Document:

Exhibit 10.1

 

021910

 

Forest
Oil Corporation

 

Annual
Incentive Plan

 

2010

 

 

 

 

 

Forest
Oil Corporation

2010
Annual Incentive Plan

 

Summary

 

Plan Objectives

 

The Annual Incentive Plan
(the “Plan”) has been designed to meet the following objectives:

 

·                  Provide an annual incentive plan
framework that is performance-driven and focused on objectives that are
critical to the Company’s success.

 

·                  Offer competitive cash
compensation opportunities to all key employees.

 

·                  Reward outstanding
achievement.

 

Basic Plan Concept

 

The Plan generally
provides annual incentive awards, which will be determined primarily on the
basis of the Company’s consolidated results on selected financial, operating
and other performance measures.  However,
business unit or department performance and individual performance will also be
considered in determining the actual participant award payout.  Therefore, the Company shall have the
flexibility to adjust individual awards to reflect individual or team
performance.

 

Performance Measures
and Weights

 

Each year the Company
will establish the threshold, target and outstanding performance levels on each
performance measure and its appropriate weighting.  These performance measures and their
weighting will be reviewed (and modified, if appropriate) in light of changing
Company priorities and strategic objectives.

 

The Company has also
established performance objectives for each business unit and department for 2010,
the achievement of which will be determined by the President and Chief Executive
Officer (the “CEO”) at year end, subject to the confirmation of the
Compensation Committee of the Board of Directors (the “Committee”).

 

The 2010 Company
performance measures and their relative weightings are described below.

 

Plan Administration

 

The Plan will be
administered by the Committee and the CEO (for all positions except his
own).  Certain elements of the Plan administration
will be delegated to the senior

 

 

Human Resources executive
of the Company.  The Executive Vice
President and Chief Financial Officer will verify the performance calculation
for the performance and operating measures in consultation with the Senior Vice
President, Business Development & Engineering, who shall be
responsible for the estimation of the Company’s oil and gas reserves.

 

Actual performance goals,
standards, award determinations and modifications to the Plan design must be
approved by the Committee.

 

	
  Measure

  	
   

  	
  Weighting

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Shareholder Return

  	
   

  	
  20

  	
  %

  
	
  Cash Cost

  	
   

  	
  15

  	
  %

  
	
  Business Unit/Department Performance Objectives

  	
   

  	
  20

  	
  %

  
	
  Production

  	
   

  	
  25

  	
  %

  
	
  Rate of Return on Capital Investments

  	
   

  	
  20

  	
  %

  
	
  Total Financial and Operating Objectives

  	
   

  	
  100

  	
  %

  

 

Once the total bonus pool
has been established following the performance calculations, the CEO shall have
the discretion to distribute bonus monies within business units and the
corporate group or to move monies from one group to another, and to allocate incentive
monies to individuals, based on his assessment (with the advice of senior
management) as to individual or group performance.

 

Targets

 

Targets for the total
Plan will be set consistent with the following:

 

·                  Threshold – Minimum level at which payout
occurs.  The threshold percentage is 25%
of the target award percentage.

 

·                  Target – Level at which the participant receives
the target award percentage.

 

·                  Outstanding – Level at which the participant
receives 200% of the target award percentage.

 

Completion percentages
between Threshold, Target and Outstanding will be determined, with the
exception of those for Total Shareholder Return and Business Unit and
Department Performance Objectives, by interpolation.  Completion for results above Outstanding will
be directly proportional to the change in completion between Target and
Outstanding.

 

The Completion Percentage
for Total Shareholder Return is defined in the section describing the Total
Shareholder Return measure.

 

A Completion Percentage
for each business unit and department with regard to its Business Unit/Department
Performance Objectives will be assigned at year end by the

 

 

CEO following a thorough
review of its activities and accomplishments. 
The assigned Completion Percentage on Business Unit/Department
Performance Objectives for each business unit or department will be included in
the calculation of the Overall Completion Percentage for that business unit or
department in the same manner as is the Completion Percentage on other
performance measures.

 

Targets shall be adjusted
for material changes made during the year to the business plan or scope
thereof, including the capital expenditure budget.

 

Maximum Completion

 

Although there will be no
limit on completion of individual financial measures, completion for the total
Plan will be limited to 200% of target.

 

Performance Levels

 

Performance levels will
be set for individual measures.  Results
below the Threshold will equate to a zero completion percentage.

 

A minimum 25% completion
threshold is required for the total Plan.

 

Completion
Calculation

 

Completion for total
financial measures will be the sum of the weighted completion percentage for
each individual measure.  Completion for
each individual measure will be equal to the completion percentage of each
measure times the weighting for that measure.

 

Property Sales

 

In computing results,
non-budgeted property sales are not to be considered.  To avoid non-budgeted property sales from
affecting results, they will be incorporated into performance measures as
though they had been budgeted.

 

Participants

 

The CEO shall determine
which employees are to be participants in the Plan.  If a participant’s employment with the
Company terminates for any reason prior to payment, no bonus award will
be paid.

 

The target award
percentage for the CEO is established by the Committee. Target award
percentages for Company officers are subject to the approval of the Committee. The
CEO is authorized to establish and adjust at his discretion the target award
percentages for non-officer Plan participants. Plan participants who change
positions

 

 

and/or have their individual
target incentive levels changed during the Plan year will have their award
prorated accordingly.  All awards paid
will be rounded to the nearest $100.

 

Incentive compensation
awards will be calculated based upon the participant’s base salary in effect at
the end of the Plan year or earned salary during the Plan year if the
participant was a new hire during the year.

 

Board of Directors’
Discretion

 

The granting of
any and all incentive compensation awards is at the discretion of the Forest
Oil Corporation Board of Directors.

 

 

Forest
Oil Corporation

Financial
Measure

Total
Shareholder Return

 

Objective

 

Measure Total Return to
Shareholders relative to a peer group.

 

Definition

 

Total Return to
Shareholders equals year-end share price plus common dividends per share paid
(plus capital returned to shareholders through share repurchase) during the
Plan year minus the beginning share price divided by beginning share price.

 

Share Price

 

Year-end share price
shall be defined as the closing price on the last trading day in December of
each year.  The beginning share price
shall be defined as the closing price on the last trading day in December of
the prior year (2009).

 

In the event either the
Company or a member of the peer group is acquired for cash, the year-end share
price shall be defined as the cash purchase price per share.  If a member of the peer group is acquired for
stock, the year-end share price shall be defined as the exchange ratio
multiplied by the closing price of the acquirer on the last trading day of the year.  In an acquisition involving both cash and
stock, each component of the purchase price will be measured as described above
to calculate a pro forma year-end stock price.

 

Peer Group

 

The peer group shall comprise
companies selected by the Committee that reflect the size, operational
complexities and business challenges faced by Forest Oil.

 

Completion
Percentage

 

The Completion Percentage
will be determined based on the Company’s ranking among the selected peer companies
with regard to Total Shareholder Return.

 

 

Forest
Oil Corporation

Financial
Measure

Cash Cost

 

Objective

 

Measure cash cost on an
annual basis.

 

Definition

 

Corporate:  The sum of direct operating expense and
expensed workovers, but excluding ad valorem taxes, transportation expense and
total expensed G&A for the Company, divided by total production for the
Company measured in MCFE.

 

Business Unit:  The sum of direct operating expense and
expensed workovers, but excluding ad valorem taxes, transportation expense, allocated
corporate G&A expense for the business unit, and total expensed G&A administrative
costs for the Company, divided by production for the business unit measured in
MCFE.

 

Cash
Cost excludes production severance taxes. 
Additionally, the calculation of Cash Cost for the Canadian business unit
shall be calculated at the Plan exchange rate ignoring any variance between the
actual exchange rate and the exchange rate assumed in the Plan.

 

Targets

 

Measured against the approved
2010 Business Plan with:

 

·                  Threshold equal to achievement of 105% of
Business Plan objective

 

·                  Target equal to achievement of 100% of
Business Plan objective

 

·                  Outstanding equal to achievement of 90%
of Business Plan objective

 

 

  Forest Oil Corporation

Business
Unit and Department Performance Objectives

 

Objective

 

Measure
the achievement of
key objectives that are established for each business unit and department for
each year.

 

Definition

Objectives
that are key to the success of each business unit or department in support of
the 2010 Business Plan have been established by the CEO.  Established objectives are specific to each
business unit or department, well-defined and to the extent possible,
measurable.

 

 

 Forest Oil
Corporation

Operating Measure

Production

 

Objective

 

Measure net
production on an annual basis.

 

Definition

 

Net production
equals total net production (after royalty and other burdens) equal to that set
forth in the 2010 Business Plan.

 

Should a business
unit overspend budgeted Capex significantly, the Production target will either
be proportionately adjusted or the target level will become the threshold for
payout under this measure.

 

The calculation of
net production volumes for the Canadian business unit shall be calculated as if
Plan oil and gas prices were experienced, with no volume adjustments being made
for higher or lower prices.

 

Targets

 

Measured against an
approved Annual Plan with:

 

·                  Threshold equal to achievement of 95% of
Business Plan objective

 

·                  Target equal to achievement of 100% of
Business Plan objective

 

·                  Outstanding equal to achievement of 110% of
Business Plan objective

 

 

Forest
Oil Corporation

Financial
Measure

Rate-of-Return
on Capital Investments

 

Objective

 

Measure on a yearly
basis, the pre-tax rate-of-return (“ROR”) on all capital projects.

 

Definition

 

Pre-tax rate-of-return on
all capital projects during the year including drilling projects, acquisitions,
recompletions, land lease, seismic and capitalized G&A.  The price assumptions to be utilized will be
those utilized for the Investment Results Report (“IRR”) and any prices hedged
(for the associated volumes) in direct connection with an acquisition.  In evaluating the accomplishment of this
objective, the Compensation Committee will take into account all revisions to
estimated proved reserves made in 2010.

 

Targets

 

Measured against the
approved 2010 Business Plan.Exhibit 4.1

 

DRAGONWAVE
INC.

 

EMPLOYEE
SHARE PURCHASE PLAN

 

Table of Contents

 

	
  1.

  	
  Purpose of the Plan

  	
  1

  
	
  2.

  	
  Definitions

  	
  1

  
	
  3.

  	
  Eligibility for Membership in the Plan

  	
  4

  
	
  4.

  	
  Contributions

  	
  5

  
	
  5.

  	
  Dividend and Interest Payments and Voting Rights

  	
  6

  
	
  6.

  	
  Purchase of Shares

  	
  7

  
	
  7.

  	
  Vesting of Contributions

  	
  7

  
	
  8.

  	
  Withdrawals, Transfers, Sales and Suspensions

  	
  8

  
	
  9.

  	
  Distribution on Retirement, Termination of Employment or Death

  	
  9

  
	
  10.

  	
  Distribution of Benefits on Termination of
  Membership

  	
  10

  
	
  11.

  	
  Amendment or Termination of Plan

  	
  10

  
	
  12.

  	
  Administrator

  	
  11

  
	
  13.

  	
  Administration

  	
  12

  
	
  14.

  	
  Market Fluctuation and selling of shares

  	
  12

  
	
  15.

  	
  Miscellaneous Provisions

  	
  12

  
	
  Appendix A — Form of Election to Purchase
  Shares

  	
  15

  
	
  Appendix B — Subsidiaries

  	
  16

  
	
  Appendix C — Form of Instrument Changing
  Employee Contribution Level

  	
  17

  
	
  Appendix D — Form of Withdrawal, Transfer or
  Sale of Shares

  	
  18

  
	
  Appendix E — Form of Instrument Suspending
  Contributions

  	
  19

  
	
  Appendix F — Form of Instrument Resuming
  Contributions

  	
  20

  
	
  Appendix G — Form of Instrument Cancelling
  Participation

  	
  21

  

 

1.                                      PURPOSE
OF THE PLAN

 

1.1                                 The Company hereby establishes a share purchase plan (the “Plan”) for the Employees of the Company and its
Subsidiaries.

 

1.2                                 Subject to all required regulatory approvals, this Plan shall be
effective as of and from July 17, 2008 (the “Commencement
Date”) until the Expiry Date, unless earlier terminated as provided
herein.

 

1.3                                 The purpose of this plan is to give employees of the Company access
to another equity participation vehicle by way of an opportunity to purchase
common shares of the Company through payroll deductions and encourage them to
use their combined best efforts on behalf of the Company to improve its profits
through increased sales, reduction of costs and increased efficiency.

 

2.                                      DEFINITIONS

 

In this Plan, the following terms shall
have the meanings set forth below.

 

“Account(s)”
means a Cash Account or an RRSP Account or both created by the Administrator
for a Participant, in which the assets held by the Administrator for such
Participant under the terms of this Plan are held and recorded.

 

 

“Acquirer” means
the successor to all or substantially all of the assets or capital shares of
the Company, or any other successor of the business of the Company as
determined by the Board of Directors, in either case pursuant to a Change of
Control, and includes the affiliated entities of any such successor;

 

“Administrator”
means the agent or agents of the Plan appointed by the Company in accordance
with Section 12.1 of this Plan, and the successor or successors thereto
from time to time.

 

“Basic Compensation”
means the base salary received by an Employee in the applicable Pay Period but
does not include, without limitation, overtime pay, commissions, bonus
payments, or the value of other benefits or amounts contributed by the Company
under this Plan.

 

“Board of Directors”
means the board of directors of the Company, or if the Board of Directors has
delegated administration of the Plan to a compensation committee, then “Board
of Directors” shall mean such compensation committee.

 

“Business Day”
means any day other than a Saturday, Sunday or statutory or civic holiday on
which chartered banks in Ottawa, Ontario are open for business.

 

“Cash Account”  means an account, which is not a registered retirement savings plan
account, created by the Administrator for a Participant in which the assets
subject to this Plan are held and recorded.

 

“Cessation Date”  means  the date
that the Participant ceases for any reason (other than death or Retirement,  but otherwise including, without
limitation, resignation, Disability, or termination of employment with or
without cause), to render Service to the Company or a Subsidiary;  provided, that, notwithstanding any other term or provision
of this Plan, in the event of the termination of the Participant’s Service
without cause, the Cessation Date shall be the date the Participant is given
actual notice of termination by the Company or a Subsidiary, without reference
to any period of notice of termination to which the Participant may be entitled
at law or pursuant to any employment agreement, whether or not such termination
has been effected in accordance with applicable law.

 

“Change of Control”
means (i) a merger, amalgamation, consolidation, reorganization or
arrangement of the Company with or into another corporation (other than a
merger, amalgamation, consolidation, reorganization or arrangement of the
Company with one or more of its related entities (as defined in NI 45-106); (ii) a
tender offer for all or substantially all of the outstanding common shares of
the Company; (iii) the sale of all or substantially all of the assets of
the Company; or (iv) any other acquisition of the business of the Company
as determined by the Board of Directors.

 

“Commencement Date”
has the meaning set forth in Section 1.2 of this Plan.

 

“Company” means
DragonWave Inc., and any successor company resulting from the amalgamation of
the Company and any other company or other entity resulting from any other form
of corporate reorganization thereof.

 

“Company Trust Account”
has the meaning set forth in Section 4.2 of this Plan.

 

“Disability”
means the inability of the Participant to engage in substantial gainful
activity by reason of a medically determinable physical or mental impairment
(which state shall be determined by the Company on the basis of such medical
evidence as the Company deems warranted in the circumstances).

 

“Election to Purchase
Shares” means an election, substantially in the form as set forth in
Appendix A hereto, setting out the terms of an Employee’s election to
participate in, and purchase Shares under, the Plan.

 

“Employee” means
a person (including a resident of the United States or outside of North
America) under a permanent full-time or part-time contract of employment with
the Company or a Subsidiary who participates in the Company’s or any of its
Subsidiaries’ regular benefit plans (which fact shall be determined exclusively
by the Board of Directors) including, without limitation, any such person who
is also an officer or a director of the Company or a Subsidiary.

 

“Expiry Date” means that date which is ten (10) years
after the Commencement Date.

 

2

 

“form” means any
paper-based, web-based or any other electronic form as determined by the
Company from time to time and includes the forms attached hereto which may be
delivered, executed or otherwise completed in a method determined by the
Company including the determination that such delivery, execution or completion
be by way of any electronic or web-based means.

 

“Insider” has
the meaning set forth in the Securities Act and includes associates and
affiliates (as such terms are defined by the TSX) of the Insider.

 

“Market Price”
means the closing trading price of the Shares on the TSX on such date in
question, or, if Shares were not traded on such date on the TSX, then on the
preceding trading day during which a trade occurred.

 

“Matching Assets”
means all dividends and other assets allocated to a Participant’s Account on
account of the Matching Shares.

 

“Matching Shares”
means Shares issued by the Company and deposited in the Company Trust Account
on behalf of the Participant, as contemplated by Section 4.2 of this Plan.

 

“NI
45-106” means National Instrument 45-106 — Prospectus and
Registration Exemptions, promulgated under the Securities Act, as such
instrument may be amended from time to time, or any successor instrument
thereto;

 

“Participant”
means any eligible Employee (as determined solely by the Board of Directors)
who has elected to participate in the Plan, who has submitted an Election to
Purchase Shares and who has not subsequently withdrawn from the Plan.

 

“Participant Assets” means all dividends and other
assets allocated to a Participant’s Account on account of the Participant
Shares.

 

“Participant Shares”
means Shares purchased by the Administrator from the Company on behalf of the
Participant with monies contributed by the Participant.

 

“Pay Period”
means the normal weekly, bi-weekly or monthly pay period as determined by the
Company from time to time.

 

“Payroll Administrator” means, initially, ADP and thereafter the Payroll Administrator
selected by the Company, and the successor or successors thereto from time to
time.

 

“Purchase Price”
means, on any particular day with reference to Shares, the volume weighted
average closing trading price of the Shares on the TSX for the five trading
days immediately preceding the end of the month in question as determined by
the Company.

 

“Retirement” means retirement at age sixty-five
(65) or older.

 

“RRSP Account”
means a registered retirement savings plan account.

 

“Securities Act” means the Securities Act (Ontario), as the same may
be amended from time to time;

 

“Service” means
continuous service to the Company or any of its Subsidiaries as an Employee.

 

“Share Compensation
Arrangement” means a plan or program established or maintained by
the Company providing for the acquisition of securities of the Company as
compensation or as an incentive or benefit for services provided to the
Company, and including all “security based compensation arrangements” as such
term is used in the TSX Company Manual.

 

“Shares” means
the common shares in the capital of the Company as presently constituted;
provided that upon any subdivision, consolidation or reorganization of such
shares or other change in the corporate structure or share 

 

3

 

capital of the Company, “Shares” shall mean
such ordinary shares as are subdivided, consolidated, reorganized or changed,
with such adjustment in the number thereof as may be thereby deemed appropriate
by the Company.

 

“Subsidiary”
means a corporation (located in Canada, the United States or outside of North
America) or other entity which is controlled by the Company and which is listed
in Appendix B hereto. For the purposes of this definition, the Company
controls a body corporate or other entity if:

 

(a)                                  in the case of a body
corporate:

 

(i)                                     securities of the body
corporate to which are attached more than 50% of the votes that may be cast to
elect directors of the body corporate are held, other than by way of security
only, by or for the benefit of the Company, and

 

(ii)                                  the votes attached to those
securities are sufficient, if exercised, to elect a majority of the directors
of the body corporate; and

 

(b)                                 in the case of an entity other
than a body corporate, more than 50% of the voting or equity interests of such
entity are controlled, directly or indirectly, by or for the benefit of the
Company.

 

“TSX” means the
Toronto Stock Exchange.

 

“Unvested Matching Assets”
means Matching Assets allocated to a Participant’s Account on account of
Unvested Matching Shares.

 

“Unvested Matching Shares”
means all Matching Shares that are not Vested Matching Shares.

 

“Vested Matching Assets”
means Matching Assets allocated to a Participant’s Account on account of Vested
Matching Shares.

 

“Vested Matching Shares”
means:

 

(i)                                     all Matching Shares that, on
and as of the Cessation Date, have been released from the Company Trust Account
to the Participant’s Account at the end of the Vesting Period applicable
thereto in accordance with the provisions of Section 4.2 of this Plan,
plus,

 

(ii)                                  if applicable, in the event of
the termination of the Participant’s Service by reason of death or Retirement
only, all Matching Shares attributable to the Participant then held in the
Company Trust Account (irrespective of whether the Vesting Period applicable to
such Matching Shares has then elapsed).

 

“Vesting Period”
has the meaning set forth in Section 7.2 of this Plan.

 

3.                                      ELIGIBILITY
FOR MEMBERSHIP IN THE PLAN

 

3.1                                 The Plan is open to all eligible Employees (as determined solely by
the Board of Directors) at any time after the Employee has completed his/her
probationary employment period with the Company subject to the rules set
forth below. Participation in the Plan is entirely voluntary.

 

(a)                      Enrolment.  An Employee shall become a Participant by
duly executing and delivering to the Company an Election to Purchase Shares;
provided, that, the Participant’s participation in the Plan shall only be
effective on the first day of the first Pay Period following the date that is
thirty (30) days after such Election to Purchase Shares is received by the
Company.  The Election to Purchase Shares
authorizes the Company or a Subsidiary, as applicable, to make regular payroll
deductions for contributions to the Plan in respect of Participants.

 

4

 

(b)                     Termination of Employment.  Participation in the Plan shall cease on the
Cessation Date (in the event that the Participant’s Service is terminated for
any reason other than death or Retirement) or the death or Retirement of the
Employee, whichever is first to occur.

 

(c)                      Re-Employment. Except in cases of leave of
absence approved in writing by the Company or a Subsidiary, a former Employee
who is subsequently re-employed by the Company or a Subsidiary shall be
considered a new Employee for the purposes of the Plan.

 

(d)                     Leave of Absence.  A Participant who is on leave of absence or
is absent due to illness or Disability shall not be permitted to make any
contribution for that period of absence; during that period of absence, such
Participant shall be deemed to remain in the employ of the Company or a
Subsidiary for all other purposes of the Plan.

 

(e)                      Election to Purchase Shares.  Each Employee who requests information about
the Plan shall have delivered to him or her a copy of the Plan together with an
Election to Purchase Shares to become a Participant. Execution of an Election
to Purchase Shares by the Employee and admittance by the Company of the
Employee as a Participant shall be deemed to be an acceptance by the Employee
of the terms and forms of the Plan without further action or other formality.

 

(f)                        Plan Shares.  The Participant Shares that may be purchased
by the Administrator on behalf of the Participants, and, the Matching Shares
that may be issued by the Company to the Administrator on behalf of the
Participants, in accordance with the terms of the Plan at any time, shall be
authorized and unissued Shares of the Company in an amount up to but not
exceeding an aggregate of 500,000 Shares, and such number of Shares shall be
set aside for the purposes of the Plan. The Company reserves the right to
allocate Shares to Participants on a pro-rata basis should the number of Shares
to be purchased or issued under the Plan exceed 500,000 Shares.

 

(g)                     Price of Shares.  The price at which Participant Shares and
Matching Shares shall be purchased in accordance with the terms hereof shall be
the Purchase Price.

 

4.                                      CONTRIBUTIONS

 

4.1                                 Employee Contributions.

 

(a)                      Each Participant shall
contribute through payroll deductions to the Plan in each Pay Period, at the
Participant’s option as designated by the Participant, an amount equal to or
between the following minimum and maximum amounts (in whole percentages only):

 

(i)                                     a minimum of one percent (1%)
of the Participant’s Basic Compensation; and

 

(ii)                                  a maximum of ten percent (10%)
of the Participant’s Basic Compensation.

 

(b)                     A Participant shall be permitted to
contribute Participant Shares and Vested Matching Shares (but not, for greater
certainty, any Unvested Matching Shares) to such Participant’s RRSP
Account.  The Participant is solely
responsible for ensuring that contributions made to the Plan do not exceed the
maximum dollar limit under the Income Tax
Act (Canada) for contributions to registered retirement savings
plans.  For greater certainty, neither
the Company nor any Subsidiary nor the Administrator shall be responsible for
any taxes or penalties that result from a breach of the maximum dollar limit
under the Income Tax Act
(Canada).

 

(c)                      The Company or a Subsidiary,
as agent of the Participant, shall make (or direct the Payroll Administrator to
make) the payroll deductions required by the terms of the Plan and pay (or
direct the Payroll Administrator to pay) the Participant’s contribution to the
Administrator in accordance with Section 4.1(e) below, and the
Company, its Subsidiaries and each Payroll Administrator is authorized by the
Participant to do so by such Participant’s execution of an Election to Purchase
Shares.

 

5

 

(d)                     The Participant may change his or her
contribution level twice in any 12 month period by filing a form with the
Company, substantially in the form as set forth in Appendix C hereto,
indicating the change to the Company, at least 30 days prior to the applicable
effective date of such change.

 

(e)                      On the last day of each Pay
Period, the Company shall (or shall direct the Payroll Administrator to)
forward all monies deducted from Participants by means of payroll deductions
(as provided in Section 4.1 hereof), to the Administrator who shall hold
such monies for the benefit of each of the Participants (subject to the
provisions of Section 7 hereof). The Administrator shall maintain a
separate Account or Accounts for each Participant to which shall be credited
all of such Participant’s contributions.

 

4.2                                 Corporate Contribution.  On the last Business Day of each month, the
Company will issue to the Administrator that number of Matching Shares equal to
twenty-five percent (25%) of the aggregate number of Participant Shares
purchased by the Administrator on behalf of the Participants for such month.  All Matching Shares so issued shall be held
by the Administrator in a segregated account in trust for the Company (the “Company Trust Account”) until the first to occur of: (i) the
end of the Vesting Period applicable to the Matching Shares prescribed by Section 7.2,
or the death or Retirement of the Participant, in which event the Matching
Shares and any Matching Assets attributable thereto shall be released and
transferred to the Participant’s Account for the benefit of the Participant;
and (ii) the forfeiture to the Company of the Matching Shares and any
Matching Assets attributable thereto pursuant to Section 7.2, in which
event the Participant shall have no further right or entitlement to the
Matching Shares.

 

Notwithstanding
the foregoing, any and all Unvested Matching Shares that are forfeited to the
Company as contemplated by this Section 4.2 and Section 7.2 shall be
available to the Company to satisfy its obligations pursuant to this Section 4.2.

 

4.3                                 Canadian Tax Treatment of Contributions.  The Canadian tax ramifications for
Participants participating in the Plan will depend on a number of factors,
including whether or not a Participant elects to purchase Shares pursuant to
the Plan in an RRSP Account. 
Participants should note that income tax laws are subject to change and
such changes may affect the tax treatment of the Plan and the Participant’s
individual tax treatment.  Participants
should consult their tax advisors to determine their individual tax treatment
in connection with their participation in the Plan.  The Corporation will withhold appropriate
income taxes and other required withholdings on the basis of each Canadian
Participant’s actual salary.

 

4.4                                 Costs and Expenses.  The Company or its Subsidiaries shall pay all
administration expenses in connection with the operation of the Plan,
including, without limitation, all commissions for purchases of Shares.  Commissions, taxes and all governmental or
other charges in connection with sales, as well as all charges for or
associated with any transfers, withdrawals or personal administrative requests,
are payable by the Participant who orders the transaction for his or her
Account.

 

5.                                      DIVIDEND
AND INTEREST PAYMENTS AND VOTING RIGHTS

 

5.1                                 Dividends and Interest.  Dividends on Shares and interest earned on
contributions, if any, will be allocated to the appropriate Accounts or the
Company Trust Account, as applicable, by the Administrator upon receipt of such
amounts by the Administrator. Cash dividends are reinvested in the Shares on
the next Share purchase date. Notwithstanding the foregoing, any cash dividends
declared on Unvested Matching Shares shall accrue to the benefit of the Company
and shall be reinvested in Matching Shares on the next Matching Share purchase
date and shall be available to the Company to satisfy its obligations contained
in Section 4.2.

 

5.2                                 Reports and Voting.  The Administrator will deliver to each
Participant, as promptly as practicable, by mail or otherwise, all notices of
meetings, proxy statements and other material distributed by the Company to its
shareholders.  There is no charge to the
Participants for the Administrator’s retention of share certificates, or in
connection with the notices, proxies or other such material.  The full Shares in each Participant’s Account
(but not, for greater certainty, any Unvested Matching Shares) shall be 

 

6

 

voted in accordance with such Participant’s signed
proxy instructions duly delivered.  In
the absence of such instructions, the Shares will not be voted.  In the alternative, the Administrator may
sign a proxy granting a Participant a right to vote, on behalf of the
Administrator, the Shares held by the Administrator in the Participant’s
Account.

 

Unvested
Matching Shares shall not be voted at any time that such Shares are held in the
Company Trust Account.

 

6.                                      PURCHASE
OF SHARES

 

6.1                                 Purchase of Participant Shares.  On the last Business Day of each month, the
Administrator shall pool all contributions received from the Participants
during such month and shall forthwith subscribe for and purchase from the
Company such number of Participant Shares, at the Purchase Price, that those
contributions can buy.

 

6.2                                 Issuance of Matching Shares.  On the last Business Day of each month, the
Company shall issue to the Administrator such number of Matching Shares equal
to twenty-five percent (25%) of the aggregate number of Participant Shares
purchased by the Administrator pursuant to Section 6.1 above.

 

6.3                                 Share Certificates.  Certificates or an applicable book entry
representing the Shares purchased, issued or otherwise received by the
Administrator pursuant to the Plan shall be registered in the name of the
Administrator and shall be held by the Administrator for the benefit of the
Company and the Participants in accordance with the terms of this Plan.

 

6.4                                 Crediting of Shares to Accounts.  The monthly aggregate number of Shares
purchased by the Administrator with the contributions made by the Participants
shall be allocated by the Administrator to each Account of the Participants, in
proportion to the contributions made by or on behalf of the Participant.  The monthly aggregate number of Matching
Shares issued by the Company to the Administrator shall be allocated by the
Administrator to the Company Trust Account and recorded by the Administrator as
being attributable to the Participant in respect to whom such Matching Shares
were issued.  Allocations of fractional
shares shall be permitted.

 

Stock dividends, stock splits, or both, as applicable,
in respect of Shares: (i) that are held in the Participant’s Account will
be credited to the Account without charge; or (ii) that are held in the
Company Trust Account will be credited to the Company Trust Account and recorded by
the Administrator as being attributable to the Participant in respect to whom
such Matching Shares were issued. 
Distributions of other securities (except pursuant to a merger,
consolidation or other reorganization of the Company) and rights to subscribe
may be sold and the proceeds will be handled in the same manner as a cash
dividend.

 

7.                                      VESTING
OF CONTRIBUTIONS

 

7.1                                 Participant Shares.  All Participant Shares and Participant Assets
shall be fully vested immediately upon receipt of such Shares or assets, as
applicable, by the Administrator.

 

7.2                                 Forfeiture of Unvested Matching Shares.  The Company issues the Matching Shares in
order to induce the Participant to become and/or remain associated with the
Company and its Subsidiaries and to work diligently for the success of the
Company and its Subsidiaries, and as such, subject to Section 7.4, the
Matching Shares will vest, if at
all, only after a period of one (1) year has elapsed from the purchase by
the Participant of the Participant Shares entitling the Participant to receive
such Matching Shares (the “Vesting Period”)
and then only during the period of the Participant’s Service to the Company.  Accordingly, on the
Cessation Date, all Unvested Matching Shares and Unvested Matching Assets shall
be forfeited to the Company without any further action of the Participant, and
any right or entitlement of the Participant to such Unvested Matching Shares
and Unvested Matching Assets shall immediately cease and terminate.

 

7

 

Until the
Matching Shares are released and transferred to the Participant’s Account at
the end of the Vesting Period in accordance with Section 4.2, the
Participant (or any successor in interest) shall not have any shareholder
rights (including, without limitation, voting, dividend or liquidation rights)
with respect to the Unvested Matching Shares or Unvested Matching Assets.

 

7.3                                 Termination of Service.  On the termination of the Participant’s
Service for any reason: (i) the Participant Shares and Participant Assets,
and (ii) any and all Vested Matching Shares and Vested Matching Assets,
shall be dealt with as provided in Section 9.

 

7.4                                 Change of Control. In the event of a
Change of Control, the Board of Directors, in its sole discretion (but subject
to obtaining the prior approval of the TSX if required by the rules,
regulations and policies of the TSX) may, without any action or consent of the
Participants, provide for: (a) the continuation of the Vesting Period with
regard to the Unvested Matching Shares; (b) the substitution of Unvested
Matching Shares for shares of the Acquirer; (c) the substitution of
Unvested Matching Shares with a cash incentive program of the Acquirer; (d) the
acceleration of the Vesting Period to a date prior to or on the date of the
Change of Control; (e) the cancellation of all or any portion of the
Unvested Matching Shares by a cash payment and/or other consideration
receivable by the holders of Unvested Matching Shares as a result of the Change
in Control equal to the Market Price of the Unvested Matching Shares on the
date of the Change in Control; or (f) such other actions or combinations
of the foregoing actions as it deems fair and reasonable in the circumstances.

 

8.                                      WITHDRAWALS,
TRANSFERS, SALES AND SUSPENSIONS

 

8.1                                 Withdrawal, Transfer or Sale.  At the end of any month and subject to thirty
(30) days prior express notice to the Company and the Administrator (such
notice being in a form as determined by the Company and the Administrator), a
Participant may withdraw, transfer or sell up to 100% of the Shares in such
Participant’s Account (but not, for greater certainty, any Unvested Matching
Shares); provided that during the previous twelve (12) calendar months such
Participant has not made more than one other withdrawal, transfer or sale from
the Plan.  The Administrator shall
satisfy such withdrawal, transfer or sale request by: (i) in the case of a
withdrawal or transfer request, delivering all Shares (other than Unvested
Matching Shares and other than fractional Shares) requested to be withdrawn or
transferred by the Participant, held in the Participant’s Account, to the
Participant or such third party as designated by the Participant, and (ii) in
the case of a sale, by selling all Shares (other than Unvested Matching Shares
and other than fractional Shares) requested to be sold by the Participant, held
in the Participant’s Account, and distribute the cash proceeds to the
Participant, less any commissions or fees, as applicable, provided that any
such sale of Shares is in accordance with Section 14.2.  No withdrawal or transfer of any cash amount
in a Participant’s Account shall be permitted as part of a withdrawal or
transfer of Shares from such Account pursuant to the provisions of this Section 8.1.
The value of any fractional Shares requested to be withdrawn, transferred or
sold shall be converted to cash by the Administrator and allocated to such
Participant’s Account for payment to such Participant.

 

If a Participant makes two withdrawals, transfers or
sales from the Plan in any twelve (12) month period pursuant to the provisions
of Section 8.1 hereof, then such Participant shall be prohibited from
making further contributions to, or withdrawals, transfers or sales from, the
Plan (other than a withdrawal, transfer or sale of the remaining assets in such
Participant’s Account upon termination of such Participant’s membership in the
Plan as set forth in Section 10 hereof) until the first Business Day of
the month following the first anniversary of such second withdrawal, transfer
or sale.  The form to be used by a
Participant for the withdrawal, transfer or sale of Shares shall be
substantially in the form as set forth in Appendix D hereto, which shall
indicate, among other things, the number of Shares such Participant wishes to
withdraw, transfer or sell and, in the case of a withdrawal or transfer, the
particulars relating to the registration of the Shares that are to be
delivered, if any.

 

Notwithstanding the foregoing, the Company, in its
sole discretion, has the right to vary or amend the number of withdrawals,
transfers or sales permitted by any Participant in accordance with this Section 8.1
based on extenuating circumstances or compassionate grounds. Such variance or
amendment shall only apply to the Participant in question.

 

8

 

8.2                                 Suspension of Contributions.  A Participant may elect at any time to
suspend contributions to the Plan by giving at least thirty (30) days prior
express written notice to the Company to that effect. During such period of
suspension, the rights and obligations of such Participant, the Company and its
Subsidiaries, and the Administrator shall remain in full force and effect. A
Participant who has suspended contributions under this Section 8.2 may
resume contributions to the Plan on a subsequent date by express written notice
to the Company to that effect at least thirty (30) days prior to such date. The
form to be used by a Participant for such a suspension shall be substantially
in the form as set forth in Appendix E hereto. The form to be used by a
Participant to resume contributions to the Plan shall be substantially in the
form as set forth in Appendix F hereto.

 

9.                                      DISTRIBUTION
ON RETIREMENT, TERMINATION OF EMPLOYMENT OR DEATH

 

9.1                                 Termination of Employment of Participant.  A Participant whose Service is terminated for
any reason other than death must withdraw or otherwise transfer all of the
Participant Shares, Participant Assets, Vested Matching Shares and Vested
Matching Assets in the Participant’s Account within ninety (90) days of such
termination of Service (for greater certainty, the number of Vested Matching
Shares to be released to the Participant under this Section 9.1 shall be
determined as of the date the actual notice of termination of Service is given
by the Corporation to the Participant without reference to any “notice period”
or “severance period” or any other period after the date that actual notice of
termination of Service is given). In the absence of specific instructions as to
the method of distribution or transfer, the Administrator will make payment to
the Participant by delivering to the Participant  all
Participant Shares, Participant Assets, Vested Matching Shares and Vested
Matching Assets held in the Participant’s Account.  For greater certainty, no fractional Shares
shall be issued to any Participant. The value of any fractional Shares shall be
distributed in cash in an amount equal to the fraction multiplied by the Market
Price on the Business Day prior to the date of payment. If expressly requested
by the Participant (such request being in a form as determined by the Company
and the Administrator), the Administrator will sell all of the Shares in the
Participant’s Account (other than any Unvested Matching Shares and other than
any fractional Shares) and distribute the cash proceeds to the Participant,
less any commissions or fees, as applicable, provided that any such sale of
Shares is in accordance with Section 14.2.

 

9.2                                 Death of Participant. Following the
death of a Participant, the Shares and other assets in such Participant’s
Account will be distributed by the Administrator to such Participant’s estate
or Account beneficiary, if any. The distribution shall be made by the
Administrator in accordance with the written instructions of the legal representative
of the Participant’s estate (provided that the Administrator has been provided
with all relevant supporting documentation that it customarily requires) or by
the Account beneficiary by:

 

(a)                      the delivery of all Shares
(other than any fractional Shares) and any cash held in the Participant’s
Account;

 

(b)                     the distribution of cash realized from the
sale of such Shares by the Administrator;

 

(c)                      a transfer to another
registered retirement savings plan, if permitted by law; or

 

(d)                     a combination thereof.

 

The value of any fractional Shares shall be
distributed in cash in an amount equal to the fraction multiplied by the Market
Price on the Business Day prior to the date of payment. If the legal
representative of the Participant’s estate or Account beneficiary fails to make
an election within ninety (90) days of the Participant’s death, then the
Administrator shall make delivery in accordance with the provisions set forth
in Section 9.2(a) above.

 

9.3                                 Notifications to Administrator. The
Company shall notify the Administrator in writing upon the Retirement,
termination of employment or death of a Participant.

 

9

 

10.                               DISTRIBUTION
OF BENEFITS ON TERMINATION OF MEMBERSHIP

 

10.1                           Cancellation of Participation.  A Participant may cancel his or her Election
to Purchase Shares at any time by express notice of cancellation delivered to
and receipted for by the Company and the Administrator (such notice being in a
form as determined by the Company and the Administrator). Upon receipt of such
notice of cancellation, the Administrator shall return to the Participant the
appropriate portion of the Participant’s Account in the manner set out in Section 9.1
hereof. Payment thereof shall constitute a discharge of the Company’s and its
Subsidiaries’ obligations to the Participant under the Plan. If a Participant
cancels his or her Election to Purchase Shares under the Plan, then the
Participant shall not be entitled to rejoin or otherwise participate in such
Plan until the first anniversary of such cancellation. The form to be used by a
Participant to cancel his or her Election to Purchase Shares shall be
substantially in the form as set forth in Appendix G hereto.

 

11.                               AMENDMENT
OR TERMINATION OF PLAN

 

11.1                           Amendment or Termination.  The Company reserves the right to discontinue
use of payroll deductions at any time such action is deemed advisable, in its
sole discretion. The Plan may be amended, altered or discontinued by the
Company at any time, subject to obtaining: (i) any necessary approval of
any applicable regulatory authority including, without limitation, the TSX if
the Shares are listed on the TSX or any other stock exchange or market on which
the Shares are then listed or admitted to trading; and (ii) if required by
the rules of the TSX if the Shares are listed on the TSX, the approval of
the shareholders of the Company in accordance with the rules, regulations and
policies of the TSX at a duly constituted meeting of shareholders (“Shareholder Approval”).  Notwithstanding the foregoing, the following
amendments to the Plan may be made by the Board without Shareholder Approval:

 

(a)                      amendments of a technical,
clerical or “housekeeping” nature, or to clarify any provision of the Plan,
including without limiting the generality of the foregoing, any amendment for
the purpose of curing any ambiguity, error or omission in the Plan or to
correct or supplement any provision of the Plan that is inconsistent with any
other provision of the Plan;

 

(b)                     suspension or termination of the Plan;

 

(c)                      amendments to respond to
changes in legislation, regulations, instruments (including NI 45-106), stock
exchange rules (including the rules, regulations and policies of the TSX)
or accounting or auditing requirements;

 

(d)                     amendments respecting administration of the
Plan;

 

(e)                      any amendment to the
definition of “Employee”;

 

(f)                        any amendment to the
definition of “Subsidiary” and the consequential amendments to Appendix “B”;

 

(g)                     changes to the vesting provisions for any
outstanding Unvested Matching Shares;

 

(h)                     amendments to the Participant contribution
provisions of the Plan;

 

(i)                         amendments to the withdrawal
and suspension provisions of the Plan;

 

(j)                         amendments to the number or
percentage of Matching Shares contributed by the Company;

 

(k)                      amendments to the termination
provisions of the Plan;

 

(l)                         adjustments to reflect stock
dividends, stock splits, reverse stock splits, share combinations or other
alterations of the capital stock of the Company; and

 

10

 

(m)                   any other amendment, whether fundamental or
otherwise, not requiring shareholder approval under applicable law (including,
without limitation, the rules, regulations and policies of the TSX).

 

Shareholder Approval will be required for the
following types of amendments:

 

(i)                                     amendments to the number of
Shares issuable under the Plan, including an increase to the fixed maximum
number of Shares or a change from a fixed maximum number of Shares to a fixed
maximum percentage; and

 

(ii)                                  amendments required to be
approved by shareholders under applicable law (including, without limitation,
the rules, regulations and policies of the TSX).

 

In the event of any conflict between subsections (a) to
(m) and subsections (i) to (ii), above, the latter shall prevail to
the extent of any conflict.

 

In the event of any amendment or termination of the
Plan in accordance with this Section 11, such amendment or termination
will not result in the forfeiture of any funds deducted from the Basic
Compensation of any Participant, or any dividends or other distributions in
respect of the Participant Shares, effective before the effective date of
amendment or termination of the Plan.  In
the event of any termination: (i) each Participant shall be entitled to
100% of the Participant Shares, Participant Assets, Vested Matching Shares and
Vested Matching Assets in the Participant’s Account as of the date of such
termination, which shall be distributed to each Participant within ninety (90)
days following termination of the Plan; and (ii) any and all Unvested
Matching Shares and Unvested Matching Assets as of the date of such termination
shall with no further action of the Participant be immediately forfeited to the
Company, and the Participant shall have no further right or entitlement with
respect thereto. Notwithstanding the foregoing, in the event of any termination
of the Plan, the Board of Directors shall have the option, at their sole
discretion, to provide for an accelerated vesting of any Shares that would be
Unvested Matching Shares on the date of such termination of the Plan.

 

12.                               ADMINISTRATOR

 

12.1                           The Company shall designate the Administrator to open and maintain
Accounts in the names of the Participants and the Company Trust Account and to
arrange for purchases of the Participant Shares and receipt of the Matching
Shares.  The Company may, in its
discretion, substitute another corporation as Administrator under the Plan and
the Administrator may terminate its services, provided such substitution or
termination, as the case may be, shall be on ninety (90) days notice given by
the party effecting the action.

 

12.2                           The Administrator is authorized and directed by the Company and the
Participants to purchase Participant Shares and receive Matching Shares,
provided that the Administrator has been provided with the contributions and
necessary payroll information. The Administrator agrees to make such purchases
of Participant Shares on the last Business Day of each month. Participant
Shares shall be allocated absolutely, and Matching Shares shall be allocated
subject to the terms and provisions of the Plan (including without limitation Section 7.2
hereof) by the Administrator to such Participant’s Account or the Company Trust
Account, as applicable.

 

12.3                           The Administrator shall maintain an Account for each Participant
showing a record of the assets held in each such Participant’s Account under
the Plan, and the interest accrued thereon, if any. The Administrator shall
furnish to the Participants a summary by way of a password-protected web-page containing
the following information:

 

(a)                      the total amount of the
contributions made by such Participant;

 

(b)                     the number of Shares in such Participant’s
Account; and

 

(c)                      the number of Matching Shares
in the Company Trust Account attributable to the Participant.

 

11

 

Each such statement shall be deemed to have been
accepted by the Participant as correct unless written notice to the contrary
shall have been received by the Administrator within three (3) months of
the date of such statement.

 

12.4                           The Administrator shall be protected in acting and relying upon any
written notice, certificate, confirmation, request, waiver, consent, receipt,
statutory declaration or other paper or document (collectively referred to as
the “Documents”) furnished to it and signed
by any person required to or entitled to execute and deliver to the
Administrator any such Documents in connection with any action or omission of
the Administrator hereunder, not only as to its due execution and the validity
and effectiveness of the Documents’ provisions, but also as to the truth and
accuracy of any information therein contained, which the Administrator in good
faith believes to be genuine.

 

12.5                           No amendment, change or modification to the Plan shall be made which
will, without the Administrator’s consent, alter the duties of the
Administrator under the Plan.

 

13.                               ADMINISTRATION

 

13.1                           The Administrator shall act on behalf of the Company and its
Subsidiaries in the day-to-day administration of the Plan.

 

13.2                           Subject to the provisions of the Plan, the Company shall be
authorized to interpret the Plan and to establish, amend and rescind any rules and
regulations relating to the Plan and to make all other determinations necessary
or advisable for the administration of the Plan. The Company may correct any
defect, supply any omission and reconcile any inconsistency in the Plan and, to
the extent it shall be deemed desirable by the Company, to carry it into
effect. The determinations of the Company in the administration of the Plan, as
described herein, shall be final and conclusive.  The Company shall provide the Administrator
with written notice of any amendments or changes to the Plan as described
herein.

 

14.                               MARKET
FLUCTUATION AND SELLING OF SHARES

 

14.1                           THERE IS NO GUARANTEE UNDER THE PLAN AGAINST LOSS
OF VALUE OF THE SHARES.  IN SEEKING THE
BENEFITS OF PARTICIPATION IN THE PLAN, AN EMPLOYEE MUST ACCEPT THE RISK OF A
DECLINE IN THE MARKET PRICE OF THE SHARES AND THE TOTAL LOSS OF HIS OR HER
INVESTMENT IN THE SHARES.  Neither the Company nor its Subsidiaries nor
the Administrator will bear any responsibility for any loss that may occur as a
result of such market fluctuation or otherwise. 
Neither the Company nor its Subsidiaries nor the Administrator makes any
representation or warranty that the Shares are suitable investments for any
particular eligible Employee.  Subject to
Section 6, any purchase or sale of the Shares or any other security by the
Administrator provided for in this Plan may be at such price or prices and at
such time or times for the purchase or sale of such Shares or securities, as
are readily available on the TSX. 
Subject to Section 6, neither the Administrator nor the Company nor
its Subsidiaries shall be liable for the failure to purchase or sell the Shares
or any other securities at any particular price, time or at all.

 

14.2                           Selling of Shares. No Shares issued to
the Participant, or on behalf of the Participant, may be sold by the
Participant, or on behalf of the Participant, unless such sale is in accordance
with the Company’s insider trading policy in effect from time to time.

 

15.                               MISCELLANEOUS
PROVISIONS

 

15.1                           The fiscal year of the Plan shall coincide with the Company’s fiscal
year end.

 

15.2                           Subject to Section 12.5, the Company reserves the right, at any
time, to make rules regarding the interpretation, implementation and
organization of the Plan, to prescribe, modify, amend or rescind the provisions
of this Plan or to suspend this Plan; provided that no prescription,
modification, amendment, rescission or suspension shall deprive a Participant
of benefits vested in the Participant under the Plan 

 

12

 

or divert the use of the funds in the Accounts for
purposes other than the exclusive benefit of the Participants.

 

15.3                           Participants shall provide to the Company, its Subsidiaries and the
Administrator any information that might be required of them in the
administration of this Plan.

 

15.4                           Neither this Plan nor any administrator agreement entered into
between the Company and the Administrator pursuant to this Plan shall give any
Employee the right to be employed, or to continue to be employed, by the
Company or any of its Subsidiaries.

 

15.5                           No right or interest of any Participant in or under this Plan shall
be subject to assignment, sale, transfer, pledge, encumbrance or charge, in
whole or in part, either directly or by operation of law or otherwise in any
manner otherwise than by death or mental incompetency, and shall be
exercisable, during the Participant’s lifetime, only by the Participant. No
attempted assignment, sale, transfer, pledge, encumbrance or charge thereof
shall be effective and any attempt to do so shall be void.  Any attempt to violate the provisions of this
Section 15.5 shall be deemed a decision by the Participant to terminate
participation in this Plan whereupon all of the Employee’s contributions
credited to a violating Participant’s Account shall be immediately refunded to
the Participant and all contributions to the Company Trust Account attributable
to the Participant shall be forfeited to the Company, and the Participant shall
no longer be considered a participant in the Plan. The Company shall notify the
Administrator in writing of the need for such a refund.

 

15.6                           No Shares shall be issued under the Plan at any time to any Insider
if such issuance, together with all of the Company’s previously established or
proposed Share Compensation Arrangements, including the Plan, could result, at
any time, in:

 

(i)                                     the number of Shares issued to
Insiders pursuant to the Plan, together with all of such other Share
Compensation Arrangements, within any one (1) year period exceeding ten
percent (10%) of the issued and outstanding Shares; or

 

(ii)                                  the number of Shares issuable
to Insiders at any time pursuant to the Plan and all such other Share
Compensation Arrangements exceeding ten percent (10%) of the issued and
outstanding Shares.

 

15.7                           No Participant or any other person shall have any right in or to any
part of the corpus or income of the Accounts of the Plan, or any part of the
assets thereof (including, without limitation, the assignment of any part of
the Plan as a pledge or collateral for any loan or debt), except as and when
and to the extent expressly provided by the Plan.

 

15.8                           Participation in the Plan will not give any Participant any right or
claim to any payment except as such payment is provided for under the
provisions of the Plan and only to the extent that assets are available in the
hands of the Administrator for the making of such payment and to the extent
provided for in the Plan.

 

15.9                           Any act or matter to be taken or decided by the Company under the
Plan may be taken by or decided by the Board of Directors or the Company unless
otherwise expressly set forth in this Plan.

 

15.10                     The laws of the Province of Ontario shall apply to this Plan, any
amendments thereto, and the administration thereof, and all rights and
obligations thereunder shall be determined in accordance with such laws and
according to such Province.

 

15.11                     Any purchase, sale or offering of Shares under the Plan shall be
made on the express condition that an application to purchase Shares may not be
made, nor may the purchase of any Shares thereunder be effected, under circumstances
which would constitute a violation of any applicable securities or other law or
regulation or any listing requirement, by-law or regulation of the TSX or any
other stock exchange on which the Shares are listed.  The operation of the Plan may be suspended at
any time, in the discretion of the Company, if necessary to ensure compliance
with any applicable securities or 

 

13

 

other law or regulation or any listing requirement,
by-law or regulation of the TSX or any other stock exchange on which the Shares
are listed or proposed to be listed. The Shares under the Plan
may not be offered, sold, transferred, pledged hypothecated or otherwise
assigned in the United States or any other jurisdiction unless pursuant to an
available exemption under applicable securities laws. The Shares under the Plan
have not been registered under the United States Securities Act of 1933, as
amended, nor qualified under or pursuant to the securities or “Blue Sky” laws
of any state. The Company’s obligation to issue and deliver Shares is subject
to the availability, on terms and conditions reasonably satisfactory to the
Company, of an exemption from prospectus and registration requirements in
respect of the issuance, sale and delivery of such Shares under applicable
securities and “Blue Sky” laws.

 

15.12                     The Plan is effective beginning on the Commencement Date and will
terminate on the Expiry Date.

 

15.13                     Nothing contained in this Plan shall restrict or limit or be deemed
to restrict or limit the rights or power of the Board of Directors in
connection with any allotment and issuance of any securities of the Company.

 

15.14                     Any word
contained herein importing gender shall include the masculine and feminine and
neuter. All references in this Plan to the words “herein”, “hereby”, “hereto”, “hereof”,
and words of similar import refer to this Plan as a whole and not to any
particular Section, schedule or appendix unless otherwise stated or the context
otherwise requires.

 

 

ADOPTED this 17th day of July,
2008.

 

	
   

  	
  DRAGONWAVE INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

14

 

APPENDIX A — FORM OF ELECTION TO PURCHASE SHARES

Employee Share Purchase Plan

effective July 17, 2008

 

To:                                                                              DRAGONWAVE
INC.
(the “Company”)

Attention:  Administrator,
 Employee Share Purchase Plan

 

The undersigned employee acknowledges that
he/she has been advised by the Company of the Company’s employee share purchase
plan (the “Plan”) that the undersigned is
eligible to participate in the Plan and that the undersigned has received a
copy of the Plan and has read and understands the terms of the Plan.

 

The undersigned irrevocably accepts the
terms, conditions and forms of the Plan and hereby elects to participate in the
Plan and hereby directs and authorizes the Company to deduct from the
undersigned’s salary, by way of payroll deduction on each Pay Period, the
amount (the “Employee Contribution”) of
                    %
of the undersigned’s Participant’s Basic Compensation (minimum of 1% of the
undersigned’s Participant’s Basic Compensation, maximum 10% of the undersigned’s
Participant’s Basic Compensation, in whole percentages only). The Employee
Contribution shall be used by the Administrator to purchase common shares (“Shares”) in the capital of the Company in
accordance with the terms and subject to the conditions of the Plan.

 

The undersigned hereby authorizes and
directs the Administrator to purchase Shares on behalf of the undersigned in
accordance with the terms of the Plan, and directs that the certificates for
such shares shall be registered in the name of the Administrator and allocated
by the Administrator to the Participant’s Account. In consideration of the
Company establishing the Plan, the undersigned hereby irrevocably directs and
authorizes the Administrator to carry out and perform the trusts created by the
Plan and to hold the Shares purchased by the Administrator on behalf of the
undersigned in accordance with the terms of the Plan and all of the rights,
privileges and benefits conferred by the Plan for the benefit of the
undersigned, on the terms and subject to the conditions contained in the Plan.

 

In case
of the undersigned’s death, the undersigned hereby designates that all assets
then contained in the undersigned’s Account shall be distributed to
                                            
as my beneficiary for such assets.  The
name of the trustee, if any, in the event such beneficiary is a minor child is
                                                .

 

Whenever
used herein, any words or terms not otherwise defined in this Election to
Purchase Shares, but defined in the Plan, shall have the meanings ascribed
thereto in the Plan.

 

DATED
as of the
             day of
                        ,
20            .

 

	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
  (Signature
  of Employee)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Account
  Number)

  	
   

  	
  (Please
  Print Name)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Please
  Print Address)

  

 

15

 

APPENDIX B — SUBSIDIARIES

Employee Share Purchase Plan

effective July 17, 2008

 

DragonWave
Corp.

 

4472314 Canada
Inc.

 

16

 

APPENDIX C — FORM OF INSTRUMENT CHANGING EMPLOYEE CONTRIBUTION LEVEL

Employee Share Purchase Plan

effective July 17, 2008

 

To:                                                                              DRAGONWAVE
INC.
(the “Company”)

Attention:  Administrator,
Employee Share Purchase Plan

 

The undersigned employee hereby gives
notice to, and directs, the Company to change the undersigned’s contribution to
the Company’s employee share purchase plan (the “Plan”)
to
                    %
of the undersigned’s Participant’s Basic Compensation (minimum of 1% of the
undersigned’s Participant’s Basic Compensation, maximum 10% of the undersigned’s
Participant’s Basic Compensation, in whole percentages only), to be calculated
accordingly and deducted per Pay Period pursuant to the terms of such Plan.

 

Whenever
used herein, any words or terms not otherwise defined in this Instrument
Changing Employee Contribution Level, but defined in the Plan, shall have the
meanings ascribed thereto in the Plan.

 

 

DATED as of the
                
day of
                              ,
20            .

 

	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
  (Signature
  of Employee)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Account
  Number)

  	
   

  	
  (Please
  Print Name)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Please
  Print Address)

  

 

17

 

APPENDIX D — FORM OF WITHDRAWAL, TRANSFER OR SALE OF SHARES

 

Employee
Share Purchase Plan

effective July 17, 2008

 

To:                                                                              DRAGONWAVE
INC. (the
“Company”),

Attention:  Administrator, Employee Share Purchase Plan

 

In connection with the Company’s employee share purchase plan (the “Plan”) and pursuant to the terms of the Plan, the
undersigned employee hereby requests to:

 

o                                    (1)                                  withdraw
                    
Shares from the undersigned’s account and register such Shares in the
undersigned’s name and delivered to the undersigned’s address below;

 

o                                    (2)                                  transfer
                    
Shares from the undersigned’s account to
                                                  ,
registered as follows
                                                                  ;

 

o                                    (3)                                  sell                     
Shares from the undersigned’s account and forward the proceeds (net of fees and
commissions) to the undersigned by cheque at the address below.

 

In the past 12 months, this withdrawal, transfer or sale is my:

 

	
  o

  	
  First

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  o

  	
  Second

  	
   

  	
  (I
  understand that I am restricted from making further contributions to, or
  withdrawals, transfers or sales from, the Plan for a period of 12 months from
  the date of this withdrawal, transfer or sale)

  
	
   

  	
   

  	
   

  	
   

  
	
  o

  	
  Third

  	
   

  	
  (I understand that I must terminate my membership
  in the Plan with this withdrawal, transfer or sale)

  

 

Whenever used herein, any words or terms not otherwise defined in this
Withdrawal, Transfer or Sale of Shares, but defined in the Plan, shall have the
meanings ascribed thereto in the Plan.

 

DATED as of the 
              
day of
                              ,
20

 

	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
  (Signature
  of Employee)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Account
  Number)

  	
   

  	
  (Please
  Print Name)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Please
  Print Address)

  

 

18

 

 APPENDIX E — FORM OF
INSTRUMENT SUSPENDING CONTRIBUTIONS

Employee Share Purchase Plan

effective July 17, 2008

 

To:                                                                              DRAGONWAVE
INC.
(the “Company”)

Attention:  Administrator,
Employee Share Purchase Plan (the “Plan”)

 

The undersigned employee hereby elects to
suspend the undersigned’s contributions to the Plan until further notice,
pursuant to the terms of the Plan.

 

DATED as of the
             day of
                            ,
20            .

 

 

	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
  (Signature
  of Employee)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Account
  Number)

  	
   

  	
  (Please
  Print Name)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Please
  Print Address)

  

 

19

 

APPENDIX F — FORM OF INSTRUMENT RESUMING CONTRIBUTIONS

Employee Share Purchase Plan

effective July 17, 2008

 

To:                                                                              DRAGONWAVE
INC.
(the “Company”)

Attention:  Administrator,
Employee Share Purchase Plan (the “Plan”)

 

The
undersigned employee hereby requests to resume the undersigned’s contribution
to the Company’s employee share purchase plan (the “Plan”)
in an the amount of
                    %
of the undersigned’s Participant’s Basic Compensation (minimum of 1% of the
undersigned’s Participant’s Basic Compensation, maximum 10% of the undersigned’s
Participant’s Basic Compensation, in whole percentages only), pursuant to the
Plan.

 

Whenever
used herein, any words or terms not otherwise defined in this Instrument
Resuming Contributions, but defined in the Plan, shall have the meanings
ascribed thereto in the Plan.

 

 

DATED as of the
             day of
                            ,
20            .

 

	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
  (Signature
  of Employee)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Account
  Number)

  	
   

  	
  (Please
  Print Name)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Please
  Print Address)

  

 

20

 

APPENDIX G — FORM OF INSTRUMENT CANCELLING PARTICIPATION

Employee Share Purchase Plan

effective July 17, 2008

 

To:                                                                              DRAGONWAVE
INC.
(the “Company”)

Attention:  Administrator, Employee Share Purchase Plan
(the “Plan”)

 

The undersigned employee hereby gives
notice to, and directs, the Company to cancel the undersigned’s Election to
Purchase Shares and the undersigned’s participation in the Plan, pursuant to
the terms of the Plan.

 

The undersigned hereby directs the Company
and the Administrator to forward the assets in my account to which I am
entitled pursuant to the terms of the Plan as follows:

 

o                                    (1)                                  Please forward a share
certificate to me, registered in my name as set forth below, for all of the
Shares in my Account to which I am entitled. I understand that any fractional
shares in my account will be converted to cash and forwarded to me, with any
cash in my account, by cheque.

 

o                                    (2)                                  Please transfer all of the
Shares in my account to which I am entitled to
                                                                  ,
at the following address,                                                                                                                                                           
registered as follows
                                                                                          .
I understand that any fractional shares in my account will be converted to cash
and forwarded to me, with any cash in my account, by cheque.

 

o                                    (3)                                  Please sell all of the Shares
in my account to which I am entitled and forward the proceeds (net of fees and
commissions) to me by cheque.

 

DATED as of the
             day of
                              ,
20            .

 

	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
  (Signature
  of Employee)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Account
  Number)

  	
   

  	
  (Please
  Print Name)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Please
  Print Address)

  

 

21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00168-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00168-of-00352.parquet"}]]