Document:

Exhibit 10.8

 

GEOPETRO
RESOURCES COMPANY

(the “Company”)

 

2004
STOCK OPTION AND APPRECIATION RIGHTS PLAN

 

1.                                       Purpose of the Plan. The purpose of
this Plan is to attract, motivate, reward and retain the best available
personnel for positions of substantial responsibility by providing additional
incentives to the directors, officer, employees and consultants (as permitted
by applicable law) of the Company and to promote the success of the Company’s
business. This plan replaces and supercedes the 2001 Stock Incentive Plan of
the Company.

 

2.                                       Definitions. As used herein, the
following definitions shall apply:

 

2.1                                 “2001 Plan” means the 2001 Stock Incentive Plan of the
Company adopted on September 10, 2001, which 2001 Plan is replaced and
superceded by this Plan.

 

2.2                                 “Affiliate” of the Company or a Person includes (i) any
Person directly or indirectly controlling, controlled by or under common
control with the Company or such Person, (ii) any Person owning or
controlling 10% or more of the outstanding voting securities of such Person, (iii) any
officer, director, partner or member of such Person, and (iv) if such
Person is an officer, director, partner or member, any corporation,
partnership, limited liability company or other entity for which such Person
acts in any such capacity. Such term when used in connection with or in the
context of an Incentive Stock Option shall be limited to the Parent and any
Subsidiary of the Company but otherwise shall be broadly construed as provided
in the preceding sentence when used in connection with any other Award.

 

2.3                                 “Applicable Laws” means the legal requirements relating to
the administration of stock incentive plans, if any, under applicable
provisions of federal and state securities laws, the corporate laws of
California and the Code, the rules of any applicable stock exchange or
national market system, and the rules of any foreign jurisdiction
applicable to Awards granted to residents therein.

 

2.4                                 “Award” means an award by the Company of any Options or
Stock Appreciation Rights or any combination thereof, whether alternative or
cumulative, authorized by and granted under this Plan.

 

2.5                                 “Award Agreement” means the written agreement entered into
between the Company and each director, officer, or Consultant receiving the Award
of Options or Stock Appreciation Rights under this Plan setting forth the
number of Stock Options or Stock Appreciation Rights awarded to such Person by
the Company, vesting rights, restrictions and other terms and provisions
relating to such Award as authorized by the Board or Committee, as the case may be.

 

2.6                                 “Award Date” means the date upon which the Board or the
Committee, as the case may be, grants an Award under this Plan or such
other date as designated as the Award Date by the Board or Committee at the
time the Award is made.

 

2.7                                 “Board” means the Board of Directors of the Company.

 

2.8                                 “Code” means the Internal Revenue Code of 1986, as amended.

 

2.9                                 “Common Stock” means the no par value common stock of the
Company.

 

2.10                           “Company” means GeoPetro Resources Company, a California
corporation.

 

2.11                           “Committee” means the Compensation Committee which may be
appointed by the Board, in its sole discretion, on or after the adoption of
this Plan in accordance with Section 4.1 of this Plan and shall 

 

 

refer to the Board if at
any time after the adoption of this Plan, the Compensation Committee is no
longer in existence or the Board has withdrawn authority and power of such
Committee to administer this Plan.

 

2.12                           “Commission” shall mean the United States Securities and
Exchange Commission.

 

2.13                           “Consultant” means any person who is engaged by the Company
or any Subsidiary or Affiliate to render consulting services, and includes any
director of the Company, whether compensated for such services or not, who is
not an officer or Employee of the Company.

 

2.14                           “Continuous Status as an Employee or Consultant” means the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of sick leave, military leave, or any other
leave of absence approved by the Board; provided that such leave is for a
period of not more than ninety (90) days or reemployment upon the expiration of
such leave is guaranteed by contract or statute.

 

2.15                           “Corporate Transaction” means any of the following
transaction:

 

(a)                                  a
merger or consolidation in which the Company is not the surviving entity,
except for a transaction the principal purpose of which is to change the state
in which the Company is incorporated;

 

(b)                                 the
sale, transfer or other disposition of all or substantially all of the assets
of the Company;

 

(c)                                  the
complete liquidation or dissolution of the Company;

 

(d)                                 any
reverse merger or series of related transactions culminating in a reverse
merger (including, but not limited to, a tender offer followed by a reverse
merger) in which the Company is the surviving entity but in which securities
possessing more than fifty percent (50%) of the total combined voting power of
the Company’s outstanding securities are transferred to a person or persons
different from those who held such securities immediately prior to such merger
or the initial transaction culminating in such merger but excluding any such
transaction or series of related transactions that the Board or the
Committee, if applicable, determines shall not be a Corporate Transaction; or

 

(e)                                  acquisition
in a singe or series of related transactions by any person or related
group of persons (other than the Company or by a Company-sponsored employee
benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of
the Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company’s outstanding securities but
excluding any such transaction or series of related transactions that the
Board or the Committee, if applicable, determines shall not be a Corporate
transaction.

 

2.16                           “Employee” means any person employed by the Company or any
Parent, Subsidiary or other Affiliate of the Company. A director of the Company
or any Parent, Subsidiary or other Affiliate who is an officer or an employee
shall be treated for purposes of this Plan as an Employee. The payment of a
director’s fee by the Company shall not be sufficient to constitute “employment”
by the Company.

 

2.17                           “Exchange” means the Toronto Stock Exchange or any other
exchange on which the Shares are or may be listed and posted for trading
from time to time provided that if the Company’s Shares are listed on more than
one exchange, then Exchange shall mean the principal exchange upon which the
Company’s Shares are trading based on the volume of Shares traded on an annual
basis.

 

2.18                           “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time.

 

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2.19                                                                           “Fair Market Value” means the fair market value of the
Shares awarded under a Stock Appreciation Rights Award or the Shares underlying
any Options granted as an Award under this Plan as determined in accordance
with Section 8.2.2 of this Plan.

 

2.20                           “Incentive Stock Option” means an Option which is intended
to qualify as an incentive stock option within the meaning of Section 422
of the Code and the regulations adopted thereunder and which shall be clearly
identified as such in the written Stock Option Agreement provided by the
Company to each Optionee granted an Incentive Stock Option under this Plan.

 

2.21                           “Insider” means (a) an insider as defined under Section 1(i) of
the Securities Act (Alberta), other than a
person who falls within that definition solely by virtue of being a director or
senior officer of a Subsidiary; and (b) an associate as defined under Section 1(a.1)
of the Securities Act (Alberta) of any person
who is an insider by virtue of (a) above.

 

2.22                           “Market Price” at any date in respect of the Shares shall be
the weighted average closing price of the five previous days on which the
Shares traded on the Exchange immediately preceding the relevant date or if the
Shares are not then listed and posted for trading on an Exchange at such price
as may be determined by the Board or the Committee, acting reasonably.

 

2.23                           “Nonqualified Stock Option” means an Option granted under
this Plan which does not qualify as an Incentive Stock Option. If the Award of
an Option is intended to be a Nonqualified Stock Option, such option shall be
designated as a Nonqualified Stock Option in the written Stock Option Agreement
provided by the Company to each Optionee granted an Option under this Plan. To
the extent that the aggregate Fair Market Value of Optioned Stock to which
Incentive Stock Options granted under Options to an Employee are exercisable
for the first time during any calendar year (under the Plan and all plans of
the Company or any Parent or Subsidiary) exceeds $100,000, such Options, to the
extent of such excess, shall be treated as Nonqualified Stock Options under
this Plan. The aggregate Fair Market Value of the Optioned Stock shall be
determined as of the date of grant of each Option and the determination of
which Incentive Stock Options shall be treated as qualified incentive stock
options under Section 422 of the Code and the portion of any Incentive
Stock Options exercisable by an Optionee for the first time in a particular year
in excess of the $100,000 limitation shall be treated as Nonqualified Stock
Options based on the order in which such Options were granted in accordance
with Section 422(d) of the Code. Furthermore, an Option granted and
designated as an Incentive Stock Option which is disposed of within two (2) years
of the Award Date or within one (1) year after the Option is exercised
will be subsequently treated for tax purposes as a Nonqualified Stock Option.

 

2.24                           “Option” means an Incentive Stock Option, a Nonqualified
Stock Option or both as identified in a written Stock Option Agreement
representing such stock option granted pursuant to this Plan.

 

2.25                           “Option Price” means the price per Share at which Shares may be
purchased under the Option, as the same may be adjusted from time to time
in accordance with Article 8.2;

 

2.26                           “Optioned Stock” means the Common Stock subject to an
Option.

 

2.27                           “Optionee” means an Employee or Consultant who receives an
Option, provided, however, that the term “Optionee” when referring to or used
in the context of an Incentive Stock Option shall be limited to an Employee of
the Company or a Parent or Subsidiary of the Company.

 

2.28                           “Parent” means a “parent corporation,” whether now or
hereafter existing, as defined in Section 424(e) of the Code.

 

2.29                           “Person” shall mean any individual Employee or Consultant
depending on the context in which used in this Plan.

 

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2.30                           “Plan” means this 2004 Stock Option and Appreciation Rights
Plan.

 

2.31                           “Registration Date” means the first to occur of (i) the
closing of the first sale to the general public pursuant to a registration
statement filed with and declared effective by the Commission under the
Securities Act of (A) the Common Stock or (B) the same class of
securities of a successor corporation (or its Parent) issued pursuant to a
Corporate Transaction in exchange for or in substitution of the Common Stock;
and (iii) in the event of a Corporate Transaction, the date of the
consummation of the Corporate Transaction if the same class of securities
of the successor corporation (or its Parent) issuable in such Corporate
Transaction shall have been sold to the general public pursuant to a
registration statement filed with and declared effective by the Commission
under the Securities Act, on or prior to the date of consummation of such
Corporate Transaction.

 

2.32                           “Rule 16b-3” means Rule 16b-3 promulgated under
the Exchange Act or any successor thereto.

 

2.33                           “Securities Act” means the Securities Act of 1933, as
amended from time to time.

 

2.34                           “Share” means a share of the Common Stock of the Company, as
may be adjusted from time to time in accordance with Section 10 of
this Plan.

 

2.35                           “Stock Appreciation Right” means a right to receive cash or
Shares, or a combination thereof, the aggregate amount or value of which is
determined by reference to a change in the Market Price of the Common Stock and
is generally used in tandem with an Option.

 

2.36                           “Stock Compensation Arrangement” means any stock option, stock
option plan, stock appreciation right, 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 Corporation by way of a loan, guarantee or
otherwise.

 

2.37                           “Stock Option Agreement” means the agreement entered into
between the Company and each Optionee which shall set forth the terms and
conditions of each Option granted to each Optionee, including, without
limitation, the number of Shares of Optioned Stock underlying such Option, the
Option Price, vesting rights, exercise date and other terms and provisions of
each Option granted to such Optionee under such agreement.

 

2.38                           “Subsidiary” means a “subsidiary corporation,” whether now
or hereafter existing, as defined in Section 424(f) of the Code.

 

3.                                       Stock Subject to the Plan.

 

3.1                                 Reservation of Shares. Subject to
any adjustments which may be made under the provisions of Section 10
of the Plan, the maximum aggregate number of Shares which may be awarded,
optioned and sold under this Plan is 5,000,000 shares of Common Stock. The
Shares may be authorized, but unissued, or reacquired Common Stock.

 

3.2                                 Return of Optioned Stock. If an
Option should expire or become unexercisable for any reason without having been
exercised in full, the unpurchased Shares which were subject to an expired or
unexercisable Option, unless this Plan shall have been terminated, shall become
available for future grant of an Award under this Plan

 

3.3                                 Options Issued Under 2001 Plan. Optioned
Stock subject to Options issued under the 2001 Plan shall be considered to be
Shares which are awarded, optioned or sold under this Plan in accordance with Section 3.1.
Such Optioned Stock shall also count towards the number of Shares that are
subject to limits in accordance with Section 5.2.

 

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4.                                       Administration of the Plan.

 

4.1                                 Procedure. This Plan shall be
administered by the Committee. In administering this Plan, the following rules and
procedures shall apply:

 

4.1.1                        Administration with Respect to Directors and
Officers. Prior to the Registration Date, with respect to grants
of Awards to directors or Employees who are also officers or directors of the
Company, the Plan shall be administered by (A) the Board, or (B) the
Committee, which committee shall be constituted in such a manner as to
satisfy the Applicable Laws. On or after the Registration Date, with respect to
grants of Options to Employees who are also officers or directors of the
Company, the Plan shall be administered by (A) the Board if the Board may administer
the Plan in compliance with the rules under Rule 16b-3 promulgated
under the Exchange Act or any successor thereto (“Rule 16b-3”) relating to
the disinterested administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made, or (B) the
Committee, which committee shall be constituted to satisfy Applicable Laws and
to comply with the rules under Rule 16b-3 relating to the
disinterested administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made. Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. From time to time the Board may increase
the size of the Committee and appoint additional members thereof, remove
members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by the rules under Rule 16b-3 relating to the disinterested
administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made.

 

4.1.2                        Administration with Respect to Other Employees and
Consultants. With respect to grants of Awards and to Employees
or Consultants who are neither directors nor officers of the Company, the Plan
shall be administered by (A) the Board or (B) the Committee, which
committee shall be constituted in such a manner as to satisfy Applicable Laws. Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. From time to time the Board may increase
the size of the Committee and appoint additional members thereof, remove
members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.

 

4.1.3                        Multiple Administrative Bodies. The
Plan may be administered by different bodies with respect to directors,
officers, Consultants and Employees who are neither directors or officers.

 

4.1.4                        Awards by Committee. If the Company
registers any class of any equity security pursuant to Section 12 of
the Exchange Act, any grants of Awards under this Plan to Employees or
Consultants of the Company shall thereafter be made by the Committee.

 

4.1.5                        Term, Additions and Succession of Members.
Once appointed, the Committee shall continue to serve until otherwise directed
by the Board. From time to time, the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies
however caused, or remove all members of the Committee and thereafter directly
administer the Plan, and, if the Company registers any class of equity
security pursuant to Section 12 of the Exchange Act, all to the extent
permitted by the rules under Rule 16b-3 relating to the disinterested
administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made.

 

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4.1.6                        Vote of Members Entitled to Awards.
Members of the Committee, who are either eligible for Awards or have been
granted Awards may vote on any matters affecting the adoption of this
Plan, the administration of this Plan or the grant of any Awards pursuant to
this Plan, to the extent the Board has delegated such authority to the
Committee, and any such member may be counted in determining the existence
of a quorum at any meeting of the Committee during which action is taken with
respect to the granting of Awards to such Committee member.

 

4.1.7                        Committee Chair and Quorum. The
Committee shall select one of its members as chairman, and shall hold meetings
at such times and places as the chairman may determine. A majority vote of
the Committee at which a quorum is present, or acts consented to and approved
in writing by all members of the Committee, shall be the valid acts of the
Committee. A quorum shall consist of a majority of members of the Committee.

 

4.2                                 Powers of the Board or Committee. Subject
to the express provisions of this Plan and any express limitations under the
Company’s articles of incorporation or bylaws or under applicable law, on the
powers and authority delegated to a committee of the Board, the Committee shall
have the powers and authorities as follows:

 

4.2.1                        Granting of Awards. To grant Awards
of Stock Appreciation Rights and Incentive Stock Options, in accordance with Section 422
of the Code or Nonqualified Stock Options or any combination thereof as
provided and designated in a separate written Award Agreement or Stock Option
Agreement to each Employee or Consultant of the Company granted an Option under
this Plan and to approve the forms of Award Agreement or Stock Option
Agreements, which need not be identical either as to type of Award or among
Persons participating in such Awards; provided however, that in no event shall
an Incentive Stock Option and a Nonqualified Stock Option granted to any
Optionee under a single Stock Option Agreement be subject to a “tandem”
exercise arrangement such that the exercise of one such Option affects the
Optionee’s right to exercise the other Option granted under such Stock Option
Agreement;

 

4.2.2                        Number of Shares. To determine the
Employees or Consultants, and the time or times at which, Awards of Options or
Stock Appreciation Rights shall be granted under this Plan and the number of
Shares to be represented by each such Award;

 

4.2.3                        Other Terms and Provisions. To
determine the vesting schedule and first dates that the Award of Optioned
Stock underlying each Option may be exercised or to determine that no
delay in the exercisability or vesting will be required, and to determine the
duration of the Options granted under this Plan and all terms and provisions,
restrictions and limitations of each Award of Option or Stock Appreciation
Right granted (which need not be identical) consistent with the terms,
conditions, restrictions and limitations of this Plan and, with the consent of
the holder thereof, modify or amend each Award of Option or Stock Appreciation
Right and to execute, on the Company’s behalf, the Award Agreement or Stock
Option Agreement or any amendment thereto setting forth in writing the terms
and conditions of such Award of Option or Stock Appreciation Right;

 

4.2.4                        Interpretation. To interpret this
Plan and any Award or other agreements defining the rights and obligations of
the Company and the Persons participating in such an Award;

 

4.2.5                        Prescribe Rules. To prescribe,
amend and rescind rules and regulations relating to this Plan;

 

4.2.6                        Change of Exercise Date. To extend,
accelerate or defer (with the consent of the Optionee) the exercise date of any
Award of Option or Stock Appreciation Right, consistent with the provisions of Section 6
of this Plan;

 

6

 

4.2.7                        Modification of Awards. To modify,
cancel or waive the Company’s rights under, or modify, discontinue, suspend or
terminate any or all outstanding Awards, subject to receiving any consents
required under Section 12.2 of this Plan;

 

4.2.8                        Additional Documents. To authorize
any person to execute on behalf of the Company any instrument required to
effectuate the grant of an Award previously granted by the Board or Committee,
as the case may be;

 

4.2.9                        Experts. To seek, obtain and rely
on the advice of experts in making any determination or in taking or refraining
from taking any action under this Plan;

 

4.2.10                  Delegation. To delegate
ministerial, non-discretionary functions to individuals who are officers or
Employees of the Company; and

 

4.2.11                  General Authority. To make all
other determinations deemed necessary or advisable for the administration and
the implementation of this Plan.

 

4.3                                 Effect of Decisions and Limitations on Liability.
All decisions, determinations and interpretations of the Board or the
Committee to the extent the Board has delegated such authority and power to the
Committee, shall be final and binding on all Optionees and any other
permissible holders of any Options granted under this Plan. No director,
officer or agent of the Company will be liable for any action, omission or
decision under this Plan taken, made or omitted in good faith.

 

4.4                                 Exchange Approval. To the extent
that the rules, policies or any order of the Exchange require that any of the
actions taken by the Board or the Committee pursuant to the powers and
authority granted to the Board and the Committee in this Section 4 are
subject to the prior approval of the Exchange, the Board and the Committee
shall seek and obtain the approval of the Exchange before implementing any such
action.

 

5.                                       Eligibility, Grant and Terms of Options.

 

5.1                                 Persons Eligible. Incentive Stock
Options may be granted only to Employees. Nonqualified Stock Options may only
be granted to Employees and Consultants. An Employee, who is also a director of
the Company, its Parent or a Subsidiary, shall be treated as an Employee for
purposes of this Section 5. An Employee or Consultant who has been granted
an Option may, if he is otherwise eligible, be granted an additional Option or
additional Options from time to time under this Plan or any other stock option
plan subsequently adopted by the Company.

 

5.2                                 Limits on Grants. Grants of Awards
shall be subject the following limitations:

 

5.2.1                        Limit on Aggregate Awards. The
total number of Shares to be subject to Awards granted to any Optionee under
this Plan shall not exceed 5% of the issued and outstanding Shares at the date
of the grant of the Award. If any Employee or Consultant holds options under
any Stock Compensation Arrangement, including the 2001 Plan, the Optioned
Shares of which exceed 5% of the issued and outstanding Shares, such Employee
or Consultant is not entitled to receive any Awards under this Plan until such
time as the Employee or Consultant holds options under such Stock Compensation
Plan, the optioned Shares of which are less than 5% of the issued and
outstanding Shares. This Section 5.2.1 shall become void and of no force
and effect on such date as the limitation on ownership contained herein is not
required by any applicable law or any policy, rule or regulation of any
securities regulatory authority or the Exchange.

 

5.2.2                        Limit for Insiders. The maximum
number of Shares which may be reserved for issuance to Insiders under the
Plan shall be 10% of the Shares outstanding at the time of the grant less the
aggregate number of Shares reserved for issuance to Insiders under any other
Stock Compensation Arrangement.

 

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5.2.3                        Annual Limit. The maximum number of
Shares which may be issued to Insiders under the Plan within a one year
period shall be 10% of the Shares outstanding at the time of the issuance,
excluding Shares issued under the Plan or any other Stock Compensation
Arrangement over the preceding one year period. The maximum number of Shares
which may be issued to any one Insider under the Plan or any other Stock
Compensation Arrangement within a one year period shall be 5% of the Shares
outstanding at the time of the issuance, excluding Shares issued to such
Insider under the Plan or any other Stock Compensation Arrangement over the
preceding one year period.

 

5.3                                 No Effect on Relationship. This
Plan shall not confer upon any Optionee any right with respect to continuation
of employment or consulting relationship with the Company nor shall it
interfere in any way with his right or the Company’s right to terminate his
employment or consulting relationship at any time.

 

6.                                       Term of Awards. The term of each
Option and Stock Appreciation Right shall either vest or be forfeited not later
than five (5) years from the date of grant thereof or such shorter term as
may be provided in the Stock Option Agreement.

 

7.                                       Term of Plan. This Plan shall
become effective on the date upon which the Common Stock is first listed for
trading on the Exchange. It shall continue in effect until the tenth
anniversary of such date, unless sooner terminated under Section 12.1 of
this Plan.

 

8.                                       Options.

 

8.1                                 Grant of Options. The Board or the
Committee, as the case may be, in its absolute discretion, may grant
Nonqualified Stock Options to Employees or Consultants and Incentive Stock
Options to Employees only. Each such Option so granted will be designated in a
separate Stock Option Agreement as either an Incentive Stock Option or a
Nonqualified Stock Option. Such Options shall be subject to the terms and
provisions as set forth in this Section 8 and as relates to the type of
Option granted.

 

8.2                                 Option Price and Consideration.

 

8.2.1                        Pricing. The Option Price for an
Incentive Stock Option and for a Nonqualified Stock Option shall be not be less
than one hundred and ten percent (110%) of the Fair Market Value per Share on
the date of grant of such Option.

 

8.2.2                        Consideration and Method of Payment. The
consideration to be paid for the Optioned Stock to be issued upon exercise of
an Option, and the method of payment of such Optioned Stock, shall be
determined by the Committee on a case-by-case basis. Such consideration may consist
of (a) cash, (b) check, (c) with respect only to purchases upon
exercise of an Option, and provided that a public market for the Company’s
stock exists:

 

(i)                                     through a “same
day sale” commitment from the Optionee and a broker-dealer that is a member of
the National Association of Securities Dealers (an “NASD Dealer”) whereby the
Optionee irrevocably elects to exercise the Option and to sell a portion of the
Optioned Stock so purchased to pay for the exercise price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Optioned Stock to forward the
exercise price directly to the Company; or

 

(ii)                                  through a “margin”
commitment from the Optionee and an NASD Dealer whereby the Optionee
irrevocably elects to exercise the Option and to pledge the Optioned Stock so
purchased to the NASD Dealer in a margin account as security for a loan from
the NASD Dealer in the amount of the exercise price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Optioned Stock to forward the
exercise price directly to the Company;

 

8

 

or (d) any
combination of the foregoing methods of payment. In making its determination as
to the type of consideration to accept, the Committee shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company.

 

8.2.3                        Determination of Fair Market Value. The Fair Market Value
per Share on the date of grant of an Option shall be the Market Price, if
available, and if there is no Market Price, the Fair Market Value shall be
determined in such reasonable manner as may be prescribed by the Committee
and the good faith determination of such Fair Market Value shall be final and
conclusive.

 

8.3                                 Exercise of Option.

 

8.3.1                        Vesting of Options. Any Option
granted hereunder shall, in no case, vest at a rate less than twenty percent
(20%) over five (5) years from the date the Option is granted, subject to
reasonable conditions as may be imposed by the Committee, such as
Continuous Status as an Employee or Consultant.

 

8.3.2                        No Exercise for Fractional Shares. An
Option may not be exercised for a fraction of a Share. The Committee shall
determine, in its discretion whether cash shall be given in lieu of fractional
Shares or whether such fractional Shares shall be eliminated by rounding up or
down as appropriate.

 

8.3.3                        Notice of Exercise. An Option shall
be deemed to be exercised when written notice of such exercise has been given
to the Company in accordance with the terms of the Stock Option Agreement by
the person entitled to exercise the Option and full payment for the Optioned
Stock with respect to which the Option is exercised has been received by the Company.
Full payment, as authorized by the Board, may consist of a consideration
and method of payment allowable under Section 8.2.3 of this Plan.

 

8.3.4                        Shareholder Rights. Until the
issuance (as evidenced by the appropriate entry on the books of the Company or
of the duly authorized transfer agent of the Company) of the stock certificate
evidencing such Optioned Stock, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date thereof is prior to the date
the stock certificate is issued, except as provided in Section 10 of this
Plan.

 

8.3.5                        Reduction of Shares of Optioned Stock Following
Exercise. Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter may be available for
purchase by the Optionee under the Option granted. The number of Shares granted
under this Plan shall be reduced by the number of Shares with respect to which
the Option is exercised. However, the Committee may, in its discretion, grant
additional Options to such Optionee out of the unissued Shares reserved under
this Plan to replace the number of Shares of Optioned Stock acquired by the
Optionee as a result of the exercise of such Option.

 

8.4                                 Tandem Stock Appreciation Rights.
At the discretion of the Committee, an Option granted under this Plan may have
connected therewith, at or after the time of the grant, a number of Stock
Appreciation Rights equal to the number of Shares of Optioned Stock covered by
the Option. Each Stock Appreciation Right in respect of a Share shall entitle
the Optionee, at his or her option, to surrender to the Company, unexercised,
the right to subscribe for such Share pursuant to the related Option and to
receive from the Company such benefits associated with Stock Appreciation
Rights under Article 9 hereof, as determined by the Committee and set
forth in the Stock Option Agreement.

 

8.5                                 Termination of Status as an Employee or Consultant.
If any Employee or Consultant ceases to serve as an Employee or Consultant
(as the case may be), except in the case of an Employee whose employment
(or a Consultant whose position or relationship with the Company) is terminated
“for cause” as 

 

9

 

provided in Section 8.6
of this Plan, the Committee may permit such retiring or terminated
Employee or Consultant to exercise the Option granted to him for such time
period as it shall provide in the Stock Option Agreement (but no less than
thirty (30) days after the date he ceases to be an Employee or Consultant of
the Company) and, in the case of an Incentive Stock Option, no more than three (3) months
after the date he ceases to be an Employee or Consultant (as the case may be)
of the Company, to the extent that he was entitled to exercise it at the date
of such termination. To the extent that such retiring or terminated Employee or
Consultant was not entitled to exercise the Option at the date of his
termination or retirement as an Employee or Consultant, or if he does not
exercise such Option (which he was entitled to exercise) within the time
specified herein, the Option shall terminate.

 

8.6                                 Termination of Employee or Consultant for Cause.
If any Employee’s employment, or Consultant’s relationship, with the Company,
is terminated “for cause”, such Employee’s or Consultant’s Option under this
Plan shall terminate immediately upon such termination. An Optionee, who is an
Employee of the Company or a Consultant who is engaged by the Company, shall be
deemed to be terminated “for cause” if the Board or the Committee (to the
extent such authority is delegated by the Board, excluding the participation of
such Person if he is a member of the Committee) determines, based on reasonable
belief and acting in good faith, that such Optionee:

 

8.6.1                        Criminal Act. Has been convicted of
a felony or has been dishonest or committed or engaged in theft or embezzlement
of funds or properties, including, without limitation, trade secrets,
confidential information or other intellectual property, of the Company, any of
its Affiliates or any third party;

 

8.6.2                        Willful Misconduct. Is or has
engaged in fraud or willful misconduct in the discharge or performance of his
duties;

 

8.6.3                        Failure to Carry Out Duties. Has
been negligent in the discharge or performance of, or has failed to perform discharge
his duties assigned to him and such negligent acts or failure to perform his
duties have materially and adversely affected the business activities and
operations, the properties, the financial condition or prospects of the
Company;

 

8.6.4                        Disregard of Policy. Has willfully
refused to carry out reasonable orders, policies, procedures and instructions
of the Committee;

 

8.6.5                        Incompetency. Is incompetent or
incapable (other than by reason of a disability or similar condition) of
performing the duties assigned to him;

 

8.6.6                        Breach or Unauthorized Use of Information.
Has breached any provision of any agreement with the Company or an Affiliate of
the Company or has disclosed to third parties or used for his benefit or the
benefit of third parties trade secrets, inside information, trade names, logos,
trademarks, or other intellectual property of the Company or any of its
Affiliates without authorization by any such entity; or

 

8.6.7                        Competing Businesses. Has been
employed by, has rendered services to, or has acquired a financial interest
(other than the ownership of stock or other ownership interest not exceeding
five percent (5%) of the issued and outstanding capital stock or ownership
interests in an entity) in, any entity which competes with the Company or any
of the Company’s Affiliates, or has influenced or attempted to influence any
vendors or customers of the Company or the Company’s Affiliates from doing
business with any such entity, or has influenced, solicited or encouraged any
Employee of the Company or any Affiliate of the Company to terminate his
employment relationship with the Company or such other entity and instead work
for any individual or entity which competes with the Company or any Affiliate
of the Company.

 

10

 

For purposes of this
Plan, a termination “for cause” shall occur on the date the Company delivers
written notice to the Employee or Consultant stating the Committee’s
determination that such Person has been terminated for “cause” and the basis
for such determination.

 

8.7                                 Disability of Optionee. Notwithstanding
the provisions of Section 8.4 above, in the event an Employee or
Consultant is unable to continue his employment or consulting relationship (as
the case may be) with the Company as a result of his total and permanent
disability (as defined in Section 22(e)(3) of the Code or in the case
of an Award other than an Incentive Stock Option such other disabilities or
conditions as set forth in an Award Agreement or Stock Option Agreement), he
may, but only within such other period of time not exceeding twelve (12) months
as is determined by the Committee at the time of grant of the Option from the
date of termination, exercise his Option to the extent he was entitled to
exercise it at the date of such termination. To the extent that he was not
entitled to exercise the Option at the date of termination, or if he does not
exercise such Option (which he was entitled to exercise) within the time
specified herein, the Option shall terminate.

 

8.8                                 Death of Optionee. In the event of
the death of the Optionee during the term of the Option, if the Optionee was at
the time of his death an Employee or Consultant of the Company and had been in
Continuous Status as an Employee or Consultant since the date of grant of the
Option, the Option may be exercised, at any time within twelve (12) months
following the date of death, by the Optionee’s estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only
to the extent of the right to exercise that would have accrued had the Optionee
continued living and remained in Continuous Status as an Employee or Consultant
twelve (12) months after the date of death. If an Optionee’s employment or
involvement with the Company has terminated prior to his death, such Option may not
be exercised by the Optionee’s estate or other person as provided herein unless
permitted by the Committee under the Stock Option Agreement for such Optionee.

 

8.9                                 Nontransferability of Options. An
Option may not be sold, pledged, assigned, hypothecated, transferred, nor
disposed of in any manner other than by will or by the laws of descent and
distribution and may be exercised, during the lifetime of the Optionee,
only by the Optionee. Any attempt to assignment, transfer, pledge,
hypothecation or other disposition of an Option or levy of attachment or
similar process upon an Option not specifically permitted under this Plan shall
be null and void and without effect. An Option may be exercised only by an
Employee or a Consultant during his lifetime or pursuant to Section 8.7
hereof by his estate or by the person who acquires the right to exercise such
Option upon his death by bequest or inheritance.

 

8.10                           Rule 16b-3. Options granted to
persons subject to Section 16b-3 of the Exchange Act must comply with Rule 16b-3
and shall contain such additional conditions or restrictions as may be
required thereunder to qualify for the maximum exemption from Section 16
of the Exchange Act with respect to Plan transactions.

 

9.                                       Stock Appreciation Rights.

 

9.1                                 Grant of Stock Appreciation Rights.
The Committee, in its absolute discretion, may grant Stock Appreciation
Rights to Employees or Consultants either concurrently with the grant of
another Award or in connection with an Award previously granted which is then
in effect or independent of any other Award; provided, however, that the terms
and provisions of any Stock Appreciation Right granted in conjunction with an
Incentive Stock Option shall comply with the requirement of Code § 422 and
the regulations adopted thereunder.

 

9.2                                 Exercise of Stock Appreciation Rights.
Except as otherwise provided in an Award Agreement or Stock Option Agreement, a
Stock Appreciation Right which is granted in connection with, and relates to,
another Award will be exercisable at the same time and to the same extent as
such other Award. If a Stock Appreciation Right is granted independently of any
other Award, it shall be exercisable at the time provided in the Award
Agreement granting such right but in any event no earlier than six (6) months
after the Award Date, except in the event of death or disability (as defined in
Section 8.7 of this Plan).

 

11

 

9.3                                 Effect on Related Award. To the
extent that a Stock Appreciation Right involves the exercise of less than all
the Shares subject to the related Award and a portion of such Award remains
exercisable and is thereafter exercised, the number of Shares which remain
unexercised under the Stock Appreciation Right shall only be reduced if and to
the extent that the remaining number of Shares subject to the related Award is
less than the remaining number of Shares subject to such Stock Appreciation
Right.

 

9.4                                 Payment Upon Exercise of Stock Appreciation Right.
Except as otherwise provided in an Award Agreement, the Person receiving a
Stock Appreciation Right, upon the exercise thereof, will be paid an amount
equal to (A) the difference between (i) the Option Price for each
Share of the Common Stock under the Award to which such right relates and (ii) the
Market Price of a Share on the date that the Stock Appreciation Right is
exercised and (B) multiplying the resulting difference by the number of
Shares being exercised by such Person under such Award Agreement.

 

9.5                                 Method of Payment. The Company may pay
the amount due to the Person exercising his Stock Appreciation Right, as
determined under Section 9.4 of this Plan, in cash, Shares, or a
combination thereof, as determined by the Board or the Committee (if the Board
has delegated such authority to the Committee) consistent with applicable law. However,
the Award Agreement may permit the Person granted such Stock Appreciation
Right to elect to receive cash, Shares or a combination thereof, subject to
such conditions as the Committee may impose thereunder. If Shares are used
in payment of all or a portion of the amount determined under Section 9.4,
they shall be valued at the Market Price of the Shares on the date the Stock
Appreciation Right is exercised by the Person granted such right.

 

9.6                                 Limited Rights. The Committee may grant
Stock Appreciation Rights to a Person which may be:

 

9.6.1                        Event of Exercise. Exercisable upon
the occurrence of a specified event (including those events set forth in Section 10
hereof);

 

9.6.2                        In Tandem with Awards. Only
exercisable in tandem or combination with, or substitution for, Options, other
Stock Appreciation Rights, other Awards or a combination thereof; and

 

9.6.3                        Payment. Payable in cash, Shares
equal to the difference between the Market Price of the Shares on the Award
Date of such Stock Appreciation Right and the Market Price of the Shares as
determined during a specified period or at a specified time within a specified
period, whether prior to, on or after the date of the occurrence of such
specified event.

 

9.7                                 Reduction of Available Shares. Only
Shares actually delivered by the Company in connection with the exercise of a
Stock Appreciation Right will be counted against the maximum number of Shares
available to be awarded, as set forth in Section 3.1 of this Plan. The
number of Shares subject to the portion of the Stock Appreciation Rights which
has not been exercised and any Optioned Stock or other Award to which such
Stock Appreciation Right relates will be reduced by the actual number of Shares
delivered by the Company in connection with the exercise of such Stock
Appreciation Right, except to the extent otherwise provided in the Award
Agreement.

 

10.                                 Adjustments Upon Changes in Capitalization or
Merger.

 

10.1                           Adjustments Affecting Capitalizations. Subject
to any required action by the shareholders of the Company, the number of Shares
covered by each outstanding Award, and the number of Shares which have been
authorized for issuance under this Plan but as to which no Awards have yet been
granted or which have been returned to this Plan upon cancellation or expiration
of any Option, as well as the price per Share covered by each such outstanding
Option, shall automatically, without amendment to this Plan or any Awards or
Award Agreements or Stock Option Agreements delivered to Optionees under this
Plan, be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a subdivision or combination of Shares, as a
result of a reorganization, recapitalization, forward stock split, split-up,
spin-off, reverse stock split, stock dividend, stock distribution or similar
extraordinary dividend distribution (collectively 

 

12

 

“spin off”) with respect
to, or the reclassification of, the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.”  The
Committee’s determination with respect to such adjustments shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of Shares subject to an Award.

 

10.2                           Dissolution, Merger and Consolidation.
In the event of the proposed dissolution or liquidation of the Company, all
outstanding Awards shall vest immediately prior to the consummation of such
proposed action, unless otherwise provided by the Committee. The Committee may,
in the exercise of its sole discretion in such instances, declare that any
Award shall terminate as of a date fixed by the Committee and give each
Optionee the right to exercise his Award as to all of the Optioned Stock,
including Shares as to which such Award would not otherwise be vested or
exercisable as of such date. In the event of the proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation in which the Company is not the surviving
corporation, each Award shall vest immediately and be exercisable prior to the
consummation of any such transaction as provided herein or shall continue to be
exercisable to the extent assumed by the surviving corporation or Parent or
Subsidiary of the corporation purchasing the Company’s assets or to the extent
an equivalent option shall be substituted by such successor corporation or a
Parent or Subsidiary of such successor corporation. If the surviving
corporation, the purchasing corporation or any Parent or Subsidiary of any such
corporation does not either assume or grant a substitute option exercisable for
an equivalent number of underlying shares of such corporation, the Committee
shall give notice to each Employee or Consultant previously granted an Award of
his right to exercise such Award, including the right to exercise the unvested
portion of any such Option within the time period prescribed in such notice. Each
Award shall vest or shall become fully exercisable in lieu of assumption or
substitution by the surviving corporation, purchasing corporation, or a Parent
or Subsidiary of any such corporation in the event of a merger, consolidation,
or sale of substantially all of the Company’s assets; the Committee shall
notify each Employee or Consultant granted an Award that his Award shall vest
or shall be fully exercisable for a period of thirty (30) days from the date of
such notice; and the Award will terminate upon the expiration of such period.

 

11.                                 Time of Granting Awards. The date
of grant of an Award shall, for all purposes, be the date on which the
Committee makes the determination granting such Award. Notice of the
determination shall be given to each Employee or Consultant to whom an Award is
so granted within a reasonable time after the date of such grant. Within a
reasonable time after the date of the grant of an Award, the Company shall
enter into and deliver to each Employee or Consultant granted such Award a
written Award Agreement or Stock Option Agreement, as the case may be, as
provided in Sections 2.4 and 15 hereof, setting forth the terms and conditions
of such Award and in the case of an Award which is an Option separately
identifying the portion of the Option which is an Incentive Stock Option and/or
the portion of such Option which is a Nonqualified Stock Option.

 

12.                                 Amendment and Termination of the Plan.

 

12.1                           Amendment and Termination. The
Committee may amend or terminate this Plan from time to time in such
respects as the Committee may deem advisable; provided that the following
revisions or amendments shall require approval of the shareholders of the
Company in the manner described in Section 16 of this Plan and, if
required by the rules or policies of the Exchange, the approval of the
Exchange:

 

12.1.1                  Increase in Reserved Shares. An
increase in the number of Shares subject to this Plan above 5,000,000 Shares, other than in connection with an adjustment
under Section 10 of the Plan; or

 

12.1.2                  Designation of Eligible Participants.
Any change in the designation of the class of Employees or Consultants
eligible to be granted Options.

 

13

 

12.2                           Shareholder Approval. If any
amendment of this Plan is submitted to the shareholders for their approval
under Section 12.1 of this Plan subsequent to the first registration of
any class of equity security by the Company under Section 12 of the
Exchange Act, such shareholder approval shall be solicited as described in Section 16
of this Plan.

 

12.3                           Effect of Amendment or Termination. Any
such amendment or termination of the Plan shall not affect Awards already
granted and such Awards shall remain in full force and effect as if the Plan
had not been amended or terminated, unless the Employee or Consultant of the
Company granted an Award and the Committee otherwise mutually agree to such
amendment or termination, which agreement must be in writing and signed by the
Company and such Person.

 

13.                                 Conditions Upon Issuance of Shares. Shares
of Optioned Stock shall not be issued pursuant to the exercise of a grant of an
Award under this Plan unless the exercise of such Award and the issuance and
delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act, the
Exchange Act, the rules and regulations promulgated thereunder, applicable
state securities laws, applicable securities laws and regulations in the
provinces and territories of Canada and the requirements of the Exchange and
any stock exchange upon which the Shares may then be listed, and shall be
further subject to the approval of legal counsel for the Company with respect
to such compliance.

 

As a condition to the
exercise of an Option, the Company may require the person exercising such
Option as granted under the Plan to represent and warrant at the time of such
exercise that such Shares are being purchased only for investment and without
any present intention to sell or distribute such Shares and such other
representations and warranties which, in the opinion of legal counsel for the
Company, are necessary or appropriate to establish an exemption from the registration
requirements under applicable federal and state securities laws with respect to
the acquisition of such Shares.

 

14.                                 Reservation of Shares. Subject to
the number of Shares which may be under this Plan as provided in Section 3.1,
the Company, during the term of this Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of this Plan.

 

The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company’s legal counsel to be necessary for the
lawful issuance and sale of any Shares hereunder, shall relieve the Company of
any liability relating to the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

 

15.                                 Award and Option Agreements. Each
Option granted to an Employee or Consultant shall be evidenced by a written
Award Agreement or Stock Option Agreement, as the case may be, in such form as
the Board shall approve.

 

16.                                 Shareholder Approval. If this Plan,
applicable law or the rules or polices of the Exchange require that an
amendment to this Plan or any other matter relating to this Plan be submitted
to the shareholders of the Company for approval, the Company shall submit such
matter to the shareholders for approval in accordance with this Section 16.

 

16.1                           Approval if Company a U.S. Reporting Company.
If the Company has registered any class of any equity security pursuant to
Section 12 of the Exchange Act at the time it solicits shareholder
approval of the amendment or other matter relating to this Plan, the Company
shall solicit approval of such amendment or matter substantially in accordance
with Section 14(a) of the Exchange Act and the rules and
regulations promulgated thereunder.

 

16.2                           Approval if Company a Canadian Reporting Company.
If the Company is a reporting issuer in any of the provinces of Canada at the
time it solicits shareholder approval of the applicable matter, the Company
shall solicit approval of such amendment or other matter in accordance with
applicable Canadian securities laws, including National Instrument 51-102 – “Continuous Disclosure Obligations” and National Instrument
54-101 – “Communication with Beneficial Owners of Securities
of a Reporting Issuer” and any 

 

14

 

successor instruments or
regulations. The Company shall also comply with all requirements of the
Exchange relating to the solicitation of shareholder approval.

 

16.3                           Approval if Company Not a Reporting Company.
If approval of an amendment or other matter relating to this Plan is to be
obtained prior to the Company registering any class of any equity security
pursuant to Section 12 of the Exchange Act or becoming a reporting issuer in
any of the provinces of Canada, the Company shall furnish in writing to the
holders entitled to vote at the annual or special meeting of shareholders held
to consider such matter, substantially the same information concerning the
amendment or other matter as that which would be required by the rules and
regulations in effect under Section 14(a) of the Exchange Act at the
time such information is furnished if proxies to be voted with respect to the
approval or disapproval of the amendment or other matter were then being
solicited.

 

17.                                 Compliance with Securities Laws. No
Person participating in this Plan shall sell, pledge or otherwise transfer
(collectively, “Disposition”) Shares of Optioned Stock acquired pursuant to an
Award or an interest in such Shares except in accordance with the express terms
of this Plan and the applicable Award Agreement. Any violation of this Section 17
shall be void and of no effect. No Person participating in this Plan undertakes
or effects a Disposition of such Shares, or any portion thereof, except in
compliance with applicable federal and state securities laws and unless and
until:

 

17.1                           Registration Statement. There is in
effect an appropriate registration statement under the Securities Act covering
the proposed Disposition and such Disposition is made in accordance with such
registration statement;

 

17.2                           Rule 144. Such Disposition is
made in accordance with Rule 144 as adopted under the Securities Act and
amended from time to time;

 

17.3                           Exempt Transaction. Such Person
participating in this Plan notifies the Company of the proposed Disposition and
furnishes the Company with a statement of the circumstances surrounding the
proposed Disposition, and, if requested by the Company, furnishes to the
Company an opinion of counsel acceptable to the Company’s counsel, that there
is available with respect to such Disposition an exemption from the
registration requirements, and such Disposition will not require registration,
under the Securities Act and applicable state securities laws.

 

17.4                           Rule 701. The Shares may become
freely tradable by non-affiliates if issued pursuant to Rule 701
promulgated under the Securities Act (under limited conditions regarding the
method of sale) 90 days after the first sale of Common Stock of the Company to
the general public pursuant to a registration statement filed with and declared
effective by the Commission, subject to any applicable market standoff
agreement or any other agreement entered into by Optionee. Affiliates must
comply with the provisions (other than the holding period requirements) of Rule 144.

 

Notwithstanding
anything contained in this Plan to the contrary, the Company has no obligation
to register the Shares or to file any registration statement under federal or
state securities laws, nor does the Company make any representation concerning
the likelihood of a public offering of its securities.

 

18.                                 Information to Plan Participants. The
Company shall provide to each Employee or Consultant, during the period for
which such Person has one or more Awards outstanding, copies of all annual
reports and other information which are provided to all shareholders of the
Company. The Company shall not be required to provide such information if the
issuance of Options under this Plan is limited to key employees whose duties in
connection with the Company assure their access to equivalent information.

 

19.                                 Withholding Taxes. Upon granting of
any Award or the exercise of any Option which is not an Incentive Stock Option,
the Company may require that an Employee or Consultant of the Company to:

 

19.1                           Pay Taxes. Remit to the Company an
amount sufficient to satisfy all federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for
Shares;

 

15

 

19.2                           Deduct for Taxes. Deduct such
amount of cash payable to such Person in connection with the payment of a Stock
Appreciation Right or such number of Shares subject to the Award valued at
Market Price sufficient to satisfy such withholding requirements;

 

19.3                           Reduction of Shares. Reduce the
number of Shares to be delivered by (or otherwise require) the appropriate
number of Shares, valued at their then Market Price, to satisfy such
withholding obligation; or

 

19.4                           Combination. Resort to any
combination of Sections 19.1 through 19.3 hereof.

 

20.                                 No Right of Employment. Nothing in
this Plan shall interfere with or limit in any way the right of the Company or
any Affiliate of the Company to terminate the employment of any Employee of the
Company or any of its Affiliates at any time, nor confer upon any such Person
any right to continue in the employ of the Company or any Affiliate of the
Company.

 

21.                                 Rights as a Shareholder. No
Optionee shall have any right as a shareholder unless and until certificates
for Shares acquired by him as a result of the exercise of his Option have been
issued to him.

 

22.                                 Unfunded Status of Options. This
Plan is intended to be an “unfunded” Plan to provide an incentive to the
Employee or Consultant granted Awards under this Plan. With respect to any
payments not made to an Employee or Consultant pursuant to an Award, nothing
contained in this Plan shall give such Person any rights that are greater than
those of a general creditor of the Company or any Affiliates of the Company.

 

23.                                 Indemnification. To the extent
allowable under applicable law, each member of the Committee shall be
indemnified and held harmless by the Company from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by each member in
connection with, or resulting from, any claim, action, suit, or proceeding
which he may be a party or in which he may be involved by reason of
any action or failure to act under this Plan and against and from any and all amounts
paid by him in satisfaction of judgment in such action, suit or proceeding
against him provided he gives the Company an opportunity, at its own expense,
to handle and defend the same before he undertakes to handle and defend such
action on his own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company’s articles of incorporation or bylaws (as such
documents are restated and amended), as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.

 

24.                                 No Duty to Register Shares. Nothing
contained in this Plan shall obligate the Company to register the Shares or its
Common Stock under the Securities Act or under any applicable states securities
laws with respect to the Shares acquired by Employees or Consultants of the
Company under this Plan. In the absence of any such registration, any Shares
acquired under this Plan shall be restricted as to transfer in such manner as
the Board determines to be advisable to insure the availability of an exemption
from registration under the Securities Act.

 

25.                                 Relationship to Other Benefits. No
payment under this Plan shall be taken into account in determining any benefits
under any pension, retirement, savings, profit sharing, group insurance,
welfare or other benefit plan of the Company or any Affiliates of the Company.

 

26.                                 Expenses. The expenses of
administering this Plan shall be borne by the Company, its subsidiaries or
both, as shall be determined in the discretion of the Board.

 

27.                                 Titles. Section headings and
captions in this Plan are for convenience and reference only and in the event
of any conflict, the text of this Plan, rather than such titles or headings,
shall control.

 

28.                                 CHOICE OF LAW. ALL QUESTIONS CONCERNING
THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS PLAN AND THE INSTRUMENTS
EVIDENCING OPTIONS WILL BE GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF
CONFLICTS, OF THE STATE OF CALIFORNIA.

 

16

 

IN
WITNESS WHEREOF, the Company has caused its duly authorized
officer to execute this Plan effective as of the         
day of                            ,
2004, even though this document is being executed at a later date.

 

 

	
   

  	
  GEOPETRO RESOURCES COMPANY,

  
	
   

  	
   a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

17Exhibit 10.9

 

EXHIBIT 10.9—STUART
DOSHI EMPLOYMENT AGREEMENT DATED JULY 28, 1997

(EFFECTIVE JULY 1, 1997) AND AMENDMENTS
DATED JANUARY 11, 2001, JULY 1, 2003, APRIL 20, 2004,
MAY 9, 2005, JULY 28, 2005 AND JANUARY 30, 2006

 

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement is dated July 28, 1997 and effective as
of July 1, 1997 (the “Effective Date”), between GeoPetro Resources Company
(“Company”) and Stuart Doshi (“Executive”).

 

RECITALS

 

1.             Executive is and
has been employed by Company from the date that Company was founded. Prior to
that, Executive had been involved in the oil and gas business for several
years. Through such experience, he has acquired outstanding and special skills
and abilities and an extensive background in and knowledge of Company’s business
and the oil and gas industry.

 

2.             The Company and the
Executive reached an agreement in June, 1996 regarding the terms and conditions
of the employment of the Executive, but such agreement was never reduced to
writing and executed by the Executive and the Company (the “Prior Agreement”).

 

3.             The Company and the
Executive wish to amend the terms of the Prior Agreement to (a) increase
the Executive’s annual base salary as of the Effective Date, from $96,000 to
$144,000, (b) to provide for a waiver by Executive of a $100,000 bonus
which would have been payable to the Executive at such time as the Company’s
oil and gas properties become productive (which is scheduled to occur within
sixty days of the Effective Date), (c) to clarify the scope of Executive’s
permissible outside activities, (d) to clarify the amount payable to
Executive as compensation for benefits for the balance of the “Term” in the
event of an “Involuntary Termination,” each as defined hereinafter, and
(e) to make certain additional clarifications. The Company and Executive
wish to reduce this revised understanding to writing.

 

4.             The Company desires
assurance of the continued association and services of the Executive and is
therefore willing to continue his employment with the Company on the terms and
conditions set forth below. Executive desires to continue in the employ of
Company and is willing to do so on the terms and conditions set forth below.

 

NOW, THEREFORE, in consideration of the mutual promises and conditions
in this agreement, it is agreed as follows:

 

1. Employment. Company
shall employ Executive as President and Chief Executive Officer.

 

2. Duties and Authority. Until
the date of termination of employment hereunder, Company shall continue to
employ Executive as its President and Chief Executive Officer, with full power
and authority to hire and fire all employees of Company, and to manage and
conduct all the business of Company subject to policies reasonably set by the
board of directors and consistent with his position as Chief Executive Officer.

 

3. Outside Activities. Except
as provided herein, during his employment, Executive shall devote his full
energies, interest, abilities, and productive time to the performance of this
agreement and shall not, without Company’s prior written consent, render to
others services of any kind for compensation, or engage in any other business
activity that would materially interfere with the performance of his duties
under this agreement. Notwithstanding the foregoing, the Executive may provide
services as a consultant, adviser or the like to businesses not involved in
energy related activities, provided that such services do not interfere with
Executive’s serving on a full-time basis as President and Chief Executive
Officer.

 

4. Covenant Not to Compete. During
the employment term, Executive shall not, directly or indirectly, whether as a
partner, employee, creditor, shareholder (other than as a shareholder owning
less than five percent (5%) of a publicly traded company), or otherwise,
promote, participate, or engage in any activity or other business competitive
with Company’s business.

 

5. Term. Subject to
earlier termination as provided in this agreement, Executive shall be employed
for a six—year term (the “Term”). On each anniversary of the date hereof, the
Term shall be automatically 

 

 

extended for an additional one—year from the date of expiration of the
then current Term. Notwithstanding the foregoing, the Term shall terminate
automatically upon Executive’s 80th birthday unless both parties agree to
extend the Term for additional one-year periods. Either party shall give the
other notice at least six (6) months prior to the termination of the Term
of its request to extend the Term. The other party shall respond within two
months of the date of such notice notifying that party whether or not the Term
shall be extended.

 

6. Accrued Liability for Past
Services,  Company and
Executive hereby expressly acknowledge and agree that Executive has been
entitled to receive as compensation for his services an amount of Eight
Thousand Dollars ($8,000) per month for services rendered for the periods prior
to the date hereof, although only a portion of such amount actually was paid to
Executive. Accordingly, the parties acknowledge and agree that as of December 31,
1996, an aggregate amount of One Hundred Eighty-Five Thousand Six Hundred
Thirty Dollars ($185,630) remains payable to Executive for services rendered,
and that such amount shall be paid upon the earlier of (i) such time as
Company’s Board of Directors may reasonably determine, taking into account the
Company’s business plan and cash flow, and (ii) the listing or approval
for listing on official notice of issuance, if applicable, of Company’s Common
Stock or designation or approval for designation upon official notice of
issuance on an interdealer quotation system of the NASD, Inc. on a
national or regional securities recognized market (“Public Listing”).

 

7. Salary. Commencing on
the Effective Date, the Company shall pay a basic salary to Executive at the
rate of One Hundred Forty-Four Thousand Dollars ($144,000) per year, payable in
equal monthly installments (the “Basic Salary”), subject to increase as
follows:

 

(a)           An annual inflation
adjustment shall be paid to Executive as set forth in this section, based on
the United States Department of Labor, Bureau of Labor Statistics Consumer
Price Index of Urban Wage Earners and Clerical Workers (Revised Series),
Subgroup “all items,” entitled “Consumers Price Index of Urban Wage Earners and
Clerical Workers (Revised Series). If the index for December of any calendar
year following 1995 (the “Then Current Index”) exceeds the index for the month
in which this agreement is dated (the “Base Index”), Company shall pay to
Executive as an inflation adjustment the amount by which the product of the
Basic Salary for the given year and the fraction whose numerator is the Then
Current Index for that year and whose denominator is the Base Index, exceeds
the Basic Salary, in accordance with the following formula:

 

	
  Inflation Adjustment 

  	
  =

  	
  (Basic Salary

  	
   ́

  	
  Then Current Index)

  	
  -

  	
  (Basic Salary)

  
	
   

  	
   

  	
   

  	
   

  	
  Base Index

  	
   

  	
   

  

 

The computation required under this section shall be made at the end of
the month of publication of the Then Current Index for each calendar year
during the term of this agreement, and any inflation adjustment shall be
immediately payable.

 

(b)           Upon Public Listing,
the Basic Salary shall be increased to the higher of (i) One Hundred
Eighty Thousand Dollars ($180,000) per year and (ii) such amount as equals
the average base salary paid to chief executive officers of oil and gas
companies with a market capitalization comparable to that of Company (a “Comparable
Company”). Such amount shall be subject to the annual inflation adjustment set
forth in Section 7(a).

 

8. Options. As a long
term incentive, as of April 30, 1996 the Company granted to Executive
non-qualified options (the “Options”) to acquire Seven Hundred Fifty Thousand
(750,000) shares of Common Stock. Such options have an exercise price equal to
fifty cents ($0.50) per share of the Common Stock. The Options are fully
exercisable from the date of grant and have a term of ten (10) years from the
date of grant. Executive shall also receive stock options to acquire the
greater of (i) the number of Common Shares determined by the Company’s
board of directors based on the compensation paid by a Comparable Company to
its Chief Executive Officer, and (ii) the amount of Common Shares subject
to stock options granted during each such year to each outside director of Company
upon the same terms and conditions granted to the outside directors; provided,
however, that the initial grant of options to any outside director shall not be
deemed a grant for purposes of this sentence.

 

 

9. Piggyback Registration Rights. The
Executive shall have the following rights with respect to the registration by
the Company of the Common Stock issuable upon conversion of the Options and any
other shares as may be issued by the Company to the Executive (the “Registrable
Securities”). If the Company proposes to file with the SEC any registration
statement for registration under the Act other than the Company’s initial
registration statement (the “Registration Statement”), the Company will give
written notice of such intention to the Executive at least thirty
(30) days prior to the proposed filing date offering to include the
Executive’s Registrable Securities, subject to the limitations set forth
herein. If a representative of the underwriter advises the Company that
marketing factors require a limitation on the number of shares underwritten,
the number of shares to be included by the Executive shall be allocated among
the Executive and any other holders of registration rights pro rata in
accordance with the number of shares of Common Stock requested to be included
in such registration. Subject to the foregoing limitation, upon receipt by the
Company of a request to include in such filing a registration of the Executive’s
Registrable Securities, the Company shall include such Registrable Securities
in such filing at no expense to the Executive, except for the underwriting
discounts, commissions and spreads with respect to such Registrable Securities,
transfer taxes incurred by the Executive and fees and expenses of counsel for
the Executive, if any, all of which shall be paid by the Executive, unless
otherwise required by the blue sky laws of any state. Except as expressly
provided herein, all of the terms and conditions of the Piggyback Registration
Rights set forth in Article III Section 1(a) of the Subscription
Agreement (the “Subscription Agreement”) set forth as Exhibit A to that
certain Private Placement Memorandum of the Company dated May 30, 1996 are
hereby incorporated herein by reference.

 

10. Bonus. Executive
shall be eligible for annual bonuses during the Term in such amounts as shall
be determined by the Company’s board of directors.

 

11. Additional Benefits. During
the employment term, Executive shall be entitled to receive all other benefits
of employment generally available to Company’s other executive and managerial
employees when and as he becomes eligible for them, including participation in
any 401(k) or similar pension plan, group health, life and disability insurance
benefits. During the employment term, Company shall reimburse Executive for
reasonable out—of—pocket expenses incurred in connection with Company’s
business, including travel expenses, food, and lodging while away from home,
subject to such policies as Company may from time to time reasonably establish
for its employees. In addition, during the employment term, Company shall
furnish to Executive an automobile owned by Company; Company shall defray the
reasonable costs of its operation, including, without limitation, fuel and
repair costs and the cost of a parking space at the Company’s executive office.
Executive shall be eligible for six (6) weeks annual vacation. During the
term of this Agreement, Company will maintain, at Company’s expense, term
insurance upon Executive’s life in the face amount of One Million Dollars
($1,000,000). Such insurance will be payable to the beneficiary that Executive
shall designate. Executive may change such designation from time to time,
provided all such designations are made in writing to Company. In the absence
of any such designation, the insurance shall be payable to Executive’s estate.
Such insurance shall be in addition to the group term life insurance that
Company normally maintains for the benefit of salaried employees generally.

 

12. Indemnification by Employer and
Insurance. Company shall, to the maximum extent permitted by law,
indemnify and hold Executive in his capacity as director and employee of the
Company harmless against expenses, including reasonable attorney’s fees,
judgments, fines, settlements, and other amounts actually and reasonably
incurred in connection with any proceeding arising by reason of Executive’s
employment by Company. Company shall advance to Executive any expense incurred
in defending any such proceeding to the maximum extent permitted by law. Effective
upon Public Listing, Company shall purchase and maintain indemnity insurance,
if available at a reasonable cost to the Company, on behalf of Executive in the
amount of Ten Million Dollars
($10,000,000) against any liability asserted against or incurred by Executive
arising out of his employment by Company. This indemnification obligation shall
be in addition to, and not in limitation of, any indemnification obligations
set forth in any Indemnification Agreement with the Company or in the
Subscription Agreement.

 

13. Termination Prior to Expiration
of Term and Effects of Such Termination.

 

 

(a)           Notwithstanding any
other provisions of this agreement, Company shall have the right to terminate
Executive’s employment under this agreement at any time prior to the expiration
of the Term for any of the following reasons:

 

(i)            For “cause” upon
the good faith determination by the Board of Directors of Company that “cause”
exists for the termination of the employment relationship. As used in this
Section 13 (a), the term “cause” shall mean termination by action of
Company’s Board of Directors because of Executive’s (A) final conviction
of a felony (which, through lapse of time or otherwise, is not subject to
appeal); (B) willful refusal without proper legal cause to perform
Executive’s duties and responsibilities; or (C) willfully engaging in
conduct which Executive has or should have reason to know may be materially
injurious to Company. In case of (C), such termination shall be effected by at
least thirty (30) days’ prior written notice thereof delivered by Company
to Executive; provided, however, that if within seven (7) days following
the date of such notice, Executive shall cease to engage in such conduct and
shall use Executive’s best efforts to perform his duties and responsibilities
hereunder, then the termination shall not be effective; provided further,
however, that Company shall consult in good faith with Executive and provide a
reasonable opportunity for Executive to be heard by the Board of Directors of Company
prior to providing any written notice of termination;

 

(ii)           for any other
reason whatsoever, with or without cause, in the sole discretion of the Board
of Directors of Company;

 

(iii)          upon Executive’s
death; or

 

(iv)          upon Executive’s
becoming incapacitated by accident, sickness, or other circumstance which
renders him mentally or physically incapable of performing at a level of at
least 75% the duties and services required of Executive.

 

The termination of Executive’s employment by Company prior to the
expiration of the Term shall constitute a “Termination for Cause” if made
pursuant to Section 13(a)(i); the effect of such termination is specified
in Section 13(d). The termination of Executive’s employment by Company
prior to the expiration of the Term shall constitute an “Involuntary
Termination” if made pursuant to Section 13(a) (ii); the effect of such
termination is specified in Section 13(e). The effect of the employment
relationship being terminated pursuant to Section 13(a) (iii) as a
result of Executive’s death is specified in Section 13(f). The effect of
the employment relationship being terminated pursuant to
Section 13(a)(iv) as a result of the Employee becoming incapacitated
is specified in Section 13(g).

 

(b)           Notwithstanding any
other provisions of this agreement, Executive shall have the right to terminate
the employment relationship under this agreement at any time prior to the
expiration of the Term of employment for any of the following reasons:

 

(i)            a material breach
by Company of any material provision of this agreement which remains
uncorrected for thirty (30) days following written notice of such breach
by Executive to Company; or

 

(ii)           for any other
reason whatsoever, in the sole discretion of Executive.

 

The termination of Executive’s employment by Executive prior to the
expiration of the Term shall constitute an “Involuntary Termination” if made
pursuant to Section 13(b)(i); the effect of such termination is specified
in Section 13(e). The termination of Executive’s employment by Executive
prior to the expiration of the Term shall constitute a “Voluntary Termination”
if made pursuant to Section 13(b) (ii); the effect of such termination is
specified in Section 13(c).

 

(c)           Upon a “Voluntary
Termination” of the employment relationship by Executive prior to expiration of
the Term, Executive may, at his option, exercise or retain his vested stock
options, and he shall have the right to receive, on a prorated basis through
the date of Voluntary Termination, all of the benefits and payments provided
for herein, including, without limitation, the salary adjustment provided for
in Section 7(a). All unvested stock options and unvested restricted Common
Share awards shall be forfeited. In the event of a Voluntary Termination,
Executive shall also be entitled to receive his pro rata Basic Salary 

 

 

through the date of termination, and all other rights and benefits
Executive may have under the employee and/or group or senior executive benefit
plans and programs of Company shall be determined in accordance with the terms
and conditions of such plans and programs.

 

(d)           If Executive’s
employment hereunder shall be terminated by Company for Cause prior to
expiration of the Term, Executive shall be entitled to receive his pro rata
Basic Salary through the date of termination, and all other rights and benefits
Executive may have under the employee and/or group or senior executive benefit
plans and programs of Company shall be determined in accordance with the terms
and conditions of such plans and programs. Executive may, at his option,
exercise any vested stock options within 30 days of termination.

 

(e)           Upon an Involuntary
Termination of the employment relationship by either Company or Executive prior
to expiration of the Term, Executive shall be entitled, in consideration of
Executive’s continuing obligations hereunder after such termination, to receive
immediately in cash an amount equal to Executive’s Base Salary for the
remainder of the Term. In addition, the Company shall immediately pay Executive
an additional cash amount equal to twenty percent (20%) of Executive’s then
effective Base Salary multiplied by the number of years (prorated for any
partial years) remaining in the Term as payment for the benefits which
otherwise would have been provided during the remainder of the Term pursuant to
this agreement. Company shall additionally be obligated immediately to purchase
for cash all vested stock options and vested restricted Common Shares, without
discount for liquidity or minority position, then held by Executive at the then
current fair market value. As used in this agreement, “Involuntary Termination”
shall also mean termination of Executive’s employment with Company if such
termination results from termination by Executive within sixty (60) days of
and in connection with or based upon (x) reduction in title, duties or
authority to below Chief Executive Officer, or (y) Executive ceasing to
report directly to the Board of Directors.

 

Executive’s rights under this Section 13(e) are Executive’s sole and
exclusive rights against Company, or its affiliates, and Company’s sole and
exclusive liability to Executive under this agreement, in contract, tort, or
otherwise, for any Involuntary Termination of the employment relationship.
Executive covenants not to sue or lodge any claim, demand or cause of action
against Company for any sums for Involuntary Termination other than those sums
specified in this Section 13(e). If Executive breaches this covenant,
Company shall be entitled to recover from Executive all sums expended by
Company (including costs and attorneys’ fees) in connection with such suit,
claim, demand or cause of action.

 

(f)            Upon termination of
the employment relationship as a result of Executive’s death, Executive’s
heirs, administrators, or legatees shall be entitled to Executive’s pro rata
Basic Salary through the date of such termination. In the event of such
termination due to death, all other rights and benefits the Executive or his
heirs, administrators or legatees may have under the employee and/or group or
senior executive benefit plans and programs of Company shall be determined in
accordance with the terms and conditions of such plans and programs.

 

(g)           Upon termination of
the employment relationship as a result of Executive’s incapacity, Executive
shall be entitled to his pro rata Basic Salary through the date of termination.
In the event of such termination due to incapacity, all other rights and
benefits the Executive may have under the employee and/or group or senior
executive benefit plans and programs of Company shall be determined in
accordance with the terms and conditions of such plans and programs.

 

(h)           Termination of the
employment relationship does not terminate those obligations imposed by this
agreement which are continuing obligations.

 

(i)            Executive shall not
be under any duty or obligation to seek or accept other employment following
termination of this agreement (for whatever reason) and the amounts due
Executive hereunder shall not be reduced or suspended if Executive accepts
subsequent employment.

 

14. Agreement Survives Combination
or Dissolution. This agreement shall not be terminated by Company’s
voluntary or involuntary dissolution or by any merger in which Company is not
the surviving or resulting 

 

 

corporation, or on any transfer of all or substantially all of Company’
assets. In the event of any such merger or transfer of assets, the provisions
of this agreement shall be binding on and inure to the benefit of the surviving
business entity or the business entity to which such assets shall be
transferred.

 

15.
Arbitration. Any controversy or
claim arising out of or relating to this agreement, or breach of this
agreement, shall be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and judgment on the
award rendered by the arbitrators may be entered in any court having
jurisdiction. There shall be a single arbitrator chosen by mutual agreement of
the parties, or in the absence of an agreement, by a judge in the Superior
Court of San Francisco County. Each party shall pay all fees and expenses of
his own attorneys, and the expenses of his witnesses and all other expenses
connected with presenting his case. Other costs of the arbitration, including
the cost of any record or transcripts of the arbitration, administrative fees,
the fee of the arbitrator, and all other fees and costs, shall be borne equally
by the parties.

 

16.
Choice of Law. The formation,
construction, and performance of this agreement shall be construed in
accordance with the laws of California.

 

17.
Notices. Any notice to Company
required or permitted under this agreement shall be given in writing to
Company, either by personal service or by registered or certified mail, postage
prepaid, at its then principal place of business. Any such notice to Executive
shall be given in a like manner and, if mailed, shall be addressed to Executive
at his home address then shown in Company’s files. For the purpose of
determining compliance with any time limit in this agreement, a notice shall be
deemed to have been duly given (a) on the date of service, if served
personally on the party to whom notice is to be given, or (b) on the
second business day after mailing, if mailed to the party to whom the notice is
to be given in the manner provided in this section.

 

18. Severability. If any
provision of this agreement is held invalid or unenforceable, the remainder of
this agreement shall nevertheless remain in full force and effect. If any
provision is held invalid or unenforceable with respect to particular
circumstances, it shall nevertheless remain in full force and effect in all
other circumstances.

 

19. Execution. Executed
by the parties as of the day and year first above written.

 

	
   

  	
  GEOPETRO RESOURCES COMPANY

  
	
   

  	
  By:

  	
  “Lawrence Barker, Jr.”

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Chairman & Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Stuart J. Doshi

  

 

 

STUART DOSHI EMPLOYMENT AGREEMENT AMENDMENT

DATED JANUARY 11, 2001

 

 

AMENDMENT TO

EMPLOYMENT AGREEMENT

 

This AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”)
is made as of this 11th day of January 2001, by and between GeoPetro
Resources Company, a California corporation (“Company”)
and Stuart Doshi (“Executive”).

 

RECITALS

 

A.            Company and
Executive are the parties to that certain Employment Agreement dated
June 28, 1997 (the “Original Agreement”).

 

B.            The parties hereto
now wish to amend the Original Agreement as set forth below.

 

NOW, THEREFORE, Company and Executive hereby agree as follows:

 

1. Amendment of Original Agreement.

 

(a)           The parties hereby amend
the definition of the term “Basic Salary” for purposes of the Original
Agreement, effective January 1, 2001, to be as follows:

 

Two Hundred Forty Thousand Dollars ($240,000)

 

per year, payable in equal monthly installments.

 

(b)           Section 7(b) of
the Original Agreement is hereby revised to read in full as follows:

 

(b)  Upon Public Listing, the
Basic Salary shall be increased to the higher of (i) Two Hundred Forty
Thousand Dollars ($240,000) per year and (ii) such amount as equals the
average base salary paid to chief executive officers of oil and gas companies
with a market capitalization comparable to that of Company (a “Comparable
Company”). Such amount shall be subject to the annual inflation adjustment set
forth in Section 7(a).

 

2. Integration. To the
extent of any inconsistencies between the terms and conditions of the Original
Agreement and those of this Amendment, this Amendment shall govern. Except to
the extent that the provisions of the Original Agreement are so superseded,
they shall remain in full force and effect.

 

3. Counterparts. This
Amendment may be executed in one or more counterparts, each of which shall be
an original, but all of which together shall constitute one instrument.

 

IN WITNESS WHEREOF, Company and Executive have executed this Amendment
as of the date first above written.

 

	
  GeoPetro Resources Company

  
	
  By:

  	
  Kevin Delehanty

  	
  Stuart Doshi

  
	
  Title:

  	
  Director

  	
   

  

 

 

SECOND AMENDMENT TO

EMPLOYMENT AGREEMENT

 

This SECOND AMENDMENT TO
EMPLOYMENT AGREEMENT (this “Amendment”) is made as of this          
day of July 2003, by and between GeoPetro Resources Company, a California
corporation (“Company”) and Stuart J. Doshi (“Executive”).

 

RECITALS

 

A.           Company and Executive are the parties to that certain
Employment Agreement dated June 28, 1997 (the “Original Agreement”), and to
that certain Amendment to Employment Agreement dated January 11, 2001.

 

B.            The parties hereto now wish to amend the Original
Agreement as amended as set forth below.

 

NOW, THEREFORE, Company and
Executive hereby agree as follows:

 

1.             Amendment of  Original Agreement.

 

(a)                                   The parties hereby amend the definition of
the term “Basic Salary” for purposes of the Original Agreement as amended,
effective July 1, 2003, to be as follows:

 

Three
Hundred Thousand Dollars ($300,000.00) per year, payable in equal monthly
installments.

 

(b)                                  Section 7(b) of the Original Agreement as
amended is hereby revised to read in full as follows:

 

(b)              Upon Public Listing, the Basic
Salary shall be increased to the higher of (i) Three Hundred Thousand Dollars
($300,000.00) per year and (ii) such amount as equals the average base salary
paid to chief executive officers of oil and gas companies with a market
capitalization comparable to that of Company (a “Comparable Company”). Such
amount shall be subject to the annual inflation adjustment set forth in Section
7(a).

 

2.             Integration. To the extent of any inconsistencies
between the terms and conditions of the Original Agreement and those of this
Amendment, this Amendment shall govern. Except to the extent that the
provisions of the Original Agreement are so superseded, they shall remain in
full force and effect.

 

3.             Counterparts.
This Amendment may be executed in one or more counterparts, each of which shall
be an original, but all of which together shall constitute one instrument.

 

IN WITNESS WHEREOF, Company and Executive have executed this Amendment
as of the date first above written.

 

 

	
  GeoPetro Resources Company

  
	
   

  
	
   

  
	
  /s/ Kevin Delehanty

  	
   

  	
  /s/ Stuart J. Doshi

  
	
  By:

  	
  Stuart J. Doshi

  
	
   

  	
   

  
	
  Title: Director

  	
   

  

 

 

THIRD AMENDMENT TO

EMPLOYMENT AGREEMENT

 

This THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
(this “Amendment”) is made as of this 20th
day of April, 2004, by and between GeoPetro Resources Company, a California
corporation (“Company”) and Stuart J. Doshi (“Executive”).

 

RECITALS

 

A.                                   The Company and Executive are parties to the
Employment Agreement dated June 28, 1997 (the “Original
Agreement”), as amended by the Amendment to Employment Agreement
dated January 11, 2001 and the Second Amendment to Employment Agreement dated
July 1, 2003.

 

B.                                     The parties hereto now wish to amend the
Original Agreement as amended as set forth below.

 

NOW THEREFORE, Company and Executive hereby agree as
follows: 

 

1.                                       Amendment of Original Agreement.

 

The parties hereby amend the
Original Agreement by deleting Section 7(b) of the Original Agreement in its
entirety.

 

2.                                       Integration. To the extent of any inconsistencies between the terms and conditions
of the Original Agreement and those of this Amendment, this Amendment shall
govern. Except to the extent that the provisions of the Original Agreement are
so superseded, they shall remain in full force and effect.

 

3.                                       Counterparts. This Amendment may be executed in one or
more counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.

 

 

 

IN WITNESS WHEREOF
Company and Executive have executed this agreement as of the date
first above written. 

 

 

	
  GEOPETRO
  RESOURCES COMPANY

  
	
   

  
	
  /s/
  J. Chris Steinhauser

  	
   

  	
  /s/ Stuart J. Doshi

  
	
  By:

  	
   

  	
  STUART J. DOSHI

  
	
  Title: Chief Financial
  Officer

  	
   

  	
   

  

 

 

FOURTH
AMENDMENT TO

EMPLOYMENT
AGREEMENT

 

This FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT
(this “Amendment”) is made this 9th day of
May, 2005, by and between GeoPetro Resources Company, a California corporation
(“Company”) and Stuart J. Doshi (“Executive”).

 

RECITALS

 

A.                                   Company and Executive are parties to the
Employment Agreement dated June 28, 1997 (the “Original
Agreement”), as amended by the Amendment to Employment Agreement
dated January 11, 2001, the Second Amendment to Employment Agreement dated July
1, 2003 and the Third Amendment to Employment Agreement dated April 20, 2004.

 

B.                                     The parties hereto now wish to amend the
Original Agreement as amended as set forth below.

 

NOW THEREFORE,
Company and Executive hereby agree as follows;

 

1.                                       Amendment of Original Agreement.

 

(a)                                  Section 5 of the Original Agreement is hereby
revised to read in full as follows:

 

Term. Subject to earlier termination as provided
in this agreement, the employment term of this agreement (the “Term”) shall be
a six-year term commencing effective May 1, 2005 (the “Initial Term”). The Term
shall automatically be extended for successive two-year renewal terms (each a “Renewal
Term”) at the end of the Initial Term and at the end of each Renewal Term
unless (a) (i) a majority of the members of the board of directors of the
Company adopts a resolution to the effect that this agreement will not be
renewed past the Term or then-current Renewal Term, as the case may be, and
(ii) the Company provides notice of such non-renewal at least six months prior
to the end of the Initial Term or the then-current Renewal Term, as the case
may be, or (b) Executive provides notice at any time prior to the end of the
Initial Term or the then-current Renewal Term, as the case may be, that he
elects not to renew the Term.

 

(b)                                 The first paragraph of Section 13(e) of the
Original Agreement is hereby revised to read in full as follows:

 

Upon an Involuntary
Termination of the employment relationship by either Company or Executive prior
to the expiration of the Term, Executive shall be entitled, in consideration of
Executive’s continuing obligations hereunder after such termination, to receive
immediately in cash an amount equal to (a) the greater of (i) Executive’s
salary (including Executive’s Basic Salary as adjusted from year to year in
accordance with Section 7(a) hereof) for the remainder of the Term, or

 

 

(ii) Executive’s
then-effective annual salary (including Executive’s Basic Salary as adjusted
from year to year in accordance with Section 7(a) hereof) multiplied by four
(4), (b) the aggregate amount of the bonuses awarded to Executive by Company
pursuant to Section 10 hereof in respect of the previous four fiscal years, and
(c) an amount equal to 20% of the aggregate amount to which Executive is
entitled under clause (a)(i) or (a)(ii) above, as applicable, as payment for
the benefits which otherwise would have been provided pursuant to this
agreement. Company shall additionally be obligated immediately to purchase for
cash all vested stock options and vested restricted Common Shares, without
discount for liquidity or minority position, then held by Executive at the then
current fair market value and such repurchased stock options and restricted
Common Shares shall be returned to the Company for cancellation. In addition,
all stock options granted pursuant hereto or pursuant to the Company’s stock
option plan that remain unvested as of the date of any such Involuntary
Termination shall immediately vest on such date and Executive shall be entitled
to exercise such stock options until their respective expiry dates.

 

As used in this agreement, “Involuntary
Termination” shall also mean the non-renewal of the Term by the Company
pursuant to Section 5(a) hereof or termination of Executive’s employment with
company if such termination results from termination by Executive within ninety
(90) days of and in connection with or based upon (x) a Change of Control of
the Company, (y) reduction in title, duties or authority to below Chief
Executive Officer, or (z) Executive ceasing to report directly to the Board of
Directors.

 

A “Change in Control” shall
be deemed to have occurred if (i) person becomes, after the date hereof, the
owner or “beneficial owner” (as defined in the Securities Act (Ontario)),
directly or indirectly, of securities of the Company representing 50% or more
of the combined voting power of the Company’s then outstanding securities; (ii)
during any two year period, individuals who at the beginning of such period
constitute the board of directors, including for this purpose any additional
director whose election was approved by a vote of at least two-thirds of the
directors then in office who were directors at the beginning of the period,
cease for any reason to constitute a majority thereof; (iii) the Company
consummates a merger, amalgamation, arrangement or consolidation of the Company
or other similar transaction with or into another corporation or business
entity (a “Reorganization”), the result of which is that the shareholders of
the Company at the time of the execution of the agreement relating to the
Reorganization own less than 50% of the total equity of the corporation
surviving or resulting from the Reorganization or of a corporation owning,
directly or indirectly, 100% of the total equity of such surviving or resulting
corporation; or (iv) the sale in one or a series of transactions of all or
substantially all of the assets of the Company.

 

2.                                       Effective Date. The terms of this amendment will be
effective as of May 1, 2005, provided that

 

 

the parties hereto agree
that this Amendment shall be ‘terminated and the terms herein shall be repealed
and be of no further force and effect in the event that: (i) Company’s
engagement of Dundee Securities Corporation (“Dundee”) to underwrite an initial
public offering of Company’s shares of common stock is terminated by either
Company or Dundee, or (ii) Company has not completed an initial public offering
of Company’s shares of common stock by the close of business on September 30,
2005. In the event that this amendment is terminated as described herein, the
employment arrangement between Company and Executive shall thereafter be
governed by the Original Agreement, as amended prior to the date of this
amendment.

 

3.                                       Integration. To the extent of any inconsistencies between the terms and conditions
of the Original Agreement and those of this Amendment, this Amendment shall
govern. Except to the extent that the provisions of the Original Agreement arc
so superseded, they shall remain in full force and effect.

 

4,                                       Counterparts. This Amendment may be executed in one or
more counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.

 

IN WITNESS WHEREOF Company and Executive have executed this
agreement as of the date first above written.

 

 

	
  GEOPETRO
  RESOURCES COMPANY

  
	
   

  
	
   

  
	
  /s/
  Kevin Delchanty

  	
   

  	
  /s/
  Stuart J. Doshi

  
	
  By:

  	
   

  	
  STUART J.
  DOSHI

  
	
  Title: Director

  	
   

  	
   

  

 

 

RESTATED FOURTH AMENDMENT TO

EMPLOYMENT AGREEMENT

 

This RESTATED FOURTH AMENDMENT TO EMPLOYMENT
AGREEMENT (this “Amendment”) is made effective the
this 9th day of May, 2005, by and between GeoPetro Resources Company, a
California corporation (“Company”) and
Stuart J. Doshi (“Executive”).

 

RECITALS

 

A.                                   Company and Executive are parties to the
Employment Agreement dated June 28, 1997 (the “Original Agreement”), as amended
by the Amendment to Employment Agreement dated January 11, 2001, the Second
Amendment to Employment Agreement dated July 1, 2003 and the Third Amendment to
Employment Agreement dated April 20, 2004.

 

B.                                     Company and Executive entered into a Fourth
Amendment to Employment Agreement dated May 9, 2005 (the “Original Fourth
Amendment”).

 

C.                                     The parties hereto now wish to amend and
restate the Original Fourth Amendment to give effect to the amendments to the
Original Agreement as set forth below.

 

NOW
THEREFORE, Company
and Executive hereby agree as follows: 

 

1.                                       Amendment of Original Agreement

 

(a)                                  Section 5 of the Original Agreement is hereby
revised to read in fall as follows:

 

Term. Subject to earlier termination as provided
in this agreement, the employment term of this agreement (the “Term”) shall be
a five-year term commencing effective May 1, 2005 (the “Initial Term”), The
Term shall automatically be extended for successive two-year renewal terms
(each a “Renewal Term”) at the end of the Initial Term and at the end of each
Renewal Term unless (a) (i) a majority of the members of the board of directors
of the Company adopts a resolution to the effect that this agreement will not
be renewed past the Term or then-current Renewal Term, as the case may be, and
(ii) the Company provides notice of such non-renewal at least six months prior
to the end of the Initial Term or the then-current Renewal Term, as the case
may be, or (b) Executive provides notice at any time prior to the end of the
Initial Term or the then-current Renewal Term, as the case may be, that he
elects not to renew the Term.

 

(b)                                 The first paragraph of Section 13(e) of the
Original Agreement is hereby revised to read in full as follows:

 

Upon an Involuntary
Termination of the employment relationship by either Company or Executive prior
to the expiration of the Term,

 

 

Executive shall be entitled,
in consideration of Executive’s continuing obligations hereunder after such
termination, to receive immediately in cash an amount equal to (a) the greater
of (i) Executive’s salary (including Executive’s Basic Salary as adjusted from
year to year in accordance with Section 7(a) hereof) for the remainder of the
Term, or (ii) Executive’s then-effective annual salary (including Executive’s
Basic Salary as adjusted from year to year in accordance with Section 7(a)
hereof) multiplied by four (4), (b) the aggregate amount of the bonuses awarded
to Executive by Company pursuant to Section 10 hereof in respect of the
previous four fiscal years, and (c) an amount equal to 20% of the aggregate
amount to which Executive is entitled under clause (a)(i) or (a)(ii) above, as
applicable, as payment for the benefits which otherwise would have been
provided pursuant to this agreement. Company shall additionally be obligated
immediately to purchase for cash all vested stock options and vested restricted
Common Shares (collectively, the “Incentive Securities”) without discount for
liquidity or minority position, then held by Executive at the fair market value
at the time of the Involuntary Termination, and such repurchased Incentive
Securities shall be returned to the Company for cancellation, provided that at
Company’s option, the Company may elect to purchase one third of the Incentive
Securities at the time of the Involuntary Termination and one third of the
Incentive Securities on each of the first and second anniversaries of the
Involuntary Termination. In addition, all stock options granted pursuant hereto
or pursuant to the Company’s stock option plan that remain unvested as of the
date of any such Involuntary Termination shall immediately vest on such date
and Executive shall be entitled to exercise such stock options until their respective
expiry dates.

 

As used in this agreement, “Involuntary
Termination” shall also mean the non-renewal of the Term by the Company
pursuant to Section 5(a) hereof or termination of Executive’s employment with
company if such termination results from termination by Executive within ninety
(90) days of and in connection with or based upon (x) a Change of Control of
the Company, (y) reduction in title, duties or authority to below Chief
Executive Officer, or (z) Executive ceasing to report directly to the Board of
Directors.

 

A “Change in Control” shall
be deemed to have occurred if (i) any person becomes, after the date hereof,
the owner or “beneficial owner” (as defined in the Securities Act (Ontario)),
directly or indirectly, of securities of the Company representing 50% or more
of the combined voting power of the Company’s then outstanding securities; (ii)
during any two year period, individuals who at the beginning of such period
constitute the board of directors, including for this purpose any additional
director whose election was approved by a vote of at least two-thirds of the
directors then in office who were directors at the beginning of the period,
cease for any reason to constitute a majority thereof; (iii) the Company
consummates a merger, amalgamation, arrangement or consolidation of the Company
or other similar transaction with or into another corporation or business
entity (a “Reorganization”), the result of which is that the shareholders of
the

 

 

Company at the time of the
execution of the agreement relating to the Reorganization own less than 50% of
the total equity of the corporation surviving or resulting from the
Reorganization or of a corporation owning, directly or indirectly, 100% of the
total equity of such surviving or resulting corporation; or (iv) the sale in
one or a series of transactions of all or substantially all of the assets of
the Company.

 

2.                                       Effective Date. The terms of this amendment will be
effective as of May 1, 2005, provided that
the parties hereto agree that this Amendment shall be terminated and the terms
herein shall be repealed and be of no further force and effect in the event
that: (i) Company’s engagement of Dundee Securities Corporation (“Dundee”) to
underwrite an initial public offering of Company’s shares of common stock is
terminated by either Company Of Dundee, or (ii) Company has not completed an
initial public offering of Company’s shares of common stock by the close of business
on September 30, 2005. In the event that this amendment is terminated as described
herein, the employment arrangement between Company and Executive shall
thereafter be governed by the Original Agreement, as amended prior to the date
of this amendment.

 

3.                                       Replacement of Original Fourth Amendment. The Original Fourth Amendment is hereby rescinded
in its entirety and is replaced by this Amendment.

 

4.                                       Integration. To the extent of any inconsistencies between the terms and conditions
of the Original Agreement and those of this Amendment, this Amendment shall
govern. Except to the extent that the provisions of the Original Agreement are
so superseded, they shall remain in full force and effect.

 

5.                                       Counterparts. This Amendment may be executed in one or
more counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.

 

IN WITNESS WHEREOF Company and Executive have executed this
agreement as of the date first above written.

 

 

	
  GEOPETRO RESOURCES COMPANY

  
	
   

  
	
   

  
	
  /s/ Kevin Delchanty

  	
   

  	
  /s/ Stuart J. Doshi

  
	
  By: Kevin Delchanty

  	
   

  	
  STUART J. DOSHI

  
	
  Title: Director

  	
   

  	
   

  

 

 

FIFTH AMENDMENT
TO

EMPLOYMENT AGREEMENT

 

This FIFTH AMENDMENT TO EMPLOYMENT AGREEMENT
(this “Fifth Amendment”) is
made effective the this 28th day of July,
2005, by and between GeoPetro Resources Company, a California corporation (“Company”) and Stuart J. Doshi (“Executive”).

 

RECITALS

 

A.                                   Company and Executive are parties to the
Employment Agreement, dated June 28, 1997 (the “Original Agreement”), as amended by the Amendment to
Employment Agreement, dated January 11, 2001, the Second Amendment to
Employment Agreement, dated July 1, 2003, the Third Amendment to Employment
Agreement, dated April 20, 2004 and the Restated Fourth Amendment to Employment
Agreement, dated May 9, 2005 (the “Fourth
Amendment”),  The Original
Agreement, as amended through and including the Fourth Amendment, is referred
to as the “2004 Agreement.”

 

B.                                     The parties hereto now wish to amend the 2004
Agreement as set forth below,

 

NOW THEREFORE, Company and Executive hereby agree as follows:

 

1.                                       Amendment of 2004 Agreement.

 

(a)                                  Section 5 of the 2004 Agreement is hereby
revised to read in full as follows:

 

Term. Subject to earlier termination as provided
in this agreement, the employment term of this agreement (the “Term”) shall be a five-year term commencing effective May 1,
2005 (the “Initial Term”). The Term shall automatically be
extended for successive two-year renewal terms (each a “Renewal Term”) at the end of the Initial
Term and at the end of each Renewal Term unless (a) (i) a majority of the
members of the board of directors of the Company adopts a resolution to the
effect that this agreement will not be renewed past the Term or then-current
Renewal Term, as the case may be, and (ii) the Company provides notice of such
non-renewal at least six months prior to the end of the Initial Term or the
then-current Renewal Term, as the case may be, or (b) Executive provides notice
at any time prior to the end of the Initial Term or the then-current Renewal
Term, as the case may be, that he elects not to renew the Term. Notwithstanding
the foregoing, the Term shall terminate automatically at the end of the
calendar year in which Executive attains age 75 unless both parties agree to
extend the Term for additional one-year periods.

 

(b)                                 The first paragraph of Section 13(e) of the
2004 Agreement is hereby revised to read in full as follows:

 

 

Upon an Involuntary
Termination of the employment relationship by either Company or Executive prior
to the expiration of the Term:

 

(i) Executive shall be
entitled, in consideration of Executive’s continuing obligations hereunder
after such termination, to receive immediately in cash an amount equal to (a)
the greater of (x) Executive’s salary (including Executive’s Basic Salary as
adjusted from year to year in accordance with Section 7(a) hereof) for the
remainder of the Term, or (y) Executive’s then-effective annual salary
(including Executive’s Basic Salary as adjusted from year to year in accordance
with Section 7(a) hereof) multiplied by four (4), (b) the aggregate amount of
the bonuses awarded to Executive by Company pursuant to Section 10 hereof in
respect of the previous four fiscal years, and (c) an amount equal to 20% of
the aggregate amount to which Executive is entitled under clause (a)(x) or
(a)(y) above, as applicable, as payment for the benefits which otherwise would
have been provided pursuant to this agreement; and

 

(ii) Executive shall be
deemed to have exercised by a cash payment all of his vested stock options and
delivered to Company (a) all shares of Common Stock he would have received upon
exercise, as well as (b) all vested restricted shares of Common Stock (with (a)
and (b) together, the “Tendered Shares”) and in return therefore Company shall deliver to
Executive such number of shares of Common Stock (the “Termination Shares”) equal
to the quotient of; (i) the difference between (A) the aggregate total Fair
Market Value of all of the Tendered Shares (as Fair Market Value is defined in
Company’s 2004 Stock Option and Appreciation. Rights Plan, notwithstanding the
fact that not all, and possibly none, of Executive’s options or restricted
shares were granted under such Plan), less (B) the aggregate total exercise
price, if any, for all of the Tendered Shares; over (ii) the Fair Market Value
of one share of Common Stock. The Termination Shares to be delivered to
Executive under this paragraph shall (a) have been registered by Company with
the U.S. Securities and Exchange Commission pursuant to an effective Form S-8
Registration Statement or other registration statement permitting the immediate
public resale thereof; and (b) if shares of Common Stock are traded on an
exchange outside of the United States (a “Foreign
Exchange”) at the time of an Involuntary Termination, Company shall
also have taken all necessary steps, including all governmental registration(s)
or filing(s), to permit Executive to immediately sell the Termination Shares on
such Foreign Exchange.

 

In the event the
registration(s) and filing(s) described in the prior sentence shall not have
become effective by the time of any Involuntary Termination, then in lieu of
the exchange of Option Shares for Termination Shares described above, Company
shall be obligated immediately to purchase for cash all vested stock options
and vested restricted Common Shares (collectively, the “Incentive Securities”)

 

2

 

without discount for
liquidity or minority position, then held by Executive at the fair market value
at the time of the Involuntary Termination, and such repurchased Incentive
Securities shall be returned to the Company for cancellation. In addition, all
stock options granted pursuant hereto or pursuant to the Company’s stock option
plan that remain unvested as of the date of any such Involuntary Termination
shall immediately vest on such date and Executive shall be entitled to exercise
such stock options until their respective expiry dates.

 

As used in this agreement, “Involuntary  Termination” shall
also mean (except for the termination provided for in Section 5(a) as a result
of attaining age 75) the non-renewal of the Term by the Company pursuant to
Section 5(a) hereof or termination of Executive’s employment with company if
such termination results from termination by Executive within ninety (90) days
of and in connection with or based upon (x) a Change of Control of the Company,
(y) reduction in title, duties or authority to below Chief Executive Officer,
or (z) Executive ceasing to report directly to the Board of Directors.

 

A “Change in
Control” shall be deemed to have occurred if (1) any person becomes,
after the date hereof, the owner or “beneficial owner” (as defined in the
Securities Act (Ontario)), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s then
outstanding securities; (ii) during any two year period, individuals who at the
beginning of such period constitute the board of directors, including for this
purpose any additional director whose election was approved by a vote of at
least two-thirds of the directors then in office who were directors at the
beginning of the period, cease for any reason to constitute a majority thereof;
(iii) the Company consummates a merger, amalgamation, arrangement or
consolidation of the Company or other similar transaction with or into another
corporation or business entity (a “Reorganization”),
die result of which is that the shareholders of the Company at the
time of the execution of the agreement relating to the Reorganization own less
than 50% of the total equity of the corporation surviving or resulting from the
Reorganization or of a corporation owning, directly or indirectly, 100% of the
total equity of such surviving or resulting corporation; or (iv) the sale in
one or a series of transactions of all or substantially all of the assets of
the Company.

 

2.                                       Effective Date. The terms of this Fifth Amendment will be
effective as of July 28, 2005, provided that
the parties hereto agree that this Fifth Amendment and the Fourth Amendment
shall be terminated and the terms herein and therein shall be repealed and be
of no further force and effect in the event that: (i) Company’s engagement of
Dundee Securities Corporation (“Dundee”) to
underwrite an initial public offering of Company’s shares of common stock is terminated
by either Company or Dundee, or (ii) Company has not completed an initial
public offering of Company’s shares of common stock by the close of business on
December 31 , 2005. In the event that this Fifth Amendment and the

 

3

 

Fourth Amendment are
terminated as described herein, the employment arrangement between Company and
Executive shall thereafter be governed by the Original Agreement, as amended
prior to the date of the Fourth Amendment.

 

3.                                       Integration. To the extent of any inconsistencies between the terms and conditions
of the 2004 Agreement as amended prior to the date hereof and those of this
Fifth Amendment, this Fifth Amendment shall govern. Except to the extent that
the provisions of the 2004 Agreement as amended prior to the date hereof are so
superseded, they shall remain in full force and effect.

 

4.                                       Counterparts. This Fifth Amendment may be executed in one
or more counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.

 

IN WITNESS WHEREOF Company and Executive have executed this
agreement as of the date first above written.

 

 

	
  GEOPETRO
  RESOURCES COMPANY

  
	
   

  
	
   

  
	
  /s/
  Kevin M. Delchanty

  	
   

  	
  /s/
  Stuart J. Doshi

  	
   

  
	
  By:
  Kevin M. Delchanty

  	
   

  	
  STUART
  J. DOSHI

  	
   

  
	
  Title:
  Director 

  	
   

  	
   

  	
   

  

 

4

 

SIXTH
AMENDMENT TO

EMPLOYMENT
AGREEMENT

 

This SIXTH AMENDMENT TO EMPLOYMENT AGREEMENT
(this “SIXTH AMENDMENT”) is made effective
this 30th day January, 2006 by and between GeoPetro Resources
Company, a California Corporation (“Company”) and
Stuart J. Doshi (“Executive”).

 

RECITALS

 

A.            Company
and Executive are parties to the Employment Agreement, dated June 28, 1997 (the
“Original Agreement”), as amended by the
Amendment to Employment Agreement, dated January 11, 2001, the Second Amendment
to Employment Agreement, dated July 1, 2003, the Third Amendment to Employment
Agreement, dated April 20,2004, the Restated Fourth Amendment to Employment
Agreement dated May 9, 2005 (The “Fourth Amendment”),
and the Fifth Amendment to Employment Agreement dated July 28, 2005 (the “Fifth Amendment”). The Original Agreement, as amended
through and including the Fifth Amendment, is referred to as the “2004
Agreement.”

 

B.            The
parties hereto now wish to amend the 2004 Agreement as set forth below. 

 

NOW THEREFORE, Company and Executive hereby agree as
follows:

 

1.               Effective Date. The parties hereto agree that the terms of
the Fourth Amendment and Fifth Amendment shall be in full force and effect and
that the terms shall continue in effect provided that the (i) Company’s
engagement of Dundee Securities Corporation (“Dundee”)
to underwrite an initial public offering of the Company’s shares of common stock
is not terminated, or (ii) Company has completed an initial public offering of Company’s
shares of common stock by the close of business on March 31, 2006.

 

2                  Integration. To the extent of any inconsistencies between the terms and conditions
of the 2004 Agreement as amended prior to the date hereof and those of this
Sixth Amendment, this Sixth Amendment shall govern. Except to the extent that
the provisions of the 2004 Agreement prior to the date hereof are so
superseded, they shall remain if full force and effect.

 

3.               Counterparts. This Sixth Amendment may be executed in one
or more counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.

 

IN WITNESS WHEREOF Company and Executive have executed this
agreement as of the date first above written.

 

 

	
  GEOPETRO
  RESOURCES COMPANY

  
	
   

  
	
  /s/
  J. Chris Stenhauser

  	
   

  	
  /s/
  Stuart J. Doshi

  	
   

  
	
  By:
  J. Chris Stenhauser

  	
  STUART J.
  DOSHI

  
	
  Title:
  Chief Financial Officer

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