UNITED STATESSTATE
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
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Filed by a Party other than the Registrant [ ]
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¨ | Preliminary Proxy Statement |
¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
x | Definitive Proxy Statement |
¨ | Definitive Additional Materials |
¨ | Soliciting Material Pursuant to Rule 14a-12 |
LEXARIA CORP.Name of the Registrant as Specified In Its Charter
Lexaria Bioscience Corp. |
Name of the Registrant as Specified In Its Charter |
N/A(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
N/A |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
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Table of Contents
May 15, 2019
Dear Shareholder:
On behalf of the Board and management, we wish to extend an invitation to you to attend our 2019 annual and special shareholder meeting to be held on Thursday, June 20, 2019 at our principal executive offices located at Unit 100 – 740 McCurdy Road, Kelowna, BC V1X 2P7. The meeting will begin promptly at 1:00 p.m. PST.
In addition to the matters described in the Notice of Annual and Special Meeting of Shareholders and the Proxy Statement, we will be opening the floor for questions from the shareholders after the termination of the meeting.
The members of the Board and management hope that you will be able to attend the meeting in person, but if that is not possible please ensure that you vote your shares either by telephone, internet or mail so that your shares will be represented at the meeting.
Sincerely,
“Christopher Bunka”
Christopher Bunka
Chief Executive Officer & Chairman
LEXARIABIOSCIENCE CORP.950-1130 West Pender StreetVancouver,
100 – 740 McCurdy Road
Kelowna, BC, Canada V6E 4A4V1X 2P7
NOTICE OF ANNUAL AND SPECIAL MEETING OF STOCKHOLDERSSHAREHOLDERS
TO BE HELD ON JUNE 11, 201420, 2019
Dear Stockholder:
Our Annual MeetingNOTICE IS HEREBY GIVEN that Lexaria Bioscience Corp., a Nevada corporation (“Lexaria”, “Company”, “we”, “us”, or “our”), will hold an annual and special meeting of Stockholders will be heldshareholders (the “Meeting”) at Suite 400, 570 Granville Street, Vancouver,Unit 100 – 740 McCurdy Road, Kelowna, BC, Canada, V6C 3P1,V1X 2P7, being the mailing and delivery address of our principal executive office, at 1:00 p.m., local time, onWednesday,Thursday, June 11, 201420, 2019 for the following purposes:
| 1. | to elect |
| 2. | to ratify |
| 3. | to approve on a |
| |
| 4. | |
to | |
| 5. | to approve the new Lexaria Bioscience Corp. Equity Incentive Plan as more particularly set out in the proxy statement; and |
| 6. |
|
to transact such other business as may properly come before the Meeting or any adjournment of postponement thereof. |
These items of business are more fully described in the proxy statement accompanying this notice.notice which were first sent or given to our shareholders on or about May 22, 2019.
Our Board of Directors has fixed the close of business onApril 14, 2014May 3, 2019 as the record date (the “Record Date”) for the determination of the stockholdersshareholders entitled to notice of, and to vote at, the Annual Meeting or any adjournment thereof. Only the stockholdersshareholders of record on the record dateRecord Date are entitled to vote at the annual meeting.Meeting.
Whether or not you plan on attending the annual meeting,Meeting, we ask that you vote by proxy by following instructions provided in the enclosed proxy card as promptly as possible. If your shares are held of record by a broker, bank, or other nominee, please follow the voting instruction sent to you by your broker, bank, or other nominee in order to vote your shares.
Even if you have voted by proxy, you may still vote in person if you attend the annual meeting.Meeting. Please note, however, that if your shares are held of record by a broker, bank, or other nominee and you wish to vote at the annual meeting,Meeting, you must obtain a valid proxy issued in your name from that record holder.
Sincerely,
By Order of the Board of Directors
| Per: | Christopher Bunka | |
Christopher Bunka | ||
Date: May 15, 2019
Page | 1
LEXARIA CORP.950-1130 West Pender StreetVancouver, BC, Canada V6E 4A4Telephone: (604) 602-1633
PROXY STATEMENTANNUAL MEETINGTABLE OF STOCKHOLDERSTO BE HELD ON JUNE 11, 2014CONTENTS
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING OF STOCKHOLDERS
i |
ii |
LEXARIA BIOSCIENCE CORP.
100 – 740 McCurdy Road
Kelowna, BC, Canada V1X 2P7
Telephone: (250) 765-6424
ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 20, 2019
QUESTIONS AND ANSWERS ABOUT THE MEETING OF SHAREHOLDERS
Why am I receiving these materials?
The Board of Directors of Lexaria Bioscience Corp. (“we”Lexaria”, “we”, “us” or “our”) is soliciting proxies for use at the Annual and Special Meeting of StockholdersShareholders to be held at Suite 400, 570 Granville Street, Vancouver,Unit 100 – 740 McCurdy Road, Kelowna, BC, Canada, at 1:00 p.m., local time, onWednesday,Thursday, June 11, 201420, 2019 or at any adjournment of the Annual and Special Meeting (the "“Meeting"”). These materials were first sent or given to our stockholders on or aboutApril 30, 2014.
What is included in these materials?
These materials include:
| · | the notice of Meeting of Shareholders; | |
| · | this proxy statement for the Meeting of Shareholders; | |
| · | the proxy card; and | |
| · | our Annual Report on Form 10-K for the year ended August 31, 2018 as filed with the Securities and Exchange Commission on November 14, 2018. |
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Stockholders;
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALSFOR THE MEETING TO BE HELD ON JUNE 11, 2014
The above materials are also available at www.lexariaenergy.com.www.lexariabioscience.com.
The Annual Report on Form 10-K accompanies this proxy statement, but doesdo not constitute a part of the proxy soliciting material. Lexaria undertakes to provide a copy of the Annual Report, without change, to any shareholder who requests a copy of same by emailing our office manager, Kristin Hamilton at khamilton@lexariabioscience.com.
What items will be voted at the Meeting?
Our stockholdersshareholders will vote:
| 1. | to elect |
| 2. | to ratify |
| 3. | to approve, on a |
| |
| 4. | |
to | |
| 5. | to approve the new Lexaria Bioscience Corp. Equity Incentive Plan as more particularly set out in the proxy statement; and |
| 6. |
|
Page | 2
to transact such other business as may properly come before the Meeting or any adjournment of postponement thereof. |
What do I need to do now?
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We urge you to carefully read and consider the information contained in this proxy statement. We request that you cast your vote on each of the proposals described in this proxy statement. You are invited to attend the Meeting, but you do not need to attend the Meeting in person to vote your shares. Even if you do not plan to attend the Meeting, please vote by proxy by following instructions provided in the proxy card.
Our Board recommends that you vote “FOR” the matters noted under items 1 – 3 and item 5 and that you vote in favour of a three-year review of the executive compensation as noted under item 4.
Our Board of Directors has fixed the close of business onApril 14, 2014May 3, 2019 as the record date (the "Record Date") for the determination of the stockholdersshareholders entitled to notice of, and to vote at, the Meeting or any adjournment. If you were a stockholdershareholder of record on the Record Date, you are entitled to vote at the Meeting.
As of the Record Date, 30,624,66478,387,134 shares of our common stock were issued and outstanding and no other voting securities were issued and outstanding. Therefore, a total of 30,624,66478,387,134 votes are entitled to be cast at the Meeting.
On each proposal to be voted upon, you have one vote for each share of our common stockshares that you owned on the Record Date. There is no cumulative voting.
Shares of common stock
Common shares cannot be voted at our Annual Meeting unless the holder of record is present in person or is represented by proxy. A stockholdershareholder has the right to attend our Annual Meeting at the time and place set forth in the Notice of Annual Meeting and to vote their securities directly at the meeting. In the alternative, a stockholdershareholder may appoint a person to represent such stockholdershareholder at our Annual Meeting by completing the enclosed Form of Proxy, which authorizes a person other than the holder of record to vote on behalf of the stockholder,shareholder, and returning it to our transfer agent, Olympia Trust Company 1003, 750 West Pender Street Vancouver, BC V6C 2T8.Computershare Investor Services Inc., 8th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1. All stockholdersshareholders are urged to complete, sign, date and promptly return the proxy by mail in the enclosed postage-paid envelope, or by faxfax. If you do not wish to vote in person or if you will not be attending the Meeting, you may vote by proxy by mail, by telephone or via the Internet by following instructions provided in the proxy card.
Valid proxies will be voted at our Annual Meeting and at any postponements or adjournments thereof as you direct in the proxy, provided that they are received by our transfer agent at least 24 hours prior to the scheduled time of the meeting, or any adjournment thereof, or deposited with the Chair of the meeting on the day of the meeting or any adjournment thereof prior to the time of voting.
The shares of common stockshares represented by the proxy will be voted, or withheld from voting, as directed in the proxy. If no direction is given and the proxy is validly executed, the proxy will be voted: (1) FOR the election of the nominees for our Board of Directors; (2) to approve, ratify, and appoint MNPFOR the ratification of the continued appointment of Davidson & Company LLP as our company’s auditors for the 20142019 fiscal year and to allow directorsDirectors to set the remuneration; (3) FOR the approval, on a changenon-binding advisory basis, of businessthe compensation of our company; (4) to approve the compensation to be paid to the company's named executive officers; (4) FOR the approval, on a non-binding advisory basis, of the frequency for approving compensation of our named executive officers to be made every three years; and (5) in favourFOR the approval of the three year frequency of stockholder advisory votes on compensation, as set forth in this proxy statement.Lexaria Bioscience Corp. Equity Incentive Plan. If any other matters properly come before our annual meeting,Meeting, the persons authorized under the proxies will vote upon such other matters in accordance with their best judgment, pursuant to the discretionary authority conferred by the proxy.
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ADVICE TO BENEFICIAL HOLDERS OF SHARES OF COMMON STOCKSHARES
THE INFORMATION SET FORTH IN THIS SECTION IS OF SIGNIFICANT IMPORTANCE TO MANY STOCKHOLDERSSHAREHOLDERS OF OUR COMPANY, AS A SUBSTANTIAL NUMBER OF STOCKHOLDERSSHAREHOLDERS DO NOT HOLD SHARES IN THEIR OWN NAME.
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StockholdersShareholders who do not hold their shares in their own name (referred to in this Proxy Statement as “beneficial stockholders”shareholders”) should note that only proxies deposited by stockholdersshareholders whose names appearname appears on the records of our companyCompany as the registered holders of shares of common stockshares can be recognized and acted upon at our annual meeting.Meeting. If shares of common stockshares are listed in an account statement provided to a stockholdershareholder by a broker, then in almost all cases those shares of common stockshares will not be registered in the stockholder'sshareholder’s name on the records of our company. Such shares of common stockshares will more likely be registered under the names of the stockholder'sshareholder’s broker or an agent of that broker. In the United States, the vast majority of such shares are registered under the name of Cede & Co. as nominee for The Depository Trust Company (which acts as depository for many U.S. brokerage firms and custodian banks), and in Canada, under the name of CDS & Co. (the registration name for The Canadian Depository for Securities Limited, which acts as nominee and custodian for many Canadian brokerage firms). Beneficial stockholdersshareholders should ensure that instructions respecting the voting of their shares of common stockshares are communicated to the appropriate person, as without specific instructions, brokers/nominees are prohibited from voting shares for their clients.
Applicable regulatory policy requires intermediaries/brokers to seek voting instructions from beneficial stockholdersshareholders in advance of stockholders'shareholders’ meetings, unless the beneficial stockholdersshareholders have waived the right to receive meeting materials. Every intermediary/broker has its own mailing procedures and provides its own return instructions to clients, which should be carefully followed by beneficial stockholdersshareholders in order to ensure that their shares of common stockshares are voted at our annual meeting.Meeting. The Form of Proxy supplied to a beneficial stockholdershareholder by its broker (or the agent of the broker) is similar to the Form of Proxy provided to registered stockholdersshareholders by our company. However, its purpose is limited to instructing the registered stockholdershareholder (the broker or agent of the broker) how to vote on behalf of the beneficial stockholder.shareholder. The majority of brokers now delegate responsibility for obtaining instructions from clients to Broadridge Financial Solutions, Inc. (“Broadridge”) (formerly, ADP Investor Communication Services in the United States and Independent Investor Communications Company in Canada). Broadridge typically applies a special sticker to proxy forms, mails those forms to the beneficial stockholdersshareholders and the beneficial stockholdersshareholders return the proxy forms to Broadridge. Broadridge then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of shares to be represented at our annual meeting.Meeting. A beneficial stockholdershareholder receiving a Broadridge proxy cannot use that proxy to vote shares of common stockshares directly at our Annual Meeting - the proxy must be returned to Broadridge well in advance of our Annual Meeting in order to have the shares of common stockshares voted.
Although a beneficial stockholdershareholder may not be recognized directly at our Annual Meeting for the purposes of voting shares of common stockshares registered in the name of his broker (or agent of the broker), a beneficial stockholdershareholder may attend at our Annual Meeting as proxyholder for the registered stockholdershareholder and vote the shares of common stockshares in that capacity. Beneficial stockholdersshareholders who wish to attend at our Annual Meeting and indirectly vote their shares of common stockshares as proxyholder for the registered stockholdershareholder should enter their own names in the blank space on the instrument of proxy provided to them and return the same to their broker (or the broker'sbroker’s agent) in accordance with the instructions provided by such broker (or agent), well in advance of our annual meeting.Meeting.
Alternatively, a beneficial stockholdershareholder may request in writing that his or her broker send to the beneficial stockholdershareholder a legal proxy which would enable the beneficial stockholdershareholder to attend at our Annual Meeting and vote his or her shares of common stock.shares.
There are two kinds of beneficial owners – those who object to their name being made known toby the issuers of securities which they ownCompany (called OBOs for Objecting Beneficial Owners) and those who do not object to the issuers of the securities they ownCompany knowing who they are (called NOBOs for Non-Objecting Beneficial Owners). Pursuant to National Instrument 54-101, issuers can obtain a list of their NOBOs from intermediaries for distribution of proxy-related materials directly to NOBOs.
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A quorum of stockholdersshareholders is necessary to take action at our annual meeting.Meeting. The holders of a majorityat least 10% of theour shares entitled to vote as at the Record Date, present in person or by proxy, shall constitute a quorum for the transaction of business at our annual meeting.Meeting. However, if a quorum is not present, then the holders of a majority of the common shares of common stock of our companyCompany who are present at the Meeting, in person or by proxy, may adjourn such meeting from time to time until holders of a majority of the shares of the capital stock shall attend. At any such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the original meeting. Broker non-votes occur when a nominee holding shares of common stockshares for a beneficial owner of those shares of common stockshares has not received voting instructions from the beneficial owner with respect to a particular matter and such nominee does not possess or choose to exercise discretionary authority with respect thereto. Broker non-votes and abstentions will be included in the determination of the number of shares of common stockshares present at our Annual Meeting for quorum purposes but will not be counted as votes cast on any matter presented at our annual meeting.Meeting.
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YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE ASKED TO MARK, DATE, SIGN AND RETURN THE ACCOMPANYING FORM OF PROXY WHETHER OR NOT YOU PLAN TO ATTEND OUR ANNUAL MEETING. IF YOU PLAN TO ATTEND OUR ANNUAL MEETING TO VOTE IN PERSON AND YOUR SHARES ARE REGISTERED WITH OUR TRANSFER AGENT IN THE NAME OF A BROKER OR BANK, YOU MUST SECURE A PROXY FROM THE BROKER OR BANK ASSIGNING VOTING RIGHTS TO YOU FOR YOUR SHARES OF COMMON STOCK.SHARES.
Dissenting Stockholder Rights
Dissenting stockholdersshareholders have no appraisal rights under Nevada law or under our Articles of Incorporation or bylaws in connection with the matters to be voted on at the Meeting.
If you are a stockholdershareholder of record, you may vote in person at the Meeting or by proxy.
To vote in person, come to the Meeting, and we will give you a ballot when you arrive.
| · | To vote in person, come to the Meeting, and you may vote by a show of hand or, if necessary, we will give you a ballot for any matters voted by way of a ballot. | |
| · | If you do not wish to vote in person or if you will not be attending the Meeting, you may vote by proxy by mail, by telephone or via the Internet |
If you hold your shares in “street name” and:
| · | you wish to vote in person at the Meeting, you must obtain a valid proxy from your broker, bank, or other nominee that holds your shares giving you the right to vote the shares at the Meeting. Please follow the instructions from your broker, bank or other nominee, or contact your broker, bank or other nominee to request a proxy card. | |
| · | you do not wish to vote in person or you will not be attending the Meeting, you must vote your shares in the manner prescribed by your broker, bank or other nominee. Your broker, bank or other nominee should have enclosed or otherwise provided a voting instruction card for you to use in directing the broker, bank or nominee how to vote your shares. |
In all cases please ensure that the proxy is received at least 48 hours (excluding Saturdays, Sundays and statutory holidays) before the Meeting you must obtain a validor the adjournment thereof at which the proxy from your broker, bank, or other nominee that holds your shares giving you the rightis to vote the shares at the Meeting. Please follow the instructions from your broker, bank or other nominee, or contact your broker, bank or other nominee to request a proxy card.
you do not wish to vote in person or you will not be attend the Meeting, you must vote your shares in the manner prescribed by your broker, bank or other nominee. Your broker, bank or other nominee should have enclosed or otherwise provided a voting instruction card for you to use in directing the broker, bank or nominee how to vote your shares.used.
What is the difference between a stockholdershareholder of record and a “street name” holder?
If your shares are registered directly in your name with our transfer agent, Olympia Trust,Computershare Investor Services Inc., then you are a stockholdershareholder of record with respect to those shares.
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If your shares are held in a stock brokerage account or by a bank, or other nominee, then the broker, bank, or other nominee is the stockholdershareholder of record with respect to those shares. However, you are still are the beneficial owner of those shares, and your shares are said to be held in “street name.” Street name holders generally cannot vote their shares directly and must instead instruct the broker, bank, or other nominee how to vote their shares. Street name holders are also invited to attend the Meeting.
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What does it mean if I receive more than one proxy card?
If you receive more than one proxy card, it means that you hold shares registered in more than one name or in different accounts. To ensure that all of your shares are voted, please vote by proxy by following instructions provided in each proxy card. If some of your shares are held in “street name,” you should have received voting instructioninstructions with these materials from your broker, bank or other nominee. Please follow the voting instructioninstructions provided to ensure that your vote is counted.
What vote is required for the election of Directors or for the approval of a proposal?
The vote of a majority in interest of our stockholdersshares held by shareholders present in person or represented by proxy and entitled to vote at the Meeting will be sufficient to elect Directors or to approve a proposal.
For the election of Directors, the nominees who receive more “For” votes than the combined votes of “Against” votes and votes that are abstained, will be elected as Directors. There is no cumulative voting in the election of Directors.
All votes will betabulatedbe tabulated by the inspector of election appointed for the Meeting, who will separately tabulate affirmative and negative votes and abstentions. Shares represented by proxies that reflect abstentions as to a particular proposal will be counted as present and entitled to vote for purposes of determining a quorum. An abstention is counted as a vote against that proposal. Shares represented by proxies that reflect a broker "non-vote"“non-vote” will be counted as present and entitled to vote for purposes of determining a quorum. A broker "non-vote"“non-vote” will be treated as not-voted for purposes of determining approval of a proposal and will not be counted as "for"“for” or "against"“against” that proposal. A broker "non-vote"“non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary authority or does not have instructions from the beneficial owner.
Can I change my vote after submitting my proxy?
Yes. You may revoke your proxy and change your vote at any time before the final vote at the Meeting. If you are a stockholdershareholder of record, you may vote again on a later date via the Internet or by telephone (only your latest Internet or telephone proxy submitted prior to the Meeting will be counted), by signing and returning a new proxy card with a later date, or by attending the Meeting and voting in person.Your attendance at the Meeting will not automatically revoke your proxy unless you vote again at the Meeting or specifically request in writing that your prior proxy be revoked. You may also request that your prior proxy be revoked by delivering to our company, at the address on the Notice of Meeting, Attention: President, a written notice of revocation prior to the Meeting being held at the offices of Macdonald Tuskey, our corporate counsel.Lexaria.
If you hold your shares in the street name, you will need to follow the voting instructioninstructions provided by your broker, bank or other nominee regarding how to revoke or change your vote.
You may call us at 604-602-1675250-765-6424 if you want to obtain directions to be able to attend the Meeting and vote in person.
You may be asked to present valid picture identification, such as a driver’s license or passport, before being admitted to the Meeting. If you hold your shares in street name, you will also need proof of ownership to be admitted to the Meeting. A recent brokerage statement or letter from your broker, bank or other nominee is an example of proof of ownership.
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Who pays for the cost of proxy preparation and solicitation?
We will pay for the cost of proxy preparation and solicitation, including the reasonable charges and expenses of brokers, banks or other nominees for forwarding proxy materials to street name holders.
We are soliciting proxies primarily by mail. In addition, our Directors, officers and regular employees may solicit proxies by telephone, facsimile, mail, other means of communication or personally. These individuals will receive no additional compensation for such services. We will ask brokers, banks, and other nominees to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. We will reimburse them for their reasonable charges and expenses, however we will not be paying for delivery to OBOs.
FORWARD-LOOKING STATEMENTS
This proxy statement contains forward-looking statements. These statements relate to future events. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our company’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States and Canada, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Voting Securities and Principal Holders Thereof
We are authorized to issue 200,000,000220,000,000 common shares of common stock with a par value of $0.001. As of the Record Date a total of 30,624,66478,387,134 common shares of common stock were issued and outstanding. Each share of common stock carries the right to one vote at the Meeting.
Only registered stockholdersshareholders as of the Record Date are entitled to receive notice of, and to attend and vote at, the Meeting or any adjournment or postponement of the Meeting.
To the best of our knowledge, no person or company beneficially owns, directly or indirectly, or exercises control or direction over, shares of common stockshares carrying more than 10% of the voting rights attached to the outstanding Common Shares of our companyCompany other than set forth in the section “Security Ownership of Certain Beneficial Owners and Management” below.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of the Record Date, certain information with respect to the beneficial ownership of our shares of common stockshares by each stockholdershareholder known by us to be the beneficial owner of more than 5% of our common shares, as well as by each of our current Directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common stock,shares, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock,shares, except as otherwise indicated.
Name, | Amount and Nature of | Percentage |
Christopher Bunka | 13,908,148 | 17.46% |
John Docherty President and Director | 2,872,250 |
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3.6%
Allan Spissinger Chief Financial Officer | 769,166(5) | * |
Nicholas Baxter | 330,000(6) | * |
Ted McKechnie Director | 395,738(7) | * |
Directors and Executive Officers as a Group |
|
|
Notes:
* denotes a holding of less than 1%
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Notes:
| 1) | Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of | |
| 2) | the address for these persons is c/o Lexaria Bioscience Corp., 100 – 740 McCurdy Road, Kelowna, BC V1X 2P7 | |
| 3) | Percentage of ownership is based on | |
| 4) | ||
Includes | ||
| ||
| 5) | Includes | |
| 6) | Includes | |
| 7) | Includes 110,000 options which are exercisable within 60 days of the Record Date. | |
| 8) | Includes 1,622,250 shares held in the name of Docherty Management Ltd. and 1,250,000 options held in the name of John Docherty which are exercisable within 60 days of the Record Date. |
Changes in Control
We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change in control of our company.
Proposal 1Election of Directors
Our Board of Directors has nominated the persons named below as candidates for Directors at the Meeting. These nominees are all ofDIRECTOR NOMINEES
The following information pertains to our current Directors. Unless otherwise directed, the proxy holders will vote the proxies received by themDirector Nominees for the five nominees named below.
Each Director who is elected will hold office untilpurposes of voting on Proposal 1 located at page 20 and includes the next Annual Meeting of Stockholders and until his or her successor is elected and qualified. Any Director may resign his or her office at any time and may be removed at any time by the majority of vote of the stockholders given at a special meeting of our stockholders called for that purpose.
Our company’s management proposes to nominate the persons named in the table below for election by the stockholders as Directors of the company. Information concerning such persons, as furnished by the individual nominees, is as follows:
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Our Board of Directors recommends that you vote FOR the nominees.
Nominees
As at the Record Date, our Directors and executive officers, theirname, age, positions held, length of time serving as a director of Lexaria and durationbusiness experience of term, are as follows:each nominee:
Name | Position Held with our Company | Age | Date First Elected Or Appointed |
John Docherty | President and Director | 49 | April 15, 2015 |
Christopher Bunka | Chairman, Chief Executive Officer | 57 | October 26, 2006 |
Nicholas Baxter | Director | 65 | July 8, 2011 |
Ted McKechnie | Director | 71 | September 16, 2015 |
The following is a brief account of the education and business experience of the nominees during at least the past five years, indicating their principal occupation during the period, and the name and principal business of the organization by which they were employed.
Bal Bhullar
Ms. Bal BhullarChristopher Bunka
Mr. Bunka dedicates all of his professional time to our Company and its subsidiaries and has served as Lexaria’s director, chairman, president and chief executive officer since October 26, 2006. Mr. Bunka resigned as President on April 15, 2015. From February 14, 2007 until May 12, 2009 and from April 29, 2016 to May 31, 2017 he was the acting chief financial officer of our Chief Financial OfficerCompany. Since October 26, 2006 Mr. Bunka has successfully completed both equity and a Director since May, 2009.
Ms. Bhullar brings over 20 yearsdebt financings for our Company, completed the acquisition of diversified financial and risk management experience in both private and public companies, in the industries of high-tech, film, mining, marine,additional oil & gas energy, transport, medical marijuanaassets, disposed of other oil & gas assets, and spa industries.
Among somerestructured our company. In 2014 Mr. Bunka refocused our Company from one engaged in exploration for oil and natural gas within Canada and the United States to our current business activities in the bioscience industry, namely the research and development of the areasdelivery of lipophilic active molecules based on our patented technology. Mr. Bunka is a named inventor on certain of our pending patent applications.
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Since 1988, Mr. Bunka has been the CEO of CAB Financial Services Ltd., a private holding company located in Kelowna, Canada. CAB Financial Services Ltd. is not an affiliate or subsidiary of the Company. He is a venture capitalist, corporate consultant and has roughly thirty years experience Ms. Bhullar brings expertise in financial & strategic planning, operational & risk management, regulatory compliance reporting, business expansion, start-up operations, financial modeling, program development, corporate financing, and corporate governance/internal controls.executive management.
Previously, Ms. Bhullar has held various positions as President
Mr. Bunka was formerly Chairman/CEO of BC Risk Management Association of BC, and served as Director and CFO of private and public companies. Currently, Ms. Bhullar serves as a Director and CFO for Bare Elegance Medspa, former CFO for ISEE3D Inc. (symbol ICT-TSXV), CFO for public company Enertopia Corp, (symbol ENRT-OTC) but resigned in 2013. Mr. Bunka was formerly a director of Defiance Capital Corp., (symbol DEF-TSXV) a Canadian resource company but resigned in 2014.
John Docherty
Mr. Docherty dedicates all of his professional time to our Company and Director/CFOits subsidiaries serving as President of Lexaria Corp (symbol LXRP-OTCBB).
Ms. Bhullareffective April 15, 2015 and as a director of Lexaria since April 29, 2016. Prior to Lexaria, Mr. Docherty was former President and Chief Operating Officer of Helix BioPharma Corp. (TSX: HBP), where he led the company’s pharmaceutical development programs for its plant and recombinantly derived therapeutic protein product candidates. Mr. Docherty is a Chartered Professional Accountant, Certified General Accountantsenior operations and management executive with over 20 years experience in the pharmaceutical and biopharmaceutical sectors. He has worked with large multinational companies and emerging, private and publicly held start-ups. At Helix, Mr. Docherty was also instrumental in the areas of investor/stakeholder relations, capital raising, capital markets development, strategic partnering, regulatory authority interactions and media relations, and he also served as well holds a CRM designation from Simon Fraser Universitymanagement member of its board of directors. Prior to this, Mr. Docherty was President and a diplomaboard member of PharmaDerm Laboratories Ltd., a Canadian drug delivery company that developed unique microencapsulation formulation technologies for use with a range of active compounds.
Mr. Docherty has also held positions with companies such as Astra Pharma Inc., Nu-Pharm Inc. and PriceWaterhouseCoopers’ former global pharmaceutical industry consulting practice. He is a named inventor on issued and pending patents, including ones owned by the Company, and he has a M.Sc. in Financial Managementpharmacology and a B.Sc. in Toxicology from British Columbia Institutethe University of Technology.Toronto.
None of the companies that previously employed Mr. Docherty, are subsidiaries or affiliates of Lexaria.
Nicholas Baxter
Mr. Baxter has been in the oil & gas business for over 30 years. Mr. Baxteryears having received a Bachelor of Science (Honors) from the University of Liverpool in 1975. Mr. Baxter has workedbroad international experience working on geophysical survey and exploration projects in the U.K., Europe, the former Soviet Union, Central Asia, Africa, and the Middle East. From 1981 to 1985, Mr. Baxter worked for Resource Technology plc, a geophysical equipment sales/and services company that went public on the London USM in London in 1983 and graduated to the London Stock Exchange in 1984. In 1985, Mr. Baxter established his own company in 1985 as a co-founder ofco-founded Addison & Baxter Limited a private geophysical/geological sales and services company which was subsequently acquired by the A&B Geoscience Corporation (ABG) in 1992. Mr. Baxter wasserved as the Chief Operating Officer and a Directordirector of A&B Geoscience CorporationABG, a TSX Venture Exchange listed company, from 1992 to 2002, and under his guidance, secured the first onshore oil production sharing agreement in Azerbaijan in 1998. ABG became controlled by a private Swiss oil trading firm in 2002. Mr. Baxter worked as an independent upstream oil and gas consultant from 2002 to 2004. He joinedformed Eurasia Energy LtdLtd. in 2005, a company listed on the OTC pink sheets, where he is currently President and Chief Executive Officer. Mr. Baxter was appointed as a director of Jericho Oil Corporation, a TSX Venture Exchange listed company, in September 2011. Neither Jericho Oil Corporation nor Eurasia Energy Ltd. are subsidiaries or affiliates of Lexaria.
Christopher Bunka
Mr. Bunka has served as our Director, Chairman,Ted McKechnie
An entrepreneurial executive with extensive board and senior management experience in the consumer goods industry with a proven track record for achieving corporate financial and growth objectives. He is the former President and Chief Executive Officer since October 26, 2006. From February 14, 2007 until May 12, 2009COO of Maple Leaf Foods, which in 2014 had revenue of over CDN $3.1 billion dollars. Mr. McKechnie also has held executive positions with Kraft, Frito Lay, General Foods, PepsiCo, and Philip Morris Companies. Currently, he wasis the Chief Financial OfficerFounder of our company. Mr. Bunka has devoted approximately 45%Advanced Technology for Food Manufacturing and the President of his professional time to our business and intends to continue to devote this amount of time in the future, or more as required.
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Since 1988, Mr. Bunka has been the Chief Executive Officer of CAB Financial Services Ltd.William Davies Consulting Inc., a private holding company locatedthat specializes in Kelowna, British Columbia, Canada. Hevalued added advisory services to the food and beverage industry. William Davies Consulting Inc. is not a venture capitalistsubsidiary or an affiliate of Lexaria. Mr. McKechnie is an energetic leader experienced in building teams in marketing, sales and corporate consultant.
Mr. Bunkasupply chain management. Ted is the recipient of the Philip Morris Chairman’s Award for “recognition of extraordinary contributions having a Director of Defiance Silver Corp (symbol DEF-TSXV)significant and lasting impact on the Corporation”.
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Our executive officers are appointed by our Board of Directors and serve at the pleasure of our Board of Directors.
The names of our executive officers, their ages, positions held, and durations of are as follows:
Name | Position Held with our Company | Age | Date First Elected Or Appointed |
Allan Spissinger | Chief Financial Officer | 50 | May |
Christopher Bunka | Chairman, Chief Executive Officer | 57 | October 26, 2006 |
John Docherty | President | 49 | April 15, 2015 |
Allan Spissinger
Allan was involved in the information technologies (IT) sector for more than 10 years working on corporate IT infrastructure and software development projects before focusing on finance and accounting. Allan joined the audit and assurance practice of PricewaterhouseCoopers (PwC) obtaining his Chartered Professional Accountant (CPA) designation by working primarily in the public company space on financial reporting and Sarbanes-Oxley (SOX) compliance in sectors including resources, manufacturing and technologies. Allan managed private businesses for 20 years before joining Lexaria in September 2014 as its corporate controller and is intimately familiar with its operations, procedures and controls.
For information regarding MessrsMessrs. Bunka and Bhullar,Docherty, see “Nominees” beginning on page 9.8.
There are no family relationships between any director or executive officer.
Involvement in Certain Legal Proceedings
On October 20, 2011 our company was served with an amended complaint filed on behalf of John M. Deakle in the Circuit Court of Hinds County, Mississippi. The complaint included our company as one of the defendants and alleges breach of contract as well as mismanagement of the drilling activity and improper billing by Griffin and Griffin, the operator on our company’s Belmont Lake oil and gas properties. Deakle specifically alleges that our company pressured Griffin and Griffin to undertake the drilling of unnecessary wells for their own benefit. The complaint requests injunctions to enjoin the operator from drilling additional wells on the Belmont Lake property, declaratory judgments stating, apart from other things, that Deakle’s rights under the joint operating agreement were breached, and punitive damages.
Our company believed that this was a frivolous suit, devoid of any merit as it related to our company’s activities, and defended its position. Additionally, our company considered filing a countersuit against Deakle for damages caused by Deakle’s refusal to comply with the terms of the joint operating agreement, the unwarranted interruption of drilling activity on the property as a result of Deakle’s action, as well as costs associated with defending the lawsuit.
The lawsuit has since been settled and there are no material adverse effects upon our company as a result of the settlement.
We know of no other material proceedings in which any of our Directors, officers, affiliates or any stockholdershareholder of more than 5% of any class of our voting securities, or any associate thereof is a party adverse or has a material interest adverse to our company.Lexaria or its subsidiaries.
To the best of our knowledge, none of our directorsDirectors or executive officers has, during the past ten years:
| 1. | been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences); |
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| 2. | had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time; |
| 3. | been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity; |
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| 4. | been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; |
| 5. | been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
| 6. | been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Securities Exchange Act of 1934 (the “Exchange Act”) (15 U.S.C. 78c(a)(26) |
Public Availability of Corporate Governance Documents
Our key corporate governance document is our Code of Ethics which is:
| · | available in print to any shareholder who requests it from our President; and | |
| · | filed on EDGAR as an exhibit to our Registration Statement filed on Form SB-2 on September 20, 2007. |
Code of Ethics
We adopted a Code of Ethics applicable to our seniorprincipal executive officer, principal financial officers and certain other finance executives,officer, principal accounting officer or controller, or persons performing similar functions, which is a "code“code of ethics"ethics” as defined by applicable rules of the SEC. Our Code of Ethics is attached as an exhibit to our Annual ReportRegistration Statement on Form 10-KSBSB-2 filed on January 29, 2008. September 20, 2007. The Code of Ethics is intended to meet the requirements for a code of ethics under the Sarbanes-Oxley Act of 2002, or “SOX”, and under the policies of the Canadian Securities Exchange, a Canadian stock exchange, and is specifically applicable to our principal executive officer, principal financial and accounting officer and controller or persons performing similar functions. Among other matters, the Code of Ethics is designed to deter wrongdoing and to promote:
| · | honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; | |
| · | ethical and fair dealing with our financial institutions, suppliers, vendors, competitors, agents and employees; | |
| · | full, fair, accurate, timely and understandable disclosure in our SEC reports and other public communications; | |
| · | compliance with applicable governmental laws, rules and regulations; | |
| · | lawful and ethical conduct when dealing with public officials and government entities; | |
| · | prompt internal reporting of violations of the Code of Ethics to appropriate persons identified in the code; and | |
| · | accountability for adherence to the Code of Ethics. |
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If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our Chief Executive Officer, chief financial officer, or certain other finance executives, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a Current Report on Form 8-K filed with the SEC.
Meetings
Our Board of Directors held no at least six (6)formal meetings during the year ended OctoberAugust 31, 2013.2018. During such formal meetings, all directors were in attendance. All proceedings of the Board of Directors were conducted either at such formal meetings and evidenced by way of minutes of such proceedings or by way of resolutions consented to in writing by all the Directors and filed with the minutes of the proceedings of the Directors. Such resolutions consented to in writing by the Directors entitled to vote on that resolution at a meeting of the Directors are, according to the Nevada Revised Statutes and our Bylaws, as valid and effective as if they had been passed at a meeting of the Directors duly called and held.
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It is our policy to invite Directors to attend the Meeting of stockholders.shareholders. Two Directors are expected to attend the Meeting. For the Company’s 2018 shareholder meeting, Christopher Bunka and John Docherty were in attendance representing the Board of Directors.
Committees of the Board of Directors
We currently do not have a nominating or compensation committee or committees performing similar functions. There has not been any defined policy or procedure requirements for stockholdersshareholders to submit recommendations or nomination for Directors.
Audit Committee and Audit Committee Financial Expert
The Company has an audit committee that has conducted three (3) formal meetings during the fiscal year ended August 31, 2018. Currently our audit committee consists of our entire Board of Directors.
Christopher Bunka, Nicholas Baxter, and Ted McKechnie. Our audit committee operates pursuant to a written charter adopted by our Board of Directors, which was most recently updated and replaced on May 1, 2019 and a copy of which is attached as Schedule A“A” to this Proxy Statement.
Exemption
The Company, as a U.S. Listed Issuer, is relying on the exemption provided by section 7.1 of NI 52-110 which provides that the Company is not required to comply with Part 2 (Audit Committee Responsibilities), Part 3 (Composition of the Audit Committee), Part 4 (Authority of the Audit Committee) and Part 5 (Reporting Obligations) of NI 52-110.
Our Board of Directors has determined that we do not have a member of our audit committee that qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K. Chris Bunka is not deemed to be “independent” pursuant to Canadian Securities Exchange and OTCQX independence standards. We do not have an audit committee financial expert because we believe that the members of our Board of Directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. We believe
It is not the duty of our audit committee to determine that our financial statements are complete and accurate and in accordance with generally accepted accounting principles. Our management is responsible for preparing our financial statements, and our independent registered public accounting firm is responsible for auditing those financial statements. Our audit committee does, however, consult with management and our independent registered public accounting firm prior to the presentation of financial statements to shareholders and, as appropriate, initiates inquiries into various aspects of our financial affairs. In addition, our audit committee is responsible for retaining, anevaluating and, if appropriate, recommending the termination of our independent Director who would qualifyregistered public accounting firm and approving professional services provided by them.
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Our audit committee oversees our financial reporting process. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal accounting controls.
Our audit committee has reviewed and discussed the audited financial statements for the year ended August 31, 2018 with management.
Our audit committee has discussed with Davidson & Company LLP, Chartered Accountants, our independent registered public accounting firm for the year ended August 31, 2018, the matters required to be discussed by the statement on Auditing Standards No. 61, as an “auditamended (AICPA, Professional Standards, Vol. 1. AU Section 380) as adopted by the Public Accounting Oversight Board in Rule 3200T.
Our audit committee has received written disclosures and the letter from Davidson & Company LLP required by Independence Standards Board Standard No. 1 (Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees) as adopted the Public Company Accounting Oversight Board in Rule 3600T, and has discussed with Davidson & Company LLP its independence.
Based on the reviews and discussions referred to above, our audit committee recommended to our Board of Directors that the audited financial expert” wouldstatements referred to above to be overly costlyincluded in our annual report on Form 10-K for the year ended August 31, 2018 for filing with the Securities and burdensomeExchange Commission.
Respectfully submitted,
The Audit Committee of Lexaria Bioscience Corp.
Christopher Bunka, Ted McKechnie and Nick Baxter
Not “Soliciting Material” The material in this report is not “soliciting material,” is not deemed “filed” with the Securities and Exchange Commission and is not warrantedto be incorporated by reference in our circumstances given the early stagesany filing of our developmentCompany under the Securities Act of 1933 or the Exchange Act whether made before or after the date hereof and the fact that we have not generatedirrespective of any material revenues to date. In addition, we currently do not have nominating, compensation or audit committees or committees performing similar functions nor do we have a written nominating, compensation or audit committee charter. Our Board of Directors does not believe that it is necessary to havegeneral incorporation language in any such committees because it believes the functions of such committees can be adequately performed by our Board of Directors.filing.
We currently act with four Directors, consisting of Christopher Bunka, Bal Bhullar, David DeMartiniJohn Docherty, Ted McKechnie and Nicholas Baxter.
We have determined that Ted McKechnie and Nicholas Baxter isare each an “independent director” as defined in Rule 5605(a) of the Nasdaq Listing Rules.OTCQX Rules for U.S. Companies.
Stockholder
Shareholder Communications with Our Board of Directors
Because of our company’s small size, we do not have a formal procedure for stockholdershareholder communication with our Board of Directors. In general, members of our Board of Directors and executive officers are accessible by telephone or mail. Any matter intended for our Board of Directors, or for any individual member or members of our Board of Directors, should be directed to our President Office Manager, Kristin Hamilton by:
Email at: khamilton@lexariabioscience.com
Fax at: 250-765-2499
Mail at: 100 – 740 McCurdy Road, Kelowna, BC V1X 2P7
with a request to forward the communication to the intended recipient.
The positions of our principal executive officer and the chairman of our Board of Directors are served by one individual, Christopher Bunka. We have determined that the leadership structure of our Board of Directors is appropriate, especially given the early stage of our development and the size of our company. Our Board of Directors provides oversight of our risk exposure by receiving periodic reports from senior management regarding matters relating to financial, operational, legal and strategic risks and mitigation strategies for such risks.
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Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers, and Directors, and persons who own more than 10% of our common stock,shares, to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended OctoberAugust 31, 2013,2018, all filing requirements applicable to our executive officers, Directors and persons who own more than 10% of our common stockshares were complied with.
The following table sets forth all compensation received during the two yearsyear ended OctoberAugust 31, 20132018 and 2017 by our Chief Executive Officer, Chief Financial Officer and each of the other most highly compensated executive officers whose total compensation exceeded $100,000 in such fiscal year. These officers are referred to as the “named executive officers” in this proxy statement. The shareholders of the Company will be asked to approve, on an advisory and non-binding basis, the compensation issued to our named executive officers, pursuant to Proposal 3 located at page 21 and the frequency of such approvals pursuant to Proposal 4 located at page 21.
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Summary Compensation
The particulars of compensation paid to the following persons:
| (a) | our principal executive officer; | |
| (b) | each of our two most highly compensated executive officers who were serving as executive officers at the end of the | |
| (c) | up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the most recently completed financial year, |
who we will collectively refer to as the named executive officers, for our fiscal years ended OctoberAugust 31, 20132018 and 2012,2017, are set out in the following summary compensation table:
SUMMARY COMPENSATION TABLE | |||||||||||||||
Name and Principal | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non- | Nonqualified Deferred Compensa tion Earnings ($) | All Other Compensa - tion ($) | Total | ||||||
Christopher Bunka | 2018 2017 | - - | - - | 292,669 61,950 | 919,600(7) - | - - | - - | 144,000 147,800 | 1,356,269 209,750 | ||||||
Allan Spissinger Chief Financial Officer(2) | 2018 2017 | - - | - - | 34,166(5) - | 534,571(7) (8) 54,204 | - - | - - | 85,663 57,104 | 654,400 111,308 | ||||||
John Docherty President(3) | 2018 2017 | - - | - - | 622,666(6) 97,710 | 525,486(7) - | - - | - - | 140,471 143,434 | 1,288,623 241,144 | ||||||
Notes:
| 1) | Mr. Bunka | |
| 2) | Mr. Spissinger was appointed as our Chief Financial Officer in June 2017, prior to that time, Christopher Bunka acted in that capacity from April 2016 to May 2017. Mr. Spissinger is compensated via a contract between Lexaria and his wholly-owned company, M&E Services Ltd. (“M&E”). For the fiscal year ended August 31, 2018, M&E was paid consulting fees of CDN$8,000.00 from |
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| 3) | Mr. Docherty has been the President of Lexaria since April 15, 2015 and is compensated via a contract between Lexaria and his wholly-owned company Docherty Management Ltd. (“Docherty”). For the fiscal year ended August 31, 2018, Docherty was paid consulting fees of CDN$15,000.00 per month. | ||
| |||
| 4) | Pursuant to the agreement with CAB, during the past two fiscal years, Mr. Bunka received aggregate stock awards of 426,670 common shares of which 216,670 common shares were issued in the 2018 fiscal year with a value of US$292,670.00 and 210,000 common shares were issued in the 2017 fiscal year with a value of US$61,950.00. | ||
| 5) | Pursuant to the agreement with M&E, during the past two fiscal years, Mr. Spissinger received aggregate stock awards of 41,666 common shares of which all 41,666 common shares were issued in the 2018 fiscal year with a value of US$34,166.00. | ||
| 6) | Pursuant to the agreement with Docherty, during the past two fiscal years, Mr. Docherty received aggregate stock awards 928,666 common shares of which 466,666 common shares were issued in the 2018 fiscal year with a value of US$622,666.00 and 462,000 common shares were issued in the 2017 fiscal year with a value of US$97,710.00. | ||
| 7) | The fair value of the option award was estimated using the Black-Scholes pricing model with the following assumptions: expected volatility of | ||
| 8) | The fair value of the option award was estimated using the Black-Scholes pricing model with the following assumptions: expected volatility of 129%, risk–free interest rate of 2.13%, expected life of 5 years, and dividend yield of 0.0%. |
Employment and Consulting Agreements
Other than
For the 2017 and 2018 fiscal years the following consulting agreements were effective between the Company and the named executive officers:
On December 1, 2016, the Company amended its agreement with Chris Bunka, via his wholly-owned company, C.A.B. Financial Services Ltd. for a revised consulting fee of $12,000 per month. The agreement also contemplates the following additional compensation: (i) Executive Performance Bonus, as determined by the Board of Directors and upon the completion of certain high-valued transactions; (ii) Milestone Payments, settled by way of equity compensation being issued upon the completion of certain sales and/or licensing revenues; (iii) Patent Idea Payments, subject to approval by management or the Board of Directors, to be settled either with equity or cash compensation, upon the creation of a viable patent idea or concept; and (iv) Options, at an amount and with an exercise price as approved by the Board of Directors. The agreement also provides that, should a change of control occur during the term of the agreement, that Mr. Docherty shall be entitled to a payout equal to twelve times the monthly fee then in effect multiplied by twelve.
On September 1, 2014, the company entered into a contract with M&E Services Ltd. (which was subsequently amended on December 1, 2014), a wholly owned company by Allan Spissinger as Controller for CAD$3,400 a month. This agreement was replaced on June 1, 2018, with a new agreement (the “ME Agreement”), whereby Mr. Spissinger, as Chief Financial Officer, is entitled to a monthly fee of CAD$12,000, subject to 8% increases on the first and second anniversaries. Additional compensation includes: (i) Executive Performance Bonus, as determined by the Board of Directors and upon the completion of certain high-valued transactions; (ii) Milestone Payments, settled by way of equity compensation being issued upon the completion of certain sales and/or licensing revenues; (iii) Patent Idea Payments, subject to approval by management or the Board of Directors, to be settled either with equity or cash compensation, upon the creation of a viable patent idea or concept; and (iv) Options, at an amount and with an exercise price as approved by the Board of Directors. The ME Agreement also provides that, should a change of control occur during the term of the ME Agreement, that Mr. Spissinger shall be entitled to a payout equal to six times the monthly fee then in effect multiplied by 200%.
On March 1, 2017, the Company executed a consulting contract with Docherty Management Limited, solely owned by Mr. John Docherty to act as President with monthly compensation of CAD$15,000. The agreement also contemplates the following additional compensation: (i) Executive Performance Bonus, as determined by the Board of Directors and upon the completion of certain high-valued transactions; (ii) Milestone Payments, settled by way of equity compensation being issued upon the completion of certain sales and/or licensing revenues; (iii) Patent Idea Payments, subject to approval by management or the Board of Directors, to be settled either with equity or cash compensation, upon the creation of a viable patent idea or concept; and (iv) Options, at an amount and with an exercise price as approved by the Board of Directors. The agreement also provides that, should a change of control occur during the term of the agreement, that Mr. Docherty shall be entitled to a payout equal to four times the monthly fee then in effect multiplied by four.
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During the current fiscal year, Lexaria and its subsidiaries entered into new agreements or amended existing agreements with its named executive officers. A summary of the compensation provided under such agreements is as follows:
Christopher Bunka, Chief Executive Officer. Commencing January 1, 2019 and replacing all historical agreements, Lexaria and one of its subsidiaries have entered into new agreements with Mr. Bunka via his wholly-owned company, C.A.B. Financial Services Ltd., a British Columbia company (the “Bunka Agreements”). The Bunka Agreements provide that Mr. Bunka will receive an aggregate monthly fee of CAD$29,166 for an aggregate annual fee of CAD$350,000. Mr. Bunka will be eligible for additional compensation pursuant to the Bunka Agreement entered into with Lexaria, this additional compensation shall include Performance-Based Incentive equal to 50% of twelve times the monthly fee payable pursuant to such Lexaria agreement, subject to the performance criteria, as set out above, we have notby the Board of Directors, being completed. Further the agreement entered into with Lexaria, also provides that: (i) compensation in the amount of twenty-three times the monthly fee shall be payable upon the completion of any employment or consultingchange of control, subject to certain conditions; and (ii) compensation in the amount of 2% of any consideration provided by a purchaser of a subsidiary of Lexaria is issuable upon the sale of a subsidiary, subject to certain conditions.
John Docherty, President. Commencing January 1, 2019, and replacing all historical agreements, certain subsidiaries of Lexaria have entered into new agreements with Mr. Docherty, both individually and via his wholly-owned company, Docherty Management Limited, an Ontario company (the “Docherty Agreements”). The Docherty Agreements provide that Mr. Docherty will receive an aggregate monthly fee of CAD$25,000 for an aggregate annual fee of CAD$300,000. Mr. Docherty will be eligible for additional compensation pursuant to the Docherty Agreements in the form of Performance-Based Incentive equal to 50% of the total combined salary and any consulting fee compensation for a particular year, subject to the performance criteria, as set by the Board of Directors, being completed within such year. Further the agreement entered into with Kelowna Management Services Corp. (“KMSC”), also provides that: (i) compensation in the amount of twelve times the monthly fee shall be payable upon the completion of any change of control, subject to certain conditions; and (ii) compensation in the amount of 2% of any consideration provided by a purchaser of an affiliate of KMSC is issuable upon the sale of an affiliate, subject to certain conditions.
Allan Spissinger, Chief Financial Officer. On March 1, 2019 the ME Agreement was modified to reduce the monthly fee by 20% (the “Reduced Amount”) and such Reduced Amount was then allocated to a new agreement dated March 1, 2019 entered into between M&E Services Ltd. and a subsidiary of Lexaria.
All compensation paid pursuant to the above-noted agreements that is paid in Canadian currency but reported in US currency is calculated using the Bank of Canada interbank rate as at the last day of the applicable month.
There are no arrangements or plans in which we provide pension, retirement or similar benefits for Directors or executive officers, except that our Directors and executive officers may receive stock options at the discretion of our current officers, Directors or employees.Board of Directors.
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Outstanding Equity Awards at Fiscal Year-End
The following table sets forth for each named executive officer certain information concerning the outstanding equity awards as of OctoberAugust 31, 2013:2018:
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | |||||||||||||||||||||||||||||||||||||
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| OPTION AWARDS |
| STOCK AWARDS |
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Name |
| Number of Securities Underlying Unexercised Options (#) Exercisable |
|
| Number of Securities Underlying Unexercised Options (#) Unexercisable |
|
| Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
|
| Option Exercise Price ($) |
|
| Option Expiration Date |
| Number of Shares or Units of Stock That Have Not Vested (#) |
|
| Market Value of Shares or Units of Stock That Have Not Vested ($) |
|
| Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
|
| Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
| |||||||||||
Christopher Bunka |
|
| 550,000(1) |
|
| - |
|
|
| - |
|
| $ | 0.11 |
|
| 2019/12/22 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| ||||
|
|
| 700,000 |
|
|
| - |
|
|
| - |
|
| $ | 1.53 |
|
| 2023/05/31 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| |||
John Docherty |
|
| 550,000 |
|
|
| - |
|
|
| - |
|
| $ | 0.10 |
|
| 2020/03/26 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| |||
|
|
| 300,000 |
|
|
| - |
|
|
| - |
|
| $ | 0.11 |
|
| 2021/04/15 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| |||
|
|
| 400,000 |
|
|
| - |
|
|
| - |
|
| $ | 1.53 |
|
| 2023/05/31 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| |||
Allan Spissinger |
|
| 200,000 |
|
|
| - |
|
|
| - |
|
| $ | 0.37 |
|
| 2022/06/01 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| |||
|
|
| 200,000 |
|
|
| - |
|
|
| - |
|
| $ | 0.83 |
|
| 2022/12/01 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| |||
|
|
| 300,000 |
|
|
| - |
|
|
| - |
|
| $ | 1.53 |
|
| 2023/05/31 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| |||
_______
(1) Subsequent to the fiscal year ended August 31, 2018, Mr. Bunka returned these options for cancellation.
During our fiscal year ended OctoberAugust 31, 2013, no2018, on June 19, 2018, Christopher Bunka, Lexaria’s Chief Executive Officer, exercised options werefor the issuance of 247,500 common shares at an exercise price of $0.09 per share.
During our fiscal year ended August 31, 2017, on January 9, 2017, Allan Spissinger, Lexaria’s Chief Financial Officer, exercised by our named officers.options for the issuance of 27,500 common shares at an exercise price of $0.10 per share.
We do
The following compensation was provided to the Directors of Lexaria who are not have any agreementsalso named executive officers during the fiscal year ended August 31, 2018:
Name |
| Fees earned or paid in cash |
| Stock Awards ($) |
| Option Awards ($)(1) |
|
| Non- Equity Incentive Plan Compensation ($) |
| Nonqualified Deferred Compensation Earnings ($) |
| All Other Compensation ($) |
|
| Total ($) |
| |||
Nicholas Baxter |
| - |
| - |
|
| 65,685 |
|
| - |
| - |
| - |
|
|
| 65,685 |
| |
William (Ted) McKechnie |
| - |
| - |
|
| 65,685 |
|
| - |
| - |
|
| 16,000(2) |
|
| 81,685 |
| |
___________
| (1) | The fair value of the option award was estimated using the Black-Scholes pricing model with the following assumptions: expected volatility of 130.46%, risk–free interest rate of 2.68%, expected life of 5 years, and dividend yield of 0.0%. Subsequent to the fiscal year ended August 31, 2018, these options were cancelled. |
| (2) | This represents consulting fees paid to the Director for the fiscal year ended August 31, 2018, for non-director services in the amount of $4,000 per month pursuant to an agreement that ended on November 30, 2017 |
| Page | 16 |
| Table of Contents |
On January 1, 2019, Lexaria entered into a service agreement with each of the above-noted Directors who are not named executive officers, whereby such Directors would receive a director fee of CAD$30,000.00 per year and would be issued options for compensating our directors for their services in their capacity as directors, although such directors are expected in the future to receive stock options to purchase of 100,000 common shares of our common stock as awarded by our board of directors.Lexaria.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) |
| David DeMartini | Nil | Nil | $2,130 | Nil | Nil | Nil | $2,130 |
Securities Authorized for Issuance under Equity Compensation Plans
We have no long-term incentive plans other than the stock option plans described below.
Page | 14
Stock Option Plans
Equity Compensation Plan Information
The following table sets forth certain information concerning all equity compensation plans previously approved by stockholdersshareholders and all previous equity compensation plans not previously approved by stockholders,shareholders, as of the most recently completed fiscal year.
| EQUITY COMPENSATION PLAN INFORMATION | |||
| Plan category | # of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price ofoutstanding options, warrants andrights | # of securities available for issuance under equity compensation plans (excluding securities in column (a)) |
| Equity compensation plans not approved by shareholders | Nil | Nil | Nil |
| Equity compensation plans approved by shareholders: | |||
| 2007 Equity compensation plan | Nil | Nil | 100,000 |
| 2010 Equity compensation plan | 2,100,000 | $0.26 | Nil |
| Total | 2,100,000 | $0.26 | 100,000 |
EQUITY COMPENSATION PLAN INFORMATION | ||||||||||||
Plan category |
| # of securities to be issued upon exercise of outstanding options, warrants and rights |
|
| Weighted-average exercise price of outstanding options, warrants and rights |
|
| # of securities available for issuance under equity compensation plans (excluding securities in column (a)) |
| |||
Equity compensation plans not approved by shareholders |
| Nil |
|
| Nil |
|
| Nil |
| |||
Equity compensation plans approved by shareholders: |
|
|
|
|
|
|
|
|
| |||
2007 Equity compensation plan |
|
| 300,000 |
|
| $ | 1.53 |
|
|
| 112,500 |
|
2010 Equity compensation plan |
|
| 1,325,000 |
|
| $ | 1.53 |
|
|
| 287,500 |
|
2014 Stock Option plan approved by security holders |
|
| 3,175,000 |
|
| $ | 0.29 |
|
| Nil |
| |
Total |
|
| 4,800,000 |
|
| $ | 0.71 |
|
|
| 400,000 |
|
As of August 31, 2018, we had three active equity compensation plans, a summary of each is as follows:
2007 Equity Compensation Plan (the “2007 Plan”)
The 2007 Plan was approved by the Company’s shareholders on April 25, 2007 and provided for the issuance of up to 2,000,000 options exercisable into 2,000,000 common shares. The options issued under the 2007 Plan had an exercise price equal to not less than the greater of the closing market price of the Company’s common shares on: (i) the trading day prior to the date of grant; or (ii) the date of grant. Eligible participants of the 2007 Plan include employees, directors and officers of the Company and its affiliates and certain service providers who do not engage in services related to the offer and sale of securities. The maximum number of options issuable pursuant to the 2007 Plan were consolidated on a 4:1 basis on June 23, 2009 so that only 500,000 options were issuable subsequent to that date and thereafter were split on a 1.1:1 basis on September 15, 2015 so that the maximum number of options issuable was 550,000. Any material changes to the 2007 Plan require shareholder approval.
2010 Equity Compensation Plan (the “2010 Plan”)
The 2010 Plan was approved by the Company’s shareholders on February 26, 2010 and provided for the issuance of up to 1,800,000 options exercisable into 1,800,000 common shares. The options issued under the 2010 Plan had an exercise price equal to not less than the greater of the closing market price of the Company’s common shares on: (i) the trading day prior to the date of grant; or (ii) the date of grant. Eligible participants of the 2010 Plan include employees, directors, officers and consultants of the Company. The maximum number of options issuable pursuant to the 2010 Plan were split on a 1.1:1 basis on September 15, 2015 so that the maximum number of options issuable was 1,980,000. Any material changes to the 2010 Plan require shareholder approval.
| Page | 17 |
| Table of Contents |
2014 Equity Compensation Plan (the “2014 Plan”)
The 2014 Plan was approved by the Company’s shareholders on June 11, 2014 and provided for the issuance of up to 3,500,000 options exercisable into 3,500,000 common shares. The options issued under the 2014 Plan had an exercise price equal to not less than the greater of the closing market price of the Company’s common shares on: (i) the trading day prior to the date of grant; or (ii) the date of grant. Eligible participants of the 2014 Plan include employees, directors, officers, management company employees and consultants of the Company and its affiliates. The maximum number of options issuable pursuant to the 2014 Plan were split on a 1.1:1 basis on September 15, 2015 so that the maximum number of options issuable was 3,850,000. Any material changes to the 2014 Plan require shareholder approval.
Lexaria Bioscience Corp. Equity Incentive Plan (the “Lexaria Plan”)
On May 1, 2019, the Board of Directors approved the Lexaria Plan that is being submitted to Lexaria’s shareholders for ratification and approval pursuant to Proposal 5 located at page 24. The material terms of the Lexaria Plan are disclosed under Proposal 5.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
We did not purchase any of our shares of common stockshares or other securities during our fiscal year ended OctoberAugust 31, 2013.2018.
Transactions with Related Persons and Related Person Transaction Policy
Except as disclosed herein, no
No Director, executive officer, shareholder holding at least 5% of shares of our common stock,shares, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the beginning of the year ended OctoberAugust 31, 2013,2018, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the yearendyear-end for the last two completed fiscal years.
For
Under our Code of Ethics, our senior financial officers are required to act with honesty and integrity, including the year ended October 31, 2013,ethical handling of actual or apparent conflicts of interest between personal and professional relationships. In addition, our company was party torecently amended Audit Committee Charter provides that the following related party transactions:Audit Committee will be responsible for the review of any related-party transactions.
| |
| |
|
Page | 15
c)On October 27, 2008 we entered a secured loan agreement in the amount of CAD$400,000 with Christopher Bunka. On October 21, 2010, we settled a portion of the debt, namely $2,167 with Christopher Bunka by converting 86,667 warrants into 43,333 common shares of the Company as per Purchase Agreement dated October 27, 2008 at a price of $0.05 per share. For the year ended October 31, 2013, we paid interest expenses of CAD $65,643 (2012: CAD$71,610).d)On April 1, 2010, we entered a non-secured loan agreement in the amount of US$75,000 with CAB. For the year ended October 31, 2013, we paid interest expenses of $11,250 (2012: $13,500).e)On March 30, 2012, we entered a non-secured loan agreement in the amount of US$50,000 with Chris Bunka. For the year ended October 31, 2013, we incurred interest expenses of $5,500 (2012: $3500).f)On July 20, 2012, we entered a non-secured loan agreement in the amount of US$50,000 with Chris Bunka. For the year ended October 31, 2013, we incurred interest expenses of $1,875 (2012: $1,556) and paid the full principal of $50,000 (2012: $Nil).g)On December 1, 2011, we entered into a secured loan agreement in the amount of $200,000 with two directors of our company. This loan agreement was amended for another year to repay the debt in twelve equal monthly principal payment, plus interest on the monthly declining balances. The interest rates of the amendment debt are the same as the existing debt agreement. For the year ended October 31, 2013, we paid/accrued interest expense of $34,667 (2012: $22,000).h)Included in accounts payable, $89,540 (2012: $55,011) and other payable, $34,410 (2012: Nil) was payable to companies controlled by the president, key management personnel and directors of our company. Included in other receivable, $21,363 was receivable from companies controlled by the president, key management personnel and directors of our company.i)For the year ended October 31, 2013, we paid/accrued $15,866 (2012: $67,377) to Kelowna Resources Group formerly known as 0743608 BC Ltd.; $6,669 (2012:$28,323) to Emerald Atlantic LLC; and, $1,880 to Tom Ihrke (2012: $6,796) for their respective Non-consent Interests in Belmont Lake. Kelowna Resources Group, formerly known as 0743608 BC Ltd., is owned by the president of our company, and Emerald Atlantic LLC is owned by a Director of our company.
Employment Agreements
For information regarding compensation for our executive officers and Directors, see “Summary Compensation” beginning on page 12.14.
Fees Paid to Our Independent Registered Public Accounting Firm
Audit fees
Davidson & Company LLP is our independent registered public accounting firm and will be submitted to the shareholders for ratification as to its continued appointment under Proposal 2 located at page 20. The aggregate fees billed for the most recently completed fiscal years ended August 31, 2018 and August 31, 2017 for professional services rendered by the principal accountant and to others for the provision of specialized advice for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
| Page | 18 |
| Table of Contents |
|
| Year Ended |
| |||||
|
| August 31, 2018 |
|
| August 31, 2017 |
| ||
Audit Fees |
| $ | 39,972 |
|
| $ | 35,392 |
|
Audit Related Fees |
|
| - |
|
|
| - |
|
Tax Fees |
|
| - |
|
| $ | 15,982 |
|
All Other Fees |
|
| - |
|
|
| - |
|
Total |
| $ | 39,972 |
|
| $ | 51,374 |
|
Audit Fees
Audit fees consist of fees billed for professional services rendered for the audits of our financial statements, reviews of our interim financial statements included in quarterly reports, services performed in connection with filings with the Securities and Exchange Commission and related comfort letters and other services that are normally provided by Davidson & Company LLP for the fiscal years ended August 31, 2018 and August 31, 2017 in connection with statutory and regulatory filings or engagements.
Audit related Fees
Audit related fees consist of fees billed for assurance and related services by Lexaria’s principal accountants for the fiscal years ended August 31, 2018 and August 31, 2017 in connection with statutory and regulatory filings or engagements. Lexaria did not pay any audit related fees for the 2018 and 2017 fiscal years.
Tax Fees
Tax fees consist of fees billed for professional services for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state and local tax compliance and consultation in connection with various transactions and acquisitions. For the fiscal year ended August 31, 2018, we did not engage an accountant for non-audit professional services or preparation of corporate tax returns. For the fiscal year ended August 31, 2017, DMCL Chartered Professional Accountants was paid $15,982 for services related to tax compliance and advice with respect to a proposed continuance by Lexaria into the Province of British Columbia, Canada.
All Other Fees
We do not use Davidson & Company LLP for financial information system design and implementation. These services, which include designing or implementing a system that aggregates source data underlying the financial statements or generates information that is significant to our financial statements, are provided internally or by other service providers. We do not engage Davidson & Company LLP to provide compliance outsourcing services.
Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our independent auditors are engaged by us to render any auditing or permitted non-audit related service, the engagement be:
| · | approved by our audit committee (which consists of our entire Board of Directors); or | |
| · | entered into pursuant to pre-approval policies and procedures established by the Board of Directors, provided the policies and procedures are detailed as to the particular service, the Board of Directors is informed of each service, and such policies and procedures do not include delegation of the Board of Directors’ responsibilities to management. |
| Page | 19 |
| Table of Contents |
Our Board of Directors (audit committee) pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the Board of Directors either before or after the respective services were rendered.
Our Board of Directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.
PROPOSALS FOR SHAREHOLDER VOTE
Election of Directors
Our Board of Directors has nominated the persons previously named under Director Nominees as candidates for Directors at the Meeting. These nominees are all of our current Directors. Unless otherwise directed, the proxy holders will vote the proxies received by them for the four nominees named below.
Each Director who is elected will hold office until the next Meeting of Shareholders and until his successor is elected and qualified. Any Director may resign his office at any time and may be removed at any time by the majority of vote of the shareholders given at a special meeting of our shareholders called for that purpose.
Our Company’s management proposes to nominate the persons named in the table below for election by the shareholders as Directors of the Company. Information concerning such persons, as furnished by the individual nominees, is located under the Director Nominees section.
Our Board of Directors recommends that you vote FOR the nominees.
Ratification of the Continued Appointment of the Independent Registered Public Accounting Firm
Our Board of Directors is asking our stockholdersshareholders to ratify the continued appointment of MNPDavidson & Company LLP, as our independent registered public accounting firm for the fiscal year ending OctoberAugust 31, 20142019 at a remuneration to be fixed by the Board.
Stockholder
Shareholder ratification of the continued appointment of MNPDavidson & Company LLP is not required under the Nevada corporate law, our bylaws or otherwise. However, our Board of Directors is submitting the continued appointment of MNPDavidson & Company LLP as our independent registered public accounting firm to our stockholdersshareholders for ratification as a matter of corporate practice. If our stockholdersshareholders fail to ratify the continued appointment, our Board of Directors will reconsider whether or not to retain the firm. Even if the appointment is ratified, our Board of Directors in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if our Board of Directors determines that such a change would be in the best interest of our companyCompany and our stockholders.shareholders.
Representatives of MNPDavidson & Company LLP are not expected to be present at the Meeting. However, we will provide contact information for MNPDavidson & Company LLP to any stockholdersshareholders who would like to contact the firm with questions.questions and the firm will be expected to respond to any appropriate questions; however if representatives from Davidson & Company LLP are present at the Meeting, they will have an opportunity to make a statement if they desire to do so.
Page | 16
Unless otherwise directed, the proxy holders will vote the proxies received by them for the ratification of the continued appointment of MNPDavidson & Company LLP as our independent registered public accounting firm for the fiscal year ending OctoberAugust 31, 2014.2019.
| Page | 20 |
| Table of Contents |
At the Meeting the stockholdersshareholders will be asked to approve the following resolution:
“RESOLVED THAT the continued appointment of
MNPDavidson & Company LLP as our independent registered public accounting firm is ratified, approved and confirmed and that the remuneration be fixed by the Board.”
Our Board of Directors recommends that you vote FOR the ratification of the continued appointment of MNPDavidson & Company LLP as our independent registered public accounting firm as our auditors for the fiscal year ending OctoberAugust 31, 20142019 at a remuneration to be fixed by the Board.Board.
Fees Paid to Our Independent Registered Public Accounting Firm
Audit fees
The aggregate fees billed for the most recently completed fiscal year ended October 31, 2013 and for fiscal year ended October 31, 2012 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
| Year Ended | ||
| October 31, 2013 | October 31, 2012 | |
| Audit Fees | 30,080 | 22,268 |
| Audit Related Fees | 9,341 | 16,386 |
| Tax Fees | Ni | Nil |
| All Other Fees | Nil | Nil |
| Total | 39,421 | 38,654 |
Audit Fees
Audit fees consist of fees billed for professional services rendered for the audits of our financial statements, reviews of our interim financial statements included in quarterly reports, services performed in connection with filings with the Securities and Exchange Commission and related comfort letters and other services that are normally provided by MNP LLP for the fiscal years ended October 31, 2013 and October 31, 2012 in connection with statutory and regulatory filings or engagements.
Audit related Fees
There were $30,080 audit related fees paid to MNP LLP for the fiscal year ended October 31, 2013 and $22,268 for the fiscal year ended October 31, 2012.
Tax Fees
Tax fees consist of fees billed for professional services for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state and local tax compliance and consultation in connection with various transactions and acquisitions. For the fiscal years ended October 31, 2013 and October 31, 2012, we did not use MNP LLP for non-audit professional services or preparation of corporate tax returns. We do not use MNP LLP for financial information system design and implementation. These services, which include designing or implementing a system that aggregates source data underlying the financial statements or generates information that is significant to our financial statements, are provided internally or by other service providers. We do not engage MNP LLP to provide compliance outsourcing services.
Page | 17
Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our independent auditors are engaged by us to render any auditing or permitted non-audit related service, the engagement be:
approved by our audit committee (which consists of our entire Board of Directors); or
entered into pursuant to pre-approval policies and procedures established by the Board of Directors, provided the policies and procedures are detailed as to the particular service, the Board of Directors is informed of each service, and such policies and procedures do not include delegation of the Board of Directors’ responsibilities to management.
Our Board of Directors (audit committee) pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the Board of Directors either before or after the respective services were rendered.
Our Board of Directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.
Proposal 3Change of Business
During 2013 and 2014 we reviewed and considered changing our company's direction from the exploration of oil and gas properties to a non-resource business, more specifically the medical marihuana business (the "Change of Business"). We determined to make this change after an evaluation of our company's existing resources and a review of strategic options for our company. Through our board's business contacts and the entrepreneurial approach of our management team we believe that we will be able to identify and capitalize upon an opportunity in the Canadian medical marihuana industry. We are actively pursuing these opportunities and believe strongly that the addition of the medical marihuana business is in our shareholder’s best interests.
Background to Canadian Medical Marihuana Industry
In 2001, Canada implemented a government-run program for medical marijuana access. The original regulations, being theMarihuana Medical Access Regulations (Canada), referred to as MMAR, permitted approved persons access to either grow the product or seek supply from Health Canada. According to a press release issued by Health Canada on June 10, 2013, the number of individuals in Canada approved to use medical marijuana has grown from 500 in 2001 to more than 30,000 as of June 10, 2013. Due in part to the growth in demand, Health Canada issued new regulations in June 2013, theMarihuana for Medical Purposes Regulations(Canada) issued pursuant to theControlled Drugs and Substances Act(Canada), referred to as MMPR, that replace government supply and homegrown medical marijuana existing under the MMAR with highly secure and regulated commercial operations.
At the Meeting, the stockholders will be asked to vote "FOR" the following resolution:
"RESOLVED that that the Change of Business is ratified, approved and confirmed."
Page | 18
Proposal 4
Advisory Vote Onto Approve the Compensation of Our Named Executive Compensation(Say-on-pay vote)
Officers
This year, as required by
Pursuant to Section 14A of the Exchange Act, as amended (the “Exchange Act”), our shareholders are entitled to vote on whether the advisory shareholder vote to approve executive compensation should occur every one, two or three years, and may also choose to abstain from voting. In 2014, the majority of our shareholders voted to approve executive compensation every three years. In 2017 Lexaria did not hold an annual shareholder meeting and in 2018 the shareholder vote on the advisory non-binding resolution to approve the executive compensation was inadvertently forgotten. Accordingly, we are now providing stockholders theour shareholders with an opportunity to adviseexpress their views on our Board regardingnamed executive officer’s compensation for the compensation of our Named Executive Officers,fiscal year 2018, as such compensation is describeddisclosed in this Proxy Statement, the tabular disclosure regarding such compensationStatement. The Company’s current policy and the accompanying narrative disclosure, beginning on page 11Board of Directors’ recommendation contained in Proposal 4, is to continue to submit the named executive officer’s compensation to an advisory vote at its annual meeting of shareholders every three years. Assuming there is no change to the Company’s current policy regarding the frequency of such advisory vote, it is expected that the next “say-on-pay” vote will occur at our 2022 annual meeting of shareholders. Although this Proxy Statement. We urgeadvisory vote is non-binding, our stockholders toBoard of Directors will review these disclosures for further insight intoand consider the voting results when making future decisions regarding our compensation policies.
The goal of our company'snamed executive officer compensation program is to retain and reward highly qualified, talented leaders who create long term stockholder value. The program is designed to align management’s interest with that of stockholders and motivate senior executives to increase our long-term growth and profitability while attempting to minimize risks that could result fromrelated executive compensation decisions. programs.
As described in this proxy statement, our board weighsmore detail in the appropriate mix of compensation elements, including the allocation between cash and equity, for each executive officer to help achieve those objectives. Our Compensation Discussion and Analysis, contained in this proxy statement describes our executive compensation program is designed to:
| · | attract and retain the best executive talent; | |
| · | motivate our executives to achieve our financial and business goals; and | |
| · | align our executive’s interests with those of our shareholders to drive increased shareholder value. |
We encourage shareholders to read the Compensation Discussion and Analysis beginning on page 14 of this Proxy Statement, which outlines the decisions made bycurrent compensation issuable to our board in more detail.named executive officers. The Board of Directors believe that our executive compensation strikes the appropriate balance between utilizing measured pay practices and effectively incentivizing our named executive officers to dedicate themselves fully to create value for our shareholders.
Accordingly, our board is asking our stockholders to
The Board of Directors recommends that shareholders indicate their support for the compensation of our named executive officersofficers. The vote on this resolution is not intended to address any specific element of compensation but rather the overall named executive officer compensation program as described in this proxy statement by casting a non-binding advisoryProxy Statement.
Accordingly, we ask our shareholders to vote “FOR”on the following resolution:resolution at the Annual and Special Meeting:
"
“RESOLVED, that the shareholders approve, on an advisory non-binding basis, the compensation paid to the company'sof our named executive officers for the fiscal year 2018, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation tablestable and narrative discussion is hereby APPROVED."any other related disclosure in this Proxy Statement.”
As an advisory vote, this proposal is not binding on our board. Nevertheless, the views expressed by the stockholders, whether through this vote or otherwise, are important to management and our board, and, accordingly, our board intends to consider the results of this vote in making determinations in the future regarding executive compensation arrangements.
Advisory approval of this proposal requires the vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting.
| Page | 21 |
| Table of Contents |
OUR
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEIN FAVOR “FOR” THE APPROVAL OF PROPOSAL 4.THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.
Advisory Vote On Theon the Frequency Of Anof Future Advisory Vote On TheVotes on
the Compensation Of Ourof our Named ExecutiveOfficers(Say-when-on-pay vote)
Accordingly,
Pursuant to Rule 14a-21(b) of Regulation 14A of the Exchange Act, we are asking our company is asking stockholdersshareholders to vote, on a non-binding advisory basis, on the frequency of future advisory votes on the compensation of our named executive officers as reflected in Proposal 3 above. Shareholders may indicate whether they would prefer anthat we conduct future advisory votevotes on the compensation of our named executive officers every year, every other yearone, two or every three years. Shareholders may also abstain from casting a vote on this proposal. For the reasons described below, our boardBoard recommends that the stockholdersshareholders select a frequency of three years.
After considering the benefits and consequences of each alternative, our boardBoard recommends that the advisory vote on the compensation of our company’s named executive officers be submitted to the stockholdersshareholders once every three years.
Page | 19
Our boardBoard believes that a triennial advisory vote makes sense for our companyCompany and its stockholdersshareholders for the following reasons:
A triennial advisory vote will allow stockholders to better evaluate our executive compensation programs relative to a pattern of performance over time, which is a more appropriate perspective than the short-term approach that an annual vote could encourage. We seek to encourage a long-term focus among our executives by, for example, granting equity awards that vest over long periods and are designed to correlate closely with the creation of long-term stockholder value. In addition, our compensation programs do not change significantly from year to year. We are concerned that annual votes on our executive compensation program could foster a short-term focus and lead to an over- emphasis on the near-term effect of our compensation programs and thus undermine some of our program’s long-term features. We believe that a vote on our compensation by our stockholders every three years will encourage stockholders to take the same long-term approach to our compensation programs taken by our executives and our compensation committee.
| · | A triennial advisory vote will allow shareholders to better evaluate our executive compensation programs relative to a pattern of performance over time, which is a more appropriate perspective than the short-term approach that an annual vote could encourage. We seek to encourage a long-term focus among our executives by, for example, granting equity awards that vest over long periods and are designed to correlate closely with the creation of long-term shareholder value. In addition, our compensation programs do not change significantly from year to year. We are concerned that annual votes on our executive compensation program could foster a short-term focus and lead to an over-emphasis on the near-term effect of our compensation programs and thus undermine some of our program’s long-term features. We believe that a vote on our compensation by our shareholders every three years will encourage shareholders to take the same long-term approach to our compensation programs taken by our executives and our compensation committee. | |
| · | A triennial advisory vote will provide us the appropriate time to understand any concerns expressed by our shareholders, thoughtfully evaluate and respond to our shareholders and effectively implement any desired changes to our executive compensation program. As a practical matter, because our critical compensation actions are taken in the first quarter of each fiscal year, any changes to our executive compensation program that were responsive to shareholder concerns would not be fully implemented until the year following the vote, and, as result, would not be disclosed in the compensation tables and reflected in the Compensation Discussion and Analysis section of our proxy statement until the second completed fiscal year following the advisory vote. A triennial advisory vote will permit our shareholders to observe and evaluate the impact of any changes to our executive compensation policies and practices that have occurred since the last advisory vote on executive compensation, including changes made in response to the outcome of a prior advisory vote on executive compensation. | |
| · | An annual advisory vote may frustrate shareholder communication. While an advisory vote on executive compensation may reflect general satisfaction or dissatisfaction with a company’s practices, a dialogue about executive compensation between our shareholders and our Board can provide a forum that is more conducive to expressing precise views regarding specific compensation practices. Our Board believes that shareholders should not have to wait for a formal vote at an annual meeting. We encourage our shareholders to convey their compensation concerns to us and view the advisory vote as an additional, but not exclusive, opportunity for our shareholders to communicate with us regarding executive compensation. | |
| · | Agreements pertaining to named executive officer compensation tend to have a three year term and so a shareholder vote on such named executive officer compensation would be redundant if made annually. |
A triennial advisory vote will provide us the appropriate time to understand any concerns expressed by our stockholders, thoughtfully evaluate and respond to our stockholders and effectively implement any desired changes to our executive compensation program. As a practical matter, because our critical compensation actions are taken in the first quarter of each fiscal year, any changes to our executive compensation program that were responsive to stockholder concerns would not be fully implemented until the year following the vote, and, as result, would not be disclosed in the compensation tables and reflected in the Compensation Discussion and Analysis section of our proxy statement until the second completed fiscal year following the advisory vote. A triennial advisory vote will permit our stockholders to observe and evaluate the impact of any changes to our executive compensation policies and practices that have occurred since the last advisory vote on executive compensation, including changes made in response to the outcome of a prior advisory vote on executive compensation.
An annual advisory vote may frustrate stockholder communication. While an advisory vote on executive compensation may reflect general satisfaction or dissatisfaction with a company’s practices, a dialogue about executive compensation between our stockholders and our board or Compensation Committee members can provide a forum that is more conducive to expressing precise views regarding specific compensation practices. Our board believes that stockholders should not have to wait for a formal vote at an annual meeting. We encourage our stockholders to convey their compensation concerns to us and view the advisory vote as an additional, but not exclusive, opportunity for our stockholders to communicate with us regarding executive compensation.
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While our boardBoard believes that its recommendation is appropriate at this time, stockholdersshareholders are not voting to approve or disapprove that recommendation, but are instead asked to indicate their preference, on an advisory basis, as to whether the non-binding stockholdershareholder advisory vote on the approval of our executive officer compensation practices should be held every year, every two years, or every three years. The frequency option that receives votes from the holders of at least a majority of shares present or represented and voting at the Annual and Special Meeting will be considered the preferred frequency of future advisory votes on the compensation of our named executive officers by our stockholders.shareholders. Our boardBoard values the opinions of our stockholdersshareholders in this matter, and, to the extent there is any significant vote in favor of one frequency over the other options, even if fewer than a majority of the votes cast, our boardBoard will consider the stockholders’shareholders’ concerns and evaluate any appropriate next steps. However, because this vote is advisory and not binding on our boardthe Board or our companyLexaria in any way, our boardthe Board may decide that it is in the best interests of our stockholdersshareholders and our companyLexaria to hold an advisory vote on executive compensation more or less frequently than the option indicated by our stockholders.shareholders.
OUR BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF THE THREE YEAR
FREQUENCY OFSTOCKHOLDER SHAREHOLDER ADVISORY VOTES ON COMPENSATION
ON PROPOSAL 5.
4.
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Proposal 65Adoption
Approval of 2014 Stock OptionLexaria Bioscience Corp. Equity Incentive Plan
The purpose of
On May 1, 2019 the 2014 Stock OptionBoard approved the Lexaria Bioscience Corp. Equity Incentive Plan (the “2014“Lexaria Plan”) which is to secure for our company and our stockholdersbe registered with the benefits arising from capital stock ownership by employees, officers and directors of, and consultants or advisors to, our company who are expected to contribute to our future growth and success.Securities Exchange Commission. The 2014Lexaria Plan permits grants of incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, and stock appreciation rights (collectively the “incentive securities”) to purchase sharesa maximum of 7,838,713 common stock, $0.001 par value per share, of our company.
The stock subject to options granted under the 2014 Plan shall be shares of authorized but unissued or reacquired common stock. The maximum numbershares based on 10% of shares of common stock of our company which may beLexaria’s issued and sold undershare capital as at the 2014 Plan shall be 3,500,000,Record Date and subject to adjustment for stock splits or consolidations. It is the intent of the Company that all future incentive securities will be made under the Lexaria Plan and that no further incentive securities shall be issued under the 2007 Plan, the 2010 Plan or the 2014 Plan.
The purchase price per share deliverable upon the exercise of an optionincentive security granted under the 2014Lexaria Plan shall be determined by the boardBoard of directorsDirectors at the time of grant of such option.incentive security but, pursuant to Canadian Securities Exchange policies, cannot be lower than the greater of the closing market prices of Lexaria’s shares on (a) the trading day prior to the date of the option grant; and (b) the date of the option grant . Further incentive securities issued to persons who own ten percent (10%) of the voting power of all classes of shares of the Company or any of its subsidiaries, shall bear an exercise price of no less than one hundred ten percent (110%) of the fair market value of the Company’s shares on the date of grant. Options granted under the 2014Lexaria Plan shall expire on such date as determined by the boardBoard of directorsDirectors and set forth in the applicable optionaward agreement, provided, that such date shall not be later than (10) ten years after the date on which the optionincentive security is granted and, in the case of optionees who hold more than own ten percent (10%) of the voting power of all classes of shares of the Company or any of its subsidiaries, such date shall not be more than five (5) years from the date on which the incentive security is granted.
Eligible participants to the Lexaria Plan shall include directors, officers, employees and consultants of Lexaria and of Lexaria’s affiliates. Vesting provisions may be placed on option issuances at the discretion of the Board of Directors, taking into consideration the length of service of the optionee and the number of options granted. Options shall terminate on the earlier of: (i) the expiry date; (ii) one year after disability or death of the optionee; or (iii) 30 days after termination of the optionee’s services to Lexaria or an affiliate of Lexaria.
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Reasons for Adopting the Lexaria Plan
The Board of Directors believes that we must continue to offer a competitive equity incentive program in order to successfully attract, retain and motivate the best employees, directors, consultants, advisors and officers, without whom we cannot execute on our business goals or deliver value to our shareholders. As noted under Compensation Plan, Lexaria currently has three different equity compensation plans, which are onerous to maintain and difficult to ensure compliance. The Board has approved the Lexaria Plan as a means of creating a path towards streamlining its equity compensation program, by way of working towards only using the Lexaria Plan for future compensation and amending the Lexaria Plan when and if needed to accommodate the Company’s growth. As noted previously, once the Lexaria Plan has been approved by the shareholders, no further options are intended to be granted under the 2007 Plan, the 2010 Plan or the 2014 Plan.
The Lexaria Plan will be registered with the Securities and Exchange Commission, thus allowing the shares issued pursuant to option exercise to be unrestricted shares, and to secure for Lexaria and our shareholders the benefits arising from capital share ownership by employees, officers and Directors of, and consultants or advisors to, Lexaria or its subsidiaries, who are expected to contribute to its future growth and success.
The full text of the proposed 2014Lexaria Plan is attached as Schedule "B"“B” to this Proxy Statement.
Our board
Vote Required for Approval
At the meeting the shareholders of directors unanimously recommends a vote “FOR”Lexaria will be asked to consider and, if deemed appropriate, to approve, the adoptionfollowing ordinary resolution (being 50% + 1 of the 2014 Plan.votes cast):
“RESOLVED, as an ordinary resolution of the shareholders of Lexaria Bioscience Corp. (“Lexaria”), that:
| 1. | The Lexaria Bioscience Corp. Equity Incentive Plan (the “Lexaria Plan”), in the form attached as Schedule “B” to the proxy statement dated on or about May 15, 2019, is hereby approved and adopted; |
| 2. | Lexaria will have the ability to grant incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, and stock appreciation rights under the Lexaria Plan, until such time as Lexaria requires that the maximum threshold of options allowed to be issued requires amendment; |
| 3. | Any officer or director of Lexaria is hereby authorized and directed for and on behalf of Lexaria to execute or cause to be executed and to deliver or cause to be delivered all such other documents and instruments and to perform or cause to be performed all such other acts and things a such person determines may be necessary or desirable to give full effect to the foregoing resolution and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of such document or instrument or the doing of any such act or thing.” |
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE LEXARIA PLAN ON PROPOSAL 5.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Except for the approval of the Lexaria Plan as set out below,noted under Proposal 5, no Director, executive officer, or nominee for election as a Director of the Company and no associate of any of the foregoing persons has any substantial interest, direct or indirect, by security holding or otherwise, in any matter to be acted upon at the Meeting, other than elections to office:Meeting.
“HOUSEHOLDING” OF PROXY MATERIALS
The Securities and Exchange Commission permits companies and intermediaries such as brokers to satisfy the delivery requirements for proxy statements and Annual Reports with respect to two or more stockholdersshareholders sharing the same address by delivering a single proxy statementProxy Statement or Annual Report, as applicable, addressed to those stockholders.shareholders. This process, which is commonly referred to as “householding”, potentially provides extra conveniences for stockholdersshareholders and cost savings for companies.
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Although we do not intend to household for our stockholdersshareholders of record, some brokers household our proxy materials and Annual Reports, delivering a single copy of proxy statementthe Proxy Statement or Annual Report to multiple stockholdersshareholders sharing an address unless contrary instructions have been received from the affected stockholders.shareholders. Once you have received notice from your broker that it will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate copy of proxy statementthe Proxy Statement or Annual Report, or if you are receiving multiple copies of either document and wish to receive only one, please notify your broker. StockholdersShareholders who currently receive multiple copies of the proxy statementProxy Statement at their address from their brokers and would like to request “householding” of their communications should contact their brokers.
STOCKHOLDER
Pursuant to Rule 14a-8 under the Exchange Act, stockholders
Shareholders may present propersubmit proposals or director nominations for inclusion by the Company in next year’s proxy statement. If you wish to submit a shareholder proposal that is required to be included in our 2020 Annual Meeting proxy statement, and for considerationwe must receive the proposal at our next meetingprincipal executive offices at 100 – 740 McCurdy Road, Kelowna, BC V1X 2P7 by the close of stockholders. To be eligible for inclusion in our 2015 proxy statement, yourbusiness on Tuesday, December 3, 2019. The proposal must be received by us no later than 120 days before April 15, 2015also comply with all applicable statutes and regulations and must otherwise comply with Rule 14a-8 under the Exchange Act. Further, if you would like to nominate a Director or bring any other business before the stockholders at the 2015 Meeting, you must comply with the procedures contained in the bylaws and you must notify us in writing and such notice must be delivered to or received by the Secretary no later than 120 days before April 15, 2015. While the Board will consider stockholder proposals, we reserve the right to omit from our proxy statement relating to our 2014 meeting stockholder proposals that it is not required to include under the Exchange Act, including Rule 14a-8 of the Exchange Act.
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All stockholder proposals, notices and requests should be made in writing and sent via registered, certified or express mail, to our company, at the address on the first page of this Proxy Statement to the attention of our Corporate Secretary. Upon receipt of any such proposal, we shall determine whether or not to include any such proposal in the President.Proxy Statement and proxy in accordance with applicable law. It is suggested that shareholders forward such proposals by Certified Mail-Return Receipt Requested. After Tuesday, December 3, 2019, any shareholder proposal will be considered to be untimely.
If you want to present any other proposal or nominate a person to be elected as a director at our 2020 Annual Meeting, the proposal or nomination must be received in writing by our Corporate Secretary at our principal offices by February 20, 2020. However, if the Annual Meeting is to be held before May 19, 2020 or after July 20, 2020, then the proposal or nomination must be received before the later of (i) the close of business on the 10th day following the day on which notice of the meeting date is mailed or public disclosure of the meeting date is made, whichever comes first, and (ii) the close of business 90 days before the 2020 Annual Meeting.
With respect to business to be brought before the Meeting, we have received no notices from our stockholdersshareholders that we were required to include in this proxy statement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual and other reports, proxy statements and other information with the United States Securities and Exchange Commission. The documents filed with the Securities and Exchange Commission are available to the public from the United States Securities and Exchange Commission’s website at www.sec.gov. Additional information regarding our companyCompany and our business activities is available on the SEDAR website located at www.sedar.com and at our company’s website located at http://www.lexariaenergy.com.www.lexariabioscience.com. Our company’s financial information is provided in our company’s audited financial statements and related management discussion and analysis for its most recently completed financial year end may be viewed on the SEDAR website.
Our Board of Directors does not intend to bring any other business before the Meeting and, so far as is known to our Board of Directors, no matters are to be brought before the Meeting except as specified in the noticeNotice of the annual meeting.Meeting. If any other matters are properly brought before the Meeting, it is the intention of the persons named on the proxy to vote the shares represented by the proxy on such matters in accordance with their judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Christopher Bunka
Christopher Bunka
Chairman of the Board
May 15, 2019
| Contents |
May 13, 2014
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Schedule A“A”
LEXARIA CORP.
AUDIT COMITTEE CHARTER
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THE AUDIT COMMITTEE'SCOMMITTEE’S CHARTER
As adopted by the Board of Directors and most recently amended May 1, 2019
The primary function of the audit committee (the "Committee"“Committee”) is to assist the Company’s Board of Directors in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by the Company to regulatory authorities and shareholders, the Company’s systems of internal controls regarding finance and accounting and the Company’s auditing, accounting and financial reporting processes. Consistent with this function, the Committee will encourage continuous improvement of, and should foster adherence to, the Company’s policies, procedures and practices at all levels. The Committee’s primary duties and responsibilities are to:
serve as an independent and objective party to monitor the Company’s financial reporting and internal control system and review the Company’s financial statements; | ||
| · | ||
review and appraise the performance of the Company’s external auditors; and | ||
| · | ||
provide an open avenue of communication among the Company’s auditors, financial and senior management and the Board of Directors. |
Composition
The Committee shall be comprised of a minimum three directorsDirectors as determined by the Board of Directors. If the Company ceases to be a “venture issuer” (as that term is defined in National Instrument 52-110), then allDirectors of the members of the Committee shall be free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of his or her independent judgment as a member of the Committee.which:
If the Company ceases to be a “venture issuer” (as that term is defined in National Instrument 52-110), then all members of the Committee shall have accounting or related financial management expertise. All members of the Committee that are not financially literate will work towards becoming financially literate to obtain a working familiarity with basic finance and accounting practices. For the purposes of the Company's Audit Committee Charter, the definition of “financially literate” is the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can presumably be expected to be raised by the Company's financial statements.
| · | a majority of whom are independent of the management of the Company and are free of any relationship that, in the opinion of the Board of Directors, would interfere with their exercise of independent judgment as a committee member; | |
| · | a majority of whom satisfy the independence standards defined in Rule 10A-3 under the Securities Exchange Act of 1934, as amended; | |
| · | each of whom is able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement; and | |
| · | each of whom must not have participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the past three (3) years. |
The members of the Committee shall be elected by the Board of Directors at its first meeting following the annual shareholders’ meeting. Unless a Chair is elected by the full Board of Directors, the members of the Committee may designate a Chair by a majority vote of the full Committee membership.
Meetings
The Committee shall meet a least twice annually,or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee will meet at least annually with the Chief Financial Officer and the external auditors in separate sessions.
Responsibilities and Duties
To fulfill its responsibilities and duties, the Committee shall:
DOCUMENTS/REPORTS REVIEW
| review and update this Audit Committee Charter annually; and | |||
| · | review the |
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EXTERNAL AUDITORS
| · | review annually, the performance of the external auditors who shall be ultimately accountable to the Company’s Board of Directors and the Committee as representatives of the shareholders of the Company; | |
| · | obtain annually, a formal written statement of external auditors setting forth all relationships between the external auditors and the Company, consistent with Independence Standards Board Standard 1; | |
| · | review and discuss with the external auditors any disclosed relationships or services that may impact the objectivity and independence of the external auditors; | |
| · | take, or recommend that the Company’s full Board of Directors take appropriate action to oversee the independence of the external auditors, including the resolution of disagreements between management and the external auditor regarding financial reporting; | |
| · | recommend to the Company’s Board of Directors the selection and, where applicable, the replacement of the external auditors nominated annually for shareholder approval; | |
| · | recommend to the Company’s Board of Directors the compensation to be paid to the external auditors; | |
| · | at each meeting, consult with the external auditors, without the presence of management, about the quality of the Company’s accounting principles, internal controls and the completeness and accuracy of the | |
| · | review and approve the | |
| · | review with management and the external auditors the audit plan for the year-end financial statements and intended template for such statements; and | |
| · | review and pre-approve all audit and audit-related services and the fees and other compensation related thereto, and any non-audit services, provided by the Company’s external auditors. The pre-approval requirement is waived with respect to the provision of non-audit services if: |
| o | the aggregate amount of all such non-audit services provided to the Company constitutes not more than five percent of the total amount of revenues paid by the Company to its external auditors during the fiscal year in which the non-audit services are provided, | ||
| o | such services were not recognized by the Company at the time of the engagement to be non-audit services, and | ||
| o | such services are promptly brought to the attention of the Committee by the Company and approved prior to the completion of the audit by the Committee or by one or more members of the Committee who are members of the Board of Directors to whom authority to grant such approvals has been delegated by the Committee. | ||
Provided the pre-approval of the non-audit services is presented to the |
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FINANCIAL REPORTING PROCESSES
in consultation with the external auditors, review with management the integrity of the Company's financial reporting process, both internal and external;
| · | in consultation with the external auditors, review with management the integrity of the Company’s financial reporting process, both internal and external; | |
| · | consider the external auditors’ judgments about the quality and appropriateness of the Company’s accounting principles as applied in its financial reporting; | |
| · | consider and approve, if appropriate, changes to the Company’s auditing and accounting principles and practices as suggested by the external auditors and management; | |
| · | review significant judgments made by management in the preparation of the financial statements and the view of the external auditors as to appropriateness of such judgments; | |
| · | following completion of the annual audit, review separately with management and the external auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information; | |
| · | review any significant disagreement among management and the external auditors in connection with the preparation of the financial statements; | |
| · | review with the external auditors and management the extent to which changes and improvements in financial or accounting practices have been implemented; | |
| · | review any complaints or concerns about any questionable accounting, internal accounting controls or auditing matters; | |
| · | review certification process; | |
| · | establish a procedure for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and | |
| · | establish a procedure for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. |
consider and approve, if appropriate, changes to the Company’s auditing and accounting principles and practices as suggested by the external auditors and management;
review significant judgments made by management in the preparation of the financial statements and the view of the external auditors as to appropriateness of such judgments;
following completion of the annual audit, review separately with management and the external auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information;
review any significant disagreement among management and the external auditors in connection with the preparation of the financial statements;
review with the external auditors and management the extent to which changes and improvements in financial or accounting practices have been implemented;
review any complaints or concerns about any questionable accounting, internal accounting controls or auditing matters;
review certification process;
establish a procedure for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and
establish a procedure for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
OTHER
review any related-party transactions;
engage independent counsel and other advisors as it determines necessary to carry out its duties; and
to set and pay compensation for any independent counsel and other advisors employed by the Committee.”
(a) Composition
The Company’s Audit Committee is currently comprised of three directors, Christopher Bunka, Bal Bhullar and Nicholas Baxter. As defined in NI 52-110, the Company does not have a director that is “independent. Also as defined in NI 52-110, Bal Bhullar is considered to be “financially literate”.
(b) Relevant Education and Experience
The education and experience of each audit committee member that is relevant to the performance of his responsibilities as an audit committee member is as follows:
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Christopher Bunka
Since 1988, Mr. Bunka has been the CEO of CAB Financial Services Ltd., a private holding company located in Kelowna, Canada. He is a venture capitalist and corporate consultant. He is also a business commentator and has provided business updates to Vancouver radio station, CKWX, from 1998 to present. He has also written business and investment articles published in various North American publications.
Bal Bhullar, CGA, CRM
Ms. Bhullar brings over 20 years of diversified financial and risk management experience in both private and public companies, in the industries of high-tech, film, mining, marine, oil & gas, energy, transport, and spa industries.
Ms. Bhullar is a Chartered Professional Accountant, Certified General Accountant and as well holds a CRM designation from Simon Fraser University and a diploma in Financial Management from British Columbia Institute of Technology.
Nicholas Baxter
Mr. Baxter received a Bachelor of Science (Honors) from the University of Liverpool in 1975. Mr. Baxter has worked on geophysical survey and exploration projects in the U.K., Europe, Africa and the Middle East. Mr. Baxter established his own company in 1985 as a co-founder of Addison & Baxter Limited, a private geophysical/geological sales and services company which was acquired by A&B Geoscience Corporation in 1992. Mr. Baxter was Chief Operating Officer and a Director of A&B Geoscience Corporation from 1992 to 2002. Mr. Baxter worked as an independent upstream oil and gas consultant from 2002 to 2004. He joined Eurasia Energy Ltd in 2005, where he is currently President and Chief Executive Officer.
(c) Audit Committee Oversight
Since the commencement of the Company’s most recently completed financial year, the Company’s Board of Directors has not failed to adopt a recommendation of the Audit Committee to nominate or compensate an external auditor.
(d) Reliance on Certain Exemptions
Since the commencement of the Company’s most recently completed financial year, the Company has not relied on the exemptions contained in sections 2.4 or 8 of NI 52-110. Section 2.4 provides an exemption from the requirement that the Audit Committee must pre-approve all non-audit services to be provided by the auditor, where the total amount of fees related to the non-audit services are not expected to exceed 5% of the total fees payable to the auditor in the fiscal year in which the non-audit services were provided. Section 8 permits a company to apply to a securities regulatory authority for an exemption from the requirements of NI 52-110 in whole or in part.
(e) Pre-Approval Policies and Procedures
The Audit Committee has not adopted specific policies and procedures for the engagement of non-audit services. Subject to the requirements of NI 52-110, the engagement of non-audit services is considered by the Company’s Board of Directors, and where applicable by the Audit Committee, on a case-by-case basis.
(f) External Auditor Service Fees (By Category)
“Audit fees” billed by the Company’s external auditor for services provided in auditing the Company’s annual financial statements for the subject year. “Audit-related fees” are fees not included in audit fees that are billed by the auditor for assurance and related services that are reasonably related to the performance of the audit review of the Company’s financial statements. “Tax fees” are fees billed by the auditor for professional services rendered for tax compliance, tax advice and tax planning. “All other fees” are fees billed by the auditor for products and services not included in the foregoing categories.
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Exemption
The Company is relying on the exemption provided by section 6.1 of NI 52-110 which provides that the Company, as a venture issuer, is not required to comply with Part 3 (Composition of the Audit Committee) and Part 5 (Reporting Obligations) of NI 52-110.
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Schedule B
LEXARIA CORP.
STOCK OPTION PLAN(the “Plan”)Dated for Reference ______________, 2014
ARTICLE 1PURPOSE AND INTERPRETATION
Purpose
| · | review any related-party transactions; | |
|
Definitions
| ||
| · | engage independent counsel and other advisors as it determines necessary to carry out its duties; and | |
| ||
| · |
| |
| ||
| ||
| ||
| ||
|
(i) provides on an ongoing bona fide basis, consulting, technical, managerial or like services to the Company or an Affiliate of the Company;
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(ii) in the reasonable opinion of the Company, spends or will spend a significant amount of time and attention on the business and affairs of the Company or an Affiliate of the Company; and
(iii) has a relationship with the Company or an Affiliate that enables the individual or Consultant Company to be knowledgeable about the business and affairs of the Company;
“Consultant Company” means for an individual consultant, a company or partnership of which the Person is an employee, shareholder or partner;
“Directors” means the directors of the Company as may be elected from time to time;
“Effective Date” for an Option means the date of grant of the Option by the Board;
“Employee” means:
| ||
| ||
|
SCHEDULE “B”
LEXARIA BIOSCIENCE CORP.
EQUITY INCENTIVE PLAN
1. Purposes of the Plan. The purposes of this Plan are:
(a) to attract and retain the best available personnel for positions of substantial responsibility,
(b) to provide additional incentive to Employees, Directors, and Consultants, and
(c) to promote the success of the Company’s business.
The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, and Restricted Stock Units.
2. Definitions. As used herein, the following definitions will apply:
(a) “Exercise PriceAdministrator” means the amount payable per Optioned Share onBoard or any of its committees as will be administering the exercise of an Option, as specified in the Option Commitment relating to such Option and as determinedPlan, in accordance with Section 4 of the terms of this Plan;Plan.
(b) “Expiry DateApplicable Laws” means the dayrequirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which an Option lapses as specified in the Option Commitment relating to such OptionShares are listed or in accordance withquoted and the termsapplicable laws of this Plan;any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.
(c) “Listed SharesAward” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, or Restricted Stock Units.
(d) “Award Agreement” means the number of issuedwritten or electronic agreement setting forth the terms and outstanding Shares of the Company that have been accepted for listing on the CSE, but excluding dilutive securities not yet converted into Listed Shares;
“Management Company Employee” means an individual employed by another Person providing management servicesprovisions applicable to the Company which are required for the ongoing successful operation of the business enterprise of the Company;
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“Officer” means a duly appointed executive officer of the Company;
“Option” means the righteach Award granted under this Plan to a Service Provider to purchase Optioned Shares;
“Option Commitment” means the notice of grant of an Option delivered by the Company to a Service Provider and substantially in the form of Schedule “A” (as to an Option without vesting provisions) or Schedule “B” (as to an Option with vesting provisions) attached hereto;
“Optioned Shares” means Shares that may be issued in the future to a Service Provider upon the exercise of an Option;
“Optionee” means the recipient of an Option granted under this Plan;
“Person” means a company or an individual;
“Plan” means this Stock Option Plan, the terms of which are set out herein or as may be amended;
“Regulatory Approval” means the approval of the CSE and any other securities regulatory authority that may have lawful jurisdiction over this Plan and any Options granted under this Plan;
“Securities Act” means theSecurities Act, R.S.B.C. 1996, c.418, as amended from time to time;
“Service Provider” means a Person whoPlan. The Award Agreement is abona fideDirector, Officer, Employee, Management Company Employee or Consultant, and also includes a company, of which 100% of the share capital is beneficially owned by one or more Service Providers; and
“Shares” means the common shares of the Company.
ARTICLE 2STOCK OPTION PLAN
Establishment of Stock Option Plan
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Shares Issuable under the Plan
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Eligibility
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Options Granted Under this Plan
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Options Not Exercised
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Powers of the Board
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ARTICLE 3TERMS AND CONDITIONS OF OPTIONS
Exercise Price
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Term ofOption
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Option Amendment
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Vesting of Options
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Optionee Ceasing to be a Service Provider
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Non-Assignable
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Adjustment of the Number of Optioned Shares
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ARTICLE 4COMMITMENT AND EXERCISE PROCEDURES
Option Commitment
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Manner of Exercise
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Delivery of Certificate and Hold Periods
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Withholding
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ARTICLE 5GENERAL
Employment and Services
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No Representation or Warranty
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No Rights as Shareholder
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No Prohibition on Other Arrangements
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Interpretation
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Amendment of this Plan
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Effective Date
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SCHEDULE “A”
LEXARIA CORP.STOCK OPTION PLAN DATED _________________, 2014
OPTION COMMITMENT[No Vesting Provision]
Notice is hereby given that, effective this ___________day of ________________________________, 20___ (the “Effective Date”),LEXARIA CORP.(the “Company”) has granted to ______________________________________________ (the “Service Provider”) an Option to acquire ________________________Shares (the “Optioned Shares”) until 4:30 p.m. (Vancouver Time) on the ____ day of _______________________, 20___ (the “Expiry Date”) at an exercise price (the “Exercise Price”) of $_____ per Optioned Share.
The grant of the Option evidenced hereby is made subject to the terms and conditions of the Plan.
(e) “Board” means the Board of Directors of the Company.
(f) “Change in Control” means the occurrence of any of the following events:
(i) Change in Ownership of the Company. A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company, except that any change in the ownership of the stock of the Company as a result of a private financing of the Company that is approved by the Board will not be considered a Change in Control; or
(ii) Change in Effective Control of the Company. If the Company has a class of securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this clause (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or
(iii) Change in Ownership of a Substantial Portion of the Company’s Assets. A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
(iv) For purposes of this Section 2(f), persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase, or acquisition of stock, or similar business transaction with the Company.
(v) Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.
(vi) Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (A) its sole purpose is to change the jurisdiction of the Company’s incorporation, or (B) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.
(g) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a reference to any successor or amended section of the Code.
(h) “Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board, or by the compensation committee of the Board, in accordance with Section 4 hereof.
(i) “Company” means Lexaria Bioscience Corp., a Nevada corporation.
(j) “Consultant” means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity.
(k) “Director” means a member of the Board.
(l) “Disability” means total and permanent disability as defined in Code Section 22(e)(3), provided that in the case of Awards other than Incentive Stock Option Plan dated October 21, 2011, (theOptions, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.
(m) “PlanEmployee”) means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company.
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(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(o) “Exchange Program” means a program under which (i) outstanding Awards are surrendered or cancelled in exchange for Awards of the same type (which may have higher or lower exercise prices and different terms), Awards of a different type, and/or cash, (ii) Participants would have the opportunity to transfer any outstanding Awards to a financial institution or other person or entity selected by the Administrator, and/or (iii) the exercise price of an outstanding Award is reduced or increased. The Administrator will determine the terms and conditions of any Exchange Program in its sole discretion.
(p) “Fair Market Value” means, as of any date, the value of the Shares determined as follows:
(i) If the Shares are listed on any established stock exchange or a national market system, including without limitation the Canadian Securities Exchange (the “CSE”), the New York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market of The Nasdaq Stock Market, or the NYSE American, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable Notwithstanding the foregoing, in the event that the Shares are listed on the CSE, for the purposes of establishing the exercise price of any Options, the Fair Market Value shall not be lower than the greater of the closing market price of the Shares on the CSE on (A) the trading day prior to the date of grant of the Options, and (B) the date of grant of the Options;
(ii) If the Shares are regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Shares on the day of determination (or, if no bids and asks were reported on that date, as applicable, on the last trading date such bids and asks were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or
(iii) In the absence of an established market for the Shares, the Fair Market Value will be determined in good faith by the Administrator.
(q) “Incentive Stock Option” means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Code Section 422 and the regulations promulgated thereunder.
(r) “Nonstatutory Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.
(s) “Option” means a stock option granted pursuant to the Plan.
(t) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Code Section 424(e).
(u) “Participant” means the holder of an outstanding Award.
(v) “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock is subject to restrictions and therefore, the Shares are hereby incorporated.subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.
To
(w) “Plan” means this Equity Incentive Plan.
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(x) “Restricted Stock” means Shares issued pursuant to an Award of Restricted Stock under Section 8 of the Plan, or issued pursuant to the early exercise yourof an Option.
(y) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share, granted pursuant to Section 9. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.
(z) “Service Provider” means an Employee, Director, or Consultant.
(aa) “Share” means a share of the Common Stock, which is intended to qualify as service recipient stock under Treasury Regulation 1.409A-1(b)(5)(iii), as adjusted in accordance with Section 13 of the Plan.
(bb) “Stock Appreciation Right” means an Award, granted alone or in connection with an Option, you must deliverthat pursuant to Section 7 is designated as a Stock Appreciation Right.
(cc) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Code Section 424(f).
3. Stock Subject to the Plan.
(a) Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares that may be subject to Awards and sold under the Plan is 7,838,713 Shares. The Shares may be authorized but unissued, or reacquired Shares.
(b) Lapsed Awards. If an Award expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an Exchange Program, or, with respect to Restricted Stock or Restricted Stock Units, is forfeited to or repurchased by the Company due to the failure to vest, the unpurchased Shares (or, for Awards other than Options or Stock Appreciation Rights, the forfeited or repurchased Shares) which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated). With respect to Stock Appreciation Rights, only Shares actually issued pursuant to a Stock Appreciation Right will cease to be available under the Plan; all remaining Shares under Stock Appreciation Rights will remain available for future grant or sale under the Plan (unless the Plan has terminated). Shares that have actually been issued under the Plan under any Award will not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of Restricted Stock or Restricted Stock Units are repurchased by the Company or are forfeited to the Company a written notice specifyingdue to the failure to vest, such Shares will become available for future grant under the Plan. Shares used to pay the exercise price of an Award or to satisfy the tax withholding obligations related to an Award will become available for future grant or sale under the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Optioned Shares you wishavailable for issuance under the Plan.
(c) Share Reserve. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as will be sufficient to acquire, togethersatisfy the requirements of the Plan.
4. Administration of the Plan.
(a) Procedure. The Plan will be administered by (i) the Board or (ii) a Committee, which Committee will be constituted to satisfy Applicable Laws.
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(b) Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Awards may be granted hereunder;
(iii) to determine the number of Shares to be covered by each Award granted hereunder;
(iv) to approve forms of Award Agreements for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine;
(vi) to institute and determine the terms and conditions of an Exchange Program;
(vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;
(viii) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws;
(ix) to modify or amend each Award (subject to Section 18(c) of the Plan), including but not limited to the discretionary authority to extend the post-termination exercisability period of Awards and to extend the maximum term of an Option (subject to Section 6(d));
(x) to allow Participants to satisfy withholding tax obligations in a manner prescribed in Section 14;
(xi) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;
(xii) to allow a Participant to defer the receipt of the payment of cash or a certified cheque payablethe delivery of Shares that otherwise would be due to such Participant under an Award; and
(xiii) to make all other determinations deemed necessary or advisable for administering the Plan.
(c) Effect of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards.
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5. Eligibility. Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, and Restricted Stock Units may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.
6. Stock Options.
(a) Grant of Options. Subject to the Companyterms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Options in such amounts as the Administrator, in its sole discretion, will determine.
(b) Option Agreement. Each Award of an Option will be evidenced by an Award Agreement that will specify the exercise price, the term of the Option, the number of Shares subject to the Option, the exercise restrictions, if any, applicable to the Option, and such other terms and conditions as the Administrator, in its sole discretion, will determine.
(c) Limitations. Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. Notwithstanding such designation, however, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the aggregate Exercise Price. A certificate forfirst time by the Optioned Shares so acquiredParticipant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as Nonstatutory Stock Options. For purposes of this Section 6(c), 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 time the Option with respect to such Shares is granted, and calculation will be performed in accordance with Code Section 422 and Treasury Regulations promulgated thereunder. Subject to adjustment as provided in Section 13, the maximum number of Shares that may be issued byupon the Company’s transfer agent as soon as practicable thereafterexercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a), plus, to the extent allowable under Code Section 422 and the Treasury Regulations promulgated thereunder, any Shares that become available for issuance under the Plan pursuant to Section 3(b).
(d) Term of Option. The term of each Option will bear a minimum four month non-transferability legendbe stated in the Award Agreement; provided, however, that the term will be no more than ten (10) years from the date of grant thereof. In the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.
(e) Option Exercise Price and Consideration.
(i) Exercise Price. The per Share exercise price for the Shares to be issued pursuant to the exercise of an Option will be determined by the Administrator, but will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. In addition, in the case of an Incentive Stock Option granted to an Employee who owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant. Notwithstanding the foregoing provisions of this Section 6(e)(i), Options may be granted with a per Share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Code Section 424(a).
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(ii) Waiting Period and Exercise Dates. At the time an Option Commitment.is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.
(iii) Form of Consideration. The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of: (A) cash; (B) check; (C) promissory note, to the extent permitted by Applicable Laws, (D) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option will be exercised and provided further that accepting such Shares will not result in any adverse accounting consequences to the Company, as the Administrator determines in its sole discretion; (E) consideration received by the Company under cashless exercise program (whether through a broker or otherwise) implemented by the Company in connection with the Plan; (F) by net exercise, (G) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws, or (H) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator will consider if acceptance of such consideration may be reasonably expected to benefit the Company.
(f) Exercise of Option.
(i) Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share.
(1) An Option will be deemed exercised when the Company receives: (I) notice of exercise (in such form as the Administrator may specify from time to time) from the person entitled to exercise the Option, and (II) full payment for the Shares with respect to which the Option is exercised (together with applicable tax withholding). Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder will exist with respect to the Shares subject to an Option, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13 of the Plan.
(2) Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.
(ii) Termination of Relationship as a Service Provider. If a Participant ceases to be a Service Provider, other than upon the Participant’s termination as the result of the Participant’s death or Disability, the Participant may exercise his or her Option within thirty (30) days of termination, or such longer period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) to the extent that the Option is vested on the date of termination, except that a Participant dismissed from employment or service for cause shall have his or her Option immediately terminated without any right to exercise same. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
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(iii) Disability of Participant. If a Participant ceases to be a Service Provider representas a result of the Participant’s Disability, the Participant may exercise his or her Option within twelve (12) months of termination, or such longer period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) to the extent the Option is vested on the date of termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(iv) Death of Participant. If a Participant dies while a Service Provider, the Option may be exercised within twelve (12) months following the Participant’s death, or within such longer period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) to the extent that the Service Provider underOption is vested on the date of death, by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to the Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate 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. Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
7. Stock Appreciation Rights.
(a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of the Plan, is a bona fide [EMPLOYEE/ CONSULTANT/ MANAGEMENT COMPANY EMPLOYEE] _________________________________________________of the Company, entitledStock Appreciation Right may be granted to receive Options under CSE Policies.
LEXARIA CORP.
_________________________________________________Authorized Signatory
By signature hereunder, [Service Provider] hereby acknowledges receipt of this Option CommitmentProviders at any time and hereby consents to the Company’s collection, use and disclosure of his/her personal information for the purposes of the Company’s grant of the Option evidenced by this Option Commitment. [Service Provider] further acknowledges that, from time to time as will be determined by the Company mayAdministrator, in its sole discretion.
(b) Number of Shares. The Administrator will have complete discretion to determine the number of Shares subject to any Award of Stock Appreciation Rights.
(c) Exercise Price and Other Terms. The per Share exercise price for the Shares that will determine the amount of the payment to be required to disclose such personal information to securities regulatory authoritiesreceived upon exercise of a Stock Appreciation Right as set forth in Section 7(f) will be determined by the Administrator and stock exchanges and, by providing such personal informationwill be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. Otherwise, the Administrator, subject to the Company, [Service Provider] hereby expressly consents to such disclosure.
_________________________________________________[Service Provider]
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SCHEDULE “B”
LEXARIA CORP.STOCK OPTION PLAN DATED _______________, 2014
OPTION COMMITMENT[Vesting Provisions]
Notice is hereby given that, effective this ___________day of ________________________________, 20___ (the “Effective Date”),LEXARIA CORP.(the “Company”) has granted to ______________________________________________ (the “Service Provider”) an Option to acquire ________________________Shares (the “Optioned Shares”) until 4:30 p.m. (Vancouver Time) on the ____ day of _______________________, 20___ (the “Expiry Date”) at an exercise price (the “Exercise Price”) of $_____ per Optioned Share.
The grantprovisions of the Option evidenced hereby is made subjectPlan, will have complete discretion to determine the terms and conditions of Stock Appreciation Rights granted under the Plan.
(d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the Stock Appreciation Right, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.
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(e) Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 6(d) relating to the maximum term and Section 6(f) relating to exercise also will apply to Stock Appreciation Rights.
(f) Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:
(i) The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times
(ii) The number of Shares with respect to which the Stock Appreciation Right is exercised.
At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may be in cash, in Shares of equivalent value, or in some combination thereof.
8. Restricted Stock.
(a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.
(b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the restrictions on such Shares have lapsed.
(c) Transferability. Except as provided in this Section 8 or as the Administrator determines, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.
(d) Other Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.
(e) Removal of Restrictions. Except as otherwise provided in this Section 8, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator may determine. The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.
(f) Voting Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may not exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.
(g) Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares, unless the Administrator provides otherwise. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.
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(h) Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available for grant under the Plan.
9. Restricted Stock Units.
(a) Grant. Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator. After the Administrator determines that it will grant Restricted Stock Units, it will advise the Participant in an Award Agreement of the terms, conditions, and restrictions related to the grant, including the number of Restricted Stock Units.
(b) Vesting Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. The Administrator may set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals (including, but not limited to, continued employment or service), or any other basis determined by the Administrator in its discretion.
(c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as determined by the Administrator. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.
(d) Form and Timing of Payment. Payment of earned Restricted Stock Units will be made as soon as practicable after the date(s) determined by the Administrator and set forth in the Award Agreement. The Administrator, in its sole discretion, may settle earned Restricted Stock Units in cash, Shares, or a combination of both.
(e) Cancellation. On the date set forth in the Award Agreement, all unearned Restricted Stock Units will be forfeited to the Company.
10. Compliance With Code Section 409A. Awards will be designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements of Code Section 409A, except as otherwise determined in the sole discretion of the Administrator. The Plan and each Award Agreement under the Plan is intended to meet the requirements of Code Section 409A and will be construed and interpreted in accordance with such intent, except as otherwise determined in the sole discretion of the Administrator. To the extent that an Award or payment, or the settlement or deferral thereof, is subject to Code Section 409A the Award will be granted, paid, settled, or deferred in a manner that will meet the requirements of Code Section 409A, such that the grant, payment, settlement, or deferral will not be subject to the additional tax or interest applicable under Code Section 409A.
11. Leaves of Absence/Transfer Between Locations. Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of absence. A Participant will not cease to be an Employee in the case of (a) any leave of absence approved by the Company or (b) transfers between locations of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then six (6) months following the first (1st) day of such leave, any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.
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12. Limited Transferability of Awards. Unless determined otherwise by the Administrator, Awards may not be sold, pledged, assigned, hypothecated, or otherwise transferred in any manner other than by will or by the laws of descent and distribution, and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award may only be transferred (i) by will, (ii) by the laws of descent and distribution, and (iii) as permitted by all Applicable Laws, to the extent applicable.
13. Adjustments; Dissolution or Liquidation; Merger or Change in Control.
(a) Adjustments. 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, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, 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 of stock that may be delivered under the Plan and/or the number, class, and price of shares of stock covered by each outstanding Award.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.
(c) Merger or Change in Control.
(i) In the event of a merger of the Company with or into another corporation or other entity or a Change in Control, each outstanding Award will be treated as the Administrator determines (subject to the provisions of the following paragraph) without a Participant’s consent, including, without limitation, that (A) Awards will be assumed, or substantially equivalent Awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments as to the number and kind of shares and prices; (B) upon written notice to a Participant, that the Participant’s Awards will terminate upon or immediately prior to the consummation of such merger or Change in Control; (C) outstanding Awards will vest and become exercisable, realizable, or payable, or restrictions applicable to an Award will lapse, in whole or in part prior to or upon consummation of such merger or Change in Control, and, to the extent the Administrator determines, terminate upon or immediately prior to the effectiveness of such merger or Change in Control; (D) (I) the termination of an Award in exchange for an amount of cash and/or property, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights as of the date of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment), or (II) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion; or (E) any combination of the foregoing. In taking any of the actions permitted under this Section 13(c), the Administrator will not be obligated to treat all Awards, all Awards held by a Participant, or all Awards of the same type, similarly.
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(ii) In the event that the successor corporation does not assume or substitute for the Award (or portion thereof), the Participant will fully vest in and have the right to exercise all of his or her outstanding Options and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to Awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met. In addition, if an Option or Stock Appreciation Right is not assumed or substituted in the event of a merger or Change in Control, the Administrator will notify the Participant in writing or electronically that the Option or Stock Appreciation Right will be exercisable for a period of time determined by the Administrator in its sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.
(iii) For the purposes of this Section 13(c), an Award will be considered assumed if, following the merger or Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by holders of Shares for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or Change in Control is not solely common shares of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit, for each Share subject to such Award, to be solely common shares of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Shares in the merger or Change in Control.
(iv) Notwithstanding anything in this Section 13(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent; provided, however, a modification to such performance goals only to reflect the successor corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.
(v) Notwithstanding anything in this Section 13(c) to the contrary, if a payment under an Award Agreement is subject to Code Section 409A and if the change in control definition contained in the Award Agreement does not comply with the definition of “change of control” for purposes of a distribution under Code Section 409A, then any payment of an amount that is otherwise accelerated under this Section will be delayed until the earliest time that such payment would be permissible under Code Section 409A without triggering any penalties applicable under Code Section 409A.
14. Tax Withholding.
(a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof), the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof).
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(b) Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (i) paying cash, (ii) electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal to the minimum statutory amount required to be withheld, (iii) delivering to the Company already-owned Shares having a Fair Market Value equal to the statutory amount required to be withheld, provided the delivery of such Shares will not result in any adverse accounting consequences, as the Administrator determines in its sole discretion, or (iv) selling a sufficient number of Shares otherwise deliverable to the Participant through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld. The amount of the withholding requirement will be deemed to include any amount which the Administrator agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state, or local marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld.
15. No Effect on Employment or Service. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company, nor will they interfere in any way with the Participant’s right or the Company’s Stock Optionright to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws. Under no circumstances shall any person ceasing to be an employee, officer or consultant of the Company or any Affiliate be entitled to any compensation for any loss of any right or benefit under the Plan dated Octoberwhich such employee might otherwise have enjoyed but for termination of employment or engagement, whether such compensation is claimed by way of damages for wrongful or unfair dismissal, breach of contract or otherwise.
16. Date of Grant. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.
17. Term of Plan. Subject to Section 21 2011, (the “of the Plan,”) the Plan will become effective upon its adoption by the Board. Unless sooner terminated under Section 18, it will continue in effect for a term of ten (10) years from the later of (a) the effective date of the Plan, or (b) the earlier of the most recent Board or shareholder approval of an increase in the number of Shares reserved for issuance under the Plan.
18. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter, suspend, or terminate the Plan.
(b) Shareholder Approval. The Company will obtain shareholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration, suspension, or termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.
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19. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with all Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.
(c) Acceptance of Conditions. By participating in the Plan, each Participant shall be deemed to have accepted all the conditions of the Plan and the terms and conditions of any rules and regulations adopted by the Committee and shall be fully bound thereby.
20. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which are hereby incorporated.authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority will not have been obtained.
Optioned Shares
21. Shareholder Approval. The Plan will vest as follows:be subject to approval by the shareholders of the Company within twelve (12) months after the date the Plan is adopted by the Board. Such shareholder approval will be obtained in the manner and to the degree required under Applicable Laws.
22. Governing Law. The validity and construction of this Plan and the instruments evidencing the Awards hereunder shall be governed by the laws of the State of Delaware other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Plan and the instruments evidencing the Awards hereunder to the substantive laws of any other jurisdiction.
Approved by the Board of Directors: May 1, 2019
Approved by the Shareholders: [*]
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To exercise your Option, you must deliver to the Company a written notice specifying the number of Optioned Shares you wish to acquire, together with cash or a certified cheque payable to the Company for the aggregate Exercise Price. A certificate for the Optioned Shares so acquired will be issued by the Company’s transfer agent as soon as practicable thereafter and will bear a minimum four month non-transferability legend from the date of this Option Commitment.
The Company and the Service Provider represent that the Service Provider under the terms and conditions of the Plan is a bona fide [EMPLOYEE/ CONSULTANT/ MANAGEMENT COMPANY EMPLOYEE] _________________________________________________of the Company, entitled to receive Options under CSE Policies.
LEXARIA CORP.
_________________________________________________Authorized Signatory
By signature hereunder, [Service Provider] hereby acknowledges receipt of this Option Commitment and hereby consents to the Company’s collection, use and disclosure of his/her personal information for the purposes of the Company’s grant of the Option evidenced by this Option Commitment. [Service Provider] further acknowledges that, from time to time, the Company may be required to disclose such personal information to securities regulatory authorities and stock exchanges and, by providing such personal information to the Company, [Service Provider] hereby expressly consents to such disclosure.
_________________________________________________[Service Provider]
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Proxy
ANNUAL MEETING OF STOCKHOLDERS OF LEXARIA CORP. (the "Company")TO BE HELD AT 400 – 570 Granville St, Vancouver BC V6C 3P1on Wednesday, June 11, 2014, at 1:00 P.M. (PACIFIC TIME)
The undersigned stockholder("Registered Stockholder") of the Company hereby appoints Bal Bhullar,a Director of the Company, or failing this person, Chris Bunka,a Director of the Company, or, in the place of the foregoing, ______________________________ as proxyholder for and on behalf of the Registered Stockholder with the power of substitution to attend, act and vote for and on behalf of the Registered Stockholder in respect of all matters that may properly come before the Meeting of the Registered Stockholders of the Company and at every adjournment thereof, to the same extent and with the same powers as if the undersigned Registered Stockholder were present at the said Meeting, or any adjournment thereof.
The Registered Stockholder hereby directs the proxyholder to vote the securities of the Company registered in the name of the Registered Stockholder as specified herein.
The undersigned Registered Stockholder hereby revokes any proxy previously given to attend and vote at said Meeting.
SIGN HERE: ________________________________________________________________
Please Print Name: ___________________________________________________________
Date: ______________________________________________________________________
Number of Shares Represented by Proxy: ________________________________________
THIS PROXY FORM IS NOT VALID UNLESS IT IS SIGNED AND DATED. SEE IMPORTANT INFORMATION AND INSTRUCTIONS ON REVERSE.
Resolutions(For full detail of each item, please see the enclosed Notice of Meeting and Information Circular)
INSTRUCTIONS FOR COMPLETION OF PROXY
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(a) appoint one of the management proxyholders named on this Instrument of Proxy, by leaving the wording appointing a nominee as is (i.e. do not strike out the management proxyholders shown and do not complete the blank space provided for the appointment of an alternate proxyholder).Where no choice is specified by a Registered Stockholder with respect to a resolution set out herein, a management appointee acting as a proxyholder will vote in favour of each matter identified on this Instrument of Proxy and for the nominees of management for Directors and auditor as identified in this Instrument of Proxy; OR
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If a Registered Stockholder has submitted an Instrument of Proxy,the Registered Stockholder may still attend the Meeting and may vote in person. To do so, the Registered Stockholder must record his/her attendance with the scrutineers before the commencement of the Meeting and revoke, in writing, the prior votes by proxy.
To be represented at the Meeting, this Instrument of Proxy must be received by Olympia Trust Company no later than forty eight (48) hours (excluding Saturdays, Sundays and holidays) prior to the time of the Meeting, or adjournment thereof, or may be accepted by the Chairman of the Meeting prior to the commencement of the Meeting.
VOTING METHODS
