Exhibit 10.50

          (QLT INC. LOGO) [c00078c0007801.gif]   EMPLOYMENT AGREEMENT    

This Employment Agreement made effective as of April 12, 2010 (the “Effective
Date”).
BETWEEN:
QLT INC., having an address of 887 Great Northern Way, Suite 101, Vancouver,
British Columbia, V5T 4T5, Canada.
(“QLT” or the “Company”)
AND:
DIPAK PANIGRAHI
(“Dr. Panigrahi”)
WHEREAS:

A.  
QLT has offered to Dr. Panigrahi employment with QLT as Senior Vice President,
Research & Development and Chief Medical Officer.
  B.  
QLT and Dr. Panigrahi wish to enter into this Agreement to set out the terms and
conditions of Dr. Panigrahi’s employment with QLT.

NOW THEREFORE in consideration of the compensation to be paid under this
Agreement by QLT to Dr. Panigrahi, 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
Dr. Panigrahi agree as follows:
1. POSITION AND DUTIES

1.1  
Position Effective the date QLT and Dr. Panigrahi mutually agree that his
employment will commence (the “Commencement Date”), QLT will employ
Dr. Panigrahi in the position of Senior Vice President, Research & Development
and Chief Medical Officer and Dr. Panigrahi agrees to be employed by QLT in that
position, subject to the terms and conditions of this Agreement. Dr. Panigrahi’s
Commencement Date will be no later than May 17, 2010. A condition of
Dr. Panigrahi’s employment and continued employment is that he seek, obtain and
maintain the required permits from the Government of Canada to permit him to
work in Canada in this position. QLT will reimburse Dr. Panigrahi for the costs
associated with obtaining the NAFTA Work Permit and permanent resident status
for Dr. Panigrahi and Dr. Panigrahi’s immediate family members (spouse and
children).
  1.2  
Duties, Reporting and Efforts — In the performance of his duties as Senior Vice
President, Research & Development and Chief Medical Officer, Dr. Panigrahi will:

  (a)  
Overall Responsibilities — Have overall responsibility for leading QLT’s R&D
portfolio including Clinical, Pharmaceutical Development, and Formulations
Development, Regulatory and such other responsibilities as may be directed or
delegated from time to time by the President and Chief Executive Officer of QLT.

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  (b)  
Report — Report, as and when required, to the President and Chief Executive
Officer of QLT or such person appointed by the Board of Directors of QLT (the
“Board”) to either of such positions.
    (c)  
Best Efforts — Use his best efforts, industry and knowledge to improve and
increase QLT’s business, to comply with all of QLT’s rules, regulations,
policies (including QLT’s Code of Ethics and Code of Exemplary Conduct) and
procedures, as established from time to time and to ensure that QLT is at all
times in compliance with applicable provincial, state, federal and other
governing statutes, policies and regulations.
    (d)  
Working Day — Devote the whole of his working day attention and energies to the
business and affairs of QLT.

2. COMPENSATION

2.1  
Annual Compensation — In return for his services under this Agreement, effective
as of the Commencement Date, QLT agrees to pay or otherwise provide the
following total annual compensation in Canadian dollars to Dr. Panigrahi:

  (a)  
Base Salary — A base salary in the amount of $393,750 (less statutory
withholdings) in 24 equal installments payable semi-monthly in arrears.
Dr. Panigrahi’s performance and salary will be reviewed annually after the
Commencement Date by and at the discretion of the Executive Compensation
Committee of QLT’s Board of Directors.
    (b)  
Benefit Plans — Effective as of the Commencement Date, coverage for
Dr. Panigrahi and his eligible dependents under any employee benefit plans
provided by/through QLT to its employees, subject to:

  I.  
Each plan’s terms for eligibility, including a 3-month residency requirement
under the Medical Services Plan of British Columbia. During the 3-month waiting
period, QLT will either reimburse Dr. Panigrahi for the cost of his existing
private medical coverage or provide for Dr. Panigrahi and his eligible
dependents similar medical coverage through a private medical insurer, subject
to any eligibility requirements; and
    II.  
Dr. Panigrahi 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
Dr. Panigrahi agree that employee benefit plans provided by/through QLT to its
employees may change from time to time.
    (c)  
Expense Reimbursement — Reimbursement, in accordance with QLT’s Policy and
Procedures Manual (as amended from time to time), of all reasonable business
related accommodation and/or travel expenses incurred by Dr. Panigrahi, subject
to him maintaining proper accounts and providing documentation for these
expenses upon request. Collectively, these expenses and payments are the
“Expenses”.
    (d)  
Vacation — Four weeks of paid vacation per year as determined in accordance with
QLT’s standard vacation policy for executive level employees. As per QLT’s
Policy and Procedures Manual (as amended from time to time):

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  I.  
All vacation must be taken within the calendar year in which it is earned by
Dr. Panigrahi; and
    II.  
Vacation entitlement will not be cumulative from calendar year to calendar year;
except that Dr. Panigrahi may carry forward 150 hours of vacation from the
calendar year in which it is earned to the following calendar year (but not
subsequent years).

  (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 Dr. Panigrahi (the “Income Year”), QLT will make a contribution of up
to 7% of Dr. Panigrahi’s annual base salary for the Income Year to
Dr. Panigrahi’s Registered Retired Savings Plan (“RRSP”). The contribution to
Dr. Panigrahi’s RRSP as set out above is subject to the following conditions:

  I.  
The maximum contribution to be made by QLT to Dr. Panigrahi’s RRSP is 50% of the
annual limit for Registered Retirement Savings Plans as established by Canada
Revenue Agency for the Income Year,
    II.  
Dr. Panigrahi must have contributed an equal amount into his RRSP, and
    III.  
Dr. Panigrahi is still actively employed by QLT 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, at a target cash
incentive compensation payment of 45% of your base salary, prorated in the first
year of employment. Subject to the provisions of this Agreement, the amount of
that payment and the individual and corporate goal achievement each year will be
determined at the sole discretion of the Board and will be based on the
performance of Dr. Panigrahi and QLT relative to pre-set individual and
corporate objectives and milestones for the immediately preceding fiscal year.
In order to receive payment, Dr. Panigrahi must be employed by QLT at the time
when the Cash Incentive Compensation Plan is otherwise actually paid to eligible
employees (which usually occurs in February or March of the year following the
calendar year in which such Cash Incentive Compensation amount relates) The
Board of Directors has the discretion to alter the cash incentive compensation
plan and payments thereunder.
    (g)  
Stock Option Plan — Participation in any stock option plan offered by QLT to its
executive officers, in accordance with the terms of the plan in effect at the
time of the stock option offer(s).
    (h)  
Relocation - QLT will reimburse Dr. Panigrahi for the costs of his relocation in
accordance with, and subject to, the terms described in Schedule “A” to this
Agreement.
    (i)  
Signing Stock Options — Conditional on Dr. Panigrahi entering into this
Agreement and commencing employment with QLT and final approval of the Board of
Directors of QLT, Dr. Panigrahi will receive an option to purchase 300,000
common shares of QLT. Subject to applicable laws, rules and regulations, these
options will be granted at the next regularly scheduled board meeting following
Dr. Panigrahi’s Commencement Date. These options will be subject to the terms
and conditions set out in QLT’s current Stock Option Incentive Plan, have a
five-year term and will vest monthly in equal installments over three years from
the grant date. The exercise price of the signing options will be the closing
price of the common shares on the Toronto Stock Exchange on the grant date.
These options will vest over three (3) years. Notwithstanding the vesting and
exercise periods, Dr. Panigrahi will not be entitled to exercise any rights
under the stock option agreement until he has successfully completed six months
of employment with QLT and maintained an employment record of good standing
during such time.

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  (j)  
Signing Bonus — QLT will pay Dr. Panigrahi a signing bonus of $315,000, less
statutory withholdings, to be paid in two (2) installments. The first
installment of $210,000 (the “First Installment”) will be paid on the first
payroll date following the Dr. Panigrahi’s Commencement Date. The second
installment of $105,000 (the “Second Installment”) will be paid on the first
payroll date following the 2nd anniversary of Dr. Panigrahi’s Commencement Date,
provided that Dr. Panigrahi must be actively employed by QLT on such payment
date in order to receive the 2nd installment payment of $105,000. In the event
of a termination of employment on Dr. Panigrahi’s part or by QLT for cause
(pursuant to paragraphs 3.1 and 5.1, respectively) prior to the completion of
thirty-six (36) months of employment from Dr. Panigrahi’s Commencement Date,
Dr. Panigrahi shall be required to reimburse QLT a pro-rated amount of the
aggregate of the First Installment and the Second Installment actually paid to
Dr. Panigrahi prior to the date of termination of his employment, such pro-rated
amount to be calculated based on the number of days out of the thirty-six
(36) month period from the Commencement Date that Dr. Panigrahi has actively
been employed up to and until his termination date. Any amount payable by
Dr. Panigrahi to QLT under this paragraph 2.1(j) shall be payable by
Dr. Panigrahi to QLT within ten (10) days of the termination of employment with
QLT.
    (k)  
Reimbursement of Resignation Costs — QLT will reimburse Dr. Panigrahi for
certain costs resulting from his resignation from employment immediately prior
to and in order to commence his employment with QLT hereunder, in accordance
with, and subject to, the terms described in Schedule “C” to this Agreement. In
the event of a termination of employment on Dr. Panigrahi’s part or by QLT for
cause (pursuant to Sections 3.1 and 5.1, respectively) prior to the completion
of thirty-six (36) months of employment from Dr. Panigrahi’s Commencement Date,
Dr. Panigrahi shall be required to reimburse QLT a prorated amount of the
aggregate amount paid to Dr. Panigrahi under this subparagraph 2.1(k), such
pro-rated amount to be calculated based on the number of days out of the
thirty-six (36) month period from the Commencement Date that Dr. Panigrahi has
actively been employed up to and until his termination date. Any amount payable
by Dr. Panigrahi to QLT under this paragraph shall be payable by Dr. Panigrahi
to QLT within ten (10) days of the termination of employment with QLT.

3. RESIGNATION

3.1  
Resignation — Dr. Panigrahi may resign from his employment with QLT by giving
QLT 60 days prior written notice (the “Resignation Notice”) of the effective
date of his resignation. On receiving a Resignation Notice, QLT may elect to
provide the following payments in lieu of notice to Dr. Panigrahi and require
him to leave the premises forthwith:

  (a)  
Base Salary — Base salary owing to Dr. Panigrahi to the end of 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 Dr. Panigrahi and
his eligible dependents prior to the date of his Resignation Notice.
Dr. Panigrahi acknowledges and agrees that any short and long term disability
plans provided through QLT will not be continued beyond the last day that
Dr. Panigrahi works at QLT’s premises (the “Last Active Day”).
    (c)  
Expense Reimbursement — Reimbursement (in accordance with QLT’s Policy and
Procedures Manual, as amended from time to time) of all reasonable business
related accommodation and/or travel expenses incurred by Dr. Panigrahi 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
Dr. Panigrahi as at the expiry of the 60-day notice period.

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  (e)  
Prorated RRSP Contribution — Payment of any unpaid RRSP contribution in respect
of any calendar year preceding the calendar year in which the 60-day period
expires and a prorated contribution to the RRSP, the pro-ration to be with
respect to the portion of the current calendar year worked by Dr. Panigrahi, 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).

3.2  
Others — In the event of resignation of Dr. Panigrahi as set out in paragraph
3.1, the parties agree:

  (a)  
No Bonus — Dr. Panigrahi will have no entitlement to any unpaid amounts under
QLT’s Cash Incentive Compensation Plan; and
    (b)  
Stock Option Plan — Dr. Panigrahi’s participation in any stock option plan
offered by QLT to its employees will be in accordance with the terms of the plan
and option agreement applicable to each stock option grant made to
Dr. Panigrahi.

4. RETIREMENT

4.1  
Retirement — Effective the date of retirement (as defined in QLT’s Policy and
Procedures Manual, as amended from time to time) of Dr. Panigrahi from active
employment with QLT, 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 —Dr. Panigrahi’s participation in any stock option plan offered by
QLT to its employees will be in accordance with the terms of the plan and option
agreement applicable to each stock option grant made to Dr. Panigrahi.

5. TERMINATION

5.1  
Termination for Cause — QLT may terminate Dr. Panigrahi’s employment at any time
for cause (as “cause” is determined under the laws of the Province of British
Columbia). Should Dr. Panigrahi be terminated for cause, he will be entitled to
all compensation due and owing to the date of termination but will not be
entitled to any advance notice of termination or pay in lieu thereof. If
Dr. Panigrahi is refused permission to work in Canada, or permission expires or
is revoked at any time before or during Dr. Panigrahi’s employment with QLT, QLT
will have the right to terminate Dr. Panigrahi’s employment and to treat such
termination as a termination for “cause”.
  5.2  
Termination Other than for Cause — QLT reserves the right to terminate Dr.
Panigrahi’s employment at any time without cause. However, if QLT terminates
Dr. Panigrahi’s employment for any reason other than for cause, then, except in
the case of Dr. Panigrahi becoming completely disabled (which is provided for in
paragraph 5.6) and subject to the provisions set forth below, Dr. Panigrahi 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.
  5.3  
Severance Notice and Pay — In the event QLT terminates Dr. Panigrahi’s
employment as set out in paragraph 5.2, Dr. Panigrahi will be entitled to:

  (a)  
Notice — Advance written notice of termination (“Severance Notice”) or pay in
lieu notice of termination (“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,
and

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  II.  
One additional month’s Severance Notice, or Severance Pay in lieu thereof, for
each complete year of continuous employment with QLT,

     
up to a maximum total of 24 months’ Severance Notice, or Severance Pay in lieu
of Severance Notice. Dr. Panigrahi acknowledges and agrees that Severance Pay is
in respect of base salary only and, provided Dr. Panigrahi executes and provides
to QLT the release referred to in paragraph 5.5(b) within the time period
specified therein all Severance Pay will be paid to Dr. Panigrahi by the later
of 15 days after his Last Active Day or 15 days after the delivery to QLT of
such executed release. If Dr. Panigrahi does not execute and provide to QLT such
release within that time period, QLT will pay to Dr. Panigrahi the Severance pay
on a bi-weekly or monthly basis, at QLT’s discretion.
    (b)  
Benefits — Except as set out below, for 30 days after Dr. Panigrahi’s Last
Active Day, all employee benefit plan coverage enjoyed by Dr. Panigrahi and his
dependents prior to the date of termination. Thereafter, and in lieu of employee
benefit plan coverage, Dr. Panigrahi will receive compensation (“Benefits
Compensation”) in the amount of 10% of his base salary for the balance of his
Severance Notice period. Dr. Panigrahi acknowledges and agrees that short and
long term disability plans provided through QLT will not be continued beyond
Dr. Panigrahi’s Last Active Day.
    (c)  
Out Placement Counseling — QLT will pay to an out placement counseling service
(to be agreed to by Dr. Panigrahi and QLT, each acting reasonably) a maximum of
$5,000 for assistance rendered to Dr. Panigrahi in seeking alternative
employment.
    (d)  
Other Compensation — QLT will provide the following additional compensation:

  I.  
Reimbursement or payment of Expenses (in accordance with subparagraph 2.1(c))
incurred by Dr. Panigrahi or due and owing on or prior to his Last Active Day.
    II.  
Payment to Dr. Panigrahi in respect of his accrued but unpaid base salary and
vacation pay to the date of termination of his employment with QLT.
    III.  
Payment of any unpaid RRSP contribution in respect of any calendar year
preceding the calendar year in which the Last Active Day occurs and a prorated
contribution to the RRSP, the pro-ration to be with respect to the portion of
the current calendar year worked by Dr. Panigrahi and the contribution to be
subject to the conditions set out in subparagraph 2.1(e).
    IV.  
Prorated payment to Dr. Panigrahi in respect of his entitlement to participate
in QLT’s Cash Incentive Compensation Plan and any other incentive compensation
plan in place, the pro-ration to be with respect to the portion of the current
calendar year worked by Dr. Panigrahi and the entitlement to be at the target
level Dr. Panigrahi would have otherwise been eligible to receive in the current
calendar year if all corporate, and, if applicable, individual goals were met
but not exceeded provided that if the Last Active Day precedes the date that the
amount under the Cash Incentive Compensation Plan or other incentive
compensation is otherwise actually paid to QLT’s executive officers for a
preceding year then Dr. Panigrahi will also receive a payment in respect of his
entitlement to participate in QLT’s Cash Incentive Compensation Plan and any
other incentive compensation plan in place for the preceding calendar year and
the entitlement to be at the target level Dr. Panigrahi would have otherwise
been eligible to receive in the that calendar year if all corporate, and
individual goals were met but not exceeded.
    V.  
Dr. Panigrahi’s participation in any stock option plan offered by QLT to its
employees will be in accordance with the terms of the plan and option agreement
applicable to each stock option grant made to Dr. Panigrahi.

5.4  
Acknowledgement and Release — Dr. Panigrahi acknowledges and agrees that in the
event QLT

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terminates Dr. Panigrahi’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 will have no further obligations, statutory or otherwise, to Dr. Panigrahi
in respect of this Agreement and Dr. Panigrahi’s employment under this
Agreement.
  5.5  
Duty to Mitigate

  (a)  
Duty to Mitigate — Dr. Panigrahi acknowledges and agrees that if his employment
is terminated without cause as set out in paragraph 5.2 and he does not sign the
Release attached hereto as provided in paragraph 5.5(b), 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 comparable alternative employment or contract(s) for services
provided that Dr. Panigrahi will not be obligated to accept any such alternative
employment or contract if the duration of the engagement is less than one half
of the remaining Severance Period notice. If Dr. Panigrahi obtains (i) new
employment or (ii) contract(s) for services of a duration totaling longer than
one-half of the remaining Severance Period at the time such contract(s) is
entered into, Dr. Panigrahi agrees that he 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.  
Dr. Panigrahi 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.
    II.  
Within 10 working days of receipt of the New Employment Notice, QLT agrees that
it will pay Dr. Panigrahi a lump sum amount equivalent to 50% of the Severance
Pay and Benefits Compensation as set out in paragraph 5.3 otherwise owing to
Dr. Panigrahi for the balance of the Severance Notice period.

  (b)  
Waiver of Duty to Mitigate on Delivery of Release — In the event that, either on
or before the date of termination of Dr. Panigrahi’s employment with QLT or
within 30 days after termination of his employment, Dr. Panigrahi executes and
delivers to QLT a release in the form set out in Schedule “B” to this Agreement,
the provisions of paragraph 5.5(a) shall be deemed to not apply and
Dr. Panigrahi shall have no duty to mitigate and there will be no reduction in
the Severance Pay or Benefits Compensation in the event that he obtains
alternative employment or contract(s) for service. If Dr. Panigrahi has failed
to deliver to QLT such release within that 30-day time period, QLT shall notify
Dr. Panigrahi of such failure and provide to Dr. Panigrahi an additional 15 days
in which to deliver such executed release to QLT.

5.6  
Termination Due to Inability to Act

  (a)  
Termination — Subject to applicable law, QLT may immediately terminate this
Agreement by giving written notice to Dr. Panigrahi 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,

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and no other reasonable accommodation can be reached between QLT and
Dr. Panigrahi. Notwithstanding the foregoing, QLT agrees that it will not
terminate Dr. Panigrahi pursuant to this provision unless and until
Dr. Panigrahi 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 Dr. Panigrahi’s employment with QLT
pursuant to the provisions of this paragraph 5.6, QLT agrees to pay to
Dr. Panigrahi Severance Pay and Benefits Compensation as set out in paragraph
5.3 and if Dr. Panigrahi ceases to be completely disabled, then the provisions
of paragraph 5.3(c) (out placement counseling) will apply. The payment will be
due and owing within 30 days of the date that Dr. Panigrahi is either no longer
entitled to receive disability or WCB payments or is definitively ruled
ineligible for such payments unless the payment will not effect the receipt of
such benefits by Dr. Panigrahi in which case the payment will be made within 30
days of receipt of notice from Dr. Panigrahi that the payment is due and owing.
    (c)  
Definition — The term “completely disabled” as used in this paragraph 5.6 will
mean the inability of Dr. Panigrahi to perform the essential functions of his
position under this Agreement by reason of any incapacity, physical or mental,
which a licensed physician acceptable to Dr. Panigrahi and the Board, acting
reasonably, determines keeps Dr. Panigrahi from satisfactorily performing the
essential functions of his position for QLT during the foreseeable future.

5.7  
Death — Except as set out below, effective the date of death (the “Date of
Death”) of Dr. Panigrahi, this Agreement and the employment of Dr. Panigrahi
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 employment under this Agreement), QLT will pay the following
amounts to Dr. Panigrahi’s estate:

  (a)  
Base Salary — Base salary owing to Dr. Panigrahi up to his Date of Death.
    (b)  
Payment in Lieu of Benefits — In lieu of employee benefit coverage for his
eligible dependents after his Date of Death, a payment in the amount of 10% of
his annual base salary in effect at his Date of Death.
    (c)  
Expense Reimbursement — Reimbursement of Expenses incurred by Dr. Panigrahi or
due and owing prior to his Date of Death, subject to subparagraph 2.1(c).
    (d)  
Vacation Pay — Payment in respect of accrued but unpaid vacation pay owing to
Dr. Panigrahi as at his Date of Death.
    (e)  
RRSP Contribution — Payment of any unpaid RRSP contribution in respect of any
calendar year preceding the Date of Death and a prorated contribution to
Dr. Panigrahi’s RRSP, the pro-ration to be with respect to the portion of the
current calendar year worked by Dr. Panigrahi and the contribution to be subject
to the conditions set out in subparagraph 2.1(e).
    (f)  
Bonus — A prorated payment to Dr. Panigrahi in respect of his entitlement to
participate in QLT’s Cash Incentive Compensation Plan and any other incentive
compensation plan in place, the pro-ration to be with respect to the portion of
the current calendar year worked by Dr. Panigrahi and the entitlement to be at
the target level Dr. Panigrahi would have otherwise been eligible to receive in
the current calendar year if all corporate, and, if applicable, individual goals
were met but not exceeded provided that if the Date of Death precedes the date
that the amount under the Cash Incentive Compensation Plan or other incentive
compensation is otherwise actually paid to QLT’s executive officers for a
preceding year then Dr. Panigrahi will also receive a payment in respect of his
entitlement to participate in QLT’s Cash Incentive Compensation Plan and any
other incentive

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compensation plan in place for the preceding calendar year and the entitlement
to be at the target level Dr. Panigrahi would have otherwise been eligible to
receive in the that calendar year if all corporate, and individual goals were
met but not exceeded.

   
After his Date of Death, Dr. Panigrahi’s participation and/or entitlement under
any stock option plan offered by QLT to its employees will be in accordance with
the terms of the plan and stock option agreement applicable to each stock option
grant made to Dr. Panigrahi.
  5.8  
No Duplication — In the event that the Severance Pay provisions of this
Agreement and the payment provisions of the Change of Control Agreement entered
into between QLT and Dr. Panigrahi are both applicable, Dr. Panigrahi agrees
that he will give written notice to QLT with respect to which agreement he
wishes to be paid out under and that he is not entitled to severance pay under
both agreements.

6. CONFLICT OF INTEREST

6.1  
Avoid Conflict of Interest — Except as set out below, during the term of his
employment with QLT, Dr. Panigrahi 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. To avoid improper appearances,
Dr. Panigrahi 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, either as a
customer or a supplier or a co-venturer. QLT and Dr. Panigrahi acknowledge and
agree that from time to time the Chief Executive Officer of QLT may consent in
writing to activities by Dr. Panigrahi which might otherwise appear to be a real
or apparent conflict of interest.
  6.2  
No Financial Advantage — During the term of his employment with QLT,
Dr. Panigrahi 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.
  6.3  
Comply with Policies — During the term of his employment with QLT, Dr. Panigrahi
agrees to comply with all written policies issued by QLT dealing with conflicts
of interest.
  6.4  
Breach Equals Cause — Dr. Panigrahi acknowledges and agrees that material breach
by him of the provisions of this Section 6 will be cause for immediate
termination by QLT of his employment with QLT.

7. CONFIDENTIALITY

7.1  
Information Held in Trust — Dr. Panigrahi acknowledges and agrees that all
business and trade secrets and confidential information which Dr. Panigrahi
acquires during his employment with QLT relating to the business and affairs of
QLT, its affiliates or subsidiaries or to technology, systems, programs, ideas,
products or services which have been or are being developed or utilized by QLT,
its affiliates or subsidiaries or in which QLT, its affiliates or subsidiaries
are or may become interested (collectively, “Confidential Information”), will
for all purposes and at all times, both during the term of Dr. Panigrahi’s
employment with QLT and at all times thereafter, be kept confidential by
Dr. Panigrahi and used by Dr. Panigrahi only for the exclusive benefit of QLT.
  7.2  
Non Disclosure —Dr. Panigrahi acknowledges and agrees that both during the term
of his employment with QLT and at all times thereafter, without the express or
implied consent of QLT, Dr. Panigrahi 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; or

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  (b)  
Use — Use any Confidential Information that he may acquire for his own purposes
or for any purposes, other than those of QLT.

7.3  
Intellectual Property Rights

  (a)  
Disclose Inventions — Dr. Panigrahi 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 Dr. Panigrahi may invent, conceive, create,
design, develop, prepare, author, produce or reduce to practice, either solely
or jointly with others, in the course of his employment with QLT.
    (b)  
Inventions are QLT Property — All Inventions and all other work of Dr. Panigrahi
in the course of his employment with QLT will at all times and for all purposes
be the property of, and are hereby assigned by Dr. Panigrahi to, QLT for QLT to
use, alter, vary, adapt and exploit as it will see fit, and will be acquired or
held by Dr. Panigrahi in a fiduciary capacity solely for the benefit of QLT.
    (c)  
Additional Requirements — Dr. Panigrahi agrees to:

  I.  
Treat all information with respect to Inventions as Confidential Information.
    II.  
Keep complete and accurate records of Inventions, which records will be the
property of QLT and copies of which records will 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 Dr. Panigrahi in the course of his
employment with QLT, 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 — Dr. Panigrahi agrees that all records or copies of records concerning
QLT’s activities, business interests or investigations made or received by him
during his employment with QLT are and will remain the property of QLT. He
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 employment
or at any time during his employment at QLT’s request.
  7.5  
No Use of Former Employer’s Materials and Information — Mr. Panigrahi certifies,
warrants and represents that his performance of all provisions of this Agreement
will not breach any agreement or other obligation to keep in confidence
proprietary or confidential information known to him before or after the
commencement of employment with QLT. Mr. Panigrahi will not disclose to QLT, use
in the performance of his work for QLT, or induce QLT to use, any Inventions (as
defined above), confidential or proprietary information, or other material or
documents belonging to any previous employer or to any other party in violation
of any obligation of confidentiality to such party or in violation of such
party’s proprietary rights; including without limitation whether any products or
services of such previous employer or other person actually incorporated, used,
or were designed or modified based upon such information, and even if such
information constitutes negative know-how.

8. POST-EMPLOYMENT RESTRICTIONS

8.1  
Non-Compete — Dr. Panigrahi agrees that, by virtue of his senior position with
QLT, he will possess strategic sensitive information concerning the business of
QLT, its affiliates and subsidiaries. As a

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result, and in consideration of the payments to be made by QLT to Dr. Panigrahi
under this Agreement, without the prior written consent of QLT, for a period of
one year following termination of his employment with QLT for any reason (by
resignation or otherwise), as measured from his Last Active Day, Dr. Panigrahi
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 or any of its affiliates or subsidiaries with
respect to:

  I.  
the development and/or commercialization and/or marketing of pharmaceutical
products that are directly competitive with QLT’s or its subsidiaries’ then
current commercial products, Visudyne or any other products then being
commercialized by or on behalf of QLT or its affiliates or subsidiaries which
individually have worldwide annual net sales of U.S.$50 million or more in the
calendar year preceding Dr. Panigrahi’s Last Active Day,
    II.  
the development and/or commercialization and/or marketing of light-activated
pharmaceutical products for photodynamic therapy in the treatment of ophthalmic
indications,
    III.  
the development and/or commercialization and/or marketing of pharmaceutical
products for treating ophthalmic indications associated with endogenous retinyl
deficiencies in the eye, or
    IV.  
the development and/or commercialization and/or marketing of pharmacuetical
products and/or devices that are or include lacrimal inserts and punctal plugs,
and/or drug-eluting lacrimal implants and drug-eluting punctal plugs, and
insertion, extraction and detection devices used in connection therewith, for
the treatment or prevention for disease, including ocular diseases,

     
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 pharmaceutical
products that are directly competitive with QLT’s or its subsidiaries’ then
current commercial products, Visudyne or any other products then being
commercialized by or on behalf of QLT or its affiliates or subsidiaries which
individually have worldwide annual net sales of U.S.$50 million or more in the
calendar year preceding Dr. Panigrahi’s Last Active Day,
    II.  
the development and/or commercialization and/or marketing of light-activated
pharmaceutical products for photodynamic therapy in the treatment of ophthalmic
indications,
    III.  
the development and/or commercialization and/or marketing of pharmaceutical
products for treating ophthalmic indications associated with endogenous retinyl
deficiencies in the eye, or
    IV.  
the development and/or commercialization and/or marketing of pharmacuetical
products and/or devices that are or include lacrimal inserts and punctal plugs,
and/or drug-eluting lacrimal implants and drug-eluting punctal plugs, and
insertion, extraction and detection devices used in connection therewith, for
the treatment or prevention for disease, including ocular diseases,

     
anywhere in Canada, the United States or Europe.

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  (c)  
Solicit Employees — Directly or indirectly solicit any individual to leave the
employment of QLT or any of its affiliates or subsidiaries for any reason or
interfere in any other manner with the employment relationship existing between
QLT, its affiliates or subsidiaries and its current employees other than by way
of advertisements of broad distribution not targeted at employees of QLT or its
affiliates or subsidiaries.
    (d)  
Solicit Customers — Directly or indirectly induce or attempt to induce any
customer, supplier, distributor, licensee or other business relation of QLT or
its affiliates or subsidiaries to cease doing business with QLT, its 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 or its affiliates or subsidiaries.

8.2  
Minority Share Interests Allowed — The parties agree that nothing contained in
paragraph 8.1 is intended to prohibit Dr. Panigrahi from owning less than 5% of
the issued and outstanding stock of any company whose stock or shares are traded
publicly on a recognized exchange.

9. REMEDIES

9.1  
Irreparable Damage — Dr. Panigrahi 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, QLT 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 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,
Dr. Panigrahi agrees that QLT will be entitled, without showing actual damages,
to seek 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 in connection therewith.
  9.3  
Additional Remedies — Dr. Panigrahi 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 will see fit.

10. GENERAL MATTERS

10.1  
Tax Withheld — The parties acknowledge and agree that all payments to be made by
QLT to Dr. Panigrahi under this Agreement will be subject to QLT’s withholding
of applicable withholding taxes.
  10.2  
Debarrment — Dr. Panigrahi represents, warrants and covenants that he is not now
nor has in the past been debarred by the United States Food and Drug
Administration under the Food, Drug and Cosmetic Act or under the Generic Drug
Enforcement Act and the Employee has never been convicted under the Food, Drug
and Cosmetic Act or under the Generic Drug Enforcement Act, or under any other
federal law for conduct relating to the development or approval of a drug
product and/or relating to a drug product.
  10.3  
Independent Legal Advice — Dr. Panigrahi 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.

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10.4  
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.
  10.5  
Governing Law — The parties agree that this Agreement will 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.
  10.6  
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 to the addresses set forth on page 1 of this
Agreement to the attention of the following persons:

  (a)  
If to QLT — Attention: Chief Executive Officer, Fax No. (604) 707-7001,

     
with a copy to:
       
QLT Inc.
887 Great Northern Way, Suite 101
Vancouver, British Columbia
Attention:          Corporate Counsel
Fax No.:            (604) 873-0816

  (b)  
If to Dr. Panigrahi — To the address for Dr. Panigrahi specified on page 1 of
this Agreement;

 
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
next business day following the date of transmission.

10.7  
Survival of Terms

  (a)  
Dr. Panigrahi’s Obligations —Dr. Panigrahi acknowledges and agrees that his
representations, warranties, covenants, agreements, obligations and liabilities
under any and all of Sections 7, 8 and 10 of this Agreement will survive any
termination of this Agreement.
    (b)  
Company’s Obligations — QLT 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 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.

10.8  
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.
  10.9  
Entire Agreement — The parties agree that the provisions contained in this
Agreement, any Stock Option Agreements and the Change of Control Agreement
entered into between QLT and Dr. Panigrahi constitute the entire agreement
between QLT and Dr. Panigrahi with respect to the subject matters hereof

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and thereof, and supersede all previous communications, understandings and
agreements (whether verbal or written) between QLT and Dr. Panigrahi regarding
the subject matters hereof and thereof. To the extent that there is any conflict
between the provisions of this Agreement, the Change of Control Agreement and
any Stock Option Agreements between QLT and Dr. Panigrahi, 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 (as defined in the Change
of Control Agreement between QLT and Dr. Panigrahi), the provisions of the
Change of Control Agreement will govern (unless Dr. Panigrahi 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, 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).

10.10  
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.

   
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.

10.11  
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.
  10.12  
Amendments — Any amendment to this Agreement will only be effective if the
amendment is in writing and is signed by QLT and Dr. Panigrahi.

IN WITNESS WHEREOF the parties have executed this Agreement as of the day and
year first written above.
QLT INC.

         
By:
  /s/ Robert L. Butchofsky   /s/ Dipak Panigrahi
 
       
 
  ROBERT L. BUTCHOFSKY
President and Chief Executive Officer   DIPAK PANIGRAHI

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SCHEDULE “A”
RELOCATION EXPENSES
Part I — Relocation to Vancouver:

1.  
Return air fares to Vancouver (tickets provided by QLT) for Dr. Panigrahi and
Dr. Panigrahi’s spouse to find suitable accommodation together with hotel and
rental of an economy car for a period of 3 to 4 days.
  2.  
If required, up to thirty six (36) months of accommodation upon arrival in
Vancouver to a maximum of $6,000 per month ($72,000 per year) , payable in up to
three (3) installments on an annual basis for the rental accommodation in the
immediately preceding year, such that any such payment, if and to the extent
payable, shall be payable on the first payroll date following the first, second
and third anniversary dates of Dr. Panigrahi’s Commencement Date, provided that
Dr. Panigrahi must be actively employed by QLT on each such payment date in
order to receive the payment, and further provided that Dr. Panigrahi provides
to QLT evidence satisfactory to QLT, in its sole discretion acting reasonably,
of the monthly rental rate actually paid in the prior year and the contractual
obligation relating thereto. QLT will assist in locating this accommodation, if
necessary. As required under the Income Tax Act, to the extent these payments
are not used to provide for temporary accommodation while Dr. Panigrahi is
waiting to occupy his new permanent residence, they will be subject to the same
required statutory withholdings in Canada as base salary. As a result, a portion
of any rental accommodation assistance provided as described above may be
subject to required statutory withholdings. In the event of a termination of
employment on Dr. Panigrahi’s part or by QLT for cause (pursuant to paragraphs
3.1 and 5.1, respectively, of the Agreement) within thirty-six (36) months of
the Commencement Date, QLT will be obligated to reimburse Dr. Panigrahi for
rental accommodation only up to and until the date of termination of employment
with QLT, to the extent not previously reimbursed in accordance with this
Part I(2). In the event of termination of employment by QLT other than for cause
(pursuant to paragraph 5.2 of the Agreement) within thirty-six (36) months of
the Commencement Date, QLT will be obligated to reimburse Dr. Panigrahi for
rental accommodation only up to and until the date of termination of employment
plus that number of months calculated pursuant to paragraph 5.3(a)(I) and
(II) of the Agreement for purposes of calculating Dr. Panigrahi’s Severance Pay
in accordance with paragraph 5.2 of the Agreement, to the extent not previously
reimbursed in accordance with this Part I(2).
  3.  
Moving costs for household possessions, including two (2) automobiles, and
excluding bulky items of low value. QLT will assign a corporate moving company.
  4.  
Moving expenses incurred as a result of moving from Dr. Panigrahi’s interim
accommodations to Dr. Panigrahi’s permanent residence in the Greater Vancouver
area, to a maximum of $2,000.00. QLT will assign a corporate moving company.
  5.  
Reimbursement for the rental of an economy car for a one-month period if
necessary.
  6.  
One-way air fares for Dr. Panigrahi and Dr. Panigrahi’s immediate family from
their present location to Vancouver at the time of the move (or return air fare
for Dr. Panigrahi if Dr. Panigrahi relocates to Vancouver prior to his family).
  7.  
Accountable allowance: Reimbursement of up to $5,000.00 to cover other
reasonable expenses associated with Dr. Panigrahi’s move. The following outlines
those moving-related expenses which Canada Customs and Revenue Agency
(CCRA) allows us to reimburse Dr. Panigrahi for without incurring a taxable
benefit. Supporting receipts will be required:

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Previous Residence
    •  
Disconnection charges and fees for telephone, water, space heaters, air
conditioners, barbecues, automatic garage doors, water heater and household
appliances.
    •  
Premiums paid to discharge a mortgage on the former residence where the
purchaser does not assume the mortgage, and lease cancellation fees (including
costs incurred to sub-lease a dwelling)
    •  
Expenses in carrying the former residence after the move in situations where,
notwithstanding all reasonable efforts, a sale of the former residence was not
successfully completed. These expenses include property taxes, heat, hydro,
insurance and grounds maintenance costs.
       
New Residence
    •  
Connection fees or installation costs for items where they existed at the old
residence. These include telephone, water, heating, hydro, cable TV, barbeques,
water softners, water heaters, air conditioners, automatic garage openers, space
heaters, carpets, curtains, drapes, and household appliances.
    •  
Costs and fees for acquisition of new automobile licences, including provincial
automobile inspection.
    •  
Costs incurred to adapt household belongings to the new location where such
items were owned at the old residence, including alterations to household
furniture, piano and organ tuning, adjustments to drapes, blinds and carpets,
and plumbing/watering modifications.
    •  
Expenses incurred by the employee and spouse to locate a home at the new
location, including travel/childcare expenses and boarding of pets.
    •  
Legal costs associated with Will revisions necessitated by the move.
    •  
Long distance telephone charges in connection with the disposition of the former
residence or the acquisition of the new residence.

8.  
Non-accountable allowance: As part of Dr. Panigrahi’s relocation, Dr. Panigrahi
will likely incur a number of incidental expenses which may not appear on the
above list (e.g. cleaning costs). QLT will reimburse Dr. Panigrahi for these
costs up to $650.00 on a tax-free basis in line with CCRA’s accepted policy for
non-accountable allowances (this is in addition to the accountable allowance
noted above). Note that we do not require Dr. Panigrahi to supply supporting
receipts for this reimbursement, however, Dr. Panigrahi will be required to
provide us with a memo certifying that he incurred at least this much in
incidental costs. If Dr. Panigrahi does not provide QLT with this memo, these
costs will be treated as a taxable benefit. Any additional reimbursement
Dr. Panigrahi receive for “incidentals” that are not on the attached list will
be considered a taxable benefit.
  9.  
Tax Advice Associated with Relocation to Canada: QLT will reimburse you for
reasonable expenses to a maximum of Cdn. $3,000 incurred in connection with
seeking independent tax consultation regarding your employment status in Canada.

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Part II — Relocation Back to Texas Upon Termination of Employment by QLT:

   
In the event that QLT terminates the employment of Dr. Panigrahi other than for
cause within 12 months from the commencement of his employment with QLT, QLT
will provide financial assistance for Dr. Panigrahi to relocate back to Texas,
or another location in North America, for purposes of new employment. That
financial assistance will be additional to any severance or other termination
payments made to Dr. Panigrahi under this Agreement and will cover the cost of
Dr. Panigrahi’s move to such location and such other expenses as are
contemplated in paragraphs 1, 3, 4, 5, 6 and 7, but will exclude the cost of any
interim accommodation or any costs associated with the purchase by Dr. Panigrahi
of a new home. The amount of such financial assistance will be computed in the
same manner as the corresponding expenses under Part I of this Schedule “A”, but
in no event will the amount payable exceed the amount originally paid for the
corresponding expenses under each of paragraphs 1, 3, 4, 5, 6 and 7 of this
Schedule “A” to relocate Dr. Panigrahi to Vancouver.
     
The financial assistance to be provided under this Part II of Schedule “A” will
only be provided by QLT in the event that the relocation by Dr. Panigrahi occurs
within six (6) months from the effective date of termination of Dr. Panigrahi’s
employment with QLT.
     
While some of the relocation expenses reimbursed to move Dr. Panigrahi to
Vancouver may not be taxable benefits, as outlined above, Dr. Panigrahi
acknowledges that under the CCRA’s rules some or all of such financial
assistance to relocate Dr. Panigrahi to Texas, or another location in North
America, may be considered a taxable benefit. Unlike the amounts paid under
Part I of Schedule “A”, QLT will not be responsible to gross up any amounts paid
to Dr. Panigrahi pursuant to this Part II of Schedule “A”.

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SCHEDULE “B”
FINAL RELEASE
IN CONSIDERATION OF the payments made to me by QLT Inc. (hereinafter called
“QLT”) pursuant to paragraph 5.3 of the employment agreement dated          day
of                      , 20  _____  between the undersigned and QLT and in
consideration of the waiver by QLT of its rights under paragraph 5.5(a) of that
employment agreement, effective the date of this Release, I,
                     of                      do hereby remise, release and
forever discharge QLT, having a place of business at 887 Great Northern Way,
Suite 101, in the City of Vancouver, Province of British Columbia, V5T 4T5, its
officers, directors, servants, employees and agents, and their heirs, executors,
administrators, successors and assigns, as the case may be, of and from any and
all manner of actions, causes of action, suits, contracts, claims, damages,
costs and expenses of any nature or kind whatsoever, whether in law or in
equity, which as against QLT or such persons as aforesaid or any of them, I have
ever had, now have, or at any time hereafter I or my personal representatives
can, shall or may have, by reason of or arising out of my employment with QLT
and/or the subsequent termination of my employment with QLT on or about
                    , 20  _____  , or in any other way connected with my
employment with QLT and more specifically, without limiting the generality of
the foregoing, any and all claims for damages for termination of my employment,
constructive termination of my employment, loss of position, loss of status,
loss of future job opportunity, loss of opportunity to enhance my reputation,
the timing of the termination and the manner in which it was effected, loss of
bonuses, loss of shares and/or share options, loss of benefits, including life
insurance and short and long-term disability benefit coverage, and any other
type of damages arising from the above. Notwithstanding the foregoing, nothing
in this Release will act to remise, release or discharge QLT from obligations,
if any, which QLT may have pursuant to any indemnity agreements previously
entered into between me and QLT or from any rights I may have to claim coverage
under QLT’s past, current or future director and/or officer insurance policies,
in either case with respect to existing or future claims that may be brought by
third parties.
IT IS UNDERSTOOD AND AGREED that this Release includes any and all claims
arising under the Employment Standards Act, Human Rights Code, or other
applicable legislation and that the consideration provided includes any amount
that I may be entitled to under such legislation.
IT IS FURTHER UNDERSTOOD AND AGREED that this Release is subject to compliance
by QLT with the said conditions as stipulated in paragraph 5.3 of the
aforementioned employment agreement entered into with QLT.
IT IS FURTHER UNDERSTOOD AND AGREED THAT QLT will withhold and remit income tax
and other statutory deductions from the aforesaid consideration and I agree to
indemnify and hold harmless QLT

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from any further assessments for income tax, repayment of any employment
insurance benefits received by me, or other statutory deductions which may be
made under statutory authority.
IT IS FURTHER UNDERSTOOD AND AGREED that this is a compromise and is not to be
construed as an admission of liability on the part of QLT. The terms of this
Release set out the entire agreement between QLT and me with respect to the
matters described herein and are intended to be contractual and not a mere
recital.
IT IS FURTHER UNDERSTOOD AND AGREED that I will keep the contents of this
settlement and all communication relating thereto confidential except to Revenue
Canada or as is required to obtain legal and tax advice, or to enforce my rights
hereunder in a court of law, as is required by law.
IT IS FURTHER UNDERSTOOD AND AGREED that the consideration described herein was
voluntarily accepted by me for the purpose of making a full and final settlement
of all claims described above and that prior to agreeing to the settlement, I
was advised by QLT of my right to receive independent legal advice.
IN WITNESS WHEREOF this Release has been executed effective the       day of
                    , 20___.

           
SIGNED, SEALED AND DELIVERED
By                      in the presence of:
  )
)
)
)       (seal)

  )   DIPAK PANIGRAHI  
Name

  )      
 
  )      
Address
  )      
 
  )      
 
  )      
 
  )      
Occupation
  )      

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SCHEDULE “C”
REIMBURSEMENT OF RESIGNATION COSTS
If required, QLT will reimburse Dr. Panigrahi for any signing bonus or
relocation and moving costs which was paid to Dr. Panigrahi and for which
Dr. Panigrahi has been required to, and is contractually obligated to, repay to
his former employer (such former employer to be that which employed
Dr. Panigrahi immediately prior to his commencement of employment with QLT
hereunder) (the “Former Employer”) as a result of his resignation of employment
in order to commence employment with QLT hereunder. Reimbursement by QLT will
occur once QLT receives written documentation from Dr. Panigrahi, providing
evidence satisfactory to QLT, in its sole discretion acting reasonably, of the
amounts required to be repaid by such Former Employer in each of the above
categories and the contractual or legal obligation for repayment therefor. The
maximum amount that QLT will reimburse is $200,000 USD.

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