equityincentiveplan.htm


    WORDLOGIC
CORPORATION

     

    
      
        	
                 2008 EQUITY INCENTIVE
PLAN

              


      

    

     

     

    SECTION
1

    INTRODUCTION

    


    1.1           Establishment. Wordlogic
Corporation (the “Company”), a Nevada corporation, hereby establishes the 2008
Equity Incentive Plan (the “Plan”) for employees, consultants, directors, and
other persons associated with the Company and any of the Company’s subsidiaries,
whom the board of directors of the Company wishes to compensate for
services.

    


    1.2           Purposes.  The
purposes of this Plan are to (i) attract and retain the best available personnel
for positions of responsibility within the Company (ii) provide incentives to
employees, officers, and management of the Company, (iii) provide Directors,
Consultants and Advisors of the Company with an opportunity to acquire a
proprietary interest in the Company to encourage their continued provision of
services to the Company, and to provide such persons with incentives and rewards
for superior performance more directly linked to the profitability of the
Company's business and increases in shareholder value, and (iv) generally to
promote the success of the Company's business and the interests of the Company
and all of its stockholders, through the issuance of shares of the Company's
common stock.

    


    Incentive benefits granted hereunder may be
shares. The amount of shares issued shall be determined by the board or the
Compensation Committee and reflected in the terms of written
agreements.

    


    


    SECTION
2

    DEFINITIONS

    


    2.1           Definitions.  The
following terms will have the meanings set forth below:

    


    “Affiliated Corporation” means
any corporation or other entity (including, but not limited to, a partnership)
that is affiliated with the Company through stock ownership or otherwise, and
includes subsidiaries of the Company.

    


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

    


    “Code” means the Internal
Revenue Code of the USA or the Income Tax Act of Canada, as it may be amended
form time to time, and as appropriate to the context and as applies to the
Eligible Participant.

    


    “Effective Date” means the
effective date of the Plan, which will be upon approval of the Board of
Directors of the Company.

    



    
      
         


      

      
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    “Eligible Participants” means
any employees (including, without limitation, all officers), directors,
consultants and any other persons whom the Board wishes to incite to contribute
to the fortunes of the Company and permitted by law or policy to receive
Shares.

    


    “Non-Statutory Share” means a
Share issued under this Plan in accordance with the requirements of the Code, as
amended from time to time.

    


    “Plan Limit” shall have the
meaning set forth in section 4.1.

    


    “Share” or “Shares” shall mean the
Company's Common Shares, $.001 par value per share, or, in the event that the
outstanding Common Shares are hereafter changed into or exchanged for different
shares of securities of the Company, such other shares or
securities.

    


    “Share Agreement” shall mean
an agreement that will be entered into by the Company and the Eligible
Participant to whom the Shares are issued and will contain terms and conditions
governing the issuance of Shares.

    


    “Stockholder” means an
Eligible Participant designated by the Share Issuance Committee from time to
time during the term of the Plan to receive one or more Shares under the
Plan.

    


     “Share Issuance Committee”
means the Compensation Committee of the Company, unless the Board strikes
a separate committee, and in the absence of an empowered committee shall mean
the Board.

    


    “Stock” means the common
stock of the Company.

    


    2.2           Gender and
Number.  Except where otherwise indicated by the context, the
masculine gender also will include the feminine gender, and the definition of
any term herein in the singular also will include the plural.

    


    


    SECTION
3

    PLAN
ADMINISTRATION

    


    3.1           Share Issuance
Committee.   The Share Issuance Committee will administer
the Plan.  In accordance with the provisions of the Plan, the Share
Issuance Committee will, in accordance with policies ordered by the Board but in
the absence of board direction in its sole discretion, select the Eligible
Participants to whom Shares will be issued, the amount of Shares to be issued,
and any other terms and conditions of each Share as the Share Issuance Committee
may deem necessary and consistent with the terms of the Plan.  The
Share Issuance Committee will determine the form or forms of the agreements with
Stockholders.  The agreements will evidence the particular provisions,
terms, conditions, rights and duties of the Company and the Stockholders with
respect to Shares issued pursuant to the Plan, which provisions need not be
identical except as may be provided herein.  The Share Issuance
Committee may from time to time adopt such rules and regulations for carrying
out the purposes of the Plan as it may deem proper and in the best interests of
the Company.  The Share Issuance Committee may correct any defect,
supply any omission or reconcile any inconsistency in the Plan or in any
agreement entered into hereunder in the manner and to the extent it may deem
expedient and it will be the sole and final judge of such
expediency.  No member of the Share Issuance Committee will be liable
for any action or determination made in good faith, and all members of the
Committee will, in addition to their rights as directors, be fully protected by
the Company with respect to any such action, determination or
interpretation.  The determinations, interpretations and other actions
of the Share Issuance Committee pursuant to the provisions of the Plan will be
binding and conclusive for all purposes and on all persons.


    
      
         


      

      
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    SECTION
4

    STOCK SUBJECT TO
THE PLAN AND EXCEPTIONS

    


    4.1           Plan limit.  A
maximum of 2,000,000 Shares (“Plan Limit”) are authorized
for issuance under the Plan in accordance with the provisions of the
Plan.  Shares that are issued will be deducted from the Plan Limit and
such Plan Limit shall not be increased without approval of the board or, if
shareholders of the Company have so required, without approval of the
shareholders of the Company.  While any Shares are outstanding, the
Company will retain as authorized and unissued Stock at least the number of
Shares from time to time required under the provisions of the Plan or otherwise
assure itself of its ability to perform its obligations hereunder.

    


    4.2           Unused and Forfeited
Stock.  Any Shares that are subject to this Plan that are not
used because the terms and conditions of the Share Agreement are not met or any
Shares that are used for full or partial payment of the purchase price of Shares
or any Shares retained by the Company for any purpose of this Plan automatically
will be returned to the Plan Limit and become available again for use under the
Plan.

    


    4.3           Adjustments for Stock Split, Stock
Dividend, Etc.  If the Company at any time increases or
decreases the number of its outstanding Shares of Stock, or changes in any way
the rights and privileges of such Shares by means of the Payment of a Stock
dividend or any other distribution upon such Shares payable in Stock, or through
a stock split, subdivision, consolidation, combination, reclassification or
recapitalization involving the Stock, then, in relation to the Stock that is
affected by the above events, the provisions of this Section 4.3 will
apply.  In such event, the numbers, rights and privileges of the
following will be increased, decreased or changed in like manner as if such
shares had been issued and outstanding, fully paid and non-assessable at the
time of an adjustment to the Shares of Stock as to which Shares may be issued
under the Plan.

    


    4.4           General Adjustment
Rules.  If any adjustment or substitution provided for in this
Section 4 will result in the creation of a fractional Share, the number of
Shares will be rounded to the next higher Share.

    


    4.5           Determination by Share Issuance
Committee, Etc.  Adjustments under this Section 4 will be made
by the Share Issuance Committee, whose determinations with regard thereto will
be final and binding upon all parties.

    



    
      
         


      

      
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    4.6           Shares Exceptional to
Plan.  With the concurrence of the Board, the Share Issuance
Committee may issue Shares outside the Plan or within the Plan but in excess of
the Plan Limit, such that the available Plan Limit is not diminished, for
exceptional circumstances or to acquire or retain personnel or achieve important
goals or strategic targets considered important to the Company but which cannot
reasonably be fit into the Plan Limit or the Plan due to insufficiency of
available Plan Shares, legal impediments whereby the recipient cannot or is best
not included in the Plan, or other purposes or reasons considered appropriate to
the Board.

    


    4.7           Limitations on
Issuance.  The Share Issuance Committee shall not, nor does it
have the authority to, issue any stock compensation under this Plan for service
related to investor relations or capital raising activities.

    


    


    SECTION
5

    REORGANIZATION OR
LIQUIDATION

    


    5.1           Reorganization and
Shares.   In the event that the Company is merged or
consolidated with another corporation (other than a merger or consolidation in
which the Company is the continuing corporation and that does not result in any
reclassification or change of outstanding Shares), or if all or substantially
all of the assets or control of the outstanding voting stock of the Company is
acquired by any other corporation, business entity or person (other than by a
sale or conveyance in which the Company continues as a holding company of an
entity or entities that conduct the business of businesses formerly conducted by
the Company), or in case of a reorganization (other than a reorganization under
the United States Bankruptcy Code) or liquidation of the Company, the Share
Issuance Committee will have the power and discretion to prescribe the terms and
conditions for the modification of any outstanding Shares issued
hereunder.  By way of illustration, and not by way of limitation, the
Share Issuance Committee may provide that such Shares will be exchanged or
converted into Shares of the surviving or acquiring corporation, or may provide
for a payment or distribution in respect of outstanding Shares in cancellation
thereof.  Any such determinations by the Share Issuance Committee may
be made generally with respect to all Stockholders, or may be made on a
case-by-case base with respect to particular Stockholders.  The
provisions of this Section 5 will not apply to any transaction undertaken for
the purpose of reincorporating the Company under the laws of another
jurisdiction, if such transaction does not materially affect the beneficial
ownership of the Company’s capital stock.  Any determination by the
Share Issuance Committee hereunder shall not amend the terms of any Share
without the consent of the Stockholder unless, in the opinion of the Committee
acting reasonably, such amendment is necessary to permit the alterations to the
Company to be effected and such is in the interest of shareholders
generally.

    


    



    
      
         


      

      
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    SECTION
6

    STOCK
SHARES

    


    6.1           Issuance of
Shares.  An Eligible Participant may be issued one or more
Shares.


    6.2           Share
Agreements.  Each Share issued under the Plan will be evidenced
by a written Share Agreement that will be entered into by the Company and the
Eligible Participant to whom the Share is issued (the “Stockholder”), and will
be deemed to contain the following terms and conditions, unless other terms and
conditions inconsistent therewith have been entered into the Share
Agreement.  In the event of inconsistency between the provisions of
the Plan and any Share Agreement entered into, the provisions of the Share
Agreement will be considered to have been determined to be exceptional from the
below and such Share Agreement shall govern where not inconsistent with
law.  However, the provisions of the Plan will govern where the Share
Agreement omits to provide for a matter governed by the Plan and the Share
Agreement will not be incomplete nor unenforceable if it fails to provide for a
matter provided by the terms of this Plan as such shall be incorporated by
reference:

    


    (a) Number of
Shares.  Each Share Agreement will state that it covers a
specified number of Shares, as determined by the Share Issuance Committee and
the Share Agreement.  If the Share Agreement fails to state the number
then it shall be the number set forth in the minutes of the Share Issuance
Committee.

    


    (b) Issuance
Period.  Each Share Agreement will state the time and the
amount of the Shares of the Share which shall be issued.  Unless
otherwise provided in the Share Agreement, Shares will vest
immediately:

    


    (c) Date of
Issuance.  Shares will be considered as having been issued on
the date specified in the issuance resolution of the Share Issuance
Committee.

    


    6.3           Stockholder
Privileges.  Prior to the issuance of the Shares to the
Stockholder, the Stockholder will have no rights as a stockholder with respect
to any Shares issued to such person under this Plan and, until the Stockholder
becomes the holder of the record of such Stock, no adjustments, other than those
described in Section 4, will be made for dividends or other distributions or
other rights to which there is a record date preceding the date such Stockholder
becomes the holder of record of such Stock.

    


    


    SECTION
7

    RIGHTS OF EMPLOYEES
AND STOCKHOLDERS

    


    7.1           Employment.  Nothing
contained in the Plan or in any Share Agreement will confer upon any Eligible
Participant any right with respect to the continuation of employment by the
Company, or interfere in any way with the right of the Company, subject to the
terms of any separate employment agreement to the contrary, at any time to
terminate such employment or to increase or decrease the compensation of such
Eligible Participant form the rate in existence at the time of the issuance of
Shares.

    


    



    
      
         


      

      
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    SECTION
8

    GENERAL
RESTRICTIONS

    


    8.1           Investment
representations.  The Company may require any person to whom
Shares are issued to give written assurances, in substance and form satisfactory
to the Company and its counsel, to the effect that such person is acquiring the
Stock subject to the Share Agreement for his own account for investment and not
with any present intention of selling and to such other effects as the Company
deems necessary or appropriate in order to comply with federal and applicable
state and provincial securities laws.  Legends evidencing such
restrictions may be placed on the certificates evidencing the
Stock.

    


    8.2           Compliance with Securities
Laws.  Each Share Agreement will be subject to the requirement
that if at any time counsel to the Company determines that the listing,
registration or qualification of the Shares upon any securities exchange or
under any state, provincial or federal law, or the consent or approval of any
governmental or regulatory body, is necessary as a condition of, or in
connection with, the issuance of Shares thereunder, such Shares may not be
issued in whole or in part unless such listing, registration, qualification,
consent or approval will have been effected or obtained on conditions acceptable
to the Share Issuance Committee.  Nothing herein will be deemed to
require the Company to apply for or to obtain such listing, registration or
qualification.  However, where available to the circumstances of an
Stockholder the Company will include the Share with any other filings that the
Company elects, at its sole discretion, to file under Form S-8 or any other
filings with the SEC but the Company shall not be obliged to make an individual
filing for a particular Share, unless such shall have been required pursuant to
the specific Share Agreement.

    


    


    SECTION
9

    OTHER EMPLOYEE
BENEFITS

    


    9.1           Benefits and
Taxes.   The amount of any compensation deemed to be
received by a Stockholder as a result of a Share issuance will not constitute
“earnings” with respect to which any other employee benefits of such Stockholder
are determined, including, without limitation, benefits under any pension,
profit sharing, life insurance or salary continuation plan.  Any
taxable consequences of any Share issuance are entirely the responsibility of
the Stockholder and no contribution shall be required of the Company and,
further, if the Company should suffer liability for unpaid taxes of a
Stockholder then the full amount of such shall be a debt of the Stockholder to
the Company payable immediately and for which the Company may seek judgment and,
before judgment or process, may set-off against any amounts due to the
Stockholder or may recover, again before judgment or process, by exercise of
voiding the Share Issuance at the discretion of the Share Issuance
Committee.

    


    



    
      
         


      

      
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    SECTION
10

    PLAN AMENDMENT,
MODIFICATION AND TERMINATION

    


    10.1           Amendment.   The
Board may at any time terminate and, from time to time, may amend or modify the
Plan provided, however, that no amendment or modification may become effective
without approval of the amendment or modification by the stockholders where
stockholder approval is required to enable the Plan to satisfy any applicable
statutory requirements, or if the Company, on the advice of counsel, determines
that stockholder approval otherwise is necessary or desirable.

    


    No amendment, modification or termination of
the Plan will in any manner adversely affect any Shares theretofore issued under
the Plan, without the consent of the Stockholders holding such
Shares.

    


    SECTION
11

    WITHHOLDING

    


    11.1           Withholding
Requirement.  The Company’s obligations to issue Shares will be
subject to the Stockholder’s satisfaction of all applicable federal, state and
local income and other tax withholding requirements and applicable securities
requirements.

    


    11.2           Withholding With
Stock.  At the time Shares are issued the Share Issuance
Committee, in its sole discretion, may permit the Stockholder to pay all such
amounts of tax withholding, or any part thereof, that is due upon exercise of
the Share by such adjustments as the Share Issuance Committee
determines.

    


    


    SECTION
12

    BROKERAGE
ARRANGEMENTS

    


    12.1           Brokerage.   The
Share Issuance Committee, in its discretion, may enter into arrangements with
one or more banks, brokers or other financial institutions to facilitate the
disposition of shares acquired upon, including, without limitation, sale of
acquired Shares.

    


    


    SECTION
13

    NONEXCLUSIVITY OF
THE PLAN

    


    13.1           Other
Plans.   The adoption of this Plan by the Board will not
be construed as creating any limitations on the power or authority of the Board
to adopt such other or additional incentive or other compensation arrangements
of whatever nature as the Board may deem necessary or desirable or preclude or
limit the continuation of any other plan, practice or arrangement for the
payment of compensation or fringe benefits to employees generally, or to any
class or group of employees, or any other persons that the Company or any
Affiliated Corporation now has lawfully put into effect, including, without
limitation, any retirement, pension, savings and stock purchase plan, insurance,
death and disability benefits and executive short-term incentive
plans.

    



    
      
         


      

      
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    SECTION
14

    REQUIREMENTS OF
LAW

    


    14.1           Requirements of
Law.  The issuance of Stock and the payment of cash pursuant to
the Plan will be subject to all applicable laws, rules and
regulations.

    


    14.2           Governing Law.  The
Plan and all agreements hereunder will be construed in accordance with and
governed by the laws of the State of Nevada.

    


    


    SECTION
15

    DURATION OF THE
PLAN

    


    15.1           Termination.   The
Plan will terminate at such time as may be determined by the Board, and no
Shares will be issued after such termination.  If not sooner
terminated under the preceding sentence, the Plan will fully cease and expire on
the date that the Plan Limit has been exhausted and all Shares
issued.

     

     

     

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