Document:

Unassociated Document

    AMENDMENT
NUMBER 2

    to

    EMPLOYMENT
AGREEMENT

    

    

    This
AMENDMENT NUMBER 2
(“Amendment”) dated January 21, 2008 amends the Employment Agreement
(“Agreement”) between BioForce Nanosciences Holdings, Inc. (the “Company”) and
Kerry Frey (the “Employee”).

    

    In
consideration of the mutual agreements set forth below and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:

    

    1.           All
terms of the Agreement shall continue in full force and effect except as
expressly modified in this Amendment.  All terms of the Agreement
shall apply to this Amendment, except in the event and to the extent they are
expressly modified herein, in which case the terms of this Amendment shall
control.  All capitalized terms used in the Amendment not otherwise
defined shall have the same meaning as in the Agreement.

    

    2.           Section
3(a) of the Agreement is amended by deleting the provision in its entirety and
replacing it with the following:  “During the Term of this Agreement,
the Employee shall serve as the President and Chief Executive Officer of the
Company, or in such other executive capacity as may be assigned to the Employee,
and shall perform all duties commensurate with the Employee's position and as
may be assigned to the Employee by the Board of Directors of the Company (the
“Board”) or such member or committee of the Board or other person(s) as may be
designated by the Board.  The Employee shall report to the Board or
such member or committee of the Board or other person(s) as may be designated by
the Board and shall at all times keep such person or entity promptly and fully
informed (in writing if so requested) of the Employee's conduct and of the
business or affairs of the Company, and provide such explanations of the
Employee's conduct as may be required.”

    

    3.           This
Amendment shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, heirs and assigns.

    

    4.           Each
party represents and warrants that the person signing this Amendment has the
full and proper authority to do so and has been empowered to make and execute
this Amendment.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    IN WITNESS WHEREOF, the
parties caused this Amendment to be executed on the day and year first written
above.

    

    
       

      
        	      
                BioForce
      Nanosciences Holdings, Inc. 

              	 	      
                      
                  Kerry
      Frey

                

              
	 	 	 	 	 	 
	 	 	 	 	 	 
	By: 	/s/ Gregory D.
      Brown	 	By: 	/s/ Kerry
      Frey 	 
	 	Gregory D.
      Brown 	 	 	 	 
	 	Executive Vice
      President &
      Chief Financial OfficerZi Corporation: Exhibit 4.14 - Prepared by TNT Filings Inc.

  

ZI CORPORATION 

STOCK INCENTIVE PLAN 

1. 

Purpose 

The purpose of the Zi Corporation Stock Incentive Plan - 2007
is to advance the interests of the Corporation and its subsidiaries and
Affiliates by encouraging the directors, officers, employees and service
providers of the Corporation and its subsidiaries and Affiliates to acquire
shares in the Corporation, thereby increasing their proprietary interest in the
Corporation, encouraging them to remain associated with the Corporation or its
subsidiaries or Affiliates and furnishing them with additional incentive in
their efforts on behalf of the Corporation and its subsidiaries or Affiliates in
the conduct of their affairs. 

2. 

Definitions 

When used in this Plan, unless there is something in the subject matter or
context inconsistent therewith, the following words and terms shall have the
respective meanings ascribed to them as follows: 

(a) 

"ASA"
means the Securities Act (Alberta), as amended. 

(b) 

"Affiliate"
means any corporation that directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with
the Corporation. 

(c) 

"Board"
or "Board of Directors" means the board of directors of the
Corporation. 

(d) 

"Code"
means the United States Internal Revenue Code of 1986, as amended. 

(e) 

"Committee"
means a committee of the Board appointed to administer the Plan. Unless
otherwise determined by the Board of Directors, the Committee shall consist of
all members of the Board of Directors of the Corporation who are non-employee
directors as contemplated by Rule 16b-3 under the Exchange Act. 

(f) 

"Common
Shares" means the common shares in the capital of the Corporation and any shares
or securities of the Corporation into which such common shares are changed,
converted, subdivided, consolidated or reclassified. 

(g) 

"Consultant"
means any person (other than a director, officer or employee) or company engaged
to provide ongoing management or consulting services to the Corporation. 

(h) 

"Corporation"
means Zi Corporation and any successor corporation and any reference herein to
action by the Corporation means action by or under the authority of its Board of
Directors or a duly empowered committee appointed by the Board of Directors. 

(i) 

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

2

(j) 

"Exercise Price" means the
price required to be paid to acquire Common Shares on the exercise of
Options on a per Common Share basis. 

(k) 

"Insider" means the same as
provided for in the ASA and includes associates and Affiliates of the insider.

(l) 

"Market
Value" means at any date when the market value of Common Shares is to be
determined, the higher of: (i) the five day volume weighted average trading
price of the Common Shares where such five day period ends on the Trading Day
immediately prior to such date and (ii) the closing price of the Common Shares
or the Trading Day immediately prior to the date when the Market Value of Common
Shares is to be determined. 

(m) 

"Option"
means an option granted by the Corporation to a Participant entitling such
Participant to acquire a designated number of Common Shares from treasury at a
price to be determined by the Board of Directors, but subject to the provisions
hereof. Options under the Plan are not intended to be incentive stock options as
described under Section 422 of the Code. 

(n) 

"Option
Period" means such period as may be determined by the Board of Directors during
which a Participant may exercise an Option, commencing on the date such Option
is granted to such Participant and ending as specified in this Plan or in the
Participant Agreement. 

(o) 

"Participant"
means a person who is an officer, employee, director or Consultant of the
Corporation or its subsidiaries or Affiliates who is granted an Option,
Restricted Stock Award or Restricted Stock Unit Award pursuant to this Plan. 

(p) 

"Participant
Agreement" means the written agreement that will be entered into between the
Corporation and each Participant to whom an Option, Restricted Stock Award or
Restricted Stock Unit Award is granted hereunder. 

(q) 

"Performance
Goal" means one or more performance measures or goals set by the Committee in
its discretion for each grant of a performance-based Option, Restricted Stock
Award or Restricted Stock Unit Award. The extent to which such performance
measures or goals are met will determine the vesting of the performance-based
Option, Restricted Stock Award or Restricted Stock Unit Award. 

(r) 

"Period of Restriction" means
the period during which Common Shares subject to a Restricted Stock Award are
restricted and subject to forfeiture. 

(s) 

"Plan" shall mean this Zi
Corporation Stock Incentive Plan – 2007 as embodied herein, and as amended from
time to time. 

(t) 

"Restricted Stock Award"
means an award of stock from treasury granted to a Participant as described in
Section 6 hereof. 

(u) 

"Restricted
Stock Unit" means a notional unit evidencing the right of a Participant to
receive, at the time of vesting and without payment to the Corporation, one
Common Share issued from treasury. 

3

(v) 

"Restricted Stock Unit Award"
means an award of Restricted Stock Units granted to a Participant as described
in Section 6 hereof. 

(w) 

"Trading Day"
means a day on which at least a board lot of Common Shares shall have been sold
through the facilities of the Toronto Stock Exchange, or NASDAQ or other
relevant stock exchange. 

3. 

Administration 

The Plan shall be administered by the Committee pursuant to rules of
procedure fixed by the Board of Directors. 

The Committee shall have full and final discretion to
interpret the provisions of the Plan and prescribe, amend, rescind and waive
rules and regulations to govern the administration and operation of the Plan,
and all decisions and interpretations made by the Committee shall be binding and
conclusive upon the Participants and the Corporation subject to shareholder
approval if required by any relevant stock exchange. 

This Plan shall replace and supercede all previous employee
stock option plans or other share compensation arrangements of the Corporation
and any grants made under such previous plans or arrangements shall be deemed to
have been made under this Plan, except that the terms of any such previous
grants shall continue pursuant to their existing terms to the extent
inconsistent with the terms of this Plan. 

The Corporation shall bear all expenses of administering this Plan. 

4. 

Shares Subject
to Plan 

Subject to adjustment as provided in Section 18 hereof, the
shares to be offered under the Plan shall consist of shares of the Corporation’s
authorized but unissued Common Shares. If any Options, Restricted Stock Awards
or Restricted Stock Unit Awards granted hereunder expire or terminate for any
reason without having been exercised or vested in full, the unissued shares
subject thereto shall again be available for the purpose of this Plan. If any
Options are exercised, the number of Common Shares issued shall go back into the
number of unissued shares available for purposes of the Plan but this shall not
apply to vested or exercised Restricted Stock Awards or Restricted Stock Unit
Awards. The aggregate number of shares to be delivered upon the exercise or
vesting of all Options, Restricted Stock Awards and Restricted Stock Unit Awards
granted under the Plan shall not exceed the maximum number of shares permitted
under the rules of any stock exchange on which the Common Shares are then listed
or other regulatory body having jurisdiction. 

(a) 

Maximum
Number: Subject to adjustment as provided in Section 18 hereof, the
aggregate number of Common Shares which may be reserved for issuance in respect
of all Options, Restricted Stock Awards and Restricted Stock Unit Awards under
this Plan together with options, restricted stock awards or restricted stock
unit awards under any other employee stock option plans or other share
compensation arrangements of the Corporation shall not exceed 15% of the
Corporation’s total issued and outstanding Common Shares. 

(b) 

Insiders: Notwithstanding
anything else herein contained: 

4

(i) 

the number of
Common Shares which may be reserved for issuance under the Plan and under any
other employee stock option plans or other share compensation arrangements of
the Corporation at any one time to Insiders of the Corporation shall not exceed
10% of the Corporation’s total issued and outstanding Common Shares; and 

(ii) 

the number of
Common Shares which may be issued within a one-year period pursuant to the Plan
and under any other employee stock option plans or other share compensation
arrangements of the Corporation to Insiders of the Corporation shall not exceed
10% Corporation’s total issued and outstanding Common Shares. 

(c) 

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

5. 

Maintenance of Sufficient
Capital 

The Corporation shall at all times during the term of the Plan reserve and
keep available such numbers of shares as will be sufficient to satisfy the
requirements of the Plan. 

6. 

Participation 

Any officer, employee, director or Consultant of the
Corporation or any of its subsidiaries or Affiliates (including an entity that
becomes a subsidiary or Affiliate after the adoption of the Plan) is eligible to
participate in the Plan if the Committee, in its sole discretion, determines
that such person should receive an Option, Restricted Stock Award or Restricted
Stock Unit Award. Subject to Section 4 hereof, the Committee shall determine to
whom Options, Restricted Stock Awards and/or Restricted Stock Unit Awards shall
be granted, the terms and provisions of the respective Participant Agreements,
the time or times at which such Options, Restricted Stock Awards and/or
Restricted Stock Unit Awards shall be granted, and the number of Common Shares
to be subject to each grant. No Participant shall be granted an Option,
Restricted Stock Award and/or Restricted Stock Unit Award which exceeds the
maximum number of shares permitted by any stock exchange on which the Common
Shares are then listed or other regulatory body having jurisdiction. An
individual who has been granted an Option, Restricted Stock Award and/or
Restricted Stock Unit Award may, if otherwise eligible, and if permitted by any
stock exchange on which the Common Shares are then listed or other regulatory
body having jurisdiction, be granted additional Options, Restricted Stock Awards
and/or Restricted Stock Unit Awards if the Committee shall so determine.
Notwithstanding anything else herein contained: 

(a) 

Participation in the Plan shall
be entirely voluntary and any decision not to participate shall not affect a
Participant’s relationship or employment with the Corporation. 

(b) 

Notwithstanding
any express or implied term of this Plan to the contrary, the granting of an
Option, Restricted Stock Award or Restricted Stock Unit Award pursuant to the
Plan shall in no way be construed as a guarantee of employment by the
Corporation to the Participant. 

(c) 

Nothing
contained in the Plan, nor in any Option, Restricted Stock Award or Restricted
Stock Unit Award granted under the Plan, shall confer upon any Participant any
right with respect to continuance as a director, officer, employee or Consultant
of the Corporation or any of its subsidiaries or Affiliates. 

5

(d) 

No Participant
shall have any of the rights of a shareholder in respect to Common Shares under
an Option until such Common Shares shall have been paid for in full and issued
by the Corporation pursuant to this Plan. 

(e) 

No Participant
shall have any of the rights of a shareholder in respect to Common Shares
underlying Restricted Stock Units until all applicable vesting conditions have
been achieved or satisfied and such Common Shares have been issued by the
Corporation pursuant to this Plan. 

(f) 

No Participant resident in
Canada shall be entitled to receive a Restricted Stock Award. 

(g) 

With respect to
persons who are subject to taxation under the Code, Options shall be granted
only to persons for whom Common Shares constitutes "service recipient stock"
within the meaning of Code Section 409A and the regulations thereunder. 

(h) 

Notwithstanding
any other provision of the Plan, the Board or the Committee may impose such
conditions on any Option, Restricted Stock Award or Restricted Stock Unit Award,
and amend the Plan in any such respects, as may be required to satisfy the
requirements of Rule 16b-3, as amended (or any successor or similar rule), under
the Exchange Act. 

7. 

Participant Agreements

A Participant Agreement will be entered into between the
Corporation and each Participant to whom an Option, Restricted Stock Award or
Restricted Stock Unit Award is granted hereunder. Each Participant Agreement
will set out the number of Common Shares subject to the Option or Restricted
Stock Award, or the number of Restricted Stock Units subject to the Restricted
Stock Unit Award, as the case may be, the Exercise Price in the case of Options,
and any other terms and conditions, all in accordance with the provisions of
this Plan. The Participant Agreement will be in such form as the Committee may
from time to time approve, and may contain such terms as may be considered
necessary in order that the Option, Restricted Stock Award or Restricted Stock
Unit Award will comply with any provisions respecting options, stock awards, or
stock unit awards in the income tax or other laws in force in any country or
jurisdiction of which the Participant may from time to time be a resident or
citizen or the rules of any regulatory body having jurisdiction over the
Corporation. It is the intent of the Corporation that, with respect to persons
who are subject to taxation under the Code, Options and Restricted Stock Awards
be exempt from Section 409A of the Code. 

8. 

Vesting 

The Committee may, in its sole discretion, determine the time
during which Options, Restricted Stock Awards and Restricted Stock Unit Awards
shall vest and the method of vesting or, with respect to Options, determine that
no vesting restriction shall exist. 

In the case of Participants subject to taxation under the
Code, each Restricted Stock Award shall be evidenced by a Participant Agreement
that shall specify the number of Common Shares subject to the Restricted Stock
Award, the applicable restrictions (whether service-based restrictions, with or
without performance acceleration, and/or performance-based restrictions), the
Period of Restriction, and such other provisions as the Committee shall
determine. The Committee may also impose such other restrictions under
applicable federal, provincial or state securities laws as it may deem
advisable, and may legend the certificates representing Restricted Stock Award
to give appropriate notice of such restrictions. To the extent deemed necessary
by the Committee, the Corporation will maintain custody of any certificates
evidencing Common Shares granted pursuant to a Restricted Stock Award, and the
Participant will deliver to the Corporation a stock power, endorsed in blank,
with respect to each Restricted Stock Award. Subject to any applicable
securities laws restrictions, Common Shares covered by each Restricted Stock
Award made under the Plan shall become non-forfeitable and freely transferable
by the Participant after the last day of the Period of Restriction and, where
applicable, after a determination of the satisfaction or achievement of any and
all applicable Performance Goal(s) by the Committee. Once the Common Shares are
released from the restrictions, any legend as provided for under this paragraph
shall be removed. Restricted Stock Awards can only become non-forfeitable and
fully transferable during the Participant’s lifetime in the hands of the
Participant. 

6

In the case of Participants subject to taxation under the 
Income Tax Act (Canada), each Restricted Stock Unit Award shall be evidenced
by a Participant Agreement that shall specify the number of Restricted Stock
Units subject to the Restricted Stock Unit Award, the applicable vesting
conditions (whether service-based conditions, with or without performance
acceleration, and/or performance-based conditions), and such other provisions as
the Committee shall determine. The Committee may also impose such other
conditions under applicable federal, provincial or state securities laws as it
may deem advisable. The Corporation will maintain a record of all outstanding
Restricted Stock Units granted pursuant to a Restricted Stock Unit Award. Upon
determination by the Committee that all vesting conditions of Restricted Stock
Units held by a Participant (including any applicable Performance Goal(s)) have
been satisfied or achieved, the Participant may elect to have the Corporation
issue to the Participant from treasury one Common Share for each Restricted
Stock Unit that has vested. Restricted Stock Unit Awards can only vest during
the Participant’s lifetime in the hands of the Participant. 

Notwithstanding the forgoing, where a Participant is subject
to the taxation under the Code and receives a Restricted Stock Unit Award, upon
determination by the Committee that all vesting conditions of Restricted Stock
Units held by a Participant (including any applicable Performance Goal(s)) have
been satisfied or achieved, the Corporation shall forthwith issue to the
Participant from treasury one Common Share for each Restricted Stock Unit that
has vested. 

9. 

Voting and
Dividend Rights of Restricted Stock Awards 

Unless otherwise provided in the Participant Agreement,
during the period of restriction, Participants holding Restricted Stock Awards
may exercise voting rights with respect to such Common Shares and shall, unless
otherwise provided in the Participant Agreement (which may or may not provide
for the accumulation and payment of dividends until the Common Shares of the
Restricted Stock Award to which the dividends and other distributions relates
vest), be entitled to receive all dividends with respect to such Common Shares.

10. 

Exercise Price of Options 

The Committee shall determine the Exercise Price of the
Options. The Exercise Price shall be not less than the price permitted by any
stock exchange on which the Common Shares are then listed or other regulatory
body having jurisdiction. 

The Exercise Price shall be determined by the Committee at the time the
Option is granted, which shall in no event be lower than the Market Value of the
Common Shares as of the date of grant. 

Payment of the Exercise Price by a Participant resident in Canada may not be
made in Common Shares. 

7

11. 

Duration of Options 

Each Option and all rights thereunder shall be expressed to expire on the
date set out in the Participant Agreements and shall be subject to earlier
termination as provided in Sections 14 and 15. 

(a) 

Subject to a
maximum ten-year period, the Option period shall be a period of time fixed by
the Committee, provided that the Option period shall be reduced with respect to
any Option as provided in Sections 14 and 15 covering cessation as a director,
officer, employee or Consultant of the Corporation or any of its subsidiaries or
Affiliates or death of the Participant. 

(b) 

Except as set
forth in Sections 14 and 15, or as otherwise determined by the Committee in its
sole discretion, no Option may be exercised unless the Participant is at the
time of such exercise a director, officer, employee or Consultant of the
Corporation or any of its subsidiaries or Affiliates. 

(c) 

Notwithstanding
anything else in the Plan, where the Option expires or is deemed to expire
during a period of time imposed by the Corporation upon certain designated
persons during which those persons may not trade in any securities of the
Corporation (a "Black-Out Period") or within ten (10) business days from the
date that any such BlackOut Period ends, the Option shall not be deemed to
expire until the day that is ten (10) business days from the last day of the
Black-Out Period. 

12. 

Duration of Restricted Stock
Awards and Restricted Stock Unit Awards 

In the case of Restricted Stock Awards, the Period of Restriction shall not
in any event exceed ten years. 

In the case of Restricted Stock Unit Awards, the period during which a
Restricted Stock Unit may vest and be exercised shall not in any event exceed
ten years. 

13. 

Exercise of Options and
Restricted Stock Units 

Subject to this Plan and the applicable Participant
Agreement, an Option may be exercised in whole or in part from time to time at
such times and in compliance with such requirements as the Committee shall
determine and set forth in the Participant Agreement. The exercise of any Option
will be contingent upon receipt by the Corporation at its head office of a
written notice of exercise, specifying the number of shares with respect to
which the Option is being exercised and accompanied by cash payment, certified
cheque or bank draft for the full purchase price of such shares. No Participant,
nor legal representatives of a Participant will be, or will be deemed to be, a
holder of any Common Shares subject to an Option under this Plan, unless and
until the certificates for such shares are issued to such persons under the
terms of the Plan. 

Subject to this Plan and the applicable Participant
Agreement, a Restricted Stock Unit may be exercised in whole or in part from
time to time at such times and in compliance with such requirements as the
Committee shall determine and set forth in the Participant Agreement, but in any
event not until such Restricted Stock Units have vested in accordance with
Section 8. The exercise of any Restricted Stock Unit will be contingent upon
receipt by the Corporation at its head office of a written notice of exercise,
specifying the number of shares with respect to which the Restricted Stock Unit
is being exercised. No Participant, nor legal representatives of a Participant
will be, or will be deemed to be, a holder of any Common Shares subject to a
Restricted Stock Unit under this Plan, unless and until the certificates for
such shares are issued to such persons under the terms of the Plan. 

8

14. 

Ceasing to Be a Director,
Officer, Employee or Consultant 

(a) 

If a Participant
who was awarded an Option shall cease to be a director, officer, employee or
Consultant of the Corporation or any of its subsidiaries or Affiliates for any
reason (other than death), the Participant may, but only within the 90 days of
the date the Participant's ceased to be a director, officer, employee or
Consultant and subject to the ten-year maximum period provided in Section 11(a)
hereof, exercise such Participant’s Options to the extent that the Participant
was entitled to exercise them at the date of such cessation. 

(b) 

Except as
otherwise provided in the Participant Agreement, if a Participant who was
awarded a Restricted Stock Award shall cease to be a director, officer, employee
or Consultant of the Corporation or any of its subsidiaries or Affiliates for
any reason (other than death) prior to the expiration of a Period of
Restriction, any unvested Common Shares under such Restricted Stock Award shall
be forfeited and returned to the Corporation. 

(c) 

Except as
otherwise provided in the Participant Agreement, if a Participant who was
awarded a Restricted Stock Unit Award shall cease to be a director, officer,
employee or Consultant of the Corporation or any of its subsidiaries or
Affiliates for any reason (other than death) prior to the satisfaction or
achievement of all applicable vesting conditions, any unvested Restricted Stock
Units under such Restricted Stock Unit Award at the date of such cessation shall
be forfeited. 

(d) 

To the extent
that a Participant’s rights in an Option, Restricted Stock Award or Restricted
Stock Unit Award expire, are forfeited or do not vest upon the completion of a
specified period of employment or continuous service, the Committee may decide
in each case to what extent leaves of absence for government or military
service, illness, temporary disability or other reason shall not be deemed
interruptions of continuous employment or service for purposes of Options,
Restricted Stock Awards and Restricted Stock Unit Awards. 

(e) 

A change in the
status, office, position or duties of a Participant from the status, office,
position or duties held by such Participant on the date of which the Option,
Restricted Stock Award or Restricted Stock Unit Award was granted to such
Participant shall not result in termination of the Option, Restricted Stock
Award or Restricted Stock Unit Award granted to such Participant provided that
such Participant remains a director, officer, employee or Consultant otherwise
eligible to receive Options, Restricted Stock Awards or Restricted Stock Unit
Awards. 

15. 

Death of Participant 

In the event of the death of a Participant, any Option
previously granted to such Participant shall be exercisable only within the
twelve months following such death (subject to the ten-year maximum period
provided in Section 11(a) hereof) and then only: 

(a) 

by the person or persons to whom
the Participant’s rights under the Option shall pass by the Participant’s will
or the laws of descent and distribution; and 

9

(b) 

if and to the extent that the
Participant was entitled to exercise the Option at the date of the Participant’s
death. 

Except as otherwise provided in the Participant Agreement, in
the event a Participant who was awarded a Restricted Stock Award dies prior to
the expiration of a Period of Restriction, any unvested Common Shares under such
Restricted Stock Award at the date of the Participant’s death shall be forfeited
and returned to the Corporation. 

Except as otherwise provided in the Participant Agreement, in
the event a Participant who was awarded a Restricted Stock Unit Award dies prior
to the satisfaction or achievement of all applicable vesting conditions, any
unvested Restricted Stock Units under such Restricted Stock Unit Award at the
date of the Participant’s death shall be forfeited. 

16. 

Tax Withholding.

The Corporation shall have the power and the right to deduct
or withhold, or require a Participant to remit to the Corporation, an amount
sufficient to satisfy federal, provincial, state and local taxes (including the
Participant’s Federal Insurance Contributions Act (United States) obligation, if
any) required by law to be withheld with respect to any grant, exercise, or
payment made under or as a result of the Plan or any Option, Restricted Stock
Award or Restricted Stock Unit Award thereunder. 

With respect to withholding required upon the exercise of an
Option, the lapse of restrictions on Restricted Stock Awards, the satisfaction
or achievement of all applicable vesting conditions pertaining to a Restricted
Stock Unit, or the occurrence of any other taxable event with respect to any
award, Participants may elect, subject to the approval of the Committee, or the
Committee may require Participants to satisfy the withholding requirement, in
whole or in part, by having the Corporation withhold Common Shares having a
Market Value equal to the amount required to be withheld. The value of the
Common Shares to be withheld shall be based on the Market Value of the Common
Shares on the date that the amount of tax to be withheld is to be determined.
All elections by Participants shall be irrevocable and be made in writing and in
such manner as determined by the Committee in advance of the day that the
transaction becomes taxable. 

Notwithstanding any other provision of this Plan, withholding
required upon the exercise of an Option by a Participant resident in Canada
shall not be satisfied by the Corporation withholding Common Shares otherwise
required to be delivered to the Participant by the Corporation upon the exercise
of the Option or by the Participant delivering Common Shares to the Corporation.

17. 

Adjustments 

Other than dividends declared in the normal course and
subject to any required approvals of applicable regulatory authorities and stock
exchanges, in the event of any change in the Common Shares by reason of any
stock dividend, recapitalization, merger, consolidation, split-up, combination
or exchange of shares, or rights offering to purchase Common Shares at a price
substantially below fair market value, or of any similar change affecting the
Common Shares, the number and kind of shares which thereafter may be optioned
and awarded under the Plan and the number and kind of shares subject to the
Option, Restricted Stock Award or Restricted Stock Unit Award in outstanding
Participant Agreements and the purchase price per share thereof shall be
appropriately adjusted consistent with such change in such manner as the Board
may deem equitable to prevent substantial dilution or enlargement of the rights
granted to, or available for, Participants in the Plan. 

10

The foregoing adjustment and the manner of application of the
foregoing provisions shall be determined by the Board in its sole discretion and
only to the extent permitted under Section 409A of the Code and the regulations
thereunder. No adjustment to the Common Shares to be delivered upon the exercise
of an Option, or the vesting of a Restricted Stock Award or Restricted Stock
Unit may result in fractional shares. If that were to be the case, the number of
shares would be rounded down to the nearest whole Common Share and any
adjustments to the exercise price of an Option will be rounded up to the nearest
one cent. 

18. 

Transferability 

All benefits, rights, Options, Restricted Stock Awards and
Restricted Stock Unit Awards accruing to any Participant in accordance with the
terms and conditions of the Plan shall not be transferable or assignable unless
specifically provided as follows. 

Options, Restricted Stock Awards, or Restricted Stock Unit
Awards granted under the Plan shall be transferable or assignable only to a
"permitted assign" and shall be exercisable only by the Participant or his or
her permitted assign, and only in accordance with applicable securities laws.
Any tax consequences will be the responsibility of the Participant and/or their
"permitted assign" and not of the Corporation. For the purposes hereof
"permitted assign" means for such Participant subject to taxation in Canada: 

(a) 

a trustee, custodian or
administrator acting on behalf, or for the benefit, of the Participant; 

(b) 

a holding entity of the
Participant; 

(c) 

a registered retirement savings
plan ("RRSP") or registered retirement income fund ("RRIF") of the Participant,
as such terms are defined in the Income Tax Act (Canada); 

(d) 

a spouse of the Participant; 

(e) 

a trustee, custodian or
administrator acting on behalf, or for the benefit, of the spouse of the
Participant; 

(f) 

a holding entity of the spouse
of the Participant; or 

(g) 

an RRSP or RRIF of the spouse of
the Participant. 

Comparable "permitted assigns" may be permitted for
participants subject to taxation under the Code but only with the consent of the
Corporation and upon completion of any necessary filings required under
applicable securities laws. 

19. 

Takeover or Change in Control

The Board of Directors shall have the power, in the event of: 

(a) 

any disposition
of substantially all of the assets of the Corporation, or the dissolution,
merger, amalgamation or consolidation of the Corporation, with or into any other
corporation, or the merger, amalgamation or consolidation of any other
corporation into the Corporation, 

(b) 

any change in control of the
Corporation, or 

11

(c) 

an offer is made generally to
the holders of the Corporation’s voting securities to purchase those securities
and which is a "takeover bid" as defined in the ASA; 

to amend outstanding Participant Agreements to permit the
exercise of any or all of the remaining Options, or the vesting of Restricted
Stock Awards or Restricted Stock Unit Awards, prior to the completion of any
such transaction. If the Board of Directors shall exercise such power, the
Options shall be deemed to have been amended to permit the exercise thereof in
whole or in part by the Participant, and the Restricted Stock Awards or
Restricted Stock Unit Awards shall be deemed to have been amended to permit the
vesting thereof in whole or in part, at any time or from time to time as
determined by the Board of Directors prior to the completion of such
transaction. For the purposes of the foregoing, a change in control of the
Corporation shall occur if there becomes a Control Person (as defined in the ASA)
with respect to the securities of the Corporation, who is not a Control Person
as at the effective date of this Plan. 

In the event of any transaction that could result in a change
in control of the Corporation or constitute a "takeover bid" as defined in the
ASA, the Committee in its discretion may (i) declare that outstanding Options,
whether or not then exercisable, shall terminate as of the date of the change in
control without any payment to holder thereof, provided the Committee gives its
prior written notice to the Participant of such termination and the right to
exercise such outstanding Options for at least ten (10) days before the change
in control to the extent then exercisable (or to the extent exercisable as of
the change in control), (ii) terminate on or before such change in control all
outstanding Options, whether or not then exercisable, in consideration of
payment to holder of the Option, with respect to each Common Share for which the
Option is then exercisable (or for which the Option will be exercisable as of
the change in control) of the excess, if any, of the Market Value on such date
of a Common Share over the Exercise Price, (provided that Options that are not
then exercisable and that are not to become exercisable upon the change in
control, and Options with respect to which the Market Value of the Common shares
exceeds the option price shall be cancelled without any payment therefor), (iii)
terminate on or before the change in control outstanding Restricted Stock Awards
that are not then non-forfeitable and freely transferable (and will not become
non-forfeitable and freely transferable on the change in control) without any
payment to the holder thereof, (iv) terminate on or before the change in control
outstanding Restricted Stock Awards that are not then non-forfeitable and freely
transferable (or that would not become non-forfeitable or freely transferable on
the change in control) in exchange for payment equal to the Market Value of the
Common Shares subject to the Restricted Stock Award (v) terminate on or before
the change in control outstanding Restricted Stock Unit Awards of which all
applicable vesting conditions have not been satisfied or achieved (and will not
be satisfied or achieved on the change in control) without any payment to the
holder thereof, (vi) terminate on or before the change in control outstanding
Restricted Stock Unit Awards in respect of which all applicable vesting
conditions have not been satisfied or achieved (or that would not be satisfied
or achieved on the change in control) in exchange for payment equal to the
Market Value of the Common Shares underlying the Restricted Stock Unit Award, or
(vii) take such other actions as the Committee determines to be reasonable to
permit the Participant to realize the value of the Option, Restricted Stock
Award or Restricted Stock Unit Award (for purposes hereof, the value of Options
whose Exercise Price exceeds the Market Value of the Common Shares, the value of
a Restricted Stock Award that would not become non-forfeitable and fully
transferable as of the change in control, and the value of a Restricted Stock
Unit Award in respect of which all applicable vesting conditions would not be
satisfied or achieved on the change in control, shall be deemed to be zero). The
same actions need not be taken with respect to outstanding Options, Restricted
Stock Awards or Restricted Stock Unit Awards. 

20. 

Amendment and Termination of
Plan 

The Board may at any time or from time to time, in its sole
and absolute discretion, amend, suspend, terminate or discontinue the Plan and
may amend the terms and conditions of Options, Restricted Stock Awards or
Restricted Stock Unit Awards granted under the Plan, subject to any required
approval of any regulatory authority or stock exchange or the shareholders of
the Corporation. Without limiting the generality of the foregoing, but subject
to any required regulatory approval of any regulatory authority or stock
exchange, the Board may at any time alter, amend or vary the Plan or the terms
and conditions of Options, Restricted Stock Awards or Restricted Stock Unit
Awards granted under the Plan, without the approval of the shareholders of the
Corporation if the alteration, amendment or variance: 

12

(a) 

is for the
purpose of curing any ambiguity, error or omission in the Plan or to correct or
supplement any provision of the Plan that is inconsistent with any other
provision of the Plan; 

(b) 

is necessary to comply with
applicable law or the requirements of any stock exchange on which the Common
Shares of the Corporation are listed; 

(c) 

is an amendment to the Plan
respecting administration and eligibility for participation under the Plan; 

(d) 

changes the
terms and conditions on which Options, Restricted Stock Awards or Restricted
Stock Unit Awards may be granted pursuant to the Plan including the provisions
relating to Exercise Price, vesting provisions and Option Period; 

(e) 

changes the
termination provisions of an Option, Restricted Stock Award or Restricted Stock
Unit Award or the Plan which does not entail an extension beyond the original
expiry date; or 

(f) 

is an amendment to the Plan of a
"housekeeping nature"; 

provided that in the case of any alteration, amendment or variance referred
to in this Section 21, the alteration, amendment or variance does not: 

(g) 

amend the number of Common
Shares issuable under the Plan; 

(h) 

add any form of financial
assistance by the Corporation for the exercise of any Option; 

(i) 

result in a material or
unreasonable dilution in the number of outstanding Common Shares or any material
benefit to an Option holder; 

(j) 

change the class of eligible
participants to the Plan which would have the potential of broadening or
increasing participation by Insiders; 

(k) 

increase the term of an Option,
Restricted Stock Award or Restricted Stock Unit Award held by an Insider; or 

(l) 

decrease the exercise price of
an Option held by an Insider. 

Notwithstanding the foregoing, no such amendment, suspension,
termination or discontinuance may adversely impair the rights of any Participant
with respect to outstanding Options, Restricted Stock Awards or Restricted Stock
Unit Awards without the Participant’s consent. Moreover, no amendment or
termination of an outstanding Option, Restricted Stock Award or Restricted Stock
Unit Award may be made without the Participant’s consent if, as determined by
the Committee in its sole discretion, such amendment or termination would
subject the Participant to any excise tax or penalty under Code Section 409A.
Notwithstanding the foregoing, the Corporation and its subsidiaries and
Affiliates shall not be liable to the Participant if an Option, Restricted Stock
Award or Restricted Stock Unit Award otherwise results in the Participant being
subject to tax under Code Section 409A. 

13

21. 

Necessary
Approvals 

The ability of the Options, Restricted Stock Awards or
Restricted Stock Unit Awards to be exercised or vest, as the case may be, and
the obligation of the Corporation to issue and deliver shares in accordance with
the Plan are subject to any approvals which may be required from the
shareholders of the Corporation and any regulatory authority or stock exchange
having jurisdiction over the securities of the Corporation and compliance with
applicable securities laws. If any shares cannot be issued to any Participant
for whatever reason, the obligation of the Corporation to issue such shares
shall terminate and any Option exercise price paid to the Corporation will be
returned to the Participant. 

No Option is exercisable and no Restricted Stock Award nor
Restricted Stock Unit Award is to be granted nor Common Shares issued except in
compliance with all applicable federal, provincial or state laws (including,
without limitation securities and withholding tax requirements), any listing
agreement to which the Corporation is a party and the rules of all stock
exchanges on which the Corporation’s Common Shares may be listed. 

The Corporation shall be under no obligation to any
Participant to register for offering or resale or to qualify for an exemption
under the U.S. Securities Act of 1933, as amended, or to register or qualify
under state securities laws, any Common Shares, security or interest in a
security paid or issued under, or created by, the Plan, or to continue in effect
any such registrations or qualifications if made. The Corporation may issue
certificates for shares with such legends and subject to such restrictions on
transfer and stop-transfer instructions as counsel for the Corporation deems
necessary or desirable for compliance by the Corporation with United States
federal and state securities laws. 

22. 

Effective Date
of Plan 

Subject to the approval of any stock exchange on which the
shares of the Corporation are to be listed or other regulatory body having
jurisdiction, the Plan as amended will be adopted by the Committee, and if so
approved, the Plan shall become effective on the date on which this Plan is
approved by the shareholders of the Corporation. 

23. 

Governing Law

This Plan and all Options, Restricted Stock Awards and
Restricted Stock Unit Awards granted hereunder shall be governed, construed and
administered in accordance with the laws of the Province of Alberta and the laws
of Canada applicable therein. 

24. 

No Fettering of
Directors’ Discretion 

Nothing contained in this Plan will restrict or limit or be
deemed to restrict or limit the right or power of the Board of Directors in
connection with any allotment and issuance of Common Shares which are not
allotted and issued under this Plan including, without limitation, with respect
to any other compensation arrangements. 

Approved by the shareholders of the Corporation on July 26,
2007.

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