Exhibit 10.53
EMPLOYMENT AGREEMENT
     THIS EMPLOYMENT AGREEMENT (“Agreement”), dated as of May 7, 2008 to be
effective May 8, 2008 (the “Effective Date”), is by and between NUCRYST
PHARMACEUTICALS INC., a Delaware corporation (“Company”) and DAVID B. HOLTZ
(“Executive”).
     WHEREAS, the Company desires to employ the Executive to serve as the Vice
President and Chief Financial Officer of the Company and of NUCRYST
Pharmaceuticals Inc., an Alberta corporation of which the Company is a
wholly-owned subsidiary (the “Parent”) on the terms and conditions hereinafter
set forth; and
     WHEREAS, the Executive desires to accept such employment with the Company
subject to the terms and conditions hereinafter set forth.
     NOW, THEREFORE, in consideration of the promises and the mutual agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties agree as follows:
     1.     Employment and Duties.
             (a)     Employment. During the Term (as defined below) the
Executive:
     (1)     shall serve as the Vice President and Chief Financial Officer of
the Company and of the Parent; shall have all authorities, duties and
responsibilities customarily exercised by an individual serving in such position
in a corporation of the size and nature of the Company and the Parent; may be
assigned such additional duties and responsibilities, consistent with the
foregoing, as the Chief Executive Officer of the Parent (the “CEO”) may from
time to time reasonably determine; shall report directly to the CEO; and shall
devote substantially all of the Executive’s working time and the Executive’s
best efforts to the Company and the Parent and the Executive’s position.
     (2)     shall faithfully serve the Company and the Parent and at all times
act in and promote the best interests of the Company and the Parent, and shall
not, without the prior approval of the CEO, carry on or engage in any other
business or occupation or become a director, officer, employee or agent of or
hold any position or office with any other company or business entity, provided
that nothing herein shall preclude the Executive from: (A) serving on the boards
of a reasonable number of trade associations and charitable organizations with
the approval of the CEO, such approval not to be unreasonably withheld,
(B) engaging in charitable activities and community affairs, (C) accepting and
fulfilling a reasonable

 

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number of speaking engagements, and (D) managing his personal investments and
affairs (which may include serving as an officer, director or employee of a
family held company); provided that such activities do not in the aggregate
interfere with the proper performance of his duties and responsibilities
hereunder, violate any provision hereof, or otherwise create any conflict of
interest with respect to his duties and responsibilities hereunder or violate
the terms of any of the covenants contained in the Employee Confidentiality and
Non-Compete Agreement dated May 1, 2008 between the Executive and the Company
(the “Confidentiality Agreement”); and
     (3)     shall comply with all rules, regulations, policies and procedures
of the Company, the Parent and their respective affiliates as in effect from
time to time, including the Code of Conduct, Whistleblower Policy, Disclosure
Policy and Insider Trading Policy of the Parent and the Company and their
respective affiliates and any rules or policies that may be adopted by the
Company or the Parent from time to time to restrict or prohibit actual or
perceived conflicts of interest.
             (b)     Location. During the Term, the Executive’s principal
office, and place of employment, shall be in Princeton, NJ or such other
location as may be determined by the Executive with the approval of the CEO. The
Executive acknowledges that he will be required to travel frequently to other
locations in which the Company and the Parent conduct their activities,
including Canada.
     2.     Compensation.
             (a)     Base Salary. During the Term (as hereinafter defined), the
Company shall pay to the Executive a minimum base salary at the rate of Two
Hundred and Twenty-Five Thousand Dollars ($225,000.00) per annum (“Base
Salary”). Subsequent increases to the Base Salary will be determined by the
Board of Directors of the Parent (the “Board”) (or committee thereof) in its
sole discretion. The Base Salary cannot be reduced by the Company so long as the
Executive is employed by the Company; provided, that the Base Salary may be
reduced by the Company if such reduction is in conjunction with a Company-wide
or Parent-wide reduction in salaries relating to an on-going business need of
the Company or the Parent and such reduction of the Base Salary is proportional
to the decrease in salary to other similarly-positioned executives of the
Company or the Parent. The Base Salary under this Section 2(a) shall be payable
to the Executive not less frequently than twice monthly and shall be reduced by
applicable taxes and withholdings.
             (b)     Annual Incentive Award. In addition to the Executive’s Base
Salary under Section 2(a) above, the Executive will be eligible to receive an
annual cash incentive award (“Annual Incentive Award”) in respect of each
calendar year that ends during the Term to the extent an employee cash incentive
award program is established by

 

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the Company and approved by the Board (the “Incentive Program”). The Executive’s
Annual Incentive Award opportunity will be determined based on the achievement
of specific corporate objectives of the Parent and will be equal to 20% of
annualized Base Salary at threshold level achievement of corporate objectives
(with no payout for achievement of corporate objectives below threshold level),
40% of annualized Base Salary at target level achievement of objectives and a
maximum possible Annual Award of 70% of annualized Base Salary at stretch
achievement level with the Executive’s eligibility commencing with calendar year
2009. The Annual Incentive Award payable to the Executive shall be based upon
the satisfaction of performance criteria and objectives as determined by the
Board (or its Human Resources and Compensation Committee) in its sole discretion
and shall be subject to other terms and conditions set forth in the Incentive
Program. The Executive acknowledges that to be eligible to receive an Annual
Incentive Award in respect of any calendar year during the Term, the Executive
must be an employee of the Company on the date of payout of the Annual Incentive
Award and not be in breach of this Agreement or the Confidentiality Agreement.
Except as otherwise set forth herein, any such Annual Incentive Award shall be
payable no later than ninety (90) days following the end of the fiscal year for
which it is awarded, and shall be reduced by applicable taxes and withholdings.
For calendar year 2008, in lieu of an Annual Incentive Award, the Executive will
be paid a bonus of forty per cent (40%) of Base Salary prorated from the
Effective Date and will be payable at the same time as the Company pays out the
2008 Annual Incentive Award which shall be no later than ninety (90) days
following the end of the calendar year and shall be payable to the Executive
regardless of the satisfaction of corporate performance criteria and whether or
not the Executive is an employee of the Company on the payout date, unless the
Executive’s employment was terminated for Cause (as that term is defined in
clause 6(c) below) prior to the date of payout or the Executive is in breach of
this Agreement or the Confidentiality Agreement, in which case no such bonus
will be payable in respect of calendar year 2008.
             (c)     Long-Term Incentives. Subject to the approval of amendments
to the Parent’s 1998 Equity Incentive Plan, as amend, (the “Plan”) by the
shareholder of the Parent, and subject to Board approval and commencement of
employment, Executive will be granted a nonqualified stock option (the “Option”)
to purchase two hundred and forty thousand (240,000) shares of the common stock
of the Parent (the “Shares”) under the Plan, and pursuant to the terms and
conditions of a Stock Option Award Agreement in the form attached hereto as
Exhibit A. The price to be paid for Shares upon exercise of the Option shall be
the Fair Market Value on the date of grant as that term is defined in the Plan
or on the earliest date thereafter as is permissible under applicable law and
the rules of the stock exchanges on which the Shares are traded (the “Option
Grant Date”). The Option described in this Section 2(c) will vest and become
exercisable in accordance with the following schedule: (i) options with respect
to 1/3 of the Shares will vest and become exercisable on the first anniversary
of the Option Grant Date, (ii) options with respect to 1/3 Shares will vest and
become exercisable on the second anniversary of the Option Grant Date, and
(iii) options with respect to 1/3 Shares will vest and become exercisable

 

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on the third anniversary of the Option Grant Date, provided (except to the
extent otherwise provided in Section 6 and Section 7 below) that the Executive
is employed by the Company on such vesting date. The Option described in this
Section 2(c) will expire on the tenth anniversary of the Option Grant Date.
     3.     Insurance, Retirement and Employee Benefit Plans; Business Expenses.
             (a)     Other Benefits and Perquisites. During the Term, the
Executive shall be eligible to participate in any plan of the Company relating
to stock options, employee stock purchase or ownership, 401(k), group life
insurance, medical coverage, or other employee benefit plans or arrangements
that the Company has adopted or may adopt for the benefit of its employees. The
Company reserves the right to modify or terminate any employee benefit or
perquisite at any time. The benefits described in this Section 3(a) cannot be
reduced by the Company so long as the Executive is employed by the Company;
provided, that such benefits may be reduced by the Company if such reduction is
in conjunction with a Company-wide or Parent-wide reduction in benefits relating
to an on-going business need of the Company or the Parent and such reduction of
the benefits is proportional to the decrease in benefits to other
similarly-positioned executives of the Company or the Parent.
             (b)     Equity Compensation. The Executive acknowledges and agrees
that the determination of whether to award to Executive Stock Options, the
number of Share or shares of common stock of the Parent subject to any such
Stock Option and the terms and conditions of any such Stock Option, are in the
sole discretion of the Board. For the purposes of this Agreement, “Stock Option”
shall mean any compensatory option to acquire securities of the Parent; any
compensatory stock appreciation right, phantom stock option or analogous right
granted by or on behalf of the Parent; and any security or right received in
respect of any of the foregoing options or rights.
             (c)     Business Expenses. During the Term of this Agreement, the
Company shall promptly reimburse the Executive for all reasonable expenses
incurred by the Executive in furtherance of his duties under this Agreement,
including all expenses of travel and living expenses while away from home on
business or at the request of and in the service of the Company, provided that
such expenses are reasonably incurred and accounted for in accordance with the
published policies and procedures established by the Company. Such expenses
shall be reimbursed upon submission to the Company of invoices containing
original receipts for all such expenditures and upon review by the Company of
the reasonable nature of such expenditures.
     4.     Term. The initial term of employment under this Agreement shall be
from the Effective Date until the first anniversary of the Effective Date unless
the Executive’s employment terminates earlier pursuant to Section 6 below
(“Term”). The Term shall be automatically extended for additional one (1) year
periods as of the end of each year in which the Term of this Agreement otherwise
would expire, unless the CEO gives the Executive a written notice of non-renewal
not less than thirty (30) days before the

 

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scheduled expiration of the Term. In the event of any expiration of the Term due
to such non-renewal, the Executive shall be entitled to his Base Salary for a
period of six (6) months following the expiration of such Term provided that the
Executive or his legal representative signs a release of any and all claims in
form satisfactory to the Company. “Term,” as defined above, shall include any
such one (1) year extensions. The Term of this Agreement shall be subject to
termination as provided in Section 6.
     5.     Vacations; Illness. The Executive shall be entitled to annual paid
vacation of four (4) weeks per year (which shall include personal days and sick
days), provided that no such vacation may be carried forward from any year
during the Term.
     6.     Termination of Employment. The Executive’s employment may be
terminated under the following circumstances:
             (a)     Termination Due to Death. In the event that the Executive’s
employment hereunder is terminated due to his death, his estate or his
beneficiaries (as the case may be) shall be entitled to the following:
     (1)     if within forty-five (45) days of the Termination Date the
Executive’s legal representative signs a release of any and all claims in form
satisfactory to the Company, Base Salary for a period of ninety (90) days
following the date of death; and
     (2)     the continued right to exercise any Stock Options, to the extent
that such Stock Option is vested as of the Termination Date, for at least the
lesser of one hundred and eighty (180) days following the Termination Date and
the remainder of its maximum stated term.
             (b)     Termination Due to Disability. If the Executive is unable
to perform his duties hereunder due to a Disability (defined below), the Company
may terminate Executive’s employment hereunder. In the event that the
Executive’s employment hereunder is terminated due to Disability, he shall be
entitled to:
     (1)     the payment of a pro-rata Annual Incentive Award for the year in
which his employment terminates to the extent earned in accordance with the
terms set forth herein. For the purposes of this Agreement, “Disability” shall
mean the Executive’s inability, due to physical or mental incapacity or similar
cause, to substantially perform his duties and responsibilities hereunder for
any consecutive six (6) month period or for any period of twelve months (whether
or not consecutive) in any consecutive twenty-four (24) month period, as
determined by the CEO; and
     (2)     the continued right to exercise any Stock Options, to the extent
that such Stock Option is vested as of the Termination Date, for at least the
lesser of one hundred and eighty (180) days following the Termination Date and
the remainder of its maximum stated term.

 

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             (c)     Termination by the Company for Cause.
     (1)     For purposes of this Agreement, “Cause” shall mean (A) the
Executive’s breach of the terms of this Agreement or the Confidentiality
Agreement; (B) an act or omission by the Executive as a result of which the
Executive is charged with a criminal offence involving dishonesty, breach of
trust or moral turpitude; (C) the Executive’s commission of, conviction of, or
entry of a plea of guilty or no contest to, a crime that constitutes a felony;
(D) theft, fraud, misappropriation, willful neglect or misconduct, or material
dishonesty by the Executive involving the property or affairs of the Company or
any of its affiliates; (E) the Executive’s chronic absenteeism; (F) the
Executive’s lack or performance due to chronic alcoholism or other form of
substance abuse; or (G) the Executive’s willful and unjustified refusal to
perform his duties hereunder; provided, however, that the Executive shall be
permitted ten (10) days’ written notice and opportunity to cure prior to a
termination based on clause (A) or (G) to the extent capable of being cured. In
the event that Executive’s employment is terminated by the Company for Cause,
Executive shall immediately resign from Executive’s membership (if any) on the
Board.
     (2)     At any time during the Term, the Company or the Parent may
terminate the Executive’s employment hereunder for Cause. In the event that the
Executive’s employment hereunder is terminated by the Company or the Parent for
Cause in accordance with Section 6(c)(1), he shall be entitled to: (A) the
continued right to exercise any Stock Options, to the extent that such Stock
Option is vested as of the Termination Date, for at least the lesser of thirty
(30) days following the Termination Date and the remainder of its maximum stated
term; and (B) the benefits described in Section 6(h)(1)(i) and (ii).
             (d)     Termination Without Cause. At any time during the Term, the
Company or the Parent may terminate the Executive’s employment hereunder without
Cause. In the event that the Executive’s employment hereunder is terminated by
the Company or the Parent other than (w) for death in accordance with
Section 6(a); (x) for disability in accordance with Section 6(b), (y) for Cause
in accordance with Section 6(c)(1); or (z) by expiration of the Term of
Employment, he shall be entitled to:
     (1)     if within thirty (30) days of the Termination Date the Executive or
the Executive’s legal representative signs a General Release of all claims
against the Company in a form satisfactory to the Company (“General Release”) an
amount equal to six (6) month’s Base Salary, payable within thirty (30) days
following Executive’s delivery of the General Release and expiration of any
revocation period contained therein;

 

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     (2)     full vesting and exercisability, as of the Termination Date, for
all outstanding Stock Options to the extent that such Stock Options were then
scheduled to become vested or exercisable on or before the first anniversary of
the Termination Date, each such Stock Option to remain exercisable for the
lesser of (x) one hundred and twenty (120) days following the Termination Date
and (y) the remainder of its stated term.
             (e)     Constructive Termination Without Cause. In the event that a
Constructive Termination Without Cause occurs, the Executive shall have the same
entitlements as provided under Section 6(d) for a termination by the Company
without Cause. As used herein, “Constructive Termination Without Cause” shall
mean: (1) any material breach of this Agreement by the Company; provided,
however, that the Executive gives the Company written notice specifying the
nature of any breach, and the Company has not cured such breach within thirty
(30) days’ after receipt of such written notice; or (2) the relocation of the
Executive’s principal office and place of employment to a location that is more
than sixty (60) miles from Princeton, NJ; provided, however, that the Executive
notifies the Company of the Executive’s intent to treat the relocation as
Constructive Termination Without Cause within thirty (30) days of the
Executive’s receipt of the written notice of relocation (the “Relocation
Notice”), and provided further, however, that the Company does not thereafter
revoke the Relocation Notice within thirty (30) days after receipt of such
Relocation Notice from the Executive.
             (f)     Voluntary Termination. In the event that the Executive
terminates his employment hereunder prior to the then-scheduled expiration of
the Term of Employment on his own initiative, other than for Disability or by a
Constructive Termination Without Cause, he shall give the Company at least
ninety (90) days’ prior written notice of such termination and shall have the
same entitlements as provided in Section 6(c)(2) in the case of a termination by
the Company for Cause. A voluntary termination under this Section 6(f) shall not
be deemed a breach of this Agreement.
             (g)     Notice of Termination. Any termination of the Executive’s
employment by the Company or by the Executive (other than termination pursuant
to Section 6(a) or (b) hereof) shall be communicated to the other party by a
written Notice of Termination.
             (h)     Miscellaneous.
     (1)     On any termination of the Executive’s employment hereunder, he
shall be entitled to:
     (i)     Base Salary through the Termination Date; and

 

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     (ii)     a lump-sum payment in respect of accrued but unused vacation days
at his Base Salary rate in effect as of the Termination Date.
     (2)     In the event of any termination of the Executive’s employment
hereunder, the Executive shall be under no obligation to seek other employment
or otherwise mitigate the obligations of the Company under this Agreement. Any
amounts due under this Section 6 are considered to be reasonable by the Company
and are not in the nature of a penalty.
     (3)     There shall be no contractual or similar restrictions on the
Executive’s activities following the Termination Date other than as expressly
set forth in this Agreement, the Confidentiality Agreement or any shareholder
agreement with the Company to which Executive is a party.
     7.     Change in Control.
             (a)     Definition. As used herein, “Change in Control” shall mean
the occurrence of a transaction or series of transactions, either alone or in
conjunction with other events or transactions, as a result of which:
     (1)     any “person,” as such term is currently used in Section 13(d) of
the Securities Exchange Act of 1934 (the, “Act”) (other than the Parent, any of
its subsidiaries, the Executive or The Westaim Corporation [“Westaim”]),
together with any “affiliates” or “associates” (as such terms are defined in
Rule 12b-2 of under the Act) of such person, becomes (directly or indirectly) a
“beneficial owner,” as such term is currently used in Rule 13d-3 promulgated
under that Act, of more than fifty percent (50%) of the Voting Securities of the
Parent(measured either by number of Voting Securities or by number of votes
entitled to be cast), whether through the acquisition of previously issued and
outstanding Voting Securities, or of Voting Securities that have not been
previously issued, or any combination thereof, or any other transaction having a
similar effect, unless the acquisition of such Voting Securities is approved by
a majority of Incumbent Directors (as defined below). As used herein: (x)“Voting
Securities” shall mean issued and outstanding securities of the Parent of any
class or classes having general voting power, under ordinary circumstances in
the absence of contingencies, to elect one or more members of the Board of the
Parent; and (y) “Incumbent Directors,” means the members of the Board of the
Parent on the Effective Date; provided that any individual becoming a director
subsequent to such date whose election or nomination for election was supported
by two-thirds of the directors who then comprised the Incumbent Directors shall
be considered to be an Incumbent Director;

 

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     (2)     fifty percent (50%) or more of the issued and outstanding Voting
Securities become subject to a voting trust in which neither the Parent, nor the
Executive nor any or his associates nor Westaim nor any of its affiliates
participate;
     (3)     a majority of the members of the Board are removed from office at
any annual or special meeting of shareholders of the Parent, or a majority of
the members of the Board resign from office in the course of any 60-day period,
unless the vacancies created thereby are either (A) filled by appointments made
by the remaining members of the Board or (B) are filled by nominees proposed by
the Board, the Executive, or any of his associates or Westaim; or
     (4)     (x) the Parent combines with another entity and is the surviving
entity, or (y) all or substantially all of the assets or business of the Parent
is disposed of pursuant to a sale, merger, consolidation, liquidation or other
transaction or series of transactions, unless the holders of Voting Securities
of the Parent immediately prior to such combination, sale, merger,
consolidation, liquidation or other transaction or series of transactions
(collectively, a “Triggering Event”) own, directly or indirectly, and
immediately following such Triggering Event, by reason of their ownership of
Voting Securities of the Parent immediately prior to such Triggering Event, more
than fifty percent (50%) of the Voting Securities (measured both by number of
securities and by voting power) of: (q) in the case of a combination in which
the Parent is the surviving entity, the surviving entity and (r) in any other
case, the entity (if any) that succeeds to substantially all of the business and
assets of the Parent.
             (b)     Notwithstanding the definition in Section 7(a), it is
understood and agreed that no Change in Control shall be deemed to exist or
occur as a result of any alteration in the current equity ownership of, or the
current voting control over, the Parent or the Company that is a direct
consequence of Westaim’s realignment of its ownership interests in the Parent,
including but not limited to any transfer by Westaim of its interests; provided,
however, that if Westaim transfers fifty percent (50%) or more of the issued and
outstanding Voting Securities in the Parent to a bona fide third party purchaser
from Westaim in an arms’ length negotiated transaction, the occurrence of such
transfer shall constitute a Change in Control.
             (c)     In the event that the Executive’s employment by the Company
hereunder is terminated within twelve (12) months following a Change in Control
in a termination that is governed by clause 4, 6(d) or 6(e) (relating to
terminations due to non- renewal of the Term by the Company and terminations by
the Company without Cause or Constructive Termination Without Cause by the
Company):

 

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     (1)     in lieu of any amounts otherwise payable to the Executive under
clause 4, 6(d) or 6(e), the Executive shall be entitled to an amount equal to
twelve (12) month’s Base Salary, payable in a lump sum within thirty (30) days
following Executive’s delivery of a General Release and expiration of any
revocation period contained therein; and
     (2)     the Executive will be entitled to full vesting and exercisability,
as of the Termination Date, for all outstanding Stock Options to the extent that
such Stock Options were then scheduled to become vested or exercisable on or
before the second anniversary of the Termination Date, each such Stock Option to
remain exercisable for the lesser of (x) one hundred and twenty (120) days
following the Termination Date and (y) the remainder of its stated term.
     8.     Amendments or Waivers. No amendments or additions to the Agreement
shall be binding unless such amendment is set forth in writing and signed by the
Executive and by an authorized officer of the Company. 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 any other act or conduct or by any indulgence, delay or omission.
Any waiver shall only apply to the specific matter waived and only in the
specific instance in which it is waived.
     9.     Survival. Sections 3, 6 and 11(c) of this Agreement and the
Confidentiality Agreement shall survive and continue in full force and effect in
accordance with their respective terms, notwithstanding the termination of the
Executive’s employment hereunder.
     10.     Representations. The Executive represents and warrants to the
Company and the Parent that (a) the execution, delivery and performance of this
Agreement by the Executive does not and will not conflict with, breach, violate
or cause a default under any contract, agreement, instrument, order, judgment or
decree to which the Executive is a party or by which the Executive is bound, and
(b) upon the execution and delivery of this Agreement by the Company, this
Agreement shall be the valid and binding obligation of the Executive,
enforceable in accordance with its terms.
     11.     Miscellaneous.
             (a)     Notices. Any notice, consent, demand, request, or other
communication given to a party in connection with this Agreement shall be in
writing and shall be deemed to have been given to such person (i) when delivered
personally to such party or (ii), provided that a written acknowledgment of
receipt is obtained, five days after being sent by prepaid certified or
registered mail, or two days after being sent

 

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by a nationally recognized overnight courier, to the address (if any) specified
below for such party (or to such other address as such party shall have
specified by ten days’ advance notice given in accordance with this Section 11):
If notice is to be sent to the Company, it will be sent to:
NUCRYST Pharmaceuticals Inc.
10102 – 114 Street,
Fort Saskatchewan, Alberta T8L 3W4
Attention: Chief Executive Officer

If notice is to be sent to the Executive, it will be sent to:
David B. Holtz
52 Heritage Drive
Allentown, New Jersey 58501
             (b)     Severability and Reformation. Nothing in this Agreement
shall be construed so as to require the commission of any act contrary to law
and wherever there is any conflict between any provision of this Agreement and
any law, statute, ordinance, order or regulation, the latter shall prevail, but
in such event any necessary action will be taken to bring it within applicable
legal requirements. If any provision of this Agreement should be held invalid or
unenforceable for any reason, in whole or in part, then such invalid or
unenforceable provision or part shall be severable and severed from this
Agreement and the remaining provisions of this Agreement shall remain in full
force and effect and be construed as if such invalid or unenforceable provision
or part had never been contained herein and so as to achieve the intentions of
the Parties as set forth in this Agreement, to the maximum extent possible.
             (c)     Dispute Resolution.
     (1)     Arbitration. The Executive and the Company will arbitrate any and
all controversies, claims or disputes arising out of or relating to this
Agreement or the Executive’s employment with the Company (“Claims”) before the
American Arbitration Association (“AAA”) in accordance with the AAA’s National
Rules for the Resolution of Employment Disputes. Each of the Company and the
Executive waives any right to a trial by jury in any controversy, claim or
dispute with the Company, including those that arise under any federal, state or
local law, including without limitation, claims of harassment, discrimination or
wrongful termination under common law or under Title VII of the Civil Rights Act
of 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act, the
Age Discrimination in Employment Act or the Older

 

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Workers’ Benefit Protection Act. Except as otherwise set forth in this
Agreement, the cost of any arbitration hereunder, including the cost of the
record or transcripts thereof, of any administrative fees, and all other fees
involved including reasonable attorneys’ fees incurred by the party determined
by the arbitrator to be the prevailing party, shall be paid by the party
determined by the arbitrator not to be the prevailing party.
     (2)     Injunctive Relief. Notwithstanding the agreement to arbitrate, a
breach by the Executive of his obligations under the Confidentiality Agreement
would cause the Company and its Affiliates and Subsidiaries irreparable harm,
and no adequate remedy at law would be available in respect thereof.
Accordingly, if any dispute arises between the parties under the Confidentiality
Agreement, the Company, its Affiliates and Subsidiaries shall not be required to
arbitrate such Claim under Section 11(c)(1), but shall have the right to
institute judicial proceedings in any appropriate jurisdiction and shall be
entitled to relief enjoining such acts without the need to post a bond. If such
judicial proceedings are instituted, such proceedings shall not be stayed or
delayed pending the outcome of any arbitration proceeding under Section 11(c)(1)
of this Agreement. Further, the Executive and the Company waive any objections
to the jurisdiction of such courts based on improper or inconvenient forum.
             (d)     Executive’s Acknowledgement. The Executive acknowledges
that he fully understands the terms of this Agreement, that he knowingly and
voluntarily, of his own free will without any duress, being fully informed and
after due deliberation, accepts its terms as his own free act. The Executive
further acknowledges that he has had the opportunity to seek the advice of
counsel in connection with his entry into this Agreement.
             (e)     Withholding Taxes. The Company may withhold from any
amounts or benefits payable under this Agreement taxes that are required to be
withheld pursuant to any applicable law or regulation.
             (f)     Complete Agreement. This Agreement and the Confidentiality
Agreement contain the entire agreement and understanding between the parties
relating to the subject matter hereof, and supersede any prior understandings,
agreements or representations by or between the parties, written or oral,
relating to the subject matter hereof.
             (g)     Successors or Assigns. This Agreement and the rights and
obligations of the parties hereto shall bind and inure to the benefit of any
successor or successors of the Company and its affiliates by way of
reorganization, merger or consolidation and any assignee of all or substantially
all of its business assets, but except as to any such successor or assignee of
the Company, neither this Agreement nor any rights or benefits hereunder may be
assigned by the Company or the Executive.

 

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Notwithstanding the foregoing, in the event of the death of the Executive all
rights to receive payments hereunder shall become rights of the Executive’s
estate.
             (h)     Section Headings. The section headings used in this
Agreement are included solely for convenience and shall not affect, or be used
in connection with, the interpretation of this Agreement.
             (i)     Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the Commonwealth of Massachusetts
without regard to principles of conflict of laws.
             (j)     Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed to be an original and both of which
together shall constitute one and the same instrument.
     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
on the day and year first above written.

     
NUCRYST PHARMACEUTICALS INC.
  EXECUTIVE
 
    Per: /s/  Thomas E. Gardner   /s/  David B. Holtz
Thomas E. Gardner
  David B. Holtz
Chairman, President & CEO