EXHIBIT 4.2
PENDARIES PETROLEUM LTD.
1997 COMPENSATION PLAN
PENDARIES PETROLEUM LTD. (the "CORPORATION") hereby adopts the
following compensation plan of the Corporation (the "PLAN"):
1. DEFINITIONS. In the Plan, the following words and expressions shall have the
respective meanings ascribed to them below:
"BOARD" means the board of directors of the Corporation.
"CONSULTANT" means any person retained in a consulting or similar
capacity by the Corporation, Sino-American or any of their
subsidiaries.
"COMPENSATION" means any amount owed by the Corporation, Sino-American
or any of their Subsidiaries to an Eligible Person in consideration of
wages, bonuses, benefits or other similar incentive owed by the
Corporation, Sino-American or any of their Subsidiaries to such
Eligible Person.
"ELIGIBLE PERSON" means any director, officer, employee or Consultant
of the Corporation, Sino-American or any of their Subsidiaries.
"MARKET PRICE" of a Share on a particular day means the closing price
of a Share on such day on the principal trading system or stock
exchange on which the Shares traded on such day, provided it is now
lower than the closing price of a Share on The Toronto Stock Exchange
on such day (or on a day on which there was no trade in the Shares, the
average bid and asked prices for the Shares on such stock exchange on
such day, provided it is not lower than the average bid and asked
prices for the Shares on The Toronto Stock Exchange on the last five
previous days) provided that the Market Price shall be so determined in
Canadian dollars and shall be rounded to the nearest whole cent.
"GRANTEE" means the Eligible Person to whom a Share was granted under
this Plan.
"OUTSTANDING ISSUE" means, from time to time, the aggregate number of
Shares issued and outstanding on a non-diluted basis.
"SHARE" means a common share in the capital of the Corporation and any
Shares of the Corporation into which such common share is changed,
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classified, reclassified, subdivided, consolidated or converted whether
by reason of an amalgamation or other form of reorganization.
"SINO-AMERICAN" means Sino-American Energy Corporation.
"SUBSIDIARY" shall have the meaning ascribed thereto in the Securities
Act (Ontario).
2. PURPOSE. The purpose of this Plan is to provide the Corporation with the
opportunity to compensate Eligible Persons, from time to time, by Shares in lieu
of cash. Shares can be issued under the Plan to satisfy any Compensation
payments to directors, officers, employees and Consultants of the Corporation,
Sino-American, or any of their Subsidiaries.
3. NUMBER OF SHARES. (1) The total number of Shares reserved for issuance by the
Board under this Plan shall not exceed two hundred thousand (200,000) Shares and
the total number of Shares so reserved for issuance to any one Grantee (whether
under this Plan or otherwise at any time) shall not exceed five percent (5%) of
the then Outstanding Issue. The Shares so reserved by the Board for issuance
under this Plan shall be authorized but unissued Shares.
Nothing contained herein shall restrict or limit or be deemed to
restrict or limit the rights or powers of the Board in connection with any
allotment and issuance of any Shares which are not allotted and issued
hereunder.
4. ELIGIBILITY AND PARTICIPATION. Shares shall not be granted under this Plan to
any person other than an Eligible Person. No Eligible Person shall have any
claim or right to be granted Shares under the Plan.
5. GRANTS OF SHARES. The Board shall, from time to time and in its sole
discretion, determine the Eligible Persons to whom Shares are to be granted
under this Plan in lieu of payment in cash of Compensation owed and may take
into consideration the prior contributions of a particular Eligible Person to
the success of the Corporation and such other factors which the Board deems
proper and relevant.
Shares under this Plan shall be issued in payment of Compensation
amounts owed to Eligible Persons and the number of Shares to be issued in
consideration for such Compensation amount shall be calculated using the Market
Price for the Shares on the preceding business day. No fractional Shares shall
be issued under this Plan and any remaining Compensation amount owed to the
Grantee shall be satisfied in cash.
Shares under this Plan shall be issued to Eligible Persons by the Board
in its sole discretion and shall be subject to such approvals as may be required
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by applicable law or any trading system or stock exchange upon which any
securities of the Corporation are authorized or listed.
The grant of every Share hereunder in lieu of payment in cash shall be
evidenced by written agreement between the Corporation and the Grantee, the
provisions of which shall conform to the provisions of this Plan and shall be
otherwise satisfactory to the Board in its sole discretion.
A grant of Share under the Plan shall not be construed as giving a
Grantee any right to continue in the employment of, or as a director, officer or
Consultant of, the Corporation, Sino-American or any of their Subsidiaries nor
shall it affect the right of the Corporation, Sino-American or any of their
Subsidiaries to terminate the employment of any Grantee or his acting as an
officer or Consultant of such entity.
6. TAXES. The Corporation may require a Grantee, as a condition of the issuance
of a Share in lieu of cash payment of the Compensation owed to the Grantee, to
pay to or reimburse the Corporation for any taxes which are required to be
withheld and remitted by it in respect of the issuance of such Share under any
applicable laws.
7. NECESSARY APPROVALS. The obligations of the Corporation to deliver Shares
following a grant of Shares hereunder and any amendments to this Plan or
agreements made under the Plan shall be subject to any approvals required by
applicable law or any stock exchange on which the Shares are listed for trading
being obtained.
8. ADMINISTRATION OF THE PLAN. The Board may interpret the Plan and make all
other determinations that it considers in its sole discretion to be necessary or
advisable for the administration of the Plan. The Board may, in its sole
discretion, prescribe, adopt, amend and rescind rules and regulations for
carrying out and administering the Plan. The interpretation and construction of
any provision of the Plan by the Board shall be final and conclusive. The
administration of the Plan shall be the responsibility of the appropriate
officers of the Corporation duly designated for the purposes thereof by the
Board and all costs in respect thereof shall be paid by the Corporation.
9. AMENDMENTS, ETC. TO THE PLAN. Subject to obtaining the consent of applicable
securities regulatory authorities in those circumstances where such consent is
required, and shareholder approval in those circumstances where such approval is
required to be obtained by any such regulatory authority, the Board may amend,
modify or terminate the Plan at any time if and when it considers it to be
advisable to do so in its sole discretion, except with respect to any Grant
already made under the Plan for which the Shares are not already issued and
outstanding.
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10. NO UNDERTAKING OR REPRESENTATION. The Corporation makes no undertaking or
representation as to the future value or price, or as to the listing on any
stock exchange, of any Shares in accordance with the Plan.
11. GOVERNING LAW AND INTERPRETATION. The Plan shall be governed by, and be
construed in accordance with, the laws of the Province of Ontario and the
federal laws of Canada applicable therein.
12. COMPLIANCE WITH APPLICABLE LAW, ETC. If any provision of the Plan or any
Grant contravenes any law or any order, policy, by-law or regulation of any
regulatory body or stock exchange having jurisdiction or authority over the
securities of the Corporation or the Plan, then such provision shall be deemed
to be amended to the extent required to bring such provision into compliance
therewith.
13. ASSIGNABILITY AND TRANSFERABILITY. Grants (and any rights thereunder) shall
not be assignable or transferable otherwise than by will or pursuant to the laws
of succession or descent and distribution, and, during the lifetime of a
Grantee, the Shares shall be issued only to the Grantee.
14. ENUREMENT. The Plan shall enure to the benefit of, and be binding upon, the
Corporation, its affiliates and their respective successors and assigns. The
Plan shall enure to the benefit of, and be binding upon, a Grantee and the
personal representative of a deceased grantee.
