**Exhibit 4.6**

**AMENDED EMPLOYMENT AGREEMENT OFMARIO PARADIS**

 

**Æ****TERNA ZENTARIS INC.**

 

**Dated May 2nd,2007**

 

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**AMENDED EMPLOYMENT AGREEMENT**

 
| **BETWEEN:** | **ÆTERNA ZENTARIS INC.**, a Corporation duly incorporated, having its  head office at 1405 Parc-Technologique  Blvd., Québec, QC GIP 4P5, |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                |
|         |                                                                                                                                                |
|         | (hereinafter the **“Corporation”**)                                                                                                       |
|         |                                                                                                                                                |
|         |                                                                                                                                                |
| **AND:**     | **MARIO PARADIS, CA**domiciled at [civic address redacted for  privacy reasons], Québec, Canada                                                |
|         |                                                                                                                                                |
|         |                                                                                                                                                |
|         | (hereinafter the **“Executive”**)                                                                                                         |

 

**SECTION 1 – PURPOSE**

 

1.1           The Corporation wishes to amendthe employment agreement with the Executive. The Executive is willing to amendthe employment agreement entered with the Corporation in 1999, on the terms andconditions set forth herein in this Amended Employment Agreement (the “**Agreement**”). The Executive shall act as Senior VicePresident, Administrative & Legal Affairs and Corporate Secretary andshall report to the President and Chief Executive Officer of the Corporation.

 

**SECTION 2 – DUTIES**

 

2.1           The Executive agrees todevote his full business time to the Corporation, to make every effortnecessary to perform adequately the duties that are assigned to him and to actin the best interests of the Corporation at all times. The Employee shallrefrain from any activity that could be prejudicial to the Corporation’sinterests. In performing his duties with the Corporation, the Executive shallact faithfully and honestly at all times.

 

2.2           The Executive shallcarry out his duties from New Jersey, USA.However, the Executive acknowledges that his position will require traveling,including to Canada and Europe, and the Executive agrees to devote thenecessary and reasonable time to such traveling.

 

2.3           The Executive agrees tocomply with all the instructions, policies and/or rules that areestablished verbally or in writing by the Corporation.

 

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2.4           The Executive shall beentitled to sit on a board of directors of another corporation, solely with theprior written authorization of the Board.

 

**SECTION 3 – COMPENSATION**

 

3.1           Salary

 

The Corporation shall pay theExecutive, for the duration of this Agreement, a base annual salary (the **“Base Salary”**) of THREE HUNDRED AND TEN THOUSAND US DOLLARS(US$310,000.00), payable in accordance with the Corporation’s standard payrollpractice. Such Base Salary shall be reviewed annually and may be increased inaccordance with the Corporation’s policy.

 

3.2           Bonus

 

During the term of this Agreement, theExecutive shall be eligible to receive an annual lump sum cash bonus (the **“Annual Bonus”**) in respect of each full or partial fiscalyear of the Corporation, which is from January 1 to December 31. The Annual Bonus for the 2007 fiscal year shall be equal to anamount representing thirty-five (35%) of the Base Salary. If an Annual Bonus isto be paid hereunder in respect of a period that is a partial fiscal year, suchAnnual Bonus shall be prorated for service through the Executive’s date oftermination. In all cases, the Executive’s eligibility for such Annual Bonus isconditional upon the attainment of objectives, which were mutually agreed atthe beginning of the year and revised recently. According the Corporation’s policy, the granting of Annual Bonus isbased upon an assessment of each individual’s performance as well as theperformance of the Corporation and requires Board approval.

 

3.3           CarAllowance

 

The Corporation shall pay theExecutive an annual taxable car allowance of TWENTY THOUSAND US DOLLARS(US$20,000.00). In addition, the Corporation will assume all related operatingcosts of the vehicle (including insurance, registration, maintenance, repairsand fuel).

 

3.4           Transitionperiod, moving expenses and relocation incentive

 

The Corporation shall reimbursethe Executive, upon presentation of vouchers, the cost of a furnishedapartment, up to a two bedrooms in size, in New Jersey for a period maximum of twelve 12 months starting in August or September 2007. Inaddition, for the same period, the Corporation will reimburse two airlinetickets per month (Quebec City – Newark) for the Executive or a member of hisfamily. Finally, at the time of his final move from Canada to the USA, the Corporation will reimburseall moving expenses incurred by the Executive in connection with the relocationfrom Quebec City to New Jersey according to Industry practices and in mutualagreement between the CEO of the Corporation and the Executive.

 

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The Corporation shall pay theExecutive a net amount of TEN THOUSAND US DOLLARS (US$10,000.00) upon theinitiation of his physical relocation as a relocation incentive. (For the sakeof clarity, the US$10,000 is paid net of income taxes.)

 

3.5           BusinessExpenses

 

The Corporation shall reimbursethe Executive, upon presentation of vouchers, for reasonable entertainment,traveling and other expenses incurred by him on behalf of the Corporation, inaccordance with the Corporation’s policies and rules.

 

3.6           Doubletaxation

 

In the eventuality whereby theExecutive has a double taxation situation (double residency, stock options,etc.), the Corporation shall reimburse the excess tax costs to the Executivesuch that his total tax burden would be no more than that of a similar personresiding in New Jersey who did not have the dual taxation liability. Inaddition, the Corporation shall assume the cost related to the consultation ofa tax expert by the Executive to analyze his fiscal situation in connectionwith the relocation.

 

**SECTION 4 – VACATION**

 

The Executive shall be entitledto paid annual vacation of four (4) weeks, in accordance with theCorporation’s policy, which vacation is to be taken at times prearranged withthe Corporation. Vacation must be taken during the year and shall not becumulative. The full vacation for 2007 is vested for the Executive uponexecution of this agreement.

 

**SECTION 5 – GROUP INSURANCE**

 

5.1           Medical/DentalInsurance, Life and Disability Insurance

 

TheCorporation shall pay the monthly premium for family benefits plan insuranceaccording the Corporation’s existing plan Insurance

 

**SECTION 6 – DURATION ANDTERMINATION**

 

6.1           Duration

 

This contract is for anindeterminate term.

 

6.2           Automatic termination

 

The Executive’s employment shallterminate automatically, without the Corporation being bound to pay anycompensation whatsoever, upon the death of the Executive or the date upon whichhis resignation becomes effective.

 

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The Executive’s employment mayalso be terminated by the Corporation for cause upon simple notice in writingtransmitted to the Executive, without the Corporation being bound to pay anycompensation whatsoever, in the following cases, hereinafter referred to as **“Cause”**:

 
| (a)    |   | If the Executive is declared  bankrupt or insolvent or makes an assignment of his property or is placed  under protective supervision, which situations the Executive acknowledges to  be incompatible with the continuation of his employment.                                                                                                                                                              |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| (b)    |   | If the Executive becomes  physically or mentally disabled to such an extent as to make him unable to  perform his duties normally and adequately for an aggregate of six  (6) months during a period of twelve  (12) consecutive months. In such a case, the Executive may  continue to benefit under short-term and long-term disability insurance  plans, subject to the terms of such plans, if any. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| (c)    |   | If the Executive breaches the  terms of this Agreement.                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| (d)    |   | If the Executive commits any  fraud, theft, embezzlement or other criminal act of a similar nature.                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| (e)    |   | If the Executive has  committed serious misconduct or willful negligence in the performance of his duties.                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| (f)    |   | If the Executive refuses or  fails to follow reasonable directives of the Corporation.                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| (g)    |   | If the Executive’s  demonstrates willful or reckless conduct causing material damage to the  Corporation or the Corporation’s business.                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| (h)    |   | If the Executive misuses or  abuses alcohol, drugs or controlled substances.                                                                                                                                                                                                                                                                                                                                 |

 

6.3           Terminationwithout Cause

 

The Corporation may alsoterminate the Executive’s employment, without cause, by paying him thefollowing:

 

(i)      an amount equivalent toeighteen (18) months of the Executive’s annual Base Salary;

 

(ii)     An amount equivalent to 1.5times the Annual Bonus received by the Executive for the last completed fiscalyear prior to the termination date calculated on a yearly basis; and

 

(iii)    An amount equivalent toeighteen (18) months of the cost of the benefits which were in force at thetime of termination of the Executive’s employment, calculated on a yearlybasis, including the car allowance but excluding the related operating costs. However,Stock Options are

 

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expresslyexcluded from this provision and the Executive shall be treated, in thisregard, in accordance with the terms of the Plan.

 

(i)            The Executiveacknowledges that the said payments are fair and sufficient and, inconsideration of the Corporation giving him such payments in the event of thetermination of his employment without cause, the Executive shall grant theCorporation and its directors, officers, employees, shareholders, representativesand agents, and the directors, officers, employees, shareholders,representatives and agents of any affiliate of the Corporation, a full andfinal release and discharge from any and all claims, past, present or future,that he has or may have, arising directly or indirectly from the termination ofhis employment, whether for prior notice of termination, severance pay, damagesin lieu thereof or for any other reason.

 

6.4           Resignation

 

In the event that the Executivewishes to terminate his employment, he shall give the Corporation prior writtennotice of at least 6 weeks.

 

**SECTION 7 – TERMINATION OFEMPLOYMENT FOLLOWING A CHANGE OF CONTROL**

 

7.1           If the employment ofthe Executive is terminated by the Corporation within twelve (12) monthsfollowing a Change of Control, without Cause by the Corporation or by theExecutive for Good Reason, the whole as defined in Appendix 1, the Executiveshall receive the following:

 

(a)           An amount equivalent toeighteen (18) months of his annual Base Salary;

 

(b)           An amount equivalent to1.5 times the Annual Bonus, if any, which the Executive would have beenentitled to receive in the year during which the Change of Control occurred;and

 

(c)           An amount equivalent toeighteen (18) months of the cost of the benefits which were in force at thetime of termination of the Executive’s employment, calculated on a yearlybasis, including the car allowance, but excluding operating costs. However,Stock Options are expressly excluded from this provision and the Executiveshall be treated, in this regard, in accordance with the terms of the Plan.

 

**SECTION 8 – NO COMPETITION, NOSOLICITATION AND LOYALTY**

 

8.1           The Executive shall notcompete with the Corporation, directly nor indirectly. He shall not participatein any capacity whatsoever in a business that would directly or indirectlycompete with the Corporation, namely one involved in the development and commercialization of the specific endocrinetherapies and oncology treatments which the Corporation is actively developing,including, without limitation, as an executive,

 

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director,officer, employer, principal, agent, fiduciary, administrator of another’sproperty, associate, independent contractor, franchisor, franchisee,distributor or consultant unless such participation is fully disclosed to theCorporation and approved in writing in advance by the Board. In addition, theExecutive shall not have any interest whatsoever in such an enterprise,including, without limitation, as owner, shareholder, partner, limited partner,lender or silent partner. This no competition covenant is limited asfollows :

 

8.1.1        **As to thetime period,** to the duration of the Executive’s employment and for aperiod of one (1) year as of the date of termination of his employment;

 

8.1.2        **As to thegeographical area,**the territory in which a specific product hadbeen actively exploited by the Corporation during the two years preceding thetermination date. For purposes of this clause, the Corporation is deemed tohave actively exploited such territory for such product if, during the two (2) yearsimmediately preceding the termination date:

 

(i)            Distribution rightsfor this product were granted to a distributor of the Corporation, pursuant toa distribution agreement (exclusive or non-exclusive) except if suchdistribution agreement ceased to have effect, prior to the termination date,with the Corporation’s consent and provided that the Corporation did notactively search for other distributors for the territory covered by thisAgreement; or if

 

(ii)           The Corporation hascompleted phase II clinical development work for this product in thisterritory, or searched for commercial partners or applied to protect itsintellectual property rights in relation to the product and its use, includingpatent applications in relation to the product or its use, which applicationsreferred to these territories.

 

8.1.3        **As to thenature of the activities,** to duties or activities which areidentical or substantially similar to those performed or carried on by theExecutive during the twenty-four (24) months preceding the termination of hisemployment.

 

8.2           The foregoingstipulation shall nevertheless not prevent the Executive from buying or holdingshares or other securities of a Corporation whose securities are publiclytraded on a recognized stock exchange where the securities so held by theExecutive do not represent more than fivepercent (5%) of the votingshares of such Corporation and do not allow for its control.

 

8.3           The Executive also undertakes,for the same period and in respect of the same territory referred tohereinabove in sub-sections 8.1.1 and 8.1.2, not to solicit clients of theCorporation, directly or indirectly, not to permit the use of his name in orderto solicit said clients or do anything whatsoever to induce or to lead anyperson to decide to put an end, in whole or in part, to his business relationswith the Corporation.

 

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8.4           The Executive alsoundertakes, for the same period and in respect of the same territory referredto hereinabove in sub-sections 8.1.1 and 8.1.2, not to induce, attempt toinduce or otherwise interfere in the relations which the Corporation has withits distributors, suppliers, representatives, agents and other parties withwhom the Corporation deals.

 

8.5           The Executive alsoundertakes, for the same period and in respect of the same territory referredto hereinabove in sub-sections 8.1.1 and 8.1.2 not to induce, attempt to induceor otherwise solicit the personnel of the Corporation to leave their employmentwith the Corporation nor to hire the personnel of the Corporation for anyenterprise in which the Executive has an interest.

 

8.6           The Executiveacknowledges that the provisions of this section 8 are limited as to the timeperiod, the geographic area and the nature of the activities to what theparties deem necessary to protect the legitimate interests of the Corporation,while allowing the Executive to earn his living.

 

8.7           Nothing in this sectionshall operate to reduce nor to extinguish the obligations of the Executivearising at law or under this contract which survive at the termination of thecontract in reason of their nature and, in particular, without limiting theforegoing, the Executive’s duty of loyalty and obligation to act faithfully andhonestly.

 

**SECTION 9 – CONFIDENTIALITY**

 

9.1           The Executiveacknowledges that he has received and will receive or conceive, in carrying onor in the course of his work during his employment with the Corporation,confidential information pertaining to the activities, the technologies, theoperations and the business, past, present and future, of the Corporation orits subsidiaries or related or associated companies which information is not inthe public domain. The Executive acknowledges that such confidentialinformation belongs to the Corporation and that its disclosure or unauthorizeduse could be prejudicial to the Corporation and contrary to its interests.

 

Accordingly, the Executiveagrees to respect the confidentiality of such information and not to make useof or disclose or discuss it to or with any person, other than in the course ofhis duties with the Corporation, without the explicit prior writtenauthorization of the Corporation.

 

This undertaking to respect theconfidentiality of such information and not to make use of or disclose ordiscuss it to or with any person shall continue to have full effectnotwithstanding the termination of the Executive’s employment with theCorporation, so long as such confidential information does not become public asa result of an act by the Corporation or a third party which act does notinvolve the fault of one its Executives.

 

9.2           The term “confidentialinformation” includes among other things:

 

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9.2.1        products, formulae,processes and composition of products, as well as raw materials andingredients, of whatever kind, that are used in their manufacture;

 

9.2.2        technical knowledge andmethods, quality control processes, inspection methods, laboratory and testingmethods, information processing programs and systems; manufacturing processes,plans, drawings, tests, test reports and software;

 

9.2.3        equipment, machinery,devices, tools, instruments and accessories;

 

9.2.4        financial information,production cost data, marketing strategies, raw materials supplies, suppliers,staff and client lists and related information, marketing plans, salestechniques and policies, including pricing policies, sales and distribution dataand present and future expansion plans; and

 

9.2.5        research, experiments,inventions, discoveries, developments, improvements, ideas, industrial secretsand “know-how”.

 

9.3           The Executiveundertakes to keep the terms of this Agreement confidential.

 

**SECTION 10 – OWNERSHIP OFINTELLECTUAL PROPERTY**

 

10.1         The Executive herebyassigns and agrees to assign to the Corporation all his intellectual propertyrights as of their creation and to make full and prompt disclosure to theCorporation of all information relating to anything made or designed by him orthat may be made or designed by him during the period of his employment,whether alone or jointly with other persons, or within a period of two (2) yearsfollowing the termination of his employment and resulting from or arising outof any work performed by the Executive on behalf of the Corporation orconnected with any matter relating or possibly relating to any business inwhich the Corporation or any of its subsidiaries or related or associatedcompanies is involved unless specifically released from such obligation inwriting by the Board.

 

In addition, the Executiverenounces all moral rights in any document or work realized during the periodof his employment. The Executive acknowledges that the Corporation has theright to use, modify or reproduce any document or work realized by theExecutive, at its entire discretion, without the Executive’s authorization andwithout his name being mentioned.

 

10.2         Atanytimeduringtheperiodofhisemploymentoraftertheterminationofhisemployment,theExecutiveshallsign,acknowledgeanddeliver,attheCorporation’sexpense,butwithoutcompensationotherthanareasonablesumforhistimedevotedtheretoifhisemploymenthasthenterminated,anydocumentrequiredbytheCorporationtogiveeffecttosection10.1,includingpatentapplicationsanddocumentsevidencingtheassignmentofownership.TheExecutiveshallalsoprovidesuchotherassistanceasthe

 

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Corporationmay require with respect to any proceeding or litigation relating to theprotection or defense of intellectual property rights belonging to theCorporation.

 

10.3         This section shall bebinding on the Executive’s heirs, assignees and legal representatives.

 

**SECTION 11 – OWNERSHIP OFFILES AND OTHER PROPERTY**

 

11.1         Any file, sketch,drawing, letter, report, memo or other document, any equipment, machinery,tool, instrument or other device, any diskette, recording tape, compact disc orsoftware or any other property which comes into the Executive’s possessionduring his employment with the Corporation, in the performance or in the courseof his duties, regardless of whether he has participated in its preparation ordesign, how it may have come into his possession and whether or not it is anoriginal or a copy, shall at all times remain the property of the Corporationand, upon the termination of the Executive’s employment, shall be returned tothe Corporation or its designated representative before the Executive leaveshis place of work. The Executive may not keep a copy or give one to a thirdparty.

 

**SECTION 12 – TERMINATION OFPRIOR CONTRACTS**

 

12.1         As of the effective datehereof, this Agreement supersedes and cancels any prior agreement, verbal orwritten, with respect to the Executive’s employment with the Corporation.

 

**SECTION 13 – AMENDMENT OF THEAGREEMENT**

 

13.1         To be valid, anyamendment to this Agreement must be confirmed in writing by the Corporation and by the Executive.

 

**SECTION 14 – NOTICES**

 

14.1         Any notice givenhereunder shall be given in writing and sent by registered or certified mail orhand delivered. If such notice is sent by registered or certified mail, itshall be deemed to have been received five (5) business days following thedate of its mailing if the postal services are working normally. If such is notthe case, the notice must be hand delivered or served by bailiff, at thediscretion of the sender. In the case of hand delivery or service, the noticeshall be deemed to have been received the same day. It is agreed that if thedelivery date is a non-business day, the notice shall be deemed to have beenreceived on the following business day.

 

**SECTION 15 – ELECTION OFDOMICILE**

 

15.1         For the purposes of theexercise of any rights flowing from this Agreement and the institution of legalproceedings, the parties elect domicile in the judicial district of Québec

 

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**SECTION 16 – SUCCESSORS**

 

16.1         This Agreement shall bebinding on the successors, heirs, assignees and legal representatives of theparties.

 

**SECTION 17 – INTERPRETATION**

 

17.1         This Agreement shall begoverned by and interpreted in accordance with the laws of the province of Québec.

 

**SECTION 18 – LANGUAGE**

 

The parties have expressly requestedthat this Agreement be drafted in the English language. *Les parties ont expressément requis que cetteconvention d’emploi soit rédigée en anglais.*

 

**IN WITNESS WHEREOF**the parties hereto have duly signed this Agreement on this 2nd day of May, 2007.

 

 
| **Æ****TERNA ZENTARIS INC.**      |               |              |
|----------------------------------------|--------------------|-------------------|
|                                   |               |              |
| By:                                    | /s/ David J. Mazzo |              | /s/ Mario Paradis |
|                                   |               |              |
| David J.  Mazzo, Ph.D.                 |               | Mario Paradis, CA |
|                                   |               |              |
| President  and Chief Executive Officer |               |              |
|                                        |                    |                   |  |

 

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**ANNEX1**

 

**CHANGE OF CONTROL PROGRAM (the “Program”)**

 

**1.**                                      Applicability of the Program

** **

TheExecutive shall be entitled to the benefit of the Program if both conditionsmentioned below occur:

 

(A)                             there is a **“Change of Control”** of the Corporation, as defined below; and

 

(B)                               The Executive’s employment is terminated, within twelve (12) monthsfollowing a Change of Control :

 

(i)                  involuntarily, at therequest of the Corporation or its successors, except **“for Cause”**or

 

(ii)               by him, for **“Good Reason”.**

 

**2.**                                      Definitions

** **

(A)                              For purposes of the Program and unless otherwise defined, thecapitalized terms used herein shall have the following meaning:

 

(i)                  **“Person”** includes anyindividual, firm, partnership, association, trust, trustee, executor,administrator, legal personal representative, government, governmental body orauthority, corporation, or other incorporated or unincorporated organization,syndicate or other entity;

 

(ii)               Subject to the exceptionsset out in Schedule A hereto, a Person shall be deemed the **“Beneficial Owner”**of or to **“BeneficiallyOwn”**(a) anysecurities of which such Person or any of such Person’s affiliates orassociates, as such terms are defined in *National Instrument 45-106– Prospectus and Registration Exemptions*, is owner at law or in equity;(b) any securities which the Person or any of such Person’s affiliates orassociates has the right to acquire within 60 days (whether such right isexercisable immediately or after the passage of not more than 60 daysthereafter or upon the occurrence of a contingency or the making of a payment)pursuant to any securities convertible into Voting Shares, agreement,arrangement, pledge or understanding, whether or not in writing (other thancustomary agreements with and between underwriters and/or banking group and/orselling group members with respect to a distribution of securities or pledgesof securities in the ordinary course of the pledgee’s business); and (c) anysecurities that are Beneficially Owned within the meaning of clauses (i) or(ii) of this Subsection 2(A)(ii) by any other Person with which suchPerson is acting jointly or in concert;

 

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(iii)            **“****Voting Shares****”** means the common shares andany other securities the holders of which are entitled to vote generally on theelection of directors of the Corporation.

 

(B)                                For purposes of the Program, involuntary termination of employment **“for Cause”** includes the following:

 

(i)                  if the Executive commits anyfraud, theft, embezzlement or other criminal act of a similar nature; or

 

(ii)               if the Executive is guiltyof serious misconduct or willful negligence in the performance of his duties.

 

(C)                                For purposes of the Program, **“Good Reason”**means the occurrence, without the Executive’s express written consent, of anyof the following acts:

 

(i)                  a material reduction of theExecutive’s total compensation (including annual Base Salary plus Annual Bonus,benefits and number of stock options) as in effect on the date of thisAgreement or as same may be increased from time to time ;

 

(ii)               a material reduction orchange in the Executive’s duties, authority, responsibilities, accountabilityor a change in the business or corporate structure of the Corporation whichmaterially affects his authority, compensation or ability to perform duties orresponsibilities (such as shifting from a policy making position to a policyimplementation position);

 

(iii)            a forced relocation; or

 

(iv)           a material change in theterms and conditions of this Program.

 

(D)                                For purposes of the Program, a **“Change of Control”** shall be deemedto have occurred in any of the following circumstances:

 

(i)                  subject to the exceptionsset out in Schedule B hereto, upon the purchase or acquisition, in oneor more transactions, by a Person or one or more Persons who are affiliates ofone another or who are acting jointly or in concert (as such expressions aredefined in the *Securities Act* (Ontario)) (the **“Acquiring Person”**)of a beneficial interest in securities of the Corporation representing in anycircumstance fifty percent (50%) or more of the voting rights attaching to thethen outstanding securities of the Corporation; or

 

(ii)               upon a sale or otherdisposition of all or substantially all of the Corporation’s assets; or

 

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(iii)            upon a plan of liquidationor dissolution of the Corporation; or

 

(iv)           if, for any reason,including an amalgamation, merger or consolidation of the Corporation with orinto another company, the individuals who at the date hereof constitute theBoard of Directors of the Corporation (and any new directors whose appointmentby the Board of Directors of the Corporation or whose nomination for electionby the Corporation’s shareholders was approved by a vote of at least two-thirds(2/3) of the directors then still in office who either were directors at thedate hereof or whose appointment or nomination for election was previously soapproved) cease to constitute a majority of the members of the Board ofDirectors of the Corporation.

 

**3.**                                      Payment

** **

Inthe event that the two (2) conditions mentioned in Section 1 aboveare met, the Executive shall receive, in a lump sum, at the latest within ten (10) daysof the effective date of the termination of employment, the payment of theamounts mentioned in section 7 ofthe Agreement.

 

Shouldthe Executive die before he has received the full payments, his estate shallreceive, immediately following his death, a cash amount equal to the unpaidbalance, less required statutory deductions.

 

Itis understood that the Executive will not be required to mitigate the amount ofany payment hereunder by seeking other employment or otherwise.

 

**4.**                                      Release

** **

TheExecutive acknowledges that the full and complete execution of all obligationsundertaken by the Corporation and its successors under the Program, to theextent the Program becomes applicable pursuant to Section 1 of theProgram, constitutes adequate notice of termination and in consideration andsubject to the full and complete execution of all such obligations, theExecutive agrees to grant the Corporation, its affiliated and related companiesand their respective directors, officers, shareholders, representatives,employees, successors and assigns, a full and final release and discharge forall claims, past, present or future, that he has or may have, arising directlyor indirectly from his employment and the termination thereof, whether forprior notice of termination, severance pay, damages in lieu thereof or for anyother reason.

 

**5.**                                      General

** **

TheExecutive’s participation in the Program shall end immediately upon thetermination of his employment with the Corporation or one of its affiliates forany reason whatsoever. The Program is for an indefinite term commencing on thedate of this Agreement. Furthermore, the Corporation shall have the right priorto the occurrence of a Change of Control, in its sole discretion, to terminatethe Executive’s participation in the Program at the end of each twelve(12)-month period commencing on the date of this Agreement by sending him awritten notice of termination at least thirty (30) days prior to the firstanniversary date of this Agreement and of 

 

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eachanniversary date thereafter. For example, the Corporation would be entitled toexercise its discretion to terminate the Executive’s participation in theProgram if, as of the date of the notice of termination, there has been duringsaid twelve (12)-month period a material reduction in the responsibilities ofthe Executive.

 

**6.**                                      Successors

** **

Theterms and conditions hereof shall bind the Corporation, its successors andassignees.

 

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**Schedule A**

 

***Exceptions to the definition of “BeneficialOwner” and “Beneficially Own” (Section 2 (A)(ii) of the Program)***

 

APerson shall not be deemed the **“Beneficial Owner”**of or to **“BeneficiallyOwn”** any security:

 

(A)                             as a result of such security having been deposited or tendered pursuantto a take-over bid (as such term is defined in the *Securities Act*(Ontario)) made by such Person or any of such Person’s affiliates orassociates or any other Person acting jointly or in concert with such Personuntil such deposited or tendered security is taken up and paid for;

 

(B)                               as a result of entering into an agreement, including a lock-upagreement, pursuant to which it has been agreed that such security will bedeposited or tendered until such deposited or tendered security is taken up andpaid for;

 

(C)                               as a result of (a) such Person or any of the affiliates orassociates of such Person holding such security provided that the ordinarybusiness of any such Person (the **“Fund****Manager”**) includes the management of investment funds forothers and such security is held by the Fund Manager in the ordinary course ofsuch business in the performance of such Fund Manager’s duties for the accountof any other Person (a **“Client”**); (b) suchPerson (the **“Trust****Company”**)being licensed to carry on the business of a trust company under applicablelaws and, as such, acting as trustee or administrator or in a similar capacityin relation to the estates of deceased or incompetent Persons (each an **“Estate****Account”**) or inrelation to other accounts (each an **“Other****Account”**) and holding such security in the ordinary course ofsuch duties for such Estate Accounts or for such Other Accounts;  (c) such Person (the **“Plan****Administrator”**)being the administrator or the trustee of one or more pension funds or plans (a **“Plan”**) registered under the laws of Canada or any provincethereof or the laws of the United States of America or any state thereof andsuch security being held by the Plan Administrator or the Plan in the ordinarycourse of such Plan Administrator’s or Plan’s activities; (d) such Person(the **“Crown****Agent”**)being established by statute for purposes that include, and the ordinarybusiness or activity of such Person includes, the management of investmentfunds for employee benefit plans, pension plans or insurance plans of variouspublic bodies and such security is held 

 

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bythe Crown Agent in the ordinary course of the management of such investmentfunds; or (e) such Person being a Plan and such security being held by thePlan in the ordinary course of such Plan’s activities; provided, however, thatin any of the foregoing cases the Fund Manager, the Trust Company, the PlanAdministrator, the Crown Agent or the Plan, as the case may be, is not thenmaking or has not then announced a current intention to make a take-over bid(as such term is defined in the *Securities Act*(Ontario)), alone or by acting jointly or in concert with any other Person,other than an offer to acquire the Voting Shares pursuant to a distribution bythe Corporation or by means of market transactions made in the ordinary courseof business of such Person (including pre-arranged trades entered into in theordinary course of business of such Person) executed through the facilities ofa stock exchange or organized over-the-counter-market;

 

(D)                              because such Person is a Client of the same Fund Manager as anotherPerson on whose account the Fund Manager holds such security, or because suchPerson is an Estate Account or an Other Account of the same Trust Company asanother Person on whose account the Trust Company holds such security, orbecause such Person is a Plan with the same Plan Administrator as another Planon whose account the Plan Administrator holds such security;

 

(E)                                because such Person is a Client of a Fund Manager and such security isowned at law or in equity by the Fund Manager, or because such Person is anEstate Account or an Other Account of a Trust Company and such security isowned at law or in equity by the Trust Company, or because such Person is aPlan and such security is owned at law or in equity by the Plan Administrator;or

 

(F)                                because such Person is the registered holder of securities as a resultof carrying on the business of, or acting as, a nominee of a securitiesdepositary.

 

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**Schedule B**

 

***Exceptions to the definition of “AcquiringPerson” (Section 2 (D)(i) of the Program)***

 

# **“**ACQUIRING PERSON” SHALL MEAN ANY PERSON WHOIS AT ANY TIME AFTER THE DATE HEREOF THE BENEFICIAL OWNER OF FIFTY PERCENT (50%) OR MORE OF THE OUTSTANDING VOTING SHARES OF THECORPORATION; PROVIDED, HOWEVER, THAT THE TERM “ACQUIRING PERSON”SHALL NOT INCLUDE:

# ** **

(i)            theCorporation or any corporation controlled by the Corporation;

 

#### (ii)           anyPerson who becomes the beneficial owner of **fifty percent (50%)**or more of the outstanding Voting Shares as a result of one or any combinationof: (a) a Voting Share Reduction; (b) an Exempt Acquisition; or (c) aPro Rata Acquisition; provided, however, that if a Person shall become theBeneficial Owner of **fifty percent (50%)**or more of the outstanding Voting Shares by reason of one or any combination ofa Voting Share Reduction, an Exempt Acquisition or a Pro Rata Acquisition, andthereafter becomes the Beneficial Owner of an additional one percent of anyVoting Shares then outstanding (otherwise than pursuant to an additional VotingShare Reduction, Exempt Acquisition or Pro Rata Acquisition), then, as of thedate that such Person becomes a Beneficial Owner of such additional VotingShares, such Person shall become an **“Acquiring Person”**;or

####  

#### (iii)          anunderwriter or member of a banking or selling group acting in such capacitythat becomes the Beneficial Owner of **fifty percent (50%)**or more of the Voting Shares in connection with a distribution of securitiespursuant to an underwriting agreement with the Corporation;

####  

Forpurposes of the Program, the capitalized terms used herein shall have thefollowing meaning:

 

(a)                                 **“Voting Share Reduction”** means anacquisition or redemption by the Corporation or any corporation controlled bythe Corporation of Voting Shares which, by reducing the number of Voting Sharesoutstanding, increases the percentage of Voting Shares Beneficially Owned byany Person to fifty percent (50%) or more of the Voting Shares thenoutstanding;

 

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(b)                                **“Exempt Acquisition”**means an acquisition whereby a Person became an Acquiring Person byinadvertence and without any intention to become, or knowledge that it wouldbecome, an Acquiring Person under this Program and, in the event that a waiveris granted by the Board of Directors, such acquisition shall be deemed not tohave occurred for the purposes hereof. Any such waiver may only be given on thecondition that such Person, within 10 days after the foregoing determination bythe Board of Directors or such later date as the Board of Directors maydetermine (the “Disposition Date”), has reduced its Beneficial Ownership ofVoting Shares such that the Person is no longer an Acquiring Person and suchwaiver shall only be effective if the reduction has occurred within such 10-dayperiod; **[NTD: To consider whether such an event can everoccur]**

 

(c)                                 **“****Pro RataAcquisition****”** means an acquisition by a Person of Voting Shares pursuant to (i) anydividend reinvestment plan, such purchase plan or other plan of the Corporationmade available to all holders of Voting Shares (other than holders resident inany jurisdiction where participation in such plan is restricted or impracticalas a result of applicable law); (ii) a stock dividend, a stock split orother event pursuant to which such Person becomes the Beneficial Owner ofVoting Shares on the same pro rata basis as all other holders of Voting Sharesof the same class or series; (iii) the acquisition or exercise of rightsto purchase Voting Shares distributed to all holders of Voting Shares (otherthan holders resident in any jurisdiction where such distribution or exerciseis restricted or impractical as a result of applicable law) by the Corporationpursuant to a rights offering (but only if such rights are acquired directlyfrom the Corporation); or (iv) a distribution of Voting Shares orconvertible securities in respect thereof offered pursuant to a prospectus orby way of a private placement by the Corporation or a conversion or exchange ofany such convertible security, provided that such Person does not therebyacquire a greater percentage of Voting Shares or convertible securities sooffered than the Person’s percentage of Voting Shares Beneficially Ownedimmediately prior to such acquisition.

 

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