paragraph, the number of shares of Common Stock purchasable upon exercise of the Warrant immediately prior to such Exercise Price adjustment shall be computed, effective simultaneous with the Exercise Price adjustment, to equal the product obtained (calculated to the nearest full share) by multiplying such number of shares of Common Stock by a fraction, the numerator of which is the Exercise Price per share in effect immediately prior to such Exercise Price adjustment and the denominator of which is the adjusted Exercise Price per share computed under the immediately preceding paragraph, which adjusted number of shares of Common Stock shall thereupon be the number of shares of Common Stock purchasable upon exercise of the Warrant until further adjusted as provided herein. 4 5 F. STATEMENT ON WARRANT CERTIFICATES. This Warrant need not be amended or modified because of any change in the Exercise Price or in the number or kind of shares purchasable upon the exercise of this Warrant. Any Warrant thereafter issued, whether in exchange or substitution for any outstanding Warrant or otherwise, may be in the form so amended or modified. G. FRACTIONAL INTEREST. The Company shall not be required to issue fractional shares of Common Stock on the exercise of this Warrant. The number of full shares of Common Stock which shall be issuable upon such exercise shall be computed on the basis of the aggregate number of whole shares of Common Stock purchasable on exercise of the Warrant so presented. If any fraction of a share of Common Stock would, except for the provisions of this Section 2G, be issuable on the exercise of this Warrant, the Company shall, in lieu of issuing such fractional share of Common Stock, pay an amount in cash equal to the Current Fair Market Value per share of Common Stock (as defined below), multiplied by the fraction of a share of Common Stock otherwise issuable. For purposes of this Warrant, the "CURRENT FAIR MARKET VALUE" of a share of Common Stock on any given day shall mean (i) the closing sales price of a share of Common Stock as reported on the principal securities exchange on which shares of Common Stock are then listed or admitted to trading or (ii) if not so reported, the average of the closing bid and asked prices for a share of Common Stock as quoted on the National Association of Securities Dealers Automated Quotation System ("NASDAQ") or (iii) if not quoted on NASDAQ, the average of closing bid and asked prices for a share of Common Stock as quoted by the National Quotation Bureau's "Pink Sheets" or the National Association of Securities Dealers' OTC Bulletin Board System. If the price of a share of Common Stock shall not be so reported, the Current Fair Market Value of a share of Common Stock shall be determined by the Board in good faith, and the basis of any such determination shall be made available to the Holder. 3. WARRANT REPURCHASE RIGHTS A. GENERAL. If at any time after the date hereof but prior to the expiration of the Expiration Period the Current Fair Market Value of a share of Common Stock is $3.00 or more (as adjusted for stock splits, combinations and other similar corporate events) for a period of 20 consecutive trading days (the "Consecutive Trading Day Period"), the Company, at the option of the Board of Directors, may repurchase from the holders of this Warrant, out of funds legally available therefor, at a purchase price of $0.05 per Warrant (plus any amounts due under Sections 2C and 2D hereof), all but not less than all, of the Warrants outstanding on the date set for such repurchases, provided that the right of the Company to repurchase the Warrants under this Section 3A is subject to the Company mailing the written notice in accordance with Section 3B within 30 days following the Consecutive Trading Day Period. B. REPURCHASE NOTICE. The Company shall provide written notice (the "Repurchase Notice") of any optional repurchase of Warrants under this Section 3, not less than 15 days prior 5 6 to the date fixed or designated for such repurchase, to the Holders of record as of such notice date of the outstanding Warrants at their respective addresses then appearing on the records of the Company. Each Repurchase Notice shall be by certified mail, return receipt requested and shall specify (i) the repurchase date and (ii) the place for payment and for delivering necessary transfer instruments to be executed by the Holder in order for the Holder to receive the repurchase price of $0.05 per Warrant. No Holder of Warrants repurchased in accordance with this Section 3 shall be entitled to receive payment of the purchase price for such Warrants until such Holder causes to be delivered to the Company the Warrants to be repurchased in accordance with the notice. From and after the repurchase date set forth in the Repurchase Notice and the setting aside of the funds necessary for the repurchase, notwithstanding that any Warrants so called for repurchase shall not have been surrendered for cancellation, the Warrants to be repurchased shall no longer be deemed outstanding, and the Holders of the Warrants shall have with respect thereto no rights in, or with respect to, the Company except the right to receive, upon the surrender of the Warrants, the $0.05 per Warrant purchase price therefor. C. EXERCISE PRIOR TO REPURCHASE DATE. Notwithstanding any provision contained herein to the contrary, the Holder of this Warrant may exercise all or any portion of this Warrant in accordance with Section 1 hereof but only during the ten day period after receipt of the Repurchase Notice, in which event, the Company's option to purchase the Warrants under this Section 3 shall terminate and be of no further force and effect. 4. RESERVATION AND AUTHORIZATION OF COMMON STOCK The Company represents and warrants (a) that all shares of Common Stock which may be issued upon the exercise of this Warrant will, upon issuance, be validly issued, fully paid and nonassessable and free of all transfer taxes, liens and charges with respect to the issue thereof, (b) that during the Exercise Period, the Company will at all times have authorized, and reserved for the purpose of issue or transfer upon exercise of this Warrant, sufficient shares of Common Stock to provide for the exercise of this Warrant and (c) that the shares of Common Stock issuable upon the exercise of this Warrant may be so issued without violation of any applicable law or regulation, or any requirement of any securities exchange upon which any capital stock of the Company may be listed. 5. NO VOTING RIGHTS This Warrant shall not entitle the Holder hereof to any voting rights or other rights as a stockholder of the Company. 6 7 6. RESTRICTIONS ON TRANSFER This Warrant is transferable by the Holder only to its "affiliates;" provided, however, if such affiliate is a resident of Ontario Canada, no transfer of this Warrant shall be permitted until after November 11, 1999. "Affiliate" means a person or entity that directly or indirectly controls, is controlled by or is under common control with, the Holder. Subject to the provisions of this Section 5, this Warrant is transferable in the same manner and with the same effect as in the case of a negotiable instrument payable to a specified person. The Company, however, may treat the registered Holder hereof as the owner hereof for all purposes until this Warrant shall have been surrendered for transfer as hereinafter provided. Upon surrender of this Warrant duly executed by the Holder hereof or his agent or attorney, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and this Warrant shall promptly be canceled. This Warrant and the shares of Common Stock issuable upon the exercise of this Warrant are not transferable directly or indirectly, in whole or in part, except in the case of any such transfer (a) which is in compliance with applicable federal and state securities laws, including but not limited to, the Securities Act and (b) for which the Company is provided with an opinion of counsel to the Holder, reasonably satisfactory to the Company, to the effect that such transfer is not in violation of any of said securities laws. The certificates representing the shares of Common Stock issuable upon the exercise of this Warrant will bear restrictive legends evidencing such restrictions. 7. CLOSING OF BOOKS The Company will at no time close its transfer books against the transfer of any Warrant or of any shares of Common Stock or other securities issuable upon the exercise of any Warrant in any manner which interferes with the timely exercise of the Warrants. 8. WARRANTS EXCHANGEABLE; LOSS, THEFT This Warrant is exchangeable, upon the surrender hereof by any Holder at the office or agency of the Company referred to in Section 1 hereof, for a new Warrant or Warrants of like tenor representing in the aggregate the right to subscribe for and purchase the number of shares of Common Stock which may be subscribed for and purchased hereunder, each such new Warrant to represent the right to subscribe and purchase such number of shares of Common Stock as shall be designated by said Holder hereof at the time of such surrender. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation, or upon surrender or cancellation of this Warrant, the Company will issue to the Holder hereof a new Warrant of like tenor, in lieu of this Warrant, representing the right to subscribe for and purchase 7 8 the number of shares of Common Stock which may be subscribed for and purchased hereunder. 9. OTHER COVENANTS A. NO IMPAIRMENT. The Company shall not by any action, including, without limitation, amending its certificate of incorporation, any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate to protect the rights of the Holder hereof against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any shares of Common Stock issuable upon the exercise of this Warrant above the amount payable therefor upon such exercise, (b) take all such action as may be necessary or appropriate in order that the Company may validly issue full paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (c) obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant. B. INDEMNIFICATION. The Company shall indemnify, save and hold harmless the Holder from and against any and all liability, loss, cost, damage, reasonable attorneys' and accountants, fees and expenses, court costs and all other out-of-pocket expenses incurred in connection with or arising from any default by the Company under this Warrant. 10. NOTICE OF CERTAIN EVENTS If, at any time prior to the expiration of this Warrant and prior to its exercise, any of the following events shall occur: A. The Company shall take a record of the holders of its shares of Common Stock for the purpose of entitling them to receive (i) a dividend or distribution payable otherwise than in cash, or (ii) a cash dividend or distribution payable otherwise than out of current or retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company; or B. The Company shall offer to the holders of its Common Stock any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor; or C. A dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or merger) or a sale of all or substantially all of its property, assets and business as an entirety shall be proposed; or 8 9 D. Any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, any reclassification of change of Common Stock issuable upon exercise of this Warrant, or a tender offer or exchange offer for shares of Common Stock; then, in any one or more of such events, the Company shall give written notice of such event at least 15 days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the shareholders entitled to such dividend, distribution, convertible or exchangeable securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of closing the transfer books, as the case may be. Failure to give such notice or any defect therein shall not affect the validity of any action taken in connection with the declaration or payment of any such dividend, or the issuance of any convertible or exchangeable securities, or subscription rights, options or warrants, or any proposed dissolution, liquidation, winding up or sale. The Company shall give 15 days' prior written notice of any change in the Company's principal office. 11. NOTICES All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been duly made when delivered: A. If to the registered Holder of this Warrant, to the address of such Holder as shown on the books of the Company; or B. If to the Company, to the address set forth on the first page of this Warrant, or to such other address specified in prior written notice given and delivered by the Company to the Holder. 12. SUCCESSORS All the covenants, agreements, representations and warranties contained in this Warrant shall bind the parties hereto and their respective heirs, personal representatives, successors and assigns. 9 10 13. LAW GOVERNING This Warrant shall be construed and enforced in accordance with, and governed by, the laws of the State of Texas. [SIGNATURE PAGE FOLLOWS] 10 11 Dated this ___ day of ___________, 1999. PETROQUEST ENERGY, INC. By: -------------------------------------- Charles T. Goodson President and Chief Executive Officer 11 12 [FORM OF ELECTION TO PURCHASE] (To be executed upon exercise of Warrant.) The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to purchase _____ shares of Common Stock and herewith tenders in payment for such shares a certified check or bank draft payable to the order of PetroQuest Energy, Inc. in the amount of $__________, all in accordance with the terms hereof. The undersigned requests that a certificate for such shares be registered in the name of _______________ whose address is __________________________________________ and that such certificate (or any payment in lieu thereof) be delivered to __________________ whose address is _______________________________________. Dated: ------------------- ---------------------------------------- (Signature must conform in all respects to name of Holder as specified on the face of the Warrant.) 12 13 [FORM OF ASSIGNMENT] (To be signed only upon transfer of Warrant) For value received, the undersigned hereby sells, assigns and transfers unto __________________________________ the right represented by the enclosed Warrant to purchase _______________ shares of Common Stock of PetroQuest Energy, Inc. to which the enclosed Warrant relates, and appoints ______________________ Attorney to transfer such right on the books of PetroQuest Energy, Inc. with full power of substitution in the premises. The undersigned represents and warrants that the transfer of the enclosed Warrant is permitted by the terms of the Warrant Agreement pursuant to which the enclosed Warrant has been issued, and the transferee hereof, by his acceptance of this Agreement, represents and warrants that he is familiar with the terms of said Warrant Agreement and agrees to be bound by the terms thereof with the same force and effect as if a signatory thereto. Dated: ------------------- ---------------------------------------- (Signature must conform in all respects to name of Holder as specified on the face of the Warrant.) ---------------------------------------- (Address) Signed in the presence of: - ---------------------------------------- 13 EX-10.1 4 EXECUTIVE EMPLOYMENT AGMT. - CHARLES T. GOODSON 1 EXHIBIT 10.1 FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT THIS FIRST AMENDMENT (the "Amendment") to the Executive Employment Agreement dated as of September 1, 1998 between PetroQuest Energy, Inc., a Delaware corporation (the "Company"), and Charles T. Goodson (the "Employee") is made and entered into this 30th day of July, 1999 between the Company and the Employee. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Employment Agreement as defined herein. W I T N E S S E T H: WHEREAS, the Company and the Employee entered into an Executive Employment Agreement dated as of September 1, 1998 (the "Employment Agreement") providing for the employment of the Employee by the Company in an executive capacity; WHEREAS, the Company and the Employee entered into a Termination Agreement dated as of December 16, 1998 (the "Termination Agreement") providing for the payment of severance benefits to the Employee by the Company upon a change in control of the Company and consequent actual or constructive termination of the Employee's employment by the Company (a "Change in Control Termination"); WHEREAS, through the Termination Agreement, the Company and the Employee desired to provide for a maximum of two years of severance benefits to the Employee by the Company upon a Change in Control Termination; WHEREAS, the Employment Agreement, when read in conjunction with the Termination Agreement, could be interpreted to provide in certain instances for more than two years of severance benefits to the Employee by the Company upon a Change in Control Termination; and WHEREAS, the Company and the Employee desire to amend the Employment Agreement to reflect the true intentions of the Company and the Employee. NOW, THEREFORE, the Company and the Employee hereby amend the Employment Agreement as follows: 1. A new definition is added to Section 1 of the Employment Agreement following the definition of "Notice of Termination" as follows: Termination Agreement means the Termination Agreement dated as of December 16, 1998 between the Company and the Employee. 1 2 2. A new Section 6.4 is added to the Employment Agreement as follows: 6.4 Termination of Employment Following a Change in Control. Notwithstanding the provisions of Section 6.3 hereof to the contrary, if the Employee's employment by the Company is terminated by the Company in accordance with the terms of Section 4 of the Termination Agreement and the Employee is entitled to benefits provided in Section 5 of the Termination Agreement, the Company shall pay to the Employee, in a lump sum in cash within 30 days after the Date of Termination, the aggregate of the Employee's Base Salary (as in effect on the Date of Termination) through the Date of Termination, if not theretofore paid, and, in the case of compensation previously deferred by the Employee, all amounts of such compensation previously deferred and not yet paid by the Company. Except with respect to the obligations set for forth in the Termination Agreement, notwithstanding any provisions herein to the contrary, all other obligations of the Company and rights of the Employee hereunder shall terminate effective as of the Date of Termination. 3. Except as otherwise amended hereby, the Employment Agreement remains in full force and effect. IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Amendment as of the date first written above. PETROQUEST ENERGY, INC. By: /s/ Alfred J. Thomas, II ------------------------------------------ Alfred J. Thomas, II, Chief Operating Officer EMPLOYEE: /s/ Charles T. Goodson --------------------------------------------- Charles T. Goodson 2 EX-10.2 5 EXECUTIVE EMPLOYMENT AGMT. - ALFRED J. THOMAS, II 1 EXHIBIT 10.2 FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT THIS FIRST AMENDMENT (the "Amendment") to the Executive Employment Agreement dated as of September 1, 1998 between PetroQuest Energy, Inc., a Delaware corporation (the "Company"), and Alfred J. Thomas, II (the "Employee") is made and entered into this 30th day of July, 1999 between the Company and the Employee. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Employment Agreement as defined herein. W I T N E S S E T H: WHEREAS, the Company and the Employee entered into an Executive Employment Agreement dated as of September 1, 1998 (the "Employment Agreement") providing for the employment of the Employee by the Company in an executive capacity; WHEREAS, the Company and the Employee entered into a Termination Agreement dated as of December 16, 1998 (the "Termination Agreement") providing for the payment of severance benefits to the Employee by the Company upon a change in control of the Company and consequent actual or constructive termination of the Employee's employment by the Company (a "Change in Control Termination"); WHEREAS, through the Termination Agreement, the Company and the Employee desired to provide for a maximum of two years of severance benefits to the Employee by the Company upon a Change in Control Termination; WHEREAS, the Employment Agreement, when read in conjunction with the Termination Agreement, could be interpreted to provide in certain instances for more than two years of severance benefits to the Employee by the Company upon a Change in Control Termination; and WHEREAS, the Company and the Employee desire to amend the Employment Agreement to reflect the true intentions of the Company and the Employee. NOW, THEREFORE, the Company and the Employee hereby amend the Employment Agreement as follows: 1. A new definition is added to Section 1 of the Employment Agreement following the definition of "Notice of Termination" as follows: Termination Agreement means the Termination Agreement dated as of December 16, 1998 between the Company and the Employee. 1 2 2. A new Section 6.4 is added to the Employment Agreement as follows: 6.4 Termination of Employment Following a Change in Control. Notwithstanding the provisions of Section 6.3 hereof to the contrary, if the Employee's employment by the Company is terminated by the Company in accordance with the terms of Section 4 of the Termination Agreement and the Employee is entitled to benefits provided in Section 5 of the Termination Agreement, the Company shall pay to the Employee, in a lump sum in cash within 30 days after the Date of Termination, the aggregate of the Employee's Base Salary (as in effect on the Date of Termination) through the Date of Termination, if not theretofore paid, and, in the case of compensation previously deferred by the Employee, all amounts of such compensation previously deferred and not yet paid by the Company. Except with respect to the obligations set for forth in the Termination Agreement, notwithstanding any provisions herein to the contrary, all other obligations of the Company and rights of the Employee hereunder shall terminate effective as of the Date of Termination. 3. Except as otherwise amended hereby, the Employment Agreement remains in full force and effect. IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Amendment as of the date first written above. PETROQUEST ENERGY, INC. By: /s/ Charles T. Goodson ----------------------------------------- Charles T. Goodson, President and Chief Executive Officer EMPLOYEE: /s/ Alfred J. Thomas, II ----------------------------------------- Alfred J. Thomas, II 2 EX-10.3 6 EXECUTIVE EMPLOYMENT AGMT. - RALPH J. DAIGLE 1 EXHIBIT 10.3 FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT THIS FIRST AMENDMENT (the "Amendment") to the Executive Employment Agreement dated as of September 1, 1998 between PetroQuest Energy, Inc., a Delaware corporation (the "Company"), and Ralph J. Daigle (the "Employee") is made and entered into this 30th day of July, 1999 between the Company and the Employee. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Employment Agreement as defined herein. W I T N E S S E T H: WHEREAS, the Company and the Employee entered into an Executive Employment Agreement dated as of September 1, 1998 (the "Employment Agreement") providing for the employment of the Employee by the Company in an executive capacity; WHEREAS, the Company and the Employee entered into a Termination Agreement dated as of December 16, 1998 (the "Termination Agreement") providing for the payment of severance benefits to the Employee by the Company upon a change in control of the Company and consequent actual or constructive termination of the Employee's employment by the Company (a "Change in Control Termination"); WHEREAS, through the Termination Agreement, the Company and the Employee desired to provide for a maximum of two years of severance benefits to the Employee by the Company upon a Change in Control Termination; WHEREAS, the Employment Agreement, when read in conjunction with the Termination Agreement, could be interpreted to provide in certain instances for more than two years of severance benefits to the Employee by the Company upon a Change in Control Termination; and WHEREAS, the Company and the Employee desire to amend the Employment Agreement to reflect the true intentions of the Company and the Employee. NOW, THEREFORE, the Company and the Employee hereby amend the Employment Agreement as follows: 1. A new definition is added to Section 1 of the Employment Agreement following the definition of "Notice of Termination" as follows: Termination Agreement means the Termination Agreement dated as of December 16, 1998 between the Company and the Employee. 1 2 2. A new Section 6.4 is added to the Employment Agreement as follows: 6.4 Termination of Employment Following a Change in Control. Notwithstanding the provisions of Section 6.3 hereof to the contrary, if the Employee's employment by the Company is terminated by the Company in accordance with the terms of Section 4 of the Termination Agreement and the Employee is entitled to benefits provided in Section 5 of the Termination Agreement, the Company shall pay to the Employee, in a lump sum in cash within 30 days after the Date of Termination, the aggregate of the Employee's Base Salary (as in effect on the Date of Termination) through the Date of Termination, if not theretofore paid, and, in the case of compensation previously deferred by the Employee, all amounts of such compensation previously deferred and not yet paid by the Company. Except with respect to the obligations set for forth in the Termination Agreement, notwithstanding any provisions herein to the contrary, all other obligations of the Company and rights of the Employee hereunder shall terminate effective as of the Date of Termination. 3. Except as otherwise amended hereby, the Employment Agreement remains in full force and effect. IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Amendment as of the date first written above. PETROQUEST ENERGY, INC. By: /s/ Charles T. Goodson --------------------------------------- Charles T. Goodson, President and Chief Executive Officer EMPLOYEE: /s/ Ralph J. Daigle --------------------------------------- Ralph J. Daigle 2 EX-10.4 7 EXECUTIVE EMPLOYMENT AGMT. - ROBERT R. BROOKSHER 1 EXHIBIT 10.4 FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT THIS FIRST AMENDMENT (the "Amendment") to the Executive Employment Agreement dated as of September 1, 1998 between PetroQuest Energy, Inc., a Delaware corporation (the "Company"), and Robert R. Brooksher (the "Employee") is made and entered into this 30th day of July, 1999 between the Company and the Employee. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Employment Agreement as defined herein. W I T N E S S E T H: WHEREAS, the Company and the Employee entered into an Executive Employment Agreement dated as of September 1, 1998 (the "Employment Agreement") providing for the employment of the Employee by the Company in an executive capacity; WHEREAS, the Company and the Employee entered into a Termination Agreement dated as of December 16, 1998 (the "Termination Agreement") providing for the payment of severance benefits to the Employee by the Company upon a change in control of the Company and consequent actual or constructive termination of the Employee's employment by the Company (a "Change in Control Termination"); WHEREAS, through the Termination Agreement, the Company and the Employee desired to provide for a maximum of two years of severance benefits to the Employee by the Company upon a Change in Control Termination; WHEREAS, the Employment Agreement, when read in conjunction with the Termination Agreement, could be interpreted to provide in certain instances for more than two years of severance benefits to the Employee by the Company upon a Change in Control Termination; and WHEREAS, the Company and the Employee desire to amend the Employment Agreement to reflect the true intentions of the Company and the Employee. NOW, THEREFORE, the Company and the Employee hereby amend the Employment Agreement as follows: 1. A new definition is added to Section 1 of the Employment Agreement following the definition of "Notice of Termination" as follows: Termination Agreement means the Termination Agreement dated as of December 16, 1998 between the Company and the Employee. 1 2 2. A new Section 6.4 is added to the Employment Agreement as follows: 6.4 Termination of Employment Following a Change in Control. Notwithstanding the provisions of Section 6.3 hereof to the contrary, if the Employee's employment by the Company is terminated by the Company in accordance with the terms of Section 4 of the Termination Agreement and the Employee is entitled to benefits provided in Section 5 of the Termination Agreement, the Company shall pay to the Employee, in a lump sum in cash within 30 days after the Date of Termination, the aggregate of the Employee's Base Salary (as in effect on the Date of Termination) through the Date of Termination, if not theretofore paid, and, in the case of compensation previously deferred by the Employee, all amounts of such compensation previously deferred and not yet paid by the Company. Except with respect to the obligations set for forth in the Termination Agreement, notwithstanding any provisions herein to the contrary, all other obligations of the Company and rights of the Employee hereunder shall terminate effective as of the Date of Termination. 3. Except as otherwise amended hereby, the Employment Agreement remains in full force and effect. IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Amendment as of the date first written above. PETROQUEST ENERGY, INC. By: /s/ Charles T. Goodson ----------------------------------------- Charles T. Goodson, President and Chief Executive Officer EMPLOYEE: /s/ Robert R. Brooksher ----------------------------------------- Robert R. Brooksher 2 EX-10.5 8 TERMINATION AGREEMENT - CHARLES T. GOODSON 1 EXHIBIT 10.5 FIRST AMENDMENT TO TERMINATION AGREEMENT THIS FIRST AMENDMENT (the "Amendment") to the Termination Agreement dated as of December 16, 1998 (the "Termination Agreement"), between PetroQuest Energy, Inc., a Delaware corporation (the "Company"), and Charles T. Goodson (the "Executive") is made and entered into this 30th day of July, 1999 between the Company and the Executive. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Termination Agreement. W I T N E S S E T H: WHEREAS, the Company and the Executive entered into the Termination Agreement providing for, among other things, the payment of severance benefits to the Executive by the Company upon a Change in Control of the Company and consequent actual or constructive termination of the Executive's employment by the Company (a "Change in Control Termination"); WHEREAS, the Company intends to raise up to $5,500,000 in a private placement of Units at a purchase price of $1.00 per Unit (the "Private Placement"), each Unit consisting of one share of Common Stock and one warrant to purchase one-half of a share of Common Stock, which Private Placement is expected to close on or before August 31, 1999; WHEREAS, in connection with the Private Placement, the Company and the Executive have agreed that Executive will forgo severance payments in certain transactions where the consideration to the Company or the Company's shareholders (the "Shareholders") has a value of less than $1.00 per share, unless such transaction is approved by not less than two-thirds of the Shareholders; WHEREAS, the Executive, as a shareholder of the Company, will indirectly benefit from the Private Placement; and WHEREAS, the Company and the Executive desire to amend the Termination Agreement in accordance with the above intentions. NOW, THEREFORE, the Company and the Executive hereby amend the Termination Agreement as follows: 1 2 1. The first paragraph set forth immediately after Section 3(d) is hereby deleted and replaced in its entirety with the following: Notwithstanding the foregoing, if any transaction described under paragraphs (a), (c) and (d) of this Section 3 results in consideration to the Company or the shareholders of the Company, as the case may be, from such transaction with a value (as determined in good faith by the Compensation Committee of the Board) of less than $1.00 per share (subject to adjustment for stock splits and combination and stock dividends after the date hereof), no Change in Control will be deemed to occur unless such transaction is approved by persons holding not less than two-thirds of the combined voting power of the Company's voting securities entitled to vote on such transaction. In addition, no Change in Control shall be deemed to occur if there is consummated any transaction or series of integrated transactions immediately following which, in the judgment of the Compensation Committee of the Board, the holders of the Company's Common Stock immediately prior to such transaction or series of transactions continue to have the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately prior to such transaction or series of transactions. 2. Except as otherwise amended hereby, the Termination Agreement remains in full force and effect. IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Amendment as of the date first written above. PETROQUEST ENERGY, INC. By: /s/ Alfred J. Thomas, II ----------------------------------------- Alfred J. Thomas, II, Chief Operating Officer EXECUTIVE: /s/ Charles T. Goodson ----------------------------------------- Charles T. Goodson 2 EX-10.6 9 TERMINATION AGREEMENT - ALFRED J. THOMAS, II 1 EXHIBIT 10.6 FIRST AMENDMENT TO TERMINATION AGREEMENT THIS FIRST AMENDMENT (the "Amendment") to the Termination Agreement dated as of December 16, 1998 (the "Termination Agreement"), between PetroQuest Energy, Inc., a Delaware corporation (the "Company"), and Alfred J. Thomas, II (the "Executive") is made and entered into this 30th day of July, 1999 between the Company and the Executive. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Termination Agreement. W I T N E S S E T H: WHEREAS, the Company and the Executive entered into the Termination Agreement providing for, among other things, the payment of severance benefits to the Executive by the Company upon a Change in Control of the Company and consequent actual or constructive termination of the Executive's employment by the Company (a "Change in Control Termination"); WHEREAS, the Company intends to raise up to $5,500,000 in a private placement of Units at a purchase price of $1.00 per Unit (the "Private Placement"), each Unit consisting of one share of Common Stock and one warrant to purchase one-half of a share of Common Stock, which Private Placement is expected to close on or before August 31, 1999; WHEREAS, in connection with the Private Placement, the Company and the Executive have agreed that Executive will forgo severance payments in certain transactions where the consideration to the Company or the Company's shareholders (the "Shareholders") has a value of less than $1.00 per share, unless such transaction is approved by not less than two-thirds of the Shareholders; WHEREAS, the Executive, as a shareholder of the Company, will indirectly benefit from the Private Placement; and WHEREAS, the Company and the Executive desire to amend the Termination Agreement in accordance with the above intentions. NOW, THEREFORE, the Company and the Executive hereby amend the Termination Agreement as follows: 1 2 1. The first paragraph set forth immediately after Section 3(d) is hereby deleted and replaced in its entirety with the following: Notwithstanding the foregoing, if any transaction described under paragraphs (a), (c) and (d) of this Section 3 results in consideration to the Company or the shareholders of the Company, as the case may be, from such transaction with a value (as determined in good faith by the Compensation Committee of the Board) of less than $1.00 per share (subject to adjustment for stock splits and combination and stock dividends after the date hereof), no Change in Control will be deemed to occur unless such transaction is approved by persons holding not less than two-thirds of the combined voting power of the Company's voting securities entitled to vote on such transaction. In addition, no Change in Control shall be deemed to occur if there is consummated any transaction or series of integrated transactions immediately following which, in the judgment of the Compensation Committee of the Board, the holders of the Company's Common Stock immediately prior to such transaction or series of transactions continue to have the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately prior to such transaction or series of transactions. 2. Except as otherwise amended hereby, the Termination Agreement remains in full force and effect. IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Amendment as of the date first written above. PETROQUEST ENERGY, INC. By: /s/ Charles T. Goodson ----------------------------------------- Charles T. Goodson, President and Chief Executive Officer EXECUTIVE: /s/ Alfred J. Thomas, II ----------------------------------------- Alfred J. Thomas, II 2 EX-10.7 10 TERMINATION AGREEMENT - RALPH J. DAIGLE 1 EXHIBIT 10.7 FIRST AMENDMENT TO TERMINATION AGREEMENT THIS FIRST AMENDMENT (the "Amendment") to the Termination Agreement dated as of December 16, 1998 (the "Termination Agreement"), between PetroQuest Energy, Inc., a Delaware corporation (the "Company"), and Ralph J. Daigle (the "Executive") is made and entered into this 30th day of July, 1999 between the Company and the Executive. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Termination Agreement. W I T N E S S E T H: WHEREAS, the Company and the Executive entered into the Termination Agreement providing for, among other things, the payment of severance benefits to the Executive by the Company upon a Change in Control of the Company and consequent actual or constructive termination of the Executive's employment by the Company (a "Change in Control Termination"); WHEREAS, the Company intends to raise up to $5,500,000 in a private placement of Units at a purchase price of $1.00 per Unit (the "Private Placement"), each Unit consisting of one share of Common Stock and one warrant to purchase one-half of a share of Common Stock, which Private Placement is expected to close on or before August 31, 1999; WHEREAS, in connection with the Private Placement, the Company and the Executive have agreed that Executive will forgo severance payments in certain transactions where the consideration to the Company or the Company's shareholders (the "Shareholders") has a value of less than $1.00 per share, unless such transaction is approved by not less than two-thirds of the Shareholders; WHEREAS, the Executive, as a shareholder of the Company, will indirectly benefit from the Private Placement; and WHEREAS, the Company and the Executive desire to amend the Termination Agreement in accordance with the above intentions. NOW, THEREFORE, the Company and the Executive hereby amend the Termination Agreement as follows: 1 2 1. The first paragraph set forth immediately after Section 3(d) is hereby deleted and replaced in its entirety with the following: Notwithstanding the foregoing, if any transaction described under paragraphs (a), (c) and (d) of this Section 3 results in consideration to the Company or the shareholders of the Company, as the case may be, from such transaction with a value (as determined in good faith by the Compensation Committee of the Board) of less than $1.00 per share (subject to adjustment for stock splits and combination and stock dividends after the date hereof), no Change in Control will be deemed to occur unless such transaction is approved by persons holding not less than two-thirds of the combined voting power of the Company's voting securities entitled to vote on such transaction. In addition, no Change in Control shall be deemed to occur if there is consummated any transaction or series of integrated transactions immediately following which, in the judgment of the Compensation Committee of the Board, the holders of the Company's Common Stock immediately prior to such transaction or series of transactions continue to have the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately prior to such transaction or series of transactions. 2. Except as otherwise amended hereby, the Termination Agreement remains in full force and effect. IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Amendment as of the date first written above. PETROQUEST ENERGY, INC. By: /s/ Charles T. Goodson ----------------------------------------- Charles T. Goodson, President and Chief Executive Officer EXECUTIVE: /s/ Ralph J. Daigle ----------------------------------------- Ralph J. Daigle 2 EX-10.8 11 TERMINATION AGREEMENT - ROBERT R. BROOKSHER 1 EXHIBIT 10.8 FIRST AMENDMENT TO TERMINATION AGREEMENT THIS FIRST AMENDMENT (the "Amendment") to the Termination Agreement dated as of December 16, 1998 (the "Termination Agreement"), between PetroQuest Energy, Inc., a Delaware corporation (the "Company"), and Robert R. Brooksher (the "Executive") is made and entered into this 30th day of July, 1999 between the Company and the Executive. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Termination Agreement. W I T N E S S E T H: WHEREAS, the Company and the Executive entered into the Termination Agreement providing for, among other things, the payment of severance benefits to the Executive by the Company upon a Change in Control of the Company and consequent actual or constructive termination of the Executive's employment by the Company (a "Change in Control Termination"); WHEREAS, the Company intends to raise up to $5,500,000 in a private placement of Units at a purchase price of $1.00 per Unit (the "Private Placement"), each Unit consisting of one share of Common Stock and one warrant to purchase one-half of a share of Common Stock, which Private Placement is expected to close on or before August 31, 1999; WHEREAS, in connection with the Private Placement, the Company and the Executive have agreed that Executive will forgo severance payments in certain transactions where the consideration to the Company or the Company's shareholders (the "Shareholders") has a value of less than $1.00 per share, unless such transaction is approved by not less than two-thirds of the Shareholders; WHEREAS, the Executive, as a shareholder of the Company, will indirectly benefit from the Private Placement; and WHEREAS, the Company and the Executive desire to amend the Termination Agreement in accordance with the above intentions. NOW, THEREFORE, the Company and the Executive hereby amend the Termination Agreement as follows: 1 2 1. The first paragraph set forth immediately after Section 3(d) is hereby deleted and replaced in its entirety with the following: Notwithstanding the foregoing, if any transaction described under paragraphs (a), (c) and (d) of this Section 3 results in consideration to the Company or the shareholders of the Company, as the case may be, from such transaction with a value (as determined in good faith by the Compensation Committee of the Board) of less than $1.00 per share (subject to adjustment for stock splits and combination and stock dividends after the date hereof), no Change in Control will be deemed to occur unless such transaction is approved by persons holding not less than two-thirds of the combined voting power of the Company's voting securities entitled to vote on such transaction. In addition, no Change in Control shall be deemed to occur if there is consummated any transaction or series of integrated transactions immediately following which, in the judgment of the Compensation Committee of the Board, the holders of the Company's Common Stock immediately prior to such transaction or series of transactions continue to have the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately prior to such transaction or series of transactions. 2. Except as otherwise amended hereby, the Termination Agreement remains in full force and effect. IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Amendment as of the date first written above. PETROQUEST ENERGY, INC. By: /s/ Charles T. Goodson ----------------------------------------- Charles T. Goodson, President and Chief Executive Officer EXECUTIVE: /s/ Robert R. Brooksher ----------------------------------------- Robert R. 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