exv10w62







Exhibit 10.62




NUCRYST PHARMACEUTICALS

Employee Incentive Program
 





Revised 2009




 









 








Contents



Overview



How the Employee Incentive Program Works





	•	 	Plan Objective
	 
	•	 	Performance Period
	 
	•	 	Company Performance Measures
	 
	•	 	Performance Levels





How Payouts are Made





	•	 	Annual Award Calculation
	 
	•	 	Receiving Your Annual Award
	 
	•	 	Tax Implications





More Program Details





	•	 	Who’s Eligible
	 
	•	 	Who’s Eligible to Receive a Payout
	 
	•	 	Sale of All or Substantially All of Business
	 
	•	 	The Last Word
	 
	•	 	Key Dates







 









 








Overview



NUCRYST Pharmaceuticals Corp. (“NUCRYST” or the “Company”) is pleased to offer this short-term
incentive plan — the Employee Incentive Program —  (the “Incentive Program”) which is a bonus plan
for all eligible employees (“Participants”) of NUCRYST and its subsidiaries (“NUCRYST Companies”)
that is designed to reward them for contributing to the achievement of NUCRYST’s annual goals, as
established by the Company (“Annual Goals”) in any calendar year. The Incentive Program is designed
to provide greater rewards for significant or outstanding achievement. The amount each Participant
is eligible to receive under the Incentive Program each year (“Annual Award”) is determined on an
annual basis, based on whether and to what extent NUCRYST achieves its Annual Goals for the
relevant calendar year (the “Performance Period”).



How the Employee Incentive Program Works




Plan Objective



While NUCRYST includes competitive base pay and a comprehensive benefits program as critical
components of total compensation, an equally important component is linking compensation to Company
performance. The Incentive Program is a dynamic plan that is intended to accomplish this linkage
by providing employees with an opportunity to share in the corporate success they help to achieve
through their efforts.



Performance Period



Each calendar year, beginning on January 1 of each year, constitutes a separate Performance Period.



Company Performance Measures



Prior to the beginning of each Performance Period, the Company will establish Annual Goals and
financial measures and weightings for each Annual Goal. The Annual Goals (typically 1 to 6 per
year) will have three performance payout levels: Threshold, Target, and Stretch. These goals and
corresponding payout levels will be communicated on an annual basis to all employees.



Performance Levels



There are three key performance levels under the Incentive Program which are as follows:



	 	 	 	 	 
	 
	Threshold
	 	•
	 	the minimum level of performance necessary to earn a
payout

	 	 	•
	 	there will be no payout for performance below Threshold

	 	 	•
	 	there is an 80% probability of attaining at least
Threshold performance measures

	 
	Target
	 	•
	 	the expected level of performance

	 
	Stretch
	 	•
	 	the level of performance beyond Target that earns the
maximum payout

	 	 	•
	 	the largest payout opportunity; there is a 20%
probability of attaining Stretch performance measures

	 




Although specific goals are established annually for each of the three levels, actual results may
come in at any number — from below the minimum Threshold level through to the maximum Stretch
level. Typically, the Incentive Program will interpolate between the three levels: Threshold,
Target and Stretch. However, if the Annual Goal is defined as a milestone, where a definitive goal
must be achieved at each of the three levels, no interpolation is made.



 









 








How Payouts are Made




Annual Award Calculation



The Annual Award amount each Participant is eligible to receive in respect of a Performance Period
is determined based upon two circumstances — first, how well the Company performed relative to the
Annual Goals set and second, the Participant’s position within the Company, as follows:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Incentive Payout Levels (as a % of base salary)	 
	 	 	Threshold	 	Target	 	Stretch
	 
	Vice Presidents
	 	 	20%	 	 	 	40%	 	 	 	70%	 
	 
	Directors/ Associate Directors
	 	 	10%	 	 	 	20%	 	 	 	40%	 
	 
	Manager/Professional
	 	 	 	 	 	 	 	 	 	 	 	 
	•    includes those who have attained full
professional status, or are
employed in a profession and
have equivalent knowledge
through direct field
experience
	 	 	5%	 	 	 	10%	 	 	 	20%	 
	 
	Technical/Operating
	 	 	 	 	 	 	 	 	 	 	 	 
	•    includes technologists, technicians,
operators, clerks,
secretaries, analysts,
material processors,
production assistants and
developing professionals
	 	 	2.5%	 	 	 	5%	 	 	 	10%	 





Base Salary Defined: Base salary is your total regular earnings as per your pay stub, excluding
benefits, overtime, and any other special pay.


In calculating Annual Awards, if the Company does not achieve the Threshold performance level for a
particular Annual Goal, no payout will be made in respect of that Annual Goal.



Receiving Your Annual Award



Annual Awards will be paid out to an eligible Participant by February 28 of the year following the
Performance Period, provided that the Participant is on the payroll of one of the NUCRYST Companies
at the time of the payment. Payment will be in the form of a lump-sum cheque.



Tax Implications



Incentive earnings are considered taxable income in the year you receive your payout. All
applicable taxes will be withheld.



More Program Details




Who’s Eligible



All regular full-time, salaried employees of the NUCRYST Companies are eligible to participate in
this Incentive Program. Regular part-time employees are also eligible, however, the payout of any
Annual Award will be prorated based on the hours worked throughout the Performance Period. Payout
of an Annual Award is subject to and conditional upon compliance by a Participant throughout the
Performance Period and up to and including the day or payment with all policies, guidelines and
laws applicable to the particular NUCRYST Companies employing the Participant. A determination
that an employee is not eligible to receive an Annual Award due to the employee’s failure to
demonstrate compliant behaviour will be made by the Chief Executive Officer and the Chief Financial
Officer of NUCRYST.



 









 







Employees who are hired throughout the Performance Period will be eligible to participate in the
Incentive Program effective on their date of hire; however, the payment of any Annual Award will be
prorated from their date of hire. Any change to an employee’s incentive payout level will also be
prorated for the time spent at each level.


Temporary, casual and contract employees are not eligible to participate under the Incentive
Program.



Who’s Eligible to Receive a Payout



To receive an Annual Award under the Incentive Program, you must be on the payroll of one of the
NUCRYST Companies as an eligible employee on the payout date and in compliance — assuming the
Incentive Program is paying out for the previous year. For example, if the payout date for the
2008 year is February 25, 2009, you must be on one of the NUCRYST Companies’ payroll on that payout
date. If you have resigned before that date or been terminated, with or without cause, from
employment before that date you will not be eligible to receive payment of any Annual Award.


There are exceptions: If you become disabled as determined in accordance with the terms of the
disability benefit program in place for the particular NUCRYST Company with which you are employed
and as such experience any absence that exceeds 2 months of continuous absence or 40 working days
in a calendar year, or if you go on an approved leave of absence during the Performance Period, you
will receive a payout of any Annual Award achieved under the Incentive Plan in the Performance
Period prorated over the portion of the year you worked. If you die during the Performance Period,
your beneficiary will receive a payout of any Annual Award prorated for the portion of the year you
worked.



Sale of All or Substantially All of the Business



If all or substantially all of the business of NUCRYST is sold during the year, eligible employees
will receive a payout at the Target level prorated for the portion of the year you were an employee
of NUCRYST unless you remain employed by NUCRYST or you are employed by the successor company and
the successor company assumes the obligations under this Incentive Program or offers similar
benefits under a comparable program of its own. If you remain employed with NUCRYST or become an
employee of a successor Company who has assumed NUCRYST’s obligations under the Incentive Program,
then the usual terms of the Incentive Program will apply. If you are employed by the successor who
offers similar benefits, then the terms of the successor’s plan will apply.



The Last Word



NUCRYST’s Incentive Program is designed to reward you when the Company meets or exceeds its Annual
Goals. With this Incentive Program, you have the opportunity to increase your cash compensation
when the Company does well. And in those years when business targets are not met, you continue to
earn a competitive base salary. Both your base pay and Incentive Program work together to reward
you for your contribution to NUCRYST’s success.



	 	 	 
	Key Dates
	 	 
	 
	 	 
	Corporate Performance Measures Set

	 	Fourth Quarter for next Program year
	 
	 	 
	Performance Updates

	 	Quarterly
	 
	 	 
	Incentive Program Payouts

	 	Prior to February 28