Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Park Place Energy Corp. - Exhibit 10.17

CHANGE OF CONTROL AGREEMENT 

THIS AGREEMENT made effective as of the 1st day of
December, 2007. 

BETWEEN: 

PARK PLACE ENERGY INC. 

(the “Company”) 

AND: 

MERCHANT EQUITIES CAPITAL CORP.

(the “Consultant”) 

WHEREAS: 

(A)                    
The Consultant is presently engaged by the Company under a Consulting Contract;

(B)                    
The Company and the Consultant are desirous of having certain rights and
benefits in the event that the Consultant’s engagement with the Company is
terminated in a manner set forth hereinafter; 

(C)                    
The Company wishes to retain the benefit of the Consultant’s services and to
ensure that the Consultant is able to carry out his responsibilities with the
Company free from any distractions associated with any potential change in the
ownership or control of the Company or its assets; 

NOW THEREFORE in consideration of the premises and the
mutual covenants and agreements hereinafter contained, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by each of the Consultant and the Company, it is agreed by and
between the Consultant and the Company as follows:

PART 1 
DEFINITIONS AND INTERPRETATION 

Definitions 

1.1                     
In this Agreement, the following words and terms with the initial letter or
letters thereof capitalized shall have the meanings set forth below: 

(a)          
“Agreement” means this agreement as amended from time to time; 

- 2 - 

(b)          
“Change in Control” means a transaction or series of transactions whereby
directly or indirectly: 

(i)          
any person or combination of persons acquires a sufficient number of securities
of the Company to affect materially the control of the Company, whether by way
of acquisition of previously issued securities or as a result of issuances from
treasury, or a combination thereof, and for the purposes of this Agreement, a
person or combination of persons holding shares or other securities in excess of
the number which, directly or following the conversion or exercise thereof,
would entitle the holders thereof to cast 20% or more of the votes attached to
all shares of the Company which may be cast to elect directors of the Company,
shall be deemed to be in a position to affect materially the control of the
Company; 

(ii)          
the Company shall consolidate or merge with or into, amalgamate with, or enter
into a statutory arrangement with any other person, or any other person shall
consolidate or merge with or into, or amalgamate with or enter into a statutory
arrangement with the Company, and, in connection therewith, all or part of the
outstanding shares of the Company which have voting rights attached thereto
shall be changed in any way, reclassified or converted into, exchanged or
otherwise acquired for shares or other securities of the Company or any other
person or for cash or any other property (other than a transaction which has
been approved by the directors of the Company, a majority of whom are directors
of the Company holding office at the date of this Agreement); 

(iii)          
there shall be a change in a majority of the board of directors of the Company
whether as a result of a shareholders meeting or as a result of appointments
made by the remaining members of the board of directors of the Company in
filling vacancies caused by the resignation of the majority in number of the
board of directors of the Company; 

(iv)           a
majority of the board of directors shall have resigned or otherwise been removed
from office, whether or not the vacancies created by such resignations or
removals are filled; 

other than a transaction or series of
transactions which involves a sale of securities or assets of the Company with
which the Consultant is involved as a purchaser in any manner, whether
indirectly or indirectly, and whether by way of participation in a corporation
or partnership that is a purchaser or by provision of debt, equity or
purchase-leaseback financing; 

(c)          
“Consulting Contract” means that consulting contract between the Company
and the Consultant dated effective January 1, 2007; 

(d)          
“Expiry Date” means the date which is 12 months after a Change in Control
occurs; 

- 3 - 

(e)          
“Triggering Event” means anyone of the following events which occurs
following a Change of Control without the express agreement in writing of the
Consultant: 

(i)           an
adverse change in any of the duties, powers, rights, discretion or compensation
of the Consultant as they exist immediately prior to the Change of Control; or

(ii)           a
change in the person or body to whom the Consultant reported immediately prior
to the Change of Control provided that this shall not include a change resulting
from a promotion in the normal course of business. 

Plural and Gender 

1.2                      
Whenever used in this Agreement, words importing the singular number only shall
include the plural and vice versa and words importing the masculine gender shall
include the feminine gender. 

Binding Effect 

1.3                     
 This Agreement shall be binding on the successors and assigns of the
Company and shall enure to the benefit of the successors and assigns of the
Consultant. 

Monetary Amounts 

1.4                      
All references to monetary amounts in this Agreement are to lawful money in the
United States of America. 

PART 2 
RIGHTS OF CONSULTANT 

Right Upon Occurrence of Triggering Event 

	2.1 	
      (a) Right: If a Change in Control occurs
      and if, in respect of the Consultant, a Triggering Event occurs on or
      before the Expiry Date, the Consultant shall be entitled to elect to
      terminate his employment with the Company and to receive a payment from
      the Company in an amount equal to the greater of:

(i)          
the remaining base compensation due to the Consultant for the remaining term of
the Consulting Contract; or 

(ii)          
CDN$360,000; 

payable in cash or shares of the
Company at the election of the Consultant and if the Consultant elects to take
shares, such shares shall be valued at the weighted average closing price of the
Company’s shares for the five trading days preceding the election by the
Consultant; 

- 4 - 

(b)          
Condition: The right of the Consultant provided for in §2.1(a)
hereof is conditional upon the Consultant electing to exercise such right by
notice given to the Company within six months after the Triggering Event. 

Termination Right 

2.2                     
 If a Change in Control occurs and the Consultant has not received notice
of the termination of his employment with the Company or a Triggering Event has
not otherwise occurred, then, during the six month period after the Change of
Control, the Consultant may, notwithstanding the absence of a Triggering Event,
give notice to the Company of the intention of the Consultant to terminate his
employment with the Company. If such notice is given by the Consultant, the
termination of his employment will become effective on a date indicated in the
notice, but in any event not later than 120 days following the Consultant giving
notice of its intention to terminate his employment with the Company and in such
case the Consultant shall be entitled to a payment from the Company in the
amount calculated in accordance with §2.1(a) hereof. 

Right Upon Termination 

2.3                     
 The Consultant shall be entitled to a payment from the Company in the
amount calculated in accordance with §2.1(a) hereof if his employment with the
Company is terminated by the Company within 12 months after a Change of Control.

Stock Options 

2.4                     
 In the event that the Consultant is entitled to a payment pursuant to
§2.1, §2.2 or §2.3 hereof, any provisions of any option to purchase common
shares of the Company granted to the Consultant by the Company or any subsidiary
of the Company which restricts the number of common shares of the Company which
may be purchased before a particular date shall be waived. Subject to required
regulatory approvals, in the event that the exercise price of any option granted
at the same time as the option was granted to the Consultant is repriced
downwards, the exercise price of the option held by the Consultant shall be
similarly repriced. The terms of any option agreement evidencing such option
shall be deemed to be amended to reflect the provisions of this §2.4. 

PART 3 
PAYMENTS 

Payments Under This Agreement 

3.1                     
 Subject to any arrangements made pursuant to §4.2 hereof, any payment to
be made by the Company pursuant to the terms of this Agreement shall be paid by
the Company if in cash in a lump sum within five business days of the giving of
notice by the Consultant pursuant to §2.1 or §2.2 hereof or within five business
days of the termination of employment by the Company as referred to in §2.3
hereof, as the case may be and if in shares, then by the issuance of a
certificate representing such shares within such five business day period and in
this regard the Company shall take all such steps as shall be necessary to cause
the shares to be 

- 5 - 

issued and to register such shares pursuant to a Form S-8 if
requested by the Consultant in circumstances where such registration is
available to the Company. 

Agreement Supplemental 

3.2                     
 This Agreement shall be supplemental to the Consulting Contract, except
insofar as the Consulting Contract relates to the termination of the
Consultant’s employment after a Change in Control, in which case this Agreement
shall supersede the termination provisions of the Consulting Contact. 

PART 4 
MISCELLANEOUS 

Assignment and Assumption 

4.1                      
This Agreement shall be assigned by the Company to any successor corporations
and shall be binding upon such successor corporations. For the purposes of this
§4.1, “successor corporation” shall include any person referred to §1.1(b)(ii)
or §(iii) hereof. The Company shall use its best efforts to ensure that the
successor corporation shall continue the provisions of this Agreement as if it
were the original party in place of the Company; provided however that the
Company shall not thereby be relieved of any obligation to the Consultant
pursuant to this Agreement. In the event of a transaction or series of
transactions as described in §1.1(b)(ii) or §(iii) hereof, appropriate
arrangement shall be made by the Company for the successor corporation to honour
this Agreement as if the Consultant had exercised his maximum rights hereunder
as of the effective date of such transaction. 

Further Assurances 

4.2                     
 Each of the Company and the Consultant agrees to make, do and execute or
cause to be made, done and executed all such further and other things, acts,
deeds, documents, assignments and assurances as may be necessary or reasonably
required to carry out the intent and purpose of this Agreement fully and
effectually. Without limiting the generality of the foregoing, the Company shall
take all reasonable steps in order to structure the payment or payments provided
for in this Agreement in the manner most advantageous to the Consultant with
respect to the provisions of applicable taxation legislation. 

Notice 

	4.3 	
      (a)          
      Any notice required or permitted to be given under this Agreement will be
      in writing and may be given by delivering, sending by telegram, sending by
      telecopier, or sending by prepaid registered mail the notice to the
      following address or telecopier number:

- 6 - 

	 	(i) 	
      if to the Company:

	 	 	 
	 		
      Park Place Energy Inc.

	 		
      Suite 1220, 666 Burrard Street 
Vancouver, B.C. V6C
      2X8

	 	 	 
	 		
      Facsimile: (604) 688-5390

	 	 	 
	 	(ii) 	
      if to the Consultant:

	 	 	 
	 		
      c/o Suite 1220, Park Place 
666 Burrard Street
      
Vancouver, B.C. V6C 2X8

	 	 	 
	 		
      Facsimile: (604) 688-5390

(or to such other address or telecopier
number as any party may specify by notice in writing to another party). 

(b)
A          ny notice delivered or
sent by telegram or sent by telecopier on a business day will be deemed
conclusively to have been effectively given on the day the notice was delivered,
or the telegram was filed with the telegraph company, or the telecopy
transmission was sent successfully to the telecopier number set out above, as
the case may be. 

(c)          
Any notice sent by prepaid registered mail will be deemed conclusively to have
been effectively given on the third business day after posting; but if at the
time of posting or between the time of posting and the third business day
thereafter there is a strike, lockout, or other labour disturbance affecting
postal service, then the notice will not be effectively given until actually
delivered. 

Costs 

4.4                      
The Company shall pay all costs and expenses, including legal fees, incurred by
the Consultant in connection with the entering into and the interpretation of
the provisions of this Agreement. 

Governing Law 

4.5                      
This Agreement shall be governed by and be construed in accordance with the laws
of the Province of British Columbia and the laws of Canada applicable therein.

- 7 - 

Severability 

4.6                      
Any provision of this Agreement which contravenes any applicable law or which is
found to be unenforceable shall, to the extent of such contravention or
unenforceability, be deemed severable and shall not cause this Agreement to be
held invalid or unenforceable or affect any other provision or provisions of
this Agreement. 

IN WITNESS WHEREOF this Agreement has been executed by
the parties hereto effective as of this 1st day of December, 2007.

 

PARK PLACE ENERGY INC. 

 

	Per: 	/s/
      David Stadnyk 	 
	  	Authorized Signatory 	 

 

MERCHANT EQUITIES CAPITAL CORP. 

 

	Per: 	/s/
      Eric M. Leslie 	  
	  	ERIC M. LESLIE   PresidentFiled by Automated Filing Services Inc. (604) 609-0244 - Park Place Energy Corp. - Exhibit 10.18

PARK PLACE ENERGY CORP. 
2007 STOCK OPTION PLAN 

               
      This 2007 Stock Option Plan (the “Plan”)
provides for the grant of options to acquire common shares (the “Common
Shares”) in the capital of Park Place Energy Corp., a corporation formed
under the laws of the State of Nevada (the “Corporation”). Stock options
granted under this Plan that qualify under Section 422 of the Internal Revenue
Code of 1986, as amended (the “Code”), are referred to in this Plan as
“Incentive Stock Options.” Incentive Stock Options and stock options that
do not qualify under Section 422 of the Code (“Non-Qualified Stock
Options”) granted under this Plan are referred to collectively as
“Options.” 

1.                      
PURPOSE 

1.1                    
The purpose of this Plan is to retain the services of valued key employees and
consultants of the Corporation and such other persons as the Plan Administrator
shall select in accordance with Section 3 below, and to encourage such persons
to acquire a greater proprietary interest in the Corporation, thereby
strengthening their incentive to achieve the objectives of the shareholders of
the Corporation, and to serve as an aid and inducement in the hiring of new
employees and to provide an equity incentive to consultants and other persons
selected by the Plan Administrator. 

1.2                    
This Plan shall at all times be subject to all legal requirements relating to
the administration of stock option plans, if any, under applicable corporate
laws, applicable United States federal and state securities laws, the Code, the
rules of any applicable stock exchange or stock quotation system, and the rules
of any foreign jurisdiction applicable to Options granted to residents therein
(collectively, the “Applicable Laws”). 

2.                      
ADMINISTRATION 

2.1                    
This Plan shall be administered initially by the Board of Directors of the
Corporation (the “Board”), except that the Board may, in its discretion,
establish a committee composed of two (2) or more members of the Board or two
(2) or more other persons to administer the Plan, which committee (the
“Committee”) may be an executive, compensation or other committee,
including a separate committee especially created for this purpose. The Board
or, if applicable, the Committee is referred to herein as the “Plan
Administrator”. 

2.2                    
If and so long as the Common Stock is registered under Section 12(b) or 12(g) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the
Board shall consider in selecting the Plan Administrator and the membership of
any Committee, with respect to any persons subject or likely to become subject
to Section 16 of the Exchange Act, the provisions regarding (a) “outside
directors” as contemplated by Section 162(m) of the Code, and (b) “Non-Employee
Directors” as contemplated by Rule 16b-3 under the Exchange Act. 

2.3                    
The Committee shall have the powers and authority vested in the Board hereunder
(including the power and authority to interpret any provision of the Plan or of
any Option). The members of any such Committee shall serve at the pleasure of
the Board. A majority of the members of the Committee shall constitute a quorum,
and all actions of the Committee shall be 

- 2 - 

taken by a majority of the members present. Any action may be
taken by a written instrument signed by all of the members of the Committee and
any action so taken shall be fully effective as if it had been taken at a
meeting. 

2.4                    
Subject to the provisions of this Plan and any Applicable Laws, and with a view
to effecting its purpose, the Plan Administrator shall have sole authority, in
its absolute discretion, to: 

	 	(a) 	
      construe and interpret this Plan;

	 	 	 
	 	(b) 	
      define the terms used in the Plan;

	 	 	 
	 	(c) 	
      prescribe, amend and rescind the rules and regulations
      relating to this Plan;

	 	 	 
	 	(d) 	
      correct any defect, supply any omission or reconcile any
      inconsistency in this Plan;

	 	 	 
	 	(e) 	
      grant Options under this Plan;

	 	 	 
	 	(f) 	
      determine the individuals to whom Options shall be
      granted under this Plan and whether the Option is an Incentive Stock
      Option or a Non-Qualified Stock Option;

	 	 	 
	 	(g) 	
      determine the time or times at which Options shall be
      granted under this Plan;

	 	 	 
	 	(h) 	
      determine the number of Common Shares subject to each
      Option, the exercise price of each Option, the duration of each Option and
      the times at which each Option shall become exercisable;

	 	 	 
	 	(i) 	
      determine all other terms and conditions of the Options;
      and

	 	 	 
	 	(j) 	
      make all other determinations and interpretations
      necessary and advisable for the administration of the
  Plan.

2.5                    
All decisions, determinations and interpretations made by the Plan Administrator
shall be binding and conclusive on all participants in the Plan and on their
legal representatives, heirs and beneficiaries. 

3.                      
ELIGIBILITY 

3.1                    
Incentive Stock Options may be granted to any individual who, at the time the
Option is granted, is an employee of the Corporation or any Related Corporation
(as defined below) (“Employees”). 

3.2                    
Non-Qualified Stock Options may be granted to Employees and to such other
persons, including directors and officers of the Corporation or any Related
Corporation, who are not Employees as the Plan Administrator shall select,
subject to any Applicable Laws.

- 3 - 

3.3                    
Options may be granted in substitution for outstanding Options of another
corporation in connection with the merger, consolidation, acquisition of
property or stock or other reorganization between such other corporation and the
Corporation or any subsidiary of the Corporation. Options also may be granted in
exchange for outstanding Options.

3.4                    
Any person to whom an Option is granted under this Plan is referred to as an
“Optionee.” Any person who is the owner of an Option is referred to as a
“Holder.” 

3.5                    
As used in this Plan, the term “Related Corporation” shall mean any
corporation (other than the Corporation) that is a “Parent Corporation” of the
Corporation or “Subsidiary Corporation” of the Corporation, as those terms are
defined in Sections 424(e) and 424(f), respectively, of the Code (or any
successor provisions) and the regulations thereunder (as amended from time to
time). 

4.                      
STOCK 

4.1                    
The Plan Administrator is authorized to grant Options to acquire up to a total
of 4,500,000 Common Shares, including the existing 2,460,000 Common Shares
currently subject to outstanding Options as of the date of this Plan which were
granted prior to implementation of this Plan and, which, by the implementation
of this Plan are grandfathered under this Plan. The number of Common Shares with
respect to which Options may be granted hereunder is subject to adjustment as
set forth in Section 5.1(m) hereof. In the event that any outstanding Option
expires or is terminated for any reason, the Common Shares allocable to the
unexercised portion of such Option may again be subject to an Option granted to
the same Optionee or to a different person eligible under Section 3 of this
Plan; provided however, that any cancelled Options will be counted against the
maximum number of shares with respect to which Options may be granted to any
particular person as set forth in Section 3 hereof. 

5.                      
TERMS AND CONDITIONS OF OPTIONS 

5.1                    
Each Option granted under this Plan shall be evidenced by a written agreement
approved by the Plan Administrator (each, an “Agreement”). Agreements may
contain such provisions, not inconsistent with this Plan or any Applicable Laws,
as the Plan Administrator in its discretion may deem advisable. All Options also
shall comply with the following requirements: 

	 	(a) 	
      Number of Shares and Type of Option

	 	 	 	 
	 		
      Each Agreement shall state the number of Common Shares to
      which it pertains and whether the Option is intended to be an Incentive
      Stock Option or a Non- Qualified Stock Option; provided that:

	 	 	 	 
	 		(i) 	
      the number of Common Shares that may be reserved pursuant
      to the exercise of Options granted to any person shall not exceed 15% of
      the issued and outstanding Common Shares of the
  Corporation;

- 4 - 

	 	(ii) 	
      in the absence of action to the contrary by the Plan
      Administrator in connection with the grant of an Option, all Options shall
      be Non-Qualified Stock Options;

	 	 	 
	 	(iii) 	
      the aggregate fair market value (determined at the Date
      of Grant, as defined below) of the Common Shares with respect to which
      Incentive Stock Options are exercisable for the first time by the Optionee
      during any calendar year (granted under this Plan and all other Incentive
      Stock Option plans of the Corporation, a Related Corporation or a
      predecessor corporation) shall not exceed U.S.$100,000, or such other
      limit as may be prescribed by the Code as it may be amended from time to
      time (the “Annual Limit”); and

	 	 	 
	 	(iv) 	
      any portion of an Option which exceeds the Annual Limit
      shall not be void but rather shall be a Non-Qualified Stock
  Option.

	 	(b) 	
      Date of Grant

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

	 	 	 	 
	 	(c) 	
      Option Price

	 	 	 	 
	 		
      Each Agreement shall state the price per Common Share at
      which it is exercisable. The Plan Administrator shall act in good faith to
      establish the exercise price in accordance with Applicable Laws; provided
      that:

	 	 	 	 
	 		(i) 	
      the per share exercise price for an Incentive Stock
      Option or any Option granted to a “covered employee” as such term is
      defined for purposes of Section 162(m) of the Code shall not be less than
      the fair market value per Common Share at the Date of Grant as determined
      by the Plan Administrator in good faith;

	 	 	 	 
	 		(ii) 	
      with respect to Incentive Stock Options granted to
      greater-than-ten percent (>10%) shareholders of the Corporation (as
      determined with reference to Section 424(d) of the Code), the exercise
      price per share shall not be less than one hundred ten percent (110%) of
      the fair market value per Common Share at the Date of Grant as determined
      by the Plan Administrator in good faith; and

	 	 	 	 
	 		(iii) 	
      Options granted in substitution for outstanding options
      of another corporation in connection with the merger, consolidation,
      acquisition of property or stock or other reorganization involving such
      other corporation and the Corporation or any subsidiary of the Corporation
      may be granted with an exercise price equal to the exercise price for the
      substituted option of the other corporation, subject to any adjustment
      consistent with the terms of the transaction pursuant to which the
      substitution is to occur.

- 5 - 

	 	(d) 	
      Duration of Options

	 	 	 
	 		
      At the time of the grant of the Option, the Plan
      Administrator shall designate, subject to Section 5.1(g) below, the
      expiration date of the Option, which date shall not be later than ten (10)
      years from the Date of Grant; provided, that the expiration date of any
      Incentive Stock Option granted to a greater-than-ten percent (>10%)
      shareholder of the Corporation (as determined with reference to Section
      424(d) of the Code) shall not be later than five (5) years from the Date
      of Grant. In the absence of action to the contrary by the Plan
      Administrator in connection with the grant of a particular Option, and
      except in the case of Incentive Stock Options as described above, all
      Options granted under this Section 5 shall expire ten (10) years from the
      Date of Grant.

	 	 	 
	 	(e) 	
      Vesting Schedule

	 	 	 
	 		
      No Option shall be exercisable until it has vested. The
      vesting schedule for each Option shall be specified by the Plan
      Administrator at the time of grant of the Option prior to the provision of
      services with respect to which such Option is granted; provided, that if
      no vesting schedule is specified at the time of grant, the Option shall
      vest in full immediately.

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

	 	 	 
	 	(f) 	
      Acceleration of Vesting

	 	 	 
	 		
      The vesting of one or more outstanding Options may be
      accelerated by the Plan Administrator at such times and in such amounts as
      it shall determine in its sole discretion.

- 6 - 

	 	(g) 	
      Term of Option

	 	 	 	 	 
	 		(i) 	
      Vested Options shall terminate, to the extent not
      previously exercised, upon the occurrence of the first of the following
      events:

	 	 	 	 	 
	 			A. 	
      the expiration of the Option, as designated by the Plan
      Administrator in accordance with Section 5.1(d) above;

	 	 	 	 	 
	 			B. 	
      the date of an Optionee’s termination of employment or
      contractual relationship with the Corporation or any Related Corporation
      for cause (as determined by the Plan Administrator, acting
    reasonably);

	 	 	 	 	 
	 			C. 	
      the expiration of three (3) months from the date of an
      Optionee’s termination of employment or contractual relationship with the
      Corporation or any Related Corporation for any reason whatsoever other
      than cause, death or Disability (as defined below) unless, in the case of
      a Non-Qualified Stock Option, the exercise period is extended by the Plan
      Administrator until a date not later than the expiration date of the
      Option; or

	 	 	 	 	 
	 			D. 	
      the expiration of one year (1) from termination of an
      Optionee’s employment or contractual relationship by reason of death or
      Disability (as defined below) unless, in the case of a Non-Qualified Stock
      Option, the exercise period is extended by the Plan Administrator until a
      date not later than the expiration date of the Option.

	 	 	 	 	 
	 		(ii) 	
      Notwithstanding Section 5.1(g)(i) above, any vested
      Options which have been granted to the Optionee in the Optionee’s capacity
      as a director of the Corporation or any Related Corporation shall
      terminate upon the occurrence of the first of the following
  events:

	 	 	 	 	 
	 			A. 	
      the event specified in Section 5.1(g)(i)A
above;

	 	 	 	 	 
	 			B. 	
      the event specified in Section 5.1(g)(i)D above;
    and

	 	 	 	 	 
	 			C. 	
      the expiration of three (3) months from the date the
      Optionee ceases to serve as a director of the Corporation or Related
      Corporation, as the case may be.

	 	 	 	 	 
	 		(iii) 	
      Upon the death of an Optionee, any vested Options held by
      the Optionee shall be exercisable only by the person or persons to whom
      such Optionee’s rights under such Option shall pass by the Optionee’s will
      or by the laws of descent and distribution of the Optionee’s domicile at
      the time of death and only until such Options terminate as provided
      above.

- 7 - 

	 	(iv) 	
      For purposes of the Plan, unless otherwise defined in the
      Agreement, “Disability” shall mean medically determinable physical
      or mental impairment which has lasted or can be expected to last for a
      continuous period of not less than twelve (12) months or that can be
      expected to result in death. The Plan Administrator shall determine
      whether an Optionee has incurred a Disability on the basis of medical
      evidence acceptable to the Plan Administrator. Upon making a determination
      of Disability, the Plan Administrator shall, for purposes of the Plan,
      determine the date of an Optionee’s termination of employment or
      contractual relationship.

	 	 	 
	 	(v) 	
      Unless accelerated in accordance with Section 5.1(f)
      above, unvested Options shall terminate immediately upon termination of
      employment of the Optionee by the Corporation for any reason whatsoever,
      including death or Disability.

	 	 	 
	 	(vi) 	
      For purposes of this Plan, transfer of employment between
      or among the Corporation and/or any Related Corporation shall not be
      deemed to constitute a termination of employment with the Corporation or
      any Related Corporation. Employment shall be deemed to continue while the
      Optionee is on military leave, sick leave or other bona fide leave of
      absence (as determined by the Plan Administrator). The foregoing
      notwithstanding, employment shall not be deemed to continue beyond the
      first ninety (90) days of such leave, unless the Optionee’s re-employment
      rights are guaranteed by statute or by
contract.

	 	(h) 	
      Exercise of Options

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

	 	 	 	 
	 		(ii) 	
      Options or portions thereof may be exercised by giving
      written notice to the Corporation, which notice shall specify the number
      of shares to be purchased, and be accompanied by payment in the amount of
      the aggregate exercise price for the Common Shares so purchased, which
      payment shall be in the form specified in Section 5.1(i) below. The
      Corporation shall not be obligated to issue, transfer or deliver a
      certificate representing Common Shares to the Holder of any Option, until
      provision has been made by the Holder, to the satisfaction of the
      Corporation, for the payment of the aggregate exercise price for all
      shares for which the Option shall have been exercised and for satisfaction
      of any tax withholding obligations associated with such exercise. During
      the lifetime of an Optionee, Options are exercisable only by the
      Optionee.

- 8 - 

	 	(i) 	
      Payment upon Exercise of Option

	 	 	 	 
	 		
      Upon the exercise of any Option, the aggregate exercise
      price shall be paid to the Corporation in cash or by certified or
      cashier’s check. In addition, if pre- approved in writing by the Plan
      Administrator who may arbitrarily withhold consent, the Holder may pay for
      all or any portion of the aggregate exercise price by complying with one
      or more of the following alternatives:

	 	 	 	 
	 		(i) 	
      by delivering to the Corporation Common Shares previously
      held by such Holder, or by the Corporation withholding Common Shares
      otherwise deliverable pursuant to exercise of the Option, which Common
      Shares received or withheld shall have a fair market value at the date of
      exercise (as determined by the Plan Administrator) equal to the aggregate
      exercise price to be paid by the Optionee upon such exercise;

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

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

	 	 	 	 
	 	(j) 	
      No Rights as a Shareholder

	 	 	 	 
	 		
      A Holder shall have no rights as a shareholder with
      respect to any shares covered by an Option until such Holder becomes a
      record holder of such shares, irrespective of whether such Holder has
      given notice of exercise. Subject to the provisions of Section 5.1(m)
      hereof, no rights shall accrue to a Holder and no adjustments shall be
      made on account of dividends (ordinary or extraordinary, whether in cash,
      securities or other property) or distributions or other rights declared
      on, or created in, the Common Shares for which the record date is prior to
      the date the Holder becomes a record holder of the Common Shares covered
      by the Option, irrespective of whether such Holder has given notice of
      exercise.

	 	 	 	 
	 	(k) 	
      Non-transferability of Options

	 	 	 	 
	 		
      Options granted under this Plan and the rights and
      privileges conferred by this Plan may not be transferred, assigned,
      pledged or hypothecated in any manner (whether by operation of law or
      otherwise) other than by will, by applicable laws of descent and
      distribution, and shall not be subject to execution, attachment or similar
      process. Upon any attempt to transfer, assign, pledge, hypothecate or
      otherwise dispose of any Option or of any right or privilege conferred by
      this Plan contrary to the provisions hereof, or upon the sale, levy or any
      attachment or similar process upon the rights and privileges conferred by
      this Plan, such Option shall thereupon terminate and become null and
      void.

- 9 - 

	 	(l) 	
      Securities Regulation and Tax Withholding

	 	 	 	 	 
	 		(i) 	
      Shares shall not be issued with respect to an Option
      unless the exercise of such Option and the issuance and delivery of such
      shares shall comply with all Applicable Laws, and such issuance shall be
      further subject to the approval of counsel for the Corporation with
      respect to such compliance, including the availability of an exemption
      from prospectus and registration requirements for the issuance and sale of
      such shares. The inability of the Corporation to obtain from any
      regulatory body the authority deemed by the Corporation to be necessary
      for the lawful issuance and sale of any shares under this Plan, or the
      unavailability of an exemption from prospectus and registration
      requirements for the issuance and sale of any shares under this Plan,
      shall relieve the Corporation of any liability with respect to the
      non-issuance or sale of such shares.

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

	 	 	 	 	 
	 		(iii) 	
      The Holder shall pay to the Corporation by certified or
      cashier’s check, promptly upon exercise of an Option or, if later, the
      date that the amount of such obligations becomes determinable, all
      applicable federal, state, local and foreign withholding taxes that the
      Plan Administrator, in its discretion, determines to result upon exercise
      of an Option or from a transfer or other disposition of Common Shares
      acquired upon exercise of an Option or otherwise related to an Option or
      Common Shares acquired in connection with an Option. Upon approval of the
      Plan Administrator, a Holder may satisfy such obligation by complying with
      one or more of the following alternatives selected by the Plan
      Administrator:

	 	 	 	 	 
	 			A. 	
      by delivering to the Corporation Common Shares previously
      held by such Holder or by the Corporation withholding Common Shares
      otherwise deliverable pursuant to the exercise of the Option, which Common
      Shares received or withheld shall have a fair
market

- 10 - 

	 		
      value at the date of exercise (as determined by the Plan
      Administrator) equal to any withholding tax obligations arising as a
      result of such exercise, transfer or other disposition;

	 	 	 
	 	B. 	
      by executing appropriate loan documents approved by the
      Plan Administrator by which the Holder borrows funds from the Corporation
      to pay any withholding taxes due under this Section 5.1(l)(iii), with such
      repayment terms as the Plan Administrator shall select; or

	 	 	 
	 	C. 	
      by complying with any other payment mechanism approved by
      the Plan Administrator from time to time.

	 	(iv) 	
      The issuance, transfer or delivery of certificates
      representing Common Shares pursuant to the exercise of Options may be
      delayed, at the discretion of the Plan Administrator, until the Plan
      Administrator is satisfied that the applicable requirements of all
      Applicable Laws and the withholding provisions of the Code have been met
      and that the Holder has paid or otherwise satisfied any withholding tax
      obligation as described in Section 5.1(l)(iii)
above.

	 	(m) 	
      Adjustments Upon Changes In Capitalization

	 	 	 	 	 
	 		(i) 	
      The aggregate number and class of shares for which
      Options may be granted under this Plan, the number and class of shares
      covered by each outstanding Option, and the exercise price per share
      thereof (but not the total price), and each such Option, shall all be
      proportionately adjusted for any increase or decrease in the number of
      issued Common Shares of the Corporation resulting from:

	 	 	 	 	 
	 			A. 	
      a subdivision or consolidation of shares or any like
      capital adjustment, or

	 	 	 	 	 
	 			B. 	
      the issuance of any Common Shares, or securities
      exchangeable for or convertible into Common Shares, to the holders of all
      or substantially all of the outstanding Common Shares by way of a stock
      dividend (other than the issue of Common Shares, or securities
      exchangeable for or convertible into Common Shares, to holders of Common
      Shares pursuant to their exercise of options to receive dividends in the
      form of Common Shares, or securities convertible into Common Shares, in
      lieu of dividends paid in the ordinary course on the Common
  Shares).

	 	 	 	 	 
	 		(ii) 	
      Except as provided in Section 5.1(m)(iii) hereof, upon a
      merger (other than a merger of the Corporation in which the holders of
      Common Shares immediately prior to the merger have the same proportionate
      ownership of common shares in the surviving corporation immediately after
      the merger), consolidation, acquisition of property or stock,
      separation,

- 11 - 

	 		
      reorganization (other than a mere re-incorporation or the
      creation of a holding Corporation) or liquidation of the Corporation, as a
      result of which the shareholders of the Corporation, receive cash, shares
      or other property in exchange for or in connection with their Common
      Shares, any Option granted hereunder shall terminate, but the Holder shall
      have the right to exercise such Holder’s Option immediately prior to any
      such merger, consolidation, acquisition of property or shares, separation,
      reorganization or liquidation, and to be treated as a shareholder of
      record for the purposes thereof, to the extent the vesting requirements
      set forth in the Option agreement have been satisfied.

	 	 	 
	 	(iii) 	
      If the shareholders of the Corporation receive shares in
      the capital of another corporation (“Exchange Shares”) in exchange
      for their Common Shares in any transaction involving a merger (other than
      a merger of the Corporation in which the holders of Common Shares
      immediately prior to the merger have the same proportionate ownership of
      Common Shares in the surviving corporation immediately after the merger),
      consolidation, acquisition of property or shares, separation or
      reorganization (other than a mere re-incorporation or the creation of a
      holding Corporation), all Options granted hereunder shall be converted
      into options to purchase Exchange Shares unless the Corporation and the
      corporation issuing the Exchange Shares, in their sole discretion,
      determine that any or all such Options granted hereunder shall not be
      converted into options to purchase Exchange Shares but instead shall
      terminate in accordance with, and subject to the Holder’s right to
      exercise the Holder’s Options pursuant to, the provisions of Section
      5.1(m)(ii). The amount and price of converted options shall be determined
      by adjusting the amount and price of the Options granted hereunder in the
      same proportion as used for determining the number of Exchange Shares the
      holders of the Common Shares receive in such merger, consolidation,
      acquisition or property or stock, separation or reorganization. Unless
      accelerated by the Board, the vesting schedule set forth in the option
      agreement shall continue to apply to the options granted for the Exchange
      Shares.

	 	 	 
	 	(iv) 	
      In the event of any adjustment in the number of Common
      Shares covered by any Option, any fractional shares resulting from such
      adjustment shall be disregarded and each such Option shall cover only the
      number of full shares resulting from such adjustment.

	 	 	 
	 	(v) 	
      All adjustments pursuant to Section 5.1(m) shall be made
      by the Plan Administrator, and its determination as to what adjustments
      shall be made, and the extent thereof, shall be final, binding and
      conclusive.

	 	 	 
	 	(vi) 	
      The grant of an Option shall not affect in any way the
      right or power of the Corporation to make adjustments, reclassifications,
      reorganizations or changes of its capital or business structure, to merge,
      consolidate or

- 12 - 

dissolve, to liquidate or to sell or
transfer all or any part of its business or assets. 

6.                      
EFFECTIVE DATE; AMENDMENT; SHAREHOLDER APPROVAL 

6.1                    
Options may be granted by the Plan Administrator from time to time on or after
the date on which this Plan is adopted by the Board (the “Effective
Date”). 

6.2                    
Unless sooner terminated by the Board, this Plan shall terminate on the tenth
anniversary of the Effective Date. No Option may be granted after such
termination or during any suspension of this Plan. 

6.3                    
Any Options granted by the Plan Administrator prior to the ratification of this
Plan by the shareholders of the Corporation shall be granted subject to approval
of this Plan by the holders of a majority of the Corporation’s outstanding
voting shares, voting either in person or by proxy at a duly held shareholders’
meeting within twelve (12) months before or after the Effective Date. If such
shareholder approval is sought and not obtained, all Options granted prior
thereto and thereafter shall be considered Non-Qualified Stock Options and any
Options granted to Covered Employees will not be eligible for the exclusion set
forth in Section 162(m) of the Code with respect to the deductibility by the
Corporation of certain compensation. 

7.                     
 NO OBLIGATIONS TO EXERCISE OPTION 

7.1                    
The grant of an Option shall impose no obligation upon the Optionee to exercise
such Option. 

8.                     
 NO RIGHT TO OPTIONS OR TO EMPLOYMENT 

8.1                    
Whether or not any Options are to be granted under this Plan shall be
exclusively within the discretion of the Plan Administrator, and nothing
contained in this Plan shall be construed as giving any person any right to
participate under this Plan. The grant of an Option shall in no way constitute
any form of agreement or understanding binding on the Corporation or any Related
Corporation, express or implied, that the Corporation or any Related Corporation
will employ or contract with an Optionee for any length of time, nor shall it
interfere in any way with the Corporation’s or, where applicable, a Related
Corporation’s right to terminate Optionee’s employment at any time, which right
is hereby reserved. 

9.                      
APPLICATION OF FUNDS 

9.1                    
The proceeds received by the Corporation from the sale of Common Shares issued
upon the exercise of Options shall be used for general corporate purposes,
unless otherwise directed by the Board. 

10.                    
INDEMNIFICATION OF PLAN ADMINISTRATOR 

10.1                   
In addition to all other rights of indemnification they may have as members of
the Board, members of the Plan Administrator shall be indemnified by the
Corporation for all reasonable expenses and liabilities of any type or nature,
including attorneys’ fees, incurred in 

- 13 - 

connection with any action, suit or proceeding to which they or
any of them are a party by reason of, or in connection with, this Plan or any
Option granted under this Plan, and against all amounts paid by them in
settlement thereof (provided that such settlement is approved by independent
legal counsel selected by the Corporation), except to the extent that such
expenses relate to matters for which it is adjudged that such Plan Administrator
member is liable for willful misconduct; provided, that within fifteen (15) days
after the institution of any such action, suit or proceeding, the Plan
Administrator member involved therein shall, in writing, notify the Corporation
of such action, suit or proceeding, so that the Corporation may have the
opportunity to make appropriate arrangements to prosecute or defend the same.

11.                      
AMENDMENT OF PLAN 

11.1                    
The Plan Administrator may, at any time, modify, amend or terminate this Plan or
modify or amend Options granted under this Plan, including, without limitation,
such modifications or amendments as are necessary to maintain compliance with
the Applicable Laws. The Plan Administrator may condition the effectiveness of
any such amendment on the receipt of shareholder approval at such time and in
such manner as the Plan Administrator may consider necessary for the Corporation
to comply with or to avail the Corporation and/or the Optionees of the benefits
of any securities, tax, market listing or other administrative or regulatory
requirements. 

Effective Date: October 11, 2007.

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