EXHIBIT 10.78
EMPLOYMENT AGREEMENT
[QLT INC. Logo]
This Employment Agreement dated for reference October 9th, 2001.
BETWEEN:
QLT INC., having an address of 887 Great Northern Way, Vancouver,
British Columbia, V5T 4T5, Canada,
("QLT" or the "COMPANY")
AND:
MICHAEL J. DOTY, having an address of 3 Molino Drive, Chatham, New
Jersey, 07928, U.S.A.
("Employee's Name" or the "EMPLOYEE")
WHEREAS:
A. QLT is a world leader in the development and commercialization of
proprietary pharmaceutical products for use in photodynamic therapy, an
emerging field of medicine utilizing light-activated drugs in the treatment
of disease;
B. QLT has offered to the Employee, and the Employee has accepted, employment
with QLT as Senior Vice President and Chief Financial Officer.
C. QLT and the Employee wish to enter into this Agreement to set out the terms
and conditions of the Employee's employment with QLT.
D. Employment is subject to the Employee obtaining and maintaining permission
of Canada Immigration to work in Canada in this position. QLT will
reimburse the Employee for the costs associated with obtaining employment
and permanent resident status.
NOW THEREFORE in consideration of $10.00, the promises made by each party
to the other as set out in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which the parties acknowledge and
agree, QLT and the Employee agree as follows:
1. POSITION AND DUTIES
1.1 POSITION - QLT will employ the Employee in the position Senior Vice
President and Chief Financial Officer and the Employee agrees to be
employed by QLT in this position, subject to the terms and conditions of
this Agreement.
1.2 DUTIES, REPORTING AND EFFORTS - In the performance of his/her duties as
Senior Vice President and Chief Financial Officer, Executive Offices and,
the Employee shall, in accordance with his/her Accountability Statement, as
may be amended from time to time:
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EXHIBIT 10.78
1.2 (a) OVERALL RESPONSIBILITIES:
i) For building financial resources and financial infrastructure, and
ii) For building positive relationships with the financial analyst
community, and
iii) For leading several departments including Finance, Information
Technology, Building Operations, Legal Affairs, and Investor
Relations.
(a) EXECUTIVE OFFICES - Personally undertake and/or delegate all senior
administrative responsibilities pertaining to all above areas of
responsibility at QLT, in accordance with policies established from time to
time by the President of the Company (the "PRESIDENT") and by the Board of
Directors of the Company (the "BOARD").
(b) REPORT - Report, as and when required, to the President.
(c) BEST EFFORTS - Use his/her best efforts, industry and knowledge to improve
and increase QLT's business and to ensure that QLT is at all times in
compliance with applicable provincial, state, federal and other governing
statutes, policies and regulations pertaining to QLT business, and in
particular, project planning and management at QLT.
(d) WORKING DAY - Devote the whole of his/her working day attention and
energies to the business and affairs of QLT.
2. COMPENSATION
All sums are in Canadian Dollars unless otherwise stated.
2.1 ANNUAL COMPENSATION - In return for his/her services under this Agreement,
the Company agrees to pay or otherwise provide the following total annual
compensation to the Employee:
(a) BASE SALARY - A base salary in the amount of $240,000.00 (U.S.) in 24
equal installments payable semi-monthly in arrears, subject to
periodic reviews at the discretion of the President and the Board.
(b) BENEFIT PLANS - Coverage for the Employee and his/her eligible
dependents under any employee benefit plans provided by/through QLT to
its employees, subject to:
I. Each plan's terms for eligibility,
II. The Employee taking the necessary steps to ensure effective
enrollment or registration under each plan, and
III. Customary deductions of employee contributions for the premiums
of each plan.
As at the date of this Agreement, the employee benefit plans provided
by/through QLT to its employees include life insurance, accidental
death and dismemberment insurance, dependent life insurance,
vision-care insurance, health insurance, dental insurance and short and
long term disability insurance. QLT and the Employee agree that the
employee benefit plans provided by/through QLT to its employees may
change from time to time.
(c) EXPENSE REIMBURSEMENT - Reimbursement, in accordance with the
Company's Policy and Procedures Manual (as amended from time to time),
of all reasonable business related promotion, entertainment and/or
travel expenses incurred by the Employee, subject to him/her
maintaining proper accounts and providing documentation for these
expenses upon request.
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EXHIBIT 10.78
(d) VACATION - Four weeks of paid vacation per year, as may be increased
from time to time in accordance with QLT's standard vacation policy.
As per the Company's Policy and Procedures Manual (as amended from
time to time), unless agreed to in writing by the Company:
I. All vacation must be taken within one year of the year in which
it is earned by the Employee, and
II. Vacation entitlement shall not be cumulative from year to year.
(e) RRSP CONTRIBUTIONS - Provided the conditions set out below have been
satisfied, in January or February of the year following the year in
which the income is earned by the Employee (the "INCOME YEAR"), QLT
shall make a contribution of up to 7% of the Employee's annual base
salary for the Income Year to the Employee's Registered Retired
Savings Plan ("RRSP"). The contribution to the Employee's RRSP as set
out above is subject the following conditions:
I. The maximum contribution to be made by the Company to the
Employee's RRSP is 50% of the annual limit for Registered
Retirement Savings Plans as established by Revenue Canada for the
Income Year,
II. The Employee must have contributed an equal amount into his/her
RRSP, and
III. The Employee is still actively employed by the Company when the
matching contribution would otherwise be made.
(f) CASH INCENTIVE COMPENSATION PLAN - Participation in the Cash Incentive
Compensation Plan offered by QLT to its senior executives in
accordance with the terms of such Plan, as amended from time to time
by the Board. The amount of the payment granted, if any, is at the
discretion of the Executive Compensation Committee of the Board.
(g) STOCK OPTION PLAN - Participation in any stock option plan offered by
QLT to its employees, in accordance with the terms of the plan in
effect at the time of the stock option offer(s).
2.2 ADDITIONAL COMPENSATION - The Company and the Employee agree to the terms
of relocation assistance, relocation repayment, and relocation assistance
upon termination by the Company as set out in SCHEDULE A to this Agreement.
In return for the Employee's services under this Agreement, the Company
also agrees to pay or otherwise provide additional special compensation to
the Employee as more particularly set out in SCHEDULE 2.2 to this
agreement.
3. RESIGNATION
3.1 RESIGNATION - The Employee may resign from his/her employment with QLT by
giving QLT 60 days prior written notice (the "RESIGNATION NOTICE") of the
effective date of his/her resignation. On receiving a Resignation Notice,
QLT may elect to provide the following payments in lieu of notice to the
Employee and require him/her to leave the premises forthwith:
(a) BASE SALARY - Base salary owing to the Employee for the 60-day notice
period.
(b) BENEFITS - Except as set out below in this subparagraph 3.1(b), for
the 60-day notice period, all employee benefit plan coverage enjoyed
by the Employee and his/her eligible dependents prior to the date of
his/her Resignation Notice. The Employee acknowledges and agrees that
pension and short and long term disability plans provided through the
Company will not be continued beyond the last day that the Employee
works at the Company's premises (the "LAST ACTIVE DAY").
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EXHIBIT 10.78
(c) EXPENSE REIMBURSEMENT - Reimbursement (in accordance with the
Company's Policy and Procedures Manual, as amended from time to time)
of all reasonable business related promotion, entertainment and/or
travel expenses incurred by the Employee prior to his/her Last Active
Day, subject to the expense reimbursement provisions set out in
subparagraph 2.1(c).
(d) VACATION PAY - Payment in respect of accrued but unpaid vacation pay
owing to the Employee as at the expiry of the 60-day notice period.
(e) PRORATED RRSP CONTRIBUTION - A prorated contribution to the Employee's
RRSP, the pro-ration to be with respect to the portion of the current
calendar year worked by the Employee, up to and including the 60-day
notice period, and the contribution to be subject to the conditions
set out in subparagraph 2.1(e), except condition III.
3.2 OTHERS - In the event of resignation of the Employee as set out in
paragraph 3.1, the parties agree:
(a) NO BONUS - The Employee will have no entitlement to participate in the
Company's Cash Incentive Compensation Plan for the year in which he
resigns his/her employment with QLT; and
(b) STOCK OPTION PLAN - The Employee's participation in any stock option
plan offered by QLT to its employees shall be in accordance with the
terms of the plan in effect at the time of the stock option offer(s)
to the Employee.
4. RETIREMENT
4.1 RETIREMENT - Effective the date of retirement (as defined in the Company'
Policy and Procedures Manual, as amended from time to time) of The Employee
from active employment with the Company, the parties agree that:
(a) THIS AGREEMENT - Subject to the provisions of paragraph 10.6, both
parties' rights and obligations under this Agreement will terminate
without further notice or action by either party.
(b) STOCK OPTIONS - The Employee's participation in any stock option plan
offered by QLT to its employees shall be in accordance with the terms
of the plan in effect at the time of the stock option offer(s) to the
Employee.
5. TERMINATION
5.1 TERMINATION FOR CAUSE - QLT reserves the right to terminate the Employee's
employment at any time for any reason. Should the Employee be terminated
for cause, he/she will not be entitled to any advance notice of termination
or pay in lieu thereof.
DEFINTION OF CAUSE- Termination by QLT of your employment for "Cause" shall
mean termination (a) upon the willful and continued failure by you to
substantially perform your duties with QLT in accordance with the terms of
this Employment Agreement (other than any such failure resulting from your
incapacity due to physical or mental illness), (for purposes of this
section, no act, or failure to act, on your part shall be deemed "willful"
unless done, or omitted to be done, by you without good faith and without
reasonable belief that your action was in the best interest of QLT) (b)
fraud, and c) violation of QLT's harassment policy as outlined in the QLT
Employee Policy and Procedures Manual., notwithstanding the foregoing, you
shall not be terminated for Cause unless and until a copy of a resolution
duly adopted by the unanimous affirmation vote of the entire membership of
the Compensation Committee of the Board of Directors at a meeting of the
Compensation Committee of the Board has taken place.
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EXHIBIT 10.78
5.2 TERMINATION OTHER THAN FOR CAUSE - QLT reserves the right to terminate the
Employee's employment at any time without reason. However, if QLT
terminates the Employee's employment for:
(a) Any reason other than for cause, or
(b) Any reason not covered by a separate Change in Control Letter
Agreement dated of even date between QLT and the Employee,
then, except in the case of the Employee becoming completely disabled
(which is provided for in paragraph 5.8) and subject to the provisions set
forth below, the Employee shall be entitled to receive notice, pay and/or
benefits (or any combination of notice, pay and/or benefits) as more
particularly set out in paragraph 5.3.
5.3 SEVERANCE NOTICE AND PAY - In the event QLT terminates the Employee's
employment as set out in paragraph 5.2, the Employee shall be entitled to:
(a) NOTICE - Advance written notice of termination ("SEVERANCE NOTICE"),
or pay in lieu thereof ("SEVERANCE PAY"), or any combination of
Severance Notice and Severance Pay, as more particularly set out
below:
I. A minimum of twelve months' Severance Notice, or Severance Pay in
lieu thereof, in the first year of employment and
II. One additional month's Severance Notice, or Severance Pay in lieu
thereof, for each complete year of continuous employment with the
Company,
up to a maximum of twenty four months' Severance Notice, or Severance
Pay in lieu of Severance Notice. The Employee acknowledges and agrees
that Severance Pay is in respect of base salary only and will be made
on a bi-weekly or monthly basis, at the Company's discretion.
(b) BENEFITS - Except as set out below, for 30 days after the Employee's
Last Active Day, all employee benefit plan coverage enjoyed by the
Employee and his/her dependents prior to the date of termination.
Thereafter, and in lieu of employee benefit plan coverage, The
Employee shall receive compensation ("BENEFITS COMPENSATION") in the
amount of 10% of his/her base salary for the balance of his/her
Severance Notice period. The Employee acknowledges and agrees that
pension and short and long term disability plans provided through the
Company will not be continued beyond the Employee's Last Active Day.
(c) OUT PLACEMENT COUNSELING - In the event QLT terminates the Employee's
employment as set out in paragraph 5.2, in the year following
termination, QLT will pay to an out placement counseling service (to
be agreed to by the Employee and QLT) a maximum of Cdn$5,000 for
assistance rendered to the Employee in seeking alternative employment.
(d) OTHER COMPENSATION - In the event QLT terminates the Employee's
employment as set out in paragraph 5.2, the parties further agree as
follows:
I. The Company will reimburse (in accordance with the Company's
Policy and Procedures Manual, as amended from time to time) the
Employee for all reasonable business related promotion,
entertainment and/or travel expenses incurred by the Employee
prior to the date of
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EXHIBIT 10.78
termination, subject to the expense reimbursement provisions set
out in subparagraph 2.1(c).
II. The Company will make a payment to the Employee in respect of
his/her accrued but unpaid vacation pay to the date of
termination.
III. The Company will make a prorated contribution to the Employee's
RRSP, the pro-ration to be with respect to the portion of the
current calendar year worked by the Employee and the contribution
to be subject to the conditions set out in subparagraph 2.1(e),
except condition III.
IV. The Company will make a prorated payment to the Employee in
respect of his/her entitlement to participate in the Company's
Cash Incentive Compensation Plan, the pro-ration to be with
respect to the portion of the current calendar year worked by the
Employee and the entitlement to be at the maximum level the
Employee would have otherwise been eligible to receive in the
current calendar year.
V. The Employee's participation in any stock option plan offered by
QLT to its employees shall be in accordance with the terms of the
plan in effect at the time of the stock option offer(s) to the
Employee.
5.4 ACKNOWLEDGEMENT - The Employee acknowledges and agrees that in the event
QLT terminates the Employee's employment as set out in paragraph 5.2, in
providing:
(a) The Severance Notice or Severance Pay, or any combination thereof;
(b) The Benefits Compensation;
(c) Out placement counseling service as more particularly set out in
subparagraph 5.3(c); and
(d) The other compensation set out in subparagraph 5.3(d);
the Company shall have no further obligations, statutory or otherwise, to
the Employee in respect of this Agreement and the Employee's employment
under this Agreement.
5.5 DUTY TO MITIGATE
(a) DUTY TO MITIGATE - The Employee acknowledges and agrees that if
his/her employment is terminated as set out in paragraph 5.2, his/her
entitlement to Severance Pay, Benefits Compensation and other
compensation as set out in paragraph 5.3 is subject to his/her duty to
mitigate such payments by looking for and accepting suitable
alternative employment or contract(s) for services.
(b) NOTICE - If the Employee obtains new employment or contract(s) for
services of four weeks or longer, the Employee agrees that he/she will
notify QLT of this fact in writing (the "NEW EMPLOYMENT NOTICE")
within five working days of such an occurrence and in this event the
following provisions apply:
I. The Employee acknowledges and agrees that his/her entitlement to
Severance Pay and Benefits Compensation will cease as of the date
on which his/her new employment or contract for services
commences.
II. Within 10 working days of receipt of the New Employment Notice
from the Employee, QLT agrees that it will pay the Employee a
lump sum amount equivalent to 50% of the Severance Pay and
Benefits Compensation as set out in paragraph 5.3 otherwise owing
to the Employee for the balance of the Severance Notice period.
5.6 FUNDAMENTAL BREACH - The Employee acknowledges and agrees that failure by
him/her to provide the
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EXHIBIT 10.78
New Employment Notice to QLT within five working days as set out in
paragraph 5.5, or him/her providing employment or contract(s) for services
to a company which is in direct competition with QLT in breach of paragraph
8.1, will be deemed to be a fundamental breach of this Agreement and QLT's
obligations to pay Severance Pay, Benefits Compensation and other
compensation as set out in paragraph 5.3 shall cease immediately.
5.7 NO DUPLICATION - In the event that the Severance Pay provisions of this
Agreement and the payment provisions of the Change in Control Agreement are
both applicable, the Employee agrees that he/she will give written notice
to the Company with respect to which agreement he/she wishes to be paid out
under and that he/she is not entitled to severance pay under both
agreements.
5.8 TERMINATION DUE TO INABILITY TO ACT
(a) TERMINATION - QLT may immediately terminate this Agreement by giving
written notice to the Employee if he/she becomes completely disabled
(defined below) to the extent that he/she cannot perform his/her
duties under this Agreement either:
I. For a period exceeding six consecutive months, or
II. For a period of 180 days (not necessarily consecutive) occurring
during any period of 365 consecutive days,
and no other reasonable accommodation can be reached between QLT and
the Employee. Notwithstanding the foregoing, QLT agrees that it will
not terminate the Employee pursuant to this provision unless and until
the Employee has been accepted by the insurer for ongoing long-term
disability payments or, alternatively, has been ruled definitively
ineligible for such payments.
(b) PAYMENTS - In the event of termination of the Employee's employment
with the Company pursuant to the provisions of this paragraph 5.8, the
Company agrees to pay to the Employee Severance Pay and Benefits
Compensation as set out in paragraph 5.3 and in this situation:
I. While he/she is completely disabled the Employee shall have no
duty to mitigate the payments owing to him/her by looking for and
accepting suitable alternative employment or contract(s) for
service, and
II. If the Employee ceases to be completely disabled, then the
provisions of paragraphs 5.5 (duty to mitigate and notice of new
employment) and 5.3(c) (out placement counseling) shall apply.
(c) DEFINITION - The term "completely disabled" as used in this paragraph
5.8 shall mean the inability of the Employee to perform the essential
functions of his/her position under this Agreement by reason of any
incapacity, physical or mental, which the Board, based upon medical
advice or an opinion provided by a licensed physician acceptable to
the Board, determines to keep the Employee from satisfactorily
performing any and all essential functions of his/her position for the
Company during the foreseeable future.
5.9 DEATH - Except as set out below, effective the date of death (the "DATE OF
DEATH") of the Employee, this Agreement and both parties' rights and
obligations under this Agreement shall terminate without further notice or
action by either party. Within 30 days after the Date of Death (and the
automatic concurrent termination of this Agreement), the Company shall pay
the following amounts to the Employee's estate:
(a) BASE SALARY - Base salary owing to The Employee up to his/her Date of
Death.
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EXHIBIT 10.78
(b) PAYMENT IN LIEU OF BENEFITS - In lieu of employee benefit coverage for
his/her eligible dependents after his/her Date of Death, a payment in
the amount of 10% of his/her annual base salary in effect at his/her
Date of Death.
(c) EXPENSE REIMBURSEMENT - Reimbursement (in accordance with the
Company's Policy and Procedures Manual, as amended from time to time)
of all reasonable business related promotion, entertainment and/or
travel expenses incurred by the Employee prior to his/her Date of
Death, subject to the expense reimbursement provisions set out in
subparagraph 2.1(c).
(d) VACATION PAY - Payment in respect of accrued but unpaid vacation pay
owing to the Employee as at his/her Date of Death.
(e) RRSP CONTRIBUTION - A prorated contribution to the Employee's RRSP,
the pro-ration to be with respect to the portion of the current
calendar year worked by the Employee and the contribution to be
subject to the conditions set out in subparagraph 2.1(e), except
condition III.
(f) BONUS - A prorated payment to the Employee in respect of his/her
entitlement to participate in the Company's Cash Incentive
Compensation Plan, the pro-ration to be with respect to the portion of
the current calendar year worked by the Employee and the entitlement
to be at the maximum level the Employee would have otherwise been
eligible to receive in the current calendar year.
After his/her Date of Death, the Employee's participation and/or
entitlement under any stock option plan offered by QLT to its employees
shall be in accordance with the terms of the plan in effect at the time of
the stock option offer(s) to the Employee.
6. CONFLICT OF INTEREST
6.1 AVOID CONFLICT OF INTEREST - Except as set out below, during the term of
his/her employment with QLT, the Employee agrees to conduct himself/herself
at all times so as to avoid any real or apparent conflict of interest with
the activities, policies, operations and interests of QLT. To avoid
improper appearances, the Employee agrees that he/she will not accept any
financial compensation of any kind, nor any special discount, loan or
favour from persons, corporations or organizations having dealings or
potential dealings with QLT, either as a customer or a supplier or a
co-venturer. The Company and the Employee acknowledge and agree that from
time to time the President may consent in writing to activities by the
Employee which might otherwise appear to be a real or apparent conflict of
interest.
6.2 NO FINANCIAL ADVANTAGE - During the term of his/her employment with QLT,
the Employee agrees that neither he/she nor any members of his/her
immediate family will take financial advantage of or benefit financially
from information that is obtained in the course of his/her employment
related duties and responsibilities unless the information is generally
available to the public.
6.3 COMPLY WITH POLICIES - During the term of his/her employment with QLT, the
Employee agrees to comply with all written policies issued by QLT dealing
with conflicts of interest.
6.4 BREACH EQUALS CAUSE - The Employee acknowledges and agrees that breach by
him/her of the provisions of this Section 6 shall be cause for immediate
termination by the Company of his/her employment with the Company.
7. CONFIDENTIALITY
7.1 INFORMATION HELD IN TRUST - The Employee acknowledges and agrees that all
business and trade secrets, confidential information and knowledge which
the Employee acquires during his/her
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EXHIBIT 10.78
employment with QLT relating to the business and affairs of QLT or to
technology, systems, programs, ideas, products or services which have been
or are being developed or utilized by QLT, or in which QLT is or may become
interested (collectively, "CONFIDENTIAL INFORMATION"), shall for all
purposes and at all times, both during the term of the Employee's
employment with the Company and at all times thereafter, be held by the
Employee in trust for the exclusive benefit of the Company.
7.2 NON DISCLOSURE - The Employee acknowledges and agrees that both during the
term of his/her employment with QLT and at all times thereafter, without
the express or implied consent of QLT, the Employee will not:
(a) DISCLOSE - Disclose to any company, firm or person, other than QLT and
its directors and officers, any of the private affairs of QLT or any
Confidential Information of QLT; or
(b) USE - Use any Confidential Information that he may acquire with
respect to QLT's affairs for his/her own purposes or for any purposes,
other than those of the Company.
7.3 INTELLECTUAL PROPERTY RIGHTS
(a) DISCLOSE INVENTIONS - The Employee agrees to promptly disclose to QLT
any and all ideas, developments, designs, articles, inventions,
improvements, discoveries, machines, appliances, processes, methods,
products or the like (collectively, "INVENTIONS") that the Employee
may invent, conceive, create, design, develop, prepare, author,
produce or reduce to practice, either solely or jointly with others,
in the course of his/her employment with the Company.
(b) INVENTIONS ARE QLT PROPERTY - All Inventions and all other work of the
Employee in the course of his/her employment with the Company shall at
all times and for all purposes be the property of QLT for QLT to use,
alter, vary, adapt and exploit as it shall see fit, and shall be
acquired or held by the Employee in a fiduciary capacity solely for
the benefit of QLT.
(c) ADDITIONAL REQUIREMENTS - The Employee agrees to:
I. Treat all information with respect to Inventions as Confidential
Information.
II. Keep complete and accurate records of Inventions, which records
shall be the property of QLT and copies of which records shall be
maintained at the premises of QLT.
III. Execute all assignments and other documents required to assign
and transfer to QLT (or such other persons as QLT may direct) all
right, title and interest in and to the Inventions and all other
work of the Employee in the course of his/her employment with the
Company, and all writings, drawings, diagrams, photographs,
pictures, plans, manuals, software and other materials, goodwill
and ideas relating thereto, including, but not limited to, all
rights to acquire in the name of QLT or its nominee(s) patents,
registration of copyrights, design patents and registrations,
trade marks and other forms of protection that may be available.
IV. Execute all documents and do all acts reasonably requested by QLT
to give effect to this provision.
7.4 RECORDS - The Employee agrees that all records or copies of records
concerning QLT's activities, business interests or investigations made or
received by him/her during his/her employment with QLT are and shall remain
the property of QLT. He/she further agrees to keep such records or copies
in the custody of QLT and subject to its control, and to surrender the same
at the termination of his/her employment or at any time during his/her
employment at QLT's request.
7.5 NO USE OF FORMER EMPLOYER'S MATERIALS - The Employee certifies that he/she
has not brought to QLT and will not use while performing his/her employment
duties for QLT any materials or documents of any
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former employer which are not generally available to the public, except if
the right to use the materials or documents has been duly licensed to QLT
by the former employer.
8. POST-EMPLOYMENT RESTRICTIONS
8.1 NON-COMPETE - The Employee agrees that, without the prior written consent
of QLT, for a period of two years following termination of his/her
employment with the Company for any reason (by resignation or otherwise),
as measured from his/her Last Active Day, the Employee shall not:
(a) PARTICIPATE IN A COMPETITIVE BUSINESS - Directly or indirectly, own,
manage, operate, join, control or participate in the ownership,
management, operation or control of, or be a director or an employee
of, or a consultant to, any business, firm or corporation that, as a
part of conducting its business, is in any way competitive with QLT
with respect to:
I. The development and/or commercialization and/or marketing of
light-activated pharmaceutical products for photodynamic therapy
in the treatment of cancer, opthalmic, auto-immune and
cardiovascular disease, or
II. If the core technology base of the Company diversifies beyond
photodynamic therapy, the development and/or commercialization
and/or marketing of pharmaceutical products that are based on a
significantly similar technology platform and are used in the
treatment of substantially the same medical indications as
products which have become a significant component of the
Company's core business,
anywhere in Canada, the United States or Europe.
(b) SOLICIT ON BEHALF OF A COMPETITIVE BUSINESS - Directly or indirectly
call upon or solicit any QLT employee or QLT customer or known
prospective customer of QLT on behalf of any business, firm or
corporation that, as part of conducting its business, is in any way
competitive with QLT with respect to:
I. The development and/or commercialization and/or marketing of
light-activated pharmaceutical products for photodynamic therapy
in the treatment of cancer, opthalmic, auto-immune and
cardiovascular disease, or
II. If the core technology base of the Company diversifies beyond
photodynamic therapy, the development and/or commercialization
and/or marketing of pharmaceutical products that are based on a
significantly similar technology platform and are used in the
treatment of substantially the same medical indications as
products which have become a significant component of the
Company's core business,
anywhere in Canada, the United States or Europe.
(c) SOLICIT EMPLOYEES - Directly or indirectly solicit any individual to
leave QLT's employment for any reason or interfere in any other manner
with the employment relationship existing between QLT and its current
or prospective employees.
(d) SOLICIT CUSTOMERS - Directly or indirectly induce or attempt to induce
any customer, supplier, distributor, licensee or other business
relation of QLT to cease doing business with QLT or in any way
interfere with the existing business relationship between any such
customer, supplier, distributor, licensee or other business relation
and QLT.
8.2 MINORITY SHARE INTERESTS ALLOWED - The parties agree that nothing contained
in paragraph 8.1 is intended to prohibit the Employee from owning any
minority interest in any company where stock or
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shares are traded publicly.
9. REMEDIES
9.1 IRREPARABLE DAMAGE - The Employee acknowledges and agrees that:
(a) BREACH - Any breach of any provision of this Agreement could cause
irreparable damage to QLT; and
(b) CONSEQUENCES OF BREACH - In the event of a breach of any provision of
this Agreement by him/her, QLT shall have, in addition to any and all
other remedies at law or in equity, the right to an injunction,
specific performance or other equitable relief to prevent any
violation by him/her of any of the provisions of this Agreement
including, without limitation, the provisions of Sections 7 and 8.
9.2 INJUNCTION - In the event of any dispute under Sections 7 and/or 8, the
Employee agrees that QLT shall be entitled, without showing actual damages,
to a temporary or permanent injunction restraining his/her conduct, pending
a determination of such dispute and that no bond or other security shall be
required from QLT in connection therewith.
9.3 ADDITIONAL REMEDIES - The Employee acknowledges and agrees that the
remedies of QLT specified in this Agreement are in addition to, and not in
substitution for, any other rights and remedies of QLT at law or in equity
and that all such rights and remedies are cumulative and not alternative or
exclusive of any other rights or remedies and that QLT may have recourse to
any one or more of its available rights and remedies as it shall see fit.
10. GENERAL MATTERS
10.1 TAX WITHHELD - The parties acknowledge and agree that all payments to be
made by the Company to the Employee under this Agreement will be subject to
the Company's withholding of applicable withholding taxes.
10.2 INDEPENDENT LEGAL ADVICE - The Employee acknowledges that he/she has
obtained or had the opportunity to obtain independent legal advice with
respect to this Agreement and all of its terms and conditions.
10.3 BINDING AGREEMENT - The parties agree that this Agreement shall enure to
the benefit of and be binding upon each of them and their respective heirs,
executors, successors and assigns.
10.4 GOVERNING LAW - The parties agree that this Agreement shall be governed by
and interpreted in accordance with the laws of the Province of British
Columbia and the laws of Canada applicable to this Agreement. All disputes
arising under this Agreement will be referred to the Courts of the Province
of British Columbia, which will have exclusive jurisdiction, unless there
is mutual agreement to the contrary.
10.5 NOTICE - The parties agree that any notice or other communication required
to be given under this Agreement shall be in writing and shall be delivered
personally or by facsimile transmission to the addresses set forth on page
1 of this Agreement to the attention of the following persons:
(a) IF TO THE COMPANY - Attention: President, Fax No. (604) 875-0001,
WITH A COPY TO:
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EXHIBIT 10.78
Farris, Vaughn, Wills & Murphy
Barristers & Solicitors
26th Floor, 700 West Georgia Street
Vancouver, British Columbia
V7Y 1B3
Attention: R. Hector MacKay-Dunn
Fax No.: (604) 661-1730
(b) IF TO THE EMPLOYEE - Fax No. ___________;
or to such other addresses and persons as may from time to time be notified
in writing by the parties. Any notice delivered personally shall be deemed
to have been given and received at the time of delivery. Any notice
delivered by facsimile transmission shall be deemed to have been given and
received on the next business day following the date of transmission.
10.6 SURVIVAL OF TERMS
(a) EMPLOYEE'S OBLIGATIONS - The Employee acknowledges and agrees that
his/her representations, warranties, covenants, agreements,
obligations and liabilities under any and all of Sections 7, 8 and 10
of this Agreement shall survive any termination of this Agreement.
(b) COMPANY'S OBLIGATIONS - The Company acknowledges and agrees that its
representations, warranties, covenants, agreements, obligations and
liabilities under any and all of Sections 3, 4, 5 and 10 of this
Agreement shall survive any termination of this Agreement.
(c) WITHOUT PREJUDICE - Any termination of this Agreement shall be without
prejudice to any rights and obligations of the parties arising or
existing up to the effective date of such expiration or termination,
or any remedies of the parties with respect thereto.
10.7 WAIVER - The parties agree that any waiver of any breach or default under
this Agreement shall only be effective if in writing signed by the party
against whom the waiver is sought to be enforced, and no waiver shall be
implied by indulgence, delay or other act, omission or conduct. Any waiver
shall only apply to the specific matter waived and only in the specific
instance in which it is waived.
10.8 ENTIRE AGREEMENT - The parties agree that the provisions contained in this
Agreement, The Employee's Change in Control Letter Agreement and any Stock
Option Agreements between the Company and the Employee constitute the
entire agreement between QLT and the Employee with respect to the subject
matters hereof, and supersede all previous communications, understandings
and agreements (whether verbal or written) between QLT and the Employee
regarding the subject matters hereof. To the extent that there is any
conflict between the provisions of this Agreement, the Employee's Change in
Control Letter Agreement and any Stock Option Agreements between the
Company and the Employee, the following provisions shall apply:
(a) CHANGE IN CONTROL - If the conflict is with respect to an event,
entitlement or obligation in the case of a Change in Control of the
Company (as defined in the Change in Control Letter Agreement), the
provisions of the Change in Control Letter Agreement will govern
(unless the parties otherwise mutually agree).
(b) STOCK OPTIONS - If the conflict is with respect to an entitlement or
obligation with respect to stock options of the Company, the
provisions of the Stock Option Agreements will govern (unless the
parties otherwise mutually agree).
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EXHIBIT 10.78
(c) OTHER - In the event of any other conflict, the provisions of this
Agreement will govern (unless the parties otherwise mutually agree).
10.9 SEVERABILITY OF PROVISIONS - If any provision of this Agreement as applied
to either party or to any circumstance is adjudged by a court of competent
jurisdiction to be void or unenforceable for any reason, the invalidity of
that provision shall in no way affect (to the maximum extent permissible
by law):
(a) The application of that provision under circumstances different from
those adjudicated by the court;
(b) The application of any other provision of this Agreement; or
(c) The enforceability or invalidity of this Agreement as a whole.
If any provision of this Agreement becomes or is deemed invalid, illegal
or unenforceable in any jurisdiction by reason of the scope, extent or
duration of its coverage, then the provision shall be deemed amended to
the extent necessary to conform to applicable law so as to be valid and
enforceable or, if the provision cannot be so amended without materially
altering the intention of the parties, then such provision shall be
stricken and the remainder of this Agreement will continue in full force
and effect.
10.10 CAPTIONS - The parties agree that the captions appearing in this Agreement
have been inserted for reference and as a matter of convenience and in no
way define, limit or enlarge the scope or meaning of this Agreement or any
provision.
10.11 AMENDMENTS - Any amendment to this Agreement shall only be effective if
the amendment is in writing and is signed by the Company and the Employee.
IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year first written above.
QLT INC.
BY: ______________________________ ____________________________
LINDA LUPINI MICHAEL J. DOTY DATE
VICE PRESIDENT, HUMAN RESOURCES
& ADMINISTRATION
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EXHIBIT 10.78
SCHEDULE "A"
RELOCATION ASSISTANCE
CERTAIN PAYMENTS MADE TO THE EMPLOYEE UNDER SCHEDULE "A" WILL BE TAXABLE
BENEFITS. THESE PAYMENTS WILL BE GROSSED UP TO MAKE WHOLE ANY TAXABLE BENEFITS
THE EMPLOYEE RECEIVES UNDER SCHEDULE "A" AND THE EMPLOYEE WILL BE PROVIDED WITH
A CHEQUE FOR THIS AMOUNT AT THE END OF THE TAXATION YEAR (MARCH) IN WHICH THE
EXPENSE WAS INCURRED.
1. Return air fares to Vancouver (tickets provided by QLT) for the Employee
and the Employee's spouse to find suitable accommodation together with
hotel and rental of an economy car for a period of 3-4 days.
2. Six (6) months of interim accommodation upon arrival in Vancouver to a
maximum of $3,000.00 per month. QLT will assist in locating this
accommodation, if necessary. As required under the Income Tax Act, these
payments must be used to provide for temporary accommodation while the
Employee is waiting to occupy the Employee's new permanent residence,
otherwise, they will be subject to the same required statutory withholdings
in Canada as base salary.
3. Reimbursement of real estate commission fees and reasonable legal expenses
relating to the sale of the Employee's existing home within two years from
the Employee's Commencement Date. These payments will be subject to the
same required statutory withholdings in Canada as base salary.
4. Reimbursement for reasonable legal expenses on the Employee's purchase of a
home in Greater Vancouver within two years from the Employee's Commencement
Date and subject to a maximum reimbursement of $2,000.00.
5. Reimbursement of the B.C. Property Purchase Tax paid on the Employee's
residence.
6. Moving costs for household possessions, including two (2) automobiles, and
excluding bulky items of low value. QLT will assign a corporate moving
company.
7. Moving expenses incurred as a result of moving from the Employee's interim
accommodations to the Employee's permanent residence in the Greater
Vancouver area, to a maximum of $2,000.00. QLT will assign a corporate
moving company.
8. Reimbursement for the rental of an economy car for a one-month period if
necessary.
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EXHIBIT 10.78
9. One-way air fares for the Employee and the Employee's immediate family from
the Employee's present location to Vancouver at the time of the move (or
return air fare for the Employee if the Employee relocates to Vancouver
prior to the Employee's family).
10. Accountable allowance: Reimbursement of up to $10,000.00 to cover other
reasonable expenses associated with the Employee's move. The attached list
"Other Allowable Expenses" outlines those moving-related expenses which
Revenue Canada allows us to reimburse the Employee for without incurring a
taxable benefit. Supporting receipts will be required.
11. Non-accountable allowance: As part of the Employee's relocation, the
Employee will likely incur a number of incidental expenses which may not
appear on the attached list (eg. cleaning costs). QLT will reimburse the
Employee for these costs up to $650.00 on a tax-free basis in line with
Revenue Canada's accepted policy for non-accountable allowances (this is in
addition to the accountable allowance noted above). Note that we do not
require the Employee to supply supporting receipts for this reimbursement,
however, the Employee will be required to provide us with a memo certifying
that the Employee incurred at least this much in incidental costs. Any
additional reimbursement the Employee receive for "incidentals" that are
not on the attached list will be considered a taxable benefit.
POTENTIAL REPAYMENT OF RELOCATION ASSISTANCE. In the event of a termination of
employment by the Employee pursuant to Section 5.2 within twenty-four (24)
months from the Commencement Date, the Employee shall be required to reimburse
the Company for a portion of the financial assistance provided by the Company
under this Schedule "A". The amount of the repayment shall be computed by
prorating the amount of the financial assistance by the time remaining in the
twenty-four (24) month period. Such amount shall be payable to the Company
within one hundred and twenty (120) days of the termination of this Agreement.
RELOCATION ASSISTANCE UPON TERMINATION BY THE COMPANY. In the event of a
termination by the Company, other than for just cause, within twenty-four (24)
months from the Commencement Date, the Company shall provide financial
assistance for the Employee to relocate to another location in North America for
purposes of new employment. The amount of such financial assistance shall be
computed in accordance with this Schedule "A", but in no event shall the amount
payable exceed the amount payable under Schedule "A". In addition, the
assistance will only be provided by the Company in the event that the relocation
by the Employee occurs within six (6) months from the date of termination of
employment by QLT.
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EXHIBIT 10.78
SCHEDULE 2.2
ADDITIONAL COMPENSATION
1. A home relocation loan of $100,000.00 (U.S.) payable to you upon purchase
of a home in Greater Vancouver within two years from your Commencement
Date. The loan will be non-interest bearing and forgivable over a 3-year
period with 33% forgivable each year of continuous employment from the date
of the loan. There are certain taxable benefit implications associated with
non-interest bearing, forgivable home relocation loans. The loan will be
secured by a mortgage granted by you to QLT. In the event that your
employment is terminated (for any reason) prior to the end of the 3-year
period, the outstanding balance of the loan will revert to an
interest-bearing loan due the earlier of the end of the 3-year period or
the date of the sale of the house. The loan will convert to interest
bearing at the commercial rate for mortgage loans of the same duration.
2. QLT will make a recommendation to the Board of Directors, at the next
scheduled Board meeting, to approve the option for the Employee to purchase
40,000 common shares of QLT. The options will have a five-year term from
the date of grant and will vest monthly over three years. The exercise
price of these signing options will be determined by the closing price on
the Toronto Stock Exchange on the day prior to granting.
3. QLT will pay the Employee tax differential payments on a monthly basis
based on 25% of the Employee's base salary for the Employee's first year of
employment, 20% for the Employee's second year, 15% for the Employee's
third year, and 10% for the Employee's fourth year, ending after
forty-eight (48) months of employment. These payments will be subject to
the same required statutory withholdings in Canada as base salary.
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