ex41.htm


    


    
      EXHIBIT 4.1

       

    

    


    American
Energy Production, Inc.

    


    2008
NON-QUALIFIED STOCK OPTION PLAN

    


    10,000,000
Shares

     

     

     

    
      
        
        

      

      
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    ARTICLE
1 - GENERAL

    


    


    1.1 Purpose of the
Plan.

    


    The
purpose of the American Energy Production, Inc. 2008 Non-Qualified Stock Option
Plan (the "Plan") is to assist American Energy Production, Inc. (“AENP”), a
Delaware corporation (the "Company"), in securing and retaining Key Participants
of outstanding ability by making it possible to offer them an increased
incentive to join or continue in the service of the Company and to increase
their efforts for its welfare through participation in the ownership and growth
of the Company.

    


    1.2
Definitions.

    


    “Acceleration Event"
means any event which in the opinion of the Board of Directors of the Company is
likely to lead to changes in control of share ownership of the Company, whether
or not such change of control actually occurs.

    


    "Award(s)" means an
Option granted to a Key Participant under the Plan.

    


    "Board of Directors"
or "Board"
means the Board of Directors of the Company.

    


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

    


    "Committee" means the
committee referred to in Section 1.3.

    


    "Common Stock" means
the Common Stock of the Company.

    


    "Fair Market Value"
means the closing price of the shares on the principal trading market on which
the Common Stock is primarily traded on the day on which such value is to be
determined or, if no shares were traded on such day, on the next preceding day
on which shares were traded, as reported by applicable trading exchange. If at
any time shares of Common Stock are not traded on an exchange or in the
over-the-counter market, Fair Market Value shall be the value determined by the
Board of Directors or Committee administering the Plan, taking into
consideration those factors which are deemed appropriate.

    


    "Grantee" means a Key
Participant to whom an Award is granted under the Plan.

    
      
        
        

      

      
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    "Incentive Shares"
means a share of Common Stock awarded to a Key Participant under Article VI
hereof on such terms as are determined by the Board or Committee.

    


    "Incentive Share
Agreement" means a written agreement in such form as the Board or
Committee, as applicable, shall approve that evidences the terms and conditions
of an award of Incentive Shares hereunder.

    


    "Key Participant"
means any person, including officers, directors, employees, agents and
consultants of the Company or any Subsidiary who are designated a Key
Participant by the Board or Committee, as applicable, and is or is expected to
be primarily responsible for the management, growth, or supervision of some part
or all of the business of the Company.  The power to determine who is
and who is not a Key Participant is reserved solely for the Board or
Committee.

    


    "Non-Qualified Stock
Option" means an option to purchase shares of Common Stock which is not
intended to qualify as an Incentive Stock Option as defined in Section 422 of
the Code.

    


    "Option" means a
Non-Qualified Stock Option.

    


    "Grantee" means a Key
Participant to whom an Option is granted under the Plan.

    


    "Parent" means any
corporation which qualifies as a parent of a corporation under the definition or
"parent corporation" contained in Section 425(f) of the Code.

    


    "Term" means the
period during which a particular Optionee may be exercised as determined by the
Board or Committee and as provided in the option agreement.

    


    1.3 Administration of the
Plan

    


    The Plan
shall be administered by a committee (the "Committee") appointed by the Board of
Directors consisting solely of two or more Non-Employee Directors, as defined in
Rule l6b-3 {see Section 1.10, below), or in the absence of an appointment of
such a Committee, the full Board shall serve as the Committee. Subject to the
control of the Board, and without limiting the control over decisions described
in Section 1.7, the Committee shall have the power to interpret and apply the
Plan and to make regulations for carrying out its purpose. More particularly,
the Committee shall determine which Key Participants shall be granted Options
and the terms of such grants. Determinations by the Committee under the Plan
(including, without limitation, determinations of the persons to receive Awards
the form, amount and timing of such Awards, and the terms and provisions of such
Awards and the agreements evidencing same) need not be uniform and may be made
by it selectively among persons who receive, or are eligible to receive, Awards
under the Plan, whether or not such persons are similarly situated. In serving
on the Committee, members thereof shall be considered to be acting in their
capacity as members of the Board of Directors and shall be entitled to all
rights of indemnification provided by the Bylaws of the Company or otherwise to
members of the Board of Directors.

    


    1.4 Shares subject to the
Plan

    


    The total
number of shares that may be purchased pursuant to Options under the Plan shall
not exceed 10,000,000 shares of Common Stock. Shares subject to the Options
which terminate or expire prior to exercise shall be available for future Awards
under the Plan without again being charged against the limitation of 10,000,000
shares set forth above. Shares issued pursuant to the plan may be either
un-issued shares of Common Stock or reacquired shares of Common stock held in
treasury.

    
      
        
        

      

      
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    1.5 Terms and Conditions of
Options

    


    All
Options shall be evidenced by agreements in such form as the Committee shall
approve from time to time subject to the provisions of Article II and Article
III, as appropriate, and the following provisions:

    


    (a)
Exercise. The Committee shall determine whether the Option shall be exercisable
in full at any time during the Term or in cumulative or non-cumulative
installments during the Term.

    


    (b)
Termination of Employment or Consultant/Contractor Relationship. An Optionee's
Option shall expire on the expiration of the Term specified in Section 2.1 or
3.1 as the case may be, or upon the occurrence of such events as are specified
in the agreement. In the event of exercise of the Option after termination of
employment or contactor relationship, the Optionee may exercise the Option only
with respect to the shares which could have been purchased by the Optionee at
the date of such termination, and then only for a period of 90 days thereafter.
However, the Committee may, but is not required to, waive any requirements made
pursuant to Section 1.5(b) so that some or all of the shares subject to the
Option may be exercised within the time limitation described in this subsection.
An Optionee’s employment or contractor relationship shall be deemed to terminate
on the last date for which he or she receives a regular wage, salary or contract
payment. Whether military, government or other service or other leave of absence
shall constitute a termination of employment shall be determined in each case by
the Committee at its discretion, and any determination by the Committee shall be
final and conclusive. A termination of employment or contractor relationship
shall not occur where the Optionee transfers from the Company to one of its
Subsidiaries or transfers from a Subsidiary to the Company.

    


    ‘(‘c)
Death or Disability. Upon termination of an Optionee's employment or contractor
relationship by reason of death or disability (as determined by the Committee
consistent with the definition of Section 422(c) (7) of the Code), the Option
shall expire on the earlier of the expiration of (i) the date specified in the
Option which in no event shall be later than twelve (12) months after the date
of such termination, or (ii) the Term specified in Section 2.1 or 3.1 as the
case may be. The Optionee or his or her Successor in interest, as the case may
be, may exercise the Option only as to the shares that could have been purchased
by the Optionee at the date of his or her termination of employment. However,
the Committee may, but is not required to, waive any requirements made pursuant
to Section 1.5(b) so that some or all of the shares subject to the Option maybe
exercised within the time limitation described in this subsection.

    


    (d)
Payment. Payment for shares as to which an Option is exercised shall be made in
such manner and at such time or times as shall be provided in the option
agreement, including cash, a cashless exchange,  Common Stock of the
Company which was previously acquired by the Optionee, or any combination
thereof. The Fair Market Value of the surrendered Common Stock as of the date of
exercise shall be determined in valuing Common Stock used in payment for
Options.

    


    Cashless
Exchange - The Optionee may direct a broker, to execute a cashless exercise
transaction whereby Options will be exercised, and shares of Common Stock
sufficient to cover the Option Price will be sold. The resulting shares of
Common Stock, net of the shares sold to cover the Option Price, will be issued
to the Optionee. The broker will remit the Option Price to the Company.
Alternatively, the Optionee may direct the broker to sell all shares of Common
Stock subject to the Options exercised, to withhold and remit to the Company the
Option Price, and to remit the sales proceeds, net of the above to the Optionee
in cash.

    However,
a cashless exercise by a director or executive officer of the Company that
involves or may involve a direct or indirect extension of credit or arrangement
of an extension of credit by the Company in violation of section 402(a) of the
Sarbanes-Oxley Act (codified as Section 13(k) of the Securities Exchange Act of
1934, 15 U.S.C. § 78m(k)) shall be prohibited.

    


    (e)
Non-transferability. No Option granted under the Plan shall be transferable
other than by will or by the laws of decent and distribution. During the
lifetime of the Optionee, an Option shall be exercisable only by the
Optionee.

    


    (f)
Additional Provisions. Each option agreement may contain such other terms and
conditions not inconsistent with the provisions of the Plan, including the award
of cash amounts, as the Committee may deem appropriate from time to
time.

    
      
        
        

      

      
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    1.6 Stock Adjustments:
Mergers

    


    (a)
General. Notwithstanding Section lA, in the event the outstanding shares are
increased or decreased or changed into or exchanged for a different number of
kind of shares or other securities of the Company or of any other corporation by
reason or any merger, sale of stock, consolidation, liquidation,
re-capitalization, re-classification, stock split up, combination of shares,
stock dividend, or transaction having similar effect, the total number of shares
set forth in Section 1.4 shall be proportionately and appropriately adjusted by
the Committee.

    


    (b)
Options. Following a transaction described in subsection (a) above, if the
Company continues in existence, the number and kind of shares that are subject
to any Option and the option price per share shall be proportionately and
appropriately adjusted without any change in the aggregate price to be paid
therefore upon exercise of the Option. If the Company will not remain in
existence or substantially all of its voting Common Stock will be purchased by a
single purchaser or group or purchasers acting together, then the Committee may
(i) declare that all Options shall terminate thirty (30) days after the
Committee gives written notice to all Grantees of their immediate right to
exercise all Options then outstanding (without regard to limitations on exercise
otherwise contained in the Options), or (ii) notify all Grantees that all
Options granted under the Plan shall apply with appropriate adjustments as
determined by the Committee to the securities of the successor corporation to
which holders of the numbers of shares subject to such Options would have been
entitled, or (iii) take action that is some combination of aspects of (i) and
(ii). The determination by the Committee as to the terms of any of the foregoing
adjustments shall be conclusive and binding. Any fractional shares resulting
from any of the foregoing adjustments under this section shall be disregarded
and eliminated.

    


    1.7 Acceleration
Event.

    


    If an
Acceleration Event occurs in the opinion of the Board of Directors, based on
circumstances known to it, the Board of Directors may, but is not obligated to,
direct the Committee to declare that any or all Options granted under the Plan
shall become exercisable immediately notwithstanding the provisions of the
respective agreements granting any such Award.

    


    1.8 Notification of
Exercise.

    


    Options
shall be exercised by written notice directed to the Secretary of the Company at
the principal executive offices of the Company. Such written notice shall be
accompanied by any payment required pursuant to Section l.5 (d). Exercise by an
Optionee's heir or the representative of his or her estate shall be accompanied
by evidence of his authority to so act in form reasonably by satisfactory to the
Company.

    


    1.9 Modification. Extension
and Renewal of Awards.

    


    Subject
to the terms and conditions and within the limitations of the Plan, the
Committee may modify, extend or renew outstanding Awards or accept the surrender
of outstanding Awards (to the extent not theretofore exercised) granted under
the Plan or under any other plan, of the Company or a Subsidiary, and authorize
the granting of new Awards pursuant to the Plan in substitution therefore, and
the substituted Awards may bear such different or additional terms and
conditions as the Committee shall deem appropriate within the limitations of the
Plan. Notwithstanding the foregoing, however, no modification of an Award shall,
without the consent of the Grantee holding the Award, adversely affect the
rights or obligations of such Grantee.

    


    1.10 Compliance with Rule 16
and Gramm-Leach-Bliley Act.

    


    (a)
Provisions and compliance. In the event that the Company's Stock is determined
to not be an "Exempt Security" as that term is defined in the Securities
Exchange Act of 1934, as amended, the Board then intends that the
provisions of the Plan and any Award shall comply in all respects with the terms
and conditions of Rule 16 under the Securities Exchange Act of 1934, as in
effect on January 1, 2001 and as amended, or any successor provisions, as it
relates to persons subject to the reporting requirements of Section 16(a) of
such Act. Any agreement granting an Award shall contain such provisions as are
necessary or appropriate to assure such compliance. To the extent that any
provision hereof is found not to be in compliance with such rule as it relates
to such Act, such provision shall be deemed to be modified so as to be in
compliance with such rule, or if such modification is not possible, shall be
deemed to be null and void as it relates to such Grantee.

    
      
        
        

      

      
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    (b) Profits from purchase and sale of
security within six months.
For the purpose of
preventing the unfair use of information which may have been obtained by such
beneficial owner, director, or officer by reason of his relationship to the
issuer, any profit realized by him from any purchase and sale, or any sale and
purchase, of any equity security of such issuer (other than an exempted
security) or a security-based swap agreement (as defined in section 206B of the
Gramm-Leach-Bliley Act) involving any such equity security within any period of
less than six months, unless such security or security- based swap agreement was
acquired in good faith in connection with a debt previously contracted, shall
inure to and be recoverable by the issuer, irrespective of any intention on the
part of such beneficial owner, director, or officer in entering into such
transaction of holding the security or security-based swap agreement purchased
or of not repurchasing the security or security-based swap agreement sold for a
period exceeding six months. Suit to recover such profit may be instituted at
law or in equity in any court of competent jurisdiction by the issuer, or by the
owner of any security of the issuer in the name and in behalf of the issuer if
the issuer shall fail or refuse to bring such suit within sixty days after
request or shall fail diligently to prosecute the same thereafter; but no such
suit shall be brought more than two years after the date such profit was
realized. This subsection shall not be construed to cover any transaction where
such beneficial owner was not such both at the time of the purchase and sale, or
the sale and purchase, of the security or security based swap agreement (as
defined in section 206B of the Gramm-Leach Bliley Act) involved, or any
transaction or transactions which the Commission by rules and regulations may
exempt as not comprehended within the purpose of this
subsection.

    


    ARTICLE
II – NON-QUALIFIED STOCK QPTIONS

    


    2.1 Terms and Conditions of
Options.

    


    In
addition to the requirement of Section 1.5, each Non-Qualified Stock Option
granted under the Plan shall be exercisable only during a Term fixed by the
Committee.

    


    2.2 Section 83(b)
Election.

    


    The
Company recognizes that certain persons who receive Non-Qualified Stock Options
may be subject to restrictions regarding their right to trade Common Stock under
applicable securities laws. Such may cause Optionee's exercising such Options
not to be taxable under the provisions of Section 83(c) of the Code.
Accordingly, Optionee's exercising such Non-Qualified Stock Options may consider
making an election to be taxed upon exercise of the Option under Section 83(Q)
of the Code and to effect such election will file such election with the
Internal Revenue Service within thirty (30) days of exercise of the Option and
otherwise in accordance with applicable Treasury Regulations.

    


    ARTICLE
III - ADDITIONAL PROVISIONS

    


    3.1 Compliance with Other
Laws and Regulations.

    


    The Plan,
the grant and exercise of Options hereunder, and the obligation of the Company
to sell and deliver shares under such Options, shall be subject to all
applicable Federal and state laws, rules, and regulations and to such approvals
by any government or regulatory agency as may be required. The Company shall not
be required to issue or deliver any certificates for shares of Common Stock
prior to (a) the listing of such shares on any stock exchange on which the
Common Stock may then be listed and (b) the completion of any registration or
qualification or exemption of such shares under any Federal or state law, or any
ruling or regulation of any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable.

    


    3.2
Amendments.

    


    The Board
of Directors may discontinue the Plan at any time, and may amend it from time to
time.  Other than as expressly permitted under the Plan, no
outstanding Award may be revoked or altered in a manner unfavorable to the
Grantee without the consent of the Grantee.

    
      
        
        

      

      
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    3.3 No Rights As
Shareholder.

    


    No
Grantee shall have any rights as a shareholder with respect to any share subject
to his or her Option prior to the date of issuance to him or her of a
certificate or certificates for such shares.

    


    3.4
Withholding.

    


    Whenever
the Company proposes or is required to issue or transfer shares of Common Stock
under the Plan, the Company shall have the right to require the Grantee to remit
to the Company an amount sufficient to satisfy any Federal, State or local
withholding tax liability in such form as the Company may determine or accept in
its sole discretion, including payment by surrender or retention of shares of
Common Stock prior to the delivery of any certificate or certificates for such
shares.

    


    3.5 Continued Employment Not
Presumed.

    


    This Plan
and any document describing this Plan and the grant of any Award hereunder shall
not give any Optionee or other Participant a right to continued employment or
directorship by the Company or its Subsidiaries or affect the right of the
Company or its Subsidiaries to terminate the employment or directorship of any
such person with or without cause.

    


    3.6 Effective Date:
Duration.

    


    The Plan
shall become effective as of September 30, 2008 pursuant to Board of Director
approval received on such date and shall expire on September 29, 2018. No Awards
may be granted under the Plan after September 29, 2018, but Awards granted on or
before that date may be exercised according to the terms of the related
agreements and shall continue to be governed by and interpreted consistent with
the terms hereof.

    


    Dated
this 30th day of
September 2008

    


    


    /s/
Charles Bitters

    Charles
Bitters

    Chief
Executive Officer

    
      
        
        

      

      
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