Document:

Exhibit 4.1

 

2019 OMNIBUS INCENTIVE PLAN

 

CANNTRUST HOLDINGS INC.

 

2019 OMNIBUS INCENTIVE PLAN

 

Section 1.          Purpose.
The purpose of the CannTrust Holdings Inc. 2019 Omnibus Incentive Plan is to attract, retain and reward those employees, directors
and other individuals who are expected to contribute significantly to the success of the Corporation and its Affiliates, to incentivize
such individuals to perform at the highest level, to strengthen the mutuality of interests between such individuals and the Corporation's
shareholders and, in general, to further the best interests of the Corporation and its shareholders. The Plan is intended to comply
with Section 422 of the Code (as defined below), with respect to the U.S. employees participating in the Plan, if and when
applicable.

 

Section 2.          Definition.

 

As used in the Plan, the following terms
shall have the meanings set forth below:

 

(a)          “Affiliate”
shall mean: (i) any entity that, directly or indirectly, controls (as well as is controlled by or under common or joint control
with) the Corporation; or (ii) any entity in which the Corporation has a significant equity interest, in either case as determined
by the Committee; provided that, unless otherwise determined by the Committee, the Shares subject to any Options or SAR that are
granted to a service provider of an Affiliate constitutes "service recipient stock" for purposes of Section 409A of the
Code or otherwise does not subject the Award to the excise tax under Section 409A of the Code, provided that in respect of any
Option granted to a Canadian Grantee, an Affiliate shall only include a corporation that deals at non-arm's length, within the
meaning of the ITA, with the Company, and further provided that, in respect of any Deferred Share Unit granted to a Canadian Grantee,
an Affiliate shall only include a corporation that is related to the Company, within the meaning of the ITA.

 

(b)          “Award”
shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Deferred Stock Unit, annual or long-term
Performance Award or Other Stock-Based Award granted under the Plan, which may be denominated or settled in Shares, cash or in
such other forms as provided for herein.

 

(c)          “Award
Agreement” shall mean the agreement (whether in written or electronic form) or other instrument or document evidencing
any Award granted under the Plan, which may, but need not, be executed or acknowledged by a Participant.

 

(d)          “Beneficiary”
shall mean a person or persons entitled to receive payments or other benefits or exercise rights that are available under the Plan
in the event of the Participant's death. If no such person is named by a Participant, such individual's Beneficiary shall be the
individual's estate.

 

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(e)          “Blackout
Period” means a period when the Participant is prohibited from trading in the Corporation's securities pursuant to securities
regulatory requirements or the Corporation's insider trading policy or other applicable policy or requirement of the Corporation.

 

(f)          “Board”
shall mean the board of directors of the Corporation.

 

(g)          “Canadian
Award” shall mean an Award pursuant to which, as applicable: (i) the Exercise Price is stated and payable in Canadian
dollars or the basis upon which it is to be settled (whether in cash or in Shares) is stated in Canadian dollars); (ii) in the
case of freestanding SARs (as defined below), the base price is stated in Canadian dollars and any cash amount payable in settlement
thereof shall be paid in Canadian dollars; (iii) in the case of Restricted Share Units, Deferred Share Units or Performance Awards,
any cash amount payable in settlement thereof shall be paid in Canadian dollars; or (iv) in the case of Other Stock-Based Awards
the price or value of such Shares is stated in Canadian dollars.

 

(h)          “Canadian
Grantee” shall mean a Participant who is a resident of Canada for the purposes of the ITA, or who is granted an Award
under the Plan in respect of services performed in Canada for the Company or any of its Affiliates.

 

(i)          “Cashless
Exercise” shall have the meaning set out in Section 6(e) hereof.

 

(j)          “Change
in Control” shall mean the occurrence of:

 

(i)          any
individual, entity or group of individuals or entities acting jointly or in concert (other than the Corporation, its Affiliates
or an employee benefit plan or trust maintained by the Corporation or its Affiliates, or any company owned, directly or indirectly,
by the shareholders of the Corporation in substantially the same proportions as their ownership of Shares of the Corporation) acquiring
beneficial ownership, directly or indirectly, of more than 50% of the combined voting power of the Corporation's then outstanding
securities (excluding any "person" who becomes such a beneficial owner (x) in connection with a transaction described
in clause (A) of paragraph (ii) below;

 

(ii)         the
consummation of (A) a merger or consolidation of the Corporation or any direct or indirect subsidiary of the Corporation with any
other corporation, other than a merger or consolidation which would result in the voting securities of the Corporation outstanding
immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or being converted into
voting securities of the surviving entity or any parent thereof) more than 50% of the combined voting power or the total fair market
value of the securities of the Corporation or such surviving entity or any parent thereof outstanding immediately after such merger
or consolidation; provided, however, that a merger or consolidation effected to implement a recapitalization of the Corporation
(or similar transaction) in which no person (other than those covered by the exceptions in paragraph (i) of this definition) acquires
more than 50% of the combined voting power of the Corporation's then outstanding securities shall not constitute a Change in Control
of the Corporation; or

 

(iii)        a
complete liquidation or dissolution of the Corporation or the consummation of any sale, lease, exchange or other transfer (in one
transaction or a series of transactions) of all or substantially all of the assets of the Corporation; other than such liquidation,
sale or disposition to a person or persons who beneficially own, directly or indirectly, more than 50% of the combined voting power
of the outstanding voting securities of the Corporation at the time of the sale.

 

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Notwithstanding the foregoing, with respect
to any Award that is characterized as "nonqualified deferred compensation" within the meaning of Section 409A of the
Code, an event shall not be considered to be a Change in Control under the Plan for purposes of payment of such Award unless such
event is also a "change in ownership," a "change in effective control" or a "change in the ownership of
a substantial portion of the assets" of the Corporation within the meaning of Section 409A of the Code.

 

(k)          “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time. Any reference to any section of the Code shall also
be a reference to any successor provision and any treasury regulation promulgated thereunder.

 

(l)          “Committee”
shall mean the Corporation’s Compensation Committee appointed by the Board or such other committee as may be designated by
the Board to administer the Plan. If the Board does not designate the Committee, references herein to the "Committee"
shall refer to the Board.

 

(m)          “Consultant”
means a consultant as defined in the Securities Act engaged by the Corporation or its Affiliates.

 

(n)          “Corporation”
shall mean CannTrust Holdings Inc.

 

(o)           “Covered
Employee” means an individual who is (i) a "covered employee" within the meaning of Section 162(m)(3) of the
Code, or any successor provision thereto and (ii) any individual who is designated by the Committee, in its discretion, at the
time of any Award or at any subsequent time, as reasonably expected to be a "covered employee" with respect to the taxable
year of the Corporation in which any applicable Award will be paid.

 

(p)          
 “Deferred Stock Unit” shall mean a contractual right to receive Shares or other Awards or a combination thereof
at the end of a specified deferral period, granted under Section 9.

 

(q)          “Dividend
Equivalent” means a right, granted to a Participant under the plan, to receive cash, shares, other Awards or other property
equal in value to dividends paid with respect to Shares.

 

(r)           “Effective
Date" shall mean June 20, 2019.

 

(s)           “Fair
Market Value” means, for purposes of the Plan, unless otherwise required by any applicable provision of the Code, any
regulations issued thereunder or other applicable law or by any applicable accounting standard for the Corporation’s desired
accounting for Awards or by the rules of the applicable Stock Exchange, a price that is determined by the Committee, provided that
such price cannot be less than:

 

(i)          For
Canadian Awards, as long as Shares are listed on the TSX, the greater of the volume weighted average trading price of the Shares
on the TSX for the five trading days immediately prior to the grant date or the closing price of the Shares on the TSX on the trading
day immediately prior to the grant date.

 

(ii)         For
U.S. Awards, as long as the Shares are listed on a U.S. Exchange, the greater of the volume weighted average trading price of the
Shares on the U.S. Exchange for the five trading days immediately prior to the grant date or the closing price of the Shares on
the U.S. Exchange on the trading day immediately prior to the grant date.

 

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(iii)        Unless
prohibited by applicable law or rules of a Stock Exchange, Canadian Awards or U.S. Awards may be made to a Participant without
regard to such Participant’s domicile or residence for tax purposes. Thus, for example, U.S. taxpayers that are Participants
may receive Canadian Awards. The Corporation may take such actions with respect to its filings, records and reporting, as it deems
appropriate to reflect the conversion of Awards from Canadian dollars to U.S. dollars and vice versa.

 

(iv)        If
the Shares are not traded, listed or otherwise reported or quoted, the Committee shall determine in good faith the Fair Market
Value in whatever manner it considers appropriate taking into account the requirements of the ITA, Section 409A of the Code and
any other applicable law.

 

For purposes of the grant of any Award,
the applicable date shall be the date on which the Award is granted. For purposes of the exercise of any Award, the applicable
date shall be the date a notice of exercise is received by the Committee or its designee, as applicable, or, if not a day on which
the applicable market is open, the next day that it is open. In the event that the Committee determines that the date of grant
of an Award shall be a future date because the Corporation is in a Blackout Period, the applicable date shall be deemed to occur
on the seventh day following the termination of the Blackout Period and the Fair Market Value shall be the weighted average trading
price of the Shares on the TSX or U.S. Exchange as applicable for a Canadian Award or U.S. Award, for the five most recent trading
days preceding the applicable date (e.g. trading days two to six following the lifting of the Blackout Period). In the event an
additional Blackout Period commences such that six consecutive trading days (excluding weekends and statutory holidays) do not
elapse following the expiry of the initial Blackout Period, the applicable date and market price shall be determined by reference
to the seventh consecutive trading day following the expiry of the subsequent Blackout Period.

 

(t)          “Incentive
Stock Option” shall mean an option representing the right to purchase Shares from the Corporation, granted under and
in accordance with the terms of Section 6, that is intended to be and is designated as an "Incentive Stock Option" within
the meaning of Section 422 of the Code.

 

(u)           “ITA”
shall mean the Income Tax Act (Canada) and any regulations thereunder as amended from time to time.

 

(v)          "Non-Employee
Director" shall mean an individual who is a member of the Board but who is not otherwise an Employee or a Consultant of
the Company or of any Affiliate at the date an Award is granted.

 

(w)          “Non-Qualified
Stock Option” shall mean an option representing the right to purchase Shares from the Corporation, granted under and
in accordance with the terms of Section 6, that is not an Incentive Stock Option.

 

(x)          “Option”
shall mean an Incentive Stock Option or a Non-Qualified Stock Option.

 

(y)          “Other
Stock-Based Award” means an Award granted pursuant to Section 11 of the Plan.

 

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(z)          “Participant”
shall mean the recipient of an Award granted under the Plan.

 

(aa)        “Performance
Award” means an Award granted pursuant to Section 10 of the Plan.

 

(bb)        “Performance
Goals” means goals established by the Committee as contingencies for Awards to vest and/or become exercisable or distributable
based on one or more performance goals. Performance Goals may be applied to either the Corporation as a whole or to a business
unit or to a single or group of Affiliates, either individually, alternatively or in any combination, and measured either in total,
incrementally or cumulatively over a specified performance period, on an absolute basis or relative to a pre-established target,
to previous years' results or to a designated comparison group.

 

(cc)        “Performance
Period” means the period established by the Committee at the time any Performance Award is granted or at any time thereafter
during which any Performance Goals specified by the Committee with respect to such Award are measured or must be satisfied.

 

(dd)        “Plan”
shall mean this CannTrust Holdings Inc. 2019 Omnibus Incentive Plan, as the same may be amended or supplemented from time to time.

 

(ee)         “Prior Option Plan” means the Corporation’s stock
option plan as it existed prior to the date hereof.

 

(ff)          “Restricted
Stock" shall mean any Share granted under Section 8.

 

(gg)         “Restricted
Stock Unit” shall mean a contractual right granted under Section 8 that is denominated in Shares. Each Restricted Stock
Unit represents a right to receive one Share or the value of one Share upon the terms and conditions set forth in the Plan and
the applicable Award Agreement.

 

(hh)         “SAR”
or “Stock Appreciation Right” shall mean any right granted to a Participant pursuant to Section 7 to receive,
upon exercise by the Participant, the excess of (i) the Fair Market Value of one Share on the date of exercise over (ii) the grant
price of the right on the date of grant, or if granted in connection with an outstanding Option on the date of grant of the related
Option, as specified by the Committee in its sole discretion, which, except in the case of Substitute Awards, shall not be less
than the Fair Market Value of one Share on such date of grant of the right or the related Option, as the case may be.

 

(ii)          “Service”
shall mean the active performance of services for the Corporation or an Affiliate by a person who is an employee or director of
the Corporation or an Affiliate. Notwithstanding the foregoing, with respect to any Award that is characterized as "nonqualified
deferred compensation" within the meaning of Section 409A of the Code, an event shall not be considered to be a termination
of "Service" under the Plan for purposes of payment of such Award unless such event is also a "separation from service"
within the meaning of Section 409A of the Code.

 

(jj)          “Shares”
shall mean the common shares in the capital of the Corporation.

 

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(kk)        “Stock
Exchanges” shall mean the U.S. Exchange and the TSX.

 

(ll)           “Subsidiary”
shall mean any corporation of which shares representing at least 50% of the ordinary voting power is owned, directly or indirectly,
by the Corporation.

 

(mm)        “Substitute
Awards” shall mean Awards granted in assumption of, or in substitution for, outstanding awards previously granted by
a company acquired by the Corporation or with which the Corporation combines.

 

(nn)          “Transfer”
means: (a) when used as a noun, any direct or indirect transfer, sale, assignment, pledge, hypothecation, encumbrance or other
disposition (including the issuance of equity in any entity), whether for value or no value and whether voluntary or involuntary
(including by operation of law), and (b) when used as a verb, to directly or indirectly transfer, sell, assign, pledge, encumber,
charge, hypothecate or otherwise dispose of (including the issuance of equity in any entity) whether for value or for no value
and whether voluntarily or involuntarily (including by operation of law). "Transferred" and "Transferable"
shall have a correlative meaning.

 

(oo)         “TSX”
means the Toronto Stock Exchange and at any time the Shares are not listed and posted for trading on the TSX, shall be deemed to
mean such other stock exchange or trading platform in Canada upon which the Shares trade and which has been designated by the Committee.

 

(pp)       “U.S.
Award” shall mean an Award pursuant to which, as applicable: (i) in the case of Options (including tandem SARs (as defined
below)),the Exercise Price is stated and payable in United States dollars (and in the case of tandem SARs, any cash amount payable
in settlement thereof shall be paid in United States dollars), (ii) in the case of freestanding SARs (as defined below), the base
price is stated in United States dollars and any cash amount payable in settlement thereof shall be paid in United States dollars;
(iii) in the case of Restricted Share Units, Deferred Share Units or Performance Awards, any cash amount payable in settlement
thereof shall be paid in United States dollars; or (iv) in the case of Other Stock-Based Awards the price or value of such Shares
is stated in United States dollars.

 

(qq)       “U.S.
Exchange” shall mean the New York Stock Exchange or such other national securities exchange or trading system on which
the Corporation’s shares are listed in the United States.

 

Section 3.          Eligibility.

 

(a)          Any
employee, director, Consultant or other advisor of, or any other individual who provides services to, the Corporation or any Affiliate,
shall be eligible to be selected to receive an Award under the Plan. All Awards shall be granted by an Award Agreement. Notwithstanding
the foregoing, only eligible employees of the Corporation, its subsidiaries and its parent (as determined in accordance with Section
422(b) of the Code in the case of US employees) are eligible to be granted Incentive Stock Options under the Plan. Eligibility
for the grant of Awards and actual participation in the Plan shall be determined by the Committee in its sole discretion.

 

(b)          An
individual who has agreed to accept employment by the Corporation or an Affiliate shall be deemed to be eligible for Awards hereunder
as of the date of such acceptance; provided that vesting and exercise of Awards granted to such individual are conditioned upon
such individual actually becoming an employee of the Corporation or an Affiliate.

 

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(c)          Holders
of options and other types of incentive awards granted by a company acquired by the Corporation or with which the Corporation combines
are eligible for grant of Substitute Awards hereunder.

 

Section 4.          Administration.

 

(a)          The
Plan shall be administered by the Committee. Subject to Section 15, the Committee shall have the authority to adopt, alter and
repeal such administrative rules, guidelines and practices governing the Plan and perform all acts, including the delegation of
its responsibilities (to the extent permitted by applicable law and applicable stock exchange rules), as it shall, from time to
time, deem advisable; to construe and interpret the terms and provisions of the Plan and any Award issued under the Plan (and any
agreements relating thereto); and to otherwise supervise the administration of the Plan. The Committee may correct any defect,
supply any omission or reconcile any inconsistency in the Plan or in any agreement relating thereto in the manner and to the extent
it shall deem necessary to effectuate the purpose and intent of the Plan. The Committee may adopt special guidelines and provisions
for persons who are residing in or employed in, or subject to, the taxes of, any domestic or foreign jurisdictions to comply with
applicable tax and securities laws of such domestic or foreign jurisdictions. To the extent applicable, the Plan and Awards intended
to be "performance-based," the applicable provisions of Section 162(m) of the Code, and the Plan shall be limited, construed
and interpreted in a manner so as to comply therewith.

 

(b)          Subject
to the terms of the Plan and applicable law and the rules of the Stock Exchanges that the Shares are listed at the relevant time
and in addition to those authorities provided in Section 4(a), the Committee (or its delegate) shall have full power and authority
to:

 

		(i)	designate Participants;

 

		(ii)	determine the type or types of Awards (including Substitute
Awards) to be granted to each Participant under the Plan;

 

		(iii)	determine the number of Shares to be covered by (or with
respect to which payments, rights, or other matters are to be calculated in connection with) Awards, including whether an Award
shall be a Canadian Award or a U.S. Award;

 

		(iv)	authorize and approve the applicable form and determine
the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder (including, but not limited
to, the exercise or purchase price (if any), any restriction or limitation, any vesting schedule or acceleration thereof, or any
forfeiture restrictions or waiver thereof, regarding any Award and the Shares relating thereto, based on such factors, if any,
as the Committee shall determine, in its sole discretion);

 

		(v)	determine whether, to what extent, and under what circumstances
Awards may be settled or exercised in cash, Shares, other securities, or other Awards, or canceled, forfeited or suspended, and
the method or methods by which Awards may be settled, exercised, canceled, forfeited or suspended;

 

		(vi)	determine whether, to what extent, and under what circumstances
cash, Shares, other securities, other Awards, and other amounts payable with respect to an Award under the Plan shall be deferred
either automatically or at the election of the holder thereof or of the Committee, taking into consideration the requirements
of Section 409A of the Code;

 

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		(vii)	determine whether to require a Participant, as a condition
of the granting of any Award, to not sell or otherwise dispose of shares acquired pursuant to the exercise of an Award for a period
of time as determined by the Committee, in its sole discretion, following the date of the acquisition of such Award;

 

		(viii)	to determine whether an Option is an Incentive Stock Option
or Non-Qualified Option;

 

		(ix)	interpret and administer the Plan and any instrument or
agreement relating to, or Award made under, the Plan;

 

		(x)	establish, amend, suspend or waive such rules and regulations
and appoint such agents as it shall deem appropriate for the proper administration of the Plan;

 

		(xi)	to permit accelerated vesting or lapse of restrictions
of any Award at any time; and

 

		(xii)	make any other determination and take any other action
that the Committee deems necessary or desirable for the administration of the Plan.

 

(c)          All
decisions of the Committee shall be final, conclusive and binding upon all parties, including the Corporation, the shareholders
and the Participants.

 

(d)          Notwithstanding
the foregoing, the Committee shall not have any discretion under this Section 4 or any other provision of the Plan that would modify
the terms or conditions of any (i) Performance Goal or waive the satisfaction thereof with respect to any Award that is intended
to qualify as "performance-based compensation" for purposes of Section 162(m) of the Code if the exercise of such discretion
would cause the Award not to so qualify, (ii) any other Award that is intended to be exempt from the definition of "salary
deferral arrangement" in the ITA if the exercise of such discretion would cause the Award to not be or cease to be exempt;
or (iii) any Option granted to a Canadian Grantee if the exercise of such discretion would cause the Option to not be or cease
to be governed by section 7 of the ITA. The Committee will also exercise its discretion in good faith in accordance with the Corporation’s
intention that the terms of Awards and the modifications or waivers permitted hereby are in compliance with applicable law and
the rule of the Stock Exchanges.

 

(e)          No
member of the Committee or the Board generally shall be liable for any action or determination made in good faith pursuant to the
Plan or any instrument of grant evidencing any Award granted under the Plan. To the fullest extent permitted by law, the Corporation
shall indemnify and save harmless, and shall advance and reimburse the expenses of, each Person made, or threatened to be made,
a party to any action or proceeding in respect of the Plan by reason of the fact that such Person is or was a member of the Committee
or is or was a member of the Board in respect of any claim, loss, damage or expense (including legal fees) arising therefrom.

 

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Section 5.          Shares
Available for Awards; Per Person Limitations.

 

(a)          Subject
to adjustment as provided below, the maximum number of Shares available for issuance under the Plan shall not exceed 10% of the
issued and outstanding Shares less the number of Shares reserved for issuance under all other security based compensation arrangements
of the Corporation; provided that all Shares reserved and available under the Plan shall constitute the maximum number of Common
Shares that can be issued for Incentive Stock Options. Every three years after the Effective Date of the Plan, all unallocated
Awards under the Plan shall be submitted for approval to the Board and the shareholders of the Corporation. With respect to Stock
Appreciation Rights settled in Shares, upon settlement, only the number of Shares delivered to a Participant (based on the difference
between the Fair Market Value of the Shares subject to such Stock Appreciation Right on the date such Stock Appreciation Right
is exercised and the exercise price of each Stock Appreciation Right on the date such Stock Appreciation Right was awarded) shall
count against the aggregate and individual share limitations set forth under this Section 5. If any Option, Stock Appreciation
Right or Other Stock-Based Awards granted under the Plan expires, terminates or is canceled for any reason without having been
exercised in full, the number of Shares underlying any unexercised Award shall again be available for the purpose of Awards under
the Plan. If any shares of Restricted Stock, Performance Awards or Other Stock-Based Awards denominated in Shares awarded under
the Plan to a Participant are forfeited for any reason, the number of forfeited shares of Restricted Stock, Performance Awards
or Other Stock-Based Awards denominated in Shares shall again be available for purposes of Awards under the Plan. Any Award under
the Plan settled in cash shall not be counted against the foregoing maximum share limitations. On exercise of any Option, Stock
Appreciation Right or Other Stock-Based Awards granted under the Plan, the number of Shares underlying such Award shall again be
available for the purpose of Awards under the Plan. Any Shares subject to any Award or award granted under a Prior Plan that is
outstanding on the date which this Plan was approved by shareholders of the Corporation (or any portion thereof) that has expired
or is forfeited, surrendered, cancelled or otherwise terminated prior to, or that is otherwise settled so that there is no, issuance
or transfer of such Shares shall not be counted against the foregoing maximum share limitations.

 

(b)          Any
Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or Shares acquired by
the Corporation.

 

(c)          To
the extent required by Section 162(m) of the Code for Awards under the Plan to qualify as "performance-based compensation,"
the following individual Participant limitations shall apply:

 

(i)          The
maximum number of Shares subject to any Award of Options, or Stock Appreciation Rights, shares of Restricted Stock, Restricted
Stock Units or Other Stock-Based Awards for which the grant of such Award or the lapse of the relevant restriction period is subject
to the attainment of Performance Goals in accordance with Section 10 which may be granted under the Plan during any fiscal year
of the Corporation to any Participant shall be 10% Shares per type of Award (which shall be subject to any further increase or
decrease pursuant to Section 5(d)) provided that the maximum number of Shares for all types of Awards granted to any Participant
does not exceed 10% Shares (which shall be subject to any further increase or decrease pursuant to Section 5(d)) during any fiscal
year of the Corporation. If a Stock Appreciation Right is granted in tandem with an Option, it shall apply against the Participant's
individual share limitations for both Stock Appreciation Rights and Options.

 

(ii)         Subject
to Section 5(g), Section 5(h) and Section 21, there are no annual individual share limitations applicable to Participants on Options,
Restricted Stock, Restricted Stock Units or Other Stock-Based Awards for which the grant, vesting or payment (as applicable) of
any such Award is not subject to the attainment of Performance Goals.

 

(iii)        The
individual Participant limitations set forth in this Section 5(c) (other than Section 5(c)(iii)) shall be cumulative; that is,
to the extent that Shares for which Awards are permitted to be granted to a Participant during a fiscal year are not covered by
an Award to such Participant in a fiscal year, the number of Shares available for Awards to such Participant shall automatically
increase in the subsequent fiscal years during the term of the Plan until used.

 

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(d)          Changes.

 

(i)          The
existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or the shareholders
of the Corporation to make or authorize (a) any adjustment, recapitalization, reorganization or other change in the Corporation's
capital structure or its business, (b) any arrangement, merger or consolidation of the Corporation or any Affiliate, (c) any issuance
of bonds, debentures, preferred or prior preference stock ahead of or affecting the Shares (d) the dissolution or liquidation of
the Corporation or any Affiliate, (e) any sale or transfer of all or part of the assets or business of the Corporation or any Affiliate
or (f) any other corporate act or proceeding.

 

(ii)         Subject
to the provisions of Section 5(d)(iv), if there shall occur any such change in the capital structure of the Corporation by reason
of any stock split, reverse stock split, stock dividend, extraordinary dividend, subdivision, combination or reclassification of
shares that may be issued under the Plan, any recapitalization, any arrangement, any merger, any consolidation, any spin off, any
reorganization or any partial or complete liquidation, or any other corporate transaction or event having an effect similar to
any of the foregoing (a "Corporate Event"), then (i) the aggregate number and/or kind of shares that thereafter
may be issued under the Plan, (ii) the number and/or kind of shares or other property (including cash) to be issued upon exercise
of an outstanding Award granted under the Plan, and/or (iii) the purchase price thereof, shall be appropriately adjusted. In addition,
subject to Section 5(d)(iv), if there shall occur any change in the capital structure or the business of the Corporation that is
not a Corporate Event (an "Other Extraordinary Event"), including by reason of any ordinary dividend (whether
cash or stock), any conversion, any adjustment, any issuance of any class of securities convertible or exercisable into, or exercisable
for, any class of stock, or any sale or transfer of all or substantially all of the Corporation's assets or business, then the
Committee, in its sole discretion, may adjust any Award and make such other adjustments to the Plan. Any adjustment pursuant to
this Section 5(d) shall be consistent with the applicable Corporate Event or the applicable Other Extraordinary Event, as the case
may be, and in such manner as the Committee may, in its sole discretion, deem appropriate and equitable to prevent substantial
dilution or enlargement of the rights granted to, or available for, Participants under the Plan. Any such adjustment determined
by the Committee shall be final, binding and conclusive on the Corporation and all Participants and their respective heirs, executors,
administrators, successors and permitted assigns. Except as expressly provided in this Section 5(d) or in the applicable Award
Agreement, a Participant shall have no rights by reason of any Corporate Event or any Other Extraordinary Event.

 

(iii)        Fractional
shares of Shares resulting from any adjustment in Awards pursuant to Section 5(d)(i) or Section 5(d)(ii) shall be aggregated until,
and eliminated at, the time of exercise by rounding-down for fractions less than one-half and rounding-up for fractions equal to
or greater than one- half. No cash settlements shall be made with respect to fractional shares eliminated by rounding. Notice of
any adjustment shall be given by the Committee to each Participant whose Award has been adjusted and such adjustment (whether or
not such notice is given) shall be effective and binding for all purposes of the Plan.

 

(e)          Shares
underlying Awards that can only be settled in cash shall not reduce the number of Shares remaining available for issuance under
the Plan.

 

(f)          Notwithstanding
any provision of the Plan to the contrary, if authorized but previously unissued Shares are issued under the Plan, such shares
shall not be issued for a consideration that is less than as permitted under applicable law and the rules of the TSX.

 

(g)          The
maximum number of Shares which may be reserved for issuance to a Non-Employee Director under the Plan, the Existing Option Plan
and any other proposed or established Share Compensation Arrangement, shall not exceed one percent (1%) of the Outstanding Shares.

 

    	10 

      

    

 

(h)          The
equity value of Options granted to a Non-Employee Director, within a one year period, pursuant to the Plan shall not exceed $100,000;
and (ii) the aggregate equity value of all awards, that are eligible to be settled in Shares granted to a Non-Employee Director,
within a one year period, pursuant to all Security Based Compensation Arrangements (including, for greater certainty, the Plan)
shall not exceed $150,000.

 

(i)      
     In the event that a Participant holds 20% or more of the issued and outstanding Shares or the
settlement of an Award in Shares would cause the Participant to hold 20% or more of the issued and outstanding Shares, such
Participant shall only be granted Awards that can be settled in cash.

 

Section 6.          Options.

 

The Committee is
hereby authorized to grant Options to Participants with the following terms and conditions and with such additional terms and conditions,
in either case not inconsistent with the provisions of the Plan, as the Committee shall determine:

 

(a)          The
purchase price per Share under an Option shall be determined by the Committee; provided, however, that, except in the case of Substitute
Awards, such purchase price shall not be less than 100% (or 110% in the case of an Incentive Stock Option granted to a person owning
stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation, its
subsidiaries or its parent, determined in accordance with Section 422(b)(6)) of the Code) of the Fair Market Value of a Share on
the date of grant of such Option. In the event that the Committee determines and has authorized the Chief Executive Officer of
the Corporation to grant such Options on a future date because the Corporation is in a Blackout Period, the date of grant shall
be deemed to occur on the second trading day following the termination of the Blackout Period and the Fair Market Value shall be
the closing price on the first business day following the date on which the relevant Blackout Period has expired, unless the relevant
grant of Options occurs after the close of trading on the date of grant, in which case the Fair Market Value shall be equal to
the closing price on the date of grant. In the event an additional Blackout Period commences such that two consecutive trading
days (excluding weekends and statutory holidays) do not elapse following the expiry of the initial Blackout Period, the grant date
and Fair Market Value shall be determined by reference to the second consecutive trading day following the expiry of the subsequent
Blackout Period.

 

(b)          The
term of each Option shall be fixed by the Committee but shall not exceed 10 years from the date of grant thereof. Notwithstanding
the foregoing, if the term of an Option (other than an Incentive Stock Option) held by any Participant not subject to Section 409A
of the Code would otherwise expire during, or within ten business days of the expiration of a Blackout Period applicable to such
Participant, then the term of such Option shall be extended to the close of business on the tenth business day following the expiration
of the Blackout Period.

 

(c)          The
Committee shall determine the time or times at which an Option may be exercised in whole or in part.

 

    	11 

      

    

 

(d)          To
the extent vested and exercisable, Options may be exercised in whole or in part at any time during the Option term, by giving written
notice of exercise to the Corporation specifying the number of Shares to be purchased. Such notice shall be accompanied by payment
in full of the purchase price (the “Option Price”) as follows: (i) by certified cheque, bank draft or money
order payable to the order of the Corporation; (ii) solely to the extent permitted by applicable law, if the Shares are traded
on a national securities exchange, and the Committee authorizes, through a procedure whereby the Participant delivers irrevocable
instructions to a broker reasonably acceptable to the Committee to deliver promptly to the Corporation an amount equal to the purchase
price; or (iii) on such other terms and conditions as may be acceptable to the Committee (including, without limitation, having
the Corporation withhold Shares issuable upon exercise of the Option, or by payment in full or in part in the form of Shares owned
by the Participant, based on the Fair Market Value of the Shares on the payment date as determined by the Committee). No Shares
shall be issued until payment therefor, as provided herein, has been made or provided for.

 

(e)          Notwithstanding
Section 6(d), with the approval of the Committee, in its sole and unfettered discretion, a Participant may elect to exercise an
Option, in whole or in part, without payment of the aggregate Option Price due on such exercise by electing to receive Shares equal
in value to the difference between the Option Price and the Fair Market Value on the date of exercise (any such exercise a “Cashless
Exercise”) computed by using the following formula, with either a partial or full deduction of the number of underlying
Shares from the Plan reserve:

 

X = Y (A-B)

A

 

Where    X = the number of Shares to be
issued to the Participant upon such Cashless Exercise;

 

Y = the number of Shares
purchasable under the Option (at the date of such calculation);

 

A = Fair Market Value of one Share of the
Corporation (at the date of such calculation, if greater than the Option Price); and

 

B = Option Price (as
adjusted to the date of such calculation).

 

In the event that the Shares are not listed
on the Exchange as at the date of an exercise of an Option, it shall be a condition precedent to the exercise of any Option that
the Participant agree to be bound by the terms of any unanimous shareholders agreement or similar agreements generally applicable
to all of the shareholders of the Corporation then in force, and further that the Participant agree to enter into voting trust
generally applicable to employee shareholders of the Corporation then in force and provide a power of attorney in support of such
voting trust.

 

(f)          The
terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the
Code, or any successor provision thereto, and any regulations promulgated thereunder. To the extent that the aggregate Fair Market
Value (determined as of the time of grant) of the Shares with respect to which Incentive Stock Options are exercisable for the
first time by a Participant Employee during any calendar year under the Plan and/or any other stock option plan of the Corporation,
any subsidiary or any parent exceeds $100,000, such Options shall be treated as Non-Qualified Options. Should any provision of
the Plan not be necessary in order for the Options to qualify as Incentive Stock Options, or should any additional provisions be
required, the Committee may amend the Plan accordingly, without the necessity of obtaining the approval of the shareholders of
the Corporation, subject to the rules of the TSX. To the extent that any such Option does not qualify as an Incentive Stock Option
(whether because of its provisions or the time or manner of its exercise or otherwise), such Option or the portion thereof which
does not so qualify shall constitute a separate Non- Qualified Stock Option.

 

    	12 

      

    

 

Section 7.          Stock
Appreciation Rights.

 

(a)          The
Committee is hereby authorized to grant Stock Appreciation Rights ("SARs") to Participants with terms and conditions
as the Committee shall determine not inconsistent with the provisions of the Plan.

 

(b)          SARs
may be granted hereunder to Participants either alone ("freestanding") or in addition to other Awards granted
under the Plan ("tandem") and may, but need not, relate to a specific Options granted under Section 6.

 

(c)          Any
tandem SAR related to an Option may be granted at the same time such Option is granted to the Participant. In the case of any tandem
SAR related to any Option, the SAR or applicable portion thereof shall not be exercisable until the related Option or applicable
portion thereof is exercisable and shall terminate and no longer be exercisable upon the termination or exercise of the related
Option, except that a SAR granted with respect to less than the full number of Shares covered by a related Option shall not be
reduced until the exercise or termination of the related Option exceeds the number of Shares not covered by the SAR. Any Option
related to any tandem SAR shall no longer be exercisable to the extent the related SAR has been exercised.

 

(d)          A
freestanding SAR shall not have a term of greater than 10 years or, unless it is a Substitute Award, an exercise price less than
100% of Fair Market Value of the Share on the date of grant. Notwithstanding the foregoing, if the term of a SAR held by any Participant
not subject to Section 409A of the Code would otherwise expire during, or within ten business days of the expiration of a Blackout
Period applicable to such Participant, then the term of such SAR shall be extended to the close of business on the tenth business
day following the expiration of the Blackout Period.

 

Section 8.          Restricted
Stock and Restricted Stock Units.

 

(a)          The
Committee is hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units to Participants.

 

(b)          Shares
of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may impose (including, without
limitation, any limitation on the right to receive any dividend or dividend equivalent or other right), which restrictions may
lapse separately or in combination at such time or times, in such installments or otherwise, as the Committee may deem appropriate.
To the extent required by law, Participants holding Restricted Stock granted hereunder shall have the right to exercise full voting
rights with respect to those Restricted Stocks during the period of restriction. A Participant shall have no voting rights with
respect to any Restricted Stock Units granted hereunder.

 

    	13 

      

    

 

(c)          Any
share of Restricted Stock granted under the Plan may be evidenced in such manner as the Committee may deem appropriate including,
without limitation, book-entry registration or issuance of a share certificate or certificates. In the event any share certificate
is issued in respect of shares of Restricted Stock granted under the Plan, such certificate shall be registered in the name of
the Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted
Stock. If share certificates are issued in respect of shares of Restricted Stock, the Committee may require that any share certificates
evidencing such Shares be held in custody by the Corporation until the restrictions thereon shall have lapsed, and that, as a condition
of any grant of Restricted Stock, the Participant shall have delivered a duly signed stock power or other instruments of assignment
(including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate by the
Corporation, which would permit transfer to the Corporation of all or a portion of the shares subject to the Restricted Stock Award
in the event that such Award is forfeited in whole or part.

 

(d)          The
Committee may in its discretion, when it finds that a waiver would be in the best interests of the Corporation, waive in whole
or in part any or all restrictions with respect to Shares of Restricted Stock or Restricted Stock Units.

 

(e)          The
Committee, in its discretion, may award Dividend Equivalents with respect to Awards of Restricted Stock Units. The entitlements
on such Dividend Equivalents will not be available until the vesting of the Award of Restricted Stock Units.

 

(f)           If
the Committee intends that an Award under this Section 8 shall constitute or give rise to "qualified performance based compensation"
under Section 162(m) of the Code, such Award may be structured in accordance with the requirements of Section 10, including without
limitation, the Performance Goals and the Award limitation set forth therein, and any such Award shall be considered a Performance
Award for purposes of the Plan.

 

(g)          No
Restricted Stock Unit shall vest later than three years after the date of grant.

 

Section 9.          Deferred
Stock Unit. The Committee is authorized to grant Deferred Stock Units to Participants, subject to the following terms and conditions:

 

(a)          Deferred
Stock Units shall be settled upon expiration of the deferral period specified for an Award of Deferred Stock Unit by the Committee
(or, if permitted by the Committee, as elected by the Participant). In addition, Deferred Stock Units shall be subject to such
restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions
may lapse at the expiration of the deferral period or at earlier specified times (including based on achievement of performance
goals and/or future service requirements), separately or in combination, in installments or otherwise, and under such other circumstances
as the Committee may determine at the date of grant or thereafter. Deferred Stock Units may be satisfied by delivery of Shares,
other Awards, or a combination thereof, as determined by the Committee at the date of grant or thereafter.

 

(b)          The
Committee, in its discretion, may award Dividend Equivalents with respect to Awards of Deferred Stock Units. The entitlements on
such Dividend Equivalents will not be available until the expiration of the deferral period for the Award of Deferred Stock Units.

 

(c)          Except
as otherwise provided in the Award Agreement, each Participant shall be entitled to redeem his or her Deferred Stock Units during
the period commencing on the business day immediately following the Director Termination Date (as defined below) and ending on
the 90th day following the Director Termination Date by providing a written notice of redemption, on a prescribed form,
to the Company (the “Redemption Date”). In the event of death of a Participant, the notice of redemption shall
be filed by the administrator or liquidator of the estate of the Participant. In the case of a U.S. Participant and except as
otherwise provided in an Award Agreement, however, the redemption will be deemed to be made on the earlier of (i) December 31
of the year following the year of a “separation from service” within the meaning of Section 409A of the Code, or (ii)
within 90 days of the U.S. Participant’s death, or retirement from, or loss of office or employment with the Company, within
the meaning of paragraph 6801(d) of the regulations under the ITA, including the Participant’s resignation, retirement,
removal from the Board, death or otherwise.

 

    	14 

      

    

 

Section 10.         Performance
Awards.

 

(a)          The
Committee may grant a Performance Award to a Participant payable upon the attainment of specific Performance Goals. The Committee
may grant Performance Awards that are intended to qualify as "performance-based compensation" under Section 162(m) of
the Code, as well as Performance Awards that are not intended to qualify as "performance-based compensation" under Section
162(m) of the Code. If the Performance Award is payable in shares of Restricted Stock, such shares shall be transferable to the
Participant only upon attainment of the relevant Performance Goal in accordance with Section 8. If the Performance Award is payable
in cash, it may be paid upon the attainment of the relevant Performance Goals either in cash or in shares of Restricted Stock (based
on the then current Fair Market Value of such shares), as determined by the Committee, in its sole and absolute discretion. Each
Performance Award shall be evidenced by an Award Agreement in such form that is not inconsistent with the Plan and that the Committee
may from time to time approve. With respect to Performance Awards that are intended to qualify as "performance-based compensation"
under Section 162(m) of the Code, the Committee shall condition the right to payment of any Performance Award upon the attainment
of objective Performance Goals established pursuant to Section 10(b)(iii).

 

(b)          Terms
and Conditions. Performance Awards awarded pursuant to this Section 10 shall be subject to the following terms and conditions:

 

(i)          Earning
of Performance Award. At the expiration of the applicable Performance Period, the Committee shall determine the extent to which
the Performance Goals established pursuant to Section 10(b) are achieved and the percentage of each Performance Award that has
been earned.

 

(ii)         Non-Transferability.
Subject to the applicable provisions of the Award Agreement and the Plan, Performance Awards may not be Transferred during the
Performance Period.

 

(iii)        Objective
Performance Goals, Formulae or Standards. With respect to Performance Awards that are intended to qualify as "performance-based
compensation" under Section 162(m) of the Code, the Committee shall establish the objective Performance Goals for the earning
of Performance Awards based on a Performance Period applicable to each Participant or class of Participants in writing prior to
the beginning of the applicable Performance Period or at such later date as permitted under Section 162(m) of the Code and while
the outcome of the Performance Goals are substantially uncertain. Such Performance Goals may incorporate, if and only to the extent
permitted under Section 162(m) of the Code, provisions for disregarding (or adjusting for) the impact of any of the following that
the Committee determines to be appropriate: (i) corporate transactions (including, without limitation, dispositions and acquisitions)
and other similar type events or circumstances, (ii) restructurings, discontinued operations, extraordinary items or events, and
other unusual or non-recurring charges as described in the Corporation's Management Discussion & Analysis, (iii) an event either
not directly related to the operations of the Corporation or any of its Affiliates or not within the reasonable control of the
Corporation's management, (iv) a change in tax law or accounting standards required by generally accepted accounting principles,
or (v) such other exclusions or adjustments as the Committee specifies at the time the Award is granted. To the extent that any
such provision would create impermissible discretion under Section 162(m) of the Code or otherwise violate Section 162(m) of the
Code, such provision shall be of no force or effect, with respect to Performance Awards that are intended to qualify as "performance-based
compensation" under Section 162(m) of the Code.

 

    	15 

      

    

 

(c)          Dividends.
Unless otherwise determined by the Committee in an Award Agreement, amounts equal to dividends declared during the Performance
Period with respect to the number of Shares covered by a Performance Award will not be paid to the Participant. In all cases, such
dividends would not become payable until the expiration of the applicable Performance Period.

 

(d)          Payment.
Following the Committee's determination in accordance with Section 10(b)(i) the Corporation shall settle Performance Awards, in
such form (including, without limitation, in Shares or in cash) as determined by the Committee, in an amount equal to such Participant's
earned Performance Awards. Notwithstanding the foregoing, the Committee may, in its sole discretion, award an amount less than
the earned Performance Awards and/or subject the payment of all or part of any Performance Award to additional vesting, forfeiture
and deferral conditions as it deems appropriate.

 

(e)          Termination.
Subject to the applicable provisions of the Award Agreement and the Plan, upon a Participant's termination of Service for any reason
during the Performance Period for a given Performance Award, the Performance Award in question will vest or be forfeited in accordance
with the terms and conditions established by the Committee at grant.

 

(f)          Accelerated
Vesting. Based on service, performance and/or such other factors or criteria, if any, as the Committee may determine, the Committee
may, at or after grant, due to such service, performance and/or such other factors or criteria relating to the Participant’s
performance to date accelerate on a pro rata basis the vesting of all or any part of any Performance Award.

 

(g)          When
and if Performance Awards become payable, a Participant having received the grant of such units shall be entitled to receive payment
from the Company in settlement of such units in cash, Shares of equivalent value (based on the Fair Market Value), in some combination
thereof, or in any other form determined by the Committee at its sole discretion. With respect to any Canadian Participant, the
Company shall deliver the payout in settlement of any Performance Award to such Canadian Participant by or before December 31 of
the third year following the year of the grant.

 

Section 11.         Other
Stock-Based Awards. The Committee is authorized, subject to limitations under applicable
law, the approval of the TSX and shareholder approval, if required, to grant to Participants such other Awards that may be denominated
or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Shares or factors that may influence
the value of Shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable
into Shares, purchase rights for Shares, Awards with value and payment contingent upon performance of the Corporation or business
units thereof, Shares awarded purely as a bonus and not subject to restrictions or conditions, or any other factors designated
by the Committee. The Committee shall determine the terms and conditions of such Awards. Shares delivered pursuant to an Award
in the nature of a purchase right granted under this Section 11 shall be purchased for such consideration, paid for at such times,
by such methods, and in such forms, including, without limitation, cash, Shares, other Awards, notes, or other property, as the
Committee shall determine. Unless otherwise determined by the Committee in an Award Agreement, the recipient of an Award under
this Section 11 shall not be entitled to receive, currently or on a deferred basis, dividends or Dividend Equivalents in respect
of the number of Shares covered by the Award. In all cases, such dividends or Dividend Equivalents would not become payable until
the expiration of any applicable performance period.

 

    	16 

      

    

 

Section 12.          Effect
of Termination of Service on Awards. The Committee may provide, by rule or regulation or in any Award Agreement, or may determine
in any individual case, the circumstances in which Awards shall be exercised, vested, paid or forfeited in the event a Participant
ceases to provide Service to the Corporation or any Affiliate prior to the end of a performance period or exercise or settlement
of such Award.

 

Section 13.         Change
in Control Provisions.

 

Except
as otherwise provided by the Committee in an Award Agreement:

 

	 	(a)	The
    occurrence of a Change in Control will not result in the vesting of unvested Awards nor the lapse of any Period of Restriction
    pertaining to any Restricted Share or Restricted Share Unit (such Awards collectively referred to as “Unvested Awards”),
    provided that:

 

	 	(i)	such Unvested Awards will continue to vest in accordance with the Plan and the Award Agreement;
	 	 	 
	 	(ii)	the level of achievement of performance goals completed prior to the date of the Change in Control shall be based on the actual performance achieved to the date of the Change in Control and the level of achievement of performance goals for the applicable period completed following the date of the Change in Control shall be based on the assumed achievement of 100% of the performance goals; and
	 	 	 
	 	(iii)	any successor entity agrees to assume the obligations of the Corporation in respect of such Unvested Awards.

 

	 	(b)	For the period of 24 months following a Change in
    Control, where a Participant’s employment or term of office or engagement is terminated for any reason, other than for
    Cause:

 

	 	(i)	any Unvested Awards as at the date of such termination shall be deemed to have vested, and any Period of Restriction shall be deemed to have lapsed, as at the date of such termination and shall become payable as at the date of termination; and
	 	 	 
	 	(ii)	the level of achievement of performance goals for any Unvested Awards that are deemed to have vested pursuant to (i) above, shall be based on the actual performance achieved at the end of the applicable period immediately prior to the date of termination;

 

	 	(c)	With respect to Awards for a U.S. Participant to the extent applicable, the Committee shall have the discretion to unilaterally determine that all outstanding Awards shall be cancelled upon a Change in Control, and that the value of such Awards, as determined by the Committee in accordance with the terms of the Plan and the Award Agreements, shall be paid out in cash in an amount based on the Change in Control Price within a reasonable time subsequent to the Change in Control; provided, however, that no such payment shall be made on account of an ISO using a value higher than the Fair Market Value of the underlying Shares on the date of settlement. For purposes of Section, “Change in Control Price” shall mean the highest price per share paid in any transaction related to a Change in Control of the Corporation.

 

    	17 

      

    

 

	 	(d)	Notwithstanding the above, no cancellation, acceleration
    of vesting, lapsing of restrictions, payment of an Award, cash settlement or other payment shall occur with respect to any
    Award if the Committee reasonably determines in good faith prior to the occurrence of a Change in Control that such Award
    shall be honored or assumed, or new rights substituted therefor (with such honored, assumed or substituted Award hereinafter
    referred to as an “Alternative Award”) by any successor to the Corporation or an Affiliate; provided, however,
    that any such Alternative Award must:

 

	 	(i)	Be based on stock which is traded on the TSX and/or an established U.S. securities market;
	 	 	 
	 	(ii)	Provide such Participant with rights and entitlements substantially equivalent to or better than the rights, terms and conditions applicable under such Award, including, but not limited to, an identical or better exercise or vesting schedule and identical or better timing and methods of payment;
	 	 	 
	 	(iii)	recognize, for the purpose of vesting provisions, the time that the Award has been held prior to the Change in Control;
	 	 	 
	 	(iv)	Have substantially equivalent economic value to such Award (determined prior to the time of the Change in Control); and
	 	 	 
	 	(v)	Have terms and conditions which provide that in the event that the Participant’s employment with the Corporation, an Affiliate or any successor is involuntarily terminated or Constructively Terminated at any time within at least twelve months following a Change in Control, any conditions on a Participant’s rights under, or any restrictions on transfer or exercisability applicable to, each such Alternative Award shall be waived or shall lapse, as the case may be.

 

	 	(e)	In the event that
    any accelerated Award vesting or payment received or to be received by a Participant pursuant to the above (the “Benefit”)
    would (i) constitute a “parachute payment” within the meaning of and subject to Section 280G of the Code and (ii)
    but for this Section, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”),
    then such Benefit shall be reduced to the extent necessary so that no portion of the Benefit will be subject to the Excise
    Tax, as determined in good faith by the Committee; provided, however, that if, in the absence of any such reduction (or after
    such reduction), the Participant believes that the Benefit or any portion thereof (as reduced, if applicable) would be subject
    to the Excise Tax, the Benefit shall be reduced (or further reduced) to the extent determined by the Participant in his or
    her discretion so that the Excise Tax would not apply. To the extent that such Benefit or any portion thereof is subject to
    Section 409A of the Code, then, such Benefit or portion thereof shall be reduced by first reducing or eliminating any payment
    or Benefit payable in cash and then any payment or Benefit not payable in cash, in each case in reverse order beginning with
    payments or Benefits which are to be paid the furthest in time from the date of a Change in Control. If, notwithstanding any
    such reduction (or in the absence of such reduction), the Internal Revenue Service (“IRS”) determines that
    the Participant is liable for the Excise Tax as a result of the Benefit, then the Participant shall be obligated to return
    to the Corporation, within thirty days of such determination by the IRS, a portion of the Benefit sufficient such that none
    of the Benefit retained by the Participant constitutes a “parachute payment” within the meaning of Section 280G
    of the Code that is subject to the Excise Tax. In no event shall the Corporation have any obligation to pay any Excise Tax
    imposed on a Participant or indemnify a Participant therefore.
	 	 	 
	 	(f)	Notwithstanding any other provision of this Plan, this Section shall not apply with respect to any Deferred Stock Units held by a Canadian Participant where such Deferred Stock Units are governed under regulation 6801(d) of the ITA or any successor to such provision.

 

    	18 

      

    

 

Section 14.         General
Provisions Applicable to Awards.

 

(a)          Awards
may be granted for no cash consideration or for such minimal cash consideration as may be required by applicable law.

 

(b)          Awards
may, in the discretion of the Committee, be granted either alone or in addition to or in tandem with any other Award or any award
granted under any other plan of the Corporation. Awards granted in addition to or in tandem with other Awards, or in addition to
or in tandem with awards granted under any other plan of the Corporation, may be granted either at the same time as or at a different
time from the grant of such other Awards or awards.

 

(c)          Subject
to the terms of the Plan, payments or transfers to be made by the Corporation upon the grant, exercise or payment of an Award may
be made in the form of cash, Shares, other securities or other Awards, or any combination thereof, as determined by the Committee
in its discretion at the time of grant, and may be made in a single payment or transfer, in installments, or on a deferred basis,
in each case in accordance with rules and procedures established by the Committee and in compliance with Section 409A of the Code.
Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest (or no
interest) on installment or deferred payments or the grant or crediting of dividend equivalents in respect of installment or deferred
payments.

 

(d)          Except
as may be permitted by the Committee or as specifically provided in an Award Agreement, (i) no Award or other benefit payable under
the Plan shall, except as otherwise specifically provided by law or permitted by the Committee, be Transferable in any manner other
than by will or the law of descent, and any attempt to Transfer any such benefit shall be void, and any such benefit shall not
in any manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of any person who shall be entitled
to such benefit, nor shall it be subject to attachment or legal process for or against such person, and (ii) each Award, and each
right under any Award, shall be exercisable during the Participant's lifetime only by the Participant or, if permissible under
applicable law, by the Participant's guardian or legal representative. The provisions of this paragraph shall not apply to any
Award which has been fully exercised, earned or paid, as the case may be, and shall not preclude forfeiture of an Award in accordance
with the terms thereof.

 

(e)          A
Participant may designate a Beneficiary or change a previous beneficiary designation at such times prescribed by the Committee
by using forms and following procedures approved or accepted by the Committee for that purpose. If no Beneficiary designated by
the Participant is eligible to receive payments or other benefits or exercise rights that are available under the Plan at the Participant's
death, the Beneficiary shall be the Participant's estate.

 

(f)           All
certificates for Shares and/or Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof
shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the
rules, regulations, and other requirements of the Ontario Securities Commission, any stock exchange upon which such Shares or other
securities are then listed, and any applicable Federal or state securities laws, and the Committee may cause a legend or legends
to be put on any such certificates to make appropriate reference to such restrictions.

 

    	19 

      

    

 

(g)          It
is a condition of each grant of an Award that if: (a) the Participant fails to comply with any obligation to the Corporation or
an Affiliate (A) to maintain the confidentiality of information relating to the Corporation or the Affiliate and/or its business,
(B) not engage in employment or business activities that compete with the business of the Corporation or the Affiliate, (C) not
solicit employees or other service providers, customers and/or suppliers of the Corporation or the Affiliate, whether during or
after employment with the Corporation or Affiliate, and whether such obligation is set out in an Award Agreement issued under
the Plan or other agreement between the Participant and the Corporation or Affiliate, including, without limitation, an employment
agreement, or otherwise (collectively, a “Restrictive Covenant”); (b) the Participant is terminated for cause,
or the Board reasonably determines after employment termination that the Participant’s employment could have been terminated
for cause; (c) the Board reasonably determines that the Participant engaged in conduct that causes material financial or reputational
harm to the Corporation or its Affiliates, or engaged in gross negligence, willful misconduct or fraud in respect of the performance
of the Participant’s duties for the Company or an Affiliate; or (d) the Corporation’s financial statements (the “Original
Statements”) are required to be restated (other than as a result of a change in accounting policy by the Corporation
or under International Financial Reporting Standards applicable to the Corporation) and such restated financial statements (the
 “Restated Statements” disclose, in the opinion of the Board, acting reasonably, materially worse financial results
than those contained in the Original Statements, then the Board may, in its sole discretion, to the full extent permitted by governing
law and to the extent it determines that such action is in the best interest of the Corporation, and for a U.S. Participant, in
a manner in accordance with Section 409A of the Code to the extent applicable, and in addition to any other rights that the Corporation
or an Affiliate may have at law or under any agreement, take any or all of the following actions, as applicable): (i) require
the Participant to reimburse the Corporation for any amount paid to the Participant in respect of an Award in cash in excess of
the amount that should otherwise have been paid in respect of such Award had the determination of such compensation been based
upon the Restated Statements in the event clause (d) above is applicable, or that was paid in the twelve (12) months prior to
(x) the date on which the Participant fails to comply with a Restrictive Covenant, (y) the date on which the Participant’s
employment is terminated for cause, or the Board makes a determination under paragraph (b) or (c) above, less, in any event, the
amount of tax withheld pursuant to the ITA or other relevant taxing authority in respect of the amount paid in cash in the year
of payment; (ii) reduce the number or value of, or cancel and terminate, any one or more unvested grants of Options, Restricted
Stock Units, Deferred Stock Units, Performance Awards or SARs on or prior to the applicable maturity or vesting dates, or cancel
or terminate any outstanding Awards which have vested in the twelve (12) months prior to (x) the date on which the Participant
fails to comply with a Restrictive Covenant, (y) the date on which the Participant’s employment is terminated for cause
or the Board makes a determination under paragraph (b) or (c) above, or (z) the date on which the Board determines that the Corporation’s
Original Statements are required to be restated, in the event paragraph (d) above applies (each such date provided for in clause
(x), (y) and (z) of this paragraph (ii) being a “Relevant Equity Recoupment Date”); and/or (iii) require payment
to the Corporation of the value of any Shares of the Corporation acquired by the Participant pursuant to an Award granted in the
twelve (12) months prior to a Relevant Equity Recoupment Date (less any amount paid by the Participant) to acquire such Shares
and less the amount of tax withheld pursuant to the ITA or other relevant taxing authority in respect of such Shares).

 

Section 15.         Amendments
and Termination.

 

(a)          The
Board may amend, alter, suspend, discontinue or terminate the Plan and any outstanding Awards granted hereunder, in whole or in
part, at any time without notice to or approval by the shareholders of the Corporation, for any purpose whatsoever, provided that
all material amendments to the Plan shall require the prior approval of the shareholders of the Corporation and must comply with
the rules of the TSX. Examples of the types of amendments that are not material that the Board is entitled to make without shareholder
approval include, without limitation, the following:

 

(i)          ensuring
continuing compliance with applicable law, the rules of the TSX or other applicable stock exchange rules and regulations or accounting
or tax rules and regulations;

 

    	20 

      

    

 

(ii)         amendments
of a "housekeeping" nature, which include amendments to correct any defect, supply any omission, or reconcile any inconsistency
in the Plan or any Award Agreement in the manner and to the extent it shall deem desirable to carry the Plan into effect;

 

(iii)        changing
the vesting provision of the Plan or any Award (subject to the limitations for Awards subject to Section 10(b));

 

(iv)        waiving
any conditions or rights under any Award (subject to the limitations for Awards subject to Section 10(b));

 

(v)         changing
the termination provisions of any Award that does not entail an extension beyond the original expiration date thereof;

 

(vi)        adding
or amending a cashless exercise provision;

 

(vii)       adding
or amending a financial assistance provision;

 

(viii)      changing
the process by which a Participant who wishes to exercise his or her Award can do so, including the required form of payment for
the Shares being purchased, the form of written notice of exercise provided to the Corporation and the place where such payments
and notices must be delivered; and

 

(ix)        delegating
any or all of the powers of the Committee to administer the Plan to officers of the Corporation.

 

(b)          Notwithstanding
anything contained herein to the contrary, no amendment to the Plan requiring the approval of the shareholders of the Corporation
under any applicable securities laws or requirements shall become effective until such approval is obtained. In addition to the
foregoing, the approval of the holders of a majority of the Shares present and voting in person or by proxy at a meeting of shareholders
shall be required for:

 

(i)          an
increase in the maximum number of Shares that may be made the subject of Awards under the Plan;

 

(ii)         any
adjustment (other than in connection with a stock dividend, recapitalization or other transaction where an adjustment is permitted
or required under Section 5(d)(i) or Section 5(d)(ii)) or amendment that reduces or would have the effect of reducing the exercise
price of an Option or Stock Appreciation Right previously granted under the Plan, whether through amendment, cancellation or replacement
grants, or other means (provided that, in such a case, insiders of the Corporation who benefit from such amendment are not eligible
to vote their Shares in respect of the approval);

 

(iii)        any
amendment which extends the expiry date of any Award, or the Restriction Period, or the Performance Period of any RSU beyond the
original expiry date or Restriction Period or Performance Period;

 

    	21 

      

    

 

(iv)        an
increase in the limits on Awards that may be granted to any Participant under Section 5(c) and Section 5(g);

 

(v)         an
extension of the term of an outstanding Option or Stock Appreciation Right beyond the expiry date thereof;

 

(vi)        permitting
Options granted under the Plan to be Transferrable other than for normal estate settlement purposes; and

 

(vii)       any
amendment to the plan amendment provisions set forth in this Section 15 which is not an amendment within the nature of Section
15(a)(i) or Section 15(a)(ii), unless the change results from application of Section 5(d)(i) or Section 5(d)(ii).

 

Furthermore, except as otherwise permitted
under the Plan, no change to an outstanding Award that will adversely impair the rights of a Participant may be made without the
consent of the Participant except to the extent that such change is required to comply with applicable law, stock exchange rules
and regulations or accounting or tax rules and regulations.

 

Section 16.         Miscellaneous.

 

(a)          The
Plan is intended to constitute an "unfunded" plan for incentive and deferred compensation. With respect to any payment
as to which a Participant has a fixed and vested interest but which are not yet made to a Participant by the Corporation, nothing
contained herein shall give any such Participant any right that is greater than those of a general unsecured creditor of the Corporation.

 

(b)          No
employee, Participant or other person shall have any claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of employees, Participants, or holders or beneficiaries of Awards under the Plan. The terms and conditions
of Awards need not be the same with respect to each recipient. Any Award granted under the Plan shall be a one-time Award which
does not constitute a promise of future grants. The Corporation, in its sole discretion, maintains the right to make available
future grants hereunder.

 

(c)          The
Corporation shall have the right to deduct from any payment to be made pursuant to the Plan, or to otherwise require, prior to
the issuance or delivery of Shares or the payment of any cash hereunder, payment by the Participant of, any federal, provincial,
state or local taxes required by law to be withheld. Upon the vesting of Restricted Stock (or other Award that is taxable upon
vesting), or upon making an election under Section 83(b) of the Code, a Participant shall pay all required withholding to the Corporation.
Any statutorily required withholding obligation with regard to any Participant may be satisfied, subject to the consent of the
Committee, by reducing the number of Shares otherwise deliverable or by delivering Shares already owned. Any fraction of a Share
required to satisfy such tax obligations shall be disregarded and the amount due shall be paid instead in cash by the Participant.

 

(d)          Nothing
contained in the Plan shall prevent the Corporation from adopting or continuing in effect other or additional compensation arrangements,
and such arrangements may be either generally applicable or applicable only in specific cases.

 

    	22 

      

    

 

(e)          The
grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of, or to continue to provide
services to, the Corporation or any Affiliate. Further, the Corporation or the applicable Affiliate may at any time dismiss a Participant,
free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement
or in any other agreement binding the parties. The receipt of any Award under the Plan is not intended to confer any rights on
the receiving Participant except as set forth in such Award.

 

(f)           If
any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction,
or as to any person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force
and effect.

 

(g)          Neither
the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship
between the Corporation and a Participant or any other person. To the extent that any person acquires a right to receive payments
from the Corporation pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the
Corporation.

 

(h)          No
fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash
or other securities shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights
thereto shall be canceled, terminated or otherwise eliminated.

 

(i)           No
Award or other benefit payable under the Plan shall, except as otherwise specifically provided by law or permitted by the Committee,
be Transferable in any manner, and any attempt to Transfer any such benefit shall be void, and any such benefit shall not in any
manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of any person who shall be entitled
to such benefit, nor shall it be subject to attachment or legal process for or against such person.

 

(j)           Unless
otherwise determined by the Committee, as long as the Shares are listed on a national securities exchange including the TSX or
system sponsored by a national securities association, the issuance of Shares pursuant to an Award shall be conditioned upon such
shares being listed on such exchange or system. The Corporation shall have no obligation to issue such Shares unless and until
such Shares are so listed, and the right to exercise any Option or other Award with respect to such Shares shall be suspended until
such listing has been effected. If at any time counsel to the Corporation shall be of the opinion that any sale or delivery of
Shares pursuant to an Option or other Award is or may in the circumstances be unlawful or result in the imposition of excise taxes
on the Corporation under the statutes, rules or regulations of any applicable jurisdiction, the Corporation shall have no obligation
to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration with respect
to Shares or Awards, and the right to exercise any Option or other Award shall be suspended until, in the opinion of said counsel,
such sale or delivery shall be lawful or will not result in the imposition of excise taxes on the Corporation. A Participant shall
be required to supply the Corporation with certificates, representations and information that the Corporation requests and otherwise
cooperate with the Corporation in obtaining any listing, registration, qualification, exemption, consent or approval the Corporation
deems necessary or appropriate.

 

    	23 

      

    

 

(k)          No
Award granted or paid out under the Plan shall be deemed compensation for purposes of computing benefits under any retirement plan
of the Corporation or its Affiliates nor affect any benefit under any other benefit plan now or subsequently in effect under which
the availability or amount of benefits is related to the level of compensation. The provisions of Awards need not be the same with
respect to each Participant, and such Awards to individual Participants need not be the same in subsequent years.

 

(l)           The
Plan shall be binding on all successors and permitted assigns of a Participant, including, without limitation, the estate of such
Participant and the executor, administrator or trustee of such estate. Any benefit payable to or for the benefit of a minor, an
incompetent person or other person incapable of receipt thereof shall be deemed paid when paid to such person's guardian or to
the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the
Committee, the Board, the Corporation, its Affiliates and their employees, agents and representatives with respect thereto.

 

Section 17.         Effective
Date of the Plan. The Plan shall be effective as of the Effective Date, which is the date of adoption by the Board, subject
to the approval of the Plan by the shareholders of the Corporation in accordance with the requirements of the laws of the Province
of Ontario.

 

Section 18.          Term
of the Plan. No Award shall be granted under the Plan after ten years from the Effective Date. However, unless otherwise expressly
provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond such date, and the authority
of the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award, or to waive any conditions or rights
under any such Award, and the authority of the Board to amend the Plan, shall extend beyond such date.

 

Section 19.         Section
409A of the Code.

 

(a)          The
Plan is intended to comply with the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted
in accordance with such intent. To the extent that any Award is subject to Section 409A of the Code, it shall be paid in a manner
that will comply with Section 409A of the Code, including proposed, temporary or final regulations or any other guidance issued
by the Secretary of the Treasury and the Internal Revenue Service with respect thereto. Notwithstanding anything herein to the
contrary, any provision in the Plan that is inconsistent with Section 409A of the Code shall be deemed to be amended to comply
with Section 409A of the Code and to the extent such provision cannot be amended to comply therewith, such provision shall be null
and void. The Corporation shall have no liability to a Participant, or any other party, if an Award that is intended to be exempt
from, or compliant with, Section 409A of the Code is not so exempt or compliant or for any action taken by the Committee or the
Corporation and, in the event that any amount or benefit under the Plan becomes subject to penalties under Section 409A of the
Code, responsibility for payment of such penalties shall rest solely with the affected Participants and not with the Corporation.
Notwithstanding any contrary provision in the Plan or Award Agreement, any payment(s) of "nonqualified deferred compensation"
(within the meaning of Section 409A of the Code) that are otherwise required to be made under the Plan to a "specified employee"
(as defined under Section 409A of the Code) as a result of such employee's separation from service (other than a payment that is
not subject to Section 409A of the Code) shall be delayed for the first six (6) months following such separation from service (or,
if earlier, the date of death of the specified employee) and shall instead be paid (in a manner set forth in the Award Agreement)
upon expiration of such delay period.

 

    	24 

      

    

 

(b)          Notwithstanding
the foregoing, the Corporation does not make any representation to any Participant or Beneficiary as to the tax consequences of
any Awards made pursuant to this Plan, and the Corporation shall have no liability or other obligation to indemnify or hold harmless
the Participant or any Beneficiary for any tax, additional tax, interest or penalties that the Participant or any Beneficiary may
incur as a result of the grant, vesting, exercise or settlement of an Award under this Plan.

 

Section 20.          Governing
Law. This Plan shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada
applicable in the Province of Ontario.

 

Section 21.          TSX
Requirements. The number of Shares issuable to Insiders, at any time, under all Security Based Compensation Arrangements of
the Corporation, may not exceed 10% of the Corporation's issued and outstanding Shares; and the number of Shares issued to Insiders
within any one-year period, under all Security Based Compensation Arrangements of the Corporation, may not exceed 10% of the Corporation's
issued and outstanding Shares. For the purpose of this Section 21, "Insider" shall mean any "reporting insiders"
as defined in National Instrument 55-104 – Insider Reporting Requirements, and "Security Based Compensation Arrangement"
shall mean any (i) any stock option plans for the benefit of employees, insiders, service providers or any one of such groups;
(ii) individual stock options granted to employees, service providers or insiders if not granted pursuant to a plan previously
approved by the Corporation's security holders; (iii) share purchase plans where the Corporation provides financial assistance
or where the Corporation matches the whole or a portion of the securities being purchased; (iv) stock appreciation rights involving
issuances of securities from treasury; any other compensation or incentive mechanism involving the issuance or potential issuances
of securities of the Corporation; and (vi) security purchases from treasury by an employee, insider or service provider which is
financially assisted by the Corporation by any means whatsoever.

 

    	25Document

LCI Industries
2019 Annual Incentive Program
															
					
					

Establishment and Effective Date
The 2019 Annual Incentive Program (the “Program”) is hereby established to provide for the grant of Annual Cash Incentive Awards under the LCI Industries 2018 Omnibus Incentive Plan (the “Plan”). The Program shall be deemed effective as of January 1, 2019. The Program shall operate on the basis of a program year that begins on January 1, 2019 and ends on December 31, 2019 (“Program Year”). Payout will be based on Program Year performance results, except as otherwise provided herein.

Purpose
The purpose of the Program is to provide annual incentive compensation to:

•Recognize the performance of key employees in achieving LCI Industries’ (“LCII”) and its key subsidiaries’ (collectively referred to as the “Company”) financial and operating objectives; and
•Focus key executives on assisting the Company in achieving objectives key to its success.

Payouts for Program participants will be determined based on the Program provisions and the results of Company performance measurements, subject to adjustment (to the extent that any such adjustment is consistent with the terms and conditions of the Program and/or the Plan) by the Compensation Committee of LCII’s Board of Directors (the “Committee”).

Eligibility
Eligibility for Program participation will be limited to employees who are employed in executive positions that have ultimate responsibility for the financial and operating performance of the Company. However, employees who participate in another short-term Company incentive plan (other than a plan that compensates the employee on a commission basis) are not eligible to participate in this Program with respect to the portion of the Program Year that is also covered under such other plan. Names of approved Program participants are identified in the Program Appendix.

Any employee who first becomes eligible and is added to the Program after the start of the Program Year will be eligible to participate with respect to that Program Year, but prorated to reflect the period of the Program Year for which the employee was employed in an eligible classification.

Except as provided in the Employment Termination section below, employees must be actively employed through December 31, 2019 to be eligible for a payout under the Program with respect to the Program Year. Except as provided herein, those who are not actively employed through December 31, 2019 for reasons other than disability, approved leave of absence, or death will not be eligible to receive a payout under the Program. An employee does not earn a right to a Program payment (whether on a pro rata basis or otherwise) based upon length of service or mere completion of service during the Program Year. Rather, a payout is earned based upon the achievement by the Company of pre-determined performance goals measured over the course of the entire Program Year as a result of the efforts of eligible employees who contribute toward achievement of such goals. An employee’s participation in the Program, and the opportunity to earn a payout in accordance with the terms and conditions of the Program, does not represent an unequivocal promise on the part of the Company to pay incentive compensation other than to the extent that applicable performance goals have been satisfied, the employee satisfies the eligibility conditions specified herein, and the Committee has authorized a payout to the employee after completion of the Program Year.

Employment Termination

Termination of employment at any time during the Program Year will disqualify the participant from receiving a payout under the Program, except as provided below:

If the participant’s employment is terminated at any time during the Program Year (1) by the Company without cause, or (2) by the participant for good reason, the participant will receive a payout of any award that has otherwise been earned and approved by the Committee, but prorated to reflect the period of the Program Year for which the participant was employed.

Absence from active employment during the Program Year on account of disability or approved unpaid leave of absence will not disqualify the participant from receiving a payout of any award that has otherwise been earned and approved by the Committee.

Similarly, if termination of employment occurs during the Program Year due to death, the participant will receive a payout of any award that has otherwise been earned and approved by the Committee.

The word “cause” means participant’s (a) willful and continued failure to follow the Company’s reasonable direction or to perform any duties reasonably required of participant (other than any such failure resulting from his disability or from termination by participant for good reason, if applicable), after written demand for substantial performance is delivered to participant specifying in reasonable detail the manner in which participant has not performed, and participant has not remedied such failure within 30 days after notice thereof, (b) material violation of, or failure to act upon or report known or suspected violations of, the Company’s Guidelines for Business Conduct, as amended from time to time, (c) conviction of, or a plea of nolo contendere with respect to, any felony, (d) commission of any criminal, fraudulent, or dishonest act in connection with participant’s employment, (e) material breach of participant’s employment agreement which, if capable of remedy, continues for a period of 30 days without remedy thereof by participant after notice thereof, or two or more such breaches in any two month period, or (f) one or more instances of willful misconduct or gross negligence that, individually or in the aggregate, is materially detrimental to the Company’s interests.

The word “good reason” shall have the meaning set forth in the participant’s employment agreement with Lippert Components, Inc.

The word “disability” means the participant’s active service has been terminated as a result of physical or mental disability that renders the participant incapable of performing the essential functions of the participant’s job, with or without reasonable accommodation, and which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, as determined in good faith by the Company.

In all cases, eligibility for any earned payout is based upon the employee’s being employed during the Program Year in an eligible classification.

Any approved Program payout to or on behalf of a participant who was terminated by the Company without cause during the Program Year or who terminated employment during the Program Year for good reason or on account of disability or death, or who is absent from active service on account of disability or an approved unpaid leave of absence, will be paid at the same time as payment is made to active employees whose employment with the Company has continued. In the event of a participant’s death, any approved Program payout will be distributed at such time in a lump sum to the participant’s estate.  In order to receive any approved Program payout following termination by the Company without cause or by the participant for good reason, or on account of disability, the participant must timely sign and not revoke a separation agreement and release of claims in a form acceptable to and determined by the Company in its sole discretion. 

Program Performance Measures
The Program design includes financial measures that are approved by the Committee. Measurement of performance levels will be monitored throughout the Program Year. Following the end of the Program Year, results will be presented to the Committee for approval. 

The following provides a general description of each of the financial performance measures for the Program Year. Measures reflect operations of the Company and will apply to the Program participants as indicated in the Program Appendix.

Financial Measures
For the purposes of the Program:

Revenue shall mean the Company’s 2019 consolidated net sales, as adjusted by the Committee for events that are unusual in nature or infrequently occurring, including without limitation a change in control, acquisitions, divestitures, restructuring activities, or asset write-downs, or for changes in applicable tax laws or accounting principles. 

Adjusted EBIT shall mean the Company’s 2019 consolidated net income before interest and taxes, as adjusted by the Committee for events that are unusual in nature or infrequently occurring, including without limitation a change in control, acquisitions, divestitures, restructuring activities, or asset write-downs, or for changes in applicable tax laws or accounting principles.

Program Payouts
Following the close of the Program Year and after the audited financial results are available, the Committee will determine and certify the extent to which the performance measures have been satisfied and will authorize Program payouts. Payouts, less tax withholdings and other required or authorized deductions, will be paid no later than March 15, 2020. 

Any Program payout is subject to any recoupment or clawback policy that may be adopted by the Company from time to time and to any requirement of applicable law, regulation, or listing standard that requires the Company to recoup or claw back compensation paid pursuant to the Program.

Relationship to Other Company Plans
Employees who participate in another short-term incentive plan (other than a plan that compensates the employee on a commission basis) are not eligible to participate in this Program until the time their participation in the other short-term incentive plan terminates.

Rights of Participants and Forfeiture
Nothing in this Program shall:

•Confer upon any employee any right with respect to continuation of employment with the Company;

•Interfere in any way with the right of the Company to terminate his/her employment at any time; or

•Confer upon any employee or any other person any claim or right to any distribution under the Program except to the extent that a payment has been earned based upon the achievement of the measures applicable to the employee, the employee otherwise satisfies the eligibility requirements of the Program, and the Committee has authorized the payment of a payout to the employee.

No right or interest of any employee in the Program shall, prior to actual payment or distribution to the employee, be assignable or transferable in whole or in part, either voluntarily or by operation of law or otherwise, or be subject to payment of debts of any employee by execution, levy, garnishment, attachment, pledge, bankruptcy, or in any other manner.

Notwithstanding any provision of this Program to the contrary, no Program payout shall be made to any participant if he or she has engaged in any “detrimental activity” (as hereinafter defined) at any time prior to or during the six months after the Program payout has been delivered to him or her.  In such event, the 

entire Program payout may be rescinded by the Company within one (1) year after the Company becomes aware of such detrimental activity, and the Company shall notify the participant in writing of any such rescission within such one-year period.  Within ten (10) days after receiving such notice of rescission, the participant shall pay to the Company the entire amount of the Program payout previously paid to him or her, in such manner and on such terms and conditions as may be required by the Company.

The word “detrimental activity” means (i) the unauthorized rendering of services for any organization or engaging, directly or indirectly, in any business which is competitive with the business of the Company; (ii) the disclosure to any person or entity outside the Company, or use in other than the Company’s business, without prior written authorization from the Company, of any “confidential information,” as hereinafter defined or material relating to the business of the Company; (iii) activity that results in termination of the participant’s employment by the Company for cause; or (iv) any other conduct or act reasonably determined by the Company to be injurious, detrimental, or prejudicial to any interest of the Company.

The words “confidential information” include any business, financial, and other sensitive, confidential, proprietary, and trade secret information which is of unique value to the Company. Examples of confidential information include: inventions, improvements, and designs; new product or marketing plans; business strategies and plans; merger and acquisition targets; financial and pricing information; computer programs, source codes, models, and databases; analytical models; human resources strategies; customer lists and information; supplier and vendor lists; and other information which is not generally available to the public.

Administration
The Committee is responsible for the establishment of the Program, and the Committee (or the LCII Board of Directors) has the right to amend or terminate the Program at any time, as it deems appropriate. Further, the Committee is authorized to: (1) interpret and apply the Program’s terms and conditions; (2) determine who will participate in the Program and the level of participation; (3) approve the performance measures under the Program; and (4) approve payments for participants covered by the Program. The Committee will report to the Board substantive actions taken.

This Program shall not be terminated, voluntarily or involuntarily, by the liquidation or dissolution of LCII or by the merger or consolidation of LCII with or into another corporation.  Any successor to LCII will be deemed to be the Company under this Program.

If any provision of this Program, or any portion thereof, shall be held to be illegal, invalid, or unenforceable, the remainder of the Program or such provision shall not thereby be affected and shall be given full force and effect, without regard to the invalid portion.

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