Document:

EX-10.3

 Exhibit 10.3 

SCHEDULE C 

CONFIDENTIALITY AND 

ASSIGNMENT OF INVENTIONS AGREEMENT 

XBIOTECH INC. 
  

			
	PRIVATE AND CONFIDENTIAL	  	As of March 22, 2005

 John Simard 
 2960 Alamont Creek

 West Vancouver, BC 
 Dear Mr. Simard: 

The purpose of this letter is to confirm and record the terms of the agreement (the “Agreement”) between you and XBiotech Inc.
(“XBiotech”) concerning the terms on which you will (i) receive from and disclose to XBiotech proprietary and confidential information; (ii) agree to keep the information confidential, to protect it from disclosure and to
use it only in accordance with the terms of this Agreement; and (iii) assign to XBiotech all rights, including any ownership interest which may arise in all inventions and intellectual property developed or disclosed by you over the course of
your work during your employment with XBiotech. The effective date (“Effective Date”) of this Agreement is the date that you start or started working at XBiotech, as indicated in the employment agreement between you and XBiotech
dated as of the date of this Agreement.  
 In consideration of the offer of employment by XBiotech and the payment by XBiotech to you of the sum of
CDN$1.00 and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, you and XBiotech hereby agree as follows: 
  

	1.	INTERPRETATION 

 1.1 Definitions. In this Agreement: 

 

	 	(a)	“Confidential Information”, subject to the exemptions set out in Section 2.8, shall mean any non-public information relating to XBiotech’s Business (as hereinafter defined), whether or not
conceived, originated, discovered, or developed in whole or in part by you, and which, without limiting the generality of the foregoing, shall include; 

  

	 	(i)	scientific strategies, concepts, designs, inventions, know-how, information, material, formulas, processes, devices, programs, methods and proprietary rights in the nature of copyrights, patents, trademarks, licenses
and industrial designs; 

	 	(ii)	financial, personnel, operations, clinical, regulatory, marketing, advertising and commercial information and strategies, customer lists, compilations, agreements and contractual records and correspondence;

  

	 	(iii)	all biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, clinical, research, safety and quality control data and information, and all applications, registrations, licenses,
authorizations, approvals and correspondence submitted to regulatory authorities; 

  

	 	(iv)	unique combinations of separate items that are not generally known and items provided or disclosed to XBiotech by third parties subject to restrictions on use or disclosure; and 

 

	 	(v)	all information relating to the businesses of competitors of XBiotech including information relating to competitors’ research and development, intellectual property, operations, financial, clinical, regulatory,
marketing, advertising and commercial strategies that is not generally known. 

  

	 	(b)	“Inventions” will mean any and all inventions, discoveries, developments, enhancements, improvements, concepts, formulas, processes, ideas, technology, know-how, all documents, memoranda, notes or other
writings prepared by you and all other intellectual property, whether or not patentable and whether or not reduced to practice, as well as all applications, registrations and related foreign applications filed and registrations granted thereon.

  

	 	(c)	“Work Product” will mean any and all Inventions relating to XBiotech’s Business resulting from any work performed by you for XBiotech that you may have invented or co-invented or may invent or
co-invent during your involvement in any capacity with XBiotech, except those Inventions invented by you entirely on your own time that do not relate to XBiotech’s Business or do not derive from any equipment, supplies, facilities, Confidential
Information or other information, gained directly or indirectly by you from or through your involvement in any capacity with XBiotech. 

  

	 	(d)	“XBiotech’s Business” will mean the businesses actually carried on by XBiotech, directly or indirectly, whether under an agreement with or in collaboration with, any other party including but not
exclusively the discovery, development, production, marketing and sale of antibody therapeutics. 

  

	2.	CONFIDENTIALITY 

 2.1 Basic Obligation of Confidentiality. Except as set out in this Agreement,
you will keep strictly confidential all Confidential Information and all other information belonging to XBiotech that you acquire, observe or are informed of, directly or indirectly, in connection with your involvement, in any capacity, with
XBiotech. 

  
 - 2 - 

 2.2 Fiduciary Capacity. You will be and act toward XBiotech as a fiduciary in respect of the Confidential
Information. 
 2.3 Non-disclosure. Unless XBiotech first gives you written permission to do so under Section 2.7 of this Agreement, you will
not at any time, either during or after your involvement in any capacity with XBiotech; 
  

	 	(a)	use or copy Confidential Information or your recollections thereof; 

  

	 	(b)	publish or disclose Confidential Information or your recollections thereof to any person other than to employees of XBiotech who have a need to know such Confidential Information for their work for XBiotech;

  

	 	(c)	permit or cause any Confidential Information to be used, copied, published, disclosed, translated or adapted except as otherwise expressly permitted by this Agreement; or 

 

	 	(d)	permit or cause any Confidential Information to be stored off the premises of XBiotech, including permitting or causing such Information to be stored in electronic format on personal computers, except in accordance with
written procedures of XBiotech, as amended from time to time in writing. 

 2.4 Taking Precautions. You will take all reasonable
precautions necessary or prudent to prevent material in your possession or control that contains or refers to Confidential Information from being discovered, used or copied by third parties. You will not transfer any material to another person
outside of XBiotech, unless a material transfer agreement has been signed by both XBiotech and the other party. You will not accept any material from another person outside of XBiotech, unless in accordance with any written procedures of XBiotech in
place from time to time. 
 2.5 XBiotech’s Ownership of Confidential Information. As between you and XBiotech, XBiotech will own all right,
title and interest in and to the Confidential Information, whether or not created or developed by you. 
 2.6 Return of Confidential Information.
Upon the request of XBiotech, you shall promptly return to XBiotech every original and copy in whatever medium in your possession or control containing Confidential Information, including, without limitation, test results, notes of experiments,
computer files, designs, devices, formulas, memoranda, drawings, plans, prototypes, samples, reports, financial statements, estimates. 
 2.7 Purpose of
Use. You will use Confidential Information only for purposes authorized or directed by XBiotech. 

  
 - 3 - 

 2.8 Exemptions. Your obligation of confidentiality under this Agreement will not apply to any of the
following: 
  

	 	(a)	information that is already known to you, though not due to a prior disclosure by XBiotech or by a person who obtained knowledge of the information, directly or indirectly, from XBiotech; 

 

	 	(b)	information disclosed to you by another person who is not obliged to maintain the confidentiality of that information and who did not obtain knowledge of the information, directly or indirectly, from XBiotech;

  

	 	(c)	information that is developed by you independently of Confidential Information received from XBiotech and such independent development can be documented by you; 

 

	 	(d)	other particular information or material which XBiotech expressly exempts by written instrument signed by XBiotech; 

  

	 	(e)	information or material that is in the public domain through no fault of your own; and 

  

	 	(f)	information or material that you are obligated by law to disclose, to the extent of such obligation, provided that: 

  

	 	(i)	in the event that you are required to disclose such information or material, then, as soon as you become aware of this obligation to disclose, you will provide XBiotech with prompt written notice so that XBiotech may
seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement; 

  

	 	(ii)	if XBiotech agrees that the disclosure is required by law, it will give you written authorization to disclose the information for the required purposes only; 

 

	 	(iii)	if XBiotech does not agree that the disclosure is required by law, this Agreement will continue to apply, except to the extent that a Court of competent jurisdiction orders otherwise; and 

 

	 	(iv)	if a protective order or other remedy is not obtained or if compliance with this Agreement is waived, you will furnish only that portion of the Confidential Information that is legally required and will exercise all
reasonable efforts to obtain confidential treatment of such Confidential Information. 

  

	3.	ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS 

 3.1 Notice of Invention. You agree to promptly and
fully inform XBiotech of all your Work Product throughout the course of your involvement in any capacity with XBiotech, 

  
 - 4 - 

 
whether or not developed before or after your execution of this Agreement. On your ceasing to be employed by XBiotech for any reason whatsoever, you will immediately deliver up to XBiotech all of
your Work Product. You further agree that all of your Work Product will at all times be the Confidential Information of XBiotech. 
 3.2 Assignment of
Rights. Subject only to those exceptions set out in Exhibit A hereto, you will assign, and do hereby assign, to XBiotech or, at the option of XBiotech and upon notice from XBiotech, to XBiotech’s designee, your entire right, title
and interest in and to all of your Work Product during your involvement in any capacity with XBiotech and all other rights and interests of a proprietary nature in and associated with your Work Product. To the extent that you retain or acquire legal
title to any such rights and interests, you hereby declare and confirm that such legal title is and will be held by you only as trustee and agent for XBiotech. You agree that XBiotech’s rights hereunder will attach to all of your Work Product,
notwithstanding that it may be perfected or reduced to specific form after you have terminated your relationship with XBiotech. You further agree that XBiotech’s rights hereunder are not limited to Canada but will extend to every country of the
world. For greater clarity, the all of your rights in the following patent application shall be deemed Work Product and assigned by you to XBiotech: 

U.S. Provisional Application Serial No. 60/704,450 

“DIAGNOSIS, TREATMENT AND PREVENTION OF VASCULAR 

DISORDERS USING IL-1A AUTOANTIBODIES” 

Inventors: J. Simard, K. Bendtzen 
 3.3 Moral
Rights. Without limiting the foregoing, you irrevocably waive any and all moral rights arising under the Copyright Act (Canada), as amended, or any successor legislation of similar force and effect or similar legislation in other
applicable jurisdictions or at common law that you may have with respect to your Work Product, and agree never to assert any moral rights which you may have in your Work Product, including, without limitation, the right to the integrity of such Work
Product, the right to be associated with the Work Product, the right to restrain or claim damages for any distortion, mutilation or other modification or enhancement of the Work Product and the right to restrain the use or reproduction of the Work
Product in any context and in connection with any product, service, cause or institution, and you further confirm that XBiotech may use or alter any such Work Product as XBiotech sees fits in its absolute discretion. 

3.4 Goodwill. You hereby agree that all goodwill you have established or may establish with clients, customers, suppliers, principals, shareholders,
investors, collaborators, strategic partners, licensees, contacts or prospects of XBiotech relating to the business or affairs of XBiotech (or of its partners, subsidiaries or affiliates), both before and after the Effective Date, will, as between
you and XBiotech, be and remain the property of XBiotech exclusively, for XBiotech to use, alter, vary, adapt and exploit as XBiotech will determine in its discretion. 

3.5 Assistance. You hereby agree that during your employment by XBiotech and thereafter, you will reasonably assist XBiotech, at XBiotech’s
expense, with respect to signing further documents and doing such acts and other things reasonably requested by XBiotech to confirm the transfer of ownership of rights in the Work Product to XBiotech and to permit

  
 - 5 - 

 
XBiotech to obtain patents or copyrights or other similar registration rights covering the Work Product. You further agree to cooperate to the extent and in the manner requested by XBiotech in
the prosecution, maintenance and defense of any such rights or any litigation or other proceeding involving any Work Product in any country of the world. 

3.6 Assistance with Defence Proceedings. You further agree to reasonably assist XBiotech, at XBiotech’s request and expense, in connection with
any defence to an allegation of infringement of another person’s intellectual property rights, claim of invalidity of another person’s intellectual property rights, opposition to, or intervention regarding, an application for letters
patent, copyright or trademark or other proceedings relating to intellectual property or applications for registration thereof. 
  

	4.	GENERAL 

 4.1 Term and Duration of Obligation. The term of this Agreement is from the Effective
Date and terminates on the date that you are no longer working at or for XBiotech. Except as otherwise agreed in a written instrument signed by XBiotech, Articles 1, 2 and 3 and Sections 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12 and
4.13 will survive the termination of this Agreement, including your obligations of confidentiality and to return Confidential Information, and will endure, with respect to each item of Confidential Information, for so long as those items fall within
the definition of Confidential Information. 
 4.2 Binding Nature of Agreement. This Agreement is not assignable by you. You agree that this
Agreement will be binding upon your heirs and estate. 
 4.3 No Conflicting Obligations. You represent and warrant that you will not without legal
authority use or disclose to other persons at XBiotech information that (i) constitutes a trade secret of persons other than XBiotech during your employment at XBiotech, or (ii) which is confidential information owned by another person.
You represent and warrant that you have no agreements with or obligations to others with respect to the matters covered by this Agreement or concerning the Confidential Information that are in conflict with anything in this Agreement. 

4.4 Equitable Remedies. You acknowledge and agree that a breach by you of any of your obligations under this Agreement would result in damages to
XBiotech that could not be adequately compensated by monetary award. Accordingly, in the event of any such breach by you, in addition to all other remedies available to XBiotech at law or in equity, XBiotech will be entitled as a matter of right to
apply to a court of competent jurisdiction for such relief by way of restraining order, injunction, decree or otherwise, as may be appropriate to ensure compliance with the provisions of this Agreement, without having to prove damages to the court,
as well as an equitable accounting of all your profits or benefits arising out of such breach. In the event XBiotech is successful in obtaining any injunction or is otherwise successful in any other action arising out of a breach of this Agreement,
you will pay to XBiotech the full amount of XBiotech’s legal fees and expenses incurred by XBiotech in pursuing such action(s). 
 4.5
Publicity. You will not, without the prior written consent of XBiotech, make or give any public announcements, press releases or statements to the public or the press regarding XBiotech’s Business or any Confidential Information. 

  
 - 6 - 

 4.6 Severability. If any covenant or provision of this Agreement or of a section of this Agreement is
determined by a court of competent jurisdiction to be void or unenforceable in whole or in part, then such void or unenforceable covenant or provision will not affect or impair the enforceability or validity of the balance of the section or any
other covenant or provision. 
 4.7 Time of Essence/No Waiver. Time is of the essence hereof and no waiver, delay, indulgence, or failure to act by
The Company regarding any particular default or omission by you will affect or impair any of the Company’s rights or remedies regarding that or any subsequent default or omission that is not expressly waived in writing, and in all events time
will continue to be of the essence without the necessity of specific reinstatement. 
 4.8 Further Assurances. The parties will execute and deliver
to each other such further instruments and assurances and do such further acts as may be required to give effect to this Agreement. 
 4.9 Notices.
All notices and other communications that are required or permitted by this Agreement must be in writing and will be hand delivered or sent by express delivery service or certified or registered mail, postage prepaid, or by facsimile transmission
(with written confirmation copy by registered first-class mail) to the parties at the addresses indicated below. 
 If to the
Company: 
 XBiotech Inc. 

1055 West Hastings, Suite 300 

Vancouver, British Columbia V6E 2E9 

Attention: Chair 
 with a copy
to: 
 XBiotech Inc. 
 c/o
Farris, Vaughan, Wills & Murphy LLP 
 2500-700 West Georgia Street 

Vancouver, B.C. V7Y1B3 

Attention: Corporate Secretary 

If to John Simard: 
 John
Simard 
 2960 Alamont Creek 

West Vancouver, BC 
 Any such notice will be
deemed to have been received on the earlier of the date actually received, on the next business day following transmission if by facsimile transmission, or the date five (5) days after the same was posted or sent. Either party may change its
address or its facsimile number by giving the other party written notice, delivered in accordance with this Section. 

  
 - 7 - 

 4.10 Amendment. No amendment, modification, supplement or other purported alteration of this Agreement
will be binding unless it is in writing and signed by you and by the Company. 
 4.11 Entire Agreement. This Agreement supersedes all previous
dealings, understandings, and expectations of the parties and constitutes the whole agreement with respect to the matters contemplated hereby, and there are no representations, warranties, conditions or collateral agreements between the parties with
respect to such transactions except as expressly set out herein. 
 4.12 Governing Law. This Agreement will be governed by and interpreted in
accordance with the laws of the Province of British Columbia and applicable laws of Canada and the parties hereto attorn to the exclusive jurisdiction of the provincial and federal courts of such province. 

4.13 Independent Legal Advice. You hereby acknowledge that you have obtained or have had an opportunity to obtain independent legal advice in
connection with this Agreement, and further acknowledge that you have read, understand, and agree to be bound by all of the terms and conditions contained herein. 

Acceptance 
 If the foregoing terms and
conditions are acceptable to you, please indicate your acceptance of and agreement to the terms and conditions of this Agreement by signing below on this letter and on the enclosed copy of this letter in the space provided and by returning the
enclosed copy so executed to us. Your execution and delivery to the Company of the enclosed copy of this letter will create a binding agreement between us. 

Thank you for your cooperation in this matter. 
  

			
	Yours truly,
	
	XBIOTECH INC.
		
	By:	 	 /s/ R. Hector MacKay-Dunn, Q.C.

		 	Authorized Signatory

  
 - 8 - 

 Accepted and agreed as of the 15 day of November, 2005 

 

							
	 /s/ Christopher Gora
	  		  	 /s/ John Simard
	  	
	Witness Signature	  		  	Signature of John Simard	  	
				
	 Christopher Gora
	  		  		  	
	Witness Name	  		  		  	
				
	 Attorney
	  		  		  	
	Occupation	  		  		  	
				
	  
	  		  		  	
	Address	  		  		  	

  
 - 9 - 

 EXHIBIT A 

EXCEPTIONS TO SECTION 3.2 

ASSIGNMENT OF RIGHTS 
 None if left
blankEX-10.4

 Exhibit 10.4 

XBIOTECH INC. 
  

 
 XBIOTECH 2005 INCENTIVE STOCK

 OPTION PLAN 
  

 
  

 XBIOTECH INC. 

XBIOTECH 2005 INCENTIVE STOCK OPTION PLAN 
  

	1.	PURPOSE OF THE PLAN 

 1.1 Purpose of this Plan. The purpose of this Plan is to promote the
interests of the Company by: 
  

	 	(a)	furnishing certain directors, officers, employees or consultants of the Company or an Affiliate or other persons as the Compensation Committee may approve with greater incentive to further develop and promote the
business and financial success of the Company; 

  

	 	(b)	furthering the identity of interests of persons to whom options may be granted with those of the shareholders of the Company generally through share ownership in the Company; and 

 

	 	(c)	assisting the Company in attracting, retaining and motivating its directors, officers, employees and consultants. 

The Company believes that these purposes may best be effected by granting Options to acquire Common Shares. 

 

	2.	DEFINITIONS 

 2.1 Definitions. In this Plan, unless there is something in the subject matter or
context inconsistent therewith, capitalized words and terms will have the following meanings: 
  

	 	(a)	“Affiliate” means a corporation that is an affiliate of the Company under the Securities Act (British Columbia), as amended from time to time; 

 

	 	(b)	“Board of Directors” means the board of directors of the Company as constituted from time to time; 

  

	 	(a)	“Change in Control” means: 

  

	 	(i)	any merger or consolidation in which voting securities of the Company possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a
person or persons different from the persons holding those securities immediately prior to such transaction and the composition of the Board of Directors following such transaction is such that the directors of the Company prior to the transaction
constitute less than fifty percent (50%) of the Board of Directors membership following the transaction; 

	 	(ii)	any acquisition, directly or indirectly, by an person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company)
of beneficial ownership of voting securities of the Company possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities; 

 

	 	(iii)	any acquisition, directly or indirectly, by a person or related group of persons of the right to appoint a majority of the directors of the Company or otherwise directly or indirectly control the management, affairs and
business of the Company; 

  

	 	(iv)	any sale, transfer or other disposition of all or substantially all of the assets of the Company; and 

  

	 	(v)	a complete liquidation or dissolution of the Company; 

 provided however, that a Change in
Control shall not be deemed to have occurred if such Change in Control results solely from the issuance, in connection with a bona fide financing or series of financings by the Company or any of its Affiliates, of voting securities of the Company or
any of its Affiliates or any rights to acquire voting securities of the Company or any of its Affiliates which are convertible into voting securities; 
  

	 	(c)	“Common Shares” means the common shares in the capital of the Company as constituted on the Effective Date, provided that if the rights of any Participant are subsequently adjusted pursuant to Article 9
hereof, “Common Shares” thereafter means the shares or other securities or property which such Participant is entitled to purchase after given effect to such adjustment; 

 

	 	(d)	“Compensation Committee” meaning ascribed thereto in Section 5.1 of this Plan; 

  

	 	(e)	“Consultant” means any individual, corporation or other person engaged to provide ongoing valuable services to the Company or an Affiliate; 

 

	 	(f)	“Company” means XBiotech Inc. and includes any successor corporation thereto; 

  

	 	(g)	“Effective Date” has the meaning ascribed thereto by Section 3.1 of this Plan; 

  

	 	(h)	“Eligible Person” means a director, officer, employee or Consultant of the Company or an Affiliate or a person otherwise approved by the Compensation Committee; 

 

	 	(i)	“Exercise Price” means the price per Common Share at which a Participant may purchase Common Shares pursuant to an Option, provided that if such price is adjusted pursuant to Section 9.1 hereof,
“Exercise Price” thereafter means the price per Common Share at which such Participant may purchase Common Shares pursuant to such Option after giving effect to such adjustment; 

  
 2 

	 	(j)	“Legal Representative” has the meaning ascribed thereto by Section 6.7 of this Plan; 

  

	 	(k)	“Merger and Acquisition Transaction” means: 

  

	 	(i)	any merger; 

  

	 	(ii)	any acquisition; 

  

	 	(iii)	any amalgamation; 

  

	 	(iv)	any offer for shares of the Company which if successful would entitle the offeror to acquire all of the voting securities of the Company; or 

 

	 	(v)	any arrangement or other scheme of reorganization; 

 that results in a Change in Control; 

 

	 	(l)	“Options” means stock options granted hereunder to purchase Common Shares from treasury pursuant to the terms and conditions hereof and as evidenced by an Option Agreement and “Option” means
any one of them; 

  

	 	(m)	“Option Agreement” means an agreement evidencing an Option, entered into by and between the Company and an Eligible Person; 

 

	 	(n)	“Outstanding Common Shares” at the time of any share issuance or grant of Options means the number of Common Shares that are outstanding immediately prior to the share issuance or grant of Options in
question, on a non-diluted basis, excluding Common Shares issued pursuant to share compensation arrangements over the preceding one-year period, or such other number as
may be determined under the applicable rules and regulations of all regulatory authorities to which the Company is subject, including the Stock Exchange; 

  

	 	(o)	“Participant” means a person to whom Options have been granted under this Plan; 

  

	 	(p)	“Plan” means the XBiotech 2005 Incentive Stock Option Plan, as the same may from time to time be supplemented or amended and in effect; 

 

	 	(q)	“Stock Exchange” means such stock exchange or other organized market on which the Common Shares are listed or posted for trading; 

 

	 	(r)	“U.S. Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended from time to time; 

  
 3 

	 	(s)	“U.S. Internal Revenue Code” means the Internal Revenue Code of 1986 of the United States, as amended from time to time; 

 

	 	(t)	“U.S. Nonqualified Stock Option” means an Option to purchase Common Shares other than a U.S. Qualified Incentive Stock Option; 

 

	 	(u)	“U.S. Optionee” means a Participant who is a citizen or a resident of the United States (including its territories, possessions and all areas subject to the jurisdiction); and 

 

	 	(v)	“U.S. Qualified Incentive Stock Option” means an Option to purchase Common Shares with the intention that it qualify as an “incentive stock option” as that term is defined in Section 422
of the U.S. Internal Revenue Code, such intention being evidenced by the resolutions of the Compensation Committee at the time of grant. 

  

	3.	EFFECTIVE DATE OF PLAN 

 3.1 Effective Date of this Plan. The effective date (the “Effective
Date”) of this Plan is November 11, 2005, the date on which this Plan was deemed to be adopted by the Board of Directors. 
  

	4.	COMMON SHARES SUBJECT TO PLAN 

 4.1 Common Shares Subject to this Plan. The aggregate number of
Common Shares in respect of which Options may be granted pursuant to this Plan shall not exceed 1,000,000. The number of Common Shares in respect of which Options may be granted pursuant to this Plan may be increased, decreased or fixed by the Board
of Directors, as permitted under the applicable rules and regulations of all regulatory authorities to which the Company is subject, including the Stock Exchange. 

4.2 Regranting of Shares. Upon the expiry, termination or surrender of an Option which has not been exercised in full, the number of Common Shares
reserved for issuance under that Option which have not been issued shall become available for issue for the purpose of additional Options which may be granted under this Plan. 

4.3 Reservation of Shares. The Board of Directors will reserve for allotment from time to time out of the authorized but unissued Common Shares
sufficient Common Shares to provide for issuance of all Common Shares which are issuable under all outstanding Options. 
 4.4 No Fractional Shares.
No fractional Common Shares may be purchased or issued under this Plan. 
  

	5.	ADMINISTRATION OF PLAN 

 5.1 Administration of Plan. The Board of Directors may at any time
appoint a committee (the “Compensation Committee”) to, among other things, interpret, administer and implement this Plan on behalf of the Board of Directors in accordance with such terms and

  
 4 

 
conditions as the Board of Directors may prescribe, consistent with this Plan (provided that if at any such time such a committee has not been appointed by the Board of Directors, this Plan will
be administered by the Board of Directors, and in such event references herein to the Compensation Committee shall be construed to be a reference to the Board of Directors). The Board of Directors will take such steps which in its opinion are
required to ensure that the Compensation Committee has the necessary authority to fulfil its functions under this Plan. 
 5.2 Powers of Compensation
Committee. The Compensation Committee is authorized, subject to the provisions of this Plan, to establish from time to time such rules and regulations, make such determinations and to take such steps in connection with this Plan as in the
opinion of the Compensation Committee are necessary or desirable for the proper administration of this Plan. For greater certainty, without limiting the generality of the foregoing, the Compensation Committee will have the power, where consistent
with the general purpose and intent of this Plan and subject to the specific provisions of this Plan and any approval of the Stock Exchange, if applicable: 
  

	 	(a)	to interpret and construe this Plan and any Option Agreement and to determine all questions arising out of this Plan and any Option Agreement, and any such interpretation, construction or determination made by the
Compensation Committee will be final, binding and conclusive for all purposes; 

  

	 	(b)	to determine to which Eligible Persons Options are granted, and to grant, Options; 

  

	 	(c)	to determine the number of Common Shares covered by each Option; 

  

	 	(d)	to determine the Exercise Price for each Option; 

  

	 	(e)	to determine the time or times when Options will be granted, vest and be exerciseable and to determine when it is appropriate to accelerate when Options otherwise subject to vesting may be exercised; 

 

	 	(f)	to determine if the Common Shares that are subject to an Option will be subject to any restrictions or repurchase rights upon the exercise of such Option including, where applicable, the endorsement of a legend on any
certificate representing Common Shares acquired on the exercise of any Option to the effect that such Common Shares may not be offered, sold or delivered except in compliance with the applicable securities laws and regulations of Canada, the United
States or any other country and if any rights or restrictions exist they will be described in the applicable option agreement; 

  

	 	(g)	to determine the expiration date for each Option and to extend the period of time for which any Option is to remain exerciseable in appropriate circumstances, including, without limitation, in the event of the
Participant’s cessation of service or in the event of a prolonged Company-mandated trading restriction period, provided that such date may not be later than the earlier of (A) the date which is the
tenth anniversary of the date on which such Option is granted, and (B) the latest date permitted under the applicable rules and regulations of all regulatory authorities to which the Company is subject, including the Stock Exchange;

  
 5 

	 	(h)	to prescribe the form of the instruments relating to the grant, exercise and other terms of Options; 

  

	 	(i)	to enter into an Option Agreement evidencing each Option which will incorporate such terms as the Compensation Committee in its discretion deems consistent with this Plan; 

 

	 	(j)	to take such steps and require such documentation from Eligible Persons which in its opinion are necessary or desirable to ensure compliance with the rules and regulations of the Stock Exchange and all applicable laws;

  

	 	(k)	to adopt such modifications, procedures and subplans as may be necessary or desirable to comply with the provisions of the laws of Canada, the United States and other countries in which the Company or its Affiliates may
operate to ensure the viability and maximization of the benefits from the Options granted to Participants residing in such countries and to meet the objectives of this Plan; and 

 

	 	(l)	to determine such other matters as provided for herein. 

  

	6.	GRANT OF OPTIONS 

 Subject to the rules set out below, the Compensation Committee (or in
the case of any proposed Participant who is a member of the Compensation Committee, the Board of Directors) may from time to time grant to any Eligible Person one or more Options as the Compensation Committee deems appropriate: 

6.1 Date Option Granted. The date on which an Option will be deemed to have been granted under this Plan will be the date on which the Compensation
Committee authorizes the grant of such Option or such other date as may be specified by the Compensation Committee at the time of such authorization. 

6.2 Number of Common Shares/Maximum Grant. The number of Common Shares that may be purchased under any Option will be determined by the Compensation
Committee, provided that the number of Common Shares reserved for issuance to any one person pursuant to this Plan shall not, in aggregate, exceed 5% of the total number of Outstanding Common Shares. A Participant who holds Options at the time of
granting an Option, may hold more than one Option. 
 6.3 Exercise Price. The Exercise Price per Common Share under each Option will be the fair
market value of such shares at the time of grant, expressed in terms of money, as determined by the Compensation Committee, in its sole discretion, provided that such price may not be less than the lowest price permitted under the applicable rules
and regulations of all regulatory authorities to which the Company is subject, including the Stock Exchange. 
 6.4 Option Agreements. Each Option
will be evidenced by an Option Agreement which incorporates such terms and conditions as the Compensation Committee in its discretion deems appropriate and consistent with the provisions of this Plan (and the execution and delivery by the Company of
an Option Agreement with a Participant shall be conclusive evidence that 

  
 6 

 
such Option Agreement incorporates terms and conditions approved by the Compensation Committee and is consistent with the provisions of this Plan). Each Option Agreement will be executed by the
Participant to whom the Option is granted and on behalf of the Company by any member of the Compensation Committee or any officer of the Company or such other person as the Compensation Committee may designate for such purpose. 

6.5 Term of Options. Each Option will expire on the earlier of: 
  

	 	(a)	the date determined by the Compensation Committee and specified in the Option Agreement pursuant to which such Option is granted, provided that such date may not be later than the earlier of (A) the date which is
the tenth anniversary of the date on which such Option is granted, and (B) the latest date permitted under the applicable rules and regulations of all regulatory authorities to which the Company is subject, including the Stock Exchange;

  

	 	(b)	in the event the Participant ceases to be an Eligible Person for any reason, other than the death of the Participant or the termination of the Participant for cause, such period of time after the date on which the
Participant ceases to be an Eligible Person as may be specified by the Compensation Committee, which date shall not exceed three months following the termination of the Participant’s employment with the Company or in the case of options granted
to a director or Consultant, three months following the Participant ceasing to be a director or a Consultant, unless the Compensation Committee otherwise determines, and which period will be specified in the Option Agreement with the Participant
with respect to such Option; 

  

	 	(c)	in the event of the termination of the Participant as a director, officer, employee or Consultant of the Company or an Affiliate for cause, the date of such termination; 

 

	 	(d)	in the event of the death of a Participant prior to: (A) the Participant ceasing to be an Eligible Person; or (B) the date which is the number of days specified by the Compensation Committee pursuant to
subparagraph (b) above from the date on which the Participant ceased to be an Eligible Person; the date which is one year after the date of death of such Participant or such other date as may be specified by the Compensation Committee and which
period will be specified in the Option Agreement with the Participant with respect to such Option; and 

  

	 	(e)	notwithstanding the foregoing provisions of subparagraphs (b), (c) and (d) of this Section 6.5, the Compensation Committee may, subject to regulatory approval, at any time prior to expiry of an
Option extend the period of time within which an Option may be exercised by a Participant who has ceased to be an Eligible Person, but such an extension shall not be granted beyond the original expiry date of the Option as provided for in
subparagraph (a) above. 

 Notwithstanding the foregoing, except as expressly permitted by the Compensation Committee, all Options will
cease to vest as at the date upon which the Participant ceases to be an Eligible Person. 

  
 7 

 6.6 Change in Status. A change in the status, office, position or duties of a Participant from the status,
office, position or duties held by such Participant on the date on which the Option was granted to such Participant will not result in the termination of the Option granted to such Participant provided that such Participant remains a director,
officer, employee or Consultant of the Company or an Affiliate. 
 6.7 Non-Transferability of Options. Each Option Agreement will provide that the
Option granted thereunder is not transferable or assignable and may be exercised only by the Participant or, in the event of the death of the Participant or the appointment of a committee or duly appointed attorney of the Participant or of the
estate of the Participant on the grounds that the Participant is incapable, by reason of physical or mental infirmity, of managing their affairs, the Participant’s legal representative or such committee or attorney, as the case may be (the
“Legal Representative”). 
 6.8 Representations and Covenants of Participants. Each Option Agreement will contain representations and
covenants of the Participant that: 
  

	 	(a)	the Participant is a director, officer, employee, or Consultant of the Company or an Affiliate or a person otherwise approved as an “Eligible Person” under this Plan by the Compensation Committee;

  

	 	(b)	the Participant has not been induced to enter into such Option Agreement by the expectation of employment or continued employment with the Company or an Affiliate; 

 

	 	(c)	the Participant is aware that the grant of the Option and the issuance by the Company of Common Shares thereunder are exempt from the obligation under applicable securities laws to file a prospectus or other
registration document qualifying the distribution of the Options or the Common Shares to be distributed thereunder under any applicable securities laws; 

  

	 	(d)	upon each exercise of an Option, the Participant, or the Legal Representative of the Participant, as the case may be, will, if requested by the Company, represent and agree in writing that the person is, or the
Participant was, a director, officer, employee or Consultant of the Company or an Affiliate or a person otherwise approved as an “Eligible Person” under this Plan by the Compensation Committee and has not been induced to purchase the
Common Shares by expectation of employment or continued employment with the Company or an Affiliate, and that such person is not aware of any commission or other remuneration having been paid or given to others in respect of the trade in the Common
Shares; and 

  

	 	(e)	 if the Participant or the Legal Representative of the Participant exercises the Option, the Participant or the Legal Representative, as the case may
be, will prior to and upon any sale or disposition of any Common Shares purchased pursuant to the exercise of the Option, comply with all applicable securities laws and all applicable rules and regulations of all regulatory authorities to which the
Company is subject, including the Stock Exchange, and will not offer, sell or 

  
 8 

	 	
deliver any of such Common Shares, directly or indirectly, in the United States or to any citizen or resident of, or any Company, partnership or other entity created or organized in or under the
laws of, the United States, or any estate or trust the income of which is subject to United States federal income taxation regardless of its source, except in compliance with the securities laws of the United States. 

6.9 Provisions Relating to Share Issuances. Each Option Agreement will contain such provisions as in the opinion of the Compensation Committee are
required to ensure that no Common Shares are issued on the exercise of an Option unless the Compensation Committee is satisfied that the issuance of such Common Shares will be exempt from all registration or qualification requirements of applicable
securities laws and will be permitted under the applicable rules and regulations of all regulatory authorities to which the Company is subject, including the Stock Exchange. In particular, if required by any regulatory authority to which the Company
is subject, including the Stock Exchange, an Option Agreement may provide that shareholder approval to the grant of an Option must be obtained prior to the exercise of the Option or to the amendment of the Option Agreement. 

 

	7.	U.S. QUALIFIED INCENTIVE STOCK OPTION PROVISIONS 

 To the extent required by
Section 422 of the U.S. Internal Revenue Code, U.S. Qualified Incentive Stock Options shall be subject to the following additional terms and conditions and if there is any conflict between the terms of this Article and other provisions under
this Plan, the provisions under this Article shall prevail: 
 7.1 Eligible Employees. All classes of employees of the Company or one of its parent
corporations or subsidiary corporations may be granted U.S. Qualified Incentive Stock Options. U.S. Qualified Incentive Stock Options shall only be granted to U.S. Optionees who are, at the time of grant, officers, key employees or directors of the
Company or one of its parent corporations or subsidiary corporations (provided, for purposes of this Article 7 only, such directors are then also officers or key employees of the Company or one of its parent corporations or subsidiary corporations).
For purposes of this Article 7, “parent corporation” and “subsidiary corporation” shall have the meanings attributed to those terms for the purposes of Section 422 of the U.S. Internal Revenue Code. Any director of the
Company who is a U.S. Optionee shall be ineligible to vote upon the granting of such Option; and for greater certainty, contractors of the Company or subsidiary corporations may not be granted U.S. Qualified Incentive Stock Options. 

7.2 Dollar Limitation. To the extent the aggregate fair market value (determined as of the grant date) of Common Shares with respect to which U.S.
Qualified Incentive Stock Options are exercisable for the first time by a U.S. Optionee during any calendar year (under this Plan and all other stock option plans of the Company) exceeds U.S. $100,000, such portion in excess of U.S. $100,000 shall
be treated as a U.S. Nonqualified Stock Option. In the event the U.S. Optionee holds two or more such Options that become exercisable for the first time in the same calendar year, such limitation shall be applied on the basis of the order in which
such Options are granted. 

  
 9 

 7.3 10% Shareholders. If any U.S. Optionee to whom an U.S. Qualified Incentive Stock Option is to be
granted under this Plan at the time of the grant of such U.S. Qualified Incentive Stock Option is the owner of shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company, then the
following special provisions shall be applicable to the U.S. Qualified Incentive Stock Option granted to such individual: 
  

	 	(i)	the Exercise Price (per Common Share) subject to such U.S. Qualified Incentive Stock Option shall not be less than one hundred ten percent (110%) of the fair market value of one Common Share at the time of grant;
and 

  

	 	(ii)	for the purposes of this Article 7 only, the option exercise period shall not exceed five (5) years from the date of grant. 

The determination of 10% ownership shall be made in accordance with Section 422 of the U.S. Internal Revenue Code. 

7.4 Exercisability. To qualify for U.S. Qualified Incentive Stock Option tax treatment, an Option designated as a U.S. Qualified Incentive Stock Option
must be exercised within three months after termination of employment for reasons other than death, except that, in the case of termination of employment due to total disability, such Option must be exercised within one year after such termination.
Employment shall not be deemed to continue beyond the first 90 days of a leave of absence unless the U.S. Optionee’s reemployment rights are guaranteed by statute or contract. For purposes of this Section 7.4, “total disability”
shall mean a mental or physical impairment of the U.S. Optionee which is expected to result in death or which has lasted or is expected to last for a continuous period of 12 months or more and which causes the U.S. Optionee to be unable, in the
opinion of the Company and two independent physicians, to perform his or her duties for the Company and to be engaged in any substantial gainful activity. Total disability shall be deemed to have occurred on the first day after the Company and the
two independent physicians have furnished their opinion of total disability to the Compensation Committee. 
 7.5 Taxation of U.S. Qualified Incentive
Stock Options. In order to obtain certain tax benefits afforded to U.S. Qualified Incentive Stock Options under Section 422 of the U.S. Internal Revenue Code, the U.S. Optionee must hold the Common Shares issued upon the exercise of a U.S.
Qualified Incentive Stock Option for two years after the date of grant of the U.S. Qualified Incentive Stock Option and one year from the date of exercise. A U.S. Optionee may be subject to U.S. alternative minimum tax at the time of exercise of a
U.S. Qualified Incentive Stock Option. The Compensation Committee may require a U.S. Optionee to give the Company prompt notice of any disposition of shares acquired by the exercise of a U.S. Qualified Incentive Stock Option prior to the expiration
of such holding periods. 
 7.6 Transferability. No U.S. Qualified Incentive Stock Option granted under this Plan may be assigned or transferred by
the U.S. Optionee other than by will or by the laws of descent and distribution, and during the U.S. Optionee’s lifetime, such U.S. Qualified Incentive Stock Option may be exercised only by the U.S. Optionee. 

  
 10 

 7.7 Compensation Committee Governance if U.S. Registrant. If and so long as the Common Shares are
registered under Section 12(b) or 12(g) of the U.S. Securities Exchange Act, the Board of Directors will consider in selecting the members of the Compensation Committee, with respect to any persons subject or likely to become subject to
Section 16 of the U.S. Securities Exchange Act, the provisions regarding “nonemployee directors” as contemplated by Rule 16b-3 under the U.S. Securities Exchange Act. 

7.8 Exercise Price. Notwithstanding Section 6.3, no U.S. Qualified Incentive Stock Option granted under the Plan shall have an Exercise Price less
than the fair market value of the underlying Common Shares at the date of grant of such Option, as determined at such time in good faith by the Board or Directors or the Compensation Committee, as the case may be. 

7.9 Approval by Shareholders. No U.S. Qualified Incentive Stock Option granted to a U.S. Optionee under this Plan shall become exercisable unless and
until this Plan shall have been approved by the shareholders of the Company within 12 months of approval by the Board of Directors of the Company. 

7.10 Option Agreements. Each Option will be evidenced by an Option Agreement which incorporates such terms and conditions as the Compensation Committee
in its discretion deems appropriate and consistent with the provisions of this Plan (and the execution and delivery by the Company of an Option Agreement with a Participant shall be conclusive evidence that such Option Agreement incorporates terms
and conditions approved by the Compensation Committee and is consistent with the provisions of this Plan). Each Option Agreement will be executed by the Participant to whom the Option is granted and on behalf of the Company by any member of the
Compensation Committee or any officer of the Company or such other person as the Compensation Committee may designate for such purpose. Each Option Agreement will specify the reasons for the Company granting Options to such Participant. 

 

	8.	EXERCISE OF OPTIONS 

 8.1 Exercise of Options. Subject to the terms and conditions of this Plan,
the Compensation Committee may impose such limitations or conditions on the exercise or vesting of any Option as the Compensation Committee in its discretion deems appropriate, including limiting the number of Common Shares for which any Option may
be exercised during any period as may be specified by the Compensation Committee and which number of Common Shares for which such Option may be exercised in any period will be specified in the Option Agreement with respect to such Option. Each
Option Agreement will provide that the Option granted thereunder may be exercised only by notice signed by the Participant or the Legal Representative of the Participant and accompanied by full payment for the Common Shares being purchased. Such
consideration may be paid in any combination of the following: 
  

	 	(a)	cash, bank draft or certified cheque; or 

  

	 	(b)	such other consideration as the Compensation Committee may permit consistent with applicable laws. 

  
 11 

 As soon as practicable after any exercise of an Option, a certificate or certificates representing the Common
Shares in respect of which such Option is exercised will be delivered by the Company to the Participant. 
 8.2 Withholding Tax. The Participant will
be solely responsible for paying any applicable withholding taxes arising from the grant, vesting or exercise of any Option and payment is to be made in a manner satisfactory to the Company. Notwithstanding the foregoing, the Company will have the
right to withhold from any Option or any Common Shares issuable pursuant to an Option or from any cash amounts otherwise due or to become due from the Company to the Participant, an amount equal to any such taxes. 

8.3 Conditions. Notwithstanding any of the provisions contained in this Plan or in any Option Agreement, the Company’s obligation to issue Common
Shares to a Participant pursuant to the exercise of an Option will be subject to, if applicable: 
  

	 	(a)	completion of such registration or other qualification of such Common Shares or obtaining approval of such governmental authority as the Company will determine to be necessary or advisable in connection with the
authorization, issuance or sale thereof; 

  

	 	(b)	the admission of such Common Shares to listing or quotation on the Stock Exchange; and 

  

	 	(c)	the receipt from the Participant of such representations, agreements and undertakings, including as to future dealings in such Common Shares, as the Company or its counsel determines to be necessary or advisable in
order to safeguard against the violation of the securities laws of any jurisdiction. 

  

	9.	SUSPENSION, AMENDMENT OR TERMINATION OF PLAN 

 9.1 Suspension, Amendment or Termination of Plan.
This Plan will terminate on the tenth anniversary of the Effective Date. The Compensation Committee will have the right at any time to suspend, amend or terminate this Plan in any manner including, without limitation, to reflect any requirements of
any regulatory authorities to which the Company is subject, including the Stock Exchange, and on behalf of the Company agree to any amendment to any Option Agreement provided that the Compensation Committee in its discretion deems such amendment
consistent with the terms of this Plan and all procedures and necessary approvals required under the applicable rules and regulations of all regulatory authorities to which the Company is subject are complied with and obtained, but the Compensation
Committee will not have the right to: 
  

	 	(a)	affect in a manner that is adverse or prejudicial to, or that impairs, the benefits and rights of any Participant under any Option previously granted under this Plan (except as permitted pursuant to Article 10 and
except for the purpose of complying with applicable securities laws or the bylaws, rules and regulations of any regulatory authority to which the Company is subject, including the Stock Exchange); 

  
 12 

	 	(b)	decrease the number of Common Shares which may be purchased pursuant to any Option (except as permitted pursuant to Article 10) without the consent of such Participant; 

 

	 	(c)	increase the Exercise Price at which Common Shares may be purchased pursuant to any Option (except as permitted pursuant to Article 10) without the consent of such Participant; 

 

	 	(d)	extend the term of any Option beyond a period of ten years or the latest date permitted under the applicable rules and regulations of all regulatory authorities to which the Company is subject, including the Stock
Exchange; 

  

	 	(e)	grant any Option if this Plan is suspended or has been terminated; or 

  

	 	(f)	change or adjust any outstanding U.S. Qualified Incentive Stock Option without the consent of the Participant if such change or adjustment would constitute a “modification” that would cause such U.S. Qualified
Incentive Stock Option to fail to continue to qualify as a U.S. Qualified Incentive Stock Option. 

 9.2 Powers of Compensation Committee
Survive Termination. The full powers of the Compensation Committee as provided for in this Plan will survive the termination of this Plan until all Options have been exercised in full or have otherwise expired. 

 

	10.	ADJUSTMENTS 

 10.1 Adjustments. Appropriate adjustments in the number of Common Shares subject to
this Plan, as regards Options granted or to be granted, in the number of Common Shares optioned and the applicable Exercise Price will be conclusively determined by the Compensation Committee to give effect to adjustments in the number of Common
Shares resulting from subdivisions, consolidations, substitutions, or reclassifications of the Common Shares, the payment of stock dividends by the Company (other than dividends in the ordinary course) or other relevant changes in the capital of the
Company or from a proposed merger, amalgamation or other corporate arrangement or reorganization involving the exchange or replacement of Common Shares of the Company for those in another corporation. Any dispute that arises at any time with respect
to any such adjustment will be conclusively determined by the Compensation Committee, and any such determination will be binding on the Company, the Participant and all other affected parties. 

10.2 Merger and Acquisition Transaction. In the event of a Merger and Acquisition Transaction or proposed Merger and Acquisition Transaction, the
Compensation Committee, at its option, may do any of the following: 
  

	 	(a)	the Compensation Committee may, in a fair and equitable manner, determine the manner in which all unexercised option rights granted under this Plan will be treated including, without limitation, requiring the
acceleration of the time for the exercise of such rights by the Participants, the time for the fulfilment of any conditions or restrictions on such exercise, and the time for the expiry of such rights; or 

  
 13 

	 	(b)	the Compensation Committee or any corporation which is or would be the successor to the Company or which may issue securities in exchange for Common Shares upon the Merger and Acquisition Transaction becoming effective
may offer any Participant the opportunity to obtain a new or replacement option over any securities into which the Common Shares are changed or are convertible or exchangeable, on a basis proportionate to the number of Common Shares under option and
the Exercise Price (and otherwise substantially upon the terms of the Option being replaced, or upon terms no less favourable to the Participant) including, without limitation, the periods during which the Option may be exercised and expiry dates;
and in such event, the Participant shall, if he accepts such offer, be deemed to have released his Option over the Common Shares and such Option shall be deemed to have lapsed and be cancelled; or 

 

	 	(c)	the Compensation Committee may commute for or into any other security or any other property or cash, any Option that is still capable of being exercised, upon giving to the Participant to whom such Option has been
granted at least 30 days written notice of its intention to commute such Option, and during such period of notice, the Option, to the extent it has not been exercised, may be exercised by the Participant without regard to any vesting conditions
attached thereto; and on the expiry of such period of notice, the unexercised portion of the Option shall lapse and be cancelled. 

Section 10.1 and subsections (a), (b) and (c) of this Section 10.2 are intended to be permissive and may be utilized independently or
successively in combination or otherwise, and nothing therein contained shall be construed as limiting or affecting the ability of the Compensation Committee to deal with Options in any other manner. All determinations by the Compensation Committee
under this Section will be final, binding and conclusive for all purposes. 
 10.3 Limitations. The grant of Options under this Plan will in no way
affect the Company’s right to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, amalgamate, reorganize, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or
assets or engage in any like transaction. 
 10.4 No Fractional Shares. No adjustment or substitution provided for in this Article 10 will require
the Company to issue a fractional share in respect of any Option and the total substitution or adjustment with respect to each Option will be limited accordingly. 
  

	11.	GENERAL 

 11.1 No Rights as Shareholder. Nothing herein or otherwise shall be construed so
as to confer on any Participant any rights as a shareholder of the Company with respect to any Common Shares reserved for the purpose of any Option. 

11.2 No Effect on Employment. Nothing in this Plan or any Option Agreement will confer upon any Participant any right to continue in the employ of or
under contract with the Company or an Affiliate or affect in any way the right of the Company or any such Affiliate to terminate his or her employment at any time or terminate his or her consulting contract; nor will

  
 14 

 
anything in this Plan or any Option Agreement be deemed or construed to constitute an agreement, or an expression of intent, on the part of the Company or any such Affiliate to extend the
employment of any Participant beyond the time that he or she would normally be retired pursuant to the provisions of any present or future retirement plan of the Company or an Affiliate or any present or future retirement policy of the Company or an
Affiliate, or beyond the time at which he or she would otherwise be retired pursuant to the provisions of any contract of employment with the Company or an Affiliate. Neither any period of notice nor any payment in lieu thereof upon termination of
employment shall be considered as extending the period of employment for the purposes of the Plan. 
 11.3 No Fettering of Directors’
Discretion. Nothing contained in this Plan will restrict or limit or be deemed to restrict or limit the right or power of the Board of Directors in connection with any allotment and issuance of Common Shares which are not allotted and issued
under this Plan including, without limitation, with respect to other compensation arrangements. 
 11.4 Applicable Law. The Plan and any Option
Agreement granted hereunder will be governed, construed and administered in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein. 

11.5 Interpretation. References herein to any gender include all genders and to the plural includes the singular and vice versa. The division of this
Plan into Sections and Articles and the insertion of headings are for convenience of reference only and will not affect the construction or interpretation of this Plan. 

11.6 Reference. This Plan may be referred to as the “XBiotech 2005 Incentive Stock Option Plan”. 

  
 15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00239-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00239-of-00352.parquet"}]]