Document:

EMPLOYEE STOCK OPTION AGREEMENT

THIS AGREEMENT made the __ day of __, 2000.

BETWEEN:

                  SPECTRUM SIGNAL PROCESSING INC.
                  200-2700 Production Way
                  Burnaby, B.C. Canada V5A 4X1

                  (hereinafter called the "Company")

                                                           OF THE FIRST PART

AND:

                  ----
                  c/o 200-2700 Production Way
                  Burnaby, B.C. Canada V5A 4X1

                  (hereinafter called the "Purchaser")

                                                           OF THE SECOND PART

WHEREAS:

A.       The Purchaser is an Employee as defined herein;

B.       The Company  wishes the  Purchaser  to  continue as an Employee  and to
continue to receive the benefit of his services.

NOW THEREFORE THIS AGREEMENT  WITNESSETH that in consideration of other good and
valuable  consideration  and  the  sum of One  ($1.00)  Dollar  now  paid by the
Purchaser  to the  Company  (the  receipt  and  sufficiency  whereof  is  hereby
acknowledged), it is hereby agreed by and between the parties as follows:

1. In this Agreement, the following terms shall have the following meanings:

<PAGE>

         (a)      "Employee"  means an employee  of the Company or a  subsidiary
                  thereof or an employee of a company under  contract to provide
                  management services to the Company;

         (b)      "Exchange" means The Toronto Stock Exchange;

         (c)      "Expiry Date" means ___;

         (d)      "Insider"  means a director or senior  officer of the Company,
                  or a director or senior  officer of a person that is itself an
                  insider  or  subsidiary  of the  Company,  or a  person  whose
                  control  or  direct or  indirect  beneficial  ownership,  or a
                  combination of that control and ownership  over  securities of
                  the Company  extends,  not counting  securities  in respect of
                  which  he is  acting  as an  underwriter  in the  course  of a
                  distribution,  to  securities  carrying  more  than 10% of the
                  voting rights attached to all the Company's outstanding voting
                  securities;

         (e)      "Notice of  Exercise"  means a notice in writing  addressed to
                  the Company at its address first  recited,  which notice shall
                  specify  therein the number of  Optioned  Shares in respect of
                  which the Option is being exercised;

         (f)      "Option" means the  irrevocable  right and option to purchase,
                  from time to time,  all,  or any part of the  Optioned  Shares
                  granted to the Purchaser by the Company  pursuant to paragraph
                  0 hereof;

         (g)      "Optioned  Shares"  means the  common  shares of the  Company,
                  subject to the Option; and

         (h)      "Shares"  means the common  shares in the capital stock of the
                  Company.

2.       The Company  hereby  grants to the  Purchaser  as an  incentive  and in
consideration  of  his  services  and  not  in  lieu  of  salary  or  any  other
compensation,  subject to the terms and conditions  hereinafter  set forth,  the
Option to  purchase a total of __ (__)  Optioned  Shares at the price of __ (__)
per  Optioned  Share,  to be granted  on the dates  listed  below (the  "Vesting
Dates"):

         (a)      __ Optioned Shares on __, 19__

         (b)      __ Optioned Shares on __, 19__

         (c)      __ Optioned Shares on __, 19__

3.       The Option shall,  at 5:00 o'clock p.m.,  Vancouver time, on the Expiry
Date,  forthwith  expire  and  terminate  and be of no  further  force or effect
whatsoever.

                                      -2-
<PAGE>

4.       In the event of the death of the  Purchaser  on or prior to the  Expiry
Date, the Option, or such part thereof as remains unexercised,  may be exercised
by the  personal  representative  of the  Purchaser  at any  time  prior to 5:00
o'clock p.m.,  Vancouver time, on the first  anniversary of the date of death of
the Purchaser or prior to 5:00 o'clock p.m., Vancouver time, on the Expiry Date,
whichever is the earlier.

5.       The Purchaser  represents  and warrants that he is an Employee.  In the
event the  Purchaser  ceases to be an  Employee  prior to the Expiry  Date,  the
Option shall,  at 5:00 o'clock p.m.,  Vancouver time, on the thirtieth day after
the date upon which the Purchaser ceases to be an Employee,  terminate and be of
no further force or effect whatsoever.

6.       In the event that the Purchaser  ceases to be an Employee  prior to any
Vesting  Date,  the  Purchaser  shall on the date on  which he  ceases  to be an
Employee, be granted that number of Optioned Shares as is equal to the number of
Optioned  Shares to which the Employee  would have been  entitled to on the next
Vesting Date, multiplied by the number of months following the last Vesting Date
that the Purchaser was an Employee, divided by twelve.

7.       Subject to the  provisions  hereof,  the Option shall be exercisable in
whole  or in part  (at any  time  and  from  time to time as  aforesaid)  by the
Purchaser or his personal  representative  giving a Notice of Exercise  together
with  payment (by cash or by certified  cheque,  made payable to the Company) in
full of the purchase  price for the number of Optioned  Shares  specified in the
Notice of Exercise.

8.       Upon the exercise of all or any part of the Option,  the Company  shall
forthwith  cause the registrar  and transfer  agent of the Company to deliver to
the  Purchaser or his  personal  representative  within ten (10) days  following
receipt by the  Company of the Notice of Exercise a  certificate  in the name of
the Purchaser or his personal  representative  representing,  in aggregate,  the
number of Optioned Shares  specified in the Notice of Exercise and in respect of
which the Company has received payment.

9.       Nothing herein  contained  shall obligate the Purchaser to purchase any
Optioned  Shares except those Optioned  Shares in respect of which the Purchaser
shall have exercised his Option in the manner hereinbefore provided.

10.      In the event of any subdivision,  redivision or change of the Shares of
the  Company  at any time  prior to the  Expiry  Date into a  greater  number of
Shares, the Company shall deliver at the time of any exercise  thereafter of the
Option  such  additional  number  of  Shares as would  have  resulted  from such
subdivision,  redivision  or change if such exercise of the Option had been made
prior to the date of such subdivision, redivision or change.

                                      -3-
<PAGE>

11.      In the  event of any  consolidation  or  change  of the  Shares  of the
Company at any time prior to the Expiry Date into a lesser number of Shares, the
number of Shares  deliverable  by the Company on any exercise  thereafter of the
Option  shall be reduced to such  number of Shares as would have  resulted  from
such  consolidation or change if such exercise of the Option had been made prior
to the date of such consolidation or change.

12.      The  Purchaser  shall have no rights  whatsoever  as a  shareholder  in
respect of any of the Optioned Shares  (including any right to receive dividends
or other  distribution  therefrom  or  thereon)  except in  respect of which the
Option has been properly exercised in accordance with paragraph 7 hereof.

13.      Time shall be of the essence of this Agreement.

14.      This  Agreement  shall enure to the benefit of and be binding  upon the
Company,  its  successors  and  assigns,  and the  Purchaser  and  his  personal
representative to the extent provided in paragraph 0 hereof.

15.      Subject to paragraph 0, this  Agreement  shall not be  transferable  or
assignable by the Purchaser or his personal representative and the Option may be
exercised only by the Purchaser or his personal representative.

16.      The granting of the Option and the terms and conditions hereof shall be
subject to the approval of the Exchange and, if the Purchaser is an Insider,  is
further subject to the approval of the  shareholders of the Company prior to the
exercise of the Option.

17.      If at any time during the  continuance of this  Agreement,  the parties
hereto shall deem it necessary or expedient to make any  alteration  or addition
to this Agreement,  they may do so by means of a written  agreement between them
which  shall be  supplemental  hereto and form part  hereof  and which  shall be
subject to the  approval of the  Exchange  and, if the  Purchaser is an Insider,
shall be subject to the approval of the shareholders of the Company.

18.      Wherever the plural or masculine are used  throughout  this  Agreement,
the same shall be  construed  as meaning  singular  or feminine or neuter or the
body politic or corporate where the context of the parties thereto require.

19.      This  Agreement  may be executed in several  parts in the same form and
such parts as so executed shall together constitute one original agreement,  and
such parts, if more than one, shall be read together and construed as if all the
signing parties hereto had executed one copy of this Agreement.

IN WITNESS  WHEREOF the Company has  hereunto  caused its  corporate  seal to be
affixed in the presence of its duly  authorized  officers in that behalf and the
Purchaser  has hereunto set his hand and seal as of the day and year first above
written.

                                      -4-
<PAGE>

THE COMMON SEAL OF SPECTRUM SIGNAL PROCESSING INC. was   )
hereunto affixed in the presence of:                     )
                                                         )
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Authorized Signatory                                     )         C/S
                                                         )
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Authorized Signatory                                     )
                                                         )
                                                         )

SIGNED, SEALED AND DELIVERED by __ in the presence of:   )
                                                         )
                                                         )
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Name                                                     )
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Address                                                  )   ---------------
------------------------------------                     )   ____
                                                         )
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Occupation                                               )
                                                         )
                                                         )

                                      -5-EMPLOYEE STOCK PURCHASE PLAN
                         Spectrum Signal Processing Inc.
                               One Spectrum Court
                             200-2700 Production Way
                            Burnaby, British Columbia
                                     V5A 4X1
                                 (the "Company")
                       Date of Adoption - November 1, 1999

The Company  hereby  establishes an employee share purchase plan (the "Plan") to
be known as the Spectrum Signal Processing Inc. Employee Share Purchase Plan and
to be effective as of November 1, January 13, 2000.

1.       PURPOSE OF THE PLAN

1.1      The purposes of the Plan are to:

         (a)      facilitate the purchase of the Company's shares by employees;

         (b)      continue the Company's  efforts to share Company  success with
                  its employees; and

         (c)      improve the Company's ability to retain a skilled workforce.

1.2      It is the  intention of the Company to qualify the Plan as an "Employee
         Stock Purchase Plan" under Section 423 of the Code, and as a Tax Credit
         Eligible program under the Act.

2.       DEFINITIONS

2.1      In this Plan, the following terms have the following meanings:

         (a)      "Act" means the British Columbia  Employee  Investment Act, as
                  amended from time to time;

         (b)      "Administrator"  means the person  designated under the Act to
                  perform the duties of the administrator under the Act;

         (c)      "Affiliated  Corporation"  means an "affiliate" of the Company
                  as defined in the Act that is also a "subsidiary"  or "parent"
                  corporation  of the Company  within the meaning of Section 424
                  of the Code;

         (d)      "Board" means the board of directors of the Company;

         (e)      "Business  Day" means a day other than a  Saturday,  Sunday or
                  statutory  holiday on which the Burnaby  office of the Company
                  is open for business;

         (f)      "Code" means the United States Internal  Revenue Code of 1986,
                  as amended from time to time.

                                        1

<PAGE>

         (g)      "Commitment  Date"  will  be the  first  day  of the  Offering
                  Period;

         (h)      "Commitment  Form" means the form of commitment  for a monthly
                  dollar contribution attached as Appendix D;

         (i)      "Constitution"  means  the  memorandum  and  articles  of  the
                  Company,  a  certified  true  copy of which (as of the date of
                  adoption  of the Plan) is  attached  as Appendix F, as amended
                  from time to time;

         (j)      "Disclosure  Document" means a document  delivered to Eligible
                  Employees in  connection  with  obtaining  commitments  to the
                  purchase of Shares  under the Plan, a general form of which is
                  attached as Appendix C;

         (k)      "Eligible Employee" means:

                           (i)      all Tax Credit Eligible Employees;

                           (ii)     all other  employees  of the Company and any
                                    Participating Employers.

         Notwithstanding the foregoing,  in no event may any individual resident
in the United States qualify as an Eligible Employee if such individual is (i) a
"five percent shareholder" (within the meaning of Section 423(b)(3) of the Code)
of the Company or any  "subsidiary" or "parent"  corporation of the Company,  or
(ii) not  employed  by the  Company or a  Participating  Employer on a customary
basis for at least twenty hours per week;

         (l)      "Employee   Contribution"   means  funds   contributed   by  a
                  Participating Employee for the purpose of purchasing Shares;

         (m)      "Employee Shareholder" means at any relevant time:

                           (i)      a   Shareholder   who  continues  to  be  an
                                    employee  of the  Company or any  Affiliated
                                    Corporation; or

                           (ii)     a  Shareholder  which is a Trust  where  the
                                    annuitant or beneficiary of such Shareholder
                                    continues  to be an  employee of the Company
                                    or any Affiliated Corporation;

         (n)      "Financial Statements" means:

                           (i)      the  financial  statements  of  the  Company
                                    filed with the  Administrator  in accordance
                                    to section 2(1)(a) of the Act; or

                           (ii)     if more recent  financial  statements of the
                                    Company have  subsequently been delivered to
                                    Eligible Employees by the Company,  the most
                                    recent of those financial statements;

                                        2

<PAGE>

         (o)      "Market Price" means as of any date, the closing price for the
                  Shares on The Toronto Stock Exchange less a 15% discount,  or,
                  if no trades in the Company's  shares took place on such date,
                  the closing  price for the next  preceding  date of which such
                  trades took place, less a 15% discount;

         (p)      "Offering  Period" means in respect of any Plan Year,  the six
                  month  periods  commencing  as at November 1 and May 1 of such
                  Plan Year with the first such  period  commencing  November 1,
                  1999;

         (q)      "Plan"  means  this  Employee  Stock  Purchase  Plan dated for
                  reference November 1, 1999,  including all appendices attached
                  hereto,  as  supplemented  and  amended  from  time to time in
                  accordance with the provisions hereof;

         (r)      "Participating  Employee"  means an Eligible  Employee who has
                  elected to commit to the purchase of Shares under the Plan;

         (s)      "Participating  Employer"  means  any  Affiliated  Corporation
                  designated  by the Board as a  "participating  employer"  from
                  time to time;

         (t)      "Plan Year" means a twelve-month period commencing on November
                  1 of each year and ending on October 31 of that year;

         (u)      "Purchase Price" means, in respect of any Offering Period, the
                  lesser of the Market Price  calculated  as at the beginning of
                  the Offering Period and the Market Price  calculated as at the
                  end of the Offering Period;

         (v)      "Regulations"  means the regulations  enacted  pursuant to the
                  Act in force from time to time;

         (w)      "Report  Period" is the annual period to be covered by reports
                  to Employee Shareholders described in Appendix A;

         (x)      "Shares" means common shares without par value of the Company;

         (y)      "Share  Allotment"  means  the  calculation  of the  number of
                  shares to be issued each Offering  Period pursuant to the Plan
                  as detailed in Section 3.4;

         (z)      "Share   Certificate"   means  a  share   certificate   or  an
                  appropriate equivalent representing Shares purchased under the
                  Plan;

         (aa)     "Share   Entitlement"   means,  in  respect  of  any  Eligible
                  Employee,  that  portion of the Share  Allotment in respect of
                  any Offering  Period as determined in accordance  with Section
                  8.1;

         (bb)     "Shareholder" means, at any relevant time:

                           (i)      a person who has  committed  to the purchase
                                    of Shares under the Plan (whether or not the
                                    Shares  have been  paid for in full),  if at
                                    such time the person  continues  to hold any
                                    such Shares (or if the Shares have not been

                                        3

<PAGE>

                                    issued  at  that  time,   continues   to  be
                                    entitled to receive the Shares when issued);
                                    or

                           (ii)     a Trust which  acquired  Shares  pursuant to
                                    Article 17 hereof, if at such time the Trust
                                    continues to hold any such Shares;

         (cc)     "Tax Credit Eligible Employee" means an individual who, at the
                  time of purchasing Shares under the Plan, is:

                           (i)      resident in British Columbia,

                           (ii)     employed by the Company (or a predecessor or
                                    an Affiliate  Corporation of the Company) on
                                    a  continuing  basis  for an  average  of at
                                    least twenty hours a week, and

                           (iii)    is not a major  shareholder  (as  defined in
                                    the Act) of the Company;

         (dd)     "Treasury  Purchase"  means the  purchase  of Shares  from the
                  Company at the Market Price;

         (ee)     "Trust"  means a trust  governed  by a  registered  retirement
                  savings  plan under the Income Tax Act  (Canada)  for which an
                  Eligible Employee is the annuitant; and

         (ff)     "Trustee"  means  the trust  company  selected  by the  Board,
                  subject  to review and  substitution  from time to time at the
                  Board's discretion, to administer the Plan.

2.2      In this Plan,  words  (including  defined terms) importing the singular
         number  include  the  plural  and vice  versa and words  importing  the
         masculine   gender   include  the  feminine  and  neuter   genders  and
         capitalized  terms not otherwise  defined herein shall have the meaning
         given to them in the Act.

3.       ADOPTION, COMMENCEMENT AND TERMINATION OF THE PLAN

3.1      The Company  hereby adopts the Plan as its employee stock purchase plan
         for the benefit of Eligible Employees.

3.2      The Plan will become effective November 1, 1999.

3.3      The Plan may be  terminated  by the Board at the  conclusion  of a Plan
         Year provided that:

         (a)      all Offering Periods have closed,

         (b)      termination of the Plan will not affect  Employee  Shareholder
                  Shares   which  have  not  been   delivered  or  are  not  yet
                  deliverable under the terms of the Escrow Agreement, and

         (c)      the Company receives the Administrator's approval to terminate
                  the Plan.

3.4      The  aggregate  number of Shares that may be issued under this Plan may
         not exceed  250,000  Shares in total or 50,000  Shares in any  Offering
         Period provided that any Shares unsubscribed for in an

                                        4

<PAGE>

         Offering Period will not be available for issuance in the next Offering
         Period.  The number and class of Shares  which may be issued  under the
         Plan, as well as the number and class of Shares and the price per share
         covered by each right outstanding under the Plan which has not yet been
         exercised,   shall  be  adjusted   proportionately   or  as   otherwise
         appropriate to reflect any increase or decrease in the number of issued
         Shares resulting from a split-up or consolidation of shares or any like
         capital  adjustment,  or the  payment  of a stock  dividend,  and/or to
         reflect a change in the  character  or class of shares  covered  by the
         Plan arising from a readjustment or recapitalization; provided that any
         adjustment to the class of Shares issuable under the Plan is subject to
         the consent of the Administrator.

4.       REPRESENTATIONS AND WARRANTIES

4.1      The Company represents and warrants to each Eligible Employee that:

         (a)      the Company is validly existing and in good standing under the
                  laws pursuant to which it was incorporated;

         (b)      the Company is eligible to register an employee stock purchase
                  plan under the Act;

         (c)      the Company is not party to any agreement  which  prohibits or
                  restricts  it from  adopting the Plan,  completing  any of the
                  transactions  contemplated  hereunder and  complying  with the
                  terms hereof;

         (d)      all  necessary  corporate  action  has been taken to adopt the
                  Plan as a valid and binding obligation of the Company;

         (e)      as of the date of adoption of the Plan, the  authorized  share
                  capital of the Company was as described in Appendix C;

         (f)      The Shares are of a class of shares of the Company that:

                           (i)      Carry voting rights under all circumstances;

                           (ii)     Are not directly  restricted  in their right
                                    to share in the profits of the Company or in
                                    the  division  of the  Company's  assets  on
                                    dissolution or winding up; and

                           (iii)    Do not  have  any  rights  and  restrictions
                                    prohibited by the Regulations;

         (g)      the  Shares  to be  issued  under  the  Plan  will be from the
                  treasury  of the  Company  and will not have  been  previously
                  issued;

         (h)      the price per share at which Shares will be purchased  through
                  Treasury  Purchases by Eligible Employees will be the Purchase
                  Price in respect of the  Offering  Period for which the Shares
                  are purchased;

                                        5

<PAGE>

         (i)      the Financial  Statements  were  prepared in  accordance  with
                  generally accepted accounting  principles,  present fairly the
                  financial position and condition of the Company as at the date
                  thereof  and do not omit to state any  material  liability  or
                  financial obligation of the Company as of the date thereof;

         (j)      since the date of the Financial  Statements  there has been no
                  material adverse change in the financial position or condition
                  of  the  Company,   except  as  disclosed  in  the  Disclosure
                  Document;

         (k)      the Disclosure  Document  discloses all  outstanding  options,
                  warrants  and  conversion  rights  granted  by the  Company in
                  respect of its securities and contains no misrepresentations;

         (l)      the  Company  is in good  standing  with  NASDAQ  and with the
                  Toronto  Stock  Exchange  and will  advise  the  Administrator
                  within 30 days of the discontinuance of such listing; and

         (m)      the  representations  and warranties set out in paragraphs (a)
                  to (l) above will be true and correct on the Commitment Date.

4.2      Each   Eligible   Employee  will  be  deemed  to  have  relied  on  the
         representations and warranties contained in paragraphs 4.1(a) to 4.1(m)
         above in electing to commit to the purchase of shares under the Plan.

5.       OFFERING PERIODS AND ELIGIBILITY TO SUBSCRIBE FOR SHARES

5.1      The Company hereby offers  Eligible  Employees the right to participate
         in the Plan on the terms and  conditions  set out in this Plan.  Should
         the  aggregate  subscriptions  for Shares by Eligible  Employees in any
         Offering  Period exceed the Share  Allotment  for such Offering  Period
         each Participating Employee will be entitled to receive such percentage
         of the  Share  Allotment  for the  Offering  Period  as is equal to the
         percentage  of the  total  number  of  shares  subscribed  for in  such
         Offering Period subscribed for by such Participating  Employee provided
         that the Trustee shall then return to Participating Employees all their
         Employee Contributions not used in the purchase of Shares.

5.2      Each  person who is an  Eligible  Employee  at the  commencement  of an
         Offering  Period will be eligible to commit to the purchase of a dollar
         value of Shares under the Plan during such Offering Period.

5.3      The  Company  will  notify  each  Eligible   Employee  of  his  or  her
         eligibility to purchase Shares under the Plan.

6.       SUBSCRIPTION ENTITLEMENT

6.1      During  an  Offering  Period  each  Eligible   Employee  has  an  equal
         entitlement  opportunity  to  commit  to  the  purchase  of  Shares  by
         delivering a completed  Commitment  Form that  designates the amount of
         his or her Employee  Contribution for the coming Offering Period.  This
         shall be subject to a maximum  contribution  for Eligible  Employees of
         Cdn$12,500 per Plan Year provided that in circumstances where the total
         amount of  designated  Employee  Contributions  (the "Total  Designated
         Contributions")  in respect of any  Offering  Period is in excess of an
         amount equal to the Market Price

                                        6

<PAGE>

         as at the beginning of the Offering Period  multiplied by 50,000 Shares
         (the "Aggregate Market Price") each Participating  Employee's  Employee
         Contribution  will be  decreased  by a  percentage  equal to the figure
         arrived   at   by   expressing   the   formula   1-(Total    Designated
         Contributions/Aggregate Market Price) as a percentage.

6.2      The Company will deliver a Disclosure  Document to an Eligible Employee
         before he or she enters into an  agreement to commit to the purchase of
         Shares under the Plan.

7.       CONTRIBUTIONS

7.1      Employee  Contributions will be deducted from Participating  Employees'
         salary  on a  bi-monthly  basis and  delivered  by the  Company  to the
         Trustee within five Business Days of the end of each month.

7.2      Alternatively,  Participating  Employees  may  elect to  deliver  their
         Employee Contributions in respect of any Offering Period in full to the
         Trustee by way of cash,  certified  cheque or money order provided that
         such delivery is effected within five Business Days of the commencement
         of the Offering Period.

8.       SHARE ENTITLEMENT

8.1      A Participating Employee's Share Entitlement in respect of any Offering
         Period will be  determined  at the  beginning of an Offering  Period by
         dividing  the Employee  Contribution  for each  Participating  Employee
         (adjusted  in  accordance  with section 6.1) by the Market Price at the
         beginning of the Offering Period.

8.2      The Company will,  within five Business Days of the end of any Offering
         Period,  notify the  Trustee  and all  Participating  Employees  of the
         Purchase   Price  for  such   Offering   Period,   following   which  a
         Participating  Employee  may,  by notice in writing,  delivered  to the
         Trustee  within five  Business Days  following  receipt of such notice,
         notify  the  Trustee  of their  election  to  rollover  their  Employee
         Contributions to the next Offering Period, provided that, in respect of
         any one Participating  Employee, only one such rollover is available in
         respect of any particular Offering Period's Employee  Contributions and
         in no event will such rollover increase an Employee Contribution beyond
         the maximum allowable for a Plan Year.

8.3      The Trustee  will hold all  Employee  Contributions  for each  Offering
         Period in one pool,  will  apply  such  Employee  Contributions  to the
         purchase  of the  aggregate  Share  Entitlement  for all  Participating
         Employees for such Offering  Period and will refund any unused Employee
         Contributions  to the  Participating  Employees  pro rata in accordance
         with  their  Employee   Contributions,   subject  to  the  right  of  a
         Participating Employee to elect to have such amount applied to the next
         Offering  Period  provided  that  in no  event  will  such  application
         increase an Employee  Contribution  beyond the maximum  allowable for a
         Plan Year.

8.4      All interest earned on Funds held by the Trustee from time to time will
         accrue to the benefit of the Company and will be paid to the Company by
         the Trustee at the end of each Offering Period.

9.       ISSUANCE AND HOLDING OF SHARE CERTIFICATES

9.1      Upon  receipt of the Employee  Contributions  and the  aggregate  Share
         Entitlement  for all  Participating  Employees  from the  Trustee,  the
         Company will issue Share Certificates  representing those Shares either
         in the name of the  Eligible  Employee or, if the Shares are to be held
         in Trust for the benefit of the Eligible  Employee,  in the name of the
         trustee of the Trust. Such Share  Certificates will be delivered within
         15 Business Days of the end of each  Offering  Period to the Trustee in
         respect of Tax Credit Eligible  Employees and otherwise to the Eligible
         Employees.

                                        7

<PAGE>

9.2      In accordance with section  4(1)(d) of the Act, each Share  Certificate
         representing  Shares acquired by a Tax Credit Eligible Employee will be
         held in the custody of an authorized  depository on the terms set forth
         in  Appendix  E for a period of three  years from the date of the Share
         Certificate.

9.3      Within 30 days of issuance of a Share  Certificate under paragraph 9.1,
         the  Trustee  will  deliver  to  a  Tax  Credit  Eligible  Employee  an
         investment confirmation setting out the information required by the Act
         and the Regulations.

10.      WITHDRAWAL FROM PARTICIPATION

10.1     A  Participating  Employee  may  withdraw  from  participation  in  the
         purchase of shares under the Plan by  delivering  notice of such to the
         Company and the Trustee on or before the 10th Business Day prior to the
         end of any month in which case no further Employee  Contributions  will
         be deducted from such Participating  Employee for such Offering Period.
         Any Employee  Contributions  already deducted or otherwise  contributed
         will,  subject to section  5.1,  be applied to the  purchase  of Shares
         under the Plan.

10.2     Upon the issue of notice of termination of employment  with the Company
         or a  Participating  Employer,  an  employee  will  be  deemed  to have
         withdrawn from  participation in the purchase of shares under the Plan.
         The Company will deliver such notice to the Trustee.
10.3     A notice  of  withdrawal  pursuant  to  paragraph  10.1 and a notice of
         termination  pursuant to paragraph 10.2 will be effective upon delivery
         of such to the Trustee.

11.      RELATIONSHIP WITH EMPLOYMENT

Notwithstanding any provision of any other provision in this Plan whatsoever:

11.1     The rights and  obligations  of any  individual  under the terms of his
         office or  employment  with the Company or any  Affiliated  Corporation
         shall not be  affected  by his  participation  in the Plan or any right
         which he may have to  participate  in the Plan,  and an individual  who
         participates in the Plan shall waive all and any rights to compensation
         or  damages  in  consequence  of  the  termination  of  his  office  or
         employment with any such company for any reasons  whatsoever insofar as
         those  rights  arise or may arise from his ceasing to have rights under
         or be entitled to acquire any shares under the Plan as a result of such
         termination,  or from the loss or diminution in value of such rights or
         entitlements  (whether or not such  termination  amounts to wrongful or
         unfair dismissal).

11.2     The participation in the Plan by a Participating Employee does not form
         part of the  Participating  Employee's  entitlement to  remuneration or
         benefits  pursuant to his contract of employment nor does the existence
         of a contract of employment  between any persons and the Company or any
         Affiliated  Company  give  such  person  any  right or  entitlement  to
         participate in the Plan whether subject to any conditions or at all.

12.      TRANSFERABILITY

12.1     The  rights  of a  Participating  Employee  under  this  Plan  are  not
         assignable  or  transferable  and may  only  be  exercised  during  the
         Participating Employee's lifetime by the Participating Employee.

                                        8

<PAGE>

13.      APPLICATION FOR TAX CREDIT CERTIFICATES

13.1     If the Company has  received  from a Tax Credit  Eligible  Employee who
         subscribed for Shares under the Plan:

         (a)      all required information, and

         (b)      payment in full of the Employee Contribution for the Shares,

         then  the  Company  will,  on  behalf  of  such  person,  apply  to the
         Administrator  in  accordance  with the Act and  Regulations  for a tax
         credit certificate in respect of the purchase of the Shares.

14.      USE OF FUNDS

14.1     Subject to paragraph  14.2, the Company will not use any funds received
         from the issue of Shares under the Plan for any purpose  prohibited  by
         the Act or the Regulations.

14.2     The Company may use funds  received  from the issue of Shares under the
         Plan for one or more of the uses  specified  in section 6(a) of the Act
         if such uses are listed and described in detail in Appendix B.

15.      REPORTS TO EMPLOYEE SHAREHOLDERS

15.1     To allow  Employee  Shareholders  to monitor  their  investment  in the
         Company,  the Company  will,  within 140 days of the end of each Report
         Period, provide to each Employee Shareholder:

         (a)      disclosure with respect to major decisions made by the Company
                  during the Report Period which materially  affected the Market
                  Price; and, if applicable,

         (b)      a summary  (including  price  information)  of all new  shares
                  issued and options,  warrants or conversion  rights granted by
                  the Company during the Report Period; and

         (c)      the most recent Market Price.

15.2     Upon request by a Shareholder, the Company will provide the Shareholder
         with access to or copies of the Plan and Constitution.

16.      OTHER COVENANTS OF THE COMPANY

16.1     The Company covenants with the Eligible Employees that:

         (a)      the Company  will  comply at all times with the Plan,  the Act
                  and the Regulations;

                                        9

<PAGE>

         (b)      the  Company  will not enter into any  agreement  which  would
                  prohibit   or  restrict   it  from   completing   any  of  the
                  transactions  contemplated  hereunder  or  complying  with the
                  terms hereof;

         (c)      in any  2-year  period,  the amount of equity  capital  raised
                  under the Plan on which tax credits are payable  under the Act
                  will not  exceed $5  million  or such  other  amount as may be
                  permitted by the Act from time to time; and

         (d)      all required  corporate action will be taken to duly allot and
                  issue  Shares  purchased  under this Plan from the treasury of
                  the  Company  and,  upon  receipt by the Company of payment in
                  full for Shares  subscribed for hereunder,  the Shares will be
                  validly issued as fully-paid and non- assessable shares in the
                  capital of the Company.

17.      PURCHASE BY OR TRANSFER TO TRUSTS

17.1     Notwithstanding  any other provision of this Plan, an Eligible Employee
         may:

         (a)      purchase Shares under the Plan through a Trust; and

         (b)      transfer Shares purchased under the Plan to a Trust.

17.2     Where an Eligible  Employee  purchases  Shares under the Plan through a
         Trust,  the  provisions  of the Plan shall apply to the purchase by the
         Trust as if the purchase was being made by the Eligible Employee.

18.      TAX LIABILITY

18.1     By electing to participate in the Plan a  Participating  Employee shall
         agree to indemnify:

         (a)      The Participating Employee's employer; and

         (b)      any other person who is or becomes  liable to account for tax,
                  social  security  contributions  or any  other  regulatory  or
                  statutory   contributions  on  behalf  of  that  Participating
                  Employee

         against  any  amount,  of  or  representing,   tax  (including  without
         limitation,  income tax and PAYE), social security contributions or any
         other regulatory or statutory  contributions for which the employer (or
         any  such  other  person)  is  liable  to  account  in  respect  or  in
         consequence of the acquisition of sale of any Shares for the benefit of
         such  Participating  Employee  and which (as between the  Participating
         Employee and the employer or such other person) is the liability of the
         Participating  Employee  but which the  employer  or such other  person
         cannot  otherwise  lawfully  recover  from the  Participating  Employee
         (whether  by way of  deduction  from  payroll  or  otherwise).  For the
         avoidance of doubt, the

                                       10

<PAGE>

         Participating  Employee  shall  authorize  his  employer  to make  such
         deductions from his salary as may be necessary to meet such liability.

18.2     The Company shall have the right to withhold any Share  Certificates to
         be issued to a  Participating  Employee  pursuant to this Plan,  to the
         extent  permitted by applicable law, until the  Participating  Employee
         has agreed to such  arrangements  for giving effect to the indemnity in
         Section 18.1 (which, if appropriate may include the giving of authority
         by  the  Participating  Employee  to the  Company  to  arrange,  or the
         Participating  Employer on the Participating  Employee's behalf for the
         sale of some or all of the  Shares  acquired  pursuant  to the  Plan in
         order to raise such funds as the Company  considers  sufficient to meet
         such liability).

19.      AMENDMENTS

19.1     Subject to paragraphs  19.2 and 19.3, no alteration will be made to the
         Plan without  prior  approval of the  Administrator,  The Toronto Stock
         Exchange, if applicable, and a majority of Employee Shareholders.

19.2     With the approval of the  Administrator and The Toronto Stock Exchange,
         if applicable,  but without the approval of the Employee  Shareholders,
         the Company may amend the offering parameters set out in Appendix A and
         the Plan to:

         (a)      provide for the raising of equity  capital in addition to that
                  specified therein;

         (b)      specify the Offering  Periods  within which the equity capital
                  may be raised; and

         (c)      increase the total number of Shares or the number of Shares in
                  any Offering Period that may be issued under this Plan.

19.3     Notwithstanding  any other  provision of this Plan, if the Shares cease
         to be listed on a  recognized  Canadian  public stock  exchange,  or on
         NASDAQ the Company and the Shareholders will forthwith appoint a single
         arbitrator  in  accordance   with  the  provisions  of  the  Commercial
         Arbitration Act. The arbitrator's  mandate will be to forthwith specify
         all such amendments to the Plan as are necessary for the Plan to comply
         with  the  requirements  of the Act  and  Regulations,  including  (but
         without limiting the generality of the foregoing):

         (a)      provision of a new method for determining Market Price;

         (b)      provision of  redemption/repurchase  rights in accordance with
                  sections 4(1)(h),(i) and (j) of the Act;

         (c)      inclusion of price and dilution protections  acceptable to the
                  Administrator.

         The  amendments  specified  by the  arbitrator  will be  binding on the
         Company and all Shareholders and implemented forthwith.

20.      GENERAL

20.1     The Plan will be construed and enforced in accordance  with the laws of
         British Columbia.

20.2     Time will be of the essence in respect of this Plan.

20.3     The Plan will be binding upon the Company,  its  successors and assigns
         and will enure to the benefit of each Eligible Employee and Shareholder
         and their respective personal representatives and assignees.

                                       11

<PAGE>

         IN WITNESS  WHEREOF  the Company has adopted the Plan under its seal as
of the day and year first written above.

The common seal of the Company              )
was hereto affixed in the presence of:      )
                                            )
                                            ) c/s
--------------------------------------------)
Authorized Signatory                        )
                                            )
                                            )
--------------------------------------------)
Authorized Signatory                        )

                                       12

<PAGE>

                                                    Appendix A

                                                     Plan Data

<TABLE>
<CAPTION>

Share Offering Period                          Number of Shares to       Price Per Share       Total Proceeds
                                               be Offered
--------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                       <C>                   <C>
November 1, 1999 to April 30, 2000             50,000                    (Note 1)              $135,000 (2)
--------------------------------------------------------------------------------------------------------------------
May 1, 2000 to October 31, 2000                50,000                    Note 1                $250,000 (2)
--------------------------------------------------------------------------------------------------------------------
November 1, 2000 to April 30, 2001             50,000                    Note 1                $250,000 (2)
--------------------------------------------------------------------------------------------------------------------
May 1, 2000 to October 31, 2001                50,000                    Note 1                $250,000 (2)
--------------------------------------------------------------------------------------------------------------------
November 1, 2001 to April 30, 2002             50,000                    Note 1                $250,000 (2)
====================================================================================================================
</TABLE>

Notes:

         1.       The Price Per Share is the lesser of the closing  price of the
                  Company's   shares  on  the  Toronto  Stock  Exchange  at  the
                  beginning and the end of the Share Offering Period less 15%.

         2.       This figure is an  approximation.  The Total  actual  Proceeds
                  will be  determined by  multiplying  the Price Per Share X the
                  Number of Shares subscribed for.

The Report Period is the Company's fiscal year (January 1 to December 31).

Name or Designation of Class of Shares Offered under the Plan:
                  Common shares with no par value.

Estimated Number of Eligible Employees Covered by the Plan: 142

<PAGE>

                                   Appendix B

Use of Funds

         Funds  raised  will be used  for  general  corporate  purposes.  In the
         foreseeable  future the Company does not intend to use any of the funds
         raised from the sale of Shares  under the Plan for any of the  purposes
         described in section 6(a) of the Act.

<PAGE>

                                   Appendix C.

                       General Form of Disclosure Document

<PAGE>

         Disclosure Document

Eligible employees (and/or their professional  advisors) should carefully review
the information contained in this document before making an investment decision.

Spectrum Signal Processing Inc.
One Spectrum Court
2700 Production Way, Suite 200
Burnaby, BC
V5A 4X1
(the "Company")

<TABLE>
<CAPTION>

Share Offering Period                  Maximum Individual     Estimated Total    Estimated Share
                                       $ Contribution         Proceeds           Allotment
------------------------------------------------------------------------------------------------------
<S>                                    <C>                    <C>                <C>
November 1, 1999 to April 30, 2000     $6,250                 $135,000           50,000
======================================================================================================
</TABLE>

         PURPOSE OF THE PLAN

         The Company  adopted its employee  share  purchase plan (the "Plan") on
         November 1, 1999. The purpose of the Plan is to:

o        facilitate  the  purchase  of the  Company's  shares  by  employees  at
         prevailing Market Prices;

o        continue the Company's efforts to share Company success with all staff;

o        reward participants on the success of the whole Company as a complement
         to the branch oriented profit-sharing plan;

o        improve the Company's ability to retain a skilled work force; and

o        encourage  teamwork and cooperation  among all members and units of the
         Company.

The Plan was registered under the Employee Investment Act of British Columbia so
that Tax Credit Eligible  Employees could receive a 20% employee  investment tax
credit on share purchases under the Plan. See the section headed "Summary of EIA
Tax  Assistance"  on page 3 for  details.  The  offering  and transfer of shares
issued under the Plan is governed by the Employee Investment Act.

ELIGIBLE EMPLOYEES

Employees of the Company or its  affiliates  who fall into one of the  following
two groups are eligible to purchase shares under the Plan as follows:

                                        1

<PAGE>

21.      "Tax Credit Eligible Employees" are those employees who, at the time of
         subscribing for shares are:

         (a)      British Columbia residents,

         (b)      employed by the Company,  or a predecessor  or an affiliate of
                  the Company,  on a continuing basis for an average of at least
                  20 hours each week, and

                  (Note:  employment on a "continuing  basis" includes part time
                  employment for not less than three months each year for two or
                  more consecutive years);

         (c)      not already "major shareholders" of the Company.

                  (A "major shareholder"  basically means a person who, together
                  with his or her relatives,  trusts or companies,  holds 10% or
                  more of the shares of the  Company.  Employees  who think they
                  might be a "major  shareholder" should check the precise legal
                  definition in section 1 of the Employee  Investment  Act to be
                  sure).

         2.       "Other Eligible Employees" are employees who for one reason or
                  another do not qualify as Tax Credit  Eligible  Employees  but
                  have been defined by the Company's Board as Eligible Employees
                  for the purpose of participating under the Plan.

An employee who is either a Tax Credit Eligible Employee or is an Other Eligible
Employee is referred to in this disclosure document as an "Eligible Employee".

See the  Section  headed  "Summary  of EIA Tax  Assistance"  below  for  details
concerning  the  investment  tax  credits   available  to  Tax  Credit  Eligible
Employees.

SUBSCRIPTION ENTITLEMENT

The Plan allows the Company to offer Eligible Employees the right to participate
in the Plan from time to time. The size and period of the current share offering
to Eligible  Employees are shown on the face page.  The  characteristics  of the
shares  offered are  described in the section  headed  "Share and Loan  Capital"
below.

The Plan provides  that each  Eligible  Employee has an equal right to commit to
the purchase of shares.

The maximum  permitted  participation  by an employee in the offering is $6,250.
Eligible Employees can commit to the purchase of shares by committing bi-monthly
payroll deductions up to this maximum.  Eligible Employees who want to commit to
the purchase of shares in this Offering Period must complete the Commitment Form
accompanying this Disclosure Document and return it to Lori Whieldon.

Share Price Valuation

The Plan uses the  Market  Price as the share  price,  which is  defined  as the
lesser of the trading price for the Shares on the Toronto Stock  Exchange on the
trading days  closest to the  beginning  and the end of an Offering  Period less
15%.

A copy of the Company's most recent annual  financial  statements is attached as
Appendix 1 to this disclosure document.

                                        2

<PAGE>

Indemnity

The Plan provides that a  Participating  Employee shall indemnify the Company or
any  other  party  who  becomes  liable  to  account  for tax,  social  security
contributions  or  any  other  contributions  which  are  the  liability  of the
Participating Employee.

Right to Review Plan

The Plan itself is a detailed legal document.  Any Eligible  Employee who wishes
to examine the Plan may obtain a copy from the Company upon request.

                                        3

<PAGE>

SUMMARY OF EIA TAX ASSISTANCE
(Tax Credits are only available to those employees who meet the criteria set for
Tax Credit Eligible Employees.)

The Plan is registered  under the Employee  Investment  Act of British  Columbia
(referred to from this point forward as the "EIA"). The Province enacted the EIA
to  encourage  employee  investment  for  the  purposes  of  job  creation,  job
protection and employee participation in corporate ownership. The EIA encourages
employee  investment  by  providing  for employee  investment  tax credits to be
issued to Tax Credit  Eligible  Employees who purchase  shares under  registered
employee share ownership plans.

A summary of the key characteristics of the tax credit is set out below:

the credit is equal to 20% of the share  subscription  proceeds  received by the
Company from the Tax Credit Eligible Employee.

the  maximum  credit is $2,000 for a calendar  year (per  person) ( = $10,000 of
investment per year).

lifetime maximum of $10,000 in credits (= $50,000 of investment).

credit towards British Columbia income tax otherwise payable.

unused credits cannot be carried forward or back or be refunded in cash.

if a Share  purchase  under  the  Plan is made  during  the  first  60 days of a
calendar  year,  the Tax Credit  Eligible  Employee may claim the tax credit for
that  calendar  year or the  previous  calendar  year  or  allocate  the  Shares
purchased between both years.

the value of the tax credit  will not be  included  in the Tax  Credit  Eligible
Employee's  income  for tax  purposes  or reduce the  adjusted  cost base of the
shares acquired.

the tax credit is only available to the first purchaser of the Shares.

tax  credits  will be reduced if an employee  has  disposed of any shares of the
Company within two years of the subscription.

The Company will apply to the Province for tax credit  certificates on behalf of
Tax Credit Eligible Employees. The tax credit certificate may then be claimed on
and filed with a Tax Credit Eligible Employee's income tax return.

An employee investment tax credit must be repaid to the Province if a Tax Credit
Eligible  Employee sells Shares  purchased  under the Plan within three years of
buying them.  The EIA seeks to  encourage  longer  term,  committed  investment.
Therefore,  tax assistance is withdrawn in the case of investments,  which prove
to be short term.  The buyer of the Shares is also jointly and severally  liable
with the  seller  to repay  the  credits.  The EIA,  however,  does not  require
repayment  of the tax credit if the sale or  transfer of the Shares is made as a
result of the Tax Credit Eligible Employee's permanent  disability,  bankruptcy,
or death,  and in some cases  involuntary loss of employment.  Additionally,  no
repayment is necessary if the sale was consequent upon the permanent  retirement
of the Tax Credit Eligible Employee,  provided the Shares were held for at least
two years. After expiry of the three-year period, the Shares may be sold without
repayment of the tax credit.

                                        4

<PAGE>

To  enable  monitoring  of  share  transactions,   the  EIA  requires  that  the
certificates  representing  Shares issued under the Plan to Tax Credit  Eligible
Employees be held in the custody of an  authorized  depository  during the three
year hold period. Royal Trust will be the authorized depository. Purchasers will
receive an investment  confirmation within thirty days of paying for the Shares.
The share  certificates (or equivalents) will be released to Tax Credit Eligible
Employees after expiry of the three year period.

The extent of the  Province's  involvement  in the Plan has been to  register it
under  the EIA to  allow  Tax  Credit  Eligible  Employees  to  receive  the tax
assistance  described  above. The province has not reviewed the investment merit
of the  Shares  being  offered  by the  Company  and  in no  way  guarantees  an
investment in the Shares.  Assessment of investment merit, adequacy of the Plan,
and due diligence review is entirely the responsibility of the investor.

If the legislation  governing the Employee Share Ownership program is amended or
repealed, any approval provided by the Ministry in connection with the Company's
Plan,  including  any approval  relating to payment of Tax Credits to Tax Credit
Eligible  Employees  who  purchased  Shares under the Plan,  could be subject to
variation or cancellation by the Administrator.

Cost Sharing for Employee Groups

The EIA allows for Provincial  cost sharing  assistance to employee  groups that
obtain independent  professional advice relating to the negotiation,  evaluation
and implementation of a registered employee share ownership plan.  Reimbursement
of 50% of eligible  costs up to $5,000 may be applied for. For more  information
about cost sharing for employee  groups,  contact the Business  Equity Branch of
the Ministry of Small Business, Tourism and Culture at toll free 1-800-665-5457.

Share and Loan Capital

Share Capital

The authorized share capital of the Company consists of:

(i)      50,000,000  common shares without par value, of which 10,393,954 shares
         are issued and outstanding.

Common Shares

The holders of common shares are entitled to one vote for each share held at all
meetings of  shareholders  of the Company  (other than special class meetings at
which only holders of another class of shares are entitled to vote) and, subject
to the rights  attached to the preferred  shares,  are entitled to receive,  pro
rata with all other holders of common shares,  such dividends as may be declared
by the directors of the Company on the common shares and the remaining assets of
the Company in the event of its liquidation,  dissolution or winding-up. This is
the class of share being offered to Eligible Employees under the Plan.

                                        5

<PAGE>

Outstanding Options

The Company has granted the following rights to acquire common shares:

                           Number of Shares     Exercise Prices     Expiry Dates

--------------------------------------------------------------------------------
Incentive Stock Option     1,825,364            $4.50 -- $7.50      up to 2009

================================================================================

Use of Proceeds

The net  proceeds  of the  offering  will be used  by the  company  for  general
corporate purposes.

Prospectus Exemption

The  issuance of  securities  for the Company is subject to the  Securities  Act
(British  Columbia) (the Securities Act) which normally requires a prospectus to
be prepared and delivered to the purchaser.  Sections  42(2)(10) and 74(2)(9) of
the   Securities  Act  provide  a   registration   and   prospectus   exemption,
respectively,  where  the  purchaser  is an  Eligible  Employee,  so long as the
purchaser is not induced to purchase securities by the expectation of employment
or continued employment.

Shareholder Communication

Under the Plan,  the Company has committed to provide the following  information
to its employee shareholders within 140 days of the end of each fiscal year:

         (i)      disclosure with respect to major decisions made by the Company
                  during the Report Period which materially  affected the Market
                  Price; if applicable,

         (ii)     a summary  (including  price  information)  of all new  shares
                  issued, and options,  warrants or conversion rights granted by
                  the Company during the Report Period; and

         (iii)    the most recent Market Price of the shares.

The Company also intends to meet with the employees on a regular basis to review
results and solicit suggestions on improving the Company's performance.

Subscribers will receive all information sent to public shareholders.

                                        6

<PAGE>

Board of Directors

The Company's  constitution  provides that the Board of Directors of the Company
has authority over management of the Company.  The Board of Directors is elected
each year by the shareholders at the Company's annual general meeting. There are
seven positions on the Board presently filled by the following persons:

<TABLE>
<CAPTION>

===================================================================================================================
Name, Country of Ordinary              Principal Occupation          Approx. No. of        Date on which the
Residence and Position Held            or Employment and, if         Voting Shares         Nominee became a
with the Company                       not an Elected                Beneficially          Director of the
                                       Director, Occupation          Owned,                Company
                                       During the Past Five          Directly or
                                       Years                         Indirectly, or
                                                                     Controlled or
                                                                     Directed
===================================================================================================================
<S>                                    <C>                           <C>                   <C>
BARRY JINKS(1)(2)                      Businessman                   26,428                July 27, 1990
Canada
DIRECTOR
-------------------------------------------------------------------------------------------------------------------
KENNETH A. SPENCER                     Chair of the Board of         10,000                November 3, 1997
Canada                                 the Company
CHAIR OF THE BOARD and
DIRECTOR
-------------------------------------------------------------------------------------------------------------------
PASCAL SPOTHELFER                      Businessman                                         April 21, 1999
-------------------------------------------------------------------------------------------------------------------
ANDREW HARRIES                         V.P. Marketing for                                  April 21, 1999
                                       Sierra Wireless, Inc.
-------------------------------------------------------------------------------------------------------------------
JOHN E. BRENNAN                        President and Director        64,000                December 14, 1995
United States                          of Activated
DIRECTOR                               Communications Inc.
-------------------------------------------------------------------------------------------------------------------
SAMUEL ZNAIMER(1)(3)                   Senior Vice-President         4,000                 July 27, 1990
Canada                                 of Ventures West
DIRECTOR                               Capital Ltd.
===================================================================================================================
(1)      Member of Audit Committee
(2)      Member of Compensation Committee
(3)      Member of Acquisition Committee

===================================================================================================================
</TABLE>

                                        7

<PAGE>

Principal Shareholders

The  following  persons,  directly  or  indirectly,  hold  more  than 20% of the
Company's outstanding voting securities:

         None.

Adverse Material Changes

There have been no adverse  material  changes in the  financial  position of the
Company that has occurred since the date of the financial  statements  contained
in Appendix 1.

Recent Information Releases

The Company is listed on the Toronto  Stock  Exchange and the NASDAQ.  Copies of
press  releases and financial  information  recently  filed on public record are
contained in Appendix 2 to this Disclosure Document.

Eligible  Employees who wish to examine the whole of the  Company's  public file
may do so by visiting the listings  department of the Toronto Stock  Exchange or
the  filings   department  of  the  British   Columbia  or  Ontario   Securities
Commissions.

Risk Factors

Persons  considering  purchasing  shares of the  Company  under the Plan  should
consider the following:

1.       The Company is dependent on two significant customers for a significant
         portion of its sales (44% in 1997 and 32% in 1998).

2.       The Company  generally does not obtain  long-term  purchase orders from
         its customers and thus cancellation,  reductions or delays in orders by
         customers could significantly affect the Company's financial condition.

3.       A significant  component of the Company's  strategy is to increase high
         volume product sales to OEMs  (Original  Equipment  Manufacturers)  and
         there are no assurances that its OEM customers will continue to rely on
         the Company for their DSP solutions.

4.       The Company purchases DSP  microprocessors and certain other components
         from Analog Devices,  Motorola and Texas  Instruments  each of which is
         the  sole  supplier  of the  microprocessors  on which  certain  of the
         Company's products have been developed and thus shortages of components
         could delay the Company's ability to ship its products.

5.       The market for the  Company's  products  is  characterized  by changing
         technologies and frequent new products. The Company's continued success
         will be dependent  upon its ability to adopt such changes and there are
         no assurances it will be able to do so.

6.       The market for the  Company's  products is  intensely  competitive  and
         certain of the Company's  competitors have greater  financial and other
         resources than the Company.

                                        8

<PAGE>

7.       The  Company's  success  is  dependent  in large  part on  certain  key
         management  and  technical  personnel,  the loss of one or more of whom
         could affect the Company's business.

8.       There are no  assurances  that all of the  Company's  suppliers are Y2K
         compliant.

9.       The market  prices for shares of high  technology  companies  have been
         volatile and these broad market fluctuations could adversely affect the
         price of the Company's  shares  independent of the Company's  operating
         results.

Certificate

This document  contains no untrue statement of a material fact and does not omit
to state a material  fact that is necessary to prevent a statement  that is made
from being false or misleading in the circumstances in which it was made.

Dated:
      ------------------------------------------------

         --------------------------------------------
         (Signature of                               )
                       ------------------------------

         --------------------------------------------
         (Signature of Chief Financial Officer)

                                        9

<PAGE>

Appendix 1

              The Company's Most Recent Annual Financial Statements

<PAGE>

Appendix 2

                      Quarterly Reports and Press Releases

                                   Appendix D.

<PAGE>

Commitment Form
Additional Form for Tax Credit Eligible Employees
Tax Credit Questionnaire

<PAGE>

                       SPECTRUM SIGNAL PROCESSING INC.
                       EMPLOYEE STOCK PURCHASE PLAN COMMITMENT FORM

This  commitment  form must be  completed  and signed by Eligible  Employees  of
Spectrum  Signal  Processing  Inc. ("the  Company") who wish to purchase  shares
under the  Company's  employee  stock  purchase  plan (the  "Plan")  during  the
offering period from November 1, 1999 to April 30, 2000.

Employee Information
<TABLE>
<CAPTION>

                                         Employee Information
=============================================================================================================
<S>                               <C>                                           <C>
Participant: Mr./Mrs./Ms.          __________________________________________    __________________________
 ____________
 (circle)                                         Last Name                       First Name   Initial

Address:  __________________________________________________________________________________________________

           No. and Street Name    Apt.                   Town/City         Province/State   Postal Code/ZIP

_______________________________    _______________________________    Date of Birth  ________________________
   SIN / SSN                                 Employee Number                           (YY / MM / DD)

=============================================================================================================
</TABLE>

I received  and read the  Disclosure  Document  the Company  gave me. I agree to
commit  $___________________ for the purchase of common shares (the "Shares") of
the Company under the Plan,  paid in accordance  with the terms of the Plan, for
which, if applicable, I authorize the Company to make the appropriate deductions
from my wages and salary in equal  semi-monthly  installments.  My contributions
will be  invested as  indicated  in my  instructions  below until such time as a
request for change is made. My contributions will be invested in Spectrum Signal
Processing Inc. shares as subscribed for in the Employee Share Purchase Plan.
================================================================================
Tax Credit Election (B.C. Residents Only)
--------------------------------------------------------------------------------
I do [ ] do not [ ]
wish to have my share  purchases  under the Plan  eligible for tax credits under
the Employee Investment Act (British Columbia) (employees wishing to participate
under the Employee  Investment Act (British Columbia) must complete the form and
questionnaire attached).
================================================================================
Designation of Beneficiary (where permitted by law)
--------------------------------------------------------------------------------
In the event of my death, I hereby designate ________________________________ as
my beneficiary, if living, to receive benefits payable under the Plan, otherwise
such  benefits  shall be  payable  to my  estate.  I  hereby  revoke  all  prior
beneficiary  designations.  I assume full  responsibility for ensuring that this
designation is valid under applicable law.
--------------------------------------------------------------------------------
Caution
--------------------------------------------------------------------------------
In some provinces/states, designation of a beneficiary by means of a designation
form will not be revoked  or changed  automatically  by any future  marriage  or
divorce.  Should you wish to change  your  beneficiary  in the event of a future
marriage or divorce, you will have to do so by means of new designation.
Note:  I agree with full  knowledge,  to permit The Royal Trust  Company and the
Company to use the  information  collected  about me in relation to the Plan, or
otherwise, for any purpose relating to the Plan. I also hereby authorize them to
communicate  the information  held on me to any person deemed  necessary for the
administration  of the Plan. I acknowledge that my "plan  participant file" will
be held at the employer's and The Royal Trust Company's  offices or at any other
location  as  indicated  from time to time on the  understanding  that I will be
given  access to examine and correct  such  information  as  prescribed  by law.
Further,  in accordance  with UK Data  Protection  Law, 3L Limited will hold the
personal  information  provided by me and will process such personal information
for purposes  relating to the Plan. I acknowledge  that 3L Limited may from time
to  time  make  such  personal  information  available  to  the  Company,  other
Affiliated  Corporations and the Trustee, some of which are situated outside the
European Union
================================================================================

<PAGE>

Acceptance of Terms and Conditions

I hereby  accept all the terms and  conditions  of the Employee  Stock  Purchase
Plan,  a copy of which I have  received  and read.  I  declare  all of the above
information  is  accurate  and I  confirm  that  I am an  Eligible  Employee  in
accordance with the terms and conditions of the Plan.

-----------------------------------------  ------------------------------------
Employee Signature                          Date

================================================================================

                      For Office Use Only

Approved by Employer Representative: _______________________   Date: ___________
                                     Authorized Signature

================================================================================

<PAGE>

                         SPECTRUM SIGNAL PROCESSING Inc.
                          Employee Stock Purchase Plan
                Additional Form for Tax Credit Eligible Employees

(Only Tax Credit Eligible Employees need complete this Additional Form)

This  additional  form  must be  completed  and  signed by Tax  Credit  Eligible
Employees  of  Spectrum  Signal  Processing  Inc.  (the  "Company")  who wish to
purchase shares under the Company's employee stock purchase plan (the "Plan").

Employee Information (Please type or print clearly)

Name (first, initials, last name):

                                   ---------------------------------------------

Social Insurance Number:                           Phone:
                                   ----------------              ---------------

Address:

                ----------------------------------------------------------------

                ----------------------------------------------------------------

================================================================================

Note:  Tax credit  certificates  will only be issued at the end of each calendar
year after the last payment is made and the shares are issued.

Tax Credit Matters (This only applies to Tax Credit  Eligible  Employees.  Check
Yes below, if applicable.)

         Yes, I meet the criteria for a "Tax Credit  Eligible  Employee" set out
         on page 1 of the Plan share disclosure document.

I  authorize  the  Company  to apply for tax credit  certificates  for me and to
provide the Administrator under the Act with all necessary  information.  I have
attached my completed  Tax Credit  Questionnaire  and confirm it is accurate.  I
acknowledge  that under the Employee  Investment  Act (British  Columbia)  share
certificates issued to Tax Credit Eligible Employees under the Plan must be held
by an  authorized  depository  (currently  Royal  Trust) for three  years  after
purchase.  I direct the company to deliver the share  certificate for the Shares
to the  depository  and agree to be bound by the terms of the  escrow  agreement
with the depository  about holding of the share  certificates  under the Plan. I
irrevocably  appoint the Company as my attorney  for the sole purpose of matters
related to the escrow agreement.

I  understand  that it is my  responsibility  to notify  the  Ministry  of Small
Business,  Tourism  and  Culture  (the  "Ministry")  immediately  of any name or
address  changes.  I am also aware that the following  information may be shared
with Revenue Canada Taxation:

Name:___________________
Address:____________________________________
S.I.N.:_________________
Amount and Date of Investment, Investee Company and Tax Credit Amount: _________
________________________________________________________________________________

Dated the ________ day of _____________________, _____.

                                                     --------------------------
                                                     Employee Signature

Attached:         Tax Credit Questionnaire
                  ESPP Purchase Form

             A FALSE OR MISLEADING STATEMENT IS AN OFFENSE UNDER THE
                            EMPLOYEE INVESTMENT ACT.

<PAGE>

                         SPECTRUM SIGNAL PROCESSING INC.
                      EMPLOYEE TREASURY SHARE PURCHASE PLAN
                            TAX CREDIT QUESTIONNAIRE
      (Only Tax Credit Eligible Employees need complete this Questionnaire)

Employee Name:________________________________________________  SIN:____________

Previous Tax Credit Related Share Transactions

         I confirm  that as a result of this Share  purchase I will not  receive
         credit certificates under the Act totaling more than:

         (i)      $2,000 in value in respect of any one calendar year; and

         (ii)     $10,000 in value in grand total over all years.

         Note: Provincial tax credits received as a result of investments in the
         Working Opportunity Fund are included in the above calculation.

         During the two-year period  preceding the date on which the Shares will
         be paid for in full  (__________),  I have disposed of (or will dispose
         of) other shares of the Company as follows:

Date                  Number of     Price Received     Tax Credit Originally
                      Shares                           Received on those Shares?
--------------------- ------------- ------------------ -------------------------

===================== ============= ================== =========================

         Dated the ____________ day of ______________________, _____.

                                           --------------------------------
                                           Employee Signature

A FALSE OR MISLEADING STATEMENT IS AN OFFENSE UNDER THE EMPLOYEE INVESTMENT ACT

<PAGE>

                                   Appendix E.
                                Escrow Agreement

<PAGE>

ESCROW AGREEMENT

THIS AGREEMENT is made as of the _____ day of ____________, _____

AMONG:    MONTREAL TRUST COMPANY OF CANADA, a trust company incorporated under
          the laws of Canada

          (hereinafter called "Montreal Trust")

                                                      OF THE FIRST PART,

AND:      ROYAL TRUST CORPORATION OF CANADA, a trust company incorporated under
          the laws of Canada

          (hereinafter called "Royal Trust")

                                                      OF THE SECOND PART,

AND:      SPECTRUM SIGNAL PROCESSING  INC., a corporation incorporated under the
          laws of British Columbia.

          (hereinafter called the "Corporation")

                                                      OF THE THIRD PART.

WHEREAS:

A.       The  Corporation  has adopted an  employee  share  ownership  plan (the
         "Plan") registered under the Employee Investment Act (British Columbia)
         under  which  employees  of the  Corporation  and its  affiliates  will
         acquire shares of the Corporation  and will, in certain  circumstances,
         be eligible to obtain tax credits with respect thereto;

B.       The Act  requires  that  shares in  respect  of which tax  credits  are
         obtained,  are to be held under the control of an authorized depository
         for a period of three  years  after  acquisition,  and  Royal  Trust is
         authorized to act as an authorized depository;

C.       While  shares are held as  contemplated  by Recital B, no  certificates
         representing such shares shall be issued under the terms of the Plan;

D.       The  employees  referred  to in Recital A have  authorized  all or will
         authorize  the  Corporation  to execute and deliver  this  agreement on
         their behalf.

                                        1

<PAGE>

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
the mutual  covenants and conditions  herein  contained,  Montreal Trust,  Royal
Trust and the Corporation covenant and agree each with the other as follows:

1.       Interpretation

1.1      In this agreement:

         (a)      "Act" means the Employee  Investment Act, as amended from time
                  to time,  including the Regulations and written  policies made
                  thereunder;

         (b)      "Administrator"  means the administrator  designated under the
                  Act;

         (c)      "permanently  disabled" means the  Shareholder  being disabled
                  and permanently unfit to work;

         (d)      "Plan" means the employee share  ownership plan referred to in
                  Recital A;

         (e)      "Shareholder"  means an eligible  employee of the  Corporation
                  and its affiliates who has acquired Shares, or on whose behalf
                  a Trust has acquired Shares, pursuant to the Plan;

         (f)      "Shares"  means  shares  in the  capital  of  the  Corporation
                  acquired by shareholders under the Plan;

         (g)      "Trust"  means a trust  governed  by a  registered  retirement
                  savings  plan under the Income Tax Act  (Canada)  for which an
                  eligible employee is the annuitant;

         (h)      words  and  phrases  defined  in the  Act  have  the  meanings
                  ascribed to them by the Act; and

         (i)      whenever the singular or masculine are used in this agreement,
                  the  same  shall be  construed  as  including  the  plural  or
                  feminine or neuter.

2.       Registration of Shares

2.1      Upon  acquisition  of Shares  under the Plan by a  Shareholder  or by a
         Trust on behalf of a  Shareholder,  which  acquisition  will occur upon
         payment in full being made therefor,  the Corporation  will request and
         Montreal  Trust will enter such  Shareholder  or Trust as the holder of
         such  Shares  in  the  register  of  shareholders  of  the  Corporation
         maintained by Montreal  Trust.  Such Shares shall be registered the day
         upon which payment in full is received by the Corporation.

3.       Notification to Royal Trust

3.1      Within five business  days of a  Shareholder  or Trust being entered in
         the register of Shareholders as the holder of Shares as provided for in
         section  2.1  herein,  Montreal  Trust will  provide to Royal Trust the
         following information:

                                        2

<PAGE>

         (a)      the number,  price paid for and date of  acquisition of Shares
                  purchased by or on behalf of such Shareholder or Trust;

         (b)      the name and address of such Shareholder or Trust; and

         (c)      any other  information  required by Royal Trust in  connection
                  with its functions  under this agreement or the Act or for the
                  purpose   of   processing    applications   for   tax   credit
                  certificates.

         (d)      Such information shall be provided in a form which is mutually
                  acceptable to Montreal Trust and Royal Trust.

4.       Escrow Provisions

4.1      From the date of acquisition of Shares notified to Royal Trust pursuant
         to  paragraph  3.1 until the Shares are to be  released  from escrow in
         accordance with this agreement;

         (a)      no share certificates  representing such Shares will be issued
                  by the  Corporation  or by  Montreal  Trust on  behalf  of the
                  Corporation;

         (b)      Shares will be deemed to be held in escrow  with,  and will be
                  under the control of, Royal Trust.

4.2      The  Corporation  covenants  with  Montreal  Trust and Royal Trust that
         prior to the  registration of a Shareholder,  or a Trust on behalf of a
         Shareholder pursuant to paragraph 2.1 and notification thereof pursuant
         to subparagraph  3.1(a),  the Corporation  will have been authorized by
         the Shareholder to enter into this agreement.

5.       Release of Shares

5.1      The Corporation,  on its own behalf and on behalf of each  Shareholder,
         Montreal Trust and Royal Trust, each covenant and agree that, except as
         permitted by this  Agreement  or with,  and as directed by, the written
         consent or direction  of the  Administrator,  none of the  Corporation,
         Montreal  Trust or Royal Trust shall do or cause anything to be done to
         permit the release of certificates representing the Shares or to permit
         the  disposition  (as  defined  in the  Act)  of the  Shares  or of the
         beneficial ownership of or any interest in the Shares.

5.2      Subject to  compliance  with  paragraph  5.3 or 5.4,  the Shares may be
         released from escrow upon the earliest of:

         (a)      the date which is three  years  after the  acquisition  of the
                  Shares by the Shareholder  under the Plan upon payment in full
                  therefor, in which event a certificate representing the Shares
                  shall be released to the Shareholder upon his or her request;

         (b)      the date the Shareholder's personal representative,  or if the
                  Shareholder  is a Trust  the  personal  representative  of the
                  annuitant  of the  Trust,  delivers  to  Royal  Trust  a death
                  certificate for the Shareholder or the annuitant of the Trust,
                  as the case may be, and proof

                                        3

<PAGE>

                  of the  authority  of the  personal  representative,  in which
                  event a certificate  representing the Shares shall be released
                  to the personal representative;

         (c)      the date the trustee in bankruptcy of the  Shareholder,  or if
                  the  Shareholder  is a Trust the trustee in  bankruptcy of the
                  annuitant of the Trust,  delivers to Royal Trust copies of the
                  court order or  assignment in  bankruptcy  and the  instrument
                  appointing   the  trustee,   in  which  event  a   certificate
                  representing the Shares shall be released to the trustee;

         (d)      the date the Shareholder delivers to Royal Trust a certificate
                  from a qualified medical practitioner that the Shareholder, or
                  if the Shareholder is a Trust the annuitant of the Trust,  has
                  been  permanently  disabled,  in  which  event  a  certificate
                  representing the Shares shall be released to the Shareholder;

         (e)      the date on which Royal Trust receives a copy of a court order
                  directing  the  Shares  to be  transferred  as part of a court
                  ordered  property  settlement,  in which  event a  certificate
                  representing  the Shares will be delivered in accordance  with
                  the court order;

         (f)      the date  upon  which  Royal  Trust  receives  proof  that the
                  Shareholder, or if the Shareholder is a Trust the annuitant of
                  the Trust, has permanently  retired and the Shares were issued
                  not  less  than two  years  before  the date of such  proposed
                  release, in which event a certificate  representing the Shares
                  shall be released to the Shareholder;

         (g)      the date upon which Royal Trust receives proof satisfactory to
                  it that the Shareholder,  or if the Shareholder is a Trust the
                  annuitant of the Trust,  has suffered a bona fide  involuntary
                  loss of  employment  (as defined in the Act), in which event a
                  certificate  representing  the Shares shall be released to the
                  Shareholder;

         (h)      the date on which Royal Trust has received confirmation:

                  (i)      from  the  Shareholder,  or if the  Shareholder  is a
                           Trust the annuitant of the Trust,  that a disposition
                           of the Shares has been made; and

                  (ii)     from  the  Administrator  that  the  amount,  if any,
                           required by the Act has been repaid;

                  (iii)    in  which  event  the  certificate  representing  the
                           Shares  shall be  released  to or to the order of the
                           person to whom the disposition was made;

         (i)      the date upon which the Administrator advises Royal Trust that
                  he has  consented to the release in  circumstances  other than
                  those set out in subparagraphs  5.2(a) to (h) in which event a
                  certificate  representing  the  Shares  shall be  released  in
                  accordance  with  the  direction  of Royal  Trust to  Montreal
                  Trust;

         (j)      the date upon which  Royal  Trust  receives  notice of a trust
                  disposition  (as  defined  in  the  Act),  in  which  event  a
                  certificate  representing  the Shares may, upon request by the
                  trustee,  be released to the trustee or annuitant thereof,  as
                  the case may be; and

                                        4

<PAGE>

         (k)      if  Montreal   Trust  has   received  a  notice   pursuant  to
                  subparagraph 6.2(b), the date on which Montreal Trust receives
                  notice  from the  savings  institution  that it has  commenced
                  enforcement of its security for the  indebtedness  referred to
                  in the notice,  in which event a certificate  representing the
                  Shares shall be released to the savings institution.

5.3      Royal Trust will notify  Montreal  Trust of the number of Shares  which
         become capable of release from escrow by reason of subparagraph  5.2(a)
         at  least  30  days  prior  to  such  possible  release.   Certificates
         representing  such Shares may  thereafter be released by Montreal Trust
         Company upon request of the Shareholder without any further approval or
         consent from Royal Trust.

5.4      Upon  being  satisfied  as to  any  of  the  circumstances  set  out in
         subparagraphs  5.2(b) to (j) and upon receipt of the applicable fee, if
         any, Royal Trust shall notify Montreal Trust which will forthwith issue
         a certificate  representing  the Shares in the name of the  Shareholder
         or, if the  Shares are  registered  in the name of a Trust on behalf of
         the  Shareholder,  in the name of the  trustee of the  trust.  Montreal
         Trust will forthwith deliver the certificate to Royal Trust, which will
         deliver  the  certificate  to the  person  entitled  to  receive  it in
         accordance  with  paragraph 5.2 or, if the Shares are registered in the
         name of a Trust, to the trustee of the Trust.

5.5      If the  Corporation,  Montreal  Trust or Royal Trust  receives from any
         person, other than the Administrator,  notification that any Shares, or
         the beneficial  ownership  thereof or any interest  therein,  have been
         disposed of, the  Corporation,  Montreal  Trust or Royal Trust,  as the
         case may be:

         (a)      shall notify the  Administrator  thereof unless Montreal Trust
                  is  at  that  time  permitted  to  release  the  Shares  under
                  paragraph 5.3; and

         (b)      shall not be obliged to  recognize  any right of the person to
                  whom  the  disposition  was  alleged  to be made  to give  the
                  certificate representing the Shares and shall, upon release of
                  the certificate in accordance  with paragraph 5.2,  deliver it
                  to the  person  entitled  to  receive  it in  accordance  with
                  paragraph 5.3 or 5.4.

6.       Release - General

6.1      The release  from escrow of some or all of the Shares  governed by this
         agreement  shall terminate this agreement only in respect of the Shares
         so released.

6.2      Notwithstanding paragraph 5.1:

         (a)      upon  the  request  of  a  Shareholder,  Shares  held  by  the
                  Shareholder  will be registered by Montreal  Trust in the name
                  of a Trust that will hold the  Shares  for the  benefit of the
                  Shareholder,  Montreal  Trust will  advise  Royal Trust of any
                  such  registration as part of the  information  provided under
                  paragraph 3.1, and the Shares so registered  shall continue to
                  be held  pursuant to this  agreement.  The  provisions of this
                  section 6.2 shall not apply to a trust disposition (as defined
                  in the Act);

         (b)      a  Shareholder  and a savings  institution  (as defined in the
                  Interpretation  Act) may  provide  written  notice to Montreal
                  Trust that the Shareholder has hypothecated or granted a

                                        5

<PAGE>

                  security interest in its Shares to the savings  institution as
                  security  for  indebtedness  incurred  by the  Shareholder  to
                  permit the  purchase  of its Shares,  in which event  Montreal
                  Trust shall acknowledge to the savings institution its receipt
                  of such notice and shall,  notwithstanding any other provision
                  of this  agreement,  deliver a  certificate  representing  the
                  Shares to the  savings  institution  upon their  release  from
                  escrow in accordance with the terms hereof,  unless  otherwise
                  directed by the savings institution.

7.       Dividends and Voting

7.1      If any shares or other securities are distributed by the Corporation as
         a result of any  subdivision  of the shares of the  Corporation  or any
         amalgamation,  merger,  plan  of  arrangement,  winding-up  or  similar
         transaction  involving the Corporation,  the shares or other securities
         which  Shareholders and Trusts are entitled as a result thereof will be
         held  pursuant  to this  agreement  on the same  terms as the Shares in
         respect of which they are distributed.

7.2      Except as provided in paragraph 7.1, if any dividend (including a stock
         dividend) or other  distribution is received by Montreal Trust or Royal
         Trust in respect of the Shares,  such dividend or distribution shall be
         paid or transferred forthwith to the respective Shareholders and Trusts
         entitled thereto.

7.3      All voting rights  attached to the shares may at all times be exercised
         by the respective registered owners thereof.

8.       Indemnification

8.1      If Montreal Trust releases certificates representing any Shares without
         the approval of Royal Trust in  circumstances  where such release would
         not have been  permissible in accordance  with paragraph 5.2,  Montreal
         Trust  covenants and agrees with Royal Trust, as agent for the Minister
         of Finance and Corporate Relations for the Province of British Columbia
         (the  "Minister"),  to pay forthwith to the Minister an amount equal to
         the tax  credits  obtained  under  the Act in  respect  of such  Shares
         provided that:

         (a)      the payment by  Montreal  Trust shall be reduced by any amount
                  of the tax  credits  which  is  repaid  by any of the  persons
                  required under the Act to repay such amount; and

         (b)      if Montreal  Trust  demonstrates  to the  satisfaction  of the
                  Administrator  that no person could be required  under the Act
                  to repay all or a portion of the tax credits,  Montreal  Trust
                  shall not be required  to pay such  portion of the tax credits
                  and, if it has previously paid such portion, shall be entitled
                  to recover it from the Minister.

8.2      If Montreal Trust releases certificates representing any Shares without
         the approval of Royal Trust,  Montreal  Trust will  indemnify  and save
         Royal Trust  harmless from and against any and all  liabilities,  costs
         and expenses which Royal Trust incurs as a result of such release.

9.       Concerning Montreal Trust and Royal Trust

9.1      Montreal   Trust  and  Royal  Trust  each  accepts  the  functions  and
         responsibilities  placed on it by this  agreement and agrees to perform
         the same in accordance with the terms hereof.

                                        6

<PAGE>

9.2      This agreement is entered into for the purposes of providing a security
         arrangement relating to the repayment of tax credits in accordance with
         the Act. This  agreement  shall in no way be construed as  constituting
         either Montreal Trust or Royal Trust as a trustee for the  Shareholders
         or the Corporation.

9.3      The  Corporation  hereby  covenants and agrees from time to time and at
         all times  hereafter  well and truly to save,  defend and keep harmless
         and fully indemnify  Montreal Trust,  Royal Trust and their  respective
         successors  and  assigns  from and against  all loss,  costs,  charges,
         suits,  demands,  claims,  damages  and  expenses  which  they or their
         respective  successors or assigns,  may at any time or times  hereafter
         bear,  sustain,  suffer or be put to for or by reason or on  account of
         performing their respective  functions under this agreement or anything
         in any manner relating thereto or by reason of their compliance in good
         faith  with  the  terms  hereof.   Without  restricting  the  foregoing
         indemnity,  in case proceedings  should hereafter be taken in any court
         respecting the Shares,  neither Montreal Trust nor Royal Trust shall be
         obliged  to defend  any such  action or submit  its rights to the court
         until it shall  have  been  indemnified  by other  good and  sufficient
         security in addition to the  indemnity  herein before given against its
         costs of such proceedings.

9.4      the  Corporation  shall pay fees to Royal Trust and  Montreal  Trust in
         respect of their  services  hereunder.  Such fees and the fees, if any,
         payable upon release of Shares from escrow will be calculated:

         (a)      in  accordance  with the  agreements  from time to time of the
                  Corporation, with Montreal Trust and Royal Trust respectively;
                  or

         (b)      if  Royal  Trust  is  a  party  to  an   agreement   with  the
                  Administrator  providing  a  schedule  of  fees  for  services
                  hereunder  and no fees  are  provided  for  such  services  by
                  agreement   between  the   Corporation  and  Royal  Trust,  in
                  accordance with such schedule.

10.      Amendment and Termination

10.1     The  Corporation  may at any time amend this agreement by instrument in
         writing  delivered to each of Montreal  Trust and Royal Trust  provided
         that no amendment shall:

         (a)      affect the Shares unless previously consented to in writing by
                  Royal Trust with the prior consent of the Administrator;

         (b)      affect the Shares acquired under the Plan prior to the date of
                  delivery of such amendment unless such change is beneficial to
                  the shareholder; and

         (c)      increase  the  responsibilities  of either  Montreal  Trust or
                  Royal Trust without its prior written consent.

10.2     The  Corporation and Montreal Trust may each at any time, upon 90 days'
         written  notice  to  the  other  and to  Royal  Trust,  terminate  this
         agreement, provided that arrangements satisfactory to the Administrator
         are made to provide for the  continued  holding in escrow of the Shares
         for the period and on the terms required by this agreement.

                                        7

<PAGE>

10.3     If any person other than Royal Trust is an authorized  depository under
         the Act,  Royal Trust may be replaced in the  performance of its duties
         and functions hereunder:

         (a)      by Royal Trust at any time upon 90 days' written notice to the
                  Corporation; and

         (b)      by the Corporation at any time after the first  anniversary of
                  the initial  issuance  of Shares  under the Plan upon 90 days'
                  written notice to Royal Trust.

         Royal Trust shall be replaced by another  authorized  depository  under
         the Act  designated  in  writing by the  Corporation  at the time after
         termination,   failing   which   designation   Royal  Trust  is  hereby
         specifically  authorized to request the  Administrator  to designate an
         authorized  depository and, upon the termination date, or at such other
         date as is mutually  agreed upon by Royal Trust and the  Corporation in
         writing,  to transfer to the  authorized  depository  designated by the
         Administrator  all records and other  information  maintained  by Royal
         Trust  concerning the Plan for the purpose of fulfilling its duties and
         functions hereunder.

11.      Notice

11.1     All   certifications,    requests   and   instructions    (collectively
         "communications") given hereunder shall be in writing and signed by the
         appropriate person.

11.2     Communications  of the  Corporation  shall be signed  by an  authorized
         officer or other  representative  of the  Corporation.  The Corporation
         shall from time to time furnish  Montreal  Trust and Royal Trust with a
         certificate  signed by the Chairman,  the President,  a Vice-President,
         the Treasurer or the Secretary of the Corporation  stating the names of
         the officers and other  representatives  so  authorized,  together with
         specimen signatures of all such officers or representatives.

11.3     Montreal  Trust  and Royal  Trust  shall be  entitled  to rely upon the
         identification of such persons as specified in such certificate,  shall
         act in accordance  with  communications  given in accordance  with this
         paragraph 11.3 and shall,  in acting in accordance  with same, be fully
         protected and absolved from any and all liability howsoever arising.

11.4     Communications signed as aforesaid may be delivered or given by telefax
         or letter and, when so given, shall be deemed to have been sufficiently
         given for all purposes of this agreement.

11.5     All  communications  required or permitted  hereunder  shall be validly
         given  if  delivered  personally,  sent  by  prepaid  ordinary  mail or
         transmitted by telefax, as follows:

         (a)      in the case of Montreal Trust Company:

                         Montreal Trust Company
                         4th floor, 510 Burrard Street
                         Vancouver, B.C.  V6C 3B9
                         Telefax:        (604) 683-3694
                         Attention:      Manager Client Services

                                        8

<PAGE>

         (b)      In the case of Royal Trust:

                         Royal Trust Corporation of Canada
                         Global Securities Services
                         Pacific Region
                         P.O. Box 11124
                         Suite 600, 1055 West Georgia Street
                         Vancouver, B.C.  V6E 4P3
                         Telefax:        (604) 257-2581
                         Attention:      Employee Investment Program Coordinator

         (c)      in the case of the Corporation:

                         Spectrum Signal Processing Inc.
                         One Spectrum Court
                         2700 Production Way, Ste 200
                         Burnaby, B.C.  V5A 4V7
                         Telefax:        (604) 421-1764
                         Attention:      General Counsel

         (d)      or to such other  address and number as the party to whom such
                  communication  is to be given shall have last  notified in the
                  same manner  provided in this  section,  the party  giving the
                  communication.

12.      Miscellaneous

12.1     This  agreement  shall be governed by and construed in accordance  with
         the laws of the Province of British Columbia.

12.2     This  agreement  shall enure to the benefit of and be binding  upon the
         Corporation,  Montreal Trust and Royal Trust and the Shareholders,  and
         their  heirs,  executors,  administrators,   successors  and  permitted
         assigns.

                                        9

<PAGE>

IN WITNESS  WHEREOF the parties  hereto have executed these presents the day and
year first above written.

THE COMMON SEAL OF MONTREAL TRUST
COMPANY OF CANADA                                                          C/S
was hereunto affixed in the presence of:

-----------------------------
Authorized Signatory

-----------------------------
Authorized Signatory

THE COMMON SEAL OF ROYAL TRUST                                             C/S
CORPORATION OF CANADA was hereunto affixed in
the presence of:

-----------------------------
Authorized Signatory

-----------------------------
Authorized Signatory

THE COMMON SEAL OF SPECTRUM SIGNAL                                         C/S
PROCESSING INC. was hereunto affixed in the presence of:

-----------------------------
Authorized Signatory

-----------------------------
Authorized Signatory

                                       10

<PAGE>

                                   Appendix A.

                                  Constitution

<PAGE>

1.   PURPOSE OF THE PLAN.......................................................1

2.   DEFINITIONS...............................................................1

3.   ADOPTION, COMMENCEMENT AND TERMINATION OF THE PLAN........................4

4.   REPRESENTATIONS AND WARRANTIES............................................5

5.   OFFERING PERIODS AND ELIGIBILITY TO SUBSCRIBE FOR SHARES..................6

6.   SUBSCRIPTION ENTITLEMENT..................................................6

7.   CONTRIBUTIONS.............................................................7

8.   SHARE ENTITLEMENT.........................................................7

9.   ISSUANCE AND HOLDING OF SHARE CERTIFICATES................................7

10.  WITHDRAWAL FROM PARTICIPATION.............................................8

11.  RELATIONSHIP WITH EMPLOYMENT..............................................8

12.  TRANSFERABILITY...........................................................8

13.  APPLICATION FOR TAX CREDIT CERTIFICATES...................................9

14.  USE OF FUNDS..............................................................9

15.  REPORTS TO EMPLOYEE SHAREHOLDERS..........................................9

16.  OTHER COVENANTS OF THE COMPANY............................................9

17.  PURCHASE BY OR TRANSFER TO TRUSTS........................................10

18.  TAX LIABILITY............................................................10

19.  AMENDMENTS...............................................................11

20.  GENERAL..................................................................11

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