Document:

Exhibit 4.1

SAMSON OIL & GAS LIMITED

STOCK OPTION PLAN

1.           Purpose.  The purpose of this Plan is to advance the interests of the Company and its subsidiaries by ensuring that the issuance of the Options to purchase the Company’s Ordinary Shares is governed by the Australian regulatory regime when such regime conflicts with the regulatory regime of the United States of America.  The Company’s Ordinary Shares trade on the ASX and its ADRs trade on the NYSE.  Despite similar motives of transparency and investor protection, ASX rules and Australian law at times conflict with NYSE rules and United States laws regarding the issuance of options.  In view of the inequitable result that arises from adherence to both the ASX/Australian and NYSE/US regulatory regimes, the Board adopts this Plan to abide by Australian law and ASX rules where such law and rules conflict with US law and NYSE rules.

 

2.           Definitions.  As used herein, the following terms shall have the meanings indicated:

 

	
  

	
(a)

	
“ADRs” shall mean American Depositary Receipts

 

	
  

	
(b)

	
“NYSE” shall mean the NYSE Alternext US LLC, formerly know as the American Stock Exchange.

 

	
  

	
(c)

	
“ASX” shall mean the Australian Securities Exchange.

 

	
  

	
(d)

	
“Board” shall mean the Board of Directors of the Company.

 

	
  

	
(e)

	
“Company” shall mean Samson Oil & Gas Limited, a company organized under the laws of Australia.

 

	
  

	
(f)

	
“Listing Rules” shall mean the Listing Rules of the ASX, as amended.

 

	
  

	
(g)

	
“Option” shall mean any option for Ordinary Shares granted under this Plan.

 

	
  

	
(h)

	
“Ordinary Shares” shall mean the Company’s Ordinary Shares, no par value per share.

 

	
  

	
(i)

	
“Plan” shall mean this Stock Option Plan.

 

	
  

	
(j)

	
“Share” shall mean an Ordinary Share.

 

3.           Shares Subject to the Plan.  Options may only be granted where the Shares underlying the Options are authorized and issuable in accordance with the Company’s constitution, Australian law, and the Listing Rules.  The issuance of Options shall not require the filing of an Additional Listing Application with NYSE as the issuance of Options is unrelated to the number of ADRs authorized for listing on NYSE and registered under US securities laws.

 

  

  

  

 

4.           Grants of Options.  The Board or an authorized committee of the Board may grant Options from time to time in accordance with Australian law, the Company’s constitution, and the Listing Rules, which include Listing Rules 7.1 and 10.11 attached hereto as Appendix A.

 

5.           Exercise Price.  The exercise price per share of any Option granted pursuant to Section 4 hereof shall be any price determined by the Board in accordance with Australian Law, the Company’s constitution, and the Listing Rules.

 

6.           Exercise of Options.  An Option shall be deemed exercised when (i) the Company has received notice of such exercise in accordance with the terms of the Option and (ii) full payment of the aggregate price of the Shares as to which the Option is exercised has been made.  The consideration to be paid for the Shares to be issued upon exercise of an Option, as well as the method of payment of the exercise price, shall be determined by the Board in accordance with Australian law, the Company’s constitution, and the Listing Rules.

 

7.           Exercisability and Expiration of Options.  Each Option granted under Section 4 hereof shall become exercisable in such amounts, at such intervals, and upon such terms as the Board shall provide in accordance with Australian law, the Company’s constitution, and the Listing Rules.  The unexercised portion of any Option shall automatically and without notice terminate and become null and void at the time provided by the Board in accordance with Australian law, the Company’s constitution, and the Listing Rules.

 

8.           Issuance of Shares.

 

(a)           Notwithstanding any other provision of this Plan, the Company shall not be obligated to issue any Shares unless it is advised by counsel of its selection that it may do so without violation of Australian law, the Company’s constitution, and ASX Listing Rules pertaining to the issuance of securities, and may require any Shares so issued to bear a legend, may give its transfer agent instructions, and may take such other steps as in its judgment are reasonably required to prevent any such violation.

 

(b)           As a condition to any sale or issuance of Shares upon exercise of any Option, the Board may require such agreements or undertakings as the Board may deem necessary or advisable to facilitate compliance with any applicable law or regulation.

 

(c)           Notwithstanding any other provision of this Plan, the Company shall issue Shares to consultants or advisors under this Plan only if the services provided by such consultants or advisors 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.

 

9.           Administration of the Plan.  The Plan shall be administered by the Board or an authorized Committee of the Board, either of which shall have the authority to adopt such rules and regulations as are necessary or desirable for the implementation and administration of the Plan and to make such determinations as are not inconsistent with the Plan.

 

  

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10.         Amendment and Discontinuation of the Plan.  The Board may from time to time amend, suspend or terminate the Plan.  No Options may be granted under the Plan while the Plan is suspended or after it is terminated.

 

11.         Termination Date.  The Plan shall terminate automatically and without further action on the date that the Company’s ADRs cease to trade on NYSE.

 

12.         Governing Law.  The Plan will be governed by, and construed and enforced in accordance with, the laws of Australia without regard to the conflicts of laws principles thereof.

 

  

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Appendix A

 

“+” Defined terms are below in Chapter 19

CHAPTER 7  CHANGES IN CAPITAL AND NEW ISSUES

Issues exceeding 15% of capital

7.1         Without the approval of holders of +ordinary securities, an entity must not issue or agree to issue more +equity securities than the number calculated according to the following formula.

 

	
 

(A x B) – C

 

A =       The number of fully paid +ordinary securities on issue 12 months before the date of issue or agreement,

 

	
  

	
·

	
plus the number of fully paid +ordinary securities issued in the 12 months under an exception in rule 7.2,

 

	
  

	
·

	
plus the number of partly paid +ordinary securities that became fully paid in the 12 months,

 

	
  

	
·

	
plus the number of fully paid +ordinary securities issued in the 12 months with approval of holders of +ordinary securities under this rule,

 

	
  

	
·

	
less the number of fully paid +ordinary securities cancelled in the 12 months.

 

B =        15%

 

C =        The number of +equity securities issued or agreed to be issued in the 12 months before the date of issue or agreement to issue but not under an exception in rule 7.2 or with approval under this rule.

 

Note: Securities issued without security holder approval with the benefit of a waiver from listing rule 7.1 are treated as being issued with security holder approval unless the terms of the waiver provide otherwise.  Options issued and then cancelled in the twelve months before the date of issue or agreement to issue are not included in “C”.

 

7.1.1      Deleted 1/7/97.

 

7.1.2      Deleted 1/7/97.

 

7.1.3      Deleted 1/7/97.

 

7.1.4      In working out the number of +equity securities that an entity may issue or agree to issue, and the number of +equity securities in “C”, the following rules apply.

 

  

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(a)           If the +equity securities are fully paid +ordinary securities, each security is counted as one.

 

(b)           If the +equity securities are partly paid securities, each security is counted as the maximum number of fully paid +ordinary securities into which it can be paid up.

 

(c)           In any other case, each security is counted as ASX decides.

 

Note: In making decisions under listing rule 7.1.4 ASX will take into account the policy objective of the rule being control over the dilution of security holders and the economic and voting characteristics of the security.

 

If the security is convertible into ordinary securities, each security will generally be counted as the maximum number of ordinary securities into which it can be converted.  If it converts on the basis of the market value of ordinary securities at the time of conversion, it will generally be counted as the maximum number of ordinary securities into which it can be converted at the market price of ordinary securities at the time of issuing the convertible security, provided that the entity has a reasonably stable trading history.

 

Example:  12 months before the date it intends to issue more securities, a company has the following securities on issue:

 

10,000,000 ordinary shares;

 

2,000,000 options expiring 30 September 1999; and

 

2,000,000 partly paid shares.

 

In the intervening 12 months, no options have been exercised, no partly paid shares paid up and no securities of any class issued.

 

The entity may issue the following securities without the approval of shareholders:

 

·      1,500,000 ordinary securities; or

 

·      if the securities are convertible on the basis of two ordinary securities for every convertible security, 750,000.

 

7.1.5      The following rules apply regarding issues of +equity securities or agreements to issue +equity securities.

 

(a)         An agreement to issue +equity securities that is conditional on holders of +ordinary securities approving the issue before the issue is made is not treated as an agreement.  If an entity relies on this rule it must not issue the +equity securities without approval.

 

(b)         In working out if there is an issue of +equity securities the sale or reissue of forfeited +equity securities is treated as an issue of +equity securities.

 

7.1.6      In working out the number of fully paid +ordinary securities on issue 12 months before the date of issue or agreement in “A”, if first quotation of the entity’s securities occurred less than 12 months before the date of issue or agreement, the number of +securities is the number of fully paid +ordinary securities on issue on the date of first quotation.

 

  

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CHAPTER 10  TRANSACTIONS WITH PERSONS IN A POSITION OF INFLUENCE

Acquisition of securities in the entity

Approval required for an issue of securities

10.11     Unless one of the exceptions in rule 10.12 applies, an entity must not issue or agree to issue +equity securities to any of the following +persons without the approval of holders of +ordinary securities.

 

10.11.1           A +related party.

 

10.11.2           A +person whose relationship with the entity or a +related party is, in ASX’s opinion, such that approval should be obtained.

 

CHAPTER 19  INTERPRETATIONS AND DEFINITIONS

 

Definitions (*this section has been abbreviated for the purpose of this Appendix A)

 

Equity Security

(a)          a share;

(b)          a +unit;

(c)          a right to a share or +unit or option;

(d)          an option over an issued or unissued +security;

(e)          a +convertible security;

(f)          any +security that ASX decides to classify as an equity security;

(g)          but not a +security ASX decides to classify as a +debt security.

Ordinary Securities

Ordinary shares or ordinary +units (if an entity does not have ordinary shares or ordinary +units, the +class of +securities designated by ASX).

Person

Includes an individual, body corporate, body politic, firm, association, authority, authority or other entity.

 

  

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Related Party

(a)          in relation to a body corporate, the meaning in section 228 of the Corporations Act.

Note: At 13/3/2000, section 228 of the Corporation Act says that:

(1)          An entity that controls a public company is a related party of the public company.

(2)          The following persons are related parties of a public company.

(a)           directors of the public company

(b)           directors (if any) of an entity that controls the public company

(c)           if the public company is controlled by an entity that is not a body corporate – each of the persons making up the controlling entity.

(d)           spouses and de facto spouses of the persons referred to in paragraphs (a), (b) and (c).

(3)          The following relatives of persons referred to in subsection (2) are related parties of the public company.

(a)           parents

(b)           children

(4)          An entity controlled by a related party referred to in subsection (1), (2) or (3) is a related party of the public company unless the entity is also controlled by the public company.

(5)          An entity is a related party of a public company at a particular time if the entity was a related party of the public company of a kind referred to in subsection (1), (2), (3) or (4) at any time within the previous 6 months.

(6)          An entity is a related party of a public company at a particular time if the entity believes or has reasonable grounds to believe that it is likely to become a related party of the public company of a kind referred to in subsection (1), (2), (3) or (4) at any time in the future.

(7)          An entity is a related party of a public company if the entity acts in concert with a related party on the understanding that related party will receive a financial benefit if the public company gives the entity a financial benefit.

 

  

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(b)          Deleted 24/10/2005.

(c)          in relation to a person:

(i)           his or her spouse, de facto spouse, parent, child, or a spouse or de facto spouse of that person;

(ii)          an entity controlled by one or more of the persons referred to in paragraph (i);

(iii)         an entity that he or she controls;

(iv)         a person who acts in concert with anyone referred to above;

(v)          a person who was a related party in the previous 6 months, or who would be a related party in the future, under the tests in section 228 of the Corporations Act (applied with any necessary adaptation).

(d)           in relation to a trust:

(i)           the responsible entity;

(ii)          a related party of the responsible entity under section 228 of the Corporations Act, as modified by section 601LA of the Corporations Act.

 

  

A-5Unassociated Document

Exhibit 10.1

SINO CLEAN ENERGY, INC.

Room 1502, Suite D, VanMetropolis

No. 1, TangYan Road, Gaoxin District

Xi’an, Shaanxi Province

People’s Republic of China

April 15, 2011

Attention: Mr. Brock Silvers

	
Re:

	
Director Offer Letter

Dear Mr. Silvers:

Sino Clean Energy, Inc., a Nevada corporation (the “Company”), is pleased to offer you a director position on its Board of Directors (the “Board”).  We are all very impressed with your credentials and we look forward to your future success in this role.

Should you choose to accept this position as a member of the Board, this letter shall constitute an agreement between you and the Company and contains all the terms and conditions relating to the services you are to provide.

1.           Term.  This Agreement is effective as of the date set forth above and, unless otherwise extended, shall terminate on the first business day immediately following the first anniversary of the date of this Agreement, subject to the provisions in Section 8 below or until your successor is duly elected and qualified.

2.           Services.  You shall render services as a member of the Board and a member of the Audit Committee of the Board (hereinafter your “Duties”). During the term of this Agreement, you shall attend and participate in such number of meetings of the Board and of the committee(s) of which you are a member as regularly or specially called. You may attend and participate at each such meeting via teleconference, video conference or in person. You shall consult with the other members of the Board and committee(s) regularly and as necessary via telephone, electronic mail or other forms of correspondence.

3.           Services for Others.  You shall be free to represent or perform services for other persons during the term of this Agreement.  However, you agree that you do not presently perform and do not intend to perform, during the term of this Agreement, similar Duties, consulting or other services for companies whose businesses are or would be, in any way, competitive with the Company (except for companies previously disclosed by you to the Company in writing).  Should you propose to perform similar Duties, consulting or other services for any such company, you agree to notify the Company in writing in advance (specifying the name of the organization for which you propose to perform such services) and to provide information to the Company sufficient to allow it to determine if the performance of such services would conflict with areas of interest to the Company.

 

  

  

  

 

Exhibit 10.1

4.           Compensation to Independent Directors.  You shall receive cash compensation of USD $24,000 per calendar year, payable at the end of each quarter at the rate of $6,000 per quarter.  In addition, subject to the approval of the Compensation Committee of the Board, you shall be granted a one-time option award to purchase up to ten thousand (10,000) shares of the Company’s common stock, with a per share exercise price equal to the closing price of the Company’s stock on the date of this Agreement (the “Option”).  You shall be reimbursed for reasonable expenses incurred by you in connection with the performance of your Duties (including travel expenses for in-person meetings).

a.           Vesting and Exercise of Option.  The Option will not be exercisable until one year from the date of this Agreement (the “Vesting Date”).  On the Vesting Date, the entire Option shall be vested and exercisable in full, provided that on the Vesting Date, you are still serving as a director on the Board.

b. Termination of Option.  The Option shall terminate and be of no force or effect on the sixth (6th) anniversary of the date of this Agreement.  In addition, if you are no longer acting as a director on the Board for any reason, the unvested portion of the Option shall terminate.

5.           D&O Insurance Policy. During the term of this Agreement, the Company shall include you as an insured under an officers and directors insurance policy with coverage no less than $3,000,000, which the Company shall obtain within a reasonable period of time. Such policy will be underwritten by an insurance company that has no less than an “A XII” rating as published by A.M. Best.

6.           No Assignment.  Because of the personal nature of the services to be rendered by you, this Agreement may not be assigned by you without the prior written consent of the Company.

7.           Confidential Information; Non-Disclosure.  In consideration of your access to the premises of the Company and/or you access to certain Confidential Information of the Company, in connection with your business relationship with the Company, you hereby represent and agree as follows:

a.           Definition.  For purposes of this Agreement the term “Confidential Information” means:

i.           Any information which the Company possesses that has been created, discovered or developed by or for the Company, and which has or could have commercial value or utility in the business in which the Company is engaged; or

ii.           Any information which is related to the business of the Company and is generally not known by non-Company personnel.

 

  

  

  

 

Exhibit 10.1

iii.           By way of illustration, but not limitation, Confidential Information includes trade secrets and any information concerning products, processes, formulas, designs, inventions (whether or not patentable or registrable under copyright or similar laws, and whether or not reduced to practice), discoveries, concepts, ideas, improvements, techniques, methods, research, development and test results, specifications, data, know-how, software, formats, marketing plans, and analyses, business plans and analyses, strategies, forecasts, customer and supplier identities, characteristics and agreements.

b.           Exclusions.  Notwithstanding the foregoing, the term Confidential Information shall not include:

i.           Any information which becomes generally available to the public other than as a result of a breach of the confidentiality portions of this Agreement, or any other agreement requiring confidentiality between the Company and you;

ii.           Information received from a third party in rightful possession of such information who is not restricted from disclosing such information; and

iii.           Information known by you prior to receipt of such information from the Company, which prior knowledge can be documented.

c.           Documents. You agree that, without the express written consent of the Company, you will not remove from the Company's premises, any notes, formulas, programs, data, records, machines or any other documents or items which in any manner contain or constitute Confidential Information, nor will you make reproductions or copies of same.  In the event you receive any such documents or items by personal delivery from any duly designated or authorized personnel of the Company, you shall be deemed to have received the express written consent of the Company.  In the event that you receive any such documents or items, other than through personal delivery as described in the preceding sentence, you agree to inform the Company promptly of your possession of such documents or items.  You shall promptly return any such documents or items, along with any reproductions or copies to the Company upon the Company's demand, upon termination of this Agreement, or upon your termination or Resignation, as defined in Section 8 herein.

d.           No Disclosure.  You agree that you will hold in trust and confidence all Confidential Information and will not disclose to others, directly or indirectly, any Confidential Information or anything relating to such information without the prior written consent of the Company, except as maybe necessary in the course of your business relationship with the Company.  You further agree that you will not use any Confidential Information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company, and that the provisions of this paragraph (d) shall survive termination of this Agreement.

8.            Termination and Resignation.  Your membership on the Company’s Board may be terminated for any or no reason at a meeting called for the purpose of the election of directors by a vote of the stockholders holding at least a majority of the shares of the Company’s issued and outstanding shares entitled to vote. Your membership on a Board committee may be terminated for any or no reason at any meeting of the Board by or by written consent of, a majority of the Board at any time. You may also terminate your membership on the Board or on a committee for any or no reason by delivering your written notice of resignation to the Company (“Resignation”), and such Resignation shall be effective upon the time specified therein or, if no time is specified, upon receipt of the notice of resignation by the Company. Upon the effective date of the termination or Resignation, your right to compensation hereunder will terminate subject to the Company's obligations to pay you any cash compensation (or equivalent value in Company common stock shares) that you have already earned and to reimburse you for approved expenses already incurred in connection with your performance of your Duties as of the effective date of such termination or Resignation.

 

  

  

  

 

Exhibit 10.1

9. Governing Law.  All questions with respect to the construction and/or enforcement of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the law of the State of Nevada applicable to agreements made and to be performed entirely in the State of Nevada.

10. Entire Agreement; Amendment; Waiver; Counterparts.  This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof.  Any term of this Agreement may be amended and observance of any term of this Agreement may be waived only with the written consent of the parties hereto.  Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of any subsequent breach or failure of the same term or condition or waiver of any other term or condition of this Agreement.  The failure of any party at any time to require performance by any other party of any provision of this Agreement shall not affect the right of any such party to require future performance of such provision or any other provision of this Agreement.  This Agreement may be executed in separate counterparts each of which will be an original and all of which taken together will constitute one and the same agreement, and may be executed using facsimiles of signatures, and a facsimile of a signature shall be deemed to be the same, and equally enforceable, as an original of such signature.

11. Indemnification.  The Company shall, to the maximum extent provided under applicable law, indemnify and hold you harmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”), incurred in connection with any proceeding arising out of, or related to, your performance of your Duties, other than any such Losses incurred as a result of your knowingly fraudulent or willful misconduct.  The Company shall advance to you any expenses, including attorney’s fees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law.  Such costs and expenses incurred by you in defense of any such proceeding shall be paid by the Company in advance of the final disposition of such proceeding promptly upon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on your behalf to repay the amounts so advanced if it shall ultimately be determined pursuant to any non-appealable judgment or settlement that you are not entitled to be indemnified by the Company.

[Remainder of Page Left Blank Intentionally]

 

 

 

 

 

  

  

  

 

Exhibit 10.1

 

The Agreement has been executed and delivered by the undersigned and is made effective as of the date set first set forth above.

 

	 	Sincerely,	 
	 	 	 
	 	SINO CLEAN ENERGY, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ Baowen Ren	 
	 	 	Baowen Ren	 
	 	 	Chief Executive Officer	 

AGREED AND ACCEPTED:

/s/ Brock Silvers

Brock Silvers

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