Sphere 3D Corp. - Exhibit 4.2 - Filed by newsfilecorp.com






EXHIBIT 4.2

SPHERE 3D CORP. 

EMPLOYEE STOCK PURCHASE PLAN 

As Amended November 1, 2017

	1. 	
      PURPOSE

	 	 
		
      The purpose of this Plan is to assist Eligible Employees
      in acquiring a stock ownership interest in the Corporation, at a favorable
      price and upon favorable terms, pursuant to a plan which is intended to
      qualify as an “employee stock purchase plan” under Section 423 of the
      Code. This Plan is also intended to encourage Eligible Employees to remain
      in the employ of the Corporation or a Participating Subsidiary and to
      provide them with an additional incentive to advance the best interests of
      the Corporation.

	 	 
	2. 	
      DEFINITIONS

	 	 
		
      Capitalized terms used herein which are not otherwise
      defined shall have the following meanings.



“Account” means the bookkeeping
account maintained by the Corporation, or by a recordkeeper on behalf of the
Corporation, for a Participant pursuant to Section 7(a). 

“Board” means the Board of
Directors of the Corporation. 

“Code” means the U.S. Internal
Revenue Code of 1986, as amended from time to time. 

“Commission” means the U.S.
Securities and Exchange Commission. 

“Committee” means the committee
appointed by the Board to administer this Plan pursuant to Section 12. 

“Common Shares” means the
common shares, no par value, of the Corporation, and such other securities or
property as may become the subject of Options pursuant to an adjustment made
under Section 17. 

“Compensation” means an
Eligible Employee’s regular earnings, commissions and cash bonuses. Compensation
also includes any amounts contributed as salary reduction contributions to a
plan qualifying under Section 401(k), 125 or 129 of the Code. Any other form of
remuneration is excluded from Compensation, including (but not limited to) the
following: relocation or housing allowances, share option exercises, share
appreciation right payments, the vesting or grant of restricted shares, the
payment of share units, performance awards, auto allowances, tuition
reimbursement, perquisites, non-cash compensation and other forms of imputed
income. Notwithstanding the foregoing, Compensation shall not include any
amounts deferred under or paid from any nonqualified deferred compensation plan
maintained by the Corporation or any Participating Subsidiary. 

“Contributions” means the
bookkeeping amounts credited to the Account of a Participant pursuant to this
Plan, equal in amount to the amount of Compensation that the Participant has
elected to contribute for the purchase of Common Shares under and in accordance
with this Plan. 

“Corporation” means Sphere 3D
Corp., a corporation incorporated under the laws of the Province of Ontario, and
its successors. 

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“Date of Termination” means the
Eligible Employee’s last day of actual and active employment with the
Corporation or any of its Subsidiaries. For greater certainty, no period of
notice of termination, if any, or payment in lieu of notice that is given or
ought to have been given pursuant to the Eligible Employee’s applicable
employment agreement or at law that follows or is in respect of a period after
the last date of actual and active employment will be considered as extending
Eligible Employee’s period of employment for purposes of determining the
Eligible Employee’s entitlement under this Plan. 

“Effective Date” means the date
on which this Plan is initially approved by the shareholders of the Corporation.


“Eligible Employee” means any
employee of the Corporation, or of any Subsidiary which has been designated in
writing by the Committee as a “Participating Subsidiary.” Notwithstanding the
foregoing, “Eligible Employee” shall not include any employee: 

	 	(a) 	
      whose customary employment is for five (5) months or less
      in a calendar year; or

	 	 	 
	 	(b) 	
      whose customary employment is for twenty (20) hours or
      less per week.



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

“Fair Market Value” on any date
means: 

	 	(a) 	
      if the Common Shares are listed or admitted to trade on a
      national securities exchange, the closing price of the Common Shares on
      such date on the principal national securities exchange on which the
      Common Shares are so listed or admitted to trade, or, if there is no
      trading of the Common Shares on such date, then the closing price of a
      share of Common Shares on such exchange on the next preceding date on
      which there was trading in the Common Shares;

	 	 	 
	 	(b) 	
      in the absence of exchange data required to determine
      Fair Market Value pursuant to the foregoing, the value as established by
      the Committee as of the relevant time for purposes of this
  Plan.



“Grant Date” means, with
respect to an Offering Period, the first day of that Offering Period. 

“Individual Limit” has the
meaning given to such term in Section 4(b). 

“New Purchase Date” has the
meaning given to such term in Section 18. 

“Offering Period” means the six
(6) consecutive month period commencing on each Grant Date; provided, however,
that the Committee may declare, as it deems appropriate and in advance of the
applicable Offering Period, a shorter (not to be less than three months)
Offering Period or a longer (not to exceed 27 months) Offering Period, and may
provide for such Offering Period to be divided into one or more “purchase
periods.” In the event that an Offering Period consists of more than one
purchase period, the Committee may provide in advance of that Offering Period
that if the Fair Market Value of the Ordinary Shares on the last day of any such
purchase period is lower than the Fair Market Value of the Common Shares on the
Grant Date of that Offering Period, that Offering Period will terminate at the
end of such purchase period and that each Participant in such terminated
Offering Period will be automatically enrolled in a new Offering Period that
commences immediately thereafter. 

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“Option” means the stock option
to acquire Common Shares granted to a Participant pursuant to Section 8. 

“Option Price” means the per
share exercise price of an Option as determined in accordance with Section 8(b).


“Parent” means any corporation
(other than the Corporation) in an unbroken chain of corporations ending with
the Corporation in which each corporation (other than the Corporation) owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one or more of the other corporations in the chain. 

“Participant” means an Eligible
Employee who has elected to participate in this Plan and who has filed a valid
and effective Subscription Agreement to make Contributions pursuant to Section
6. 

“Participating Subsidiary”
shall have the meaning given to such term in Section 19(c). 

“Plan” means this Sphere 3D
Corp. Employee Stock Purchase Plan, as it may be amended or restated from time
to time. 

“Purchase Date” means, with
respect to an Offering Period, the last day of that Offering Period. 

“Subscription Agreement ” means
the written agreement filed by an Eligible Employee with the Corporation
pursuant to Section 6 to participate in this Plan. 

“Subsidiary” means any
corporation (other than the Corporation) in an unbroken chain of corporations
(beginning with the Corporation) in which each corporation (other than the last
corporation) owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one or more of the other corporations in the
chain, subject to any applicable laws that may require a different
interpretation in respect of matters contemplated herein. 

	3. 	
      ELIGIBILITY

	 	 
		
      Any person employed as an Eligible Employee as of the
      beginning of any given Offering Period shall be eligible to participate in
      such Offering Period, subject to the Eligible Employee satisfying the
      requirements of Section 6.

	 	 
	4. 	
      STOCK SUBJECT TO THIS PLAN; SHARE
    LIMITATIONS




	 	(a) 	
      Aggregate Share Limit. Subject to the provisions
      of Section 17, the capital stock that may be delivered under this Plan
      will be the authorized but unissued Common Shares. The maximum number of
      Common Shares that may be delivered pursuant to Options granted under this
      Plan is 300,000 Common Shares, subject to adjustments pursuant to Section
      17.

	 	 	 
	 	(b) 	
      Individual Share Limit. The maximum number of
      Common Shares that any one individual may acquire upon exercise of his or
      her Option with respect to any one Offering Period is 300, subject to
      adjustments pursuant to Section 17 (the “Individual Limit”). The
      Committee may amend the Individual Limit as it applies to any particular Offering
      Period, effective no earlier than the first day of such Offering Period
      without shareholder approval.



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	 	(c) 	
      Shares Not Actually Delivered. Shares that are
      subject to or underlie Options, which for any reason are cancelled or
      terminated, are forfeited, fail to vest, or for any other reason are not
      paid or delivered under this Plan shall again, except to the extent
      prohibited by law, be available for subsequent Options under this
    Plan.




	5. 	
      OFFERING PERIODS

	 	 
		
      During the term of this Plan, the Corporation will grant
      Options to purchase Common Shares in each Offering Period to all
      Participants in that Offering Period. The Grant Date and Purchase Date of
      the initial Offering Period after the Effective Date will be established
      by the Committee in advance of the Offering Period. Unless otherwise
      specified in advance by the Committee, each Offering Period thereafter
      will be of approximately six (6) months duration, with the first such
      Offering Period commencing immediately after the Purchase Date of the
      initial Offering Period. Each Option shall become effective on the Grant
      Date of the Offering Period with respect to which the Option is granted.
      The term of each Option shall be the duration of the related Offering
      Period and shall end on the Purchase Date of that Offering Period.
      Offering Periods shall continue until this Plan is terminated in
      accordance with Section 18 or 19, or, if earlier, until no Common Shares
      remain available for Options pursuant to Section 4.

	 	 
	6. 	
      PARTICIPATION




	 	(a) 	
      Enrollment. An Eligible Employee may become a
      Participant in this Plan by completing a Subscription Agreement on a form
      approved by and in a manner prescribed by the Committee (or its delegate).
      To become effective, a Subscription Agreement must be signed by the
      Eligible Employee and be filed with the Corporation at the time specified
      by the Committee, but in all cases prior to the start of the Offering
      Period with respect to which it is to become effective, and must set forth
      a whole percentage (or, if the Committee so provides, a stated amount) of
      the Eligible Employee’s Compensation to be credited to the Participant’s
      Account as Contributions each pay period.

	 	 	 
	 	(b) 	
      Contribution Limits. Notwithstanding the
      foregoing, a Participant may not elect to contribute less than one percent
      (1%) nor more than fifteen percent (15%) (or such other limit as the
      Committee may establish prior to the start of the applicable Offering
      Period) of his or her Compensation during any one pay period as Plan
      Contributions. The Committee also may prescribe other limits, rules or
      procedures for Contributions.

	 	 	 
	 	(c) 	
      Content and Duration of Subscription Agreements.
      Subscription Agreements shall contain the Eligible Employee’s
      authorization and consent to the Corporation’s withholding from his or her
      Compensation the amount of his or her Contributions. An Eligible
      Employee’s Subscription Agreement, and his or her participation election
      and withholding consent thereon, shall remain valid for all Offering
      Periods until (1) the Eligible Employee’s participation terminates
      pursuant to the terms hereof, (2) the Eligible Employee files a new
      Subscription Agreement that becomes effective, or (3) the Committee
      requires that a new Subscription Agreement be executed and filed with the
      Corporation.




	7. 	
      METHOD OF PAYMENT OF
  CONTRIBUTIONS




	 	(a) 	
      Participation Accounts. The Corporation shall
      maintain on its books, or cause to be maintained by a recordkeeper, an
      Account in the name of each Participant. The percentage of Compensation
      elected to be applied as Contributions by a Participant shall be deducted
      from such Participant’s Compensation on each payday during the period for
      payroll deductions set forth below and such payroll deductions shall be credited to that
      Participant’s Account as soon as administratively practicable after such
      date. A Participant may not make any additional payments to his or her
      Account. A Participant’s Account shall be reduced by any amounts used to
      pay the Option Price of shares acquired, or by any other amounts
      distributed pursuant to the terms hereof.



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	 	(b) 	
      Payroll Deductions. Subject to such other rules as
      the Committee may adopt, payroll deductions with respect to an Offering
      Period shall commence on the first pay day which coincides with or
      immediately follows the applicable Grant Date and shall end on the last
      pay day which coincides with or immediately precedes the applicable
      Purchase Date, unless sooner terminated by the Participant as provided in
      Section 7(d) or until his or her participation terminates pursuant to
      Section 11.

	 	 	 
	 	(c) 	
      Changes in Contribution Elections for Next Offering
      Period. A Participant may discontinue, increase, or decrease the level
      of his or her Contributions (within the Plan limits) by completing and
      filing with the Corporation, on such terms as the Committee (or its
      delegate) may prescribe, a new Subscription Agreement which indicates such
      election. Subject to any other timing requirements that the Committee may
      impose, an election pursuant to this Section 7(c) shall be effective with
      the first Offering Period that commences after the Corporation’s receipt
      of such election, provided that a participant may, on one occasion only
      during an Offering Period, elect to decrease (but not increase) the level
      of his or her Contributions (subject to Section 6(b) by filing a new
      Subscription Agreement with the Corporation indicating such election,
      which election shall be effective as soon as administratively practicable
      following its receipt by the Corporation. Except as contemplated by the
      foregoing proviso and Section 7(d) and 7(e), changes in Contribution
      levels may not take effect during an Offering Period. Other modifications
      or suspensions of Subscription Agreements are not permitted.

	 	 	 
	 	(d) 	
      Withdrawal During an Offering Period. A
      Participant may terminate his or her Contributions during an Offering
      Period (and receive a distribution of the balance of his or her Account in
      accordance with Section 11) by completing and filing with the Corporation,
      in such form and on such terms as the Committee (or its delegate) may
      prescribe, a written withdrawal form which shall be signed by the
      Participant. Such termination shall be effective as soon as
      administratively practicable after its receipt by the Corporation. A
      withdrawal election pursuant to this Section 7(d) shall only be effective
      for a particular Offering Period, however, if it is received by the
      Corporation prior to the Purchase Date of that Offering Period (or such
      earlier deadline that the Committee may reasonably require to process the
      withdrawal prior to the applicable Purchase Date). Partial withdrawals of
      Accounts are not permitted.

	 	 	 
	 	(e) 	
      Discontinuance of Contributions During an Offering
      Period. A Participant may discontinue his or her Contributions at any
      time during an Offering Period by completing and filing with the
      Corporation, on such terms as the Committee (or its delegate) may
      prescribe, a new Subscription Agreement which indicates such election. If
      a Participant elects to discontinue his or her Contributions pursuant to
      this Section 7(e), the Contributions previously credited to the
      Participant’s Account for that Offering Period shall be used to exercise
      the Participant’s Option as of the applicable Purchase Date in accordance
      with Section 9 (unless the Participant makes a timely withdrawal election
      in accordance with Section 7(d), in which case such Participant’s Account
      shall be paid to him or her in cash in accordance with Section
    11(a)).




	8. 	
      GRANT OF OPTION




	 	(a) 	
      Grant Date; Number of Shares. On each Grant Date,
      each Eligible Employee who is a Participant during that Offering Period
      shall be granted an Option to purchase a number of Common Shares. The
      Option shall be exercised on the Purchase Date for that Offering Period.
      The number of Common Shares to be purchased upon exercise of the Option
      on the Purchase Date shall be determined by dividing the Participant’s
      Account balance as of that Purchase Date by the Option Price, subject to
      the limits of Section 8(c).



5 





	 	(b) 	
      Option Price. The Option Price per share of the
      shares subject to an Option for an Offering Period shall be the lesser
      of: (i) 85% of the Fair Market Value of a Share on the Grant Date of
      the Offering Period; or (ii) 85% of the Fair Market Value of a Share on
      the Purchase Date of that Offering Period; provided, however, that the
      Committee may provide prior to the start of any Offering Period that the
      Option Price for that Offering Period shall be determined by applying a
      discount amount (not to exceed 15%) to either (1) the Fair Market Value of
      Common Shares on the Grant Date of the Offering Period, or (2) the Fair
      Market Value of Common Shares on the Purchase Date of that Offering
      Period, or (3) the lesser of the Fair Market Value of Common Shares on the
      Grant Date of the Offering Period or the Fair Market Value of Common
      Shares on the Purchase Date of that Offering Period.

	 	 	 
	 	(c) 	
      Limits on Share Purchases. Notwithstanding
      anything else contained herein, the maximum number of shares subject to an
      Option for an Offering Period shall be subject to the Individual Limit in
      effect on the Grant Date of that Offering Period (subject to adjustment
      pursuant to Section 17) and any person who is otherwise an Eligible
      Employee shall not be granted any Option (or any Option granted shall be
      subject to compliance with the following limitations) or other right to
      purchase shares under this Plan to the extent:




	 	(1) 	
      it would, if exercised, cause the person to own stock
      (within the meaning of Section 423(b)(3) of the Code) possessing 5% or
      more of the total combined voting power or value of all classes of stock
      of the Corporation, or of any Parent, or of any Subsidiary; or

	 	 	 
	 	(2) 	
      such Option causes such individual to have rights to
      purchase stock under this Plan and any other plan of the Corporation, any
      Parent, or any Subsidiary which is qualified under Section 423 of the Code
      which accrue at a rate which exceeds $25,000 of the fair market value of
      the stock of the Corporation, of any Parent, or of any Subsidiary
      (determined at the time the right to purchase such stock is granted,
      before giving effect to any discounted purchase price under any such plan)
      for each calendar year in which such right is outstanding at any
    time.



For purposes of the foregoing, a right
to purchase stock accrues when it first become exercisable during the calendar
year. In determining whether the stock ownership of an Eligible Employee equals
or exceeds the 5% limit set forth above, the rules of Section 424(d) of the Code
(relating to attribution of stock ownership) shall apply, and stock which the
Eligible Employee may purchase under outstanding options shall be treated as
stock owned by the Eligible Employee. 

	9. 	
      EXERCISE OF OPTION




	 	(a) 	
      Purchase of Shares. Unless a Participant withdraws
      pursuant to Section 7(d) or the Participant’s Plan participation is
      terminated as provided in Section 11, his or her Option for the purchase
      of shares shall be exercised automatically on the Purchase Date for that
      Offering Period, without any further action on the Participant’s part, and
      the maximum number of whole Common Shares subject to such Option (subject
      to the limits of Section 8(c)) shall be purchased at the Option Price with
      the balance of such Participant’s Account.

	 	 	 
	 	(b) 	
      Account Balance Remaining After Purchase. If any
      amount which is not sufficient to purchase a whole share remains in a
      Participant’s Account after the exercise of his or her Option on
  the Purchase Date: (1) such amount shall
be credited to such Participant’s Account for the next Offering Period, if he or
she is then a Participant; or (2) if such Participant is not a Participant in
the next Offering Period, or if the Committee so elects, such amount shall be
refunded to such Participant as soon as administratively practicable after such
date. If the share limit of Section 4(a) is reached, any amount that remains in
a Participant’s Account after the exercise of his or her Option on the Purchase
Date to purchase the number of shares that he or she is allocated shall be
refunded to the Participant as soon as administratively practicable after such
date. If any amount which exceeds the limits of Section 8(c) remains in a
Participant’s Account after the exercise of his or her Option on the Purchase
Date, such amount shall be refunded to the Participant as soon as
administratively practicable after such date. The Participant’s Account shall be
reduced on a dollar-for-dollar basis by any amount used to purchase shares
hereunder or any amount refunded to the Participant. 



6 




	 	
       
	10. 	
      DELIVERY OF SHARES

	 	 
		
      As soon as administratively practicable after the
      Purchase Date, the Corporation shall, in its discretion, either deliver to
      each Participant a certificate representing the Common Shares purchased
      upon exercise of his or her Option, provide for the crediting of such
      shares in book entry form in the name of the Participant, or provide for
      an alternative arrangement for the delivery of such shares to a broker or
      recordkeeping service for the benefit of the Participant. In the event the
      Corporation is required to obtain from any commission or agency authority
      to issue any such certificate or otherwise deliver such shares, the
      Corporation will seek to obtain such authority. If the Corporation is
      unable to obtain from any such commission or agency authority which
      counsel for the Corporation deems necessary for the lawful issuance of any
      such certificate or other delivery of such shares, or if for any other
      reason the Corporation cannot issue or deliver Common Shares and satisfy
      Section 21, the Corporation shall be relieved from liability to any
      Participant except that the Corporation shall return to each Participant
      to whom such shares cannot be issued or delivered the amount of the
      balance credited to his or her Account that would have otherwise been used
      for the purchase of such shares.

	 	 
	11. 	
      TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE
      STATUS




	 	(a) 	
      General. Except as provided in Section 11(b) below
      and subject to applicable law, if a Participant ceases to be an Eligible
      Employee for any reason (including, without limitation, due to the
      Participant’s death, disability, resignation or retirement, or due to a
      layoff or other termination of employment with or without cause), or if
      the Participant elects to withdraw from the Plan pursuant to Section 7(d),
      at any time prior to the last day of an Offering Period in which he or she
      participates, such Participant’s Account shall be paid to him or her (or,
      in the event of the Participant’s death, to the person or persons entitled
      thereto under Section 13) in cash, and such Participant’s Option and
      participation in the Plan shall automatically terminate as of the Date of
      Termination, or date of withdrawal, as applicable.

	 	 	 
	 	(b) 	
      Change in Eligible Status; Leave of Absence.
      Subject to applicable law, if a Participant (1) ceases to be an Eligible
      Employee during an Offering Period but remains an employee of the
      Corporation or a Subsidiary through the Purchase Date for that Offering
      Period (for example, and without limitation, due to a change in the
      Participant’s employer from the Corporation or a Participating Subsidiary
      to a non-Participating Subsidiary, if the Participant’s employer ceases to
      maintain the Plan as a Participating Subsidiary but otherwise continues as
      a Subsidiary, or if the Participant’s customary level of employment no
      longer satisfies the requirements set forth in the definition of Eligible
      Employee), or (2) during an Offering Period commences a sick leave,
      military leave, or other leave of absence approved by the Corporation or a
      Participating Subsidiary, and the leave meets the requirements of Treasury Regulation Section
      1.421-1(h)(2) and the Participant is an employee of the Corporation or a
      Subsidiary or on such leave as of the applicable Purchase Date, such
      Participant’s Contributions shall cease (subject to Section 7(d)), and the
      Contributions previously credited to the Participant’s Account for that
      Offering Period shall be used to exercise the Participant’s Option as of
      the applicable Purchase Date in accordance with Section 9 (unless the
      Participant makes a timely withdrawal election in accordance with Section
      7(d), in which case such Participant’s Account shall be paid to him or her
      in cash in accordance with Section 11(a)).



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	 	(c) 	
      Re-Enrollment. A Participant’s termination from
      Plan participation precludes the Participant from again participating in
      this Plan during that Offering Period. However, such termination shall not
      have any effect upon his or her ability to participate in any succeeding
      Offering Period, provided that the applicable eligibility and
      participation requirements are again then met. A Participant’s termination
      from Plan participation shall be deemed to be a revocation of that
      Participant’s Subscription Agreement and such Participant must file a new
      Subscription Agreement to resume Plan participation in any succeeding
      Offering Period.

	 	 	 
	 	(d) 	
      Change in Subsidiary Status. For purposes of this
      Plan, if a Subsidiary ceases to be a Subsidiary, each person employed by
      that Subsidiary will be deemed to have terminated employment for purposes
      of this Plan (and the Date of Termination for such person shall be the
      date that Subsidiary ceases to be a Subsidiary), unless the person
      continues as an employee of the Corporation or another
  Subsidiary.




	12. 	
      ADMINISTRATION




	 	(a) 	
      The Committee. The Board shall appoint the
      Committee, which shall be composed of not less than two members of the
      Board. The Board may, at any time, increase or decrease the number of
      members of the Committee, may remove from membership on the Committee all
      or any portion of its members, and may appoint such person or persons as
      it desires to fill any vacancy existing on the Committee, whether caused
      by removal, resignation, or otherwise. The Board may also, at any time,
      assume the administration of all or a part of this Plan (including when
      actions hereunder may only be taken by the Board under applicable laws),
      in which case references (or relevant references in the event the Board
      assumes the administration of only certain aspects of this Plan) to the
      “Committee” shall be deemed to be references to the Board. Action of the
      Committee with respect to this Plan shall be taken pursuant to a majority
      vote or by the unanimous written consent of its members, and shall be in
      the manner and on the terms authorized by the Board. No member of the
      Committee shall be entitled to act on or decide any matter relating solely
      to himself or herself or solely to any of his or her rights or benefits
      under this Plan.

	 	 	 
	 	(b) 	
      Powers and Duties of the Committee. Subject to the
      express provisions of this Plan, the Committee shall supervise and
      administer this Plan in the manner and on the terms authorized by the
      Board and all applicable laws. Subject to the instructions of the Board,
      the Committee shall have the full authority and discretion: (1) to
      construe and interpret this Plan and any agreements defining the rights
      and obligations of the Corporation, any Subsidiary, and Participants under
      this Plan; (2) to further define the terms used in this Plan; (3) to
      prescribe, amend and rescind rules and regulations relating to the
      administration of this Plan (including, without limitation, deadlines for
      making elections or for providing any notices contemplated by this Plan,
      which deadlines may be more restrictive than any deadlines otherwise
      contemplated by this Plan); and (4) to make all other determinations and
      take such other action as contemplated by this Plan or as may be necessary
      or advisable for the administration of this Plan or the effectuation of
      its purposes. Notwithstanding anything else contained in this Plan to the
      contrary, the Committee may also adopt rules, procedures, separate
      offerings or sub-plans applicable to particular Subsidiaries or
      locations, which sub-plans may be designed to be outside the scope
      of Section 423 of the Code and need not comply with the otherwise
      applicable provisions of this Plan.



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	 	(c) 	
      Decisions of the Committee are Binding. Any action
      taken by, or inaction of, the Corporation, any Subsidiary, the Board or
      the Committee relating or pursuant to this Plan and within its authority
      hereunder or under applicable law shall be within the absolute discretion
      of that entity or body and shall be conclusive and binding upon all
      persons.

	 	 	 
	 	(d) 	
      Indemnification. Neither the Board nor any
      Committee, nor any member thereof or person acting at the direction
      thereof, shall be liable for any act, omission, interpretation,
      construction or determination made in good faith in connection with this
      Plan, and all such persons shall be entitled to indemnification and
      reimbursement by the Corporation in respect of any claim, loss, damage or
      expense (including, without limitation, attorneys’ fees) arising or
      resulting therefrom to the fullest extent permitted by law and/or under
      any directors and officers liability insurance coverage that may be in
      effect from time to time.

	 	 	 
	 	(e) 	
      Reliance on Experts. In making any determination
      or in taking or not taking any action under this Plan, the Committee or
      the Board, as the case may be, may obtain and may rely upon the advice of
      experts, including professional advisors to the Corporation. To the
      fullest extent permitted by law, no director, officer or agent of the
      Corporation or any Participating Subsidiary shall be liable for any such
      action or determination taken or made or omitted in good faith.

	 	 	 
	 	(f) 	
      Delegation. The Committee may delegate
      ministerial, non-discretionary functions to individuals who are officers
      or employees of the Corporation or a
Subsidiary.




	13. 	
      DESIGNATION OF BENEFICIARY

	 	 
		
      If the Committee permits beneficiary designations with
      respect to this Plan, then each Participant may file, on a form and in a
      manner prescribed by the Committee (or its delegate), a written
      designation of a beneficiary who is to receive any shares or cash from or
      with respect to such Participant’s Account under this Plan in the event of
      such Participant’s death. If a Participant is married and the designated
      beneficiary is not solely his or her spouse, spousal consent shall be
      required for such designation to be effective unless it is established (to
      the satisfaction of the Committee or its delegate) that there is no spouse
      or that the spouse cannot be located. The Committee may rely on the last
      designation of a beneficiary filed by a Participant in accordance with
      this Plan. Beneficiary designations may be changed by the Participant (and
      his or her spouse, if required) at any time on forms provided and in the
      manner prescribed by the Committee (or its delegate).

	 	 
		
      If a Participant dies with no validly designated
      beneficiary under this Plan who is living at the time of such
      Participant’s death (or in the event the Committee does not permit
      beneficiary designations under this Plan), the Corporation shall deliver
      all shares and/or cash payable pursuant to the terms hereof to the
      executor or administrator of the estate of the Participant, or if no such
      executor or administrator has been appointed, the Corporation, in its
      discretion and to the extent permitted by applicable law, may deliver such
      shares and/or cash to the spouse or to any one or more dependents or
      relatives of the Participant, or if no spouse, dependent or relative is
      known to the Corporation, then to such other person as the Corporation may
      designate.

	 	 
		
      If a Participant’s death occurs before the end of an
      Offering Period or subsequent to the end of an Offering Period but prior
      to the delivery to him or her or for his or her benefit of any shares
      deliverable under the terms of this Plan, and the Corporation has notice
      of the Participant’s death, then any shares purchased for that Offering
      Period and any remaining balance of such Participant’s Account shall be
      paid to such beneficiary (or such other person entitled to such payment
      pursuant to this Section 13). If the Committee permits beneficiary designations with respect to this
      Plan, any such designation shall have no effect with respect to shares
      purchased and actually delivered (or credited, as the case may be) to or
      for the benefit of the Participant.



9 





	14. 	
      TRANSFERABILITY

	 	 
		
      Neither Contributions credited to a Participant’s Account
      nor any Options or rights with respect to the exercise of Options or right
      to receive shares under this Plan may be anticipated, alienated,
      encumbered, assigned, transferred, pledged or otherwise disposed of in any
      way (other than by will, the laws of descent and distribution, or as
      provided in Section 13) by the Participant. Any such attempt at
      anticipation, alienation, encumbrance, assignment, transfer, pledge or
      other disposition shall be without effect and all amounts shall be paid
      and all shares shall be delivered in accordance with the provisions of
      this Plan. Amounts payable or shares deliverable pursuant to this Plan
      shall be paid or delivered only to (or credited in the name of, as the
      case may be) the Participant or, in the event of the Participant’s death,
      the Participant’s beneficiary pursuant to Section 13 or to the
      administrator, executor or liquidator of the Participant’s
  estate.

	 	 
	15. 	
      USE OF FUNDS; INTEREST

	 	 
		
      All Contributions received or held by the Corporation
      under this Plan will be included in the general assets of the Corporation
      and may be used for any corporate purpose. Notwithstanding anything else
      contained herein to the contrary, no interest will be paid to any
      Participant or credited to his or her Account under this Plan (in respect
      of Account balances, refunds of Account balances, or otherwise). Amounts
      payable under this Plan shall be payable in Common Shares or from the
      general assets of the Corporation and, except for any shares that may be
      reserved on the books of the Corporation for issuance with respect to this
      Plan, no special or separate reserve, fund or deposit shall be made to
      assure payment of amounts that may be due with respect to this
  Plan.

	 	 
	16. 	
      REPORTS

	 	 
		
      Statements shall be provided (either electronically or in
      written form, as the Committee may provide from time to time) to
      Participants as soon as administratively practicable following each
      Purchase Date. Each Participant’s statement shall set forth, as of such
      Purchase Date, that Participant’s Account balance immediately prior to the
      exercise of his or her Option, the Option Price, the number of whole
      shares purchased and his or her remaining Account balance, if
  any.

	 	 
	17. 	
      ADJUSTMENTS OF AND CHANGES IN THE STOCK

	 	 
		
      Upon or in contemplation of any reclassification,
      recapitalization, stock split (including a stock split in the form of a
      stock dividend) or reverse stock split; any recapitalization, merger,
      amalgamation, combination, consolidation, conversion or other
      reorganization; any spin-off, split-up, or any similar extraordinary
      dividend distribution in respect of the Common Shares (whether in the form
      of securities or property); any exchange of Common Shares or other
      securities of the Corporation, or any similar, unusual or extraordinary
      corporate transaction in respect of the Common Shares; or a sale of
      substantially all the assets of the Corporation as an entirety occurs;
      then the Committee shall equitably and proportionately adjust (1) the
      number and type of shares or the number and type of other securities that
      thereafter may be made the subject of Options (including the specific
      maxima and numbers of shares set forth elsewhere in this Plan), (2) the
      number, amount and type of shares (or other securities or property)
      subject to any or all outstanding Options, (3) the Option Price of any or
      all outstanding Options, and/or (4) the securities, cash or other property
      deliverable upon exercise of any outstanding Options, in each case to the
      extent necessary to preserve (but not increase) the level of incentives
      intended by this Plan and the then-outstanding
Options.



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      Upon the occurrence of any event described in the
      preceding paragraph, or any other event in which the Corporation does not
      survive (or does not survive as a public company in respect of its Common
      Shares); then the Committee may make provision for a cash payment or for
      the substitution or exchange of any or all outstanding Options for cash,
      securities or property to be delivered to the holders of any or all
      outstanding Options based upon the distribution or consideration payable
      to holders of the Common Shares upon or in respect of such
event.

	 	 
		
      The Committee may adopt such valuation methodologies for
      outstanding Options as it deems reasonable in the event of a cash or
      property settlement and, without limitation on other methodologies, may
      base such settlement solely upon the excess (if any) of the amount payable
      upon or in respect of such event over the Option Price of the
    Option.

	 	 
		
      In any of such events, the Committee may take such action
      sufficiently prior to such event to the extent that the Committee deems
      the action necessary to permit the Participant to realize the benefits
      intended to be conveyed with respect to the underlying shares in the same
      manner as is or will be available to shareholders generally.

	 	 
	18. 	
      POSSIBLE EARLY TERMINATION OF PLAN AND
    OPTIONS

	 	 
		
      Upon a dissolution or liquidation of the Corporation, or
      any other event described in Section 17 that the Corporation does not
      survive or does not survive as a publicly-traded company in respect of its
      Common Shares, as the case may be, and the Committee does not make
      provision for a cash payment or for the substitution or exchange of
      outstanding Options in accordance with Section 17, then any Offering
      Period then in progress shall be shortened and a new Purchase Date shall
      be established by the Committee (the “New Purchase Date”), as of
      which date the Plan and any Offering Period then in progress will
      terminate. The New Purchase Date shall be on or before the date of the
      consummation of the transaction and the Committee shall notify each
      Participant in writing at least ten (10) days prior to the New Purchase
      Date that the Purchase Date for his or her outstanding Option has been
      changed to the New Purchase Date and that his or her Option will be
      exercised automatically on the New Purchase Date, unless prior to such
      date he or she has withdrawn from the Offering Period in accordance with
      Section 7(d). The Option Price on the New Purchase Date shall be
      determined as provided in Section 8(b), and, if applicable, the New
      Purchase Date shall be treated as the “Purchase Date” for purposes of
      determining such Option Price.

	 	 
	19. 	
      TERM OF PLAN; AMENDMENT OR
  TERMINATION




	 	(a) 	
      Effective Date; Termination. Subject to Section
      19(b), this Plan shall become effective as of the Effective Date. No new
      Offering Periods shall commence on or after the tenth (10th)
      anniversary of the Effective Date, and this Plan shall terminate as of the
      Purchase Date on or immediately following such date unless sooner
      terminated pursuant to Section 18 or this Section 19. In the event that
      during a particular Offering Period all of the Common Shares made
      available under this Plan are subscribed prior to the expiration of this
      Plan, this Plan and all outstanding Options hereunder shall terminate at
      the end of that Offering Period and the shares available shall be
      allocated for purchase by Participants in that Offering Period on a
      pro-rata basis determined with respect to Participants’ Account
      balances.

	 	 	 
	 	(b) 	
      Board Amendment Authority. The Board may, at any
      time, terminate or, from time to time, amend, modify or suspend this Plan,
      in whole or in part and without notice. Shareholder approval for any
      amendment or modification shall not be required, except to the extent
      required by law or applicable stock exchange rules, or required under
      Section 423 of the Code in order to preserve the intended tax consequences
      of this Plan. No Options may be granted during any suspension of
    this



11 





	 		
      Plan or after the termination of this Plan, but the
      Committee will retain jurisdiction as to Options then outstanding in
      accordance with the terms of this Plan. No amendment, modification, or
      termination pursuant to this Section 19(b) shall, without written consent
      of the Participant, affect in any manner materially adverse to the
      Participant any rights or benefits of such Participant or obligations of
      the Corporation under any Option granted under this Plan prior to the
      effective date of such change. Changes contemplated by Section 17 or
      Section 18 shall not be deemed to constitute changes or amendments
      requiring Participant consent.

	 	 	 
	 	(c) 	
      Certain Additional Committee Authority.
      Notwithstanding the amendment provisions of Section 19(b) and without
      limiting the Board’s authority thereunder and without limiting the
      Committee’s authority pursuant to any other provision of this Plan, the
      Committee shall have the right (1) to designate from time to time the
      Subsidiaries whose employees may be eligible to participate in this Plan
      (including, without limitation, any Subsidiary that may first become such
      after the date shareholders first approve this Plan) (each a
      “Participating Subsidiary”), and (2) to change the service and
      other qualification requirements set forth under the definition of
      Eligible Employee in Section 2 (subject to the requirements of Section
      423(b) of the Code and applicable rules and regulations thereunder). Any
      such change shall not take effect earlier than the first Offering Period
      that starts on or after the effective date of such change. Any such change
      shall not require shareholder approval.




	20. 	
      NOTICES

	 	 
		
      All notices or other communications by a Participant to
      the Corporation contemplated by this Plan shall be deemed to have been
      duly given when received in the form and manner specified by the Committee
      (or its delegate) at the location, or by the person, designated by the
      Committee (or its delegate) for that purpose.

	 	 
	21. 	
      CONDITIONS UPON ISSUANCE OF SHARES

	 	 
		
      This Plan, the granting of Options under this Plan and
      the offer, issuance and delivery of Common Shares are subject to
      compliance with all applicable federal, provincial and state laws, rules
      and regulations (including but not limited to provincial, state and
      federal securities laws) and to such approvals by any listing, regulatory
      or governmental authority as may, in the opinion of counsel for the
      Corporation, be necessary or advisable in connection therewith. The person
      acquiring any securities under this Plan will, if requested by the
      Corporation and as a condition precedent to the exercise of his or her
      Option, provide such assurances and representations to the Corporation as
      the Committee may deem necessary or desirable to assure compliance with
      all applicable legal requirements (including, if applicable, insider
      reporting requirements).

	 	 
	22. 	
      PLAN CONSTRUCTION




	 	(a) 	
      Section 16. It is the intent of the Corporation
      that transactions involving Options under this Plan (other than
      “Discretionary Transactions” as that term is defined in Rule 16b-3(b)(1)
      promulgated by the Commission under Section 16 of the Exchange Act, to the
      extent there are any Discretionary Transactions under this Plan), in the
      case of Participants who are or may be subject to the prohibitions of
      Section 16 of the Exchange Act, satisfy the requirements for exemption
      under Rule 16b-3(c) promulgated by the Commission under Section 16 of the
      Exchange Act to the maximum extent possible. Notwithstanding the
      foregoing, the Corporation shall have no liability to any Participant for
      Section 16 consequences of Options or other events with respect to this
      Plan.

	 	 	 
	 	(b) 	
      Section 423. Except as the Committee may expressly
      provide in the case of one or more sub-plans adopted pursuant to Section
      12(b), this Plan and Options are intended to qualify under Section 423 of
      the Code. Accordingly, all Participants are to have the same rights and
      privileges (within the meaning of Section 423(b)(5) of the Code and except as
      not required thereunder to qualify this Plan under Section 423) under this
      Plan, subject to differences in Compensation among Participants and
      subject to the Contribution and share limits of this Plan.



12 





	 	(c) 	
      Interpretation. If any provision of this Plan or
      of any Option would otherwise frustrate or conflict with the intents
      expressed above, that provision to the extent possible shall be
      interpreted so as to avoid such conflict. If the conflict remains
      irreconcilable, the Committee may disregard the provision if it concludes
      that to do so furthers the interest of the Corporation and is consistent
      with the purposes of this Plan as to such persons in the
    circumstances.




	23. 	
      EMPLOYEES’ RIGHTS




	 	(a) 	
      No Employment Rights. Nothing in this Plan (or in
      any Subscription Agreement or other document related to this Plan) will
      confer upon any Eligible Employee or Participant any right to continue in
      the employ or other service of the Corporation or any Subsidiary,
      constitute any contract or agreement of employment or other service or
      effect an employee’s status as an employee at will, nor shall interfere in
      any way with the right of the Corporation or any Subsidiary to change such
      person’s compensation or other benefits or to terminate his or her
      employment or other service, with or without cause. Nothing contained in
      this Section 23(a), however, is intended to adversely affect any express
      independent right of any such person under a separate employment or
      service contract other than a Subscription Agreement.

	 	 	 
	 	(b) 	
      No Rights to Assets of the Company. No Participant
      or other person will have any right, title or interest in any fund or in
      any specific asset (including Common Shares) of the Corporation or any
      Subsidiary by reason of any Option hereunder. Neither the provisions of
      this Plan (or of any Subscription Agreement or other document related to
      this Plan), nor the creation or adoption of this Plan, nor any action
      taken pursuant to the provisions of this Plan will create, or be construed
      to create, a trust of any kind or a fiduciary relationship between the
      Corporation or any Subsidiary and any Participant, Beneficiary or other
      person. To the extent that a Participant, Beneficiary or other person
      acquires a right to receive payment pursuant to this Plan, such right will
      be no greater than the right of any unsecured general creditor of the
      Corporation.

	 	 	 
	 	(c) 	
      No Shareholders Rights. A Participant will not be
      entitled to any privilege of stock ownership as to any Common Shares not
      actually delivered to and held of record by the Participant. No adjustment
      will be made for dividends or other rights as a shareholder for which a
      record date is prior to such date of delivery.




	24. 	
      MISCELLANEOUS




	 	(a) 	
      Governing Law. This Plan, the Options,
      Subscription Agreements and other documents related to this Plan shall be
      governed by, and construed in accordance with the laws of the state of
      California and the federal laws of the United States of America applicable
      thereto without recourse to their conflict of laws rules.

	 	 	 
	 	(b) 	
      Severability. If any provision shall be held by a
      court of competent jurisdiction to be invalid and unenforceable, the
      remaining provisions of this Plan shall continue in effect.

	 	 	 
	 	(c) 	
      Captions and Headings. Captions and headings are
      given to the sections of this Plan solely as a convenience to facilitate
      reference. Such captions and headings shall not be deemed in any way
      material or relevant to the construction of interpretation of this Plan or
      any provision hereof.

	 	 	 
	 	(d) 	
      No Effect on Other Plans or Corporate Authority.
      The adoption of this Plan shall not affect any other Corporation or
      Subsidiary compensation or incentive plans in effect. Nothing in this Plan
      will limit or be deemed to limit the authority of the Board or Committee
      (1) to establish any other forms of incentives or compensation for
      employees of the Corporation or any Subsidiary (with
or without reference to the Common
Shares), or (2) to grant or assume options (outside the scope of and in addition
to those contemplated by this Plan) in connection with any proper corporate
purpose; to the extent consistent with any other plan or authority. Benefits
received by a Participant under an Option granted pursuant to this Plan shall
not be deemed a part of the Participant’s compensation for purposes of the
determination of benefits under any other employee welfare or benefit plans or
arrangements, if any, provided by the Corporation or any Subsidiary, except
where the Committee or the Board (or the Board of Directors of the Subsidiary
that sponsors such plan or arrangement, as applicable) expressly otherwise
provides or authorizes in writing. 



13 




	 	
       
	25. 	
      TAX WITHHOLDING

	 	 
		
      Notwithstanding anything else contained in this Plan
      herein to the contrary, the Corporation may deduct from a Participant’s
      Account balance as of a Purchase Date, before the exercise of the
      Participant’s Option is given effect on such date, the amount of taxes (if
      any) which the Corporation reasonably determines it or any Subsidiary may
      be required to withhold with respect to such exercise. In such event, the
      maximum number of whole shares subject to such Option (subject to the
      other limits set forth in this Plan) shall be purchased at the Option
      Price with the balance of the Participant’s Account (after reduction for
      the tax withholding amount).

	 	 
		
      Should the Corporation for any reason be unable, or elect
      not to, satisfy its or any Subsidiary’s tax withholding obligations in the
      manner described in the preceding paragraph with respect to a
      Participant’s exercise of an Option, or should the Corporation or any
      Subsidiary reasonably determine that it or an affiliated entity has a tax
      withholding obligation with respect to a disposition of shares acquired
      pursuant to the exercise of an Option prior to satisfaction of the holding
      period requirements of Section 423 of the Code, the Corporation or
      Subsidiary, as the case may be, shall have the right at its option to (1)
      require the Participant to pay or provide for payment of the amount of any
      taxes which the Corporation or Subsidiary reasonably determines that it or
      any affiliate is required to withhold with respect to such event or (2)
      deduct from any amount otherwise payable to or for the account of the
      Participant the amount of any taxes which the Corporation or Subsidiary
      reasonably determines that it or any affiliate is required to withhold
      with respect to such event.

	 	 
	26. 	
      NOTICE OF SALE

	 	 
		
      Any person who has acquired shares under this Plan shall
      give prompt written notice to the Corporation of any sale or other
      transfer of the shares if such sale or transfer occurs (1) within the
      two-year period after the Grant Date of the Offering Period with respect
      to which such shares were acquired, or (2) within the twelve-month period
      after the Purchase Date of the Offering Period with respect to which such
      shares were acquired.



14