Aurelio Resource Corporation

 

AMENDED AND RESTATED 2006 INCENTIVE COMPENSATION PLAN

1. PURPOSE

The purpose of this Amended and Restated Incentive Compensation Plan of Aurelio
Resource Corporation (the "Company") is to advance the interests of the Company
(as herein defined) by encouraging Eligible Employees (as herein defined) to
acquire shares of the Company, thereby increasing their proprietary interest in
the Company, encouraging them to remain associated with the Company and
furnishing them with additional incentive to advance the interests of the
Company in the conduct of their affairs; and to pay Consultants or other persons
who provide services with Shares in lieu of cash where the Company intends to
preserve cash.

2. DEFINITIONS

As used herein, the following definitions shall apply:

(a) "Administrator" means the Board or a Committee of the Board duly appointed
by the Board as the Administrator hereof.

(b) "Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in the Securities Act.

(c) "Applicable Laws" means the legal requirements relating to the
administration of incentive compensation plans, if any, under applicable
provisions of federal securities laws, state corporate and securities laws, the
Securities Act, the rules of any applicable stock exchange or national market
system, and the rules of any foreign jurisdiction applicable to Awards granted
to residents therein. 

(d) "Award" means the grant of Shares or Performance Shares or other right or
benefit under the Plan.

(e) "Award Agreement" means the written agreement evidencing the grant of an
Award executed by the Company and the Grantee, including any amendments thereto.

(f) "Board" means the Board of Directors of the Company.

(g) "Cause" means, with respect to the termination by the Company or a Related
Entity of the Grantee's Continuous Service, that such termination is for `Cause'
as such term is expressly defined in a then-effective written agreement between
the Grantee and the Company or such Related Entity, or in the absence of such
then-effective written agreement and definition, is based on, in the
determination of the Administrator, the Grantee's:

(i) refusal or failure to act in accordance with any specific, lawful direction
or order of the Company or a Related Entity;

(ii) unfitness or unavailability for service or unsatisfactory performance
(other than as a result of Disability);

(iii) performance of any act or failure to perform any act in bad faith and to
the detriment of the Company or a Related Entity;

(iv) dishonesty, intentional misconduct or material breach of any agreement with
the Company or a Related Entity; or

(v) commission of a crime involving dishonesty, breach of trust, or physical or
emotional harm to any person.

(h) "Change in Control" means a change in ownership or control of the Company
affected through either of the following transactions:

(i) the direct or indirect acquisition by any person or related group of persons
(other than an acquisition by the Company or by a Company-sponsored employee
benefit plan or by a person that directly or indirectly controls, is controlled
by, or is under common control with, the Company) of beneficial ownership of
securities possessing more than fifty percent (50%) of the total combined voting
power of the Company's outstanding securities pursuant to a tender or exchange
offer made directly to the Company's shareholders which a majority of the
Continuing Directors who are not Affiliates or Associates of the offeror do not
recommend such shareholders accept, or

(ii) a change in the composition of the Board over a period of thirty-six (36)
months or less such that a majority of the Board members (rounded up to the next
whole number) ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who are Continuing Directors. 

(i) "Committee" means any committee appointed by the Board to administer the
Plan. 

(j) "Common Stock" means the common stock of the Company. 

(k) "Company" means Aurelio Resource Corporation, a Nevada company.

(l) "Consultant" means any person (other than an Employee or solely with respect
to rendering services in such person's capacity as a Director) who is engaged by
the Company or any Related Entity to render consulting or advisory services to
the Company or such Related Entity.

(m) "Continuing Directors" means members of the Board who either (i) have been
Board members continuously for a period of at least eighteen (18) months or
(ii) have been Board members for less than eighteen (18) months and were elected
or nominated for election as Board members by at least a majority of the Board
members described in clause 2.(h)(ii) who were still in office at the time such
election or nomination was approved by the Board. 

(n) "Continuous Service" means that the provision of services to the Company or
a Related Entity in any capacity of Employee or Consultant is not interrupted or
terminated.  Continuous Service shall not be considered interrupted in the case
of (i) any approved leave of absence, (ii) transfers between locations of the
Company or among the Company, any Related Entity, or any successor, in any
capacity of Employee, Director or Consultant, or (iii) any change in status as
long as the individual remains in the service of the Company or a Related Entity
in any capacity of Employee, Director or Consultant (except as otherwise
provided in the Award Agreement).  An approved leave of absence shall include
sick leave, military leave, or any other authorized personal leave.  No such
leave may exceed ninety (90) days, unless reemployment upon expiration of such
leave is guaranteed by statute or contract.

(o) "Corporate Transaction" means any of the following transactions:

(i) a merger or consolidation in which the Company is not the surviving entity,
except for a transaction the principal purpose of which is to change the
jurisdiction in which the Company is organized;

(ii) the sale, transfer or other disposition of all or substantially all of the
assets of the Company (including the capital stock of the Company's subsidiary
corporations) in connection with the complete liquidation or dissolution of the
Company; or

(iii) any reverse merger in which the Company is the surviving entity but in
which securities possessing more than fifty percent (50%) of the total combined
voting power of the Company's outstanding securities are transferred to a person
or persons different from those who held such securities immediately prior to
such merger.

(p) "Director" means a member of the Board or the board of directors of any
Related Entity.

(q) "Disability" means that a Grantee is unable to carry out the
responsibilities and functions of the position held by the Grantee by reason of
any medically determinable physical or mental impairment.  A Grantee will not be
considered to have incurred a Disability unless he or she furnishes proof of
such impairment sufficient to satisfy the Administrator in its discretion.

(r) "Eligible Employee" means any person who is an Employee or a Consultant.

(s) "Employee" means any person, including an Officer or Director, who is a
full-time or part-time employee of the Company or any Related Entity.

(t) "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:

(i) Where there exists a public market for the Common Stock, the Fair Market
Value shall be (A) the average closing price for a Share for the last ten (10)
market trading days prior to the time of the determination (or, if no closing
price was reported on those days, on the last seven trading days on which a
closing price was reported) on the stock exchange determined by the
Administrator to be the primary market for the Common Stock or the NASDAQ
National Market, whichever is applicable or (B) if the Common Stock is not
traded on any such exchange or national market system, the average of the
closing bid and asked prices of a Share on the NASDAQ Small Cap Market for the
ten (10) days prior to the time of the determination (or, if no such prices were
reported on those days, on the last seven days on which such prices were
reported), in each case, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable; or

(ii) In the absence of an established market for the Common Stock of the type
described in 2.(t)(i), above, the Fair Market Value thereof shall be determined
by the Administrator in good faith.

(u) "Grantee" means an Eligible Employee who receives an Award pursuant to an
Award Agreement under the Plan.

(v) "Insider" means:

(i) a Director or Senior Officer of the Company;

(ii) a Director or Senior Officer of a person that is itself an Insider or
Subsidiary of the Company;

(iii) a person that has:

A. direct or indirect beneficial ownership of,

B. control or direction over, or

C. a combination of direct or indirect beneficial ownership of and control or
direction over securities of the Company carrying more than ten percent (10%) of
the voting rights attached to all the Company's outstanding voting securities,
excluding, for the purpose of the calculation of the percentage held, any
securities held by the person as underwriter in the course of a distribution, or

(iv) the Company itself, if it has purchased, redeemed or otherwise acquired any
securities of its own issue, for so long as it continues to hold those
securities.

(w) "Officer" means a person who is an officer, including a Senior Officer, of
the Company or a Related Entity within the meaning prescribed to under the
Securities Act and the rules and regulations promulgated there under.

(x) "Option" means an option to purchase Shares pursuant to an Award Agreement
granted under the Plan, which Options are also subject to the 2006 Stock Option
Plan of the Corporation.

(y) "Parent" means a "parent corporation", whether now or hereafter existing,
which holds a majority of the voting shares of the Company.

(z) "Performance Shares" means Shares or an Award denominated in Shares which
may be earned in whole or in part upon attainment of performance criteria
established by the Administrator. 

(aa) "Performance Units" means an Award which may be earned in whole or in part
upon attainment of performance criteria established by the Administrator and
which may be settled for cash, Shares or other securities or a combination of
cash, Shares or other securities as established by the Administrator. 

(bb) "Plan" means this Amended and Restated Incentive Compensation Plan as
approved by Board consent with effect from October 20, 2006.

(cc) "Related Entity" means any Parent, Subsidiary and any business,
corporation, partnership, limited liability company or other entity in which the
Company, a Parent or a Subsidiary holds a substantial ownership interest,
directly or indirectly.

(dd) "Restricted Stock" means Shares issued under the Plan to the Grantee for
such consideration, if any, and subject to such restrictions on transfer, rights
of first refusal, repurchase provisions, forfeiture provisions, and other terms
and conditions as established by the Administrator. 

(ee) "SAR" means a stock appreciation right entitling the Grantee to Shares or
cash compensation, as established by the Administrator, measured by appreciation
in the value of Common Stock.

(ff) "Securities Act" means the Securities Act of 1933, as amended.

(gg) "Senior Officer" means:

(i) the chair or vice chair of the Board, the president, a vice-president, the
secretary, the treasurer or the general manager of the Company;

(ii) any individual who performs functions for a person similar to those
normally performed by an individual occupying any office specified in paragraph
2.(gg)(i) above, and

(iii) the five (5) highest paid employees of the Company, including any
individual referred to in paragraph 2.(gg)(i) or 2.(gg)(ii) and excluding a
commissioned salesperson who does not act in a managerial capacity.

(hh) "Share" means a share of the Common Stock.

(ii) "Subsidiary" means a "subsidiary corporation", whether now or hereafter
existing, as determined by British Columbia corporate law.

(jj) "Stock Incentive Plan" means the current stock option plan and any
subsequent such plans approved by the shareholders of the Company.

(kk) "Related Entity Disposition" means the sale, distribution or other
disposition by the Company of all or substantially all of the Company's
interests in any Related Entity effected by a sale, merger or consolidation or
other transaction involving that Related Entity or the sale of all or
substantially all of the assets of that Related Entity. 

3. STOCK SUBJECT TO THE PLAN

The maximum aggregate number of Shares which may be issued or sold under this
Plan is five million (5,000,000) shares of Common Stock.  The Shares may be
authorized, but unissued, or reacquired shares of Common Stock.

4. STOCKS ISSUED UNDER THE PLAN

All shares issued under the Plan shall be subject to the provisions of the Stock
Incentive Compensation Plan.

5. ADMINISTRATION

(a) Plan Administrator

(i) Administration with Respect to Eligible Employees.  With respect to grants
of Awards, the Plan shall be administered by (A) the Board or (B) a Committee
designated by the Board, which Committee shall be constituted in such a manner
as to satisfy the Applicable Laws.  Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board.

(ii) Administration Errors.  In the event an Award is granted in a manner
inconsistent with the provisions of this subsection 4.(a), such Award shall be
presumptively valid as of its grant date to the extent permitted by the
Applicable Laws. 

(b) Powers of the Administrator.  Subject to Applicable Laws and the provisions
of the Plan (including any other powers given to the Administrator hereunder),
and except as otherwise provided by the Board, the Administrator shall have the
authority, in its discretion:

(i) to select the Eligible Employees or other persons who provide services to
the Company to whom Awards may be granted from time to time hereunder;

(ii) to determine whether and to what extent Awards are granted hereunder;

(iii) to determine the number of Performance Shares or the amount of other
consideration to be covered by each Award granted hereunder;

(iv) to approve forms of Award Agreements for use under the Plan;

(v) to determine the terms and conditions of any Award granted hereunder;

(vi) to suspend the right of an Eligible Employee to receive an Award for any
reason that the Administrator considers in the best interest of the Company;

(vii) to establish additional terms, conditions, rules or procedures to
accommodate the rules or laws of applicable foreign jurisdictions and to afford
Grantees favourable treatment under such laws; provided, however, that no Award
shall be granted under any such additional terms, conditions, rules or
procedures with terms or conditions which are inconsistent with the provisions
of the Plan; and

(viii) to take such other action, not inconsistent with the terms of the Plan,
as the Administrator deems appropriate. 

(c) Effect of Administrator's Decision.  All decisions, determinations and
interpretations of the Administrator shall be conclusive and binding on all
persons.  However, the Board reserves the right to override such decisions,
determinations and interpretations of the Administrator.

 

6. ELIGIBILITY

Awards may be granted to Eligible Employees.  An Eligible Employee who has been
granted an Award may, if otherwise eligible, be granted additional Awards. 

7. TERMS AND CONDITIONS OF AWARDS

(a) Type of Awards.  The Administrator is authorized under the Plan to award any
type of arrangement to an Eligible Employee or other persons who provide
services to the Company that is not inconsistent with the provisions of the Plan
and that by its terms involves or might involve the issuance of (i) Performance
Shares, (ii) an Option, (iii) a SAR or similar right with a fixed or variable
price related to the Fair Market Value of the Shares and with an exercise or
conversion privilege related to the passage of time, the occurrence of one or
more events, or the satisfaction of performance criteria or other conditions,
(iv) cash or (v) any other security with the value derived from the value of the
Shares.  Such Awards may include, without limitation, cash, Shares, Options,
SARs, Restricted Stock, Performance Units or Performance Shares, and an Award
may consist of one such security or benefit, or two (2) or more of them in any
combination or alternative.

(b) Designation of Award.  Each Award shall be designated in the Award
Agreement.

(c) Conditions of Award.  Subject to the terms of the Plan and Applicable Laws,
the Administrator shall determine the provisions, terms, and conditions of each
Award including, but not limited to, the Award vesting schedule, forfeiture
provisions, form of payment (cash, Shares, or other consideration) upon
settlement of the Award, and satisfaction of any performance criteria.  The
performance criteria established by the Administrator may be based on any one
of, or combination of, economic value added, market value added, achievement of
individual or corporate objectives, or other measures of performance selected by
the Administrator.  Partial achievement of the specified criteria may result in
a payment or vesting corresponding to the degree of achievement as specified in
the Award Agreement. 

(d) Acquisitions and Other Transactions.  The Administrator may issue Awards
under the Plan in settlement, assumption or substitution for, outstanding awards
or obligations to grant future awards in connection with the Company or a
Related Entity acquiring another entity, an interest in another entity or an
additional interest in a Related Entity whether by merger, stock purchase, asset
purchase or other form of transaction.

(e) Deferral of Award Payment.  The Administrator may establish one or more
programs under the Plan to permit selected Grantees the opportunity to elect to
defer receipt of consideration upon an Award, satisfaction of performance
criteria, or other event that absent the election would entitle the Grantee to
payment or receipt of Shares or other consideration under an Award.  The
Administrator may establish the election procedures, the timing of such
elections, the mechanisms for payments of, and accrual of interest or other
earnings, if any, on amounts, Shares or other consideration so deferred, and
such other terms, conditions, rules and procedures that the Administrator deems
advisable for the administration of any such deferral program.

(f) Award Exchange Programs.  The Administrator may establish one or more
programs under the Plan to permit selected Grantees to exchange an Award under
the Plan for one or more other types of Awards under the Plan on such terms and
conditions as determined by the Administrator from time to time. 

(g) Separate Programs.  The Administrator may establish one or more separate
programs under the Plan for the purpose of issuing particular forms of Awards to
one or more classes of Grantees on such terms and conditions as determined by
the Administrator from time to time.

(h) Term of Award.  The term of each Award shall be the term stated in the Award
Agreement.

(i) Transferability of Awards.  Awards shall be transferable to the extent
provided in the Award Agreement.

(j) Time of Granting Awards.  The date of grant of an Award shall for all
purposes be the date on which the Administrator makes the determination to grant
such Award, or such other date as is determined by the Administrator.  Notice of
the grant determination shall be given to each Employee or Consultant to whom an
Award is so granted within a reasonable time after the date of such grant.

(k) Termination of Continuous Service.  If Continuous Service is terminated by
the Company or a Related Party for Cause, or by a Grantee voluntarily, any
unvested benefits under the Plan will expire.  If Continuous Service is
terminated by retirement, death or Disability of a Grantee, or by the Company
for other than Cause, unvested benefits will be earned in accordance with the
vesting schedule in the Award Agreement.

8. CONDITIONS UPON ISSUANCE OF SHARES

(a) Shares shall not be issued pursuant to an Award unless such Award and the
issuance and delivery of such Shares pursuant thereto shall comply with all
Applicable Laws, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

(b) As a condition to an Award, the Company may require the person receiving
Shares to represent and warrant at the time of any such Award that the Shares
are only for investment and without any present intention to sell or distribute
such Shares if, in the opinion of counsel for the Company, such a representation
is required by any Applicable Laws.

 

9. CORPORATE TRANSACTIONS/CHANGES IN CONTROL/RELATED ENTITY DISPOSITIONS

Except as may be provided in an Award Agreement the Administrator shall have the
authority, exercisable either in advance of any actual or anticipated Corporate
Transaction, Change in Control or Related Entity Disposition or at the time of
an actual Corporate Transaction, Change in Control or Related Entity Disposition
at the time of the grant of an Award under the Plan or any time while an Award
remains outstanding, to provide for the full automatic vesting of one or more
outstanding unvested Awards under the Plan and the release from restrictions on
transfer and repurchase or forfeiture rights of such Awards in connection with a
Corporate Transaction, Change in Control or Related Entity Disposition, on such
terms and conditions as the Administrator may specify.  The Administrator also
shall have the authority to condition any such Award vesting or release from
such limitations upon the subsequent termination of the Continuous Service of
the Grantee within a specified period following the effective date of the
Corporate Transaction, Change in Control or Related Entity Disposition.  The
Administrator may provide that any Awards so vested or released from such
limitations in connection with a Change in Control or Related Entity Disposition
shall remain fully vested or released until the termination of the Award. 
Effective upon the consummation of a Corporate Transaction, all outstanding
Awards under the Plan shall terminate unless assumed by the successor company or
its parent.

10. EFFECTIVE DATE AND TERM OF PLAN

The Plan shall become effective as of April 21, 2008.  It shall continue in
effect until April 20, 2011 unless sooner terminated.

11. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN

(a) The Board may at any time amend, suspend or terminate the Plan. To the
extent necessary to comply with Applicable Laws, the Company shall obtain
shareholder approval of any Plan amendment in such a manner and to such a degree
as required.

(b) No Award may be granted during any suspension of the Plan or after
termination of the Plan.

(c) Any amendment, suspension or termination of the Plan (including termination
of the Plan under Section 10.(a), above) shall not affect Awards already
granted, and such Awards shall remain in full force and effect as if the Plan
had not been amended, suspended or terminated, unless mutually agreed otherwise
between the Grantee and the Administrator, which agreement must be in writing
and signed by the Grantee and the Company.

 

 

12. NO EFFECT ON TERMS OF EMPLOYMENT/CONSULTING RELATIONSHIP

The Plan shall not confer upon any Grantee any right with respect to the
Grantee's Continuous Service, nor shall it interfere in any way with his or her
right or the Company's right to terminate the Grantee's Continuous Service at
any time, with or without Cause.

13. NO EFFECT ON RETIREMENT AND OTHER BENEFIT PLANS

Except as specifically provided in a retirement or other benefit plan of the
Company or a Related Entity, Awards shall not be deemed compensation for
purposes of computing benefits or contributions under any retirement plan of the
Company or a Related Entity, and shall not affect any benefits under any other
benefit plan of any kind or any benefit plan subsequently instituted under which
the availability or amount of benefits is related to level of compensation.

14. GOVERNING LAW

The Plan shall be governed by the laws of the State of Nevada and the Federal
laws of the United States applicable therein; provided, however, that any Award
Agreement may provide by its terms that it shall be governed by the laws of any
other jurisdiction as may be deemed appropriate by the parties thereto.

IN WITNESS WHEREOF

, the Company has caused its duly authorized officer to execute this Plan on the
21st day of April, 2008.

AURELIO RESOURCE CORPORATION

By:

   

Stephen B. Doppler, President