SCHEDULE B ASPREVA PHARMACEUTICALS CORPORATION
Exhibit
10.36
SCHEDULE
B
ASPREVA
PHARMACEUTICALS CORPORATION
As
of July 10, 2007
X.
Xxxxxxx Xxxxxxx, Ph.D.
0000-0000
Xxxxxxx Xxxxxx
Victoria,
British Columbia
Canada
V8Z 7X8
Aspreva
Pharmaceuticals Corporation (the “Corporation”) considers it
essential to the best interests of its members to xxxxxx the continuous
employment of its senior executive officers. In this regard, the Board of
Directors of the Corporation (the “Board”) has determined that
it is in the best interests of the Corporation and its members that appropriate
steps should be taken to reinforce and encourage management’s continued
attention, dedication and availability to the Corporation in the event of a
Potential Change in Control (as defined in Section 3), without being distracted
by the uncertainties which can arise from any possible changes in control of
the
Corporation.
In
order to induce you to agree to remain in the employ of the Corporation, such
agreement evidenced by the employment agreement entered into as of the date
of
this Agreement between you and the Corporation (the “Employment
Agreement”) and in consideration of your agreement as set forth in
Section 3 below, the Corporation agrees that you shall receive and you agree
to
accept the severance and other benefits set forth in this Agreement should
your
employment with the Corporation be terminated subsequent to a Change in Control
(as defined in Section 2) in full satisfaction of any and all claims that now
exist or then may exist for remuneration, fees, salary, bonuses or severance
arising out of or in connection with your employment by the Corporation or
the
termination of your employment:
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1.
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Term
of Agreement.
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This
Agreement shall be in effect for a term commencing on the Effective Date of
the
Employment Agreement (as therein defined) and ending on the date of termination
of the Employment Agreement.
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2.
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Definitions.
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(a)
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“Affiliate”
means a corporation that is an affiliate of the Corporation under
the
Securities Act (British Columbia), as amended from time to
time.
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(b)
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“Change
in Control” of the Corporation shall be deemed to have
occurred:
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(i)
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if
a merger, amalgamation, arrangement, consolidation, reorganization
or
transfer takes place in which Equity Securities of the Corporation
possessing more than 50% of the total combined voting power of the
Corporation’s outstanding Equity Securities are acquired by a person or
persons different from the persons holding those Equity Securities
immediately prior to such transaction, and the composition of the
Board
following such transaction is such that the directors of the Corporation
prior to the transaction constitute less than 50% of the Board membership
following the transaction, except that no Change in Control will
be deemed
to
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occur
if such merger, amalgamation, arrangement, consolidation, reorganization
or transfer is with any subsidiary or subsidiaries of the
Corporation;
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(ii)
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if
any person, or any combination of persons (different from those person(s)
holding Equity Securities prior to the date hereof) acting jointly
or in
concert by virtue of an agreement, arrangement, commitment or
understanding shall acquire or hold, directly or indirectly, 50%
or more
of the voting rights attached to all outstanding Equity Securities;
or
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(iii)
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if
any person, or any combination of persons (different from those person(s)
holding Equity Securities prior to the date hereof) acting jointly
or in
concert by virtue of an agreement, arrangement, commitment or
understanding shall acquire or hold, directly or indirectly, the
right to
appoint a majority of the directors of the Corporation;
or
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(iv)
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if
the Corporation sells, transfers or otherwise disposes of all or
substantially all of its assets, except that no Change of Control
will be
deemed to occur if such sale or disposition is made to a subsidiary
or
subsidiaries of the Corporation.
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provided
however, that a Change in Control shall not be deemed to have occurred if such
Change in Control results solely from the issuance of Equity Securities in
connection with a bona fide financing or series of financings by the
Corporation.
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(c)
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“Base
Salary” shall mean the annual base salary, as referred to in Section 3
(Base Salary), and as adjusted from time to time in accordance with
Section 4 (Annual Review), of the Employment
Agreement.
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(d)
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“Bonus”
shall mean the bonus referred to in Section 5 (Performance Bonus)
of the
Employment Agreement.
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(e)
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“Cause”
shall have the meaning set out in Section 19 (Termination by the
Corporation for Cause) of the Employment
Agreement.
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(f)
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“Date
of Termination” shall mean, if your employment is terminated, the date
specified in the Notice of
Termination.
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(g)
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“Equity
Security” in respect of a security of the Corporation, shall have the
meaning ascribed thereto in Part II of the Securities Act
(British Columbia), as it existed on the date of this Agreement,
and also
means any security carrying the right to convert such security into,
exchange such security for, or entitling the holder to subscribe
for, any
equity security, or into or for any such convertible or exchangeable
security or security carrying a subscription
right.
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(h)
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“Good
Reason” shall mean the occurrence of one or more of the following events,
without your express written consent, within 12 months of Change
in
Control:
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(i)
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a
material change in your status, position, authority or responsibilities
that does not represent a promotion from or represents an adverse
change
from your status, position, authority or responsibilities in effect
immediately prior to the Change in
Control;
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(ii)
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a
material reduction by the Corporation, in the aggregate, in your
Base
Salary, or incentive, retirement, health benefits, bonus or other
compensation plans provided to you immediately prior to the Change
in
Control, unless an equitable arrangement has been made with respect
to
such benefits in connection with a Change in
Control;
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(iii)
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a
failure by the Corporation to continue in effect any other compensation
plan in which you participated immediately prior to the Change in
Control
(except for reasons of non-insurability), including but not limited
to,
incentive, retirement and health benefits, unless an equitable arrangement
has been made with respect to such benefits in connection with a
Change in
Control;
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(iv)
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any
request by the Corporation or any affiliate of the Corporation that
you
participate in an unlawful act; or
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(v)
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any
purported termination of your employment by the Corporation after
a Change
in Control which is not effected pursuant to a Notice of Termination
satisfying the requirements of clause (i) below and for the purposes
of this Agreement, no such purported termination shall be
effective.
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(i)
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“Notice
of Termination” shall mean a notice, in writing, communicated to the other
party in accordance with Section 6 below, which shall indicate the
specific termination provision in this Agreement relied upon and
shall set
forth in reasonable detail the facts and circumstances claimed to
provide
a basis for termination of your employment under the provision so
indicated.
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(j)
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“Potential
Change in Control” of the Corporation shall be deemed to have occurred
if:
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(i)
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the
Corporation enters into an agreement, the consummation of which would
result in the occurrence of a Change in
Control;
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(ii)
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any
person (including the Corporation) publicly announces an intention
to take
or to consider taking actions which if consummated would constitute
a
Change in Control; or
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(iii)
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the
Board adopts a resolution to the effect that, for the purposes of
this
Agreement, a Potential Change in Control of the Corporation has
occurred.
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3.
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Potential
Change in Control.
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You
agree that, in the event of a Potential Change in Control of the Corporation
occurring after the Effective Date, and until 12 months after a Change in
Control, subject to your right to terminate your employment by issuing and
delivering a Notice of Termination for Good Reason, you will continue to
diligently carry out your duties and obligations, on the terms set out in the
Employment Agreement.
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4.
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Compensation
Upon Termination Following Change in
Control
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Subject
to compliance by you with Section 3, upon your employment terminating pursuant
to a Notice of Termination within 12 months after a Change in Control, the
Corporation agrees that you shall receive and you agree to accept, subject
to
your prior resignation as a director of the Corporation at the request of the
Board, the following payments in full satisfaction of any and all claims you
may
have or then may
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have
against the Corporation, for remuneration, fees, salary, benefits, bonuses
or
severance, arising out of or in connection with your employment by the
Corporation or the termination of your employment:
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(a)
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If
your employment shall be terminated by the Corporation for Cause
or by you
other than for Good Reason, the terms of the Employment Agreement
shall
govern and the Corporation shall have no further obligations to you
under
this Agreement.
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(b)
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If
your employment by the Corporation shall be terminated by you for
Good
Reason or by the Corporation other than for Cause, then, subject
to your
execution of an effective release of claims against the Corporation,
you
shall be entitled to the payments and benefits provided
below:
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(i)
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subject
to the withholding of all applicable statutory deductions, the Corporation
shall pay you, within 7 days after the effective date of your executed
release of all claims against the Corporation, but in no case later
than
March 15 of the year following the year in which the termination
occurs, a
lump sum equal to 18 months’ Base Salary, as referred to in Section 3
(Base Salary) and as adjusted from time to time in accordance with
Section
4 (Annual Review) of the Employment Agreement, plus any guaranteed
portion
of any Bonus;
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(ii)
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to
the extent permitted by law and subject to the terms and conditions
of any
benefit plans in effect from time to time, the Corporation shall
maintain,
at no cost to you,(or reimburse you for the cost of continuing) the
health, medical and dental benefits set out in Section 6 (Benefits)
of the
Employment Agreement during the 18 month period (or
such shorter period of time until you become eligible for comparable
benefits from a subsequent employer) and will reimburse you for income
taxes that you may be required to pay with respect to such continued
group
benefit coverage to the extent that such coverage is considered a
taxable
benefit. Such reimbursement for taxes will be made in four lump
sum payments as follows: as to the taxes relating to up to the
first 3 months of continued health coverage, payment shall be made
on the
date that is two months after the termination date; as to the taxes
relating to up to the next 4 months of continued health coverage,
payment
shall be made on the date that is 7 months after the termination
date; as to the taxes relating to up to the next 7 months of continued
health coverage, payment shall be made on the date that is 13 months
after
the termination date; and as to the taxes relating to up to the remaining
4 months of continued health coverage, payment shall be made on the
date
that is 17 months after the termination
date.;
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(iii)
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the
Corporation shall arrange for you to be provided with such outplacement
career counselling services as are reasonable and appropriate, to
assist
you in seeking new executive level employment;
and
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(iv)
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all
incentive stock options and trust shares granted to you by the Corporation
under any stock option and/or trust share agreement that is entered
into
between you and the Corporation and is outstanding at the time of
termination of your employment, which stock options and or trust
shares
have not yet vested, shall immediately vest upon the termination
of your
employment and shall be fully exercisable by you in accordance with
the
terms of the agreement or agreements under which such options were
granted.
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It
is intended that (1) each installment of the payments provided under this
Section 4 is a separate “payment” for purposes of Section 409A of the United
States Internal Revenue Code of 1986 (the “Code”), (2) that the payments
satisfy, to the greatest extent possible, the exemptions from the application
of
Section 409A provided under of Treasury Regulation 1.409A-1(b)(4),
1.409A-1(b)(5), 1.409A-1(b)(9)(iii), and
1.409A-1(b)(9)(v). Notwithstanding the foregoing, if the Corporation
(or, if applicable, the successor entity thereto) determines that the payments
provided under this Agreement constitute “deferred compensation” under Section
409A of the Code (together, with any international, state or local law of
similar effect, “Section 409A”) and you are a
“specified employee” of the Corporation or any successor entity thereto
at the
relevant date, as such term is defined in Section 409A(a)(2)(B)(i) (a
“Specified Employee”), then, solely to the extent
necessary to avoid the incurrence of the adverse personal tax consequences
under
Section 409A, the timing of the payments shall be delayed as
follows: on the earliest to occur of (i) the date that is six months
and one day after the termination date or (ii) the date of your death (such
earliest date, the “Delayed Initial Payment Date”),
the Corporation (or the successor entity thereto, as applicable) shall (A)
pay
you a lump sum amount equal to the sum of the payments that you would otherwise
have received through the Delayed Initial Payment Date if the commencement
of
the payment of the payments had not been delayed pursuant to this Section 4
and
(B) commence paying the balance of the payments in accordance with the
applicable payment schedules set forth above.
If
any payment, distribution or benefit you would receive pursuant to a Change
in
Control from the Corporation or otherwise, but determined without regard to
any
additional payment required under this Section 4 (the
“Payment”) would (i) constitute a “parachute payment”
within the meaning of Section 280G of the Internal Revenue
Code of 1986, as
amended (the “Code”), and (ii) be subject to the excise
tax imposed by Section 4999 of the Code or any interest or penalties payable
with respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then you shall be entitled to receive from the
Corporation an additional payment (the “Gross-Up Payment”) in
an amount that shall fund the payment by you of any Excise Tax on the Payment
as
well as all income and employment taxes imposed on the Gross-Up Payment, any
Excise Tax imposed on the Gross-Up Payment and any interest or penalties imposed
with respect to income and employment taxes imposed on the Gross-Up
Payment.
The
accounting firm engaged by the Corporation for general audit purposes as of
the
day prior to the effective date of Change in Control shall perform the foregoing
calculations. If the accounting firm so engaged by the Corporation is
serving as accountant or auditor for the individual, entity or group effecting
the Change in Control, the Corporation shall appoint a nationally recognized
accounting firm to make the determinations required hereunder. The
Corporation shall bear all expenses with respect to the determinations by such
accounting firm required to be made hereunder.
The
accounting firm engaged to make the determinations hereunder shall provide
its
calculations, together with detailed supporting documentation, to the
Corporation and you within fifteen calendar days after the date on which your
right to a Payment is triggered (if requested at that time by the Corporation
or
you) or such other time as requested by the Corporation or you. If
the accounting firm determines that no Excise Tax is payable with respect to
a
Payment, it shall furnish the Corporation and you with an opinion reasonably
acceptable to you that no Excise Tax will be imposed with respect to such
Payment. If the accounting firm determines that an Excise Tax is
payable, it shall furnish the Corporation and you with an opinion setting forth
the amount of the Excise Tax due and the amount of the Gross-Up Payment due,
and
such Gross-Up Payment shall be paid to you on the later of (i) the date that
is
six months and one day after the termination date and (ii) the date that is
four
months after the date on which the accounting firm makes its determination
that
the Excise Tax is due. Any good faith determinations of the
accounting firm made hereunder shall be final, binding and conclusive upon
the
Corporation and you.
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If
requested by the Board, upon your employment terminating pursuant to a Notice
of
Termination within 12 months after a Change in Control, you agree to resign
as a
director of the Corporation. You shall not be required to mitigate
the amount of any payment provided for in this Section 4 by seeking other
employment or otherwise, nor will any sums actually received be
deducted.
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5.
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Binding
Agreement.
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This
Agreement shall enure to the benefit of and be enforceable by your personal
or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you die while any amount would still
be
payable to you under this Agreement if you had continued to live, that amount
shall be paid in accordance with the terms of this Agreement to your devisee,
legatee or other designee or, if there is no such designee, to your
estate.
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6.
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Notices.
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All
notices and other communications that are required or permitted by this
Agreement must be in writing and shall be hand delivered or sent by express
delivery service or certified or registered mail, postage prepaid, or by
facsimile transmission (with written confirmation copy by registered mail)
to
the parties at the addresses indicated below.
If
to Aspreva:
Aspreva
Pharmaceuticals Corporation
c/o
Xxxxxx Xxxxxxx Xxxxx & Xxxxxx LLP
0000-000
Xxxx Xxxxxxx Xxxxxx
Vancouver,
British Columbia
Canada V7Y
1B3
Attention:
X. Xxxxxx XxxXxx-Xxxx, Q.C.
If
to Dr. X. Xxxxxxx Xxxxxxx:
X.
Xxxxxxx Xxxxxxx, Ph.D.
0000-0000
Xxxxxxx Xxxxxx
Victoria,
British Columbia
Canada
V8Z 7X8
Any
such notice shall be deemed to have been received on the earlier of the date
actually received or the date five (5) days after the same was posted or
sent. Either party may change its address or its facsimile number by
giving the other party written notice, delivered in accordance with this
Section.
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7.
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Modification:
Amendments: Entire
Agreement.
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This
Agreement may not be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by you and such
officer as may be specifically designated by the Board. No waiver by either
party at any time of any breach by the other party of, or compliance with,
any
condition or provision of this Agreement to be performed by such other party
will be deemed a waiver of similar or dissimilar provisions or conditions at
the
same or at any prior or subsequent time. Except as set forth in your Employment
Agreement, no agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement.
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8.
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Governing
Law.
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This
Agreement shall be governed by and interpreted in accordance with the laws
of
the Province of British Columbia and applicable laws of Canada and the parties
hereto attorn to the exclusive jurisdiction of the provincial and federal courts
of such province.
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9.
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Validity.
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The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
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10.
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No
Employment or Service
Contract
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Nothing
in this Agreement shall confer upon you any right to continue in the employment
of the Corporation for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation or you, which rights
are hereby expressly reserved by each, to terminate your employment at any
time
for any reason whatsoever, with or without cause.
If
the foregoing sets forth our agreement on this matter, kindly sign and return
to
the Corporation a copy of this letter.
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Yours
truly,
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| ASPREVA PHARMACEUTICALS CORPORATION | ||
| By: | /s/ Xxx Xxxx | |
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Xxx
Xxxx, Chair, Compensation Committee
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Accepted
and agreed to by X. Xxxxxxx Xxxxxxx as of July 10, 2007
| /s/ X. Xxxxxxx Xxxxxxx |
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X.
Xxxxxxx Xxxxxxx, Ph.D.
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