Exhibit 4.24





EXHIBIT 4.24



 

 





2002 STOCK OPTION PLAN



August 28, 2002

 

 

 

 





SAN ANTONIOS RESOURCES INC.



2002 STOCK OPTION PLAN





ARTICLE 1. ESTABLISHMENT AND PURPOSE



               
1.1.         Establishment.   
San Antonios Resources Inc., a British Columbia company (the "Company") hereby
establishes a plan providing for long-term stock-based compensation incentive
awards for the performance by certain eligible individuals of services for the
Company. The plan shall be known as the 2002 Stock Option Plan (the "Plan").



               
1.2.         Purpose.   
The purpose of the Plan is to advance the interests of the Company and its
Shareholders by enabling the Company to attract and retain persons of ability to
perform services for the Company by providing an incentive to such persons
through equity participation in the Company and by rewarding such persons who
contribute to the achievement by the Company of its long-term economic
objectives.

 

ARTICLE 2. DEFINITIONS

               
The following terms shall have the meanings set forth below, unless the context
clearly otherwise requires:



               
2.1.         "Agreement" means a written
stock option agreement and/or stock appreciation rights agreement entered into
between the Company and a Participant relating to any options and/or stock
rights granted to such Participant, as amended, supplemented, restated or
replaced from time to time.



               
2.2.         "Board" means the board of
directors of the Company.



               
2.3.         "Change in Control" means
one or more of the events described in Section 11.1 of the Plan.



               
2.4.         "Code" means the Internal
Revenue Code of 1986, as amended.



               
2.5.         "Committee" means the
persons administering the Plan, as provided in Section 3.1 of the Plan.



               
2.6.         "Common Shares" means the
common shares in the capital stock of the Company, at no par value per share, or
the number and kind of shares of stock or other securities into which such
Common Shares may be changed in accordance with Section 4.3 of the Plan.



               
2.7.         "Disability" means the
disability of the Participant as defined in the long-term disability plan of the
Company then covering the Participant or, if no such plan exists, the permanent
and total disability of the Participant as defined in Section 22(e) of the Code.



               
2.8.         "Eligible Recipients" means
employees, including, without limitation, officers and directors who are also
employees of the Company, upon whose



judgment, initiative and efforts the Company is, or will become, largely
dependent for the successful conduct of its business, including, without
limitation, individuals capable of making critical technical contributions to
the development of the products and services of the Company, individuals
identified as successor candidates for key management positions, and individuals
essential to the successful integration of business acquisitions by the Company.
"Eligible Recipients" shall mean, with respect to Non-Statutory Stock Options,
the Company's directors, officers, advisors, agents, independent contractors and
other unrelated third persons, or, if an employee of the Company, the recipient
of a Non-Statutory Stock Option pursuant to the applicable provisions of the
Plan.



               
2.9.           "Exchange
Act" means the Securities Exchange Act of 1934, as amended.



               
2.10.         "Fair Market Value"
means, with respect to the Common Shares, as of any date:


  
    
      (a)     if the Common Shares are listed or admitted
      to unlisted trading privileges on any national securities exchange or are
      not so listed or admitted but transactions in the Common Shares are
      reported on the NASDAQ National Market or the NASDAQ SmallCap Market, then
      the average of the daily closing sale price of the Common Shares on such
      exchange or by the OTC Bulletin Board Service as quoted on such exchange
      or market (or the exchange or market with the greatest volume of trading
      in the Common Shares) as of the 15 consecutive trading days preceding such
      date on each of which there was such a trade; or

      

      (b)     if the Common Shares are not so listed or
      admitted to unlisted trading privileges or reported on the NASDAQ National
      Market or the NASDAQ SmallCap Market, and bid and asked prices therefor in
      the over-the-counter market are reported by the NASDAQ System or the
      National Quotation Bureau, Inc. (or any comparable reporting service),
      then the average of the closing bid and asked prices for 15 consecutive
      trading days preceding such date, as so reported by the NASDAQ System, or,
      if not so reported thereon, as reported by the OTC Bulletin Board Service
      (or such comparable reporting service); or

      

      (c)     if the Common Shares are not so listed or
      admitted to unlisted trading privileges or reported on the NASDAQ National
      Market System, and such bid and asked prices are not so reported, such
      price as the Committee determines in good faith in the exercise of its
      reasonable discretion.

    

  



               
2.11.         "Incentive Stock Option"
or "ISO" means a right to purchase Common Shares granted to a Participant
pursuant to Article 6 of the Plan that qualifies as an incentive stock option
within the meaning of Section 422 of the Code.



               
2.12.         "Non-Statutory Stock
Option" or "NSO" means a right to purchase Common Shares granted to a
Participant pursuant to Article 6 of the Plan that does not qualify as an
Incentive Stock Option.



               
2.13.         "Option" means an
Incentive Stock Option or a Non-Statutory Stock Option.



               
2.14.         "Participant" (also
referred to as the "Optionee") means an Eligible Recipient selected by
the Committee from time to time during the term of the Plan to receive one or
more Options under the Plan.



               
2.15.         "Person" means an
individual, corporation, partnership, group, association or other "person" (as
such term is used in Section 14(d) of the Exchange Act) other than the Company,
a wholly owned subsidiary of the Company, or any employee benefit plan sponsored
by the Company or a wholly owned subsidiary of the Company.



               
2.16.         "Retirement" means
the normal and approved early retirement of the Participant pursuant to and in
accordance with the regular retirement/pension plan or practice of the Company
then covering the Participant.



               
2.17.         "Securities Act"
means the Securities Act of 1933, as amended.



               
2.18.         "Stock Appreciation
Right" means a stock appreciation right granted pursuant to Article 7 of the
Plan.



               
2.19.         "Tax Date" means
the date any withholding tax obligation arises under the Code for a Participant
with respect to an Option.

 

ARTICLE 3. PLAN ADMINISTRATION



               
3.1.         The Committee.    
The Plan shall be administered by the Board or by a committee of the Board
consisting of not less than two persons; provided, however, that from and after
the date on which the Company first registers a class of its equity securities
under Section 12 of the Exchange Act, the Plan shall be administered by the
Board in accordance with all applicable provisions of the Exchange Act and all
references to "Committee" in this plan shall be deemed to mean the Board.
Members of such a committee, if established, shall be appointed from time to
time by the Board, shall serve at the pleasure of the Board and may resign at
any time upon written notice to the Board. A majority of any such committee
shall constitute a quorum, and the act of a majority of a quorum shall
constitute the act of such committee. Action of such a committee may be taken
without a meeting if unanimous written consent to such action is given. A member
of the committee may attend meetings in person or by means of telephone or other
electronic communication whereby all committee members in attendance can
simultaneously hear each other. Any such committee shall keep minutes of its
meetings or actions by written consent and shall provide copies thereof to the
Board to be kept with the corporate records of the Company. 



               
3.2.         Authority of the
Committee.


  
    (a)     In accordance with and subject to the
    provisions of the Plan, the Committee shall have the sole authority to
    determine the following: (i) the Eligible Recipients who shall be selected
    as Participants; (ii) the nature and extent of the Options to be granted to
    each Participant (including the number of shares of Common Shares to be
    subject to each Option, and the exercise price and the manner in which
    Options will become exercisable); (iii) the time or times when Options will
    be granted; (iv) the duration of each Option; (v) the restrictions and other
    conditions to which the exercise of Options may be subject; and (vi) such
    other provisions of the Options as the Committee may deem necessary or
    desirable and as consistent with the terms of the Plan. The Committee shall
    determine the form or forms of the Agreements with Participants which shall
    evidence the particular terms, conditions, rights and duties of the Company
    and the Participants with respect to Options granted pursuant to the Plan,
    which Agreements shall be consistent with the provisions of the Plan.

 

  






  
    (b)     With the consent of the Participant affected
    thereby, the Committee may amend or modify the terms of any outstanding
    Options in any manner, provided that the amended or modified terms are
    permitted by the Plan as then in effect. Without limiting the generality of
    the foregoing sentence, the Committee may, with the consent of the
    Participant affected thereby, modify the exercise price, number of shares or
    other terms and conditions of an Option, extend the term of an Option,
    accelerate the exercisability of an Option, accept the surrender of any
    outstanding Option, or, to the extent not previously exercised, authorize
    the grant of new Options in substitution for surrendered Options.

    

    (c)     The Committee shall have the authority, subject
    to the provisions of the Plan, to establish, adopt, revise, amend and revoke
    such rules and regulations relating to the Plan as it may deem necessary or
    advisable for the administration of the Plan. The Committee, in the exercise
    of this power, may correct any defect, omission or inconsistency in the Plan
    or in any Agreement, in a manner and to the extent it shall be necessary or
    expedient to make the Plan or such Agreement fully effective. The
    Committee's decisions and determinations under the Plan need not be uniform
    and may be made selectively among Participants, whether or not such
    Participants are similarly situated. Each determination, interpretation or
    other action made or taken by the Committee in good faith and pursuant to
    the provisions of the Plan shall be conclusive and binding for all purposes
    and on all persons, including, without limitation, the Company, the
    Shareholders of the Company, the Committee and each of its members, the
    directors, officers and employees of the Company, and the Participants and
    their respective successors in interest. No member of the Committee shall be
    liable for any action or determination made in good faith with respect to
    the Plan or any Option or Stock Appreciation Rights granted under the Plan.

  





ARTICLE 4. STOCK SUBJECT TO THE PLAN



               
4.1.     Number of Shares.    
Subject to adjustment as provided in Section 4.3 below, the maximum number of
shares of Common Shares that shall be reserved for issuance under the Plan shall
be 2,000,000 shares of Common Shares, subject to adjustment upon changes in
capitalization of the Company as provided in Section 4.3 of the Plan. The
maximum number of shares authorized may also be increased from time to time by
approval of the Board and, if required pursuant to Rule 16b-3 under the Exchange
Act, Section 422 of the Code or the rules of any exchange or the NASD, the
Shareholders of the Company.



               
4.2.     Shares Available for Use.    
Common Shares that may be issued upon the exercise of Options shall be applied
to reduce the maximum number of Common Shares remaining available for use under
the Plan. Any Common Shares that are subject to an Option (or any portion
thereof) that lapses, expires or for any reason is terminated unexercised shall
automatically again become available for use under the Plan.



               
4.3.     Adjustments.     In the
event of (a) any reorganization, merger, consolidation, recapitalization,
liquidation, reclassification, stock dividend, stock split, reverse stock split
or combination of shares, rights offering or divestiture (including a spin-off)
or any other change in the corporate structure or shares of the Company or



any other corporation whose performance is relevant to the grant
or vesting of an Option, (b) any purchase, acquisition, sale or disposition of a
significant amount of assets or a significant business, any extraordinary
dividend or any other similar transaction, or (c) any substitution by the
Company of Options for, or assumption by the Company of, options of any other
corporation, the Committee (or, if the Company is not the surviving corporation
in any such transaction, the board of directors of the surviving corporation)
shall make such adjustment as it shall in its sole discretion deem equitable and
appropriate (which determination shall be conclusive) as to the number and kind
of securities subject to and reserved under the Plan and, in order to prevent
dilution or enlargement of the rights of Participants, the number, kind and
exercise price of securities subject to outstanding Options; provided, however,
that in the case of Incentive Stock Options, the Committee shall, to the extent
not inconsistent with the best interest of the Company (such best interest to be
determined in good faith by the Board in its sole discretion), use its best
efforts to ensure that no adjustment under this Section 4.3 would (i) constitute
a modification, extension or renewal of such Incentive Stock Option within the
meaning of Section 422 and Section 425 of the Code, and the regulations
promulgated by the Treasury Department thereunder, or (ii) under Section 422 of
the Code and the regulations promulgated by the Treasury Department thereunder,
be considered as the adoption of a new plan requiring Shareholder approval.

 

ARTICLE 5. PARTICIPATION



               
5.1.     Generally.    
Participants in the Plan shall be those Eligible Recipients who, in the judgment
of the Committee, have performed, are performing or during the term of an Option
will perform, vital services in the management, operation and development of the
Company and have significantly contributed, are significantly contributing or
are expected to significantly contribute to the achievement of long-term
corporate economic objectives. Participants may be granted from time to time one
or more Options, as may be determined by the Committee in its sole discretion.
The number, type, terms and conditions of Options granted to various
Participants need not be uniform, consistent or in accordance with any plan,
whether or not such Participants are similarly situated. Upon determination by
the Committee that an Option is to be granted to a Participant, written notice
shall be given such person, specifying the terms, conditions, rights and duties
related thereto. Each Participant shall enter into an agreement with the
Company, in such form as the Committee shall determine and which is consistent
with the provisions of the Plan, specifying such terms, conditions, rights and
duties. Options shall be deemed to be granted as of the date specified in the
grant resolution of the Committee, which date shall be the date of the related
agreement with the Participant.



               
5.2.     Advisors.


  
    (a)         If the Company has
    not registered a class of its equity securities under Section 12 of the
    Exchange Act, any person engaged by the Company or one of its affiliated
    companies to render consulting or advisory services and who is compensated
    for such services (expressly excluding, however, any members of the Board in
    their capacity as directors of the Company) ("Consultants") shall not be
    eligible for the grant of an Option if, at the time of grant, either the
    offer or the sale of the Company securities to such Consultant constituted
    by such grant is not exempt under Rule 701 of the Securities Act ("Rule
    701") because of the nature of the services that the Consultant is providing
    to the Company, or because the Consultant is not an actual person, or as
    otherwise provided by Rule 701, unless the Committee determines that such
    grant need not comply with the requirements of Rule 701 and will satisfy
    another exemption under the Securities Act as well as comply with the
    securities laws of all other relevant jurisdictions.

  






  
    

    (b)         A Consultant shall not
    be eligible for the grant of a Option if, at the time of grant, a Form S-8
    Registration Statement under the Securities Act ("Form S-8") is not
    available to register either the offer or the sale of the Company securities
    to such Consultant because of the nature of the services that the Consultant
    is providing to the Company, or because the Consultant is not a natural
    person, or as otherwise provided by the rules governing the use of Form S-8,
    unless the Committee determines both (i) that such grant (A) shall be
    registered in another manner under the Securities Act (e.g., on a Form S-3
    Registration Statement) or (B) does not require registration under the
    Securities Act in order to comply with the requirements of the Securities
    Act, if applicable, and (ii) that such grant complies with the securities
    laws of all other relevant jurisdictions.

    

    (c)         Rule 701 and Form S-8
    generally are available to consultants and advisors only if (i) they are
    natural persons, (ii) they provide bona fide services to the issuer, its
    parents, its majority-owned subsidiaries or majority-owned subsidiaries of
    the issuer's parent, and (iii) the services are not in connection with the
    offer or sale of securities in a capital-raising transaction, and do not
    directly or indirectly promote or maintain the markets with the issuer's
    securities.

  





ARTICLE 6. STOCK OPTIONS



               
6.1.         Grant.    
A Participant may be granted one or more Options under the Plan, and such
Options shall be evidenced by an Agreement containing such terms and conditions,
consistent with the other provisions of the Plan, as shall be determined by the
Committee in its sole discretion. Without limiting the generality of the
foregoing, the Committee may (vii) in the Agreement evidencing such Option,
provide for the acceleration of the exercise date or dates of the subject Option
upon the occurrence of specified events, and/or (viii) at any time prior to the
complete termination of an Option, accelerate the exercise date or dates of such
Option. The Committee may designate whether an Option is to be considered an
Incentive Stock Option or Non-Statutory Stock Option; provided, however, that an
Incentive Stock Option shall only be granted to a Participant who is an employee
of the Company or one of its subsidiaries. The terms of the Agreement relating
to a Non-Statutory Stock Option shall expressly provide that such Option shall
not be treated as an Incentive Stock Option. Notwithstanding anything else in
the Plan contained to the contrary, an Incentive Stock Option granted under the
Plan to a Participant shall not be considered an Incentive Stock Option to the
extent that the aggregate Fair Market Value on the date of grant of such
Incentive Stock Option of all stock with respect to which incentive stock
options held by such Participant, whether under the Plan or under any other
plans of the Company or any of its subsidiaries, are exercisable for the first
time by such Participant during any calendar year exceeds $100,000.



               
6.2.         Exercise.    
An Option shall become exercisable at such times and in such installments, if
any, (which may be cumulative) as shall be determined by the Committee at the
time the Option is granted; provided, however, that except as may otherwise be
provided herein or unless otherwise determined by the Committee at or after its
date of grant, no Option shall be exercisable prior to six months from its date
of grant. Upon completion of its exercise period, an Option, to the extent not
then exercised, shall expire.



               
6.3.         Exercise Price.


  
    (a)         Incentive Stock
    Options.     The per share price to be paid by the
    Participant at the time an Incentive Stock Option is exercised shall be
    determined by the Committee, in its discretion, at the date of grant and
    shall be set forth in the Option Agreement; provided, however, that such
    price shall not be less than (i) 100% of the Fair Market Value of one (1)
    Common Share on the date the Option is granted, or (ii) 110% of the Fair
    Market Value of one (1) Common Share on the date the Option is granted if,
    at that time the Option is granted, the Participant owns, directly or
    indirectly (as determined pursuant to Section 424(d) of the Code), more than
    10% of the total combined voting power of all classes of stock of the
    Company (or any parent or subsidiary corporation of the Company).

    

    (b)         Non-Statutory Stock
    Options.     The per share price to be paid by the
    Participant at the time a Non-Statutory Stock Option is exercised shall be
    determined by the Committee in its sole discretion.

  



               
6.4.         Duration.


  
    (a)         Incentive Stock
    Options.     The period during which an Incentive
    Stock Option may be exercised shall be fixed by the Committee in its sole
    discretion at the time such Option is granted; provided, however, that in no
    event shall such period exceed 10 years from its date of grant or, in the
    case of a Participant who owns, directly or indirectly (as determined
    pursuant to Section 424(d) of the Code), more than 10% of the total combined
    voting power of all classes of stock of the Company (or any parent or
    subsidiary of the Company), 5 years from its date of grant.

    

    (b)         Non-Statutory Stock
    Options.     The period during which a Non-Statutory
    Stock Option may be exercised shall be fixed by the Committee in its sole
    discretion at its date of grant; provided, however, that in no event shall
    such period exceed 10 years and one month from its date of grant.

  



               
6.5.         Manner of Option
Exercise.     An Option may be exercised by a
Participant in whole or in part from time to time, subject to the conditions
contained herein and in the agreement evidencing such Option, by delivery, in
person or through certified or registered mail, of written notice of exercise to
the Company at its principal executive office at [Address of Company],
Attention: Corporate Secretary, and by paying in full the total Option exercise
price for the Common Shares to be purchased. Such notice of exercise shall be in
a form satisfactory to the Committee and shall specify the particular Option (or
portion thereof) that is being exercised and the number of shares with respect
to which the Option is being exercised. Subject to compliance with the
applicable provisions of the Plan, the exercise of the Option shall be deemed
effective upon receipt by the Company's corporate secretary of such notice of
exercise and payment complying with the terms of the Plan and the agreement
evidencing the Option. As soon as practicable after the effective exercise of
the Option, the Participant shall be recorded on the stock transfer books of the
Company as the owner of the shares purchased, and, subject to Section 10.1, the
Company shall deliver to the Participant one (1) or more duly issued stock
certificates evidencing such ownership. If a Participant exercises any Option
with respect to some, but not all, of the Common Shares subject to such Option,
the right to exercise such Option with respect to the remaining shares shall
continue until it expires or terminates in accordance with the terms. No

 



Option shall be exercisable except in respect of whole shares and the
exercise of an Option may be made with respect to no fewer than 1,000 shares at
one time, unless fewer than 1,000 shares remain subject to the Option and the
Option is exercised for all such remaining shares.

               
6.6.         Payment of Exercise
Price.     The total purchase price of the shares to be
purchased upon exercise of an Option shall be paid, to the extent permitted by
applicable statutes and regulations: (i) in cash (including check, bank draft or
money order); (ii) in the discretion of the Committee, at the time of the grant
of the Option (A) by delivery of a promissory note (containing such terms and
conditions as the Committee may in its discretion determine), (B) whole Common
Shares, or (C) the withholding of Common Shares issuable upon such exercise of
the Option; or (iii) any combination of the foregoing methods of payment or such
other form of legal consideration that may be acceptable to the Committee and
that is permitted for the issuance of shares under applicable law. In
determining whether or upon what terms and conditions a Participant will be
permitted to pay the purchase price of an Option in whole or in part in a form
other than cash, the Committee may consider all relevant facts and
circumstances, including, without limitation, the tax and securities law
consequences to the Participant and the Company and the financial accounting
consequences to the Company. The permitted method or methods of payment of the
amounts payable for an exercise of an Option, if other than in cash, shall be
set forth in the applicable Agreement, and may be subject to such conditions as
the Committee deems appropriate. Without limiting the generality of the
foregoing, if a Participant is permitted to elect to have Common Shares issuable
upon exercise of an Option withheld to pay all or any part of the amounts
payable in connection with such exercise, then the Committee may reserve, in the
applicable Agreement, the sole discretion to approve or disapprove such election
at the time of exercise of such Option.



               
6.7.         Rights as a Shareholder.    
The Participant shall have no rights as a Shareholder with respect to any Common
Shares covered by an Option until the Participant shall have become the holder
of record of such shares, and no adjustments shall be made for dividends or
other distributions or other rights as to which there is a record date preceding
the date the Participant becomes the holder of record of such shares, except as
the Committee may determine pursuant to Section 4.3 of the Plan.



               
6.8.         Disposition of Common
Shares Acquired Pursuant to the Exercise of Incentive Stock Options. Prior to
making a disposition (as defined in Section 424(c) of the Code) of any Common
Shares acquired pursuant to the exercise of an Incentive Stock Option granted
under the Plan before the expiration of two (2) years after its date of grant or
before the expiration of one (1) year after its date of exercise and the date on
which such Common Shares were transferred to the Participant pursuant to
exercise of the Option, the Participant shall send written notice to the Company
of the proposed date of such disposition, the number of shares to be disposed
of, the amount of proceeds to be received from such disposition and any other
information relating to such disposition that the Company may reasonably
request. The right of a Participant to make any such disposition shall be
conditioned on the receipt by the Company of all amounts necessary to satisfy
any Federal, state or local withholding and employment related tax requirements
attributable to such disposition. The Committee shall have the right, in its
sole discretion, to endorse the certificates representing such shares with a
legend restricting transfer (and to cause a stop transfer order to be entered
with the Company's transfer agent) until such time as the Company receives the
amounts necessary to satisfy such withholding and employment-related tax
requirements or until the later



of the expiration of 2 years from the date of grant of such
Incentive Stock Option and 1 year from its date of exercise and the date on
which such shares were transferred to the Participant pursuant to the exercise
of the Option.



               
6.9.         Aggregate Limitation of
Stock Subject to Incentive Stock Options.     To the
extent that the aggregate Fair Market Value (determined as of the date an
Incentive Stock Option is granted) of the Common Shares with respect to which
Incentive Stock Options (within the meaning of Section 422 of the Code),
including Incentive Stock Options, are exercisable for the first time by a
Participant during any calendar year (under the Plan and any other incentive
stock option plans of the Company) exceeds $100,000 (or such other amount as may
be prescribed by the Code from time to time), such excess Options shall be
treated as Non-Statutory Stock Options. The determination shall be made by
taking Incentive Stock Options into account in the order in which they were
granted. If such excess only applies to a portion of an Incentive Stock Option,
then the Committee, in its discretion, shall designate which shares shall be
treated as shares to be acquired upon exercise of an Incentive Stock Option.

 

ARTICLE 7. STOCK APPRECIATION RIGHTS



               
7.1.         Grant.    
Subject to the limitations of the Plan, a Stock Appreciation Right may be
granted by the Committee to a Participant to whom an Option is granted. Each
Stock Appreciation Right shall relate to a specific Option under the Plan (the
Arelated Option@). Subject to the limitations of the Plan, Stock Appreciation
Rights shall be exercisable in whole or in part upon notice to the Company upon
such terms and conditions as are provided in the applicable Agreement.



               
7.2.         Stock Appreciation
Rights to be Tandem.     A Stock Appreciation Right
shall be granted concurrently with the grant of the related Option, except where
the related Option is a Non-Statutory Option in which case it may be awarded
either concurrently with the grant of the related Option or at any time
thereafter prior to the complete exercise, termination, expiration or
cancellation of the related Option. Stock Appreciation Rights shall be
exercisable only at the time and to the extent that the related Option is
exercisable (and may be subject to such additional limitations on exercisability
as the Agreement may provide), and in no event after the complete termination or
full exercise of the related Option. Upon the exercise or termination of the
related Option, the Stock Appreciation Right with respect thereto shall be
canceled automatically to the extent of the number of Common Shares with respect
to which the related Option was so exercised or terminated. Upon the exercise of
a Stock Appreciation Right, the related Option shall be canceled automatically
to the extent of the number of Common Shares with respect to which such Stock
Appreciation Right was so exercised. Subject to the limitations of the Plan,
upon the exercise of a Stock Appreciation Right, the Participant thereof shall
be entitled to receive from the Company, for each share of the Company with
respect to which the Stock Appreciation Right is being exercised, consideration
(in the form determined as provided in Section 7.3) equal in value to the excess
of the Fair Market Value of a share of such series of Common Shares on the date
of exercise over the related Option purchase price per share; provided, however,
that the Committee may, in any Agreement granting Stock Appreciation Rights,
provide that the appreciation realizable upon exercise thereof shall be measured
from a base higher than the related Option purchase price.



               
7.3.         Consideration.    
The consideration to be received upon the exercise of a Stock Appreciation Right
by the Participant shall be paid in cash, Common Shares (valued at Fair Market
Value on the date of exercise of such Stock Appreciation Right) or a combination
of cash and shares of such series of



Common Shares as specified in the applicable Agreement, or, if
so provided in the applicable Agreement, either as determined by the Committee
in its sole discretion or as elected by the Participant, provided that the
Committee shall have the sole discretion to approve or disapprove the election
by a Participant to receive cash in full or partial settlement of a Stock
Appreciation Right, which approval or disapproval shall, unless otherwise
permitted by Rule 16b-3, be given after such election is made. The Company=s
obligation arising upon the exercise of a Stock Appreciation Right may be paid
currently or on a deferred basis with such interest or earnings equivalent as
the Committee may determine. No fractional Common Shares shall be issuable upon
exercise of a Stock Appreciation Right and, unless otherwise provided in the
applicable Agreement, the Participant will receive cash in lieu of fractional
shares. Unless the Committee shall otherwise determine, to the extent a Stock
Appreciation Right is exercisable, it will be exercised automatically for cash
on its expiration date.



               
7.4.         Limitations.    
The applicable Agreement may provide for a limit on the amount payable to a
Participant upon exercise of a Stock Appreciation Right at any time or in the
aggregate, for a limit on the number of Common Shares with respect to which a
Stock Appreciation Right may be exercised by the Participant in whole or in part
for cash during any specified period, for a limit on the time periods during
which a Participant may exercise a Stock Appreciation Right and for such other
limits on the rights of the Participant and such other terms and conditions of
the Stock Appreciation Right as the Committee may determine, including, without
limitation, a condition that the Stock Appreciation Right may be exercised only
in accordance with rules and regulations adopted by the Committee from time to
time. Unless otherwise so provided in the applicable Agreement, any such limit
relating to a Stock Appreciation Right shall not restrict the exercisability of
the related Option. Such rules and regulations may govern the right to exercise
Stock Appreciation Rights granted prior to the adoption or amendment such rules
and regulations as well as Stock Appreciation Rights granted thereafter.



               
7.5.         Exercise.    
For purposes of this Article 7, the date of exercise of a Stock Appreciation
Right shall mean the date on which the Company shall have received notice from
the Participant of the exercise of such Stock Appreciation Right.

ARTICLE 8. EFFECT OF TERMINATION OF EMPLOYMENT OR SERVICE
ON

OPTIONS AND STOCK APPRECIATION RIGHTS

               
8.1.         Termination of
Employment or Service Due to Death, Disability or Retirement.    
Unless otherwise provided in the applicable Agreement, in the event a
Participant's employment by or service with the Company is terminated by reason
of the Participant's death, Disability or Retirement, all outstanding Options
and Stock Appreciation Rights then held by the Participant to the extent that
they have vested on the date of termination shall continue to be immediately
exercisable in full and remain exercisable for a period of 90 days, with respect
to termination by reason of Retirement, and 1 year, with respect to termination
by reason of death or Disability; provided, however, that Options and Stock
Appreciation Rights may not be exercised after the expiration date of such
Option.



               
8.2.         Termination of
Employment or Service for Reasons Other than Death, Disability or Retirement.    
Except as otherwise provided elsewhere in



the Plan or as may be provided in the applicable Agreement, in
the event that a Participant's employment by or service with the Company is
terminated for any reason other than the Participant's death, Disability or
Retirement, all rights of the Participant under the Plan and any Agreements
evidencing an Option or a Stock Appreciation Right shall immediately terminate
without notice of any kind, and no Options then held by the Participant shall
thereafter be exercisable.



               
8.3.         Modification of Rights
upon Termination.     Notwithstanding the provisions of
this Article, upon a Participant's termination of employment by or service with
the Company the Committee may, in its sole discretion (which may be exercised
before or following such termination), cause Options and Stock Appreciation
Rights then held by such Participant to become exercisable in the manner
determined by the Committee; provided, however, that no Option shall be
exercisable after the expiration date thereof and any Incentive Stock Option
that remains unexercised more than 90 days following employment or service
termination by reason of Retirement or more than one year following employment
or service termination by reason of Disability shall thereafter be deemed to be
a Non-Statutory Option.



               
8.4.         Date of Employment or
Service Termination.     For purposes of the Plan, a
Participant's employment or service shall be deemed to have terminated on the
effective date of such termination as determined in accordance with the standard
practices of the Company; provided, however, that following a Change in Control
of the Company, such date of termination shall be no earlier than the last day
of the pay period covered by the Participant's final paycheck.



 

ARTICLE 9. RIGHTS OF ELIGIBLE RECIPIENTS AND PARTICIPANTS

               
9.1.         Employment or Service.    
Nothing in the Plan or in any Agreement evidencing an Option or a Stock
Appreciation Right shall expressly or impliedly interfere with or limit in any
way the right of the Company to terminate the employment or service of any
Eligible Recipient or Participant at any time, nor confer upon any Eligible
Recipient or Participant any right to continue in the employ or service of the
Company for any particular period of time, in any particular capacity or at any
particular level of compensation.

               
9.2.         Nontransferability.    
No right or interest of any Participant in an Option or a Stock Appreciation
Right prior to its exercise shall be assignable or transferable or subjected to
any lien, during the lifetime of the Participant, either voluntarily or
involuntarily, directly or indirectly, by operation of law or otherwise,
including, without limitation, execution, levy, garnishment, attachment, pledge,
divorce or bankruptcy. In the event of a Participant's death, a Participant's
rights and interest in Options shall be transferable by testamentary will or the
laws of descent and distribution, and payment of any amounts due under the Plan
shall be made to, and exercise of any Options (to the extent permitted under the
Plan) may be made by, the Participant's legal representatives, heirs or
legatees. If, in the opinion of the Committee, a person entitled to payments or
to exercise rights with respect to the Plan is disabled from caring for such
person's affairs because of mental condition or physical condition, payment due
such person may be made to, and such rights shall be exercised by, such person's
guardian, conservator or other legal personal representative upon furnishing the
Committee with evidence satisfactory to the Committee of such status.



               
9.3.         Non-Exclusivity of the
Plan; Effect on Other Benefits.     Nothing contained in
the Plan is intended to amend, modify or rescind any previously



approved compensation plans or programs entered into by the
Company. The Plan will be construed to be in addition to any and all such other
plans or programs. Neither the adoption of the Plan nor the submission of the
Plan to the Shareholders of the Company for approval will be construed as
creating any limitations on the power or authority of the Board to adopt such
additional or other compensation arrangements as the Board may deem necessary or
desirable.

ARTICLE 10. SHARE ISSUANCE AND TRANSFER RESTRICTIONS

               
10.1.         Share Issuances.    
Notwithstanding any other provision of the Plan or any agreements entered into
pursuant hereto, the Company shall not be required to issue or deliver any
certificate for Common Shares under the Plan (and an Option shall not be
considered to be exercised, notwithstanding the tender by the Participant of any
consideration therefor), unless and until each of the following conditions has
been fulfilled:



                               
(a) There shall be in effect with respect to such shares a registration
statement under the Securities Act and any applicable state securities laws if
the Committee, in its sole discretion, shall have determined to file, cause to
become effective and maintain the effectiveness of such registration statement;
or (ii) if the Committee has determined not to so register the Common Shares to
be issued under the Plan, (A) exemptions from registration under the Securities
Act and applicable state securities laws shall be available for such issuance
(as determined by counsel to the Company) and (B) there shall have been received
from the Participant (or, in the event of death or disability, the Participant's
heir(s) or legal representative(s)) any representations or agreements requested
by the Company in order to permit such issuance to be made pursuant to such
exemptions; and



                               
(b) There shall have been obtained any other consent, approval or permit from
any state or federal governmental agency which the Committee shall, in its sole
discretion upon the advice of counsel, deem necessary or advisable.



               
10.2.         Share Transfers.    
Common Shares issued under the Plan may not be sold, assigned, transferred,
pledged, encumbered or otherwise disposed of, whether voluntarily or
involuntarily, directly or indirectly, by operation of law or otherwise, except
pursuant to registration under the Securities Act and applicable state
securities laws or pursuant to exemptions from such registrations. The Company
may condition the sale, assignment, transfer, pledge, encumbrance or other
disposition of such shares not issued pursuant to an effective and current
registration statement under the Securities Act and all applicable state
securities laws on the receipt from the party to whom the Common Shares are to
be so transferred of any representations or agreements requested by the Company
to permit such transfer to be made pursuant to exemptions from registration
under the Securities Act and applicable state securities laws.



               
10.3.         Right of First Refusal.    
The applicable Agreement relating to any Option may contain such provisions as
the Committee shall determine to the effect that if a Participant elects to sell
all or any Common Shares that such Participant acquired upon the exercise of an
Option awarded under the Plan, then such Participant shall not sell such shares
unless such Participant shall have first offered in writing to sell such shares
to the Company at the lesser of (i) the Fair Market Value on a date specified in
such offer (which date shall be at least 3 business days and not more than 15
business days following the date of such offer) and (ii) the price at which the
Participant wishes to sell.



               
10.4.         Legends.



                               
(a) Unless a registration statement under the Securities Act is in effect with
respect to the issuance or transfer of Common Shares under the Plan, each
certificate representing any such shares shall be endorsed with a legend in
substantially the following form, unless counsel for the Company is of the
opinion as to any such certificate that such legend is unnecessary: 


  
    
      THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR ANY SECURITIES LAW OF ANY STATE OF
      THE UNITED STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
      TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
      PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE
      STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
      INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL
      RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

    

  



                               
(b) In the event that there exists a right of first refusal as contemplated by
Section 10.3, certificates representing shares issued upon exercise of Options
shall bear a restrictive legend to the effect that transferability of such
shares is subject to the restrictions contained in the Plan and the applicable
Agreement.



                               
(c) If the Participant is the party to a buy-sell agreement with the Company,
each certificate representing Common Shares issued or transferred under the Plan
shall be endorsed with a legend in substantially the following form, unless
counsel for the Company is of the opinion as to any such certificate that such
legend is unnecessary:


  
    
      IN ADDITION, THE SALE, TRANSFER, ENCUMBRANCE,
      HYPOTHECATION, GIFT OR OTHER DISPOSITION OR ALIENATION OF SUCH SHARES OR
      ANY INTEREST THEREIN IS RESTRICTED BY AND SUBJECT TO THE TERMS OF A
      SHAREHOLDER PURCHASE AGREEMENT, A COPY OF WHICH MAY BE INSPECTED AT THE
      PRINCIPAL OFFICE OF THE COMPANY AND ALL OF THE PROVISIONS OF WHICH ARE
      INCORPORATED IN THIS CERTIFICATE BY REFERENCE. BY ACCEPTING THE SHARES OF
      STOCK EVIDENCED BY THIS CERTIFICATE, THE HOLDER AGREES TO BE BOUND BY THE
      TERMS OF SAID AGREEMENT.

    

  



                               
(d) The Committee, in its sole discretion, may endorse certificates representing
shares issued pursuant to the exercise of Incentive Stock Options with a legend
in substantially the following form:




  
    
      THE SALE, TRANSFER, ENCUMBRANCE, HYPOTHECATION, GIFT OR
      OTHER DISPOSITION OR ALIENATION OF SUCH SHARES OR ANY INTEREST THEREIN OF
      THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
      ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED OF ON OR BEFORE THE
      INCENTIVE STOCK OPTION HOLDING PERIODS WITHOUT THE PRIOR WRITTEN CONSENT
      OF THE COMPANY.

    

  



ARTICLE 11. CHANGE IN CONTROL

               
11.1.         Change in Control.    
For purposes of this Article, "Change in Control" means any one or more of the
following events: (a) the sale, lease, exchange or other transfer of all or
substantially all of the assets or business of the Company (in one transaction
or in a series of related transactions) to any Person; (b) the approval by the
Shareholders of the Company of any plan or proposal for the liquidation or
dissolution of the Company; or (c) a change in control of the Company of a
nature that would be required to be reported (assuming such event has not been
"previously reported") pursuant to Section 13 or 15(d) of the Exchange Act,
regardless of whether the Company is then subject to such reporting requirement;
provided, however, that, without limitation, such a Change in Control shall be
deemed to have occurred at such time as any Person is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 50% or more of the Common Shares or of the combined voting power
of the Company's outstanding securities ordinarily having the right to vote at
elections of directors.



               
11.2.         Acceleration of Vesting.    
If a Change in Control of the Company shall occur, then, without any further
action by the Committee or the Board, all outstanding Options and Stock
Appreciation Rights which have been outstanding for at least 6 months shall
become immediately exercisable in full and shall remain exercisable during the
remaining term thereof, regardless of whether the Participants to whom such
Options and Stock Appreciation Rights have been granted remain employed by the
Company (but subject always to Article 8). Notwithstanding anything contained in
the Plan to the contrary, the foregoing sentence shall not be applicable if
provision shall be made in connection with the Change in Control for the
assumption of outstanding Options by, or the substitution for such Options of,
new options covering the stock of the surviving successor or purchasing
corporation or a parent or subsidiary thereof, with appropriate adjustments as
to the number, kind and option prices of shares subject to such options;
provided, however, that in the case of Incentive Stock Options, the Committee
shall, to the extent not inconsistent with the best interest of the Company
(such best interest to be determined in good faith by the Board in its sole
discretion), use its best efforts to ensure that any such assumption or
substitution will not constitute a modification, extension or renewal of the
Incentive Stock Options within the meaning of Section 425(h) of the Code and the
regulations promulgated by the Treasury Department thereunder.



               
11.3.         Limitation on Change in
Control Payments.     Notwithstanding anything in this
Article above to the contrary, if, with respect to a Participant, acceleration
of the vesting of an Option or a Stock Appreciation Right as provided above or
the payment of cash in exchange for an Option or a Stock Appreciation Right as
provided above (which acceleration or payment could be deemed a payment within
the meaning of Section 280G of the Code), together with any other



payments which such Participant has the right to receive from
the Company or any corporation which is a member of an "affiliated group" (as
defined in Section 1504(a) of the Code without regard to Section 1504(b) of the
Code) of which the Company is a member, would constitute an "excess parachute
payment" (as defined in Section 28OG of the Code), then the payments to such
Participant shall be reduced to the largest amount as will result in no portion
of such payments being subject to the excise tax imposed by Section 4999 of the
Code; provided, however, that the determination as to whether any reduction in
such payments under the Plan pursuant to this provision is necessary and, if so,
which payment or payments will be reduced, shall be made by a nationally
recognized accounting firm selected by the Participant and reasonably acceptable
to the Company, and such determinations shall be conclusive and binding on the
Company and the Participant with respect to its treatment of the payments for
tax reporting purposes.

ARTICLE 12. RIGHT TO WITHHOLD, PAYMENT OF WITHHOLDING TAXES



               
The Company is entitled to (a) withhold and deduct from future wages of the
Participant (or from other amounts which may be due and owing from the
Participant to the Company), or make other arrangements for the collection of,
all legally required amounts necessary to satisfy any and all federal, state and
local withholding and employment-related tax requirements (i) attributable to
the grant or exercise of an Option or a Stock Appreciation Right or to a
"disqualifying disposition" of Common Shares acquired upon exercise of an
Incentive Stock Option or (ii) otherwise incurred with respect to the Plan, an
Option or a Stock Appreciation Right, or (b) require the Participant promptly to
remit the amount of such tax requirements to the Company before taking any
action with respect to an Option.

 

ARTICLE 13. AMENDMENT, MODIFICATION AND TERMINATION



               
The Board may suspend or terminate the Plan or any portion thereof at any time,
and may amend the Plan from time to time in such respects as the Board may deem
advisable in order that Options under the Plan shall conform to any change in
applicable laws or regulations or in any other respect the Board may deem to be
in the best interests of the Company; provided, however, that no such amendment
shall be effective, without approval of the Shareholders of the Company, if
Shareholder approval of the amendment is then required pursuant to Rule 16b-3
under the Exchange Act or any successor rule or Section 422 of the Code or under
the applicable rules, regulations or requirements of any securities exchange. No
termination, suspension or amendment of the Plan shall alter or impair any
outstanding Options without the consent of the Participant affected thereby;
provided, however, that this sentence shall not impair the right of the
Committee to take whatever action it deems appropriate under the Plan.

 

ARTICLE 14. EFFECTIVE DATE OF THE PLAN

               
14.1.         Effective Date.    
The Plan is effective as of June 27, 2002, the date it was adopted by the Board,
subject to the approval of the Shareholders of the Company; provided, however,
that if approval of the Plan is not received by the Shareholders of the Company
within 12 months of the foregoing effective date of the Plan, then no Incentive
Stock Options shall be issued under the Plan.



               
14.2.         Duration of the Plan.    
The Plan shall terminate at midnight (local Vancouver time) on June 26, 2003,
and may be terminated prior thereto by Board action, and no Option shall be
granted after such termination. Notwithstanding the foregoing, no Incentive
Stock Options shall be granted after the expiration of 10 years from the earlier
of the date of adoption of the Plan or the date of Shareholder approval. Options
outstanding at Plan termination may continue to be exercised in accordance with
their terms.

ARTICLE 15. MISCELLANEOUS

               
15.1.         Construction and
Headings.     The use of a masculine gender herein shall
also include within its meaning the feminine, and the singular may include the
plural, and the plural may include the singular, unless the context clearly
indicates to the contrary. The headings of the Articles, Sections and their
subparts in the Plan are for convenience of reading only and are not meant to be
of substantive significance and shall not add or detract from the meaning of
such Article, Section or subpart.

               
15.2.         Expenses of
Administration.     Any and all expenses of
administering the Plan shall be borne by the Company.

               
15.3.         Public Policy.    
No person shall have any claim or right to receipt of an Option if, in the
opinion of counsel to the Company, such receipt conflicts with law or is opposed
to governmental or public policy.



               
15.4.         Governing Law.    
The rights and obligations of any and all persons having or claiming to have an
interest herein or hereunder or under any Option Agreement shall be subject to
all applicable federal, state, provincial and foreign laws, rules and
regulations, the rules and regulations of any stock exchange on which the Common
Shares are listed for trading and to such approvals by any regulatory or
governmental agency as may, in the opinion of counsel to the Corporation, be
required.



               
15.5.         Successors and Assigns.    
The Plan shall be binding upon and inure to the benefit of the successors and
permitted assigns of the Company, including, without limitation, whether by way
or merger, consolidation, operation of law, assignment, purchase or other
acquisition of substantially all of the assets or business of the Company, and
any and all such successors and assigns shall absolutely and unconditionally
assume all of the Company's obligations hereunder.



               
15.6.         Survival of Provisions.    
The rights, remedies, agreements, obligations and covenants of the parties
contained in or made pursuant to the Plan, any agreement evidencing an Option
and any other notices or agreements in connection therewith, including, without
limitation, any notice of exercise of an Option, shall survive the execution and
delivery of such notices and agreements and the exercise of any Option, the
payment of the Option exercise price and the delivery and receipt of the Option
shares, and shall remain in full force and effect.



               
The Plan was duly adopted and approved by the Board of Directors of San Antonios
Resources Inc. as of the 28th day of August 2002.



 


  
    
      
        
          
            
              
                
                  By: /s/ Antonios Kripotos         
                   

                  

                  Title: President & CEO             
                   

                

              

            

          

        

      

    

  





               
The Plan was approved by the shareholders at the annual general meeting of San
Antonios Resources Inc. held September 23, 2002.