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POLYMET MINING CORP.













POLYMET MINING CORP. 2007OMNIBUS SHARE COMPENSATIONPLAN


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POLYMET MINING CORP.(the
"Company")

POLYMET MINING CORP. 2007 OMNIBUS SHARE COMPENSATION PLAN

1.0PURPOSE OF THE PLAN

**1.1                   
Purpose of this Plan.**The purpose of this Plan is to promote the
interests and long-term success of the Company by:

| | (a) | furnishing certain directors, officers, employees or
      consultants of the Company or its Affiliates, or other Persons as the
      Compensation Committee may determine, with greater incentive to further
      develop and promote the business and financial success of the
    Company;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                
| | (b) | furthering the identity of interests of Persons to whom
      Awards may be granted with those of the shareholders of the Company
      generally through a proprietary ownership interest in the Company;
    and                                                                             
| |     |                                                                                                                                                                                                                                                                                                
| | (c) | assisting the Company in attracting, retaining and
      motivating its directors, officers, employees and
  consultants.                                                                                                                                                                      

The Company believes that these purposes may best be effected
by granting Awards and affording such Persons an opportunity to acquire a
proprietary interest in the Company.

2.0DEFINITIONS AND INTERPRETATION

**2.1                   
Definitions.**In this Plan, unless there is something in the subject
matter or context inconsistent therewith, capitalized words and terms will have
the following meanings:

| | (a) | "**Affiliate**" means any Person that
      directly or indirectly through one or more intermediaries controls, or is
      controlled by, or is under common control with another Person;                                                                                                                                                  
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                             
| | (b) | "**Asset Sale**" means the sale or other
      disposition of all or substantially all of the assets and undertaking of
      the Company (whether by purchase, exchange, amalgamation, arrangement or
      other form of consolidation or merger) to or with any Person or Related
      Group of Persons (collectively, "**Acquirors**");
| |     |                                                                                                                                                                                                                                                                                                                                             
| | (c) | "**Associate**" means an associate as
      defined in the Securities Act;                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                             
| | (d) | "**Award**" means any Option, Stock
      Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance
      Award or Other Stock-Based Award granted under the Plan;                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                             
| | (e) | "**Award Agreement**" means (i) in respect
      of an Option, an Option Agreement; and (ii) in respect of any other Award,
      the written agreement, contract or other                                                                                                                                                                  

2

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| |     | instrument or document evidencing any Award granted under
      the Plan. Each Award Agreement shall be subject to the applicable terms
      and conditions of the Plan and any other terms and conditions (not
      inconsistent with the Plan) determined by the Compensation
    Committee;                                                                                                                        
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (f) | "**Blackout Period**" means an interval of
      time during which the Company has determined that one or more Participants
      may not trade any securities of the Company because they may be in
      possession of undisclosed material information pertaining to the Company,
      or otherwise prohibited by law from trading any securities of the
      Company;                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (g) | "**Board of Directors**" means the board of
      directors of the Company as constituted from time to time;                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (h) | "**Business Day**" means a day other than a
      Saturday, Sunday or other day on which commercial banks in Vancouver,
      British Columbia are authorized or required by law to close;                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (i) | "**Cause**" in respect of any Participant
      means:                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (j) | "**Common Shares**" means the common shares
      in the capital of the Company as constituted on the Effective Date,
      provided that if the rights of any Participant are subsequently adjusted
      pursuant to Article 22 hereof, "Common Shares" thereafter means the shares
      or other securities or property which such Participant is entitled to
      purchase after giving effect to such adjustment;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (k) | "**Company**" means PolyMet Mining Corp. and
      includes any successor company thereto;                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (l) | "**Compensation Committee**" has the meaning
      ascribed thereto by Section 4.1;                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (m) | "**Consultant**" means any individual,
      company or other Person, other than a director, officer or employee,
      engaged, to provide ongoing valuable services to the Company or any of its
      Affiliates on a full time or part time basis, or otherwise;                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (n) | "**Control Change**" means either:                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                         

3

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| |     | shares of the Company at the time held directly or
      indirectly by such Acquiror, totals for the first time more than 50% of
      the outstanding common shares of the Company; or                                                                                                                   
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                           
| | (B) | the individuals who, as of April 1, 2007 are members of
      the board or directors (the "**Board**") of the Company cease
      for any reason to constitute at least a majority of the Board unless the
      appointment or election of such individuals was approved by Incumbent
      Directors; or

| | (ii) | an Asset Sale;
| | ---- | --------------

| |     | provided however, that a Control Change shall not be
      deemed to have occurred if such Control Change results solely from the
      issuance, in connection with a bona fide financing or series of financings
      by the Company or any of its Affiliates, of voting securities of the
      Company or any of its Affiliates or any convertible securities;                                                                                                                                                                                                                                       
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (o) | "**Date of Termination**" of any Participant
      means the date of termination of the Participant's employment, whether by
      death of the Participant, by the Participant or by the Company or in the
      case of a Participant who is a Consultant, the date the Participant's
      contract as a Consultant is terminated before its normal termination
      date;                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (p) | "**Effective Date**" has the meaning
      ascribed thereto by Section 3.1 of this Plan;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (q) | "**Eligible Person**" means a director,
      officer, employee or Consultant of the Company or any of its Affiliates or
      a Person otherwise determined by the Compensation Committee to be an
      Eligible Person;                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (r) | "**Exercise Price**" means the price per
      Common Share at which a Participant may purchase Common Shares pursuant to
      an Option, provided that if such price is adjusted pursuant to Section
      22.1, "Exercise Price" thereafter means the price per Common Share at
      which such Participant may purchase Common Shares pursuant to such Option
      after giving effect to such adjustment;                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (s) | "**Expiry Date**" has the meaning ascribed
      thereto by Section 8.2;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (t) | "**Full Value Award**" means any Award
      settled in Common Shares, other than (i) an Option or (ii) a Stock
      Appreciation Right;                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (u) | "**Going Private Transaction**" means an
      amalgamation, arrangement, consolidation or other transaction is proposed
      to be carried out as a consequence of which the interest of some or all of
      the holders of Common Shares may be terminated, whether pursuant to a
      statutory right of acquisition or otherwise, without the consent of such
      holders and without the substitution therefor of an interest of equivalent
      value in a security of the Company, a successor to the Company or an
      Affiliate of the Company that carries the right to participate
  in

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| |     | earnings to an unlimited degree or that by its terms is
      convertible into or exchangeable for or carries the right to purchase such
      a security,                                                                                                                                                                                                                                              
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                         
| | (v) | "**Incumbent Director**" shall mean any
      member of the Board of Directors, as of April 1, 2007 and any member of
      the Board of Directors elected after such date, provided that the election
      or nomination for election of such new member of the Board of Directors
      was approved by a vote of at least two-thirds of the persons then
      constituting the Incumbent Directors;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                         
| | (w) | "**Insider**"
means:                                                                                                                                                                                                                                                                                                                                                                                    

| | (i)  | an insider as defined in the Securities Act;
and                
| | ---- | ----------------------------------------------------------------
| |      |                                                                 
| | (ii) | an Associate or Affiliate of any Person who is an
      Insider;

| | (x) | "**Legal Representative**" has the meaning
      ascribed thereto by Section 8.6;                                     
| | --- | ----------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                       
| | (y) | "**Market Price**" of Common Shares at any
      relevant date means, at the election of the Compensation
  Committee:

| | (i)   | the volume weighted average Canadian dollar trading price
      of the Common Shares on the Toronto Stock Exchange for the five trading
      days prior to that relevant date, calculated by dividing the total value
      by the total volume of Common Shares traded; or                                                                     
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                  
| | (ii)  | the volume weighted average United States dollar trading
      price of the Common Shares on the American Stock Exchange for the five
      trading days prior to that relevant date, calculated by dividing the total
      value by the total volume of Common Shares traded; or                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                  
| | (iii) | the volume weighted closing price per Common Share on any
      other exchange or trading facilities through which the Company's Common
      Shares trade or are quoted from time to time for the five trading days
      prior to that relevant date, calculated by dividing the total value by the
      total volume of Common Shares traded;

| | (z)  | "**Options**" means stock options granted
      hereunder to purchase authorized but unissued Common Shares from the
      Company pursuant to the terms and conditions hereof and as evidenced by an
      Option Agreement and "Option" means any one of them;
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                 
| | (aa) | "**Option Agreement**" means an agreement in
      the form of Schedule A evidencing an Option, entered into by and between
      the Company and an Eligible Person;                                                                                           
| |      |                                                                                                                                                                                                                                                                 
| | (bb) | "**Other Stock-Based Award**" means any
      right granted under Article 13;                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                 
| | (cc) | "**Outstanding Common Shares**" at the time
      of any issuance of Common Shares or grant of Options means the number of
      Common Shares that are outstanding immediately prior to the share issuance
      or grant of Options in question, on a non-    

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| |      | diluted basis, or such other number as may be determined
      under the applicable rules and regulations of all regulatory authorities
      to which the Company is subject, including the Stock Exchanges;                                                                                                                         
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                       
| | (dd) | "**Participant**" means an Eligible Person
      to whom an Award has been granted under the Plan;                                                                                                                                                                                                                                    
| |      |                                                                                                                                                                                                                                                                                                                                       
| | (ee) | "**Performance Award**" means any right
      granted under Article 12;                                                                                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                       
| | (ff) | "**Permitted Assign**" means:                                                                                                                                                                                                                                                                                                         
| |      |                                                                                                                                                                                                                                                                                                                                       
| |      | (i)                                                                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                       
| |      | (ii)                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                       
| |      | (iii)                                                                                                                                                                                                                                                                                                                                 
| |      |                                                                                                                                                                                                                                                                                                                                       
| |      | (iv)                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                       
| |      | (v)                                                                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                       
| |      | (vi)                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                       
| |      | (vii)                                                                                                                                                                                                                                                                                                                                 
| |      |                                                                                                                                                                                                                                                                                                                                       
| | (gg) | "**Person**" means and includes any
      individual, corporation, limited partnership, general partnership, joint
      stock company, limited liability corporation, joint venture, association,
      company, trust, bank, trust company, pension fund, business trust or other
      organization, whether or not a legal entity;
| |      |                                                                                                                                                                                                                                                                                                                                       
| | (hh) | "**Plan**" means the PolyMet Mining Corp.
      2007 Omnibus Share Compensation Plan, as the same may from time to time be
      supplemented or amended and in effect;                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                       
| | (ii) | "**Prior Plan**" means the Incentive Stock
      Option Plan; approved by shareholders of the Company on May
  28,2004;                                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                       
| | (jj) | "**Related Group of Persons**"
  means:                                                                                                                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                       
| |      | (i)                                                                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                       
| |      | (ii)                                                                                                                                                                                                                                                                                                                                  

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| | (A) | the acquisition of or the intention to acquire, directly
      or indirectly, beneficial ownership of, or control and direction over,
      voting securities of the Company; or                                                                                                                               
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                
| | (B) | the exercise of voting rights attached to the securities
      of the Company beneficially owned by such Persons, or over which such
      Persons have control and direction, on matters regarding the appointment
      of directors or control of the management, affairs and business of the
      Company;

| | (kk) | "**Restricted Stock**" means any Common
      Share granted under Article 10;                                                                                                                                                                                                                                                                                          
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                        
| | (ll) | "**Restricted Stock Unit**" means any unit
      granted under Article 11 evidencing the right to receive a Common Share
      (or cash payment equal to the Market Price of a Share) at some future
      date;                                                                                                                                                       
| |      |                                                                                                                                                                                                                                                                                                                                                                        
| | (mm) | "**Securities Act**" means the Securities
      Act, R.S.B.C. 1996, c.418, as amended from time to time;                                                                                                                                                                                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                                                        
| | (nn) | "**Stock Appreciation Right**" means any
      right granted under Article 9;                                                                                                                                                                                                                                                                                          
| |      |                                                                                                                                                                                                                                                                                                                                                                        
| | (oo) | "**Stock Exchanges**" means such stock
      exchanges or other organized markets on which the Common Shares are listed
      or posted for trading;                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                        
| | (pp) | "**U.S. Internal Revenue Code**" means the
      United States Internal Revenue Code of 1986, as amended from time to
      time;                                                                                                                                                                                                                                      
| |      |                                                                                                                                                                                                                                                                                                                                                                        
| | (qq) | "**U.S. Nonqualified Stock Option**" means
      an Option to purchase Common Shares other than a U.S. Qualified Incentive
      Stock Option;                                                                                                                                                                                                                         
| |      |                                                                                                                                                                                                                                                                                                                                                                        
| | (rr) | "**U.S. Optionee**" means a Participant who
      is a citizen or a resident of the United States (including its
      territories, possessions and all areas subject to the
  jurisdiction);                                                                                                                                                                          
| |      |                                                                                                                                                                                                                                                                                                                                                                        
| | (ss) | "**U.S. Qualified Incentive Stock Option**"
      means an Option to purchase Common Shares with the intention that it
      qualify as an "incentive stock option" as that term is defined in Section
      422 of the U.S. Internal Revenue Code, such intention being evidenced by
      the resolutions of the Compensation Committee at the time of grant;
    and
| |      |                                                                                                                                                                                                                                                                                                                                                                        
| | (tt) | "**U.S. Securities Exchange Act**" means the
      U.S. Securities Exchange Act of 1934, as amended from time to
  time.                                                                                                                                                                                                                                               

**2.2                  
 Interpretation**. In this Plan, except as otherwise expressly
provided:

| | (a) | "this Plan" means this agreement, including the
      Schedules, as amended and in effect from time to
time;
| | --- | ------------------------------------------------------------------------------------------------------------

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| | (b) | any reference in this Plan to a designated "Article",
      "section" or other subdivision or Schedule is a reference to the
      designated Article, section or other subdivision of or Schedule to this
      Plan;                                                                                                                                                                                                 
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (c) | the recitals hereto are incorporated into and form part
      of this Plan;                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (d) | the words "herein", "hereof" and "hereunder" and other
      words of similar import refer to this Plan as a whole and not to any
      particular Article, section or other subdivision of or Schedule to this
      Plan;                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (e) | the headings are for convenience only and do not form a
      part of this Plan and are not intended to interpret, define or limit the
      scope, extent or intent of this Plan;                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (f) | words importing the singular number only shall include
      the plural and vice versa and words importing the use of any gender shall
      include any other gender, the word "or" is not exclusive and the word
      "including" is not limiting whether or not non-limiting language (such as
      "without limitation" or "but not limited to" or words of similar import)
      is used with reference thereto;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (g) | unless otherwise provided, all amounts are stated and are
      to be paid in Canadian dollars; a reference to US$ is to an amount stated
      in and to be paid in United States dollars ; and                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (h) | where the time for doing an act falls or expires on a day
      which is not a Business Day, the time for doing such act is extended to
      the next Business Day.                                                                                                                                                                                                                                                   

**3.0                   
EFFECTIVE DATE OF PLAN**

**3.1                   
Effective Date of this Plan**. The effective date (the "**Effective
Date**") of this Plan is June 27, 2007, the date on which this Plan was
approved by the shareholders of the Company.

**3.2                   
Three Year Shareholder Approval**. In accordance with the requirements of
the Toronto Stock Exchange, any unallocated Awards under the rolling 10% maximum
allowed under Section 5.1 of the Plan will require the further approval of the
Board of Directors and shareholders of the Company at least once during each
three year period that has elapsed from the Effective Date.

**4.0                   
ADMINISTRATION OF PLAN**

**4.1                   
Administration of Plan.** The Board of Directors may at any time appoint
a committee of the Board of Directors (the "**Compensation
Committee**") to, among other things, interpret, administer and implement
this Plan on behalf of the Board of Directors in accordance with such terms and
conditions as the Board of Directors may prescribe, consistent with this Plan
(provided that if at any such time such a committee has not been appointed by
the Board of Directors, this Plan will be administered by the Board of
Directors, and in such event references herein to the Compensation Committee
shall be construed to be a reference to the Board of Directors). The Board of
Directors will take such steps that in its opinion are required to ensure

8

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that the Compensation Committee has the necessary authority to
fulfil its functions under this Plan.

****Notwithstanding anything herein to the contrary, and insofar as the
Board of Directors determines that it is necessary in order for compensation
recognized by Participants pursuant to the Plan to be fully deductible to the
Company for federal income tax purposes, each member of the Committee also shall
be an "outside director" (as defined in regulations or other guidance issued by
the U.S. Internal Revenue Service under Section 162(m) of the U.S. Internal
Revenue Code of 1986, as amended (the "Code")).

**4.2                   
Powers of Compensation Committee.** The Compensation Committee is
authorized, subject to the provisions of this Plan, to establish from time to
time such rules and regulations, make such determinations and to take such steps
in connection with this Plan as in the opinion of the Compensation Committee are
necessary or desirable for the proper administration of this Plan. For greater
certainty, without limiting the generality of the foregoing, the Compensation
Committee will have the power, where consistent with the general purpose and
intent of this Plan and subject to the specific provisions of this Plan and any
approvals or requirements of any regulatory authorities to which the Company is
subject, including the Stock Exchanges, if applicable:

| | (a) | to delegate such duties and powers as the Compensation
      Committee may see fit with respect to this Plan (including, for greater
      certainty, the powers set out in Sections 4.2(c) through (n) below,
      pursuant to guidelines approved by the Compensation Committee, and in such
      event and in respect of those powers so delegated, references herein to
      the Compensation Committee shall be construed to be a reference to those
      Persons to whom such powers have been so delegated);
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (b) | to interpret and construe this Plan and any Award
      Agreement and to determine all questions arising out of this Plan and any
      Award Agreement, and any such interpretation, construction or
      determination made by the Compensation Committee will be final, binding
      and conclusive for all purposes;                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (c) | to determine Persons who are Eligible Persons;                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (d) | to grant Awards to Eligible Persons;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (e) | to determine the type or types of Awards to be granted to
      each Eligible Person;                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (f) | to determine the time or times when Awards will be
      granted;                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (g) | to determine the number of Common Shares covered by each
      Award (or the then method by which payments or other rights are to be
      determined in connection with);                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (h) | to determine whether, to what extent and under what
      circumstances Awards may be exercised in cash, Common Shares, other
      securities, other Awards or other property, or cancelled, forfeited or
      suspended;                                                                                                                                                                                                                                                                                            

9

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| | (i) | to enter into an Award Agreement evidencing each Award
      which will incorporate such terms as the Compensation Committee in its
      discretion deems consistent with this Plan;                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (j) | to prescribe the form of the instruments relating to the
      grant, exercise and other terms and conditions of an Award;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (k) | to determine the Exercise Price for each Option, subject
      to Section 8.1;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (l) | to determine the time or times when Options will vest and
      be exerciseable and to determine when it is appropriate to accelerate when
      Options otherwise subject to vesting may be exercised;                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (m) | to determine if the Common Shares that are subject to an
      Option will be subject to any restrictions or repurchase rights upon the
      exercise of such Option including, where applicable, the endorsement of a
      legend on any certificate representing Common Shares acquired on the
      exercise of any Option to the effect that such Common Shares may not be
      offered, sold or delivered except in compliance with the applicable
      securities laws and regulations of Canada, the United States or any other
      country and if any rights or restrictions exist they will be described in
      the applicable Option Agreement;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (n) | to determine the expiration date for each Option, subject
      to Section 8.2;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (o) | to take such steps and require such documentation from
      each Eligible Person which in its opinion are necessary or desirable to
      ensure compliance with the rules and regulations of the Stock Exchanges
      and all applicable laws;                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (p) | to adopt such modifications, procedures and subplans as
      may be necessary or desirable to comply with the provisions of the laws of
      Canada, the United States and other countries in which the Company or its
      Affiliates may operate to ensure the viability and maximization of the
      benefits from the Awards granted to Participants residing in such
      countries and to meet the objectives of this Plan; and                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (q) | to do all such other matters as provided for
    herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

****Unless otherwise expressly provided in this Plan, all designations,
determinations, interpretations and other decisions under or with respect to
this Plan or any Award shall be within the sole discretion of the Compensation
Committee, may be made at any time and shall be final, conclusive and binding
upon any Eligible Person and any holder or beneficiary of any Award.

**4.3                   
Compensation Committee Governance if U.S. Registrant**. If and so long as
the Common Shares are registered under Section 12(b) or 12(g) of the U.S.
Securities Exchange Act, the Board of Directors will consider in selecting the
members of the Compensation Committee, with respect to any Persons subject or
likely to become subject to Section 16 of the U.S. Securities Exchange Act, the
provisions regarding "nonemployee directors" as contemplated by Rule 16b-3 under
the U.S. Securities Exchange Act.

10

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**5.0                   
COMMON SHARES AVAILABLE FOR AWARDS**

**5.1                   
Common Shares Available**. Subject to adjustment as provided in Article
22, the aggregate number of Common Shares that may be issuable pursuant to the
Plan shall not at any time exceed the greater of: (i) 10% of the number of
issued and outstanding Common Shares at such time and (ii) 18,592,888 Common
Shares of which 5,940,000 Common Shares are reserved for issuance as Awards
other than Options.

****Notwithstanding the foregoing, or any other provisions of this Plan to
the contrary, the aggregate number of Common Shares available for U.S. Qualified
Incentive Stock Options, U.S. Nonqualified Stock Options, Restricted Stock,
Restricted Stock Units, Performance Awards and Other Stock-Based Awards shall in
no event exceed 25 million Common Shares, subject to adjustment pursuant to
Article 22 and subject to the provisions of, in the case of U.S. Qualified
Incentive Stock Options, sections 422 and 424 of the U.S. Internal Revenue
Code.

**5.2                   
Accounting for Awards.** For purposes of Section 5.1 and subject to
Section 5.3, if an Award entitles the holder thereof to receive or purchase
Common Shares, the number of Common Shares covered by such Award or to which
such Award relates shall be counted on the date of grant of such Award against
the aggregate number of Common Shares available for granting Awards under the
Plan. Every Common Share subject to an Award that is not a Full Value Award
shall be counted against the limit in Section 5.1 as one (1) Common Share.

**5.3                   
Other Accounting for Awards.** Any Common Shares related to an Award
which terminates by expiration, forfeiture, cancellation or otherwise without
the issuance of such Common Shares shall again be available for issuance under
the Plan. Common Shares shall not be deemed to have been issued pursuant to the
Plan with respect to any portion of an Award that is settled in cash.

**5.4                   
Prior Plan.** All option agreements entered into under the Prior Plan
shall be governed by the terms of this Plan.

**5.5                   
Reservation of Shares.** The Board of Directors will reserve for
allotment from time to time out of the authorized but unissued Common Shares
sufficient Common Shares to provide for issuance of all Common Shares which are
issuable under all outstanding Awards.

**5.6                   
No Fractional Shares.** No fractional Common Shares may be purchased or
issued under this Plan.

**6.0                   
GRANT OF AWARDS**

****  Subject
to the rules set out below, the Compensation Committee (or in the case of any
proposed Participant who is a member of the Compensation Committee, the Board of
Directors) may from time to time grant to any Eligible Person one or more Awards
as the Compensation Committee deems appropriate. A Participant, who holds any
Award at the time of granting an Award, may hold more than one type of Award.

11

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**6.1                   
Date Award Granted.** The date on which an Award will be deemed to have
been granted under this Plan will be the date on which the Compensation
Committee authorizes the grant of such Award or, other than in the case of
Awards of Options, of such other future date as may be specified by the
Compensation Committee at the time of such authorization and sets forth the
relevant terms of the Award.

**6.2                   
Number of Common Shares/Maximum Grant.** The number of Common Shares that
may be purchased under any Award or the amount of any Award that shall be
granted in any form that may result in the issuance of Common Shares will be
determined and fixed by the Compensation Committee at the date of grant,
provided that:

| | (a) | the number of Common Shares reserved for issuance to any
      one Participant pursuant to this Plan within any one year period shall
      not, in aggregate, exceed 5% of the total number of Outstanding Common
      Shares;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (b) | except in the case of Performance Awards that are
      expressly approved by shareholders of the Company, other than Insiders,
      the number of Common Shares reserved for issuance to Participants that are
      independent directors of the Company pursuant to this Plan and all of the
      Company's other security based compensation arrangements that provide for
      the issuance by the Company out of its authorized and unissued shares or
      potential issuance by the Company out of its authorized and unissued
      shares, including outstanding options under the Prior Plan, shall not, in
      aggregate, exceed 1% of the total number of Outstanding Common Shares,
      excluding Common Shares reserved for issuance to a Participant at a time
      when such Participant was not an independent director of the Company;
      and
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (c) | except in the case of Performance Awards that are
      expressly approved by shareholders of the Company, the number of Common
      Shares:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | pursuant to this Plan, or when combined with all of the
      Company's other security based compensation arrangements that provide for
      the issuance from treasury or potential issuance by the Company out of its
      authorized and unissued shares, including the Prior Plan, shall not, in
      aggregate, exceed 10% of the total number of Outstanding Common
    Shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

****    For the purposes of this Section 6.2, Common
Shares issued pursuant to an entitlement granted prior to the grantee becoming
an Insider may be excluded in determining the number of Common Shares issuable
to Insiders.

**6.3                   
Award Agreements.** Each Award will be evidenced by an Award Agreement
which incorporates such terms and conditions as the Compensation Committee in
its discretion deems appropriate and consistent with the provisions of this Plan
(and the execution and delivery by the Company of an Award Agreement with a
Participant shall be conclusive evidence that

12

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such Award Agreement incorporates terms and conditions
determined by the Compensation Committee and is consistent with the provisions
of this Plan). Each Award Agreement will be executed by the Participant to whom
the Award is granted and on behalf of the Company by any member of the
Compensation Committee or any officer of the Company or such other Person as the
Compensation Committee may designate for such purpose.

**7.0                   
ELIGIBILITY**

****     Any Eligible Person shall be eligible to
be designated a Participant. In determining which Eligible Person shall receive
an Award and the terms of any Award, the Compensation Committee may take into
account the nature of the services rendered by the respective Eligible Person,
their present and potential contributions to the success of the Company or such
other factors as the Compensation Committee, in its discretion, shall deem
relevant. Notwithstanding the foregoing, a U.S. Qualified Incentive Stock Option
may only be granted to full-time or part-time employees (which term as used
herein includes, without limitation, officers and directors who are also
employees), and a U.S. Qualified Incentive Stock Option shall not be granted to
an employee of an Affiliate unless such Affiliate is also a "subsidiary
corporation" of the Company within the meaning of Section 424(f) of the U.S.
Internal Revenue Code or any successor provision (including any Affiliate and
"subsidiary corporation that becomes such after the Effective Date").

**8.0                   
OPTIONS**

**8.1                   
Exercise Price.** The Exercise Price per Common Share under each Option
shall be not less than the Market Price of the Common Shares at the time of
grant, expressed in terms of money.

**8.2                   
Term of Options**. Subject to Section 8.3, each Option will expire (the
"Expiry Date") on the earlier of:

| | (a) | the date determined by the Compensation Committee and
      specified in the Option Agreement pursuant to which such Option is
      granted, provided that such date may not be later than the earlier of: (i)
      the date which is the seventh (7th) anniversary of the date on which such
      Option is granted, and (ii) the latest date permitted under the applicable
      rules and regulations of all regulatory authorities to which the Company
      is subject, including the Stock Exchanges;                                                                     
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (b) | if a Participant resigns from his or her employment
      (other than in the circumstances described in (c)), or a Participant's
      contract as a Consultant terminates at its normal termination date, then
      only the portion of the Option that is exercisable at the date of
      resignation or termination may be exercised by the Participant and any
      such exercise must be during the period ending on the earlier of (i) 30
      days after the date of resignation or termination and (ii) the Expiry
      Date, after which period the Option will expire;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (c) | if a Participant's employment is terminated by the
      Company or an Affiliate of the Company without Cause, including a
      constructive dismissal, or a Participant's contract as a Consultant is
      terminated by the Company or an Affiliate of the                                                                                                                                                                                                                                                                                                                       

13

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| |     | Company before its normal termination date without Cause,
      then the Option, to the extent then exercisable, will continue to be
      exercisable by the Participant pursuant to section 8.2(c) after the Date
      of Termination and any exercise of the Option must be during the period
      ending on the earlier of (i) 180 days after the Date of Termination and
      (ii) the Expiry Date, after which period the Option will expire;                                                                                                                                                                                            
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (d) | if a Participant's employment is terminated by the
      Company or an Affiliate of the Company for Cause, or a Participant's
      contract as a Consultant is terminated by the Company or an Affiliate of
      the Company before its normal termination date for Cause, including where
      a Participant resigns from his or her employment or terminates his or her
      contract as a Consultant after being requested to do so by the Company or
      an Affiliate of the Company as an alternative to being terminated for
      Cause, then the Option will expire on the eighth (8th) day following the
      Date of Termination;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (e) | if a Participant's contract as a Consultant is frustrated
      before its normal termination date due to permanent disability, then only
      the portion of the Option that is exercisable at the date of frustration
      may be exercised by the Participant and any such exercise must be during
      the period ending on the earlier of (i) 180 days after the date of
      frustration and (ii) the Expiry Date, after which period the Option will
      expire;                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (f) | if a Participant's employment ceases due to permanent
      disability, then the Option, to the extent then exercisable, will continue
      to be exercisable pursuant to section 8.2(a) and will expire on the Expiry
      Date;                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (g) | if a Participant retires upon attaining the mandatory or
      early retirement age established by the Company or an Affiliate of the
      Company from time to time, then the Option, to the extent then
      exercisable, will continue to be exercisable pursuant to section 8.2(a)
      and will expire on the Expiry Date; and                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (h) | if a Participant dies, then the Option, to the extent
      then exercisable, will continue to be exercisable pursuant to section
      8.2(a) after the death of the Participant, any exercise of the Option must
      be effected by a legal representative of the Participant's estate or by a
      person who acquires the Participant's rights under the Option by bequest
      or inheritance and any such exercise must be during the period ending on
      the earlier of (i) 12 months after the death of the Participant and (ii)
      the Expiry Date, after which period the Option will
  expire;                               

subject to the right of:

| | (i) | the Compensation Committee to, set, at the time the Award
      is granted, shorter or longer periods for exercise (not later than the
      Expiry Date) with respect to a particular Participant;
  and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

---

| | (j) | the Board to, after the time the Award is granted, set
      shorter (with the consent of the Participant) or longer periods for
      exercise (not later than the Expiry Date) with respect to a particular
      Participant or group of Participants.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

**8.3                   
Blackout Extension.** Where the Expiry Date for an Option occurs during
or within nine business days following the end of a Blackout Period, the Expiry
Date for such Option shall be extended to the date which is ten business days
following the end of such Blackout Period.

**8.4                   
Vesting and Other Restrictions.**Subject to the terms and conditions of
this Plan, the Compensation Committee may impose such limitations or conditions
on the exercise or vesting of any Option as the Compensation Committee in its
discretion deems appropriate, including limiting the number of Common Shares for
which any Option may be exercised during any period as may be specified by the
Compensation Committee and which number of Common Shares for which such Option
may be exercised in any period will be specified in the Option Agreement with
respect to such Option.

**8.5                   
Vesting on Control Change or Termination of Employment without Cause.**
If a Control Change occurs, or a Participant's employment is terminated by the
Company or an Affiliate of the Company without Cause, including a constructive
dismissal, or a Participant's contract as a Consultant is terminated by the
Company or an Affiliate of the Company before its normal termination date
without Cause, then all unvested Options will vest on the date of such Control
Change or the date of such notice of such termination, specifically without
regard to any period of reasonable notice or salary continuation.

**8.6                   
Exercise of Options.** Each Option Agreement will provide that the Option
granted thereunder may be exercised only by notice ("**Notice of
Exercise**") delivered to the Company in the form of Schedule B and
signed by the Participant, or the legal representative or committee or attorney,
as the case may be (the "**Legal Representative**"), of the
Participant, and accompanied by full payment for the Common Shares being
purchased. Such consideration may be paid in any combination of the following:

| | (a) | bank draft, certified cheque or wire transfer;
  or                                                     
| | --- | --------------------------------------------------------------------------------------------------------
| |     |                                                                                                         
| | (b) | such other consideration as the Compensation Committee
      may permit consistent with applicable laws.

****As soon as practicable after any exercise of an Option, a certificate
or certificates representing the Common Shares in respect of which such Option
is exercised will be delivered by the Company to the Participant or the Legal
Representative of the Participant.

**8.7                   
Cashless Exercise.** A Participant may elect "cashless" exercise in a
Notice of Exercise if the Common Shares issuable on exercise of an Option are to
be immediately sold. In such case the Participant will not be required to
deliver to the Corporation the bank draft, certified cheque or wire transfer
referred to in Section 8.6(a) . Instead the following procedure will be
followed, as detailed in a Cashless Exercise Instruction Form to be provided by
the Corporation and completed by the Participant;

15

---

| | (a) | the Participant will instruct a broker selected by the
      Participant to sell through an Exchange the Common Shares issuable on
      exercise of an Option as soon as possible and at the applicable bid price
      for the Common Shares;                                                                                                                                     
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                     
| | (b) | on the settlement date for the trade, the Company will
      direct its registrar and transfer agent to issue a certificate in the name
      of the broker (or as the broker may otherwise direct) for the number of
      Common Shares issued on exercise of the Option, against payment by the
      broker to the Company or the Exercise Price for such Common Shares;
    and
| |     |                                                                                                                                                                                                                                                                                                                                                                                     
| | (c) | the broker will deliver to the Participant the remaining
      proceeds of sale, net of the brokerage commission.                                                                                                                                                                                                                                                                   

**8.8                   
Alternative Exercise.** With the approval of the Compensation Committee,
a Participant may, rather than exercise an Option which the Participant is
entitled to exercise under the Plan, elect to surrender the Option in whole or
in part and, in lieu of receiving the Common Shares to which the surrendered
Option relate, receive the number of Common Shares, disregarding fractions,
which, when multiplied by the Market Price of the Common Shares to which the
surrendered Option relate, have a value equal to the product of the number of
Common Shares to which the surrendered Option relate multiplied by the
difference between the Market Price and the Exercise Price of the Common Shares
to which the surrendered Option relate, less any amount withheld on account of
income taxes. A Participant may also elect, subject to the approval of the
Compensation Committee, to surrender the Option in whole or in part and, in lieu
of receiving the Common Shares to which the surrendered Option relate, receive
cash equal to the product of the number of Common Shares to which the
surrendered Option relate multiplied by the difference between the Market Price
and the Exercise Price of the Common Shares to which the surrendered Option
relate, less any amount withheld on account of income taxes. For the purpose of
determining the aggregate number of Common Shares that may be subject to Awards
granted pursuant to the Plan, the number of Common Shares in respect of Options
that are surrendered shall be considered as if such Options had been exercised,
and such Options may not be reissued.

**8.9                   
Maximum Grant in a Calendar Year.** Notwithstanding anything contained
herein to the contrary but subject to Section 6.2, the aggregate number of
Common Shares to which Options may be granted in any calendar year to any one
Participant shall not exceed 1.5 million Common Shares.

**9.0                   
STOCK APPRECIATION RIGHTS**

****     The Compensation Committee is hereby
authorized to grant Stock Appreciation Rights to Eligible Persons subject to the
terms and conditions of the Plan.

**9.1                   
Exercise of Stock Appreciation Rights.** Each Stock Appreciation Right
granted under the Plan shall confer on the holder upon exercise of the Stock
Appreciation Right the right to receive, as determined by the Compensation
Committee, cash equal to the excess of: (i) the Market Price of one Common Share
on the date of exercise, and; (ii) the grant price of the Stock Appreciation
Right as determined by the Compensation Committee, which grant price shall not
be less than 100% of the Market Price of one Common Share on the date of grant
of the Stock

16

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Appreciation Right, or a fraction of a Common Share having a
value (based on the Market Price of a Common Share on the date of exercise)
equal to the excess of the amount in subclause (i) and the amount in
subclause(ii) above. Subject to the terms of the Plan, the grant price, term,
methods of exercise, dates of exercise, methods of settlement and any other
terms and conditions (including conditions or restrictions on the exercise
thereof) of any Stock Appreciation Right shall be as determined by the
Compensation Committee.

**9.2                   
Term of Stock Appreciation Rights.** Subject to Section 9.3, each Stock
Appreciation Right will have a similar Expiry Date as for Options, being the
earlier of:

| | (a) | the date determined by the Compensation Committee and
      specified in the Award Agreement pursuant to which such Stock Appreciation
      Right is granted, provided that such date may not be later than the
      earlier of: (i) the date which is the seventh (7th) anniversary of the
      date on which such Stock Appreciation Right is granted, and (ii) the
      latest date permitted under the applicable rules and regulations of all
      regulatory authorities to which the Company is subject, including the
      Stock Exchanges;                                                                                                                                                                                                                                          
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (b) | in the event the Participant ceases to be an Eligible
      Person for any reason, other than the death of the Participant or the
      termination of the Participant for cause, the date which is 180 days
      following the Date of Termination (specifically without regard to any
      period of reasonable notice or any salary continuance) of the
      Participant's directorship, active employment or active engagement, as
      applicable, with the Company or its Affiliates, or such earlier or later
      date as the Compensation Committee may determine but no later than the
      Expiry Date;                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (c) | in the event of the termination of the Participant as a
      director, officer, employee or Consultant of the Company or its Affiliates
      for cause, the date of notice of such termination, specifically without
      regard to any period of reasonable notice or any salary continuance;
      and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (d) | in the event of the death of a Participant prior to: (i)
      the Participant ceasing to be an Eligible Person (which, in the case of an
      employee or Consultant of the Company or its Affiliates, shall be the date
      on which active employment or engagement, as applicable, with the Company
      or its Affiliates terminates, specifically without regard to any period of
      reasonable notice or any salary continuance); or (ii) the date on which
      the Stock Appreciation Right, but for this Section 9.2(d), would have
      expired pursuant to Section 9.2(b); the date which is one year after the
      date of death of such Participant or such earlier or later date as the
      Compensation Committee may determine but no later than the Expiry
    Date.

**9.3                   
Blackout Extension.** Where the Expiry Date for a Stock Appreciation
Right occurs during or within nine business days following the end of a Blackout
Period, the Expiry Date for such Stock Appreciation Right shall be extended to
the date which is ten business days following the end of such Blackout Period.

17

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10.0RESTRICTED STOCK

****The Compensation Committee is hereby authorized to grant Restricted
Stock to an Eligible Person with the following terms and conditions and with
such additional terms and conditions not inconsistent with the provision of the
Plan as the Compensation Committee shall determine.

**10.1               
Restriction.** Common Shares of Restricted Stock shall be subject to such
restrictions as the Compensation Committee may impose (including, without
limitation, a restriction on or prohibition against the right to receive any
dividend or other right or property with respect thereto), which restrictions
lapse separately or in combination at such time or times, in such instalments or
otherwise as the Compensation Committee may deem appropriate.

**10.2                
Stock Certificates.** Any Restricted Stock granted under the Plan shall
be evidenced by the issuance of a share certificate or certificates, which shall
be held by the Company. Such certificate or certificates shall be registered in
the name of the Participant and shall bear an appropriate legend referring to
the applicable Award Agreement and possible forfeiture of such shares of
Restricted Stock. Upon the issuance of the share certificate or share
certificates for the Restricted Stock, the holder thereof shall have all rights
of a shareholder of record with respect to such Common Shares, including the
right to vote and receive distributions. The Common Shares of Restricted Stock
shall vest in the holder thereof when all vesting restrictions and vesting
contingencies lapse, including the lapse of any rights of forfeiture. Until such
time, the Compensation Committee may require that such Common Shares be held by
the Company together with a stock power duly endorsed in blank by the holder.

**10.3                
Forfeiture.** Except as otherwise determined by the Compensation
Committee, upon a Participant's termination of employment (as determined under
criteria established by the Compensation Committee) during the applicable
restriction period, all applicable Common Shares of Restricted Stock at such
time subject to restriction shall be forfeited and reacquired by the Company;
provided, however,that the Compensation Committee may, when it finds
that a waiver would be in the best interest of the Company, waive in whole or in
part any or all remaining restrictions with respect to Common Shares of
Restricted Stock.

**10.4                
For Canadian Residents.** Participants employed in Canada are not
eligible to receive a grant of Restricted Stock pursuant to this Article 10 of
this Plan.

**11.0                
RESTRICTED STOCK UNIT AWARDS**

****The Compensation Committee is hereby authorized to grant Restricted
Stock Unit Awards to an Eligible Person evidencing the right for such Eligible
Person to receive a Common Share (or cash payment equal to the Market Price of a
Common Share) at some future date.

**11.1                
Restrictions.** A Restricted Stock Unit Award will be subject to a
Restricted Stock Unit Award Agreement containing such terms and conditions, not
inconsistent with the provisions of the Plan, as the Compensation Committee
shall determine.

**11.2                
Stock Certificates.** Any Restricted Stock Unit granted under the Plan
shall be evidenced by the issuance of a share certificate or certificates, which
shall be held by the

18

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Company. Such certificate or certificates shall be registered
in the name of the Participant and shall bear an appropriate legend referring to
the applicable Award Agreement and possible forfeiture of such shares of
Restricted Stock Unit. Upon the issuance of the share certificate or share
certificates for the Restricted Stock Unit, the holder thereof shall have all
rights of a shareholder of record with respect to such Common Shares, including
the right to vote and receive distributions. The Common Shares of the Restricted
Stock Unit shall vest in the holder thereof when all vesting restrictions and
vesting contingencies lapse, including the lapse of any rights of forfeiture.
Until such time, the Compensation Committee may require that such Common Shares
be held by the Company together with a stock power duly endorsed in blank by the
holder

**11.3                
Forfeiture.** Except as otherwise determined by the Compensation
Committee and as set forth in the applicable Award Agreement, upon a
Participant's termination of employment (as determined under criteria
established by the Compensation Committee) during the applicable restriction
period, all applicable Restricted Stock Units at such time subject to
restriction shall be forfeited and reacquired by the Company; provided,
however,that the Compensation Committee may, when it finds that a waiver
would be in the best interest of the Company, waive in whole or in part any or
all remaining restrictions with respect to Restricted Stock Units.

**11.4                
For Canadian Residents**. Restricted Stock Unit Awards shall be settled
in Common Shares, unless the Company offers the Participant the right to receive
cash in lieu of Common Shares and the Participant, in its sole discretion, so
elects.

**12.0                
PERFORMANCE AWARDS**

****The Compensation Committee is hereby authorized to grant Performance
Awards to an Eligible Person subject to the terms of the Plan. A Performance
Award granted under the Plan (i) may be denominated or payable in cash, Common
Shares (including, without limitation, Restricted Stock and Restricted Stock
Units), other securities, other Awards or other property, and (ii) shall confer
on the holder thereof the right to receive payments, in whole or in part, upon
the achievement of such performance goals during such performance periods as the
Compensation Committee shall establish. Subject to the terms of the Plan, the
performance goals to be achieved during any performance period, the length of
any performance period, the amount of any Performance Award granted, the amount
of any payment or transfer to be made pursuant to any Performance Award and any
other terms and conditions of the Performance Award shall be determined by the
Compensation Committee.

**13.0                
OTHER STOCK-BASED AWARDS**

**13.1                
Grant of Stock-Based Awards.** The Compensation Committee is hereby
authorized to grant to an Eligible Person, subject to the terms of the Plan,
such other Awards that are denominated or payable in, valued in whole or in part
by reference to, or otherwise based on or related to, Common Shares (including,
without limitation, securities convertible into Common Shares), as are deemed by
the Compensation Committee to be consistent with the purpose of the Plan. Common
Shares or other securities delivered pursuant to a purchase right granted under
this Article 13 shall be purchased for such consideration, which may be paid by
such method or methods and in such form or forms (including, without limitation,
cash, Common Shares,

19

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promissory notes provided, however, that the acceptance
of such promissory notes does not conflict with Section 402 of the
Sarbanes-Oxley Act of 2002 (if applicable), other securities, other Awards or
other property or any combination thereof), as the Compensation Committee shall
determine, the value of which consideration, as established by the Compensation
Committee, shall not be less than 100% of the Market Price of such Common Shares
or other securities as of the date such purchase right is granted.

**13.2                
Income Tax.** With respect to any other Award granted to a Participant
employed in Canada, the Compensation Committee shall have the right, but not the
obligation, to take account of Canadian income tax considerations in determining
the terms and conditions of the Award or any other amendment thereto.

**14.0                
GENERAL TERMS OF AWARDS**

**14.1                
Consideration for Awards**. Awards may be granted for no cash
consideration or for any cash or other consideration as determined by the
Compensation Committee and required by applicable law.

**14.2                
Awards May Be Granted Separately or Together.** Awards may, in the
discretion of the Compensation Committee, be granted either alone or in addition
to, in tandem with any other Award or any award granted under any plan of the
Company or any Affiliate. Awards granted in addition to or in tandem with other
Awards or in addition to or in tandem with awards granted under any such other
plan of the Company or any Affiliate may be granted either at the same time as
or at a different time from the grant of such other Awards or awards.

**14.3                
Forms of Payment under Awards.** Subject to the terms of the Plan,
payments or transfers to be made by the Company or an Affiliate upon the grant,
exercise or payment of an Award may be made in such form or forms as the
Compensation Committee shall determine (including, without limitation, cash,
Common Shares, promissory notes provided,however, that the
acceptance of such promissory notes does not conflict with Section 402 of the
Sarbanes-Oxley Act of 2002 (if applicable), other securities, other Awards or
other property or any combination thereof), and may be made in a single payment
or transfer, in instalments or on a deferred basis, in each case in accordance
with rules and procedures established by the Compensation Committee. Such rules
and procedures may include, without limitation, provisions for the payment or
crediting of reasonable interest on instalment or deferred payments or the grant
or crediting of dividend equivalents with respect to instalment or deferred
payments.

**14.4                
Restrictions, Securities Exchange Listing.** All Common Shares or other
securities delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other restrictions as
the Compensation Committee may deem advisable under the Plan, applicable United
States federal or state, Canadian provincial, or foreign securities laws and
regulatory requirements, and applicable Canadian corporate laws, and the
Compensation Committee may direct appropriate stop transfer orders and cause
other legends to be placed on the certificates for such Common Shares or other
securities to reflect such restrictions. If the Common Shares or other
securities are traded on a securities exchange, the Company shall not be
required to deliver any Common Shares or other securities covered by an Award
unless and until such Common Shares or other securities have been admitted for
trading on such securities exchange.

20

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15.0CHANGE IN STATUS

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

16.0NON-TRANSFERABILITY OF AWARDS

**** Each Award Agreement will provide that the Award granted
thereunder is not transferable or assignable to anyone other than a Permitted
Assign. The Award Agreement will also provide that the Award granted thereunder
may only be exercised by the Participant or a Permitted Assign or in the event
of:

| | (a) | the death of the Participant or a Permitted Assign;
    or                                                                                                                                                                                                        
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                   
| | (b) | the appointment of a committee or duly appointed attorney
      of the Participant or a Permitted Assign on the grounds that the
      Participant or a Permitted Assign is incapable, by reason of physical or
      mental infirmity, of managing their affairs;

the Participant's or a Permitted Assign's Legal Representative.

17.0REPRESENTATIONS AND COVENANTS OF PARTICIPANTS

**17.1                
Representations and Covenants.** Each Award Agreement will be deemed to
contain representations and covenants of the Participant that:

| | (a) | the Participant is a director, officer, employee, or
      Consultant of the Company or its Affiliates or a Person otherwise
      determined as an Eligible Person under this Plan by the Compensation
      Committee;                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (b) | the Participant has not been induced to enter into such
      Award Agreement by the expectation of employment or continued employment
      with the Company or its Affiliates;                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (c) | the Participant is aware that the grant of the Award and
      the issuance by the Company of Common Shares thereunder are exempt from
      the obligation under applicable securities laws to file a prospectus or
      other registration document qualifying the distribution of the Options or
      the Common Shares to be distributed thereunder under any applicable
      securities laws;                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (d) | upon each exercise of an Option, the Participant, or the
      Legal Representative of the Participant, as the case may be, will, if
      requested by the Company, represent and agree in writing that the Person
      is, or the Participant was, a director, officer, employee or Consultant of
      the Company or its Affiliates or a Person otherwise determined as an
      Eligible Person under this Plan by the Compensation Committee and has not
      been induced to purchase the Common Shares by expectation of employment or
      continued employment with the Company or its Affiliates,
  and

21

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| |     | that such Person is not aware of any commission or other
      remuneration having been paid or given to others in respect of the
      granting of the Award; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (e) | if the Participant or the Legal Representative of the
      Participant exercises the Option, the Participant or the Legal
      Representative, as the case may be, will prior to and upon any sale or
      disposition of any Common Shares purchased pursuant to the exercise of the
      Option, comply with all applicable securities laws and all applicable
      rules and regulations of all regulatory authorities to which the Company
      is subject, including the Stock Exchanges, and will not offer, sell or
      deliver any of such Common Shares, directly or indirectly, in the United
      States or to any citizen or resident of, or any company, partnership or
      other entity created or organized in or under the laws of, the United
      States, or any estate or trust the income of which is subject to United
      States federal income taxation regardless of its source, except in
      compliance with the securities laws of the United
States.

**17.2                
Provisions Relating to Common Share Issuances under an Option
Agreement.** Each Option Agreement will contain such provisions as in the
opinion of the Compensation Committee are required to ensure that no Common
Shares are issued on the exercise of an Option unless the Compensation Committee
is satisfied that the issuance of such Common Shares will be exempt from all
registration or qualification requirements of applicable securities laws and
will be permitted under the applicable rules and regulations of all regulatory
authorities to which the Company is subject, including the Stock Exchanges. In
particular, if required by any regulatory authority to which the Company is
subject, including the Stock Exchanges, an Option Agreement may provide that
shareholder approval to the grant of an Option must be obtained prior to the
exercise of the Option or to the amendment of the Option Agreement.

**18.0                
U.S. QUALIFIED INCENTIVE STOCK OPTION PROVISIONS**

****   To the extent required by Section 422 of the U.S.
Internal Revenue Code, U.S. Qualified Incentive Stock Options shall be subject
to the following additional terms and conditions and if there is any conflict
between the terms of this Article and other provisions under this Plan, the
provisions under this Article shall prevail:

**18.1                
Eligible Employees**. All classes of employees of the Company or one of
its parent companies or subsidiary companies may be granted U.S. Qualified
Incentive Stock Options. U.S. Qualified Incentive Stock Options shall only be
granted to U.S. Optionees who are, at the time of grant, officers, key employees
or directors of the Company or one of its parent companies or subsidiary
companies (provided, for purposes of this Article 18 only, such directors are
then also employees of the Company or one of its parent companies or subsidiary
companies). For purposes of this Article 18, "parent company" and "subsidiary
company" shall have the meanings attributed to those terms for the purposes of
Section 422 of the U.S. Internal Revenue Code. Any director of the Company who
is a U.S. Optionee shall be ineligible to vote upon the granting of such Option;
and for greater certainty, Consultants of the Company or one of its parents or
subsidiary companies may not be granted U.S. Qualified Incentive Stock
Options.

22

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**18.2                
Dollar Limitation.** To the extent the aggregate fair market value
(determined as of the grant date) of Common Shares with respect to which U.S.
Qualified Incentive Stock Options are exercisable for the first time by a U.S.
Optionee during any calendar year (under this Plan and all other stock option
plans of the Company and any parent or subsidiary companies) exceeds U.S.
$100,000, such portion in excess of U.S. $100,000 shall be treated as a U.S.
Nonqualified Stock Option. In the event the U.S. Optionee holds two or more such
Options that become exercisable for the first time in the same calendar year,
such limitation shall be applied on the basis of the order in which such Options
are granted.

**18.3                
Term of U.S. Qualified Incentive Stock Options; No Issuance of U.S. Qualified
Incentive Stock Options More than 10 Years after Plan Adopted.**
Consistent with Section 8.2 pertaining to the maximum term of Options, a U.S.
Qualified Incentive Stock Option will terminate and no longer be exercisable no
later than 10 years after the date on which the U.S. Qualified Incentive Stock
Option was granted. No U.S. Qualified Incentive Stock Option may be granted more
than 10 years after the earlier of (a) the date on which this Plan is adopted by
the Board of Directors; or (b) the date on which this Plan is approved by the
shareholders of the Company.

**18.4                
10% Shareholders**. If any U.S. Optionee to whom a U.S. Qualified
Incentive Stock Option is to be granted under this Plan at the time of the grant
of such U.S. Qualified Incentive Stock Option is the owner of shares possessing
more than ten percent (10%) of the total combined voting power of all classes of
shares of the Company and any parent or subsidiary companies, then the following
special provisions shall be applicable to the U.S. Qualified Incentive Stock
Option granted to such individual:

| | (a) | the Exercise Price (per Common Share) subject to such
      U.S. Qualified Incentive Stock Option shall not be less than one hundred
      ten percent (110%) of the fair market value of one Common Share at the
      time of grant; and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                           
| | (b) | for the purposes of this Article 18 only, the option
      exercise period shall not exceed five (5) years from the date of
    grant.                                                                                                    

The determination of ten percent (10%) ownership shall be made
in accordance with Section 422 of the U.S. Internal Revenue Code.

**18.5                
Exercisability.** To qualify for U.S. Qualified Incentive Stock Option
tax treatment, an Option designated as a U.S. Qualified Incentive Stock Option
must be exercised within three months after termination of employment for
reasons other than death or total disability, except that, in the case of
termination of employment due to death or total disability, such Option must be
exercised within one year after such termination. Employment shall not be deemed
to continue beyond the first three months of a leave of absence unless the U.S.
Optionee's reemployment rights are guaranteed by statute or contract. For
purposes of this Section 18.5, "total disability" shall mean a mental or
physical impairment of the U.S. Optionee which is expected to result in death or
which has lasted or is expected to last for a continuous period of 12 months or
more and which causes the U.S. Optionee to be unable, to be engaged in any
substantial gainful activity. Total disability shall be deemed to have occurred
on the first day after the Company and the two independent physicians have
furnished their opinion of total disability to the Compensation Committee.

23

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**18.6                
Taxation of U.S. Qualified Incentive Stock Options.** In order to obtain
certain tax benefits afforded to U.S. Qualified Incentive Stock Options under
Section 422 of the U.S. Internal Revenue Code, the U.S. Optionee must hold the
Common Shares issued upon the exercise of a U.S. Qualified Incentive Stock
Option for two years after the date of grant of the U.S. Qualified Incentive
Stock Option and one year from the date of exercise. A U.S. Optionee may be
subject to U.S. alternative minimum tax at the time of exercise of a U.S.
Qualified Incentive Stock Option. The Compensation Committee may require a U.S.
Optionee to give the Company prompt notice of any disposition of shares acquired
by the exercise of a U.S. Qualified Incentive Stock Option prior to the
expiration of such holding periods.

**18.7                
Non-Transferability of U.S. Qualified Incentive Stock Options.**No U.S.
Qualified Incentive Stock Option granted under this Plan may be assigned or
transferred by the U.S. Optionee other than by will or by the laws of descent
and distribution, and during the U.S. Optionee's lifetime, such U.S. Qualified
Incentive Stock Option may be exercised only by the U.S. Optionee.

**18.8                
Exercise Price.** Notwithstanding Section 8.1, no U.S. Qualified
Incentive Stock Option granted under the Plan shall have an Exercise Price less
than the fair market value of the underlying Common Shares at the date of grant
of such Option, as determined at such time in good faith by the Board or
Directors or the Compensation Committee, as the case may be. For purposes of
this Section 18.8, unless otherwise determined by the Board, fair market value
shall mean the closing price of one Common Share as reported on the American
Stock Exchange, or such other market on which the Common Shares are listed or
posted for trading, on the date of grant of such Option.

**18.9                
Approval by Shareholders.** No U.S. Qualified Incentive Stock Option
granted to a U.S. Optionee under this Plan shall become exercisable unless and
until this Plan shall have been approved by the shareholders of the Company
within 12 months of adoption by the Board of Directors of the Company.

19.0WITHHOLDING TAX

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

20.0CONDITIONS

****  Notwithstanding any of the provisions contained in this
Plan or in any Award Agreement, the Company's obligation to issue Common Shares
to a Participant pursuant to the exercise of an Option or the granting of any
Award will be subject to, if applicable:

| | (a) | completion of such registration or other qualification of
      such Common Shares or obtaining approval of such governmental authority as
      the Company will
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

24

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| |     | determine to be necessary or advisable in connection with
      the authorization, issuance or sale thereof; and                                                                                                                                                                                                                      
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                       
| | (b) | the receipt from the Participant of such representations,
      agreements and undertakings, including as to future dealings in such
      Common Shares, as the Company or its counsel determines to be necessary or
      advisable in order to safeguard against the violation of the securities
      laws of any jurisdiction; or
| |     |                                                                                                                                                                                                                                                                                                                                       
| | (c) | change or modify any Award to U.S. Optionees that would
      result in a violation of Section 409A of the U.S. Internal Revenue
      Code.                                                                                                                                                                                          

21.0SUSPENSION, AMENDMENT OR TERMINATION OF PLAN

**21.1                
Suspension, Amendment or Termination of Plan.** The Compensation
Committee will have the right at any time to suspend or terminate this Plan and,
subject to Section 21.2, may:

| | (a) | with the prior approval of shareholders of the Company by
      ordinary resolution make any amendment to any Award Agreement or the Plan,
      including any amendment that would:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                     
| |     | (i)                                                                                                                                                                                 
| |     |                                                                                                                                                                                     
| |     | (ii)                                                                                                                                                                                
| |     |                                                                                                                                                                                     
| |     | (iii)                                                                                                                                                                               
| |     |                                                                                                                                                                                     
| |     | (iv)                                                                                                                                                                                
| |     |                                                                                                                                                                                     
| |     | (v)                                                                                                                                                                                 
| |     |                                                                                                                                                                                     
| | (b) | without the prior approval of shareholders of the Company
      make the following amendments to any Award Agreement or the
Plan:                                                   
| |     |                                                                                                                                                                                     
| |     | (i)                                                                                                                                                                                 
| |     |                                                                                                                                                                                     
| |     | (ii)                                                                                                                                                                                
| |     |                                                                                                                                                                                     
| |     | (iii)                                                                                                                                                                               

25

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| | (iv) | amendments to the expiration date of an Award that does
      not extend the term of an Award past the original date of expiration for
      such Award; and                                                                                                                                                                               
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                            
| | (v)  | amendments to implement or modify a cashless exercise
      feature for Options, whether such feature provides for payments in cash or
      securities, so long as any such feature provides for the full deduction of
      the number of underlying Common Shares from the total number of Common
      Shares available under the Plan.

Notwithstanding the foregoing, all procedures and necessary
approvals required under the applicable rules and regulations of all regulatory
authorities to which the Company is subject shall be complied with and obtained
in connection with any such suspension, termination or amendment to the Plan or
amendments to any Award Agreement.

**21.2                
Limitations.** In exercising its rights pursuant to Section 21.1, the
Compensation Committee will not have the right to:

| | (a) | affect in a manner that is materially adverse to, or that
      materially impairs, the benefits and rights of any Participant under any
      Award previously granted under this Plan (except: (i) with the consent of
      such Participant; (ii) as permitted pursuant to Article 22; or (iii) for
      the purpose of complying with the requirements of any regulatory
      authorities to which the Company is subject, including the Stock
      Exchanges); or
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (b) | change or adjust any outstanding U.S. Qualified Incentive
      Stock Option without the consent of the Participant if such change or
      adjustment would constitute a "modification" that would cause such U.S.
      Qualified Incentive Stock Option to fail to continue to qualify as a U.S.
      Qualified Incentive Stock Option.                                                                                                                               

**21.3                
Powers of Compensation Committee Survive Termination.** The full powers
of the Compensation Committee as provided for in this Plan will survive the
termination of this Plan until all Awards and Options have been exercised in
full or have otherwise expired.

22.0ADJUSTMENTS

**22.1                
Adjustments.** Adjustments will be made to (i) the Exercise Price of an
Option, (ii) the number of Common Shares delivered to a Participant upon
exercise of an Option and/or (iii) the maximum number of Common Shares that,
pursuant to section 5.1, may at any time be reserved for issuance pursuant to
Awards granted under the Plan in the following events and manner, subject to any
required regulatory approvals and the right of the Board to make such other or
additional adjustments as the Board considers to be appropriate in the
circumstances:

| | (a) | upon (i) a subdivision of the Common Shares into a
      greater number of Common Shares, (ii) a consolidation of the Common Shares
      into a lesser number of Common Shares or (iii) the issue of a stock
      dividend to holders of the Common Shares (excluding a stock dividend paid
      in lieu of a cash dividend in the ordinary course), the Exercise Price
      will be adjusted accordingly and the Company will deliver upon exercise of
      an Option, in addition to or in lieu of the number
of
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

26

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| |     | Common Shares in respect of which the right to purchase
      is being exercised, such greater or lesser number of Common Shares as
      result from the subdivision, consolidation or stock dividend;                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (b) | upon (i) a capital reorganization, reclassification or
      change of the Common Shares, (ii) a consolidation, amalgamation,
      arrangement or other form of business combination of the Company with
      another person or Company or (iii) a sale, lease or exchange of all or
      substantially all of the property of the Company, the Exercise Price will
      be adjusted accordingly and the Company will deliver upon exercise of an
      Option, in lieu of the Common Shares in respect of which the right to
      purchase is being exercised, the kind and amount of shares or other
      securities or property as results from such event;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (c) | upon the distribution by the Company to holders of the
      Common Shares of (i) shares of any class (whether of the Company or
      another Company) other than Common Shares, (ii) rights, options or
      warrants, (iii) evidences of indebtedness or (iv) cash (excluding a cash
      dividend paid in the ordinary course), securities or other property or
      assets, the Exercise Price will be adjusted accordingly but no adjustment
      will be made to the number of Common Shares to be delivered upon exercise
      of an Option;                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (d) | upon the occurrence of an event described in (a) or (b)
      above, the maximum number of Common Shares that, pursuant to section 5.1,
      may at any time be reserved for issuance pursuant to Awards granted under
      the Plan will be adjusted accordingly;                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (e) | adjustments to the Exercise Price of an Option will be
      rounded up to the nearest one cent and adjustments to the number of Common
      Shares delivered to a Participant upon exercise of an Option and the
      maximum number of Common Shares that, pursuant to section 5.1, may at any
      time be reserved for issuance pursuant to Awards granted under the Plan
      will be rounded down to the nearest whole Common Share; and                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (f) | an adjustment will take effect at the time of the event
      giving rise to the adjustment, and the adjustments provided for in this
      section are cumulative                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

****Appropriate adjustments that are similar to the foregoing will be made
in respect of Stock Appreciation Rights, Restricted Stock, Restricted Stock Unit
Awards, Performance Awards and other stock based awards referred to in Section
13.1 in the foregoing events and manner, subject to any required regulatory
approvals and the right of the Board to make such other or additional
adjustments as the Board considers to be appropriate in the circumstances:

27

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**22.2                
Control Change  Actions by Compensation Committee.** Subject to the
approval of the Toronto Stock Exchange and any other applicable regulatory
authority, in the event of a Control Change or a transaction or a proposed
transaction which, in the opinion of the Compensation Committee could, if
completed in accordance with its terms result in a Control Change:

| | (a) | the Compensation Committee shall, in a manner determined
      by them to be appropriate and equitable, determine any adjustment to the
      number and type of Common Shares (or other securities or other property)
      that thereafter shall be made the subject of Awards;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (b) | the Compensation Committee shall, in a manner determined
      by them to be appropriate and equitable, determine the number and type of
      Common Shares (or other securities or other property) subject to
      outstanding Awards;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (c) | the Compensation Committee shall, in a manner determined
      by them to be appropriate and equitable, determine the purchase price or
      exercise price with respect to any Award; provided, however,
      that the number of Common Shares covered by any Award or to which such
      Award relates shall always be a whole number;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (d) | the Compensation Committee shall, in a manner determined
      by them to be appropriate and equitable, determine the manner in which all
      unexercised option rights and other Awards granted under this Plan will be
      treated including, without limitation, requiring the acceleration of the
      time for the exercise or payment of such rights by the Participants, the
      time for the fulfilment of any conditions or restrictions on such
      exercise, and the time for the expiry of such rights;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (e) | the Compensation Committee or any Person which is or
      would be the successor to the Company or which may issue securities in
      exchange for Common Shares upon the Control Change becoming effective may
      offer any Participant the opportunity to obtain a new or replacement
      option or Award over any securities into which the Common Shares are
      changed or are convertible or exchangeable, on a basis proportionate to
      the number of Common Shares under option and the Exercise Price or Award
      (and otherwise substantially upon the terms of the Option being replaced,
      or upon terms no less favourable to the Participant) including, without
      limitation, the periods during which the Option may be exercised or the
      Award paid and expiry dates; and in such event, the Participant shall, if
      he accepts such offer, be deemed to have released his Option over the
      Common Shares or Award and such Option or Award shall be deemed to have
      lapsed and be cancelled; and
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (f) | the Compensation Committee may commute for or into any
      other security or any other property or cash, any Option that is still
      capable of being exercised or other Award, upon giving to the Participant
      to whom such Option has been granted at least 30 days written notice of
      its intention to commute such Option, and during such period of notice,
      the Option, to the extent it has not been exercised, may be exercised by
      the Participant without regard to any vesting conditions
  attached                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

28

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thereto, and on the expiry of such
period of notice, the unexercised portion of the Option shall lapse and be
cancelled.

Subsections (a) through (f) of this Section 22.2 may be
utilized independently of, successively with, or in combination with each other
and Section 22.1, and nothing therein contained shall be construed as limiting
or affecting the ability of the Compensation Committee to deal with Awards in
any other manner. All determinations by the Compensation Committee under this
Article 22 will be final, binding and conclusive for all purposes.

**22.3                
Control Change  Exercise to Participate in Transaction.** On the
occurrence of a Control Change, notwithstanding section 22.2, a Participant may
exercise the Option, notwithstanding the time or times specified in such Option
Agreement for the exercise of the Option granted thereunder, as to any of the
Common Shares in respect of which the Option has not been exercised, and

| | (a) | If a "take-over bid" (within the meaning of applicable
      securities legislation) made by any person for the voting securities of
      the Company would, if successful, result in a Control Change,
  then:                                                                                                                                                                                                         
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (b) | in any other case, only for the purpose of participating
      in such transaction provided that the Compensation Committee may take such
      steps and require such documentation from the Participant which in its
      opinion are necessary to ensure that such Common Shares that are issued
      upon the exercise of the Option are purchased only for the purpose of
      participating in such transaction.

provided that if such Control Change does not occur then the
Participant shall promptly return the Common Shares (or the portion that are not
taken up and paid for) to the Company for cancellation, the Option respecting
such Common Shares shall be deemed not to have been exercised, the Common Shares
shall be deemed not to have been issued and the Company shall refund to the
Participant the aggregate Exercise Price for the Common Shares (unless the
Participant elected cashless exercise).

**22.4                
Going Private Transaction.** In the event of a Going Private Transaction,
the Company may terminate the Awards at the time of and subject to the
completion of such Going Private Transaction by giving at least 10 days prior
written notice of such termination to the Participant and paying to the
Participant at the time of completion of such Going Private Transaction an
amount equal to the fair value of such Award as determined by a recognized

29

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investment dealer in Canada as selected by the Compensation
Committee for such purpose (for such purpose the Participant will be deemed to
be entitled to exercise their rights as to the purchase of all of the Common
Shares then covered by such Award notwithstanding any restrictions which may be
specified in the Option Agreement for the exercise of the Award) and, absent
manifest error, the determination of such investment dealer will be conclusive
and binding on the Participant and the Company.

**22.5                
Cancellation.** The Compensation Committee may, in its sole discretion,
cancel any or all outstanding Awards and pay to the holders of any such Awards
that are otherwise vested, in cash, the value of such Awards based upon the
price per share of capital stock received or to be received by other
shareholders of the Company in such event, provided that if and to the extent
required by U.S. Internal Revenue Code Section 409A and applicable guidance
thereunder this sentence shall not apply to any award that is subject to U.S.
internal Revenue Code Section 409A if the cancellation would result in a
violation of Section 409A.

**22.6                
No Limitation.** The grant of any Awards under this Plan will in no way
affect the Company's right to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, amalgamate, reorganize,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets or engage in any like transaction.

**22.7                
No Fractional Shares.** No adjustment or substitution provided for in
this Article 22 will require the Company to issue a fractional share in respect
of any or other Awards and the total substitution or adjustment with respect to
each Award will be limited accordingly.

**23.0                
MITIGATION OF EXCISE TAX**

**Parachute Payments.** If
any payment or right accruing to a Participant under this Plan (without the
application of this Article 23), either alone or together with other payments or
rights accruing to the Participant from the Company or an Affiliate ("Total
Payments"), would constitute a "parachute payment" (as defined in Section 280G
of the Code and regulations thereunder) such payment or right shall be reduced,
either under this Plan or under any other agreement providing for such other
payments or rights, to the largest amount or greatest right that will result in
no portion of the amount payable or right accruing under the Plan being subject
to an excise tax under Section 4999 of the Code or being disallowed as a
deduction under Section 280G of the Code. The determination of whether any
reduction in the rights or payments under this Plan is to apply shall be made by
the Company. The Participant shall cooperate in good faith with the Company in
making such determination and providing any necessary information for this
purpose.

**24.0                
GENERAL**

**24.1                
No Rights as Shareholder.** Nothing herein or otherwise shall be
construed so as to confer on any Participant any rights as a shareholder of the
Company with respect to any Common Shares reserved for the purpose of any Award.

**24.2                
No Effect on Employment.** Nothing in this Plan or any Award Agreement
will confer upon any Participant any right to continue in the employ of or under
contract with the Company or its Affiliates or affect in any way the right of
the Company or any such Affiliate to

30

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terminate his or her employment at any time or terminate his or
her consulting contract, nor will anything in this Plan or any Award Agreement
be deemed or construed to constitute an agreement, or an expression of intent,
on the part of the Company or any such Affiliate to extend the employment of any
Participant beyond the time that he or she would normally be retired pursuant to
the provisions of any present or future retirement plan of the Company or its
Affiliates or any present or future retirement policy of the Company or its
Affiliates, or beyond the time at which he or she would otherwise be retired
pursuant to the provisions of any contract of employment with the Company or its
Affiliates. Neither any period of notice nor any payment in lieu thereof upon
termination of employment shall be considered as extending the period of
employment for the purposes of the Plan.

**24.3                
No Fettering of Directors' Discretion**. Nothing contained in this Plan
will restrict or limit or be deemed to restrict or limit the right or power of
the Board of Directors in connection with any allotment and issuance of Common
Shares which are not allotted and issued under this Plan including, without
limitation, with respect to other compensation arrangements.

**24.4                
Applicable Law.** The Plan and any Award Agreement granted hereunder will
be governed, construed and administered in accordance with the laws of the
Province of British Columbia and the laws of Canada applicable therein.

**24.5                
Interpretation.** References herein to any gender include all genders and
to the plural includes the singular and vice versa. The division of this Plan
into Sections and Articles and the insertion of headings are for convenience of
reference only and will not affect the construction or interpretation of this
Plan.

The foregoing Plan was adopted by the directors of the Company
on the 25th day of May, 2007 and confirmed by the shareholders of the
Corporation on the 27th day of June, 2007.

| | **POLYMENT MINING CORP.**
| | -------------------------
| |                          
| |                          
| | Per:                     
| |                          
| |                          

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SCHEDULE A - FORM OF OPTION AGREEMENT

POLYMET MINING CORP.POLYMET 2007 OMNIBUS SHARE
COMPENSATION PLANOPTION AGREEMENT

This Option Agreement is entered into between PolyMet Mining
Corp. (the "Company") and the Participant named below pursuant to the PolyMet
2007 Omnibus Share Compensation Plan (the "Plan"), a copy of which is attached
hereto, and confirms that:

|1. | on •, 200• (the "Grant Date");                                                                                                                               
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                              
|2. | • (the "Participant");                                                                                                                                       
|   |                                                                                                                                                              
|3. | was granted an option (the "Option") to purchase •
        Common Shares (the "Optioned Shares") of the Company, exercisable from
        time to time as to:
|   |                                                                                                                                                              
|   | •; and                                                                                                                                                       
|   |                                                                                                                                                              
|   | •; [NOTE: or other exercise criteria, as appropriate.]                                                                                                       
|   |                                                                                                                                                              
|4. | at a price (the "Exercise Price") of $• per Common
        Share; and                                                                                        
|   |                                                                                                                                                              
|5. | for a term expiring at 5:00 p.m., Vancouver time, on
        • , 201• (the "Expiry Date");                                                                   
|   |                                                                                                                                                              
|   | on the terms and subject to the conditions set out in the
      Plan.                                                                                        

By signing this agreement, the Participant acknowledges that he
or she has read and understands the terms of the Plan and accepts the Option in
accordance with the terms of the Plan.

IN WITNESS WHEREOF the Company and the Participant have executed
  this Option Agreement as of • , 200•.

**PolyMet Mining Corp.**

By:
__________________________________

By:
__________________________________

**By the
Participant**

_____________________________________Name of Participant

______________________________________Signature of Participant

32

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SCHEDULE B - FORM OF NOTICE OF EXERCISE

POLYMET MINING CORP.POLYMET 2007 OMNIBUS SHARE
COMPENSATION PLAN NOTICE OF EXERCISE

TO:     PolyMet Mining Corp.

Attention: The Corporate Secretary

Reference is made to the Option Agreement made as of •,
  200•, between PolyMet Mining Corp. (the "Company") and the Participant
  named below. The Participant hereby exercises the Option to purchase Common
  Shares of the Company as follows:

|Number of Optioned Shares for which Option being exercised: |  
|----------------------------------------------------------- | -
|                                                            |  
|Exercise Price per Common Share:                            | $
|                                                            |  
|Total Exercise Price:                                       | $

Check here for exercise of the Option if a cheque (which need
not be a certified cheque) or bank draft is tendered with this Notice of
Exercise:

|Address of Participant as it is to appear on the register
      of Common Shares of the | 
|--------------------------------------------------------------------------------------- | 
|Company and to which a certificate representing the Common
      Shares being           | 
|purchased is to be delivered                                                            | 
|                                                                                        | 

Dated •, 200•.

____________________________________Name of Participant

____________________________________Signature of Participant

A Participant may elect a "cashless" exercise in accordance
with the term of the Option Agreement. If the Participant elects a "cashless"
exercise, the Participant must make advance arrangements with the Company by
contacting the Corporate Secretary of the Company and carrying our the terms of
those arrangements.

33

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