Document:

Blueprint

  Exhibit 4(d)

 

LIVEREEL MEDIA CORPORATION

2017 STOCK OPTION PLAN

 

November 22,
2017

 

 

1.

PURPOSE

 

LiveReel Media
Corporation (the “Company”) is committed to
providing appropriate incentives to Eligible Persons to acquire a
proprietary interest in the Company in order to continue their
participation in the affairs of the Company and to increase their
efforts on behalf of the Company. The purpose of this 2017 Stock
Option Plan is to advance the interests of the Company by: (a)
providing Eligible Persons with additional incentive; (b)
encouraging share ownership by such Eligible Persons; (c)
increasing the proprietary interest of Eligible Persons in the
success of the Company; (d) encouraging Eligible Persons to remain
with the Company or its Subsidiaries; and (e) attracting new
employees, directors and officers.

 

2.

INTERPRETATION

 

2.1

Definitions.
In this Plan, the following words have the following
meanings:

 

(a)

“1933 Act” means the Securities Act
of 1933 of the United States of America, as amended;

 

(b)

“acting jointly or in concert”
means the determination of whether a person or group of persons is
acting jointly or in concert shall be determined in accordance with
the Ontario Securities Act;

 

(c)

“Affiliate” means any corporation that is an
Affiliate of the Company within the meaning set forth in Exchange
Policy;

 

(d)

“Applicable Securities Laws” means
the Ontario Securities Act and the equivalent legislation in the
other provinces and in the territories of Canada, as may be
applicable and as amended from time to time, the rules, regulations
and forms made or promulgated under any such statute and the
published national instruments, multilateral instruments, policies,
bulletins and notices of the securities commissions and similar
regulatory authorities of each of the provinces and territories of
Canada;

 

(e)

“Blackout Period” means a period of
time when, pursuant to any policies of the Company, securities of
the Company may not be traded by certain persons as designated by
the Company, including an Optionee as a result of the existence of
undisclosed Material Information, but excludes any period during
which a regulator has halted trading in the Company’s
securities, and which expires upon the public announcement of such
Material Information;

 

(f)

“Board” means the board of
directors of the Company, and includes any committee of the Board
to which responsibilities with respect to the Plan have been
delegated;

 

(g)

“Business Day” means a day which is
not a Saturday, Sunday or a civic or statutory holiday in Toronto,
Ontario;

 

(h)

“Cashless Exercise Procedure” has
the meaning ascribed thereto in Section 9.3;

 

(i)

“Cashless Exercise Right” means the
right of the Holder to surrender to the Company any exercisable but
unexercised portion of the Option in lieu of the payment required
in an amount equal to the aggregate Exercise Price of the Shares in
respect of any Option being exercised in accordance with Section
9.3;

 

 

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(j)

“Change of Control” means the first
to occur of any of the following events:

 

(i)

any event or series
of related events or transaction or series of related transactions
as a result of which or pursuant to which any person or group of
persons acting jointly or in concert acquires, directly or
indirectly, beneficial ownership of or control or direction over
Voting Shares of the Company (other than pursuant to a treasury
issuance of Voting Shares of the Company), or Voting Shares of the
Company are redeemed or otherwise acquired by the Company or are
cancelled, where, immediately following the occurrence of such
event or series of events or completion of such transaction or
series of transactions, the number of Voting Shares of the Company
beneficially owned, directly or indirectly, or over which control
or direction is exercised by such person or group of persons acting
jointly or in concert totals for the first time Voting Shares of
the Company carrying more than 50% of the votes attaching to all
Voting Shares of the Company outstanding immediately following such
occurrence or completion;

 

(ii)

any event or series
of related events or transaction or series of related transactions
as a result of which or pursuant to which Voting Shares of the
Company are converted into or exercised or exchanged for securities
of another person (the “Resulting Person”) and any person
or group of persons acting jointly or in concert acquires, directly
or indirectly, beneficial ownership of or control or direction over
Voting Shares of such Resulting Person where, immediately following
the occurrence of such event or series of events or completion of
such transaction or series of transactions, the number of Voting
Shares of the Resulting Person beneficially owned, directly or
indirectly, or over which control or direction is exercised by such
person or group of persons acting jointly or in concert totals for
the first time Voting Shares of the Resulting Person carrying more
than 50% of the votes attaching to all Voting Shares of the
Resulting Person outstanding immediately following such occurrence
or completion;

 

(iii)

a change in the
composition of the Board as a result of a contested election of
directors of the Company, with the result that less than 50% of the
directors of the Company elected in such election are comprised of
the individuals who were directors of the Company prior to such
contested election;

 

(iv)

the sale, lease,
exchange or other transfer or disposition, in a single transaction
or a series of related transactions (including by way of the
liquidation, dissolution, winding-up or other distribution by the
Company or any subsidiary of the Company) of assets having a Fair
Market Value equal to 50% or more of the Fair Market Value (as
determined by the Board) of all of the assets of the Company on a
consolidated basis, excluding a transaction or series of related
transactions between the Company or any subsidiary of the Company
or between subsidiaries of the Company; or

 

(v)

the determination
by the Board that a change in legal or effective control of the
Company has occurred or is imminent;

 

(a)

“Code” means the Internal Revenue
Code of 1986, as amended, and all regulations promulgated
thereunder;

 

(b)

“Company” means LiveReel Media
Corporation, a corporation existing under the laws of
Canada;

 

(c)

“Consultant” has the same meaning
as set forth in Exchange Policy provided that such Optionee is also
a “consultant” as defined in NI 45-106;

 

 

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(d)

“Consultant Company” has the same
meaning as set forth in Exchange Policy provided that such Optionee
is also a “consultant” as defined in NI
45-106;

 

(e)

“Director” has the same meaning as
set forth in Exchange Policy provided that such Director is also a
“director” as defined in NI 45-106;

 

(f)

“Discounted Market Price” has the
same meaning as set forth in Exchange Policy;

 

(g)

“Disinterested Shareholder
Approval” means disinterested Shareholder approval, as
may be applicable in the circumstances, as described in Exchange
Policy;

 

(h)

“EDGAR” means the Electronic Data
Gathering, Analysis, and Retrieval system described in the 1933 Act
and available for public view at www.sec.gov;

 

(i)

“Effective Date” for an Option
means the date on which the Option is granted;

 

(j)

“Eligible Person” means, subject to
the Applicable Securities Law and Exchange Policy, any Employee,
Director, Consultant or Management Company Employee who is approved
for participation in the Plan by the Board;

 

(k)

“Employee” has the same meaning as
set forth in Exchange Policy provided that such Employee is also a
“employee” as under Applicable Securities
Laws;

 

(l)

“Exchange” means the stock
exchange(s) upon which the Company’s Shares principally trade
or any successor or assign thereof;

 

(m)

“Exchange Hold Period” means, if
applicable, the four month resale restriction imposed by the
Exchange pursuant to Exchange Policy, or such other resale
restrictions as imposed by any applicable regulators;

 

(n)

“Exchange Policy” means Policy 4.4
– Incentive Stock Options as set forth in the
Exchange’s published Corporate Finance Manual, together with
such other published policies of the Exchange and the bulletins,
notices, appendices and forms related thereto, as from time to time
amended or re-adopted;

 

(o)

“Exercise Form” means the notice of
exercise delivered by an Optionee to the Company upon the exercise
of any Option hereunder in such other form as the Board may approve
for any one or more Optionees or for a group of Optionees, as same
may be amended from time to time;

 

(p)

“Exercise Period” means the period
of time during which an Option granted under the Plan may be
exercised (provided, however, that the Exercise Period may not
exceed ten (10) years from the relevant Effective Date unless
permitted under Section 6.5;

 

(q)

“Exercise Price” means the price
per Share at which Shares may be purchased under an Option, as the
same may be adjusted from time to time in accordance with the terms
hereof;

 

(r)

“Expiry Date” has the meaning
prescribed under Section 6.5 of this Plan;

 

(s)

“Fair Market Value” means the
highest price, expressed in dollars, that the Share would bring in
an open and unrestricted market between a willing buyer and a
willing seller who are both knowledgeable, informed, and prudent,
and who are acting independently of each other and who deal with
each other at arm’s length for purposes of the
ITA;

 

 

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(t)

“Holder” means a holder of an
Option under the Plan;

 

(u)

“Incentive Stock Option” means an
Option intended to qualify as an incentive stock option under
Section 422 of the Code;

 

(v)

“Insider” has the same meaning as
set forth in Exchange Policy;

 

(w)

“IR Activities” has the same
meaning as “Investor
Relations Activities” as set forth in Exchange
Policy;

 

(x)

“ITA” means the Income Tax Act (Canada);

 

(y)

“Merger and Acquisition
Transaction” means (i) any merger; (ii) any
acquisition; (iii) any amalgamation; (iv) any offer for Shares
which if successful would entitle the offeror to acquire more than
50% of all Shares; (v) any arrangement or other scheme of
reorganization; or (vi) any consolidation, that results in a Change
of Control;

 

(z)

“Option” means the right to
purchase Shares granted to an Eligible Person in accordance with
the terms of the Plan;

 

(aa)

“Option Agreement” means the notice
of grant of an Option delivered by the Company hereunder to an
Optionee in such other form as the Board may approve for any one or
more Optionees or for a group of Optionees, as same may be amended
from time to time;

 

(bb)

“Optioned Shares” means Shares
subject to an Option;

 

(cc)

“Optionee” means an Eligible Person
to whom an Option is granted by the Company under the Plan, whether
a Director, Employee, or Consultant;

 

(dd)

“Management Company Employee” has
the same meaning as set forth in Exchange Policy provided that such
Optionee is also a “director” or
“consultant” as defined in NI 45-106;

 

(ee)

“Market Price” has the same meaning
as set forth in Exchange Policy;

 

(ff)

“Material Information” has the same
meaning as set forth in Exchange Policy;

 

(gg)

“NI 13-101” means National
Instrument 13-101 – System
for Electronic Document Analysis and Retrieval of the Canadian Securities
Administrators;

 

(hh)

“NI 45-106” means National
Instrument 45-106 - Prospectus and
Registration Exemptions of the Canadian Securities
Administrators;

 

(ii)

“Non-statutory Stock Option” means
an Option that does not qualify or is not intended to qualify as an
Incentive Stock Option;

 

(jj)

“Ontario Securities Act” means the
Securities Act
(Ontario);

 

(kk)

“person” or “persons” means any individual,
partnership, limited partnership, joint venture, syndicate, sole
proprietorship, company or corporation with or without share
capital, unincorporated association, trust, trustee, executor,
administrator or other legal personal representative, regulatory
body or agency, government or governmental agency, authority or
entity however designated or constituted;

 

 

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(ll)

“persons retained to provide IR
Activities” shall include any Consultant that performs
IR Activities and any Employee or Director whose role and duties
primarily consist of IR Activities;

 

(mm)

“Plan” means this Stock Option Plan
of the Company, as from time to time amended or
re-adopted;

 

(nn)

“public announcement” shall mean
disclosure in a press release reported by a national news service
in Canada or the United States, or, if applicable, in a document
publicly filed by or on behalf of the Company under its profile on
SEDAR or EDGAR;

 

(oo)

“Regulatory Approval” means the
approval or acceptance, as the case may be, of any securities or
other applicable regulatory agency (including the Exchange pursuant
to Exchange Policy) which may have jurisdiction in the
circumstances;

 

(pp)

“SEDAR” means the System for
Electronic Document Analysis and Retrieval described in NI 13-101
and available for public view at www.sedar.com;

 

(qq)

“Shares” means the common shares
without par value which the Company is from time to time authorized
to issue;

 

(rr)

“Subsidiary” means a corporation
which is a subsidiary of the Company as defined in the Ontario
Securities Act;

 

(ss)

“Termination Date” means:

 

(i)

in the case of an
Optionee whose employment or term of office with the Company or a
Subsidiary terminates in the circumstances set out in Subsection
8.2(a) or the date that is designated by the Company or the
Subsidiary, as the case may be, as the last day of such
person’s employment or term of office with the Company or the
Subsidiary, as the case may be;

 

(ii)

in the case of an
Optionee whose employment or term of office with the Company or a
Subsidiary terminates in the circumstances set out in Subsection
8.3(a)(ii), the date of the notice of termination of employment or
term of office given by the Company or the Subsidiary, as the case
may be;

 

(iii)

in the case of an
Optionee whose employment or term of office with the Company or a
Subsidiary terminates in the circumstances set out in Subsection
8.3(a)(i) or Subsection 8.3(a)(iii), the date of resignation or
retirement, as the case may be;

 

(iv)

in the case of an
Optionee whose consulting arrangements (or, if applicable, those of
its Consulting Company if the Optionee is an individual) are
terminated by the Company or a Subsidiary in the circumstances set
out in Subsection 8.2(b), the date that is designated by the
Company or the Subsidiary, as the case may be, as the last day of
the Optionee’s consulting arrangements (or those of its
Consulting Company) with the Company or the Subsidiary, as the case
may be;

 

(v)

in the case of an
Optionee whose consulting arrangements (or, if applicable, those of
its Consulting Company if the Optionee is an individual) are
terminated in the circumstances set out in Subsection 8.3(b), the
date of the notice of termination given to the Optionee (or, if
applicable, those of its Consulting Company if the Optionee is an
individual) or the expiry of the original term or any subsequent
renewal term of the consulting arrangements, as the case may
be;

 

and in
each such case, “Termination
Date” specifically does not mean the date on which any
period of reasonable notice that the Company or the Subsidiary, as
the case may be, may be required at law to provide to the Optionee
would expire;

 

 

-5-

 

 

(tt)

“U.S. Person” means:

 

(i)

any natural person
resident in the United States;

 

(ii)

any partnership or
corporation organized or incorporated under the laws of the United
States;

 

(iii)

any estate of which
any executor or administrator is a U.S. person;

 

(iv)

any trust of which
any trustee is a U.S. person;

 

(v)

any agency or
branch of a foreign entity located in the United
States;

 

(vi)

any
non-discretionary account or similar account (other than an estate
or trust) held by a dealer or other fiduciary for the benefit or
account of a U.S. person;

 

(vii)

any discretionary
account or similar account (other than an estate or trust) held by
a dealer or other fiduciary organized, incorporated, or (if an
individual) resident in the United States;

 

(viii)

any partnership or
corporation if: (a) organized or incorporated under the laws of any
foreign jurisdiction; and (b) formed by a U.S. person principally
for the purpose of investing in securities not registered under the
1933 Act, as amended, unless it is organized or incorporated, and
owned, by accredited investors (as defined in Rule 501(a)
promulgated under the 1933 Act) who are not natural persons,
estates or trusts; and

 

(uu)

“Voting Share” means any share or other
security that carries a voting right either under all circumstances
or under some circumstances that have occurred and are continuing
and also includes any share or other security that is convertible
into or exercisable or exchangeable (in each case, whether at the
time or at any time in the future and whether or not on condition
or the occurrence of any contingency) for a Voting
Share.

 

2.1

Interpretation.
In this Plan, unless the context otherwise requires:

 

(a)

words importing the
singular include the plural and vice versa and words importing
gender include all genders and neuter;

 

(b)

the division of
this Plan into articles, sections, and paragraphs and the insertion
of headings herein are for convenience of reference only and shall
not affect in anyway the meaning or interpretation of this Plan and
the terms “this Plan”, “hereof”,
“herein”, “hereto”, “hereunder”
and similar expressions refer to this Plan and not to any
particular article, section or other portion hereof and include any
instrument supplementary or ancillary hereto or
thereto;

 

(c)

the word
“including”, when following a general statement or
term, is not to be construed as limiting the general statement or
term to any specific item or matter set forth or to similar items
or matters, but rather as permitting the general statement or term
to refer also to all other items or matters that could reasonably
fall within its broadest possible scope;

 

(d)

if the date on
which any action is required to be taken hereunder is not a
Business Day, that action shall be required to be taken on the
first Business Day prior to such date, unless specifically provided
otherwise in this Plan; and

 

 

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(e)

a reference to
legislation, includes rules, regulations and forms made or
promulgated under any such legislation and the published national
instruments, multilateral instruments, policies, bulletins made
thereunder, together with all amendments thereto in force from time
to time, and any legislation, rules, regulations, forms and
published national instruments, multilateral instruments, policies,
bulletins that supplement or supersede such
legislation.

 

2.2

Governing
Law. This Plan and
all matters to which reference is made herein shall be
governed by and
interpreted in accordance with the laws of the province of
Ontario.

 

2.

ADMINISTRATION

 

2.1

Administration by
the Board. The Board,
or if applicable any committee of the Board to which responsibilities with
respect to the Plan have been delegated, shall be responsible for
the general administration of the Plan and the proper execution of
its provisions, the interpretation of the Plan and the
determination of all questions arising hereunder. The day-to-day
administration of the Plan may be delegated to such officers and
employees of the Company or of a Subsidiary as the Board
determines.

 

2.2

Authority of the
Board. Subject to the
limitations of the Plan, the Board has the authority
to:

 

(a)

grant Options to
purchase Shares to Eligible Persons;

 

(b)

determine the
terms, including the limitations, restrictions and conditions, if
any, upon such grants;

 

(c)

interpret the Plan
and to adopt, amend and rescind such administrative guidelines and
other rules and regulations relating to the Plan as it may from
time to time deem advisable, subject to required Regulatory
Approval; and

 

(d)

make all other
determinations and to take all other actions in connection with the
implementation and administration of the Plan as it may deem
necessary or advisable.

 

Any
decision, interpretation or other action made or taken in good
faith by or at the direction of the Company or the Board (or any of
its members) arising out of or in connection with the Plan shall be
within the absolute discretion of all and each of them, as the case
may be, and shall be final, binding and conclusive on the Company
and Optionees and their respective heirs, executors,
administrators, successors and assigns and all other
persons.

 

2.3

Accounts and
Statements. The Corporation will maintain, or cause to be
maintained, records indicating the number of Options granted to
each Optionee and the number of Optioned Shares issued under the
Plan.

 

2.4

Use of an
Administrative Agent and Trustee. The Board may in its sole
discretion appoint from time to time one or more entities to act as
administrative agent to administer the Options granted under the
Plan and to act as trustee to hold and administer the assets that
may be held in respect of Options granted under the Plan, the whole
in accordance with the terms and conditions determined by the Board
in its sole discretion. In such case, the Company and the
administrative agent will maintain records showing the number of
Options granted to each Optionee under the Plan.

 

3.

SHARES
RESERVED

 

3.1

Shares Reserved
Under the Plan. The
maximum number of Shares reserved for issuance under the Plan and all of the
Company’s other security based compensation arrangements at
any given time is equal to ten percent (10%) of the issued and
outstanding Shares as at the date of grant of an Option under the
Plan, including all of the existing Common Shares currently subject
to outstanding Options as of the Adoption Date (as defined
below) which were granted prior to the implementation of this Plan
and which, by the implementation of this Plan, are covered under
this Plan and subject to adjustment or increase of such number
pursuant to Subsections 10.2(a) and
10.2(b).

 

 

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3.2

Exercised
Options. Any Shares
subject to an Option granted under the Plan which have
been exercised by an
Optionee, shall again be available for grants under the Plan and
shall be considered to be part of the pool of Shares available for
Options under the Plan and may be made the subject of a further
Option or Options granted pursuant to the Plan.

 

3.3

Cancelled,
Surrendered or Terminated Options. If and to the extent any Option
granted under the Plan
expires or is cancelled, terminated or surrendered without having
been exercised in whole or in part, the number of Shares in respect
of which such Option expired or was cancelled or terminated shall
be considered to be part of the pool of Shares available for
Options under the Plan and may be made the subject of a further
Option or Options granted pursuant to the Plan.

 

3.4

U.S. Securities Law
Compliance. No awards
shall be granted to a U.S. Person under the Plan and no Shares
shall be issued and delivered upon the exercise of Options granted
under the Plan unless and until the Company and/or the Holder have
complied with all applicable U.S. federal and state registration,
listing and/or qualification requirements and all other
requirements of law or of any regulatory agencies having
jurisdiction.

 

4.

ELIGIBILITY

 

4.1

Eligibility.
Eligible Persons are eligible to participate in the Plan, provided
that eligibility to participate does not confer upon
any Eligible Person any right to be granted Options pursuant to the
Plan. The extent to which any Eligible Person is entitled to be
granted Options pursuant to the Plan will be determined in the sole
and absolute discretion of the Board. 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. With
respect to Options granted to Employees, Consultants or Management
Company Employees, the Board and the Optionee are responsible for
ensuring and confirming that the Optionee is a bona fide Employee, Consultant or Management
Company Employee, as the case may be.

 

4.2

Continuing
Eligibility. Any
Optionee to whom an Option is granted under the Plan
who subsequently ceases
to hold the position in which he received such Option shall
continue to be eligible to hold such Option as a Optionee as long
as otherwise continuing to be an Eligible Person in any
capacity.

 

4.3

Participation
Voluntary.
Participation in the Plan by an Optionee will be
voluntary.

 

5.

GRANT
OF OPTIONS

 

5.1

Grant of
Options. The Board
may, from time to time, subject to the provisions of the Plan
and such other terms
and conditions as the Board may prescribe, grant Options to any
Eligible Person. Subject to specific variations approved by the
Board, all terms and conditions set out in the Plan will be deemed
to be incorporated into and form part of each Option granted under
the Plan.

 

5.2

Number of Shares
Subject to Option.
Subject to the limitations set out in Article 7, the
number of Shares
subject to each Option shall be determined by the Board, and such
number shall be set out in the Option Agreement evidencing the
grant of such Option.

 

5.3

Exercise
Price. The Board will
establish the Exercise Price at the time each Option is
granted and allocated
to particular Eligible Persons and approved by the Board, provided
that the Exercise Price shall not be less than the Discounted
Market Price as of date of such grant of the Option or, if the
Shares are not listed on the Exchange, the Fair Market Value
determined in good faith by the Board. In addition to any resale
restrictions under Applicable Securities Laws and the Plan, where
the Exercise Price of any Option is priced at a discount to the
Market Price on the date of grant, any such Option and any Shares
issued upon exercise of such Option prior to the expiry of the
Exchange Hold Period will be subject to, and must contain a legend
in respect of, the Exchange Hold Period commencing on the date such
Options were granted.

 

 

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5.4

Vesting of Option
Rights. No Option may
be exercised by an Optionee unless it is fully vested. Subject to the provisions of this
Section 6.4 and Article 10, Options shall vest, and thereafter be
exercisable:

 

(a)

over a period of
eighteen (18) months from the Effective Date, with no more than one
third (1/3) of such Options vesting in any six (6) month period
therein; or

 

(b)

as otherwise
determined by the Board in its discretion.

 

Notwithstanding the
foregoing, Options granted to persons retained to provide IR
Activities shall vest at least over a period of twelve (12) months
from the Effective Date, with no more than one quarter (1/4) of
such Options vesting in any three (3) month period therein. The
Board may impose such other restrictions or limitations or
requirements upon the exercise of Options as the Board, in its sole
and absolute discretion, may determine on the date of
grant.

 

5.5

Term and
Expiry. Subject to
any accelerated termination as set forth in the Plan, all
Options granted
pursuant to the Plan will expire on the date (the
“Expiry Date”)
as determined by the Board at the date of grant, provided that no
Option may be exercised beyond five (5) years from the Effective
Date. Notwithstanding the above, if the Expiry Date for any Option
falls within a Blackout Period or within ten (10) Business Days
from the expiration of a Blackout Period (such Options to be
referred to as “Restricted
Options”), the Expiry Date of such Restricted Options
shall be automatically extended to the date that is the 10th
Business Day following the end of the Blackout Period, such 10th
Business Day to be considered the Expiry Date for such Restricted
Options for all purposes under the Plan.

 

5.6

Non-Assignable and
Non-Transferable.
Options shall be non-assignable and non-transferable by a holder thereof other than by
will or the laws of descent.

 

5.7

Incentive Stock Options.

 

(a)

Each Option will be
designated in the certificate as either an Incentive Stock Option
or a Non-statutory Stock Option. However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of
the Shares underlying Incentive Stock Options exercisable for the
first time by the Holder during any calendar year (including all
plans of the Company and any Subsidiary) exceeds one hundred
thousand U.S. dollars (US $100,000), all such Options will be
construed as Non-statutory Stock Options. Incentive Stock Options
will be taken into account in the order in which they were granted.
The Fair Market Value of the Shares will be determined as of the
date the Option for such Shares is granted. If for any reason any
Option (or portion thereof) does not qualify as an Incentive Stock
Option, then, to the extent of such nonqualification, the Option
(or portion thereof) shall be treated as a Non-statutory Stock
Option granted under the Plan. In no event will the administrator,
the Company or any parent or subsidiary of the Company or any of
their respective Employees or member of the Board have any
liability to any Holder (or any other Person or Entity) due to the
failure of the Option to qualify for any reason as an Incentive
Stock Option.

 

(b)

Any Holder who
shall make a “disposition” (as defined in Section 424
of the Code) of all or any portion of Shares acquired upon exercise
of an Incentive Stock Option within two years from the Grant Date
of such Incentive Stock Option or within one year after the
issuance of the Shares acquired upon exercise of such Incentive
Stock Option shall be required to immediately advise the Company in
writing as to the occurrence of the sale and the price realized
upon the sale of such Shares.

 

 

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(c)

To the extent that
an Option does not qualify or cease to qualify as an Incentive
Stock Option it shall not affect the validity of such Option and
shall constitute a non-qualified stock option in the event that the
Holder disposes of the Shares acquired upon.

 

6.

LIMITATIONS OF OPTIONS

 

6.1

Grants to
Persons.
Notwithstanding any other provision herein, the aggregate number of
Shares reserved for
issuance pursuant to Options granted to any one person (and any
Consulting Company wholly owned by that person), within any twelve
(12) month period shall not exceed 5% of the issued and outstanding
Shares at the time of the grant of the Option unless the Company
has received Disinterested Shareholder Approval in accordance with
Exchange Policy.

 

6.2

Grants to
Insiders.
Notwithstanding any other provision herein,

 

(a)

the aggregate
number of Shares reserved for issuance under Options granted to
Insiders (as a group) and any other security based compensation
arrangements of the Company at any point in time shall not exceed
10% of the issued and outstanding Shares at such time;
or

 

(b)

the aggregate
number of Shares reserved for issuance pursuant to Options granted
to Insiders (as a group), within any twelve (12) month period shall
not exceed 10% of the issued and outstanding Shares at the time of
the grant of the Option;

 

unless
the Company has received Disinterested Shareholder Approval in
accordance with Exchange Policy. For the purposes of the
limitations set forth in Subsections 7.2(a) and 7.2(b) above,
Options held by an Insider at any point in time that were granted
to such person prior to it becoming an Insider shall be considered
Options granted to an Insider irrespective of the fact that the
person was not an Insider at the time of grant.

 

6.3

Grants to
Consultants.
Notwithstanding Section 7.1, but subject to the limit set forth
in Section 7.4, the
aggregate number of Shares reserved for issuance pursuant to
Options granted to any one Consultant within a twelve (12) month
period shall not exceed 2% of the issued and outstanding Shares at
the time of the grant of the Option.

 

6.4

Grants to Persons
Providing IR Activities. Notwithstanding Section 7.1, the
aggregate number of
Shares reserved for issuance pursuant to Options granted within any
twelve (12) month period to persons retained to provide IR
Activities shall not exceed 2% of the issued and outstanding Shares
at the time of the grant of the Option.

 

7.

TERMINATION OF OPTIONS

 

7.1

Ceasing to be an
Eligible Person (Death). In the event an Optionee’s
employment or consulting arrangements (or, if applicable,
those of its Consulting Company if the Consultant who is an
Optionee is an individual) or term of office with the Company or a
Subsidiary ceases by reason of the Optionee’s death,
then:

 

(a)

the executor or
administrator of the Optionee’s estate or the Optionee, as
the case may be, may exercise any Options of the Optionee to the
extent that the Options were exercisable at the date of such death
and the right to exercise the Options terminates on the earlier
of:

 

(i)

the date that is
twelve (12) months from the date of the Optionee’s death;
and

 

(ii)

the date on which
the Exercise Period of the particular Option expires;

 

 

-10-

 

 

(b)

any Options held by
the Optionee that were not exercisable at the date of death
immediately expire and are cancelled on such date; and

 

(c)

such
Optionee’s eligibility to receive further grants of Options
under the Plan ceases as of the date of the Optionee’s
death.

 

7.2

Ceasing to be an
Eligible Person (Cause or Breach). In the
event:

 

(a)

an Optionee’s
employment or term of office with the Company or a Subsidiary is
terminated by the Company or a Subsidiary for lawful cause,
or

 

(b)

an Optionee’s
consulting arrangements (or, if applicable, those of its Consulting
Company if the Optionee is an individual) with the Company or a
Subsidiary are terminated by the Company or a Subsidiary for breach
of agreement prior to the expiry of the original term or any
subsequent renewal term of such arrangements;

 

then

 

(c)

any Options held by
such Optionee (or, if applicable, those of its Consulting Company),
whether or not such Options are exercisable at the applicable
Termination Date, immediately expire and are cancelled on the
applicable Termination Date at a time determined by the Board, at
its discretion; and

 

(d)

such
Optionee’s eligibility to receive further grants of Options
under the Plan ceases as of the applicable Termination
Date.

 

7.3

Ceasing to be an
Eligible Person (Without Cause or Breach). In the
event:

 

(a)

an Optionee’s
employment or term of office with the Company or a Subsidiary
terminates by reason of:

 

(i)

voluntary
resignation by such Optionee;

 

(ii)

termination by the
Company or a Subsidiary without cause (whether such termination
occurs with or without any or adequate reasonable notice or with or
without any or adequate compensation in lieu of such reasonable
notice); or

 

(iii)

the retirement of
such Optionee in accordance with the then customary policies and
practices of the Company in relation to retirement; or

 

(b)

an
Optionee`’s consulting arrangements (or, if applicable, those
of its Consulting Company) with the Company or a Subsidiary are
terminated in circumstances other than those referred to in
Subsection 8.2(b);

 

then:

 

(c)

any Options held by
the Optionee (or, if applicable, those of its Consulting Company)
that are exercisable at the Termination Date continue to be
exercisable by the Optionee until the earlier of:

 

(i)

the date determined
by the Board, at its discretion, which is not less than 90 days and
not more than is eighteen (18) months following the applicable
Termination Date; and

 

 

-11-

 

 

(ii)

the date on which
the Exercise Period of the particular Option expires;

 

(d)

any Options held by
the Optionee (or, if applicable, those of its Consulting Company)
that are not exercisable at the Termination Date immediately expire
and are cancelled upon the Termination Date; and

 

(e)

such
Optionee’s eligibility to receive further grants of Options
under the Plan ceases as of the Termination Date.

 

Without
limitation, and for greater certainty only, this Section 8.3 will
apply regardless of whether the Optionee received compensation in
respect of any termination by the Company or a Subsidiary without
cause or was entitled to a period of notice of termination which
would otherwise have permitted a greater portion of the Option to
vest with the Optionee.

 

7.4

Discretion to
Permit Exercise.
Notwithstanding the provisions of Sections 8.2 and 8.3,
the Board may, in its
discretion, at any time prior to or following the events
contemplated in such sections and in any Option Agreement, permit
the exercise of any or all Options held by the Optionee in the
manner and on terms authorized by the Board, provided
that:

 

(a)

any Options granted
to any Optionee which are subject to Sections 8.2 and 8.3 shall
expire at a time to be determined by the Board following the
applicable Termination Date;

 

(b)

subject to an
extension pursuant to Section 6.5, the Board will not, in any case,
authorize the exercise of an Option pursuant to this section beyond
the Expiry Date of the particular Option; and

 

(c)

the Board will not,
in any case, authorize the exercise of any or all Options of the
Optionee on a date that is more than one (1) year after the earlier
of: (i) the death of such Optionee; or (ii) the Termination
Date.

 

8.

OPTION
PROCEDURE

 

8.1

Option
Commitment. Upon
grant of an Option hereunder to an Optionee, a senior officer of
the Company designated
by the Board will deliver to the Optionee an Option Agreement
detailing the terms of the Option. Upon the occurrence of an event
to which Subsections 10.2(a) and 10.2(b) applies, and upon the
surrender by the Optionee of the originally signed Option Agreement
to which any Option relates, a senior officer of the Company
designated by the Board may deliver to any Optionee with respect to
any Option, a revised Option Agreement identified as such, with
respect to Shares as to which the Option has not been exercised,
reflecting the application of Subsections 10.2(a) and 10.2(b), as
applicable, by reason of that event.

 

8.2

Manner of
Exercise. Subject to
the provisions of the Plan and the provisions of the
Option Agreement issued
to an Optionee, Options shall be exercisable by the Holder by
delivering a fully completed Exercise Form to the Company
specifying the number of Options to be exercised accompanied by
payment in full of the aggregate Exercise Price therefor by cash
payment, wire transfer or by certified cheque or bank draft payable
to the Company (in each case in immediately available funds)
(unless a Cashless Exercise is chosen in which case the Cashless
Exercise Procedure will prevail). The Exercise Form must be
accompanied by: (a) the originally signed Option Agreement with
respect to the Option being exercised; and (b) documents containing
such representations, warranties, agreements and undertakings,
including such as to the Holder’s future dealings in such
Shares, as counsel to the Company reasonably determines to be
necessary or advisable in order to comply with or safeguard against
the violation of Applicable Securities Laws or similar laws of any
jurisdiction

 

 

-12-

 

 

8.3

Cashless Exercise
Procedure. In lieu of the payment required in an amount
equal to the aggregate Exercise Price of the Shares in respect of
any Option being exercised, the Holder shall have a Cashless
Exercise Right (but not the obligation) to pay the aggregate
Exercise Price of the Shares with the Option upon exercise by
surrendering to the Company any exercisable but unexercised portion
of the Option having an Exercise Value (the “Exercise Value”), at the close of
trading on the day immediately preceding any particular exercise
date of an Option, equal to the Exercise Price multiplied by the
number of Shares being purchased upon exercise. The sum of (a) the
number of Shares being purchased upon exercise of the
non-surrendered portion of an Option pursuant to the Cashless
Exercise Right and (b) the number of Shares underlying the portion
of an Option being surrendered, shall not in any event be greater
than the total number of Shares purchasable upon the complete
exercise of any Option if the Exercise Price were paid in cash.
Upon exercise of a Cashless Exercise Right, the Company shall
deliver to the Holder (without payment by the Holder of any of the
Exercise Price if so desired) that number of Shares equal to the
quotient obtained by dividing (x) the Exercise Value of the portion
of the Option being converted at the time which the Cashless
Exercise Right is exercised by (y) the Exercise Price. The Exercise
Value of the portion of the Options being surrendered shall equal
the remainder derived from subtracting (a) the Exercise Price
multiplied by the number of Shares underlying the portion of the
Option being surrendered from (b) the Fair Market Value, at the
close of trading on the day immediately preceding any particular
exercise date of an Option, multiplied by the number of Shares
underlying the portion of the Option being
surrendered.

 

8.4

Tax
Matters.
Notwithstanding any other provision of this Plan, the
Company’s obligation to issue Shares to Holder pursuant to
the exercise of an Option or otherwise pay an amount pursuant to
the Plan or any Option shall be subject to the satisfaction of all
federal, state, provincial, local and foreign tax obligations as
may be required by applicable law, including, but not limited to,
obligations to make withholdings, deductions or remittances in
respect of any taxable benefits of a Holder arising under this Plan
or any Option (“tax
withholding obligations”) and the Company shall have
the power and right to:

 

(a)

deduct or withhold
from all amounts payable to a Holder pursuant to this Plan, any
Option, or otherwise in the course of the employment of the
Optionee in respect of the Option with the Company or its
Subsidiary, and

 

(b)

require the Holder
to remit to the Company an amount sufficient to satisfy in full any
tax withholding obligations as may be imposed on the Company by
applicable law.

 

Further, the
Company may require the Holder to satisfy, in whole or in part,
such deduction or any tax withholding obligation by instructing the
Company to withhold Shares that would otherwise have been received
by the Holder upon exercise of any Options, and sell such Shares by
Company as a trustee on behalf of the Holder, and remit the
proceeds of such sale to the relevant taxing authority in
satisfaction of the tax or withholding obligations. By
participating in the Plan, the Participant consents to the
foregoing and authorizes the Company or its Affiliate, as
applicable, to effect the sale of such Shares on behalf of the
Holder and to remit the proceeds of such sale to the relevant
taxing authority in satisfaction of the tax or withholding
obligations. Neither the Company nor any applicable Affiliate shall
be responsible for obtaining any particular price for the Shares
nor shall the Company or any applicable Affiliate be required to
issue any Shares under the Plan unless the Holder has made suitable
arrangements with the Company and any applicable Affiliate to fund
any withholding obligation.

 

 

-13-

 

 

8.5

Issuance of
Shares. Subject to the provisions of the Plan and the
provisions of the Option Agreement issued to an Optionee,
and upon the Company being satisfied that all of the conditions and
requirements in this Article 9 have been fully met, the Holder
shall be deemed to be a holder of record of the Shares to be issued
pursuant to an exercise of an Option, and thereafter the Company
shall, within a reasonable amount of time, cause the transfer agent
and registrar of the Shares to deliver to the Optionee a
certificate or certificates or a statement of account, representing
in the aggregate the acquired Shares. Any certificate or
certificates representing the Shares will bear any restrictive
legend required by Applicable Securities Laws and as may apply
under foreign securities laws including the applicable securities
laws of U.S. and state securities laws unless, in the written
opinion of counsel for the Holder delivered to and for the benefit
of the Company (which counsel shall be reasonably satisfactory to
the Company), the Shares are not, at such time, required by law to
bear such legend.

 

If the
Holder is a resident or citizen of the United States of America at
the time of the exercise of the Option, the certificate(s)
representing the Shares will be endorsed with the following or a
similar legend:

 

“The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, of the
United States of America (the “Act”) or the securities
laws of any state (“State”) of the United States of
America and may not be sold, transferred, pledged, hypothecated or
distributed, directly or indirectly, to a U.S. person (as defined
in Regulation S adopted by the U.S. Securities and Exchange
Commission under the Act) or within the United States unless such
securities are (i) registered under the Act and any applicable
State securities act (a “State Act”), or (ii) exempt
from registration under the Act and any applicable State Act and
the Company has received an opinion of counsel to such effect
reasonably satisfactory to it, or (iii) sold in accordance with
Regulation S and the Company has received an opinion of counsel to
such effect reasonably satisfactory to it.”

 

9.

CAPITAL
ADJUSTMENTS AND OTHER TRANSACTIONS

 

9.1

General.
The existence of any Options does not affect in any way the right
or power of the Company
or its shareholders to make, authorize or determine any adjustment,
recapitalization, reorganization or any other change in the
Company’s capital structure or its business, or any
amalgamation, merger or consolidation involving the Company, to
create or issue any bonds, debentures, shares or other securities
of the Company or to determine the rights and conditions attaching
thereto, to effect the dissolution or liquidation of the Company or
any sale or transfer of all or any part of its assets or business,
or to effect any other corporate act or proceeding, whether of a
similar character or otherwise, whether or not any such action
referred to in this section would have an adverse effect on the
Plan or any Option granted hereunder, subject to Subsections
10.2(a) and 10.2(b).

 

9.2

Adjustment.
In the event of:

 

(a)

a subdivision,
consolidation or reclassification of Shares or any similar capital
reorganization, or any other change to be made in the
capitalization of the Company including an exchange of Shares for
another security of the Company that, in the opinion of the Board,
acting reasonably and in good faith, would warrant the replacement
or amendment of any existing Options in order to
adjust:

 

(i)

the number of
Shares or other securities that may be acquired on the exercise of
any outstanding Options; or

 

(ii)

the Exercise Price
of any outstanding Options,

 

 

-14-

 

 

(b)

in order to
preserve proportionately the rights and obligations of the
Optionees, the Board will authorize such steps, subject to
Regulatory Approval, if required, to be taken as are equitable and
appropriate to that end, having regard to the availability of any
deduction under the ITA to which the Optionee may be
entitled.

 

(c)

an amalgamation,
combination, merger or other reorganization involving the Company,
by exchange of shares, by sale or lease of assets, or otherwise,
that, in the opinion of the Board, acting reasonably and in good
faith, warrants the replacement or amendment of any existing
Options in order to adjust:

 

(i)

the number of
Shares or other securities that may be acquired on the exercise of
any outstanding Options; or

 

(ii)

the Exercise Price
of any outstanding Options,

 

(d)

in order to
preserve proportionately the rights and obligations of the
Optionees, the Board will authorize such steps, subject to
Regulatory Approval, if required, to be taken as are equitable and
appropriate to that end, having regard to the availability of any
deduction under the ITA to which the Optionee may be
entitled.

 

Except
as expressly provided in Subsections 10.2(a) and 10.2(b), neither
the issue by the Company of shares of any class or securities
convertible into or exchangeable for shares of any class, nor the
conversion or exchange of such shares or securities, affects, and
no adjustment by reason thereof is to be made with respect to: (i)
the number of Shares that may be acquired on the exercise of any
outstanding Options; or (ii) the Exercise Price of any outstanding
Options.

 

9.3

Fractional
Shares. The
Corporation will not be required to issue fractional Shares in
satisfaction of its
obligations hereunder and any fractional interest in a Share that
would, except for the provisions of this Section 10.3, be
deliverable upon the exercise of an Option will be cancelled and
not be deliverable by the Company.

 

9.4

Disputes.
If any questions arise at any time with respect to the Exercise
Price or number of Optioned Shares or other
securities deliverable upon exercise of an Option in any of the
events set out in Subsections 10.2(a) and 10.2(b), such questions
will be conclusively determined by the Company’s auditors,
or, if they decline to so act, any other firm of chartered
accountants that the Company may designate and who will have access
to all appropriate records and such determination will be binding
upon the Company and all Optionees.

 

9.5

Sale of
Corporation, etc. If
the Board at any time by resolution declares it advisable to do so
in connection with a
Merger and Acquisition Transaction, the Board has the right but not
the obligation, and without the consent of any Optionee, to provide
for the conversion, exchange, replacement or substitution of any
outstanding Options into or for options, rights or other securities
of similar value of, or the assumption of outstanding Options by
any entity or Affiliate participating in or resulting from a Merger
and Acquisition Transaction. Any such conversion, exchange,
replacement, substitution or assumption shall be on such terms as
the Board in good faith may consider fair and appropriate in the
circumstances. In addition, and notwithstanding this Section 10.5,
the Board has the right but not the obligation, and without the
consent of any Optionee, to determine, at its sole discretion,
that:

 

 

-15-

 

 

(a)

any or all Options
shall thereupon terminate; provided that only such outstanding
Options that have vested shall remain exercisable until
consummation of the Merger and Acquisition Transaction;
or

 

(b)

Options not
exercisable may be exercisable in full provided, however, that were
any vesting of Options is required by Exchange Policy, written
approval of the Exchange is first obtained.

 

9.6

Change of
Control. If the Board
at any time by resolution declares it advisable to do so
in connection with a
Change of Control, the Board has the right but not the obligation,
and without the consent of any Optionee, to:

 

(a)

within a specified period of time prior to the
completion of the Change in Control as determined by the Board but
subject to and conditional upon the completion of the Change of
Control, accelerate the dates upon which any or all outstanding
Options shall vest and be exercisable or settled, without regard to
whether such Options have otherwise vested in accordance with their
terms and provided, however,
that were any vesting of Options is required by Exchange Policy,
written approval of the Exchange is first
obtained;

 

(b)

permit each
Optionee, within a specified period of time prior to the completion
of the Change in Control as determined by the Board but subject to
and conditional upon the completion of the Change of Control, to
exercise all of the Optionee’s outstanding Options;
or

 

(c)

subject to and
conditional upon the completion of the Change of Control, deem the
Plan and all outstanding Options, vested and unvested, terminate,
without further act or formality, except to the extent required as
determined by the Board.

 

The
Optionee shall execute such documents and instruments and take such
other actions, including exercise or settlement of Options vesting
pursuant to Subsection 10.6(a) or the Option Agreement, as may be
required consistent with the foregoing; provided, however, that the
exercise or settlement of Options vesting pursuant to Subsection
10.6(a) or the Option Agreement shall be subject to the completion
of the Change of Control event. In taking any of the actions
contemplated by this Section 10.6, the Board shall not be obligated
to treat all Options held by any Optionee, or all Options in
general, identically.

 

10.

AMENDMENTS
& TERMINATION OF PLAN

 

10.1

Amendment of
Option. Subject to
Applicable Securities Law and Exchange Policy, the
Board may amend the
terms of any Option granted in accordance with the Plan upon
obtaining, if required, Regulatory Approval and shareholder
approval (including Disinterested Shareholder Approval, as
applicable) provided that:

 

(a)

amendments to an
Option to reduce the number of Shares under option; increase the
Exercise Price; or cancel an Option will not require Regulatory
Approval or shareholder approval provided there is a public
announcement outlining the terms of the amendment;

 

(b)

no proposed
amendment to an Option shall reduce the Exercise Price to an amount
that is less than the Discounted Market Price at the time the
amendment becomes effective;

 

(c)

if an amendment to
an Option impairs such Option or is adverse to the Optionee
thereof, the amendment shall only be made effective after the
written consent of the affected Optionee to such amendment is
received; and

 

(d)

if the amendment of
an Option requires Regulatory Approval and/or shareholder approval
(including Disinterested Shareholder Approval, as applicable), 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 granted.

 

 

-16-

 

 

10.2

Amendment of
Plan. Subject to
Applicable Securities Law and Exchange Policy, the Board
may amend the Plan, or
any portion thereof, upon obtaining Regulatory Approval and, if
required, shareholder approval (including Disinterested Shareholder
Approval, as applicable) provided that amendments to the Plan to
fix typographical errors and amendments to clarify existing
provisions of the Plan that do not have the effect of altering the
scope, nature and intent of such provisions will not require
shareholder approval.

 

10.3

Termination of
Plan. The Board may
terminate the Plan at any time in its absolute discretion.
If the Plan is so
terminated, no further Options shall be granted, but the Options
then outstanding shall continue in full force and effect in
accordance with the provisions of the Plan for the duration of such
time as any Option remains outstanding.

 

11.

GENERAL
PROVISIONS

 

11.1

Effective Date and
Approvals. This Plan
was approved and adopted by the Board on October 20, 2017 (the “Adoption Date”) and is and shall
be effective and in full force and effect in accordance with its
terms and conditions from and after such Adoption Date subject to
Regulatory Approval and initial shareholder approval and thereafter
annual shareholder approval (including Disinterested Shareholder
Approval, as applicable) as required pursuant to Applicable
Securities Law and/or Exchange Policy. Any Options granted under
the Plan prior to such approval shall be conditional upon such
approval being given and no such Options may be exercised unless
and until such approval have been obtained or given.

 

11.2

Rights as
Shareholder. An
Optionee has no rights whatsoever as a shareholder in respect of
any of the Optioned
Shares (including, without limitation, any right to receive
dividends or other distributions therefrom or thereon) other than
in respect of Optioned Shares purchased by and fully paid for and
issued to the Optionee on exercise of the Option.

 

11.3

Rights to
Employment/Service.
Nothing contained in the Plan will confer upon any
Optionee (or his
Consulting Company) any right with respect to employment, term of
office or consulting with the Company or a Subsidiary, or interfere
in any way with the right of the Company to terminate the
Optionee’s employment, term of office or consulting
arrangements (or those of his Consulting Company) at any
time.

 

11.4

No Listing
Representation. The
Company makes no representation or warranty as to whether
it will be successful
in obtaining, or if applicable, maintaining, a listing for the
Shares on any stock exchange or as to the future market value of
the Shares issued on the exercise of any Option.

 

11.5

Notice.
Each notice, demand or communication required or permitted to be
given under the Plan (each, a “ Notice”) will be in writing and
shall be given by by personal delivery, facsimile transmission or
by email, if to the Company, to or to the attention of the
Corporate Secretary of the Company in each case at the address,
facsimile number or email address set forth on the Company’s
website or at such other address as the Company may advise an
Optionee of, in writing, as being the address for delivery of a
Notice to the Company, and if to an Optionee, at the most recent
address, facsimile number or email address for the Optionee shown
in the records of the Company. All such Notices given as aforesaid
shall be deemed to have been given or made only at the time it is
served by personal delivery upon the Corporate Secretary or
Optionee, as the case may be, or if sent by facsimile or email
transmission, upon receipt of confirmation that such transmission
has been received; provided that if such delivery or electronic
communication is made on a day which is a not a Business Day or
later than 5:00 p.m. (Toronto time) on a day which is a Business
Day, then such delivery or electronic communication shall be deemed
to have been made on the subsequent day that is a Business
Day.

 

 

-17-

 

 

11.6

Severability.
To the extent a provision of the Plan requires Regulatory Approval
or shareholder approval
which is not received, such provision shall be severed from the
remainder of the Plan until the approval is received and the
remainder of the Plan shall remain in full force and effect. If any
provision of this Plan, or the application thereof, is determined
for any reason and to any extent to be invalid or unenforceable,
the remainder of this Plan and the application of such provision to
other persons and circumstances shall remain in full force and
effect to the fullest extent possible.

 

11.7

Compliance with
Law. Notwithstanding
any other provision herein, the Company is not obligated to grant any Options,
issue any Shares or other securities, make any payments or take any
other action if, in the opinion of the Board, on the advice of
counsel for the Company, such action would require the filing and
receipt of a prospectus or require the filing of a registration
statement or otherwise constitute a violation by an Optionee or the
Company of Applicable Securities Laws or any provision of any
applicable law, including any statutory or regulatory enactment of
any government or government agency. Optioned Shares shall not be
issued with respect to an Option unless the exercise of such Option
and the issuance and delivery of such Optioned Shares shall comply
with all relevant provisions of law, including, without limitation,
Applicable Securities Laws or similar laws of any jurisdiction, and
the requirements of the Exchange, and such issuance shall be
further subject to the approval of counsel for the Company with
respect to such compliance. The inability of the Company to obtain
from any regulatory body the authority deemed by the Company to be
necessary for the lawful issuance and sale of any Optioned Shares
under the Plan, or the inability of the Company to lawfully issue,
sell, or deliver any Optioned Shares, shall relieve the Company of
any liability with respect to the non-issuance, sale or delivery of
such Optioned Shares.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-18-ex_131600.htm

Exhibit 10.1

 

AMENDMENT TO DEFINED CONTRIBUTION AGREEMENT

 

THIS AMENDMENT TO DEFINED CONTRIBUTION AGREEMENT (this “Amendment”), dated as of November 19, 2018, is entered into by and between PRIME MERIDIAN HOLDING COMPANY, a Florida corporation (the “Holding Company”), PRIME MERIDIAN BANK, a Florida bank and wholly-owned subsidiary of the Holding Company (the “Bank” and collectively with the Holding Company, the “Employer”), and SAMMIE D. DIXON, JR. (“Executive”). All capitalized terms contained in this Amendment and not otherwise defined herein shall have the respective meanings given to such terms in that certain Defined Contribution Agreement, effective as of December 11, 2018, by and between the Bank and Executive (the “Agreement”).

 

WHEREAS, the Bank and Executive entered into the Agreement and now desire to amend certain provisions of the Agreement;

 

NOW, THEREFORE, for the mutual covenants and benefits set forth herein and in the Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Agreement is hereby amended as follows:

 

	
			1.

				
			Section 2(a) of the Agreement shall be deleted and replaced with the following:

			

 

(a)     Termination on or after Normal Retirement Age. If Executive remains in the Continuous Service of the Employer until on or after attaining Normal Retirement Age, then following the date on which the Executive experiences a Separation from Service on or after Normal Retirement Age (the “Normal Retirement Date”) for any reason other than (i) discharge of the Executive by the Employer for Cause, (ii) because the Executive dies or becomes Permanently Disabled or (iii) on or within twelve (12) months following the effective date of a Change in Control, the Bank shall pay to the Executive the annual benefit for fifteen (15) years that would fully amortize the Executive’s Account Balance at Executive’s Normal Retirement Date (using the Discount Rate and reasonable actuarial assumptions in accordance with Generally Accepted Accounting Principles (“GAAP”) as reasonably applied by the Employer) (rounded down to the nearest whole dollar). Payment of the annual benefit shall commence upon the Executive’s Normal Retirement Date, beginning with the month immediately following the Executive’s Normal Retirement Date, and be paid in equal monthly installments on the first day of each month thereafter until paid in full.

 

	
			2.

				
			Section 10(b) of the Agreement shall be deleted and replaced with the following:

			

 

(b)     “Account Balance” means, as of any date, the aggregate amount credited to the Executive’s Account under this Agreement. The Bank, in its sole and absolute discretion, shall determine what, if any, amounts shall be credited to Executive’s Account in any particular calendar year, provided, however, if Executive remains in the Continuous Service of the Employer until attaining Normal Retirement Age, that the Bank must credit to the Executive’s Account, no later than the Executive’s Normal Retirement Age, the amount that would result in an Account Balance at the time of Executive’s Normal Retirement Date equal to the present value, using the Discount Rate and reasonable actuarial assumptions in accordance with GAAP as reasonably applied by the Employer, of $150,000 of annual retirement benefits for fifteen (15) years in equal monthly installments on the first day of each month commencing upon the Executive’s Normal Retirement Date.

 

	
			3.

				
			Section 10 of the Agreement shall be amended by adding the following subsection (l) thereto:

			

 

(l)     “Discount Rate” shall mean the interest rate designated by the Board of Directors for determining the present value of any benefits payable under this Agreement and/or the amount of the installment payments necessary to fully amortize the Executive’s Account at the designated Discount Rate over the specified payment period. The Board of Directors has the authority to designate and/or adjust the Discount Rate, in its sole discretion, so as to maintain the rate within reasonable standards according to GAAP and applicable bank regulatory guidance.

 

1

 

 

4.          This Agreement is made in the State of Florida and shall be governed in all respects and construed in accordance with the laws of the State of Florida, without regard to its conflicts of law principles, except to the extent superseded by the Federal laws of the United States.

 

5.          Other than as amended by this Amendment, the Agreement shall remain in full force and effect in accordance with its terms and is hereby ratified and confirmed.

 

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

 

	 	
			PRIME MERIDIAN HOLDING COMPANY

			 

			 

			By:     /s/ Richard A. Weidner

			Name: Richard A. Weidner

			Title:   Chairman of the Board

			 

			
	 	
			PRIME MERIDIAN BANK

			 

			 

			By:       /s/ Richard A. Weidner

			Name:  Richard A. Weidner

			Title:    Chairman of the Board

			
	 	
			 

			 

			 

			/s/ Sammie D. Dixon, Jr.

			Sammie D. Dixon, Jr.

			

 

2

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