UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
WESTERN STANDARD ENERGY CORP.
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(Name of Registrant as Specified In Its Charter)
N/A
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Table of Contents
NOTICE OF MEETING OF STOCKHOLDERS............................................ 1
PROXY STATEMENT.............................................................. 1
QUESTIONS AND ANSWERS ABOUT THE MEETING OF STOCKHOLDERS...................... 1
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON MARCH 26, 2010............................. 1
FORWARD LOOKING STATEMENTS................................................... 5
PROPOSAL 1 APPROVAL OF INCREASE IN AUTHORIZED SHARE CAPITAL.................. 11
PROPOSAL 2 APPROVAL OF 2010 STOCK OPTION PLAN................................ 13
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON...................... 17
"HOUSEHOLDING" OF PROXY MATERIALS............................................ 17
STOCKHOLDER PROPOSALS........................................................ 17
WHERE YOU CAN FIND MORE INFORMATION.......................................... 17
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WESTERN STANDARD ENERGY CORP.
7 New Road, Second Floor, #6 Belize City, Belize
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 26, 2010
Dear Stockholder:
A meeting of our stockholders will be held at 800-885 West Georgia Street,
Vancouver, BC, Canada, V6C 3H1, at 11:00 a.m., local time, on FRIDAY MARCH 26,
2010 for the following purposes:
1. to approve an increase in our authorized share capital to 200,000,000
shares of common stock;
2. to approve the 2010 Equity Incentive Stock Option Plan; and
3. to transact such other business as may properly come before the
Meeting or any adjournment of postponement thereof.
These items of business are more fully described in the proxy statement
accompanying this notice.
Our board of directors has fixed the close of business on FEBRUARY 16, 2010 as
the record date for the determination of the stockholders entitled to notice of,
and to vote at, the meeting or any adjournment thereof. Only the stockholders of
record on the record date are entitled to vote at the meeting.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SHAREHOLDER MEETING TO BE HELD ON MARCH 26, 2010.
THE PROXY STATEMENT IS AVAILABLE AT HTTP://WWW.WESTERN-STANDARD.COM. WHETHER OR
NOT YOU PLAN ON ATTENDING THE MEETING, WE ASK THAT YOU VOTE BY PROXY BY
FOLLOWING INSTRUCTIONS PROVIDED IN THE ENCLOSED PROXY CARD AS PROMPTLY AS
POSSIBLE. IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK, OR OTHER NOMINEE,
PLEASE FOLLOW THE VOTING INSTRUCTION SENT TO YOU BY YOUR BROKER, BANK, OR OTHER
NOMINEE IN ORDER TO VOTE YOUR SHARES.
EVEN IF YOU HAVE VOTED BY PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE
MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A
BROKER, BANK, OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST
OBTAIN A VALID PROXY ISSUED IN YOUR NAME FROM THAT RECORD HOLDER.
Sincerely,
By Order of the Board of Directors
Per: /s/ Peter Donald Jenks
-----------------------------------
Peter Donald Jenks
Chairman of the Board
Date: March 2, 2010
WESTERN STANDARD ENERGY CORP.
7 New Road, Second Floor, #6 Belize City, Belize
Telephone: (561) 300-5130
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 26, 2010
QUESTIONS AND ANSWERS ABOUT THE MEETING OF STOCKHOLDERS
WHY AM I RECEIVING THESE MATERIALS?
The board of directors of Western Standard Energy Corp. ("we", "us" or "our") is
soliciting proxies for use at a special meeting of our stockholders to be held
at 800-885 West Georgia Street, Vancouver, BC, Canada, V6C 3H1, Canada, at 11:00
a.m., local time, on FRIDAY, MARCH 26, 2010 or at any adjournment of the
meeting. These materials were first sent or given to our stockholders on or
about MARCH O, 2010.
WHAT IS INCLUDED IN THESE MATERIALS?
These materials include:
* the notice of a meeting of stockholders;
* this proxy statement for the meeting of stockholders; and
* the proxy card.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE STOCKHOLDER MEETING TO BE HELD ON MARCH 26, 2010
The above materials are also available on our corporate website at
www.western-standard.com.
WHAT ITEMS WILL BE VOTED AT THE MEETING?
Our stockholders will vote on:
1. to approve an increase in our authorized share capital to 200,000,000
shares of common stock;
2. to approve the 2010 Equity Incentive Stock Option Plan; and
3. to transact such other business as may properly come before the
Meeting or any adjournment of postponement thereof.
WHAT DO I NEED TO DO NOW?
We urge you to carefully read and consider the information contained in this
proxy statement. We request that you cast your vote on each of the proposals
described in this proxy statement. You are invited to attend the meeting, but
you do not need to attend the meeting in person to vote your shares. Even if you
do not plan to attend the meeting, please vote by proxy by following
instructions provided in the proxy card.
WHO CAN VOTE AT THE MEETING?
Our board of directors has fixed the close of business on FEBRUARY 16, 2010 as
the record date for the determination of the stockholders entitled to notice of,
and to vote at, the meeting or any adjournment. If you were a stockholder of
record on the record date, you are entitled to vote at the meeting.
As of the record date, 193,434 shares of our common stock were issued and
outstanding and no other voting securities were issued and outstanding.
Therefore, a total of 193,434 votes are entitled to be cast at the meeting.
HOW MANY VOTES DO I HAVE?
On each proposal to be voted upon, you have one vote for each share of our
common stock that you owned on the record date. There is no cumulative voting.
HOW CAN YOU VOTE?
Shares of common stock cannot be voted at our meeting unless the holder of
record is present in person or is represented by proxy. A shareholder has the
right to attend our meeting at the time and place set forth in the Notice of
Meeting and to vote their securities directly at the meeting. In the
alternative, a shareholder may appoint a person to represent such shareholder at
our meeting by completing the enclosed Form of Proxy, which authorizes a person
other than the holder of record to vote on behalf of the shareholder, and
returning it to our transfer agent, Nevada Agency and Transfer Company 50 West
Liberty Street Suite 880 Reno NV 89501. All shareholders are urged to complete,
sign, date and promptly return the proxy by mail in the enclosed postage-paid
envelope, or by fax, after reviewing the information contained in this proxy
statement. Valid proxies will be voted at our meeting and at any postponements
or adjournments thereof as you direct in the proxy, provided that they are
received by our transfer agent at least 48 hours prior to the scheduled time of
the meeting, or any adjournment thereof, or deposited with the Chair of the
meeting on the day of the meeting or any adjournment thereof prior to the time
of voting.
The shares of common stock represented by the proxy will be voted, or withheld
from voting, as directed in the proxy. If no direction is given and the proxy is
validly executed, the proxy will be voted FOR the approval of the increase in
authorized capital to 200,000,000 shares of common stock, and for the adoption
of the 2010 Equity Incentive Stock Option Plan as set forth in this proxy
statement. If any other matters properly come before our meeting, the persons
authorized under the proxies will vote upon such other matters in accordance
with their best judgment, pursuant to the discretionary authority conferred by
the proxy.
ADVICE TO BENEFICIAL HOLDERS OF SHARES OF COMMON STOCK
THE INFORMATION SET FORTH IN THIS SECTION IS OF SIGNIFICANT IMPORTANCE TO MANY
SHAREHOLDERS OF OUR CORPORATION, AS A SUBSTANTIAL NUMBER OF SHAREHOLDERS DO NOT
HOLD SHARES IN THEIR OWN NAME.
Shareholders who do not hold their shares in their own name (referred to in this
Proxy Statement as "beneficial shareholders") should note that only proxies
deposited by shareholders whose names appear on the records of our Corporation
as the registered holders of shares of common stock can be recognized and acted
upon at our meeting. If shares of common stock are listed in an account
statement provided to a shareholder by a broker, then in almost all cases those
shares of common stock will not be registered in the shareholder's name on the
records of our Corporation. Such shares of common stock will more likely be
registered under the names of the shareholder's broker or an agent of that
broker. In the United States, the vast majority of such shares are registered
under the name of Cede & Co. as nominee for The Depository Trust Company (which
acts as depository for many U.S. brokerage firms and custodian banks), and in
Canada, under the name of CDS & Co. (the registration name for The Canadian
Depository for Securities Limited, which acts as nominee and custodian for many
Canadian brokerage firms). Beneficial shareholders should ensure that
instructions respecting the voting of their shares of common stock are
communicated to the appropriate person, as without specific instructions,
brokers/nominees are prohibited from voting shares for their clients.
Applicable regulatory policy requires intermediaries/brokers to seek voting
instructions from beneficial shareholders in advance of shareholders' meetings,
unless the beneficial shareholders have waived the right to receive meeting
materials. Every intermediary/broker has its own mailing procedures and provides
its own return instructions to clients, which should be carefully followed by
beneficial shareholders in order to ensure that their shares of common stock are
voted at our meeting. The Form of Proxy supplied to a beneficial shareholder by
its broker (or the agent of the broker) is similar to the Form of Proxy provided
to registered shareholders by our Corporation. However, its purpose is limited
to instructing the registered shareholder (the broker or agent of the broker)
how to vote on behalf of the beneficial shareholder. The majority of brokers now
delegate responsibility for obtaining instructions from clients to Broadridge
Financial Solutions, Inc. ("Broadridge") (formerly, ADP Investor Communication
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Services in the United States and Independent Investor Communications Company in
Canada). Broadridge typically applies a special sticker to proxy forms, mails
those forms to the beneficial shareholders and the beneficial shareholders
return the proxy forms to Broadridge. Broadridge then tabulates the results of
all instructions received and provides appropriate instructions respecting the
voting of shares to be represented at our meeting. A BENEFICIAL SHAREHOLDER
RECEIVING A BROADRIDGE PROXY CANNOT USE THAT PROXY TO VOTE SHARES OF COMMON
STOCK DIRECTLY AT OUR MEETING - THE PROXY MUST BE RETURNED TO BROADRIDGE WELL IN
ADVANCE OF OUR MEETING IN ORDER TO HAVE THE SHARES OF COMMON STOCK VOTED.
Although a beneficial shareholder may not be recognized directly at our meeting
for the purposes of voting shares of common stock registered in the name of his
broker (or agent of the broker), a beneficial shareholder may attend at our
meeting as proxyholder for the registered shareholder and vote the shares of
common stock in that capacity. Beneficial shareholders who wish to attend at our
meeting and indirectly vote their shares of common stock as proxyholder for the
registered shareholder should enter their own names in the blank space on the
instrument of proxy provided to them and return the same to their broker (or the
broker's agent) in accordance with the instructions provided by such broker (or
agent), well in advance of our meeting.
Alternatively, a beneficial shareholder may request in writing that his or her
broker send to the beneficial shareholder a legal proxy which would enable the
beneficial shareholder to attend at our meeting and vote his or her shares of
common stock.
QUORUM
A quorum of shareholders is necessary to take action at our meeting. A majority
of the shareholders, as at February 16, 2010, entitled to vote at the meeting,
person present in person or represented by proxy will constitute a quorum for
the transaction of business at our meeting. However, if a quorum is not present,
then the holders of a majority of the shares of common stock of the Company who
are present at the meeting, in person or by proxy, may adjourn such meeting from
time to time until holders of a majority of the shares of the capital stock
shall attend. At any such adjourned meeting at which a quorum is present or
represented, any business may be transacted that might have been transacted at
the original meeting. Broker non-votes occur when a nominee holding shares of
common stock for a beneficial owner of those shares of common stock has not
received voting instructions from the beneficial owner with respect to a
particular matter and such nominee does not possess or choose to exercise
discretionary authority with respect thereto. Broker non-votes and abstentions
will be included in the determination of the number of shares of common stock
present at our meeting for quorum purposes but will not be counted as votes cast
on any matter presented at our meeting.
YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE ASKED TO MARK, DATE, SIGN AND
RETURN THE ACCOMPANYING FORM OF PROXY WHETHER OR NOT YOU PLAN TO ATTEND OUR
MEETING. IF YOU PLAN TO ATTEND OUR MEETING TO VOTE IN PERSON AND YOUR SHARES ARE
REGISTERED WITH OUR TRANSFER AGENT IN THE NAME OF A BROKER OR BANK, YOU MUST
SECURE A PROXY FROM THE BROKER OR BANK ASSIGNING VOTING RIGHTS TO YOU FOR YOUR
SHARES OF COMMON STOCK.
HOW DO I VOTE MY SHARES?
If you are a stockholder of record, you may vote in person at the meeting or by
proxy.
* To vote in person, come to the meeting, and we will give you a ballot
when you arrive.
* If you do not wish to vote in person or if you will not be attend the
meeting, you may vote by proxy by mail, by telephone or via the
Internet by following instructions provided in the proxy card.
If you hold your shares in "street name" and:
* you wish to vote in person at the meeting, you must obtain a valid
proxy from your broker, bank, or other nominee that holds your shares
giving you the right to vote the shares at the meeting. Please follow
the instructions from your broker, bank or other nominee, or contact
your broker, bank or other nominee to request a proxy card.
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* you do not wish to vote in person or you will not be attend the
meeting, you must vote your shares in the manner prescribed by your
broker, bank or other nominee. Your broker, bank or other nominee
should have enclosed or otherwise provided a voting instruction card
for you to use in directing the broker, bank or nominee how to vote
your shares.
WHAT IS THE DIFFERENCE BETWEEN A STOCKHOLDER OF RECORD AND A "STREET NAME"
HOLDER?
If your shares are registered directly in your name with our transfer agent,
Nevada Agency and Transfer Company, then you are a stockholder of record with
respect to those shares.
If your shares are held in a stock brokerage account or by a bank, or other
nominee, then the broker, bank, or other nominee is the stockholder of record
with respect to those shares. However, you still are the beneficial owner of
those shares, and your shares are said to be held in "street name." Street name
holders generally cannot vote their shares directly and must instead instruct
the broker, bank, or other nominee how to vote their shares. Street name holders
are also invited to attend the meeting.
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
If you receive more than one proxy card, it means that you hold shares
registered in more than one name or in different accounts. To ensure that all of
your shares are voted, please vote by proxy by following instructions provided
in each proxy card. If some of your shares are held in "street name," you should
have received voting instruction with these materials from your broker, bank or
other nominee. Please follow the voting instruction provided to ensure that your
vote is counted.
WHAT VOTE IS REQUIRED FOR THE ELECTION OF DIRECTORS OR FOR THE APPROVAL OF A
PROPOSAL?
For the approval of the following items to be approved:
* an increase in our authorized share capital to 200,000,000 shares of
common stock; and
* the 2010 Equity Incentive Stock Option Plan;
the proposals must receive more "For" votes than the combined votes of "Against"
votes and votes that are abstained. The approval of the 2010 Equity Incentive
Stock Option Plan is subject the stockholders approving the proposal to increase
the Company's authorized capital.
HOW ARE VOTES COUNTED?
For the following items to be approved:
* an increase in our authorized share capital to 200,000,000 shares of
common stock; and
* the 2010 Equity Incentive Stock Option Plan; and
you may vote "For", "Against", or "Abstain" for the proposals. Votes that are
abstained will have the same effect as "Against" votes. Broker non-votes will
have no effect on the outcome of the vote on these proposals. The approval of
the 2010 Equity Incentive Stock Option Plan is subject the stockholders
approving the proposal to increase the Company's authorized capital.
A "broker non-vote" occurs when a broker, bank, or other nominee holding shares
for a beneficial owner in street name does not vote on a particular proposal
because it does not have discretionary voting power with respect to that
proposal and has not received instructions with respect to that proposal from
the beneficial owner of those shares, despite voting on at least one other
proposal for which it does have discretionary authority or for which it has
received instructions.
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HOW DOES THE BOARD OF DIRECTORS RECOMMEND THAT I VOTE?
Our board of directors recommends that you vote your shares "For":
* an increase in our authorized share capital; and
* the 2010 Equity Incentive Stock Option Plan.
CAN I CHANGE MY VOTE AFTER SUBMITTING MY PROXY?
Yes. You may revoke your proxy and change your vote at any time before the final
vote at the meeting. If you are a stockholder of record, you may vote again on a
later date via the Internet or by telephone (only your latest Internet or
telephone proxy submitted prior to the meeting will be counted), by signing and
returning a new proxy card with a later date, or by attending the meeting and
voting in person. YOUR ATTENDANCE AT THE MEETING WILL NOT AUTOMATICALLY REVOKE
YOUR PROXY UNLESS YOU VOTE AGAIN AT THE MEETING OR SPECIFICALLY REQUEST IN
WRITING THAT YOUR PRIOR PROXY BE REVOKED. You may also request that your prior
proxy be revoked by delivering us at Western Standard Energy Corp., at the
address on the Notice of Meeting, Attention: President a written notice of
revocation prior to the meeting.
If you hold your shares in the street name, you will need to follow the voting
instruction provided by your broker, bank or other nominee regarding how to
revoke or change your vote.
HOW CAN I ATTEND THE MEETING?
You may call us at (561) 300-5130 if you want to obtain directions to be able to
attend the meeting and vote in person.
You may be asked to present valid picture identification, such as a driver's
license or passport, before being admitted to the meeting. If you hold your
shares in street name, you will also need proof of ownership to be admitted to
the meeting. A recent brokerage statement or letter from your broker, bank or
other nominee is an example of proof of ownership.
WHO PAYS FOR THE COST OF PROXY PREPARATION AND SOLICITATION?
We pay for the cost of proxy preparation and solicitation, including the
reasonable charges and expenses of brokers, banks or other nominees for
forwarding proxy materials to street name holders.
We are soliciting proxies primarily by mail. In addition, our directors,
officers and regular employees may solicit proxies by telephone, facsimile,
mail, other means of communication or personally. These individuals will receive
no additional compensation for such services. We will ask brokers, banks, and
other nominees to forward the proxy materials to their principals and to obtain
their authority to execute proxies and voting instructions. We will reimburse
them for their reasonable charges and expenses.
FORWARD-LOOKING STATEMENTS
This proxy statement contains forward-looking statements. These statements
relate to future events. In some cases, you can identify forward-looking
statements by terminology such as "may", "should", "expect", "plan",
"anticipate", "believe", "estimate", "predict", "potential" or "continue" or the
negative of these terms or other comparable terminology. These statements are
only predictions and involve known and unknown risks, uncertainties and other
factors that may cause our company's actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by these
forward-looking statements.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Except as required by applicable law,
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including the securities laws of the United States and Canada, we do not intend
to update any of the forward-looking statements to conform these statements to
actual results.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
We are authorized to issue 2,812,500 shares of common stock with a par value of
$0.001. As of February 16, 2010, the record date, a total of 193,434 shares of
common stock were issued and outstanding. Each share of common stock carries the
right to one vote at the meeting.
Only registered shareholders as of the record date are entitled to receive
notice of, and to attend and vote at, the meeting or any adjournment or
postponement of the meeting.
To the best of our knowledge, no person or company beneficially owns, directly
or indirectly, or exercises control or direction over, shares of common stock
carrying more than 10% of the voting rights attached to the outstanding Common
Shares of the Company other than set forth in the section "Security Ownership of
Certain Beneficial Owners and Management" below.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 16, 2010, certain information
known to us with respect to the beneficial ownership of our common stock by (i)
each of our directors and nominees, (ii) each of our named executive officers
(as defined in the "Executive Compensation" section) and current executive
officers, and (iii) all of our directors and current executive officers as a
group. Except as set forth in the table below, there is no person known to us
who beneficially owns more than 5% of our common stock.
Name and Address of Amount and nature of Percent of
Title of Class beneficial owner beneficial ownership class (1)(2)
- -------------- ---------------- -------------------- ------------
common stock Peter Donald Jenks Nil Nil
3-408 12th Avenue
Estevan, SK S4A 1E5
TOTAL DIRECTORS AND OFFICERS Nil Nil
5% STOCKHOLDERS
common stock Monaco Capital Inc. 100,000 Direct 51.70%
7 New Road, Second Floor, #6
Belize City, Belize
common stock Dan Bauer 27,512 Direct 14.22%
111 Second Avenue West
Williston ND 58801
common stock Joseph Bauer 11,625 Direct 6.00%
46 Arnheim Wharf
London England E14 3VQ
- ----------
1. Percentage of ownership is based on 193,434 shares of common stock issued
and outstanding as of February 16, 2010. Except as otherwise indicated, we
believe that the beneficial owners of the common stock listed above, based
on information furnished by such owners, have sole investment and voting
power with respect to such shares.
2. Under Rule 13d-3, 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 outstanding 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
February 16, 2010.
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CHANGES IN CONTROL
We are unaware of any contract or other arrangement the operation of which may
at a subsequent date result in a change in control of our company.
EXECUTIVE COMPENSATION
The particulars of compensation paid to the following persons:
(a) our principal executive officer;
(b) each of our two most highly compensated executive officers who were
serving as executive officers at the end of the years ended August 31, 2009 and
2008; and
(c) up to two additional individuals for whom disclosure would have been
provided under (b) but for the fact that the individual was not serving as our
executive officer at the end of the most recently completed financial year,
who we will collectively refer to as the named executive officers, for our
fiscal year ended August 31, 2009, are set out in the following summary
compensation table:
Non-Equity Nonqualified
Name and Incentive Deferred
Principal Stock Option Plan Compensation All Other
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Totals($)
-------- ---- --------- -------- --------- --------- --------------- ----------- --------------- ---------
Dan Bauer, 2009 $188,411 Nil Nil Nil Nil Nil $25,618 $214,029
President, 2008 $250,178 Nil Nil Nil Nil Nil $28,029 $278,075
CEO, CFO,
Treasurer &
Secretary (1)
Julian Lee 2009 $ 3,000 Nil Nil Nil Nil Nil Nil $ 3,000
former CFO (2) 2008 $ 36,000 Nil Nil Nil Nil Nil Nil $36,000
Peter Jenks, 2009 Nil Nil Nil Nil Nil Nil Nil Nil
President, 2008
CEO, CFO,
& Secretary (3)
- ----------
(1) Mr. Lee resigned as CFO on September 30, 2008.
(2) Mr. Bauer resigned as President, CEO, CFO, Treasurer and Secretary on
December 21, 2009
(3) Mr. Jenks was appointed President, CEO, CFO and Secretary on December 17,
2009
There are no arrangements or plans in which we provide pension, retirement or
similar benefits for directors or executive officers. Our directors and
executive officers may receive stock options at the discretion of our board of
directors in the future. We do not have any material bonus or profit sharing
plans pursuant to which cash or non-cash compensation is or may be paid to our
directors or executive officers, except that stock options may be granted at the
discretion of our board of directors from time to time. We have no plans or
arrangements in respect of remuneration received or that may be received by our
executive officers to compensate such officers in the event of termination of
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employment (as a result of resignation, retirement, change of control) or a
change of responsibilities following a change of control.
EMPLOYMENT AGREEMENTS
Other than as described below, we are not party to any employment agreements
with our directors and officers.
In the spring of 2008, we entered into agreements with three Advisory Board
members for a combined total of 500,000 common shares of the Company and 250,000
stock options per year in lieu of cash, renewable on an annual basis by mutual
consent. The granting of stock options depends upon the approval and
implementation of a stock option plan for the Company. Effective November 30,
2009, all three advisory board members resigned, waiving their right to have
shares and/or stock options. The resignations were not as a result of any
disagreements between our company or policies.
DIRECTOR COMPENSATION
Directors of our company may be paid for their expenses incurred in attending
each meeting of the directors. In addition to expenses, directors may be paid a
sum for attending each meeting of the directors or may receive a stated salary
as director. No payment precludes any director from serving our company in any
other capacity and being compensated for such service. During the year ended
August 31, 2009, we did not pay any compensation or grant any stock options to
our directors.
Fees Non-Equity Nonqualified
Earned Incentive Deferred
Paid in Stock Option Plan Compensation All Other
Name Cash($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Total($)
---- ------- --------- --------- --------------- ----------- --------------- --------
Dan Bauer (1) Nil Nil Nil Nil Nil Nil Nil
Julian Lee (2) Nil Nil Nil Nil Nil Nil Nil
Peter Jenks (3) Nil Nil Nil Nil Nil Nil Nil
- ----------
(1) Mr. Bauer resigned as a director on December 21, 2009.
(2) Mr. Lee resigned as a director on November 30, 2009.
(3) Mr. Jenks was appointed a director on December 17, 2009.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
We have no long-term incentive plans other than the stock option plans described
below.
STOCK OPTION PLANS
On February 1, 2010, our board of directors approved our 2010 Equity
Compensation Plan. Under the 2010 Plan, options may be granted to our directors,
officers, employees and consultants as determined by our board of directors.
Pursuant to the 2010 Plan, we reserved for issuance of 5,000,000 shares of our
outstanding common stock under the 2010 plan subject to receiving stockholder
approval to increase the Company's authorized capital.
As at the date of this Proxy, no stock, options, or other equity securities were
awarded to our executive officers except as listed below and there were no stock
options exercised.
8
Option Awards Stock Awards
----------------------------------------------------------------- -------------------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Awards: Payout
Equity Number of Value of
Incentive Number Unearned Unearned
Plan Awards; of Market Shares, Shares,
Number of Number of Number of Shares Value of Units or Units or
Securities Securities Securities or Units Shares or Other Other
Underlying Underlying Underlying of Stock Units of Rights Rights
Unexercised Unexercised Unexercised Option Option That Stock That That That
Options Options Unearned Exercise Expiration Have Not Have Not Have Not Have Not
Name Exercisable(#) Unexercisable(#) Options(#) Price($) Date Vested(#) Vested($) Vested(#) Vested(#)
- ---- -------------- ---------------- ---------- ----- ---- --------- --------- --------- ---------
Dan Bauer Nil Nil Nil Nil Nil Nil Nil Nil Nil
Julian Lee Nil Nil Nil Nil Nil Nil Nil Nil Nil
Peter Jenks Nil Nil Nil Nil Nil Nil Nil Nil Nil
OPTION EXERCISES AND STOCK VESTED TABLE
None of our directors, officers or employees have exercised their stock options.
OPTION EXERCISES AND STOCK VESTED
OPTION AWARDS STOCK AWARDS
---------------------------- ----------------------------
Number of Number of
Shares Value Shares Value
Acquired on Realized on Acquired on Realized on
Name Exercise(#) Exercise($) Vesting(#) Vesting($)
- ---- ----------- ----------- ---------- ----------
Dan Bauer Nil Nil Nil Nil
Julian Lee Nil Nil Nil Nil
Peter Jenks Nil Nil Nil Nil
RE-PRICING OF OPTIONS/SARS
None.
9
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth certain information concerning all equity
compensation plans previously approved by stockholders and all previous equity
compensation plans not previously approved by stockholders, as of the most
recently completed fiscal year.
EQUITY COMPENSATION PLAN INFORMATION
Number of Securities to be Number of Securities
Issued Upon Exercise of Weighted-Average Exercise Remaining Available for
Outstanding Options, Price of Outstanding Options, Future Issuance Under
Warrants and Rights Warrants and Rights Equity Compensation Plans
Plan Category (a) (b) (excluding column (a))
------------- ------------------- ------------------- -------------------------
Equity Compensation Plans NIL NIL NIL
Approved by Security
Holders
Equity Compensation Plans Not NIL NIL NIL
Approved by Security Holders
Total NIL NIL NIL
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
We did not purchase any of our shares of common stock or other securities during
our fiscal year ended August 31, 2009.
TRANSACTIONS WITH RELATED PERSONS
Except as disclosed below, since the beginning of the year ended August 31,
2009, there have been no transactions or proposed transactions in which the
amount involved exceeds the lesser of $120,000 or 1% of the average of our total
assets at year-end for the last two completed fiscal years in which any of our
directors, nominees for directors, executive officers or beneficial holders of
more than 5% of the outstanding shares of our common stock, or any of their
respective relatives, spouses, associates or affiliates, has had or will have
any direct or material indirect interest.
Effective December 17, 2009, we entered into the following assignment agreements
with Dan Bauer to assign our rights in our oil and gas leases for consideration
as follows:
1. 100% rights of a 3% interest in our Lodgepole Reef Prospects, North
Dakota for consideration of $22,690.
2. 100% rights of 8/8th interest in our Lodgepole Reef Prospects, Slope
County, North Dakota for consideration of $80,000.
3. 100% rights of a 4.5% interest in our Lodgepole Reef Prospects, North
Dakota for consideration of $13,500.
4. 100% rights of 8/8th interest in our Lodgepole Reef Prospects, Stark
County, North Dakota for consideration of $40,000.
10
PROPOSAL 1
APPROVAL OF INCREASE IN AUTHORIZED SHARE CAPITAL
Our board of directors is asking our stockholders to approve an increase in our
authorized share capital from 2,812,500 shares of common stock to 200,000,000
shares of common stock.
Our Board of Directors approved an amendment to the Articles of Incorporation of
the Company to increase our authorized Common Stock from 2,812,500 shares to
200,000,000 shares of common stock. The increase to the number of shares will
require an amendment to our Articles of Incorporation. Our Board of Directors
has directed that the increase to the shares of authorized Common Stock and the
corresponding amendment of our Articles of Incorporation be submitted for
approval by our stockholders.
Our Board of Directors has determined that it would be in the best interests of
the Company to amend its Articles of Incorporation to increase the number of
authorized shares of common stock from 2,812,500 shares to 200,000,000 shares of
common stock. Each additional share of common stock will have the same rights
and privileges as each share of currently authorized common stock. Our Board of
Directors believes that it is in the best interests of the Company to increase
the number of authorized shares in order to give us greater flexibility in
financing our business operations and to allow us to avoid holding further
stockholder meetings to increase our authorized capital to meet our financing
requirements. In January, 2010 we effected a one new for 1,000 old reverse stock
split of shares of common stock. As a result, our authorized capital decreased
from 2,812,500,000 shares of common stock to 2,812,500 shares of common stock.
The Board believes that finance and corporate opportunities exist which could
necessitate the issuance of a larger number of shares than is currently
authorized, and in order to preserve the flexibility to pursue all finance and
corporate opportunities, as well as to provide the Company with the ability to
grant options under our 2010 Plan, recommends an increase in the authorized
share capital. While we constantly evaluate the market for opportunities, there
are no current formal proposals or agreements written or otherwise, at this time
to issue any of the additional available authorized shares of our common stock
that would result from the increase in authorized capital.
The issuance of additional shares of common stock will have the effect of
diluting earnings per share, voting power and shareholdings of stockholders. It
could also have the effect of making it more difficult for a third party to
acquire control of the Company. The shares will be available for issuance by our
Board of Directors for proper corporate purposes, including but not limited to,
stock dividends, stock splits, acquisitions, financings and compensation plans.
Current stockholders do not have pre-emptive rights to subscribe for, purchase
or reserve any shares of our authorized capital stock. If the increase to our
authorized shares of common stock is approved by our stockholders, we will file
a Certificate of Amendment to our Articles of Incorporation with the Secretary
of the State of Nevada as soon as practicable after stockholder approval is
obtained.
MANAGEMENT BELIEVES THE INCREASE IN AUTHORIZED SHARE CAPITAL IS IN THE BEST
INTERESTS OF THE COMPANY AND RECOMMENDS THAT THE STOCKHOLDERS APPROVE THE
INCREASE IN AUTHORIZED CAPITAL. THE INCREASE IN AUTHORIZED CAPITAL WILL BE
APPROVED IF THE AFFIRMATIVE VOTE OF AT LEAST A MAJORITY OF THE COMMON STOCK
PRESENT OR REPRESENTED AT THE MEETING AND ENTITLED TO VOTE THEREAT ARE VOTED IN
FAVOUR OF APPROVING THE INCREASE IN AUTHORIZED CAPITAL. ACCORDINGLY, AT THE
MEETING, THE STOCKHOLDERS WILL BE ASKED TO PASS THE FOLLOWING RESOLUTION:
"RESOLVED THAT:
1. The increase in the authorized capital of the Company from 2,812,500
shares of common stock to 200,000,000 shares of common stock par value
$0.001 per share (the "AMENDMENT") be and is hereby approved.
2. The preparation and filing of a Certificate of Amendment to the
articles of incorporation of the Company be and is hereby approved.
3. Any one director or officer of the Company be and is hereby authorized
to do all things as may be necessary or advisable to effect the
foregoing resolutions on behalf of the Company and to take such steps
as may be necessary or advisable to give effect to the Amendment,
11
including preparing and filing the Certificate of Amendment with the
Nevada Secretary of State.
4. Notwithstanding the foregoing, the Board of Directors of the Company
shall have sole and complete discretion to determine whether or not to
carry out the increase in authorized capital and, notwithstanding
shareholder approval of the proposed increase in authorized capital,
there shall be no obligation to proceed with such increase in
authorized capital."
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE INCREASE
IN OUR AUTHORIZED SHARE CAPITAL.
12
PROPOSAL 2
APPROVAL OF 2010 STOCK OPTION PLAN
On February 1, 2010, our Board of Directors established the 2010 Equity
Compensation Plan expiring on February 1, 2019 (the "2010 Plan").
Our Board of Directors has determined that it would be in the best interests of
the Company to adopt and approve a new long-term stock incentive plan which will
facilitate the continued use of long-term equity-based incentives and rewards
for the foreseeable future. We expect equity-based incentives to comprise an
important part of the compensation packages needed to attract qualified
executives, key employees, directors and consultants to the Company and in
providing long-term incentives and rewards to those individuals responsible for
our success. Accordingly, our Board of Directors approved the 2010 Plan.
Stockholder approval of the 2010 Plan is expected to ensure that we will have a
sufficient number of long-term equity-based incentives and rewards to issue to
our future employees as well as to help ensure, to the extent possible, the tax
deductibility by the Company of awards under the 2010 Plan for purposes of
Section 162(m) of the Internal Revenue Code of 1986 (the "Code"). The Code,
among other things, provides certain tax advantages to persons granted stock
options under a qualifying "incentive stock option plan." In order to take
advantage of the favorable tax attributes associated with such options that may
be granted under the 2010 Plan, it is proposed that the shareholders approve the
2010 Plan.
The Company reserved for issuance of 5,000,000 shares of its outstanding common
stock under the 2010 plan subject to receiving stockholder approval to increase
the Company's authorized capital.
The material terms of the 2010 Plan are summarized below. The summary is
qualified in its entirety by reference to the specific provisions of the 2010
Plan, the full text of which is set forth as Schedule "A" to this Proxy
Statement.
PURPOSE
The purpose of the 2010 Plan is to enhance the long-term stockholder value of
the Company by offering opportunities to our directors, officers, employees and
eligible consultants ("Participants") to acquire and maintain stock ownership in
the Company in order to give these persons the opportunity to participate in our
growth and success, and to encourage them to remain in our service.
ADMINISTRATION AND ELIGIBILITY
The 2010 Plan is required to be administered by our Board of Directors or a
committee appointed by, and consisting of two or more members of our Board of
Directors (the "Plan Administrator"). The Plan Administrator has the exclusive
authority, in its discretion, to determine all matters relating to any option
granted ("Awards") under the 2010 Plan including: (i) the selection of
individuals to be granted Awards; (ii) the type of Awards; (iii) the number of
shares of Common Stock subject to an Award; (iv) all terms, conditions,
restrictions and limitations, if any, of an Award; and (v) the terms of any
instrument that evidences the Award.
The Plan Administrator also has exclusive authority to interpret the 2010 Plan
and the terms of any instrument evidencing the Award and may from time to time
adopt and change rules and regulations of general application for the 2010
Plan's administration. The Plan Administrator's interpretation of the 2010 Plan
and its rules and regulations is conclusive and binding on all parties involved
or affected.
13
STOCK SUBJECT TO THE 2010 PLAN
Options that are eligible for grant under the 2010 Plan to Participants include:
(a) incentive stock options, whereby we will grant options to purchase shares of
our common stock to Participants with the intention that the options qualify as
"incentive stock options" as that term is defined in Section 422 of the Internal
Revenue Code; (b) non-incentive stock options, whereby we will grant options to
purchase shares of our common stock to Participants that do not qualify as
"incentive stock options" under the Internal Revenue Code; (c) stock
appreciation rights; and (d) restricted shares. The 2010 Plan provides that a
maximum of 5,000,000 shares of common stock are available for granting of awards
under the 2010 Plan.
TERMS OF AWARDS
The Plan Administrator has the authority in its sole discretion to grant Awards
to participants as incentive stock options or as non-qualified stock options, as
appropriate. Unless an earlier termination date is set by the Plan
Administrator, Awards under the 2010 Plan will terminate at the earliest of the
following:
(a) Ten (10) years after the Award is granted;
(b) The date the stock option expires in accordance with its terms;
(c) Ninety (90) days after the Participant's employment terminates (or
ceases to provide services to the Company if the grantee is a non-employee
director or a consultant) (the "Employment Termination Date"), if the
Participant's Employment Termination Date occurs by reason of retirement,
resignation or for any other reasons other than for cause, disability or death;
(d) Twelve (12) months after the Employment Termination Date, if the
termination or cessation of services is a result of death or disability; and
(e) Five (5) years after the Incentive Stock Option is granted for holders
of 10% or more of the Company's common stock.
To the extent that the right to purchase shares under an Award has vested, in
order to exercise the Award the participant must execute and deliver to the
Company a written stock option exercise agreement or notice in a form and in
accordance with procedures established by the Plan Administrator. In addition,
the full exercise price of the Option Award must be delivered to the Company and
must be paid in a form acceptable to the Plan Administrator.
The exact terms of the option granted are contained in an option agreement
between us and the person to whom such option is granted. Eligible employees are
not required to pay anything to receive options. The exercise price for
incentive stock options must be no less than: 100% of the fair market value of
the common stock on the date of grant for Participants that hold less than 10%
of the Company's outstanding common stock; and 110% of the fair market value of
the common stock on the date of grant for Participants that hold 10% or more of
the Company's outstanding common stock. The exercise price for nonqualified
stock options is determined by the Plan Administrator in its sole and complete
discretion. An option holder may exercise options from time to time, subject to
vesting. Options will vest immediately upon death or disability of a participant
and upon certain change of control events.
Options will become exercisable by the participants in such amounts and at such
times as shall be determined by the Plan Administrator in each individual grant.
Options are not transferable except by will or by the laws of descent and
distribution. Options granted under the 2010 Plan will become exercisable in the
manner at the times and in the amounts determined by the Plan Administrator.
Participants may exercise options by delivery to the Company of a written stock
option exercise agreement or notice, in a form and in accordance with procedures
established by the Plan Administrator, setting forth the number of shares
purchased under such exercise agreement, accompanied by payment in full in the
form of a check or bank draft or other method of payment or some combination
thereof as may be acceptable to the Plan Administrator. All incentive stock
options granted under the 2010 Plan must comply with Section 422 of the Code.
14
ADJUSTMENTS
In the event a stock dividend, stock split, spin-off, combination or exchange of
shares, recapitalization, merger, consolidation, distribution to stockholders
other than a normal cash dividend, or other change in our corporate or capital
structure, including without limitation, a related party transaction, results
in: (a) the outstanding shares of Common Stock, or any securities exchanged
therefore or received in their place, being exchanged for a different number or
kind of securities of the Company or of any other corporation, or (b) new,
different or additional securities of the Company or of any other corporation
being received by the holders of shares of our Common Stock, then the Plan
Administrator generally has the authority to adjust (i) the maximum number and
kind of securities subject to the 2010 Plan and issuable as incentive stock
options and the maximum number and kind of securities that may be made subject
to Awards to any individual and (ii) the number and kind of securities that are
subject to any outstanding Award and the per share price of such securities,
without any change in the aggregate price to be paid therefore. Any adjustment
will be made in compliance with Section 409A of the Code.
LIMITS ON ASSIGNMENT
Neither an Award nor any interest therein may be assigned, pledged or
transferred by the participant or made subject to attachment or similar
proceedings other than by will or by the applicable laws of descent and
distribution, and during the participant's lifetime, such Awards may be
exercised only by the participant. However, to the extent permitted by Section
422 of the Code, the Plan Administrator, in its sole discretion, may permit a
participant to assign or transfer an Award or may permit a participant to
designate a beneficiary who may exercise the Award or receive payment under the
Award after the participant's death.
SETTLEMENT OF AWARDS
We may settle Awards through the delivery of shares of our Common Stock, the
granting of replacement Awards or any combination thereof as determined by the
Plan Administrator. Any Award settlement, including payment deferrals, may be
subject to such conditions, restrictions and contingencies as determined by the
Plan Administrator. The Plan Administrator may permit or require the deferral of
any Award payment, subject to such rules and procedures as it may establish,
which may include provisions for the payment or crediting of interest, or
dividend equivalents, including converting such credits into deferred stock
equivalents.
AMENDMENT OR TERMINATION OF PLAN
Our Board of Directors may suspend, amend or terminate the 2010 Plan or any
portion of the 2010 Plan at any time and in such respects as it shall deem
advisable, provided that, to the extent required for compliance with Section 422
of the Code or any applicable law or regulation, stockholder approval will be
required for any amendment that would: (a) modify the class of employees
eligible to receive options, or (b) otherwise require stockholder approval under
any applicable law or regulation. Any amendment made to the 2010 Plan that would
constitute a "modification" to incentive stock options outstanding on the date
of such amendment shall not, without the consent of the participant, be
applicable to such outstanding incentive stock options but shall have
prospective effect only.
WITHHOLDING
The Plan Administrator may permit or require a participant to satisfy all or
part of his or her tax withholding obligations by: (a) paying cash to the
Company, (b) having the Company withhold from any cash amounts otherwise due or
to become due from the Company to the participant, (c) having the Company
withhold a portion of any shares of Common Stock that would otherwise be issued
to the participant having a value equal to the tax withholding obligations (up
to the employer's minimum required tax withholding rate), or (d) surrendering
any shares of Common Stock that the participant previously acquired having a
value equal to the tax withholding obligations (up to the employer's minimum
required tax withholding rate to the extent the participant has held the
surrendered shares for less than six months.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
NON-QUALIFIED STOCK OPTIONS. The grant of Non-Qualified Stock Options generally
will not be a taxable event to a participant under United States federal income
tax laws so long as the option does not have a readily ascertainable fair market
value. Options granted pursuant to the 2010 Plan should not have a readily
ascertainable fair market value because they are not actively traded on an
15
established securities market, are not transferable and will have more than a
nominal exercise price. Accordingly, the participant will not likely be subject
to any income tax consequences with respect to the granting of a Non-Qualified
Stock Option unless and until the option is exercised. Upon the exercise of a
Non-Qualified Stock Option, the participant will generally have to recognize
ordinary compensation income equal to the difference between the exercise price
and the fair market value of the Company's Common Stock on the date of exercise.
However, if the shares to be received upon exercise of the Non-Qualified Stock
Option are subject to restrictions, the participant may not have to recognize
income upon exercise, and may be able to defer recognition until the shares have
vested.
INCENTIVE STOCK OPTIONS. As with Non-Qualified Stock Options, generally there
will not be any tax consequences to a participant upon the grant of an Incentive
Stock Option. However, unlike Non-Qualified Stock Options, participants will
generally not be required to recognize income upon the exercise of an Incentive
Stock Option. If the participant holds the shares received upon exercise of an
Incentive Stock Option for a minimum of two years from the date the Award was
granted and for a minimum of one year after exercise, then any gain recognized
by the participant upon disposition of the shares will generally be treated as a
capital gain. If the participant holds the shares for less than this period,
then a portion of the gain, equal to the difference between the fair market
value of the shares on the date the option was exercised and the exercise price
of the shares, will be treated as ordinary income. The remaining portion of the
gain will be treated as a capital gain. Any loss recognized upon disposition
will generally be characterized as a capital loss.
WITHHOLDING OBLIGATIONS. If a participant is an employee, United States federal
and state withholding obligations for income and employment tax purposes may
arise at the time that Non-Qualified Stock Options are exercised. Relevant
withholding taxes may include federal income tax, social security, medicare,
state income tax (if applicable), state disability or unemployment (if
applicable), and local taxes (if applicable).
EFFECTIVE DATE OF PLAN
The effective date is February 1, 2010. If our stockholders do not approve the
2010 Plan within 12 months after February 1, 2010, any incentive stock options
granted under the 2010 Plan will be treated as Non-Qualified Stock Options.
BENEFITS AND OPTIONS TO BE ISSUED UNDER PLAN
As of February 16, 2010, no benefits or options have been issued under the 2010
Plan.
REQUIRED VOTE
Stockholders will be asked to consider, and the Board, believing it to be in the
best interests of our company, recommend that the stockholders approve the 2010
Plan and the allotment and reservation of sufficient shares of common stock from
treasury for issuance upon the exercise from time to time of options granted
pursuant to the Plan. The 2010 Plan will be approved if the affirmative vote of
at least a majority of the common stock present or represented at the Meeting
and entitled to vote thereat are voted in favour of approving the 2010 Plan. The
approval of the 2010 Equity Incentive Stock Option Plan is subject the
stockholders approving the proposal to increase the Company's authorized
capital. The stockholders will be asked to pass the following resolution to
approve the 2010 Equity Compensation Plan:
"RESOLVED THAT:
1. The 2010 Equity Compensation Plan be and is hereby approved.
2. The Board of Directors be authorized to grant options under and
subject to the terms and conditions of the Plan, which may be
exercised to purchase up to 5,000,000 shares of common stock of the
Company.
3. The outstanding stock options which have been granted prior to the
implementation of the Plan shall, for the purpose of calculating the
16
number of stock options that may be granted under the Plan, be treated
as options granted under the Plan.
4. The directors and officers of the Company be authorized and directed
to perform such acts and deeds and things and execute all such
documents, agreements and other writings as may be required to give
effect to the true intent of these resolutions."
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE 2010
EQUITY COMPENSATION PLAN.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No director, executive officer, or nominee for election as a director of our
company and no associate of any of the foregoing persons has any substantial
interest, direct or indirect, by security holding or otherwise, in any matter to
be acted upon at the meeting.
"HOUSEHOLDING" OF PROXY MATERIALS
The Securities and Exchange Commission permits companies and intermediaries such
as brokers to satisfy the delivery requirements for proxy statements and reports
with respect to two or more stockholders sharing the same address by delivering
a single proxy statement or report, as applicable, addressed to those
stockholders. This process, which is commonly referred to as "householding",
potentially provides extra conveniences for stockholders and cost savings for
companies.
Although we do not intend to household for our stockholders of record, some
brokers household our proxy materials and reports, delivering a single copy of
proxy statement or report to multiple stockholders sharing an address unless
contrary instructions have been received from the affected stockholders. Once
you have received notice from your broker that it will be householding materials
to your address, householding will continue until you are notified otherwise or
until you revoke your consent. If, at any time, you no longer wish to
participate in householding and would prefer to receive a separate copy of proxy
statement or report, or if you are receiving multiple copies of either document
and wish to receive only one, please notify your broker. Stockholders who
currently receive multiple copies of the proxy statement at their address from
their brokers and would like to request "householding" of their communications
should contact their brokers.
STOCKHOLDER PROPOSALS
Any proposal intended to be presented for action at the meeting pursuant to Rule
14a-8 under the Exchange Act must be received by our President within a
reasonable time before the solicitation of proxies for such meeting. Such
proposals should be submitted by certified mail, return receipt requested.
Nothing in this paragraph shall be deemed to require us to include any
stockholder proposal that does not meet all the requirements for such inclusion
established by the SEC in effect at that time and there is no guarantee that any
proposal submitted by a stockholder will be included in the proxy statement.
All stockholder proposals, notices and requests should be made in writing and
sent via registered, certified or express mail, to Western Standard Energy
Corp., at the address on the first page of this Proxy Statement to the attention
of the President. With respect to business to be brought before our meeting of
stockholders to be held on March 26, 2010, we have received no notices from our
stockholders that we were required to be included in this proxy statement.
WHERE YOU CAN FIND MORE INFORMATION
We file our reports, proxy statements and other information with the United
States Securities and Exchange Commission. The documents filed with the
Securities and Exchange Commission are available to the public from the United
17
States Securities and Exchange Commission's website at www.sec.gov. Additional
information regarding the Company and its business activities is available at
the Company's website located at http://www.western-standard.com. A copy of our
Report on Form 10-K for the fiscal year ended August 31, 2009 which has been
filed with the SEC, including the financial statements, but without exhibits,
will be provided without charge to any stockholder or beneficial owner of Common
Stock upon written request to Western Standard Energy Corp., at the address on
the first page of this Proxy Statement to the attention of the President.
OTHER MATTERS
Our board of directors does not intend to bring any other business before the
meeting, and so far as is known to our board of directors, no matters are to be
brought before the meeting except as specified in the notice of the meeting. If
any other matters are properly brought before the meeting, it is the intention
of the persons named on the proxy to vote the shares represented by the proxy on
such matters in accordance with their judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Peter Donald Jenks
- ----------------------------------
Peter Donald Jenks
Chairman of the Board
March 2, 2010
18
SCHEDULE A
2010 EQUITY COMPENSATION PLAN
I. ESTABLISHMENT OF PLAN; DEFINITIONS
1. Purpose. The purpose of the Corporation's 2010 Equity Compensation Plan is to
encourage certain, officers, employees, directors and consultants of the
Corporation to acquire and hold stock in the Corporation as an added incentive
to remain with the Corporation and to increase their efforts in promoting the
interests of the Corporation and to enable the Corporation to attract and retain
capable individuals.
2. Definitions. Unless the context clearly indicates otherwise, the following
terms shall have the meanings set forth below:
(a) "Award" shall mean the grant of any Stock Option, Stock Appreciation
Right or Stock Award pursuant to the Plan.
(b) "Board" shall mean the Board of Directors of the Corporation.
(c) "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
(d) "Committee" shall mean a committee made up of at least two members of
the Board whose members shall, from time to time, be appointed by the Board. If
a Committee has not been appointed by the Board, "Committee" shall mean the
Board.
(e) "Corporation" shall mean WESTERN STANDARD ENERGY CORP., a Nevada
corporation.
(f) "Consultants" shall mean individuals or entities who provide services
to the Corporation who are not Employees or Directors.
(g) "Directors" shall mean those members of the Board of Directors of the
Corporation who are not Employees.
(h) "Disability" shall mean a medically determinable physical or mental
condition which causes an Employee, Director or Consultant to be unable to
engage in any substantial gainful activity and which can be expected to result
in death or to be of long-continued and indefinite duration.
(i) "Employee" shall mean any common law employee, including officers, of
the Corporation as determined under the Code and the Treasury Regulations
thereunder.
(j) "Fair Market Value" with regards to the grant of Stock Options shall
mean (i) if the Stock is listed on a national securities exchange, the mean
between the highest and lowest sales prices for the Stock on such date, or, if
no such prices are reported for such day, then on the next preceding day on
which there were reported prices; (ii) if the Stock is not listed on a national
securities exchange, the closing price for the shares on such date, or if no
such prices are reported for such day, then on the next preceding day on which
there were reported prices; or (iii) as determined in good faith by the Board.
"Fair Market Value" with regards to Stock Awards shall be determined by the
Board, in good faith and in its sole discretion.
(k) "Grantee" shall mean an officer, Employee, Director or Consultant
granted a Stock Option or Stock Award under this Plan.
(l) "Incentive Stock Option" shall mean an option granted pursuant to the
Incentive Stock Option provisions as set forth in Part II of this Plan.
(m) "Non-Qualified Stock Option" shall mean an option granted pursuant to
the Non-Qualified Stock Option provisions as set forth in Part III of this Plan.
(n) "Plan" shall mean the 2010 Equity Compensation Plan as set forth herein
and as amended from time to time.
(o) "Restricted Stock" shall mean Stock which is issued pursuant to the
Restricted Stock as set forth in Part IV of this Plan.
(p) "Stock" shall mean authorized but unissued shares of the Common Stock
of the Corporation or reacquired shares of the Corporation's Common Stock.
(q) "Stock Appreciation Right" shall mean a stock appreciation right
granted pursuant to the Stock Appreciation Right provisions as set forth in Part
II and III of this Plan.
(r) "Stock Award" shall mean an award of Restricted granted pursuant to
this Plan.
(s) "Stock Option" shall mean an option granted pursuant to the Plan to
purchase shares of Stock.
(t) "Subsidiary" shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with and including the Corporation,
if each of the corporations other than the last corporation in the unbroken
chain owns stock possessing 50 percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
(u) "Ten Percent Shareholder" shall mean an Employee who at the time a
Stock Option is granted owns stock possessing more than ten percent (10%) of the
total combined voting power of all stock of the Corporation or of its parent or
subsidiary corporation.
3. Shares of Stock Subject to the Plan. Subject to the provisions of Paragraph 2
of Part V of the Plan, the Stock which may be issued or transferred pursuant to
Stock Options and Stock Awards granted under the Plan and the Stock which is
subject to outstanding but unexercised Stock Options under the Plan shall not
exceed 5,000,000 SHARES in the aggregate. If a Stock Option shall expire and
terminate for any reason, in whole or in part, without being exercised or, if
Stock Awards are forfeited because the restrictions with respect to such Stock
Awards shall not have been met or have lapsed, the number of shares of Stock
which are no longer outstanding as Stock Awards or subject to Stock Options may
again become available for the grant of Stock Awards or Stock Options. There
shall be no terms and conditions in a Stock Award or Stock Option which provide
that the exercise of an Incentive Stock Option reduces the number of shares of
Stock for which an outstanding Non-Qualified Stock Option may be exercised; and
there shall be no terms and conditions in a Stock Award or Stock Option which
provide that the exercise of a Non-Qualified Stock Option reduces the number of
shares of Stock for which an outstanding Incentive Stock Option may be
exercised.
4. Administration of the Plan. The Plan shall be administered by the Committee.
Subject to the express provisions of the Plan, the Committee shall have
authority to interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to it, to determine the terms and provisions of Stock
Option agreements, and to make all other determinations necessary or advisable
for the administration of the Plan. Any controversy or claim arising out of or
related to this Plan shall be determined unilaterally by and at the sole
discretion of the Committee.
5. Amendment or Termination. The Board may, at any time, alter, amend, suspend,
discontinue, or terminate this Plan; provided, however, that such action shall
not adversely affect the right of Grantees to Stock Awards or Stock Options
previously granted and no amendment, without the approval of the stockholders of
the Corporation, shall increase the maximum number of shares which may be
awarded under the Plan in the aggregate, materially increase the benefits
accruing to Grantees under the Plan, change the class of Employees eligible to
receive options under the Plan, or materially modify the eligibility
requirements for participation in the Plan.
6. Effective Date and Duration of the Plan. The effective date of the Plan is
the date on which the Plan is adopted by the Board. If the stockholders of the
Corporation do not approve the Plan within 12 months after the Board's adoption
of the Plan, any Incentive Stock Options granted under the Plan will be treated
as Non-Qualified Stock Options. Unless sooner terminated as provided herein, the
Plan shall terminate ten years after the earlier of the Plan's adoption by the
Board and approval by the Company's stockholders.
7. General.
(a) Each Stock Option, Stock Award and Stock Appreciation Right shall be
evidenced by a written instrument (which may be in the form of a unanimous
written consent of the Board) containing such terms and conditions, not
inconsistent with this Plan, as the Committee shall approve.
(b) The granting of a Stock Option, Stock Award or Stock Appreciation Right
in any year shall not give the Grantee any right to similar grants in future
years or any right to be retained in the employ of the Corporation, and all
Employees shall remain subject to discharge to the same extent as if the Plan
were not in effect.
2
(c) No officer, Employee, Director or Consultant and no beneficiary or
other person claiming under or through him, shall have any right, title or
interest by reason of any Stock Option or any Stock Award to any particular
assets of the Corporation, or any shares of Stock allocated or reserved for the
purposes of the Plan or subject to any Stock Option or any Stock Award except as
set forth herein. The Corporation shall not be required to establish any fund or
make any other segregation of assets to assure the payment of any Stock Option
or Stock Award.
(d) No right under the Plan shall be subject to anticipation, sale,
assignment, pledge, encumbrance, or charge except by will or the laws of descent
and distribution, and a Stock Option shall be exercisable during the Grantee's
lifetime only by the Grantee or his conservator.
(e) Notwithstanding any other provision of this Plan or agreements made
pursuant thereto, the Corporation's obligation to issue or deliver any
certificate or certificates for shares of Stock under a Stock Option or Stock
Award, and the transferability of Stock acquired by exercise of a Stock Option
or grant of a Stock Award, shall be subject to all of the following conditions:
(i) Any registration or other qualification of such shares under any
state or federal law or regulation, or the maintaining in effect
of any such registration or other qualification which the Board
shall, in its absolute discretion upon the advice of counsel,
deem necessary or advisable; and
(ii) The obtaining of any other consent, approval, or permit from any
state or federal governmental agency which the Board shall, in
its absolute discretion upon the advice of counsel, determine to
be necessary or advisable.
(f) All payments to Grantees or to their legal representatives shall be
subject to any applicable tax, community property, or other statutes or
regulations of the United States or of any state or country having jurisdiction
thereof. The Grantee may be required to pay to the Corporation the amount of any
withholding taxes which the Corporation is required to withhold with respect to
a Stock Option or its exercise or a Stock Award. In the event that such payment
is not made when due, the Corporation shall have the right to deduct, to the
extent permitted by law, from any payment of any kind otherwise due to such
person all or part of the amount required to be withheld.
(g) In the case of a grant of a Stock Option or Stock Award to any Employee
of a subsidiary of the Corporation, the Corporation may, if the Committee so
directs, issue or transfer the shares, if any, covered by the Stock Option or
Stock Award to the subsidiary, for such lawful consideration as the Committee
may specify, upon the condition or understanding that the subsidiary will
transfer the shares to the Employee in accordance with the terms of the Stock
Option or Stock Award specified by the Committee pursuant to the provisions of
the Plan. For purposes of this Section, a subsidiary shall mean any subsidiary
corporation of the Corporation as defined in Section 424 of the Code.
(h) A Grantee entitled to Stock as a result of the exercise of a Stock
Option or grant of a Stock Award shall not be deemed for any purpose to be, or
have rights as, a shareholder of the Corporation by virtue of such exercise,
except to the extent a stock certificate is issued therefor and then only from
the date such certificate is issued. No adjustments shall be made for dividends
or distributions or other rights for which the record date is prior to the date
such stock certificate is issued. The Corporation shall issue any stock
certificates required to be issued in connection with the exercise of a Stock
Option with reasonable promptness after such exercise.
(i) The grant or exercise of Stock Options granted under the Plan or the
grant of a Stock Award under the Plan shall be subject to, and shall in all
respects comply with, applicable law relating to such grant or exercise, or to
the number of shares of Stock which may be beneficially owned or held by any
Grantee.
(j) The Corporation intends that the Plan shall comply with the
requirements of Rule 16b-3 (the "Rule") under the Securities Exchange Act of
1934, as amended, during the term of this Plan. Should any additional provisions
be necessary for the Plan to comply with the requirements of the Rule, the Board
may amend this Plan to add to or modify the provisions of this Plan accordingly.
(k) The Corporation intends that the Plan shall comply with the
requirements of Section 409A of the Code, to the extent applicable. Should any
changes to the Plan be necessary for the Plan to comply with the requirements of
Code Section 409A the Board may amend this Plan to add to or modify the
provisions of this Plan accordingly.
(l) The Corporation will seek stockholder approval in the manner and to the
degree required under Applicable Laws. If the Corporation fails to obtain
stockholder approval of the Plan within twelve (12) months after the date this
Plan is adopted by the Board, pursuant to Section 422 of the Code, any Option
granted as an Incentive Option at any time under the Plan will not qualify as an
3
Incentive Option within the meaning of the Code and will be deemed to be a
Non-Qualified Option.
II. INCENTIVE STOCK OPTION PROVISIONS
1. Granting of Incentive Stock Options.
(a) Only Employees of the Corporation shall be eligible to receive
Incentive Stock Options under the Plan. Officers, Directors and Consultants of
the Corporation who are not also Employees shall not be eligible to receive
Incentive Stock Options.
(b) The purchase price of each share of Stock subject to an Incentive Stock
Option shall not be less than 100% of the Fair Market Value of a share of the
Stock on the date the Incentive Stock Option is granted; provided, however, that
the purchase price of each share of Stock subject to an Incentive Stock Option
granted to a Ten Percent Shareholder shall not be less than 110% of the Fair
Market Value of a share of the Stock on the date the Incentive Stock Option is
granted.
(c) No Incentive Stock Option shall be exercisable more than ten years from
the date the Incentive Stock Option was granted; provided, however, that an
Incentive Stock Option granted to a Ten Percent Shareholder shall not be
exercisable more than five years from the date the Incentive Stock Option was
granted.
(d) The Committee shall determine and designate from time to time those
Employees who are to be granted Incentive Stock Options and specify the number
of shares subject to each Incentive Stock Option.
(e) The Committee, in its sole discretion, shall determine whether any
particular Incentive Stock Option shall become exercisable in one or more
installments, specify the installment dates, and, within the limitations herein
provided, determine the total period during which the Incentive Stock Option is
exercisable. Further, the Committee may make such other provisions as may appear
generally acceptable or desirable to the Committee or necessary to qualify its
grants under the provisions of Section 422 of the Code.
(f) The Committee may grant at any time new Incentive Stock Options to an
Employee who has previously received Incentive Stock Options or other options
whether such prior Incentive Stock Options or other options are still
outstanding, have previously been exercised in whole or in part, or are
cancelled in connection with the issuance of new Incentive Stock Options. The
purchase price of the new Incentive Stock Options may be established by the
Committee without regard to the existing Incentive Stock Options or other
options.
(g) Notwithstanding any other provisions hereof, the aggregate Fair Market
Value (determined at the time the option is granted) of the Stock with respect
to which Incentive Stock Options are exercisable for the first time by the
Employee during any calendar year (under all such plans of the Grantee's
employer corporation and its parent and subsidiary corporation) shall not exceed
$100,000.
2. Exercise of Incentive Stock Options. The option price of an Incentive Stock
Option shall be payable on exercise of the option (i) in cash or by check, bank
draft or postal or express money order, (ii) by the surrender of Stock then
owned by the Grantee, (iii) the proceeds of a loan from an independent
broker-dealer whereby the loan is secured by the option or the stock to be
received upon exercise, or (iv) any combination of the foregoing; PROVIDED, that
each such method and time for payment and each such borrowing and terms and
conditions of repayment shall then be permitted by and be in compliance with
applicable law. Shares of Stock so surrendered in accordance with clause (ii) or
(iv) shall be valued at the Fair Market Value thereof on the date of exercise,
surrender of such Stock to be evidenced by delivery of the certificate(s)
representing such shares in such manner, and endorsed in such form, or
accompanied by stock powers endorsed in such form, as the Committee may
determine.
3. Termination of Employment.
(a) If a Grantee's employment with the Corporation is terminated other than
by Disability or death, the terms of any then outstanding Incentive Stock Option
held by the Grantee shall extend for a period ending on the earlier of the date
on which such Stock Option would otherwise expire or three months after such
termination of employment, and such Stock Option shall be exercisable to the
extent it was exercisable as of such last date of employment.
(b) If a Grantee's employment with the Corporation is terminated by reason
of Disability, the term of any then outstanding Incentive Stock Option held by
the Grantee shall extend for a period ending on the earlier of the date on which
4
such Stock Option would otherwise expire or twelve months after such termination
of employment, and such Stock Option shall be exercisable to the extent it was
exercisable as of such last date of employment.
(c) If a Grantee's employment with the Corporation is terminated by reason
of death, the representative of his estate or beneficiaries thereof to whom the
Stock Option has been transferred shall have the right during the period ending
on the earlier of the date on which such Stock Option would otherwise expire or
twelve months after such date of death, to exercise any then outstanding
Incentive Stock Options in whole or in part. If a Grantee dies without having
fully exercised any then outstanding Incentive Stock Options, the representative
of his estate or beneficiaries thereof to whom the Stock Option has been
transferred shall have the right to exercise such Stock Options in whole or in
part.
4. Stock Appreciation Rights
(a) Grant. Stock Appreciation Rights related to all or any portion of an
Incentive Stock Option may be granted by the Committee to any Grantee in
connection with the grant of an Incentive Stock Option or unexercised portion
thereof held by the Grantee at any time and from time to time during the term
thereof. Each Stock Appreciation Right shall be granted at least at Fair Market
Value on the date of grant and be subject to such terms and conditions not
inconsistent with the provisions of this Part II as shall be determined by the
Committee and included in the agreement relating to such Stock Appreciation
Right, subject in any event, however, to the following terms and conditions of
this Section 4. Each Stock Appreciation Right may include limitations as to the
time when such Stock Appreciation Right becomes exercisable and when it ceases
to be exercisable that are more restrictive than the limitations on the exercise
of the Incentive Stock Option to which it relates.
(b) Exercise. No Stock Appreciation Right shall be exercisable with respect
to such related Incentive Stock Option or portion thereof unless such Incentive
Stock Option or portion shall itself be exercisable at that time. A Stock
Appreciation Right shall be exercised only upon surrender of the related
Incentive Stock Option or portion thereof in respect of which the Stock
Appreciation Right is then being exercised.
(c) Amount of Payment. On exercise of a Stock Appreciation Right, a Grantee
shall be entitled to receive an amount equal to the product of (i) the amount by
which the Fair Market Value of a share of Stock on the date of exercise of the
Stock Appreciation Right exceeds the option price per share specified in the
related Incentive Stock Option and (ii) the number of shares of Stock in respect
of which the Stock Appreciation Right shall have been exercised.
(d) Form of Payment. Stock Appreciation Rights may be settled in Stock,
cash or a combination thereof. The number of shares of Stock to be distributed
shall be the largest whole number obtained by dividing the amount otherwise
distributable in respect of such settlement by the Fair Market Value of a share
of Stock on the date of exercise of the Stock Appreciation Right. The value of
fractional shares of Stock shall be paid in cash.
(e) Effect of Exercise of Right or Related Option. If the related Incentive
Stock Option is exercised in whole or in part, then the Stock Appreciation Right
with respect to the Stock purchased pursuant to such exercise (but not with
respect to any unpurchased Stock) shall be terminated as of the date of exercise
if such Stock Appreciation Right is not exercised on such date.
(f) Non-transferability. A Stock Appreciation Right shall not be
transferable or assignable by the Grantee other than by will or the laws of
descent and distribution, and shall be exercisable during the Grantee's lifetime
only by the Grantee.
(g) Termination of Employment. If the Grantee ceases to be an Employee of
the Corporation for any reason, each outstanding Stock Appreciation Right shall
be exercisable for such period and to such extent as the related Incentive Stock
Option or portion thereof.
III. NON-QUALIFIED STOCK OPTION PROVISIONS
1. Granting of Stock Options.
(a) Officers, Employees, Directors and Consultants shall be eligible to
receive Non-Qualified Stock Options under the Plan.
(b) The Committee shall determine and designate from time to time those
officers, Employees, Directors and Consultants who are to be granted
Non-Qualified Stock Options and the amount subject to each Non-Qualified Stock
Option.
5
(c) The Committee may grant at any time new Non-Qualified Stock Options to
an Employee, Director or Consultant who has previously received Non-Qualified
Stock Options or other Stock Options, whether such prior Non-Qualified Stock
Options or other Stock Options are still outstanding, have previously been
exercised in whole or in part, or are cancelled in connection with the issuance
of new Non-Qualified Stock Options.
(d) The Committee shall determine the purchase price of each share of Stock
subject to a Non-Qualified Stock Option. Such price shall not be less than 100%
of the Fair Market Value of such Stock on the date the Non-Qualified Stock
Option is granted.
(e) The Committee, in its sole discretion, shall determine whether any
particular Non-Qualified Stock Option shall become exercisable in one or more
installments, specify the instalment dates, and, within the limitations herein
provided, determine the total period during which the Non-Qualified Stock Option
is exercisable. Further, the Committee may make such other provisions as may
appear generally acceptable or desirable to the Committee, including the
extension of a Non-Qualified Stock Option, provided that such extension does not
extend the option beyond the period specified in paragraph (f) below.
(f) No Non-Qualified Stock Option shall be exercisable more than ten years
from the date such option is granted.
2. Exercise of Stock Options. The option price of a Non-Qualified Stock Option
shall be payable on exercise of the Stock Option (i) in cash or by check, bank
draft or postal or express money order, (ii) by the surrender of Stock then
owned by the Grantee, (iii) the proceeds of a loan from an independent
broker-dealer whereby the loan is secured by the option or the stock to be
received upon exercise, or (iv) any combination of the foregoing; PROVIDED, that
each such method and time for payment and each such borrowing and terms and
conditions of repayment shall then be permitted by and be in compliance with
applicable law. Shares of Stock so surrendered in accordance with clause (ii) or
(iv) shall be valued at the Fair Market Value thereof on the date of exercise,
surrender of such Stock to be evidenced by delivery of the certificate(s)
representing such shares in such manner, and endorsed in such form, or
accompanied by stock powers endorsed in such form, as the Committee may
determine.
3. Termination of Relationship.
(a) If a Grantee's employment with the Corporation is terminated, a
Director Grantee ceases to be a Director, or a Consultant Grantee ceases to be a
Consultant, other than by reason of Disability or death, the terms of any then
outstanding Non-Qualified Stock Option held by the Grantee shall extend for a
period ending on the earlier of the date established by the Committee at the
time of grant or three months after the Grantee's last date of employment or
cessation of being a Director or Consultant, and such Stock Option shall be
exercisable to the extent it was exercisable as of the date of termination of
employment or cessation of being a Director or Consultant.
(b) If a Grantee's employment is terminated by reason of Disability, a
Director Grantee ceases to be a Director by reason of Disability or a Consultant
Grantee ceases to be a Consultant by reason of Disability, the term of any then
outstanding Non-Qualified Stock Option held by the Grantee shall extend for a
period ending on the earlier of the date on which such Stock Option would
otherwise expire or twelve months after the Grantee's last date of employment or
cessation of being a Director or Consultant, and such Stock Option shall be
exercisable to the extent it was exercisable as of such last date of employment
or cessation of being a Director or Consultant.
(c) If a Grantee's employment is terminated by reason of death, a Director
Grantee ceases to be a Director by reason of death or a Consultant Grantee
ceases to be a Consultant by reason of death, the representative of his estate
or beneficiaries thereof to whom the Stock Option has been transferred shall
have the right during the period ending on the earlier of the date on which such
Stock Option would otherwise expire or twelve months following his death to
exercise any then outstanding Non-Qualified Stock Options in whole or in part.
If a Grantee dies without having fully exercised any then outstanding
Non-Qualified Stock Options, the representative of his estate or beneficiaries
thereof to whom the Stock Option has been transferred shall have the right to
exercise such Stock Options in whole or in part.
4. Stock Appreciation Rights
(a) Grant. Stock Appreciation Rights related to all or any portion of a
Non-Qualified Stock Option may be granted by the Committee to any Grantee in
connection with the grant of a Non-Qualified Stock Option or unexercised portion
thereof held by the Grantee at any time and from time to time during the term
thereof. Each Stock Appreciation Right shall be granted at least at Fair Market
Value on the date of grant and be subject to such terms and conditions not
inconsistent with the provisions of this Part III as shall be determined by the
Committee and included in the agreement relating to such Stock Appreciation
Right, subject in any event, however, to the following terms and conditions of
6
this Section 4. Each Stock Appreciation Right may include limitations as to the
time when such Stock Appreciation Right becomes exercisable and when it ceases
to be exercisable that are more restrictive than the limitations on the exercise
of the Non-Qualified Stock Option to which it relates.
(b) Exercise. No Stock Appreciation Right shall be exercisable with respect
to such related Non-Qualified Stock Option or portion thereof unless such
Non-Qualified Stock Option or portion shall itself be exercisable at that time.
A Stock Appreciation Right shall be exercised only upon surrender of the related
Non-Qualified Stock Option or portion thereof in respect of which the Stock
Appreciation Right is then being exercised.
(c) Amount of Payment. On exercise of a Stock Appreciation Right, a Grantee
shall be entitled to receive an amount equal to the product of (i) the amount by
which the Fair Market Value of a share of Stock on the date of exercise of the
Stock Appreciation Right exceeds the option price per share specified in the
related Non-Qualified Stock Option and (ii) the number of shares of Stock in
respect of which the Stock Appreciation Right shall have been exercised.
(d) Form of Payment. Stock Appreciation Rights may only be settled in
Stock, cash or any combination thereof. The number of shares of Stock to be
distributed shall be the largest whole number obtained by dividing the amount
otherwise distributable in respect of such settlement by the Fair Market Value
of a share of Stock on the date of exercise of the Stock Appreciation Right. The
value of fractional shares of Stock shall be paid in cash.
(e) Effect of Exercise of Right or Related Option. If the related
Non-Qualified Stock Option is exercised in whole or in part, then the Stock
Appreciation Right with respect to the Stock purchased pursuant to such exercise
(but not with respect to any unpurchased Stock) shall be terminated as of the
date of exercise if such Stock Appreciation Right is not exercised on such date.
(f) Non-transferability. A Stock Appreciation Right shall not be
transferable or assignable by the Grantee other than by will or the laws of
descent and distribution, and shall be exercisable during the Grantee's lifetime
only by the Grantee.
(g) Termination of Employment. If the Grantee ceases to be an officer,
Employee, Director or Consultant of the Corporation for any reason, each
outstanding Stock Appreciation Right shall be exercisable for such period and to
such extent as the related Non-Qualified Stock Option or portion thereof.
IV. RESTRICTED STOCK AWARDS
1. Grant of Restricted Stock.
(a) Officers, Employees, Directors and Consultants shall be eligible to
receive grants of Restricted Stock under the Plan.
(b) The Committee shall determine and designate from time to time those
officers, Employees, Directors and Consultants who are to be granted Restricted
Stock and the number of shares of Stock subject to such Stock Award.
(c) The Committee, in its sole discretion, shall make such terms and
conditions applicable to the grant of Restricted Stock as may appear generally
acceptable or desirable to the Committee.
2. Termination of Relationship.
(a) If a Grantee's employment with the Corporation, a Director Grantee
ceases to be a Director, or a Consultant Grantee ceases to be a Consultant,
prior to the lapse of any restrictions applicable to the Restricted Stock such
Stock shall be forfeited and the Grantee shall return the certificates
representing such Stock to the Corporation.
(b) If the restrictions applicable to a grant of Restricted Stock shall
lapse, the Grantee shall hold such Stock free and clear of all such restrictions
except as otherwise provided in the Plan.
V. ADJUSTMENTS UPON MERGER, REORGANIZATION, DISSOLUTION OR CHANGE IN CONTROL
1. Substitution of Options. In the event of a corporate merger or consolidation,
or the acquisition by the Corporation of property or stock of an acquired
corporation or any reorganization or other transaction qualifying under Section
424 of the Code, the Committee may, in accordance with the provisions of that
Section, substitute Stock Options, Stock Awards and Stock Appreciation Rights
7
under this Plan for Stock Options, Stock Awards and Stock Appreciation Rights
under the plan of the acquired corporation provided (i) the excess of the
aggregate Fair Market Value of the shares of Stock subject to Stock Option
immediately after the substitution over the aggregate option price of such Stock
is not more than the similar excess immediately before such substitution and
(ii) the new Stock Option does not give the Grantee additional benefits,
including any extension of the exercise period. Alternatively, the Committee may
provide, that each Stock Option, Stock Award and Stock Appreciation Right
granted under the Plan shall terminate as of a date to be fixed by the Board;
provided, that no less than thirty days written notice of the date so fixed
shall be given to each holder, and each holder shall have the right, during the
period of fifteen days preceding such termination, to exercise the Stock
Options, Stock Awards and Stock Appreciation Rights as to all or any part of the
Stock covered thereby, including Stock as to which such would not otherwise be
exercisable.
2. Adjustment Provisions.
(a) In the event that a dividend shall be declared upon the Stock payable
in shares of the Corporation's common stock, the number of shares of Stock then
subject to any Stock Option or Stock Award outstanding under the Plan and the
number of shares reserved for the grant of Stock Options or Stock Awards
pursuant to the Plan shall be adjusted by adding to each such share the number
of shares which would be distributable in respect thereof if such shares had
been outstanding on the date fixed for determining the shareholders of the
Corporation entitled to receive such share dividend.
(b) If the shares of Stock outstanding are changed into or exchanged for a
different number or class or other securities of the Corporation or of another
corporation, whether through split-up, merger, consolidation, reorganization,
reclassification or recapitalization then there shall be substituted for each
share of Stock subject to any such Stock Option or Stock Award and for each
share of Stock reserved for the grant of Stock Options or Stock Awards pursuant
to the Plan the number and kind of shares or other securities into which each
outstanding share of Stock shall have been so changed or for which each share
shall have been exchanged.
(c) In the event there shall be any change, other than as specified above
in this Section 2, in the number or kind of outstanding shares of Stock or of
any shares or other securities into which such shares shall have been changed or
for which they shall have been exchanged, then if the Board shall, in its sole
discretion, determine that such change equitably requires an adjustment in the
number or kind of shares theretofore reserved for the grant of Stock Options or
Stock Awards pursuant to the Plan and of the shares then subject to Stock
Options or Stock Awards, such adjustment shall be made by the Board and shall be
effective and binding for all purposes of the Plan and of each Stock Option and
Stock Award outstanding thereunder.
(d) Each Stock Appreciation Right outstanding at the time of any adjustment
pursuant to this Section 2 and the number of outstanding Stock Appreciation
Rights, shall be adjusted, changed or exchanged in the same manner as related
Stock Options.
(e) In the case of any such substitution or adjustment as provided for in
this Section 2, the option price set forth in each outstanding Stock Option for
each share covered thereby prior to such substitution or adjustment will be the
option price for all shares or other securities which shall have been
substituted for such share or to which such share shall have been adjusted
pursuant to this Section 2, and the price per share shall be adjusted
accordingly.
(f) No adjustment or substitution provided for in this Section 2 shall
require the Corporation to sell a fractional share, and the total substitution
or adjustment with respect to each outstanding Stock Option shall be limited
accordingly.
(g) Upon any adjustment made pursuant to this Section 2 the Corporation
will, upon request, deliver to the Grantee a certificate setting forth the
option price thereafter in effect and the number and kind of shares or other
securities thereafter purchasable on the exercise of such Stock Option.
3. Dissolution or Liquidation. In the event of a proposed dissolution or
liquidation of the Corporation, to the extent an Award has not been previously
exercised, it will terminate immediately prior to the consummation of such
proposed action.
4. Change in Control. Notwithstanding Sections 1 and 2 above, in the event of a
Change of Control (as defined below), except as otherwise determined by the
Board, the Grantee shall fully vest in and have the right to exercise the Awards
as to all of the Stock, including Stock as to which it would not otherwise be
vested or exercisable. If an Award becomes fully vested and exercisable as the
result of a Change of Control, the Committee shall notify the Grantee in writing
or electronically prior to the Change of Control that the Award shall be fully
vested and exercisable for a period of fifteen (15) days from the date of such
notice, and the Award shall terminate upon the expiration of such period. For
purposes of this Agreement, a "Change of Control" means the happening of any of
the following events:
8
(a) When any "person," as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended ("Exchange Act") (other than the
Corporation, a Subsidiary or a Corporation employee benefit plan, including any
trustee of such plan acting as trustee) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing fifty percent (50%) or more of the
combined voting power of the Corporation's then outstanding securities entitled
to vote generally in the election of directors; or
(b) The stockholders of the Corporation approve a merger or consolidation
of the Corporation with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Corporation or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Corporation approve an agreement for the sale or disposition by the
Corporation of all or substantially all the Corporation's assets; or
(c) A change in the composition of the Board of the Corporation, as a
result of which fewer than a majority of the directors are Incumbent Directors.
"Incumbent Directors" shall mean directors who either (A) are directors of the
Corporation as of the date the Plan is approved by the stockholders, or (B) are
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose election or nomination is
in connection with an actual or threatened proxy contest relating to the
election of directors to the Corporation).
VI. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Corporation against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, notion, suit, or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action taken or failure to act under
the Plan or any Award agreement and against and from any and all amounts paid by
him or her in settlement thereof, with the Corporation's approval, or paid by
him or her in settlement thereof, with the Corporation's approval, or paid by
him or her in satisfaction of any judgment in any such action, suit, or
proceeding against him or her, provided he or she shall give the Corporation an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under the Corporation's Articles of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Corporation may have to indemnify them or hold them harmless.
VII. CONDITIONS UPON ISSUANCE OF SHARES
1. Legal Compliance. Stock shall not be issued pursuant to the exercise of an
Award unless the exercise of such Award and the issuance and delivery of Stock
shall comply with applicable laws and shall be further subject to the approval
of counsel for the Corporation with respect to such compliance.
2. Investment Representations. As a condition to the exercise of an Award, the
Corporation may require the Grantee exercising such Award to represent and
warrant at the time of any such exercise that the Stock is being purchased only
for investment and without any present intention to sell or distribute such
Stock if, in the opinion of counsel for the Corporation, such a representation
is required.
3. No Rights as Stockholder. No Grantee will have any of the rights of a
stockholder with respect to any Stock until the Stock is issued to the said
Grantee. After Stock is issued to the Grantee, the Grantee will be a stockholder
and will have all the rights of a stockholder with respect to such Stock,
including the right to vote and receive all dividends or other distributions
made or paid with respect to such Stock.
VIII. LEGAL CONSTRUCTION
1. Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
2. Severability. In the event any provision of the Plan shall be held illegal or
invalid for any reason, such illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.
9
3. Requirements of Law. The granting of Awards and the issuance of Stock under
the Plan shall be subject to all applicable laws.
4. Governing Law. The Plan and all Award agreements shall be construed in
accordance with and governed by the laws of the State of Nevada.
5. Captions. Captions are provided herein for convenience only, and shall not
serve as a basis for interpretation or construction of the Plan.
10
PROXY
SPECIAL GENERAL MEETING
(THE "MEETING")
OF SHAREHOLDERS OF
WESTERN STANDARD ENERGY CORP.
(THE "CORPORATION")
TO BE HELD AT SUITE 800-885 WEST GEORGIA STREET, VANCOUVER, B.C., ON FRIDAY,
MARCH 26, 2010, AT 11:00 A.M. (PACIFIC TIME).
The undersigned shareholder ("Registered Shareholder") of the Corporation hereby
appoints, Peter Jenks, the President of the Corporation, or in the place of the
foregoing, _________________________________________ (PRINT THE NAME), as
proxyholder for and on behalf of the Registered Shareholder with the power of
substitution to attend, act and vote for and on behalf of the Registered
Shareholder in respect of all matters that may properly come before the Meeting,
and at every adjournment thereof, to the same extent and with the same powers as
if the undersigned Registered Shareholder were present at the Meeting, or any
adjournment thereof.
The Registered Shareholder hereby directs the proxyholder to vote the securities
of the Corporation registered in the name of the Registered Shareholder as
specified herein. The Registered Shareholder hereby revokes any proxy previously
given.
RESOLUTIONS
(For full details of each item, please see the accompanying Proxy Statement)
1. To approve an increase in the FOR AGAINST ABSTAIN
Corporation's authorized capital to [ ] [ ] [ ]
200,000,000 shares of common stock.
2. To approve the Corporation's 2010 FOR AGAINST ABSTAIN
Equity Compensation Plan. [ ] [ ] [ ]
REGISTERED SHAREHOLDER SIGN HERE:
X
------------------------------------------
DATE SIGNED:
--------------------------------
THIS PROXY MUST BE SIGNED AND DATED.
SEE IMPORTANT INSTRUCTIONS ON REVERSE.
INSTRUCTIONS FOR COMPLETION OF PROXY
THIS PROXY IS SOLICITED BY THE MANAGEMENT OF THE CORPORATION.
This form of proxy ("Instrument of Proxy") MUST BE SIGNED by you, the Registered
Shareholder, or by your attorney duly authorized by you in writing, or, in the
case of a corporation, by a duly authorized officer or representative of the
Corporation; and if executed by an attorney, officer, or other duly appointed
representative, the original or a notarial copy of the instrument so empowering
such person, or such other documentation in support as shall be acceptable to
the Chairman of the Meeting, must accompany the Instrument of Proxy.
If this Instrument of Proxy is not dated in the space provided, authority is
hereby given by you, the Registered Shareholder, for the proxyholder to date
this proxy seven (7) calendar days after the date on which it was mailed to you,
the Registered Shareholder, by the Corporation.
A Registered Shareholder who wishes to attend the Meeting and vote on the
resolutions in person, may simply register with the scrutineer before the
Meeting begins.
A Registered Shareholder who is not able to attend the Meeting in person but
wishes to vote on the resolutions, may do the following:
* APPOINT ONE OF THE DESIGNATED PERSONS named on the Instrument of
Proxy, by leaving the wording appointing a nominee as is (i.e. do not
strike out the management proxyholders shown and do not complete the
blank space provided for the appointment of an alternate proxyholder).
WHERE NO CHOICE IS SPECIFIED BY A REGISTERED SHAREHOLDER WITH RESPECT
TO A RESOLUTION SET OUT IN THE INSTRUMENT OF PROXY, A MANAGEMENT
APPOINTEE ACTING AS A PROXYHOLDER WILL VOTE THE RESOLUTION AS IF THE
REGISTERED SHAREHOLDER HAD SPECIFIED AN AFFIRMATIVE VOTE.
OR
* APPOINT ANOTHER PROXYHOLDER, who need not be a Registered Shareholder
of the Corporation, to vote according to the Registered Shareholder's
instructions, by striking out the management proxyholder names shown
and inserting the name of the person you wish to represent you at the
meeting in the space provided for an alternate proxyholder. IF NO
CHOICE IS SPECIFIED, THE PROXYHOLDER HAS DISCRETIONARY AUTHORITY TO
VOTE AS THE PROXYHOLDER SEES FIT.
The securities represented by this Instrument of Proxy will be voted or withheld
from voting in accordance with the instructions of the Registered Shareholder on
any poll of a resolution that may be called for and, if the Registered Holder
specifies a choice with respect to any matter to be acted upon, the securities
will be voted accordingly. IF NO DESIGNATION IN FAVOUR OF OR AGAINST ANY MATTER
SET OUT ABOVE IS MADE, THE MANAGEMENT DESIGNEES, IF NAMED AS PROXY, WILL VOTE
"FOR" ALL MATTERS SET OUT HEREIN. THIS FORM OF PROXY CONFERS DISCRETIONARY
AUTHORITY UPON THE MANAGEMENT DESIGNEES OR OTHER PERSONS NAMED AS PROXY WITH
RESPECT TO ANY AMENDMENT OR VARIATION OF ANY OF THE PROPOSALS SET OUT ABOVE OR
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING.
If a Registered Shareholder has submitted an Instrument of Proxy, the Registered
Shareholder may still attend the Meeting and may vote in person. To do so, the
Registered Shareholder must record his/her attendance with the scrutineer before
the commencement of the Meeting and revoke, in writing, all prior proxies.
- --------------------------------------------------------------------------------
INSTRUCTIONS AND OPTIONS FOR VOTING:
TO BE REPRESENTED AT THE MEETING, VOTING INSTRUCTIONS MUST BE DEPOSITED AT THE
CORPORATION'S OFFICE, BY MAIL OR BY FAX, AT ANY TIME UP 48 HOURS (EXCLUDING
SATURDAYS, SUNDAYS AND HOLIDAYS) BEFORE THE TIME OF THE MEETING. THE CHAIR OF
THE MEETING HAS THE DISCRETION TO ACCEPT PROXIES RECEIVED LESS THAN 48 HOURS
PRIOR TO THE MEETING. PROXIES MAY BE TRANSMITTED BY FACSIMILE OR TELECOPY.
VOTING BY MAIL:
Nevada Agency and Transfer Company
50 West Liberty Street Suite 880
Reno NV 89501
Fax: (775) 322-5623
ATTENTION: MARY RAMSEY