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ZI CORPORATION 

STOCK INCENTIVE PLAN 

1.

**Purpose**
The purpose of the Zi Corporation Stock Incentive Plan - 2007is to advance the interests of the Corporation and its subsidiaries andAffiliates by encouraging the directors, officers, employees and serviceproviders of the Corporation and its subsidiaries and Affiliates to acquireshares in the Corporation, thereby increasing their proprietary interest in theCorporation, encouraging them to remain associated with the Corporation or itssubsidiaries or Affiliates and furnishing them with additional incentive intheir efforts on behalf of the Corporation and its subsidiaries or Affiliates inthe conduct of their affairs. 
**2.

**Definitions**
When used in this Plan, unless there is something in the subject matter orcontext inconsistent therewith, the following words and terms shall have therespective meanings ascribed to them as follows: 

(a) 

"**ASA**"means the Securities Act (Alberta), as amended. 

(b) 

"Affiliate"means any corporation that directly or indirectly through one or moreintermediaries controls, or is controlled by, or is under common control withthe Corporation. 

(c) 

"**Board**"**or**"**Board of Directors**" means the board of directors of theCorporation. 

(d) 

**"Code"**means the United States Internal Revenue Code of 1986, as amended. 

(e) 

**"Committee"means a committee of the Board appointed to administer the Plan. Unlessotherwise determined by the Board of Directors, the Committee shall consist ofall members of the Board of Directors of the Corporation who are non-employeedirectors as contemplated by Rule 16b-3 under the Exchange Act.**
(f) 

**"CommonShares" means the common shares in the capital of the Corporation and any sharesor securities of the Corporation into which such common shares are changed,converted, subdivided, consolidated or reclassified.**
(g) 

**"Consultant"means any person (other than a director, officer or employee) or company engagedto provide ongoing management or consulting services to the Corporation.**
(h) 

**"Corporation"means Zi Corporation and any successor corporation and any reference herein toaction by the Corporation means action by or under the authority of its Board ofDirectors or a duly empowered committee appointed by the Board of Directors.**
(i) 

**"ExchangeAct" means the United States Securities Exchange Act of 1934, as amended.**

2
(j) 

**"Exercise Price" means theprice required to be paid to acquire Common Shares on the exercise** ofOptions on a per Common Share basis. 

(k) 

**"Insider" means the same asprovided for in the ASA and includes associates and Affiliates of the insider.**
(l) 

**"MarketValue" means at any date when the market value of Common Shares is to bedetermined, the higher of: (i) the five day volume weighted average tradingprice of the Common Shares where such five day period ends on the Trading Dayimmediately prior to such date and (ii) the closing price of the Common Sharesor the Trading Day immediately prior to the date when the Market Value of CommonShares is to be determined.**
(m) 

**"Option"means an option granted by the Corporation to a Participant entitling suchParticipant to acquire a designated number of Common Shares from treasury at aprice to be determined by the Board of Directors, but subject to the provisionshereof. Options under the Plan are not intended to be incentive stock options asdescribed under Section 422 of the Code.**
(n) 

**"OptionPeriod" means such period as may be determined by the Board of Directors duringwhich a Participant may exercise an Option, commencing on the date such Optionis granted to such Participant and ending as specified in this Plan or in theParticipant Agreement.**
(o) 

**"Participant"means a person who is an officer, employee, director or Consultant of theCorporation or its subsidiaries or Affiliates who is granted an Option,Restricted Stock Award or Restricted Stock Unit Award pursuant to this Plan.**
(p) 

**"ParticipantAgreement" means the written agreement that will be entered into between theCorporation and each Participant to whom an Option, Restricted Stock Award orRestricted Stock Unit Award is granted hereunder.**
(q) 

**"PerformanceGoal" means one or more performance measures or goals set by the Committee inits discretion for each grant of a performance-based Option, Restricted StockAward or Restricted Stock Unit Award. The extent to which such performancemeasures or goals are met will determine the vesting of the performance-basedOption, Restricted Stock Award or Restricted Stock Unit Award.**
(r) 

**"Period of Restriction" meansthe period during which Common Shares subject to a Restricted Stock Award arerestricted and subject to forfeiture.**
(s) 

**"Plan" shall mean this ZiCorporation Stock Incentive Plan – 2007 as embodied herein, and as amended fromtime to time.**
(t) 

**"Restricted Stock Award"means an award of stock from treasury granted to a Participant as described inSection 6 hereof.**
(u) 

**"RestrictedStock Unit" means a notional unit evidencing the right of a Participant toreceive, at the time of vesting and without payment to the Corporation, oneCommon Share issued** from treasury. 

3
(v) 

**"Restricted Stock Unit Award"means an award of Restricted Stock Units granted to a Participant as describedin Section 6 hereof.**
(w) 

**"Trading Day"means a day on which at least a board lot of Common Shares shall have been soldthrough the facilities of the Toronto Stock Exchange, or NASDAQ or otherrelevant** stock exchange. 
**3.

**Administration**
The Plan shall be administered by the Committee pursuant to rules ofprocedure fixed by the Board of Directors. 

The Committee shall have full and final discretion tointerpret the provisions of the Plan and prescribe, amend, rescind and waiverules and regulations to govern the administration and operation of the Plan,and all decisions and interpretations made by the Committee shall be binding andconclusive upon the Participants and the Corporation subject to shareholderapproval if required by any relevant stock exchange. 

This Plan shall replace and supercede all previous employeestock option plans or other share compensation arrangements of the Corporationand any grants made under such previous plans or arrangements shall be deemed tohave been made under this Plan, except that the terms of any such previousgrants shall continue pursuant to their existing terms to the extentinconsistent with the terms of this Plan. ****
The Corporation shall bear all expenses of administering this Plan. **4.

**Shares Subjectto Plan**
Subject to adjustment as provided in Section 18 hereof, theshares to be offered under the Plan shall consist of shares of the Corporation’sauthorized but unissued Common Shares. If any Options, Restricted Stock Awardsor Restricted Stock Unit Awards granted hereunder expire or terminate for anyreason without having been exercised or vested in full, the unissued sharessubject thereto shall again be available for the purpose of this Plan. If anyOptions are exercised, the number of Common Shares issued shall go back into thenumber of unissued shares available for purposes of the Plan but this shall notapply to vested or exercised Restricted Stock Awards or Restricted Stock UnitAwards. The aggregate number of shares to be delivered upon the exercise orvesting of all Options, Restricted Stock Awards and Restricted Stock Unit Awardsgranted under the Plan shall not exceed the maximum number of shares permittedunder the rules of any stock exchange on which the Common Shares are then listedor other regulatory body having jurisdiction. 

(a) 

MaximumNumber: Subject to adjustment as provided in Section 18 hereof, theaggregate number of Common Shares which may be reserved for issuance in respectof all Options, Restricted Stock Awards and Restricted Stock Unit Awards underthis Plan together with options, restricted stock awards or restricted stockunit awards under any other employee stock option plans or other sharecompensation arrangements of the Corporation shall not exceed 15% of theCorporation’s total issued and outstanding Common Shares. 

(b) 

Insiders: Notwithstandinganything else herein contained: 

4
(i) 

the number ofCommon Shares which may be reserved for issuance under the Plan and under anyother employee stock option plans or other share compensation arrangements ofthe Corporation at any one time to Insiders of the Corporation shall not exceed10% of the Corporation’s total issued and outstanding Common Shares; and 

(ii) 

the number ofCommon Shares which may be issued within a one-year period pursuant to the Planand under any other employee stock option plans or other share compensationarrangements of the Corporation to Insiders of the Corporation shall not exceed10% Corporation’s total issued and outstanding Common Shares. 

(c) 

Fractional Shares: Nofractional Common Shares may be purchased or issued under this Plan. 
**5.

**Maintenance of SufficientCapital**
The Corporation shall at all times during the term of the Plan reserve andkeep available such numbers of shares as will be sufficient to satisfy therequirements of the Plan. 
**6.

**Participation**
Any officer, employee, director or Consultant of theCorporation or any of its subsidiaries or Affiliates (including an entity thatbecomes a subsidiary or Affiliate after the adoption of the Plan) is eligible toparticipate in the Plan if the Committee, in its sole discretion, determinesthat such person should receive an Option, Restricted Stock Award or RestrictedStock Unit Award. Subject to Section 4 hereof, the Committee shall determine towhom Options, Restricted Stock Awards and/or Restricted Stock Unit Awards shallbe granted, the terms and provisions of the respective Participant Agreements,the time or times at which such Options, Restricted Stock Awards and/orRestricted Stock Unit Awards shall be granted, and the number of Common Sharesto be subject to each grant. No Participant shall be granted an Option,Restricted Stock Award and/or Restricted Stock Unit Award which exceeds themaximum number of shares permitted by any stock exchange on which the CommonShares are then listed or other regulatory body having jurisdiction. Anindividual who has been granted an Option, Restricted Stock Award and/orRestricted Stock Unit Award may, if otherwise eligible, and if permitted by anystock exchange on which the Common Shares are then listed or other regulatorybody having jurisdiction, be granted additional Options, Restricted Stock Awardsand/or Restricted Stock Unit Awards if the Committee shall so determine.Notwithstanding anything else herein contained: 

(a) 

Participation in the Plan shallbe entirely voluntary and any decision not to participate shall not affect aParticipant’s relationship or employment with the Corporation. 

(b) 

Notwithstandingany express or implied term of this Plan to the contrary, the granting of anOption, Restricted Stock Award or Restricted Stock Unit Award pursuant to thePlan shall in no way be construed as a guarantee of employment by theCorporation to the Participant. 

(c) 

Nothingcontained in the Plan, nor in any Option, Restricted Stock Award or RestrictedStock Unit Award granted under the Plan, shall confer upon any Participant anyright with respect to continuance as a director, officer, employee or Consultantof the Corporation or any of its subsidiaries or Affiliates. 

5
(d) 

No Participantshall have any of the rights of a shareholder in respect to Common Shares underan Option until such Common Shares shall have been paid for in full and issuedby the Corporation pursuant to this Plan. 

(e) 

No Participantshall have any of the rights of a shareholder in respect to Common Sharesunderlying Restricted Stock Units until all applicable vesting conditions havebeen achieved or satisfied and such Common Shares have been issued by theCorporation pursuant to this Plan. 

(f) 

No Participant resident inCanada shall be entitled to receive a Restricted Stock Award. 

(g) 

With respect topersons who are subject to taxation under the Code, Options shall be grantedonly to persons for whom Common Shares constitutes "service recipient stock"within the meaning of Code Section 409A and the regulations thereunder. 

(h) 

Notwithstandingany other provision of the Plan, the Board or the Committee may impose suchconditions on any Option, Restricted Stock Award or Restricted Stock Unit Award,and amend the Plan in any such respects, as may be required to satisfy therequirements of Rule 16b-3, as amended (or any successor or similar rule), underthe Exchange Act. 
**7.

**Participant Agreements**

A Participant Agreement will be entered into between theCorporation and each Participant to whom an Option, Restricted Stock Award orRestricted Stock Unit Award is granted hereunder. Each Participant Agreementwill set out the number of Common Shares subject to the Option or RestrictedStock Award, or the number of Restricted Stock Units subject to the RestrictedStock Unit Award, as the case may be, the Exercise Price in the case of Options,and any other terms and conditions, all in accordance with the provisions ofthis Plan. The Participant Agreement will be in such form as the Committee mayfrom time to time approve, and may contain such terms as may be considerednecessary in order that the Option, Restricted Stock Award or Restricted StockUnit Award will comply with any provisions respecting options, stock awards, orstock unit awards in the income tax or other laws in force in any country orjurisdiction of which the Participant may from time to time be a resident orcitizen or the rules of any regulatory body having jurisdiction over theCorporation. It is the intent of the Corporation that, with respect to personswho are subject to taxation under the Code, Options and Restricted Stock Awardsbe exempt from Section 409A of the Code. 
**8.

**Vesting**
The Committee may, in its sole discretion, determine the timeduring which Options, Restricted Stock Awards and Restricted Stock Unit Awardsshall vest and the method of vesting or, with respect to Options, determine thatno vesting restriction shall exist. 

In the case of Participants subject to taxation under theCode, each Restricted Stock Award shall be evidenced by a Participant Agreementthat shall specify the number of Common Shares subject to the Restricted StockAward, the applicable restrictions (whether service-based restrictions, with orwithout performance acceleration, and/or performance-based restrictions), thePeriod of Restriction, and such other provisions as the Committee shalldetermine. The Committee may also impose such other restrictions underapplicable federal, provincial or state securities laws as it may deemadvisable, and may legend the certificates representing Restricted Stock Awardto give appropriate notice of such restrictions. To the extent deemed necessaryby the Committee, the Corporation will maintain custody of any certificatesevidencing Common Shares granted pursuant to a Restricted Stock Award, and theParticipant will deliver to the Corporation a stock power, endorsed in blank,with respect to each Restricted Stock Award. Subject to any applicablesecurities laws restrictions, Common Shares covered by each Restricted StockAward made under the Plan shall become non-forfeitable and freely transferableby the Participant after the last day of the Period of Restriction and, whereapplicable, after a determination of the satisfaction or achievement of any andall applicable Performance Goal(s) by the Committee. Once the Common Shares arereleased from the restrictions, any legend as provided for under this paragraphshall be removed. Restricted Stock Awards can only become non-forfeitable andfully transferable during the Participant’s lifetime in the hands of theParticipant. 

6
In the case of Participants subject to taxation under the *Income Tax Act* (Canada), each Restricted Stock Unit Award shall be evidencedby a Participant Agreement that shall specify the number of Restricted StockUnits subject to the Restricted Stock Unit Award, the applicable vestingconditions (whether service-based conditions, with or without performanceacceleration, and/or performance-based conditions), and such other provisions asthe Committee shall determine. The Committee may also impose such otherconditions under applicable federal, provincial or state securities laws as itmay deem advisable. The Corporation will maintain a record of all outstandingRestricted Stock Units granted pursuant to a Restricted Stock Unit Award. Upondetermination by the Committee that all vesting conditions of Restricted StockUnits held by a Participant (including any applicable Performance Goal(s)) havebeen satisfied or achieved, the Participant may elect to have the Corporationissue to the Participant from treasury one Common Share for each RestrictedStock Unit that has vested. Restricted Stock Unit Awards can only vest duringthe Participant’s lifetime in the hands of the Participant. 

Notwithstanding the forgoing, where a Participant is subjectto the taxation under the Code and receives a Restricted Stock Unit Award, upondetermination by the Committee that all vesting conditions of Restricted StockUnits held by a Participant (including any applicable Performance Goal(s)) havebeen satisfied or achieved, the Corporation shall forthwith issue to theParticipant from treasury one Common Share for each Restricted Stock Unit thathas vested. **9.

**Voting andDividend Rights of Restricted Stock Awards**
Unless otherwise provided in the Participant Agreement,during the period of restriction, Participants holding Restricted Stock Awardsmay exercise voting rights with respect to such Common Shares and shall, unlessotherwise provided in the Participant Agreement (which may or may not providefor the accumulation and payment of dividends until the Common Shares of theRestricted Stock Award to which the dividends and other distributions relatesvest), be entitled to receive all dividends with respect to such Common Shares.**10. 

Exercise Price of Options**
The Committee shall determine the Exercise Price of theOptions. The Exercise Price shall be not less than the price permitted by anystock exchange on which the Common Shares are then listed or other regulatorybody having jurisdiction. 

The Exercise Price shall be determined by the Committee at the time theOption is granted, which shall in no event be lower than the Market Value of theCommon Shares as of the date of grant. 

Payment of the Exercise Price by a Participant resident in Canada may not bemade in Common Shares. ****

7**11. 

Duration of Options**
Each Option and all rights thereunder shall be expressed to expire on thedate set out in the Participant Agreements and shall be subject to earliertermination as provided in Sections 14 and 15. 

(a) 

Subject to amaximum ten-year period, the Option period shall be a period of time fixed bythe Committee, provided that the Option period shall be reduced with respect toany Option as provided in Sections 14 and 15 covering cessation as a director,officer, employee or Consultant of the Corporation or any of its subsidiaries orAffiliates or death of the Participant. 

(b) 

Except as setforth in Sections 14 and 15, or as otherwise determined by the Committee in itssole discretion, no Option may be exercised unless the Participant is at thetime of such exercise a director, officer, employee or Consultant of theCorporation or any of its subsidiaries or Affiliates. 

(c) 

Notwithstandinganything else in the Plan, where the Option expires or is deemed to expireduring a period of time imposed by the Corporation upon certain designatedpersons during which those persons may not trade in any securities of theCorporation (a "Black-Out Period") or within ten (10) business days from thedate that any such BlackOut Period ends, the Option shall not be deemed toexpire until the day that is ten (10) business days from the last day of theBlack-Out Period. 
**12. 

Duration of Restricted StockAwards and Restricted Stock Unit Awards**
In the case of Restricted Stock Awards, the Period of Restriction shall notin any event exceed ten years. 

In the case of Restricted Stock Unit Awards, the period during which aRestricted Stock Unit may vest and be exercised shall not in any event exceedten years. 
**13. 

Exercise of Options andRestricted Stock Units**
Subject to this Plan and the applicable ParticipantAgreement, an Option may be exercised in whole or in part from time to time atsuch times and in compliance with such requirements as the Committee shalldetermine and set forth in the Participant Agreement. The exercise of any Optionwill be contingent upon receipt by the Corporation at its head office of awritten notice of exercise, specifying the number of shares with respect towhich the Option is being exercised and accompanied by cash payment, certifiedcheque or bank draft for the full purchase price of such shares. No Participant,nor legal representatives of a Participant will be, or will be deemed to be, aholder of any Common Shares subject to an Option under this Plan, unless anduntil the certificates for such shares are issued to such persons under theterms of the Plan. 

Subject to this Plan and the applicable ParticipantAgreement, a Restricted Stock Unit may be exercised in whole or in part fromtime to time at such times and in compliance with such requirements as theCommittee shall determine and set forth in the Participant Agreement, but in anyevent not until such Restricted Stock Units have vested in accordance withSection 8. The exercise of any Restricted Stock Unit will be contingent uponreceipt by the Corporation at its head office of a written notice of exercise,specifying the number of shares with respect to which the Restricted Stock Unitis being exercised. No Participant, nor legal representatives of a Participantwill be, or will be deemed to be, a holder of any Common Shares subject to aRestricted Stock Unit under this Plan, unless and until the certificates forsuch shares are issued to such persons under the terms of the Plan. 

8**14. 

Ceasing to Be a Director,Officer, Employee or Consultant**
(a) 

If a Participantwho was awarded an Option shall cease to be a director, officer, employee orConsultant of the Corporation or any of its subsidiaries or Affiliates for anyreason (other than death), the Participant may, but only within the 90 days ofthe date the Participant's ceased to be a director, officer, employee orConsultant and subject to the ten-year maximum period provided in Section 11(a)hereof, exercise such Participant’s Options to the extent that the Participantwas entitled to exercise them at the date of such cessation. 

(b) 

Except asotherwise provided in the Participant Agreement, if a Participant who wasawarded a Restricted Stock Award shall cease to be a director, officer, employeeor Consultant of the Corporation or any of its subsidiaries or Affiliates forany reason (other than death) prior to the expiration of a Period ofRestriction, any unvested Common Shares under such Restricted Stock Award shallbe forfeited and returned to the Corporation. 

(c) 

Except asotherwise provided in the Participant Agreement, if a Participant who wasawarded a Restricted Stock Unit Award shall cease to be a director, officer,employee or Consultant of the Corporation or any of its subsidiaries orAffiliates for any reason (other than death) prior to the satisfaction orachievement of all applicable vesting conditions, any unvested Restricted StockUnits under such Restricted Stock Unit Award at the date of such cessation shallbe forfeited. 

(d) 

To the extentthat a Participant’s rights in an Option, Restricted Stock Award or RestrictedStock Unit Award expire, are forfeited or do not vest upon the completion of aspecified period of employment or continuous service, the Committee may decidein each case to what extent leaves of absence for government or militaryservice, illness, temporary disability or other reason shall not be deemedinterruptions of continuous employment or service for purposes of Options,Restricted Stock Awards and Restricted Stock Unit Awards. 

(e) 

A change in thestatus, office, position or duties of a Participant from the status, office,position or duties held by such Participant on the date of which the Option,Restricted Stock Award or Restricted Stock Unit Award was granted to suchParticipant shall not result in termination of the Option, Restricted StockAward or Restricted Stock Unit Award granted to such Participant provided thatsuch Participant remains a director, officer, employee or Consultant otherwiseeligible to receive Options, Restricted Stock Awards or Restricted Stock UnitAwards. 
**15. 

Death of Participant**
In the event of the death of a Participant, any Optionpreviously granted to such Participant shall be exercisable only within thetwelve months following such death (subject to the ten-year maximum periodprovided in Section 11(a) hereof) and then only: 

(a) 

by the person or persons to whomthe Participant’s rights under the Option shall pass by the Participant’s willor the laws of descent and distribution; and 

9
(b) 

if and to the extent that theParticipant was entitled to exercise the Option at the date of the Participant’sdeath. 

Except as otherwise provided in the Participant Agreement, inthe event a Participant who was awarded a Restricted Stock Award dies prior tothe expiration of a Period of Restriction, any unvested Common Shares under suchRestricted Stock Award at the date of the Participant’s death shall be forfeitedand returned to the Corporation. 

Except as otherwise provided in the Participant Agreement, inthe event a Participant who was awarded a Restricted Stock Unit Award dies priorto the satisfaction or achievement of all applicable vesting conditions, anyunvested Restricted Stock Units under such Restricted Stock Unit Award at thedate of the Participant’s death shall be forfeited**. 
16. 

Tax Withholding.
The Corporation shall have the power and the right to deductor withhold, or require a Participant to remit to the Corporation, an amountsufficient to satisfy federal, provincial, state and local taxes (including theParticipant’s Federal Insurance Contributions Act (United States) obligation, ifany) required by law to be withheld with respect to any grant, exercise, orpayment made under or as a result of the Plan or any Option, Restricted StockAward or Restricted Stock Unit Award thereunder. 

With respect to withholding required upon the exercise of anOption, the lapse of restrictions on Restricted Stock Awards, the satisfactionor achievement of all applicable vesting conditions pertaining to a RestrictedStock Unit, or the occurrence of any other taxable event with respect to anyaward, Participants may elect, subject to the approval of the Committee, or theCommittee may require Participants to satisfy the withholding requirement, inwhole or in part, by having the Corporation withhold Common Shares having aMarket Value equal to the amount required to be withheld. The value of theCommon Shares to be withheld shall be based on the Market Value of the CommonShares on the date that the amount of tax to be withheld is to be determined.All elections by Participants shall be irrevocable and be made in writing and insuch manner as determined by the Committee in advance of the day that thetransaction becomes taxable. 

Notwithstanding any other provision of this Plan, withholdingrequired upon the exercise of an Option by a Participant resident in Canadashall not be satisfied by the Corporation withholding Common Shares otherwiserequired to be delivered to the Participant by the Corporation upon the exerciseof the Option or by the Participant delivering Common Shares to the Corporation.**17. 

Adjustments**
Other than dividends declared in the normal course andsubject to any required approvals of applicable regulatory authorities and stockexchanges, in the event of any change in the Common Shares by reason of anystock dividend, recapitalization, merger, consolidation, split-up, combinationor exchange of shares, or rights offering to purchase Common Shares at a pricesubstantially below fair market value, or of any similar change affecting theCommon Shares, the number and kind of shares which thereafter may be optionedand awarded under the Plan and the number and kind of shares subject to theOption, Restricted Stock Award or Restricted Stock Unit Award in outstandingParticipant Agreements and the purchase price per share thereof shall beappropriately adjusted consistent with such change in such manner as the Boardmay deem equitable to prevent substantial dilution or enlargement of the rightsgranted to, or available for, Participants in the Plan. 

10
The foregoing adjustment and the manner of application of theforegoing provisions shall be determined by the Board in its sole discretion andonly to the extent permitted under Section 409A of the Code and the regulationsthereunder. No adjustment to the Common Shares to be delivered upon the exerciseof an Option, or the vesting of a Restricted Stock Award or Restricted StockUnit may result in fractional shares. If that were to be the case, the number ofshares would be rounded down to the nearest whole Common Share and anyadjustments to the exercise price of an Option will be rounded up to the nearestone cent.**18. 

Transferability**
All benefits, rights, Options, Restricted Stock Awards andRestricted Stock Unit Awards accruing to any Participant in accordance with theterms and conditions of the Plan shall not be transferable or assignable unlessspecifically provided as follows. 

Options, Restricted Stock Awards, or Restricted Stock UnitAwards granted under the Plan shall be transferable or assignable only to a"permitted assign" and shall be exercisable only by the Participant or his orher permitted assign, and only in accordance with applicable securities laws.Any tax consequences will be the responsibility of the Participant and/or their"permitted assign" and not of the Corporation. For the purposes hereof"permitted assign" means for such Participant subject to taxation in Canada: 

(a) 

a trustee, custodian oradministrator acting on behalf, or for the benefit, of the Participant; 

(b) 

a holding entity of theParticipant; 

(c) 

a registered retirement savingsplan ("RRSP") or registered retirement income fund ("RRIF") of the Participant,as such terms are defined in the Income Tax Act (Canada); 

(d) 

a spouse of the Participant; 

(e) 

a trustee, custodian oradministrator acting on behalf, or for the benefit, of the spouse of theParticipant; 

(f) 

a holding entity of the spouseof the Participant; or 

(g) 

an RRSP or RRIF of the spouse ofthe Participant. 

Comparable "permitted assigns" may be permitted forparticipants subject to taxation under the Code but only with the consent of theCorporation and upon completion of any necessary filings required underapplicable securities laws. 
**19. 

Takeover or Change in Control**
The Board of Directors shall have the power, in the event of: 

(a) 

any dispositionof substantially all of the assets of the Corporation, or the dissolution,merger, amalgamation or consolidation of the Corporation, with or into any othercorporation, or the merger, amalgamation or consolidation of any othercorporation into the Corporation, 

(b) 

any change in control of theCorporation, or 

11
(c) 

an offer is made generally tothe holders of the Corporation’s voting securities to purchase those securitiesand which is a "takeover bid" as defined in the ASA; 

to amend outstanding Participant Agreements to permit theexercise of any or all of the remaining Options, or the vesting of RestrictedStock Awards or Restricted Stock Unit Awards, prior to the completion of anysuch transaction. If the Board of Directors shall exercise such power, theOptions shall be deemed to have been amended to permit the exercise thereof inwhole or in part by the Participant, and the Restricted Stock Awards orRestricted Stock Unit Awards shall be deemed to have been amended to permit thevesting thereof in whole or in part, at any time or from time to time asdetermined by the Board of Directors prior to the completion of suchtransaction. For the purposes of the foregoing, a change in control of theCorporation shall occur if there becomes a Control Person (as defined in the ASA)with respect to the securities of the Corporation, who is not a Control Personas at the effective date of this Plan. 

In the event of any transaction that could result in a changein control of the Corporation or constitute a "takeover bid" as defined in theASA, the Committee in its discretion may (i) declare that outstanding Options,whether or not then exercisable, shall terminate as of the date of the change incontrol without any payment to holder thereof, provided the Committee gives itsprior written notice to the Participant of such termination and the right toexercise such outstanding Options for at least ten (10) days before the changein control to the extent then exercisable (or to the extent exercisable as ofthe change in control), (ii) terminate on or before such change in control alloutstanding Options, whether or not then exercisable, in consideration ofpayment to holder of the Option, with respect to each Common Share for which theOption is then exercisable (or for which the Option will be exercisable as ofthe change in control) of the excess, if any, of the Market Value on such dateof a Common Share over the Exercise Price, (provided that Options that are notthen exercisable and that are not to become exercisable upon the change incontrol, and Options with respect to which the Market Value of the Common sharesexceeds the option price shall be cancelled without any payment therefor), (iii)terminate on or before the change in control outstanding Restricted Stock Awardsthat are not then non-forfeitable and freely transferable (and will not becomenon-forfeitable and freely transferable on the change in control) without anypayment to the holder thereof, (iv) terminate on or before the change in controloutstanding Restricted Stock Awards that are not then non-forfeitable and freelytransferable (or that would not become non-forfeitable or freely transferable onthe change in control) in exchange for payment equal to the Market Value of theCommon Shares subject to the Restricted Stock Award (v) terminate on or beforethe change in control outstanding Restricted Stock Unit Awards of which allapplicable vesting conditions have not been satisfied or achieved (and will notbe satisfied or achieved on the change in control) without any payment to theholder thereof, (vi) terminate on or before the change in control outstandingRestricted Stock Unit Awards in respect of which all applicable vestingconditions have not been satisfied or achieved (or that would not be satisfiedor achieved on the change in control) in exchange for payment equal to theMarket Value of the Common Shares underlying the Restricted Stock Unit Award, or(vii) take such other actions as the Committee determines to be reasonable topermit the Participant to realize the value of the Option, Restricted StockAward or Restricted Stock Unit Award (for purposes hereof, the value of Optionswhose Exercise Price exceeds the Market Value of the Common Shares, the value ofa Restricted Stock Award that would not become non-forfeitable and fullytransferable as of the change in control, and the value of a Restricted StockUnit Award in respect of which all applicable vesting conditions would not besatisfied or achieved on the change in control, shall be deemed to be zero). Thesame actions need not be taken with respect to outstanding Options, RestrictedStock Awards or Restricted Stock Unit Awards. 
**20. 

Amendment and Termination ofPlan**
The Board may at any time or from time to time, in its soleand absolute discretion, amend, suspend, terminate or discontinue the Plan andmay amend the terms and conditions of Options, Restricted Stock Awards orRestricted Stock Unit Awards granted under the Plan, subject to any requiredapproval of any regulatory authority or stock exchange or the shareholders ofthe Corporation. Without limiting the generality of the foregoing, but subjectto any required regulatory approval of any regulatory authority or stockexchange, the Board may at any time alter, amend or vary the Plan or the termsand conditions of Options, Restricted Stock Awards or Restricted Stock UnitAwards granted under the Plan, without the approval of the shareholders of theCorporation if the alteration, amendment or variance: 

12
(a) 

is for thepurpose of curing any ambiguity, error or omission in the Plan or to correct orsupplement any provision of the Plan that is inconsistent with any otherprovision of the Plan; 

(b) 

is necessary to comply withapplicable law or the requirements of any stock exchange on which the CommonShares of the Corporation are listed; 

(c) 

is an amendment to the Planrespecting administration and eligibility for participation under the Plan; 

(d) 

changes theterms and conditions on which Options, Restricted Stock Awards or RestrictedStock Unit Awards may be granted pursuant to the Plan including the provisionsrelating to Exercise Price, vesting provisions and Option Period; 

(e) 

changes thetermination provisions of an Option, Restricted Stock Award or Restricted StockUnit Award or the Plan which does not entail an extension beyond the originalexpiry date; or 

(f) 

is an amendment to the Plan of a"housekeeping nature"; 

provided that in the case of any alteration, amendment or variance referredto in this Section 21, the alteration, amendment or variance does not: 

(g) 

amend the number of CommonShares issuable under the Plan; 

(h) 

add any form of financialassistance by the Corporation for the exercise of any Option; 

(i) 

result in a material orunreasonable dilution in the number of outstanding Common Shares or any materialbenefit to an Option holder; 

(j) 

change the class of eligibleparticipants to the Plan which would have the potential of broadening orincreasing participation by Insiders; 

(k) 

increase the term of an Option,Restricted Stock Award or Restricted Stock Unit Award held by an Insider; or 

(l) 

decrease the exercise price ofan Option held by an Insider. 

Notwithstanding the foregoing, no such amendment, suspension,termination or discontinuance may adversely impair the rights of any Participantwith respect to outstanding Options, Restricted Stock Awards or Restricted StockUnit Awards without the Participant’s consent. Moreover, no amendment ortermination of an outstanding Option, Restricted Stock Award or Restricted StockUnit Award may be made without the Participant’s consent if, as determined bythe Committee in its sole discretion, such amendment or termination wouldsubject the Participant to any excise tax or penalty under Code Section 409A.Notwithstanding the foregoing, the Corporation and its subsidiaries andAffiliates shall not be liable to the Participant if an Option, Restricted StockAward or Restricted Stock Unit Award otherwise results in the Participant beingsubject to tax under Code Section 409A. 

13**21. 

NecessaryApprovals**
The ability of the Options, Restricted Stock Awards orRestricted Stock Unit Awards to be exercised or vest, as the case may be, andthe obligation of the Corporation to issue and deliver shares in accordance withthe Plan are subject to any approvals which may be required from theshareholders of the Corporation and any regulatory authority or stock exchangehaving jurisdiction over the securities of the Corporation and compliance withapplicable securities laws. If any shares cannot be issued to any Participantfor whatever reason, the obligation of the Corporation to issue such sharesshall terminate and any Option exercise price paid to the Corporation will bereturned to the Participant. 

No Option is exercisable and no Restricted Stock Award norRestricted Stock Unit Award is to be granted nor Common Shares issued except incompliance with all applicable federal, provincial or state laws (including,without limitation securities and withholding tax requirements), any listingagreement to which the Corporation is a party and the rules of all stockexchanges on which the Corporation’s Common Shares may be listed. 

The Corporation shall be under no obligation to anyParticipant to register for offering or resale or to qualify for an exemptionunder the U.S. Securities Act of 1933, as amended, or to register or qualifyunder state securities laws, any Common Shares, security or interest in asecurity paid or issued under, or created by, the Plan, or to continue in effectany such registrations or qualifications if made. The Corporation may issuecertificates for shares with such legends and subject to such restrictions ontransfer and stop-transfer instructions as counsel for the Corporation deemsnecessary or desirable for compliance by the Corporation with United Statesfederal and state securities laws. 
**22. 

Effective Dateof Plan**
Subject to the approval of any stock exchange on which theshares of the Corporation are to be listed or other regulatory body havingjurisdiction, the Plan as amended will be adopted by the Committee, and if soapproved, the Plan shall become effective on the date on which this Plan isapproved by the shareholders of the Corporation. **23. 

Governing Law**
This Plan and all Options, Restricted Stock Awards andRestricted Stock Unit Awards granted hereunder shall be governed, construed andadministered in accordance with the laws of the Province of Alberta and the lawsof Canada applicable therein. 
**24. 

No Fettering ofDirectors’ Discretion**
Nothing contained in this Plan will restrict or limit or bedeemed to restrict or limit the right or power of the Board of Directors inconnection with any allotment and issuance of Common Shares which are notallotted and issued under this Plan including, without limitation, with respectto any other compensation arrangements. 

Approved by the shareholders of the Corporation on July 26,2007.******************