Document:

C21 Investments Inc.: Exhibit 4.1 - Filed by newsfilecorp.com

    

     

    C21 INVESTMENTS INC.

     

    	STOCK OPTION PLAN

     

    Dated as of February 23, 2018

     

    

    

    TABLE OF CONTENTS

    	ARTICLE 1 DEFINITIONS AND INTERPRETATION	1
	 	 
	1.1 Defined Terms	1
	1.2 Interpretation	3
	 	 
	ARTICLE 2 ESTABLISHMENT OF PLAN	3
	 	 
	2.1 Purpose	3
	2.2 Shares Reserved	4
	2.3 Non-Exclusivity	4
	2.4 Effective Date	4
	 	 
	ARTICLE 3 ADMINISTRATION OF PLAN	5
	 	 
	3.1 Administration	5
	3.2 Amendment, Suspension and Termination	5
	3.3 Compliance with Legislation	5
	 	 
	ARTICLE 4 OPTION GRANTS	6
	 	 
	4.1 Eligibility and Multiple Grants	6
	4.2 Option Agreement	6
	4.3 Limitation on Grants and Exercises	6
	 	 
	ARTICLE 5 OPTION TERMS	7
	 	 
	5.1 Exercise Price	7
	5.2 Expiry Date	7
	5.3 Vesting	8
	5.4 Non-Assignability	8
	5.5 Ceasing to be Eligible Person	8
	 	 
	ARTICLE 6 EXERCISE PROCEDURE	9
	 	 
	6.1 Exercise Procedure	9
	 	 
	ARTICLE 7 AMENDMENT OF OPTIONS	10
	 	 
	7.1 Consent to Amend	10
	7.2 Amendment Subject to Approval	10
	 	 
	ARTICLE 8 MISCELLANEOUS	10
	 	 
	8.1 No Rights as Shareholder	10
	8.2 No Right to Employment	10
	8.3 Governing Law	10
	8.4 Approval	11

    

    

    ARTICLE 1 
DEFINITIONS AND INTERPRETATION

    1.1 Defined Terms

    For the purposes of this Plan, the following terms shall have the following meanings:

    (a) "Affiliate" has the meaning ascribed thereto by the Exchange;

    (b) "Board" means the Board of Directors of the Corporation or, as applicable, a committee consisting of not less than three (3) Directors of the Corporation duly appointed to administer this Plan;

    (c) "Common Shares" means the common shares of the Corporation;

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

    (e) "Consultant" means, in relation to an Corporation, an individual (other than an Employee or a Director of the Corporation) or Company that:

    (i) is engaged to provide on an ongoing bona fide basis, consulting, technical, management or other services to the Corporation or to an Affiliate of the Corporation, other than services provided in relation to a distribution;

    (ii) provides the services under a written contract between the Corporation or the Affiliate and the individual or the Company, as the case may be;

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

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

    and includes a Company of which a Consultant is an employee or shareholder and a partnership of which a Consultant is an employee or partner;

    (f) "Corporation" means C21 Investments Inc. and its successor entities;

    (g) "Director" means a director of the Corporation or of an Affiliate;

    (h) "Disinterested Shareholder Approval" means the passing of an ordinary resolution by the holders of Common Shares excluding the Common Shares held by, to the Corporation's knowledge at the time the information is provided, the Corporation, a Participant or an Eligible Person;

    (i) "Eligible Person" means a Director, Officer, Employee or Consultant, and includes an issuer all the voting securities of which are owned by Eligible Persons;

    (j) "Employee" means an individual who:

    

    
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    (i) is considered an employee of the Issuer or its subsidiary under the Income Tax Act (Canada) (and for whom income tax, employment insurance and CPP deductions must be made at source);

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

    (iii) works for an Issuer or its subsidiary on a continuing and regular basis for a minimum amount of time per week (the number of hours should be disclosed in the submission) providing services normally provided by an employee and who  is subject to the same control and direction by the Issuer over the details and methods of work as an employee of the Issuer, but for whom income tax deductions are not made at source;

    (k) "Exchange" means the Canadian Securities Exchange and any successor entity;

    (l) "Expiry Date" means the last day of the term for an Option, as set by the Board at the time of grant in accordance with Section 5.2 and, if applicable, as amended from time to time;

    (m) "Insider" means in respect of the Corporation: (a) a Director or senior officer of the Corporation, (b) a Director or senior officer of a Company that is an Insider or subsidiary of the Corporation; (c) a Person that beneficially owns or controls, directly or indirectly, Common Shares carrying more than 10% of the voting rights attached to all outstanding Common Shares of the Corporation, or (d) the Corporation itself if it holds any of its own securities;

    (n) "Investor Relations Activities" means any activities, by or on behalf of an Corporation or shareholder of the Corporation, that promote or reasonably could be expected to promote the purchase or sale of securities of the Corporation, but does not include:

    (i) the dissemination of information provided, or records prepared, in the ordinary course of business of the Corporation:

    (A) to promote the sale of products or services of the Corporation; or

    (B) to raise public awareness of the Corporation, that cannot reasonably be considered to promote the purchase or sale of securities of the Corporation;

    (ii) activities or communications necessary to comply with the requirements of:

    (A) applicable securities laws;

    (B) Exchange requirements or the by-laws, rules or other regulatory instruments of any other self regulatory body or exchange having jurisdiction over the Corporation;

    (iii) communications by a publisher of, or writer for, a newspaper, magazine or business or financial publication, that is of general and regular paid circulation, distributed only to subscribers to it for value or to purchasers of it, if:

    

    
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    (A) the communication is only through the newspaper, magazine or publication; and

    (B) the publisher or writer receives no commission or other consideration other than for acting in the capacity of publisher or writer; or

    (iv) activities or communications that may be otherwise specified by the Exchange;

    (o) "Management Company Employee" means an individual who is employed by a person providing management services to the Corporation or an Affiliate which are required for the ongoing successful operation of the business enterprise of the Corporation or the Affiliate, but excluding a person providing Investor Relations Activities;

    (p) "Officer" means an officer of the Corporation or of an Affiliate, and includes a Management Company Employee;

    (q) "Option" means an option to purchase Common Shares pursuant to this Plan;

    (r) "Option Agreement" means an agreement, in the form attached hereto as Schedule "A", whereby the Corporation grants to an Eligible Persons an Option.

    (s) "Other Share Compensation Arrangement" means, other than this Plan and any Options, any stock option plan, stock options, employee stock purchase plan or other compensation or incentive mechanism involving the issuance or potential issuance of Common Shares, including but not limited to a purchase of Common Shares from treasury which is financially assisted by the Corporation by way of loan, guarantee or otherwise;

    (t) "Participant" means an Eligible Person who has been granted an Option; and

    (u) "Plan" means this Stock Option Plan.

    1.2 Interpretation

    (a) References to the outstanding Common Shares at any point in time shall be computed on a non-diluted basis.

    ARTICLE 2 
ESTABLISHMENT OF PLAN

    2.1 Purpose

    The purpose of this Plan is to advance the interests of the Corporation, through the grant of Options, by:

    (a) providing an incentive mechanism to foster the interest of Eligible Persons in the success of the Corporation and its Affiliates;

    (b) encouraging Eligible Persons to remain with the Corporation or its Affiliates; and

    (c) attracting new Directors, Officers, Employees and Consultants.

    

    
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    2.2 Shares Reserved

    (a) The aggregate number of Common Shares that may be reserved for issuance pursuant to Options shall not exceed 10% of the outstanding Common Shares at the time of the granting of an Option, LESS the aggregate number of Common Shares then reserved for issuance pursuant to any Other Share Compensation Arrangement. For greater certainty, if an Option is surrendered, terminated or expires without being exercised, the Common Shares reserved for issuance pursuant to such Option shall be available for new Options granted under this Plan.

    (b) If there is a change in the outstanding Common Shares by reason of any share consolidation or split, reclassification or other capital reorganization, or a stock dividend, arrangement, amalgamation, merger or combination, or any other change to, event affecting, exchange of or corporate change or transaction affecting the Common Shares, the Board shall make, as it shall deem advisable and subject to the requisite approval of the relevant regulatory authorities, appropriate substitution and/or adjustment in:

    (i) the number and kind of shares or other securities or property reserved or to be allotted for issuance pursuant to this Plan;

    (ii) the number and kind of shares or other securities or property reserved or to be allotted for issuance pursuant to any outstanding unexercised Options, and in the exercise price for such shares or other securities or property; and

    (iii) the vesting of any Options (subject to the approval of the Exchange if such vesting is mandatory under the policies of the Exchange), including the accelerated vesting thereof on conditions the Board deems advisable,

    and if the Corporation undertakes an arrangement or is amalgamated, merged or combined with another corporation, the Board shall make such provision for the protection of the rights of Participants as it shall deem advisable.

    (c) No fractional Common Shares shall be reserved for issuance under this Plan and the Board may determine the manner in which an Option, insofar as it relates to the acquisition of a fractional Common Share, shall be treated.

    (d) The Corporation shall, at all times while this Plan is in effect, reserve and keep available such number of Common Shares as will be sufficient to satisfy the requirements of this Plan.

    2.3 Non-Exclusivity

    Nothing contained herein shall prevent the Board from adopting such other incentive or compensation arrangements as it shall deem advisable.

    2.4 Effective Date

    This Plan shall be subject to the approval of any regulatory authority whose approval is required, if any. Any Options granted under this Plan prior to such approvals being given, if required, shall be conditional upon such approvals being given, and no such Options may be exercised unless and until such approvals are given. If no such approvals are required then this Plan is effective on the date it is approved by the Board.

    

    
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    3.1 Administration

    ARTICLE 3 ADMINISTRATION OF PLAN

    (a) This Plan shall be administered by the Board. Subject to the provisions of this Plan, the Board shall have the authority:

    (i) to determine the Eligible Persons to whom Options are granted, to grant such Options, and to determine any terms and conditions, limitations and restrictions in respect of any particular Option grant, including but not limited to the nature and duration of the restrictions, if any, to be imposed upon the acquisition, sale or other disposition of Common Shares acquired upon exercise of the Option, and the nature of the events and the duration of the period, if any, in which any Participant's rights in respect of an Option or Common Shares acquired upon exercise of an Option may be forfeited;

    (ii) to interpret the terms of this Plan, to make all such determinations and take all such other actions in connection with the implementation, operation and administration of this Plan, and to adopt, amend and rescind such administrative guidelines and other rules and regulations relating to this Plan, as it shall from time to time deem advisable, including without limitation for the purpose of ensuring compliance with Section 3.3 hereof.

    (b) The Board's interpretations, determinations, guidelines, rules and regulations shall be conclusive and binding upon the Corporation, Eligible Persons, Participants and all other persons.

    3.2 Amendment, Suspension and Termination

    The Board may amend, subject to the approval of any regulatory authority whose approval is required, suspend or terminate this Plan or any portion thereof. No such amendment, suspension or termination shall alter or impair any outstanding unexercised Options or any rights without the consent of such Participant. If this Plan is suspended or terminated, the provisions of this Plan and any administrative guidelines, rules and regulations relating to this Plan shall continue in effect for the duration of such time as any Option remains outstanding.

    3.3 Compliance with Legislation

    (a) This Plan, the grant and exercise of Options hereunder and the Corporation's obligation to sell, issue and deliver any Common Shares upon exercise of Options shall be subject to all applicable federal, provincial and foreign laws, policies, rules and regulations, to the policies, rules and regulations of any stock exchanges or other markets on which the Common Shares are listed or quoted for trading and to such approvals by any governmental or regulatory agency as may, in the opinion of counsel to the Corporation, be required. The Corporation shall not be obligated by the existence of this Plan or any provision of this Plan or the grant or exercise of Options hereunder to sell, issue or deliver Common Shares upon exercise of Options in violation of such laws, policies, rules and regulations or any condition or requirement of such approvals.

    (b) No Option shall be granted and no Common Shares sold, issued or delivered hereunder where such grant, sale, issue or delivery would require registration or other qualification of this Plan or of the Common Shares under the securities laws of any foreign jurisdiction, and any purported grant of any Option or any sale, issue and delivery of Common Shares hereunder in violation of this provision shall be void. In addition, the Corporation shall have no obligation to sell, issue or deliver any Common Shares hereunder unless such Common Shares shall have been duly listed, upon official notice of issuance, with all stock exchanges on which the Common Shares are listed for trading.

    

    
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    (c) Common Shares sold, issued and delivered to Participants pursuant to the exercise of Options shall be subject to restrictions on resale and transfer under applicable securities laws and the requirements of any stock exchanges or other markets on which the Common Shares are listed or quoted for trading, and any certificates representing such Common Shares shall bear, as required, a restrictive legend in respect thereof.

     

    ARTICLE 4 
OPTION GRANTS

    4.1 Eligibility and Multiple Grants

    Options shall only be granted to Eligible Persons. An Eligible Person may receive Options on more than one occasion and may receive separate Options, with differing terms, on any one or more occasions.

    4.2 Option Agreement

    Every Option shall be evidenced by an Option Agreement executed by the Corporation and the Participant, which shall, if the Participant is an Employee, Consultant or Management Company Employee, contain a representation and warranty by the Corporation and such Participant that such Participant is a bona fide Employee, Consultant or Management Company Employee, as the case may be, of the Corporation or an Affiliate. In the event of any discrepancy between this Plan and an Option Agreement, the provisions of this Plan shall govern.

    4.3 Limitation on Grants and Exercises

    (a) Compliance with Securities Laws. All grants of Options under this Plan will comply with Section 2.25 of National Instrument 45-106 - Prospectus Exemptions ("NI 45-106") as if the Corporation were an "unlisted reporting issuer".

    (b) To any one person. The number of Common Shares reserved for issuance to any one person in any 12 month period under this Plan and any Other Share Compensation Arrangement shall not exceed 5% of the outstanding Common Shares at the time of the grant, unless the Corporation has obtained Disinterested Shareholder Approval to exceed such limit as required by Section 2.25(3) of NI 45-106.

    (c) To Consultants. The number of Common Shares reserved for issuance to any one Consultant in any 12 month period under this Plan and any Other Share Compensation Arrangement shall not exceed 2% of the outstanding Common Shares at the time of the grant.

    (d) To persons conducting Investor Relations Activities. The aggregate number of Common Shares reserved for issuance to all Eligible Persons conducting Investor Relations Activities in any 12 month period under this Plan and any Other Share Compensation Arrangement shall not exceed 2% of the outstanding Common Shares at the time of the grant.

    

    
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    (e) To Insiders. Unless the Corporation has received Disinterested Shareholder Approval to do so:

    (i) the aggregate number of Common Shares reserved for issuance to Insiders under this Plan and any Other Share Compensation Arrangement shall not exceed 10% of the outstanding Common Shares at the time of the grant;

    (ii) the aggregate number of Common Shares reserved for issuance to Insiders in any

    12 month period under this Plan and any Other Share Compensation Arrangement shall not exceed 10% of the outstanding Common Shares at the time of the grant.

    (f) Exercises. Unless the Corporation has received Disinterested Shareholder Approval to  do so, the number of Common Shares issued to any Eligible Person within a 12 month period pursuant to the exercise of Options granted under this Plan and any Other Share Compensation Arrangement shall not exceed 5% of the outstanding Common Shares at the time of the exercise.

    ARTICLE 5 
OPTION TERMS

    5.1 Exercise Price

    (a) The Corporation must not grant Options with an exercise price lower than the greater of the closing market prices of the underlying securities on: (a) the trading day prior to the date of grant of the Options; and (b) the date of grant of the Options.

    (b) If an Option is granted by the Corporation after its initial listing or after it has been recalled for trading following a suspension or halt, the Corporation must wait until a satisfactory market has been established before setting the exercise price for and granting the option, being at least ten trading days since the date of listing or the day on which trading in the Company's securities resumes, as the case may be.

    (c) If Options are granted within ninety days of a distribution by the Corporation by prospectus, then the exercise price per Common Share for such Option shall not be less than the greater of the minimum exercise price calculated pursuant to subsection 5.1(a) herein and the price per Common Share paid by the public investors for Common Shares acquired pursuant to such distribution. Such ninety-day period shall begin:

    (i) on the date the final receipt is issued for the final prospectus in respect of such distribution;

    (ii) in the case of an IPO, on the date of listing; and

    (iii) in the case of a prospectus that qualifies special warrants, on the closing date of the private placement in respect of such special warrants.

    5.2 Expiry Date

    (a) Every Option shall have a term not exceeding and shall therefore expire no later than 10 years after the date of grant, subject to extension where the Expiry Date falls within a blackout period as detailed in Section 5.2(b) below.

    

    
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    (b) The Expiry Date of an Option shall automatic extend if such Expiry Date falls within a period (a "blackout period") during which an the Corporation prohibits Optionees from exercising their Options to the extent that:

    (i) the blackout period is formally imposed by the Corporation pursuant to its internal trading policies as a result of the bona fide existence of undisclosed Material Information. For greater certainty, in the absence of the Corporation formally imposing a blackout period, the Expiry Date of any Options will not be automatically extended in any circumstances;

    (ii) the blackout period must expire upon the general disclosure of the undisclosed Material Information. The Expiry Date of the affected Options can be extended  to no later than ten (10) business days after the expiry of the blackout period; and

    (i) the automatic extension of an Optionee's Options will not be permitted where the Optionee or the Corporation is subject to a cease trade order (or similar order under securities laws) in respect of the Corporation's securities.

    5.3 Vesting

    (a) Subject to the subsection (b) herein and otherwise in compliance with the policies of the Exchange, the Board shall determine the manner in which an Option shall vest and become exercisable.

    (b) Options granted to Eligible Persons performing Investor Relations Activities shall vest over a minimum of 12 months with no more than 1/4 of such Options vesting in any 3- month period.

    5.4 Non-Assignability

    Options may not be assigned or transferred.

    5.5 Ceasing to be Eligible Person

    (a) If a Participant who is an Officer, Employee or Consultant is terminated for cause, each Option held by such Participant shall terminate and shall therefore cease to be exercisable upon such termination for cause.

    (b) If a Participant dies prior to otherwise ceasing to be an Eligible Person, each Option held by such Participant shall terminate and shall therefore cease to be exercisable no later than the earlier of the Expiry Date and the date which is six months after the date of the Participant's death, always provided that the Board may, in its discretion, extend the date of such termination and the resulting period in which such Option remains exercisable to a date not exceeding the earlier of the Expiry Date and the date which is twelve months after the date of the Participant's death.

    (c) If a Participant ceases to be an Eligible Person other than in the circumstances set out in subsection (a) or (b) herein, each Option held by such Participant shall terminate and shall therefore cease to be exercisable no later than the earlier of the Expiry Date and the date which is 30 days after such event, always provided that the Board may, in its discretion, extend the date of such termination and the resulting period in which such Option remains exercisable to a date not exceeding the earlier of the Expiry Date and the date which is twelve months after such event, and further provided that the Board may, in its discretion, on a case-by-case basis and only with the approval of the Exchange, further extend the date of such termination and the resulting period in which such Option remains exercisable to a date exceeding the date which is after twelve months of such event.

    

    
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    (d) For greater certainty, if a Participant dies, each Option held by such Participant shall be exercisable by the legal representative of such Participant until such Option terminates and therefore ceases to be exercisable pursuant to the terms of Section 5.5(b).

    (e) If any portion of an Option is not vested at the time a Participant ceases, for any reason whatsoever, to be an Eligible Person, such unvested portion of the Option may not be thereafter exercised by the Participant or its legal representative, as the case may be, always provided that the Board may, in its discretion further and subject to the approval of the Exchange where the vesting of the said Participant's options was a requirement of the Exchange's policies, thereafter permit the Participant or its legal representative, as the case may be, to exercise all or any part of such unvested portion of the Option that would have vested prior to the time such Option otherwise terminates and therefore ceases to be exercisable pursuant to the terms of this Section. For greater certainty, and without limitation, this provision will apply regardless of whether the Participant ceased to be an Eligible Person voluntarily or involuntarily, was dismissed with or without cause, and regardless of whether the Participant received compensation in respect of dismissal or was entitled to a notice of termination for a period which would otherwise have permitted a greater portion of an Option to vest.

    ARTICLE 6 
EXERCISE PROCEDURE

    6.1 Exercise Procedure

    An Option may be exercised from time to time, and shall be deemed to be validly exercised by the Participant only upon the Participant's delivery to the Corporation at its registered office:

    (a) a written notice of exercise, in the form hereto attached as Schedule "B", addressed to the Corporate Secretary of the Corporation, specifying the number of Common Shares with respect to which the Option is being exercised;

    (b) the originally signed Option Agreement with respect to the Option being exercised;

    (c) a certified cheque or bank draft made payable to the Corporation for the aggregate exercise price for the number of Common Shares with respect to which the Option is being exercised;

    (d) documents containing such representations, warranties, agreements and undertakings, including such as to the Participant's future dealings in such Common Shares, as counsel to the Corporation reasonably determines to be necessary or advisable in order to comply with or safeguard against the violation of the laws of any jurisdiction; and

    (e) if the Participant is performing Investor Relations Activities for the Corporation, the Optionee must either: (i) deposit the Common Shares on exercise of an Option to a designated brokerage account as directed by the Board through which the Optionee conducts all trades in the Common Shares of the Corporation; or (ii) file insider trade reports with the Board when each trade is made with Common Shares in respect of exercised Options,

    

    
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    and on the business day following, the Participant shall be deemed to be a holder of record of the Common Shares with respect to which the Option is being exercised, and thereafter the Corporation shall, within a reasonable amount of time, cause certificates for such Common Shares to be issued and delivered to the Participant.

    ARTICLE 7 
AMENDMENT OF OPTIONS

    7.1 Consent to Amend

    The Board may amend any Option with the consent of the affected Participant and the Exchange, including any shareholder approval required by the Exchange. For greater certainty, Disinterested Shareholder Approval is required for any reduction in the exercise price of an Option if the Participant is an Insider at the time of the proposed amendment.

    7.2 Amendment Subject to Approval

    If the amendment of an Option requires regulatory or shareholder approval, such amendment may be made prior to such approvals being given, but no such amended Options may be exercised unless and until such approvals are given.

    ARTICLE 8 
MISCELLANEOUS

    8.1 No Rights as Shareholder

    Nothing in this Plan or any Option shall confer upon a Participant any rights as a shareholder of the Corporation with respect to any of the Common Shares underlying an Option unless and until such Participant shall have become the holder of such Common Shares upon exercise of such Option in accordance with the terms of the Plan.

    8.2 No Right to Employment

    Nothing in this Plan or any Option shall confer upon a Participant any right to continue in the employ of the Corporation or any Affiliate or affect in any way the right of the Corporation or any Affiliate to terminate the Participant's employment, with or without cause, at any time; nor shall anything in the Plan or any Option be deemed or construed to constitute an agreement, or an expression of intent, on the part of the Corporation or any Affiliate to extend the employment of any Participant beyond the time which the Participant would normally be retired pursuant to the provisions of any present or future retirement plan of the Corporation or any Affiliate, or beyond the time at which he would otherwise be retired pursuant to the provisions of any contract of employment with the Corporation or any Affiliate.

    8.3 Governing Law

    This Plan, all Option Agreements, the grant and exercise of Options hereunder, and the sale, issue and delivery of Common Shares hereunder upon exercise of Options shall be, as applicable, governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of  Canada applicable therein. The Courts of the Province of British Columbia shall have the exclusive jurisdiction to hear and decide any disputes or other matters arising herefrom.

    

    
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    8.4 Approval

    Approved by the Board of the Corporation on February 23, 2018.

    

    SCHEDULE "A"

    FORM OF STOCK OPTION PLAN OPTION AGREEMENT

    This Option Agreement is entered into between C21 Investments Inc. (the "Corporation") and the Optionee named below pursuant to the 2018 Stock Option Plan (the "Plan"), a copy of which is attached hereto, and confirms that:

    1.                                                                      (the "Grant Date");

    2.                                                                       (the "Optionee");

    3. was  granted  the  option  (the  "Option") to purchase                                                             common shares (the "Common Shares") of the Corporation;

    4. for the price (the "Option Price") of $                          per Common Share;

    5. which shall be exercisable ("Vested") in whole or in part in the following amounts on or after the following dates:

    (a)                          % on the Grant Date; and

    (b)                           % every                     months thereafter;

    6. terminating on                                                                      (the "Expiry Date"),

    all on the terms and subject to the conditions set out in the Plan. For greater certainty, once Common Shares have become Vested, the shares continue to be exercisable until the termination or cancellation thereof as provided in this Option Agreement and the Plan.

    The undersigned Optionee represents and warrants that he/she is engaged to provide on, an ongoing bona fide basis, consulting, technical, management or other services to the Corporation or to an Affiliate of the Corporation.

    By signing this Option Agreement, the Optionee acknowledges that the Optionee has read and understandings the Plan and agrees to the terms and conditions of the Plan and this Option Agreement.

    [REMAINDER INTENTIONALLY LEFT BLANK]

    

    
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    IN WITNESS WHEREOF the parties hereto have executed this Option Agreement as of the          day of

                                               , 20        .

    	 	
                C21 INVESTMENTS INC.

            
	 	
                 

                Per:                                                                                                

            
	 	
                Name:

            
	 	
                Title:

            

    

    
        	
                    SIGNED, SEALED, AND DELIVERED

                	
                    )

                	
                    OPTIONEE

                
	
                    in the presence of

                	
                    )

                	
                     

                
	
                     

                	
                    )

                	
                     

                
	
                     

                	
                    )

                	
                     

                
	
                     

                	
                    )

                	
                     

                
	
                     

                	
                    )

                	
                     

                
	
                    Witness

                	
                    «Name»

                
	
                    )

                

    

    

    

    SCHEDULE "B" 
NOTICE OF EXERCISE

    To Exercise the Option, Complete and Return this Form

    The undersigned Optionee (or his or her legal representative(s) permitted under the Stock Option Plan of C21 Investments Inc. (the "Corporation") (as the same may be supplemented and amended from time to time) (the "Plan") hereby irrevocably elects to exercise the Option for the number of Shares as set forth below:

    
        	
                    (a) Number of Options to be Exercised:

                	
                     

                
	
                     

                    (b) Option Exercise Price per Share:

                	
                     

                    $

                
	
                     

                    Aggregate Purchase Price [ (a) multiplied by (b) ]:

                	
                     

                    $

                

    

    and hereby tenders a certified cheque or bank draft for such aggregate Exercise Price, and directs such Shares to be issued and registered in the name of the undersigned and that a Common Share certificate therefor be issued as directed in the Plan, all subject to and in accordance with the Plan. Unless otherwise defined herein, any capitalized terms used herein shall have the meaning ascribed to such terms in the Plan.

    DATED:                          , 20    

    
        	
                    SIGNED, SEALED, AND DELIVERED

                	
                    )

                	
                    OPTIONEE

                
	
                    in the presence of

                	
                    )

                	
                     

                
	
                     

                	
                    )

                	
                     

                
	
                     

                	
                    )

                	
                     

                
	
                     

                	
                    )

                	
                     

                
	
                     

                	
                    )

                	
                     

                
	
                    Witness

                	
                    «Name»

                
	
                    )C21 Investments Inc.: Exhibit 4.2 - Filed by newsfilecorp.com

    

    C21 INVESTMENTS INC. 
RESTRICTED SHARE UNIT PLAN

    ARTICLE 1 
DEFINITIONS AND INTERPRETATION

    1.1 Definitions: For purposes of this Restricted Share Unit Plan, unless such word or term is otherwise defined herein or the context in which such word or term is used herein otherwise requires, the following words and terms with the initial letter or letters thereof capitalized shall have the following meanings:

    (a) "Act" means the Business Corporations Act (British Columbia) or its successor, as amended from time to time;

    (b) "Affiliate" means any corporation that is an Affiliated Entity of the Company;

    (c) "Affiliated Entity" means with respect to the Company, a person or company that controls or is controlled by the Company or that is controlled by the same person or company that controls the Company. A company shall be deemed to be controlled by another person or company or by two or more companies if,

    (i) voting securities of the first-mentioned company carrying more than 50 per cent of the votes for the election of directors are held, otherwise than by way of security only, by or for the benefit of the other person or company or by or for the benefit of the other companies; and

    (ii) the votes carried by such securities are entitled, if exercised, to elect a majority of the board of directors of the first-mentioned company.

    (d) "Associate" where used to indicate a relationship with any person or company, is as defined in the Securities Act (British Columbia), as may be amended from time to time;

    (e) "Board" means the board of directors of the Company from time to time;

    (f) "Change of Control" means the occurrence of any one or more of the following events:

    (i) a consolidation, merger, amalgamation, arrangement or other reorganization or acquisition involving the Company or any of its Affiliates and another corporation or other entity, as a result of which the holders of Common Shares immediately prior to the completion of the transaction hold less than 50% of the outstanding shares of the successor corporation after completion of the transaction;

    (ii) the sale, lease, exchange or other disposition, in a single transaction or a series of related transactions, of assets, rights or properties of the Company and/or any of its Subsidiaries which have an aggregate book value greater than 30% of the book value of the assets, rights and properties of the Company and its Subsidiaries on a consolidated basis to any other person or entity, other than a disposition to a wholly-owned Subsidiary of the Company in the course of a reorganization of the assets of the Company and its Subsidiaries;

    

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

    (iv) any person, entity or group of persons or entities acting jointly or in concert (an "Acquiror") acquires or acquires control (including, without limitation, the right to vote or direct the voting) of Voting Securities of the Company which, when added to the Voting Securities owned of record or beneficially by the Acquiror or which the Acquiror has the right to vote or in respect of which the Acquiror has the right to direct the voting, would entitle the Acquiror and/or Associates and/or affiliates of the Acquiror (as such terms are defined in the Act) to cast or to direct the casting of 20% or more of the votes attached to all of the Company's outstanding Voting Securities which may be cast to elect directors of the Company or the successor corporation (regardless of whether a meeting has been called to elect directors);

    (v) as a result of or in connection with: (A) a contested election of directors, or; (B) a consolidation, merger, amalgamation, arrangement or other reorganization or acquisitions involving the Company or any of its affiliates and another corporation or other entity, the nominees named in the most recent management information circular of the Company for election to the Board (or replacements designated by such nominees) shall not constitute a majority of the Board; or

    (vi) the Board adopts a resolution to the effect that a Change of Control as defined herein has occurred or is imminent.

    (g) "Committee" means the Board or if the Board so determines in accordance with Section 2.3 of this Restricted Share Unit Plan, the committee of the Board authorized to administer this Restricted Share Unit Plan, which may include any compensation committee of the Board;

    (h) "Common Shares" means the common shares of the Company to be issued from treasury, as adjusted in accordance with the provisions of Article 5 of this Restricted Share Unit Plan;

    (i) "Company" means C21 Investments Inc., a corporation existing under the Act;

    (j) "Deferred Payment Date" for a Participant means the date after the Restricted Period, which is the earlier of (i) the date which the Participant has elected to defer receipt of Restricted Shares in accordance with Section 3.5 of this Restricted Share Unit Plan; and (ii) the Participant's Retirement Date;

    
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    (k) "Designated Affiliate" means the subsidiaries of the Company designated by the Committee from time to time for the purposes of this Restricted Share Unit Plan;

    (l) "Eligible Contractors" means individuals, other than Eligible Employees that (i) are engaged to provide, on a bona fide basis, consulting, technical, management or other services (other than services provided in relation to a distribution of securities) to the Company or any Designated Affiliates under a written contract between the Company or the Designated Affiliate and the individual or a company of which the individual consultant is an employee; and (ii) in the reasonable opinion of the Committee, spend or will spend a significant amount of time and attention on the affairs and business of the Company or a Designated Affiliate;

    (m) "Eligible Employees" means full-time and part-time employees, including officers, whether directors or not, of the Company or any Designated Affiliate;

    (n) "Insider" shall have the meaning ascribed thereto in the Securities Act (British Columbia), other than a person who is an Insider solely by virtue of being a director or senior officer of a Subsidiary of the Company and any Associate of an Insider;

    (o) "Market Value" means the average closing price of the Common Shares on the Stock Exchange on the five trading days immediately prior to the date as of which Market Value is determined. If the Common Shares are not trading on the Stock Exchange, then the Market Value shall be determined based on the trading price on such stock exchange or over-the- counter market on which the Common Shares are listed and posted for trading as may be selected for such purpose by the Committee on the date as of which Market Value is determined. In the event that the Common Shares are not listed and posted for trading on any stock exchange or over-the- counter market, the Market Value shall be the fair market value of such Common Shares as determined by the Committee in its sole discretion;

    (p) "Participant" means each Eligible Contractor, and Eligible Employee to whom Restricted Share Units are granted;

    (q) "Restricted Period" means any period of time during which a Restricted Share Unit is not vested and the Participant holding such Restricted Share Unit remains ineligible to receive Restricted Shares, as determined by the Committee in its absolute discretion; however, such period of time may be reduced or eliminated from time to time and at any time and for any reason as determined by the Committee, including, but not limited to, circumstances involving death or disability of a Participant;

    (r) "Restricted Share Unit Grant Letter" has the meaning ascribed thereto in Section

    3.3 of this Restricted Share Unit Plan;

    (s) "Restricted Share Unit Plan" means this restricted share unit plan, as further described in Article 3 hereof;

    
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    (t) "Restricted Share Units" has the meaning ascribed thereto in Section 3.2 of this Restricted Share Unit Plan;

    (u) "Restricted Shares" means the Common Shares issuable in satisfaction of Restricted Share Units;

    (v) "Retirement" in respect of a Participant means the Participant ceasing to hold any employment (including any directorships) with the Company or any Designated Affiliate after attaining a stipulated age in accordance with the Company's normal retirement policy, or earlier with the Company's consent;

    (w) "Retirement Date" means the date that a Participant ceases to hold any employment (including any directorships) with the Company or any Designated Affiliate pursuant to such Participant's Retirement or Termination;

    (x) "Stock Exchange" means, the Canadian Securities Exchange;

    (y) "Subsidiary" means a corporation which is a subsidiary of the Company as defined under the Act;

    (z) "Termination" means: (i) in the case of an Eligible Employee, the termination of the employment of the Eligible Employee with or without cause by the Company or a Designated Affiliate or cessation of employment of the Eligible Employee with the Company or a Designated Affiliate as a result of resignation or otherwise, other than the Retirement of the Eligible Employee; and (ii) in the case of an Eligible Contractor, the termination of the services of the Eligible Contractor by the Company or a Designated Affiliate; and

    (aa)  "Voting Securities" means Common Shares and/or any other securities (other than debt securities) that carry a voting right either under all circumstances or under some circumstances that have occurred and are continuing.

    1.2 Headings: The headings of all articles, Sections, and paragraphs in this Restricted Share Unit Plan are inserted for convenience of reference only and shall not affect the construction or interpretation of this Restricted Share Unit Plan.

    1.3 Context, Construction: Whenever the singular or masculine are used in this Restricted Share Unit Plan, the same shall be construed as being the plural or feminine or neuter or vice versa where the context so requires.

    1.4 References to this Restricted Share Unit Plan: The words "hereto", "herein", "hereby", "hereunder", "hereof" and similar expressions mean or refer to this Restricted Share Unit Plan as a whole and not to any particular article, Section, paragraph or other part hereof.

    1.5 Canadian Funds: Unless otherwise specifically provided, all references to dollar amounts in this Restricted Share Unit Plan are references to lawful money of Canada.

    
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    ARTICLE 2

    PURPOSE AND ADMINISTRATION OF THE RESTRICTED SHARE PLAN

    2.1 Purpose of the Restricted Share Unit Plan: This Restricted Share Unit Plan provides for the acquisition of Common Shares by Participants for the purpose of advancing the interests of the Company through the motivation, attraction and retention of employees and consultants of the Company and its Designated Affiliates, and to secure for the Company and the shareholders of the Company the benefits inherent in the ownership of Common Shares by key employees and consultants of the Company and its Designated Affiliates, it being generally recognized that restricted share unit plans aid in attracting, retaining and encouraging employees and consultants by offering them the opportunity to acquire a proprietary interest in the Company.

    2.2 Administration of the Restricted Share Unit Plan: This Restricted Share Unit Plan shall be administered by the Committee and the Committee shall have full authority to administer this Restricted Share Unit Plan, including the authority to interpret and construe any provision of this Restricted Share Unit Plan and to adopt, amend and rescind such rules and regulations for administering this Restricted Share Unit Plan as the Committee may deem necessary in order to comply with the requirements of this Restricted Share Unit Plan. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and conclusive and shall be binding on the Participants and the Company. No member of the Committee shall be personally liable for any action taken or determination or interpretation made in good faith in connection with this Restricted Share Unit Plan and all members of the Committee shall, in addition to their rights as directors of the Company, be fully protected, indemnified and held harmless by the Company with respect to any such action taken or determination or interpretation made. The appropriate officers of the Company are hereby authorized and empowered to do all things and execute and deliver all instruments, undertakings and applications and writings as they, in their absolute discretion, consider necessary for the implementation of this Restricted Share Unit Plan and of the rules and regulations established for administering this Restricted Share Unit Plan. All costs incurred in connection with this Restricted Share Unit Plan shall be for the account of the Company.

    2.3 Delegation to Committee: All of the powers exercisable hereunder by the Board may, to the extent permitted by applicable law and as determined by resolution of the Board, be exercised by a committee of the Board comprised of not less than three directors, including any compensation committee of the Board.

    2.4 Record Keeping: The Company shall maintain a register in which shall be recorded:

    (a) the name and address of each Participant in this Restricted Share Unit Plan;

    (b) the number of Restricted Share Units granted to each Participant under this Restricted Share Unit Plan;

    (c) the number of Restricted Shares issued to each Participant under this Restricted Share Unit Plan;

    
        - 5 -

    

    

    (d) the date on which the Restricted Share Units were granted and Restricted Shares were issued to each Participant; and

    (e) the date of expiry of the Restricted Period or the Deferred Payment Date, as applicable.

    2.5 Determination of Participants and Participation: The Committee shall from time to time determine the Participants who may participate in this Restricted Share Unit Plan. The Committee shall from time to time determine the Participants to whom Restricted Share Units shall be granted and the provisions and restrictions with respect to such grant(s), all such determinations to be made in accordance with the terms and conditions of this Restricted Share Unit Plan, and the Committee may take into consideration the present and potential contributions of and the services rendered by the particular Participant to the success of the Company and any other factors which the Committee deems appropriate and relevant.

    2.6 Maximum Number of Shares: The maximum number of Common Shares made available for this Restricted Share Unit Plan shall be 750,000 Common Shares, subject to adjustments pursuant to Section 5.6. The aggregate number of Common Shares issuable to Insiders pursuant to Restricted Share Units and all other security based compensation arrangements, at any time, shall not exceed 10% of the total number of Common Shares then outstanding. The aggregate number of Common Shares issued to Insiders pursuant to Restricted Share Units and all other security based compensation arrangements, within a one year period, shall not exceed 10% of the total number of Common Shares then outstanding. The aggregate number of Common Shares reserved for issuance upon the exercise of Restricted Share Units to any one person or entity within any one year period under all security based compensation arrangements shall not exceed 5% of the total number of Common Shares then outstanding. For purposes of this Section 2.6, the number of Common Shares then outstanding shall mean the number of Common Shares outstanding on a non-diluted basis immediately prior to the proposed grant of the applicable Restricted Share Units.

    ARTICLE 3 
RESTRICTED SHARE PLAN

    3.1 Restricted Share Unit Plan: A Restricted Share Unit Plan is hereby established for Eligible Employees and Eligible Contractors.

    3.2 Participants: The Committee shall have the right to grant, in its sole and absolute discretion, to any Participant rights ("Restricted Share Units") to acquire from the Company any number of fully paid and non-assessable Common Shares as a discretionary payment in consideration of past services to the Company or as an incentive for future services, subject to this Restricted Share Unit Plan and with such provisions and restrictions as the Committee may determine. Each Restricted Share Unit entitles the holder to receive one Common Share, without payment of additional consideration, at the end of the Restricted Period or, if applicable, at a later Deferred Payment Date, if any, in satisfaction of the holder's entitlement under the Restricted Share Unit, without any further action on the part of the holder of the Restricted Share Unit in accordance with this Article 3.

    
        - 6 -

    

    

    3.3 Restricted Share Unit Grant Letter: Each grant of a Restricted Share Unit under this Restricted Share Unit Plan shall be evidenced by a Restricted Share Unit grant letter (a "Restricted Share Unit Grant Letter") issued to the Participant by the Company in consideration for past and/or future services. Such Restricted Share Unit Grant Letter shall be subject to all applicable terms and conditions of this Restricted Share Unit Plan and may be subject to any other terms and conditions (including without limitation any recoupment, reimbursement or claw-back compensation policy as may be adopted by the Board from time to time) which are not inconsistent with this Restricted Share Unit Plan and which the Committee deems appropriate for inclusion in a Restricted Share Unit Grant Letter. The provisions of Restricted Share Unit Grant Letters issued under this Restricted Share Unit Plan need not be identical.

    3.4 Restricted Period: In connection with the grant of Restricted Share Units to a Participant, the Committee shall determine the Restricted Period applicable to such Restricted Share Units. In addition, at the sole discretion of the Committee, at the time of grant, the Restricted Share Units may be subject to performance conditions to be achieved by the Company, a class of Participants or by a particular Participant on an individual basis, within a Restricted Period, for such Restricted Share Units to entitle the holder thereof to receive the underlying Restricted Shares. Upon the expiry of the applicable Restricted Period (or on the Deferred Payment Date, as applicable), a Restricted Share Unit shall be automatically settled and the underlying Restricted Share shall be issued to the holder of such Restricted Share Unit, which Restricted Share Unit shall then be cancelled. Any Restricted Share Unit which has been granted under the Restricted Share Unit Plan and which has been settled and cancelled in accordance with the terms of the Restricted Share Unit Plan will again be available under the Restricted Share Unit Plan.

    3.5 Deferred Payment Date: Participants who are (i) Eligible Employees; (ii) residents of Canada for the purposes of the Income Tax Act (Canada); and (iii) not subject to the provisions of the Internal Revenue Code may elect to defer to receive all or any part of their Restricted Shares until one or more Deferred Payment Dates. Any other Participants may not elect a Deferred Payment Date.

    3.6 Prior Notice of Deferred Payment Date: Participants who elect to set a Deferred Payment Date must give the Company written notice of the Deferred Payment Date(s) not later than 60 days prior to the expiration of the Restricted Period. For certainty, Participants shall not be permitted to give any such notice after the day which is 60 days prior to the expiration of the Restricted Period and a notice once given may not be changed or revoked.

    3.7 Retirement or Termination during Restricted Period: In the event of the Retirement or Termination of a Participant during the Restricted Period, any Restricted Share Units held by the Participant shall immediately terminate and be of no further force or effect, provided that the Committee has the absolute discretion to waive such termination. Any Restricted Share Unit which has been granted under the Restricted Share Unit Plan and which has been terminated in accordance with the terms of the Restricted Share Unit Plan will again be available under the Restricted Share Unit Plan.

    
        - 7 -

    

    

    3.8 Retirement or Termination after Restricted Period: In the event of the Retirement or Termination of the Participant following the Restricted Period and prior to a Deferred Payment Date, the Participant shall be entitled to receive and the Company shall issue forthwith Restricted Shares in satisfaction of the Restricted Share Units then held by the Participant. Any Restricted Share Unit which has been granted under the Restricted Share Unit Plan and which has been settled in accordance with the terms of the Restricted Share Unit Plan will again be available under the Restricted Share Unit Plan.

    3.9 Payment of Dividends: Subject to the absolute discretion of the Committee, in the event that a dividend (other than share dividend) is declared and paid by the Company on the Common Shares, a Participant may be credited with additional Restricted Share Units. The number of such additional Restricted Share Units, if any, will be calculated by dividing (a) the total amount of the dividends that would have been paid to the Participant if the Restricted Shares issuable upon the settlement of Restricted Share Units had been outstanding Common Shares (and the Participant held no other Common Shares) on the dividend record date, by (b) the Market Value on the date on which such dividends were paid.

    3.10 Death or Disability of Participant: In the event of the total disability or death of a Participant, any Restricted Share Units held by the Participant shall vest immediately and the Company shall issue Restricted Shares to the Participant or legal personal representatives of the Participant forthwith in full satisfaction thereof.

    3.11 Change of Control: In the event of a Change of Control, all Restricted Share Units outstanding shall vest immediately prior to the Change of Control and be forthwith settled by issuance of Restricted Shares notwithstanding the Restricted Period and any applicable Deferred Payment Date.

    3.12 Necessary Approvals: This Restricted Share Unit Plan shall be subject to the approval of the shareholders of the Company to be given by a resolution passed at a meeting of the shareholders of the Company or by a written resolution of all of the shareholders of the Company in accordance with the Act and acceptance by the Stock Exchange or any regulatory authority having jurisdiction over the securities of the Company.

    3.13 Optional Exercise Price: Notwithstanding anything else herein, the Committee may determine an exercise price for the Restricted Share Units whereby such price must be paid by a Participant to receive its Restricted Share Units.

    ARTICLE 4 
WITHHOLDING TAXES

    4.1  Withholding Taxes: The Company or any Designated Affiliate may take such steps as are considered necessary or appropriate for the withholding of any taxes or other amounts which the Company or any Designated Affiliate is required by any law or regulation of any governmental authority whatsoever to withhold in connection with any Restricted Share Unit, Common Share, including, without limiting the generality of the foregoing, the withholding of all or any portion of any payment or the withholding of the issue of Common Shares to be issued under this Restricted Share Unit Plan, until such time as the Participant has paid the Company or any Designated Affiliate for any amount which the Company or Designated Affiliate is required to withhold by law with respect to such taxes or other amounts. Without limitation to the foregoing, the Committee may adopt administrative rules under the Plan, which provide for the automatic sale of Restricted Shares (or a portion thereof) in the market upon the issuance of such shares under this Restricted Share Unit Plan on behalf of the Participant to satisfy withholding obligations under the Plan.

    
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    ARTICLE 5 
GENERAL

    5.1 Term of the Restricted Share Unit Plan: This Restricted Share Unit Plan shall become effective on the date on which it is approved by the shareholders of the Company and shall remain in effect until it is terminated by the Board.

    5.2 Amendment of the Restricted Share Unit Plan: The Committee may from time to time in the absolute discretion of the Committee (without shareholder approval) amend, modify and change the provisions of this Restricted Share Unit Plan, including, without limitation:

    (a) amendments of a house keeping nature; and

    (b) the change to the Restricted Period of any Restricted Share Unit.

    (c) However, other than as set out above, any amendment, modification or change to the provisions of this Restricted Share Unit Plan which would:

    (d) materially increase the benefits of the holder under this Restricted Share Unit Plan to the detriment of the Company and its shareholders;

    (e) increase the number of Common Shares or maximum percentage of Common Shares, other than by virtue of Sections 5.6 and 5.8 of this Restricted Share Unit Plan, which may be issued pursuant to this Restricted Share Unit Plan;

    (f) reduce the range of amendments requiring shareholder approval contemplated in this Section 5.2;

    (g) change the insider participation limits which would result in shareholder approval to be required on a disinterested basis;

    (h) permit Restricted Share Units to be transferred other than for normal estate settlement purposes; or

    (i) materially modify the requirements as to eligibility for participation in this Restricted Share Unit Plan;

    
        - 9 -

    

    

    shall only be effective upon such amendment, modification or change being approved by the shareholders of the Company. In addition, any such amendment, modification or change of any provision of this Restricted Share Unit Plan shall be subject to the approval, if required, by any regulatory authority having jurisdiction over the securities of the Company.

    5.3 Non-Assignable: Except as otherwise may be expressly provided for under this Restricted Share Unit Plan or pursuant to a will or by the laws of descent and distribution, no Restricted Share Unit and no other right or interest of a Participant is assignable or transferable.

    5.4 Rights as a Shareholder: No holder of any Restricted Share Units shall have any rights as a shareholder of the Company by virtue of holding Restricted Share Units. Except as provided for in Section 3.9 and subject to Section 5.6, no holder of any Restricted Share Units shall be entitled to receive, and no adjustment shall be made for, any dividends, distributions or any other rights declared for shareholders of the Company.

    5.5 No Contract of Employment: Nothing contained in this Restricted Share Unit Plan shall confer or be deemed to confer upon any Participant the right to continue in the employment of, or to provide services to, the Company or any Designated Affiliate nor interfere or be deemed to interfere in any way with any right of the Company or any Designated Affiliate to discharge any Participant at any time for any reason whatsoever, with or without cause. Participation in this Restricted Share Unit Plan by a Participant shall be voluntary. Notwithstanding the foregoing, unless a Participant otherwise informs the Company in writing, each Participant agrees to be bound by the terms of this Restricted Share Unit Plan and any applicable Restricted Share Unit Grant Letter with respect to Restricted Share Units granted to such Participant.

    5.6 Adjustment in Number of Shares Subject to the Restricted Share Unit Plan: In the event there is any change in the Common Shares, whether by reason of a share dividend, consolidation, subdivision, reclassification or otherwise, an appropriate adjustment shall be made by the Committee in:

    (a) the number of Common Shares available under this Restricted Share Unit Plan; and

    (b) the number of Common Shares subject to any Restricted Share Units.

    If the foregoing adjustment shall result in a fractional Common Share, the fraction shall be disregarded. All such adjustments shall be conclusive, final and binding for all purposes of this Restricted Share Unit Plan.

    5.7 No Representation or Warranty: The Company makes no representation or warranty as to the future market value of any Common Shares issued in accordance with the provisions of this Restricted Share Unit Plan.

    5.8 Compliance with Applicable Law: If any provision of this Restricted Share Unit Plan or any Restricted Share Unit contravenes any law or any order, policy, by-law or regulation of any regulatory body having jurisdiction, then such provision shall be deemed to be amended to the extent necessary to bring such provision into compliance therewith.

    
        - 10 -

    

    

    5.9 Interpretation: This Restricted Share Unit Plan shall be governed by and construed in accordance with the laws of the Province of Ontario.

    5.10 Effective Date: This Restricted Share Unit Plan is effective as of July 17, 2018.

    
         

    

    
        - 11 -

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