Eupraxia Pharmaceuticals Inc. — AGM Information 2021

Nov 10, 2021

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EUPRAXIA PHARMACEUTICALS INC.

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS OF EUPRAXIA PHARMACEUTICALS INC. TO BE HELD ON DECEMBER 3, 2021

MANAGEMENT INFORMATION CIRCULAR

DATED: October 27, 2021

EUPRAXIA PHARMACEUTICALS INC.

Suite 201, 2067 Cadboro Bay Road Victoria, British Columbia Canada V8R 5G4

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the annual general meeting (the “ Meeting ”) of the shareholders of Eupraxia Pharmaceuticals Inc. (the “ Company ” or “ Eupraxia ”) will be held at 10:00 a.m . (Pacific time) - on Friday, December 3, 2021 via live webcast at https://virtual meetings.tsxtrust.com/1223 (control number provided from TSX Trust Company, case sensitive password: eupraxia2021).

The following items of business will be covered at the Meeting:

1. to receive and consider the audited financial statements of the Company for the years ended December 31, 2020 and 2019, together with the auditor’s report thereon;

2. to set the number of directors for the ensuing year at six;

3. to elect the directors for the ensuing year;

4. to appoint an auditor for the ensuing year and authorize the directors to approve the remuneration to be paid to the auditor;

5. to consider, and if thought fit, pass with or without amendment, an ordinary resolution of disinterested shareholders to ratify, confirm and approve the amendments to the Company’s stock option plan (the “ Existing Option Plan ”), as previously approved by the board of directors of the Company (the “ Board ’), and as set out in Schedule A to the accompanying Management Information Circular (the “ Circular ”), and to reserve common shares in the capital of the Company (the “ Common Shares ”) from treasury for issuance under the amended Option Plan (as amended, the “ Amended Option Plan ”), the full text of which is set out in the accompanying Circular, under the heading “ Ratification of Amendment to Option Plan ”;

6. to consider, and if thought fit, pass with or without amendment, an ordinary resolution of disinterested shareholders to ratify, confirm and approve a previous grant of stock options to Bruce Cousins, President and Chief Financial Officer of the Company, which are exercisable for an aggregate of up to 275,000 Common Shares under the Company’s Amended Option Plan, as previously approved by the Board and as more particularity described in the accompanying Circular under the heading “ Ratification of Grant under the Amended Option Plan ”.

7. to consider, and if thought fit, pass with or without amendment, an ordinary resolution to ratify, confirm, and approve the adoption of the Company’s advance notice policy (the “ Advance Notice Policy ”), as previously approved by the Board and is more particularly described in the accompanying Circular, under the heading “ Approval and Ratification of the Advance Notice Policy” and which the full text is set out in Schedule B to the accompanying Circular; and

8. to transact such other business as may properly come before the Meeting.

Virtual only format

Out of an abundance of caution, to proactively deal with the health impact of coronavirus disease, also known as COVID-19, to mitigate risks to the health and safety of our communities, shareholders, employees and other stakeholders, and in compliance with current government direction and advice to which the Company will continue to adhere between the date of this Notice of Annual General Meeting of Shareholders and the date of the Meeting, the Company will hold the Meeting in a virtual- - only format, which will be conducted via live audio and slideshow webcast at https://virtual meetings.tsxtrust.com/1223 . Eligible shareholders attending the Meeting may ask questions during the meeting, as described in more detail in the Management Information Circular (the “Circular”). Shareholders will not be able to attend the Meeting in person. You can find more information about voting and asking questions during the Meeting in the guide by TSX Trust Company attached as Schedule D to the Circular.

Registered shareholders and duly appointed proxyholders will be able to attend, submit questions and vote at the Meeting online at https://virtual-meetings.tsxtrust.com/1223. Non-registered (beneficial) shareholders who have not duly appointed themselves as proxyholder will be able to attend the Meeting as guests, but guests will not be able to vote or ask questions at the Meeting.

You have the right to vote

You are entitled to receive notice of and vote at the Meeting, or any adjournment, if you are a registered holder of Common Shares in the capital of the Company (each, a “ Common Share ”) at the close of business on October 25, 2021.

Your vote is important

If you are a registered shareholder or duly appointed proxyholder, you are entitled to vote at the Meeting online at https://virtual-meetings.tsxtrust.com/1223 (control number provided from TSX Trust Company, case sensitive password: eupraxia2021). If you are unable to attend the Meeting, you are requested to vote your Common Shares using the form of proxy or voting instruction form, as applicable, enclosed with the Circular.

Registered shareholders should complete and sign the form of proxy and return it in the envelope provided. Alternative methods of voting by proxy are outlined in the Circular. If you are a non-registered shareholder, you should review the voting instruction form provided by your intermediary, which sets out the procedures to be followed for voting Common Shares held through intermediaries.

Shareholders who wish to appoint a proxyholder other than the persons designated by us (including a nonregistered shareholder who wishes to appoint themselves as proxyholder) must carefully follow the instructions on their form of proxy or voting instruction form, as applicable. These instructions include the additional step of registering such proxyholder with our transfer agent, TSX Trust Company, after submitting their form of proxy or voting instruction form, as applicable. Failure to register the proxyholder will result in the proxyholder not receiving a control number that is required for them to vote at the Meeting online and, consequently, only being able to attend the Meeting online as a guest. To register as a proxyholder, the shareholder or the proxyholder MUST contact TSX Trust Company by emailing tsxtrustproxyvoting@tmx.com, and complete the Request for Control Number form at https://tsxtrust.com/resource/en/75, so that TSX Trust Company may provide the proxyholder with a control number via email. Non-registered shareholders located in the United States must also provide TSX Trust Company with a duly completed legal proxy if they wish to vote at the Meeting or appoint a thirdparty as their proxyholder.

Proxies must be received by our transfer agent, TSX Trust Company, by mail at 100 Adelaide Street West, Suite 301, Toronto, Ontario, Canada, M5H 4H1, Attention: Proxy Department; by facsimile to 1416-5959593; or online with your 12-digit control number at www.voteproxyonline.com, by no later than 10:00 a.m. (Vancouver time) on December 1, 2021 or two business days before the commencement of any adjournment(s) or postponement(s) of the Meeting.

Shareholders can contact our transfer agent, TSX Trust Company, toll free at 1-866-600-5869 or by email at TMXEInvestorServices@tmx.com, for more information regarding notice-and-access or with questions regarding how to vote their Common Shares.

DATED at Vancouver, British Columbia this 27[th] day of October, 2021.

ON BEHALF OF THE BOARD OF DIRECTORS

Signed: James A. Helliwell James A. Helliwell Chief Executive Officer and Director

EUPRAXIA PHARMACEUTICALS INC.

Suite 201, 2067 Cadboro Bay Road Victoria, British Columbia Canada V8R 5G4

MANAGEMENT INFORMATION CIRCULAR

as at October 27, 2021

GENERAL PROXY INFORMATION

This Management Information Circular (the “Circular”) is furnished in connection with the solicitation of proxies by the management of Eupraxia Pharmaceuticals Inc. for use at the annual general meeting (the “Meeting”) of its shareholders to be held on Friday, December 3, 2021 at the time and place and for the purposes set forth in the accompanying notice of the Meeting.

In this Circular, references to the “ Company ”, “ Eupraxia ”, “ we ” and “ our ” refer to Eupraxia Pharmaceuticals Inc. “ Common Shares ” means common shares without par value in the capital of the Company. “ Non-Registered Shareholders ” or “ Beneficial Shareholders ” means shareholders who do not hold Common Shares in their own name and “ intermediaries ” refers to brokers, investment firms, clearing houses and similar entities that own securities on behalf of Beneficial Shareholders.

All amounts are in Canadian dollars (“$” or “C$”), unless otherwise stated.

Out of an abundance of caution, to proactively deal with the health impact of coronavirus disease, also known as COVID-19, to mitigate risks to the health and safety of our communities, shareholders, employees and other stakeholders, and in compliance with current government direction and advice to which the Company will continue to adhere between the date of this Circular and the date of the Meeting, the Company will hold the Meeting in a virtual-only format, which will be conducted via live audio and slideshow webcast at https://virtual-meetings.tsxtrust.com/1223 (control number provided from TSX Trust Company, case sensitive password: eupraxia2021). Eligible shareholders attending the Meeting may ask questions during the meeting, as described in more detail in this Circular. Shareholders will not be able to attend the Meeting in person. You can find more information about voting and asking questions during the Meeting in the guide by TSX Trust Company attached as Schedule D to this Circular.

Solicitation of Proxies

The solicitation of proxies will be primarily by mail, but proxies may be solicited personally or by telephone by directors, executive officers and regular employees of the Company. The Company will bear all costs of this solicitation. We have arranged for intermediaries to forward the meeting materials to beneficial owners of Common Shares held as of the Record Date (as defined herein) by those intermediaries and we may reimburse the intermediaries for their reasonable fees and disbursements in that regard.

VOTING INFORMATION

Shareholders who wish to appoint a proxyholder other than the person designated by the Company on the proxy form or voting instruction form (including a Non-Registered Shareholder who wishes to appoint themselves as proxyholder in order to attend and vote at the Meeting online) must carefully follow the instructions in this Circular and on their proxy form or voting instruction form. These instructions include the additional step of registering such proxyholder with our transfer agent, TSX Trust Company, after

submitting their proxy form or voting instruction form. Failure to register the proxyholder will result in the proxyholder not receiving a control number that is required for them to vote at the Meeting and, consequently, only being able to attend the Meeting online as a guest.

The following information provides guidance on how to vote your Common Shares.

Your vote is important

As a shareholder of Eupraxia, it is very important that you read this information carefully and then vote your Common Shares, either by proxy or by attending the online Meeting.

Voting by proxy means that you are giving the person or people named on your proxy form (each a “ proxyholder ”) the authority to vote your Common Shares for you at the Meeting or any adjournment or postponement thereof. A proxy form is included in this package.

If you vote by proxy, the individuals who are named on the proxy form will vote your Common Shares for you, unless you appoint someone else to be your proxyholder. You have the right to appoint a person or company of your choice who need not be a shareholder to represent you at the Meeting other than the individuals designated in the enclosed proxy form. If you appoint someone else, he or she must attend the Meeting to vote your Common Shares. See “ Attending and voting at the virtual meeting ” or “ Voting by Proxy ” for additional information.

If you are voting your Common Shares by proxy, our transfer agent, TSX Trust Company, or other agents we appoint must receive your signed proxy form by 10:00 a.m. (Vancouver time) on December 1, 2021 or if the Meeting is adjourned or postponed, prior to 10:00 a.m. (Vancouver time) on the second business day preceding the day of the Meeting.

Attending and voting at the virtual meeting

Out of an abundance of caution, to proactively deal with the health impact of coronavirus disease, also known as COVID-19, to mitigate risks to the health and safety of our communities, shareholders, employees and other stakeholders, and in compliance with current government direction and advice to which the Company will continue to adhere between the date of this Circular and the date of the Meeting, the Company will hold the Meeting in a virtual-only format, which will be conducted via live audio and slideshow webcast at https://virtual-meetings.tsxtrust.com/1223. Eligible shareholders attending the Meeting may ask questions during the meeting, as described in more detail in this Circular. Shareholders will not be able to attend the Meeting in person

Registered shareholders and duly appointed proxyholders will be able to attend, participate and vote at the Meeting online at https://virtual-meetings.tsxtrust.com/1223. Such persons may enter the Meeting by clicking “I have a control number” and entering a valid control number and the Password: eupraxia2021 before the start of the Meeting.

Registered shareholders: The control number located on the proxy form or in the email notification you received is your control number. If you are a registered shareholder and choose to vote online at the Meeting, you do not need to complete or return your proxy form. You can login to the Meeting and complete a ballot online during the Meeting.

Duly appointed proxyholders: TSX Trust Company will provide the proxyholder with a control number by e-mail after the proxy voting deadline has passed and the proxyholder has been duly appointed AND registered as described in “ How can I appoint a third party as my proxyholder ” below.

Guests, including Non-Registered Shareholders who have not duly appointed themselves as proxyholder can login to the Meeting by clicking “I am a guest” and completing the online registration form. Guests will be able to listen to the Meeting but will not be able to vote or ask questions at the Meeting.

If you attend the Meeting, it is important that you are connected to the internet at all times during the Meeting in order to vote when balloting commences. You should ensure you have a strong, preferably highspeed internet connection wherever you intend to participate in the Meeting. You will need the latest versions of Chrome, Safari, Edge or Firefox. Please do not use Internet Explorer. Online check-in will begin 30 minutes prior to the Meeting on December 3, 2021 at 9:30 a.m. (Vancouver time). The Meeting will begin promptly at 10:00 a.m. (Vancouver time) on December 3, 2021, unless otherwise adjourned or postponed. You should allow ample time to ensure your web browser and internet connection are working properly and for online check-in procedures. For any technical difficulties experienced during the check-in process or during the Meeting, please refer to the TSX Trust Virtual Meeting Guide mailed to shareholders along as well as the notice of the Meeting, this Circular and the form of proxy or voting instruction form, as applicable (collectively, the “ Meeting Materials ”).

Voting by Proxy

Registered shareholders

You are a registered shareholder if your name appears on your share certificate or on the register maintained by our transfer agent, TSX Trust Company. If you are a registered shareholder, you will receive a proxy form.

Registered shareholders have three options to vote by proxy:

• On the Internet

Go to www.voteproxyonline.com and follow the instructions on screen. You will need the 12-digit control number listed on your proxy. You do not need to return your proxy form if you vote on the internet.

 By mail

Complete, sign and date the accompanying proxy form and return it in the envelope we have provided. Please see “Completing the Proxy Form” on the enclosed form for more information.

 By fax

Complete, sign and date the accompanying proxy form and send it by fax to 416-595-9593. Please see “ Completing the Proxy Form” on the enclosed form for more information.

If you vote by proxy, the individuals named on the enclosed proxy form will vote your Common Shares for you unless you appoint someone else to be your proxyholder. You have the right to appoint a person or company of your choice who need not be a shareholder to represent you at the Meeting online other than the persons designated in the enclosed proxy form. See below under “ How can I appoint a third party as my proxyholder ” for instructions.

Changing your vote

You may change a vote you made by proxy by:

• voting again online at www.voteproxyonline.com before 10:00 a.m. (Vancouver time) on December 1, 2021; or

• completing a proxy form that is dated later than the proxy form you are changing and mailing it to TSX Trust Company so that it is received at the address indicated before 10:00 a.m. (Vancouver time) on December 1, 2021.

You may revoke a vote you made by proxy by:

• making a request in writing to the Chair of the Meeting by email at info@eupraxiapharma.com during the Meeting or any adjournment or postponement thereof, or before any vote in respect of which the proxy has been given or taken. The written request can be from you or your authorized attorney.

If as a registered shareholder you login to the Meeting online using your control number and you accept the terms and conditions, you will be provided the opportunity to vote by online ballot on the matters put forth at the Meeting. If you vote by online ballot at the Meeting, you will be revoking any and all previously submitted proxies. If you do not vote by online ballot at the Meeting, your previously submitted proxies will not be revoked and will continue to be counted by TSX Trust Company in tabulating the vote with respect to the matters put forth at the Meeting.

Non-Registered Holders

You are a Non-Registered Holder if your Common Shares are registered either in the name of an Intermediary that represents the Non-Registered Holder in respect of its shares or in the name of a depository (a “ Depository ”, such as CDS Clearing and Depository Services Inc.) of which the Intermediary is a participant.

We have distributed copies of the Meeting Materials to Intermediaries for onward distribution to nonobjecting Non-Registered Holders and to Non-Registered Holders that are objecting beneficial owners. The Company does not intend to pay for intermediaries to forward the Notice Package to objecting NonRegistered Holders. Accordingly, objecting Non-Registered Holders will not receive the Meeting Materials unless their respective intermediaries assume the cost of forwarding such documents to them. Intermediaries are required to forward the Meeting Materials to non-objecting Non-Registered Holders unless a non-objecting Non-Registered Holder has waived the right to receive such materials. Intermediaries often use service companies to forward the Meeting Materials to Non-Registered Holders. Generally, Non-Registered Holders who have not waived the right to receive the Meeting Materials will receive a package from their Intermediary containing either:

• (a) a voting instruction form that must be properly completed and signed by the Non-Registered Holder and returned to the Intermediary in accordance with the instructions on the voting instruction form;

or, less typically,

• (b) a proxy form that has already been stamped or signed by the Intermediary that is restricted as to the number of shares beneficially owned by the Non-Registered Holder but which otherwise has not been completed. In this case, the Non-Registered Holder who wishes to submit a proxy should properly complete the proxy form and deposit it with TSX Trust Company at the address set forth in the Meeting Notice.

The purpose of these procedures is to permit Non-Registered Holders to direct the voting of Common Shares that they beneficially own.

We do not have access to the names or holdings of all of our Non-Registered Holders. Should a NonRegistered Holder, who receives either a voting instruction form or a proxy form, wish to attend and vote

at the Meeting online (or have another person attend and vote on behalf of the Non-Registered Holder), the Non-Registered Holder should follow the instructions contained on the voting instruction form or proxy form within the time periods specified and appoint themselves (or another person to vote on their behalf). In either case, Non-Registered Holders should carefully follow the instructions of their Intermediaries and service companies. If you are a Non-Registered Holder and have not received a package containing a voting instruction form or proxy form, please contact your Intermediary. See above for additional information on how to log in to the Meeting online and see “ How can I appoint a third party as my proxyholder ” below for additional information on how Non-Registered Holders can appoint themselves as proxyholder.

Changing your vote

A Non-Registered Holder may revoke a voting instruction form or proxy which has been given to an Intermediary by written notice to the Intermediary or by submitting a voting instruction form or proxy bearing a later date in accordance with the applicable instructions. In order to ensure that an Intermediary acts upon a revocation of a proxy or voting instruction form, the written notice should be received by the Intermediary well in advance of the Meeting.

Completing the proxy form or voting instruction form

You can choose to vote “For”, “Against” or “Withhold”, depending on the items listed on the proxy form.

When you sign the proxy form, you authorize the directors and officers of the Company who are named in the proxy form to vote your Common Shares for you at the Meeting according to your instructions, unless you have appointed someone else to act as your proxy. If you return your proxy form and do not tell us how you want to vote your Common Shares, your vote will be counted:

• FOR the election of each of the directors nominated for election as listed in this Circular;

• FOR setting the number of directors for the ensuing year at six;

• FOR the appointment of Baker Tilly WM LLP, Chartered Professional Accountants as auditor of the Company and the authorization of the directors to fix the auditor’s remuneration;

• FOR the amendments to the Existing Option Plan as previously approved by the board of directors of the Company (the “Board”), and as set out in Schedule A to the Circular, and to reserve the Common Shares from treasury for issuance under the Amended Option Plan;

• FOR the previous grant of stock options to Bruce Cousins, President and Chief Financial Officer of the Company, which are exercisable for an aggregate of up to 275,000 Common Shares under the Company’s Amended Option Plan, as previously approved by the Board and as more particularity described in the accompanying Circular;

• FOR the Advance Notice Policy, as previously approved by the Board and is more particularly described in the accompanying Circular, under the heading “ Approval and Ratification of the Advance Notice Policy” and which the full text is set out in Schedule B to the accompanying Circular.

If you are appointing someone else to vote your Common Shares for you at the Meeting, write the name of the person voting for you in the space provided AND register such proxyholder with our transfer agent,

TSX Trust Company after submitting your proxy form. If you do not specify how you want your Common Shares voted, your proxyholder will vote your Common Shares as he or she sees fit on each item and on any other matter that may properly come before the Meeting.

If you are an individual shareholder, you or your authorized attorney must sign the form. If you are a corporation or other legal entity, an authorized officer or attorney must sign the form.

If you have questions on how to complete your proxy form, please contact TSX Trust Company – Investor Services at 1-866-600-5869.

How can I appoint a third party as my proxyholder?

The following applies to shareholders who wish to appoint another person of their choice to represent them at the Meeting (a “ third party proxyholder ”), other than the management proxyholders designated in the enclosed proxy form or voting instruction form accompanying this Circular. This includes Non-Registered Holders who wish to appoint themselves as proxyholder to attend, ask questions and vote online at the Meeting.

Shareholders who wish to appoint a third party proxyholder to represent them and vote their Common Shares at the Meeting MUST submit their proxy form or voting instruction form, as applicable, appointing that third party proxyholder, AND register that third party proxyholder online, as described below. Registering your third party proxyholder is an additional step that must be completed AFTER you have submitted your proxy form or voting instruction form. Failure to register your third party proxyholder will result in the third person proxyholder not receiving a Control Number, which is used as their online sign-in credentials and is required for them to vote at the Meeting.

Step 1 – Submit your proxy form or voting instruction form: To appoint a third party proxyholder, insert that person’s name in the blank space provided in the proxy form or voting instruction form (if permitted) and follow the instructions for submitting such proxy form or voting instruction form prior to the proxy cut-off time. This must be completed before registering the proxyholder, which is an additional step to be completed once you have submitted your proxy form or voting instruction form.

Step 2 – Register your proxyholder: To register as a third party proxyholder, the proxyholder must contact TSX Trust Company at tsxtrustproxyvoting@tmx.com to request a control number to be represented and voted at the Meeting by 10:00 a.m. (Vancouver time) on December 1, 2021 and provide TSX Trust Company with the required proxyholder contact information so that TSX Trust Company may verify the appointment and provide the proxyholder with a Control Number via email. Without a Control Number, proxyholders will not be able to vote or ask questions at the Meeting. They will only be able to attend the Meeting online as a guest. It is the responsibility of shareholders to advise their proxyholder to contact TSX Trust Company to request a control number. Third party proxyholders can also download a form to request a control number at https://www.tsxtrust.com/resource/en/75.

Make sure that the person you appoint as your third party proxyholder is aware that he or she has been appointed and attends the Meeting online.

If you are a Non-Registered Holder and wish to vote online at the Meeting, you have to insert your own name in the blank space provided on the proxy form or voting instruction form sent to you by your Intermediary, follow the applicable instructions provided by your Intermediary, AND register yourself as your proxyholder, as described below. By doing so, you are instructing your Intermediary to appoint you as proxyholder. It is important that you comply with the signature and return instructions provided by your Intermediary.

If you are a Non-Registered Holder located in the United States and wish to vote at the Meeting, or, if you are permitted to appoint a third party as your proxyholder, in addition to the steps described above under “Attending and voting at the virtual meeting” , you must obtain a valid legal proxy from your Intermediary. You must follow the instructions from your Intermediary which are included with the legal proxy form and the voting information form sent to you. If you have not received one, you must contact your Intermediary to request a legal proxy form or a legal proxy. After obtaining a valid legal proxy from your Intermediary, you must then submit such legal proxy to TSX Trust Company. Requests for registration from Non-Registered Holders located in the United States that wish to vote online at the Meeting or, if permitted to appoint a third party as their proxyholder, must be deposited with TSX Trust Company by email at tsxtrustproxyvoting@tmx.com; registered holders may also deposit their proxies by e-mail to tsxtrustproxyvoting@tmx.com and in both cases, must be labeled “Legal Proxy” and received no later than the voting deadline of 10:00 a.m. (Vancouver time) on December 1, 2021 or, if the Meeting is adjourned or postponed, by 10:00 a.m. (Vancouver time) on the last business day preceding the preceding the day of the reconvened Meeting. The Chair of the Meeting has the discretion to accept proxies received after such deadline only at the Meeting. Notwithstanding the foregoing, the Chair of the Meeting will not be able to such proxies at the Meeting for shareholders wishing to appoint another person (who need not be a shareholder) to represent them at the Meeting virtually, including in respect of Non-Registered holders who wish to appoint themselves as proxyholder.

Notice to Shareholders in the United States

The solicitation of proxies and the matters to be voted on, as contemplated in this Circular, involve securities of an issuer located in Canada and are being effected in accordance with the corporate laws of the Province of British Columbia, Canada and securities laws of the provinces of Canada. As a “foreign private issuer” as defined under Rule 3b-4 under the United States Securities Exchange Act of 1934, as amended (the “ 1934 Act ”), the proxy solicitation rules under the 1934 Act, including Regulation 14A thereunder, are not applicable to the Company or this solicitation, and this solicitation has been prepared in accordance with the disclosure requirements of the securities laws of the provinces of Canada. Shareholders should be aware that disclosure requirements under the securities laws of the provinces of Canada differ from the disclosure requirements under United States securities laws.

The enforcement by shareholders of civil liabilities under United States federal securities laws may be affected adversely by the fact that the Company is incorporated under the Business Corporations Act (British Columbia), as amended, certain of its directors and its executive officers are residents of Canada and a substantial portion of its assets and the assets of such persons are located outside the United States. Shareholders may not be able to sue a foreign company or its executive officers or directors in a foreign court for violations of United States federal securities laws. It may be difficult to compel a foreign company and its executive officers and directors to subject themselves to a judgment by a United States court.

VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES

The Board has fixed October 25, 2021 as the record date (the “ Record Date ”) for determination of persons entitled to receive notice of and to vote at the Meeting. Only shareholders of record at the close of business on the Record Date who either attend the virtual Meeting or complete, sign and deliver a form of proxy in the manner and subject to the provisions described above will be entitled to vote or to have their Common Shares voted at the Meeting.

The Common Shares of the Company are listed for trading on the Toronto Stock Exchange (the “ TSX ”). As of the Record Date, there were 14,242,595 Common Shares issued and outstanding, each carrying the right to one vote.

No group of shareholders has the right to elect a specified number of directors, nor are there cumulative or similar voting rights attached to the Common Shares.

To the knowledge of the directors and executive officers of the Company, no persons or corporations beneficially owned (as determined under applicable Canadian securities laws), directly or indirectly, or exercised control or direction over, Common Shares carrying 10% or more of the voting rights attached to all outstanding Common Shares of the Company as at the Record Date.

FINANCIAL STATEMENTS

The audited financial statements of the Company for the years ended December 31, 2020 and 2019, report of the auditor and related management discussion and analysis, all of which may be obtained from SEDAR at www.sedar.com and will be placed before the Meeting and have been filed with the securities commissions or similar regulatory authority in all provinces of Canada, other than Québec.

VOTES NECESSARY TO PASS RESOLUTIONS

Other than as described below, a simple majority of affirmative votes cast at the Meeting is required to pass the resolutions described herein. Pursuant to the rules of the TSX, the approval of and the amendments to the Existing Option Plan (as defined herein) and the Option Grant Resolution (as defined herein), requires disinterested shareholder approval. Disinterested shareholder approval is the approval by a majority of the votes cast on the ordinary resolution by all shareholders at the Meeting, excluding the votes attached to Common Shares beneficially owned by insiders (as defined under the rules of the TSX) of the Company and their associates (as defined under the rules of the TSX).

If there are more nominees for election as directors or appointment of the Company’s auditor than there are vacancies to fill, the nominees receiving the greatest number of votes will be elected or appointed, as the case may be, until all such vacancies have been filled. If the number of nominees for election or appointment is equal to the number of vacancies to be filled, all such nominees will be declared elected or appointed as directors by ballot in accordance with the Company’s majority voting policy.

PARTICULARS OF MATTERS TO BE ACTED UPON

1. Setting the Number of Directors – See heading “ Number of Directors ”.

2. Election of Directors – See heading “ Election of Directors ”.

3. Appointment of Auditor – See heading “ Appointment of Auditor ”.

4. Ratification of Amendment to Existing Option Plan – See heading “ Amendment to Stock Option Plan ”.

5. Ratification of Option Grant under the Amended Option Plan – See heading “ Ratification of Grant ”

under the Amended Option Plan .

1. Ratification of Advance Notice Policy – See heading “ Approval and Ratification of the Advance Notice Policy ”.

NUMBER OF DIRECTORS

The Articles of the Company set out that the number of directors of the Company will be a minimum of three and a maximum of the most recently set of (i) the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given) and (ii) the number of directors set in the event that the places of any retiring directors are not filled by an election at a meeting of shareholders. At the Meeting, the shareholders will be asked to pass an ordinary resolution setting the number of directors of the Company at six.

To be approved, the resolution must be passed by a majority of the votes cast by the holders of Common Shares at the Meeting. Management recommends a vote “for” in respect of the resolution setting the number of directors of the Company at six.

ELECTION OF DIRECTORS

The term of office of each of the six current directors will end at the conclusion of the Meeting. Unless a director’s office is vacated earlier in accordance with provisions of the Business Corporations Act (British Columbia), each of the six directors elected will hold office until the conclusion of the next annual meeting of the Company, or if no director is then elected, until a successor is elected.

The Company has adopted a majority voting policy (the “ Majority Voting Policy ”). Pursuant to the Majority Voting Policy, shareholders vote, or withhold from voting, for the election of each individual director rather than for a fixed slate of directors. Further, in an uncontested election of directors, the number of shares “withheld” for any nominee exceeds the number of shares voted “for” the nominee, then, notwithstanding that such director was duly elected as a matter of corporate law, he or she shall, immediately upon receipt the final scrutineer’s report on the ballot, tender his or her written resignation to the Chair of the Board. The Nominating and Corporate Governance Committee will consider such offer of resignation and will make a recommendation to the Board concerning the acceptance or rejection of the resignation. In its deliberations, the Nominating and Corporate Governance Committee will consider all factors deemed relevant. The Board will take formal action on the Nominating and Corporate Governance Committee’s recommendation no later than 90 days of the date of the applicable shareholders’ meeting and announce its decision by press release to the TSX. Absent exceptional circumstances, the Board will be expected to accept the resignation which will be effective on such date. If the Board declines to accept the resignation, it will include in the press release the reason or reasons for its decision. Management recommends a vote “for” the appointment of each of the following nominees as directors of the Company.

The full text of the Majority Voting Policy is available on the Company’s website at https://eupraxiapharma.com/investors/governance.

Nominees

The following table sets out, among other things, the names of management’s six nominees for election as directors, all major offices and positions with the Company each now holds, each nominee’s principal occupation, business or employment, the period of time during which each has been a director of the Company and the number of Common Shares of the Company beneficially owned by each, directly or indirectly, or over which each exercised control or direction, as at October 25, 2021:

Name, Province of Residence and Position with Eupraxia	Principal Occupation or Business or Employment in the Past Five Years	Date Appointed as a Director of the Company	Common Shares Beneficially Owned, Controlled or Directed(1)
James A. Helliwell British Columbia, Canada Chief Executive Officer and Director	Chief Executive Officer, Eupraxia Pharmaceuticals Inc. (July 2012 - Present)	July 23, 2012	574,750(5)
Simon Pimstone(2)(3)(4) British Columbia, Canada Chairman of the Board and Director	Executive Chair of the Board, Xenon Pharmaceuticals, Inc. (June 2021 - Present) Chief Executive Officer, Xenon Pharmaceuticals, Inc. (January 2003 - June 2021)	January 14, 2013 (as Director) and January 24, 2013 (as Chairman)	4,626(6)
Richard M. Glickman(2)(4) British Columbia, Canada Director	Chairman of the Board, ESSA Pharma Inc. (October 2010- Present) Co-founder and Executive Chairman (September 2013 - February 2014) and Chairman of the Board (February 2014 - April 2019) and Chief Executive Officer (February 2017 - April 2019), Aurinia Pharmaceuticals Inc. Venture Partner, Lumira Ventures (March 2016 - Present)	March 9, 2021	6,250(7)
Paul Geyer(3) British Columbia, Canada Director	Chief Executive Officer, Discovery Parks and Nimbus Synergies (May 2017 - Present) Chief Executive Officer, LightIntegra Technology Inc. (May 2009 – March 2017)	January 14, 2013	288,021(8)
John Montalbano(3)(4) British Columbia, Canada Director	Director, Eupraxia Pharmaceuticals Inc. (January 2013 - Present) Director, AbCellera Biologics Inc. (November 2020 - Present) Director, XYON Health Inc. (June 2021 - Present) Director, Canada Pension Plan Investment Board (February 2017 - Present) Director, Aritzia Inc. (July 2019 - Present) Vice Chair, RBC Wealth Management (April 2015- December 2016)	January 14, 2013	822,666(9)
Michael Wilmink(2) Phoenix, Arizona Director	Orthopaedic Surgeon, Partner in OrthoArizona practice (2002 - Present)	January 14, 2013	112,494(10)

Notes:

(1) The information as to principal occupation, business or employment (for the preceding five years for any new director) and Common Shares beneficially owned, controlled or directed is not within the knowledge of the management of the Company and has been furnished by the respective nominees themselves. Beneficial ownership is determined in accordance with applicable Canadian securities laws.

(2) Members of the Compensation Committee (as defined herein), with Richard Glickman as chair.

(3) Members of the Audit Committee (as defined herein), with John Montalbano as chair.

(4) Members of the Nominating and Corporate Governance Committee (as defined herein), with Simon Pimstone as chair.

(5) James Helliwell holds stock options (the “Options”) to acquire 302,250 Common Shares, Founders Warrants to acquire 100,500 Common Shares and 100,500 Underlying Founder Warrants and 2013 Warrants to acquire 150,000 Common Shares. “Founders Warrants”, “Underlying Founders Warrants” and “2013 Warrants” are defined in the Company’s long-form prospectus dated March 3, 2021 (the “Prospectus”), which is available under the Company’s profile on SEDAR at www.sedar.com.

(6) Simon Pimstone holds Options to acquire 192,500 Common Shares and Founders Warrants to acquire 125,000 Common Shares and 125,000 Underlying Founder Warrants.

(7) Richard Glickman holds Options to acquire 125,000 Common Shares and Richard and his spouse each hold 3,125 warrants that were distributed pursuant to the Prospectus and are listed on the TSX, with the terms of such warrants described in the Prospectus (each, an “ IPO Warrant ”).

• (8) Common Shares are held through Paul Geyer’s holding company. Paul Geyer holds Options to acquire 116,250 Common Shares, Founders Warrants to acquire 25,000 Common Shares and 25,000 Underlying Founder Warrants and 2021 30% Warrants to acquire 31,877 Common Shares. “2021 30% Warrants” is defined as set out in the Prospectus. Paul Geyer also holds 12,500 IPO Warrants.

• (9) John Montalbano holds Options to acquire 123,750 Common Shares, Founders Warrants to acquire 25,000 Common Shares and 25,000 Underlying Founder Warrants, 2019 Warrants to acquire 22,006 Common Shares and 2021 10% Warrants to acquire 39,847 Common Shares. “2019 Warrants” and “2021 10% Warrants” are defined as set out in the Prospectus. John Montalbano also holds 21,875 IPO Warrants.

• (10) Michael Wilmink holds Options to acquire 100,000 Common Shares and Founders Warrants to acquire 10,000 Common Shares, 10,000 Underlying Founder Warrants and 1,525 IPO Warrants.

None of the proposed nominees for election as a director of the Company are proposed for election pursuant to any arrangement or understanding between the nominee and any other person, except the directors and senior officers of the Company acting solely in such capacity. Further, the Board has reviewed the above proposed nominees for election as a director of the Company and has recommended that each proposed nominee be up for election as a director of the Company at the Meeting.

Director Biographies

James A. Helliwell, MD, Chief Executive Officer and Director

Eupraxia founder James Helliwell holds a medical degree from the University of British Columbia ( “UBC” ), a Fellowship Certification in Cardiac Anesthesiology and transplantation, and board certification in Perioperative Echocardiography. Prior to founding Eupraxia, he worked in a clinical practice at a quaternary academic cardiac center in St. Paul’s Hospital, Vancouver. He also served as Clinical Assistant Professor at UBC in the Department of Anesthesiology, Pharmacology and Therapeutics and was the President of the provincial body guiding anesthesiology care in British Columbia.

Dr. Helliwell is a physician-entrepreneur who holds many granted patents and created a medical device, built a company around it, and sold it to a large strategic partner.

Simon Pimstone, MD, PhD, FRCPC (Chair), Chairman of the Board

Dr. Simon Pimstone, is a founder, Director, and former Chief Executive Officer at Xenon Pharmaceuticals Inc. (“ Xenon ”), a publicly traded Canadian biotechnology company (Nasdaq: XENE). Xenon is engaged in discovering and developing novel pharmaceuticals targeting neurological diseases with a key focus on ion channels.

Dr. Pimstone received his MD from the University of Cape Town (MBChB, 1991) and is an internal medicine specialist (FRCPC, UBC, 2001). Prior to his specialization, he trained as a clinical research fellow with the Department of Medical Genetics at the UBC and obtained his PhD in cardiovascular genetics through the University of Amsterdam (1998).

Dr. Pimstone also serves as a consultant physician at the UBC Medical and Cardiology Clinic at UBC Hospital in Vancouver. He is a founder and co-principal investigator (PI) of the Study to Avoid CardioVascular Events in BC (“ SAVE BC ”), a provincial program focused on atherosclerotic cardiovascular disease and is founding PI of the SAfER BC study, a provincial study established to track COVID-19 and its impact in the workplace.

Dr. Pimstone has served on numerous non-profit boards including BIOTECanada, LifeSciences BC, the Center for Molecular Medicine and Therapeutics, Providence Healthcare and numerous life sciences company boards including Eupraxia Pharmaceuticals and Alpha9 Theranostics.

Dr. Pimstone has received a number of awards and recognitions including the Globe and Mail and Business in Vancouver’s Top 40 Under 40 Awards and was a 2020 Bloom Burton Award finalist. Under his

leadership, Xenon has received multiple awards, including the 2020 LifeSciences BC Deal of the Year Award, the 2013 LifeSciences BC Company of the Year Award, the 2013 BIOTECanada Gold Leaf Company of the Year Award and the 2008 BIOTECanada Gold Leaf Emerging Company – Health Award.

Richard Glickman, L.L.D., Director

Dr. Glickman was a co-founder, Chairman and Chief Executive Officer of Aspreva Pharmaceuticals Inc. ( “Aspreva” ) which was acquired by the Galenica Group for $915 million. Prior to establishing Aspreva, Dr. Glickman was the co-founder and Chief Executive Officer of StressGen Biotechnologies Corporation.

Dr. Glickman currently serves as Chairman of the Board of Directors of Essa Pharma Inc and Engene Corporation, and as Director of Vida Pharmaceuticals. In addition, Dr. Glickman served as Chairman of the Board and CEO of Aurinia Pharmaceuticals Inc., until his retirement in April 2019.

Dr. Glickman has served on numerous biotechnology and community boards, including as a member of the Canadian federal government’s National Biotechnology Advisory Committee, Director of the Canadian Genetic Disease Network, Chairman of Life Sciences B.C. and a member of the B.C. Innovation Council.

Dr. Glickman is the recipient of numerous awards including the Ernst and Young Entrepreneur of the Year, a recipient of both BC and Canada’s Top 40 under 40 award, the BC Lifesciences Leadership Award and the Corporate Leadership Award from the Lupus Foundation of America.

Paul Geyer, P.Eng., Director

Mr. Geyer is a Medtech Entrepreneur, angel investor and venture capitalist, and has sat on the Boards of several companies. Over the past 30 years Mr. Geyer founded or led three companies through their growth phase, in one case to exit and in another to a public company. These companies have grown to employ more than 350 people.

Mr. Geyer is currently the CEO of Discovery Parks and Nimbus Synergies, a venture capital investment program focused on growing BC Digital Health companies that operate in the intersection between health, life sciences, and technology. He is an active mentor and angel investor in medical technology companies.

In 1991 he founded Mitroflow, a tissue heart valve company. Mr. Geyer grew the company from nine employees to more than 125 employees, selling in 1999 for more than $50 million. In 2001, Mr. Geyer founded Medical Ventures (Neovasc) where he is on the board and held the position of CEO until June 2008 and was responsible for raising over $40 million in equity financing and overseeing the acquisition of three other companies.

From 2009 to 2017, Mr. Geyer was the first CEO of LightIntegra Technology which developed the ThromboLux, a point of care device to determine platelet quality for blood transfusions.

Since 2008, Mr. Geyer has focused on assisting entrepreneurs to build successful businesses, as a mentor or board member, and as a Fellow of Creative Destruction Labs. He has also worked on building the local community through his involvement as a board member of BCTech, LifeSciences BC, and Science World, Vancouver General Hospital & UBC Hospital Foundation, and Junior Achievement BC along with a number of non-profit community-based organizations. He also participates in a range of philanthropic endeavours.

John Montalbano, CFA, Director

Mr. Montalbano is the former Vice Chair of Royal Bank of Canada (RBC) Wealth Management and CEO of RBC Global Asset Management. In 2015, when he retired as CEO, the organization had extended its scope to include offices in Canada, the United States, the United Kingdom and Hong Kong, managing in aggregate more than $370 billion, placing the firm among the largest 50 asset managers worldwide. John currently serves as a Director of the Canada Pension Plan Investment Board, Aritzia Inc. and AbCellera Inc.

Mr. Montalbano has served as Chair of the UBC Board of Governors, Trustee of the Killam Trusts, Director of the Investment Committee of The Canada Council for the Arts and Chair for the Vancouver Public Library Capital Campaign. John currently volunteers as a director for The Gairdner Foundation, The Asia Pacific Foundation of Canada, The BC Achievement Foundation, Windmill Microlending (in support of skilled immigrants and refugees), as well, is the current Chair of St. Paul’s Hospital Foundation and recent past Chair of The Vancouver Police Foundation.

Mr. Montalbano holds a Chartered Financial Analyst designation and a Bachelor of Commerce, with Honours, from the University of British Columbia. He is a Leslie Wong Fellow of the UBC Portfolio Management Foundation and holds an Honorary Doctor of Letters from Emily Carr University of Art and Design.

Michael Wilmink, MD, Director

Dr. Wilmink is an Orthopaedic surgeon and partner in OrthoArizona where he is active in both the Operations Committee and Research Committee. Dr. Wilmink was an inventor of the muscle sparing anterior approach technique for hip replacements and currently lectures and teaches this technique to surgeons across the United States. In addition, Dr. Wilmink is a surgeon designer for NextStep Arthropedix and has brought two FDA approved hip replacement systems to the market and a total knee system coming to the clinical market in 2021. Dr. Wilmink is active in the Phoenix medical community sitting on the boards of OASIS Surgical Hospital and the Gateway Outpatient Surgical Center.

Michael completed his undergraduate education at University of California at Los Angeles in Physiological Sciences and was a scholarship All American Water Polo player. Dr. Wilmink completed his Medical Degree and Orthopaedic Surgical Residency at UBC.

Outside of the medical world, Dr. Wilmink was elected to be a Phoenix Thunderbird and collaborates with business leaders in the community to run and operate the Waste Management Phoenix Open PGA Golf Tournament.

Cease Trade Orders and Bankruptcies

No proposed director of the Company is, as of the date of this Circular, or has been, within the ten years prior to the date hereof, a director or chief executive officer or chief financial officer of any company (including the Company) that: (i) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant issuer access to any exemption under securities legislation, that was in effect for a period or more than 30 consecutive days (an “Order”) that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer of such issuer, or (ii) was subject to an Order that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

No proposed director of the Company is, at the date of this Circular, or has been within ten years before the date of this Circular, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.

Penalties and Sanctions

No proposed director of the Company has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or has been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed director.

Individual Bankruptcies

No proposed director of the Company has, within the ten years before the date of this Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director.

APPOINTMENT OF AUDITOR

Baker Tilly WM LLP, at its offices located at 900 – 400 Burrard Street, Vancouver, BC V6C 3B7, will be nominated at the Meeting for reappointment as auditor of the Company at remuneration to be fixed by the directors.

To be approved, the resolution must be passed by a majority of the votes cast by the holders of Common Shares at the Meeting. Management recommends a vote “for” in respect of the resolution approving the appointment of the auditor and authorizing the directors to fix the auditor’s remuneration.

RATIFICATION OF AMENDMENT TO OPTION PLAN

The Company established a stock option plan in 2015, which plan was amended and restated on March 9, 2021 (as amended and restated, the “ Existing Option Plan ”) in order to make the terms of the Existing Option Plan consistent with the provisions of the TSX Company Manual and other TSX-listed companies generally and further amended on May 3, 2021 and was subsequently amended on October 27, 2021 (as further discussed below).

At the Meeting, disinterested shareholders of the Company will be asked to approve an ordinary resolution (the “ Option Plan Amendment Resolution ”) ratifying, confirming and approving certain amendments to the Existing Option Plan (the “ Option Plan Amendments ”), as further described below (as amended, the “ Amended Option Plan ”). The Board has approved the Option Plan Amendments on May 3, 2021 and on October 27, 2021. A blackline of the Amended Option Plan is appended hereto as Schedule A which reflects the amendments made on May 3, 2021 and on October 27, 2021 to the Existing Option Plan. Regardless of whether the Option Plan Amendments are approved, the Company will be authorized to make grants under the Amended Option Plan until March 8, 2024

A summary of the material provisions of the Existing Option Plan, prior to giving effect to the Option Plan Amendments, is set out under the heading “Particulars of the Existing Stock Option Plan” in the Executive Compensation section of this Circular.

The principal changes between the Existing Option Plan and the Amended Option Plan are described below.

Reserved Common Shares

The Company has a “rolling” stock option plan reserving for issuance a maximum of 15% of the issued and outstanding Common Shares of the Company at the time of the option grant. The Option Plan Amendments, among other things, will increase this limit to 18.5% of the issued and outstanding of the total number of issued and outstanding Common Shares (on a non-diluted basis).

Common Share Limitation

The Existing Option Plan currently limits the number of Common Shares reserved for issuance in combination with the aggregate number of Common Shares issuable under any security based compensation arrangements to 15% of the number of issued and outstanding Common Shares (on a non-diluted basis) at the time of the option grant. The Option Plan Amendments will remove the overall limit on the issuance of Common Shares under all of the Company’s security based compensation arrangements.

Approving the Option Plan Amendments

The Board continues to believe that Options are an important element of the Company’s compensation structure. The Board believes that the Option Plan Amendment Resolution is desirable in order to permit the Company to continue to accomplish the purposes of the Existing Option Plan and to provide for the ability of the Company to grant future Options.

To be approved, the Option Plan Amendment Resolution must be approved by a majority of the votes cast by all shareholders at a general meeting, excluding votes attaching to shares beneficially owned by (i) insiders to whom options may be issued under the Existing Option Plan; and (ii) associates and affiliates of insiders to whom options may be issued under the Existing Option Plan, including direct and indirect issuances. The people who are allowed to vote are referred to as “disinterested shareholders”. The term “insider” is defined in the Securities Act (British Columbia) and includes, among other persons, directors and senior officers of a company and its subsidiaries and shareholders owning more than 10% of the voting securities of a company. Accordingly, disinterested shareholders will be asked to consider and, if thought appropriate, to pass, with or without amendment, the Option Plan Amendment Resolution set out below. In order to be effective, the Option Plan Amendment Resolution must be approved by a majority of the votes cast in virtually at the Meeting or by proxy in respect thereof by the disinterested shareholders and approved by the TSX. The TSX has conditionally approved the Option Plan Amendments, subject to receipt from the Company of, among other things, evidence of shareholder approval. 1,843,757 Common Shares will be excluded from voting on the Option Plan Amendment Resolution, which represents 12.95% of the issued and outstanding Common Shares of the Company as of October 25, 2021.

Other than as described above, the remainder of the provisions in the Amended Option Plan will be identical to those contained in the Existing Option Plan. For a detailed description of the provisions of the Existing Option Plan, see “ Particulars of the Existing Stock Option Plan ”. Reference should be made to Schedule "A" for the blackline showing the Amended Option Plan.

Should the Option Plan Amendment Resolution not receive the required shareholder approval at the Meeting, the Amended Option Plan and all grants made under it (as further described below under

“ Ratification of Grant Under the Amended Option Plan ”) will be immediately cancelled and the Existing Option Plan will remain in place.

The following is the text of the Option Plan Amendment Resolution which will be put forward at the Meeting:

“BE IT RESOLVED AS AN ORDINARY RESOLUTION OF DISINTERESTED SHAREHOLDERS THAT:

1. The Amended Option Plan of the Company, in substantially the form described in, and appended as Schedule A to the Circular, is hereby ratified, confirmed and approved.

2. The maximum number of Common Shares in the capital of the company authorized and reserved for issuance under the Amended Option Plan shall be increased to 18.5% of the total number of issued and outstanding Common Shares (on a non-diluted basis).

3. The Amended Option Plan shall remove the overall limit on the issuance of Common Shares under all of the Company’s security based compensation arrangements.

4. Any one director or officer of the Company is authorized and directed, on behalf of the Company to take all necessary steps and proceedings and to execute, deliver and file any and all declarations, agreements, documents and other instruments and do all such other acts and things that may be necessary or desirable to give effect to the foregoing resolutions.”

In order for the foregoing resolution to be passed, it must be approved by a simple majority of the aggregate votes cast by disinterested shareholders who vote online or by proxy at the Meeting. Management recommends a vote “for” in respect of the Option Plan Amendment Resolution.

RATIFICATION OF GRANT UNDER THE AMENDED OPTION PLAN

At the Meeting, disinterested shareholders will be asked to consider, and if thought fit, pass, without or without amendment, an ordinary resolution (the “ Option Grant Resolution ”) as set forth below to ratify, confirm and approve a previous grant of 257,000 Options exercisable to acquire an aggregate of 257,000 Common Shares (collectively, the “ New Options ”) to Mr. Bruce Cousins, President and Chief Financial Officer of the Company. The grant of the New Options was made to Mr. Cousins upon his appointment on May 3, 2021, subject to disinterested shareholder and TSX approval, under the Amended Option Plan and on such terms as set out in the table below.

Name of Optionee	Date of Grant	Expiry Date	Exercise Price	No. of Optioned Common Shares	Vesting Schedule	Conditions to Exercise
Bruce Cousins	May 3, 2021	May 3, 2031	$8.00	257,000	The Options vest 25% as of the date of grant, 25% on the one year anniversary of the date of grant, 25% the two year anniversary of the date of grant and 25% on the three year anniversary of the date of grant	Disinterested shareholder approval for the respective grant is obtained at the Meeting

These New Options are issued under and subject to the terms of the Amended Option Plan and may not be exercised by Mr. Cousins until such time that the grant of the New Options, and the Amended Option Plan, have been ratified, confirmed and approved by disinterested shareholders of the Company at the Meeting.

Option Grant Resolution

Pursuant to the policies of the TSX, the grant of the New Options, as further described above, require disinterested shareholder approval. Disinterested shareholder approval is the approval by a majority of the votes cast on the ordinary resolution by all shareholders at the Meeting, excluding the votes attached to Common Shares beneficially owned by interested shareholders. The only interested shareholder of the Company is Mr. Bruce Cousins. However, as Mr. Bruce Cousins does not beneficially own any Common Shares of the Company, a total of nil Common Shares will be excluded from voting on the Option Grant Resolution. If the Option Grant Resolution is not approved by disinterested shareholders or the Option Plan Amendment Resolution is not approved by disinterested shareholders at the Meeting, the New Options will be cancelled immediately. The TSX has conditionally approved the Option Plan Amendments, subject to receipt from the Company of, among other things, evidence of disinterested shareholder approval.

The Board unanimously recommends that you vote “for” in respect of the Option Grant Resolution.

The following is the text of the Option Grant Resolution which will be put forward at the Meeting:

“BE IT RESOLVED AS AN ORDINARY RESOLUTION THAT:

1. The grant of Options under the Amended Option Plan of the Company dated May 3, 2021, for an aggregate of up to 257,000 Common Shares in the capital of the Company, to Mr. Bruce Cousins, President and Chief Financial Officer of the Company and on such terms as set out in the table below, be and are hereby ratified, confirmed and approved:

Name of Optionee	Date of Grant	Expiry Date	Exercise Price	No. of Optioned Common Shares	Vesting Schedule	Conditions to Exercise
Bruce Cousins	May 3, 2021	May 3, 2031	$8.00	257,000	The Options vest 25% as of the date of grant, 25% on the one year anniversary of the date of grant, 25% the two year anniversary of the date of grant and 25% on the three year anniversary of the date of grant	Disinterested shareholder approval for the respective grant is obtained at the Meeting

1. Any one director or officer of the Company is authorized and directed on behalf of the Company, to take all necessary steps and proceedings and to execute, deliver and file any and all declarations, agreements, documents and other instruments, and do all such other acts and things that may be necessary or desirable to give effect to the grant of Options and the foregoing resolutions.

2. All actions previously taken by any officer or director of the Company in connection with the foregoing resolutions are hereby adopted, ratified, confirmed and approved in all respects.”

APPROVAL AND RATIFICATION OF THE ADVANCE NOTICE POLICY

The Advance Notice Policy was adopted by the Board on October 27, 2021. At the Meeting, shareholders will be asked to consider, and if thought fit, pass, without or without amendment, an ordinary resolution as set forth below to ratify, confirm and approve the proposal of the Advance Notice Policy, the full text of which is reproduced at Schedule B to this Circular. If the Advance Notice Policy is approved at the Meeting, the Advance Notice Policy will continue to be effective and in full force and effect in accordance with its terms and conditions beyond the termination of the Meeting. For greater certainty, the Advance Notice Policy will not be effective for the Meeting and will be effective for the Company’s next annual general meeting.

Purpose of the Advance Notice Policy

The Board is committed to: (i) facilitating an orderly and efficient annual general or, where the need arises, special meeting, process; (ii) ensuring that all shareholders receive adequate notice of the director nominations and sufficient information with respect to all nominees; and (iii) allowing shareholders to register an informed vote having been afforded reasonable time for appropriate deliberation.

The purpose of the Advance Notice Policy is to provide shareholders, directors and management of the Company with a clear framework for the nomination of directors. The Advance Notice Policy fixes a deadline by which holders of record of Common Shares of the Company must submit director nominations to the Company prior to any annual or, if applicable, special meeting of shareholders and sets forth the information that a shareholder must include in the notice to the Company for the notice to be in proper written form.

Terms of the Advance Notice Policy

The following information is intended as a brief description of the Advance Notice Policy and is qualified in its entirety by the full text of the Advance Notice Policy, a copy of which is attached as Schedule “B”.

Among other things, the Advance Notice Policy fixes a deadline by which holders of record of Common Shares must submit director nominations to the Corporate Secretary of the Company prior to any annual or special meeting of shareholders and sets forth the specific information that a shareholder must include in the written notice to the Corporate Secretary of the Company for an effective nomination to occur. No person will be eligible for election as a director of the Company unless nominated in accordance with the provisions of the Advance Notice Policy.

In the case of an annual meeting of shareholders, notice to the Company must be made not less than 30 nor provided, however, that in the event that the annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice must be made not later than the close of business on the 10th day following such public announcement.

In the case of a special meeting of shareholders (which is not also an annual meeting) called for the purpose of electing directors (whether or not called for other purposes), notice to the Company must be made not later than the close of business on the 15[th] day following the day on which the first public announcement of the date of the special meeting was made.

The Board may, in its sole discretion, waive any or all requirements of the Advance Notice Policy.

Approval of Advance Notice Policy by Shareholders

If the Advance Notice Policy is approved at the Meeting, the Advance Notice Policy will continue to be effective and in full force and effect in accordance with its terms and conditions beyond the termination of the Meeting. Thereafter, the Advance Notice Policy will be subject to review by the Board and will be updated to the extent needed to reflect changes required by securities regulatory agencies or stock exchanges, or so as to meet industry standards. For greater certainty, the Advance Notice Policy will not be effective for the Meeting and will be effective for the Company’s next annual general meeting.

The Board unanimously recommends a vote “for” in respect of the Advance Notice Policy.

If the Advance Notice Policy is not approved at the Meeting, the Advance Notice Policy will terminate and be of no further force or effect from and after the termination of the Meeting.

The following is the text of the Advance Notice Policy Resolution which will be put forward at the Meeting:

“BE IT RESOLVED, as an ordinary resolution of the shareholders of the Company, that:

1. The Advance Notice Policy, in substantially the form described in, and appended as Schedule “B” to the Circular, is hereby ratified, confirmed and approved.

2. The Board of the Company be authorized in its absolute discretion to administer the Advance Notice Policy and amend or modify the Advance Notice Policy in accordance with its terms and conditions to the extent needed to reflect changes required by securities regulatory agencies or stock exchanges, so as to meet industry standards, or as otherwise determined to be in the best interests of the Company and its shareholders; and

3. Any one director or officer of the Company is authorized and directed, on behalf of the Company to take all necessary steps and proceedings and to execute, deliver and file any and all declarations, agreements, documents and other instruments and do all such other acts and things that may be necessary or desirable to give effect to the foregoing resolutions.”

CORPORATE GOVERNANCE

General

The Company and the Board recognize the importance of corporate governance to the effective management of the Company and to the protection of its employees and shareholders. The Company’s approach to significant issues of corporate governance is designed with a view to ensuring that the business and affairs of the Company are effectively managed so as to enhance shareholder value. The Board fulfills its mandate directly and through its committees at regularly scheduled meetings or at meetings held as required. Frequency of meetings may be increased and the nature of the agenda items may be changed depending upon the state of the Company’s affairs and in light of opportunities or risks which the Company faces. The directors are kept informed of the Company’s business and affairs at these meetings as well as through reports and discussions with management on matters within their particular areas of expertise.

Board of Directors

If all director nominees included under the heading “ Election of Directors ”, as set out in this Circular, are appointed to the Board, the Board is composed of five independent directors, including Simon Pimstone (Chair of the Board), John Montalbano, Paul Geyer, Michael Wilmink and Richard Glickman. For this purpose, a director is independent if he or she has no direct or indirect “material relationship” with Eupraxia. A “material relationship” is defined in National Instrument 58-101 - Disclosure of Corporate Governance Practices (“ NI 58-101 ”). A “material relationship” is a relationship which could, in the view of the Board, be reasonably expected to interfere with the exercise of the director’s independent judgment. An individual who has been an employee or executive officer of the Company within the last three years is considered to have a material relationship with the Company. James. A. Helliwell, as Chief Executive Officer is not considered independent by the Company.

Currently, the following directors serve on the following boards of directors of other public companies:

Name of Director Simon Pimstone Paul Geyer John Montalbano Richard Glickman	Reporting Issuers
	Xenon Pharmaceuticals Inc. Timia Capital Corp Neovasc Inc. Aritzia Inc. AbCellera Biologics Inc. ESSA Pharma Inc.

Board Mandate

The Board assumes responsibility for the stewardship of the Company and the enhancement of shareholder value.

The Board is responsible for:

• (a) adopting a strategic plan for the Company and reviewing the plan in light of management’s assessment of emerging trends, the competitive environment, the opportunities for the business of the Company, risk issues, and significant business practices and products;

• (b) ensuring that the risk management of the Company is prudently addressed;

• (c) reviewing the Company’s approach to human resource management and overseeing succession planning for management;

• (d) reviewing the Company’s approach to corporate governance, including an evaluation of the adequacy of the mandate of the Board and director independence standards; and

• (e) upholding a comprehensive policy for communications with shareholders and the public at large.

The frequency of meetings of the Board and the nature of agenda items may change from year to year depending upon the activities of the Company. The Board meets at least once per fiscal quarter and at each meeting there is a review of the business of the Company.

The Board facilitates its exercise of independent supervision over the Company’s management through frequent meetings of the Board being held to obtain an update on significant corporate activities and plans, both with and without members of the Company’s management being in attendance.

Meetings without management present

The independent members of the Board meet at each regular board and committee meetings.

Position Descriptions

The Board has not developed a written position description for the CEO, the Chairman of the Board and the chairs of each of the committees of the Board. Given the size of the Company, the Board does not feel that it is necessary at this time to formalize such position descriptions. Guidance is generally provided through reference to industry norms, past practice and relying upon the provisions of the constating documents of the Company and the statutory and common law. The CEO is principally responsible for overseeing the operations and affairs of the Company, including strategic organizational and financial management, business development, regulatory compliance, and clinical development. The Chairman of the Board is principally responsible for overseeing the operations and affairs of the Board. With respect to the chairs of each of the committees of the Board, it is currently the Board’s view that the general mandates of committees on which such directors may sit are sufficient to delineate the role and responsibilities of the chair of each committee. The chair of each Board committee is required to ensure the committee meets regularly and performs the duties as set forth in the committee mandate, and reports to the Board on the activities of the committee.

Orientation and Education

Eupraxia provides new directors with an orientation program upon joining the Company that includes copies of relevant financial, technical, scientific and other information regarding its drug candidates and meetings with management.

Board members are encouraged to communicate with management and auditors, to keep themselves current with industry trends and developments, and to attend related industry seminars. Board members have full access to the Company’s records.

Nomination of Directors

It is the view of the Board that all directors, individually and collectively, should assume responsibility for nominating directors. The Board is responsible for identifying and recommending potential nominees for

directorship and senior management. Additionally, the Nominating and Corporate Governance Committee, in consultation with the CEO, identifies and recommend new directors with appropriate skills for the Board. In making its recommendations, the Nominating and Corporate Governance Committee considers the competencies and skills of the existing directors, the competencies and skills of each new nominee, and the competencies and skills considered necessary for the Board as a whole. The Advance Notice Policy was adopted by the Board on October 27, 2021. At the Meeting, shareholders will be asked to consider, and if thought fit, pass, without or without amendment, an ordinary resolution as set forth below to ratify, confirm and approve the proposal of the Advance Notice Policy, the full text of which is reproduced at Schedule B to this Circular. If the Advance Notice Policy is approved at the Meeting, the Advance Notice Policy will continue to be effective and in full force and effect in accordance with its terms and conditions beyond the termination of the Meeting. See “ Approval and Ratification of the Advance Notice Policy ”.

APPROVAL AND RATIFICATION OF THE ADVANCE NOTICE POLICY

The Advance Notice Policy was adopted the Board on October 27, 2021. At the Meeting, shareholders will be asked to consider, and if thought fit, pass, without or without amendment, an ordinary resolution as set forth below to ratify, confirm and approve the proposal of the Advance Notice Policy, the full text of which is reproduced at Schedule B to this Circular. If the Advance Notice Policy is approved at the Meeting, the Advance Notice Policy will continue to be effective and in full force and effect in accordance with its terms and conditions beyond the termination of the Meeting. For greater certainty, the Advance Notice Policy will not be effective for the Meeting and will be effective for the Company’s next annual general meeting.

Evaluation of the Effectiveness of the Board and its Committees

The Board, its committees and its individual directors are assessed regularly, and on at least an annual basis, as to their effectiveness and contribution. The process by which such assessments are made is administered by the Nominating and Corporate Governance Committee Charter by the Corporate Governance and Nominating Committee. Neither the Company nor the Corporate Governance and Nominating Committee has determined formal means or methods to regularly assess the Board, its committees or the individual directors with respect to their effectiveness and contributions. Effectiveness is subjectively measured by comparing actual corporate results with stated objectives. The contributions of an individual director are informally monitored by the other Board members, having in mind the business strengths of the individual and the purpose of originally nominating the individual to the Board.

The Nominating and Corporate Governance Committee and the Board are of the view that the Company’s corporate governance practices are appropriate and effective for the Company, given its relatively small size and limited operations. The Company’s method of corporate governance allows for the Company to operate efficiently, with simple checks and balances that control and monitor management and corporate functions without excessive administrative burden.

In addition, the Chair of the Board and the respective Chairs of each committee encourage discussion amongst the Board or the committee, as the case may be, as to their evaluation of their own effectiveness over the course of the year. All directors and/or committee members are free to make suggestions for improvement of the practice of the Board and/or its committees at any time and are encouraged to do so.

Director Term Limits

The Company has not adopted term limits for the directors on its Board or other formal mechanisms for Board renewal. The Company believes that the Board has the appropriate level of continuity and renewal without imposing formal mechanisms, particularly term limits or director retirement requirements. In addition, the Company believes that the imposition of director term limits or director retirement

requirements may discount the value of experience and continuity amongst Board members and runs the risk of excluding experienced and valuable candidates for Board membership.

The Nominating and Corporate Governance Committee is responsible for developing and updating the long-term plan for the composition of the Board that takes into consideration the current strengths, competencies, skills and experience of the Board members, retirement dates and the strategic direction of the Company. In addition, the Nominating and Corporate Governance Committee, annually or as required, identifies and recruits individuals qualified to become new Board members and makes recommendations to the Board regarding new director nominees. In making such recommendations, the Nominating and Corporate Governance Committee considers the competencies and skills that the Board considers to be necessary for the Board as a whole to possess, for each existing director to possess, and for a new nominee to bring to the boardroom. In this respect, through the Nominating and Corporate Governance Committee and the annual Board assessment process, the Board considers the contribution of current Board members and the skills and experience necessary for an effective and efficient Board, and recommends changes to best meet those needs.

Director Attendance at Board Meetings

The directors’ attendance at Board, Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee meetings since the beginning of Eupraxia’s most recently completed financial year is set forth in the table below.

Director	Attendance at Board Meetings	Attendance at Audit Committee Meetings	Attendance at Compensation Committee Meetings	Attendance at Nominating and Corporate Governance Committee Meetings
James A. Helliwell(1)	4	N/A	N/A	N/A
Simon Pimstone	4	3	1	0
Richard M. Glickman(2)	3	N/A	1	0
Paul Geyer	4	3	N/A	N/A
John Montalbano	4	3	N/A	0
Michael Wilmink	4	N/A	1	N/A

Notes:

(1) James A. Helliwell attends all meetings in his capacity as Chief Executive Officer.

(2) Richard Glickman was appointed to the Board on March 9, 2021.

Diversity

The Board has a written policy relating to the gender diversity of its directors and executive officers. The Company values diversity of view, experience, skillset, gender and ethnicity as it believes this results in better leadership and decision making for its business. Pursuant to such policy, gender diversity is one factor that is taken into account in identifying and selecting Board members and in considering the hiring, promotion and appointment of executive officers. The Company does not have specific targets respecting representation on its Board or in executive officer positions based on any particular personal experience or

characteristic, including gender. Instead, the Company focuses on choosing the most appropriate candidate for the position, having regard to the experience, skillset, gender, ethnicity and other personal characteristics of both the candidate and, as applicable, the Board and executive team as a whole. In conducting its search processes for Board and executive officer appointments, the Company reviews the extent to which its current appointees reflect gender diversity, and in assessing the appropriateness of candidates for those appointments, considers the desirability of an increased level of representation of females relative to the level attained as at the date of the gender diversity policy. The Board considers the Company’s progress towards achieving the objectives of the gender diversity policy, as well as the effectiveness of the policy, in connection with its continuing mandate to consider the composition of the Board. As at the date of this Circular, there are no female members of the Board and Amanda Malone is the only female executive officer, representing one-third of the Company’s executive officers.

Ethical Business Conduct

The Board has adopted a written code of business conduct and ethics which emphasizes the importance of matters relating to honest and ethical conduct, conflicts of interest, protection and proper use of corporate assets and opportunities, confidentiality of corporate information, compliance with laws and the reporting of any illegal or unethical behaviour.

Audit Committee

See “ Audit Committee ” for further details.

Nominating and Corporate Governance Committee

The Board established a Nominating and Corporate Governance Committee, which is comprised of Simon Pimstone (Chair), John Montalbano, and Richard Glickman, all of whom are independent directors of the Company within the meaning of NI 52-110.

The Nominating and Corporate Governance Committee, in consultation with the Chief Executive Officer, is responsible for recruiting and identifying individuals qualified to become new Board members and making recommendations to the Board regarding new director nominees, annually or as required. Further, the Nominating and Corporate Governance Committee is responsible for recommending to the Board the individual director appointments to each Board committee, annually or as required. In making such recommendations, the Nominating and Corporate Governance Committee considers the competencies and skills that the Board considers to be necessary for the Board as a whole to possess, for each existing director to possess, and for a new nominee to bring to the boardroom. The Nominating and Corporate Governance Committee may also recommend for approval by the Board the removal of a director from the Board or a committee thereof if he or she is no longer qualified to serve as a director under applicable requirement or any other appropriate reason.

In addition, the Nominating and Corporate Governance Committee has been delegated the responsibility of, among other things: (i) making recommendations to the Board regarding director remuneration; (ii) establishing an appropriate system to evaluate the effectiveness of the Board as a whole as well as its committees; (iii) monitoring conflicts of interest of both the Board and management; (iv) conducting periodic reviews of the Company’s corporate governance policies and making policy recommendations aimed at enhancing Board and committee effectiveness; (v) annually reviewing the Board and committee mandates and position descriptions of the Chief Executive Officer, and each committee Chair, and recommending to the Board that necessary changes be made; (vi) reviewing and recommending to the Board the appropriate structure, size, composition, mandate and members for Board committees, and the procedures to ensure that the Board and its committees function independently of management; (vii)

providing the Board with updates on developments in corporate governance; (viii) conducting periodic reviews of the relationship between management and the Board; (ix) reviewing monitoring and making recommendations regarding new director orientation and ongoing development of existing directors; and (x) reviewing reports from the Chief Executive Officer regarding unethical behaviour. See “– Evaluation of the Effectiveness of the Board and its Committees ” above.

Compensation Committee

Compensation matters are currently determined by the Board upon the recommendation of the Compensation Committee. The Board is responsible for reviewing the compensation plans and severance arrangements for management, to ensure they are commensurate with comparable companies. The Board ensures that Eupraxia has a plan for continuity of its officers and an executive compensation plan that is motivational and competitive. See “ Executive Compensation – Compensation Governance ” for further details.

AUDIT COMMITTEE

Audit Committee

The Audit Committee comprised of John Montalbano (Chair), Simon Pimstone and Paul Geyer, each of whom is “independent” and “financially literate” pursuant to NI 52-110.

The Audit Committee assists the Board in fulfilling its obligations relating to the integrity of the internal financial controls and financial reporting of the Company. The external auditors of the Company report directly to the Audit Committee. The Audit Committee’s principal responsibilities include (i) recommending the external auditor to be nominated for the purpose of providing audit, review or attest services for the Company, (ii) recommending the compensation of the external auditor, (iii) overseeing the work of the external auditor in performing audit, review or attest services for the Company, (iv) reviewing the Company’s financial statements, management’s discussion and analysis and annual and interim earnings press releases before the Company publicly discloses this information, and (v) establishing procedures for addressing complaints or concerns regarding accounting, internal control or auditing matters.

A copy of the Audit Committee’s charter is attached as Schedule C.

Relevant Education and Experience

Each member of the Audit Committee has adequate education and experience that is relevant to their performance as an Audit Committee member and, in particular, the requisite education and experience that have provided the member with:

• (a) an understanding of the accounting principles used by the Company to prepare its financial statements and the ability to assess the general application of those principles in connection with estimates, accruals and reserves;

• (b) experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements or experience actively supervising individuals engaged in such activities; and

• (c) an understanding of internal controls and procedures for financial reporting.

See “ Election of Directors – Director Biographies ” for a description of each Audit Committee members’ experience and education.

Pre-Approval Policies and Procedures

The Audit Committee has the authority and responsibility for pre-approval of all non-audit services to be provided to the Company or its subsidiary entities by the external auditors or the external auditors of the Company’s subsidiary entities, unless such pre-approval is otherwise appropriately delegated or if appropriate specific policies and procedures for the engagement of non-audit services have been adopted by the Audit Committee.

External Auditor Service Fees by Category

The aggregate fees billed by the Company’s external auditors in the last fiscal year for audit fees are set out in the table below. In the table, “Audit Fees” are fees billed by the Company’s external auditor for services provided in auditing the Company’s annual financial statements. “Audit-Related Fees” are fees not included in audit fees that are billed by the external 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 external auditor for professional services rendered for tax compliance, tax advice and tax planning. “All Other Fees” are fees billed by the external auditor for products and services not included in the foregoing categories. All fees are “as billed” on a cash basis by the Company. All amounts in the table are expressed in Canadian dollars.

Financial Year Ending	Audit Fees	Audit Related Fees	Tax Fees(1)	All Other Fees(2)
December 31, 2020	$30,000	$-	$6,000	$-
December 31, 2019	$32,800	$-	$5,000	$1,200

Notes:

(1) Tax Fees related to the preparation of income tax returns for the Company’s subsidiaries and fees related to the preparation of the Company’s Scientific Research and Experimental Development (SR&ED) claims.

(2) All Other Fees related to providing opinion letters to shareholder that invested in securities of the Company through a registered account.

STATEMENT OF EXECUTIVE COMPENSATION

Securities legislation requires the disclosure of the compensation received by each Named Executive Officer of the Company. “Named Executive Officer” is defined by securities legislation to mean: (i) the Chief Executive Officer; (ii) the Chief Financial Officer; (iii) each of the three most highly compensated executive officers of the Company, including any of its subsidiaries, or the three most highly compensated individuals acting in a similar capacity, other than the Chief Executive Officer and Chief Financial Officer, at the end of the most recently completed financial year whose total compensation was, individually more than $150,000 for that financial year; and (iv) each individual who would be a “Named Executive Officer” under paragraph (iii) but for the fact that the individual was neither an executive officer of the Company or its subsidiaries, nor acting in similar capacity, at the end of the most recently completed financial year (each, a “ NEO ” and collective, the “ NEOs ”).

The following discussion describes the significant elements of the compensation expected to be earned in fiscal 2021 by our NEOs, namely:

• James A. Helliwell, Chief Executive Officer of the Company;

• Bruce Cousins, President and Chief Financial Officer of the Company; and

• Amanda Malone, Chief Scientific Officer of the Company.

Compensation Discussion and Analysis

Eupraxia’s compensation philosophy for NEOs is designed to attract well qualified individuals in using salaries and long-term incentive compensation in the form of stock options or other suitable long-term incentives. The Company operates in a dynamic and rapidly evolving market. To succeed in this environment and to achieve our business and financial objectives, we need to attract, retain and motivate a highly talented team of executive officers.

Compensation plays an important role in achieving short and long-term business objectives that ultimately drive business success. The Company’s compensation philosophy includes fostering entrepreneurship at all levels of the organization by making long-term equity-based incentives a significant component of executive compensation. Executive compensation consists of a base salary (“ Base Salary ”), cash bonuses based on defined targets (“ Annual Bonus ”) and equity compensation in the form of long-term incentive stock options (“ Equity Compensation ”), designed to be competitive with comparable employers and to align management’s compensation with the long-term interests of the Company’s shareholders. The Annual Bonus is used as a short-term incentive to achieve Company objectives and Equity Compensation is designed to allow the participants to enjoy the benefits of any increase in Company valuation and share price, should such an increase occur.

The Company’s principal goal is to create value for its shareholders. The Company’s compensation philosophy reflects this goal, and is based on the following fundamental principles:

1. A compensation program aligned with shareholder interests – the Company aligns the goals of executives with maximizing long-term shareholder value;

2. A compensation program sensitive to performance – compensation for executive officers should fluctuate and be linked not only to individual performance, but also to:

3. (a) operating performance of the Company, considering ongoing drug development, and corporate successes; and

4. (b) market performance of the Company, considering current market conditions and market performance against peers; and

5. A compensation program that offers market competitive compensation in order to attract and retain talent – the compensation program should provide market competitive pay in terms of value and structure in order to retain existing employees who are performing according to their objectives and to attract new individuals of the highest caliber.

Based on this compensation philosophy, the objectives of the NEO compensation program have been defined as follows:

• to attract and retain highly qualified executive officers;

• to align the interests of executive officers with shareholders’ interests and with the execution of the Company’s business strategy;

• to evaluate executive performance on the basis of key measurements that correlate to longterm shareholder value; and

• to tie compensation directly to those measurements and rewards based on achieving and exceeding predetermined objectives.

The Base Salary, Annual Bonus and Equity Compensation for the NEOs is determined by the Board, with recommendation by the Compensation Committee. Each of the Compensation Committee members has direct experience that is relevant to his or her responsibilities in executive compensation. The Compensation Committee sets the compensation of the NEOs using their combined industry experience. The Compensation Committee designs its compensation programs to attract and retain executive officers with the talent and experience necessary for the success of the Company. The Compensation Committee ensures that the total compensation paid to all NEOs is fair and reasonable and is consistent with the Company’s compensation philosophy.

The Compensation Committee charter tasks the Compensation Committee with reviewing the Company’s compensation policies on an annual basis to determine whether they are aligned with the Company’s risk management principles and whether they might or are reasonably likely to encourage executives and employees to take excessive risks. In doing so, the Compensation Committee assesses whether the Equity Compensation policy would likely give rise to material risks to the Company. The Company has not identified any risks arising from the Equity Compensation policy that are reasonably likely to have a material adverse effect on the Company.

Aligning the Interests of the NEOs with the Interests of the Company’s Shareholders

The Company believes that transparent, objective and easily verified corporate goals, combined with individual performance goals, play an important role in creating and maintaining an effective compensation strategy for the NEOs. The Company’s objective is to establish benchmarks and targets for its NEOs which, if achieved, will enhance shareholder value.

In 2019, the Company retained Darcy O’Grady of O’Grady Consultants, external human resources consultants that worked with the Compensation Committee and the Board in creating benchmarks for executive compensation for the Company going forward. The benchmarks for evaluating compensation elements of executive companies, the compensation objectives and the corporate objectives are listed in the tables below.

tables below.
Compensation Element	Compensation Objectives	Corporate Objectives
Base Salary	Attract and Retain	Competitive pay ensures access to skilled employees and consultants necessary to achieve corporate objectives.
Annual Bonus	Attract and Retain	Bonus plans serve to focus employees’ efforts on key objectives, increase employee motivation by establishing a clear link between pay and performance and support stakeholder ideals by allowing employees to share in the success of the business.
Equity Compensation (Options)	Motivate and reward, align interests with shareholders	Long-term incentives motivate and reward employees and consultants to increase shareholder value by the achievement of long-term corporate strategies and objectives.

Base Salary comprises a portion of the total annual cash-based compensation that an NEO is paid; however, Annual Bonuses and Equity Compensation represent compensation that is “at risk” and thus may or may

not be paid to the respective NEO depending on: (i) whether the NEO is able to meet or exceed his or her applicable individual performance objectives; (ii) whether the Company has met its operational and corporate performance objectives; and (iii) market performance of the Common Shares relative to the market and peer common share performance.

The Compensation Committee meets at least annually (or more often as required) to consider performance objectives and actual performance relative to such objectives, and then makes compensation recommendations to the Board for consideration.

Principal Elements of Compensation

Given the evolving nature of the Company’s business, the Board continues to review and redesign the overall compensation plan for senior management so as to continue to address the objectives identified above.

The Company may adopt additional incentive mechanisms or arrangements to provide the Company with future flexibility in the design of our long-term incentive compensation arrangement in the form of restricted share units and/or performance share unit grants for our officers and employees or eligible directors.

Base Salaries

Base Salary is provided as a fixed source of compensation for the NEOs. Adjustments to Base Salaries are determined annually and may be increased based on the NEO’s success in meeting or exceeding individual objectives, as well as to maintain market competitiveness. Additionally, Base Salary can be adjusted as warranted throughout the year to reflect promotions or other changes in the scope of breadth of an NEO’s role or responsibilities.

The Base Salaries for each NEO that are expected to be earned in fiscal 2021 are as follows:

Name of Executive Officer	Base Salary(1)
James Helliwell, Chief Executive Officer and Director of the Company	$375,000
Bruce Cousins, President and Chief Financial Officer(2)	$325,000
AmandaMalone, ChiefScientific Officer	$325,000

Notes:

(1) The figures in this table represent annualized figures based on the current base salaries of each NEO.

(2) Alexander Rothwell resigned from the Company as Chief Financial Officer and Chief Operating Officer on May 3, 2021. Alexander Rothwell’s annualized Base Salary for the fiscal year 2021 was $300,000. Alexander Rothwell continued to receive his base salary until May 31, 2021. Bruce Cousins assumed the role of President and Chief Financial Officer of the Company on May 3, 2021.

Annual Bonuses

Annual Bonuses are designed to motivate the NEOs to meet our business and financial objectives generally and our annual financial performance targets in particular. Annual Bonus targets are set as a percentage of the relevant executive officers’ Base Salary, which varies based on his or her position level. Annual Bonuses paid to each NEO are based in part on the Company’s success in reaching its objectives, and in part on individual performance.

The Annual Bonuses that are in effect in fiscal 2021 for each NEO are as follows:

Name of Executive Officer	Bonus
James Helliwell, Chief Executive Officer and Director of the Company	Up to 50% of Base Salary
Bruce Cousins, President and Chief Financial Officer(1)	Up to 40% of Base Salary
Amanda Malone, Chief Scientific Officer	Up to 40% of Base Salary

Notes:

(1) Alexander Rothwell resigned from the Company as Chief Financial Officer and Chief Operating Officer on May 3, 2021. No annual bonus was paid to Alexander Rothwell following his resignation. Bruce Cousins assumed the role of President and Chief Financial Officer of the Company on May 3, 2021.

Equity Compensation

The grant of Options pursuant to the Existing Option Plan has been an integral component of the compensation arrangements of the NEOs, and the Company expects this to continue. The Board believes that the grant of stock options to the NEOs and Common Share ownership by the NEOs motivates such NEOs to strive towards achievement of the Company’s long-term strategic objectives, which will benefit all shareholders.

Options are awarded by the Board based on recommendations of the Compensation Committee. Decisions with respect to Option grants are be based upon the individual’s level of responsibility and their contribution towards the Company’s goals and objectives, and may be awarded in recognition of the achievement of a particular goal or extraordinary service. Consideration is also given to the number and value of previous grants of options. The Board considers the overall number of Options that are outstanding relative to the number of outstanding Common Shares in determining whether to make any new grants of Options and the size of such grants.

Particulars of the Existing Stock Option Plan

The following is a summary of the principal terms of the Existing Option Plan. For information in respect of the proposed amendments to the Existing Option Plan please see the section titled, “ Amendment to Stock Option Plan” , above in this Circular for more information. All information in this section is presented in respect of the Existing Option Plan, prior to giving effect to such amendments.

Administration

The Existing Option Plan is administered by the Board, subject to the Board’s power to delegate such administrative duties and powers as it may seem fit to a director or senior officer or employee of the Company, from time to time. In connection with its administrative role, the Board may make, amend and repeal at any time and from time to time such policies not inconsistent with the Existing Option Plan as it may deem necessary or advisable for the proper administration of the plan. Eupraxia’s administration of the Existing Option Plan is applied in a manner that is consistent with the policies and rules of the TSX and with such other stock exchanges on which the Common Shares may be listed from time to time.

The purpose of the Existing Option Plan is to provide an incentive to the officers, employees, Consultants (as defined in the Existing Option Plan) and other personnel of the Company or any of its subsidiaries to achieve the longer-term objectives of the Company; to give suitable recognition to the ability and industry of such persons who contribute materially to the success of the Company; and to attract to and retain in the employ of the Company or any of its subsidiaries, persons of experience and ability, by providing them with the opportunity to acquire an increased proprietary interest in the Company.

Securities

Each Option entitles the holder thereof (an “ Optionee ”) to purchase one Common Share at an exercise price set at the time of the grant.

Eligibility

Options may be granted only to any director, officer, employee, Consultant (as defined in the Existing Option Plan) or other personnel of the Company (including any subsidiary of the Company), as the Board may determine. For U.S. optionees, Options may not be granted to employees, directors, officers or Consultants who are providing services only to a “parent” of the Company, as such term is defined in Rule 405 of the U.S. Securities Act, unless (i) the Common Shares underlying the Option are treated as “service recipient stock” under Section 409A of the U.S. Internal Revenue Code of 1986, as amended, and the rules and regulations thereunder (the “ U.S. Code ”) or (ii) the Company has determined that such Options are exempt from or otherwise comply with Section 409A of the U.S. Code.

Exercise Price

The exercise price of an Option is determined by the Board at the time of the grant, but will be no lower than the volume weighted average trading price of the Common Shares on the TSX for the five trading days immediately preceding the relevant date (or on any such other stock exchange, inter-dealer quotation network or other organized trading facility on which the Common Shares trade or are quoted from time to time) (the “ Fair Market Value ”). If the Common Shares are suspended from trading or have not traded on the TSX or another stock exchange, inter-dealer quotation network or other organized trading facility for an extended period, the exercise price will be no lower than the Fair Market Value of the Common Shares at the time of the grant as determined by the Board in its sole discretion acting in good faith, and, with respect to U.S. Optionees, in accordance with Section 409A of the U.S. Code.

Vesting and Exercise Period

The vesting and exercise period of an Option are be determined by the Board at the time of grant; however, the expiry date of an Option shall be no later than ten years from the date of grant, or, other than for U.S. Optionees, in the case where the expiry date of an Option occurs during a period of time during which the Optionee cannot exercise or sell securities of the Company due to applicable policies of the Company in respect of insider trading (a “ Blackout Period ”) or within 10 business days after the expiry of the Blackout Period, then the expiry date for the Option will be the date that is the tenth business day after the expiry of the Blackout Period.

Cessation of Employment

Subject to certain limitations, in the event that an Optionee’s employment is terminated for any reason other than death, retirement, long-term disability or for cause, the Options held by such Optionee may be exercised within 60 days of termination, provided such Options have vested and not expired.

Subject to certain limitations, in the event that an Optionee’s employment is terminated due to retirement or as a result of long-term disability, unless the Board determines otherwise, the Options held by such Optionee may be exercised within one year of retirement or termination as a result of long-term disability, provided such Options have vested and not expired. In addition, such Optionee’s unvested Options shall continue to vest in accordance with their terms until the earlier of the date which is one year following the date of retirement or termination as a result of long-term disability and the expiry date.

Subject to certain limitations, in the event that an Optionee’s employment is terminated by reason of death, unless the Board determines otherwise, the Options held by such Optionee shall become fully vested and may be exercised by the legal personal representative(s) of such Optionee’s estate within one year following the death of the Optionee or prior to the expiry date, whichever is earlier.

In the event an Optionee’s employment is terminated for cause, the Options held by such Optionee shall expire and terminate immediately upon such Optionee ceasing to actively provided services to the Company in his or her capacity as a director, officer, employee or consultant, as the case may be.

Change of Control

Subject to the Board’s ability to accelerate the vesting of Options at any time in its sole discretion, if the Company completes a transaction which results in a “Change of Control” (as defined in the Existing Option Plan), all unvested Options will vest immediately prior to such completion and, if under such transaction the outstanding Options are assumed, substituted or continued by the Company’s successor, if within 90 days (or such other period as the Board determines) following the completion of such transaction an event(s) that would constitute “constructive dismissal” (as defined pursuant to common law) occurs, and if within 90 days (or such other period as the Board determines) following the date of such “constructive dismissal” an Optionee’s employment is terminated (whether at the Optionee’s discretion or otherwise) then all Options held by such Optionee will remain exercisable until the earlier of 90 days (or such other period as the Board determines) from the date of termination and the expiry date thereof.

Notwithstanding the foregoing, with respect to any performance-based Options granted under the Existing Option Plan, vesting of an Option will be dependent on achievement of the applicable performance criteria as of the date of the completion of the above-mentioned transaction and/or be prorated to the date of the completion of such transaction, as applicable.

Assignment

Subject to certain limitations, no assignment, sale, transfer, pledge or charge of an Option, whether voluntary or involuntary, by operation of law or otherwise, vests any interest or right in such Option whatsoever in any assignee or transferee and, immediately upon any assignment, sale, transfer, pledge or charge or attempt to assign, sell, transfer, pledge or charge, such Option shall terminate and be of no further force or effect.

Limitations

The total number of Common Shares issuable pursuant to the Existing Option Plan, subject to adjustments under the Existing Option Plan, and in combination with the aggregate number of Common Shares which may be issuable under any other Security Based Compensation Arrangement adopted by the Company, shall not exceed 15% of the Company’s issued and outstanding Common Shares, on a non-diluted basis, at the relevant time. The proposed amendments to the Existing Option Plan propose to (i) increase the total number of Common Shares issuable under the Existing Option Plan to up to a maximum 18.5% of the total number of issued and outstanding Common Shares (on a non-diluted basis) and (ii) remove the addition of the aggregate number of Common Shares reserved for issuance under any other security based compensation arrangements by the Company in its calculation when determining the number of Common Shares that can be issued under the Amended Option Plan in accordance to the limit in (i). See section titled, “ Ratification of Amendment to Option Plan” , above in this Circular for more information. Provided that such maximum number of Common Shares is not exceeded, following the exercise, expiration, cancellation or other termination of any Options under the Existing Option Plan, a number of Common Shares equal to the number of Options or rights so exercised, expired, cancelled or terminated shall automatically become

available for issuance in respect of Options that may subsequently be granted under the Existing Option Plan. No fractional Common Shares may be purchased or issued under the Existing Option Plan. In the event the number of Common Shares to be issued upon the exercise of an Option is a fraction, the Optionee will receive the next lowest whole number of Common Shares and will not receive any other form of compensation (cash or otherwise) for the fractional interest.

The Existing Option Plan does not impose a limitation on the number of Options that can be granted to any one person.

Insider Participation

The Existing Option Plan does not include limitations on insider participation.

Net Settlement of Options

In lieu of exercising an Option, with the prior written approval of the Board, which may be granted or withheld in its sole discretion, an Optionee or the legal personal representative(s) of such Optionee may elect to transfer, surrender and dispose of a specified number of Options, other than ISOs, to the Company in exchange for a number of Common Shares having a Fair Market Value equal to the intrinsic value of such Options disposed of and transferred to the Company (the “ Net Settlement ”). The decision of whether or not to permit Net Settlement for any Option is in the sole discretion of the Board and is made on a case by case basis. Upon the Net Settlement of Options (the “ Disposed Options ”), the Company shall, subject to any withholding taxes, deliver to the Optionee, that number of fully paid and non-assessable Common Shares (“ X ”) equal to the number of Disposed Options (“ Y ”) multiplied by the quotient obtained by dividing the result of the Fair Market Value of one Common Share, as at the date of exercise (“ B ”) less the exercise price per Common Share (“ A ”) by the Fair Market Value of one Common Share as determined as at the date of exercise (“ B ”). Expressed as a formula, such number of Common Shares shall be computed as follows:

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No fractional Common Shares shall be issuable upon the Net Settlement of options, such Common Shares to be rounded down to the nearest whole number. Upon the occurrence of the foregoing, the number of Common Shares underlying the Options disposed of shall be deducted from the number of Common Shares reserved for issuance under the Existing Option Plan.

Amendments without Shareholder Approval

Subject to certain exceptions, the Board has the right to suspend, discontinue or amend the Existing Option Plan without the approval of the holders of Common Shares or any other voting securities of the Company. The Board may, without limitation: (i) make any amendment of a typographical, grammatical, clerical or administrative nature or clarification correcting or rectifying any ambiguity, immaterial inconsistency, defective provision, mistake, or error or omission in this Plan or any Option; (ii) make any addition to, deletion from or alteration of the provisions of this Plan or any Option that are necessary to comply with applicable law or the requirements of any regulatory or governmental agency or applicable stock exchange and to avoid unanticipated consequences deemed by the Board to be inconsistent with the purpose of this Plan; or (iii) make any amendments to clarify existing provisions of this Plan or any Option provided that such changes do not have the effect of altering the scope, nature and intent of this Plan or any Option.

Amendments with Shareholder Approval

Subject to certain exceptions, approval from a majority of holders of Common Shares (and other voting securities of the Company) is required to effect the following amendments to the Existing Option Plan: (i) increasing the maximum number of Common Shares issuable pursuant to the Existing Option Plan; (ii) amendments that would reduce the exercise price of an outstanding Option; (iii) extending the expiry date of any Option beyond its expiry date determined at the date of grant, except with respect to an expiry date that occurs during a Blackout Period; provided, that for U.S. Optionees, the Board may not, with or without shareholder approval, extend the expiry date of any Option granted under the Existing Option Plan beyond the expiry date of the Option determined at the date of grant; (iv) expanding the categories of individuals who are eligible to participate in the Existing Option Plan; (v) amendments to permit the transfer or assignment of Options, except to permit a transfer to a family member, to an entity controlled by the Optionee or a family member, to a charity or for estate planning or estate settlement purposes; and (vi) amendments to the amendment provisions of the Existing Option Plan. In addition, for U.S. Optionees, to the extent determined by the plan administrator to be required by the U.S. Code to ensure that ISOs granted under the Existing Option Plan are qualified under Section 422 of the U.S. Code, Existing Option Plan amendments shall be subject to shareholder approval.

Compensation Governance

The Company’s Compensation Committee comprised of Simon Pimstone (Chair), John Montalbano and Paul Geyer, each of whom are considered “independent” pursuant to National Instrument 52-110 – Audit Committees (“ NI 52-110 ”).

The Compensation Committee is responsible for administering the Eupraxia’s compensation philosophy considering all risks associated with the Company’s compensation policies and practices. The Compensation Committee ensures that its compensation strategy is balanced in that it will motivate employees, while at the same time ensuring its compensation strategy is competitive to attract and retain high quality employees.

Each member of the Compensation Committee has business and other experience which is relevant to their position as a member of the Compensation Committee. By virtue of their differing professional backgrounds, business experience, knowledge of the Company’s industry, knowledge of corporate governance practices and, where appropriate, service on compensation committees of other reporting issuers and experience interacting with external consultants and advisors, the members of the Compensation Committee are able to make decisions on the suitability of the Company’s compensation policies and practices. See “ Election of Directors – Director Biographies ” for a description of each Compensation Committee members’ experience and education.

The charter of the Compensation Committee sets forth the purpose, composition, authority and responsibility of the Company’s Compensation Committee. The charter of the Compensation Committee provides that it is responsible for, among other things, the following matters:

• recommending to the Board compensation policies and guidelines for the Company, as well as recommending any necessary changes to current compensation policies and procedures;

• ensuring that the Company has in place programs to attract and develop management of the highest caliber;

• reviewing and approving corporate goals and objectives relevant to the compensation of the CEO and other executive officers, evaluating the performance of the CEO and the other executive

officers in light of those goals and objectives and approving their annual compensation levels, including salaries, bonuses, and stock option grants based on such evaluation;

• reviewing the compensation of directors for service on the Board and its committees and recommending to the Board the annual Board member compensation package, including retainer, committee member and chair retainers, Board and committee meeting attendance fees and any other form of compensation, such as stock option grants or stock awards;

• annually receiving from the Chief Executive Officer recommendations concerning annual compensation policies and budgets for all employees;

• regularly reporting to the Board on all of the Compensation Committee’s activities and findings during the year;

• reviewing executive compensation disclosure before the Company publicly discloses such information;

• periodically review and make recommendations to the Board with respect to succession planning matters concerning the Chief Executive Officer and other executive officers, as well as general executive development programs, after consideration of the objectives of the Diversity Policy of the Company; and

• review and recommend for Board approval the adoption or amendment of equity-based compensation plans of the Company and make recommendations to the Board with respect to any grants under equity-based compensation plans of the Company.

Executive Compensation-Related Fees

The fees disclosed next to the caption “ Executive Compensation-Related Fees ” are the aggregate fees billed by each consultant or advisor, or any of its affiliates, for services related to determining compensation for any of the Company’s directors and executive officers. The fees disclosed next to the caption “All Other Fees” are the aggregate fees billed for all other services provided by each consultant or advisor, or any of its affiliates, that are not reported next to the caption “ Executive Compensation-Related Fees ”.

Nature of Fee	2020	2019
Executive Compensation-RelatedFees	Nil	$10,800
AllOther Fees	Nil	$44,380(1)

Notes:

(1) The fees relate to general human resource services provided by the Company’s compensation consultant. See “ Aligning the Interests of the NEOs with the Interests of the Company’s Shareholders ” for details.

Compensation Risks

The Board and, as applicable, the Compensation Committee, considers and assesses the implications of risks associated with the Company’s compensation policies and practices and devotes such time and resources as it believes to be necessary in the circumstances. The Company’s practice of compensating its officers primarily through a mix of Base Salary, Annual Bonus and Equity Compensation is designed to mitigate risk by: (i) ensuring that the Company retains such officers; and (ii) aligning the interests of its officers with the short-term and long-term objectives of the Company and the shareholders of the Company.

The Board, together with the Compensation Committee, use a number of strategies to reduce the risk associated with compensation, including:

• discussing the principal risks associated with the Company’s compensation policies and practices and providing oversight of appropriate systems to manage such risks;

• ensuring that any compensation policies and practices that could encourage individuals within the Company to take inappropriate or excessive risks are identified, reported and mitigated;

• reviewing and approving annual corporate objectives and then assessing performance against these objectives when awarding the individual performance component of the executive officers’ Annual Bonus;

• considering the Company’s performance relative to its peers when reviewing the corporate performance component of the executive officers’ Annual Bonus; and

• setting standard vesting terms on stock option grants which align Optionees’ interests with longerterm growth of the Company.

As at the date of this Circular, the Board had not identified risks arising from the Company’s proposed compensation policies and practices that are reasonably likely to have a material adverse effect on the Company .

Hedging by Named Executive Officers or Directors

Under the Company’s Insider Trading Policy, directors, officers (including NEOs) and employees of the Company are prohibited from purchasing financial instruments, including prepaid variable forward contracts, equity swaps, collars, or units of exchange funds that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by the director, officer or employee.

External Management Companies

The Company has not entered into any agreement with any external management company that employs or retains one or more of the NEOs or Directors and the Company has not entered into any understanding, arrangement or agreement with any external management company to provide executive management services to the Company, directly or indirectly, in respect of which any compensation was paid by the Company.

Summary Compensation

The Company is not required to provide a table summarizing compensation paid, directly or indirectly to the NEOs for the financial years ended December 31, 2020 and December 31, 2019 and December 31, 2018 as the Company was not a reporting issuer at any time during the financial years ended December 31, 2020, December 31, 2019 and December 31, 2018. The Company became a reporting issuer on March 3, 2021

The following table sets out information concerning the expected fiscal 2021 compensation to be earned by, paid to, or awarded to the NEOs.

Name and Principal Position	Year	Salary or Retainer ($)(1)	Share- Based Awards	Option Based Award	Non-Equity Incentive Plan Compensation	Non-Equity Incentive Plan Compensation	All other Compensation ($)(2)	Total Compensation ($)
					Annual	Long- Term
James. A Helliwell CEO & Director	2021	375,000	Nil	829,575(3)	Nil	Nil	540,105	1,744,680
Bruce Cousins(4)	2021	216,667	Nil	645,055(5)	Nil	Nil	Nil	861,722

Name and Principal Position	Year	Salary or Retainer ($)(1)	Share- Based Awards	Option Based Award	Non-Equity Incentive Plan Compensation	Non-Equity Incentive Plan Compensation	All other Compensation ($)(2)	Total Compensation ($)
					Annual	Long- Term
President & Chief Financial Officer
Alexander Rothwell(6) Former Chief Financial Officer and Former Chief Operating Officer	2021	87,500	Nil	1,904,950(3)	Nil	Nil	464,308	2,456,758
Amanda Malone Chief Scientific Officer	2021	325,000	Nil	368,700(3)	Nil	Nil	442,950	1,136,650

Notes :

• (1) Represents the base salary expected to be paid in fiscal year 2021.

• (2) Represents deferred salaries and bonuses that had accrued in prior years and paid in 2021.

• (3) The Black-Scholes model is used as the methodology to calculate the grant date fair value ($4.91) and relied on the following weighted average assumptions and estimates for 2021 calculations: grant date of March 3, 2021, share price and exercise price of $8.00, expected stock price volatility of 72.50%, risk free interest rate of 0.91%, assumption of annual rate of dividends of 0%, and expected life of options of 5.5 years.

• (4) Bruce Cousins was appointed President and Chief Financial Officer of the Company on May 3, 2021.

• (5) Represents a one-time grant of options when Bruce Cousins joined the Company as President and Chief Financial Officer on May 3, 2021. The Black-Scholes model is used as the methodology to calculate the grant date fair value ($2.51) and relied on the following weighted average assumptions and estimates for 2021 calculations: grant date of March 3, 2021, share price of $4.88 and exercise price of $8.00, expected stock price volatility of 72.50%, risk free interest rate of 0.91%, assumption of annual rate of dividends of 0%, and expected life of options of 5.5 years.

• (6) Alexander Rothwell resigned from the Company as Chief Financial Officer and Chief Operating Officer on May 3, 2021. Alexander Rothwell continued to be paid his regular base salary from May 3, 2021 to May 31, 2021 while he was providing transition services to the Company. No additional compensation was paid to Alexander Rothwell upon resignation.

Termination and Change of Control Benefits

The Company does not have any termination or change of control provisions relating to the employment of its NEOs, other than the termination provisions contained in James Helliwell, Bruce Cousins and Amanda Malone’s employment contracts, which specify that if any of these three individuals are terminated by the Company without cause, the Company must provide each of them with written notice of termination or pay in lieu of such notice (or any combination thereof) in accordance with the following provisions:

James Helliwell

Under Dr. Helliwell’s employment agreement, termination of employment without cause entitles Dr. Helliwell to receive any unpaid salary, any approved but unpaid bonus, any incurred expenses upon termination for any reason, a lump sum amount equal to twenty-four months of Dr. Helliwell’s Base Salary at that time and the equivalent of one-year’s bonus payment based on the average bonus paid to Dr. Helliwell in the preceding two years or an average of target bonus for that year if bonuses for those years have not yet been determined.

Upon termination of Dr. Helliwell’s employment without cause, Dr. Helliwell will also be entitled to exercise any outstanding vested options at the earlier of sixty days from the effective date of termination and the expiry date of such options.

Termination with cause entitles Dr. Helliwell to receive only any unpaid salary to the date of termination.

In the event that Dr. Helliwell, in the twelve-month period following a change of control, is terminated without cause or for good reason, then he will be entitled to receive a payment equal to the sum of: (a) any

unpaid salary; and (b) an amount equal to two times Dr. Helliwell’s Base Salary at that time. In the circumstances where Dr. Helliwell is terminated without cause or for good reason within twelve months of a change of control, he will also continue to participate in the applicable benefit plans in which he participated on the date immediately preceding the date of termination of employment until the second anniversary of such date of termination of employment, and will receive comparable replacement coverage for twenty-four months from the effective date of termination in the event that any such benefits cannot be continued by the Company. Further, unvested outstanding equity grants will automatically vest in such circumstances and he will be permitted to exercise any such equity grants until expiry thereof, subject to the terms of the underlying compensation plans for such outstanding equity grants, as the case may be.

Bruce Cousins

Under Mr. Cousins’ employment agreement, termination of employment without cause entitles Mr. Cousins to receive any unpaid salary, any approved but unpaid bonus, any incurred expenses upon termination for any reason, a lump sum amount equal to nine months of Mr. Cousins’ Base Salary at that time and an additional lump sum payment equal to the average bonus payment paid to Mr. Cousins in the preceding two years or an average of target bonus for that year if bonuses for those years have not yet been determined, pro rated for the number of months of notice.

Upon termination of Mr. Cousins’ employment without cause, Mr. Cousins will also be entitled to exercise any outstanding vested options at the earlier of sixty days from the effective date of termination and the expiry date of such options.

Termination with cause entitles Mr. Cousins to receive only any unpaid salary to the date of termination.

In the event that Mr. Cousins, in the twelve-month period following a change of control, is terminated without cause or for good reason, then he will be entitled to receive a payment equal to the sum of: (a) any unpaid salary; and (b) an amount equal to two times Mr. Cousins’ Base Salary at that time. In the circumstances where Mr. Cousins is terminated without cause or for good reason within twelve months of a change of control, he will also continue to participate in the applicable benefit plans in which he participated on the date immediately preceding the date of termination of employment until the second anniversary of such date of termination of employment, and will receive comparable replacement coverage for twenty-four months from the effective date of termination in the event that any such benefits cannot be continued by the Company. Further, unvested outstanding equity grants will automatically vest in such circumstances and he will be permitted to exercise any such equity grants until expiry thereof, subject to the terms of the underlying compensation plans for such outstanding equity grants, as the case may be.

Amanda Malone

Under Dr. Malone’s employment agreement, termination of employment without cause entitles Dr. Malone to receive any unpaid salary, any approved but unpaid bonus, any incurred expenses upon termination for any reason, a lump sum amount equal to twenty-four months of Dr. Malone’s Base Salary at that time and an additional lump sum payment equal to the average bonus payment paid to Dr. Malone in the preceding two years or an average of target bonus for that year if bonuses for those years have not yet been determined, pro rated for a period of six months.

Upon termination of Dr. Malone’s employment without cause, Dr. Malone will also be entitled to exercise any outstanding vested options at the earlier of sixty days from the effective date of termination and the expiry date of such options.

Termination with cause entitles Dr. Malone to receive only any unpaid salary to the date of termination.

In the event that Dr. Malone, in the twelve-month period following a change of control, is terminated without cause or for good reason, then she will be entitled to receive a payment equal to the sum of: (a) any unpaid salary; and (b) an amount equal to two times Dr. Malone’s Base Salary at that time. In the circumstances where Dr. Malone is terminated without cause or for good reason within twelve months of a change of control, she will also continue to participate in the applicable benefit plans in which she participated on the date immediately preceding the date of termination of employment for a period of twenty-four months after such date of termination of employment, and will receive comparable replacement coverage for twenty-four months from the effective date of termination in the event that any such benefits cannot be continued by the Company. Further, unvested outstanding equity grants will automatically vest in such circumstances and she will be permitted to exercise any such equity grants until expiry thereof, subject to the terms of the underlying compensation plans for such outstanding equity grants, as the case may be.

The following table discloses the estimated amounts payable to those NEOs under a termination without cause or upon the occurrence of a change of control. Amounts disclosed in the table below assume that the NEOs termination of employment and/or a change of control (or, as applicable, termination following the change of control) occurred on December 31, 2020.

change of control) occurred on December 31, 2020.
Name and Principal Position	Termination without Cause(1)	Change of Control
James Helliwell, Chief Executive Officer and Director of the Company	$750,000	$750,000
Bruce Cousins President Chief Financial Officer(2)	$243,750	$650,000
Amanda Malone, ChiefScientific Officer	$325,000	$650,000

Notes:

(1) Each of James Helliwell, Bruce Cousins and Amanda Malone will receive a sum amount equal to twenty-four months, nine months and twelve months of their respective Base Salaries, respectively, and a lump sum bonus payment in the event of termination without cause pursuant to the terms of their respective employment agreement. The lump sum payable in respect of past bonus payments has been provided based on the current target bonus amounts under each respective employment agreement.

(2) Bruce Cousins was appointed President Chief Financial Officer of the Company on May 3, 2021

(3) Alexander Rothwell resigned from the Company as Chief Financial Officer and Chief Operating Officer on May 3, 2021. Alexander Rothwell continued to be paid his regular base salary from May 3, 2021 to May 31, 2021 while he was providing transition services to the Company. No additional compensation was paid to Alexander Rothwell upon resignation.

Pension Plan Benefits

Eupraxia does not anticipate having any deferred compensation plan or pension plan that provide for payments or benefits at, following or in connection with retirement.

Stock Options and Other Compensation Securities

The Company is not required to provide a table summarizing compensation securities that were granted or issued to each director and named executive officer by the Company during the financial years ended December 31, 2020, December 31, 2019 and December 31, 2018 for services provided or to be provided, directly or indirectly, to the Company or any of its subsidiaries as the Company was not a reporting issuer at any time during the financial years ended December 31, 2020 December 31, 2019 and December 31, 2018. The Company became a reporting issuer on March 3, 2021.

Outstanding Share-Based Awards and Option-Based Awards

The following table sets out the option-based and share-based awards for each NEO that are expected to be outstanding for fiscal 2021.

	Option-Based Awards	Option-Based Awards	Option-Based Awards	Option-Based Awards	Share-Based Awards	Share-Based Awards	Share-Based Awards
Name	Number of Securities Underlying Unexercised Options			Value of	Number of Common Shares or Units of	Market or Payout Value of Share-based Awards That Have Not Vested ($)	Market or Payout Value of Vested Share- Based Awards not paid out or distributed
				Unexercised	Common
				In-The-	Shares
		Exercise	Option	Money	That Have
		Price	Expiration	Options(1)	Not
		($)	Date	($)	Vested(2)
James A. Helliwell CEO	50,000 18,750 64,750 168,750	$8.00 $8.00 $8.00 $8.00	Mar 31, 2025 Nov 2, 2025 Mar 5, 2028 Mar 9,2031	Nil Nil Nil Nil	Nil	Nil	Nil
Bruce Cousins President and Chief Financial Officer	257,000	$8.00	May 3, 2031	Nil	Nil	Nil	Nil
Amanda Malone Chief Scientific Officer	12,500 3,750 30,000 75,000	$8.00 $8.00 $8.00 $8.00	Mar 31, 2025 Nov 2, 2025 Mar 5, 2028 Mar 9,2031	Nil Nil Nil Nil	Nil	Nil	Nil

Notes :

(1) Calculated using the closing price of the Company’s Common Shares on the TSX on October 25, 2021 of $2.32 and subtracting the exercise price of the in-the-money options. These options have not been, and may never be, exercised and actual gains, if any, on exercise will depend on the value of the Company’s Common Shares on the date of exercise.

(2) The figures in this column are calculated using the closing price of the Company’s Common Shares on the TSX on October 25, 2021 of $2.32.

DIRECTOR COMPENSATION

The Company’s director compensation program is designed to attract and retain individuals with the relevant skills and knowledge to serve on the Board. The Company’s director compensation also serves to align the interests of the directors of the Company with those of the shareholders of the Company. Eupraxia’s director compensation program reflects the Company’s relative size and reinforces the importance of shareholder value. The compensation program takes into account the time commitment, duties, and responsibilities of the directors of the Company, and director compensation practices at comparable companies. While director compensation amounts are not based on corporate performance, the Board has a formal performance assessment process to ensure director effectiveness and engagement.

Each director is entitled to participate in any security-based compensation arrangement or other plan adopted by Eupraxia with the approval of the Board and/or Eupraxia’s shareholders, as may be required by applicable law or TSX policies.

Eupraxia reimburses directors for expenses incurred on Eupraxia’s behalf. No additional fees, including meeting fees are paid to directors.

The following chart outlines the Company’s director compensation program for non-employee directors.

		Cash	Equity
Type of Fee		Compensation	Compensation(1)(2)
			10,000
Board Retainer	Board Chair	$9,375/quarter	Options/year
			10,000
	Board Member(1)	$6,250/quarter	Options/year
Audit Committee Retainer	Committee Chair	$5,000/quarter
	Committee Member	$2,500/quarter
Compensation Committee
Retainer	Committee Chair	$2,000/quarter
	Committee Member	$1,000/quarter
Nominating and Governance
Committee	Committee Chair	$1,500/quarter
	Committee Member	$750/quarter

Notes:

(1) New members of the Board will receive a one-time grant of 20,000 Options.

(2) 25% of the Options will vest on the grant date of such Options and then 25% on each anniversary of such grant date. See “ Stock Option Plan ”.

The Company is not required to provide a table summarizing compensation paid, directly or indirectly to the directors of the Company for the financial years ended December 31, 2020 and December 31, 2019 and December 31, 2018 as the Company was not a reporting issuer at any time during the financial years ended December 31, 2020, December 31, 2019 and December 31, 2018. The Company became a reporting issuer on March 3, 2021.

The following table sets out information concerning the expected fiscal 2021 compensation to be earned by, paid to, or awarded to the directors of the Company.

Director	Fees Earned(1)	Share-Based Awards	Option-Based Awards(2)	Non-Equity Incentive Plan Compensation	All Other Compensation	Total
Simon Pimstone	$14,375	Nil	$270,380	Nil	Nil	$284,755
Paul Geyer	$8,750	Nil	$147,480	Nil	Nil	$156,230
Richard Glickman(3)	$9,000	Nil	$614,500	Nil	Nil	$623,500
John Montalbano	$12,000	Nil	$184,350	Nil	Nil	$196,350
Michael Wilmink	$7,250	Nil	$147,480	Nil	Nil	$154,730

Notes:

(1) Represents anticipated retainer fees payable with respect to the fourth quarter.

(2) The Black-Scholes model is used as the methodology to calculate the grant date fair value ($4.91) and relied on the following weighted average assumptions and estimates for 2021 calculations: grant date of March 3, 2021, share price and exercise price of $8.00, expected stock price volatility of 72.50%, risk free interest rate of 0.91%, assumption of annual rate of dividends of 0%, and expected life of options of 5.5 years.

(3) Richard Glickman received a one-time grant of 125,000 options of the Company upon joining the Board on March 9, 2021. See “ Outstanding Share-Based Awards and Option-Based Awards ”.

Other than as discussed above, the Company has no arrangements, standard or otherwise, pursuant to which independent directors are compensated by the Company or its subsidiaries for their services in their capacity as directors, or for committee participation, involvement in special assignments or for services as a consultant or expert during the most recently completed financial year or subsequently, up to and including the date of this Circular. The Company does, however, reimburse the independent directors for all reasonable out-of-pocket costs incurred by them in connection with their services to the Company.

Incentive Plan Awards – Outstanding Share-Based Awards and Option-Based Awards

The Company is not required to provide a table summarizing compensation securities that were granted or issued to each director by the Company during the financial years ended December 31, 2020, December 31, 2019 and December 31, 2018 for services provided or to be provided, directly or indirectly, to the Company or any of its subsidiaries as the Company was not a reporting issuer at any time during the financial years ended December 31, 2020 December 31, 2019 and December 31, 2018. The Company became a reporting issuer on March 3, 2021.

The following table sets out the option-based and share-based awards for each director of the Company that are expected to be outstanding for fiscal 2021.

	Option-Based Awards	Option-Based Awards	Option-Based Awards	Option-Based Awards	Share-Based Awards	Share-Based Awards	Share-Based Awards
Name	Number of Securities Underlying Unexercised Options	Exercise Price	Option Expiration Date	Value of Unexercised In-The- Money Options(1)	Number of Common Shares or Units of Common Shares That Have Not Vested(2)	Market or	Market or Payout Value of Vested Share- Based Awards not paid out or distributed
						Payout Value
						of Share- based Awards That Have Not Vested
Simon Pimstone	43,750	$8.00	Mar 31,2025	Nil	Nil	Nil	Nil
	25,000	$8.00	Nov 2,2025	Nil
	68,750	$8.00	Mar 5,2028	Nil
	55,000	$8.00	Mar 9,2031	Nil
Paul Geyer	25,000	$8.00	Mar 31,2025	Nil	Nil	Nil	Nil
	12,500	$8.00	Nov 2,2025	Nil
	48,750 30,000	$8.00 $8.00	Mar 5,2028	Nil Nil
			Mar 9,2031
Richard Glickman	125,000	$8.00	Mar 9,2031	Nil	Nil	Nil	Nil
John Montalbano	25,000	$8.00	Mar 31,2025	Nil	Nil	Nil	Nil
	12,500	$8.00	Nov 2,2025	Nil
	48,750	$8.00	Mar 5,2028	Nil
	37,500	$8.00	Mar 9,2031	Nil
Michael Wilmink	25,000	$8.00	Mar 31,2025	Nil	Nil	Nil	Nil
	12,500	$8.00	Nov 2,2025	Nil
	32,500	$8.00	Mar 5,2028	Nil
	30,000	$8.00	Mar 9,2031	Nil

Notes:

(1) Calculated using the closing price of the Company’s Common Shares on the TSX on October 25, 2021, of $2.32 and subtracting the exercise price of the in-the-money options. These options have not been, and may never be, exercised and actual gains, if any, on exercise will depend on the value of the Company’s Common Shares on the date of exercise.

(2) The figures in this column are calculated using the closing price of the Company’s Common Shares on the TSX on October 25, 2021 of $2.32.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The Board of Directors of the Company initially approved the Existing Option Plan on October 25, 2015. In connection with the listing of Common Shares on the TSX following the Company’s initial public offering, the Company amended and restated the Existing Option Plan in order to comply with the requirements of the TSX and to be competitive with the benefit programs of other companies in the life sciences industry.

51270328.10

The Board intends to use the Options issued under the Existing Option Plan as well as under the Amended Option Plan as part of the Company’s overall executive compensation plan. See section titled, “Amendment to Stock Option Plan” , above in this Circular for more information.

Equity Compensation Plan Information

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights(1) (2)	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by securityholders	1,817,250	$8.00	560,630
Equity compensation plans not approved by securityholders	257,000	$8.00	0(1)
Total	2,074,250	$8.00	560,630

Notes:

(1) The number of Options outstanding under the Amended Option Plan is 2,634,880, representing 18.5% of the issued and outstanding shares of the Company as of the date hereof, which is subject to the approval of the shareholders at the Meeting. The number of Common Shares reserved for issuance is 560,630, representing 3.9% of the issued and outstanding shares of the Company as of the date hereof, which is subject to the approval of the shareholders at the Meeting. See “ Amendment to Stock Option Plan ”.

(2) The Company has granted Mr. Bruce Cousins 257,000 options under the Amended Option Plan. At the Meeting, disinterested shareholders must approve the Option Grant Resolution to confirm and approve this grant of options in order for such options to be exercisable. See “ Ratification of Grant under the Amended Option Plan.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

Aggregate Indebtedness

Other than as set out below, none of the directors, executive officers or employees of the Company or former directors, executive officers or employees of the Company or its subsidiaries have any indebtedness outstanding to the Company or any of the subsidiaries as at the date hereof and no indebtedness of these individuals to another entity is the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Company or any of the subsidiaries as at the date hereof. Additionally, no individual who is, or at any time during the Company’s last financial year was, a director or executive officer of the Company, proposed management nominee for director of the Company or associate of any such director, executive officer or proposed nominee is as at the date hereof, or at any time since the beginning of the Company’s last financial year has been, indebted to the Company or any of its subsidiaries or to another entity where the indebtedness to such other entity is the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Company or any of its subsidiaries, including indebtedness for security purchase or any other programs.

Indebtedness of Directors and Executive Officers under Securities Purchase and Other Programs

Amanda Malone, the Chief Scientific Officer of the Company, holds 225 Class B Common Shares of Eupraxia Pharma Inc., a subsidiary of the Company. In the event Dr. Malone’s Class B Common Shares are exchanged into Common Shares on a non-voluntary basis and such exchange results in a tax liability to Dr. Malone, then, subject to certain conditions, the Company has agreed to lend Dr. Malone an amount

equal to such tax liability at an interest rate not to exceed the then current prescribed rate under the Income Tax Act (Canada). Such loan will be secured by the Common Shares acquired by Dr. Malone under such conversion and shall be due and payable in full on the date that is 24 months from the date of advance.

INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON

Except as disclosed herein, no director or executive officer of the Company, nor any person who has held such a position since the beginning of the last completed financial year end of the Company, nor any proposed nominee for election as a director of the Company, nor any associate or affiliate of the foregoing persons, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on at the Meeting other than the ratification, confirmation and approval of certain grant of stock options, as set forth under the heading “ Ratification of Grant under the Amended Option Plan ”.

MANAGEMENT CONTRACTS

Except as set out herein , there are no management functions of the Company which are to any substantial degree performed by a person or company other than the directors or executive officers of the Company.

ADDITIONAL INFORMATION

Additional information relating to the Company is available on the Company’s SEDAR profile at www.sedar.com and on the Company’s website at www.eupraxiapharma.com. Shareholders may obtain without charge additional copies of the Company’s latest consolidated financial statements, together with the auditor’s report and management’s discussion and analysis for the Company’s most recently completed financial year by contacting the Company at telephone (250) 509-3968, by mail: Suite 201, 2067 Cadboro Bay Road, Victoria, BC, V8R 5G4, via email at info@eupraxiapharma.com or via the Company’s website. Financial information regarding the Company is provided in its consolidated financial statements and management’s discussion and analysis for the financial years ended December 31, 2020 and 2019.

OTHER MATTERS

The Board is not aware of any other matters which it anticipates will come before the Meeting as of the date of mailing of this Circular.

DIRECTORS’ APPROVAL

The contents of this Circular and its distribution to shareholders have been approved by the Board of the Company.

DATED at Vancouver, British Columbia, October 27, 2021.

BY ORDER OF THE BOARD

(signed) James A. Helliwell

James A. Helliwell Chief Executive Officer and Director

SCHEDULE A

Blackline of the Amended Stock Option Plan

(See attached)

EUPRAXIA PHARMACEUTICALS INC. AMENDED AND RESTATED STOCK OPTION PLAN EFFECTIVE MARCH 9, 2021 AND AMENDED ON MAY 3, 2021 and OCTOBER 27, 2021

ARTICLE 1 INTRODUCTION AND INTERPRETATION

This Plan amends and restates in its entirety, as of the Effective Date, the Amended and Restated Stock Option Plan of the Company approved by the Board on September 27, 2015, as amended and restated on February 19, 2018 (the “ Prior Plan ”). Each Option granted under the Prior Plan will be governed solely by the terms and conditions of the Plan and the instrument evidencing such grant.

1.1

Purpose

The purpose of the Plan is to provide an incentive to the officers, employees, Consultants and other personnel of the Company or any of its subsidiaries to achieve the longer-term objectives of the Company; to give suitable recognition to the ability and industry of such persons who contribute materially to the success of the Company; and to attract to and retain in the employ of the Company or any of its subsidiaries, persons of experience and ability, by providing them with the opportunity to acquire an increased proprietary interest in the Company.

1.2 Definitions

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

• (a) “ Administrative Agreement ” has the meaning set forth in Section 2.2(a);

• (b) “ affiliate ” and “ associate ” have the meanings set forth in the Securities Act (British Columbia);

• (c) “ Approval Date ” has the meaning set forth in Section 4.1(b);

• (d) “ Blackout Period ” means a period of time during which the Optionee cannot exercise an Option, or sell shares, due to applicable policies of the Company in respect of insider trading;

• (e) “ Board ” means the board of directors of the Company as constituted from time to time;

• (f) “ Business Day ” any day that is not a Saturday, Sunday or holiday (as defined in the Interpretation Act (Canada)) in Vancouver, British Columbia;

• (g) “ Change of Control ” includes:

• (i) the acquisition whether directly or indirectly, by a person or company, or any persons or companies acting jointly or in concert (as determined in accordance with the Securities Act (British Columbia) and the rules and regulations thereunder) of voting securities of the Company which, together with any other voting securities of the Company held by such person or company or persons or companies, constitute, in the aggregate, more than 50% of all outstanding voting securities of the Company;

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• (ii) an amalgamation, arrangement or other form of business combination of the Company with another company which results in the holders of voting securities of that other company holding, in the aggregate, 50% or more of all outstanding voting securities of the Company (including a merged or successor company) resulting from the business combination;

• (iii) the sale, lease or exchange of all or substantially all of the property of the Company to another person, other than in the ordinary course of business of the Company or to a related entity; or

• (iv) any other transaction that is deemed to be a “Change of Control” for the purposes of this Plan by the Board in its sole discretion.

• (h) “ Committee ” means the Compensation Committee for the Board, or such other persons as are designated by the Board, provided, however, that if no Compensation Committee is in existence at any particular time and the Board has not appointed another committee of the Board to administer the Plan, all references to the Plan to “Committee” shall at such time be in reference to the Board;

• (i) “ Company ” means Eupraxia Pharmaceuticals Inc. and its successors and assigns, and any reference in the Plan to action by the Company means action by or under the authority of the Board or the Committee;

• (j) “ Consultant ” means a person, other than an employee, executive officer, or director of the Company or of a related entity of the Company, that (a) is engaged to provide services to the Company or a related entity of the Company, other than services provided in relation to a distribution, for an initial, renewable or extended period of twelve months or more, (b) provides the services under a written contract with the Company or a related entity of the Company, and (c) spends or will spend a significant amount of time and attention on the affairs and business of the Company or a related entity of the Company; provided that for U.S. Optionees, “Consultant” shall mean consultant or adviser who provides bona fide services to the Company or affiliate as an independent contractor and who qualifies as a consultant or advisor under Instruction A.1.(a)(1) of Form S-8 under the U.S. Securities Act;

• (k)

• “ Effective Date ” means March 9, 2021;

• (l) “ Eligible Person ” means any director, officer, employee, Consultant or other personnel of the Company (including any subsidiary of the Company);

• (m) “ Exchange ” means, collectively, the Toronto Stock Exchange, any successor thereto and any other stock exchange, inter-dealer quotation network or other organized trading facility through which the Shares trade or are quoted from time to time;

• (n) “ Exercise Period ” means the period of time during which the Optionee is permitted to exercise his Option;

• (o) “ Exercise Price ” means the price per Share at which the Optionee is entitled to purchase the underlying share or shares in the Company, subject to any adjustments pursuant to Section 7.2;

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• (p) “ Expiry Date ” means the date designated by the Board at the time of grant on which the Option expires and is of no further force and effect, except in accordance with the provisions related to a Blackout Period described in Section 4.1(c);

• (q) “ Fair Market Value ” means, with respect to any particular date, the volume weighted average trading price of the Shares on the Toronto Stock Exchange for the five trading days immediately preceding the relevant date (or on any such other stock exchange, inter-dealer quotation network or other organized trading facility on which the Shares trade or are quoted from time to time). If the Shares are suspended from trading or have not traded on the Toronto Stock Exchange or another stock exchange, inter-dealer quotation network or other organized trading facility for an extended period, the Fair Market Value will be the fair market value of the shares as determined by the Board in its sole discretion acting in good faith and, with respect to U.S. Optionees, in accordance with Section 409A of the U.S. Code;

• (r) “ Individual Limit ” has the meaning set forth in Section 4.4;

• (s) “ Insider ” means an insider of the Company, as defined in the Securities Act (British Columbia), and any associate or affiliate of any such insider;

• (t) “ ISO ” means any Option designated and qualified as an “incentive stock option” as defined in Section 422 of the U.S. Code.

• (u) “ Long-Term Disability ” means a circumstance whereby the Company is able and elects, either under the terms of an employment contract or at common law, to terminate or consider frustrated the employment of an Optionee due to the Optionee’s long-term disability;

• (v) “ Notice of Grant of Options ” means a written notice from the Company to the Optionee evidencing a grant of Options made pursuant to the Plan;

• (w) “ Option ” means an option to purchase a Share granted under the Plan;

• (x)

• “ Optionee ” means an Eligible Person to whom an Option has been granted;

• (y) “ Plan ” means this Amended and Restated Stock Option Plan, including all Schedules hereto, as amended and restated from time to time in accordance with its terms;

• (z) “ Plan Administrator ” means the person or corporation appointed by the Company under Section 2.2 to provide administrative services in respect of the Plan;

• (aa) “ Retirement ” means a resignation from employment with the Company by an Optionee in circumstances the Committee, acting reasonably, deems to constitute retirement from employment, and not resignation to obtain alternate employment;

• ~~(bb) “~~ ~~Security Based Compensation Arrangements ” has the meaning ascribed thereto in Part VI of the Company Manual of the Toronto Stock Exchange, as amended from time to time;~~

• (bb) ~~(cc) “~~ Shares ” means a common share in the capital of the Company and any other share that may be added thereto or substituted therefore as a result of amendments to the articles of the Company, reorganization or otherwise, including any rights that form a part of the common share or substituted share;

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• ~~(cc) (dd) “~~ Stock Exchange Rules ” means the applicable rules of the Exchange;

• ~~(dd) (ee)~~ “ subsidiary ” has the meaning set forth in the Securities Act (British Columbia);

• (ee) ~~(ff) “~~ Successor Corporation ” has the meaning set forth in Section 7.4;

• (ff) ~~(gg) “~~ Transaction ” has the meaning set forth in Section 7.1;

• (gg) ~~(hh) “~~ U.S. Code ” means the U.S. Internal Revenue Code of 1986, as amended, and the rules and regulations thereunder; and

• ~~(hh) (ii) “~~ U.S. Securities Act ” means the United States Securities Act of 1933, as amended.

1.3 Construction and Interpretation

• (a) In this Plan, all references to the masculine include the feminine; references to the singular shall include the plural and vice versa, as the context shall require.

• (b) The headings of all articles, sections and paragraphs in the Plan are inserted for convenience of reference only and shall not affect the construction or interpretation of the Plan. References to “Article” “Section” or “Paragraph” mean an article, section or paragraph contained in the Plan unless expressly stated otherwise.

• (c) In this Plan, “including” and “includes” mean including or includes, as the case may be, without limitation. The words “hereto”, “herein”, “hereby”, “hereunder”, “hereof” and similar expressions mean or refer to the Plan as a whole and not to any particular article, section, paragraph or other part hereof.

• (d) Whenever the Board or, where applicable, the Committee or any sub-delegate of the Committee is to exercise discretion in the administration of the terms and conditions of this Plan, the term “discretion” means the sole and absolute discretion of the Board, the Committee or sub-delegate of the Committee, as the case may be.

1.4 Effective Date

The Plan shall be effective as of the Effective Date and Options may be granted immediately thereafter, subject to receipt of all regulatory approvals. The Board shall review and confirm the terms of the Plan from time to time.

ARTICLE 2 PLAN ADMINISTRATION

2.1 Administration

The Plan shall be administered by the Board, which shall have the authority in its sole and absolute discretion to administer the Plan and to exercise (or delegate to the Committee the power to exercise) all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, all acting reasonably and in good faith and subject to and not inconsistent with the express provisions of this Plan. Where the Board has delegated a power or authority to the Committee, any reference to the Board in this Plan shall be deemed to be a reference to the Committee.

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The powers and duties of the Board include, without limitation, the following:

• (a) the authority to grant Options;

• (b) to determine the number of Shares subject by each Option;

• (c) to determine the Exercise Price of each Option, subject to the provisions of this Plan;

• (d) to determine the Eligible Persons to whom, and the time or times at which, Options shall be granted;

• (e) to determine the time or times when Options will be granted, vested and exercisable (including any determination to accelerate the vesting of any Options granted hereunder) and determine the Expiry Date of an Option;

• (f) to determine if the Shares that are issuable on the exercise of an Option will be subject to any restrictions upon the exercise of such Option;

• (g) to establish policies and to adopt rules and regulations for carrying out the purposes, provisions and administration of the Plan;

• (h) to interpret and construe the Plan and to determine all questions arising out of the Plan and any Option granted pursuant to the Plan (and any such interpretation, construction or determination made by the Board shall be final, binding and conclusive for all purposes on the Company and the Optionee);

• (i) to determine and prescribe the terms and provisions of Notices of Grant of Options (which need not be identical) provided in connection with grants of Options and the form of documents or processes in respect of the exercise of Options;

• (j) to make all other determinations deemed necessary or advisable for the administration of the Plan; and

• (k) to appoint, in accordance with Section 2.2, one or more persons or corporations to perform the duties of the Plan Administrator under the Plan.

Without limiting the discretion conferred on the Board pursuant to this Section 2.1, the Board’s decision to approve the grant of an Option to an Eligible Person in any period shall not require the Board to approve the grant of an Option to any Eligible Person in any other period; nor shall the Board’s decision with respect to the size or terms and conditions of an Option grant in any period require it to approve the grant of Options of the same or similar size or with the same or similar terms and conditions to any Eligible Person in any other period. The Board shall not be precluded from approving the grant of an Option to any Eligible Person solely because such Eligible Person may previously have been granted an Option under this Plan or any other similar compensation arrangement of the Company.

2.2 Agreements

• (a) The Company may enter into an agreement or agreements with a person or corporation to perform the duties of the Plan Administrator as set out in this Plan (each, an “ Administrative Agreement ”).

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• (b) The Company shall have the right at any time and from time to time, to remove from office the Plan Administrator under the Plan and to appoint another Plan Administrator in its stead in accordance with the terms of the relevant Administrative Agreement.

2.3 Shares Subject to Plan

Options may be granted in respect of authorized and unissued Shares, provided that the aggregate number of Shares reserved for issuance under this Plan, subject to adjustment or increase of such number pursuant to the provisions of Section 7.2, ~~and in combination with the aggregate number of Shares which may be issuable under any other Security Based Compensation Arrangement adopted by the Company, s~~ hall not exceed ~~151~~ 8.5% of the number of issued and outstanding Shares (on a non-diluted basis) at the relevant time. Provided that such maximum number of Shares is not exceeded, following the exercise, expiration, cancellation or other termination of any Options under the Plan, a number of Shares equal to the number of Options or rights so exercised, expired, cancelled or terminated shall automatically become available for issuance in respect of Options that may subsequently be granted under the Plan. No fractional Shares may be purchased or issued under the Plan. In the event the number of Shares to be issued upon the exercise of an Option is a fraction, the Optionee will receive the next lowest whole number of Shares and will not receive any other form of compensation (cash or otherwise) for the fractional interest.

2.4 Conditions to Grant or Exercise

The Board may, in its discretion, require as conditions to the grant or exercise of any Option, that the Optionee shall have:

• (a) represented, warranted and agreed in form and substance satisfactory to the Company that he, she or it is acquiring and will acquire such Option and the Shares to be issued upon the exercise thereof or, as the case may be, is acquiring such Shares, for his, her or its own account, for investment and not with a view to or in connection with any distribution, that he, she or it has had access to such information as is necessary to enable him or her to evaluate the merits and risks of such investment and that he or she is able to bear the economic risk of holding such Shares for an indefinite period;

• (b) provided certain representations, warranties and certifications to the Company to satisfy the requirements of applicable securities laws, including, without limitation, exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws;

• (c) agreed to restrictions on transfer in form and substance satisfactory to the Company and to an endorsement on any option agreement or certificate representing the Shares making appropriate reference to such restrictions; and

• (d) agreed to indemnify the Company in connection with the foregoing.

2.5 Additional Requirements

Any Option granted under the Plan shall be subject to the requirement that, if at any time counsel to the Company shall determine that the listing, registration or qualification of the Shares subject to such Option upon any securities exchange or under any law or regulation of any jurisdiction, or the consent or approval of any securities exchange or any governmental or regulatory body, is necessary as a condition of, or in connection with, the grant or exercise of such Option or the issuance or purchase of Shares thereunder, such Option may not be accepted or exercised in whole or in part unless such

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listing, registration, qualification, consent or approval shall have been effected or obtained on conditions acceptable to the Board. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration, qualification, consent or approval. Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of applicable securities law, including, without limitation, the U.S. Securities Act, the United States Securities Exchange Act of 1934 , as amended, applicable U.S. state securities laws, the rules and regulations promulgated thereunder, and the requirements of any stock exchange or consolidated stock price reporting system on which prices for the Shares are quoted at any given time.

ARTICLE 3 PLAN PARTICIPATION

3.1 Eligibility

Options may be granted only to Eligible Persons as the Board may determine, provided that no Eligible Person has any claim or right to be granted an Option; provided further, that for U.S. Optionees, Options may not be granted to employees, directors, officers or Consultants who are providing services only to any “parent” of the Company, as such term is defined in Rule 405 of the U.S. Securities Act, unless (i) the Shares underlying the Option is treated as “service recipient stock” under Section 409A of the U.S. Code or (ii) the Company has determined that such Options are exempt from or otherwise comply with Section 409A of the U.S. Code. In determining the Eligible Persons to whom Options may be granted and the number of Options granted to any Eligible Person, the Board may take into account such factors as it shall determine in its sole and absolute discretion.

3.2 Participation

Participation in the Plan by Eligible Persons is voluntary.

ARTICLE 4 GRANT OF OPTIONS

4.1 Grant of Options

Subject to, and except as herein and as otherwise specifically provided for in this Plan, the number of Shares subject to each Option, the Exercise Price, the Expiry Date of each Option, the extent to which each Option vests and is exercisable from time to time during the term of the Option and other terms and conditions relating to each such Option shall be determined by the Board; provided, however, that:

• (a) the Expiry Date of an Option shall be no later than the date which is ten years from the date of grant of such Option;

• (b) the date of grant of an Option shall be either the date on which such Option was approved by the Board (the “ Approval Date ”); and

• (c) other than for U.S. Optionees, notwithstanding Section 4.1(a), if the Expiry Date of an Option occurs during a Blackout Period applicable to the relevant Optionee, or within ten Business Days after the expiry of a Blackout Period applicable to the relevant Optionee, then the Expiry Date for the Option shall be the date that is the tenth Business Day after the expiry of the Blackout Period (the “ Blackout Expiry Date ”).

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4.2 Notice of Grant of Options

Each Option granted under the Plan shall be subject to the terms and conditions of the Plan and evidenced by a Notice of Grant of Options and such other terms and conditions as the Board, in its discretion, shall establish. The form of Notice of Grant of Options is attached hereto as Schedule “A”.

4.3 Exercise Price

The Exercise Price for Shares that are subject to any Option shall in no circumstances be lower than the Fair Market Value, calculated in accordance with the terms of the Plan at the date of grant of the Option.

ARTICLE 5 EXERCISE OF OPTIONS

5.1 Exercise

Subject to the provisions of the Plan, an Option may be exercised from time to time by delivery to the Plan Administrator or, if no Plan Administrator is appointed pursuant to the Plan, to the Company, a written notice of exercise specifying the number of Shares with respect to which the Options are being exercised and accompanied by payment in full, by way of cash, cheque or other form of payment acceptable to the Company, of (a) the Exercise Price of the Shares to be purchased and (b) an amount for any tax withholding or remittance obligations of the Optionee or the Company arising under applicable law (or by entering into some other arrangement acceptable to the Company). Certificates or other evidence of ownership for such Shares shall be issued and delivered to the Optionee within a reasonable time following the receipt of such notice and payment.

If, as and when any Shares have been duly purchased and paid for under the terms of an Option, and all conditions relating to the exercise of an Option have been fulfilled to the satisfaction of the Board, such Shares shall be conclusively deemed allotted and issued as fully paid and non-assessable Shares at the price paid therefor.

Notwithstanding the above, the Company may implement (or cause to have implemented) such systems and procedures (including systems and procedures operated by the Plan Administrator) from time to time to facilitate the exercise of Options pursuant to this Plan and shall provide Optionees with all necessary details regarding such systems and procedures to facilitate the exercise of Options from time to time in accordance with their terms.

Notwithstanding any of the provisions of the Plan, any Notice of Grant of Options or any Option, the Company’s obligation to issue Shares to an Optionee pursuant to the exercise of any Option shall be subject to:

• (a) completion of such registration or other qualification of such Shares or obtaining approval of such governmental or regulatory authority as the Company shall determine to be necessary or advisable in connection with the authorization, issuance or sale thereof;

• (b) the admission of such Shares to listing on any stock exchange on which the Shares may then be listed;

• (c) the receipt from the Optionee of such representations, warranties, agreements and undertakings, as the Company determines is necessary or advisable in order to safeguard against the violation of the securities laws of any jurisdiction; and

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• (d) the satisfaction of any conditions on exercise prescribed pursuant to the provisions hereof.

5.2 Net Settlement of Options

In lieu of exercising an Option as provided in Section 5.1 hereof, with the prior written approval of the Board, which may be granted or withheld in its sole discretion, an Optionee or the legal personal representative(s) of such Optionee may elect to transfer, surrender and dispose of a specified number of Options (other than ISOs) to the Company in exchange for a number of Shares having a fair market value equal to the intrinsic value of such Options disposed of and transferred to the Company (the “ Net Settlement ”) by completing the Notice of Net Settlement set out as Schedule “B”. The decision of whether or not to permit Net Settlement for any Option is in the sole discretion of the Board and will be made on a case by case basis. Upon the Net Settlement of Options (the “ Disposed Options ”), the Company shall, subject to section 9.6 hereof, deliver to the Optionee, that number of fully paid and non-assessable Shares (“ X ”) equal to the number of Disposed Options (“ Y ”) multiplied by the quotient obtained by dividing the result of the Fair Market Value of one Share, as at the date of exercise (“ B ”) less the Exercise Price per Share (“ A ”) by the Fair Market Value of one Share as determined as at the date of exercise (“ B ”). Expressed as a formula, such number of Shares shall be computed as follows:

==> picture [78 x 22] intentionally omitted <==

No fractional Shares shall be issuable upon the net settlement of options, such Shares to be rounded down to the nearest whole number. Upon the occurrence of the foregoing, the number of Shares underlying the Options disposed of shall be deducted from the number of Shares reserved for issuance under the Plan.

5.3 Blackout Period

No Option shall be exercised pursuant to this Article 5 during a Blackout Period.

ARTICLE 6 TERMINATION OF EMPLOYMENT

6.1 No Right to Exercise After Termination

Subject to Sections 6.2, 6.3 and 6.4 hereof, or to any express resolution or other determination by the Board with respect to an Option or the terms of any Notice of Grant of Options, an Option, and all rights to purchase Shares pursuant thereto, shall expire and terminate immediately upon the Optionee ceasing to actively provide services to the Company in his or her capacity as a director, an officer, employee or Consultant of the Company, as the case may be.

6.2 Termination Other than for Retirement, Long-Term Disability, Death or Just Cause

Subject to any express resolution or other determination by the Board with respect to an Option or the terms of any Notice of Grant of Options, if, before the Expiry Date of an Option, the employment of the Optionee by the Company is terminated by either party for any reason whatsoever, other than death, Retirement, Long-Term Disability or termination for cause, such Option may, subject to the terms thereof (including the vesting provisions thereof) and any other terms of the Plan, be exercised by the Optionee, at any time within 60 days of the termination of such Optionee’s active employment or other service with the Company, but in any case prior to the Expiry Date of the Option in accordance with the terms thereof and only to the extent the Optionee was entitled to exercise the Option on the date of termination. For greater certainty, the termination of active employment shall be

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the last day an Eligible Person provides actual service to the Company pursuant to a written notice of termination and does not include any subsequent common law or contractual notice period.

6.3 Termination Due to Retirement or Long-Term Disability

If, before the Expiry Date of an Option in accordance with the terms thereof, the employment of the Optionee by the Company is terminated by reason of Retirement or as a result of Long-Term Disability, unless the Board determines otherwise, all Options held by such Optionee which have vested in accordance with their terms may be exercised at any time within one year following the date of Retirement or termination of the Optionee as a result of a Long-Term Disability or prior to the Expiry Date, whichever is earlier. Options held by an Optionee whose employment has been terminated by reason of Retirement or as a result of Long-Term Disability shall continue to vest in accordance with their terms until the earlier of the date which is one year following the date of Retirement or termination of the Optionee as a result of Long-Term Disability and the Expiry Date.

6.4 Death of the Optionee

If, before the Expiry Date of an Option in accordance with the terms thereof, the employment of the Optionee by the Company is terminated by reason of death, unless the Board determines otherwise, all outstanding Options held by such Optionee shall become fully vested and may be exercised by the legal personal representative(s) of the estate of the Optionee (including such part, if any, thereof which, but for this Section 6.4, would not otherwise be able to be exercised) at any time within one year following the date of death of the Optionee or prior to the Expiry Date, whichever is earlier, and only to the extent the Option was entitled to exercise the Option on the date of death.

6.5

No Right of Transfer

Subject to Section 6.4 in the case of the death of an Optionee, an Option granted to an Optionee, and the right to receive Shares pursuant thereto, is personal to such Optionee. Except as otherwise provided in this Plan, no assignment, sale, transfer, pledge or charge of an Option, whether voluntary, involuntary, by operation of law or otherwise, vests any interest or right in such Option whatsoever in any assignee or transferee and, immediately upon any assignment, sale, transfer, pledge or charge or attempt to assign, sell, transfer, pledge or charge, such Option shall terminate and be of no further force or effect.

6.6

Transfer Not Termination for Plan Purposes

A transfer of employment or services between the Company and a subsidiary or affiliate of the Company or between subsidiaries or affiliates of the Company shall not be considered an interruption or termination of the employment or services of an Optionee by the Company for any purpose of the Plan, and Options shall not be affected by any such transfer of employment or services.

6.7 Change in Employment

Options shall not be affected by any change of employment of the Optionee or by the Optionee ceasing to be a director, an officer or Consultant of the Company where the Optionee at the same time continues to be an Eligible Person.

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ARTICLE 7 BUSINESS COMBINATIONS AND CERTAIN ADJUSTMENTS

7.1 Business Combinations

Subject to Section 7.3, if, during the term of an outstanding Option, the Company completes any transaction which results in a Change of Control (referred to as a “ Transaction ”) all unvested Options shall vest immediately prior to such completion. In the event of a Transaction where outstanding Options are assumed, substituted or continued by the Company’s successor, if within 90 days or such other period of time that the Board determines following the date of the completion of the Transaction an event or events that would constitute a “constructive dismissal” (as such term is defined pursuant to the common law) occur with respect to an Optionee, and within 90 days or such other period of time that the Board determines following the date of such “constructive dismissal” such Optionee’s employment with the Company is terminated (whether at the discretion of the Optionee or otherwise), each Option then held by the Optionee shall remain exercisable for a period of 90 days or such other period of time that the Board determines from the date of such termination of employment, but not later than the end of the Expiry Date, and thereafter any such Option shall expire.

Notwithstanding the foregoing, with respect to any performance-based Options granted under the Plan, vesting of an Option shall be dependent on achievement of the applicable performance criteria as of the date of the completion of the Transaction and/or be prorated to the date of the completion of the Transaction, as applicable.

7.2

Adjustments

Appropriate adjustments as regards Options granted or to be granted, in the number of Shares optioned and in the Exercise Price, shall be made by the Board to give effect to adjustments in the number of Shares resulting from subdivisions, consolidations or reclassifications of the Shares, or other relevant changes in the Company. The appropriate adjustment in any particular circumstance shall be conclusively determined by the Board in its sole discretion, subject to approval by the shareholders and to acceptance by the Exchange, respectively, if applicable.

7.3 No Limitation on Ability to Accelerate

Nothing in this Article 7 shall in any way affect or derogate from the ability of the Board to accelerate the vesting of Options at any time in its sole discretion as provided for in Section 2.1(e).

7.4

Other Adjustments

If at any time after the grant of an Option to any Optionee and prior to the Expiry Date of such Option, the Shares shall be reclassified, reorganized or otherwise changed, otherwise than as specified in Section 7.2 or, subject to the provisions of Section 7.1 hereof, the Company shall consolidate, merge or amalgamate with or into another corporation (the corporation resulting or continuing from such consolidation, merger or amalgamation being herein called the “ Successor Corporation ”) the Optionee shall be entitled to receive upon the subsequent exercise of his, her or its Option in accordance with the terms hereof and shall accept in lieu of the number of Shares to which he, she or it was theretofore entitled upon such exercise but for the same aggregate consideration payable therefor, the aggregate number of shares of the appropriate class and/or other securities of the Company or the Successor Corporation (as the case may be) and/or other consideration from the Company or the Successor Corporation (as the case may be) that the Optionee would have been entitled to receive as a result of such reclassification, reorganization or other change or, subject to the provisions of Section 7.1 hereof, as a result of such consolidation, merger or amalgamation, if on the record date of such reclassification, reorganization or other change or the effective date of such

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consolidation, merger or amalgamation, as the case may be, he or she had been the registered holder of the number of Shares to which he or she was theretofore entitled upon such exercise.

ARTICLE 8 AMENDMENT OR TERMINATION OF THE PLAN

8.1 Amendment and Termination of the Plan

Subject to Sections 8.2, 8.3 and 8.4, the Board may, at any time and from time to time, without the approval of the holders of Shares or any other voting securities of the Company, suspend, discontinue or amend the Plan or an Option. Without limiting the generality of the foregoing, but subject to Sections 8.2, 8.3 and 8.4, the Board may:

• (a) make any amendment of a typographical, grammatical, clerical or administrative nature or clarification correcting or rectifying any ambiguity, immaterial inconsistency, defective provision, mistake, or error or omission in this Plan or any Option;

• (b) make any addition to, deletion from or alteration of the provisions of this Plan or any Option that are necessary to comply with applicable law or the requirements of any regulatory or governmental agency or applicable stock exchange and to avoid unanticipated consequences deemed by the Board to be inconsistent with the purpose of this Plan; or

• (c) make any amendments to clarify existing provisions of this Plan or any Option provided that such changes do not have the effect of altering the scope, nature and intent of this Plan or any Option.

8.2 Amendments Requiring Shareholder Approval

To the extent required by the Stock Exchange Rules, notwithstanding Section 8.1, the Board may not, without the approval of the holders of a majority of Shares and other voting securities of the Company present and voting in person or by proxy at a meeting of shareholders of the Company (“ Shareholder Approval ”), amend the Plan or an Option to:

• (a)

• increase the maximum number of Shares issuable pursuant to the Plan;

• (b) make any amendment that would reduce the Exercise Price of an outstanding Option (including a cancellation and reissue of an Option that constitutes a reduction of the Exercise Price);

• (c) extend the Expiry Date of any Option granted under the Plan beyond the Expiry Date of the Option determined at the date of grant in accordance with the Plan, except as provided for in Section 4.1 with respect to an Expiry Date that occurs during a Blackout Period; provided, that for U.S. Optionees, the Board may not, with or without Shareholder Approval, extend the Expiry Date of any Option granted under the Plan beyond the Expiry Date of the Option determined at the date of grant in accordance with the Plan;

• (d) expanding the categories of individuals contained in the definition of “Eligible Person” who are eligible to participate in the Plan; or

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• (e) amend the Plan to permit the transfer or assignment of Options, except to permit a transfer to a family member, an entity controlled by the holder of the Options or a family member, a charity or for estate planning or estate settlement purposes

unless the change to the Plan or an Option results from the application of Article 7. In addition, for U.S. Optionees, to the extent determined by the Plan Administrator to be required by the U.S. Code to ensure that ISOs granted under the Plan are qualified under Section 422 of the U.S. Code, Plan amendments shall be subject to Shareholder Approval.

8.3

No Adverse Effect

Unless an Optionee otherwise agrees, the Board may not suspend, discontinue or amend the Plan or amend any outstanding Option in a manner that would materially and adversely alter or impair any Option previously granted to an Optionee under the Plan, and any such suspension, discontinuance or amendment of the Plan or amendment to an Option shall apply only in respect of Options granted on or after the date of such suspension, discontinuance or amendment. No suspension, discontinuance or amendment of the Plan or amendment of an Option may contravene the requirements of the Exchange or any securities commission or regulatory body to which the Plan, the Option or the Company is now or may hereafter be subject.

8.4 No Amendment to Article 8

The Board may not amend any provision of this Article 8 without the approval of the holders of a majority of Shares and other voting securities of the Company present and voting in person or by proxy at a meeting of Shareholders.

ARTICLE 9 ACCOUNTS, NOTICES AND MISCELLANEOUS PROVISIONS

9.1 Accounts and Statements

The Plan Administrator (or if none is appointed, the Company) shall maintain records of the details of each Option granted to each Optionee under the Plan. Upon request therefor from an Optionee and at such other times as the Company shall determine, the Plan Administrator (or if none is appointed, the Company) shall furnish the Optionee with a statement setting forth details of his, her or its Options. Such statement shall be deemed to have been accepted by the Optionee as correct unless written notice to the contrary is given to the Plan Administrator (or if none is appointed, the Company) within 10 days after such statement is given to the Optionee.

9.2

Notices

Any payment, notice, statement, certificate or other instrument required or permitted to be given to an Optionee or any person claiming or deriving any rights through him shall be given by:

• (a) delivering it personally to the Optionee or the person claiming or deriving rights to the Optionee, as the case may be;

• (b) mailing it, postage paid (provided that the postal service is then in operation) or delivering it to the address which is maintained for the Optionee in the Company’s personnel records; or

• (c) facsimile, e-mail or other similar means of electronic communication.

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9.3 Address

Any payment, notice, statement, certificate or instrument required or permitted to be given to the Plan Administrator or the Company, as the case may be, shall be given by mailing it, postage prepaid (provided that the postal service is then in operation) or delivering it to the Plan Administrator or the Company, as the case may be, at the following address:

Eupraxia Pharmaceuticals Inc. 201 – 2067 Cadboro Bay Road Victoria, BC V8R 5G4

Attention: Chief Financial Officer Facsimile: 250-590-2588

9.4 Date of Delivery

Any payment, notice, statement, certificate or instrument referred to in Sections 9.2 or 9.3, if delivered, shall be deemed to have been given or delivered, on the date on which it was delivered; if faxed, e-mailed or sent by other means of recorded electronic communication, shall be deemed to have been given or delivered, on the date of faxing, e-mailing or sending by other means of electronic communication, provided that such date is a business day and the communication is so faxed, e-mailed or sent before 4:30 p.m. on such date at the place of receipt, otherwise, such communication shall be deemed to have been given and delivered on the next following business day; or, if mailed (provided that the postal service is then in operation), shall be deemed to have been given or delivered on the second business day following the date on which it was mailed.

9.5 Shareholder and Regulatory Approval

The Plan (and any amendments thereto as required under Article 8) shall be subject to such future approvals of the shareholders of the Company and any stock exchange upon which the Shares trade from time to time as may be required under the terms of the Plan or such stock exchange from time to time. Any Options granted on terms requiring such approval shall be conditional upon such approval being given and no such Options may be exercised until such approval is given.

9.6 Withholding Taxes

Notwithstanding anything else in this Plan, the Company may take such steps as are considered necessary or appropriate for the withholding of any taxes which the Company is required by any law or regulation of any governmental authority whatsoever to withhold in connection with any Share including, without limiting the generality of the foregoing, the withholding of all or any portion of any payment or the withholding of the issue of Shares to be issued under the Plan, until such time as the Eligible Person has paid the Company for any amount which the Company is required to withhold with respect to such taxes or other amounts. Without limitation to the foregoing, the Board may adopt administrative rules under the Plan which provide for the sale of Shares (or a portion thereof) in the market upon the issuance of such Shares under the provisions of the Plan to satisfy withholding obligations under the Plan.

9.7 U.S. Tax Considerations

The terms of the Plan and Options granted hereunder to Eligible Persons subject to taxation under the U.S. Code (“ U.S. Optionees ”), shall be determined by taking into consideration Schedule C to the Plan setting forth special provisions applicable to such persons.

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9.8 No Right of Ownership

Any holder of an Option shall not possess any rights of ownership as a shareholder of the Company with respect to any of the Shares covered by such Option including, for greater certainty and without limitation, the right to receive dividends on such Shares and the right to exercise voting rights in respect of such Shares, until such holder shall have exercised such Option in accordance with the terms of the Plan and the issuance of the Shares by the Company.

9.9 No Right of Continued Employment or Service

Nothing in the Plan, any Notice of Grant of Options or any Option shall confer upon any Optionee any right to continue in the employ or service of the Company or any of its subsidiaries or affect in any way the right of the Company or any of its subsidiaries to terminate his or her employment or service at any time; nor shall anything in the Plan or any Option be deemed or construed to constitute an agreement, or any expression of intent, on the part of the Company or any of its subsidiaries to extend the employment or service of any Optionee beyond the time that he or she would normally be retired pursuant to the provisions of any present or future retirement plan of the Company or any of its subsidiaries, or any present or future retirement policy of the Company or any of its subsidiaries, or beyond the time at which he or she would otherwise be retired pursuant to the provisions of any contract of employment or other service relationship of the Company or any of its subsidiaries.

9.10 Expenses

All expenses in connection with the Plan shall be borne by the Company.

9.11 Governing Law

This Plan shall be governed by, construed and interpreted in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein.

9.12 Severability

If any provision of the Plan or part hereof is determined to be void or unenforceable in whole or in part, such determination shall not affect the validity or enforcement of any other provision or part thereof.

SCHEDULE “A”

NOTICE OF GRANT OF STOCK OPTIONS

TO: [●] (the “ Optionee ”) FROM: [●] (the “ Company ”) DATE: [●]

The Company hereby notifies the Optionee as follows:

1. The Company hereby grants to the Optionee, subject to the terms and conditions set forth in this Notice and the stock option plan of the Company (the “ Plan ”), the right to purchase the following number of common shares in the capital of the Company (the “ Shares ”) at the following exercise price on or after the following vesting date(s) and prior to the close of business on the following expiry date:

#of Shares	Exercise Price	Vesting Date(s)	Expiry Date
[●]	$[●]	[●]	[●]

1. On the close of business on the expiry date set forth in Paragraph 1 above, the stock option granted hereby shall expire and automatically terminate and be of no further force and effect.

2. The Optionee acknowledges receipt of a copy of the Plan and hereby agrees that the terms and conditions of the Plan shall govern the stock option granted hereby, including all amendments or adjustments pursuant to the Plan or otherwise consented to by the Optionee.

3. All stock options granted pursuant to the Plan and reflected in this Notice shall be personal to the Optionee and shall not be assignable or otherwise transferable except by will or the laws of descent and distribution.

EUPRAXIA PHARMACEUTICALS INC.

By: Title:

SCHEDULE “B”

STOCK OPTION PLAN NOTICE OF NET SETTLEMENT

TO: The Plan Administrator, Stock Option Plan

The undersigned hereby requests, pursuant to the Eupraxia Pharmaceutical Inc. (the “ Company ”) stock option plan (the “ Plan ”), the Company accept the transfer, disposition and surrender to the Company of the right to exercise __ Options in exchange for, subject to the terms of the Plan and the Options, the number of Shares representing the fair market value of the Options disposed of and transferred to the Company pursuant to the net settlement provisions set out in section 5.2 of the Plan (the “ Net Settlement Provisions ”).

The undersigned, subject to the terms of the Plan and the Options, is requesting to receive the fair market value of the Options in Shares pursuant to the Net Settlement Provisions.

The undersigned directs the Company to issue the certificate evidencing said Shares in the name of the undersigned to be mailed to the undersigned at the following address:

---

---

---

By executing this Notice of Net Settlement, the undersigned hereby confirms that the undersigned has read the Plan and agrees to be bound by the provisions of the Plan. All terms not otherwise defined in this Notice of Net Settlement will have the meanings given to them under the Plan.

DATED the _ day of _, 20.

Signature of Witness Signature of Participant Name of Witness ( please print ) Name of Participant ( please print )

SCHEDULE “C”

Special Provisions Applicable to Optionees Subject to taxation under the United States Internal Revenue Code

This special appendix sets forth special provisions of the Plan that apply to Optionees subject to taxation under the United States Internal Revenue Code of 1986, as amended.

1. Definitions

For purposes of this Schedule “C”:

• 1.1 “ Code ” means the United States Internal Revenue Code of 1986, as amended.

• 1.2 “ Section 409A ” means Section 409A of the Code and any applicable regulatory guidance issued thereunder.

• 1.3 “ US Optionee ” means an Optionee whose compensation from the Company or its subsidiaries is subject to taxation under the Code.

2.

Compliance with Section 409A

• 2.1 In General. Notwithstanding any provision of the Plan to the contrary, it is intended that with respect to any US Optionee, such US Optionee’s participation in the Plan shall be exempt from Section 409A and in a manner which does not subject the US Optionee’s interests in the Plan to accelerated or additional tax under Section 409A (and all provisions of the Plan shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A). If any grant to a US Optionee or exercise, dividend or distribution hereunder could cause the application of accelerated or additional tax under Section 409A, such grant, exercise, dividend or distribution shall be deferred if and to the extent deferral will make such grant, exercise, dividend or distribution compliant with Section 409A; otherwise such grant, exercise, dividend or distribution shall be restructured, to the extent possible, in a manner determined by the Board that does not cause such an accelerated or additional tax. Each US Optionee is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or for the account of such US Optionee in connection with the Plan (including any taxes and penalties under Section 409A), and neither the Company nor any of its affiliates shall have any obligation to indemnify or otherwise hold such US Optionee (or any beneficiary) harmless from, nor does the Company nor any of its affiliates otherwise make any representation or guarantee with respect to treatment or consequences resulting from, any or all of such taxes or penalties.

• 2.2 Modification of Options. Notwithstanding any provision of the Plan to the contrary and with respect to any US Optionee, no Option may exercised following the 10[th] anniversary of the date of grant or original Expiry Date, if shorter.

• 2.3 Exercise Price: Notwithstanding any other provision of the Plan, so long as at the time of the grant of an Option the Shares are “readily tradable” as determined under United States Treasury Regulation Section 1.409A-1(b)(5)(vi)(G), the Exercise Price shall be the closing sale price of the Shares reported on the primary securities exchange on which the Shares are listed on the last business day on which such exchange is open for trading prior to the date of grant of such Option, and if at the time of grant the Shares are not “readily tradable” as

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determined under United States Treasury Regulation Section 1.409A-1(b)(5)(vi)(G), the Exercise Price shall be determined by the reasonable application of a reasonable valuation method in accordance with Treasury Regulation Section 1.409A-1(b)(5)(iv)(B).

3. Adjustments to Options.

• 3.1 Notwithstanding the Plan or any provision of the Notice of Grant of Options to the contrary, in connection with any adjustment to the Options, the number of Shares deliverable on the exercise of an Option held by a US Optionee and the Exercise Price of an Option held by a US Optionee shall be adjusted in a manner intended to keep the Options exempt from Section 409A.

4. Incentive Stock Options. Any Option granted under the Plan to a US Optionee may be an ISO within the meaning of Section 422 of the Code, but only if so designated by the Company in the agreement evidencing such Option. No provision of this Plan, as it may be applied to a US Optionee with respect to Options which are designated as ISOs, shall be construed so as to be inconsistent with any provision of Section 422 of the Code or the Treasury Regulations thereunder. Grants of Options to US Optionees which are not designated as or otherwise do not qualify as ISOs will be treated as nonstatutory stock options for U.S. federal tax purposes. Notwithstanding anything in this Plan contained to the contrary, the following provisions shall apply to ISOs granted to each US Optionee:

• 4.1 ISOs shall only be granted to individual US Optionees who are, at the time of grant, employees of the Company within the meaning of the Code;

• 4.2 The aggregate fair market value (determined as of the time an ISO is granted) of the Shares subject to ISOs exercisable for the first time by a US Optionee during any calendar year under this Plan and all other stock option plans, within the meaning of Section 422 of the Code, of the Company shall not exceed One Hundred Thousand Dollars in U.S. funds (U.S.$100,000);

• 4.3 The Exercise Price for Shares under each ISO granted to a US Optionee pursuant to this Plan shall be not less than fair market value of such Shares at the time the Option is granted, as determined in good faith by the Board at such time (unless such ISO is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code);

• 4.4 If any US Optionee to whom an ISO is to be granted under the Plan at the time of the grant of such ISO is the owner of shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company, then the following special provisions shall be applicable to the ISO granted to such individual:

• (a) the Exercise Price (per Share) subject to such ISO shall not be less than one hundred ten percent (110%) of the fair market value of one Share at the time of grant; and

• (b) for the purposes of this section 4.4 only, the Exercise Period shall not exceed five (5) years from the date of grant;

• 4.5 No ISO may be granted hereunder to a US Optionee following the expiration of ten (10) years after the date on which this Plan is adopted by the Company or the date on which the Plan is approved by the shareholders of the Company, whichever is earlier;

• 4.6 No ISO granted to a US Optionee under the Plan shall become exercisable unless and until the Plan shall have been approved by the shareholders of the Company; and

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• 4.7 No more than 1,286,527 Shares may be issued in the form of ISOs.

5. Amendment of Appendix

• 5.1 The Board shall retain the power and authority to amend or modify this Schedule “C” to the extent the Board in its sole discretion deems necessary or advisable to comply with any guidance issued under Section 409A. Such amendments may be made without Shareholder Approval, unless the Board determines such Shareholder Approval is required pursuant to applicable laws or Stock Exchange Rules, or the approval of any individual Optionee.

SCHEDULE B

Advance Notice Policy

INTRODUCTION

The Company is committed to: (i) facilitating an orderly and efficient annual general or, where the need arises, special meeting, process; (ii) ensuring that all shareholders receive adequate notice of the director nominations and sufficient information with respect to all nominees; and (iii) allowing shareholders to register an informed vote.

The purpose of this Advance Notice Policy (the “ Policy ”) is to provide shareholders, directors and management of the Company with direction on the nomination of directors. This Policy is the framework by which the Company seeks to fix a deadline by which holders of record of common shares of the Company must submit director nominations to the Company prior to any annual or special meeting of shareholders and sets forth the information that a shareholder must include in the notice to the Company for the notice to be in proper written form in order for any director nominee to be eligible for election at any annual or special meeting of shareholders.

It is the position of the Company that this Policy is beneficial to shareholders and other stakeholders. This policy will be subject to an annual review and will reflect changes as required by securities regulatory agencies or stock exchanges, or so as to meet industry standards.

NOMINATIONS OF DIRECTORS

1. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Company. Nominations of persons for election to the board of director of the Company (the “ Board ”) may be made at any annual meeting of shareholders, or at any special meeting of shareholders if one of the purposes for which the special meeting was called was the election of directors:

2. a. by or at the direction of the Board, including pursuant to a notice of meeting;

3. b. by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the provisions of the Business Corporations Act (British Columbia) (the “ Act ”), or a requisition of the shareholders made in accordance with the provisions of the Act; or

4. c. by any person (a “ Nominating Shareholder ”): (A) who, at the close of business on the Notice Date (as defined below) and on the record date for notice at such meeting, is entered in the securities register as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting; and (B) who complies with the notice procedures set forth below in this Policy.

5. In addition to any other requirements under applicable laws, for a nomination to be made by a Nominating Shareholder, the Nominating Shareholder must have given timely notice thereof in proper written form to the Corporate Secretary of the Company at the principal executive offices of the Company in accordance with the provisions of this Policy.

6. To be timely, a Nominating Shareholder’s notice to the Corporate Secretary of the Company must be made:

7. a. in the case of an annual meeting of shareholders, not less than 30 days prior to the date of the annual meeting of shareholders; provided, however, that in the event that the annual meeting of shareholders is to be held on a date that is less than 50 days after the date (the “ Notice Date ”) on which the first public announcement (as defined below) of the date of the annual meeting was made, notice by the Nominating Shareholder may be made not later than the close of business on the tenth (10th) day following the later of: (i) the date of the public announcement (as defined below) of this Policy; and (ii) the Notice Date in respect of such meeting; or

8. b. in the case of a special meeting (which is not also an annual meeting) of shareholders called for the purpose of electing directors (whether or not called for other purposes), not later than the close of business on the fifteenth (15th) day following the day on which the first public announcement (as defined below) of the date of the special meeting of shareholders was made;

provided that, in either instance, if notice-and-access (as defined in National Instrument 54-101 – Communication with Beneficial Owners of Securities of a Reporting Issuer ) is used for delivery of proxy related materials in respect of a meeting described in subsections 3(a) or 3(b), and the Notice Date in respect of the meeting is not less than 50 days before the date of the applicable meeting, the notice must be received not later than the close of business on the 40[th] day before the date of the applicable meeting.

1. To be in proper written form, a Nominating Shareholder’s notice to the Corporate Secretary of the Company must set forth:

2. a. as to each person whom the Nominating Shareholder proposes to nominate for election as a director (a “ Proposed Nominee ”):

3. i. the name, province or state and country of residence of the Proposed Nominee;

4. ii. the principal occupation, business or employment of the Proposed Nominee, both at present and in the five years preceding the notice;

5. iii. the number of securities of each class of voting securities of the Company or any of its subsidiaries beneficially owned, or controlled or directed, directly or indirectly, by the Proposed Nominee as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice;

6. iv. any other information relating to the Proposed Nominee that would be required to be disclosed in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws (as defined below); and

7. v. a written consent of each Proposed Nominee to being named as nominee and certifying that such Proposed Nominee is not disqualified from acting as director under the provisions of subsection 124(2) of the Act.

8. b. as to the Nominating Shareholder giving the notice, and each beneficial owner, if any, on whose behalf the nomination is made:

9. i. their name and record address;

10. ii. the number of securities of the Company or any of its subsidiaries beneficially owned, or controlled or directed, directly or indirectly, by the Nominating Shareholder or any other person with whom the Nominating Shareholder is acting jointly or in concert with respect to the Company or any of its securities, as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice;

11. iii. any relationships, agreements or arrangements, including financial, compensation and indemnity related relationships, agreements or arrangements, between the Nominating Shareholder or any affiliates or associates of, or any person or entity acting jointly or in concert with, the Nominating Shareholder and any Proposed Nominee;

12. iv. full particulars of any proxy, contract, arrangement, understanding or relationship pursuant to which such person, or any of its affiliates or associates, or any person acting jointly or in concert with such person, has a right to vote any shares of the Company; and

13. v. any other information relating to such person that would be required to be made in a dissident’s proxy circular or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws (as defined below).

The Company may require any proposed nominee to furnish such other information as may be required by the Act and Applicable Securities Laws to determine the eligibility of such proposed nominee to serve as an independent director of the Company.

1. No person shall be eligible for election as a director of the Company unless nominated in accordance with the provisions of this Policy; provided, however, that nothing in this Policy shall be deemed to preclude discussion by a shareholder (as distinct from the nomination of directors) at a meeting of shareholders of any matter in respect of which it would have been entitled to submit a proposal pursuant to the provisions of the Act. The Chairman of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures set forth in the foregoing provisions and, if any proposed nomination is not in compliance with such foregoing provisions, to declare that such defective nomination shall be disregarded.

2. For purposes of this Policy:

3. a. “ public announcement ” shall mean disclosure in a press release reported by a national news service in Canada, or in a document publicly filed by the Company under its profile on the System of Electronic Document Analysis and Retrieval at www.sedar.com; and

4. b. “ Applicable Securities Laws ” means the applicable securities legislation of each relevant province and territory of Canada, as amended from time to time, the rules, regulations and forms made or promulgated under any such statute and the published national instruments, multilateral instruments, policies, bulletins and notices of the securities commission and similar regulatory authority of each province and territory of Canada.

5. Notwithstanding any other provision of this Policy, notice given to the Corporate Secretary of the Company pursuant to this Policy may only be given by personal delivery, facsimile transmission or by email (at such email address as stipulated from time to time by the Corporate Secretary of the Company for purposes of this notice), and shall be deemed to have been given and made only at the time it is served by personal delivery, email (at the address as aforesaid) or sent by facsimile

transmission (provided that receipt of confirmation of such transmission has been received) to the Corporate Secretary at the address of the principal executive offices of the Company; provided that if such delivery or electronic communication is made on a day which is a not a business day or later than 5:00 p.m. (Vancouver time) on a day which is a business day, then such delivery or electronic communication shall be deemed to have been made on the subsequent day that is a business day.

1. Notwithstanding the foregoing, the Board may, in its sole discretion, waive any requirement in this Policy.

CURRENCY

This Policy was approved by the Board on October 27, 2021.

SCHEDULE C

Audit Committee Charter

(See attached)

AUDIT COMMITTEE CHARTER

PURPOSE

The primary function of the Audit Committee is to assist the board of directors (the “ Board ”) of Eupraxia Pharmaceuticals Inc. (the “ Company ”) in fulfilling its oversight responsibilities by reviewing the financial information to be provided to the shareholders and others, the systems of internal controls and management information systems established by the senior officers of the Company (“ Management ”) and the Company’s internal and external audit process and monitoring compliance with the Company’s legal and regulatory requirements with respect to its financial statements.

The Audit Committee is accountable to the Board. In the course of fulfilling its specific responsibilities hereunder, the Audit Committee is expected to maintain an open communication between the Company’s external auditors and the Board.

The Audit Committee does not plan or perform audits or warrant the accuracy or completeness of the Company’s financial statements or financial disclosure or compliance with generally accepted accounting procedures as these are the responsibility of Management.

RESPONSIBILITIES

Subject to the powers and duties of the Board, the Board hereby delegates to the Audit Committee the following powers and duties to be performed by the Audit Committee on behalf of and for the Board. Nothing in this Charter is intended to or does confer on any member a higher standard of care or diligence than that which applies to the directors as a whole.

External Auditors

The Audit Committee has primary responsibility for the selection, appointment, dismissal, compensation and oversight of the external auditors, subject to the overall approval of the Board. For this purpose, the Audit Committee may consult with Management.

The external auditors shall report directly to the Audit Committee.

In addition, the Audit Committee:

• a. recommends to the Board:

• i. whether the current external auditors should be nominated for reappointment for the ensuing year and if applicable, select and recommend a suitable alternative for nomination; and

• ii. the amount of compensation payable to the external auditors;

• b. resolves disagreements, if any, between Management and the external auditors regarding financial reporting;

• c. provides the Board with such recommendations and reports with respect to the financial statements of the Company as it deems advisable;

• d. takes reasonable steps to confirm the independence of the external auditors, including but not limited to pre-approving any non-audit related services provided by the external auditors to the Company or the Company’s subsidiaries, if any;

• e. confirms that the external auditors are a “participating audit” firm for the purpose of National Instrument 52-108 – Auditor Oversight and are in compliance with governing regulations;

• f. reviews the plan and scope of the audit to be conducted by the external auditors of the Company;

• g. reviews and evaluates the performance of the external auditors; and

• h. reviews and approves the Company’s hiring policy regarding partners, employees and former partners and employees of the Company’s present and former external auditors.

Audit and Review Process and Results

The Audit Committee has a duty to receive, review and make any inquiry regarding the completeness, accuracy and presentation of the Company’s financial statements to ensure that the financial statements fairly present the financial position and risks of the organization and that they are prepared in accordance with generally accepted accounting principles. To accomplish this, the Audit Committee:

• a. considers the scope and general extent of the external auditors’ review, including their engagement letter and major changes to the Company’s auditing and accounting principles and practices;

• b. consults with management regarding the sufficiency of the Company’s internal system of audit and financial controls, internal audit procedures and results of such audits;

• c. ensures the external auditors have full, unrestricted access to required information and have the cooperation of management;

• d. reviews with the external auditors the audit process and standards, as well as regulatory or Company-initiated changes in accounting practices and policies and the financial impact thereof, and selection or application of appropriate accounting principles;

• e. reviews with the external auditors and, if necessary, legal counsel, any litigation, claim or contingency, including tax assessments, that could have a material effect upon the financial position of the Company and the manner in which these matters are being disclosed in the financial statements;

• f. reviews the appropriateness and disclosure of any off-balance sheet matters;

• g. reviews disclosure of related-party transactions;

• h. receives and reviews with the external auditors, the external auditors’ audit report and the audited financial statements;

• i. makes recommendations to the Board respecting approval of the audited financial statements;

• j. meets with the external auditors separately from management to review the integrity of the Company’s financial reporting, including the clarity of financial disclosure and the degree of conservatism or aggressiveness of the accounting policies and estimates, any significant disagreements or difficulties in obtaining information, adequacy of internal controls over financial reporting, adequacy of disclosure controls and procedures, and the degree of compliance by the Company with prior recommendations of the external auditors;

• k. directs management to implement such changes as the Audit Committee considers appropriate, subject to any required approvals of the Board arising out of the review; and

• l. meets at least annually with the external auditors, independent of management, and reports to the Board on such meetings.

Interim Financial Statements

The Audit Committee:

• a. reviews and determines the Company’s practice with respect to review of interim financial statements by the external auditors;

• b. conducts all such reviews and discussions with the external auditors and Management as it deems appropriate; and

• c. makes recommendations to the Board respecting approval of the interim financial statements.

Involvement with Management

The Audit Committee has primary responsibility for overseeing the actions of management in all aspects of financial management and reporting. The Audit Committee:

• a. reviews the Company’s annual and interim financial statements, Management’s Discussion and Analysis and earnings press releases, if any, before the Company publicly discloses this information;

• b. reviews all of the Company’s public disclosure of financial information extracted from the Company’s financial statements, if such financial statements have not previously been reviewed by the Committee, prior to such information being made public by the Company and for such purpose, the CFO assumes responsibility for providing the information to the Audit Committee for its review; reviews material financial risks with Management, the plan that Management has implemented to monitor and deal with such risks and the success of Management in following the plan;

• c. consults annually and otherwise as required with the Company’s CEO and CFO respecting the adequacy of the internal controls over financial reporting and disclosure controls and procedures and reviews any breaches or deficiencies;

• d. obtains such certifications of annual and interim filings by the CEO and CFO attesting to internal controls over financial reporting and disclosure controls and procedures as deemed advisable;

• e. reviews Management’s response to significant written reports and recommendations issued by the external auditors and the extent to which such recommendations have been implemented by Management;

• f. reviews with Management the Company’s compliance with applicable laws and regulations respecting financial reporting matters, and any proposed regulatory changes and their impact on the Company; and

• g. reviews as required with Management and approves disclosure of the Audit Committee Charter, and Audit Committee disclosure required in the Company’s Annual Information Form, Information Circular and on the Company’s website.

PROCEDURAL MATTERS

The Audit Committee:

• a. invites the Company’s external auditors, the CFO, and such other persons as deemed appropriate by the Audit Committee to attend meetings of the Audit Committee;

• b. reports material decisions and actions of the Audit Committee to the Board, together with such recommendations as the Audit Committee may deem appropriate;

• c. has the power to conduct or authorize investigations into any matter within the scope of its responsibilities;

• d. has the right to engage independent counsel and other advisors as it determines necessary to carry out its duties and the right to set the compensation for any advisors employed by the Audit Committee;

• e. has the right to communicate directly with the CFO and other members of Management who have responsibility for the internal and external audit process, as well as to communicate directly with the internal and external auditors; and

• f. pre-approves non-audit services to be performed by the external auditors in accordance with the provisions of National Instrument 52-110 – Audit Committees (“ NI 52-110 ”).

COMPOSITION

The Audit Committee is composed of a minimum of three directors, all of whom are independent, subject to any exemptions or relief that may be granted from such requirements under NI 52-110, and have relevant skills and/or experience in the Audit Committee’s areas of responsibility as may be required by the securities laws applicable to the Company, including those of any stock exchange on which the Company’s securities are traded. No member shall have served as the CEO of the Company, or an affiliate, within the past five years, or as the CFO of the Company, or an affiliate, within the past three years.

The members of the Audit Committee shall not be members of more than three public company audit committees (including the Company), except for a member with demonstrable financial expertise such as a former CFO, who shall not be a member of more than four audit committees (including the Company).

Appointment of Committee Members and Vacancies

Members of the Audit Committee are appointed or confirmed by the Board annually and hold office at the pleasure of the Board. The Board fills any vacancy on, and may appoint any additional members to, the Audit Committee.

Committee Chair

The Board appoints a Chair for the Audit Committee.

STRUCTURE AND OPERATIONS

Meetings

The Chair of the Audit Committee or the Chair of the Board or any two of its members may call a meeting of the Audit Committee. The Audit Committee must meet at least four times each fiscal year, and at such other times during each year as it deems appropriate.

Quorum

A majority of the members appointed to the Audit Committee constitutes a quorum.

Notice of Meetings

The Chair of the Audit Committee arranges to provide notice of the time and place of every meeting in writing (including by electronic means) to each member of the Audit Committee at least two (2) business days prior to the time fixed for such meeting, provided, however, that a member may in any manner waive a notice of a meeting. Attendance of a member at a meeting constitutes a waiver of notice of the meeting, except where a member attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called. The Chair also ensures that an agenda for the meeting and all required materials for review by the members of the Audit Committee are delivered to the members with sufficient time for their review, or that such requirement is waived.

Absence of Committee Chair

If the Chair of the Audit Committee is not present at any meeting of the Audit Committee, the other members of the Audit Committee will choose a Chair to preside at the meeting.

Secretary of Committee

At each meeting the Audit Committee appoints a secretary who need not be a director of the Company.

Attendance of the Company’s Officers at Meetings

The Chair of the Audit Committee or any two members of the Audit Committee may invite one or more officers of the Company to attend any meeting of the Audit Committee.

Delegation

The Audit Committee may, in its discretion and where permitted by NI 52-110, delegate all or a portion of its duties and responsibilities to a subcommittee, management or, to the extent otherwise permitted by applicable plans, laws or regulations, to any other body or individual.

Procedure and Records

Subject to any statute or constating documents of the Company, the Audit Committee determines its own procedures at meetings and may conduct meetings by telephone and keeps records of its proceedings.

REPORTING AND ASSESSMENT

The Audit Committee reports to the Board of Directors, and on an annual basis, presents to the Board a Committee Annual Report consisting of the Audit Committee’s review of its charter, the Committee’s and

its Chair’s performance over the past year, and any recommendations the Audit Committee makes in respect thereto.

EFFECTIVE DATE

This Charter was approved by the Board on March 2, 2021.

SCHEDULE D

Virtual Meeting Guide

(See attached)

VIRTUAL MEETING GUIDE

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EUPRAXIA PHARMACEUTICALS INC.

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DECEMBER 3, 2021

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10:00AM PT

This year we will be conducting a virtual shareholders’ meeting, giving you the opportunity to attend the meeting online, using your smartphone, tablet or computer.

You will be able to view a live webcast of the meeting, ask the board questions and submit your votes in real time.

Appointing someone to be your proxyholder

If you appoint someone to be your proxy, other than the individual(s) named on the form of proxy or voting instruction form, you or your proxy will need to complete and return the Request For Control Number Form (see link below).

Attending the Shareholder Meeting Electronically

Simply go to the following website in your web browser (not a Google search) on your smartphone, tablet or computer. You will need the latest versions of Chrome, Safari, Edge or Firefox. Please ensure your browser is compatible by logging in early. PLEASE DO NOT USE INTERNET EXPLORER

https://virtual-meetings.tsxtrust.com/1223

I am a Guest

I have a control number

If you have received a form of proxy from our transfer agent, TSX Trust Company, with a control number, select “I have a control number” and enter your control number and this case sensitive password:

If you do not have a control number select “I am a Guest” and fill in the required information.

eupraxia2021

Non-Registered Holders

Non-registered holders, holding shares through a broker or financial institution, should carefully follow the instructions set out on the voting instruction form and in the information circular. Please note that only registered shareholders and proxy holders are permitted to vote at the meeting. A non-registered shareholder wishing to vote at the meeting, must appoint themselves as a proxyholder, and also complete and return the form found at the link below.

DOWNLOAD REQUEST FOR CONTROL NUMBER FORM tsxtrust.com/resource/en/75

Please login at least 15 minutes before the start of the meeting and ensure your web browser and internet connection are working properly.

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tsxtrust.com

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Navigation

When successfully authenticated, the info screen will be displayed. You can view the company information, ask questions and watch the webcast.

If you would like to watch the webcast press the play icon.

If viewing on a computer, the webcast will appear automatically once the meeting has started.

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Voting

Once the voting is announced, click the voting icon on the left hand side.

To vote, simply select your voting direction from the options shown on screen and click Submit . A confirmation message will appear to show your vote has been received.

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If you have additional control numbers to vote, click at the top to enter the additional credential.

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To change your vote, simply click

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Voting will remain open until the voting on the ballot is closed.

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Questions

Eligible shareholders attending the meeting may ask questions during the meeting.

Messages can be submitted at any time during the Q&A session up until the Chair closes the session.

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If you would like to ask a question, select the

icon on the left.

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Type your message within the chat box in the messaging screen.

Once you are happy with your message click the “ Ask Now ” button

Questions sent via TSX Trust Virtual Meeting platform will be moderated before being sent to the Chair.

tsxtrust.com