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**EXHIBIT 4.24** 

 

**2002 STOCK OPTION PLANAugust 28, 2002**

 

 

 

 

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**SAN ANTONIOS RESOURCES INC.2002 STOCK OPTION PLANARTICLE 1. ESTABLISHMENT AND PURPOSE**

               1.1.         Establishment.   San Antonios Resources Inc., a British Columbia company (the "Company") herebyestablishes a plan providing for long-term stock-based compensation incentiveawards for the performance by certain eligible individuals of services for theCompany. 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 itsShareholders by enabling the Company to attract and retain persons of ability toperform services for the Company by providing an incentive to such personsthrough equity participation in the Company and by rewarding such persons whocontribute to the achievement by the Company of its long-term economicobjectives. 

**ARTICLE 2. DEFINITIONS**

               The following terms shall have the meanings set forth below, unless the contextclearly otherwise requires:               2.1.         "Agreement" means a writtenstock option agreement and/or stock appreciation rights agreement entered intobetween the Company and a Participant relating to any options and/or stockrights granted to such Participant, as amended, supplemented, restated orreplaced from time to time.

               2.2.         "Board" means the board ofdirectors of the Company.               2.3.         "Change in Control" meansone or more of the events described in Section 11.1 of the Plan.               2.4.         "Code" means the InternalRevenue Code of 1986, as amended.               2.5.         "Committee" means thepersons administering the Plan, as provided in Section 3.1 of the Plan.               2.6.         "Common Shares" means thecommon shares in the capital stock of the Company, at no par value per share, orthe number and kind of shares of stock or other securities into which suchCommon Shares may be changed in accordance with Section 4.3 of the Plan.               2.7.         "Disability" means thedisability of the Participant as defined in the long-term disability plan of theCompany then covering the Participant or, if no such plan exists, the permanentand total disability of the Participant as defined in Section 22(e) of the Code.               2.8.         "Eligible Recipients" meansemployees, including, without limitation, officers and directors who are alsoemployees of the Company, upon whose

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judgment, initiative and efforts the Company is, or will become, largelydependent for the successful conduct of its business, including, withoutlimitation, individuals capable of making critical technical contributions tothe development of the products and services of the Company, individualsidentified as successor candidates for key management positions, and individualsessential 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 andother unrelated third persons, or, if an employee of the Company, the recipientof a Non-Statutory Stock Option pursuant to the applicable provisions of thePlan.               2.9.           "ExchangeAct" 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:

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(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 Participantpursuant to Article 6 of the Plan that qualifies as an incentive stock optionwithin the meaning of Section 422 of the Code.               2.12.         "Non-Statutory StockOption" or "NSO" means a right to purchase Common Shares granted to aParticipant pursuant to Article 6 of the Plan that does not qualify as anIncentive Stock Option.               2.13.         "Option" means anIncentive Stock Option or a Non-Statutory Stock Option.

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               2.14.         "Participant" (alsoreferred to as the "Optionee") means an Eligible Recipient selected bythe Committee from time to time during the term of the Plan to receive one ormore Options under the Plan.               2.15.         "Person" means anindividual, corporation, partnership, group, association or other "person" (assuch 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 sponsoredby the Company or a wholly owned subsidiary of the Company.               2.16.         "Retirement" meansthe normal and approved early retirement of the Participant pursuant to and inaccordance with the regular retirement/pension plan or practice of the Companythen covering the Participant.               2.17.         "Securities Act"means the Securities Act of 1933, as amended.               2.18.         "Stock AppreciationRight" means a stock appreciation right granted pursuant to Article 7 of thePlan.               2.19.         "Tax Date" meansthe date any withholding tax obligation arises under the Code for a Participantwith 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 Boardconsisting of not less than two persons; provided, however, that from and afterthe date on which the Company first registers a class of its equity securitiesunder Section 12 of the Exchange Act, the Plan shall be administered by theBoard in accordance with all applicable provisions of the Exchange Act and allreferences to "Committee" in this plan shall be deemed to mean the Board.Members of such a committee, if established, shall be appointed from time totime by the Board, shall serve at the pleasure of the Board and may resign atany time upon written notice to the Board. A majority of any such committeeshall constitute a quorum, and the act of a majority of a quorum shallconstitute the act of such committee. Action of such a committee may be takenwithout a meeting if unanimous written consent to such action is given. A memberof the committee may attend meetings in person or by means of telephone or otherelectronic communication whereby all committee members in attendance cansimultaneously hear each other. Any such committee shall keep minutes of itsmeetings or actions by written consent and shall provide copies thereof to theBoard to be kept with the corporate records of the Company.                3.2.         Authority of theCommittee.

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(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. 

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(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 ofshares of Common Shares that shall be reserved for issuance under the Plan shallbe 2,000,000 shares of Common Shares, subject to adjustment upon changes incapitalization of the Company as provided in Section 4.3 of the Plan. Themaximum number of shares authorized may also be increased from time to time byapproval of the Board and, if required pursuant to Rule 16b-3 under the ExchangeAct, Section 422 of the Code or the rules of any exchange or the NASD, theShareholders of the Company.               4.2.     Shares Available for Use.    Common Shares that may be issued upon the exercise of Options shall be appliedto reduce the maximum number of Common Shares remaining available for use underthe Plan. Any Common Shares that are subject to an Option (or any portionthereof) that lapses, expires or for any reason is terminated unexercised shallautomatically again become available for use under the Plan.               4.3.     Adjustments.     In theevent of (a) any reorganization, merger, consolidation, recapitalization,liquidation, reclassification, stock dividend, stock split, reverse stock splitor 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

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any other corporation whose performance is relevant to the grantor vesting of an Option, (b) any purchase, acquisition, sale or disposition of asignificant amount of assets or a significant business, any extraordinarydividend or any other similar transaction, or (c) any substitution by theCompany of Options for, or assumption by the Company of, options of any othercorporation, the Committee (or, if the Company is not the surviving corporationin any such transaction, the board of directors of the surviving corporation)shall make such adjustment as it shall in its sole discretion deem equitable andappropriate (which determination shall be conclusive) as to the number and kindof securities subject to and reserved under the Plan and, in order to preventdilution or enlargement of the rights of Participants, the number, kind andexercise price of securities subject to outstanding Options; provided, however,that in the case of Incentive Stock Options, the Committee shall, to the extentnot inconsistent with the best interest of the Company (such best interest to bedetermined in good faith by the Board in its sole discretion), use its bestefforts to ensure that no adjustment under this Section 4.3 would (i) constitutea modification, extension or renewal of such Incentive Stock Option within themeaning of Section 422 and Section 425 of the Code, and the regulationspromulgated by the Treasury Department thereunder, or (ii) under Section 422 ofthe 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 judgmentof the Committee, have performed, are performing or during the term of an Optionwill perform, vital services in the management, operation and development of theCompany and have significantly contributed, are significantly contributing orare expected to significantly contribute to the achievement of long-termcorporate economic objectives. Participants may be granted from time to time oneor more Options, as may be determined by the Committee in its sole discretion.The number, type, terms and conditions of Options granted to variousParticipants need not be uniform, consistent or in accordance with any plan,whether or not such Participants are similarly situated. Upon determination bythe Committee that an Option is to be granted to a Participant, written noticeshall be given such person, specifying the terms, conditions, rights and dutiesrelated thereto. Each Participant shall enter into an agreement with theCompany, in such form as the Committee shall determine and which is consistentwith the provisions of the Plan, specifying such terms, conditions, rights andduties. Options shall be deemed to be granted as of the date specified in thegrant resolution of the Committee, which date shall be the date of the relatedagreement with the Participant.               5.2.     Advisors.

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(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.

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    (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 suchOptions shall be evidenced by an Agreement containing such terms and conditions,consistent with the other provisions of the Plan, as shall be determined by theCommittee in its sole discretion. Without limiting the generality of theforegoing, the Committee may (vii) in the Agreement evidencing such Option,provide for the acceleration of the exercise date or dates of the subject Optionupon the occurrence of specified events, and/or (viii) at any time prior to thecomplete termination of an Option, accelerate the exercise date or dates of suchOption. The Committee may designate whether an Option is to be considered anIncentive Stock Option or Non-Statutory Stock Option; provided, however, that anIncentive Stock Option shall only be granted to a Participant who is an employeeof the Company or one of its subsidiaries. The terms of the Agreement relatingto a Non-Statutory Stock Option shall expressly provide that such Option shallnot be treated as an Incentive Stock Option. Notwithstanding anything else inthe Plan contained to the contrary, an Incentive Stock Option granted under thePlan to a Participant shall not be considered an Incentive Stock Option to theextent that the aggregate Fair Market Value on the date of grant of suchIncentive Stock Option of all stock with respect to which incentive stockoptions held by such Participant, whether under the Plan or under any otherplans of the Company or any of its subsidiaries, are exercisable for the firsttime 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, ifany, (which may be cumulative) as shall be determined by the Committee at thetime the Option is granted; provided, however, that except as may otherwise beprovided herein or unless otherwise determined by the Committee at or after itsdate of grant, no Option shall be exercisable prior to six months from its dateof grant. Upon completion of its exercise period, an Option, to the extent notthen exercised, shall expire.

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               6.3.         Exercise Price.

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(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.

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(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 OptionExercise.     An Option may be exercised by aParticipant in whole or in part from time to time, subject to the conditionscontained herein and in the agreement evidencing such Option, by delivery, inperson or through certified or registered mail, of written notice of exercise tothe Company at its principal executive office at [Address of Company],Attention: Corporate Secretary, and by paying in full the total Option exerciseprice for the Common Shares to be purchased. Such notice of exercise shall be ina form satisfactory to the Committee and shall specify the particular Option (orportion thereof) that is being exercised and the number of shares with respectto which the Option is being exercised. Subject to compliance with theapplicable provisions of the Plan, the exercise of the Option shall be deemedeffective upon receipt by the Company's corporate secretary of such notice ofexercise and payment complying with the terms of the Plan and the agreementevidencing the Option. As soon as practicable after the effective exercise ofthe Option, the Participant shall be recorded on the stock transfer books of theCompany as the owner of the shares purchased, and, subject to Section 10.1, theCompany shall deliver to the Participant one (1) or more duly issued stockcertificates evidencing such ownership. If a Participant exercises any Optionwith 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 shallcontinue until it expires or terminates in accordance with the terms. No 

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

               6.6.         Payment of ExercisePrice.     The total purchase price of the shares to bepurchased upon exercise of an Option shall be paid, to the extent permitted byapplicable statutes and regulations: (i) in cash (including check, bank draft ormoney order); (ii) in the discretion of the Committee, at the time of the grantof the Option (A) by delivery of a promissory note (containing such terms andconditions as the Committee may in its discretion determine), (B) whole CommonShares, or (C) the withholding of Common Shares issuable upon such exercise ofthe Option; or (iii) any combination of the foregoing methods of payment or suchother form of legal consideration that may be acceptable to the Committee andthat is permitted for the issuance of shares under applicable law. Indetermining whether or upon what terms and conditions a Participant will bepermitted to pay the purchase price of an Option in whole or in part in a formother than cash, the Committee may consider all relevant facts andcircumstances, including, without limitation, the tax and securities lawconsequences to the Participant and the Company and the financial accountingconsequences to the Company. The permitted method or methods of payment of theamounts payable for an exercise of an Option, if other than in cash, shall beset forth in the applicable Agreement, and may be subject to such conditions asthe Committee deems appropriate. Without limiting the generality of theforegoing, if a Participant is permitted to elect to have Common Shares issuableupon exercise of an Option withheld to pay all or any part of the amountspayable in connection with such exercise, then the Committee may reserve, in theapplicable Agreement, the sole discretion to approve or disapprove such electionat 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 CommonShares covered by an Option until the Participant shall have become the holderof record of such shares, and no adjustments shall be made for dividends orother distributions or other rights as to which there is a record date precedingthe date the Participant becomes the holder of record of such shares, except asthe Committee may determine pursuant to Section 4.3 of the Plan.               6.8.         Disposition of CommonShares Acquired Pursuant to the Exercise of Incentive Stock Options. Prior tomaking a disposition (as defined in Section 424(c) of the Code) of any CommonShares acquired pursuant to the exercise of an Incentive Stock Option grantedunder the Plan before the expiration of two (2) years after its date of grant orbefore the expiration of one (1) year after its date of exercise and the date onwhich such Common Shares were transferred to the Participant pursuant toexercise of the Option, the Participant shall send written notice to the Companyof the proposed date of such disposition, the number of shares to be disposedof, the amount of proceeds to be received from such disposition and any otherinformation relating to such disposition that the Company may reasonablyrequest. The right of a Participant to make any such disposition shall beconditioned on the receipt by the Company of all amounts necessary to satisfyany Federal, state or local withholding and employment related tax requirementsattributable to such disposition. The Committee shall have the right, in itssole discretion, to endorse the certificates representing such shares with alegend restricting transfer (and to cause a stop transfer order to be enteredwith the Company's transfer agent) until such time as the Company receives theamounts necessary to satisfy such withholding and employment-related taxrequirements or until the later

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of the expiration of 2 years from the date of grant of suchIncentive Stock Option and 1 year from its date of exercise and the date onwhich such shares were transferred to the Participant pursuant to the exerciseof the Option.               6.9.         Aggregate Limitation ofStock Subject to Incentive Stock Options.     To theextent that the aggregate Fair Market Value (determined as of the date anIncentive Stock Option is granted) of the Common Shares with respect to whichIncentive Stock Options (within the meaning of Section 422 of the Code),including Incentive Stock Options, are exercisable for the first time by aParticipant during any calendar year (under the Plan and any other incentivestock option plans of the Company) exceeds $100,000 (or such other amount as maybe prescribed by the Code from time to time), such excess Options shall betreated as Non-Statutory Stock Options. The determination shall be made bytaking Incentive Stock Options into account in the order in which they weregranted. If such excess only applies to a portion of an Incentive Stock Option,then the Committee, in its discretion, shall designate which shares shall betreated 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 begranted by the Committee to a Participant to whom an Option is granted. EachStock Appreciation Right shall relate to a specific Option under the Plan (theArelated Option@). Subject to the limitations of the Plan, Stock AppreciationRights shall be exercisable in whole or in part upon notice to the Company uponsuch terms and conditions as are provided in the applicable Agreement.               7.2.         Stock AppreciationRights to be Tandem.     A Stock Appreciation Rightshall be granted concurrently with the grant of the related Option, except wherethe related Option is a Non-Statutory Option in which case it may be awardedeither concurrently with the grant of the related Option or at any timethereafter prior to the complete exercise, termination, expiration orcancellation of the related Option. Stock Appreciation Rights shall beexercisable only at the time and to the extent that the related Option isexercisable (and may be subject to such additional limitations on exercisabilityas the Agreement may provide), and in no event after the complete termination orfull exercise of the related Option. Upon the exercise or termination of therelated Option, the Stock Appreciation Right with respect thereto shall becanceled automatically to the extent of the number of Common Shares with respectto which the related Option was so exercised or terminated. Upon the exercise ofa Stock Appreciation Right, the related Option shall be canceled automaticallyto the extent of the number of Common Shares with respect to which such StockAppreciation Right was so exercised. Subject to the limitations of the Plan,upon the exercise of a Stock Appreciation Right, the Participant thereof shallbe entitled to receive from the Company, for each share of the Company withrespect 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 excessof the Fair Market Value of a share of such series of Common Shares on the dateof 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 measuredfrom a base higher than the related Option purchase price.               7.3.         Consideration.    The consideration to be received upon the exercise of a Stock Appreciation Rightby the Participant shall be paid in cash, Common Shares (valued at Fair MarketValue on the date of exercise of such Stock Appreciation Right) or a combinationof cash and shares of such series of

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Common Shares as specified in the applicable Agreement, or, ifso provided in the applicable Agreement, either as determined by the Committeein its sole discretion or as elected by the Participant, provided that theCommittee shall have the sole discretion to approve or disapprove the electionby a Participant to receive cash in full or partial settlement of a StockAppreciation Right, which approval or disapproval shall, unless otherwisepermitted by Rule 16b-3, be given after such election is made. The Company=sobligation arising upon the exercise of a Stock Appreciation Right may be paidcurrently or on a deferred basis with such interest or earnings equivalent asthe Committee may determine. No fractional Common Shares shall be issuable uponexercise of a Stock Appreciation Right and, unless otherwise provided in theapplicable Agreement, the Participant will receive cash in lieu of fractionalshares. Unless the Committee shall otherwise determine, to the extent a StockAppreciation Right is exercisable, it will be exercised automatically for cashon its expiration date.               7.4.         Limitations.    The applicable Agreement may provide for a limit on the amount payable to aParticipant upon exercise of a Stock Appreciation Right at any time or in theaggregate, for a limit on the number of Common Shares with respect to which aStock Appreciation Right may be exercised by the Participant in whole or in partfor cash during any specified period, for a limit on the time periods duringwhich a Participant may exercise a Stock Appreciation Right and for such otherlimits on the rights of the Participant and such other terms and conditions ofthe Stock Appreciation Right as the Committee may determine, including, withoutlimitation, a condition that the Stock Appreciation Right may be exercised onlyin accordance with rules and regulations adopted by the Committee from time totime. Unless otherwise so provided in the applicable Agreement, any such limitrelating to a Stock Appreciation Right shall not restrict the exercisability ofthe related Option. Such rules and regulations may govern the right to exerciseStock Appreciation Rights granted prior to the adoption or amendment such rulesand 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 AppreciationRight shall mean the date on which the Company shall have received notice fromthe Participant of the exercise of such Stock Appreciation Right.

**ARTICLE 8. EFFECT OF TERMINATION OF EMPLOYMENT OR SERVICEONOPTIONS AND STOCK APPRECIATION RIGHTS**

               8.1.         Termination ofEmployment or Service Due to Death, Disability or Retirement.    Unless otherwise provided in the applicable Agreement, in the event aParticipant's employment by or service with the Company is terminated by reasonof the Participant's death, Disability or Retirement, all outstanding Optionsand Stock Appreciation Rights then held by the Participant to the extent thatthey have vested on the date of termination shall continue to be immediatelyexercisable in full and remain exercisable for a period of 90 days, with respectto termination by reason of Retirement, and 1 year, with respect to terminationby reason of death or Disability; provided, however, that Options and StockAppreciation Rights may not be exercised after the expiration date of suchOption.               8.2.         Termination ofEmployment or Service for Reasons Other than Death, Disability or Retirement.    Except as otherwise provided elsewhere in

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the Plan or as may be provided in the applicable Agreement, inthe event that a Participant's employment by or service with the Company isterminated for any reason other than the Participant's death, Disability orRetirement, all rights of the Participant under the Plan and any Agreementsevidencing an Option or a Stock Appreciation Right shall immediately terminatewithout notice of any kind, and no Options then held by the Participant shallthereafter be exercisable.               8.3.         Modification of Rightsupon Termination.     Notwithstanding the provisions ofthis Article, upon a Participant's termination of employment by or service withthe Company the Committee may, in its sole discretion (which may be exercisedbefore or following such termination), cause Options and Stock AppreciationRights then held by such Participant to become exercisable in the mannerdetermined by the Committee; provided, however, that no Option shall beexercisable after the expiration date thereof and any Incentive Stock Optionthat remains unexercised more than 90 days following employment or servicetermination by reason of Retirement or more than one year following employmentor service termination by reason of Disability shall thereafter be deemed to bea Non-Statutory Option.               8.4.         Date of Employment orService Termination.     For purposes of the Plan, aParticipant's employment or service shall be deemed to have terminated on theeffective date of such termination as determined in accordance with the standardpractices of the Company; provided, however, that following a Change in Controlof the Company, such date of termination shall be no earlier than the last dayof 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 StockAppreciation Right shall expressly or impliedly interfere with or limit in anyway the right of the Company to terminate the employment or service of anyEligible Recipient or Participant at any time, nor confer upon any EligibleRecipient or Participant any right to continue in the employ or service of theCompany for any particular period of time, in any particular capacity or at anyparticular level of compensation.

               9.2.         Nontransferability.    No right or interest of any Participant in an Option or a Stock AppreciationRight prior to its exercise shall be assignable or transferable or subjected toany lien, during the lifetime of the Participant, either voluntarily orinvoluntarily, 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'srights and interest in Options shall be transferable by testamentary will or thelaws of descent and distribution, and payment of any amounts due under the Planshall be made to, and exercise of any Options (to the extent permitted under thePlan) may be made by, the Participant's legal representatives, heirs orlegatees. If, in the opinion of the Committee, a person entitled to payments orto exercise rights with respect to the Plan is disabled from caring for suchperson's affairs because of mental condition or physical condition, payment duesuch person may be made to, and such rights shall be exercised by, such person'sguardian, conservator or other legal personal representative upon furnishing theCommittee with evidence satisfactory to the Committee of such status.               9.3.         Non-Exclusivity of thePlan; Effect on Other Benefits.     Nothing contained inthe Plan is intended to amend, modify or rescind any previously

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

**ARTICLE 10. SHARE ISSUANCE AND TRANSFER RESTRICTIONS**

               10.1.         Share Issuances.    Notwithstanding any other provision of the Plan or any agreements entered intopursuant hereto, the Company shall not be required to issue or deliver anycertificate for Common Shares under the Plan (and an Option shall not beconsidered to be exercised, notwithstanding the tender by the Participant of anyconsideration therefor), unless and until each of the following conditions hasbeen fulfilled:                               (a) There shall be in effect with respect to such shares a registrationstatement under the Securities Act and any applicable state securities laws ifthe Committee, in its sole discretion, shall have determined to file, cause tobecome effective and maintain the effectiveness of such registration statement;or (ii) if the Committee has determined not to so register the Common Shares tobe issued under the Plan, (A) exemptions from registration under the SecuritiesAct and applicable state securities laws shall be available for such issuance(as determined by counsel to the Company) and (B) there shall have been receivedfrom the Participant (or, in the event of death or disability, the Participant'sheir(s) or legal representative(s)) any representations or agreements requestedby the Company in order to permit such issuance to be made pursuant to suchexemptions; and                               (b) There shall have been obtained any other consent, approval or permit fromany state or federal governmental agency which the Committee shall, in its solediscretion 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 orinvoluntarily, directly or indirectly, by operation of law or otherwise, exceptpursuant to registration under the Securities Act and applicable statesecurities laws or pursuant to exemptions from such registrations. The Companymay condition the sale, assignment, transfer, pledge, encumbrance or otherdisposition of such shares not issued pursuant to an effective and currentregistration statement under the Securities Act and all applicable statesecurities laws on the receipt from the party to whom the Common Shares are tobe so transferred of any representations or agreements requested by the Companyto permit such transfer to be made pursuant to exemptions from registrationunder 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 asthe Committee shall determine to the effect that if a Participant elects to sellall or any Common Shares that such Participant acquired upon the exercise of anOption awarded under the Plan, then such Participant shall not sell such sharesunless such Participant shall have first offered in writing to sell such sharesto the Company at the lesser of (i) the Fair Market Value on a date specified insuch offer (which date shall be at least 3 business days and not more than 15business days following the date of such offer) and (ii) the price at which theParticipant wishes to sell.

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               10.4.         Legends.                               (a) Unless a registration statement under the Securities Act is in effect withrespect to the issuance or transfer of Common Shares under the Plan, eachcertificate representing any such shares shall be endorsed with a legend insubstantially the following form, unless counsel for the Company is of theopinion as to any such certificate that such legend is unnecessary: 

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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 bySection 10.3, certificates representing shares issued upon exercise of Optionsshall bear a restrictive legend to the effect that transferability of suchshares is subject to the restrictions contained in the Plan and the applicableAgreement.                               (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 Planshall be endorsed with a legend in substantially the following form, unlesscounsel for the Company is of the opinion as to any such certificate that suchlegend is unnecessary:

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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 representingshares issued pursuant to the exercise of Incentive Stock Options with a legendin substantially the following form:

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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 thefollowing events: (a) the sale, lease, exchange or other transfer of all orsubstantially all of the assets or business of the Company (in one transactionor in a series of related transactions) to any Person; (b) the approval by theShareholders of the Company of any plan or proposal for the liquidation ordissolution of the Company; or (c) a change in control of the Company of anature 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 bedeemed to have occurred at such time as any Person is or becomes the "beneficialowner" (as defined in Rule 13d-3 under the Exchange Act), directly orindirectly, of 50% or more of the Common Shares or of the combined voting powerof the Company's outstanding securities ordinarily having the right to vote atelections of directors.               11.2.         Acceleration of Vesting.    If a Change in Control of the Company shall occur, then, without any furtheraction by the Committee or the Board, all outstanding Options and StockAppreciation Rights which have been outstanding for at least 6 months shallbecome immediately exercisable in full and shall remain exercisable during theremaining term thereof, regardless of whether the Participants to whom suchOptions and Stock Appreciation Rights have been granted remain employed by theCompany (but subject always to Article 8). Notwithstanding anything contained inthe Plan to the contrary, the foregoing sentence shall not be applicable ifprovision shall be made in connection with the Change in Control for theassumption of outstanding Options by, or the substitution for such Options of,new options covering the stock of the surviving successor or purchasingcorporation or a parent or subsidiary thereof, with appropriate adjustments asto the number, kind and option prices of shares subject to such options;provided, however, that in the case of Incentive Stock Options, the Committeeshall, 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 solediscretion), use its best efforts to ensure that any such assumption orsubstitution will not constitute a modification, extension or renewal of theIncentive Stock Options within the meaning of Section 425(h) of the Code and theregulations promulgated by the Treasury Department thereunder.               11.3.         Limitation on Change inControl Payments.     Notwithstanding anything in thisArticle above to the contrary, if, with respect to a Participant, accelerationof the vesting of an Option or a Stock Appreciation Right as provided above orthe payment of cash in exchange for an Option or a Stock Appreciation Right asprovided above (which acceleration or payment could be deemed a payment withinthe meaning of Section 280G of the Code), together with any other

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payments which such Participant has the right to receive fromthe Company or any corporation which is a member of an "affiliated group" (asdefined in Section 1504(a) of the Code without regard to Section 1504(b) of theCode) of which the Company is a member, would constitute an "excess parachutepayment" (as defined in Section 28OG of the Code), then the payments to suchParticipant shall be reduced to the largest amount as will result in no portionof such payments being subject to the excise tax imposed by Section 4999 of theCode; provided, however, that the determination as to whether any reduction insuch 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 nationallyrecognized accounting firm selected by the Participant and reasonably acceptableto the Company, and such determinations shall be conclusive and binding on theCompany and the Participant with respect to its treatment of the payments fortax reporting purposes.

**ARTICLE 12. RIGHT TO WITHHOLD, PAYMENT OF WITHHOLDING TAXES**

               The Company is entitled to (a) withhold and deduct from future wages of theParticipant (or from other amounts which may be due and owing from theParticipant to the Company), or make other arrangements for the collection of,all legally required amounts necessary to satisfy any and all federal, state andlocal withholding and employment-related tax requirements (i) attributable tothe grant or exercise of an Option or a Stock Appreciation Right or to a"disqualifying disposition" of Common Shares acquired upon exercise of anIncentive Stock Option or (ii) otherwise incurred with respect to the Plan, anOption or a Stock Appreciation Right, or (b) require the Participant promptly toremit the amount of such tax requirements to the Company before taking anyaction 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 deemadvisable in order that Options under the Plan shall conform to any change inapplicable laws or regulations or in any other respect the Board may deem to bein the best interests of the Company; provided, however, that no such amendmentshall be effective, without approval of the Shareholders of the Company, ifShareholder approval of the amendment is then required pursuant to Rule 16b-3under the Exchange Act or any successor rule or Section 422 of the Code or underthe applicable rules, regulations or requirements of any securities exchange. Notermination, suspension or amendment of the Plan shall alter or impair anyoutstanding Options without the consent of the Participant affected thereby;provided, however, that this sentence shall not impair the right of theCommittee 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 Companywithin 12 months of the foregoing effective date of the Plan, then no IncentiveStock Options shall be issued under the Plan.

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               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 begranted after such termination. Notwithstanding the foregoing, no IncentiveStock Options shall be granted after the expiration of 10 years from the earlierof the date of adoption of the Plan or the date of Shareholder approval. Optionsoutstanding at Plan termination may continue to be exercised in accordance withtheir terms.

**ARTICLE 15. MISCELLANEOUS**

               15.1.         Construction andHeadings.     The use of a masculine gender herein shallalso include within its meaning the feminine, and the singular may include theplural, and the plural may include the singular, unless the context clearlyindicates to the contrary. The headings of the Articles, Sections and theirsubparts in the Plan are for convenience of reading only and are not meant to beof substantive significance and shall not add or detract from the meaning ofsuch Article, Section or subpart.

               15.2.         Expenses ofAdministration.     Any and all expenses ofadministering 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 theopinion of counsel to the Company, such receipt conflicts with law or is opposedto governmental or public policy.               15.4.         Governing Law.    The rights and obligations of any and all persons having or claiming to have aninterest herein or hereunder or under any Option Agreement shall be subject toall applicable federal, state, provincial and foreign laws, rules andregulations, the rules and regulations of any stock exchange on which the CommonShares are listed for trading and to such approvals by any regulatory orgovernmental agency as may, in the opinion of counsel to the Corporation, berequired.               15.5.         Successors and Assigns.    The Plan shall be binding upon and inure to the benefit of the successors andpermitted assigns of the Company, including, without limitation, whether by wayor merger, consolidation, operation of law, assignment, purchase or otheracquisition of substantially all of the assets or business of the Company, andany and all such successors and assigns shall absolutely and unconditionallyassume all of the Company's obligations hereunder.

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               15.6.         Survival of Provisions.    The rights, remedies, agreements, obligations and covenants of the partiescontained in or made pursuant to the Plan, any agreement evidencing an Optionand any other notices or agreements in connection therewith, including, withoutlimitation, any notice of exercise of an Option, shall survive the execution anddelivery of such notices and agreements and the exercise of any Option, thepayment of the Option exercise price and the delivery and receipt of the Optionshares, and shall remain in full force and effect.               The Plan was duly adopted and approved by the Board of Directors of San AntoniosResources Inc. as of the 28th day of August 2002. 

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By: /s/ Antonios Kripotos                                              Title: President & CEO                                

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

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