gdrzfforms8exhibit4_6070714.htm - Generated by SEC Publisher for SEC Filing







 





EXHIBIT 4.6


 


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., a Yukon 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”) become governed by this
2012 Equity Incentive Plan, as the same may be amended from time to time  (the
“2012 Plan”) and the Retired Plans are terminated. The Company and the Retired
Plan participants will take all steps necessary and make 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. For certainty,
in the case of restricted stock grants made pursuant to the terms of the
Retired Plans, all restricted stock agreements entered into by Retired Plan
participants will remain in full force and effect.


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.
The 2012 Plan shall become effective on the date (the “2012 Plan Approval
Date”) it is adopted by the Board, subject to the approval by the affirmative
vote of at least a majority of the votes cast by shareholders of the Company
eligible to vote under applicable Exchange rules at a duly held meeting of
shareholders or, if permitted by Exchange rules, by written consent given by
holders of Class A and Class B Common Shares of the Company eligible to give
their consent under Exchange rules who together hold at least a majority of the
votes attaching to shares of the Company eligible to be voted.  This 2012 Plan
was approved by the Board effective as of May 17, 2012, subject to shareholder
and Exchange approvals. 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
approved, subject to the approval of the TSX Venture Exchange, amending and
restating the 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.


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 or, with respect to the Retired Plans, a restricted
stock 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.,
a Yukon 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 (Yukon).   


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 7,550,000.






 







 





 





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
3,777,995 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 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 shall
following such date shall be of no effect.


Involuntary Termination of Employment. Options granted under the 2012 Plan after the
Effective 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
Effective 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; (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 and/or to reduce the period of
restriction applicable to restricted stock grants made pursuant to the terms of
the Retired Plans 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 Effective 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 Effective 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 be appropriately legended 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.