Document:

Exhibit

		

			 

		

		
			BASIC ENERGY SERVICES, INC.
		

		
			[FORM OF -- Non-Compliant Under Section 162(m) of the Internal Revenue Code of 1986]  
		

		
			PERFORMANCE-BASED AWARD AGREEMENT
		

		
			2014 Performance-Based Restricted Stock Grants
		

		
			(Executive and Senior Management)
		

		
			 
		

		
			Grantee:    _________ _
		

			
	
			
				 1.
			Grant of Performance-Based Award; Issuance of Restricted Stock Upon Achievement of Performance-Based Metrics.  

			
	
			
				 (a)
			As of the effective date of this agreement (this “Agreement”), Basic Energy Services, Inc. (formerly BES Holding Co.), a Delaware corporation (the “Company”), hereby grants to the Grantee (identified above) shares (the “Restricted Stock”) of common stock, $0.01 par value per share of the Company (the “Common Stock”), subject to meeting the Performance Metrics as described in Section 12 hereof, and in accordance with the terms and conditions of this Agreement and the Fifth Amended and Restated Basic Energy Services, Inc. 2003 Incentive Plan (as may be amended hereafter from time to time,  the “Plan”). The Plan is hereby incorporated in this Agreement in its entirety by reference.    

			
	
			
				 (b)
			To determine the actual number of shares of Restricted Stock to be earned by Grantee, the PB Peer Group (as identified in Section 12 below) will be ranked from best performing to worst performing with regard to each company’s respective TSR Performance Metric where the PB Peer Group company ranked 1st shall be the one with the highest TSR Performance Metric when compared to all other PB Peer Group companies, the PB Peer Group company ranked 2nd shall be the one with the second highest TSR Performance Metric when compared to all other PB Peer Group companies, the PB Peer Group company ranked 3rd shall be the one with the third highest TSR Performance Metric when compared to all other PB Peer Group companies, and so forth. The PB Peer Group company ranked 13th shall be the one with the lowest TSR Performance Metric when compared to all other PB Peer Group companies. The percentage of TSR Target Shares (as identified in Section 12 below) earned by Grantee should the Company’s TSR Performance Metric equal that of the 1st-ranked, 2nd-ranked, 3rd-ranked, etc., PB Peer Group company will be as set forth below:

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		 

		

			 

		

 

		

			 

		

			
					
						PB Peer Group Company Rank Based on TSR Performance Metric

					
					
						 

					
					
						Percentage of TSR Target Shares Earned

				
	
					
						1st

					
					
						 

					
					
						150.0%

				
	
					
						2nd

					
					
						 

					
					
						141.7%

				
	
					
						3rd

					
					
						 

					
					
						133.3%

				
	
					
						4th

					
					
						 

					
					
						125.0%

				
	
					
						5th

					
					
						 

					
					
						116.7%

				
	
					
						6th

					
					
						 

					
					
						108.3%

				
	
					
						7th

					
					
						 

					
					
						100.0%

				
	
					
						8th

					
					
						 

					
					
						83.3%

				
	
					
						9th

					
					
						 

					
					
						66.7%

				
	
					
						10th

					
					
						 

					
					
						50.0%

				
	
					
						11th

					
					
						 

					
					
						33.3%

				
	
					
						12th

					
					
						 

					
					
						16.7%

				
	
					
						13th

					
					
						 

					
					
						0%

				

		
			 
		

		
			Should the Company’s TSR Performance Metric be (1) greater than the TSR Performance Metric of the 1st-ranked member of the PB Peer Group, the percentage of TSR Target Shares earned by Grantee will be 150.0%, (2) less than the TSR Performance Metric of the 13th-ranked (or last) member of the PB Peer Group, the percentage of TSR Target Shares earned by Grantee will be 0%, and (3) greater than the TSR Performance Metric of one PB Peer Group company and less than the TSR Performance Metric of the next highest ranked PB Peer Group company, the percentage of TSR Target Shares earned by Grantee will be higher than the percentage assigned to the lower ranked of the two companies and lower than the percentage assigned to the higher ranked of the two companies with the exact percentage of Target Shares earned by the Grantee determined by proportional interpolation (for example, if the Company’s TSR Performance Metric were to be at the midpoint between the TSR Performance Metrics of the 6th-ranked and the 5th-ranked PB Peer Group companies, the Grantee would earn 112.5% of the TSR Target Shares (as identified in Section 12 below), 112.5% lying exactly halfway between the 108.3% assigned to the 6th-ranked PB Peer Group company and the 116.7% assigned to the 5th-ranked PB Peer Group company).
		

		 

		

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				 (c)
			The stock certificate(s) or book entry evidencing the shares of Restricted Stock shall not be issued or registered on the Company’s books and records until (i) the achievement of the Performance Metrics set forth above and described in Section 12 below have been met and approved by the Committee and (ii) the Committee has determined the specific number of shares of Restricted Stock to be issued pursuant to this Agreement. Upon resolution and certification by the Committee that the applicable Performance Metrics have been achieved, and subject to the other terms and conditions of this Agreement, the Company will promptly issue by book entry or a stock certificate(s) the aggregate number of shares of Restricted Stock certified by the Committee for issuance under this Agreement.

			
	
			
				 2.
			Definitions.  All capitalized terms used herein shall have the meanings set forth in the Plan unless otherwise provided herein.  Section 12 below sets forth meanings for certain of the capitalized terms used in this Agreement.

			
	
			
				 3.
			Vesting Term.  Any Restricted Stock earned by and issued to Grantee pursuant to this Agreement will vest in the Grantee as set forth in Section 12 below.

			
	
			
				 4.
			Purchase Price.  No consideration shall be payable by the Grantee to the Company for the Restricted Stock.

			
	
			
				 5.
			Restrictions on Restricted Stock.    

			
	
			
				 (a)
			The Restricted Stock earned and issued to Grantee hereunder shall be maintained in book entry form or the stock certificates shall be retained in the possession of the Company until vested in the Grantee as provided in Sections 3 and 12 hereof.  

			
	
			
				 (b)
			All unvested shares of Restricted Stock will be forfeited by the Grantee (i)  if the Grantee’s employment with the Company is terminated by the Company for “Cause” before the Restricted Stock is vested or (ii)  if the Grantee terminates his employment with the Company before the Restricted Stock is vested for any reason other than (A)  “Good Reason”  or (B) the death or “Disability” of the Grantee,  as such terms “Cause,”  “Disability” or “Good Reason” or equivalent terms (such as “Termination for Cause” or “Termination for Good Reason”) are defined in the employment agreement in effect between the Grantee and the Company as of the effective date hereof or, if no such employment agreement exists, as such terms are defined in the Plan at the time of such termination of employment to the extent not modified in Section 12 below, or as otherwise defined in this Agreement.  “Retirement” shall also have the effect as set forth in Section 12(e) below.

			
	
			
				 (c)
			At such time as the vesting period is satisfied, a certificate for the Common Stock no longer subject to forfeiture will be delivered to the Grantee without the legend set forth in Section 5(e) below.  

			
	
			
				 (d)
			From and after the date the stock certificate for the Restricted Stock is issued and prior to any forfeiture of the Restricted Stock, the Grantee shall be entitled to vote the shares of Restricted Stock and shall be entitled to receive any cash dividends payable on such shares at the time such dividends are paid with respect to the Common 
		

		 

		

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			Stock.  Any dividends paid or payable in shares of Common Stock or other stock of the Company applicable to the Restricted Stock shall be retained by the Company until the vesting period of the Restricted Stock on which the stock dividend was issued is satisfied.

			
	
			
				 (e)
			Any book entry shares or  certificate representing the Restricted Stock awarded hereunder shall be issued to the Grantee pursuant to the terms of the Plan and this Agreement and shall be marked with the following legend:

		
			“The shares represented by this certificate have been issued pursuant to the terms of the Fifth Amended and Restated Basic Energy Services, Inc. 2003 Incentive Plan and may not be sold, pledged, transferred, assigned or otherwise encumbered in any manner except as set forth in the terms of such Plan or Award Agreement dated effective March 18, 2014.”
		

			
	
			
				 6.
			Independent Legal and Tax Advice.  Grantee acknowledges that the Company has advised Grantee to obtain independent legal and tax advice regarding the grant of the Restricted Stock in accordance with this Agreement and any disposition of any such shares.

			
	
			
				 7.
			Reorganization of Company.  The existence of this Agreement shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue or bonds, debentures, preferred or prior preference stock ahead of or affecting the Restricted Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

			
	
			
				 8.
			Investment Representation.  Grantee will enter into such written representations, warranties and agreements as Company may reasonably request in order to comply with any federal or state securities law.  Moreover, any stock certificate for any Restricted Stock (and/or Common Stock) issued to Grantee hereunder may contain a legend restricting their transferability as determined by the Company in its discretion.  Grantee agrees that Company shall not be obligated to take any affirmative action in order to cause the issuance or transfer of shares of Common Stock hereunder to comply with any law, rule or regulation that applies to the shares subject to this Agreement.

			
	
			
				 9.
			No Guarantee of Employment.  This Agreement shall not confer upon Grantee any right to continued employment with the Company or any Affiliate thereof.

			
	
			
				 10.
			Withholding of Taxes.  The Grantee shall have the responsibility of discharging all taxes owed by the Grantee as a result of any Restricted Stock awarded to Grantee pursuant to this Agreement and no issuance of Common Stock pursuant to this Agreement shall be made until appropriate arrangements satisfactory to the Company have been made for the payment of any tax amounts that may be required to be withheld or paid to the Company with respect thereto.    Notwithstanding the foregoing, in accordance with Section 9(b) of the Plan, the Company hereby agrees that the Grantee may direct the Company to satisfy the Company’s actual withholding tax obligations through the “constructive” tender and withholding of vested Restricted Stock under 
		

		 

		

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			this Agreement; provided, the Company may revoke such right at any time prior to the vesting date of Awards under this Agreement by giving written notice to the Grantee.  Grantee agrees that, if he makes an election under Section 83(b) of the Internal Revenue Code of 1986, as amended, with regard to the Restricted Stock, he will so notify the Company in writing within two (2) days after making such election, so as to enable the Company to timely comply with any applicable governmental reporting requirements.

			
	
			
				 11.
			General.

			
	
			
				 (a)
			Notices.  All notices under this Agreement shall be mailed or delivered by hand to the parties at their respective addresses set forth beneath their signatures below or at such other address as may be designated in writing by either of the parties to one another, or to their permitted transferees if applicable.  Notices shall be effective upon receipt.

			
	
			
				 (b)
			Transferability of Award.  The rights of the Grantee pursuant to this Agreement are not transferable by Grantee.  No right or benefit hereunder shall in any manner be liable for or subject to any debts, contracts, liabilities, obligations or torts of Grantee or any permitted transferee thereof. Any purported assignment, alienation, pledge, attachment, sale, transfer or other encumbrance of the Restricted Stock, prior to the lapse of restrictions, that does not satisfy the requirements hereunder shall be void and unenforceable against the Company.

			
	
			
				 (c)
			Amendment and Termination.  No amendment, modification or termination of this Agreement shall be made at any time without the written consent of Grantee and the Company.

			
	
			
				 (d)
			No Guarantee of Tax Consequences.  The Company and the Committee make no commitment or guarantee that any federal or state tax treatment will apply or be available to any person eligible for benefits under this Agreement.  The Grantee has been advised and been provided the opportunity to obtain independent legal and tax advice regarding the award of Restricted Stock pursuant to this Agreement and the disposition of any Common Stock acquired thereby.

			
	
			
				 (e)
			Severability.  In the event that any provision of this Agreement shall be held illegal, invalid or unenforceable for any reason, such provision shall be fully severable, but shall not affect the remaining provisions of the Agreement, and the Agreement shall be construed and enforced as if the illegal, invalid or unenforceable provision had not been included therein.

			
	
			
				 (f)
			Supersedes Prior Agreements.  This Agreement shall supersede and replace all prior agreements and understandings, oral or written, between the Company and the Grantee regarding the grant of the Restricted Stock covered hereby.

			
	
			
				 (g)
			Governing Law.  This Agreement shall be construed in accordance with the laws of the State of Texas without regard to its conflict of law provisions, to the extent federal law does not supersede and preempt Texas law.

		 

		

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				 (h)
			No Trust or Fund Created.  This Agreement shall not create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Grantee or any other Person.  To the extent that any Person acquires a right to receive payments from the Company or any Affiliates pursuant to this Agreement, such right shall be no greater than the right of any general unsecured creditor of the Company or any Affiliate.

			
	
			
				 (i)
			Other Laws.  The Company retains the right to refuse to issue or transfer any Common Stock if it determines that the issuance or transfer of such shares might violate any applicable law or regulation or entitle the Company to recover under Section 16(b) of the Securities Exchange Act of 1934.

			
	
			
				 (j)
			Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Grantee.

			
	
			
				 12.
			Definitions and Other Terms.  The following capitalized terms shall have those meanings set forth opposite them:

			
	
			
				 (a)
			Grantee.  The person specified as the Grantee on page 1 and the signature page of this Agreement.

			
	
			
				 (b)
			Vesting.  Subject to Section 5 above and the terms of the Plan, the Grantee shall vest in all rights to the Restricted Stock and any rights of the Company to such Restricted Stock shall lapse on the earlier of (i) the dates set forth below; (ii) termination by the Company without Cause; (iii) the death or Disability of the Grantee; or (iv) Termination for Good Reason.    

		
			With respect to any of the events set forth in clauses (ii), (iii) or (iv) above in this Section 12(b) prior to the end of the Performance Period, the Grantee shall also be deemed to have met the TSR Performance Metric and earned 100% of each of the TSR Target Shares.  In the event of a Change of Control as defined in the Plan and related termination events, Section 8(b) of the Plan shall be applicable, including the potential deemed meeting of the TSR Performance Metric at the highest level set forth in this Agreement.
		

		
			If not earlier vested, the Restricted Stock shall vest according to the following schedule:
		

		
			March 15, 2016  - 1/3 of such shares
		

		
			March 15, 2017  - 1/3 of such shares
		

		
			March 15, 2018 -  1/3 of such  shares
		

		
			 
		

			
	
			
				 (c)
			Termination for Good Reason.  Termination for Good Reason shall have the meaning set forth in the Plan, except that clause (ii) of the definition thereof is hereby amended and restated in its entirety as follows:    (ii) reduction in (a) the Participant’s annual base salary immediately prior to the Change in Control, (b) the Participant’s target bonus opportunity (expressed as a percentage of the Participant’s annual base salary or other method approved by the Committee) immediately prior to the Change in Control or (c) benefits comparable in the aggregate to those enjoyed by the Participant under the 
		

		 

		

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			Company’s retirement, life insurance, medical, dental, health, accident and disability plans in which Participant was participating immediately prior to the Change in Control;

			
	
			
				 (d)
			Disability.    “Disability” shall mean that Grantee is entitled to receive long-term disability (“LTD”) income benefits under the LTD plan or policy maintained by the Company that covers Grantee.  If, for any reason, Grantee is not covered under such LTD plan or policy, then “Disability” shall mean a “permanent and total disability” as defined in Section 22(e)(3) of the Code and Treasury regulations thereunder.  Evidence of such Disability shall be certified by a physician acceptable to the Company.  Grantee agrees to submit to any examinations that are reasonably required by the attending physician or other healthcare service providers to determine whether he or she has a Disability.

			
	
			
				 (e)
			Retirement.    “Retirement” means the voluntary termination of Grantee’s employment for normal retirement at or after attaining age 62 provided that, on the date of his retirement, Grantee has accrued at least ten continuous years of active employment service with the Company;  provided, if the Grantee is party to an employment agreement in effect between the Grantee and the Company as of the date hereof in which the term “Retirement” is defined for purposes of that agreement, such term shall apply to this Agreement. 

		
			In the event of the Retirement of the Grantee, Grantee is hereby given the option to have any unvested shares forfeited in connection with such Retirement in accordance with Section 5(b) reissued to the Grantee upon, and as partial consideration for, Grantee’s execution and delivery of a non-compete agreement (in the form required by the Company in its sole discretion with a term of not longer than the final vesting date set forth in Section 12(d) above) within the period of time specified by the Company after delivery of such agreement to the Grantee for execution. In addition, with respect to a Retirement after the end of the Performance Period but prior to the determination of the achievement of the TSR Performance Metric by the Committee, the Grantee shall also be deemed to have met the TSR Performance Metric and earn TSR Target Shares if and when determined in accordance with the terms of this Agreement.  
		

			
	
			
				 (f)
			TSR Target Shares and Maximum Number of Shares of Restricted Stock.  “TSR Target Shares” means  shares of Common Stock.  Accordingly, based on the potential achievement that may be obtained in Section 1(b) hereof, the maximum number of shares of Restricted Stock that may be issued by the Company pursuant to this Agreement is 150% of the TSR Target Shares.

			
	
			
				 (g)
			Performance Metric.  For purposes of this Agreement:

			
	
			
				 (i)
			

			
	
			
			“TSR Performance Metric” means the cumulative total shareholder return (“TSR”) for the Common Stock of the Company as calculated below for the Performance Period.  The award will be earned as set forth in Section 1(b) based on the Company’s TSR performance relative to the PB Peer Group.  

		 

		

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				 (ii)
			

			
	
			
			“TSR for the Performance Period” shall be defined and calculated as follows, where “Beginning Price” is the average closing price on the New York Stock Exchange (“NYSE”) for the last 20 NYSE trading days of 2013, and “Ending Price” is the average closing price on the NYSE for the last 20 NYSE trading days of 2014, in each case as applied to the applicable equity security:

		
			 
		

		
			TSR = (Ending Price – Beginning Price + cash dividends (if any) per share paid*)
		

		
			Beginning Price
		

		
			 
		

		
			*Stock dividends paid in securities rather than cash in which there is a distribution of less than 25 percent of the outstanding shares (as calculated prior to the distribution) shall be treated as cash for purposes of this calculation.
		

		
			 
		

		
			To the extent a security of the Company or any member of the PB Peer Group is not listed or traded on the NYSE, “NYSE”  as used above above shall mean the principal national securities exchange or quotation service on which the security is listed or quoted.
		

		
			 
		

			
	
			
				 (h)
			PB Peer Group.  “PB Peer Group” means each of the following companies: (1)  C&J Energy Services, Inc.; (2) Forbes Energy Services Ltd.; (3) Hercules Offshore Inc.; (4) Key Energy Services, Inc.; (5) Natural Gas Services Group, Inc.; (6) Oil States International, Inc.;  (7)  Patterson-UTI Energy Inc.; (8)  Pioneer Energy Services Corp.; (9) Superior Energy Services, Inc.;  (10) Team Inc.; (11) Tesco Corp.; (12) Tetra Technologies, Inc.; and (13) Forum Energy Technologies, Inc.; provided, in the event any such company ceases to exist, ceases to file public reports timely with the U.S. Securities and Exchange Commission with respect to the Performance Period or merges or combines with any other entity that, in the determination of the Committee makes such combined company not comparable for use as part of the PB Peer Group,  the Committee in its sole discretion may continue to include or exclude such company in the PB Peer Group, but in no event may substitute any other company in its place as part of the PB Peer Group.

			
	
			
				 (i)
			Performance Period.  “Performance Period” means the one-year calculation period starting on the 20th NYSE trading day prior to and including the last NYSE trading day of 2013 and ending on the last NYSE trading day of 2014.

		

		

		 

		

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		IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officer and Grantee has hereunto executed this Agreement as of the same date, to be effective as of March 18, 2014.
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						BASIC ENERGY SERVICES, INC.

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						By:

					
					
						 /s/ James E. Tyner   

				
	
					
						Name:

					
					
						 James E. Tyner 

				
	
					
						Title:

					
					
						 VP, Human Resources  

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Address for Notices:

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Basic Energy Services, Inc.

				
	
					
						801 Cherry Street

				
	
					
						Suite 2100, Unit #21

				
	
					
						Fort Worth, Texas 76102

				
	
					
						Fax:  (817) 334-4101

				
	
					
						Attn:  President

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						GRANTEE

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						By:

					
					
						 

				
	
					
						 

					
					
						(Signature)

				
	
					
						Name:

					
					
						 

				
	
					
						 

					
					
						(Printed Name)

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Address for Notices:

				
	
					
						 

				
	
					
						 

				
	
					
						 

				
	
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Fax:

					
					
						 

				

		
			 
		

		 

		

			9Exhibit 4.1--20-F-2013

Exhibit 4.1

 SECOND AMENDED AND RESTATED STOCK OPTION PLAN OF
AETERNA ZENTARIS INC.
 
		
	1.
	Purpose of the Plan

		
	1.1
	The purpose of the stock option plan for directors and certain designated officers, employees and suppliers of ongoing services (the "Plan") of Aeterna Zentaris Inc. (the "Corporation") is to secure for the Corporation and its shareholders the benefit of an incentive interest in share ownership by directors and certain designated officers and employees of the Corporation and its Subsidiaries (as defined below), as the case may be, and by certain designated suppliers of ongoing services. 

		
	1.2
	The sole persons eligible to receive grants under this Plan (each, a "Participant") shall be as follows: (i) the most senior executive officers of the Corporation, including the persons occupying the positions of Chief Executive Officer, Chief Financial Officer, Chief Scientific Officer, Chief Commercial Officer, Chief Administrative Officer and Chief Compliance Officer; (ii) such other executive officers of the Corporation or of its Subsidiaries that may, from time to time, report directly to the Chief Executive Officer; (iii) the non-employee, independent members of the Board of Directors of the Corporation (the "Board"); and (iv) such other officers or employees of the Corporation or of any of its Subsidiaries, as the case may be, or suppliers of ongoing services, as may be expressly designated by resolution of the Board or its Nominating, Governance and Compensation Committee (the "Committee"). For the purposes of this Plan, "Subsidiaries" shall mean any legal entity of which the Corporation holds or is the beneficiary, at any time, directly or indirectly, otherwise than as security only, of securities conferring over fifty percent (50%) of the votes enabling it to elect the majority of the directors of such entity as well as any current or future Subsidiary of such legal entity. 

		
	2.
	Administration

		
	2.1
	This Plan shall be administered by the Board or the Committee. The Board or the Committee shall have full and complete latitude to interpret this Plan and to establish the rules and regulations applying to it and to make all other determinations it deems necessary or useful for the administration of the Plan, provided that such interpretations, rules, regulations and determinations shall be consistent with the relevant policy statements of the competent securities authorities and the rules of the stock exchanges on which the securities of the Corporation are listed.

		
	3.
	Shares Subject to the Plan

		
	3.1
	The shares issuable further to the exercise of options granted under the Plan are the Common Shares of the Corporation (the "Shares"). The total number of Shares that may be issued under the Plan shall not exceed eleven point four percent (11.4%) of the total number of issued and outstanding Shares at any given time. No Participant shall hold options to purchase more than five percent (5%) of the number of Shares issued and outstanding from time to time.

		
	3.2
	In addition: (i) the number of securities issuable to "insiders" (as such term is defined in the TSX Company Manual) of the Corporation, at any time, under all security-based compensation arrangements of the Corporation, cannot exceed ten percent (10%) of its issued and outstanding securities; and (ii) the number of securities issued to insiders of the Corporation, within any one-year period, under all security-based compensation arrangements of the Corporation, cannot exceed ten percent (10%) of its issued and outstanding securities.

		
	3.3
	In addition: (i) the aggregate fair value of options granted under all security-based compensation arrangements of the Corporation to any one non-employee, independent director of the Corporation entitled to receive a benefit under this Plan, within any one-year period, cannot exceed US$100,000 valued on a Black-Scholes basis and as determined by the Committee; and (ii) the aggregate number of securities issuable to all non-employee, independent directors of the Corporation entitled to receive a benefit under this Plan, within any one-year period, under all security-based compensation arrangements of the Corporation, cannot exceed one percent (1%) of its issued and outstanding securities.

		
	3.4
	All options that are exercised, or that expire or are cancelled without being exercised, shall become available to be granted (or "reloaded") under the terms of this Plan upon such exercise, cancellation or expiration, as the case may be.

1

		
	4.
	Grant of Options

		
	4.1
	The Board or the Committee shall from time to time designate the Participants in this Plan as contemplated by Section 1.2 hereof, as well as the number of options, if any, that shall or may be granted to such Participants hereunder. Any Participant may hold more than one option. The granting of each option shall be evidenced by a letter from the Corporation addressed to the Participant setting forth the number of Shares covered by such option, the subscription price, the terms and conditions of exercise of the option and the option period.

		
	4.2
	Subject to the provisions of Section 3, the non-employee, independent directors of the Corporation are eligible to receive grants of up to 60,000 options per year. These options shall be vested over a period of three (3) years in equal thirds with the first third becoming vested on the first anniversary of the Grant Date (as defined below), the second third becoming vested on the second anniversary of the Grant Date and the final third becoming vested on the third anniversary of the Grant Date. The specific number of options to be granted to non-employee, independent directors in accordance with the foregoing shall be determined by the Board upon recommendation of the Committee.

		
	5.
	Exercise Price

		
	5.1
	The exercise price of an option shall be established by the Board or the Committee at the time of the grant and such price shall not be less than the greater of the closing prices of the Shares on the Nasdaq Stock Market and the Toronto Stock Exchange on the last trading day preceding the date of grant of the option (the "Grant Date"). If either of these exchanges is closed or if the Shares did not trade on one of the two exchanges on the last trading day preceding the Grant Date, the exercise price shall be the closing price of the Shares at the open exchange ("Exercise Price").

The closing price of the Shares shall be converted into Canadian dollars, when this conversion is required, at the noon buying rate of the Bank of Canada on the last trading day preceding the Grant Date established in the previous paragraph.
		
	6.
	Option Period

		
	6.1
	Subject to the provisions of Section 6.2, each option granted under this Plan shall be exercisable during a period established by the Board or the Committee (the "Option Period"). The Option Period shall commence no earlier than the Grant Date and shall terminate no later than seven years after such date (the "Outside Expiry Date"). Subject to the provisions of Section 6.2 and unless otherwise expressly determined by resolution of the Board or the Committee, options granted under this Plan to Participants (other than non-employee, independent directors, in respect of which Section 4.2 shall prevail) shall be vested over a period of three (3) years in equal thirds with the first third becoming vested on the first anniversary of the Grant Date, the second third becoming vested on the second anniversary of the Grant Date and the final third becoming vested on the third anniversary of the Grant Date.

		
	6.2
	Notwithstanding the provisions of Section 6.1, an option shall not be exercisable by a Participant from and after each and every one of the following dates (each, an "Early Expiry Date"), unless the Board or the Committee decides otherwise:

		
	6.2.1
	(i) in the case where the Participant is an officer or an employee, the date on which the Participant resigns or voluntarily leaves his employment with the Corporation or one of its Subsidiaries, as the case may be, or the date on which the employment of the Participant with the Corporation or one of its Subsidiaries is terminated for just cause, as the case may be, including, without limiting the scope of the foregoing, in the event of a breach of his obligations to the Corporation, or (ii) in the case where the Participant is a director of the Corporation or one of its Subsidiaries, as the case may be, but is not employed by either the Corporation or one of its Subsidiaries, the date on which such Participant ceases to be a member of the relevant Board of Directors for any reason other than death;

		
	6.2.2
	(i) in the case where the Participant is an officer or employee, six (6) months following the date on which the Participant's employment with the Corporation or any of its Subsidiaries, as the case may be, is terminated by reason of death or (ii) in the case where the Participant is a director of the Corporation or any of its Subsidiaries, as the case may be, but is not employed by either the Corporation or any of its Subsidiaries, six (6) months following the date on which such Participant ceases to be a member of the relevant Board of Directors by reason of death;

		
	6.2.3
	in the case where the Participant is an officer or employee, ninety (90) days following the date on which the Participant's employment with the Corporation or any of its Subsidiaries, as the case may be, is terminated for any cause or reason other than those mentioned in paragraphs 6.2.1 and 6.2.2 including, without limiting the scope of the foregoing, disability, long-term illness, retirement or early retirement; or

2

		
	6.2.4
	in the case where the Participant is a supplier of ongoing services, thirty (30) days following the date on which the Participant ceases to act as a supplier of ongoing services to the Corporation or any of its Subsidiaries, as the case may be, for any cause or reason.

		
	6.3
	Subject to Section 6.4 hereof, all rights conferred by an option under this Plan that shall not have been exercised by either an Early Expiry Date or the Outside Expiry Date shall be forfeited and cancelled.

		
	6.4
	If an Early Expiry Date or the Outside Expiry Date applicable to any option granted under this Plan falls within a blackout period imposed by the Corporation under the Corporation's trading restrictions and blackout periods policy (as such policy may be amended from time to time by the Corporation), or within seven (7) business days immediately following such a blackout period, then the applicable Early Expiry Date or the Outside Expiry Date, as the case may be, will be automatically extended to the date which is seven (7) business days after the last day of the blackout period. The seven (7) business day extension period established in this paragraph is a fixed period which is not subject to Board discretion.

		
	7.
	Exercise of Options

		
	7.1
	Subject to the provisions of Section 6, an option may be exercised in whole, at any time, or in part, from time to time, during the Option Period, but in all cases in accordance with the exercise schedule established by the Board or the Committee and applicable at the time of the grant.

		
	7.2
	An option may be exercised by written notice to the Secretary of the Corporation. Such notice shall set forth the number of options exercised and the number of underlying Shares subscribed for pursuant to such exercise and the address to which the certificate evidencing such Shares is to be delivered. Such notice shall also be accompanied by a certified cheque made payable to the Corporation in the amount of the Exercise Price. The Corporation shall cause a certificate for the number of Shares specified in the notice to be issued in the name of the Participant and delivered to the address specified in the notice no later than ten (10) business days following the receipt of such notice and cheque.

		
	8.
	No Assignment

		
	8.1
	No option or interest therein shall be assignable by the Participant other than by will or in accordance with the applicable laws of estates and succession.

		
	9.
	Not a Shareholder

		
	9.1
	A Participant shall have no rights as a shareholder of the Corporation with respect to any Shares covered by his/her option until he/she shall have become the holder of record of such Shares.

		
	10.
	Change in Control or Other Fundamental Transaction

		
	10.1
	Notwithstanding anything contained to the contrary in this Plan or in any resolution of the Board in implementation thereof:

		
	10.1.1
	in the event: (i) the Corporation accepts an offer to amalgamate, merge or consolidate with any other entity (other than a wholly-owned Subsidiary) or to sell or license all or substantially all of its assets to any other entity (other than a wholly-owned Subsidiary); (ii) the Corporation signs a support agreement in customary form pursuant to which the Board agrees to support a takeover bid and recommends that shareholders of the Corporation tender their Shares to such takeover bid; or (iii) holders of greater than 50% of the Corporation's then outstanding Shares tender all of their Shares to a takeover bid made to all of the holders of the Shares to purchase all of the then issued and outstanding Shares, then, in each case, all of the outstanding Options shall, without any further action required to be taken by the Corporation, immediately vest. Each Participant shall thereafter be entitled to exercise all of such Options at any time up to and including, but not after the close of business on that date which is ten (10) days following the Closing Date. Upon the expiration of such ten (10)-day period, all rights of the Participant to such Options or to the exercise of same (to the extent not theretofore exercised) shall automatically thereupon terminate and have no further force or effect whatsoever. For the purposes of paragraph 10.1.1, "Closing Date" shall mean (x) the closing date of the amalgamation, merger, consolidation, sale or license transaction in the case of clause (i) above; (y) the first expiry date of the takeover bid on which each of the offeror's conditions are either satisfied or waived in the case of clause (ii) above; or (z) the date on which it is publicly announced that holders of greater than 50% of the Corporation's then outstanding Shares have tendered their Shares to a takeover bid in the case of clause (iii) above.

3

		
	11.
	Modification of the Plan

Board, shareholder and requisite regulatory approvals shall be required for any of the following amendments to be made to this Plan:
		
	11.1
	any amendment to Section 3.2 that would have the effect of permitting, without having to obtain shareholder approval on a "disinterested vote" at a duly convened shareholders' meeting, the grant of any option(s) under this Plan otherwise prohibited by Section 3.2;

		
	11.2
	any amendment to the number of securities issuable under this Plan (except for any adjustment described in paragraph 12.1.4 hereof);

		
	11.3
	any amendment which would permit any option granted under this Plan to be transferable or assignable other than by will or in accordance with the applicable laws of estates and succession;

		
	11.4
	the addition of a cashless exercise feature, payable in cash or securities, which does not provide for a full deduction of the number of underlying securities from this Plan reserve;

		
	11.5
	the addition of a deferred or restricted share unit or any other provision which results in employees receiving securities while no cash consideration is received by the Corporation;

		
	11.6
	with respect to any Participant (whether or not such Participant is an "insider" of the Corporation),

		
	(i)
	any reduction in the exercise price of any option after the option has been granted, or

		
	(ii)
	any cancellation of an option and the re-grant of that option under different terms, or

		
	(iii)
	any extension to the term of an option beyond the Outside Expiry Date (except for extensions made pursuant to Section 6.4),

except in respect of any adjustment described in paragraph 12.1.4 hereof;
		
	11.7
	any amendment to the method of determining the exercise price of an option granted pursuant to this Plan;

		
	11.8
	the addition of any form of financial assistance or any amendment to a financial assistance provision which is more favorable to employees;

		
	11.9
	any amendment to Section 3.3 that would have the effect of removing or increasing the limitations on the aggregate number of securities issuable to, and/or the aggregate fair value of options granted or that may be granted to, non-employee directors within any one-year period (except for any adjustment described in paragraph 12.1.4 hereof); and

		
	11.10
	any amendment to this Section 11.

		
	12.
	Amendments and Termination

		
	12.1
	The Board may, subject to receipt of requisite regulatory approval, where required, in its sole discretion, make all other amendments to this plan that are not contemplated in Section 11 above including, without limitation, the following:

		
	12.1.1
	amendments of a "housekeeping" or clerical nature or to clarify this Plan's provisions;

		
	12.1.2
	amendments regarding any vesting period of an option;

		
	12.1.3
	amendments regarding the extension of an option beyond an Early Expiry Date in respect of any Participant;

		
	12.1.4
	adjustments to the number of issuable Shares underlying, or the exercise price of, outstanding options resulting from a split or a consolidation of the Shares, a reclassification, the payment of a stock dividend, the payment of a special cash or non-cash distribution to the Corporation's shareholders on a pro rata basis provided such distribution is approved by the Corporation's shareholders in accordance with applicable law, a recapitalization, a reorganization or any other event which necessitates an equitable adjustment to the outstanding options in proportion with corresponding adjustments made to all outstanding Shares;

		
	12.1.5
	discontinuing or terminating this Plan; and

		
	12.1.6
	any other amendment which does not require shareholder approval under Section 11 hereof.

4

		
	12.2
	Notwithstanding Section 12.1 above, the Corporation shall not contravene any requirements, rules, laws and regulations of the TSX or of any regulatory authorities.

		
	12.3
	Notwithstanding any provisions to the contrary, any amendment to or termination of this Plan shall in no way amend or otherwise affect the conditions of the options already granted under this Plan to the extent that such options have not then been exercised, unless the rights of the Participant have already expired or have already been fully exercised or unless the Participant affected by such change has already agreed to it.

		
	13.
	Miscellaneous Provisions

		
	13.1
	The Corporation's obligations under the terms of this Plan are subject to all applicable laws, regulations or rules of any governmental agency or other competent authority in respect of the issuance or distribution of securities and to the rules of any stock exchange on which the Shares are listed. Each Participant shall agree to comply with such laws, regulations and rules and to provide to the Corporation any information or undertaking required to comply with such laws, regulations and rules.

		
	13.2
	The participation in this Plan of a director, an officer or an employee of the Corporation or any of its Subsidiaries shall be entirely optional and shall not be interpreted as conferring upon a director, an officer or an employee of the Corporation or any of its Subsidiaries any right or privilege whatsoever, except for the rights and privileges set out expressly in this Plan. Neither this Plan nor any act that is done under the terms of this Plan shall be interpreted as restricting the right of the Corporation or any of its Subsidiaries to terminate the employment of an officer or employee at any time. Any notice of dismissal given to an officer or employee at the time his/her employment is terminated, or any payment in the place and stead of such notice, or any combination of the two, shall not have the effect of extending the duration of the employment for purposes of this Plan.

		
	13.3
	No director, officer or employee of the Corporation or any of its Subsidiaries shall acquire the automatic right to be granted one or more options under the terms of this Plan by reason of any previous grant of options under the terms of this Plan.

		
	13.4
	This Plan does not provide for any guarantee in respect of any loss or profit which may result from fluctuations in the price of the Shares.

		
	13.5
	The Corporation and its Subsidiaries shall assume no responsibility as regards the tax consequences that participation in this Plan will have for a director, an officer or an employee of, or supplier of ongoing services to, the Corporation or any of its Subsidiaries, and such persons are urged to consult their own tax advisors in such regard.

		
	13.6
	This Plan and any option granted under the terms of this Plan shall be governed and interpreted according to the laws of the Province of Quebec and the laws of Canada applicable thereto.

		
	13.7
	This Plan modifies and restates the amended and restated stock option plan adopted by the Corporation on March 21, 2013. This Plan confers no other advantage upon the beneficiaries of the stock option plan.

 

5

STOCK OPTION PLAN
OF AETERNA ZENTARIS INC.
 SUBSCRIPTION FORM
 
(Date)
 
Aeterna Zentaris Inc.
1405 du Parc-Technologique Blvd.
Québec, Québec
G1P 4P5
 Attention of the Secretary
 I, the undersigned,                                              , hereby exercise                         options and subscribe for                         Common Shares of Aeterna Zentaris Inc. (the "Corporation") pursuant to the exercise of such options under the terms of the Stock Option Plan of the Corporation, out of the                           Common Shares available for purchase by the undersigned, and I enclose herewith my certified cheque (or money order) made payable to the order of Aeterna Zentaris Inc., in the amount of
dollars in payment of the said subscription.

___________________________________________
(Signature)

___________________________________________
(Full Address)

___________________________________________

___________________________________________
(Telephone)

6

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