Document:

EX-10.2

 Exhibit 10.2 

WEIGHT WATCHERS INTERNATIONAL, INC. 

TERM SHEET FOR 

CONSULTANT STOCK OPTION AWARDS 
 FOR GOOD
AND VALUABLE CONSIDERATION, Weight Watchers International, Inc., a Virginia corporation (the “Company”), hereby grants to the consultant of the Company identified below (the “Consultant”) a fully vested Option to purchase the
aggregate number of shares of Common Stock of the Company specified below (the “Option Award”) at the purchase price per share specified below (the “Exercise Price”). The Option Award is granted upon the terms, and subject to the
conditions, set forth in this Term Sheet and the Terms and Conditions for Consultant Stock Option Awards as attached hereto (the “Terms and Conditions”), each hereby incorporated herein by this reference and each as amended from time to
time. The Option Award granted hereunder is made and granted as a stand-alone award, separate and apart from, and outside of, the Amended and Restated Weight Watchers International, Inc. 2014 Stock Incentive Plan (the “Plan”), and shall
not constitute an Option Award granted under or pursuant to that Plan. Notwithstanding the foregoing, the terms, conditions and definitions set forth in the Plan shall apply to the Option Award as though the Option Award had been granted under the
Plan (including but not limited to the adjustment provision contained in the Plan), and the Option Award shall be subject to such terms, conditions and definitions which are hereby incorporated herein by reference and made a part hereof.
Notwithstanding the foregoing, the Option Award shall not be counted for purposes of calculating the aggregate number of shares that may be issued or transferred pursuant to awards under the Plan (including pursuant to Section 3(a) of the Plan)
or for purposes of calculating the award limitations under the Plan. Capitalized terms not otherwise defined herein shall have the same meanings ascribed to them in the Terms and Conditions or the Plan. 

 

			
	 Key Terms and Conditions

	Name of Consultant:	 	Oprah Winfrey
	Grant Date:	 	October 18, 2015
	Aggregate Number of Shares subject to Option:	 	3,513,468
	Exercise Price per Share of an Option:	 	US $6.97
	Option Expiration Date:	 	October 18, 2025

 By accepting this Term Sheet, the Consultant acknowledges that she has received and read, and agrees that the Option granted
herein is subject to and qualified in its entirety by this Term Sheet and the Terms and Conditions, and shall be subject to the terms and conditions of this Term Sheet and the Terms and Conditions attached hereto. 

The Consultant may not exercise any portion of the Option prior to the Shareholder Approval Effective Date (as defined in the Terms and Conditions) or
prior to the Closing Date (as defined in the Terms and Conditions). 
  

							
	WEIGHT WATCHERS INTERNATIONAL, INC.	 		 	CONSULTANT
				
	By:	 	 /s/ James R. Chambers
	 		 	 /s/ Oprah Winfrey

	Name:	 	James R. Chambers	 		 	Oprah Winfrey
	Title:	 	Chief Executive Officer	 		 	Address: c/o Harpo, Inc.
		 		 		 	1041 North Formosa Avenue
		 		 		 	West Hollywood, CA 90046

 WEIGHT WATCHERS INTERNATIONAL, INC. 

TERMS AND CONDITIONS FOR 

CONSULTANT STOCK OPTION AWARDS 

Weight Watchers International, Inc., a Virginia corporation (the “Company”), grants to the Consultant who is identified on the Term
Sheet for Consultant Stock Option Awards provided to the Consultant herewith (the “Term Sheet”) the Options specified in the Term Sheet, upon the terms and subject to the conditions set forth in (i) the Term Sheet and (ii) these
Terms and Conditions for Consultant Stock Option Awards (these “Terms and Conditions”), each hereby incorporated herein by this reference and each as amended from time to time. The Option Award granted hereunder is made and granted as a
stand-alone award, separate and apart from, and outside of, the Amended and Restated Weight Watchers International, Inc. 2014 Stock Incentive Plan (the “Plan”), and shall not constitute an Option Award granted under or pursuant to that
Plan. Notwithstanding the foregoing, the terms, conditions and definitions set forth in the Plan shall apply to the Option Award as though the Option Award had been granted under the Plan (including but not limited to the adjustment provision
contained in the Plan), and the Option Award shall be subject to such terms, conditions and definitions which are hereby incorporated herein by reference and made a part hereof. Notwithstanding the foregoing, the Option Award shall not be counted
for purposes of calculating the aggregate number of shares that may be issued or transferred pursuant to awards under the Plan or for purposes of calculating the award limitations under the Plan (including pursuant to Section 3(a) of the Plan).

 ARTICLE I 
 DEFINITIONS

 Capitalized terms not otherwise defined herein shall have the same meanings ascribed to them in the Term Sheet or the Plan. 

Section 1.1 - Cause 

“Cause” shall mean (i) the Consultant’s material breach by the Consultant of the Strategic Agreement which continues beyond
10 days after a written demand for substantial performance is delivered to the Consultant by the Company or its Affiliates, (ii) willful misconduct by the Consultant involving dishonesty or breach of trust in connection with the
Consultant’s service which results in a demonstrable injury (which is other than de minimis) to the Company or its Affiliates, or (iii) the Consultant’s conviction for any felony involving moral turpitude. 

Section 1.2 - Closing Date 

“Closing Date” shall mean the date of the closing of the transactions contemplated under the Purchase Agreement (as defined herein).

 Section 1.3 - Code 

“Code” shall mean the Internal Revenue Code of 1986, as amended. 

Section 1.4 - Committee 

“Committee” shall mean the Compensation Committee of the Board of Directors of the Company. 

Section 1.5 - Common Stock 

“Common Stock” shall mean the common stock, no par value per share, of the Company. 

Section 1.6 - Company 

“Company” shall mean Weight Watchers International, Inc. 

Section 1.7 - Expiration Date 

“Expiration Date” shall mean, with respect to Options, the expiration date specified on the Term Sheet. 

Section 1.8 - Grant Date 

“Grant Date” shall mean the date specified on the Term Sheet on which the Option Award was granted. 

Section 1.9 - Options 

“Option” or “Options” shall each mean the non-qualified stock option to purchase
shares of Common Stock as granted under the Term Sheet and these Terms and Conditions. 
 Section 1.10 -
Permanent Disability 
 The Consultant shall be deemed to have a “Permanent Disability” if the Consultant is unable to engage
in the activities required to be performed by the Consultant by reason of any medically determined physical or mental impairment which can be expected to result in death or which has lasted or reasonably can be expected to last for a continuous
period of not less than 12 months (in each case, as determined in good faith by a majority of the Committee, which determination shall be conclusive). 

  
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 Section 1.11 - Plan 

“Plan” shall mean the Amended and Restated Weight Watchers International, Inc. 2014 Stock Incentive Plan. 

Section 1.12 - Purchase Agreement 

“Purchase Agreement” shall mean the Share Purchase Agreement by and between the Consultant and the Company entered into on the Grant
Date. 
 Section 1.13 - SEC 

“SEC” shall mean the U.S. Securities and Exchange Commission. 

Section 1.14 - Secretary 

“Secretary” shall mean the Secretary of the Company. 

Section 1.15 - Shareholder Approval Effective Date 

“Shareholder Approval Effective Date” shall mean the date upon which shareholder approval of this Option Award becomes effective
(i.e., the date that is 20 calendar days after the date on which the Company’s corresponding Schedule 14C information statement is first mailed or given to the Company’s shareholders pursuant to the terms of the Securities Exchange Act of
1934, as amended). 
 Section 1.16 - Strategic Agreement 

“Strategic Agreement” shall mean the Strategic Collaboration Agreement by and between the Company and the Consultant entered into on
the Grant Date. 
 Section 1.17 - Transfer 

“Transfer” shall mean any sale, assignment, encumbrance, hypothecation, pledge, conveyance in trust, gift, transfer by bequest,
devise or descent, entry into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership (whether to be settled by delivery of shares, in cash or otherwise) or other transfer or disposition of any
kind, including, but not limited to, transfers to receivers, levying creditors, trustees or receivers in bankruptcy proceedings or general assignees for the benefit of creditors whether voluntary or by operation of law, directly or indirectly, of
any Options or Common Stock issuable upon exercise of any Options. 

  
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 ARTICLE II 

GRANT OF OPTIONS 
 Section 2.1 - Grant of Options 
 On and as of the Grant Date, the Company irrevocably grants to the Consultant an
Option to purchase the number of shares of its Common Stock specified on the Term Sheet upon the terms and conditions set forth in the Term Sheet and these Terms and Conditions. The Options shall be fully vested as of the Grant Date and shall be
exercisable in accordance with Article III hereof. 
 Section 2.2 - Exercise Price for Options 

Subject to Section 2.4 below, the exercise price of a share of Common Stock covered by an Option shall be the Exercise Price per share
specified on the Term Sheet, without commission or other charge. 
 Section 2.3 - Consideration to the
Company 
 In consideration of the granting of the Option Award by the Company, the Consultant agrees to render faithful and efficient
services to the Company or its Affiliates pursuant to the Strategic Agreement. Nothing in the Term Sheet or in these Terms and Conditions shall confer upon the Consultant any right to continue in the service of the Company or its Affiliates, or
shall interfere with or restrict in any way the rights of the Company or its Affiliates, which are hereby expressly reserved, to terminate the services of the Consultant at any time for any reason whatsoever, with or without Cause, subject to the
terms of the Strategic Agreement. Consultant hereby acknowledges and agrees that neither the Company or its Affiliates nor any other Person has made any representations or promises whatsoever to the Consultant concerning the Consultant’s
service or continued service to the Company or its Affiliates. 
 Section 2.4 - Adjustments 

Subject to the provisions of the Term Sheet and these Terms and Conditions, in the event that the outstanding shares of the Common Stock
subject to an Option Award are, from time to time, changed into or exchanged for a different number or kind of shares of the Company or other securities of the Company by reason of a merger, consolidation, recapitalization, change of control,
reclassification, stock split, spin-off, stock dividend, combination of shares, or otherwise, the Committee shall make an appropriate and equitable adjustment in the number and kind of shares or other consideration as to which such Option Award,
including the portions thereof then unexercised, that shall be exercisable, and to the Exercise Price per share. 

  
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 ARTICLE III 

EXERCISABILITY 
 Section 3.1 - Commencement of Exercisability 
 Unless otherwise provided in the Term Sheet or these Terms and
Conditions, the shares subject to the Options shall be and remain exercisable from and after the later of the Shareholder Approval Effective Date and the Closing Date through the Expiration Date. 

Section 3.2 - Expiration of Options 

(a) Option Award. The Options shall remain outstanding unless earlier exercised or terminated until the Expiration Date. Except as
otherwise provided herein, the Options may not be exercised to any extent by Consultant after the first to occur of the following events: 

(i) The Expiration Date; 
 (ii)
The first anniversary of the date of the Consultant’s cessation of services by reason of death or Permanent Disability; 
 (iii) The
first business day which is ninety calendar days after the occurrence of a Cause event; 
 (iv) If the Consultant provides the Company
notice of her election to not renew the term of the Strategic Agreement pursuant to the terms thereof, the date of the expiration of the term of the Strategic Agreement; 

(v) If the Committee so determines pursuant to the provisions of these Terms and Conditions, in the event of a Change in Control (as defined
in the Plan). At least ten (10) days prior to the effective date of a Change in Control (as defined in the Plan), the Committee shall give the Consultant notice of such event unless the Options (i) have then been fully exercised or
(ii) have otherwise become unexercisable under this Section 3.2; and 
 (vi) The failure of the Closing Date to occur prior to
November 18, 2015. 

  
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 ARTICLE IV 

EXERCISE OF OPTIONS AND STOCKHOLDER RIGHTS 

Section 4.1 - Person Eligible to Exercise 

During the lifetime of the Consultant, only she or the Trustee of a Consultant’s Trust may exercise the Options or any portion thereof.
After the death of the Consultant, any exercisable portion of the Options may, prior to the time when an Option becomes unexercisable under Section 3.2, be exercised by her personal representative or by any person empowered to do so under the
Consultant’s will or under the then applicable laws of descent and distribution. 
 Section 4.2 - Partial Exercise 

Any exercisable portion of the Options or the entire Options may be exercised in whole or in part at any time prior to the time when the
Options or portion thereof becomes unexercisable under Section 3.2; provided, however, that any partial exercise shall be for whole shares of Common Stock only. 

Section 4.3 - Manner of Exercise 

The Options, or any exercisable portion thereof, may be exercised solely by delivering to the Secretary or his office all of the following
prior to the time when the Options or such portion become unexercisable under Section 3.2: 
 (a) Notice in writing signed by the
Consultant or the other person then entitled to exercise the Options or portion thereof, stating that the Options or portion thereof are thereby exercised, such notice complying with all applicable rules established by the Committee; 

(b) Full payment (in cash, by check or by a combination thereof) for the shares with respect to which such Options or portion thereof are
exercised; 
 (c) If requested by the Committee, a bona fide written representation and agreement, in a form reasonably satisfactory to the
Committee, signed by the Consultant or other person then entitled to exercise such Options or portion thereof, stating that (i) any filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, if any, have been
properly made and any applicable waiting period thereunder has been terminated or has expired and (ii) the shares of stock are being acquired for her own account, for investment and without any present intention of distributing or reselling
said shares or any of them except as may be permitted under the Securities Act of 1933, as amended (the “1933 Act”), and then applicable rules and regulations thereunder, and that the Consultant or other person then entitled to exercise
such Options or portion thereof will indemnify the Company and its Affiliates against 

  
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and hold it free and harmless from any loss, damage, expense or liability resulting to the Company or its Affiliates if any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above; provided, however, that the Committee may, in its absolute discretion, take whatever additional actions it deems appropriate to ensure the observance and performance of such representation and
agreement and to effect compliance with the 1933 Act and any other federal or state securities laws or regulations; 
 (d) Full payment to
the Company of all amounts which, under federal, state or local law, it is required to withhold upon exercise of the Options; and 
 (e) In
the event the Options or portion thereof shall be exercised pursuant to Section 4.1 by any person or persons other than the Consultant, appropriate proof of the right of such person or persons to exercise the Options. 

Without limiting the generality of the foregoing, the Committee may require an opinion of counsel reasonably acceptable to it to the effect that any
subsequent Transfer of shares acquired on exercise of the Options does not violate the 1933 Act, and may issue stop-transfer orders covering such shares. Share certificates evidencing stock issued on exercise
of the Options may bear an appropriate legend referring to the provisions of subsection (c) above and the agreements herein. The written representation and agreement referred to in subsection (c)(ii) above shall, however, not be required if the
shares to be issued pursuant to such exercise have been registered under the 1933 Act, and such registration is then effective in respect of such shares. 

Section 4.4 - Conditions to Issuance of Stock Certificates 

The shares of Common Stock deliverable upon the exercise of the Options, or any portion thereof shall be fully paid and nonassessable. The
Company shall not be required to deliver any certificate or certificates for shares of stock purchased upon the exercise of the Options, or any portion thereof, prior to obtaining of approval or other clearance from any state or federal governmental
agency which the Committee shall, in its absolute discretion, determine to be necessary or advisable. 
 Section 4.5
- Rights as Stockholder 
 (a) Optionholder Rights. The holder of the Options shall not
be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the exercise of the Options or any portion thereof unless and until certificates representing such shares shall have been issued
to such holder as provided under this Article IV. As soon as practicable following the date that the Consultant becomes entitled to receive the shares of Common Stock pursuant to this Article IV, certificates for the Common Stock shall be delivered
to the Consultant or to the Consultant’s legal guardian or representative (or if such Common Stock is evidenced 

  
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by uncertificated securities registered or recorded in records maintained by or on behalf of the Company in the name of a clearing agency, the Company will cause the Common Stock to be entered in
the records of such clearing agency as owned by the Consultant). 
 (b) Tax Advice. The Consultant is hereby advised to seek her own
tax counsel regarding the taxation of an award of an Option made hereunder. 
 ARTICLE V 

TRANSFERS 
 Section 5.1 -
Representations, Warranties and Agreements 
 The Consultant agrees and acknowledges that she will not, directly or indirectly, offer,
Transfer, sell, assign, pledge, hypothecate or otherwise dispose of any shares of Common Stock issuable upon exercise of the Options (or any portion thereof) unless any filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, if any, have been properly made and any applicable waiting period thereunder has been terminated or has expired and such Transfer, sale, assignment, pledge, hypothecation or other disposition is permitted pursuant to the Term Sheet and
these Terms and Conditions and (i) the Transfer, sale, assignment, pledge, hypothecation or other disposition is pursuant to an effective registration statement under the 1933 Act, or (ii) counsel for the Consultant (which counsel shall be
reasonably acceptable to the Company) shall have furnished the Company with an opinion, reasonably satisfactory in form and substance to the Company, that no such registration is required because of the availability of an exemption from registration
under the 1933 Act and (iii) if the Consultant is a citizen or resident of any country other than the United States, or the Consultant desires to effect any such transaction in any such country, counsel for the Consultant (which counsel shall
be reasonably acceptable to the Company) shall have furnished the Company with an opinion or other advice, reasonably satisfactory in form and substance to the Company, that such transaction will not violate the laws of such country. 

Section 5.2 - Acknowledgement by the Company 

Notwithstanding the foregoing, the Company acknowledges and agrees that any of the following Transfers are deemed to be in compliance with the
1933 Act and the Term Sheet and these Terms and Conditions and no opinion of counsel is required in connection therewith: (w) a Transfer made pursuant to Article III hereof, (x) a Transfer upon the death of the Consultant to her executors,
administrators, testamentary trustees, legatees or beneficiaries, provided that such Transfer is made expressly subject to the Term Sheet and these Terms and Conditions and that such transferee shall execute a Joinder (in the form attached hereto as
Exhibit A), agreeing to be bound by the provisions of the Term Sheet and these Terms and Conditions and (y) a Transfer made after the Grant Date in compliance with the federal securities laws to a trust or custodianship the

  
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beneficiaries of which may include only the Consultant, her spouse or her lineal descendants (including lineal descendants by adoption) (a “Consultant’s Trust”), provided that such
Transfer is made expressly subject to the Term Sheet and these Terms and Conditions and that such transferee shall execute a Joinder (in the form attached hereto as Exhibit A), agreeing to be bound by the provisions of the Term Sheet and these Terms
and Conditions. Immediately prior to any Transfer to a Consultant’s Trust, the Consultant shall provide the Company with a copy of the instruments creating a Consultant’s Trust and with the identity of the beneficiaries of such
Consultant’s Trust. The Consultant shall notify the Company immediately prior to any change in the identity of any beneficiary of a Consultant’s Trust. 

Section 5.3 - Transfer Restrictions 

(a) The Common Stock issued to the Consultant upon exercise of the Options may not be Transferred, sold or in any other way disposed of, except
under the circumstances that a “Permitted Transfer” (as defined under the Purchase Agreement) is permitted under the terms of the Purchase Agreement (treating shares of Common Stock acquired upon exercise of the Options as “Purchased
Shares” within the meaning of the Purchase Agreement for this purpose), until such time as the Transfer restrictions set forth in the immediately succeeding sentence lapse; provided, with respect to any Transfer made pursuant to clause (i),
(ii) or (iii) of such definition of “Permitted Transfer”, such transferee shall execute a Joinder (in the form attached hereto as Exhibit A), agreeing to be bound by the provisions of the Term Sheet and these Terms and
Conditions. Such Transfer restrictions shall lapse as to (i) 20% of the shares underlying the Options on the first anniversary of the Grant Date, (ii) 40% of the aggregate number of shares underlying the Options on the second anniversary
of the Grant Date, (iii) 60% of the aggregate number of shares underlying the Options on the third anniversary of the Grant Date, (iv) 80% of the aggregate number of shares underlying the Options on the fourth anniversary of the Grant Date
and (v) 100% of the aggregate number of shares underlying the Options on the fifth anniversary of the Grant Date (each such percentage calculated as if this Option was not exercised, regardless of the number of shares that were exercised);
provided, however, upon the occurrence of any Cause event that occurs prior to the fifth anniversary of the Grant Date, any such Transfer restriction then and thereafter in effect pursuant to this Section 5.3 shall continue and not lapse until
the fifth anniversary of the Grant Date irrespective of the lapse dates set forth in items (i) though (iv) above. 

  
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 (b) Except as otherwise provided herein, neither the Options nor any interest or right therein or
part thereof shall be liable for the debts, contracts or engagements of the Consultant or her successors in interest or shall be subject to disposition by Transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether
such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no
effect; provided, however, that this Section 5.3 shall not prevent Transfers by will or by the applicable laws of descent and distribution. 

(c) Subject to Article VI of the Purchase Agreement, if requested by the Committee, the Consultant agrees that if shares of capital stock of
the Company or any other securities of the Company that are convertible into or exchangeable or exercisable for capital stock of the Company (collectively, “Securities”) are registered pursuant to a registration statement filed with the
SEC (other than a registration statement on Form S-8), the Consultant will not sell or otherwise Transfer any Securities of the Company other than those included in such filing from the date of filing such registration statement (or in the case of
“shelf” registration statement, from the earlier of (x) the date of the initial preliminary prospectus and (y) the date of the final prospectus), until up to 90 days after the public offering date set forth in the final
prospectus. 
 (d) Notwithstanding anything herein to the contrary, the provisions of this Section 5.3 will terminate
(i) immediately prior to a Change in Control (as such term is defined in the Purchase Agreement), and (ii) in the event that either (a) Consultant in her capacity as Director Designee (as defined in the Purchase Agreement) is not
elected to the Board of Directors (other than as a result of the Consultant’s noncompliance with, or inability to satisfy the director eligibility requirements set forth in, Article IV of the Purchase Agreement); or (b) Consultant is not
afforded the right to have an Observer (as defined in the Purchase Agreement) as set forth in Section 4.1 of the Purchase Agreement. 

Section 5.4 - Right of First Offer / Right of First Refusal 

Any Transfer of the shares of Common Stock acquired upon exercise of the Options shall be subject to the right of first offer and right of
first refusal provisions set forth in Article VII of the Purchase Agreement (subject to the termination of those provisions as specified in the Purchase Agreement). 

  
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 ARTICLE VI 

THE COMPANY’S REPRESENTATIONS AND WARRANTIES 

Section 6.1 - Authorization 
 The
Company represents and warrants to the Consultant that (i) the Term Sheet and these Terms and Conditions has been duly authorized, executed and delivered by the Company, and (ii) upon exercise of the Options (or any portion thereof), the
Common Stock, when issued and delivered in accordance with the terms hereof, will be duly and validly issued, fully paid and nonassessable. The Company hereby agrees that it will complete the filing with the SEC and mailing of the Schedule 14C
information statement related to the Shareholder Approval Effective Date by no later than twenty (20) calendar days after the Grant Date. In the event that the Schedule 14C is mailed later than twenty (20) calendar days after the Grant
Date, Section 5.3 of these Terms and Conditions shall be of no further force or effect. 
 Section 6.2 - Registration 

The Company shall register the Common Stock underlying the Options and the Options on a Form S-8
Registration Statement within ten (10) calendar days after the Shareholder Approval Effective Date, and the Company will file the reports required to be filed by it under the 1933 Act and the Securities Exchange Act of 1934, as amended (the
“Act”), and the rules and regulations adopted by the SEC thereunder, to the extent required from time to time to enable the Consultant to sell her shares of Stock without registration under the 1933 Act within the limitations of the
exemptions provided by (A) Rule 144 under the 1933 Act, as such rule may be amended from time to time, or (B) any similar rule or regulation hereafter adopted by the SEC. Notwithstanding anything contained in this Section 6.2, the
Company may deregister under Section 12 of the Act if it is then permitted to do so pursuant to the Act and the rules and regulations thereunder. Nothing in this Section 6.2 shall be deemed to limit in any manner the restrictions on sales
of Common Stock contained in the Term Sheet and these Terms and Conditions. In the event that a Form S-8 Registration Statement relating to the Common Stock underlying the Options and the Options is not filed
with the SEC within ten (10) calendar days after the Shareholder Approval Effective Date, Sections 5.3 and 5.4 of these Terms and Conditions shall be of no further force or effect. 

ARTICLE VII 
 MISCELLANEOUS

 Section 7.1 - Administration 

The Committee shall have the power to interpret the Term Sheet and these Terms and Conditions and to adopt such rules for the administration,
interpretation and application of the Term Sheet and these Terms and Conditions as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final
and binding upon the Consultant, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Term Sheet, these Terms and
Conditions or the Options. In its absolute 

  
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discretion, the Board of Directors of the Company may at any time and from time to time exercise any and all rights and duties of the Committee under the Term Sheet and these Terms and
Conditions. 
 Section 7.2 - Shares to Be Reserved 

The Company shall at all times from the Shareholder Approval Effective Date and continuing for the duration of the term of the Option Award
reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of the Term Sheet and these Terms and Conditions. 

Section 7.3 - Recapitalizations, etc. 

The provisions of the Term Sheet and these Terms and Conditions shall apply, to the full extent set forth herein with respect to the Option
Award, to any and all shares of capital stock of the Company or any capital stock, partnership units or any other security evidencing ownership interests in any successor or assign of the Company or its Affiliates (whether by merger, consolidation,
sale of assets or otherwise) which may be issued in respect of, in exchange for, or substitution of the Option Award, by reason of any stock dividend, split, reverse split, combination, recapitalization, liquidation, reclassification, merger,
consolidation or otherwise. 
 Section 7.4 - State Securities Laws 

The Company hereby agrees to use its best efforts to comply with all state securities or “blue sky” laws which might be applicable to
the issuance of the shares underlying the Options to the Consultant. 
 Section 7.5 - Binding Effect 

The provisions of the Term Sheet and these Terms and Conditions shall be binding upon and accrue to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns. In the case of a transferee permitted under the Term Sheet and these Terms and Conditions, such transferee shall be deemed the Consultant hereunder; provided, however, that no
transferee shall derive any rights under the Term Sheet and these Terms and Conditions unless and until such transferee has delivered to the Company a Joinder (in the form attached hereto as Exhibit A) and becomes bound by the terms of the Term
Sheet and these Terms and Conditions. 
 Section 7.6 - Miscellaneous 

In the Term Sheet and these Terms and Conditions, (i) all references to “dollars” or “$” are to United States dollars
and (ii) the word “or” is not exclusive. If any provision of the Term Sheet and these Terms and Conditions shall be declared illegal, void or unenforceable by any court of competent jurisdiction, the other provisions shall not be
affected, but shall remain in full force and effect. 

  
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 Section 7.7 - Notices 

Any notice to be given under the terms of the Term Sheet and these Terms and Conditions shall be in writing and shall have been deemed duly
given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. Any notice shall be sent to the
party to be notified at the address as set forth in this Section 7.7 or the signature pages to the joinder agreement substantially in the form of Exhibit A hereto; provided, however that by a notice given pursuant to this Section 7.7,
either party may hereafter designate a different address for notices to be given to Company or Consultant and any notice which is required to be given to the Consultant shall, if the Consultant is then deceased, be given to the Consultant’s
personal representative if such representative has previously informed the Company of his or her status and address by written notice under this Section 7.7.  

If to Company: 
 Weight Watchers
International, Inc. 
 675 Avenue of the Americas, 6th Floor 

New York, New York 10010 

Facsimile: 212-589-2858 

Attention: General Counsel and Secretary 

With a copy (not constituting notice) to: 

Simpson Thacher & Bartlett LLP 

425 Lexington Avenue 
 New York,
New York 10017 
 Facsimile: (212) 455-2502 

Attention:  Robert Spatt 

       Kenneth B. Wallach 

If to Consultant: 
 Oprah Winfrey

 c/o Harpo, Inc. 
 1041 North
Formosa Avenue 
 West Hollywood, CA 90046 

With a copy (not constituting notice) to: 

Loeb & Loeb LLP 
 345
Park Avenue 
 New York, New York 10154 

  
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 Attn: Marc Chamlin, Esq. and Lloyd L. Rothenberg, Esq. 

Fax: (212) 656-1076 
 E-mail:
mchamlin@loeb.com; lrothenberg@loeb.com. 
 Section 7.8 - Titles 

Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Term Sheet and these
Terms and Conditions. 
 Section 7.9 - Applicability of Plan 

The Common Stock issued to the Consultant upon exercise of the Options shall be subject to all of the terms and provisions of the Term Sheet
and these Terms and Conditions (including the terms and conditions of the Plan incorporated by reference herein), to the extent applicable to the Option and any shares of Common Stock issuing upon the exercise of the Options (or any portion
thereof). In the event of any conflict between the Term Sheet and these Terms and Conditions, these Terms and Conditions shall control. 

Section 7.10 - Intentionally Omitted 

Section 7.11 - Amendment 

The Term Sheet and these Terms and Conditions may be amended only by a writing executed by the parties hereto which specifically states that it
is amending the Term Sheet or these Terms and Conditions, as applicable. 
 Section 7.12 - Governing Law

 The Term Sheet and these Terms and Conditions shall be governed by, and construed and interpreted in accordance with, the law of the
State of New York. 

  
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 Section 7.13 - Jurisdiction 

The parties to the Term Sheet and these Terms and Conditions agree that jurisdiction and venue in any action brought by any party hereto
pursuant to the Term Sheet and these Terms and Conditions shall properly lie and shall be brought in any federal or state court located in the Borough of Manhattan, City and State of New York. By execution and delivery of Term Sheet and these Terms
and Conditions, each party hereto irrevocably submits to the jurisdiction of such courts for itself, himself or herself and in respect of its, his or her property with respect to such action. The parties hereto irrevocably agree that venue would be
proper in such court, and hereby irrevocably waive any objection that such court is an improper or inconvenient forum for the resolution of such action. 

Section 7.14 - Counterparts 
 The
Term Sheet and these Terms and Conditions may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument. 

  
 15 

 EXHIBIT A 

JOINDER 
 By execution of this
Joinder, the undersigned agrees to become a party to that certain Term Sheet for Consultant Stock Option Awards and that certain Terms and Conditions for Consultant Stock Option Awards, effective as of
                     (collectively, the “Agreement”), by and between WEIGHT WATCHERS INTERNATIONAL, INC. (the “Company”) and
                     (the “Consultant”). By execution of this Joinder, the undersigned shall have all the rights, and shall observe all the
obligations, applicable to the Consultant (except as otherwise set forth in the Agreement), and to have made on the date hereof all representations and warranties made by such Consultant, modified, if necessary, to reflect the nature of the
undersigned as a trust, estate or other entity. 
  

					
	Name:	 		 	
			
	Address for Notices:	 		 	With copies to:
			
	  
	 		 	  

	  
	 		 	  

	  
	 		 	  

	  
	 		 	  

	  
	 		 	  

  

			
	Signature:	 	  

  

			
	Date:	 	  

  
 16Exhibit 4.4

 

XBIOTECH INC.

 

 

 

 

 

 

XBIOTECH 2005 INCENTIVE STOCK OPTION
PLAN

(RESTATED TO REFLECT AMENDMENTS TO DATE)

 

 

 

 

 

 

 

    

     

    

XBIOTECH
INC.

 

XBIOTECH 2005 INCENTIVE STOCK OPTION PLAN

 

 1.                          PURPOSE of the plan

 

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

 

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

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

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

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

 

 2.                          DEFINITIONS

 

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

 

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

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

		(a)	“Change in Control” means:
	 	 	 

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

 

    

     

    

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

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

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

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

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

 

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

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

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

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

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

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

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

 

    2 

     

    

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

		(k)	“Merger and Acquisition Transaction” means:
	 	 	 

		(i)	any merger;
	 	 	 

		(ii)	any acquisition;
	 	 	 

		(iii)	any amalgamation;
	 	 	 

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

		(v)	any arrangement or other scheme of reorganization;
	 	 	 

that results in a Change
in Control;

 

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

 

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

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

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

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

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

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

 

    3 

     

    

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

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

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

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

 3.                          EFFECTIVE DATE OF PLAN

 

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

 

4.                          COMMON SHARES SUBJECT TO PLAN

 

4.1                        Common Shares Subject to this Plan. The aggregate number of Common Shares in respect of which Options may be granted
pursuant to this Plan shall not exceed 6,000,000. The number of Common Shares in respect of which Options may be granted pursuant
to this Plan may be increased, decreased or fixed by the Board of Directors, as permitted under the applicable rules and regulations
of all regulatory authorities to which the Company is subject, including the Stock Exchange.

 

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

 

4.3                        Reservation of Shares. The Board of Directors will reserve for allotment from time to time out of the authorized but
unissued Common Shares sufficient Common Shares to provide for issuance of all Common Shares which are issuable under all outstanding
Options.

 

4.4                        No Fractional Shares. No fractional Common Shares may be purchased or issued under this Plan.

 

5.                          ADMINISTRATION OF PLAN

 

5.1                        Administration of Plan. The Board of Directors may at any time appoint a committee (the “Compensation Committee”)
to, among other things, interpret, administer and implement this Plan on behalf of the Board of Directors in accordance with such
terms and conditions as the Board of Directors may prescribe, consistent with this Plan (provided that if at any such time such
a committee has not been appointed by the Board of Directors, this Plan will be administered by the Board of Directors, and in
such event references herein to the Compensation Committee shall be construed to be a reference to the Board of Directors). The
Board of Directors will take such steps which in its opinion are required to ensure that the Compensation Committee has the necessary
authority to fulfil its functions under this Plan.

 

    4 

     

    

5.2                        Powers of Compensation Committee.  The Compensation Committee is authorized, subject to the provisions of this Plan,
to establish from time to time such rules and regulations, make such determinations and to take such steps in connection with this
Plan as in the opinion of the Compensation Committee are necessary or desirable for the proper administration of this Plan. For
greater certainty, without limiting the generality of the foregoing, the Compensation Committee will have the power, where consistent
with the general purpose and intent of this Plan and subject to the specific provisions of this Plan and any approval of the Stock
Exchange, if applicable:

 

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

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

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

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

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

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

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

 

    5 

     

    

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

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

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

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

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

 

6.                          GRANT OF OPTIONS

 

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

 

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

 

6.2                        Number of Common Shares/Maximum Grant.  The number of Common Shares that may be purchased under any Option will be determined
by the Compensation Committee, provided that the number of Common Shares reserved for issuance to any one person pursuant to this
Plan shall not, in aggregate, exceed 5% of the total number of Outstanding Common Shares. A Participant who holds Options at the
time of granting an Option, may hold more than one Option.

 

6.3                        Exercise Price.  The Exercise Price per Common Share under each Option will be the fair market value of such shares
at the time of grant, expressed in terms of money, as determined by the Compensation Committee, in its sole discretion, provided
that such price may not be less than the lowest price permitted under the applicable rules and regulations of all regulatory authorities
to which the Company is subject, including the Stock Exchange.

 

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

 

    6 

     

    

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

 

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

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

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

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

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

 

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

 

    7 

     

    

6.6                        Change
in Status. A change in the status, office, position or duties of a Participant from the status, office, position or duties
held by such Participant on the date on which the Option was granted to such Participant will not result in the termination of
the Option granted to such Participant provided that such Participant remains a director, officer, employee or Consultant of the
Company or an Affiliate.

 

6.7                        Non-Transferability of Options.  Each Option Agreement will provide that the Option granted thereunder is not transferable
or assignable and may be exercised only by the Participant or, in the event of the death of the Participant or the appointment
of a committee or duly appointed attorney of the Participant or of the estate of the Participant on the grounds that the Participant
is incapable, by reason of physical or mental infirmity, of managing their affairs, the Participant's legal representative or such
committee or attorney, as the case may be (the "Legal Representative").

 

6.8                        Representations and Covenants of Participants.  Each Option Agreement will contain representations and covenants of
the Participant that:

 

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

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

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

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

		(e)	if the Participant or the Legal Representative of the Participant exercises the Option, the Participant
or the Legal Representative, as the case may be, will prior to and upon any sale or disposition of any Common Shares purchased
pursuant to the exercise of the Option, comply with all applicable securities laws and all applicable rules and regulations of
all regulatory authorities to which the Company is subject, including the Stock Exchange, and will not offer, sell or deliver any
of such Common Shares, directly or indirectly, in the United States or to any citizen or resident of, or any Company, partnership
or other entity created or organized in or under the laws of, the United States, or any estate or trust the income of which is
subject to United States federal income taxation regardless of its source, except in compliance with the securities laws of the
United States.

 

    8 

     

    

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

 

 7.                          U.S. Qualified INCENTIVE STOCK OPTION PROVISIONS

 

To the extent required
by Section 422 of the U.S. Internal Revenue Code, U.S. Qualified Incentive Stock Options shall be subject to the following additional
terms and conditions and if there is any conflict between the terms of this Article and other provisions under this Plan, the provisions
under this Article shall prevail:

 

7.1                        Eligible Employees.  All classes of employees of the Company or one of its parent corporations or subsidiary corporations
may be granted U.S. Qualified Incentive Stock Options. U.S. Qualified Incentive Stock Options shall only be granted to U.S. Optionees
who are, at the time of grant, officers, key employees or directors of the Company or one of its parent corporations or subsidiary
corporations (provided, for purposes of this Article 7 only, such directors are then also officers or key employees of the Company
or one of its parent corporations or subsidiary corporations). For purposes of this Article 7, "parent corporation" and
"subsidiary corporation" shall have the meanings attributed to those terms for the purposes of Section 422 of the U.S.
Internal Revenue Code. Any director of the Company who is a U.S. Optionee shall be ineligible to vote upon the granting of such
Option; and for greater certainty, contractors of the Company or subsidiary corporations may not be granted U.S. Qualified Incentive
Stock Options.

 

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

 

    9 

     

    

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

 

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

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

 

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

 

7.4                        Exercisability.  To qualify for U.S. Qualified Incentive Stock Option tax treatment, an Option designated as a U.S.
Qualified Incentive Stock Option must be exercised within three months after termination of employment for reasons other than death,
except that, in the case of termination of employment due to total disability, such Option must be exercised within one year after
such termination. Employment shall not be deemed to continue beyond the first 90 days of a leave of absence unless the U.S. Optionee's
reemployment rights are guaranteed by statute or contract. For purposes of this Section 7.4, "total disability" shall
mean a mental or physical impairment of the U.S. Optionee which is expected to result in death or which has lasted or is expected
to last for a continuous period of 12 months or more and which causes the U.S. Optionee to be unable, in the opinion of the Company
and two independent physicians, to perform his or her duties for the Company and to be engaged in any substantial gainful activity.
Total disability shall be deemed to have occurred on the first day after the Company and the two independent physicians have furnished
their opinion of total disability to the Compensation Committee.

 

7.5                        Taxation of U.S. Qualified Incentive Stock Options.  In order to obtain certain tax benefits afforded to U.S. Qualified
Incentive Stock Options under Section 422 of the U.S. Internal Revenue Code, the U.S. Optionee must hold the Common Shares issued
upon the exercise of a U.S. Qualified Incentive Stock Option for two years after the date of grant of the U.S. Qualified Incentive
Stock Option and one year from the date of exercise. A U.S. Optionee may be subject to U.S. alternative minimum tax at the time
of exercise of a U.S. Qualified Incentive Stock Option. The Compensation Committee may require a U.S. Optionee to give the Company
prompt notice of any disposition of shares acquired by the exercise of a U.S. Qualified Incentive Stock Option prior to the expiration
of such holding periods.

 

7.6                        Transferability.  No U.S. Qualified Incentive Stock Option granted under this Plan may be assigned or transferred by
the U.S. Optionee other than by will or by the laws of descent and distribution, and during the U.S. Optionee's lifetime, such
U.S. Qualified Incentive Stock Option may be exercised only by the U.S. Optionee.

 

    10 

     

    

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

 

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

 

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

 

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

 

8.                          exercise of options

 

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

 

		(a)	cash, bank draft or certified cheque;
	 	 	 

		(b)	pursuant to a cashless exercise arrangement with a broker;
	 	 	 

		(c)	with the prior written consent of the Compensation Committee, through net exercise by reducing
the number of Common Shares otherwise deliverable upon exercise of an Option by such number of Common Shares as have, as determined
by the Compensation Committee, an aggregate fair market value equal to the Exercise Price at the time of exercise; or

 

    11 

     

    

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

 

As soon as practicable after any exercise
of an Option, a certificate or certificates representing the Common Shares in respect of which such Option is exercised will be
delivered by the Company to the Participant.

 

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

 

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

 

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

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

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

 9.                          SUSPENSION, AMENDMENT OR TERMINATION OF PLAN

 

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

 

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

 

    12 

     

    

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

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

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

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

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

 

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

 

10.                        ADJUSTMENTS

 

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

 

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

 

    13 

     

    

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

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

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

 

Section 10.1 and subsections (a), (b) and (c) of this Section
10.2 are intended to be permissive and may be utilized independently or successively in combination or otherwise, and nothing therein
contained shall be construed as limiting or affecting the ability of the Compensation Committee to deal with Options in any other
manner. All determinations by the Compensation Committee under this Section will be final, binding and conclusive for all purposes.

 

10.3                      Limitations. The grant of Options under this Plan will in no way affect the Company’s right to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge, amalgamate, reorganize, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets or engage in any like transaction.

 

10.4                      No Fractional Shares. No adjustment or substitution provided for in this Article 10 will require the Company to issue
a fractional share in respect of any Option and the total substitution or adjustment with respect to each Option will be limited
accordingly.

 

    14 

     

    

 11.                        GENERAL

 

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

 

11.2                      No Effect on Employment. Nothing in this Plan or any Option Agreement will confer upon any Participant any right to
continue in the employ of or under contract with the Company or an Affiliate or affect in any way the right of the Company or any
such Affiliate to terminate his or her employment at any time or terminate his or her consulting contract; nor will anything in
this Plan or any Option Agreement be deemed or construed to constitute an agreement, or an expression of intent, on the part of
the Company or any such Affiliate to extend the employment of any Participant beyond the time that he or she would normally be
retired pursuant to the provisions of any present or future retirement plan of the Company or an Affiliate or any present or future
retirement policy of the Company or an Affiliate, or beyond the time at which he or she would otherwise be retired pursuant to
the provisions of any contract of employment with the Company or an Affiliate. Neither any period of notice nor any payment in
lieu thereof upon termination of employment shall be considered as extending the period of employment for the purposes of the Plan.

 

11.3                      No Fettering of Directors’ Discretion. Nothing contained in this Plan will restrict or limit or be deemed to restrict
or limit the right or power of the Board of Directors in connection with any allotment and issuance of Common Shares which are
not allotted and issued under this Plan including, without limitation, with respect to other compensation arrangements.

 

11.4                      Applicable Law. The Plan and any Option Agreement granted hereunder will be governed, construed and administered in
accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein.

 

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

 

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

 

 

 

 

 

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