Exhibit
10.4
 IVANHOE ENERGY INC.
EMPLOYEES AND DIRECTORS EQUITY INCENTIVE PLAN
AMENDED AND RESTATED
MAY 29, 2008
 PART 1  INTRODUCTION
 1.1 Purpose
  1.2 Definitions
 (a)
    
    Affiliate has the meaning set forth in Section 1(2) of the Ontario Securities Act, as
amended, and includes those issuers that are similarly related, whether or not any of the
issuers are corporations, companies, partnerships, limited partnerships, trusts, income trusts
or investment trusts or any other organized entity issuing securities.
 (b)
    
    Associate has the meaning assigned to it in the Ontario Securities Act, as amended.
 (c)
    
    Board means the board of directors of the Company.
 (d)
    
    Blackout Period means a period in which the trading of Shares or other securities of the
Company is restricted under the Companys Corporate Disclosure, Confidentiality and Securities
Trading Policy, or under an insider trading policy or other policy of the Company then in
effect.
 (e)
    
    Code means the United States Internal Revenue Code of 1986, as amended.
 (f)
    
    Company means Ivanhoe Energy Inc., a company incorporated under the laws of the Yukon
Territory.
 (g)
    
    Committee has the meaning attributed thereto in Section 6.1.
 (h)
    
    Eligible Directors means the directors of the Company or any Affiliate thereof who are, as
such, eligible for participation in the Plan.
 (i)
    
    Eligible Employees means full time and part time employees (including employees who are
officers and directors) of the Company or any Affiliate thereof, whether or not they have a
written employment contract with the Company, determined by the Board, upon recommendation of
the Committee, to be employees, eligible for participation in the Plan. Eligible Employees
shall include Service Providers eligible for participation in the Plan as determined by the
Board.
 (j)
    
    Exchange Act means the United States Securities Exchange Act of 1934, as amended.




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(k)
    
    Fair Market Value means, with respect to a Share subject to Option, the weighted average
price of the Shares on the Stock Exchange for the five days on which Shares were traded
immediately preceding the date in respect of which Fair Market Value is to be determined. If
the Shares are not listed and posted for trading on a Stock Exchange on such day, the Fair
Market Value shall be such price per Share as the Board, acting in good faith, may determine.
 (l)
    
    Foreign Private Issuer has the meaning assigned to it in the rules promulgated under the
Exchange Act.
 (m)
    
    Insider has the meaning assigned to it in the Ontario Securities Act, as amended, and also
includes an Associate or Affiliate of any person who is an Insider.
 (n)
    
    Option means an option granted under the terms of the Share Option Plan.
 (o)
    
    Option Period means the period during which an Option may be exercised.
 (p)
    
    Optionee means an Eligible Employee or Eligible Director to whom an Option has been granted
under the terms of the Share Option Plan.
 (q)
    
    Participant means, in respect of any Plan, an Eligible Employee or Eligible Director who
participates in such Plan.
 (r)
    
    Plan means, collectively the Share Option Plan, the Share Bonus Plan and the Share Purchase
Plan and Plan means any such plan as the context requires.
 (s)
    
    Service Provider means a person or company engaged to provide ongoing management or
consulting services for the Company or for any entity controlled by the Company.
 (t)
    
    Share Bonus Plan means the plan established and operated pursuant to Part 3 and Part 5
hereof.
 (u)
    
    Share Option Plan means the plan established and operated pursuant to Part 2 and Part 5
hereof.
 (v)
    
    Share Purchase Plan means the plan established and operated pursuant to Part 4 and Part 5
hereof.
 (w)
    
    Shares means the common shares of the Company.
 (x)
    
    Stock Exchange means the principal stock exchange upon which the Shares are listed or upon
which the Shares have been approved for listing.
 (y)
    
    U.S. Optionee has the meaning assigned to it in Section 2.14 of this Plan.
 PART 2  SHARE OPTION PLAN
 2.1 Participation
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2.2 Administration of Share Option Plan
  2.3 Price
  2.4 Grant of Option
   2.5 Terms of Options
   (a)
    
    at any time during the first year of the Option Period, the Optionee may purchase up to 33
1/3% of the total number of Shares reserved for issuance pursuant to his or her Option; and
 (b)
    
    at any time during each additional year of the Option Period the Optionee may purchase an
additional 33 1/3% of the total number of Shares reserved for issuance pursuant to his or her
Option plus any Shares not purchased in accordance with the preceding subsection (a) until, in
the third year of the Option Period, 100% of the Option will be exercisable.
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(a)
    
    in the case of an Eligible Employee, in the employ of the Company or an Affiliate and shall
have been continuously so employed since the grant of his Option, but absence on leave, having the
approval of the Company or such Affiliate, shall not be considered an interruption of employment
for any purpose of the Share Option Plan; or
 (b)
    
    in the case of an Eligible Director, a director of the Company or an Affiliate and shall have
been such a director continuously since the grant of his Option.
  2.6 Share Appreciation Right
  (a)
    
    subtracting the Option exercise price per Share from the Fair Market Value per Share on
the day immediately prior to the exercise of the Right and multiplying the remainder by the
number of Option Shares; and
 (b)
    
    dividing the product obtained under Section 2.6(a) by the Fair Market Value per Share
on the day immediately prior to the exercise of the Right.
  2.7 Lapsed Options
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2.8 Effect of Termination of Employment or Death
  (a)
    
    dies while employed by or while a director of the Company or its Affiliate, any Option held by
him at the date of death shall become exercisable in whole or in part, but only by the person or
persons to whom the Optionees rights under the Option shall pass by the Optionees will or
applicable laws of descent and distribution. Unless otherwise determined by the Board, on the
recommendation of the Committee, all such Options shall be exercisable only to the extent that the
Optionee was entitled to exercise the Option at the date of his death and only for six months after
the date of death or prior to the expiration of the Option Period in respect thereof, whichever is
sooner;
 (b)
    
    ceases to be employed by or act as a director of the Company or its Affiliate for cause, no
Option held by such Optionee will, unless otherwise determined by the Board, on the recommendation
of the Committee, be exercisable following the date on which such Optionee ceases to be so employed
or ceases to be a director, as the case may be; or
 (c)
    
    ceases to be employed by or act as a director of the Company or its Affiliate for any reason
other than cause then, unless otherwise determined by the Board, on the recommendation of the
Committee, any Option held by such Optionee at the effective date thereof shall become exercisable
in whole or in part for a period of up to six months thereafter, but in no event less than 30 days,
subject to the earlier expiration of the Option Period.
 2.9 Effect of Takeover Bid
  2.10 Effect of the Amalgamation or Merger
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2.11 Adjustment in Shares Subject to the Plan
  2.12 Loans to Employees
  2.13 Transfer of Options
  2.14 United States Residents
   (a)
    
    any director of the Company or one of its Affiliates who is a U.S. Optionee shall be ineligible
to vote upon the granting of such Option to themselves;
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(b)
    
    subject to Section 2.14(d), any Option granted under this Plan to a U.S. Optionee shall be an
incentive stock option within the meaning of Section 422 of the Code provided that the aggregate
Fair Market Value (determined as of the time the Option is granted) of the Shares with respect to
which incentive stock options are exercisable for the first time by such U.S. Optionee during any
calendar year under this Share Option Plan and all other stock option plans of the Company or its
Affiliates does not exceed US$100,000;
 (c)
    
    to the extent the aggregate Fair Market Value (determined as of the time the Option is granted)
of the Shares with respect to which incentive stock options are exercisable for the first time by
such U.S. Optionee during any calendar year under this Share Option Plan and all other stock option
plans of the Company or its Affiliates exceeds US$100,000, such Options shall be treated as
nonqualified stock options (i.e. Options which fail to qualify as incentive stock options within
the meaning of Section 422 of the Code) in accordance with Section 422(d) of the Code;
 (d)
    
    any U.S. Optionee who is a Service Provider or director (and who is not also an officer or
employee) of the Company or one of its Affiliates will be ineligible to receive incentive stock
options but will be permitted to receive nonqualified stock options pursuant to this Plan;
 (e)
    
    the purchase price for Shares under each Option granted to a U.S. Optionee pursuant to this
Plan shall be not less than the Fair Market Value of such Shares at the time the Option is granted;
 (f)
    
    if any U.S. Optionee to whom an Option is to be granted under this Plan is at the time of the
grant of such Option the owner of Shares possessing more than 10% of the total combined voting
power of all classes of shares of the Company or any of its Affiliates, then the following special
provisions shall be applicable to the Option granted to such individual:
 (i)
    
    the purchase price per Share subject to such Option shall not be less than 110%
of the Fair Market Value of one Share at the time of grant, provided however that this
requirement will not apply with respect to any Option granted under the Plan that is
subject to Section 2.14(c);
 (ii)
    
    for the purpose of this Section 2.14 only, the exercise period shall not exceed
five years from the date of grant, provided however that this requirement will not
apply with respect to any Option granted under the Plan that is subject to Section
2.14(c);
 (iii)
    
    notwithstanding Section 2.14(f)(i), in respect of California citizens or
residents, the purchase price per Share subject to such Option shall in no event be
less than 110% of the Fair Market Value of one Share at the time of grant;
 (g)
    
    no Option may be granted hereunder to a U.S. Optionee following the expiry of 10 years after
the date on which this Plan is adopted by the Board or the date this Plan is approved by the
shareholders of the Company, whichever is earlier; and
 (h)
    
    no Option granted to a U.S. Optionee under this Plan shall become exercisable unless and
until this Plan shall have been approved by the shareholders of the Company.
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PART 3  SHARE BONUS PLAN
 3.1 Participants
  3.2 Number of Shares
   3.3 Necessary Approvals
  PART 4  SHARE PURCHASE PLAN
 4.1 Participants
  4.2 Election to Participate in the Share Purchase Plan and Participants Contribution
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4.3 Companys Contribution
  4.4 Issue of Shares
   4.5 Delivery of Shares
  4.6 Effect of Termination of Employment or Death
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4.7 Effect of Amalgamation or Merger
  PART 5  GENERAL
 5.1 Number of Shares
  (a)
    
    that may be reserved for issuance to Insiders for options granted under the Plan (or when
combined with all of the Companys other security based compensation arrangements) shall not exceed
10% of the Companys outstanding issue from time to time;
 (b)
    
    that may be issued to Insiders for options granted under the Plan (or when combined with all of
the Companys other security based compensation arrangements) within any one-year period shall not
exceed 10% of the Companys outstanding issue from time to time; and
 (c)
    
    that may be issued to any one Insider and his or her Associates for options granted under the
Plan within any one-year period shall not exceed 5% of the Companys outstanding issue from time to
time.
   5.2 Transferability
  5.3 Employment
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5.4 Record Keeping
  (a)
    
    the name and address of each Participant;
 (b)
    
    the Plan or Plans in which the Participant participates;
 (c)
    
    any Participants Contributions;
 (d)
    
    the number of unissued Shares reserved for issuance pursuant to an Option or pursuant to an
award made under the Share Bonus Plan in favour of a Participant; and
 (e)
    
    such other information as the Board may determine.
 5.5 Necessary Approvals
   5.6 Income Taxes
  5.7 Amendments to Plan
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(a)
    
    such amendment, suspension or termination is in accordance with applicable laws and the rules
of any stock exchange on which the Shares are listed;
 (b)
    
    no amendment to the Plan or to an Option granted hereunder will have the effect of impairing,
derogating from or otherwise adversely affecting the terms of an Option which is outstanding
at the time of such amendment without the written consent of the holder of such Option;
 (c)
    
    the expiry date of an Option Period in respect of an Option shall not be more than ten years
from the date of grant of an Option except as expressly provided in Section 2.5;
 (d)
    
    the Directors shall obtain shareholder approval of:
 (i)
    
    any amendment to the aggregate maximum number of Shares specified in subsection
3.2 (Share Bonus Plan);
 (ii)
    
    any amendment to the aggregate number of Shares specified in subsection 5.1
(being the aggregate number of Shares that may be reserved for issuance under the Plan)
other than pursuant to section 2.11;
 (iii)
    
    any amendment to the limitation on Shares that may be reserved for issuance,
or issued, to Insiders under subsection 5.1(a) and (c); or
 (iv)
    
    any amendment that would reduce the exercise price of an outstanding Option of
an Insider other than pursuant to section 2.11;
 (v)
    
    any amendment that would extend the expiry date of the Option Period in respect
of any Option granted under the Plan to an Insider except as expressly contemplated in
subsection 2.5; and
 (vi)
    
    any amendment to the amending provision set out in subsection 5.7 (Amendments
to Plan).
  5.8 Foreign Private Issuer Status
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(a)
    
    the Plan shall be administered by a committee consisting of two or more persons (the
Committee) appointed by the Board, each of whom is a director qualifying as a
disinterested person, as such term is defined, from time to time, in Rule 16b-3 under the
Exchange Act;
 (b)
    
    the Committee shall determine and designate, from time to time, the individuals to whom
awards shall be made hereunder, the amount of the awards and the other terms and conditions of
such awards;
 (c)
    
    each member of the Committee shall, upon his appointment or election to the Committee for the
first time, automatically be granted an immediately exercisable Option to purchase 10,000
Shares at a price per share equal to the Fair Market Value at the date of grant for an Option
Period of ten years but shall not otherwise be eligible to participate in the Plan;
 (d)
    
    no Option granted to a director or officer under the Plan may be exercised during the first
six months following the date of grant;
 (e)
    
    directors and officers of the Company will be required to hold Shares acquired under the
Share Purchase Plan for a period of six months, provided that no such hold period will be
required in respect of any such director or officer who makes an irrevocable election to waive
his right to withdraw from the Share Purchase Plan or to change his Participants Contribution
at least six months prior to his acquisition of such Shares;
 (f)
    
    Subsections 5.8(c), (d) and (e) may only be amended or modified by the Board or the
shareholders of the Company once in any six month period; and
 (g)
    
    the Board may, subject to Subsection 5.8(f) and Section 5.7, amend or modify the Plan to the
extent that the Board, based upon the advice of legal counsel, considers necessary or
desirable to bring the Plan into compliance with Rule 16b-3 under the Exchange Act.
 5.9 No Representation or Warranty
  5.10 Audited Financial Statements
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5.11 Compliance with Applicable Law, etc
  PART 6  ADMINISTRATION OF THE PLAN
 6.1 Administration by the Committee
 (a)
    
    Unless otherwise determined by the Board, the Plan shall be administered by the Compensation
Committee (the Committee) appointed by the Board and constituted in accordance with such
Committees charter. The members of the Committee serve at the pleasure of the Board and
vacancies occurring in the Committee shall be filled by the Board.
 (b)
    
    The Committee shall have the power, where consistent with the general purpose and intent of
the Plan and subject to the specific provisions of the Plan, to:
 (i)
    
    adopt and amend rules and regulations relating to the administration of the
Plan and make all other determinations necessary or desirable for the administration of
the Plan. The interpretation and construction of the provisions of the Plan and
related agreements by the Committee shall be final and conclusive. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in the Plan or
in any related agreement in the manner and to the extent it shall deem expedient to
carry the Plan into effect and it shall be the sole and final judge of such expediency;
and
 (ii)
    
    otherwise exercise the powers delegated to the Committee by the Board and under
the Plan as set forth herein.
 6.2 Board Role
 (a)
    
    The Board, on the recommendation of the Committee, shall determine and designate from time to
time the individuals to whom awards shall be made, the amounts of the awards and the other
terms and conditions of the awards.
 (b)
    
    The Board may delegate any of its responsibilities or powers under the Plan to the Committee,
provided that the grant of all Shares, Options or other awards under the Plan shall be subject
to the approval of the Board. No Option shall be exercisable in whole or in part unless and
until such approval is obtained.
 (c)
    
    In the event the Committee is unable or unwilling to act in respect of a matter involving the
Plan, the Board shall fulfill the role of the Committee provided for herein.
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