LE CHÂTEAU INC.

MANAGEMENT INFORMATION CIRCULAR

This management information circular (this " Circular ") is furnished in connection with the solicitation by the management of Le Château Inc. (the " Corporation ") of proxies to be voted at the annual and special meeting of shareholders of the Corporation (the " Meeting ") to be held on July 12, 2017 at the time and place and for the purposes set forth in the accompanying notice of the Meeting and at any and all adjournments or postponements thereof. Except as otherwise stated, the information herein contained is given as at June 7, 2017.

SOLICITATION OF PROXIES

THE ENCLOSED PROXY IS BEING SOLICITED BY THE MANAGEMENT OF THE CORPORATION and the expenses of solicitation of proxies will be borne by the Corporation. The solicitation will be made primarily by mail; however, directors, officers and regular employees of the Corporation may also solicit proxies by telephone, telecopier or in person.

APPOINTMENT OF PROXIES

The persons named in the enclosed form of proxy are directors of the Corporation. EACH SHAREHOLDER IS ENTITLED TO APPOINT A PERSON TO REPRESENT HIM AT THE MEETING OTHER THAN THE INDIVIDUALS NAMED IN THE FORM OF PROXY ENCLOSED .

A shareholder desiring to appoint some other person (who need not be a shareholder) to represent him at the Meeting may do so either by striking out the names of the management nominees set forth in the form of proxy and by inserting such other person's name in the blank space provided therein or by completing another proper form of proxy, and, in either case, by sending the completed proxy to the Secretary of the Corporation, c/o Computershare Investor Services Inc., Attention: Proxy Department, 100 University Avenue, 8^th Floor, Toronto, Ontario, M5J 2Y1, provided that such form of proxy has been received at the above address not less than 48 hours prior to the Meeting.

REVOCATION OF PROXIES

A shareholder giving a proxy pursuant to this solicitation may revoke any such proxy by completing an instrument in writing executed by the shareholder or by his attorney authorized in writing or, if the shareholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized, and by depositing such instrument at the registered office of the Corporation at 105 Marcel-Laurin Boulevard, Saint-Laurent, Québec H4N 2M3, at any time up to and including the last business day preceding the day of the Meeting, or any adjournment thereof or, as to any matter on which a vote has not already been cast pursuant to the authority conferred by the proxy, by depositing such instrument with the Chairman of the Meeting on the day of the Meeting or any adjournment or postponements thereof. A shareholder may also revoke the proxy in any other manner permitted by law.

NON-REGISTERED HOLDERS

The information set forth in this section is important to the many shareholders who do not hold shares of the Corporation in their own names (the " Non-Registered Holders "). Non-Registered Holders should note that only shareholders whose names appear on the records of the Corporation as registered holders of shares as at the close of business on June 7, 2017 are entitled to vote in person or by proxy at the Meeting. However, in many cases, shares of the Corporation beneficially owned by a Non-Registered Holder are registered either:

(a) in the name of an intermediary (an " Intermediary ") that the Non-Registered Holder deals with in respect of the shares, such as, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans; or

(b) in the name of a clearing agency (such as CDS Clearing and Depository Services Inc. or " CDS ") of which the Intermediary is a participant or in the name of a nominee thereof.

In accordance with the requirements of National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer (" NI 54-101 ") of the Canadian Securities Administrators (the " CSA "), the Corporation has distributed copies of the notice of Meeting, this Circular and a form of proxy or a voting instruction form (collectively, the " Meeting Materials ") to the Intermediaries for onward distribution to NonRegistered Holders.

Intermediaries are required to forward the Meeting Materials to Non-Registered Holders unless a NonRegistered Holder has waived the right to receive them. Very often, Intermediaries will 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 either:

(a) be given a proxy which is signed by the Intermediary (typically by a facsimile, stamped signature) and already sets forth the number of shares beneficially owned by the Non-Registered Holder but which is otherwise uncompleted. This form of proxy need not be signed by the Non-Registered Holder. The NonRegistered Holder who wishes to submit a proxy should properly complete the form of proxy and deposit it with Computershare Investor Services Inc. as described above; or

(b) more typically, be given a voting instruction form which must be completed and signed by the NonRegistered Holder in accordance with the directions set forth on such voting instruction form.

Shares held by or through Intermediaries can be voted for or against resolutions only upon the instructions of the Non-Registered Holder. Without specific instructions, Intermediaries are prohibited from voting shares for a Non-Registered Holder. The purpose of these procedures is to permit Non-Registered Holders to direct the voting of the shares they beneficially own.

Should a Non-Registered Holder who receives either a proxy or a voting instruction form wish to attend and vote at the Meeting in person (or have another person (who need not to be a shareholder of the Corporation) attend and vote on behalf of the Non-Registered Holder), the Non-Registered Holder should strike out the names of the persons named in the proxy and insert the Non-Registered Holder's (or such other person's) name in the blank space provided, or, in the case of a voting instruction form, follow the corresponding directions on the form. In either case, Non-Registered Holders should carefully follow the instructions of their Intermediaries and their service companies and ensure that instructions respecting the voting of their shares are communicated to the appropriate person at the appropriate time.

NOTICE-AND-ACCESS

The Corporation has elected not to send proxy-related materials to registered holders or beneficial holders using the notice-and-access procedures.

PROXY-RELATED MATERIALS - NON-OBJECTING BENEFICIAL OWNERS

The Corporation is not sending proxy-related materials directly to non-objecting beneficial owners under NI 54-101.

PAYMENT TO DELIVER MATERIALS TO OBJECTING BENEFICIAL OWNERS

The Corporation has agreed to pay for intermediaries to deliver to objecting beneficial owners under NI 54-101, the Meeting Materials including Form 54-101F7 - Request for Voting Instructions Made by Intermediary .

EXERCISE OF DISCRETION OF PROXIES

The persons named in the enclosed form of proxy will vote the shares in respect of which they are appointed in accordance with the directions of the shareholders appointing them.

IN THE ABSENCE OF SUCH DIRECTIONS, SUCH SHARES WILL BE VOTED:

(A) FOR THE ELECTION OF THE DIRECTORS NAMED HEREIN;
(B) FOR THE APPOINTMENT OF THE AUDITORS NAMED HEREIN AND THE AUTHORIZATION OF THE DIRECTORS TO FIX THEIR REMUNERATION; AND
(C) FOR THE APPROVAL OF THE RESOLUTION APPROVING AND RATIFYING THE AMENDED AND RESTATED INCENTIVE STOCK OPTION PLAN, THE WHOLE AS MORE FULLY SET FORTH IN SCHEDULE C HERETO.

The matters set forth in (A), (B) and (C) above will be decided by a majority of the votes cast.

The enclosed form of proxy confers discretionary authority upon the persons named therein with respect to amendments or variations to matters identified in the notice of Meeting and with respect to such other matters as may properly come before the Meeting. At the date hereof, the management of the Corporation knows of no such amendments, variations or other matters other than the matters referred to in the notice of Meeting. Should any amendment, variation or other matter properly come before the Meeting, the persons named in the enclosed form of proxy will vote on such matter in accordance with their best judgment.

SHAREHOLDER PROPOSALS FOR 2018 ANNUAL MEETING

Shareholder proposals intended to be presented at the Corporation's 2018 annual meeting of shareholders must be submitted for inclusion in the Corporation's proxy materials prior to March 9, 2018.

VOTING SHARES AND PRINCIPAL HOLDERS THEREOF

The Articles of the Corporation provide that each Class A Subordinate Voting Share shall be converted into one Class B Share if at any time Herschel H. Segal, the founder of the Company and a director and a significant shareholder of the Corporation, together with any corporation controlled directly or indirectly by him ceases to be the beneficial owner, directly or indirectly, and with full power to exercise in all circumstances the voting rights attached to such shares, of shares of the Corporation having attached thereto more than 50% of the votes attached to all outstanding shares of the Corporation. On December 22, 2016, all of the then issued and outstanding Class A Subordinate Voting Shares were reclassified and automatically converted into Class B Shares on a share for share basis, following the voluntary conversion of all of the Class B Shares Mr. Segal beneficially owned (the " Securities Reclassification ").

In light of the foregoing, as at June 7, 2017, no Class A Subordinate Voting Shares and 29,963,762 Class B Shares were outstanding and entitled to be voted at the Meeting. Each of the Class B Shares carries the right to ten votes in respect of all matters to be voted upon by the holders of such shares at the Meeting. The holders of the outstanding Class B Shares will be entitled to exercise at the Meeting 100% of the voting rights attached to all of the outstanding voting shares of the Corporation in respect of all matters to be voted on at the Meeting.

Holders of Class B Shares appearing on the records of the Corporation as at the close of business on June 7, 2017 will be entitled to vote at the Meeting in respect of all matters which may properly come before the Meeting or any adjournment thereof.

To the knowledge of the directors and executive officers of the Corporation, as at June 7, 2017, the only persons who beneficially owned, or exercised control or direction, directly or indirectly, over shares carrying 10% or more of the voting rights attached to the outstanding voting shares of any class of the Corporation were:

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a) Herschel H. Segal, the former Chairman and Chief Executive Officer and currently a director of the Corporation, who beneficially owned, directly or indirectly, 6,856,377 Class B Shares representing approximately 22.9% of the outstanding Class B Shares;
b) Jane Silverstone Segal, the Chairman of the board of directors of the Corporation (the " Board ") and Chief Executive Officer of the Corporation, who beneficially owned, directly or indirectly, 9,343,801 Class B Shares representing approximately 31.2% of the outstanding Class B Shares;
c) Franklin Templeton Investments Corp. which beneficially owned 3,716,300 Class B Shares, representing approximately 12.4% of the outstanding Class B Shares; and
d) Mr. Barry Gruman and his wife, Molly Gruman, who collectively beneficially owned 4,500,000 Class B Shares, representing approximately 15.0% of the outstanding Class B Shares.

QUORUM

Shareholders entitled to vote at the Meeting or duly appointed proxyholders for shareholders so entitled, who together hold or represent by proxy more than 30% of the outstanding shares of the Corporation entitled to vote at the Meeting, will constitute a quorum for the transaction of business at the Meeting.

ELECTION OF DIRECTORS

The Articles of the Corporation provide that the Board shall consist of a minimum of three directors and a maximum of fifteen directors. The size of the Board is currently fixed at six directors. Six directors are nominated by management for election at the Meeting. Unless otherwise specifically instructed, the persons named in the enclosed form of proxy intend to vote at the Meeting for the election of the nominees whose names are set forth below.

All persons named in the table below are now members of the Board, have been members of the Board since the year indicated and, at the Meeting, will be proposed nominees for election to the Board. All nominees have established their eligibility and willingness to serve as directors of the Corporation. Management does not contemplate that any of the nominees will be unable to serve as a director but, if that should occur for any reason prior to the Meeting, the persons named in the enclosed form of proxy reserve the right to vote for another nominee in their discretion unless the shareholder has specified in the proxy that his shares are to be withheld from voting in the election of directors . At the Meeting, the nominees will be voted on individually and the voting results for each nominee will be publicly disclosed. Each director elected will hold office until the close of the first annual meeting of shareholders following his election or until his or her successor is elected or appointed.

In the following table and the notes thereto is stated the name of each person proposed to be nominated by management for election as a director, all other major positions and offices with the Corporation or any of its significant affiliates presently held by such proposed nominee, his or her present principal occupation, his or her province and country of residence, the year in which he or she became a director of the Corporation, and the approximate number of shares of each class of shares of the Corporation beneficially owned by such proposed nominee or over which he or she exercises control or direction as at June 7, 2017.

Name, Principal Occupation and Major Positions and Offices with the Corporation or its Significant Affiliate, Municipality, Province and Countries of residences	Director Since	Number of Class B Shares of the Corporation⁽¹⁾
HERSCHEL H. SEGAL⁽²⁾	1969	6,856,377
President of 87870625 Canada Inc. and 125387 Canada Inc., affiliated holding companies, Montreal, Québec,
Canada

Name, Principal Occupation and Major Positions and Offices with the Corporation or its Significant Affiliate, Municipality, Province and Countries of residences	Director Since	Number of Class B Shares of the Corporation⁽¹⁾
JANE SILVERSTONE SEGAL⁽³⁾ Chairman of the Board and Chief Executive Officer of the Corporation, Montreal, Québec, Canada	1983	9,343,801
EMILIA DI RADDO President of the Corporation, Montreal, Québec, Canada	2000	290,000
DAVID MARTZ^(4)(5)(6) President of 2986698 Canada Inc. (personal holding company), Montreal, Québec, Canada	2002	36,000
NORMAN DAITCHMAN^(4)(5)(6) Consultant, Montreal, Québec, Canada	2011	5,000
MICHAEL PESNER^(4)(5)(6)	2012	-
Lead Director of the Board of the Corporation and President of Hermitage Canada Finance Inc. (financial advisory services), Montreal, Québec, Canada

NOTES:

(1) The information as to shares beneficially owned, controlled or directed, not being within the knowledge of the Corporation, has been furnished by the respective nominees individually.
(2) 125387 Canada Inc. owns 4,400,000 Class B Shares. Mr. Segal owns 2,280 Class B Shares and 8780625 Canada Inc. owns 2,454,097 Class B Shares. Mr. Segal controls all of the issued and outstanding voting shares of 125387 Canada Inc. and owns all of the issued and outstanding voting shares of 8780625 Canada Inc.
(3) 4410980 Canada Inc. owns 9,283,801 Class B Shares and Mrs. Silverstone Segal owns 60,000 Class B Shares. Ms. Silverstone Segal owns all of the issued and outstanding voting shares of Jane Silverstone Holdings Inc. which owns all of the issued and outstanding voting shares of 4410980 Canada Inc.
(4) Member of the Corporate Governance Committee of the Board.
(5) Member of the Audit Committee of the Board.
(6) Member of the Compensation Committee of the Board.

To the knowledge of the directors and officers of the Corporation, except as indicated below, none of the proposed nominees for election as a director of the Corporation:

a) is, as at the date of this Circular, or has been, within ten years before the date of this Circular, a director, chief executive officer or chief financial officer of any company that,
(i) was subject to a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued while the proposed director was acting in the capacity as director, chief executive officer or chief financial officer; or
(ii) was subject to a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, 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;
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b) is, as 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 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; or
c) 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.

On May 25, 2011, Mr. Michael Pesner resigned from the board of directors of Prestige Telecom Inc. In November 2011, Prestige Telecom Inc. filed a notice of intention to file a proposal to its creditors under the Bankruptcy and Insolvency Act (Canada). On March 29, 2012, Prestige Telecom Inc. received a final order from the Court approving the proposal, which had been approved at the meeting of creditors which took place on March 6, 2012.

On June 3, 2015, Mr. Michael Pesner resigned from the board of directors of Liquid Nutrition Group Inc. On June 12, 2015, June 24, 2015 and September 23, 2015, certain securities commissions issued cease trade orders against Liquid Nutrition Group Inc. for default of filing its interim financial statements and management's discussion and analysis for the interim period ended March 31, 2015.

On January 31, 2017, a security commission issued a management cease trade order against Quest Rare Minerals Ltd., which cease trade order was revoked on March 14, 2017. Mr. Michael Pesner was appointed as director of Quest Rare Minerals Ltd in 2007.

To the knowledge of the Corporation, no proposed director has been subject to:

(a) 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

(b) 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.

MAJORITY VOTING POLICY

On June 7, 2013, the Board adopted a majority voting policy (the " Majority Voting Policy ") to the effect that a nominee for election as a director of the Corporation who receives a greater number of votes "withheld" than votes "for", with respect to the election of such nominee by shareholders, shall promptly tender his or her resignation to the Chairman of the Board following the meeting of shareholders at which the director was elected. Upon receiving the resignation, the Corporate Governance Committee will, as soon as practicable, consider such resignation and make a recommendation to the Board whether to accept it or not. The Board will promptly accept the resignation unless the Corporate Governance Committee determines that there are extraordinary circumstances relating to the composition of the Board or the voting results that should delay the acceptance of the resignation or justify rejecting it. In any event, it is expected that the resignation will be considered and a decision taken in respect thereof within 90 days of the related meeting of shareholders. The Board shall promptly disclose, via press release, its decision and should the Board decline to accept the resignation, the press release will include the reason for its decision. The director who tenders his or her resignation pursuant to the Majority Voting Policy will not participate in the Board's consideration regarding whether to accept the tendered resignation. The Majority Voting Policy only applies in circumstances involving an uncontested election of directors. An "uncontested election of directors" means an election of directors in respect of which (i) the number of director nominees is the same as the number of directors to be elected to the Board; and (ii) no proxy materials are circulated in support of one or more nominees who are not part of the candidates supported by the Board.

ATTENDANCE AT BOARD AND BOARD COMMITTEE MEETINGS

The following table sets forth the number of regular meetings held by the Board and each of its committees during the financial year ended January 28, 2017, and the attendance of each current director of the Corporation at these meetings.

		C Corporate	ommittees of the Board
Director	Board Meetings	Governance	Compensation	Audit
Herschel H. Segal	6/6	-	-	-
Jane Silverstone Segal	6/6	-	-	-
Norman Daitchman	6/6	4/4	3/3	5/5
Emilia Di Raddo	6/6	-	-	-
David Martz	6/6	4/4	3/3	5/5
Michael Pesner	6/6	4/4	3/3	5/5
Attendance record: Board meet	ings – 100%;Committee mee	tings – 100%;Overall	attendance – 100%

COMPENSATION OF DIRECTORS

Each director who does not hold a salaried employment or office of the Corporation is entitled to a retainer of $1,000 per month or $12,000 annually. Each director who does not hold a salaried employment or office of the Corporation also receives an additional $1,500 for each Board meeting and Board's committee meeting attended by such director. In addition, the lead director of the Board (the " Lead Director ") receives an annual retainer of $10,000, the Chair of the Audit Committee receives an annual retainer of $10,000, the Chair of the Compensation Committee receives an annual retainer of $6,000 and the Chair of the Corporate Governance Committee receives an annual retainer of $6,000. Directors who hold a salaried employment or office of the Corporation do not receive compensation relating to their roles as directors.

The Corporation believes that the grant of stock options as long-term incentives helps align director and shareholder interests. Options to purchase Class B Shares may be granted from time to time to directors pursuant to the Plan (as defined below). As indicated in the table below, the Corporation made option grants to certain directors during the financial year ended January 28, 2017. There are currently 150,000 outstanding options to purchase Class B Shares to non-executive directors pursuant to the terms of the Plan. Please refer to the Section "Incentive Stock Option Plan" below for more information about the Plan.

The following table details the compensation information for the most recently completed financial year of the Corporation for each of the directors of the Corporation that is not also a Named Executive (as defined below). Please refer to the section "Compensation of Executives - Summary Compensation Table" below for the information with respect to such Named Executives.

Name	Fees Earned ($)	Share Based Awards ($)	Option Based Awards⁽¹⁾ ($)	Non-Equity Incentive Plan Compensation ($)	Pension Value ($)	All Other Compensation ($)	Total ($)
Herschel H. Segal	-	-	-	-	-	-	-
Norman Daitchman	47,500	-	7,500	-	-	-	55,000
David Martz	43,500	-	7,500	-	-	-	51,000

Name	Fees Earned ($)	Share Based Awards ($)	Option Based Awards⁽¹⁾ ($)	Non-Equity Incentive Plan Compensation ($)	Pension Value ($)	All Other Compensation ($)	Total ($)
Michael Pesner	53,500	-	7,500	-	-	-	61,000

NOTE:

(1) Represents a grant date fair value of $0.15 per option using the Black Scholes option pricing model and the following assumptions: 0.61% risk free interest rate; 2.0 years expected option life; 161% expected volatility in the market price of the Class B Shares; 0% expected dividend yield; $0.23 market price for the Class B Shares at grant date.

Outstanding Share-Based Awards and Option Based Awards

The following table indicates for each of the directors of the Corporation that is not also a Named Executive the number of option awards outstanding to purchase Class B Shares as at the financial year ended January 28, 2017. Please refer to the section "Incentive Plan Awards - Outstanding Share-Based Awards and Option Based Awards" below for the information with respect to such Named Executives.

Name	Number of Securities Underlying Unexercised Options (#)	Option-Ba Option Exercise Price ($)	sed Awards Option Expiration Date	Value of Unexercised In-the- Money Options⁽¹⁾ ($)	Sha Number of Shares or Units of Shares That Have Not Yet Vested (#)	re-Based Awa Market or Payout Value of Share- Based Awards that Have Not Vested ($)	rds Market or payout value of vested share-based awards not paid out or distributed ($)
Herschel H. Segal	-	-	-	-	-	-	-
Norman Daitchman	50,000	0.23	September 16, 2021	-	-	-	-
David Martz	50,000	0.23	September 16, 2021	-	-	-	-
Michael Pesner	50,000	0.23	September 16, 2021	-	-	-	-

NOTE:

(1) The value of the unexercised in-the-money options at financial year-end (some of which have not yet vested) is the difference between the closing price of the Class B Shares on January 27, 2017 (the last trading day of the financial year ended January 28, 2017) on the Toronto Stock Exchange (" TSX ") (being an amount equal to $0.18) and the exercise prices of such options. This value has not been, and may never be realized by the director. The actual gains, if any, on exercise will depend on the value of the Class B Shares on the date of the option exercise. See "Incentive Stock Option Plan" below for further information regarding the Plan.

Value Vested or Earned on Incentive Plan Awards During the Most Recently Completed Financial Year

The following table indicates for each of the directors of the Corporation that is not also a Named Executive, the value on vesting of all awards and bonus amounts paid or payable in respect of the financial year ended January 28, 2017. Please refer to the section "Incentive Plan Awards - Value Vested or Earned on Incentive Plan Awards During the Most Recently Completed Financial Year" below for the information with respect to such Named Executives.

Name	Option-Based Awards – Value Vested During the Year⁽¹⁾ ($)	Share-Based Awards – Value Vested During the Year ($)	Non-Equity Incentive Plan Compensation – Value earned During the Year ($)
Herschel H. Segal	-	-	-
Norman Daitchman	Nil	-	-
David Martz	Nil	-	-
Michael Pesner	Nil	-	-

NOTE:

(1) The amount represents the aggregate dollar value that would have been realized if the options had been exercised on the vesting date, based on the difference between the closing price of the Class B Shares on the TSX and the exercise price on such vesting date.

The following table indicates for each of the directors of the Corporation that is not also a Named Executive the number of options vested and the number of options exercised during the financial year ended January 28, 2017 as well as the exercise price for such options and their expiry date.

Name	Options vested during the year	Options exercised during the year	Exercise Price ($)	Expiry Date
Herschel H. Segal	-	-	-	-
Norman Daitchman	-	-	-	-
David Martz	-	-	-	-
Michael Pesner	-	-	-	-

COMPENSATION OF EXECUTIVES

Summary Compensation Table

The following table details the compensation information for the three most recent financial years of the Corporation, for the Chief Executive Officer, the person performing the functions of a chief financial officer of the Corporation (being Emilia Di Raddo, the President of the Corporation) and the three other most highly compensated executive officers of the Corporation (collectively, the " Named Executives ").

Name and Principal Position	Year	Salary ($)	Share Based Awards ($)	Option Based Awards ($)	Non-Equit Plan Comp Annual Incentive Plans	y Incentive ensation ($) Long-term Incentive Plans	Pension Value ($)	All Other Compensation⁽¹⁾ ($)	Total Compensation ($)
Jane Silverstone Segal Chairman and Chief Executive Officer	2017 2016 2015	1,000,000 1,000,000 1,000,000	- - -	19,500⁽²⁾ - -	- - -	- - -	- - -	- - -	1,019,500 1,000,000 1,000,000

			Share	Option	Non-Equit Plan Comp	y Incentive ensation ($)
Name and Principal Position	Year	Salary ($)	Based Awards ($)	Based Awards ($)	Annual Incentive Plans	Long-term Incentive Plans	Pension Value ($)	All Other Compensation⁽¹⁾ ($)	Total Compensation ($)
Emilia Di Raddo, CPA, CA	2017	600,000	-	18,000⁽²⁾	-	-	-	-	618,000
President	2016	600,000	-	-	-	-	-	-	600,000
	2015	600,000	-	-	-	-	-	-	600,000
Franco Rocchi	2017	350,000	-	12,000⁽²⁾	-	-	-	-	362,000
Senior Vice-President, Sales and Operations	2016 2015	350,000 350,000	- -	- -	- -	- -	- -	- -	350,000 350,000
Johnny Del Ciancio, CPA, CA	2017	250,000	-	12,000⁽²⁾	-	-	-	-	262,000
Vice-President, Finance and Secretary	2016 2015	250,000 250,000	- -	- -	- -	- -	- -	- -	250,000 250,000
Courtenay Fishman	2017	225,000	-	3,000⁽²⁾	-	-	-	-	228,000
Vice-President, Creative Direction	2016 2015	225,000 225,000	- -	- -	- -	- -	- -	- -	225,000 225,000

NOTES:

(1) The total amount of perquisites for each Named Executive on an aggregate basis, does not exceed the lesser of $50,000 and 10% of his or her annual cash compensation and as such have not been specifically enumerated in the table above.
(2) Represents a grant date fair value of $0.15 per option using the Black Scholes option pricing model and the following assumptions: 0.61% risk free interest rate; 2.0 years expected option life; 161% expected volatility in the market price of the Class B Shares; 0% expected dividend yield; $0.23 market price for the Class B Shares at grant date.

INCENTIVE PLAN AWARDS

Outstanding Share-Based Awards and Option Based Awards

The following table indicates for each Named Executive the number of option awards outstanding to purchase Class B Shares as at the financial year ended January 28, 2017:

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Name	Number Of Securities Underlying Unexercised Options (#)	Optio Option Exercise Price ($)	n-Based Awards Option Expiration Date	Value of Unexercised In-the- Money Options⁽¹⁾ ($)	Sha Number of Shares or Units of Shares That Have Not Yet Vested (#)	re-Based Aw Market or Payout Value of Share- Based Awards that Have Not Vested ($)	ards Market or payout value of vested share- based awards not paid out or distributed ($)
Jane Silverstone Segal	300,000	3.00	July 9, 2017	-	-	-	-
Chairman and Chief	175,000	4.59	July 12, 2018
Executive Officer	130,000	0.23	September 16, 2021
Emilia Di Raddo, CPA, CA	250,000	3.00	July 9, 2017	-	-	-	-
President	150,000	4.59	July 12, 2018
	120,000	0.23	September 16,2021
Franco Rocchi	150,000	3.00	July 9, 2017	-	-	-	-
Senior Vice-President,	75,000	4.59	July 12, 2018
Sales and Operations	80,000	0.23	September 16,2021
Johnny Del Ciancio, CPA,	100,000	3.00	July 9, 2017	-	-	-	-
CA	50,000	4.59	July 12, 2018
Vice-President, Finance and Secretary	80,000	0.23	September 16, 2021
Courtenay Fishman	50,000	1.44	July 9, 2017	-	-	-	-
Vice-President, Creative	50,000	4.59	July 12, 2018
Direction	20,000	0.23	September 16,2021

NOTE:

(1) The value of the unexercised in-the-money options at financial year-end (some of which have not yet vested) is the difference between the closing price of the Class B Shares on January 27, 2017 (the last trading day of the financial year ended January 28, 2017) on the TSX (being an amount equal to $0.18) and the exercise prices of such options. This value has not been, and may never be realized by the Named Executive. The actual gains, if any, on exercise will depend on the value of the Class B Shares on the date of the option exercise. See "Incentive Stock Option Plan" below for further information regarding the Plan.

Value Vested or Earned on Incentive Plan Awards During the Most Recently Completed Financial Year

The following table indicates for each Named Executive, the value on vesting of all awards and bonus amounts paid or payable in respect of the financial year ended January 28, 2017:

Name	Option-Based Awards – Value Vested During the Year⁽¹⁾ ($)	Share-Based Awards – Value Vested During the Year ($)	Non-Equity Incentive Plan Compensation – Value earned During the Year ($)
Jane Silverstone Segal Chairman and Chief Executive Officer	-	-	-
Emilia Di Raddo, CPA, CA President	-	-	-
Franco Rocchi Senior Vice-President, Sales and Operations	-	-	-

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Name	Option-Based Awards – Value Vested During the Year⁽¹⁾ ($)	Share-Based Awards – Value Vested During the Year ($)	Non-Equity Incentive Plan Compensation – Value earned During the Year ($)
Johnny Del Ciancio, CPA, CA Vice-President, Finance and Secretary	-	-	-
Courtenay Fishman Vice-President, Creative Direction	-	-	-

NOTE:

The following table indicates for each Named Executive the number of options vested and the number of options exercised during the financial year ended January 28, 2017 as well as the exercise price for such options and their expiry date:

Name	Options vested during the year	Options exercised during the year	Exercise Price ($)	Expiry Date
Jane Silverstone Segal Chairman and Chief Executive Officer	120,000 35,000	- -	3.00 4.59	July 9, 2017 July12,2018
Emilia Di Raddo, CPA, CA President	100,000 30,000	- -	3.00 4.59	July 9, 2017 July12,2018
Franco Rocchi Senior Vice-President, Sales and Operations	60,000 15,000	- -	3.00 4.59	July 9, 2017 July 12, 2018
Johnny Del Ciancio, CPA, CA Vice-President, Finance and Secretary	40,000 10,000	- -	3.00 4.59	July 9, 2017 July 12, 2018
Courtenay Fishman Vice-President, Creative Direction	20,000 10,000	- -	1.44 4.59	July 9, 2017 July12,2018

INCENTIVE STOCK OPTION PLAN

The Corporation currently has in place a stock option plan (as amended from time to time, the " Plan ").

On December 22, 2016, the Board adopted a resolution to amend the Plan in the context of the Securities Reclassification with the only change being the granting, under the Plan, of options to purchase Class B Shares, rather than Class A Subordinate Voting Shares (the " Amendment "). The Amendment reflects the fact that, following the Securities Reclassification, the Corporation has only one class of issued and outstanding shares, namely the Class B Shares. All options issued and outstanding under the Plan prior to December 22, 2016 are deemed exercisable for Class B Shares, notwithstanding the terms of such option or related option agreement. The Amendment did not require any shareholders approval.

On June 7, 2017, the Board approved an amended and restated Plan to, among other things, reflect the current requirements of the TSX Venture Exchange in connection with the Corporation's application for listing on such exchange, which amendments require shareholders approval.

Below is a summary of the material terms of the Plan that the shareholders of the Corporation will be asked to consider at the Meeting:

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The maximum number of Class B Shares issuable under the Plan is equal to a fixed maximum percentage of 10% (instead of the prior 12%) of the aggregate number of Class B Shares issued and outstanding from time to time. As at June 7, 2017, 3,555,500 Class B Shares (a number representing 11.9% of the aggregate number of Class B Shares issued and outstanding) were issuable pursuant to outstanding options granted under the Plan. Following the expiration of a number of unexercised options scheduled in July 2017, the aggregate number of Class B Shares issuable under the Plan will be reduced to less than 10%.

Pursuant to the Plan, options may be granted to employees, directors, consultants and service providers of the Corporation and its subsidiaries, and the exercise price, number of Class B Shares covered by each option, as well as the permitted frequency of the exercise of such options, is determined by the Board (or committee thereof) at the time the options are granted, in accordance with the criteria set out in the Plan. Currently, the exercise price of any option granted (the " Option Price ") shall be not less than the market price for one Class B Share and such market price shall be calculated by reference to the reported closing sale price of the Class B Shares on the TSX Venture Exchange on the last trading day before the day on which the option was granted, or, if no sale is reported on that day on such exchange, the Option Price shall be deemed to be the volume weighted average trading price of the Class B Shares for the five days preceding the date of grant during which the Class B Shares were traded on the TSX Venture Exchange. Subject to any applicable Black Out Period (as defined below), the period during which an option is exercisable shall be limited to ten years. Options are not transferable except by will or by the laws of succession of the domicile of a deceased optionee and may be exercised by optionees while such optionees remain employees, consultants, service providers or directors of the Corporation. If an optionee's employment or provision of services is terminated for just cause, or if an optionee is removed from office as a director or disqualified from being a director by law, as the case may be, his/her options shall terminate forthwith. Upon an optionee's employment or provision of services with or to the Corporation being terminated otherwise than by reason of death or for cause or upon an optionee's ceasing to be a director otherwise than by reason of death, removal or disqualification by law, any option or unexercised portion thereof granted to such optionee may be exercised by him for that number of shares only which he was entitled to acquire under the option at the time of such termination or cessation and such option shall only be exercisable within three months after such termination or cessation or prior to the expiration of the term of the option, whichever occurs earlier. If an optionee dies while employed by, providing services to or serving as a director of the Corporation, any option or unexercised portion thereof granted to such optionee may be exercised by a legatee or legatees of such option under the optionee's last will or by his personal representative for that number of shares only which the optionee was entitled to acquire under the option at the time of his death and such option shall only be exercisable at any time within one year after the optionee's death or prior to the expiration of the term of the option, whichever occurs earlier. If an optionee dies within three months after the termination of his employment or provision of services otherwise than for cause or within three months after ceasing to be a director otherwise than by reason of removal or disqualification by law, the legatee or legatees of the option under the optionee's last will or the optionee's personal representatives may exercise that option or any unexercised portion thereof for that number of shares and within one year after the optionee's death or prior to the expiration of the term of the option, whichever occurs earlier.

The Plan provides for the following limitations on the number of Class B Shares issuable thereunder:

(i) the aggregate number of Class B Shares issuable at any time to insiders of the Corporation under the Plan and all other security based compensation arrangements of the Corporation may not exceed 10% of the aggregate number of Class B Shares issued and outstanding from time to time;
(ii) the aggregate number of options that be may granted to insiders (as a group) within a 12 month period may not exceed 10% of the aggregate number of Class B Shares issued and outstanding from time to time, calculated at the date an option is granted to any insider;
(iii) the aggregate number of options granted to any one person (and any companies that are wholly owned by that person) within a 12 month period must not exceed 5% of the aggregate number of Class B Shares issued and outstanding from time to time, calculated at the date an option is granted is granted to the person;
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(iv) the aggregate number of options granted to any one consultant of the Corporation within a 12 month period must not exceed 2% of the aggregate number of Class B Shares issued and outstanding from time to time, calculated at the date an option is granted to the consultant; and
(v) the aggregate number of options granted to all persons retained to provide Investor Relations Activities (as such term is defined under the TSX-V Corporate Finance Policies) to the Corporation must not exceed 2% of the aggregate number of Class B Shares issued and outstanding from time to time, within a 12 month period, calculated at the date an option is granted to any such person.

The Plan does not provide for any financial assistance to any eligible person or any cashless exercise feature payable in either cash or securities. For options granted to employees or consultants of the Corporation and to Management Company Employees, the Corporation and the optionee are responsible for ensuring and confirming that such optionee is a bona fide employee, consultant or Management Company Employee, as the case may be.

Under the Plan, the Board may, at any time, subject to regulatory approval and prior approval of the TSX Venture Exchange if the Class B Shares are listed on such exchange, amend, suspend or terminate the Plan and any outstanding option granted hereunder, in whole or in part, at any time without notice to or approval by the shareholders of the Corporation (provided that, in the case of any action taken in respect of an outstanding option, the optionee's consent to such action shall be required unless the Board determines that the action would not materially and adversely affect the optionee), for any purpose whatsoever, including without limitation for the purpose of:

(i) ensuring continuing compliance with applicable laws, regulations, requirements or policies of any governmental authority;
(ii) eliminating any ambiguity or correcting or supplementing any provision contained herein which may be incorrect or incompatible with any other provision of the Plan;
(iii) changing the terms and conditions governing options under the Plan (other than amendments to the expiry and termination provisions applicable to options), including with respect to the vesting period, exercise method and frequency, Option Price and method of determining the Option Price, assignability and effect of termination of the optionee's employment or consulting agreement or cessation of the optionee's directorship;
(iv) advancing the date on which any option may be exercised, provided that the period during which an option is exercisable does not exceed ten years from the date the option is granted, and further provided that the Board shall not, in the event of any such advancement, be under any obligation to advance the date on or by which any option may be exercised by any other optionee;
(v) determining that any of the provisions of the Plan concerning the effect of termination of the optionee's employment or consulting agreement or cessation of the optionee's directorship, shall not apply for any reason acceptable to the Board;
(vi) changing the terms and conditions of any financial assistance which may be provided by the Corporation to the optionees to facilitate the purchase of Class B Shares hereunder, or adding or removing any provisions providing for such financial assistance; and
(vii) providing for the granting of other kinds of awards under the Plan, including deferred or restricted share units, stock-appreciation rights and other security-based awards, whether or not involving the issuance of Class B Shares from treasury.

However, the approval of the holders of a majority of the Class B Shares present and voting in person or by proxy at a meeting of shareholders is required for any amendment to the provisions of Section 6 of the Plan (with

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respect to amendment or discontinuance of the Plan); any increase in the maximum number of Class B Shares issuable under the Plan; any amendment to the limitations under the Plan on the number of options that may be granted to any one person or any category of person (such as, for example, insiders); any change to the class of participants eligible to participate under the Plan; any change to the manner of determining the Option Price; any amendment to the expiry and termination provisions applicable to options; any alteration of the Black Out Expiration Term (as defined below); any change to the termination provisions of an option or the Plan which does entail an extension beyond the original expiration date; and any reduction in the Option Price or extension of the period during which an option is exercisable (provided that such period does not exceed ten years from the date the option is granted) benefiting an insider, provided that in the case of such an amendment, insiders of the Corporation who benefit from such amendment are not eligible to vote their Class B Shares in respect of the approval.

The Plan provides that if the term of an option of any eligible person under the Plan expires during or within ten business days of the expiration of a black out period imposed by the Corporation and during which an option holder is prohibited from trading in securities of the Corporation (a " Black Out Period "), then the term of the option or the unexercised portion thereof, shall be extended by ten business days after the expiration of the Black Out Period, provided that this extension will be reduced by the number of days between the expiration of the term of the option and the end of the Black Out Period (the " Black Out Expiration Term ").

Furthermore, the Plan also provides that in the event the Corporation proposes to amalgamate, combine or merge with any other corporation or entity (other than with a wholly-owned subsidiary of the Corporation) whether by way of take-over bid, reverse take-over, arrangement, insider bid, going private transaction or otherwise or to liquidate, dissolve or wind up or in the event an offer to purchase the shares of the Corporation or any part thereof shall be made to all shareholders of the Corporation, the Corporation may give written notice thereof to any optionee holding options under the Plan to permit exercise thereof of all such options, whether vested or unvested, within the 30 day period following the date of such notice or such longer period as the Board may deem appropriate.

Notwithstanding anything contained to the contrary in the Plan, in any resolution of the Board in implementation thereof or in any option agreement with an optionee, in the event of any change in the number of issued and outstanding Class B Shares of the Corporation by reason of any stock dividend, stock split, conversion, recapitalization, merger, consolidation, combination or exchange of Class B Shares or other similar change, an equitable adjustment shall be made by the Board in the number of Class B Shares subject to outstanding options and in the Option Price of such Class B Shares. Such adjustment will be definitive and mandatory for the purposes of the Plan.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table sets forth certain details as at the end of the last financial year ended January 28, 2017 with respect to compensation plans pursuant to which equity securities of the Corporation are authorized for issuance.

Plan Category	# of Shares to be issued upon exercise of outstanding options	Weighted-average exercise price of outstanding options ($)	# of Shares remaining available for future issuance under the Equity Compensation Plans
Plans approved by Shareholders	3,576,500	2.13	19,151
Plans not approved by Shareholders	-	-	-
Total	3,576,500	2.13	19,151

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INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

No current or former director, executive officer or employee of the Corporation or any of its subsidiaries is or has been, at any time since the beginning of the most recently completed financial year, indebted to the Corporation or any of its subsidiaries. Further, no indebtedness of any director or executive officer to another entity is or has been, at any time since the beginning of the most recently completed financial year, the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Corporation or any of its subsidiaries.

TERMINATION AND CHANGE OF CONTROL BENEFITS

The Corporation has entered into agreements (collectively, the " Agreements ") with each of the Named Executives in connection with the granting to them of options under the Plan. The Agreements provide, among other things, for the termination of the employment of any optionee that is a vice president, at the option of the Corporation, upon the giving of 180 days' prior notice of termination, unless another period of notice is provided for in any written contract of employment. Each of the Agreements also provides for the confidential treatment by the Named Executive of information concerning the Corporation which the Named Executive acquired during the course of his or her employment.

Of the Named Executives, only Ms. Di Raddo has entered into a written contract of employment with the Corporation providing for a one year notice period. The Corporation entered into an employment contract with Ms. Di Raddo as of August 13, 1996 for her engagement (originally as Vice-President, Finance and Administration) for an indeterminate term. In accordance with the terms of her agreement and subsequent board resolutions, her annual salary has been $600,000 since May 1, 2009 and is subject to certain increases. Ms. Di Raddo is also eligible to participate in the Corporation's incentive plans. The agreement also provides for confidentiality provisions, non-competition and non-solicitation of employees provisions and dismissal provisions which provide for a severance to be paid in case of dismissal without cause equal to the greater of (a) $200,000 or (b) an amount equal to her then payable annual base salary. The agreement also provides that in the event of a change of control of the Corporation, Ms. Di Raddo will be entitled, provided that she gives notice of resignation within fifteen months from the date of the change of control, to an amount equal to the amount payable upon her termination without cause as detailed above.

Assuming her termination without cause or that a change of control event had occurred on January 27, 2017, the last business day of the financial year ended January 28, 2017, Ms. Di Raddo would have been entitled (upon giving notice of resignation in the case of a change of control event) to receive an amount equal to her base salary of $600,000. Assuming that their termination without cause had occurred on January 27, 2017, the last business day of the financial year ended January 28, 2017, Messrs. Rocchi and Del Ciancio and Ms. Fishman would have been entitled to receive, respectively, amounts equal to $172,603, $123,288 and $110,959. In addition, the Named Executives would have been, had the Corporation given the requisite written notice of acceleration to such Named Executives (as described above under the heading "Incentive Stock Option Plan" above), entitled to the amounts listed in the table above referred to as "Outstanding Share-Based Awards and Option Based Awards" in the column "Value of Unexercised In-the-Money Options".

COMPOSITION OF THE COMPENSATION COMMITTEE

The members of the Compensation Committee during the financial year ended January 28, 2017 were David Martz, Norman Daitchman and Michael Pesner. Mr. David Martz is the Chair of the Compensation Committee. The Compensation Committee met three times during the financial year ended January 28, 2017, in camera and then with senior management, to discuss base remuneration, bonuses and option-based awards. The Chair and members of the Compensation Committee conferred on several occasions on compensation matters. Given the financial results of the Corporation, the Compensation Committee was unanimous on their approach to senior management compensation awards in respect of the financial year ended January 28, 2017, which was reflected (and supported) in discussions with management.

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The following is a summary of the experience and skills of each of the current members of the Compensation Committee which are relevant to each member's responsibilities and enabling the Compensation Committee to make decisions on the suitability of the Corporation's compensation policies and practices:

David Martz - Mr. Martz holds a Bachelor of Science from McGill University as well as an MBA from McMaster University with a major in finance. He was employed at Steinberg Inc. in various financial and executive capacities from 1971 to 1983. From 1983 to 2002, he was an executive with the Aldo Group, an international footwear and accessory retailer based in Montreal, where he was Vice President and Corporate Secretary at the time of his departure. In addition to overseeing the expansion of the North American retail network, and conducting regular performance evaluations and compensation reviews for executive level subordinates, part of his responsibilities during some of that period was in the area of corporate human resources. With consultation from Mercer Inc., he was responsible for the successful development and implementation of the corporate senior management and executive incentive compensation system. He also served as a director of the Retail Council of Canada from 1993 to 2002. Since then, Mr. Martz has been the principal of Martz Management Inc. (management consultants), now merged with 2986698 Canada Inc. (personal holding company), executing management consulting assignments in both the corporate and "not for profit" sectors. He currently serves on the advisory boards of several Canadian private corporations, as well as serving on several local not for profit boards.

Norman Daitchman FCPA, FCA - Mr. Daitchman obtained a Bachelor of Commerce degree from McGill University in 1968 and joined the accounting firm of Zittrer, Siblin, Stein, Levine where he was appointed a partner in May 1977. He was a partner of that firm when it merged with Ernst & Young in 1991 and was thereafter a partner of Ernst & Young until his retirement in 2008. In such functions, Mr. Daitchman was involved in the determination of employee evaluations and remuneration over a period of more than 30 years.

Michael Pesner, CPA, CA - Mr. Pesner has been President of Hermitage Canada Finance Inc. since 2004 and President of Hermitage International Finance Inc. from 2002 to 2004, both firms specializing in financial advisory services. He was previously a partner in financial advisory services at KPMG LLP, in Montreal, specializing in corporate finance, mergers and acquisitions, divestitures, restructuring and corporate recovery in Canada. Mr. Pesner holds a Bachelor of Commerce degree in Finance and Administration from McGill University as well as a Bachelor of Arts degree from Sir George Williams University. Mr. Pesner is a member of the Human Resources and Compensation Committee and of the Corporate Governance and Nominating Committee of Richmont Mines Inc.

Each of the members of the Compensation Committee is considered to be independent within the meaning of National Instrument 52-110 - Audit Committees .

The principal function of the Compensation Committee is to review and approve the compensation of the senior management of the Corporation (for this purpose, senior management includes all vice president positions and above), to review management's development of the compensation philosophy and then to independently monitor the Corporation's compensation systems and practices to ensure they encourage and reward behavior which supports the achievement of the Corporation's strategic goals. The Compensation Committee also makes recommendations to the Board as to which directors and fulltime employees should be granted stock options pursuant to the Plan.

COMPENSATION DISCUSSION AND ANALYSIS

The objective of the Corporation's compensation arrangements for the Named Executives is to motivate and provide an incentive to senior management to perform as part of a cohesive team focused on the short and long-term performance of the Corporation and whose interests are aligned with those of the Corporation and its shareholders.

The compensation packages for the Named Executives are designed to provide each of them with a competitive level of base remuneration and to reward them as a function of performance.

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Executive Compensation Philosophy

The Corporation's compensation philosophy for Named Executives is to:

provide a competitive level of base remuneration;
reward Named Executives through cash bonuses and stock-based compensation for high levels of performance, taking account of economic and market conditions; and
reward the maintenance and enhancement of corporate profitability.

Components of Compensation Program, Determination for each Component, Rationale for Amounts of each Component

The major components of the executive compensation program are base salary, annual performance bonuses and option grants. Bonuses awarded to the Named Executives are a function of their level of responsibility, individual performance and the performance of the Corporation.

The Corporation believes that the grant of stock options as long-term incentives helps align management and shareholder interests. Options to purchase Class B Shares may be granted from time to time to executives pursuant to the Plan in order to sustain a commitment to long term profitability and, in general, previous grants of options are taken into account when considering new grants. As recommended by the Compensation Committee and as reflected in the compensation tables above, during the financial year ended January 28, 2017, the Corporation made option grants to, among others, all of the Named Executives.

During the financial year ended January 25, 2014 and subsequently during the financial year ended January 28, 2017, the Compensation Committee retained PCI – Perrault Consulting Inc. (" PCI ") to conduct analyses of the remuneration of senior executives and directors in a group of Canadian companies (the " Comparator Group "). Such companies were selected for inclusion in the Comparator Group on the basis of meeting one or more of the following selection criteria as companies as similar to the Corporation as possible given that there are few direct comparables: significant retail and/or distribution activities; publicly traded company; and similarity to the Corporation in terms of consolidated revenues. The Comparator Group in the financial year ended January 25, 2014 was comprised of the following companies: Reitmans (Canada) Limited, Indigo Books and Music Inc., BMTC Group Inc., Leon's Furniture Ltd., Richelieu Hardware Ltd., Atrium Innovations Inc., MEGA Brands Inc., Bauer Performance Sports Ltd., Andrew Peller Ltd., Coastal Contacts Inc., Easyhome Ltd. and Danier Leather Inc.

For the fiscal 2017 study, due to the lack of publicly traded comparable companies, a composite of several Canadian compensation data banks were used to benchmark the executive and senior management positions in question. In the first data bank, the sampling process included apparel retail store sector companies with comparable revenue to the Corporation for the year in question ($237 million). With the second data bank, positions were matched with the appropriate generic benchmark in a sample of companies in the retail and wholesale industry sector with a revenue range of $200-500 million. Finally, in cases where there was an insufficient number of comparable incumbents for a particular position, the sample was enlarged with the inclusion of general industry data.

The purpose of the analyses conducted by PCI in the financial years ended January 25, 2014 and January 28, 2017 was to compare compensation practices for senior executives and directors within the Comparator Group to assist the Compensation Committee and the Board in the determination of remuneration levels and components. In conducting its analysis, PCI reported directly to the Chair of the Compensation Committee.

After consultation with senior management and a review of the results for the financial year ended January 28, 2017, the Compensation Committee recommended that no bonuses be awarded to the Named Executives and that no adjustments be made to the base salaries of the Named Executives. The Compensation Committee also determined that the executive compensation philosophy and components currently in place remain adequate at this

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time as concerns the Named Executives in the context of the Corporation. In making such recommendations and determinations, the Compensation Committee also considered the analysis completed by PCI.

The Compensation Committee as well as the Board have analyzed the risks associated with the Corporation's compensation policies and practices and have concluded that they are not reasonably likely to have a material adverse effect on the Corporation.

Executive Compensation-Related Fees

During the financial year ended January 28, 2017, the Corporation paid fees of $8,988 to PCI to conduct an analysis of the remuneration of senior executives and directors in the Comparator Group. During the financial year ended January 30, 2016, the Corporation did not pay any fees relating to executive compensation consulting. There is no policy in place pursuant to which the Board or the Compensation Committee would have to pre-approve other services that PCI or its affiliates would provide to the Corporation at the request of management.

Additional Compensation-Related Matters

There is no policy in place prohibiting a Named Executive or director from purchasing financial instruments designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by the Named Executive or director. The Board retains full discretion with respect to the payment, quantification or non payment of bonuses.

Corporate Performance

The table below highlights the Corporation's performance in the financial year ended January 28, 2017 compared to the previous financial year. While the Compensation Committee examines a number of key metrics and factors, including relative financial performance of the Corporation versus the Comparator Group, the five factors included in the table below are of particular importance and are considered indicative of the Corporation's overall performance for the year.

Metrics	Year ended January 28, 2017 (52 weeks) ($)	Year ended January 30, 2016 (52 weeks) ($)	Variance
Sales	226,587,000	236,876,000	(4.3%)
Adjusted EBITDA⁽¹⁾	(16,342,000)	(12,811,000)	N/A
Loss before income taxes	(37,226,000)	(35,745,000)	N/A
Loss per share (diluted)	(1.24)	(1.19)	N/A
Working capital ratio	1.32	3.24	N/A

NOTE:

(1) Adjusted EBITDA is a supplementary earnings measure defined as earnings (loss) before interest, income taxes, depreciation, amortization, write-off and/or impairment of property and equipment and intangible assets. Adjusted EBITDA is provided to assist users of financial information in determining the ability of the Corporation to generate cash from operations and to cover financial charges. It is also widely used for valuation purposes for public companies in the Corporation's industry. Refer to the discussion under the heading "Non-GAAP measures" of the Corporation's most recent annual Management's Discussion and Analysis, a copy of which is available on SEDAR at www.sedar.com.

PERFORMANCE GRAPH

Pursuant to the Securities Reclassification which occurred on December 22, 2016, all of the issued and outstanding Class A Subordinate Voting Shares were converted into Class B Shares on a one-for-one basis. The

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Class B Shares commenced trading on the TSX on December 28, 2016.

The following graph compares the cumulative total shareholder return on $100 invested in (i) Class A Subordinate Voting Shares at the end of January 2012 until December 27, 2016 inclusively, and (ii) Class B Shares from December 28, 2016 until the end of January 2017 on the TSX with the cumulative total shareholder return on the S&P/TSX Total Return Index, assuming reinvestment of all dividends.

$300
$250
$200
$150
$100
$50
$0
JAN 12 JAN 13 JAN 14 JAN 15 JAN 16 JAN 17
Class A Subordinate
S&P/TSX Total Return Index
SHAREHOLDER RETURN INDEX

The trend shown by the performance graph set forth above represents a loss in the cumulative total shareholder return from January 2013 until January 2017. The Class A Subordinate Voting Shares and, subsequently, the Class B Shares, have generally underperformed the S&P/TSX Total Return Index over the past five years. From January 2012 until January 2017, the trend in the Corporation's total compensation (base salary and all other compensation components, taken as a whole) to its Named Executives has followed the general trend in the performance of the Class A Subordinate Voting Shares and subsequently, the Class B Shares. For the financial years ended between January 28, 2012 and January 28, 2017 inclusively, no cash bonuses were awarded to the Named Executives. Further, there were no or only nominal increases in base salary for the Named Executives following the financial year ended January 28, 2012.

APPOINTMENT OF AUDITORS

The Board recommends that Ernst & Young LLP, Chartered Accountants, be appointed as independent auditors of the Corporation, to hold office until the close of the next annual meeting of shareholders and to authorize the Board to fix their remuneration. Ernst & Young LLP have been performing this function for the Corporation for more than five years.

APPROVAL AND RATIFICATION OF THE INCENTIVE STOCK OPTION PLAN

At the Meeting, shareholders of the Corporation will be asked to consider and, if deemed advisable, to approve, with or without amendment, the resolution set forth on Schedule C to this Circular approving and ratifying the amended and restated Plan (the " Option Plan Resolution ").

As indicated above under the heading "Incentive Stock Option Plan", the Board approved on June 7, 2017 an amended and restated Plan to, among other things, reflect the current requirements of the TSX Venture Exchange in connection with the Corporation's application for listing on such exchange, which Plan provides, in lieu of a fixed number of shares issuable pursuant to options granted under the Plan, that the maximum number of Class B Shares issuable under the Plan is equal to a fixed maximum percentage of 10% of the aggregate number of Class B Shares issued and outstanding from time to time.

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In accordance with the rules of the TSX Venture Exchange, "rolling plans" such as the Plan must be approved by shareholders when instituted and every year thereafter. If approval is not obtained at the Meeting, the Corporation will not be permitted to grant options under the Plan and options outstanding as of the date of the Meeting that are subsequently cancelled, terminated or exercised will not become available for new grants thereupon. However, all outstanding options will continue unaffected. A summary of the terms of the Plan is included in this Circular under the heading "Incentive Stock Option Plan" and the full text of the Plan, as amended and restated, is attached hereto as Exhibit A.

To be effective, the Option Plan Resolution must be approved by a simple majority of the votes cast by the shareholders of the Corporation who vote in person or by proxy at the Meeting on the Option Plan Resolution. In the absence of a contrary instruction, the person designated by management of the Corporation in the form of proxy intends to vote in favour of the Option Plan Resolution.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

Information regarding the interest of informed persons in material transactions is set forth under the heading "Interest of Management and Others in Material Transactions" of the Corporation's annual information form dated April 28, 2017, a copy of which is available on SEDAR at www.sedar.com.

ADDITIONAL INFORMATION

Financial information is provided in the Corporation's comparative annual financial statements and management's discussion and analysis for its most recently completed financial year.

Copies of these documents and additional information relating to the Corporation are available on SEDAR at www.sedar.com. Additional copies may be obtained without charge upon request to the Corporation's Secretary at 105 Marcel-Laurin Boulevard, Saint-Laurent, Québec H4N 2M3 (telephone (514) 738-7000).

REPORT ON CORPORATE GOVERNANCE

The CSA has adopted National Policy 58-201 - Corporate Governance Guidelines (the " Guidelines ") to provide guidance to Canadian reporting issuers regarding corporate governance. The Guidelines relate to a number of significant governance issues, including the proper role of a board of directors, its structure and composition and its relationship with shareholders and management. The CSA has also adopted National Instrument 58-101 - Disclosure of Corporate Governance Practices requiring that disclosure be made by a listed corporation of its corporate governance practices. A description of the Corporation's corporate governance practices is attached hereto as Schedule A. The Corporate Governance Committee, currently composed of David Martz, Norman Daitchman and Michael Pesner, has reviewed the disclosure set out in Schedule A. The Board continues to periodically review corporate governance proposals made by the CSA. As new standards become effective, the Board will review and amend, where necessary and appropriate, its corporate governance practices and the eligibility of the members of the Board on each committee and shall, if necessary, make appropriate changes.

In addition to the information set forth in Schedule A to this Circular, the following sets forth certain information regarding the Audit Committee, the Corporate Governance Committee and the Compensation Committee.

Audit Committee

The Audit Committee is presently comprised of three independent directors within the meaning of National Instrument 52-110 – Audit Committees . The current members of the Committee are Norman Daitchman, David Martz and Michael Pesner. Mr. Daitchman is the Chair of the Audit Committee. The Audit Committee met five times during the financial year ended January 28, 2017. The primary responsibilities of the Committee are to review and monitor the Corporation's accounting policies and financial controls, its financial statement presentation, the Corporation's ongoing financial disclosure and the Corporation's principal business risks. The members of the audit

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committee consult with Ernst & Young LLP, the Corporation's external auditors, as they believe is appropriate in the course of a given year.

Additional Audit Committee information is set forth under the section "Audit Committee" of the Corporation's annual information form dated April 28, 2017, a copy of which is available on SEDAR at www.sedar.com.

Corporate Governance Committee

The current members of the Corporate Governance Committee are David Martz, Norman Daitchman and Michael Pesner, all of whom are independent directors within the meaning of National Instrument 52-110 – Audit Committees . Mr. Pesner is the Chair of the Corporate Governance Committee. During the financial year ended January 28, 2017, the Corporate Governance Committee met four times on a formal basis, independent of management and the other directors of the Corporation. In addition, it met informally following each board meeting. The principal function of the Corporate Governance Committee is to address matters of corporate governance as contemplated by the Guidelines and as otherwise may be required due to the operations of the Corporation. At each of the meetings of the Corporate Governance Committee during the most recently completed financial year, all the members met to discuss matters of interest to the Corporation in addition to the subject matter of the Committee meetings.

Compensation Committee

The current members of the Compensation Committee are David Martz, Norman Daitchman and Michael Pesner, all of whom are independent directors. Mr. Martz is the Chair of the Compensation Committee. The Compensation Committee met three times, in camera and then with senior management, during the financial year ended January 28, 2017. The principal function of the Compensation Committee is to review and approve the compensation of the senior management of the Corporation (for this purpose senior management includes all vice president positions and above), to review management's development of the compensation philosophy and then to independently monitor the Corporation's compensation systems and practices to ensure they encourage and reward behaviour which supports the achievement of the Corporation's strategic goals. The Compensation Committee also makes recommendations to the Board as to which directors and fulltime employees should be granted stock options pursuant to the Plan. Further information with respect to the Compensation Committee is provided under the heading "Composition of the Compensation Committee" on page 17 of this Circular.

Shareholder Communications

All communications from shareholders and any other communication out of the ordinary course of business are referred to the Chief Executive Officer or President of the Corporation, who either handle the inquiry themselves or coordinate the appropriate response which may include bringing the matter to the attention of the Board on a timely basis.

APPROVAL OF DIRECTORS

The contents of this Circular and the sending thereof have been approved by the Board.

DATED at Montreal, Québec, on June 7, 2017.

(signed) Emilia Di Raddo EMILIA DI RADDO, CPA, CA President

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SCHEDULE A

CORPORATE GOVERNANCE PRACTICES

This Schedule provides a detailed comparison of the Corporation's governance practices with the Guidelines. All capitalized terms used but not defined in this Schedule shall have the meanings ascribed thereto in the Circular.

GOVERNANCE DISCLOSURE GUIDELINE THE CORPORATION'S GOVERNANCE UNDER NI 58-101 PROCEDURES A. Directors 1. The board should have a majority of Of the six directors currently serving on the Board, all of independent directors. whom are standing for re-election, three are considered independent within the meaning of National Instrument 52-110 – Audit Committees , namely, Norman Daitchman, David Martz and Michael Pesner. Herschel H. Segal, President of 8780625 Canada Inc. and 125387 Canada Inc., affiliated holding companies of the Corporation, is not an independent director. Jane Silverstone Segal, Chairman of the Board and Chief Executive Officer of the Corporation, and Emilia Di Raddo, President of the Corporation, are not independent directors either as they are members of the management of the Corporation.

Norman Daitchman, David Martz and Michael Pesner are independent directors as none is a member of the management of the Corporation and none has a direct or indirect material relationship with the Corporation.

The current majority of the Board is not independent directors. At the present time, however, the Board is of the view that it will be able to operate objectively and in the best interests of the Corporation. To facilitate its exercise of independent judgement in carrying out its responsibilities, the following structures and processes are in place: the Board has a Lead Director who is independent, the committees of the Board are comprised solely of independent directors, in camera sessions are held without certain members of the Board who are also members of management in attendance at each Board and committee meeting and the independent directors meet following such meetings.

A record of attendance of each director at Board meetings held since the beginning of the Corporation's most recently completed financial year is included on page 7 of the Circular.

If a director is presently a director of any other reporting issuer, identify both the director and the other issuer.

Michael Pesner currently holds a position of director with respect to the following reporting issuers: Richmont Mines Inc., Quest Rare Minerals Ltd. and Smart Employee Benefits Inc. Emilia Di Raddo and Herschel H. Segal both currently sit on the board of directors of DAVIDsTEA INC.

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GOVERNANCE DISCLOSURE GUIDELINE UNDERNI 58-101	THECORPORATION'S GOVERNANCE PROCEDURES
3. The chair of the board should be an independent director.	Mrs. Jane Silverstone Segal serves as Chairman of the Board but is not independent within the meaning of National Instrument 52-110 –Audit Committees. Accordingly, the Board has appointed an independent director, Mr. Michael Pesner, as Lead Director on April 12, 2013. The Board is of the opinion that Mr. Pesner does not have a material relationship with the Corporation that could interfere with the exercise of his independent judgment. The Lead Director has the authority to convene meetings of the outside directors of the Corporation or to engage an outside adviser at the expense of the Corporation if and when appropriate or when requested to do so by any director of the Corporation.
4. The independent directors should hold regularly scheduled meetings at which non- independent directors and members of management are not in attendance.	From time to time and as required, meetings of the Board are held without certain members of the Board who are also members of management in attendance. The independent directors meet informally following Board meetings.
B. Mandate of the Board of Directors
5. The board should adopt a written mandate in which it explicitly acknowledges responsibility for the stewardship of the issuer. C. Position Descriptions	The Board has explicitly assumed responsibility for the stewardship of the Corporation in a formal Board of Directors Mandate, which was adopted on May 16, 2006. This mandate, as amended, is attached hereto as Schedule B.
6. The board should develop clear position descriptions for the chair of the board and the chair of each board committee. In addition, the board should develop a clear position description for the president and CEO. The board should also develop or approve the goals and objectives that the president and CEO must meet. D. Orientation and Continuing Education	Position descriptions for the CEO, the Chairman of the Board and the Chair of each committee have been adopted by the Board. The Board of Directors Mandate, along with the charters of the committees, set forth the roles and responsibilities of the Board, the Lead Director and the committees of the Board, and guide the Chairman of the Board, the Lead Director and the Chairs of each committee in discharging their own responsibilities. The Board also periodically discusses with the CEO her role and responsibilities, as well as her goals and objectives.
7. The board should ensure that all new directors receive a comprehensive orientation. All new directors should understand the nature and operation of the issuer's business and the role of the board, its committee and its directors. The board should provide continuing education opportunities for all directors.	The Corporate Governance Committee has the mandate to consider the appropriateness of implementing, from time to time and as appropriate, orientation and continuing education for directors. Directors receive comprehensive packages prior to each Board meeting and certain committee meetings, and are regularly briefed by management on the business and activities of the Corporation.

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GOVERNANCE DISCLOSURE GUIDELINE UNDERNI 58-101	THECORPORATION'S GOVERNANCE PROCEDURES
	Management individuals, other than senior management, are, from time to time, invited to attend committee meetings to assist the directors in acquiring a deeper understanding of the affairs of the Corporation.

E. Ethical Business Conduct

The board should adopt a written code of business conduct and ethics. The code should be applicable to directors, officers and employees of the issuer.

The Corporation has adopted a written code of conduct. This code is available through SEDAR at www.sedar.com. All directors, officers and employees of the Corporation are provided with a copy of the code of conduct.

The board should be responsible for monitoring compliance with the code. Any waivers from the code that are granted for the benefit of the issuer's directors or executive officers should be granted by the board (or a board committee) only.

The Corporate Governance Committee monitors compliance with the Corporation's code of conduct. The Board has not granted any waiver from the code of conduct in favour of any director or executive officer of the Corporation in the financial year ended January 28, 2017. The Audit Committee is charged with the oversight of the Corporation's whistle-blowing policy and loss prevention program, which are closely allied to code of conduct matters.

The Audit Committee receives regular reports relating to any whistle-blowing activity and developments in the area of loss prevention. The Audit Committee periodically invites the director of the loss prevention department and the director of human resources to address it at length.

The Corporate Governance Committee has resolved to encourage more direct reports from management individuals.

The board must ensure that directors exercise independent judgment in considering transactions and agreements in respect of which a director or executive officer has a material interest.

The code of conduct of the Corporation provides that each employee of the Corporation must avoid any conflict, or perception of conflict, between his or her personal interests and the interests of the Corporation in transacting the Corporation's business. In the context of their fiduciary duties, directors must adhere to the same standards. All actions and decisions by employees in the performance of work must be based on impartial and objective assessments of the Corporation's interests in the situation, without regard to any matter that could affect (or be seen by others to possibly affect) their judgment.

The code of conduct also provides that no employee shall have any business relations of any kind with, or any interest, financial or otherwise, (except as a passive investor of a publicly traded company) in, or work for any person, firm or company which has or seeks to have business relations with the Corporation or any of its subsidiaries or which is engaged in any business which is directly or indirectly competitive with the business of the Corporation or any of its subsidiaries.

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GOVERNANCE DISCLOSURE GUIDELINE UNDER NI 58-101

The board must take steps to encourage and promote a culture of ethical business conduct.

THE CORPORATION'S GOVERNANCE PROCEDURES

The Board is committed to encouraging and promoting a culture of ethical business conduct and integrity throughout the Corporation. In order to achieve this objective, significant efforts are made to the implementation, monitoring and enforcement of the Corporation's code of conduct. In this respect, the code of conduct specifically provides that employees have an obligation to immediately disclose any breach of the code of conduct.

F. Nomination of Directors

The board should appoint a nominating committee composed entirely of independent directors.

The Corporate Governance Committee is responsible for identifying nominees to the Board for election as directors. The Corporate Governance Committee is composed entirely of independent directors.

The Corporate Governance Committee periodically has discussions concerning the skill sets required to ensure both appropriate Board succession and new categories of skill and experience required in a changing retail environment. At the same time, it is cognizant of the importance of restricting the size of the Board.

The nominating committee should have a written charter that clearly establishes the committee's purpose, responsibilities, powers, member qualifications, member appointment and removal, structure, operations and manner of reporting to the board. In addition, the nominating committee should be given authority to engage and compensate any outside advisor that it determines to be necessary to permit it to carry out its duties.
Prior to nominating or appointing individuals as directors, the board should adopt a process involving the following steps: consider what competencies and skills the board, as a whole, should possess and assess what competencies and skills each existing director possesses.

The Board has adopted a charter of the Corporate Governance Committee which clearly establishes the Corporate Governance Committee's purpose, responsibilities, powers, member qualifications, member appointment and removal, structure, operations and manner of reporting to the Board. The charter also provides authority to the Corporate Governance Committee to engage an outside advisor, if necessary, with the approval of the Audit Committee.

The Board is composed of directors with a variety of backgrounds, skills and experience. The Corporate Governance Committee is responsible for identifying and recommending to the Board individuals qualified to become Board members.

From time to time and as appropriate, the Corporate Governance Committee reviews the credentials of nominees to the Board, and assesses the existing strengths of the Board as well as the changing needs of the Corporation, to determine which individuals possess the competencies and skills it should seek in new Board members to add value to the Corporation.

As indicated above, the Corporate Governance Committee has had discussions concerning the skill sets required to ensure both appropriate Board succession and new categories of skill and experience required in a changing retail environment. At the same time it is cognizant of the importance of restricting the size of the Board.

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GOVERNANCE DISCLOSURE GUIDELINE UNDER NI 58-101

The board should also consider the appropriate size of the board, with a view to facilitating effective decision-making by the board.

THE CORPORATION'S GOVERNANCE PROCEDURES

The Board presently consists of six directors (all of whom are standing for re-election) with a variety of backgrounds. Its size and composition are subject to periodic review of the Corporate Governance Committee.

The Corporate Governance Committee did not seek, interview or recommend the naming of any new directors over the course of the financial year.

The nominating committee should be responsible for identifying individuals qualified to become new board members and recommending to the board the new director nominees for the next annual meeting of shareholders.
In making its recommendations, the nominating committee should consider the competencies and skills that the board considers to be necessary for the board, as a whole, to possess and those that the board considers each existing director and new nominee to possess.

The Corporate Governance Committee is responsible for identifying nominees to the Board for election as directors and for filling director vacancies.

In making recommendations with respect to nominees, the Corporate Governance Committee considers whether the composition of the Board is such that the necessary competencies and skills are represented on the Board and that the nominees can carry out the Board of Directors Mandate and add value to the Corporation.

The Committee has had discussions concerning the skill sets required to ensure both appropriate Board succession and new categories of skills and experience required in a changing retail environment. At the same time, it is cognizant of the importance of restricting the size of the Board.

G. Compensation

The board should appoint a compensation committee composed entirely of independent directors.
The compensation committee should have a written charter that establishes the committee's purpose, responsibilities, powers, member qualifications, member appointment and removal, structure, operations and the manner of reporting to the board. In addition, the compensation committee should be given authority to engage and compensate any outside advisor that it determines to be necessary to permit it to carry out its duties.

The Compensation Committee is responsible for assisting the Board in discharging its oversight responsibilities relating to executive compensation. The Compensation Committee is composed entirely of independent directors.

The Board has adopted a charter of the Compensation Committee which clearly establishes the Compensation Committee's purpose, responsibilities, powers, member qualifications, member appointment and removal, structure, operations and manner of reporting to the Board. The charter also provides authority to the Compensation Committee to engage an outside advisor, if necessary. However, individual members of the Committee shall not be authorized to retain outside counsel or any other advisors at the expense of the Corporation without the prior consent of the Audit Committee.

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GOVERNANCE DISCLOSURE GUIDELINE THE CORPORATION'S GOVERNANCE UNDER NI 58-101 PROCEDURES The Compensation Committee is responsible for for: reviewing and approving reviewing and recommending to the Board the levels of compensation of the CEO and the officers reporting to evaluating the CEO's the CEO as well as reviewing the objectives of the CEO and assessing her performance in respect of such and determining (or making objectives. The Compensation Committee is also responsible for reviewing the adequacy and forms of compensation, director compensation and the review of the executive compensation disclosure of the issuer.

The compensation committee should be responsible for: reviewing and approving corporate goals and objectives relevant to CEO compensation, evaluating the CEO's performance in light of those corporate goals and objectives, and determining (or making recommendations to the board with respect to) the CEO's compensation level based on this evaluation; making recommendations to the board with respect to non-CEO officer and director compensation, incentive-compensation plans and equity-based plans and reviewing executive compensation disclosure before the issuer publicly discloses this information.
If a compensation consultant or advisor has, at any time since the beginning of the issuer's most recently completed financial year, been retained to assist in determining compensation for any of the issuer's directors and officers, disclose the identity of the consultant or advisor and briefly summarize the mandate for which they have been retained. If the consultant or advisor has been retained to perform any other work for the issuer, state that fact and briefly describe the nature of the work.

A compensation consultant or advisor has not been retained since the beginning of the Corporation's most recently completed financial year.

H. Other Board Committees

Identify the standing committees of the board other than the audit, nominating and compensation committees, and describe their function.

The Board has a Corporate Governance Committee described in detail at page 22 of this Circular.

I. Assessments

The board, its committees and each individual director should be regularly assessed regarding his, her or its effectiveness and contribution.

The Corporate Governance Committee has the mandate, explicitly documented in its Charter, to implement a process for assessing the effectiveness of the Board, its committees and individual directors.

The Board and the Corporate Governance Committee have put in place a process for periodically assessing the effectiveness and performance of the Board, Board committees and individual directors now composing the Board.

First, the assessment process provides for the circulation of a survey to each director. Such survey covers a wide range of issues and allow for comments and suggestions regarding corporate governance and the effectiveness and performance of the Board, Board committees and individual directors.

Second, the assessment process provides for individual meetings between the Chair of the Corporate

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GOVERNANCE DISCLOSURE GUIDELINE THE CORPORATION'S GOVERNANCE UNDER NI 58-101 PROCEDURES Governance Committee and each director. Such meetings allow individual directors to discuss corporate governance and the effectiveness and performance of the Board, Board committees and individual directors.

The next assessment of the effectiveness and performance of the Board, Board committees and individual directors composing the Board is expected to take place by the end of the fiscal year ending January 27, 2018.

J. Director Term Limits and Other Mechanisms of Board Renewal

The Board should adopt and describe, if any, term limits for its directors or other mechanisms of Board renewal.

If the Board has not adopted director term limits or other mechanisms of Board renewal, it should disclose why it has not done so.

The Corporation does not have a policy that limits the term of the directors on its board and has not provided other mechanisms of board renewal. The Board has determined that the term limit of the director's mandate or the mandatory retirement age is not essential.

At this time, the directors who sit on the Corporation's Board of Directors have held their office for:

1 to 5 years = 1 director
6 to 15 years = 2 directors
16 years and more = 3 directors

K. Policies Regarding the Representation of Women on the Board

The Board should have a written policy relating to the identification and nomination of women directors. If so, it should disclose, with respect to such policy, (i) a short summary of its objectives and key provisions, (ii) the measures taken to ensure that the policy has been effectively implemented, (iii) annual and cumulative progress in achieving the objectives of the policy, and (iv) whether, and, if so, how the Board measures the effectiveness of the policy.

If the Board has not adopted such a policy, it should disclose why it has not done so.

The Corporation does not have any written policy regarding the identification and nomination of women directors. See Heading F "Nomination of Directors" starting on page A-4 of this Circular for a description of the process adhered to by the Corporation to select director nominees.

The Corporate Governance Committee has had discussions concerning the skill sets required to ensure both appropriate Board succession and new categories of skill and experience required in a changing retail environment. At the same time, it is cognizant of the importance of restricting the size of the Board.

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GOVERNANCE DISCLOSURE GUIDELINE THECORPORATION'S GOVERNANCE
UNDERNI 58-101 PROCEDURES

L. Consideration of the Representation of Women in the Director Identification and Selection Process

26. The Board should consider the level of
representation of women on the Board in
identifying candidates for election or re-election
to the Board. If the Board does not, it should
disclose the reasons for not doing so.

The Corporate Governance Committee does not
specifically consider the level of representation of
women on the Board in identifying and nominating
candidates for election or re-election to the Board. In
identifying and nominating candidates for election or re-
election to the Board, the Corporate Governance
Committee focuses on actual and potential contribution
in terms of performance, competence, collaboration and
professional accountability. However, the Corporation's
view is that a diverse range of candidates should always
be considered and there are no conscious or unconscious
biases that might discriminate against or for any
candidates.

M. Consideration Given to the Representation of Women in Executive Officer Appointments
The Board should consider the level of The Board does not specifically consider the level of representation of women in executive officer representation of women in executive officer positions positions when making executive officer when making executive officer appointments. As appointments. If the Board does not, it should previously mentioned, the Corporation focuses on actual disclose the reasons for not doing so. and potential contribution in terms of performance, competence, collaboration and professional accountability. However, in order to garner the full benefits of diversity, including the availability of the widest pool of available talent, hiring practices are reviewed to ensure they are appropriately structured so that a diverse range of candidates are considered and that there are no conscious or unconscious biases that might discriminate against or for any candidates.

N. Targets Regarding the Representation of Women on the Board and in Executive Officer Positions

The Board should have a target regarding The Corporation has not adopted targets regarding women on the Board and regarding women in women on the Board or in its executive officer executive officer positions. If so, it should positions. disclose the target and the annual and cumulative progress in achieving the target. If the Board has not adopted such targets, it should disclose why it has not done so.

O. Number of Women on the Board and in Executive Officer Positions

The number and proportion (in percentage As at June 7, 2017, there are two women (33%) on the terms) of directors on the Board and of executive Board. If all of the directors nominated by management officers who are women should be disclosed. are elected at the Meeting, the Board would include two women (33%). As of June 7, 2017, there are 12 executive officers of the Corporation, of which eight are women (66.7%).

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SCHEDULE B

LE CHÂTEAU INC.

BOARD OF DIRECTORS MANDATE

1. MANDATE

1.1. Mandate - In adopting this Mandate, the Board explicitly assumes responsibility for the stewardship of the Corporation, as contemplated by the Canadian securities regulators' governance standards.

2. DEFINITIONS

2.1. Definitions - In this Mandate:

(a) " Articles " means the articles of incorporation of the Corporation, as amended from time to time;
(b) " Board " means the board of Directors of the Corporation;
(c) " Chair " means the chairperson of the board of Directors;
(d) " CEO " means the Chief Executive Officer of the Corporation;
(e) " Corporation " means Le Château Inc.;
(f) " Director " means a director of the Corporation;
(g) " Independent Director " means a Director that is independent within the meaning of section 1.4 of National Instrument 52-110 - Audit Committees ;
(h) " Mandate " means this mandate, as amended from time to time.

3. BOARD MEMBERSHIP

3.1. Number of Members - The Board shall consist of such number of Directors as the Board may determine from time to time, provided that such number shall be within the minimum and maximum number of Directors set out in the Articles.
3.2. Independence of Members -
(a) At least one quarter of the Directors shall be resident Canadians.
(b) A majority of the Directors shall be Independent Directors.
3.3. Nomination and Appointment of Directors -
(a) The Board shall nominate individuals for election as Directors by the shareholders and shall require the Corporate Governance Committee to make recommendations to it with respect to such nominations.
(b) In selecting candidates for nomination as Directors, the Board shall:
- (i) consider what competencies and skills the Board, as a whole, should possess; and
- (ii) assess what competencies and skills each existing Director possesses.

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(c) The Board shall consider recommendations made to it by the Corporate Governance Committee with respect to the size and composition of the Board.
3.4. Election and Appointment of Directors - Directors shall be elected by the shareholders at each annual meeting of shareholders or at such times, in such manner and for such term as the Articles may prescribe, provided that notwithstanding the expiry of his or her term, each Director shall remain in office until he or she is re-elected, replaced or removed.
3.5. Vacancy - The Board may appoint a Director to fill a vacancy which occurs in the Board between annual elections of Directors to the extent permitted by the Articles.
3.6. Removal of Members - Any Director may be removed from office by an ordinary resolution of the shareholders at a special meeting of shareholders.
3.7. Additional Directors - In addition to filling vacancies on the board, the Directors may at any time, without exceeding the number of Directors provided by the Articles, appoint one or more additional Directors who shall hold office for a term expiring not later than the close of the next annual meeting of shareholders, provided that the total number of Directors so appointed may not exceed one-third (1/3) of the number of Directors elected at the previous annual meeting of shareholders.

4. BOARD CHAIR

4.1. Board to appoint Chair - The Chair shall be an Independent Director, failing which a lead Director will be appointed.
4.2. Chair to be Appointed Annually - The Board shall appoint the Chair annually at the first meeting of the Board after a meeting of the members at which Directors are elected. If the Board does not so appoint a Chair, the Director who is then serving as Chair shall continue as Chair until his or her successor is appointed.

5. MEETINGS OF THE BOARD

5.1. Time and Place of Meetings - Meetings of the Board shall be held from time to time and at such place as the Board, the Chair, the chairperson of the executive committee of the Board (if such a committee is constituted), the president or any two Directors may determine.
5.2. Frequency of Board Meetings - Subject to the Articles, the Board shall meet at least four times per year on a quarterly basis.
5.3. Quorum - Unless otherwise fixed in the Articles, a quorum of the Board shall be a majority of Directors.
5.4. Secretary - The Board shall appoint a person who may, but need not, be a member of the Board, to be secretary and who shall attend and be the secretary of all meetings of the Board, shareholders and committees of the Board.
5.5. Right to Vote - Each Director shall have the right to vote on matters that come before the Board unless precluded by the Articles.
5.6. Invitees - The Board may invite officers and employees of the Corporation or any other person to attend meetings of the Board to assist in the discussion and examination of the matters under consideration by the Board.
5.7. Meeting of Independent Directors - The Independent Directors shall, as appropriate and from time to time, have meetings at which certain or all of the members of management are not present.

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5.8. Board Material Distribution - Information and materials that are important to the Board's understanding of the agenda items and related topics shall be distributed in advance of Board meetings. Management will deliver information on the business, operations and finances of the Corporation to the Board on an as required basis.
5.9. Attendance and Preparedness - Directors are expected to attend regularly scheduled meetings of the Board and of the shareholders and to have prepared for the meetings by, at a minimum, reviewing in advance of the meeting the materials delivered in connection with the meeting. The attendance record of individual directors at meetings of the Board will be disclosed in the Corporation's information circular.

6. OUTSIDE ADVISORS

6.1. Retaining and Compensating Advisors - Each Director shall have the authority to retain outside counsel and any other external advisors as appropriate with the approval of the Audit Committee.

7. REMUNERATION OF BOARD MEMBERS

7.1. Remuneration - Members of the Board and the chairperson shall receive such remuneration for their service on the Board as the Board may determine from time to time.

8. DELEGATION OF DUTIES

8.1. Delegation to Committees - The Board may establish and delegate to committees of the Corporation any duties and responsibilities of the Board which the Board is not prohibited by law from delegating. However, no committee of the Board shall have the authority to make decisions which bind the Corporation, except to the extent that such authority has been specifically delegated to such committee by the Board.
8.2. Delegation to Committees -
(a) The Board shall establish and maintain, notably, the following committees of the Board, each having mandates that incorporate all applicable legal and stock exchange listing requirements and with such recommendations of relevant securities regulatory authorities and stock exchanges as the Board may consider appropriate:
- (i) Audit Committee;
- (ii) Compensation Committee; and
- (iii) Corporate Governance Committee (which shall also serve as Nominating Committee).
(b) Subject to the Articles, the Board may appoint any other committee of the Board and delegate to such committee any of the powers of the Board.
8.3. Composition of Committees - The Board will appoint and maintain in office members of each of its committees such that the composition of each such committee is in compliance with all applicable legal and stock exchange listing requirements and with such recommendations of relevant securities regulatory authorities and stock exchanges as the Board may consider appropriate and shall require the Corporate Governance Committee to make recommendations to it with respect to such matters.
8.4. Review of Charters - The Board will review the charters and the composition of each of its committees on a regular basis and will revise those charters or amend the composition of its committees as it considers appropriate and shall require the Corporate Governance Committee to make recommendations to it with respect to such matters.

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8.5. Delegation to Management - Subject to the Articles, the Board may appoint officers, specify their duties and delegate to them powers to manage the business and affairs of the Corporation.
8.6. Oversight - The Board retains responsibility for oversight of any matters delegated to any committee of the Board or to management.
8.7. Residual Authority - The Board retains responsibility for any matter that has not been delegated to management or to a committee of the Board.

9. DUTIES AND RESPONSIBILITIES OF THE BOARD

Responsibility for Specific Matters

9.1. Responsibility for Specific Matters - The Board explicitly assumes responsibility for the matters set out in this Mandate, and specifically those matters set out below, recognizing that these matters represent in part responsibilities reflected in requirements and recommendations adopted by applicable securities regulators and the stock exchanges and do not limit the Board's overall stewardship responsibility or its responsibility to manage the affairs of the Corporation.
9.2. Delegation to Committees - Whether or not specific reference is made to committees of the Board in connection with any of the matters referred to below, the Board may direct any committee of the Board to consider such matters and to report and make recommendations to the Board with respect to these matters.

Corporate Governance Generally

9.3. Corporate Governance Matters -
(a) Corporate Governance Guidelines. The Board shall adopt and maintain corporate governance guidelines recommended to it by the Corporate Governance Committee and which comply with all applicable legal and stock exchange listing requirements and with such recommendations of relevant securities regulatory authorities and stock exchanges as the Board may consider appropriate.
(b) Corporate Governance Disclosure. The Board shall review all material disclosure with respect to the Corporation's system of corporate governance and the operation of its system of governance required by the Canadian securities regulators, as submitted to it by its Corporate Governance Committee.

Responsibilities Relating to Management

9.4. Integrity of Management - The Board shall, to the extent feasible, satisfy itself:
(a) as to the integrity of the CEO and other senior officers; and
(b) that the CEO and other senior officers create a culture of integrity throughout the organization.
9.5. Succession Planning - The Board shall be responsible for succession planning, including appointing, training and monitoring senior management.
9.6. Executive Compensation Policy -
(a) Executive Compensation Policy. The Board shall review the executive compensation policy submitted to it by the Compensation Committee as well as the overall structure of the Corporation's total compensation strategy, including the elements of the Corporation's annual and

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long-term incentive plans, including plan design, performance targets, administration and total funds/shares reserved for payments.

(b) Board Approval. The Board shall approve the compensation of the CEO in light of the performance assessment by the Compensation Committee and shall consider and, if appropriate, approve the recommendations of the CEO with respect to the compensation of other members of senior management.
(c) Delegation to Compensation Committee. The Board may direct the Compensation Committee to consider the matters contemplated in Sections 9.4, 9.5 and 9.6 of this Mandate and to report and make recommendations to the Board with respect to these matters.
9.7. Organizational Responsibilities - The Board shall review and approve as appropriate:
(a) appointments for all mission critical positions (as such positions are defined by the Compensation Committee from time to time) and compensation packages for such appointments;
(b) the report on executive compensation that is required to be included in the Corporation's management information circular;
(c) and shall require the Compensation Committee to make recommendations to it with respect to such matters.

Oversight of Operation of Business

9.8. Risk Management - Taking into account the reports of management and such other persons as the Board may consider appropriate, the Board shall identify the principal risks of the Corporation's business and satisfy itself as to the implementation of appropriate systems to manage these risks.
9.9. Strategic Planning Process - The Board shall adopt a strategic planning process and shall approve, on a periodic basis, a strategic plan which takes into account, among other things, the opportunities and risks of the Corporation's business.
9.10. Internal Control and Management Information Systems - The Board shall review the reports of management and the Audit Committee concerning the integrity of the Corporation's internal control and management information systems. Where appropriate, the Board shall require management and the Audit Committee to implement changes to such systems to ensure integrity of such systems.
9.11. Communications Policy - The Board shall review and, if determined appropriate, approve a communication policy for the Corporation for communicating with shareholders, the investment community, the media, governments and their agencies, employees and the general public. The Board shall consider, among other things, the recommendations of management and the Corporate Governance Committee with respect to this policy.
9.12. Disclosure and Share Trading Policy - The Board shall review and, if determined appropriate, approve a disclosure and share trading policy for the Corporation which will deal with the disclosure by the Corporation to the public of material information and set standards for share trading by insiders of the Corporation. The Board shall consider, among other things, the recommendations of management and the Corporate Governance Committee with respect to this policy.
9.13. Financial Statements - The Board shall review the recommendation of the Audit Committee with respect to the annual and interim financial statements of Corporation to be delivered to shareholders. The Board shall approve such financial statements.

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9.14. Pension Plan Matters - Should the Corporation put in place any pension plans, the Board shall receive and review reports from management and from the Compensation Committee covering administration, investment performance, funding, financial impact, actuarial reports and other pension plan related matters regarding any such plans.
9.15. Conflict of Interest Policy and Code of Conduct - The Board will review and approve a Conflict of Interest Policy and Code of Conduct for the Corporation. In adopting this code, the Board will consider the recommendations of the Corporate Governance Committee concerning its compliance with applicable legal and stock exchange listing requirements and with such recommendations of relevant securities regulatory authorities and stock exchanges as the Board may consider appropriate.
9.16. Compliance and Disclosure - The Board will direct the Corporate Governance Committee to monitor compliance with the Conflict of Interest Policy and Code of Conduct and recommend disclosures with respect thereto. The Board will consider any report of the Corporate Governance Committee concerning these matters, and will approve, if determined appropriate, the disclosure of the Conflict of Interest Policy and Code of Conduct and of any waiver granted to a Director or senior officer of the Corporation from complying with the Conflict of Interest Policy and Code of Conduct.
9.17. Significant Decisions - The Board shall require management to obtain its approval for all significant decisions, including major financings, acquisitions, dispositions, budgets and capital expenditures.
9.18. Information Flow from Management - The Board shall require management to keep it aware of the Corporation's performance and events affecting the Corporation's business, including opportunities in the marketplace and adverse or positive developments.
9.19. Feedback from Shareholders - The Board shall be responsible for establishing measures for receiving feedback from shareholders of the Corporation.

10. EVALUATION OF BOARD PERFORMANCE

10.1. Establish Process - The Board shall establish a process to be carried out by the Corporate Governance Committee for assessing the performance of the Board.
10.2. Amendments to Mandate - The Board will review and reassess the adequacy of its Mandate on a regular basis.

11. RESPONSIBILITIES OF THE LEAD DIRECTOR

11.1. Independence - The Lead Director shall be an Independent Director.
11.2. Chair of Meetings - The Lead Director will chair periodic meetings of the Independent Directors.
11.3. Board and Committee Agenda - The Lead Director shall provide input to the Chair on preparation of agendas for Board and committee meetings.
11.4. Reporting to Board - The Lead Director shall report to the Board concerning the deliberations of the Independent Directors as required.
11.5. Interaction Flow with Management - The Lead Director shall, in conjunction with the Chair, facilitate the effective and transparent interaction of Board members and management.

12. INTERPRETATION

12.1. Interpretation - The provisions of this mandate shall at all times be subject to the provisions of the Articles.

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SCHEDULE C

LE CHÂTEAU INC. (the "Corporation")

RESOLUTION RELATING TO THE INCENTIVE STOCK OPTION PLAN

WHEREAS the board of directors of the Corporation (the " Board ") adopted on May 2, 1984 an incentive stock option plan which has been amended most recently on December 22, 2016 and June 7, 2017 (the " Plan ") which does not have a fixed maximum number of Class B Shares issuable;

WHEREAS the rules of the TSX Venture Exchange provide that all "rolling plans" such as the Plan must be approved by the shareholders when instituted and every year thereafter;

NOW THEREFORE BE IT RESOLVED THAT :

The Plan, in the form attached as Exhibit A to the management information circular of the Corporation dated June 7, 2017, which provides for the rolling grant of options to acquire up to 10% of the number of issued and outstanding Class B Shares of the Corporation, be and the same is hereby confirmed, ratified and approved; and
Any director or officer of the Corporation be and is hereby authorized to do such things and to sign, execute and deliver all documents that such director and officer may, in their discretion, determined to be necessary in order to give full effect to the intent and purpose of this resolution.

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EXHIBIT A AMENDED AND RESTATED INCENTIVE STOCK OPTION PLAN

(See attached)

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LE CHÂTEAU INC.

AMENDED AND RESTATED STOCK OPTION PLAN

SECTION I - PURPOSE OF THE PLAN

1.1 The purpose of this Stock Option Plan (the " Plan ") is to provide key employees, directors, consultants and service providers of Le Château Inc. (" Château ") and its subsidiaries (Château and its subsidiaries, present and future, being hereinafter referred to as the " Company ") with a proprietary interest through the granting of options to purchase shares of Château subject to certain conditions, as hereinafter set forth, for the following purposes:

1.1.1 to increase the interest in the Company's welfare of those key employees and directors who share primary responsibility for the management, growth and protection of the business of the Company;
1.1.2 to furnish an incentive to employees, directors, consultants and service providers to continue their services for the Company; and
1.1.3 to provide a means through which the Company may attract able persons to enter its employment, join its board of directors and provide services.

1.2 For the purposes of the Plan, a subsidiary of Château shall be any corporation (other than Château) in an unbroken chain of corporations beginning with Château if, at the time of the granting of the option hereunder, each of the corporations other than the last corporation in the unbroken chain owns stock to which are attached more than fifty percent (50%) of the aggregate voting rights attached to all classes of stock in one of the other corporations in such chain.

SECTION II - ADMINISTRATION OF THE PLAN

2.1 The Plan shall be administered by a committee of three members of the Board of Directors of Château, two of whom shall be appointed by the Board and shall not be eligible to participate in the Plan and the third of whom shall be the President of Château. Until such committee is constituted, the Plan shall be administered by the Board of Directors of Château.

2.2 The members of the committee contemplated hereinabove shall serve at the pleasure of the Board of Directors of Château and vacancies occurring in the committee shall be filled by the Board of Directors of Château.

2.3 The Board of Directors of Château (or the committee, as the case may be) may, from time to time, adopt, amend and rescind rules and regulations for carrying out the provisions and purposes of the Plan. The interpretation, construction and application of the Plan and any provisions thereof made by the Board of Directors of Château or the committee, as the case may be, shall be final and binding. No director or member of the committee shall be liable for any

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action taken or for any determination made in good faith in the administration, interpretation, construction or application of the Plan.

SECTION III - GRANTING OF OPTIONS

3.1 The Board of Directors of Château (or the committee, as the case may be) may from time to time designate directors, employees, consultants and service providers of the Company to whom options to purchase Class B Voting Shares of Château may be granted, and the number of shares to be optioned to each, provided that the maximum number of shares issuable upon the exercise of options granted under the Plan, at any given time, is not more than 10 % of the aggregate number of Class B Voting Shares issued and outstanding from time to time.

3.2 The aggregate number of Class B Voting Shares issuable at any time to insiders of Château under the Plan and all other security based compensation arrangements of Château may not exceed 10% of the aggregate number of Class B Voting Shares issued and outstanding from time to time.

3.3 The grant to insiders (as a group), within a 12 month period, of an aggregate number of options may not exceed 10% of the aggregate number of Class B Voting Shares issued and outstanding from time to time, calculated at the date an option is granted to any insider.

3.4 The aggregate number of options granted to any one person (and any companies that are wholly owned by that person) within a 12 month period must not exceed 5% of the aggregate number of Class B Voting Shares issued and outstanding from time to time, calculated at the date an option is granted is granted to the person.

3.5 The aggregate number of options granted to any one consultant of the Company within a 12 month period must not exceed 2% of the aggregate number of Class B Voting Shares issued and outstanding from time to time, calculated at the date an option is granted to the consultant, which limit shall be included within the option limitation prescribed by Section 3.1.

3.6 The aggregate number of options granted to all persons retained to provide Investor Relations Activities to Company must not exceed 2% of the aggregate number of Class B Voting Shares issued and outstanding from time to time, within a 12 month period, calculated at the date an option is granted to any such person, which limit shall be included within the option limitation prescribed by Section 3.1. For the purposes of this Plan, persons retained to provide Investor Relations Activities shall include any consultant that performs Investor Relations Activities and any employee or director of the Company whose role and duties primarily consist of Investor Relations Activities.

3.7 Options may only be granted by the Company pursuant to decisions of the Board of Directors of Château (or of the committee, as the case may be).

3.8 For options granted to employees or consultants of the Company or to Management Company Employees, the Company and the optionee are responsible for ensuring and confirming that such optionee is a bona fide employee, consultant or Management Company Employee, as the case may be.

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3.9 The granting of options hereunder and the obligation of Château to deliver its Class B Voting Shares pursuant hereto shall be subject to Château's obtaining, where necessary, the approval of any competent authority which may be required in connection with the granting of options hereunder or the authorization, issuance or sale of the optioned shares, and, if required, Château's having effectively listed the optioned shares on any stock exchange on which Château's Class B Voting Shares may be then listed; and Château shall use its best efforts to obtain all approvals necessary to give effect to this Plan.

3.10 All options issued and outstanding under the Plan prior to December 22, 2016 shall be deemed exercisable for Class B Voting Shares, notwithstanding the terms of such option or related agreement.

For the purposes of this Section 3 and Section 6.2, the terms " insider ", " Investor Relations Activities " and " Management Company Employee " shall have the respective meanings ascribed thereto in the TSX-V Corporate Finance Policies, as amended or supplemented from time to time (collectively, the " TSX-V Rules ").

SECTION IV - OPTION PRICE

4.1 The option price (the " Option Price ") per share of shares which are the subject of any option hereunder shall be no less than the market price (the " Market Price ") for one Class B Voting Share. For the purposes hereof, Market Price shall be calculated by reference to the reported closing sale price for the Class B Voting Shares on the TSX Venture Exchange on the last trading day before the day on which the option is granted, or, if no sale is reported on that day on such exchange, the option price shall be deemed to be the volume weighted average trading price for the Class B Voting Shares for the five days preceding the date of grant during which the Class B Voting Shares were traded on the TSX Venture Exchange. For greater certainty, options may be granted hereunder with an Option Price that is higher than the Market Price.

SECTION V - OPTIONS

5.1 Options shall be evidenced by a stock option agreement or statement in such form not inconsistent with the Plan as the Board of Directors of Château (or the committee, as the case may be) from time to time determines, provided that the substance of the following be included therein:

5.1.1 Effect of Grant

The granting of an option to a full-time employee or director shall not impose upon Château or the Company any obligation to retain the optionee in its employ, on its board of directors or as a provider of services for any period. If, however, Château or the Company should terminate such employment for cause or if the optionee is removed from office as a director or becomes disqualified from being a director by law, the option shall automatically terminate forthwith.

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5.1.2 Option Term

Subject to Section 5.1.3, the period during which an option is exercisable shall be limited to 10 years from the date the option is granted (the " Option Period ").

5.1.3 Black Out Period

If the term of an option expires during a period when the optionee is prohibited from trading in the Company's securities pursuant to a black out period imposed by the Company (a " Black Out Period ") or within 10 Business Days following the expiration of the Black Out Period, then the term of such option or the unexercised portion thereof shall be extended for 10 Business Days immediately following the expiration of the Black Out Period (the " Black Out Expiration Term ").

For the purposes of this Section 5.1.3, the term " Business Day " shall mean a weekday that is not a Canadian banking holiday.

5.1.4 Exercise of Options

Prior to its expiration or earlier termination in accordance with the Plan, each option shall be exercisable as to the whole or any portion thereof at the time or times stipulated.

5.1.5 Non-Assignability of Option Rights

No option shall be assignable or transferable by the optionee except by will or by the laws of succession of the domicile of the deceased optionee. During the life of an optionee, the option shall not be pledged, hypothecated, transferred nor assigned on pain of nullity and may be exercised only by the optionee.

5.1.6 Effect of Termination of Employment, of Service Provision or Death

5.1.6.1 Upon an optionee's employment or provision of services with or to the Company being terminated for cause or upon an optionee's being removed from office as a director or becoming disqualified from being a director by law, any option or unexercised portion thereof granted to him shall terminate forthwith.

5.1.6.2 Upon an optionee's employment or provision of services with or to the Company being terminated otherwise than by reason of death or for cause or upon an optionee's ceasing to be a director otherwise than by reason of death, removal or disqualification by law, any option or unexercised portion thereof granted to such optionee may be exercised by him for that number of shares only which he was entitled to acquire under the option pursuant to Section 5.1.4 at the time of such termination or cessation. Such option shall only be exercisable within three months after such termination or cessation or prior to the expiration of the term of the option, whichever occurs earlier.

5.1.6.3 If an optionee dies while employed by, providing services to or serving as a director of the Company, any option or unexercised portion thereof granted to such optionee may be exercised by a legatee or legatees of such option under the optionee's

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last will or by his personal representative for that number of shares only which the optionee was entitled to acquire under the option pursuant to Section 5.1.4 at the time of his death. Such option shall only be exercisable at any time within one year after the optionee's death or prior to the expiration of the term of the option, whichever occurs earlier.

5.1.6.4 If an optionee dies within three months after the termination of his employment or provision of services otherwise than for cause or within three months after ceasing to be a director otherwise than by reason of removal or disqualification by law, the legatee or legatees of the option under the optionee's last will or the optionee's personal representatives may exercise that option or any unexercised portion thereof for that number of shares and within the periods provided for in clause 5.1.6.3 hereinabove.

5.1.7 Rights as a Stockholder

The optionee shall have no rights as a shareholder with respect to any shares covered by his option until the date of issuance of a share certificate to him for such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such share certificate is issued.

5.1.8 Method of Exercise

An option granted under the Plan shall be exercisable (from time to time as provided in Section 5.1.4 hereinabove) by the optionee's giving notice in writing to Château at its registered office addressed to its Secretary, which notice shall specify the number of shares in respect of which the option is being exercised and shall be accompanied by full payment, by cash or certified cheque, of the purchase price for the number of shares specified. Upon such exercise of the option, Château shall, subject to Section 5.1.9, forthwith cause the transfer agent and registrar of Château to deliver to the optionee, within 21 days following receipt by Château of such optionee's notice of exercise of option, a certificate in the name of the optionee representing in the aggregate such number of shares as the optionee shall have then paid for and as are specified in such written notice of exercise of option.

5.1.9 Withholding

Notwithstanding anything else contained in this Plan, Château may, from time to time, implement such procedures and conditions as it determines appropriate with respect to the withholding and remittance of taxes imposed under applicable law, or the funding of related amounts for which liability may arise under such applicable law. Without limiting the generality of the foregoing, an optionee who wishes to exercise an option the shares issuable in respect of which are not to be sold on the optionee's behalf by Château must, in addition to following the procedures set out in Section 5.1.8 and elsewhere in this Plan, and as a condition of exercise:

5.1.9.1 deliver a certified cheque, wire transfer or bank draft payable to Château for the amount determined by Château to be the appropriate amount on account of such taxes or related amounts; or

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5.1.9.2 otherwise ensure, in a manner acceptable to Château (if at all) in its sole and unfettered discretion, that the amount will be securely funded;

and must in all other respects follow any related procedures and conditions imposed by Château.

In the event of an exercise pursuant to which shares issuable to the optionee are to be sold on the optionee's behalf by Château, Château shall deduct from any proceeds payable to the optionee any and all amounts necessary to satisfy Château's withholding and/or remittance obligations under applicable law.

SECTION VI - AMENDMENT OR DISCONTINUANCE OF THE PLAN

6.1 Subject to Section 6.2 and subject to regulatory approval and prior approval of the TSX Venture Exchange if the Class B Voting Shares are listed on such exchange, the Board may amend, suspend or terminate the Plan and any outstanding option granted hereunder, in whole or in part, at any time without notice to or approval by the shareholders of Château (provided that, in the case of any action taken in respect of an outstanding option, the optionee's consent to such action shall be required unless the Board determines that the action would not materially and adversely affect the optionee), for any purpose whatsoever, including without limitation for the purpose of:

6.1.1 ensuring continuing compliance with applicable laws, regulations, requirements or policies of any governmental authority;
6.1.2 eliminating any ambiguity or correcting or supplementing any provision contained herein which may be incorrect or incompatible with any other provision hereof;
6.1.3 changing the terms and conditions governing options under the Plan (other than amendments to the expiry and termination provisions applicable to options), including with respect to the vesting period, exercise method and frequency, Option Price and method of determining the Option Price, assignability and effect of termination of the optionee's employment or consulting agreement or cessation of the optionee's directorship;
6.1.4 advancing the date on which any option may be exercised, provided that the period during which an option is exercisable does not exceed 10 years from the date the option is granted, and further provided that the Board shall not, in the event of any such advancement, be under any obligation to advance the date on or by which any option may be exercised by any other optionee;
6.1.5 determining that any of the provisions hereof concerning the effect of termination of the optionee's employment or consulting agreement or cessation of the optionee's directorship, shall not apply for any reason acceptable to the Board;
6.1.6 changing the terms and conditions of any financial assistance which may be provided by Château to the optionees to facilitate the purchase of Class B Voting Shares hereunder, or adding or removing any provisions providing for such financial assistance; and

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6.1.7 providing for the granting of other kinds of awards under the Plan, including deferred or restricted share units, stock-appreciation rights and other security-based awards, whether or not involving the issuance of Class B Voting Shares from treasury.

6.2 Notwithstanding anything contained herein to the contrary, no amendment to the Plan requiring the approval of the shareholders of Château under any applicable securities laws or requirements (including without limitation the TSX-V Rules) shall become effective until such approval is obtained. In addition to the foregoing, the approval of the holders of a majority of the Class B Voting Shares present and voting in person or by proxy at a meeting of shareholders shall be required for :

6.2.1 any amendment to the provisions of this Section 8;
6.2.2 any increase in the maximum number of Class B Voting Shares issuable under the Plan (other than pursuant to Section 6.3);
6.2.3 any amendment to the limitations under the Plan on the number of options that may be granted to any one person or any category of person (such as, for example, insiders);
6.2.4 any change to the class of participants eligible to participate under the Plan;
6.2.5 any change to the manner of determining the Option Price;
6.2.6 any amendment to the expiry and termination provisions applicable to options;
6.2.7 any alteration of the Black Out Expiration Term;
6.2.8 any change to the termination provisions of an option or the Plan which does entail an extension beyond the original expiration date; and
6.2.9 any reduction in the Option Price or extension of the Option Period benefiting an insider;

provided that, in the case of an amendment referred to in Section 6.2.9 hereof, insiders of Château who benefit from such amendment are not eligible to vote their Class B Voting Shares in respect of the approval.

6.3 Notwithstanding anything contained to the contrary in the Plan, in any resolution of the Board in implementation thereof or in any option agreement with an optionee, in the event of any change in the number of issued and outstanding Class B Voting Shares of Château by reason of any stock dividend, stock split, conversion, recapitalization, merger, consolidation, combination or exchange of shares or other similar change, an equitable adjustment shall be made by the Board, in the number of Class B Voting Shares subject to outstanding options and in the Option Price of such Class B Voting Shares. Such adjustment will be definitive and mandatory for the purposes of the Plan.

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6.4 For the purposes of this Section 6, an amendment does not include an accelerated expiry of an option by reason of the fact that an optionee ceases to be a director, an officer, a consultant or an employee of Château or any of its Subsidiaries.

6.5 The Shareholders' approval of an amendment, if required pursuant to the terms hereof, shall be given by way of confirmation at a duly called meeting of the Shareholders. Options may be granted under the Plan prior to the approval of the amendment, provided that no Class B Voting Shares may be issued pursuant to the amended terms of the Plan until the Shareholders' approval of the amendment has been obtained.

6.6 Notwithstanding anything contained to the contrary in this Plan, in any resolution of the Board of Directors in implementation thereof or in any option agreement with an optionee, in the event Château proposes to amalgamate, combine or merge with any other corporation or entity (other than with a wholly-owned subsidiary of Château) whether by way of take-over bid, reverse take-over, arrangement, insider bid, going private transaction or otherwise or to liquidate, dissolve or wind up or in the event an offer to purchase the shares of Château or any part thereof shall be made to all holders of shares of Château whose last address on the records of Château is in Canada, Château may, if the Board of Directors so elect by resolution, give written notice thereof (the " Acceleration Notice ") to any optionee holding options under this Plan to permit exercise thereof of all such options, whether vested or unvested, within the 30 day period next following the date of such notice or such longer period as the Board of Directors shall deem appropriate (including, without limitation by way of extensions of any initial period). Upon the expiration of the period referred to in the preceding sentence, all rights of such optionee to exercise such options (to the extent not theretofore exercised) shall cease to have any further force or effect unless and until a further written notice from the Board of Directors is received with respect to the ability to exercise such options. Immediately and automatically upon the occurrence of the event or closing of the transaction giving rise to the Acceleration Notice, all of the options with respect to which the Acceleration Notice has been given (to the extent not theretofore exercised) shall terminate and shall be of no further force or effect whatsoever. Notwithstanding any of the foregoing, the provisions of this Section 6.6 shall not have the effect of extending the date by which any outstanding option may be exercised beyond its then existing expiry date.

SECTION VII - EFFECTIVE DATE OF PLAN

7.1 This Plan was originally adopted by the Board of Directors of Château on the 2nd day of May, 1984, and was amended and restated by the Board of Directors from time to time thereafter and as of the 7^th day of June, 2017.

By order of the Board of Directors

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AI assistant

LE CHATEAU INC. — Proxy Solicitation & Information Statement 2017

43008_rns_2017-06-15_a8744b24-c8b2-49ed-b8b0-937a52b68de9.pdf

LE CHÂTEAU INC.

MANAGEMENT INFORMATION CIRCULAR

SOLICITATION OF PROXIES

APPOINTMENT OF PROXIES

The persons named in the enclosed form of proxy are directors of the Corporation. EACH SHAREHOLDER IS ENTITLED TO APPOINT A PERSON TO REPRESENT HIM AT THE MEETING OTHER THAN THE INDIVIDUALS NAMED IN THE FORM OF PROXY ENCLOSED .

REVOCATION OF PROXIES

NON-REGISTERED HOLDERS

NOTICE-AND-ACCESS

PROXY-RELATED MATERIALS - NON-OBJECTING BENEFICIAL OWNERS

PAYMENT TO DELIVER MATERIALS TO OBJECTING BENEFICIAL OWNERS

EXERCISE OF DISCRETION OF PROXIES

IN THE ABSENCE OF SUCH DIRECTIONS, SUCH SHARES WILL BE VOTED:

SHAREHOLDER PROPOSALS FOR 2018 ANNUAL MEETING

VOTING SHARES AND PRINCIPAL HOLDERS THEREOF

QUORUM

ELECTION OF DIRECTORS

NOTES:

MAJORITY VOTING POLICY

ATTENDANCE AT BOARD AND BOARD COMMITTEE MEETINGS

COMPENSATION OF DIRECTORS

NOTE:

Outstanding Share-Based Awards and Option Based Awards

NOTE:

Value Vested or Earned on Incentive Plan Awards During the Most Recently Completed Financial Year

COMPENSATION OF EXECUTIVES

Summary Compensation Table

NOTES:

INCENTIVE PLAN AWARDS

Outstanding Share-Based Awards and Option Based Awards

NOTE:

Value Vested or Earned on Incentive Plan Awards During the Most Recently Completed Financial Year

NOTE:

INCENTIVE STOCK OPTION PLAN

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

TERMINATION AND CHANGE OF CONTROL BENEFITS

COMPOSITION OF THE COMPENSATION COMMITTEE

COMPENSATION DISCUSSION AND ANALYSIS

Executive Compensation Philosophy

Components of Compensation Program, Determination for each Component, Rationale for Amounts of each Component

Executive Compensation-Related Fees

Additional Compensation-Related Matters

Corporate Performance

PERFORMANCE GRAPH

APPOINTMENT OF AUDITORS

APPROVAL AND RATIFICATION OF THE INCENTIVE STOCK OPTION PLAN

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

ADDITIONAL INFORMATION

REPORT ON CORPORATE GOVERNANCE

Audit Committee

Corporate Governance Committee

Compensation Committee

Shareholder Communications

APPROVAL OF DIRECTORS

SCHEDULE A

CORPORATE GOVERNANCE PRACTICES

E. Ethical Business Conduct

THE CORPORATION'S GOVERNANCE PROCEDURES

F. Nomination of Directors

G. Compensation

H. Other Board Committees

I. Assessments

J. Director Term Limits and Other Mechanisms of Board Renewal

K. Policies Regarding the Representation of Women on the Board

N. Targets Regarding the Representation of Women on the Board and in Executive Officer Positions

O. Number of Women on the Board and in Executive Officer Positions

SCHEDULE B

LE CHÂTEAU INC.

BOARD OF DIRECTORS MANDATE

1. MANDATE

2. DEFINITIONS

2.1. Definitions - In this Mandate:

3. BOARD MEMBERSHIP

4. BOARD CHAIR

5. MEETINGS OF THE BOARD

6. OUTSIDE ADVISORS

7. REMUNERATION OF BOARD MEMBERS

LE CHATEAU INC. Proxy Solicitation & Information Statement 2017