Computer Modelling Group Ltd. — Governance Information 2020

Jun 5, 2020

COMPUTER MODELLING GROUP LTD. Amended and Restated Stock Option Plan (2020)[1]

WHEREAS the Shareholders of Computer Modelling Group Ltd. (the "Corporation") wish to adopt a Stock Option Plan (the "Plan") which shall govern the issuance of stock options ("Stock Options") to directors, officers and employees of the Corporation or its subsidiaries and Consultants (as defined below);

The terms and conditions of the Plan for issuance of Stock Options are as follows:

1. Purposes

The principal purposes of the Plan are:

• (a) to retain and attract qualified directors, officers, employees and service providers which the Corporation and its subsidiaries require;

• (b) to promote a proprietary interest in the Corporation and its subsidiaries among their employees, officers and directors;

• (c) to provide an additional incentive element in compensation for the efforts of employees, officers and directors to achieve the long-term objectives of the Corporation on behalf of the corporation; and

• (d) to promote the profitability of the Corporation and its subsidiaries.

2. Reservation of Shares

Subject to Section 11, the maximum number of common shares of the Corporation reserved from time to time for issuance pursuant to Stock Options granted pursuant to the Plan or Stock Options granted prior to adoption of the Plan to Eligible Optionees (as hereinafter defined), together with common shares of the Corporation reserved for issuance pursuant to any other security based compensation arrangements (as defined in the rules of the Toronto Stock Exchange), shall not exceed 10% of the aggregate number of issued and outstanding common shares of the Corporation (the "Outstanding Issue") on a non-diluted basis from time to time. Any amendment to the number of common shares of the Corporation ("Common Shares") reserved for issuance pursuant to the exercise of Stock Options shall be approved by the Toronto Stock Exchange (or such other exchange on which the Common Shares may be listed from time to time) (hereinafter referred to as the "Exchange") and the Shareholders of the Corporation.

3. Eligibility

Stock Options shall be granted only to persons, firms or corporations ("Eligible Optionees"):

• (a) who are bona fide directors, officers or employees of the Corporation or its subsidiaries; or

• (b) consultants ("Consultants") who:

• (i) are engaged to provide services to the Corporation or one of its subsidiaries (other than services provided in relation to the distribution of securities);

1 The Amended and Restated Stock Option Plan (2020) reflects certain amendments dealing with the change of control provisions to reflect the guidance of Institutional Shareholder Services and Glass Lewis. The Board of Directors approved this amendment and consequential amendments on May 20, 2020. The amendments did not require Shareholder approval in accordance with the terms of the Plan and the rules of the Toronto Stock Exchange. Shareholder approval of the unallocated options under the Plan will be sought at the annual meeting of Shareholders on July 9, 2020 and shall be effective until July 9, 2023.

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• (ii) provide services under a written contact with the Corporation or one of its subsidiaries;

• (iii) spend or will spend a significant amount of time and attention on the affairs and business of the Corporation or one of its subsidiaries; and

• (iv) the Board of Directors of the Corporation determines should receive Stock Options

and includes, for an individual consultant, a company of which the individual consultant is an employee or shareholder, and a partnership of which the individual consultant is an employee or a partner.

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

4. Granting of Stock Options

The Board of Directors of the Corporation may from time to time, in its discretion, grant Stock Options to Eligible Optionees. At the time a Stock Option is granted, the Board of Directors shall determine the number of Common Shares purchasable under the Stock Option, the date when the Stock Option is to become effective and, subject to the other provisions of this Plan, all other terms and conditions of the Stock Option. All grants of Stock Options shall be subject to the following terms and conditions:

• (a) no more than 2% of the Outstanding Issue of the Corporation may be granted to any one Consultant in any 12-month period calculated at the date a Stock Option is granted to such Consultant;

• (b) no more than an aggregate of 2% of the Outstanding Issue may be granted to an employee of the Corporation or its subsidiary conducting Investor Relations Activities in any 12-month period;

• (c) an Eligible Optionee may hold more than one Stock Option at any time; however, no one Eligible Optionee can receive Stock Options that, when combined with any other security based compensation arrangements, will entitle the Eligible Optionee to purchase more than 5% of the Outstanding Issue;

• (d) the number of Common Shares of the Corporation reserved for issuance at any time to insiders pursuant to Stock Options that, when combined with any other security based compensation arrangements, will not exceed 10% of the Outstanding Issue;

• (e) there may not be issued to insiders, within a one-year period, a number of Common Shares that, when combined with any other security based compensation arrangements, will exceed in the aggregate of 10% of the Outstanding Issue;

• (f) there may not be issued to any one insider and such insider’s associates, within a one-year period, a number of Common Shares that, when combined with any other security based compensation arrangements, will exceed 5% of the Outstanding Issue;

• (g) the number of Common Shares issuable pursuant to the Plan, together with Common Shares issuable pursuant to any other security-based compensation arrangements (as defined in the rules of the Toronto Stock Exchange) to non-employee directors will be limited to a maximum of 1% of the Outstanding Issue; and

• (h) the equity award value of the aggregate number of Common Shares of the Corporation issued pursuant to Stock Options, together with the Common Shares issuable under any other securitybased compensation arrangement (as defined in the rules of the Toronto Stock Exchange), granted to any one non-employee director is limited in any 12-month period to an equity award value of

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$150,000, and, of this $150,000 annual equity award value, no more than $100,000 may be in the form of Stock Options.

The aforementioned limits on the number of Common Shares reserved for issuance may be formulated on a diluted basis with the consent of the Exchange.

The terms "insider" and "associates" have the meanings ascribed thereto in the applicable securities legislation and the term "Investor Relations Activities" means any activities, by or on behalf of the Corporation or a holder of Common Shares, that promote or reasonably could be expected to promote the purchase or sale of securities of the Corporation, but does not include: (i) the dissemination of information provided, or records prepared, in the ordinary course of business of the Corporation; (A) to promote the sale of products or services of the Corporation, or (B) to raise public awareness of the Corporation, that cannot reasonably be considered to promote the purchase or sale of securities of the Corporation; (ii) activities or communications necessary to comply with the requirements of: (A) applicable securities laws; (B) the Exchange; or (C) the by-laws, rules or other regulatory instruments of any other self regulatory body or exchange having jurisdiction over the Corporation; (iii) communications by a publisher of, or writer for, a newspaper, magazine or business or financial publication, that is of general and regular paid circulation, distributed only to subscribers to it for value or to purchasers of it, if: (A) the communication is only through the newspaper, magazine or publication, and (B) the publisher or writer receives no commission or other consideration other than for acting in the capacity of publisher or writer; or (iv) activities or communications that may be otherwise specified by the Exchange. "Outstanding Issue" means the number of Common Shares outstanding immediately prior to the Common Share issuance in question. Any Stock Options granted to a corporation referred to in Section 3 hereof shall be included in the calculation of the Stock Options held by an Eligible Optionee, insider or insiders.

5. Exercise Price

The exercise price of each Stock Option shall be established by the Board of Directors at the time of the granting of the Stock Options, provided that any exercise price shall be not less than the "Market Price" or such discount from "Market Price" as may be permitted under the rules of the Exchange. Subject to Section 10, the exercise price of a Stock Option must be paid in cash. "Market Price" shall mean the closing price of the Common Shares on the Exchange on the last trading day prior to the effective date the Stock Option is granted, provided that in the event the Common Shares are not listed on any exchange, the exercise price shall be such price as determined by the Board of Directors, in good faith.

6. Term and Exercise Periods

All Stock Options shall be for a term and exercisable from time to time as determined in the discretion of the Board of Directors of the Corporation at the time of the granting of the Stock Options, provided that no Stock Option shall have a term exceeding five years from the date the Stock Option is granted unless the Corporation receives the permission of the Exchange and that all Stock Options shall be granted in compliance with the policies and procedures adopted by the Exchange, and in any event, no Stock Option shall be exercisable for a period exceeding ten (10) years from the date the Stock Option is granted. Without limiting the generality of the foregoing or the discretion of the Board, the Board of Directors may determine:

• (a) that a Stock Option can be exercisable for a period of time or for its remaining term after the death, disability or incapacity of an Eligible Optionee or the retirement of an Eligible Optionee at the age of 60 years or older;

• (b) that only a portion of a Stock Option is exercisable in a specified period;

• (c) that the unexercised portion of a Stock Option is "cumulative" so that any portion of a Stock Option exercisable (but not exercised) in a specified period may be exercised in subsequent periods until the Stock Option terminates;

• (d) that a Stock Option, subject to the receipt of any necessary regulatory approvals, may provide for acceleration of the time at which any Stock Option may be exercised, in whole or in part;

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• (e) that if the Eligible Optionee ceases to be a director, officer or employee of the Corporation or any of its subsidiaries or a consultant to the Corporation or any of its subsidiaries for any reason whatsoever (other than as a result of death, disability, incapacity or retirement at the age of 60 years or older), the Optionee may, but only within ninety (90) days after the Eligible Optionee's ceasing to be a director, officer, employee or consultant (or within thirty (30) days in the case of an Eligible Optionee engaged in Investor Relations Activities) or prior to the expiration date in respect of the Stock Option, whichever is earlier, exercise any Stock Option held by the Eligible Optionee, but only to the extent that the Eligible Optionee was entitled to exercise the Stock Option at the date of such cessation; or

• (f) that in the event of the death, disability or incapacity of the Eligible Optionee, the Stock Option will continue to be exercisable by the legal representative of the Eligible Optionee as to such of the vested shares of which such Stock Option has not previously been exercised pursuant to its terms for a period of one (1) year following such event, provided that the Stock Option shall not in any case be exercisable on or after the expiration date in respect of such Stock Option or in respect of Stock Options which are not exercisable as at the date of death

and other appropriate terms in other circumstances, such as if the Corporation shall resolve to sell all or substantially all of its assets, to liquidate or dissolve, or to merge, amalgamate, consolidate or be absorbed with or into any other corporation, if a take-over bid is made for Common Shares, or if any Change of Control of the Corporation in accordance with Section 13 occurs.

7. Blackout Periods

In the event that the date determined by the Board of Directors on which a Stock Option will expire (the "Fixed Expiry Date") falls within 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 "Blackout Period"), the expiry date of the Stock Option shall be the Fixed Expiry Date plus ten (10) business days from the date any Blackout Period applicable to the relevant Stock Option holder ends (the "Blackout Expiration Term"). In the event that the Fixed Expiry Date falls within five (5) business days immediately after a Blackout Period ends, the Blackout Expiration Term shall be reduced by the number of days between the Fixed Expiry Date and the date the Blackout Period ends. This Section 7 applies to all Stock Options outstanding under the Plan, and the Blackout Expiration Term may not be amended without the approval of the holders of Common Shares of the Corporation.

8. Non-Assignability

Stock Options shall not be assignable or transferable by the Eligible Optionee, except for: (i) a limited right of assignment to allow the exercise of Stock Options by an Eligible Optionee's legal representative in the event of death, disability; and (ii) with the approval of the Board and the Exchange, a right to transfer such Stock Option to a corporation or trust controlled by the Eligible Optionee and wholly-owned by the Eligible Optionee and his spouse or children, subject to the terms upon which the Stock Option is granted.

9. Payment on Exercise

All Common Shares issued pursuant to the exercise of a Stock Option shall be paid for in full at the time of exercise of the Stock Option and prior to the issue of the Common Shares. All Common Shares issued in accordance with the foregoing shall be issued as fully paid and non-assessable Common Shares.

10. Surrender of Stock Options in Lieu of Exercise

Where the Common Shares are listed and posted for trading on the Exchange (or otherwise as provided in any agreement governing the grant of Stock Options), the Board of Directors may from time to time, except when such right is not permitted under applicable law, permit Stock Options, or any portion thereof, to be surrendered, unexercised to the Corporation in consideration of the receipt by the holder of such Stock Options of an amount (the "Settlement Amount") equal to the excess, if any, of the aggregate fair market value (based on the Market Price where the Common Shares are listed on an Exchange) of the Common Shares on the Exchange on the trading day

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immediately preceding the Surrender Date (as herein defined) able to be purchased pursuant to the vested and exercisable portion of such Stock Options on the date of surrender (the "Surrender Date"), over the aggregate Exercise Price for those Common Shares pursuant to those Stock Options. The Settlement Amount is payable in cash, Common Shares or a combination thereof, as the Board of Directors may from time to time in its discretion determine. In the event that the Board of Directors permits the exchange of a portion of Stock Options, but not all Stock Options, a holder of Stock Options shall have the right to specify which vested and unexercised Stock Options held by such holder are surrendered. The exchange of payment of the Settlement Amount, in cash, in Common Shares or a combination thereof, shall constitute a final disposal of the Stock Options to acquire Common Shares underlying such portion of the Stock Options so surrendered. The Corporation will withhold from the Settlement Amount such amounts as may be required to be withheld according to law. For greater certainty, those Common Shares underlying the unexercised Stock Options that are the subject of retirement in consideration for a Settlement Amount, shall not be deemed to be included in the total number of Common Shares reserved for issuance pursuant to Section 2 of the Plan for which Stock Options may be granted under this Plan.

11. Re-loading and Non-Exercise

The "re-loading" of Stock Options is permitted under the Plan. Any increase in the issued and outstanding Common Shares will result in an increase in the available number of Common Shares issuable under the Plan and any exercises of Stock Options will make new grants available under the Plan effectively resulting in a re-loading of the number of options available to grant under the Plan. If any Stock Options granted pursuant to the Plan shall expire, terminate or be cancelled or surrendered for any reason without having been exercised in full, any unpurchased Common Shares to which such Stock Options relate shall be available for the purposes of the granting of further Stock Options under the Plan, however, at no time shall there be outstanding Stock Options exceeding in the aggregate the number of Common Shares of the Corporation reserved for issuance pursuant to Stock Options under this Plan.

12. Adjustment in Certain Circumstances

In the event:

• a) of any change in the Common Shares through subdivision, consolidation, reclassification, amalgamation, merger or otherwise; or

• b) of any stock dividend to holders of Common Shares (other than such stock dividends issued at the option of Shareholders in lieu of substantially equivalent cash dividends); or

• c) that any rights are granted to all or substantially all of the holders of Common Shares to purchase Common Shares of the Corporation at prices substantially below fair market value; or

• d) that as a result of any recapitalization, merger, consolidation or otherwise the Common Shares of the Corporation are converted into or exchangeable for any other shares;

and such transaction or event is not a Change of Control, then in any such case the Board may make such adjustment in the Plan and in the Stock Options granted under the Plan as the Board may in its sole discretion (and without shareholder approval) deem appropriate to prevent substantial dilution or enlargement of the rights granted to, or available for, holders of Stock Options, and such adjustments may be included in the Stock Options.

Adjustments under this Section 12 shall be made by the Board, whose determination as to what adjustments shall be made, and the extent thereof, shall be final, binding and conclusive. No fractional Common Share shall be issued upon the exercise of a Stock Option following the making of any such adjustment.

13. Change of Control

• a) Notwithstanding the terms of the Plan, but subject to the terms of any employment agreement, in the event of an occurrence of a Change of Control of the Corporation (as hereinafter defined) and at least one of the following additional circumstances occurring:

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• i. upon the Change of Control event the surviving corporation (or any affiliate thereof) or the potential successor (or any affiliate thereto) does not continue or assume the Corporation’s obligations with respect to each Stock Option or does not provide for the conversion or replacement of each Stock Option with an equivalent award that satisfies the criteria set forth in Section 13(a)(A) or Section 13(a)(B), respectively; or

• ii. in the event that the Stock Options were continued, assumed, converted or replaced as contemplated in Section 13(a)(A) or Section 13(a)(B), as applicable, during the six-month period following the effective date of a Change of Control, the Eligible Optionee is terminated without Cause or resigns for Good Reason;

there shall be an immediate full vesting of each outstanding Stock Option and the Eligible Optionee shall (as soon as practicable) be entitled to receive Common Shares, determined as of (x) the effective date of the Change of Control (in the circumstances set forth in Section 13(a)(i)), or (y) the Termination Date (in the circumstances set forth in Section 13(a)(ii)), determined on the basis that all of the Stock Options shall be considered to be vested as of the applicable date (or such other amount determined by the Board).

• A. For purposes of determining whether each Stock Option shall be considered to have been continued or assumed by the surviving corporation (or any affiliate thereto) or the potential successor (or any affiliate thereto), which determination shall be made solely in the discretionary judgment of the Board in advance of the effective date of a particular Change of Control and shall be final and binding, subject to applicable law, the obligations with respect to the continuation or assumption of each Stock Option shall be considered to have been satisfied if each of the following conditions are met:

• i. the Common Shares remain publicly held and widely traded on an established stock exchange; and

• ii. the terms of the Plan and each Stock Option are not altered or impaired without the consent of the Eligible Optionee.

• B. For purposes of determining whether each Stock Option shall be considered to have been converted or replaced with an equivalent award by the surviving corporation (or any affiliate thereto) or the potential successor (or any affiliate thereto), which determination shall be made solely in the discretionary judgment of the Board in advance of the effective date of a particular Change of Control and shall be final and binding, subject to applicable law, the obligations with respect to the conversion or replacement of each Stock Option shall be considered to have been satisfied if each of the following conditions are met:

• i. each Stock Option is converted or replaced with a replacement award in a manner that qualifies under Subsection 7(1.4) of the Income Tax Act (Canada) in the case of an Eligible Optionee that is a Canadian Taxpayer on all or any portion of the benefit arising in connection with the grant, exercise and/or other disposition of such award;

• ii. the converted or replaced Stock Option preserves the existing value of each underlying Stock Option being replaced, contains provisions for scheduled vesting, and treatment on termination of employment (including the definition of Cause and Good Reason) that are no less favourable to the Eligible Optionee than the underlying Stock Options being replaced, and all other terms of the converted or replacement Stock Options, other than with respect to the security and number of shares represented by the continued or replacement Stock Options) are substantially similar to the underlying Stock Options being converted or replaced; and

• i. the security underlying the converted or replaced Stock Option is of a class that is

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publicly held and widely traded on an established stock exchange.

For the purpose of this Plan:

"Cause" includes:

• (a) theft, fraud, dishonesty, or material misconduct by the Eligible Optionee involving the property, business or affairs of the Corporation or any affiliate or the carrying out of the Eligible Optionee’s duties to the Corporation or any affiliate;

• (b) any material failure by the Eligible Optionee to comply with the Corporation’s written Code of Business Conduct, any written policies of the Corporation or any affiliate (as the case may be), or any other obligations to the Corporation or any affiliate (as the case may be);

• (c) any material breach or non-observance by the Eligible Optionee of any term of the Eligible Optionee’s employment agreement, or any non-competition, non-solicitation or confidentiality covenants between the Eligible Optionee and the Corporation or any affiliate (as the case may be);

• (d) the material failure by the Eligible Optionee to perform his duties to the Corporation or any affiliate;

• (e) any intentional effort by the Eligible Optionee, whether by action or inaction, to trigger termination without Cause under the Eligible Optionee’s employment agreement, if any;

• (f) the breach by the Eligible Optionee of his fiduciary duties owed to the Corporation or any affiliate;

• (g) any wilful act, misrepresentation or omission which the Eligible Optionee knew or should have known, would expose the Corporation or any affiliate to material loss; or

• (h) anything that would constitute cause for the termination of the Eligible Optionee’s employment (including under the terms of any employment agreement between the Corporation or any affiliate and the Eligible Optionee) or constitute a material breach of the Eligible Optionee’s obligations to the Corporation or any affiliate, as interpreted under the laws applicable in the jurisdiction in which the Eligible Optionee is resident.

"Change of Control" of the Corporation means and shall be deemed to have occurred upon:

• (a) the acceptance by the holders of Common Shares, representing in the aggregate, more than fifty (50) percent of all issued Common Shares, of any offer, whether by way of a take-over bid or otherwise, for all or any of the outstanding Common Shares of the Corporation; or

• (b) the acquisition, by whatever means, by a person (or two or more persons who, in such acquisition, have acted jointly or in concert or intend to exercise jointly or in concert any voting rights attaching to the Common Shares acquired), directly or indirectly, of beneficial ownership of such number of Common Shares or rights to Common Shares of the Corporation, which together with such person's then owned Common Shares and rights to Common Shares, if any, represent (assuming the full exercise of such rights to voting securities) more than fifty (50) percent of the combined voting rights of the Corporation's then outstanding Common Shares; or

• (c) approval of the holders of Common Shares and subsequent completion of a merger, consolidation, amalgamation or other combination of the Corporation with another corporation or other entity pursuant to which the holders of Common Shares immediately prior to such transaction own securities of the successor or continuing corporation or other entity following completion of such transaction that would entitle them to cast less than 50% of the votes attaching to the Common

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Shares or other voting shares in the capital of the successor or continuing corporation or other entity; or

• (d) approval of the holders of Common Shares and subsequent completion of, a liquidation of the assets or wind-up the Corporation's business or significantly rearrange its affairs in one or more transactions or series of transactions or the commencement of proceedings for such a liquidation, winding-up or re-arrangement (except where such re-arrangement is part of a bona fide reorganization of the Corporation in circumstances where the business of the Corporation is continued and where the shareholdings remain substantially the same following the rearrangement); or

• (e) approval of the holders of Common Shares and subsequent completion of the sale, lease or other disposition of all or substantially all of the assets of the Corporation; or

• (f) the election at a meeting of the holders of Common Shares of a number of directors of the Corporation, who were not included in the slate for election as directors proposed to the holders of Common Shares by the Corporation's prior Board, and would represent a majority of the Board; or

• (g) the appointment of a number of directors which would represent a majority of the Board and which were nominated by any holder of Common Shares or by any group of holders of Common Shares acting jointly or in concert and not approved by the Corporation's prior Board,

but shall not include an acquisition of the Corporation's securities or assets by, or any consolidation, merger or exchange of securities or assets with, any entity that, immediately prior to such acquisition, consolidation, merger or exchange of securities was a subsidiary of the Corporation.

• "Good Reason" means to resign where there is:

• (a) a material, adverse reduction or material, adverse diminution in the Eligible Optionee’s reporting relationships, authority, titles, duties, position or responsibilities with the Corporation or affiliate (as the case may be);

• (b) a reduction in the Eligible Optionee’s base salary (other than a downward adjustment based on the overall financial performance of the Corporation that affects similarly situated Eligible Optionees generally);

• (c) the discontinuance of the Eligible Optionee’s eligibility to receive bonuses or other incentives, other than in accordance with the bonus or incentive plans:

  • (i) in circumstances not involving a Change of Control, that were in effect during the fiscal year prior to the year in which the Eligible Optionee resigns for Good Reason; and

  • (ii) in circumstances involving a Change of Control, that were in effect immediately prior to the date on which the Change of Control occurs;

in each case other than the discontinuance of a bonus or other incentive plan then in effect that is not replaced by a different bonus or incentive plan of equivalent value and other than a downward adjustment based on the overall financial performance of the Corporation that affects similarly situated Eligible Optionees generally;

• (d) the assignment to the Eligible Optionee of any significant, ongoing duties inconsistent with the Eligible Optionee’s skills, duties, position, responsibilities or status; or

• (e) any material breach of the Eligible Optionee’s employment agreement, if any;

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provided that a termination of employment by the Eligible Optionee for one of the reasons set forth in clause (a), (b), (c), (d) or (e) hereof will not constitute Good Reason unless, within the 30-day period immediately following the Eligible Optionee’s knowledge of the occurrence of such Good Reason event, the Eligible Optionee has given written notice to the Corporation of the event relied upon for such termination and the Corporation or affiliate has not remedied such event within 30 days (the “ Cure Period ”) of the receipt of such notice. For the avoidance of doubt, the Eligible Optionee’s employment shall not be deemed to terminate for Good Reason unless and until the Cure Period has expired and, if curable, the Corporation or affiliate has not remedied the applicable Good Reason event. The Corporation and the Eligible Optionee may mutually waive in writing any of the foregoing provisions with respect to an event that otherwise would constitute Good Reason.

14. Expenses

All expenses in connection with the administration of this Plan shall be borne by the Corporation.

15. Compliance with Laws

The Corporation shall not be obliged to issue any shares upon exercise of Stock Options if the issue would violate any law or regulation or any rule of any governmental authority or stock exchange. The Corporation shall not be required to issue, register or qualify for resale any common shares of the Corporation issuable upon exercise of Stock Options pursuant to the provisions of a prospectus or similar document, provided that the Corporation shall notify the Exchange and any other appropriate regulatory bodies in Canada of the existence of the Plan and the issuance and exercise of Stock Options.

16. Form of Stock Option Agreement

All Stock Options shall be issued by the Corporation in the form of a stock option agreement which meets the general requirements and conditions set forth in this Plan and the requirements of the Exchange and on such terms within these requirements as determined at the sole discretion of the Board. A Stock Option granted under the Plan will not be exercisable by an Eligible Optionee until evidenced by the stock option agreement duly executed and delivered by the Corporation.

17. Amendments and Termination of Plan

The Corporation retains the right to amend from time to time or to suspend, terminate or discontinue the terms and conditions of the Plan by resolution of the Board. Any amendments shall be subject to the prior consent of any applicable regulatory bodies, including the Exchange. Any amendment to the Plan shall take effect only with respect to Stock Options granted after the effective date of such amendment, provided that it may apply to any outstanding Stock Options with the mutual consent of the Corporation and the Eligible Optionees to whom such Stock Options have been granted. The Board of Directors shall have the power and authority to approve amendments relating to the Plan or to Stock Options, without further approval of the Shareholders, save and except for amendments related to the following which will require Shareholder approval:

• (a) any increase in the number of Common Shares issuable under the Plan, except as a result of any redivision, subdivision, consolidation, recapitalization or similar transaction to any of the foregoing or the exchange, change or transfer of Common Shares pursuant to a reorganization, amalgamation, arrangement, consolidation or merger, statutory or otherwise, take-over bid or similar change to any of the foregoing;

• (b) a reduction in the exercise price for a Stock Option (for this purpose, a cancellation or termination of a Stock Option of an Eligible Optionee prior to its expiry for the purpose of reissuing Stock Options to the same Eligible Optionee with a lower exercise price shall be treated as an amendment to reduce the exercise price of a Stock Option) except for the purpose of maintaining Stock Option value in connection with a redivision, subdivision, consolidation, recapitalization or similar transaction to any of the foregoing or the exchange, change or transfer of Common Shares pursuant

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to a reorganization, amalgamation, arrangement, consolidation or merger, statutory or otherwise, take-over bid or similar change to any of the foregoing;

• (c) an extension to the Option Period for a Stock Option beyond its original expiry (for this purpose, a cancellation or termination of a Stock Option of an Eligible Optionee prior to its expiry for the purpose of reissuing Stock Options to the same Eligible Optionee with a different expiry date shall be treated as an amendment to extend the Option Period of Stock Option), other than an extension otherwise permitted by the Plan;

• (d) an amendment to permit Stock Options to be transferred other than for normal estate settlement purposes or for normal purposes or permitting the Stock Option holder's duly appointed legal representative to act on behalf of the Stock Option holder in the event of such holder's disability or incapacity;

• (e)

• an amendment to permit awards, other than Stock Options, to be made under the Plan;

• (f) remove or increase the limit on the grants of Stock Options to non-employee directors and other insiders above the amounts contained in Section 4 hereof; and

• (g) any amendment to this Section 17 of this Plan and any other amendment required to be approved by Shareholders under applicable law (including, without limitation under the rules, regulations and policies of the Toronto Stock Exchange).

18. Administration

The Plan shall be administered by the Board of Directors. The Board of Directors shall have full and final discretion to interpret the provisions of the Plan and to prescribe, amend, rescind and waive rules and regulations to govern the administration and operation of the Plan. All decisions and interpretations made by the Board of Directors shall be binding and conclusive upon the Corporation and on all persons eligible to participate in the Plan, subject to Shareholder approval if required by the Exchange.

19. Applicable Law

This Plan shall be governed by and construed in accordance with the laws in force in the Province of Alberta.

20. Stock Exchange

To the extent applicable, the issuance of any Common Shares pursuant to Stock Options issued under this Plan is subject to approval of the Plan by the Exchange and the Plan shall be subject to the ongoing requirements of such Exchange.

21. Right to Issue Other Shares

The Corporation shall not by virtue of this Plan be in any way restricted from declaring and paying stock dividends, issuing further Common Shares, varying or amending its share capital or corporate structure or conducting its business in any way whatsoever.

22. Necessary Approvals

The obligation of the Corporation to issue and deliver Common Shares in accordance with this Plan and Stock Options granted hereunder is subject to applicable securities legislation and to the receipt of any approvals that may be required from any regulatory authority or stock exchange having jurisdiction over the securities of the Corporation. If Common Shares cannot be issued to a Eligible Optionee upon the exercise of a Stock Option for any reason whatsoever, the obligation of the Corporation to issue such Common Shares shall terminate and any funds paid to the Corporation in connection with the exercise of such Stock Option will be returned to the relevant Eligible

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Optionee as soon as practicable.

23. Withholding

In connection with the exercise of a Stock Option, the Eligible Optionee (or his or her heirs or administrators) shall follow the Corporation's procedures and policies relating to the payment or funding of any withholding taxes applicable to the exercise of the Stock Option, including, where required by the Corporation, the remittance to the Corporation by the Eligible Optionee (or his or her heirs or administrators) of an amount of cash sufficient to satisfy any withholding requirements relating to the exercise of the Stock Option.

24. Effective Date

This Plan shall become effective as of and from the date upon which all necessary Shareholder and regulatory approvals are received.