Document:

Exhibit
10.2

KANBAY INTERNATIONAL, INC.

SEVERANCE AGREEMENT

THIS SEVERANCE AGREEMENT (this “Agreement”) is made
and entered into by and among Kanbay International, Inc., a Delaware
corporation (the “Company”), Kanbay Incorporated, an Illinois corporation (“Kanbay”)
and Roy K. Stansbury (“Executive”) as of August 7, 2006 (the “Effective Date”).

WHEREAS, it is in the best interests of Kanbay, the
Company, and the Company’s stockholders to assure Executive’s continued
dedication to Kanbay and the Company; and

WHEREAS, any consideration by Kanbay and the Company
of strategic transactions such as mergers and acquisitions would inevitably
create personal uncertainties for Executive, and therefore distract Executive
from the business of Kanbay and the Company; and

WHEREAS, it is in the best interests of Kanbay, the
Company and the Company’s stockholders to retain Executive’s dedication and
reduce distractions by providing Executive with compensation arrangements in
the event of certain terminations of Executive’s employment, including
terminations in connection with a strategic transaction, as more fully provided
herein.

NOW, THEREFORE, in consideration of and reliance upon
the foregoing background statement and the covenants contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Kanbay, the Company and Executive
agree as follows:

1.                                      DEFINITIONS

1.1           “Affiliate” shall
mean any corporation or other business entity that is a parent or subsidiary of
the Company, including ownership of 50% or more of the voting or profits
interests of the corporation or other business entity.

1.2           “Base Salary” shall
mean the annual Base Salary payable to Executive so long as the Company or an
Affiliate employs Executive.

1.3           “Board” shall mean
the Board of Directors of the Company.

1.4           “Cause” shall mean
any of the following: (i) Executive’s commission of a willful act (including,
without limitation, a dishonest or fraudulent act) or a grossly negligent act,
or the willful or grossly negligent omission to act by Executive, which is
intended to cause, causes or is reasonably likely to cause material harm to the
Company or an Affiliate, monetarily, reputationally or otherwise; (ii)
Executive’s commission or conviction of, or plea of nolo contendere to, any felony or any crime or offense
involving dishonesty or fraud or that is significantly injurious to the Company
or an Affiliate, monetarily, reputationally or otherwise; (iii) Executive’s
willful neglect of or continued failure to substantially perform, in any
material respect, his duties (as assigned to Executive from time to time) or
obligations (including a violation of policy) to the Company or an Affiliate
other than any such failure resulting from his incapacity due to physical or
mental illness; or (iv) Executive’s abuse of illegal drugs or other controlled
substances or habitual intoxication.  For
purposes of this Section, an act or omission is “willful” if it was knowingly
done, or knowingly

 

omitted to be
done, by Executive not in good faith and without reasonable belief that the act
or omission was in the best interest of the Company.  Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or based
upon the advice of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, in good faith and in the best interests of the
Company.  The Company has the discretion,
in other circumstances, to determine in good faith, from all the facts and
circumstances reasonably available to it, whether Executive who is under
investigation for, or has been charged with, a crime will be deemed to have
committed it for purposes of this Agreement.

1.5           “Change
in Control” shall mean the occurrence of any one or more of the
following:

(a)           Any “person” (as such term is defined
in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act),
including a “group” (as defined in Section 13(d)(3) of the Exchange Act), other
than (i) the Company, (ii) any wholly-owned subsidiary of the Company, or (iii)
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Affiliate, becomes a “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company having fifty percent (50%) or more of the combined voting power of the
then-outstanding securities of the Company that may be cast for the election of
directors of the Company (other than as a result of an issuance of securities
initiated by the Company in the ordinary course of business) (the “Company
Voting Securities”); provided,
however, that the event described in this Section 1.5(a) shall not be deemed to
be a Change in Control by virtue of any underwriter temporarily holding
securities pursuant to an offering of such securities;

(b)           During any period of two consecutive
years, individuals who at the beginning of any such period constitute the Board
(the “Incumbent Directors”) cease for any reason to constitute at least a
majority of the Board, unless the election, or the nomination for election by
the stockholders of the Company, of each new director of the Company during
such period was approved by a vote of at least two-thirds of the Incumbent
Directors then still in office;

(c)           As the result of, or in connection
with, any cash tender or exchange offer, merger or other business combination,
sale of all or substantially all of the assets or contested election, or any
combination of the foregoing transactions, less than a majority of the combined
voting power of the then-outstanding securities of the Company or any successor
corporation or entity entitled to vote generally in the election of the
directors of the Company or such other corporation or entity after such
transaction is held in the aggregate by the holders of the securities of the
Company entitled to vote generally in the election of directors of the Company
immediately prior to such transaction; or

(d)           The stockholders of the Company
approve a plan of complete liquidation of the Company.

Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because
any person acquires beneficial ownership of more than fifty percent (50%) of
the Company Voting Securities as a result of the acquisition of Company Voting
Securities by the Company that reduces the number of Company Voting Securities
outstanding; provided, however, that if after

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such acquisition
by the Company such person becomes the beneficial owner of additional Company
Voting Securities that increases the percentage of outstanding Company Voting
Securities beneficially owned by such person, a Change in Control transaction
shall then occur.

Further
notwithstanding the
foregoing, unless a majority of the Incumbent Directors determines otherwise,
no Change in Control shall be deemed to have occurred with respect to a
particular Executive if the Change in Control results from actions or events in
which such Executive is a participant in a capacity other than solely as an
officer, employee or director of the Company or an Affiliate.

1.6           “Good
Reason” shall mean any one of the following events, without Executive’s written
consent: (i) the assignment to Executive of duties materially inconsistent with
Executive’s then-current level of authority or responsibilities, or any other
action by the Company or an Affiliate that results in a material diminution in
Executive’s position, compensation, authority, duties or responsibilities; (ii)
a breach by the Company or an Affiliate of any material term or covenant of any
agreement with Executive; (iii) a requirement that Executive be based at any
office or location that is
more than thirty-five (35) miles from the Executive’s principal office location
immediately preceding a Change in Control; or (iv) a failure by any
successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the Company
or the Affiliate employing Executive to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company or an
Affiliate would be required to perform it if no such succession had taken
place.  Executive must provide the Company written notice of any claim of Good
Reason within ninety (90) days after the occurrence of any action/inaction
giving rise to such claim, and the Company or its Affiliate will have thirty
(30) days to cure such claim.

2.                                      TERMINATIONS
OF EMPLOYMENT TRIGGERING SEVERANCE BENEFITS

2.1           Subject
to Section 2.2, and provided that Executive has executed a full and complete
release of the Company and its Affiliates (and their related parties) from any
and all claims, in a form prepared by the Company, the Company or an Affiliate
will provide Executive with the benefits set forth in Section 3 if Executive’s
employment is terminated for the following reasons (“Qualifying Terminations”):
(i) by the Company or an Affiliate without Cause at any time; or (ii) by
Executive for Good Reason within eighteen (18) months after the effective date
of a Change in Control.

2.2           In
no event will benefits be payable to Executive under this Agreement in the
event of termination due to Executive’s death, disability, retirement,
termination by the Company or an Affiliate for Cause, or voluntary termination
by Executive without Good Reason.

2.3           Notwithstanding
the foregoing, the following payments will be made upon Executive’s termination
of employment for any reason or no reason: 
(i) earned but unpaid Base Salary through the date of termination; (ii)
any accrued but unpaid vacation; (iii) any amounts payable under any employee
pension or welfare benefit plans of the Company or an Affiliate in accordance
with the terms of those plans; and (iv) unreimbursed business expenses incurred
by Executive on behalf of the Company or an Affiliate (in accordance with
existing expense reimbursement policies of the Company or an Affiliate).

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3.                                      TERMINATION
BENEFITS

3.1           Subject
to the conditions set forth in Section 2, and so long as Executive has not
violated and does not violate any of the terms of this Agreement, the following
benefits shall be paid or provided to Executive in the event Executive’s
employment is terminated in a Qualifying Termination:

(a)           Salary Continuation.  The Company or an Affiliate will pay
Executive severance pay consisting of bi-weekly pay checks in an amount based
on Executive’s Base Salary on the date of termination (less applicable
deductions for federal and state taxes and FICA) for a period of six (6) months
following the date of termination.  The severance
pay will be paid on regularly scheduled pay dates.  Notwithstanding the foregoing, no payments
under this Section 3.1(a) shall commence prior to the effective date of the
release of claims being provided to the Company and its Affiliates by Executive
under Section 2.1 (including the expiration of any revocation period required
by law in connection with such release).

(b)           Incentive Plan Vesting.  All awards under the Kanbay International,
Inc. Stock Incentive Plan, or any similar or successor plan, held by Executive
shall immediately become exercisable in full, all restrictions applicable to
such awards shall lapse, and all performance measures with respect to such
awards shall be deemed satisfied in full.  Executive will
have a period of time following the date of termination, as stated in Kanbay
International, Inc. Stock Incentive Plan or the applicable Award Agreement
issued thereunder,
during which Executive may exercise his awards, if any.  Except as specifically stated in this Section
3.1(b), this
Agreement shall not be construed to amend, modify or supersede any of the
provisions of the Kanbay International, Inc. Stock Incentive Plan, or
any similar or successor plan, or any applicable Award Agreement issued
thereunder.

(c)           Health Benefits.  To the extent permissible under applicable
law, the Company or an Affiliate shall continue to provide coverage to
Executive (and to Executive’s spouse and dependents who are covered as of date
of the Qualifying Termination) under the health and welfare benefit plans the
Company or an Affiliate maintains for active employees following Executive’s
Qualifying Termination, at the same cost to Executive and under the same terms
applicable to active employees (and their dependents), for a period of eighteen
(18) months after Executive’s Qualifying Termination.  Notwithstanding the foregoing, if Executive
becomes employed with another employer during such eighteen (18) month period
and is eligible to receive substantially comparable health and welfare benefits
from such employer, the obligation of the Company and its Affiliates to provide
the benefits described in this Section 3.1(c) shall cease.

3.2           Taxation and
Withholding.  Neither the Company nor
any Affiliate makes any representations or warranties with respect to, and has
no responsibility or liability for, the personal tax consequences of this
Agreement to Executive.  The Company and
its Affiliates may make such provisions and take such steps as they may deem
necessary or appropriate for the withholding of any taxes that the Company or
any Affiliate is required by any law or regulation of any governmental
authority, whether federal, state or local, domestic or foreign, to withhold in
connection with this Agreement.

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3.3           Executive’s Death.  If Executive dies before the completion of
any payments or benefits required under this Section 3, the Company or an
Affiliate will make or continue payments and benefits to Executive’s surviving
spouse, if any, or Executive’s estate in accordance with this Section.

4.                                      RESTRICTIVE
COVENANTS

4.1           Trade Secrets.  Executive acknowledges that he has had and/or
will have access to confidential information of the Company and its Affiliates
(including, but not limited to, current and prospective confidential know-how,
specialized training, customer lists, marketing plans, business plans,
financial and pricing information, and information regarding acquisitions,
mergers and/or joint ventures) concerning the business, customers, clients,
contacts, prospects, and assets of the Company and its Affiliates that is
unique, valuable and not generally known outside the Company and its
Affiliates, and that was obtained from the Company or an Affiliate or which was
learned as a result of the performance of services by Executive on behalf of
the Company or an Affiliate (“Trade Secrets”). 
Trade Secrets shall not include any information that: (i) is now, or
hereafter becomes, through no act or failure to act on the part of Executive
that constitutes a breach of this Section 4, generally known or available to
the public; (ii) is known to Executive at the time such information was
obtained from the Company or an Affiliate; (iii) is hereafter furnished without
restriction on disclosure to Executive by a third party, other than an employee
or agent of the Company or an Affiliate, who is not under any obligation of
confidentiality to the Company or an Affiliate; (iv) is disclosed with the
written approval of the Company or an Affiliate; or (v) is required to be
disclosed or provided by law, court order, or similar compulsion, including
pursuant to or in connection with any legal proceeding involving the parties
hereto; provided however, that such disclosure shall be limited to the extent
so required or compelled; and provided further, however, that if Executive is
required to disclose such confidential information, he shall give the Company
notice of such disclosure and cooperate in seeking suitable protections.  Other than in the course of performing
services for the Company and its Affiliates, Executive will not, at any time,
directly or indirectly use, divulge, furnish or make accessible to any person
any Trade Secrets, but instead will keep all Trade Secrets strictly and
absolutely confidential.  Executive will
deliver promptly to the Company or the Affiliate that employed Executive, at
the termination of his employment or at any other time at the request of the
Company or an Affiliate, without retaining any copies, all documents and other
materials in his possession relating, directly or indirectly, to any Trade
Secrets.

4.2           Non-competition.  Beginning on the Effective Date and for a
period continuing through the later of (i) six (6) months following termination
of Executive’s employment with the Company and all Affiliates and (ii) the
period the Company or an Affiliate is making severance payments to Executive
under Section 3.1(a) (the “Restricted Period”), Executive shall not directly or
indirectly own any interest in, operate, control or participate as a partner,
director, principal, officer, or agent of, enter into the employment of, act as
a consultant to, or perform any services for, any company, person, or entity
engaged in a “Competitive Business” (as defined herein).  A Competitive Business shall include any
company, person or entity that is involved in or seeks to become involved in
providing information technology services and solutions to the financial
services industry, including business process and technology advice, software
package selection and integration, application development, maintenance and
support, network and system security and specialized services, in any country
in which the Company or an Affiliate is doing business at the time of termination
of Executive’s employment.

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4.3.          Employee Agreements.  As a condition of this Agreement and as a
condition of Executive’s employment with the Company or an Affiliate, Executive
is required to sign a separate Employee Non-Disclosure, Development and Non-Solicitation Agreement
and/or other similar agreement(s) (collectively, “Employee Agreements”).  Executive hereby reaffirms his commitment to
abide by all obligations set forth in all such Employee Agreements.  Executive further agrees that any breach by
Executive of any Employee Agreement shall be considered a breach by Executive
of this Agreement.  This Agreement shall
not be construed to amend, modify or terminate any of Executive’s obligations
under any Employee Agreement to the extent this Agreement and the Employee
Agreement are not inconsistent.  However,
in the event of any direct conflict between the terms of any Employee Agreement
and the terms of this Agreement, the terms of this Agreement shall govern and
supersede any Employee Agreement.

4.4           Irreparable
Harm.  Executive acknowledges that:
(i) Executive’s compliance with this Agreement is necessary to preserve and
protect the proprietary rights, Trade Secrets, and the goodwill of the Company
or an Affiliate as going concerns, and (ii) any failure by Executive to comply
with the provisions of this Agreement will result in irreparable and continuing
injury for which there will be no adequate remedy at law.  In the event that Executive fails to comply
with the terms and conditions of this Agreement, the obligations of the Company
and its Affiliates to pay the severance benefits set forth in Section 3 shall
cease, and the Company or an Affiliate will be entitled, in addition to other
relief that may be proper, to all types of equitable relief (including, but not
limited to, the issuance of an injunction and/or temporary restraining order)
that may be necessary to cause Executive to comply with this Agreement, to
restore to the Company and its Affiliates their property, and to make the
Company and its Affiliates whole.

4.5           Survival.  The provisions set forth in this Section 4
shall survive termination of this Agreement.

4.6           Scope
Limitations.  If the scope, period of
time or area of restriction specified in this Section 4 are or would be judged
to be unreasonable in any court proceeding, then the period of time, scope or
area of restriction will be reduced or limited in the manner and to the extent
necessary to make the restriction reasonable, so that the restriction may be
enforced in those areas, during the period of time and in the scope that are or
would be judged to be reasonable.

5.             MISCELLANEOUS

5.1           Employment Status.  Nothing herein shall be deemed to create any
term of employment, it being expressly understood and agreed between the
parties that Executive’s employment is at will and that either party may
terminate such employment at any time.

5.2           Governing Law.  All provisions of this Agreement will be
construed and governed by Illinois law without regard to its choice of law
principles or the laws of any other jurisdiction.  Any suit, claim or other legal proceeding
arising out of or relating to Executive’s employment, his termination from
employment, or this Agreement shall be brought exclusively in the federal or
state courts located in Cook County, Illinois, and Executive and the Company
and its Affiliates hereby submit to personal jurisdiction in the State of
Illinois and to venue in such courts. 
Notwithstanding the foregoing, the Company or an Affiliate may seek and
obtain injunctive relief against Executive in any court having jurisdiction
over Executive.

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5.3           Severability.  Every provision of this Agreement is intended
to be severable. If any provision or portion of a provision is illegal or
invalid, then the remainder of this Agreement shall not be affected. Moreover,
any provision of this Agreement which is determined to be unreasonable,
arbitrary or against public policy shall be modified as necessary so that it is
not unreasonable, arbitrary or against public policy while maximizing the intent
of the parties.

5.4           Entire Agreement.  Except as provided in any non-disclosure,
non-solicitation, intellectual property or similar agreement signed by
Executive, with respect to its subject matter, this Agreement constitutes the
entire understanding of the parties superseding all prior agreements,
understandings, negotiations and discussions between them, whether written or
oral, and there are no other understandings, representations, warranties or
commitments with respect thereto. 
Notwithstanding any terms contained herein to the contrary, the Company
or its Affiliates, in addition to any rights set forth herein, shall have the
right to seek enforcement of any other penalties or restrictions that may apply
under any other non-disclosure, non-solicitation, intellectual property or
similar agreement between Executive and the Company or its Affiliates.

5.5           Successors and
Assigns.  This Agreement may not be
assigned by Executive.  This Agreement
shall be binding upon and inure to the benefit of all successors and assigns
(whether by operation of law or otherwise) of the Company and its Affiliates.

5.6           Amendment.
This Agreement may only be amended or terminated by mutual written agreement
between the Company and Executive.

5.7.          No Waiver.  No failure or delay by the Company or an
Affiliate or Executive in enforcing or exercising any right or remedy hereunder
shall operate as a waiver thereof.  No
modification, amendment or waiver of this Agreement nor consent to any departure
by Executive from any of the terms or conditions thereof, shall be effective
unless in writing and signed by the Chairman of the Board.  Any such waiver or consent shall be effective
only in the specific instance and for the purpose for which given.

5.8.          Counterparts.  The parties may execute this Agreement in one
or more counterparts, all of which together shall constitute but one Agreement.

IN WITNESS WHEREOF, each party has executed this
Severance Agreement or caused this Severance Agreement to be duly executed as
of the Effective Date.

IN WITNESS WHEREOF, each
party has executed this Severance Agreement or caused this Severance Agreement
to be duly executed as of the Effective Date.

	
  KANBAY INTERNATIONAL, INC.

  	
  ROY K. STANSBURY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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  KANBAY INCORPORATED

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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 7Exhibit
10.1

STORM
CAT ENERGY CORPORATION

(the “Company”)

AMENDED
& RESTATED SHARE OPTION PLAN

Dated
for Reference June 27, 2006

ARTICLE
1

PURPOSE AND INTERPRETATION

Purpose

1.1           The purpose of this Plan will be to
advance the interests of the Company by encouraging equity participation in the
Company through the acquisition of Common Shares of the Company.  It is the intention of the Company that this
Plan will at all times be in compliance with the rules and policies, as may be
amended from time to time, (the “Exchange Policies”)
of the TSX Venture Exchange (the “TSX Venture”) or
the Toronto Stock Exchange (the “TSX”), depending
upon the stock exchange on which the Common Shares are, at the relevant time,
listed for trading, and any inconsistencies between this Plan and the Exchange Policies
whether due to inadvertence or changes in the Exchange Policies will be
resolved in favour of the latter.

Definitions

1.2           In this Plan:

Affiliate
means a company that is a parent or subsidiary of the Company, or that is controlled
by the same entity as the Company;

Associate
has the meaning assigned by the Securities Act;

Board
means the board of directors of the Company or any committee thereof duly
empowered or authorized to grant options under this Plan;

Change
of Control includes situations where after giving effect to
the contemplated transaction and as a result of such transaction:

(i)            any one Person holds a sufficient
number of voting shares of the Company or resulting company to affect
materially the control of the Company or resulting company, or,

(ii)           any combination of Persons, acting in
concert by virtue of an agreement, arrangement, commitment or understanding,
hold in total a sufficient number of voting shares of the Company or its
successor to affect materially the control of the Company or its successor,

 

 

where such Person or
combination of Persons did not previously hold a sufficient number of voting
shares to affect materially control of the Company or its successor.  In the absence of evidence to the contrary,
any Person or combination of Persons acting in concert by virtue of an
agreement, arrangement, commitment or understanding, holding more than 20% of
the voting shares of the Company or its successor is deemed to materially
affect the control of the Company or its successor;

Common
Shares means common shares without par value in the capital
of the Company providing such class is listed on the TSX Venture or the TSX;

Company
means the Corporation named at the top hereof and includes, unless the context otherwise
requires, all of its subsidiaries or affiliates and successors according to
law;

Consultant
means a Person or Consultant Company, other than an Employee, Officer or
Director that:

(i)            provides on an ongoing bona fide
basis, consulting, technical, managerial or like services to the Company or an
Affiliate of the Company, other than services provided in relation to a
Distribution;

(ii)           provides the services under a written
contract between the Company or an Affiliate and the Person or the Consultant
Company;

(iii)          in the reasonable opinion of the
Company, spends or will spend a significant amount of time and attention on the
business and affairs of the Company or an Affiliate of the Company; and

(iv)          has a relationship with the Company or
an Affiliate that enables the Person or Consultant Company to be knowledgeable
about the business and affairs of the Company;

Consultant
Company means for a Person consultant, a company or
partnership of which the Person is an employee, shareholder or partner;

Directors
means the directors of the Company as may be elected from time to time;

Discounted
Market Price has the meaning assigned by Policy 1.1 of the
TSX Venture;

Disinterested
Shareholder Approval means approval by a majority of the
votes cast by all the Company’s shareholders at a duly constituted shareholders’
meeting, excluding votes attached to shares beneficially owned by Service
Providers or their Associates;

Distribution
has the meaning assigned by the Securities Act, and generally refers to a
distribution of securities by the Company from treasury;

Effective
Date for an Option means the date of grant thereof by the
Board;

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Employee
means:

(i)            a Person who is considered an
employee under the Income Tax Act (i.e. for whom income tax, employment
insurance and CPP deductions must be made at source);

(ii)           a Person who works full-time for the
Company or its subsidiary providing services normally provided by an employee
and who is subject to the same control and direction by the Company over the
details and methods of work as an employee of the Company, but for whom income
tax deductions are not made at source; or

(iii)          a Person who works for the Company or
its subsidiary on a continuing and regular basis for a minimum amount of time
per week providing services normally provided by an employee and who is subject
to the same control and direction by the Company over the details and methods
of work as an employee of the Company, but for whom income tax deductions need
not be made at source;

Exchange Policies
has the meaning given to it in paragraph 1.1 of this Plan.

Exercise
Price means the amount payable per Common Share on the
exercise of an Option, as determined in accordance with the terms hereof;

Existing Options
means the options previously granted by the Company and outstanding as at the
close of business on June 27, 2006 to purchase an aggregate of 5,076,666 Common
shares in the capital of the Company, which options are, going forward,
governed by the terms and conditions of this Plan;

Expiry
Date means the day on which an Option lapses as specified in
the Option Commitment therefor or in accordance with the terms of this Plan;

Insider
means:

(i)            an “insider” (or “Insider”) as
defined in the Exchange Policies or as defined in securities legislation
applicable to the Company; or

(ii)           an Associate of any person who is an
Insider by virtue of Section (i) above;

Investor
Relations Activities has the meaning assigned by Policy 1.1 of
the TSX Venture, and means generally any activities or communications that can
reasonably be seen to be intended to or be primarily intended to promote the
merits or awareness of or the purchase or sale of securities of the Company;

Listed
Shares means the number of issued and outstanding Common
Shares that have been accepted for listing on the TSX Venture or the TSX, but
excluding dilutive securities not yet converted into Listed Shares;

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Management
Company Employee means a Person employed by another person or
a corporation providing management services to the Company which are required
for the ongoing successful operation of the business enterprise of the Company,
but excluding a corporation or Person engaged primarily in Investor Relations
Activities;

Officer
means a duly appointed “senior officer” of the Company as defined in the Securities
Act;

Option
means the Existing Options and any right to purchase Common Shares granted
hereunder to a Service Provider;

Option
Commitment means the notice of grant of an Option delivered
by the Company hereunder to a Service Provider and substantially in the form of
Schedule A hereto or, for Existing Options, under a prior option plan of the
Company;

Optioned
Shares means Common Shares that may be issued in the future
to a Service Provider upon the exercise of an Option;

Optionee
means the recipient of an Option hereunder or a holder of Existing Options;

Outstanding
Shares means at the relevant time, the number of outstanding
Common Shares of the Company from time to time;

Participant
means a Service Provider that becomes an Optionee;

Person
means a company or an individual;

Plan
means this Share Option Plan, the terms of which are set out herein or as may
be amended;

Plan
Shares means the total number of Common Shares which may be made
subject to issuance as Optioned Shares under the Plan as provided in Section
2.2;

Regulatory
Approval means the approval of the TSX Venture or the TSX,
depending on which stock exchange the Common Shares are, at the relevant time,
listed for trading, and any other securities regulatory authority that may have
lawful jurisdiction over the Plan and any Options issued hereunder;

Sale of
the Company means:

(i)        a sale of all or substantially all of
the assets of the Company;

(ii)       a corporate transaction (whether effected
through an acquisition for cash or securities, and whether structured as a
purchase, amalgamation, merger, arrangement or otherwise) in which the Company
is not the surviving corporation (other than a purchase, amalgamation, merger
or consolidation with one or more subsidiaries of the Company, or other transaction
in which there is no material change of control in the beneficial
shareholder(s) of the Company; and

 4
 

 

 

(iii)          a corporate transaction (whether
effected through an acquisition for cash or securities, and whether structured
as a purchase, amalgamation, merger, arrangement or otherwise) in which the
Company is the surviving corporation, but after which shareholder(s) of the
Company immediately prior to such transaction (other than any shareholder which
merges, or which owns or controls another corporation which merges, with the
Company in such transaction)  hold less than 30% of the voting rights
attaching to all of the outstanding voting securities of the Company;

Securities
Act means the Securities
Act, R.S.B.C. 1996, c. 418, as amended from time to time;

Service
Provider means a Person who is a bona fide Director, Officer,
Employee, Management Company Employee or Consultant, and also includes a
company, of which 100% of the share capital is beneficially owned by one or
more Person Service Providers;

Share
Compensation Arrangement means any Option under this Plan, and
any other stock option, stock option plan, employee stock purchase plan,
restricted share unit plan, or any other compensation or incentive mechanism
involving the issuance or potential issuance of Common Shares to a Service
Provider, including, where applicable, the Existing Options;

Shareholder
Approval means approval by a majority of the votes cast by
eligible shareholders at a duly constituted shareholders’ meeting;

TSX has the meaning given to it in paragraph 1.1
of this Plan; and

TSX
Venture has the
meaning given to it in paragraph 1.1 of this Plan.

Interpretation

1.3           In this Plan: (i) where reference is
made in this Plan to “TSX Venture or the TSX”
or words to similar effect, as between the TSX Venture or the TSX, only one
stock exchange will, from time to time be the applicable stock exchange, and it
will be the stock exchange on which the Common Shares are then listed for
trading; and (ii) this Plan replaces the Company’s prior option plan, and will
govern any and all Options granted hereunder, and, subject to the express
provisions hereof, any and all Existing Options.

1.4           Unless otherwise specified, words
used in this Plan importing the singular include the plural and vice versa and
words importing gender include all genders and non-individual entities.

1.5           Except as otherwise expressly
determined otherwise by the Board, a Service Provider will be deemed to have
ceased to be employed by or provide services to the Company on the first to occur
of the date on which the Service Provider has left his employ/office with the
Company, the date on which his service contract with the Company expires, and
the termination date specified in a termination notice given by the Company to
the Service Provider.

 5
 

 

 

ARTICLE
2

SHARE OPTION PLAN

Establishment of Share Option Plan

2.1           There
is hereby established a Share Option Plan to recognize contributions made by
Service Providers and to create an incentive for their continuing assistance to
the Company and its Affiliates.  Except
to the extent that amendments to Options effected by this Plan will impair the
rights and entitlements of an Optionee under any Existing Options, the Existing
Options will be governed by and interpreted in accordance with this Plan.

Maximum
Plan Shares

2.2           The maximum number of Plan Shares
which may be made subject to issuance under Options granted under this Plan is
10,000,000 Common Shares, less:

(a)           the aggregate number of Common Shares
that are, from time to time, subject to issuance under outstanding rights that
have been issued by the Company under any other Share Compensation Arrangement,
including the Existing Options and Common Shares that are subject to issuance
under outstanding Restricted Share Units issued under the Company’s Restricted
Share Unit Plan (as may be amended from time to time); and

(b)           the net number of Common Shares that,
subsequent to the date hereof, are issued pursuant to a right granted under
this Plan or any other Share Compensation Arrangement,

subject to adjustment
under Section 3.13.

Eligibility

2.3           Subject to the Board’s powers of
delegation under this Plan, options to purchase Common Shares may be granted
hereunder to Service Providers from time to time by the Board.  Service Providers that are corporate entities
will be required to undertake in writing not to effect or permit any transfer
of ownership or option of any of its shares, nor issue more of its shares (so
as to indirectly transfer the benefits of an Option), as long as such Option
remains outstanding, unless the written permission of the TSX Venture or the
TSX, and the Company is obtained.  For
greater certainty, a change in the status of a Participant’s relationship with
the Company will not affect such Participant’s then-existing Options, provided
that the Participant has not ceased to be employed by or provide services to
the Company.

Options
Granted Under the Plan

2.4           All Options granted under the Plan
will be evidenced by an Option Commitment in the form attached as Schedule A,
showing the number of Optioned Shares, the term of the Option, a reference to
vesting terms, if any, and the Exercise Price.

 6
 

 

 

2.5           Subject to specific variations
approved by the Board, all terms and conditions set out herein will be deemed
to be incorporated into and form part of an Option Commitment made hereunder.

Limitations
on Issue

2.6           Subject to Section 2.10, if the
Common Shares are listed for trading on the TSX Venture, the following
restrictions on issuances of Options are applicable under the Plan:

(a)           no Service Provider can be granted an
Option if that Option would result in the total number of Options, together
with all other Share Compensation Arrangements granted to such Service Provider
in the previous 12 months, exceeding 5% of the Listed Shares (unless the
Company is classified as a Tier 1 Issuer by the TSX Venture and the Company has
obtained Disinterested Shareholder Approval under Section 2.10(a)(iii) to do
so);

(b)           no Options can be granted under this
Plan if the Company is designated “Inactive” by the TSX Venture;

(c)           the aggregate number of Options
granted to Service Providers conducting Investor Relations Activities in any
12-month period must not exceed 2% of the Listed Shares, calculated at the time
of grant, without the prior consent of TSX Venture; and

(d)           the aggregate number of Options
granted to any one Consultant in any 12-month period must not exceed 2% of the
Listed Shares, calculated at the time of grant, without the prior consent of TSX
Venture.

2.7           If the Common Shares are listed for
trading on the TSX, then notwithstanding anything in this Plan to the contrary:

(a)           the aggregate number of Common Shares
that may be made subject to issuance to Insiders pursuant to Options granted
under the Plan and under any other Share Compensation Arrangement must not
exceed 10% of the Listed Shares; and

(b)           the aggregate number of Common Shares
that may be issued to Insiders pursuant to Options granted under the Plan and
under any other Share Compensation Arrangement, within any one-year period,
must not exceed 10% of the Listed Shares.

Options
Not Exercised or Optioned Shares Used to Pay Exercise Price

2.8           For greater certainty:

(a)           in the event a right to acquire
Common Shares under a Share Compensation Arrangement (including an Option) expires
unexercised or is terminated by reason of dismissal of the holder of the right
for cause or is otherwise lawfully cancelled prior to such right resulting in
the issuance of Common Shares, then the Common Shares that were issuable
thereunder will be added back into the aggregate number of Common Shares that
may be, from time to 

 7
 

 

 

time, made subject to
issuance under a right granted this Plan or any other Share Compensation
Arrangement; and

(b)           if an Optionee pays the Exercise
Price (and/or any applicable withholding taxes) of an Option by surrendering
previously owned Common Shares, or arranges to have the appropriate number of
Optioned Shares otherwise issuable upon exercise of an Option withheld, then
the Common Shares that would have been issued upon exercise of the Option equal
in number to the surrendered and/or withheld Optioned Shares and Common Shares
shall not count towards the maximum number of Plan Shares that may be made
subject to issuance under this Plan or any other Share Compensation Arrangement.

Powers
of the Board

2.9           The Board will be responsible for the
general administration of the Plan and the proper execution of its provisions,
the interpretation of the Plan and the determination of all questions arising
hereunder.  Without limiting the generality
of the foregoing, the Board has the power to:

(a)           allot Common Shares for issuance in
connection with the exercise of Options;

(b)           grant Options hereunder;

(c)           subject to Regulatory Approval,
amend, suspend, terminate or discontinue the Plan, or revoke or alter any
action taken in connection therewith, except that no general amendment or
suspension of the Plan will, without the written consent of all Optionees, impair
the rights and entitlements of any Optionee pursuant to a then-outstanding
Option unless such amendment is the result of a change in the Exchange Policies
or, if applicable, the Company’s tier classification under the policies of the
TSX Venture; and

(d)           may in its sole discretion amend this
Plan (except for previously granted and outstanding Options) to reduce the
benefits that may be granted to Service Providers (before a particular Option
is granted) subject to the other terms hereof.

The Board may delegate all or such portion of its
powers under this Plan as it may determine to a duly appointed committee of the
Board or an Officer of the Company, either indefinitely or for such period of
time as it may specify, and thereafter such committee or Officer may exercise
the powers and discharge the duties of the Board in respect of the Plan so
delegated to the same extent as the Board is hereby authorised so to do.  If such a committee or Officer is appointed
for this purpose, all references herein to the Board will be deemed to be
references to such committee or Officer. 
Notwithstanding the foregoing, the Board will not be permitted to
delegate its powers hereunder to an Officer to the extent that such powers
relate to the participation in this Plan by Officers and Directors.

 8
 

 

 

Terms or Amendments Requiring (Disinterested)
Shareholder Approval

2.10         If
the Common Shares are listed for trading on the TSX Venture, then the Company
will be required to obtain Disinterested Shareholder Approval prior to any of
the following actions becoming effective:

(a)           the
Plan, together with all of the Company’s previously established and outstanding
stock option plans or grants, could result at any time in:

(i)            the aggregate
number of shares reserved for issuance under stock options granted to Insiders
exceeding 10% of the Listed Shares;

(ii)           the number of Optioned
Shares issued to Insiders within a one-year period exceeding 10% of the Listed
Shares; or,

(iii)          in the case of a
Tier 1 Issuer only the issuance to any one Optionee, within a 12-month
period, of a number of shares exceeding 5% of Listed Shares; or

(b)           any reduction in the Exercise Price
of an Option previously granted to an Insider.

2.11         If the Common Shares are listed for
trading on the TSX, then the Company will be required to obtain:

(a)           subject to Sections 2.9(c) and (d),
Shareholder Approval at the time of any amendment to the Plan; and

(b)           Shareholder Approval, excluding the
votes of Common Shares held by Insiders benefiting from the amendment, of:

(i)            any reduction in the
Exercise Price of an Option; or

(ii)           any extension of
the term of an Option;

previously granted to an Insider.

ARTICLE 3

TERMS AND CONDITIONS OF OPTIONS

Exercise
Price

3.1           The Exercise Price of an Option will
be set by the Board at the time such Option is allocated under the Plan, and
cannot be less than the Discounted Market Price, if the Common Shares are
listed for trading on the TSX Venture, or the most recent closing market price
of the Common Shares as reported by the TSX at the time such option is granted,
if such shares are listed for trading on the TSX.

 9
 

 

 

Term
of Option

3.2           The term of each Option will be
determined by the Board, provided that, if the Company is a Tier 1 Issuer on
the TSX Venture or the Common Shares are listed for trading on the TSX, then an
Option can be exercisable for a maximum of 10 years from the Effective Date;
and if the Company is a Tier 2 Issuer on the TSX Venture an Option can be
exercisable for a maximum of five years from the Effective Date.

Option
Amendment

3.3           Subject to Section 2.10(b), the
Exercise Price of an Option may be amended only if at least six (6) months have
elapsed since the later of the date of commencement of the term of the Option,
the date the Company’s shares commenced trading on the TSX Venture, or the date
of the last amendment of the Exercise Price.

3.4           An Option must be outstanding for at
least one year before the Company may extend its term, subject to the limits
contained in Section 3.2.

3.5           Any proposed amendment to the terms
of an Option must receive any and all approvals that are required from the TSX
Venture or the TSX under Exchange Policies prior to the exercise of such
Option.

Vesting
of Options

3.6           Subject to Section 3.7 and Section
3.8, vesting of Options is otherwise at the discretion of the Board, and will
generally be subject to:

(a)           the Service Provider remaining
employed by or continuing to provide services to the Company or any of its
subsidiaries and Affiliates as well as, at the discretion of the Board,
achieving certain milestones which may be defined by the Board from time to
time or receiving a satisfactory performance review by the Company or its
subsidiary or affiliate during the vesting period; or

(b)           remaining as a Director of the
Company or any of its subsidiaries or Affiliates during the vesting period.

3.7           If the Company is a Tier 2 Issuer on
the TSX Venture and the Plan Shares exceed 10% of the Listed Shares, then any
Options granted under the Plan will vest in accordance with the vesting
schedule attached as Schedule B and may be exercised only after vesting.

Vesting
of Options Granted for Investor Relations Activities

3.8           Subject to Section 3.7, if the Common
Shares are listed for trading on the TSX Venture, then Options granted to
Consultants conducting Investor Relations Activities will vest:

 10
 

 

 

(a)           over a period of not less than 12
months as to 25% on the date that is three months from the date of grant, and a
further 25% on each successive date that is three months from the date of the
previous vesting; or

(b)           such longer vesting period as the
Board may determine.

Variation
of Vesting Periods

3.9           At the time an Option is granted
which carries vesting provisions, the Board may vary such vesting provisions
provided in Section 3.7 and Section 3.8, subject to Regulatory Approval.

Accelerated
Vesting

3.10         Notwithstanding any vesting provisions imposed
on any Options granted under this Plan, whether such vesting provisions are set
out in this Plan or in an Option Commitment made pursuant to this Plan, if the
Company is classified as a Tier 1 Issuer by the TSX Venture or listed on the
TSX, then, immediately upon the completion of a Sale of the Company, all
outstanding and unvested Options (except for Options granted to Consultants
conducting Investor Relations Activities) will be deemed to be fully vested
without the need for any further action by the Company or the Optionee.

Optionee
Ceasing to be Employed or Provide Services

3.11         No Option held by a Service Provider
may be exercised after such Service Provider has ceased to be employed by or
provide services to the Company, except as follows:

(a)           in the case of the death of an
Optionee, any vested Option held by him at the date of death will become
exercisable by the Optionee’s lawful personal representatives, heirs or
executors until the earlier of one year after the date of death of such
Optionee and the date of expiration of the term otherwise applicable to such
Option;

(b)           in the case of the Company being a
Tier 1 Issuer listed on the TSX Venture, Options granted to any Service
Provider must expire within 90 days after the date the Optionee ceases to be
employed by or provide services to the Company, but only to the extent that
such Optionee was vested in the Option at the date the Optionee ceased to be so
employed by or to provide services to the Company;

(c)           in the case of the Company being a
Tier 2 Issuer listed on the TSX Venture, Options granted to a Service Provider
conducting Investor Relations Activities must expire within 30 days of the date
the Optionee ceases to provide services to the Company, but only to the extent
that such Optionee was vested in the Option at the date the Optionee ceased to provide
services to the Company;

(d)           in the case of the Company being a
Tier 2 Issuer listed on the TSX Venture, Options granted to an Optionee (other
than an Optionee conducting Investor Relations Activities) must expire within
90 days after the Optionee ceases to be employed by or provide services to the 

 11
 

 

 

Company, but only to the extent
that such Optionee was vested in the Option at the date the Optionee ceased to
be so employed by or to provide services to the Company;

(e)           in the case of the Company having its
securities listed on the TSX, Options granted to an Optionee must expire
between 90 days and 1 year after the Optionee ceases to be employed by or provide
services to the Company, but only to the extent that such Optionee was vested
in the Option at the date the Optionee ceased to be employed by or to provide services
to the Company;

(f)            in the case of an Optionee being
dismissed from employment or service for cause, such Optionee’s Options, whether
or not vested at the date of dismissal, will terminate immediately on the date
the Optionee ceased to be employed by or to provide services to the Company, and
the terminated Optionee will have no right to exercise his Options after such a
termination; and

(g)           in the event that the Optionee ceases
to be employed by or provide services to the Company, whether for cause or
otherwise, no potential value of the Optionee’s Options will be considered in
determining any notice or compensation in lieu of notice that may be required
or given upon such cessation of the Optionee’s tenure with the Company.  This is a condition of the grant of the
Options to the Optionee and the Optionee waives any and all rights and claims
the Optionee may have to any Optioned Shares or value attributable to Optioned
Shares which would have under any circumstances vested after the Optionee
ceases to be employed by or provide services to the Company.

Non
Assignable

3.12         Subject to Section 3.11(a), all Options
will be exercisable only by the Optionee to whom they are granted and will not
be assignable or transferable.

Adjustment
of the Number of Optioned Shares

3.13         The number of Common Shares subject to
an Option will be subject to adjustment in the events and in the manner
following:

(a)           in the event of a subdivision of
Common Shares as constituted on the date hereof, at any time while an Option is
in effect, into a greater number of Common Shares, the Company will thereafter
deliver at the time of purchase of Optioned Shares hereunder, in addition to
the number of Optioned Shares in respect of which the right to purchase is then
being exercised, such additional number of Common Shares as result from the
subdivision without an Optionee making any additional payment or giving any other
consideration therefor;

(b)           in the event of a consolidation of
the Common Shares as constituted on the date hereof, at any time while an
Option is in effect, into a lesser number of Common Shares, the Company will
thereafter deliver and an Optionee will accept, at the time of purchase of
Optioned Shares hereunder, in lieu of the number of Optioned Shares in respect
of which the right to purchase is then being exercised, the lesser number of
Common Shares as result from the consolidation;

 12
 

 

 

(c)           in the event of any change of the
Common Shares as constituted on the date hereof, at any time while an Option is
in effect, the Company will thereafter deliver at the time of purchase of
Optioned Shares hereunder the number of shares of the appropriate class resulting
from the said change as an Optionee would have been entitled to receive in
respect of the number of Common Shares so purchased had the right to purchase
been exercised before such change;

(d)           in the event of a capital
reorganization, reclassification or change of outstanding equity shares (other
than a change in the par value thereof) of the Company, a consolidation, merger
or amalgamation of the Company with or into any other company or a sale of the
property of the Company as or substantially as an entirety at any time while an
Option is in effect, an Optionee will thereafter have the right to purchase and
receive, in lieu of the Optioned Shares immediately theretofore purchasable and
receivable upon the exercise of the Option, the kind and amount of share and
other securities and property receivable upon such capital reorganization,
reclassification, change, consolidation, merger, amalgamation or sale which the
holder of a number of Common Shares equal to the number of Optioned Shares
immediately theretofore purchasable and receivable upon the exercise of the
Option would have received as a result thereof. 
The subdivision or consolidation of Common Shares at any time
outstanding (whether with or without par value) will not be deemed to be a
capital reorganization or a reclassification of the capital of the Company for
the purposes of this Section 3.13(d);

(e)           an adjustment will take effect at the
time of the event giving rise to the adjustment, and the adjustments provided
for in this Section are cumulative;

(f)            the Company will not be required to
issue fractional shares in satisfaction of its obligations hereunder.  Any fractional interest in a Common Share
that would except for the provisions of this Section 3.13(f), be deliverable
upon the exercise of an Option will be cancelled and not be deliverable by the
Company; and

(g)           if any questions arise at any time
with respect to the Exercise Price or number of Optioned Shares deliverable
upon exercise of an Option in any of the events set out in this Section 3.13,
such questions will be conclusively determined by the Company’s auditors, or,
if they decline to so act, any other firm of Chartered Accountants, in
Vancouver, British Columbia (or in the city of the Company’s principal
executive office) that the Company may designate and who will have access to
all appropriate records and such determination will be binding upon the Company
and all Optionees.

ARTICLE
4

COMMITMENT AND EXERCISE PROCEDURES

Option Commitment

4.1           Upon grant of an Option hereunder, an
authorized officer of the Company will deliver to the Optionee an Option
Commitment detailing the terms of such Options and upon such delivery the
Optionee will be subject to the Plan and have the right to purchase the
Optioned Shares at the Exercise Price set out therein subject to the terms and
conditions hereof.

 13
 

 

 

Manner of Exercise

4.2           An
Optionee who wishes to exercise his Option may do so by delivering:

(a)           a written notice to the Company
specifying the number of Optioned Shares being acquired pursuant to the Option;
and

(b)           the aggregate Exercise Price (and any
applicable withholding taxes) for the Optioned Shares being acquired by any of
the following means permitted by the Board from time to time, including, but
not limited to, (1) cash or a certified cheque payable to the Company; (2)
tendering (either actually or by attestation) Common Shares owned by the
Optionee for at least six (6) months, valued at the fair market value on the
date the Option is exercised; (3) arranging to have the appropriate number of
Common Shares issuable upon the exercise of the Option withheld or sold; or (4)
any combination of the above.

Delivery
of Certificate and Hold Periods

4.3           As soon as practicable after receipt
of the notice of exercise described in Section 4.2 and payment in full for the
Optioned Shares being acquired, the Company will direct its transfer agent to
issue a certificate to the Optionee for the appropriate number of Optioned
Shares. Such certificate issued will bear a legend stipulating any resale
restrictions required under applicable securities laws.  Further, if the Company is a Tier 2 Issuer,
or the Exercise Price is set below the then current market price of the Common
Shares on the TSX Venture, then the certificate will also bear a legend
stipulating that the Optioned Shares are subject to a four-month TSX
Venture hold period commencing the date of the Option Commitment.

ARTICLE 5

GENERAL

Employment
and Services

5.1           Nothing contained in the Plan will
confer upon or imply in favour of any Optionee any right with respect to
office, employment or provision of services with the Company, or interfere in
any way with the right of the Company to lawfully terminate the Optionee’s
office, employment or service at any time pursuant to the arrangements
pertaining to same.  Participation in the
Plan by an Optionee will be voluntary.

No Representation or Warranty

5.2           The
Company makes no representation or warranty as to the future market value of
Common Shares issued in accordance with the provisions of the Plan or to the
effect of the Income Tax Act
(Canada) or any other taxing statute governing the Options or the Common shares
issuable thereunder or the tax consequences to a Service Provider.  Compliance with applicable securities laws as
to the disclosure and resale obligations of each Participant is the
responsibility of such Participant and not the Company.

 14
 

 

 

Interpretation

5.3           The
Plan will be governed and construed in accordance with the laws of the Province
of British Columbia.

Amendment
of the Plan

5.4           The Board reserves the right, in its
absolute discretion, to at any time amend, modify or terminate the Plan with
respect to all Common Shares in respect of Options which have not yet been
granted hereunder.  Any amendment to any
provision of the Plan will be subject to any necessary Regulatory Approvals.

U.S. Tax
Withholding

5.5           Prior to the delivery of any Optioned
Shares being acquired upon exercise of an Option, the Company may withhold, or
require an Optionee to remit to the Company, an amount sufficient to pay any
U.S. Federal, state, and local taxes associated with exercise of the Option and
acquisition of the Optioned Shares.  The
Board may, in its discretion and subject to such rules as the Board may adopt,
permit an Optionee to pay any or all taxes associated with such exercise in
cash, by tendering or arranging to have sold the appropriate number of Common
Shares, including the Optioned Shares being delivered in connection with the
exercise, or by a combination of these methods. 
If Common Shares are used to satisfy withholding tax obligations, such
Common Shares shall be valued based on the fair market value thereof as of the
date when the withholding for taxes is required to be made.  Notwithstanding the foregoing, except as
otherwise provided by the Board or in the terms of the Option, the Company
shall have the right to require an Optionee to pay cash to satisfy withholding
taxes as a condition to the delivery of any Optioned Shares being acquired upon
exercise under the Plan.

 15

 

SCHEDULE
A

SHARE
OPTION PLAN

OPTION
COMMITMENT

Notice is hereby given
that, effective this ▼ day of ▼, 200▼ (the “Effective Date”)
Storm Cat Energy Corporation (the “Company”) has granted to ▼ (the “Service
Provider”), an Option to acquire ▼ Common Shares (“Optioned’ Shares”) up to
5:00 p.m. Vancouver Time on the ▼ day of ▼, 200▼ (the “Expiry
Date”) at an Exercise Price of CDN$▼ per share.

At the date of grant of
the Option, the [Company’s Common Shares are listed for
trading on the TSX  Venture and the Company
is classified as a Tier ▼ Issuer / Company’s Common Shares are listed for
trading on the TSX].

Optioned Shares will vest
and may be exercised as follows:

▼ in accordance
with the vesting provisions set out in Schedule B of the Plan

or

▼ as follows:  ▼

The grant of the Option
evidenced hereby is made subject to the terms and conditions of the Company’s
Amended & Restated Share Option Plan (the “Plan”) dated for reference June
27, 2006, the terms and conditions of which are hereby incorporated
herein.  The Company will provide you
with a copy of the Plan upon your request.

To exercise your Option,
deliver a written notice specifying the number of Optioned Shares you wish to
acquire, together with cash or a certified cheque payable to the Company for
the aggregate Exercise Price, to the Company. 
A certificate for the Optioned Shares so acquired will be issued by the
Company’s transfer agent as soon as practicable thereafter and will bear a
minimum four month non-transferability legend from the date of this Option
Commitment.  [Tier 1 Issuers
on the TSX Venture and companies listed on the TSX may grant stock options
without a hold period, provided the exercise price of the options has been set
at or above the market price of the Company’s shares on such stock exchange
rather than below.]

The Company and the
Service Provider represent that the Service Provider under the terms and
conditions of the Plan is a bona fide [EMPLOYEE/ CONSULTANT/MANAGEMENT COMPANY
EMPLOYEE] ▼ of the Company, entitled to receive Options under Exchange
Policies (as such term is defined in the Plan).

	
  STORM CAT ENERGY CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Authorized
  Signatory

  	
   

  

 

 

SCHEDULE
B

SHARE
OPTION PLAN

(See Section 3.7 of the Plan)

VESTING
SCHEDULE

1.             Options granted pursuant to the Plan to Directors,
Officers and all Employees employed by the Company for a period of more than
six months at the time the Option is granted will vest as follows:

(a)           1/3 of the total number of Options
granted will vest six months after the date of grant;

(b)           a further 1/3 of the total number of
Options granted will vest one year after the date of grant; and

(c)           the remaining 1/3 of the total number
of Options granted will vest eighteen months after the date of grant.

2.             Options granted pursuant to the Plan to an Employee who
has been employed by the Company for a period of less than six months at the
time the Option is granted will vest as follows:

(a)           1/3 of the total number of Options
granted will vest one year after the date of grant;

(b)           a further 1/3 of the total number of
Options granted will vest eighteen months after the date of grant; and

(c)           the remaining 1/3 of the total number
of Options granted will vest two years after the date of grant.

3.             Options granted to Consultants retained by the Company pursuant
to a short term contract or for a specific project with a finite term, will be
subject to such vesting provisions determined by the Board of Directors of the
Company at the time the Option Commitment is made, subject to Regulatory
Approval.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}]]