Document:

EX-4.2

  Exhibit 4.2
  

TITAN MEDICAL INC.

 
 SHARE UNIT PLAN
FOR OFFICERS
AND KEY EMPLOYEES
  
 Article 1
 RECITALS

 

	 1.1
 	 Purpose. Titan Medical Inc. (together with any successor thereto, the
“Corporation”) wishes to establish this Titan Medical Inc. Share Unit Plan (the “Plan”) in order to:
 

 

	  
 	 (a)
 	 encourage selected Eligible Employees of the Corporation and its Affiliates to:
 

  

	  
 	 (i)
 	 acquire a proprietary interest in the growth and performance of the Corporation,
 

  

	  
 	 (ii)
 	 generate an increased incentive to contribute to the Corporation’s future success and
prosperity, and
 

  

	  
 	 (iii)
 	 align the interests of such Eligible Employees with the Corporation’s long-term strategy and
with the interests of the Corporation’s shareholders, and
 

  

	  
 	 (b)
 	 enhance the ability of the Corporation and its Affiliates to attract and retain exceptionally
qualified individuals upon whom, in large measure, the sustained progress, growth and profitability of the Corporation depend.
 

 
 Article 2
 DEFINITIONS

 

	 2.1
 	 Definitions. As used in the Plan, the following terms shall have the
meanings set forth below:
 

  

	  
 	 (a)
 	 “Affiliate” means: (i) any entity that, directly or through one or more
intermediaries, is controlled by the Corporation and (ii) any entity in which the Corporation has a significant equity interest, as determined by the Board.
 

 

	  
 	 (b)
 	 “Applicable Law” means, with respect to any Person, property, transaction, event
or other matter, any law, rule, statute, regulation, order, judgment, decree, treaty or other requirement having the force of law (collectively, the “Law”) relating or applicable to such Person, property, transaction, event or
other matter.  Applicable Law also includes, where appropriate, any interpretation of the Law (or any part thereof) by any Governmental Body having jurisdiction, or charged with its administration or interpretation.
 

 

  

 

  
 2

 

	  
 	 (c)
 	 “Award” means any award of Restricted Share Units or Performance Share Units
granted under the Plan.
 

  

	  
 	 (d)
 	 “Award Agreement” means any written agreement, contract, or other instrument or
document, including an electronic communication, as may from time to time be designated by the Corporation as evidencing any Award granted under the Plan.
 

 

	  
 	 (e)
 	 “Board” means the board of directors of the Corporation as constituted from time
to time.
 

  

	  
 	 (f)
 	 “Business Day” means a day, other than a Saturday or Sunday, on which banking
institutions in Toronto, Ontario are not authorized or obligated by law to close.
 

  

	  
 	 (g)
 	 “Cause”, with respect to a Participant shall, if such Participant has entered into
a written employment agreement with the Corporation or an Affiliate that is in force and contains a definition of “Cause”, have the meaning given to the term in that agreement, or, if no such agreement exists, or if
“Cause” is not defined therein, then Cause will have the following meaning, provided that the existence of Cause shall be determined in good faith by the Board or a designee of the Board:
 

 

	  
 	 (i)
 	 misconduct which constitutes a material breach of any of the Participant’s obligations to the
Corporation, or an Affiliate, including any material obligations set forth in any written agreement governing the terms of the Participant’s employment and such breach, if curable, has not been cured within fifteen (15) days after written
notice by the Corporation, or the affected Affiliate, to the Participant;
 

  

	  
 	 (ii)
 	 fraud, embezzlement, theft or other material dishonesty by the Participant with respect to the
Corporation, or an Affiliate;
 

  

	  
 	 (iii)
 	 breach of his or her fiduciary duties to the Corporation, or an Affiliate, or misconduct which has,
or could reasonably be expected to have, a material adverse effect upon the business, interests or reputation of the Corporation, or an Affiliate, and such breach or conduct, if curable, has not been cured within fifteen (15) days after written
notice by the Corporation, or the affected Affiliate, to the Participant;
 

  

	  
 	 (iv)
 	 indictment or entering of a guilty plea for any indictable offence or felony or an analogous offence
under the laws of another jurisdiction;
 

  

	  
 	 (v)
 	 refusal or failure to attempt in good faith to follow or carry out the reasonable instructions of the
Board which failure, if curable, does not cease within fifteen (15) days after written notice of such failure is given to the Participant by the Board; or
 

 

  
  

  
 - 3 -

 

	  
 	 (vi)
 	 any other act or omission of the Participant that would at law permit an employer to, without notice
or payment in lieu of notice, terminate the employment of such Participant.
 

  

Notwithstanding the foregoing, to the extent that an alternative definition of Cause is provided in the Participant’s Award Agreement,
“Cause” shall have the meaning assigned thereto; provided that any alternative definition of Cause in the Award Agreement shall govern and supersede any alternative definition of Cause in any applicable employment agreement to the extent
of any inconsistencies between such definitions.
  

	  
 	 (h)
 	 “Change of Control” means any occurrence of the following events:
 

  

	  
 	 (i)
 	 the completion of a merger, amalgamation, consolidation, reorganization, arrangement or other
business combination of the Corporation with or into another corporation (other than a merger, amalgamation, consolidation, reorganization, arrangement or other business combination of the Corporation with any subsidiary);
 

 

	  
 	 (ii)
 	 the acquisition of all or substantially all of the outstanding common shares of the Corporation
pursuant to a take-over bid;
 

  

	  
 	 (iii)
 	 the sale of all or substantially all of the assets of the Corporation; or
 

 

	  
 	 (iv)
 	 any other acquisition of the business of the Corporation as determined by the Board.
 

  

	  
 	 (i)
 	 “Change of Control Termination” means, provided in each case such event
occurs within eighteen (18) months following a Change of Control without the Participant’s consent:
 

  

	  
 	 (i)
 	 any termination by the Corporation of the employment of a Participant, as a result of a Change of
Control;
 

  

	  
 	 (ii)
 	 any requirement by the Corporation or by any applicable Affiliate that the Participant’s
principal office be relocated more than 100 kilometers (or 60 miles as applicable) away from where it was prior to a Change of Control;
 

 

	  
 	 (iii)
 	 any change in the Participant’s title, reporting relationship, responsibilities or authority
as in effect immediately prior to any Change of Control which adversely affects to a material degree the Participant’s role in the management of the Corporation or of any Affiliate, as applicable;
 

 

  
  

  
 4

 

	  
 	 (iv)
 	 any material reduction in value of the Participant’s compensation including, but not limited
to, salary and any pension plan, stock option plan, investment plan, profit sharing plan, savings plan, bonus plan or life insurance, medical plans or disability plans or other employee benefit plan provided by the Corporation (or by any Affiliate
if applicable) to and in which the Participant is participating or under which the Participant is covered, all as in effect immediately prior to any Change of Control; or
 

 

	  
 	 (v)
 	 the assignment to the Participant, following a Change of Control of any significant, ongoing duties
which are inconsistent with the Participant’s skills, position (including status, offices, titles and reporting requirements), authority, duties or responsibilities prior to the Change of Control, or any other action by the Corporation or by
any applicable Affiliate which results in substantial diminution in such position.
 

  

	  
 	 (j)
 	 “Committee” means the Human Resources or Compensation Committee of the Board or
any other committee comprising either the Board or such members or committee(s) of the Board as may be designated by the Board.
 

 

	  
 	 (k)
 	 “Disability” in relation to a Participant means qualification for long-term
disability benefits under the long-term disability plan of the Corporation or of an Affiliate.
 

  

	  
 	 (l)
 	 “Eligible Employees” means a regular full-time or part-time employee of the
Corporation or of an Affiliate of the Corporation and may at the discretion of the Committee include an employee or officer who is on leave of absence from the Corporation, but does not include a probationary employee, a temporary full-time or
part-time employee, or a director of the Corporation unless that director is also a regular full-time or part-time employee of the Corporation.
 

 

	  
 	 (m)
 	 “Fair Market Value” on a particular date shall mean the closing price of the
Shares on that date as reported on the TSX for Canadian Eligible Employees, or Nasdaq for American Eligible Employees, or if the TSX or Nasdaq, as applicable, is not open on such date, the immediately preceding date on which the applicable stock
exchange is open.  If the Shares are not listed and posted for trading on the applicable stock exchange at the relevant time, it shall be the fair market value of the Share, as determined by the Board acting in good faith.
 

  

	  
 	 (n)
 	 “Forfeiture Date” means the date, as determined by the Committee in its
discretion, on which a Participant:
 

  

	  
 	 (i)
 	 resigns from employment with the Corporation or with an Affiliate as contemplated in Section 6.1;

  
  

  
 - 5 -

 

	  
 	 (ii)
 	 is terminated for Cause as contemplated in Section 6.2; or
 

 

	  
 	 (iii)
 	 is terminated by the Corporation or by a Subsidiary without Cause as contemplated in Section 6.3 (not
taking into account any period of notice or pay in lieu of notice which follows the Participant’s last day of actual and active employment).
 

 

	  
 	 (o)
 	 “Governmental Body” means any government, parliament, legislature, regulatory
authority, agency, commission, board or court or other law-making entity, rule-making entity, or regulation-making entity having or purporting to have jurisdiction on behalf of any nation or state or province or other subdivision thereof including
any municipality or district or county.
 

  

	  
 	 (p)
 	 “Grant Date” means the date on which an Award is granted pursuant to the Plan.

  

	  
 	 (q)
 	 “Insider” means (i) an insider of the Corporation, as defined in the Securities
Act (Ontario) other than a person who falls within that definition solely by virtue of being a director or senior officer of a subsidiary of the Corporation, and (ii) an associate of any person who is an insider by virtue of (i) above;
 

  

	  
 	 (r)
 	 “Market Shares” mean Shares purchased in the open market on the TSX, Nasdaq, or on
any other securities exchange where Shares are traded.
 

  

	  
 	 (s)
 	 “Nasdaq” means the NASDAQ Stock Market LLC or any successor thereto.
 

  

	  
 	 (t)
 	 “Participant” means an Eligible Employee designated to be granted an Award under
the Plan.
 

  

	  
 	 (u)
 	 “Payment Value” means the value of an Award on the Vesting Date, which shall be
calculated using a formula determined by the Committee at the time of grant based on either (i) the Fair Market Value of one Share as of the day immediately preceding the Vesting Date multiplied by the number of Share Units held by the Participants
on the Vesting Date, or (ii) an average of the Fair Market Value of one Share over a specified number of days prior to the Vesting Date multiplied by the number of Share Units held by the Participant on the Vesting Date.
 

 

	  
 	 (v)
 	 “Performance Criteria” means any quantitative and/or qualitative measures, as
determined by the Committee, which may be used to measure the level of performance of the Corporation, any applicable Affiliate or any individual Participant during a Vesting Period, and may include arrangements under which the grant, issuance,
retention, vesting and/or transferability of any applicable Award is subject to such criteria and such additional conditions or terms as may be designated by the Committee.
 

 

	  
 	 (w)
 	 “Performance Multiplier” has the meaning described in Section 5.2(b).
 

  
  

  
 6

 

	  
 	 (x)
 	 “Performance Share Unit“ or “PSU” means any right granted under
this Plan which is subject to inter alia, a Vesting Period and Performance Criteria.
 

  

	  
 	 (y)
 	 “Person” means any individual (whether acting as an executor, trustee,
administrator, legal representative or otherwise), corporation, estate, firm, partnership, limited partnership, sole proprietorship, syndicate, joint venture, trustee, trust, association, joint stock company, business trust, limited liability
company, government or any department or agency thereof, unincorporated organization or association, and pronouns have a similar extended meaning.
 

 

	  
 	 (z)
 	 “Restricted Share Unit” or “RSU” means any right granted under
this Plan which is subject to, inter alia, a Vesting Period.
 

  

	  
 	 (aa)
 	 “Retirement” means the retirement of a Participant from the employ of the
Corporation or any Affiliate whereupon the Participant does not take up full-time employment with any other employer so long as the Participant is the holder of any outstanding Award, provided that in all cases, Retirement of a Participant will not
be deemed to have occurred unless the Participant is at least 65 years of age at the time of Retirement.
 

  

	  
 	 (bb)
 	 “Share Compensation Arrangement” means any stock option performance share unit,
restricted share unit, stock option plan, share unit plan, long-term or short-term incentive plan, employee stock purchase plan or any other compensation or incentive mechanism involving the issuance or potential issuance of Shares, including a
purchase of Shares from treasury which is financially assisted by the Corporation by way of loan, guarantee or otherwise;
 

  

	  
 	 (cc)
 	 “Shares” mean the common shares of the Corporation and such other securities as
may become the subject of Awards, or become subject to Awards, pursuant to an adjustment made pursuant to the provisions of Article 4 of the Plan.
 

 

	  
 	 (dd)
 	 “Share Units” mean, collectively, Performance Share Units and Restricted Share
Units.
 

  

	  
 	 (ee)
 	 “Strike Price” means no less than the closing price of the Shares on the last
Trading Day prior to the Grant Date.
 

  

	  
 	 (ff)
 	 “Tax Act” means the Income Tax Act (Canada), as amended from time to
time.
 

  

	  
 	 (gg)
 	 “Trading Day” means any day on which the TSX or Nasdaq is open for business.

  

	  
 	 (hh)
 	 “TSX” means the Toronto Stock Exchange or any successor thereto.
 

  
  

  
 - 7 -

 

	  
 	 (ii)
 	 “Vesting Date” means the last Trading Day of the Vesting Period determined in
accordance with Sections 5.2(a) and 5.2(b).
 

  

	  
 	 (jj)
 	 “Vesting Period” means any period as determined by the Committee, during which
period the Participant who is the beneficiary of an Award must remain continuously employed by the Corporation or by any Affiliate, unless otherwise provided for in this Plan.  A Participant will be
considered employed by the Corporation or an Affiliate only up until the Participant’s last day of actual and active employment with the Corporation or Affiliate, not including any notice period.  For greater certainty, no period of
notice of termination or pay in lieu thereof that is given (or that ought to have been given) in respect of any termination of employment will be considered as extending a Participant’s period of employment for the purpose of determining his
or her entitlements under this Plan. In case of doubt as to an individual’s status as an Eligible Employee during the Vesting Period, the determination of the Committee shall be final.
 

 

	 2.2
 	 Extended Meanings.  In this Plan, words importing the singular
number include the plural and vice versa and words importing the masculine gender include the feminine and neuter genders and vice versa.
 

 

	 2.3
 	 Calculation of Time Periods.  In this Agreement, except as otherwise
expressly provided, when calculating the period of time within which or following which any act is to be done or step taken, such period will exclude the first day referenced in the period and include the last day referenced in the period and if the
last day of the period is not a Trading Day, the period in question will end on the next Trading Day.
 

  

	 2.4
 	 Headings.  The division of this Plan into articles, sections, and
subsections, and the use of headings, is for convenience of reference only and will not modify or affect the interpretation or construction of this Agreement.
 

 

	 2.5
 	 Use of the word Including.  The word “includes” or
“including” shall mean “includes without limitation” or “including without limitation”, respectively.
 

 
 Article 3
 ADMINISTRATION

 

	 3.1
 	 Committee to Interpret Plan. Except as otherwise provided herein, the
Plan shall be administered by the Committee, which shall have the power to interpret the Plan and to adopt such rules and guidelines for implementing the terms of the Plan as it may deem appropriate. The Committee shall have the ability to modify
the Plan provisions, to the extent necessary, or delegate such authority, to accommodate any changes in Applicable Law in jurisdictions in which Participants will receive Awards.
 

 

	 3.2
 	 Power of the Committee. Subject to the terms of the Plan and Applicable
Law, the Committee shall have full power and authority to:
 

  
  

  
 8

 

	  
 	 (a)
 	 designate Participants;
 

 

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

  

	  
 	 (c)
 	 determine the number of Share Units to be covered by Awards (or to determine whether any payments,
rights, or other matters are to be calculated in connection with Awards);
 

  

	  
 	 (d)
 	 determine the terms and conditions of any Award;
 

 

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

 

	  
 	 (f)
 	 determine any acceleration of exercisability or vesting, or waiver of termination or forfeiture
regarding any Share Unit, based on such factors as the Committee may determine;
 

  

	  
 	 (g)
 	 determine whether, to what extent, and under what circumstances cash, Market Shares, other
securities, other Awards, and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee;
 

 

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

  

	  
 	 (i)
 	 establish, amend, suspend, or waive such rules and guidelines;
 

 

	  
 	 (j)
 	 appoint such agents as it shall deem appropriate for the proper administration of the Plan;
 

  

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

  

	  
 	 (l)
 	 correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award in
the manner and to the extent it shall deem desirable to carry the Plan into effect.
 

  

	 3.3
 	 Procedure.  The following shall be the process for the granting of
Awards:
 

  

	  
 	 (a)
 	 the Board shall have the sole power, prerogative and authority to grant Share Units to
Participants;
 

  

	  
 	 (b)
 	 the Committee shall be responsible for recommending any grant of Share Units, and shall do so by
making a written proposal to the Board at a regularly scheduled Board meeting, setting out the following:
 

  
  

  
 - 9 -

 
  

	  
 	 (i)
 	 the name of the Participants,
 

 

	  
 	 (ii)
 	 with respect to each grant of Share Units,
 

 

	  
 	 (A)
 	 the number allocated,
 

 

	  
 	 (B)
 	 the proposed Grant Date,
 

 

	  
 	 (C)
 	 the Performance Criteria and Performance Multiplier (only with respect to grants of Performance Share
Units),
 

  

	  
 	 (D)
 	 the Vesting Period and the Vesting Date,
 

 

	  
 	 (E)
 	 the formula for calculating the Payment Value, and
 

 

	  
 	 (F)
 	 any other applicable restrictions, which restrictions may lapse separately or in combination at such
time or times, in such instalments or otherwise, as the Committee may deem appropriate;
 

  

	  
 	 (c)
 	 if there is no undisclosed material information regarding the Corporation at the meeting at which the
grants are approved, the date of such meeting shall be considered the Grant Date; if there is undisclosed material information at such meeting, the Grant Date shall be the second Trading Day after the disclosure by the Corporation of such
information;
 

  

	  
 	 (d)
 	 upon approval of a grant of Awards by the Board and within one (1) Trading Day after the Grant Date,
the Chair of the Committee or his delegate, shall calculate the Strike Price applicable for the relevant Grant Date, and shall then report all approved grants to the Corporation’s accounting and human resource departments; and
 

  

	  
 	 (e)
 	 the administrative processing of the grants shall be completed in not more than four (4) Trading Days
from the date of the report referred to in subclause 3.3(d) above, including the issuance to Participants of a notice indicating at least all of the information referred to in sub-clause 3.3(b)(ii) above.
 

 

	 3.4
 	 Administration of the Plan. Unless otherwise expressly provided in the
Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time, and shall be final, conclusive, and binding
upon all Persons, including the Corporation, any Affiliate, any Participant, any holder or beneficiary of any Award, any shareholder, and any employee of the Corporation or of any Affiliate.
 

 

	 3.5
 	 Number of Shares to be issued under the Plan.
 

  
  

  
 10

 
 Under the Plan and all of the other Share
Compensation Plans:
  

	  
 	 (a)
 	 the maximum number of Shares issuable pursuant to outstanding Share Units and all other Share
Compensation Arrangements, shall not exceed 15% of the Shares outstanding from time to time;
 

  

	  
 	 (b)
 	 the number of Shares of the Corporation that may be issued to any single Participant and his, her or
its associates within any one-year period may not exceed 5% of the issued and outstanding securities of the Corporation;
 

  

	  
 	 (c)
 	 the number of Shares of the Corporation that may be issuable to any single Participant and his, her
or its associates may not exceed 5% of the issued and outstanding securities of the Corporation;
 

  

	  
 	 (d)
 	 the number of Shares of the Corporation issuable to Insiders, at any time, under all Share
Compensation Arrangements, cannot exceed 15% of the issued and outstanding securities of the Corporation; and
 

  

	  
 	 (e)
 	 the number of Shares of the Corporation issued to Insiders, within any one year period, under all
Share Compensation Arrangements, cannot exceed 15% of the issued and outstanding securities of the Corporation.
 

  

Article 4
 ADJUSTMENT OF
AWARDS
  

	 4.1
 	 Adjustments for Awards. In the event that the Committee shall determine
that any dividend or other distribution (whether in the form of cash, Shares, or other securities), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange
of Shares or other securities of the Corporation, issuance of warrants or other rights to purchase Shares or other securities of the Corporation, or other similar corporate transaction or event or otherwise affects the Shares, then the Committee
shall adjust the following in a manner that is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan:
 

 

	  
 	 (a)
 	 the number and type of Share Units subject to outstanding Awards;
 

 

	  
 	 (b)
 	 the grant, purchase, or exercise price with respect to any Award, or, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award; and
 

  

	  
 	 (c)
 	 other value determinations applicable to outstanding Awards;
 

 
 provided, however, that the number of
Performance Share Units or Restricted Share Units, as applicable, subject to any Award shall always be a whole number.

  
  

  
 - 11 -

 

	 4.2
 	 Adjustments of Awards Upon Certain Acquisitions. In the event the
Corporation or any Affiliate shall assume outstanding employee compensation awards or the right or obligation to make such future compensation awards in connection with the acquisition of another business or another corporation or business entity,
the Committee may make such adjustments, not inconsistent with the terms of the Plan, in the terms of Awards as it shall deem appropriate in order to achieve reasonable comparability or other equitable relationship between the assumed obligations
and the Awards granted under the Plan as so adjusted.
 

  

	 4.3
 	 Adjustments of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events. The Committee shall be authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting the Corporation, any Affiliate, or the
financial statements of the Corporation or any Affiliate, or of changes in Applicable Law, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits
or potential benefits to be made available under the Plan.
 

  

	 4.4
 	 Treatment of Dividends.  Notwithstanding any provision of Section
4.1 above, dividends declared by the Corporation, if any, shall be treated as if they had been invested in purchasing additional Restricted Share Units or Performance Share Units, as applicable, which shall be computed by dividing: (a) the amount
obtained by multiplying the amount of the dividend declared and paid per Share by the number of Shares used in calculating the Award of Share Units recorded in the Participant’s account on the record date for the payment of such dividend, by
(b) the Fair Market Value for the trading date immediately following the relevant dividend record date, with fractions computed to three decimal places.
 

 
 Article 5
 AWARDS

 

	 5.1
 	 Evidence of Share Units. Any Share Units granted under the Plan will be
evidenced by an Award Agreement between the Corporation and the Participant, which agreement will contain terms and conditions consistent with the Plan and as approved by the Board.
 

 

	 5.2
 	 Vesting and Performance Metric.
 

 

	  
 	 (a)
 	 For RSUs, unless otherwise determined by the Committee and stated in the Award Agreement, the Vesting
Date shall be on the third (3rd) anniversary of the Grant Date.  Vesting for RSUs is based solely on a Participant’s continued employment with the Corporation or Affiliate throughout the Vesting Period.
 

  

	  
 	 (b)
 	 For PSUs, unless otherwise determined by the Committee and stated in the Award Agreement, the Vesting
Date shall be on the third (3rd) anniversary of the Grant Date.  Each Award Agreement will describe the Performance 
 

  
  

  
 12

 
 Criteria that must be achieved for such PSUs to
vest as of the end of the Vesting Period, provided the Participant is continuously employed by or in service with the Corporation or any of its Affiliates from the Grant Date until such Vesting Date.  The Award Agreement may provide that the
number of Shares that each PSU entitles the Participant to, being one Share, will be multiplied by a factor (the “Performance Multiplier”) such that each PSU will entitle the Participant to more than or less than one Share.  The
number of PSUs that will vest as of the end of the Vesting Period will be:
  

	  
 	 (i)
 	 the number of PSUs allocated, subject to meeting the Performance Criteria, or
 

  

	  
 	 (ii)
 	 if a Performance Multiplier is used, the number of PSUs allocated, subject to meeting the Performance
Criteria, multiplied by the Performance Multiplier.
 

  

	 5.3
 	 Awards may be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for, any other Award or any compensation award granted under any other plan of the Corporation or of any Affiliate. Awards granted in addition
to or in tandem with other Awards, or in addition to or in tandem with compensation awards granted under any other plan of the Corporation or any Affiliate, may be granted either at the same time as or at a different time from the grant of such
other Awards or obligations.
 

  

	 5.4
 	 Payment under Awards. Except as provided in the Award Agreement or
any other provision of this Plan, all of the vested Share Units covered by a particular grant and any related Share Units credited pursuant to Section 4.4 will be settled on the first Business Day following the Vesting Date for the Payment Value,
but in no event later than December 31 of the third calendar year following the year in which the Grant Date in respect of the Share Units occurred.  Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers
to be made by the Corporation or an Affiliate upon the settlement of an Award may be made in such form or forms as the Committee shall determine, including, without limitation, cash, Market Shares, Shares issued from treasury other securities or
other Awards, or any combination thereof, and may be made in a single payment or transfer.
 

  

	 5.5
 	 Limits on Transfer of Awards. Except as provided by the Committee, no
Award and no right under any such Award, shall be assignable, alienable, saleable, or transferable by a Participant otherwise than by will or by the laws of descent and distribution; provided, however, that, if so determined by the Committee, a
Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of the Participant with respect to any Award upon the death of the Participant. Each Award, and each right under any Award,
shall be exercisable, during the Participant’s lifetime, only by the Participant or, if permissible under Applicable Law, by the Participant’s guardian or legal representative. No Award, and no right under any such Award, may be
pledged, 
 

  
  

  
 - 13 -

 
 alienated, attached, or otherwise encumbered, and
any purported pledge, alienation, attachment, or encumbrance thereof shall be void and unenforceable against the Corporation or any Affiliate.
  

	 5.6
 	 Conditions and Restrictions Upon the Share Units Subject to Awards. The
Committee may provide that any Share Units which are subject to or issued under an Award shall be subject to such further agreements, restrictions, conditions or limitations as the Committee in its discretion may specify prior to the grant, vesting
or settlement of such Award, including without limitation, conditions on vesting or transferability and forfeiture or repurchase provisions or provisions on payment of taxes arising in connection with an Award. Notwithstanding the provisions of this
Section 5.6 or any other provisions of the Plan, any and all Performance Share Units or Restricted Share Units, as applicable, subject to or issued under an Award must be settled and paid by December 31 of the third calendar year of the year
following the year in which the services giving rise to the award were rendered.  In addition, all Shares issued to Persons in the United States pursuant to the Plan will be issued pursuant to the registration requirements of the United States
Securities Act of 1933, as amended, or an exemption from such registration requirements.
 

  

Article
6
 TERMINATION of employment
  

	 6.1
 	 Voluntary Resignation of the Participant. If a Participant resigns from
employment with the Corporation or with an Affiliate (other than as a result of a Change of Control Termination, Retirement, death or Disability), the Participant shall, effective on the relevant Forfeiture Date, cease to be a Participant, and the
former Participant shall forfeit all rights in respect of the Participant’s Awards.  All such Awards shall be cancelled effective at the commencement of the relevant Forfeiture Date and no distribution shall be made to the former
Participant in relation to such forfeited Awards under the Plan.
 

  

	 6.2
 	 Termination for Cause. If the employment of a Participant with the
Corporation or with an Affiliate is terminated for Cause (other than as a result of a Change of Control Termination), the Participant shall, effective on the relevant Forfeiture Date, cease to be a Participant, and the former Participant shall
forfeit all rights in respect of the Participant’s Awards.  All such Awards shall be cancelled effective at the commencement of the relevant Forfeiture Date and no distribution shall be made to the former Participant in relation to such
forfeited Awards under the Plan.
 

  

	 6.3
 	 Termination Without Cause. If the employment of a Participant with the
Corporation or with an Affiliate is terminated without Cause (other than as a result of a Change of Control Termination), any unvested Awards will vest at the end of the relevant Vesting Period based upon a
ratio where the numerator is the number of months such former Participant was employed during the relevant Vesting Period (rounded down to the nearest whole number) and the denominator is the total number of months of the relevant Vesting
Period.  With respect to any Awards of Performance 
 

  
  

  
 14

 
 Share Units, any accelerated vesting will be determined by the Committee and may vary depending on the specific nature of the performance-based vesting condition and the proration of the unvested PSUs.

 

	 6.4
 	 Change of Control Termination. If the employment of a Participant with
the Corporation or with an Affiliate is affected by a Change of Control Termination, all unvested Awards shall vest immediately upon the Change of Control Termination and the Participant shall be entitled to the benefits of such Awards as though the
Vesting Date is the date of Change of Control Termination, provided however that the Participant shall have the option of exercising his or her rights under the Awards at any later date in the calendar year in which the Change of Control Termination
occurs, subject to Applicable Law.  For the purposes of this paragraph, all Performance Criteria with respect to any Performance Share Units shall be deemed to have been met at target on the relevant Vesting Date.
 

 

	 6.5
 	 Death, Disability or Retirement.
 

 

	  
 	 (a)
 	 Death.  If a Participant dies before all or a portion of such Awards have vested, any
unvested Awards will vest at the end of the relevant Vesting Period based upon a ratio where the numerator is the number of months such deceased Participant was employed during the relevant Vesting Period (rounded down to the nearest whole number)
and the denominator is the total number of months of the relevant Vesting Period.  With respect to any Awards of Performance Share Units, the ratio specified in the previous sentence is subject to any Performance Criteria applicable to the
relevant Award of Performance Share Units, and to the Committee’s interpretation regarding whether these Performance Criteria have been met.  The Committee will be under no obligation to perform its obligations pursuant to the provisions
of this Section 6.5(a) until the Committee receives satisfactory evidence of the Participant’s death from the authorized legal representative of the deceased Participant.
 

 

	  
 	 (b)
 	 Disability or Retirement.  If a Participant ceases to be an Eligible Employee of the
Corporation or an Affiliate due to Retirement or Disability, any unvested Awards will vest at the end of the relevant Vesting Period based upon a ratio where the numerator is the number of months such former Participant was employed during the
relevant Vesting Period (rounded down to the nearest whole number) and the denominator is the total number of months of the relevant Vesting Period.  With respect to any Awards of Performance Share Units, the ratio specified in the previous
sentence is subject to any Performance Criteria applicable to the relevant Award of Performance Share Units, and to the Committee’s interpretation regarding whether these Performance Criteria have been met.
 

 

	 6.6
 	 Discretion with Respect to Unvested Award.  Notwithstanding any
provision of this Article 6, the Committee, in its sole discretion, may approve the vesting or settlement of any unvested Awards which result from any activities described in Sections 6.1, 
 

  
  

  
 - 15 -

 
 6.2, 6.3, 6.4 or 6.5 above.  Settlement of any
Payment Value resulting from the exercise of any rights referenced in this ARTICLE 6 may be made in cash, Market Shares or other securities pursuant to the provisions of the applicable Award Agreement or pursuant to any other agreement, written
or otherwise, as applicable. 
 Article 7

AMENDMENT AND TERMINATION of plan
  

	 7.1
 	 Amendment and Termination of the Plan. Except to the extent prohibited by
Applicable Law and unless otherwise expressly provided in an Award Agreement or in the Plan:
 

  

	  
 	 (a)
 	 Amendments to the Plan. The Committee may amend, alter, suspend, discontinue, or terminate the
Plan, in whole or in part; provided, however, that if shareholder approval is required by Applicable Law or by regulation or rule of the TSX or Nasdaq, no material amendment shall be made without the prior approval of the
Corporation’s shareholders.
 

  

	  
 	 (b)
 	 Amendments to Awards. The Committee may waive any conditions or rights under, amend any terms
of, or amend, alter, suspend, discontinue, or terminate, any Awards theretofore granted, prospectively or retroactively. No such amendment or alteration shall be made which would impair the rights of any Participant, without such
Participant’s consent, under any Award theretofore granted, provided that no such consent shall be required with respect to any amendment or alteration if the Committee determines in its sole discretion that such amendment or alteration
either: (i) is required or advisable in order for the Corporation, the Plan or the Award to satisfy or conform to any Applicable Law or to meet the requirements of any accounting standard, or (ii) is not reasonably likely to significantly diminish
the benefits provided under such Award.
 

  

	  
 	 (c)
 	 No such amendment to the Plan shall cause the Plan to cease to be a plan described in paragraph (k)
of the definition of “salary deferral arrangement” in subsection 248(1) of the Tax Act or any successor to such provision.
 

 
 Article 8

GENERAL PROVISIONS
  

	 8.1
 	 No Rights to Awards.  No Eligible Employee, Participant or other
Person shall have any claim to be granted any Award under the Plan, or, having been selected to receive an Award under this Plan, to be selected to receive a future Award, and further there is no obligation for uniformity of treatment of Eligible
Employees, Participants, or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each recipient.
 

 

	 8.2
 	 No Voting Rights.  Under no circumstances shall Awards of Share
Units entitle any Participant to exercise voting rights or any other rights attaching to the ownership of 
 

  
  

  
 16

 
 Shares or other securities of
the Corporation, nor shall any Participant be considered the owner of Shares by virtue of receiving Share Units pursuant to an Award.
  

	 8.3
 	 Withholding.
 

 

	  
 	 (a)
 	 So as to ensure that the Corporation or any Affiliate, as applicable, will be able to comply with the
applicable provisions of any federal, provincial, state or other law relating to the withholding of tax or other required deductions (including on the amount, if any, includable in the income of an Eligible Employee) the Corporation or any
Affiliate, as applicable, may withhold or cause to be withheld from any amount payable to an Eligible Employee under this Plan as may be necessary to permit the Corporation or any such Affiliate, as applicable, to so comply (the “Applicable
Withholding Taxes”).
 

  

	  
 	 (b)
 	 It is the responsibility of the Participant to complete and file any tax returns which may be
required within the periods specified in applicable laws as a result of the Participant’s participation in the Plan. The Corporation shall not be held responsible for any tax consequences to a Participant as a result of the
Participant’s participation in the Plan.
 

  

	  
 	 (c)
 	 For greater certainty, unless not required under the Tax Act or any other applicable law, no Share
Units will be settled until:
 

  

	  
 	 (i)
 	 an amount sufficient to cover the Applicable Withholding Taxes payable on the settlement of Share
Units has been received by the Corporation (or withheld by the Corporation from any other remuneration owed to the Participant); or
 

 

	  
 	 (ii)
 	 the Participant undertakes to arrange for such number of Shares to be sold as is necessary to raise
an amount equal to the Applicable Withholding Taxes, and to cause the proceeds from the sale of such Shares to be delivered to the Corporation.
 

 

	 8.4
 	 No Limit on Other Compensation Arrangements. Nothing contained in the
Plan shall prevent the Corporation or any Affiliate from adopting or continuing in effect other or additional compensation arrangements and such arrangements may be either generally applicable or applicable only in specific cases.
 

  

	 8.5
 	 No Right to Employment. The grant of an Award shall be construed as
giving a Participant the right to be retained in the employ of the Corporation or any Affiliate. Further, the Corporation or an Affiliate may at any time dismiss a Participant from employment, free from any liability, or any claim under the Plan,
unless otherwise expressly provided in the Plan or in any Award Agreement.
 

  

	 8.6
 	 Governing Law. The validity, construction, and effect of the Plan and any
rules and regulations relating to the Plan shall be determined in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein without regard to conflict of law.
 

  
  

  
 - 17 -

 

	 8.7
 	 Severability. If any provision of the Plan or any Award is or becomes or
is deemed to be invalid, illegal, or unenforceable in any jurisdiction or under any Applicable Law, or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to such law, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to
such jurisdiction, Applicable Law, Person, or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.
 

 

	 8.8
 	 No Trust or Fund Created. Neither the Plan nor any Award shall create or
be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Corporation or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the
Corporation or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Corporation or any Affiliate.
 

 

	 8.9
 	 No Fractional Market Shares. No fractional Market Shares shall be
delivered pursuant to the Plan or any Award.  Any fractional Market Shares which would otherwise be delivered pursuant to the Plan or any Award will be settled in cash.
 

 

	 8.10
 	 No Representations or Covenants with Respect to Tax Qualification.
Although the Corporation may endeavour to: (i) qualify an Award for favourable Canadian or foreign tax treatment or (ii) avoid adverse tax treatment, the Corporation makes no representation to that effect and expressly disavows any covenant to
maintain favourable or avoid unfavourable tax treatment. The Corporation shall be unconstrained in its corporate activities without regard to the any potential negative tax affects to holders of Awards under the Plan.
 

 

	 8.11
 	 Awards to Foreign Employees. The Committee shall have the power and
authority to determine which Affiliates shall be covered by this Plan and which employees who are located in a country other than Canada and the United States shall be eligible to participate in the Plan. The Committee may adopt, amend or rescind
rules, procedures or sub-plans relating to the operation and administration of the Plan to accommodate the specific requirements of local laws, procedures, and practices. Without limiting the generality of the foregoing, the Committee is
specifically authorized to adopt rules, procedures and sub-plans with provisions that limit or modify: (i) rights on death, disability or retirement or on termination of employment; (ii) available methods of exercise or settlement of an award; (iii)
payment of income, social insurance contributions and payroll taxes; (iv) the withholding procedures and handling of any indicia of ownership which vary with national or local requirements of foreign jurisdictions. The Committee may also adopt
rules, procedures or sub-plans applicable to particular Affiliates or locations.  The rules set forth in Schedule A to this Plan apply to any Participant who is a U.S. Taxpayer (as defined therein) and form a part of this Plan.
 

  
  

  
 18

 

	 8.12
 	 Compliance with Laws. The granting of Awards under the Plan shall be
subject to: (i) all Applicable Laws, (ii) such approvals by all applicable Governmental Bodies, or (iii) such approvals by the TSX or any other applicable stock exchange on which the securities of the Corporation are listed, as may be required. The
Corporation shall have no obligation to provide Awards of Share Units under the Plan prior to:
 

  

	  
 	 (a)
 	 obtaining any approvals from all Governmental Bodies that the Corporation determines in its sole
discretion are necessary or advisable; and
 

  

	  
 	 (b)
 	 completion of any registration or other qualification of the Share Units (if applicable) under all
Applicable Laws or all of the rulings of all applicable Governmental Bodies that the Corporation determines in its sole discretion to be necessary or advisable or at a time when any such registration or qualification is not current, has been
suspended or otherwise has ceased to be effective.
 

  

The inability or impracticability of the Corporation to obtain or maintain authority from any Governmental Body having jurisdiction, which
authority is deemed by the Corporation’s counsel to be necessary to the lawful issuance and sale of any Share Units under the Plan shall relieve the Corporation of any liability in respect of the failure to issue or sell such Share Units as
to which such requisite authority shall not have been obtained.
  

Article 9
 EFFECTIVE DATE
OF THE PLAN, TERM
  

	 9.1
 	 Effective Date of the Plan, Term. The Plan shall be effective as of the
date of its approval by the Board and required approval from the shareholders of the Corporation.
 

  
  

  
 - 19 -

 
 SCHEDULE A

 
 PLAN PROVISIONS APPLICABLE TO U.S. TAXPAYERS

 
 The provisions of this Schedule “A” apply to
Share Units held by a U.S. Taxpayer to the extent such Share Units are subject to U.S. Taxation. The following provisions apply, notwithstanding anything to the contrary in the Plan. All capitalized terms used in this Schedule “A” and
not defined herein, shall have the meaning attributed to them in the Plan.
  

“Section 409A” means Section 409A of the United States Internal Revenue Code and the regulations and authority promulgated thereunder.

 
  “U.S. Taxpayer” shall mean any
person who is a U.S. citizen, U.S. permanent resident, or other person who has been granted or is eligible to be granted a Deferred Share Unit under the Plan that is otherwise subject to U.S. taxation.

 
 For the avoidance of doubt, nothing in Section 6.3 or Section
6.5 of the Plan shall result in the acceleration of payment/settlement of Awards, and Awards will be settled in accordance with Section 5.4 of the Plan on the first Business Day following the Vesting Date set forth in the applicable Award Agreement
or determined by application of Sections 5.2(a) or (b) of the Plan. 
  

Section 6.4 of the Plan is replaced in its entirety with the following:

 

6.4       Change of Control Termination. If the employment of a Participant with the
Corporation or with an Affiliate is affected by a Change of Control Termination that occurs following a Change of Control that meets the definition of “change in control event” within the meaning of Section 409A, all unvested Awards
shall vest immediately upon the Change of Control Termination, provided that such Change in Control Termination also constitutes a “separation from service” within the meaning of Section 409A.  In such case the Participant shall be
entitled to the benefits of such Awards as though the Vesting Date is the date of such Change of Control Termination.  For the purposes of this paragraph, all Performance Criteria with respect to any Performance Share Units shall be deemed to
have been met at target on the relevant Vesting Date.  Notwithstanding the foregoing, if any U.S. Taxpayer is determined to be a “specified employee” (as determined under Section 409A, in accordance with the Corporation’s
policies) at the time of the Change in Control Termination, then settlement of the Award shall not occur until the earlier of the date that is six (6) months following his or her separation from service and the Vesting Date set forth in the
applicable Award Agreement or determined by application of Section 5.2(a) or (b) of the Plan.  If a Change of Control Termination is not in connection with a Change of Control that meets the definition of “change in control event”
within the meaning of Section 409A, all unvested Awards will become vested upon such Change of Control Termination in accordance

  
  

  
 20

 
 with this Section 6.4, but
payment/settlement will occur on the Vesting Date set forth in the applicable Award Agreement or determined by application of Sections 5.2(a) or (b), unless earlier payment/settlement is otherwise permitted under Section 409A. 

 
 Notwithstanding Sections 5.6 and 6.6, the exercise of the
Committee’s discretion will not result in a change in the time of settlement/payment of an Award.  No provision of the Plan or amendment to the Plan may permit the acceleration or deferral of payments under the Plan to U.S. Taxpayers
contrary to the provisions of Section 409A.
  
 In the event
of a termination of the Plan, no payments to U.S. Taxpayers shall be made, except on the schedule permitted by Section 409A.
  

All provisions of the Plan shall continue to apply to the U.S. Taxpayer to the extent they have not been specifically modified by this Schedule “A”.
In regard to a U.S. Taxpayer, the Committee shall interpret all Plan provisions in a manner that does not cause a violation of Section 409A.EX-4.3

  Exhibit 4.3

 
 TITAN MEDICAL INC.

 
 DEFERRED SHARE UNIT PLAN

 
 ARTICLE 1    INTRODUCTION

 
 1.1       Purpose
  

The purpose of this Deferred Share Unit Plan is to provide directors of Titan Medical Inc. (the “Corporation”) with the opportunity to acquire
Deferred Share Units (as defined herein) of the Corporation in order to allow them to participate in the long-term success of the Corporation and to promote a greater alignment of their interests with the interests of the Corporation’s
shareholders.
  

ARTICLE
 2    INTERPRETATION
  

2.1       Definitions

 
 For purposes of the Plan:

 

	  
 	 (a)
 	 “Account” means an account maintained by the Corporation for each Participant and
which will be credited by means of a book-keeping entry with DSUs that are granted in accordance with the terms of this Plan and the DSU Agreements;
 

 

	  
 	 (b)
 	 “Applicable Withholding Amounts” is defined in Section 4.7(a) of the Plan;

  

	  
 	 (c)
 	 “Black Out Period” means the period of time when, pursuant to any policies of the
Corporation, any securities of the Corporation may not be traded by certain persons as designated by the Corporation, including any Participant that holds a DSU;
 

 

	  
 	 (d)
 	 “Board” means the Board of Directors of the Corporation as may be constituted from
time to time;
 

  

	  
 	 (e)
 	 “Cash Payment” is defined in Section 4.7(a) of the Plan;
 

 

	  
 	 (f)
 	 “Committee“ means the Compensation Committee of the Board or such other committee
of the Board as may be appointed by the Board to administer the Plan, provided, however, that if no such committee is in existence at any particular time and the Board has not appointed another committee of the Board to administer the Plan, all
references in the Plan to “Committee” shall at such time be in reference to the Board;
 

  

	  
 	 (g)
 	 “Corporation” means Titan Medical Inc. and includes any successor corporation;

  

	  
 	 (h)
 	 “Deferred Share Unit“ or “DSU” means a unit equivalent in value
to a Share, credited by means of a bookkeeping entry in the books of the Corporation in accordance with Article 4;
 

  

	  
 	 (i)
 	 “Distribution Date” is defined in Section 4.6 of the Plan;
 

  

	  
 	 (j)
 	 “Distribution Value” means, with respect to each Deferred Share Unit credited to a
Participant’s Account, the Fair Market Value per Share;
 

  

  

 

  
 -2-

 

	  
 	 (k)
 	 “Dividend Equivalents” means a bookkeeping entry whereby each Deferred Share Unit
is credited with the equivalent amount of the dividend paid on a Share in accordance with Section 4.3;
 

  

	  
 	 (l)
 	 “Dividend Market Value” means the Fair Market Value per Share on the dividend
record date;
 

  

	  
 	 (m)
 	 “DSU Agreement” is defined in Section 5.11 of the Plan;
 

 

	  
 	 (n)
 	 “Eligible Director” means an individual who is, at the relevant time, a member of
the Board;
 

  

	  
 	 (o)
 	 “Exchange” means the TSX or Nasdaq or, if the Shares are not then listed and
posted for trading on the TSX or Nasdaq, such stock exchange on which such Shares are listed and posted for trading and on which the majority of the trading volume and value of such Shares occurs;
 

 

	  
 	 (p)
 	 “Fair Market Value” with respect to a Share, as at any date, means the weighted
average of the prices at which the Shares traded on the TSX (or, if the Shares are not then listed and posted for trading on the TSX or are then listed and posted for trading on more than one stock exchange, on such stock exchange on which the
majority of the trading volume and value of the Shares occurs) for the five (5) trading days on which the Shares traded on the said exchange immediately preceding such date. In the event that the Shares are not listed and posted for trading on any
stock exchange, the Fair Market Value shall be the fair market value of the Shares as determined by the Board in its sole discretion, acting reasonably and in good faith;
 

 

	  
 	 (q)
 	 “Insider” has the meaning ascribed thereto in Part I of the TSX Company Manual, as
amended from time to time;
 

  

	  
 	 (r)
 	 “Nasdaq” means the NASDAQ Stock Market LLC;
 

 

	  
 	 (s)
 	 “Participant” means an Eligible Director who is granted DSU’s in accordance
with Section 4.1 hereof;
 

  

	  
 	 (t)
 	 “Payment Shares” is defined in Section 4.8 of the Plan;
 

 

	  
 	 (u)
 	 “Person” means any individual, sole proprietorship, partnership, firm, entity,
unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, fund, organization or other group of organized persons, government, government regulatory authority, governmental department, agency,
commission, board, tribunal, dispute settlement panel or body, bureau, court, and where the context requires any of the foregoing when they are acting as trustee, executor, administrator or other legal representative;
 

 

	  
 	 (v)
 	 “Plan” means this Deferred Share Unit Plan as amended, restated, supplemented or
otherwise modified from time to time;
 

  

	  
 	 (w)
 	 “Security Based Compensation Arrangement” has the meaning ascribed thereto in Part
VI of the TSX Company Manual, as amended from time to time;
 

  
  

  
 -3-

 

	  
 	 (x)
 	 “Separation Date” means the earliest date on which the Participant is no longer a
member of the Board of the Corporation nor is otherwise employed by the Corporation or any of its Subsidiaries in any fashion;
 

 

	  
 	 (y)
 	 “Share” means a common share of the Corporation or, in the event of an adjustment
contemplated by Section 4.10, such other number or type of securities as the Committee may determine;
 

  

	  
 	 (z)
 	 “Subsidiary” has the meaning ascribed thereto in the Securities Act (Ontario);

  

	  
 	 (aa)
 	 “TSX” means the Toronto Stock Exchange; and
 

 

	  
 	 (bb)
 	 “TSX Company Manual” means the Toronto Stock Exchange Company Manual, as amended
from time to time.
 

  

2.2       Interpretation

 

	  
 	 (a)
 	 Words in the singular include the plural and words in the plural include the singular. Words
importing male persons include female persons, corporations or other entities, as applicable. The headings in this document are for convenience and reference only and shall not be deemed to alter or affect any provision hereof. The words
“hereto”, “herein”, “hereby”, “hereunder”, “hereof” and similar expressions mean or refer to this document as a whole and not to any particular Article, Section, paragraph or other part
hereof.
 

  

	  
 	 (b)
 	 Whenever the Board or, where applicable, the Committee or any sub-delegate of the Committee is to
exercise discretion in the administration of the terms and conditions of this Plan, the term “discretion” means the sole and absolute discretion of the Board or the Committee or the sub-delegate of the Committee, as the case may be.

  

	  
 	 (c)
 	 Unless otherwise specified, all references to money amounts are to Canadian currency.
 

  
 ARTICLE 3    ADMINISTRATION OF THE PLAN

 
 3.1       Administration of the Plan
  

	  
 	 (a)
 	 Except for matters that are under the jurisdiction of the Board as specified under the Plan or as
required by law and subject to Sections 3.1(b), this Plan will be administered by the Committee and the Committee has sole and complete authority, in its discretion, to:
 

 

	  
 	 (i)
 	 interpret and construe any provision hereof and decide all questions of
fact arising in their interpretation;
 

  

	  
 	 (ii)
 	 adopt, amend, suspend and rescind such rules and regulations for
administration of this Plan as the Board may deem necessary in order to comply with the requirements of this Plan, in order to conform to any law or regulation or to any change in any laws or regulations applicable thereto, or in order to ensure
that the plan qualifies and remains qualified as a “prescribed plan or arrangement” for the 
 

  

purposes of the definition of “salary deferral arrangement” in the Income Tax Act (Canada);
  

	  
 	 (iii)
 	 exercise rights reserved to the Corporation under the Plan;

  
  

  
 -4-

 

	  
 	 (iv)
 	 take any and all actions permitted by this Plan;
 

  

	  
 	 (v)
 	 prescribe forms for notices to be prescribed by the Corporation under the
Plan; and
 

  

	  
 	 (vi)
 	 make any other determinations and take such other action in connection
with the administration of this Plan that it deems necessary or advisable.
 

  

provided that the Committee shall not exercise its authority in a manner that would cause the Plan to cease to qualify as a “prescribed plan
or arrangement” for the purposes of the definition of “salary deferral arrangement” in the Income Tax Act (Canada). The Committee’s determinations and actions under this Plan are final, conclusive and binding on the
Corporation, the Participants and all other Persons.
  

	  
 	 (b)
 	 To the extent permitted by applicable law, the Committee may, from time to time, delegate to any
specified officer of the Corporation all or any of the powers of the Committee. In such event, the specified officer will exercise the powers delegated to it by the Committee in the manner and on the terms authorized by the Committee. Any decision
made or action taken by the specified officer arising out of or in connection with the administration or interpretation of this Plan in this context is final, binding and conclusive on the Corporation, the Participants and all other Persons.

  
 3.2       Determination of Value if Shares Not Publicly Traded

 
 If the Shares are not publicly traded on the Exchange at the
relevant time such that the Distribution Value and/or the Dividend Market Value cannot be determined in accordance with the definitions of those terms, such values shall be determined by the Committee acting in good faith, or in the absence of the
Committee, by the Board acting in good faith.
  

3.3       Eligibility

 
 Any individual who at the relevant time is an Eligible
Director is eligible to participate in the Plan. Eligibility to participate does not confer upon any individual a right to receive an award of Deferred Share Units pursuant to the Plan.

 
 3.4       Exemption from Plan Participation
  

Notwithstanding any other provision of the Plan, if a Participant is resident in a jurisdiction in which an award of Deferred Share Units under the Plan might be
considered to be income which is subject to taxation at the time of such award, the Participant may elect not to participate in the Plan by providing a written notice to the Chief Financial Officer of the Corporation.

 
 3.5       Discretionary Relief
  

Notwithstanding any other provision hereof, the Board may, in its sole discretion, waive any condition set out herein if it determines that specific individual
circumstances warrant such waiver.
  

ARTICLE
 4    DEFERRED SHARE UNITS

  
  

  
 -5-

 
 4.1       Grant of Deferred Share Units
  

	  
 	 (a)
 	 The Committee may, from time to time in its sole discretion, grant DSUs to Eligible Directors and
upon such grant, such Eligible Directors shall become Participants in this Plan. In respect of each grant of DSUs, the Committee shall determine:
 

 

	  
 	 (i)
 	 the number of DSUs allocated to the Participant; and
 

  

	  
 	 (ii)
 	 such other terms and conditions of the DSUs applicable to each
grant.
 

  

	  
 	 (b)
 	 The Corporation shall not make any grant of DSU’s pursuant to the Plan unless and until such
grant or issuance and delivery can be completed in compliance with all applicable laws, including requirements set out in the Income Tax Regulations (Canada) for the Plan to qualify as a “prescribed plan or arrangement” for the purposes
of the definition of “salary deferral arrangement” in the Income Tax Act (Canada), and all other regulations, rules, orders of governmental or regulatory authorities and the requirements of all applicable stock exchanges upon which
Shares are listed. The Corporation shall be obligated to take all reasonable action to comply with any such laws, regulations, rules, orders or requirements.
 

 

	  
 	 (c)
 	 Certificates will not be issued to evidence DSUs. Book entry accounts, to be known as the
“Deferred Share Unit Account” shall be maintained by the Corporation for each Participant and will be credited with DSUs granted to a Participant from time to time.
 

 

	  
 	 (d)
 	 The term during which a DSU may be outstanding shall, subject to the provisions of this Plan
requiring or permitting the acceleration or the extension of the term, be such period as may be determined from time to time by the Board or the Committee, but subject to the rules of any stock exchange or other regulatory body having
jurisdiction.
 

  
 4.2       Vesting
  

Deferred Share Units will be fully vested upon being granted and credited to a Participant’s Account.

 
 4.3       Credits for Dividends
  

A Participant’s Account shall be credited with Dividend Equivalents in the form of additional Deferred Share Units as of each dividend payment date in
respect of which normal cash dividends are paid on the Shares. Such Dividend Equivalents shall be computed by dividing: (a) the amount obtained by multiplying the amount of the dividend declared and paid per Share by the number of Deferred Share
Units recorded in the Participant’s Account on the record date for the payment of such dividend, by (b) the Dividend Market Value, with fractions computed to three decimal places. The foregoing does not obligate the Corporation to declare or
pay dividends on Shares and nothing in this Plan shall be interpreted as creating such an obligation.
  

4.4       Limits on Issuances

 
 Notwithstanding any other provision of this Plan:

 

	  
 	 (a)
 	 the maximum number of Shares issuable pursuant to outstanding DSUs at any time shall be limited to 5%
of the aggregate number of issued and outstanding Shares, provided that the maximum number of Shares issuable pursuant to outstanding DSUs and all other 
 

 

  
  

  
 -6-

 
 Security Based Compensation Arrangements, shall not
exceed 15% of the Shares outstanding from time to time;
  

	  
 	 (b)
 	 the number of Shares issuable to Insiders, at any time, under all Security Based Compensation
Arrangements, shall not exceed 15% of the issued and outstanding Shares; and
 

  

	  
 	 (c)
 	 the number of Shares issued to Insiders, within any one-year period, under all Security Based
Compensation Arrangements, shall not exceed 15% of the issued and outstanding Shares.
 

  

For the purposes of this Section 4.4, any increase in the issued and outstanding Shares (whether as a result of the issue of Shares pursuant to DSUs or otherwise)
will result in an increase in the number of Shares that may be issued pursuant to DSUs outstanding at any time. Further, if the acquisition of Shares by the Corporation for cancellation should result in the foregoing tests no longer being met, this
shall not constitute non-compliance with this Section 4.4 for any awards outstanding prior to such purchase of Shares for cancellation.
  

DSUs that are cancelled, terminated or expire shall result in the Shares that were reserved for issuance thereunder being available for a subsequent grant of DSUs
pursuant to this Plan to the extent of any Shares issuable thereunder that are not issued under such cancelled, terminated or expired DSUs.
  

Upon Cash Payment being made or Payment Shares being issued in settlement of DSUs, the number of Shares reserved for issuance in respect of such DSUs
automatically become available to be made the subject of new DSUs, provided that the total number of Shares reserved for issuance under the Plan and all other Security Based Compensation Arrangements does not exceed 15% of the issued and outstanding
Shares of the Corporation.
  
 4.5       Reporting of Deferred Share Units

 
 Statements of the Deferred Share Unit Accounts will be
provided to Participants on an annual basis.
  

4.6       Distribution Date
Election
  
 A Participant shall have the right to
receive Payment Shares or, upon the joint election of the Corporation and the Participant, Cash Payment or a combination of Cash Payment and Payment Shares in respect of Deferred Share Units recorded in the Participant’s Account in accordance
with Sections 4.7 or 4.8, on one of the following dates (the “Distribution Date”):
  

	  
 	 (a)
 	 on a date to be determined by the Corporation no later than 90 days following the Separation Date;
or
 

  

	  
 	 (b)
 	 such later date as the Participant may elect by written notice delivered to the Chief Financial
Officer of the Corporation prior to the Separation Date, provided that in no event shall a Participant be permitted to elect a date which is later than December 1st of the calendar year following the calendar year in which the Separation
Date occurs.
 

  
 4.7       Distribution of Deferred Share Units as Cash Payment

 
 In the event the Corporation and the Participant jointly
elect to settle Deferred Share Units by way of a Cash Payment:

  
  

  
 -7-

 

	  
 	 (a)
 	 subject to and in accordance with Section 4.7(b), a Participant shall receive a payment equal in
value to the number of Deferred Share Units recorded in the Participant’s Account on the Distribution Date that the Corporation and the Participant jointly elect to settle by way of payment in cash multiplied by the Distribution Value of a
Share on the Distribution Date (the “Cash Payment”). The Corporation is authorized to deduct from the Cash Payment an amount equivalent to the minimum amount of taxes and other minimum amounts as the Corporation may be required by
law to withhold, as the Corporation determines (the “Applicable Withholding Amounts”). Upon payment in full of the value of the Deferred Share Units, less the Applicable Withholding Amounts, the Deferred Share Units shall be
cancelled, and no further payments shall be made to the Participant under the Plan; and
 

  

	  
 	 (b)
 	 the Cash Payment less any Applicable Withholding Amounts, will be paid to the Participant in cash
within ten (10) business days after the Distribution Date, or in the event of the Participant’s death, his beneficiary or legal representative in accordance with Section 4.9 herein.
 

 
 4.8       Distribution of Deferred Share Units in Payment Shares
  

Subject to Section 4.7, Deferred Share Units shall be settled by the issuance of Payment Shares as follows:

 

	  
 	 (a)
 	 The Corporation shall within 10 business days after the Distribution Date issue to the Participant a
number of treasury Shares equal to the number of Deferred Share Units in the Participant’s Account that became payable on the Distribution Date (the “Payment Shares”).
 

 

	  
 	 (b)
 	 Subject to Section 4.12 of this Plan, as a condition to the issue of treasury Shares in settlement of
any Deferred Share Units, the Corporation may require the Participant to first pay to the Corporation, or the Corporation may deduct, an amount equivalent to the Applicable Withholding Amounts or the Corporation may take such other steps as it
considers to be necessary or appropriate, including the sale of Payment Shares on behalf of the Participant, in order to provide to the Corporation the Applicable Withholding Amounts. The Corporation shall advise the Participant in writing of any
Applicable Withholding Amounts required in connection with the issue of Shares in settlement of Deferred Share Units.
 

  

	  
 	 (c)
 	 The Corporation shall not be required to issue or cause to be delivered treasury Shares or issue or
cause to be delivered certificates evidencing Shares to be delivered in settlement of any DSUs, unless and until such issuance and delivery can be completed in compliance with the applicable laws, regulations, rules, orders of governmental or
regulatory authorities and the requirements of all applicable stock exchanges upon which Shares are listed. The Corporation shall be obligated to take all reasonable action, on a timely basis, to comply with any such laws, regulations, rules,
orders, or requirements.
 

  

	  
 	 (d)
 	 If Shares may not be issued pursuant to any DSUs due to any Black Out Period, such Share issuance
shall occur seven business days following the end of the Black-Out Period (or such longer period as permitted by applicable regulatory authorities and approved by the Committee).
 

 

	  
 	 (e)
 	 No fractional Shares shall be issued upon the settlement of DSUs. If a Participant would otherwise
become entitled to a fractional Share upon the settlement of a DSU, such 
 

  

  
  

  
 -8-

 
  

Participant shall only have the right to receive the next lowest whole number of Shares and no payment or other adjustment will be made with respect to
the fractional interest so disregarded.
  

	  
 	 (f)
 	 All Payment Shares issued to Persons in the United States pursuant to the Plan will be issued
pursuant to the registration requirements of the United States Securities Act of 1933, as amended, or an exemption from such registration requirements.
 

 
 4.9       Death of Participant Prior to Distribution
  

Upon the death of a Participant prior to the distribution of the Deferred Share Units credited to the Account of such Participant under the Plan, Payment Shares
or, upon the joint election of the Corporation and the executor or administrator of the Participant’s estate, Cash Payment or a combination of Cash Payment and Payment Shares shall be issued or paid to the estate of such Participant on or
about the thirtieth (30th) day after the Corporation is notified of the death of the Participant or on a later date elected by the Participant’s estate in the form prescribed for such purposes by the Corporation and delivered to the Chief
Financial Officer of the Corporation not later than twenty (20) days after the Corporation is notified of the death of the Participant, provided that such elected date is no later than the last business day of the calendar year following the
calendar year in which the Participant dies so that payment can be made on or before such last business day. Any Cash Payment shall be equivalent to the amount which would have been paid to the Participant pursuant to and subject to Section 4.7,
calculated on the basis that the day on which the Participant dies, or the date elected by the estate, as applicable, is the Distribution Date. Upon settlement under this Section 4.9 of the Deferred Share Units credited to the Account of a
Participant, subject to any Applicable Withholding Amounts, the Deferred Share Units shall be cancelled, and no further distributions or payments will be made from the Plan in relation to the Participant. 

 
 4.10     Adjustments to Deferred Share Units
  

In the event: (a) of any change in the Shares through subdivision, consolidation, reclassification, amalgamation, merger or otherwise; or (b) that any rights are
granted to all or substantially all shareholders to purchase Shares at prices substantially below Fair Market Value as of the date of grant (other than the payment of dividends in respect of the Shares as contemplated by Section 4.3); or (c) that,
as a result of any recapitalization, merger, consolidation or other transaction, the Shares are converted into or exchangeable for any other securities or property, then the Board may make such adjustments to this Plan, the Account of each
Participant, the DSU Agreements and the Deferred Share Units outstanding under this Plan as the Board may, in its sole discretion, consider appropriate in the circumstances to prevent dilution or enlargement of the rights granted to Participants
hereunder and\or to provide for the Participants to receive and accept such other securities or property in lieu of Shares, and the Participants shall be bound by any such determination.

 
 4.11     U.S. Taxpayers
  

The rules set forth in Schedule A to this Plan apply to any Participant who is a U.S. Taxpayer (as defined therein) and form a part of this Plan.

 
 4.12     Taxes
  

	  
 	 (a)
 	 A Participant shall be solely responsible for reporting and paying income tax payable in respect of
any Cash Payment or Shares received by the Participant under this Plan. The Corporation will provide each Participant who is resident in Canada with (or cause each Participant to be provided with) a T4 slip or such information return as may be
required by 
 

  

  
  

  
 -9-

 
  

applicable law to report income, if any, arising upon the grant or exercise of rights under this Plan by a Participant who is resident in Canada for
income tax purposes.
  

	  
 	 (b)
 	 Further to Section 4.8(b) of this Plan, the Corporation shall have the power and the right to deduct
or withhold, or require (as a condition of exercise) a Participant to remit to the Corporation, the Applicable Withholding Amounts to satisfy, in whole or in part, federal, provincial, and local taxes, domestic or foreign, required by law to be
withheld with respect to any taxable event arising as a result of this Plan, including the grant or exercise of Deferred Share Units granted under this Plan. With respect to Applicable Withholding Amounts, the Corporation shall have the irrevocable
right to (and the Participant consents to the Corporation) setting off any amounts required to be withheld, in whole or in part, against amounts otherwise owing by the Corporation to such Participant (whether arising pursuant to the Participant
relationship as an officer or employee of the Corporation or as a result of the Participant providing services on an ongoing basis to the Corporation or otherwise), or may make such other arrangements as are satisfactory to the Participant and the
Corporation. In addition, the Corporation may elect, in its sole discretion, to satisfy the Applicable Withholding Amounts, in whole or in part, by withholding such number of Payment Shares as it determines are required to be sold by the
Corporation, as trustee, to satisfy the Applicable Withholding Amounts net of selling costs (which costs shall be the responsibility of the Participant and which shall be and are authorized to be deducted from the proceeds of sale). The Participant
consents to such sale and grants to the Corporation an irrevocable power of attorney to effect the sale of such Payment Shares and acknowledges and agrees that the Corporation does not accept responsibility for the price obtained on the sale of such
Payment Shares. Any reference in this Plan to the issuance of Payment Shares or a payment of cash is expressly subject to this paragraph 4.12(b).
 

 
 ARTICLE 5    GENERAL

 
 5.1       Amendment, Suspension, or Termination of Plan
  

	  
 	 (a)
 	 The Board may amend, suspend or discontinue this Plan or amend any DSU or DSU Agreement at any time
without the consent of a Participant, provided that such amendment shall not adversely alter or impair the rights of any Participant in respect of any DSU previously granted to such Participant under the Plan, except as otherwise permitted
hereunder. In addition, the Board may, by resolution, amend this Plan and any DSU granted under it (together with any related DSU Agreement) without shareholder approval, provided however, that at any time while the Shares are listed for trading on
the TSX, the Board will not be entitled to amend this Plan or any DSU granted under it (together with any related DSU Agreement) without shareholder and, if applicable, TSX approval: (i) to increase the maximum
number of Shares issuable pursuant to this Plan; (ii) to permit the assignment or transfer of a DSU other than as provided for in this Plan; (iii) to add to the categories of persons eligible to participate in this Plan; (iv) to remove or amend
Section 4.4(b) or Section 4.4(c); (v) to remove or amend this Section 5.1(a); or (vi) in any other circumstances where TSX and shareholder approval is required by the TSX.
 

 

	  
 	 (b)
 	 Without limitation of Section 5.1(a), the Board may correct any defect or supply any omission or
reconcile any inconsistency in this Plan in the manner and to the extent deemed necessary or desirable, may establish, amend, and rescind any rules and regulations relating to this Plan, and may make such determinations as it deems necessary or
desirable for the administration of this Plan.
 

  
  

  
 -10-

 

	  
 	 (c)
 	 If the Board terminates or suspends the Plan, previously credited DSUs will remain outstanding and in
effect in accordance with the terms of the Plan. If DSUs remain outstanding after Plan termination or suspension, such DSUs shall not be entitled to Dividend Equivalents unless at the time of termination or suspension the Committee determines that
the entitlement to Dividend Equivalents after termination or during suspension, as applicable, should be continued. Subject to the foregoing sentence, if the Board terminates or suspends the Plan, no new Deferred Share Units will be credited to the
Account of a Participant.
 

  

	  
 	 (d)
 	 The Board shall not require the consent of any affected Participant in connection with a termination
of the Plan in which Payment Shares are issued to the Participant in respect of all such Deferred Share Units.
 

  

5.2       Compliance with
Laws
  
 The administration of the Plan shall be
subject to and made in conformity with all applicable laws and any applicable regulations of a duly constituted regulatory authority. Should the Committee, in its sole discretion, determine that it is not feasible or desirable to carry out a
distribution of Deferred Share Units due to such laws or regulations, its obligation shall be satisfied by means of an equivalent cash payment (equivalence being determined on a before-tax basis). If the Committee determines that the listing,
registration or qualification of the Shares subject to this Plan upon any securities exchange or under any provincial, state, federal or other applicable law, or the consent or approval of any governmental body or stock exchange is necessary or
desirable, as a condition of, or in connection with, the crediting of DSUs or the issue of Payment Shares hereunder, the Corporation shall be under no obligation to credit DSUs or issue Payment Shares hereunder unless and until such listing,
registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee.
  

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

 
 5.4       Assignment
  

Rights and obligations under the Plan may be assigned by the Corporation to a successor in the business of the Corporation, any company resulting from any
amalgamation, reorganization, combination, merger or arrangement of the Corporation, or any company acquiring all or substantially all of the assets or business of the Corporation.

 
 5.5       DSUs Non-Transferable
  

Except as required by law, the rights of a Participant hereunder are not capable of being assigned, transferred, alienated, sold, encumbered, pledged, mortgaged
or charged and are not capable of being subject to attachment or legal process for the payment of any debts or obligations of the Participant.

  
  

  
 -11-

 
 5.6       Participation is Voluntary; No Additional Rights
  

The participation of any Participant in the Plan is entirely voluntary and not obligatory and shall not be interpreted as conferring upon such Participant any
rights or privileges other than those rights and privileges expressly provided in the Plan. In particular, participation in the Plan does not constitute a condition of employment or service nor a commitment on the part of the Corporation to ensure
the continued employment or service of such Participant. Nothing in this Plan shall be construed to provide the Participant with any rights whatsoever to participate or continue participation in this Plan or to compensation or damages in lieu of
participation, whether upon termination of service as an Eligible Director or otherwise. The Corporation does not assume responsibility for the personal income or other tax consequences for the Participants and they are advised to consult with their
own tax advisors.
  
 5.7       No Shareholder Rights
  

Under no circumstances shall Deferred Share Units be considered Shares or other securities of the Corporation, nor shall they entitle any Participant to exercise
voting rights or any other rights attaching to the ownership of Shares or other securities of the Corporation, nor shall any Participant be considered the owner of Shares by virtue of the award of Deferred Share Units.

 
 5.8       Unfunded and Unsecured Plan
  

Unless otherwise determined by the Board, the Plan shall be unfunded and the Corporation will not secure its obligations under the Plan. To the extent any
Participant or his or her estate holds any rights by virtue of a grant of Deferred Share Units under the Plan, such rights (unless otherwise determined by the Board) shall be no greater than the rights of an unsecured creditor of the
Corporation.
  
 5.9       Market Fluctuations
  

No amount will be paid to, or in respect of, a Participant under the Plan to compensate for a downward fluctuation in the price of Shares, nor will any other form
of benefit be conferred upon, or in respect of, a Participant for such purpose. The Corporation makes no representations or warranties to Participants with respect to the Plan or the Shares whatsoever. In seeking the benefits of participation a
Participant agrees to accept all risks associated with a decline in the market price of Shares.
  

5.10     Participant Information

 
 Each Participant shall provide the Corporation with all
information (including personal information) required by the Corporation in order to administer the Plan. Each Participant acknowledges that
  

information required by the Corporation in order to administer the Plan may be disclosed to the Board and other third parties in connection with the
administration of the Plan. Each Participant consents to such disclosure and authorizes the Corporation to make such disclosure on the Participant’s behalf.

 
 5.11     DSU Agreement
  

To acquire DSUs, a Participant shall enter into an agreement with the Corporation in such form as determined by the Board from time to time (the “DSU
Agreement”), within such time period and in such manner as specified by the Board. If a DSU Agreement is not entered into within the time and manner specified, the Corporation reserves the right to revoke the crediting of DSUs to the
Participant’s Account.

  
  

  
 -12-

 
 5.12     Currency
  

All amounts paid or values to be determined under this Plan shall be in Canadian dollars unless stated otherwise.

 
 5.13     Effective Date of the Plan
  

This Plan becomes effective on a date to be determined by the Board.

 
 5.14     Governing Law
  

The Plan shall be governed by, and interpreted in accordance with, the laws of the Province of Ontario and the laws of Canada applicable therein, without regard
to principles of conflict of laws.
  
 APPROVED by the Board
this 29 day of April, 2019.
  

  
  

  
 SCHEDULE
A
  

PLAN PROVISIONS APPLICABLE TO U.S. TAXPAYERS

 
 The provisions of this Schedule “A” apply to Deferred
Share Units held by a U.S. Taxpayer to the extent such Deferred Share Units are subject to U.S. Taxation. The following provisions apply, notwithstanding anything to the contrary in the Plan. All capitalized terms used in this Schedule
“A” and not defined herein, shall have the meaning attributed to them in the Plan.
  

“Section 409A” means Section 409A of the United States Internal Revenue Code and the regulations and authority promulgated thereunder.

 
 “Separation Date“ shall mean the date on
which the Participant incurs a “separation from service” within the meaning of Section 409A.
  

“U.S. Taxpayer” shall mean any person who is a U.S. citizen, U.S. permanent resident, or other person who has been granted or is eligible to be
granted a Deferred Share Unit under the Plan that is otherwise subject to U.S. taxation.
  

	 1.
 	 Notwithstanding Section 3.4 of the Plan, each election by a U.S. Taxpayer not to participate in the
Plan or to decline participation for a particular year, must be irrevocably made not later than the end of the calendar year prior to the year for which the Deferred Share Units are granted. Notwithstanding the prior sentence, for U.S. Taxpayers who
become Eligible Directors for the first time in any calendar year, an election pursuant to Section 3.4 may be made at any time within 30 days after an initial grant of DSUs is made to such Eligible Director. Such election shall only be effective
with respect to DSU grants made after the written notice described in Section 3.4 has been received by the Chief Financial Officer of the Corporation.
 

 

	 2.
 	 Notwithstanding Section 4.6 of the Plan, the following procedure shall be used to determine a
Distribution Date for Deferred Share Units that are subject to this Schedule A.
 

  

	  
 	 (a)
 	 An Eligible Director who is a U.S. Taxpayer shall have the right to elect, at his or her option, to
receive the distribution of all amounts credited to his or her Deferred Share Unit Account on any date (the “Distribution Date”) within the period commencing on his or her Separation Date, and ending on December 1, of the first
calendar year following the year in which the Separation Date occurs. Such election shall be made by written notice delivered to the Chief Financial Officer of the Corporation not later than the end of the calendar year prior to the year for which
the Deferred Share Units are granted. If no election is made, the Distribution Date shall be the Separation Date, subject to clause (b) below.
 

 

	  
 	 (b)
 	 Notwithstanding the foregoing, if any U.S. Taxpayer is determined to be a “specified
employee” (as determined under Section 409A, in accordance with the Corporation’s policies) at the Separation Date, then the Distribution Date shall not be earlier than the date that is six (6) months following his or her Separation
Date.
 

  

	 3.
 	 Notwithstanding Section 4.8(d) of the Plan (and except as required pursuant to Section 2(b) of this
Schedule A), the issuance of Shares shall not be delayed beyond the end of the year in which the Distribution Date occurs, or, if later, the date that is 2 1⁄2 months after the Distribution Date, unless the Committee reasonably anticipates that
the issuance of Shares would violate federal securities 
 

  

 

A-
1

  

  

laws of other applicable laws, in which case Shares will be issued at the earliest date at which the
Committee reasonably anticipates that issuance of Shares would not cause such violation.  
  

	 4.
 	 Notwithstanding Section 4.9 of the Plan or any election by the Participant of a Distribution Date,
upon the death of a Participant prior to the distribution of his or her Deferred Share Unit Account, an issuance of Payment Shares or, upon the joint election of the Corporation and the executor or administrator of the Participant’s estate, a
Cash Payment or a combination of Cash Payment and Payment Shares shall be issued or paid to the estate of such Participant on the first business day that occurs following 90 days after the Participant’s date of death and such date will be the
Distribution Date. No election of an alternative payment date by the estate or beneficiary shall be permitted.
 

  

	 5.
 	 Notwithstanding anything to the contrary in the Plan, no consent to an amendment, suspension or
termination that adversely affects the Deferred Share Units previously granted to a U.S. Taxpayer under Section 409A shall be required if such amendments are considered by the Committee, on the advice of counsel, to be necessary or desirable in
order to avoid adverse U.S. tax consequences to the U.S. Taxpayer.
 

  

No provision of the Plan or amendment to the Plan may permit the acceleration of payments under the
Plan to U.S. Taxpayers contrary to the provisions of Section 409A.
  

In the event of a termination of the Plan, no payments to U.S. Taxpayers shall be made, except on the
schedule permitted by Section 409A.
  

All provisions of the Plan shall continue to apply to the U.S. Taxpayer to the extent they have not
been specifically modified by this Schedule “A”. In regard to a U.S. Taxpayer, the Committee shall interpret all Plan provisions in a manner that does not cause a violation of Section 409A.

 

	 6.
 	 Restrictions on Deferred Share Units of Certain Dual Taxpayers.  Notwithstanding anything in the
Plan to the contrary, if the Deferred Share Units of a U.S. Taxpayer are subject to tax under both the income tax laws of Canada and the income tax laws of the United States, the following special rules regarding forfeiture will apply. For greater
clarity, these forfeiture provisions are intended to avoid adverse tax consequences under Section 409A and/or under paragraph 6801(d) of the regulations under the Income Tax Act (Canada) (the “ITA”), that may result because of the
different requirements as to the time of redemption of Deferred Share Units (and thus the time of taxation) with respect to a U.S. Taxpayer’s “Separation from Service” under Section 409A and the U.S. Taxpayer’s Separation
Date (under Canadian tax law). The intended consequence of this Section 6 of this Schedule A is that payments to such U.S. Taxpayer in respect of Deferred Share Units will only occur if such U.S. Taxpayer experiences both a Separation from Service
under Code Section 409A and a termination or loss of office within the meaning of paragraph 6801(d) of the regulations under the ITA.  If such a U.S. Taxpayer does not experience both a Separation from Service and a termination or loss of
office within the meaning of paragraph 6801(d) of the ITA, such Deferred Share Units shall instead be immediately and irrevocably forfeited, including, but not limited to, the following situations:
 

 

	  
 	 (a)
 	 a U.S. Taxpayer experiences a Separation from Service as a result of ceasing to be a member of the
Board of the Corporation (and any related entity that is considered the same service recipient under Code Section 409A), but such U.S. Taxpayer continues providing services as an employee of the Corporation or a corporation related to the
Corporation within the meaning of the ITA such that no Separation Date has occurred; and
 

 A-
2

  

  

	  
 	 (b)
 	 an Eligible Director who is a U.S. Taxpayer experiences a termination or loss of office for any
reason such that a Separation Date occurs, but continues to provide services to the Corporation (or any related entity that is considered the same service recipient under Code Section 409A) as an independent contractor such that he has not
experienced a Separation from Service.
 

  

 A-
3

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