**Exhibit 10.5****IVANHOE ENERGY INC.****EMPLOYEES’ AND DIRECTORS’ EQUITY INCENTIVE PLAN****AMENDED AND RESTATED****MAY 3, 2007****PART 1 — INTRODUCTION****1.1 Purpose**The purpose of the Plan is to secure for the Company and its shareholders the benefits of incentiveinherent in share ownership by the directors and key employees of the Company and its Affiliateswho, in the judgement of the Board, will be largely responsible for its future growth and success.It is generally recognized that share plans of the nature provided for herein aid in retaining andencouraging employees and directors of exceptional ability because of the opportunity offered tothem to acquire a proprietary interest in the Company.**1.2 Definitions**(a) “Affiliate” has the meaning set forth in Section 1(2) of the Ontario Securities Act, asamended, and includes those issuers that are similarly related, whether or not any of theissuers are corporations, companies, partnerships, limited partnerships, trusts, income trustsor investment trusts or any other organized entity issuing securities. (b) “Associate” has the meaning assigned to it in the Ontario Securities Act, as amended. (c) “Board” means the board of directors of the Company.(d) “Blackout Period” means a period in which the trading of Shares or other securities of theCompany is restricted under the Company’s Corporate Disclosure, Confidentiality and SecuritiesTrading Policy, or under an insider trading policy or other policy of the Company then ineffect. (e) “Code” means the United States Internal Revenue Code of 1986, as amended.(f) “Company” means Ivanhoe Energy Inc., a company incorporated under the laws of the YukonTerritory. (g) “Committee” has the meaning attributed thereto in Section 6.1.(h) “Eligible Directors” means the directors of the Company or any Affiliate thereof who are, assuch, eligible for participation in the Plan.(i) “Eligible Employees” means full time and part time employees (including employees who areofficers and directors) of the Company or any Affiliate thereof, whether or not they have awritten employment contract with the Company, determined by the Board, upon recommendation ofthe Committee, to be employees, eligible for participation in the Plan. “Eligible Employees”shall include Service Providers eligible for participation in the Plan as determined by theBoard.(j) “Exchange Act” means the United States Securities Exchange Act of 1934, as amended.
 

 
- 2 -(k) “Fair Market Value” means, with respect to a Share subject to Option, the weighted averageprice of the Shares on the Stock Exchange for the five days on which Shares were tradedimmediately preceding the date in respect of which Fair Market Value is to be determined. Ifthe Shares are not listed and posted for trading on a Stock Exchange on such day, the FairMarket Value shall be such price per Share as the Board, acting in good faith, may determine.(l) “Foreign Private Issuer” has the meaning assigned to it in the rules promulgated under theExchange Act.(m) “Insider” has the meaning assigned to it in the Ontario Securities Act, as amended, and alsoincludes an Associate or Affiliate of any person who is an Insider. (n) “Option” means an option granted under the terms of the Share Option Plan. (o) “Option Period” means the period during which an Option may be exercised.(p) “Optionee” means an Eligible Employee or Eligible Director to whom an Option has been grantedunder the terms of the Share Option Plan.(q) “Participant” means, in respect of any Plan, an Eligible Employee or Eligible Director whoparticipates in such Plan.(r) “Plan” means, collectively the Share Option Plan, the Share Bonus Plan and the Share PurchasePlan and “Plan” means any such plan as the context requires.(s) “Service Provider” means a person or company engaged to provide ongoing management orconsulting services for the Company or for any entity controlled by the Company.(t) “Share Bonus Plan” means the plan established and operated pursuant to Part 3 and Part 5hereof.(u) “Share Option Plan” means the plan established and operated pursuant to Part 2 and Part 5hereof.(v) “Share Purchase Plan” means the plan established and operated pursuant to Part 4 and Part 5hereof. (w) “Shares” means the common shares of the Company.(x) “Stock Exchange” means the principal stock exchange upon which the Shares are listed or uponwhich the Shares have been approved for listing.(y) “U.S. Optionee” has the meaning assigned to it in Section 2.14 of this Plan.**PART 2 — SHARE OPTION PLAN****2.1 Participation**Options shall be granted only to Eligible Employees and Eligible Directors.
 

 
- 3 -**2.2 Administration of Share Option Plan**The Share Option Plan shall be administered by the Committee.**2.3 Price**The exercise price per Share of any Option shall be not less than one hundred per cent (100%) ofthe Fair Market Value on the date of grant.**2.4 Grant of Option**The Board, on the recommendation of the Committee, may at any time authorize the granting ofOptions to such Eligible Employees and Eligible Directors as it may select for the number of Sharesthat it shall designate, subject to the provisions of the Share Option Plan. The date of grant ofan Option shall be (i) the date such grant was approved by the Committee for recommendation to theBoard, provided the Board approves such grant; or (ii) for a grant of an Option not approved by theCommittee for recommendation to the Board, the date such grant was approved by the Board.Each Option granted to an Eligible Employee or to an Eligible Director shall be evidenced by astock option agreement with terms and conditions consistent with the Share Option Plan and asapproved by the Board on the recommendation of the Committee (which terms and conditions need notbe the same in each case and may be changed from time to time, subject to section 5.7 of the Planand the approval of any material changes by the Stock Exchange).**2.5 Terms of Options**The Option Period shall be ten years from the date such Option is granted or such lesser durationas the Board, on the recommendation of the Committee, may determine at the date of grant, and maythereafter be reduced with respect to any such Option as provided in Section 2.8 hereof coveringtermination of employment or death of the Optionee; provided, however, that at any time the expirydate of the Option Period in respect of any outstanding Option under this Plan (either before orafter its amendment or restatement on May 3, 2007) should be determined to occur either during aBlackout Period or within ten business days following the expiry of the Blackout Period, the expirydate of such Option Period shall be deemed to be the date that is the tenth business day followingthe expiry of the Blackout Period.Unless otherwise determined from time to time by the Board, on the recommendation of the Committee,Options may be exercised (in each case to the nearest full Share) during the Option Period asfollows:(a) at any time during the first year of the Option Period, the Optionee may purchase up to 331/3% of the total number of Shares reserved for issuance pursuant to his or her Option; and(b) at any time during each additional year of the Option Period the Optionee may purchase anadditional 33 1/3% of the total number of Shares reserved for issuance pursuant to his or herOption plus any Shares not purchased in accordance with the preceding subsection (a) until, inthe third year of the Option Period, 100% of the Option will be exercisable.
 

 
- 4 -Notwithstanding the foregoing, Options shall become exercisable at the rate of at least 20% peryear over five years from the date the Option is granted, subject to reasonable conditions such ascontinued employment. However, in the case of an Option granted to officers, directors orconsultants of the Company or any of its Affiliates, the Option may become fully exercisable,subject to reasonable conditions such as continued employment, at any time or during any periodestablished by the Company or any of its Affiliates.Except as set forth in Section 2.8, no Option may be exercised unless the Optionee is at the timeof such exercise:(a) in the case of an Eligible Employee, in the employ of the Company or an Affiliate and shallhave been continuously so employed since the grant of his Option, but absence on leave, having theapproval of the Company or such Affiliate, shall not be considered an interruption of employmentfor any purpose of the Share Option Plan; or (b) in the case of an Eligible Director, a director of the Company or an Affiliate and shall havebeen such a director continuously since the grant of his Option.The exercise of any Option will be contingent upon receipt by the Company of cash payment of thefull purchase price of the Shares being purchased. No Optionee or his legal representatives orlegatees will be, or will be deemed to be, a holder of any Shares subject to an Option, unless anduntil certificates for such Shares are issued to him or them under the terms of the Share OptionPlan.**2.6 Share Appreciation Right**A Participant may, if at any time determined by the Board, on the recommendation of the Committee,have the right (the “Right”), when entitled to exercise an Option, to terminate such Option inwhole or in part (the “Terminated Option”) by notice in writing to the Company and, in lieu ofreceiving the Shares (the “Option Shares”) to which the Terminated Option relates, to receive thenumber of Shares, disregarding fractions, which is equal to the quotient obtained by:(a) subtracting the Option exercise price per Share from the Fair Market Value per Share on the dayimmediately prior to the exercise of the Right and multiplying the remainder by the number ofOption Shares; and (b) dividing the product obtained under Section 2.6(a) by the Fair Market Value per Share on theday immediately prior to the exercise of the Right.If a Right is granted in connection with an Option, it is exercisable only to the extent and on thesame conditions that the related Option is exercisable. For greater certainty, for purposes of theaggregate number of shares reserved for issuance under Section 5.1 of the Plan, in the event of anexercise of a Right in respect of an Option, the number of Shares available for issuance under thePlan will be reduced by the number of Shares to which the Terminated Option relates rather than thenumber of Shares issued upon exercise of the Right in respect of such Option.**2.7 Lapsed Options**If Options are surrendered, terminated or expire without being exercised in whole or in part, newOptions may be granted covering the Shares not purchased under such lapsed Options,
 

 
- 5 -subject, in the case of the cancellation of an Option in connection with the grant of a new Optionto the same person on different terms, to the consent of the Stock Exchange.**2.8 Effect of Termination of Employment or Death**If an Optionee:(a) dies while employed by or while a director of the Company or its Affiliate, any Option held byhim at the date of death shall become exercisable in whole or in part, but only by the person orpersons to whom the Optionee’s rights under the Option shall pass by the Optionee’s will orapplicable laws of descent and distribution. Unless otherwise determined by the Board, on therecommendation of the Committee, all such Options shall be exercisable only to the extent that theOptionee was entitled to exercise the Option at the date of his death and only for six months afterthe date of death or prior to the expiration of the Option Period in respect thereof, whichever issooner; (b) ceases to be employed by or act as a director of the Company or its Affiliate for cause, noOption held by such Optionee will, unless otherwise determined by the Board, on the recommendationof the Committee, be exercisable following the date on which such Optionee ceases to be so employedor ceases to be a director, as the case may be; or (c) ceases to be employed by or act as a director of the Company or its Affiliate for any reasonother than cause then, unless otherwise determined by the Board, on the recommendation of theCommittee, any Option held by such Optionee at the effective date thereof shall become exercisablein whole or in part for a period of up to six months thereafter, but in no event less than 30 days,subject to the earlier expiration of the Option Period.**2.9 Effect of Takeover Bid**If a bona fide offer (the “Offer”) for Shares is made to the Optionee or to shareholders generallyor to a class of shareholders which includes the Optionee, which Offer, if accepted in whole or inpart, would result in the offeror exercising control over the Company within the meaning ofsubsection 1(3) of the Ontario Securities Act (as amended from time to time), then the Companyshall, immediately upon receipt of notice of the Offer, notify each Optionee currently holding anOption of the Offer, with full particulars thereof, whereupon, notwithstanding Section 2.5 hereof,such Option may be exercised in whole or in part by the Optionee so as to permit the Optionee totender the Shares received upon such exercise (the “Optioned Shares”) pursuant to the Offer.**2.10 Effect of the Amalgamation or Merger**If the Company amalgamates or merges with or into another corporation, any Shares receivable on theexercise of an Option shall be converted into the securities, property or cash which theParticipant would have received upon such amalgamation or merger if the Participant had exercisedhis Option immediately prior to the record date applicable to such amalgamation or merger, and theoption price shall be adjusted appropriately by the Board and such adjustment shall be binding forall purposes of the Share Option Plan. Any such adjustment shall be in accordance with regulatorypolicies.
 

 
- 6 -**2.11 Adjustment in Shares Subject to the Plan**If there is any change in the Shares through the declaration of stock dividends of Shares orconsolidations, subdivisions or reclassification of Shares, or otherwise, the number of Sharesavailable under the Share Option Plan, the Shares subject to any Option, and the Option pricethereof shall be adjusted appropriately by the Board and such adjustment shall be effective andbinding for all purposes of the Share Option Plan.**2.12 Loans to Employees**Subject to applicable law, the Board may at any time authorize the Company to loan money to anEligible Employee (which for the purpose of this section 2.12 excludes any director or executiveofficer (or equivalent thereof) of the Company), on such terms and conditions as the Board mayreasonably determine, to assist such Eligible Employee to exercise an Option held by him or her.Such terms and conditions shall include, in any event, interest at prevailing market rates, a termnot in excess of one year, and security in favour of the Company represented by that number ofShares issued pursuant to the exercise of an Option in respect of which such loan was made orequivalent security which equals the loaned amount divided by the Fair Market Value of the Shareson the date of exercise of the Option, which security may be granted on a non-recourse basis.**2.13 Transfer of Options**Options are non-transferable except by will or by the laws of descent and distribution.Notwithstanding the foregoing, and to the extent permitted by Section 422 of the Code, the Board,in its discretion, may permit distribution of an Option to an inter vivos or testamentary trust inwhich the Option is to be passed to beneficiaries upon the death of the trustor (settlor).**2.14 United States Residents**Subject to Sections 2.14(b), (c) and (d) of this Plan, any Option granted under this Plan to anOptionee who is a citizen or resident of the United States (including its territories, possessionsand all areas subject to its jurisdiction) (a “U.S. Optionee”) shall be an “incentive stock option”within the meaning of Section 422 of the Code (provided, for purposes of this Section 2.14 only, aU.S. Optionee who is a director is then also an officer or employee of the Company or one of itsAffiliates). In addition, no provision of this Plan, as it may be applied to a U.S. Optionee,shall be construed so as to be inconsistent with any provision of Section 422 of the Code.Notwithstanding anything in this Plan to the contrary, the following provisions shall apply to eachU.S. Optionee:(a) any director of the Company or one of its Affiliates who is a U.S. Optionee shall be ineligibleto vote upon the granting of such Option to themselves;
 

 
- 7 -(b) subject to Section 2.14(d), any Option granted under this Plan to a U.S. Optionee shall be anincentive stock option within the meaning of Section 422 of the Code provided that the aggregateFair Market Value (determined as of the time the Option is granted) of the Shares with respect towhich incentive stock options are exercisable for the first time by such U.S. Optionee during anycalendar year under this Share Option Plan and all other stock option plans of the Company or itsAffiliates does not exceed US$100,000; (c) to the extent the aggregate Fair Market Value (determined as of the time the Option is granted)of the Shares with respect to which incentive stock options are exercisable for the first time bysuch U.S. Optionee during any calendar year under this Share Option Plan and all other stock optionplans of the Company or its Affiliates exceeds US$100,000, such Options shall be treated asnonqualified stock options (i.e. Options which fail to qualify as incentive stock options withinthe meaning of Section 422 of the Code) in accordance with Section 422(d) of the Code; (d) any U.S. Optionee who is a Service Provider or director (and who is not also an officer oremployee) of the Company or one of its Affiliates will be ineligible to receive incentive stockoptions but will be permitted to receive nonqualified stock options pursuant to this Plan; (e) the purchase price for Shares under each Option granted to a U.S. Optionee pursuant to thisPlan shall be not less than the Fair Market Value of such Shares at the time the Option is granted; (f) if any U.S. Optionee to whom an Option is to be granted under this Plan is at the time of thegrant of such Option the owner of Shares possessing more than 10% of the total combined votingpower of all classes of shares of the Company or any of its Affiliates, then the following specialprovisions shall be applicable to the Option granted to such individual: (i) the purchase price per Share subject to such Option shall not be less than 110%of the Fair Market Value of one Share at the time of grant, provided however that thisrequirement will not apply with respect to any Option granted under the Plan that issubject to Section 2.14(c);  (ii) for the purpose of this Section 2.14 only, the exercise period shall not exceedfive years from the date of grant, provided however that this requirement will notapply with respect to any Option granted under the Plan that is subject to Section2.14(c);  (iii) notwithstanding Section 2.14(f)(i), in respect of California citizens orresidents, the purchase price per Share subject to such Option shall in no event beless than 110% of the Fair Market Value of one Share at the time of grant;(g) no Option may be granted hereunder to a U.S. Optionee following the expiry of 10 years afterthe date on which this Plan is adopted by the Board or the date this Plan is approved by theshareholders of the Company, whichever is earlier; and(h) no Option granted to a U.S. Optionee under this Plan shall become exercisable unless anduntil this Plan shall have been approved by the shareholders of the Company.
 

 
- 8 -**PART 3 — SHARE BONUS PLAN****3.1 Participants**The Board on the recommendation of the Committee, shall have the right, subject to Section 3.2, toissue or reserve for issuance, for no cash consideration, to any Eligible Employee or EligibleDirector any number of Shares as a discretionary bonus subject to such provisos and restrictions asthe Board may determine.**3.2 Number of Shares**The aggregate maximum number of shares that may be issued pursuant to Section 3.1 will be limitedto 2,400,000 Shares. Shares reserved for issuance and issued under the Share Bonus Plan shall besubject to the limitations set out in Section 5.1.The Board, on the recommendation of the Committee, in its absolute discretion, shall have the rightto reallocate any of the Shares reserved for issuance under the Share Bonus Plan for futureissuance under the Share Option Plan or the Share Purchase Plan and, in the event that any Sharesspecifically reserved under the Share Bonus Plan are reallocated to the Share Option Plan or theShare Purchase Plan, as the case may be, the aggregate maximum number of Shares reserved under theShare Bonus Plan will be reduced to that extent. In no event will the number of Shares allocatedfor issuance under the Share Bonus Plan exceed 2,400,000 Shares.**3.3 Necessary Approvals**The obligation of the Company to issue and deliver any Shares pursuant to an award made under theShare Bonus Plan will be subject to all necessary approvals of any securities regulatory authorityhaving jurisdiction over the Shares.**PART 4 — SHARE PURCHASE PLAN****4.1 Participants**Participants in the Share Purchase Plan will be Eligible Employees who have been continuouslyemployed by the Company or any of its Affiliates on a full-time basis for at least 12 consecutivemonths and who have been designated by the Board, on the recommendation of the Committee, asparticipants in the Share Purchase Plan (“Share Purchase Plan Participants”). The Board, on therecommendation of the Committee, shall have the right, in its absolute discretion, to waive such12-month period or to refuse any Eligible Employee or group of Eligible Employees the right ofparticipation or continued participation in the Share Purchase Plan.**4.2 Election to Participate in the Share Purchase Plan and Participant’s Contribution**Any Share Purchase Plan Participant may elect to contribute money (the “Participant’sContribution”) to the Share Purchase Plan in any calendar year if the Share Purchase PlanParticipant delivers to the Company a written direction in form and substance satisfactory to theCompany authorizing the Company to deduct from the Share Purchase Plan Participant’s salary, inequal instalments, the Participant’s Contribution. Such direction will remain effective untilrevoked in writing by the Share Purchase Plan Participant or until the Board terminates or suspendsthe Share Purchase Plan, whichever is earlier.
 

 
- 9 -The Share Purchase Plan Participant’s Contribution as determined by the Board, on therecommendation of the Committee, shall not exceed 10% of the Share Purchase Plan Participant’sbasic annual salary from the Company and its Affiliates at the time of delivery of the direction,before deductions, exclusive of any overtime pay, bonuses or allowances of any kind whatsoever (the“Basic Annual Salary”). In the case of a Share Purchase Plan Participant for whom the Board, onthe recommendation of the Committee, has waived the 12-month employment requirement, the SharePurchase Plan Participant’s Contribution shall not exceed 10% of his Basic Annual Salary from theCompany and its Affiliates at the time of delivery of the direction, prorated over the remainder ofthe calendar year, before deductions and exclusive of any overtime pay, bonuses or allowances ofany kind whatsoever.**4.3 Company’s Contribution**Immediately prior to the date any Shares are issued to a Share Purchase Plan Participant inaccordance with Section 4.4, the Company will credit the Share Purchase Plan Participant with, andthereafter hold in trust for the Share Purchase Plan Participant, an amount (the “Company’sContribution”) equal to the Participant’s Contribution then held in trust by the Company.**4.4 Issue of Shares**On March 31, June 30, September 30 and December 31 in each calendar year the Company will issue toeach Share Purchase Plan Participant fully paid and non-assessable Shares, disregarding fractions,which is equal to the aggregate amount of the Participant’s Contribution and the Company’sContribution divided by the Issue Price. For the purposes of this Section 4.4, “Issue Price” meansthe weighted average price of the Shares on the Stock Exchange, for the 90-day period immediatelypreceding the date of issuance. If the Shares are not traded on a Stock Exchange on the date ofissuance, the Issue Price shall be such price per Share as the Board, acting in good faith, maydetermine.The Company shall hold any unused balance of the Participant’s Contribution for a Share PurchasePlan Participant until used in accordance with the Share Purchase Plan.**4.5 Delivery of Shares**As soon as reasonably practicable following each issuance of Shares to a Share Purchase PlanParticipant pursuant to Section 4.4, the Company will cause to be delivered to the Share PurchasePlan Participant a certificate in respect of such Shares provided that, if required by applicablelaw or the rules and policies of the Stock Exchange, a restrictive legend shall be inscribed on thecertificate, which legend shall state that the Shares shall not be transferable for such period asmay be prescribed by law or by any regulatory authority or Stock Exchange.**4.6 Effect of Termination of Employment or Death**If a Participant ceases to be employed by the Company or any of its Affiliates for any reason orreceives notice from the Company of the termination of his or her employment, the Share PurchasePlan Participant’s participation in the Share Purchase Plan will be deemed to be terminated and anyportion of the Participant’s Contribution then held in trust shall be paid to the Share PurchasePlan Participant or his estate or successor as the case may be.
 

 
- 10 -**4.7 Effect of Amalgamation or Merger**If the Company amalgamates or merges with or into another corporation, each Share Purchase PlanParticipant to whom Shares are to be issued will receive, on the date on which any Shares wouldotherwise have been delivered to the Share Purchase Plan Participant in accordance with Section4.5, the securities, property or cash to which the Share Purchase Plan Participant would have beenentitled on such amalgamation, consolidation or merger had the Shares been issued immediately priorto the record date of such amalgamation or merger.**PART 5 — GENERAL****5.1 Number of Shares**The aggregate number of Shares that may be reserved for issuance under the Plan shall not exceed24,000,000 Shares inclusive of those Shares reserved under the Share Bonus Plan pursuant to Section3.2. In addition, the aggregate number of Shares:(a) that may be reserved for issuance to Insiders for options granted under the Plan (or whencombined with all of the Company’s other security based compensation arrangements) shall not exceed10% of the Company’s outstanding issue from time to time; (b) that may be issued to Insiders for options granted under the Plan (or when combined with all ofthe Company’s other security based compensation arrangements) within any one-year period shall notexceed 10% of the Company’s outstanding issue from time to time; and (c) that may be issued to any one Insider and his or her Associates for options granted under thePlan within any one-year period shall not exceed 5% of the Company’s outstanding issue from time totime.In no event will the number of Shares at any time reserved for issuance to any Participant exceed5% of the Company’s outstanding issue from time to time.For the purposes of this Section 5.1, “outstanding issue” means the total number of Shares, on anon-diluted basis, that are issued and outstanding as of the date that any Shares are issued orreserved for issuance pursuant to an award under the Plan to an Insider or such Insider’sAssociates, excluding any Shares issued under the Plan during the immediately preceding 12 monthperiod.**5.2 Transferability**Any benefits, rights and options accruing to any Participant in accordance with the terms andconditions of the Plan shall not be transferable unless specifically provided herein. Except asotherwise provided in Section 2.13, during the lifetime of a Participant, all benefits, rights andoptions may only be exercised by the Participant.**5.3 Employment**Nothing contained in any Plan shall confer upon any Participant any right with respect toemployment or continuance of employment with the Company or any Affiliate, or interfere in any
 

 
- 11 -way with the right of the Company or any Affiliate to terminate the Participant’s employment at anytime. Participation in any Plan by a Participant is voluntary.**5.4 Record Keeping**The Company shall maintain a register in which shall be recorded:(a) the name and address of each Participant; (b) the Plan or Plans in which the Participant participates; (c) any Participant’s Contributions; (d) the number of unissued Shares reserved for issuance pursuant to an Option or pursuant to anaward made under the Share Bonus Plan in favour of a Participant; and (e) such other information as the Board may determine.**5.5 Necessary Approvals**The Plan shall be effective only upon formal adoption by the Board following the approval of theshareholders of the Company. Any Option exercised before shareholder approval is obtained shall berescinded if shareholder approval is not obtained within 12 months before or after the Plan isadopted. Such shares shall not be counted in determining whether such approval is obtained.The obligation of the Company to sell and deliver Shares in accordance with the Plan is subject tothe approval of any Stock Exchange or governmental authority having jurisdiction in respect of theShares which may be required in connection with the authorization, issuance or sale of such Sharesby the Company. If any Shares cannot be issued to any Participant for any reason including,without limitation, the failure to obtain such approval, the obligation of the Company to issuesuch Share shall terminate and any Participant’s Contribution or option price paid to the Companyshall be returned to the Participant.**5.6 Income Taxes**As a condition of, and prior to participation in, the Plan, a Participant shall, at the Company’srequest, authorize the Company in writing to withhold from any remuneration or considerationwhatsoever payable to such Participant hereunder, any amounts required by any taxing authority tobe withheld for taxes of any kind as a consequence of such participation in the Plan.**5.7 Amendments to Plan**The Board shall have the power to, at any time and from time to time, either prospectively orretrospectively, amend, suspend or terminate the Plan or any Option or other award granted underthe Plan without shareholder approval, including, without limiting the generality of the foregoing:changes of a clerical or grammatical nature, changes regarding the persons eligible to participatein the Plan, changes to the exercise price, vesting, term and termination provisions of Options,changes to the share appreciation right provisions, changes to the share bonus plan provisions(other than the maximum number of Shares issuable under the Bonus Plan in
 

 
- 12 -Section 3.2 of the Plan), changes to the authority and role of the Compensation Committee under thePlan, changes to the acceleration and vesting of Options in the event of a takeover bid, and anyother matter relating to the Plan and the Options and awards granted thereunder, provided howeverthat:(a) such amendment, suspension or termination is in accordance with applicable laws and the rulesof any stock exchange on which the Shares are listed;(b) no amendment to the Plan or to an Option granted hereunder will have the effect of impairing,derogating from or otherwise adversely affecting the terms of an Option which is outstandingat the time of such amendment without the written consent of the holder of such Option;(c) the expiry date of an Option Period in respect of an Option shall not be more than ten yearsfrom the date of grant of an Option except as expressly provided in Section 2.5; (d) the Directors shall obtain shareholder approval of: (i) any amendment to the aggregate maximum number of Shares specified in subsection3.2 (Share Bonus Plan);  (ii) any amendment to the aggregate number of Shares specified in subsection 5.1(being the aggregate number of Shares that may be reserved for issuance under the Plan)other than pursuant to section 2.11;  (iii) any amendment to the limitation on Shares that may be reserved for issuance,or issued, to Insiders under subsection 5.1(a) and (c); or  (iv) any amendment that would reduce the exercise price of an outstanding Option ofan Insider other than pursuant to section 2.11;  (v) any amendment that would extend the expiry date of the Option Period in respectof any Option granted under the Plan to an Insider except as expressly contemplated insubsection 2.5; and  (vi) any amendment to the amending provision set out in subsection 5.7 (Amendmentsto Plan).If the Plan is terminated, the provisions of the Plan and any administrative guidelines and otherrules and regulations adopted by the Board and in force on the date of termination will continue ineffect as long as any Option or any rights pursuant thereto remain outstanding and, notwithstandingthe termination of the Plan, the Board shall remain able to make such amendments to the Plan or theOptions as they would have been entitled to make if the Plan were still in effect.**5.8 Foreign Private Issuer Status**If, and for so long as, the Company is not a Foreign Private Issuer or if the directors andofficers of the Company otherwise become subject to Section 16 of the Exchange Act, thennotwithstanding any provision of the Plan to the contrary:
 

 
- 13 -(a) the Plan shall be administered by a committee consisting of two or more persons (the“Committee”) appointed by the Board, each of whom is a director qualifying as a“disinterested” person, as such term is defined, from time to time, in Rule 16b-3 under theExchange Act;(b) the Committee shall determine and designate, from time to time, the individuals to whomawards shall be made hereunder, the amount of the awards and the other terms and conditions ofsuch awards;(c) each member of the Committee shall, upon his appointment or election to the Committee for thefirst time, automatically be granted an immediately exercisable Option to purchase 10,000Shares at a price per share equal to the Fair Market Value at the date of grant for an OptionPeriod of ten years but shall not otherwise be eligible to participate in the Plan;(d) no Option granted to a director or officer under the Plan may be exercised during the firstsix months following the date of grant;(e) directors and officers of the Company will be required to hold Shares acquired under theShare Purchase Plan for a period of six months, provided that no such hold period will berequired in respect of any such director or officer who makes an irrevocable election to waivehis right to withdraw from the Share Purchase Plan or to change his Participant’s Contributionat least six months prior to his acquisition of such Shares;(f) Subsections 5.8(c), (d) and (e) may only be amended or modified by the Board or theshareholders of the Company once in any six month period; and(g) the Board may, subject to Subsection 5.8(f) and Section 5.7, amend or modify the Plan to theextent that the Board, based upon the advice of legal counsel, considers necessary ordesirable to bring the Plan into compliance with Rule 16b-3 under the Exchange Act.**5.9 No Representation or Warranty**The Company makes no representation or warranty as to the future market value of any Shares issuedin accordance with the provisions of the Plan.**5.10 Audited Financial Statements**The Company shall provide annual financial statements of the Company to each Participant holding anoutstanding award under the Plan. Such financial statements need not be audited and need not beissued to key employees whose duties at the Company assure them access to equivalent information.
 

 
- 14 -**5.11 Compliance with Applicable Law, etc**If any provision of the Plan or any agreement entered into pursuant to the Plan contravenes any lawor any order, policy, by-law or regulation of any regulatory body or Stock Exchange havingauthority over the Company or the Plan then such provision shall be deemed to be amended to theextent required to bring such provision into compliance therewith.**PART 6 — ADMINISTRATION OF THE PLAN****6.1 Administration by the Committee**(a) Unless otherwise determined by the Board, the Plan shall be administered by the CompensationCommittee (the “Committee”) appointed by the Board and constituted in accordance with suchCommittee’s charter. The members of the Committee serve at the pleasure of the Board andvacancies occurring in the Committee shall be filled by the Board.(b) The Committee shall have the power, where consistent with the general purpose and intent ofthe Plan and subject to the specific provisions of the Plan, to: (i) adopt and amend rules and regulations relating to the administration of thePlan and make all other determinations necessary or desirable for the administration ofthe Plan. The interpretation and construction of the provisions of the Plan andrelated agreements by the Committee shall be final and conclusive. The Committee maycorrect any defect or supply any omission or reconcile any inconsistency in the Plan orin any related agreement in the manner and to the extent it shall deem expedient tocarry the Plan into effect and it shall be the sole and final judge of such expediency;and  (ii) otherwise exercise the powers delegated to the Committee by the Board and underthe Plan as set forth herein.**6.2 Board Role**(a) The Board, on the recommendation of the Committee, shall determine and designate from time totime the individuals to whom awards shall be made, the amounts of the awards and the otherterms and conditions of the awards.(b) The Board may delegate any of its responsibilities or powers under the Plan to the Committee,provided that the grant of all Shares, Options or other awards under the Plan shall be subjectto the approval of the Board. No Option shall be exercisable in whole or in part unless anduntil such approval is obtained.(c) In the event the Committee is unable or unwilling to act in respect of a matter involving thePlan, the Board shall fulfill the role of the Committee provided for herein.