EXHIBIT 10.41
EMPLOYMENT AGREEMENT
This Employment Agreement dated for reference December 9, 2005.
BETWEEN:
QLT USA, INC., having an address of 2579 Midpoint Drive, Fort
Collins, Colorado, 80525, USA.
("QLT USA")
AND:
MICHAEL R. DUNCAN, having an address of ####, Colorado, ###, USA.
("MR. DUNCAN")
WHEREAS:
A. Mr. Duncan has been employed by QLT USA and its predecessor, Atrix
Laboratories, Inc., and currently holds the position of President of QLT
USA.
B. QLT USA and Mr. Duncan wish to enter into this Agreement to confirm the
terms and conditions of Mr. Duncan's employment with QLT USA.
NOW THEREFORE in consideration of the payment by QLT USA to Mr. Duncan of
$100.00, 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 USA and Mr. Duncan agree as
follows:
1. POSITION AND DUTIES
1.1 POSITION - Currently, Mr. Duncan holds the position of President of QLT
USA. Mr. Duncan acknowledges that QLT USA is undergoing a strategic
evaluation and that, as a result of that evaluation, Mr. Duncan's
responsibilities and title may be altered to focus on the management of
the manufacturing facility and generic dermatology business at QLT USA. As
a result, Mr. Duncan agrees that the Board of Directors of QLT USA (the
"Board"), may require that Mr. Duncan's title be altered in the future to
reflect any such different or more focused responsibilities provided that
such position is at a level of Senior Vice President (including General
Manager of a division) of QLT USA . Until such time as his title is so
altered by the Board, Mr. Duncan will hold the position of President of
QLT USA. Mr. Duncan agrees to be employed by QLT USA in this position (as
may be altered in accordance with the foregoing), subject to the terms and
conditions of this Agreement.
1.2 DUTIES, REPORTING AND EFFORTS - In the performance of his duties on behalf
of QLT USA, Mr. Duncan will:
(a) OVERALL RESPONSIBILITIES - Under the direction of the Board of
Directors of QLT USA (the "Board") and in consultation with the
Chief Executive Officer of QLT Inc., have overall responsibility for
such areas as may be directed by the Board from time to time.
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(b) REPORT - Report, as and when required, to the Board.
(c) BEST EFFORTS - Use his best efforts, industry and knowledge to
improve and increase QLT USA's business and to ensure that QLT USA
is at all times in compliance with applicable state, federal and
other governing statutes, policies and regulations pertaining to QLT
USA business.
(d) WORKING DAY - Devote the whole of his working day attention and
energies to the business and affairs of QLT USA.
2. COMPENSATION
2.1 ANNUAL COMPENSATION - In return for his services under this Agreement, QLT
USA agrees to pay or otherwise provide the following total annual
compensation to Mr. Duncan:
(a) BASE SALARY - A base salary in the amount of $282,920 (U.S.) in 24
equal installments payable semi-monthly in arrears, subject to
periodic annual reviews at the discretion of the Board of QLT USA
and the Executive Compensation Committee of the Board of Directors
of QLT Inc.
(b) BENEFIT PLANS - Coverage for Mr. Duncan and his eligible dependents
under any employee benefit plans provided by/through QLT USA to its
employees, subject to:
I. Each plan's terms for eligibility,
II. Mr. Duncan 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.
(c) EXPENSE REIMBURSEMENT - Reimbursement, in accordance with QLT USA's
policies (as amended from time to time and approved by the Board),
of all reasonable business related promotion, entertainment and/or
travel expenses incurred by Mr. Duncan, subject to him maintaining
proper accounts and providing documentation for these expenses upon
request.
(d) VACATION - That number of weeks of paid vacation per year as
determined in accordance with QLT USA's standard vacation policy for
executive level employees approved by the Board. As per QLT USA's
policies (as amended from time to time), unless agreed to in writing
by the Board:
I. All vacation must be taken in the calendar year in which it is
earned by Mr. Duncan, and
II. Vacation entitlement will not be cumulative from year to year.
(e) CASH INCENTIVE COMPENSATION PLAN - Participation in the Cash
Incentive Compensation Plan offered by QLT USA to its senior
management in accordance with the terms of such Plan, as amended
from time to time by the Board. Under the Cash Incentive
Compensation Plan, Mr. Duncan will be eligible to receive each year
as a lump sum payment an amount up to that specified in advance by
the Board of Directors of QLT Inc. and the Board of QLT USA, in
their sole discretion. The amount of that payment each year will be
determined at the sole discretion of the Board of Directors of QLT
Inc. and the Board of QLT USA following the completion of each
fiscal year of QLT USA and will be based on the performance of Mr.
Duncan, QLT USA and QLT Inc. relative to pre-set corporate and
individual objectives and milestones for the immediately preceding
fiscal year. Mr. Duncan will not be eligible to receive any such
amount in 2005 for the preceding fiscal year but will be eligible to
receive that incentive payment in 2006 and subsequent years, based
on his employment in 2005 and in subsequent years.
(f) STOCK OPTION PLAN - Participation in any stock option plan offered
by QLT USA to its employees, in accordance with the terms of the
plan in effect at the time of the stock option offer(s).
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3. RESIGNATION
3.1 RESIGNATION - Mr. Duncan may resign from his employment with QLT USA by
giving QLT USA 60 days prior written notice (the "RESIGNATION NOTICE") of
the effective date of his resignation. On receiving a Resignation Notice,
QLT USA may elect to provide the following payments in lieu of notice to
Mr. Duncan and require him to leave the premises forthwith:
(a) BASE SALARY - Base salary owing to Mr. Duncan 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 Mr. Duncan and his eligible dependents prior to the date of his
Resignation Notice will continue to the extent permitted by the
applicable benefit plan provider. Mr. Duncan acknowledges and agrees
that pension (including 401(k) contributions) and short and long
term disability plans provided through QLT USA will not be continued
beyond the last day that Mr. Duncan works at QLT USA's premises (the
"LAST ACTIVE DAY"). Mr. Duncan's entitlement to any continuation of
group health insurance benefits after the effective date of his
resignation will be determined in accordance with, and subject to
Mr. Duncan's compliance with, the Comprehensive Omnibus
Reconciliation Act of 1985, as amended ("COBRA") and limited to the
continuation period prescribed therein.
(c) EXPENSE REIMBURSEMENT - Reimbursement (in accordance with QLT USA's
Policy and Procedures Manual, as amended from time to time) of all
reasonable business related promotion, entertainment and/or travel
expenses incurred by Mr. Duncan prior to his 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 Mr. Duncan as at the expiry of the 60-day notice period.
3.2 OTHERS - In the event of resignation of Mr. Duncan as set out in paragraph
3.1, the parties agree:
(a) NO BONUS - Mr. Duncan will have no entitlement to participate in QLT
USA's Cash Incentive Compensation Plan for the year in which he
resigns his employment with QLT USA; and
(b) STOCK OPTION PLAN - Mr. Duncan's participation in any stock option
plan offered by QLT USA to its employees will be in accordance with
the terms of the plan in effect at the time of the stock option
offer(s) to Mr. Duncan.
4. RETIREMENT
4.1 RETIREMENT - Effective the date of retirement (as defined in QLT USA's
policies, as amended from time to time and approved by the Board) of Mr.
Duncan from active employment with QLT USA, 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 - Mr. Duncan's participation in any stock option plan
offered by QLT USA to its employees will be in accordance with the
terms of the plan in effect at the time of the stock option offer(s)
to Mr. Duncan.
(c) COBRA BENEFITS - Mr. Duncan's entitlement to any continuation of any
group health insurance benefits after the effective date of his
retirement will be determined in accordance with, and subject
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to Mr. Duncan's compliance with, COBRA and limited to the
continuation period prescribed therein.
5. TERMINATION
5.1 TERMINATION FOR CAUSE - QLT USA reserves the right to terminate Mr.
Duncan's employment at any time for any reason. Should Mr. Duncan be
terminated for cause, he will not be entitled to any advance notice of
termination or pay in lieu thereof. As used in this Agreement, "cause"
means:
(a) if Mr. Duncan materially violates any term of his employment, the
Proprietary Information and Inventions Agreement for Employees entered
into between QLT USA (formerly Atrix Laboratories, Inc.) on May 30, 2002,
or any policy of QLT USA or policy of QLT Inc. applicable to QLT USA or
Mr. Duncan, including, without limitation, the Insider Trading Policy,
Code of Ethics, Code of Exemplary Conduct and Sexual Harassment Policy of
QLT USA and/or QLT Inc.;
(b) willful misfeasance, gross negligence or nonfeasance of duty by Mr.
Duncan that is reasonably likely to be detrimental or damaging or that has
the effect of injuring or damaging the reputation, business or business
relationships of QLT USA or any of its affiliates (including QLT Inc.) or
any of their respective officers, directors or employees;
(c) any arrest, indictment (defined as any proceeding in which "probable
cause" is found), conviction (or the civil equivalent) of Mr. Duncan or a
plea of guilty or nolo contendere by Mr. Duncan by Mr. Duncan to a charge
based on a federal or state felony or serious criminal or civil offense
(even if the crime is classified under the applicable law as a
"misdemeanor"), including, but not limited to (1) crimes or civil offenses
involving theft, embezzlement, fraud, dishonesty or moral turpitude; (2)
crimes or civil offenses based on banking or securities laws (including
the Sarbanes-Oxley Act of 2002); and (3) civil enforcement actions brought
by federal or state regulatory agencies (including the Securities and
Exchange Commission); or
(d) willful or prolonged and unapproved absence from work by Mr. Duncan or
failure, neglect or refusal by Mr. Duncan to perform his duties and
responsibilities as determined by the Board in its sole discretion.
5.2 TERMINATION OTHER THAN FOR CAUSE - QLT USA reserves the right to terminate
Mr. Duncan's employment at any time other than for cause. However, if QLT
USA terminates Mr. Duncan's employment for any reason other than for cause
then, except in the case of Mr. Duncan becoming completely disabled (which
is provided for in paragraph 5.6) and subject to the provisions set forth
below, Mr. Duncan will 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. Notwithstanding the foregoing, in the event QLT
USA in its sole discretion elects to pay the Severance Pay (as defined
below) in lieu of notice, payment of the Severance Pay will be subject to,
and will be made 10 days after, receipt by QLT of a release properly
executed by Mr. Duncan, which release will be in the form set out in
SCHEDULE A. In the event that Mr. Duncan fails to execute and deliver to
QLT USA that release within 10 days after the termination of Mr. Duncan's
employment, QLT USA will not be obligated to pay or provide to Mr. Duncan
the Severance Pay.
Notwithstanding the foregoing, Mr. Duncan agrees that:
(a) any change in his position, responsibilities or reporting relationship
or any request to transition his employment from QLT USA to QLT Inc. (and,
if necessary to relocate to Vancouver, British Columbia, with relocation
costs paid by the Company or QLT Inc., including relocation costs back to
Colorado or a destination of reasonably comparable distance in the event
that Mr. Duncan's employment is terminated without cause within 24 months
after being relocated to Vancouver) will not be considered a termination
without cause or give rise to any right under this Section 5.2 or Section
5.3; and
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(b) in the event that Mr. Duncan's employment with QLT USA is terminated
in connection with the sale of all or a portion of the business of QLT USA
to a purchaser:
(i) in which Mr. Duncan or any member of his immediate family
directly or indirectly holds an equity interest equal to or greater
than 5%, or
(ii) that offers to Mr. Duncan employment with the purchaser which
provides to Mr. Duncan financial compensation and benefits
(excluding stock options) which are in the aggregate substantially
the same as those enjoyed by Mr. Duncan prior to such sale,
then Mr. Duncan shall not be entitled to any Severance Pay under paragraph
5.3(a), Benefits Compensation under paragraph 5.3(b) or out-placement
counseling under paragraph 5.3(c) but Mr. Duncan shall remain entitled to
the other amounts payable under paragraph 5.3(d) up to and including his
Last Active Day.
5.3 SEVERANCE NOTICE AND PAY - In the event QLT USA terminates Mr. Duncan's
employment as set out in paragraph 5.2, Mr. Duncan will, subject to
paragraph 5.5, 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 six months Severance Notice, or Severance Pay in
lieu thereof, and
II. One additional month's Severance Notice for each complete year
of continuous employment with QLT USA. For greater certainty,
for the purposes of determining the number of complete years
of continuous employment with QLT USA, all years in which Mr.
Duncan was employed by QLT USA and its predecessor, Atrix
Laboratories, Inc. will be included in such calculation,
(the cumulative time referred to in I and II above being referred to
as the "NOTICE PERIOD")
up to a maximum total of 24 months' Severance Notice, or Severance
Pay in lieu of Severance Notice. Mr. Duncan 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 QLT USA's discretion.
(b) HEALTH AND LIFE INSURANCE BENEFITS - If:
I. Mr. Duncan elects continued coverage under QLT USA's health plan
pursuant to the COBRA, then QLT USA will continue to pay Mr. Duncan
QLT USA's portion of the premium for Mr. Duncan's continued coverage
under the QLT USA health plan until the first to occur of (A) the
expiry of the Notice Period, and (B) the date on which Mr. Duncan's
COBRA continuation period terminates in accordance with COBRA; and
II. Mr. Duncan elects continued coverage under QLT USA's life
insurance plan, then QLT USA will continue to pay QLT USA's portion
of the premium for Mr. Duncan's continued coverage under QLT USA's
life insurance plan, or if continued coverage under QLT USA's life
insurance plan is not available pursuant to the terms of such plan,
then QLT USA will pay to Mr. Duncan the amount of the premium that
would otherwise be payable by QLT USA if Mr. Duncan's employment
were not terminated until the end of the Notice Period. Mr. Duncan
acknowledges and agrees that pension and short and long term
disability plans provided through QLT USA will not be continued
beyond Mr. Duncan's Last Active Day.
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(collectively, the "BENEFITS COMPENSATION")
(c) OUT PLACEMENT COUNSELING - In the event QLT USA terminates Mr.
Duncan's employment as set out in paragraph 5.2, in the year
following termination, QLT USA will pay to an out placement
counseling service (to be agreed to by Mr. Duncan and QLT USA) a
maximum of US$5,000 for assistance rendered to Mr. Duncan in seeking
alternative employment.
(d) OTHER COMPENSATION - In the event QLT USA terminates Mr. Duncan's
employment as set out in paragraph 5.2, the parties further agree as
follows:
I. QLT USA will reimburse (in accordance with QLT USA's policies,
as amended from time to time) Mr. Duncan for all reasonable
business related promotion, entertainment and/or travel
expenses incurred by Mr. Duncan prior to the date of
termination, subject to the expense reimbursement provisions
set out in subparagraph 2.1(c).
II. QLT USA will make a payment to Mr. Duncan in respect of his
accrued but unpaid vacation pay to the date of termination.
III. QLT USA will make a prorated payment to Mr. Duncan in respect
of his entitlement to participate in QLT USA's Cash Incentive
Compensation Plan, the pro-ration to be with respect to the
portion of the current calendar year worked by Mr. Duncan and
the entitlement to be at the level Mr. Duncan would have
otherwise been eligible to receive in the current calendar
year as if all personal and corporate goals were met but not
exceeded.
IV. Mr. Duncan's participation in any stock option plan offered by
QLT USA to its employees will be in accordance with the terms
of the plan in effect at the time of the stock option offer(s)
to Mr. Duncan.
5.4 ACKNOWLEDGEMENT - Mr. Duncan acknowledges and agrees that in the event QLT
USA terminates Mr. Duncan'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);
QLT USA will have no further obligations, statutory or otherwise, to Mr.
Duncan in respect of this Agreement and Mr. Duncan's employment under this
Agreement.
5.5 DUTY TO MITIGATE AND NOTICE OF NEW EMPLOYMENT
Mr. Duncan acknowledges and agrees that if his employment is terminated as
set out in paragraph 5.2, his entitlement to Severance Pay, Benefits
Compensation and other compensation as set out in paragraph 5.3 is subject
to his duty to mitigate such payments by looking for and accepting
alternative employment or contract(s) for services. If Mr. Duncan obtains
new employment or contract(s) for services of four weeks or longer, Mr.
Duncan agrees that he will notify QLT USA 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:
(a) Mr. Duncan acknowledges and agrees that his entitlement to
Severance Pay and Benefits Compensation will cease as of the date on
which his new employment or contract for services commences.
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(b) Within 10 working days of receipt of the New Employment Notice
from Mr. Duncan, QLT USA agrees that it will pay Mr. Duncan a lump
sum amount equivalent to 50% of the Severance Pay and Benefits
Compensation as set out in paragraph 5.3 otherwise owing to Mr.
Duncan for the balance of the Severance Notice period.
5.6 TERMINATION DUE TO INABILITY TO ACT
(a) TERMINATION - QLT USA may immediately terminate this Agreement by
giving written notice to Mr. Duncan if he becomes completely
disabled (defined below) to the extent that he cannot perform his
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 USA
and Mr. Duncan. Notwithstanding the foregoing, QLT USA agrees that
it will not terminate Mr. Duncan pursuant to this provision unless
and until Mr. Duncan 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 Mr. Duncan's employment
with QLT USA pursuant to the provisions of this paragraph 5.8, QLT
USA agrees to pay to Mr. Duncan Severance Pay and Benefits
Compensation as set out in paragraph 5.3 and in this situation:
I. While he is completely disabled Mr. Duncan will have no duty
to mitigate the payments owing to him by looking for and
accepting suitable alternative employment or contract(s) for
service, and
II. If Mr. Duncan 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) will
apply.
(c) DEFINITION - The term "completely disabled" as used in this
paragraph 5.8 will mean the inability of Mr. Duncan to perform the
essential functions of his 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 Mr. Duncan from
satisfactorily performing any and all essential functions of his
position for QLT USA during the foreseeable future.
5.7 DEATH - Except as set out below, effective the date of death (the "DATE OF
DEATH") of Mr. Duncan, this Agreement and both parties' rights and
obligations under this Agreement will 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), QLT USA will pay the
following amounts to Mr. Duncan's estate:
(a) BASE SALARY - Base salary owing to Mr. Duncan up to his Date of
Death.
(b) COBRA BENEFITS - The entitlement of Mr. Duncan's eligible dependents
to any continuation of any group health insurance benefits after the
effective date of his death will be determined in accordance with,
and subject to compliance by Mr. Duncan's eligible dependents with,
COBRA and limited to the continuation period prescribed therein.
(c) EXPENSE REIMBURSEMENT - Reimbursement (in accordance with QLT USA's
Policy and Procedures
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Manual, as amended from time to time) of all reasonable business
related promotion, entertainment and/or travel expenses incurred by
Mr. Duncan prior to his 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 Mr. Duncan as at his Date of Death.
(e) BONUS - A prorated payment to Mr. Duncan in respect of his
entitlement to participate in QLT USA's Cash Incentive Compensation
Plan, the pro-ration to be with respect to the portion of the
current calendar year worked by Mr. Duncan and the entitlement to be
at the maximum level Mr. Duncan would have otherwise been eligible
to receive in the current calendar year if all corporate and
individual goals were met but not exceeded.
After his Date of Death, Mr. Duncan's participation and/or entitlement
under any stock option plan offered by QLT USA to its employees will be in
accordance with the terms of the plan in effect at the time of the stock
option offer(s) to Mr. Duncan.
5.8 NO DUPLICATION - In the event that the Severance Pay provisions of this
Agreement and the payment provisions of any other agreement that has
previously or may subsequently be entered into between QLT USA (including
Atrix Laboratories, Inc.) and Mr. Duncan with respect to a change of
control of QLT USA or QLT Inc. are both applicable, Mr. Duncan agrees that
he will give written notice to QLT USA with respect to which agreement he
wishes to be paid out under and that he is not entitled to severance pay
under both agreements.
5.9 FUNDAMENTAL BREACH - Mr. Duncan acknowledges and agrees that failure by
him to provide the New Employment Notice to QLT USA within five working
days as set out in paragraph 5.5(a), or him providing employment or
contract(s) for services to a company which is in direct competition with
QLT USA in breach of paragraph 8.1, will be deemed to be a fundamental
breach of this Agreement and QLT USA's obligations to pay Severance Pay,
Benefits Compensation and other compensation as set out in paragraph 5.3
will cease immediately.
5.10 INTERNAL REVENUE CODE SECTION 409A - To the extent applicable, this
Agreement will be interpreted in accordance with Section 409A of the
Internal Revenue Code ("CODE") and Department of Treasury regulations and
other interpretive guidance issued thereunder. Notwithstanding anything to
the contrary in this Agreement, in the event that QLT USA determines that
amounts payable under this Agreement may be subject to Code Section 409A,
QLT USA may adopt such amendments to this Agreement or adopt other
policies and procedures (including amendments, policies and procedures
with retroactive effect), or take any other actions that QLT USA
determines are necessary or appropriate to (a) exempt the Award from Code
Section 409A and/or preserve the intended tax treatment of the benefits
provided with respect to the payments under this Agreement, or (b) comply
with the requirements of Code Section 409A and related Department of
Treasury guidance. Mr. Duncan acknowledges that compliance with Code
Section 409A may require that payments under the Agreement be delayed
until the end of six months following Mr. Duncan's termination of
employment.
6 CONFLICT OF INTEREST
6.3 AVOID CONFLICT OF INTEREST - Except as set out below, during the term of
his employment with QLT USA, Mr. Duncan agrees to conduct himself at all
times so as to avoid any real or apparent conflict of interest with the
activities, policies, operations and interests of QLT USA, QLT Inc. or any
of their respective affiliates or subsidiaries. To avoid improper
appearances, Mr. Duncan agrees that he will not accept any financial
compensation of any kind, nor any special discount or loan from persons,
corporations or organizations having dealings or potential dealings with
QLT USA or QLT Inc., either as a customer or a supplier or a co-venturer.
QLT USA and Mr. Duncan acknowledge and agree that from
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time to time the Board may consent in writing to activities by Mr. Duncan
which might otherwise appear to be a real or apparent conflict of
interest.
6.4 NO FINANCIAL ADVANTAGE - During the term of his employment with QLT USA,
Mr. Duncan agrees that neither he nor any members of his immediate family
will take financial advantage of or benefit financially from information
that is obtained in the course of his employment related duties and
responsibilities unless the information is generally available to the
public.
6.5 COMPLY WITH POLICIES - During the term of his employment with QLT USA, Mr.
Duncan agrees to comply with all written policies issued by QLT USA
dealing with conflicts of interest.
7. CONFIDENTIALITY AND INTELLECTUAL PROPERTY
7.1 CONFIDENTIALITY AND INTELLECTUAL PROPERTY OWNERSHIP - The parties
incorporate by reference the terms of that separate Proprietary
Information and Inventions Agreement For Employees entered into between
QLT USA (formerly Atrix Laboratories, Inc.) and Mr. Duncan dated May 30,
2002, which agreement forms a material part of this Agreement.
7.2 NO USE OF FORMER EMPLOYER'S MATERIALS - Mr. Duncan certifies that he has
not brought to QLT USA and will not use while performing his employment
duties for QLT USA any materials or documents of any 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 USA by the former
employer.
8. POST-EMPLOYMENT RESTRICTIONS
8.1 NON-COMPETE - Mr. Duncan acknowledges that by virtue of his senior
position with QLT USA, he has intimate knowledge of the business, products
and customers of QLT USA and, by virtue of his participation on the
executive committee for the global QLT group, has intimate knowledge of
the business, products and customers of QLT Inc. and its other affiliates
and subsidiaries. As a result, Mr. Duncan agrees that, without the prior
written consent of the Board, for a period of one year following
termination of his employment with QLT USA for any reason (by resignation
or otherwise), as measured from his Last Active Day, Mr. Duncan will 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
USA 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, ophthalmic, dermatology,
urology and auto-immune disease,
II. The development and/or commercialization and/or marketing of
pharmaceutical products that are directly competitive with QLT
Inc. or QLT USA's then current commercial products, Visudyne
or Eligard or any other products then being commercialized by
or on behalf of QLT USA, QLT Inc. or its affiliates or
subsidiaries which have worldwide annual net sales of
U.S.$50,000,000 or more in the calendar year preceding Mr.
Duncan's Last Active Day, or
III. the development and/or commercialization and/or marketing of
pharmaceutical products that are based on a polymer based drug
delivery technology platform and are used in the treatment of
substantially the same medical indications as products which
have become a significant component of QLT Inc. or QLT USA's
core business or the core business of any affiliate or
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subsidiary of QLT,
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 USA employee or QLT USA customer or
known prospective customer of QLT USA on behalf of any business,
firm or corporation that, as part of conducting its business, is in
any way competitive with QLT USA 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, ophthalmic, dermatology,
urology and auto-immune disease,
II. The development and/or commercialization and/or marketing of
pharmaceutical products that are directly competitive with QLT
Inc. or QLT USA's then current commercial products, Visudyne
or Eligard or any other products then being commercialized by
or on behalf of QLT USA, QLT Inc. or its affiliates or
subsidiaries which have worldwide annual net sales of
U.S.$50,000,000 or more in the calendar year preceding Mr.
Duncan's Last Active Day, or
III. the development and/or commercialization and/or marketing of
pharmaceutical products that are based on a polymer based drug
delivery technology platform and are used in the treatment of
substantially the same medical indications as products which
have become a significant component of QLT Inc. or QLT USA's
core business or the core business of any affiliate or
subsidiary of QLT,
anywhere in Canada, the United States or Europe.
(c) SOLICIT EMPLOYEES - Directly or indirectly solicit any individual to
leave the employment of QLT USA, QLT Inc. or any of their affiliates
or subsidiaries for any reason or interfere in any other manner with
the employment relationship existing between QLT USA, QLT Inc. or
any of their affiliates or subsidiaries and their 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 USA, QLT Inc. or any of their affiliates or
subsidiaries to cease doing business with QLT USA, QLT Inc. or any
of their affiliates or subsidiaries or in any way interfere with the
existing business relationship between any such customer, supplier,
distributor, licensee or other business relation and QLT USA, QLT
Inc. or any of their affiliates or subsidiaries.
8.2 MINORITY SHARE INTERESTS ALLOWED - The parties agree that nothing
contained in paragraph 8.1 is intended to prohibit Mr. Duncan from owning
any minority interest in any company where stock or shares are traded
publicly.
9. REMEDIES
9.1 IRREPARABLE DAMAGE - Mr. Duncan acknowledges and agrees that:
(a) BREACH - Any breach of any provision of this Agreement could cause
irreparable damage to QLT USA; and
(b) CONSEQUENCES OF BREACH - In the event of a breach of any provision
of this Agreement by him, QLT USA will 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 of any of
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the provisions of this Agreement including, without limitation, the
provisions of paragraphs 7 and 8.
9.2 INJUNCTION - In the event of any dispute under paragraphs 7 and/or 8, Mr.
Duncan agrees that QLT USA will be entitled, without showing actual
damages, to a temporary or permanent injunction restraining his conduct,
pending a determination of such dispute and that no bond or other security
will be required from QLT USA in connection therewith.
9.3 ADDITIONAL REMEDIES - Mr. Duncan acknowledges and agrees that the remedies
of QLT USA specified in this Agreement are in addition to, and not in
substitution for, any other rights and remedies of QLT USA 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 USA
may have recourse to any one or more of its available rights and remedies
as it will see fit.
10. GENERAL MATTERS
10.1 TAX WITHHELD - The parties acknowledge and agree that all payments to be
made by QLT USA to Mr. Duncan under this Agreement will be subject to QLT
USA's withholding of applicable withholding taxes.
10.2 INDEPENDENT LEGAL ADVICE - Mr. Duncan acknowledges that he 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 will 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 will be governed by
and interpreted in accordance with the laws of the state of Colorado. All
disputes arising under this Agreement will be referred to the Courts of
the state of Colorado, 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 will be in writing and will be delivered
personally or by facsimile transmission as follows:
(a) IF TO QLT USA - Attention: Board of Directors of QLT USA, Inc.
2579 Midpoint Drive
Fort Collins, Colorado
80525, USA
Fax No. (970) 482-9735
WITH A COPY TO:
QLT Inc.
887 Great Northern Way
Vancouver, British Columbia
V5T 4T5, Canada
Attention: Chief Executive Officer
Fax No. (604) 707-7001
(b) IF TO MR. DUNCAN - To the address on page 1;
or to such other addresses and persons as may from time to time be
notified in writing by the parties. Any notice delivered personally will
be deemed to have been given and received at the time of delivery. Any
notice delivered by facsimile transmission will be deemed to have been
given and received on the
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next business day following the date of transmission.
10.6 SURVIVAL OF TERMS
(a) MR. DUNCAN'S OBLIGATIONS - Mr. Duncan acknowledges and agrees that
his representations, warranties, covenants, agreements, obligations
and liabilities under any and all of paragraphs 7, 8 and 10 of this
Agreement will survive any termination of this Agreement.
(b) QLT USA'S OBLIGATIONS - QLT USA acknowledges and agrees that its
representations, warranties, covenants, agreements, obligations and
liabilities under any and all of paragraphs 3, 4, 5 and 10 of this
Agreement will survive any termination of this Agreement.
(c) WITHOUT PREJUDICE - Any termination of this Agreement will 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 will only be effective if in writing signed by the party
against whom the waiver is sought to be enforced, and no waiver will be
implied by indulgence, delay or other act, omission or conduct. Any waiver
will 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 Proprietary Information and Inventions Agreement for
Employees dated May 30, 2002 entered into between Mr. Duncan and QLT USA
(formerly Atrix Laboratories, Inc.), any Stock Option Agreements and
agreements relating to a change of control of QLT Inc. entered into
between QLT USA and Mr. Duncan constitute the entire agreement between QLT
USA and Mr. Duncan with respect to the subject matters hereof and thereof,
and supersede all previous communications, understandings and agreements
(whether verbal or written) between QLT USA and Mr. Duncan regarding the
subject matters hereof and thereof. To the extent that there is any
conflict between the provisions of this Agreement and any Stock Option
Agreements between QLT USA and Mr. Duncan, the following provisions will
apply:
(a) CHANGE OF CONTROL - If the conflict is with respect to an event,
entitlement or obligation in the case of a Change of Control of QLT
Inc. (as defined in any agreement relating to a change of control of
QLT Inc. entered into between QLT USA and Mr. Duncan), the
provisions of that change of control agreement will govern (unless
Mr. Duncan otherwise elects as contemplated in paragraph 5.8 of this
Agreement).
(b) STOCK OPTIONS - If the conflict is with respect to an entitlement or
obligation with respect to stock options of QLT USA, the provisions
of the Stock Option Agreements will govern (unless the parties
otherwise mutually agree).
(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 will 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.
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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 will 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 will 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 will only be effective if the
amendment is in writing and is signed by QLT USA and Mr. Duncan.
IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year first written above.
QLT USA, INC.
BY: ___________________________
_______________________________
MICHAEL R. DUNCAN
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SCHEDULE A
RELEASE
EMPLOYEE ACKNOWLEDGEMENT AND RELEASE
RELEASE
In exchange for my receipt of severance pay and other benefits to which I am not
otherwise entitled, I hereby release acquit and forever discharge QLT USA, Inc.,
including its officers, directors, agents, attorneys, servants, employees,
stockholders, successors, assigns, subsidiaries and affiliates (collectively
"QLT USA"), of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys fees, damages, indemnities and obligation of
every kind and nature, in law, equity or otherwise, known and unknown, suspected
and unsuspected, disclosed and undisclosed, arising at any time before and
including my employment termination date, including, but not limited to:
(a) any and all such claims and demands directly or indirectly arising
out of or in any way relation to my employment and the termination
of my employment, claims or demands related to salary, bonuses,
commissions, stock, stock options, or any other ownership interests
in QLT USA (including QLT Inc.), vacation pay, fringe benefits,
expense, reimbursements, sabbatical benefits, severance benefits, or
any other form of compensation;
(b) claims pursuant to any federal, state or local law or cause of
action, as amended, including but not limited to the: Federal Age
Discrimination in Employment Act ("ADEA"), Title VII of the Civil
Rights Act of 1964, Civil Rights Act of 1866, Fair Labor Standards
Act, Older Workers Benefit Protection Act, Employee Retirement
Income Security Act, Family and Medical Leave Act, Americans with
Disabilities Act, Colorado Wage Act and Colorado Anti-Discrimination
Act; and
(c) any and all claims related to wrongful discharge, harassment, breach
of the covenant of good faith and fair dealing, contract law, tort
law, discrimination, fraud, negligence, personal injury, loos of
income, defamation or emotional distress.
I acknowledge that, among other things, I am waiving and releasing any rights I
may have under the ADEA, that this waiver and release is knowing, voluntary and
willing, and that the consideration given for this waiver and release is in
addition to anything of value to which I was already entitled as an employee of
QLT USA. I further acknowledge that I have been advised that:
(a) the waiver and release granted herein does not relate to claims
which may arise after this release is executed;
(b) I should consult with an attorney prior to executing this release
(although I may voluntarily choose not to do so);
(c) I have (45 days if my age is 40 or over and 21 days if I am under
the age of 40) beginning the day after I receive this release in
which to consider it, after which QLT USA's offer to enter into the
Letter Agreement, to which this release is
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attached, will be terminated and withdrawn if I have not executed
the Letter Agreement and this release (although I may voluntarily
choose to execute the documents earlier);
(d) I have seven (7) days beginning the day after I execute this release
to revoke my consent to the release. I agree that the revocation
must be in writing and hand-delivered or mailed to QLT USA, Inc. If
mailed, the revocation must be postmarked within the seven (7) day
period, properly addressed to QLT USA, Inc. at 2579 Midpoint Drive,
Fort Collins, Colorado, U.S.A., 80525, Attention: President, and
sent by certified mail, return receipt requested. I understand that
I will not receive any payment under this Letter Agreement if I
revoke the Letter Agreement and in any event, I understand that I
will not receive any settlement payment until after the seven (7)
day revocation period has expired;
(e) the Letter Agreement shall not be effective and enforceable and no
severance paid until the seven (7) day revocation period has
expired;
(f) by executing the Letter Agreement and this release I am representing
that I am entering into these agreements and releases based upon my
own knowledge and judgement and that I have not relied on any
representations or promises of QLT USA other than those contained in
the Letter Agreement and this release;
(g) if any facts or matters upon which I have relied in entering into
the Letter Agreement and this release shall later prove to be
otherwise, the Letter Agreement and this release shall nevertheless
remain in full force and effect; and
(h) by executing the Letter Agreement and this release I am representing
that I am entering into these agreements and releases voluntarily,
without coercion, and with full knowledge that they are intended, to
the maximum extent permitted by law, as a complete and final
releases and waiver of any and all of my claims.
I also acknowledge that a general release does not extend to claims that the
creditor does no know or suspect to exist in the creditor's favor at the time of
executing the release, which if known by the creditor would and must have
materially affected the creditor's settlement with the debtor. I hereby
expressly waive and relinquish all rights and benefits under any such principal
of law in any jurisdiction with respect to any unknown or unsuspected claims I
may have against QLT USA.
I HAVE READ AND UNDERSTOOD, AND I AGREE COMPLETELY TO THE TERMS STATED ABOVE.
Date:_____________________ By:_______________________
_______________________
Printed Name
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