Document:

Exhibit

SEPARATION AGREEMENT & RELEASE OF ALL CLAIMS
_____________________________________________________________________

This Separation Agreement & Release of All Claims (“Separation Agreement”) is entered into by and between JUSTIN HEWETT (“ASSOCIATE”), Tupperware Brands Corporation, and all of its related and affiliated companies, their predecessors, successors, subsidiaries, and divisions (“Tupperware”).  

1.    Separation Date.   ASSOCIATE'S employment with Tupperware will be terminated effective April 2, 2020 (“Separation Date”).  ASSOCIATE will be given a four weeks notice (“Notice Period”) and will remain on Tupperware’s payroll until April 30, 2020 (“Last Day of Work”). All active employee benefit accruals will cease as of the Separation Date. Until the Separation Date, ASSOCIATE will continue to receive his/her current compensation on the usual cycle.

2.    Additional Separation Benefits.  In consideration for ASSOCIATE'S execution of this Separation Agreement and the adherence to its provisions, Tupperware agrees to provide ASSOCIATE with the following additional benefits to which ASSOCIATE would not otherwise be entitled (“Additional Benefits”):

		
	a.
	In lieu of serving the Notice Period, a payment of four (4) weeks of pay at the rate of the base pay ASSOCIATE was earning on ASSOCIATE’S Separation Date, shall be paid in installment on Tupperware’s usual payroll dates.  This will be considered part of the severance payment;

		
	b.
	A payment equal to forty eight (48) weeks of pay at the rate of the base pay ASSOCIATE was earning on ASSOCIATE’S Last Day of Work, which shall be paid in a lump sum, less applicable taxes.  This lump sum amount shall be paid after April 30, 2020, the first week of May in 2020;

		
	c.
	A payment equal to eleven (11) months of ASSOCIATE’S car allowance as of ASSOCIATE’S Last Day of Work, which shall be paid in a lump sum, less applicable taxes, after April 30, 2020, the first week of May in 2020;

		
	d.
	If bonus payments are earned and approved in accordance with the terms of the 2020 Annual Incentive Plan (“AIP”), ASSOCIATE will be eligible for the bonus, subject to the AIP provisions and current Tupperware policies relating thereto, except that Tupperware will waive the requirement that ASSOCIATE be an active employee on the date the AIP bonus is paid - if such bonus payments are earned and approved, Tupperware agrees to pay ASSOCIATE such bonus no later than March 30, 2021;

		
	e.
	Twelve (12) months of executive outplacement services - details will be furnished to ASSOCIATE under separate cover - that must be used no later than December 31, 2020.

		
	f.
	ASSOCIATE will be reimbursed for actual expenses incurred for Executive Financial Planning services for Tax Year 2020 up to the allowed annual gross benefit of five thousand five hundred dollars ($5,500 USD); 

		
	g.
	ASSOCIATE will be reimbursed for actual expense incurred for any lease breakage up to two-months against proof of receipt.

		
	h.
	Any allowances paid as a result of ASSOCIATE’s assignment will cease as of Separation Date; 

		
	i.
	Stock option vesting and exercisability rights to which ASSOCIATE will be entitled based on ASSOCIATE’S current age and service level will be communicated under separate cover; 

		
	j.
	ASSOCIATE will be repatriated back to his home country of his choice within 30 days from the separation date of the ASSOCIATE notifying Tupperware of his decision in writing to return to his home country provided that such date shall not be later than  or until December 31, 2020 provided that ASSOCIATE is authorized to stay in Singapore. Tupperware will cover the cost of shipment of household goods and a one-way airline ticket for the ASSOCIATE and the his immediate family members, spouse, and children;

		
	k.
	Tupperware will continue paying all premiums related to the ASSOCIATE’s current medical insurance with CIGNA Singapore for a period of twelve (12) months, beginning on the Separation Date; .

		
	l.
	Tupperware will provide ASSOCIATE with tax preparation support with Deloitte in Singapore for 2020.   

 

Any amounts due or payable to ASSOCIATE under this Separation Agreement will be subject to deductions for any amounts owed by ASSOCIATE to Tupperware and/or any subsidiaries and related companies, including, but not limited to, any outstanding advances, unless otherwise specified herein.  Deductions with respect to amounts owed by ASSOCIATE to Tupperware shall only be made to the amounts due or payable to ASSOCIATE under the Separation Agreement in accordance with Treasury Regulation §1.409A-3(j)(4)(xiii).  Tupperware will withhold from any payment of amounts due or payable to ASSOCIATE hereunder any taxes that may be due in respect of such payment in such amount as Tupperware may reasonably estimate to be necessary.  Tupperware will pay any balance to ASSOCIATE under the provisions of this Separation Agreement and will give ASSOCIATE documentation identifying any amounts withheld and the balance to be paid.  

3.         Release of All Claims.   For and in consideration of the payment to ASSOCIATE of the Additional Benefits set forth in paragraph 2 above, which ASSOCIATE acknowledges constitutes good, sufficient and valuable consideration, over and above any consideration to which ASSOCIATE is otherwise entitled, ASSOCIATE hereby irrevocably and unconditionally, except as provided herein, agrees to waive and release Tupperware and the other Released Parties (as defined below) from all actions, causes of action, claims and demands whatsoever, whether in law or in equity and whether currently known or unknown, arising from or related to any act, omission, or thing occurring or existing at any time on or prior to the date of the execution of this Separation Agreement.  This release of all claims includes, without limitation, all claims under Title VII of the Civil Rights Acts of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967 as amended (“ADEA”), the Americans with Disabilities Act (“ADA”), the Family and Medical Leave Act (“FMLA”), the Employee Retirement Income Security Act of 1974 (“ERISA”), the Worker Adjustment and Retraining Notification Act (“WARN Act”), the Equal Pay Act, the Fair, Labor Standards Act (“FLSA”), Executive Order 11246, the Vietnam Era Veterans Readjustment Assistance Act, the Fair Credit Reporting Act, the Occupational Safety and Health Act (“OSHA”), the Sarbanes-Oxley Act of 2002 (“SOX”), the Florida Civil Rights Act (FCRA), the Florida Workers' Compensation Law Retaliation Act (FWCA), the Florida Minimum Wage Act, the Florida Constitution and any other federal or state employment laws in the United States, and any other comparable laws or regulations in the country of ASSOCIATE’s current or prior employment, as each may be amended from time to time and all other claims for employment discrimination, harassment, retaliation or wrongful  termination, all claims related to or arising out of ASSOCIATE'S employment with Tupperware, including any claims under the Tupperware Brands Corporation Severance Pay Plan, all claims for compensation of any kind, and all claims under any other federal, state or local law, regulation, ordinance, common law doctrine or other source of law, including in any other country of ASSOCIATE’s current or prior employment.  This release of all claims does not apply to claims arising after the date of this Separation Agreement.

ASSOCIATE is not waiving any rights that he/she may have to: (a) his/her own vested accrued employee benefits under Tupperware’s health, welfare, or retirement benefit plans as of the Separation Date; (b) benefits and/or the right to seek benefits under applicable workers’ compensation and/or unemployment compensation statutes; (c) pursue claims which by law cannot be waived by signing this Separation Agreement; (d) enforce this Separation Agreement; and/or (e) challenge the validity of this Separation Agreement.  Nothing in this Separation Agreement prohibits or prevents ASSOCIATE from filing a charge with or participating, testifying, or assisting in any investigation, hearing, whistleblower proceeding or other proceeding before any federal, state, or local government agency (e.g., EEOC, NLRB, SEC, etc.), nor does anything in this Separation Agreement preclude, prohibit, or otherwise limit, in any way, ASSOCIATE’S rights and abilities to contact, communicate with, report matters to, or otherwise participate in any whistleblower program administered by any such agencies. 

ASSOCIATE confirms that he/she has not filed any legal proceeding(s) against any of the Released Parties, is the sole owner of the claims released herein, has not transferred any such claims to anyone else, and has the full right to grant the releases and agreements in this Separation Agreement.  In the event of any further proceedings based upon any released matter, ASSOCIATE agrees that the Released Parties shall not have any further monetary or other obligation to ASSOCIATE.  

“Released Parties” include:  (a) Tupperware, Tupperware U.S., Inc. and Premiere Products Brands of Canada, Ltd., (b) each of their past, present and future parents, subsidiaries, divisions, partnerships, affiliates and other related entities, (c) each of their past, present and future owners, directors, officers, trustees, fiduciaries, shareholders, administrators, agents, employees, partners, members, associates and attorneys, and (d) the predecessors, successors and assigns of each of the foregoing persons and entities.

ASSOCIATE confirms that he/she has received all leave (paid or unpaid), compensation, wages, bonuses, commissions and/or benefits to which ASSOCIATE is entitled, except as may be provided by this Separation Agreement.  ASSOCIATE further confirms that he/she has no known, unreported workplace injuries or occupational diseases and has been provided and/or has not been denied any leave requested under the Family and Medical Leave Act or any other similar law.

ASSOCIATE makes this waiver with the full knowledge of his/her rights and with specific intent to release both known and unknown claims.  

4.    Confidentiality.  ASSOCIATE acknowledges that he/she may have knowledge of highly sensitive proprietary and non-public material inside information concerning Tupperware and is bound by Tupperware’s Code of Conduct and incorporated confidentiality policy. ASSOCIATE agrees that the information protected as confidential includes, without limitation: the existence of this Separation Agreement, including any or all of the terms and conditions or benefits herein; Tupperware’s customer and vendor lists and strategies; databases; computer programs; distributor and dealer lists and strategies; marketing and new product programs; research and development, sales, financial pricing, margin, contract, promotional, training and technical information; information about the abilities, compensation and career paths of other employees of Tupperware; and any other information, whether communicated orally, electronically, in writing, or in other tangible forms, concerning how Tupperware creates, develops, acquires or maintains its products and its marketing and distribution plans, compensates or is considering compensating its independent sales force, or targets its potential customers.  ASSOCIATE understands that the Tupperware confidentiality policy applies both during ASSOCIATE'S employment and following the Separation Date, and applies to proprietary information, intellectual property, and security law matters.

ASSOCIATE acknowledges and agrees that unauthorized use or disclosure of the above-described confidential information is not only a violation of Tupperware policy and this Separation Agreement, but could result in the violation of U.S. securities and other laws, as well as the civil law and common law principles in other countries.  Except for confidential information which ASSOCIATE is required to divulge pursuant to legal process or which has previously been publicly disclosed by someone other than ASSOCIATE, ASSOCIATE agrees not to use for his/her own benefit, or to divulge to any person or entity any of such information without the express prior written authorization of Tupperware, by its Executive Vice President & Chief Talent and Engagement Officer. ASSOCIATE agrees not to discuss the contents of this Separation Agreement, or any discussions in connection with this Separation Agreement, with anyone other than ASSOCIATE'S spouse/partner and those professionals who advise ASSOCIATE in connection with his/her legal and financial affairs, or as required by law.

5.    Non-Competition.  ASSOCIATE agrees that the business of Tupperware is worldwide in scope and that activities undertaken by competitors anywhere in the world can jeopardize Tupperware’s business.  ASSOCIATE agrees that during the full term of the payments under the Separation Agreement not to engage directly or indirectly in any direct selling company competitive with Tupperware on a product-basis or sales-force basis, whether as an officer, director, employee, consultant, partner, agent or stockholder (except as a holder of not more than one percent of the stock of any publicly-held corporation), or in any other fashion, whether or not fees are received directly or indirectly by ASSOCIATE, except with the express prior written consent of Tupperware, which consent may be provided orally by the Executive Vice President & Chief Talent and Engagement Officer of Tupperware Brands Corporation, followed by written confirmation. Notwithstanding this provision, ASSOCIATE agrees to comply with any more restrictive non-compete covenant contained in any agreement ASSOCIATE previously signed as a condition of hire, continued employment, or as a condition to the receipt of Additional Benefits outlined herein, unless Tupperware, in a writing signed by its Executive Vice President & Chief Talent and Engagement Officer, waives its right to enforce same.

6.    Non-Disparagement/Cooperation. ASSOCIATE agrees and understands that, except as may otherwise be required as a matter of law, at no time will ASSOCIATE make any disparaging comment, announcement or disclosure with regard to Tupperware Brands Corporation, its subsidiaries, affiliates, officers, directors, employees, or agents.  ASSOCIATE agrees to cooperate with Tupperware in the orderly transfer of duties and records to appropriate personnel and in such matters as Tupperware may request subsequent to the Separation Date.  Tupperware agrees to respond to any and all employment inquiries by providing dates of employment, date of resignation, job titles, job duties and salary verification.  

7.    Non-Recruiting/Non-Solicitation.   ASSOCIATE agrees that disruption of Tupperware’s business by multiple employee (or independent sales persons) departures can be costly and injurious to Tupperware. In order to protect Tupperware’s trade secrets, confidential information and business relationships and to prevent disruption of Tupperware’s business, ASSOCIATE agrees not to directly or indirectly act as an independent distributor or dealer for another direct selling company, or directly or indirectly offer employment to, contract with or recruit for employment or independent service with another employer, any employee of Tupperware or any of its operating units, or any person in the distribution channel (including but not limited to independent distributors or other sales force representatives) except with the express prior written consent of Tupperware. In the event that an employee of Tupperware is terminated for any reason, voluntarily resigns from Tupperware, or severs employment with Tupperware by mutual agreement, ASSOCIATE agrees not to offer employment or enter into a partnership, joint venture, or other ownership position with such terminated employee without the express prior written consent of the Chief Executive Officer of Tupperware. This non-recruiting agreement shall be effective during the full term of payments being made under the Separation Agreement.  Notwithstanding this provision, ASSOCIATE agrees to comply with any more restrictive non-solicitation covenant contained in any agreement ASSOCIATE previously signed as a condition of hire or continued employment, unless Tupperware in writing signed by its Executive Vice President & Chief Human Resources Officer waives its right to enforce same.

8.    Property of Tupperware.   ASSOCIATE agrees to return all property of Tupperware effective on the Last Day of Work, including, but not limited to, building passes, credit cards, keys, telephones, company files, documents, records, computer 

access codes, computer programs, instruction manuals, business plans, and other property that ASSOCIATE received, prepared, or helped to prepare in connection with his/her employment with Tupperware.

9.    Consideration and Right to Revoke.  ASSOCIATE acknowledges that he/she was provided with twenty-one (21) days to sign this Separation Agreement, which then must be returned to Lillian Garcia, Executive Vice President, Talent & Engagement, Worldwide, 14901 South Orange Blossom Trail, Orlando, FL 32837.  ASSOCIATE may revoke the Separation Agreement within seven (7) days of its execution by either postmarking and mailing or express (overnight) mailing to Lillian Garcia at the above-noted address a written notice of revocation on or prior to the expiration of the seven-day revocation period.  The Separation Agreement will not become effective until the seven-day revocation period has expired without ASSOCIATE revoking the Separation Agreement. If the last day of the revocation period falls on a Saturday, Sunday or legal holiday in Florida, then the revocation period is extended to the next day which is not a Saturday, Sunday or legal holiday.

10.    Binding and Enforceable Agreement.  This Separation Agreement shall be governed by the laws of state of Florida and is accepted and executed by the parties under Florida law.  All payments hereunder shall comply with the requirements of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations promulgated thereunder.  Notwithstanding the foregoing, under no circumstances shall Tupperware be responsible for any taxes, penalties, interest or other losses or expenses incurred by ASSOCIATE due to any failure to comply with section 409A of the Code.  If any part of the Separation Agreement is found to be illegal or invalid and cannot be modified to render it valid and enforceable, excluding the release of all claims, such provision shall immediately be null and void leaving the rest of the Separation Agreement in full force and effect.  By signing this Separation Agreement, ASSOCIATE also acknowledges that:

		
	a.
	ASSOCIATE has read and understands all the provisions of the Separation Agreement and has not been coerced or threatened into signing it;

		
	b.
	Tupperware has advised ASSOCIATE to consult with an attorney prior to signing the Separation Agreement and its incorporated release of all claims;

		
	c.
	ASSOCIATE has not relied on any representations, promises, or agreements of any kind made in connection with the Separation Agreement, except for those specifically set forth in this Separation Agreement; and

		
	d.
	Except with respect to statutorily protected rights which cannot be waived, ASSOCIATE agrees that he/she will not in the future file any claim, charge, complaint, or action in any forum relating to ASSOCIATE'S employment with or separation from Tupperware.  Unless otherwise set forth in this Agreement, if ASSOCIATE violates the release of all claims incorporated in this Separation Agreement by bringing a claim, charge, complaint, or action against Tupperware or any of the Released Parties and Tupperware is compelled to defend itself as a result, ASSOCIATE agrees that he/she shall be liable for all attorneys' fees and costs incurred by Tupperware. ASSOCIATE also agrees that he/she shall not be entitled to recover any relief or recovery, including costs and attorneys’ fees, should ASSOCIATE exercise a statutorily protected right to file a claim, charge, complaint, or action.

11.    Disputes.  By signing this Separation Agreement, ASSOCIATE agrees to resolve any dispute or claim arising out of or relating to termination, this Separation Agreement or its breach through good faith negotiation. If the Parties are unsuccessful at resolving the dispute, they agree to binding arbitration administered by JAMS pursuant to its Employment Arbitration Rules & Procedures and subject to JAMS’ Policy on Employment Arbitration Minimum Standards of Procedural Fairness.  Judgment on any award may be entered in any court having jurisdiction.  ASSOCIATE understands that pursuant to this Agreement, ASSOCIATE is giving up the right to a trial by jury.

12.    Collective/Class Action Waiver.  If any claim is not subject to release, to the extent permitted by law, ASSOCIATE waives any right or ability to be a class action or collective action representative or to otherwise participate in any putative or certified class, collective or multi-party action or proceeding based on such a claim in which Tupperware or any other Releasee identified in this Separation Agreement is a party.

13.    Miscellaneous.

		
	a.
	This Separation Agreement may be signed in counterparts, both of which shall be deemed an original, but both of which, taken together shall constitute the same instrument.  A signature made on a faxed or electronically mailed copy of the Separation Agreement or a signature transmitted by facsimile or electronic mail shall have the same effect as the original signature.

		
	b.
	The section headings used in this Separation Agreement are intended solely for convenience of reference and shall not in any manner amplify, limit, modify or otherwise be used in the interpretation of any of the provisions hereof.

		
	c.
	Nothing in this Separation Agreement shall be construed as an admission by Tupperware of any wrongdoing, liability, or noncompliance with any federal, state, city, or local rule, ordinance, statute, common law or other legal obligation.

		
	d.
	This Separation Agreement shall be binding upon the undersigned and their respective heirs, personal representatives, executors, administrators, successors, transferees, assigns, agents and attorneys.

		
	e.
	This Separation Agreement sets forth the entire agreement between Tupperware and ASSOCIATE and supersedes any prior agreements or understanding between the parties except for any post termination obligations or restrictive covenants in any other agreement in effect between ASSOCIATE and Tupperware, which are incorporated herein by reference and shall remain in full force and effect.

IN CONSIDERATION OF THE COMMITMENTS MADE BY Tupperware HEREIN, ASSOCIATE KNOWINGLY AND VOLUNTARILY AGREES TO THE PROVISIONS OF THIS Separation Agreement & RELEASE OF ALL CLAIMS.  ASSOCIATE IS SIGNING THIS Separation agreement VOLUNTARILY, WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE, AND WITH THE INTENT TO BE BOUND BY IT.
	
					
	Justin Hewett
	 
	 
	Anita Hewett
	 

	Employee Name (print)
	 
	 
	Witness Name (print)
	 

	 
	 
	 
	 
	 

	 
	 
	 
	Witness Address
	 

	/s/ Justin Hewett
	April 9, 2020
	 
	/s/ Anita Hewett
	 

	Employee Signature
	 Date
	 
	Witness Signature
	Date

	 
	 
	 
	 
	 

	Accepted on behalf of Tupperware:
	 
	 
	 

	By: /s/ Lillian Garcia
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Printed: Lillian Garcia
	 
	 
	 
	 

	Title:     Executive Vice President, Talent & Engagement, Worldwide
	 

	Date:     April 9, 2020alo-ex42_53.htm

EXHIBIT 4.2

 

ALIO GOLD INC.

AMENDED AND RESTATED 2019 STOCK OPTION PLAN

June 27, 2019

Article 1
INTERPRETATION

1.1Definitions and Interpretation.  As used in this Plan, the following words and terms will have the following meanings:

	
 
	
(a)
	
“Board” means the board of directors of the Company;

	
 
	
(b)
	
“Change of Control” means the occurrence of any of the following events:

	
 
	
(i)
	
any Person (which term shall for the purposes of Section 2.4(d) of this Plan, have the meaning ascribed thereto in the Securities Act (British Columbia), as amended from time to time) or combination of Persons acquires or becomes the beneficial owner of, directly or indirectly, more than 50% of the voting securities of the Company, whether through the acquisition of previously issued and outstanding voting securities, or of voting securities that have not been previously issued, or any combination thereof or any other transaction having similar effect; 

	
 
	
(ii)
	
any resolution is passed or any action or proceeding is taken with respect to the liquidation, dissolution or winding-up of the Company;

	
 
	
(iii)
	
50% or more of the issued and outstanding voting securities of the Company become subject to a voting trust;

	
 
	
(iv)
	
the Company sells, leases or otherwise disposes of all or substantially all of its assets and undertaking, whether pursuant to one or more transactions; or

	
 
	
(v)
	
the election or appointment of a majority of directors to the Board who were not members or nominees of the Company’s incumbent Board at the time immediately preceding such election or appointment;

	
 
	
(c)
	
“Code” means the United States Internal Revenue Code of 1986, as amended;

	
 
	
(d)
	
“Committee” means the committee appointed by the Board to administer this Plan, or if no committee is appointed, the independent directors of the Board;

	
 
	
(e)
	
“Company” means Alio Gold Inc. or any successor corporation;

	
 
	
(f)
	
“Director” means any individual holding the office of director of the Company or a subsidiary of the Company to whom stock options can be granted in reliance on a prospectus exemption under applicable Securities Laws;

- 2 -

	
 
	
(g)
	
“Disability” means the mental or physical state of an individual such that:

	
 
	
(i)
	
the Board, other than such individual, determines that such individual has been unable, due to illness, disease, mental or physical disability or similar cause, to fulfil his or her obligations as an employee, consultant or Director of the Company either for any consecutive 6 month period or for any period of 8 months (whether or not consecutive) in any consecutive 12 month period; 

	
 
	
(ii)
	
a court of competent jurisdiction has declared such individual to be mentally incompetent or incapable of managing his or her affairs; or

	
 
	
(iii)
	
in connection with a Participant holding an Incentive Stock Option, a condition in which the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted, or can be expected to last, for a continuous period of not less than 12 months;

	
 
	
(h)
	
“Effective Date” means June 27, 2019;

	
 
	
(i)
	
“Eligible Person” means any person providing continuous services to the Company and who is:

	
 
	
(i)
	
a full-time employee of the Company or any of its subsidiaries or a part-time employee of the Company or any of its subsidiaries working not less than 20 hours per week; or

	
 
	
(ii)
	
a consultant to the Company or any of its subsidiaries in respect of whom the Company is permitted to grant Options under applicable law and the rules and policies of any securities regulatory authority, stock exchange or quotation system with jurisdiction over the Company or the issuance of the Options; or

	
 
	
(iii)
	
a Director of the Company or any of its subsidiaries;

	
 
	
(j)
	
“Exercise Price” means the price at which a holder of an Option may purchase the Shares issuable upon exercise of the Option;

	
 
	
(k)
	
“Expiry Date” means the expiry date of an Option as determined by the Committee in accordance with the terms and conditions of this Plan, subject to the time limits and any “black out” or similar periods as provided in section 2.4(f) to this Plan;

	
 
	
(l)
	
“Incentive Stock Option” means an Option which is designated as an incentive stock option in the applicable Stock Option Certificate and which otherwise meets the requirements of Section 422 of the Code;

	
 
	
(m)
	
“Insider” has the meaning given to it in the TSX Company Manual;

	
 
	
(n)
	
“Market Price” means the closing price of the Shares on the TSX for the last market trading day prior to the date of the grant of the Option;

- 3 -

	
 
	
(o)
	
“Non-Employee Director” means any Director of the Company who is neither: (i) an employee or officer of the Company; nor (ii) a service provide (including a consultant) of the Company (other than in the capacity of a Director);

	
 
	
(p)
	
 “Non-Qualified Stock Option” means an Option which is not designated as a qualified stock option in the applicable Stock Option Certificate;

	
 
	
(q)
	
“Option” means an award of an option to purchase Shares hereunder, including an Incentive Stock Option;

	
 
	
(r)
	
“Participant” means every Eligible Person who is approved for participation in the Plan by the Committee and includes a U.S. Participant;

	
 
	
(s)
	
“Plan” means this Stock Option Plan, as may be amended from time to time;

	
 
	
(t)
	
“Securities Laws” means securities legislation, securities regulations and securities rules, as amended, and the policies, notices, instruments and orders in force from time to time that are applicable to the Company;

	
 
	
(u)
	
“Shares” means the Common Shares in the capital of the Company;

	
 
	
(v)
	
“10% Holder” means any U.S. Participant who has (i) direct or beneficial ownership of, (ii) control or direction over, or (iii) a combination of direct or indirect beneficial ownership of and control or direction over securities of the Company carrying more than 10% of the voting rights attached to all the Company’s outstanding voting securities;

	
 
	
(w)
	
“Termination” or “Terminated” means, for purposes of this Plan with respect to a Participant that the Participant has for any reason ceased to provide continuous services as an employee, consultant or Director to the Company.  Notwithstanding the foregoing, an employee will not be deemed to have ceased to provide services in the case of:

	
 
	
(i)
	
sick leave; or

	
 
	
(ii)
	
any other leave of absence approved by the Committee, provided that such leave is for a period of not more than 90 days unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to formal policy adopted from time to time by the Company and issued and promulgated to employees in writing.

Notwithstanding anything to the contrary, the Committee will have sole discretion to determine whether a Participant has ceased to provide continuous services to the Company and the effective date on which the Participant ceased to provide services (the “Termination Date”);

	
 
	
(x)
	
“TSX” means the Toronto Stock Exchange;

	
 
	
(y)
	
“U.S. Participant” means a participant who is a United States citizen or resident within the meaning of the Code; and

	
 
	
(z)
	
“Vested Unissued Option Shares” means the number of Shares, at a particular time, which have been allotted for issuance upon the exercise of a vested Option but which have 

- 4 -

	
 
		
not been issued, as adjusted from time to time in accordance with the provisions of section 2.3, such adjustments to be cumulative.

Article 2
THE PLAN/GRANT OF OPTIONS

2.1Purpose.  The purpose of the Plan is to provide the Company with a share-related mechanism to attract, retain and motivate qualified Eligible Persons, to reward such of those Eligible Persons as may be awarded Options under the Plan by the Board from time to time for their contributions toward the long term goals of the Company and to enable and encourage such Eligible Persons to acquire Shares as long term investments.

2.2Number of Shares Available.  Subject to section 2.3 and Article 5, 

	
 
	
(a)
	
the total number of Shares reserved and available for issuance pursuant to this Plan (together with those Shares which may be issued pursuant to any other security based compensation arrangement of the Company or options for services granted by the Company) shall not exceed 10% of the issued and outstanding Shares of the Company from time to time;

	
 
	
(b)
	
The Board may, in its sole discretion, grant the majority of the Options to Insiders of the Company, however, the number of Shares issued to Insiders in any 12 month period and issuable to Insiders at any time under the Plan, together with any securities of the Company under any other security-based compensation arrangements, must equal less than 10% of the issued and outstanding Shares of the Company; and

	
 
	
(c)
	
No Option shall be granted to any Non-Employee Director if such grant would, at the time of the grant result in:

	
 
	
(i)
	
the aggregate number of Shares reserved for issuance to all Non-Employee Directors under the Plan exceeding 1% of the then issued and outstanding Shares of the Company;

	
 
	
(ii)
	
the aggregate value of Options granted to the Non-Employee Director during the Company’s fiscal year exceeding $100,000; or

	
 
	
(iii)
	
the aggregate value of Options and, in the case of security based compensation arrangements of the Company that do not provide for the granting of Options (“Full Value Awards”), the grant date value of Shares granted to the Non-Employee Director during the Company’s fiscal year exceeding $150,000, provided that any Full Value Award elected to be received by a Non-Employee Director, in the Non-Employee Director’s discretion, in place of the same value of foregone cash compensation from the Company, shall not be counted toward the foregoing $150,000 limit and provided further that this Section 2.2(c)(iii) shall not apply to one-time initial grants to new directors who would be a Non-Employee Director upon joining the Board as compensation for serving on the Board.

Subject to section 2.3 and Article 5, any unissued Shares in respect of which Options are granted which cease to be issuable under such Option for any reason, including without limitation the exercise of such Option, the expiry of the Option or surrender of the Option pursuant to an option exchange program, will again be available for grant and issuance in connection with future Options granted under this Plan.  At all 

- 5 -

times the Company will reserve and keep available a sufficient number of Shares as will be required to satisfy the requirements of all outstanding Options granted under this Plan.

2.3Adjustment of Shares.  In the event that the number of outstanding Shares is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, consolidation, combination, reclassification or similar change in the capital structure of the Company without consideration, then:

	
 
	
(a)
	
the number of Shares reserved for issuance under the Plan; and

	
 
	
(b)
	
the number of Shares subject to outstanding Options; and

	
 
	
(c)
	
the Exercise Prices of outstanding Options;

will be proportionately adjusted, subject to any required action by the Board or the shareholders of the Company and in compliance with applicable Securities Laws; provided, however, that fractions of a Share will not be issuable under any Options and will be rounded down to the nearest Share.  

2.4Options.  Subject to the limitations set out in Section 2.2 and the following provisions of this Section 2.4, the Committee may grant Options to Eligible Persons and will determine the number of Shares subject to the Option, the Exercise Price of the Option, the period during which the Option may be exercised and all other terms and conditions of the Option:

	
 
	
(a)
	
Form of Option Grant.  Each Option granted under this Plan will be evidenced by a stock option certificate in the form attached to this Plan as Exhibit A, in the case of grants to Participants that are not U.S. Participants or Exhibit B, in the case of grants to U.S. Participants, or in such other form as may be approved by the Committee, from time to time (called the “Stock Option Certificate”) which will contain such provisions (which need not be the same for each Participant) as the Committee may from time to time approve, and which will comply with and be subject to the terms and conditions of this Plan and applicable Securities Laws;

	
 
	
(b)
	
Date of Grant.  The date of grant of an Option will be the date on which the Committee makes the determination to grant such Option.  The Stock Option Certificate and a copy of this Plan will be delivered to the Participant within a reasonable time after the granting of the Option;

	
 
	
(c)
	
Vesting and Exercise of Options.  Provided the Participant has not been Terminated, Options may be exercisable, until the Expiry Date determined by the Committee and specified in the Stock Option Certificate.  The Committee also may provide for Options to vest at one time or from time to time, periodically or otherwise, in such number of Shares or percentage of Shares as the Committee determines; provided, however, that all Options must vest in stages over a period of at least 18 months.  If the application of vesting causes the Option to become exercisable with respect to a fractional Share, such Share shall be rounded down to the nearest whole Share;

	
 
	
(d)
	
Take-Over Bids and Changes of Control.

	
 
	
(i)
	
Effect of a Take-Over Bid.  If a bona fide offer (an “Offer”) for Shares is made to shareholders of the Company generally, which Offer, if accepted in whole or in part, would result in the offeror becoming a control person of the Company, within the meaning of subsection 1(1) of the Securities Act (British Columbia), the 

- 6 -

	
 
		
Company shall, immediately upon receipt of notice of the Offer, notify each Participant of full particulars of the Offer, whereupon all Options will become fully vested and may be exercised in whole or in part by each Participant so as to permit the Participant to tender the Shares received upon such exercise, pursuant to the Offer.  However, if:

	
 
	
(A)
	
the Offer is not completed within the time specified therein; or

	
 
	
(B)
	
all of the Shares tendered by the Participant pursuant to the Offer are not taken up or paid for by the offeror in respect thereof,

then, with the consent of the Company, the Shares received upon such exercise, or in the case of clause (B) above, the Shares that are not taken up and paid for, may be returned by the Participant to the Company and reinstated as authorized but unissued Shares and the Options with respect to such returned Shares, shall be reinstated as if they had not been exercised and the terms upon which such Options were to become vested shall be reinstated. If any Shares are returned to the Company under this Section 2.4(d), the Company shall as soon as reasonably practicable refund the exercise price to the Participant for such Shares, net of any tax withholdings the Company was obliged to make pursuant to this Plan.  If a Participant wishes to exercise Options under this Section 2.4(d) it must so notify the Company at the time of exercise and in such event, Shares issued upon exercise of such Options must be tendered to the Offer.

	
 
	
(ii)
	
Acceleration of Expiry Date.  If, at any time when an Option granted under the Plan remains unexercised, a person or group of persons acting jointly or in concert, make an Offer to shareholders of the Company, offering to acquire part or all of the outstanding Shares, the Committee may in its sole discretion, upon notifying each Participant of full particulars of the Offer, declare all Options granted under the Plan vested, and declare that the expiry date for the exercise of all unexercised Options granted under the Plan is accelerated so that all Options will either be exercised or will expire prior to the date upon which Shares must be tendered pursuant to the Offer, provided such Offer is completed and, if not completed, the respective Expiry Dates of the Options shall revert to the original Expiry Dates and the terms upon which such Options were to become vested shall be reinstated.  

	
 
	
(iii)
	
Effect of a Change of Control.  Unless otherwise provided for at the time a grant is made pursuant to this Plan, where a Change of Control occurs, the Committee may, at its discretion, cause any and all outstanding Options issued to Participants to automatically vest, whereupon such Options may be exercised in whole or in part by any such Participant. 

	
 
	
(iv)
	
Compulsory Acquisition or Going Private Transaction.  If and whenever, following a take-over bid or an issuer bid, there shall be a compulsory acquisition of the Company’s Shares pursuant to Division 6 of Part 9 of the Business Corporations Act (British Columbia) or any successor or similar legislation, or any amalgamation, merger or arrangement in which securities acquired in a formal take-over bid may be voted under the conditions described in section 8.2 of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, then following the date upon which such compulsory acquisition, amalgamation, merger or arrangement is effective, a Participant shall 

- 7 -

	
 
		
be entitled to receive, and shall accept, for the same exercise price, in lieu of the number of Shares to which such Participant was theretofore entitled to purchase, the aggregate amount of cash, shares, or other securities or other property which such Participant would have been entitled to receive as a result of such bid if he or she had tendered such number of Shares to the bid, net of withholding taxes as contemplated by this Plan.

	
 
	
(e)
	
Additional Provisions Concerning U.S. Participants. Options granted to a U.S. Participant will be Non-Qualified Stock Options; provided, however, that the Committee may, in its discretion, at the time of the grant of Options, designate an Option as an Incentive Stock Option.  Any Option intended to be an Incentive Stock Option that fails to meet the requirements of Section 422 of the Code shall be regarded as a Non-Qualified Stock Option validly issued under the Plan.

If a U.S. Participant is granted an Incentive Stock Option under the Plan, notwithstanding a designation of Options granted to a U.S. Participant as Incentive Stock Options, to the extent that the aggregate Market Price, determined as of the date such Options were granted, of the Shares issuable on exercise of Options which are exercisable for the first time by any U.S. Participant during any calendar year exceeds US$100,000, such excess Options shall not be treated as Incentive Stock Options and will be Non-Qualified Stock Options.

In addition, in order for Options granted under the Plan to be treated as Incentive Stock Options, Shares purchased on the exercise of an Option must not be sold or otherwise disposed of before the later of 2 years from the date the Option was granted, or 1 year from the date the Option was exercised; and any U.S. Participant shall notify the Company if he, she or it makes a disqualifying disposition of the Shares such that the preferential tax treatment under the Code for Incentive Stock Options will not be available.

Notwithstanding this section 2.4(e), the Company does not assume responsibility for the income or other tax consequences for any Participants (including U.S. Participants) under the Plan and they are advised to consult their own tax advisors.

The number of Shares reserved and available for issuance pursuant to this Plan (together with those Shares which may be issued pursuant to any other security based compensation arrangement of the Company or options for services granted by the Company) shall not exceed the maximum number of Shares set out in section 2.2(a) of this Plan;

	
 
	
(f)
	
Expiry.  The Option shall expire on the Expiry Date set forth in the Stock Option Certificate and must be exercised, if at all, on or before the Expiry Date.  In no event shall an Option be exercisable during a period extending more than 5 years after the date of grant, provided that in the circumstance where the end of the term of an Option falls within, or within ten business days after the end of, a ‘‘black out’’ or similar period imposed under any insider trading policy or similar policy of the Company (but not, for greater certainty, a restrictive period resulting from the Company or its Insiders being the subject of a cease trade order of a securities regulatory authority), then the end of the term of such Option shall be extended to the tenth business day after the end of such black out period; provided, that such extension shall not apply to any U.S. Participant if it would cause adverse tax consequences under Section 409A of the Code.

- 8 -

	
 
	
(g)
	
Exercise Price.  The Exercise Price of an Option will be determined by the Committee when the Option is granted and shall not be less than the Market Price of the Shares; provided, however, that in the case of an Incentive Stock Option granted to a 10% Holder, the Exercise Price shall be no less than 110% of the Market Price on the date of grant.  Disinterested shareholder approval will be obtained for any reduction in the exercise price if the Holder of the Option is an Insider of the Company at the time of the proposed amendment or if otherwise required by law or any stock exchange rules, and in no event shall the Exercise Price of any Option held by a U.S. Participant be reduced if such Exercise Price is equal to or less than the Market Price at the time of such reduction.

	
 
	
(h)
	
Method of Exercise.  Except as otherwise provided herein, Options may be exercised only by delivery to the Company of a written stock option notice of exercise (the “Notice of Exercise”) in the form attached to this Plan as Exhibit C, or in such other form as may be approved by the Committee (which need not be the same for each Participant), stating the Participant’s election to exercise the Option, the number of Shares being purchased, the restrictions imposed on the Shares purchased under such Notice of Exercise, if any, and such representations and agreements regarding Participant’s investment intent and access to information and other matters, if any, as may be required or desirable by the Company to comply with applicable Securities Laws, together with payment in full of the Exercise Price, and any applicable taxes, for the number of Shares being purchased.  If someone other than the Participant exercises the Option, then such person must submit documentation reasonably acceptable to the Company that such person has the right to exercise the Option. The Option may not be exercised unless such exercise is in compliance with all applicable Securities Laws and the rules and policies of any exchange or quotation system upon which the Shares are listed or quoted, as they are in effect on the date of exercise;

	
 
	
(i)
	
Cashless Exercise.  In lieu of exercising the Option by delivery of the Notice of Exercise along with payment of the Exercise Price as provided in section 2.4(h), the Participant may elect to receive Shares with a value equal to the value of the Vested Unissued Option Shares (or the portion thereof being exercised) by surrender of the Option at the office of the Company together with a notice of such election in the form attached as Exhibit D to this Plan (the “Cashless Exercise Notice”) duly executed by the Participant, in which event the Company will issue to the Participant a number of Shares computed using the following formula:

X=Y(A-B)

A

where:

X = The number of Shares to be issued to the Participant

Y = The number of Vested Unissued Option Shares (at the date of exercise)

A = The Market Price of one Share (at the date of exercise)

B = The Exercise Price

- 9 -

	
 
	
(j)
	
Termination.  Subject to earlier termination pursuant to Article 5 and 2.4(d), and notwithstanding the exercise periods set forth in the Stock Option Certificate, exercise of an Option will always be subject to the following:

	
 
	
(i)
	
if the Participant is Terminated for any reason other than the Participant’s death or Disability, then the Participant may exercise such Participant’s Options (but only to the extent that such Options would have been vested and exercisable upon the Termination Date), no later than thirty days after the Termination Date or such earlier period prescribed by law (but in any event no later than the Expiry Date); and

	
 
	
(ii)
	
if the Participant is Terminated because of the Participant’s death or Disability, then such Participant’s Options may be exercised (but only to the extent that such Options would have been vested and exercisable by the Participant on the Termination Date) by the Participant (or the Participant’s legal representative or authorized assignee), no later than 12 months after the Termination Date or such earlier period as may be prescribed by law (but in any event no later than the Expiry Date);

	
 
	
(k)
	
Limitations on Exercise.  The Committee may specify a reasonable minimum number of Shares that may be purchased on exercise of an Option, provided that such minimum number will not prevent the Participant from exercising the Option for the full number of Shares for which it is then exercisable; 

	
 
	
(l)
	
Acceleration of Date of Exercise.  The Committee shall have the right to accelerate the date of vesting of any portion of any Option which remains unvested, subject to prior stock exchange acceptance; 

	
 
	
(m)
	
Issuance of Shares.  Provided that the Cashless Exercise Notice or Notice of Exercise and payment are in form and substance satisfactory to the Company, the Company shall issue the Shares registered in the name of the Participant or the Participant’s legal representative and shall deliver certificates representing the Shares with the appropriate legends affixed thereto; and

	
 
	
(n)
	
Legends.  Unless and until Shares issuable upon the exercise of Options are registered under the United States Securities Act of 1933, as amended, Shares issued under this Plan to a U.S. Participant will contain the following legend, as amended or supplemented by applicable laws:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED OR ASSIGNED EXCEPT (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, IF AVAILABLE, OR (C) INSIDE THE UNITED STATES (1) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR (2) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND, IN 

- 10 -

CONNECTION WITH ANY TRANSFERS PURSUANT TO (C)(1) OR (C)(2) ABOVE, THE SELLER HAS FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR CERTIFICATION, IN EACH CASE REASONABLY SATISFACTORY TO THE COMPANY AND THE TRANSFER AGENT FOR THE COMPANY’S SHARES, TO THAT EFFECT.

Article 3
ADMINISTRATION

3.1Committee Authority.  This Plan will be administered by the Committee.  Subject to the general purposes, terms and conditions of this Plan, and to the direction of the Board, the Committee will have full power to implement and carry out this Plan including, without limitation, the authority to:

	
 
	
(a)
	
construe and interpret this Plan, any Stock Option Certificate and any other agreement or document executed pursuant to this Plan;

	
 
	
(b)
	
prescribe, amend and rescind rules and regulations relating to this Plan;

	
 
	
(c)
	
select Eligible Persons to receive Options;

	
 
	
(d)
	
determine the form and terms of Options and Stock Option Certificates, provided that they are not inconsistent with the terms of the Plan;

	
 
	
(e)
	
determine the Exercise Price of an Option;

	
 
	
(f)
	
determine the number of Shares to be covered by each Option;

	
 
	
(g)
	
determine whether Options will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to, any other incentive or compensation plan of the Company;

	
 
	
(h)
	
grant waivers of Option conditions or amend or modify each Option, provided that they are not inconsistent with the terms of this Plan;

	
 
	
(i)
	
determine the vesting, exercisability and Expiry Dates of Options;

	
 
	
(j)
	
correct any defect, supply any omission, or reconcile any inconsistency in this Plan, any Option, any Stock Option Certificate, any Notice of Exercise or Cashless Exercise Notice;

	
 
	
(k)
	
determine whether an Option has been earned; and

	
 
	
(l)
	
make all other determinations necessary or advisable for the administration of this Plan.

3.2Committee Discretion.  Any determination made by the Committee with respect to any Option will be made in its sole discretion at the time of grant of the Option or, unless in contravention of any express term of this Plan or Option, at any later time, and such determination will be final and binding on the Company and on all persons having an interest in any Option under this Plan.

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Article 4
RIGHTS OF OWNERSHIP

4.1No Rights of a Shareholder.  No Participant will have any of the rights of a shareholder with respect to any Shares until the Shares are issued as evidenced by the appropriate entry on the securities register of the Company.  

4.2Transferability.  Options granted under this Plan, and any interest therein, will not be transferable or assignable by a Participant, and may not be made subject to execution, attachment or similar process, otherwise than by will or by the operation of applicable succession laws.  During the lifetime of the Participant, an Option will be exercisable only by the Participant and any elections with respect to an Option may be made only by the Participant.  The terms of the Option shall be binding upon the executors, administrators and heirs of the Participant.

Article 5
CORPORATE TRANSACTIONS

5.1Assumption or Replacement of Options by Successor.  In the event of:

	
 
	
(a)
	
a merger whether by way of amalgamation or arrangement in which the Company is not the surviving corporation (other than a merger with a wholly-owned subsidiary, or other transaction in which there is no substantial change in the shareholders of the Company or their relative shareholdings and the Options granted under this Plan are assumed, converted or replaced by the successor corporation, which assumption will be binding on all Participants);

	
 
	
(b)
	
a merger whether by way of amalgamation or arrangement in which the Company is the surviving corporation but after which shareholders of the Company immediately prior to such merger (other than any shareholder which merges, or which owns or controls another corporation which merges, with the Company in such merger) cease to own their shares or other equity interests in the Company; or 

	
 
	
(c)
	
the sale of all or substantially all of the assets of the Company,

any or all outstanding Options may be assumed, converted or replaced by the successor corporation (if any), which assumption, conversion or replacement will be binding on all Participants or, in the alternative, the successor corporation may substitute equivalent Options or provide substantially similar consideration to Participants as was provided to shareholders (after taking into account the existing provisions of the Options).  

5.2Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company, to the extent that an Option has not been previously exercised, the Option will terminate immediately prior to the consummation of such proposed action.  The Committee may, in the exercise of its sole discretion in such instances, declare that any Option shall terminate as of a date fixed by the Committee and give each Participant the right to exercise his, her or its Option as to all or any part of the Shares thereof, including Shares as to which the Option would not otherwise be exercisable.

- 12 -

Article 6
GENERAL

6.1No Obligation to Employ.  Nothing in this Plan or any Option granted under this Plan will confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or limit in any way the right of the Company to terminate such Participant’s employment or other relationship at any time, with or without cause.  Neither any period of notice, if any, nor any payment in lieu thereof, upon termination of employment shall be considered as extending the period in which an Eligible Person is providing continuous services for the purposes of the Plan.

6.2Withholding.  The Company may withhold from any amount payable to a Participant, either under this Plan or otherwise, such amount as it reasonably believes is necessary to enable the Company to comply with the applicable requirements of any federal, provincial, local or foreign law, or any administrative policy of any applicable tax authority, relating to the withholding of tax or any other required deductions with respect to Options (“Withholding Obligations”). The Company may also satisfy any liability for any such Withholding Obligations, on such terms and conditions as the Company may determine in its discretion, by (a) requiring a Participant, as a condition to the exercise of any Options, to make such arrangements as the Company may require so that the Company can satisfy such Withholding Obligations including, without limitation, requiring the Participant to remit to the Company in advance, or reimburse the Company for, any such Withholding Obligations or (b) selling on the Participant’s behalf, or requiring the Participant to sell, any Shares acquired by the Participant under the Plan, or retaining any amount which would otherwise be payable to the Participant in connection with any such sale.

6.3Governing Law.  This Plan and all agreements hereunder shall be governed by and construed in accordance with the laws of the Province of British Columbia.

6.4Termination and Amendment of Plan.  The Board may at any time terminate this Plan in any respect, provided that no such termination shall adversely affect the rights of any Participant under any Option previously granted except with the consent of such Participant.  The Board may, without notice, at any time and from time to time, amend the Plan or any provisions thereof, or the form of Stock Option Certificate or instrument to be executed pursuant to the Plan, in such manner as the Board, in its sole discretion, determines appropriate without shareholder approval:

	
 
	
(a)
	
for the purposes of making formal minor or technical modifications to any of the provisions of the Plan;

	
 
	
(b)
	
to correct any defect, supply any omission, or reconcile any inconsistency in this Plan, any Option, any Stock Option Certificate, any Notice of Exercise or Cashless Exercise Notice;

	
 
	
(c)
	
to change any vesting provisions of Options or the Plan;

	
 
	
(d)
	
to change the termination provisions of the Options or the Plan which does not entail an extension beyond the original Expiry Date of the Options; and

	
 
	
(e)
	
to modify or eliminate the cashless exercise feature of the Plan; 

provided, however, that:

- 13 -

	
 
	
(a)
	
no such amendment of the Plan may be made without the consent of such affected Participant if such amendment would adversely affect the rights of such affected Participant under the Plan; and

	
 
	
(b)
	
shareholder approval shall be obtained for any amendment that results in:

	
 
	
(i)
	
an increase in the number of Shares issuable under Options granted pursuant to the Plan or to the Plan maximum contained in Section 2.2(a);

	
 
	
(ii)
	
a change in the persons who qualify as Eligible Persons under the Plan; 

	
 
	
(iii)
	
a reduction in the Exercise Price of an Option;

	
 
	
(iv)
	
the cancellation and reissue of any Option;

	
 
	
(v)
	
an extension of the term of an Option beyond the original Expiry Date of the Option;

	
 
	
(vi)
	
Options becoming transferable or assignable other than for the purposes as described in section 4.2;

	
 
	
(vii)
	
the removal or exceedance of the Insider participation limit set out in section 2.2 of the Plan; 

	
 
	
(viii)
	
the removal or exceedance of the Non-Employee Director limits set out in Section 2.2(c) of the Plan; 

	
 
	
(ix)
	
to add or change provisions relating to any form of financial assistance provided by the Company to Participants that would facilitate the purchase of securities under the Plan; or

	
 
	
(x)
	
a change to this section 6.4 of the Plan.

6.5Notices.  Any notice required to be given or delivered to the Company under the terms of this Plan shall be in writing and addressed to the Corporate Secretary of the Company at its principal corporate offices.  Any notice required to be given or delivered to a Participant shall be in writing and addressed to such Participant at the address indicated in the Stock Option Certificate or to such other address as such party may designate in writing from time to time to the Company.  All notices shall be deemed to have been given or delivered upon: personal delivery; three business days after deposit in the mail by certified or registered mail (return receipt requested); one business day after deposit with any return receipt express courier (prepaid); one business day after transmission by confirmed facsimile, rapidfax or telecopier; one business day after transmission by email.

6.6Successors and Assigns.  The Company may assign any of its rights under this Plan.  This Plan shall be binding upon and inure to the benefit of the successors and assigns of the Company.

6.7Nonexclusivity of the Plan.  Neither the adoption of this Plan by the Board nor any provision of this Plan will be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of stock options otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases. 

- 14 -

6.8Section 409A of the Code.  Notwithstanding any provision of this Plan to the contrary, if any provision of this Plan contravenes any regulations or guidance promulgated under section 409A of the Code or would cause any person to be subject to additional taxes, interest and/or penalties under section 409A of the Code, such provision of this Plan, the Options and the Stock Option Certificates may be modified by the Board without notice to or consent of the Participant in any manner the Board deems reasonable or appropriate.

****

 

 

EXHIBIT A
PARTICIPANT GRANT

Alio Gold Inc.
(the “Company”)
Stock Option Certificate
under
Stock Option Plan
(the “Plan”)

The Company hereby grants to a Participant an Option, the details of which are as follows:

	
	
Participant’s Name:

Social Insurance Number:

Address:

Total Option Shares:

Exercise Price Per Share:

Date of Grant:

Expiration Date:

Vesting Details:

You agree that you may suffer tax consequences as a result of the grant of this Option, the exercise of the Option and the disposition of Shares.  You acknowledge that you are not relying on the Company or its advisors for any tax advice.

This Stock Option Certificate is subject to the terms and conditions of the Plan and, in the event of any inconsistency or contradiction between the terms of the Stock Option Certificate and the Plan, the terms of the Plan shall govern.

If you agree to accept the Option described above, subject to all of the terms and conditions of the Plan, please sign one copy of this letter and return it to ______________ by ______________.

ALIO GOLD INC.

By:________________________________

Authorized Signatory

I have received a copy of the Plan and agree to comply with, and agree that my participation is subject in all respects to, its terms and conditions.

 

(Signature)

 

(Date)

 

(Address)

 

EXHIBIT B
U.S. PARTICIPANT GRANT

Alio Gold Inc.
(the “Company”)
Stock Option Certificate
under
Stock Option Plan
(the “Plan”)

The Company hereby grants to a Participant an Option, the details of which are as follows:

	
	
Participant’s Name:

Social Insurance Number:

Address:

Total Option Shares:

Exercise Price Per Share:

Date of Grant:

Expiration Date:

Vesting Details:

Type of Option(1):Incentive Stock Option:

Non-Qualified Stock Option:

Note (1): the number of Incentive Stock Options shall be calculated in accordance with (a) below

You agree that you may suffer tax consequences as a result of the grant of this Option, the exercise of the Option and the disposition of Shares.  You acknowledge that you are not relying on the Company or its advisors for any tax advice.

If the Option is designated as an “Incentive Stock Option” as that term is defined in section 422 of the Code, you acknowledge that: 

	
 
	
(a)
	
notwithstanding the designation of the Option as an Incentive Stock Option, to the extent that the aggregate Market Price, determined as of the date such Option was granted, of the Shares issuable on exercise of the Option which are exercisable for the first time by you during any calendar year exceeds US$100,000, such excess Option shall not be treated as an Incentive Stock Option and will be Non-Qualified Stock Options; and

	
 
	
(b)
	
you will provide notice to the Company of any disqualifying disposition of Shares acquired upon exercise of an Incentive Stock Option, which would be any disposition of Shares purchased on the exercise of an Option sold or otherwise disposed of before the later of 2 years from the date the Option was granted, or 1 year from the date the Option was exercised, and in such case preferential tax treatment under the Internal Revenue Code for Incentive Stock Options will not be available.

This Stock Option Certificate is subject to the terms and conditions of the Plan and, in the event of any inconsistency or contradiction between the terms of the Stock Option Certificate and the Plan, the terms of the Plan shall govern.

- 2 -

If you agree to accept the Option described above, subject to all of the terms and conditions of the Plan, please sign one copy of this letter and return it to ______________ by ______________.

ALIO GOLD INC.

By:________________________________

Authorized Signatory

I have received a copy of the Plan and agree to comply with, and agree that my participation is subject in all respects to, its terms and conditions.

 

(Signature)

 

(Date)

 

(Address)

 

 

 

EXHIBIT C

ALIO GOLD INC.

NOTICE OF EXERCISE OF STOCK OPTION
UNDER THE STOCK OPTION PLAN

TO:Alio Gold Inc.

FROM:

DATE:

RE:Exercise of Stock Option

I hereby exercise my Option to purchase _______ Shares (U.S. Participants select ☐ Incentive Stock Options OR ☐ Non-Qualified Stock Options (tick one)) for a per Share Exercise Price of $__________ (total aggregate exercise price of $___________), effective today’s date, in accordance with the terms of my attached Stock Option Certificate.  

I hereby:

☐ (a) enclose a certified cheque payable to Alio Gold Inc. for the aggregate Exercise Price plus the amount of the estimated Withholding Obligation and agree that I will reimburse the Company for any amount by which the actual Withholding Obligations exceed the estimated Withholding Obligations; OR

☐ (b) advise the Company that ________________________ [Name of Brokerage Firm] (the “Broker”) will provide the Company with the Exercise Price and estimated Withholding Obligation in respect of the above Options in exchange for certificates representing such number of Shares to be issued upon due exercise of the above Options that have been sold by the Broker for my account.  Upon confirmation of the number of Shares sold by the Broker, I hereby direct you to deliver the applicable share certificates to the Broker.  I agree that I will reimburse the Company for any amount by which the actual Withholding Obligations exceed the estimated Withholding Obligations.

In addition (check one):

☐ (a) the undersigned holder (i) is not in the United States; (ii) is not a “U.S. person” as defined in Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and is not exercising the Options on behalf of a “U.S. person” or a person in the United States; and (iii) did not execute or deliver this exercise form in the United States; OR

☐ (b) the undersigned holder (i) is an “accredited investor” within the meaning of Regulation D under the U.S. Securities Act; (ii) is exercising the Options solely for its own account; (iii) understands that the Shares being issued upon its exercise of the Options have not been and will not be registered under the U.S. Securities Act, and that the sale contemplated hereby is being made in reliance on a private placement exemption under the U.S. Securities Act; (iv) understands that such Shares are “restricted securities” as defined in Rule 144 under the U.S. Securities Act and the certificates representing such Shares, and all certificates issued in exchange therefor or in substitution thereof, shall bear on their face the U.S. restrictive legend set forth in the Alio Gold Inc. Amended and Restated 2019 Stock Option 

- 2 -

Plan; and (v) is not exercising the Options as a result of any general solicitation or general advertising, as those terms are used in Regulation D under the U.S. Securities Act.

Attached is a cheque payable to Alio Gold Inc. for the total aggregate exercise price of the Shares being purchased.

Please prepare the stock certificate in the following name(s):

 

 

- 3 -

NOTE:  If the shares are to be registered in a name other than the Participant’s name, please advise the Company.  The Stock Option Plan requires the Company’s approval for registration in a name other than your name and states the limited circumstances in which this will be permitted.

Sincerely

 

Signature

 

Print or type name

Letter and consideration

received on _______, 20____.

By:  

 

EXHIBIT D

ALIO GOLD INC.

NOTICE OF CASHLESS EXERCISE

TO:Alio Gold Inc.

FROM:

DATE:

RE:Cashless Exercise of Stock Option

I hereby elect to receive Shares (U.S. Participants select ☐ Incentive Stock Options OR ☐ Non-Qualified Stock Options (tick one)) with a value equal to the value of _____ Vested Unissued Option Shares (as calculated under section 2.4(i)) with a per Share Exercise Price of $__________ (total aggregate exercise price of $___________), effective today’s date, in accordance with my attached Stock Option Certificate.  

Please prepare the stock certificate in the following name(s):

 

 

NOTE:  If the shares are to be registered in a name other than the Participant’s name, please advise the Company.  The Stock Option Plan requires the Company’s approval for registration in a name other than your name and states the limited circumstances in which this will be permitted.

Sincerely

 

Signature

 

Print or type name

Letter and consideration

received on _______, 20____.

By:

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