Document:

EX-10.16

Exhibit 10.16

PERSONAL & CONFIDENTIAL

July 3, 2008

David C. Dobson

Dear David:

This letter confirms your resignation from Corel Corporation (“Corel”) effective June 30, 2008 and
sets out the terms on which you have agreed to provide transitional services to Corel.

The terms and conditions set out below are conditional on you signing and returning to Corel this
letter and the release attached as Schedule A (the “Release”) on or before July 7, 2008 after which
time this letter is automatically revoked.

	 	1.	 	Period of Transitional Assistance

	 	a)	 	You have agreed to provide your services to Corel until June 30,
2008, or until such earlier time as Corel may advise you at anytime after the ate
of this letter (the “Transition Period”). During the Transition Period, you will
continue as a Director and Office of Corel. During the Transition Period you will,
to the best of your ability, work with the Special Committee that was formed in
response to the proposal received from Vector Capital (the “Special Committee”).
In addition, during the Transition Period you will, to the best of your ability,
work with the Board of Directors of Corel (the “Board”), Corel’s management team
and the interim Chief Executive Officer of Corel, as requested by the Board and
Interim Chief Executive Officer.
	 
	 	b)	 	During the Transition Period, you have the opportunity to earn a
bonus in the based on the value you provide to the Special Committee during the
Transition Period, to a maximum of $200,000. The amount, if any, payable shall be
at the discretion of the independent Directors of Corel, in consultation with the
Special Committee.
	 
	 	c)	 	Your base salary (of $415,000 Canadian annually) will cease effective
at the end of the Transition Period and your sole entitlements to other
compensation and to benefits shall be:

	 	(i)	 	continued participation in Corel’s
benefit plans for the Transition Period.
	 
	 	(ii)	 	the discretionary bonus referred to
in subparagraph 1(b) above;
	 
	 	(iii)	 	payment of the greater of:

 

 

	 	A.	 	$300,000 Canadian; and
	 
	 	B.	 	your incentive
payment pursuant to Corel’s annual incentive plan to May
31, 2008, based on actual performance to May 31, 2008 (in
accordance with your annual incentive plan target of
$415,000 Canadian with 40% measured against Corporate
Revenue attainment and 60% measured again Corporate
EBITDA attainment),plus the tax gross-ups relating to
your 2007 apartment and travel in the amount of $52,246
Canadian, plus pay in respect of your accrued unused
vacation to the end of the Transition Period.

	 	(d)	 	All of your unvested options granted June 27 and October 1, 2005 will
vest on June 30, 2008 and you may exercise all outstanding options until the
earlier of”

	 	(i)	 	December 31, 2008; and
	 
	 	(ii)	 	their original expiry date.

All of your options granted July 17, 2007 shall be forfeited on June 30,
2008.

	 	2.	 	Company Property
	 
	 	 	 	All company property must be returned to Corel at the end of the Transition Period,
including but not limited to: financial information, customer lists, marketing and
technical materials, cell phones, pagers, blackberries, desk keys, company credit
cards, company calling cards, computers and computer equipment, security badges, CD
ROMS and any other Corel materials you may have.
	 
	 	3.	 	Taxes and Currency
	 
	 	 	 	All amounts payable under this Agreement are subject to applicable taxes and
withholdings and you are solely responsible for the payment of all taxes owing as a
result of the payments and benefits provided to you under this Agreement. All amounts
referred to in this letter are in Canadian currency.
	 
	 	4.	 	Resignation From Other Positions
	 
	 	 	 	All officer positions you hold with Corel and its affiliated entities are terminated at
the end of the Transition Period, or at such earlier time as is requested by Corel and
you agree to resign from all director positions you

 

 

	 	 	 	then hold with Corel and its affiliated entities at the end of the Transition Period,
or at such earlier time as is requested by Corel.
	 
	 	5.	 	Confidentiality, Non-Compete, Fiduciary Duties
	 
	 	 	 	You are reminded that you are required to comply with the Confidentiality,
Non-Competition, Non-Solicitation and Intellectual Property covenants in your agreement
with Corel dated effective June 17, 2005, as amended November 1, 2005. You are also
reminded that you owe fiduciary obligations to Corel, which includes an obligation to
act in good faith and in the best interests of Corel.
	 
	 	6.	 	Speakwell
	 
	 	 	 	You covenant and agree to speak positively of Corel and its employees, directors or
affiliates at all times. Corel covenants and agrees to speak positively of you at all
times. Should either you or Corel have occasion to comment on your departure or time at
Corel, both parties will do so in a manner that reflects the high level of mutual
respect and the amicable nature of this agreement.

You agree to keep this Agreement and its terms confidential and not to discuss it with others.

Sincerely,

/s/ KRIS HAGERMAN

Kris Hagerman

Interim Chief Executive Officer

I have read, understand and agree to the terms set out in the Agreement. I have been advised to
seek independent legal advice in connection with this agreement and have sought or waive such
advice.

	 	 	 	 	 
	 

	 	 	 	 
	Date July 3 2008

	 	/s/ DAVID C. DOBSON	 	 
	 

	 	 	 	 
	 

	 	David C. Dobson	 	 

 

 

SCHEDULE A

FULL AND FINAL RELEASE

I, DAVID C. DOBSON, on my own behalf and that of my heirs, executors and assigns, in consideration
of the terms and conditions set out in my Agreement with Corel Corporation (“ COREL “) dated July
3, 2008 (the “Transition Agreement”), payments made to me pursuant to those terms and conditions
and other good and valuable consideration, the sufficiency of which is hereby acknowledged, do
hereby release and forever discharge Corel, its subsidiaries, parents, predecessors, successors,
related companies, affiliates, divisions and their present and former directors, officers,
representatives, shareholders, owners, employees, administrators, agents and lawyers (collectively,
the ” RELEASEES “) jointly and severally, from any and all actions, causes of action, covenants,
contracts, claims, demands, complaints, proceedings, grievances, damages, costs or loss of any
nature or kind, past, present or future arising out of or in any way relating to or connected with
my hiring, my employment with Corel or the termination of my employment, stock options or other
share based incentive plans and benefit plans.

I do hereby declare and acknowledge that the consideration set out above satisfies all obligations
of the Releasees, arising from or out of my hiring, my employment with Corel or the termination of
my employment, stock options or other share based incentive plans and benefit plans including,
without limitation any obligations under Employment Standards, Human Rights and Workplace Safety
and Insurance legislation, or any similar legislation in any other jurisdiction. I covenant and
undertake that I will not file or advance any claims or complaints under the Employment Standards
legislation including claims in respect of pay in lieu of notice and severance pay, Human Rights
legislation and Work place Safety and Insurance legislation or any similar legislation in any other
jurisdiction, arising out of my hiring, my employment with Corel or the termination of my
employment, stock options or other share based incentive plans and benefit plans.

And for the said consideration, I further agree not to make any claim or take any other proceedings
against any person, entity, corporation, partnership or Crown in which any claim could or does
arise with respect to any matters which may have arisen between the parties to this release up to
the present time, concerning and relating to any action I may have as against any other party as a
result or my hiring, my employment with Corel or termination of my employment, stock options or
other share based incentive plans and benefit plans.

Notwithstanding the foregoing, I do not release my rights and entitlements to enforce my rights
under the Transition Agreement or any right or entitlement I may have to indemnity or to enforce
any indemnity as a director or officer of Corel or its affiliates or to benefits under any policy
of directors and officers insurance.

 

 

And for said consideration I further agree to save harmless and indemnify the Releasees from and
against any and all claims, charges, taxes, penalties or demands made by the Canada Revenue Agency,
its predecessors or successors, or any similar governmental authority in any other jurisdiction,
requiring any of the Releasees to pay any amounts under the Income Tax Act (Canada) and other duly
recognized federal, provincial and local taxing authorities in respect of income tax payable by me
in excess of the income tax previous withheld, and from and against any and all claims, charges,
taxes or penalties and demands made on behalf of or related to Employment Insurance or Canada
Pension Plan under the applicable statutes and regulations, or any other similar legislation in any
other jurisdiction, with respect to any amounts which may, in the future, be found to be payable by
any of the Releasees with respect to the payment of the consideration referred to above.

It is understood and agreed that the giving of the consideration set out above is deemed to be no
admission of liability whatsoever on the part of the Releasees and, in fact, any liability is
expressly denied.

I will not say, publish or do any act or thing that disparages or casts the Releasees in any
unfavorable light, or which could result in injury to their reputation. Except to the extent
required by applicable law, I will make no public statements or announcements regarding my past
employment with Corel or any of the matters set forth herein without first consulting with Corel
and obtaining its prior written approval as to the timing and content of the proposed statements or
announcements. Notwithstanding the foregoing, I understand that I may disclose particulars of my
past employment with Corel and my termination therefrom in a bona fide job search or application
for government employment insurance benefits.

And I hereby declare that I have read and fully understand this release. I have had the opportunity
to seek independent legal advice. I understand that this release contains a full and final release
of any claims, which I have or may have relating to my hiring, my employment with Corel and my
resignation of employment, stock option or other share based incentive plans and benefit plans. I
voluntarily accept the said consideration for the purpose of making full and final compromise,
adjustment and settlement of all claims as set out above.

IN WITNESS WHEREOF, I, DAVID C. DOBSON set my hand and seal hereto
 this 3  day of  July, 2008.

SIGNED, SEALED AND DELIVERED

In the presence of

	 	 	 	 	 
	 

	 	 	 	 
	 

	 	/s/ DAVID C. DOBSON	 	 
	 

	 	 	 	 
	Witness Signature

	 	DAVID C. DOBSON	 	 
	 
	 	 	 	 
	 

Witness NameEX-10.17

Exhibit 10.17

AMENDED 2006 EQUITY INCENTIVE PLAN

 

 

COREL CORPORATION

EQUITY INCENTIVE PLAN

SECTION 1. PURPOSE. The purposes of this Corel Corporation Equity Incentive Plan (the “Plan”) are
to encourage selected employees, officers, directors and consultants of, and other individuals
providing services to, Corel Corporation (together with any successor, the “Company”) and its
Affiliates (as defined below) to acquire a proprietary interest in the growth and performance of
the Company, to generate an increased incentive to contribute to the Company’s future success and
prosperity thus enhancing the value of the Company for the benefit of its shareholders, and to
enhance the ability of the Company and its Affiliates to attract and retain exceptionally qualified
individuals upon whom, in large measure, the sustained progress, growth and profitability of the
Company depend.

SECTION 2. DEFINITIONS. As used in the Plan, the following terms will have the meanings set out
below:

“Affiliate” means, with respect to any entity, any entity that, directly or through one or more
intermediaries, is controlled by such entity, including any entity in which such entity owns a
significant equity interest, as determined by the Committee.

“Award” means any Option, Share Appreciation Right, Restricted Share, Restricted Share Unit,
Performance Share Unit, or Other Share-Based Award granted under the Plan.

“Award Agreement” means any written agreement, contract or other instrument or document evidencing
any Award granted under the Plan.

“Blackout Period” means the period imposed by the Company, during which a Participant may not trade
in the Company’s securities and includes any period during which a Participant has material
non-public information, but does not include any period when a regulator has halted trading in the
Company’s securities.

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

“Cause”, as used in connection with the termination of a Participant’s employment, means (1) with
respect to any Participant employed under a written employment agreement with the Company or an
Affiliate of the Company which agreement includes a definition of “cause,” “cause” as defined in
that agreement or, if that agreement contains no such definition, a material breach by the
Participant of that agreement, or (2) with respect to any other Participant, the failure to perform
adequately in carrying out the Participant’s employment responsibilities, including any directives
from the Board, or the Participant engaging in behavior in the Participant’s personal or business
life as to lead the Committee in its reasonable judgment to determine that it is in the best
interests of the Company to terminate the Participant’s employment.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations
promulgated under it.

“Committee” means the Compensation Committee of the Board, provided, however, to the extent deemed
necessary or appropriate, a committee other than the Compensation Committee may be designated by
the Board to administer the Plan and such other committee may be vested with any of the powers and
responsibilities hereunder and shall be considered the Committee for any and all of such purposes
hereunder. To the extent the Company desires to grant Incentive Stock Options, such committee shall
be composed of not less than two directors of the Company, neither of whom shall be employees of
the Company or its Affiliates and each of whom shall otherwise be “outside directors” for purposes
of Section 162(m) of the Code. To the extent the Company is no longer a “foreign private issuer” as
defined in Exchange Act Rule 3b-4 and wishes to have a “Qualified Plan” as defined in Rule
16b-3(b)(4), such committee shall be composed of not less than two directors of the Company, each
of whom are “non-employee directors” for purposes of Exchange Act Section 16 and Rule 16b-3
thereunder.

 

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“Common Shares” means any or all, as applicable, of the common shares of the Company and any other
securities or property as may become the subject of Awards, or become subject to Awards, pursuant
to an adjustment made under Section 4(b) of the Plan and any other securities of the Company or any
Affiliate or any successor that may be so designated by the Committee.

“Consultant” means any consultant of, or other individual providing services to, the Company or any
Affiliate, provided that, for purposes of Awards made to individuals in Canada, a consultant means
a person that (1) is engaged to provide services to the Company and/or an Affiliate, other than
services provided in relation to a distribution of securities, (2) provides the services under a
written contract with the Company and/or the Affiliate and (3) spends or will spend a significant
amount of time and attention on the affairs and business of the Company and/or the Affiliate.

“Control Person” means, with respect to any entity, a person that controls such entity.

“Employee” means any employee of the Company or of any Affiliate.

“Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

“Fair Market Value” means (1) with respect to any property other than the Common Shares, the fair
market value of that property determined by those methods or procedures as may be established from
time to time by the Committee and (2) with respect to the Common Shares, the closing sale price
reported for such Common Shares on the date of reference on the Principal Market. If there is no
closing sale price reported on any such date, the Fair Market Value will be determined by the
Committee in accordance with the regulations promulgated under Section 2031 of the Code, or by any
other appropriate method selected by the Committee.

“Good Reason”, as used in connection with the termination of a Participant’s employment, means (1)
with respect to any Participant employed under a written employment agreement with the Company or
an Affiliate of the Company, “good reason” or similar term as defined in that written agreement or,
if such agreement contains no such definition, a material breach by the Company of that agreement,
or (2) with respect to any other Participant, a failure by the Company to pay that Participant any
amount otherwise vested and due and a continuation of that failure for 30 business days following
notice to the Company of that failure.

“Incentive Stock Option” means an option granted under Section 6(a) of the Plan that is intended to
meet the requirements of Section 422 of the Code or any successor provision.

“insider” has the same meaning as found in the Securities Act (Ontario), as amended, and also
includes associates and affiliates of the insider; and “issuances to insiders” includes direct and
indirect issuances to insiders.

“Non-Qualified Stock Option” means an option granted under Section 6(a) of the Plan that is not
intended to be an Incentive Stock Option. Any stock option granted by the Committee which is not
designated an Incentive Stock Option will be deemed a Non-Qualified Stock Option.

“Option” means an Incentive Stock Option or a Non-Qualified Stock Option.

“Other Share-Based Award” means any right granted under Section 6(e)(i) of the Plan.

“Participant” means any individual granted an Award under the Plan.

“Performance Share Unit” means any right granted under Section 6(e) of the Plan.

“Person” means any individual, corporation, partnership, association, joint-stock company, trust,
unincorporated organization, or government or political subdivision of a government.

“Principal Market” means the principal stock exchange, quotation system or other market on which
the Common Shares are listed, admitted to trading, posted for trading or quoted upon which has
occurred the greatest trading

 

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volume of the Common Shares for the six months (or, to the extent the Common Shares have not been
listed, admitted to trading, posted for trading or quoted for at least six months, the next longest
period since the Common Shares were initially listed, admitted to trading, posted for trading or
quoted) prior to the date of reference, provided, however, that to the extent deemed necessary or
appropriate, the Principal Market shall be as determined by the Committee in accordance with
applicable law, rules and regulations.

“Released Securities” means securities that were Restricted Shares but with respect to which all
applicable restrictions have expired, lapsed or been waived in accordance with the terms of the
Plan or the applicable Award Agreement.

“Restricted Shares” means any Common Shares granted under Section 6(c) of the Plan, any right
granted under Section 6(c) of the Plan that is denominated in Common Shares or any other Award
under which issued and outstanding Common Shares are held subject to certain restrictions.

“Restricted Share Unit” means a right to receive a Common Share or the Fair Market Value of a
Common Share granted under Section 6(d) of the Plan.

“Securities Act” means the United States Securities Act of 1933, as amended.

“Share Appreciation Right” means any right granted under Section 6(b) of the Plan.

“Significant Event” means, unless otherwise defined in an Award Agreement or a written employment
agreement between the Company and a Participant (which definition shall govern), the occurrence of
any of the following events: (1) a person or group of persons becomes the beneficial owner of
securities of the Company constituting 50% or more of the voting power of all outstanding voting
securities of the Company, (2) a majority of the Company’s Board as of the date of adoption of this
Plan (including any successors approved by the then existing Board) cease to constitute a majority
of the Board; (3) a merger, consolidation, amalgamation or arrangement of the Company (or a similar
transaction) occurs, unless after the event, 50% or more of the voting power of the combined
company is beneficially owned by the same person or group of persons as immediately before the
event; or (4) the Company’s shareholders approve a plan of complete liquidation or winding-up of
the Company, or the sale or disposition of all or substantially all the Company’s assets (other
than a transfer to an Affiliate of the Company); provided that the following shall not constitute a
Significant Event: (i) any person or group of persons becoming the beneficial owner of the
threshold of securities specified in (1) as a result of the acquisition of securities by the
Company or a subsidiary which, by reducing the number of securities outstanding, increases the
proportional number of securities beneficially held by that person or group of persons, (ii) any
acquisition of securities directly from the Company in connection with a bona fide financing or
series of financings by the Company, (iii) any acquisition by an employee benefit plan (or related
trust) sponsored or maintained by the Company or its Affiliates or (iv) beneficial ownership by
Corel Holdings, L.P., its Affiliates and/or its Control Persons or any increased ownership by any
of them.

“U.S. Participant” means any Participant residing in the United States or who is a U.S. citizen.

SECTION 3. ADMINISTRATION.

	 	(a)	 	The Plan will be administered by the Committee subject to the Committee
reporting to the Board as required by the Committee’s mandate.
	 
	 	(b)	 	Subject to the terms of the Plan and applicable law, and in addition to other
express powers and authorizations conferred on the Committee by the Plan, the Committee
will have full power and authority to, subject to the Plan: (1) designate Participants;
(2) determine the type or types of Awards to be granted to an eligible Employee or
other individual under the Plan; (3) determine the number and classification of Common
Shares to be covered by (or with respect to which payments, rights or other matters are
to be calculated in connection with) Awards; (4) determine the terms and conditions of
any Award; (5) determine whether, to what extent, and under what circumstances Awards
may be settled or exercised in cash, Common Shares, other securities, other

 

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	 	 	 	Awards or other property, or canceled, forfeited or suspended, and the method or
methods by which Awards may be settled, exercised, canceled, forfeited or suspended;
(6) determine requirements for the vesting or exercisability of Awards or
performance criteria to be achieved in order for Awards to vest, the acceleration of
vesting or the waiver of forfeiture or other restrictions on awards; (7) determine
whether, to what extent and under what circumstances cash, Common Shares, other
securities, other Awards, other property and other amounts payable with respect to
an Award under the Plan will be deferred either automatically or at the election of
the holder or of the Committee; (8) interpret and administer the Plan and any
instrument or agreement relating to, or Award made under, the Plan; (9) establish,
amend, suspend or waive any rules and regulations and appoint any agents as it will
deem appropriate for the proper administration of the Plan; (10) determine whether
awards will be adjusted for dividend entitlements; (11) amend or adjust the terms
and conditions of outstanding Awards; (12) implement an Award exchange program, (13)
arrange for financing by broker-dealers (including payment by the Company of
commissions) and establish award exercise procedures, (14) establish procedures for
payment of withholding tax obligations with cash or shares and (15) make any other
determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan.
	 
	 	(c)	 	Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect to the Plan
or any Award will be within the sole discretion of the Committee, may be made at any
time and will be final, conclusive and binding upon all Persons, including the Company,
any Affiliate, any Participant, any holder or beneficiary of any Award, any shareholder
and any Employee.
	 
	 	(d)	 	Any reference in this Plan to the date of termination or cessation or a
Participant’s employment shall mean the Participant’s last day of active employment and
shall not include any period of statutory, contractual or reasonable notice or any
period of deemed employment.
	 
	 	(e)	 	Notwithstanding the foregoing, the maximum number of Common Shares underlying
or relating to Awards which may be granted to any one Participant under this Plan in
any calendar year will not exceed 500,000 Common Shares, subject to the adjustments
provided in Section 4(b), and no Awards under this Plan will be granted after December
31, 2015.
	 
	 	(f)	 	Notwithstanding anything to the contrary in this Plan:

	 	(i)	 	the maximum number of securities of the Company issuable to
insiders at any time under (A) this Plan and (B) all of the Company’s other
security based compensation arrangements, shall not exceed ten percent (10%) of
the Company’s total issued and outstanding securities, subject to the
adjustments provided in Section 4(b); and
	 
	 	(ii)	 	the maximum number of securities of the Company issued to
insiders within any one year period under (A) this Plan and (B) all of the
Company’s other security based compensation arrangements, shall not exceed ten
percent (10%) of the Company’s total issued and outstanding common shares,
subject to the adjustments provided in
Section 4(b).

SECTION 4. COMMON SHARES AVAILABLE FOR AWARDS.

	 	(a)	 	Common Shares Available. Subject to adjustment as provided in Section
4(b):

	 	(i)	 	Calculation of Number of Common Shares Available. The number of
Common Shares available for granting Awards under the Plan will be 6,850,000
any or all of which Awards may be or may be based on Common Shares, any other
related security or any combination. In addition, no more than 500,000 Common
Shares may be issued on the exercise of Incentive Stock Options and no more
than 700,000 Common Shares may be issued as Restricted Shares.

 

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	 	(ii)	 	Shares Becoming Again Available. If, after the effective date
of the Plan, any Common Shares covered by an Award granted under the Plan or to
which such an Award relates lapses, expires, terminates or is forfeited; are
settled in cash; or otherwise terminate or are canceled without the delivery of
Common Shares or other consideration, and Common Shares surrendered to the
Company as payment of exercise price, withholding tax or as part of an Award
exchange program will to that extent again be, or will become, available for
granting Awards under the Plan.
	 
	 	(iii)	 	Accounting for Awards. For purposes of this Section 4,

	 	(A)	 	if an Award is denominated in or based upon
Common Shares, the number of Common Shares covered by that Award or to
which that Award relates will be counted on the date of grant of that
Award against the total number of Common Shares available for granting
Awards under the Plan and against the maximum number of Awards
available to any Participant; and
	 
	 	(B)	 	Awards not denominated in Common Shares may be
counted against the total number of Common Shares available for
granting Awards under the Plan and against the maximum number of Awards
available to any participant in that amount and at such time as the
Committee determines under procedures adopted by the Committee
consistent with the purposes of the Plan;

	 	 	 	provided, however, that Awards that operate in tandem with (whether granted
simultaneously with or at a different time from), or that are substituted
for, other Awards may be counted or not counted under procedures adopted by
the Committee in order to avoid double counting.
	 
	 	 	 	Any Common Shares that are delivered by the Company, and any Awards that are
granted by, or become obligations of, the Company, through the assumption by
the Company or an Affiliate of, or in substitution for, outstanding awards
previously granted by an acquired company will, in the case of Awards
granted to Participants who are executive officers or directors of the
Company, be counted against the Common Shares available for granting Awards
under the Plan.
	 
	 	(iv)	 	Sources of Common Shares Deliverable Under Awards. Any Common
Shares delivered pursuant to an Award may consist, in whole or in part, of
authorized and unissued Common Shares or of outstanding Common Shares acquired
on the open market.

	 	(b)	 	Adjustments. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Common Shares, other
securities or other property), recapitalization, stock split, stock dividend, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Common Shares or other securities of the Company, issuance of
warrants or other rights to purchase Common Shares or other securities of the Company,
or other similar corporate transaction or event affects the Common Shares such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be made
available under the Plan, then the Committee will, in any manner as it may deem
equitable, adjust any or all of (1) the number and kind of Common Shares (or other
securities or property) which thereafter may be made the subject of Awards, (2) the
number and kind of Common Shares (or other securities or property) subject to
outstanding Awards, and (3) the grant or exercise price with respect to any Award or,
if deemed appropriate, make provision for a cash payment to the holder of an
outstanding Award; provided, however, that the number of Common Shares subject to any
Award denominated in Common Shares will always be a whole number.
	 
	 	(c)	 	Significant Events. If a Significant Event occurs, and unless otherwise
provided in an Award Agreement or a written employment contract between the Company and
a Participant and except

 

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	 	 	 	as otherwise set out in this paragraph, the Committee, in its sole discretion, may
provide that (1) the successor corporation will assume each Award or replace it with
a substitute Award, (2) the Awards will become exercisable or vested in whole or in
part upon written notice, (3) the Awards will be surrendered for a cash payment, or
(4) any combination of the foregoing will occur. Awards to Participants who are
directors of the Company shall automatically become exercisable and vested in full
on the occurrence of a Significant Event. If a U.S. Participant is entitled to
receive payments that would qualify as excess “parachute payments’“ under Section
280G of the Code, those payments may be reduced so that the participant is not
subject to the excise tax under Section 4999 of the Code if such a reduction would
result in the U.S. Participant receiving a greater after-tax payment.

SECTION 5. ELIGIBILITY. Any Employee, including any officer or employee-director of the Company or
of any Affiliate, and any Consultant of the Company or any Affiliate will be eligible to be
designated a Participant. A non-employee director will be eligible to receive Non-Qualified Stock
Options under the Plan. No more than 500,000 Common Shares may be the subject of the total Awards
granted to any one Participant in any calendar year. In the case of any “specified employee” who is
a U.S. Participant, distributions may not be made prior to the date which is 6 months after the
date of separation from service (or, if earlier, the date of death of the Employee). For purposes
of the preceding sentence, a specified employee is a key employee (as defined in section 416(i) of
the Code without regard to paragraph (5) thereof).

SECTION 6. AWARDS.

	 	(a)	 	Options. The Committee is hereby authorized to grant to eligible
individuals options to purchase Common Shares (each, an “Option”) which will contain
the following terms and conditions and with any additional terms and conditions, in
either case not inconsistent with the provisions of the Plan, as the Committee
determines:

	 	(i)	 	Exercise Price. The purchase price per Common Share purchasable
under an Option will be determined by the Committee; provided, however, that
the exercise price will not be less than one hundred percent (100%) of the Fair
Market Value of a Common Share on the date of grant of that Option, or any
other price as required under
Section 6(a)(iv).
	 
	 	(ii)	 	Time and Method of Exercise. Subject to the terms of Section
6(a)(iii), the Committee will determine the time or times at which an Option
may be exercised in whole or in part, and the method or methods by which, and
the form or forms (including, without limitation, cash, Common Shares,
outstanding Awards, or other property, or any combination thereof, having a
Fair Market Value on the exercise date equal to the relevant exercise price) in
which, payment of the exercise price with respect thereto may be made or deemed
to have been made.
	 
	 	(iii)	 	Exercisability Upon Death, Retirement and Termination of
Employment. Subject to the condition that no Option may be exercised in whole
or in part after the later of: (1) the expiration of the Option period
specified in the applicable Award Agreement; and (2) 10 days immediately
following the end of a Blackout Period where a Unit would expire during or
within 10 days following the expiration of the Blackout Period:

	 	(A)	 	Subject to the terms of paragraph (D) below,
upon the death of a Participant while employed or within three (3)
months of retirement or disability as defined in paragraph (B) below,
the Person or Persons to whom such Participant’s rights with respect to
any Option held by such Participant are transferred by will or the laws
of descent and distribution may, prior to the expiration of the earlier
of: (1) the outside exercise date determined by the Committee at the
time of granting the Option, or (2) twelve (12) months after such
Participant’s death, purchase any or all of the Common Shares with
respect to which such Participant was entitled to exercise such Option
immediately prior to such Participant’s death,

 

- 7 -

	 	 	 	and any Options not so exercisable will lapse on the date of such
Participant’s death;
	 
	 	(B)	 	Subject to the terms of paragraph (D) below,
upon termination of a Participant’s employment with the Company (x) as
a result of retirement pursuant to a retirement plan of the Company or
an Affiliate or disability (as determined by the Committee) of such
Participant, (y) by the Company other than for Cause, or (z) by the
Participant with Good Reason, such Participant may, prior to the
expiration of the earlier of: (1) the outside exercise date determined
by the Committee at the time of granting the Option, or (2) three (3)
months after the date of such termination, purchase any or all of the
Common Shares with respect to which such Participant was entitled to
exercise any Options immediately prior to such termination, and any
Options not so exercisable will lapse on such date of termination;
	 
	 	(C)	 	Subject to the terms of paragraph (D) below,
upon termination of a Participant’s employment with the Company under
any circumstances not described in paragraphs (A) or (B) above, such
Participant’s Options will be immediately canceled to the extent not
theretofore exercised;
	 
	 	(D)	 	Upon (i) the death of the Participant, or (ii)
termination of the Participant’s employment with the Company (x) by the
Company other than for Cause (y) by the Participant with Good Reason or
(z) as a result of retirement or disability as defined in paragraph (B)
above, the Company will have the right to cancel all of the Options
such Participant was entitled to exercise at the time of such death or
termination (subject to the terms of paragraphs (A) or (B) above) for a
payment in cash equal to the excess, if any, of the Fair Market Value
of one Common Share on the date of death or termination over the
exercise price of such Option for one Common Share times the number of
Common Shares subject to the Option and exercisable at the time of such
death or termination.
	 
	 	(E)	 	Upon expiration of the respective periods set
out in each of paragraphs (A) through (B) above, the Options of a
Participant who has died or whose employment has been terminated will
be canceled to the extent not theretofore canceled or exercised.
	 
	 	(F)	 	For purposes of paragraphs (A) through (D)
above, the period of service of an individual as a director or
Consultant of the Company or an Affiliate will be deemed the period of
employment.

	 	(iv)	 	Incentive Stock Options. The following provisions will apply
only to Incentive Stock Options granted under the Plan:

	 	(A)	 	No Incentive Stock Option will be granted to
any eligible Employee who, at the time such Option is granted, owns
securities possessing more than ten percent (10%) of the total combined
voting power of all classes of securities of the Company or of any
Affiliate, except that such an Option may be granted to such an
Employee if, at the time the Option is granted, the exercise price is
at least one hundred ten percent (110%) of the Fair Market Value of the
Common Shares (determined in accordance with Section 2) subject to the
Option, and the Option by its terms is not exercisable after the
expiration of five (5) years from the date the Option is granted; and
	 
	 	(B)	 	To the extent that the aggregate Fair Market
Value of the Common Shares with respect to which Incentive Stock
Options (without regard to this subsection) are exercisable for the
first time by any individual during any calendar year (under

 

- 8 -

	 	 	 	all plans of the Company and its Affiliates) exceeds $100,000, such
Options will be treated as Non-Qualified Stock Options. This
subsection will be applied by taking Options into account in the
order in which they were granted. If some but not all Options granted
on any one day are subject to this subsection, then such Options will
be apportioned between Incentive Stock Option and Non-Qualified Stock
Option treatment in such manner as the Committee will determine.

For purposes of this subsection, the Fair Market Value of any Common Shares will be
determined, in accordance with Section 2, as of the date the Option with respect to such
Common Shares is granted.

	 	(b)	 	Share Appreciation Rights. The Committee is hereby authorized to grant
to eligible Employees “Share Appreciation Rights.” Each Share Appreciation Right will
consist of a right to receive the excess of (1) the Fair Market Value of one Common
Share on the date of exercise or, if the Committee will so determine in the case of any
such right other than one related to any Incentive Stock Option, at any time during a
specified period before or after the date of exercise over (2) the grant price of the
right as specified by the Committee, which will not be less than one hundred percent
(100%) of the Fair Market Value of one Common Share on the date of grant of the Share
Appreciation Right, which amount will be satisfied in cash or in Common Shares with a
Fair Market Value determined as at the applicable date, equal to such amount or in a
combination thereof. Subject to the terms of the Plan and any applicable Award
Agreement, the grant price, term, methods of exercise, methods of settlement and any
other terms and conditions of any Share Appreciation Right granted under the Plan will
be as determined by the Committee. The Committee may impose such conditions or
restrictions on the exercise of any Share Appreciation Right as it may deem
appropriate, provided that Share Appreciation Rights may be payable on a deferred basis
only to the extent provided for in the applicable Award Agreement. Share Appreciation
Rights may be granted in conjunction with a related Option or separately as a
free-standing Share Appreciation Right.
	 
	 	(c)	 	Restricted Shares.

	 	(i)	 	Issuance. The Committee is hereby authorized to grant to
eligible Employees “Restricted Shares” which will consist of the right to
receive, by purchase or otherwise, Common Shares which are subject to such
restrictions as the Committee may impose (including, without limitation, any
limitation on the right to vote such Common Shares or the right to receive any
dividend or other right or property), which restrictions may lapse separately
or in combination at such time or times, in such installments or otherwise, as
the Committee may deem appropriate.
	 
	 	(ii)	 	Registration. Restricted Shares granted under the Plan may be
evidenced in such manner as the Committee may deem appropriate, including,
without limitation, book-entry registration or issuance of a share certificate
or certificates. In the event any share certificate is issued in respect of
Restricted Shares granted under the Plan, that certificate will be registered
in the name of the Participant and will bear an appropriate legend referring to
the terms, conditions and restrictions applicable to those Restricted Shares.
	 
	 	(iii)	 	Forfeiture. Except as otherwise determined by the Committee,
upon termination of a Participant’s employment for any reason during the
applicable restriction period, all of the Participant’s Restricted Shares which
had not become Released Securities by the date of termination of employment
will be forfeited and reacquired by the Company; provided, however, that the
Committee may, when it finds that a waiver would be in the best interests of
the Company, waive in whole or in part any or all remaining restrictions with
respect to the Participant’s Restricted Shares. Unrestricted Common Shares,
evidenced in any manner as the Committee will deem appropriate, will be issued
to the holder of Restricted Shares promptly after those Restricted Shares
become Released Securities.

 

- 9 -

	 	(d)	 	Restricted Share Units. The Committee is hereby authorized to grant to
eligible Employees “Restricted Share Units” each of which will consist of the right to
receive one Common Share or cash equal to the Fair Market Value of one Common Share,
subject to the terms of any applicable Award Agreement and which are subject to such
restrictions as the Committee may impose which restrictions may lapse separately or in
combination at any time or times, in such installments or otherwise, as the Committee
may deem appropriate. The Committee may impose any conditions or restrictions on the
exercise of Restricted Share Units as it may deem appropriate. The Committee may also
grant Restricted Share Units that are designated as “Deferred Share Units”, which may
have all of the rights and restrictions that may be applicable to Restricted Share
Units, except that the Deferred Share Units may not be redeemed for Common Shares or
cash equal to the Fair Market Value of Common Shares until the Participant has ceased
to hold all offices, employment and directorships with the Company and its Affiliates.
	 
	 	(e)	 	Performance Share Units.

	 	(i)	 	The Committee is hereby authorized to grant to eligible
Employees “Performance Share Units.” Each Performance Share Unit will consist
of a right, (i) denominated or payable in cash, Common Shares, other securities
or other property (including, without limitation, Restricted Shares), and (ii)
which will confer on the holder thereof rights valued as determined by the
Committee and payable to, or exercisable by, the holder of the Performance
Share Unit, in whole or in part, upon the achievement of such performance goals
during such performance periods as the Committee will establish.
	 
	 	(ii)	 	The initial value of a Performance Share Unit will be
established by the Committee at the date of grant and, to the extent related to
Common Shares, other securities or other property will initially be equal to
100% of the Fair Market Value of a Common Share, such other security or such
other property on the date of grant.
	 
	 	(iii)	 	Subject to the terms of the Plan and any applicable Award
Agreement, the performance goals to be achieved during any performance period,
the length of any performance period, the amount of any Performance Share Unit
granted, the termination of a Participant’s employment and the amount of any
payment or transfer to be made pursuant to any Performance Share Unit will be
determined by the Committee and by the other terms and conditions of any
Performance Share Unit.
	 
	 	(iv)	 	The Committee will issue performance goals prior to the
commencement of the performance period to which such performance goals pertain.
The performance goals may be based upon the achievement of corporation-wide,
divisional or individual goals, or any other basis determined by the Committee.
The Committee may modify the performance goals as necessary to align them with
the Company’s corporate objectives if there is a subsequent material change in
the Company’s business, operations or capital or corporate structure.

	 	(f)	 	Other Share-Based Awards. The Committee is hereby authorized to grant
to eligible Employees “Other Share-Based Awards.” Each Other Share-Based Award will
consist of a right (1) which is other than an Award or right described in Section 6(a),
(b), (c), (d) or (e) above and (2) which is denominated or payable in, valued in whole
or in part by reference to, or otherwise based on or related to, Common Shares
(including, without limitation, securities convertible into Common Shares) as are
deemed by the Committee to be consistent with the purposes of the Plan; provided,
however, that such right will comply, to the extent deemed desirable by the Committee,
with applicable law. Subject to the terms of the Plan and any applicable Award
Agreement, the Committee will determine the terms and conditions of Other Share-Based
Awards. Common Shares or other securities delivered pursuant to a purchase right
granted under this Section 6(e)(i) will be purchased for such consideration, which may
be paid by such method or methods and in such form or forms, including, without
limitation, cash, Common Shares, other securities, other Awards, other property, or any
combination thereof, as the Committee will determine.

 

- 10 -

	 	(g)	 	General.

	 	(i)	 	No Cash Consideration for Awards. Awards may be granted for no
cash consideration or for such minimal cash consideration as may be required by
applicable law.
	 
	 	(ii)	 	Awards May Be Granted Separately or Together. Awards may, in
the discretion of the Committee, be granted either alone or in addition to, in
tandem with, or in substitution for any other Award, except that in no event
will an Incentive Stock Option be granted together with a Non-Qualified Stock
Option in such a manner that the exercise of one Option affects the right to
exercise the other. Awards granted in addition to or in tandem with other
Awards may be granted either at the same time as or at a different time from
the grant of such other awards.
	 
	 	(iii)	 	Forms of Payment Under Awards. Subject to the terms of the
Plan and of any applicable Award Agreement, payments or transfers to be made by
the Company or an Affiliate upon the grant, exercise or payment of an Award may
be made in such form or forms as the Committee will determine, including,
without limitation, cash, Common Shares, other securities, other Awards, or
other property, or any combination thereof, and may be made in a single payment
or transfer, in installments, or on a deferred basis, in each case in
accordance with rules and procedures established by the Committee. Such rules
and procedures may include, without limitation, provisions for the payment or
crediting of reasonable interest on installment or deferred payments. In
accordance with the above, the Committee may elect (1) to pay a Participant (or
such Participant’s permitted transferee) upon the exercise of an Option in
whole or in part, in lieu of the exercise thereof and the delivery of Common
Shares thereunder, an amount of cash equal to the excess, if any, of the Fair
Market Value of one Common Share on the date of such exercise over the exercise
price of such Option for one Common Share times the number of Common Shares
subject to the Option or portion thereof so exercised or (2) to settle other
share-denominated Awards in cash. The Committee may provide for financing by
broker-dealers (including payment by the Company of commissions) and may
establish procedures (including broker-dealer assisted cashless exercise) for
payment of withholding tax obligations in cash or in Common Shares.
	 
	 	(iv)	 	Limits on Transfer of Awards.

	 	(A)	 	No award (other than Released Securities), and
no right under any such Award, may be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by a Participant
otherwise than by will or by the laws of descent and distribution (or,
in the case of Restricted Shares, to the Company) and any such
purported assignment, alienation, pledge, attachment, sale or other
transfer or encumbrance will be void and unenforceable against the
Company or any Affiliate.
	 
	 	(B)	 	Each award, and each right under any Award,
will be exercisable during the Participant’s lifetime only by the
Participant or, if permissible under applicable law, by the
Participant’s guardian or legal representative.

	 	(v)	 	Terms of Awards. The term of each Award will be for such
period as may be determined by the Committee; provided, however, that in no
event will the term of any Option exceed a period of ten years from the date of
its grant.
	 
	 	(vi)	 	Common Share Certificates. All certificates for Common Shares
delivered under the Plan pursuant to any Award or the exercise thereof will be
subject to any stop transfer orders and other restrictions as the Committee may
deem advisable under the Plan or the rules, regulations, and other requirements
of the Securities and Exchange Commission, any stock exchange upon which such
Common Shares are then listed, and any applicable

 

- 11 -

	 	 	 	federal, state, provincial or territorial securities laws, and the Committee
may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
	 
	 	(vii)	 	Delivery of Common Shares or Other Securities and Payment by
Participant of Consideration. No Common Shares or other securities will be
delivered pursuant to any Award until payment in full of any amount required to
be paid pursuant to the Plan or the applicable Award Agreement is received by
the Company. Such payment may be made by such method or methods and in such
form or forms as the Committee will determine, including, without limitation,
cash, Common Shares, other securities, other Awards or other property, or any
combination thereof; provided that the combined value, as determined by the
Committee, of all cash and cash equivalents and the Fair Market Value of any
such Common Shares or other property so tendered to the Company, as of the date
of such tender, is at least equal to the full amount required to be paid
pursuant to the Plan or the applicable Award Agreement to the Company.

SECTION 7. AMENDMENTS; ADJUSTMENTS AND TERMINATION. Except to the extent prohibited by applicable
law and unless otherwise expressly provided in an Award Agreement or in the Plan:

	 	(a)	 	Amendments to the Plan. Subject to Section 7(g) and the requirements
of applicable law, rules and regulations, the Board may amend, alter, suspend,
discontinue, or terminate the Plan without the consent of any shareholder, Participant,
other holder or beneficiary of an Award, or other Person, provided, however, that,
subject to the Company’s rights to adjust Awards under Section 7(e) and (f), any
amendment, alteration, suspension, discontinuation, or termination that would impair
the rights of any Participant, or any other holder or beneficiary of any Award
previously granted, will not to that extent be effective without the consent of that
Participant, other holder or beneficiary of an Award, as the case may be. The Board or
the Committee may make any amendments to the Plan without seeking shareholder approval
except the following amendments for which shareholder approval will be required:

	 	(i)	 	amendments to the number of Common Shares issuable under the
Plan, including an increase to a fixed maximum number of Common Shares or a
change from a fixed maximum number of Common Shares to a fixed maximum
percentage;
	 
	 	(ii)	 	amendments to the Plan that increase the length of the period
after a Blackout Period during which an Award may be exercised;
	 
	 	(iii)	 	amendments which would reduce the exercise price of an Award
or would result in the exercise price for any Award granted under the Plan
being lower than the Fair Market Value of the Common Shares at the time the
Award is granted, except a reduction in connection with any stock dividend,
stock split, combination or exchange of shares, merger, consolidation, spin off
or other distribution or other change in the capital of the Company affecting
Common Shares;
	 
	 	(iv)	 	any amendment expanding the categories of eligible Participant
which would have the potential of broadening or increasing insider
participation;
	 
	 	(v)	 	any amendment extending the term of an Award held by an insider
beyond its original expiry date except an extension of an Award that would
otherwise expire during a Blackout Period, to 10 days following the end of the
Blackout Period;
	 
	 	(vi)	 	the addition of any other provision which results in
participants receiving Common Shares while no cash consideration is received by
the Company; and
	 
	 	(vii)	 	amendments required to be approved by shareholders under
applicable law.

 

- 12 -

	 	(b)	 	Section 409A of the Code. This Plan will be construed and interpreted
to comply with Section 409A of the Code to the extent required to preserve the intended
tax consequences of this Plan. The Company reserves the right to amend this Plan to the
extent it reasonably determines is necessary in order to preserve the intended tax
consequences of this Plan in light of Section 409A of the Code and any regulations or
guidance under that section. In no event will the Company be responsible if Awards
under this Plan result in penalties to a U.S. Participant under Section 409A of the
Code.
	 
	 	(c)	 	Section 162(m) of the Code. Performance-based awards to U.S.
Participants must be made by an independent committee. Awards to any Participant whom
the independent committee determines to be a “covered employee” under Section 162(m) of
the Code may be subject to restrictions, including the establishment of performance
goals, as necessary for the Award to meet the requirements set out in the Code for
performance-based compensation.
	 
	 	(d)	 	Amendments to Awards. The Committee may waive any conditions or rights
under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any
Award previously granted, prospectively or retroactively; provided, however, that,
subject to the Company’s rights to adjust Awards under Section 7(e) and (f), any
amendment, alteration, suspension, discontinuation, cancellation or termination that
would impair the rights of any Participant or holder or beneficiary of any Award
previously granted, will not to that extent be effective without the consent of the
Participant or holder or beneficiary of an Award, as the case may be.
	 
	 	(e)	 	Adjustment of Awards Upon Certain Acquisitions. In the event the
Company or any Affiliate assumes outstanding employee awards or the right or obligation
to make future awards in connection with the acquisition of another business or another
corporation or business entity, the Committee may make any adjustments, not
inconsistent with the terms of the Plan, in the terms of Awards as it deems appropriate
in order to achieve reasonable comparability or other equitable relationship between
the assumed awards and the Awards granted under the Plan as so adjusted.
	 
	 	(f)	 	Adjustments of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee is hereby authorized to make adjustments in the
terms and conditions of, and the criteria included in, Awards in recognition of unusual
or non-recurring events (including, without limitation, the events described in Section
4(b) or Section 4(c)) affecting the Company, any Affiliate, or the financial statements
of the Company or any Affiliate, or of changes in applicable laws, regulations, or
accounting principles, whenever the Committee determines that those adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan.
	 
	 	(g)	 	Termination. The Plan will automatically terminate on January 1, 2016
unless we elect to terminate it sooner.

SECTION 8. GENERAL PROVISIONS.

	 	(a)	 	No Right to Awards. No Employee or other Person will have any claim to
be granted any Award under the Plan, and there is no obligation for uniformity of
treatment of Employees, or holders or beneficiaries of Awards under the Plan. The terms
and conditions of Awards need not be the same with respect to each recipient.
	 
	 	(b)	 	Delegation. Subject to the terms of the Plan and applicable law, the
Committee may delegate to one or more officers or managers of the Company or any
Affiliate, or to a committee of such officers or managers, the authority, subject to
such terms and limitations as the Committee will determine, to grant Awards to, or to
cancel, modify, waive rights with respect to, alter, discontinue, suspend, or terminate
Awards.

 

- 13 -

	 	(c)	 	Correction of Defects, Omissions, and Inconsistencies. The Committee
may correct any defect, supply any omission, or reconcile any inconsistency in the Plan
or any Award in the manner and to the extent it will deem desirable to carry the Plan
into effect.
	 
	 	(d)	 	Withholding. The Company or any Affiliate will be authorized to
withhold from any Award granted, from any payment due or transfer made under any Award
or under the Plan or from any compensation or other amount owing to a Participant the
amount (in cash, Common Shares, other securities, other Awards, or other property) of
withholding, taxes or other amounts payable by the Company, any Affiliate or the
Participant and which are due or payable in respect of an Award, its exercise, or any
payment or transfer under such Award or under the Plan and to take any other action as
may be necessary in the opinion of the Company or Affiliate to satisfy all obligations
for the payment of those taxes. Neither the Corporation nor any Participating Company
shall be held responsible for any tax or other liabilities or consequences which result
from the Participant’s participation in this Plan, including any employment related
taxes or benefit costs, whether or not such costs are the primary responsibility of the
Corporation or any Participating Company.
	 
	 	(e)	 	No Limit on Other Compensation Arrangements. Nothing contained in the
Plan will prevent the Company or any Affiliate from adopting or continuing in effect
other or additional compensation arrangements, and those arrangements may be either
generally applicable or applicable only in specific cases.
	 
	 	(f)	 	No Right to Employment. The grant of an Award will not be construed as
giving a Participant the right to be retained in the employ, as an officer or director
or as a Consultant of the Company or any Affiliate. Further, the Company or an
Affiliate may at any time dismiss a Participant from employment, as an office or
director or as a Consultant, , free from any liability, or any claim under the Plan,
unless otherwise expressly provided in the Plan or in any Award Agreement.
	 
	 	(g)	 	Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan will be determined in accordance with
the laws of the Province of Ontario and the federal laws of Canada applicable in
Ontario.
	 
	 	(h)	 	Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any
Person or Award under any law deemed applicable by the Committee, that provision will
be construed or deemed amended to conform to applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, that provision will be stricken as to
that jurisdiction, Person or Award and the remainder of the Plan and any such Award
will remain in full force and effect.
	 
	 	(i)	 	No Trust or Fund Created. Neither the Plan nor any Award will create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from the
Company or any Affiliate pursuant to an Award, that right will be no greater than the
right of any unsecured general creditor of the Company or any Affiliate.
	 
	 	(j)	 	No Fractional Common Shares. No fractional Common Shares will be
issued or delivered pursuant to the Plan or any Award, and the Committee will determine
whether cash, other securities, or other property will be paid or transferred in lieu
of any fractional Common Shares or whether those fractional Common Shares or any rights
thereto will be canceled, terminated, or otherwise eliminated.
	 
	 	(k)	 	Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Those headings will not be deemed
in any way material or relevant to the construction or interpretation of the Plan or
any provision of the Plan.

 

- 14 -

SECTION 9. ADOPTION, APPROVAL, EFFECTIVE DATE AND TERMINATION DATE OF THE PLAN. The Plan will be
adopted by the Board of Directors and the shareholders of the Company prior to the completion of
the Company’s initial public offering (the “IPO”) and will become effective immediately prior to
the closing of the IPO.

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