Exhibit 10.5


 


LUCY SCIENTIFIC DISCOVERY INC. 2021 EQUITY INCENTIVE
PLAN


 


STOCK OPTION GRANT NOTICE AND


AWARD AGREEMENT


 


Lucy Scientific Discovery
Inc. (the “Company”), pursuant to its 2021 Equity Incentive Plan (the “Plan”),
hereby grants to the individual listed below (“Participant”) an option to purchase the number of Shares set forth
below (the “Option”). The Option described in this Stock Option Grant Notice (the “Grant Notice”)
is subject to the terms and conditions set forth in the Award Agreement attached hereto as Exhibit A (the “Agreement”)
and the Plan, each of which is incorporated herein by reference. Unless otherwise defined herein, capitalized terms used in this Grant
Notice and the Agreement will have the meanings defined in the Plan.


 


	Participant:	[_________] 
	 	 
	Grant Date:	[_________]
	 	 
	Exercise Price Per Share:	[_________]
	 	 
	Total Number of Shares Subject to Option:	[_________]
	 	 
	Expiration Date:	[_________]
	 	 
	Type of Option:	
    ☐
    Incentive Stock Option (to the extent permitted by 422(d) of the Code) 

     

    ☐
    Non-Qualified Stock Option

	 	 
	Vesting Schedule:	[_________]


 


By signing
below, Participant agrees to be bound by the terms and conditions of the Plan, the Agreement and this Grant Notice. This document may
be executed, including by electronic means, in multiple counterparts, each of which will be deemed an original, and all of which together
will be deemed a single instrument.


 


	LUCY SCIENTIFIC DISCOVERY INC.	 	participant
	 	 	 
		 	 
	Name:	 	Name: [_________]
	Title:	 	 



 




     


     


    

 


EXHIBIT A


TO STOCK OPTION
GRANT NOTICE


 


AWARD AGREEMENT


 


1. Award
of Option. Effective as of the Grant Date set forth in the Grant Notice, the Company has granted to Participant the Option to purchase
part or all of the aggregate number of Shares set forth in the Grant Notice, subject to the terms and conditions set forth in the Grant
Notice, the Plan and this Agreement.


 


2. Term
of Option. The Option may not be exercised later than the Expiration Date set forth in the Grant Notice, subject to earlier termination
in accordance with the Plan and this Agreement.


 


3. Option
Exercise Price. The exercise price per Share of the Option (the “Exercise Price”) is set forth in the Grant Notice.


 


4. Vesting
and Exercise of Option. Subject to the continued service of Participant with the Company through the relevant vesting dates, the Option
shall become vested and exercisable in such amounts and at such times as set forth in the Grant Notice. In addition:


 


a. Effect
of Termination of Service due to Death on the Option. Upon Participant’s death during his or her continuous service with the
Company, any portion of the Option that is outstanding and unvested immediately prior to Participant’s death will remain outstanding
for twelve (12) months, during which time the Committee may, in its sole discretion, vest all or a portion of such Option. If the Committee
decides to vest all or any portion of such Option under this Section 4.a, it may condition such vesting on the execution by Participant’s
estate and/or beneficiaries of a general release of claims against the Company and its affiliates in such form as the Company may prescribe
(each, a “Release”). Upon the expiration of the twelve (12) month period following Participant’s death, any portion
of the unvested Option that the Committee has not determined to vest in accordance with this Section 4.a will be forfeited.


 


b. Effect
of Termination of Service on the Option. Unless otherwise provided in the Grant Notice, this Agreement or in Participant’s employment
agreement, the termination or survival of the Option will be determined in accordance with Section 7 of the Plan.


 


c. Service
with Affiliates. Solely for purposes of this Agreement, service with the Company will be deemed to include service with an Affiliate
of the Company (for only so long as such entity remains an Affiliate of the Company).


 


d. Method
of Exercise. Participant may exercise the Option only to the extent it is vested. To exercise the Option, Participant must deliver
a payment of the Exercise Price, any required tax withholding and written notice of exercise to the Company in accordance with Section
5(d) of the Plan. Such notice must also be accompanied by any further documents or instruments the Company deems necessary or desirable
to carry out the purposes or intent of this Agreement.


 


e. Partial
Exercise. The Option may be exercised in whole or in part, provided, however, that any exercise may apply only with a whole
number of Shares.


 


f. Restrictions
on Exercise. The Option may not be exercised, and any purported exercise will be void, if the issuance of Shares upon such exercise
would constitute a violation of any law, regulation or exchange listing requirement. The Committee may from time to time modify the terms
of the Option or impose additional conditions on the exercise of the Option as it deems necessary or appropriate to facilitate compliance
with any law, regulation or exchange listing requirement.


 






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g. Rights
as Stockholder. The Option will not confer upon Participant any of the rights or privileges of a stockholder in the Company unless
and until Participant is issued Shares following Participant’s exercise of the Option.


 


5.
Non-Transferability of Option. The Option may not be sold, pledged, assigned, hypothecated, gifted, transferred or disposed of
in any manner, either voluntarily or involuntarily, other than by will or by the laws of descent and distribution.


 


6. Adjustments.
The Exercise Price, as well as the number and kind of shares subject to the Option, are subject to adjustment in accordance with Section
3(e) of the Plan.


 


7. No
Continuation of Service. Neither the Plan nor this Agreement will confer upon Participant any right to continue in the employment
or service of the Company or any of its Affiliates, or limit in any respect the right of the Company or its Affiliates to discharge Participant
at any time, for any reason.


 


8. Withholding.
Participant acknowledges that the exercise of the Option will give rise to taxable income subject to required withholding. In accordance
with Section 15 of the Plan, the obligations of the Company hereunder are conditioned on Participant timely paying, or otherwise making
arrangements satisfactory to the Company regarding the timely satisfaction of, such required withholding.


 


9. The
Plan. Participant has received a copy of the Plan, has read the Plan and is familiar with its terms, and hereby accepts the Option
subject to the terms and provisions of the Plan. Pursuant to the Plan, the Committee is authorized to interpret the Plan and to adopt
rules and regulations not inconsistent with the Plan as it deems appropriate. Participant hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Committee with respect to questions arising under the Plan, the Grant Notice or this
Agreement.


 


10. Company
Policies. Participant agrees, in consideration for the grant of the Restricted Stock, to be subject to any policies of the Company
and its Affiliates regarding clawbacks, securities trading, and hedging or pledging of securities that may be in effect from time to time,
or as may otherwise be required by applicable law, regulation or exchange listing standard.


 


11. Entire
Agreement. The Grant Notice and this Agreement, together with the Plan, represent the entire agreement between the parties with respect
to the subject matter hereof and supersede any prior agreement, written or otherwise, relating to the subject matter hereof.


 


12. Amendment.
This Agreement may only be amended by a writing signed by each of the parties hereto; provided that the Company may amend this Agreement
without Participant’s consent, if the amendment does not materially impair Participant’s rights hereunder or as otherwise
permitted in Section 4.f, above.


 






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13. Governing
Law. This Agreement will be construed in accordance with the laws and judicial decisions of the Province of British Columbia, Canada,
without regard to the application of the principles of conflicts of laws.


 


14. Headings.
The headings in this Agreement are for convenience only. They form no part of the Agreement and will not affect its interpretation.


 


15. Incentive
Stock Options.


 


a. If
the Option is designated as an Incentive Stock Option, Participant acknowledges that nonetheless a portion of the Option may not qualify
(or may cease to qualify) as an “incentive stock option” under the Code due to limitations set forth in Section 422(d) of
the Code or otherwise. To the extent the Option does not qualify for treatment as an “incentive stock option” under the Code,
it will be treated as a non-qualified stock option. The Company does not guarantee any particular tax treatment for the Option or the
Shares subject to the Option.


 


b. If
the Option is designated as an Incentive Stock Option, Participant shall give prompt written notice to the Company of any disposition
or other transfer of any Shares acquired under the Option, if such disposition or transfer is made (i) within two years from the Grant
Date, or (ii) within one year after the transfer of such Shares to Participant. Such notice shall specify the date of such disposition
or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by Participant
in such disposition or other transfer.


 


16. Electronic
Delivery of Documents. Participant authorizes the Company to deliver electronically any prospectuses or other documentation related
to the Option and any other compensation or benefit plan or arrangement in effect from time to time (including, without limitation, reports,
proxy statements or other documents that are required to be delivered to participants in such arrangements pursuant to federal or state
laws, rules or regulations). For this purpose, electronic delivery will include, without limitation, delivery by means of e-mail or e-mail
notification that such documentation is available on the Company’s Intranet site. Upon written request, the Company will provide
to Participant a paper copy of any document also delivered to Participant electronically. The authorization described in this paragraph
may be revoked by Participant at any time by written notice to the Company.


 


 


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