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Exhibit 10.3--Escrow Agreement

This Amended and Restated Escrow Agreement (the "Agreement") is entered into on this 15th day of March,  2006, between Zion Oil & Gas, Inc, a Delaware Corporation with offices at 6510 Abrams Road, #300, Dallas, TX 75231 and whose Federal T.I.N. is 20-0065053 (hereinafter called the "Sponsor") and Sterling Trust Company, a Texas trust company, with offices at 7901 Fish Pond Road, Waco, Texas  76710 (hereinafter called the "Escrow Agent"). 

Recitals

WHEREAS, pursuant to the terms of the offering described in Sponsor's Preliminary Prospectus dated January 25, 2006 (the "Offering"), the Sponsor desires to establish an escrow account (the "Escrow Account") for the deposit and disbursement of investment monies received from investors in the Offering (as defined in Paragraph 3 below); 

 

WHEREAS, the Escrow Agent is duly licensed in the State of Texas to act and is willing to act as an escrow agent upon the terms and conditions hereinafter set forth; and 

WHEREAS, the parties to this Agreement covenant and agree with each other as follows: 

	Appointment of Escrow Agent:  The Escrow Agent is hereby appointed depository with respect to the Offering (as defined in Paragraph 3 below) pursuant to the terms and conditions of this Agreement. The Escrow Agent hereby represents and warrants to the Company that it is a "Bank" as such term is defined by Section 3(a)(6) of the Securities Exchange Act of 1934, as amended (the "Act").

	Deposit with Escrow Agent:   The Escrow Agent agrees to accept and hold, from time to time, funds that shall be delivered to the Escrow Agent. The Escrow Agent shall place the escrow deposits in an interest-bearing account captioned "Sterling Trust Company, Escrow Agent fbo Zion Oil Subscribers" and will hold the funds for safekeeping. All checks delivered to the Escrow Agent shall be made payable to "Sterling Trust Company, Escrow Agent fbo Zion Oil Subscribers."  Subscribers' checks will be transmitted to the Escrow Agent by noon of the next business day after receipt by broker/dealers.  The funds will be held along with other escrow funds and the Escrow Agent will be responsible for subaccounting each account balance and the interest earned thereon. The Escrow Agent agrees that it shall only deposit into the Escrow Account checks made payable to the Escrow Agent and will promptly return any check which it receives which is not made payable to the Escrow Agent to the Sponsor. 

Each escrow deposit will be accompanied by a list provided by the Sponsor which specifies the name and address of the investor and the date and amount of each subscription in the Offering, and shall include a copy of the investor's completed subscription agreement which shall include investor's completed Certification of Taxpayer Identification Number as a substitute for IRS Form W-9 relating to U.S. residents and for IRS Form W-8Ben relating to non-U.S. residents .  Funds received from persons purchasing subscriptions in the Offering shall be recorded on the books and records of Sterling Trust Company Escrow Account FBO (name of investor).  

	The Offering:  The Sponsor is offering to investors up to 20,000 units, at $700 per unit (the "Offering"), all as more fully described in the Prospectus. 

Subscriptions for a minimum of $2,450,000 (the "Minimum Subscription"), or 3,500 units, must be accepted by the Sponsor in order for the Sponsor to accept any subscription, and prior to accepting subscriptions, the Sponsor may withdraw the Offering in its sole discretion for any reason whatsoever. The minimum subscription amount per investor which will be accepted by Sponsor will be $700, or one unit. 

The Escrow Agent is not a party to, and is not bound by, or charged with notice of, any agreement out of which this escrow may arise. 

	Duration of Escrow Account and Disbursement of Funds:  Escrow Agent shall hold the funds in the Escrow Account until the first to occur of the following events, and upon such occurrence, the Escrow Agent shall deliver the funds as follows: 

	In the event the Minimum Subscription is not met by the Termination Date (as such term is defined in the Prospectus), the Escrow Agent will refund to the individual investors on record any amounts on deposit along with accrued interest thereon. 

	In the event the Minimum Subscription is successful (as evidenced by a written certificate from a duly authorized signatory), all subscription monies in the Escrow Account plus interest thereon will be released to, and in the name of, the Sponsor as directed in the written certificate on an initial closing date specified in writing by the Sponsor.  Thereafter, all funds deposited in the Escrow Account and interest thereon will be released to the Sponsor as Subscription Agreements are accepted by the Sponsor. 

	Collection Procedure:  The Escrow Agent shall be under no duty or responsibility to enforce collection of any checks delivered to Escrow Agent. The Escrow Agent is hereby authorized to forward each check for collection and upon collection of the proceeds of each check, deposit the collected proceeds in the Escrow Account. As an alternative, the Escrow Agent may at its discretion telephone the bank on which the check is drawn to confirm that the check has been paid.  The Escrow Agent will not be accountable for the proceeds of any such item until the proceeds are received by the Escrow Agent in final collected funds. Escrow Agent shall promptly return any check or instrument received from the Sponsor or agent of the Sponsor upon which payment is refused, together with the related documents which were delivered to Escrow Agent. In such cases, the Escrow Agent will promptly notify the Sponsor of such return. 

If the Sponsor rejects any subscription for which the Escrow Agent has already collected funds, the Escrow Agent shall promptly issue a refund check to the rejected subscriber.  If the Sponsor rejects any subscription for which the Escrow Agent has not yet collected funds but has submitted the subscriber's check for collection, the Escrow Agent shall promptly issue a check in the amount of the subscriber's check to the rejected subscriber after the Escrow Agent has cleared such funds.  If the Escrow Agent has not yet submitted a rejected subscriber's check for collection, the Escrow Agent shall promptly remit the subscriber's check directly to the subscriber. 

If Escrow Agent has disbursed funds to Sponsor and subsequently subscriber's check is returned for any reason, the Sponsor shall become responsible for reimbursing the Escrow Agent.  Upon receipt of reimbursement funds, Escrow Agent will return subscriber's check to Sponsor. 

	Investment of Escrow Amount:  The Escrow Agent may invest the Escrow Amount only in such accounts or investments as detailed in this Paragraph 6.  The Escrowed Funds shall be invested by the Escrow Agent in accordance with the signed, written instructions of the CEO, the President, any executive vice-president or the Sr. Vice President of Finance of the Company (the "Authorized Officers").  In the absence of written instructions from the above-named party, the Escrow Agent shall invest the Escrowed Funds in the money market funds customarily utilized by the Escrow Agent's escrow department in the ordinary course of its escrow agent duties, provided however, that escrowed funds will be invested only in investments permissible under SEC rule 15c2-4.  In investing the Escrowed Funds, the Escrow Agent shall rely upon the written instructions of an Authorized Officer and the Escrow Agent shall be and hereby is relieved of all liability with respect to making, holding, redeeming or selling such investments in accordance with such instructions. 

	Liability of Escrow Agent:  The duties and obligations of the Escrow Agent pursuant to this Agreement will be determined solely by the express provisions of this Agreement and the laws of the State of Texas. The Escrow Agent acts hereunder as a depository only, and is not responsible or liable in any manner whatever for the sufficiency, correctness, genuineness or validity of the subject matter of the escrow, or any part thereof, or for the form or execution thereof, or for the identity or authority of any person executing or depositing it. The Escrow Agent shall have no implied duties or obligations to determine or inquire into the happening or occurrence of any event or contingency, or the performance or failure of performance of any of the parties to this Agreement, except as set forth in Paragraph 4 of this Agreement.  The Escrow Agent's sole duty pursuant to this Agreement shall be to safeguard the deposited funds in the Escrow Account and to dispose and deliver the same in accordance with the instruction given to the Escrow Agent in accordance with Paragraph 4 of this Agreement.  In the event that the Escrow Agent is called upon by the terms of this Agreement to determine the occurrence of any event or contingency, the Escrow Agent shall be obligated in making such determination, only to exercise reasonable care and diligence as a fiduciary of the funds. The Escrow Agent shall be liable for anything which it may do or refrain from doing only if its conduct represents misconduct or negligence in light of all the circumstances surrounding such actions taking into consideration the time and facilities available to the Escrow Agent in the ordinary conduct of its business.  In determining the occurrence of any such event or contingency the Escrow Agent may request from any of the parties hereto, or any other person, such reasonable additional evidence as the Escrow Agent in its sole discretion may deem necessary to determine any fact relating to the occurrence of such event or contingency, and in this connection, may inquire and consult with any of the parties to this Agreement.  The Escrow Agent shall not be liable for any damages resulting from its delay in acting hereunder pending its examination of the additional evidence that has been requested by the Escrow Agent.  In the event that the Escrow Agent is required to take certain action upon the occurrence of any event or contingency, the time prescribed for action by the Escrow Agent shall, in all cases, be reasonable time after written notice to the Escrow Agent of the occurrence of such event or contingency. In the event the Escrow Agent becomes involved in litigation between the Sponsor and its underwriter or subscribers in connection with this escrow, or in the event the Escrow Agent files its own interpleader in any court of competent jurisdiction to determine the rights of the Sponsor, its underwriter or subscribers, the Sponsor agrees to indemnify and save the Escrow Agent harmless from all loss, costs, damages, expenses, and reasonable attorneys fees suffered or incurred by the Escrow Agent as a result thereof.  Escrow Agent shall be liable for its attorneys fees relating to any conflict with the Sponsor over the performance of Escrow Agent pursuant to this Agreement.  The obligations of the Sponsor under this Paragraph shall be performable at the office of the Escrow Agent in McLennan County, Texas. 

	Reliance of Escrow Agent:  The Escrow Agent will be entitled to rely upon and will be protected in acting in reliance upon any written instructions, directions, notice, request, waiver, consent, certificate, receipt, authorization, power of attorney or other paper or document or information furnished to it by any authorized agent of the Sponsor pursuant to the provisions of this Agreement which the Escrow Agent in good faith believes to be genuine and what it purports to be. The Escrow Agent is hereby authorized to rely upon the representations of the Sponsor as to its authority to execute and deliver this Agreement, notifications, receipts or instructions hereunder and as to relationships among persons, including persons authorized to receive delivery hereunder. Written notice of any succession or assignment of any interest of any party specified herein shall be given to the Escrow Agent, and shall not be effective until received by the Escrow Agent. The Escrow Agent may consult with legal counsel (payable only out of escrowed funds which the Sponsor has become entitled to receive) in the event of any dispute or question as to the construction of any of the provisions this Paragraph 8 or its duties hereunder, and it shall incur no liability and shall be fully protected in acting in accordance with the opinion and instructions of such counsel.

Reliance 

Under no circumstances shall Escrow Agent be liable for any damages, general or consequential, caused, in whole or in part, by the action or inaction of the Sponsor or any of its agents or employees.  Escrow Agent shall not be liable for any damage, loss, liability or delay caused by accidents, strikes, fire, flood, war, riot, acts of God or any other cause which is beyond its control.

	Funds Dedicated:  The funds deposited into the Escrow Account shall be held in escrow until such time as the funds are disbursed in accordance with Paragraph 4 of the Agreement.  The Sponsor is aware and understands that it is not entitled to funds received into escrow and no amounts deposited in the Escrow Account shall become the property of the Sponsor or any other entity, or be subject to the debts of the Sponsor or any other entity until disbursed in accordance with Paragraph 4. 

	Interpleader:  In the event of any disagreement between any of the parties to this agreement, or between them or either or any of them and any other person, resulting in adverse claims or demands being made in connection with the subject matter of the escrow, the Escrow Agent may, at its option, refuse to comply with such claims or demands on it, or refuse to take any other action hereunder, so long as such disagreement continues or such doubt exists, and in any such event, the Escrow Agent shall not be or become liable in any way or to any person for its failure or refusal to act, and the Escrow Agent shall be entitled to continue so to refrain from acting until (i) the rights of all parties shall have been fully and finally adjudicated by a court of competent jurisdiction, or (ii) all differences shall have been adjusted and all doubt resolved by agreement among all of the interested persons, and the Escrow Agent shall have been notified thereof in writing signed by all such persons, and the Escrow Agent shall have been notified thereof in writing signed by all such persons. The rights of the Escrow Agent under this paragraph are cumulative of all other rights which it may have by law or otherwise. 

	Indemnification:  The Escrow Agent, its affiliates, and each of its officers, directors, employees, agents and attorneys (collectively, the "Indemnified Parties") shall be indemnified against and be held harmless by the Sponsor from any losses, costs, damages, expenses, claims and attorney's fees suffered or incurred by the Indemnified Parties as a result of, in connection with or arising from, or out of, but not limited to, the acts or omissions of any Indemnified Party in performance of or pursuant to this Agreement, except such acts or omissions as may result from such Indemnified Party's misconduct, negligence, or fraud. 

	Notices:  All notices, requests, demands or other communications with deliveries required or permitted to be given pursuant to this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, by national overnight delivery service, given by confirmed facsimile, or deposited for mailing by first class mail, postage prepaid, sent either registered or certified mail as follows: 

	If to the investors in the Offering, to the address of each respective investor specified in the list of investors delivered to the Escrow Agent by the Sponsor. 

	If to the Sponsor: Zion Oil & Gas, Inc.

Attn:William H. Avery, VP & Treasurer

Address: 6510 Abrams Road, Suite #300

Dallas, TX 75231

Phone: 214-221-4610

Fax: 214-221-6510

Email: bill@zionoil.com (cc: sandy@zionoil.com)

	If to the Escrow Agent:   Sterling Trust Company

Attention:  Escrow Department

Contact name:  Vicky Smith

Regular mail:  PO Box 21326, Waco, TX  76702-1326

Overnight address:  7901 Fish Pond Road, Waco, TX 76710

Phone:  800-955-3434

Fax:  254-741-9869

Email:  Escrow@matrixbancorp.com

In the event the Escrow Agent is authorized or directed under the terms hereof to deliver the subject matter of the escrow, or any part thereof, to the Sponsor, such delivery shall be made by wire transfer to Sponsor's bank account pursuant to wire instructions that the Sponsor will provide in writing to the Escrow Agent.

	Holidays:  Whenever under the terms of this Agreement, the performance date of any provision hereof shall fall on a holiday of the Escrow Agent, the performance thereof on the next successive business day of the Escrow Agent shall be deemed to be in full compliance with this Agreement. 

	Fees:  The Escrow Agent shall receive fees in accordance with the attached schedule for the administration of the Escrow Account.  These fees shall be paid by the Sponsor.  The Escrow Agent shall also be entitled to reimbursement of reasonable out-of-pocket expenses incurred in connection with the performance of its services as Escrow Agent, including reasonable fees and disbursements of legal counsel.   Such expenses will not exceed $2,500 without the prior written consent of Sponsor.

	Texas Law to Apply:  This Agreement shall be construed in accordance with the laws of the State of Texas, and all obligations of the parties created hereunder are performable in McLennan County, Texas. 

	Parties Bound:  This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective heirs, executors, administrators, legal representatives, successors and assigns. 

	Legal Construction:  In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable, the remaining provisions shall not be affected thereby, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 

	Prior Agreements Superseded:   This Agreement constitutes the sole and only agreement of the parties hereto and supersedes any prior understandings or written or oral agreements between the parties respecting the within subject matter, save and except those agreements entered into contemporaneously herein and as are referred to herein. 

	Headings:  The headings used in this Agreement have been included only in order to make it easier to locate the subject covered by each provision and are not used in construing this Agreement. 

	Counterparts:  This Agreement may be executed in any number of counterparts, and each of such counterparts shall for all purposes be deemed to be an original. 

	Modifications:   This Agreement may not be modified or amended except by a written instrument signed by the parties hereto and referring specifically to this Agreement. 

	Other Instruments:   Each party shall, upon the request of the other party, execute, acknowledge and deliver any and all instruments reasonably necessary or appropriate to carry into effect the intention of the parties as expressed in this Agreement. 

Appointment of Successor Substitute Escrow Agent:   Escrow Agent may resign by giving thirty (30) days written notice to the Sponsor. Sponsor may within its sole discretion terminate the appointment of Escrow Agent and appoint a successor escrow agent ("Successor Escrow Agent") in accordance with the terms of this Paragraph 23.  In order to appoint a successor Escrow Agent, Sponsor shall obtain the written agreement of a Successor Escrow Agent (which shall be a corporation qualified to act as an escrow agent) to assume the obligations of Escrow Agent under the Agreement.  Upon receipt of notice from the Successor Escrow Agent of its acceptance of the appointment by Sponsor as Successor Escrow Agent, Escrow Agent shall deliver to the Successor Escrow Agent all funds held in the Escrow Account to be administered by Successor Escrow Agent in accordance with its written agreement with the Sponsor.  Upon such delivery, Escrow Agent shall be released from any and all liability under this Agreement, except for any liability related to its negligence, misconduct or fraud. 

	U.S.A. Patriot's Act Compliance:    Sponsor agrees to provide identifying documentation as required for Escrow Agent to comply with verification procedures specified in the U.S.A. Patriot's Act. Documents include, but are not limited to: 1) certified articles of incorporation, government-issued business license, partnership or trust agreement, and 2) a corporate resolution with the signature of the person signing this Agreement, and 3) a completed IRS Form W-9.

            

	ARBITRATION AGREEMENT:  THE PARTIES AGREE THAT ALL CLAIMS AND DISPUTES OF EVERY TYPE AND MATTER WHICH MAY ARISE BETWEEN THE SPONSOR AND ESCROW AGENT, INCLUDING ANY DISPUTES REGARDING THE SCOPE OF THIS ARBITRATION AGREEMENT, SHALL BE RESOLVED BY BINDING ARBITRATION ADMINISTERED BY THE NATIONAL ARBITRATION FORUM UNDER THE CODE OF PROCEDURE THEN IN EFFECT.  ANY AWARD OF THE ARBITRATOR MAY BE ENTERED AS A JUDGMENT IN ANY COURT HAVING JURISDICTION.  IN ANY MATTER IN WHICH THE AMOUNT IN DISPUTE EXCEEDS $100,000.00, THE ARBITRATION PROCEEDINGS SHALL TAKE PLACE IN WACO, TEXAS.  IN THE EVENT A COURT HAVING JURISDICTION FINDS ANY PORTION OF THIS AGREEMENT UNENFORCEABLE, THAT PORTION SHALL NOT BE EFFECTIVE AND THE REMAINDER OF THE AGREEMENT SHALL REMAIN EFFECTIVE.  INFORMATION MAY BE OBTAINED AND CLAIMS MAY BE FILED AT ANY OFFICE OF THE NATIONAL ARBITRATION FORUM, //www.arbitration-forum.com/">
WWW.ARBITRATION-FORUM.COM, OR AT P.O. BOX 50191, MINNEAPOLIS, MN 55045.  THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED UNDER THE FEDERAL ARBITRATION ACT, 9 U.S.C. SECTIONS 1-16.

BY SIGNING THIS AGREEMENT, THE PARTIES ARE GIVING UP ANY RIGHT THEY MIGHT HAVE TO SUE EACH OTHER IN COURT AND HAVE THEIR CASE DECIDED BY A JUDGE OR JURY.

 
EXECUTED THIS 15th DAY OF March, 2006. 

 

SPONSOR:  Zion Oil & Gas, Inc.

 

By: /s/ E A Soltero
(Signature)

 

E. A. Soltero, CEO

(Printed Name) (Title) 

 

 

ESCROW AGENT:   Sterling Trust Company, a Texas Corporation 

 
By: /s/ Kelli Click
(Signature)

 

Kelli Click,Vice Pres - Sales & Mktg

(Printed Name)(Title)

	

	
Escrow Fee Schedule

All legal instruments are subject to review by counsel for Sterling Trust Company prior to account acceptance. All legal expenses incurred during this review and in the duration of providing escrow services will be borne by Sponsor and not by Sterling Trust Company, up to a maximum of $2,500. 

Escrow Fees: 

Escrow Acceptance Fee (payable one-time upon execution of Escrow Agreement)......$ 350
Investor Set-up Fee (payable for each investor whose subscription funds are received and deposited by Escrow Agent - billing prepared during first week of each month for new investor setups completed during prior month; payment due by due date shown on monthly invoice).............................................................$ see table below                                 

Includes set-up and maintenance of investor records.  

Subscription Return Fee (payable at time of service in event escrow is unsuccessful)...$ see table below 
Includes interest allocation, disbursement processing, mailing of check, and filing of  IRS Form 1099.

	
# of Investors
	
Investor Set-up Fee
	
Subscription Return Fee

	
0-500
	
$10
	
$15

	
501-1000
	
$ 9
	
$12

	
1001-1500
	
$ 8
	
$ 9

	
1501-2000
	
$ 7
	
$ 7

	
2001-2500
	
$ 6
	
$ 7

	
2501+
	
$ 5
	
$ 7

 

 

Service Fees:  All Service Fees will be billed to the Sponsor.  
Outgoing wire fee ..............................$ 15

Returned check fee ...........................    25

Stop payment fee .............................     25

Overnight delivery - standard .............     16

Overnight delivery - priority ................     18

Certified mail ...................................    at cost

If Sterling Trust's duties are modified beyond a minimal extent, Sterling reserves the right to re-evaluate this fee schedule.  Sterling Trust reserves the right to amend these charges or to charge additional fees for extraordinary or special services, provided, however, that such charges and fees are approved by Sponsor in writing before the services are undertaken. 

Dated 3/11/2006 

Zion Oil & GasCC Filed by Filing Services Canada Inc. 403-717-3898

EURASIA ENERGY LIMITED

2006 STOCK OPTION PLAN

1.

PURPOSE.   The Plan is intended to provide incentive to employees, directors, advisors and consultants of the Corporation to encourage proprietary interest in the Corporation, to encourage such employees to remain in the employ of the Corporation or such directors, advisors and consultants to remain in the service of the Corporation, and to attract new employees, directors, advisors and consultants with outstanding qualifications.

2.

DEFINITIONS.   Unless otherwise defined or the context otherwise requires, the capitalized terms used shall have the following meanings:

(a)

"Administrator" means the Board or the Plan Committee of the Board, whichever administers the Plan from time to time in the discretion of the Board, as described in Section 4 of the Plan.

(b)

"Board" means the Board of Directors of the Corporation.

(c)

"Change of Control" shall mean, a change of control of a nature that would be required to be reported in response to Item 1 of Form 8-K required to be filed pursuant to the Exchange Act;

(d)

"Code" means the Internal Revenue Code of 1986, as amended.

(e)

"Commission" means the Securities and Exchange Commission.

(f)

"Corporation" means Eurasia Energy Limited, a Nevada, USA corporation.

(g)

"Disability" means a medically determinable physical or mental impairment which has made an individual incapable of engaging in substantial gainful activity.  A condition shall be considered a Disability only if (i) it can be expected to result in death or has lasted or it can be expected to last for a continuous period of not less than twelve (12) months, and (ii) the Administrator, based upon medical evidence, has expressly determined that Disability exists.

(h)

"Employee" means an individual who is employed (within the meaning of Section 3401 of the Code and the regulations thereunder) by the Corporation.

(i)

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

(j)

"Exercise Price" means the price per Share determined by the Administrator, at which an Option may be exercised.

(k)

"Fair Market Value" means the average closing price of the Shares for the preceding 30 days or a combination of closing prices and average of daily bid and ask prices for the preceding 30 days or the Fair Market Value shall be determined by the Administrator in good faith.  Such determination shall be conclusive and binding on all persons. 

(l)

"Grant Date" means the date on which the granting of an Option is authorized by the Administrator or such other date as prescribed by the Administrator.

(m)

"Incentive Stock Option" means an option described in Section 422 of the Code.

(n)

"Option" means any stock option granted pursuant to the Plan.

(o)

"Option Agreement" means a written stock option agreement evidencing the grant of an Option.

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(p)

"Option Limit" has the meaning assigned to it in Section 6.

(q)

"Optionee" means a Participant who has received an Option.

(r)

"Participant" has the meaning assigned to it in Section 5(a) hereof.

(s)

"Plan" means this Eurasia Energy Limited 2006 Stock Option Plan, as it may be amended from time to time.

(t)

"Plan Committee" shall mean a committee of two or more directors appointed by the Board to administer the Plan.

(u)

"Purchase Price" means the Exercise Price multiplied by the number of Shares with respect to which an Option is exercised.

(v)

"Retirement" means the voluntary termination of employment by an employee after qualifying for early or normal retirement under any pension plan or profit sharing or benefit plan of the Corporation or its Subsidiaries.  If an employee is not covered by any such plan, "Retirement" shall mean voluntary termination of employment after the employee has attained age sixty-five (65) and after the employee has attained the tenth (10th) anniversary of his or her last preceding date of hire, or as otherwise determined in the Administrator's sole discretion.

(w)

"Securities Act" means the Securities Act of 1933, as amended.

(x)

"Subsidiary" means any subsidiary corporation as defined in Section 425(f) of the Code.

(y)

"Share" means one share of Common Stock of the Corporation, adjusted in accordance with Section 10 of the Plan (if applicable).

(z)

"Shareholders" means holders of Shares.

(aa)

"Transfer Agent" means a third-party organization retained by the Corporation to maintain the stock transfer records of the Corporation.

3.

EFFECTIVE DATE.   The Plan was adopted by the Board effective March 13, 2006.

4.

ADMINISTRATION.

(a)

Administrator.  Subject to subsection (c) below, the Plan shall be administered, in the discretion of the Board from time to time, by the Board or by a Plan Committee which shall be appointed by the Board.  The Board may from time to time remove members from, or add members to, the Plan Committee.  Vacancies on the Plan Committee, however caused, shall be filled by the Board.  The Board shall appoint one of the members of the Plan Committee as Chairman.  The Administrator shall hold meetings at such times and places as it may determine.  Acts of a majority of the members of the Administrator at which a quorum is present, or acts reduced to or approved in writing by the unanimous consent of the members of the Administrator, shall be the valid acts of the Administrator.

(b)

Powers of Administrator.  The Administrator shall from time to time at its discretion select the Optionees who are to be granted Options, determine the number of Shares to be subject to Options to be granted to each Optionee.  The Administrator shall have full power and authority to operate, manage and administer the Plan and interpret and construe the Plan and the terms of all Option Agreements.  The interpretation and construction by the Administrator of any provision of the Plan or of any Option 

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or Option Agreement shall be final.  No member of the Administrator shall be liable for any action or determination made in good faith with respect to the Plan or any Option.

5.

PARTICIPATION.

(a)

Eligibility.  The Optionee shall be such persons (collectively, "Participants"; individually a "Participant") as the Administrator may select from among the following classes of persons:

(i)

Employees (who may be officers, whether or not they are directors) of the Corporation or of a Subsidiary and non-employees to whom an offer of employment has been extended; and 

(ii)

directors, advisors and consultants of the Corporation or a Subsidiary.

Notwithstanding provisions of the first paragraph of this Section 5(a), the Administrator may at any time or from time to time designate one or more directors as being ineligible for selection as Participants in the Plan for any period or periods of time.  The Administrator may, in its sole discretion and upon such terms as it deems appropriate, require as a condition of the grant of an Option to a Participant that the Participant surrender for cancellation some or all of the Options which have been previously granted to such person under this Plan or otherwise.  An Option, the grant of which is conditioned upon such surrender, may have an option price lower (or higher) than the exercise price of such surrendered Option, may cover the same (or a lesser or greater) number of shares as such surrendered Option, may contain such other terms as the Administrator deems appropriate, and shall be exercisable in accordance with its terms, without regard to the number of shares, price, exercise period or any other term or condition of such surrendered Option.

6.

STOCK.  The stock subject to Options granted under the Plan shall be from the Corporation's authorized but unissued or reacquired Shares.  The aggregate number of Shares which may be issued upon exercise of Options under the Plan at any time shall not exceed TWO MILLION (2,000,000) Shares (the "Option Limit"), subject to adjustment as provided for in this Plan.

7.

TERMS AND CONDITIONS OF OPTIONS.

(a)

Stock Option Agreements.  Each Option shall be evidenced by an Option Agreement in such other form as the Administrator shall from time to time determine.  Such Option Agreements need not be identical but shall comply with and be subject to the terms and conditions set forth in this Section 7.

(b)

Optionee's Undertaking.  Each Optionee shall agree to remain in the employ or service of the Corporation and to render services for a period as shall be determined by the Administrator, from the Grant Date of the Option or such other date agreed to by the Optionee and the Corporation, but such agreement shall not impose upon the Corporation any obligation to retain the Optionee in their employ or service for any period.

(c)

Number of Shares.  Each Option shall state the number of Shares to which it pertains and shall provide for the adjustment thereof in accordance with the provisions of Section 10 hereof.

(d)

Exercise Price; Exercise of Options.  Each Option shall state the Exercise Price.  The Exercise Price in the case of any Incentive Stock Option granted shall not be less than the Fair Market Value on the Grant Date.  At the sole discretion of the Administrator, any Option granted under this Plan to any Participant may be exercisable in whole or in part immediately upon the grant thereof, or only after the occurrence of a specified event and/or only in installments, which installments may be equal or otherwise, and which installments may vary as to the number thereof as well as to whether any unexercised installments are cumulative through the life of a particular Option; provided that, in any event, to the 

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extent required by law or regulation such Option shall be exercisable at a minimum rate of at least twenty percent (20%) per year over the period five years from the Grant Date for the Option in question; however, in the case of an Option granted to a Participant who is a director, consultant, advisor or officer of the Corporation, the Administrator may provide that the Option may become fully exercisable, subject to reasonable conditions such as continued employment or service to the Corporation, at any time or during any period established by the Administrator.

(e)

Medium and Time of Payment; Notice.  The Purchase Price shall be payable in full in United States dollars upon the exercise of the Option.

In the event the Corporation determines that it is required to withhold state, United States Federal or foreign income tax as a result of the exercise of an Option, as a condition to the exercise thereof, an Optionee must make arrangements satisfactory to the Corporation to enable it to satisfy such withholding requirements before the Optionee shall be permitted to exercise the Option.

The Optionee shall exercise an Option by completing and delivering to the Corporation, concurrently with the payment of the Purchase Price in the manner described above, an exercise notice in such form as the Administrator shall from time to time determine.

(f)

Term and Non-Transferability of Options.  Each Option shall state the time or times when all or part thereof becomes exercisable.  No Option shall be exercisable after the expiration of five (5) years (or less, in the discretion of the Administrator) from the Grant Date.  During the lifetime of the Optionee, the Option shall be exercisable only by the Optionee or the Optionee's guardian or legal representative and shall not be assignable or transferable.  The Option shall not be transferable by the Optionee other than by will or the laws of descent and distribution.  Any other attempted alienation, assignment, pledge, hypothecation, attachment, execution or similar process, whether voluntary or involuntary, with respect to all or any part of any Option or right thereunder, shall be null and void and, at the Corporation's option, shall cause all of the Optionee's rights under the Option to terminate.

(g)

Cessation of Employment (Except by Death, Disability or Retirement).  If an Optionee's employment or service with the Corporation ceases for any reason or no reason, whether voluntarily or involuntarily, with or without cause, other than pursuant to death, Disability or Retirement, such Optionee shall have the right, subject to the restrictions referred to in Section 7(f) above, to exercise the Option at any time within ninety (90) days after such cessation, but, except as otherwise provided in the applicable Option Agreement, only to the extent that, at the date of such cessation, the Optionee's right to exercise such Option had accrued pursuant to the terms of the applicable Option Agreement and had not previously been exercised.

For purposes of this Section 7(g), the employment relationship shall be treated as continuing intact while the Optionee is on military leave, sick leave or other bona fide leave of absence (to be determined in the sole discretion of the Administrator).  The foregoing notwithstanding, in the case of an Incentive Stock Option, employment shall not be deemed to continue beyond the ninetieth (90th) day after the Optionee ceased active employment, unless the Optionee's reemployment rights are guaranteed by statute or by contract.

(h)

Death of Optionee.  If an Optionee's employment or service with the Corporation ceases by reason of the Optionee's death, or after ceasing to be a Participant but during the period in which he or she could have exercised the Option under this Section 7, and has not fully exercised the Option, then the Option may be exercised in full, subject to the restrictions referred to in Section 7(f) above, at any time within twelve (12) months after the Optionee's death by the executor or administrator of his or her estate or by any person or persons who have acquired the Option directly from the Optionee by bequest or inheritance, but, except as otherwise provided in the applicable Option Agreement, only to the extent 

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that, at the date of death, the Optionee's right to exercise such Option had accrued and had not been forfeited pursuant to the terms of the applicable Option Agreement and had not previously been exercised.

(i)

Disability of Optionee.  If an Optionee's employment or service with the Corporation ceases by reason of the Optionee's Disability, such Optionee shall have the right, subject to the restrictions referred to in Section 7(f) above, to exercise the Option at any time within twelve (12) months after such cessation by reason of Disability, but, except as provided in the applicable Option Agreement, only to the extent that, at the date of such cessation, the Optionee's right to exercise such Option had accrued pursuant to the terms of the applicable Option Agreement and had not previously been exercised.

(j)

Retirement of Optionee.  If an Optionee's employment or service with the Corporation ceases by reason of the Optionee's Retirement, such Optionee shall have the right, subject to the restrictions referred to in Section 7(f) above, to exercise the Option at any time within ninety (90) days after the date of Retirement, but only to the extent that, at the date of such cessation, the Optionee's right to exercise such Option had accrued pursuant to the terms of the applicable Option Agreement and had not previously been exercised.

(k)

Time of Cessation of Service.  For purposes of this Plan, the Optionee's employment or service shall be deemed to have ceased or be terminated on the date when the Optionee's employment or service in fact ceased or Optionee is in fact terminated.

(l)

Rights as a Shareholder.  No one shall have rights as a Shareholder with respect to any Shares covered by an Option until the date of the issuance of a stock certificate for such Shares.  No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property), distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as expressly provided in Section 10 hereof.

(m)

Modification, Extension and Renewal of Options.  Within the limitations of the Plan, the Administrator may modify an Option, extend or renew outstanding Options or accept the cancellation of outstanding Options (to the extent not previously exercised) for the granting of new Options in substitution therefor.  The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, alter or impair any rights or obligations under any Option previously granted.  With the consent of the affected Optionee, the Administrator may cancel any agreement evidencing Options.  In the event of such cancellation, the Administrator may authorize the granting of new Options, which may or may not cover the same number of Shares that have been the subject of the prior award, at such Exercise Price and subject to such terms, conditions and discretions as would have been applicable under this Plan had the canceled Options not been granted.

(n)

Substitution of Options.  Notwithstanding any inconsistent provisions or limits under the Plan, in the event the Corporation acquires (whether by purchase, merger or otherwise) all or substantially all of outstanding capital stock or assets of another corporation or of any reorganization or other transaction qualifying under Section 424 of the Code, the Administrator may, in accordance with the provisions of that Section, substitute Options under the Plan for options under the plan of the acquired corporation.

(o)

Forfeiture of Option Gain and Unexercised Options Held By Directors, Officers or Consultants who Engage in Certain Activities.  At the discretion of the Administrator, and unless otherwise prohibited by applicable laws, an Option Agreement provided to a director, officer or consultant of the Corporation may provide that if at any time within (i) the term of an Option granted to a Optionee or (ii) within one year after the termination of such Optionee's employment or service with the Corporation for any reason or no reason or (iii) within one year after such Optionee exercises any portion of an Option, whichever is the latest, such Optionee engages in any activity in direct competition with the principal business of 

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the Corporation, or inimical, contrary or harmful to the interests of the Corporation, including, but not limited to: (A) conduct related to Optionee's employment for which either criminal or civil penalties against Optionee may be sought, (B) violation of Corporation policies, including, without limitation, the Corporation's insider trading policy, (C) accepting employment with or serving as a consultant, advisor or in any other capacity to an employer that is in direct competition with or acting against the interests of the Corporation, including employing or recruiting any present, former or future employee of the Corporation, (D) disclosing or misusing any confidential information or material concerning the Corporation, or (E) participating in a hostile takeover attempt against the Corporation, then, at the discretion of the Administrator, (1) any Options granted under the Plan to such Optionee shall terminate effective the date on which such Optionee entered into such activity, unless terminated sooner by operation of another term or condition of the Plan, and (2) any gain realized by such Optionee from exercising all or a portion of any Option shall be paid by Optionee to the Corporation.

(p)

Right of Set-Off.  Optionee shall consent to a deduction from any amounts the Corporation owes Optionee from time to time (including amounts owed as wages or other compensation, fringe benefits or vacation pay, as well as any other amounts owed to Optionee by the Corporation), to the extent of the amounts Optionee owes the Corporation, including pursuant to subparagraph (o) above.  Whether or not the Corporation elects to make any set-off in whole or in part, if the Corporation does not recover by means of set-off the full amount Optionee owes to the Corporation, Optionee shall agree to pay immediately the unpaid balance to the Corporation.

(q)

Other Provisions.  An Option Agreement authorized under the Plan may contain such terms and provisions not inconsistent with the terms of the Plan (including, without limitation, restrictions upon the exercise of the Option) as the Administrator shall deem advisable in its sole and absolute discretion.

8.

LIMITATION ON ANNUAL AWARDS.

As long as the Plan is in effect, at no time will Options granted to any one Participant pursuant to the Plan exceed 1,000,000 Shares, subject to adjustment as provided for in Section 10.

9.

TERM OF PLAN.   

Options may be granted pursuant to the Plan until the expiration of the Plan five (5) years after the effective date referred to in Section 3.

10.

EFFECT OF CERTAIN EVENTS.

(a)

Adjustments Upon Changes in Stock.  The Administrator shall make or provide for such adjustments in the Option Limit, the Exercise Price and in the number or kind of shares or other securities (including shares or other securities of another issuer) covered by this Plan and outstanding Options as the Administrator in its sole discretion, exercised in good faith, shall determine is equitably required to prevent dilution or enlargement of rights of optionees that would otherwise result from (a) any stock dividend, stock split, combination of shares, issuance of rights or warrants to purchase stock, spin-off, recapitalization or other changes in the capital structure of the Corporation, (b) any merger, consolidation, reorganization or partial or complete liquidations, or (c) any other corporate transaction or event having an effect similar to any of the foregoing.  The Administrator also shall make or provide for such adjustment in the number or kind of shares of the Corporation's capital stock or other securities (or in shares or other securities of another issuer) which may be acquired pursuant to Options granted under the Plan and the number of such securities to be awarded to each Optionee as the Administrator in its sole discretion, shall determine is appropriate to reflect any transaction or event described in the preceding sentence.  In the event of any such transaction or event, the Administrator may provide in substitution for any or all outstanding Options under the Plan such alternative consideration (including 

- 7 -

securities of any surviving entity) as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the surrender of all Options so replaced.  In any case, such substitution of securities shall not require the consent of any person who is granted Options pursuant to the Plan.  The determination of the Administrator as to what adjustments shall be made, and the extent thereof, shall be final, binding and conclusive.

(b)

Change of Control.  In addition to the rights set forth in Section 10(a) above, in the event of a Change of Control, the Administrator may in its sole discretion, without obtaining Shareholder approval or the consent of any person granted Options under the Plan, take one or more of the following actions:

(i)

Accelerate the exercise dates of any outstanding Option, or make the Option fully vested and exercisable;

(ii)

Pay cash to any or all owners of Options in exchange for the cancellation of their outstanding Options; or

(iii)

Make any other adjustments or amendments to the Plan and outstanding Options and substitute new Options for outstanding Options.

(c)

Adjustment Determination.  To the extent that the foregoing adjustments relate to securities of the Corporation, such adjustments shall be made by the Administrator, whose determination shall be conclusive and binding on all persons.

(d)

Limitation on Rights.  Except as expressly provided in this Section 10, the Optionee shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class or by reason of any dissolution, liquidation, merger or consolidation or spinoff of assets or stock of another corporation, and any issue by the Corporation of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option.  The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Corporation to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets.

11.

SECURITIES LAW REQUIREMENTS.

(a)

Legality of Issuance.  No Shares shall be issued upon the exercise of any Option unless and until the Corporation has determined that:

(i)

it and the Optionee have taken all actions required to register the offer and sale of the Shares under the Securities Act, or to perfect an exemption from the registration requirements thereof;

(ii)

any applicable listing requirement of any stock exchange on which the Shares are listed has been satisfied; and

(iii)

any other applicable provision of state, United States Federal or foreign law has been satisfied.

(b)

Restrictions on Transfer; Representations of Optionee; Legends.  Regardless of whether the offering and sale of Shares under the Plan has been registered under the Securities Act or has been registered or qualified under the securities laws of any state, the Corporation may impose restrictions upon the grant of Options and the sale, pledge or other transfer of Shares (including the placement of appropriate legends on stock certificates) if, in the judgment of the Corporation and its counsel, such restrictions are 

- 8 -

necessary or desirable in order to achieve compliance with the provisions of the Securities Act, the securities laws of any state or any other law.  In the event that the sale of Shares under the Plan is not registered under the Securities Act but an exemption is available which requires an investment representation or other representation, each Optionee shall be required to represent that such Shares are being acquired for investment, and not with a view to the sale or distribution thereof, and to make such other representations as are deemed necessary or appropriate by the Corporation and its counsel.  Stock certificates evidencing Shares acquired under the Plan pursuant to an unregistered transaction shall bear the following restrictive legend and such other restrictive legends as are required or deemed advisable under the provisions of any applicable law:

"THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").  ANY TRANSFER OR PLEDGE OF SUCH SECURITIES WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE ISSUER SUCH REGISTRATION IS UNNECESSARY IN ORDER FOR SUCH TRANSFER OR PLEDGE TO COMPLY WITH THE ACT."

Any determination by the Corporation and its counsel in connection with any of the matters set forth in this Section 11 shall be conclusive and binding on all persons.

(c)

Registration or Qualification of Securities.  The Corporation may, but shall not be obligated to, register or qualify the sale of Shares under the Securities Act or any other applicable law.  The Corporation shall not be obligated to take any affirmative action in order to cause the sale of Shares under the Plan to comply with any law.

(d)

Exchange of Certificates.  If, in the opinion of the Corporation and its counsel, any legend placed on a stock certificate representing Shares sold under the Plan is no longer required, the holder of such certificate shall be entitled to exchange such certificate for a certificate representing the same number of Shares but without such legend.

12.

AMENDMENT OF THE PLAN.   The Board may from time to time, with respect to any Shares at the time not subject to Options, suspend or discontinue the Plan or revise or amend it in any respect whatsoever.

The Administrator may amend this Plan to eliminate provisions which are no longer necessary as a result of changes in tax or securities laws or regulations, or in the interpretation thereof.

13.

FINANCIAL STATEMENTS.  Each Optionee shall receive financial statements of the Corporation not less than annually.

14.

APPLICATION OF FUNDS.  The proceeds received by the Corporation from the sale of Shares pursuant to the exercise of an Option will be used for general corporate purposes.

15.

GOVERNING LAW.  This Plan, and the Option Agreements, shall be governed by and enforced and construed in accordance with the laws of the State of Nevada, U.S.A..

To record the adoption of the Plan by the Board as of March 13, 2006, the Board has caused its authorized officers to sign the Plan and affix the corporate seal hereto.

EURASIA ENERGY LIMITED

Per:

                                                                                                      

Authorized Signatory

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