Document:

EXHIBIT 4.4  

OPTION AGREEMENT  

        OPTION
AGREEMENT dated this 9th day of November, 2005 between QSound Labs, Inc., a body
corporate, continued under the laws of the Province of Alberta, having its head office at
400 – 3115 12th Street NE, Calgary, AB T2E 7J2 (QSound Labs, Inc. and its
subsidiaries and affiliated companies are collectively and individually
“Company”) and Shawn Richards (the “Optionee”); 

        WHEREAS
the Optionee is an employee, officer, director or consultant of the Company, and the
Company is desirous of granting an incentive option to the Optionee to purchase common
shares without par value in the capital of the Company; 

        In
consideration of the premises and of the mutual covenants and agreements herein contained,
the parties hereby covenant and agree each with the other as follows: 

     1.    
          Grant of Option. The Company hereby grants to the Optionee under the 1998
          Stock Option Plan (“Plan”) the irrevocable option to
          purchase common shares without par value in the capital of the Company, or any
          part thereof, as follows (“Option”): 

	  	
Number of shares:

Exercise price:  

Expiry Date:     

Vesting:         	  	
100,000                                                                

$2.40 U.S. per share                                                   

Three years after vesting but in no event later than November 8, 2015
As agreed between the Company and the Optionee
 

     2.    
          Exercise of Option. Subject to section 5. hereof, the Optionee may
          exercise the Option at any time or from time to time by giving written notice to
          the Company substantially in the form attached hereto as Schedule “A”
          and delivering to the Company a certified cheque in an amount equal to the
          number of common shares in respect of which the Option is being exercised
          multiplied by the exercise price specified in section 1. hereof. 

     3.    
          Optionee’s Representation. The Optionee hereby confirms and
          represents that he/she is an employee, officer, director or consultant of or for
          the Company (“Service Provider”), as the case may be, at the date
          hereof. 

     4.    
          Other Remuneration. This Agreement shall not preclude or limit the
          Company from paying, or the Optionee from accepting, compensation or other
          remuneration for any work or services performed by the Optionee for the Company. 

     5.    
          Entitlement to Exercise Not withstanding any other provision hereof, the
          Optionee shall only be entitled to exercise the Option while a Service Provider
          of the Company or any of its subsidiaries or during a period commencing on the
          date of notice given by either Company or Optionee to the other party, of
          termination of Optionee as a Service Provider of the Company or any of its
          subsidiaries and ending on the earlier of 30 days thereafter and the Expiry
          Date, or on such later date as may be determined by the Board of Directors. 

     6.    
          Exercise by Personal Representative In the event of the Optionee’s
          death while a Service Provider of the Company or any of its subsidiaries, the
          personal representative of the Optionee shall be entitled to exercise the Option
          in whole or in part as to any shares not previously purchased hereunder by
          giving written notice to the Company and paying the purchase price to the
          Company during a period commencing on the date of death of the Optionee and
          ending on the earlier of one year thereafter and the Expiry Date, or on such
          later date as may be determined by the Board of Directors. 

     7.    
          Fully Paid Shares All common shares purchased by the Optionee hereunder
          shall be fully paid and non-assessable common shares. 

     8.    
          Adjustment The number of common shares subject to the Option shall be
          increased or decreased proportionately in the event of the subdivision or
          consolidation of common shares of the Company, and in any event a corresponding
          adjustment shall be made changing the number of shares deliverable upon the
          exercise of the Option without change in the total price applicable to the
          unexercised portion of the option, but with a corresponding 

adjustment in the price for each
share covered by the Option. In case the Company is reorganized or merged or consolidated
or amalgamated with another corporation, appropriate provisions shall be made for the
continuance of the Option and to prevent its dilution or enlargement. 

     9.    
          No Registration The Optionee understands that the common shares to be
          issued pursuant to the option may not be registered under the United States
          Securities Act of 1933 (the “Act”) in reliance upon an exemption from
          the registration requirements thereof pursuant to Section 4(2) of the Act. The
          Optionee agrees to execute and deliver any and all documents at the time of
          exercise of the Option as may be necessary to assure compliance with U.S.
          federal and state securities laws. The Optionee understands that QSound Labs,
          Inc. shall not be required to register any common shares acquired by the
          Optionee and that the Optionee may be required to hold such common shares
          indefinitely in the absence of registration or an exemption from registration
          under the United States federal or state securities laws. 

     10.    
          Legend The Optionee acknowledges that all common shares issued pursuant
          hereto may bear the following legends (which may be modified from time to time
          in such manner as the Corporation’s attorneys recommend): 

	  	
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER UNITED STATES FEDERAL OR
STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR
ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE SECURITIES BE TRANSFERRED ON THE
BOOKS OF THE CORPORATION, WITHOUT REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE
UNITED STATES FEDERAL OR STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION
THEREFROM, SUCH COMPLIANCE, AT THE OPTION OF THE CORPORATION, TO BE EVIDENCED BY AN
OPINION OF SECURITYHOLDER’S COUNSEL, ACCEPTABLE TO THE CORPORATION, THAT NO VIOLATION
OF SUCH REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR
ASSIGNMENT.” 

     11.    
          Amendment If the approval of the Company’s shareholders to any
          amendment to this Agreement shall be required by the prevailing policies of the
          regulatory securities bodies having jurisdiction over the Company, then any
          amendment made to this agreement shall be subject to the approval of the
          shareholders of the Company. 

     12.    
          Time of the Essence Time shall be essence hereof. 

     13.    
          Transfer Upon the approval of the Plan Administrator, the Option may be
          transferred in accordance with the provisions of the Plan. 

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

QSOUND LABS, INC. 

Per:  /s/ David Gallagher  

       ___________________________________

/s/ Shawn Richards

______________________________________

OPTIONEE 

SCHEDULE A  

QSound Labs, Inc. 

400 – 3115 12th Street NE

Calgary, AB T2E 7J2 

Attention:   Secretary 

Dear Sirs: 

	  	Re:  	  	Exercise
of Stock Option 

        The
undersigned, being the holder of an option to purchase common shares of QSound Labs, Inc.
(the “Company”) does hereby elect to exercise such option to the extent of the
purchase of common shares at the exercise prices of $ per share and does hereby tender to
the Company the total purchase price of $  therefor. 

        The
undersigned acknowledges that if common shares issued pursuant hereto may not be
registered pursuant to applicable securities laws of the United States, any certificate
representing such shares will bear a legend in a form which may be approved by the
Company’s counsel and the undersigned consents to the imposition of any such legend. 

Yours truly, 

______________________________

OPTIONEE 

DATED this ____ day of __________________, 200_.EXHIBIT 4.5  

EMPLOYEE STOCK OPTION
PLAN 

This Employee Stock Option Plan (the
“Plan”) provides for the grant of options to acquire common shares (the
“Common Shares”), of QSound Labs, Inc., an Alberta corporation (the
“Company”). Stock Options granted under this Plan are referred to as
“Options.” 

	1.  	  	PURPOSES  

The purposes of this Plan are to
retain the services of valued key employees and consultants of the Company as the Plan
Administrator may select in accordance with Section 3 below, to encourage such persons to
acquire a greater proprietary interest in the Company, thereby strengthening their
incentive to achieve the objectives of the shareholders of the Company, and to serve as an
aid and inducement in the hiring of new employees and to provide an equity incentive to
consultants selected by the Plan Administrator. 

	2. 	  	ADMINISTRATION  

     (a)    
          This Plan will be administered initially by the Board of Directors of the
          Company (the “Board”), except that the Board may, in its discretion,
          establish a committee composed of one (1) or more other persons to administer
          the Plan, which committee (the “Committee”) may be an executive,
          compensation or other committee, including a separate committee especially
          created for this purpose. The Committee will have the powers and authority
          vested in the Board hereunder (including the power and authority to interpret
          any provision of the Plan or of any Option). The member(s) of any such Committee
          will serve at the pleasure of the Board. A majority of the members of the
          Committee will constitute a quorum, and all actions of the Committee will be
          taken by a majority of the members present. Any action may be taken by a written
          instrument signed by the sole member or by all of the members of the Committee
          and any action so taken will be fully effective as if it had been taken at a
          meeting. The Board or, if applicable, the Committee is referred to in this Plan
          as the ” Plan Administrator.” 

     (b)    
          Subject to the provisions of this Plan, and with a view to effecting its
          purpose, the Plan Administrator has sole authority, in its absolute discretion,
          to (i) construe and interpret this Plan; (ii) define the terms used in the Plan;
          (iii) prescribe, amend and rescind the rules and regulations relating to this
          Plan; (iv) correct any defect, supply any omission or reconcile any
          inconsistency in this Plan; (v) grant Options under this Plan; (vi) determine
          the individuals to whom Options will be granted under this Plan; (vii) determine
          the time or times at which Options are granted under this Plan; (viii) determine
          the number of Common Shares subject to each Option, the exercise price of each
          Option, the duration of each Option and the time at which each Option will
          become exercisable; (ix) determine all other terms and conditions of the
          Options; and (x) make all other determinations and interpretations necessary and
          advisable for the administration of the Plan. All decisions, determinations and
          interpretations made by the Plan Administrator will be binding and conclusive on
          all participants in the Plan and on their legal representatives, heirs and
          beneficiaries. 

	3. 	  	ELIGIBILITY  

Options may be granted to: i)
employees, excluding officers of the Company, and ii) consultants, excluding consultants
who directly or indirectly promote or maintain a market for the Common Shares,
(collectively “Employees”) of the Company and any parent or subsidiary of the
Company as the Plan Administrator may select. No Options may be granted to a director of
the Company. Options may be granted in substitution for outstanding Options of another
corporation in connection with the merger, consolidation, acquisition of property or stock
or other reorganization between such other corporation and the Company or any subsidiary
of the Company. Options also may be granted in exchange for outstanding Options. Any
person to whom an Option is granted under this Plan or who is the owner of an Option under
this Plan is referred or as a “Optionee”. 

	4. 	  	COMMON
SHARES  

The Plan Administrator is authorized
to grant Options to acquire up to a total of 150,000 of the Company’s authorized but
unissued, or reacquired, Common Shares. The number of shares with respect to which Options
may be granted hereunder is subject to adjustment as set forth in Section 5(m) hereof. If
any outstanding Option expires or is terminated for any reason, the Common Shares
allocable to the unexercised portion of such Option may again be subject to an Option
granted to the same optionee or to a different person eligible under Section 3 of this
Plan. 

	5. 	  	TERMS
AND CONDITIONS OF OPTIONS  

Each Option granted under this Plan
will be evidenced by a written agreement approved by the Plan Administrator (the
“Agreement”). Agreements may contain such provisions, not inconsistent with this
Plan, as the Plan Administrator in its discretion may deem advisable. All Options must
also comply with the following requirements: 

     (a)    
          Number of Shares and Types of Options Each Agreement must state the number
          of Common Shares to which it pertains. 

     (b)    
          Date of Grant Each Agreement must state the date the Plan Administrator has
          deemed to be the effective date of the Option for purpose of this Plan ( the
          “Date of Grant”). 

     (c)    
          Option Price Each Agreement must state the price per Common Share at which
          it is exercisable. The Plan Administrator may fix the exercise price in its sole
          discretion; provided that Options granted in substitution for outstanding
          options of another corporation in connection with the merger, consolidation,
          acquisition of property or stock or other reorganization involving such other
          corporation and the Company or any subsidiary of the Company may be granted with
          an exercise price equal to the exercise price for the substituted option of the
          other corporation, subject to any adjustment consistent with the terms of the
          transaction pursuant to which the substitution is to occur. 

     (d)    
          Duration of Options At the time of the grant of the Option, the Plan
          Administrator will designate, subject to paragraph 5(g) below, the expiration
          date of the Option, which date must not be later than ten (10) years from the
          Date of Grant. Each Agreement must state the expiration date of the Option. 

     (e)    
          Vesting Schedule 

     (i)    
          No Option will be exercisable until it has vested. The Plan Administrator may
          specify a vesting schedule for each Option. 

     (ii)    
          The Plan Administrator may specify a vesting schedule for all or any portion of
          an Option based on the achievement of performance objectives established by the
          Plan Administrator. Performance objectives may be expressed in terms including
          but not limited to one or more of the following: return on equity, return on
          assets, share price, market share, sales, earnings per share, costs, net
          earnings, net worth, inventories, cash and cash equivalents, gross margin or the
          Company’s performance relative to its internal business plan. Performance
          objectives may be in respect of the performance of the Company as a whole
          (whether on a consolidated or unconsolidated basis), an affiliated company, or a
          subdivision, operating unit, product or product line of either of the foregoing.
          Performance objectives may be absolute or relative and may be expressed in terms
          of a progression or a range. An Option that is exercisable (in full or in part)
          upon the achievement of one or more performance objectives may be exercised only
          following written notice to the Optionee and the Company by the Plan
          Administrator that the performance objective has been achieved. 

     (f)    
          Acceleration of Vesting The vesting of one or more outstanding Options may
          be accelerated by the Plan Administrator at such time and in such amounts as it
          determines in its sole discretion. 

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     (g)    
          Term of Option 

     (i)    
          Vested options will terminate, to the extent not previously exercised, upon the
          occurrence of the first of the following events: (A) the expiration of the
          Option, as designated by the Plan Administrator in accordance with Section 5 (d)
          above; (B) the date of an Optionee’s termination of employment or
          contractual relationship with the Company or any affiliated company for cause
          (as determined in the sole discretion of the Plan Administrator); (C) the
          expiration of thirty (30) days from the date of notice by the Optionee or the
          Company of termination of the Optionee’s of employment or contractual
          relationship with the Company or any affiliated company for any reason
          whatsoever other than cause, death or Disability (as defined below) unless the
          exercise period is extended by the Plan Administrator until a date not later
          than the expiration date of the Option; or (D) the expiration of one year from
          termination of an Optionee’s employment or contractual relationship by
          reason of death or Disability (as defined below) unless the exercise period is
          extended by the Plan Administrator until a date not later that the expiration
          date of the Option. Upon the death of an Optionee, any vested Options held by
          the Optionee will be exercisable only by the person or persons to whom such
          Optionee’s rights under such Option will pass by the Optionee’s will
          or by the laws of descent and distribution of the state or country of the
          Optionee’s domicile at the time of death and only until such Options
          terminate as provided above. For purposes of the Plan, unless otherwise defined
          in the Agreement, “Disability” means medically determinable physical
          or mental impairment which has lasted or can be expected to last for a
          continuous period of not less than twelve (12) months or that can be expected to
          result in death. The Plan Administrator will determine whether an Optionee has
          incurred a Disability on the basis of medical evidence acceptable to the Plan
          Administrator. Upon making a determination of Disability, the Plan Administrator
          will, for purpose of the Plan, determine the date of an Optionee’s
          termination of employment or contractual relationship. 

     (ii)    
          Unless accelerated in accordance with Section 5(f) above, unvested Options will
          terminate immediately upon termination of employment of the Optionee by the
          Company for any reason whatsoever including death or Disability. For purpose of
          this Plan, transfer or employment between or among the Company and/or any
          affiliated company will not be deemed to constitute a termination of employment
          with the Company or affiliated company. For purpose of this subsection,
          employment will be deemed to continue while the Optionee is on military leave,
          sick leave or other bona fide leave of absence (as determined by the Plan
          Administrator). The foregoing notwithstanding, employment will not be deemed to
          continue beyond the first ninety (90) days of such leave, unless the
          Optionee’s re-employment rights are guaranteed by statute or by contract. 

     (h)    
          Exercise of Options 

     (i)    
          Options will be exercisable, in full or in part, at any time after vesting,
          until termination. If less than all of the shares included in the vested portion
          of any Option are purchased, the remainder may be purchased at any subsequent
          time prior to the expiration of the Option term. Only whole shares may be issued
          pursuant to an Option, and to the extent that an Option covers less than one (1)
          share, it is unexercisable. 

     (ii)    
          Options or portions thereof may be exercised by giving written notice to the
          Company, which notice will specify the number of shares to be purchased, and be
          accompanied by payment in the amount of the aggregate exercise price for the
          Common Shares so purchased, which payment must be in the form specified in
          Section 5(i) below. The Company will not be obligated to issue, transfer or
          deliver a certificate of Common Shares to the Optionee of any Option, until
          provision has been made by the Optionee to the satisfaction of the Company, for
          the payment of the aggregate exercise price for all shares for which the Option
          has been exercised and for satisfaction of any tax withholding obligations
          associated with such exercise. During the lifetime of an Optionee, Options are
          exercisable only by the Optionee or transferee who takes title to such Option in
          the manner permitted by subsection 5(k) hereof. 

     (i)    
          Payment upon Exercise of Option Upon the exercise of any Option, the
          aggregate exercise price will be paid to the Company in cash or by certified or
          cashiers check. In addition, if approved by the Plan Administrator the Optionee
          may pay for all or any portion of the aggregate exercise price by complying with
          one or more of the following alternatives: 

3 

     (i)    
          By delivering a properly executed exercise notice together with irrevocable
          instructions to a broker promptly to sell or margin a sufficient portion of the
          shares and deliver directly to the Company the amount of sale or margin loan
          proceeds to pay the exercise price; or 

     (ii)    
          By complying with any other payment mechanism approved by the Plan Administrator
          at the time of exercise. 

     (j)    
          Rights as a Shareholder An Optionee will have no rights as a shareholder
          with respect to any shares covered by an Option until such Optionee becomes a
          record holder of such shares, irrespective of whether such Optionee has given
          notice of exercise. Subject to the provisions in Section 5(m) hereof, no rights
          will accrue to an Optionee and no adjustment will be made on account of
          dividends (ordinary or extraordinary, whether in cash, securities or other
          property) or distributions or other rights declared on, or created in, the
          Common Shares for which the record date is prior to the date the Optionee
          becomes a record holder of the Common Shares covered by the Option, irrespective
          of whether such Optionee has given notice of exercise. 

     (k)    
          Transfer of Option Options granted under this Plan and the rights and
          privileges conferred by this Plan may not be transferred, assigned, pledged or
          hypothecated in any manner (whether by operation of law or otherwise) other than
          by will, by applicable laws of descent and distribution or pursuant to a
          qualified domestic relation order, and will not be subject to execution,
          attachment or similar process; provided however, that any Agreement may provide
          or be amended to provide that an Option to which it relates is transferable
          without payment of consideration to trusts or partnerships or limited liability
          companies established exclusively for the benefit of the Optionee. Upon any
          attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any
          Option or of any right or privilege conferred by this Plan contrary to the
          provisions hereof, or upon the sale, levy or any attachment or similar process
          upon the rights and privileges conferred by this Plan, such Option will
          thereupon terminate and become null and void. 

     (l)    
          Securities Regulation and Tax Withholding 

     (i)    
          Common Shares will not be issued with respect to an Option unless the exercise
          of such Option and the issuance and delivery of such Shares comply with all
          relevant provisions of law, including, without limitation, any applicable
          Canadian, provincial or US state securities laws, the Securities Act of 1933, as
          amended, the Exchange Act, the rules and regulations thereunder and the
          requirements of any stock exchange or automated inter-dealer quotation system of
          a registered national securities association upon which such shares may then be
          listed and such issuance will be further subject to the approval of counsel for
          the Company with respect to such compliance, including the availability of an
          exception from registration for the issuance and sale of such shares. The
          inability of the Company to obtain from any regulatory body the authority deemed
          by the Company to be necessary for the lawful issuance and sale of any shares
          under this Plan, or the unavailability of an exemption from registration for the
          issuance and sale of any shares under this Plan, will relieve the Company of any
          liability with respect to the non-issuance or sale of such shares. 

     (ii)    
          As a condition to the exercise of an Option, the Plan Administrator may require
          the Optionee to represent and warrant in writing at the time of such exercise
          that the shares are being purchased only for investment and without any
          then-present intention to sell or distribute such shares. At the option of the
          Plan Administrator, a stop-transfer order against such shares may be placed on
          the stock books and records of the Company, and a legend indicating that the
          stock may not be pledged, sold or otherwise transferred unless an opinion of
          counsel is provided stating that such transfer is not in violation of any
          applicable law or regulation, may be stamped on the certificates representing
          such shares in order to assure an exemption from registration. The Plan
          Administrator also may require such other documentation as may from time to time
          be necessary to comply with federal, provincial and state securities laws. THE
          COMPANY HAS NO OBLIGATION TO REGISTER THE OPTIONS OR THE SHARES OF STOCK
          ISSUABLE UPON THE EXERCISE OF OPTIONS. 

     (iii)    
          The Optionee must pay to the Company by certified or cashiers check, promptly
          upon exercise of an Option or, if later, the date that the amount of such
          obligations becomes determinable, all applicable Canadian and US federal,
          provincial, state, local and foreign withholding taxes that the Plan
          Administrator, in its discretion, determines to result upon exercise of an 

4 

Option or from a transfer or other
disposition of Common Shares acquired upon exercise of an Option or otherwise related to
an Option or Common Shares acquired in connection with an Option. Upon approval of the
Plan Administrator, an Optionee may satisfy such obligation by complying with one or more
of the following alternatives selected by the Plan Administrator: 

     (A)    
          By executing appropriate loan documents approved by the Plan Administrator by
          which the Optionee borrows funds from the Company to pay any withholding taxes
          due under this paragraph (iii), with such repayment terms as the Plan
          Administrator may select; or 

     (B)    
          By complying with any other payment mechanism approved by the Plan Administrator
          from time to time. 

     (iv)    
          The issuance, transfer or delivery of certificates of Common Shares pursuant to
          the exercise of Options may be delayed, at the discretion of the Plan
          Administrator, until the Plan Administrator is satisfied that the applicable
          requirements of the federal, provincial, and state securities laws and the
          withholding provisions of applicable tax laws have been met and that the
          Optionee has paid or otherwise satisfied any withholding tax obligations as
          described in (iii) above. 

     (m)    
          Stock Dividend or Reorganization 

     (i)    
          If (A) the Company is at any time involved in any merger, reorganization,
          consolidation or amalgamation; (B) the Company declares a dividend payable in,
          or subdivides or combines, its Common Shares or (C) any other event with
          substantially the same effect occurs, the Plan Administrator will, subject to
          applicable law, with respect to each outstanding Option, proportionately adjust
          the number of shares of Common Shares subject to such Option and/or the exercise
          price per share so as to preserve the rights of the Optionee substantially
          proportionate to the rights of the Optionee prior to such event, and to the
          extent that such action includes an increase or decrease in the number of shares
          of Common Shares subject to outstanding Options, the number of shares available
          under Section 4 of this Plan will be increased or decreased, as the case may be,
          proportionately, and all such adjustments determined by the Plan Administrator
          shall be final, binding and conclusive. 

     (ii)    
          If the Company at any time declares an extraordinary dividend with respect to
          the Common Shares, whether payable in cash or other property, the Plan
          Administrator may, subject to applicable law, in the exercise of its sole
          discretion and with respect to each outstanding Option, proportionately adjust
          the number of Common Shares subject to such Option and/or adjust the exercise
          price per share so as to preserve the rights of the Optionee substantially
          proportionate to the rights of the Optionee prior to such event, and to the
          extent that such action includes an increase or decrease in the number of shares
          of Common Shares subject to outstanding Options, the number of shares available
          under Section 4 of this Plan will be increased or decreased, as the case may be,
          proportionately, and all such adjustments determined by the Plan Administrator
          shall be final, binding and conclusive. 

     (iii)    
          The foregoing adjustments on the shares to Options will be made by the Plan
          Administrator, or by any successor administrator of this Plan, or by the
          applicable terms of any assumption or substitution document. 

     (iv)    
          The grant of an Option will not affect in any way the right or power of the
          Company to make adjustments, reclassifications, reorganizations or changes of
          its capital or business structure, to merge, consolidate or dissolve, to
          liquidate or to sell or transfer all or any part of its business or assets. 

	6. 	  	EFFECTIVE
DATE TERM  

Stock Options may be granted by the
Plan Administrator from time to time on or after the date on which this Plan is adopted
(the “Effective Date”) and until this Plan is terminated by the Board in its
sole discretion. Termination of this Plan will not terminate any Option granted prior to
such termination. 

5 

	7. 	  	NO
OBLIGATIONS TO EXERCISE OPTION  

The grant of an Option will impose no
obligation upon the Optionee to exercise such Option. 

	8. 	  	NO
RIGHT TO OPTIONS OR TO EMPLOYMENT  

The Plan Administrator will determine
whether or not any Options are to be granted under this Plan in its sole discretion, and
nothing contained in this Plan will be construed as giving any person any right to
participate under this Plan. The grant of an Option will no way constitute any form of
agreement or understanding binding on the Company, express or implied, that the Company
will employ or contract with an Optionee for any length of time, nor will it interfere
with the Company’s or any affiliated company’s right to terminate
Optionee’s employment at any time, which right is hereby reserved. 

	9. 	  	APPLICATION
OF FUNDS  

The proceeds received by the Company
from the sale of Common Shares issued upon the exercise of Options will be used for
general corporate purposes, unless otherwise directed by the Board. 

	10. 	  	INDEMNIFICATION
OF PLAN ADMINISTRATOR  

In addition to all other rights of
indemnification they may have as members of the Board, members of the Plan Administrator
will be indemnified by the Company for all reasonable expenses and liabilities of any type
or nature, including attorney’s fees, incurred in connection with any action, suit or
proceeding to which they or any of them are a party by reason of, or in connection with,
this Plan or any Option granted under this Plan, and against all amounts paid by them in
settlement thereof (provided that such settlement is approved by independent legal counsel
selected by the Company), except to the extent that such expenses relate to matters for
which it is adjudged that such Plan Administrator member is liable for wilful misconduct;
provided, that within fifteen (15) days after the institution of any such action, suit or
proceeding, the Plan Administrator member involved therein will, in writing, notify the
Company of such action, suit or proceeding, so that the Company may have the opportunity
to make appropriate arrangements to prosecute or defend the same. 

	11. 	  	AMENDMENT
OF PLAN  

The Plan Administrator may, at any
time, modify, amend or terminate this Plan or modify or amend Options granted under this
Plan, including, without limitation, such modifications or amendments as are necessary to
maintain compliance with applicable statutes, rules or regulations; provided however, no
amendment with respect to an outstanding Option which has the effect of reducing the
benefits afforded to the Optionee thereof will be made over the objection of such
Optionee, further provided, that the events triggering acceleration of vesting of
outstanding Options may be modified, expanded or eliminated without the consent of
Optionee. The Plan Administrator may condition the effectiveness of any such amendment on
the receipt of shareholder approval at such time and in such manner as the Plan
Administrator may consider necessary for the Company to comply with or to avail the
Company and/or the Optionees of the benefits of any securities, tax, market listing or
other administrative or regulatory requirements. 

Effective Date:         January 2006
1, 

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}]]