GameSquare Implements Restricted Share Unit Compensation Plan

- June 21st, 2021

GameSquare Esports Inc. an international gaming and esports company, announced today that it has implemented a restricted share unit compensation plan . The following is a summary of the material provisions of the RSU Plan. It is not a comprehensive discussion of all of the terms and conditions of the RSU Plan and it is qualified in its entirety by the full text of the RSU Plan, a copy of which can be accessed on …

GameSquare Esports Inc. (CSE: GSQ; FRA: 29Q1) (“ GameSquare ” or the “ Company ”), an international gaming and esports company, announced today that it has implemented a restricted share unit compensation plan (the “ RSU Plan ”). The following is a summary of the material provisions of the RSU Plan. It is not a comprehensive discussion of all of the terms and conditions of the RSU Plan and it is qualified in its entirety by the full text of the RSU Plan, a copy of which can be accessed on the Company’s SEDAR profile at www.sedar.com. Readers are advised to review the full text of the RSU Plan to fully understand all terms and conditions of the RSU Plan.

RSU Plan Summary

Purpose and Overview: The RSU Plan is intended to bring the Company’s compensation policies in line with trends in industry compensation practice, which includes a move towards restricted share units (“ RSUs ”), and to preserve the working capital of the Company by paying Eligible Persons (as defined below) compensation in the form of share-based awards as opposed to cash. Eligible Persons who are granted RSUs under the RSU Plan are collectively referred to herein as ” Participants ” or ” Grantees “. RSUs are performance-based share units which will be granted to Eligible Persons under the RSU Plan based on both individual and corporate performance criteria as determined by the board of directors of the Company (the “ Board ”) or a committee appointed by the Board that is charged with exercising the powers and responsibility as to a specific matter in question affecting the RSU Plan or a RSU (the “ Granting Authority ”).

The RSU Plan is anticipated to advance the interests of the Company by encouraging Participants to receive equity-based compensation and incentives, thereby (i) increasing the proprietary interests of such persons in the Company, (ii) aligning the interests of such persons with the interests of the shareholders of the Company generally, (iii) encouraging such persons to remain associated with the Company, and (iv) furnishing such persons with additional incentive in their efforts on behalf of the Company. The Board also contemplates that through the RSU Plan, the Company will be better able to compete for and retain the services of the individuals needed for the continued growth and success of the Company. The RSU Plan is intended to complement the Company’s stock option plan (the “ Stock Option Plan ”) by allowing the Company to offer a broader range of incentives to diversify and customize the rewards for Eligible Persons.

Administration: Under the RSU Plan, the Board may, at any time, appoint a committee to, among other things, interpret, administer and implement the RSU Plan on behalf of the Board in accordance with such terms and conditions as the Board may prescribe, consistent with the RSU Plan.

Eligible Persons: Under the RSU Plan, RSUs may be granted to directors, officers, employees and consultants of the Company, other than persons involved in Investor Relations Activities relating to the Company (as that term is defined in the policies of the Canadian Securities Exchange (the “ Exchange ”)) (collectively the ” Eligible Persons “). A Participant or Grantee is an Eligible Person to whom a RSU has been granted under the RSU Plan.

Number of Securities Issued or Issuable: Subject to the adjustment provisions provided for in the RSU Plan and applicable rules and regulations of all regulatory authorities to which the Company is subject (including any stock exchange), the total number of common shares of the Company (the “ Common Shares ”) that may be reserved for issue in connection with the RSUs granted pursuant to the RSU Plan shall not exceed 11,497,315 Common Shares, being 10% of the total issued and outstanding Common Shares on the date the RSU Plan was adopted by the Board. Notwithstanding the foregoing, the Common Shares reserved for issue under the RSU Plan, together with any Common Shares reserved for issue pursuant to the Stock Option Plan, may not exceed 10% of the total issued and outstanding Common Shares (on a non-diluted basis) on the date of a grant of RSUs to a Participant.

If any RSU is cancelled in accordance with the terms of the RSU Plan or the agreements evidencing the grant, the Common Shares reserved for issue pursuant to such RSU shall, upon cancellation of such RSUs, revert to the RSU Plan and will be available for other RSUs.

Maximum Grant to Any One Participant:

The issue of RSUs to Eligible Persons is subject to, among others, the following restrictions:

  1. the number of Common Shares which may be reserved for issue pursuant to the RSU Plan together with the Common Shares which may be reserved for issue pursuant to any other share compensation arrangements of the Company, including the Stock Option Plan, to any one Eligible Person within a 12 month period may not exceed in the aggregate 5% of the number of Common Shares issued and outstanding on a non-diluted basis on the date of the grant of the RSU unless the Company has received disinterested shareholder approval;
  2. the number of Common Shares which may be reserved for issue pursuant to the RSU Plan together with the Common Shares which may be reserved for issue pursuant to any other share compensation arrangements of the Company, including the Stock Option Plan, to all insiders of the Company may not exceed 10% of the number of Common Shares issued and outstanding on a non-diluted basis at any point in time unless the Company has received disinterested shareholder approval;
  3. the number of Common Shares which may be reserved for issue pursuant to the RSU Plan together with the Common Shares which may be reserved for issue pursuant to any other share compensation arrangements of the Company, including the Stock Option Plan, to all insiders of the Company within a 12 month period may not exceed in the aggregate 10% of the number of Common Shares issued and outstanding on a non-diluted basis on the date of the grant of the RSU unless the Company has received disinterested shareholder approval; and
  4. the number of Common Shares which may be reserved for issue pursuant to the RSU Plan together with the Common Shares which may be reserved for issue pursuant to any other share compensation arrangements of the Company, including the Stock Option Plan, to any one Consultant in any 12-month period may not exceed 2% of the number of Common Shares issued and outstanding on a non-diluted basis on the date of the grant of the RSU.

Restricted Share Units: Restricted Share Units granted pursuant to the RSU Plan will be used to compensate Participants for their individual performance-based achievements and are intended to supplement stock option awards in this specific respect. RSUs granted pursuant to the RSU Plan will be used as a means of reducing the cash payable by the Company in respect of a Participant’s compensable amounts. The goal of such grants is to more closely tie RSUs to individual performance based on established financial, personal or other performance criteria as determined by the Board or Granting Authority, as applicable, and to more closely align the interests of the Participant with those of the Company and its shareholders.

Vesting and Term of Restricted Share Units: The Granting Authority may determine the conditions to the vesting of RSUs at the time of grant. The Granting Authority shall also determine the term of RSUs granted under the RSU Plan, provided that no RSU shall be outstanding for a period greater than ten years, or such shorter period as may be required pursuant to applicable tax laws.

If a Grantee dies or is terminated without cause, any non-vested RSUs granted prior to such death or termination will be cancelled 90 days following the date of death or termination without liability or compensation and will be of no further force and effect after such time. Where the Grantee voluntarily terminates his/her employment with the Company or is otherwise terminated by the Company for cause, or, in the case of a director of the Company, is otherwise removed as a result of losing his/her eligibility to serve on the Board due to an order by a regulatory body or stock exchange or for culpable conduct as determined by the Granting Authority, all non-vested RSUs of the Grantee shall be immediately cancelled without compensation or liability therefor and be of no further force and effect.

In the event of a Change of Control (as defined in the RSU Plan), the Granting Authority may take any action it deems necessary or desirable with respect to the outstanding RSUs, including accelerating the vesting date of RSUs to the date which is immediately preceding the Change of Control or otherwise waiving all restrictions and conditions of RSUs. Moreover, if approved by the Board prior to or within 30 days after such time as a Change of Control is be deemed to have occurred, the Board has the right to require that all or any portion of the RSUs be settled and discharged in cash based on the “cash value” of such RSUs in lieu of settlement by issue of Common Shares.

Settlement of Vested Restricted Share Units: Subject to the provisions of the RSU Plan with respect to Changes of Control, payment to the Grantee in respect of vested RSUs will be made in the form of Common Shares and will be evidenced by book entry registration or by a share certificate registered in the name of the Grantee as soon as practicable following the date on which the RSUs become vested. Settlement of RSUs shall be made by delivery of one Common Share for each such RSU then being settled. Common Shares delivered to Participants in connection with the settlement of vested RSUs may be authorized by unissued Common Shares from the treasury of the Company or Common Shares purchased in the open-market or in private transactions.

Common Shares issued pursuant to the settlement of vested RSUs shall not be available for subsequent grants of RSUs, unless the Board approves the reversion of such Common Shares to the RSU Plan.

Assignability: Unless otherwise provided in an agreement evidencing a RSU, RSUs granted under the RSU Plan are non-transferable and non-assignable to anyone other than to the estate of a Participant in the event of death and then only in accordance with the terms of the RSU Plan.

Procedure for Amending of the RSU Plan: Subject to the terms of the RSU Plan and any applicable requirements of the Exchange, the Granting Authority has the right at any time to amend, suspend or terminate the RSU Plan, or to amend any RSU awarded thereunder, provided that disinterested shareholder approval may be required in respect of certain amendments. Notwithstanding the foregoing, shareholder approval is not required for the amendments set out below:

  1. amendments of a technical, clerical or “housekeeping” nature including, without limiting the generality of the foregoing, any amendments for the purpose of curing any ambiguity, error or omission in the RSU Plan or to correct or supplement any provision of the RSU Plan that is inconsistent with any other provision of the RSU Plan;
  2. amendments necessary to comply with the provisions of applicable law and the applicable rules of the Exchange;
  3. amendments necessary in order for RSUs to qualify for favourable treatment under the Income Tax Act (Canada) or under the United States Internal Revenue Code;
  4. amendments respecting administration of the RSU Plan;
  5. any amendments to the vesting provision of the RSU Plan or any RSU;
  6. any amendments to the early termination provisions of the RSU Plan or any RSU, whether or not such RSU is held by an insider of the Company, provided such amendment does not entail an extension of a RSU beyond the original expiry date;
  7. any amendments in the termination provisions of the RSU Plan or any RSU, other than a RSU held by an insider of the Company in the case of an amendment extending the term of a RSU, provided any such amendment does not entail an extension of the expiry date of such RSU beyond its original expiry date;
  8. adjustments to outstanding RSUs in the event of a Change of Control or similar transaction entered into by the Company;
  9. amendments necessary to suspend or terminate the RSU Plan; and
  10. any other amendment, whether fundamental or otherwise, not requiring shareholder approval under applicable law or the rules of the Exchange.

Other Material Information: Appropriate adjustments to the RSU Plan and to RSUs granted thereunder will be made by the Company to give effect to adjustments in the number and type of Common Shares (or other securities or other property) resulting from subdivisions, consolidations, substitutions, or reclassifications of Common Shares, payment of stock dividends or other prescribed changes in the Company’s capital.

RSU Grant

In addition, the Company today announced that, subject to regulatory approval, it has granted 2,000,000 RSUs to the Company’s Chief Executive Officer in accordance with the RSU Plan. Half of the RSUs granted vest immediately, with the other half vesting 12 months following the date of grant. The Common Shares underlying the RSUs are subject to a four month hold period in accordance with the policies of the Exchange.

About GameSquare Esports Inc.

GameSquare Esports Inc. is an international gaming and esports company headquartered in Toronto, Canada. The Company is seeking to acquire additional assets and entities serving the gaming and esports markets and, more broadly, in sports and entertainment. GameSquare’s acquisition of Code Red Esports Ltd. (“ Code Red ”), an esports talent agency, provided an initial foothold in Europe through its UK operations. Code Red represents leading on-screen talent, players and influencers and works with leading global brands to develop influencer campaigns and esports marketing strategies. The Company’s second acquisition of Reciprocity Corp. provides access to Asia, Latin America and North America. Its gaming and esports assets include: a CrossFire franchise in China that it owns with its partner LGD Gaming, a 40% interest in a League of Legends team that competes in Latin America, and, its wholly owned subsidiary Company, Gaming Community Network, a digital media company focusing on the gaming and esports audience based in Los Angeles, USA.

For further information about GameSquare, contact Kevin Wright, President:

E: ir@gamesquare.com
P: (416) 861-2267

Forward-Looking Information

This news release contains “forward-looking information” and “forward-looking statements” (collectively, ” forward-looking statements “) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: grants of RSUs pursuant to the RSU Plan, the business, objectives and operations of the Company and the Company’s ability to execute its business plan. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, GameSquare assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

Neither the Canadian Securities Exchange (“ CSE ”) nor its Market Regulator (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.


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