Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14C
(RULE
14C-101)
INFORMATION
STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES EXCHANGE
ACT
OF
1934
Check
the
appropriate box:
o
Preliminary Information
Statement
o
Confidential, for Use
of the Commission Only (as permitted by
Rule
14c-5(d)(2))
x
Definitive Information
Statement
BLACKSANDS
PETROLEUM, INC.
(Name
of
Registrant as Specified In Its Charter)
Payment
of Filing Fee (Check the appropriate box):
x
No fee
required
o
Fee computed on table
below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title
of
each class of securities to which transaction applies:
(2) Aggregate
number of securities to which transaction applies:
(3) Per
unit
price or other underlying value of transaction computed pursuant to Exchange
Act
Rule 0-11 (Set forth the amount on which the filing fee is calculated and state
how it was determined):
(4) Proposed
maximum aggregate value of transaction:
(5) Total
fee
paid:
o
Fee previously paid
with preliminary materials.
o
Check box if any part
of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify
the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the form or schedule and
the date of its filing.
(1)
Amount previously paid:
(2)
Form,
Schedule or Registration Statement No.:
(3)
Filing Party:
(4)
Date
Filed:
BLACKSANDS
PETROLEUM, INC.
SUITE
328, 369 ROCKY VISTA PARK DRIVE
CALGARY,
ALBERTA T3G 5K7
CANADA
INFORMATION
STATEMENT NOTICE
WE
ARE
NOT ASKING YOU FOR A PROXY AND
YOU
ARE
REQUESTED NOT TO SEND US A PROXY
Dear
Stockholders:
Notice
is
hereby given that as of June 26, 2006, we sought and obtained the written
consent, in lieu of a meeting of stockholders, from the holders of 55.2% of
the
outstanding voting power of our stock, (i) adopting our 2006
Stock Option Plan (the “Plan”), substantially in the Form attached hereto as
Exhibit
A
pursuant
to which our board of directors is given the ability to provide incentives
through the issuance of options, stock, restricted stock, and other stock-based
awards, representing up to 6,000,000 shares of the Company’s common stock, to
certain employees, outside directors, officers, consultants and advisors and
(ii)
approving and ratifying the Stock Option Agreement between us and Darren R.
Stevenson, dated April 18, 2006, attached hereto as Exhibit
B.
You
are
encouraged to carefully read the attached Information Statement, including
the
appendices, for further information regarding these actions. In accordance
with
Rule 14c-2 under the Securities Exchange Act of 1934 (the “Exchange Act”), the
approval of the actions described herein by the holders of a majority of the
voting power of Blacksands Petroleum, Inc. will be deemed ratified and effective
at a date that is at least 20 days after the date this Information Statement
has
been mailed or furnished to our stockholders. We intend to mail or furnish
this
Information Statement to stockholders on or about July 7, 2006.
THIS
IS
NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS' MEETING WILL
BE
HELD TO CONSIDER THE MATTERS DESCRIBED HEREIN. This Information Statement is
being furnished to you solely for the purpose of informing stockholders of
the
matters described herein in compliance with Regulation 14C of the Exchange
Act.
By
Order
of the Board of Directors
/s/
Darren R. Stevenson
Chief
Executive Officer
July
7,
2006
ACTIONS
BY THE BOARD OF DIRECTORS AND
THE
MAJORITY STOCKHOLDERS
FIRST
ACTION
GENERAL
On
June
26, 2006, our Board of Directors approved a plan that will enable us to grant
equity and equity-linked awards to our outside directors, officers, employees,
consultants and advisors. This plan is called the 2006 Stock Option Plan (the
“Plan”). On June 26, 2006, stockholders representing 55.2% of our issued and
outstanding common stock have provided us with a written consent in lieu of
a
shareholders’ meeting approving and adopting the Plan. The Plan is intended to
allow us to provide incentives that will (1) strengthen the desire of highly
competent persons to serve as outside directors, officers, employees,
consultants and advisors of our company and (2) further stimulate their efforts
on behalf of our company.
THE
2006
STOCK OPTION PLAN
We
have
summarized below certain key provisions of the 2006 Stock Option Plan. This
summary may not contain all the information that is important to you. You should
review the entire Plan, a copy of which is included as Exhibit
A.
Shares
Available
The
maximum number of shares of our common stock that may be delivered under the
Plan is 6,000,000 subject to adjustment for certain specified changes to our
capital structure. Some awards under the Plan may link future payments to the
awardee to the future value of a specified number of shares of our common stock.
The number of shares used for reference purposes in connection with these awards
will be considered "delivered" for purposes of computing the maximum number
of
shares that may be delivered under the Plan. If an award under the Plan
terminates without the shares subject thereto being delivered, the shares
subject to such award will thereafter be available for further awards under
the
Plan.
Eligibility
All
employees,
officers, outside directors, consultants and advisors are eligible to
participate in the Plan.
Administration
The
administrator of the Plan will be the Board of Directors or any committee which
the Board designates to serve as the administrator of the Plan. The committee
serving as administrator (the "Committee") will, among other things, have the
authority to:
| · |
construe
the Plan and any award under the
Plan;
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| · |
select
the directors, officers, employees and non-employee service providers
to
whom awards may be granted and the time or times at which awards
will be
granted;
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determine
the number of shares of our common stock to be covered by or used
for
reference purposes for any award;
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| · |
modify,
extend or renew outstanding awards, or accept the surrender of outstanding
awards and substitute new awards;
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| · |
impose
any term, limitation or condition upon an award under the Plan that
the
Committee deems appropriate to achieve the objective of the
Plan;
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| · |
adopt
rules and regulations for carrying out the Plan;
and
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| · |
amend
the terms and conditions of awards previously granted under the Plan
so
long as such new terms and conditions are consistent with the terms
of the
Plan and that if such amendment is detrimental to the participant
in the
Plan, such participant’s consent is
obtained;
|
The
Committee has not yet made any awards under the Plan. Because the granting
of
awards is in the sole discretion of the Committee, the nature and magnitude
of
future awards cannot currently be determined.
Types
of
Awards
The
types
of awards that may be made under the Plan are stock options, stock appreciation
rights, restricted stock awards, and Reload Options. The Committee will fix
the
terms of each award, including, to the extent relevant, the following: (1)
exercise price for options, base price for stock appreciation rights, and
purchase price, if any, for restricted stock awards, (2) vesting requirements
and other conditions to exercise, (3) term and termination, (4) effect, if
any,
of change of control and (5) method of exercise and of any required payment
by
the recipient. Additional information concerning the types of awards that may
be
made is set forth below.
Stock
Options.
The
Committee may grant options that are qualified as "incentive stock options"
under Section 422 of the Internal Revenue Code ("ISOs") and options that are
not
so qualified ("Non-Qualified Options"). ISOs are subject to certain special
limitations, including the following: (1) the exercise price per share may
not
be less than 100% of the fair market value per share of our common stock as
of
the grant date (110% of such fair market value, if the recipient owns more
than
10% of the total combined voting power of all classes of our outstanding
shares), (2) the term may not exceed 10 years, and (3) the recipient must be
an
employee of our company.
Stock
Appreciation Rights.
A stock
appreciation right gives the holder the opportunity to benefit from the
appreciation of our common stock over a specified base price determined by
the
Committee. Upon exercise of a stock appreciation right, the holder has the
right
to receive in respect of each share subject thereto a payment equal to the
excess, if any, of: (1) the fair market value of a share of our common stock
as
of the exercise date over (2) the specified base price. At the discretion of
the
Committee, any required payment may be made in cash, shares of our common stock,
or both.
Restricted
Stock Awards.
A
restricted stock award entitles the recipient to acquire shares of our common
stock for no consideration or for the consideration specified by the Committee.
The shares will be subject to such vesting periods and other restrictions and
conditions as the Committee determines.
Certain
Corporate Transactions
If
certain corporate transactions specified in the Plan occur, the Committee may
make appropriate or equitable adjustments to the Plan and awards, including
(1)
the number of shares of stock that can be granted; (2) the number and kind
of
shares or other securities subject to any then outstanding awards and (3) the
exercise price, base price, or purchase price applicable to outstanding awards
under the Plan.
The
Committee may cancel outstanding awards, but not outstanding stock or restricted
stock awards, in connection with any merger or consolidation of our company
or
any sale or transfer of all or part of our assets or business, or any similar
event. The Committee may determine to make no compensation whatsoever for any
canceled awards that are not in-the-money (as defined below) or for any canceled
awards to the extent not vested. We are required to provide payment in cash
or
other property for the in-the-money value of the vested portion of awards that
are in-the-money and that are canceled as aforesaid. Awards are in-the-money
only to the extent of their then realizable market value, without taking into
account the potential future increase in the value of the award (whether under
Black-Scholes-type formulas or otherwise).
Amendment
The
board
may amend the Plan at any time and from time to time, provided that (1) no
amendment may deprive any person of any rights granted under the Plan before
the
effective date of such amendment, without such person's consent; and (2)
amendments may be subject to shareholder approval to the extent needed to comply
with applicable law and stock exchange requirements.
Term
of
Plan
No
award
may be granted under the Plan after the close of business on July 28, 2016,
the
day immediately preceding the tenth anniversary of the effective date of the
Plan. However, all awards made prior to such time will remain in effect in
accordance with their terms.
Certain
Federal Income Tax Considerations
Matters
Relating to Section 162(m) of the Internal Revenue Code
Section
162(m) of the Internal Revenue Code places a $1,000,000 annual limit on the
compensation deductible by us paid to certain of its executives. The limit,
however, does not apply to “qualified performance-based compensation.” We
believe that awards of stock options, SARs and certain other “performance-based
compensation” awards under the Plan will qualify for the performance-based
compensation exception to the deductibility limit.
Matters
Relating to Change of Control
The
Committee may provide that the vesting of an award be accelerated upon a change
of control. In such event, all or a portion of the relevant award may be deemed
a "parachute payment." Under provisions of the Internal Revenue Code, (1) the
recipient of an "excess parachute payments" (as defined in Section 280G of
the
Internal Revenue Code) would be required to pay a 20% excise tax thereon (in
addition to income tax otherwise owed) and (2) the "excess parachute payment"
would not be deductible to our company. If any of our executive officers is
required to pay such an excise tax, we will be required to pay the executive
an
amount that is sufficient on an after-tax basis to offset such payment.
Non-Qualified
Options. No income will be recognized by a participant upon the grant of a
non-qualified option. Upon exercise, the participant will generally have
ordinary income in the amount equal to the excess of the fair market value
of
the shares acquired over the exercise price. The income recognized by an
employee participant will be subject to tax withholding. Upon a later sale
of
such shares, the participant will have capital gain or loss in an amount equal
to the difference between the amount realized on such sale and the tax basis
of
the shares sold. We will be entitled to a tax deduction in the same amount
as
the ordinary income recognized by the participant with respect to shares
acquired upon exercise of the non-qualified option.
Incentive
Stock Options. No income will be recognized by a participant upon the grant
of
an incentive stock option. Further, the participant will recognize no income
at
the time of exercise (although a participant may have income for purposes of
alternative minimum tax calculations) and we will not be allowed a deduction
for
federal income tax purposes in connection with the grant or exercise of an
option. If the participant holds the acquired shares two years from the date
of
grant and one year from the date of exercise the entire gain (or loss) realized
when the participant eventually disposes of the stock is treated as long term
capital gain (or loss). If the shares are disposed of before such holding period
requirements are satisfied, the participant will recognize ordinary income
in an
amount equal to the lesser of the difference between (1) the exercise price
and
the fair market value of the shares on the date of exercise or (2) the exercise
price and the sales proceeds. Any remaining gain or loss will be treated as
capital gain or loss. We will be entitled to a federal income tax deduction
equal to the amount of ordinary income recognized by the
participant.
EFFECTIVE
DATE OF THE PLAN
The
Plan
will become effective on July 28, 2006, a date that is more than 20 days from
the mailing of this Information Statement to our stockholders.
INTERESTS
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Upon
the
adoption of the Plan, we intend to use the Plan to compensate employees,
officers, outside directors, consultants and advisors with equity compensation.
However, there is no current agreement or obligation obligating us to provide
equity compensation and no determination has yet been made regarding potential
equity compensation grants.
DISSENTERS’
RIGHTS
Holders
of our voting securities are not entitled to dissenters’ rights with respect to
our adoption of the Plan.
SECOND
ACTION
GENERAL
On
June
26, 2006, stockholders representing 55.2% of our issued and outstanding common
stock provided us with a written consent in lieu of a shareholders’ meeting
approving and ratifying the Stock Option Agreement. We entered into the
Agreement with Darren Stevenson as a means of providing him with performance
incentives in his roles as our President, Secretary and Chief Executive
Officer.
THE
STOCK
OPTION AGREEMENT
Under
the
Stock Option Agreement, Mr. Stevenson received options to purchase up to
1,000,000 shares of Common Stock. 100,000 of these shares vested upon the
agreement becoming effective. An additional 200,000 options will vest on January
1, 2007, an additional 200,000 options will vest if the Company conducts a
placement of at least US$10,000,000 and an additional 500,000 options will
vest
if the Company conducts a placement of at least US$50,000,000. All of the
options, once vested, are exercisable at $2.00 per share. All these options
are
non-qualified options, and none of the options are included in the 6,000,000
options to be set granted under the Plan. This summary may not contain all
the
information that is important to you. You can review the entire Stock Option
Agreement, a copy of which is included as Exhibit
B.
EFFECTIVE
DATE OF THE RATIFICATION OF THE STOCK OPTION AGREEMENT
The
Stock
Option Agreement was entered into on April 18, 2006. The stockholder consent
ratifying the Stock Option Agreement does not become effective until twenty
days
after this information is mailed to our stockholders.
INTERESTS
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Darren
Stevenson is one of our Directors and is our President, Secretary and Chief
Executive Officer. The Stock Option Agreement is between the Company and Mr.
Stevenson and grants him up to 1,000,000 options to purchase shares of our
common stock. We do not believe that the Stock Option Agreement requires the
approval and ratification of the stockholders to be effective, but to the extent
that any such approval and ratification is beneficial to Mr. Stevenson, he
has a
direct interest in the approval and ratification.
DISSENTERS’
RIGHTS
Holders
of
our voting securities are not entitled to dissenters’ rights with respect to the
ratification and approval of the Stock Option Agreement.
GENERAL
The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending this Information
Statement to the beneficial owners of the Common Stock.
COMPENSATION
OF EXECUTIVE OFFICERS AND DIRECTORS
None
of
our directors receive any compensation for their services. Our executive
officers during 2005 did not receive a salary during fiscal year 2005. On April
18, 2006, we entered into an Employment Agreement and a Stock Option Agreement
with Darren R. Stevenson as part of his compensation for becoming our Chief
Executive Officer, President and Secretary.
The
Employment Agreement provides Mr. Stevenson with $60,000 (Canadian) per annum,
to be increased to $120,000 (Canadian) per annum in the event that the Company
conducts a placement of it securities of at least US$50,000,000. The term of
the
Employment Agreement is for two years.
Under
the
Stock Option Agreement, Mr. Stevenson received options to purchase up to
1,000,000 shares of Common Stock. 100,000 of these shares vested upon the
agreement becoming effective. An additional 200,000 options will vest on January
1, 2007, an additional 200,000 options will vest if the Company conducts a
placement of at least US$10,000,000 and an additional 500,000 options will
vest
if the Company conducts a placement of at least US$50,000,000. All of the
options, once vested, are exercisable at $2.00 per share. All these options
are
non-qualified options, and none of the options are included in the 6,000,000
options to be set granted under the Plan.
OPTION
GRANTS AS OF JUNE 29, 2006 AND IN THE LAST FISCAL YEAR
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Name
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Number
of Securities Underlying Options Granted (#) (1)
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%
of Total Options Granted to Employees In Fiscal 2006 to June 29,
2006
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Exercise
or Base Price Per Share
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Darren
Stevenson
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1,000,000
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100
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%
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$
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$2.00
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There
were no stock option grants in the fiscal year ended October 31, 2005.
VOTING
SECURITIES AND PRINCIPAL HOLDERS THEREOF
As
of
June 29, 2006, there were 63,000,000 shares of the Common Stock issued and
outstanding. Each holder of the Common Stock is entitled to one vote for each
share held by such holder. The Majority Stockholders held an aggregate of
34,800,000 shares of the Common Stock, or 55.2% of the voting power in the
Company outstanding, on such date.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of June 28, 2006, certain information concerning
the beneficial ownership of the Common Stock by (i) each stockholder known
to
the Company to beneficially own five percent or more of the outstanding Common
Stock; (ii) each director; (iii) each executive officer; and (iv) all of our
executive officers and directors as a group, and their percentage of
ownership.
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NAME
AND ADDRESS
OF
BENEFICIAL OWNER
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TITLE
OF CLASS
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NUMBER
OF
SHARES
HELD
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PERCENTAGE
OF CLASS SHARES OWNED(1)
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Darren
R. Stevenson
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Common
Stock
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30,000,000
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47.7
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%
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Suite
328,
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369
Rocky Vista Park Drive
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Calgary,
Alberta T3G 5K7
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Bruno
Mosimann
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Common
Stock
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0
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0
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Herbstackerstreet
27
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CH-8472
Seuzach
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Switzerland
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Total
Ownership of Common Stock by
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All
Directors and Officers as a
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Group
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30,100,000
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(2)
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47.7
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%
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(1)
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Unless
otherwise indicated, to the Company's knowledge each person has sole
voting and investment power with respect to all listed shares. Based
on
63,100,000 shares outstanding as of June 28, 2006, including the
100,000
vested options owned by Mr.
Stevenson.
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| (2) |
Including
the 100,000 vested options owned by Mr.
Stevenson.
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WHERE
YOU
CAN FIND ADDITIONAL INFORMATION ABOUT THE COMPANY
The
Company is subject to the information requirements of the Exchange Act, and
in
accordance therewith files reports, proxy statements and other information
including annual and quarterly reports on Form 10-KSB and Form 10-QSB with
the
Securities and Exchange Commission ("SEC"). Reports and other information filed
by the Company can be inspected and copied at the public reference facilities
maintained at the SEC at 100 F Street, N.E., Washington, DC 20549. Copies of
such material can be obtained upon written request addressed to the SEC, Public
Reference Section, 100 F Street, N.E., Washington, DC 20549, at prescribed
rates. You may obtain information on the operation of the SEC's Public Reference
Room by calling the SEC at (800) SEC-0330. The SEC also maintains a web site
on
the Internet (http://www.sec.gov) where reports, proxy and information
statements and other information regarding issuers that file electronically
with
the SEC may be obtained free of charge.
By
Order
of the Board of Directors
/s/
Darren R. Stevenson
Chief
Executive Officer
July
7,
2006
EXHIBIT
INDEX
| Exhibit
A: |
2006
Stock Option Plan
|
|
Exhibit
B:
|
Stock
Option Agreement, dated April 18, 2006, between Blacksands Petroleum,
Inc.
and Darren R. Stevenson
|
EXHIBIT
A
2006
STOCK OPTION PLAN
2006
STOCK OPTION PLAN
1.
Purpose. The purpose of this 2006 Stock Option Plan (the "Plan") is to advance
the interests of Blacksands Petroleum, Inc. (the "Company") and its Affiliates
(as defined below) by inducing eligible individuals of outstanding ability
and
potential to join and remain with, or to provide consulting or advisory services
to, the Company or its Affiliates, by encouraging and enabling employees,
Outside Directors (as defined below), consultants, and advisors to acquire
proprietary interests in the Company, and by providing participating employees,
Outside Directors, consultants, and advisors with an additional incentive to
promote the success of the Company. These purposes are accomplished by providing
for the granting of Incentive Stock Options, Nonqualified Stock Options, Reload
Options, Stock Appreciation Rights, and Restricted Stock (all as defined below)
to employees, Outside Directors, consultants, and advisors.
2.
Definitions. As used in the Plan, the following terms have the meanings
indicated:
(a)
"Affiliate" means a "parent corporation" or a "subsidiary corporation" (as
set
forth in Code Sections 424(e) and 424(f), respectively) of the
Company.
(b)
"Applicable Withholding Taxes" means the aggregate minimum amount of federal,
state, local, and foreign income, payroll, and other taxes that an Employer
is
required to withhold in connection with the grant, vesting, or exercise of
any
Award.
(c)
"Award" means an Incentive Stock Option, a Nonqualified Stock Option, a Reload
Option, a Stock Appreciation Right, or Restricted Stock.
(d)
"Beneficiary" means the person or entity designated by the Participant,
in a form approved by the Company, to exercise the Participant's rights with
respect to an Award after the Participant's death. If the Participant does
not
validly designate a Beneficiary, or if the designated person no longer exists,
then the Participant's Beneficiary shall be his or her estate.
(e)
"Board" means the Board of Directors of the Company.
(f)
"Cause" shall have the same meaning given to such term (or other term of similar
meaning) in an Employment Agreement for purposes of termination of employment
under such agreement, and in the absence of any such agreement or if such
agreement does not include a definition of "Cause" (or other term of similar
meaning), the term "Cause" shall mean (i) any material breach by the Participant
of any agreement to which the Participant and the Company or an Affiliate are
parties, (ii) any continuing act or omission to act by the Participant which
may
have a material and adverse effect on the Company's business or on the
Participant's ability to perform services for the Company or an Affiliate,
including, without limitation, the commission of any crime (other than minor
traffic violations), or (iii) any material misconduct or material neglect of
duties by the Participant in connection with the business or affairs of the
Company or an Affiliate.
(g)
"Change in Control" means, unless such term or an equivalent term is otherwise
defined with respect to an Award by the Participant's Award agreement, any
Employment Agreement or in a written contract of service, the occurrence of
any
of the following:
(i)
any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act)
becomes the "beneficial owner" (as defined in Rule 13d-3 promulgated under
the
Exchange Act), directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the total combined voting power of the
Company's then-outstanding securities entitled to vote generally in the election
of Directors; provided, however, that the following acquisitions shall not
constitute a Change in Control: (1) an acquisition by any such person who on
the
Effective Date is the beneficial owner of more than fifty percent (50%) of
such
voting power, (2) any acquisition directly from the Company, including, without
limitation, a public offering of securities, (3) any acquisition by the Company,
(4) any acquisition by a trustee or other fiduciary under an employee benefit
plan of a Participating Company or (5) any acquisition by an entity owned
directly or indirectly by the stockholders of the Company in substantially
the
same proportions as their ownership of the voting securities of the Company;
or
(ii)
an
Ownership Change Event or series of related Ownership Change Events
(collectively, a "Transaction") in which the stockholders of the Company
immediately before the Transaction do not retain immediately after the
Transaction direct or indirect beneficial ownership of more than fifty percent
(50%) of the total combined voting power of the outstanding securities entitled
to vote generally in the election of Directors or, in the case of an Ownership
Change Event described in Section 2(x)(iii), the entity to which the assets
of
the Company were transferred (the "Transferee"), as the case may be;
or
(iii)
a
liquidation or dissolution of the Company.
provided,
however, that a Change in Control shall be deemed not to include a transaction
described in subsections (i) or (ii) of this paragraph (g) in which a majority
of the members of the board of directors of the continuing, surviving or
successor entity, or parent thereof, immediately after such transaction is
comprised of incumbent Directors. For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting securities of one or more corporations
or
other business entities which own the Company or the Transferee, as the case
may
be, either directly or through one or more subsidiary corporations or other
business entities. The Committee shall have the right to determine whether
multiple sales or exchanges of the voting securities of the Company or multiple
Ownership Change Events are related, and its determination shall be final,
binding and conclusive.
(h)
"Code" means the Internal Revenue Code of 1986, as amended from time to time,
and any rulings or regulations promulgated thereunder.
(i)
"Committee" means the Board, the Compensation Committee of the Board, or such
other committee of the Board as the Board appoints to administer the Plan;
provided, however, that should Section 162(m) of the Code and Section 16 of
the
Securities Exchange Act of 1934 apply to Awards under the Plan, if any member
of
the Committee does not qualify as both an "outside director" for purposes of
Code Section 162(m) and a "non-employee director" for purposes of Rule 16b-3,
the remaining members of the Committee (but not less than two members) shall
be
constituted as a subcommittee of the Committee to act as the Committee for
purposes of the Plan.
(j)
"Commission" means the U.S. Securities and Exchange Commission.
(k)
"Company" means Blacksands Petroleum, Inc., a Nevada corporation, and its
subsidiaries.
(l)
"Company Stock" means common stock, par value $.001 per share, of the Company.
In the event of a change in the capital structure of the Company affecting
the
common stock (as provided in Section 14), the shares resulting from such a
change in the common stock shall be deemed to be Company Stock within the
meaning of the Plan.
(m)
"Date
of Grant" means the date on which the Committee grants an Award, or such future
date as may be determined by the Committee.
(n)
"Disability" means a disability within the meaning of Code Section
22(e)(3).
(o)
"Employer" means the Company and each Affiliate that employs one or more
Participants.
(p)
"Employment Agreement" means any written employment or other similar agreement
between the Participant and the Company or an Affiliate.
(q)
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(r)
"Fair
Market Value" means on any given date the fair market value of Company Stock
as
of such date, as determined by the Committee. If the Common Stock is listed
on a
national securities exchange or traded on the over-the-counter market, Fair
Market Value means the closing selling price or, if not available, the closing
bid price or, if not available, the high bid price of the Common Stock quoted
on
such exchange, or on the over-the-counter market as reported by the NASDAQ
Stock
Market ("NASDAQ"), or if the Common Stock is not listed on NASDAQ, then by
the
Over-the-Counter Bulletin Board, on the day immediately preceding the day on
which the Award is granted or exercised, as the case may be, or, if there is
no
selling or bid price on that day, the closing selling price, closing bid price,
or high bid price on the most recent day which precedes that day and for which
such prices are available.
(s)
"Incentive Stock Option" means an Option that qualifies for favorable income
tax
treatment under Code Section 422.
(t)
"Mature Shares" means shares of Company Stock for which the shareholder has
good
title, free and clear of all liens and encumbrances.
(u)
"Nonqualified Stock Option" means an Option that is not an Incentive Stock
Option.
(v)
"Option" means a right to purchase Company Stock granted under the Plan, at
a
price determined in accordance with the Plan.
(w)
"Outside Director" means a member of the Board who is not an employee of, or
a
consultant or advisor to, the Company or an Affiliate as of the Date of
Grant.
(x)
"Ownership Change Event" means the occurrence of any of the following with
respect to the Company: (i) the direct or indirect sale or exchange in a single
or series of related transactions by the stockholders of the Company of more
than fifty percent (50%) of the voting stock of the Company; (ii) a merger
or
consolidation in which the Company is a party; or (iii) the sale, exchange,
or
transfer of all or substantially all of the assets of the Company (other than
a
sale, exchange or transfer to one or more subsidiaries of the
Company).
(y)
"Participant" means any employee, Outside Director, consultant, or advisor
(including independent contractors, professional advisors, and service
providers) of the Company or an Affiliate who receives an Award under the
Plan.
(z)
"Restricted Stock" means Company Stock awarded under Section 9 of the
Plan.
(aa)
"Reload Option" means a reload option grant made in accordance with Section
7 of
the Plan.
(bb)
"Rule 16b-3" means Rule 16b-3 of the Commission promulgated under the Exchange
Act. A reference in the Plan to Rule 16b-3 shall include a reference to any
corresponding rule (or number redesignation) of any amendments to Rule 16b-3
enacted after the effective date of the Plan's adoption.
(cc)
"Securities Act" means the Securities Act of 1933, as amended.
(dd)
"Stock Appreciation Right" means a right to receive amounts awarded under
Section 8.
3.
Stock.
Subject to Section 14 of the Plan, there shall be reserved for issuance under
the Plan an aggregate of six million (6,000,000) shares of Company Stock, which
may be authorized but un-issued shares, or shares held in the Company's
treasury, or shares purchased from stockholders expressly for use under the
Plan. In addition, shares allocable to Awards granted under the Plan that
expire, are forfeited, are cancelled without the delivery of the shares, or
otherwise terminate unexercised, may again be available for Awards under the
Plan. For purposes of determining the number of shares that are available for
Awards under the Plan, the number shall also include the number of shares
surrendered by a Participant actually or by attestation or retained by the
Company in payment of Applicable Withholding Taxes, and any Mature Shares
surrendered by a Participant upon exercise of an Option or in payment of
Applicable Withholding Taxes. Shares issued under the Plan through the
settlement, assumption, or substitution of outstanding awards or obligations
to
grant future awards as a condition of an Employer acquiring another entity
shall
not reduce the maximum number of shares available for delivery under the
Plan.
4.
Eligibility. Subject to the terms of the Plan, the Committee shall have the
power and complete discretion, as provided in Section 13, to select eligible
employees, Outside Directors, consultants, and advisors to receive an Award
under the Plan; provided, however, that any Award shall be subject to the
following terms and conditions:
(a)
Only
those individuals who are employees (including officers) of the Company or
an
Affiliate at the Date of Grant shall be eligible to receive an Incentive Stock
Option under the Plan.
(b)
All
employees (including officers) and Outside Directors of, or consultants and
advisors to, either the Company or an Affiliate at the Date of Grant shall
be
eligible to receive Nonqualified Stock Options, Stock Appreciation Rights,
and
Restricted Stock; provided, however, that Nonqualified Stock Options, Stock
Appreciation Rights, and Restricted Stock may not be granted to any such
consultants and advisors unless (i) bona fide services have been or are to
be
rendered by such consultant or advisor and (ii) such services are not in
connection with the offer or sale of securities in a capital raising
transaction.
(c)
Anything herein to the contrary notwithstanding, any recipient of an Award
under
the Plan must be includable in the definition of "employee" provided in the
general instructions to Form S-8 Registration Statement under the Securities
Act.
(d)
The
grant of an Award shall not obligate an Employer to pay any employee, Outside
Director, consultant, or advisor any particular amount of remuneration, to
continue the employment of the employee or engagement of the Outside Director,
consultant, or advisor after the grant, or to make further grants to the
employee, Outside Director, consultant, or advisor at any time
thereafter.
5.
Stock
Options.
(a)
The
Committee may make grants of Options to Participants. Except as otherwise
provided herein, the Committee shall determine the number of shares for which
Options are granted, the Option exercise price per share, whether the Options
are Incentive Stock Options or Nonqualified Stock Options, and any other terms
and conditions to which the Options are subject.
(b)
The
exercise price of shares of Company Stock covered by an Option shall be not
less
than 100 percent of the Fair Market Value of Company Stock on the Date of Grant.
Except as provided in Section 14, (i) the exercise price of an Option may not
be
decreased after the Date of Grant and (ii) a Participant may not surrender
an
Option in consideration for the grant of a new Option with a lower exercise
price or another Award.
(c)
All
Options granted hereunder shall be subject to the following terms and
conditions:
(i)
All
Options shall be evidenced by a written stock option agreement (the "Stock
Option Agreement") setting forth all the relevant terms of the
Award.
(ii)
No
Option shall be exercisable more than 10 years after the Date of
Grant.
(iii)
The
aggregate Fair Market Value, determined at the Date of Grant, of shares for
which Incentive Stock Options become exercisable by a Participant during any
calendar year shall not exceed $100,000 and any amount in excess of $100,000
shall be treated as a Non-Qualified Stock Option. The maximum aggregate number
of shares for which Incentive Stock Options may be issued under the Plan to
any
Participant in any calendar year shall be 1,000,000.
(iv)
If
an Incentive Stock Option is granted to an employee who owns, at the Date of
Grant, more than 10 percent of the total combined voting power of all classes
of
stock of the Company or an Affiliate, then (A) the option price of the shares
subject to the Incentive Stock Option shall be at least 110% of the Fair Market
Value of the Company Stock at the Date of Grant and (B) such Incentive Stock
Option shall not be exercisable after the expiration of 5 years from the Date
of
Grant.
(v)
Subject to earlier termination of the Option as otherwise provided herein and
unless otherwise provided in any Employment Agreement or as provided by the
Committee in the grant of an Option and set forth in or incorporated into the
Stock Option Agreement: (A) if the employment of an employee by, or the services
of an Outside Director for, or consultant or advisor to, the Company or an
Affiliate should be terminated for Cause or terminated voluntarily by the
grantee, then any outstanding Option shall terminate immediately, (B) if such
employment or services terminates for any other reason, any such Option
exercisable as of the date of termination may be exercised at any time within
three months of termination. For purposes of this subsection, (y) the retirement
of an individual either pursuant to a pension or retirement plan maintained
by
the Company or an Affiliate or at the applicable normal retirement date
prescribed from time to time by the Company shall be deemed to be termination
of
the individual's employment other than voluntarily or for Cause, and (z) an
individual who leaves the employ or services of the Company or an Affiliate
to
become an employee or Outside Director of, or a consultant or advisor to, an
entity that has assumed the Option as a result of a corporate reorganization
or
the like shall not be considered to have terminated employment or
services.
(vi)
Subject to earlier termination of the Option as otherwise provided herein and
unless otherwise provided in any Employment Agreement or as provided by the
Committee in the grant of an Option and set forth in or incorporated into the
Stock Option Agreement, if the holder of an Option under the Plan ceases
employment or services because of Disability while employed by, or while serving
as an Outside Director for or a consultant or advisor to, the Company or an
Affiliate, then such Option may, subject to the provisions of subsection (viii)
below, be exercised at any time within one year after the termination of
employment or services due to the Disability.
(vii)
Subject to earlier termination of the Option as otherwise provided herein and
unless otherwise provided in any Employment Agreement or as provided by the
Committee in the grant of an Option and set forth in or incorporated into the
Stock Option Agreement, if the holder of an Option under the Plan dies (A)
while
employed by, or while serving as an Outside Director for or a consultant or
advisor to, the Company or an Affiliate, or (B) within three months after the
termination of employment or services other than voluntarily by the grantee
or
for Cause, then such Option may, subject to the provisions of subsection (viii)
below, be exercised by the Participant's Beneficiary at any time within one
year
after the Participant's death.
(viii)
An
Option may not be exercised after termination of employment, termination of
directorship, termination of consulting or advisory services, Disability or
death except to the extent that the holder was entitled to exercise the Option
at the time of such termination or as otherwise provided in a currently
effective written Employment Agreement, consulting agreement or other related
agreement executed between the Company and the employee, Outside Director or
consultant or advisor, and in any event may not be exercised after the
expiration of the Option in accordance with the terms of the grant.
(ix)
The
employment relationship of an employee of the Company or an Affiliate shall
be
treated as continuing intact while the employee is on military or sick leave
or
other bona fide leave of absence if such leave does not exceed 90 days or,
if
longer, so long as the employee's right to reemployment is guaranteed either
by
statute or by contract.
(d)
The
holder of any Option granted under the Plan shall have none of the rights of
a
stockholder with respect to the shares covered by the Option until such stock
shall be transferred to the holder upon the exercise of the Option.
6.
Grants
to Outside Directors. Awards, other than Incentive Stock Options, may be made
to
Outside Directors. The Committee shall have the power and complete discretion
to
select Outside Directors to receive Awards. The Committee shall have the
complete discretion, under provisions consistent with Section 13, to determine
the terms and conditions, the nature of the Award and the number of shares
to be
allocated as part of each Award for each Outside Director. The grant of an
Award
shall not obligate the Company to make further grants to the Outside Director
at
any time thereafter or to retain any person as a director for any period of
time.
7.
Reload
Options. The Committee may grant Options with a reload feature. A reload feature
shall only apply when the exercise price is paid by delivery of Company Stock
in
accordance with Section 10. The Stock Option Agreement for the Option containing
the reload feature shall provide that the holder of the Option shall receive,
contemporaneously with the payment of the exercise price in shares of Common
Stock, a Reload Option to purchase that number of shares of Company Stock equal
to the sum of (i) the number of shares used to exercise the Option, and (ii)
with respect to Nonqualified Stock Options, the number of shares used to satisfy
Applicable Withholding Taxes. The terms of the Plan applicable to the Option
shall be equally applicable to the Reload Option with the following exceptions:
the option price per share of Company Stock deliverable upon the exercise of
the
Reload Option (i) in the case of a Reload Option that is an Incentive Stock
Option being granted to a Participant who owns more than 10 percent of the
total
combined voting power of all classes of stock of the Company or an Affiliate,
shall be 110% of the Fair Market Value of a share of Company Stock on the Date
of Grant of the Reload Option, and (ii) in the case of a Reload Option which
is
an Incentive Stock Option being granted to any other Participant, or which
is a
Nonqualified Stock Option, shall be the Fair Market Value of a share of Company
Stock on the Date of Grant of the Reload Option. The term of the Reload Option
shall be the same as the Option which gave rise to the Reload Option. If the
exercise price of an Option containing a reload feature is paid in cash and
not
in shares of Company Stock, the reload feature shall have no application with
respect to such exercise.
8.
Stock
Appreciation Rights. Concurrently with the award of any Option to purchase
one
or more shares of Common Stock, the Committee may, in its sole discretion,
award
to the optionee with respect to each share of Common Stock covered by an Option
a related Stock Appreciation Right, which permits the optionee to be paid the
appreciation on the related Option in lieu of exercising the Option. The
Committee shall establish as to each award of Stock Appreciation Rights the
terms and conditions to which the Stock Appreciation Rights are subject;
provided, however, that the following terms and conditions shall apply to all
Stock Appreciation Rights:
(a)
A
Stock Appreciation Right granted with respect to an Incentive Stock Option
must
be granted together with the related Option. A Stock Appreciation Right granted
with respect to a Nonqualified Stock Option may be granted together with the
grant of the related Option.
(b)
A
Stock Appreciation Right shall entitle the Participant, upon exercise of the
Stock Appreciation Right, to receive in exchange an amount equal to the excess
of (i) the Fair Market Value on the date of exercise of Company Stock covered
by
the surrendered Stock Appreciation Right over (ii) the Fair Market Value of
Company Stock on the Date of Grant of the Stock Appreciation Right. The
Committee may limit the amount that the Participant will be entitled to receive
upon exercise of a Stock Appreciation Right.
(c)
A
Stock Appreciation Right may be exercised only if and to the extent the
underlying Option is exercisable, and a Stock Appreciation Right may not be
exercisable in any event more than 10 years after the Date of
Grant.
(d)
A
Stock Appreciation Right may only be exercised at a time when the Fair Market
Value of Company Stock covered by the Stock Appreciation Right exceeds the
Fair
Market Value of Company Stock on the Date of Grant of the Stock Appreciation
Right. The Stock Appreciation Right may provide for payment in Company Stock
or
cash, or a fixed combination of Company Stock and cash, or the Committee may
reserve the right to determine the manner of payment at the time the Stock
Appreciation Right is exercised.
(e)
To
the extent a Stock Appreciation Right is exercised, the underlying Option shall
be cancelled, and the shares of Company Stock represented by the Option shall
no
longer be available for Awards under the Plan.
9.
Restricted Stock Awards.
(a)
The
Committee may make grants of Restricted Stock to a Participant. The Committee
shall establish as to each award of Restricted Stock the terms and conditions
to
which the Restricted Stock is subject, including the period of time before
which
all restrictions shall lapse and the Participant shall have full ownership
of
the Company Stock. The Committee in its discretion may award Restricted Stock
without cash consideration. All Restricted Stock Awards shall be evidenced
by a
Restricted Stock Agreement setting forth all the relevant terms of the
Award.
(b)
Restricted Stock may not be sold, assigned, transferred, pledged, hypothecated,
or otherwise encumbered or disposed of until the restrictions have lapsed or
been removed. Certificates representing Restricted Stock shall be held by the
Company until the restrictions lapse, and the Participant shall provide the
Company with appropriate stock powers endorsed in blank.
10.
Method of Exercise of Options.
(a)
Options may be exercised by the Participant (or his or her legal guardian or
personal representative) by giving written notice of the exercise to the Company
at its principal office (attention of the Corporate Secretary) pursuant to
procedures established by the Company. The notice shall state the number of
shares the Participant has elected to purchase under the Option. Such notice
shall be accompanied, or followed within 10 days of delivery thereof, by payment
of the full exercise price of such shares. The exercise price may be paid in
cash by means of a check payable to the order of the Company or, if the terms
of
an Option permit, (i) by delivery or attestation of Mature Shares (valued at
their Fair Market Value) in satisfaction of all or any part of the exercise
price, (ii) by delivery of a properly executed exercise notice with irrevocable
instructions to a broker to deliver to the Company the amount necessary to
pay
the exercise price from the sale or proceeds of a loan from the broker with
respect to the sale of Company Stock or a broker loan secured by the Company
Stock, (iii) by such other consideration as may be approved by the Committee
from time to time to the extent permitted by applicable law, or (iv) by any
combination of (i) through (iii) hereof.
(b)
Unless prior to the exercise of the Option the shares issuable upon such
exercise have been registered with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, the notice of exercise shall be
accompanied by a representation or agreement of the individual or entity
exercising the Option to the Company to the effect that such shares are being
acquired for investment purposes and not with a view to the distribution
thereof, and such other documentation as may be required by the Company, unless
in the opinion of counsel to the Company such representation, agreement or
documentation is not necessary to comply with any such act.
(c)
The
Company shall not be obligated to deliver any Company Stock until the shares
have been listed on each securities exchange or market on which the Company
Stock may then be listed or until there has been qualification under or
compliance with such federal or state laws, rules or regulations as the Company
may deem applicable. The Company shall use reasonable efforts to obtain such
listing, qualification and compliance.
11.
Tax
Withholding. Each Participant shall agree as a condition of receiving an Award
payable in the form of Company Stock to pay to the Employer, or make
arrangements satisfactory to the Employer regarding the payment to the Employer
of, Applicable Withholding Taxes. Under procedures established by the Committee
or its delegate, a Participant may elect to satisfy Applicable Withholding
Taxes
by (i) making a cash payment or authorizing additional withholding from cash
compensation, (ii) delivering Mature Shares (valued at their Fair Market Value),
or (iii) if the applicable Stock Option Agreement or Restricted Stock Agreement
permits, having the Company retain that number of shares of Company Stock
(valued at their Fair Market Value) that would satisfy all or a specified
portion of the Applicable Withholding Taxes.
12.
Transferability of Awards. Awards shall not be transferable except by will
or by
the laws of descent and distribution.
13.
Administration of the Plan.
(a)
The
Committee shall administer the Plan. Subject to the terms and conditions set
forth in the Plan, the Committee shall have general authority to impose any
term, limitation, or condition upon an Award that the Committee deems
appropriate to achieve the objectives of the Award and of the Plan. The
Committee may adopt rules and regulations for carrying out the Plan with respect
to Participants and Beneficiaries. The interpretation and construction of any
provision of the Plan by the Committee shall be final and conclusive as to
any
Participant or Beneficiary.
(b)
The
Committee shall have the power to amend the terms and conditions of previously
granted Awards so long as the terms as amended are consistent with the terms
of
the Plan and provided that the consent of the Participant is obtained with
respect to any amendment that would be detrimental to him or her, except that
such consent will not be required if such amendment is for the purpose of
complying with Rule 16b-3 or any requirement of the Code or of other securities
laws applicable to the Award.
(c)
The
Committee shall have the power and complete discretion (i) to delegate to any
individual, or to any group of individuals employed by the Company or any
Affiliate, the authority to grant Awards under the Plan and (ii) to determine
the terms and limitations of any delegation of authority; provided, however,
that the Committee may not delegate power and discretion to the extent such
action would cause noncompliance with, or the imposition of penalties, excise
taxes, or other sanctions under, applicable corporate law, Rule 16b-3, Code
Section 162(m) or 409A, or any other applicable securities or tax
law.
(d)
The
Committee shall have the power to include one or more provisions in the terms
of
Award grants to provide for the cancellation of an outstanding Award in the
event the Participant violates any agreement or other obligation dealing with
non-competition, non-solicitation or protection of the Company's confidential
information.
14.
Change in Capital Structure; Change of Control.
(a)
Change in Capital Structure. In the event of a stock dividend, stock split,
or
combination of shares, share exchange, share distribution, recapitalization
or
merger in which the Company is the surviving corporation, a spin-off or
split-off of a subsidiary or Affiliate, or other change in the Company's capital
stock (including, but not limited to, the creation or issuance to shareholders
generally of rights, options, or warrants for the purchase of common stock
or
preferred stock of the Company), the aggregate number and kind of shares of
stock or securities of the Company to be subject to the Plan and to Awards
then
outstanding or to be granted, the maximum number of shares or securities which
may be delivered under the Plan, the per share exercise price of Options, the
terms of Awards, and other relevant provisions shall be proportionately and
appropriately adjusted by the Committee in its discretion, and the determination
of the Committee shall be binding on all persons. If the adjustment would
produce fractional shares with respect to any unexercised Option, the Committee
may adjust appropriately and in a nondiscriminatory manner the number of shares
covered by the Option so as to eliminate the fractional shares.
(b)
Effect of Change in Control on Options and Stock Appreciation Rights. Subject
to
the terms of any Employment Agreement, the Committee may provide in an Award
agreement for, or in the event of a Change in Control may take such actions
as
it deems appropriate to provide for, any one or more of the
following:
(i)
Accelerated Vesting. The Committee may provide for the acceleration of the
exercisability and vesting in connection with a Change in Control of any or
all
outstanding Options and Stock Appreciation Rights and shares acquired upon
the
exercise thereof upon such conditions, including termination of the
Participant's service prior to, upon, or following such Change in Control,
and
to such extent as the Committee shall determine.
(ii)
Assumption or Substitution. In the event of a Change in Control, the surviving,
continuing, successor, or purchasing entity or parent thereof, as the case
may
be (the "Acquiror"), may, without the consent of any Participant, either assume
or continue the Company's rights and obligations under any or all outstanding
Options and Stock Appreciation Rights or substitute for any or all outstanding
Options and Stock Appreciation Rights substantially equivalent options and
stock
appreciation rights (as the case may be) for the Acquiror's stock. Any Options
or Stock Appreciation Rights which are neither assumed or continued by the
Acquiror in connection with the Change in Control nor exercised as of the time
of consummation of the Change in Control shall terminate and cease to be
outstanding effective as of the time of consummation of the Change in
Control.
(iii)
Cash-Out. The Committee may, in its sole discretion and without the consent
of
any Participant, determine that, upon the occurrence of a Change in Control,
each or any Option or Stock Appreciation Right outstanding immediately prior
to
the Change in Control shall be canceled in exchange for a payment with respect
to each vested share (and each unvested share, if so determined by the
Committee) of Company Stock subject to such canceled Option or Stock
Appreciation Right in (i) cash, (ii) stock of the Company or of a corporation
or
other business entity a party to the Change in Control, or (iii) other property
which, in any such case, shall be in an amount having a Fair Market Value equal
to the excess of the Fair Market Value of the consideration to be paid per
share
of Company Stock in the Change in Control over the exercise price per share
under such Option or Stock Appreciation Right (the "Spread"). In the event
such
determination is made by the Committee, the Spread (reduced by applicable
withholding taxes, if any) shall be paid to Participants in respect of the
vested portion (and unvested portion, if so determined by the Committee) of
their canceled Options and Stock Appreciation Rights as soon as practicable
following the date of the Change in Control.
(iv)
Effect of Change in Control on Restricted Stock Awards. The Committee may
provide for the acceleration of the vesting of the shares subject to the
Restricted Stock Award upon such conditions, including termination of the
Participant's services to the Company prior to, upon, or following such Change
in Control, and to such extent as the Committee shall determine.
15.
Effective Date. The effective date of the Plan is July 28, 2006. The Plan shall
be submitted to the shareholders of the Company for approval. Until (i) the
Plan
has been approved by the Company's shareholders, and (ii) the requirements
of
any applicable federal or state securities laws have been met, no Restricted
Stock shall be awarded, and no Option shall be granted or exercisable, that
is
not contingent on these events.
16.
Termination, Modification. If not sooner terminated by the Board, this Plan
shall terminate at the close of business on July 28, 2016. No Awards shall
be
made under the Plan after its termination. The Board may amend or terminate
the
Plan as it shall deem advisable; provided, however, that no change shall be
made
that increases the total number of shares of Company Stock reserved for issuance
pursuant to Awards granted under the Plan (except pursuant to Section 14),
or
reduces the minimum exercise price for Options, or exchanges an Option for
another Award, unless such change is authorized by the shareholders of the
Company. Except as otherwise specifically provided herein, a termination or
amendment of the Plan shall not, without the consent of the Participant,
adversely affect a Participant's rights under an Award previously granted to
him
or her.
17.
American Jobs Creation Act of 2004.
(a)
It is
intended that the Plan comply in all applicable respects with Code Sections
409A(a)(2) through (4), as it may be amended from time to time, and any rulings,
regulations, or other guidelines promulgated under either or both statutes
(such
statutes, rulings, regulations and other guidelines to be referred to
collectively herein as "Section 409A"). This Plan, and any amendments thereto,
shall therefore be interpreted and implemented at all times so as to (i) ensure
compliance with Section 409A and (ii) avoid any penalty or early taxation of
any
payment or benefit under the Plan.
(b)
Anything herein to the contrary notwithstanding, the Board shall approve and
implement such amendments as it deems necessary or desirable to ensure
compliance with Section 409A and to avoid any penalty or early taxation of
any
payment or benefit under this Plan; provided, however, that no change shall
be
made that increases the total number of shares of Company Stock reserved for
issuance pursuant to Awards granted under the Plan (except pursuant to Section
14), or reduces the minimum exercise price for Options, or exchanges an Option
for another Award, unless such change is authorized by the shareholders of
the
Company. No such amendment shall require the consent of any
Participant.
18.
Interpretation and Venue. Except to the extent preempted by applicable federal
law, the terms of this Plan shall be governed by the laws of the State of Nevada
without regard to its conflict of laws rules.
EXHIBIT
B
STOCK
OPTION AGREEMENT
STOCK
OPTION AGREEMENT
This
Stock Option Agreement is made as of April 18, 2006 by and between Lam Liang
Corp. (the “Corporation”) and Darren R. Stevenson (the “Optionee”).
RECITALS
A. Optionee
is a director and an employee of the Corporation. In consideration of Optionee’s
serving as such, the Corporation’s board of directors has agreed to grant stock
options to the Optionee to purchase shares of the Corporation’s common stock,
$0.001 par value per share (the “Common Stock”). The stock options granted
herein are not “incentive stock options” under Section 422 of the Internal
Revenue Code of 1986, as amended.
B. The
Corporation is in the process of amending (the “Amendment)” its Articles of
Incorporation to (i) change its name to Blacksands Petroleum Inc. and (ii)
increase its authorized capitalization to 300,000,000 shares of Common Stock.
Upon the approval of the Amendment by the Corporation’s shareholders and the
filing of the Amendment with the Secretary of State of the State of Nevada
(the
date of such filing is referred to as the “Effective Date”), the Corporation
shall declare a 30 for one stock split in the form of a stock dividend (the
“Stock Split”). All provisions of this Agreement assume the effectiveness of the
Amendment on the Effective Date and the occurrence of the Stock
Split.
NOW
THEREFORE, specifically incorporating these recitals herein, it is agreed as
follows:
AGREEMENT
GRANT
OF OPTIONS
NUMBER
OF SHARES. Subject to the terms and conditions of this Agreement, the
Corporation grants to Optionee, Options to purchase from the Corporation
1,000,000
shares (the “Option Shares”).
EXERCISE
PRICE. Each Option Share is exercisable, upon vesting, at a price of US$2.00
per
share (the “Option Price”).
TERM.
The Expiration Date for all Options shall be April 14,
2008.
VESTING.
The Options vest as follows:
100,000
shall vest on the Effective Date;
An
additional 200,000 Options shall vest upon the close of a private placement
offering of the Corporation’s securities resulting in gross proceeds of not less
than US$10,000,000;
An
additional 200,000 Options shall vest on January 1, 2007;
and
An
additional 500,000 Options shall vest upon the close of a public or private
offering of the Corporation’s securities resulting in gross proceeds of not less
than US$50,000,000.
CONDITIONS
OF OPTION. The Options may be exercised immediately upon vesting, subject to
the
terms and conditions as set forth in this Agreement.
EXERCISE
OF OPTION
DATE
EXERCISABLE. The Options shall become exercisable by Optionee in accordance
with
Section 1.4 above.
MANNER
OF EXERCISE OF OPTIONS AND PAYMENT FOR COMMON STOCK. The Options may be
exercised by the Optionee, in whole or in part, by giving written notice to
the
Secretary of the Corporation, setting forth the number of Shares with respect
to
which Options are being exercised. The purchase price of the Option Shares
upon
exercise of the Options by the Optionee shall be paid in full in
cash.
STOCK
CERTIFICATES. Promptly after any exercise in whole or in part of the Options
by
Optionee, the Corporation shall deliver to Optionee a certificate or
certificates for the number of Shares with respect to which the Options were
so
exercised, registered in Optionee’s name.
NONTRANSFERABILITY
RESTRICTION.
The Options are not transferable by Optionee.
NO
RIGHTS AS SHAREHOLDER PRIOR TO EXERCISE
Optionee
shall not be deemed for any purpose to be a shareholder of Corporation with
respect to any shares subject to the Options under this Agreement to which
the
Options shall not have been exercised.
ADJUSTMENTS
NO
EFFECT ON CHANGES IN CORPORATION’S CAPITAL STRUCTURE. The existence of the
Options shall not affect in any way the right or power of the Corporation or
its
shareholders to make or authorize any adjustments, recapitalization,
reorganization, or other changes in the Corporation’s capital structure or its
business, or any merger or consolidation of the Corporation, or any issue of
bonds, debentures, preferred or preference stocks ahead of or affecting the
Option Shares, or the dissolution or liquidation of the Corporation, or any
sale
or transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or
otherwise.
ADJUSTMENT
TO OPTION SHARES. The Option Shares are subject to adjustment upon
recapitalization, reclassification, consolidation, merger, reorganization,
stock
dividend, reverse or forward stock split and the like. If the Corporation shall
be reorganized, consolidated or merged with another corporation, Optionee shall
be entitled to receive upon the exercise of the Option the same number and
kind
of shares of stock or the same amount of property, cash or securities as
Optionee would have been entitled to receive upon the happening of any such
corporate event as if Optionee had been, immediately prior to such event, the
holder of the number of Shares covered by the Option.
Notwithstanding the foregoing, no adjustment shall be made to the Option Shares
on account of the Stock Split.
SECTION
6
TERMINATION
OF EMPLOYMENT
6.1 The
parties acknowledge that they are parties to an Employment Agreement. If
Optionee’s employment under the Employment Agreement is terminated for any
reason, all non-vested options received by Optionee hereunder will become
immediately void and of no further effect as of the date of termination of
employment. Further, Optionee may thereafter have 90 days to exercise all vested
options following which time all such non-exercised options shall become void
and of no further effect.
SECTION
7
DISPUTE
RESOLUTION
7.1 AMICABLE
NEGOTIATIONS. The parties agree that, both during and after the performance
of
their responsibilities under this Agreement, each of them shall:
make
bona fide efforts to resolve any disputes arising between
them by amicable negotiations, and
provide
frank, candid and timely disclosure of all relevant facts, information and
documents to facilitate those negotiations.
7.2 EFFICIENT
PROCESS. The parties further agree to use their best efforts to conduct any
dispute resolution procedures herein as efficiently and cost effectively as
possible.
7.3 MEDIATION.
The parties agree to attempt to resolve all disputes arising out of or in
connection with this contract, or in respect of any defined legal relationship
associated with it or from it, by mediated negotiation with the assistance
of a
neutral person appointed by the British Columbia International Commercial
Arbitration Centre administered under its Mediation Rules.
7.4 ARBITRATION.
If the dispute cannot be settled within thirty (30) days after the mediator
has
been appointed or such lesser or longer period otherwise agreed to in writing
by
the parties, the dispute shall be referred to and finally resolved by
arbitration administered by the British Columbia International Commercial
Arbitration Centre, pursuant to its Rules and applying Nevada law.
In
the
absence of any written agreement otherwise, the place of arbitration shall
be
Vancouver, British Columbia.
7.5 ALL
DISPUTES. Except where otherwise specified in this Agreement, any and all
disputes between or among the parties to this Agreement arising under, out
of or
in any way relating to this Agreement, including the execution, delivery,
validity, enforceability, performance, breach, discharge, interpretation and
construction of it will be determined under this section.
SECTION
8
MISCELLANEOUS
PROVISIONS
8.1 NOTICES.
Any notice that a party may be required or permitted to give to the other
shall
be in writing, and may be delivered personally, by overnight courier or by
certified or registered mail, postage prepaid, addressed to the parties at
their
current principal addresses, or such other address as either party, by notice
to
the other, may designate in writing from time to
time.
8.2 LAW
GOVERNING. This Agreement shall be governed by and construed in accordance
with
the laws of the State of Nevada.
8.3 TITLES
AND CAPTIONS. All section titles or captions contained in this Agreement are
for
convenience only and shall not be deemed part of the context nor effect the
interpretation of this Agreement.
8.4 ENTIRE
AGREEMENT. This Agreement contains the entire understanding between the parties
and supersedes any prior understandings and agreements between them respecting
the subject matter of this Agreement.
8.5 AGREEMENT
BINDING. This Agreement shall be binding upon the heirs, executors,
administrators, successors and assigns of the parties
hereto.
8.6 PRONOUNS
AND PLURALS. All pronouns and any variations thereof shall be deemed to refer
to
the masculine, feminine, neuter, singular, or plural as the identity of the
person or persons may require.
8.7 FURTHER
ACTION. The parties hereto shall execute and deliver all documents, provide
all
information and take or forbear from all such action as may be necessary or
appropriate to achieve the purposes of the Agreement.
8.8 PARTIES
IN INTEREST. Nothing herein shall be construed to be to the benefit of any
third
party, nor is it intended that any provision shall be for the benefit of any
third party.
8.9 SAVINGS
CLAUSE. If any provision of this Agreement, or the application of such provision
to any person or circumstance, shall be held invalid, the remainder of this
Agreement, or the application of such provision to persons or circumstances
other than those as to which it is held invalid, shall not be affected
thereby.
8.10 DOLLARS.
All references to $ or dollars in this Agreement are to the United States
dollar.
[Signatures
on Next Page]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
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LAM
LIANG CORP.
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| By:
/s/
Darren R. Stevenson |
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Name:
Darren
Stevenson
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Title:
President
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The
undersigned Optionee hereby acknowledges receipt of an executed original of
this
Stock Option Agreement, accepts the Options granted thereunder, and agrees
to
the terms and conditions thereof.
| OPTIONEE |
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| /s/
Darren R.
Stevenson |
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Darren
R. Stevenson |
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LAM
LIANG
CORP.
NOTICE
OF
EXERCISE OF STOCK OPTION
The
undersigned hereby exercises the Stock Options granted by Lam Liang Corp. and
seeks to purchase ____________________ shares of Common Stock of the Corporation
pursuant to said Options. The undersigned understands that this exercise is
subject to all the terms and provisions of the Stock Option Agreement dated
as
of April 15, 2006.
Enclosed
is a check in the sum of $_____________________ in payment for such
shares.
__________________________________________
Signature
of Optionee
Date:
_____________________________________