exv10w58









Exhibit 10.58




CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE




     This CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE (this “Agreement”) is entered into
effective the 31st day of December, 2008, by and between Edward Gaj Jr. (“GAJ”) and
NUCRYST Pharmaceuticals Inc., a Delaware corporation (“NUCRYST”).



     WHEREAS, GAJ has been employed by NUCRYST in the Commonwealth of Massachusetts to serve as an
employee of NUCRYST and an officer of NUCRYST Pharmaceuticals Corp. (“NPC”) pursuant to terms of
employment set forth in that certain Offer of Employment made by NUCRYST dated May 9, 2007 and
accepted by GAJ on May 10, 2007, as amended by letter agreement dated January 15, 2008, and
accepted by GAJ on January 21, 2008 between NUCRYST and GAJ (the “Employment Agreement”); and



     WHEREAS, GAJ executed an Employee Confidentiality and Non-Compete Agreement (the
"Confidentiality Agreement”), executed July 9, 2007 by GAJ and accepted by NUCRYST and NPC on July
10, 2007; and



     WHEREAS, the Confidentiality Agreement contains post-employment obligations and restrictions;
and



     WHEREAS, NUCRYST and GAJ desire to terminate amicably GAJ’s employment by NUCRYST; and



     WHEREAS, GAJ is entitled to certain amounts and benefits provided in the Employment Agreement
upon the termination of his employment in the absence of this Agreement; and



     WHEREAS, in this Agreement, in consideration of the mutual promises contained herein, NUCRYST
has offered GAJ certain separation payments and benefits in lieu of, and greater than, the amounts
and benefits provided under the Employment Agreement;



     IT IS HEREBY AGREED by GAJ and NUCRYST as follows:



     1. GAJ acknowledges and agrees that his employment with NUCRYST will be permanently and
irrevocably severed, effective December 31, 2008 (the “Termination Date”), that he resigns from his
position as officer of NPC as of the Termination Date, and that NUCRYST has no obligation,
contractual or otherwise, to hire, rehire or re-employ GAJ in the future. The Termination Date
shall be the date of the “qualifying event” under the Consolidated Omnibus Budget Reconciliation
Act of 1985 (“COBRA”) and, except as detailed in this Agreement, GAJ’s eligibility to participate
in NUCRYST’S benefits programs including, without limitation, NUCRYST’s group medical and dental
coverage, 401K, life insurance, health-spending account credits, short and long term disability and
out of country medical coverage, ends on the Termination Date. GAJ will receive wages in the
amount of $8,705.00 for all work performed by him during the last pay period ending on the
Termination Date and his accrued but unused vacation pay in the amount of $16,153.80, less any
applicable payroll withholdings, in a paycheck to be issued to him on the Termination Date. GAJ
acknowledges and agrees that said amounts represent all wages, including accrued vacation, due and
owing to him as of the Termination Date. GAJ’s rights and obligations with regard to any vested
Options and/or vested Restricted Stock Options he may have as of the Termination Date, including
his right to exercise any of those vested Options and/or Restricted Stock Options after the
Termination Date, shall be governed by the terms and conditions set forth in: the Stock Option
Agreement, executed by GAJ on July 2, 2007 (the “Option Agreement”); and, the Restricted Stock Unit
Award Agreement, executed by GAJ on July 2, 2007 (the “RSU Agreement”).



     2. GAJ, on behalf of himself, his heirs, executors, administrators and assigns and anyone else
claiming by, through or under him, for and in consideration of the undertakings of NUCRYST set
forth herein, and intending to be legally bound, does hereby release, covenant not to sue and
forever discharge NUCRYST, NPC and The Westaim Corporation (“Westaim”), together with their parent
and subsidiaries,



 









 







affiliates, predecessor and successor corporations and business entities, joint ventures, and
partners, past, present and future, and its and their agents, directors, officers, employees,
stockholders, investors, insurers and reinsurers, assigns, representatives, and attorneys, past,
present and future, and its and their assigns, heirs, executors, and administrators, past, present,
and future (collectively, the “Releasees”), jointly and severally, of and from and with respect to
any and all legally waivable causes of action, suits, debts, contracts, covenants, agreements,
promises, torts, damages, claims, complaints, demands and liabilities, indemnity, costs, interest,
loss or injury whatsoever of any name, kind and nature, both in law and in equity whether expressed
or implied, suspected or unsuspected, howsoever arising (collectively, the “Claims”), which GAJ, or
his heirs, executors, administrators and assigns, may heretofore have had, may now have, ever had,
or may in the future have against each or any of the Releasees by reason of any matter, cause or
thing whatsoever arising at any time prior to and up to and including the effective date of the
signing of this Agreement by GAJ, including, without limitation, any and all Claims relating to
GAJ’s employment by NUCRYST or the termination of that employment, the discipline of GAJ by any of
the Releasees, the compensation for and working conditions of that employment, including, but not
limited to, any Claims under the Age Discrimination in Employment Act, the Older Workers Benefit
Protection Act, Title VII of the Civil Rights Act of 1964, Section 1981 of the Civil Rights Act of
1870, the Americans with Disabilities Act, the Family Medical Leave Act, the Employee Retirement
Income Security Act, M.G.L. c. 151B, and any and all other federal, state or local statutory or
common law Claims, now or hereafter recognized, including but not limited to, any Claims for
economic loss, compensatory damages, punitive damages, liquidated damages, costs, fees, or other
expenses including attorney’s fees incurred in these matters, any Claims concerning wages, lost
pay, discretionary pay, benefits, bonuses or variable pay under any of the Releasee’s variable pay
program or any gratuitous payments promised by any of the Releasees. Notwithstanding the
foregoing, this release shall not apply to any vested rights to retirement, pension, 401(k) plan,
or like benefits to which GAJ is otherwise entitled as of the Termination Date.



     3. GAJ acknowledges and agrees that in the absence of this Agreement, upon the Termination
Date he would be solely entitled to the amounts and benefits provided for under the terms of the
Employment Agreement. In lieu of the amounts and benefits provided under the Employment Agreement,
and in full consideration of GAJ’s execution of this Agreement, and his agreement to be legally
bound by its terms, NUCRYST agrees to make the following payments and fulfill the following
promises after receipt by NUCRYST of GAJ’s signature on this Agreement and after the expiration of
the revocation period set forth in paragraph 13(e):



          (a) pay GAJ a lump sum payment of $135,000.00, less applicable tax withholding and deductions,
within thirty (30) days after the expiration of the revocation period set forth in paragraph 13(e);




          (b) should GAJ elect to receive continued health insurance and/or dental insurance coverage
after the Termination Date pursuant to COBRA, NUCRYST will pay any employee contribution that is
required of GAJ for such continued coverage until the earlier of: (i) June 30, 2009; or (ii) the
date on which GAJ obtains health insurance and/or dental insurance coverage himself or receives
health insurance and/or dental insurance coverage through a new employer, at which time NUCRYST
will cease paying GAJ’s contribution; and




          (c) allow GAJ to convert to a personal policy any disability or life insurance policies that
are so convertible, in accordance with the terms of such policies, provided that GAJ shall be
responsible for any premiums and conversion costs that may be due on such policies after the
Termination Date.




     4. GAJ’s continuous service under any and all pension and retirement plans of NUCRYST, NPC and
Westaim shall cease as of the Termination Date. With respect to GAJ’s vested interest in such
plans, if any, GAJ will be entitled to either a payout of such funds, less any required deductions,
or to roll-over such vested funds into another fund or plan. In the event that GAJ elects to roll
over the funds into another plan, he shall arrange for the preparation of all documents and other
arrangements required to facilitate this process.



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     5. Except as expressly set forth in paragraphs 1 and 3 of this Agreement, GAJ expressly agrees
that he has been paid all remuneration owed to him by NUCRYST or Releasees as a result of his
employment by NUCRYST in any capacity, the termination of that employment, the termination of the
Employment Agreement, or for any other reason, including but not limited to all accrued salary,
wages, perquisites, variable pay, vacation pay, bonus pay, profit-sharing, stock options,
restricted stock award units, stock, expenses, termination benefits, special incentive payments, or
any other compensation, with the sole exception of any accrued benefits under any qualified
retirement plan maintained by NUCRYST in which GAJ has participated, and that NUCRYST and Releasees
do not have, and will not have, any obligation to provide GAJ at any time in the future with any
other payments, benefits, or consideration.



     6. Except as expressly set forth herein, the parties hereto acknowledge that the undertakings
of each of the parties herein are expressly contingent upon the fulfillment and satisfaction of the
obligations of the other party as set forth herein.



     7. GAJ acknowledges and agrees that this Agreement is not and shall not be construed to be an
admission of any violation of any federal, state or local statute, regulation or law, or of any
duty owed by any of the Releasees to GAJ, or of any wrongdoing to GAJ by any of the Releasees, and
that this Agreement is made voluntarily to provide an amicable conclusion of his employment
relationship with and by NUCRYST in any capacity.



     8. GAJ agrees, covenants and promises to keep the terms of this Agreement confidential and not
to take any steps to publicize the fact or terms of this Agreement, even if this Agreement is
disclosed by any of the Releasees. GAJ represents that he has not communicated or disclosed, and
will not hereafter communicate, discuss or disclose, the terms of this Agreement to any persons
except, as he may be required by local, state or federal law or regulation or by compulsory process
of law, and provided that in case of such requirement he shall notify NUCRYST within forty-eight
(48) hours of such requirement in writing, and except for disclosures to members of his immediate
family, his attorney, and his accountant or tax advisor, each of whom shall be informed of this
confidentiality obligation and shall agree to be bound by its terms. Nothing herein shall restrict
NUCRYST or any of the Releasees from disclosing the fact or terms of this Agreement.



     9. GAJ agrees and covenants that, without the written consent of the President and CEO of
NUCRYST, GAJ will not enter upon or otherwise gain access to physical properties or databases of
NUCRYST, NPC or Westaim after the Termination Date. GAJ further covenants that he will not take
any other action which has the intent or effect of bringing harm to NUCRYST, NPC, Westaim, or their
respective businesses, properties, management, directors or affiliates. Without limiting the
foregoing, GAJ agrees not to interfere in any manner with the relationships of NUCRYST, NPC or
Westaim with their respective customers, suppliers, stockholders or employees.



     10. GAJ agrees and covenants not to disparage or to make any statement to any third party
reflecting negatively on NUCRYST or any of the Releasees, or on any product, technology, business,
services or employees of NUCRYST or any of the Releasees, publicly or privately. Nothing in this
paragraph shall preclude GAJ, NUCRYST or any of the Releasees from communicating or testifying
truthfully to the extent expressly required or protected by law, as a party in litigation, by the
proper inquiry of a state or federal governmental agency, by a subpoena to testify issued by a
court of competent jurisdiction, or in any action to enforce the terms of this Agreement.



     11. GAJ acknowledges that he has entered into the Confidentiality Agreement with NUCRYST and
NPC, and he understands and agrees that he continues to be bound by the terms of said agreement.
In addition, GAJ agrees that he shall keep entirely secret and confidential, and shall not disclose
to any person or entity, in any fashion or for any purpose whatsoever, any information that is not
available to the general public regarding any of the Releasees to which GAJ has had access or about
which he heard during the course of his employment by NUCRYST, including (without limitation) any
information relating to the business or operations of NUCRYST, NPC and/or Westaim; their plans,
strategies, prospects or objectives; their products, technology, processes or specifications; their
research



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and development operations or plans; their customers and customer lists; their manufacturing,
distribution, procurement, sales, service, support and marketing practices and operations; their
financial conditions and results of their operations; their operational strengths and weaknesses;
and their personnel and compensation policies, procedures and transactions.



     12. GAJ acknowledges that breach by him of any of the covenants or provisions set forth
herein, including a breach of his obligations under the Confidentiality Agreement, would cause
NUCRYST and NPC severe and irreparable harm. Accordingly, in the event of an actual or threatened
breach by GAJ of any of the covenants or provisions set forth herein or in the Confidentiality
Agreement, each of NUCRYST and NPC will be entitled to seek an injunction restraining GAJ from
violating such covenants or provisions without the posting of a bond. The seeking of any such
injunction shall not affect the right of NUCRYST or NPC to seek and obtain damages on account of
any such actual or threatened breach of the covenants or provisions of this Agreement or the
Confidentiality Agreement. GAJ also shall be responsible to pay the costs and expenses to NUCRYST
and NPC, including attorneys’ fees, arising out of the commission by GAJ of any breach of said
covenants.



     13. GAJ hereby certifies that:



          (a) he has read the terms of this Agreement, and that he understands its terms and effects,
including the fact that he has agreed to release and forever discharge the Releasees from any legal
action arising out of his employment by and with NUCRYST, the terms and conditions of that
employment relationship, and the termination of that employment relationship;




          (b) he has signed this Agreement voluntarily and knowingly in exchange for the consideration
described herein, which he acknowledges is adequate and satisfactory to him;




          (c) the payments, benefits, promises and undertakings performed, and to be performed, as set
forth in this Agreement exceed and are greater than the payments and benefits, if any, to which he
would have been entitled had he not executed this Agreement;




          (d) he has been informed that he has forty-five (45) calendar days to consider whether or not
to sign this Agreement, and has signed on the date indicated below after concluding that this
Agreement is satisfactory; if GAJ elects not to take the full forty-five (45) days to consider this
Agreement, he agrees that he has done so knowingly, voluntarily, and with full understanding that
he is waiving a statutory right to consider this Agreement for forty-five (45) days;




          (e) he has been informed that he has the right to revoke this Agreement for a period of seven
(7) calendar days following his execution of this Agreement by giving written notice to NUCRYST,
and that this Agreement shall not be effective, enforceable, final or binding until this seven (7)
day period has expired;




          (f) he understands and agrees that if he revokes this Agreement, pursuant to paragraph 13(e),
that NUCRYST shall have no obligation to provide GAJ with any of the payments or benefits provided
in paragraph 3 of this Agreement other than the amounts that would be required per the terms of the
Employment Agreement, and that no other payments or benefits will be provided in lieu of such;




          (g) he has been informed in writing, in a manner understandable to GAJ, of the job titles and
ages of all individuals who have also been selected for reduction-in-force, the eligibility factors
for the reduction-in-force and any applicable time limits, as well as the job titles and ages of
the individuals in the same job classifications or organizational unit who were not eligible or
selected for the reduction-in-force; and




          (h) he has been and is hereby advised by NUCRYST to consult with an attorney prior to signing
this Agreement, and he has in fact done so with his counsel of choice.




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     14. GAJ represents that he has returned or forthwith will return all property of NUCRYST, NPC
and Westaim including, but not limited to, keys, files, records (and copies thereof), cellular
phones and pagers, which are in his possession or control; provided that GAJ may retain the laptop
computer and blackberry provided to him following NUCRYST’s removal from such computer of: (i) all
confidential and/or proprietary information of NUCRYST, NPC and Westaim; and (ii) all licensed
software which is not freely transferable by NUCRYST. Subject to the foregoing, GAJ further agrees
to leave intact all electronic information and documents of NUCRYST, NPC, and Westaim including
those which he developed or helped to develop during his employment. GAJ represents and agrees
that after the Termination Date, he will continue to abide by the post-employment obligations and
restrictions set forth in the Confidentiality Agreement, and that his obligations under the
Confidentiality Agreement survive the termination of his employment by NUCRYST.



     15. GAJ represents and warrants that he has not filed any complaints, claims, charges or
lawsuits against any of the Releasees with any governmental agency or any court and that he will
not do so any time hereafter. To the extent permitted by applicable law, GAJ further agrees that
he will not recommend or suggest to any federal, provincial or local government agency or potential
claimants against or employees of Releasee that they initiate any claim or lawsuit against any of
the Releasees and GAJ will not voluntarily aid, assist or cooperate with any claimants against or
employees of any of the Releasees in bringing such claims and lawsuits. If any agency or court
assumes jurisdiction of any complaint or charge against any of the Releasees on behalf of GAJ, or
any class of which he may be a member, he shall request the agency or court to withdraw from the
matter insofar as it affects him. Additionally, he shall not in any way benefit financially from
any litigation brought or conducted by such agency or court and shall take all reasonable steps
necessary to refuse any compensation in connection with any damages claimed in connection
therewith. Nothing in this paragraph shall be construed to prevent GAJ from giving truthful
testimony in response to direct questions asked pursuant to a lawful subpoena or other legal
process during any future legal proceeding involving any of the Releasees.



     16. This Agreement constitutes the entire agreement between GAJ and NUCRYST with respect to
the subject matter hereof and supersedes and replaces any and all prior agreements or
understandings, whether written or oral, between the parties, including the Employment Agreement,
except that GAJ’s Confidentiality Agreement, the Option Agreement, and the RSU Agreement, continue
in force and effect and shall survive the termination of the Employment Agreement and the
termination of GAJ’s employment according to their respective terms. GAJ acknowledges that neither
NUCRYST, nor any of the Releasees, have made any promise, representation or warranty whatsoever,
express or implied, written or oral, other than the express written representations herein. This
Agreement may not be altered, amended, modified, or otherwise changed in any respect except by
another written agreement signed by both GAJ and NUCRYST.



     17. This Agreement shall be governed, interpreted and enforced by and under the laws of the
Commonwealth of Massachusetts, without regard to choice of law principles, except where federal law
controls. This Agreement shall be enforced by the federal or state courts located in the
Commonwealth of Massachusetts. GAJ consents to the personal jurisdiction of such courts, and
waives any jurisdiction or venue defenses otherwise available to him. GAJ hereby irrevocably and
unconditionally waives his rights to a jury trial of any claim or cause of action based upon or
arising out of this Agreement or any of the transactions contemplated in this Agreement. Should
any provision of this Agreement be declared by any court of competent jurisdiction to be invalid,
illegal or unenforceable and if such provision cannot be modified to be enforceable, such provision
shall immediately be deemed not a part of this Agreement and the validity of the remaining
provisions shall not be affected and shall remain in full force and effect. The language of all
parts of this Agreement shall be construed as a whole, according to its fair meaning, and not
strictly for or against any party.



     18. GAJ recognizes and acknowledges that Releasees may seek the assistance, cooperation or
testimony of GAJ in connection with any investigation, litigation, patent application or
prosecution, or intellectual property or other proceeding arising out of matters within the
knowledge of GAJ and related to his position as an employee of NUCRYST in any capacity, and in any
such instance, GAJ represents and
warrants that he shall provide such assistance, cooperation or testimony and Releasees shall
pay GAJ’s reasonable costs and expenses in connection therewith.



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     19. GAJ agrees that, for a period of eighteen (18) months after the Termination Date, he shall
notify NUCRYST in writing of any change of residence address and of any subsequent employment
(stating the name and address of the employer and providing a description of the title and duties
of the position) or of any other business activity.



     20. This Agreement shall be binding upon and inure to the benefit of: (i) GAJ and his heirs,
administrators, executors, legal representatives and permitted assigns; (ii) NUCRYST and its
predecessors, successors, parent companies, affiliate companies, subsidiary companies and assigns;
and (iii) the Releasees and their respective heirs, administrators, executors, legal
representatives, predecessors, successors, affiliate companies, subsidiary companies and assigns.
GAJ may not assign his rights or obligations under this Agreement without the prior written consent
of NUCRYST.



     21. Any notice required to be given to any party under any provision of this Agreement shall
be made in writing, by first class mail, to the following addresses:




	 	 	 	To NUCRYST: to the attention of General Counsel, NUCRYST Pharmaceuticals Corp.,
10102 -114 Street, Fort Saskatchewan, Alberta T8L 3W4.
	 
	 	 	 	To GAJ: to the attention of Edward Gaj, Jr., 20 Sugarbush Lane, Andover, MA 01810.





     22. This Agreement may be executed in any number of counterparts, each of which when executed
and delivered shall be deemed to be an original, and such counterparts together shall constitute
one and the same agreement. For the purpose of this section, the delivery by facsimile or by
electronic delivery of a PDF of an executed counterpart of this Agreement shall be deemed to be
valid execution and delivery of this Agreement and may be relied upon as an original.
Notwithstanding the foregoing, the party delivering a facsimile or PDF copy shall deliver an
original executed counterpart of this Agreement as soon as possible after delivering the facsimile
or PDF copy.



IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have executed the
foregoing Confidential Separation Agreement and General Release to be effective as of the date
written above.



	 	 	 	 	 
	 	NUCRYST PHARMACEUTICALS INC.

 	 
	 	By:  	/s/Thomas E. Gardner
 	 
	 	 	Thomas E. Gardner 	 
	 	 	Chairman & CEO 	 
	 



PLEASE READ CAREFULLY. THIS DOCUMENT INCLUDES A RELEASE OF CERTAIN KNOWN AND UNKNOWN CLAIMS.




Signed by GAJ at 3pm on this 24 day of December, 2008.




	 	 	 
	 

	 	 
	/s/Edward Gaj Jr
	 	 
	 
	 	 
	Edward Gaj Jr.
	 	 






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ATTACHMENT



The following is a listing of the job titles and ages of the individuals who have been selected for
reduction-in-force as well as the job titles and ages of the individuals in the same job
organizational unit who were not selected for a reduction in force as of December 31, 2008. Due to
changing business requirements, the relocation of the executive headquarters to Princeton, New
Jersey, and the need to reduce expenses, NUCRYST must institute a reduction-in-force. Reductions
were determined based on the corporate objectives and associated business requirements, ability to
relocate, years of relevant experience, job skills and abilities required to support the
achievement of business requirements and corporate objectives.




	 	 	 	 	 	 	 
	 	 	 	 	No.	 	No. Not
	Job Title	 	Age	 	Selected	 	Selected
	Senior Formulation Scientist,
Pharmaceutical Services
	 	72	 	1	 	0
	 
	 	 	 	 	 	 
	Chairman of the Board, President & CEO
	 	61	 	0	 	1
	 
	 	 	 	 	 	 
	Vice President, Chief Financial Officer
	 	42	 	0	 	1
	 
	 	 	 	 	 	 
	Executive Assistant, Finance
	 	37	 	1	 	0
	 
	 	 	 	 	 	 
	Vice President, Corporate Development
	 	52	 	1	 	0
	 
	 	 	 	 	 	 
	Associate Director, Business Development
	 	31	 	0	 	1







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