Document:

exv10w5

 

Exhibit 10.5

Summary of Amendments made, effective July 1, 2007, to Letter Agreement with Dr. Turner.

Effective July 1, 2007, the Company increased Dr. Katherine J. Turner’s base salary to $220,000 and
amended her payout range under the Company’s variable pay program to 20% of base salary at
threshold, 40% at target and 70% at stretch.exv10w6

 

Exhibit 10.6

NUCRYST Pharmaceuticals Corp.

Board Compensation

	 	 	 	 	 
	 	 	 	 	Annual Value
	Category	 	NUCRYST Plan	 	(approx.)
	Initial Equity Grant

	 	5,000 Restricted Shares
	 	n/a (1) 
	 

	 	(immediate vesting, with 1,000 available	 	 
	 

	 	for sale in 1 year and 4,000 to be held for	 	 
	 

	 	duration of board service)	 	 
	 

	 	8,000 Stock Options	 	 
	 
	 	 	 	 
	Annual Retainer

	 	$15,000 
	 	$15,000 
	Board Meeting Fees

	 	$2,000/meeting
	 	$12,000 (assumes 6 meetings/year)
	(including
	 	 	 	 
	telephone meetings)
	 	 	 	 
	 
	 	 	 	 
	Annual Stock Award

	 	3,000 Restricted Shares
	 	$55,000 (2)
	 

	 	 	 	 
	 

	 	(50% vest after 1 year and 50% after	 	 
	 

	 	second year)
	 	Total Annual Board Comp. — $82,000 
	 

	 	2,000 Stock Options	 	 
	 
	 	 	 	 
	Committee Chair

	 	$7,500 for Audit
	 	$7,500 Audit Chair
	Annual Retainer

	 	$5,000 for Human Resources & Compensation
	 	$5,000 Other Chairs
	 

	 	$5,000 for Corporate Governance and	 	 
	 

	 	Nominating	 	 
	 
	 	 	 	 
	Committee Meeting

	 	Audit
	 	$6,400 — $12,200 
	Fees

	 	     Chair — $1,500/meeting
	 	(Depending on committee and chair
	(including

	 	     Member — $1,200/meeting
	 	composition. Assumes 2 committees per
	telephone meetings)

	 	HR & Compensation / Corp. Gov. & Nominating
	 	member, and 6 audit meetings and 4 of the
	 

	 	     Chair — $1,000/meeting
	 	other committees.)
	 

	 	 	 	 
	 

	 	     Member — $800/meeting	 	 

Notes:

	(1)	 	Directors are required to hold minimum equity equal in value to 2.5 times the annual
retainer, which equates to $37,500. For purposes of this calculation,
common and restricted shares are included, but options are not. Directors have 3 years to achieve this minimum
ownership level.
	 
	(2)	 	The company will continue with its deferred share unit plan whereby directors may elect to
receive DSUs in lieu of cash fees (retainers and meeting fees). This will likely come into
force for the 2007 calendar year.exv10w7

 

Exhibit 10.7

NUCRYST PHARMACEUTICALS CORP.

DEFERRED SHARE UNIT PLAN

	1.	 	Definitions

	 	(a)	 	“Act” means the Income Tax Act (Canada).
	 
	 	(b)	 	“Board” means the Board of Directors of the Company.
	 
	 	(c)	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	(d)	 	“Common Shares” means the common shares of the Company.
	 
	 	(e)	 	“Committee” means the committee appointed by the Board to administer the DSU Plan.
	 
	 	(f)	 	“Company” means Nucryst Pharmaceuticals Corp.
	 
	 	(g)	 	“DSU Plan” means this Deferred Share Unit Plan, as may be amended from time to time.
	 
	 	(h)	 	“DSUs” means deferred share units granted pursuant to the DSU Plan as described
herein.
	 
	 	(i)	 	“Effective Payout Date” means the date the Participant receives a payment in
respect of the DSUs, on the terms set out in section 4.
	 
	 	(j)	 	“Exchange” means the NASDAQ National Market or, if the Common Shares are not
then listed and posted for trading on the NASDAQ National Market, on such stock
exchange or quotation system on which such shares are listed, posted for trading or
quoted.
	 
	 	(k)	 	“Market Price” means the closing price of the Common Shares of the Company on
the Exchange for the trading day immediately preceding (i) the date on which the
granting of the DSU is approved by the Committee, or (ii) the Effective Payout Date, as
applicable. In the event that the Common Shares are not listed and posted for trading
on any stock exchange, the Market Price shall be determined in accordance with the
provisions in section 409A of the Code.
	 
	 	(l)	 	“Participant(s)” means any individual to whom DSUs are granted pursuant to the
terms of the DSU Plan.
	 
	 	(m)	 	“Termination Date” means, in the case of a director, the effective date of such
person ceasing to be a director of the company for any reason whatsoever and, in the
case of an officer or employee, the effective date of such person ceasing to be an
officer or employee of the Company for any reason whatsoever.

	2.	 	Administration and Granting
	 
	 	 	DSUs shall be granted and administered by the Committee. Any grant of DSUs shall be subject
to the approval of the Board. Members of the Committee and the Board shall be eligible to
receive a grant of DSUs as long as a member does not participate in any discussion or
decision as to such grant.

 

 

	3.	 	Value on Grant
	 
	 	 	Each DSU shall be attributed a value based on the Market Price on the date of grant. DSUs
may be granted at attributed values greater than, equal to or lesser than the Market Price.

	4.	 	Payout of DSUs

	 	(a)	 	DSUs granted to an individual Participant shall be valued as at the Effective
Payout Date for such Participant, with each DSU equal to the Market Price on the
Effective Payout Date.
	 
	 	(b)	 	Payment of granted DSUs shall be made by the Company within a reasonable amount
of time after the Termination Date, and shall be net of all tax and other required
withholdings.
	 
	 	(c)	 	DSUs shall constitute a liability of the Company and shall only be payable in
cash. For greater certainty, the granting of a DSU does not entitle the holder thereof
to acquire or otherwise obtain any rights or interests whatsoever in any Common Shares
(including the right to dividends) or other securities of the Company. Participants
have no right or ability to exercise, receive or otherwise demand payment of the value
of DSUs granted to them prior to the Effective Payout Date.
	 
	 	(d)	 	Notwithstanding any other provision of the Plan, all amounts payable to, or in
respect of, a Participant under this section shall be paid (i) with respect to a
non-U.S. Participant, on or before December 31 of the calendar year commencing
immediately following the Termination Date of such Participant and (ii) with respect to
a U.S. Participant, no later than a date within the same calendar year as the
Termination Date of such Participant or, if later, on or before the 15th day
of the third calendar month following the Termination Date of such Participant except
as otherwise provided pursuant to section 4(f) of the Plan.
	 
	 	(e)	 	Notwithstanding any other provision of the Plan, no amount will be paid to, or
in respect of, a Participant under this Plan or pursuant to any other arrangement, and
no DSUs will be granted to such Participant as compensation for a downward fluctuation
in value of the Common Shares, nor will any other form of benefit be conferred upon, or
in respect of, a Participant for such purpose.
	 
	 	(f)	 	Notwithstanding any other provision of the Plan, the payment of amounts
otherwise payable hereunder may be delayed if such delay is necessary to avoid any
excise tax payable by a Participant under Section 409A of the Code.

	5.	 	General

	 	(a)	 	DSUs granted to Participants are not transferable.
	 
	 	(b)	 	The Board may discontinue or amend the DSU Plan at any time; provided, however,
that no such amendment may, without the written consent of a Participant, alter or
impair any DSU previously granted to such Participant. Notwithstanding the foregoing,
any amendment, suspension, or termination of the Plan shall be such that the Plan
continuously satisfies the requirements of paragraph (d) of Regulation 6801 of the Act
and section 409A of the Code or any successor provision thereto.
	 
	 	(c)	 	A grant of DSUs does not confer upon a Participant any right with respect to
continuation of employment by the Company or any subsidiary, nor does it interfere in
any way with his or her right or the Company’s right to terminate his or her employment
at any time.exv10w8

 

Exhibit 10.8

Summary of Non-Employee Director Compensation, as amended effective June 14, 2007

Effective June 14, 2007, the Human Resources and Compensation Committee of the Board of Directors
of the Company approved an amendment to the Company’s Directors Compensation Plan to provide for
the payment of a travel fee to the non-executive directors in the amount of $2,000 if they must
travel by air from another continent to attend a board meeting and in the amount of $1,000 if they
must travel by air in North America for more than four hours one-way to attend a board meeting.exv10w9

 

Exhibit 10.9

Summary of 2007 Named Executive Performance Targets under Variable Pay Program

     The variable pay program is an annual incentive cash incentive program and provides all of our
employees, including executive officers, the opportunity to earn cash incentive bonuses based on
the achievement of specific company or function performance goals.

     Our board of directors approved overall corporate performance targets for 2007 that are
designed to motivate the achievement of the objectives set out in business plan and individual
objectives in relation to each executive officer. Each performance metric has a weight within the
plan, and the sum of the weights is 100%.

     There are three performance levels established for the goals: Threshold, Target, and Stretch,
defined below:

	 	 	 
	Threshold

	 	• the minimum level of performance necessary to receive a
payout
	 

	 	• there is no payout for performance below Threshold
	 

	 	• we believe there is a greater than 50% probability of
attaining at least Threshold performance measures
	 
	 	 
	Target

	 	• the expected level of performance
	 

	 	• we believe there is a good probability of attaining target
performance measures
	 
	 	 
	Stretch

	 	• performance beyond Target
	 

	 	• we believe there is a low probability of attaining Stretch
performance measures

     Our Chief Executive Officer, Mr. Gardner, will not participate in the variable pay program as
his employment agreement provides for a target bonus award
opportunity in the manner set forth in the agreement, and in future
years according to annual bonus criteria be as
determined by our board of directors (or its Human Resources and Compensation Committee). Pursuant
to Mr. Gardner’s employment agreement, in lieu of a pro-rated annual incentive award for calendar
year 2007, Mr. Gardner was granted Restricted Stock Units under our 1998 Equity Incentive Plan,
as amended (the “1998 Plan”).

     For
2007, all of our other executive officers have variable pay program payout
ranges as a percentage of base salary of 20% at Threshold, 40% at Target and 70% at Stretch.

     Under the performance targets approved by our board for 2007, a variable cash component will
be paid to executive officers based on two performance components: (i) 75% is based upon the
overall achievement of corporate performance objectives approved by our board for 2007; and (ii)
25% is based upon whether and/or to what degree individual executive officers achieve their
individual objectives approved by our board.

     Each component of the 2007 Plan allows for under performance (threshold), on target
performance and over performance (Stretch). The minimum payment is 0% for both components.

     Corporate Performance Component. On the corporate performance side, the 2007 goals are:

	 	•	 	share price appreciation, which is measured by calculating the weighted average increase
in our Nasdaq share price. This corporate measure of share price appreciation accounts for
10% of the total incentive payout for all executive officers.

	 	•	 	Two Production targets associated with meeting or exceeding production volume targets
for certain materials and milestones associated with production process improvement

 

 

	 	•	 	Four New Product Development objectives associated with reaching regulatory or
development milestones in the development and regulatory processes for certain new product
initiatives
	 
	 	•	 	Two Research and Development objectives relating to product testing and milestone
achievement
	 
	 	•	 	Expense Control objectives relating to performance to approved budget

Individual Objectives for 2007

     Individual objectives for each executive officer are proposed by our Chief Executive Officer
and are evaluated by the Human Resources and Compensation Committee.

Our board of directors can exercise discretion to pay compensation even if performance does not
meet our performance goals.

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