Director compensation consists of an annual fixed compensation of
$60,000 for the chairman of the Board and $30,000 for the other non-executive Board members. In addition, the chairperson of the
Audit Committee and the chairperson of the GHR Committee receive additional compensation of $15,000 and $10,000, respectively,
while members of the Audit Committee and the GHR Committee receive additional compensation of $7,500 and $5,000, respectively.
The directors are also entitled to a fee of $1,000 per non-regularly scheduled Board meeting as well as a reimbursement for travelling
and other reasonable expenses properly incurred by them in attending meetings of the Board or any committee or in otherwise serving
us, in accordance with the Corporation’s policy on travel and expenses. This fee applies to any organized telephonic meeting
for the full board or committee that is not on the Board's annual list of board and committee meetings but is arranged to discuss
a specific agenda. Such telephonic meetings do not include one-on-one calls between Board members and the CEO.
Following their first election to the Board, non-executive directors
are eligible to receive an initial equity grant of up to 150% of their annual cash retainer worth of stock options vesting monthly
in equal installments over a 12-month period, subject to the other terms and conditions set forth under the heading “Stock
Option Plan”. In addition to their initial grant, non-executive directors are eligible to receive an annual equity-based
award equal to 100% of their total annual cash retainer vesting monthly in equal installments over a 18-month period (subject to
the approval of the Shareholders at the Meeting to approve an amendment to the Stock Option Plan to reduce the minimum vesting
period applicable for option grants to directors from 18 months on a quarterly basis to 12 months on a monthly basis). These awards
will be granted at the same time that the Corporation performs its annual performance review for its employees, subject to availability
of Common Shares and subject to the terms and conditions described under the headings “Stock Option Plan” and “Equity
Incentive Plan”. The level of these awards will be consistent with equivalent awards in comparable companies obtained from
the benchmark exercise and in accordance with the recommendations obtained from the Corporation’s independent compensation
consultant.
To further align the interests of the Corporation’s non-executive
directors with those of the Corporation’s Shareholders, the Board has adopted share ownership guidelines. Under these guidelines,
executive directors are required to retain and hold 50% of the shares acquired by them under any equity incentive award granted
on or after June 7, 2017 (after subtracting shares sold to pay for option exercise costs, and relevant federal, state, and local
taxes, which are assumed to be at the highest marginal tax rates). In addition, the share retention rule applies unless the non-executive
director beneficially owns shares with a value at or in excess of 2x then-current total annual cash retainer. The value of a non-executive
director’s shares for purposes of the share ownership guidelines is deemed to be the greater of the then- current fair market
value of the shares, or the individual’s cost basis in the shares. Shares counted in calculating the share ownership guidelines
include shares beneficially owned outright, including from open market purchases, shares retained after option exercises, and shares
of restricted stock or deferred stock units that have fully vested. In addition, in the case of vested, unexercised, in-the-money
stock options, the in-the-money value of the stock options will be included in the share ownership calculation. Non-executive directors
have 5 years from their initial date of election as director to satisfy the share ownership guidelines.
The following table provides information on the number and value
of the outstanding share-based awards and option-based awards held by non-executive directors as at March 31, 2020.
None of the stock options of the Corporation held by non-executive
directors that vested during Fiscal 2020 were in-the-money at their respective vesting date.
The following table sets out, as at March 31, 2020, the share-based
compensation plans of the Corporation pursuant to which shares can be issued from treasury. The number of Common Shares which appears
at in the line “Share-based compensation plan” refers to the Stock Option Plan and Equity Incentive Plan.
For the purposes of this Proxy Statement, “informed person”
means: (i) a director or executive officer of the Corporation; (ii) a director or executive officer of a person or corporation
that is itself an informed person or subsidiary of the Corporation; (iii) any person or corporation who beneficially owns,
or controls or directs, directly or indirectly, voting securities of the Corporation or a combination of both carrying more than
5% of the voting rights attached to all outstanding voting securities of the Corporation other than voting securities held by the
person or Corporation as underwriter in the course of a distribution; and (iv) the Corporation if it has purchased, redeemed
or otherwise acquired any of its own securities, for so long as it holds any of its securities.
To the best of the Corporation’s knowledge, no informed person
of the Corporation, and no associate or affiliate of informed persons, at any time since the beginning of its last completed financial
year, has or has had any material interest, direct or indirect, in any transaction for the last two completed financial years of
the Corporation, or in any proposed transaction that has materially affected or would materially affect the Corporation or any
of its subsidiaries, which involves an amount exceeding the lesser of C$120,000 or one percent of the average of the Corporation’s
total assets at year-end for the last two completed fiscal years.
Some banks, brokers and other nominee record holders may be participating
in the practice of “householding” proxy statements and annual reports. This means that only one copy of the Corporation’s
proxy materials or annual report to Shareholders may have been sent to multiple Shareholders in each household unless otherwise
instructed by such Shareholders. We will deliver promptly a separate copy of these documents to any Shareholder upon written or
oral request to the Corporation’s Vice President, Finance at Acasti Pharma Inc., 3009 boul. de la Concorde East, Suite 102
Laval, Québec, Canada, H7E 2B5, telephone: (450) 686-4555. Any Shareholder who wants to receive separate copies of the Corporation’s
proxy materials or annual report to Shareholders in the future, or any Shareholders who is receiving multiple copies and would
like to receive only one copy per household, should contact the Shareholder’s bank, broker, or other nominee record holder,
or the Shareholder may contact us at the above address and phone number.
No person who is, or who was within the 30 days prior to the date
of this Proxy Statement, a director, executive officer, employee or any former director, executive officer or employee of the Corporation
or a subsidiary thereof, and no person who is a nominee for election as a director of the Corporation, and no associate of such
persons is, or was as of the Record Date, indebted to the Corporation or a subsidiary of the Corporation or indebted to any other
entity where such indebtedness is subject to a guarantee, support agreement, letter of credit or other similar arrangement or understanding
provided by the Corporation or a subsidiary of the Corporation.
None of the management functions of the Corporation are to any substantial
degree performed other than by the directors or executive officers of the Corporation.
No action to be taken as set out herein involves a transaction that
would have the effect of converting or subdividing, in whole or in part, existing securities into restricted securities or creating
new restricted securities.
As of December 31, 2019, the Corporation has subscribed to liability
insurance for its directors and officers covering liability that may be incurred in connection with their functions, subject to
the relevant provisions of the QBCA. The total insurance coverage is $20,000,000 per claim and per insurable period and comprises
a 25% coinsurance on the first $10,000,000. Each claim is subject to up to a $2,500,000 deductible for the directors and executive
officers, as a whole. The total premium for the current year of coverage was approximately $792,800.
The Audit Committee is responsible for assisting the Board in fulfilling
its oversight responsibilities with respect to financial reporting, including (i) reviewing the Corporation’s procedures
for internal control with the Corporation’s independent auditor and management performing financial functions; (ii) reviewing
and approving the engagement of the independent auditor; (iii) reviewing annual and quarterly financial statements and all
other material periodic disclosure documents, including the Corporation’s annual report on Form 10-K, quarterly reports on
Form 10-Q and the management’s discussion and analysis contained therein; (iv) assessing the Corporation’s financial
and accounting personnel; (v) assessing the Corporation’s accounting policies; (vi) reviewing the Corporation’s
risk management procedures; and (vii) reviewing any significant transactions outside the Corporation’s ordinary course
of business and any pending litigation involving the Corporation.
The Audit Committee has direct communication channels with the Corporation’s
management performing financial functions and the external auditor of the Corporation to discuss and review such issues as the
Audit Committee may deem appropriate.
As of March 31, 2020, the Audit Committee was composed of Mr. Canan,
as chairperson, Dr. Carter and Mr. Olds. Each member of the Audit Committee is “financially literate” within the meaning
of National Instrument 52-110 of the Canadian Securities Administrators (“NI 52 -110”) and “independent”
within the meaning of NI 52-110 and Rule 10A-3 of the Exchange Act. For more information on the expertise and experience of
each member, please refer to “Proposal No. 1 – Election of Directors – Nominees for Election as Director”.
The Audit Committee’s charter can be found on the Corporation’s
website at https://www.acastipharma.com/en/investors/corporate-governance/governance-documents.
With regard to risk management, the Board will ensure that the business
of the Corporation is conducted in compliance with applicable laws and regulations and according to the highest ethical standards
and will identify and document the financial risks and other risks that the Corporation faces in the course of its business and
ensure that such risks are appropriately managed.
The Board as a whole has responsibility for risk oversight, with
more in-depth reviews of certain areas of risk being conducted by the relevant Board committees that report on their deliberations
to the full Board. The Board and its committees fulfill their oversight responsibilities supported by management, whose reporting
processes are designed to provide information to the Board about the identification, assessment and management of critical risks
and management’s risk mitigation strategies. Areas of risk evaluated include research and development, patents, commercial
matters, human resources, funding, regulatory matters, operational risks, financial (accounting, liquidity and tax) matters, legal
requirements, compensation, competitive risks and health, safety and reputational risks, among others.
The standing committees of the Board oversee risks associated with
their respective principal areas of focus. The Audit Committee’s role includes a particular focus on the qualitative aspects
of financial reporting to Shareholders, on our processes for the management of business and financial risk, our financial reporting
obligations and for compliance with significant applicable legal, ethical and regulatory requirements. The Audit Committee, along
with management, is also responsible for developing and participating in a process for review of important financial and operating
topics that present potential significant risk to the Corporation. The GHR Committee is responsible for overseeing risks and exposures
associated with our compensation programs and arrangements, including our executive and director compensation programs and arrangements,
and management succession planning. The GHR Committee also oversees risks relating to our corporate governance matters and policies
and director succession planning.
We recognize that a fundamental part of risk management is understanding
not only the risks a company faces and what steps management is taking to manage those risks, but also understanding what level
of risk is appropriate for that company. Through their involvement in setting our business strategy, the Board seeks to assess
management’s appetite for risk and also determine what constitutes an appropriate level of risk for the Corporation.
We believe our current Board leadership structure is appropriate
and helps ensure proper risk oversight for the Corporation. The full Board conducts general risk oversight in connection with its
role in reviewing our key long-term and short-term business strategies and monitoring on an ongoing basis the implementation of
our key business strategies, while our standing Board committees conduct more specific risk oversight related to their responsibilities.
The Chair ensures that there is sufficient time on the Board agenda for risk management discussions.
The Board believes that, in order to maximize effectiveness, the
Board must be able to operate independently. A majority of directors must satisfy the applicable tests of independence, such that
the Board complies with all independence requirements under applicable corporate and securities laws and stock exchange requirements.
No director will be independent unless the Board has affirmatively determined that the director has no material relationship with
the Corporation or any of its affiliates, either directly or indirectly or as a partner, Shareholder or officer of an organization
that has a relationship with the Corporation or its affiliates. Such determinations will be made on an annual basis and, if a director
joins the Board between annual meetings, at such time.
The Board determined that Dr. Carter, Mr. Canan and Mr. Olds are
“independent” within the meaning of NI 52-110 and NASDAQ rules.
The Board determined that Ms. D’Alvise is not “independent”
within the meaning of NI 52-110 and NASDAQ rules given that she is the President and CEO of the Corporation.
As of the date of this Proxy Statement, the Board determined that
currently 3 out of 4 members of the Board are “independent” within the meaning of NI 52-110 and NASDAQ rules. Upon
the election of the proposed directors, 3 out of 4 members of the Board for the ensuing year will be “independent”
within the meaning of NI 52-110 and NASDAQ rules.
During Fiscal 2020, the Board held 16 meetings. All directors were
in attendance for each regularly scheduled quarterly and annual meeting of the Board.
Dr. Carter acts as Chairman of the Board. His duties and responsibilities
consist in the oversight of the quality and integrity of the Board’s practices.
The Board is responsible for overseeing management in carrying out
the business and affairs of the Corporation. Directors are required to act and exercise their powers with reasonable prudence in
the best interests of the Corporation. The Board agrees with and confirms its responsibility for overseeing management’s
performance in the following particular areas:
In carrying out its mandate, the Board relies primarily on management
to provide it with regular detailed reports on the operations of the Corporation and its financial position. The Board reviews
and assesses these reports and other information provided to it at meetings of the Board and/or of its committees. At least annually,
the Board approves a strategic plan for the Corporation taking into account, among other things, the opportunities and risks of
the Corporation’s business, its risk appetite, emerging trends, and the competitive environment in the industry.
Written position descriptions have been approved for
the chairs of each committee of the Board. The primary role and responsibility of the chair of each committee of the Board is to:
(i) in general, ensure that the committee fulfills its mandate, as determined by the Board and in accordance with the committee’s
charter; (ii) chair meetings of the committee; (iii) report to the Board; and (iv) act as liaison between the committee and the
Board and management. The Board has adopted a written position description for the chairman of the Board.
The chairman of the Board is responsible for leading
the Board to fulfill its duties under the Board’s mandate as independent of management and acting as an advisor to the CEO.
The chairman’s duties include, but are not limited
to, setting meeting agendas, approving and supervising management’s progress towards achieving strategic goals, chairing
meetings and working with the respective committees and management to ensure, to the greatest extent possible, the effective functioning
of the committees and the Board. The chairman must oversee that the relationship between the Board, management of the Corporation,
the Shareholders and other stakeholders are effective, efficient and further to the best interests of the Corporation.
The Board has not developed a written position description for the
CEO. The CEO’s objectives are discussed and decided during a Board meeting following the CEO’s presentation of the
Corporation’s annual plan. These objectives include a general mandate to maximize Shareholder value. The Board approves the CEO’s
objectives for the Corporation on an annual basis and reviews them quarterly.
The Corporation provides orientation for new appointees to the Board
and committees in the form of informal meetings with members of the Board and senior management, complemented by presentations
on the main areas of the Corporation’s business. The Board does not formally provide continuing education to its directors,
as directors are experienced members. The Board relies on professional assistance, when judged necessary, in order to be educated/updated
on a particular topic.
The Board does not formally provide continuing education to its
directors. The directors are experienced members. The Board relies on professional assistance when judged necessary in order to
be educated/updated on a particular topic.
The Board actively monitors compliance with the Code Conduct and
promotes a business environment where employees are encouraged to report malfeasance, irregularities and other concerns. The Code
of Conduct provides for specific procedures for reporting non-compliant practices in a manner which, in the opinion of the Board,
encourages and promotes a culture of ethical business conduct.
The Board has also adopted a disclosure policy, an insider trading
policy, a Majority Voting Policy, management and Board compensation policies, and a whistleblower policy.
The Board receives recommendations from the GHR Committee, but retains
responsibility for managing its own affairs by, among other things, giving its approval for the composition and size of the Board,
and the selection of candidates nominated for election to the Board. The GHR Committee initially evaluates candidates for nomination
for election as directors, having regard to the background, employment and qualifications of possible candidates.
The selection of the nominees for the Board is made by the other
members of the Board, based on the needs of the Corporation and the qualities required to sit on the Board, including ethical character,
integrity and maturity of judgment of the candidates; the level of experience of the candidates, their ideas regarding the material
aspects of the business of the Corporation, the expertise of the candidates in fields relevant to the Corporation while complementing
the training and experience of the other members of the Board; the will and ability of the candidates to devote the necessary time
to their duties to the Board and its committees, the will of the candidates to serve on the Board for numerous consecutive financial
periods and, the will of the candidates to refrain from engaging in activities which conflict with the responsibilities and duties
of a director of the Corporation and its Shareholders. The Corporation confirms that the training and qualifications of potential
new directors correspond to the selection criteria of the Board and, depending on the results of that research, organizes meetings
with the potential candidates.
In the case of incumbent directors whose terms of office are set
to expire, the Corporation will review such directors’ overall service to the Corporation during their term of office, including
the number of meetings attended, level of participation, quality of performance and any transactions of such directors with the
Corporation during their term of office.
The Corporation may use various sources in order to identify the
candidates for the Board, including its own contacts and the references of other directors, officers, advisors of the Corporation
and executive placement agencies. The Corporation will consider director candidates recommended by Shareholders and will evaluate
director candidates in the same manner in which it evaluates candidates recommended by other sources. In making recommendations
for director nominees for the annual meeting of Shareholders, the Corporation will consider any written recommendations of director
candidates by Shareholders received by the Corporate Secretary of the Corporation not later than 120 days before the anniversary
of the previous year’s annual meeting of Shareholders. Recommendations must include the candidate’s name, contact information
and a statement of the candidate’s background and qualifications and must be mailed to the Corporation.
Following the selection of the candidates by the Board, the Corporation
will propose a list of candidates to the Shareholders for the annual meeting of Shareholders.
The Board does not have a nominating committee and has not adopted
any formal written director term limit policy, other than as described above in the section entitled “Majority Voting Policy.”
Shareholders who wish to suggest a candidate for the Board may submit
a written recommendation to our Corporate Secretary at 3009 boul. de la Concorde East, Suite 102 Laval, Québec, Canada H7E
2B5, telephone: (450) 686-4555, subject to compliance with the Advance Notice Bylaw and the requirements under the section entitled
“Questions About the Meeting and Voting Your Shares”, along with the Shareholder’s name, setting forth, among
other things:
The mandate of the GHR Committee consists of the evaluation of the
proposed nominations of senior executives and director candidates to the Board; recommending for Board approval, if appropriate,
revisions of the corporate governance practices and procedures; developing new charters for any new committees established by the
Board; monitoring relationships and communication between management and the Board; monitoring emerging best practices in corporate
governance; and oversight of governance matters and assessing the Board and its committees. The GHR Committee is also in charge
of establishing the procedures which must be followed by us to comply with applicable guidelines of the TSXV and NASDAQ regarding
corporate governance.
The GHR Committee has the responsibility of evaluating the compensation
and performance incentives of, as well as the benefits granted to, the Corporation’s management in accordance with their
responsibilities and performance, as well as to recommend the necessary adjustments to the Board. The GHR Committee also reviews
the amount and method of compensation granted to the directors. The GHR Committee may mandate an external firm in order to assist
it during the execution of its mandate. The GHR Committee considers time commitment, comparative fees and responsibilities in determining
compensation. With respect to the compensation of the Corporation’s officers, see “Compensation of Named Executive
Officers”.
The GHR Committee is composed of independent members within the
meaning of NI 52-110 and NASDAQ rules, namely Mr. Olds., Dr. Carter and Mr. Canan.
The GHR Committee’s charter can be found on the Corporation’s
website at https://www.acastipharma.com/en/investors/corporate-governance/governance-documents.
The Board, its committees and each director of the Corporation are
subject to periodic evaluations of their efficacy and contribution. The evaluation procedure consists in identifying any shortcomings
and implementing adjustments proposed by directors at the beginning and during meetings of the Board and of each of its committees.
Among other things, these adjustments deal with the level of preparation of directors, management and consultants employed by the
Corporation, the relevance and sufficiency of the documentation provided to directors and the time allowed to directors for discussion
and debate of items on the agenda.
The Board has actively considered the issue of term limits for directors
and will continue to do so. At this time, the Board does not believe that it is in the best interests of the Corporation to establish
a limit on the number of times a director may stand for election. While such a limit could help create an environment where fresh
ideas and viewpoints are available to the Board, a director term limit could also disadvantage the Corporation through the loss
of the beneficial contribution of directors who have developed increasing knowledge of, and insight into, the Corporation and its
operations over a period of time. As the Corporation operates in a unique industry, it is difficult to find qualified directors
with the appropriate background and experience and the introduction of a director term limit would impose further difficulty.
The Corporation has not adopted a formal written policy regarding
diversity among executive officers and directors, including mechanisms for Board renewal, in connection with, among other things,
the identification and nomination of women directors. Nevertheless, the Corporation recognizes that gender diversity is a significant
aspect of diversity and acknowledges the important role that women with appropriate and relevant skills and experience can play
in contributing to the diversity of perspective on the Board.
Rather than considering the level of representation of women for
director and executive officer positions when making Board or executive officer appointments, the Corporation considers all candidates
based on their merit and qualifications relevant to the specific role. While the Corporation recognizes the benefits of diversity
at all levels within its organization, it does not currently have any targets, rules or formal policies that specifically require
the identification, consideration, nomination or appointment of candidates for director or executive management positions or that
would otherwise force the composition of the Board and executive management team. Currently, the Corporation has one woman director
who is also its CEO.
Additional financial and other information relating to the Corporation
is included in its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other disclosure
documents, which are available on SEC’s EDGAR website at www.sec.gov and SEDAR at www.sedar.com.
In addition, copies of the Corporation’s Financial Report
and this Proxy Statement, all as filed on EDGAR and SEDAR, may be obtained from the Secretary of the Corporation upon request.
The Corporation may require the payment of a reasonable charge if the request is made by a person who is not a Shareholder.
The Board has approved the contents and the mailing of this Proxy
Statement.
7.20 Adjournment
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15
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7.21 Storage of Ballots and Proxies
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16
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8 - SHARES AND CERTIFICATES
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16
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8.1 Issuance of Shares
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16
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8.2 Payment of Shares
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16
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8.3 Unpaid Shares
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16
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8.4 Securities Register
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16
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8.5 Register of Transfer
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17
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8.6 Registration of Transfer
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17
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8.7 Registered Ownership
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18
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8.8 Share Certificates
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18
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8.9 Certificated Shares
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18
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8.10 Uncertificated Shares
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18
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8.11 Replacement of Share Certificates
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19
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8.12 Joint Shareholders
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19
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8.13 Deceased Shareholders
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19
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8.14 Delegation
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19
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9 - DIVIDENDS AND RIGHTS
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19
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9.1 Dividends
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19
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9.2 Dividend Cheques
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20
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9.3 Non-receipt or Loss of Cheques
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20
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9.4 Record Date for Dividends and Rights
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20
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9.5 Unclaimed Dividends
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20
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10 - NOTICES
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20
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10.1 Method of Giving Notices
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20
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10.2 Notice to Joint Shareholders
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21
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10.3 Undelivered Notices
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21
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10.4 Omissions and Errors
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21
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10.5 Persons Entitled by Death or Operation of Law
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21
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10.6 Waiver of Notice
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21
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11 - MISCELLANEOUS
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22
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11.1 Declarations to the Enterprise Register
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22
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11.2 Enactment, Repeal and Amendment of the By-Law
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22
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1 - DEFINITIONS
In this By-law, and all other By-laws of the Corporation, unless
the context indicates otherwise:
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a)
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“Act” means the Business Corporations Act (Quebec), or any statute which may be substituted therefor, including the regulations made thereunder as amended from time to time;
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b)
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“Articles” shall mean the articles of the Corporation and includes any amendments thereto;
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|
c)
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“Board” means the board of directors of the Corporation;
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|
d)
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“By-laws” means the administrative By-laws of the Corporation, as well as all other administrative by-laws of the Corporation in force from time to time, including those referred to in section 726 of the Act, and any amendments which may be made to such By-laws from time to time;
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e)
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“Director” means a member of the Board;
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f)
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“Person” includes an individual, a sole proprietorship, a partnership, an association, a labour organization, an organization, a trust, a body corporate and all individuals acting as a trustee, executor, curator or as any other legal representative;
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g)
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“Reporting Issuer” means a reporting issuer as defined in the Act; and
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h)
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“Shareholders Meeting” means an annual shareholders meeting or a special meeting of shareholders.
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a)
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words importing the singular number also include the plural and vice-versa; words importing the masculine gender include the feminine and vice-versa;
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b)
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the headings used in this By-law are for ease of reference only and do not form part of it;
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c)
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all words used in this By-law and defined in the Act shall have the meanings given to such words in the Act or in the related parts thereof;
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d)
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this By-law is adopted pursuant to the Act, and is subject to, and must be read in conjunction with the Act. In the event of an inconsistency between a provision of this By-law and a provision of the Act, the latter shall prevail.
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1.3
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Execution in Counterpart, by Facsimile and by Electronic Signature
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Subject to the Act, any notice, resolution, requisition, statement
or other document required or permitted to be executed for the purposes of the Act, may be signed by way of electronic signature,
by way of a facsimile signature or by way of signing several similar documents by one or more Persons, and those documents, when
duly signed by all Persons required or permitted to sign, as appropriate, shall constitute a single document for the purposes of
the Act.
2 - GENERAL BUSINESS
The head office of the Corporation must be permanently located in
Quebec. The Corporation may relocate its head office in accordance with the Act.
In addition to its head office, the Corporation may establish and
maintain other establishments, offices, places of business and branches both within and outside Quebec, as the Board may determine
from time to time.
The Corporation may have a seal, which shall be adopted and may
be changed by the Board. The absence of a seal on a document of the Corporation does not render the document invalid.
The fiscal year end of the Corporation shall be March 31 or be as
determined from time to time by the Board.
2.5
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Execution of Instruments
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Deeds, transfers, assignments, contracts, obligations, certificates
and other instruments shall be signed on behalf of the Corporation by any Director or officer of the Corporation. In addition,
the Board may from time to time direct the manner in which, and the Person or Persons by whom, any particular instrument or class
of instruments may or shall be signed.
Notwithstanding the foregoing, the secretary or any other officer
or any Director may sign certificates and similar instruments (other than share certificates) on the Corporation’s behalf
with respect to any factual matters relating to the Corporation’s business and affairs, including certificates verifying
copies of the Articles, By-laws, resolutions and minutes of meetings of the Corporation.
The banking business of the Corporation, or any part or division
of the Corporation, shall be transacted with such bank, trust company or other firm or body corporate as the Board may designate,
appoint or authorize from time to time and all such banking business, or any part thereof, shall be transacted on the Corporation’s
behalf by such one or more officers or other
Persons as the Board may designate, direct or authorize from time
to time and to the extent thereby provided.
2.7
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Voting Rights in Other Bodies Corporate
|
Except as otherwise provided by the Board, any Director or officer
has the full power to represent the Corporation, and more particularly to vote all of the shares or other securities carrying voting
rights of any other entity held from time to time by the Corporation, at any and all meetings of shareholders, bondholders, debentureholders
or holders of other securities (as the case may be) of such other entity and exercise all other rights attached to the said shares
or securities as if he were the owner thereof. The Board may, from time to time, appoint any other Person for the same purpose.
3 - DIRECTORS
The Board exercises all the powers necessary to manage or supervise
the management of the business and affairs of the Corporation. Subject to the Act, the Board shall exercise its powers by or pursuant
to a resolution passed at a meeting of the Board at which a quorum is present or approved in writing by all Directors in office.
Without limiting the foregoing, the Board may, on behalf of the
Corporation:
|
b)
|
issue, reissue, sell or hypothecate its debt obligations;
|
|
c)
|
enter into a suretyship to secure performance of an obligation of any Person; and
|
|
d)
|
hypothecate all or any of its property, owned or subsequently acquired, to secure any obligation.
|
Subject to the Act, the Articles and any By-laws, the Board may
from time to time delegate to a Director, a committee of the Board or an officer or such other person or persons so designated
by the Board all or any of the powers conferred on the Board by the Act to such extent and in such manner as the Board shall determine
at the time of each such delegation.
3.3
|
Qualifications of Directors
|
Any natural person may be a Director of the Corporation unless such
a person is less than eighteen (18) years of age, is under guardianship or curatorship, is of unsound mind and has been so found
by a court in Canada or elsewhere, is a person for whom the court prohibits the exercise of this function, or has the status of
bankrupt. A Director is not required to hold shares of the Corporation.
The Board of Directors of the Corporation shall be made up of a
minimum and a maximum number of Directors as indicated in the Articles of the Corporation as amended from time to time. The exact
number of Directors shall be established from time to time by resolution of the Board.
A majority of the Directors in office constitutes a quorum at any
meeting of the Board. In the absence of a quorum within the first fifteen (15) minutes following the start of the meeting, the
Directors may only deliberate on the meeting’s adjournment. A quorum of Directors may exercise all the powers of the Board
despite any vacancy on the Board.
Directors shall be elected by the shareholders at the first Shareholders
Meeting and at each subsequent annual meeting at which an election of Directors is required, by an ordinary resolution adopted
by a majority of the votes cast by shareholders able to vote on such resolution, and shall hold office until the next annual Shareholders
Meeting or, if elected for an expressly stated term, for a term expiring no later than three (3) years following the election.
The election need not be by ballot unless a ballot is demanded by any shareholder or required by the chairperson in accordance
with section 7.19. If an election of Directors is not held at an annual Shareholders Meeting at which such election is required,
the incumbent Directors shall continue in office until their resignation, replacement or removal.
If shareholders holding a certain class or series of shares have
an exclusive right to elect one or more Directors, such number of Directors shall be elected by the majority of votes cast by the
holders of such class or series of shares.
If permitted by the articles, the Directors may appoint one or more
additional Directors to hold office for a term expiring not later than the close of the next annual Shareholders Meeting, provided
the total number of Directors so appointed does not exceed one-third (1/3) of the number of Directors elected at the annual Meeting
of Shareholders preceding their appointment.
Subject to the Act, the shareholders may, by ordinary resolution
passed by a majority of votes cast at a special Shareholders Meeting duly called for that purpose, remove any Director or Directors.
If holders of any class or series of shares have an exclusive right to elect one or more Directors, a Director so elected may only
be removed by ordinary resolution of such holders.
A Director whose removal is to be proposed at a Shareholders Meeting
must be informed of the time and place of the meeting within the same delays as those prescribed for the calling of such meeting.
Such Director may attend the meeting and be heard or, if not in attendance, may explain, in a written statement read by the person
presiding over the meeting or made available to the shareholders before or at the meeting, why he opposes the resolution proposing
his removal.
Any vacancy created by the removal of a Director may be filled by
a resolution of the shareholders at the Shareholders Meeting at which the Director is removed or, if it is not, at a subsequent
meeting of the Board. If the holders of any class or series of shares have an exclusive right to elect one or more Directors and
a vacancy occurs among these Directors, the vacancy may be filled by the holders of that class or series of shares by ordinary
resolution at the Shareholders Meeting at which the Director is removed or, if it is not, by the remaining Directors elected by
the holders of that class or series of shares, if there are such remaining Directors.
A Director ceases to hold office when he dies, resigns, is removed,
becomes disqualified from holding office or otherwise no longer meets the requirements to hold office as specified by the Act.
A Director may
resign from office by delivering or sending a written notice to the Corporation and such resignation becomes effective at the time
the Director’s written resignation is received by the Corporation or at the time specified in the notice, whichever is later.
Subject to the Act
or to the Articles, a quorum of Directors may fill a vacancy on the Board.
If there is no quorum of Directors,
or if there has been a failure to elect the number or minimum number of Directors required by the Articles, the Directors then
in office must without delay call a special Shareholders Meeting to fill the vacancies on the
Board. If the Directors refuse or fail to call a meeting or if there are no Directors then in office, the meeting may be called
by any shareholder.
A Director appointed
or elected to fill a vacancy holds office for the unexpired term of his predecessor and remains in office until his successor is
elected or nominated.
3.11
|
Meetings by Telephone, Electronic or other Communication Facility
|
A Director may
participate in a meeting of the Board or of a committee of the Board by means of a telephonic, electronic or other communication
facility that permits all participants to communicate adequately with each other during the meeting. A Director who participates
in such meeting by such means is deemed to be present at that meeting.
In addition to the Directors having
to attend meetings of the Board, other Persons may also attend as needed, with the authorization
of the chairperson of the meeting or the majority of the Directors present at that meeting.
Meetings of the Board are held at the registered
office of the Corporation or at any other place within or outside of Quebec.
Meetings of the Board shall be held
from time to time at such place, on such day and at such time as the Board, the chairperson of the Board, the president, the secretary
or any two Directors may determine. Meetings are called by the chairperson of the Board, the
president or two Directors or by the secretary upon being asked to call such a meeting by the chairperson of the Board, the president
or two Directors.
The notice stating the time and place
of the meeting and specifying any matter to be dealt with relating to powers which the Board
may not delegate, shall be given to each Director at least forty-eight (48) hours before the meeting is to occur. In the event
of an emergency, such time limit shall be shortened to twenty-four (24) hours. This notice does not have to be given in writing.
Any Director may waive a notice of a meeting of
the Board. Attendance of a Director at a meeting of the Board constitutes a waiver of notice of such meeting unless the Director
attends such meeting for the sole purpose of objecting to the holding of the meeting on the grounds that it was not duly called.
3.16
|
First Meeting of New Board
|
Provided a quorum of Directors is present,
each newly elected Board may without notice hold its first meeting following the Shareholders Meeting at which such Board is elected.
Whether or not there is quorum, any
meeting of the Board may be adjourned from time to time by a vote of a majority of the Directors
who are present and subsequently resumed without the requirement that a new notice be given, if the time and place of the adjourned
meeting is announced at the same time as the adjournment.
At the adjourned meeting, the Board may validly
transact business in accordance with the terms established at the time of the adjournment provided that there is a quorum. The
Directors who constituted a quorum at the original meeting do not have to constitute the quorum at the adjourned meeting. If there
is no quorum at the adjourned meeting, the meeting is deemed to have ended immediately after the adjournment.
Subject to the Act, at all meetings of the Board,
any question shall be decided by a majority of the votes cast on the question and, in the case of an equality of votes, the chairperson
of the meeting shall not be entitled to a second or casting vote. Any question at a meeting of the Board shall be decided by a
show of hands unless a ballot is required or demanded.
A Director who
is present at a meeting of the Board or a committee of the Board is deemed to have consented to any resolution passed at the
meeting unless:
|
a)
|
the Director’s dissent has been entered in the minutes;
|
|
b)
|
the Director sends a written dissent to the secretary of the meeting before the meeting is adjourned; or
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c)
|
the Director delivers a written dissent to the chairperson of the Board, sends it to the chairperson by any means providing proof of the date of receipt or delivers it to the head office of the Corporation immediately after the meeting is adjourned.
|
A Director is not entitled to dissent after voting
for or consenting to a resolution.
A Director who was not present at a meeting at which
a resolution was passed is deemed to have consented to the resolution unless he delivers a written dissent to the chairperson of
the Board, sends it to the chairperson of the Board by any means providing proof of the date of receipt or delivers it to the head
office of the Corporation within seven (7) days after becoming aware of the resolution.
3.20
|
Resolution in Writing
|
A resolution in writing, signed by
all the Directors entitled to vote thereon is as valid as if it had been passed at a meeting
of the Board or, as the case may be, of a committee of the Board. A copy of the resolution must be kept with the minutes of the
meetings and the resolutions of the Board and its committees.
3.21
|
Chairperson and Secretary
|
The chairperson of the Board or, in
the chairperson’s absence, the president or, in the president’s absence, a vice-president, shall be chairperson of
any meeting of the Board. If none of these officers are present, the Directors present shall
choose one of their number to be chairperson. The secretary of the Corporation shall act as secretary at any meeting of the Board
and, if the secretary of the Corporation is absent, the chairperson of the meeting shall appoint a Person, who need not be a Director,
to act as secretary of the meeting.
3.22
|
Remuneration and Expenses
|
The Directors shall be paid such remuneration for
their services as Directors as the Board may from time to time authorize. In addition, the Board may authorize, by resolution,
a special remuneration to a Director who executes specific or additional duties on behalf of the Corporation. The Directors shall
also be entitled to be paid in respect of travelling and other expenses properly incurred by them in attending meetings of the
Board or any committee thereof or in otherwise serving the Corporation. Nothing herein contained shall preclude any Director from
serving the Corporation in any other capacity and receiving remuneration therefor.
3.23
|
Duty of Loyalty and Conflict of Interest
|
Subject to the Act, the Directors are
bound by the same obligations as are imposed by the Civil Code of Quebec (Quebec) on any Director of a legal person. Consequently,
in the exercise of their functions, the Directors are duty-bound
toward the Corporation to act with prudence and diligence, honesty and loyalty and in the interest of the Corporation.
In particular,
but without limiting the generality of the foregoing:
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a)
|
a Director may not mingle the property of the Corporation with his own property nor may he use for his own profit or that of a third Person any property of the Corporation or any information he obtains by reason of his duties, unless he is expressly authorized to do so by the shareholders of the Corporation;
|
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b)
|
unless he has obtained the express consent of the Board, a Director must keep confidential the deliberations of the Board, any internal document and any other information to which he has access in the performance of his duties which is not publicly known and which has not been publicly disclosed by the Corporation;
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c)
|
a Director shall avoid placing himself in any situation where his personal interests would be in conflict with his obligations as a Director of the Corporation;
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d)
|
a director must disclose to the Corporation any interest he has in a business or association that may place him in a situation of conflict of interest and of any right he may set up against it, indicating their nature and value, where applicable.
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3.24
|
Contracts or Transactions - Disclosure of Interest
|
A Director must disclose the nature
and value of any interest he has in a contract or transaction to which the Corporation is a
party. “Interest” means any financial stake in a contract or transaction that may reasonably be considered likely to
influence decision-making. Furthermore, a proposed contract or a proposed transaction, including related negotiations, is considered
a contract or transaction.
A Director must
also disclose any contract or transaction to which the Corporation and any of the following are a party:
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a)
|
an associate of the Director or officer;
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b)
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a group of which the Director or officer is a Director or officer; or.
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c)
|
a group in which the Director or officer or an associate of the Director or officer has an interest.
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The Director satisfies the requirement if he discloses,
in a case specified in subparagraph b) above, the Directorship or office held within the group or, in a case specified in subparagraph
c) above, the nature and value of the interest he or his associate has in the group.
Unless it is recorded in the minutes of the first
meeting of the Board at which the contract or transaction is discussed, the disclosure of an interest, contract or transaction
must be made in writing to the Board as soon as the Director becomes aware of the interest, contract or transaction.
The disclosure must be made even in the case of
a contract or transaction that does not require approval by the Board.
3.25
|
Contracts or Transactions - Votes
|
No Director may
vote on a resolution to approve, amend or terminate a contract or transaction described in section 3.24 or be present during deliberations
concerning the approval, amendment or termination of such a contract or transaction, unless
the contract or transaction:
|
a)
|
relates primarily to the remuneration of the Director or an associate of the Director as a Director of the Corporation or an affiliate of the Corporation;
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b)
|
relates primarily to the remuneration of the Director or an associate of the Director as an officer, employee or mandatary of the Corporation or an affiliate of the Corporation, if the Corporation is not a Reporting Issuer;
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c)
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is for indemnity or liability insurance; or
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d)
|
is with an affiliate of the Corporation, and the sole interest of the Director is as a Director or officer of the affiliate.
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If no quorum exists for the purpose
of voting on a resolution to approve a contract or transaction only because a Director is not
permitted to be present during deliberations, the other Directors present are deemed to constitute a quorum for the purpose of
voting on the resolution.
If all the Directors
are required to abstain from voting, the contract or transaction may be approved solely by the shareholders entitled to vote,
by ordinary resolution. The disclosure required by section 3.24 must be made to the shareholders
in a sufficiently clear manner before the contract or transaction is approved.
4 - COMMITTEES
4.1
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Committees of the Board
|
The Board may, by resolution, create
one or more committees comprised of Directors and, subject to the limitations prescribed by
the Act, from time to time set the mandate and the number
of Directors of any such committee.
Subject to the Act and unless otherwise
determined by a resolution of the Board, each committee
shall have the power to fix its quorum at not less than a majority of its members, to elect its chairperson and
to regulate its procedure. Each committee must provide the Board with a report concerning its activities if the Board makes such
a request. The Board may cancel or modify any decision made by the committee.
5 - OFFICERS
5.1
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Appointment of Officers
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The Board may appoint any officers and any other
mandataries as it deems appropriate and determine their titles, functions, powers, employment conditions and remuneration. An officer
may but need not be a Director or a shareholder and any person may hold more than one office.
The Board may, in accordance with this
By-law and subject to the Act, delegate to such officers powers to manage, or supervise the
management of, the business and affairs of the Corporation.
The Board shall have the power from
time to time to appoint agents or attorneys for the Corporation in or out of the Province of
Quebec with such powers of management or otherwise (including the power to sub-delegate) as the Board may determine.
5.3
|
Disclosure of Interest
|
The officers are mandataries of the
Corporation. In this capacity, in the exercise of their functions, the officers are bound,
among other things, toward the Corporation to act with prudence and diligence, honesty and loyalty and in the interest of the Corporation.
An officer must disclose the nature
and value of any interest he h s in a contract or transaction to which the Corporation is a
party, in the same way that a Director must disclose such an interest pursuant to section 3.24. In the case of an officer who is
not a Director, disclosure must be made as soon as:
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a)
|
the officer becomes an officer;
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|
b)
|
the officer becomes aware that the contract or transaction is to be discussed or has been discussed at a meeting of the Board; or
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|
c)
|
the officer or the officer’s associate acquires an interest in the contract or transaction, if it was entered into earlier.
|
The disclosure must be made even in
the case of a contract or transaction that does not require approval by the Board.
An officer may
resign at any time. The resignation of an officer takes effect on the date the Corporation receives the written notice he gives
or on the later date indicated therein.
The Board may,
at its own discretion, remove an officer of the Corporation at all times and the reason for the removal is not required to be given.
6 - PROTECTION OF DIRECTORS
AND OFFICERS
6.1
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Indemnity of Directors and Officers
|
Subject to the following, the Corporation
must indemnify a Director or officer of the Corporation, a former Director or officer of the Corporation, a mandatary, any other
person who acts or acted at the Corporation’s request as a Director or officer of another group, as well as their heirs,
legatees, liquidators, assignees, authorized representatives or beneficiaries, against all costs, charges and expenses reasonably
incurred in the exercise of their functions, including an
amount paid to settle an action or satisfy a judgment, or arising from any investigative or other proceeding in which the person
is involved if:
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a)
|
the person acted with honesty and loyalty in the interest of the Corporation or, as the case may be, in the interest of the other group for which the person acted as Director or officer or in a similar capacity at the Corporation’s request; and
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|
b)
|
in the case of a proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that his conduct was lawful.
|
The Corporation must also advance moneys
to such a person for the costs, charges and expenses of a proceeding referred to in the above paragraph.
However, in the event that a court
or any other competent authority judges that the conditions set out in subparagraphs a) and
b) above are not fulfilled or that the person committed an intentional or gross fault, the Corporation may not indemnify the person
and the person must repay to the Corporation any moneys advanced.
The Corporation may, with the approval
of the court, in respect of an action by or on behalf of the Corporation or other group referred
to above, against a person referred to above, advance the necessary monies to the person or indemnify the person against all costs,
charges and expenses reasonably incurred by the person in connection with the action, if the person fulfills the conditions set
out above.
The provisions of this section 6.1
shall not, to the extent permitted by law, operate to affect or otherwise restrict the scope of any indemnification contractually
agreed by or in favour of the Corporation or otherwise applicable under previous provisions
of the law or any by-law of the Corporation of which a Director or an officer may avail himself.
The Corporation may purchase and maintain
insurance for the benefit of its Directors, officers and other mandataries against any liability
they may incur as such or in their capacity as Directors, officers or mandataries of another group, if they act or acted in that
capacity at the Corporation’s request.
7 - MEETINGS OF SHAREHOLDERS
The Corporation must
hold an annual shareholders meeting; if necessary, the Corporation may also hold one or more special shareholder meetings.
An annual Shareholders
Meeting entitled to vote at such a meeting must be held not later than eighteen (18) months after the Corporation is constituted
and, subsequently, not later than fifteen (15) months after the last preceding annual shareholders meeting, for the purpose of:
|
a)
|
considering the financial statements of the Corporation for the fiscal year ending within six (6) months preceding the date of such meeting and the auditor’s report thereon, if any;
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b)
|
considering any other financial information presentation of which is required by the Articles or the By-laws;
|
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d)
|
appointing the auditor; and
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e)
|
deliberating with respect to all other matters which may be presented at the meeting.
|
The Board calls the annual Shareholders
Meeting. Otherwise, the meeting may be called by the shareholders in accordance with the Act
or with section 7.3 below.
The Board may
at any time call a special Shareholders Meeting.
The holders of not less than ten percent
(10%) of the issued shares that carry the right to vote at a Shareholders Meeting sought to
be held may requisition the Board to call a Shareholders Meeting for the purposes stated in the requisition.
The requisition,
signed by at least one shareholder, must state the business to be transacted at the meeting and must be sent to each Director and
to the head office of the Corporation.
On receiving the requisition, the Board
calls a Shareholders Meeting to transact the business stated in the requisition. If the Board
does not within twenty-one (21) days after receiving the requisition call a meeting, any shareholder who signed the requisition
may call the meeting.
Unless the shareholders otherwise resolve
at a meeting called by shareholders, the Corporation must reimburse the shareholders for the
expenses reasonably incurred by them in requisitioning, calling and holding the meeting.
Subject to the Articles, Shareholders
Meetings must be held in Quebec at the place determined by the Board. If the Articles so allow,
or in the absence of such a provision, if
all the shareholders entitled to vote at the meeting agree, the
meeting may be held at a place outside of Quebec.
7.5
|
Participation in Meetings by Electronic Means
|
A meeting may
be held solely by means of equipment enabling all participants to communicate directly with one another.
In addition, any Person entitled to attend a Shareholders
Meeting may participate in the meeting by means of any equipment enabling all participants to communicate directly with one another.
A Person participating in a meeting by such means is deemed present at the meeting.
Any shareholder participating in a
Shareholders Meeting by means of equipment enabling all participants to communicate directly
with one another may vote by any means enabling votes to be cast in a way that allows them
to be verified afterwards and protects the secrecy of the vote when a secret ballot has been requested.
A notice of a Shareholders Meeting
specifying the time and place of the meeting, as well as the business to be transacted, must be sent, in writing and by any means
providing proof of the date of receipt, to each Person entitled to vote at the meeting not less than twenty-one (21) days and not
more than sixty (60) days before the meeting. It must also specify the time before which the Corporation must
receive the proxies of the shareholders who wish to be represented at the Shareholders Meeting, which time must not exceed forty-eight
(48) hours preceding the Shareholders Meeting or the resumption of a Shareholders Meeting after an adjournment, excluding Saturdays
and holidays.
Notice of a Shareholders Meeting at which special
business is to be transacted shall state the nature of that business in sufficient detail to permit the shareholder to form a reasoned
judgment thereon, and contain the text of any special resolution to be submitted to the meeting. All business transacted at a special
meeting of the shareholders and all business transacted at an annual shareholders meeting, except consideration of the financial
statements and auditor’s report, the appointment of the auditor and the election of Directors, is deemed to be special business.
If a Director or
a shareholder entitled to vote at a Shareholders Meeting gives written notice not less than ten (10) days before the meeting to
the auditor or a former auditor of the Corporation, the auditor or former auditor attends the meeting at the Corporation’s
expense and answers any question relating to their duties as auditor.
Irregularities in the notice of the
Shareholders Meeting or in its sending will not affect the validity of the Shareholders Meeting. Similarly, the unintentional failure
to send a notice of Shareholders Meeting to a person entitled to it, or the failure to receive
it by a person entitled to the notice, does not invalidate the resolutions passed at such meeting.
A shareholder or Director may waive notice of a
Shareholder Meeting; the waiver may be given either before or after the meeting. Their attendance at the meeting is a waiver of
notice of the meeting unless they attend the meeting for the sole purpose of objecting to the holding of the meeting on the grounds
that it was not lawfully called or held.
7.8
|
Record Date for Notice
|
The Board may set, in conformity with applicable
securities law requirements, a date prior to the date on which a meeting is to be called or held as the record date for the purpose
of determining shareholders entitled to receive notice of or to vote at the meeting, and only those registered shareholders registered
on the date so set shall be so entitled, notwithstanding any transfer of shares in the registers of the Corporation between the
record date and the date on which the meeting is called or held. The record date must be not less than twenty-one (21) days and
not more than sixty (60) days before the meeting.
The chairperson of the Board or, in
the chairperson’s absence, the president or, in the president’s absence, a vice-president shall be chairperson of any
meeting of shareholders. If none of these officers are present within fifteen (15) minutes after the time appointed for holding
the meeting, the Persons present and entitled to vote shall choose a chairperson from amongst
themselves. The secretary of the Corporation shall act as secretary at any Shareholders Meeting or, if the secretary of the Corporation
is absent, the chairperson of the meeting shall appoint some person, who
need not be a shareholder, to act as secretary of the meeting. If desired, one or more scrutineers, who need not be shareholders,
may be appointed by resolution or by the chairperson with the consent of the meeting in accordance with the procedure set out in
section 7.16.
The chairperson of the meeting directs
the meeting and ensures its orderly conduct. His decisions, including those relating to the
validity of proxies, are final and binding on all the shareholders.
7.11
|
Persons Entitled to be Present
|
The only persons entitled to be present
at a Shareholders Meeting shall be those entitled to vote thereat, the Directors and auditors of the Corporation and others who,
although not entitled to vote, are entitled or required under any provision of the Act or the
Articles or By-laws to be present at the meeting. Any other person may be admitted only on the invitation of the chairperson of
the meeting or with the consent of the meeting in accordance with the procedure set out in section 7.17.
A quorum of shareholders is present
at a meeting of shareholders, provided that a quorum shall not be less than two persons, if the holders of at least thirty-three
and one-third percent (33 1/3%) of the shares of the Corporation entitled to vote at the meeting
are present in person or represented by proxy. A quorum need not be present throughout the meeting provided a quorum is present
at the opening of the meeting.
Subject to a record date established
in accordance with section 7.8, at a Shareholders Meeting, the shareholders registered on the
securities register of the Corporation are entitled to exercise the voting rights attached to the shares in their name.
7.14
|
Proxies and Representatives
|
Every shareholder entitled to vote
at a Shareholders Meeting may, by means of a proxy, appoint a proxyholder, or one or more alternate proxyholders, who need not
be shareholders, to attend and act at the meeting in the manner and to the extent authorized
and with the authority conferred by the proxy. A proxy shall be signed in writing or by electronic signature by the shareholder
or the shareholder’s representative authorized in writing or by electronic signature.
Unless otherwise indicated,
a proxy lapses one year after the date it is given. It may be revoked at anytime.
A proxyholder has the same rights as
the shareholder represented to speak at a Shareholders Meeting in respect of any matter and
to vote at the meeting. However, a proxyholder who has conflicting instructions from more than one shareholder may not vote by
a show of hands.
If two or
more Persons hold shares jointly, one of those holders present at a Shareholders Meeting may in the absence of the others vote
the share, but if two or more of those Persons who are present, in person or by proxy, vote, they shall vote as one on the shares
jointly held by them.
Except as otherwise required by the
Act and the Articles, all questions proposed for the consideration of shareholders at a Shareholders
Meeting shall be determined by a majority of the votes cast by all who are entitled to vote.
In case of
an equality of votes at any meeting of shareholders, regardless of the manner of voting, the chairperson of the meeting shall not
be entitled to a second or casting vote.
Any question at a Shareholders Meeting shall be
decided by a show of hands, unless a ballot thereon is demanded by a shareholder entitled to vote at the Shareholders Meeting as
hereinafter provided. Every Person who is present and entitled to vote thereon shall have one vote. Whenever a vote by any means
other than by ballot is taken, a declaration by the chairperson of the meeting that the vote upon the question has been carried
or carried by a particular majority or not carried and an entry to that effect in the minutes of the meeting shall be prima
facie evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against any resolution
or other proceeding in respect of the said question, and the result of the vote so taken shall be the decision of the shareholders
upon the said question.
On any question proposed for consideration
at a meeting of shareholders, and whether or not a show of hands has been taken thereon, the chairperson may require, or any shareholder
or proxyholder entitled to vote at the meeting may demand, a ballot. A ballot so required or demanded shall
be taken in such manner as the chairperson shall direct. A requirement or demand for a ballot may be withdrawn at any time prior
to the taking of the ballot. If a ballot is taken each Person present shall be entitled, in respect of the shares which the Person
is entitled to vote at the meeting upon the question, to that number of votes provided by the Act or the Articles, and the result
of the ballot so taken shall be the decision of the shareholders upon the said question.
Whether or not there is quorum, the
chairperson of the Shareholders Meeting may, with the consent of the shareholders present or represented by proxy and following
the procedure set at section 7.16, adjourn any Shareholders
Meeting. The chairperson of the Shareholders Meeting may
also adjourn a meeting ex officio if he believes it is impossible to conduct it in an orderly manner.
If a Shareholders Meeting
is adjourned for less than thirty (30) days, it is not necessary to give notice of the adjourned meeting other than by announcement
at the original meeting. If a Shareholders Meeting is adjourned by one or more adjournments for an aggregate of thirty (30) days
or more, notice of the adjourned meeting must be given as for an original meeting.
The Shareholders Meeting is validly
resumed if it is held on the date and at the time and place announced and if there is quorum.
In the absence of quorum at the adjourned meeting, the original meeting is deemed to have terminated immediately after its adjournment.
7.21
|
Storage of Ballots and Proxies
|
The Corporation must,
for at least three (3) months after a Shareholders Meeting, keep at its head office the ballots cast and the proxies presented
at the meeting. Any shareholder or proxyholder who was entitled to vote at the meeting may, without charge, inspect the ballots
and proxies kept by the Corporation.
8 - SHARES AND CERTIFICATES
Subject to any pre-emptive right granted
to shareholders, shares may be issued at the times, to the Persons, including Directors and officers, and for the consideration
that the Board determines. The Board may, by resolution, accept subscriptions, issue and allot unissued shares from the Corporation’s
share capital and grant exchange rights, options or acquisition
rights with respect to those shares.
Shares may be issued whether or not they are fully
paid. However, shares may only be considered paid if consideration equal to the issue price determined by the Board has been paid
to the Corporation.
Consideration for the shares issued
by the Corporation is payable in money, or in property or past services determined by the Board to be the fair equivalent of the
money consideration, considering all the circumstances.
A promissory note or a promise to pay
made by a Person to whom shares are issued, or a Person who does not deal at arm’s length,
within the meaning of that expression in the Taxation Act (Quebec), with a Person to whom shares are issued does not constitute
consideration for the shares.
Unless the terms of payment for shares
are determined by contract, the Board may call for payment of all or part of the unpaid amounts
on shares subscribed or held by the shareholders, the whole as provided by the Act.
The securities register of the Corporation
must contain the following information with respect to its shares:
|
a)
|
the names, in alphabetical order, and the addresses of present and past shareholders;
|
|
b)
|
the number of shares held by each such shareholder;
|
|
c)
|
the date and details of the issue and transfer of each share; and
|
|
d)
|
any amount due on any share.
|
The register must contain, if applicable,
the same information with respect to the Corporation’s debentures, bonds, notes and other
securities, with the necessary modifications.
The Corporation shall
cause to be kept a register of transfers in which all transfers of securities issued by the Corporation in registered form and
the date and other particulars of each transfer shall be set out.
Subject to the Act, the transfer of shares is governed
by the Act respecting the transfer of securities and the establishment of security entitlements (Quebec).
8.6
|
Registration of Transfer
|
If an endorsed share certificate in
registered form is presented to the Corporation with a request to register a transfer of the certificated share or an instruction
is presented to the Corporation with a request to register a transfer of an uncertificated
share, the Corporation registers the transfer as requested if:
|
a)
|
under the terms of the share, the purchaser is eligible to have the share registered in that Person’s name;
|
|
b)
|
the endorsement or instruction is made by the appropriate Person or by that Person’s representative;
|
|
c)
|
reasonable assurance is given that the endorsement or instruction is neither forged nor counterfeited and is authorized;
|
|
d)
|
any applicable fiscal law that imposes duties on the Corporation at the time of the transfer has been complied with;
|
|
e)
|
the transfer does not violate any restriction on transfer imposed by the Corporation that is enforceable against the purchaser or imposed by law; and
|
|
f)
|
the transfer is rightful or is to a protected purchaser, pursuant to the Act respecting the transfer of securities and the establishment of security entitlements (Quebec).
|
Shares that are not fully paid but
for which no instalment is payable may only be transferred with the authorization of the Board.
The Directors must reasonably verify the acquirer’s ability to pay for the shares before authorizing the transfer.
A share may
not be transferred until all instalments payable up to the time of transfer have been fully paid.
Subject to the Act, the Corporation
may treat the registered owner of a share as the Person exclusively entitled to vote, to receive
notices, to receive any dividend or other payments in respect thereof and otherwise to exercise all the rights and powers of an
owner of a share.
A share issued by the Corporation may
be a certificated share or an uncertificated share. A certificated share is represented by
a paper certificate in registered form, and an uncertificated share is represented by an entry in the securities register in the
name of the shareholder.
Unless otherwise provided in the Articles, shares
are issued as certificated shares unless the Board determines, by resolution, that the shares of any class or series or certain
shares of a class or series are to be issued as uncertificated shares.
The Board may also, by resolution, determine that
a certificated share becomes an uncertificated share as soon as the paper certificate is surrendered to the Corporation.
Inversely, the Board may, by resolution,
determine that an uncertificated share becomes a certificated share on delivery to the shareholder
of a certificate in the shareholder’s name or, in the case of a control agreement under the Act respecting the transfer
of securities and the establishment of security entitlements (Quebec), on delivery to the purchaser, within the meaning of
the Act respecting the transfer of securities and the establishment of security entitlements (Quebec), of a certificate
in the purchaser’s name, unless there are provisions inconsistent with such a control agreement, in which case those provisions
apply. The Board must give notice of the resolution to the shareholders of the classes or series of shares concerned.
In the case of
certificated shares, the Corporation must issue to the shareholder, without charge, a certificate in registered form.
Share certificates shall
be in such form as the Board may from time to time approve in accordance with the requirements of the Act.
Subject to any resolution of the Board
providing otherwise, the share certificates of the Corporation must be signed by any of the
Directors or officers or by a person acting in their name. The signature may be affixed by an automatic device or electronic process.
In the absence of any evidence to the
contrary, the certificate is proof of the shareholder’s title to the shares represented
by the certificate.
Share certificates need
not be under corporate seal.
8.10
|
Uncertificated Shares
|
In the case of uncertificated shares,
the Corporation must send the shareholder a written notice containing the information required
under the Act.
8.11
|
Replacement of Share Certificates
|
If the shareholder of a certificated share claims
that the certificate has been lost, wrongfully taken or destroyed, the Corporation must issue a new certificate if the shareholder:
|
a)
|
so requests before the Corporation has notice that the lost, wrongfully taken or allegedly destroyed certificate has been delivered to a protected purchaser, as such term is defined in the Act respecting the transfer of securities and the establishment of security entitlements (Quebec);
|
|
b)
|
provides security sufficient in the Corporation’s judgment to protect the Corporation from any loss that the Corporation may suffer by issuing a new certificate; and
|
|
c)
|
satisfies any other reasonable requirements imposed by the Corporation.
|
If two or more Persons are registered as joint holders
of any share, the Corporation shall not be bound to issue more than one certificate in respect thereof, and delivery of such certificate
to one of such Persons shall be sufficient delivery to all of them. Any one of such Persons may give effectual receipts for the
certificate issued in respect thereof or for any dividend, bonus, return of capital or other money payable or warrant issuable
in respect of such share.
8.13
|
Deceased Shareholders
|
In the event of the death of a holder, or
of one of the joint holders, of any share, the Corporation shall not be required to make any entry in the securities register
in respect thereof or to make payment of any dividends thereon except upon production of all such documents as may be required
by the Act and upon compliance with the reasonable requirements of the Corporation or it transfer agent.
Subject to the limits of the Act, the Board may
delegate the powers and duties provided for in this section 8 inter alia, to the corporate secretary of the Corporation
or to a transfer agent or any other agent responsible for keeping, in whole or in part, the securities register.
9 - DIVIDENDS AND RIGHTS
Subject to the provisions of the Act
and the Articles, the Board may from time to time declare dividends payable to· the shareholders according to their respective
rights and interests in the Corporation. Dividends may be paid, in whole or in part, in money
or property or by issuing fully paid shares or options or rights to acquire fully paid shares of the Corporation.
If shares of the Corporation are issued in payment
of a dividend, the Corporation may add all or part of the value of those shares to the appropriate issued and paid-up share capital
account.
The Corporation may not declare and pay a dividend,
except by issuing shares or options or rights to acquire shares, if there are reasonable grounds for believing that the Corporation
is, or would after the payment be, unable to pay its liabilities as they become due.
The Corporation may deduct from the
dividends payable to a shareholder any amount due to the Corporation by the shareholder, on
account of calls for payment or otherwise.
A dividend payable in cash may be paid
by cheque drawn on the Corporation’s banks or by electronic means to the order of each registered holder of shares of the
class or series in respect of which it has been declared. Cheques may be sent by prepaid ordinary mail to such registered holder
at such holder’s address recorded in the Corporation’s securities register, unless in each case such holder otherwise
directs. In the case of joint holders the cheque shall, unless such joint holders otherwise direct, be made payable to the order
of all of such joint holders and, if more than one address is recorded in the Corporation’s
securities register in respect of such joint holding, the cheque shall be mailed to the first address so appearing. The mailing
of such cheque, in such manner, unless the cheque is not paid on due presentation, shall satisfy and discharge the liability for
the dividend to the extent of the sum represented thereby plus the amount of any tax which the Corporation is required to and does
withhold.
9.3
|
Non-receipt or Loss of Cheques
|
In the event of non-receipt or loss of any dividend
cheque by the Person to whom it is sent, the Corporation shall issue to such Person a replacement cheque for a like amount on such
terms as to indemnity, reimbursement of expenses and evidence of non-receipt or loss and of title as the Board may from time to
time prescribe, whether generally or in any particular case.
9.4
|
Record Date for Dividends and Rights
|
The Board may
fix, in advance, in accordance with applicable securities law requirements, a record date for the determination of the shareholders
entitled to receive dividends.
Any dividend unclaimed after a period of two (2)
years from the date on which the dividend has been declared to be payable shall be forfeited and shall revert to the Corporation.
10 - NOTICES
10.1
|
Method of Giving Notices
|
Any notice, communication or document
(“notice”) to be given or sent pursuant to the Act, the Articles, the By-laws or otherwise to a shareholder,
Director, officer or auditor shall be sufficiently given or sent if given or sent by prepaid mail, prepaid transmitted, recorded,
or electronic communication capable of providing a written copy of such notice, or delivered
Personally to such Person’s latest address as shown on the securities register of the Corporation or, in the case of a Director,
if more current, the address as shown in the most recent declaration filed under the Act Respecting the Legal Publicity of Enterprises
(Quebec). A notice shall be deemed to have been received on the date when it is delivered Personally, or on the fifth (5th)
day after mailing, or on the date of dispatch of a transmitted or recorded electronic communication. The secretary may change or
cause to be changed the recorded address of any shareholder, Director, officer or auditor in accordance with any information believed
by the secretary to be reliable.
10.2
|
Notice to Joint Shareholders
|
Subject to the Securities Act (Quebec)
and applicable regulations in securities laws, if two or more Persons are registered as joint
holders of any share, any notice shall be addressed to all of such joint holders but notice to one of such Persons shall be sufficient
notice to all of them.
If any notice given to a shareholder
pursuant to section 10.1 is returned on two consecutive occasions because the shareholder cannot
be found, the Corporation shall not be required to give any further notice to such shareholder until such shareholder informs the
Corporation in writing of the shareholder’s new address.
10.4
|
Omissions and Errors
|
The accidental omission to give or send any notice
to any shareholder, Director, officer or auditor, or the non-receipt of any notice by any such Person or any error in any notice
not affecting the substance thereof, shall not invalidate any action taken at any meeting held pursuant to such notice or otherwise
based thereon.
10.5
|
Persons Entitled by Death or Operation of Law
|
Every Person who, by operation of law,
transfer, death of a shareholder or any other means whatsoever, shall become entitled to any
share, shall be bound by every notice in respect of such share which shall have been duly given or sent to the shareholder from
whom the Person derives title to such share prior to that Person’s name and address being entered on the securities register
(whether such notice was given or sent before or after the happening of the event upon which that Person becomes so entitled) and
prior to that Person furnishing to the Corporation the proof of authority or evidence of entitlement prescribed by the Act.
Any shareholder (or shareholder’s
duly appointed proxyholder), Director, officer or auditor may at any time waive the giving
or sending of any notice, or waive or abridge the time for any notice, required to be given to that Person under any provision
of the Act, the Articles, the By laws or otherwise and such waiver or abridgement shall cure any default in the giving or sending
or in the time of such notice, as the case may be. Any such waiver or abridgement shall be in writing or given by electronic signature
except a waiver of notice of a Shareholders Meeting or of the Board which may be given in any manner.
11 - MISCELLANEOUS
11.1
|
Declarations to the Enterprise Register
|
A Director, officer or any authorized
person signs the declarations which must be sent by the Corporation to the enterprise registrar
under the Act respecting the legal publicity of enterprises (Quebec).
11.2
|
Enactment, Repeal and Amendment of the By-Law
|
The Directors may from time to time
amend the present By-law, repeal the provisions thereof in whole or in part or add thereto by adopting any other administrative
by-law or any other by-law dealing with any other applicable matter. Subject to the applicable
provisions of the Act, any such amendment, repeal or addition is effective as of the date of the resolution of the Board adopting
it. It must be submitted to the shareholders for approval at the next Shareholders Meeting, and the shareholders may, by ordinary
resolution, ratify, amend or reject it. It ceases to be effective at the close of the Shareholders’ Meeting if it is rejected
by or not submitted to the shareholders. However, By-law amendments relating to procedural matters with respect to Shareholders
Meetings take effect only once they have received shareholder approval.
The Board is authorized to make any
clerical change to the By-law to correct typographical errors or to clarify the meaning of
a particular provision without requiring the approval of the shareholders.
*****
SCHEDULE “B”
ACASTI PHARMA inc.
STOCK OPTION PLAN
AS AMENDED AUGUST 27, 2020
acasti pharma inc.
STOCK OPTION PLAN
THIS PLAN adopted October 8, 2008, amended on April 29, 2009,
March 1, 2011, May 22, 2013, October 5, 2015, May 11, 2016, June 8, 2017, July 27, 2018, April 15, 2019, March 31, 2020 and August
27, 2020.
Article
1
DEFINITIONS AND INTERPRETATION
1.1 Definitions. Where used in this Plan, unless there is something in the subject matter or context inconsistent therewith, the
following terms will have the meanings set forth below:
|
(a)
|
"Associate" has the meaning ascribed to it in the Securities Act.
|
|
(b)
|
"Board" means the board of directors of the Corporation, or any duly appointed committee thereof to which the board of directors of the Corporation has delegated the power to administer and grant Options under this Plan, as constituted from time to time.
|
|
(c)
|
"Cause" means, with respect to a particular Employee:
|
|
(i)
|
"cause" as such term is defined in the written employment agreement between the Corporation and the Employee; or
|
|
(ii)
|
in the event there is no written employment agreement between the Corporation and the Employee or "cause" is not defined in the written employment agreement between the Corporation and the Employee, the usual meaning of cause under the laws of the Province of Québec.
|
|
(d)
|
Change of Control” means:
|
|
(i)
|
a consolidation, reorganization, amalgamation, merger, acquisition or other business combination (or a plan of arrangement in connection with any of the foregoing), other than solely involving the Corporation and any one or more of its Associates, with respect to which all or substantially all of the Persons who were the beneficial owners of the Shares and other securities of the Corporation immediately prior to such consolidation, reorganization, amalgamation, merger, acquisition, business combination or plan of arrangement do not, following the completion of such consolidation, reorganization, amalgamation, merger, acquisition, business combination or plan of arrangement, beneficially own, directly or indirectly, more than 50% of the resulting voting rights (on a fully-diluted basis) of the Corporation or its successor;
|
|
(ii)
|
a resolution is adopted to wind-up, dissolve or liquidate the Corporation;
|
|
(iii)
|
the sale, exchange or other disposition to a person other than an Affiliate of the Corporation of all or substantially all of the Corporation’s assets; or
|
|
(iv)
|
a change in the composition of the Board, which occurs at a single meeting of the shareholders of the Corporation 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;
|
|
(e)
|
“Code” has the meaning given in Section 7.1 of this Plan.
|
|
(f)
|
"Company" means, unless specifically indicated otherwise, a corporation, incorporated association or organization, body corporate, partnership, trust, association, or other entity other than an individual.
|
|
(g)
|
"Consultant" means a person, other than an Employee or Director of the Corporation, or a Company, who:
|
|
(i)
|
provides on a bona fide basis consulting, technical, management or other services to the Corporation or a Subsidiary of the Corporation under a written contract;
|
|
(ii)
|
possesses technical, business, management or other expertise of value to the Corporation or a Subsidiary of the Corporation;
|
|
(iii)
|
in the reasonable opinion of the Corporation, spends or will spend a significant amount of time and attention on the business and affairs of the Corporation or a Subsidiary of the Corporation; and
|
|
(iv)
|
has a relationship with the Corporation or a Subsidiary of the Corporation that enables the individual to be knowledgeable about the business and affairs of the Corporation.
|
|
(h)
|
"Corporation" means Acasti Pharma Inc., and includes any successor corporation thereto.
|
|
(i)
|
"Director" means a member of the board of directors of the Corporation or a member of the board of directors of a Subsidiary of the Corporation to whom stock options may be granted in reliance on a prospectus exemption under applicable Securities Laws.
|
|
(j)
|
"Effective Date" means the effective date of this Plan, as amended, being October 8, 2008.
|
|
(k)
|
"Employee" means an individual who:
|
|
(i)
|
is considered an employee of the Corporation or a Subsidiary of the Corporation under the Income Tax Act (Canada) (i.e., for whom income tax, employment insurance and CPP deductions must be made at source);
|
|
(ii)
|
works full-time for the Corporation or a Subsidiary of the Corporation providing services normally provided by an employee and who is subject to the same control and direction by the Corporation or a Subsidiary of the Corporation over the details and methods of work as an employee of the Corporation, but for whom income tax deductions are not made at source; or
|
|
(iii)
|
works for the Corporation or a Subsidiary of the Corporation on a continuing and regular basis for a minimum amount of time per week providing services normally provided by an employee and who is subject to the same control and direction by the Corporation or a Subsidiary of the Corporation over the details and methods of work as an employee of the Corporation, but for whom income tax deductions are not made at source.
|
|
(l)
|
"Exchange" means the TSX Venture Exchange and, where the context permits, any other exchange on which the Shares are or may be listed from time to time.
|
|
(m)
|
"Exercise Notice" means the notice respecting the exercise of an Option, in the form set out in the Option Agreement, duly executed by the Option Holder.
|
|
(n)
|
"Exercise Period" means the period during which a particular Option may be exercised and, subject to earlier termination in accordance with the terms hereof, is the period from and including the Grant Date through to and including the Expiry Date.
|
|
(o)
|
"Exercise Price" means the price per Share at which Shares may be purchased under an Option duly granted under this Plan, as determined in accordance with Section 4.3 of this Plan and, if applicable, adjusted in accordance with Section 3.5 of this Plan.
|
|
(p)
|
"Expiry Date" means the date determined in accordance with Section 4.2 of this Plan and after which a particular Option cannot be exercised and is deemed to be null and void and of no further force or effect.
|
|
(q)
|
"Grant Date" means the date on which the Board grants a particular Option.
|
|
(r)
|
"Insider" means an “insider” as defined by the Exchange from time to time in its rules and regulations.
|
|
(s)
|
“ISOs” has the meaning given in Section 7.1 of this Plan.
|
|
(t)
|
"Market Price" at any date in respect of the Shares shall be the closing price of such Shares on the Exchange (and if listed on more than one stock exchange, then the highest of such closing prices) on the last Business Day prior to the Grant Date (or, if such Shares are not then listed and posted for trading on the Exchange, on such stock exchange in Canada on which the Shares are listed and posted for trading as may be selected for such purpose by the Board). In the event that such Shares did not trade on such Business Day, the Market Price shall be the average of the bid and asked prices in respect of such Shares at the close of trading on such date. In the event that such Shares are not listed and posted for trading on any stock exchange, the Market Price shall be the fair market value of such Shares as determined by the Board in its sole discretion;
|
|
(u)
|
"Option" means an option to acquire Shares granted to a Director, Employee or Consultant of the Corporation, or any Subsidiary of the Corporation pursuant to this Plan.
|
|
(v)
|
"Option Agreement" means an agreement, in the form substantially similar as that set out in Schedule "A" hereto, evidencing an Option granted under this Plan.
|
|
(w)
|
"Option Holder" means a Director, Employee or Consultant or former Director, Employee or Consultant, to whom an Option has been granted and who continues to hold an unexercised and unexpired Option or, where applicable, the Personal Representative of such person.
|
|
(x)
|
"Plan" means this stock option plan, as may be amended from time to time.
|
|
(y)
|
"Person" means a Company or an individual.
|
|
(z)
|
"Personal Representative" means:
|
|
(i)
|
in the case of a deceased Option Holder, the executor or administrator of the deceased duly appointed by a court or public authority having jurisdiction to do so; and
|
|
(ii)
|
in the case of an Option Holder who, for any reason, is unable to manage his or her affairs, the individual entitled by law to act on behalf of such Option Holder.
|
|
(aa)
|
"QBCA" means the Business Corporations Act (Québec), as amended, or such other successor legislation which may be enacted, from time to time.
|
|
(bb)
|
"Regulatory Authorities" means the Exchange and any other organized trading facilities on which the Corporation's Shares are listed and all securities commissions or similar securities regulatory bodies having jurisdiction over the Corporation.
|
|
(cc)
|
"Re-Organization Event" has the meaning given in Section 3.5 of this Plan.
|
|
(dd)
|
"Securities Act" means the Securities Act (Québec), as amended, or such other successor legislation as may be enacted, from time to time.
|
|
(ee)
|
"Securities Laws" means securities legislation, securities regulation and securities rules, as amended, and the policies, notices, instruments and blanket orders in force from time to time that govern or are applicable to the Corporation or to which it is subject, including, without limitation, the Securities Act.
|
|
(ff)
|
"Share" means one (1) common share without par value in the capital stock of the Corporation as constituted on the Effective Date or, in the event of an adjustment contemplated by Section 3.5 of this Plan, such other shares or securities to which an Option Holder may be entitled upon the due exercise of an Option as a result of such adjustment.
|
|
(gg)
|
"Subsidiary" means a subsidiary as defined in the QBCA.
|
|
(hh)
|
"Termination Date" means:
|
|
(i)
|
in the case of the resignation of the Option Holder as an Employee of the Corporation, the date that the Option Holder provides notice of his or her resignation as an Employee of the Corporation to the Corporation;
|
|
(ii)
|
in the case of the termination of the Option Holder as an Employee of the Corporation by the Corporation for any reason other than death, the effective date of termination set out in the Corporation's notice of termination of the Option Holder as an Employee of the Corporation to the Option Holder;
|
|
(iii)
|
in the case of the termination of the written contract of the Option Holder to provide consulting services to the Corporation, the effective date of termination set out in any notice provided by one of the parties to the written contract to the other party; or
|
|
(iv)
|
the effective date of termination of a Director, Employee or Consultant pursuant to an order made by any Regulatory Authority having jurisdiction to so order.
|
|
(ii)
|
“U.S. Taxpayer” has the meaning given in Section 7.1 of this Plan.
|
1.2 Choice of Law. This Plan is established under and the provisions of this Plan will be subject to and interpreted and construed
in accordance with the laws of the Province of Québec.
1.3
Headings. The headings used herein are for convenience only and are not to affect the interpretation of this Plan.
Article
2
PURPOSE AND ADMINISTRATION
2.1 Purpose. The purpose of this Plan is to provide the Corporation with a share-related mechanism to attract, retain and motivate
qualified Directors, Employees and Consultants of the Corporation, and any Subsidiary of the Corporation, to reward such of those
Directors, Employees and Consultants as may be granted Options under this Plan by the Board from time to time for their contributions
toward the long term goals and success of the Corporation and to enable and encourage such Directors, Employees and Consultants
to acquire Shares as long term investments and proprietary interests in the Corporation.
2.2 Administration. This Plan will be administered by the Board. The Board may make, amend and repeal at any time and from time
to time such regulations not inconsistent with this Plan as it may deem necessary or advisable for the proper administration and
operation of this Plan and such regulations will form part of this Plan. The Board may delegate to any director or other senior
officer or employee of the Corporation such administrative duties and powers as it may see fit.
2.3 Board Powers. The Board shall have the power, where consistent with the general purpose and intent of this Plan and subject
to the specific provisions of this Plan to, amongst other things:
|
(a)
|
establish policies and to adopt rules and regulations for carrying out the purposes, provisions and administration of this Plan;
|
|
(b)
|
interpret and construe this Plan and to determine all questions arising out of this Plan or any Option, and any such interpretation, construction or determination made by the Board shall be final, binding and conclusive for all purposes;
|
|
(c)
|
determine the number of Shares reserved for issuance by each Option;
|
|
(d)
|
determine the Exercise Price of each Option;
|
|
(e)
|
determine the time or times when Options will be granted and exercisable;
|
|
(f)
|
determine if the Shares which are issuable on the due exercise of an Option will be subject to any restrictions upon the due exercise of such Option; and
|
|
(g)
|
prescribe the form of the instruments and certificates relating to the grant, exercise and other terms of Options.
|
2.4 Board Discretion. The Board may, in its discretion, require as conditions to the grant or exercise of any Option that the Option
Holder shall have:
|
(a)
|
represented, warranted and agreed in form and substance satisfactory to the Corporation that the Option Holder is acquiring and will acquire such Option and the Shares to be issued upon the exercise thereof for his, her or its own account, for investment and not with a view to or in connection with any distribution, that the Option Holder has had access to such information as is necessary to enable him, her or it to evaluate the merits and risks of such investment and that the Option Holder is able to bear the economic risk of holding such Shares for an indefinite period;
|
|
(b)
|
agreed to restrictions on transfer in form and substance satisfactory to the Corporation and to an endorsement on any option agreement or certificate representing the Shares making appropriate reference to such restrictions; and
|
|
(c)
|
agreed to indemnify the Corporation in connection with the foregoing.
|
2.5 Board Requirements. Any Option granted under this Plan shall be subject to the requirement that, if at any time counsel to
the Corporation shall determine that the listing, registration or qualification of the Shares issuable upon due exercise of such
Option upon any securities exchange or under any Securities Laws of any jurisdiction, or the consent or approval of Regulatory
Authority, is necessary as a condition of, or in connection with, the grant or exercise of such Option or the issuance or purchase
of Shares thereunder, such Option may not be accepted or exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained on conditions acceptable to the Board. Nothing herein shall be deemed
to require the Corporation to apply for or to obtain such listing, registration, qualification, consent or approval.
2.6 Interpretation. The interpretation by the Board of any of the provisions of this Plan and any determination by it pursuant
thereto will be final and conclusive and will not be subject to any dispute by any Option Holder. No member of the Board or any
individual acting pursuant to authority delegated by it hereunder will be liable for any action or determination in connection
with this Plan made or taken in good faith and each member of the Board and each such individual will be entitled to indemnification
with respect to any such action or determination in the manner provided for by the Corporation.
Article
3
GRANT OF OPTIONS
3.1 Board to Issue Shares. The Shares to be issued to Option Holders upon the exercise of Options will be previously authorized
but unissued Shares in the capital stock of the Corporation.
3.2 Participation. The Board will, from time to time and in its sole discretion, determine (i) those Directors, Employees, Consultants
(and, when applicable, to a Company wholly owned by any such Director, Employee or Consultant), if any, to whom Options are to
be granted based upon certain participation criteria, which criteria include but are not limited to functions within the Corporation,
or any Subsidiary of the Corporation, seniority or actual and future contributions to the success of to the Corporation, or any
Subsidiary of the Corporation, and (ii) the number of Options to be granted to such Directors, Employees or Consultants. The Board
may only grant options to an Employee or Consultant if such Employee or Consultant is a bona fide Employee or Consultant
of the Corporation or a Subsidiary of the Corporation, as the case may be. The Board may, in its sole discretion, grant the majority
of the Options to Insiders of the Corporation. However, in no case will the grant of Options under this Plan, together with any
proposed or previously existing security based compensation arrangement, result in (in each case, as determined on the Grant Date):
|
(a)
|
the grant to any one Consultant of the Corporation, or any Subsidiary
of the Corporation, within any twelve (12) month period, of Options reserving for issuance a number of Shares exceeding in
the aggregate two percent (2%) of the Corporation’s issued and outstanding Shares (on a non-diluted basis); or
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(b)
|
the grant, within any twelve (12) month period, to all Directors,
Employees and/or Consultants of the Corporation (or any Subsidiary of the Corporation) conducting investor relations services,
of Options reserving for issuance a number of Shares exceeding in the aggregate two percent (2%) of the Corporation’s
issued and outstanding Shares (on a non-diluted basis), calculated at the date an option is granted to any such Person.
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3.3 Number of Shares Reserved. Subject to adjustment as provided for in Section 3.4 of this Plan and any subsequent amendment to
this Plan, the number of Shares reserved for issuance and which will be available for purchase pursuant to Options granted under
this Plan, together with any proposed or previously existing security based compensation arrangement, will equal to 14,533,881,
representing 15% of the issued and outstanding Shares of the Corporation as of August 26, 2020. Subject to the provisions and restrictions
of this Plan, if any Option is cancelled, expired or otherwise terminated for any reason whatsoever, the number of Shares in respect
of which Option is cancelled, expired or otherwise terminated for any reason whatsoever, as the case may be, will ipso facto
again be immediately available for purchase pursuant to Options granted under this Plan.
3.4 Adjustments. If, prior to the complete exercise of an Option, the Shares are consolidated, subdivided, converted, exchanged
or reclassified or in any way substituted for (collectively, a "Re-Organization Event"), an Option, to the extent
that it has not been exercised, will be adjusted by the Board in accordance with such Re-Organization Event in the manner the Board
deems appropriate and equitable. No fractional Shares will be issued upon the exercise of the Options and accordingly, if as a
result of the Re-Organization Event, an Option Holder would become entitled to a fractional Share, such Option Holder will have
the right to purchase only the next lowest whole number of Shares and no payment or other adjustment will be made with respect
to the fractional interest so disregarded.
3.5 Notification of Grant. Following the approval by the Board of the granting of an Option, the Board will notify the Option Holder
in writing of the award and will enclose with such notice the Option Agreement representing the Option so granted.
3.6 Copy of Plan. Each Option Holder, concurrently with the notice of the award of the Option, will, upon written request, be provided
with a copy of this Plan, and a copy of any amendment to this Plan will be promptly provided by the Board to each Option Holder.
3.7 Limitation. This Plan does not give any Option Holder that is a Director the right to serve or continue to serve as a Director
of the Corporation, does not give any Option Holder that is an Employee the right to be or to continue to be employed by the Corporation
and does not give any Option Holder that is a Consultant the right to be or continue to be retained or engaged by the Corporation
as a consultant for the Corporation.
Article 4
TERMS AND CONDITIONS OF OPTIONS
4.1 Term of Option. Subject to Section 4.2, the Expiry Date of an Option will be the date so fixed by the Board at the time the
particular Option is granted, provided that such date will be no later than the tenth (10th) anniversary of the Grant
Date of such Option.
4.2 Termination of Option. Subject to such other terms or conditions that may be attached to Options granted hereunder, an Option
Holder may exercise an Option in whole or in part at any time or from time to time during the Exercise Period. Any Option or part
thereof not exercised within the Exercise Period will terminate and become null, void and of no effect as of 5:00 p.m. (Montréal
time) on the Expiry Date. The Expiry Date of an Option will be the earlier of the date so fixed by the Board at the time
the Option is granted and the date established, if applicable, in subsections (a) to (c) below:
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(a)
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Death, Disability or Retirement of Option Holder
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In the event that the Option Holder should die,
become disabled or retire from the Corporation while he or she is still an Employee (if he or she holds his or her Option as an
Employee) or in the event that the Option Holder should die or become disable while he or she is still a Director (if he or she
holds his or her Option as a Director) or a Consultant (if he or she holds his or her Option as a Consultant), the Expiry Date
will be the first anniversary of the Option Holder's date of death, disability or retirement, as applicable. In addition, in the
event that the Option Holder should die or become disabled, the vesting schedule of such Option Holder’s Option shall automatically
accelerate such that there shall be a full and immediate vesting and entitlement to exercise the relevant Option concurrently with
the date upon which such event occurs.
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(b)
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Ceasing to Hold Office as Director
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In the event that the Option Holder holds his
or her Option as a Director of the Corporation and such Option Holder ceases to be a Director of the Corporation (including by
reason of death or disability) the Expiry Date of the Option will be the first anniversary following the date the Option Holder
ceases to be a Director of the Corporation unless the Option Holder ceases to be a Director of the Corporation as a result of:
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(i)
|
ceasing to meet the qualifications of a director set forth the QBCA; or
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(ii)
|
an ordinary resolution having been passed by the shareholders of the Corporation pursuant to the QBCA; or
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(iii)
|
an order made by any Regulatory Authority having jurisdiction to so order,
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in which case the Expiry Date will be the date the Option Holder
ceases to be a Director of the Corporation.
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(c)
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Ceasing to be an Employee or Consultant
|
In the event that the Option Holder holds his or her Option as an
Employee or Consultant of the Corporation and such Option Holder ceases to be an Employee or Consultant of the Corporation other
than by reason of death, disability or retirement, as applicable in accordance with Section 4.2(a), the Expiry Date of the Option
will not exceed the ninetieth (90th) day following the Termination Date or, if the Employee or Consultant provides investor relations
services, the thirtieth (30th) day following the Termination Date, unless the Option Holder:
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(i)
|
ceases to be an Employee of the Corporation as a result of termination for Cause; or
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(ii)
|
ceases to be an Employee or Consultant of the Corporation as a result of an order made by any Regulatory Authority having jurisdiction to so order,
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in which case the Expiry Date will be the Termination
Date.
In the event that an Option Holder commits an act of bankruptcy
or any proceeding is commenced against an Option Holder under the Bankruptcy and Insolvency Act (Canada) or other applicable
bankruptcy or insolvency legislation in force at the time of such bankruptcy or insolvency, the Expiry Date of the Option will
be the date immediately preceding the date on which such Option Holder commits such act of bankruptcy.
Notwithstanding anything contained in this Plan, with the exception
of Section 5.5, in no case will an Option be exercisable after the tenth (10th) anniversary of the Grant Date of the
Option.
4.3 Exercise Price. The price at which an Option Holder may purchase a Share upon the exercise of an Option (the "Exercise
Price") will be determined by the Board and set forth in the Option Agreement issued in respect of such Option and, in
any event, will not be less than the Market Price of the Corporation's Shares calculated as of the Grant Date. Notwithstanding
anything else contained in this Plan, in no case will the Market Price be less than the minimum prescribed by each of the organized
trading facilities as would apply to the Grant Date in question.
4.4 Vesting.
Subject to Section 4.2(a), the date or dates on and after which a particular Option, or part thereof, may be exercised will be
determined by the Board and set forth in the Option Agreement issued in respect of such Option; provided that:
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(a)
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all Options granted to a Director will be vested gradually and
evenly over a period of at least twelve (12) months, on a monthly basis; and
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(b)
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all Options granted to an Employee will be vested gradually and evenly over a period of at least thirty-six (36) months, on a quarterly basis.
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4.5 Additional Terms. Subject to all applicable Securities Laws of all applicable Regulatory Authorities, the Board may attach
other terms and conditions to the grant of a particular Option, such terms and conditions to be referred to in the Option Agreement
at the time of grant. These terms and conditions may include, but are not necessarily limited to, the following:
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(c)
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providing that an Option expires on a date other than as provided for herein;
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(d)
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providing that a portion or portions of an Option vest after certain periods of time or upon the occurrence of certain events, or expire after certain periods of time or upon the occurrence of certain events;
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(e)
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providing that an Option be exercisable immediately, in full, notwithstanding that it has vesting provisions, upon the occurrence of certain events, such as a friendly or hostile take-over bid for the Corporation; and
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(f)
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providing that an Option issued to, held by or exercised by an Option Holder who is a citizen or resident of the United Sates of America, and otherwise meeting the statutory requirements, be treated as an "Incentive Stock Option" as that term is defined for purposes of the United States of America Internal Revenue Code of 1986, as amended.
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4.6 Non-Transferability of Options. The Options granted hereunder are not assignable, transferable or negotiable (whether by operation
of law or otherwise) and may not be assigned or transferred, provided however that the Personal Representative of an Option Holder
may, to the extent permitted by Section 5.1 of this Plan, exercise the Option within the Exercise Period. Upon any attempt to assign,
transfer, negotiate, pledge, hypothecate or otherwise dispose of or transfer an Option contrary to this Section 4.6 of this Plan,
or upon the levy of any attachment or similar process upon an Option, the Option and all rights, benefits and privileges arising
thereunder or therefrom, at the sole discretion and election of the Board, shall cease and terminate and be of no further force
or affect whatsoever.
4.7 No Rights as Shareholders. An Option Holder shall not have any rights as a shareholder of the Corporation with respect to any
of the Shares covered by such Option until the date of issuance of a certificate for Shares upon the due exercise of such Option,
in full or in part, and then only with respect to the Shares represented by such certificate or certificates. Without in any way
limiting the generality of the foregoing, no adjustment shall be made for dividends or other rights for which the record date is
prior to the date such share certificate is issued.
Article 5
EXERCISE OF OPTION
5.1 Exercise
of Option. An Option may be exercised only by the Option Holder or the Personal Representative of the Option Holder. Subject
to the provisions of this Plan, an Option Holder or the Personal Representative of an Option Holder may exercise an Option in
whole or in part at any time or from time to time during the Exercise Period up to 5:00 p.m. (Montréal time) on the Expiry
Date by delivering to the Secretary of the Corporation an Exercise Notice indicating the number of Shares to be purchased pursuant
to the exercise of the Option, the applicable Option Agreement and a certified cheque or bank draft payable to "Acasti Pharma
Inc." in an amount equal to the aggregate Exercise Price of the Shares to be purchased pursuant to the exercise of the Option.
5.2 Withholding Taxes. In addition to the other conditions on exercise set forth in this Plan, the exercise of each Option granted
under this Plan is subject to the satisfaction of all applicable withholding taxes or other withholding liabilities as the Corporation
may determine to be necessary or desirable in respect of such exercise. The Corporation will require that an Option Holder pay
to the Corporation, in addition to, and in the same manner as, the Exercise Price, such amount as the Corporation is obliged to
remit to the relevant taxing authority in respect of the exercise of the Option.
5.3 Issue of Share Certificates. As soon as practicable following the receipt of (i) the Exercise Notice and the certified cheque
or bank draft referred to in Section 5.1, and (ii) any amounts payable under Section 5.2, the Board will cause to be delivered
to the Option Holder the Shares so purchased in certificated or uncertificated form. If the number of Shares so purchased is less
than the number of Shares subject to the Option Agreement, the Option Holder will surrender the Option Agreement to the Corporation
and the Board will forward a new Option Agreement to the Option Holder concurrently with delivery of the Shares for the balance
of Shares available under the Option.
5.4 Condition of Issue. The Options and the issue of Shares by the Corporation pursuant to the exercise of Options are subject
to the terms and conditions of this Plan and compliance with the rules and policies of all applicable Regulatory Authorities to
the granting of such Options and to the issuance and distribution of such Shares, and to all applicable Securities Laws. The Option
Holder agrees to comply with all such laws, regulations, rules and policies and agrees to furnish to the Corporation any information,
reports or undertakings required to comply with and to fully cooperate with the Corporation in complying with such laws, regulations,
rules and policies. Notwithstanding any of the provisions contained in this Plan or in any Option, the Corporation's obligation
to issue Shares to an Option Holder pursuant to the exercise of any Option granted under the Plan shall be subject to:
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(a)
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completion of such registration or other qualification of such Shares or obtaining approval of such Regulatory Authority as the Corporation shall determine to be necessary or advisable in connection with the authorization, issuance or sale thereof;
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(b)
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the admission of such Shares to listing on any stock exchange on which the Shares may then be listed;
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(c)
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the receipt from the Option Holder of such representations, warranties, agreements and undertakings, as the Corporation determines to be necessary or advisable in order to safeguard against the violation of the Securities Laws of any jurisdiction; and
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(d)
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the satisfaction of any conditions on exercise prescribed pursuant to this Plan.
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5.5 Blackout Period. If an Option expires during, or within five business days after, a trading black-out period imposed by the
Corporation to restrict trades in the Corporation’s securities, then, notwithstanding any other provision of the Plan, the
Option shall expire ten business days after the trading black-out period is lifted by the Corporation, subject to the maximum period
of time during which an Option is exercisable under Sections 7.3 of this Plan.
Article 6
AMENDMENT AND TERMINATION
6.1 Amendment Without Shareholder Approval. Subject to the prior approval of the Exchange, The Board may amend, suspend or discontinue
the Plan, and amend or discontinue any Options granted under the Plan, at any time without shareholder approval. Without limiting
the foregoing, the Board is specifically authorized to amend the terms of the Plan, and the terms of any Options granted under
the Plan, without obtaining shareholder approval, to:
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(a)
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amend the vesting provisions to the extent permitted under the rules and regulations of the Exchange;
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(b)
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amend the termination provisions, except as otherwise provided in Section 6.3 (b) hereof;
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(c)
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amend the eligibility requirements of eligible Directors, Employees or Consultants which would have the potential of broadening or increasing Insider participation;
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(d)
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add any form of financial assistance;
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(e)
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amend a financial assistance provision which is more favorable to Directors, Employees or Consultants;
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(f)
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add a deferred or restricted share unit or any other provision which results in Directors, Employees or Consultants receiving securities while no cash consideration is received by the Corporation; and
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(g)
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make other amendments of a housekeeping nature or to comply with the requirements of any Regulatory Authority.
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6.2 Amendment with Shareholder Approval. Notwithstanding Section 6.1, no amendments to the Plan to:
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(a)
|
increase the number of Shares reserved for issuance under the Plan (including a change from a fixed maximum number of shares to a fixed maximum percentage of Shares);
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(b)
|
change the manner of determining the Exercise Price; or
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(c)
|
amend the amending provisions of Sections 6.1 to 6.3 of this Plan; or
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(d)
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change the employees (or class of employees) eligible to receive options under this Plan
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shall be made without obtaining approval of the shareholders in
accordance with the requirements of the Exchange.
6.3 Amendment of Insider Options. Notwithstanding Section 6.1, no amendments to granted Options to:
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(a)
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reduce the Exercise Price for the benefit of Insiders; or
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(b)
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extend the termination date for the benefit of Insiders, other than in accordance with Section 5.4 hereof;
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shall be made without obtaining approval of the shareholders, or
approval of the disinterested shareholders for amendments under Section 6.3 (a), in accordance with the requirements of the Exchange;
and no action shall be taken with respect to granted Options without the consent of the Option Holder, unless the Board determines
that such action does not materially alter or impair such Option.
6.4 Options Granted Prior to Termination. No amendment, suspension or discontinuance of the Plan or of any granted Option may contravene
the requirements of the Exchange or any securities commission or regulatory body to which the Plan or the Corporation is now or
may hereafter be subject to. Termination of the Plan shall not affect the ability of the Board to exercise the powers granted to
it hereunder with respect to Options granted under the Plan prior to the date of such termination.
6.5 Retrospective Amendment. The Board may from time to time retrospectively amend this Plan and, with the consent of the affected
Option Holders, retrospectively amend the terms and conditions of any Options that have been previously granted.
6.6 Change of Control. Notwithstanding anything contained to the contrary in this Plan or in any resolution of the Board in implementation
thereof:
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(a)
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in the event of a proposed Change of Control of the Corporation, the Corporation shall have the right, upon written notice thereof to each Option Holder holding Options under the Plan, to permit the exercise of all such Options within the twenty (20) day period next following the date of such notice and to determine that upon the expiration of such twenty (20) day period, all rights of the Option Holders to such Options or to exercise same (to the extent not theretofore exercised) shall ipso facto terminate and cease to have further force or effect whatsoever;
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(b)
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in the event of a Change of Control of the Corporation where a notice by the Corporation was not sent to Option Holders in accordance with Section 6.6(a),
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(i)
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all of the Option Holder’s Options will immediately vest on the date of such event. In such event, all Options so vested will be exercisable from such date until their respective expiry dates, subject to the terms of any employment agreement or other contractual arrangement between the Option Holder and the Corporation. For greater certainty, upon a Change of Control, Option Holders shall not be treated any more favourably than holders of Shares with respect to the consideration that the Option Holders would be entitled to receive for their Shares; and
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(ii)
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if the Option Holder elects to exercise its Options following a Change of Control, such Option Holder shall be entitled to receive, and shall accept, in lieu of the number of Shares which such Option Holder was entitled upon such exercise, the kind and amount of shares and other securities, property or cash which such Option Holder could have been entitled to receive as a result of such Change of Control, on the effective date thereof, had such Option Holder been the registered holder of the number of Shares to which such Option Holder was entitled to purchase upon exercise of such Options.
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6.7 Extension of Expiration Date, Non-Applicability of Termination of Employment Provisions. Subject to the rules of any relevant
Regulatory Authority and Securities Laws, the Board may, by resolution:
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(a)
|
extend the Expiration Date of any Option, but shall not, in the event of any such advancement or extension, be under any obligation to advance or extend the date on or by which Options may be exercised by any other Option Holder; and
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(b)
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decide that any of the provisions hereof concerning the effect of termination of the Option Holder's employment shall not apply to any Option Holder for any reason acceptable to the Board.
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Notwithstanding the provisions of Sections
6.6 and 6.7, should changes be required to the Plan by any Regulatory Authority of any jurisdiction to which this Plan or the Corporation
now is or hereafter becomes subject, such changes shall be made to the Plan as are necessary to conform with such requirements
and, if such changes are approved by the Board, the Plan, as amended, shall be filed with the records of the Corporation and shall
remain in full force and effect in its amended form as of and from the date of its adoption by the Board.
6.8 Regulatory Authority Approval. This Plan and any amendments hereto are subject to all necessary approvals of the applicable
Regulatory Authorities.
6.9 Agreement. The Corporation and every Option granted hereunder will be bound by and subject to the terms and conditions of this
Plan. By accepting an Option granted hereunder, the Option Holder has expressly agreed with the Corporation to be bound by the
terms and conditions of this Plan.
6.10 Effective Date of Plan. Upon approval by the shareholders of the Corporation in accordance with the QBCA, and by acceptance
by the Exchange (if the Shares are listed or posted on an Exchange and such acceptance is required), the amendments to this Plan
made on May 11, 2016 shall be deemed to be effective as of the Effective Date. Any Options granted prior to such approval and acceptance(s),
that exceed the previous number of Options available for grant, shall be conditional upon such approval and acceptance(s) being
given and no such Options may be exercised unless such approval and acceptance is given.
6.11 Governing Law. This Plan and all matters to which reference is made herein shall be governed by and interpreted in accordance
with the laws of the Province of Québec and the federal laws of Canada applicable therein.
Article 7
U.S. TAXPAYERS
7.1 Provisions for U.S. Taxpayers. Options granted under this Plan to U.S. Taxpayers may be nonqualified stock options or incentive
stock options intended to qualify under Section 422 (“ISOs”) of the United States Internal Revenue Code of 1986
and the applicable authority thereunder (the “Code”). Each Option shall be designated in the Option Agreement
as either an ISO or a non-qualified stock option. “U.S. Taxpayer” means a Person who is a U.S. citizen, U.S.
permanent resident or U.S. tax resident for the purposes of the Code whose purchase of Shares under this Plan would be subject
to U.S. taxation under the Code. Such Person shall be considered a U.S. Taxpayer solely with respect to such options. Options may
be granted as ISOs only to individuals who are employees of the Corporation or any present or future “subsidiary corporation”
or “parent corporation” as those terms are defined in Section 424(e) and (f) of the Code, and shall not be granted
to non-employee Directors or independent contractors. If an Option Holder ceases to be employed by the Corporation and/or all “subsidiary
corporations” or “parent corporations” as those terms are defined in Section 424(e) and (f) of the Code, other
than by reason of death or disability (meaning “permanent and total disability” as defined in Section 22(e)(3) of the
Code), Options shall be eligible for treatment as ISOs only if exercised no later than three months following such termination
of employment.
7.2 ISOs.
The maximum number of Options that may be granted as ISOs is equal to the maximum number of Shares issuable under Section
3.3. The terms and conditions of any ISOs granted hereunder, including the eligible recipients of ISOs, shall be subject to the
provisions of Section 422 of the Code, and the terms, conditions, limitations and administrative procedures established by the
Board from time to time in accordance with this Plan. At the discretion of the Board, ISOs may be granted to any Employee of the
Corporation, its “parent corporation” or any “subsidiary corporation”of the Corporation, as such terms
are defined in Sections 424(e) and (f) of the Code.
7.3
ISO Grants to 10% Shareholders. Notwithstanding anything to the contrary in this Plan, if an ISO is granted to a Person who
owns shares representing more than ten percent of the voting power of all classes of shares of the Corporation or of a “subsidiary
corporation” or “parent corporation”, as such terms are defined in Section 424(e) and (f) of the Code, the term
of the Option shall not exceed five years from the time of grant of such Option and the Exercise Price shall be at least 110 percent
(110%) of the Market Price (at the time of grant) of the Shares subject to the Option.
7.4
$100,000 Per Year Limitation for ISOs. To the extent the aggregate Market Price (determined at the time of grant) of the Shares
for which ISOs are exercisable for the first time by any Person during any calendar year (under all plans of the Corporation)
exceeds $100,000, such excess ISOs shall be treated as nonqualified stock options.
7.5 Disqualifying
Dispositions. Each Person awarded an ISO under this Plan shall notify the Corporation in writing immediately after
the date he or she makes a disqualifying disposition of any Shares acquired pursuant to the exercise of such ISO. A disqualifying
disposition is any disposition (including any sale) of Shares before the later of (i) two years after the time of grant of the
ISO or (ii) one year after the date the Person acquired the Shares by exercising the ISO. The Corporation may, if determined by
the Board and in accordance with procedures established by it, retain possession of any Shares acquired pursuant to the exercise
of an ISO as agent for the applicable Person until the end of the period described in the preceding sentence, subject to complying
with any instructions from such Person as to the sale of such Share.
7.6 Section
409A. Any Options granted to U.S. Taxpayers shall be limited to Employees or Consultants providing services to the Corporation
or to an affiliate which is an “eligible issuer”, as defined in final Treas. Reg. 1.409A-1(b)(iii) (this includes
corporate subsidiaries in which the Corporation has a controlling interest).
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(a)
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No extension of term of an Option shall extend beyond the latest date that the right could have expired by its original terms.
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(b)
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Any replacement options issued under Section 3.5 or 6.6 of this Plan shall comply with U.S. Treas. Reg. 1.424-1 as if the Option were a incentive stock option (ISO) so that the ratio of the Exercise Price to the fair market value of Shares subject to the Options immediately after the replacement may not be greater than the ratio of the Exercise Price to the fair market value of Shares subject to the Options immediately before the replacement.
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7.7 Transferability.
Notwithstanding any other provision in this Plan, an ISO is not transferable except by will or by the laws of descent and
distribution, and may be exercised, during the Option Holder’s lifetime, only by such Option Holder.
Adopted by the Board on October 8, 2008, as amended on
April 29, 2009, March 1, 2011, May 22, 2013, October 5, 2015, May 11, 2016, June 8, 2017, July 27, 2018, April 15, 2019,
March 31, 2020 and August 27, 2020 and last approved by the shareholders on September 30, 2020.
SCHEDULE “C”
ACASTI PHARMA inc.
equity incentive PLAN
lAST aMENDED August 27,
2020
Acasti Pharma Inc.
Equity Incentive Plan
ARTICLE 1
Purpose
The purpose of this Plan is to provide the Corporation with a share-related
mechanism to attract, retain and motivate qualified Directors, Employees and Consultants of the Corporation and its Subsidiaries,
to reward such of those Directors, Employees and Consultants as may be granted Awards under this Plan by the Board from time to
time for their contributions toward the long term goals and success of the Corporation and to enable and encourage such Directors,
Employees and Consultants to acquire Shares as long term investments and proprietary interests in the Corporation.
ARTICLE 2
Interpretation
When used herein, unless the context otherwise requires, the following
terms have the indicated meanings, respectively:
“Affiliate” has the meaning set forth
in the Securities Act;
“Associate” has the meaning ascribed
to it in the Securities Act;
“Award” means any Bonus Share, Restricted
Share Unit, Performance Share Unit, Deferred Share Unit, Restricted Share or Other Share-Based Award granted under this Plan;
“Award Agreement” means a signed, written
agreement between a Participant and the Corporation, substantially in the form attached as Schedule A, subject to any amendments
or additions thereto as may, in the discretion of the Board, be necessary or advisable, evidencing the terms and conditions on
which an Award has been granted under this Plan;
“Award Value” means such percentage
of annual base salary or such other amount as may be determined from time to time by the Board as the original value of the Award
to be paid to a Participant and specified in the Participant’s Award Agreement;
“Board” means the board of directors
of the Corporation;
“Business Day” means a day, other than
a Saturday or Sunday, on which the principal commercial banks in the City of Montréal are open for commercial business during
normal banking hours;
“Bonus Share” means Shares issued to
a Participant under the terms of this Plan;
“Cause” means, with respect to a particular
Employee:
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(a)
|
“cause” as such term is defined in the written employment agreement between the Corporation and the Employee; or
|
|
(b)
|
in the event there is no written employment agreement between the Corporation and the Employee or “cause” is not defined in the written employment agreement between the Corporation and the Employee, the usual meaning of “cause” under the laws of the Province of Québec.
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“Change in Control” means the occurrence
of any one or more of the following events:
|
(a)
|
a consolidation, merger, amalgamation, arrangement or other reorganization or acquisition involving the Corporation or any of its Affiliates and another corporation or other entity, as a result of which the holders of Shares prior to the completion of the transaction hold less than 50% of the outstanding shares of the successor corporation after completion of the transaction;
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(b)
|
the sale, lease, exchange or other disposition, in a single transaction or a series of related transactions, of assets, rights or properties of the Corporation and/or any of its Subsidiaries which have an aggregate book value greater than 30% of the book value of the assets, rights and properties of the Corporation and its Subsidiaries on a consolidated basis to any other person or entity, other than a disposition to a wholly-owned subsidiary of the Corporation in the course of a reorganization of the assets of the Corporation and its subsidiaries;
|
|
(c)
|
a resolution is adopted to wind-up, dissolve or liquidate the Corporation;
|
|
(d)
|
any person, entity or group of persons or entities acting jointly or in concert (an “Acquiror”) acquires or acquires control (including, without limitation, the right to vote or direct the voting) of Voting Securities of the Corporation which, when added to the Voting Securities owned of record or beneficially by the Acquiror or which the Acquiror has the right to vote or in respect of which the Acquiror has the right to direct the voting, would entitle the Acquiror and/or Associates and/or Affiliates of the Acquiror to cast or to direct the casting of 20% or more of the votes attached to all of the Corporation’s outstanding Voting Securities which may be cast to elect directors of the Corporation or the successor corporation (regardless of whether a meeting has been called to elect directors);
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(e)
|
as a result of or in connection with: (A) a contested election of directors, or; (B) a consolidation, merger, amalgamation, arrangement or other reorganization or acquisitions involving the Corporation or any of its affiliates and another corporation or other entity, the nominees named in the most recent Management Information Circular of the Corporation for election to the Board shall not constitute a majority of the Board; or
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(f)
|
the Board adopts a resolution to the effect that a Change of Control as defined herein has occurred or is imminent.
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For the purposes of the foregoing, “Voting Securities”
means Shares and any other shares entitled to vote for the election of directors and shall include any security, whether or not
issued by the Corporation, which are not shares entitled to vote for the election of directors but are convertible into or exchangeable
for shares which are entitled to vote for the election of directors including any options or rights to purchase such shares or
securities.
Notwithstanding the foregoing definition, for Awards that
are non-qualified deferred compensation held by a U.S. Taxpayer, any Change in Control must also meet the requirements for a “change
in control” or “change in ownership” under Section 409A;
“Code” means the U.S. Internal Revenue
Code of 1986, as amended from time to time, and the regulations promulgated under it;
“Committee” has the meaning set forth
in Section 3.2 ;
“Corporation” means Acasti Pharma Inc.;
“Consultant” means an individual or
Consultant Company, other than an Employee or a Director of the Corporation, that:
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(a)
|
is engaged to provide on a ongoing bona fide basis, consulting, technical, management or other services to the Corporation or an Affiliate of the Corporation, other than services provided in relation to a Distribution;
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|
(b)
|
provides the services under a written contract between the Corporation or an Affiliate of the Corporation and the individual or the Consultant Company;
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|
(c)
|
in the reasonable opinion of the Corporation, spends or will spend a significant amount of time and attention on the affairs and business of the Corporation or an Affiliate of the Corporation; and
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|
(d)
|
has a relationship with the Corporation or an Affiliate of the Corporation that enables the individual to be knowledgeable about the business and affairs of the Corporation;
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“Consultant Company” means for an individual
consultant, a company or partnership of which the individual is an employee, shareholder or partner;
“Date of Grant” means, for any Award,
the date specified by the Board at the time it grants the Award (which, for greater certainty, shall be no earlier than the date
on which the Board meets for the purpose of granting such Award) or if no such date is specified, the date upon which the Award
was granted;
“Deferred Share Unit” or “DSU”
means a unit equivalent in value to a Share, credited by means of a bookkeeping entry in the books of the Corporation in accordance
with ARTICLE 7;
“Director” means a director of the
Corporation who is not an employee of the Corporation or a Subsidiary;
“Disabled” or “Disability”
means the permanent and total incapacity of a Participant as determined in accordance with procedures established by the Board
for purposes of this Plan;
“Distribution” has the meaning set
forth in the Securities Act;
“Effective Date” means the effective
date of this Plan, being June 27, 2013;
“Employee” means an individual who:
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(a)
|
is considered an employee of the Corporation or a Subsidiary of the Corporation under the Income Tax Act (Canada) (i.e., for whom income tax, employment insurance and CPP deductions must be made at source);
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|
(b)
|
works full-time for the Corporation or a Subsidiary of the Corporation providing services normally provided by an employee and who is subject to the same control and direction by the Corporation or a Subsidiary of the Corporation over the details and methods of work as an employee of the Corporation, but for whom income tax deductions are not made at source; or
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|
(c)
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works for the Corporation or a Subsidiary of the Corporation on a continuing and regular basis for a minimum amount of time per week providing services normally provided by an employee and who is subject to the same control and direction by the Corporation or a Subsidiary of the Corporation over the details and methods of work as an employee of the Corporation, but for whom income tax deductions are not made at source.
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“Exchange” means such stock exchange
or other organized market on which the Shares are or may be listed or posted for trading from time to time, including as applicable
the TSX-V or the TSX;
“Exchange Act” means the United States
Securities Exchange Act of 1934, as amended from time to time;
“Insider” means an “insider”
as defined by the Exchange from time to time in its rules and regulations;
“Market Price” at any date in respect
of the Shares shall be the closing price of such Shares on the Exchange (and if listed on more than one stock exchange, then the
highest of such closing prices) on the last Business Day prior to the relevant date. In the event that such Shares did not trade
on such Business Day, the Market Price shall be the average of the bid and asked prices in respect of such Shares at the close
of trading on such date. In the event that such Shares are not listed and posted for trading on any stock exchange, the Market
Price shall be the fair market value of such Shares as determined by the Board in its sole discretion;
“NI 45-106” means National Instrument
45-106 Prospectus and Registration Exemptions of the Canadian Securities Administrators, as amended from time to time;
“Other Share-Based Award” means any
right granted under Section 8.1;
“Participant” means an Employee, Consultant
or Director to whom an Award has been granted under this Plan;
“Participant’s Employer” means
the Corporation or such Subsidiary as is or, if the Participant has ceased to be employed by the Corporation or such Subsidiary,
was the Participant’s Employer;
“Performance Goals” means performance
goals expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or
decrease in the particular criteria, and may be applied to one or more of the Corporation, a Subsidiary, or a division or strategic
business unit of the Corporation, or may be applied to the performance of the Corporation relative to a market index, a group of
other companies or a combination thereof, all as determined by the Board;
“Performance Share Unit” or “PSU”
means any right granted under Section 5.1 of the Plan;
“Permitted Assign” has the meaning
assigned to that term in NI 45-106;
“Person” includes an individual, sole
proprietorship, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate,
and a natural person in his or her capacity as trustee, executor, administrator or other legal representative;
“Plan” means this Acasti Pharma Inc.
Equity Incentive Plan, as may be amended from time to time;
“QBCA” means the Business Corporations
Act (Québec), as amended, or such other successor legislation which may be enacted, from time to time;
“Regulatory Authorities” means the
Exchange and any other organized trading facilities on which the Corporation's Shares are listed and all securities commissions
or similar securities regulatory bodies having jurisdiction over the Corporation;
“Restricted Period” means the period
during which Restricted Shares are subject to restrictions as set out in the Award Agreement;
“Restricted Shares” means Shares granted
to a Participant under Section 6.1 hereof that are subject to certain restrictions and to a risk of forfeiture;
“Restricted Share Unit” or “RSU”
means a right to receive a Share or a Restricted Share granted, as determined by the Board, under Section 4.1;
“Securities Act” means the Securities
Act (Québec), as amended, or such other successor legislation as may be enacted, from time to time;
“Securities Laws” means securities
legislation, securities regulation and securities rules, as amended, and the policies, notices, instruments and blanket orders
in force from time to time that govern or are applicable to the Corporation or to which it is subject, including, without limitation,
the Securities Act;
“Share” means one (1) common share
without par value in the capital stock of the Corporation as constituted on the Effective Date or, in the event of an adjustment
contemplated by ARTICLE 12, such other shares or securities to which the holder of an Award may be entitled as a result of such
adjustment;
“Stock Option Plan” means the Corporation’s
stock option plan in effect from time to time;
“Termination Date” means, in the
case of a Participant whose employment or term of office or engagement with the Corporation or an Affiliate terminates:
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(i)
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in the case of the resignation of the Participant as an Employee of the Corporation, the date that the Participant provides notice of his or her resignation as an Employee of the Corporation to the Corporation;
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|
(ii)
|
in the case of the termination of the Participant as an Employee of the Corporation by the Corporation for any reason other than death, the effective date of termination set out in the Corporation's notice of termination of the Participant as an Employee of the Corporation to the Participant;
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(iii)
|
in the case of the termination of the written contract of the Consultant Participant to provide consulting services to the Corporation, the effective date of termination set out in any notice provided by one of the parties to the written contract to the other party; or
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|
(iv)
|
the effective date of termination of a Director, Employee or Consultant pursuant to an order made by any Regulatory Authority having jurisdiction to so order;
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provided that in the case of termination by reason of
voluntary resignation by the Participant, such date shall not be earlier than the date that notice of resignation was received
from such Participant, and “Termination Date” in any such case specifically does not mean the date on which
any period of contractual notice, reasonable notice, salary continuation or deemed employment that the Corporation or the Affiliate,
as the case may be, may be required at law to provide to a Participant would expire;
“TSX-V” means the TSX Venture Exchange;
“TSX” means the Toronto Stock Exchange;
and
“U.S. Taxpayer” shall mean a Participant
who is a U.S. citizen, U.S. permanent resident or individual providing services to the Corporation or its Subsidiaries in the U.S.
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(a)
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Whenever the Board or, where applicable, the Committee is to exercise discretion in the administration of this Plan, the term “discretion” means the sole and absolute discretion of the Board or the Committee, as the case may be.
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(b)
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As used herein, the terms “Article”, “Section”, “Subsection” and “clause” mean and refer to the specified Article, Section, Subsection and clause of this Plan, respectively.
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|
(c)
|
Words importing the singular include the plural and vice versa and words importing any gender include any other gender.
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(d)
|
Whenever any payment is to be made or action is to be taken on a day which is not a Business Day, such payment shall be made or such action shall be taken on the next following Business Day.
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|
(e)
|
In this Plan, a Person is considered to be a “Subsidiary” of another Person if:
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|
(B)
|
that other and one or more Persons, each of which is controlled by that other, or
|
|
(C)
|
two or more Persons, each of which is controlled by that other; or
|
|
(ii)
|
it is a Subsidiary of a Person that is that other’s Subsidiary.
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|
(f)
|
In this Plan, a Person is considered to be “controlled” by a Person if:
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|
(i)
|
in the case of a Person,
|
|
(A)
|
voting securities of the first-mentioned Person carrying more than 50% of the votes for the election of directors are held, directly or indirectly, otherwise than by way of security only, by or for the benefit of the other Person; and
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(B)
|
the votes carried by the securities are entitled, if exercised, to elect a majority of the directors of the first-mentioned Person;
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(ii)
|
in the case of a partnership that does not have directors, other than a limited partnership, the second-mentioned Person holds more than 50% of the interests in the partnership; or
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|
(iii)
|
in the case of a limited partnership, the general partner is the second-mentioned Person.
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|
(g)
|
Unless otherwise specified, all references to money amounts are to Canadian currency.
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|
(h)
|
This Plan is established under and the provisions of this Plan will be subject to and interpreted and construed in accordance with the laws of the Province of Québec.
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|
(i)
|
The headings used herein are for convenience only and are not to affect the interpretation of this Plan.
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ARTICLE 3
Administration
Subject to Section 3.2, this Plan will be administered by the Board
and the Board has sole and complete authority, in its discretion, to:
|
(a)
|
determine the individuals to whom grants under the Plan may be made;
|
|
(b)
|
make grants of Awards under the Plan relating to the issuance of Shares (including any combination of Bonus Shares, Restricted Share Units, Performance Share Units, Deferred Share Units, Restricted Shares or Other Share-Based Awards) in such amounts, to such Persons and, subject to the provisions of this Plan, on such terms and conditions as it determines including without limitation:
|
|
(i)
|
the time or times at which Awards may be granted;
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|
(ii)
|
the conditions under which:
|
|
(A)
|
Awards may be granted to Participants; or
|
|
(B)
|
Awards may be forfeited to the Corporation,
|
including any conditions relating to the attainment of
specified Performance Goals;
|
(iii)
|
the price, if any, to be paid by a Participant in connection with the granting of Awards;
|
|
(iv)
|
whether restrictions or limitations are to be imposed on the Shares issuable pursuant to grants of Awards, and the nature of such restrictions or limitations, if any; and
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|
(v)
|
any acceleration of exercisability or vesting or Restricted Period, or waiver of termination regarding any Award, based on such factors as the Board may determine;
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|
(c)
|
interpret this Plan and adopt, amend and rescind administrative guidelines and other rules and regulations relating to this Plan; and
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|
(d)
|
make all other determinations and take all other actions necessary or advisable for the implementation and administration of this Plan.
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The Board’s determinations and actions within its authority
under this Plan are conclusive and binding on the Corporation and all other persons. The day-to-day administration of the Plan
may be delegated to such officers and employees of the Corporation or of a Subsidiary as the Board determines.
3.2
|
Delegation to Committee
|
To the extent permitted by applicable law and the Corporation’s
articles, the Board may, from time to time, delegate to a committee (the “Committee”) of the Board, all or any
of the powers conferred on the Board under the Plan. In connection with such delegation, the Committee will exercise the powers
delegated to it by the Board in the manner and on the terms authorized by the Board. Any decision made or action taken by the Committee
arising out of or in connection with the administration or interpretation of this Plan in this context is final and conclusive.
Notwithstanding any such delegation or any reference to the Committee in this Plan, the Board may also take any action and exercise
any powers that the Committee is authorized to take or has power to exercise under this Plan.
All Employees, Consultants and Directors are eligible to participate
in the Plan, subject to subsections 10.11(c) and 10.2(g). Eligibility to participate does not confer upon any Employee, Consultant
or Director any right to receive any grant of an Award pursuant to the Plan. The extent to which any Employee, Consultant or Director
is entitled to receive a grant of an Award pursuant to the Plan will be determined in the sole and absolute discretion of the Board.
Any Award granted under this Plan shall be subject to the requirement
that, if at any time the Corporation shall determine that the listing, registration or qualification of the Shares issuable pursuant
to such Award upon any securities exchange or under any Securities Laws of any jurisdiction, or the consent or approval of Regulatory
Authority, is necessary as a condition of, or in connection with, the grant or exercise of such Award or the issuance or purchase
of Shares thereunder, such Award may not be accepted or exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained on conditions acceptable to the Board. Nothing herein shall be deemed
to require the Corporation to apply for or to obtain such listing, registration, qualification, consent or approval.
The Board may only grant Awards to an Employee or Consultant if
such Employee or Consultant is a bona fide Employee or Consultant of the Corporation or a Subsidiary of the Corporation, as the
case may be. The Board may, in its sole discretion, grant the majority of the Awards to Insiders of the Corporation. The number
of Shares that may be purchased under any Award or the amount of any Award that shall be granted in any form that may result in
the issuance of Shares will be determined and fixed by the Board at the date of grant, provided that no more than 2% of the issued
and outstanding Shares may be granted to any one Consultant in any 12 month period.
3.6
|
Number of Shares Reserved
|
Subject to adjustment as provided for in ARTICLE 12 and any subsequent
amendment to this Plan, the number of Shares reserved for issuance and which will be available for issuance pursuant to Awards
granted under this Plan will be equal to a number that:
|
(a)
|
if, and for so long as the Common Shares are listed on the TSXV, shall not exceed the lower of (i) 2,422,313 Common Shares, and (ii) 15% of the issued and outstanding Common Shares as of August 26, 2020, representing 14,533,881 Common Shares, which number shall include Common Shares issuable pursuant to options issued under the Stock Option Plan.
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|
(b)
|
if, and for so long as the Shares are listed on the TSX, shall not exceed 2.5% of the issued and outstanding Shares of the Corporation from time to time.
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The aggregate maximum number of Shares available under the Plan
may be used for any type of Award. Subject to the provisions and restrictions of this Plan, if any Award is cancelled, expired
or otherwise terminated for any reason whatsoever, the number of Shares in respect of which Award is cancelled, expired or otherwise
terminated for any reason whatsoever, as the case may be, will ipso facto again be immediately available for purchase pursuant
to Awards granted under this Plan. For greater certainty, the number of Shares in respect of which any Award is exercised will
no longer be available for purchase pursuant to future Awards granted under this Plan.
All grants of Awards under this Plan will be evidenced by Award
Agreements. Award Agreements will be subject to the applicable provisions of this Plan and will contain such provisions as are
required by this Plan and any other provisions that the Board may direct. Any one officer of the Corporation is authorized and
empowered to execute and deliver, for and on behalf of the Corporation, an Award Agreement to each Participant granted an Award
pursuant to this Plan.
3.7
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Non-transferability of Awards
|
No assignment or transfer of Awards, whether voluntary, involuntary,
by operation of law or otherwise, vests any interest or right in such Awards whatsoever in any assignee or transferee (except that,
if, and for so long as the Shares are listed on the TSX, a Participant may transfer Awards to Permitted Assigns in a manner consistent
with applicable tax and securities laws) and immediately upon any assignment or transfer, or any attempt to make the same, such
Awards will terminate and be of no further force or effect. If any Participant has transferred Awards to a corporation pursuant
to this Section 3.7, such Awards will terminate and be of no further force or effect if at any time the transferor should cease
to own all of the issued shares of such corporation.
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(a)
|
RSUs, PSUs and DSUs shall be credited with dividend equivalents in the form of additional RSUs, PSUs and DSUs as of each dividend payment date in respect of which normal cash dividends are paid on Shares. Such dividend equivalents shall be computed by dividing: (a) the amount obtained by multiplying the amount of the dividend declared and paid per Share by the number of RSUs, PSUs and DSUs held by the Participant on the record date for the payment of such dividend, by (b) the Market Price at the close of the first business day immediately following the dividend record date, with fractions computed to three decimal places. Dividend equivalents credited to a Participant’s accounts shall vest in proportion to the RSUs, PSUs and DSUs to which they relate.
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|
(b)
|
The Board may in its discretion include in an Award Agreement applicable to an Other Share-Based Award a dividend equivalent right entitling the Participant to receive amounts equal to the normal cash dividends that would be paid, during the time such Award is outstanding and unexercised, on the Shares covered by such Award if such Shares were then outstanding and may decide whether such payments shall be made in cash, in Shares or in another form, whether they shall be conditioned upon the vesting of the Award to which they relate, the time or times at which they shall be made, and such other terms and conditions as the Board shall deem appropriate.
|
|
(c)
|
The foregoing does not obligate the Corporation to make dividends on Shares and nothing in this Plan shall be interpreted as creating such an obligation.
|
If, and for so long as the Shares are listed on the TSX, grants
of Awards may be made to Permitted Assigns of Employees, Directors and Consultants and may be transferred by Employees, Directors
and Consultants to a Permitted Assign of an Employee, Director or Consultant as applicable, except for U.S. Taxpayers, if transfer
to a Permitted Assign would be prohibited by Section 409A of the Code. In any such case, the provisions of ARTICLE 10 shall apply
to the Award as if the Award was held by the Employee, Director or Consultant rather than such person’s Permitted Assign.
In the event of the death of the Permitted Assign, the Award shall
be automatically transferred to the Employee, Director or Consultant who effected the transfer of the Award to the deceased Permitted
Assign.
ARTICLE 4
GRANT OF RESTRICTED SHARE UNITS
If, and for so long as (i) the Corporation is a Tier 1 issuer on
the TSXV, (ii) the Shares are listed on the Toronto Stock Exchange, or (iii) the prior approval of the of the stock exchange on
which the Shares are listed for trading is obtained, the Board may, from time to time, subject to the provisions of this Plan and
such other terms and conditions as the Board may prescribe, grant RSUs to any Participant. The number of RSUs to be credited to
each Participant’s account shall be computed by dividing (a) the Award Value, by (b) the Market Price of a Share on the day
immediately preceding the Grant Date, with fractions rounded down to the nearest whole number.
The Board shall have the authority to condition the grant of RSUs
upon the attainment of specified Performance Goals, or such other factors (which may vary as between awards of RSUs) as the Board
may determine in its sole discretion.
The Board shall have the authority to determine at the time of grant,
in its sole discretion, the duration of the vesting period and other vesting terms applicable to the grant of RSUs, provided that
no RSU granted shall vest and be payable after December 31 of the third calendar year following the year of service for which
the RSU was granted.
Unless otherwise specified in the Award Agreement, as soon as practicable
following the expiry of the applicable vesting period, or at such later date as may be determined by the Board in its sole discretion
at the time of grant, a share certificate representing the Shares issuable pursuant to the RSUs shall be registered in the name
of the Participant or as the Participant may direct, subject to applicable securities laws.
ARTICLE 5
PERFORMANCE SHARE UNITS
If, and for so long as (i) the Corporation is a Tier 1 issuer on
the TSXV, (ii) the Shares are listed on the Toronto Stock Exchange, or (iii) the prior approval of the of the stock exchange on
which the Shares are listed for trading is obtained, the Board may, from time to time, subject to the provisions of this Plan and
such other terms and conditions as the Board may prescribe, grant PSUs to any Participant. Each PSU will consist of a right to
receive a Share upon the achievement of such Performance Goals during such performance periods as the Board will establish. The
number of PSUs to be credited to each Participant’s account shall be computed by dividing (a) the Award Value, by (b) the
Market Price of a Share on the day immediately preceding the Grant Date, with fractions rounded down to the nearest whole number.
Subject to the terms of the Plan, the Performance Goals to be achieved
during any performance period, the length of any performance period, the amount of any PSU granted, the termination of a Participant’s
employment and the amount of any payment or transfer to be made pursuant to any PSU will be determined by the Board and by the
other terms and conditions of any PSU, all as set forth in the applicable Award Agreement.
The Board will issue Performance Goals prior to the commencement
of the performance period to which such Performance Goals pertain. The Performance Goals may be based upon the achievement of corporation-wide,
divisional or individual goals, or any other basis determined by the Board. The Board may modify the Performance Goals as necessary
to align them with the Corporation’s corporate objectives if there is a subsequent material change in the Corporation’s
business, operations or capital or corporate structure. The Performance Goals may include a threshold level of performance below
which no payment will be made (or no vesting will occur), levels of performance at which specified payments will be made (or specified
vesting will occur), and a maximum level of performance above which no additional payment will be made (or at which full vesting
will occur).
Unless otherwise specified in the Award Agreement, as soon as practicable
following the expiry of the applicable vesting period, or at such later date as may be determined by the Board in its sole discretion
at the time of grant, a share certificate representing the Shares issuable pursuant to the PSUs shall be registered in the name
of the Participant or as the Participant may direct, subject to applicable securities laws.
ARTICLE 6
Restricted Shares
6.1
|
Grant of Restricted Shares
|
If, and for so long as (i) the Corporation is a Tier 1 issuer on
the TSXV, (ii) the Shares are listed on the Toronto Stock Exchange, or (iii) the prior approval of the of the stock exchange on
which the Shares are listed for trading is obtained, the Board may, from time to time, subject to the provisions of this Plan and
such other terms and conditions as the Board may prescribe, grant Restricted Shares to any Participant. The terms and conditions
of each Restricted Shares grant shall be evidenced by an Award Agreement, which agreements need not be identical. The number of
Restricted Shares to be credited to each Participant’s account shall be computed by dividing (a) the Award Value, by (b)
the Market Price of a Share on the day immediately preceding the Grant Date, with fractions rounded down to the nearest whole number.
Subject to the restrictions set forth in Section 10.2, except as
otherwise set forth in the applicable Award Agreement, the Participant shall generally have the rights and privileges of a shareholder
as to such Restricted Shares, including the right to vote such Restricted Shares. Unless otherwise set forth in a Participant’s
Award Agreement, cash dividends and stock dividends, if any, with respect to the Restricted Shares shall be withheld by the Corporation
for the Participant’s account, and shall be subject to forfeiture until released, in each case, to be released at the same
time and in the same proportion as the lapse of restrictions on the Restricted Shares to which such dividends relate. Except as
otherwise determined by the Board, no interest will accrue or be paid on the amount of any dividends withheld.
6.2
|
Restrictions on Transfer
|
In addition to any other restrictions set forth in a Participant’s
Award Agreement, until such time that the Restricted Period for the Restricted Shares has lapsed pursuant to the terms of the Award
Agreement, which Restricted Period the Board may in its sole discretion accelerate at any time, the Participant shall not be permitted
to sell, transfer, pledge, or otherwise encumber the Restricted Shares. Notwithstanding anything contained herein to the contrary,
the Board shall have the authority to remove any or all of the restrictions on the Restricted Shares whenever it may determine
that, by reason of changes in applicable laws or other changes in circumstances arising after the date of the Restricted Shares
Award, such action is appropriate.
6.3
|
Separation of Service
|
Except as may otherwise be provided by applicable laws and regulations
or in the applicable Award Agreement, in the event of a Participant’s “separation from service” (within the meaning
of Section 409A of the Code) with the Corporation or any of the Subsidiaries for any reason prior to the time that the Restricted
Period for the Participant’s Restricted Shares has lapsed, as soon as practicable following such Separation from Service,
the Corporation shall repurchase from the Participant, and the Participant shall sell, all of such Participant’s Restricted
Shares for which the Restricted Period has not lapsed at a purchase price equal to the cash amount, if any, paid by the Participant
for the Restricted Shares, or if no cash amount was paid by the Participant for the Restricted Shares, such Restricted Shares shall
be forfeited by the Participant to the Corporation for no consideration as of the date of such separation from service.
ARTICLE 7
GRANT OF deferred share units
7.1
|
Number of Deferred Share Units
|
If, and for so long as (i) the Corporation is a Tier 1 issuer on
the TSXV, (ii) the Shares are listed on the Toronto Stock Exchange, or (iii) the prior approval of the of the stock exchange on
which the Shares are listed for trading is obtained, the Board may, from time to time, subject to the provisions of this Plan and
such other terms and conditions as the Board may prescribe, grant Deferred Share Units to any Participant; provided, however, to
the extent required by applicable law (including, but not limited to, Section 409A of the Code), if any Participant is allowed
an election to receive DSUs in lieu of other compensation, such election must be made in writing prior to the start of the calendar
year during which services will be performed for which the compensation relates, or such later date as permitted in accordance
with applicable law, including, but not limited to, Section 409A of the Code and the regulations thereunder. The number of DSUs
to be credited to each Participant’s account shall be computed by dividing (a) the Award Value, by (b) the Market Price of
a Share on the day immediately preceding the Grant Date, with fractions rounded down to the nearest whole number.
All Deferred Share Units received by a Participant shall be credited
to an account maintained for the Participant on the books of the Corporation, as of the Date of Grant. The award of Deferred Share
Units for a calendar year to a Participant shall be evidenced by an Award Agreement.
DSUs shall be settled on the date established in the Award Agreement
(the “Settlement Date”); provided, however that in no event shall a DSU Award be settled prior to the date of
the applicable Participant’s Separation from Service. If the Award Agreement does not establish a date for the settlement
of the DSUs, then the Settlement Date shall be the date of Separation from Service, subject to the delay that may be required under
Section 13.9 below. On the Settlement Date for any DSU:
|
(a)
|
the Participant shall deliver a cheque payable to the Corporation (or payment by such other method as may be acceptable to the Corporation) representing payment of any amounts required by the Corporation to be withheld in connection with such settlement as contemplated by Section 13.3; and
|
|
(b)
|
the Corporation shall issue to the Participant one fully paid and non-assessable Share in respect of each Vested DSU being paid on such date.
|
ARTICLE 8
other share-based awards
8.1
|
Other Share-Based Awards
|
The Board may, from time to time, subject to the prior approval
of the TSX-V, if applicable, the provisions of this Plan and such other terms and conditions as the Board may prescribe, grant
Other Share-Based Awards to any Participant. Each Other Share-Based Award will consist of a right (1) which is other than an Award
or right described in Article 4, 5, 6 or 7 above and (2) which is denominated or payable in, valued in whole or in part by reference
to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares) as are deemed
by the Board to be consistent with the purposes of the Plan; provided, however, that such right will comply with applicable law.
Subject to the terms of the Plan and any applicable Award Agreement, the Board will determine the terms and conditions of Other
Share-Based Awards. Shares or other securities delivered pursuant to a purchase right granted under this Section 8.1 will be purchased
for such consideration, which may be paid by such method or methods and in such form or forms, including, without limitation, cash,
Shares, other securities, other Awards, other property, or any combination thereof, as the Board will determine.
ARTICLE 9
BONUS SHARES
The Board may, from time to time, subject to the provisions of
this Plan and such other terms and conditions as the Board may prescribe, grant fully paid and non-assessable Bonus Shares to
any Participant. The allocation of the Bonus Shares among the Participants shall be determined by the Board of Directors at the
time that the Bonus Shares are qualified for issuance and shall be evidenced by an Award Agreement.
ARTICLE 10
termination of employment or Services
If a Participant dies or becomes Disabled while an Employee, Director
or Consultant:
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(a)
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a portion of the next instalment of any Awards due to vest (or for which the Restricted Period is due to lapse) shall immediately vest (or cease to be restricted) such portion to equal to the number of Awards next due to vest (or cease to be restricted) multiplied by a fraction the numerator of which is the number of days elapsed since the date of vesting (or lapse of Restricted Period) of the last instalment of the Awards (or if none have vested or have ceased to be restricted, the Date of Grant) to the date of Disability or death and the denominator of which is the number of days between the date of vesting (or lapse of Restricted Period) of the last instalment of the Awards (or if none have vested or have ceased to be restricted, the Date of Grant) and the date of vesting (or lapse of Restricted Period) of the next instalment of the Awards;
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(b)
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unless otherwise determined by the Board and set forth in an Award Agreement and subject to subsection (c), any Awards held by the Participant that are not yet vested (or for which the Restricted Period has not lapsed) at the date of Disability or death are immediately forfeited to the Corporation on the date of Disability or death; and
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(c)
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such Participant’s or Director’s eligibility to receive further grants of Awards under the Plan ceases as of the date of Disability or death.
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10.2
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Termination of Employment or Services
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(a)
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Where a Participant’s employment or term of office or engagement with the Corporation or an Affiliate terminates by reason of the Participant’s death or Disability, then the provisions of Section 10.1 will apply.
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(b)
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Unless otherwise determined by the Board and set forth in an Award Agreement, where a Participant’s employment or term of office or engagement terminates by reason of a Participant’s resignation or, in the case of a Consultant, by reason of the termination by the Consultant of the Consultant’s engagement in accordance with the terms of such engagement, then any Awards held by the Participant that are not yet vested (or for which the Restricted Period has not lapsed) at the Termination Date are immediately forfeited to the Corporation on the Termination Date.
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(c)
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Unless otherwise determined by the Board and set forth in an Award Agreement, where a Participant’s employment or term of office or engagement terminates by reason of termination by the Corporation or an Affiliate without cause in the case of an Employee, without breach of a Director’s fiduciary duties or without breach of contract by a Consultant, as applicable (in each case as determined by the Board in its sole discretion) (whether such termination occurs with or without any or adequate notice or reasonable notice, or with or without any or adequate compensation in lieu of such notice), then any Awards held by the Participant that are not yet vested (or for which the Restricted Period has not lapsed) at the Termination Date are immediately forfeited to the Corporation on the Termination Date.
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(d)
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Where an Employee Participant’s or Consultant Participant’s employment or engagement is terminated by the Corporation or an Affiliate for cause (as determined by the Board in its sole discretion), or, in the case of a Consultant, for breach of contract (as determined by the Board in its sole discretion), then any Awards held by the Participant at the Termination Date (whether or not then vested or subject to a Restricted Period) are immediately forfeited to the Corporation on the Termination Date.
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(e)
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Where a Director’s term of office is terminated by the Corporation for breach by the Director of his or her fiduciary duty to the Corporation (as determined by the Board in its sole discretion), then any Awards held by the Director at the Termination Date (whether or not vested or subject to a Restricted Period) are immediately forfeited to the Corporation on the Termination Date.
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(f)
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Where a Director’s term of office terminates for any reason other than death or Disability of the Director or a breach by the Director of his or her fiduciary duty to the Corporation (as determined by the Board in its sole discretion), the Board may, in its sole discretion, at any time prior to or following the Termination Date, provide for the vesting (or lapse of restrictions) of any or all Awards held by a Director on the Termination Date.
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(g)
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The eligibility of a Participant to receive further grants under the Plan ceases as of the date that the Corporation or an Affiliate, as the case may be, provides the Participant with written notification that the Participant’s employment or term of service is terminated, notwithstanding that such date may be prior to the Termination Date.
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(h)
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Unless the Board, in its sole discretion, otherwise determines, at any time and from time to time, Awards are not affected by a change of employment arrangement within or among the Corporation or a Subsidiary for so long as the Participant continues to be an employee of the Corporation or a Subsidiary, including without limitation a change in the employment arrangement of a Participant whereby such Participant becomes a Director.
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10.3
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Discretion to Permit Acceleration
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Notwithstanding the provisions of Sections 10.1 and 10.2, the Board
may, in its discretion, at any time prior to or following the events contemplated in such Sections, permit the acceleration of
vesting (or Restricted Period) of any or all Awards, all in the manner and on the terms as may be authorized by the Board.
ARTICLE 11
change IN control
The Board shall have the right to determine that any unvested or
unearned Bonus Shares, Restricted Share Units, Deferred Share Units, Performance Share Units or Other Share-Based Awards or Restricted
Shares subject to a Restricted Period outstanding immediately prior to the occurrence of a Change in Control shall become fully
vested or earned or free of restriction upon the occurrence of such Change in Control. The Board may also determine that any vested
or earned Bonus Shares, Restricted Share Units, Deferred Share Units, Performance Share Units or Other Share-Based Awards shall
be cashed out at the Market Price as of the date such Change in Control is deemed to have occurred, or as of such other date as
the Board may determine prior to the Change in Control. Further, the Board shall have the right to provide for the conversion or
exchange of any Bonus Shares, Restricted Share Unit, Deferred Share Unit, Performance Share Unit or Other Share-Based Award into
or for rights or other securities in any entity participating in or resulting from the Change in Control.
ARTICLE 12
Share Capital Adjustments
The existence of any Awards does not affect in any way the right
or power of the Corporation or its shareholders to make, authorize or determine any adjustment, recapitalization, reorganization
or any other change in the Corporation’s capital structure or its business, or any amalgamation, combination, arrangement,
merger or consolidation involving the Corporation, to create or issue any bonds, debentures, Shares or other securities of the
Corporation or to determine the rights and conditions attaching thereto, to effect the dissolution or liquidation of the Corporation
or any sale or transfer of all or any part of its assets or business, or to effect any other corporate act or proceeding, whether
of a similar character or otherwise, whether or not any such action referred to in this Section would have an adverse effect on
this Plan or on any Award granted hereunder.
12.2
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Reorganization of Corporation’s Capital
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Should the Corporation effect a subdivision or consolidation of
Shares or any similar capital reorganization or a payment of a stock dividend (other than a stock dividend that is in lieu of a
cash dividend), or should any other change be made in the capitalization of the Corporation that does not constitute a Change in
Control and that would warrant the amendment or replacement of any existing Awards in order to adjust the number of Shares that
may be acquired on the vesting of outstanding Awards and/or the terms of any Award in order to preserve proportionately the rights
and obligations of the Participants holding such Awards, the Board will, subject to the prior approval of the Exchange, authorize
such steps to be taken as it may consider to be equitable and appropriate to that end.
12.3
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Other Events Affecting the Corporation
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In the event of an amalgamation, combination, arrangement, merger
or other transaction or reorganization involving the Corporation and occurring by exchange of Shares, by sale or lease of assets
or otherwise, that does not constitute a Change in Control and that warrants the amendment or replacement of any existing Awards
in order to adjust: (a) the number of Shares that may be acquired on the vesting of outstanding Awards and/or (b) the terms of
any Award in order to preserve proportionately the rights and obligations of the Participants holding such Awards, the Board will,
subject to the prior approval of the Exchange, authorize such steps to be taken as it may consider to be equitable and appropriate
to that end.
12.4
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Immediate Acceleration of Awards
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Where the Board determines that the steps provided in Sections 12.2
and 12.3 would not preserve proportionately the rights, value and obligations of the Participants holding such Awards in the circumstances
or otherwise determines that it is appropriate the Board may permit the immediate vesting of any unvested Awards and immediate
lapse of any Restricted Period.
12.5
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Issue by Corporation of Additional Shares
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Except as expressly provided in this ARTICLE 12, neither the issue
by the Corporation of shares of any class or securities convertible into or exchangeable for shares of any class, nor the conversion
or exchange of such shares or securities, affects, and no adjustment by reason thereof is to be made with respect to the number
of Shares that may be acquired as a result of a grant of Awards.
No fractional Shares will be issued pursuant to an Award. Accordingly,
if, as a result of any adjustment under Section 12.2, 12.3 or dividend equivalent, a Participant would become entitled to a fractional
Share, the Participant has the right to acquire only the adjusted number of full Shares and no payment or other adjustment will
be made with respect to the fractional Shares, which shall be disregarded.
ARTICLE 13
Miscellaneous Provisions
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(a)
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The Corporation is not obligated to grant any Awards, issue any Shares or other securities, make any payments or take any other action if, in the opinion of the Board, in its sole discretion, such action would constitute a violation by a Participant, Director or the Corporation of any provision of any applicable statutory or regulatory enactment of any government or government agency or the requirements of any stock exchange upon which the Shares may then be listed.
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(b)
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Without limiting the generality of the foregoing, all Awards and the issue of any Shares or other securities by the Corporation pursuant to any Awards are subject to the terms and conditions of this Plan and compliance with the rules and policies of all applicable Regulatory Authorities (including for greater certainty all applicable rules and policies of the Exchange) to the granting of such Awards and to the issuance and distribution of such Shares or other securities by the Corporation, and to all applicable Securities Laws.
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13.2
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Participants’ Entitlement
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Except as otherwise provided in this Plan, Awards previously granted
under this Plan are not affected by any change in the relationship between, or ownership of, the Corporation and an Affiliate.
For greater certainty, all grants of Awards remain are not affected by reason only that, at any time, an Affiliate ceases to be
an Affiliate.
The granting or vesting or lapse of the Restricted Period of each
Award under this Plan is subject to the condition that if at any time the Board determines, in its discretion, that the satisfaction
of withholding tax or other withholding liabilities is necessary or desirable in respect of such grant, vesting or lapse of the
Restricted Period, such action is not effective unless such withholding has been effected to the satisfaction of the Board. In
such circumstances, the Board may require that a Participant pay to the Corporation such amount as the Corporation or an Affiliate
is obliged to remit to the relevant taxing authority in respect of the granting or vesting or lapse of the Restricted Period of
the Award. Any such additional payment is due no later than the date on which any amount with respect to the Award is required
to be remitted to the relevant tax authority by the Corporation or an Affiliate, as the case may be.
13.4
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Rights of Participant
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No Participant has any claim or right to be granted an Award and
the granting of any Award is not to be construed as giving a Participant a right to remain as an employee, consultant or director
of the Corporation or an Affiliate. No Participant has any rights as a shareholder of the Corporation in respect of Shares issuable
pursuant to any Award until the allotment and issuance to such Participant, or as such Participant may direct, of certificates
representing such Shares.
13.5
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Other Incentive Awards
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The Board shall have the right to grant other incentive awards based
upon Shares under this Plan to Participants in accordance with applicable laws and regulations and subject to regulatory approval,
including without limitation the approval of the Exchange (to the extent the Corporation has any securities listed on the particular
exchange), having such terms and conditions as the Board may determine, including without limitation the grant of Shares based
upon certain conditions and the grant of securities convertible into Shares.
If an Award expires during, or within five business days after,
a trading black-out period imposed by the Corporation to restrict trades in the Corporation’s securities, then, notwithstanding
any other provision of this Plan, the Award shall expire ten business days after the trading black-out period is lifted by the
Corporation.
The Board may, without notice or shareholder approval, terminate
the Plan on or after the date upon which no Awards remain outstanding.
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(a)
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Subject to the rules and policies of any stock Exchange on which the Shares are listed and applicable law, the Board may, without notice or shareholder approval, at any time or from time to time, amend the Plan for the purposes of:
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(i)
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making any amendments to the general vesting provisions or Restricted Period of each Award;
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(ii)
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making any amendments to the provisions set out in ARTICLE 10;
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(iii)
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making any amendments to add covenants of the Corporation for the protection of Participants, as the case may be, provided that the Board shall be of the good faith opinion that such additions will not be prejudicial to the rights or interests of the Participants, as the case may be;
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(iv)
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making any amendments not inconsistent with the Plan as may be necessary or desirable with respect to matters or questions which, in the good faith opinion of the Board, having in mind the best interests of the Participants and Directors, it may be expedient to make, including amendments that are desirable as a result of changes in law in any jurisdiction where a Participant resides, provided that the Board shall be of the opinion that such amendments and modifications will not be prejudicial to the interests of the Participants and Directors; or
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(v)
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making such changes or corrections which, on the advice of counsel to the Corporation, are required for the purpose of curing or correcting any ambiguity or defect or inconsistent provision or clerical omission or mistake or manifest error, provided that the Board shall be of the opinion that such changes or corrections will not be prejudicial to the rights and interests of the Participants.
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(b)
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Subject to Section 11.1, the Board shall not materially adversely alter or impair any rights or increase any obligations with respect to an Award previously granted under the Plan without the consent of the Participant, as the case may be.
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(c)
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Notwithstanding any other provision of this Plan, none of the following amendments shall be made to this Plan without approval of the Exchange (to the extent the Corporation has any securities listed on the particular Exchange) and the approval of shareholders in accordance with the requirements of such Exchange(s):
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(i)
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amendments to the Plan which would increase the number of Shares issuable under the Plan, except as otherwise provided pursuant to the provisions in the Plan, including Sections 12.2 and 12.3, which permit the Board to make adjustments in the event of transactions affecting the Corporation or its capital;
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(ii)
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amendments to the Plan which would increase the number of Shares issuable to Insiders, except as otherwise provided pursuant to the provisions in the Plan, including Sections 12.2 and 12.3, which permit the Board to make adjustments in the event of transactions affecting the Corporation or its capital; and
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(iii)
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amendments to this Section 13.8.
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Any amendment that would cause an Award held by a U.S. Taxpayer
to fail to comply with Section 409A of the Code shall be null and void ab initio.
13.9
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Section 409A of the Code
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This Plan will be construed and interpreted to be exempt from, or
where not so exempt, to comply with Section 409A of the Code to the extent required to preserve the intended tax consequences of
this Plan. The Corporation reserves the right to amend this Plan to the extent it reasonably determines is necessary in order to
preserve the intended tax consequences of this Plan in light of Section 409A of the Code and any regulations or guidance under
that section. In no event will the Corporation be responsible if Awards under this Plan result in adverse tax consequences to a
U.S. Taxpayer under Section 409A of the Code. Notwithstanding any provisions of the Plan to the contrary, in the case of any “specified
employee” within the meaning of Section 409A of the Code who is a U.S. Taxpayer, distributions of non-qualified deferred
compensation under Section 409A of the Code made in connection with a “separation from service” within the meaning
set forth in Section 409A of the Code may not be made prior to the date which is 6 months after the date of separation from service
(or, if earlier, the date of death of the U.S. Taxpayer). Any amounts subject to a delay in payment pursuant to the preceding sentence
shall be paid as soon practicable following such 6-month anniversary of such separation from service.
13.10
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Requirement of Notification of Election Under Section 83(b) of the Code
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If a Participant, in connection with the acquisition of Restricted
Shares under the Plan, is permitted under the terms of the Award Agreement to make the election permitted under Section 83(b) of
the Code (i.e., an election to include in gross income in the year of transfer the amounts specified in Section 83(b) of the Code
notwithstanding the continuing transfer restrictions) and the Participant makes such an election, the Participant shall notify
the Corporation of such election within ten (10) days of filing notice of the election with the Internal Revenue Service, in addition
to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code.
Every member of the Board will at all times be indemnified and saved
harmless by the Corporation from and against all costs, charges and expenses whatsoever including any income tax liability arising
from any such indemnification, that such member may sustain or incur by reason of any action, suit or proceeding, taken or threatened
against the member, otherwise than by the Corporation, for or in respect of any act done or omitted by the member in respect of
this Plan, such costs, charges and expenses to include any amount paid to settle such action, suit or proceeding or in satisfaction
of any judgment rendered therein.
13.12
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Participation in the Plan
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The participation of any Participant in the Plan is entirely voluntary
and not obligatory and shall not be interpreted as conferring upon such Participant any rights or privileges other than those rights
and privileges expressly provided in the Plan. In particular, participation in the Plan does not constitute a condition of employment
or engagement nor a commitment on the part of the Corporation to ensure the continued employment or engagement of such Participant.
The Plan does not provide any guarantee against any loss which may result from fluctuations in the market value of the Shares.
The Corporation does not assume responsibility for the income or other tax consequences for the Participants and Directors and
they are advised to consult with their own tax advisors.
13.13
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International Participants
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With respect to Participants who reside or work outside Canada and
the United States, the Board may, in its sole discretion, amend, or otherwise modify, without shareholder approval, the terms of
the Plan or Awards with respect to such Participants in order to conform such terms with the provisions of local law, and the Board
may, where appropriate, establish one or more sub-plans to reflect such amended or otherwise modified provisions.
This Plan becomes effective on June 27, 2013, being the date on
which the Plan was approved by the shareholders of the Corporation.
This Plan and all matters to which reference is made herein shall
be governed by and interpreted in accordance with the laws of the Province of Québec and the federal laws of Canada applicable
therein.
Last approved by Shareholders on September 30, 2020
SCHEDULE A
Award Agreement
Acasti Pharma Inc. (“Us” or “Our”)
hereby grants the following Award(s) to you subject to the terms and conditions of this Award Agreement (the “Agreement”),
together with the provisions of Our Equity Incentive Plan (the “Plan”) in which you become a “Participant”,
dated June 27, 2013, as amended from time to time, all the terms of which are hereby incorporated into this Agreement:
Name and Address of Participant: ____________________________________________
Date of Grant: ___________________________________________________________
Type of Award: __________________________________________________________
Total Number Granted: ____________________________________________________
Vesting Date(s): __________________________________________________________
1.
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The terms and conditions of the Plan are hereby incorporated by reference as terms and conditions of this Award Notice and all capitalized terms used herein, unless expressly defined in a different manner, have the meanings ascribed thereto in the Plan.
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2.
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Each notice relating to the Award must be in writing and signed by the Participant or the Participant’s legal representative. All notices to US must be delivered personally or by prepaid registered mail and must be addressed to Our Corporate Secretary. All notices to the Participant will be addressed to the principal address of the Participant on file with US. Either the Participant or US may designate a different address by written notice to the other. Any notice given by either the Participant or US is not binding on the recipient thereof until received.
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3.
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Nothing in the Plan, in this Agreement, or as a result of the grant of an Award to you, will affect Our right, or that of any Affiliate of Ours, to terminate your employment or term of office or engagement at any time for any reason whatsoever. Upon such termination, your rights to exercise Award will be subject to restrictions and time limits, complete details of which are set out in the Plan.
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[4.
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Add a fixed payment date or permitted event for payment, for U.S. taxpayers.]
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ACASTI PHARMA INC.
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By:
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Authorized Signatory
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I have read the foregoing Agreement and hereby accept the
Award in accordance with and subject to the terms and conditions of the Agreement and the Plan. I understand that I may
review the complete text of the Plan online under our profile at www.sedar.com or www.sec.gov, or by contacting either my
Human Resources representative or the Office of the Corporate Secretary. I agree to be bound by the terms and conditions
of the Plan governing the Award.