Filed by sedaredgar.com -  Response Biomedical Corp. - Exhibit 4.16






RESPONSE BIOMEDICAL CORP. 

2008 STOCK OPTION PLAN 

Effective Date: June 3, 2008 

Approved by the Board of Directors on June 3, 2008.

Approved by the Shareholders on June 3, 2008. 




TABLE OF CONTENTS 

	SECTION 1
      DEFINITIONS AND INTERPRETATION 	4 
	1.1 	Definitions 	4 
	1.2 	Choice of Law
      	8 
	1.3 	Headings 	8 
	  	  	  
	SECTION 2 GRANT OF OPTIONS
    	8 
	2.1 	Grant of
      Options 	8 
	2.2 	Record of Option Grants
    	8 
	2.3 	Effect of
      Plan 	9 
	  	  	  
	SECTION 3
      PURPOSE AND PARTICIPATION 	9 
	3.1 	Purpose of Plan 	9 
	3.2 	Participation
      in Plan 	9 
	3.3 	Limits on Option Grants
    	9 
	3.4 	Notification
      of Grant 	9 
	3.5 	Copy of Plan 	10 
	3.6 	Limitation
      on Service 	10

	3.7 	No Obligation to Exercise
      	10 
	3.8 	Agreement
      	10

	3.9 	Notice 	10 
	  	  	  
	SECTION 4 NUMBER OF SHARES
      UNDER PLAN 	10 
	4.1 	Committee to
      Approve Issuance of Shares 	10

	4.2 	Number of Shares 	10 
	4.3 	Fractional
      Shares 	11

	  	  	  
	SECTION 5
      TERMS AND CONDITIONS OF OPTIONS 	11

	5.1 	Exercise Period of Option
      	11 
	5.2 	Number of
      Shares Under Option 	11

	5.3 	Exercise Price of Option
    	11 
	5.4 	Termination
      of Option 	12

	5.5 	Vesting of Option and
      Acceleration 	12 
	5.6 	Additional
      Terms 	13

	5.7 	U.S. Option Holders 	13 
	  	  	  
	SECTION 6 TRANSFERABILITY OF
      OPTIONS 	14 
	6.1 	Non-transferable 	14

	6.2 	Death of Option Holder
    	14 
	6.3 	Disability
      of Option Holder 	14

	6.4 	Disability and Death of
      Option Holder 	14 
	6.5 	Vesting
    	15

	6.6 	Deemed Non-Interruption of
      Engagement 	15 
	  	  	  
	SECTION 7 EXERCISE OF OPTION
      	15 
	7.1 	Exercise of
      Option 	15

	7.2 	Issue of Share Certificates
      	15 
	7.3 	No Rights as
      Shareholder 	15

	  	  	  
	SECTION 8
      ADMINISTRATION 	16

	8.1 	Board or Committee 	16 
	8.2 	Appointment
      of Committee 	16
  


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	8.3
      	Quorum
      and Voting 	16
      
	8.4
      	Powers
      of Committee 	16
      
	8.5
      	Administration
      by Committee 	17
      
	8.6
      	Interpretation
      	17
      
	  	  	  
	SECTION
      9 APPROVALS AND AMENDMENT 	17
      
	9.1
      	Shareholder
      Approval of Plan 	17
      
	9.2
      	Amendment
      of Option or Plan 	17
      
	9.3
      	Shareholder
      Approval 	18
      
	9.4
      	Disinterested
      Shareholder Approval 	18
      
	  	  	  
	SECTION
      10 CONDITIONS PRECEDENT TO ISSUANCE OF OPTIONS AND SHARES 	19
      
	10.1
      	Compliance
      with Laws 	19
      
	10.2
      	Obligation
      to Obtain Regulatory Approvals 	19
      
	10.3
      	Inability
      to Obtain Regulatory Approvals 	19
      
	10.4
      	U.S.
      Regulatory Approvals 	19
      
	  	  	  
	SECTION
      11 ADJUSTMENTS AND TERMINATION 	19
      
	11.1
      	Termination
      of Plan 	19
      
	11.2
      	No
      Grant During Suspension of Plan 	20
      
	11.3
      	Alteration
      in Capital Structure 	20
      
	11.4
      	Triggering
      Events 	20
      
	11.5
      	Notice
      of Termination by Triggering Event 	21
      
	  	  	  
	SECTION
      12 CALIFORNIA OPTION GRANTS 	21
      
	12.1
      	Application
      of this Section 	21
      
	12.2
      	Minimum
      Exercise Price 	21
      
	12.3
      	Minimum
      Vesting Schedule 	21
      
	12.4
      	Maximum
      Exercise Period 	21
      
	12.5
      	Minimum
      Post-Termination Exercise Period 	21
      
	12.6
      	Additional
      Shareholder Approval 	22
      


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STOCK OPTION PLAN 

SECTION 1
DEFINITIONS AND INTERPRETATION 

1.1 Definitions 

As used herein, unless there is something in the subject matter
or context inconsistent therewith, the following terms shall have the meanings
set forth below: 

	(a) 	
      “Administrator” means such Executive or Employee of the
      Company as may be designated as Administrator by the Committee from time
      to time, if any.

	 	 
	(b) 	
      “Associate” means, where used to indicate a relationship
      with any person:




	 	(i) 	
      any relative, including the spouse of that person or a
      relative of that person’s spouse, where the relative has the same home as
      the person;

	 	 	 
	 	(ii) 	
      any partner, other than a limited partner, of that
      person;

	 	 	 
	 	(iii) 	
      any trust or estate in which such person has a
      substantial beneficial interest or as to which such person serves as
      trustee or in a similar capacity; and

	 	 	 
	 	(iv) 	
      any corporation of which such person beneficially owns or
      controls, directly or indirectly, voting securities carrying more than 10%
      of the voting rights attached to all outstanding voting securities of the
      corporation.




	(c) 	
      “Black-Out” means a restriction imposed by the Company on
      all or any of its directors, officers, employees, insiders or persons in a
      special relationship whereby they are to refrain from trading in the
      Company’s securities until the restriction has been lifted by the
      Company.

	 	 
	(d) 	
      “Black-Out Expiration Term” means the period of time that
      commences with the end of a Black- Out period and ends ten business days
      following the end of the Black-Out period.

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

	 	 
	(f) 	
      “Change of Control” means an occurrence when
    either:




	 	(i) 	
      a Person or Entity, other than the current “control
      person” of the Company (as that term is defined in the Securities
      Act), becomes a “control person” of the Company; or

	 	 	 
	 	(ii) 	
      a majority of the directors elected at any annual or
      extraordinary general meeting of shareholders of the Company are not
      individuals nominated by the Company’s then-incumbent
  Board.




	(g) 	
      “Committee” means a committee of the Board appointed in
      accordance with this Plan or if no such committee is appointed, the Board
      itself.

	 	 
	(h) 	
      “Company” means Response Biomedical
  Corp.



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	(i) 	
      “Consultant” means any individual who is engaged to
      provide ongoing consulting services and is permitted to receive Options
      under applicable Regulatory Rules in reliance upon an exemption from
      applicable prospectus requirements and
includes:




	 	(i) 	
      a corporation of which the individual is an employee or
      shareholder or a partnership of which the individual is an employee or
      partner (a “Consultant Entity”); or

	 	 	 
	 	(ii) 	
      an RRSP or RRIF established by or for the individual
      under which he or she is the beneficiary.




	(j) 	
      “Disability” means a medically determinable physical or
      mental impairment expected to result in death or to last for a continuous
      period of not less than 12 months, and which causes an individual to be
      unable to engage in any substantial gainful activity, or any other
      condition of impairment that the Committee, acting reasonably, determines
      constitutes a disability.

	 	 
	(k) 	
      “Disinterested Shareholder Approval” means disinterested
      shareholder approval as defined in the polices of the TSX.

	 	 
	(l) 	
      “Employee” means:




	 	(i) 	
      an individual who works full-time or part-time for the
      Company or any Subsidiary and such other individual as may, from time to
      time, be permitted by applicable Regulatory Rules to be granted Options as
      an employee or as an equivalent thereto; or

	 	 	 
	 	(ii) 	
      an individual who works for the Company or any Subsidiary
      either full-time or on a continuing and regular basis for a minimum amount
      of time per week providing services normally provided by an employee and
      who is subject to the same control and direction by the Company or any
      Subsidiary over the details and methods of work as an employee of the
      Company or any Subsidiary, but for whom income tax deductions are not made
      at source,



and includes: 

	 	(iii) 	
      a corporation wholly-owned by such individual;
  and

	 	 	 
	 	(iv) 	
      any RRSP or RRIF established by or for such individual
      under which he or she is the beneficiary.




	(m) 	
      “Executive” means an individual who is a director or
      officer of the Company or a Subsidiary, and
includes:




	 	(i) 	
      a corporation wholly-owned by such individual;
  and

	 	 	 
	 	(ii) 	
      any RRSP or RRIF established by or for such individual
      under which he or she is the beneficiary.




	(n) 	
      “Exercise Notice” means the written notice of the
      exercise of an Option, in the form set out as Schedule “B” hereto, duly
      executed by the Option Holder.

	 	 
	(o) 	
      “Exercise Period” means the period during which a
      particular Option may be exercised and is the period from and including
      the Grant Date through to and including the Expiry Time on the
    Expiry



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      Date provided, however, that no Option can be exercised
      unless and until all necessary Regulatory Approvals have been
    obtained.

	 	 
	(p) 	
      “Exercise Price” means the price at which an Option is
      exercisable as determined in accordance with section 5.3.

	 	 
	(q) 	
      “Expiry Date” means the date the Option expires as set
      out in the Option Certificate or as otherwise determined in accordance
      with the terms of this Plan.

	 	 
	(r) 	
      “Expiry Time” means the time the Option expires on the
      Expiry Date, which is 5:00 p.m. local time in Vancouver, British Columbia
      on the Expiry Date.

	 	 
	(s) 	
      “Grant Date” means the date on which the Committee grants
      a particular Option, which is the date the Option comes into effect
      provided however that no Option can be exercised unless and until all
      necessary Regulatory Approvals have been obtained.

	 	 
	(t) 	
      “Insider” means an insider as that term is defined in the
      Securities Act ;

	 	 
	(u) 	
      “Market Value” means the market value of the Shares as
      determined in accordance with section 5.3.

	 	 
	(v) 	
      “Option” means an incentive share purchase option granted
      pursuant to this Plan entitling the Option Holder to purchase Shares of
      the Company.

	 	 
	(w) 	
      “Option Certificate” means the certificate, in
      substantially the form set out as Schedule “A” hereto, or in such other
      form or forms as may be adopted by the Committee from time to time,
      evidencing the Option.

	 	 
	(x) 	
      “Option Holder” means a Person or Entity who holds an
      unexercised and unexpired Option or, where applicable, the Personal
      Representative of such person.

	 	 
	(y) 	
      “Outstanding Issue” means the number of Shares that are
      outstanding (on a non-diluted basis) immediately prior to the Share
      issuance or grant of Option in question.

	 	 
	(z) 	
      “Person or Entity” means an individual, natural person,
      corporation, government or political subdivision or agency of a
      government, and where two or more persons act as a partnership, limited
      partnership, syndicate or other group for the purpose of acquiring,
      holding or disposing of securities of an issuer, such partnership, limited
      partnership, syndicate or group shall be deemed to be a Person or
      Entity.

	 	 
	(aa) 	
      “Personal Representative”
means:




	 	(i) 	
      in the case of a deceased Option Holder, the executor or
      administrator of the deceased duly appointed by a court or public
      authority having jurisdiction to do so; and

	 	 	 
	 	(ii) 	
      in the case of an Option Holder who for any reason is
      unable to manage his or her affairs, the person entitled by law to act on
      behalf of such Option Holder.




	(bb) 	
      “Plan” means this stock option plan as from time to time
      amended.



- 6 - 





	(cc) 	
      “Regulatory Approvals” means any necessary approvals of
      the Regulatory Authorities as may be required from time to time for the
      implementation, operation or amendment of this Plan or for the Options
      granted from time to time hereunder.

	 	 
	(dd) 	
      “Regulatory Authorities” means all organized trading
      facilities on which the Shares are listed, including the TSX, and all
      securities commissions or similar securities regulatory authorities having
      jurisdiction over the Company, this Plan or the Options granted from time
      to time hereunder.

	 	 
	(ee) 	
      “Regulatory Rules” means all corporate and securities
      laws, regulations, rules, policies, notices, instruments and other orders
      of any kind whatsoever which may, from time to time, apply to the
      implementation, operation or amendment of this Plan or the Options granted
      from time to time hereunder including, without limitation, those of the
      applicable Regulatory Authorities .

	 	 
	(ff) 	
      “Securities Act ” means the
      Securities Act (British Columbia), RSBC 1996, c.418 as from
      time to time amended.

	 	 
	(gg) 	
      “Share” or “Shares” means, as the case may be, one or
      more common shares without par value in the capital stock of the
      Company.

	 	 
	(hh) 	
      “Subsidiary” means a wholly-owned or controlled
      subsidiary corporation of the Company.

	 	 
	(ii) 	
      “Triggering Event” means:




	 	(i) 	
      the dissolution, liquidation or wind-up of the
      Company;

	 	 	 
	 	(ii) 	
      a merger, amalgamation, arrangement or reorganization of
      the Company with one or more corporations as a result of which,
      immediately following such event, the shareholders of the Company as a
      group, as they were immediately prior to such event, are expected to hold
      less than a majority of the outstanding capital stock of the surviving
      corporation;

	 	 	 
	 	(iii) 	
      a bona fide third party offer for Shares pursuant to
      which an offeror offers to purchase all or substantially all of the Shares
      of the Company;

	 	 	 
	 	(iv) 	
      a Change of Control of the Company;

	 	 	 
	 	(v) 	
      the sale or other disposition of all or substantially all
      of the assets of the Company; or

	 	 	 
	 	(vi) 	
      a material alteration of the capital structure of the
      Company which, in the opinion of the Committee, is of such a nature that
      it is not practical or feasible to make adjustments to this Plan or to the
      Options granted hereunder to permit the Plan and Options granted hereunder
      to stay in effect.




	(jj) 	
      “TSX” means the Toronto Stock Exchange.

	 	 
	(kk) 	
      “United States” means the United States of America, its
      territories and possessions, any state of the United States, and the
      District of Columbia.

	 	 
	(ll) 	
      “U.S. Eligible Consultant” means a Consultant that is a
      natural person that provides bona fide services to the
      Company, and such services are not in connection with the offer or sale of
      securities



- 7 - 





		
      in a capital-raising transaction and do not directly or
      indirectly promote or maintain a market for the Company’s
    securities.

	 	 
	(mm) 	
      “U.S. Person” means a U.S. person within the meaning of
      Regulation S adopted pursuant to the U.S. Securities Act, which definition
      includes, but is not limited to, a natural person resident in the United
      States, a partnership or corporation organized or incorporated under the
      laws of the United States, or an estate or trust of which any executor,
      administrator or trustee is a U.S. person.

	 	 
	(nn) 	
      “U.S. Securities Act” means the United States Securities
      Act of 1933, as amended.

	 	 
	(oo) 	
      “Vest” or “Vesting” means that portion of the Option
      granted to the Option Holder which is available to be exercised by the
      Option Holder at any time and from time to time.



1.2 Choice of Law 

The Plan is established under, and the provisions of the Plan
shall be subject to and interpreted and construed in accordance with, the laws
of the Province of British Columbia. The Company and each Option Holder hereby
attorn to the jurisdiction of the Courts of British Columbia. 

1.3 Headings 

The headings used herein are for convenience only and are not
to affect the interpretation of the Plan. 

SECTION 2 
GRANT OF OPTIONS 

2.1 Grant of Options 

The Committee shall, from time to time in its sole discretion,
grant Options to such Persons or Entities and on such terms and conditions as
are permitted under this Plan. 

2.2 Record of Option Grants 

The Committee shall be responsible to maintain a record of all
Options granted under this Plan and such record shall contain, in respect of
each Option: 

	(a) 	
      the name and address of the Option Holder;

	 	 
	(b) 	
      the category (Executive, Employee or Consultant) under
      which the Option was granted to him, her or it;

	 	 
	(c) 	
      the Grant Date and Expiry Date of the Option;

	 	 
	(d) 	
      the number of Shares which may be acquired on the
      exercise of the Option and the Exercise Price of the Option;

	 	 
	(e) 	
      the vesting and other additional terms, if any, attached
      to the Option; and

	 	 
	(f) 	
      the particulars of each and every time the Option is
      exercised.



- 8 - 




2.3 Effect of Plan 

All Options granted pursuant to the Plan shall be subject to
the terms and conditions of the Plan notwithstanding the fact that the Option
Certificates issued in respect thereof do not expressly contain such terms and
conditions but instead incorporate them by reference to the Plan. The Option
Certificates will be issued for convenience only and in the case of a dispute
with regard to any matter in respect thereof, the provisions of the Plan and the
records of the Company shall prevail over the terms and conditions in the Option
Certificate, save and except as noted below. 

SECTION 3
PURPOSE AND PARTICIPATION 

3.1 Purpose of Plan 

The purpose of the Plan is to provide the Company with a
share-related mechanism to attract, retain and motivate qualified Executives,
Employees and Consultants, to incent such individuals to contribute toward the
long term goals of the Company, and to encourage such individuals to acquire
Shares of the Company as long term investments. 

3.2 Participation in Plan 

The Committee shall, from time to time and in its sole
discretion, determine those Executives, Employees and Consultants, if any, to
whom Options are to be granted; provided, however, that no Option may be granted
to a Consultant that is in the United States or that is a U.S. Person unless
such Consultant is a U.S. Eligible Consultant. 

3.3 Limits on Option Grants 

The number of Shares issuable to any one Option Holder under
the Plan, together with all of the Company’s other previously established or
proposed share compensation arrangements, shall not exceed 5% of the total
number of issued and outstanding common shares in the capital of the Company on
a non-diluted basis. The number of Shares which may be issued to Insiders under
the Plan, together with all of the Company’s other previously established or
proposed share compensation arrangements, in aggregate, shall not at any time
exceed 10% of the Outstanding Issue. The number of Shares which may be issuable
under the Plan, together with all of the Company’s other previously established
or proposed share compensation arrangements, within a one-year period: 

	 	(a) 	
      to Insiders in aggregate, shall not exceed 10% of the
      Outstanding Issue;

	 	 	 
	 	(b) 	
      to any one Option Holder who is an Insider and any
      Associates of such Insider, shall not exceed 5% of the Outstanding Issue;
      and

	 	 	 
	 	(c) 	
      to any non-employee director, shall not exceed 1% of the
      Outstanding Issue.



For the purposes of this section, Options issued pursuant to an
entitlement granted prior to the Option Holder becoming an Insider may be
excluded in determining the number of Shares issuable to Insiders. 

3.4 Notification of Grant 

Following the granting of an Option, the Administrator shall,
within a reasonable period of time, notify the Option Holder in writing of the
grant and shall enclose with such notice the Option Certificate representing the
Option so granted. In no case will the Company be required to deliver an Option
Certificate to an 

- 9 - 




Option Holder until such time as the Company has obtained all
necessary Regulatory Approvals for the grant of the Option. 

3.5 Copy of Plan 

Each Option Holder, concurrently with the notice of the grant
of the first Option granted to the Option Holder, shall be provided with a copy
of the Plan. Upon request from any Option Holder, a copy of any amendment
to the Plan shall be promptly provided by the Administrator to the requesting
Option Holder. 

3.6 Limitation on Service 

The Plan does not give any Option Holder that is an Executive
the right to serve or continue to serve as an Executive of the Company or any
Subsidiary, nor does it give any Option Holder that is an Employee or Consultant
the right to be or to continue to be employed or engaged by the Company or any
Subsidiary. 

3.7 No Obligation to Exercise 

Option Holders shall be under no obligation to exercise Options
granted under this Plan. 

3.8 Agreement 

The Company and every Option Holder granted an Option hereunder
shall be bound by and subject to the terms and conditions of this Plan. By
accepting an Option granted hereunder, the Option Holder has expressly agreed
with the Company to be bound by the terms and conditions of this Plan. In the
event that the Option Holder receives his, her or its Options pursuant to an
oral or written agreement with the Company or a Subsidiary, whether such
agreement is an employment agreement, consulting agreement or any other kind of
agreement of any kind whatsoever, the Option Holder acknowledges that in the
event of any inconsistency between the terms relating to the grant of such
Options in that agreement and the terms attaching to the Options as provided for
in this Plan, the terms provided for in this Plan shall prevail and the other
agreement shall be deemed to have been amended accordingly. 

3.9 Notice 

Any notice, delivery or other correspondence of any kind
whatsoever to be provided by the Company to an Option Holder will be deemed to
have been provided if provided to the last home address, fax number or email
address of the Option Holder in the records of the Company and the Company shall
be under no obligation to confirm receipt or delivery. 

SECTION 4
NUMBER OF SHARES UNDER PLAN 

4.1 Committee to Approve Issuance of
Shares 

The Committee shall approve by resolution the issuance of all
Shares to be issued to Option Holders upon the exercise of Options, such
authorization to be effective as of the Grant Date of such Options. 

4.2 Number of Shares 

Subject to adjustment as provided for herein, the number of
Shares which will be available for purchase pursuant to Options granted pursuant
to this Plan will not exceed 17,000,000 Shares, less any Shares issued upon the
exercise of options to acquire Shares granted under either the Company’s 1996
Stock Option Plan or its 2005 Stock Option Plan. 

- 10 - 




4.3 Fractional Shares 

No fractional shares shall be issued upon the exercise of any
Option and, if as a result of any adjustment, an Option Holder would become
entitled to a fractional share, such Option Holder shall have the right to
purchase only the next lowest whole number of Shares and no payment or other
adjustment will be made for the fractional interest. 

SECTION 5
TERMS AND CONDITIONS OF OPTIONS 

5.1 Exercise Period of Option 

Except as otherwise provided in this Plan, the Grant Date and
the Expiry Date of an Option shall be the dates fixed by the Committee at the
time the Option is granted and shall be set out in the Option Certificate issued
in respect of such Option. 

5.2 Number of Shares Under Option


The number of Shares which may be purchased pursuant to an
Option shall be determined by the Committee and shall be set out in the Option
Certificate issued in respect of the Option. 

5.3 Exercise Price of Option 

The Exercise Price at which an Option Holder may purchase a
Share upon the exercise of an Option shall be determined by the Committee and
shall be set out in the Option Certificate issued in respect of the Option. The
Exercise Price shall not be less than the Market Value of the Shares as of the
Grant Date. The Market Value of the Shares for a particular Grant Date shall be
determined as follows: 

	(a) 	
      for each organized trading facility on which the Shares
      are listed, Market Value will be the closing price of the Shares on such
      organized trading facility on the trading day immediately preceding the
      Grant Date;

	 	 
	(b) 	
      if the Company’s Shares are listed on more than one
      organized trading facility, the Market Value shall be the Market Value as
      determined in accordance with subparagraph (a) above for the primary
      organized trading facility on which the Shares are listed, as determined
      by the Committee, subject to any adjustments as may be required to secure
      all necessary Regulatory Approvals;

	 	 
	(c) 	
      if the Company’s Shares are listed on one or more
      organized trading facilities but have not traded during the ten trading
      days immediately preceding the Grant Date, then the Market Value will be,
      subject to any adjustments as may be required to secure all necessary
      Regulatory Approvals, such value as is determined by the Committee;
    and

	 	 
	(d) 	
      if the Company’s Shares are not listed on any organized
      trading facility, then the Market Value will be, subject to any
      adjustments as may be required to secure all necessary Regulatory
      Approvals, such value as is determined by the Committee to be the fair
      value of the Shares, taking into consideration all factors that the
      Committee deems appropriate, including, without limitation, recent sale
      and offer prices of the Shares in private transactions negotiated at arms’
      length.



Notwithstanding anything else contained herein, in no case will
the Market Value be less than the minimum prescribed by each of the organized
trading facilities that would apply to the Company on the Grant Date in
question. 

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5.4 Termination of Option 

Subject to such other terms or conditions that may be attached
to Options granted hereunder, an Option Holder may exercise an Option in whole
or in part at any time and from time to time during the Exercise Period. Any
Option or part thereof not exercised within the Exercise Period shall terminate
and become null, void and of no effect as of the Expiry Time on the Expiry Date.
Subject to Section 7.1, the Expiry Date of an Option shall be the earlier of the
date so fixed by the Committee at the time the Option is granted as set out in
the Option Certificate and the date established, if applicable, in paragraphs
(a) or (b) below or sections 6.2, 6.3, 6.4, or 11.4 of this Plan: 

	(a) 	
      Ceasing to Hold Office - In the event that
      the Option Holder holds his or her Option as an Executive and such Option
      Holder ceases to hold such position other than by reason of death or
      Disability, the Expiry Date of the Option shall be, unless otherwise
      expressly provided for in the Option Certificate, the 90th day following
      the date the Option Holder ceases to hold such position unless the Option
      Holder ceases to hold such position as a result
of:




	 	(i) 	
      ceasing to meet the qualifications set forth in the
      corporate legislation applicable to the Company;

	 	 	 
	 	(ii) 	
      a special resolution having been passed by the
      shareholders of the Company removing the Option Holder as a director of
      the Company or any Subsidiary; or

	 	 	 
	 	(iii) 	
      an order made by any Regulatory Authority having
      jurisdiction to so order;



in which case the Expiry Date shall be
the date the Option Holder ceases to hold such position; OR 

	(b) 	
      Ceasing to be Employed or Engaged - In the
      event that the Option Holder holds his or her Option as an Employee or
      Consultant and such Option Holder ceases to hold such position other than
      by reason of death or Disability, the Expiry Date of the Option shall be,
      unless otherwise expressly provided for in the Option Certificate, the
      90th day following the date the Option Holder ceases to hold such
      position, unless the Option Holder ceases to hold such position as a
      result of:




	 	(i) 	
      termination for cause;

	 	 	 
	 	(ii) 	
      resigning or terminating his or her position;
or

	 	 	 
	 	(iii) 	
      an order made by any Regulatory Authority having
      jurisdiction to so order;



in which case the Expiry Date shall be the date the Option
Holder ceases to hold such position. 

In the event that the Option Holder ceases to hold the position
of Executive, Employee or Consultant for which the Option was originally
granted, but comes to hold a different position as an Executive, Employee or
Consultant prior to the expiry of the Option, the Committee may, in its sole
discretion, choose to permit the Option to stay in place for that Option Holder
with such Option then to be treated as being held by that Option Holder in his
or her new position and such will not be considered to be an amendment to the
Option in question requiring the consent of the Option Holder under section 9.2
of this Plan. Notwithstanding anything else contained herein, in no case will an
Option be exercisable later than the Expiry Date of the Option. 

5.5 Vesting of Option and Acceleration


The vesting schedule for an Option, if any, shall be determined
by the Committee and shall be set out in the Option Certificate issued in
respect of the Option. The Committee may elect to accelerate the vesting 

- 12 - 




schedule of one or more Options in connection with a Triggering
Event in accordance with Section 11.4 of this Plan, and such acceleration will
not be considered an amendment to the Option in question requiring the consent
of the Option Holder under section 9.2 of this Plan. 

5.6 Additional Terms 

Subject to all applicable Regulatory Rules and all necessary
Regulatory Approvals, the Committee may attach additional terms and conditions
to the grant of a particular Option, such terms and conditions to be set out in
the Option Certificate. The Option Certificates will be issued for convenience
only, and in the case of a dispute with regard to any matter in respect thereof,
the provisions of this Plan and the records of the Company shall prevail over
the terms and conditions in the Option Certificate, save and except as noted
below. 

5.7 U.S. Option Holders 

Any Option granted under the Plan to an Option Holder who is a
citizen or resident of the United States (a “U.S. Option Holder”) within the
meaning of the U.S. Internal Revenue Code of 1986, as amended, (the “Code”),
will be an incentive stock option (an “ISO”) within the meaning of Section 422
of the Code if so designated by the Company in the Option Certificate evidencing
such Option. No provision of this Plan, as it may be applied to a U.S. Option
Holder with respect to Options which are designated as ISOs, shall be construed
so as to be inconsistent with any provision of Section 422 of the Code. Grants
of Options to U.S. Option Holders which are not designated as an ISO in the
Option Certificate evidencing such Option or otherwise do not qualify as ISOs
will be treated as nonstatutory stock options for U.S. federal tax purposes.
Notwithstanding anything in this Plan contained to the contrary, the following
provisions shall apply to ISOs granted to each U.S. Option Holder: 

	(a) 	
      subject to adjustment as provided for in this Plan, the
      number of Shares which will be available for granting ISOs will not exceed
      the number of Shares available for purchase pursuant to Options granted
      pursuant to the Plan set out in Section 4.2;

	 	 
	(b) 	
      ISOs shall only be granted to individual U.S. Option
      Holders who are, at the time of grant, “employees” of the Company within
      the meaning of the Code (or of any “subsidiary” of the Company within the
      meaning of section 424(f) of the Code);

	 	 
	(c) 	
      the aggregate fair market value (determined as of the
      time an ISO is granted) of the Shares subject to ISOs exercisable for the
      first time by a U.S. Option Holder during any calendar year under this
      Plan (and all other plans of the Company, any “subsidiary” of the Company
      within the meaning of Section 424(f) of the Code and any “parent” of the
      Company within the meaning of Section 424(e) of the Code) shall not exceed
      One Hundred Thousand Dollars in U.S. funds (U.S.$100,000);

	 	 
	(d) 	
      the Exercise Price per Share for each ISO granted to a
      U.S. Option Holder pursuant to this Plan shall be not less than fair
      market value of one Share on the Grant Date, as determined in good faith
      by the Committee at such time ;

	 	 
	(e) 	
      the Exercise Period of an ISO shall not exceed ten (10)
      years from the Grant Date;

	 	 
	(f) 	
      if a U.S. Option Holder who has been granted an ISO
      ceases to be an “employee” of the Company within the meaning of the Code
      (or of any “subsidiary” of the Company within the meaning of section
      424(f) of the Code) for any reason other than the death, Disability or a
      reason described in clause (i), (ii), or (iii) of Section 5.4(a) or
      5.4(b), such ISO may be exercised (to the extent such ISO was exercisable
      on the date of termination) by such U.S. Option Holder for a period of
      three (3) months after the date of termination (but in no event beyond the
      term of such ISO);



- 13 - 





	(g) 	
      if any U.S. Option Holder to whom an ISO is to be granted
      under the Plan at the time of the grant of such ISO is the owner, directly
      or constructively, of shares possessing more than ten percent (10%) of the
      total combined voting power of all classes of shares of the Company, then
      the following special provisions shall be applicable to the ISO granted to
      such Option Holder:




	 	(i) 	
      the Exercise Price per Share with respect to such ISO
      shall not be less than one hundred ten percent (110%) of the fair market
      value of one Share on the Grant Date, as determined in good faith by the
      Committee at such time; and

	 	 	 
	 	(ii) 	
      the Exercise Period of such ISO shall not exceed five (5)
      years from the Grant Date;




	(h) 	
      no ISO may be granted hereunder to a U.S. Option Holder
      following the expiration of ten (10) years after the date on which this
      Plan is adopted by the Board or the date on which the Plan is approved by
      the shareholders of the Company, whichever is earlier; and

	 	 
	(i) 	
      no ISO granted to a U.S. Option Holder under the Plan
      shall become exercisable unless and until the Plan shall have been
      approved by the shareholders of the Company. In the event that this Plan
      is not approved by the shareholders of the Company within twelve (12)
      months before or after the date on which this Plan is adopted by the
      Board, any ISO will automatically be deemed to be a nonstatutory stock
      option.



SECTION 6 
TRANSFERABILITY OF OPTIONS 

6.1 Non-transferable 

Except as provided otherwise in this Section 6, Options are
non-assignable and non-transferable. 

6.2 Death of Option Holder 

In the event of the Option Holder’s death, any Options held by
such Option Holder shall pass to the Personal Representative of the Option
Holder and shall be exercisable by the Personal Representative on or before the
date which is the earlier of six months following the date of death and the
applicable Expiry Date. 

6.3 Disability of Option Holder


If the employment or engagement of an Option Holder as an
Employee or Consultant or the position of an Option Holder as a director or
officer of the Company or a Subsidiary is terminated by the Company by reason of
such Option Holder’s Disability, any Options held by such Option Holder shall be
exercisable by such Option Holder or by the Personal Representative on or before
the date which is the earlier of six months following the termination of
employment, engagement or appointment as a director or officer and the
applicable Expiry Date. 

6.4 Disability and Death of Option
Holder 

If an Option Holder has ceased to be employed, engaged or
appointed as a director or officer of the Company or a Subsidiary by reason of
such Option Holder’s Disability and such Option Holder dies within six months
after the termination of such engagement, any Options held by such Option Holder
that could have been exercised immediately prior to his or her death shall pass
to the Personal Representative of such Option Holder and shall be exercisable by
the Personal Representative on or before the date which is the earlier of six
months following the death of such Option Holder and the applicable Expiry Date.
For 

- 14 - 




purposes of this Section 6.4, with respect to any U.S.
Participant holding ISOs, “Disability” means, with respect to any such U.S.
Participant, that such U.S. Participant is unable to engage in any substantial
gainful 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 twelve (12) months.
The preceding definition of the term “Disability” is intended to comply with,
and will be interpreted consistently with, sections 22(e)(3) and 422(c)(6) of
the Code. 

6.5 Vesting 

Unless the Committee determines otherwise, Options held by or
exercisable by a Personal Representative shall, during the period prior to their
termination, continue to vest in accordance with any vesting schedule to which
such Options are subject. 

6.6 Deemed Non-Interruption of
Engagement 

Employment or engagement by the Company shall be deemed to
continue intact during any military or sick leave or other bona fide leave of
absence if the period of such leave does not exceed 90 days or, if longer, for
so long as the Option Holder’s right to re-employment or re-engagement by the
Company is guaranteed either by statute or by contract. If the period of such
leave exceeds 90 days and the Option Holder’s re-employment or re-engagement is
not so guaranteed, then his or her employment or engagement shall be deemed to
have terminated on the ninety-first day of such leave. 

SECTION 7 
EXERCISE OF OPTION 

7.1 Exercise of Option 

An Option may be exercised only by the Option Holder or the
Personal Representative of any Option Holder. An Option Holder or the Personal
Representative of any Option Holder may exercise an Option in whole or in part
at any time and from time to time during the Exercise Period up to the Expiry
Time on the Expiry Date by delivering to the Administrator the required Exercise
Notice, the applicable Option Certificate and a certified cheque or bank draft
payable to the Company in an amount equal to the aggregate Exercise Price of the
Shares then being purchased pursuant to the exercise of the Option. Except where
not permitted by the TSX, where an Option otherwise would expire during a
Black-Out period or during a Black-Out Expiration Term, the Expiry Date of such
Option will automatically be deemed to be extended to the end of the applicable
Black-Out Expiration Term. 

7.2 Issue of Share Certificates


As soon as reasonably practicable following the receipt of the
Exercise Notice, the Administrator shall cause to be delivered to the Option
Holder a certificate for the Shares so purchased. If the number of Shares so
purchased is less than the number of Shares subject to the Option Certificate
surrendered, the Administrator shall also provide a new Option Certificate for
the balance of Shares available under the Option to the Option Holder concurrent
with delivery of the Share Certificate. 

7.3 No Rights as Shareholder 

Until the date of the issuance of the certificate for the
Shares purchased pursuant to the exercise of an Option, no right to vote or
receive dividends or any other rights as a shareholder shall exist with respect
to such Shares, notwithstanding the exercise of the Option, unless the Committee
determines otherwise. In the event of any dispute over the date of the issuance
of the certificates, the decision of the Committee shall be final, conclusive
and binding. 

- 15 - 




SECTION 8 
ADMINISTRATION 

8.1 Board or Committee 

The Plan shall be administered by the Board, by a Committee of
the Board appointed in accordance with section 8.2 below, or by an Administrator
appointed in accordance with subsection 8.4(b) . 

8.2 Appointment of Committee 

The Board may at any time appoint a Committee, consisting of
not less than two of its members, to administer the Plan on behalf of the Board
in accordance with such terms and conditions as the Board may prescribe,
consistent with this Plan. Once appointed, the Committee shall continue to serve
until otherwise directed by the Board. From time to time, the Board may increase
the size of the Committee and appoint additional members, remove members (with
or without cause) and appoint new members in their place, fill vacancies however
caused, or remove all members of the Committee and thereafter directly
administer the Plan. 

8.3 Quorum and Voting 

A majority of the members of the Committee shall constitute a
quorum and, subject to the limitations in this Section 8, all actions of the
Committee shall require the affirmative vote of members who constitute a
majority of such quorum. Members of the Committee may vote on any matters
affecting the administration of the Plan or the grant of Options pursuant to the
Plan, except that no such member shall act upon the granting of an Option to
himself or herself (but any such member may be counted in determining the
existence of a quorum at any meeting of the Committee during which action is
taken with respect to the granting of Options to that member). The Committee may
approve matters by written resolution signed by a majority of the quorum. 

8.4 Powers of Committee 

The Committee (or the Board if no Committee is in place) shall
have the authority to do the following: 

	(a) 	
      administer the Plan in accordance with its
  terms;

	 	 
	(b) 	
      appoint or replace the Administrator from time to
      time;

	 	 
	(c) 	
      determine all questions arising in connection with the
      administration, interpretation and application of the Plan, including all
      questions relating to the Market Value of the Shares;

	 	 
	(d) 	
      correct any defect, supply any information or reconcile
      any inconsistency in the Plan in such manner and to such extent as shall
      be deemed necessary or advisable to carry out the purposes of the
    Plan;

	 	 
	(e) 	
      prescribe, amend, and rescind rules and regulations
      relating to the administration of the Plan;

	 	 
	(f) 	
      determine the duration and purposes of leaves of absence
      from employment or engagement by the Company which may be granted to
      Option Holders without constituting a termination of employment or
      engagement for purposes of the Plan;

	 	 
	(g) 	
      do the following with respect to the granting of
      Options:



- 16 - 





	 	(i) 	
      determine the Executives, Employees or Consultants to
      whom Options shall be granted, based on the eligibility criteria set out
      in this Plan;

	 	 	 
	 	(ii) 	
      determine the terms of the Option to be granted to an
      Option Holder including, without limitation, the Grant Date, Expiry Date,
      Exercise Price and vesting schedule (which need not be identical with the
      terms of any other Option);

	 	 	 
	 	(iii) 	
      subject to any necessary Regulatory Approvals and section
      9.2, amend the terms of any Options;

	 	 	 
	 	(iv) 	
      determine when Options shall be granted; and

	 	 	 
	 	(v) 	
      determine the number of Shares subject to each
    Option;




	(h) 	
      accelerate the vesting schedule of any Option previously
      granted; and

	 	 
	(i) 	
      make all other determinations necessary or advisable, in
      its sole discretion, for the administration of the
Plan.



8.5 Administration by Committee


All determinations made by the Committee in good faith shall be
final, conclusive and binding upon all persons. The Committee shall have all
powers necessary or appropriate to accomplish its duties under this Plan. 

8.6 Interpretation 

The interpretation by the Committee of any of the provisions of
the Plan and any determination by it pursuant thereto shall be final, conclusive
and binding and shall not be subject to dispute by any Option Holder. No member
of the Committee or any person acting pursuant to authority delegated by it
hereunder shall be personally liable for any action or determination in
connection with the Plan made or taken in good faith and each member of the
Committee and each such person shall be entitled to indemnification with respect
to any such action or determination in the manner provided for by the Company.


SECTION 9 
APPROVALS AND AMENDMENT 

9.1 Shareholder Approval of Plan


If required by a Regulatory Authority, this Plan may be made
subject to the approval of a majority of the votes cast at a meeting of the
shareholders of the Company or by a majority of votes cast by disinterested
shareholders at a meeting of shareholders of the Company. Any Options granted
under this Plan prior to such time will not be exercisable or binding on the
Company unless and until such shareholder approval is obtained. 

9.2 Amendment of Option or Plan


The Company retains the right to amend or terminate the terms
and conditions of the Plan or Option, as applicable, by resolution of the
Committee (the “Amendment Procedure”). Any amendment to the Plan shall take
effect only with respect to Options granted after the effective date of such
amendment, provided that it may apply to any outstanding Options with the mutual
consent of the Company and the Option Holder to whom such Options have been
granted. Without limiting the generality of the foregoing, the Committee may use
the Amendment Procedure without seeking shareholder approval when: 

- 17 - 





	(a) 	
      altering, extending or accelerating the terms and
      conditions of vesting of any Options;

	 	 
	(b) 	
      accelerating the Expiry Date of Options;

	 	 
	(c) 	
      amending the definitions contained within the
  Plan;

	 	 
	(d) 	
      amending or modifying the mechanics of exercise of
      Options as set forth in Section 5, provided however, payment in full of
      the Exercise Price shall not be so amended or modified;

	 	 
	(e) 	
      effecting amendments of a “housekeeping” or ministerial
      nature including, without limiting the generality of the foregoing, any
      amendment for the purpose of curing any ambiguity, error, inconsistency or
      omission in or from the Plan or any Option Certificate;

	 	 
	(f) 	
      effecting amendments necessary to comply with the
      provisions of Regulatory Rules;

	 	 
	(g) 	
      effecting amendments respecting the administration of the
      Plan;

	 	 
	(h) 	
      effecting amendments necessary to suspend or terminate
      the Plan; and

	 	 
	(i) 	
      any other amendment, whether fundamental or otherwise,
      not requiring shareholder approval under Regulatory
  Rules.



9.3 Shareholder Approval 

Shareholder approval will be required for the following types
of amendments: 

	(a) 	
      amendments that increase the number of Shares issuable
      under the Plan, except such increases by operation of Section 11.3 of the
      Plan;

	 	 
	(b) 	
      any reduction in the Exercise Price of an Option if the
      Option Holder is not an Insider at the time of the proposed amendment;
      and

	 	 
	(c) 	
      amendments required to be approved by shareholders under
      applicable law (including, without limitation, pursuant to Regulatory
      Rules).



9.4 Disinterested Shareholder Approval

Disinterested Shareholder Approval will be required for the
following types of amendments: 

	(a) 	
      amendments to the Plan that could result at any time in
      the number of Shares reserved for issuance under the Plan to Insiders
      exceeding the limits set out in Section 3.3 of this Plan;

	 	 
	(b) 	
      amendments to the Plan that could result at any time in
      the granting to Insiders, within a 12 month period, of a number of options
      exceeding 10% of the outstanding issue;

	 	 
	(c) 	
      any reduction in the Exercise Price of an Option if the
      Option Holder is an Insider at the time of the proposed amendment;
    and

	 	 
	(d) 	
      amendments requiring Disinterested Shareholder Approval
      under applicable law (including, without limitation, pursuant to the
      Regulatory Rules).



- 18 - 




SECTION 10
CONDITIONS PRECEDENT TO ISSUANCE OF
OPTIONS AND SHARES 

10.1 Compliance with Laws 

An Option shall not be granted or exercised, and Shares shall
not be issued pursuant to the exercise of any Option, unless the grant and
exercise of such Option and the issuance and delivery of such Shares comply with
all applicable Regulatory Rules, and such Options and Shares will be subject to
all applicable trading restrictions in effect pursuant to such Regulatory Rules
and the Company shall be entitled to legend the Option Certificates and the
certificates representing such Shares accordingly. 

10.2 Obligation to Obtain Regulatory
Approvals 

In administering this Plan, the Committee will seek any
Regulatory Approvals which may be required. The Committee will not permit any
Options to be granted without first obtaining the necessary Regulatory Approvals
unless such Options are granted conditional upon such Regulatory Approvals being
obtained. The Committee will make all filings required with the Regulatory
Authorities in respect of the Plan and each grant of Options hereunder. 

No Option granted will be exercisable or binding on the Company
unless and until all necessary Regulatory Approvals have been obtained. The
Committee shall be entitled to amend this Plan and the Options granted hereunder
in order to secure any necessary Regulatory Approvals and such amendments will
not require the consent of the Option Holders under section 9.2 of this Plan.


10.3 Inability to Obtain Regulatory
Approvals 

The Company’s inability to obtain Regulatory Approval from any
applicable Regulatory Authority, which Regulatory Approval is deemed by the
Committee to be necessary to complete the grant of Options hereunder, the
exercise of those Options or the lawful issuance and sale of any Shares pursuant
to such Options, shall relieve the Company of any liability with respect to the
failure to complete such transaction. 

10.4 U.S. Regulatory Approvals 

Section 10.2 of this Plan shall not be interpreted to require
the Company to register the Shares issuable pursuant to this Plan under the U.S.
Securities Act or under the securities laws of any state of the United States;
provided, however, that no Options to purchase Shares may be granted in the
United States or to or for the benefit of a U.S. Person, and no Options to
purchase Shares may be exercised in the United States or by or on behalf of a
U.S. Person, unless such Shares have been registered under the U.S. Securities
Act and the securities laws of all applicable states of the United States, or
exemptions from such registration requirements are available. The Company may
require such additional information, representations, warranties and covenants
from an Option Holder, in the Option Certificate, exercise form or otherwise, as
the Company deems necessary or appropriate in order to establish compliance with
all applicable provisions of the U.S. Securities Act and the securities laws of
any state of the United States. 

SECTION 11 
ADJUSTMENTS AND TERMINATION 

11.1 Termination of Plan 

Subject to any necessary Regulatory Approvals, the Committee
may terminate or suspend the Plan. 

- 19 - 




11.2 No Grant During Suspension of Plan


No Option may be granted during any suspension, or after
termination, of the Plan. Suspension or termination of the Plan shall not,
without the consent of the Option Holder, alter or impair any rights or
obligations under any Option previously granted. 

11.3 Alteration in Capital Structure


If there is a material alteration in the capital structure of
the Company and the Shares are consolidated, subdivided, converted, exchanged,
reclassified or in any way substituted for or affected, the Committee shall make
such adjustments to this Plan and to the Options then outstanding under this
Plan as the Committee determines to be appropriate and equitable under the
circumstances, so that the proportionate interest of each Option Holder shall,
to the extent practicable, be maintained as before the occurrence of such event.
Such adjustments may include, without limitation: 

	(a) 	
      a change in the number or kind of shares of the Company
      covered by such Options; and

	 	 
	(b) 	
      a change in the Exercise Price payable per Share
      provided, however, that the aggregate Exercise Price applicable to the
      unexercised portion of existing Options shall not be altered, it being
      intended that any adjustments made with respect to such Options shall
      apply only to the Exercise Price per Share and the number of Shares
      subject thereto.



For purposes of this section 11.3, and without limitation,
neither: 

	(c) 	
      the issuance of additional securities of the Company in
      exchange for adequate consideration (including services); nor

	 	 
	(d) 	
      the conversion of outstanding securities of the Company
      into Shares shall be deemed to be material alterations of the capital
      structure of the Company.



Any adjustment made to any Options pursuant to this section
11.3 shall not be considered an amendment requiring the Option Holder’s consent
for the purposes of Section 9.2 of this Plan. 

11.4 Triggering Events 

Subject to the Company complying with section 11.5 and any
necessary Regulatory Approvals and notwithstanding any other provisions of this
Plan or any Option Certificate, the Committee may, without the consent of the
Option Holder or Holders in question: 

	(a) 	
      accelerate the vesting of all or any portion of the
      unvested Options then issued and outstanding under the Plan;

	 	 
	(b) 	
      cause all or a portion of any of the Options granted
      under the Plan to terminate in connection with a Triggering Event;
    or

	 	 
	(c) 	
      cause all or a portion of any of the Options granted
      under the Plan to be exchanged for incentive stock options of another
      corporation in connection with a Triggering Event in such ratio and at
      such exercise price as the Committee deems appropriate, acting reasonably.
      Any adjustment with respect to the Exercise Price for and number of Common
      Shares subject to an Option granted to a U.S. Participant pursuant to this
      section 11.4(c) will be made so as to comply with, and not create any
      adverse consequences under, sections 424 and 409A of the
  Code.



- 20 - 




Such acceleration, termination or exchange shall not be
considered an amendment requiring the Option Holder’s consent for the purpose of
section 9.2 of the Plan.

11.5 Notice of Termination by Triggering
Event 

In the event that the Committee wishes to cause all or a
portion of any of the Options granted under this Plan to terminate in accordance
with Section 11.4, it must give written notice to the Option Holders in question
not less than 14 days prior to the date on which such Options are to terminate
so as to permit the Option Holder the opportunity to exercise the vested portion
of the Options prior to such termination. 

SECTION 12 
CALIFORNIA OPTION GRANTS 

12.1 Application of this Section


Notwithstanding any other provision of this Plan, the
provisions of sections 12.2 through 12.6 of this Plan shall apply to any Option
granted to a resident of the State of California if, on the Grant Date, (i) the
Shares are not listed on the New York Stock Exchange or the American Stock
Exchange or quoted on the Nasdaq National Market System, and (ii) such Option is
not otherwise exempt from the registration requirements of the California
securities laws. 

12.2 Minimum Exercise Price 

If the Option is granted to an Option Holder that owns
securities possessing more than 10% of the total combined voting power of all
classes of securities of the Company or its parent or subsidiaries possessing
voting power, the Exercise Price of the Option shall not be less than 110% of
the Market Value of the Shares as of the Grant Date. 

12.3 Minimum Vesting Schedule 

The Option must become vested and exercisable at a rate of at
least 20% of the number of Shares underlying the Option per year, with the first
20% becoming vested not later than one year after the Grant Date. 

12.4 Maximum Exercise Period 

The Expiry Date of the Option shall not be later than the tenth
anniversary of the Grant Date. 

12.5 Minimum Post-Termination Exercise
Period 

If the Option Holder ceases to hold the position of Executive,
Employee or Consultant, the Option shall continue to be exercisable until at
least the earlier of the Expiry Date originally provided for in the Option, or
the applicable date set forth below: 

	(a) 	
      if the Option Holder is terminated for cause as defined
      by applicable law, the date of termination ;

	 	 
	(b) 	
      if the Option Holder’s termination is caused by the
      Option Holder’s death or Disability, six months from the date of
      termination; or

	 	 
	(c) 	
      in all other cases, thirty days from the date of
      termination.



- 21 - 




12.6 Additional Shareholder Approval


Unless the holders of a majority of the Company’s outstanding
securities entitled to vote have approved this Plan within 12 months before or
after the date this Plan is adopted, any Option granted to a resident of the
State of California that is subject to the provisions of this Section 12 shall
automatically be rescinded, without any liability to the Company. No Option
granted subject to the provisions of this SECTION 12 shall be exercisable until
such shareholder approval has been obtained. 

- 22 - 




SCHEDULE “A” 

RESPONSE BIOMEDICAL CORP. 

2008 STOCK OPTION PLAN - OPTION CERTIFICATE , 

This Option Certificate is issued pursuant to the provisions of
the 2008 Stock Option Plan (the “Plan”) of Response Biomedical Corp. (the
“Company”) and evidences that · [Name of Option Holder] is the holder (the
“Option Holder”) of an option (the “Option”) to purchase up to · common shares
(the “Shares”) in the capital stock of the Company at a purchase price of Cdn.$·
per Share (the “Exercise Price”). This Option may be exercised at any time and
from time to time from and including the following Grant Date through to and
including up to 5:00 p.m. local time in Vancouver, British Columbia (the “Expiry
Time”) on the following Expiry Date: 

	 	(a) 	
      the Grant Date of this Option is ·, 200 ·; and

	 	 	 
	 	(b) 	
      subject to sections 5.4, 6.2, 6.3, 6.4, 7.1 and 11.4 of
      the Plan, the Expiry Date of this Option is ·, 200
·.



This Option will not be exercisable unless and until it has
vested and then only to the extent that it has vested. The Option will vest in
accordance with the following: 

	 	(a) 	
      · Shares ( ·%) will vest and be exercisable on or after
      the Grant Date;

	 	 	 
	 	(b) 	
      · additional Shares (·%) will
        vest and be exercisable on or after · [date];

	 	 	 
	 	(c) 	
      · additional Shares (·%) will vest and be exercisable on
      or after · [date];

	 	 	 
	 	(d) 	
      · additional Shares (·%) will vest and be exercisable on
      or after · [date];





· [Insert any additional terms here – check to ensure
they comply with TSX policies and applicable securities laws] 
To exercise this Option, the Option Holder must deliver to the
Administrator of the Plan, prior to the Expiry Time on the Expiry Date, an
Exercise Notice, in the form provided in the Plan, which is incorporated by
reference herein, together with the original of this Option Certificate and a
certified cheque or bank draft payable to the Company in an amount equal to the
aggregate of the Exercise Price of the Shares in respect of which this Option is
being exercised. 

This Option Certificate and the Option evidenced hereby is not
assignable, transferable or negotiable and is subject to the detailed terms and
conditions contained in the Plan. This Option Certificate is issued for
convenience only and in the case of any dispute with regard to any matter in
respect hereof, the provisions of the Plan and the records of the Company shall
prevail. 

· [The following MUST be included if is an ISO
option] [This Option is an ISO within the meaning of the Code.]
A-1 




This Option was granted to the Option Holder in his or her
capacity as a ·[pick one: Director, Officer, Employee, Consultant] of the
Company ·[, and shall continue in effect should his or her status change and he
or she continue in a new capacity as a Director, Officer, Employee or Consultant
of the Company]. 

RESPONSE BIOMEDICAL CORP. 

	Per: 		 
	 	Authorized Signatory 


The Option Holder acknowledges receipt of a copy of the Plan
and represents to the Company that the Option Holder is familiar with the terms
and conditions of the Plan, and hereby accepts this Option subject to all of the
terms and conditions of the Plan. The Option Holder agrees to execute, deliver,
file and otherwise assist the Company in filing any report, undertaking or
document with respect to the awarding of the Option and exercise of the Option,
as may be required by the Regulatory Authorities. The Option Holder further
acknowledges that if the Plan has not been approved by the shareholders of the
Company on the Grant Date, this Option is not exercisable until such approval
has been obtained. 

Signature of Option Holder: 

		 	Date Signed:
    	 
	 	 	 	 
	Signature 	 	 	 
	 	 	 	 
	Print Name 	 	 	 
	 	 	 	 
	Address 	 	 	 
	 	 	 	 


A-2 




SCHEDULE “B” 

RESPONSE BIOMEDICAL CORP. 
2008 STOCK OPTION
PLAN 

NOTICE OF EXERCISE OF OPTION 

	TO: 	The Administrator, Stock Option Plan 
	  	[Address] 


The undersigned hereby irrevocably gives notice, pursuant to
the Stock Option Plan (the “Plan”) of Response Biomedical Corp. (the “Company”),
of the exercise of the Option to acquire and hereby subscribes for (cross out
inapplicable item): 

	(a) 	
      all of the Shares; or

	 	 
	(b) 	
      of the Shares;



which are the subject of the Option Certificate attached hereto
(attach your original Option Certificate). 

The undersigned tenders herewith a certified cheque or bank
draft (circle one) payable to “Response Biomedical Corp.” in an amount
equal to the aggregate Exercise Price of the aforesaid Shares and directs the
Company to issue the certificate evidencing said Shares in the name of the
undersigned to be mailed to the undersigned at the following address (provide
full complete address): 

The undersigned acknowledges the Option is not validly
exercised unless this Notice is completed in strict compliance with this form
and delivered to the required address with the required payment prior to 5:00
p.m. local time in Vancouver, B.C. on the Expiry Date of the Option. 

DATED the ______________day of ______________, 20___. 

	 	 
	 	Signature of Option Holder



B-1