Document:

Exhibit 10.3

 

 

 

 

 

 

 

 

ACASTI PHARMA inc.

 

STOCK OPTION PLAN

AS AMENDED April 15, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

     

    

acasti pharma inc.

 

STOCK OPTION PLAN

 

THIS PLAN adopted October 8, 2008, amended on April 29, 2009,
March 1, 2011, May 22, 2013, October 5, 2015, May 11, 2016, June 8, 2017, July 27, 2018 and April 15, 2019.

 

Article 1

DEFINITIONS AND INTERPRETATION

 

1.1                                     
Definitions. Where used in this Plan, unless there is something in the subject matter
or context inconsistent therewith, the following terms will have the meanings set forth below:

 

		(a)	"Associate" has the meaning ascribed to it in the
Securities Act.

 

		(b)	"Board" means the board of directors of the Corporation,
or any duly appointed committee thereof to which the board of directors of the Corporation has delegated the power to administer
and grant Options under this Plan, as constituted from time to time.

 

		(c)	"Cause" means, with respect to a particular Employee:

 

		(i)	"cause" as such term is defined in the written employment
agreement between the Corporation and the Employee; or

 

		(ii)	in the event there is no written employment agreement between the
Corporation and the Employee or "cause" is not defined in the written employment agreement between the Corporation and
the Employee, the usual meaning of cause under the laws of the Province of Québec.

 

		(d)	Change of Control” means: 

 

		(i)	a consolidation, reorganization, amalgamation, merger, acquisition
or other business combination (or a plan of arrangement in connection with any of the foregoing), other than solely involving the
Corporation and any one or more of its Associates, with respect to which all or substantially all of the Persons who were the beneficial
owners of the Shares and other securities of the Corporation immediately prior to such consolidation, reorganization, amalgamation,
merger, acquisition, business combination or plan of arrangement do not, following the completion of such consolidation, reorganization,
amalgamation, merger, acquisition, business combination or plan of arrangement, beneficially own, directly or indirectly, more
than 50% of the resulting voting rights (on a fully-diluted basis) of the Corporation or its successor; 

 

		(ii)	a resolution is adopted to wind-up, dissolve or liquidate the Corporation;

 

		(iii)	the sale, exchange or other disposition to a person other than an
Affiliate of the Corporation of all or substantially all of the Corporation’s assets; or 

 

		(iv)	a change in the composition of the Board, which occurs at a single
meeting of the shareholders of the Corporation or upon the execution of a shareholders’ resolution, such that individuals
who are members of the Board immediately prior to such meeting or resolution cease to constitute a majority of the Board, without
the Board, as constituted immediately prior to such meeting or resolution, having approved of such change; 

 

     

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		(e)	“Code” has the meaning given in Section 7.1 of
this Plan. 

 

		(f)	"Company" means, unless specifically indicated otherwise,
a corporation, incorporated association or organization, body corporate, partnership, trust, association, or other entity other
than an individual.

 

		(g)	"Consultant" means a person, other than an Employee
or Director of the Corporation, or a Company, who:

 

		(i)	provides on a bona fide basis consulting, technical, management
or other services to the Corporation or a Subsidiary of the Corporation under a written contract;

 

		(ii)	possesses technical, business, management or other expertise of value
to the Corporation or a Subsidiary of the Corporation;

 

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

 

		(iv)	has a relationship with the Corporation or a Subsidiary of the Corporation
that enables the individual to be knowledgeable about the business and affairs of the Corporation.

 

		(h)	"Corporation" means Acasti Pharma Inc., and includes
any successor corporation thereto.

 

		(i)	"Director" means a member of the board of directors
of the Corporation or a member of the board of directors of a Subsidiary of the Corporation to whom stock options may be granted
in reliance on a prospectus exemption under applicable Securities Laws.

 

		(j)	"Effective Date" means the effective date of this
Plan, as amended, being October 8, 2008.

 

		(k)	"Employee" means an individual who:

 

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

 

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

 

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

 

     

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		(l)	"Exchange" means the TSX Venture Exchange and, where
the context permits, any other exchange on which the Shares are or may be listed from time to time.

 

		(m)	"Exercise Notice" means the notice respecting the
exercise of an Option, in the form set out in the Option Agreement, duly executed by the Option Holder. 

 

		(n)	"Exercise Period" means the period during which
a particular Option may be exercised and, subject to earlier termination in accordance with the terms hereof, is the period from
and including the Grant Date through to and including the Expiry Date.

 

		(o)	"Exercise Price" means the price per Share at which
Shares may be purchased under an Option duly granted under this Plan, as determined in accordance with Section 4.3 of this Plan
and, if applicable, adjusted in accordance with Section 3.5 of this Plan.

 

		(p)	"Expiry Date" means the date determined in accordance
with Section 4.2 of this Plan and after which a particular Option cannot be exercised and is deemed to be null and void and of
no further force or effect.

 

		(q)	"Grant Date" means the date on which the Board grants
a particular Option.

 

		(r)	"Insider" means an “insider” as defined
by the Exchange from time to time in its rules and regulations. 

 

		(s)	“ISOs” has the meaning given in Section 7.1 of
this Plan. 

 

		(t)	"Market Price" at any date in respect of the Shares
shall be the closing price of such Shares on the Exchange (and if listed on more than one stock exchange, then the highest of such
closing prices) on the last Business Day prior to the Grant Date (or, if such Shares are not then listed and posted for trading
on the Exchange, on such stock exchange in Canada on which the Shares are listed and posted for trading as may be selected for
such purpose by the Board). In the event that such Shares did not trade on such Business Day, the Market Price shall be the average
of the bid and asked prices in respect of such Shares at the close of trading on such date. In the event that such Shares are not
listed and posted for trading on any stock exchange, the Market Price shall be the fair market value of such Shares as determined
by the Board in its sole discretion;

 

		(u)	"Option" means an option to acquire Shares granted
to a Director, Employee or Consultant of the Corporation, or any Subsidiary of the Corporation pursuant to this Plan.

 

		(v)	"Option Agreement" means an agreement, in the form
substantially similar as that set out in Schedule "A" hereto, evidencing an Option granted under this Plan.

 

		(w)	"Option Holder" means a Director, Employee or Consultant
or former Director, Employee or Consultant, to whom an Option has been granted and who continues to hold an unexercised and unexpired
Option or, where applicable, the Personal Representative of such person.

 

     

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		(x)	"Plan" means this stock option plan, as may be amended
from time to time.

 

		(y)	"Person" means a Company or an individual.

 

		(z)	"Personal Representative" means:

 

		(i)	in the case of a deceased Option Holder, the executor or administrator
of the deceased duly appointed by a court or public authority having jurisdiction to do so; and

 

		(ii)	in the case of an Option Holder who, for any reason, is unable to
manage his or her affairs, the individual entitled by law to act on behalf of such Option Holder.

 

		(aa)	"QBCA" means the Business Corporations Act
(Québec), as amended, or such other successor legislation which may be enacted, from time to time.

 

		(bb)	"Regulatory Authorities" means the Exchange and
any other organized trading facilities on which the Corporation's Shares are listed and all securities commissions or similar securities
regulatory bodies having jurisdiction over the Corporation.

 

		(cc)	"Re-Organization Event" has the meaning given in
Section 3.5 of this Plan.

 

		(dd)	"Securities Act" means the Securities Act
(Québec), as amended, or such other successor legislation as may be enacted, from time to time.

 

		(ee)	"Securities Laws" means securities legislation,
securities regulation and securities rules, as amended, and the policies, notices, instruments and blanket orders in force from
time to time that govern or are applicable to the Corporation or to which it is subject, including, without limitation, the Securities
Act.

 

		(ff)	"Share" means one (1) common share without par value
in the capital stock of the Corporation as constituted on the Effective Date or, in the event of an adjustment contemplated by
Section 3.5 of this Plan, such other shares or securities to which an Option Holder may be entitled upon the due exercise of an
Option as a result of such adjustment.

 

		(gg)	"Subsidiary" means a subsidiary as defined in the
QBCA.

 

		(hh)	"Termination Date" means:

 

		(i)	in the case of the resignation of the Option Holder as an Employee
of the Corporation, the date that the Option Holder provides notice of his or her resignation as an Employee of the Corporation
to the Corporation; 

 

		(ii)	in the case of the termination of the Option Holder as an Employee
of the Corporation by the Corporation for any reason other than death, the effective date of termination set out in the Corporation's
notice of termination of the Option Holder as an Employee of the Corporation to the Option Holder; 

 

     

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		(iii)	in the case of the termination of the written contract of the Option
Holder to provide consulting services to the Corporation, the effective date of termination set out in any notice provided by one
of the parties to the written contract to the other party; or

 

		(iv)	the effective date of termination of a Director, Employee or Consultant
pursuant to an order made by any Regulatory Authority having jurisdiction to so order.

 

		(ii)	“U.S. Taxpayer” has the meaning given in Section
7.1 of this Plan. 

 

1.2                                     
Choice of Law. This Plan is established under and the provisions of this Plan will be
subject to and interpreted and construed in accordance with the laws of the Province of Québec.

 

1.3                                     
Headings. The headings used herein are for convenience only and are not to affect the
interpretation of this Plan.

 

Article 2

PURPOSE AND ADMINISTRATION

 

2.1                                     
Purpose. The purpose of this Plan is to provide the Corporation with a share-related mechanism
to attract, retain and motivate qualified Directors, Employees and Consultants of the Corporation, and any Subsidiary of the Corporation,
to reward such of those Directors, Employees and Consultants as may be granted Options under this Plan by the Board from time to
time for their contributions toward the long term goals and success of the Corporation and to enable and encourage such Directors,
Employees and Consultants to acquire Shares as long term investments and proprietary interests in the Corporation. 

 

2.2                                     
Administration. This Plan will be administered by the Board. The Board may make, amend
and repeal at any time and from time to time such regulations not inconsistent with this Plan as it may deem necessary or advisable
for the proper administration and operation of this Plan and such regulations will form part of this Plan. The Board may delegate
to any director or other senior officer or employee of the Corporation such administrative duties and powers as it may see fit.

 

2.3                                     
Board Powers. The Board shall have the power, where consistent with the general purpose
and intent of this Plan and subject to the specific provisions of this Plan to, amongst other things:

 

		(a)	establish policies and to adopt rules and regulations for carrying
out the purposes, provisions and administration of this Plan;

 

		(b)	interpret and construe this Plan and to determine all questions arising
out of this Plan or any Option, and any such interpretation, construction or determination made by the Board shall be final, binding
and conclusive for all purposes;

 

		(c)	determine the number of Shares reserved for issuance by each Option;

 

		(d)	determine the Exercise Price of each Option;

 

		(e)	determine the time or times when Options will be granted and exercisable;

 

     

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		(f)	determine if the Shares which are issuable on the due exercise of
an Option will be subject to any restrictions upon the due exercise of such Option; and

 

		(g)	prescribe the form of the instruments and certificates relating to
the grant, exercise and other terms of Options.

 

2.4                                     
Board Discretion. The Board may, in its discretion, require as conditions to the grant
or exercise of any Option that the Option Holder shall have:

 

		(a)	represented, warranted and agreed in form and substance satisfactory
to the Corporation that the Option Holder is acquiring and will acquire such Option and the Shares to be issued upon the exercise
thereof for his, her or its own account, for investment and not with a view to or in connection with any distribution, that the
Option Holder has had access to such information as is necessary to enable him, her or it to evaluate the merits and risks of such
investment and that the Option Holder is able to bear the economic risk of holding such Shares for an indefinite period;

 

		(b)	agreed to restrictions on transfer in form and substance satisfactory
to the Corporation and to an endorsement on any option agreement or certificate representing the Shares making appropriate reference
to such restrictions; and

 

		(c)	agreed to indemnify the Corporation in connection with the foregoing.

 

2.5                                     
Board Requirements. Any Option granted under this Plan shall be subject to the requirement
that, if at any time counsel to the Corporation shall determine that the listing, registration or qualification of the Shares issuable
upon due exercise of such Option upon any securities exchange or under any Securities Laws of any jurisdiction, or the consent
or approval of Regulatory Authority, is necessary as a condition of, or in connection with, the grant or exercise of such Option
or the issuance or purchase of Shares thereunder, such Option may not be accepted or exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been effected or obtained on conditions acceptable to the
Board. Nothing herein shall be deemed to require the Corporation to apply for or to obtain such listing, registration, qualification,
consent or approval.

 

2.6                                     
Interpretation. The interpretation by the Board of any of the provisions of this Plan
and any determination by it pursuant thereto will be final and conclusive and will not be subject to any dispute by any Option
Holder. No member of the Board or any individual acting pursuant to authority delegated by it hereunder will be liable for any
action or determination in connection with this Plan made or taken in good faith and each member of the Board and each such individual
will be entitled to indemnification with respect to any such action or determination in the manner provided for by the Corporation.

 

Article 3

GRANT OF OPTIONS

 

3.1                                     
Board to Issue Shares. The Shares to be issued to Option Holders upon the exercise of
Options will be previously authorized but unissued Shares in the capital stock of the Corporation.

 

3.2                                     
Participation. The Board will, from time to time and in its sole discretion, determine
(i) those Directors, Employees, Consultants (and, when applicable, to a Company wholly owned by any such Director, Employee or
Consultant), if any, to whom Options are to be granted based upon certain participation criteria, which criteria include but are
not limited to functions within the Corporation, or any Subsidiary of the Corporation, seniority or actual and future contributions
to the success of to the Corporation, or any Subsidiary of the Corporation, and (ii) the number of Options to be granted to such
Directors, Employees or Consultants. The Board may only grant options to an Employee or Consultant if such Employee or Consultant
is a bona fide Employee or Consultant of the Corporation or a Subsidiary of the Corporation, as the case may be. The Board
may, in its sole discretion, grant the majority of the Options to Insiders of the Corporation. However, in no case will the grant
of Options under this Plan, together with any proposed or previously existing security based compensation arrangement, result in
(in each case, as determined on the Grant Date):

 

     

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		(a)	the grant to any one Consultant of the Corporation, or any Subsidiary of the Corporation, within
any twelve (12) month period, of Options reserving for issuance a number of Shares exceeding in the aggregate two percent (2%)
of the Corporation’s issued and outstanding Shares (on a non-diluted basis); or

 

		(b)	the grant, within any twelve (12) month period, to all Directors, Employees and/or
Consultants of the Corporation (or any Subsidiary of the Corporation) conducting investor relations services, of Options reserving
for issuance a number of Shares exceeding in the aggregate two percent (2%) of the Corporation’s issued and outstanding Shares
(on a non-diluted basis), calculated at the date an option is granted to any such Person.

 

3.3                                     
Number of Shares Reserved. Subject to adjustment as provided for in Section 3.4 of this
Plan and any subsequent amendment to this Plan, the number of Shares reserved for issuance and which will be available for purchase
pursuant to Options granted under this Plan, together with any proposed or previously existing security based compensation arrangement,
will equal to 11,719,910, representing 15% of the issued and outstanding Shares of the Corporation as of April 9, 2019. Subject
to the provisions and restrictions of this Plan, if any Option is cancelled, expired or otherwise terminated for any reason whatsoever,
the number of Shares in respect of which Option is cancelled, expired or otherwise terminated for any reason whatsoever, as the
case may be, will ipso facto again be immediately available for purchase pursuant to Options granted under this Plan. 

 

3.4                                     
Adjustments. If, prior to the complete exercise of an Option, the Shares are consolidated,
subdivided, converted, exchanged or reclassified or in any way substituted for (collectively, a "Re-Organization Event"),
an Option, to the extent that it has not been exercised, will be adjusted by the Board in accordance with such Re-Organization
Event in the manner the Board deems appropriate and equitable. No fractional Shares will be issued upon the exercise of the Options
and accordingly, if as a result of the Re-Organization Event, an Option Holder would become entitled to a fractional Share, such
Option Holder will have the right to purchase only the next lowest whole number of Shares and no payment or other adjustment will
be made with respect to the fractional interest so disregarded.

 

3.5                                     
Notification of Grant. Following the approval by the Board of the granting of an Option,
the Board will notify the Option Holder in writing of the award and will enclose with such notice the Option Agreement representing
the Option so granted.

 

3.6                                     
Copy of Plan. Each Option Holder, concurrently with the notice of the award of the Option,
will, upon written request, be provided with a copy of this Plan, and a copy of any amendment to this Plan will be promptly provided
by the Board to each Option Holder.

 

3.7                                     
Limitation. This Plan does not give any Option Holder that is a Director the right to
serve or continue to serve as a Director of the Corporation, does not give any Option Holder that is an Employee the right to be
or to continue to be employed by the Corporation and does not give any Option Holder that is a Consultant the right to be or continue
to be retained or engaged by the Corporation as a consultant for the Corporation.

 

     

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Article 4

TERMS AND CONDITIONS OF OPTIONS

 

4.1                                     
Term of Option. Subject to Section 4.2, the Expiry Date of an Option will be the date
so fixed by the Board at the time the particular Option is granted, provided that such date will be no later than the tenth (10th)
anniversary of the Grant Date of such Option.

 

4.2                                     
Termination of Option. Subject to such other terms or conditions that may be attached
to Options granted hereunder, an Option Holder may exercise an Option in whole or in part at any time or from time to time during
the Exercise Period. Any Option or part thereof not exercised within the Exercise Period will terminate and become null, void and
of no effect as of 5:00 p.m. (Montréal time) on the Expiry Date. The Expiry Date of an Option will be the earlier
of the date so fixed by the Board at the time the Option is granted and the date established, if applicable, in subsections (a)
to (c) below:

 

		(a)	Death, Disability or Retirement of Option Holder

 

In the event that the Option Holder should die,
become disable or retire from the Corporation while he or she is still an Employee (if he or she holds his or her Option as an
Employee) or in the event that the Option Holder should die or become disable while he or she is still a Director (if he or she
holds his or her Option as a Director) or a Consultant (if he or she holds his or her Option as a Consultant), the Expiry Date
will be the first anniversary of the Option Holder's date of death, disability or retirement, as applicable.

 

		(b)	Ceasing to Hold Office

 

In the event that the Option Holder holds his
or her Option as a Director of the Corporation and such Option Holder ceases to be a Director of the Corporation other than by
reason of death or disability the Expiry Date of the Option will not exceed the sixtieth (60th) day following the date
the Option Holder ceases to be a Director of the Corporation unless the Option Holder ceases to be a Director of the Corporation
as a result of:

 

		(i)	ceasing to meet the qualifications of a director set forth the QBCA; or

 

		(ii)	an ordinary resolution having been passed by the shareholders of the Corporation pursuant to the
QBCA; or

 

		(iii)	an order made by any Regulatory Authority having jurisdiction to so order,

 

in which case the Expiry Date will be the date the Option Holder
ceases to be a Director of the Corporation.

 

		(c)	Ceasing to be an Employee or Consultant

 

In the event that the Option Holder holds his or her Option as an
Employee or Consultant of the Corporation and such Option Holder ceases to be an Employee or Consultant of the Corporation other
than by reason of death, disability or retirement, as applicable in accordance with Section 4.2(a), the Expiry Date of the Option
will not exceed the sixtieth (60th) day following the Termination Date or, if the Employee or Consultant provides investor relations
services, the thirtieth (30th) day following the Termination Date, unless the Option Holder:

 

		(i)	ceases to be an Employee of the Corporation as a result of termination for Cause; or

 

     

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		(ii)	ceases to be an Employee or Consultant of the Corporation as a result of an order made by any Regulatory
Authority having jurisdiction to so order,

 

in which case the Expiry Date will be the Termination
Date.

 

		(d)	Bankruptcy

 

In the event that an Option Holder commits an act of bankruptcy
or any proceeding is commenced against an Option Holder under the Bankruptcy and Insolvency Act (Canada) or other applicable
bankruptcy or insolvency legislation in force at the time of such bankruptcy or insolvency, the Expiry Date of the Option will
be the date immediately preceding the date on which such Option Holder commits such act of bankruptcy.

 

Notwithstanding anything contained in this Plan,
with the exception of Section 5.5, in no case will an Option be exercisable after the tenth (10th) anniversary of the
Grant Date of the Option.

 

4.3                                     
Exercise Price. The price at which an Option Holder may purchase a Share upon the exercise
of an Option (the "Exercise Price") will be determined by the Board and set forth in the Option Agreement issued
in respect of such Option and, in any event, will not be less than the Market Price of the Corporation's Shares calculated as of
the Grant Date. Notwithstanding anything else contained in this Plan, in no case will the Market Price be less than the minimum
prescribed by each of the organized trading facilities as would apply to the Grant Date in question.

 

4.4                                     
Vesting. The date or dates on and after which a particular Option, or part thereof,
may be exercised will be determined by the Board and set forth in the Option Agreement issued in respect of such Option;
provided that: 

 

		(a)	all Options granted to a Director will be vested gradually and evenly over a period of
at least eighteen (18) months, on a quarterly basis; and

 

		(b)	all Options granted to an Employee will be vested gradually and evenly over a period of at least
thirty-six (36) months, on a quarterly basis.

 

4.5                                     
Additional Terms. Subject to all applicable Securities Laws of all applicable Regulatory
Authorities, the Board may attach other terms and conditions to the grant of a particular Option, such terms and conditions to
be referred to in the Option Agreement at the time of grant. These terms and conditions may include, but are not necessarily limited
to, the following:

 

		(c)	providing that an Option expires on a date other than as provided for herein;

 

		(d)	providing that a portion or portions of an Option vest after certain periods of time or upon the
occurrence of certain events, or expire after certain periods of time or upon the occurrence of certain events;

 

		(e)	providing that an Option be exercisable immediately, in full, notwithstanding that it has vesting
provisions, upon the occurrence of certain events, such as a friendly or hostile take-over bid for the Corporation; and

 

		(f)	providing that an Option issued to, held by or exercised by an Option Holder who is a citizen or
resident of the United Sates of America, and otherwise meeting the statutory requirements, be treated as an "Incentive Stock
Option" as that term is defined for purposes of the United States of America Internal Revenue Code of 1986, as amended.

 

     

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4.6                                     
Non-Transferability of Options. The Options granted hereunder are not assignable, transferable
or negotiable (whether by operation of law or otherwise) and may not be assigned or transferred, provided however that the Personal
Representative of an Option Holder may, to the extent permitted by Section 5.1 of this Plan, exercise the Option within the Exercise
Period. Upon any attempt to assign, transfer, negotiate, pledge, hypothecate or otherwise dispose of or transfer an Option contrary
to this Section 4.6 of this Plan, or upon the levy of any attachment or similar process upon an Option, the Option and all rights,
benefits and privileges arising thereunder or therefrom, at the sole discretion and election of the Board, shall cease and terminate
and be of no further force or affect whatsoever.

 

4.7                                     
No Rights as Shareholders. An Option Holder shall not have any rights as a shareholder
of the Corporation with respect to any of the Shares covered by such Option until the date of issuance of a certificate for Shares
upon the due exercise of such Option, in full or in part, and then only with respect to the Shares represented by such certificate
or certificates. Without in any way limiting the generality of the foregoing, no adjustment shall be made for dividends or other
rights for which the record date is prior to the date such share certificate is issued.

 

Article 5

EXERCISE OF OPTION

 

5.1                                     
Exercise of Option. An Option may be exercised only by the Option Holder or the Personal Representative of the Option Holder. Subject
to the provisions of this Plan, an Option Holder or the Personal Representative of an Option Holder may exercise an Option in whole
or in part at any time or from time to time during the Exercise Period up to 5:00 p.m. (Montréal time) on the Expiry Date
by delivering to the Secretary of the Corporation an Exercise Notice indicating the number of Shares to be purchased pursuant to
the exercise of the Option, the applicable Option Agreement and a certified cheque or bank draft payable to "Acasti Pharma
Inc." in an amount equal to the aggregate Exercise Price of the Shares to be purchased pursuant to the exercise of the Option.

 

5.2                                     
Withholding Taxes. In addition to the other conditions on exercise set forth in this Plan, the exercise of each Option
granted under this Plan is subject to the satisfaction of all applicable withholding taxes or other withholding liabilities as
the Corporation may determine to be necessary or desirable in respect of such exercise. The Corporation will require that an Option
Holder pay to the Corporation, in addition to, and in the same manner as, the Exercise Price, such amount as the Corporation is
obliged to remit to the relevant taxing authority in respect of the exercise of the Option.

 

5.3                                     
Issue of Share Certificates. As soon as practicable following the receipt of (i) the Exercise
Notice and the certified cheque or bank draft referred to in Section 5.1, and (ii) any amounts payable under Section 5.2, the Board
will cause to be delivered to the Option Holder the Shares so purchased in certificated or uncertificated form. If the number of
Shares so purchased is less than the number of Shares subject to the Option Agreement, the Option Holder will surrender the Option
Agreement to the Corporation and the Board will forward a new Option Agreement to the Option Holder concurrently with delivery
of the Shares for the balance of Shares available under the Option.

 

5.4                                     
Condition of Issue. The Options and the issue of Shares by the Corporation pursuant to
the exercise of Options are subject to the terms and conditions of this Plan and compliance with the rules and policies of all
applicable Regulatory Authorities to the granting of such Options and to the issuance and distribution of such Shares, and to all
applicable Securities Laws. The Option Holder agrees to comply with all such laws, regulations, rules and policies and agrees to
furnish to the Corporation any information, reports or undertakings required to comply with and to fully cooperate with the Corporation
in complying with such laws, regulations, rules and policies. Notwithstanding any of the provisions contained in this Plan or in
any Option, the Corporation's obligation to issue Shares to an Option Holder pursuant to the exercise of any Option granted under
the Plan shall be subject to:

 

     

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		(a)	completion of such registration or other qualification of such Shares
or obtaining approval of such Regulatory Authority as the Corporation shall determine to be necessary or advisable in connection
with the authorization, issuance or sale thereof;

 

		(b)	the admission of such Shares to listing on any stock exchange on
which the Shares may then be listed;

 

		(c)	the receipt from the Option Holder of such representations, warranties,
agreements and undertakings, as the Corporation determines to be necessary or advisable in order to safeguard against the violation
of the Securities Laws of any jurisdiction; and

 

		(d)	the satisfaction of any conditions on exercise prescribed pursuant
to this Plan.

 

5.5                                     
Blackout Period. If an Option expires during, or within five business days after, a trading
black-out period imposed by the Corporation to restrict trades in the Corporation’s securities, then, notwithstanding any
other provision of the Plan, the Option shall expire ten business days after the trading black-out period is lifted by the Corporation,
subject to the maximum period of time during which an Option is exercisable under Sections 7.3 of this Plan.

 

Article 6

AMENDMENT AND TERMINATION

 

6.1                                     
Amendment Without Shareholder Approval. Subject to the prior approval of the Exchange,
The Board may amend, suspend or discontinue the Plan, and amend or discontinue any Options granted under the Plan, at any time
without shareholder approval. Without limiting the foregoing, the Board is specifically authorized to amend the terms of the Plan,
and the terms of any Options granted under the Plan, without obtaining shareholder approval, to:

 

		(a)	amend the vesting provisions to the extent permitted
under the rules and regulations of the Exchange;

 

		(b)	amend the termination provisions, except as otherwise provided in
Section 6.3 (b) hereof;

 

		(c)	amend the eligibility requirements of eligible Directors, Employees
or Consultants which would have the potential of broadening or increasing Insider participation;

 

		(d)	add any form of financial assistance;

 

		(e)	amend a financial assistance provision which is more favorable to
Directors, Employees or Consultants;

 

		(f)	add a deferred or restricted share unit or any other provision which
results in Directors, Employees or Consultants receiving securities while no cash consideration is received by the Corporation;
and

 

     

    -12-

    

		(g)	make other amendments of a housekeeping nature or to comply with
the requirements of any Regulatory Authority.

 

6.2                                     
Amendment with Shareholder Approval. Notwithstanding Section 6.1, no amendments to the
Plan to:

 

		(a)	increase the number of Shares reserved for issuance under the Plan
(including a change from a fixed maximum number of shares to a fixed maximum percentage of Shares);

 

		(b)	change the manner of determining the Exercise Price; or

 

		(c)	amend the amending provisions of Sections 6.1 to 6.3 of this Plan;
or

 

		(d)	change the employees (or class of employees) eligible to receive
options under this Plan

 

shall be made without obtaining approval of the shareholders in
accordance with the requirements of the Exchange.

 

6.3                                     
Amendment of Insider Options. Notwithstanding Section 6.1, no amendments to granted Options
to:

 

		(a)	reduce the Exercise Price for the benefit of Insiders; or

 

		(b)	extend the termination date for the benefit of Insiders, other than
in accordance with Section 5.4 hereof;

 

shall be made without obtaining approval of the shareholders, or
approval of the disinterested shareholders for amendments under Section 6.3 (a), in accordance with the requirements of the Exchange;
and no action shall be taken with respect to granted Options without the consent of the Option Holder, unless the Board determines
that such action does not materially alter or impair such Option.

 

6.4                                     
Options Granted Prior to Termination. No amendment, suspension or discontinuance of the
Plan or of any granted Option may contravene the requirements of the Exchange or any securities commission or regulatory body to
which the Plan or the Corporation is now or may hereafter be subject to. Termination of the Plan shall not affect the ability of
the Board to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such
termination.

 

6.5                                     
Retrospective Amendment. The Board may from time to time retrospectively amend this Plan
and, with the consent of the affected Option Holders, retrospectively amend the terms and conditions of any Options that have been
previously granted. 

 

6.6                                     
Change of Control. Notwithstanding anything contained to the contrary in this Plan or
in any resolution of the Board in implementation thereof:

 

		(a)	in the event of a proposed Change of Control of the Corporation,
the Corporation shall have the right, upon written notice thereof to each Option Holder holding Options under the Plan, to permit
the exercise of all such Options within the twenty (20) day period next following the date of such notice and to determine that
upon the expiration of such twenty (20) day period, all rights of the Option Holders to such Options or to exercise same (to the
extent not theretofore exercised) shall ipso facto terminate and cease to have further force or effect whatsoever;

 

     

    -13-

    

		(b)	in the event of a Change of Control of the Corporation where a notice
by the Corporation was not sent to Option Holders in accordance with Section 6.6(a), 

 

		(i)	all of the Option Holder’s Options will immediately vest on
the date of such event. In such event, all Options so vested will be exercisable from such date until their respective expiry dates,
subject to the terms of any employment agreement or other contractual arrangement between the Option Holder and the Corporation.
For greater certainty, upon a Change of Control, Option Holders shall not be treated any more favourably than holders of Shares
with respect to the consideration that the Option Holders would be entitled to receive for their Shares; and

 

		(ii)	if the Option Holder elects to exercise its Options following a Change
of Control, such Option Holder shall be entitled to receive, and shall accept, in lieu of the number of Shares which such Option
Holder was entitled upon such exercise, the kind and amount of shares and other securities, property or cash which such Option
Holder could have been entitled to receive as a result of such Change of Control, on the effective date thereof, had such Option
Holder been the registered holder of the number of Shares to which such Option Holder was entitled to purchase upon exercise of
such Options.

 

6.7                                     
Extension of Expiration Date, Non-Applicability of Termination of Employment Provisions.
Subject to the rules of any relevant Regulatory Authority and Securities Laws, the Board may, by resolution:

 

		(a)	extend the Expiration Date of any Option, but shall not, in the event
of any such advancement or extension, be under any obligation to advance or extend the date on or by which Options may be exercised
by any other Option Holder; and

 

		(b)	decide that any of the provisions hereof concerning the effect of
termination of the Option Holder's employment shall not apply to any Option Holder for any reason acceptable to the Board.

 

Notwithstanding the provisions of Sections
6.6 and 6.7, should changes be required to the Plan by any Regulatory Authority of any jurisdiction to which this Plan or the Corporation
now is or hereafter becomes subject, such changes shall be made to the Plan as are necessary to conform with such requirements
and, if such changes are approved by the Board, the Plan, as amended, shall be filed with the records of the Corporation and shall
remain in full force and effect in its amended form as of and from the date of its adoption by the Board.

 

6.8                                     
Regulatory Authority Approval. This Plan and any amendments hereto are subject to all
necessary approvals of the applicable Regulatory Authorities.

 

6.9                                     
Agreement. The Corporation and every Option granted hereunder will be bound by and subject
to the terms and conditions of this Plan. By accepting an Option granted hereunder, the Option Holder has expressly agreed with
the Corporation to be bound by the terms and conditions of this Plan.

 

6.10                                 
Effective Date of Plan. Upon approval by the shareholders of the Corporation in accordance
with the QBCA, and by acceptance by the Exchange (if the Shares are listed or posted on an Exchange and such acceptance is required),
the amendments to this Plan made on May 11, 2016 shall be deemed to be effective as of the Effective Date. Any Options granted
prior to such approval and acceptance(s), that exceed the previous number of Options available for grant, shall be conditional
upon such approval and acceptance(s) being given and no such Options may be exercised unless such approval and acceptance is given.

 

     

    -14-

    

6.11                                 
Governing Law. This Plan and all matters to which reference is made herein shall be governed
by and interpreted in accordance with the laws of the Province of Québec and the federal laws of Canada applicable therein.

 

Article 7

U.S. TAXPAYERS

 

7.1                                     
Provisions for U.S. Taxpayers. Options granted under this Plan to U.S. Taxpayers may
be nonqualified stock options or incentive stock options intended to qualify under Section 422 (“ISOs”) of the
United States Internal Revenue Code of 1986 and the applicable authority thereunder (the “Code”). Each Option
shall be designated in the Option Agreement as either an ISO or a non-qualified stock option. “U.S. Taxpayer”
means a Person who is a U.S. citizen, U.S. permanent resident or U.S. tax resident for the purposes of the Code whose purchase
of Shares under this Plan would be subject to U.S. taxation under the Code. Such Person shall be considered a U.S. Taxpayer solely
with respect to such options. Options may be granted as ISOs only to individuals who are employees of the Corporation or any present
or future “subsidiary corporation” or “parent corporation” as those terms are defined in Section 424(e)
and (f) of the Code, and shall not be granted to non-employee Directors or independent contractors. If an Option Holder ceases
to be employed by the Corporation and/or all “subsidiary corporations” or “parent corporations” as those
terms are defined in Section 424(e) and (f) of the Code, other than by reason of death or disability (meaning “permanent
and total disability” as defined in Section 22(e)(3) of the Code), Options shall be eligible for treatment as ISOs only if
exercised no later than three months following such termination of employment.

 

7.2                                     
ISOs. The maximum number of Options that may be granted as ISOs is equal to
the maximum number of Shares issuable under Section 3.3. The terms and conditions of any ISOs granted hereunder, including the
eligible recipients of ISOs, shall be subject to the provisions of Section 422 of the Code, and the terms, conditions, limitations
and administrative procedures established by the Board from time to time in accordance with this Plan. At the discretion of the
Board, ISOs may be granted to any Employee of the Corporation, its “parent corporation” or any “subsidiary corporation”of
the Corporation, as such terms are defined in Sections 424(e) and (f) of the Code.

 

7.3                                     
ISO Grants to 10% Shareholders. Notwithstanding anything to the contrary
in this Plan, if an ISO is granted to a Person who owns shares representing more than ten percent of the voting power of all classes
of shares of the Corporation or of a “subsidiary corporation” or “parent corporation”, as such terms are
defined in Section 424(e) and (f) of the Code, the term of the Option shall not exceed five years from the time of grant of such
Option and the Exercise Price shall be at least 110 percent (110%) of the Market Price (at the time of grant) of the Shares subject
to the Option.

 

7.4                                     
$100,000 Per Year Limitation for ISOs. To the extent the aggregate Market Price
(determined at the time of grant) of the Shares for which ISOs are exercisable for the first time by any Person during any calendar
year (under all plans of the Corporation) exceeds $100,000, such excess ISOs shall be treated as nonqualified stock options.

 

7.5                                     
Disqualifying Dispositions.Each Person awarded an ISO under this Plan shall
notify the Corporation in writing immediately after the date he or she makes a disqualifying disposition of any Shares acquired
pursuant to the exercise of such ISO. A disqualifying disposition is any disposition (including any sale) of Shares before the
later of (i) two years after the time of grant of the ISO or (ii) one year after the date the Person acquired the Shares by exercising
the ISO. The Corporation may, if determined by the Board and in accordance with procedures established by it, retain possession
of any Shares acquired pursuant to the exercise of an ISO as agent for the applicable Person until the end of the period described
in the preceding sentence, subject to complying with any instructions from such Person as to the sale of such Share.

 

     

    -15-

    

7.6                                     
Section 409A. Any Options granted to U.S. Taxpayers shall be limited to Employees
or Consultants providing services to the Corporation or to an affiliate which is an “eligible issuer”, as defined in
final Treas. Reg. 1.409A-1(b)(iii) (this includes corporate subsidiaries in which the Corporation has a controlling interest).

 

		(a)	No extension of term of an Option shall extend beyond the latest
date that the right could have expired by its original terms.

 

		(b)	Any replacement options issued under Section 3.5 or 6.6 of this Plan
shall comply with U.S. Treas. Reg. 1.424-1 as if the Option were a incentive stock option (ISO) so that the ratio of the Exercise
Price to the fair market value of Shares subject to the Options immediately after the replacement may not be greater than the ratio
of the Exercise Price to the fair market value of Shares subject to the Options immediately before the replacement.

 

7.7                                     
Transferability.Notwithstanding any other provision in this Plan, an ISO is not transferable except by will
or by the laws of descent and distribution, and may be exercised, during the Option Holder’s lifetime, only by such Option
Holder.

 

 

 

Adopted by the Board on October 8, 2008, as amended on
April 29, 2009, March 1, 2011, May 22, 2013, October 5, 2015, May 11, 2016, June 8, 2017, July 27, 2018 and April 15,
2019 and last approved by the shareholders on August 27, 2019.Exhibit

Exhibit 10.1

EXECUTION VERSION

 CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT

This AGREEMENT (“Agreement”) made June 30, 2020 (the “Effective Date”), by and between Sterling Jewelers Inc., a Delaware corporation (including its successors and assigns, the “Company”), and Judith Lynn Dennison (the “Employee”).
WHEREAS, the Company and the Employee entered into that certain Termination Protection Agreement, dated October 15, 2015, as amended (“TPA”);
WHEREAS, the Company acknowledges that the Employee has voluntarily tendered her resignation, to be effective August 31, 2020; 
WHEREAS, the Company desires to continue to employ the Employee and the Employee has agreed to continue to be employed by the Company through the Termination Date (as defined below);
WHEREAS, the Employee and the Company both agree that the Employee’s employment with the Company and its subsidiaries and affiliates will terminate effective as of the Termination Date or otherwise pursuant to the terms and conditions of this Agreement. 
NOW, THEREFORE, in consideration of such services and the mutual covenants and promises herein contained, the Company and the Employee hereby agree as follows:
1.Resignation.  The Employee acknowledges that on August 31, 2020 the Employee’s employment with the Signet Group will terminate (the “Termination Date”).  As of the Termination Date, the Employee will resign from the Employee’s position, Chief Legal and Transformation Officer of Signet Jewelers Limited and its subsidiaries (the “Signet Group”), and resign from and/or be removed from all offices and directorships held by the Employee in the Company or any of its subsidiaries or affiliates.  The Employee agrees to execute any documentation presented by the Company to effectuate all such resignations and/or removals from such offices and/or directorships held by the Employee. If Employee’s employment is terminated prior to the Termination Date, the TPA shall govern such termination and this Agreement shall have no further force and effect.

2.Termination.

(a)Accrued Benefits. The Employee shall be entitled to receive: (i) base salary and accrued and unused vacation through the Termination Date in accordance with the Company’s normal payroll practices, (ii) any annual bonus or long-term incentive plan payment that has been earned by the Employee for a completed fiscal year prior to the Termination Date (or with respect to a long-term incentive plan payment, a completed performance cycle) ending prior to the date of termination of employment but which remains unpaid as of such date payable in accordance with the applicable plan, and (iii) any vested benefits to which the Employee is entitled under the employee benefit plans of the Company, payable pursuant to the terms and conditions of such benefit plans.     

(b)Payments.  Subject to the Employee’s timely execution, delivery and non-revocation of a Release (as described in Section 2(c) below) on or following the Termination Date, and continued compliance with Sections 5, 6, 7, 8 and 9 below, the Employee shall be entitled to receive a lump sum amount equal to the full amount of the Short Term Incentive Plan (“STIP”) bonus the Employee would have otherwise received for the first half of fiscal year 2021, based on the actual level of achievement of the target set for such portion of fiscal year 2021, payable during the period commencing on the 15th of April and ending on the 31st of May following the end of fiscal year 2021. For the avoidance of doubt, the Employee shall be eligible to earn a STIP bonus equal to one half of the Employee’s target bonus for fiscal year 2021 (the Employee’s target bonus for fiscal year 2021 is 75% of base salary or $487,500; 50% * $487,500 = $243,750 at target level of performance), subject to the actual level of achievement of the performance metrics applicable to the first half of fiscal year 2021, which achievement may be at, above or below target and Employee’s STIP bonus may be up to 200% of the Employee’s target bonus for such period (i.e. $487,500 at maximum level of performance). 

If the Employee participated in direct deposit as of the Termination Date, the Employee’s payment, if any, pursuant to this Section 2(b) will be direct deposited.  If the Employee did not participate in direct deposit, the Employee will be issued a live check to the Employee’s last reported home address on file with the Company.  The payment described in this Section 2(b) will be reduced to cover any outstanding financial obligations the Employee owes to the Company as of the Termination Date, to the extent permissible under law, and without the incurrence of additional tax obligations under Section 409A of the Internal 

Revenue Code of 1986, as amended (the “Code”) and the regulations and guidance promulgated thereunder (collectively, “Section 409A”).
(c)The Employee’s entitlement to the payment set forth in Section 2(b) above shall be subject to and contingent upon the Employee’s execution and delivery to the Company of a general release and waiver of claims in the form attached hereto as Exhibit A (the “Release”) on or after the Termination Date and such Release becoming irrevocable within thirty (30) days following the Termination Date.  For the avoidance of doubt, the Employee shall forfeit the payment set forth in Section 2(b) if the Release has not been executed, delivered to the Company and become irrevocable within such thirty (30) day period.

3.Sole Payments.  The payment set forth in Section 2 shall be the sole and exclusive payment to which the Employee shall be entitled in respect of the Employee’s termination of employment with the Company on the Termination Date.   

4.No Long-Term Incentive Plan Grants or Merit Increase.  The Employee acknowledges and agrees that (i) she is not entitled to any future equity award grants under the Signet Jewelers Limited Omnibus Incentive Plan or otherwise and (ii) she is not eligible for any future merit increase with respect to base salary.

5.Restrictive Covenants.  

(a)During the term of the Employee’s employment with the Company or any of its subsidiaries or affiliates and for all time thereafter, the Employee shall keep secret and retain in strictest confidence and not divulge, disclose, discuss, copy or otherwise use or suffer to be used in any manner, except in connection with the Business of the Company and of any of the subsidiaries or affiliates of the Company, any trade secrets, confidential or proprietary information and documents or materials owned, developed or possessed by or for the Company or any of the subsidiaries or affiliates of the Company pertaining to the Business of the Company or any of the subsidiaries or affiliates of the Company; provided that such information referred to in this Section 5(a) shall not include information that is or has become generally known to the public or the jewelry trade without violation of this Section 5. For purposes of the Agreement, “Business” shall mean the operation of a retail jewelry business that sells to the public jewelry, watches and associated services including through e-commerce.

(b)The Employee acknowledges that all developments, including, without limitation, inventions (patentable or otherwise), discoveries, improvements, patents, trade secrets, designs, reports, computer software, flow charts and diagrams, data, documentation, writings and applications thereof (collectively, “Works”) relating to the Business or planned business of the Company or any of the subsidiaries or affiliates of the Company that, alone or jointly with others, the Employee may create, make, develop or acquire during the term of Employee’s employment with the Company or any of its subsidiaries or affiliates (collectively, the “Developments”) are works made for hire and shall remain the sole and exclusive property of the Company and its subsidiaries and affiliates and the Employee hereby assigns to the Company all of the Employee’s right, title and interest in and to all such Developments and the Employee shall take any action reasonably necessary to achieve the foregoing result.  Notwithstanding any provision of this Agreement to the contrary, “Developments” shall not include any Works that do not relate to the Business or planned business of the Company or any of the subsidiaries or affiliates of the Company.

(c)The Employee agrees that the Employee shall not, directly or indirectly, without the prior written consent of the Company:  

(i)During the Employee’s employment with the Company or any of its subsidiaries or affiliates and for a period of one year commencing upon the date of Employee’s termination of employment (the “Restricted Period”), solicit, entice, persuade or induce any employee, consultant, agent or independent contractor of the Company or of any of the subsidiaries or affiliates of the Company to terminate his or her employment or engagement with the Company or such subsidiary or affiliate, to become employed by any person, firm or corporation other than the Company or such subsidiary or affiliate or approach any such employee, consultant, agent or independent contractor for any of the foregoing purposes; or  

(ii)during the Employee’s employment with the Company or any of its subsidiaries or affiliates and for a period fifteen months, directly or indirectly own, manage, control, invest or participate in any way in, consult with or render services to or for any person or entity (other than for the Company or any of the subsidiaries or affiliates of the Company) which is materially engaged in the Business (“materially” meaning deriving more than 25% of its revenue from the sale of jewelry and watches per year as of the applicable date); provided that the Employee shall be entitled to own up to 1% of any class of outstanding securities of any company whose common stock is listed on a national securities exchange or included for trading on the NASDAQ Stock Market.

(d)The Employee acknowledges that the services to be rendered by the Employee are of a special, unique and extraordinary character and, in connection with such services, the Employee will have access to confidential information vital 

2

to the Business of the Company and the subsidiaries and affiliates of the Company.  By reason of this, the Employee consents and agrees that if the Employee violates any of the provisions of Section 5 hereof, the Company and the subsidiaries and affiliates of the Company would sustain irreparable injury and that monetary damages will not provide adequate remedy to the Company and that the Company shall be entitled to have Section 5 specifically enforced by any court having equity jurisdiction.  Nothing contained herein shall be construed as prohibiting the Company or any of the subsidiaries or affiliates of the Company from pursuing any other remedies available to it for such breach or threatened breach, including, without limitation, the recovery of damages from the Employee or cessation of any payment hereunder without requirement for posting a bond. The Employee further acknowledges that: (i) the Employee will not at any time, directly or indirectly violate this Section 5; (ii) payment of the amount (if any) set forth in Section 2(b) under this Agreement shall not be made if the Employee violates this Section 5; (iii) the Company shall have no further obligation at any time to pay the amount (if any) set forth in Section 2(b) under this Agreement if the Employee violates this Section 5; and (iv) to the extent allowed by law, the Employee shall be required to return to the Company any payment the Company paid the Employee pursuant to this Agreement less two hundred fifty dollars ($250.00) if the Employee violates this Section 5.

6.Cooperation.    The Employee shall provide the Employee’s reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) which relates to events occurring during the Employee’s employment hereunder.

7.Return of Property and Documents. As a material provision of this Agreement, and as a condition of the receipt of the payment described in Section 2(b) of this Agreement, as of the date of the Employee’s termination of employment, the Employee shall have, and represent to have, returned to the Company all Company property (including, without limitation, any and all computers, identification cards, card key passes, fobs, corporate credit cards, corporate phone cards, corporate motor vehicles, files, memoranda, keys and software) in the Employee’s possession and the Employee shall not make or retain any duplicates or reproductions of such items.  The Employee further agrees that, as a material provision of this Agreement, as of the date of the Employee’s termination of employment, the Employee shall have, and represent to have, delivered to the Company all copies of any confidential information of the Company in the Employee’s possession, custody or control, including all copies of any analyses, compilations, studies or other documents in the Employee’s possession, custody or control that contain any such confidential information (whether in electronic or paper form), and that as of the date of the Employee’s termination of employment, the Employee shall no longer possess any such Company property or confidential information in any form.  The Company has no obligation to pay the amount (if any) set forth in Section 2(b) of this Agreement until it is satisfied that the Employee has returned all Company property the Employee possesses or controls

8.Confidentiality.  The Employee acknowledges and agrees that the Employee will keep the terms, amount, and facts of, and any discussions leading up to, this Agreement strictly and completely confidential, and that the Employee will not communicate or otherwise disclose to any employee of the Company (past, present, or future), or to any member of the general public, the terms, amounts, copies, or fact of this Agreement, except as may be required by law or compulsory process; provided, however, that the Employee may make such disclosures to the Employee’s tax/financial advisors or legal counsel as long as they agree to keep the information confidential.   If asked about any of such matters, to the extent permissible, the Employee’s response shall be that the Employee may not discuss any of such matters, except that nothing in this Agreement shall affect the Employee’s rights to engage in activity protected by Section 7 of the National Labor Relations Act.  Notwithstanding anything herein to the contrary, nothing in this Section 8 shall: (i) prohibit the Employee from making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of state or federal law or regulation; or (ii) require notification or prior approval by the Company of any reporting described in clause (i).

The Employee is hereby notified, in accordance with the Defend Trade Secrets Act of 2016, 18 U.S.C. § 1833(b), that: (i) an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law; (ii) an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (iii) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret except pursuant to court order.  Notwithstanding anything herein to the contrary, nothing in this Agreement shall: (i) prohibit the Employee from making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of state or federal law or regulation; or (ii) require notification or prior approval by the Company of any reporting described in clause (i).

3

In the event of a breach of the confidentiality provisions set forth in this Section 8 of the Agreement by the Employee, the Company may suspend any payment due under this Agreement pending the outcome of litigation and/or arbitration regarding such claimed breach of this Agreement by the Employee.
9.Non-Defamation and Non-Disparagement.  The Employee shall not at any time, publicly or privately, verbally or in writing, directly or indirectly, make or cause to be made any defaming and/or disparaging, derogatory, misleading or false statement about the Company or its products, or any current or former directors, officers, employees, or agents of the Company, or the business strategy, plans, policies, practices or operations of the Company to any person or entity, including members of the investment community, press, customers, competitors, employees and advisors of the Company.  Truthful disclosure (i) to any government agency regarding possible violations of federal law or regulation in accordance with any whistleblower protection provisions of state or federal law or regulation, or (ii) as required by law, legal or other proceedings, government filings, or investigations by a governmental authority with jurisdiction, in each case, shall not be deemed to violate this paragraph. The Company shall instruct the Company’s Named Executive Officers and Board of Directors to not disparage or make negative, derogatory or defamatory statements about the Employee, except that nothing herein shall preclude the Company, including such individuals, from making any and all truthful statements as required by law, in legal or other proceedings, government filings, or investigations by a governmental authority with jurisdiction, in each case.

10.Consequences of Breach.  The Employee acknowledges and agrees that the obligations and responsibilities in this Agreement are reasonable and not unduly restrictive.  The Employee further recognizes that damages incurred by the Company as a result of the Employee’s breach of this Agreement will be difficult to measure, that monetary damages will not provide adequate relief, and that in the event of any such breach: (i) the Company shall be entitled to apply for and receive an injunction without bond to restrain any such violation; (ii) the Company shall not be obligated to provide any payment under this Agreement; (iii) the Employee shall be obligated to pay to the Company its costs and expenses in enforcing its rights; and (iv) as an alternative to (iii), the Company may withhold and retain all but two hundred fifty dollars ($250.00) of the value of any payment under this Agreement provided to the Employee.  The covenants in this Section 10 shall not be deemed to be a penalty nor forfeiture.

11.Severability.  In the event that any one or more of the provisions of this Agreement are held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of the Agreement shall not in any way be affected or impaired thereby.

12.Waiver.  No waiver by either party of any breach by the other party of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of any other provision or condition at the time or at any prior or subsequent time.

13.Governing Law and Forum.  This Agreement shall be subject to, and governed by, the laws of the State of Ohio applicable to contracts made and to be performed therein, without regard to conflict of laws principles thereof. Any action to enforce any of the provisions of this Agreement shall be brought in a court of the State of Ohio located in Summit County or in a Federal court located in Cleveland, Ohio.  The parties consent to the jurisdiction of such courts and to the service of process in any manner provided by Ohio law.  Each party irrevocably waives any objection which it may now or hereafter have to the laying of the venue of any such suit, action, or proceeding brought in such court and any claim that such suit, action, or proceeding brought in such court has been brought in an inconvenient forum and agrees that service of process in accordance with the foregoing sentences shall be deemed in every respect effective and valid personal service of process upon such party.  

THE EMPLOYEE ACKNOWLEDGES THAT, BY SIGNING THIS AGREEMENT, HE IS WAIVING ANY RIGHT THAT HE MAY HAVE TO A JURY TRIAL RELATED TO THIS AGREEMENT.    
14.Withholding.  The Company shall deduct or withhold, or require the Employee to remit to the Company, the minimum statutory amount to satisfy federal, state or local taxes required by law or regulation to be withheld with respect to any benefit provided hereunder.

15.Entire Agreement.  This Agreement and the Release, constitute the entire agreement and understanding of the parties with respect to the subject matter herein and supersede all prior agreements, arrangements and understandings, whether written or oral, between the parties, including the TPA (except as otherwise set forth herein prior to the Termination Date); provided that nothing in this Agreement shall negate or limit the Employee’s obligations under the Code of Business Conduct and Ethics.  There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein. The Employee acknowledges and agrees that he is not relying on any representations or promises by any representative of the Company concerning the meaning of any aspect of this Agreement 

4

or the Release.  This Agreement and the Release may not be altered or modified other than in a writing signed by the Employee and an authorized representative of the Company.  

16.Notices.  All notices given hereunder shall be given in writing, shall specifically refer to this Agreement and shall be personally delivered or sent by telecopy or other electronic facsimile transmission or by registered or certified mail, return receipt requested, at the address set forth below or at such other address as may hereafter be designated by notice given in compliance with the terms hereof:

If to the Employee:     To the Employee’s last address set forth on the payroll records of the Company.

If to the Company:     Sterling Jewelers Inc.
375 Ghent Road
Akron, Ohio 44333
Fax: (330) 664-4379
Attn: Chief Legal, Risk & Corporate Affairs Officer 

If notice is mailed, such notice shall be effective upon mailing, or if notice is personally delivered or sent by telecopy or other electronic facsimile transmission, it shall be effective upon receipt.

17.Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of and be enforceable by the Employee, the Company and their respective heirs, successors and assigns, except that the Employee may not assign his rights or delegate his obligations hereunder without the prior written consent of the Company.

18.Section 409A.

(a)The intent of the parties is that payments and benefit under this Agreement comply with or be exempt from Section 409A and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith or exempt therefrom, as applicable.  If any other payments of money or other benefits due to the Employee hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, the Company may (i) adopt such amendments to the Agreement, including amendments with retroactive effect, that the Company determines necessary or appropriate to preserve the intended tax treatment of the benefits provided by the Agreement and/or (ii) take such other actions as the Company determines necessary or appropriate to comply with the requirements of Section 409A.  

(b)A termination of employment shall not be deemed to have occurred for purposes of this Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment, unless such termination is also a “separation from service” within the meaning of Section 409A and the payment thereof prior to a “separation from service” would violate Section 409A.  For purposes of any such provision of this Agreement relating to any such payments or benefits, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  If the Employee is deemed on the date of termination to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B), then, notwithstanding any other provision herein, with regard to any payment or the provision of any benefit that is considered nonqualified deferred compensation under Section 409A payable on account of a “separation from service,” such payment or benefit shall not be made or provided prior to the date which is the earlier of (A) the expiration of the six-month period measured from the date of such “separation from service” of the Employee, and (B) the date of the Employee’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 18(b) (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) shall be paid or reimbursed to the Employee in a lump sum on the first business day following the Delay Period, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

(c)(i) All expenses or other reimbursements as provided herein shall be payable in accordance with the Company’s policies in effect from time to time, but in any event any reimbursements that are non-qualified deferred compensation subject to Section 409A of the Code shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Employee; (ii) no such reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchanged for another benefit.

(d)For purposes of Section 409A, the Employee’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this 

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Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

(e) Nothing contained in this Agreement shall constitute any representation or warranty by the Company regarding compliance with Section 409A.  The Company has no obligation to take any action to prevent the assessment of any additional income tax, interest or penalties under Section 409A on any person and the Company, its subsidiaries and affiliates, and each of their employees and representatives shall not have any liability to the Employee with respect thereto.    

19.Compliance with Board Policies. The Employee shall be subject to the written policies of the Board, including, without limitation, any policy relating to the claw back of compensation, as they exist from time to time during the Employee’s employment with the Company.

20.Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above.

	
							
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	STERLING JEWELERS INC.

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	By:
	 
	/s/ Virginia C. Drosos

	 
	 
	 
	 
	Name:
	 
	Virginia C. Drosos

	 
	 
	 
	 
	Title:
	 
	Chief Executive Officer

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	EMPLOYEE

	 
	 
	 
	 
	By:
	 
	/s/ Judith Lynn Dennison

	 
	 
	 
	 
	 
	 
	Judith Lynn Dennison

Exhibit A
RELEASE AGREEMENT
This RELEASE (“Release”) dated as of ___________, 2020 between Sterling Jewelers Inc., a Delaware corporation (the “Company”), and Judith Lynn Dennison (the “Employee”).
WHEREAS, the Company and the Employee previously entered into that certain Confidential Separation and Release Agreement dated as of June ___, 2020 (the “Agreement”) pursuant to which the Employee’s employment with the Company shall terminate as of August 31, 2020; and
NOW, THEREFORE, in consideration of the promises and mutual agreements contained herein and in the Agreement, the Company and the Employee agree as follows:
1.Capitalized terms not defined herein shall have the meaning as defined under the Agreement.

2.In consideration of the Employee’s release under Paragraph 3 hereof, the Company shall pay to the Employee or provide benefits to the Employee as set forth in Section 2, as applicable, of the Agreement, which is attached hereto and made a part hereof.

3.The Employee, on the Employee’s own behalf and on behalf of the Employee’s heirs, estate and beneficiaries, does hereby release the Company, and in such capacities, any of its subsidiaries or affiliates, and each past or present officer, director, agent, employee, shareholder, and insurer of any such entities, from any and all claims made, to be made, or which might have been made of whatever nature, whether known or unknown, from the beginning of time, including those that arose as a consequence of the Employee’s employment with the Company, or arising out of the severance of such employment relationship, or arising out of any act committed or omitted during or after the existence of such employment relationship, all up through and including the date on which this Release is executed, including, without limitation, any tort and/or contract claims, common law or statutory claims, claims under any local, state or federal wage and hour law, wage collection law or labor relations law, claims under any common law or other statute, claims of age, race, sex, sexual orientation, religious, disability, national origin, ancestry, citizenship, retaliation or any other claim of employment discrimination, including under Title VII of the Civil Rights Acts of 1964 and 1991, as amended (42 U.S.C. §§ 2000e et seq.), Age Discrimination in Employment Act, as amended (29 U.S.C. §§ 621, et seq.); the Americans with Disabilities Act (42 U.S.C. §§ 12101 et seq.), the Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.), the Family and Medical Leave Act (29 U.S.C. §§ 2601 et seq.), the Employee Retirement Income Security Act of 1974, as amended (29 U.S.C. §§ 1001 et seq.), the Ohio Civil Rights Act (Ohio Rev. Code Ann. §§ 4112.01-4112.99, the Ohio Whistleblower’s Protection Statue (Ohio Rev. Code Ann. §§ 4113.51-4113.53), and any other law (including any state or local law or ordinance) prohibiting employment discrimination or relating to employment, retaliation in employment, termination of employment, wages, benefits or otherwise.  In connection with this release provision, the Employee does not waive the Employee’s right to file a charge with the EEOC or participate in an investigation conducted by the EEOC; however, the Employee expressly waives the Employee’s right to monetary or other relief should any administrative agency, including but not limited to the EEOC, pursue any claim on the Employee’s behalf, except that the Employee is not prohibited from receiving any monetary award from the Securities and Exchange Commission pursuant to Section 21F of the Securities Exchange Act of 1934.  The Employee relinquishes any right to future employment with the Company and the Company shall have the right to refuse to re-employ the Employee, in each case without liability of the Employee or the Company.  The Employee acknowledges and agrees that even though claims and facts in addition to those now known or believed by him to exist may subsequently be discovered, it is the Employee’s intention to fully settle and release all claims he may have against the Company and the persons and entities described above, whether known, unknown or suspected.

4.The Company and the Employee acknowledge and agree that the release contained in Paragraph 3 does not, and shall not be construed to, release or limit the scope of any existing obligation of the Company and/or any of its subsidiaries or affiliates (i) to defend and indemnify the Employee for the Employee’s acts as an officer or director of Company in accordance with the Certificate of Incorporation and all agreements thereunder, (ii) to pay any amounts pursuant to Section 2 of the Agreement, or (iii) with respect to the Employee’s rights as a shareholder of the Company, Signet or any of their subsidiaries.  

5.The Employee acknowledges that pursuant to the Release set forth in Paragraph 3 above, the Employee is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and that the Employee’s waiver and release of such rights is knowing and voluntary. The Employee acknowledges that the consideration given for the ADEA waiver and release under this Release is in addition to anything of value to which the Employee was already entitled. 

(a)The Employee further acknowledges that he has been advised by this writing that:

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(i)the Employee should consult with an attorney prior to executing this Release and has had an opportunity to do so;

(ii)the Employee has up to twenty-one (21) days within which to consider this ADEA waiver and release;

(iii)the Employee has seven (7) days following the Employee’s execution of this Release to revoke this ADEA waiver and release, but only by providing written notice of such revocation to the Company in accordance with the “Notice” provision in Section 16 of the Agreement; 

(iv)the ADEA waiver and release shall not be effective until the seven (7) day revocation period has expired; and

(v)the twenty-one (21) day period set forth above shall run from the date the Employee receives this Release.  The Parties agree that any modifications made to this Release prior to its execution shall not restart, or otherwise affect, this twenty-one day (21) period. 

(b)    It is the intention of the parties in executing this Release that this Release shall be effective as a full and final accord and satisfaction and release of and from all liabilities, disputes, claims and matters covered under this Release, known or unknown, suspected or unsuspected.
6.  This Release shall become effective on the first (1st) day following the day that this Release becomes irrevocable under Paragraph 5.  All payments due to the Employee shall be payable in accordance with the terms of the Agreement.  

[remainder of page intentionally blank]

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IN WITNESS WHEREOF, the parties have executed this Release on the date first above written.

STERLING JEWELERS INC.

By:    ___________________________            Name:
Title: 

JUDITH LYNN DENNISON

__________________________________
                

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