ALCAN INC
ALCAN EXECUTIVE SHARE OPTION PLAN
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>8
<FILENAME>ex1011.htm
<DESCRIPTION>ALCAN EXECUTIVE SHARE OPTION PLAN
<TEXT>
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<p class="MsoNormal" style="page-break-after: avoid">
<font face="Arial" size="2"><b>
&nbsp;Exhibit 10.11</b></font></p>
<p class="MsoNormal" style="page-break-after: avoid" align="center">
<b><font face="Arial" size="5">ALCAN EXECUTIVE SHARE OPTION PLAN</font></b></p>
<h3 align="center"><font face="Arial" size="2">THE PLAN<b>&nbsp;</b></font></h3>
<p class="MsoNormal" style="page-break-after: avoid">
<font face="Arial" size="2"><b>
1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
General Information&nbsp;</b></font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">The Plan was
adopted by the Board of Directors and Shareholders effective July 24, 1987 and
was amended on April 26, 1990, April 22, 1993, April 28, 2005 and December 8,
2005. Its predecessor plan was originally adopted on February 5, 1981, effective
March 26, 1981, by the former parent of the Company. </font> </p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">The purposes
of the Plan are to provide a means for encouraging key employees to obtain an
increased proprietary interest in the enterprise and an additional incentive to
further its growth and development and to assist the Company in retaining and
attracting executives with experience and ability.</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">The Plan
provides for the granting to key employees of the Company and its Subsidiaries
of Options to purchase Common Shares and, where applicable, SARs. The Committee
which administers the Plan may determine in its sole discretion which employees
of the Company and its Subsidiaries are eligible to be granted Options.</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">The Plan is
not subject to any of the provisions of the United States Employee Retirement
Income Security Act of 1974 nor is it a qualified plan under Section 401(a) of
the United States Internal Revenue Code of 1986, as amended.</font></p>
<p class="MsoNormal" style="page-break-after: avoid">
<font face="Arial" size="2"><b>
2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Definitions&nbsp;</b></font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Alcan Group&quot;
means the Company together with its consolidated subsidiaries and other
companies in which the Company owns, directly or indirectly, less than 50% of
the voting stock but has significant influence over management;</font></p>
<p class="MsoNormal" style="text-align: center; margin-left: .5in">
<font face="Arial" size="2">1</font></p><hr>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
&nbsp;</p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Board of
Directors&quot; means the Board of Directors of the Company;
</font>
</p>
<p class="MsoNormal" style="text-align: justify; line-height: 12.0pt; margin-left: .5in">
<font face="Arial" size="2">&quot;Change of
Control Event&quot; means any of the following:</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -.25in; line-height: 12.0pt; margin-left: 85.5pt">
<font face="Arial" size="2">1.&nbsp;&nbsp; the
acquisition of direct or indirect beneficial ownership of 50% or more of the
Shares of the Company by any person or group of associated persons acting
together or jointly and in concert;</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -.25in; line-height: 12.0pt; margin-left: 85.5pt">
<font face="Arial" size="2">2.&nbsp;&nbsp; any
amalgamation, merger, arrangement, reorganization or consolidation (or
substantially similar transactions or series of transactions) in respect of the
Company, other than where (a) the Shares of the Company after the transaction
would continue to represent two-thirds or more of the combined voting securities
of the resulting entity, without a concurrent substantial change in the
composition of the Company's Board of Directors, or (b) it is effected for the
purpose of implementing a recapitalization of the Company, without there also
occurring an acquisition of direct or indirect beneficial ownership of 20% or
more of the Shares of the Company by any person or group of associated persons
acting together or jointly and in concert;</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -.25in; line-height: 12.0pt; margin-left: 85.5pt">
<font face="Arial" size="2">3.&nbsp;&nbsp; the
approval by the Company's Shareholders of a plan for the complete or effective
dissolution of the Company;</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -.25in; line-height: 12.0pt; margin-left: 85.5pt">
<font face="Arial" size="2">4.&nbsp;&nbsp; the
issuance by the Company of Shares in connection with an exchange offer
acquisition if such issuance results in the Shareholders holding less than
two-thirds of the combined voting securities of the resulting entity and there
is a concurrent substantial change in the composition of the Company's Board of
Directors;</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -.25in; line-height: 12.0pt; margin-left: 85.5pt">
<font face="Arial" size="2">5.&nbsp;&nbsp; the sale of
all or substantially all of the assets of the Company, other than (a) to an
owner or owners of at least two-thirds of the Company's Shares, or (b) in a
manner so that the acquirer is thereafter controlled as to at least two-thirds
of its voting securities by the owner or owners of at least two-thirds of the
Company's Shares, provided in each case that there is no concurrent substantial
change in the composition of the Company's Board of Directors; </font> </p>
<p class="MsoNormal" style="text-align: justify; text-indent: -.25in; line-height: 12.0pt; margin-left: 85.5pt">
<font face="Arial" size="2">6.&nbsp;&nbsp; the
completion of the corporate approvals necessary on the part of the Company to
give effect to any amalgamation, merger, arrangement, reorganization,
continuance or consolidation (or substantially similar transactions or series of
transactions) in respect of the Company pursuant to which the Company will not
survive as a stand-alone publicly-traded corporation - without limitation the
Company shall be deemed not to have survived as a stand-alone publicly-traded
corporation if (a) there is no longer a liquid market for the Shares on the
Toronto or New York stock exchanges, (b) more that 50% of the Shares become held
by any person or group of associated persons acting together or jointly and in
concert, or (c) the Company becomes a subsidiary of another corporation; or</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -.25in; margin-left: 85.5pt">
<font face="Arial" size="2">7.&nbsp;&nbsp; any
occurrence pursuant to which individuals who were the incumbent Directors on 1
November 2005 cease for any reason to constitute at least two-thirds of the
Company's Board, provided that any individual who became a Director subsequently
whose election or appointment was approved by at least two-thirds of the
incumbent Directors shall also be considered to be an incumbent Director, but
further provided that no individual elected or appointed initially as a result
of an actual or threatened proxy contest or solicitation of proxies or in
connection with amalgamation, merger, arrangement, reorganization, consolidation
or share exchange acquisition transaction (or substantially similar transactions
or series of transactions) shall be deemed to be an incumbent Director.</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -.25in; margin-left: 85.5pt">
<font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For the
purposes hereof a substantial change in the composition of the Company's Board
of Directors shall be any change involving the departure of at least three
Directors or any other change pursuant to which the Directors in office prior
thereto cease to constitute at least two-thirds of the members of the Board.&nbsp; In
addition, any &quot;change of control event&quot; which occurs for the purposes of a
change of control agreement in force between the Company and an employee of the
Company or one of its subsidiaries as of the date hereof shall be deemed to be a
Change of Control Event hereunder in relation to that employee.</font></p>
<p class="MsoNormal" style="text-align: center; text-indent: -.25in; margin-left: 85.5pt">
<font face="Arial" size="2">2</font></p><hr>
<p class="MsoNormal" style="text-align: center; text-indent: -.25in; margin-left: 85.5pt">
&nbsp;</p>
<p class="MsoNormal" style="text-align: justify; margin-left: 85.5pt">
<font face="Arial" size="2">The Chairman
of the Committee may, in order to protect the interests of the Optionees if in
his reasonable judgement a Change of Control Event has become imminent but has
not yet occurred, declare that a Change of Control Event has occurred in
relation to the Plan to enable the Optionees to exercise their Options.</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Committee&quot;
means the Human Resources Committee of the Board of Directors;</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Common Share&quot;
or &quot;Share&quot; means a Common Share of the Company; </font> </p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Company&quot;
means Alcan Inc.;
</font>
</p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Director&quot;
means a Director of the Company;
</font>
</p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Effective
Date&quot; means the date on which an Option is granted;</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Holding
Period&quot; has the meaning set out in paragraph 11 below; </font> </p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Market Value&quot;
means the average of the high and low prices of Shares on the Toronto Stock
Exchange on the relevant day, or if two or more sales of Shares shall not have
been reported for that day, on the next preceding day for which there have been
two or more reported sales;</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Option&quot; means
an option to purchase Common Shares granted under the Plan;</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Optionee&quot;
means a person who has been or is to be granted an Option;</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Option
Period&quot; has the meaning set out in paragraph 9 below;
</font>
</p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Plan&quot; means
the Alcan Executive Share Option Plan adopted by the Company on July 24, 1987,
as amended from time to time;</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Retirement&quot;
means (unless otherwise determined by the Committee): </font> </p>
<p class="MsoNormal" style="text-align: justify; text-indent: -22.5pt; margin-left: 1.25in">
<font face="Arial" size="2">(i)&nbsp;&nbsp;&nbsp;
retirement in accordance with the provisions of those employee benefit plans of
the Company or any Subsidiary covering the Optionee, or</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -22.5pt; margin-left: 1.25in">
<font face="Arial" size="2">(ii)&nbsp;&nbsp;&nbsp; if the
Optionee is not covered by any such plan, as determined by the Committee, or</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -22.5pt; margin-left: 1.25in">
<font face="Arial" size="2">(iii)&nbsp;&nbsp; the
placing of a terminated Optionee on the Company's non-active payroll in order to
permit such Optionee to attain early retirement age;</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Shareholder&quot;
means a holder of Common Share(s); </font>
</p>
<p class="MsoNormal" style="text-align: center; margin-left: .5in">
<font face="Arial" size="2">3</font></p><hr>
<p class="MsoNormal" style="text-align: center; margin-left: .5in">
&nbsp;</p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Stock
Appreciation Right&quot; or &quot;SAR&quot; means a right, if granted by the Committee, to
receive from the Company, in return for the surrender to the Company of the
unexercised right to subscribe for a Share pursuant to an Option, cash in an
amount equal to the excess of the Market Value of such Share on the date such
right is exercised over the subscription price provided in that Option;</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Subsidiary&quot;
means any company in which the Company owns, directly or indirectly, more than
50% of the voting stock;</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Waiting
Period&quot; means a period of at least three months commencing on the Effective Date
and such additional period, if any, as may be established by the Committee at
the time of the grant of the Option, such additional period to be subject to
such terms and conditions, including conditions for the earlier termination of
such additional period, as the Committee may determine.</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">&quot;Yearly
Allotment&quot; means, in respect of a calendar year, 0.75% of the Shares outstanding
as at the end of the previous calendar year.</font></p>
<p class="MsoNormal">
&nbsp;</p>
<p class="MsoNormal" style="page-break-after: avoid">
<font face="Arial" size="2"><b>
3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Administration&nbsp;</b></font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">The Plan shall
be administered by the Committee. The Committee shall have full and complete
authority to interpret the Plan and to prescribe such rules and regulations and
make such other determinations as it deems necessary or desirable for the
administration of the Plan.</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">The Committee
shall determine the grant of Options as set out in paragraph 6 below.</font></p>
<p class="MsoNormal" style="page-break-after: avoid">&nbsp;</p>
<p class="MsoNormal" style="page-break-after: avoid">
<font face="Arial" size="2"><b>
4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Shares Subject to Grant of Options&nbsp;</b></font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">Subject to
applicable laws and stock exchange rules and regulations, the Committee may
grant during any calendar year Options in respect of a maximum number of Shares
which is the aggregate of:</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: 67.5pt">
<font face="Arial" size="2">(i)&nbsp;&nbsp;&nbsp; the
Yearly Allotment, and </font> </p>
<p class="MsoNormal" style="text-align: justify; text-indent: -22.5pt; margin-left: 1.25in">
<font face="Arial" size="2">(ii)&nbsp;&nbsp;&nbsp; those
portions of all previous Yearly Allotments in respect of which Options have not
been granted,</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">provided that
the aggregate number of Shares which may be issued after&nbsp; March 11, 2005 (in
respect of Options already granted up to that date and Options to be granted
thereafter) shall not exceed 24,844,630 Shares, subject to adjustment in
accordance with paragraph 13, below.</font></p>
<p class="MsoNormal">
&nbsp;</p>
<p class="MsoNormal" style="page-break-after: avoid">
<font face="Arial" size="2"><b>
5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Eligibility&nbsp;</b></font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">In order to be
eligible for the grant of Options by the Committee as provided herein, a person
must be an employee of the Company or one of its Subsidiaries.</font></p>
<p class="MsoNormal">
&nbsp;</p>
<p class="MsoNormal" style="page-break-after: avoid">
<font face="Arial" size="2"><b>
6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Grant of Options&nbsp;</b></font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">The Committee
shall from time to time designate the Optionees as well as the number of Shares
to be covered by each Option and shall fix the Effective Date of the Option. Any
Optionee may hold more than one Option.</font></p>
<p class="MsoNormal">
&nbsp;</p>
<p class="MsoNormal" style="page-break-after: avoid">
<font face="Arial" size="2"><b>
7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subscription Price&nbsp;</b></font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">The
subscription price for each Share covered by an Option shall be established by
the Committee at not less than 100% of the Market Value of a Share on the
Effective Date.</font></p>
<p class="MsoNormal" style="text-align: center; margin-left: .5in">
<font face="Arial" size="2">4</font></p><hr>
<p class="MsoNormal">
&nbsp;</p>
<p class="MsoNormal" style="page-break-after: avoid">
<font face="Arial" size="2"><b>
8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Exercise of Option&nbsp;</b></font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">An Option may
be exercised in the manner prescribed by the Committee in whole at any time or
in part from time to time during the Option Period or in such amounts and at
such times during the Option Period as the Committee may determine. The
subscription price of Shares shall be paid in full in cash at the time of
exercise of the Option.</font></p>
<p class="MsoNormal">
&nbsp;</p>
<p class="MsoNormal" style="page-break-after: avoid">
<font face="Arial" size="2"><b>
9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Option Period&nbsp;</b></font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">Each Option
shall be exercisable by the Optionee during a period (&quot;Option Period&quot;)
established by the Committee at the time the Option is granted which shall
commence after the Waiting Period and shall terminate not later than ten years
after the Effective Date, except that:</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -22.5pt; margin-left: 1.25in">
<font face="Arial" size="2">9.1&nbsp;&nbsp; in the
case of certain Optionees who are, or may be deemed to be, insiders of the
Company in accordance with any applicable law, the Waiting Period shall not be
shorter than the period prescribed by such law;</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -22.5pt; margin-left: 1.25in">
<font face="Arial" size="2">9.2&nbsp;&nbsp; subject
to the Option Period stated above, the Option Period shall terminate not later
than five years after the earlier of:</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -27.0pt; margin-left: 117.0pt">
<font face="Arial" size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp; the
death of the Optionee, and </font> </p>
<p class="MsoNormal" style="text-align: justify; text-indent: -27.0pt; margin-left: 117.0pt">
<font face="Arial" size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp; the
Retirement of the Optionee; and </font> </p>
<p class="MsoNormal" style="text-align: justify; text-indent: -22.5pt; margin-left: 1.25in">
<font face="Arial" size="2">9.3&nbsp;&nbsp; the
Option Period shall (unless otherwise determined by the Committee) terminate
immediately upon the resignation of the Optionee or other termination (except if
paragraph 9.2 applies) of employment of the Optionee by the Company.</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">In the case of
death, the Optionee's estate shall have the right to exercise the Options at any
time with respect to all or from time to time with respect to any portion of the
Options which the Optionee had not previously exercised.</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">All rights
under an Option unexercised in whole or in part at the termination of the Option
Period shall be forfeited.</font></p>
<p class="MsoNormal">
&nbsp;</p>
<p class="MsoNormal" style="page-break-after: avoid">
<font face="Arial" size="2"><b>
10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Stock Appreciation Rights&nbsp;</b></font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">Each Option
granted under the Plan may, at the discretion of the Committee, have connected
therewith SARs in respect of one-half of the Shares covered by the Option.</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">Each SAR shall
be subject to the same terms and conditions as the related Option and shall be
exercisable during the Option Period of the related Option except that, in the
case of certain Optionees who are, or may be deemed to be, insiders of the
Company in accordance with any applicable law, SARs may be exercised only during
the periods permitted by such law.</font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">Each exercise
of a SAR shall reduce by one the number of Shares covered by the related Option.
However, the exercise of an Option will not reduce the number of SARs connected
with such Option until one-half of the Shares originally subject to such Option
shall have been purchased; thereafter, each exercise of an Option shall reduce
the number of SARs connected therewith by the equivalent of the number of Shares
subscribed to by reason of such exercise. Unexercised SARs shall terminate on
termination of the Option Period, together with the related Option.</font></p>
<p class="MsoNormal" style="text-align: center; margin-left: .5in">
<font face="Arial" size="2">5</font></p><hr>
<p class="MsoNormal">
&nbsp;</p>
<p class="MsoNormal" style="page-break-after: avoid">
<font face="Arial" size="2"><b>
11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Disposal of Shares Acquired&nbsp;</b></font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">Shares issued
pursuant to the exercise of an Option may not be disposed of by the Optionee
until the expiry of such period (&quot;Holding Period&quot;), if any, as may be prescribed
by the Committee at the time of grant of the Option, except that, if such
Holding Period has been prescribed:</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -31.5pt; margin-left: 99.0pt">
<font face="Arial" size="2">11.1&nbsp;&nbsp;&nbsp; in the
event of the exercise of an Option by the estate of a deceased Optionee, the
estate may dispose of the related Shares immediately;</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -31.5pt; margin-left: 99.0pt">
<font face="Arial" size="2">11.2&nbsp;&nbsp;&nbsp; in the
event of the exercise of an Option after the Retirement of the Optionee, the
Optionee may dispose of the related Shares immediately;</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -31.5pt; margin-left: 99.0pt">
<font face="Arial" size="2">11.3&nbsp;&nbsp;&nbsp; the
Committee may, in the light of special circumstances affecting an Optionee and
at its discretion, waive any Holding Period which has been prescribed in respect
of such Option; and</font></p>
<p class="MsoNormal" style="text-align: justify; text-indent: -31.5pt; margin-left: 99.0pt">
<font face="Arial" size="2">11.4&nbsp;&nbsp;&nbsp;
notwithstanding the above, in the case of certain Optionees who are, or may be
deemed to be, insiders of the Company in accordance with any applicable law, the
Holding Period shall not be shorter than the period, if any, prescribed by such
law.</font></p>
<p class="MsoNormal">
&nbsp;</p>
<p class="MsoNormal" style="page-break-after: avoid">
<font face="Arial" size="2"><b>
12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Non-assignable&nbsp;</b></font></p>
<p class="MsoNormal" style="text-align: justify; margin-left: .5in">
<font face="Arial" size="2">No Option or
any interest therein shall be assignable by the Optionee otherwise than by will
or the laws of descent and distribution. During the life of the Optionee, an
Option shall be exercisable only by the Optionee or the Optionee's legal
representative.</font></p>
<p class="MsoNormal">
&nbsp;</p>
<p class="MsoNormal" style="page-break-after: avoid">
<font face="Arial" size="2"><b>
13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Effects of Certain Transactions&nbsp;</b></font></p>
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<font face="Arial" size="2">In the event
of any change in the outstanding Shares by reason of any stock dividend, stock
split, recapitalization, merger, consolidation, combination or exchange of
Shares or other similar corporate change, an equitable adjustment shall be made
in the number or kind of Shares issuable under the Plan or subject to
outstanding Options or SARs and/or in the subscription price of such Shares
and/or in the formula for determining cash payable upon the exercise of SARs.
Such adjustment shall be made by the Committee and shall be conclusive and
binding for all purposes of the Plan.</font></p>
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&nbsp;</p>
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<font face="Arial" size="2"><b>
14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Amendment and Termination&nbsp;</b></font></p>
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<font face="Arial" size="2">The Board of
Directors may at any time and from time to time amend, suspend or terminate the
Plan in whole or in part, provided however that the Board of Directors may not,
without approval of the holders of a majority of the Shares present and voting
in person or by proxy at a meeting of Shareholders of the Company, make any
fundamental changes to the Plan such as materially increase the benefits
accruing to Optionees (including repricing of Options other than pursuant to
paragraph 13, the extension of an Option Period, the reduction of the exercise
price but excluding waiver in respect of Waiting Periods and similar
conditions), or increase the number of Shares issuable pursuant to the Plan, or
materially modify the requirements as to eligibility for participation in the
Plan. No such amendment, suspension or termination may, without the consent of
the Optionee to whom Options shall theretofore have been granted, adversely
affect the rights of such Optionee.</font></p>
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&nbsp;</p>
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<font face="Arial" size="2"><b>
15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Condition for Issuance of Shares&nbsp;</b></font></p>
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<font face="Arial" size="2">The obligation
of the Company to issue Shares pursuant to the exercise of Options shall be
subject to the condition that such Shares shall have been registered with the
Securities and Exchange Commission, Washington, D.C., U.S.A. and shall have been
listed or authorized for listing upon the relevant stock exchanges.</font></p>
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<font face="Arial" size="2">6</font></p><hr>
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&nbsp;</p>
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<font face="Arial" size="2"><b>
16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Change of Control&nbsp;</b></font></p>
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<font face="Arial" size="2">Upon the
occurrence of a Change of Control Event, all Options shall become immediately
exercisable and all Waiting Periods and Holding Periods shall be waived,
provided that Optionees who are, or may be deemed to be, insiders of the Company
in accordance with any applicable law shall be subject to such law.</font></p>
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&nbsp;</p>
<p class="MsoNormal" style="text-align: justify"><font face="Arial" size="2"><b>
17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Taxes&nbsp;</b></font></p>
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<font face="Arial" size="2">The Company shall be entitled to withhold the amount of any tax attributable to
any amounts payable or Shares deliverable under the Plan, after giving notice to
the person entitled to receive such payment or delivery, and the Company may
defer making payment or delivery as to any award, if any such tax is payable,
until indemnified to its satisfaction. An Optionee may pay all or a portion of
any required withholding taxes arising in connection with the exercise of an
Option by electing to have the Company withhold Shares having a fair market
value equal to the amount required to be withheld.</font></p>
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&nbsp;</p>
<p class="MsoNormal" style="text-align: justify"><font face="Arial" size="2"><b>
18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Governing Law</b></font></p>
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<font face="Arial" size="2">The Plan and
any actions taken in connection herewith shall be governed by and construed in
accordance with the laws of Ontario and the laws of Canada applicable therein.</font></p>
<p class="MsoNormal" style="text-align: center; margin-left: .2in">
<font face="Arial" size="2">&nbsp;7</font></p>


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