Notice of Annual and Special Shareholder Meeting

to be held on May 17, 2017

April 17, 2017

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 NOVADAQ TECHNOLOGIES INC.

NOTICE OF ANNUAL AND SPECIAL SHAREHOLDER MEETING

TAKE NOTICE THAT the annual and special meeting (the Meeting) of holders of
common shares (the Shareholders) of Novadaq Technologies Inc. (the Corporation) will be
held at the offices of Stikeman Elliott LLP, 199 Bay Street, Commerce Court West, 53rd Floor,
Toronto, Ontario M5L 1B9 in the Main Boardroom on May 17, 2017 at 9:30 a.m. (Toronto time)
for the following purposes:

1. To receive the financial statements of the Corporation for the year ended
December 31, 2016, together with the report of the auditors thereon.

2. To elect eight directors of the Corporation to hold office until the

Corporations 2018 Annual General Meeting of Shareholders or until their
successors are duly elected or appointed.

3. To re-appoint KPMG (Canada) LLP as the auditors of the Corporation and to

authorize the directors of the Corporation to fix their remuneration.

4. To consider, and if deemed advisable, to pass, with or without variation, an

ordinary resolution (i) approving certain amendments to the Corporations
second amended and restated stock option plan (as amended, the Option
Plan) and (ii) reconfirming and approving all unallocated options under the
Option Plan, as it may be further amended and restated under the resolution
referred to in item 4 of the accompanying management information circular.

5. To consider, and if deemed advisable, to pass, with or without variation, an

ordinary resolution (i) approving certain amendments to the Corporations long
term incentive plan (as amended, the LTIP) and (ii) reconfirming and
approving unallocated restricted share units and deferred share units under the
LTIP, as it may be further amended and restated under the resolution referred to
in item 5 of the accompanying management information circular.

6. To transact such further or other business as may properly come before the
Meeting or any adjournment or postponement thereof.

This notice is accompanied by a form of proxy, the management information circular

and if requested, the Corporations annual report to Shareholders, which includes the audited
financial statements of the Corporation for the financial year ended December 31, 2016.
Reference should be made to the accompanying management information circular for details of
the above matters.

So that as large a representation as possible may be had at the Meeting, if you are a
registered shareholder and are unable to be present personally at the Meeting, you can submit
your proxy (a) by completing the enclosed form of proxy and depositing it with Computershare

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Investor Services Inc., Proxy Dept., 100 University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1
not later than 9:30 a.m. (Toronto time) on May 15, 2017 or 48 hours (excluding Saturdays,
Sundays and statutory holidays) before the time of the holding of any adjourned or postponed
Meeting; (b) over the Internet by going to www.investorvote.com and following the instructions
provided; or (c) telephone voting is available by following the instructions on the form of proxy
for registered shareholders.

If you are a non-registered shareholder and have received this notice and this
management information circular from your broker or another intermediary, please complete
and return the proxy or other authorization form provided to you by your broker or
intermediary in accordance with the instructions provided to you.

The board of directors of the Corporation (the Board) has fixed the close of business
on April 17, 2017 as the record date for the determination of holders of common shares entitled
to notice of the Meeting, and any adjournment or postponement thereof.

DATED at Toronto, this 17th day of April, 2017.

By order of the Board,

William Mackinnon,
Chairman of the Board

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 MANAGEMENT INFORMATION CIRCULAR
SOLICITATION OF PROXIES

This management information circular (the Circular) is furnished in connection with

the solicitation by management (the Management) of Novadaq Technologies Inc. (the
Corporation or Novadaq) of proxies to be used at the annual and special meeting of
holders of common shares (Shareholders) of the Corporation (the Meeting) to be held at
the time and place and for the purposes set out in the Notice of Annual and Special Meeting of
Shareholders accompanying this Circular (the Notice of Meeting). Unless otherwise stated,
all information contained in this Circular is presented as at April 17, 2017 and, unless otherwise
indicated, all references to $ in this Circular are to Canadian dollars.

The form of proxy accompanying this Circular is solicited by, or on behalf of,
Management of the Corporation. In addition to solicitation by mail, proxies may be solicited
personally, by telephone or by other forms of electronic communication, by directors, officers
and employees of the Corporation, none of whom have been specifically engaged for this
purpose. The costs of solicitation will be borne by the Corporation.

APPOINTMENT AND REVOCATION OF PROXIES

A Shareholder who does not wish to attend the Meeting or does not wish to vote in
person, by Internet or by telephone, has the right to appoint a person (who need not be a
Shareholder) other than the persons designated in the enclosed form of proxy to attend and to
vote and act for, and on behalf of, such Shareholder at the Meeting, and any adjournment or
postponement thereof. Such right may be exercised by striking out the names of persons
designated in the enclosed form of proxy and by inserting in the blank space provided for that
purpose the name of the desired person or by completing another proper form of proxy.

A Shareholder who wishes to be represented by proxy at the Meeting, or any

adjournment or postponement thereof, must deposit the accompanying form of proxy, duly
executed, not later than 9:30 a.m. (Toronto time) on May 15, 2017 or 48 hours (excluding
Saturdays, Sundays and statutory holidays) before the time of the holding of any adjourned or
postponed Meeting, with Computershare Investor Services Inc. as follows:

a) to Computershare Investor Services Inc., 8th Floor, 100 University Avenue, Toronto,
Ontario M5J 2Y1;

b) over the Internet by going to www.investorvote.com and following the instructions

provided; or

c) over the telephone, by following the instructions provided on the form of proxy.

The common shares represented by the proxy which is hereby solicited will be voted or
withheld from voting in accordance with the instructions of the Shareholder on any ballot that
may be called for, and, where the Shareholder whose proxy is solicited specifies a choice with
respect to any matter to be acted upon, the common shares shall be voted by the appointee
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accordingly. Where a Shareholder fails to specify a choice with respect to a matter referred to in
the Notice of Meeting, the common shares represented by such proxy will be voted for or in
favour of such matter.

The enclosed proxy confers discretionary authority upon the proxy nominee with
respect to any amendments or variations to the matters referred to in the Notice of Meeting and
any other matters which may properly come before the Meeting, or any adjournment or
postponement thereof. At the time of printing of this Circular, Management of the Corporation
knows of no such amendments, variations or other matters to come before the Meeting, other
than the matters referred to in the Notice of Meeting. However, if any other matters which at
present are not known to Management of the Corporation should properly come before the
Meeting, proxies will be voted on such matters in accordance with the best judgment of the
named proxy holders.

A Shareholder executing a proxy has the power to revoke it as to any matter on which a
vote shall not already have been cast:

(a) by depositing an instrument in writing executed by such Shareholder or by such

Shareholders attorney authorized in writing, or, if the Shareholder is a
corporation, by an officer or attorney thereof duly authorized indicating the
capacity under which such officer or attorney is signing:

(i) at the registered office of the Corporation, Novadaq Technologies Inc.,

5090 Explorer Drive, Suite 202, Mississauga, Ontario, L4W 4T9, Attention:
Corporate Secretary, at any time up to and including the last business day
preceding the day of the Meeting, or any adjournments or postponements
thereof; or

(ii) with the Chairman of the Meeting on the day of the Meeting, or any
adjournment or postponement thereof; or

(b) in any other manner permitted by law.

ADVICE TO BENEFICIAL SHAREHOLDERS

Only registered Shareholders of the Corporation or the persons they appoint as their
proxies are permitted to vote at the Meeting. However, in many cases, common shares
beneficially owned by a person (a Non-Registered Holder) are registered either:

(a) in the name of an intermediary (an Intermediary) that the Non-Registered

Holder deals with in respect of the common shares of the Corporation
(Intermediaries include, among others, banks, trust companies, securities dealers
or brokers and trustees or administrators of self-administered RRSPs, RRIFs,
TFSAs, RESPs and similar plans); or

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 (b) in the name of a depository (a Depository, such as CDS Clearing and
Depository Services Inc.) of which the Intermediary is a participant.

In accordance with the requirements of National Instrument 54-101 Communication with

Beneficial Owners of Securities of a Reporting Issuer (NI 54-101), the Corporation will have
distributed copies of the Notice of Meeting, this Circular and the form of proxy (collectively, the
Meeting Materials) to the Depositories and Intermediaries for onward distribution to Non-
Registered Holders. Intermediaries are required to forward the Meeting Materials to Non-
Registered Holders, unless a Non-Registered Holder has waived the right to receive them.
Intermediaries often use service companies to forward the Meeting Materials to Non-Registered
Holders. Generally, Non-Registered Holders who have not waived the right to receive Meeting
Materials will either:

(a) be given a form of proxy which has already been signed by the Intermediary
(typically by a facsimile, stamped signature), which is restricted as to the number of
common shares beneficially owned by the Non-Registered Holder but which is
otherwise not completed. In this case, the Non-Registered Holder who wishes to
submit a proxy should properly complete the form of proxy and submit it to the
Corporation, c/o Computershare Investor Services Inc. at the address set forth in the
Notice of Meeting; or

(b) more typically, be given a voting instruction form which is not signed by the
Intermediary and which must be properly completed and signed by the Non-
Registered Holder and returned to the Intermediary in accordance with the
instructions of the Intermediary or Depository.

The purpose of these procedures is to permit Non-Registered Holders to direct the

voting of the common shares of the Corporation they beneficially own. Should a Non-
Registered Holder wish to attend and vote at the Meeting, or any adjournment or
postponement thereof, in person (or to have another person appointed as proxy holder to
attend and vote on behalf of the Non-Registered Holder), the Non-Registered Holder should
follow the procedure in the request for voting instructions provided by or on behalf of the
Intermediary and request a form of legal proxy which will grant the Non-Registered Holders
the right to attend the Meeting, and any adjournment or postponement thereof, and vote in
person. Non-Registered Holders should carefully follow the instructions of their Intermediary
or Depository, including those regarding when and where the proxy or voting information form
is to be delivered. A Non-Registered Holder may revoke a proxy or voting information form
which has been given to an Intermediary or Depository by written notice to the Intermediary or
Depository or by submitting a proxy or voting instruction form bearing a later date. In order to
ensure that an Intermediary or Depository acts upon a revocation of a proxy or voting
information form, the written notice should be received by the Intermediary or Depository well
in advance of the Meeting.

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Notice to United States Shareholders

The solicitation of proxies by the Corporation is not subject to the requirements of

Section 14(a) of the United States Securities Exchange Act of 1934, as amended (the US Exchange
Act), by virtue of an exemption applicable to proxy solicitations by foreign private issuers as
defined in Rule 3b-4 under the US Exchange Act. Accordingly, this Circular has been prepared
in accordance with the applicable disclosure requirements in Canada. Shareholders in the
United States should be aware that such requirements are different than those of the United
States applicable to proxy statements under the US Exchange Act.

The reporting issuer does not intend to pay for intermediaries to forward to objecting
beneficial owners under NI 54-101 the proxy-related materials and Form 54-101F7 Request for
Voting Instructions Made by Intermediary, and that in the case of an objecting beneficial owner, the
objecting beneficial owner will not receive the materials unless the objecting beneficial owners
intermediary assumes the cost of delivery.

VOTING SHARES AND PRINCIPAL HOLDERS

As at the close of business on April 13, 2017, there were 57,802,861 common shares in the
capital of the Corporation issued and outstanding, being the only class of shares outstanding
and entitled to vote at the Meeting. Each common share entitles the holder thereof to one vote
on all matters to be acted upon at the Meeting.

The Corporation has fixed April 17, 2017 as the record date for the purposes of
determining holders of common shares entitled to receive notice of and vote at the Meeting.

In accordance with the provisions of the Canada Business Corporations Act, the
Corporation has prepared a list of registered holders of common shares as at the close of
business on the record date. Each holder of common shares named in the list will be entitled to
vote at the Meeting the common shares shown opposite the Shareholders name on such list.

The following firms or corporations beneficially own or exercise control or direction

over, directly or indirectly, voting shares of the Corporation carrying 10% or more of the voting
rights attaching to the total number of issued and outstanding common shares of the
Corporation:

Name Number of Shares

Percentage of
beneficially owned,
Outstanding Common Date of
controlled or
Shares of the Information
directed, directly or
Corporation
indirectly

JPMorgan Chase & Co. (1) 7,269,277 12.6% April 13, 2017

(1) Based on information contained in a Schedule 13G/A filed January 11, 2017, by JPMorgan Chase & Co. (JPMorgan), on
behalf of other persons known to have one or more of the following: (a) the right to receive dividends; (b) the power to direct
the receipt of dividends, (c) the right to receive the proceeds from the sale of the shares; or (d) the right to direct the receipt of
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 proceeds from the sale of the shares. JPMorgan has sole voting power with respect to 7,000,571 shares and sole dispositive
power with respect to 7,269,277 shares.

To the knowledge of the directors and executive officers of the Corporation, there are no
other persons, firms or corporations who beneficially own or exercise control or direction over,
directly or indirectly, voting shares of the Corporation carrying 10% or more of the voting rights
attaching to the total number of issued and outstanding common shares of the Corporation.
Information as to the shareholdings reflected above has been obtained by the Corporation solely
from SEDI and EDGAR filings and the Corporation has undertaken no investigation to
determine the existence of any other persons, firms or corporations who may beneficially own
or exercise control or direction over, directly or indirectly, voting shares of the Corporation
carrying 10% or more of the voting rights attaching to the total number of issued and
outstanding common shares of the Corporation.

MATTERS TO BE ACTED UPON BY THE SHAREHOLDERS AT THE MEETING (AS

ITEMIZED IN THE NOTICE OF MEETING)

ITEM 1: Consolidated Financial Statements

A copy of the consolidated financial statements of the Corporation for the year ended
December 31, 2016 and the report of KPMG (Canada) LLP (KPMG LLP) on the consolidated
financial statements accompanying this Circular will be submitted to Shareholders at the
Meeting. Copies of the consolidated financial statements and management discussion and
analysis for the year ending December 31, 2016 (MD&A) can also be obtained on SEDAR at
www.sedar.com, by contacting the Corporations Corporate Secretary at 5090 Explorer Drive,
Suite 202, Mississauga, Ontario, L4W 4T9, or by telephone at 905-629-3822.

ITEM 2: Election of Directors

Eight (8) nominees have been proposed by the Corporations board of directors (the
Board) for election as directors of the Corporation. The eight (8) nominees are listed
beginning on page 14. All nominees are currently directors of the Corporation. It is not
anticipated that any of the nominees will be unable to serve as directors, but if that should occur
for any reason prior to the Meeting, or any adjournment or postponement thereof, the persons
named in the enclosed form of proxy shall be entitled to vote for any other nominee(s) in their
discretion.

Each director elected will hold office until the next annual meeting of Shareholders or
until his or her successor is duly elected or appointed. The current members of the Audit
Committee, the Compensation Committee and the Corporate Governance Committee are noted
in the descriptions of the nominees beginning on page 14.

If you complete and return the attached form of proxy, your representatives at the
Meeting, or any adjournment or postponement thereof, will vote your shares FOR the election
of the nominees set out herein unless you specifically direct that your vote be withheld.

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ITEM 3: Re-Appointment of Auditor

The Board and Management propose that the firm of KPMG LLP, be re-appointed as
auditors of the Corporation to hold office until the next annual meeting of Shareholders, and
that the Board be authorized to fix the auditors remuneration. KPMG LLP was first appointed
as the auditor of the Corporation effective March 31, 2014. There have not been any reportable
events between the Corporation and KPMG LLP for the purposes of National Instrument 51-102
- Continuous Disclosure Obligations.

In order to be effective, the resolution must receive the affirmative vote of a majority of
the votes cast by Shareholders present in person or represented by proxy at the Meeting.

If you complete and return the attached form of proxy, the persons named in the
enclosed proxy will vote your shares FOR the appointment of KPMG LLP, as auditors of the
Corporation at remuneration to be fixed by the Board, unless you specifically direct that your
vote be withheld.

ITEM 4: Approval of Amendments to the Option Plan and Reconfirmation and Approval of
Unallocated Options Thereunder

At the Meeting, Shareholders will be asked to consider and, if thought advisable, pass a
resolution in the form attached as Appendix B-1 (the Option Plan Resolution) to this
Circular, approving the Shareholder Option Plan Amendments (as defined below) and the
unallocated options under the Option Plan.

Amendments to the Option Plan

The Board has determined that, in order to better align with current corporate
governance best practices, it is advisable to make certain amendments to the Option Plan. On
March 22, 2017, the Board approved certain housekeeping amendments to the Option Plan
(the Option Plan Housekeeping Amendments), which include, amongst others:

the addition of certain insider and non-employee director participation limits such
that (a) the aggregate number of common shares issuable to insiders of the
Corporation (as a group) at any point in time and issued within a one-year period
pursuant to the Option Plan and any other security based compensation
arrangement of the Corporation (including the LTIP) cannot exceed 10% of the
issued and outstanding common shares of the Corporation from time to time on a
non-diluted basis, and (b) the maximum value of common shares that may be
reserved for issuance under the Option Plan and pursuant to any other security
based compensation arrangement of the Corporation (including under the LTIP) in
any given one-year period for any individual non-employee director is $150,000,
provided that the maximum value of common shares reserved for issuance under
the Option Plan in any given one-year period for any individual non-employee
director may not exceed $100,000;

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 the addition of clarifying language around when a Termination Date will be
deemed to have occurred;
removal of the Boards discretion to extend the expiry date of any stock option past
the original expiry date;
the inclusion of references to the LTIP; and
amendments to effect various other ancillary changes to the terms of the Option
Plan to clarify, correct and make consistent in presentation various aspects of the
Option Plan.

Shareholders are being asked to approve certain other amendments to the Option Plan
that, pursuant to the terms of the Option Plan, require Shareholder approval (the Shareholder
Option Plan Amendments, and together with Option Plan Housekeeping Amendments, the
Option Plan Amendments), including (i) insertion of a new provision that requires
Shareholder approval to amend the amendment provision and/or non-employee director
participation limit provisions in the Option Plan, and (ii) changes to the amendment provision
of the Option Plan, that would provide the Board with the power and authority to approve
amendments to the Option Plan without further approval of the Shareholders to the extent such
amendment:

is for the purposes of curing any ambiguity, error or omission in the Option Plan or
to correct or supplement any provision of the Option Plan that is inconsistent with
any provision of the Option Plan;
is necessary to comply with applicable law or the requirements of the TSX;
is an amendment to the Option Plan respecting administration of the Option Plan;
alters, extends or accelerates the terms of vesting applicable to any option;
changes the termination provisions of an option or the Option Plan which does not
entail an extension beyond the original expiry date of a stock option;
is an amendment to the Option Plan of a housekeeping nature; or
does not require Shareholder approval under applicable law (including, without
limitation, the rules, regulations and policies of TSX).

Notwithstanding the foregoing, the Board would be required to obtain Shareholder

approval in order to: (i) increase the maximum number of common shares issuable under the
Option Plan, (ii) reduce the exercise price or purchase price of any stock option or cancel and
reissue any stock option, (iii) extend the term of any stock option beyond the original expiry
date, (iv) make a change to the class of persons eligible to participate under the Option Plan, (v)
make any amendment which would permit any option granted under the Option Plan to be
transferable or assignable other than by will or under succession laws (estate settlement), (vi)
increase the participation limits relating to the grant of options to non-employee directors and
insiders, or (vii) amend the amending provision of the Option Plan.

The Option Plan, which following the Option Plan Amendments, will be referred to as
the Third Amended and Restated Option Plan, is described below under Summary of
Option Plan. A copy of the Option Plan, after giving effect to the Option Plan Amendments, is
attached as Appendix B-2 to this Circular.

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Unallocated Options

The policies of the Toronto Stock Exchange (the TSX) require that every three (3) years
after the institution of a security-based compensation arrangement which does not have a fixed
number of securities issuable, as is the case with the Option Plan, all unallocated options must
be reconfirmed and approved by the Corporations Shareholders.

The maximum number of common shares that may be issued under the Option Plan,
together with any other security based compensation arrangement of the Corporation
(including the LTIP), may not exceed 10% of the number of issued and outstanding common
shares of the Corporation from time to time on a non-diluted basis. As of April 13, 2017, the
Corporation has 57,802,861 common shares issued and outstanding and has granted options to
acquire 4,041,618 common shares (representing approximately 6.99% of the issued and
outstanding common shares of the Corporation) under the Option Plan. Additionally, under the
LTIP, the Corporation has granted: (i) restricted share units to acquire 240,314 common shares
(representing approximately 0.42% of the issued and outstanding common shares of the
Corporation), and (ii) deferred share units to acquire 62,800 common shares (representing
approximately 0.11% of the issued and outstanding common shares of the Corporation). Based
on the common shares issued and outstanding as of April 13, 2017, there remain 1,435,555
common shares (representing approximately 2.48% of the issued and outstanding common
shares of the Corporation) that have not been allocated under the Option Plan or LTIP.

The Option Plan was most recently confirmed and approved by Shareholders of the
Corporation at the annual and special Shareholder meeting held on May 21, 2014. Accordingly,
at the Meeting, Shareholders will be asked to consider and, if thought advisable, approve the
unallocated options under the Option Plan. If Shareholders pass the Option Plan Resolution at
the Meeting, the Corporation will subsequently be required to seek the approval of
Shareholders no later than May 17, 2020 with respect to the unallocated options in existence
under the Option Plan at that time.

If Shareholders do not approve the Option Plan Resolution, (i) the Corporation will not
be permitted to grant further options under the Option Plan until such time as the required
Shareholder approval may be obtained and (ii) all options that have already been allocated and
granted under the Option Plan as of the date of the Meeting that have not yet been exercised
will continue unaffected in accordance with their current terms.

Summary of Option Plan

The following is a summary of the Option Plan after giving effect to the Option Plan
Amendments.

The Option Plan is administered by the Board and the committees of the Board to which
it may delegate authority. The Board is responsible for determining the terms relating to each
option, including the number of common shares subject to each option, the exercise price and
the expiration date of each option, and the extent to which each option is exercisable during the
term of the option. Subject to all applicable laws, any employee, senior officer, director or

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consultant of the Corporation or any affiliate of the Corporation is considered an eligible person
under the Option Plan. Pursuant to the Option Plan, the price at which the options are granted
is equal to the volume weighted average trading price of the common shares on the exchange
where they are listed for the five (5) trading days immediately preceding the date of grant or
such greater amount as the Board may determine, provided, however, that the exercise price of
the options shall not be less than the minimum exercise price required by applicable rules of the
TSX. Options generally vest over a period of three (3) years and must be exercised no later than
ten (10) years from the date of the grant.

Certain restrictions on grants apply, including that the number of common shares
reserved for issuance under the Option Plan and any other securities-based compensation
arrangements, including the LTIP, shall not exceed 10% of the issued and outstanding common
shares of the Corporation from time to time on a non-diluted basis. Additionally: (a) the
aggregate number of common shares issuable to insiders of the Corporation (as a group) at any
point in time and the issuance of common shares to insiders of the Corporation (as a group)
within a one-year period pursuant to the Option Plan and any other security based
compensation arrangement of the Corporation (including the LTIP) cannot exceed 10% of the
issued and outstanding common shares of the Corporation from time to time on a non-diluted
basis, and (b) the maximum value of common shares that may be reserved for issuance under
the Option Plan and pursuant to any other security based compensation arrangement of the
Corporation, including under the LTIP, in any given one-year period for any individual non-
employee director is $150,000, provided that the maximum value of common shares reserved
for issuance under the Option Plan in any given one-year period for any individual non-
employee director may not exceed $100,000. The number of shares that are reserved for issuance
under the Option Plan that have vested and been exercised, were not exercised within the
exercise period, or were forfeited, surrendered, cancelled or otherwise terminated prior to the
delivery of the shares pursuant to the grant of options under the Option Plan shall, in each case,
automatically become available to be made and subject to new grants under the Option Plan.

The Corporation does not provide financial assistance to option holders in connection
with their participation in the Option Plan. Unless otherwise provided for, upon an option
holders employment with the Corporation being terminated by the Corporation, whether with
cause or without cause, or upon the option holders resignation (other than for retirement), the
expiry date of any vested stock option granted to him or her shall be the earlier of (i) the expiry
date shown on the relevant notice of grant and (ii) the date that is thirty (30) days following the
date such option holder ceased to be an employee of the Corporation; all stock options granted
that are outstanding but not vested on such date of termination or resignation will immediately
terminate. If the option holder dies, retires, ceases to be a director (in the case where an option
holder is not an employee or consultant of the Corporation), or ceases to be eligible under the
Option Plan due to disability, the expiry date of any vested stock option granted to him or her is
the earlier of (i) the expiry date shown on the relevant notice of grant or (ii) the date that is one
hundred and eighty (180) days following the date such option holder retired or ceased to be a
director (as the case may be). All stock options granted that are outstanding but not vested on
such date will immediately terminate. Each option is non-transferable except by will or by laws
of succession in the domicile of the deceased option holder. Subject to certain limitations, if the
expiry date of any vested stock option falls on, or within nine (9) business days immediately
9
following a date upon which an eligible person is prohibited from exercising such stock option
due to a black-out period or other trading restriction imposed by the Corporation, then such
stock options will automatically be deemed to, without any further act or formality, expire
instead on the tenth (10th) business day after the end of the relevant black-out period.

Subject to any necessary regulatory approval, the Board may, in its discretion, amend
the Option Plan and the terms and conditions of any option previously granted under the
Option Plan, without further Shareholder approval, provided that such amendment does not
require shareholder approval under applicable law (including without limitation, the rules,
regulations and policies of TSX) and to the extent such amendment:

(a) is for the purposes of curing any ambiguity, error or omission in the Option Plan or
to correct or supplement any provision of the Option Plan that is inconsistent with
any provision of the Option Plan;

(b) is necessary to comply with applicable law or the requirements of the TSX;

(c) is an amendment to the Option Plan respecting administration of the Option Plan;

(d) alters, extends or accelerates the terms of vesting applicable to any option;

(e) changes the termination provisions of an option or the Option Plan which does not
entail an extension beyond the original expiry date of a stock option;

(f) is an amendment to the Option Plan of a housekeeping nature; or

(g) does not require Shareholder approval under applicable law (including, without
limitation, the rules, regulations and policies of TSX).

Notwithstanding the foregoing, the Board shall be required to obtain shareholder

approval in order to: (i) increase the maximum number of shares issuable under the Option
Plan, (ii) reduce the exercise price or purchase price of any option or cancel and reissue any
option, (iii) extend the term of any option beyond the original expiry date, (iv) make a change to
the class of persons eligible to participate under the Option Plan, (v) make any amendment
which would permit any option granted under the Option Plan to be transferable or assignable
other than by will or under succession laws (estate settlement), (vi) increase the participation
limits of a non-employee director or insiders, including, but not limited to, the grant to any
individual non-employee director of more than $100,000 worth of options under the Option
Plan in any given one year period, or (vii) amend the amendment provision in the Option Plan.

Vote Required

The full text of the Option Plan Resolution to approve amendments to, and the
unallocated Options under, the Stock Option Plan is set out in Appendix B-1 to this Circular.
Pursuant to the policies of the TSX, the Stock Option Plan Resolution must be approved by a
majority of votes cast by Shareholders, in person or by proxy, at the Meeting.
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 The Board recommends the Shareholders vote FOR the approval of the Option Plan
Resolution.

In absence of a contrary instruction, the persons designated by management of the

Corporation in the enclosed form of proxy intend to vote FOR the Option Plan Resolution.

ITEM 5: Approval of Amendments to the LTIP and Reconfirmation and Approval of

Unallocated Units Thereunder

At the Meeting, Shareholders will be asked to consider and, if thought advisable, pass a
resolution in the form attached as Appendix C-1 (the LTIP Resolution) to this Circular,
approving the Shareholder LTIP Amendments (as defined below) and the unallocated Units
under the LTIP.

Amendments to the LTIP

The Board has determined that, in order to better align with current corporate
governance best practices, it is advisable to make certain amendments to the LTIP. On
March 22, 2017, the Board approved certain housekeeping amendments to the LTIP (the
LTIP Housekeeping Amendments), which include, amongst others:

adding a definition of non-employee directors;

removal of Board discretion to accelerate any unvested restricted share units
(RSUs) in the event a RSU participant ceases to be an eligible person under the
LTIP for any reason, including, without limitation, as a result of resignation,
termination, retirement, disability or death (see Section 5.6 of the LTIP);
updating references to the Option Plan; and
amendments to effect various other ancillary changes to the terms of the LTIP to
clarify, correct and make consistent in presentation various aspects of the LTIP.

The Board is asking the Shareholders to approve certain other amendments to the LTIP
that, pursuant to the terms of the LTIP, require Shareholder approval (the Shareholder LTIP
Amendments, and together with LTIP Housekeeping Amendments, the LTIP
Amendments), including:

changes to the amendment provision of the LTIP to (i) add references to other
applicable securities exchanges (in addition to the TSX) (see Section 3.3 of the LTIP),
(ii) require Shareholder approval to cancel and reissue any RSUs or deferred share
units (DSUs) (see Section 3.3(3)(g)(ii) of the LTIP) , and (iii) add additional
language to ensure, for the avoidance of doubt, that Shareholder approval is
required to amend the amendment provision, the number of common shares
issuable under the LTIP, or the non-employee director and the insider participation
limits (See Section 3.3(4) of the LTIP); and
adding clarifying language to ensure that the grant of common shares to non-
employee directors, as a group, cannot exceed 1% of the Corporations issued and
11
 outstanding common shares nor can any individual non-employee director be
granted more than $150,000 worth of common shares annually pursuant to the LTIP
and any other share compensation or incentive arrangements of the Corporation,
including the Option Plan (see Section 3.10(1)(c)(iii) of the LTIP).

The LTIP, which following the LTIP Amendments, will be referred to as the Amended
and Restated Long Term Incentive Plan, is described below under Summary of LTIP. A
copy of the LTIP, after giving effect to the LTIP Amendments, is attached as Appendix C-2 to
this Circular.

Unallocated Units

As with the Option Plan, the policies of the TSX require that every three (3) years after
the institution of a security-based compensation arrangement which does not have a fixed
number of securities issuable, as is the case with the LTIP, all unallocated units must be
reconfirmed and approved by the Corporations Shareholders. The maximum number of
common shares that may be issued under the LTIP, together with any other security based
compensation arrangement of the Corporation (including the Option Plan), may not exceed 10%
of the number of issued and outstanding common shares of the Corporation from time to time
on a non-diluted basis. As of April 13, 2017, the Corporation has 57,802,861 common shares
issued and outstanding and under the LTIP, has granted: (i) RSUs to acquire 240,314 common
shares (representing approximately 0.42% of the issued and outstanding common shares of the
Corporation), and (ii) DSUs to acquire 62,800 common shares (representing approximately
0.11% of the issued and outstanding common shares of the Corporation). Additionally, under
the Option Plan, the Corporation has granted options to acquire 4,041,618 common shares
(representing approximately 6.99% of the issued and outstanding common shares of the
Corporation). Based on the common shares issued and outstanding as of April 13, 2017, there
remain 1,435,555 common shares (representing approximately 2.48% of the issued and
outstanding common shares of the Corporation) that have not been allocated under the Option
Plan or LTIP.

The LTIP was most recently confirmed and approved by Shareholders of the
Corporation at the annual and special Shareholder meeting held on May 13, 2015 and is
therefore not subject to a mandatory re-confirmation and approval by Shareholders at the
Meeting. Notwithstanding the foregoing, the Corporation is seeking amendment of the LTIP
and reconfirmation and approval of unallocated entitlements under the LTIP by the
Shareholders at the Meeting to ensure consistent alignment of timing and terms of both the
Option Plan and LTIP. Accordingly, at the Meeting, Shareholders will be asked to consider and,
if thought advisable, approve the amendment of the LTIP and the unallocated Units under the
LTIP. If Shareholders pass the LTIP Resolution at the Meeting, the Corporation will
subsequently be required to seek approval of its Shareholders no later than May 17, 2020 with
respect to the unallocated Units in existence under the LTIP at that time.

If Shareholders do not approve the LTIP Resolution, (i) the Corporation will not be
permitted to grant further Units under the LTIP until such time as the required Shareholder
approval may be obtained and (ii) all Units that have already been allocated and granted under
12
the LTIP as of the date of the Meeting that have not yet been settled will continue unaffected in
accordance with their current terms.

Summary of LTIP

The following is a summary of the LTIP after giving effect to the LTIP Amendments.

The LTIP is an incentive based equity compensation plan that provides for the grant of
RSUs and DSUs (together with RSUs, Units). The RSUs may be granted to any director,
officer, employee or consultant of the Corporation or any of its affiliates and any such persons
personal holding company, as designated by the Board in a resolution (the RSU Participants)
upon the terms and conditions set forth in a grant agreement. The DSUs may be granted to any
director of the Corporation who has been designated by the Corporation for participation in the
LTIP and who has agreed to participate in the LTIP (the DSU Participants, together with the
RSU Participants, the Participants), upon the terms and conditions set forth in a grant
agreement. Subject to Board approval, once each financial year, a DSU Participant may elect to
be paid up to 100% of his or her annual board retainer in the form of DSUs, with the remaining
balance (if any) being paid in cash.

The LTIP is intended to advance the interests of the Corporation by: (i) providing
Participants with additional incentives; (ii) rewarding the performance of the Participants
through the issuance of the Units; (iii) increasing the proprietary interest of the Participants in
the success of the Corporation; (iv) encouraging the Participants to remain with the Corporation
or its affiliates; and (v) attracting new directors, employees, officers and consultants to the
Corporation or its affiliates.

The LTIP is administered by the Board and the Compensation Committee. The Board is
responsible for, among other things, granting the RSUs to the RSU Participants, granting the
DSUs to the DSU Participants, determining the terms of such grants, and interpreting the LTIP
and all agreements entered into thereunder. Pursuant to the LTIP, the number of RSUs
(including fractional RSUs) granted at any particular time is calculated by dividing (i) the dollar
amount of such grant by (ii) the market value of a common share on the applicable grant date,
which is equal to the volume weighted average trading price of all common shares traded on
the NASDAQ Global Market (or other exchange where the common shares are listed) for the
five (5) trading days immediately preceding such date (the Market Value). The number of
DSUs (including fractional DSUs) granted at any particular time will be calculated by dividing
(i) the dollar amount of such grant by (ii) the Market Value of a common share on the applicable
grant date.

The RSUs vest 1/3 on each of the first, second and third anniversary dates of the original
grant, provided that the RSU Participant is continuously employed by or in service with the
Corporation, or any of its affiliates, until the respective vesting date. The Board has the option
to add any performance-based vesting criteria at its discretion. After the RSUs have vested, a
Canadian RSU Participant may deliver a settlement notice to the Corporation in respect of any
or all vested RSUs it desires to settle by December 31st of the third calendar year following the
year in which the services giving rise to the RSUs were rendered. U.S. RSU Participants must
13
settle any vested RSUs within seventy (70) days after such RSUs became vested. The
Corporation may elect to settle the vested RSUs in cash, in common shares issued from
treasury, or a combination thereof. Since the form of settlement (i.e. cash and/or common
shares) is at the option of the Corporation, all RSUs must settle no later than December 31 in the
third calendar year following the year in which the services giving rise to the RSUs were
rendered.

The DSUs vest on the DSU termination date, which is the date on which the DSU
Participant ceases to be a director and, if applicable, an employee of the Corporation for any
reason. After the DSUs have vested, Canadian DSU Participants will deliver to the Corporation
a DSU settlement notice to elect to settle all DSUs in such DSU Participants notional account for
cash, common shares issued from treasury, or a combination thereof. U.S. DSU Participants
shall settle any vested DSUs within 70 days on the date from such DSU Participant incurs a
separation from service within the meaning of Section 409A of U.S. Internal Revenue Code of
1986 (Section 409A). In the event that a Participants Units are set to expire during a black-out
period, such expiry date shall be automatically extended to the tenth (10th) business day after
the expiration of the black-out period, provided that in the case of a U.S. Participant, in no event
shall such extension result in the settlement of the Units beyond the latest date permitted by
Section 409A.

The maximum number of common shares which may be reserved for issuance under the
LTIP and pursuant to any other security based compensation arrangement of the Corporation
(including the Option Plan) cannot exceed 10% of the issued and outstanding common shares of
the Corporation from time to time on a non-diluted basis (representing an aggregate of
5,780,286 common shares as at April 13, 2017), provided that the Board may make appropriate
adjustments in the common shares issuable or amounts payable to preclude a dilution or
enlargement of the benefits under the LTIP, subject to Shareholder approval and any other
required approval from any stock exchange or regulatory authority. The aggregate number of
common shares issuable to insiders of the Corporation (as a group) at any point in time and the
issuance of common shares to insiders of the Corporation (as a group) within a one-year period
pursuant to the LTIP and any other security based compensation arrangement of the
Corporation (including the Option Plan) cannot exceed 10% of the issued and outstanding
common shares of the Corporation from time to time on a non-diluted basis.

The number of common shares subject to any grants of Units that have vested and been
settled, or have expired or been forfeited, surrendered, cancelled or otherwise terminated prior
to the delivery of the common shares pursuant to a grant of the Units shall, in each case,
automatically become available to be made and subject to new grants under the LTIP.
Additionally, the number of common shares subject to grants of Units that the Corporation
settles in cash in lieu of settlement in common shares shall automatically become available to be
made the subject of new grants under the LTIP.

Under the LTIP, the Corporation may not provide financial assistance to Participants in
connection with the exercising of Units by Participants. If a RSU Participant ceases to be an
eligible person under the LTIP for any reason, including, without limitation, as a result of his or
her resignation, voluntary or involuntary termination, retirement, disability, or death, any

14
unvested RSUs held by such RSU Participant shall expire. Each DSU Participant is entitled to
terminate his or her participation in the LTIP by filing a termination notice with the designated
officer of the Corporation. Thereafter, any portion of such DSU Participants annual board
retainer payable and all subsequent annual board retainers shall be paid in cash (except that for
U.S. DSU Participants, such termination shall not take effect until the immediately following
calendar year). The rights or interests of a Participant under the LTIP may not be assigned,
encumbered, pledged, transferred or alienated in any way, except to the extent that certain
rights may pass to a beneficiary or legal representative upon death of a Participant, by will or
by the laws of succession and distribution.

Subject to any necessary regulatory approval, the Board may, in its sole discretion,
suspend or terminate the Plan at any time or amend the terms and conditions of the Plan or of
any Units granted under the Plan and any grant agreement, without Shareholder approval,
provided that such amendment will not adversely alter or impair any Units previously granted
except as permitted by the terms of the LTIP; will be in compliance with applicable law; and
will be subject to Shareholder approval, where required by law, the requirements of TSX or the
LTIP. For example, the Board may approve amendments relating to the Plan or the Units,
without Shareholder approval, to the extent such amendment:

(a) is for the purposes of curing any ambiguity, error or omission in the Plan;

(b) is necessary to comply with applicable law or the requirements of the TSX or any
other applicable securities exchange;

(c) is an amendment to the Plan respecting administration and eligibility for

participation under the Plan;

(d) alters, extends or accelerates the terms of vesting applicable to any Units;

(e) changes the termination provisions of a Unit or the Plan which does not entail an
extension beyond the original expiry date of a Unit;

(f) is an amendment to the Plan of a housekeeping nature; or

(g) does not require Shareholder approval under applicable law (including, without
limitation, the rules, regulations and policies of the TSX or any other applicable
securities exchange).

Notwithstanding the foregoing, the Board shall be required to obtain Shareholder

approval in order to: (i) amend the number of common shares issuable under the LTIP;
(ii) cancel and reissue any Units; (iii) add any form of financial assistance by the Corporation for
the exercise of a Unit; (iv) make any amendment that results in a material or unreasonable
dilution in the number of outstanding common shares or any material benefit to a Participant;
(v) extend the time for which a Unit expires beyond its original expiry date; (vi) amend the
provisions in the LTIP on participation limits, assignment and amendment; (vii) change the
class of eligible Participants to the LTIP which would have the potential of broadening or
15
increasing participation by insiders of the Corporation, or (viii) increase the participation limits
of non-employee directors (individually or as a group) or insiders.

Vote Required

The full text of the LTIP Resolution to approve amendments to, and the unallocated
Units under, the LTIP is set out in Appendix C-1 to this Circular. Pursuant to the policies of
the TSX, the LTIP Resolution must be approved by a majority of the votes cast by Shareholders,
in person or by proxy, at the Meeting.

The Board recommends that Shareholders vote FOR the approval of the LTIP
Resolution.

In the absence of a contrary instruction, the persons designated by management of the

Corporation in the enclosed form of proxy intend to vote FOR the LTIP Resolution.

BOARD OF DIRECTORS NOMINEES

Majority Voting

Effective April 14, 2014, the Board adopted an amended and restated majority voting
policy. In an uncontested election of directors of the Corporation, each director shall be elected
by the vote of a majority of the shares represented in person or by proxy at the Shareholders
meeting convened for such election of directors. If any nominee for director receives a greater
number of votes withheld from his or her election than votes for such election, that director
shall immediately tender his or her resignation to the Chairman of the Board following the
meeting.

The Corporate Governance Committee shall consider any such offer of resignation and
recommend to the Board whether or not to accept the resignation. In its deliberations, the
Corporate Governance Committee may consider any stated reasons as to why Shareholders
withheld votes from the election of the relevant director, the length of service and the
qualifications of the director whose resignation has been tendered, such directors contributions
to the Corporation, the Corporations corporate governance policies, available alternatives to
cure the underlying cause of the withheld votes, the overall composition of the Board (including
the current mix of skills and attributes of the Board), whether accepting the resignation would
cause the Corporation to fail to meet any applicable listing, statutory or regulatory
requirements, and any other factors that the members of the Corporate Governance Committee
consider relevant.

The Board shall act on the Corporate Governance Committees recommendation within
ninety (90) days following the applicable Shareholders meeting, after considering the factors
identified by the Corporate Governance Committee and any other factors that the members of
the Board consider relevant. The Board is expected to accept the resignation except in situations
where extenuating circumstances would warrant the director continuing to serve on the Board.
The resignation of a director will be effective when accepted by the Board. Any director who

16
tenders his or her resignation pursuant to this policy will not participate in the Corporate
Governance Committees consideration regarding whether to recommend acceptance to the
Board or the Boards consideration regarding whether to accept the tendered resignation.

Following the Boards decision on the resignation, the Board shall promptly disclose, via
press release, a copy of which shall be concurrently delivered to the TSX, its decision regarding
whether to accept or reject the directors resignation. Should the Board decline to accept the
resignation, it shall fully state in the press release its reasoning behind such decision.

Subject to any applicable corporate law restrictions or requirements, if a resignation is

accepted, the Board may leave the resultant vacancy unfilled until the next annual general
meeting. Alternatively, it may fill the vacancy through the appointment of a new director whom
the Board considers to merit the confidence of the Shareholders, or it may call a special meeting
of Shareholders at which one or more Management nominees would be presented a to fill the
vacant position or positions, as applicable.

Nominees

The biographies and notes below set out, in respect of each nominee to the Board, the
name and municipality of residence of each person proposed to be nominated for election as a
director, the period or periods during which the nominee has served as a director of the
Corporation, the nominees principal occupation and all other positions with the Corporation
and any affiliate thereof now held by the nominee, if any, and the number of common shares
beneficially owned by the nominee or over which the nominee exercises control or direction (in
all cases, whether directly or indirectly) as of April 13, 2017. The statement as to share
ownership, control and direction is, in each instance, based upon information furnished by said
nominee.

17
LISA COLLERAN
Ms. Colleran was Chief Executive Officer and President of
LifeCell Corporation. Under her leadership, LifeCell, in
partnership with surgeons, drove changes in treatment
paradigms for numerous procedures, resulting in
improvement in clinical outcomes. During her tenure at
LifeCell, revenues increased from U.S.$25 million to U.S.$400
million and the company was involved in several
Director transactions. Prior to LifeCell, Ms. Colleran spent over
Residence: Basking Ridge, New Jersey, twenty (20) years at Baxter Healthcare in various commercial
United States
Occupation: Corporate Director and general management roles. She is the founder of LNC
Committee Memberships: Nil Advisors and currently serves on the board of directors of
Director Since: January 2017
Establishment Labs and Ariste Medical.
Number of Shares beneficially owned,
controlled or directed, directly or
indirectly: Nil

ANTHONY GRIFFITHS
Mr. Griffiths is currently an independent business consultant
and corporate director. Mr. Griffiths became the Chairman
of Mitel Corporation, a telecommunications company, in
1987, and also assumed the positions of President and Chief
Executive Officer in addition to that of Chairman from 1991
to 1993. Mr. Griffiths is also a director of Fairfax Financial
Holdings Limited and Fairfax India Holdings Corporation.

Notwithstanding the maximum director term limit of ten (10)

years and mandatory retirement age of 72 set forth in the
board tenure policy, the Governance Committee has, in
Director
accordance with the terms of such policy, recommended that
Residence: Toronto, Ontario, Canada the Board extend Mr. Griffiths term past the mandatory
Occupation: Corporate Director retirement age, as the Corporation continues its board
Committee Memberships: Chair of
Compensation Committee, Member of revitalization and CEO transition process. Mr. Griffiths
Governance Committee. brings guidance and continuity and acts as an invaluable
Director Since: June 2002 resource to new directors through this transition process. See
Number of Shares beneficially owned,
controlled or directed, directly or Board Tenure Policy description in Appendix A hereto.
indirectly: 27,981

18
KAREN A. LICITRA
Ms. Licitra most recently served as Corporate Vice President
Worldwide Government Affairs & Policy of Johnson &
Johnson before retiring in August 2015. Prior to her role in
governmental affairs, she was Worldwide Chairman, Global
Medical Solutions Group within Johnson & Johnsons
Medical Device and Diagnostics segment. She also led the
Medical Device & Diagnostics center of excellence for
regulatory affairs. Before her rise to Worldwide Chairman,
Director Ms. Licitra was Company Group Chairman for Johnson &
Residence: Stuart, Florida, United States
Occupation: Corporate Director
Johnson and Worldwide Franchise Chairman for Ethicon
Committee Memberships: Member of Endo-Surgery, Inc. and Johnson & Johnson Medical, Canada.
Compensation Committee She is a member of the board of directors of SI-Bone, Inc. and
Director Since: October 2016
Number of Shares beneficially owned, was a member of the Board of Trustees for the Saint Peters
controlled or directed, directly or Healthcare System. Ms. Licitra also served as Chair Emeritus
indirectly: Nil for the Campaign to End Obesity, which advances U.S.
national policy and platforms to combat obesity, as well as
Chair of the Campaigns Advisory Council. She was named
to Fortunes 50 Most Powerful Women in Business list in
2012.

WILLIAM A. MACKINNON
Mr. Mackinnon was Chief Executive Officer of KPMG
(Canada) LLP from April 1999 until his retirement in
December 2008. Mr. Mackinnon joined KPMG (Canada) LLP
in 1971, became a partner in 1977, the Toronto Managing
Partner in 1988 and the Greater Toronto Managing Partner in
1992. He obtained the Fellow Chartered Accountant
designation from the Institute of Chartered Accountants of
Ontario in 1994 and, during the period between 1999 and
2002, became a member of the board of directors of each of
KPMG Canada, KPMG International and KPMG Americas.
He is an active volunteer and currently serves as a member
of the board of directors of the Toronto Community
Chairman of the Board
Residence: Toronto, Ontario, Canada Foundation and Roy Thomson Hall. Mr. Mackinnon is also a
Occupation: Corporate Director director of Telus Corp., Pioneer Petroleum, and the Public
Committee Memberships: Chair of the
Audit Committee
Service Pension Investment Board. Mr. Mackinnon holds a
Director since: May 2009 Bachelor of Commerce from the University of Manitoba.
Number of Shares beneficially owned,
controlled or directed, directly or
indirectly: Nil

19
RICK MANGAT
Mr. Mangat co-founded NOVADAQ in April of 2000 and is a
co-inventor of the SPY Imaging Systems. The research
element of his PhD thesis (Pharmacology and Therapeutics),
performed at the National Research Council of Canada
(Institute for Biodiagnostics), formed the foundation for SPY
Imaging and related intellectual property. Mr. Mangat led
the research, development and commercialization teams at
NOVADAQ from bench-top through commercial use of the
NOVADAQs fluorescence imaging systems. Mr. Mangat,
former Senior Vice President of Sales and Marketing of the
Director, President & CEO
Corporation, succeeded Dr. Menawat as President and CEO
Residence: Aurora, Ontario, Canada
Occupation: Director, President & CEO, on July 6, 2016. Mr. Mangat was appointed as a director of
Novadaq Technologies Inc. the Corporation on February 28th, 2017. Mr. Mangat holds a
Committee Memberships: None
Director Since: February 2017
Bachelor of Science from the University of Toronto and a
Number of Shares beneficially owned, PhD from the University of Manitoba.
controlled or directed, directly or
indirectly: 284,055

PATRICE MERRIN
Ms. Merrin is a corporate director and is currently a non-
executive director of Glencore PLC, Stillwater Mining
Company and Kew Media Group Inc. Ms. Merrin was
Chairman of the Board of CML HealthCare Inc., a leading
provider of medical laboratory testing services, from 2011 to
2013, having served as a director since 2008. She was a
director of Ornge, the Province of Ontario's air ambulance
and medical transport service, from 2012 to 2015. Ms. Merrin
served as President, CEO and Director of Luscar Ltd., then
owned equally by Sherritt International Corporation and
Ontario Teachers Pension Plan Board, from 2005 to 2006,
prior to which she served as Executive Vice-President and
Director
Residence: Toronto, Ontario, Canada Chief Operating Officer of Sherritt International from 1999 to
Occupation: Corporate Director 2004. She co-chairs the Leadership Council of Perimeter
Committee Memberships: Chair of
Governance Committee and Member of
Institute for Theoretical Physics as well as its Emmy Noether
Audit Committee Circle which aims to support and fund women in physics
Director Since: March 2015 and mathematical physics at Perimeter. Ms. Merrin holds a
Number of Shares beneficially owned,
controlled or directed, directly or BA from Queen's University and completed the Advanced
indirectly: 2,000 Management Programme at INSEAD.

20
THOMAS WELLNER
Mr. Wellner is the President and CEO of Revera Inc., which
is a leading provider of seniors accommodation, care and
services, with responsibility for a network of 50,000
employees, 500 sites across Canada, the U.S. and the UK. Mr.
Wellners holding company, WellCap Advisors Limited,
provides strategic guidance to a number of clients and also
invests in healthcare and technology companies. Prior to his
role at Revera, Mr. Wellner was co-CEO of LifeLabs,
Canadas largest laboratory services company, where he was
responsible for leading the integration of CML HealthCare
Inc. into the LifeLabs organization. Mr. Wellner was
President and Chief Executive Officer of CML Healthcare
Director
Residence: Toronto, Ontario, Canada
Inc. where he led the company through a transformational
Occupation: President and CEO, Revera re-assessment, culminating in both the signing of a $1.2B
Inc.; President, WellCap Advisors, Ltd. transaction to crystalize $300,000,000 in shareholder value as
Committee Memberships: Member of
Audit Committee and Governance well as the merger into LifeLabs. He has also worked with
Committee private equity investors on a startup as President and CEO of
Director Since: May 2014
Number of Shares beneficially owned,
Therapure Biopharma. He currently serves on the boards of
controlled or directed, directly or Cipher Pharmaceuticals, Freshbooks, Inc. and Atlantic
indirectly: 10,300 Healthcare Plc. Mr. Wellner holds a Bachelor of Science with
Honours in Life Sciences from Queens University and he
holds an Institute of Corporate Directors, ICD.D designation
from the Rotman School of Business.

21
ROBERT S. WHITE
Mr. White is a medical technology industry veteran with
over twenty-five (25) years of leadership experience gained
through numerous positions with Medtronic, Instromedix-
LifeWatch, ALARIS Medical Systems, Eli Lilly and General
Electric. Mr. White joined Entellus Medical Inc. as President
and Chief Operating Officer in November 2014 and was
promoted to President and Chief Executive Officer in April
of 2015, along with being appointed to its board of directors.
Previously, Mr. White was the President and Chief Executive
Officer of TYRX, a privately-held company commercializing
innovative, implantable combination drug/device products
designed to reduce surgical site infections, until it was
Director
Residence: Plymouth, Minnesota, United acquired by Medtronic in March 2014. Prior to joining TYRX,
States Mr. White served as President of Medtronic Kyphon
Occupation: President, CEO and director of
Entellus Medical Inc.
following the U.S.$3.9 billion acquisition of the spinal
Committee Memberships: Member of treatment business. During his time with Medtronic, Mr.
Compensation Committee White also served as President of Physio Control, Vice
Director Since: August 2014
Number of Shares beneficially owned, President of Corporate Development, and Vice President of
controlled or directed, directly or U.S. Sales and Global Marketing where he was responsible
indirectly: Nil
for all commercial operations for the Medtronic Cardiac
Rhythm Management business. Mr. White started his career
with General Electric and joined Eli Lilly and Company in
1989. Mr. White serves on the boards of directors of Entellus
Medical Inc., AtriCure, Inc. and HyperBranch Medical
Technology, Inc. Mr. White holds a B.S. in Aerospace
Engineering from the University of Missouri-Rolla and a
M.B.A. from Cornell Universitys Johnson Graduate School
of Management.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

Mr. Griffiths was a director of AbitibiBowater Inc. until June 2010. The company and
certain of its U.S. and Canadian subsidiaries filed for protection in Canada under the Companies
Creditors Arrangement Act (CCAA) and in the United States under Chapter 11 of the United
States Bankruptcy Code in April 2009. On December 9, 2010, the company emerged from
creditor protection under the CCAA in Canada and Chapter 11 in the United States.

Mr. Griffiths was a director of PreMD Inc. until February 2010, and, in connection with
the voluntary delisting of the companys shares from the TSX, cease trade orders were issued in
April 2009 requiring all trading in, and all acquisitions of, securities of the company to cease
permanently due to the companys failure to file continuous disclosure materials required by
Ontario securities law. The cease trade orders are still in effect.

22
 Mr. Griffiths was a director of Jaguar Mining Inc. from May 2004 to June 2013. On
December 23, 2013, that company commenced proceedings under the CCAA to complete a
recapitalization and financing transaction. Trading of that companys common shares was
suspended on December 23, 2013 and those shares were delisted from the TSX on February 10,
2014. On February 7, 2014, the affected unsecured creditors of that company and the Ontario
Superior Court of Justice approved that companys plan of compromise and arrangement
pursuant to the CCAA, which was implemented effective April 22, 2014.

Other than as noted above, no director or executive officer of the Corporation is, or
within the past ten (10) years before the date of this Circular has (i) been a director, chief
executive officer or chief financial officer of a company that was subject to a cease trade order or
similar order or an order that denied the company access to any exemption under securities
legislation for a period of more than thirty (30) consecutive days; or (ii) been a director of a
company that, while the nominee was acting in that capacity, made a proposal under legislation
relating to bankruptcy or insolvency or was subject to or instituted any proceedings,
arrangement or compromise with creditors or had a receiver, trustee or receiver manager
appointed to hold its assets; or (iii) was subject to a cease trade order or similar order or an
order that denied the company access to any exemption under securities legislation for a period
of more than thirty (30) consecutive days that was issued after the director or executive officer
ceased to be a director, chief executive officer or chief financial officer and which resulted from
an event that occurred while that person was acting in that capacity.

STATEMENT ON CORPORATE GOVERNANCE PRACTICES

The statement on corporate governance practices prepared by the Corporate

Governance Committee is attached hereto as Appendix A.

COMPENSATION DISCUSSION AND ANALYSIS

INTRODUCTION

This compensation discussion and analysis (CD&A) describes and explains the
Corporations current policies and practices with respect to the compensation of its named
executive officers, being its Chief Executive Officer (CEO), the former Chief Executive
Officer, Chief Financial Officer (CFO) and the three most highly compensated executive
officers other than the current CEO, former CEO and CFO (collectively with the CEO and CFO,
and in certain instances, as the context may require, the former CEO, the NEOs).

The Corporations executive compensation program is administered by the

Compensation Committee. The Compensation Committee has, as a part of its mandate,
responsibility to review the remuneration of the officers of the Corporation, including the
NEOs. The Compensation Committee also evaluates the performance of the Corporations
executive officers and reviews the design and competitiveness of the Corporations incentive
compensation programs.

The Compensation Committee believes that executive compensation should be directly

linked to performance and the creation of long-term value for the Corporations Shareholders.
23
Based on this principle, beginning in fiscal 2015, the Board and the Compensation Committee
initiated the next phase in evolving the Corporations compensation program to better align
with the Corporations long-term business objectives and creation of value for its Shareholders.

This work resulted in significant changes to the short-term and long-term incentives
granted to the Corporations NEOs in order to ensure that performance-based elements are
directly linked to the Corporations key strategic objectives. Accordingly, the Corporations 2016
compensation program includes, among other things, significant elements tied to specific
performance objectives intended to drive long-term performance.

The key features of the Corporations fiscal 2016 compensation program, in addition to
base salary, were:

(a) The granting of short-term incentives (annual cash bonus) based on the
achievement of (i) quantitative metrics, and (ii) qualitative metrics based on
corporate, departmental and individual performance in light of the Corporations
strategic imperatives. The quantitative metrics applicable to short-term
incentives are described in further detail under the heading Elements of Executive
Compensation - Cash Compensation Short Term Incentive Plan.

(b) The granting of RSUs pursuant to the Corporations LTIP which specify pre-
established financial and strategic performance vesting criteria that are tied to
the Corporations long-term objectives. The RSUs will be granted each year with
updated and revised performance vesting criteria, thereby enabling the
Corporation to adapt the performance vesting criteria to the evolving nature of
the business of the Corporation. In the event the performance vesting criteria are
not achieved, the applicable RSUs will not vest.

(c) The granting of options pursuant to the Corporations Option Plan. Combined
with RSUs, the options form the Corporations long-term incentives to the NEOs
with an allocation in 2016 of approximately 25% RSUs and approximately 75%
options.

(d) A share ownership guideline that requires NEOs and directors of the
Corporation to hold a certain minimum equity value in the Corporation in order
to reinforce the importance of aligning the financial interests of the NEOs,
directors and Shareholders of the Corporation.

COMPENSATION PHILOSOPHY AND GOVERNANCE

Overview

The Corporations executive compensation philosophy is to provide competitive

compensation to attract and retain talented, high-achievers capable of fulfilling the
Corporations strategic and performance objectives. Consistent with this philosophy, the
primary objectives of the Corporations compensation program for its NEOs are to:

24
 (a) attract and retain talented, high-achieving executives critical to the success of the
Corporation and the creation and protection of long-term Shareholder value;

(b) motivate the Corporations Management team to meet operating, strategic, financial
and non-financial objectives; and

(c) align the interests of Management and the Corporations Shareholders by

emphasizing performance based compensation that recognizes individual and the
Corporations performance, which help to create long-term Shareholder value.

The philosophy of the Compensation Committee is to maintain total compensation for

NEOs between 25th percentile and 50th percentile of the Corporations Benchmark Group (see
list of companies below under Compensation Reports). In addition, the Board and the
Compensation Committee consider a range of variables when determining and reviewing
executive compensation, and while certain individual performance objectives are quantifiable,
the Corporation does not use a formulaic approach to evaluate individual objectives and does
not attach a fixed weighting to each measure. The Board and the Compensation Committee are
of the view that prescriptive formulas and weightings applied to forward looking objectives can
lead to unintended consequences that are not in the best interests of the Corporation. Rather,
the Board and the Compensation Committee apply their informed judgment as to the relative
importance of the measures at their year-end evaluation when assessing each NEOs individual
performance. Where qualitative measures are used, they are defined in as detailed manner as
possible so that the Board has sufficient information to complete the assessment.

Executive Recruiting and Retention

The Corporation believes that providing competitive overall compensation enables the
Corporation to attract and retain qualified executives and other personnel. A competitive, fixed
base salary and an at-risk short-term incentive grant in the form of an annual bonus is essential
for this purpose. In addition, grants of long-term incentives, in the form of time-vested stock
options and performance-based RSUs, serve to further encourage the retention of the
Corporations NEOs while incentivizing Management to create and protect Shareholder value.

Aligning Management and Shareholders Interests

The Corporations compensation program seeks to align Management interests with

Shareholder interests through both short-term and long-term incentives linking compensation
to performance. The short-term incentive is an annual cash bonus which is linked to individual,
departmental and corporate performance (among other things). Further, long-term incentives of
options and RSU grants comprise a significant portion of overall compensation for the
Corporations NEOs. The Compensation Committee believes this is appropriate because it
creates a direct correlation between variations in the Corporations share price (which is based
in part on the Corporations financial performance) and the compensation of its NEOs, thereby
aligning the interests of the Corporations executives and Shareholders.

25
Composition and Role of the Compensation Committee

The current members of the Compensation Committee are Mr. Anthony Griffiths, Ms.
Karen A. Licitra and Mr. Robert White. Each member of the current Compensation Committee
is independent within the meaning of National Instrument 58-101 - Disclosure of Corporate
Governance Practices. Compensation Committee members have direct experience relevant to
their responsibilities based on the senior positions held from both current and previous
employment positions which provide the skill and experience to make decisions on the
suitability of the Corporations compensation policies and practices.

Among the responsibilities of the Compensation Committee are the following:

(a) reviewing and making recommendations to the Board with respect to the
Corporations overall compensation and benefits philosophies;

(b) reviewing and making recommendations to the Board with respect to the
Corporations overall compensation for its NEOs and each element of such
compensation, including base salary, short-term incentive grants, long-term
incentive grants, and other benefits and perquisites;

(c) reviewing and approving corporate goals and objectives relevant to the CEO and
other members of Management and evaluating their performance in light of such
goals and objectives;

(d) reviewing and making recommendations to the Board with respect to option grants
and bonus allocations to eligible non-executive employees;

(e) administering the Corporations Option Plan; and

(f) administering the Corporations LTIP.

In making its annual recommendations and determinations as to the Corporations

executive compensation, the Compensation Committee receives input from Management, but
decisions made by the Compensation Committee in determining compensation for the
Corporations officers and directors are the responsibility of the Compensation Committee and
may reflect factors and considerations other than the information and recommendations
provided by Management.

None of the members of the Compensation Committee are currently, or were during the
financial year ended December 31, 2016, an officer or employee of the Corporation. No member
of the Compensation Committee is, or during the financial year ended December 31, 2016 was,
indebted to the Corporation or any of its subsidiaries, or to any other entity where such debt is
supported by a guarantee, support agreement, letter of credit or other similar arrangement or
understanding, provided by the Corporation or its subsidiaries. Except as described or referred
to in this Circular, no member of the Compensation Committee has, or had during the financial

26
year ended December 31, 2016, any material interest in any transaction that has materially
affected or would materially affect the Corporation or any of its subsidiaries.

Role of Management

Although the Compensation Committee is responsible for determining and, where

necessary, making recommendations to the Board on the compensation of the Corporations
NEOs, the CEO and other members of Management assist the Compensation Committee in this
process by compiling information to be used by the Compensation Committee in its
compensation determinations, reporting on historical compensation levels and methods within
the Corporation, reviewing and reporting on the performance of the non-CEO executive officers
and compiling and assessing information respecting compensation levels of officers having
similar positions at companies with similar revenues and businesses. Management also assists
in advising as to the NEOs performance in relation to their respective entitlements to an annual
bonus. See below under Elements of Executive Compensation Cash Compensation Short-Term
Incentive Plan.

The Compensation Committee believes the CEO provides useful input in advising on
recommended levels of compensation for the other NEOs because, due to his frequent
interaction with these officers, the CEO is best-positioned to assess their performance and their
contribution to the Corporation. While the CEO may attend meetings of the Compensation
Committee to provide such advice and recommendations, he is not a member of the
Compensation Committee and he is not entitled to vote on matters before the Compensation
Committee. The CEO also is not present during in-camera sessions of the Compensation
Committee and during discussion of his own compensation, whether at the Compensation
Committee or Board level.

COMPENSATION REPORTS

With respect to the financial year ended December 31, 2016, the Compensation
Committee retained Meridian Compensation Partners LLC (Meridian) in October 2015 as its
external independent compensation advisor to review the Corporations current executive
compensation program. Meridian provided a preliminary report on November 9, 2015 (the
2016 Report), which was reviewed by the Board and Compensation Committee and
approved on December 4, 2015. Meridian was paid executive compensation related fees of
$36,000 (excluding tax) for the 2016 Report. The Meridian compensation report was
incorporated into the 2016 compensation plan for NEOs and directors. In light of management
changes in 2016, Meridian was further engaged in September 2016 to provide an updated
analysis for the 2017 compensation plan for NEOs and directors (the 2017 Report). Meridian
was paid executive compensation related fees of $25,834 (excluding tax) for the 2017 Report.
There has since been no further employment of external consultants relating to executive
employee compensation review.

In connection with the 2016 Report, Meridian assembled a benchmark group of the
following 30 companies (collectively, the Benchmark Group) to serve as a comparator for
compensation purposes, which was approved by the Compensation Committee on December 4,
27
2015. The selection criteria for the Benchmark Group were companies in comparable industries
and appropriate size and complexity.

Benchmark Group
Abaxis, Inc. HeartWare International Inc.

Accuray Incorporated Inogen, Inc.

Analogic Corporation Insulet Corporation

Antares Pharma Inc. K2M Group Holdings, Inc.

AtriCure, Inc. Masimo Corp.

Atrion Corp. Meridian Bioscience, Inc.

Cantel Medical Corp Natus Medical Incorporated

Cardiovascular Systems Inc. Neovasc Inc

Cerus Corporation Nevro Corp.

Cybertronics Inc. Nuvasive Inc.

Cynosure, Inc. Nxstage Medical Inc.

Endologix, Inc. Rockwell Medical Inc.

Entellus Medical, Inc. SurModics, Inc.

Fluidigm Corp. Vascular Solutions, Inc.

GenMark Diagnostics, Inc. ZELTIQ Aesthetics, Inc.

ELEMENTS OF EXECUTIVE COMPENSATION

The Corporation believes the elements of executive compensation, as described below,

when combined, form an appropriate mix of compensation because they provide for stable
income, in the case of base salary, as well as an appropriate balance between short-term (annual
bonus) and long-term incentives (RSU and option grants) to encourage and reward behaviour
that creates value for Shareholders. Specific corporate and individual goals are established
annually and designed to align with the Corporations strategic objectives. Performance goals
affect RSU and option grants and annual cash bonuses, and are considered in assessing annual
salary adjustments.

Performance goals for the financial year ended December 31, 2016 included a number of
quantitative metrics, including revenue, gross profit, loss from operations and 30-day volume-
weighted average pricing of the Corporations common shares, as well as a number of

28
qualitative factors, including company productivity, overall strategic guidance of the
Corporation, special transactions, and individual-specific goals established between the NEOs
and the Compensation Committee.

Cash Compensation

Base Salary

The Compensation Committee recommends the base salary of the Corporations senior
executives, including the President and CEO, for approval by the Board. The Compensation
Committee sets the base salary compensation for senior executive officers (other than the
President and CEO) on the recommendation of the President and CEO. Annual salaries for all
senior executives are determined based on level of responsibility and individual performance,
and the Compensation Committee considers the executives experience and established or
expected performance. The Compensation Committee reviews and sets these salaries in
December of each year.

Short-Term Incentive Plan

The Corporation recently adopted a formal short-term incentive plan (STIP) for
Management, which took effect in the financial year ended December 31, 2016. The STIP is
intended to align executive compensation to Shareholders interests, to be competitive in
attracting and retaining talent and provide compensation to motivate sustained performance of
Management and support the achievement of corporate, department and individual objectives.
The STIP is designed to reward Management with an annual cash award based on the
achievement of corporate, departmental and individual objectives. Awards are based on
performance but are not formulaic and the STIP does not utilize a set weighting for calculating
the short-term incentive payments.

Quantitative performance objectives for the financial year ended December 31, 2016
included the achievement of the Corporations revenue target and the maintenance of the
Corporations gross profit level. Departmental and individual goals, which may be quantitative
or qualitative in nature, were also established for each individual NEO by the Compensation
Committee in order to align corporate/individual goals with the Corporations strategic
imperatives, and included objectives such as research & product development, company
productivity, revenue growth and long-term strategic guidance of the Corporation.

STIP payments are based on the Compensation Committees review and assessment of:

(a) whether or not Management successfully met or exceeded the established corporate,
departmental and individual performance metrics and goals;

(b) Managements decisions and actions and whether or not they are aligned with the
Corporations long-term growth strategy and created value for Shareholders;

29
 (c) whether any goals and objectives were not met because Management made decisions in
the best long-term interests of the Corporation or due to factors outside of
Managements control; and/or

(d) additional initiatives undertaken by Management, which were not contemplated in the
initial objectives.

Short-Term Inventive Plan - Performance & Payments

The Compensation Committee reviewed the performance of Management based on

quantitative metrics (revenue and gross profit), as well as a number of qualitative factors,
including company productivity, overall strategic guidance of the Corporation, special
transactions, and individual-specific goals established between the NEOs and the
Compensation Committee. Based on such review, the Compensation Committee approved the
following short term incentive payments, as a percentage of base salary, for the financial year
ended December 31, 2016:

Position Target/Max. Actual

Rick Mangat1 80%/200% 72%
President and Chief Executive Officer
Roger Deck 60%/120% 54%
Chief Financial Officer
Thomas Tamberrino 138%2 110%
Vice-President of Sales and Marketing
Derrick Guo 70%/140% 63%
General Counsel and Corporate Secretary
Lori Swalm 70%/140% 49%
Sr. Vice-President, Regulatory, Clinical and Economic Affairs
(1) Rick Mangat, former Senior Vice President of Sales and Marketing, succeeded Dr. Menawat as President and CEO on July 6,
2016. The actual STIP payment received by Dr. Mangat for financial year ended December 31, 2016 reflects a blended rate
based upon the time served in each respective position.
(2) Mr. Tamberrinos STIP target and actual payment are based on the Corporations sales commission plan.

The following targets, as a percentage of base salary, were approved for each NEO for the
current financial year ending December 31, 2017:

Position Target Maximum

CEO 80% 160%
Other NEOs 50-100% 100-200%

Comparison to Benchmark Group

Overall short-term cash compensation, consisting of base salaries and short-term

incentives, for the top 3 NEOs was set at 50th percentile of the Benchmark Group with a further
2% decrease to base salaries offset by an increase to target annual cash bonus. The short-term
cash compensation for remaining NEOs was set below the 25th percentile with a further 5%

30
decrease from base salaries offset by an increase to target annual cash bonus. The shift from
base salaries to annual cash bonus was to account for the Corporations relatively lower revenue
(24th percentile) compared to the Benchmark Group and to incentivize Management to achieve
the targeted 30% revenue growth in fiscal 2016.

Equity Compensation

The Corporations Option Plan is intended to serve as a long-term incentive plan that
will align the interests of the Corporations directors, officers, employees and consultants with
the interests of the Shareholders. Once annually, the CEO develops a list of options to be
granted to executives based on the Corporations performance, personal performance and
industry benchmarks. The CEO submits this list to the Compensation Committee who reviews
in-committee and further recommends to the Board for approval. For further information
regarding the Option Plan, please see the section entitled Equity Compensation Plans in this
Circular.

The LTIP is an incentive-based equity compensation program that provides for the grant
RSUs and DSUs. The DSUs are intended for directors of the Corporation who may elect to
receive up to 100% of their annual board retainer in DSUs. The number of RSUs and DSUs
granted at any particular time pursuant to the LTIP is calculated by dividing the dollar amount
of such grant by the market value of a NOVADAQ common share on the date of grant, which is
equal to the volume weighted average trading price of all NOVADAQ common shares traded
on the NASDAQ Global Market (or other exchange where the common shares are listed) for the
five (5) trading days immediately preceding the date of grant. There were 220,700 RSUs granted
during the financial year ended December 31, 2016. As at December 31, 2016, there were 245,455
RSUs outstanding. There were 75,360 DSUs granted during the year ended December 31, 2016
and 62,800 DSUs outstanding as at December 31, 2016.

In addition to the annual grant of stock options under the Option Plan, the CEO and
other NEOs receive RSUs under the LTIP, which are meant to serve as an incentive to create
value and ensure that the long-term interests of the Corporation are aligned with those of the
Shareholders. The Corporations practice is to apply performance-based vesting conditions to
all RSU grants issued to the CEO and other NEOs in order to ensure these grants are directly
linked to long-term objectives in relation to revenue growth and profitability.

The RSUs are granted each year with performance metrics that include both quantitative
and qualitative requirements, which are established by the Compensation Committee. The
rolling performance metrics enable the Corporation to adapt the metrics to the evolving nature
of the business of the Corporation in order to ensure that the incentives continue to create value
for the Corporations Shareholders on a long-term basis.

The Compensation Committee and the Board determined that the performance
conditions were not sufficiently achieved by the Corporation in the financial year ended
December 31, 2016, and accordingly, the 1/3 of the RSU grants for fiscal year ended December
31, 2016 did not vest on first vesting date.

31
 For further information regarding the LTIP, please see the section entitled Equity
Compensation Plans in this Circular.

Comparison to Benchmark Group

Equity compensation was set at the 50th percentile of the Benchmark Group for all NEOs,
with a 25%/75% weighting between RSUs and Options, respectively. Total compensation for
the top 3 NEOs was approximately equal to 50th percentile of the Benchmark Group and
between the 25th percentile and the 50th percentile for the remaining NEOs.

Perquisites and Other Benefits

The perquisites provided to the Corporations NEOs in 2016 were limited to car
allowances. None of the NEOs received perquisites that amounted to greater than $10,000.

RISKS

The Corporation does not purchase, or permit any NEO or director to purchase,
financial instruments, including prepaid variable forward contracts, equity swaps, collars, or
units of exchange funds that are designed to hedge or offset a decrease in market value of
equity securities granted as compensation or held, directly or indirectly, by the NEO or director.

The Compensation Committee meets annually to review and recommend to the Board
the CEOs plan for compensation of directors and officers. The Compensation Committee also
meets periodically throughout the year to address issues of share compensation grants,
compensation for new senior employees, and to review any reports provided by compensation
consultants. In order to identify and mitigate compensation policies and practices that could
encourage a NEO at a principal business unit or division to take inappropriate or excessive
risks, the Corporation ensures that its Board has oversight, through the Compensation
Committee, regarding compensation metrics that are aligned with long term value growth of
the Corporation. The Corporation has hired an external compensation consultant to ensure that
its compensation policies and practices are aligned with industry standards, and are reasonably
unlikely to have a material adverse effect on the Corporation.

SHARE OWNERSHIP GUIDELINES

In order to ensure the interests of Management and directors are aligned with the
interests of the Shareholders, the Board approved the adoption of share ownership guidelines in
December of 2015, which need to be met by current directors and named executive officers by
December 2018. New executives are expected to meet the requirements within three (3) years
following the commencement of their employment as an executive with the Corporation.

The guidelines for covered persons, expressed as a multiple of their current annual base
salary or retainer (as applicable), are as follows:

32
POSITION MINIMUM OWNERSHIP

Directors 3 x Retainer

Chief Executive Officer 4 x Base Salary

Other Named Executive Officers 1 x Base Salary

SHAREHOLDER RETURN PERFORMANCE GRAPH

Below is a line graph that compares (a) the yearly cumulative total Shareholder return
on the Corporations common shares with (b) the cumulative total return of the TSX Composite
Index for the period of time indicated, assuming an initial investment of $100, from 2011
through to 2016 inclusive. The trend shown in the above graph does not necessarily correspond
to the Corporations compensation to its NEOs for the financial year ended December 31, 2016
or for any prior fiscal periods. The trading price of the Corporations common shares is subject
to fluctuation based on several factors, many of which are outside the control of the
Corporation. In determining compensation, the Corporation strives to be competitive in order
to attract and retain talented high-achievers capable of achieving the Corporations strategic
and performance objectives. See above under Compensation Philosophy and Governance.

Dec Dec Dec Dec Dec Dec

AS AT DECEMBER 31
31,2011 31,2012 31,2013 31,2014 31,2015 31,2016
Novadaq Technologies Inc. 100 176 345 386 355 190
TSX Composite Index 100 107 121 134 123 142

33
 SUMMARY COMPENSATION TABLE

The following tables provide information respecting compensation received in or in

respect of the financial year ended December 31, 2016 by each of the Corporations NEOs, who
are the following executive officers of the Corporation: (a) the current CEO, (b) the former CEO,
(c) the CFO and (d) the other three most highly compensated executive officers during the
financial year ended December 31, 2016.

All values shown in the table below are stated in U.S. dollars.

34
Name and Year Salary Option- Share - Employee Annual All Other Total
Principal Based Based Share Incentive Compensation Compensation
Position Awards Awards Purchase Plans (2) (2)(3)(4)

Plan (2)

$ $ $ $ $ $ $
Mr. Rick 2016 397,625 521,353 171,361 Nil 286,290 5,673 1,382,302
Mangat 2015 285,145 399,200 Nil Nil 135,986 5,866 826,197
President 2014 222,725 400,800 Nil Nil 104,058 6,790 734,374
and Chief
Executive
Officer (1)
Dr. Arun 2016 249,500 1,401,043 460,612 3,505 249,560 85,471 2,449,691
Menawat 2015 483,847 598,800 Nil 7,248 391,727 7,039 1,488,661
Former 2014 390,222 601,200 Nil 4,877 259,893 8,148 1,264,341
Chairman,
President
and Chief
Executive
Officer (1)
Mr. Roger 2016 299,200 432,191 142,035 Nil 161,568 4,538 1,039,533
Deck 2015 255,131 399,200 Nil Nil 121,922 4,693 780,945
Chief 2014 206,428 300,600 Nil Nil 71,820 5,432 584,281
Financial
Officer
Mr. Thomas 2016 200,000 367,382 330,894 3,000 219,999 7,200 1,128,475
Tamberrino 2015 200,000 274,450 Nil 3,000 161,282 7,200 645,932
Vice 2014 175,000 300,600 Nil 2,625 60,000 7,200 545,425
President,
Sales and
Marketing
Mr. Derrick 2016 199,880 459,459 162,857 Nil 125,924 Nil 984,120
Guo 2015 136,868 274,450 Nil Nil 61,818 Nil 473,136
General 2014(4) 92,210 150,000 Nil Nil 31,689 Nil 273,899
Counsel and
Corporate
Secretary
Ms. Lori 2016 225,000 367,382 120,725 3,309 110,250 7,200 833,866
Swalm 2015 200,000 274,450 Nil 3,000 82,548 7,200 567,198
Sr. Vice 2014 175,000 200,400 Nil 2,581 55,000 7,200 437,600
President
Regulatory,
Clinical and
Economic
Affairs

(1) Dr. Menawat resigned as Chairman, President and Chief Executive Officer of the Corporation on July 6, 2016. Rick Mangat,
former Senior Vice President of Sales and Marketing, succeeded Dr. Menawat as President and CEO on the same date. Mr.
Mangat became a director of the Corporation on February 28th, 2017 and will not receive any compensation for his role as a
director.
(2) All amounts have been actually paid and those amounts paid in Canadian dollars have been translated at the average
exchange rate during 2016 of 1.3221 Canadian dollars per US$1.00.
(3) All Other Compensation comprises car allowances paid to all NEOs, in addition to sales commissions paid to Mr.
Tamberrino.
(4) Mr. Guo joined the Corporation in May 2014 as corporate counsel and his annualized salary for 2014 was $125,137. Mr. Guo
became an NEO in the financial year ended December 31, 2015.

35
Short-Term Incentive Payments

The Summary Compensation Table reports all amounts earned for the financial year
ended December 31, 2016. Annual incentive payments were paid as cash bonuses to NEOs on
March 15th, 2017 based on corporate and individual performance, as recommended by the CEO
and approved by the Board.

Option-Based Awards

Executive option-based awards, granted on May 18, 2016, utilized the Black-Scholes
model to determine the fair market value of US$4.97 per option. The Black-Scholes model was
used to determine the fair market value of executive option-based rewards because the
Corporations option-based award plan has standard structure and vesting conditions and the
Black-Scholes model is the standard model used within the industry for accounting for equity
based payments. The input factors to determine the value were volatility of 50%, exercise price
of CA$12.59, interest rate of 1.14%, and an expected life of 6.6 years. In converting values from
Canadian dollars to U.S. dollars, the Corporation utilized an exchange rate of 1.3023

The Corporation did not, at any time during the 2016 financial year, adjust, amend,
cancel, replace or significantly modify the exercise price of options previously awarded to,
earned by, paid to, or payable to, a NEO.

All Other Compensation

All other compensation comprises car allowances for business use of personal vehicles.

Long-Term Incentive Plan

The RSU grants under the LTIP for 2016 were subject to performance based vesting
conditions tied to the quantitative performance of the Corporation and such performance
metrics were approved by the Compensation Committee. The Compensation Committee and
the Board determined that the performance conditions were not sufficiently achieved by the
Corporation in the financial year ended December 31, 2016, and accordingly, the 1/3 of the RSU
grants for fiscal year ended December 31, 2016 did not vest on first vesting date.

Pension Plan Benefits

The Corporation does not offer pension plans including defined benefit or defined
contribution plans to employees, nor does it provide compensation related to any type of
pension plan.

36
 INCENTIVE PLAN AWARDS

Outstanding Equity-Based Awards

The following table provides information regarding the equity based awards for each
NEO outstanding as of December 31, 2016.

The process the Corporation uses to grant option-based awards to executive officers is
described in the Stock Options section of the CD&A.

All values shown in the table below are stated in Canadian dollars unless otherwise
noted.

Name Share- Number of Option Option Value of Number Market or Market or

Based Securities exercise expiration unexercised of RSUs payout value payout
Awards underlying price date in-the- that have of share- value of
unexercised money not based awards share-based
options options vested that have not awards that
vested have not
been paid
out or
distributed

($) (#) ($) * ($) (#)

Mr. Rick 171,361 25,000 6.50 17-Aug-17 74,750 17,530 166,360 166,360
Mangat, 60,000 2.50 19-Mar-19 419,400
Director, 30,000 2.75 2-Apr-20 202,200
President 25,000 4.15 20-May-21 133,500
and Chief 50,000 6.47 23-May-22 151,000
Executive 30,000 14.65 22-May-23 Nil
Officer (1) 40,000 17.44 21-May-24 Nil
80,000 12.93 13-May-25 Nil
104,900 12.59 18-May-26 Nil
Dr. Arun 460,412 50,000 6.50 17-Aug-17 149,500 47,120 447,169 447,169
Menawat, 90,000 2.50 19-Mar-19 629,100
Former 50,000 2.75 2-Apr-20 337,000
Chairman, 25,000 4.15 20-May-21 133,500
President 90,000 6.47 23-May-22 271,800
and Chief 60,000 14.65 22-May-23 Nil
Executive 60,000 17.44 21-May-24 Nil
Officer (1) 120,000 12.93 13-May-25 Nil
281,900 12.59 18-May-26 Nil
Mr. Roger 142,035 25,000 6.50 17-Aug-17 74,750 14,530 137,889 137,889
Deck, 30,000 2.75 2-Apr-20 202,200
Chief 25,000 4.15 20-May-21 133,500
Financial 35,000 6.47 23-May-22 105,700
Officer 30,000 14.65 22-May-23 Nil
30,000 17.44 21-May-24 Nil
80,000 12.93 13-May-25 Nil
86,960 12.59 18-May-26 Nil
Mr. Thomas 330,894 100,000 8.78 4-Jan-23 71,000 33,850 321,236 321,236
Tamberrino 30,000 14.65 22-May-23 Nil
Vice 30,000 17.44 21-May-24 Nil
President, 55,000 12.93 13-May-25 Nil
Sales and 73,920 12.59 18-May-26 Nil
Marketing

37
Name Share- Number of Option Option Value of Number Market or Market or
Based Securities exercise expiration unexercised of RSUs payout value payout
Awards underlying price date in-the- that have of share- value of
unexercised money not based awards share-based
options options vested that have not awards that
vested have not
been paid
out or
distributed

($) (#) ($) * ($) (#)

Mr. Derrick 162,857 30,000 17.44 21-May-24 Nil 16,660 158,103 158,103
Guo 55,000 12.93 13-May-25 Nil
General 99,690 12.59 18-May-26 Nil
Counsel and
Corporate
Secretary

Ms. Lori 120,725 17,500 4.15 20-May-21 93,450 12,350 117,201 117,201
Swalm 35,000 6.47 23-May-22 105,700
Sr. Vice 20,000 14.65 22-May-23 Nil
President, 20,000 17.44 21-May-24 Nil
Regulatory, 55,000 12.93 13-May-25 Nil
Clinical 73,920 12.59 18-May-26 Nil
and
Economic
Affairs

(1) Dr. Menawats resigned as Chairman, President and Chief Executive Officer of the Corporation on July 6, 2016. Rick Mangat, former Senior Vice
President of Sales and Marketing, succeeded Dr. Menawat as President and CEO on the same date. Mr. Mangat did not receive any
compensation for his role as a director of the Corporation.

Incentive Plan Awards Value Vested or Earned in 2016

The following table provides information regarding the value on vesting of incentive
plan awards for the financial year ended December 31, 2016.

All values shown in the table below are stated in Canadian dollars unless otherwise noted.

Name Option based Share based Non-equity

awards Value awards - incentive plan
vested during Value vested compensation
the year (1)(2) during the Value
($) year earned during
($) the year

USD ($)
Mr. Rick Mangat Nil Nil 286,290
President and Chief Executive Officer
Dr. Arun Menawat Nil Nil 249,560
Former Chairman, President and Chief
Executive Officer
Mr. Roger Deck Nil Nil 161,568
Chief Financial Officer
38
Mr. Thomas Tamberrino Nil Nil 219,999
Vice President, Sales and Marketing
Mr. Derrick Guo Nil Nil 125,924
General Counsel and Corporate Secretary
Ms. Lori Swalm Nil Nil 110,250
Sr. Vice President,
Regulatory, Clinical and
Economic Affairs
(1) Options which vested in 2016 were in-the-money at year-end. The amount is based on the difference between the market
price of the underlying security on the date it vested during 2016 and the exercise price of the option times the number of
options that vested.
(2) The amount is based on the difference between the market price of the underlying security on the day it vested during 2016
and the exercise price of the option times the number of options that vested.

TERMINATION AND CHANGE OF CONTROL BENEFITS

Each of the Corporations NEOs, as of December 31, 2016, is a party to an employment

agreement with the Corporation that sets forth certain instances where payments and other
obligations arise on the termination of their employment (whether voluntary, involuntary, or
constructive), and upon a change of control. The obligations under each contract and other
significant factors are summarized below:

Mr. Rick Mangat. The employment agreement with Mr. Mangat is for an indefinite term,
subject to the termination provisions within the agreement. The agreement provides for a base
salary of CA$120,000 which is subject to annual review and adjustment. On January 1, 2017, Mr.
Mangats annual salary was increased to US$565,000. The agreement contains non-solicitation
and non-competition covenants in favour of the Corporation which apply during the term of
Mr. Mangats employment and for a period of two (2) years following the termination of his
employment, and confidentiality covenants in favour of the Corporation which apply
indefinitely. In addition, if Mr. Mangat is terminated for any reason other than for cause, Mr.
Mangat will receive his base salary and benefits for six (6) months following his termination
pursuant to the employment agreement. In 2015, Mr. Mangat entered into a change of control
agreement with the Corporation. The change of control agreement provides that, upon the
occurrence of a double trigger of (1) a change of control of the Corporation, and (2) an
involuntary termination of Mr. Mangats employment within two (2) years of such change of
control, the Corporation shall provide Mr. Mangat with the following compensation and
benefits: (a) lump sum payment equal to two (2) years base salary; (b) a lump sum amount
equivalent to two (2) times average cash bonus received in previous three (3) calendar years; (c)
a pro-rata share of the target bonus for the calendar year in which the involuntary termination
occurred; (d) maintenance of the medical, disability and life insurance coverages in effect at the
date of termination for two (2) years or until employment with another company; and (e)
notwithstanding the terms of the Option Plan or LTIP and subject to regulatory approval (if
any), the vesting of all (i) outstanding options held under the Option Plan the right to exercise
such options within ninety (90) days from the date of termination, and (ii) outstanding RSUs
held under the LTIP.

39
 Roger Deck. The employment agreement with Mr. Deck is for an indefinite term, subject
to the termination provisions within the agreement. The agreement provides for a base salary of
CA$110,000 which is subject to annual review and adjustment. As at January 1, 2017, Mr. Decks
annual salary was US$350,000. The agreement contains non-solicitation and non-competition
covenants in favour of the Corporation which apply during the term of Mr. Decks employment
and for a period of two (2) years following the termination of his employment, and
confidentiality covenants in favour of the Corporation which apply indefinitely. In addition, if
Mr. Deck is terminated for any reason other than for cause, Mr. Deck will receive his base salary
and benefits for six (6) months following his termination pursuant to the employment
agreement. In 2015, Mr. Deck entered into a change of control agreement with the Corporation.
The change of control agreement provides that, upon the occurrence of a double trigger of (1) a
change of control of the Corporation, and (2) an involuntary termination of Mr. Decks
employment within two (2) years of such change of control, the Corporation shall provide Mr.
Deck with the following compensation and benefits: (a) lump sum payment equal to two (2)
years base salary; (b) a lump sum amount equivalent to two (2) times average cash bonus
received in previous three (3) calendar years; (c) a pro-rata share of the target bonus for the
calendar year in which the involuntary termination occurred; (d) maintenance of the medical,
disability and life insurance coverages in effect at the date of termination for two (2) years or
until employment with another company; and (e) notwithstanding the terms of the Option Plan
or LTIP and subject to regulatory approval (if any), the vesting of all (i) outstanding options
held under the Option Plan the right to exercise such options within ninety (90) days from the
date of termination, and (ii) outstanding RSUs held under the LTIP.

Thomas Tamberrino. The employment agreement with Mr. Tamberrino is for an

indefinite term, subject to the termination provisions within the agreement. The agreement
provides for a base salary of US $175,000 which is subject to annual review and adjustment. As
at January 1, 2017, Mr. Tamberrinos annual salary was US$270,000. The agreement contains
non-solicitation and non-competition covenants in favour of the Corporation which apply
during the term of Mr. Tamberrinos employment and for a period of one (1) year following the
termination of his employment, and confidentiality covenants in favour of the Corporation
which apply indefinitely. In 2015, Mr. Tamberrino entered into a change of control agreement
with the Corporation. In 2016, the Compensation Committee increased Mr. Tamberrinos
change of control benefits to provide that, upon the occurrence of a double trigger of (1) a
change of control of the Corporation, and (2) an involuntary termination of Mr. Tamberrinos
employment within two (2) years of such change of control, the Corporation shall provide Mr.
Tamberrino with the following compensation and benefits: (a) lump sum payment equal to two
(2) years base salary; (b) a lump sum amount equivalent to two (2) times average cash bonus
received in previous three (3) calendar years; (c) a pro-rata share of the target bonus for the
calendar year in which the involuntary termination occurred; (d) maintenance of the medical,
disability and life insurance coverages in effect at the date of termination for two (2) years or
until employment with another company; and (e) notwithstanding the terms of the Option Plan
or LTIP and subject to regulatory approval (if any), the vesting of all (i) outstanding options
held under the Option Plan the right to exercise such options within ninety (90) days from the
date of termination, and (ii) outstanding RSUs held under the LTIP.

40
 Derrick Guo. The employment agreement with Mr. Guo is for an indefinite term, subject
to the termination provisions within the agreement. The agreement provides for a base salary of
CA$160,000 which is subject to annual review and adjustment. As at January 1, 2017, Mr. Guo's
annual salary was US$250,000. The agreement contains non-solicitation and non- competition
covenants in favour of the Corporation which apply during the term of Mr. Guos employment
and for a period of one (1) year following the termination of his employment, and
confidentiality covenants in favour of the Corporation which apply indefinitely. In addition, if
Mr. Guo is terminated for any reason other than for cause, Mr. Guo will receive his base salary
and benefits for three (3) months, subject to certain adjustments, following his termination. In
2016, the Compensation Committee increased Mr. Guos change of control benefits to provide
that, upon the occurrence of a double trigger of (1) a change of control of the Corporation, and
(2) an involuntary termination of Mr. Guos employment within two (2) years of such change of
control, the Corporation shall provide Mr. Guo with the following compensation and benefits:
(a) lump sum payment equal to two (2) years base salary; (b) a lump sum amount equivalent to
one and two (2) times average cash bonus received in previous three (3) calendar years; (c) a
pro-rata share of the target bonus for the calendar year in which the involuntary termination
occurred; (d) maintenance of the medical, disability and life insurance coverages in effect at the
date of termination for two (2) years or until employment with another company; and (e)
notwithstanding the terms of the Option Plan or LTIP and subject to regulatory approval (if
any), the vesting of all (i) outstanding options held under the Option Plan the right to exercise
such options within ninety (90) days from the date of termination, and (ii) outstanding RSUs
held under the LTIP.

Lori Swalm. The employment agreement with Ms. Swalm is for an indefinite term,
subject to the termination provisions within the agreement. The agreement provides for a base
salary of US$112,500 which is subject to annual review and adjustment. As at January 1, 2017,
Ms. Swalm annual salary was US$240,000. The agreement contains non-solicitation and non-
competition covenants in favour of the Corporation which apply during the term of Ms.
Swalms employment and for a period of two (2) years following the termination of her
employment, and confidentiality covenants in favour of the Corporation which apply
indefinitely. In addition, if Ms. Swalm is terminated for any reason other than for cause, Ms.
Swalm will receive her base salary and benefits for six (6) months following her termination. In
2015, Ms. Swalm entered into a change of control agreement. In 2016, the Compensation
Committee increased Ms. Swalms change of control benefits to provide that, upon the
occurrence of a double trigger of (1) a change of control of the Corporation, and (2) an
involuntary termination of Ms. Swalms employment within two (2) years of such change of
control, the Corporation shall provide Ms. Swalm with the following compensation and
benefits: (a) lump sum payment equal to two (2) years base salary; (b) a lump sum amount
equivalent to two (2) times average cash bonus received in previous three (3) calendar years; (c)
a pro-rata share of the target bonus for the calendar year in which the involuntary termination
occurred; (d) maintenance of the medical, disability and life insurance coverages in effect at the
date of termination for two (2) years or until employment with another company; and (e)
notwithstanding the terms of the Option Plan or LTIP and subject to regulatory approval (if
any), the vesting of all (i) outstanding options held under the Option Plan the right to exercise
such options within ninety (90) days from the date of termination, and (ii) outstanding RSUs
held under the LTIP.
41
Payments on Termination or Change of Control

The following table provides details regarding the estimated incremental payments,
payables and benefits from the Corporation to each of the NEOs assuming a change of control
occurred on December 31, 2016.

All values shown in the table below are stated in U.S. dollars.

Name Change of Change of Change of Total

Control Control Control
Payment Payment Payment
(Base Salary) (Bonus) (Value of
Benefits)

($) (1) ($) (1) ($) (1) ($) (1)

Mr. Rick Mangat $960,500 $519,142 $854,405 $2,334,047
President and Chief
Executive Officer
Mr. Roger Deck $598,400 $343,890 $487,108 $1,429,398
Chief Financial Officer
Mr. Thomas Tamberrino $400,000 $450,854 $292,125 $1,142,979
Vice-President of Sales and
Marketing
Mr. Derrick Guo $399,760 $242,065 $117,750 $759,575
General Counsel
Ms. Lori Swalm $450,000 $248,615 $235,608 $934,223
Sr. Vice President,
Regulatory, Clinical and
Economic Affairs

(1) Amounts are shown in U.S. dollars, the Corporations reporting currency. Canadian dollars have been translated at the
exchange rate on December 31, 2016 of $1.3427 Canadian dollars per US$1.00

DIRECTOR COMPENSATION

The directors of the Corporation, other than the current and former President and CEO,
were paid in respect of the financial year-ended December 31, 2016, an annual fee of US$58,000
for their services.

Directors of the Corporation are also eligible to receive stock option grants as an initial
grant when joining the Board. During the financial year 2016, each of Mr. Anthony Griffiths,
Mr. Harold Koch, Jr., Mr. William Mackinnon, Mr. Thomas Wellner, Mr. Robert White and Ms.

42
Merrin were granted 12,560 DSUs. Except as set out below, directors are not eligible to receive
other compensation.

Director Compensation Table

The following table provides information regarding compensation paid to the

Corporations non-executive directors during the financial year ended December 31, 2016.
All values shown in the table below are stated in U.S. dollars.

Name Fees Option- Share-based All Other Total

Earned based Awards Compensation
Awards

($) (1) ($) (2) ($) ($) ($)

Mr. Anthony Griffiths 58,000 Nil 122,778 Nil 180,778

Mr. Harold O. Koch, Jr. (3) 43,500 Nil 122,778 Nil 166,278

Ms. Karen A. Licitra (3) 14,500 Nil Nil Nil 14,500

Mr. William Mackinnon 58,000 Nil 122,778 Nil 180,778

Ms. Patrice Merrin 58,000 Nil 122,778 Nil 180,778

Mr. Thomas Wellner 58,000 Nil 122,778 Nil 180,778

Mr. Robert White 58,000 Nil 122,778 Nil 180,778

(1) The services provided by the directors include attendance during Board and Committee meetings, and the provision of
governance and oversight. The level of compensation is determined by benchmarking peer companies of comparable size and
complexity within the Corporations industry.
(2) The amounts in this column represent the grant date fair value of options granted during 2016 and may not represent the
amounts the directors will actually realize from the awards. The grant date fair value of the options granted during 2016 has
been estimated at the date of grant in accordance with the International Financial Reporting Standard 2 using a Black-Scholes
option pricing model.
(3) Ms. Licitra was appointed as a director of the Corporation on October 1, 2016; Mr. Koch resigned as a director of the
Corporation on the same date.
(4) Ms. Colleran was appointed as a director of the Corporation on January 4, 2017.

Incentive Plan Awards

The following table provides information regarding the incentive plan awards for each
director outstanding as of December 31, 2016.

All values shown the table below are stated in Canadian dollars unless otherwise stated.

43
Name Number of Option Option Value of Number Long-
securities exercise expiration unexercised in- of DSUs Term
underlying price date the-money granted Incentive
unexercised options Plan
options Awards

(#) ($) ($) (US $)

Mr. Anthony Griffiths 3,400 6.50 17-Aug-17 10,166 12,560 122,778
5,100 4.01 15-May-18 27,948
5,500 3.09 21-May-19 35,200
7,500 4.26 20-May-20 39,225
7,500 4.15 20-May-21 40,050
8,500 6.47 23-May-22 25,670
8,500 14.65 22-May-23 -
8,500 17.44 21-May-24 -
8,500 12.93 13-May-25 -
Mr. Harold O. Koch, Jr. 7,500 7.74 24-May-17 13,125 12,560 122,778
3,400 6.50 17-Aug-17 10,166
5,100 4.01 15-May-18 27,948
5,500 3.09 21-May-19 35,200
7,500 4.26 20-May-20 39,225
7,500 4.15 20-May-21 40,050
8,500 6.47 23-May-22 25,670
8,500 14.65 22-May-23 -
5,667 17.44 21-May-24 -
2,833 12.93 13-May-25 -
Ms. Karen Licitra Nil Nil N/A - Nil Nil
Mr. William Mackinnon 7,500 4.15 20-May-21 40,050 12,560 122,778
8,500 6.47 23-May-22 25,670
8,500 14.65 22-May-23 -
8,500 17.44 21-May-24 -
8,500 12.93 13-May-25 -
Ms. Patrice Merrin 15,000 12.93 13-May-25 - 12,560 122,778
Mr. Thomas Wellner 15,000 17.44 21-May-24 - 12,560 122,778
8,500 12.93 13-May-25 -

Mr. Robert White 15,000 16.35 5-Nov-24 - 12,560 122,778

8,500 12.93 13-May-25 -
(1) Options which vested in 2016 were in-the-money at year-end. The amount is based on the difference between the
market price of the underlying security on the date it vested during 2016 and the exercise price of the option times the
number of options that vested.
(2) The amount is based on the difference between the market price of the underlying security on the day it vested during
2016 and the exercise price of the option times the number of options that vested.

44
Incentive Plan Awards Vested or Earned in 2016

The following table provides information regarding the value on vesting of incentive
plan awards for the financial year ended December 31, 2016.

All values shown in the table below are stated in Canadian dollars.

Name Option-based awards (1) (2) Long-Term Incentive Plan

Awards
($) ($)

Mr. Anthony Griffiths Nil Nil

Nil 145,722(4)
Mr. Harold O. Koch, Jr.

Nil Nil
Ms. Karen A. Licitra

Nil Nil
Mr. William Mackinnon

Ms. Patrice Merrin Nil Nil

Mr. Thomas Wellner Nil Nil
Mr. Robert White Nil Nil
(1) Options which vested in 2016 were in-the-money at year-end. The amount is based on the difference between the market
price of the underlying security on the date it vested during 2016 and the exercise price of the option times the number of
options that vested.
(2) The amount is based on the difference between the market price of the underlying security on the day it vested during 2016
and the exercise price of the option times the number of options that vested.
(3) Ms. Colleran was appointed as a director of the Corporation on January 4, 2017.
(4) Mr. Koch resigned from his position as director on October 1, 2016 and the Board waived the vesting requirements of all DSUs
held by Mr. Koch on his resignation date.

EQUITY COMPENSATION PLANS

Description of the Corporations Option Plan

At the Meeting, Shareholders will be asked to consider, and approve a resolution

reconfirming and approving the granting of unallocated options under the Corporations
Option Plan. Information respecting the Corporations Option may be found under Item 4 of
this Circular on page 6.

Description of the Corporations Long-Term Incentive Plan

45
 At the Meeting, Shareholders will be asked to consider, and approve a resolution
reconfirming and approving the granting of unallocated Units under the LTIP. Information
respecting the Corporations LTIP may be found under Item 5 of this Circular on page 9.

Shares Authorized for Issuance under Share Based Compensation Plans

The following table shows information, as of December 31, 2016, on equity

compensation plans under which shares or options are authorized for issuance.

All values stated in the table below are in Canadian dollars.

Plan Category (1) Number of shares Weighted-average Number of shares

issuable upon exercise price of available for
exercise of outstanding future issuance
outstanding options ($) under equity
options or compensation
settlement of plans (excluding
Units shares reflected in
column (a))
(a) (b) (c)
Plans approved by 4,608,064 12.06
Shareholders:
Option Plan
308,255 N/A
Plans approved by
Shareholders: LTIP

Plans not previously N/A N/A N/A

approved by
Shareholders
4,916,319 12.06 1,136,451
Total
(1) The maximum number of common shares which may be reserved for issuance under the LTIP and the Option Plan cannot not
exceed 10% of the issued and outstanding common shares from time to time on a non-diluted basis.

Description of the Corporations Employee Share Purchase Plan

Effective as of July 1, 2008, the Board approved an Employee Share Purchase Plan
(ESPP) for the purpose of encouraging and facilitating common share ownership by
employees, to further align the interests of employees with the success of the Corporation, and
to attract and retain employees. All full-time employees who have worked at least three
consecutive complete months for the Corporation are eligible to be participants (ESPP
Participants). Under the ESPP, a plan administrator was appointed to receive Participant
contributions up to 10% of the ESPP Participants annual base salary, the Corporation matching
contributions equal to 15% of ESPP Participant contributions, and to use total contributions to
purchase common shares on behalf of ESPP Participants through the facilities of the primary

46
exchange on which the common shares are listed for trading, being currently the TSX and the
NASDAQ. Common shares purchased under the ESPP are subject to a transfer restriction for six
months after the date of purchase. Purchase expenses are paid by the Corporation, and sale
expenses are paid by the ESPP Participant. The Corporation may amend, suspend, or terminate
the ESPP at any time.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

As at April 17, 2017, no individual who is, or at any time during the most recently
completed financial year was, a director or executive officer of the Corporation, and no
proposed nominee for election as a director for the Corporation, and no associate of any such
director, executive officer or proposed nominee is, or at any time since the beginning of the
most recently completed financial year of the Corporation has been, indebted to the
Corporation or any of its subsidiaries.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS OR

MATTERS TO BE ACTED UPON

Except as disclosed elsewhere in this Circular, no director or officer of the Corporation,

or any associate or affiliate thereof or, to the knowledge of the Corporation, any holder holding
10% or more of the voting shares of the Corporation or any associate or affiliate thereof, has had
any material interest, direct or indirect, by way of beneficial ownership of shares or otherwise,
in any matter to be acted upon or in any transaction of the Corporation since January 1, 2016, or
in any proposed transaction that has materially affected or will materially affect the Corporation
or any of its affiliates.

RECEIPT OF SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING

Shareholders entitled to vote at the next annual meeting of Shareholders and who wish
to submit a proposal in respect of any matter to be raised at such meeting must ensure that the
Corporation receives such proposal no later than December 4, 2017.

ADDITIONAL INFORMATION

The Corporation will provide to any person or company, upon receipt of a request by
the Corporate Secretary of the Corporation and, in the case of a security holder, without charge,
a copy of: (i) the Corporations most recent Annual Information Form, together with a copy of
any document, or the pertinent pages of any document incorporated therein by reference; (ii)
the financial statements for the Corporations financial year ended December 31, 2016, together
with the accompanying report of the auditor, and any interim financial statements of the
Corporation that have been filed for any period subsequent to December 31, 2016 and
Managements discussion and analysis thereof; and (iii) this Circular. Additional information
relating to the Corporation may be accessed on SEDAR at www.sedar.com and the website of
the U.S. Securities and Exchange Commission at www.sec.gov. Financial information is
provided in the Corporations comparative financial statements and MD&A.

47
 DIRECTORS APPROVAL

The undersigned Chairman of the Board certifies that the contents and sending of this
Circular have been approved by the Board of the Corporation.

William Mackinnon
Chairman of the Board
April 17, 2017

48
 Appendix A
STATEMENT ON CORPORATE GOVERNANCE PRACTICES

General

On June 30, 2005, the Canadian Securities Administrators (CSA) implemented

National Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101) and
National Policy 58-201 Corporate Governance Guidelines (NP 58-201). NI 58-101 and NP 58-201
have replaced the corporate governance guidelines of the TSX and provide for mandated
disclosure under NI 58-101 of a corporations corporate governance practices, as well as best
practices under NP 58-201.

The Board and Management recognize the importance of corporate governance to the
effective Management of the Corporation and to its Shareholders. The Corporations approach
to significant issues of corporate governance is designed with a view to ensuring that the
business and affairs of the Corporation are effectively managed so as to enhance Shareholder
value. The Board and the Corporation have devoted significant attention and resources to
ensuring that the Corporations system of corporate governance meets or exceeds applicable
legal and stock exchange requirements in both Canada and the United States.

This statement of corporate governance practices has been prepared by the Corporate
Governance Committee (the Governance Committee).

The following sets out the Corporations approach to corporate governance in

accordance with NI 58-101F1.

Board of Directors

Independence

The Board is currently comprised of eight (8) directors. The Board is responsible for
determining whether or not each director is independent (as defined below) and has
determined that a majority of the current Board (namely Mr. Anthony Griffiths, Mr. William
Mackinnon, Ms. Patrice Merrin, Mr. Robert White, Ms. Karen Licitra, Ms. Lisa Colleran and Mr.
Thomas Wellner) is independent. Pursuant to National Instrument 58-101 Disclosure of
Corporate Governance Practices and National Instrument 52-110 Audit Committees, a director is
independent if such director has no direct or indirect material relationship with the
Corporation, which could, in the view of the Corporations Board, be reasonably expected to
interfere with the exercise of a members independent judgment.

Mr. Rick Mangat is not independent under these standards as he is also the President
and CEO of the Corporation. Mr. Rick Mangat is the only non-independent director on the
Board.

49
Common Board Memberships

Non-executive directors can serve on no more than four other public company boards.
Executive directors can serve on no more than two other public company boards. Directors
must advise the chair of the Board and the chair of the Governance Committee in advance of
accepting an invitation to serve on another public company board. Otherwise, directors are
required to disclose to the Board or any applicable committee thereof any real or perceived
conflict in relation to any matter or proposed matter to be considered and in such
circumstances, it is the Boards policy that such directors excuse themselves from all
deliberations of such matters.

There are five (5) current directors who are members of a board of directors of another
public company. Mr. Griffiths is a director of Fairfax Financial Holdings Limited and Fairfax
India Holdings Corporation. Mr. Mackinnon is a director of Telus Corp. and Pioneer Petroleum.
Mr. Wellner serves on the boards of Cipher Pharmaceuticals. Ms. Merrin is a director of
Glencore PLC, Stillwater Mining Corporation and Kew Media Group Inc. Mr. White is a
director of AtriCure Inc. and Entellus Medical Inc.

Meetings of Independent Directors

The entire complement of independent directors on the Board and each of the
committees meet regularly without Management present. Prior to William Mackinnons election
as the Chairman of the Board on July 6, 2016, the former Lead Director of the Board conducted
these sessions at Board meetings. Subsequent to July 6, 2016, the Chairman of the Board
conducts these sessions at Board meetings. The chair of each committee conducts them at
committee meetings. During the last financial year ended December 31, 2016, there have been
fourteen (14) such meetings of the independent directors.

Chairman of the Board

William Mackinnon was elected as the Chairman of the Corporation on July 6, 2016
succeeding Dr. Arun Menawat. The primary functions of the Chairman are to facilitate the
operations and deliberations of the Board and the satisfaction of the Boards responsibilities
under its mandate. The Chairmans key responsibilities include duties relating to setting Board
meeting agendas, chairing board and Shareholder meetings, director development, providing
input on potential director candidates, and communicating with Shareholders and regulators.
The responsibilities of the Chairman are reviewed by the Governance Committee and
considered by the Board for approval each year.

Attendance
During the financial year ended December 31, 2016, the Board met a total of eighteen
(18) times, the Audit Committee met a total of five (5) times, the Compensation Committee met
a total of three (3) times, and the Governance Committee met a total of one (1) time. The
attendance record of each director is set out below:

50
Summary of Board and Committee Summary of Attendance of Directors
Meetings Held For the 12-month period ended December 31, 2016
For the 12-month period ended
December 31, 2016
Board Committee
Board 18 Director
Meetings Meetings
Audit 5 Arun Menawat (1) 6 of 13 N/A
Committee
Compensation Committee 3 Anthony Griffiths (2)(3) 17 of 18 8 of 8
Governance Committee 1 Harold O. Koch, Jr. (3)(6) 15 of 15 1 of 1
Karen A. Licitra (2)(5) 3 of 3 2 of 2
William Mackinnon (4) 18 of 18 8 of 8
Patrice Merrin (3)(4) 16 of 18 5 of 5
Thomas Wellner (3)(4) 17 of 18 5 of 5
Robert White (2) 13 of 18 3 of 3
(1) Dr. Menawat ceased being a director as of July 6, 2016.
(2) Compensation Committee
(3) Governance Committee
(4) Audit Committee
(5) Ms. Licitra joined the Board on October 1, 2016.
(6) Mr. Koch ceased being a director as of October 1, 2016.
(7) Ms. Colleran joined the Board on January 4, 2017.

Board Mandate

The Board is responsible for supervising the management of the Corporations business
and affairs. Any responsibility that is not specifically delegated to a Board committee or to
Management remains with the full Board.

The Board, through the Governance Committee, reviews and adopts a strategic process
on an annual basis that takes into consideration the opportunities and risks of the business. The
Board oversees the implementation of the strategic process by Management. Members of
Management also frequently make presentations to the Board and/or the Governance
Committee regarding updates on and discussions of the strategic process and implementation
actions.

The Board oversees the identification and management of the Corporations principal
risks. The Governance Committee has been delegated the responsibility of identifying the
principal risks of the business and ensuring the implementation of appropriate risk
management systems, which are approved by the Board upon the recommendations of the
Governance Committee. In addition, the Audit Committee, through its regular meetings with
the external counsel and their review of the findings and activities of the external auditors, are
aware of the significant risks or exposures to the Corporations business and has been given the
responsibility of reviewing the programs of risk assessment and the steps taken by the
51
Corporation to address significant risks or exposures of all types, including insurance coverage
and tax compliance, and reporting to the Board on a regular basis.

The Board, through the Governance Committee, oversees succession planning, including
the development and monitoring of Management and the Board. The Governance Committee is
responsible, to the extent possible, to satisfy itself of the integrity of the President and CEO and
other executive officers of the Corporation and that such individuals create a culture of integrity
throughout the Corporation.

The Board, through its Governance Committee, has discussed and considered how the
Corporation communicates with its Shareholders, other stakeholders and the public. As of
September 13, 2016, the Board has approved an updated disclosure policy respecting
confidentiality, disclosure, shareholder communications, dissemination procedures and insider
trading to establish, among other things, consistent guidelines for determining when
information is material, how it is disclosed and, to avoid making selective disclosure, making all
material disclosures on a widely-disseminated basis. The Governance Committee has been
delegated the responsibility of overseeing the effectiveness and compliance with such policy
and to report to the Board on a regular basis. The Corporation seeks to communicate with its
Shareholders through a variety of channels, including quarterly reports, annual reports, annual
information forms, news releases and conference calls.

The Board, through the Audit Committee and with the assistance of the Governance
Committee, reviews with Management and the Corporations auditors the adequacy of the
Corporations internal controls and management information systems on a regular basis. The
Board has established a prescribed checklist for itself, the Audit Committee, the Governance
Committee and the Compensation Committee. These governance checklists outline key
responsibilities and tasks and their scheduled performance and completion for each quarter and
year-end.

Position Descriptions

The Board has not developed written position descriptions for the Chair of each
committee of the Board. The Board believes that the charters of the Audit Committee and the
Governance Committee adequately delineate the roles of the Chairs of such committees. Each of
the Audit Committee and the Governance Committee are responsible for reviewing their
respective charters on a regular basis and to recommend to the Board any changes as
considered appropriate from time to time.

The Corporation has developed written position descriptions for the CEO and other
positions in senior management. The Governance Committee has been delegated the
responsibility of defining and updating, on a regular basis, with the President and CEO, the
position descriptions of each position in senior management.

52
Orientation and Continuing Education

An orientation and education program is available for new members of the Board,
which includes an introductory overview of the Corporation, including all relevant corporate
information, committee mandates, policies affecting directors, the role, duties and expectations
of directors and other background information. The Governance Committee is responsible for
carrying out the orientation and continuing educations functions.

To foster the Boards familiarity with corporate matters on an on-going basis, the Board
from time to time, invites senior operating management to attend Board meetings to report on
their respective business unit activities. Also, such senior operating management provide
written reports to the Board.

Share Ownership Guidelines

In order to ensure the interests of Management and directors are aligned with the
interests of the Shareholders, the Board approved the adoption of share ownership guidelines in
December of 2015. Current directors and named executive officers have three (3) years from
December 2015 to meet the share ownership requirements. New executives are expected to meet
the requirements within three (3) years following the commencement of their employment as an
executive with the Corporation.

The guidelines for covered persons, expressed as a multiple of their current annual base
salary or retainer (as applicable), are as follows:

POSITION MINIMUM OWNERSHIP

Directors 3 x Retainer

Chief Executive Officer 4 x Base Salary

Other Named Executive Officers 1 x Base Salary

Ethical Business Conduct

The Board has adopted a Code of Business Ethics and Conduct (the Code) that applies
to all directors, officers and employees of the Corporation and its subsidiaries. The Code
provides a framework of guidelines and principles to encourage ethical and professional
behavior in conducting the business of the Corporation. The Code is reviewed and monitored
on a regular basis by the Audit Committee.

The Disclosure and Compliance Committee, comprised of the Chief Executive Officer,
General Counsel and a senior vice president, monitors and reviews day-to-day compliance with
the Code. The Disclosure and Compliance Committee meets quarterly in advance of each

53
quarterly Audit Committee meeting to review and report compliance and bring forward any
issues under the Code that have arisen in the preceding financial quarter.

At each regularly scheduled quarterly meeting of the Audit Committee, the Chair of the
Audit Committee also makes a point to inquire of each person in attendance, including the
Chief Executive Officer, General Counsel and the auditors if there are any known issues related
to compliance with the Corporations Code. Any issues are then reported to the Board and the
Governance Committee.

It is the Corporations policy to seek to ensure that its best interests are paramount in all
of its dealings with customers, suppliers, consultants, competitors, existing and potential
business partners and other representatives, and are conducted in a manner that avoids actual
or potential conflicts of interest.

The text of the Code is available at www.sedar.com and the Corporations website at
www.novadaq.com or can be obtained by request from the Corporation.

Nomination of Directors

The Governance Committee is responsible for establishing qualifications for directors

and procedures for identifying possible nominees who meet these criteria. In doing so, the
Governance Committee is to consider the desired competencies and skills and the appropriate
size of the Board. When vacancies arise on the Board, the Governance Committee recommends
to the Board potential nominees, having regard to the needs of the Board.

Assessments of the Board

The Governance Committee is responsible for assessing the effectiveness of the Board as
a whole and its committees. The Governance Committee evaluates the performance and
contribution of individual members of the Board in their capacity as directors and as members
of any Board Committee and recommends timely changes in the role, size, composition and
structure of the Board and the Board committees.

During each of the quarterly meetings held each year by the Board and its committees,
that is, the Audit Committee, Compensation Committee and the Governance Committee, there
are in-camera sessions where there is opportunity to discuss the performance of individual
directors and Management. The Chairman of the Board has in-person meetings at least monthly
and otherwise holds meetings on a periodic basis with the Chief Executive Officer to discuss the
operation of the Corporation.

Board Diversity Policy

On September 13, 2016, the Board adopted an updated Board of Directors Diversity
Policy (the Diversity Policy). The Corporation recognizes the need to foster and promote
diversity among Board members and executive officers and embraces the benefits of diversity in
its workforce. The Board is committed to continued growth and development of diversity

54
among its Board members and executive officers to ensure that its members are reflective of
diverse professional experiences, skills, knowledge and other attributes that are essential to its
successful operation and the achievement of the Corporations current and future plans and
objectives.

Pursuant to the Diversity Policy, the Corporate Governance Committee shall have due
regard for the need to identify and promote individuals who are reflective of diversity for
nomination to the Board or appointment as executive officers. In particular, the Corporate
Governance Committee will consider the level of representation of women and other diverse
candidates on the Board and in senior management/executive officer positions when making
such recommendations.

The Diversity Policy provides that the Corporate Governance Committee will engage in
periodic evaluation of individual Board members to identify strengths and areas for
improvements, take measures to ensure that the nominee recruitment and identification process
fosters progression of diverse candidates, and recommend to the Board appropriate targets and
timelines in respect of representation of women on the Board.

Following the Meeting and assuming that all director nominees are elected, the Board
will be comprised of three female directors (43%). There is currently one woman (20%) that
holds an executive position with the Corporation. The Board recognizes the contribution of
diverse members to the Board and is committed to ensuring that there is significant
representation of women on the Board and at the executive level, as evidenced by the level of
diversity among current members of the Board. Notwithstanding the foregoing, as of the date
hereof, the Board has not adopted a target regarding the number of women on the Board or in
executive positions.

Board Tenure Policy

On September 13, 2016, the Board adopted an updated board tenure policy, which sets a
maximum term limit for Board members of ten (10) years and a mandatory retirement age of 72,
provided that the Governance Committee may recommend the Board to approve the extension
of a Board members term past the maximum limit or mandatory retirement age in exceptional
circumstances. If such an extension is approved by the Board, it must be publicly disclosed in
accordance with the terms of the board tenure policy.

Board Committees

The Board has three committees. Each committee has a charter, which is reviewed by the
Board and considered by the Board for approval every year.

Audit Committee

The Audit Committee is currently composed of Mr. William Mackinnon, Ms. Patrice
Merrin and Mr. Thomas Wellner. The Board considers all current members of the Audit
Committee to be independent and financially literate within the meaning of National

55
Instrument 52-110 Audit Committees. The Audit Committee has a specifically defined mandate
and charter which clearly defines its role and responsibilities. The Audit Committee is
responsible for recommending to the Board the appointment and compensation of the
Corporations external auditor; overseeing the work of the external auditor, including the
resolution of disagreements between the external auditor and Management; pre-approving all
non-audit services (or delegating such pre-approval if and to the extent permitted by law) to be
provided to the Corporation or its subsidiaries by the Corporations external auditor, satisfying
themselves that adequate procedures are in place for the review of the Corporations public
disclosure of financial information extracted or derived from its financial statements, including
periodically assessing the adequacy of such procedures, establishing procedures for the receipt,
retention and treatment of complaints received by the Corporation regarding accounting,
internal controls or auditing matters, and for the confidential, anonymous submission by
employees of the Corporation or its subsidiaries of concerns regarding questionable accounting
or auditing matters, and reviewing and approving the annual and interim financial statements,
related Management Discussion and Analysis and other financial information provided by the
Corporation to any governmental body or the public

The Audit Committee is to be comprised of a minimum of three directors, as determined

by the Board and elected by the Board on an annual basis or until their successors shall be duly
appointed. Unless a Chair of the Audit Committee is elected by the full Board, the members of
the Audit Committee may designate a chair by majority vote of the full Audit Committee
membership. The Chair of the Audit Committee is currently Mr. William Mackinnon.
Additional information regarding the Corporations Audit Committee can be found in the
Corporations Annual Information Form for the year ended December 31, 2016 (the AIF). The
AIF can be found on www.sedar.com, or a copy of it can be obtained by contacting the
Corporations Corporate Secretary at 5090 Explorer Drive, Suite 202, Mississauga, Ontario, L4W
4T9, or by telephone at 905-629-3822.

Compensation Committee

The Compensation Committee reviews and recommends for Board approval the
remuneration of directors, including the annual retainer, Option Plan participation and other
benefits conferred upon the directors.

The Compensation Committee also recommends the compensation of the Corporations

senior executives, including the President and CEO for approval by the Board. The objective of
the Compensation Committee is to set compensation which is competitive for the markets in
which the Corporation operates and which results in the creation of Shareholder value over the
long-term (i.e. Management and Board incentives are aligned with gains in the common shares
of the Corporation). The Compensation Committee seeks to ensure that base salaries are
competitive relative to the industry and bonuses, if any, reflect individual performance in the
context of the overall performance of the Corporation, as measured by issues such as
profitability, stock price and initiatives undertaken in the year.

The Compensation Committee is currently composed entirely of independent members

of the Board. Currently, the Chair of Compensation Committee is Mr. Anthony Griffiths.
56
Governance Committee

The Governance Committee is responsible for reviewing, approving and if appropriate,

recommending to the Board the compensation and objectives of the President and CEO and
other members of Management; administering the Corporations compensation plans for
Management and the Board, including the Corporations Option Plan, LTIP and other
compensation plans or structures that may be adopted by the Corporation from time-to-time;
assessing the effectiveness of the Board as a whole, and that of individual members;
periodically assessing the Corporations governance practices; proposing nominees to the
Board; recommending resignation or removal of directors or officers where their current or past
conduct is or has been improper or liable to adversely affect the Corporation or its reputation;
and orienting new directors.

The Board determines the composition of the Committee, including its number of
members. The members of the Governance Committee and its chair shall be elected by the
Board on an annual basis, or until they are removed by the Board or their successors are duly
appointed. Unless a Chair of the Governance Committee is elected by a full Board, the members
of the Governance Committee may designate a chair by majority vote of the full Governance
Committee membership. Currently, the Chair of the Governance Committee is Ms. Patrice
Merrin.

During 2016, all members of the Audit Committee, the Compensation Committee and
the Governance Committee met the Boards independence standards. If the proposed slate of
directors is elected, all new committee members will be similarly independent.

57
 Appendix B-1
OPTION PLAN RESOLUTION

BE IT RESOLVED, AS AN ORDINARY RESOLUTION, THAT:

1. The proposed amendments to the companys Second Amended and Restated Stock
Option Plan, which following such amendments, will be referred to as Third Amended
and Restated Stock Option Plan (the Option Plan), as set out in further detail in the
Corporations Management Information Circular dated April 17, 2017, is hereby
approved.

2. The unallocated stock options under the Option Plan are hereby reconfirmed and
approved. For purposes of clarity, the maximum number of the Corporations common
shares reserved for issuance under the Option Plan shall be inclusive of any the common
shares issuable pursuant to any other security based compensation arrangement of the
Corporation, including outstanding restricted share units and deferred share units
under the Corporations long-term incentive plan, as amended.

3. The Corporation shall have the ability to continue granting unallocated options under
the Option Plan until May 17, 2020, the date that is three (3) years from the date when
shareholder approval is being sought.

4. Any officer of the Corporation be and is hereby authorized, for and on behalf of the
Corporation, to execute or cause to be executed and to deliver or to cause to be
delivered, all such other documents and instruments, and to do or cause to be done all
other such acts and things, as in the opinion of such officer the Corporation may be
necessary or desirable to carry out the intent of the foregoing resolutions, such necessity
or desirability to be conclusively evidenced by the execution and delivery of any such
documents or instruments or the taking of any such actions.

58
 Appendix B-2
THIRD AMENDED AND RESTATED STOCK OPTION PLAN
(attached)

59
 NOVADAQ TECHNOLOGIES INC.

THIRD AMENDED AND RESTATED STOCK OPTION

PLAN
Effective as of May 17, 2017

1
 NOVADAQ TECHNOLOGIES INC.

THIRD AMENDED AND RESTATED STOCK OPTION PLAN

The purpose of this Third Amended and Restated Stock Option Plan (the Plan) is to
advance the interests of Novadaq Technologies Inc. (the Company) by (i) providing Eligible
Persons (as defined herein) with additional incentives; (ii) encouraging share ownership by
Eligible Persons; (iii) increasing the proprietary interest of Eligible Persons in the success of the
Company; (iv) encouraging Eligible Persons to remain with the Company or its Affiliates (as
defined herein); and (v) attracting new employees, senior officers, directors and Consultants (as
defined herein) to the Company or its Affiliates.

ARTICLE 1 GENERAL PROVISIONS

1.1. Previously Issued and Outstanding Options Continued

All stock purchase options issued and outstanding under previous option agreements,
option grants or stock option plans of the Company (collectively, Previous Plans) are
hereby continued as if issued or granted under this Plan.

1.2. Administration
(a) The Board, or such committee of the Board to which the Board may choose to
delegate such authority, will administer this Plan. In the event of such
delegation, all references to the term Board will be deemed to include
references to such committee.

(b) Subject to the limitations of this Plan, the Board has the authority: (i) to grant
Options to purchase Shares to Eligible Persons; (ii) to determine the terms,
including the limitations, restrictions and conditions, if any, upon such grants;
(iii) to interpret this Plan and to adopt, amend and rescind such administrative
guidelines and other rules relating to this Plan as it may from time to time deem
advisable, subject to required prior approval by any applicable Stock Exchange
or Governmental Entity; and (iv) to make all other determinations and to take all
other actions in connection with the implementation and administration of this
Plan as it may deem necessary or advisable. The Boards guidelines, rules,
interpretations and determinations will be conclusive and binding upon the
Company and all Participants and Eligible Persons. No member of the Board or
any person acting pursuant to authority delegated by it hereunder shall be liable
for any action or determination in connection with the Plan made or taken in
good faith, and each member of the Board and each such person shall be entitled
to indemnification by the Company with respect to any such action or
determination.

1.3. Interpretation
For the purposes of this Plan, the following terms will have the following meaning
unless otherwise defined elsewhere in this Plan:
(a) Affiliate means an affiliated entity of the Company within the meaning of
National Instrument 45-106 Prospectus Exemptions, as amended from time to
time;

(b) Associate has the meaning set out in National Instrument 45-106 Prospectus
Exemptions, as amended from time to time;

(c) Board means the Board of Directors of the Company or, as applicable, such
committee of the Board to which the Board may choose to delegate authority to
administer the Plan;

(d) Business Day means any day other than a Saturday, Sunday or statutory or
civic holiday in the City of Toronto, Ontario;

(e) Change of Control means:

(i) a reorganization, amalgamation, merger or other business combination

(or a plan of arrangement in connection with any of the foregoing), other
than solely involving the Company and any one or more of its Affiliates,
with respect to which all or substantially all of the persons who were the
beneficial owners of the Shares and other securities of the Company
immediately prior to such reorganization, amalgamation, merger,
business combination or plan of arrangement do not, following the
completion of such reorganization, amalgamation, merger, business
combination or plan of arrangement, beneficially own, directly or
indirectly, more than fifty percent (50%) of the resulting voting shares (on
a fully-diluted basis) of the Company or its successor;

(ii) the sale to a person other than an Affiliate of the Company of all or
substantially all of the Companys assets; or

(iii) a change in the composition of the Board, which occurs at a single

meeting of the shareholders of the Company or upon the execution of a
shareholders resolution, such that individuals who are members of the
Board immediately prior to such meeting or resolution cease to constitute
a majority of the Board, without the Board, as constituted immediately
prior to such meeting or resolution, having approved of such change.

(f) Consultant means a person or company, other than an employee, senior

officer or director of the Company, that: (i) is engaged to provide services to the
Company or an Affiliate, other than services provided in relation to a
distribution, (ii) provides the services under a written contract with the
Company or an Affiliate, and (iii) spends or will spend a significant amount of
time and attention on the affairs and business of the Company or an Affiliate;

(g) Company means Novadaq Technologies Inc. or any successor thereof;

(h) Date of Grant means the date on which a particular Stock Option is granted by
the Board;

(i) Disability means the inability of a Participant to perform the duties associated
with his or her position for 270 consecutive days as a result of his or her
incapacity due to physical or mental illness;

(j) Eligible Person means, subject to all applicable laws, any employee, senior
officer, director or Consultant of (i) the Company or (ii) any Affiliate of the
Company (and includes any such person who is on a leave of absence authorized
by the Board or the board of directors of any Affiliate); provided, however, that a
person subject to taxation in the United States shall only be an Eligible Person if
such person is an employee, senior officer, director or Consultant of the
Company or an employee, senior officer, director or Consultant of an entity in
which the Company has a controlling interest as defined in Section 409A;

(k) Exercise Period means the period from the Vesting Date to the Expiry Date,
both inclusive, during which a particular Stock Option may be exercised;

(l) Exercise Price means, with respect to a Stock Option:

(i) if, on the Date of Grant, the Shares are not listed on a Stock Exchange,
such amount as the Board may determine as being the fair market value
of the Shares as at that date; and

(ii) if, on the Date of Grant, the Shares are listed on a Stock Exchange, the
volume weighted average trading price of the Shares on such Stock
Exchange for the five (5) trading days immediately preceding the day on
which the Stock Option is granted, or such greater amount as the Board
may determine; provided, however, that the Exercise Price of a Stock
Option shall not be less than the minimum Exercise Price required by the
applicable rules of the Stock Exchange;

(m) Expiry Date means the date after which a particular Stock Option can no
longer be exercised, subject to amendment in accordance with the terms hereof;

(n) Governmental Entity means any applicable (a) multinational, federal,

provincial, state, municipal, local or other governmental or public department,
commission, board, bureau or agency, (b) any subdivision or authority of any of
the foregoing, or (c) any quasi-governmental body exercising (with proper
jurisdiction) any regulatory or taxing authority under or in respect of any of the
above;

(o) Insider has the meaning ascribed to reporting insiders in National

Instrument 55-104 Insider Reporting Requirements and Exemptions;

(p) Involuntary Termination means

 (i) in respect of any employee or senior officer of the Company or any of its
Affiliates:

(A) any express or implied termination by the Company or any of its

Affiliates of such employee or senior officers employment which
is not due to the termination of his or her employment for cause or
on account of death or Disability;

(B) the assignment of duties to such employee or senior officer that

are materially inconsistent with his or her position, duties,
responsibilities and status immediately prior to such assignment;

(C) any material reduction of such employees or senior officers total

compensation including base salary and incentive compensation
package, vacation entitlement or employee benefits; or

(D) any change in excess of 100 kilometres in the location at which the
employee or senior officer predominantly performs his or her
duties without his or her consent, except for required travel on
business to an extent substantially consistent with his or her
business obligations; and

(ii) in respect of any Non-Employee Director, such director ceasing to be a

director for any reason other than as a result of voluntary resignation,
death or Disability, including, for greater certainty, ceasing to be a
director as a result of resignation following a request therefor or
following a material reduction in the directors compensation, removal or
failure to be elected or appointed.

(q) LTIP means the Amended and Restated Long-Term Incentive Plan of the
Company effective as of the date hereof;

(r) Non-Employee Director means any director of the Company who is not also
acting as, or was acting as during the time of grant of Options, the President,
Chief Executive Officer, Chief Financial Officer and/or another senior officer or
employee of the Company or Affiliate;

(s) Notice of Grant means a notice of grant in substantially the form attached
hereto as Schedule A;

(t) Participant means an Eligible Person to whom a Stock Option has been
granted;

(u) Plan means this Third Amended and Restated Stock Option Plan;

(v) Reserved for Issuance means Shares which may be issued upon the exercise of
Stock Options;
(w) Section 409A means Section 409A of the United States Internal Revenue Code
of 1986, as amended;

(x) Shares means the common shares in the capital of the Company and includes
any shares of the Company into which such shares may be changed, classified,
reclassified, subdivided, consolidated or converted from time to time;

(y) Stock Option means an option to purchase Shares from treasury granted
hereunder to a Participant;

(z) Stock Exchange means the Toronto Stock Exchange or such other stock
exchange or quotation system on which the Shares are listed or quoted from time
to time;

(aa) Substitution Event means (i) a Change of Control, or (ii) a merger,

amalgamation, arrangement, business combination or other transaction pursuant
to which the Shares of the Company are converted into, or exchanged for, other
property, whether in the form of securities of another corporation, cash or
otherwise;

(bb) Termination Date means the date on which a Participant ceases to be an

Eligible Person as a result of a termination of employment or retention with the
Company or an Affiliate for any reason. For the purposes of the Plan, a
Participants employment or retention with the Company or an Affiliate shall be
considered to have terminated effective on the last day of the Participants actual
and active employment or retention with the Company or an Affiliate, whether
such day is selected by agreement with the individual, or unilaterally by the
Participant or the Company or an Affiliate, and whether with or without advance
notice to the Participant. For the avoidance of doubt, no period of notice or pay
in lieu of notice that is given or that ought to have been given under applicable
law in respect of such termination of employment or retention that follows or is
in respect of a period after the Participants last day of actual and active
employment or retention shall be considered as extending the Participants
period of employment or retention for the purposes of determining his or her
entitlement under the Plan;

(cc) Transfer includes any sale, exchange, assignment, gift, bequest, disposition,
mortgage, charge, pledge, encumbrance, grant of security interest or other
arrangement by which possession, legal title, beneficial ownership or the risk of
economic exposure passes from one person to another, or to the same person in a
different capacity, whether or not voluntary or not voluntary and whether or not
for value, and any agreement to effect any of the foregoing; and

(dd) US Participant means a Participant that is subject to taxation in the United

States;
(ee) Vesting Date means the date or dates determined in accordance with Section
2(3) on and after which a particular Stock Option, or any part thereof, may be
 exercised, subject to amendment or acceleration from time to time in accordance
with the terms hereof.

In this Plan words importing the singular number include the plural and vice versa and
words importing the masculine gender include the feminine.

This Plan is to be governed by and interpreted in accordance with the laws of the
Province of Ontario.

1.4. Shares Reserved

(a) The maximum number of Shares Reserved for Issuance under the Plan and
pursuant to any other security based compensation arrangement of the Company
(including under the LTIP) shall be equal to 10% of the number of shares in the
capital of the Company that are issued and outstanding from time to time on a
non-diluted basis.

(b) The number of Shares Reserved for Issuance that: (i) have vested and been
exercised, (ii) were not exercised within the Exercise Period, or (iii) have been
forfeited, surrendered, cancelled or otherwise terminated prior to the delivery of
the Shares pursuant to a grant of Stock Options shall, in each case, automatically
become available to be made and subject to new grants under this Plan.

(c) Unless the Company has received requisite Shareholder approval, under no
circumstances shall this Plan, together with all of the Companys previously
established or proposed compensation or incentive plans or mechanisms
involving the issuance or potential issuance of Shares, including the LTIP, result,
at any time, in:

(i) the aggregate number of Shares issuable to Insiders (as a group) at any
point in time exceeding 10% of the Companys issued and outstanding
Shares on a non-diluted basis;

(ii) the issuance to Insiders (as a group), within a one-year period, of an

aggregate number of Shares exceeding 10% of the Companys issued and
outstanding Shares on a non-diluted basis; or

(iii) the grant to (a) Non-Employee Directors, as a group, of an aggregate

number of Shares exceeding 1% of the Companys issued and
outstanding Shares on a non-diluted basis, or (b) any individual Non-
Employee Director of more than $150,000 worth of Shares annually,
provided that the maximum amount of Shares Reserved for Issuance
under this Plan in any given one-year period for any individual Non-
Employee Director may not exceed $100,000.

ARTICLE 2 SHARE OPTION PLAN

2.1. Application
Grants of Stock Options to Eligible Persons shall be governed by this Article 2.
2.2. Grants
The Board may from time to time in its sole discretion determine those Eligible Persons,
if any, to whom Stock Options are to be granted and the number of Shares in respect of
which each Stock Option may be exercised. The award of a Stock Option to an Eligible
Person at any time shall neither entitle such Eligible Person to receive nor preclude such
Eligible Person from receiving a subsequent Stock Option.

2.3. Expiry Date; Vesting of Options

(a) Subject to Section 2.5 and any applicable rules of the Stock Exchange, and unless
otherwise fixed by the Board at the time the particular Stock Option is granted
and set forth in the Notice of Grant, the Expiry Date of a Stock Option will be the
tenth (10th) anniversary of the Date of Grant.

(b) Notwithstanding any other provision hereof (but subject to the last sentence of
this Section 2.3(b)), if the Expiry Date of any vested Stock Option falls on, or
within nine (9) Business Days immediately following, a date upon which such
Eligible Person is prohibited from exercising such Stock Option due to a black-
out period or other trading restriction imposed by the Company, then such
options will automatically be deemed to, without any further act or formality,
expire instead on the date which is the tenth (10th) Business Day after the end of
the relevant black out period, such tenth (10th) Business Day to be considered the
expiration of the term of such option for all purposes under this Plan.
Notwithstanding the foregoing, no Stock Option granted to a US Participant may
be extended beyond the original Expiry Date set forth in the Notice of Grant

(c) Unless otherwise fixed by the Board at the time the particular Stock Option is
granted and set forth in the Notice of Grant, and subject to Section 2.5, Stock
Options will vest over a three (3) year period and may be exercised in whole or
in part at any time from time to time as follows:

PERIOD NUMBER OF STOCK OPTIONS

VESTED

On or after the first anniversary of Date 33%

of Grant

On or after the second anniversary of 67%

Date of Grant

On or after the third anniversary of 100%

Date of Grant

2.4. Exercise Price

The exercise price for the Shares underlying a Stock Option will be the Exercise Price.
2.5. Termination, Retirement, Death, Departure
Any Stock Option or part thereof not exercised within the Exercise Period will terminate
and become null, void and of no effect as of the day immediately following the Expiry
Date determined under Section 2.3(a) hereof, unless the Expiry Date is determined to be
an earlier date as follows:

(a) Death - The Expiry Date of a Stock Option held by a Participant that had vested
immediately prior to his or her death will be the earlier of the expiry date shown
on the relevant Notice of Grant and the date that is one hundred and eighty (180)
days after the date of his or her death. Stock Options that are outstanding but
unvested immediately prior to a Participants death will immediately terminate
and become null, void and of no effect upon the death of the Participant. If a
Participant dies, the legal representatives of the Participant may exercise such of
the Participants Stock Options that, by their terms, were exercisable on the date
of death, prior to the Expiry Date.

(b) Disability In the event of the Disability of a Participant, the Board may in its
discretion determine that such Participant shall no longer be an Eligible Person.
In the event a Participant ceases to be an Eligible Person as a result of Disability,
then the Expiry Date of a Stock Option that had vested on the date such
Participant ceases to be an Eligible Person will be the earlier of the expiry date
shown on the relevant Notice of Grant and the date one hundred and eighty
(180) days following the date such Participant ceases to be an Eligible Person.
Stock Options that are outstanding but unvested on the date such Participant
ceases to be an Eligible Person will immediately terminate and become null, void
and of no effect.

(c) Retirement In the event a Participant ceases to be an Eligible Person as a result

of his or her retirement in accordance with the Companys then applicable
retirement policy, the Expiry Date of a Stock Option that had vested on the date
such Participant ceases to be an Eligible Person will be the earlier of the Expiry
Date shown on the relevant Notice of Grant and the date one hundred and eighty
(180) days following the date such Participant ceases to be an Eligible Person.
The Stock Options that are outstanding but unvested on the date such Participant
ceases to be an Eligible Person will immediately terminate and become null, void
and of no effect

(d) Voluntary Resignation, Termination of Employment or Ceasing to be a

Consultant. In the event a Participant ceases to be an Eligible Person as a result
of (i) his or her voluntary resignation, (ii) termination, whether with cause or
without cause, from any position or employment with the Company or its
Affiliates (other than his or her retirement), or (iii) the termination of the
Participants service agreement, whether for breach of agreement or otherwise,
then the Expiry Date of a Stock Option that had vested on the date such
Participant ceases to be an Eligible Person will be the earlier of the Expiry Date
shown on the relevant Notice of Grant and the date thirty (30) days following the
date such Participant ceases to be an Eligible Person. The Stock Options that are
 outstanding but unvested on the date such Participant ceases to be an Eligible
Person will, subject to Section 5.1, immediately terminate and become null, void
and of no effect. For purposes of the Plan, a Participants employment shall
conclusively be deemed to have ceased on the date that such Participant ceases to
be actually and actively employed by the Company or its Affiliates (and for
greater certainty shall not include any notice period required by any applicable
statute or common law).

(e) Ceasing to be a Director In the event that a Participant who is a director of the
Company (and not an employee or senior officer of the Company or any of its
Affiliates) ceases to be a director, then the Expiry Date of a Stock Option that had
vested on the date such Participant ceases to be a director will be the earlier of
the Expiry Date shown on the relevant Notice of Grant and the date that is one
hundred and eighty (180) days following the date such Participant ceases to be
an Eligible Person. The Stock Options that are outstanding but unvested on the
date such Participant ceases to be a director will, subject to Section 5.1,
immediately terminate and become null, void and of no effect. The Participant
shall have no entitlement to damages or other compensation arising from or
related to not receiving any awards which would have vested or accrued to the
Participant after the Termination Date. However, nothing herein is intended to
limit any statutory or other legal entitlements on termination and such statutory
or other legal entitlements shall, if required, apply despite this language to the
contrary.

(f) Notwithstanding anything contained herein to the contrary, the Board shall not
have discretion to extend the original Expiry Date set forth in the Notice of Grant
for any Stock Option granted to a US Participant.

2.6. Notice of Grant

Each Stock Option must be confirmed, and will be governed, by a Notice of Grant
signed by the Company and the Participant.

2.7. Shareholder Approval

Where required by the Stock Exchange or any Governmental Entity, shareholder
approval to the grant of Stock Options shall be obtained prior to the exercise of Stock
Options granted by the Company.

2.8. Payment of Exercise Price; Exercise of Stock Options

(a) Stock Options may only be exercised by the Participant or his or her legal
representative. Participants may exercise their Stock Options, subject to the
restrictions set out below, to acquire Shares by delivering to the Company a
notice of option exercise (the Exercise Notice), substantially in the form
attached hereto as Schedule B, together with a bank draft or certified cheque in
an amount equal to the aggregate Exercise Price of the Shares to be purchased
pursuant to the exercise of Stock Options.
 (b) Notwithstanding Section 2.8(a) hereof, but subject to any adjustments
contemplated by Section 5.2, Stock Options may not be exercised unless the
aggregate purchase price of the Shares acquired on exercise of such Stock
Options is greater than or equal to US$1,000.

(c) As soon as practicable following the receipt of the Exercise Notice and a bank
draft or certified cheque in accordance with Section 2.8(a), the Company will
deliver to the Participant a certificate for the Shares so purchased.

(d) The issuance of Shares by the Company to a Participant pursuant to the exercise
of any Stock Option is subject to compliance with all applicable laws, rules and
regulations of all Governmental Entities applicable to the issuance and
distribution of such Shares and to the requirements of any Stock Exchange on
which the Shares may be listed or quoted, including any requirements with
respect to the legending of certificates representing the Shares issued pursuant to
the exercise of any Stock Option. The Participant agrees: (i) to comply with all
such laws, rules, regulations and requirements, (ii) to furnish to the Company
any information, report and/or undertakings required to comply with all such
laws, rules, regulations and requirements, and (iii) to fully cooperate with the
Company in complying with such laws, rules, regulations and requirements.

(e) Upon the exercise of Stock Options, Eligible Persons who are employed by the
Company or an Affiliate shall have withheld at source from other remuneration
all income, social security and other payroll taxes and withholdings required by
law on the employment benefit realized upon the exercise.

2.9. Amendment of Option Plan

(a) The Board shall have the power and authority to approve amendments relating to the
Plan and to the Stock Options, without further approval of the shareholders or
Participants, to the extent such amendment:

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

(ii) is necessary to comply with applicable law or the requirements of the TSX;

(iii) is an amendment to the Plan respecting administration of the Plan;

(iv) alters, extends or accelerates the terms of vesting applicable to any Stock Option;

(v) changes the termination provisions of a Stock Option or the Plan which does not
entail an extension beyond the original expiry date of a Stock Option;

(vi) is an amendment to the Plan of a housekeeping nature; or

 (vii) does not require shareholder approval under applicable law (including, without
limitation, the rules, regulations and policies of TSX).

(b) Notwithstanding Section 2.9(a), the Board shall be required to obtain shareholder
approval in order to: (i) increase the maximum number of Shares issuable under the
Plan, (ii) reduce the exercise price or purchase price of any Stock Option or cancel and
reissue any Stock Option, (iii) extend the term of any Stock Option beyond the original
Expiry Date, (iv) make a change to the class of persons eligible to participate under the
Plan, (v) make any amendment which would permit any Stock Option granted under
the Plan to be transferable or assignable other than by will or under succession laws
(estate settlement), (vi) increase the participation limits prescribed in Section 1.4(c)
relating to the grant of Stock Option to Non-Employee Directors and Insiders, or (vii)
amend this Section 2.9 of the Plan.

2.10. Assignment of Stock Options

Stock Options (and any rights thereunder) are not assignable or Transferable. Any
purported assignment or Transfer of Stock Options will not be recognized by the
Company and will result in the immediate expiry and termination of any such Stock
Options and any rights relating thereto.

2.11 Alternative Share Compensation Arrangements

Notwithstanding any other provision of this Plan, the Board may, in its discretion, enter
into alternative share compensation arrangements with Eligible Persons who are non-
residents if the Board determines that, as a result of the tax consequences of Stock
Option grants under this Plan to such non-resident Eligible Persons, the tax
consequences to such non-resident Eligible Persons are materially adverse to such non-
resident Eligible Persons as compared to the tax consequences of Stock Option grants to
Eligible Persons that are not non-residents. In such circumstances the Board may choose
to structure an alternative share compensation arrangement that does not provide
material adverse tax consequences to such non-resident Eligible Persons, but that is
substantially economically equivalent, in the Boards determination, to the grant of Stock
Options under the Plan and is not otherwise materially prejudicial to the Company. For
greater certainty, any Shares issued pursuant to any alternative share compensation
arrangements under this Section 2.11 shall be considered to be Stock Options for the
purposes of determining the number of Shares issuable pursuant to this Plan.

ARTICLE 3 ASSUMPTION OR SUBSTITUTION OF STOCK OPTIONS

3.1. Substitution

(a) In the event of a Substitution Event, any surviving or acquiring corporation

must, unless Article 4 applies:

(i) assume any Stock Option outstanding under the Plan on substantially the
same economic terms and conditions as the Plan; or
 (ii) substitute or replace similar stock options (including an award to acquire
the same consideration paid to the securityholders of the Company in the
transaction effecting the Substitution Event) for those Stock Options
outstanding under the Plan on substantially the same economic terms
and conditions as the Plan.

(b) In the event any surviving or acquiring Company neglects or refuses (as
determined by the Board, acting reasonably) to assume any Stock Options or to
substitute or replace similar stock options for those outstanding Stock Options
under the Plan in connection with a Substitution Event, then with respect to any
Stock Options held by Participants, the vesting of such Stock Options (and, if
applicable, the time during which such Stock Options may be exercised) will
automatically and without further action by the Board or the Company be
immediately accelerated so that such Stock Options will be fully vested. In
addition, in such event, the Board may determine that outstanding Stock Options
will terminate if not exercised (if applicable) at or prior to such Substitution
Event.

(c) No fractional Shares or other security will be issued upon the exercise of any
Stock Option and, accordingly, if as a result of a Substitution Event or otherwise,
a Participant would become entitled to a fractional Share or other security, such
Participant will have the right to acquire only the next lowest whole number of
Shares or other security and no payment or other adjustment will be made with
respect to the fractional interest so disregarded; provided, however, that a cash
payment equal to the value of all fractional interests disregarded pursuant to this
Section 3.1(c) shall be made to a Participant if the number of Stock Options so
disregarded exceeds five percent (5%) of the total number of Stock Options
exercised by such Participant; provided, further, that the foregoing proviso shall
not apply to US Participants.

(d) Notwithstanding any other provision of this Plan, in the event of a potential
Substitution Event, the Board may, in its discretion: (i) terminate, conditionally
or otherwise and on such terms as it sees fit, the Stock Options not exercised
following successful completion of such Substitution Event; and (ii) accelerate,
conditionally or otherwise and on such terms as it sees fit, the Vesting Date or
otherwise modify the terms of the Stock Options to assist the Participants to
obtain the advantage of holding Shares during the Substitution Event. If the
Substitution Event referred to in this Article 3 is not completed during the time
specified therein (as the same may be extended), the Stock Options which vested
pursuant to this Article 3 must be returned by the Participant to the Company
and will be reinstated as unvested Stock Options and the original terms
applicable to such Stock Options will apply. If any of the Stock Options that
vested pursuant to this Article 3 were exercised, such Shares must be returned to
the Company for cancellation. The determination of the Board in respect of any
such Substitution Event will for the purposes of this Plan be final, conclusive and
binding. Notwithstanding the foregoing, any Stock Option granted to a US
 Participant shall only be adjusted in such a manner that complies with Section
409A.

ARTICLE 4 TAKE-OVER BIDS

4.1. Take-over Bids

(a) In the event of a potential change of control following a take-over bid (as
defined herein), the Board may, in its discretion, conditionally or otherwise and
on such terms as it sees fit, accelerate the Vesting Date of all of a Participants
unvested Stock Options to a date prior to the expiry date of such bid or offer,
such that all of a Participants Stock Options will immediately vest at such time
and the Vesting Date in connection with such Stock Options will be adjusted
accordingly. In such event, all Stock Options so vested will be exercisable,
conditionally or otherwise, from such date until their respective Expiry Dates so
as to permit the Participant to tender the Shares received upon such exercise
pursuant to the bid or offer. For purposes of this Article 4, a potential change of
control following a take-over bid will be deemed to occur upon a formal bid or
tender offer for Shares being made as a result of which the offeror and its
affiliates would, if successful, beneficially own, directly or indirectly, fifty
percent (50%) or more of the Shares then outstanding.

(b) Notwithstanding any other provisions of this Plan, in the event of a potential
change of control following a take-over bid, the Board will have the power, if
determined appropriate (i) to terminate, conditionally or otherwise and on such
terms as it sees fit, the Stock Options not exercised following successful
completion of such event, and/or (ii) to modify the terms of the Stock Options,
conditionally or otherwise and on such terms as it sees fit, in order to assist the
Participants to tender their securities into the take-over bid, including for greater
certainty permitting such Participants to exercise their Stock Options on a
cashless basis. For greater certainty, in the event that the acquiring entity
acquires one hundred percent (100%) of the outstanding Shares following the
take-over bid, the Board will have the power, if determined appropriate, to
terminate the Stock Options not exercised upon the expiry of the time period for
tendering to the acquiring entity for purchase.

(c) If the take-over bid referred to in Section 4.1(a) is not completed within the time
specified therein (as the same may be extended), the Stock Options that vested
pursuant to Section 4.1(a) (if any) must be returned by the Participant to the
Company and will be reinstated as unvested Stock Options and the original
terms applicable to such Stock Options will apply. If any of the Stock Options
that vested pursuant to this Section 4.1(a) (if any) were exercised, such Shares
must be returned to the Company for cancellation. The determination of the
Board with respect to any such event will for the purposes of this Plan be final,
conclusive and binding.

ARTICLE 5 MISCELLANEOUS

5.1. Involuntary Termination

 In the event of a Substitution Event or a change of control (as defined below) and upon
an Involuntary Termination of the Participant at any time within the ninety day (90) day
period prior to or the one hundred and eighty (180) day period following the date of
completion of the transaction effecting such Substitution Event or change of control, all
of a Participants unvested Stock Options will immediately vest, and the Vesting Date in
connection with such Stock Options will be adjusted accordingly. For the purposes of
this section 5.1, a change of control will be deemed to occur upon a formal bid or
tender offer for Shares being made as a result of which the offeror and its affiliates
acquires beneficial ownership (directly or indirectly) of fifty percent (50%) or more of the
Shares then outstanding, or upon any issuance of Shares by the Company (whether by
way of public offering or private placement) that results in a single shareholder
acquiring beneficial ownership (directly or indirectly) of fifty percent (50%) or more of
the Shares outstanding after such issuance (provided that such shareholder did not, at
the time of such issuance, have beneficial ownership, direct or indirect, of fifty percent
(50%) or more of the Shares).

5.2 Capital Adjustments

If there is any change in the outstanding Shares by reason of a stock dividend or split,
recapitalization, consolidation, combination or exchange of shares, reclassification,
conversion or other fundamental corporate change, the Board will make, subject to any
prior approval required of the Stock Exchange or other applicable Governmental
Entities, if any, an appropriate substitution or adjustment to the Shares or other
securities of the Company, including in (i) the number or kind of shares or other
securities reserved for issuance pursuant to this Plan; and (ii) the exercise price of those
unexercised Stock Options; provided, however, that no substitution or adjustment will
obligate the Company to issue fractional Shares upon the exercise of a Stock Option.
Notwithstanding the foregoing, any Stock Option granted to a US Participant shall only
be adjusted in such a manner that complies with Section 409A.

5.3. Non-Exclusivity
Nothing contained herein will prevent the Board from adopting other or additional
compensation arrangements for the benefit of any Eligible Person or Participant, subject
to any required Stock Exchange, regulatory or shareholder approval.

5.4. Termination
(a) The Board may amend, suspend or terminate this Plan or any portion thereof at
any time in accordance with applicable legislation, and subject to any required
regulatory or shareholder approval. Subject to Articles 3 and 4 hereof, no
amendment, suspension or termination will alter or impair any Stock Options
under the Plan, or any rights pursuant thereto, granted previously to any
Participant without the consent of that Participant.

(b) If this Plan is terminated, the provisions of this Plan and any administrative
guidelines, and other rules adopted by the Board and in force at the time of this
Plan, will continue in effect as long as any Stock Options under the Plan or any
rights pursuant thereto remain outstanding. However, notwithstanding the
 termination of the Plan, the Board may make any amendments to the Plan or
Stock Options it would be entitled to make if the Plan were still in effect.

5.5. Compliance with Legislation

The Board may postpone or adjust the exercise of any Stock Option or the issue of any
Shares pursuant to this Plan as the Board in its discretion may deem necessary in order
to permit the Company to effect or maintain qualification of this Plan or the Shares
issuable pursuant thereto under the securities laws of any applicable jurisdiction, or to
determine that the Shares and this Plan are exempt from such registration. The
Company is not obligated by any provision of this Plan or any grant hereunder to sell or
issue shares in violation of any applicable law. In addition, if the Shares are listed on a
Stock Exchange, the Company will have no obligation to issue any Shares pursuant to
this Plan unless the Shares have been duly listed, upon official notice of issuance, on the
Stock Exchange on which the Shares are listed for trading.

5.6. Section 409A

The Stock Options granted to each US Participant are intended to be exempt from
Section 409A and each Stock Option and this Plan shall be interpreted consistent with
such intent. Neither the Company nor any Affiliate shall have any liability with respect
to taxes or other penalties imposed by Section 409A. Notwithstanding any provision of
this Plan to the contrary, with respect to a US Participant, (i) the period in which the
Stock Option may be exercised shall not be extended beyond the original Expiry Date set
forth in the Notice of Grant and (ii) the exercise price shall not be reduced, in either case,
unless such extension or reduction complies with Section 409A.

5.7 Effective Date

This Plan will become effective upon the approval of the Plan by the Board, subject to
any required Stock Exchange, regulatory and/or shareholder approval.

5.8 No Other Rights

Nothing herein contained and no grant of Stock Options pursuant to the Plan shall be
deemed to give any Eligible Person the right to be retained as an Eligible Person or the
right to be retained as an employee, senior officer, director or Consultant of the
Company. For greater certainty, a period of notice, if any, or payment in lieu thereof,
upon termination of employment, wrongful or otherwise, shall not be considered as
extending the period of employment for the purposes of the Plan. Stock Options are not
Shares, and the grant of a Stock Option to an Eligible Person does not entitle such
Eligible Person to any rights as a shareholder of the Company.
 SCHEDULE A
NOTICE OF GRANT OF STOCK OPTIONS

NOVADAQ TECHNOLOGIES INC.

Telephone: (905) 629-3822

Facsimile: (905) 629-0282

[Date]

[Name & Address]

Dear [Name]:

This is to advise you that in recognition of your contribution to our business, you have been
selected to participate in the Third Amended and Restated Stock Option Plan (the Plan) of
Novadaq Technologies Inc. (the Company). On you were granted a stock option
to acquire ______ common shares of the Company at a price of $______ per common share.

Your stock option is subject to the provisions of the Plan, a copy of which is attached to this
notice. The stock option granted to you by the Company will be vested in accordance the Plan
and as follows:

PERIOD NUMBER OF STOCK OPTIONS

VESTED

On or after the first anniversary of Date 33%

of Grant

On or after the second anniversary of 67%

Date of Grant

On or after the third anniversary of 100%

Date of Grant

The Expiry Date of your stock options is ____________________.

By accepting this grant you represent and warrant to the Company that your participation in
the Companys Plan is voluntary and that you have not been induced to participate by
expectation of engagement, appointment, employment, continued engagement, continued
appointment or continued employment, as applicable.

You acknowledge that you have no entitlement to damages or other compensation arising from
or related to not receiving any awards which would have vested or accrued to you after the
Termination Date. However, nothing herein is intended to limit any statutory or other legal
entitlements on termination and such statutory or other legal entitlements shall, if required,
apply despite this language to the contrary. In additional, no period of notice or payment in lieu
of notice that follows your last day of actual and active employment shall be deemed to extend
your period of employment for the purposes of determining your entitlement under the Plan.

The grant of options described above is strictly confidential and the information concerning the
number or price of shares granted under this option should not be disclosed to anyone.

Yours sincerely,

The undersigned acknowledges receipt of a copy of the Plan and acknowledges and agrees that
the undersigneds Stock Options are subject to and governed by the provisions of the Plan.

Dated this _____ day of __________, 20__.

_____________________________

[Name]
 SCHEDULE B

NOTICE OF OPTION EXERCISE

NOVADAQ TECHNOLOGIES INC.

THIRD AMENDED AND RESTATED STOCK OPTION PLAN

To: Chief Financial Officer, Novadaq Technologies Inc. (the Company)

Please be advised that in connection with stock options granted to me under the
Companys Third Amended and Restated Stock Option Plan pursuant to the Notice of Grant of
Stock Options dated _____________ (the Stock Options), the undersigned hereby wishes to
exercise his or her option to purchase _____________ shares (the Option Shares) in the capital
of the Company at a price of $___________ per share, for a total payment of $_____________
(the Exercise Payment). I hereby agree to assist the Company in the filing of, and will file on
a timely basis, all reports that I may be required to file under applicable securities laws. I
understand that the fair market value assigned to my Stock Options for income tax purposes
will be the closing price of the shares of the Company on the TSX (or such other stock exchange
or over the counter quotation system on which the shares may be listed or quoted from time to
time) on the date of this exercise. I further understand that this request to exercise my Stock
Options is irrevocable.

Please find enclosed a bank draft or certified cheque in the amount of

$____________________, representing the aggregate Exercise Payment payable to the Company
in full payment for the Option Shares.
The Option Shares issued on the exercise of my Stock Options specified above are to be
registered as follows:

(Print Registrees Name)

(Address)

(Telephone Number)

(Facsimile Number) (Optionees Signature)

(E-Mail Address) (Date)

 Appendix C-1
LTIP RESOLUTION

BE IT RESOLVED, AS AN ORDINARY RESOLUTION, THAT:

1. The proposed amendments to the companys Long Term Incentive Plan, which following
such amendments, will be referred to as the Amended and Restated Long Term Incentive
Plan (the LTIP), as set out in further detail in the Corporations Management
Information Circular dated April 17, 2017, is hereby approved.

2. The unallocated units under the LTIP are hereby reconfirmed and approved. For purposes
of clarity, the maximum number of the Corporations common shares reserved for issuance
under the LTIP shall be inclusive of any the common shares issuable pursuant to any other
security based compensation arrangement of the Corporation, including outstanding
options under the Corporations Second Amended and Restated Stock Option Plan, as
amended.

3. The Corporation shall have the ability to continue granting unallocated restricted share
units and deferred share units under the LTIP until May 17, 2020, the date that is three (3)
years from the date when shareholder approval is being sought.

4. Any officer of the Corporation be and is hereby authorized, for and on behalf of the
Corporation, to execute or cause to be executed and to deliver or to cause to be delivered, all
such other documents and instruments, and to do or cause to be done all other such acts and
things, as in the opinion of such officer the Corporation may be necessary or desirable to
carry out the intent of the foregoing resolutions, such necessity or desirability to be
conclusively evidenced by the execution and delivery of any such documents or instruments
or the taking of any such actions.
 Appendix C-2
AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN
(attached)
AMENDED AND RESTATED LONG TERM INCENTIVE PLAN

Effective as of May 17, 2017

 NOVADAQ TECHNOLOGIES INC.

AMENDED AND RESTATED LONG TERM INCENTIVE PLAN

The purpose of this Plan is to advance the interests of the Company by: (i) providing
Eligible Persons with additional incentives; (ii) rewarding performance by Participants; (iii)
increasing the proprietary interest of Participants in the success of the Company; (iv)
encouraging Participants to remain with the Company or its Affiliates; and (v) attracting new
directors, employees, officers and Consultants to the Company or its Affiliates.

ARTICLE 1
INTERPRETATION; ADMINISTRATION

Section 1.1 Definitions

For the purposes of this Plan, the following terms shall have the following meanings:

(a) Affiliate has the meaning ascribed to that term under National Instrument 45-
106 Prospectus Exemptions, as amended from time to time;

(b) Annual Board Retainer means the annual retainer paid by the Company to a
director in a Fiscal Year for service on the Board, together with Board committee
fees, attendance fees and additional fees and retainers to committee chairs;

(c) Applicable Withholding Taxes has the meaning ascribed thereto in Section
3.4;

(d) Associate has the meaning ascribed to that term under National Instrument
45-106 Prospectus Exemptions, as amended from time to time;

(e) Award Date means the date(s) during the Fiscal Year on which the Annual
Board Retainer is awarded;

(f) Board means the Board of Directors of the Company or, as applicable, such
committee of the Board to which the Board may choose to delegate authority to
administer the Plan;

(g) Business Day means any day other than a Saturday, Sunday or statutory or
civic holiday in the City of Toronto, Ontario;

(h) Cash Equivalent means (a) if the Participant regularly receives salary, wages
or Annual Board Retainer in United States dollars, the Market Value multiplied
by the number of vested Units in the Participants notional account, net of any
Applicable Withholding Taxes, on the Settlement Date or DSU Termination Date,
as applicable, or (b) the Market Value converted into the currency in which the
Participant regularly receives wages, salary or Annual Board Retainer,
multiplied by the number of vested Units in the Participants notional account,
net of any Applicable Withholding Taxes, on the Settlement Date or DSU
Termination Date, as applicable. For greater certainty, the conversion of the

1
 Market Value into the applicable currency will be based on the exchange rate
provided by the Bank of Canada on the Settlement Date.

(i) Change of Control Event means:

(i) a reorganization, amalgamation, merger or other business combination

(or a plan of arrangement in connection with any of the foregoing), other
than solely involving the Company and any one or more of its Affiliates,
with respect to which all or substantially all of the persons who were the
beneficial owners of the Shares and other securities of the Company
immediately prior to such reorganization, amalgamation, merger,
business combination or plan of arrangement do not, following the
completion of such reorganization, amalgamation, merger, business
combination or plan of arrangement, beneficially own, directly or
indirectly, more than fifty percent (50%) of the resulting voting shares (on
a fully-diluted basis) of the Company or its successor;

(ii) the sale to a person other than an Affiliate of the Company of all or
substantially all of the Companys assets; or

(iii) a change in the composition of the Board, which occurs at a single

meeting of the shareholders of the Company or upon the execution of a
shareholders resolution, such that individuals who are members of the
Board immediately prior to such meeting or resolution cease to constitute
a majority of the Board, without the Board, as constituted immediately
prior to such meeting or resolution, having approved of such change;

(j) Company means Novadaq Technologies Inc. or any successor thereof;

(k) Consultant means a person or company, other than an employee, senior

officer or director of the Company, that: (i) is engaged to provide services to the
Company or an Affiliate, other than services provided in relation to a
distribution, (ii) provides the services under a written contract with the
Company or an Affiliate, and (iii) spends or will spend a significant amount of
time and attention on the affairs and business of the Company or an Affiliate;

(l) Date of Grant means the date on which a particular Unit is granted by the
Board as evidenced by the Grant Agreement pursuant to which the applicable
Unit was granted;

(m) Deferred Share Unit or DSU means a unit designated as a Deferred Share
Unit representing the right to receive one Share or the Cash Equivalent in
accordance with the terms set forth in the Plan;

(n) Disability means the inability of a Participant to perform the duties associated
with his or her position for 270 consecutive days as a result of his or her
incapacity due to physical or mental illness;

2
(o) DSU Participant means a director of the Company (who for greater certainty
may also be an employee, if applicable) who has been designated by the
Company for participation in the Plan and who has agreed to participate in the
Plan and to whom Deferred Share Units have or will be granted thereunder;

(p) DSU Payment Date means, with respect to a Deferred Share Unit granted to a
DSU Participant, no later than December 31 of the Fiscal Year following the
Fiscal Year in which the DSU Termination Date occurred;

(q) DSU Settlement Notice means a notice, in the form contained in Schedule F
attached hereto, by a DSU Participant to the Company electing the desired form
of Settlement of Deferred Share Units;

(r) DSU Termination Date of a DSU Participant means the day that the DSU
Participant ceases to be a director and, if applicable, an employee of the
Company for any reason including, without limiting the generality of the
foregoing, as a result of retirement, death, voluntary or involuntary termination,
Disability or resignation;

(s) Elected Amount has the meaning ascribed thereto in Section 6.3(1);

(t) Election Notice has the meaning ascribed thereto in Section 6.3(1);

(u) Eligible Person means any director, officer, employee or Consultant of the
Company or any of its Affiliates and any such persons personal holding
company, as designated by the Board in a resolution;

(v) Expire means, with respect to a Unit, the termination of such Unit, on the
occurrence of which such Unit is void, incapable of settlement, and of no value
whatsoever; and Expires and Expired have a similar meanings;

(w) Fiscal Year means the fiscal year of the Company, which is the annual period
commencing January 1 and ending the following December 31;

(x) Grant Agreement means an agreement between the Company and a

Participant under which a Unit is granted, substantially in the form attached
hereto as Schedule A in reference to RSUs, and Schedule D in reference to
DSUs, as each may be amended from time to time;

(y) Insider has the meaning ascribed to reporting insiders in National

Instrument 55-104 Insider Reporting Requirements and Exemptions;

(z) ITA means the Income Tax Act (Canada), and the regulations thereunder;

(aa) Market Value at any date in respect of the Shares, means the volume weighted
average trading price of all Shares traded on the NASDAQ Stock Market for the
five (5) trading days immediately preceding such date (or, if such Shares are not
listed and posted for trading on the NASDAQ Stock Market, on the TSX or such

3
 other stock exchange on which such Shares are listed and posted for trading as
may be selected for such purpose by the Board). In the event that such Shares are
not listed and posted for trading on any stock exchange, the Market Value shall
be the fair market value of such Shares as determined by the Board in its sole and
absolute discretion;

(bb) Non-Employee Director means any director of the Company who is not also
acting as, or was acting as during the time of grant of any securities, the
President, Chief Executive Officer, Chief Financial Officer and/or another senior
officer or employee of the Company or Affiliate;

(cc) Participant means a RSU Participant or a DSU Participant, as applicable;

(dd) Performance Criteria shall mean criteria, if any, established by the Board
which, without limitation, may include criteria based on the financial
performance of the Company and/or an Affiliate;

(ee) Plan means this Amended and Restated Long Term Incentive Plan, as
amended from time to time;

(ff) Restricted Share Unit or RSU means a unit granted or credited to a RSU
Participants notional account pursuant to the terms of this Plan that, subject to
the provisions hereof, entitles a RSU Participant to receive one Share or the Cash
Equivalent in accordance with the terms set forth in the Plan;

(gg) RSU Participant means an Eligible Person who has been designated by the
Company for participation in the Plan and who has agreed to participate in the
Plan and to whom a Restricted Share Unit has been granted or will be granted
thereunder;

(hh) RSU Settlement Notice means a notice, in the form contained in Schedule B
attached hereto, by a RSU Participant to the Company electing to settle vested
Restricted Share Units;

(ii) RSU Termination Date means the date on which a RSU Participant ceases to
be an Eligible Person as a result of a termination of employment with the
Company or an Affiliate for any reason, including death, retirement, Disability or
resignation. For the purposes of the Plan, a RSU Participants employment with
the Company or an Affiliate shall be considered to have terminated effective on
the last day of the RSU Participants actual and active employment with the
Company or Affiliate, whether such day is selected by agreement with the
individual, or unilaterally by the RSU Participant or the Company or Affiliate,
and whether with or without advance notice to the RSU Participant. For the
avoidance of doubt, no period of notice or pay in lieu of notice that is given or
that ought to have been given under applicable law in respect of such
termination of employment that follows or is in respect of a period after the RSU
Participants last day of actual and active employment shall be considered as

4
 extending the RSU Participants period of employment for the purposes of
determining his or her entitlement under the Plan;

(jj) RSU Vesting Date means the date or dates determined in accordance with the
terms of the Grant Agreement entered into in respect of such Restricted Share
Units (as described in Section 4.4), on and after which a particular Restricted
Share Unit may be settled, subject to amendment or acceleration from time to
time in accordance with the terms hereof;

(kk) Settlement Date has the meaning ascribed thereto in Section 5.1(1);

(ll) Share means a common share in the capital of the Company, and includes any
shares of the Company into which such common shares may be converted,
reclassified, redesignated, subdivided, consolidated, exchanged or otherwise
changed;

(mm) Shareholders means holders of Shares;

(nn) Stock Option Plan means the Companys third amended and restated stock
option plan effective as of May 17, 2017;

(oo) Substitution Event means (i) a Change of Control, or (ii) a merger,

amalgamation, arrangement, business combination or other transaction pursuant
to which the Shares of the Company are converted into, or exchanged for, other
property, whether in the form of securities of another entity, cash or otherwise;

(pp) Termination Notice has the meaning ascribed thereto in Section 6.4(1);

(qq) TSX means the Toronto Stock Exchange; and

(rr) Units means DSUs and RSUs, as applicable.

ARTICLE 2
CONSTRUCTION AND INTERPRETATION

Section 2.1 Regulatory Requirement.

Should any changes to this Plan be required by any securities commission or other
governmental body of any jurisdiction of Canada to which this Plan has been submitted or by
any stock exchange on which the Shares may from time to time be listed, such changes will be
made to this Plan as are necessary to conform with such requests and, if such changes are
approved by the Board, this Plan, as amended, will remain in full force and effect in its
amended form as of and from that date.

Section 2.2 Currency.

All references in the Plan to currency refer to lawful currency of Canada.

5
Section 2.3 Applicable Laws.

The Plan shall be governed by and construed in accordance with the laws of the
Province of Ontario and the federal laws of Canada applicable therein.

Section 2.4 Validity.

If any provision of the Plan or part hereof is determined to be void or unenforceable in

whole or in part, such determination shall not affect the validity or enforcement of any other
provision or part thereof.

Section 2.5 References.

In the Plan, references to the masculine include the feminine; reference to the singular
shall include the plural and vice versa, as the context shall require.

Section 2.6 Headings.

Headings wherever used herein are for reference purposes only and do not limit or
extend the meaning of the provisions herein contained.

ARTICLE 3
GENERAL PROVISIONS

Section 3.1 Administration.

(1) The Board shall administer this Plan; however, notwithstanding the foregoing or any
other provision contained herein, the Board shall have the right to delegate the
administration and operation of this Plan, in whole or in part, to a committee of the
Board and/or to any member thereof. For greater certainty, any such delegation by the
Board may be revoked at any time at the Boards sole discretion. In the event of any such
delegation by the Board, references made to the Board herein, shall, as applicable,
include a committee of the Board and/or any member thereof. Nothing contained herein
shall prevent the Board from adopting other or additional Share compensation
arrangements or other compensation arrangements.

(2) Subject to the terms and conditions set forth herein, the Board has the authority: (i) to
grant Restricted Share Units to RSU Participants; (ii) to grant Deferred Share Units to
DSU Participants; (iii) to determine the terms, including the limitations, restrictions,
vesting period and conditions (including any Performance Criteria), if any, of such
grants; (iv) to interpret this Plan and all agreements entered into hereunder; (v) to adopt,
amend and rescind such administrative guidelines and other rules relating to this Plan
as it may from time to time deem advisable; and (vi) to make all other determinations
and to take all other actions in connection with the implementation and administration
of this Plan as it may deem necessary or advisable. The Boards guidelines, rules,
interpretations, and determinations shall be conclusive and binding upon the Company,
its Affiliates, and all Participants and their heirs, executors, legal personal
representatives and beneficiaries.

6
(3) No member of the Board or any person acting pursuant to authority delegated by it
hereunder shall be liable for any action or determination in connection with the Plan
made or taken in good faith, and each member of the Board and each such person shall
be entitled to indemnification by the Company with respect to any such action or
determination.

(4) The Board may adopt such rules or regulations and vary the terms of this Plan and any
grant hereunder as it considers necessary to address tax or other requirements of any
applicable non-Canadian jurisdiction.

(5) The Plan shall not in any way fetter, limit, obligate, restrict or constrain the Board with
regard to the allotment or issue of any Shares or any other securities in the capital of the
Company other than as specifically provided for in the Plan.

(6) Shares issued or delivered to RSU Participants pursuant to the settlement of Restricted
Share Units or to DSU Participants pursuant to the settlement of Deferred Share Units
shall be subject to restrictions on resale and transfer under applicable securities laws and
the requirements of the TSX or other stock market on which any class of Shares are listed
or quoted for trading, and any certificates representing such Shares shall bear, as
required, a respective legend in respect thereof.

Section 3.2 Rules and Regulations.

The Board is authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it deems necessary for the proper administration of the Plan, and to make
determinations and take such other action in connection with or in relation to the Plan as it
deems necessary or advisable. Each determination or action made or taken pursuant to the Plan,
including interpretation of the Plan, shall be final and conclusive for all purposes and binding
on all parties, absent manifest error.

Section 3.3 Amendment and Termination.

(1) The Board may, in its sole discretion, suspend or terminate the Plan at any time or from
time to time amend, revise or discontinue the terms and conditions of the Plan or of any
Unit granted under the Plan and any Grant Agreement relating thereto, subject to any
required regulatory approval, provided that such suspension, termination, amendment,
or revision will:

(a) not adversely alter or impair any Unit previously granted except as permitted by
the terms of this Plan;

(b) be in compliance with applicable law and subject to any regulatory approvals
including, where required, the approval of the TSX or any other applicable
securities exchange; and

(c) be subject to Shareholder approval, where required by law, the requirements of

the TSX, any other applicable securities exchange or this Plan.

7
(2) If the Plan is terminated, the provisions of the Plan and any administrative guidelines
and other rules and regulations adopted by the Board and in force with respect to
outstanding Units will continue in effect as long as any such Unit or any rights pursuant
thereto remain outstanding and, notwithstanding the termination of the Plan, the Board
will remain able to make such interpretations and amendments to the Plan or the Units
as they would have been entitled to make if the Plan was still in effect.

(3) The Board shall have the power and authority to approve amendments relating to the
Plan or to Units, without further approval of the Shareholders or Participants, to the
extent such amendment:

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

(b) is necessary to comply with applicable law or the requirements of the TSX or any
other applicable securities exchange;

(c) is an amendment to the Plan respecting administration and eligibility for

participation under the Plan;

(d) alters, extends or accelerates the terms of vesting applicable to any Units;

(e) changes the termination provisions of a Unit or the Plan which does not entail an
extension beyond the original expiry date of a Unit;

(f) is an amendment to the Plan of a housekeeping nature; or

(g) does not require Shareholder approval under applicable law (including, without
limitation, the rules, regulations and policies of the TSX or any other applicable
securities exchange), provided that in the case of any alteration, amendment or
variance referred to in this Section 3.3, the alteration, amendment or variance
does not:

(i) amend the number of Shares issuable under the Plan;

(ii) cancel and reissue any Units;

(iii) add any form of financial assistance by the Company for the exercise of a
Unit;

(iv) result in a material or unreasonable dilution in the number of outstanding

Shares or any material benefit to a Participant;

(v) extend the time for which a Unit Expires beyond its original expiry date;

(vi) amend this Section 3.3, Section 3.10(1)(c), or Section 9.1; or

8
 (vii) change the class of Eligible Persons under the Plan, which would have the
potential of broadening or increasing participation by Insiders of the
Company;

and further provided that:

(viii) any Units granted subject to the acceptance and approval of such
amendments by the TSX shall be subject to such approval and acceptance
being given and no such Units may be exercised unless and until such
approval and acceptance are given.

(4) Notwithstanding anything contained herein to the contrary, the Board shall be required
to obtain Shareholder Approval in order to amend: (i) Section 3.10(1)(c) of this Plan, (ii)
Section 3.3(3)(g) of this Plan, or (iii) this Section 3.3(4).

(5) No such amendment to the Plan shall cause the Plan in respect of Restricted Share Units
to cease to be a plan described in paragraph (k) of the definition of salary deferral
arrangement in subsection 248(1) of the ITA or any successor to such provision.

(6) No such amendment to the Plan shall cause the Plan in respect of Deferred Share Units
to cease to be a plan described in regulation 6801(d) of the ITA or any successor to such
provision.

Section 3.4 Applicable Tax Withholdings and Deductions.

(1) Notwithstanding any other provision contained herein, and together with Section 5.4
and Section 6.10, the Company or the relevant Affiliate, as applicable, shall be entitled to
withhold from any amount payable to a Participant, either under this Plan or otherwise,
such amounts as may be necessary so as to ensure that the Company or the relevant
Affiliate is in compliance with the applicable provisions of the ITA or any other federal,
provincial, state or local law relating to the withholding of tax or other required
deductions relating to the settlement of such Units (the Applicable Withholding
Taxes).

(2) It is the responsibility of the Participant to complete and file any tax returns which may
be required within the periods specified in applicable laws as a result of the Participants
participation in the Plan. The Company shall not be held responsible for any tax
consequences to a Participant as a result of the Participants participation in the Plan and
the Participant shall indemnify and save harmless the Company from and against any
and all loss, liability, damage, penalty or expense (including legal expense), which may
be asserted against the Company or which the Company may suffer or incur arising out
of, resulting from, or relating in any manner whatsoever to any tax liability in
connection therewith.

9
Section 3.5 No Interest.

No interest or other amounts shall accrue to the Participant in respect of any amount
payable by the Company to the Participant under this Plan or any Unit.

Section 3.6 Costs.

The Company will be responsible for all costs relating to the administration of the Plan.

Section 3.7 Participation in this Plan.

(1) Nothing contained in the Plan nor in any Unit granted hereunder shall be deemed to
give any Participant any interest or title in or to any Shares or any rights as a
Shareholder or any other legal or equitable right against the Company, or any of its
Affiliates whatsoever, including without limitation, the right to vote as a Shareholder
and/or the right to participate in any new issue of Shares to existing holders of Shares,
other than those rights relating to Shares that have been issued by the Company upon
the settlement of a Unit pursuant to the terms of this Plan.

(2) Units shall be credited to an unfunded notional bookkeeping account established and
maintained by the Company in the name of each Participant. Notwithstanding any other
provision of the Plan to the contrary, a Unit shall not be considered or construed as an
actual investment in Shares. Participants shall have no legal or equitable rights, claims,
or interest in any specific property or assets of the Company or any Affiliate. No assets
of the Company or any Affiliate shall be held in any way as collateral security for the
fulfillment of the obligations of the Company or any Affiliate under this Plan. Any and
all of the Companys or any Affiliates assets shall be, and remain, the general
unrestricted assets of the Company or Affiliate.

(3) The Companys or any of its Affiliates obligation under this Plan shall be merely that of
an unfunded and unsecured promise of the Company or such Affiliate to pay money in
the future, and the rights of Participants shall be no greater than those of unsecured
general creditors.

(4) The Company makes no representation or warranty as to the future Market Value of the
Shares or with respect to any income tax matters affecting the Participant resulting from
the grant or settlement of a Unit or transactions in the Shares. With respect to any
fluctuations in the Market Value of Shares, neither the Company, nor any of its directors,
officers, employees, Shareholders or agents, shall be liable for anything done or omitted
to be done by such person or any other person with respect to the price, time, quantity
or other conditions and circumstances of the issuance of Shares hereunder, or in any
other manner related to the Plan. For greater certainty, no amount will be paid to, or in
respect of, a Participant under the Plan or pursuant to any other arrangement, and no
additional Units will be granted to such Participant, to compensate for a downward
fluctuation in the price of the Shares, nor will any other form of benefit be conferred
upon, or in respect of, a Participant for such purpose.

(5) The Plan does not provide for any guarantee in respect of any loss or profit that may
result from fluctuations in the Market Value of Shares.

10
Section 3.8 Right to Issue Other Shares.
The Company shall not by virtue of this Plan be in any way restricted from declaring
and paying stock dividends, issuing further Shares, repurchasing Shares, or varying or
amending its share capital or corporate structure.

Section 3.9 Regulatory Approval.

The grant of Units and the issuance of Shares pursuant to this Plan are subject to
compliance with all applicable laws, rules and regulations of all governmental and regulatory
authorities and to the requirements of the TSX. The Participant agrees to: (i) comply with all
such laws, rules regulations and requirements; (ii) to furnish to the Company any information,
report and/or undertakings required to comply with all such laws, rules, regulations and
requirements; (iii) to fully cooperate with the Company in complying with such laws, rules
regulations and requirements; and (iv) to fully cooperate with the Company in complying with
the provisions of the ITA and/or other tax laws, as applicable.

Section 3.10 Grant of Units, Shares Reserved and Participation Limits.

(1) Subject to the provisions of this Plan, the Board may grant Units to Participants upon the
terms, conditions and limitations set forth herein, in any Grant Agreement, and such
other terms, conditions and limitations permitted by and not inconsistent with this Plan
as the Board may determine, provided that:

(a) The maximum number of Shares which may be reserved for issuance under this
Plan in respect of grants of Restricted Share Units to RSU Participants and grants
of Deferred Share Units to DSU Participants and pursuant to any other security
based compensation arrangement of the Company (including under the Stock
Option Plan) shall not exceed 10% of the issued and outstanding Shares from
time to time on a non-diluted basis;

(b) The number of Shares subject to any grants of Restricted Share Units or Deferred
Share Units (or portions thereof) that: (i) have vested and been settled; or (ii)
have Expired or been forfeited, surrendered, cancelled or otherwise terminated
prior to the delivery of the Shares pursuant to a grant of Restricted Share Units or
Deferred Share Units shall, in each case, automatically become available to be
made and subject to new grants under this Plan. In addition, the number of
Shares subject to grants of Restricted Share Units or Deferred Share Units (or
portions thereof) that the Company settles in cash in lieu of settlement in Shares
shall automatically become available to be made the subject of new grants under
this Plan; and

(c) Unless the Company has received requisite Shareholder approval, under no
circumstances shall this Plan, together with all of the Companys previously
established or proposed compensation or incentive plans or mechanisms
involving the issuance or potential issuance of Shares, including the Stock Option
Plan, result, at any time, in:

11
 (i) the aggregate number of Shares issuable to Insiders (as a group) at any
point in time exceeding 10% of the Companys issued and outstanding
Shares on a non-diluted basis;

(ii) the issuance to Insiders (as a group), within a one-year period, of an

aggregate number of Shares exceeding 10% of the Companys issued and
outstanding Shares on a non-diluted basis; or

(iii) the grant to (a) Non-Employee Directors, as a group, of an aggregate

number of Shares exceeding 1% of the Companys issued and
outstanding Shares on a non-diluted basis, or (b) any individual Non-
Employee Director of more than $150,000 worth of Shares annually.

For greater certainty, any one-time initial equity grant upon a director joining the
Board are excluded from the limitation set forth in Section 3.10(1)(c)(iii)(b).

(2) In the event that a Participant receives Shares from the Company in satisfaction of a
grant of Restricted Share Units or Deferred Share Units during a Company-imposed
black-out period, the Participant shall not be entitled to sell or otherwise dispose of such
Shares until such black-out period has expired. In the event that a Participants Units are
set to Expire during a black-out period, such expiry date shall be automatically extended
for ten (10) Business Days after the expiry of the black-out period following the date the
relevant black-out period is lifted, terminated or removed, in accordance with Sections
3.3(4) and 3.3(5).

ARTICLE 4
RESTRICTED SHARE UNITS

Section 4.1 Grant of Restricted Share Units.

(1) Subject to the provisions of this Plan, the Board may grant Restricted Share Units to any
Eligible Person upon the terms, conditions and limitations set forth herein and such
other terms, conditions and limitations permitted by and not inconsistent with this Plan
as the Board may determine.

(2) The grant of a Restricted Share Unit shall be evidenced by a Grant Agreement, signed on
behalf of the Company.

(3) The Company shall maintain a notional account for each RSU Participant, in which shall
be recorded the number of vested and unvested Restricted Share Units granted or
credited to such RSU Participant.

(4) The grant of a Restricted Share Unit to a RSU Participant, or the settlement of a
Restricted Share Unit, under the Plan shall neither entitle such RSU Participant to
receive nor preclude such RSU Participant from receiving subsequently granted
Restricted Share Units.

(5) Each Grant Agreement shall describe the Performance Criteria, if any, established by the
Board that must be achieved for Units to vest to the RSU Participant.

12
Section 4.2 Equivalence.

One (1) Restricted Share Unit is equivalent to one (1) Share. Fractional Restricted Share
Units are permitted under the Plan.

Section 4.3 Calculation.

The number of Restricted Share Units (including fractional Restricted Share Units)
granted at any particular time pursuant to this Plan will be calculated by dividing (i) the dollar
amount of such grant by (ii) the Market Value of a Share on the Date of Grant.

Section 4.4 Vesting.

Except as otherwise provided in a RSU Participants Grant Agreement or any other
provision of this Plan, and subject to the Boards ability to change the RSU Vesting Date of any
Restricted Share Unit pursuant to Article 8:

(1) 1/3 of the Restricted Share Units granted pursuant to Section 4.1 shall vest on the first
(1st) anniversary of the Date of Grant;

(2) 1/3 of the Restricted Share Units granted pursuant to Section 4.1 shall vest on the second
(2nd) anniversary of the Date of Grant; and

(3) 1/3 of the Restricted Share Units granted pursuant to Section 4.1 shall vest on the third
(3rd) anniversary of the Date of Grant.

Section 4.5 Adjustments.

Subject to any required approval by the TSX or regulatory authority, in the case of any
merger, amalgamation, arrangement, rights offering, subdivision, consolidation, or
reclassification of the Shares or other relevant change in the capitalization of the Company, or
stock dividend or distribution (excluding dividends or distributions which may be paid in cash
or in Shares at the option of the Shareholder), or exchange of the Shares for other securities or
property, the Company shall make appropriate adjustments in the Shares issuable or amounts
payable, as the case may be, as determined as appropriate by the Board, to preclude a dilution
or enlargement of the benefits hereunder, and any such adjustment (or non-adjustment) by the
Company shall be conclusive, final and binding upon the RSU Participants. However, no
amount will be paid to, or in respect of, the RSU Participants under the Plan or pursuant to any
other arrangement, and no additional Restricted Share Units will be granted to such RSU
Participant to compensation for a downward fluctuation in the Market Value of the Shares, nor
will any other form of benefit be conferred upon, or in respect of, a RSU Participant for such
purpose.

ARTICLE 5
SETTLEMENT & EXPIRY

Settlement of Restricted Share Units.

(1) Except as otherwise provided in a RSU Participants Grant Agreement or any other
provision of this Plan:

13
 (a) All of the vested Restricted Share Units covered by a particular grant may be
settled on the first Business Day following their RSU Vesting Date (the
Settlement Date), but in no event later than December 31 of the third calendar
year following the year in which the services giving rise to the award were
rendered; and

(b) Following the RSU Vesting Date in respect of an award of Restricted Share Units
granted to a RSU Participant, a RSU Participant shall become entitled to deliver
to the Company a RSU Settlement Notice in respect of any or all vested Units
which it desires to settle. The RSU Participant will, when requested by the
Company, execute and deliver all such documents relating to the settlement of
the vested Restricted Share Units which the Company deems necessary or
desirable.

(2) Following the receipt by the Company of a RSU Settlement Notice, the Company shall
elect to settle the Restricted Share Units through delivery of:

(a) in the case of settlement for their Cash Equivalent, a cheque to the RSU
Participant representing the Cash Equivalent;

(b) in the case of settlement for Shares, a share certificate to the RSU Participant
representing Shares issued from treasury; or

(c) in the case of settlement for a combination of Shares and the Cash Equivalent, a
combination of (a) and (b) above.

Subject to the foregoing, the decision as to mode of payment shall be made by the Board
in its sole discretion, and a payment of the Cash Equivalent and/or Shares, as the case may be,
to any one RSU Participant shall not create any obligation for the Board to make a similar
payment to any other RSU Participant.

Section 5.2 Determination of Amounts.

(1) Cash Equivalent of Restricted Share Units. For purposes of determining the Cash
Equivalent of Restricted Share Units to be made pursuant to Section 5.1(2)(a) or Section
5.1(2)(c), such calculation will be made on the Settlement Date based on the Market
Value on the Settlement Date multiplied by the number of vested Restricted Share Units
in the RSU Participants Restricted Share Unit notional account which are being settled
on the Settlement Date, net of any Applicable Withholding Taxes.

(2) Payment in Shares; Issuance of Shares from Treasury. For the purposes of determining
the number of Shares from treasury to be issued and delivered to a RSU Participant
upon settlement of Restricted Share Units pursuant to Section 5.1(2)(b) or Section
5.1(2)(c), such calculation will be made on the Settlement Date, or if the Settlement Date
is not a Business Day, on the next such Business Day, based on the whole number of
Shares equal to the whole number of vested Restricted Share Units then recorded in the
RSU Participants Restricted Share Unit notional account that are being settled on the
Settlement Date, net of any Applicable Withholding Taxes. Shares issued from treasury

14
 will be issued in consideration for the past services of the RSU Participant to the
Company and the entitlement of the RSU Participant under this Plan shall be satisfied in
full by such issuance of Shares. As set out in Section 5.3, the Company will, if applicable,
also make a cash payment, net of any Applicable Withholding Taxes, to the RSU
Participant with respect to the value of any fractional Restricted Share Units standing to
the RSU Participants credit after the maximum number of whole Shares have been
issued by the Company as described above.

Section 5.3 Cash Payment.

If applicable, the Company shall also make a cash payment, net of any Applicable
Withholding Taxes, to the RSU Participant with respect to the value of fractional Restricted
Share Units standing to the RSU Participants credit after the maximum number of whole
Shares have been issued by the Company, calculated by multiplying (i) the number of such
fractional Restricted Share Units by (ii) the Market Value of such fractional Restricted Share
Units on the Settlement Date.

Section 5.4 Applicable Withholding Taxes.

(1) For greater certainty, unless not required under the ITA or any other applicable law, no
cash payment will be made nor will Shares be issued until:

(a) An amount sufficient to cover the Applicable Withholding Taxes payable on the
settlement of such Restricted Share Units has been received by the Company (or
withheld by the Company from the Cash Equivalent and/or cash payment noted
above if applicable); or

(b) The RSU Participant undertakes to arrange for such number of Shares to be sold
as is necessary to raise an amount equal to the Applicable Withholding Taxes,
and to cause the proceeds from the sale of such Shares to be delivered to the
Company.

Section 5.5 Cancellation of Restricted Share Units.

Upon payment in full of the value of the Restricted Share Units, the Restricted Share
Units shall be cancelled and no further payments shall be made from the Plan in relation to such
Restricted Share Units.

Section 5.6 Termination.

Unless otherwise provided in the RSU Participants Grant Agreement and regardless of
any adverse or potentially adverse tax or other consequences, if a RSU Participant ceases to be
an Eligible Person for any reason, including, without limitation, as a result of his or her
resignation, voluntary or involuntary termination, retirement, Disability, or death, any unvested
Restricted Share Units held by such RSU Participant shall Expire on the RSU Termination Date.

15
 ARTICLE 6
DEFERRED SHARE UNITS

Section 6.1 Grant of Deferred Share Units.

(1) Subject to the provisions of this Plan, the Board may grant Deferred Share Units to a
DSU Participant upon the terms, conditions and limitations set forth herein and such
other terms, conditions and limitations permitted by and not inconsistent with this Plan
as the Board may determine.

(2) The grant of a Deferred Share Unit shall be evidenced by a Grant Agreement, signed on
behalf of the Company.

(3) The Company shall maintain a notional account for each DSU Participant, in which shall
be recorded the number of Deferred Share Units granted or credited to such Participant.

(4) The grant of a Deferred Share Unit to a DSU Participant, or the settlement of a Deferred
Share Unit, under the Plan shall neither entitle such DSU Participant to receive nor
preclude such DSU Participant from receiving subsequently granted Deferred Share
Units.

Section 6.2 Equivalence.

One (1) Deferred Share Unit is equivalent to one (1) Share. Fractional Deferred Share
Units are permitted under the Plan.

Section 6.3 Election Notice; Elected Amount.

(1) Subject to Board approval, a DSU Participant may elect by filing an election notice in the
form of Schedule C attached hereto (the Election Notice), once each Fiscal Year, to
be paid, subject to any minimum amount that may be required by the Board, up to one
hundred percent (100%) of his or her Annual Board Retainer in the form of Deferred
Share Units (the Elected Amount), with the balance of such Annual Board Retainer
being paid in cash in accordance with the Companys regular practices of paying such
cash compensation. In the case of an existing DSU Participant, the election must be
completed, signed and delivered to the Company by the end of the Fiscal Year
preceding the Fiscal Year to which such election is to apply. In the case of a new DSU
Participant, the election must be completed, signed and delivered to the Company as
soon as possible, and, in any event, no later than 30 days after the directors
appointment, with such election to be effective on the first day of the fiscal quarter of the
Company following the date of the Companys receipt of the election until the final day
of such Fiscal Year. For the first year of the Plan, DSU Participants must make such
election as soon as possible, and, in any event, no later than 30 days, after adoption of
the Plan and the election shall be effective on the first day of the fiscal quarter of the
Company following the date of the Companys receipt of the election until the final day
of such Fiscal Year. If no election is made in respect of a particular Fiscal Year, the new
or existing DSU Participant will be paid in cash in accordance with the Companys
regular practices of paying such cash compensation.

16
(2) In the absence of a designation to the contrary (including delivery of an Election Notice
by a DSU Participant requesting that a greater or lesser percentage of his or her Annual
Board Retainer be payable in the form of Deferred Share Units relative to the percentage
previously elected by such DSU Participant), the DSU Participants Election Notice shall
remain in effect unless otherwise terminated.

Section 6.4 Termination Right.

(1) Each DSU Participant is entitled to terminate his or her participation in the Plan by filing
with the Chief Financial Officer of the Company, or such other officer of the Company
designated by the Board, a notice electing to terminate the receipt of additional Deferred
Share Units in the form of Schedule E attached hereto (Termination Notice). Such
Termination Notice shall be effective as of the date received by the Company.

(2) Thereafter, any portion of such DSU Participants Annual Board Retainer payable, and
subject to comply with Section 6.3, all subsequent Annual Board Retainers shall be paid
in cash in accordance with the Companys regular practices of paying such cash
compensation.

(3) For greater certainty, to the extent a DSU Participant terminates his or her participation
in the Plan, he or she shall not be entitled to become a DSU Participant again until the
Fiscal Year following the Fiscal Year in which the Termination Notice becomes effective.

Section 6.5 Calculation.

(1) The number of Deferred Share Units (including fractional Deferred Share Units) granted
at any particular time pursuant to this Plan will be calculated by:

(a) in the case of an Elected Amount, by dividing (i) the dollar amount of the Elected
Amount allocated to the DSU Participant by (ii) the Market Value of a Share on
the applicable Award Date; or

(b) in the case of a grant of Deferred Share Units pursuant to Section 6.1, by dividing
(i) the dollar amount of such grant by (ii) the Market Value of a Share on the Date
of Grant.

Section 6.6 Vesting.

(1) All Deferred Share Units recorded in a DSU Participants Deferred Share Unit notional
account shall vest on the DSU Termination Date, unless otherwise determined by the
Board at its sole discretion and in compliance with Section 3.3(5), subject to a
determination of the Board made in accordance with Article 7 and Article 8.

(2) DSU Participants will not have any right to receive any benefit under the Plan in respect
of a Deferred Share Unit until the DSU Termination Date.

17
Section 6.7 Settlement in respect of Deferred Share Units.
In respect of an award of Deferred Share Units granted to a DSU Participant, settlement
shall be as soon as practicable following the DSU Termination Date and no later than the DSU
Payment Date:

(1) Subject to Section 6.7(2), the DSU Participant (or where the DSU Participant has died, a
dependant or relation of the DSU Participant or the legal representative of the DSU
Participant) will deliver to the Company a DSU Settlement Notice, in the DSU
Participants sole discretion, to elect to settle all Deferred Share Units in such DSU
Participants notional account for their Cash Equivalent (determined in accordance with
Section 6.8(1)), Shares (determined in accordance with Section 6.8(2)) or a combination
thereof.

(2) If such DSU Settlement Notice is not received by the Company within 30 days prior to
the DSU Payment Date, settlement shall take the form of the Cash Equivalent
determined in accordance with Section 6.8(1), among other provisions of this Plan.

(3) Settlement of Deferred Share Units shall take place on the DSU Payment Date and in the
form set out in the DSU Settlement Notice through:

(a) in the case of settlement for their Cash Equivalent, a cheque to the Participant, a
dependant or relation of the Participant or the Participants duly authorized legal
representative, as the case may be, representing the Cash Equivalent;

(b) in the case of settlement for Shares, a share certificate to the Participant, a
dependant or relation of the Participant or the Participants duly authorized legal
representative, as the case may be, representing Shares issued from treasury; or

(c) in the case of settlement for a combination of Shares and the Cash Equivalent, a
combination of (a) and (b) above.

Section 6.8 Determination of Amounts.

(1) Cash Equivalent of Deferred Share Units. For purposes of determining the Cash
Equivalent of Deferred Share Units to be made pursuant to Section 6.7(3)(a) or Section
6.7(3)(c), such calculation will be made on the Market Value on the DSU Termination
Date multiplied by the number of vested Deferred Share Units in the Participants
Deferred Share Unit notional account, net of any Applicable Withholding Taxes, as of
the DSU Termination Date.

(2) Payment in Shares; Issuance of Shares from Treasury. For the purposes of determining
the number of Shares from treasury to be issued and delivered to a DSU Participant
upon settlement of Deferred Share Units pursuant to Section 6.7(3)(b) or Section
6.7(3)(c), such calculation will be made on the DSU Termination Date, or if the DSU
Termination Date is not a Business Day, on the next such Business Day, based on the
whole number of Shares equal to the whole number of vested Deferred Share Units then
recorded in the Participants Deferred Share Unit notional account that are being settled
on the DSU Termination Date, net of any Applicable Withholding Taxes. Shares issued

18
 from treasury will be issued in consideration for the past services of the DSU Participant
to the Company and the entitlement of the DSU Participant under this Plan shall be
satisfied in full by such issuance of Shares. As set out in Section 6.9, the Company will, if
applicable, also make a cash payment, net of any Applicable Withholding Taxes, to the
Participant with respect to the value of any fractional Deferred Share Units standing to
the Participants credit after the maximum number of whole Shares have been issued by
the Company as described above.

Section 6.9 Cash Payment.

If applicable, the Company shall also make a cash payment, net of any Applicable
Withholding Taxes, to the DSU Participant with respect to the value of fractional Deferred Share
Units standing to the DSU Participants credit after the maximum number of whole Shares have
been issued by the Company, calculated by multiplying (i) the number of such fractional
Deferred Share Units by (ii) the Market Value of such fractional Deferred Share Units on the
applicable date.

Section 6.10 Applicable Withholding Taxes.

For greater certainty, unless not required under the ITA or any other applicable law, no cash
payment will be made nor will Shares be issued until:

(a) An amount sufficient to cover the Applicable Withholding Taxes payable on the
settlement of such Deferred Share Units has been received by the Company (or
withheld by the Company from the Cash Equivalent and/or cash payment noted
above if applicable); or

(b) The DSU Participant undertakes to arrange for such number of Shares to be sold
as is necessary to raise an amount equal to Applicable Withholding Taxes, and to
cause the proceeds from the sale of such Shares to be delivered to the Company.

Section 6.11 Cancellation of Deferred Share Units.

Upon payment in full of the value of the Deferred Share Units, the Deferred Share Units
shall be cancelled and no further payments shall be made from the Plan in relation to such
Deferred Share Units.

Section 6.12 Adjustments.

Subject to any required approval by the TSX or regulatory authority, in the case of any
merger, amalgamation, arrangement, rights offering, subdivision, consolidation, or
reclassification of the Shares or other relevant change in the capitalization of the Company, or
stock dividend or distribution (excluding dividends or distributions which may be paid in cash
or in Shares at the option of the Shareholder), or exchange of the Shares for other securities or
property, the Company shall make appropriate adjustments in the Shares issuable or amounts
payable, as the case may be, as determined as appropriate by the Board, to preclude a dilution
or enlargement of the benefits hereunder, and any such adjustment (or non-adjustment) by the
Company shall be conclusive, final and binding upon the DSU Participants. However, no
amount will be paid to, or in respect of, the DSU Participants under the Plan or pursuant to any

19
other arrangement, and no additional Deferred Share Units will be granted to such Participant
to compensation for a downward fluctuation in the price of the Shares, nor will any other form
of benefit be conferred upon, or in respect of, a DSU Participant for such purpose.

ARTICLE 7
ASSUMPTION OR SUBSTITUTION OF UNITS

Section 7.1 Substitution

(1) In the event of a Substitution Event, any surviving or acquiring company must, unless
Article 8 applies:

(a) Assume any Unit outstanding under the Plan on substantially the same
economic terms and conditions as the Plan; or

(b) Substitute or replace restricted share units and deferred share units, as applicable
(including an award to acquire the same consideration paid to the
securityholders of the Company in the transaction effecting the Substitution
Event) for those Restricted Share Units and Deferred Share Units outstanding
under the Plan on substantially the same economic terms and conditions as the
Plan.

(2) In the event any surviving or acquiring company neglects or refuses (as determined by
the Board, acting reasonably) to assume any Units or to substitute or replace similar
restricted share units and deferred share units, as applicable, for those outstanding
Restricted Share Units and Deferred Share Units under the Plan in connection with a
Substitution Event, then with respect to any Units held by Participants, the vesting of
such Units will automatically and without further action by the Board or the Company
be immediately accelerated so that such Units will be fully vested.

(3) Notwithstanding any other provision of this Plan, in the event of a potential Substitution
Event, the Board may, in its discretion: (i) terminate, conditionally or otherwise and on
such terms as it sees fit, the Units not settled following successful completion of such
Substitution Event; and (ii) accelerate, conditionally or otherwise and on such terms as it
sees fit, the vesting of Units or otherwise modify the terms of the Units to assist the
Participants to obtain the advantage of holding Shares during the Substitution Event. If
the Substitution Event referred to in this Article 7 is not completed during the time
specified therein (as the same may be extended), the Units which vested pursuant to this
Article 7 will be reinstated as unvested Units and the original terms applicable to such
Units will apply. If any of the Units that vested pursuant to this Article 7 were settled,
the applicable Shares or the Cash Equivalent must be returned to the Company and any
Shares shall be cancelled. The determination of the Board in respect of any such
Substitution Event will for the purposes of this Plan be final, conclusive and binding.

20
 ARTICLE 8
TAKE-OVER BIDS

Section 8.1 Take-over Bids

(1) In the event of a potential change of control following a take-over bid (as defined
herein), the Board may, in its discretion, conditionally or otherwise and on such terms as
it sees fit, accelerate the vesting of all of a Participants unvested Units to a date prior to
the expiry date of such take-over bid or offer, such that all of a Participants Units will
immediately vest at such time and the RSU Vesting Date or the DSU Termination Date,
as applicable, in connection with such Units will be adjusted accordingly. Subject to
Section 3.3(5). Subject to Section 3.3(5), in such event, all Units so vested may be settled
conditionally or otherwise, from such date until their respective expiry date so as to
permit the Participant to tender the Shares received upon such settlement pursuant to
the take-over bid or offer. For purposes of this Article 8, a potential change of control
following a take-over bid will be deemed to occur upon a formal take-over bid or
tender offer for Shares being made as a result of which the offeror and its Affiliates or
Associates, and each company, trust, partnership or other entity under common control
with any of them would, if successful, beneficially own, directly or indirectly, fifty
percent (50%) or more of the Shares then outstanding.

(2) Notwithstanding any other provisions of this Plan, in the event of a potential change of
control following a take-over bid, the Board will have the power, if determined
appropriate (i) to terminate, conditionally or otherwise and on such terms as it sees fit,
the Units not settled following successful completion of such event, and/or (ii) to
modify the terms of the Units, conditionally or otherwise and on such terms as it sees fit,
in order to assist the Participants to tender their securities into the take-over bid. For
greater certainty, in the event that the acquiring entity acquires one hundred percent
(100%) of the outstanding Shares following the take-over bid, the Board will have the
power, if determined appropriate, to terminate the Units not settled upon the expiry of
the time period for tendering Shares to the acquiring entity for purchase.

(3) If the take-over bid referred to in this Article 8 is not completed within the time specified
therein (as the same may be extended), the Units that vested pursuant to this Article 8 (if
any) will be reinstated as unvested Units and the original terms applicable to such Units
will apply. If any of the Units that vested pursuant to this Article 8 (if any) were settled
the applicable Shares or the Cash Equivalent must be returned to the Company, and any
Shares shall be cancelled. The determination of the Board with respect to any such event
will for the purposes of this Plan be final, conclusive and binding.

ARTICLE 9
ASSIGNMENT

Section 9.1 Successors and Assigns.

In no event may the rights or interests of a Participant under the Plan be assigned,
encumbered, pledged, transferred or alienated in any way, except to the extent that certain

21
rights may pass to a beneficiary or legal representative upon death of a Participant, by will or
by the laws of succession and distribution.

Section 9.2 Rights and Obligations.

Rights and obligations under the Plan may be assigned by the Company to a successor
in the business of the Company.

ARTICLE 10
GENERAL PROVISIONS

Section 10.1 Non-Exclusivity.

Nothing contained herein will prevent the Board from adopting other additional
compensation arrangements for the benefit of Eligible Persons, subject to any required
regulatory or Shareholder approval.

Section 10.2 No Right to Continued Employment or Consultancy.

Nothing contained herein shall (i) be construed as conferring upon any Participant the
right to continued employment or consultancy, (ii) affect in any way the right of the Company
or Shareholders to terminate such employment or consultancy, or (iii) affect in any way the
rights of any party contained in any agreement governing a Participants service as an employee
or consultant or other agreement governing the Participants services to the Company.

Section 10.3 No Right to Continued Board Membership.

Nothing contained herein shall (i) be construed as conferring upon any Participant the
right to continue as a member of the Board, (ii) affect in any way the right of the Company or
Shareholders to terminate such membership, or (iii) affect in any way the rights of any party
contained in any agreement governing a Participants service as a member of the Board or other
agreement governing the Participants non-employee services to the Company.

Section 10.4 Reorganization of the Company.

The existence of any Units shall not affect in any way the right or power of the Company
or its Shareholders to make or authorize any adjustment, recapitalization, reorganization or
other change in the Companys capital structure or its business, or any amalgamation,
combination, merger or consolidation involving the Company or to create or issue any bonds,
debentures, Shares or other securities of the Company or the rights and conditions attaching
thereto or to affect the dissolution or liquidation of the Company or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding, whether of a similar
nature or otherwise.

Section 10.5 Notice

Any notice required to be given by this Plan shall be in writing and shall be given by
registered mail, postage prepaid, or delivered by courier or by facsimile transmission
addressed, if to the Company, to the head office of the Company, Attention: Chief Financial

22
Officer; or, if to a Participant, to such Participant at his or her address as it appears on the books
of the Company or in the event of the address of any such Participant not so appearing, then to
the last known address of such Participant; or, if to any other person, to the last known address
of such person.

Section 10.6 Compliance with Legislation

The administration of the Plan shall be subject to and performed in conformity with all
applicable laws, regulations, orders of governmental or regulatory authorities and the
requirements of any stock exchange on which the Shares are listed. Each Participant shall
comply with all such laws, regulations, rules, orders and requirements, and shall furnish the
Company with any and all information and undertakings, as may be required to ensure
compliance therewith.

CONFIRMED as approved by the Board effective May 17, 2017.

23
 ADDENDUM A TO NOVADAQ AMENDED AND RESTATED LONG TERM
INCENTIVE PLAN

U.S. TAXPAYERS

The terms and conditions of this addendum (this Addendum) shall apply to Units granted to
Participants subject to taxation in the United States (US Participants). The terms and
conditions provided in this Addendum shall supersede the terms of the Plan in the event of any
inconsistency.

1. Definitions.

All capitalized terms used in this Addendum and not otherwise defined shall have the
meanings set forth in the Plan; provided, however, that if a term is defined both in the Plan and
in this Addendum, the definition in this Addendum shall control.

a. Change of Control Event shall have the meaning set forth in the Plan, except that
no event shall constitute a "Change of Control Event" unless it satisfies the
requirements of U.S. Treasury Regulation Section 1.409A-3(i)(5)(v), (vi) or (vii).

b. Code means the U.S. Internal Revenue Code of 1986, as amended.

c. "DSU Payment Date" means, with respect to a Deferred Share Unit granted to a US
Participant, a date selected by the Company that is within 70 days after the DSU
Termination Date.

d. "DSU Termination Date" means the date on which a DSU Participant incurs a
Separation From Service, regardless of the reason for such Separation From Service.

e. "Eligible Person" means any director, officer, employee or Consultant of the

Company or any Subsidiary, as designated by the Board in a resolution.

f. An "RSU Settlement Notice" shall not apply to US Participants.

g. "RSU Termination Date" means the date on which a US Participant incurs a

Separation From Service, regardless of the reason for such separation from service.

h. Separation From Service means a separation from service (within the meaning
of Code Section 409A) from the Company and its Subsidiaries.

i. Subsidiary means, with respect to the Company, any corporation, partnership,

association or other business entity of which fifty percent (50%) or more of the total
voting power or value of the equity securities is at the time owned or controlled,
directly or indirectly, by the Company or one or more of the Subsidiaries of the
Company or a combination thereof.

A - 1 -
2. Administration

a. Notwithstanding anything contained in the Plan to the contrary, including

without limitation, Article 3 of the Plan, neither the Board, the Company nor any
Subsidiary may exercise any discretionary authority to accelerate the timing of
the settlement of any Units that are treated as non-qualified deferred
compensation under Code Section 409A.

b. In the event that a US Participants Units are set to Expire during a black-out
period, such expiry date shall be automatically extended for ten (10) Business
Days after the expiry of the black-out period following the date the relevant
black-out period is lifted, terminated or removed, in accordance with Sections
3.3(4) and 3.3(5) of the Plan; provided, however, that in no event shall such
extension result in the settlement of the Units beyond the latest date permitted by
Code Section 409A.

3. Restricted Share Units

a. Unless a different settlement date is specified in a Grant Agreement, any vested

Restricted Share Units shall be settled as set forth in Section 5.1(2) of the Plan
within 70 days after the date on which such Restricted Share Unit became vested
(the specific date of settlement shall be determined by the Company). The date
on which a Restricted Share Unit is settled is referred to as the Settlement
Date.

4. Deferred Share Units

a. Section 6.3 of the Plan shall not apply to US Participants. An Election Notice for
a US Participant must be provided to the Company prior to the last day of the
calendar year immediately preceding the calendar year to which such Election
Notice relates. An Election Notice shall be irrevocable when made. Once an
Election Notice is provided, a US Participant may not increase or decrease the
Elected Amount, nor may a US Participant cancel such Election Notice, and such
Election Notice shall remain in effect unless otherwise terminated or revised.
Any changes to an effective Election Notice shall not become effective until the
first day of the calendar year immediately following the calendar year in which
such Election Notice is provided to the Company.

b. In the first year in which a US Participant becomes eligible (as determined in

accordance with Code Section 409A) to make a deferral election under the Plan 1,
the US Participant must provide his or her Election Notice to the Company

A- 2 -
 within 30 days immediately following the date on which such US Participant
becomes eligible to make such election, provided that such election shall apply
only with respect to any compensation for services to be performed after
providing Election Notice becomes irrevocable.

c. A Termination Notice shall not be effective until the first day of the calendar year
immediately following the calendar year in which it is provided to the Company.

d. DSUs shall be settled within 70 days after the DSU Termination Date (the specific
date of settlement shall be determined by the Company).

e. Notwithstanding anything contained in the Plan to the contrary, an Election

Notice for a US Participant shall apply on a pro-rata basis to each component of
such US Participants Annual Board Retainer.

5. Substitution Events; Takeover Bids

a. Neither Article 7 nor Article 8 shall apply to US Participants.

b. In the event of a Substitution Event that constitutes a Change of Control Event,

(i) all outstanding Units that are treated as non-qualified deferred compensation
under Code Section 409A shall become fully vested (at 100% of target to the
extent that any Performance Criteria are applicable to the Units) and shall be
settled within 5 days after the occurrence thereof in the same form (and
proportions) of consideration as received by the Shareholders and (ii) with
respect to Units that are not treated as non-qualified deferred compensation
under Code Section 409A, the Board may decide to (1) accelerate the vesting and
settlement of such Units, (2) cause the acquiring or surviving company or a
parent to assume such Units or issue replacement awards on substantially the
same terms and having substantially the same economic value (as determined by
the Board) or (3) take such other action with respect to such Units as the Board
determines to be appropriate, provided that such action complies with Code
Section 409A.

c. In the event of a Substitution Event that does not constitute a Change of Control
Event, (i) the Board may determine to vest, in whole or in part, outstanding Units
that are treated as non-qualified deferred compensation under Code Section
409A, but the Board may not accelerate the settlement date of any such Units
(nor may the acceleration of the vesting of any such Units result in the
acceleration of the settlement date of such Units) and (ii) with respect to Units
that are not treated as non-qualified deferred compensation under Code Section
409A, the Board may decide to (1) accelerate the vesting and settlement of such
Units, (2) cause the acquiring or surviving company or a parent to assume such
Units or issue replacement awards on substantially the same terms and having
substantially the same economic value (as determined by the Board) or (3) take
such other action with respect to such Units as the Board determines to be

A- 3 -
 appropriate, provided that such action complies with Code Section 409A. In
addition, upon the occurrence of an event described in this Section 5(c), the
Board may take the action described in clause (ii)(2) of the preceding sentence
with respect to Units that are treated as non-qualified deferred compensation
under Code Section 409A to the extent permitted by Code Section 409A (but such
action shall not change the timing of settlement).

6. Adjustments. Notwithstanding anything contained in the Plan to the contrary, no

adjustment made pursuant to Section 4.5 or Section 6.12 of the Plan shall have any effect
on the timing of payment of any amount due to a US Participant.

7. Code Section 409A

a. The Plan and all Units are intended to comply with, or be exempt from, Code
Section 409A and all regulations, guidance, compliance programs and other
interpretative authority thereunder, and shall be interpreted in a manner
consistent therewith. Notwithstanding anything contained herein to the
contrary, in the event any Unit is subject to Code Section 409A, the Board may, in
its sole discretion and without a US Participants prior consent, amend the Plan
and/or any Grant Agreement, adopt policies and procedures, or take any other
actions as deemed appropriate by the Board to (i) exempt the Plan and/or any
Unit from the application of Code Section 409A, (ii) preserve the intended tax
treatment of any such Unit or (iii) comply with the requirements of Code Section
409A. In the event that a US Participant is a specified employee within the
meaning of Code Section 409A, and a payment or benefit provided for under the
Plan would be subject to additional tax under Code Section 409A if such
payment or benefit is paid within six (6) months after such US Participants
Separation From Service (within the meaning of Code Section 409A), then such
payment or benefit shall not be paid (or commence) during the six (6) month
period immediately following such US Participants Separation From Service
except as provided in the immediately following sentence. In such an event, any
payments or benefits that would otherwise have been made or provided during
such six (6) month period and which would have incurred such additional tax
under Code Section 409A shall instead be paid to the US Participant in a lump-
sum, without interest, on the earlier of (i) the first business day of the seventh
month following the month in which such US Participants Separation From
Service occurs or (ii) the tenth business day following such US Participants
death. A US Participants right to receive any installment payments under the
Plan shall be treated as a right to receive a series of separate payments and,
accordingly, each such installment payment shall at all times be considered a
separate and distinct payment as permitted under Code Section 409A.
Notwithstanding anything contained in the Plan or in a Grant Agreement to the
contrary, neither the Company, any member of the Board nor any Affiliate or
Subsidiary of the Company shall have any liability or obligation to any US
Participant or any other person for taxes, interest, penalties or fines (including
without limitation any of the foregoing resulting from the failure of any Unit
granted hereunder to comply with, or be exempt from, Code Section 409A). Any

A- 4 -
Unit that is to be settled or paid upon a termination of employment or service
and that constitutes non-qualified deferred compensation under Code
Section 409A shall not be paid or settled unless such termination of employment
or service constitutes a Separation From Service.

* * * * *

A- 5 -
 Schedule A
NOVADAQ TECHNOLOGIES INC.
RESTRICTED SHARE UNIT GRANT AGREEMENT

Restricted Share Unit Grant Agreement dated _________________, 20___ between

NOVADAQ TECHNOLOGIES INC., a Company existing under the laws of Canada (the
Company) and __________________________, an individual residing in
_______________________ (the Participant).

WHEREAS the Company has adopted an Amended and Restated Long Term Incentive
Plan (the Plan, as it may be amended from time to time), which Plan provides for the granting of
Restricted Share Units to RSU Participants (as defined in the Plan) entitling RSU Participants to
receive on settlement of vested Restricted Share Units, a Cash Equivalent (as defined in the Plan),
Shares in the capital of the Company or a combination thereof as determined by the Company;

AND WHEREAS the Company desires to continue to receive the benefit of the services of
the Participant and to more fully align his or her interest with the Companys future success;

AND WHEREAS the board of directors of the Company (the Board) approved the
granting of a Restricted Share Unit to the Participant, upon the terms and conditions hereinafter
provided;

AND WHEREAS the Company desires to grant to the Participant a Restricted Share Unit
upon the terms and conditions hereinafter provided;

AND WHEREAS capitalized terms used and not otherwise defined in this Grant
Agreement shall have the meanings set forth in the Plan or any applicable addendum;

NOW THEREFORE in consideration of the foregoing and the mutual agreements

contained herein and other good and valuable consideration (the receipt and sufficiency of which
are hereby acknowledged), the parties hereto agree as follows:

1. Restricted Share Units. The Company hereby grants to the Participant, as of

_____________, 20____, subject to the terms and conditions hereinafter set forth,
_________________ Restricted Share Units (the Restricted Share Units), vesting in
accordance with the terms of this Agreement and in accordance with the Plan.

2. Vesting of the Restricted Share Units. Subject to the vesting restrictions in Section 3 below
(if any) the Restricted Share Units shall vest according to the following table:

Date % of Restricted Share Units Vested

1/3, for a total of 1/3 vested

1/3 additional, for a total of 2/3 vested

A - 1
 1/3 additional, for a total of 100% vested

3. Performance Criteria. Vesting of Restricted Share Units under Section 2 above is subject to
the Company meeting the following performance criteria:

________________________________________________________________________________

4. Subject to Plan. This Restricted Share Units shall be subject in all respects to the provisions
of the Plan and any applicable addendum, the terms and conditions of which are hereby
expressly incorporated by reference, as same may be amended from time to time in
accordance therewith. A copy of the Plan and the applicable addendum shall be provided
to the Participant upon his or her reasonable request from time to time.

5. Damages or Other Compensation. The Participant acknowledges that the Participant has
no entitlement to damages or other compensation arising from or related to not receiving
any awards which would have vested or accrued to the Participant after the RSU
Termination Date (as defined in the Plan). However, nothing herein is intended to limit any
statutory or other legal entitlements on termination and such statutory or other legal
entitlements shall, if required, apply despite this language to the contrary. In addition, no
period of notice or payment in lieu of notice that follows the Participants last day of actual
and active employment shall be deemed to extend the Participants period of employment
for the purpose of determining the Participants entitlement under the Plan.

6. Shareholder Rights. A Participant shall have no rights whatsoever as a shareholder in

respect of any of the Restricted Share Units.

7. Transfer of Restricted Share Unit. The Restricted Share Units granted pursuant to this
Agreement shall not be assignable or transferable by the Participant, except in accordance
with the Plan.

8. Notice. Any notice required or permitted to be given hereunder shall be given in

accordance with, and subject to, the provisions of the Plan.

9. Governing Law. This Agreement and the Restricted Share Units shall be governed by and
interpreted and enforced in accordance with the laws of the Province of Ontario and the
federal laws of Canada applicable therein.

10. French Language. The parties agree that this Agreement as well as all documents relating
thereto be drawn up in the English language only. Les parties seront censes avoir requis
que cette contrat de meme que tous les documents sy rattachant soient rediges en anglais
seulement.

A - 2
IN WITNESS WHEREOF the parties have caused this Restricted Share Unit agreement to be
executed as of the date hereof.

NOVADAQ TECHNOLOGIES INC.

Per:

Authorized Signing Officer

NAME OF PARTICIPANT: ________________________

SIGNATURE OF PARTICIPANT: ________________________

Address: __________________________________________________________

A - 3
 Schedule B 2
NOVADAQ TECHNOLOGIES INC.
RSU SETTLEMENT NOTICE

I, _______________________________________________________, in respect of the

(print name)

Restricted Share Units that were granted to me on _______________________________ by

Novadaq Technologies Inc. (the Company) pursuant to the Companys Amended and
Restated Long Term Incentive Plan (the Plan), hereby elect to settle _________________
Restricted Share Units (including for any fractional Restricted Share Units). Capitalized terms
used but not defined herein have the meaning given to them in the Plan.

If the Company elects to settle my Restricted Share Units by paying me the Cash Equivalent for
my Restricted Share Units, I acknowledge that the Company will deduct Applicable
Withholding Taxes in accordance with the Plan.

If the Company elects to settle my Restricted Share Units by issuing me Shares, I understand
that the Company may provide me with additional instructions to:

tender cash, a certified cheque, a bank draft or money for full payment for all Applicable
Withholding Taxes; or

require me to undertake to direct that a number of Shares be sold, and the proceeds of
such Shares be delivered to the Company, for full payment for all Applicable
Withholding Taxes.

Date Participants Signature

(Print name)

2 Not applicable to US Participants.

B - 1
 Schedule C
NOVADAQ TECHNOLOGIES INC. (THE COMPANY)
DSU ELECTION NOTICE

All capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in
the Plan or any applicable addendum.

Pursuant to the Amended and Restated Long Term Incentive Plan (the Plan), I hereby
elect to receive_______% of my Annual Board Retainer in the form of Deferred Share Units in
lieu of cash.

I confirm that:

(a) I have received and reviewed a copy of the terms of the Plan and any applicable
addendum, and have reviewed, considered and agreed to be bound by the terms
of this Election Notice and the Plan and any applicable addendum.

(b) I have requested and am satisfied that the Plan and the foregoing be drawn up in
the English language. Le soussign reconnat quil a exig que le Rgime et ce qui prcde
soient rdigs et excuts en anglais et sen dclare satisfait.

(c) I recognize that when Deferred Share Units are settled in accordance with the
terms of the Plan or any applicable addendum, income tax and other
withholdings as required will arise at that time. Upon settlement of the Deferred
Share Units, the Company will make or arrange with me to make all appropriate
withholdings as required by law at that time.

(d) The value of Deferred Share Units is based on the value of the Common Shares
of the Company and therefore is not guaranteed.

For more complete information, reference should be made to the Plan and any
applicable addendum.

Date:
(Name of Participant)

(Signature of Participant)

C - 1
 Schedule E
NOVADAQ TECHNOLOGIES INC.
DEFERRED SHARE UNIT GRANT AGREEMENT

Name: _________________________

Award Date: _________________________

Novadaq Technologies Inc. (the Company) has adopted an Amended and Restated
Long Term Incentive Plan (the Plan). Your award is governed in all respects by the terms of
the Plan, including any applicable addendum, and the provisions of the Plan and any such
addendum are hereby incorporated by reference. Capitalized terms used and not otherwise
defined in this Grant Agreement shall have the meanings set forth in the Plan and any
applicable addendum. If there is a conflict between the terms of this Grant Agreement and the
Plan or any applicable addendum, the terms of the Plan or such addendum, as applicable, shall
govern.

Your Award The Company hereby grants to you ____________Deferred

Share Units.

PLEASE SIGN AND RETURN A COPY OF THIS GRANT AGREEMENT TO THE

COMPANY.

By your signature below, you acknowledge that you have received a copy of the Plan
and any applicable addendum, and have reviewed, considered and agreed to the terms of this
Grant Agreement and the Plan and any applicable addendum.

Signature: _______________________ Date: ___________________

On behalf of the Company:

_________________________________________
Name:
Title:

D - 1
 Schedule F
NOVADAQ TECHNOLOGIES INC.
ELECTION TO TERMINATE RECEIPT OF ADDITIONAL DEFERRED SHARE UNITS

All capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in
the Plan or any applicable addendum.

Notwithstanding my previous election on the DSU Election Notice dated

__________________, I hereby elect to terminate my participation in the Plan effective as of the
first day of the calendar year following the date this Termination Notice is received by Novadaq
Technologies Inc.

I understand that the Deferred Share Units already granted under the Plan and any
applicable addendum cannot be settled until the DSU Termination Date.

I confirm that I have received and reviewed a copy of the terms of the Plan and any
applicable addendum, and agree to continue to be bound by the Plan and any applicable
addendum.

Date:
(Name of Participant)

(Signature of Participant)

E - 1
 Schedule F
NOVADAQ TECHNOLOGIES INC. (THE COMPANY)
DSU SETTLEMENT NOTICE

I, _______________________________________________________, in respect of the

(print name)

Deferred Share Units that were granted to me on _______________________________ by the

Company pursuant to the Companys Amended and Restated Long Term Incentive Plan (the
Plan), hereby elect upon settlement of the Deferred Share Units (including for any fractional
Deferred Share Units) to receive (check one):

( ) (i) the Cash Equivalent, calculated in accordance with Section 6.8(1) of the Plan;

( ) (ii) Shares, calculated in accordance with Section 6.8(2) of the Plan; or

( ) (iii) the Cash Equivalent for _____________ Deferred Share Units and Shares for
____________ Deferred Share Units.

If I elect to receive the Cash Equivalent or a portion of my Deferred Share Units as a Cash
Equivalent, I acknowledge that the Company will deduct Applicable Withholding Taxes in
accordance with the Plan.

If I elect to receive only Shares (or otherwise make an election such that I do not receive enough
cash to pay the Applicable Withholding Taxes), I (check one):

( ) (i) enclose cash, a certified cheque, bank draft or money order payable to the Company
in the amount of $____________________ as full payment for the Applicable Withholding Taxes;

( ) (ii) undertake to direct that such number of Shares are to be sold, and the proceeds of
such Shares delivered to the Company, as is necessary to put the Company in funds equal to the
amount that would have otherwise been required in (i) above; or

( ) (iii) elect to settle for cash such number of Deferred Share Units as is necessary to raise
funds sufficient to cover such withholding taxes with such amount being withheld by the
Company.

Date Participants Signature

(Print name)