SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box:
|X| Preliminary proxy statement. |_| Confidential for use of the
commission only (as permitted by
|_| Definitive proxy statement.
Rule 14a-6(e)(2)).
|_| Definitive additional materials.
|_| Soliciting material pursuant to Rule 14a-12.
PANGEA PETROLEUM CORP.
(Name of Registrant as Specified in Its Charter)
Payment of filing fee: (check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rule 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: ___
(2) Aggregate number of securities to which transaction applies: ___
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined): ___
(4) Proposed maximum aggregate value of transaction: ___
(5) Total fee paid: ___
|_| Fee paid previously with preliminary materials: ___
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-1(a)(2) and identify the filing for which the offsetting fee was
paid previously, identify the previous filing by registration statement
number, or the form or schedule and the date its filing.
(1) Amount Previously Paid: ___
(2) Form, Schedule or Registration Statement No.: ___
(3) Filing Party: ___
(4) Date Filed: ___
PANGEA PETROLEUM CORPORATION
9801 WESTHEIMER, SUITE 302
HOUSTON, TEXAS 77042
NOTICE OF ANNUAL STOCKHOLDER MEETING
TO BE HELD ON JULY 20, 2005
NOTICE IS HEREBY GIVEN that an Annual Stockholder Meeting ("Stockholder
Meeting") of Pangea Petroleum Corporation ("Pangea" or the "Corporation"), a
Colorado Corporation, will be held at the Company's corporate offices located at
9801 Westheimer, Suite 302, Houston, Texas 77042, on the 20th day of July, 2005
at 2:00PM, for the following purposes:
1. To elect three directors to serve for a one year term or until their
successors have been duly elected and qualified;
2. To ratify the appointment of Ham, Langston & Brezina, L.L.P. as the
independent auditor of the Corporation for the year ending December
31, 2005;
3. To approve an amendment to the Articles of Incorporation to increase
the number of authorized shares of the Corporation's stock from
210,000,000 to 510,000,000;
4. To approve the 2005 Equity Compensation Plan;
5. To transact such further and other business as may properly come
before the meeting or any adjournment thereof.
Only stockholders of record at the close of business on June 1, 2005 will be
entitled to notice of and to vote at the Stockholder Meeting or any adjournment
thereof.
You are cordially invited to attend the Stockholder Meeting and YOUR VOTE IS
VERY IMPORTANT. Whether or not you plan to attend the Stockholder Meeting, it is
important that your shares be represented. Therefore, we urge you to sign, date
and promptly return the enclosed proxy. Your cooperation in signing and
returning the proxy will help avoid further solicitation expense.
BY ORDER OF THE BOARD OF DIRECTORS
CHARLES B. POLLOCK
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
JUNE 14, 2005
HOUSTON, TEXAS
WHETHER OR NOT YOU EXPECT TO ATTEND THIS STOCKHOLDER MEETING, YOU ARE REQUESTED
TO VOTE YOUR SHARES BY SIGNING, DATING AND RETURNING THE ENCLOSED FORM OF PROXY
================================================================================
PANGEA PETROLEUM CORPORATION
9801 WESTHEIMER, SUITE 302
HOUSTON, TEXAS 77042
(713) 706-6350
------------------
PROXY STATEMENT
ANNUAL STOCKHOLDER MEETING
TO BE HELD ON JULY 20, 2005
------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
MANAGEMENT SOLICITATIONS OF PROXIES
This Proxy Statement (the "Proxy Statement") is being furnished to stockholders
(the "stockholders") in connection with the solicitation by the Board of
Directors of Pangea Petroleum Corporation ("Pangea" or the "Corporation"), a
Colorado Corporation, for their use at the Annual Stockholder Meeting (the
"Stockholder Meeting") to be held at the Company's corporate offices located at
9801 Westheimer, Suite 302, Houston, Texas 77042, on July 20, 2005 at 2:00 PM,
or at any adjournment thereof for the purposes of considering and voting upon
the matters set forth in the accompanying Notice of Stockholder Meeting (the
"Notice"). This Proxy Statement and the accompanying form of proxy (the "Proxy")
are first being mailed to Stockholders on or about June 14, 2005. The cost of
solicitation of proxies is being borne by the Corporation.
APPOINTMENT AND REVOCATION OF PROXIES
All shares represented by properly executed proxies, unless such proxies
previously have been revoked, will be voted at the Annual Stockholder Meeting in
accordance with the directions on the proxies. If no direction is indicated, the
shares will be voted (I) FOR THE ELECTION OF THE DIRECTOR NOMINEES NAMED HEREIN
(II) FOR THE RATIFICATION OF HAM, LANGSTON & BREZINA, LLP AS INDEPENDENT
ACCOUNTANT FOR THE FISCAL YEAR ENDING DECEMBER 31, 2005, (III) FOR INCREASING
THE AUTHORIZED SHARES FROM 210,000,000 TO 510,000,000 AND (IV) FOR THE 2005
EQUITY COMPENSATION PLAN. The Board of Directors is not aware of any other
matters to be presented for action at the Annual Stockholder Meeting. However,
if any other matter is properly presented at the Annual Stockholder Meeting, it
is the intention of the persons named in the enclosed proxy to vote in
accordance with their best judgment on such matters.
The enclosed Proxy, even though executed and returned, may be revoked at any
time prior to the voting of the Proxy (a) by execution and submission of a
revised proxy, (b) by written notice to our Secretary, or (c) by voting in
person at the Annual Stockholder Meeting.
Proxies are only voted when a poll is required. A poll is a vote by written
ballot, which gives one vote for each common share registered in the name of the
member.
ABOUT THE ANNUAL MEETING
This question and answer section answers basic questions about the Stockholder
Meeting. Please read the rest of the proxy statement for full information about
the meeting and the election.
Who is entitled to vote at the meeting?
Only Stockholders of record at the close of business on June 1, 2005 (the
"Record Date"), the record date for the meeting, are entitled to receive notice
of and to participate in the Stockholder Meeting. If you were a stockholder of
record on that date, you will be entitled to vote all of the shares that you
held on that date at the meeting, or any postponements or adjournments of the
meeting. Stockholders present in person or by proxy at the Stockholder Meeting
will be entitled to one vote on each proposal for each share of common stock
held by such stockholder on that date.
Each nominee for Director named in Proposal 1 must receive a plurality of the
votes cast in person or by proxy by Common Stock in order to be elected.
Stockholder may not cumulate their votes for the election of Directors. The
affirmative vote of a majority of the issued and outstanding shares of Common
Stock present or represented by proxy and entitled to vote at the Stockholder
Meeting is required for approval of Proposal 2 and Proposal 4 set forth in the
accompanying notice. The affirmative vote of a majority of the issued and
outstanding shares of Common Stock is required for the ratification of Proposal
3.
What are the shares outstanding on the record date?
We have one class of voting stock outstanding, all of which is designated common
stock, $0.001 par value. As of June 1, 2005, we had 194,678,344 shares of Common
Stock outstanding and 183,519,846 shares of Common Stock issued and no preferred
stock issued and outstanding. Included in common stock issued were certain
shares issued under a Securities Purchase Agreement (the "Securities Purchase
Agreement") whereby the Corporation issued 16,149,998 shares of restricted
common stock to an escrow agent (the "Escrowed Shares") for the benefit of four
investor groups in exchange for $1,300,000 in cash in 2001. The terms of the
Securities Purchase Agreement allowed the escrow agent for the Escrowed Shares
to issue restricted common stock in the amount of 4,991,500 shares to the
investor groups and included provisions for the issuance of four series of
warrants, which comprise the remaining 11,158,498 issued shares, with exercise
prices to be set based on a combination of certain future events and the
performance of the Corporation's common stock. To date Pangea has not been
provided notice that any of the warrants are to be exercised. The difference
between the shares issued and the shares outstanding represent the shares
underlying these warrants that have not been exercised.
All Stockholders of record at the close of business on the Record Date are
entitled to notice of and to vote at the Stockholder Meeting.
What if I do not receive notice of the meeting?
The Board of Directors fixed the close of business on June 1, 2005, as the
record date for the purpose of determining stockholders entitled to receive
notice of the meeting, but failure to receive a notice does not deprive a
stockholder of the right to vote those shares at the meeting upon producing
properly endorsed share certificates, or otherwise establishing share ownership,
and demanding the inclusion of his name in the list of stockholders not later
then ten days before the date of the meeting.
Who may attend the meeting?
All Stockholders as of the record date, or their duly appointed proxies, may
attend the meeting. Admission to the meeting will be on a first-come,
first-served basis. Registration will begin at 1:00 PM. If you attend, please
note that you may be asked to present valid picture identification, such as a
driver's license or passport. Cameras, recording devices and other electronic
devices will not be permitted at the meeting. Please also note that, if you hold
your shares in "street name" (that is, through a broker or other nominee), you
will need to bring a copy of a brokerage statement reflecting your stock
ownership as of the record date and check in at the registration desk at the
meeting.
What constitutes a quorum?
The presence, in person or by proxy, of a majority of the outstanding shares of
Common Stock on the record date is necessary to constitute a quorum for the
transaction of business at the Stockholder Meeting. Abstentions and broker
non-votes will be counted as present for the purpose of determining the presence
of a quorum at the Stockholder Meeting. Broker non-votes occur when a broker
holding customer securities in street name has not received voting instructions
from the customer on certain non-routine matters and, therefore, is barred by
the rules of the applicable securities exchange from exercising discretionary
authority to vote those securities.
How do I vote?
If you complete and properly sign the accompanying proxy card and return in the
enclosed envelope, it will be voted as you direct. If you are a registered
stockholder and attend the meeting, you may deliver your completed proxy card in
person. "Street name" Stockholders who wish to vote at the meeting will need to
obtain a proxy from the institution that holds their shares.
Each share of the Corporation's common stock is entitled to one vote on each
matter properly brought before the meeting. Abstentions will be counted toward
the tabulation of votes cast on proposals submitted to stockholders and will
have the same effect as negative votes, while broker non-votes will not be
counted as votes cast for or against any matters. All votes will be tabulated by
the inspector of election appointed for the meeting, who will separately
tabulate affirmative and negative votes, abstentions, and broker non-votes.
What is the effect of the board's recommendation?
Unless you give other instructions on your proxy card, the persons named as
proxy holders on the proxy card will vote in accordance with the recommendation
of the Corporation's Board of Directors with respect to the seats to be filled.
Our Board's recommendation is set forth together with the description of the
election of directors in this proxy statement.
PURPOSE OF THE MEETING
The specific proposals to be considered and acted upon by the Corporation's
Stockholders at the Stockholder Meeting are summarized below.
- --------------------------------------------------------------------------------
PROPOSAL NUMBER ONE - ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
Our Stockholders will vote to elect three (3) directors of Pangea Petroleum
Corporation to serve for a one year term or until their successors have been
duly elected and qualified.
The persons named in the enclosed Proxy have been selected by the Board of
Directors to serve as proxies (the "Proxies") and will vote the shares
represented by valid proxies at the Annual Stockholder Meeting of Stockholders
and adjournments thereof. They have indicated that, unless otherwise specified
in the Proxy, they intend to elect as Directors the nominees listed below.
Each duly elected Director will hold office until his death, resignation,
retirement, removal, disqualification, or until his successor shall have been
elected and qualified.
The Board has nominated Charles B. Pollock, Mark F. Weller and Edward R. Skaggs
to continue serving as the directors (together, the "Pangea Nominees").
Charles B. Pollock was appointed the Chief Executive Officer and Chairman of the
Board in June 1999. From January 1994 to September 1995, Mr. Pollock was
President of Praxair Indonesia, an industrial gas company. From October 1995 to
August 1996, he was General Manager of Praxair, Inc. His responsibilities
included strategic marketing and competition analysis. From September 1996 to
May 1999, Mr. Pollock was self-employed as a consultant and managed projects
including the acquisition and sale of businesses, competitive analysis and
strategic marketing. Mr. Pollock received his Bachelor of Science degree in 1962
from North Carolina State University, his Master of Science degree in Ceramic
Engineering from North Carolina State University in 1968 and his PhD in Material
Engineering from North Carolina State University in 1972.
Mark F. Weller was appointed President and Director in March 2002. Mr. Weller
was with Texaco, Inc. for over 30 years until his departure in early 2002. His
last position with Texaco was as general manager for new project development for
West Africa. His background includes all phases of oil and gas operations and
development, both onshore and offshore on the U.S. gulf and west coasts, as well
as international project development assignments. He holds a Bachelor of Science
in mechanical engineering from the University of California, Davis.
Edward R. Skaggs was appointed to the Board of Directors of the Company on
December 18, 2000. Mr. Skaggs has worked for an investigative consulting firm,
Skaggs & Associates since June of 1991. Mr. Skaggs has over 10 years of
experience in investigations and security. In addition, he has extensive
experience in retail management specifically dealing in personnel issues and
security matters. He received a Bachelor of Arts degree in Political Science
from Texas Tech University in 1992.
RECOMMENDATION AND REQUIRED VOTE
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" ALL OF THE DIRECTOR NOMINEES NAMED
IN PROPOSAL 1
Voting Rights with Respect to the Election of Directors
A stockholder may, with respect to the election of directors, (i) vote for the
election of all of the Pangea Nominees, (ii) withhold authority to vote for any
one or more of the Pangea Nominees, or (iii) withhold authority to vote for all
of the Pangea Nominees by so indicating in the appropriate spaces on the
enclosed proxy card. Each nominee for Director named in Proposal Number 1 must
receive a plurality of the votes cast in person or by proxy of our Common Stock
in order to be elected. Stockholders may not cumulate their votes for the
election of Directors.
If any nominee is unable or unwilling to serve as a director at the time of the
Stockholder Meeting, the persons named in the enclosed Proxy will vote for the
election of such other person(s) as may be nominated by the Board of Directors.
We have no reason to believe that any nominee will be unable or unwilling to
serve if elected as a director.
Unless otherwise instructed or unless authority to vote is withheld, the
enclosed Proxy will be voted for the election of the nominees listed below.
FURTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS AND OUR EXECUTIVE OFFICERS
Our Directors are elected annually and hold office until their death,
resignation, retirement, removal, disqualification, or the next annual meeting
of our stockholders or until their successors are elected and qualified.
Officers are elected annually and serve at the discretion of the Board of
Directors. There is no family relationship between or among any of our Directors
and Executive Officers. Our current Board of Directors consists of three
persons.
Name Age Position
Charles B. Pollock 65 CEO and Chairman of the Board
Mark F. Weller 54 President and Director
Edward R. Skaggs 39 Nominee for Director
Scott Duncan 38 Chief Financial Officer
Scott Duncan was appointed Chief Financial Officer in February 2003. Mr. Duncan
is currently the cost accounting manager for Farouk Systems, a manufacturing
company. From September 2001 to February 2004, Mr. Duncan handled financial and
cost accounting for Goodman Manufacturing. From December 1998 to April 2001, Mr.
Duncan was a Programmer Analyst with RHI Refractories America. From 1991 to
December 1998, Mr. Duncan was the MIS Manager, Controller and Cost Accountant
for Garlock. Mr. Duncan has a total of 8 years of experience in financial and
cost accounting for manufacturing companies along with a total of 6 years of
experience with computer programming. He is actively involved with various
organizations offering accounting, programming and consulting services. He
received a BBA in accounting from Southwest Texas State University in 1989 and
his CPA license in 1992.
Related Transactions
Our Board of Directors has adopted a policy that our affairs will be conducted
in all respects by standards applicable to publicly held corporations and that
we will not enter into any future transactions between us and our Officers,
Directors and 5% shareholders unless the terms are no less favorable than could
be obtained from independent, third parties and will be approved by a majority
of our independent and disinterested Directors. In our view, all of the
transactions described below meet this standard.
During the year ended December 31, 2004, we engaged in transactions with related
parties as set forth below.
At December 31, 2004, the Company had notes payable to related parties totaling
$430,053.07. These include a note payable in the amount of $273,039.92 to
Charles B. Pollock due December 31, 2005, a demand note payable in the amount of
$89,184.45 to Mary Pollock, daughter of Charles B. Pollock and to Mark Weller in
the amount of $52,828.7 due on December 31, 2005 and $15,000 due on June 28,
2006.
Information Concerning the Board of Directors and Its Committees
We have no audit committee, no compensation committee and no nominating
committee. Decisions concerning Executive Officer Compensation for the fiscal
year ended December 31, 2004 were made by the full Board of Directors. Mr.
Pollock and Mr. Weller are Officers and Directors. The Board of Directors took
action at Board meetings five times during the year ended December 31, 2004. All
Directors were present for at least 100% of the Board meetings. There are no
family relationships between or among any of our Directors and Executive
Officers.
Compliance with Section 16(A) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") requires the Company's officers, directors and persons who own more than
10% of the Company's Common Stock to file reports of ownership and changes in
ownership with the SEC and the National Association of Securities Dealers, Inc.
Officers, directors and greater than 10% stockholders are required by regulation
to furnish the Company with copies of all forms they file pursuant to Section
16(a) of the Exchange Act. Based solely on the reports we have received and on
written representations from certain reporting persons, we believe that the
directors, executive officers, and our greater than ten percent beneficial
owners have complied with all applicable filing requirements for the fiscal year
ended December 31, 2004.
Statement of Executive Compensation
The following table reflects all forms of compensation for services to us for
the years ended December 31, 2004, 2003 and 2002 of certain of our Executive
Officers. No other Executive Officer of the Corporation has received
compensation that exceeded $100,000 during the year ended December 31, 2004.
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
---------------------------------- -----------------------------------------------------
Awards Payouts
-----------------------
Name and Year Salary Bonus Other Annual Restricted Securities LTIP All Other
Principal Position ($) ($) Compensation Stock Underlying Payouts Compensation
($) award(s) Options / ($)
(shares) SARs
(#)
- ----------------------------------------------------------------------------------------------------------------------------
Charles B. Pollock
CEO and 2002 -0-(1) -0- 0 600,000(4) 0 -0- -0-
Chairman of the 2003 -0-(2) -0-(3) 0 1,200,000(4) 0 -0- -0-
Board of Directors 2004 -0-(7) -0- 0 1,200,000(4) 0 -0- -0-
- ----------------------------------------------------------------------------------------------------------------------------
Mark F. Weller
President and 2002 -0-(5) -0-(3) 0 800,000(4) 0 -0- -0-
Director 2003 -0-(6) -0-(3) 0 1,100,000(4) 0 -0- -0-
2004 -0-(8) -0- 0 1,200,000(4) 0 -0- -0-
- ----------------------------------------------------------------------------------------------------------------------------
Scott Duncan
CFO 2003 -0- -0- 0 465,000(4) 0 -0- -0-
2004 -0- -0- 0 480,000(4) 0 -0- -0-
(1) 6,279,041 shares of common stock were issued in lieu of cash salary
(2) 14,041,356 shares of common stock were issued in lieu of cash salary
(3) Bonus of 200,000 restricted shares of common stock
(4) Restricted shares pursuant to employment contract
(5) 3,602,230 shares of common stock were issued in lieu of cash salary
(6) 11,666,724 shares of common stock were issued in lieu of cash salary
(7) 11,300,064 shares of common stock were issued in lieu of cash salary
(8) 10,170,056 shares of common stock were issued in lieu of cash salary
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)
Name Number of Percent of Exercise Expiration Grant Date Present
Securities Total of Base Date Value ($)
Underlying Options / Price
Options/ SARs ($/sh)
SARs Granted to
Granted Employees
(#) in Fiscal
Year
- --------------------------------------------------------------------------------
Charles B
Pollock 0 0 0 N/A N/A
- --------------------------------------------------------------------------------
Mark F
Weller 0 0 0 N/A N/A
- --------------------------------------------------------------------------------
Scott
Duncan 0 0 0 N/A N/A
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FOR YEAR END OPTIONS/SAR VALUES
- -------------------------------------------------------------------------------
Name Shares Value Realized Number of Value of
Acquired on ($) Securities Unexercised In-
Exercise (#) Underlying The-Money
Unexercised Options/SARs
Options / SARs At Fiscal Year-
At Fiscal Year- End ($)
End (#) Exercisable /
Exercisable / Unexercisable
Unexercisable
- --------------------------------------------------------------------------------
Charles B
Pollock -0- -0- -0- -0-
- --------------------------------------------------------------------------------
Mark F
Weller -0- -0- -0- -0-
- --------------------------------------------------------------------------------
Scott
Duncan -0- -0- -0- -0-
Compensation of directors
During the fiscal year ended December 31, 2004, none of the directors of the
Corporation received any fees or retainers for acting as directors or as members
of committees of the board of directors.
Equity Compensation Plans
While we have been successful in attracting and retaining qualified employees,
we believe that our future success will depend in part on our continued ability
to attract and retain highly qualified personnel. Our Executive Officers
currently defer their salaries until certain revenue benchmarks are met. We
believe that equity ownership is an important factor in our ability to attract
and retain qualified employees. In May 2005, the Board of Directors approved the
2005 Equity Compensation Plan (the "Plan") for employees, consultants and
Directors. The purpose of the Plan is to further the interests of the
Corporation and the stockholders by providing incentives in the form of stock to
key employees, consultants and Directors who contribute materially to our
success and profitability. The grants recognize and reward outstanding
individual performances and contributions and will give such a person a
proprietary interest in us, thus enhancing their personal interest in our
continued success and progress. The Plan also compensates consultants for their
work for the Corporation. The Plan will be administered by the Board of
Directors. The Board of Directors has exclusive power to select the participants
in the Plan, to establish the terms of the stock granted to each participant,
and to make all determinations necessary or advisable under the Plan. The
maximum number of shares of common stock that may be granted or optioned and
sold under the Plan is 25,000,000 per year. As of June 1, 2005, zero shares of
common stock have been granted pursuant to the 2005 Plan. No stock options are
currently authorized. Our shareholders are being asked to approve the Plan in
Proposal 3.
Report on Executive Compensation
The Corporation's primary concern in compensating executive officers is to
provide a lower level of fixed cash compensation, but to provide through,
restricted stock grants, bonuses, and incentives, sufficient payment to ensure
their continuing commitment to the Corporation, its overall performance, and
stock performance for the Corporation's stockholders.
Employment Agreements
We have entered into employment agreements with Mr. Charles Pollock and Mr. Mark
Weller. The following sets forth the terms of the employment agreements:
Charles B. Pollock-On October 1, 2004, we entered into an employment agreement
with Mr. Pollock that ends on December 31, 2005, to act as our Chairman of the
Board of Directors and Chief Executive Officer. Pursuant to the employment
agreement, Mr. Pollock receives 100,000 shares per month as consideration of
services.
Mark F. Weller-On October 1, 2004, we entered into an employment agreement with
Mr. Weller that ends on December 31, 2005, to act as our President and Director.
Pursuant to the employment agreement, Mr. Weller receives 100,000 shares per
month as consideration of services.
Mr. Scott Duncan was retained on May 12, 2003 as Chief Financial Officer to
provide advice and services on financial matters pertaining to the Company's
business including but not limited to SEC reports. The terms of his employment
are based on payment in the form of the Company's common stock at the rate of
40,000 restricted Rule 144 shares per month.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of June 1, 2005 with
respect to the beneficial ownership of shares of the Company's common stock by
(i) each person known to us who owns beneficially more than 5% of the
outstanding shares of the Company's common stock, (ii) each of our Directors,
(iii) each of our Executive Officers and (iv) all of our Executive Officers and
Directors as a group. Unless otherwise indicated, each stockholder has sole
voting and investment power with respect to the shares shown. As of June 1, 2005
there were 183,519,846 shares of the Company's common stock issued and
outstanding.
- -----------------------------------------------------------------------------------------------------------------------
Name and address of beneficial Number of Shares of Common % of Common Stock
Title of class owner Stock (1)
- -----------------------------------------------------------------------------------------------------------------------
Common Stock Charles B. Pollock 61,512,664(2) 33.5%
Chairman and CEO
9801 Westheimer, Suite 302
Houston, Texas 77042
- -----------------------------------------------------------------------------------------------------------------------
Common Stock Mark F. Weller 32,759,010 17.9%
President and Director
9801 Westheimer, Suite 302
Houston, Texas 77042
- -----------------------------------------------------------------------------------------------------------------------
Common Stock Scott Duncan 1,145,000 **
CFO
9801 Westheimer, Suite 302
Houston, Texas 77042
- -----------------------------------------------------------------------------------------------------------------------
Common Stock Edward Skaggs 200,000 **
Director
9801 Westheimer, Suite 302
Houston, Texas 77042
- -----------------------------------------------------------------------------------------------------------------------
Common Stock All Officers and Directors as a 95,616,674 51.4%
group (total of 4)
- -----------------------------------------------------------------------------------------------------------------------
** Less than 1%.
(1) Under Rule 13d-3 promulgated under the Exchange Act, a beneficial owner of a
security includes any person who, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise has or shares: (i) voting
power, which includes the power to vote, or to direct the voting of shares; and
(ii) investment power, which includes the power to dispose or direct the
disposition of shares. Certain shares may be deemed to be beneficially owned by
more than one person (if, for example, persons share the power to vote or the
power to dispose of the shares). In addition, shares are deemed to be
beneficially owned by a person if the person has the right to acquire the shares
(for example, upon exercise of an option) within 60 days of the date as of which
the information is provided. In computing the percentage ownership of any
person, the amount of shares is deemed to include the amount of shares
beneficially owned by such person (and only such person) by reason of these
acquisition rights. As a result, the percentage of outstanding shares of any
person as shown in this table does not necessarily reflect the person's actual
ownership or voting power with respect to the number of shares of common stock
actually outstanding on June 1, 2005. As of June 1, 2005 there were 183,519,846
shares of our common stock issued and outstanding.
(2) 24,056,943 shares indirectly through spouse and 37,455,721 shares held
directly
- --------------------------------------------------------------------------------
PROPOSAL NUMBER TWO - RATIFICATION OF APPOINTMENT OF AUDITORS
- --------------------------------------------------------------------------------
Our Stockholders will vote to ratify the appointment of the Board of Directors'
selection of Ham, Langston & Brezina to serve as the Corporation's independent
public accountants for the fiscal year ending December 31, 2005 and for
subsequent financial statements until their successors have been duly qualified.
Ham, Langston & Brezina was appointed as the Corporation's independent
accountants on March 15, 2005 to examine the Corporation's financial statements
for the years ended December 31, 2005.
RECOMMENDATION AND REQUIRED VOTE
IF YOU ARE IN FAVOR OF RATIFYING THE APPOINTMENT OF HAM, LANGSTON & BREZINA,
P.C. AS OUR INDEPENDENT ACCOUNTANTS, YOU ARE URGED TO VOTE "FOR" PROPOSAL 2 AND
YOUR PROXY WILL BE SO VOTED ULESS YOU SPECIFY OTHERWISE.
Voting Rights with Respect to the Ratification of the Appointment of Independent
Accountants. Stockholder ratification of the selection of Ham, Langston &
Brezina, P.C. ("Ham, Langston & Brezina") as the Corporation's independent
public accountants is not required by the Corporation's Bylaws or other
applicable legal requirement. However, the Board is submitting the selection of
Ham, Langston & Brezina to the Stockholders for ratification as a matter of good
corporate governance. The Board of Directors wishes to obtain from the
Stockholders a ratification of their action in appointing their existing
certified public accountant, Ham, Langston & Brezina, LLP independent auditor
for the Corporation for the year ending December 31, 2005.
If the Stockholders fail to ratify the selection, the Board will reconsider
whether or not to retain that firm. Even if the selection is ratified, the Board
at its discretion may direct the appointment of a different independent
accounting firm at any time during the year if it determines that such a change
would be in the Corporation's and the Corporation's Stockholders' best
interests. A representative of Ham, Langston & Brezina, LLP is expected to be
present at the Stockholder Meeting with the opportunity to make a statement if
he so desires and to respond to appropriate questions.
The affirmative vote of the holders of a majority of the issued and outstanding
shares of Common Stock present or represented by proxy and entitled to vote at
the Stockholder Meeting will be required to ratify the selection of Ham,
Langston & Brezina as the Corporation's independent public accountants for the
fiscal year ending December 31, 2005 and for subsequent financial statements
until their successors have been duly qualified. Accordingly, broker non-votes
and abstentions on Proposal 2 will have the same effect as a vote against
ratifying the appointment of the independent accountants.
Audit Fees
Ham, Langston & Brezina, L.L.P. billed us in the aggregate amount of $29,349 and
$24,577 for professional services rendered for their audit of our annual
financial statements and their reviews of the financial statements included in
our Forms 10-KSB for the year ended December 31, 2004 and December 31, 2003,
respectively.
AUDIT-RELATED FEES
Ham, Langston & Brezina, L.L.P. did not bill us for, nor perform professional
services rendered for assurance and related services that were reasonably
related to the performance of audit or review of the Company's financial
statements for the fiscal years ended December 31, 2004 and December 31, 2003.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
For the fiscal years ended December 31, 2004 and December 31, 2003, Ham,
Langston & Brezina, L.L.P. did not bill us for, nor perform, any financial
information systems design or implementation. For the fiscal years ended
December 31, 2004 and December 31, 2003, we were not billed for professional
services from any other accounting firm for information systems design or
implementation.
TAX FEES
Ham, Langston & Brezina, L.L.P. billed us in the aggregate amount of $1,500 and
$1,758 for professional services rendered for tax related services for the
fiscal years ended December 31, 2004 and December 31, 2003, respectively.
ALL OTHER FEES
We were not billed for any other professional services for the fiscal year ended
December 31, 2004.
AUDITOR INDEPENDENCE
Our Board of Directors considers that the work done for us in the year ended
December 31, 2004 by Ham, Langston & Brezina, L.L.P. is compatible with
maintaining Ham, Langston & Brezina, L.L.P.'s independence.
AUDITOR'S TIME ON TASK
All of the work expended by Ham, Langston & Brezina, L.L.P. on our December 31,
2004 audit was attributed to work performed by Ham, Langston & Brezina, L.L.P.'s
full-time, permanent employees.
- --------------------------------------------------------------------------------
PROPOSAL NUMBER THREE - INCREASE IN AUTHORIZED SHARES
- --------------------------------------------------------------------------------
Our Stockholders will vote on an amendment to the Corporation's Articles of
Incorporation which will increase the number of authorized shares of the
Corporation's stock from 210,000,000 to 510,000,000.
RECOMMENDATION AND REQUIRED VOTE
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS PLACE A VOTE
"FOR" PROPOSAL "3", AND YOUR PROXY WILL BE SO VOTED UNLESS YOU SPECIFY
OTHERWISE.
Voting Rights with Respect to the Increase in Authorized Shares
The Board is of the opinion that the amendment to the Articles of Incorporation
to Increase the Authorized Shares of Common Stock is advisable and in the
Corporation's best interests and recommends a vote "FOR" the approval this
proposal. The form of Certificate of Amendment to the Articles of Incorporation
is attached hereto as Attachment "A". The affirmative vote of a majority of the
issued and outstanding shares of Common Stock is required for the approval of
the amendment to the Articles of Incorporation to increase the authorized shares
of Common Stock. For purposes of the vote to amend the Articles of Incorporation
to increase the authorized shares of Common Stock, as amended, abstentions and
broker non-votes will have the same effect as a vote against this proposal. All
proxies will be voted to approve the amendment to the Articles of Incorporation
unless a contrary vote is indicated on the enclosed proxy card.
INTRODUCTION
The Board has approved, subject to stockholder approval, an amendment to its
Articles of Incorporation, as amended, which will increase the aggregate number
of shares of common stock authorized for issuance from 210,000,000 shares to
510,000,000 shares.
The Board believes the Corporation is competing in a dynamic and rapidly
evolving energy marketplace. The competition for development opportunities are
very high and companies with good access to capital and the ability to move
quickly to acquire energy prospects or synergistic businesses have greater
opportunities for corporate growth. The proposed increase in the authorized
Common Stock has been recommended by the Board to assure that an adequate supply
of authorized unissued shares is available for use primarily in connection with
corporate acquisitions, raising additional capital for operations, and the
issuance of shares under the Corporation's 2005 Equity Compensation Plan. The
shares may also be used for general corporate needs, such as future stock
dividends or stock splits. There currently are no plans or arrangements relating
to the issuance of any of the additional shares of Common Stock proposed to be
authorized.
Our Certificate of Incorporation presently authorizes 200,000,000 shares of
common stock and 10,000,000 shares of preferred stock. At June 1, 2005, we had
194,678,344 shares of Common Stock outstanding and 183,519,846 shares of Common
Stock issued and no preferred stock issued and outstanding. Included in common
stock issued were certain shares issued under a Securities Purchase Agreement
(the "Securities Purchase Agreement") whereby the Corporation issued 16,149,998
shares of restricted common stock to an escrow agent (the "Escrowed Shares") for
the benefit of four investor groups in exchange for $1,300,000 in cash in 2001.
The terms of the Securities Purchase Agreement allowed the escrow agent for the
Escrowed Shares to issue restricted common stock in the amount of 4,991,500
shares to the investor groups and included provisions for the issuance of four
series of warrants, which comprise the remaining 11,158,498 issued shares, with
exercise prices to be set based on a combination of certain future events and
the performance of the Corporation's common stock. To date Pangea has not been
provided notice that any of the warrants are to be exercised. The difference
between the shares issued and the shares outstanding represent the shares
underlying these warrants that have not been exercised.
If the Proposal 3 is adopted, the first full paragraph of Article III of the
Corporation's Articles of Incorporation, as amended, will read as follows:
"ARTICLE III"
The total number of shares of stock that the Corporation shall have
authority to issue is Five Hundred Ten Million (510,000,000)
consisting of Five Hundred Million (500,000,000) shares of Common
Stock, par value $0.001 per share ("Common Stock"), and Ten Million
(10,000,000) shares of Preferred Stock, par value $0.001 per share
("Preferred Stock").
Shares of Preferred Stock of the Corporation may be issued from time
to time in one or more series, each of which shall have such
distinctive designation or title as shall be determined by the Board
of Directors of the Corporation ("Board of Directors") prior to the
issuance of any shares thereof. Preferred Stock shall have such
voting powers, full or limited, or no voting powers, and such
preferences and relative, participating, optional or other special
rights and such qualifications, limitations or restrictions thereof,
as shall be stated in such resolution or resolutions providing for
the issue of such class or series of Preferred Stock as maybe
adopted from time to time by the Board of Directors prior to the
issuance of any shares thereof. The number of authorized shares of
Preferred Stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by the affirmative vote
of the holders of a majority of the voting power of all the then
outstanding shares of the capital stock of the corporation entitled
to vote generally in the election of the Directors (the "Voting
Stock"), voting together as a single class, without a separate vote
of the holders of the Preferred Stock, or any series thereof, unless
a vote of any such holders is required pursuant to any Preferred
Stock Designation."
CERTAIN EFFECTS OF THE PROPOSED AMENDMENT
The Board believes that approval of this Proposal 3 is essential for the growth
and development of the Corporation. However, the following should be considered
by a stockholder in deciding how to vote upon this Proposal.
The additional shares that the Board would be authorized to issue upon approval
of the Proposal, if so issued, would have a dilutive effect upon the percentage
of the Corporation's equity owned by present stockholders. The issuance of the
additional shares might be disadvantageous to current stockholders in that any
additional issuances would potentially reduce per share dividends, if any.
Stockholders should consider, however, that the possible impact upon dividends
is likely to be minimal in view of the fact that the Corporation has never paid
dividends on shares of the Corporation's Common Stock and do not have any
current plans to pay a cash dividend in the foreseeable future, except to the
extent we would be required to satisfy any obligations with respect to any
Preferred Stock we may issue in the future. The Corporation presently intends to
retain earnings, for investment and use in business operations.
EFFECTIVENESS OF THE AUTHORIZED INCREASE
If the Proposal 3 is approved by the requisite vote of the Corporation's
stockholders, the Authorized Share Increase will be effective upon the filing of
the Amendment of the Articles of Incorporation with the Colorado Secretary of
State, which filing is expected to take place shortly after the Stockholder
Meeting. If this Proposal 3 is not approved by the stockholders, then we will
not file the Amendment to the Articles of Incorporation.
- --------------------------------------------------------------------------------
PROPOSAL NUMBER FOUR - APPROVAL OF THE 2005 EQUITY COMPENSATION PLAN
- --------------------------------------------------------------------------------
Our Stockholders will vote to approve the 2005 Equity Compensation Plan.
RECOMMENDATION AND REQUIRED VOTE
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS PLACE A VOTE
"FOR" PROPOSAL 4, AND YOUR PROXY WILL BE SO VOTED UNLESS YOU SPECIFY OTHERWISE.
Voting Rights with Respect to Approval of 2005 Equity Compensation Plan The
affirmative vote of a majority of issued and outstanding shares of common stock
present in person or represented by proxy and entitled to vote at the
Stockholder Meeting is required for the approval of the adoption of the 2005
Equity Compensation Plan ("the Plan"). A copy of the Plan is attached hereto as
Attachment "B". For purposes of the vote to adopt the 2005 Equity Compensation
Plan, abstentions will have the same effect as a vote against approval of the
adoption of the Plan. Broker non-votes are counted towards a quorum, but are not
counted for any purpose in determining whether this matter has been approved.
The Board is of the opinion that the adoption of the 2005 Equity Compensation
Plan is advisable and in the Corporation's best interests and recommends a vote
"FOR" the approval of the Plan. All proxies will be voted to approve the 2005
Equity Compensation Plan unless a contrary vote is indicated on the enclosed
proxy card.
INTRODUCTION
The 2005 Equity Compensation Plan provides for the issuance of restricted stock
and stock grants to selected officers, directors, employees and consultants of
the Corporation or its potential parent or subsidiary companies. The following
sections summarize the principal features of the Plan,
PURPOSE
The Plan is intended to aid the Corporation in maintaining and developing a
management team, attracting qualified officers and employees capable of
assisting in the future success of the Corporation, and rewarding those
individuals who have contributed to the success of the Corporation. It is
designed to aid the Corporation in retaining the services of executives and
employees and in attracting new personnel when needed for future operations and
growth and to provide such personnel with an incentive to remain employees of
the Corporation, to use their best efforts to promote the success of the
Corporation's business, and to provide them with an opportunity to obtain or
increase a proprietary interest in the Corporation. It is also designed to
permit the Corporation to reward those individuals who are not employees of the
Corporation but who are perceived by management as having contributed to the
success of the Corporation or who are important to the continued business and
operations of the Corporation. The above aims will be effectuated through the
granting awards, subject to the terms and conditions of this Plan. Pangea
believes that stock grants will serve to align compensation with business
objectives and help the Corporation achieve the basic goal of enhancing
shareholder value.
ADMINISTRATION
The 2005 Equity Compensation Plan is administered by the Corporation's Board of
Directors or a duly appointed Committee, which will be referred to throughout
this Proxy Statement as the Plan Administrator. The Plan Administrator has the
power to construe and interpret the Plan promulgate, amend and rescind rules and
regulations relating to the administration of the Plan, to authorize any person
to execute, on behalf of the Corporation, any instrument required to carry out
the purposes of the Plan, to determine when rights will be granted under the
Plan, to, subject to the provisions of the Plan, determine the persons to whom
stock will be granted, to make any and all other determinations which it
determines to be necessary or advisable for administration of the Plan.
2005 EQUITY COMPENSATION PLAN
The purpose of the 2005 Equity Compensation Plan is to further the interests of
the Corporation and the stockholders by providing incentives in the form of
stock grants to key employees and Directors who contribute materially to our
success and profitability. The grants recognize and reward outstanding
individual performances and contributions and will give such persons a
proprietary interest in us, thus enhancing their personal interest in our
continued success and progress. The Plan also assists us and our subsidiaries in
attracting and retaining key employees and Directors.
The Plan Administrator has the exclusive power to select the participants in the
Plan, to establish the terms of the Award to each participant. The maximum
aggregate number of shares of common stock that may be granted each year under
the Plan is 25,000,000. As of June 1, 2005, zero shares of common stock have
been granted pursuant to the Plan to non-employee consultants. The effective
date of the Plan was June 1, 2005. Stock may be granted under the Plan only
within 10 years from the effective date of the Plan. The Plan Administrator
votes on any matters affecting the administration of the Plan or the grant of
any Stock. The Plan Administrator may:
(a) to select the participants in this plan;
(b) establish the terms of the Stock granted to each participants which
may not be the same in each case;
(c) determine the total number of shares of Stock to grant to a grantee,
which may not be the same amount to each Eligible Person in each
case;
(d) make all other determinations necessary or advisable under the Plan.
(e) The Plan Administrator has the sole and absolute discretion to
determine whether the performance of an Eligible Person warrants an
award under this Plan, and to determine the amount of the award.
The Plan Administrator has full and exclusive power to construe and interpret
this Plan, to prescribe and rescind rules and regulations relating to this Plan,
and take all actions necessary or advisable for the Plan's administration. Any
such determination made by the Plan Administrator will be final and binding on
all persons. (d) A member of the Plan Administrator will not be liable for
performing any act or making any determination in good faith
The Board of Directors of the Corporation may amend, terminate or suspend this
Plan at any time, in its sole and absolute discretion; provided, however, that
to the extent required to qualify this Plan under Rule 16b-3 promulgated under
Section 16 of the Exchange Act, no amendment that would (a) materially increase
the number of shares of Stock that may be issued under this Plan, (b) materially
modify the requirements as to eligibility for participation in this Plan, or (c)
otherwise materially increase the benefits accruing to participants under this
Plan, shall be made without the approval of the Corporation's shareholders.
Subject to the preceding sentence, the Board of Directors shall have the power
to make any changes in the Plan and in the regulations and administrative
provisions under it as in the opinion of counsel for the Corporation may be
necessary or appropriate from time to time.
With respect to administration of this Plan, the Corporation shall indemnify
each present and future member of the Committee and the Board of Directors
against, and each member of the Committee and the Board of Directors shall be
entitled without further act on his part to indemnity from the Corporation for,
all expenses (including attorney's fees, the amount of judgments and the amount
of approved settlements made with a view to the curtailment of costs of
litigation, other than amounts paid to the Corporation itself) reasonably
incurred by him in connection with or arising out of any action, suit, or
proceeding in which he may be involved by reason of his being or having been a
member of the Committee and/or the Board of Directors, whether or not he
continues to be a member of the Committee and/or the Board of Directors at the
time of incurring the expenses, including, without limitation, matters as to
which he shall be finally adjudged in any action, suit or proceeding to have
been found to have been negligent in the performance of his duty as a member of
the Committee or the Board of Directors. However, this indemnity shall not
include any expenses incurred by any member of the Committee and/or the Board of
Directors in respect of matters as to which he shall be finally adjudged in any
action, suit or proceeding to have been guilty of gross negligence or willful
misconduct in the performance of his duty as a member of the Committee and the
Board of Directors. In addition, no right of indemnification under this Plan
shall be available to or enforceable by any member of the Committee and the
Board of Directors unless, within 60 days after institution of any action, suit
or proceeding, he shall have offered the Corporation the opportunity to handle
and defend same at its own expense. The failure to notify the Corporation within
60 days shall only affect a Director or committee member's right to
indemnification if said failure to notify results in an impairment of the
Corporation's rights or is detrimental to the Corporation. This right of
indemnification shall inure to the benefit of the heirs, executors or
administrators of each member of the Committee and the Board of Directors and
shall be in addition to all other rights to which a member of the Committee and
the Board of Directors may be entitled as a matter of law, contract, or
otherwise.
The provisions of the Plan shall be construed, administered, governed under the
laws of the State of Colorado.
If our shareholders do not approve the Plan, then it will remain in force as a
nonqualified plan. The shares were registered on Form S-8 on June 2, 2005.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS FOR FISCAL
YEAR ENDED DECEMBER 31, 2004
- ----------------------------------------------------------------------------------------------------------------------
Number of Securities to be Weighted-average price of Number of Securities
issued upon exercise of outstanding options remaining available for
outstanding options, warrants and rights future issuance under
warrants and rights equity compensation
plans(excluding securities
reflected in column (a))
- ----------------------------------------------------------------------------------------------------------------------
(a) (b) (c)
- ----------------------------------------------------------------------------------------------------------------------
Equity compensation plans
approved by security holders 10,000,000 $0.11 0
- ----------------------------------------------------------------------------------------------------------------------
Equity compensation plans not
approved by security holders 0 0 0
- ----------------------------------------------------------------------------------------------------------------------
TOTAL 10,000,000 $0.11 0
- ----------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any other matters to be presented for
action at the Annual Stockholder Meeting. However, if any other matter is
properly presented at the Annual Stockholder Meeting, it is the intention of the
persons named in the enclosed proxy to vote in accordance with their best
judgment on such matters.
FUTURE PROPOSALS OF STOCKHOLDERS
The deadline for stockholders to submit proposals to be considered for inclusion
in the Proxy Statement for the 2006 Annual Stockholder Meeting is February 1,
2006.
BY ORDER OF THE BOARD OF DIRECTORS
CHARLES B. POLLOCK
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
JUNE 14, 2005
HOUSTON, TEXAS
ATTACHMENT "A"
CERTIFICATE OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
PANGEA PETROLEUM CORP.
We, the undersigned hereby certify that:
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopted the following Articles of Amendment to its
Articles of Incorporation.
Article III of the Articles of Incorporation is amended to read:
The total number of shares of stock that the Corporation shall have
authority to issue is Five Hundred Ten Million (510,000,000)
consisting of Five Hundred Million (500,000,000) shares of Common
Stock, par value $0.001 per share ("Common Stock"), and Ten Million
(10,000,000) shares of Preferred Stock, par value $0.001 per share
("Preferred Stock").
Shares of Preferred Stock of the Corporation may be issued from time
to time in one or more series, each of which shall have such
distinctive designation or title as shall be determined by the Board
of Directors of the Corporation ("Board of Directors") prior to the
issuance of any shares thereof. Preferred Stock shall have such
voting powers, full or limited, or no voting powers, and such
preferences and relative, participating, optional or other special
rights and such qualifications, limitations or restrictions thereof,
as shall be stated in such resolution or resolutions providing for
the issue of such class or series of Preferred Stock as maybe
adopted from time to time by the Board of Directors prior to the
issuance of any shares thereof. The number of authorized shares of
Preferred Stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by the affirmative vote
of the holders of a majority of the voting power of all the then
outstanding shares of the capital stock of the corporation entitled
to vote generally in the election of the Directors (the "Voting
Stock"), voting together as a single class, without a separate vote
of the holders of the Preferred Stock, or any series thereof, unless
a vote of any such holders is required pursuant to any Preferred
Stock Designation."
The Board of Directors recommended and consented to this amendment on May 16,
2005. A majority of the shareholders of the corporation voted at a meeting of
shareholders to amend the Articles of Incorporation. A total of _________ shares
of common stock voted in favor of the amendment to the Articles of
Incorporation, which constituted the vote of a majority of the shares entitled
to vote on this amendment. There are no other classes of stock outstanding.
(signed) ________________________
by /s/ Mark F. Weller, President
ATTACHMENT "B"
PANGEA PETROLEUM CORPORATION
EQUITY COMPENSATION PLAN
Pangea Petroleum Corporation, a Colorado corporation, (the "Corporation"),
hereby adopts this Equity Compensation Plan (the "Plan"), under which Common
Stock in Lieu of Cash Compensation Awards ("Awards") of the Corporation may be
granted from time to time to employees, directors and consultants of the
Corporation or its subsidiaries, if any.
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The Plan is intended to aid the Corporation in maintaining and developing a
management team, attracting qualified officers and employees capable of
assisting in the future success of the Corporation, and rewarding those
individuals who have contributed to the success of the Corporation. It is
designed to aid the Corporation in retaining the services of executives and
employees and in attracting new personnel when needed for future operations and
growth and to provide such personnel with an incentive to remain employees of
the Corporation, to use their best efforts to promote the success of the
Corporation's business, and to provide them with an opportunity to obtain or
increase a proprietary interest in the Corporation. It is also designed to
permit the Corporation to reward those individuals who are not employees of the
Corporation but who are perceived by management as having contributed to the
success of the Corporation or who are important to the continued business and
operations of the Corporation. The above aims will be effectuated through the
granting awards, subject to the terms and conditions of this Plan. Stock granted
pursuant to this Plan, may be registered on Form S-8 or other appropriate form
of registration statement.
A. RULE 16B-3 PLAN.
The Corporation is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and therefore the Plan is
intended to comply with all applicable conditions of Rule 16b-3 (and all
subsequent revisions thereof) promulgated under the Exchange Act. To the extent
any provision of the Plan or action by the Committee or the Board of Directors
or Committee fails to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Committee. In addition, the
Committee or the Board of Directors may amend the Plan from time to time as it
deems necessary in order to meet the requirements of any amendments to Rule
16b-3 without the consent of the shareholders of the Corporation.
B. EFFECTIVE DATE OF PLAN.
The effective date of this Plan shall be June 1, 2005 (the "Effective Date").
The Board of Directors shall, within one year of the Effective Date, submit the
Plan for approval to the shareholders of the Corporation. The plan shall be
approved by at least a majority of shareholders voting in person or by proxy at
a duly held shareholders' meeting, or if the provisions of the corporate
charter, by-laws or applicable state law prescribes a greater degree of
shareholder approval for this action, the approval by the holders of that
percentage, at a duly held meeting of shareholders.
C. DEFINITIONS.
The following definitions shall apply to this Plan
"Act" means the Securities Exchange Act of 1934, as amended from time to time.
"Administrator" is defined in Section 2(a).
"Affiliate" means any parent corporation and any subsidiary corporation. The
term "parent corporation" means any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation if, at the time of
the action or transaction, each of the corporations other than the Corporation
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain. The term
"subsidiary corporation" means any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation if, at the time
of the action or transaction, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in the chain.
"Agreement" means, individually or collectively, any agreement entered into
pursuant to the Plan pursuant to which Stock are granted to a participant.
"Board" means the Board of Directors of the Corporation as constituted from time
to time.
"Cause" shall mean, for purposes of whether and when a participant has incurred
a Termination of Employment for Cause: (i) any act or omission which permits the
Corporation to terminate the written agreement or arrangement between the
participant and the Corporation or a Subsidiary or Parent for Cause as defined
in such agreement or arrangement; or (ii) in the event there is no such
agreement or arrangement or the agreement or arrangement does not define the
term "cause," then Cause shall mean an act or acts of dishonesty by the
participant resulting or intending to result directly or indirectly in gain to
or personal enrichment of the participant at the Corporation's expense and/or
gross negligence or willful misconduct on the part of the participant.
"Change in Control" means, for purposes of this Plan there shall be consummated
(i) any consolidation or merger of the Corporation in which the Corporation is
not the continuing or surviving corporation or pursuant to which shares of the
Corporation's common stock would be converted into cash, securities or other
property, other than a merger of the Corporation in which the holders of the
Corporation's common stock immediately prior to the merger have substantially
the same proportionate ownership of common stock of the surviving corporation
immediately after the merger; or (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the assets of the Corporation; or the shareholders of the
Corporation shall approve any plan or proposal for the liquidation or
dissolution of the Corporation.
"Code" means the Internal Revenue Code of 1986, as amended from time to time,
and any successor Code, and related rules, regulations and interpretations.
"Common Stock" or "Stock" means the Common Stock, par value per share of the
Corporation whether presently or hereafter issued, or such other class of shares
or securities as to which the Plan may be applicable subject to adjustments
pursuant to Section 3.
"Common Stock in Lieu of Cash Compensation Award" means Awards granted pursuant
to Section 6.
"Corporation" means Pangea Petroleum Corporation, a Colorado Corporation, and
any successor or assignee company corporations into which the Corporation may be
merged, changed or consolidated; any company for whose securities the securities
of the Corporation shall be exchanged; and any assignee of or successor to
substantially all of the assets of the Corporation.
"Director" means any member of the Board of Directors of the Corporation or any
Parent or subsidiary of the Corporation that now exists or hereafter is
organized or acquired by or acquires the Corporation.
"Effective Date" means the date on which the Plan is initially approved by the
Board of Directors as set forth in Section 13.
"Eligible Persons" shall mean, with respect to the Plan, those persons who, at
the time that an Award is granted, are (i) officers, directors or employees of
the Corporation or Affiliate or (ii) attorneys, consultants or subcontractors of
the Corporation or affiliate.
"Employee" means any person employed on an hourly or salaried basis by the
Corporation or any Parent or Subsidiary of the Corporation that now exists or
hereafter is organized or acquired by or acquires the Corporation.
"Fair Market Value" means (i) if the Common Stock is not listed or admitted to
trade on a national securities exchange and if bid and ask prices for the Common
Stock are not furnished through NASDAQ or a similar organization, the value
established by the Committee, in its sole discretion, for purposes of the Plan;
(ii) if the Common Stock is listed or admitted to trade on a national securities
exchange or a national market system, the closing price of the Common Stock, as
published in the Wall Street Journal, so listed or admitted to trade on such
date or, if there is no trading of the Common Stock on such date, then the
closing price of the Common Stock on the next preceding day on which there was
trading in such shares; or (iii) if the Common Stock is not listed or admitted
to trade on a national securities exchange or a national market system, the mean
between the bid and ask price for the Common Stock on such date, as furnished by
the National Association of Securities Dealers, Inc. through NASDAQ or a similar
organization if NASDAQ is no longer reporting such information. If trading in
the stock or a price quotation does not occur on the Date of Grant, the next
preceding date on which the stock was traded or a price was quoted will
determine the fair market value.
"Non-Employee Director" means a member of the Board who is not also an employee
of the Corporation or any Subsidiary as that term is defined in Rule 16b-3 under
the Exchange Act.
"Plan" means this Equity Compensation Plan as may be amended from time to time.
"Stock Award" means Awards granted pursuant to Section 5.
"Subsidiary" means any corporation or other entity (other than the Corporation)
in any unbroken chain of corporations or other entities beginning with the
Corporation if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing 50% or more of the economic interest or the total combined voting
power of all classes of stock or other interests in one of the other
corporations or entities in the chain.
"Ten Percent Shareholder" means an individual who, at the time of the award,
owns Stock possessing more than 10% of the total combined voting power of all
classes of stock of the Corporation or of any Affiliate. An individual shall be
considered as owning the Stock owned, directly or indirectly, by or for his
brothers and sisters (whether by the whole or half blood), spouse, ancestors,
and lineal descendants; and Stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust, shall be considered as being owned
proportionately by or for its shareholders, partners, or beneficiaries.
"Termination" or "Termination of Employment" means the occurrence of any act or
event whether pursuant to an employment agreement or otherwise that actually or
effectively causes or results in the person's ceasing, for whatever reason, to
be an officer or employee of the Corporation or of any Subsidiary or Parent
including, without limitation, death, disability, dismissal, severance at the
election of the participant, retirement, or severance as a result of the
discontinuance, liquidation, sale or transfer by the Corporation or its
Subsidiaries or Parent of all businesses owned or operated by the Corporation or
its Subsidiaries. A Termination of Employment shall occur to an employee who is
employed by a Subsidiary if the Subsidiary shall cease to be a Subsidiary and
the participant shall not immediately thereafter become an employee of the
Corporation or a Subsidiary.
"Subsidiary" means any corporation 50% or more of the voting securities of which
are owned directly or indirectly by the Corporation at any time during the
existence of this Plan.
In addition, certain other terms used in this Plan shall have the definitions
given to them in the first place in which they are used.
SECTION 2. ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT
PARTICIPANTS AND DETERMINE AWARDS
A. ADMINISTRATION
The Plan shall be administered by either the entire Board of Directors or a
committee of not fewer than two (2) Independent Directors (in either case, the
"Administrator"). Each member of the Committee shall be a "non-employee
director" within the meaning of Rule 16b-3(b)(3)(i) promulgated under the Act,
or any successor definition under said rule.
If this Plan is administered by the Committee, then a majority of the full
Committee constitutes a quorum for purposes of administering the Plan, and all
determinations of the Committee shall be made by a majority of the members
present at a meeting at which a quorum is present or by the unanimous written
consent of the Committee.
If no Committee has been appointed, members of the Board may vote on any matters
affecting the administration of the Plan or the grant of any Stock pursuant to
the Plan, except that no such member shall act on the granting of Stock to
himself, but such member may be counted in determining the existence of a quorum
at any meeting of the Board during which action is taken with respect to the
granting of Stock to him.
The interpretation and construction of the terms of the Plan by the Board or a
duly authorized committee shall be final and binding on all participants in the
Plan absent a showing of demonstrable error. No member of the Plan Administrator
shall be liable for any action taken or determination made in good faith with
respect to the Plan.
B. POWERS OF ADMINISTRATOR.
The Administrator shall have the sole and exclusive power and authority to grant
Awards consistent with the terms of the Plan, including the power and authority:
to select the participants in this plan; establish the terms of the Stock
granted to each participants which may not be the same in each case; determine
the total number of shares of Stock to grant to a grantee, which may not be the
same amount to each Eligible Person in each case; make all other determinations
necessary or advisable under the Plan.
The Plan Administrator has the sole and absolute discretion to determine whether
the performance of an Eligible Person warrants an award under this Plan, and to
determine the amount of the award. The Plan Administrator has full and exclusive
power to construe and interpret this Plan, to prescribe and rescind rules and
regulations relating to this Plan, and take all actions necessary or advisable
for the Plan's administration. Any such determination made by the Plan
Administrator will be final and binding on all persons. (d) A member of the Plan
Administrator will not be liable for performing any act or making any
determination in good faith. All decisions and interpretations of the
Administrator shall be made in the Administrator's sole and absolute discretion
and shall be final and binding on all persons, including the Corporation and
Plan participants.
SECTION 3. STOCK ISSUABLE UNDER THE PLAN; TERM OF PLAN; RECAPITALIZATIONS;
MERGERS; SUBSTITUTE AWARDS
A. STOCK ISSUABLE.
The maximum number of shares of Stock reserved and available for issuance under
the Plan initially shall be 25,000,000 shares of Stock per year. In addition if
any portion of an Award is forfeited, cancelled, or reacquired by the
Corporation, satisfied without the issuance of Stock or otherwise terminated,
the shares of Stock underlying such portion of the Award shall be added back to
the shares of Stock available for issuance under the Plan. Subject to such
overall limitation, shares of Stock may be issued up to such maximum number
pursuant to any type or types of Award. The shares available for issuance under
the Plan may be authorized but unissued shares of Stock or shares of Stock
reacquired by the Corporation.
B. TERM OF PLAN.
No Awards shall be made after June 1, 2013.
C. RECAPITALIZATIONS.
Subject to the provisions of Section 12, if, through or as a result of any
merger, consolidation, sale of all or substantially all of the assets of the
Corporation, reorganization, recapitalization, reclassification, stock dividend,
stock split, reverse stock split or other similar transaction, the outstanding
shares of Stock are increased or decreased or are exchanged for a different
number or kind of shares or other securities of the Corporation, or additional
shares or new or different shares or other securities of the Corporation or
other non-cash assets are distributed with respect to such shares of Stock or
other securities, the Administrator may make an appropriate or proportionate
adjustment in (i) the maximum number of shares reserved for issuance under the
Plan, (ii) the number and kind of shares or other securities subject to any then
outstanding Awards under the Plan, The adjustment by the Administrator shall be
final, binding and conclusive. No fractional shares of Stock shall be issued
under the Plan resulting from any such adjustment, but the Administrator in its
discretion may make a cash payment in lieu of fractional shares.
SECTION 4. ELIGIBILITY
Awards under the Plan may be granted to employees, including officers, and
directors of the Corporation or its subsidiaries, as may be existing from time
to time, and to other individuals who are not employees of the Corporation, but
performed bona fide services to the Corporation, as may be deemed in the best
interest of the Corporation by the Board or the duly authorized Committee. These
individuals may be referred to as consultants or key persons. Such services to
the Corporation or a subsidiary shall not be in connection with the offer or
sale of securities in a capital-raising transaction or for investor relations.
Such Awards shall be in the amounts, and shall have the rights and be subject to
the restrictions, as may be determined by the Board or a duly authorized
Committee, all as may be within the general provisions of this Plan.
Every Eligible Person, as the Plan Administrator of the Corporation or any
subsidiary or Parent shall only be eligible to receive an Award if and as
permitted by applicable law and regulations. The Plan Administrator's Award to a
participant in any year does not require the Plan Administrator to make an Award
to that participant in any other year. Furthermore, the Plan Administrator makes
different Awards to different participants. The Plan Administrator may consider
such factors as it deems pertinent in selecting participants and in determining
the amount of their Stock, including, without limitation;
(a) the financial condition of the Corporation or its Subsidiaries;
(b) expected profits for the current or future years;
(c) the contributions of a prospective participant to the profitability or
success of the Corporation or its Subsidiaries; and
(d) the adequacy of the prospective participant's other compensation.
Participants may include persons to whom stock or other benefits previously were
granted under this or another plan of the Corporation or any Subsidiary.
SECTION 5. COMMON STOCK IN LIEU OF CASH COMPENSATION AWARDS
A. GRANTS OF COMMON STOCK PAYABLE IN LIEU OF CASH.
The Administrator may grant shares of Stock available for issuance under the
Plan to an eligible participant in lieu of cash compensation earned by the
participant with the consent of the participant, or under a short- or long-term
incentive plan of the Corporation (an "Other Incentive Plan).
B. DATE OF GRANT.
Stock granted in lieu of cash compensation shall be granted to each participant
on the date the waived cash compensation would otherwise by paid, provided,
however, that with respect to a participant who is subject to Section 16 of the
Act, if such grant date is not at least six months and one day from the date of
the election, the grant shall be delayed until the date which is six months and
one day from the date of the election (or the next following business day, if
such date is not a business day) to the extent necessary to conform to the
requirements for exempt purchases under Rule 16b-3 of the Act.
C. NUMBER OF SHARES.
The number of shares of Stock granted in lieu of cash compensation shall be
determined by dividing the amount of the waived cash compensation by the Fair
Market Value of the Stock on the date the Stock is granted. Such Stock shall be
granted for the whole number of shares so determined; the value of any
fractional share shall be paid in cash.
SECTION 6. TAX WITHHOLDING
A. PAYMENT BY PARTICIPANT.
Each participant shall, no later than the date as of which the value of an Award
or of any Stock or other amounts received there under first becomes includable
in the gross income of the participant for Federal income tax purposes, pay to
the Corporation, or make arrangements satisfactory to the Administrator
regarding payment of, any Federal, state, or local taxes of any kind required by
law to be withheld with respect to such income. The Corporation and its
Subsidiaries shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the participant. The
Corporation's obligation to deliver stock certificates to any participant is
subject to and conditioned on tax obligations being satisfied by the
participant.
C. LIABILITY OF THE COMPANY.
The Corporation that is in existence or hereafter comes into existence shall not
be liable to any person for any tax consequences expected but not realized by
any person due to the grant of Stock.
SECTION 7. TRANSFER, LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following events shall not be deemed a termination
of employment:
(a) a transfer to the employment of the Corporation from a Subsidiary or
from the Corporation to a Subsidiary, or from one Subsidiary to another;
or
(b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Corporation, if the employee's right to
re- employment is guaranteed either by a statute or by contract or under
the written policy pursuant to which the leave of absence was granted or
if the Administrator otherwise so provides in writing.
SECTION 8. AMENDMENTS AND TERMINATION
The Board of Directors of the Corporation may amend, terminate or suspend this
Plan at any time, in its sole and absolute discretion; provided, however, that
to the extent required to qualify this Plan under Rule 16b-3 promulgated under
Section 16 of the Exchange Act, no amendment that would (a) materially increase
the number of shares of Stock that may be issued under this Plan, (b) materially
modify the requirements as to eligibility for participation in this Plan, or (c)
otherwise materially increase the benefits accruing to participants under this
Plan, shall be made without the approval of the Corporation's shareholders.
Subject to the preceding sentence, the Board of Directors shall have the power
to make any changes in the Plan and in the regulations and administrative
provisions under it as in the opinion of counsel for the Corporation may be
necessary or appropriate from time to time.
SECTION 9. STATUS OF PLAN
Unless the Administrator shall otherwise expressly determine in writing, with
respect to the portion of any Award which has not been exercised and any
payments in cash, Stock or other consideration not received by a participant, a
participant shall have no rights greater than those of a general creditor of the
Corporation. In its sole discretion, the Administrator may authorize the
creation of trusts or other arrangements to meet the Corporation's obligations
to deliver Stock or make payments with respect to Awards hereunder, provided
that the existence of such trusts or other arrangements is consistent with the
foregoing sentence.
SECTION 10. CHANGE OF CONTROL AND MERGER PROVISIONS
In contemplation of and subject to the consummation of a consolidation or merger
or sale of all or substantially all of the assets of the Corporation in which
outstanding shares of Stock are exchanged for securities, cash or other property
of an unrelated corporation or business entity or in the event of a liquidation
or dissolution of the Corporation or in the event of a corporate reorganization
of the Corporation (in each case, a "Transaction"), the Board, or the board of
directors of any corporation or other entity assuming the obligations of the
Corporation, may, in its discretion, take any one or more of the following
actions, as to outstanding Awards: (i) provide that such Awards shall be assumed
or equivalent awards shall be substituted, by the acquiring or succeeding
corporation or other entity (or an affiliate thereof), and/or (ii) upon written
notice to the participants, provide that all Awards will terminate immediately
prior to the consummation of the Transaction. In the event that, pursuant to
clause (ii) above, Awards will terminate immediately prior to the consummation
of the Transaction, all vested Awards shall be fully settled in cash or in kind
at such appropriate consideration as determined by the Administrator in its sole
discretion after taking into account any and all consideration payable per share
of Stock pursuant to the Transaction (the "Transaction Price").
"Change of Control" shall be defined as an event subsequent to the adoption of
this Plan, by any "person," as such term is used in Sections 13(d) and 14(d) of
the Act (other than the Corporation, any of its Subsidiaries, any "affiliate" or
"associate" (as such terms are defined in Rule 12b-2 under the Act) of the
foregoing persons, or any trustee, fiduciary or other person or entity holding
securities under any employee benefit plan or trust of the Corporation or any of
its Subsidiaries), together with all "affiliates" and "associates" (as such
terms are defined in Rule 12b-2 under the Act) of such person, who shall become
the "beneficial owner" (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Corporation representing 25% or
more of the combined voting power of the Corporation's then outstanding
securities having the right to vote in an election of the Corporation's Board of
Directors ("Voting Securities") (other than as a result of an acquisition of
securities directly from the Corporation).
Notwithstanding the foregoing, a "Change of Control" shall not be deemed to have
occurred for purposes of the foregoing clause (i) solely as the result of an
acquisition of securities by the Corporation which, by reducing the number of
shares of Voting Securities outstanding, increases the proportionate number of
shares of Voting Securities beneficially owned by any person (as defined in the
foregoing clause (i)) to 25% or more of the combined voting power of all then
outstanding Voting Securities; PROVIDED, however, that if such person shall
thereafter become the beneficial owner of any additional shares of Voting
Securities (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly from the
Corporation), then a "Change of Control" shall be deemed to have occurred for
purposes of the foregoing clause.
SECTION 11. GENERAL PROVISIONS
A. DELIVERY OF STOCK CERTIFICATES.
Stock certificates to be delivered to participants under this Plan shall be
deemed delivered for all purposes when the Corporation or a stock transfer agent
of the Corporation shall have mailed such certificates in the United States
mail, addressed to the participant, at the participant's last known address on
file with the Corporation.
B. OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS.
Nothing contained in this Plan shall prevent the Board from adopting other or
additional compensation arrangements, including trusts, and such arrangements
may be either generally applicable or applicable only in specific cases. The
adoption of this Plan and the grant of Awards shall not confer upon any employee
any right to continued employment with the Corporation or any Subsidiary and
shall not interfere in any way with the right of the Corporation or any
Subsidiary to terminate the employment of any of its employees at any time.
C. TRADING POLICY RESTRICTIONS.
Sale of Stock acquired pursuant to an Award under the Plan shall be subject to
such Corporation's insider-trading-policy-related restrictions as established by
the Corporation from time, terms and conditions as may be established by the
Administrator from time to time, or in accordance with policies set by the
Administrator, from time to time.
D. INDEMNIFICATION OF THE COMMITTEE AND THE BOARD OF DIRECTORS.
With respect to administration of this Plan, the Corporation shall indemnify
each present and future member of the Committee and the Board of Directors
against, and each member of the Committee and the Board of Directors shall be
entitled without further act on his part to indemnity from the Corporation for,
all expenses (including attorney's fees, the amount of judgments and the amount
of approved settlements made with a view to the curtailment of costs of
litigation, other than amounts paid to the Corporation itself) reasonably
incurred by him in connection with or arising out of any action, suit, or
proceeding in which he may be involved by reason of his being or having been a
member of the Committee and/or the Board of Directors, whether or not he
continues to be a member of the Committee and/or the Board of Directors at the
time of incurring the expenses, including, without limitation, matters as to
which he shall be finally adjudged in any action, suit or proceeding to have
been found to have been negligent in the performance of his duty as a member of
the Committee or the Board of Directors. However, this indemnity shall not
include any expenses incurred by any member of the Committee and/or the Board of
Directors in respect of matters as to which he shall be finally adjudged in any
action, suit or proceeding to have been guilty of gross negligence or willful
misconduct in the performance of his duty as a member of the Committee and the
Board of Directors. In addition, no right of indemnification under this Plan
shall be available to or enforceable by any member of the Committee and the
Board of Directors unless, within 60 days after institution of any action, suit
or proceeding, he shall have offered the Corporation the opportunity to handle
and defend same at its own expense. The failure to notify the Corporation within
60 days shall only affect a Director or committee member's right to
indemnification if said failure to notify results in an impairment of the
Corporation's rights or is detrimental to the Corporation. This right of
indemnification shall inure to the benefit of the heirs, executors or
administrators of each member of the Committee and the Board of Directors and
shall be in addition to all other rights to which a member of the Committee and
the Board of Directors may be entitled as a matter of law, contract, or
otherwise.
E. GENDER.
If the context requires, words of one gender when used in this Plan shall
include the others and words used in the singular or plural shall include the
other.
F. HEADINGS.
Headings of Articles and Sections are included for convenience of reference only
and do not constitute part of the Plan and shall not be used in construing the
terms of the Plan.
G. OTHER COMPENSATION PLANS.
The adoption of this Plan shall not affect any other compensation or benefit
plans in effect for the Corporation or any Affiliate, nor shall the Plan
preclude the Corporation from establishing any other forms of compensation,
including a stock option plan, for employees of the Corporation or any
Affiliate.
H. OTHER AWARDS.
The grant of Stock or Awards shall not confer upon the Eligible Person the right
to receive any future or other Stock or Awards under this Plan, whether or not
Stock or Awards may be granted to similarly situated Eligible Persons, or the
right to receive future Stock or Awards upon the same terms or conditions as
previously granted.
SECTION 12. EFFECTIVE DATE OF PLAN
The Plan shall become effective June 1, 2005 on adoption by the board of
directors of the Corporation (the "Board").
SECTION 13. GOVERNING LAW
This Plan and all Awards and actions taken there under shall be governed by, and
construed in accordance with, the laws of the State of Colorado, applied without
regard to conflict of law principles.