Document:

EX-10.1

   

  Exhibit 10.1

  INDEMNIFICATION AGREEMENT

  THE AGREEMENT is made with effect on the                          .

  BETWEEN:

  MIND MEDICINE (MINDMED) INC., a company incorporated under the Business Corporations Act (British Columbia) (hereinafter referred to as “MindMed”)

  AND:

  _____________________, of the City of                                              , in the State/Province of__________________________(hereinafter referred to as the “Indemnified Party”)

  WHEREAS:

  a.The Indemnified Party is a director or officer of MindMed; and

  b.MindMed desires to indemnify the Indemnified Party as contemplated herein.

  NOW THEREFORE, IN CONSIDERATION OF the premises and mutual covenants herein contained, and in consideration of the Indemnified Party service or continued service as a director or officer of MindMed or a MindMed Subsidiary, the receipt and sufficiency of which consideration are hereby acknowledged, MindMed and the Indemnified Party do hereby covenant and agree as follows.

  1.DEFINITIONS

  1.1 In this Agreement:

  (a)being a “director” or “officer” of a MindMed Subsidiary includes holding an equivalent position to a director or officer in a MindMed Subsidiary that is not a corporation;

  (b)“Business Corporations Act” means the Business Corporations Act (British Columbia) and its regulations, as amended or replaced from time to time;

  (c)“Business Day” means a day excluding Saturday, Sunday and any other day on which the principal commercial banks are open for business during normal banking hours in Vancouver, British Columbia;

  (d)“costs, charges and expenses” include, but are not limited to, legal and other fees, including solicitor-client fees on a full indemnity basis, but do not include judgments, penalties, fines or amounts paid in settlement of a proceeding; 

  (e)“Court” means the Supreme Court of British Columbia;

  (f)“Indemnitee” or “Indemnitees” means any or all of the Indemnified Party and his or her heirs and personal or other legal representatives;

  (g)“MindMed Subsidiary” means any corporation, partnership, trust, joint venture or other unincorporated entity or enterprise (i) which is controlled, directly or indirectly, by 

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  MindMed by reason of MindMed having the direct or indirect power to direct or cause the direction of its management and policies, whether through ownership of voting securities or otherwise, or (ii) in which the Indemnified Party is a director or officer at the written request of MindMed;

  (h)“Postal Interruption” means a cessation of normal public postal service in Canada or in any part of Canada affecting MindMed or the Indemnitees that is or may reasonably be expected to be of more than forty-eight (48) hours duration; and

  (i)“proceeding” includes any legal proceeding (including a civil, criminal, quasi-criminal, administrative or regulatory action or proceeding) or investigative action, whether current, threatened, pending or completed, and includes specifically any such proceeding or action brought by or on behalf of MindMed or any MindMed Subsidiary.

  2.AGREEMENT TO SERVE

  2.1 The Indemnified Party agrees to serve or continue to serve as a director or officer of MindMed. If requested by MindMed in writing, and provided it is agreeable to the Indemnified Party, the Indemnified Party also agrees to become and serve as an officer of MindMed or a director or officer of any MindMed Subsidiary designated by MindMed. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any enterprise) and Indemnitee. Indemnitee specifically acknowledges that any employment with the Company (or any of its subsidiaries or any enterprise) is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, with or without notice, except as may be otherwise expressly provided in any executed, written employment contract between Indemnitee and the Company (or any of its subsidiaries or any enterprise), any existing formal severance policies adopted by the Company’s board of directors or, with respect to service as a director or officer of the Company, the Company’s articles or the Business Corporations Act (British Columbia).

  3.iNDEMNIFICATION

  3.1 Except as otherwise provided herein, MindMed agrees to indemnify and save harmless the Indemnitees to the fullest extent authorized by law, including but not limited to that permitted under the Business Corporations Act, from and against all judgments, penalties and fines awarded or imposed in, and all amounts paid in settlement of, any proceeding in which any of the Indemnitees:

  (a)are or may be joined as a party, or 

  (b)are or may be liable for or in respect of a judgment, penalty or fine in, or costs, charges and expenses related to, such proceeding, 

  1.by reason of the Indemnified Party being or having been a director or officer of MindMed or a MindMed Subsidiary, and all other costs, charges and expenses, actually and reasonably incurred by the Indemnitees in respect of a proceeding identified in this Section 3.1, provided that:

  (c)in relation to the subject matter of the proceeding, the Indemnified Party acted honestly and in good faith with a view to the best interests of MindMed or the MindMed Subsidiary, as applicable; and

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  (d)in the case of a proceeding other than a civil proceeding, the Indemnified Party had reasonable grounds for believing that his or her conduct in respect of which the proceeding was brought was lawful.

  3.2 To the extent permitted by law, at the request of the Indemnitees, MindMed will promptly pay all costs, charges and expenses actually and reasonably incurred by the Indemnitees in respect of a proceeding identified in Section 3.1 as they are incurred in advance of the final disposition of that proceeding, on receipt of the following:

  (a)a written undertaking by or on behalf of the Indemnitees to repay such amount(s) if it is ultimately determined by the Court or other court or tribunal of competent jurisdiction that the Indemnitees are not entitled to be indemnified in respect of that proceeding by MindMed under this Agreement; and

  (b)satisfactory evidence as to the amount of such costs, charges and expenses.

  3.3 The written certification of an Indemnitee, together with a copy of a receipt or a statement indicating the amount paid, or to be paid, by that Indemnitee, will constitute satisfactory evidence of any costs, charges and expenses for the purposes of Section 3.2.

  3.4 Without limiting the generality of Section 3.1, MindMed agrees, to the extent permitted by law, that the indemnities provided herein will include all costs, charges, expenses, judgments, settlement amounts, fees, fines, penalties, losses, damages or liabilities arising by operation of statute, rule, regulation or ordinance or otherwise at law and incurred by or imposed upon the Indemnitees in relation to the affairs of MindMed or any MindMed Subsidiary by reason of the Indemnified Party being or having been a director or officer thereof, including but not limited to, any statutory obligations or liabilities that may arise to creditors, employees, suppliers, contractors, subcontractors, or any government or agency or division of any government, whether federal, provincial, state, regional or municipal.

  3.5 Notwithstanding any other provision herein to the contrary, MindMed will not be obligated under this Agreement to indemnify the Indemnitees:

  (a)in respect of matters with respect to which the Indemnitees must not be indemnified under this Agreement or the Business Corporations Act, or in respect of liability that the Indemnified Party may not be relieved from under the Business Corporations Act or otherwise at law, unless in any of those cases the Court has made an order authorizing the indemnification;

  (b)with respect to any proceeding initiated or brought voluntarily by the Indemnified Party or in which he or she is joined as a plaintiff without the written agreement of MindMed, except for any proceeding brought to establish or enforce a right to indemnification under this Agreement or any statute, regulation, rule or law; 

  (c)for any costs, charges, expenses, fees, losses, damages or liabilities which have been paid to, or on behalf of, the Indemnitees under any applicable policy of insurance or any other arrangements maintained or made available by MindMed or any MindMed Subsidiary for the benefit of its respective directors or officers and, for greater certainty, the indemnity provided hereunder will only apply with respect to any costs, charges, expenses, fees, losses, damages or liabilities which the Indemnitees may suffer or incur which would not otherwise be paid or satisfied under such insurance or other arrangements maintained or made available by MindMed or such MindMed Subsidiary;

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  (d)in connection with any proceeding for which payment has actually been made to or on behalf of Indemnitee under any statute, insurance policy, indemnity provision, vote or otherwise, except with respect to any excess beyond the amount paid;

  (e)in connection with any proceeding for an accounting or disgorgement of profits pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of federal, state or local statutory law or common law, if Indemnitee is held liable therefor (including pursuant to any settlement arrangements);

  (f)in connection with any proceeding for any reimbursement of MindMed by Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities of MindMed, as required in each case under the Securities Exchange Act of 1934, as amended (including any such reimbursements that arise from an accounting restatement of MindMed pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to MindMed of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act), if Indemnitee is held liable therefor (including pursuant to any settlement arrangements), or

  (g)in connection with any proceeding initiated by Indemnitee, including any proceeding (or any part of any proceeding) initiated by Indemnitee against MindMed or its directors, officers, employees, agents or other indemnitees, unless (i) MindMed’s board of directors authorized the proceeding (or the relevant part of the proceeding) prior to its initiation or (ii) MindMed provides the indemnification, in its sole discretion, pursuant to the powers vested in MindMed under applicable law.

  3.6 If the Indemnitee is determined to be entitled under any provisions of this Agreement to indemnification by MindMed for some or a portion of the costs, charges and expenses or the judgments, penalties and fines awarded or imposed in, or paid in settlement in respect of any proceeding but not for the total amount thereof, MindMed shall nevertheless indemnify the Indemnitee for the portion thereof to which the Indemnitee is determined by a court of competent jurisdiction to be so entitled to indemnification.

  4.DENIAL OF INDEMNIFICATION

  4.1 If a claim for indemnification under this Agreement is not paid in full by MindMed:

  (a)in the case of a claim under Section 3.2, within thirty (30) days,

  (b)in any other case, within sixty (60) days

  after a written claim in compliance with all requirements under this Agreement therefor has been received by MindMed and any applicable approval of the Court has been obtained where required, whichever is later, the Indemnitees may any time thereafter bring suit against MindMed to recover the unpaid amount of the claim and if successful in whole or in part, the Indemnitees will also be entitled to be paid all expenses of prosecuting such claim.  It will be a defence to any such action that the Indemnified Party has not met the standards of conduct which make it permissible under Section 3.1 of this Agreement or applicable law for MindMed to indemnify the Indemnitees for the amount claimed, but the burden of proving such defence will be on MindMed.  Notwithstanding the foregoing, no suit shall be brought under the provisions of this Section 4.1 until after the expiration of sixty (60) days from the date when MindMed first receives notice of the proceeding in respect of which the claim for indemnification is made.

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  5.Conduct of Defence

  5.1 Promptly after receiving notice from any of the Indemnitees of any proceeding identified in Section 3.1, MindMed may, and upon the written request of the Indemnitees will, promptly assume conduct of the defence thereof and, at MindMed’s expense, retain counsel on behalf of the Indemnitees who is reasonably satisfactory to the Indemnitees, to represent the Indemnitees in respect of the proceeding.  If MindMed assumes conduct of the defence on behalf of the Indemnitees, the Indemnified Party hereby consents to the conduct thereof and to any action taken by MindMed, in good faith, in connection therewith, and the Indemnified Party will fully cooperate, and the obligations of MindMed under this Agreement with respect to the proceeding are conditional on the other Indemnitees providing the same consent as the Indemnified Party and fully cooperating, in such defence including, without limitation, the provision of documents, attending examinations for discovery, making affidavits, meeting with counsel, testifying and divulging to MindMed all information reasonably required to defend or prosecute the proceeding.

  5.2 In connection with any proceeding in respect of which the Indemnitees may be entitled to be indemnified hereunder, the Indemnitees will have the right to employ separate counsel of their choosing and to participate in the defence thereof but the fees and disbursements of such counsel will be at the expense of the Indemnitees unless:

  (a)the Indemnitees reasonably determine that there are legal defences available to the Indemnitees that are different from or in addition to those available to MindMed or any MindMed Subsidiary, as the case may be, or that a conflict of interest exists which makes representation by counsel chosen by MindMed not advisable;

  (b)MindMed has not assumed the defence of the proceeding and employed counsel therefor reasonably satisfactory to the Indemnitees within a reasonable period of time after receiving notice thereof; or

  (c)employment of such other counsel has been authorized in writing by MindMed;

  in which event the reasonable fees and disbursements of such counsel will be paid by MindMed, subject to the terms hereof.

  5.4 No admission of liability and no settlement of any proceeding by MindMed in a manner adverse to the Indemnitees will be made without the consent of the Indemnitees, such consent not to be unreasonably withheld.  No admission of liability will be made by the Indemnitees without the consent of MindMed and MindMed will not be liable for any settlement of any proceeding made without its consent, such consent not to be unreasonably withheld.

  6.SUBROGATION

  6.1 In the event of any payment under a MindMed policy of insurance, the Indemnitee agrees that the insurer making such payment shall be subrogated to all of the Indemnitee’s rights of recovery and the Indemnitee shall execute all papers required and shall do everything necessary to secure and preserve such rights of recovery, including the execution of such documents necessary to enable the subrogated insurer effectively to bring suit in the name of the Indemnitee.

  7.COURT APPROVAL

  7.1 In the event of any claim for indemnification hereunder where Court approval is required before payment of an indemnity or the advancement of funds may be made by MindMed, MindMed will, if 

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  determined by its Board of Directors, promptly and with reasonable efforts apply to the Court for an order approving the payment of an indemnity, or the advancement of funds to, the Indemnitees.  If the Board of Directors determines not to authorize the application for Court approval in any such case, or if MindMed fails to pursue any such application promptly and with reasonable efforts, the Indemnitees shall be entitled to apply for such Court approval.

  8.TAXES PAYABLE

  8.1 MindMed agrees to reimburse the Indemnitees for all taxes payable by the Indemnitees under the taxing laws of any jurisdiction, should the reimbursement of costs, charges and expenses under this Agreement, including this Section 8.1, constitute a taxable benefit to the Indemnitees.

  9.NO PRESUMPTIONS AS TO ABSENCE OF GOOD FAITH

  9.1 Termination of any proceedings by judgment, order, settlement or conviction, or upon a plea of “nolo contendere” or its equivalent, will not, of itself, create any presumption for the purposes of this Agreement that the Indemnified Party did not act honestly and in good faith with a view to the best interests of MindMed or a MindMed Subsidiary, as the case may be, or, in the case of a proceeding (other than a civil proceeding) that is enforced by monetary penalty, that he or she did not have reasonable grounds for believing that his or her conduct was lawful (unless the judgment or order of a court or other tribunal of competent jurisdiction in the matter specifically finds otherwise.)  Neither the failure of MindMed (including its Board of Directors, independent legal counsel or its shareholders) to have made a determination that indemnification of the Indemnitees is proper in the circumstances because the Indemnified Party has met the applicable standard of conduct, nor an actual determination by MindMed (including its Board of Directors, independent legal counsel or its shareholders) that the Indemnified Party has not met such applicable standard of conduct, will be a defence to any action brought by the Indemnitees against MindMed to recover the amount of any indemnification claim, nor create a presumption that the Indemnified Party has not met the applicable standard of conduct.

  10.RESIGNATION

  10.1 Nothing in this Agreement will prevent or restrict the Indemnified Party from, at any time, changing his or her title or position within MindMed or any MindMed Subsidiary or from resigning as a director or officer of MindMed or any MindMed Subsidiary.

  11.DEATH OF INDEMNIFIED PARTY

  11.1 For greater certainty, if the Indemnified Party is deceased and is or becomes entitled to indemnification under any of the provisions of this Agreement, MindMed agrees to indemnify and hold harmless the Indemnified Party’s estate and his or her heirs and personal or other legal representatives to the same extent as it would indemnify the Indemnified Party, if alive, hereunder, and such estate, heirs and personal or other representatives will be bound by the same covenants and obligations as the Indemnified Party is bound hereunder.

  12.OTHER RIGHTS AND REMEDIES

  12.1 The indemnification provided for in this Agreement will not derogate from, exclude or reduce any other rights or remedies, in law or in equity, to which the Indemnitees may be entitled by operation of law or under any statute, rule, regulation or ordinance or by virtue of any available insurance coverage, including, but not limited to the following:

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  (a)the Business Corporations Act;

  (b)the articles of MindMed or the constating documents of a MindMed Subsidiary; or

  (c)any vote of the shareholders of MindMed,

  both as to matters arising out of the capacity of the Indemnified Party as a director or officer of MindMed or a MindMed Subsidiary or as to matters arising out of another capacity of the Indemnified Party with MindMed or any MindMed Subsidiary, while being a director or officer of MindMed or any MindMed Subsidiary, or as to matters arising by reason of his or her being or having been at the request of MindMed, a director, officer or employee of any other legal entity of which MindMed is or was an equity owner or creditor.

  13.NOTICE OF PROCEEDING

  13.1 The Indemnified Party agrees that the Indemnitees shall use their reasonable efforts to give written notice to MindMed within five (5) days of being served with any statement of claim, writ, notice of motion, information, indictment or other document commencing or continuing any proceedings against any of the Indemnitees as a party, provided that, the failure by the Indemnified Party to so notify MindMed shall not relieve MindMed from any liability under this Agreement except to the extent that such failure prejudices MindMed. 

  14.INDEMNITEES TO CO-OPERATE

  14.1 The Indemnified Party agrees to provide, and the obligations of MindMed under this Agreement are conditional on the Indemnitees providing MindMed and its insurers with such information and co-operation as MindMed may reasonably require from time to time in respect of all matters hereunder.

  14.2 MindMed agrees to provide such information and co-operation to the Indemnitees as the Indemnitees may reasonably require from time to time in respect of all matters hereunder, provided that the Indemnitees shall maintain all such information in strictest confidence except to the extent necessary for the Indemnitees’ defence.  Nothing contained herein shall limit the right of MindMed to refrain from disclosure of any such information to the Indemnitees in order to protect legal privilege (solicitor/client, litigation or otherwise).

  15.EFFECT OF AGREEMENT

  15.1 This Agreement has effect from the date as set forth on the first page hereof with respect to any proceedings threatened or made against the Indemnitees after the date hereof. 

  16.Insolvency

  16.1 It is the intention of the parties hereto that this Agreement and the obligations of MindMed will not be affected, discharged, impaired, mitigated or released by reason of any bankruptcy, insolvency, receivership or other similar proceeding of creditors of MindMed and that in such event any amount owing to the Indemnitees hereunder will be treated in the same manner as the other fees or expenses of the directors and officers of MindMed.

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  17.TERMINATION

  17.1 The obligations of MindMed will not terminate or be released upon the Indemnified Party ceasing to be a director or officer of MindMed or any MindMed Subsidiary at any time or times and will survive and remain in full force and effect unless, in being a director or officer of a MindMed Subsidiary, the Indemnified Party is no longer doing so at the request or on behalf of MindMed.  

  18.NOTICE

  18.1 Any notice or other communication required or permitted to be given hereunder will be in writing and will be sufficiently given if delivered (either hand delivered or sent by registered mail, all charges prepaid) or if transmitted by email, 

  (a)in the case of notice to MindMed at:

  Suite 1700, The Guinness Tower

  1055 West Hastings Street

  Vancouver, BC V6E 2E9

   

  Attention: [ * ]

  Phone:  [ * ]

  Email: [ * ]

  (b)in the case of notice to the Indemnified Party, to:

   

  		
	 

	[NAME]

	 
	 

	Address:
	 

	 
	 

	 

	 

	 

	 
	 

	Phone:
	 

	Email:
	 

   

  18.2 Any notice or other communication will be deemed to be given and received: (a) in the case of registered mail, on the fourth (4th) Business Day following the day of mailing, provided there is no Postal Interruption at the time of mailing or at any time during the five days either preceding or following the day of mailing in which case any such notice or communication will be deemed to be received only upon actual receipt thereof; and (b) in the case of hand delivery or transmission by email, on the day it is delivered or transmitted, provided that it is delivered or transmitted on a Business Day prior to 5:00 p.m. local time in the place of delivery or receipt and if the notice is delivered or transmitted after 5:00 p.m. local time or if such day is not a Business Day, then the notice shall be deemed to have been given and received on the next Business Day.

  18.3 Any party hereto may, from time to time, modify or change its address by providing written notice to the other party, and thereafter the address as modified or changed will be deemed to be the address of the person specified above.

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  19.sevERABILITY

  19.1 If any portion of a provision or provisions of this Agreement is held to be invalid, illegal or unenforceable, in whole or in part, for any reason whatsoever:

  (a)the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, all portions of any Sections of this Agreement containing any such provision held to be invalid, illegal or unenforceable that are not of themselves in the whole invalid, illegal or unenforceable) will not in any way be affected or impaired thereby; and

  (b)to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any Sections of this Agreement containing any such provisions held to be invalid, illegal or unenforceable) will be construed so as to give effect to the intent manifested by the provision which is held to be invalid, illegal or unenforceable.

  20.PROPER LAW AND ATTORNMENT

  20.1 This Agreement and all matters arising herein or therefrom, including the capacity, form, essentials and performance of this Agreement, will be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein.

  20.2Each of the parties, by the execution and delivery of this Agreement, irrevocably and unconditionally, with respect to any matter or thing arising out of or pertaining to this Agreement, attorns, submits to and accepts, for itself and in respect of its assets, the jurisdiction of the courts of the Province of British Columbia.

  21.MODIFICATIONS and waivers

  21.1 No supplement, modification or amendment of this Agreement will be binding unless executed in writing by both of the parties hereto.  For greater certainty, the rights of the Indemnified Party under this Agreement shall not be prejudiced or impaired by permitting or consenting to any assignment in bankruptcy, receivership, insolvency or any other creditor’s proceedings of or against MindMed or by the winding-up or dissolution of MindMed or any MindMed Subsidiary.

  21.2 This Agreement and the obligations of MindMed hereunder will not be affected, discharged, impaired, mitigated or released by reason of any waiver, extension of time or indulgence by the Indemnitees of any breach or default in performance by MindMed of any terms, covenants, conditions of this Agreement, nor will any waiver, indulgence or extension of time constitute a waiver of:

  (a)any other provisions hereof (whether or not similar), or

  (b)any subsequent or continuing breach or non-performance,

  2.nor will the failure by the Indemnitees to assert any of their rights or remedies hereunder in a timely fashion be construed as a waiver or acquiescence and will not affect the Indemnitees’ right to assert any such right thereafter.

  22.Multiple PRoceedings

  22.1 No action or proceeding brought or instituted under this Agreement and no recovery pursuant thereto shall be a bar or defence to any further action or proceeding which may be brought under this Agreement.

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  23.ENTIRE AGREEMENT

  23.1 This Agreement will supersede and replace any and all prior or contemporaneous agreements between the parties (except any written agreement of employment between MindMed and/or a MindMed Subsidiary and the Indemnified Party, which agreement of employment, if in existence, will remain in full and effect except to the extent augmented or amended herein) and discussions between the parties hereto respecting the matters set forth herein, and will constitute the entire agreement between the parties hereto with respect to the matters set forth herein.  

  24.SUCCESSORS AND ASSIGNS

  24.1 This Agreement and the benefits and obligations of all covenants herein contained will be binding upon and enure to the benefit of MindMed, its successors and assigns, and the Indemnified Party, his or her heirs and personal or other legal representatives.

  25.FURTHER ASSURANCES

  25.1 Each of the parties hereto will at all times and from time to time hereafter and upon every reasonable written request so to do, make, do, execute, deliver or cause to be made, done, executed and delivered all such further acts, deeds, assurances and things as may be reasonably required for more effectually implementing and carrying out the provisions and the intent of this Agreement.

  26.INDEPENDENT LEGAL ADVICE

  26.1 The Indemnified Party acknowledges that the Indemnified Party has been advised to obtain independent legal advice with respect to entering into this Agreement, that the Indemnified Party has obtained such independent legal advice or has expressly determined not to seek such advice, and that the Indemnified Party is entering into this Agreement with full knowledge of the contents hereof, of the Indemnified Party’s own free will and with full capacity and authority to do so.

  27.INTERPRETATION

  27.1 Headings will not be used in any way in construing or interpreting any provision hereof.

  27.2 Whenever the singular or masculine or neuter is used in this Agreement, the same will be construed as meaning plural or feminine or body politic or corporate or vice versa, as the context so requires.

  27.3 Words such as herein, therefrom, and hereinafter reference and refer to the whole Agreement, and are not restricted to the Section or paragraph in which they appear.

   

  [Signature page follows]

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  IN WITNESS WHEREBY the parties hereto have executed this Agreement as of the date first above written.

   

  		
	MIND MEDICINE (MINDMED) INC.

	 
	 

	By:
	 

	 
	 

	 
	Name:

	 
	 

	 
	Title:

	 
	 

	 
	 

	 
	 

	 
	 

	 
	[Indemnified Party Name]EX-10.2

   

  Exhibit 10.2

  MIND MEDICINE (MINDMED) INC. 

   

  STOCK OPTION PLAN

   

  1.Interpretation

  In this Plan, the following terms shall have the following meanings:

  “Administrators” means the Board or, if so designated by the Board to administer the Plan, the Compensation Committee of the Board or any other designated members of the Board;

  “Associate” has the meaning assigned by the Securities Act (Ontario);

  “Board” means the Board of Directors of the Corporation;

  “Cause” means, in respect of a Participant:

   

  (a)conviction of, or the entry of a plea of guilty or no contest to, any criminal or quasi-criminal offence that causes the Corporation or its Subsidiaries public disgrace or disrepute, or adversely affects the Corporation’s or its Subsidiaries’ operations or financial performance;

  (b)gross negligence or wilful misconduct with respect to the Corporation or any of its Subsidiaries in the course of his or her service to the Corporation of any of its Subsidiaries;

  (c)refusal, failure or inability to perform any material obligation or fulfil any duty (other than any duty or obligation of the type described in clause (e) below) to the Corporation or any of its Subsidiaries (other than due to disability), which failure, refusal or inability is not cured within 10 days after delivery of notice thereof;

  (d)material breach of any agreement with or duty owed to the Corporation or any of its Subsidiaries;

  (e)any breach of any obligation or duty to the Corporation or any of its Subsidiaries (whether arising by statute, common law, contract or otherwise) relating to confidentiality, non-competition, non-solicitation or proprietary rights; or

  (f)any other conduct that constitutes “cause” at common law.

  Notwithstanding the foregoing, if a Participant and the Corporation (or any of its Subsidiaries) have entered into an employment agreement, consulting agreement or other similar agreement that specifically defines “cause”, then, with respect to such Participant, “Cause” shall have the meaning defined in that employment agreement, consulting agreement or other agreement.

  “Change in Control” means, the occurrence of any of the following, in one transaction or a series of related transactions: 

   

  (a)the acquisition by any person or persons acting jointly or in concert (as determined by the Securities Act (Ontario)), whether directly or indirectly, of voting securities of the Corporation that, together with all other voting securities of the Corporation held by such 

  114227284v1 

  

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  person or persons, constitute in the aggregate more than 50% of the voting power attached to all outstanding voting securities of the Corporation; 

  (b)an amalgamation, arrangement, consolidation, share exchange or other form of business combination of the Corporation with another entity that results in the holders of voting securities of that other entity holding, in the aggregate, more than 50% of the voting power attached to all outstanding voting securities of the entity resulting from the business combination;

  (c)the sale, lease or exchange of all or substantially all of the property of the Corporation or any of its Subsidiaries to another person, other than in the ordinary course of business of the Corporation and other than such sale, lease or exchange to a wholly-owned subsidiary of the Corporation;

  (d)the liquidation or dissolution of the Corporation; or 

  (e)any other transaction that is deemed by the Administrators in their sole discretion to be a “Change in Control” for the purposes of the Plan;

  “Code” means the United States Internal Revenue Code of 1986 as amended, and the rulings and regulations in effect thereunder;

  “Corporation” means Mind Medicine (MindMed) Inc. (formerly Broadway Gold Mining Ltd.);

  “Event of Termination” means the voluntary or involuntary termination of employment or service, retirement, or leaving of employment or service because of disability or death of a Participant;

  “Fair Market Value” means the closing price of the Shares on the NEO Exchange (or, if the Shares are not then listed on the NEO Exchange, on such other stock exchange or automated quotation system on which the Shares are then listed or quoted, as the case may be, as may be selected by the Administrators for such purpose) on the last trading day on which Shares traded prior to the day on which an Option is granted (in the case of an Option grant) or on the last trading day on which Shares traded prior to the day on which Shares are to be valued for the purpose of the Plan, as applicable, provided that if no Shares traded on such date, the Fair Market Value shall be the average of the independent bid and ask prices in respect of the Shares at the close of trading on such date; 

  “Insider Participant” means a Participant who is (a) an insider of the Corporation as defined in the Securities Act (Ontario), and (b) an Associate of any person who is an insider by virtue of (a);

  “ISO” means a stock option that is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code;

  “Multiple Voting Shares” means the multiple voting shares of the Corporation, each of which carries 100 votes and is convertible, in certain limited circumstances, into 100 Subordinate Voting Shares;

  “NEO Exchange” means Neo Exchange Inc.;

  “Option Agreement” means the written agreement between a Participant and the Corporation, in the form approved by the Administrators, evidencing the terms and conditions on which an Option has been granted under the Plan and which need not be identical to any other such agreements;

   

  

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  “Options” means options granted under the Plan to purchase Shares;

  “Participant” means such directors, officers and employees of the Corporation or its Subsidiaries and such Service Providers as are designated by the Administrators to participate in the Plan; 

  “Plan” means this Stock Option Plan;

  “Reserved for Issuance” refers to Shares which may be issued in the future, upon the exercise of Options which have been granted;

  “Service Provider” means any person or company engaged to provide ongoing management or consulting services for the Corporation or for any entity controlled by the Corporation;

  “Share Compensation Arrangement” means, in respect of the Corporation, a stock option, stock option plan, employee stock purchase plan, performance share unit plan, restricted share unit plan or any other compensation or incentive mechanism involving the issuance or potential issuance of Shares to directors, officers or employees of the Corporation or its Subsidiaries or to Service Providers;

  “Shares” means the subordinate voting shares of the Corporation; 

  “Subsidiary” has the meaning assigned thereto in the Securities Act (Ontario) and “Subsidiaries” shall have a corresponding meaning but including unincorporated entities;

  “United States” or “U.S.” means the United States of America, its territories and possessions, any state of the United States and the District of Columbia; 

  “U.S. Exchange Act” means the United States Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder; and

  “U.S. Securities Act” means the United States Securities Act of 1933, as amended and the rules and regulations promulgated thereunder.

  3.Purpose

  The purpose of the Plan is to advance the interests of the Corporation and its Subsidiaries and its shareholders by providing to the directors, officers and employees of the Corporation and its Subsidiaries and Service Providers a performance incentive for continued and improved service with the Corporation and its Subsidiaries and by enhancing such persons’ contribution to increased profits by encouraging capital accumulation and share ownership.

  4.Shares Subject to the Plan

  The securities subject to the Plan shall be Shares. The Shares for which Options are granted shall be authorized but unissued Shares. The aggregate number of Shares that are issuable under the Plan upon the exercise of Options which have been granted and are outstanding under the Plan, together with Shares that are issuable pursuant to outstanding awards or grants under any other Share Compensation Arrangement, shall not at any time exceed 15% of the Shares then issued and outstanding, subject to adjustment as provided in Section 14 to give effect to any relevant changes in the capitalization of the Corporation, and provided that for the purpose of such calculation, the number of Shares then issued and outstanding shall include the number of Shares issuable upon conversion of the then issued and outstanding Multiple Voting Shares. Shares in respect of which Options have been granted but which are forfeited, 

   

  

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  surrendered, cancelled or otherwise terminated or expire without being exercised shall be available for subsequent Options. 

  5.Administration of the Plan

  The Plan shall be administered by the Administrators. Subject to the provisions of the Plan, the Administrators shall have the power and authority to:

  (a)adopt rules and regulations for implementing the Plan;

  (b)determine the eligibility of persons to participate in the Plan, when Options to eligible persons shall be granted, the number of Shares subject to each Option and, pursuant to Section 12, the vesting period for each Option;

  (c)interpret and construe the provisions of the Plan;

  (d)establish the form or forms of Option Agreement(s); 

  (e)determine whether each Option is to be an ISO, in which case such Option shall be subject to the limitations in Sections 8 and 11;  

  (f)in the event there is any question as to whether a Change in Control has occurred in any circumstances, determine whether a Change in Control has occurred; 

  (g)take such other steps as they determine to be necessary or desirable to give effect to the Plan; and

  (h)grant waivers of Plan conditions.

  All decisions made by the Administrators pursuant to the provisions of the Plan will be final and binding on the Corporation, the affected Participant(s), their legal and personal representatives and all other persons. 

  6.Eligible Persons

  Such directors, officers and employees of the Corporation and its Subsidiaries and such Service Providers as are designated by the Administrators shall be entitled to participate in the Plan.

  7.Agreement

  All Options granted hereunder shall be evidenced by an Option Agreement.  Each Option Agreement will be subject to the applicable provisions of the Plan and will contain such provisions as are required by the Plan any other provisions that the Administrators may direct. 

  8.Grant of Options

  Subject to Sections 3 and 8, the Administrators may, from time to time, grant Options to Participants to purchase that number of Shares that the Administrators, in their absolute discretion, determine. Options that may be granted under the Plan include ISOs and non-qualified stock options. No Option will be granted during a blackout period or other trading restriction imposed by the Corporation or at any other time when the Board or the Corporation has any undisclosed material information.

   

  

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  The Administrator shall not grant Options to residents of the United States unless such Options and the Shares issuable upon exercise thereof are registered under the U.S. Securities Act or are issued in compliance with an available exemption from the registration requirements of the U.S. Securities Act.

  9.Limit on Issuance of Shares

  The aggregate number of Shares Reserved for Issuance pursuant to Options granted under the Plan and options or other entitlements granted under any other Share Compensation Arrangement to Insider Participants (as a group), shall not exceed 10% of the aggregate number of Shares outstanding; provided that: (i) for the purpose of such calculation, the number of Shares outstanding shall include the number of Shares issuable upon conversion of the then issued and outstanding Multiple Voting Shares; and (ii) no more than 20,478,098 Shares under the Plan may be granted as ISOs. Within any 1-year period, the aggregate number of Shares issued to Insider Participants (as a group) pursuant to Options granted under the Plan or options or other entitlements granted under any other Share Compensation Arrangement shall not exceed 10% of the aggregate number of Shares outstanding, provided that for the purpose of such calculation, the number of Shares outstanding shall include the number of Shares issuable upon conversion of the outstanding Multiple Voting Shares.

  In addition to the foregoing limits, (i) the maximum aggregate grant date fair value using the Black-Scholes-Merton valuation model of option grants to any non-employee director of the Corporation in any fiscal year of the Corporation shall not exceed $100,000; and (ii) no grant of Options under the Plan may be made to any non-employee director if such grant could result, together with awards or grants then outstanding under the Plan and any other Share Compensation Arrangement, in the issuance to non-employee directors as a group of a number of Shares exceeding 1% of the number Shares issued and outstanding immediately prior to any such Share issuance, provided that for the purpose of such calculation, the number of Shares issued and outstanding shall include the number of Shares issuable upon conversion of the issued and outstanding Multiple Voting Shares.

  10.Exercise Price

  The exercise price per Share shall be not less than the Fair Market Value of the Shares on the date the Option is granted.

  11.Term of Option

  The term of each Option shall be determined by the Administrators, provided that no Option shall be exercisable after ten years from the date on which it is granted. If the expiry date of a particular Option after which it can no longer be exercised falls on, or within nine trading days immediately following, a date upon which the Participant granted the Option is prohibited from trading in securities of the Corporation due to a blackout period or other trading restriction imposed by the Corporation, then, except with respect to ISOs, the expiry date of such Option shall be automatically extended to the tenth trading day following the date the relevant blackout period or other trading restriction imposed by the Corporation is lifted, terminated or removed.

   

  

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  12.ISOs

  The following provisions shall apply, in addition to the other provisions of this Plan which are not inconsistent therewith, to ISOs, which are intended to qualify as “incentive stock options” under Section 422 of the Code:

  (a)Options may be granted as ISOs only to individuals who are employees of the Corporation or any present or future “subsidiary corporation” or “parent corporation” as those terms are defined in Section 424 of the Code (collectively, for purposes of this Section 11, “Related Entities”) and Options shall not be granted as ISOs to non‐employee directors or independent contractors;

  (b)“Disability” in respect of an ISO shall mean “permanent and total disability” as defined in sub-section 22(e)(3) of the Code;

  (c)if a Participant ceases to be employed by the Corporation and/or all Related Entities other than by reason of death or Disability, Options shall be eligible for treatment as ISOs only if exercised no later than three (3) months following such termination of employment;

  (d)the exercise price in respect of Options granted as ISOs to employees who own more than 10% of the combined voting power of all classes of shares of the Corporation or a Related Entity (for purposes of this Section 11, a “10% Shareholder”) shall be not less than 110% of the Fair Market Value per Share on the Option grant date and the term of any ISO granted to a 10% Shareholder shall not exceed five (5) years measured from the Option grant date;

  (e)Options held by a Participant shall be eligible for treatment as ISOs only if the Fair Market Value (determined at the Option grant date) of the Shares with respect to which such Options and all other options intended to qualify as “incentive stock options” under Section 422 of the Code held by such Participant and granted under this Plan or any other plan of the Corporation or a Related Entity and which are exercisable for the first time by such Participant during any one calendar year does not exceed US$100,000 at such time;

  (f)by accepting an Option granted as an ISO under this Plan, a Participant agrees to notify the Corporation in writing immediately after such Participant makes a “Disqualifying Disposition” of any Shares acquired pursuant to the exercise of such ISO; for this purpose, a “Disqualifying Disposition” is any disposition occurring on or before the later of (i) the date two years following the date that such ISO was granted or (ii) the date one year following the date that such ISO was exercised;

  (g)no ISO granted under this Plan may be exercised until this Plan is approved by the Corporation’s shareholders; furthermore, the maximum number of Shares that may be issued as ISOs shall not be increased without additional shareholder approval; and   

  (h)no modification of an outstanding Option that would provide an additional benefit to a Participant, including a reduction of the exercise price or extension of the period in which the Option can be exercised, in either case, if approved by shareholders of the Corporation in accordance with Section 22, shall be made without consideration and disclosure of the likely United States federal income tax consequences to the Participants affected thereby.

   

  

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  13.Shares Available for Purchase

  Subject to Sections 15 and 16, the Shares subject to each Option shall vest and become available for purchase by the Participant on the date or dates determined by the Administrators when the Option is granted.

  14.Exercise of Option

  Subject to Section 12, an Option may be exercised in whole or in part at any time, or from time to time during the term of the Option. A Participant electing to exercise an Option shall give written notice of the election to the Administrators. Such notice will be accompanied by payment in full of the aggregate purchase price for the Shares issuable pursuant to the exercise of the Option, either:

  (a)by cash, certified cheque or bank draft or wire transfer;

  (b)if approved by the Administrators, and except with respect to ISOs, through means of a “net settlement,” whereby no exercise price will be due and where the number of Shares issued upon such exercise will be equal to: (A) the product of (l) the number of Shares as to which the Option is then being exercised, and (2) the difference between (x) the then current Fair Market Value per Share and (y) the exercise price per Share, divided by (B) the then current Fair Market Value per Share. A number of Shares equal to the difference between the number of Shares as to which the Option is then being exercised and the number of Shares actually issued to the Participant upon such net settlement will be deemed to have been received by the Corporation in satisfaction of the exercise price;

  (c)if approved by the Administrators, through an arrangement with a broker approved by the Corporation (or through an arrangement directly with the Corporation) whereby payment of the exercise price is accomplished with the proceeds of the sale of Shares deliverable upon the exercise of the Option; or

  (d)by such other method as the Administrators may approve or accept.

  No Shares will be issued upon exercise of an Option until full payment therefor has been made.  No person shall enjoy any part of the rights or privileges of a holder of Shares subject to Options until that person becomes the holder of record of those Shares.

  No Option holder who is resident in the United States may exercise Options unless the Shares to be issued upon exercise are registered under the U.S. Securities Act or are issued in compliance with an available exemption from the registration requirements of the U.S. Securities Act.

  15.Certain Adjustments

  Equitable adjustments as to Options granted or to be granted, as to the number of Shares which are available for purchase and as to the purchase price for such Shares under the Plan shall be made by the Administrators in the event of any stock dividend, stock split, combination or exchange of shares, capital reorganization, consolidation, spin-off or other distribution (other than normal cash dividends) of the Corporation’s assets to shareholders, or any other similar changes affecting the Shares.

   

  

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  16.Termination of Employment

  Unless otherwise determined by the Administrators and set forth in the Option Agreement, upon the occurrence of an Event of Termination, the Options granted to the affected Participant may be exercised in accordance with the following:

  (a)if a Participant’s service with the Corporation or, if applicable, a Subsidiary, terminates by reason of the death of the Participant, all outstanding Options shall become vested and immediately exercisable and any Option held by such Participant may thereafter be exercised by the legal representative of the estate or by the legatee of the Participant under the will of the Participant, for a period ending 12 months following the date of death (or, if sooner, on the last day of the stated term of such Option);

  (b)if a Participant’s service with the Corporation or, if applicable, a Subsidiary, is terminated for Cause: (i) any Option held by the Participant will immediately and automatically expire as of the date of such termination, and (ii) any Shares for which the Corporation has not yet delivered share certificates or other evidence of ownership will be immediately and automatically forfeited and the Corporation will refund to the Participant the Option exercise price paid for such Shares, if any; or 

  (c)if a Participant’s service with the Corporation or, if applicable, a Subsidiary, terminates for any reason other than death or Cause, any Option held by such Participant may thereafter be exercised by the Participant, to the extent it was exercisable at the time of such termination, for a period ending 90 days following the date of such termination (or, if sooner, on the last day of the stated term of such Option); 

  provided that any exercise of an Option pursuant to (c) above shall only be in respect of Shares which were available for purchase at the date of the Event of Termination in accordance with Section 12 hereof. Other than as provided in Section 15(a) above, the right to purchase Shares which have not yet become available for purchase pursuant to Section 12 shall cease immediately on the date of the Event of Termination. 

  For greater certainty, if the employment or service of a Participant is terminated by the Corporation or, if applicable, a Subsidiary, the date of such Event of Termination shall be the date specified by the Corporation or the Subsidiary, as the case may be, in the notice of termination to such Participant as the date on which such Participant’s employment or service shall cease. Neither any period of notice, if any, or any payment in lieu thereof, upon such termination of employment or service shall be considered as extending the period of employment for the purposes of the Plan.

  17.Transferability

  Subject to the terms of this Section 16 with respect to a Participant’s death, no Options may be transferred or assigned. Options may be exercised by the Participant and, upon the Participant’s death, the legal representative of his or her estate or any other person who acquires his or her rights in respect of an Option by bequest or inheritance. A person exercising an Option may subscribe for Shares only in his or her own name or in his or her capacity as a legal representative. All Options exercised during the Participant’s lifetime shall only be exercisable by the Participant or, in the event of his or her disability, by his or her personal representative.

   

  

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  18.Change in Control

  Notwithstanding anything to the contrary set forth in the Plan, upon or in anticipation of any Change in Control, the Administrators may, in their sole and absolute discretion and without the need for the consent of any Participant, take one or more of the following actions contingent upon the occurrence of that Change in Control:

  (a)cause any or all outstanding Options to become vested and immediately exercisable, in whole or in part; and/or

  (b)cause any outstanding Option to become fully vested and immediately exercisable for a reasonable period in advance of the Change in Control and, to the extent not exercised prior to that Change in Control, cancel that Option upon closing of the Change in Control.

  19.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.

  20.Compliance with Statutes and Regulations

  The granting of Options and the sale and delivery of Shares under the Plan shall be carried out in compliance with applicable statutes and with the regulations of governmental authorities and applicable stock exchanges. If the Administrators determine in their discretion that, in order to comply with any such statutes or regulations, certain action is necessary or desirable as a condition of or in connection with the granting of an Option or the issue or purchase of Shares under an Option, that Option may not be exercised in whole or in part unless that action shall have been completed in a manner satisfactory to the Administrators.

  In the event that the disposition of Shares acquired pursuant to the Plan is not covered by a then-current registration statement under the U.S. Securities Act, such Shares shall be restricted against transfer to the extent required by the U.S. Securities Act or regulations thereunder, and the Administrators may require a person receiving Shares pursuant to the Plan, as a condition precedent to receipt of such Shares, to represent to the Corporation in writing that the Shares acquired by such person are acquired for investment only and not with a view to distribution and that such person will not dispose of the Shares so acquired in violation of U.S. federal, state or other applicable securities laws, and furnish such information as may, in the opinion of legal counsel to the Corporation, be appropriate to permit the Corporation to issue the Shares in compliance with applicable U.S. federal, state, and other securities laws. If applicable, all certificates representing such Shares shall bear applicable legends as required by federal, state and other securities laws and the policies of the NEO Exchange.

  21.Withholding Taxes

  A Participant shall be solely responsible for all federal, provincial, state and local taxes resulting from his or her receipt of an Option, Share or other property pursuant to the Plan, except to the extent that the Corporation has, directly or indirectly, withheld cash for remittance to the statutory authorities.  In this regard, the Corporation shall be able to deduct from any payments hereunder in the form of securities or from any other remuneration otherwise payable to a Participant, or any other person pursuant to the exercise of an Option, any taxes that are required to be withheld and remitted.  Each Participant or other person receiving securities hereunder agrees to indemnify and save the Corporation harmless from any and all 

   

  

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  amounts payable or incurred by the Corporation if it is subsequently determined that any greater amount should have been withheld in respect of taxes or any other statutory withholding.

  22.Right to Employment

  Nothing contained in the Plan or in any Option granted under the Plan shall confer upon any person any rights to continued employment with the Corporation or interfere in any way with the rights of the Corporation in connection with the employment or termination of employment of any such person.

  23.Amendments to the Plan

  The Board reserves the right, in its absolute discretion, to amend, suspend or terminate the Plan, or any portion thereof, at any time without obtaining the approval of shareholders of the Corporation, subject to those provisions of applicable law and regulatory requirements (including the rules, regulations and policies of the NEO Exchange), if any, that require the approval of shareholders. Any amendment to any provision of the Plan will be subject to any required regulatory or governmental approvals. Notwithstanding the foregoing, the Corporation will be required to obtain the approval of the shareholders of the Corporation for any amendment:

  (a)providing for an increase to the maximum number Shares which may be issued under the Plan, except pursuant to the provisions of the Plan which permit the Administrators to make equitable adjustments in the event of transactions affecting the Corporation or its capital as set out in Section 14;

  (b)providing for an increase in, or the removal of, the limits on the number of Shares Reserved for Issuance to Insider Participants as set out in Section 8;

  (c)providing for an increase in, or the removal of, the limits on participation in the Plan by non-employee directors as set out in Section 8; 

  (d)providing for a reduction in the exercise price per Share for Options (for this purpose, a cancellation or termination of an Option prior to its expiry date for the purpose of re-issuing an Option to the same Participant with a lower exercise price shall be treated as an amendment to reduce the exercise price of an Option), except pursuant to the provisions of the Plan which permit the Administrators to make equitable adjustments in the event of transactions affecting the Corporation or its capital as set out in Section 14;

  (e)providing for an extension to the term of Options beyond the original expiry date, except in accordance with Section 10 in respect of blackout periods and other trading restrictions;

  (f)providing that an Option may be transferred or assigned other than for normal estate settlement purposes; 

  (g)providing for the addition of additional categories of Participants that may permit the introduction or re-introduction of non-employee directors on a discretionary basis;

  (h)that requires the approval of shareholders pursuant to Section 10.12(7) of the NEO Exchange Listing Manual; or

  (i)providing for the deletion or reduction of the range of amendments which require the approval of shareholders of the Corporation as set out in this Section 22.

   

  

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  24.No Financial Assistance

  The Corporation shall not provide financial assistance to Participants in connection with the Plan.

  25.Currency

  All references in the Plan to currency refer to Canadian dollars.

  26.Governing Law

  The Plan, and any and all determinations made and actions taken in connection with the Plan, shall be governed by and construed in accordance with the laws of the province of Ontario and the laws of Canada applicable therein.

  27.California Provisions

  Notwithstanding any provisions contained in the Plan to the contrary and to the extent required by applicable U.S. state corporate laws, U.S. federal and state securities laws, the Code, and the applicable laws of any jurisdiction in which Options are granted under the Plan, the following terms shall apply to all such Options granted to residents of the State of California, until such time as the Board amends this Section 26 or the Board otherwise provides:

  (a)Unless otherwise determined by the Board, Options may not be sold, pledged, assigned, hypothecated, or otherwise transferred in any manner other than as permitted by Rule 701 of the U.S. Securities Act or as otherwise provided in the Plan. 

  (b)If a Participant ceases to be an eligible person entitled to participate in the Plan as a result of the Participant’s disability, as such term is defined in Code Section 22(e)(3), the Participant may exercise his or her Option within such period of time as specified in the Option Agreement, which shall not be less than six months following the date of the Participant’s termination, to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement).

  (c)If a Participant dies while an eligible person entitled to participate in the Plan, the Option may be exercised within such period of time as specified in the Option Agreement, which shall not be less than six months following the date of the Participant’s death, to the extent the Option is vested on the date of death (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement) by the Participant’s designated beneficiary, personal representative, or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution.

  (d)If a Participant ceases to be an eligible person entitled to participate in the Plan by reason other than death, disability, termination for Cause, pursuant to the terms of the Plan, pursuant to the terms of a contract of employment or pursuant to the terms of the Option Agreement, such Participant may exercise his or her Option within such period of time as specified in the Option Agreement, which shall not be less than 30 days following the date of the Participant’s termination, to the extent that the Option is vested on the date of such termination (but in no event later than the expiration of the term of the Option as set forth in the Option Agreement).

   

  

  - 12 -

  (e)All Options must be granted within ten years from the date of adoption of the Plan or the date the Plan is approved by the shareholders of the Corporation, whichever is earlier.

  (f)In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spinoff, combination, repurchase, or exchange of Shares or other securities of the Corporation, or other change in the corporate structure of the Corporation affecting the Shares occurs, the Board, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Option.

  (g)The Corporation shall furnish summary financial information (audited or unaudited) of the Corporation’s financial condition and results of operations, consistent with the requirements of applicable law, at least annually to each Participant in California during the period such Participant has one or more Options outstanding, and in the case of an individual who acquired Shares pursuant to the Plan, during the period such Participant owns such Shares; provided, however, the Corporation shall not be required to provide such information if (i) the issuance is limited to key persons whose duties in connection with the Corporation assure their access to equivalent information or (ii) the Plan or any agreement complies with all conditions of Rule 701 of the U.S. Securities Act; provided that for purposes of determining such compliance, any registered domestic partner shall be considered a “family member” as that term is defined in Rule 701 of the U.S. Securities Act.

  (h)The Plan or any increase in the maximum aggregate number of Shares issuable thereunder as provided in Section 3 (the “Authorized Shares”) shall be approved by a majority of the outstanding securities of the Corporation entitled to vote by the later of (i) within twelve (12) months before or after the date of adoption of the Plan by the Board or (ii) prior to or within 12 months of the first issuance of any security pursuant to the Plan in the State of California. Shares issued prior to security holder approval of the Plan or in excess of the Authorized Shares previously approved by the security holders shall become exercisable no earlier than the date of shareholder approval of the Plan or such increase in the Authorized Shares, as the case may be, and such issuance of the Shares shall be rescinded if such security holder approval is not received in the manner described in the preceding sentence. Notwithstanding the foregoing, a “foreign private issuer”, as defined by Rule 3b-4 of the U.S. Exchange Act, as amended shall not be required to comply with this paragraph provided that the aggregate number of persons in California granted options under all Share Compensation Arrangements and issued securities under all purchase and bonus plans and agreements does not exceed 35.

  28.Subject to Approval

  The Plan is adopted subject to the approval of the NEO Exchange, any other required regulatory approval and the approval of the shareholders of the Corporation in accordance with the polices of the NEO Exchange. To the extent a provision of the Plan requires regulatory 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 effect. The Plan shall become effective upon the later of the date of acceptance for filing of the Plan by the NEO Exchange and the date of approval of the Plan by the shareholders of the Corporation.

   

  

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  29.Compensation Recoupment Policy

  Any granting of Options under the Plan, the exercise of Options and the issuance of Shares are subject to the Compensation Recoupment Policy of the Corporation.

  30.Section 16 of the U.S. Exchange Act

  Awards granted to Participants who are subject to Section 16 of the U.S. Exchange Act must be approved by two or more “non-employee directors” (as defined in U.S. Exchange Act Rule 16b-3).

  31.Special Provisions Applicable to U.S. Participants

  (a)This Section 30 shall only apply to a Participant who is a U.S. citizen, U.S. permanent resident or U.S. tax resident or a Participant for whom a benefit under the Plan would otherwise be subject to U.S. taxation under the Code, and the rulings and regulations in effect thereunder (a “U.S. Participant),

  (b)Options issued to U.S. Participants are intended to be exempt from Section 409A of the Code pursuant to U.S. Treasury Regulation Section 1.409A-1(b)(5)(i)(A) (“Nonstatutory Stock Options”) or Section 1.409A-1(b)(5)(ii), and such Options will be construed and administered accordingly.

  (c)Nonstatutory Stock Options may be issued to U.S. Participants under the Plan only if the Shares with respect to the Options qualify as “service recipient stock” as defined in U.S. Treasury Regulation Section 1.409A-1(b)(5)(iii).

  (d)No Option shall be granted to a U.S. Participant unless the Exercise Price of such Option shall be not less than 100% of the fair market value of a Share on the date of grant of such Option (as determined by the Administrators in a manner that satisfies the requirements of U.S. Treasury Regulation 1.409A-1(b)(5)(iv)) or, in the case of an ISO, as determined by the Administrators in a manner that satisfies Section 422 of the Code.  

  (e)Notwithstanding Section 10 of the Plan, the expiry date for any Nonstatutory Stock Option shall not be extended to the extent such extension would cause the Option to become subject to Section 409A of the Code.

  (f)Notwithstanding Section 14 of the Plan, no adjustment shall be made with respect to an Option if and to the extent such adjustment would cause the Option to become subject to Section 409A of the Code or violate Section 409A of the Code, unless the Administrators determine that such adjustment shall be made notwithstanding such result.

  (g)Each Participant is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or for the account of such Participant in connection with the Plan (including any taxes and penalties under U.S. Code Section 409A), and neither the Corporation nor any affiliate shall have any obligation to indemnify or otherwise hold such Participant or beneficiary or the Participant’s estate harmless from any or all such taxes or penalties.   

  (h)All provisions of the Plan shall continue to apply to a U.S. Participant, except to the extent that they have been specifically modified by this Section 30.

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