Document:

Exhibit
10.38

 

Final 

 

PROMIS
NEUROSCIENCES INC.

 

STOCK
OPTION PLAN

 

     

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Article 1

 

PURPOSE
AND INTERPRETATION

 

Purpose

 

1.1       The
purpose of the Plan is to provide the Corporation with a equity-related mechanism to attract, retain and motivate Directors, Officers,
Employees and Consultants and create incentives for such individuals to contribute toward the long term goals of the Corporation.

 

Definitions

 

1.2       In
the Plan

 

Affiliate
means a company that is a parent or subsidiary of the Corporation, or that is controlled by the same entity as the Corporation;

 

Associate
has the meaning assigned by the Securities Act;

 

Blackout
Period means the period during which the relevant Optionee is prohibited from exercising an Option due to trading restrictions
imposed by the Corporation in accordance with its securities trading policies governing trades by Directors, Officers and Employees in
the Corporation’s securities;

 

Board
means the board of directors of the Corporation;

 

Change
of Control means an occurrence when a Person, other than the current "control person" of the Corporation (as that
term is defined in the Securities Act), becomes a "control person" of the Corporation;

 

Close
Person means the spouse or other family member of an Optionee;

 

Common
Shares means common shares without par value in the capital of the Corporation;

 

Consultant
means an individual, other than an Employee, Officer or Director that:

 

(i)       provides
on an ongoing bona fide basis, consulting, technical, managerial or like services to the Corporation or an Affiliate of the
Corporation, other than services provided in relation to a "distribution" (as that term is described in the Securities
Act);

 

(ii)       provides
the services under a written contract between the Corporation or an Affiliate and the Person or the Consultant Company;

 

     

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(iii)      in
the reasonable opinion of the Corporation, spends or will spend a significant amount of time and attention on the business and affairs
of the Corporation or an Affiliate of the Corporation; and

 

(iv)     has
a relationship with the Corporation or an Affiliate that enables the Person or Consultant Company to be knowledgeable about the business
and affairs of the Corporation;

 

Consultant
Company means for an individual consultant, a company or partnership of which the Person is an employee, shareholder or partner;

 

Corporation
means ProMIS Neurosciences Inc.;

 

Directors
means the directors of the Corporation as may be elected from time to time;

 

Disability
means a medically determinable physical or mental impairment expected to result in death or to last for a continuous period of not less
than 6 months, and which causes an individual to be unable to engage in any substantial gainful activity, or any other condition of impairment
that the Board, acting reasonably, determines constitutes a disability;

 

Employee
means:

 

(i)       a
Person who is considered an employee under the Income Tax Act (Canada) (i.e. for whom income tax, employment insurance and CPP
deductions must be made at source);

 

(ii)      a
Person who works full-time for the Corporation or any Affiliate providing services normally provided by an employee and who is subject
to the same control and direction by the Corporation over the details and methods of work as an employee of the Corporation, but for whom
income tax deductions are not made at source; or

 

(iii)     a
Person who works for the Corporation or any Affiliate on a continuing and regular basis for a minimum amount of time per week providing
services normally provided by an employee and who is subject to the same control and direction by the Corporation over the details and
methods of work as an employee of the Corporation, but for whom income tax deductions need not be made at source;

 

     

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Expiry
Date means the day on which an Option lapses as specified in the Option Commitment therefor;

 

Former
Option Plan means the Corporation’s stock option plan made effective September 21, 2005;

 

Independent
means independent as defined under Section 1.4 of National Instrument 52-110 Audit Committees;

 

Insider
means an insider as defined in the TSX Policies;

 

Investor
Relations Activities means generally any activities or communications that can reasonably be seen to be intended to or be primarily
intended to promote the merits or awareness of or the purchase or sale of securities of the Corporation;

 

Market
Price means the 5-day volume weighted average trading price as calculated in accordance with the TSX Policies;

 

Officer
means a duly appointed senior officer of the Corporation;

 

Option
means the right to purchase Common Shares granted hereunder to a Service Provider;

 

Option
Commitment means the notice of grant of an Option delivered by the Corporation hereunder to a Service Provider and substantially
in the form of Schedule A hereto;

 

Option
Effective Date for an Option means the date of grant thereof;

 

Optioned
Shares means Common Shares subject to an Option;

 

Optionee
means an individual to whom an Option is granted by the Corporation under the Plan;

 

Outstanding
Issue means the number of Common Shares outstanding on a non-diluted basis;

 

Person
means a company or an individual;

 

Plan
means this Share Option Plan, as may be amended from time to time;

 

     

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Plan
Shares means the total number of Common Shares which may be reserved for issuance as Optioned Shares under the Plan as provided
in §2.4

 

Regulatory
Approval means the approval of the TSX and any other securities regulatory agency that may have jurisdiction in the circumstances;

 

Reserved
for Issuance refers to Common Shares that may be issued in the future upon the exercise of stock options which have been granted;

 

Securities
Act means the Securities Act, R.S.O. 1990, c. S.5, as amended from time to time;

 

Service
Provider means a Person who is a bona fide Director, Officer, Employee or Consultant, and also includes a company, of which
100% of the share capital is beneficially owned by one or more Service Providers;

 

Share
Compensation Arrangement means the Plan described herein and any other stock option, stock option plan, employee stock purchase
plan or any other compensation or incentive mechanism involving the issuance or potential issuance of shares to one or more Service Providers,
including a share purchase from treasury which is financially assisted by the Corporation by way of a loan, guaranty or otherwise;

 

Subscription
Price means the amount payable per Common Share on the exercise of an Option, as determined in accordance with §3.1;

 

Triggering
Event means the occurrence of one or more of the following:

 

(i)       a
Change of Control of the Corporation;

 

(ii)      a
proposed merger, amalgamation, arrangement or reorganization of the Corporation with one or more corporations that is approved by the
Board; or

 

(iii)     a
take-over bid as that term is defined in the Securities Act but excluding an exempt take over bid as determined under the Securities Act;

 

TSX
means the Toronto Stock Exchange and any successor thereto; and

 

TSX
Policies means the rules and policies of the TSX as amended from time to time.

 

Article 2

 

SHARE
OPTION PLAN

 

Establishment of Share Option Plan and Termination
of Former Option Plan

 

2.1       This
Share Option Plan is hereby established to recognize contributions made by Service Providers and to create an incentive for their
continuing relationship with the Corporation and its Affiliates. The Plan replaces and supersedes the Former Option Plan. Those
share options granted under the Former Option Plan by the Corporation prior to the adoption of this Plan are included hereunder.
Notwithstanding the foregoing, options granted under the Former Option Plan are not affected by this Plan to the extent that the
terms of the Plan would materially decrease the rights or benefits accruing to such optionee or materially increase the obligations
of such optionee.

 

Eligibility

 

2.2       Options
may be granted hereunder to all Service Providers.

 

     

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Options Granted Under the Plan

 

2.3       Subject
to specific variations approved by the Board, all terms and conditions set out herein will be incorporated into and form part of an Option
granted hereunder.

 

Maximum Plan Shares

 

2.4      The
maximum aggregate number of Plan Shares that may be Reserved for Issuance under the Plan at any point in time is 20% of the Outstanding
Issue at the time Plan Shares are Reserved for Issuance as a result of the grant of an Option, less any Common Shares reserved for issuance
under share options granted under Share Compensation Arrangements other than this Plan, unless the Plan is amended pursuant to TSX Policies.

 

2.5       In
no event may the number of Common Shares Reserved for Issuance to any one person pursuant to an Option exceed 5% of the Outstanding Issue.

 

Shares Not Acquired

 

2.6       Any
Common Shares not acquired under an Option granted under the Plan which has expired or been cancelled or terminated may be made the subject
of a further Option pursuant to the provisions of the Plan. For greater certainty options which are exercised thereupon increase the number
available to the Plan by the relevant percentage of outstanding shares as provided hereunder.

 

Powers of the Board

 

2.7       The
Board will be responsible for the general administration of the Plan and the proper execution of its provisions, the interpretation of
the Plan and the determination of all questions arising hereunder. Without limiting the generality of the foregoing, the Board has the
power to

 

		(a)	allot Common Shares for issuance in connection with Options granted under the Plan,

 

		(b)	grant Options hereunder,

 

		(c)	subject to §4.5, 4.6, and 4.7 and subject to Regulatory Approval or any shareholder approval required
under law, amend, suspend, terminate or discontinue the Plan, or revoke or alter any action taken in connection therewith, except that
no amendment or suspension of the Plan will, without
the written consent of the affected Optionees, alter or impair any Option granted under the Plan, and

 

		(d)	delegate all or such portion of its powers hereunder as it may determine to one or more committees of
the Board, either indefinitely or for such period of time as it may specify, and thereafter each such committee may exercise the powers
and discharge the duties of the Board in respect of the Plan so delegated to the same extent as the Board is hereby authorized so to do.

 

     

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Adjustments

 

2.8       The
number of Common Shares subject to an Option will be subject to adjustment in the events and in the manner following:

 

		(a)	in the event that the Board determines that any dividend or other distribution (whether in the form of
cash, Common Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, combination, issuance of warrants or other rights to purchase Common Shares or other securities of the Corporation to all
holders of common shares pro rata whether as a dividend or otherwise or other similar corporate transaction or event affects the
Common Shares such that an adjustment is determined by the Board to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan, then the Board will, in such manner as it may deem equitable,
adjust any or all of:

 

		(i)	the number and type of Common Shares (or other securities or other property) that thereafter may be made
the subject of Options,

 

		(ii)	the number and type of Common Shares (or other securities or other property) subject to outstanding Options,
and

 

		(iii)	the purchase or exercise price with respect to any Option;

 

provided, however, that the number of
Common Shares covered by any Option or to which such Option relates will always be a whole number,

 

		(b)	an adjustment will take effect at the time of the event giving rise to the adjustment, and the adjustments
provided for in this Section are cumulative,

 

		(c)	the Corporation will not be required to issue fractional shares in satisfaction of its obligations hereunder.
Any fractional interest in a Common Share that would, except for the provisions of this §2.8(c), be deliverable upon the exercise
of an Option will be cancelled and not be deliverable by the Corporation, and

 

		(d)	if any questions arise at any time with respect to the Option price or number of Common Shares deliverable
upon exercise of an Option in any of the events set out in this §2.8(d), such questions will be conclusively determined by the Corporation’s
Auditors, or, if they decline to so act, any other firm of Chartered Accountants, in Toronto, Ontario that the Corporation may designate
and who will have access to all appropriate records and such determination will be binding upon the Corporation and all Optionees.

 

     

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Article 3

 

SHARE
OPTIONS

 

Subscription Price

 

3.1       The
Subscription Price of an Option will be set by the Board at the time such Option is allocated under the Plan, and cannot be less than
the Market Price, calculated on the day before the grant.

 

Term of Option

 

3.2       Except
as described in this §3.2, the term of an Option will be such period after the Option Effective Date of the Option, not exceeding
10 years, as the Board determines at the time of granting of the Option. If the Expiry Date for an Option occurs during a Blackout Period
applicable to the relevant Optionee, or within five business days after the expiry of a Blackout Period applicable to the relevant Optionee,
then the Expiry Date for that Option will be the date that is the tenth business day after the expiry date of the Blackout Period.

 

Vesting of Options

 

3.3       Vesting
of Options is at the discretion of the Board, and will generally be subject to:

 

(a)    the
Service Provider remaining employed by or continuing to provide services to the Corporation or any of its Affiliates as well as, at the
discretion of the Board, achieving certain milestones which may be defined by the Board from time to time or receiving a satisfactory
performance review by the Corporation or any Affiliate during the vesting period; or

 

(b)    remaining
as a Director of the Corporation or any of its Affiliates during the vesting period.

 

3.4       In
the event of a Triggering Event, in its discretion the Board may:

 

(a)    provide
in the case of a particular Optionee that the Options held by that Optionee may be exercised by the Optionee in full or in part at any
time before the applicable vesting period for those Options; and

 

(b)    cause
all or a portion of any of the Options granted under the Plan to be exchanged for incentive stock options of another corporation upon
the occurrence of a Triggering Event in such ratio and at such exercise price as the Board deems appropriate, acting reasonably.

 

     

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Limitation on Right to Exercise

 

3.5            No
Option may be exercised after the Optionee, if a Director has ceased to be a Director or if an Employee or other Service Provider has
left the employ or service of the Corporation, except as follows:

 

		(a)	in the case of death of an Optionee, all unvested rights of the Optionee under the Option will be deemed
to have become fully vested immediately before the time of such Optionee's death, and the personal representatives of the Optionee will
be entitled to exercise the Option at any time by the earlier of (i) the Expiry Date of the Option, and (ii) the first anniversary
of the date on which the Optionee died;

 

		(b)	in the case of an Optionee becoming unable to work due to Disability whether or not such Optionee is entitled
to or in receipt of disability benefits, all unvested rights of the Optionee under the Option will be deemed to have become fully vested
immediately before the time of such Optionee's termination and the Options will be exercisable by such Optionee or by the personal representative
designated by the Optionee on or before the date which is the earlier of one year following the termination of employment, engagement
or appointment as a director or officer and the applicable Expiry Date;

 

		(c)	in the case of an Optionee that is not an Independent Director of the Corporation resigning his office,
or terminating his employment or service, or being dismissed without cause, the option rights that have accrued to such Optionee up to
the time of termination will be exercisable within the six months after the date of termination

 

		(d)	in the case of an Optionee that is an Independent Director of the Corporation resigning his office, or
terminating his employment or service, or being dismissed without cause, the option rights that have accrued to such Optionee up to the
time of termination will be exercisable within one year after the date of termination; and

 

		(e)	in the case of an Optionee being dismissed from office, employment or service for cause, the Option and
all option rights that had accrued to the Optionee to the date of termination will immediately terminate;

 

but provided that in no event may the term of
the Option exceed 10 years. Notwithstanding the provisions of §3.5(c), in its discretion and subject to the receipt of any required
Regulatory Approval, the Board may extend the time period for exercise of an Option in the circumstances set out in §3.5(c) and
may also permit the option to be exercised in respect of any Options that vest during any agreed upon severance period.

 

     

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Limited Right to Assign

 

3.6       Unless
approved by the TSX and the Board, an Option may be exercisable only by the Optionee to whom it is granted and will not be assignable
except as follows:

 

(a)    to
a Close Person or a Person controlled by the Optionee;

 

(b)    to
the Optionee’s or a Close Person’s Registered Retirement Savings Plan or Registered Retirement Income Fund or to a trustee,
custodian or administrator acting on behalf of, or for the benefit of, the Optionee or a Close Person;

 

(c)    for
estate planning or estate settlement purposes; and

 

(d)    as
contemplated by §3.5(a) and §3.5(b).

 

Option Commitment

 

3.7       Upon
grant of an Option hereunder, the Chief Financial Officer of the Corporation will deliver to the Service Provider an Option Commitment
detailing the terms of his Option and upon such delivery the Service Provider will be an Optionee in the Plan and have the right to purchase
the Optioned Shares at the Subscription Price set out therein.

 

Manner of Exercise

 

3.8       An
Optionee who wishes to exercise his Option may do so by delivering

 

		(a)	a written notice to the Corporation specifying the number of Optioned Shares being acquired pursuant to
the Option, and

 

		(b)	cash or bank draft or a certified cheque payable to the Corporation for the aggregate Subscription Price
for the Optioned Shares being acquired.

 

Delivery of Certificate

 

3.9       Not
later than five days after receipt of the notice of exercise and payment in full for the Optioned Shares being acquired, the Corporation
will direct its transfer agent to issue a certificate to the Optionee for the appropriate number of Optioned Shares.

 

Article 4

 

GENERAL

 

Transferability

 

4.1       The
benefits, rights and options accruing to any Optionee under the Plan will not be transferable by an Optionee other than in the manner
provided for in the Plan. During the lifetime of an Optionee, all benefits, rights and options may only be exercised by the Optionee or
by his guardian or legal representative.

 

     

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Employment and Services

 

4.2       Nothing
contained in the Plan will confer upon any Optionee any right with respect to employment or provision of services with the Corporation
or an Affiliate, or interfere in any way with the right of the Corporation or an Affiliate to terminate the Optionee’s employment
or service at any time. Participation in the Plan by an Optionee will be voluntary.

 

No Representation or Warranty

 

4.3       The
Corporation makes no representation or warranty as to the future market value of Common Shares issued in accordance with the provisions
of the Plan or to the effect of the Income Tax Act (Canada) or any other taxing statute governing the Options or the Common shares
issuable thereunder or the tax consequences to a Service Provider. Compliance with applicable securities laws as to the disclosure and
resale obligations of each Optionee is the responsibility of such Optionee and not the Corporation.

 

Interpretation

 

4.4       The
Plan will be governed and construed in accordance with the laws of the Province of Ontario.

 

Amendment of the Plan

 

4.5       Subject
to any specific limitations contained in the Plan, the Board reserves the right, in its absolute discretion, to at any time amend, modify
or terminate the Plan.

 

4.6       Notwithstanding
 §4.5, the Board may not, without approval of the holders of a majority of the issued and outstanding equity securities of the Corporation
present and voting in person or by proxy at a meeting of holders of such securities, amend the Plan or an Option to:

 

		(a)	increase the number of Common Shares reserved for issuance under the Plan;

 

		(b)	make any amendment that would reduce the Subscription Price of an outstanding Option granted to an Insider
(including a cancellation and reissue of an Option to an Insider at a reduced Subscription Price);

 

		(c)	amend or delete §3.2 to extend the term of any Option beyond the Expiry Date of the Option or, except
as already contemplated under §3.2, allow for the Expiry Date of an Option to be greater than 10 years;

 

		(d)	permit assignments, or exercises other than by the Optionee, of Options beyond that contemplated by §3.5,
except for an amendment that would permit the assignment of an Option for estate planning or estate settlement purposes; and

 

		(e)	amend the Plan to provide for other types of compensation through equity issuance, unless the change to
the Plan or an Option results from the application of §2.8.

 

     

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4.7       Without
limiting the generality of §4.5, the Board may make the following amendments to the Plan without obtaining shareholder approval:

 

		(a)	amendments to the terms and conditions of the Plan necessary to ensure that the Plan complies with the
applicable regulatory requirements, including without limitation the TSX Policies or the rules of any national securities exchange
or system on which the Common Shares are then listed or reported, or by any regulatory body having jurisdiction with respect thereto;

 

		(b)	making adjustments to outstanding Options in the event of certain corporate transactions;

 

		(c)	the addition of a cashless exercise feature, payable in cash or securities, whether or not such feature
provides for a full deduction of the number of underlying securities from the Plan reserve;

 

		(d)	a change to the termination provisions of an Option or the Plan which does not entail an extension beyond
the original Expiry Date;

 

		(e)	amendments to the provisions of the Plan respecting administration of the Plan and eligibility for participation
under the Plan;

 

		(f)	amendments to the provisions of the Plan respecting the terms and conditions on which options may be granted
pursuant to the Plan, including the provisions relating to the Subscription Price, the option period, and the vesting schedule; and

 

		(g)	amendments to the Plan that are of a “housekeeping nature”.

 

No Shareholder Rights

 

4.8       Neither
an Optionee nor the Optionee’s legal representative will be, or have any of the rights and privileges of, a shareholder of the Corporation
with respect to any Common Shares issuable to such Optionee upon the exercise or payment of any Option, in whole or in part, unless and
until such Common Shares have been issued in the name of such Optionee or such Optionee's legal representative without restrictions thereto.

 

No Rights to Options

 

4.9       No
Service Provider, Optionee or other Person will have any claim to be granted any Option under the Plan, and there is no obligation for
uniformity of treatment of Service Providers, Optionees or holders or beneficiaries of Options under the Plan. The terms and conditions
of Options need not be the same with respect to any Optionee or with respect to different Optionees.

 

Compliance with Rules and Laws

 

4.10      The
Corporation will not be required to issue any Common Shares under the Plan unless such issuance is in compliance with all applicable laws,
regulations, rules, orders of governmental or regulatory authorities and the requirements of any stock exchange upon which Common Shares
of the Corporation are listed. The Corporation will not in any event be obligated to take any action to comply with any such laws, regulations,
rules, orders or requirements.

 

Adoption of Plan

 

4.11     This
Plan was approved by the Board on August 9, 2007 and is effective as of such date, subject to acceptance of the TSX and approval
by the shareholders of the Corporation.

 

4.12     This
plan was amended by the Board, and approved by the shareholders of the Corporation, effective October 13, 2010, March 27, 2013,
September 29, 2014 and June 29, 2015, subject to acceptance of the TSX.

 

     

     

    

 

Final

 

SCHEDULE A

 

PROMIS
NEUROSCIENCES INC.

STOCK OPTION PLAN

 

OPTION COMMITMENT

 

Notice is hereby given that, effective this _______
day of ______________________________, 20___ (the “Effective Date”) ProMIS Neurosciences Inc. (the “Corporation”)
has granted to ________________________, an Option to acquire __________ Common Shares (“Optioned Shares”) up to 5:00 p.m. (EST)
on the _______day of ___________________, 20__ (the “Expiry Date”) at a Subscription Price of Cdn. $_____ per share.

 

Optioned Shares may be acquired as follows:

 

	___	 	IN ACCORDANCE WITH THE VESTING PROVISIONS SET OUT IN THE PLAN; or

 

	___	 	AS FOLLOWS:

 

		(a)	● Optioned Shares (●%)
                                                           will vest and be exercisable on or after the Grant Date;

 

		(b)	● additional Optioned Shares (●%) will vest and be exercisable on or after
                                                           ● [date];

 

		(c)	● additional Optioned Shares (●%) will vest and be exercisable on or after
                                                           ● [date];

 

		(d)	● additional Optioned Shares (●%) will vest and be exercisable on or after
                                                           ● [date];

 

The grant of the Option evidenced hereby is made
subject to the terms and conditions of the Corporation’s Stock Option Plan, the terms and conditions of which are hereby incorporated
herein.

 

To exercise your Option, deliver a written notice,
which shall be substantially in the form attached hereto as Exhibit 1 hereto, specifying the number of Optioned Shares you wish to
acquire, together with cash or a certified cheque or bank draft payable to the Corporation for the aggregate Subscription Price, to the
Corporation. A certificate for the Optioned Shares so acquired will be issued by the transfer agent as soon as practicable thereafter.

 

PROMIS NEUROSCIENCES INC.

 

	 	 
	Chief Financial Officer	 

 

     

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The Optionee acknowledges receipt of a copy of the Plan and represents
to the Corporation that the Optionee is familiar with the terms and conditions of the Plan, and hereby accepts this Option subject to
all of the terms and conditions of the Plan. The Optionee agrees to execute, deliver, file and otherwise assist the Corporation in filing
any report, undertaking or document with respect to the awarding of the Option and exercise of the Option, as may be required by the TSX
or securities regulatory authorities. The Optionee further acknowledges that if the Plan has not been approved by the shareholders of
the Corporation on the Grant Date, this Option is not exercisable until such approval has been obtained.

 

Signature of Optionee:

 

	 	 	Date signed:	    
	Signature	 	 
	 	 	 
	 	 	 
	Print Name	 	 
	 	 	 
	 	 	 
	Address	 	 

 

 

     

     

    

 

EXHIBIT 1

 

PROMIS
NEUROSCIENCES INC.

 

STOCK OPTION PLAN 

NOTICE OF EXERCISE OF OPTION

 

	TO:	ProMIS Neurosciences Inc.	 
	 	1920 Yonge Street, Suite 200	 
	 	Toronto ON, M4S 3E2	 
	 	(or such other address as the Corporation may advise)	 

 

The undersigned hereby irrevocably gives notice, pursuant to the Stock
Option Plan (the "Plan") of ProMIS Neurosciences Inc. (the "Corporation"), of the exercise of the Option to acquire
and hereby subscribes for (cross out inapplicable item):

 

	(a)	all of the Optioned Shares; or

 

	(b)	                   of
                                 the Optioned Shares;

 

which are the subject of the Option Commitment attached hereto (attach
your original Option Commitment).

 

The undersigned tenders herewith cash or a certified cheque or bank
draft (circle one) payable to "ProMIS Neurosciences Inc." in an amount equal to the aggregate Subscription Price of the
aforesaid Optioned Shares and directs the Corporation to issue the certificate evidencing said Optioned Shares in the name of the undersigned
to be mailed to the undersigned at the following address (provide complete address):

 

			 
	 		 
	 		 
	 		 

 

The undersigned acknowledges the Option is not validly exercised unless
this Notice is completed in strict compliance with this form and delivered to the required address with the required payment prior to
5:00 p.m. local time in Toronto, Ontario on the Expiry Date of the Option.

 

DATED
the                day of                ,
20     .

 

	 	 	 
	 	Signature of OptioneeExhibit 10.39

 

AMORFIX LIFE SCIENCES LTD.

 

DEFERRED SHARE UNIT PLAN FOR

CANADIAN SENIOR OFFICERS

 

PART 1

 

GENERAL PROVISIONS

 

Purpose

 

1.1       The
purpose of this Plan is to provide an alternative form of compensation to satisfy annual and special bonuses payable to Senior Officers.
The form of compensation will enable Senior Officers to participate in any increase in the value of the Company as evidenced by the increase
in value of the Shares and will promote a greater alignment of interests amongst Senior Officers and the Company’s shareholders.

 

Definitions

 

1.2       In
this Plan,

 

Applicable
Withholding Tax has the meaning set forth in §3.4;

 

Awarded
Amount has the meaning set forth in §2.1;

 

Board
means the Board of Directors of the Company;

 

Committee
means the Nominating/Compensation Committee of the Board, or any other persons designated by the Board to perform the duties
contemplated herein;

 

Company
means Amorfix Life Sciences Ltd.;

 

Deferred
Share Unit means a right granted by the Company to an Eligible Person to receive, on a deferred payment basis, a Share or the
Fair Market Value thereof, or a combination thereof on the terms contained in this Plan;

 

Eligible
Person means any person who is a Senior Officer;

 

Fair
Market Value means five-day volume weighted average trading price as calculated in accordance with the TSX Policies as at,
and including, the relevant determination date or such other applicable date referenced herein provided that such date is a business day
and if it is not then calculated as at and including the last business day which proceeded such applicable date referenced herein, except
that if the Shares are not listed on the TSX, the Fair Market Value will be the value established by the Board based on the five-day average
closing price per Share on any other public exchange on which the Shares are listed calculated as at, and including, the relevant determination
date or such other applicable date referenced herein provided that such date is a business day and if it is not then calculated as at
and including the last business day which proceeded such applicable date referenced herein, or if the Shares are not listed on any public
exchange, by the Board based on its determination of the fair value of a Share;

 

     

     

    

 

Insider
means an insider as defined in the TSX Policies;

 

Option
means the right to purchase Shares granted pursuant to the Company’s stock option plan approved by the Board on August 9,
2007, as may be amended from time to time in accordance with its terms, or any successor plan accepted for filing by the TSX;

 

Outstanding
Issue means the number of Shares outstanding on a non-diluted basis;

 

Plan
means this Deferred Share Unit Plan, as amended from time to time;

 

Reserved
for Issuance refers to Shares that may be issued in the future upon the exercise of Deferred Share Units which have been or
are granted pursuant to this Plan;

 

Senior
Officer means any senior officer of the Company, or its subsidiary, appointed and approved by the Board;

 

Service
Provider means a person who is a bona fide director, officer, employee or consultant of the Company or its affiliates, and
also includes a company, of which 100% of the share capital is beneficially owned by one or more such persons;

 

Share
means a Common share in the capital of the Company;

 

Share
Compensation Arrangement means the Plan described herein and any other stock option, stock option plan, employee stock purchase
plan or any other compensation or incentive mechanism involving the issuance or potential issuance of shares to one or more Eligible Persons,
including a share purchase from treasury which is financially assisted by the Company by way of a loan, guaranty or otherwise;

 

Terminated
Service means that the Eligible Person has ceased to be a Senior Officer, other than as a result of death;

 

Total
Compensation for a particular Senior Officer means the aggregate of

 

(a)     the
discretionary annual bonus determined by the Board for which Senior Officers may be eligible and may be awarded if their individual performance
and contribution results in, amongst other things, the positive financial performance of the Company or any of its subsidiaries, and

 

(b)     a
bonus, that is not an annual bonus, that may be awarded to a Senior Officer at the discretion of the Board; and

 

TSX
means The Toronto Stock Exchange.

 

Effective Date

 

1.3       Subject
to the approval of the shareholders of the Company and acceptance by the TSX, this Plan will be effective as of June 11, 2008, and
amended August 7, 2014.

 

    2

     

    

 

Administration

 

1.4      The
Board will, in its sole and absolute discretion, but taking into account relevant corporate, securities and tax laws,

 

(a)     interpret
and administer this Plan,

 

(b)     establish,
amend and rescind any rules and regulations relating to this Plan, and

 

(c)      make
any other determinations that the Board deems necessary or desirable for the administration of this Plan.

 

The Board may correct any defect or any omission
or reconcile any inconsistency in this Plan in the manner and to the extent the Board deems, in its sole and absolute discretion, necessary
or desirable. Any decision of the Board in the interpretation and administration of this Plan will be final, conclusive and binding on
all parties concerned. All expenses of administration of this Plan will be borne by the Company.

 

Delegation

 

1.5      The
Board may, to the extent permitted by law, delegate any of its responsibilities under this Plan and powers related thereto (including,
without limiting the generality of the foregoing, those referred to under §1.4) to the Committee or to one or more officers of the
Company and all actions taken and decisions made by the Committee or by such officers in this regard will be final, conclusive and binding
on all parties concerned, including, but not limited to, the Company, the Eligible Person, and their legal representatives.

 

PART 2

 

AWARDS UNDER THIS PLAN

 

Determination of Deferred Share Units

 

2.1        The
Board will, in its sole and absolute discretion, decide at the time of declaring or awarding any Total Compensation to any Eligible Person
the amount (the “Awarded Amount”) of the Total Compensation that will be satisfied in the form of Deferred Share Units.

 

Issue of Deferred Share Units

 

2.2       The
number of Deferred Share Units (including fractional Deferred Share Units, computed to three digits) to be credited to an Eligible Person
for services will be determined by dividing the Awarded Amount by the Fair Market Value as at the last trading day before the date the
Awarded Amount is declared by the Board.

 

    3

     

    

 

Maximum Shares Reserved

 

2.3       Subject
to adjustment as provided for herein, the maximum aggregate number of Shares that may be Reserved for Issuance pursuant to this Plan is
1,000,000 Shares.

 

2.4       In
no event may the number of Shares that are Reserved for Issuance to any one person pursuant to Deferred Share Units and Options exceed
5% of the Outstanding Issue.

 

Shares Not Acquired

 

2.5       Any
Shares not acquired under a Deferred Share Unit granted under the Plan which has expired or been cancelled or terminated may be made the
subject of a further Deferred Share Unit pursuant to the provisions of the Plan.

 

Dividend Equivalents

 

2.6       On
any date on which a cash dividend is paid on Shares, an Eligible Person’s account will be credited with the number of Deferred Share
Units (including fractional Deferred Share Units, computed to three digits) calculated by

 

(a)     multiplying
the amount of the dividend per Share by the aggregate number of Deferred Share Units that were credited to the Eligible Person’s
account as of the record date for payment of the dividend, and

 

(b)    dividing
the amount obtained in §(a) by the Fair Market Value on the date on which the dividend is paid.

 

Eligible Person’s Account

 

2.7       A
written confirmation of the balance in each Eligible Person’s account will be sent by the Company to the Eligible Person upon request
of the Eligible Person.

 

Adjustments and Reorganizations

 

2.8       In
the event of any dividend paid in shares, share subdivision, combination or exchange of shares, merger, consolidation, spin-off or other
distribution of Company assets to shareholders, or any other change in the capital of the Company affecting Shares, the Board, in its
sole and absolute discretion, will make, with respect to the number of Deferred Share Units outstanding under this Plan, any proportionate
adjustments as it considers appropriate to reflect that change.

 

PART 3

 

TERMINATION OF SERVICE

 

Termination of Service

 

3.1       An
Eligible Person who has Terminated Service may elect to receive one Share in respect of each whole Deferred Share Unit credited to the
Eligible Person’s account (determined in accordance with §3.2) net of Applicable Withholding Tax, by filing with the Secretary
of the Company a notice of redemption in the form prescribed from time to time by the Company on or before December 15 of the first
calendar year commencing after the date on which the Eligible Person has Terminated Service. If the Eligible Person fails to file such
notice on or before that December 15, the Eligible Person will be deemed to have filed with the Secretary of the Company a notice
of redemption on that December 15 and will be deemed to have elected to redeem all of his or her Deferred Share Units. The date
on which a notice is filed or deemed to be filed with the Secretary of the Company is the “Filing Date”. The Company may
defer the Filing Date to any other date if such deferral is, in the sole opinion of the Company, desirable to ensure compliance with
 §4.3.

 

    4

     

    

 

Issuance of Shares

 

3.2       The
issuance of the Shares will be made by the Company as soon as reasonably possible following the Filing Date. In no event will the issuance
be made later than December 31 of the first calendar year commencing after the Eligible Person has Terminated Service. Fractional
Shares may not be issued, and where an Eligible Person would be entitled to receive a fractional Share in respect of any fractional Deferred
Share Unit, the Company will pay to such Eligible Person, in lieu of such fractional Share, cash equal to its Fair Market Value, calculated
as at the Filing Date.

 

Death

 

3.3       In
the event of the death of an Eligible Person, the Company will, within two months of the Eligible Person’s death, pay cash equal
to the Fair Market Value of the Shares which would be deliverable to the Eligible Person if the Eligible Person had Terminated Service
in respect of the Deferred Share Units credited to the deceased Eligible Person’s account (net of any Applicable Withholding Tax)
to or for the benefit of the legal representative of the Eligible Person. The Fair Market Value will be calculated on the date of death
of the Eligible Person.

 

Applicable Withholding Tax

 

3.4       The
Company is authorized to deduct such taxes and other amounts as it may be required by law to withhold (“Applicable Withholding
Tax”), in such manner as it determines, including, without limiting the generality of the foregoing, by delivering fewer Shares
than an Eligible Person otherwise would have received. The Company may require Eligible Persons, as a condition of receiving Shares otherwise
to be delivered to them under this Plan, to deliver undertakings to, or indemnities in favour of, the Company respecting the payment by
such Eligible Persons of applicable income or other taxes.

 

PART 4

 

GENERAL

 

Non-Transferability

 

4.1       Deferred
Share Units and all other rights, benefits or interests in this Plan are non-transferable and may not be pledged or assigned or encumbered
in any way and are not subject to attachment or garnishment, except that if the Eligible Person dies, the legal representatives of the
Eligible Person will be entitled to receive the amount of any payment otherwise payable to the Eligible Person hereunder in accordance
with the provisions hereof.

 

    5

     

    

 

No Right to Service

 

4.2       Neither
participation in this Plan nor any action under this Plan will be construed to give any Eligible Person a right to be retained in the
service of the Company.

 

Applicable Trading Policies

 

4.3       The
Board and each Eligible Person will ensure that all actions taken and decisions made by the Board or the Eligible Person, as the case
may be, pursuant to this Plan comply with any applicable securities laws and policies of the Company relating to insider trading or “blackout”
periods.

 

Successors and Assigns

 

4.4       This
Plan will enure to the benefit of and be binding upon the respective legal representatives of the Eligible Person.

 

Plan Amendment

 

4.5       The
Board reserves the right, in its absolute discretion, to at any time amend, modify or terminate the Plan without obtaining shareholder
approval as it deems necessary or appropriate, but no amendment will, without the consent of the Eligible Person or unless required by
law, adversely affect the rights of an Eligible Person with respect to Deferred Share Units to which the Eligible Person is then entitled
under this Plan.

 

4.6       Notwithstanding
 §4.5, the Board may not, without approval of the holders of a majority of the issued and outstanding equity securities of the Company
present and voting in person or by proxy at a meeting of holders of such securities, amend the Plan or a Deferred Share Unit to:

 

(a)     increase
the number of Shares reserved for issuance under the Plan;

 

(b)     permit
assignments, or exercises other than by the Eligible Person, of Deferred Share Units beyond that contemplated by §4.1, except for
an amendment that would permit the assignment of a Deferred Share Unit for estate planning or estate settlement purposes; and

 

(c)     amend
the Plan to provide for other types of compensation through equity issuance, unless the change to the Plan or a Deferred Share Unit results
from the application of §2.8.

 

4.7       Without
limiting the generality of §4.5, the Board may make the following amendments to the Plan without obtaining shareholder approval:

 

(a)     amendments
to the terms and conditions of the Plan necessary to ensure that the Plan complies with the applicable regulatory requirements, including
without limitation the TSX Policies or the rules of any national securities exchange or system on which the Shares are then listed
or reported, or by any regulatory body having jurisdiction with respect thereto;

 

(b)     making
adjustments to outstanding Deferred Share Units in the event of certain corporate transactions;

 

(c)     a
change to the termination provisions of a security or the Plan which does not entail an extension beyond the original termination date;

 

(d)     amendments
to the provisions of the Plan respecting administration of the Plan and eligibility for participation under the Plan, including, without
limitation, to expand the class of Eligible Persons to include any or all Service Providers; and

 

(e)     amendments
to the Plan that are of a “housekeeping nature”.

 

    6

     

    

 

Plan Termination

 

4.8       The
Board may terminate this Plan at any time, but no termination will, without the consent of the Eligible Person or unless required by law,
adversely affect the rights of an Eligible Person with respect to Deferred Share Units to which the Eligible Person is then entitled under
this Plan. In no event will a termination of this Plan accelerate the time at which the Eligible Person would otherwise be entitled to
receive any Shares or cash in respect of Deferred Share Units hereunder.

 

Governing Law

 

4.9      This
Plan and all matters to which reference is made in this Plan will be governed by and construed in accordance with the laws of British
Columbia and the laws of Canada applicable therein.

 

Reorganization of the Company

 

4.10    The
existence of this Plan or Deferred Share Units will not affect in any way the right or power of the Company or its shareholders to make
or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business,
or to create or issue any bonds, debentures, shares or other securities of the Company or to amend or modify the rights and conditions
attaching thereto or to effect the dissolution or liquidation of the Company, or any amalgamation, combination, merger or consolidation
involving the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding,
whether of a similar nature or otherwise.

 

No Shareholder Rights

 

4.11            Deferred
Share Units are not considered to be Shares or securities of the Company, and an Eligible Person whose account is credited with Deferred
Share Units will not, as such, be entitled to exercise voting rights or any other rights attaching to the ownership of Shares of other
securities of the Company, or be considered the owner of Shares by virtue of such crediting of Deferred Share Units.

 

No Other Benefit

 

4.12            No
amount will be paid to, or in respect of, an Eligible Person under this Plan to compensate for a downward fluctuation in the price of
a Share, nor will any other form of benefit be conferred upon, or in respect of, an Eligible Person for such purpose.

 

Unfunded Plan

 

4.13            For
greater certainty, this Plan will be an unfunded plan, including for tax purposes. Any Eligible Person holding Deferred Share Units or
related accruals under this Plan will have the status of a general unsecured creditor of the Company with respect to any relevant rights
thereunder.

 

    7

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