Document:

Exhibit 10.1

STORM CAT ENERGY CORPORATION

(the “Company”)

AMENDED AND RESTATED SHARE OPTION PLAN

Dated for reference June 21, 2007

ARTICLE 1

PURPOSE AND INTERPRETATION

Purpose

1.1           The purpose of this
Plan will be to advance the interests of the Company by encouraging equity
participation in the Company through the acquisition of Common Shares of the
Company. It is the intention of the Company that this Plan will at all times be
in compliance with the rules and policies, as may be amended from time to
time, (the “Exchange Policies”) of the TSX
Venture Exchange (the “TSX Venture”)
or the Toronto Stock Exchange (the “TSX”),
depending upon the stock exchange on which the Common Shares are, at the
relevant time, listed for trading, and any inconsistencies between this Plan
and the Exchange Policies whether due to inadvertence or changes in the
Exchange Policies will be resolved in favour of the latter.

Definitions

1.2           In this Plan:

Affiliate
means a company that is a parent or subsidiary of the Company, or that is
controlled by the same entity as the Company;

Associate
has the meaning assigned by the Securities Act;

Blackout
Period means a period during which the Company has imposed
restrictions on trades in its securities by its directors, officers and
employees;

Board
means the board of directors of the Company or any committee thereof duly
empowered or authorized to grant options under this Plan;

Change
of Control includes situations where after giving effect to
the contemplated transaction and as a result of such transaction:

(i)     any
one Person holds a sufficient number of voting shares of the Company or
resulting company to affect materially the control of the Company or resulting
company, or,

(ii)     any
combination of Persons, acting in concert by virtue of an agreement,
arrangement, commitment or understanding, hold in total a sufficient number of
voting shares of the Company or its successor to affect materially the control
of the Company or its successor,

where such Person or
combination of Persons did not previously hold a sufficient number of voting
shares to affect materially control of the Company or its successor. In the
absence of evidence to the contrary, any Person or combination of Persons
acting in concert by virtue of an agreement, arrangement, commitment or
understanding, holding more than 20% of the voting shares of the Company or its
successor is deemed to materially affect the control of the Company or its
successor;

Common
Shares means common shares without par value in the capital
of the Company providing such class is listed on the TSX Venture or the TSX;

Company
means the Corporation named at the top hereof and includes, unless the context
otherwise requires, all of its subsidiaries or affiliates and successors
according to law;

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Consultant
means a Person or Consultant Company, other than an Employee, Officer or
Director that:

(i)            provides on an ongoing
bona fide basis, consulting, technical, managerial or like services to the
Company or an Affiliate of the Company, other than services provided in
relation to a Distribution;

(ii)           provides the services
under a written contract between the Company or an Affiliate and the Person or
the Consultant Company;

(iii)          in the reasonable
opinion of the Company, spends or will spend a significant amount of time and
attention on the business and affairs of the Company or an Affiliate of the
Company; and

(iv)          has a relationship with
the Company or an Affiliate that enables the Person or Consultant Company to be
knowledgeable about the business and affairs of the Company;

Consultant
Company means for a Person consultant, a company or
partnership of which the Person is an employee, shareholder or partner;

Directors
means the directors of the Company as may be elected from time to time;

Discounted
Market Price has the meaning assigned by Policy 1.1 of the
TSX Venture;

Disinterested
Shareholder Approval means approval by a majority of the
votes cast by all the Company’s shareholders at a duly constituted shareholders’
meeting, excluding votes attached to shares beneficially owned by Service
Providers or their Associates;

Distribution
has the meaning assigned by the Securities Act, and generally refers to a
distribution of securities by the Company from treasury;

Effective
Date for an Option means the date of grant thereof by the
Board;

Employee
means:

(i)            a Person who is
considered an employee under the Income Tax Act (i.e. for whom income tax,
employment insurance and CPP deductions must be made at source);

(ii)           a Person who works
full-time for the Company or its subsidiary providing services normally
provided by an employee and who is subject to the same control and direction by
the Company over the details and methods of work as an employee of the Company,
but for whom income tax deductions are not made at source; or

(iii)          a Person who works for
the Company or its subsidiary on a continuing and regular basis for a minimum
amount of time per week providing services normally provided by an employee and
who is subject to the same control and direction by the Company over the
details and methods of work as an employee of the Company, but for whom income
tax deductions need not be made at source;

Exchange
Policies has the meaning given to it in paragraph 1.1 of this
Plan.

Exercise
Price means the amount payable per Common Share on the
exercise of an Option, as determined in accordance with the terms hereof;

Existing
Options means the options previously granted by the Company
and outstanding as at the close of business on June 27, 2006 to purchase
an aggregate of 5,076,666 Common shares in the capital of the Company, which
options are, going forward, governed by the terms and conditions of this Plan;

Expiry
Date means the day on which an Option lapses as specified in
the Option Commitment therefor or in accordance with the terms of this Plan;

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Insider
means:

(i)            an “insider” (or “Insider”)
as defined in the Exchange Policies or as defined in securities legislation
applicable to the Company; or

(ii)           an Associate of any
person who is an Insider by virtue of Section (i) above;

Investor
Relations Activities has the meaning assigned by Policy 1.1
of the TSX Venture, and means generally any activities or communications that
can reasonably be seen to be intended to or be primarily intended to promote
the merits or awareness of or the purchase or sale of securities of the
Company;

Listed
Shares means the number of issued and outstanding Common
Shares that have been accepted for listing on the TSX Venture or the TSX, but
excluding dilutive securities not yet converted into Listed Shares;

Management
Company Employee means a Person employed by another person or
a corporation providing management services to the Company which are required
for the ongoing successful operation of the business enterprise of the Company,
but excluding a corporation or Person engaged primarily in Investor Relations
Activities;

Officer
means a duly appointed “senior officer” of the Company as defined in the
Securities Act;

Option
means the Existing Options and any right to purchase Common Shares granted
hereunder to a Service Provider;

Option
Commitment means the notice of grant of an Option delivered
by the Company hereunder to a Service Provider and substantially in the form of
Schedule A hereto or, for Existing Options, under a prior option plan of the
Company;

Optioned
Shares means Common Shares that may be issued in the future
to a Service Provider upon the exercise of an Option;

Optionee
means the recipient of an Option hereunder or a holder of Existing Options;

Outstanding
Shares means at the relevant time, the number of outstanding
Common Shares of the Company from time to time;

Participant
means a Service Provider that becomes an Optionee;

Person
means a company or an individual;

Plan
means this Share Option Plan, the terms of which are set out herein or as may
be amended;

Plan
Shares means the total number of Common Shares which may be
made subject to issuance as Optioned Shares under the Plan as provided in Section 2.2;

Regulatory
Approval means the approval of the TSX Venture or the TSX,
depending on which stock exchange the Common Shares are, at the relevant time,
listed for trading, and any other securities regulatory authority that may have
lawful jurisdiction over the Plan and any Options issued hereunder;

Sale of
the Company means:

(i)            a sale of all or
substantially all of the assets of the Company;

(ii)           a corporate transaction
(whether effected through an acquisition for cash or securities, and whether
structured as a purchase, amalgamation, merger, arrangement or otherwise) in
which the Company is not the surviving corporation (other than a purchase,
amalgamation, merger or consolidation with one or more subsidiaries of the
Company, or other transaction in which there is no material change of control
in the beneficial shareholder(s) of the Company; and

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(iii)          a corporate transaction
(whether effected through an acquisition for cash or securities, and whether
structured as a purchase, amalgamation, merger, arrangement or otherwise) in
which the Company is the surviving corporation, but after which shareholder(s) of
the Company immediately prior to such transaction (other than any shareholder
which merges, or which owns or controls another corporation which merges, with
the Company in such transaction)  hold less than 30% of the voting rights
attaching to all of the outstanding voting securities of the Company;

Securities
Act means the Securities
Act, R.S.B.C. 1996, c. 418, as amended from time to time;

Service
Provider means a Person who is a bona fide Director, Officer,
Employee, Management Company Employee or Consultant, and also includes a
company, of which 100% of the share capital is beneficially owned by one or
more Person Service Providers;

Share
Compensation Arrangement means any Option under this Plan,
and any other stock option, stock option plan, employee stock purchase plan,
restricted share unit plan, or any other compensation or incentive mechanism
involving the issuance or potential issuance of Common Shares to a Service
Provider, including, where applicable, the Existing Options;

Shareholder
Approval means approval by a majority of the votes cast by
eligible shareholders at a duly constituted shareholders’ meeting;

TSX has
the meaning given to it in paragraph 1.1 of this Plan; and

TSX
Venture has the meaning given to it in paragraph 1.1 of this
Plan.

Interpretation

1.3           In this Plan:
(i) where reference is made in this Plan to “TSX Venture
or the TSX” or words to similar effect, as between the TSX Venture
or the TSX, only one stock exchange will, from time to time be the applicable
stock exchange, and it will be the stock exchange on which the Common Shares
are then listed for trading; and (ii) this Plan replaces the Company’s
prior option plan, and will govern any and all Options granted hereunder, and,
subject to the express provisions hereof, any and all Existing Options.

1.4           Unless otherwise
specified, words used in this Plan importing the singular include the plural
and vice versa and words importing gender include all genders and
non-individual entities.

1.5           Except as otherwise
expressly determined otherwise by the Board, a Service Provider will be deemed
to have ceased to be employed by or provide services to the Company on the
first to occur of the date on which the Service Provider has left his
employ/office with the Company, the date on which his service contract with the
Company expires, and the termination date specified in a termination notice
given by the Company to the Service Provider.

ARTICLE 2

SHARE OPTION PLAN

Establishment of Share Option Plan

2.1           There is hereby
established a Share Option Plan to recognize contributions made by Service
Providers and to create an incentive for their continuing assistance to the
Company and its Affiliates. Except to the extent that amendments to Options
effected by this Plan will impair the rights and entitlements of an Optionee
under any Existing Options, the Existing Options will be governed by and
interpreted in accordance with this Plan.

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Maximum Plan Shares

2.2           The maximum number of
Plan Shares which may be made subject to issuance under Options granted under
this Plan is 10,000,000 Common Shares, less:

(a)           the aggregate number of
Common Shares that are, from time to time, subject to issuance under
outstanding rights that have been issued by the Company under any other Share
Compensation Arrangement, including the Existing Options and Common Shares that
are subject to issuance under outstanding Restricted Share Units issued under
the Company’s Restricted Share Unit Plan (as may be amended from time to time);
and

(b)           the net number of
Common Shares that, subsequent to the date hereof, are issued pursuant to a
right granted under this Plan or any other Share Compensation Arrangement,

subject to adjustment
under Section 3.14.

Eligibility

2.3           Subject to the Board’s
powers of delegation under this Plan, options to purchase Common Shares may be
granted hereunder to Service Providers from time to time by the Board. Service
Providers that are corporate entities will be required to undertake in writing
not to effect or permit any transfer of ownership or option of any of its
shares, nor issue more of its shares (so as to indirectly transfer the benefits
of an Option), as long as such Option remains outstanding, unless the written
permission of the TSX Venture or the TSX, and the Company is obtained. For greater
certainty, a change in the status of a Participant’s relationship with the
Company will not affect such Participant’s then-existing Options, provided that
the Participant has not ceased to be employed by or provide services to the
Company.

Options Granted Under the Plan

2.4           All Options granted
under the Plan will be evidenced by an Option Commitment in the form attached
as Schedule A, showing the number of Optioned Shares, the term of the Option, a
reference to vesting terms, if any, and the Exercise Price.

2.5           Subject to specific
variations approved by the Board, all terms and conditions set out herein will
be deemed to be incorporated into and form part of an Option Commitment made
hereunder.

Limitations on Issue

2.6           Subject to
Section 2.10, if the Common Shares are listed for trading on the TSX
Venture, the following restrictions on issuances of Options are applicable
under the Plan:

(a)           no Service Provider can
be granted an Option if that Option would result in the total number of
Options, together with all other Share Compensation Arrangements granted to
such Service Provider in the previous 12 months, exceeding 5% of the Listed
Shares (unless the Company is classified as a Tier 1 Issuer by the TSX Venture
and the Company has obtained Disinterested Shareholder Approval under
Section 2.10(a)(iii) to do so);

(b)           no Options can be
granted under this Plan if the Company is designated “Inactive” by the TSX
Venture;

(c)           the aggregate number of
Options granted to Service Providers conducting Investor Relations Activities
in any 12-month period must not exceed 2% of the Listed Shares,
calculated at the time of grant, without the prior consent of TSX Venture; and

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(d)           the aggregate number of
Options granted to any one Consultant in any 12-month period must not
exceed 2% of the Listed Shares, calculated at the time of grant, without the
prior consent of TSX Venture.

2.7           If the Common Shares
are listed for trading on the TSX, then notwithstanding anything in this Plan
to the contrary:

(a)           the aggregate number of
Common Shares that may be made subject to issuance to Insiders pursuant to
Options granted under the Plan and under any other Share Compensation
Arrangement must not exceed 10% of the Listed Shares; and

(b)           the aggregate number of
Common Shares that may be issued to Insiders pursuant to Options granted under
the Plan and under any other Share Compensation Arrangement, within any
one-year period, must not exceed 10% of the Listed Shares.

Options Not Exercised or Optioned Shares Used to Pay
Exercise Price

2.8           For greater certainty:

(a)           in the event a right to
acquire Common Shares under a Share Compensation Arrangement (including an
Option) expires unexercised or is terminated by reason of dismissal of the
holder of the right for cause or is otherwise lawfully cancelled prior to such
right resulting in the issuance of Common Shares, then the Common Shares that
were issuable thereunder will be added back into the aggregate number of Common
Shares that may be, from time to time, made subject to issuance under a right
granted this Plan or any other Share Compensation Arrangement; and

(b)           if an Optionee pays the
Exercise Price (and/or any applicable withholding taxes) of an Option by
surrendering previously owned Common Shares, or arranges to have the
appropriate number of Optioned Shares otherwise issuable upon exercise of an
Option withheld, then the Common Shares that would have been issued upon
exercise of the Option equal in number to the surrendered and/or withheld
Optioned Shares and Common Shares shall not count towards the maximum number of
Plan Shares that may be made subject to issuance under this Plan or any other
Share Compensation Arrangement.

Powers of the Board

2.9           The Board will be
responsible for the general administration of the Plan and the proper execution
of its provisions, the interpretation of the Plan and the determination of all
questions arising hereunder. Without limiting the generality of the foregoing,
the Board has the power to:

(a)           allot Common Shares for
issuance in connection with the exercise of Options;

(b)           grant Options
hereunder;

(c)           amend, suspend,
terminate or discontinue the Plan or the terms of any Option granted under the
Plan, or revoke or alter any action taken in connection therewith, except that
no general amendment or suspension of the Plan will, without the written
consent of all Optionees, impair the rights and entitlements of any Optionee
pursuant to a then-outstanding Option unless such amendment is the result of a
change in the Exchange Policies or, if applicable, the Company’s tier
classification under the policies of the TSX Venture; and

(d)           may in its sole
discretion amend this Plan (except for previously granted and outstanding
Options) to reduce the benefits that may be granted to Service Providers
(before a particular Option is granted) subject to the other terms hereof.

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The Board may delegate
all or such portion of its powers under this Plan as it may determine to a duly
appointed committee of the Board or an Officer of the Company, either
indefinitely or for such period of time as it may specify, and thereafter such
committee or Officer may exercise the powers and discharge the duties of the
Board in respect of the Plan so delegated to the same extent as the Board is
hereby authorised so to do. If such a committee or Officer is appointed for
this purpose, all references herein to the Board will be deemed to be
references to such committee or Officer. Notwithstanding the foregoing, the
Board will not be permitted to delegate its powers hereunder to an Officer to the
extent that such powers relate to the participation in this Plan by Officers
and Directors.

Terms or Amendments Requiring (Disinterested)
Shareholder Approval

2.10         If the Common Shares are
listed for trading on the TSX Venture, then the Company will be required to
obtain Disinterested Shareholder Approval prior to any of the following actions
becoming effective:

(a)           the Plan, together with
all of the Company’s previously established and outstanding stock option plans
or grants, could result at any time in:

(i)            the aggregate number
of shares reserved for issuance under stock options granted to Insiders
exceeding 10% of the Listed Shares;

(ii)           the number of Optioned
Shares issued to Insiders within a one-year period exceeding 10% of the Listed
Shares; or,

(iii)          in the case of a Tier 1
Issuer only the issuance to any one Optionee, within a 12-month period,
of a number of shares exceeding 5% of Listed Shares; or

(b)           any reduction in the
Exercise Price of an Option previously granted to an Insider.

2.11         If the Common Shares are
listed for trading on the TSX, then the Company will be required to obtain:

(a)           subject to Sections
2.9(c) and (d), Shareholder Approval at the time of any amendment to the
Plan;

(b)           Shareholder Approval,
excluding the votes of Common Shares held by Insiders benefiting from the
amendment if required by Exchange Policies, of:

(i)            any reduction in the
Exercise Price of an Option held by an Insider; or

(ii)           any extension of the
term of an Option held by an Insider; or

(iii)          any increase of the
fixed maximum number of Plan Shares issuable under the Plan; and

(c)           except for amendments
described in 2.11(b) no Shareholder Approval will be required for an
action of the Board taken in accordance with Sections 2.9(c) and (d).

ARTICLE 3

TERMS AND CONDITIONS OF OPTIONS

Exercise Price

3.1           The Exercise Price of
an Option will be set by the Board at the time such Option is allocated under
the Plan, and cannot be less than the Discounted Market Price, if the Common
Shares are listed for trading on the TSX Venture, or the most recent closing
market price of the Common Shares as reported by the TSX at the time such
option is granted, if such shares are listed for trading on the TSX.

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Term of Option

3.2           The term of each Option
will be determined by the Board, provided that, if the Company is a Tier 1
Issuer on the TSX Venture or the Common Shares are listed for trading on the
TSX, then an Option can be exercisable for a maximum of 10 years from the
Effective Date; and if the Company is a Tier 2 Issuer on the TSX Venture an
Option can be exercisable for a maximum of five years from the Effective Date.

3.3           Notwithstanding
Section 3.2, if the Expiry Date of an Option occurs:

(a)                                  within
a Blackout Period, the Expiry Date will be extended to the date which is 10
Business Days after expiry of the Blackout Period; or

(b)                                 immediately
following a Blackout Period, the Expiry Date will be extended to the date which
is 10 Business Days after expiry of the Blackout Period less the number of
Business Days between the Expiry Date of the Option and the date on which the
Blackout Period ends.

The term of expiry
pursuant to sub-paragraphs 3.3 (a) or (b) is subject to the
discretion of the Board.

Option Amendment

3.4           Subject to
Section 2.10(b), the Exercise Price of an Option may be amended only if at
least six (6) months have elapsed since the later of the date of
commencement of the term of the Option, the date the Company’s shares commenced
trading on the TSX Venture, or the date of the last amendment of the Exercise
Price.

3.5           An Option must be
outstanding for at least one year before the Company may extend its term,
subject to the limits contained in Section 3.2.

3.6           Any proposed amendment
to the terms of an Option must receive any and all approvals that are required
from the TSX Venture or the TSX under Exchange Policies prior to the exercise
of such Option.

Vesting of Options

3.7           Subject to
Section 3.8 and Section 3.9, vesting of Options is otherwise at the
discretion of the Board, and will generally be subject to:

(a)           the Service Provider
remaining employed by or continuing to provide services to the Company or any
of its subsidiaries and Affiliates as well as, at the discretion of the Board,
achieving certain milestones which may be defined by the Board from time to
time or receiving a satisfactory performance review by the Company or its
subsidiary or affiliate during the vesting period; or

(b)           remaining as a Director
of the Company or any of its subsidiaries or Affiliates during the vesting
period.

3.8           If the Company is a
Tier 2 Issuer on the TSX Venture and the Plan Shares exceed 10% of the Listed
Shares, then any Options granted under the Plan will vest in accordance with
the vesting schedule attached as Schedule B and may be exercised only after
vesting.

Vesting of Options Granted for Investor Relations
Activities

3.9           Subject to
Section 3.8, if the Common Shares are listed for trading on the TSX
Venture, then Options granted to Consultants conducting Investor Relations
Activities will vest:

(a)           over a period of not
less than 12 months as to 25% on the date that is three months from the date of
grant, and a further 25% on each successive date that is three months from the
date of the previous vesting; or

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(b)           such longer vesting
period as the Board may determine.

Variation of Vesting Periods

3.10         At the time an Option is
granted which carries vesting provisions, the Board may vary such vesting
provisions provided in Section 3.8 and Section 3.9, subject to
Regulatory Approval.

Accelerated Vesting

3.11         Notwithstanding any
vesting provisions imposed on any Options granted under this Plan, whether such
vesting provisions are set out in this Plan or in an Option Commitment made
pursuant to this Plan, if the Company is classified as a Tier 1 Issuer by the
TSX Venture or listed on the TSX, then, immediately upon the completion of a
Sale of the Company, all outstanding and unvested Options (except for Options
granted to Consultants conducting Investor Relations Activities) will be deemed
to be fully vested without the need for any further action by the Company or
the Optionee.

Optionee Ceasing to be Employed or Provide Services

3.12         No Option held by a
Service Provider may be exercised after such Service Provider has ceased to be
employed by or provide services to the Company, except as follows:

(a)           in the case of the
death of an Optionee, any vested Option held by him at the date of death will
become exercisable by the Optionee’s lawful personal representatives, heirs or
executors until the earlier of one year after the date of death of such
Optionee and the date of expiration of the term otherwise applicable to such
Option;

(b)           in the case of the
Company being a Tier 1 Issuer listed on the TSX Venture, Options granted to any
Service Provider must expire within 90 days after the date the Optionee ceases
to be employed by or provide services to the Company, but only to the extent
that such Optionee was vested in the Option at the date the Optionee ceased to
be so employed by or to provide services to the Company;

(c)           in the case of the
Company being a Tier 2 Issuer listed on the TSX Venture, Options granted to a
Service Provider conducting Investor Relations Activities must expire within 30
days of the date the Optionee ceases to provide services to the Company, but
only to the extent that such Optionee was vested in the Option at the date the
Optionee ceased to provide services to the Company;

(d)           in the case of the
Company being a Tier 2 Issuer listed on the TSX Venture, Options granted to an
Optionee (other than an Optionee conducting Investor Relations Activities) must
expire within 90 days after the Optionee ceases to be employed by or provide
services to the Company, but only to the extent that such Optionee was vested
in the Option at the date the Optionee ceased to be so employed by or to
provide services to the Company;

(e)           in the case of the
Company having its securities listed on the TSX, except as otherwise expressly
approved by the Board for the specific Option Commitment in question, Options
granted to an Optionee must expire between 90 days and 1 year after the
Optionee ceases to be employed by or provide services to the Company, but only
to the extent that such Optionee was vested in the Option at the date the
Optionee ceased to be employed by or to provide services to the Company and
cannot extend beyond the original outside Expiry Date;

(f)            in the case of an
Optionee being dismissed from employment or service for cause, such Optionee’s
Options, whether or not vested at the date of dismissal, will terminate
immediately on the date the Optionee ceased to be employed by or to provide
services to the Company, and the terminated Optionee will have no right to
exercise his Options after such a termination; and

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(g)           in the event that the
Optionee ceases to be employed by or provide services to the Company, whether
for cause or otherwise, no potential value of the Optionee’s Options will be
considered in determining any notice or compensation in lieu of notice that may
be required or given upon such cessation of the Optionee’s tenure with the
Company. This is a condition of the grant of the Options to the Optionee and
the Optionee waives any and all rights and claims the Optionee may have to any
Optioned Shares or value attributable to Optioned Shares which would have under
any circumstances vested after the Optionee ceases to be employed by or provide
services to the Company.

Non Assignable

3.13         Subject to
Section 3.12(a), all Options will be exercisable only by the Optionee to
whom they are granted and will not be assignable or transferable.

Adjustment of the Number of Optioned Shares

3.14         The number of Common
Shares subject to an Option will be subject to adjustment in the events and in
the manner following:

(a)           in the event of a
subdivision of Common Shares as constituted on the date hereof, at any time
while an Option is in effect, into a greater number of Common Shares, the
Company will thereafter deliver at the time of purchase of Optioned Shares
hereunder, in addition to the number of Optioned Shares in respect of which the
right to purchase is then being exercised, such additional number of Common
Shares as result from the subdivision without an Optionee making any additional
payment or giving any other consideration therefor;

(b)           in the event of a
consolidation of the Common Shares as constituted on  the date hereof, at any time while an
Option is in effect, into a lesser number of Common Shares, the Company will
thereafter deliver and an Optionee will accept, at the time of purchase of
Optioned Shares hereunder, in lieu of the number of Optioned Shares in respect
of which the right to purchase is then being exercised, the lesser number of
Common Shares as result from the consolidation;

(c)           in the event of any
change of the Common Shares as constituted on the date hereof, at any time while
an Option is in effect, the Company will thereafter deliver at the time of
purchase of Optioned Shares hereunder the number of shares of the appropriate
class resulting from the said change as an Optionee would have been entitled to
receive in respect of the number of Common Shares so purchased had the right to
purchase been exercised before such change;

(d)           in the event of a
capital reorganization, reclassification or change of outstanding equity shares
(other than a change in the par value thereof) of the Company, a consolidation,
merger or amalgamation of the Company with or into any other company or a sale
of the property of the Company as or substantially as an entirety at any time
while an Option is in effect, an Optionee will thereafter have the right to
purchase and receive, in lieu of the Optioned Shares immediately theretofore
purchasable and receivable upon the exercise of the Option, the kind and amount
of share and other securities and property receivable upon such capital
reorganization, reclassification, change, consolidation, merger, amalgamation
or sale which the holder of a number of Common Shares equal to the number of
Optioned Shares immediately theretofore purchasable and receivable upon the
exercise of the Option would have received as a result thereof. The subdivision
or consolidation of Common Shares at any time outstanding (whether with or
without par value) will not be deemed to be a capital reorganization or a
reclassification of the capital of the Company for the purposes of this Section 3.14(d);

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(e)           an adjustment will take
effect at the time of the event giving rise to the adjustment, and the
adjustments provided for in this Section are cumulative;

(f)            the Company will not
be required to issue fractional shares in satisfaction of its obligations
hereunder. Any fractional interest in a Common Share that would except for the
provisions of this Section 3.14(f), be deliverable upon the exercise of an
Option will be cancelled and not be deliverable by the Company; and

(g)           if any questions arise
at any time with respect to the Exercise Price or number of Optioned Shares
deliverable upon exercise of an Option in any of the events set out in this
Section 3.14, such questions will be conclusively determined by the
Company’s auditors, or, if they decline to so act, any other firm of Chartered
Accountants, in Vancouver, British Columbia (or in the city of the Company’s
principal executive office) that the Company may designate and who will have
access to all appropriate records and such determination will be binding upon
the Company and all Optionees.

ARTICLE 4

COMMITMENT AND EXERCISE PROCEDURES

Option Commitment

4.1           Upon grant of an Option
hereunder, an authorized officer of the Company will deliver to the Optionee an
Option Commitment detailing the terms of such Options and upon such delivery
the Optionee will be subject to the Plan and have the right to purchase the
Optioned Shares at the Exercise Price set out therein subject to the terms and
conditions hereof.

Manner of Exercise

4.2           An Optionee who wishes
to exercise his Option may do so by delivering:

(a)           a written notice to the
Company specifying the number of Optioned Shares being acquired pursuant to the
Option; and

(b)           the aggregate Exercise
Price (and any applicable withholding taxes) for the Optioned Shares being
acquired by any of the following means permitted by the Board from time to
time, including, but not limited to, (1) cash or a certified cheque
payable to the Company; (2) tendering (either actually or by attestation)
Common Shares owned by the Optionee for at least six (6) months, valued at
the fair market value on the date the Option is exercised; (3) arranging
to have the appropriate number of Common Shares issuable upon the exercise of
the Option withheld or sold; or (4) any combination of the above.

Delivery of Certificate and Hold Periods

4.3           As soon as practicable
after receipt of the notice of exercise described in Section 4.2 and
payment in full for the Optioned Shares being acquired, the Company will direct
its transfer agent to issue a certificate to the Optionee for the appropriate
number of Optioned Shares. Such certificate issued will bear a legend
stipulating any resale restrictions required under applicable securities laws.
Further, if the Company is a Tier 2 Issuer, or the Exercise Price is set below
the then current market price of the Common Shares on the TSX Venture, then the
certificate will also bear a legend stipulating that the Optioned Shares are
subject to a four-month TSX Venture hold period commencing the date of
the Option Commitment.

 11
 

ARTICLE 5

GENERAL

Employment and Services

5.1           Nothing contained in
the Plan will confer upon or imply in favour of any Optionee any right with
respect to office, employment or provision of services with the Company, or
interfere in any way with the right of the Company to lawfully terminate the
Optionee’s office, employment or service at any time pursuant to the
arrangements pertaining to same. Participation in the Plan by an Optionee will
be voluntary.

No Representation or Warranty

5.2           The Company makes no
representation or warranty as to the future market value of Common Shares
issued in accordance with the provisions of the Plan or to the effect of the Income Tax Act (Canada) or any other
taxing statute governing the Options or the Common shares issuable thereunder
or the tax consequences to a Service Provider. Compliance with applicable
securities laws as to the disclosure and resale obligations of each Participant
is the responsibility of such Participant and not the Company.

Interpretation

5.3           The Plan will be
governed and construed in accordance with the laws of the Province of British
Columbia.

Amendment of the Plan

5.4           The Board reserves the
right, in its absolute discretion, to at any time amend, modify or terminate the
Plan with respect to all Common Shares in respect of Options which have not yet
been granted hereunder. Any amendment to any provision of the Plan will be
subject to any necessary Regulatory Approvals.

U.S. Tax Withholding

5.5           Prior to the delivery
of any Optioned Shares being acquired upon exercise of an Option, the Company
may withhold, or require an Optionee to remit to the Company, an amount
sufficient to pay any U.S. Federal, state, and local taxes associated with
exercise of the Option and acquisition of the Optioned Shares. The Board may,
in its discretion and subject to such rules as the Board may adopt, permit
an Optionee to pay any or all taxes associated with such exercise in cash, by
tendering or arranging to have sold the appropriate number of Common Shares,
including the Optioned Shares being delivered in connection with the exercise,
or by a combination of these methods. If Common Shares are used to satisfy
withholding tax obligations, such Common Shares shall be valued based on the
fair market value thereof as of the date when the withholding for taxes is
required to be made. Notwithstanding the foregoing, except as otherwise
provided by the Board or in the terms of the Option, the Company shall have the
right to require an Optionee to pay cash to satisfy withholding taxes as a
condition to the delivery of any Optioned Shares being acquired upon exercise
under the Plan.

 12
 

SCHEDULE A

SHARE OPTION PLAN

OPTION COMMITMENT

Notice is hereby given
that, effective this · day of ·, 200· (the “Effective Date”)
Storm Cat Energy Corporation (the “Company”) has granted to · (the “Service Provider”),
an Option to acquire · Common Shares (“Optioned’
Shares”) up to 5:00 p.m. Vancouver Time on the · day of ·, 200· (the “Expiry Date”) at an
Exercise Price of CDN$· per share.

At the date of grant of
the Option, the [Company’s Common Shares are listed for
trading on the TSX Venture and the Company is classified as a Tier · Issuer / Company’s Common
Shares are listed for trading on the TSX].

Optioned Shares will vest
and may be exercised as follows:

·       in
accordance with the vesting provisions set out in Schedule B of the Plan

or

·       as
follows:  ·

The grant of the Option
evidenced hereby is made subject to the terms and conditions of the Company’s
Amended & Restated Share Option Plan (the “Plan”) dated for reference
June 27, 2006, the terms and conditions of which are hereby incorporated
herein. The Company will provide you with a copy of the Plan upon your request.

To exercise your Option,
deliver a written notice specifying the number of Optioned Shares you wish to
acquire, together with cash or a certified cheque payable to the Company for
the aggregate Exercise Price, to the Company. A certificate for the Optioned
Shares so acquired will be issued by the Company’s transfer agent as soon as
practicable thereafter and will bear a minimum four month non-transferability
legend from the date of this Option Commitment. [Tier 1
Issuers on the TSX Venture and companies listed on the TSX may grant stock
options without a hold period, provided the exercise price of the options has
been set at or above the market price of the Company’s shares on such stock
exchange rather than below.]

The Company and the
Service Provider represent that the Service Provider under the terms and conditions
of the Plan is a bona fide [EMPLOYEE/ CONSULTANT/MANAGEMENT COMPANY EMPLOYEE] · of the Company, entitled to
receive Options under Exchange Policies (as such term is defined in the Plan).

STORM CAT ENERGY CORPORATION

	
  

  	
   

  
	
  Authorized
  Signatory

  

 

 13
 

SCHEDULE B

SHARE OPTION PLAN

(See Section 3.8 of the Plan)

VESTING SCHEDULE

1.             Options granted
pursuant to the Plan to Directors, Officers and all Employees employed by the
Company for a period of more than six months at the time the Option is granted
will vest as follows:

(a)           1¤3 of the total
number of Options granted will vest six months after the date of grant;

(b)           a further 1¤3 of the total
number of Options granted will vest one year after the date of grant; and

(c)           the remaining 1¤3
of the total number of Options granted will vest eighteen months after the date
of grant.

2.             Options granted
pursuant to the Plan to an Employee who has been employed by the Company for a
period of less than six months at the time the Option is granted will vest as
follows:

(a)           1¤3 of the total
number of Options granted will vest one year after the date of grant;

(b)           a further 1¤3 of the total
number of Options granted will vest eighteen months after the date of grant;
and

(c)           the remaining 1¤3
of the total number of Options granted will vest two years after the date of
grant.

3.             Options granted to
Consultants retained by the Company pursuant to a short term contract or for a
specific project with a finite term, will be subject to such vesting provisions
determined by the Board of Directors of the Company at the time the Option
Commitment is made, subject to Regulatory Approval.

 

 14Exhibit 10.2

STORM CAT ENERGY CORPORATION

(the “Company”)

RESTRICTED SHARE UNIT PLAN

Dated for reference June 21,
2007

1.                                                                                      PURPOSE
AND INTERPRETATION

1.1                                                                               Purpose

The purpose of this Plan
is to enhance the Company’s ability to attract and retain individuals with
experience and ability to serve as directors, officers, employees and
consultants of the Company. This Plan is intended to promote the alignment of
interests between the Company’s shareholders and such individuals by allowing
them to participate in the success of the Company.

1.2                                                                               Definitions

For the purposes of the
Plan, unless there is something in the subject matter or context inconsistent
therewith the following terms shall have the following meanings:

(a)                                  “Account” means the account set up on behalf of each
Participant in accordance with Section 4.8;

(b)                                 “Applicable Law” means all federal, provincial and foreign
laws and any regulations, instruments or orders enacted thereunder, and the
rules, regulations and policies of the Stock Exchanges applicable to the
Company and the Participants in respect of the operation and administration of
the Plan;

(c)                                  “Board” means the Board of Directors of the Company, as
constituted from time to time;

(d)                                 “Change in Control” shall have the meaning as defined in
Schedule A;

(e)                                  “Company” means Storm Cat Energy Corporation and includes,
unless the context otherwise requires, all of its Subsidiaries and successors
according to law;

(f)                                    “Consultant” means an individual (including an individual
whose services are contracted through a personal holding Company) engaged to
provide ongoing management or consulting services for the Company;

(g)                                 “Eligible Person” means, at the Grant Date, any director,
officer, employee or Consultant of the Company;

(h)                                 “Fair Market Value” means, with respect to each vested RSU
on the Vesting Date, the closing price per Share on the Vesting Date on the TSX
Venture Exchange or the Toronto Stock Exchange (depending on which Stock
Exchange the Shares are listed for trading on such date) or, if there is no
closing price on the Vesting Date, the last preceding closing price per Share
on such Stock Exchange;

(i)                                     “Grant Date” means the date of grant of an RSU by the Board
or such other date as may be specified by the Board at the time of the
authorization of the grant;

(j)                                     “Insider” shall have the meaning ascribed to that term under
the Securities Act and applicable Stock Exchange policies;

(k)                                  “Participant” means an Eligible Person to whom or which RSUs
have been granted;

(l)                                     “Plan” means this Restricted Share Unit Plan of the Company,
as may be amended;

 1
 

(m)                               “Plan Limit” means the maximum number of Shares that are
issuable under the Plan in accordance with Section 4.2;

(n)                                 “Regulatory Approval” means the approval of any Stock
Exchange or any other regulatory authority or governmental agency having lawful
jurisdiction over the Plan and any RSUs granted hereunder.

(o)                                 “Restricted Share Unit” or “RSU”
means a unit credited by means of a bookkeeping entry on the books of the
Company to a Participant’s Account in accordance with the terms and conditions
of the Plan;

(p)                                 “RSU Agreement” means an agreement, substantially in the form
of the agreement set out in Schedule B, between the Company and a Participant
setting out the terms of the RSUs granted to the Participant;

(q)                                 “Securities Act” means the Securities
Act (British Columbia), R.S.B.C. 1996 c. 418, as amended from time
to time;

(r)                                    “Shares” means the common shares in the capital of the
Company;

(s)                                  “Share Compensation Arrangement” means any share option plan,
employee stock purchase plan or any other compensation or incentive mechanism
involving the issuance or potential issuance of Shares, including a share
purchase from treasury which is financially assisted by the Company by way of a
loan, guarantee or otherwise;

(t)                                    “Stock Exchanges” means any stock exchanges or markets on
which the Shares are listed for trading at the relevant time; and

(u)                                 “Subsidiary” means any corporation that is a subsidiary of
the Company as defined in the Securities Act; and

(v)                                 “Vesting Date” means the date the RSUs of a Participant vest
in accordance with Section 4.5 and relevant RSU Agreement.

1.3                                                                               Use
of Gender and Number

Words importing the
singular number only shall include the plural and vice versa and words
importing the masculine shall include the feminine.

1.4                                                                               Governing
Law

The Plan and all matters
to which reference is made herein shall be governed by and interpreted in
accordance with the laws of the Province of British Columbia and the federal
laws of Canada applicable therein.

2.                                                                                      ESTABLISHMENT
OF THE PLAN

2.1                                                                               Effective
Date

There is hereby
established a Restricted Share Unit Plan effective as of June 27, 2006.

2.2                                                                               Eligibility

RSUs may be granted
hereunder to Eligible Persons from time to time by the Board, subject to the limitations
set forth in herein.

 2
 

2.3                                                                               Compliance
with Applicable Law

The Plan, the grant of
RSUs under the Plan, and the Company’s obligation to issue Shares following the
vesting of RSUs, will be subject to Applicable Law. Shares issued to
Participants pursuant to the vesting of RSUs may be subject to limitation on
sale or resale under Applicable Law.

Any inconsistencies
between the Plan and Applicable Law, whether due to inadvertence or to changes
in such Applicable Law, will be resolved in favour of the latter.

3.                                                                                      ADMINISTRATION

3.1                                                                               Use
of Committees

The Board may delegate
all or such portion of its powers under this Plan as it may determine to a duly
appointed committee of the Board or a senior officer of the Company, either
indefinitely or for such period of time as it may specify, and thereafter such
committee or senior officer may exercise the powers and discharge the duties of
the Board in respect of the Plan so delegated to the same extent as the Board
is hereby authorised so to do. If such a committee or senior officer is
appointed for this purpose, all references herein to the Board will be deemed
to be references to such committee or senior officer. Notwithstanding the
foregoing, the Board will not be permitted to delegate its powers hereunder to
an executive officer to the extent that such powers relate to the participation
in this Plan by senior officers and directors of the Company.

3.2                                                                               Authority
of the Board

The Board shall be
responsible for the general administration of the Plan and the proper execution
of its provisions, the interpretation of the Plan and the determination of all
questions arising hereunder. Subject to the limitations of the Plan, without
limiting the generality of the foregoing, the Board has the power and authority
to:

(a)                                  Determine
which Eligible Persons are to be granted RSUs and the number of RSUs to be
issued to those Eligible Persons;

(b)                                 determine
the terms under which such RSUs are granted including, without limitation,
those related to transferability, vesting and forfeiture;

(c)                                  prescribe
the form of RSU Agreement with respect to a particular grant of RSUs;

(d)                                 interpret
the Plan and determine all questions arising out of the Plan and any RSUs
granted pursuant to the Plan, which interpretations and determinations will be
conclusive and binding on the Company and all other affected persons;

(e)                                  determine
whether a Participant is to be issued a Share or a cash payment equal to the
Fair Market Value of such Share in satisfaction of each vested RSU;

(f)                                    prescribe,
amend and rescind rules and procedures relating to the Plan;

(g)                                 subject
to the provisions of the Plan and subject to such additional limitations and
restrictions as the Board may impose, delegate to one or more officers of the
Company some or all of its authority under the Plan; and

(h)                                 employ
such legal counsel, independent auditors, third party service providers and
consultants as it deems desirable for the administration of the Plan and to
rely upon any opinion or computation received there from.

 3
 

The Board’s guidelines,
rules, regulations, interpretations and determinations shall be conclusive and
binding upon the Company and all other persons, including, in particular and
without limitation, the Participants.

4.                                                                                      GRANT
OF RSUs

4.1                                                                               RSU
Agreement

Upon the grant of RSUs,
the Company will deliver to the Participant an RSU Agreement dated as of the
Grant Date, containing the terms of the RSUs and executed by the Company, and
upon delivery to the Company of the RSU Agreement executed by the Participant,
such Participant will be a participant in the Plan and have the right to
receive Shares or cash payments on the terms set out in the RSU Agreement and
in the Plan. Subject to any specific variations approved by the Board, all
terms and conditions set out herein will be deemed to be incorporated into and
form part of each RSU Agreement made hereunder.

4.2                                                                               Shares
Reserved

The maximum number of
Shares which may be made subject to issuance under RSUs granted under this Plan
is 10,000,000 Shares, less the total of:

(a)                                  the
aggregate number of Shares that are, from time to time, subject to issuance
under outstanding rights that have been issued by the Company under any other
Share Compensation Arrangement, including outstanding Share purchase options
issued by the Company under its Amended and Restated Share Option Plan; and

(b)                                 the
net number of Shares that, subsequent to the date hereof, are issued pursuant
to a right granted under this Plan or any other Share Compensation Arrangement,

subject to adjustment
under Section 6.1 (the “Plan Limit”).

For greater certainty:

(c)                                  in
the event a right to acquire Shares under this Plan or any other Share
Compensation Arrangement expires unexercised or is terminated by reason of
dismissal of the holder of the right for cause or is otherwise lawfully
cancelled prior to such right resulting in the issuance of Shares, then the
Shares that were issuable thereunder will be added back into the aggregate
number of Shares that may be, from time to time, made subject to issuance under
a right granted under this Plan or any other Share Compensation Arrangement;
and

(d)                                 if
an optionee under the Company’s Amended and Restated Share Option Plan pays the
exercise price (and/or any applicable withholding taxes) of an option by
surrendering previously owned Shares, or arranges to have the appropriate
number of optioned shares otherwise issuable upon exercise of an option
withheld, then the Shares that would have been issued upon exercise of the
option equal in number to the surrendered and/or withheld Optioned Shares and
Common Shares shall not count towards the maximum number of Shares that may be
made subject to issuance under this Plan or any other Share Compensation
Arrangement.

4.3                                                                               Limitations
of RSUs to Insiders

Notwithstanding anything
in this Plan to the contrary,

(a)                                  the
aggregate number of Shares that may be made subject to issuance to Insiders
pursuant to RSUs granted under the Plan and under any other Share Compensation
Arrangement may not exceed 10.0% of the number of Shares outstanding at the Grant
Date (on a non-diluted basis); and

 4
 

(b)                                 the
aggregate number of Shares that may be issued to Insiders pursuant to RSU’s
granted under the Plan and under any other Share Compensation Arrangement,
within any one year period, may not exceed 10.0% of the number of Shares
outstanding at the end of such period (on a non-diluted basis).

4.4                                                                               Limitations
of RSUs to any One Person

Unless
permitted by Regulatory Approval and, if required by Applicable Law,
shareholder approval is obtained, the maximum number of Shares which may be
reserved for issuance, from time to time, to any one Eligible Person under the
Plan and any Share Compensation Arrangement may not exceed 5.0% of the number
of Shares outstanding at the Grant Date (on a non-diluted basis).

4.5                                                                               Grant
and Vesting of RSUs

(a)                                  Subject
to the terms of the Plan, the Board may from time to time grant to any Eligible
Person the number of RSUs the Board deems appropriate.

(b)                                 RSUs
shall consist of a grant of units, each of which represents the right of the
Participant to receive one Share or a cash payment equal to the Fair Market
Value of such Share, subject to the terms and conditions contained herein and
such additional terms and conditions as the Board deems appropriate, consistent
with Applicable Law.

(c)                                  The
Board shall have the discretion to determine the Vesting Date for each RSU or
any other vesting requirements (to be set forth in the RSU Agreement).

4.6                                                                               Third
Party Offer

If an
offer to purchase all of the outstanding Shares of the Company is made by a
third party, the Board may, in its sole discretion, to the extent permitted by
Applicable Law and upon giving each Participant written notice to that effect,
require the acceleration of the vesting of RSUs. All determinations of the
Board under this Section will be final, binding and conclusive for all
purposes.

4.7                                                                               Change
in Control

Upon
the occurrence of a Change in Control, all outstanding RSUs at that time shall
automatically and irrevocably vest in full.

4.8                                                                               Participant’s
Account

The
Company shall maintain an Account for each Participant and, upon the grant of
RSUs to a Participant, the Board shall cause the Participant’s Account to be
credited with the number of RSUs granted. Any RSU held by a Participant that
fails to vest or that vests and a Share or cash payment equal to the Fair
Market Value of such Share is delivered to a Participant in satisfaction of
such vested RSU shall be cancelled from the Participant’s Account.

4.9                                                                               Vested
RSUs

A
Participant may elect, by notice to the Company prior to the applicable Vesting
Date, to receive for each RSU that has vested pursuant to the Plan and in
accordance with and subject to the terms of the RSU Agreement relating to such
RSU, one Share or a cash payment equal to the Fair Market Value of such Share.
Notwithstanding any such election by a Participant, the Board reserves the
right to determine whether a Participant is to be issued a Share or a cash
payment equal to the Fair Market Value of such Share in satisfaction of each
vested RSU.

The
issuance of Shares or the cash payment to a Participant by the Company in
satisfaction of vested RSUs will be made as soon as practicable after the
Vesting Date.

 5
 

4.10                                                                        Withholding
Tax

The
Participant will be solely responsible for paying any applicable withholding
taxes arising from the grant or vesting of any RSU and payment is to be made in
a manner satisfactory to the Company. Notwithstanding the foregoing, the
Company will have the right to withhold from any cash amounts otherwise due or
to become due from the Company to the Participant, an amount equal to any such
taxes.

Notwithstanding
the foregoing, immediately upon delivery of any Shares pursuant to
Section 4.9, the Company shall have the right to require that a
Participant sells a given number of Shares, the net proceeds of which shall be
sufficient to cover any applicable withholding taxes and other source
deductions required by Applicable Law to be withheld by the Company in
connection with the total payments made in satisfaction of the Participant’s
vested RSUs.

4.11                                                                        Termination
of Employment

Unless
otherwise determined by the Board, in its sole discretion, or specified in the
applicable RSU Agreement:

(a)                                  upon
the voluntary resignation or the termination for cause of a Participant, all of
the Participant’s RSUs which remain unvested in the Participant’s Account shall
be forfeited without any entitlement to such Participant. If the Participant
has an employment or consulting agreement with the Company, the term “cause” shall have the meaning given to it in the employment
or consulting agreement.

(b)                                 upon
the termination without cause or death of a Participant, the Participant or the
Participant’s beneficiary, as the case may be, shall have a number of RSUs
become vested in a linear manner equal to the sum for each grant of RSUs of the
original number of RSUs granted multiplied by the number of completed months of
employment since the Grant Date divided by the number of months required to
achieve the full vesting of such grant of RSUs reduced by the actual number of
RSUs that have previously become vested in accordance with Section 4.5.
Such vested RSUs shall be settled in accordance with Section 4.9.

4.12                                                                        No
Compensation for Cancelled RSUs

Section 4.11
applies regardless of whether the Participant received compensation in respect
of dismissal or was entitled to a period of notice of termination which would
otherwise have permitted a greater portion of the RSUs to vest with the
Participant. Except as expressly permitted by the Board, all RSUs will cease to
vest as at the date upon which the Participant ceases to be an Eligible Person.
Participants will not be entitled to any compensation in respect of any RSU
that has not vested.

4.13                                                                        Non-Transferability
of RSUs

The
assignment or transfer of RSUs, or any other benefits under the Plan, shall not
be permitted other than by operation of law.

5.                                                                                      AMENDMENT

5.1                                                                               Amendment
and Termination of Plan

The
Board reserves the right, in its absolute discretion, subject to any necessary
Regulatory Approvals, to at any time amend, suspend, terminate or discontinue
the Plan, or revoke or alter any action taken in connection therewith, except
that no general amendment or suspension of the Plan will, without the written
consent of all holders of outstanding RSUs, impair the rights and entitlements
of any such holder pursuant to then-outstanding RSUs unless such amendment is
the result of a change in the rules and policies of the TSX, all without
shareholder or Participant approval, except that this discretionary authority
will not extend to the directors the authority to increase the Plan Limit
without shareholder 

 6
 

approval, excluding, where required by the policies of
the TSX, the votes attaching to shares held by persons eligible to be
Participants under the Plan. If the Plan is terminated, the provisions of the
Plan and any administrative guidelines, and other rules and regulations
adopted by the Board and in force at the time of the Plan shall continue in
effect during such time as an RSU or any rights pursuant thereto remain
outstanding.

5.2                                                                               Powers
of Board Survive

The
full powers of the Board provided for in the Plan will survive the termination
of the Plan until all RSUs have been vested in full or have otherwise expired.

5.3                                                                               Amendment
of Outstanding RSUs

Subject
to Regulatory Approval, the Board may, without shareholder or Participant
approval, amend or modify in any manner an outstanding RSU to the extent that
the Board would have had the authority to initially grant such award as so
modified or amended, including without limitation, to change the date or dates
as of which an RSU vests, except that no amendment will, without the written
consent of all affected Participants, alter or impair any RSU previously
granted under the Plan unless as a result of a change in Applicable Law or the
Company’s status or classification thereunder.

6.                                                                                      ADJUSTMENT
TO SHARES

6.1                                                                               Adjustments

Appropriate
adjustments in the number of Shares subject to the Plan, as regards RSUs
granted or to be granted and the number of Shares subject to RSUs, will be
conclusively determined by the Board to give effect to adjustments in the
number of Shares resulting from subdivisions, consolidations, substitutions, or
reclassifications of the Shares, the payment of stock dividends by the Company
(other than dividends in the ordinary course) or other relevant changes in the
capital of the Company or from a proposed merger, amalgamation or other
corporate arrangement or reorganization involving the exchange or replacement
of Shares of the Company for those in another corporation. Any dispute that
arises at any time with respect to any such adjustment will be conclusively
determined by the Board, and any such determination will be binding on the
Company, the Participant and all other affected parties.

6.2                                                                               Further
Adjustments

Subject
to Section 6.1 and Applicable Law, if, because of a proposed merger,
amalgamation or other corporate arrangement or reorganization, the exchange or
replacement of Shares of the Company for those in another corporation is
imminent, the Board may, in a fair and equitable manner, determine the manner
in which all unvested RSUs rights granted under the Plan will be treated
including, without limitation, requiring the acceleration of the time for the
vesting of such RSUs and the time for the fulfilment of any conditions or
restrictions on such vesting. All determinations of the Board under this
Section will be final, binding and conclusive for all purposes.

6.3                                                                               No
Fractional Shares

No
fractional Shares shall be issued upon the vesting of RSUs granted under the
Plan and, accordingly, if a Participant would become entitled to a fractional
Share upon the vesting of an RSU, such Participant shall only have the right to
the next lowest whole number of Shares and no payment or other adjustment will
be made with respect to the fractional interest so disregarded, and any
fractional interest in a Share that would otherwise be delivered upon the
vesting of RSUs will be cancelled.

 7
 

6.4                                                                               Limitations

The grant of RSUs under
the Plan will in no way affect the Company’s right to adjust, reclassify,
reorganise or otherwise change its capital or business structure or to merge,
amalgamate, reorganise, consolidate, dissolve, liquidate or sell or transfer
all or any part of its business or assets or engage in any like transaction.

7.                                                                                      GENERAL

7.1                                                                               Unfunded
Plan

The Plan is intended to
constitute an “unfunded” plan for incentive compensation. Nothing contained in
the Plan (or in any RSU Agreement or other documentation related thereto) shall
give a Participant any rights that are greater than those of a general creditor
of the Company.

7.2                                                                               Compliance
with Legislation

The Plan, the grant and
vesting of RSUs hereunder and the Company’s obligation to deliver Shares or
cash payments upon vesting of RSUs is subject to Applicable Law and to such
Regulatory Approvals as may, in the opinion of counsel to the Company, be
required. Each RSU Agreement will contain such provisions as in the opinion of
the Board are required to ensure that no Shares are issued on the vesting of an
RSU unless the issuance of such Shares will be exempt from all registration and
qualification requirements of securities laws of any jurisdiction and will be
permitted under Applicable Law. The Company shall not be obliged by any
provision of the Plan or the grant of any RSU hereunder to issue or sell Shares
in violation of Applicable Law or any condition of any Regulatory Approval. No
RSU shall be granted and no Shares issued or sold hereunder where such grant,
issue or sale would require registration of the Plan or of Shares under the securities
laws of any jurisdiction and any purported grant of any RSU or issue or sale of
Shares hereunder in violation of this provision shall be void. In addition, the
Company shall have no obligation to issue any Shares pursuant to the Plan
unless such Shares shall have been duly listed, upon official notice of
issuance, with the Stock Exchanges. Shares issued and sold to Participants
pursuant to the vesting of RSUs may be subject to limitations on sale or resale
under Applicable Law. In particular, if required by Applicable Law, an RSU
Agreement may provide that shareholder approval to the grant of an RSU must be
obtained prior to the vesting of the RSU or to the amendment of an RSU
Agreement.

7.3                                                                               Non-Exclusivity

Nothing contained in the
Plan will prevent the Board from maintaining or adopting other or additional
Share Compensation Arrangements, subject to obtaining prior Regulatory Approval
and shareholder approval, if required.

7.4                                                                               Employment
and Services

Nothing contained in the
Plan or in any RSU Agreement will confer upon or imply in favour of any
Eligible Person or Participant any right with respect to office, employment or
provision of services with the Company, or interfere in any way with the right
of the Company, to lawfully terminate the Eligible Person or Participant’s
office, employment or service at any time pursuant to the arrangements
pertaining to same. Participation in the Plan by an Eligible Person will be
voluntary.

7.5                                                                               Change
of Status

A change in the status,
office, position or duties of a Participant from the status, office, position
or duties held by such Participant on the date on which an RSU was granted to
such Participant will not result in a change in the terms of such RSU provided
that such Participant remains an Eligible Person.

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7.6                                                                               No
Representation or Warranty

The Company makes no
representation or warranty as to the future market value of Shares issued in
accordance with the provisions of the Plan or to the effect of the Income Tax Act (Canada), the United States Internal Revenue
Code, or any other taxing statute governing the RSUs or the Shares issuable
thereunder or the tax consequences to a Participant. Compliance with Applicable
Law as to the disclosure and resale obligations of each Participant is the
responsibility of such Participant and not the Company.

7.7                                                                               Rights
as a Shareholder

Nothing contained in the
Plan nor in any RSU granted thereunder shall be deemed to give any Participant
any interest or title in or to any Shares of the Company or any rights as a
shareholder of the Company or any other legal or equitable right against the
Company whatsoever other than with respect to Shares issued following the
vesting of RSUs.

7.8                                                                               Discretion
of Board

Subject to the Board’s
powers of delegation provided for under this Plan, the awarding of RSUs to any
Eligible Person is a matter to be determined solely in the discretion of the
Board. The Plan shall not in any way fetter, limit, obligate, restrict or
constrain the Board with regard to the allotment or issue of any Shares or any other
securities in the capital of the Company or any of its subsidiaries other than
as specifically provided for in the Plan.

7.9                                                                               Notices

The form of all
communication relating to the Plan shall be in writing and delivered by
recognised overnight courier, certified mail, fax or electronic mail to the
proper address or, optionally, to any individual personally. Except as
otherwise provided in any RSU Agreement, all notices to the Company or the
Board shall be addressed to the Company at its principal business office in
Denver, Colorado, Attn: Chief Financial Officer. All notices to Participants,
former Participants, beneficiaries or other persons acting for or on behalf of
such persons which are not delivered personally to an individual shall be
addressed to such person by the Company or its designee at the last address for
such person maintained in the records of the Company.

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SCHEDULE A—CHANGE IN CONTROL

“Change in
Control” shall be deemed to have occurred in respect of the Company
if:

(a)                                  any
individual, corporation, partnership, trust or association is or becomes the
beneficial owner, directly or indirectly, of voting securities of the Company
representing fifty percent (50%) or more of the combined voting power, of the
Company’s then outstanding voting securities; or

(b)                                 individuals
who on a particular date constituted the Board of Directors (together with any
new directors whose election by the Board of Directors or whose nomination for
election to the Board of Directors by the Company’s shareholders was approved
by a vote of at least two-thirds of the members of the Board of Directors then
in office who either were members of the Board of Directors on such date or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the members of the Board of Director of
the Company then in office (a “Change in Board Majority”),
and a an individual, corporation, partnership, trust or association has become,
at any time during the 120 days before the Change in Board Majority, the
ultimate beneficial owner of more than 331¤3% of the total
voting power of the capital stock of the Company of any class or kind
ordinarily having the power to vote for the election of directors of the
Company on a fully diluted basis; or

(c)                                  there
is consummated either (i) a merger, consolidation, reorganization, share
exchange or issuance of securities involving the Company (each a “Business Combination”) unless, immediately after such
Business Combination, all or substantially all of the individuals and entities
who were the beneficial owners of voting capital of the Company immediately
before the Business Combination continue to beneficially own, directly or
indirectly, more than 662¤3%
of the then outstanding voting capital of the resulting or acquiring entity in
such Business Combination (which shall include, without limitation, a
corporation which as a result of such transaction owns the Company or
substantially all the Company’s assets either directly or indirectly) in
substantially the same proportions as their respective ownership in the
outstanding voting capital immediately before such Business Combination; or
(ii) the sale or other disposition of any of the Company’s assets for
gross proceeds equal to at least two-thirds of the then appraised private
enterprise value of the Company; or

(d)                                 proceedings
are commenced by the Company to seek its reorganization, arrangement or the
composition or readjustment of its debt or to obtain relief in respect of the
Company, in each instance, under any law relating to bankruptcy, insolvency or
reorganization; or

(e)                                  the
Board of Directors of the Company adopts a resolution to the effect that, for
the purposes of the Plan, a Change in Control has occurred.

 10
 

SCHEDULE B — FORM OF RSU AGREEMENT

STORM CAT
ENERGY CORPORATION

RESTRICTED
SHARE UNIT PLAN — RSU AGREEMENT

This RSU Agreement is entered into between Storm Cat
Energy Corporation (the “Company”) and
the Eligible Person named below, pursuant to the Company’s Restricted Share
Unit Plan (the “Plan”), a copy of which is
attached hereto, and confirms that:

1.                                       on
                                
(the “Grant Date”);

2.                                                                       
(the “Eligible Person”);

3.                                       was
granted                                 
Restricted Share Units (the “RSUs”), in
accordance with the terms of the Plan;

4.                                       the
RSUs will vest as follows:

Number of RSUs                  Vesting
On

 

 

 

all on the terms and subject to the conditions set out in the Plan.

By signing this agreement, the Participant:

(a)                                  acknowledges
that he or she has read and understands the Plan, agrees with the terms and
conditions thereof which shall be deemed to be incorporated into and form part
of this RSU Agreement (subject to any specific variations contained in this RSU
Agreement);

(b)                                 acknowledges
that he or she will be solely responsible for paying any applicable withholding
taxes arising from the grant or vesting of any RSU, as provided in
Section 4.10 of the Plan;

(c)                                  where
allowed by applicable legislation, agrees to assume any employer’s social security
contributions due upon the grant or vesting of any RSU;

(d)                                 agrees
that an RSU does not carry any voting rights;

(e)                                  acknowledges
that the value of the RSUs granted herein is in C$ denomination, and such value
is not guaranteed;

(f)                                    recognises
that the value of an RSU upon delivery is subject to stock market fluctuations;
and

 11
 

(g)                                 recognises
that, at the sole discretion of the Company, the Plan can be administered by a
designee of the Company by virtue of paragraph 3.2(h) and any
communication from or to the designee shall be deemed to be from or to the
Company.

IN WITNESS WHEREOF
the Company and the Eligible Person have executed this RSU Agreement as of                                 .

STORM CAT ENERGY CORPORATION

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name of Eligible Person

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Signature of Eligible Person

  	
   

  

 

Note to Plan Participants

This Agreement must be
signed where indicated and returned to the Company within 30 days of
receipt.  Failure to acknowledge
acceptance of this grant will result in the cancellation of your RSUs.

 12

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