EX-4.2





Exhibit 4.2





AEI 2007 INCENTIVE PLAN




 









 








AEI 2007 INCENTIVE PLAN




	 	 	 	 
	SECTION	 	PAGE
	1. Purpose

	 	 	1
	2. Term

	 	 	1
	3. Definitions

	 	 	1
	4. Shares Available Under Plan

	 	 	3
	5. Stock Options

	 	 	4
	6. Appreciation Rights

	 	 	5
	7. Restricted Shares

	 	 	6
	8. Restricted Stock Units

	 	 	7
	9. Performance Shares and Performance Units

	 	 	8
	10. Annual Incentive Compensation

	 	 	9
	11. Transferability

	 	 	9
	12. Adjustments

	 	 	10
	13. Fractional Shares

	 	 	10
	14. Withholding Taxes

	 	 	10
	15. Administration of the Plan

	 	 	11
	16. Amendments and Other Matters

	 	 	11
	17. Governing Law

	 	 	12






 









 






AEI 2007 INCENTIVE PLAN




     Ashmore Energy International, a Cayman Islands corporation, establishes the AEI 2007 Incentive
Plan, effective as of January 23, 2007.



     1. Purpose. The purpose of the Plan is to attract and retain the best available talent and
encourage the highest level of performance by directors, executive officers and selected employees,
and to provide them incentives to put forth maximum efforts for the success of the Company’s
business, in order to serve the best interests of the Company and its shareholders.



     2. Term. The Plan will expire on January 23, 2017. No further Awards will be made under the
Plan on or after such tenth anniversary. Awards that are outstanding on the date the Plan
terminates will remain in effect according to their terms and the provisions of the Plan.



     3. Definitions. The following terms, when used in the Plan with initial capital letters, will
have the following meanings:




     (a) Appreciation Right means a right granted pursuant to Section 6.




     (b) Award means the payment of an annual incentive plan bonus pursuant to Section 10;
the grant of Appreciation Rights, Stock Options, Performance Shares, Performance Units or
Restricted Stock Units; or the grant or sale of Restricted Shares.




     (c) Board means the Board of Directors of the Company.




     (d) Code means the Internal Revenue Code of 1986, as in effect from time to time.




     (e) Committee means the Compensation Committee of the Board and, to the extent the
administration of the Plan has been assumed by the Board pursuant to Section 15, the Board.




     (f) Common Stock means the ordinary shares of the Company or any security into which
such Common Stock may be changed by reason of any transaction or event of the type
described in Section 12.




     (g) Company means Ashmore Energy International, a Cayman Islands corporation.




     (h) Date of Grant means the date specified by the Committee on which an Award will
become effective.




     (i) Deferral Period means the period of time during which Restricted Stock Units are
subject to deferral limitations under Section 8.




     (j) Director means a member of the Board who is not an employee of the Company or any
Subsidiary.



 









 






     (k)
Evidence of Award means an agreement, certificate, resolution or other type or
form of writing or other evidence approved by the Committee which sets forth the terms and
conditions of an Award. An Evidence of Award may be in any electronic medium, may be
limited to a notation on the books and records of the Company and need not be signed by a
representative of the Company or a Participant.




     (l) Grant Price means the price per share of Common Stock at which an Appreciation
Right is granted.




     (m) Management Objectives means the measurable performance objectives, if any,
established by the Committee for a Performance Period that are to be achieved with respect
to an Award. Management Objectives may be described in terms of company-wide objectives
(i.e., the performance of the Company and all of its Subsidiaries) or in terms of
objectives that are related to the performance of the individual Participant or of the
division, Subsidiary, department, region or function within the Company or a Subsidiary in
which the Participant receiving the Award is employed or on which the Participant’s efforts
have the most influence. The achievement of the Management Objectives established by the
Committee for any Performance Period will be determined without regard to any change in
accounting standards by the Financial Accounting Standards Board or any successor entity.




     If the Committee determines that, as a result of a change in the business, operations,
corporate structure or capital structure of the Company, or the manner in which the Company
conducts its business, or any other events or circumstances, the Management Objectives are
no longer suitable, the Committee may in its discretion modify such Management Objectives
or the related minimum acceptable level of achievement, in whole or in part, with respect
to a Performance Period as the Committee deems appropriate and equitable.




     (n) Market Value per Share means, at any date, (i) the closing sale price of the
Common Stock on that date (or, if there are no sales on that date, the last preceding date
on which there was a sale) on the principal national securities exchange or in the
principal market on or in which the Common Stock is traded and (ii) if the Common Stock is
not traded, the fair market per share of the Common Stock as determined by the Board.




     (o) Option Price means the purchase price per share payable on exercise of a Stock
Option.




     (p) Participant means (i) a person who is selected by the Committee to receive an
Award under the Plan and who at that time is an executive officer or other key employee of
the Company or any Subsidiary or (ii) a Director.




     (q) Performance Share means a bookkeeping entry that records the equivalent of one
share of Common Stock awarded pursuant to Section 9.




     (r) Performance Period means, with respect to an Award, a period of time within which
the Management Objectives relating to such Award are to be measured.



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Unless otherwise expressly provided in the Plan, the Performance Period for an Award will
be established by the Committee at the time of the Award.




     (s) Performance Unit means a unit equivalent to $1.00 (or such other value as the
Committee determines) granted pursuant to Section 9.




     (t) Plan means the AEI 2007 Incentive Plan, as amended from time to time.




     (u) Restricted Shares means shares of Common Stock granted or sold pursuant to Section
7 as to which neither the ownership restrictions nor the restrictions on transfer have
expired.




     (v) Restricted Stock Units means an Award pursuant to Section 8 of the right to
receive shares of Common Stock at the end of a specified Deferral Period.




     (w) Spread means the excess of the Market Value per Share on the date an Appreciation
Right is exercised over (i) the Option Price provided for in the Stock Option granted in
tandem with the Appreciation Right or (ii) if there is no tandem Stock Option, the Grant
Price provided for in the Appreciation Right, in either case multiplied by the number of
  shares of Common Stock in respect of which the Appreciation Right is exercised.




     (x) Stock Option means the right to purchase shares of Common Stock upon exercise of
an option granted pursuant to Section 5.




     (y) Subsidiary means (i) any corporation of which at least 50% of the combined voting
power of the then outstanding shares of voting stock is owned directly or indirectly by the
Company, (ii) any partnership of which at least 50% of the profits interest or capital
interest is owned directly or indirectly by the Company and (iii) any other entity of which
at least 50% of the total equity interest is owned directly or indirectly by the Company.



     4. Shares Available Under Plan. The aggregate number of shares of Common Stock that may be (i)
subject to an Award of Appreciation Rights or Stock Options or (ii) issued or transferred as
Restricted Shares and released from all restrictions or in payment of Performance Shares,
Performance Units, Restricted Stock Units or in payment of annual incentive plan bonuses will not
exceed in the aggregate 3,132,068 (three million one hundred thirty two thousand sixty-eight)
shares. Such shares may be shares of original issuance or treasury shares or a combination of the
foregoing. The number of shares of Common Stock available under this Section 4 will be subject to
adjustment as provided in Section 12 and will be further adjusted to include shares that relate to
Awards that expire or are forfeited. The number of shares of Common Stock available under this
Section 4 will not be adjusted to include (i) any shares withheld by, or tendered to, the Company
in payment of the Option Price with respect to a Stock Option or in satisfaction of the taxes
required to be withheld in connection with any Award granted under the Plan or (ii) any shares
subject to an Appreciation Right that are not transferred to a Participant upon exercise of the
Appreciation Right.



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     5. Stock Options. The Committee may from time to time authorize grants of options to any
Participant to purchase shares of Common Stock upon such terms and conditions as it may determine
in accordance with this Section 5. Each Participant who is a key employee of the Company or any
Subsidiary will be eligible to receive a grant of Stock Options that are intended to qualify as
incentive stock options within the meaning of Section 422 of the Code. Each grant of Stock Options
may utilize any or all of the authorizations, and will be subject to all of the requirements,
contained in the following provisions:




     (a) Each grant will specify the number of shares of Common Stock to which it relates.




     (b) Each grant will specify the Option Price, which will not be less than 100% of the
Market Value per Share on the Date of Grant.




     (c) Each grant will specify whether the Option Price will be payable (i) in cash or by
check acceptable to the Company, (ii) by the actual or constructive transfer to the Company
of shares of Common Stock owned by the Participant for at least six months (or, with the
consent of the Committee, for less than six months) having an aggregate Market Value per
Share at the date of exercise equal to the aggregate Option Price, (iii) with the consent
of the Committee, by authorizing the Company to withhold a number of shares of Common Stock
otherwise issuable to the Participant having an aggregate Market Value per Share on the
date of exercise equal to the aggregate Option Price or (iv) by a combination of such
methods of payment; provided, however, that the payment methods described in clauses (ii)
and (iii) will not be available at any time that the Company is prohibited from purchasing
or acquiring such shares of Common Stock.




     (d) To the extent permitted by law, any grant may provide for deferred payment of the
Option Price from the proceeds of sale through a bank or broker of some or all of the
shares to which such exercise relates.




     (e) Successive grants may be made to the same Participant whether or not any Stock
Options or other Awards previously granted to such Participant remain unexercised or
outstanding.




     (f) Each grant will specify the required period or periods of continuous service by
the Participant with the Company or any Subsidiary that are necessary before the Stock
Options or installments thereof will become exercisable. Except as may be approved by the
Committee (i) in connection with Stock Options granted to Directors solely in their
capacity as Directors or (ii) in the case of the death, disability or retirement of a
Participant, Stock Options will not be exercisable at a rate that is faster than one-third
of the shares of Common Stock subject to the Stock Options on each anniversary of the Date
of Grant unless specified Management Objectives are achieved.




     (g) Any grant may specify the Management Objectives that must be achieved as a
condition to the exercise of the Stock Options.




     (h) Any grant may provide for the earlier exercise of the Stock Options in the event
of a change in control or other similar transaction or event.



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     (i) Stock Options may be (i) options which are intended to qualify under particular
provisions of the Code, (ii) options which are not intended to so qualify or (iii)
combinations of the foregoing.




     (j) On or after the Date of Grant, the Committee may provide for the payment to the
Participant of dividend equivalents thereon in cash or Common Stock on a current, deferred
or contingent basis.




     (k) The Committee will have the right to substitute Appreciation Rights for
outstanding Options granted to one or more Participants, provided the terms and the
economic benefit of the substituted Appreciation Rights are at least equivalent to the
terms and economic benefit of such Options, as determined by the Committee in its
discretion.




     (l) Any grant may provide for the effect on the Stock Options or any shares of Common
Stock issued, or other payment made, with respect to the Stock Options of any conduct of
the Participant determined by the Committee to be injurious, detrimental or prejudicial to
any significant interest of the Company or any Subsidiary.




     (m) Each grant will be evidenced by an Evidence of Award, which may contain such terms
and provisions, consistent with the Plan, as the Committee may approve, including without
limitation provisions relating to the Participant’s termination of employment or other
termination of service by reason of retirement, death, disability or otherwise.



     6. Appreciation Rights. The Committee may also from time to time authorize grants to any
Participant of Appreciation Rights upon such terms and conditions as it may determine in accordance
with this Section 6. Appreciation Rights may be granted in tandem with Stock Options or separate
and apart from a grant of Stock Options. An Appreciation Right will be a right of the Participant
to receive from the Company upon exercise an amount which will be determined by the Committee at
the Date of Grant and will be expressed as a percentage of the Spread (not exceeding 100%) at the
time of exercise. An Appreciation Right granted in tandem with a Stock Option may be exercised only
by surrender of the related Stock Option. Each grant of an Appreciation Right may utilize any or
all of the authorizations, and will be subject to all of the requirements, contained in the
following provisions:




     (a) Each grant will state whether it is made in tandem with Stock Options and, if not
made in tandem with any Stock Options, will specify the number of shares of Common Stock in
respect of which it is made.




     (b) Each grant made in tandem with Stock Options will specify the Option Price and
each grant not made in tandem with Stock Options will specify the Grant Price, which in
either case will not be less than 100% of the Market Value per Share on the Date of Grant.




     (c) Any grant may provide that the amount payable on exercise of an Appreciation Right
may be paid (i) in cash, (ii) in shares of Common Stock having an aggregate Market Value
per Share equal to the Spread (or the designated percentage of



5









 






the Spread) or (iii) in a combination thereof, as determined by the Committee in its
discretion.




     (d) Any grant may specify that the amount payable to the Participant on exercise of an
Appreciation Right may not exceed a maximum amount specified by the Committee at the Date
of Grant.




     (e) Successive grants may be made to the same Participant whether or not any
Appreciation Rights or other Awards previously granted to such Participant remain
unexercised or outstanding.




     (f) Each grant will specify the required period or periods of continuous service by
the Participant with the Company or any Subsidiary that are necessary before the
Appreciation Rights or installments thereof will become exercisable, and will provide that
no Appreciation Rights may be exercised except at a time when the Spread is positive and,
with respect to any grant made in tandem with Stock Options, when the related Stock Options
are also exercisable. Except as may be approved by the Committee (i) in connection with
Appreciation Rights granted to Directors solely in their capacity as Directors or (ii) in
the case of the death, disability or retirement of a Participant, Appreciation Rights will
not be exercisable at a rate that is faster than one-third of the shares of Common Stock
subject to the Appreciation Rights on each anniversary of the Date of Grant unless
specified Management Objectives are achieved.




     (g) Any grant may specify the Management Objectives that must be achieved as a
condition to the exercise of the Appreciation Rights.




     (h) Any grant may provide for the earlier exercise of the Appreciation Rights in the
event of a change in control or other similar transaction or event.




     (i) On or after the Date of Grant, the Committee may provide for the payment to the
Participant of dividend equivalents thereon in cash or Common Stock on a current, deferred
or contingent basis.




     (j) Any grant may provide for the effect on the Appreciation Rights or any shares of
Common Stock issued, or other payment made, with respect to the Appreciation Rights of any
conduct of the Participant determined by the Committee to be injurious, detrimental or
prejudicial to any significant interest of the Company or any Subsidiary.




     (k) Each grant will be evidenced by an Evidence of Award, which may contain such terms
and provisions, consistent with the Plan, as the Committee may approve, including without
limitation provisions relating to the Participant’s termination of employment or other
termination of service by reason of retirement, death, disability or otherwise.



     7. Restricted Shares. The Committee may also from time to time authorize grants or sales to
any Participant of Restricted Shares upon such terms and conditions as it may determine in
accordance with this Section 7. Each grant or sale will constitute an immediate transfer of the
ownership of shares of Common Stock to the Participant in consideration of the



6









 







performance of services, entitling such Participant to voting and other ownership rights, but
subject to the restrictions set forth in this Section 7. Each such grant or sale may utilize any or
all of the authorizations, and will be subject to all of the requirements, contained in the
following provisions:




     (a) Each grant or sale may be made without additional consideration or in
consideration of a payment by the Participant that is less than the Market Value per Share
at the Date of Grant, except as may otherwise be required by applicable corporate law.




     (b) Each grant or sale may limit the Participant’s dividend rights during the period
in which the shares of Restricted Shares are subject to any such restrictions.




     (c) Each grant or sale will provide that the Restricted Shares will be subject, for a
period to be determined by the Committee at the Date of Grant, to one or more restrictions,
including without limitation a restriction that constitutes a “substantial risk of
forfeiture” within the meaning of Section 83 of the Code and the regulations of the
Internal Revenue Service under such section.




     (d) Any grant or sale may specify the Management Objectives that, if achieved, will
result in the termination or early termination of the restrictions
applicable to the shares.




     (e) Any grant or sale may provide for the early termination of any such restrictions
in the event of a change in control or other similar transaction or event.




     (f) Each grant or sale will provide that during the period for which such restriction
or restrictions are to continue, the transferability of the Restricted Shares will be
prohibited or restricted in a manner and to the extent prescribed by the Committee at the
Date of Grant (which restrictions may include without limitation rights of repurchase or
first refusal in favor of the Company or provisions subjecting the Restricted Shares to
continuing restrictions in the hands of any transferee).




     (g) Any grant or sale may provide for the effect on the Restricted Shares or any
shares of Common Stock issued free of restrictions, or other payment made, with respect to
the Restricted Shares of any conduct of the Participant determined by the Committee to be
injurious, detrimental or prejudicial to any significant interest of the Company or any
Subsidiary.




     (h) Each grant or sale will be evidenced by an Evidence of Award, which may contain
such terms and provisions, consistent with the Plan, as the Committee may approve,
including without limitation provisions relating to the Participant’s termination of
employment or other termination of service by reason of retirement, death, disability or
otherwise.



     8. Restricted Stock Units. The Committee may also from time to time authorize grants or sales
to any Participant of Restricted Stock Units upon such terms and conditions as it may determine in
accordance with this Section 8. Each grant or sale will constitute the agreement by the Company to
issue or transfer shares of Common Stock to the Participant in the



7









 







future in consideration of the performance of services, subject to the fulfillment during the
Deferral Period of such conditions as the Committee may specify. Each such grant or sale may
utilize any or all of the authorizations, and will be subject to all of the requirements, contained
in the following provisions:




     (a) Each grant or sale may be made without additional consideration from the
Participant or in consideration of a payment by the Participant that is less than the
Market Value per Share on the Date of Grant, except as may otherwise be required by
applicable corporate law.




     (b) Each grant or sale will provide that the Restricted Stock Units will be subject to
a Deferral Period, which will be fixed by the Committee on the Date of Grant, and any grant
or sale may provide for the earlier termination of such period in the event of a change in
control or other similar transaction or event.




     (c) During the Deferral Period, the Participant will not have any right to transfer
any rights under the Restricted Stock Units, will not have any rights of ownership in the
Restricted Stock Units and will not have any right to vote the Restricted Stock Units, but
the Committee may on or after the Date of Grant authorize the payment of dividend
equivalents on such shares in cash or Common Stock on a current, deferred or contingent
basis.




     (d) Any grant or sale may provide for the effect on the Restricted Stock Units or any
shares of Common Stock issued free of restrictions, or other payment made, with respect to
the Restricted Stock Units of any conduct of the Participant determined by the Committee to
be injurious, detrimental or prejudicial to any significant interest of the Company or any
Subsidiary.




     (e) Each grant or sale will be evidenced by an Evidence of Award, which will contain
such terms and provisions as the Committee may determine consistent with the Plan,
including without limitation provisions relating to the Participant’s termination of
employment or other termination of service by reason of retirement, death, disability or
otherwise.



     9. Performance Shares and Performance Units. The Committee may also from time to time
authorize grants to any Participant of Performance Shares and Performance Units, which will become
payable upon achievement of specified Management Objectives, upon such terms and conditions as it
may determine in accordance with this Section 9. Each such grant may utilize any or all of the
authorizations, and will be subject to all of the requirements, contained in the following
provisions:




     (a) Each grant will specify the number of Performance Shares or Performance Units to
which it relates.




     (b) The Performance Period with respect to each Performance Share and Performance Unit
will be determined by the Committee at the time of grant.



8









 






     (c) Each grant will specify the Management Objectives that, if achieved, will result
in the payment of the Performance Shares or Performance Units.




     (d) Each grant will specify the time and manner of payment of Performance Shares or
Performance Units which have become payable, which payment may be made in (i) cash, (ii)
shares of Common Stock having an aggregate Market Value per Share equal to the aggregate
value of the Performance Shares or Performance Units which have become payable or (iii) any
combination thereof, as determined by the Committee in its discretion at the time of
payment.




     (e) Any grant of Performance Shares may specify that the amount payable with respect
thereto may not exceed a maximum specified by the Committee on the Date of Grant. Any grant
of Performance Units may specify that the amount payable, or the number of shares of Common
Stock issued, with respect to the Performance Units may not exceed maximums specified by
the Committee on the Date of Grant.




     (f) On or after the Date of Grant, the Committee may provide for the payment to the
Participant of dividend equivalents on Performance Shares in cash or Common Stock on a
current, deferred or contingent basis.




     (g) Any grant may provide for the effect on the Performance Shares or Performance
Units or any shares of Common Stock issued, or other payment made, with respect to the
Performance Shares or Performance Units of any conduct of the Participant determined by the
Committee to be injurious, detrimental or prejudicial to any significant interest of the
Company or any Subsidiary.




     (h) Each grant will be evidenced by an Evidence of Award, which will contain such
terms and provisions as the Committee may determine consistent with the Plan, including
without limitation provisions relating to the payment of the Performance Shares or
Performance Units in the event of a change in control or other similar transaction or event
and provisions relating to the Participant’s termination of employment or other termination
of service by reason of retirement, death, disability or otherwise.



     10. Annual Incentive Compensation. The Committee may from time to time authorize the payment
of annual incentive compensation to a Participant in cash, Common Shares, Restricted Shares,
Restricted Stock Units or any combination of the foregoing, as determined by the Committee in its
discretion at the time of payment. Annual incentive compensation may be payable upon a
Participant’s achievement of Management Objectives specified by the Committee or upon such other
terms and conditions as the Committee may determine.



     11. Transferability. No Award may be sold, pledged, assigned or transferred in any manner
other than by will or the laws of descent and distribution, pursuant to a qualified domestic
relations order or, with the consent of the Committee, by gifts to family members of the
Participant, including to trusts in which family members of the Participant own more than 50% of
the beneficial interests, to foundations in which family members of the Participant or the



9









 







Participant controls the management of assets and to other entities in which more than 50% of the
voting interests are owned by family members of the Participant or the Participant. No Stock Option
or Appreciation Right granted to a Participant will be exercisable during the Participant’s
lifetime by any person other than the Participant or the Participant’s guardian or legal
representative or any permitted transferee.



     12. Adjustments.




     (a) The Committee will make or provide for such adjustments in (i) the maximum number
of shares of Common Stock specified in Section 4, (ii) the number of shares of Common Stock
covered by outstanding Stock Options, Appreciation Rights, Performance Shares and
Restricted Stock Units granted under the Plan, (iii) the Option Price or Grant Price
applicable to any Stock Options and Appreciation Rights, and (iv) the kind of shares
covered by any such Awards (including shares of another issuer), as the Committee in its
discretion, exercised in good faith, determines is equitably required to prevent dilution
or enlargement of the rights of Participants that otherwise would result from (x) any stock
dividend, stock split, combination of shares, recapitalization or other change in the
capital structure of the Company, or (y) any merger, consolidation, spin-off, split-off,
spin-out, split-up, reorganization, partial or complete liquidation or other distribution
of assets, issuance of rights or warrants to purchase securities, or (z) any other
corporate transaction or event having an effect similar to any of the foregoing. In the
event of any such transaction or event, the Committee, in its discretion, may provide in
substitution for any or all outstanding Awards such alternative consideration as it, in
good faith, may determine to be equitable in the circumstances and may require in
connection with such substitution the surrender of all Awards so replaced.




     (b) The Committee may accelerate the payment of, or vesting with respect to, any Award
under the Plan upon the occurrence of a transaction or event described in this Section 12;
provided, however, that in the case of any Award that constitutes a deferral of
compensation within the meaning of Section 409A of the Code, the Committee will not
accelerate the payment of the Award unless it determines in good faith that such
transaction or event satisfies the requirements of a change in control event under guidance
issued by the Secretary of the Treasury under Section 409A.



     13. Fractional Shares. The Company will not be required to issue any fractional share of
Common Stock pursuant to the Plan. The Committee may provide for the elimination of fractions or
for the settlement of fractions in cash.



     14. Withholding Taxes. To the extent that the Company is required to withhold federal, state,
local or foreign taxes in connection with any payment made or benefit realized by a Participant or
other person under the Plan, and the amounts available to the Company for such withholding are
insufficient, it will be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other person make arrangements satisfactory to the Company for
payment of the balance of such taxes required to be withheld. In addition, if permitted by the
Committee, the Participant or such other person may elect to have any withholding obligation of the
Company satisfied with shares of Common Stock that would



10









 







otherwise be transferred to the Participant or such other person in payment of the Participant’s
Award. However, without the consent of the Committee, shares of Common Stock will not be withheld
in excess of the minimum number of shares required to satisfy the Company’s withholding obligation.



     15. Administration of the Plan.




     (a) Unless the administration of the Plan has been expressly assumed by the Board
pursuant to a resolution of the Board, the Plan will be administered by the Committee. A
majority of the Committee will constitute a quorum, and the action of the members of the
Committee present at any meeting at which a quorum is present, or acts unanimously approved
in writing, will be the acts of the Committee.




     (b) The Committee has the full authority and discretion to administer the Plan and to
take any action that is necessary or advisable in connection with the administration of the
Plan, including without limitation the authority and discretion to interpret and construe
any provision of the Plan or of any agreement, notification or document evidencing an
Award. The interpretation and construction by the Committee of any such provision and any
determination by the Committee pursuant to any provision of the Plan or of any such
agreement, notification or document will be final and conclusive. No member of the
Committee will be liable for any such action or determination made in good faith.




     (c) It is the Company’s intention that any Award granted under the Plan that
constitutes a deferral of compensation within the meaning of Section 409A of the Code and
the guidance issued by the Secretary of the Treasury under Section 409A satisfy the
requirements of Section 409A. In granting such an Award, the Committee will use its best
efforts to exercise its authority under the Plan with respect to the terms of such Award in
a manner that the Committee determines in good faith will cause the Award to comply with
Section 409A and thereby avoid the imposition of penalty taxes and interest upon the
Participant receiving the Award.




     (d) If the administration of the Plan is assumed by the Board pursuant to Section
15(a), the Board will have the same authority, power, duties, responsibilities and
discretion given to the Committee under the terms of the Plan.



     16. Amendments and Other Matters.




     (a) The Plan may be amended from time to time by the Committee or the Board.




     (b) Neither the Committee nor the Board will authorize the amendment of any
outstanding Stock Option to reduce the Option Price without the further approval of the
shareholders of the Company. Furthermore, no Stock Option will be cancelled and replaced
with Stock Options having a lower Option Price without further approval of the shareholders
of the Company. The provisions of this Section 16(b) are intended to prohibit the repricing
of “underwater” Stock Options and will not be construed to prohibit the adjustments
provided for in Section 12.



11









 






     (c) The Plan may be terminated at any time by action of the Board. The termination of
the Plan will not adversely affect the terms of any outstanding Award.




     (d) The Plan does not confer upon any Participant any right with respect to
continuance of employment or other service with the Company or any Subsidiary, nor will it
interfere in any way with any right the Company or any Subsidiary would otherwise have to
terminate such Participant’s employment or other service at any time.



     17. Governing Law. The Plan, all Awards and all actions taken under the Plan and the Awards
will be governed in all respects in accordance with the laws of the State of Texas, including
without limitation, the Texas statute of limitations, but without giving effect to the principles
of conflicts of laws of such State.



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AMENDMENT
NO. 1




AEI 2007 INCENTIVE PLAN



WHEREAS, Ashmore Energy International, a Cayman Islands exempted company (the “Company”) maintains
the AEI 2007 Incentive Plan (the “Plan”); and



WHEREAS, the Company’s Compensation Committee (the “Committee”) wishes to make certain changes to
the Plan to expand the category of individuals eligible to receive grants of awards under the Plan,
having determined such changes to be in the best interests of the Company; and



WHEREAS,
Section 16(a) of the Plan permits the Committee to amend the Plan, and the Committee has
authorized this Amendment;



NOW, THEREFORE, the Plan is hereby amended as follows:




     1. Effective
as of August 23, 2007, Section 3(n) of the Plan is amended in its entirety to
read as follows:




“Market Value per Share means, at any date, (i) the closing sale price of the
Common Stock on that date (or, if there are no sales on that date, the last
preceding date on which there was a sale) on the principal national securities
exchange or in the principal market on or in which the Common Stock is traded and
(ii) if the Common Stock is not traded, the fair market per share of the Common
Stock as determined by the Board or the Committee.”



     2. Effective
as of August 23, 2007, Section 3(p) of the Plan is amended in its entirety to
read as follows:




“Participant means a person who is selected by the Committee to receive an Award
under the Plan and who at that time is (i) an officer or other employee of the
Company, (ii) a Director or (iii) a consultant or advisor of the Company if he or
she is a natural person that provides bona fide services to the Company or any of
its Subsidiaries and such 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 a market for the Company’s securities. For the avoidance of
doubt, any individual seconded to the Company as an officer or employee shall be
eligible to be a Participant.”



     IN WITNESS WHEREOF, the undersigned has executed this Amendment as conclusive evidence of its
adoption, as of this 23rd day of August, 2007.



	 	 	 	 	 
	 	ASHMORE ENERGY INTERNATIONAL

 	 
	 	By:  	BRENT DE JONG
 	 
	 	 	Name:  	Brent de Jong 	 
	 	 	Title:  	Chief Executive Officer