Document:

Augusta Resource Corporation: Exhibit 4.1 - Filed by newsfilecorp.com

AUGUSTA RESOURCE CORPORATION 
(the “Company”) 

STOCK OPTION PLAN 

Dated as of May 3, 2004, as amended and restated as of June 1,
2007, June 11, 2009 
and June 12, 2012 

	1. 	
      PURPOSE

     The purpose of the Plan is to
provide an incentive to the directors, officers, employees, consultants and
other personnel of the Company or any of its subsidiaries to achieve the long
term objectives of the Company; to attract, retain and motivate persons as
directors, officers, employees and consultants to the Company and to advance the
interests of the Company by providing such persons with the opportunity, through
stock options to acquire a proprietary interest in the Company. 

	2. 	
      DEFINITIONS AND
  INTERPRETATIONS

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

	 	(a) 	
      “Board of Directors” means the Board of Directors
      of the Company;

	 	 	 	 
	 	(b) 	
      “change in control” means the occurrence of any of
      the following events:

	 	 	 	 
	 		(i) 	
      any person, alone or together with any other persons with
      whom it is acting jointly or in concert, becomes the beneficial owner of,
      or acquires the power to exercise control or direction over, directly or
      indirectly, securities (or securities convertible into, or exchangeable
      for, such securities) representing twenty percent (20%) or more of the
      votes exercisable by holders of the then-outstanding securities generally
      entitled to vote for the election of directors (“Voting Shares”) of the
      Company or any persons that previously were not acting jointly or in
      concert commence acting jointly or in concert and together beneficially
      own, or have the power to exercise control or direction over, such
      securities;

	 	 	 	 
	 		(ii) 	
      the Company is merged, amalgamated, consolidated or
      reorganized into or with another person and, as a result of such business
      combination, securities representing more than twenty percent (20%) of the
      votes exercisable by holders of the Voting Shares of the Company or such
      person into which the Voting Shares of the Company is converted
      immediately after such transaction are held by a person alone or together
      with any other persons with whom it is acting jointly or in concert and
      such person, together with those with whom it is acting jointly or in
      concert, held securities representing less than twenty percent (20%) of
      the votes exercisable by the holders of the Voting Shares of the Company
      immediately prior to such transaction;

	 	 	 	 
	 		(iii) 	
      the capital of the Company is reorganized and, as a
      result of such reorganization, securities representing more than twenty
      percent (20%) of the votes exercisable by the holders of the Voting Shares
      of the Company immediately after such reorganization are held by a person
      alone or together with any other persons with whom it is acting jointly or
      in concert and such person, together with those with whom it is acting
      jointly or in concert, held securities representing less than twenty
      percent (20%) of the votes exercisable by the holders of the Voting Shares
      of the Company immediately prior to such
reorganization;

	 		(iv) 	
      the Company sells or otherwise transfers all or
      substantially all of its assets to another person and following such sale
      or transfer securities representing more than twenty percent (20%) of the
      votes exercisable by the holders of the Voting Shares of the acquiring
      person immediately after such transactions are held in the aggregate by a
      person alone or together with any other persons with whom it is acting
      jointly or in concert, and such person, together with those with whom it
      is acting jointly or in concert, held securities representing less than
      twenty percent (20%) of the votes exercisable by holders of the Voting
      Shares of the Company immediately prior to such transaction; or

	 	 	 	 
	 		(v) 	
      individuals who were elected by the shareholders to
      constitute the Board of Directors at the beginning of any one year term
      cease for any reason in such year to constitute more than 50% of the Board
      of Directors.

	 	 	 	 
	 	(c) 	
      “Common Shares” means common shares in the capital
      of the Company or in the event of an adjustment contemplated by Section 14
      hereof, such other shares or securities to which the Optionee may be
      entitled upon the exercise of an Option as a result of such
    adjustment;

	 	 	 	 
	 	(d) 	
      “Company” means Augusta Resource Corporation and
      any successor company and any reference herein to action by the Company
      means action by or under the authority of its Board of Directors or a duly
      empowered committee appointed by the Board of Directors;

	 	 	 	 
	 	(e) 	
      “Exchange” means the Toronto Stock Exchange or any
      other stock exchange on which the Common Shares are listed;

	 	 	 	 
	 	(f) 	
      “Exchange Policies” means the policies of the
      Exchange, including those set forth in the Company Manual of the
      Exchange.

	 	 	 	 
	 	(g) 	
      “Insider” has the meaning ascribed thereto in
      Exchange Policies;

	 	 	 	 
	 	(h) 	
      “Market Price” means the last per share closing
      price for the Common Shares on the Exchange before the date of grant of an
      Option;

	 	 	 	 
	 	(i) 	
      “Option” means an option granted by the Company to
      an Optionee entitling such Optionee to acquire a designated number of
      Common Shares from treasury at a price determined by the Board of
      Directors subject to Exchange policies;

	 	 	 	 
	 	(j) 	
      “Optionee” means a person who is a director,
      officer, employee, consultant or other personnel of the Company or a
      subsidiary of the Company; a company wholly-owned by such persons; or any
      other individual or body corporate who may be granted an option pursuant
      to the requirements of applicable securities laws and the Exchange, who is
      granted an Option pursuant to this Plan;

	 	 	 	 
	 	(k) 	
      “Option Period” means the period determined by the
      Board of Directors during which an Optionee may exercise an Option, which
      period shall not exceed the later of (i) ten (10) years from the date of
      grant of the Option, and (ii) if the expiry of such period falls during a
      time when Optionees are restricted from acquiring securities of the
      Company as a result of material information concerning the Company not
      having been generally disclosed (a “Blackout Period”), ten (10) days
      following the lifting of the Blackout Period; and

	 	 	 	 
	 	(l) 	
      “Plan” shall mean the Company’s incentive stock
      option plan as embodied herein and as from time to time
  amended.

     Wherever the singular or
masculine is used in this Plan, the same shall be construed as meaning the
plural or feminine or body corporate and vice versa, where the context or the
parties so require and references to person includes any individual,
partnership, limited partnership, joint venture, syndicate or organization, sole
proprietorship, company or corporation (with or without share
capital), unincorporated association, trust, trustee, executor, administrator or
other legal representative.

	3. 	
      ADMINISTRATION

     The Plan shall be administered by
the Secretary of the Company. The Board of Directors shall have full and final
discretion to interpret the provisions of the Plan and to prescribe, amend,
rescind and waive rules and regulations to govern the administration and
operation of the Plan. All decisions and interpretations made by the Board of
Directors shall be binding and conclusive upon the Company and on all persons
eligible to participate in the Plan, subject to shareholder approval if required
by the Exchange. Notwithstanding the foregoing or any other provision contained
herein, the Board of Directors shall have the right to delegate the
administration and operation of the Plan to a special committee of directors
appointed from time to time by the Board of Directors, in which case all
references herein to the Board of Directors shall be deemed to refer to such
committee. 

     Any Option granted under the Plan
shall be subject to the requirements that, if at any time counsel to the Company
shall determine that the listing or qualification of the Common Shares subject
to such Option upon any securities exchange or under any law or regulation of
any jurisdiction, or the consent or approval of the shareholders of the Company,
any securities exchange or any governmental or regulatory authority, is
necessary as a condition of, or in connection with, the grant or exercise of
such Option or the issuance or purchase of Shares thereunder, such Option may
not be accepted or exercised in whole or in part unless such listing,
qualification, consent or approval shall have been effected or obtained on
conditions acceptable to the Board of Directors. Nothing herein shall be deemed
to require the Company to apply for or to obtain such listing, qualification,
consent or approval. 

	4. 	
      ELIGIBILITY

     The Board of Directors may at any
time and from time to time designate those Optionees who are to be granted an
Option pursuant to the Plan and grant an Option to such Optionee. Subject to
Exchange Policies and the limitations contained herein, the Board of Directors
is authorized to provide for the grant and exercise of Options on such terms
(which may vary as between Options) as it shall determine. A person who has been
granted an Option may, if he is otherwise eligible and if permitted by Exchange
Policies, be granted an additional Option or Options if the Board of Directors
shall so determine.

	5. 	
      PARTICIPATION

     Participation in the Plan shall
be entirely voluntary and any decision not to participate shall not affect an
Optionee’s relationship or employment with the Company. 

     Notwithstanding any express or
implied term of this Plan or any Option to the contrary, the granting of an
Option pursuant to the Plan shall in no way be construed as conferring on any
Optionee any right with respect to continuance as a director, officer, employee
or consultant of the Company or any subsidiary of the Company. 

     Options shall not be affected by
any change of employment of the Optionee or by the Optionee ceasing to be a
director or officer of or a consultant to the Company or any of its
subsidiaries, where the Optionee at the same time becomes or continues to be a
director, officer or full-time employee of or a consultant to the Company or any
of its subsidiaries. 

     No Optionee shall have any of the
rights of a shareholder of the Company in respect to Common Shares issuable on
exercise of an Option until such Common Shares shall have been paid for in full
and issued by the Company on exercise of the Option, pursuant to this Plan. 

	6. 	
      COMMON SHARES SUBJECT TO
  OPTIONS

     The aggregate number of Common
Shares that may be issued upon the exercise of Options granted under the Plan
shall not at any time, when taken together with any Common Shares issuable under
any other of security based compensation arrangements of the Company then either in
effect or proposed, exceed 10% of the issued and outstanding Common Shares from
time to time. In addition: 

	 	(a) 	
      the maximum number of Common Shares issuable to Insiders
      of the Company, at any time, under all security based compensation
      arrangements of the Company, shall not exceed 10% of the issued and
      outstanding Common Shares; and

	 	 	 
	 	(b) 	
      the maximum number of Shares issued to Insiders of the
      Company, within any 12 month period, under all security based compensation
      arrangements of the Company, shall not exceed 10% of issued and
      outstanding Common Shares.

     For the purposes of this Section
6, the number of issued and outstanding Common Shares shall be determined on a
non-diluted basis and, for the purposes of Subsection 6(b), the number of issued
and outstanding Common Shares shall exclude Common Shares issued pursuant to
security based compensation arrangements of the Company during the preceding 12
month period. In addition, for purposes of Subsections 6(a) and 6(b), Common
Shares issued prior to the Optionee becoming an Insider shall be excluded.

     Appropriate adjustments shall be
made as set forth in Section 14 hereof, in both the number of Common Shares
covered by individual grants and the total number of Common Shares authorized to
be issued hereunder, to give effect to any relevant changes in the
capitalization of the Company. 

     If any Option granted hereunder
shall expire or terminate for any reason without having been exercised in full,
the unpurchased Common Shares subject thereto shall again be available for the
purpose of the Plan. 

	7. 	
      OPTION AGREEMENT

     A written agreement will be
entered into between the Company and each Optionee to whom an Option is granted
hereunder, which agreement will set out the number of Common Shares subject to
option, the exercise price and any other terms and conditions approved by the
Board of Directors, all in accordance with the provisions of this Plan (herein
referred to as the “Stock Option Agreement”). The Stock Option Agreement will be
in such form as the Board of Directors may from time to time approve, and may
contain such terms as may be considered necessary in order that the Option will
comply with any provisions respecting options in the jurisdiction of which the
Optionee may from time to time be a resident or citizen or the rules of any
regulatory authority having jurisdiction over the Company, including the
Exchange. 

	8. 	
      OPTION PERIOD AND EXERCISE
  PRICE

     Each Option and all rights
thereunder shall be expressed to expire on the date set out in the respective
Stock Option Agreement, which shall be the date of the expiry of the Option
Period (the “Expiry Date”), subject to earlier termination as provided in
Section 10 and 11 hereof.

     Subject to Exchange Policies and
any limitations imposed by any relevant regulatory authority, the exercise price
of an Option granted under the Plan shall be as determined by the Board of
Directors when such Option is granted and shall be an amount at least equal to
the Market Price of the Common Shares. 

	9. 	
      EXERCISE OF OPTIONS

     An Optionee shall be entitled to
exercise an Option granted to him at any time prior to the expiry of the Option
Period, subject to Sections 10 and 11 hereof and to vesting limitations which
may be imposed by the Board of Directors at the time such Option is granted.
Subject to Exchange Policies, the Board of Directors may, in its sole
discretion, determine the time during which an Option shall vest and the method
of vesting, or that no vesting restriction shall exist. The exercise of any
Option will be conditional upon receipt by the Company at its head office of a
written notice of exercise, specifying the number of Common Shares in respect of
which the Option is being exercise, accompanied by cash payment, certified
cheques or bank draft for the full purchase price of such Common Shares with
respect to which the Option is being exercised. 

     In lieu of paying the aggregate
Exercise Price to purchase Common Shares as set forth in this Section 9, but
subject to Section 19, the Optionee may elect instead to surrender all or the
applicable portion of a then vested and exerciseable Option to the Company as
consideration and in exchange for that number of Common Shares determined in
accordance with the following formula: 

A = B (C – D) / C 

where:

A = the number of Common Shares to be
issued to the Optionee pursuant to this Section 9; 

B = the number of Common Shares
otherwise issuable upon the exercise of the Option or the portion of the Option
being exercised; 

C = the last closing price of the
Common Shares on the Exchange relative to the date that is the last day
immediately prior to the date of delivery of a notice by the Optionee to the
Company pursuant to this Section 9, rounded up to the nearest whole cent (the
“Notice Value”); and 

D = the Exercise Price. 

If the Notice Value is expressed in a different currency then
the Exercise Price, then the Notice Value will be converted into the currency of
the Exercise Price using the Bank of Canada noon rate of exchange on the trading
day of exercise. 

	10. 	
      CEASING TO BE A DIRECTOR, OFFICER, EMPLOYEE OR
      CONSULTANT

     If an Optionee ceases to be a
director, officer, employee or consultant of the Company or its subsidiaries for
any reason other than death, the Optionee may, unless otherwise specified in an
option agreement, within thirty (30) days after the Optionee’s ceasing to be a
director, officer, employee or consultant, which period may be extended by the
Board of Directors, or prior to the expiry of the Option Period, whichever is
earlier, exercise any Option held by the Optionee, but only to the extent that
the Optionee was entitled to exercise the Option at the date of such cessation
and subject to the following:

	 	(a) 	
      any Optionee who ceases to be a Director of the Company
      as a result of

	 	 	 	 
	 		(i) 	
      ceasing to meet the ‘Qualifications of Director’ as set
      forth in the Canada Business Corporations Act (the “Act”);
  or

	 	 	 	 
	 		(ii) 	
      a special resolution having been passed by the
      shareholders of the Company pursuant to the Act; or

	 	 	 	 
	 		(iii) 	
      an order of the British Columbia Securities Commission,
      the Exchange, or any regulatory authority having jurisdiction to so
      order;

	 	 	 	 
	 		
      in which case the expiry date shall be the date the
      Optionee ceases to be a Director of the Company.

	 	 	 	 
	 	(b) 	
      any Optionee who ceases to be an employee as a result
      of

	 	 	 	 
	 		(i) 	
      termination for cause; or

	 	 	 	 
	 		(ii) 	
      an order of the British Columbia Securities Commission,
      the Exchange, or any regulatory authority having jurisdiction to so
      order;

in which case the Expiry Date shall be
the date the Optionee ceases to be an employee of the Company. 

Unless otherwise agreed to in writing by the Board, references
to “termination”, “the date of such termination”, “ceases” or similar references
in this Section 10: 

	 	a) 	
      in the case of an employee (including officers who are
      also employees), is deemed to be the last day of active employment by the
      employee with the Company or its wholly-owned subsidiary, as the case may
      be, regardless of any salary continuance, notice period required under
      applicable law or the reason for termination of employment (whether with
      or without cause, with or without notice or whether lawful or unlawful);
      and

	 	 	 
	 	b) 	
      in the case of a consultant is deemed to be the
      “termination” or “the date of such termination” or “ceasing” of the person
      engaged as a consultant to provide services to the Company or its wholly-
      owned subsidiary.

For greater certainty, an Option that had not become
exercisable at the time that the relevant termination event referred to in this
Section 10 occurred, shall not be or become exercisable and shall be cancelled.

	11. 	
      DEATH OF OPTIONEE

     If an Optionee shall die while
holding an Option which has not been fully exercised, his personal
representatives, administrators, heirs or legatees may exercise such Option, at
any time following the grant of probate of the will or letters of administration
of the estate of the deceased and prior to a date twelve (12) months from the
date of the Optionee’s death, but only to the extent that the Optionee was
entitled to exercise the Option at the date of the Optionee’s death. 

	12. 	
      OPTIONEE’S RIGHTS NOT
  TRANSFERABLE

     No right or interest of any
Optionee in or under the Plan is assignable or transferable, in whole or in
part, either directly or by operation of law or otherwise in any manner except
by bequeath or the laws of descent and distribution, subject to the requirements
of the Exchange, or as otherwise allowed by the Exchange. 

	13. 	
      TAKEOVER OR CHANGE OF CONTROL

	 	 	 	 
		
      Notwithstanding section 14, in the event of a change in
      control:

	 	 	 	 
		(a) 	
      all outstanding Options with an exercise price equal to
      or less than the Market Price on the day immediately prior to the
      announcement of the event giving rise to the change in control shall
      become immediately exercisable and the Option shall be deemed to have been
      amended to permit the exercise thereof in whole or in part by the
      Optionee; and

	 	 	 	 
		(b) 	
      all holders of outstanding Options with an exercise price
      greater than the Market Price on the day immediately prior to the
      announcement of the event giving rise to the change in control shall be
      entitled to receive and shall accept, immediately prior to or concurrently
      with the change in control, either of the following in consideration for
      the surrender of the Options, which consideration shall be determined by
      the Board of Directors in its sole discretion:

	 	 	 	 
			(i) 	
      the fair value thereof, if any, determined in accordance
      with the Black and Scholes Option Pricing Model; or

	 	 	 	 
			(ii) 	
      options of the acquiring person exercisable for the kind
      and amount of shares or other securities or property of the acquiring
      person that the Optionee would have been entitled to receive if such
      Optionee was the holder of the number of Common Shares to which such
      Optionee was entitled upon exercise of
Options.

	14. 	
      ANTI-DILUTION OF THE OPTION

	 	 	 
		
      In the event of:

	 	 	 
		(a) 	
      any subdivision, redivision or change of the Common
      Shares at any time during the term of the Option into a greater number of
      Common Shares, the Company shall deliver, at the time of any exercise
      thereafter of the Option, such number of Common Shares as would have
      resulted from such subdivision, redivision or change if the exercise of
      the Option had been made prior to the date of such subdivision, redivision
      or change;

	 	 	 
		(b) 	
      any consolidation or change of the Common Shares at any
      time during the term of the Option into a lesser number of Common Shares,
      the number of Common Shares deliverable by the Company on any exercise
      thereafter of the Option shall be reduced to such number of Common Shares
      as would have resulted from such consolidation or change if the exercise
      of the Option had been made prior to the date of such consolidation or
      change;

	 	 	 
		(c) 	
      any reclassification of the Common Shares at any time
      outstanding or change of the Common Shares into other shares, or in case
      of the consolidation, amalgamation or merger of the Company with or into
      any other company (other than a consolidation, amalgamation or merger
      which does not result in a reclassification of the outstanding Common
      Shares or a change of the Common Shares into other shares), or in case of
      any transfer of the undertaking or assets of the Company as an entirety or
      substantially as an entirety to another company, at any time during the
      term of the Option, the Optionee shall be entitled to receive, and shall
      accept, in lieu of the number of Common Shares to which he was theretofore
      entitled upon exercise of the Option, the kind and amount of shares and
      other securities or property which such holder would have been entitled to
      receive as a result of such reclassification, change, consolidation,
      amalgamation, merger or transfer if, on the effective date thereof, he had
      been the holder of the number of Common Shares to which he was entitled
      upon exercise of the Option.

     Adjustments shall be made
successively whenever any event referred to in this section shall occur. For
greater certainty, the Optionee shall pay for the number of shares, other
securities or property as aforesaid, the amount the Optionee would have paid if
the Optionee had exercised the Option prior to the effective date of such
subdivision, redivision, consolidation or change of the Common Shares or such
reclassification, consolidation, amalgamation, merger or transfer, as the case
may be. 

	15. 	
      COSTS

	 	 	 	 
		
      The Company shall pay all costs of administering the
      Plan.

	 	 	 	 
	16. 	
      TERMINATION AND AMENDMENT

	 	 	 	 
		(a) 	
      The Board of Directors may, subject to Exchange or
      regulatory approval where required, amend this Plan or any outstanding
      Option at any time without shareholder approval, including in the
      following circumstances, provided that, in the case of any Option, no such
      amendment or revision may, without the consent of the Optionee, materially
      decrease the rights or benefits accruing to such Optionee or materially
      increase the obligations of such Optionee:

	 	 	 	 
			(i) 	
      amendments of a “housekeeping” nature including, but not
      limited to, of a clerical, grammatical or typographical nature;

	 	 	 	 
			(ii) 	
      to correct any defect, supply any information or
      reconcile any inconsistency in this Plan in such manner and to such extent
      as shall be deemed necessary or advisable to carry out the purposes of
      this Plan;

	 	(iii) 	
      a change to, including the acceleration of, the vesting
      provisions of any Option or this Plan;

	 	 	 
	 	(iv) 	
      amendments to reflect any changes in requirements of any
      regulatory authority or Exchange to which the Company is
subject;

	 	 	 
	 	(v) 	
      a change to the termination provisions of an Option which
      does not result in an extension beyond the Option Period;

	 	 	 
	 	(vi) 	
      in the case of any Option, the substitution of another
      award for the same or different type;

	 	 	 
	 	(vii) 	
      in the case of any Option, such amendments or revisions
      contemplated in Sections 13 and 14 of this Plan;

	 	 	 
	 	(viii) 	
      amendments to the definition of change in control for the
      purposes hereof;

	 	 	 
	 	(ix) 	
      the addition of a cashless exercise feature, payable in
      cash or securities of the Company; and

	 	 	 
	 	(x) 	
      a change to the class of Optionees that may participate
      under this Plan.

	 	(b) 	
      The Exercise Price of any outstanding Option granted
      hereunder to Insiders of the Company may not be reduced and the original
      Option Period may not be extended unless disinterested shareholder
      approval is obtained in accordance with the Exchange Policies.

	 	 	 
	 	(c) 	
      The Board of Directors may, subject where required to the
      approval of the Exchange and/or any applicable regulatory authority, from
      time to time suspend or terminate this Plan in whole or in part. No action
      by the Board of Directors to terminate this Plan pursuant to this
      Subsection 16(c) shall affect any Options granted hereunder which became
      effective pursuant to this Plan prior to such action.

	 	 	 
	 	(d) 	
      The Plan, and any amendments thereto, shall be subject to
      acceptance and approval by the Exchange. Any Options granted prior to such
      approval and acceptance shall be conditional upon such approval and
      acceptance being given and no such Options may be exercised unless and
      until such approval and acceptance are given.

	 	 	 
	 	(e) 	
      Notwithstanding any provision contained in this Plan,
      effective June 11, 2009, the Plan must be reconfirmed every three years by
      a resolution passed by a majority of the votes cast at a meeting of
      shareholders, and if this Plan is not reconfirmed by the shareholders as
      required by this provision, no further grants of Options may be made under
      this Plan.

	17. 	
      APPLICABLE LAW

     This Plan shall be governed by,
administered and construed in accordance with the laws of the Province of
British Columbia and the laws of Canada applicable therein. 

	18. 	
      PRIOR PLANS

     The Plan shall entirely replace and supersede prior stock
option plans, if any, enacted by the Company. 

	19. 	
      TAXES

     Upon the exercise of an Option,
the Optionee shall make arrangements satisfactory to the Company regarding the
payment of any taxes required by any applicable law to be paid in connection
with the exercise and/or surrender and exchange of the Option. In order to
satisfy the Company’s or any Subsidiaries’ obligation, if any, to 

remit an amount to a taxation authority on account of the
Optionee’s taxes in respect to the exercise and/or surrender and exchange or
other disposition of an Option (the “Withholding Tax Amount”), each of the
Company and applicable Subsidiary shall have the right, in its discretion, to:

(a) withhold amounts from any amount or
amounts owing to the Optionee, whether under this Plan or otherwise; 

(b) require the Optionee to pay to the
Company the Withholding Tax Amount as a condition to the exercise or surrender
and exchange of the Option by the Optionee; or 

(c) withhold from the Common Shares,
otherwise deliverable to the Optionee upon the exercise of the Option, such
number of Common Shares as have a market value (determined with reference to the
closing price of the Common Shares on the Exchange) not less than the
Withholding Tax Amount and cause such withheld Common Shares to be sold on the
Optionee’s behalf to fund the Withholding Tax Amount, provided that any proceeds
from such sale in excess of the Withholding Tax Amount shall be promptly paid
over to the Optionee. 

     Notwithstanding the foregoing,
nothing shall preclude the Company and the Optionee form agreeing to use a
combination of the methods described in this Section 19 or some other method to
fund the Withholding Tax Amount. 

	20. 	
      UNITED STATES SECURITIES LAW
    COMPLIANCE

All Common Shares issued pursuant to the Plan will be
issued pursuant to the registration requirements of the United States Securities
Act of 1933, as amended, or an exemption from such registration requirements.

	21. 	
      EFFECTIVE DATE

     This plan shall become effective
as of May 3, 2004, and has been amended and restated as of June 1, 2007, June
11, 2009 and June 12, 2012. 

END OF DOCUMENTAugusta Resource Corporation: Exhibit 4.2 - Filed by newsfilecorp.com

RESTRICTED SHARE UNIT AND RESTRICTED SHARE PLAN 

FOR

DESIGNATED PARTICIPANTS 

OF

AUGUSTA RESOURCE CORPORATION AND ITS AFFILIATES 

 

Adopted with effect from June 11, 2009, as amended and
restated as of June 12, 2012 and 
as of February 5, 2014 

ARTICLE 1 
INTERPRETATION 

	1. 	
      PREAMBLE AND DEFINITIONS

	 	 	 	 
		1.1 	
      Title. The Plan herein described shall be
      called the “Restricted Share Unit and Restricted Share Plan for
      Designated Participants of Augusta Resource Corporation and its
      Affiliates”.

	 	 	 	 
		1.2 	
      Purpose of the Plan.

	 	 	 	 
			
      The purposes of the Plan are to:

	 	 	 	 
			(a) 	
      promote further alignment of interests between Designated
      Participants and the shareholders of the Corporation;

	 	 	 	 
			(b) 	
      provide a compensation system for Designated Participants
      that is reflective of the responsibility, commitment and risk accompanying
      their management role over the medium term; and

	 	 	 	 
			(c) 	
      allow Designated Participants to participate in the
      success of the Corporation over the medium term.

	 	 	 	 
		1.3 	
      Definitions.

	 	 	 	 
			
      “Affiliate” means an “affiliate ” as
      defined in Section 1.2 of National Instrument 45-106 - Prospectus and
      Registration Exemptions, and for purposes of Section 1.2(b) thereof,
      “control” shall be interpreted with reference to Section 2.23
      thereof.

	 	 	 	 
			
      “Applicable Law” means any applicable provision of
      law, domestic or foreign, including, without limitation, applicable
      securities legislation, together with all regulations, rules, instruments,
      policy statements, rulings, notices, orders or other instruments
      promulgated thereunder and Stock Exchange Rules.

	 	 	 	 
			
      “Beneficiary” means any person designated by a
      Designated Participant by written instrument filed with the Board to
      receive any Shares or Restricted Shares issuable or amount payable on
      account of Restricted Share Units in the event of the Designated
      Participant’s death or, failing any such effective designation, the
      Designated Participant’s estate.

	 	 	 	 
			
      “Board” means the Board of Directors of the
      Corporation.

“Cause” means, unless otherwise
specified by an individual employment agreement or consulting contract: 

	 	(a) 	
      the failure of the Designated Participant to perform, in
      a material respect, his duties and responsibilities (including, in the
      case of a Consultant, those set out in a consulting contract between the
      Consultant and the Corporation or an Affiliate of the Corporation), or to
      follow, in a material respect, the lawful policies, procedures,
      instructions or directions of the Corporation or any applicable Affiliate
      of the Corporation, except as may result from the Disability of the
      Designated Participant, which failure is not cured by the Designated
      Participant within 10 days of being advised of that failure in writing by
      the Corporation or an Affiliate of the Corporation, as
  applicable;

	 	 	 
	 	(b) 	
      any fraudulent or violent activity on the part of the
      Designated Participant;

	 	 	 
	 	(c) 	
      the conviction of the Designated Participant for any
      crime involving fraud, misrepresentation or breach of trust;

	 	 	 
	 	(d) 	
      any financial impropriety, intentional dishonesty, breach
      of duty of loyalty or any intentional act on the part of the Designated
      Participant in discharging his duties and responsibilities of employment
      whether or not having the effect of materially injuring the reputation,
      business or business relationships of the Corporation or an Affiliate of
      the Corporation;

	 	 	 
	 	(e) 	
      in the case of a Designated Participant who is a director
      of the Corporation, the Designated Participant ceases to be a director of
      the Corporation as a result of a special resolution passed by the
      shareholders of the Corporation or an order of the British Columbia
      Securities Commission or other applicable regulatory authority;
  or

	 	 	 
	 	(f) 	
      any other act constituting cause at common
  law.

“Change in Control” means the
occurrence of any of the following events: 

	 	(a) 	
      any person, alone or together with any other persons with
      whom it is acting jointly or in concert, becomes the beneficial owner of,
      or acquires the power to exercise control or direction over, directly or
      indirectly, securities (or securities convertible into, or exchangeable
      for, such securities) representing twenty percent (20%) or more of the
      votes exercisable by holders of the then-outstanding securities generally
      entitled to vote for the election of directors (“Voting Shares”) of
      the Corporation or any persons that previously were not acting jointly or
      in concert commence acting jointly or in concert and together beneficially
      own, or have the power to exercise control or direction over, such
      securities;

	 	 	 
	 	(b) 	
      the Corporation is merged, amalgamated, consolidated or
      reorganized into or with another person and, as a result of such business
      combination, securities representing more than twenty percent (20%) of
      the votes exercisable by holders of the Voting Shares of the Corporation
      or such person into which the Voting Shares of the Corporation is
      converted immediately after such transaction are held by a person alone or
      together with any other persons with whom it is acting jointly or in
      concert and such person, together with those with whom it is acting
      jointly or in concert, held securities representing less than twenty
      percent (20%) of the votes exercisable by the holders of the Voting Shares
  of the Corporation immediately prior to such transaction;

	 	(c) 	
      the capital of the Corporation is reorganized and, as a
      result of such reorganization, securities representing more than twenty
      percent (20%) of the votes exercisable by the holders of the Voting Shares
      of the Corporation immediately after such reorganization are held by a
      person alone or together with any other persons with whom it is acting
      jointly or in concert and such person, together with those with whom it is
      acting jointly or in concert, held securities representing less than
      twenty percent (20%) of the votes exercisable by the holders of the Voting
      Shares of the Corporation immediately prior to such
  reorganization;

	 	 	 
	 	(d) 	
      the Corporation sells or otherwise transfers all or
      substantially all of its assets to another person and following such sale
      or transfer securities representing more that twenty percent (20%) of the
      votes exercisable by the holders of the Voting Shares of the acquiring
      person immediately after such transactions are held in the aggregate by a
      person alone or together with any other persons with whom it is acting
      jointly or in concert, and such person, together with those with whom it
      is acting jointly or in concert, held securities representing less than
      twenty percent (20%) of the votes exercisable by holders of the Voting
      Shares of the Corporation immediately prior to such transaction;
  or

	 	 	 
	 	(e) 	
      individuals who were elected by the shareholders to
      constitute the Board at the beginning of any one year term cease for any
      reason in such year to constitute more than 50% of the
  Board.

“Consultant” means, for
the Corporation, a person, other than an employee, senior officer or director of
the Corporation, that: 

	 	(f) 	
      is engaged to provide services to the Corporation or an
      Affiliate of the Corporation other than in relation to a distribution of
      the Corporation’s securities;

	 	 	 
	 	(g) 	
      provides the services under a written contract with the
      Corporation or an Affiliate of the Corporation;
and

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

and includes, for an individual
consultant, a corporation of which the individual consultant is an employee or
shareholder, and a partnership of which the individual consultant is an employee
or partner. 

“Corporation” means Augusta
Resource Corporation. 

“Designated Participant” means
such directors, officers, employees and Consultants of the Corporation or an
Affiliate of the Corporation as the Board may designate from time to time as
eligible to participate in the Plan pursuant to Section 4.1. 

“Disability” means, in the case
of an officer or employee of the Corporation or an Affiliate of the Corporation,
the Designated Participant’s physical or mental long-term inability to
substantially fulfil his duties and responsibilities on behalf of the
Corporation or, if applicable, an Affiliate of the Corporation in respect of
which the Designated Participant commences receiving, or is eligible to receive,
long-term disability benefits under a long-term disability plan of the
Corporation or an Affiliate of the Corporation. In the case of a Designated
Participant who is not a member of a long-term disability plan of the
Corporation or an Affiliate of the Corporation, “Disability” means a
physical or mental impairment that prevents the Designated Participant from
engaging in any employment for which the Designated Participant is reasonably
suited by virtue of the Designated Participant’s education, training or
experience and that can reasonably be expected to last for the remainder of the
Designated Participant’s lifetime, as determined by the Board. 

“Insider” means: 

	 	(a) 	
      an insider (as defined in Section 1(1) of the
      Securities Act (British Columbia)), except that a person who falls
      within that definition solely by virtue of being a director or senior
      officer of a subsidiary or an affiliate (as defined in Sections 1(1) and
      1(2), respectively, of the Securities Act (British Columbia)) of
      the Corporation shall not be an insider for purposes hereof, unless such
      director or senior officer:

	 	 	 	 
	 		(i) 	
      in the ordinary course receives or has access to
      information as to material facts or material changes concerning the
      Corporation before the material facts or material changes are generally
      disclosed;

	 	 	 	 
	 		(ii) 	
      is a director or senior officer of a major subsidiary (as
      defined in National Instrument 55- 101 - Insider Reporting Exemptions
      ); or

	 	 	 	 
	 		(iii) 	
      is an insider of the Corporation in a capacity other than
      as a director or senior officer of the subsidiary or affiliate of
  the Corporation; and 

	 	(b) 	
      an associate (as defined in Section 1(1) of the
      Securities Act (British Columbia)) or affiliate of the Corporation
      or any person who is an insider by virtue of clause (i)
  above.

“Market Value” of a Vested
Restricted Share Unit or a Share on any date means the closing trading price of
the Shares on the Toronto Stock Exchange immediately preceding the relevant
date; provided that if the Shares are suspended from trading or have not traded
on the Toronto Stock Exchange, the market price will be the fair market value of
the Shares as determined by the Board. 

“Performance Period” means a
period as specified by the Board in accordance with Section 4.2 in respect of
which a Designated Participant may be or become entitled to receive any Shares
issuable or amount payable on account of Restricted Share Units granted to such
Designated Participant. 

“Plan” means this Restricted
Share Unit and Restricted Share Plan for Designated Participants of
Augusta Resource Corporation and its Affiliates, including any schedules or
appendices hereto, all as amended or amended and restated from time to time.

“Restricted Period” means the
period as specified by the Board in accordance with section 4.2 in respect of
which Restricted Shares granted to a Designated Participant may become Shares
and not subject to any restrictions under the Plan. “Restricted Shares”
means restricted Shares granted to a Designated Participant subject to the terms
of this Plan.

“Restricted Share Unit Account”
has the meaning ascribed thereto in Section 10.1. 

“Restricted Share Units” means
a bookkeeping entry, denominated in Shares, credited to the Restricted Share
Unit Account of a Designated Participant in accordance with the provisions
hereof. 

“Retirement” means, in the case
of an officer or employee of the Corporation or an Affiliate of the Corporation,
the retirement of the Designated Participant from employment with the
Corporation or an Affiliate of the Corporation as applicable on or after age 65,
and “retires” shall have a corresponding meaning. The determination of
whether a Designated Participant has retired shall be at the sole discretion of
the Board. 

“Share” means a common share of
the Corporation as constituted on the date hereof and includes any rights
attached thereto which trade therewith. 

“Stock Exchange” means the
Toronto Stock Exchange, or such other stock exchange where the majority of
trading volume and value of the Shares occurs.

“Stock Exchange Rules” means
the applicable rules of the Stock Exchange. 

“Target Milestone” has the
meaning ascribed thereto in Section 4.3. 

“Termination Date” means: 

	 	(i) 	
      in the case of the death of a Designated Participant, the
      date of death;

	 	 	 	 
	 	(j) 	
      in the case of the Retirement of a Designated Participant
      who is an officer or employee of the Corporation or an Affiliate of the
      Corporation, the date on which the Designated Participant retires in
      accordance with the normal retirement policies of the Corporation or an
      Affiliate of the Corporation;

	 	 	 	 
	 	(k) 	
      in the case of the Disability of a Designated Participant
      who is an officer or employee of the Corporation or an Affiliate of the
      Corporation, the date on which:

	 	 	 	 
	 		(i) 	
      the Designated Participant commences receiving, or is
      eligible to receive, long-term disability benefits under a long-term
      disability plan of the Corporation or an Affiliate of the Corporation;
      or

	 	 	 	 
	 		(ii) 	
      if a Designated Participant is not a member of a
      long-term disability plan of the Corporation or an Affiliate of the
      Corporation, the date that the Designated Participant has suffered a
      physical or mental impairment that prevents the Designated Participant
      from engaging in any employment for which the Designated Participant is
      reasonably suited by virtue of the Designated Participant’s education,
      training or experience and that is reasonably expected to last for the
      remainder of the Designated Participant’s lifetime, as determined by the
      Board; and

	 	 	 	 
	 	(l) 	
      in the case of a Designated Participant being terminated
      without Cause, the date that is the later of:

	 	 	 	 
	 		(i) 	
      the date of termination; and

	 	 	 	 
	 		(ii) 	
      the date on which any notice or otherwise binding
      severance period expires (or, in the case of a Consultant, the date on
      which any agreed or otherwise binding notice of termination period
      expires);

	 	 	 	 
	 	(m) 	
      in the case of a Designated Participant that is a
      director of the Corporation or an Affiliate of the Corporation, the date
      that is the earliest date on which both of the following conditions are
      satisfied:

	 	 	 	 
	 		(i) 	
      the date on which the Designated Participant ceases to be
      a member of the Board for any reason whatsoever, including resignation,
      disability, death, retirement or loss of office as
a director; and

	 	(ii) 	
      the date on which the Designated Participant is neither
      an employee nor a member of the Board of the Corporation or any Affiliate
      of the Corporation;

	 	(n) 	
      in the case of a permitted assign of a Designated
      Participant, the Termination Date of the related Designated
      Participant;

provided that if any date determined
in accordance with the foregoing provisions is not a Trading Day, the
Termination Date shall be the Trading Day immediately preceding the date
determined in accordance with the above provisions. 

“Trading Day” means any date on
which the Stock Exchange is open for the trading of Shares and on which at least
a board lot of Shares actually traded. 

“Vested Restricted Share Units”
has the meaning ascribed thereto in Section 11.1. 

“Vested Restricted Shares” has
the meaning ascribed thereto in Section 14.1. 

	2. 	
      CONSTRUCTION AND INTERPRETATION

	 	 	 
		2.1 	
      Gender, Singular, Plural. In the Plan,
      references to the masculine include the feminine; and references to the
      singular shall include the plural and vice versa, as the context shall
      require.

	 	 	 
		2.2 	
      Severability. If any provision of the Plan
      or part hereof is determined to be void or unenforceable all or in part,
      such determination shall not affect the validity or enforcement of any
      other provision or part thereof.

	 	 	 
		2.3 	
      Headings, Sections. Headings wherever used
      herein are for reference purposes only and do not limit or extend the
      meaning of the provisions herein contained. A reference to a section or
      schedule shall, except where expressly stated otherwise, mean a section or
      schedule of the Plan, as applicable.

	 	 	 
		2.4 	
      References to Statutes, Etc. Any reference
      to a statute, regulation, rule, instrument, or policy statement shall
      refer to such statute, regulation, rule, instrument, or policy statement
      as the same may be amended, replaced or re- enacted from time to
    time.

	 	 	 
		2.5 	
      Currency. Except where expressly provided
      otherwise, all references in the Plan to currency refer to lawful Canadian
      currency, except that cash payments to Designated Participants who are
      residents of the United States at the time of payment shall be converted
      into and paid in U.S. currency at the exchange rate available to the
      Corporation at the time of conversion.

	3. 	
      EFFECTIVE DATE

	 	 	 
		3.1 	
      Effective Date. The Corporation is
      establishing the Plan, effective on June 11, 2009 and is amended and
      restated as of June 12, 2012 and as of February 5, 2014
..

ARTICLE 2 
GENERAL 

	4. 	
      TERMS OF GRANTS

	 	 	 	 
		4.1 	
      Grant of Restricted Share Units and Restricted
      Shares. The Board may make grants of Restricted Share Units or
      Restricted Shares to Designated Participants in such number as may be
      specified by the Board with effect from such date(s) as the Board may
      specify.

	 	 	 	 
		4.2 	
      Performance Periods and Restricted Periods.
      The Board will, in its sole discretion, determine the Performance Period
      or Restricted Period applicable to each grant of Restricted Share Units or
      Restricted Shares, as applicable, under Section 4.1.

	 	 	 	 
		4.3 	
      Determination of Target Milestones. The
      Board shall cause the Designated Participant’s Target Milestones to be
      determined for each Performance Period or Restricted Period at or prior to
      the time of granting Restricted Share Units or Restricted Shares, as
      applicable, to a Designated Participant for that Performance Period or
      Restricted Period. Target Milestones may be based on performance criteria,
      the passage of time or both.

	 	 	 	 
		4.4 	
      Limitations on Grants. Notwithstanding any
      other provision of the Plan:

	 	 	 	 
			(a) 	
      the aggregate number of Shares which may be issued upon
      the redemption of Restricted Share Units granted under this Plan and the
      number of Restricted Shares subject to a Restricted Period issued under
      this Plan, shall not at any time, when taken together with any Shares
      issuable under any other of the Corporation’s security based compensation
      arrangements then either in effect or proposed, exceed 10% of the issued
      and outstanding Shares from time to time;

	 	 	 	 
			(b) 	
      the maximum number of Shares issuable to Insiders of the
      Corporation, at any time, under all security based compensation
      arrangements of the Corporation, shall not exceed 10% of the issued and
      outstanding Shares; and

	 	 	 	 
			(c) 	
      the maximum number of Shares issued to Insiders of the
      Corporation, within any 12 month period, under all security based
      compensation arrangements of the Corporation, shall not exceed 10% of
      issued and outstanding Shares.

			
      For the purposes of this Section 4.4, the number of
      issued and outstanding Shares shall be determined on a non- diluted basis
      and, for the purposes of clause (c) of this Section 4.4, the number of
      issued and outstanding Shares shall exclude Shares issued pursuant to
      security based compensation arrangements during the preceding 12 month
      period. In addition, for purposes of clauses (b) and (c) of this Section
      4.4, securities granted prior to the Designated Participant becoming an
      Insider shall be excluded.

	 	 	 
			
      If any Restricted Share Unit or Restricted Share granted
      hereunder shall be cancelled for any reason without having been redeemed
      in full or without the Restricted Period expiring, as applicable, the
      Shares reserved for issuance or subject to such Restricted Period shall
      again be available for the purposes of the Plan.

	 	 	 
		4.5 	
      Notification and Acknowledgement. A
      Designated Participant shall complete and deliver to the Corporation a
      Restricted Share Unit Acknowledgement, in the form attached as Schedule A
      hereto, for a grant of Restricted Share Units, or a Restricted Share Grant
      Letter in the form attached as Schedule B hereto, for a grant of
      Restricted Shares, each within 90 days of the date the Designated
      Participant receives advice of the grant of Restricted Share Units or
      Restricted Shares, as applicable. If the applicable acknowledgement is not
      delivered within this time, the Board reserves the right to revoke the
      grant of the Restricted Share Units or Restricted Shares, as
      applicable.

	 	 	 
	5. 	
      ADJUSTMENTS

	 	 	 
		5.1 	
      Adjustments. In the event of any stock
      dividend, stock split, combination, exchange of shares, consolidation,
      spin-off or other capital reorganization or distribution (other than
      normal cash dividends) of corporate assets to shareholders, or any other
      similar changes affecting the Shares, such proportionate adjustments to
      reflect such change or changes shall be made with respect to the number of
      Restricted Share Units outstanding and Restricted Shares issued under the
      Plan , all as determined by the Board in its sole discretion.

	 	 	 
		5.2 	
      Change in Control. Subject to Stock
      Exchange and any other regulatory approvals (if required), and
      notwithstanding any other provision of this Plan, if a Designated
      Participant’s employment is terminated by the Corporation for any reason
      whatsoever (other than for Cause) within 6 months following a Change in
      Control, then, notwithstanding the achievement or non-achievement of the
      Target Milestones set forth in a Restricted Share Unit Acknowledgement or
      Restricted Share Grant Letter, all of the Restricted Share Units or
      Restricted Shares held by such Designated Participant shall be deemed
      hereunder to have been vested on the Termination Date, all such vested
      Restricted Share Units shall be redeemable on the Termination Date and all
      such vested Restricted Shares shall be unrestricted and no longer subject
      to the terms of the Plan, and, subject to Applicable Law, shall be freely
      transferable by the Designated Participant on the Termination
  Date.

	6. 	
      AMENDMENT OR TERMINATION

	 	 	 	 
		6.1 	
      Amendment. The Board may, subject where
      required by the Stock Exchange or regulatory approval, amend the Plan or
      any outstanding Restricted Share Unit or Restricted Share at any time
      without shareholder approval, including in the following circumstances,
      provided that, in the case of any outstanding Restricted Share Unit or
      Restricted Share, no such amendment or revision may, without the consent
      of the Designated Participant, materially decrease the rights or benefits
      accruing to such Designated Participant or materially increase the
      obligations of such Designated Participant:

	 	 	 	 
			(a) 	
      amendments of a “housekeeping” nature including, but not
      limited to, of a clerical, grammatical or typographical nature;

	 	 	 	 
			(b) 	
      to correct any defect, supply any information or
      reconcile any inconsistency in the Plan in such manner and to such extent
      as shall be deemed necessary or advisable to carry out the purposes of the
      Plan;

	 	 	 	 
			(c) 	
      in the case of any granted Restricted Share Unit or
      Restricted Share, amend, including the acceleration of, the vesting
      provisions, the Target Milestones, the Performance Period or Restricted
      Period;

	 	 	 	 
			(d) 	
      in the case of any granted Restricted Share Unit or
      Restricted Share, substitute another award for the same or different type
      or make such adjustments contemplated in Section 5.1 of the
Plan;

	 	 	 	 
			(e) 	
      amend the eligibility requirements of Designated
      Participants which would have the potential of broadening or increasing
      Insider participation; and

	 	 	 	 
			(f) 	
      amendments to reflect any changes in requirements of any
      regulatory authority or Stock Exchange to which the Corporation is
      subject.

	 	 	 	 
		6.2 	
      The Board may, subject where required to regulatory
      authority and/or Stock Exchange approval, from time to time, suspend or
      terminate the Plan in whole or in part. No action by the Board to
      terminate the Plan pursuant to this Section 6 shall affect any Restricted
      Share Units or Restricted Shares granted hereunder which became effective
      pursuant to the Plan prior to such action.

	 	 	 	 
		6.3 	
      Notwithstanding any provision contained in the Plan,
      effective June 11, 2009, the Plan must be reconfirmed, every three years,
      by a resolution passed by a majority of the votes cast by Shareholders at
      a meeting of Shareholders and if the Plan is not reconfirmed by the
      Shareholders as required by this provision, no further grants of
      Restricted Share Units or Restricted Shares may be made under the
    Plan.

	 	 	 	 
		6.4 	
      Notwithstanding Section 6.1, no amendments to the Plan to
      increase the number of Shares reserved for issuance under the Plan shall
      be made without obtaining approval of the shareholders in accordance with
      the requirements of the Stock Exchange.

		6.5 	
      Notwithstanding Section 6.1, no amendments to granted
      Restricted Share Units to extend the Performance Period beyond the
      original expiration date for the benefit of Insiders, other than in
      accordance with Section 7.3 hereof, shall be made without obtaining
      approval of the shareholders in accordance with the requirements of the
      Stock Exchange; and no action shall be taken with respect to granted
      Restricted Share Units or Restricted Shares without the consent of the
      Designated Participant, unless the Board determines that such action does
      not materially alter or impair such Restricted Share Unit or Restricted
      Share.

	 	 	 	 
		6.6 	
      No amendment, suspension or discontinuance of the Plan or
      of any granted Restricted Share Unit or Restricted Share may contravene
      the requirements of the Stock Exchange or any securities commission or
      regulatory body to which the Plan or the Corporation is now or may
      hereafter be subject to. Termination of the Plan shall not affect the
      ability of the Board to exercise the powers granted to it hereunder with
      respect to Restricted Share Units and Restricted Shares granted under the
      Plan prior to the date of such termination.

	 	 	 	 
	7. 	
      ASSIGNMENT

	 	 	 	 
		7.1 	
      Assignability. The Plan shall enure to the
      benefit of and be binding upon the Corporation and its Affiliates and
      their respective successors and assigns. Except as provided in Section
      7.2, the interest of any Designated Participant under the Plan or in any
      Restricted Share Units or Restricted Shares shall not be assignable,
      transferable or negotiable (whether by operation of law or otherwise) and
      may not be assigned or transferred other than by will or the laws relating
      to intestacy.

	 	 	 	 
		7.2 	
      Idem. Notwithstanding Section 7.1, a
      Designated Participant may, subject to the approval of the Board, transfer
      a Restricted Share Unit or Restricted Share to any of the following
      permitted assigns:

	 	 	 	 
			(a) 	
      a trustee, custodian or administrator acting on behalf of
      or for the benefit of the Designated Participant;

	 	 	 	 
			(b) 	
      a personal holding corporation, partnership, trust or
      other entity controlled by the Designated Participant; or

	 	 	 	 
			(c) 	
      a registered retirement income fund or a registered
      retirement savings plan (as each such term is defined in the Income Tax
      Act (Canada)) of the Designated Participant.

	 	 	 	 
		7.3 	
      Trading Black-Out Periods. If a Restricted
      Share Unit expires or is redeemed during or within five business days
      after a trading black-out period imposed by the Corporation to restrict
      trades in the Corporation’s securities, then, notwithstanding any other
      provision of the Plan, the Restricted Share Unit shall expire or be
      redeemed 10 business days after the trading black- out period is lifted by
      the Corporation.

ARTICLE 3 
TERMS AND CONDITIONS OF RESTRICTED SHARE
UNITS 

	8. 	
      TERMS OF GRANT

	 	 	 
		8.1 	
      Performance Period. Unless otherwise
      specified by the Board to be a shorter period, the Performance Period
      applicable to a grant of Restricted Share Units will commence on the
      January 1 coincident with or immediately preceding the grant and end on
      December 31 of the third year following the calendar year in which such
      Restricted Share Units were granted.

	 	 	 
		8.2 	
      No Certificates. No certificates shall be
      issued with respect to Restricted Share Units.

	 	 	 
		8.3 	
      No Rights as Shareholders. Restricted Share
      Units are not Shares and the grant of Restricted Share Units will not
      entitle a Designated Participant to any shareholder rights, including,
      without limitation, voting rights, dividend entitlement or rights on
      liquidation.

	 	 	 
	9. 	
      RESERVATION OF SHARES

	 	 	 
		9.1 	
      Sufficient Authorized Shares to be
      Reserved. The Board shall reserve a sufficient number of Shares to
      satisfy the redemption of Restricted Share Units granted under the Plan.
      Shares that are the subject of Restricted Share Units that have failed to
      vest or are redeemed for cash shall thereupon no longer be in reserve and
      may once again be subject to Restricted Share Units granted under the
      Plan.

	 	 	 
	10. 	
      ACCOUNTS AND DIVIDEND EQUIVALENTS

	 	 	 
		10.1 	
      Restricted Share Unit Account. An account,
      to be known as a “Restricted Share Unit Account”, shall be
      maintained by the Corporation for each Designated Participant and shall be
      credited with such notional grants of Restricted Share Units as are
      received by a Designated Participant. The Designated Participant’s
      Restricted Share Unit Account shall indicate the number of Restricted
      Share Units which have been credited to such account from time to
    time.

	 	 	 
		10.2 	
      Dividend Equivalent Restricted Share Units.
      Whenever cash dividends are paid on the Shares, additional Restricted
      Share Units will be credited to the Designated Participant’s Restricted
      Share Unit Account in accordance with this Section 10.2. The number of
      such additional Restricted Share Units will be calculated by dividing the
      cash dividends that would have been paid to such Designated Participant if
      the Restricted Share Units recorded in the Designated Participant’s
      Restricted Share Unit Account as at the record date for the dividend had
      been Shares by the Market Value on the Trading Day immediately preceding
      the date on which the Shares began to trade on an ex-dividend basis,
      rounded down to the next whole number of Restricted Share Units.
  No fractional Restricted Share Units will thereby be created.

		10.3 	
      Cancellation of Restricted Share Units that Fail to
      Vest or Are Redeemed. Restricted Share Units that fail to vest in
      a Designated Participant in accordance with the Plan, or that are redeemed
      in accordance with the Plan, shall be cancelled and shall cease to be
      recorded in the Designated Participant’s Restricted Share Unit Account as
      of the date on which such Restricted Share Units fail to vest or are
      redeemed, as the case may be, and the Designated Participant will have no
      further right, title or interest in such Restricted Share Units.

	 	 	 
	11. 	
      VESTING OF RESTRICTED SHARE UNITS

	 	 	 
		11.1 	
      Vesting. Restricted Share Units granted to
      a Designated Participant under Section 4.1 in respect of a Performance
      Period, and dividend equivalent Restricted Share Units granted to the
      Designated Participant in respect of such Restricted Share Units under
      Section 10.2, shall vest in accordance with this Section 11. Except where
      the context requires otherwise, each Restricted Share Unit which is vested
      pursuant to this Section 11 shall be referred to herein as a “Vested
      Restricted Share Unit”.

	 	 	 
		11.2 	
      Vesting of Restricted Share Units Based on
      Designated Participant’s Target Milestones. Unless otherwise
      specified by the Board, 1 subject to the remaining provisions
      of this Section 11, Restricted Share Units granted to a Designated
      Participant in respect of a Performance Period under Section 4.1, and
      dividend equivalent Restricted Share Units granted to the Designated
      Participant in respect of such Restricted Share Units under Section 10.2,
      shall vest based upon the Designated Participant’s performance toward
      Target Milestones for that Performance Period (as determined by the Board
      acting reasonably), in accordance with the vesting schedule established by
      the Board at the time of the grant and as set out in the Restricted Share
      Unit Acknowledgement.

	 	 	 
		11.3 	
      Vesting on Death, Retirement, Disability or
      Termination without Cause. Unless otherwise determined by the
      Board, and subject to Section 11.4, if a Designated Participant dies
      during a Performance Period, or if a Designated Participant who is an
      officer or employee of the Corporation or an Affiliate of the Corporation
      retires or suffers a Disability during a Performance Period, or if a
      Designated Participant is terminated without Cause during a Performance
      Period (or, in the case of a Consultant, if the consulting contract
      between the Corporation or an Affiliate of the Corporation and the
      Designated Participant is terminated by the Corporation or its Affiliate
      without Cause and not in accordance with the terms thereof), or if a
      Designated Participant who is a director of the Corporation or an
      Affiliate of the Corporation who ceases to be a director and is not or is
      no longer an employee of the Corporation
or an Affiliate of the Corporation, and the Designated Participant’s Target
Milestones for that Performance Period have not been met, the following
provisions shall apply to the Restricted Share Units granted to a Designated
Participant under Section 4.1, and the dividend equivalent Restricted Share
Units granted to the Designated Participant in respect of such Restricted Share
Units under Section 10.2: 

	__________________________
	1 	
      If no vesting period is specified (e.g., if incentive
      stock grants are rolled into the Plan and become immediately exercisable)
      redemption of Restricted Share Units must be made as soon as practicable
      after the grants become exercisable.

	 	(a) 	
      where the Designated Participant’s performance toward
      such Target Milestones can be objectively measured, the vesting of such
      Restricted Share Units shall be in accordance with the proportional
      achievement of the Target Milestone as determined by the Board, acting
      reasonably; and

	 	 	 
	 	(b) 	
      where the Designated Participant’s performance toward
      such Target Milestones cannot be objectively measured but the Board
      considers that it can nevertheless measure such performance, the
      provisions of (a) above shall apply, mutatis mutandis, in respect of such
      performance so measured.

	 	11.4 	
      Employment or Consulting Contracts.
      Notwithstanding any other provision of the Plan, Restricted Share Units
      shall vest in accordance with the terms and conditions of any employment
      or consulting contract between the Corporation or an Affiliate of the
      Corporation and the Designated Participant.

	12. 	
      REDEMPTION OF RESTRICTED SHARE UNITS

	 	 	 	 
		12.1 	
      Designated Participant Continuing in Employment or
      Under Contract. Subject to the remaining provisions of this
      Section 12, each Designated Participant who continues as a director or
      officer of or in employment by or under contract with the Corporation or
      an Affiliate of the Corporation shall have the right to receive, and shall
      receive, with respect to all Restricted Share Units that are Vested
      Restricted Share Units as at the last day of the Performance Period as
      provided herein (or such earlier date in the case of Vested Restricted
      Share Units that are redeemable immediately upon the achievement of Target
      Milestones) at the election of the Board in its sole discretion:

	 	 	 	 
			(a) 	
      a cash payment equal to the Market Value of such Vested
      Restricted Share Units as of the date of redemption;

	 	 	 	 
			(b) 	
      such number of treasury Shares duly issued by the
      Corporation as are equal to the number of such Vested Restricted Share
      Units; or

	 	 	 	 
			(c) 	
      any combination of the foregoing, such that the cash
      payment, plus such number of treasury Shares duly issued by the
      Corporation, have a value equal to the Market Value of such Vested
      Restricted Share Units as of the date of
redemption;

in each case at the end of the
Performance Period, or such earlier date in the case of Vested Restricted Share
Units that are redeemable immediately upon the achievement of Target Milestones.

	 	12.2 	
      Redemption on Death, Retirement, Disability or
      Termination without Cause. Unless otherwise determined by the
      Board, if a Designated Participant dies during a Performance Period, or if
      a Designated Participant who is an officer or employee of the Corporation
      or an Affiliate of the Corporation retires or suffers a Disability during
      a Performance Period, or if a Designated Participant is terminated without
      Cause during a Performance Period (or, in the case of a Consultant, if the
      consulting contract between the Corporation or an Affiliate of the
      Corporation and the Designated Participant is terminated by the
      Corporation or its Affiliate without Cause and not in accordance with the
      terms thereof), or if a Designated Participant who is a director of the
      Corporation or an Affiliate of the Corporation who ceases to be a director
      and is not or is no longer an employee of the Corporation or an Affiliate
      of the Corporation, and the Designated Participant’s Target Milestones for
      that Performance Period have not been met, the Designated Participant or
      his Beneficiary, if applicable, shall have the right to receive, and shall
      receive, with respect to all Restricted Share Units that are Vested
      Restricted Share Units as determined in accordance with Section 11.3(a) or
      11.3(b), mutatis mutandis, as at the Termination Date, at the election of
      the Board in its sole discretion:

	 	(a) 	
      a cash payment equal to the Market Value of such Vested
      Restricted Share Units as of the date of redemption;

	 	 	 
	 	(b) 	
      such number of treasury Shares duly issued by the
      Corporation as are equal to the number of such Vested Restricted Share
      Units; or

	 	 	 
	 	(c) 	
      any combination of the foregoing, such that the cash
      payment, plus such number of treasury Shares duly issued by the
      Corporation, have a value equal to the Market Value of such Vested
      Restricted Share Units as of the date of
redemption;

in each case as soon as practicable
following the Termination Date. 

	 	12.3 	
      Termination for Cause and Voluntary Termination
      During Performance Period. Unless otherwise determined by the
      Board, if the employment of a Designated Participant is terminated for
      Cause, or if the Designated Participant terminates his employment with the
      Corporation or an Affiliate of the Corporation for any reason other than
      the circumstances specified in Section 12.2, the Designated Participant
      shall not be entitled to be issued any cash or treasury Shares on account
      of Restricted Share Units relating to the Performance Period(s) in which
      the Designated Participant’s employment terminates and any such Restricted
      Share Units recorded in the Designated Participant’s Restricted Share Unit
      Account shall be cancelled.

ARTICLE 4 
TERMS AND CONDITIONS OF RESTRICTED
SHARES 

	13. 	
      TERMS OF GRANT

	 	 	 
		13.1 	
      Rights as Shareholder. Designated
      Participants who are granted Restricted Shares shall have, in respect of
      such Restricted Shares, all rights as a shareholder of the Corporation,
      including, without limitation, voting rights, dividend entitlement in
      respect of the Restricted Shares and rights on liquidation, and for all
      purposes will be treated as shareholders of the Corporation, but for the
      fact that the Restricted Shares may be cancelled or terminated in certain
      circumstances and may not be transferred by the Designated Participant,
      prior to the expiry of the Restricted Period.

	 	 	 
		13.2 	
      Restricted Period. Unless otherwise
      specified by the Board to be a shorter period, the Restricted Period in
      respect of any Restricted Share shall commence on the date of the grant of
      such Restricted Share and shall continue until December 31 of the third
      year following the calendar year in which such Restricted Share was
      granted.

	 	 	 
		13.3 	
      Cancellation of Restricted Shares that Fail to
      Vest. Restricted Shares that fail to vest to a Designated
      Participant in accordance with the Plan shall be cancelled as of the date
      on which such Restricted Shares fail to vest and the Designated
      Participant will have no further right, title or interest in such
      Restricted Shares.

	 	 	 
	14. 	
      VESTING OF RESTRICTED SHARES

	 	 	 
		14.1 	
      Vesting. Restricted Shares granted to a
      Designated Participant under Section 4.1 in respect of a Restricted Period
      shall vest in accordance with this Section 14. Except where the context
      requires otherwise, each Restricted Share which is vested pursuant to this
      Section 14 shall be referred to herein as a “Vested Restricted
      Share”. All Vested Restricted Shares shall be unrestricted and no
      longer subject to the terms of the Plan, and, subject to Applicable Law,
      shall be freely transferable by the Designated Participant.

	 	 	 
		14.2 	
      Vesting of Restricted Shares Based on Designated
      Participant’s Target Milestones. Unless otherwise specified by the
      Board, subject to the remaining provisions of this Section 14, Restricted
      Shares granted to a Designated Participant in respect of a Restricted
      Period under Section 4.1, shall vest based upon the Designated
      Participant’s performance toward Target Milestones for that Restricted
      Period (as determined by the Board acting reasonably), in accordance with
      the vesting schedule established by the Board at the time of the grant and
      as set out in the Restricted Share Grant Letter.

	 	 	 
		14.3 	
      Vesting on Death, Retirement, Disability or
      Termination without Cause. Unless otherwise determined by the
      Board, and subject to Section 14.4, if a Designated Participant dies
      during a Restricted Period, or if a Designated Participant who is an
      officer or employee of the Corporation or an Affiliate of
  the Corporation retires or suffers a
Disability during a Restricted Period, or if a Designated Participant is
terminated without Cause during a Restricted Period (or, in the case of a
Consultant, if the consulting contract between the Corporation or an Affiliate
of the Corporation and the Designated Participant is terminated by the
Corporation or its Affiliate without Cause and not in accordance with the terms
thereof), or if a Designated Participant who is a director of the Corporation or
an Affiliate of the Corporation who ceases to be a director and is not or is no
longer an employee of the Corporation or an Affiliate of the Corporation, and
the Designated Participant’s Target Milestones for that Restricted Period have
not been met, the following provisions shall apply to the Restricted Shares
granted to a Designated Participant under Section 4.1: 

	 	(a) 	
      where the Designated Participant’s performance toward
      such Target Milestones can be objectively measured, the vesting of such
      Restricted Shares shall be in accordance with the proportional achievement
      of the Target Milestone as determined by the Board, acting reasonably;
      and

	 	 	 
	 	(b) 	
      where the Designated Participant’s performance toward
      such Target Milestones cannot be objectively measured but the Board
      considers that it can nevertheless measure such performance, the
      provisions of (a) above shall apply, mutatis mutandis, in respect of such
      performance so measured.

	 	14.4 	
      Employment or Consulting Contracts.
      Notwithstanding any other provision of the Plan, Restricted Shares
      shall vest in accordance with the terms and conditions of any employment
      or consulting contract between the Corporation or an Affiliate of the
      Corporation and the Designated Participant.

	15. 	
      CANCELLATION OF RESTRICTED SHARES

	 	 	 
		15.1 	
      Cancellation on Death, Retirement, Disability or
      Termination without Cause. Unless otherwise determined by the
      Board, if a Designated Participant dies during a Restricted Period, or if
      a Designated Participant who is an officer or employee of the Corporation
      or an Affiliate of the Corporation retires or suffers a Disability during
      a Restricted Period, or if a Designated Participant is terminated without
      Cause during a Restricted Period (or, in the case of a Consultant, if the
      consulting contract between the Corporation or an Affiliate of the
      Corporation and the Designated Participant is terminated by the
      Corporation or its Affiliate without Cause and not in accordance with the
      terms thereof), or if a Designated Participant who is a director of the
      Corporation or an Affiliate of the Corporation who ceases to be a director
      and is not or is no longer an employee of the Corporation or an Affiliate
      of the Corporation, and the Designated Participant’s Target Milestones for
      that Restricted Period have not been met, the Designated Participant or
      his Beneficiary, if applicable, shall have the right to retain, and shall
      retain, the Vested Restricted Shares, as determined in accordance with
      Section 14.3(a) or 14.3(b), mutatis mutandis, as at the Termination Date,
      at the election of the Board in its sole discretion, and all remaining
  Restricted Shares shall be cancelled.

	 	15.2 	
      Termination for Cause and Voluntary Termination
      During Performance Period. Unless otherwise determined by the
      Board, if the employment of a Designated Participant is terminated for
      Cause, or if the Designated Participant terminates his employment with the
      Corporation or an Affiliate of the Corporation for any reason other than
      the circumstances specified in Section 15.1, the Designated Participant
      shall not be entitled to retain any Shares on account of Restricted Shares
      relating to the Restricted Period(s) in which the Designated Participant’s
      employment terminates and any such Restricted Shares shall be
      cancelled.

	16. 	
      UNITED STATES SECURITIES LAWS

	 	 	 
		16.1 	
      Compliance with United States Securities
      Laws. All Shares issued pursuant to the Plan will be issued
      pursuant to the registration requirements of the United States Securities
      Act of 1933, as amended, or an exemption from such registration
      requirements.

ARTICLE 5 
ADMINISTRATION 

	17. 	
      ADMINISTRATION

	 	 	 
		17.1 	
      Board. Unless otherwise determined by the
      Board, the Plan shall be administered by the Board.

	 	 	 
		17.2 	
      Compliance with Laws and Policies. Each
      Designated Participant shall acknowledge and agree (and shall be
      conclusively deemed to have so acknowledged and agreed by participating in
      the Plan) that the Designated Participant will, at all times, act in
      strict compliance with Applicable Law and all other laws and any policies
      of the Corporation applicable to the Designated Participant in connection
      with the Plan. Such laws, regulations, rules and policies shall include,
      without limitation, those governing “insiders” of “reporting issuers” as
      those terms are construed for the purposes of applicable securities laws,
      regulations and rules.

	 	 	 
		17.3 	
      No Distribution. Where necessary to effect
      exemptions from registration and prospectus requirements or registration
      of the Restricted Shares under securities laws applicable to the
      securities of the Corporation, a Designated Participant shall be required,
      upon receipt of any Restricted Shares pursuant to the Plan, to hold the
      Restricted Shares with investment intent (i.e. for investment purposes)
      and not with a view to their distribution, and to present to the
      Corporation an undertaking to that effect in a form acceptable to the
      Corporation. The Board may take such other action or require such other
      action or agreement by such Designated Participant as may from time to
      time be necessary to comply with applicable securities laws. This
      provision shall in no way obligate the Corporation
to undertake the filing of a prospectus or other similar
      document or registration of the Restricted Shares under any securities
  laws applicable to the securities of the Corporation.

	 	17.4 	
      Delegation. The Board may delegate to any
      director, officer or employee of the Corporation such duties and powers
      relating to the Plan as it may see fit.

	 	 	 
	 	17.5 	
      Subject to Law. The Corporation’s issuance
      of any Restricted Share Units or Restricted Shares or its obligation to
      issue Shares or to make any payment under the terms of the Plan is subject
      to compliance with Applicable Laws. As a condition of participating in the
      Plan, each Designated Participant agrees to comply with all such
      Applicable Laws and agrees to furnish to the Corporation all information
      and undertakings as may be required to permit compliance with Applicable
      Law. Issuance, transfer or delivery of certificates of Restricted Share
      Units, Restricted Shares or Shares or payment of any amount payable
      pursuant to the Plan may be delayed, at the discretion of the Board, until
      the Board is satisfied that the applicable requirements of securities and
      income tax laws have been met.

	 	 	 
	 	17.6 	
      Withholding. The Board may take all such
      measures as it deems appropriate to ensure that the Corporation’s
      obligations under the withholding provisions under income tax laws
      applicable to the Corporation and the Designated Participants and other
      provisions of applicable laws are satisfied with respect to the grant of
      the Restricted Share Units or Restricted Shares under the Plan, including
      without limiting the generality of the forgoing, the withholding of all or
      any portion of any payment or the withholding of the grant of Restricted
      Share Units, Restricted Shares or Shares or payment of any amount payable,
      until such time as the Designated Participant has paid the Corporation or
      any Affiliate of the Corporation for any amount which the Corporation or
      the Affiliate of the Corporation is required to withhold with respect to
      such taxes.

	 	 	 
	 	17.7 	
      No Employment or Additional Rights. Nothing
      herein contained shall be deemed to give any person the right to be
      retained as a director, officer, employee or Consultant of the Corporation
      or of an Affiliate of the Corporation. For greater certainty, a period of
      notice, if any, or payment in lieu thereof, upon termination of
      employment, wrongful or otherwise, shall not be considered as extending
      the period of employment for the purposes of the Plan. Neither designation
      of an employee as a Designated Participant nor the grant of any Restricted
      Share Units to any Designated Participant entitles any Designated
      Participant to the grant, or any additional grant, as the case may be, of
      any Restricted Share Units under the Plan.

	 	 	 
	 	17.8 	
      Administration Costs. The Corporation will
      be responsible for all costs relating to the administration of the
      Plan.

	 	 	 
	 	17.9 	
      No Obligation to Fund or Secure. Unless
      otherwise determined by the Board, the Plan, including any right or
      entitlement of a Designated Participant
hereunder, shall remain an unfunded and unsecured obligation of the
  Corporation and any applicable Affiliates of the Corporation.

	 	17.10 	
      Legality of Delivery. No Share shall be
      delivered under the Plan unless and until the Board has determined that
      all provisions of Applicable Law have been satisfied. The Board may
      require, as a condition of the issuance and delivery of Shares pursuant to
      the terms hereof, that the recipient of such Shares make such covenants,
      agreements and representations, as the Board in its sole discretion deems
      necessary or desirable.

	 	 	 
	 	17.11 	
      Certificates. The delivery of
      treasury Shares under the Plan shall be effected on a non-certificated
      basis, to the extent not prohibited by Applicable Law.

	 	 	 
	 	17.12 	
      No Fractional Shares. The Corporation shall
      not be required to issue fractional Shares on account of the redemption of
      Restricted Share Units. If any fractional interest in a Share would,
      except for this provision, be deliverable on account of the redemption of
      Restricted Share Units, the Corporation shall, in lieu of delivering any
      certificate of such fractional interest, satisfy such fractional interest
      by paying to the Designated Participant or his Beneficiary, if applicable,
      a cash amount equal to the fraction of the Share corresponding to such
      fractional interest multiplied by the Market Value of such
Share.

	 	 	 
	 	17.13 	
      No Interest. For greater certainty, no
      interest shall accrue to, or be credited to, the Designated Participant on
      any amount payable under the Plan.

	 	 	 
	 	17.14 	
      Rules for Administration and
      Interpretation. The Board may enact rules and regulations relating
      to the administration and interpretation of the Plan and may amend such
      rules and regulations from time to time. The Board shall have the
      authority to decide conclusively all matters relating to the
      administration, application and interpretation of the
  Plan.

END OF DOCUMENT

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