gdrfzforms8exhibit4_9112316.htm - Generated by SEC Publisher for SEC Filing



EXHIBIT 4.9


 


 


Gold
Reserve Inc. 


 


2012
Equity Incentive Plan


(as amended and restated hereby) 


SECTION
1.            ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE OF PLAN


Establishment. Gold Reserve Inc., an Alberta
corporation (the “Company”), the parent company of Gold Reserve Corporation, a
Montana corporation, has previously adopted and assumed the “1997 EQUITY
INCENTIVE PLAN” originally established by Gold Reserve Corporation, as amended
and restated (the “1997 Plan”). The Company has also previously adopted and
assumed the “VENEZUELAN EQUITY INCENTIVE PLAN” as amended and restated (the
“Venezuelan Plan”). The 1997 Plan and the Venezuelan Plan were both for the
employees, officers, directors and Consultants of the Company and its
Subsidiaries and both plans permit the grant of stock options, which are
exercisable for Class A Common Shares of the Company, as well as the grant of
restricted Class A Common Shares of the Company. 


Effective as of the 2012 Plan Approval Date
(defined below), all stock options issued and outstanding pursuant to the 1997
Plan and the Venezuelan Plan (collectively the “Retired Plans”) became governed
by this 2012 Equity Incentive Plan, as the same may be amended from time to
time (the “2012 Plan”) and the Retired Plans were terminated. The Company and
the Retired Plan participants have taken all steps necessary and made all
filings required to give effect to this termination. For certainty, after the
2012 Plan Approval Date, no new issuances pursuant to the Retired Plans will be
made and until such times as the shareholders of the Company decide otherwise,
all stock options will be issued pursuant to the terms of this 2012 Plan. 


Purpose. The purpose of the 2012 Plan, as amended and
restated hereby, is to advance the interests of the Company and its
Subsidiaries and promote continuity of management by encouraging and providing
employees, officers, directors and Consultants with the opportunity to acquire
an equity interest in the Company and to participate in the increase in
shareholder value as reflected in the growth in the price of the Stock and by
enabling the Company and its Subsidiaries to attract and retain the services of
employees, officers, directors, and Consultants upon whose judgment, interest,
skills, and special effort the successful conduct of its operations is largely
dependent.


Effective Date and Amendments. The 2012 Plan became
effective on May 17, 2012 (the “2012 Plan Approval Date”). The 2012 Plan was
approved by the shareholders of the Company on June 27, 2012 and re-approved on
June 11, 2013.  In 2014, the Board (as defined below) approved an amendment and
restatement of the 2012 Plan from a 10% “rolling” incentive stock option plan
to a “fixed” plan with the maximum number of shares issuable thereunder fixed
at 7,550,000, representing less than 10% of the issued and outstanding Class A
Common Shares of the Company at the relevant date.  On September 19, 2016, the
Board approved an amendment and restatement of the 2012 Plan to increase the
maximum number of shares issuable thereunder to 8,750,000, representing less than 10% of
the issued and outstanding Class A Common Shares of the Company at such date.
Such amendment was approved by the TSX Venture Exchange on October 6, 2016.


SECTION
2.            DEFINITIONS, CONSTRUCTION


Definitions. Whenever used herein,
the following terms shall have their respective meanings set forth below:


a)       
“Act”
means the Securities Act (Ontario), as amended.


b)      
“Associate”
has the meaning prescribed by the rules and policies of the Exchanges as they
apply to incentive stock option plans from time to time.


c)       
 “Award”
means, individually or collectively, a grant under the 2012 Plan or the Retired
Plans and as evidenced by an Option Agreement.  


d)      
“Blackout
Period” means any period during which a policy of the Company formally prevents
certain persons designated by such policy from trading in the securities of the
Company or otherwise prevents such persons from exercising their Options.


e)       
“Board”
means the board of directors of the Company.


f)       
“Business
Combination” shall have the meaning provided in Section 12.


g)      
“Change in Capitalization” means any increase or reduction in the
number of shares of Stock, or any change (including, but not limited to, a
change in value) in the shares of Stock or exchange of shares of Stock for a
different number or kind of shares or other securities of the Company or any
other corporation or other entity, by reason of a
reclassification, recapitalization, merger, consolidation, reorganization,
spin-off, split-up, issuance of warrants, rights or debentures, change in the
exercise price or conversion price under any warrants, rights or debenture as a
result of any event, stock dividend, stock split or reverse stock split,
extraordinary dividend, property dividend, combination or exchange of shares or
otherwise.



 



h)      
“Change in Control” shall have the meaning provided in Section 12.


i)        
“Code”
means the U.S. Internal Revenue Code of 1986, as amended.


j)        
“Committee”
means a committee of the Board designated by the Board to administer the 2012
Plan in accordance with the requirements of each Exchange, as applicable. If no
Committee is designated or is administering the 2012 Plan, all references to
the Committee herein shall refer to the Board.  While the Committee shall
administer the 2012 Plan generally as provided in Section 12, the Board shall
determine matters concerning Awards to directors and officers and references
herein to the Committee shall refer to the Board for matters relating to Awards
to directors and officers.


k)      
“Company”
means Gold Reserve Inc., an Alberta corporation, and any successors thereto.


l)        
“Consultant”
has the meaning prescribed by the rules and policies of the Exchanges as they
apply to incentive stock option plans from time to time.


m)    
“Disability”
means the inability to engage in any substantial activity by reason of any
medically determinable, physical or mental impairment that can be expected to
result in death or that has lasted or can be expected to last for a continuous
period of not less than 12 months.  


n)      
“Employment”
means the working relationship between the employee (creating a legally valid
employer-employee relationship), officers, directors or the Consultants and the
Company or Subsidiary, as applicable.


o)      
“Exchange”
means the TSX Venture Exchange or such other securities exchange on which the
Stock is listed from time to time. 


p)      
“Exchange
Act” means the U.S. Securities and Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.


q)      
“Fair
Market Value” means, as of any date, the value of the Stock determined as follows:


        (i) subject to any applicable Exchange rules, the
United States dollar equivalent of the last closing price of the Stock on the
Principal Market on the date of determination.  Notwithstanding the preceding,
at no point shall the Fair Market Value be below the minimum exercise price
prescribed by the rules and policies of the Exchanges; or


        (ii) in the absence of an established market for
the Stock, the Fair Market Value thereof on the date of determination shall be
determined in good faith by the Committee in accordance with applicable law.


r)       
“Incumbent
Board” shall have the meaning provided in Section 12.


s)       
“Insider”
has the meaning prescribed by the rules and policies of the Exchange as they
apply to incentive stock option plans from time to time.


t)       
“Investor
Relations Activities” shall have the meaning prescribed by the rules and
policies of the Exchange as they apply to incentive stock option plans from
time to time.


u)      
“Issuer”
means a company and its subsidiaries which have any of its securities listed
for trading on the TSX Venture Exchange and, as the context requires, any
applicant company seeking a listing of its securities on the TSX Venture
Exchange.


v)      
 “Management
Company Employee” shall have the meaning prescribed by the rules and policies
of the Exchange as they apply to incentive stock option plans from time to
time.


w)     
“Option”
means the right to purchase Stock at a stated price for a specified period of
time pursuant to the 2012 Plan or the Retired Plans.


x)      
“Option
Agreement” means the agreement evidencing the grant of an Option as described
in Section 6, including an Option Agreement entered into pursuant to the
provisions of the Retired Plans.


y)       
“Option
Price” means the price at which Stock may be purchased pursuant to an Option.


z)      
“Optionee”
means a person to whom an Option has been granted under the 2012 Plan or the
Retired Plans.


aa)    
“Outstanding
Voting Securities” has the meaning provided in Section 12.


bb)   “Participant” means an
employee, officer, director or a Consultant who has been granted and, at the
time of reference, holds an Option.





 

cc)     “Principal Market for
the Stock” means the exchange, automated quotation system or trading market on
which the majority of the Stock was traded over the last twelve-month period
prior to the date of determination. This includes the TSX Venture Exchange or
such other securities exchange on which the Stock is listed from time to time.


dd)   “Stock” means the Class
A Common Shares of the Company, no par value per share.


ee)    
“Subsidiary”
means any present or future subsidiary of the Company, as defined in the Securities
Act (Alberta).   


For all numbers, except when otherwise
indicated by the context, the singular shall include the plural, and the plural
shall include the singular.


SECTION
3. PARTICIPATION


Participation. Participants in the 2012 Plan shall be
selected by the Committee from among those officers, directors, employees, and
Consultants of the Company and its Subsidiaries who, in the opinion of the
Committee, are in a position to contribute materially to the Company’s
continued growth and development and to its long-term financial success. 


In the case of Options granted to employees,
Consultants or Management Company Employees, the Company and the Optionee will
represent in all Option Agreements that the Optionee is a bona fide employee,
Consultant or Management Company Employee, as the case may be.


SECTION
4. STOCK SUBJECT TO PLAN


Number. The total number of shares of Stock subject
to issuance under the 2012 Plan, under all security based compensation arrangements
including the 2012 Plan and the Retired Plans, shall not exceed 8,750,000.


In addition to other restrictions set out in
the 2012 Plan, the Company may not grant Options to any one employee in any 12
month period providing for the issuance of more than 4,377,307 shares of Stock,
subject to adjustment in the event of a Change in Capitalization as provided
below.


The Company must obtain disinterested
Stockholder approval of Options if:


a)       
the
2012 Plan, together with all of the Retired Plans grants, could result at any
time in:


(i)                  
the
number of Class A Common Shares reserved for issuance under Options granted to
Insiders exceeding 10% of the issued shares;


(ii)                
the
grant to Insiders, within a 12 month period, of a number of Options exceeding
10% of the issued shares; or


(iii)               
the
issuance to any one Optionee, within a 12 month period, of a number of shares
exceeding 5% of the issued shares; or


b)      
the
Company is decreasing the exercise price of stock options previously granted to
Insiders.


If the Company is required to obtain
disinterested Stockholder approval in accordance with paragraph (a) immediately
above, the proposed grant(s) must be approved by a majority of the votes cast
by all Stockholders at a Stockholders’ meeting excluding votes attaching to
shares beneficially owned by:


(i)                  
Insiders
to whom Options may be granted under the 2012 Plan; and


(ii)                
Associates
of persons referred to in (b)(i).


c)       
Holders
of non-voting and subordinate voting shares must be given full voting rights on
a resolution that requires disinterested Stockholder approval.


The Company may not grant Options providing for
the issuance of more than 2% of the issued Stock to any one Consultant in any 12
month period, calculated as at the date the said Options were granted to such
Consultant.


The Company may not grant Options providing for
the issuance of more than an aggregate of 2% of the issued Stock to all persons
retained to provide Investor Relations Activities, in any 12 month period,
calculated as at the date the said Options were granted to any such person.  In
addition, Options issued to Consultants performing Investor Relations
Activities must vest in stages over 12 months with no more than 1/4 of the
options vesting in any three month period.





 

The Committee shall
have the full authority to determine the number of shares of Stock available
for Awards.  In its discretion the Committee may include (without limitation),
as available for distribution: (a) Stock subject to any Award that has been
previously forfeited; (b) Stock under an Award that otherwise terminates,
expires, or lapses without the issuance of Stock being made to a Participant;
(c) Stock subject to any Award that settles in cash; or (d) Stock that is
received or retained by the Company in connection with the exercise of an
Award, including the satisfaction of any tax liability or tax withholding
obligation.  


The Company intends to comply with the policies
of the TSX Venture Exchange when granting Options.


Adjustment in Capitalization.


a)       
In
the event of a Change in Capitalization, the Committee shall conclusively
determine, in its sole discretion, the appropriate adjustments, if any, to (i)
the maximum number and class of shares of Stock or other securities with
respect to which Options may be granted under the 2012 Plan; (ii) the number
and class of shares of Stock or other securities which are subject to
outstanding Options granted under the 2012 Plan and the Retired Plans, and the
purchase price therefore, if applicable; and (iii) the maximum number of shares
of Stock or other securities with respect to which Options may be granted
during the term of the 2012 Plan.


b)      
Notwithstanding any other provision of the 2012 Plan or any Option
Agreement to the contrary, any Award which is adjusted pursuant to this Section
shall be exempt from, or compliant with, the requirements of Code Section 409A
and Code Section 457A and the regulations and other governmental guidance
issued thereunder.


c)       
If,
by reason of a Change in Capitalization, an Optionee shall be entitled to
exercise an Option with respect to new, additional or different shares of Stock
or securities, such new, additional or different shares shall thereupon be
subject to all of the conditions, restrictions and performance criteria which
were applicable to the Stock subject to the Option, as the case may be, prior
to such Change in Capitalization.


SECTION
5. DURATION OF 2012 PLAN


Duration of Plan. The 2012 Plan shall
remain in effect, subject to the Board’s right to earlier terminate the 2012
Plan pursuant to Section 12 hereof, until all Stock subject to the 2012 Plan
shall have been purchased or acquired pursuant to the provisions hereof. Notwithstanding
the foregoing, no Option may be granted under the 2012 Plan with an expiry date
greater than ten years from the date of issuance of such Option. 


SECTION
6. OPTION GRANTS


Grant of Options. Subject to Sections 4
and 5, Options may be granted to Participants at any time and from time to time
as determined by the Committee. The Committee shall have complete discretion
consistent with the terms of the 2012 Plan in determining whether to grant
Options, and the number of Options to be granted. Only an employee, officer,
director or Consultant of the Company or its Subsidiaries on the date of grant
shall be eligible to be granted an Option.


Option Agreement. Each Option shall be
evidenced by an Option Agreement that shall specify the type of Option granted,
the Option Price, the duration of the Option, the number of shares of Stock to
which the Option pertains and such other provisions as the Committee shall
determine, it being understood that if the expiry date of an Option falls
during a Blackout Period, such Option will expire no later than the 10th
business day after the expiry of the Blackout Period.


Option Price. The Option Price for each Option shall
be determined by, or in the manner specified by, the Committee provided that no
Option shall have an Option Price that is, on the date the Option is granted,
less than Fair Market Value. In the case of a proposed reduction in exercise
price of any Option, disinterested Stockholder approval will be obtained if the
Optionee is an Insider of the Company at the time of the proposed amendment;


Duration of Options. Each Option shall
have a maximum duration of ten years from the time it is granted.  


Exercise of Options. Each Option granted
under the 2012 Plan shall be exercisable at such times and be subject to such
restrictions and conditions as the Committee shall in each instance approve.
Such restrictions and conditions need not be the same for each Participant.


SECTION
7. TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS


Payment.  The Committee shall determine the acceptable form of
consideration for exercising an Option, including the method of payment, at the
time of grant.  Subject to applicable laws, such consideration may consist
entirely of cash or check. 





 

Restrictions on Stock
Transferability.
The Committee may impose such restrictions on any shares of Stock acquired
pursuant to the exercise of an Option under the 2012 Plan as it may deem
advisable, including, without limitation, restrictions under applicable
provincial securities law, under applicable U.S. federal and state securities
law, under requirements of any Exchange and under any U.S. blue sky or state
securities laws applicable to such shares. 


Termination Due to Retirement. If the employment of
the Optionee is terminated due to the Retirement (as hereinafter defined) of
the Optionee, or if the directorship of the Optionee expires, any then
outstanding options under the 2012 Plan may be exercised at any time prior to
the earlier of the expiration date of the Options or twelve (12) months after
the date of retirement.  For purposes of the 2012 Plan, retirement shall mean
any termination of employment with the Company or a Subsidiary occurring after
the completion of 10 years of service with the Company and the attainment of
age 60 by the Optionee.


Termination Due to Death or Disability. The rights of an
Optionee under any then outstanding Option granted to the Optionee pursuant to
the 2012 Plan if the employment, officer role or directorship of the Optionee
is terminated by reason of death or Disability shall survive for up to the
earlier of the expiration date of the Options or one year after such death or
Disability. 


Termination of Employment for Cause. Anything contained
herein or an Award agreement to the contrary notwithstanding, if the
termination of an Optionee’s employment with the Company or a Subsidiary is as
a result of or caused by the Optionee’s theft or embezzlement from the Company
or a Subsidiary, the violation of a material term or condition of his or her
employment, the disclosure by the Optionee of confidential information of the
Company or a Subsidiary, conviction of the Optionee of a crime of moral
turpitude, the Optionee’s stealing trade secrets or intellectual property owned
by the Company or a Subsidiary, any act by the Optionee in competition with the
Company or a Subsidiary, or any other act, activity or conduct of the Optionee
which in the opinion of the Committee is adverse to the best interests of the
Company or a Subsidiary, then any Options and any and all rights granted to
such Optionee thereunder, to the extent not yet effectively exercised, shall
become null and void effective as of the date of the occurrence of the event
which results in the Optionee ceasing to be an employee, officer or director of
the Company or a Subsidiary, and any purported exercise of an Option by or on
behalf of said Optionee following such date shall be of no effect.


Involuntary Termination of Employment. Options granted under
the 2012 Plan after the 2012 Plan Approval Date may be exercised at any time
prior to the earlier of the expiration date of the Options or within thirty
(30) days after the involuntary termination of employment (as hereinafter
defined) of the Optionee with the Company, or applicable Subsidiary, but the
Options may not be exercised for more than the number of shares, if any, as to
which the Options were exercisable by the Optionee immediately prior to such
termination of employment, as determined by reference to the terms and
conditions specified at the time such Options were granted. For purposes of the
2012 Plan, “involuntary termination of employment” shall mean any termination
of an Optionee’s employment with the Company or applicable Subsidiary, by
reason of the discharge, firing or other involuntary termination of an
Optionee’s employment by action of the Company or applicable Subsidiary other
than an involuntary termination for cause as described in the paragraph above,
or if the employee otherwise continued in the employment of another Subsidiary
of the Company.


Voluntary Termination of Employment. Options granted under
the 2012 Plan after the 2012 Plan Approval Date may be exercised at any time
prior to the earlier of the expiration date of the Options or within ninety
(90) days after the voluntary termination of employment (as hereinafter
defined) of the Optionee with the Company, or applicable Subsidiary, but the
options may not be exercised for more than the number of shares, if any, as to
which the Options were exercisable by the Optionee immediately prior to such
termination of employment, as determined by reference to the terms and
conditions specified at the time such options were granted. For purposes of the
2012 Plan “voluntary termination of employment” shall mean any voluntary termination
of employment by reason of the Optionee’s quitting or otherwise voluntarily
leaving the Company’s, or Subsidiary’s, employ other than a (a) voluntary
termination of employment by reason of Retirement, (b) voluntary termination of
employment for cause or (c) termination of employment as described above. 


Cease to be a Director, Officer,
Consultant or Management Company Employee. Unless otherwise set out in the 2012
Plan, any Options granted to any Optionee who is a director, officer, employee,
Consultant or Management Company Employee shall expire within a reasonable
period following the date the Optionee ceases to be in that role, such period
to be determined by the Board or Committee at the time such Option is granted.





 

Transferability and Exercisability of Options. 


No Option shall be transferable or assignable
by the Optionee other than (i) by will or by the laws of descent and
distribution, or (ii) by a qualified domestic relations order (as defined in the
Code or Title 1 of the Employee Retirement Income Security Act of 1974,
as amended, or the rules thereunder).  All Options shall be exercisable, during
the Optionee’s lifetime, only by the Optionee or by the guardian or legal
representative of the Optionee or its alternate payee pursuant to such
qualified domestic relations order, it being understood that the terms “holder”
and “optionee” include the guardian and legal representative of the Optionee
named in the Option Agreement and any person to whom an Option is transferred
by will or the laws of descent and distribution, or pursuant to a qualified
domestic relations order permitted by the 2012 Plan.  In all cases of such a
transfer, unless otherwise set out in this 2012 Plan, the Option in question
shall expire on the date that is the first anniversary of such transfer. 


SECTION
10. BENEFICIARY DESIGNATION


Beneficiary Designation. Subject to Sections 7
and 9, each Participant may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the 2012 Plan is to be paid in case of the Participant’s death
before he or she receives any or all of such benefit. Each designation will
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Committee and will be effective only when filed by the
Participant in writing with the Committee during the life time of the
Participant. In the absence of any such designation, benefits remaining unpaid
at the Participant’s death shall be paid to the estate of the Participant.


SECTION
11. RIGHTS OF PARTICIPANTS


Employment. Nothing in the 2012 Plan shall
interfere with or limit in any way the right of the Company or any Subsidiary
to terminate any Participant’s employment, directorship, officer role or
service at any time nor confer upon any Participant any right to continue in
the employ or service or as a director or officer of the Company or any
Subsidiary. No person shall have a right to be selected as a Participant or,
having been so selected, to be selected again as an Optionee. The preceding
sentence shall not be construed or applied so as to deny a person any
participation in the 2012 Plan solely because he or she was a Participant in
connection with a prior grant of benefits under the 2012 Plan.


SECTION
12. ADMINISTRATION; POWERS AND DUTIES OF THE COMMITTEE AND THE BOARD


Administration. 


(a)                 
The
Committee shall be responsible for the administration of the 2012 Plan as it
applies to Participants other than directors and officers, and the Board shall
be responsible for the administration of the 2012 Plan as it applies to
directors and officers, subject to Section 2. The Committee, by majority action
thereof, is authorized to interpret and construe the 2012 Plan, to prescribe,
amend, and rescind rules and regulations relating to the 2012 Plan (including
related agreements), to provide for conditions and assurances deemed necessary
or advisable to protect the interests of the Company and its Subsidiaries, and
to make all other determinations necessary or advisable for the administration,
interpretation and construction of the 2012 Plan (including related
agreements), but only to the extent not contrary to the express provision of
the 2012 Plan.  Determinations, interpretations, or other actions made or taken
by the Committee pursuant to the provisions of the 2012 Plan shall be final and
binding and conclusive for all purposes and upon all persons whomsoever. No
member of the Committee shall be personally liable for any action,
determination or interpretation made or taken in good faith with respect to the
2012 Plan, and all members of the Committee shall be fully indemnified by the
Company with respect to any such action, determination or interpretation.  


(b)                
To
the extent that the Board determines it to be desirable to qualify Awards
granted hereunder as “performance-based compensation” within the meaning of
Section 162(m) of the Code, the 2012 Plan shall be administered by the
Committee of two or more “outside directors” within the meaning of Section
162(m) of the Code.  


(c)                 
Subject
to the provisions of the 2012 Plan, and in the case of the Committee, subject
to the specific duties delegated by the Board to such Committee, the Committee
shall have the authority, in its discretion: (i) to determine the Fair Market
Value of the Stock, in accordance with the 2012 Plan; (ii) to select the
Participants to whom Awards may be granted hereunder; (iii) to determine
whether and to what extent Awards or any combination thereof, are granted hereunder;
(iv) to determine the number of shares of Stock to be covered by each Award
granted hereunder; (v) to approve forms of agreement for use under the 2012
Plan; and (vi) to determine the terms and conditions, not inconsistent with the
terms of the 2012 Plan, of any Award granted hereunder.  Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options may be exercised or other Awards vest (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation
regarding any Award or the shares of Stock relating thereto, based in each case
on such factors as the Committee, in its sole discretion, shall determine;
(vii) to construe and interpret the terms of the 2012 Plan and Awards; (viii)
to prescribe, amend and rescind rules and regulations relating to the 2012 Plan
or the Retired Plans, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws; (ix) to modify or amend each Award (subject to this Section),
including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the 2012
Plan; (x) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Award previously granted under
the 2012 Plan; (xi) to allow Participants to satisfy withholding tax
obligations by electing to have the Company withhold from the Stock or cash to
be issued upon exercise or vesting of an Award that number of shares of Stock
or cash having a Fair Market Value equal to the minimum amount required to be
withheld (but no more).  The Fair Market Value of any Stock to be withheld
shall be determined on the date that the amount of tax to be withheld is to be
determined.  All elections by a Participant to have Stock or cash withheld for
this purpose shall be made in such form and under such conditions as the Committee
may deem necessary or advisable; (xii) to determine the terms and restrictions
applicable to Awards; (xiii) to determine whether Awards will be adjusted for
changes in capitalization (including dividends); (xiv) to impose such
restrictions, conditions or limitations as it determines appropriate as to the
timing and manner of any resales by a Participant or other subsequent transfers
by a Participant of any Stock issued as a result of or under an Award,
including without limitation, (A) restrictions under an insider trading policy,
and (B) restrictions as to the use of a specified brokerage firm for such
resales or other transfers; and (xv) to make all other determinations deemed
necessary or advisable for administering the 2012 Plan.



 



Change in Control. 


(a)    
Without limiting the authority of the Committee as provided herein, the
Committee, either at the time         an Award is granted, or at any time
thereafter, shall have the authority to take such actions as it deems
advisable, including the right to accelerate in whole or in part the
exercisability of Options upon a Change in Control. Nothing herein shall
obligate the Committee to take any action upon a Change in Control.  


(b)     “Change in Control”
means the occurrence of any of the following events:


i.        
The
acquisition by any individual entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of equity securities
of the Company representing more than 25 percent of the voting power of the
then outstanding equity securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”),
provided, however, that for purposes of this subsection (i) the following
acquisitions shall not constitute a Change of Control: (A) any acquisition by
the Company, (B) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company, and (C) an acquisition pursuant to a transaction which complies
with clauses (A), (B), and (C) of subsection (iii); or 


ii.       
A
change in the composition of the Board as of the 2012 Plan Approval Date (the
“Incumbent Board”) that causes less than a majority of the directors of the
Company then in office to be members of the Incumbent Board provided, however,
that any individual becoming a director subsequent to the 2012 Plan Approval
Date, whose election, or nomination for election by the Company’s shareholders,
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a person other than the Board; or 


iii.     
Consummation
of a reorganization, merger, or consolidation or sale or other disposition of
all or substantially all of the assets of the Company or the purchase of assets
or stock of another entity (a “Business Combination”), in each case, unless
immediately following such Business Combination, (A) all or substantially all
of the individuals and entities who were the beneficial owners of the
Outstanding Company Voting Securities immediately prior to such Business
Combination will beneficially own, directly or indirectly, more than 50 percent
of the then outstanding combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors (or
equivalent governing body, if applicable) of the entity resulting from such
Business Combination (including, without limitation, an entity which as a
result of such transaction owns the Company or all of substantially all of the
Company’s assets directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Voting Securities, (B) no person
(excluding any employee benefit plan (or related trust) of the Company or such
entity resulting from such Business Combination) will beneficially own,
directly or indirectly, more than a majority of the
combined voting power of the then outstanding voting securities of such entity
except to the extent that such ownership of the Company existed prior to the
Business Combination, and (C) at least a majority of the members of the board
of directors (or equivalent governing body, if applicable) of the entity
resulting from such Business Combination will have been members of the
Incumbent Board at the time of the initial agreement, or action of the Board,
providing for such Business Combination; or 



 



iv.     
Approval
by the stockholders of the Company of a complete liquidation or dissolution of
the Company; or


v.       
Any
other event or series of events which the Board reasonably determines should
constitute a Change in Control.


Nothing in this Section 12 prevents the
Committee from providing for an alternative definition of “Change in Control”
in any Award agreement or related employment, change of control or other
agreement that sets forth the rights with respect to any Award.  In the event
of any conflict between this definition and the definition in any such
agreement, the more permissive “Change in Control” language shall prevail.


Amendment, Modification and Termination of
Plan. The
Board may, at any time and from time to time, modify, amend, suspend or
terminate the 2012 Plan in any respect.  Amendments to the 2012 Plan shall be
subject to approval to the extent required to comply with any exemption to the
short swing-profit provisions of Section 16(b) of the Exchange Act pursuant to
rules and regulations promulgated thereunder, with the exclusion for
performance-based compensation under Code Section 162(m), or with the rules and
regulations of any Exchange.  The Board may also modify or amend the terms and
conditions of any outstanding Option, subject to the consent of the holder and
consistent with the provisions of the 2012 Plan.  


The Board may, without shareholder approval:


(i)       amend the 2012 Plan to
correct typographical, grammatical or clerical errors;


(ii)     change the vesting
provisions of an Option granted under the 2012 Plan;


(iii)    change the termination
provision of an Option granted under the 2012 Plan if it does not entail an
extension beyond the original expiry date of such Option; 


(iv)    make such amendments to
the 2012 Plan as are necessary or desirable to reflect changes to securities
laws applicable to the Company;


(v)     make such amendments as
may otherwise be permitted by the Exchange, if applicable; and


(vi)    amend the Plan to
reduce the benefits that may be granted to Participants.


Interpretation. Unless otherwise
expressly stated in the relevant Agreement, any grant of Options is intended to
be performance-based compensation and therefore not subject to the deduction
limitation set forth in Section 162(m)(4)(C) of the Code.


Date of Grant.  The date of grant of an
Award shall be, for all purposes, the date on which the Committee makes the
determination granting such Award, or such other later date as is determined by
the Committee; provided, however, the date of grant of an Option shall be the
date when the Option is granted and its exercise price is set, consistent with
applicable law and applicable financial accounting rules.  Notice of the
determination shall be provided to each Participant within a reasonable time
after the date of such grant.


SECTION
13. TAX WITHHOLDING


Tax Withholding. At such times as a
Participant recognizes taxable income in connection with the receipt of shares,
securities, cash or property hereunder (a “Taxable Event”), the Participant
shall pay to the Company or, if instructed by the Committee or its delegate, the
Subsidiary that employs the Participant an amount equal to the applicable taxes
and other amounts as may be required by law to be withheld by the Company or,
if instructed by the Committee or its delegate, the Subsidiary that employs the
Participant in connection with the Taxable Event. This provision is not
intended to (a) supersede the requirements of the TSX Venture Exchange, (b)
result in an alteration of the exercise price of an Option or (c) result in the
cashless exercise of an Option.


SECTION
14. REQUIREMENTS OF LAW


Requirements of Law. The granting of
Options, and the issuance of shares of Stock upon the exercise of an Option
shall be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or Exchanges as may be required.


Governing Law. The 2012 Plan, and all agreements
hereunder, shall be construed in accordance with and governed by the laws of
the Province of Ontario without giving effect to the choice of law principles
thereof.





 

Listing, etc. Each Option is subject
to the requirement that, if at any time the Committee determines, in its
discretion, that the listing, registration or qualification of Stock issuable
pursuant to the 2012 Plan is required by any securities exchange or under any
state or federal law, or the consent or approval of any governmental regulatory
body is necessary or desirable as a condition of, or in connection with, the
grant of an Option or the issuance of Stock, no Options shall be granted or
payment made or shares of Stock issued, in whole or in part, unless such
listing, registration, qualification, consent or approval has been effected or
obtained free of any conditions which are unacceptable to the Committee or the
Board, acting in good faith.


Code Sections 409A and 457A.  The 2012 Plan and
the Awards granted hereunder are intended to qualify for an exemption from Code
Section 409A and from Code Section 457A, provided, however, that if any Award
granted under the 2012 Plan is not so exempt, such Award is intended to comply
with Code Sections 409A and 457A to the extent applicable thereto. 
Notwithstanding any provision of the 2012 Plan to the contrary, the 2012 Plan
shall be interpreted and construed consistent with this intent. 
Notwithstanding the expressed intent to qualify for exemption from Code Section
409A and from Code Section 457A or otherwise to comply with Code Sections 409A
and 457A, the Company shall not be required to assume any increased economic
burden in connection therewith.  Although the Company and the Committee intend
to administer the 2012 Plan so that the 2012 Plan and the Awards granted
hereunder qualify for an exemption from Code Section 409A and from Code Section
457A, if the 2012 Plan and any Award granted under the 2012 Plan are not so
exempt, neither the Company nor the Committee represents or warrants that the
2012 Plan or such Award granted hereunder will comply with Code Sections 409A
and 457A or any other provision of federal, state, local, or non-United States
law.  Neither the Company, its subsidiaries, nor its respective directors,
officers, employees or advisers shall be liable to any Participant (or any
other individual claiming a benefit through the Participant) for any tax,
interest, or penalties the Participant may owe as a result of participation in
the 2012 Plan, and the Company and its subsidiaries shall have no obligation to
indemnify or otherwise protect any Participant from the obligation to pay any
taxes pursuant to Code Sections 409A or 457A.


Restriction on Transfer. Notwithstanding
anything contained in the 2012 Plan or any Agreement to the contrary, if the
disposition of Stock acquired pursuant to the 2012 Plan is not covered by a
then current registration statement under the U.S. Securities Act of 1933, as
amended, and is not otherwise exempt from such registration, such Stock shall
be restricted against transfer to the extent required by said Act, and Rule 144
or other regulations thereunder.  The Committee may require anyone receiving
Stock pursuant to an Option granted under the 2012 Plan, as a condition
precedent to receiving such Stock, to represent and warrant to the Company in
writing that such Stock is being acquired without a view to any distribution
thereof and will not be sold or transferred other than pursuant to an effective
registration thereof under said Act or pursuant to an exemption applicable
under said Act, or the rules and regulations promulgated thereunder.  The
certificates evidencing any shares of such Stock shall have the appropriate
legend to reflect their status as restricted securities.


Notwithstanding
anything contained in the 2012 Plan or any agreement to the contrary, Stock
issued pursuant to the 2012 Plan in reliance on an exemption from the
prospectus requirements of the securities legislation of a province of Canada
may be subject to restrictions on transfer.