Lexaria Corp.: Exhibit 4.1 - Filed by newsfilecorp.com






Exhibit 4.1

LEXARIA CORP 
2010 EQUITY COMPENSATION PLAN


I. ESTABLISHMENT OF PLAN; DEFINITIONS 

1.     Purpose. The purpose of the Corporation’s 2010 Equity
Compensation Plan is to encourage certain, officers, employees, directors and
consultants of the Corporation to acquire and hold stock in the Corporation as
an added incentive to remain with the Corporation and to increase their efforts
in promoting the interests of the Corporation and to enable the Corporation to
attract and retain capable individuals. 

2.     Definitions. Unless the context clearly indicates
otherwise, the following terms shall have the meanings set forth below: 

(a) “Award” shall mean the grant of any Stock Option, Stock
Appreciation Right or Stock Award pursuant to the Plan. 

(b) "Board" shall mean the Board of Directors of the
Corporation. 

(c) "Code" shall mean the Internal Revenue Code of 1986, as it
may be amended from time to time. 

(d) "Committee" shall mean a committee made up of at least two
members of the Board whose members shall, from time to time, be appointed by the
Board. If a Committee has not been appointed by the Board, “Committee” shall
mean the Board. 

(e) "Corporation" shall mean LEXARIA CORP., a Nevada
corporation. 

(f) "Consultants" shall mean individuals or entities who
provide services to the Corporation who are not Employees or Directors. 

(g) "Directors" shall mean those members of the Board of
Directors of the Corporation who are not Employees. 

(h) "Disability" shall mean a medically determinable physical
or mental condition which causes an Employee, Director or Consultant to be
unable to engage in any substantial gainful activity and which can be expected
to result in death or to be of long-continued and indefinite duration. 

(i) "Employee" shall mean any common law employee, including
officers, of the Corporation as determined under the Code and the Treasury
Regulations thereunder. 

(j) "Fair Market Value" with regards to the grant of Stock
Options shall mean (i) if the Stock is listed on a national securities exchange,
the mean between the highest and lowest sales prices for the Stock on such date,
or, if no such prices are reported for such day, then on the next preceding day
on which there were reported prices; (ii) if the Stock is not listed on a
national securities exchange, the closing price for the shares on such date, or
if no such prices are reported for such day, then on the next preceding day on
which there were reported prices; or (iii) as determined in good faith by the
Board. “Fair Market Value” with regards to Stock Awards shall be determined by
the Board, in good faith and in its sole discretion. 




(k) "Grantee" shall mean an officer, Employee, Director or
Consultant granted a Stock Option or Stock Award under this Plan. 

(l) "Incentive Stock Option" shall mean an option granted
pursuant to the Incentive Stock Option provisions as set forth in Part II of
this Plan. 

(m) "Non-Qualified Stock Option" shall mean an option granted
pursuant to the Non-Qualified Stock Option provisions as set forth in Part III
of this Plan. 

(n) "Plan" shall mean the 2010 Equity Compensation Plan as set
forth herein and as amended from time to time. 

(o) "Restricted Stock" shall mean Stock which is issued
pursuant to the Restricted Stock as set forth in Part IV of this Plan. 

(p) "Stock" shall mean authorized but unissued shares of the
Common Stock of the Corporation or reacquired shares of the Corporation's Common
Stock. 

(q) "Stock Appreciation Right" shall mean a stock appreciation
right granted pursuant to the Stock Appreciation Right provisions as set forth
in Part II and III of this Plan. 

(r) "Stock Award" shall mean an award of Restricted granted
pursuant to this Plan. 

(s) "Stock Option" shall mean an option granted pursuant to the
Plan to purchase shares of Stock. 

(t) “Subsidiary” shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with and including
the Corporation, if each of the corporations other than the last corporation in
the unbroken chain owns stock possessing 50 percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain. 

(u) "Ten Percent Shareholder" shall mean an Employee who at the
time a Stock Option is granted owns stock possessing more than ten percent (10%)
of the total combined voting power of all stock of the Corporation or of its
parent or subsidiary corporation. 

3.     Shares of Stock Subject to the Plan. Subject to the
provisions of Paragraph 2 of Part V of the Plan, the Stock which may be issued
or transferred pursuant to Stock Options and Stock Awards granted under the Plan
and the Stock which is subject to outstanding but unexercised Stock Options
under the Plan shall not exceed 1,800,000 shares in the aggregate. If a
Stock Option shall expire and terminate for any reason, in whole or in part,
without being exercised or, if Stock Awards are forfeited because the
restrictions with respect to such Stock Awards shall not have been met or have
lapsed, the number of shares of Stock which are no longer outstanding as Stock
Awards or subject to Stock Options may again become available for the grant of
Stock Awards or Stock Options. There shall be no terms and conditions in a Stock
Award or Stock Option which provide that the exercise of an Incentive Stock
Option reduces the number of shares of Stock for which an outstanding
Non-Qualified Stock Option may be exercised; and there shall be no terms and
conditions in a Stock Award or Stock Option which provide that the exercise of a
Non-Qualified Stock Option reduces the number of shares of Stock for which an
outstanding Incentive Stock Option may be exercised. 




4.     Administration of the Plan. The Plan shall be
administered by the Committee. Subject to the express provisions of the Plan,
the Committee shall have authority to interpret the Plan, to prescribe, amend,
and rescind rules and regulations relating to it, to determine the terms and
provisions of Stock Option agreements, and to make all other determinations
necessary or advisable for the administration of the Plan. Any controversy or
claim arising out of or related to this Plan shall be determined unilaterally by
and at the sole discretion of the Committee. 

5.     Amendment or Termination. The Board may, at any time,
alter, amend, suspend, discontinue, or terminate this Plan; provided, however,
that such action shall not adversely affect the right of Grantees to Stock
Awards or Stock Options previously granted and no amendment, without the
approval of the stockholders of the Corporation, shall increase the maximum
number of shares which may be awarded under the Plan in the aggregate,
materially increase the benefits accruing to Grantees under the Plan, change the
class of Employees eligible to receive options under the Plan, or materially
modify the eligibility requirements for participation in the Plan. 

6.     Effective Date and Duration of the Plan. The
effective date of the Plan is the date on which the Plan is adopted by the
Board. If the stockholders of the Corporation do not approve the Plan within 12
months after the Board's adoption of the Plan, any Incentive Stock Options
granted under the Plan will be treated as Non-Qualified Stock Options. Unless
sooner terminated as provided herein, the Plan shall terminate ten years after
the earlier of the Plan's adoption by the Board and approval by the Company's
stockholders. 

7.     General. 

(a) Each Stock Option, Stock Award and Stock Appreciation Right
shall be evidenced by a written instrument (which may be in the form of a
unanimous written consent of the Board) containing such terms and conditions,
not inconsistent with this Plan, as the Committee shall approve. 

(b) The granting of a Stock Option, Stock Award or Stock
Appreciation Right in any year shall not give the Grantee any right to similar
grants in future years or any right to be retained in the employ of the
Corporation, and all Employees shall remain subject to discharge to the same
extent as if the Plan were not in effect. 

(c) No officer, Employee, Director or Consultant and no
beneficiary or other person claiming under or through him, shall have any right,
title or interest by reason of any Stock Option or any Stock Award to any
particular assets of the Corporation, or any shares of Stock allocated or
reserved for the purposes of the Plan or subject to any Stock Option or any
Stock Award except as set forth herein. The Corporation shall not be required to
establish any fund or make any other segregation of assets to assure the payment
of any Stock Option or Stock Award. 

(d) No right under the Plan shall be subject to anticipation,
sale, assignment, pledge, encumbrance, or charge except by will or the laws of
descent and distribution, and a Stock Option shall be exercisable during the
Grantee's lifetime only by the Grantee or his conservator. 

(e) Notwithstanding any other provision of this Plan or
agreements made pursuant thereto, the Corporation's obligation to issue or
deliver any certificate or certificates for shares of Stock under a Stock Option
or Stock Award, and the transferability of Stock acquired by exercise of a Stock
Option or grant of a Stock Award, shall be subject to all of the following
conditions: 

(i) Any registration or other qualification of such shares
under any state or federal law or regulation, or the maintaining in effect of
any such registration or other qualification which the Board shall, in its
absolute discretion upon the advice of counsel, deem necessary or advisable;
and




(ii) The obtaining of any other consent, approval, or permit
from any state or federal governmental agency which the Board shall, in its
absolute discretion upon the advice of counsel, determine to be necessary or
advisable. 

(f) All payments to Grantees or to their legal representatives
shall be subject to any applicable tax, community property, or other statutes or
regulations of the United States or of any state or country having jurisdiction
thereof. The Grantee may be required to pay to the Corporation the amount of any
withholding taxes which the Corporation is required to withhold with respect to
a Stock Option or its exercise or a Stock Award. In the event that such payment
is not made when due, the Corporation shall have the right to deduct, to the
extent permitted by law, from any payment of any kind otherwise due to such
person all or part of the amount required to be withheld. 

(g) In the case of a grant of a Stock Option or Stock Award to
any Employee of a subsidiary of the Corporation, the Corporation may, if the
Committee so directs, issue or transfer the shares, if any, covered by the Stock
Option or Stock Award to the subsidiary, for such lawful consideration as the
Committee may specify, upon the condition or understanding that the subsidiary
will transfer the shares to the Employee in accordance with the terms of the
Stock Option or Stock Award specified by the Committee pursuant to the
provisions of the Plan. For purposes of this Section, a subsidiary shall mean
any subsidiary corporation of the Corporation as defined in Section 424 of the
Code. 

(h) A Grantee entitled to Stock as a result of the exercise of
a Stock Option or grant of a Stock Award shall not be deemed for any purpose to
be, or have rights as, a shareholder of the Corporation by virtue of such
exercise, except to the extent a stock certificate is issued therefor and then
only from the date such certificate is issued. No adjustments shall be made for
dividends or distributions or other rights for which the record date is prior to
the date such stock certificate is issued. The Corporation shall issue any stock
certificates required to be issued in connection with the exercise of a Stock
Option with reasonable promptness after such exercise. 

(i) The grant or exercise of Stock Options granted under the
Plan or the grant of a Stock Award under the Plan shall be subject to, and shall
in all respects comply with, applicable law relating to such grant or exercise,
or to the number of shares of Stock which may be beneficially owned or held by
any Grantee. 

(j) The Corporation intends that the Plan shall comply with the
requirements of Rule 16b-3 (the “Rule”) under the Securities Exchange Act of
1934, as amended, during the term of this Plan. Should any additional provisions
be necessary for the Plan to comply with the requirements of the Rule, the Board
may amend this Plan to add to or modify the provisions of this Plan accordingly.


(k) The Corporation intends that the Plan shall comply with the
requirements of Section 409A of the Code, to the extent applicable. Should any
changes to the Plan be necessary for the Plan to comply with the requirements of
Code Section 409A the Board may amend this Plan to add to or modify the
provisions of this Plan accordingly. 

(l) The Corporation will seek stockholder approval in the
manner and to the degree required under Applicable Laws. If the Corporation
fails to obtain stockholder approval of the Plan within twelve (12) months after
the date this Plan is adopted by the Board, pursuant to Section 422 of the Code,
any Option granted as an Incentive Option at any time under the Plan will not
qualify as an Incentive Option within the meaning of the Code and will be deemed
to be a Non-Qualified Option. 




II. INCENTIVE STOCK OPTION PROVISIONS 

1.     Granting of Incentive Stock Options. 

(a) Only Employees of the Corporation shall be eligible to
receive Incentive Stock Options under the Plan. Officers, Directors and
Consultants of the Corporation who are not also Employees shall not be eligible
to receive Incentive Stock Options. 

(b) The purchase price of each share of Stock subject to an
Incentive Stock Option shall not be less than 100% of the Fair Market Value of a
share of the Stock on the date the Incentive Stock Option is granted; provided,
however, that the purchase price of each share of Stock subject to an Incentive
Stock Option granted to a Ten Percent Shareholder shall not be less than 110% of
the Fair Market Value of a share of the Stock on the date the Incentive Stock
Option is granted. 

(c) No Incentive Stock Option shall be exercisable more than
ten years from the date the Incentive Stock Option was granted; provided,
however, that an Incentive Stock Option granted to a Ten Percent Shareholder
shall not be exercisable more than five years from the date the Incentive Stock
Option was granted. 

(d) The Committee shall determine and designate from time to
time those Employees who are to be granted Incentive Stock Options and specify
the number of shares subject to each Incentive Stock Option. 

(e) The Committee, in its sole discretion, shall determine
whether any particular Incentive Stock Option shall become exercisable in one or
more installments, specify the installment dates, and, within the limitations
herein provided, determine the total period during which the Incentive Stock
Option is exercisable. Further, the Committee may make such other provisions as
may appear generally acceptable or desirable to the Committee or necessary to
qualify its grants under the provisions of Section 422 of the Code. 

(f) The Committee may grant at any time new Incentive Stock
Options to an Employee who has previously received Incentive Stock Options or
other options whether such prior Incentive Stock Options or other options are
still outstanding, have previously been exercised in whole or in part, or are
cancelled in connection with the issuance of new Incentive Stock Options. The
purchase price of the new Incentive Stock Options may be established by the
Committee without regard to the existing Incentive Stock Options or other
options. 

(g) Notwithstanding any other provisions hereof, the aggregate
Fair Market Value (determined at the time the option is granted) of the Stock
with respect to which Incentive Stock Options are exercisable for the first time
by the Employee during any calendar year (under all such plans of the Grantee's
employer corporation and its parent and subsidiary corporation) shall not exceed
$100,000. 

2.     Exercise of Incentive Stock Options. The option price
of an Incentive Stock Option shall be payable on exercise of the option (i) in
cash or by check, bank draft or postal or express money order, (ii) by the
surrender of Stock then owned by the Grantee, (iii) the proceeds of a loan from
an independent broker-dealer whereby the loan is secured by the option or the
stock to be received upon exercise, or (iv) any combination of the foregoing;
provided, that each such method and time for payment and each such
borrowing and terms and conditions of repayment shall then be permitted by and
be in compliance with applicable law. Shares of Stock so surrendered in
accordance with clause (ii) or (iv) shall be valued at the Fair Market Value
thereof on the date of exercise, surrender of such Stock to be evidenced by
delivery of the certificate(s) representing such shares in such manner, and
endorsed in such form, or accompanied by stock powers endorsed in such form, as
the Committee may determine. 




3.     Termination of Employment. 

(a) If a Grantee's employment with the Corporation is
terminated other than by Disability or death, the terms of any then outstanding
Incentive Stock Option held by the Grantee shall extend for a period ending on
the earlier of the date on which such Stock Option would otherwise expire or
three months after such termination of employment, and such Stock Option shall
be exercisable to the extent it was exercisable as of such last date of
employment. 

(b) If a Grantee's employment with the Corporation is
terminated by reason of Disability, the term of any then outstanding Incentive
Stock Option held by the Grantee shall extend for a period ending on the earlier
of the date on which such Stock Option would otherwise expire or twelve months
after such termination of employment, and such Stock Option shall be exercisable
to the extent it was exercisable as of such last date of employment. 

(c) If a Grantee's employment with the Corporation is
terminated by reason of death, the representative of his estate or beneficiaries
thereof to whom the Stock Option has been transferred shall have the right
during the period ending on the earlier of the date on which such Stock Option
would otherwise expire or twelve months after such date of death, to exercise
any then outstanding Incentive Stock Options in whole or in part. If a Grantee
dies without having fully exercised any then outstanding Incentive Stock
Options, the representative of his estate or beneficiaries thereof to whom the
Stock Option has been transferred shall have the right to exercise such Stock
Options in whole or in part. 

4.     Stock Appreciation Rights 

(a) Grant. Stock Appreciation Rights related to all or
any portion of an Incentive Stock Option may be granted by the Committee to any
Grantee in connection with the grant of an Incentive Stock Option or unexercised
portion thereof held by the Grantee at any time and from time to time during the
term thereof. Each Stock Appreciation Right shall be granted at least at Fair
Market Value on the date of grant and be subject to such terms and conditions
not inconsistent with the provisions of this Part II as shall be determined by
the Committee and included in the agreement relating to such Stock Appreciation
Right, subject in any event, however, to the following terms and conditions of
this Section 4. Each Stock Appreciation Right may include limitations as to the
time when such Stock Appreciation Right becomes exercisable and when it ceases
to be exercisable that are more restrictive than the limitations on the exercise
of the Incentive Stock Option to which it relates. 

(b) Exercise. No Stock Appreciation Right shall be
exercisable with respect to such related Incentive Stock Option or portion
thereof unless such Incentive Stock Option or portion shall itself be
exercisable at that time. A Stock Appreciation Right shall be exercised only
upon surrender of the related Incentive Stock Option or portion thereof in
respect of which the Stock Appreciation Right is then being exercised. 

(c) Amount of Payment. On exercise of a Stock
Appreciation Right, a Grantee shall be entitled to receive an amount equal to
the product of (i) the amount by which the Fair Market Value of a share of Stock
on the date of exercise of the Stock Appreciation Right exceeds the option price
per share specified in the related Incentive Stock Option and (ii) the number of
shares of Stock in respect of which the Stock Appreciation Right shall have been
exercised. 

(d) Form of Payment. Stock Appreciation Rights may be
settled in Stock, cash or a combination thereof. The number of shares of Stock
to be distributed shall be the largest whole number obtained by dividing the
amount otherwise distributable in respect of such settlement by the Fair Market Value of a share of Stock on the date of exercise
of the Stock Appreciation Right. The value of fractional shares of Stock shall
be paid in cash. 




(e) Effect of Exercise of Right or Related Option. If
the related Incentive Stock Option is exercised in whole or in part, then the
Stock Appreciation Right with respect to the Stock purchased pursuant to such
exercise (but not with respect to any unpurchased Stock) shall be terminated as
of the date of exercise if such Stock Appreciation Right is not exercised on
such date. 

(f) Non-transferability. A Stock Appreciation Right
shall not be transferable or assignable by the Grantee other than by will or the
laws of descent and distribution, and shall be exercisable during theGrantee's
lifetime only by the Grantee. 

(g) Termination of Employment. If the Grantee ceases to be an
Employee of the Corporation for any reason, each outstanding Stock Appreciation
Right shall be exercisable for such period and to such extent as the related
Incentive Stock Option or portion thereof. 

III. NON-QUALIFIED STOCK OPTION PROVISIONS 

1.     Granting of Stock Options. 

(a) Officers, Employees, Directors and Consultants shall be
eligible to receive Non-Qualified Stock Options under the Plan. 

(b) The Committee shall determine and designate from time to
time those officers, Employees, Directors and Consultants who are to be granted
Non-Qualified Stock Options and the amount subject to each Non-Qualified Stock
Option. 

(c) The Committee may grant at any time new Non-Qualified Stock
Options to an Employee, Director or Consultant who has previously received
Non-Qualified Stock Options or other Stock Options, whether such prior
Non-Qualified Stock Options or other Stock Options are still outstanding, have
previously been exercised in whole or in part, or are cancelled in connection
with the issuance of new Non-Qualified Stock Options. 

(d) The Committee shall determine the purchase price of each
share of Stock subject to a Non-Qualified Stock Option. Such price shall not be
less than 100% of the Fair Market Value of such Stock on the date the
Non-Qualified Stock Option is granted. 

(e) The Committee, in its sole discretion, shall determine
whether any particular Non-Qualified Stock Option shall become exercisable in
one or more installments, specify the instalment dates, and, within the
limitations herein provided, determine the total period during which the
Non-Qualified Stock Option is exercisable. Further, the Committee may make such
other provisions as may appear generally acceptable or desirable to the
Committee, including the extension of a Non-Qualified Stock Option, provided
that such extension does not extend the option beyond the period specified in
paragraph (f) below. 

(f) No Non-Qualified Stock Option shall be exercisable more
than ten years from the date such option is granted. 

2.     Exercise of Stock Options. The option price of a
Non-Qualified Stock Option shall be payable on exercise of the Stock Option (i)
in cash or by check, bank draft or postal or express money order, (ii) by the
surrender of Stock then owned by the Grantee, (iii) the proceeds of a loan from
an independent broker-dealer whereby the loan is secured by the option or the
stock to be received upon exercise, or (iv) any combination of the foregoing;
provided, that each such method and time for payment and each such borrowing and terms and
conditions of repayment shall then be permitted by and be in compliance with
applicable law. Shares of Stock so surrendered in accordance with clause (ii) or
(iv) shall be valued at the Fair Market Value thereof on the date of exercise,
surrender of such Stock to be evidenced by delivery of the certificate(s)
representing such shares in such manner, and endorsed in such form, or
accompanied by stock powers endorsed in such form, as the Committee may
determine. 




3.     Termination of Relationship. 

(a) If a Grantee's employment with the Corporation is
terminated, a Director Grantee ceases to be a Director, or a Consultant Grantee
ceases to be a Consultant, other than by reason of Disability or death, the
terms of any then outstanding Non-Qualified Stock Option held by the Grantee
shall extend for a period ending on the earlier of the date established by the
Committee at the time of grant or three months after the Grantee's last date of
employment or cessation of being a Director or Consultant, and such Stock Option
shall be exercisable to the extent it was exercisable as of the date of
termination of employment or cessation of being a Director or Consultant. 

(b) If a Grantee's employment is terminated by reason of
Disability, a Director Grantee ceases to be a Director by reason of Disability
or a Consultant Grantee ceases to be a Consultant by reason of Disability, the
term of any then outstanding Non-Qualified Stock Option held by the Grantee
shall extend for a period ending on the earlier of the date on which such Stock
Option would otherwise expire or twelve months after the Grantee's last date of
employment or cessation of being a Director or Consultant, and such Stock Option
shall be exercisable to the extent it was exercisable as of such last date of
employment or cessation of being a Director or Consultant. 

(c) If a Grantee's employment is terminated by reason of death,
a Director Grantee ceases to be a Director by reason of death or a Consultant
Grantee ceases to be a Consultant by reason of death, the representative of his
estate or beneficiaries thereof to whom the Stock Option has been transferred
shall have the right during the period ending on the earlier of the date on
which such Stock Option would otherwise expire or twelve months following his
death to exercise any then outstanding Non-Qualified Stock Options in whole or
in part. If a Grantee dies without having fully exercised any then outstanding
Non-Qualified Stock Options, the representative of his estate or beneficiaries
thereof to whom the Stock Option has been transferred shall have the right to
exercise such Stock Options in whole or in part. 

4.     Stock Appreciation Rights 

(a) Grant. Stock Appreciation Rights related to all or
any portion of a Non-Qualified Stock Option may be granted by the Committee to
any Grantee in connection with the grant of a Non-Qualified Stock Option or
unexercised portion thereof held by the Grantee at any time and from time to
time during the term thereof. Each Stock Appreciation Right shall be granted at
least at Fair Market Value on the date of grant and be subject to such terms and
conditions not inconsistent with the provisions of this Part III as shall be
determined by the Committee and included in the agreement relating to such Stock
Appreciation Right, subject in any event, however, to the following terms and
conditions of this Section 4. Each Stock Appreciation Right may include
limitations as to the time when such Stock Appreciation Right becomes
exercisable and when it ceases to be exercisable that are more restrictive than
the limitations on the exercise of the Non-Qualified Stock Option to which it
relates. 

(b) Exercise. No Stock Appreciation Right shall be
exercisable with respect to such related Non-Qualified Stock Option or portion
thereof unless such Non-Qualified Stock Option or portion shall itself be
exercisable at that time. A Stock Appreciation Right shall be exercised only
upon surrender of the related Non-Qualified Stock Option or portion thereof in
respect of which the Stock Appreciation Right is then being exercised. 




(c) Amount of Payment. On exercise of a Stock
Appreciation Right, a Grantee shall be entitled to receive an amount equal to
the product of (i) the amount by which the Fair Market Value of a share of Stock
on the date of exercise of the Stock Appreciation Right exceeds the option price
per share specified in the related Non-Qualified Stock Option and (ii) the
number of shares of Stock in respect of which the Stock Appreciation Right shall
have been exercised. 

(d) Form of Payment. Stock Appreciation Rights may only
be settled in Stock, cash or any combination thereof. The number of shares of
Stock to be distributed shall be the largest whole number obtained by dividing
the amount otherwise distributable in respect of such settlement by the Fair
Market Value of a share of Stock on the date of exercise of the Stock
Appreciation Right. The value of fractional shares of Stock shall be paid in
cash. 

(e) Effect of Exercise of Right or Related Option. If
the related Non-Qualified Stock Option is exercised in whole or in part, then
the Stock Appreciation Right with respect to the Stock purchased pursuant to
such exercise (but not with respect to any unpurchased Stock) shall be
terminated as of the date of exercise if such Stock Appreciation Right is not
exercised on such date. 

(f) Non-transferability. A Stock Appreciation Right
shall not be transferable or assignable by the Grantee other than by will or the
laws of descent and distribution, and shall be exercisable during the Grantee's
lifetime only by the Grantee. 

(g) Termination of Employment. If the Grantee ceases to
be an officer, Employee, Director or Consultant of the Corporation for any
reason, each outstanding Stock Appreciation Right shall be exercisable for such
period and to such extent as the related Non-Qualified Stock Option or portion
thereof. 

IV. RESTRICTED STOCK AWARDS 

1.     Grant of Restricted Stock. 

(a) Officers, Employees, Directors and Consultants shall be
eligible to receive grants of Restricted Stock under the Plan. 

(b) The Committee shall determine and designate from time to
time those officers, Employees, Directors and Consultants who are to be granted
Restricted Stock and the number of shares of Stock subject to such Stock Award.


(c) The Committee, in its sole discretion, shall make such
terms and conditions applicable to the grant of Restricted Stock as may appear
generally acceptable or desirable to the Committee. 

2.     Termination of Relationship.

(a) If a Grantee's employment with the Corporation, a Director
Grantee ceases to be a Director, or a Consultant Grantee ceases to be a
Consultant, prior to the lapse of any restrictions applicable to the Restricted
Stock such Stock shall be forfeited and the Grantee shall return the
certificates representing such Stock to the Corporation. 

(b) If the restrictions applicable to a grant of Restricted
Stock shall lapse, the Grantee shall hold such Stock free and clear of all such
restrictions except as otherwise provided in the Plan. 

V. ADJUSTMENTS UPON MERGER, REORGANIZATION, DISSOLUTION OR
CHANGE IN CONTROL 




1.     Substitution of Options. In the event of a corporate
merger or consolidation, or the acquisition by the Corporation of property or
stock of an acquired corporation or any reorganization or other transaction
qualifying under Section 424 of the Code, the Committee may, in accordance with
the provisions of that Section, substitute Stock Options, Stock Awards and Stock
Appreciation Rights under this Plan for Stock Options, Stock Awards and Stock
Appreciation Rights under the plan of the acquired corporation provided (i) the
excess of the aggregate Fair Market Value of the shares of Stock subject to
Stock Option immediately after the substitution over the aggregate option price
of such Stock is not more than the similar excess immediately before such
substitution and (ii) the new Stock Option does not give the Grantee additional
benefits, including any extension of the exercise period. Alternatively, the
Committee may provide, that each Stock Option, Stock Award and Stock
Appreciation Right granted under the Plan shall terminate as of a date to be
fixed by the Board; provided, that no less than thirty days written notice of
the date so fixed shall be given to each holder, and each holder shall have the
right, during the period of fifteen days preceding such termination, to exercise
the Stock Options, Stock Awards and Stock Appreciation Rights as to all or any
part of the Stock covered thereby, including Stock as to which such would not
otherwise be exercisable. 

2.     Adjustment Provisions. 

(a) In the event that a dividend shall be declared upon the
Stock payable in shares of the Corporation's common stock, the number of shares
of Stock then subject to any Stock Option or Stock Award outstanding under the
Plan and the number of shares reserved for the grant of Stock Options or Stock
Awards pursuant to the Plan shall be adjusted by adding to each such share the
number of shares which would be distributable in respect thereof if such shares
had been outstanding on the date fixed for determining the shareholders of the
Corporation entitled to receive such share dividend. 

(b) If the shares of Stock outstanding are changed into or
exchanged for a different number or class or other securities of the Corporation
or of another corporation, whether through split-up, merger, consolidation,
reorganization, reclassification or recapitalization then there shall be
substituted for each share of Stock subject to any such Stock Option or Stock
Award and for each share of Stock reserved for the grant of Stock Options or
Stock Awards pursuant to the Plan the number and kind of shares or other
securities into which each outstanding share of Stock shall have been so changed
or for which each share shall have been exchanged. 

(c) In the event there shall be any change, other than as
specified above in this Section 2, in the number or kind of outstanding shares
of Stock or of any shares or other securities into which such shares shall have
been changed or for which they shall have been exchanged, then if the Board
shall, in its sole discretion, determine that such change equitably requires an
adjustment in the number or kind of shares theretofore reserved for the grant of
Stock Options or Stock Awards pursuant to the Plan and of the shares then
subject to Stock Options or Stock Awards, such adjustment shall be made by the
Board and shall be effective and binding for all purposes of the Plan and of
each Stock Option and Stock Award outstanding thereunder. 

(d) Each Stock Appreciation Right outstanding at the time of
any adjustment pursuant to this Section 2 and the number of outstanding Stock
Appreciation Rights, shall be adjusted, changed or exchanged in the same manner
as related Stock Options.

(e) In the case of any such substitution or adjustment as
provided for in this Section 2, the option price set forth in each outstanding
Stock Option for each share covered thereby prior to such substitution or
adjustment will be the option price for all shares or other securities which
shall have been substituted for such share or to which such share shall have
been adjusted pursuant to this Section 2, and the price per share shall be
adjusted accordingly. 




(f) No adjustment or substitution provided for in this Section
2 shall require the Corporation to sell a fractional share, and the total
substitution or adjustment with respect to each outstanding Stock Option shall
be limited accordingly. 

(g) Upon any adjustment made pursuant to this Section 2 the
Corporation will, upon request, deliver to the Grantee a certificate setting
forth the option price thereafter in effect and the number and kind of shares or
other securities thereafter purchasable on the exercise of such Stock Option.


3.     Dissolution or Liquidation. In the event of a
proposed dissolution or liquidation of the Corporation, to the extent an Award
has not been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. 

4.     Change in Control. Notwithstanding Sections 1
and 2 above, in the event of a Change of Control (as defined below), except as
otherwise determined by the Board, the Grantee shall fully vest in and have the
right to exercise the Awards as to all of the Stock, including Stock as to which
it would not otherwise be vested or exercisable. If an Award becomes fully
vested and exercisable as the result of a Change of Control, the Committee shall
notify the Grantee in writing or electronically prior to the Change of Control
that the Award shall be fully vested and exercisable for a period of fifteen
(15) days from the date of such notice, and the Award shall terminate upon the
expiration of such period. For purposes of this Agreement, a “Change of Control”
means the happening of any of the following events: 

(a) When any “person,” as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)
(other than the Corporation, a Subsidiary or a Corporation employee benefit
plan, including any trustee of such plan acting as trustee) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing fifty percent (50%)
or more of the combined voting power of the Corporation’s then outstanding
securities entitled to vote generally in the election of directors; or 

(b) The stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other than a merger
or consolidation which would result in the voting securities of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Corporation or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Corporation approve an agreement for the sale or disposition by the
Corporation of all or substantially all the Corporation’s assets; or 

(c) A change in the composition of the Board of the
Corporation, as a result of which fewer than a majority of the directors are
Incumbent Directors. “Incumbent Directors” shall mean directors who either (A)
are directors of the Corporation as of the date the Plan is approved by the
stockholders, or (B) are elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of the Incumbent Directors at the
time of such election or nomination (but shall not include an individual whose
election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Corporation). 

VI. INDEMNIFICATION 

Each person who is or shall have been a member of the
Committee, or of the Board, shall be indemnifiedand held harmless by the
Corporation against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, notion, suit, or proceeding to which
he or she may be a party or in which he or she may be involved by reason of any
action taken or failure to act under the Plan or any Award agreement and against
and from any and all amounts paid by him or her in settlement thereof, with the
Corporation’s approval, or paid by him or her in settlement thereof, with the
Corporation’s approval, or paid by him or her in satisfaction of any judgment in
any such action, suit, or proceeding against him or her, provided he or she
shall give the Corporation an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled under
the Corporation’s Articles of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Corporation may have to indemnify them or hold
them harmless. 




VII. CONDITIONS UPON ISSUANCE OF SHARES 

1.     Legal Compliance. Stock shall not be issued pursuant
to the exercise of an Award unless the exercise of such Award and the issuance
and delivery of Stock shall comply with applicable laws and shall be further
subject to the approval of counsel for the Corporation with respect to such
compliance. 

2.     Investment Representations. As a condition to the
exercise of an Award, the Corporation may require the Grantee exercising such
Award to represent and warrant at the time of any such exercise that the Stock
is being purchased only for investment and without any present intention to sell
or distribute such Stock if, in the opinion of counsel for the Corporation, such
a representation is required. 

3.     No Rights as Stockholder. No Grantee will have
any of the rights of a stockholder with respect to any Stock until the Stock is
issued to the said Grantee. After Stock is issued to the Grantee, the Grantee
will be a stockholder and will have all the rights of a stockholder with respect
to such Stock, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Stock. 

VIII. LEGAL CONSTRUCTION 

1.     Gender and Number. Except where otherwise indicated
by the context, any masculine term used herein also shall include the feminine;
the plural shall include the singular and the singular shall include the plural.


2.     Severability. In the event any provision of the Plan
shall be held illegal or invalid for any reason, such illegality or invalidity
shall not affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been
included. 

3.     Requirements of Law. The granting of Awards and the
issuance of Stock under the Plan shall be subject to all applicable laws. 

4.     Governing Law. The Plan and all Award agreements
shall be construed in accordance with and governed by the laws of the Province
of British Columbia. 

5.     Captions. Captions are provided herein for
convenience only, and shall not serve as a basis for interpretation or
construction of the Plan.