LIONS PETROLEUM, INC.
2005 Stock Incentive Plan For Employees And Consultants
1. Definitions: As used herein, the following definitions shall apply:
(a) "Board of "Directors" shall mean the Board of Directors of the
Corporation.
(b) "Committee" shall mean the Compensation Committee designated
by the Board of Directors of the Corporation, or such other committee as
shall be specified by the Board of Directors to perform the functions and
duties of the Committee under the Plan; provided, however. that, the
Committee shall comply with the requirements of (i) Rule 16b-3 of the
Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). and (ii) Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations
thereunder.
(c) "Corporation" shall mean Lions Petroleum, Inc., a Delaware
corporation, or any successor thereof.
(d) "Discretion" shall mean in the sole discretion of the
Committee, with no requirement whatsoever that the Committee follow past
practices, act in a manner consistent with past practices, or treat an
employee or consultant in a manner consistent with the treatment afforded
other employees or consultants with respect to the Plan.
(e) "Participant" shall mean any individual designated by the
Committee under Paragraph 6 for participation in the Plan.
(f) "Plan" shall mean this Lions Petroleum, Inc. 2005 Stock
Incentive Plan for Employees and Consultants,
(g) "Subsidiary" shall mean any corporation or similar entity in
which the Corporation owns, directly or indirectly, stock or other
equity interest ("Stock") possessing more than 25% of the combined
voting power of all classes of Stock; provided, however, that a grant of
stock hereunder may be granted to an employee of a Subsidiary only if
the Subsidiary is a corporation and the Corporation owns, directly or
indirectly, 50% or more of the total combined voting power of all
classes of Stock of the Subsidiary.
2. Purpose of Plan: The purpose of the Plan is to provide employees and
consultants of the Corporation and its Subsidiaries with an increased
incentive to make significant and extraordinary contributions to the long-term
performance and growth of the Corporation and its Subsidiaries, to join the
interests of employees and consultants with the interests of the shareholders
of the Corporation, and to facilitate attracting and retaining employees and
consultants of exceptional ability.
3. Administration: The Plan shall be administered by the Committee.
Subject to the provisions of the Plan, the Committee shall determine, from
those eligible to be Participants under the Plan, the persons to be granted
stock, the amount of stock to be granted to each such person, and the terms
and conditions of any stock grant. Subject to the provisions of the Plan, the
Committee is authorized to interpret the Plan, to make, amend and rescind
rules and regulations relating to the Plan and to make all other
determinations necessary or advisable for the Plan's administration.
Interpretation and construction of any provision of the Plan by the Committee
shall, unless otherwise determined by the Board of Directors of the
Corporation, be final and conclusive. A majority of the Committee shall
constitute a quorum, and the acts approved by a majority of the members
present at any meeting at which a quorum is present, or acts approved in
writing by a majority of the Committee, shall be the acts of the Committee.
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4. Indemnification of Committee Members: In addition to such other
rights of indemnification as they may have, the members of the Committee shall
be indemnified by the Corporation in connection with any claim, action, suit
or proceeding relating to any action taken or failure to act under or in
connection with the Plan or any stock granted hereunder to the full extent
permitted by applicable law or provided for under the Corporation's Articles
of Incorporation or Bylaws with respect to indemnification of directors of the
Corporation.
5. Maximum Number of Shares Subject to Plan: The maximum number of
shares which may be granted under the Plan shall be five million (5,000,000)
shares in the aggregate of Common Stock of the Corporation.
6. Participants: The Committee shall determine and designate from time
to time, in its Discretion, those employees and consultants of the Corporation
or any Subsidiary to receive stock that, in the judgment of the Committee, are
or will become responsible for the direction and financial success of the
Corporation or any Subsidiary.
7. Written Agreement: Each stock award shall be evidenced by a written
agreement (each a "Corporation-Participant Agreement") containing such
provisions as may be approved by the Committee. Each such
Corporation-Participant Agreement shall constitute a binding contract between
the Corporation and the Participant and every Participant, upon acceptance of
such Agreement, shall be bound by the terms and restrictions of the Plan and
of such Agreement. The terms of each such Corporation-Participant Agreement
shall be in accordance with the Plan, but each Corporation- Participant
Agreement may include such additional provisions and restrictions determined
by the Committee, in its Discretion, provided that such additional provisions
and restrictions are not inconsistent with the terms of the Plan.
8. Allotment of Shares: The Committee shall determine and fix, in its
Discretion, the number of shares of Common Stock with respect to which a
Participant may be granted.
9. Stock Price: The initial and standard price per share of common
stock to be issued directly shall be the Fair Market Value per share, but may
be changed in each case by the Board, or its designee, from time to time. If
the share price is changed, the Board, or its designee, shall determine the
share price no later than the date of the issuance of the shares and at such
other times as the Board. or its designee, deems necessary. The Board shall
have absolute final discretion to determine the price of the common stock
under the Plan. In the absence of such specific determination, the share price
will be the Fair Market Value per share. "Fair Market Value" shall mean, if
there is an established market for the Company's Common Stock on a stock
exchange, in an over-the-counter market or otherwise, the Closing Bid Price of
the Company's stock for the trading day which is the valuation date, provided
that the Board may, in its discretion provide an alternative definition for
Fair Market Value in the instrument granting the right. Unless otherwise
specified by the Board at the time of grant (or in the formula applicable to
such grant), the valuation date for purposes of determining the stock price
shall be the date of grant. The Board may specify that, instead of the date of
grant, the valuation date shall be a valuation period of up to ninety (90)
days prior to the date of grant, and Fair Market Value for purposes of such
grant shall be the average over the valuation period of the mean of the
highest and lowest quoted selling prices on each date on which sales were made
in the valuation period. If there is no established market for the Company's
Common Stock, or if there were no sales during the applicable valuation
period, the determination of Fair Market Value shall be established by the
Board in its sole discretion, considering the criteria set forth in Treas.
Reg. Section 20.2031-2 or successor regulations.
10. Reclassification, Consolidation Or Merger: If and to the extent
that the number of issued shares of common stock of the Company shall be
increased or reduced by change in par value, split-up reclassification,
distribution of a dividend payable in stock, or the like, the number of shares
subject to direct issuance held by a person and the price per share shall be
proportionately adjusted. If the Company is reorganized or consolidated or
merged with another corporation, the person shall be entitled to receive
direct issuance covering shares of such reorganized, consolidated, or merged
company in the same proportion, at an equivalent price, and subject to the
same conditions.
2005 Stock Incentive Plan For Employees And Consultants - 2
12. Non-transferability of Stock Rights: No stock right granted under
the Plan to a Participant shall be transferable by such Participant otherwise
than by will or by the laws of descent and distribution. However, any stock
issued shall be freely transferable after issuance.
14. Continuation of Employment: The Committee may require, in its
Discretion. that any Participant under the Plan to whom a stock shall be
granted shall agree in writing as a condition of the granting of such stock
award to remain in the employ or to remain as a consultant of the Corporation
or a Subsidiary for a designed minimum period from the date of the granting of
such stock award as shall be fixed by the Committee.
16. Rights to Continued Employment: Nothing contained in the Plan or in
any stock granted or awarded pursuant to the Plan, nor any action taken by the
Committee hereunder, shall confer upon any Participant any right with respect
to continuation of employment or consultancy by the Corporation or a
Subsidiary nor interfere in any way with the right of the Corporation or a
Subsidiary to terminate such person's employment or consultancy at any time.
17. Effectiveness of Plan: The Plan shall be effective on the date the
Board of Directors of the Corporation adopts the Plan.
18. Termination, Duration and Amendments of Plan: The Plan may be
abandoned or terminated at any time by the Board of Directors of the
Corporation. Unless sooner terminated. the Plan shall terminate on the date
ten years after its adoption by the Board of Directors, and no stock may be
granted or awarded thereafter. The termination of the Plan shall not affect
the validity of any stock grant outstanding on the date of termination.
For the purpose of conforming to any changes in applicable law or
governmental regulations, or for any other lawful purpose, the Board of
Directors shall have the right, with or without approval of the shareholders
of the Corporation, to amend or revise the terms of the Plan at any time;
provided, however, that no such amendment or revision shall (i) without
approval or ratification of the shareholders of the Corporation (A) increase
the maximum number of shares in the aggregate which are subject to the Plan
(subject, however, to the provisions of Paragraph 5), (B) increase the maximum
number of shares for which any Participant may be granted stock under the Plan
(except as contemplated by Paragraph 5), (C) change the class of persons
eligible to be Participants under the Plan, or (D) materially increase the
benefits accruing to Participants under the Plan, or (ii) without the consent
of the holder thereof.. change the stock price (except as contemplated by
Paragraph 5) or alter or impair any stock which shall have been previously
granted or awarded under the Plan.
BOARD OF DIRECTORS
/s/ Dale M. Paulson
______________________________
Dale M. Paulson
/s/ Gordon L. Wiltse
______________________________
Gordon L. Wiltse
______________________________
Duane D. Fadness
2005 Stock Incentive Plan For Employees And Consultants - 3