Document:

Exhibit 4.3

 

	
  GESCHÄFTSFÜHRER

  	
   

  	
  SERVICE
  CONTRACT FOR

  
	
  DIENSTVERTRAG

  	
   

  	
  MANAGING
  DIRECTOR

  
	
   

  	
   

  	
   

  
	
  Zwischen

  	
   

  	
  between

  
	
   

  	
   

  	
   

  
	
   

  	
  Æterna Zentaris GmbH, vertreten durch die 

  Gesellschafterversammlung, Weismüllerstraße 50, 60314 Frankfurt am Main

  	
   

  	
   

  	
  Æterna Zentaris GmbH, represented by its
  shareholders’ meeting, Weis müllerstraße 50, 60314 Frankfurt am Main

  
	
   

  	
   

  	
   

  
	
  - nachstehend “Gesellschaft” genannt -

  	
   

  	
  - hereinafter referred to as the “Company”-

  
	
   

  	
   

  	
   

  
	
  vertreten durch die
  Gesellschafterversammlung

  	
   

  	
  represented by the
  shareholders’ meeting

  
	
   

  	
   

  	
   

  
	
  und

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
  Herrn Prof. Jürgen Engel, [civic address redacted for
  privacy reasons], Alzenau

  	
   

  	
   

  	
  Prof. Juergen Engel,
  [civic address redacted for privacy reasons], Alzenau

  
	
   

  	
   

  	
   

  
	
  - nachstehend “Geschäftsführer” - 

  	
   

  	
  - hereinafter “Managing Director” - 

  
	
   

  	
   

  	
   

  
	
  Artikel 1 - Aufgabenbereich und Pflichten

  	
   

  	
  Article 1 - Position and Scope of Duties

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Herr
  Prof. Engel ist mit Wirkung der Umwandlung von der Zentaris AG in die
  Gesellschaft zum Geschäftsführer der Gesellschaft bestellt worden. Nach Maßgabe eines entsprechenden Gesellschafterbeschlusses
  und

  	
   

  	
  1.1
  

  	
  According
  to a respective shareholders’ resolution and respective provisions in the
  management guidelines, he acts as a member of the management as Managing
  Director. By this contract, the parties enter into a 

  
										

 

 

	
   

  	
  einer
  entsprechenden Regelung in der Geschäftsordnung hat er die Stellung eines Geschäftsführers inne. Mit diesem Vertrag wird
  ein Dienstverhältnis zwischen den Parteien geschlossen. In seiner Funktion
  ist der Geschäftsführer gemeinsam mit den anderen bestellten Geschäftsführern für die Leitung der Gesellschaft sowie - auf
  Verlangen der Gesellschafter - der Tochter - und Beteiligungsgesellschaften verantwortlich.

  	
   

  	
   

  	
  service relationship. In his capacity as
  managing director, he, along with the other Managing Directors, is
  responsible for the management of the Company and - upon request of the
  shareholders - of subsidiaries and associated companies.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.2 

  	
  Die
  Gesellschaft behält sich das Recht vor, jederzeit weitere Geschäftsführer zu bestellen
  und/oder andere und/oder weitere Tätigkeiten dem Geschäftsführer zuzuweisen.

  	
   

  	
  1.2
  

  	
  The
  Company may, at any time, appoint additional managers (“Geschäftsführer”) and/or
  assign different and/or additional responsibilities to the Managing Director.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.3 

  	
  Der
  Geschäftsführer wird seine Pflichten mit der Sorgfalt eines ordentlichen Kaufmanns
  nach Maßgabe der Bestimmungen  dieses Vertrages, des Gesellschäftsvertrages, der

  	
   

  	
  1.3

  	
  The
  Managing Director shall perform his duties as managing director by observing
  the diligence of a prudent businessman in accordance with the provisions of
  this Service Contract, the 

  

 

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  allgemeinen
  Richtlinien und besonderen Anweisungen der Gesellschafter und der Gesetze erfüllen.

  	
   

  	
   

  	
  Company’s
  Articles of Association, the general and specific directives or instructions
  given by the shareholders, and in accordance with the law.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Artikel 2 - Nebentatigkeiten

  	
   

  	
  Article 2 - Other Activities

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Der
  Geschäftsführer verpflichtet sich, seine ganze
  Arbeitszeit und Arbeitskraft der Gesellschaft zu widmen. Es ist ihm während
  der Dauer dieses Vertrages nicht gestattet, eine bezahlte Tätigkeit auszuüben bzw. eine Tätigkeit, für die üblicherweise eine Vergütung gewährt wird, einschließlich einer Teilzeitbeschäftigung, es sei
  denn, es liegt eine ausdrückliche vorherige schriftliche Zustimmung
  der Gesellschaft vor. Die Erteilung oder Nichterteilung einer solchen
  Zustimmung steht in dem freien Ermessen der Gesellschaft. Bereits jetzt
  willigt die Gesellschaft in eine nebenberufliche Beratungstätigkeit des Geschäftsführers für die Degussa AG sowie Neryx

  	
   

  	
   

  	
  The
  Managing Director shall devote his full working time and ability to the
  Company’s business. Any other activity for remuneration and any activity
  which normally entitles to remuneration, including any part time work, is
  subject to the explicit prior written consent of the Company. The Company may
  refuse to grant such consent without giving reasons therefore. The Company
  hereby already consents to the Managing Director’s secondary consulting
  activities for Degussa AG (now Evonik Degussa) and Neryx Biopharmaceuticals
  as long as it is noncompetitive with the Company’s business.

  

 

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  Biopharmaceuticals
  ein, so lange diese Tätigkeit nicht im Wettbewerb zu den Geschäften der
  Gesellschaft steht.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Artikel 3 - Genehmigungsbedürftige Geschäfte

  	
   

  	
  Article 3 - Transactions Subject to Consent 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Für alle Geschäfte, die über die reguläre Tätigkeit der Gesellschaft hinausgehen,
  bedarf der Geschäftsführer der vorherigen schriftlichen Zustimmung der Gesellschafterversammlung.
  Näheres ergibt sich aus der
  Geschäftsordnung der Geschäftsführung.

  	
   

  	
   

  	
  The
  Managing Director shall obtain the prior written approval of the shareholders
  to effect any transactions outside the usual scope of business. Details are
  evident from the management guidelines.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Artikel 4 - Erfindungen

  	
   

  	
  Article 4 - Inventions

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
  Alle
  Rechte an Erfindungen, unabhängig von ihrer Patent- oder Gebrauchsmusterschutzfähigkeit, an technischen
  Verbesserungsvorschlägen und
  an Computersoftware, die von dem Geschäftsführer während der Dauer dieses Vertrages gemacht

  	
   

  	
  4.1

  	
  All
  rights pertaining to inventions, whether patentable or not, and to proposals
  for technical improvements made and to computer software developed by the
  Managing Director (hereinafter jointly called “Inventions”) during the term
  of this Service 

  

 

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  und
  entwickelt werden (insgesamt im Folgenden “Erfindungen” genannt) stehen
  ausschließlich der
  Gesellschaft zu, ohne dass eine zusätzliche Vergütung gezahlt wird. Der Geschäftsführer hat die
  Gesellschaft oder eine von ihr benannte Person unverzüglich über Erfindungen
  in Kenntnis zu setzen und die Gesellschaft bei der Erlangung von Patentschutz
  oder sonstigen gewerblichen Schutzrechten auf Wunsch zu unterstützen.

  	
   

  	
   

  	
  Contract shall be deemed acquired by the
  Company without paying extra compensation therefore. The Managing Director
  shall inform the Company, or a person designated by the Company, of any
  Inventions immediately in writing and shall assist the Company in acquiring
  patent or other industrial property rights, if the Company so desires.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.2 

  	
  Der
  vorstehende Absatz 4.1 gilt für alle Erfindungen, gleichgültig

  	
   

  	
  4.2
  

  	
  Subsection 4.1 above shall apply to any Inventions no matter whether

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  ob
  sie im Zusammenhang mit einem Geschäftszweig der Gesellschaft stehen oder nicht,

  	
   

  	
   

  	
  (a)

  	
  they
  are related to the business of the Company or not,

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  ob sie auf Erfahrungen der Gesellschaft beruhen oder nicht,

  	
   

  	
   

  	
  (b)

  	
  they
  are based on experience and know-how of the Company or not, or

  

 

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  (c)

  	
  ob
  sie aus der dem Geschäftsführer bei der Gesellschaft obliegenden Tätigkeit entstanden sind oder nicht, oder

  	
   

  	
   

  	
  (c)

  	
  they
  emanate from such duties of activities as are to be performed by the Managing
  Director within the Company, or

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  ob
  sie während der betriebsüblichen Arbeitszeit oder außerhalb der Arbeitszeit
  gemacht worden sind.

  	
   

  	
   

  	
  (d)

  	
  they
  are materialized during or outside normal business hours of the Company.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.3 

  	
  Die Rechte der
  Gesellschaft an den ihr gemäß diesem Vertrag zustehenden Erfindungen werden durch Änderungen dieses Vertrages und seiner
  Beendigung nicht berührt.

  	
   

  	
  4.3

  	
  The
  Company’s right to Inventions acquired hereunder shall in no way be affected
  by any amendments to or the termination of this Service Contract.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Artikel 5 – Vergütung

  	
   

  	
  Article 5 - Remuneration

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1 

  	
  Der Geschäftsführer erhält ein Bruttojahresgehalt von EUR 260,000
  zahlbar in zwölf gleichen monatlichen Beträgen am Ende eines Monats. Das Bruttojahresgehalt wird jährlich

  	
   

  	
  5.1
  

  	
  The
  Managing Director shall be entitled to a gross annual salary in the amount of
  € 260,000 to be paid in arrears in 12 equal monthly instalments. The annual
  salary will be revised yearly to be

  

 

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  mit
  Wirkung zum Beginn eines Kalenderjahres angepasst.

  	
   

  	
   

  	
  effective
  at the beginning of each calendar year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2 

  	
  Der Geschäftsführer hat Anspruch
  auf einen jährlichen Zielbonus
  in Höhe von 35 % seines Bruttojahresgehalts, gemäß der Erreichung der jährlichen Ziele, welche zwischen ihm und dem
  Vorstandsvorsitzenden der Muttergesellschaft, Æterna Zentaris Inc. vereinbart
  werden und die ausschließlich
  im Ermessen des Vorstandsvorsitzenden der Æterna Zentaris Inc. stehen. Die
  tatsächliche Bonuszahlung,
  sofern ein Bonus gezahlt wird, kann den Zielbonus über- oder unterschreiten.

  	
   

  	
  5.2
  

  	
  The
  Managing Director shall be entitled to an annual target bonus equal to an
  amount representing thirty-five (35%) of the annual salary, according to the
  attainment of annual targets that shall be agreed upon with the the Chief
  Executive Officer (‘CEO’) of the parent company and at the complete
  discretion of the CEO. Actual bonus payments, if any, may be less than equal
  to or supersede the target.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.3 

  	
  Durch
  Zahlung der oben genannten Vergütung sind alle Tätigkeiten des Geschäftsführers nach diesem
  Vertrag abgegolten. Insbesondere hat der Geschäftsführer keinen Anspruch

  	
   

  	
  5.3
  

  	
  By
  payment of the above mentioned remuneration, all activities, which the
  Managing Director has to perform under this Service Contract, shall be
  compensated. In particular, the Managing

  

 

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  auf
  Bezahlung von Überstunden.

  	
   

  	
   

  	
  Director
  shall not be entitled to any additional compensation of overtime work.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Artikel 6 - Nebenleistungen

  	
   

  	
  Article 6 - Other Benefits

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1 

  	
  Reisekosten
  und sonstige notwendigen Auslagen, die von dem Geschäftsführer im Interesse
  der Gesellschaft aufgewendet werden, werden dem Geschäftsführer im Rahmen des
  in Deutschland steuerrechtlich Zulässigen erstattet.

  	
   

  	
  6.1
  

  	
  Travel
  expenses and other necessary expenses incurred by the Managing Director in
  the furtherance of the Company’s business shall be reimbursed according to
  the guidelines of the Company and within the framework of the principles
  applicable in Germany for tax purposes.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.2 

  	
  Die
  Gesellschaft wird dem Geschäftsführer einen Dienstwagen entsprechend der bei
  der Gesellschaft geltenden Richtlinie für geschäftliche und private Zwecke zur Verfügung stellen. Alle Steuern, die durch das Recht des Geschäftsführers zur
  Privatnutzung des Dienstwagens entstehen, werden von dem Geschäftsführer getragen.
  Alle sonstigen Kosten des Dienstwagens (Betriebs- und Unter-

  	
   

  	
  6.2
  

  	
  The
  Company shall provide the Managing Director with a company car according to
  the Company’ s guidelines for business and private use. The value of the
  private use per month as determined by the German tax regulations for the
  particular type of car shall constitute additional compensation to the
  Managing Director, which will be subject to wage withholding tax. The costs of
  maintenance and use of the

  

 

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  haltungskosten)
  trägt die Gesellschaft.
  Im Fall einer Freistellung ist der Wagen zurückzugeben, ohne dass der Geschäftsführer ein Zurückbehaltungsrecht oder Nutzungsausfallansprüche hätte.

  	
   

  	
   

  	
  company
  car shall be borne by the Company. In case of a release from work, the
  Company may take back the car at any time. In this case, the Managing
  Director shall have no right of retention and no damage compensation claim.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Artikel 7 - Arbeitsverhinderung

  	
   

  	
  Article 7 - Inability to Perform Duties

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.1 

  	
  Der
  Geschäftsführer ist verpflichtet, der Gesellschaft
  jede Arbeitsverhinderung und ihre voraussichtliche Dauer unverzüglich
  anzuzeigen. Auf Verlangen sind die Gründe der Arbeitsverhinderung
  mitzuteilen.

  	
   

  	
  7.1
  

  	
  In
  case the Managing Director shall be unable to perform his duties under this
  Service Contract, he shall inform the Company of such absence and its
  prospective duration without delay. Upon request, he shall inform the Company
  for the reasons of such absence.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.2 

  	
  Im
  Falle unverschuldeter Arbeitsunfähigkeit durch Krankheit oder Unfall erhält der Geschäftsführer bei Vorlage
  entsprechender ärztlicher
  Bescheinigungen ftir die Dauer von bis zu einem Jahr, längstens bis zur Beendigung dieses

  	
   

  	
  7.2
  

  	
  In
  the event of incapacity to perform the duties under this Service Contract due
  to illness or accident and without the Managing Director’s fault, he shall be
  entitled to a continuation of his monthly gross base salary according to
  Article 5.1 of this 

  

 

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  Dienstvertrages,
  sein monatliches Brutto-Grundgehalt gemäß Artikel 5 (5.1) dieses Vertrages weiter.
  Stirbt der Geschäftsführer während der Dauer
  dieses Dienstvertrages, so erhalten seine unterhaltsberechtigten Hinterbliebenen
  für einen Zeitraum von drei Monaten sein
  monatliches Brutto-Grundgehalt gemäß Artikel 5 (5.1) dieses Vertrages.

  	
   

  	
   

  	
  Service
  Contract for a duration of up to one year or, if earlier, until the end of
  this Service Agreement, provided the relevant doctor’s certificates are
  furnished. If the Managing Director dies during the term of this Agreement,
  his dependents can claim to be paid his monthly gross base salary according
  to Article 5.1 of this Service Contract for a duration of three months.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Artikel 8 – Urlaub

  	
   

  	
  Article 8 – Vacation 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.1 

  	
  Der
  Geschäftsführer hat Anspruch auf einen Urlaub von 30 Arbeitstagen; Samstage
  werden dabei nicht mitgerechnet.

  	
   

  	
  8.1
  

  	
  The
  Executive shall be entitled to an annual vacation of 30 working days
  excluding Saturdays.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.2 

  	
  Der
  Zeitpunkt seines Urlaubes ist tinter Berücksichtigung der betrieblichen Notwendigkeiten

  	
   

  	
  8.2
  

  	
  The
  time of vacation shall be determined in agreement with the shareholders,
  thereby taking into

  

 

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  und
  den persönlichen Wünschen des Geschäftsführers in
  Abstimmung mit den Gesellschaftern festzulegen.

  	
   

  	
   

  	
  consideration
  the personal wishes of the Executive and the interests of the Company.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Artikel 9 – Verschwiegenheitspflicht

  	
   

  	
  Article 9 - Secrecy 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.1 

  	
  Der
  Geschäftsführer verpflichtet sich, alle ihm anvertrauten oder sonst
  bekanntgewordenen geschäftliche,
  betrieblichen oder technischen Informationen, die sich auf die Gesellschaft
  oder deren Konzerngesellschaften beziehen und vertraulichen Charakter haben,
  Dritten nicht zu offenbaren und nicht für seine eigenen
  Zwecke zu verwenden. Dies gilt insbesondere hinsichtlich der Einzelheiten der
  Betriebsorganisation, hinsichtlich der Beziehungen zu Kunden und
  Auftraggebern und des technischen Know-How. Diese Verpflichtung gilt sowohl während der Dauer dieses Anstellungsverhältnisses als auch nach seiner Beendigung.

  	
   

  	
  9.1
  

  	
  The
  Managing Director shall not disclose to any third party or use for personal
  gain, any confidential technical or other business information which has been
  entrusted to him, or which has otherwise become known to the Managing
  Director and which relates to the Company or to any of its affiliated
  companies. In particular, no information may be disclosed concerning the
  organization of the business, the relations with customers and suppliers and
  the Company’s know- how. This obligation shall not expire upon termination of
  the Service Contract but shall continue to remain in force thereafter.

  

 

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  9.2
  

  	
  Geschäftliche Unterlagen aller Art, einschließlich der auf dienstliche Angelegenheiten
  und Tätigkeiten sich
  beziehenden persönlichen Aufzeichnungen, sind sorgfältig aufzubewahren und dürfen nur zu geschäftlichen Zwecken verwendet werden. Das
  Anfertigen von Abschriften oder Auszügen sowie das
  Kopieren von Zeichnungen, Kostenberechnungen, Statistiken und ähnlichem und andere Geschäftsunterlagen ist nur für dienstliche Zwecke zulässig.

  	
   

  	
  9.2
  

  	
  Business
  records of any kind, including private notes concerning Company affairs and
  activities, shall be carefully kept and shall be used only for business
  purposes. No copies or extract or duplicates of drawings, calculations,
  statistics and the like nor of any other business records may be copied or
  extracted for purposes other than for the Company’s business.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.3
  

  	
  Bei
  Beendigung des Anstellungsverhältnisses hat der Geschäftsführer von sich aus alle in seinem Besitz befindlichen Geschäftsunterlagen sowie Abschriften und Kopien
  davon herauszugeben; dem Geschäftsführer steht kein Zurückbehaltungsrecht zu.

  	
   

  	
  9.3
  

  	
  Upon
  termination of this Service Contract, the Managing Director shall return all
  business records and copies thereof. The Managing Director shall have no
  right of retention.

  

 

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  Artikel 10 - Vertragsdauer und Kündigung

  	
   

  	
  Article 10 - Term of Employment and Notice

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.1
  

  	
  Dieser
  Vertrag ist fest abgeschlossen für den Zeitraum vom 01.01.2008 bis 31.08.2010
  und endet somit automatisch mit dem Monat der Vollendung des 65. Lebensjahres
  des Geschäftsführers..

  	
   

  	
  10.1
  

  	
  This
  Service Contract is entered into for a fixed period starting January 1st,
  2008 and ending August 31, 2010, i.e. ending with the expiry of the
  month in which the Managing Director attains age of 65.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Artikel 11 - Weitere Bestimmungen

  	
   

  	
  Article 11 - Final Provisions

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.1
  

  	
  Änderungen
  oder Ergänzungen, dieses
  Vertrages bedürfen der Schriftform, wobei Telefax und sonstige
  telekommunikative Übermittlungswege
  ausreichen (§ 127 Abs.2 BGB)

  	
   

  	
  11.1
  

  	
  Any
  amendments of or additions of this Service Contract shall be made in writing
  in order to be effective; fax or any other telecommunication device will
  suffice (Sec. 127 para. 2 German Civil Code).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.2
  

  	
  Dieser
  Vertrag und seine Auslegung unterliegen deutschem Recht und deutschem

  	
   

  	
  11.2

  	
  This
  Service Contract and its interpretation are governed by German law. The place
  of

  

 

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  Gerichtsstand
  am Sitz der Gesellschaft. Bei Auslegungszweifeln entscheidet die deutsche
  Fassung dieses zweisprachigen Vertragstextes.

  	
   

  	
   

  	
  jurisdiction shall be the corporate seat of the
  Company. In cases of doubt, the German version of this bilingual Contract
  shall prevail.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.3
  

  	
  Dieser
  Vertrag enthält die
  gesamte Vereinbarung zwischen den Parteien. Bereits getroffene Vereinbarungen
  zwischen den Parteien über ein Arbeits- oder Dienstverhältnis werden hiermit aufgehoben. Über diesen Vertrag hinausgehende schriftliche
  oder mündliche Absprachen sind nicht getroffen worden
  mit folgender Ausnahme: Die
  Ruhegeldvereinbarung des Geschäftsführers mit der ASTA Pharma AG vom 26.
  September 1990 gilt nach Maßgabe
  der Vereinbarung (Side Letter) zwischen dem Geschäftsführer und der ASTA
  Medica AG vom 15. Januar / 15. Februar 2001 auch zwischen den Parteien dieses
  Dienstvertrages fort.

  	
   

  	
  11.3
  

  	
  This
  Service Contract represents the entire agreement and understanding of the
  parties. This Contract supersedes and replaces all other previously issued
  contracts regarding the employment between the parties. No written or verbal
  agreements outside this Contract have been made, except for the following: The pension agreement between the
  Managing Director and ASTA Pharma AG of 26 September 1990 shall continue
  to apply between the parties according to the terms set forth in the
  agreement (side letter) between the Managing Director and ASTA Medica AG of
  15. January / 15. February 2001.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.4
  

  	
  Dieser
  Vertrag ersetzt den Geschäftsführerdienstvertrag zwischen den Parteien vom

  	
   

  	
  This
  contract replaces the Service Contract for Managing Director between the
  parties dated May 1st, 2003.

  

 

14

 

	
   

  	
  01.05.2003.

  	
   

  	
   

  
	
   

  	
   

  	
  Date:
  December 3, 2007.

  
	
  Datum:
  Dec. 5, 2007

  	
  Datum:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/
  Mario, Paradis

  
	
  Gesellschaft

  	
   

  	
  Company

  	
  MARIO,
  PARADIS

  SVP. Adm. & Legal Affairs

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  Jürgen Engel

  	
   

  	
   

  	
    —

  
	
  Geschäftsführer

  	
   

  	
  Managing
  Director

  
							

 

15Exhibit
4.4

EMPLOYMENT
AGREEMENT OF Dr. DAVID MAZZO

 

ÆTERNA
ZENTARIS INC.

 

Dated March 23,
2007

 

 

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:

  	
   

  	
  DAVID J. MAZZO,
  Ph.D. domiciled at [civic address 

  
	
   

  	
   

  	
  redacted for privacy reasons], New Jersey, U.S.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (hereinafter the “Executive”)

  

 

SECTION 1 – PURPOSE

 

1.1                              The
Corporation wishes to employ the Executive as its President and Chief Executive
Officer, starting on April 9, 2007. The Executive is willing to be employed by
the Corporation, on the terms and conditions set forth herein in this
Employment Agreement (the “Agreement”).
The Executive shall report to the Board of Directors of the Corporation (the “Board”). In addition to the duties and responsibilities
inherent to his position, the Executive shall have any powers and carry out
mandates that may be entrusted to him by the Board from time to time.

 

SECTION 2 – DUTIES

 

2.1                              The
Executive agrees to devote his full business time to the Corporation, to make
every effort necessary to perform adequately the duties that are assigned to
him and to act in the best interests of the Corporation at all times. The
Employee shall refrain from any activity that could be prejudicial to the
Corporation’s interests. In performing his duties with the Corporation, the
Executive shall act faithfully and honestly at all times.

 

2.2                              The
Executive shall carry 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 the necessary and
reasonable time to such traveling.

 

 

2.3                              The
Executive declares that he has no obligation toward any person, including his
former employers, that would be incompatible with this Agreement or that could
be an impediment to the performance of his duties with the Corporation.

 

2.4                              The
Executive agrees to comply with all the instructions, policies and/or rules that
are established verbally or in writing by the Corporation.

 

2.5                              The
Executive shall be entitled to sit on a board of directors of another
corporation, solely with the prior written authorization of the Board. The
Board agrees that the Executive may maintain his current board assignments
(i.e., with Avanir Pharmaceuticals, Inc. and pSivida, Ltd.) but will
resign such positions as soon as it is appropriate or necessary.

 

SECTION 3 – COMPENSATION

 

3.1                              Salary

 

The
Corporation shall pay the Executive, for the duration of this Agreement, a base
annual salary (the “Base Salary”) of
FOUR HUNDRED AND FIFTY THOUSAND US DOLLARS (US$450,000.00), payable in
accordance with the Corporation’s standard payroll practice. Such Base Salary
shall be reviewed annually and may be increased in accordance with the
Corporation’s policy.

 

3.2                              Bonus

 

During the
term of this Agreement, the Executive shall be eligible to receive an annual
lump sum cash bonus (the “Annual Bonus”) in
respect of each full or partial fiscal year of the Corporation, which is from January 1
to December 31. The Annual Bonus for the 2007 fiscal year, which shall not
be prorated, shall be TWO HUNDRED AND FIFTY THOUSAND US DOLLARS
(US$250,000.00). The Annual Bonus for subsequent years will be at least
equivalent to the Annual Bonus for 2007 with the Annual Bonus amount subject to
review and potential increase in accordance with the policy of the Corporation.
Except for the 2007 fiscal year, if an Annual Bonus is to be paid hereunder in
respect of a period that is a partial fiscal year, such Annual Bonus shall be
prorated for service through the Executive’s date of termination. In all cases,
the Executive’s eligibility for such Annual Bonus is conditional upon the
attainment of objectives, which shall be mutually agreed upon within one month
of the commencement of the Executive’s employment for year 2007 and thereafter
yearly. According the Corporation’s policy, the granting of Annual Bonus is
based upon an assessment of each individual’s performance as well as the
performance of the Corporation and requires Board approval.

 

3.3                              Stock
Options

 

Subject to
regulatory approval, the Corporation shall grant to the Executive, no later
than the date of signature of this Agreement, 400,000 options under the
Corporation’s Stock Option Plan (the “Plan”).
These stock options shall vest equally over a period of four (4) years
from the date of the original grant. The said options, the exercise price, the
period

 

2

 

during which they may be exercised and the
other terms and conditions attaching to their exercise shall be subject to the
terms and conditions of the Plan.

 

3.4                              Signing
Bonus

 

The Executive
shall receive a signing bonus, payable on or before April 9, 2007, of ONE
HUNDRED THOUSAND US DOLLARS (US$100,000.00) with the provision that the signing
bonus will be repayable to the Corporation unless the Executive provides the
Corporation with satisfactory evidence to the effect that he has acquired
Common Shares of the Corporation on the market for an aggregate amount of ONE
HUNDRED AND THIRTY THOUSAND US DOLLARS (US$130,000.00), within the first month
following the signature of this Agreement, subject to compliance with the Corporation’s
insider trading and blackout policies and all relevant securities regulations.
Should the Executive be prevented from purchasing said shares during the first
month of his employment by policies of the Corporation or securities
regulations, then the signing bonus becomes repayable to the Corporation only
after 7 days have elapsed into the first available window of time during which
the Executive may purchase said shares while remaining in compliance with
policies of the Corporation and relevant securities regulations.

 

3.5                              Car
Allowance

 

The
Corporation shall pay the Executive an annual taxable car allowance of TWENTY-
FIVE THOUSAND US DOLLARS (US$25,000.00). In addition, the Corporation will
assume all related operating costs of the vehicle (including insurance,
registration, maintenance, repairs and fuel).

 

3.6                              Business
Expenses

 

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

 

SECTION 4 – VACATION

 

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

 

SECTION 5 – GROUP INSURANCE

 

5.1                              Medical/Dental Insurance

 

The Corporation
shall pay the monthly premium for family medical/dental insurance, similar to
the Corporation’s existing plan (no deductible, reimbursement of 80% of
eligible drug and paramedical expenses; as for dental, no deductible,
reimbursement of

 

3

 

80% of general
expenses and 50% of specialized expenses such as endodontic treatments,
periodontic treatments). It is agreed, until such time as a plan for the
Corporation is in effect for the New Jersey site, that the Corporation will pay
the premiums for the Executive’s existing USA-based family medical/dental
coverage, subject to the provisions above.

 

5.2                              Life
Insurance

 

The
Corporation shall pay for coverage of TWO HUNDRED THOUSAND US DOLLARS
(US$200,000.00). The cost of any additional coverage shall be assumed by the
Executive.

 

5.3                              Disability
Insurance

 

The
Corporation shall pay for coverage of an amount of SEVEN THOUSAND FIVE HUNDRED
US DOLLARS (US$7,500.00) per month. The cost of any additional coverage shall
be assumed by the Executive.

 

SECTION 6 – DURATION AND TERMINATION

 

6.1          Duration

 

This contract
is for an indeterminate term.

 

6.2                              Automatic
termination

 

The Executive’s
employment shall terminate automatically, without the Corporation being bound
to pay any compensation whatsoever, upon the death of the Executive or the date
upon which his resignation becomes effective.

 

The
Executive’s employment may also be terminated by the Corporation for cause upon
simple notice in writing transmitted to the Executive, without the Corporation
being bound to pay any compensation 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.

 

4

 

(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                              Termination
without Cause

 

The Corporation may also terminate the
Executive’s employment, without cause, by paying him the following:

 

(a)                                  If
the Executive’s employment is terminated by the Corporation on or before the date
that is the eighteen (18)-month anniversary of the date of this Agreement:

 

(i)                           An
amount equivalent to twelve (12) months of the Executive’s annual Base Salary;
and

 

(ii)                        An amount
equivalent to the Annual Bonus received by the Executive for the last completed
fiscal year prior to the termination date.

 

(iii)                     An amount
equivalent to twelve (12) months of the cost of the benefits which were in
force at the time of termination of the Executive’s employment, calculated on a
yearly basis, excluding the car allowance and operating costs. However, Stock
Options are expressly excluded from this provision and the Executive shall be
treated, in this regard, in accordance with the terms of the Plan.

 

(b)                                 If
the Executive’s employment is terminated by the Corporation after the date that
is the eighteen (18)-month anniversary of the date of this Agreement:

 

(i)                           an
amount equivalent to twenty-four (24) months of the Executive’s annual Base
Salary; and

 

(ii)                        An amount
equivalent to twice the Annual Bonus received by the Executive for the last
completed fiscal year prior to the termination date.

 

(iii)                     An amount
equivalent to twelve (12) months of the cost of the benefits which were in
force at the time of termination of the Executive’s employment, calculated on a
yearly basis, excluding the car allowance and

 

5

 

operating costs. However, Stock Options are
expressly excluded from this provision and the Executive shall be treated, in
this regard, in accordance with the terms of the Plan.

 

(c)                               The
Executive acknowledges that the said payments are fair and sufficient and, in
consideration of the Corporation giving him such payments in the event of the
termination of his employment without cause, the Executive shall grant the
Corporation and its directors, officers, employees, shareholders,
representatives and agents, and the directors, officers, employees,
shareholders, representatives and agents of any affiliate of the Corporation, a
full and final 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 of his employment, whether for prior notice of termination,
severance pay, damages in lieu thereof or for any other reason.

 

6.4                              Resignation

 

In the event that the Executive wishes to
terminate his employment, he shall give the Corporation prior written notice of
at least 6 weeks.

 

SECTION 7 – TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE OF
CONTROL

 

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

 

(a)                            An
amount equivalent to twenty-four (24) months of his annual Base Salary; and

 

(b)                           An
amount equivalent to twice the Annual Bonus, if any, which the Executive would
have been entitled to receive in the year during which the Change of Control
occurred; and

 

(c)                            An
amount equivalent to twenty-four (24) months of the cost of the benefits which
were in force at the time of termination of the Executive’s employment,
calculated on a yearly basis, including the car allowance, but excluding
operating costs. However, Stock Options are expressly excluded from this
provision and the Executive shall be treated, in this regard, in accordance
with the terms of the Plan.

 

SECTION 8 – NO COMPETITION, NO SOLICITATION AND LOYALTY

 

8.1                              The
Executive shall not compete with the Corporation, directly nor indirectly.  He shall not participate in any capacity
whatsoever in a business that would directly or indirectly 

 

6

 

compete with
the Corporation, namely one involved in the development and commercialization
of the specific endocrine therapies and oncology treatments which the
Corporation is actively developing, including, without limitation, as an executive,
director, officer, employer, principal, agent, fiduciary, administrator of
another’s property, associate, independent contractor, franchisor, franchisee,
distributor or consultant unless such participation is fully disclosed to the
Corporation and approved in writing in advance by the Board. In addition, the
Executive 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 as follows :

 

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

 

8.1.2                     As to the geographical area, the territory in which a specific
product had been actively exploited by the Corporation during the two years
preceding the termination date. For purposes of this clause, the Corporation is
deemed to have actively exploited such territory for such product if, during
the two (2) years immediately preceding the termination date:

 

(i)                              Distribution
rights for this product were granted to a distributor of the Corporation,
pursuant to a distribution agreement (exclusive or non-exclusive) except if
such distribution agreement ceased to have effect, prior to the termination
date, with the Corporation’s consent and provided that the Corporation did not
actively search for other distributors for the territory covered by this
Agreement; or if

 

(ii)                           The
Corporation has completed phase II clinical development work for this product
in this territory, or searched for commercial partners or applied to protect
its intellectual property rights in relation to the product and its use,
including patent applications in relation to the product or its use, which
applications referred to these territories.

 

8.1.3                     As to the nature of the activities, to duties or activities
which are identical or substantially similar to those performed or carried on
by the Executive during the twenty-four (24) months preceding the termination
of his employment.

 

8.2                              The
foregoing stipulation shall nevertheless not prevent the Executive from buying
or holding shares or other securities of a Corporation whose securities are
publicly traded on a recognized stock exchange where the securities so held by
the Executive do not represent more than five percent (5%) of the voting shares
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 to hereinabove in sub-sections 8.1.1 and 8.1.2, not to
solicit clients of the 

 

7

 

Corporation,
directly or indirectly, not to permit the use of his name in order to solicit
said clients or do anything whatsoever to induce or to lead any person to
decide to put an end, in whole or in part, to his business relations with the
Corporation.

 

8.4                              The
Executive also undertakes, for the same period and in respect of the same
territory referred to hereinabove in sub-sections 8.1.1 and 8.1.2, not to
induce, attempt to induce or otherwise interfere in the relations which the
Corporation has with its distributors, suppliers, representatives, agents and
other parties with whom the Corporation deals.

 

8.5                              The
Executive also undertakes, for the same period and in respect of the same
territory referred to hereinabove in sub-sections 8.1.1 and 8.1.2 not to
induce, attempt to induce or otherwise solicit the personnel of the Corporation
to leave their employment with the Corporation nor to hire the personnel of the
Corporation for any enterprise in which the Executive has an interest.

 

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

 

8.7                              Nothing
in this section shall operate to reduce nor to extinguish the obligations of
the Executive arising at law or under this contract which survive at the
termination of the contract in reason of their nature and, in particular,
without limiting the foregoing, the Executive’s duty of loyalty and obligation
to act faithfully and honestly.

 

SECTION 9 – CONFIDENTIALITY

 

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

 

Accordingly,
the Executive agrees to respect the confidentiality of such information and not
to make use of or disclose or discuss it to or with any person, other than in
the course of his duties with the Corporation, without the explicit prior
written authorization of the Corporation.

 

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

 

8

 

9.2           The term “confidential
information” includes among other things:

 

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

 

9.2.2        technical
knowledge and methods, quality control processes, inspection methods,
laboratory and testing methods, 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, sales techniques and policies, including pricing policies, sales and
distribution data and present and future expansion plans; and

 

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

 

9.3           The Executive
undertakes to keep the terms of this Agreement confidential.

 

SECTION 10
– OWNERSHIP OF INTELLECTUAL PROPERTY

 

10.1         The
Executive hereby assigns and agrees to assign to the Corporation all his
intellectual property rights as of their creation and to make full and prompt
disclosure to the Corporation of all information relating to anything made or
designed by him or that 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) years following the termination of his employment and
resulting from or arising out of any work performed by the Executive on behalf
of the Corporation or connected with any matter relating or possibly relating
to any business in which the Corporation or any of its subsidiaries or related
or associated companies is involved unless specifically released from such
obligation in writing by the Board.

 

In addition, the Executive renounces all moral rights in any document
or work realized during the period of his employment. The Executive
acknowledges that the Corporation has the right to use, modify or reproduce any
document or work realized by the Executive, at its entire discretion, without
the Executive’s authorization and without his name being mentioned.

 

10.2         At
any time during the period of his employment or after the termination of his
employment, the Executive shall sign, acknowledge and deliver, at the
Corporation’s expense, but without compensation other than a reasonable sum for
his time devoted thereto if his employment has then terminated, any document
required by the Corporation to give effect to section 10.1, including
patent applications and documents evidencing the

 

9

 

assignment of ownership. The Executive shall also provide such other
assistance as the Corporation may require with respect to any proceeding
or litigation relating to the protection or defense of intellectual property
rights belonging to the Corporation.

 

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

 

SECTION 11 –
OWNERSHIP OF FILES 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 or software or any other property which comes into the Executive’s
possession during his employment with the Corporation, in the performance or in
the course of his duties, regardless of whether he has participated in its
preparation or design, how it may have come into his possession and
whether or not it is an original or a copy, shall at all times remain the
property of the Corporation and, upon the termination of the Executive’s
employment, shall be returned to the Corporation or its designated
representative before the Executive leaves his place of work. The Executive may not
keep a copy or give one to a third party.

 

SECTION 12 – TERMINATION OF PRIOR
CONTRACTS

 

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

 

SECTION 13 – AMENDMENT OF THE AGREEMENT

 

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

 

SECTION 14 – NOTICES

 

14.1         Any
notice given hereunder shall be given in writing and sent by registered or
certified mail or hand delivered. If such notice is sent by registered or
certified mail, it shall be deemed to have been received five (5) business
days following the date of its mailing if the postal services are working
normally. If such is not the case, the notice must be hand delivered or served
by bailiff, at the discretion of the sender. In the case of hand delivery or
service, the notice shall be deemed to have been received the same day. It is
agreed that if the delivery date is a non-business day, the notice shall be
deemed to have been received on the following business day.

 

SECTION 15 – ELECTION OF DOMICILE

 

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

 

10

 

SECTION 16
– SUCCESSORS

 

16.1         This
Agreement shall be binding on the successors, heirs, assignees and legal
representatives of the parties.

 

SECTION 17
– INTERPRETATION

 

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

 

SECTION 18
– LANGUAGE

 

The parties have expressly requested that this Agreement be drafted in
the English language. Les parties ont
expressément requis que cette convention d’emploi soit rédigée
en anglais.

 

IN
WITNESS WHEREOF the
parties hereto have duly signed this Agreement on this 23rd day of March, 2007.

 

 

	
  ÆTERNA ZENTARIS INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Eric Dupont

  	
   

  	
   /s/ David J. Mazzo, Ph.D.

  
	
   

  	
  Eric Dupont

  	
   

  	
   David J. Mazzo, Ph.D.

  

 

11

 

ANNEX 1

 

CHANGE OF CONTROL PROGRAM (the “Program”)

 

1.             Applicability of the Program

 

The Executive shall be entitled to the benefit of the Program if both
conditions mentioned 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) months following a
Change of Control :

 

(i)            involuntarily,
at the request 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, the capitalized terms used
herein shall have the following meaning:

 

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

 

(ii)           Subject
to the exceptions set out in Schedule A hereto, a Person shall be
deemed the “Beneficial Owner” of
or to “Beneficially Own” (a) any
securities of which such Person or any of such Person’s affiliates or
associates, 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 or associates has the right to acquire within 60 days
(whether such right is exercisable immediately or after the passage of not more
than 60 days thereafter 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 than customary agreements with and between underwriters and/or banking
group and/or selling group members with respect to a distribution of securities
or pledges of securities in the ordinary course of the pledgee’s business); and
(c) any securities that are Beneficially Owned within the meaning of
clauses (i) or (ii) of this Subsection 2(A)(ii) by any
other Person with which such Person is acting jointly or in concert;

 

12

 

(iii)          “Voting Shares” means the common shares and
any other securities the holders of which are entitled to vote generally on the
election 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 any fraud, theft, embezzlement or other criminal act of a
similar nature; or

 

(ii)           if
the Executive is guilty of 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 any of the
following acts:

 

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

 

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

 

(iii)          a
forced relocation; or

 

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

 

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

 

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

 

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

 

13

 

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

 

(iv)          if,
for any reason, including an amalgamation, merger or consolidation of the
Corporation with or into another company, the individuals who at the date
hereof constitute the Board of Directors of the Corporation (and any new
directors whose appointment by the Board of Directors of the Corporation or
whose nomination for election by 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 the date hereof or whose appointment or nomination for
election was previously so approved) cease to constitute a majority of the
members of the Board of Directors of the Corporation.

 

3.             Payment

 

In the event that the two (2) conditions mentioned in Section 1
above are met, the Executive shall receive, in a lump sum, at the latest within
ten (10) days of the effective date of the termination of employment, the
payment of the amounts mentioned in section 7 of the Agreement.

 

Should the Executive die before he has received the full payments, his
estate shall receive, immediately following his death, a cash amount equal to
the unpaid balance, less required statutory deductions.

 

It is understood that the Executive will not be required to mitigate
the amount of any payment hereunder by seeking other employment or otherwise.

 

4.             Release

 

The Executive acknowledges that the full and complete execution of all
obligations undertaken by the Corporation and its successors under the Program,
to the extent the Program becomes applicable pursuant to Section 1 of the
Program, constitutes adequate notice of termination and in consideration and
subject to the full and complete execution of all such obligations, the
Executive agrees to grant the Corporation, its affiliated and related companies
and their respective directors, officers, shareholders, representatives,
employees, successors and assigns, a full and final release and discharge for
all claims, past, present or future, that he has or may have, arising
directly or indirectly from his employment and the termination thereof, whether
for prior notice of termination, severance pay, damages in lieu thereof or for
any other reason.

 

5.             General

 

The Executive’s participation in the Program shall end immediately upon
the termination of his employment with the Corporation or one of its affiliates
for any reason whatsoever. The Program is for an indefinite term commencing on
the date of this Agreement. Furthermore, the Corporation shall have the right prior
to the occurrence of a Change of Control, in its sole discretion, to terminate
the 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 a
written notice of termination at least thirty (30) days prior to the first
anniversary date of this Agreement and of

 

14

 

each anniversary date thereafter. For example, the Corporation would be
entitled to exercise its discretion to terminate the Executive’s participation
in the Program if, as of the date of the notice of termination, there has been
during said twelve (12)-month period a material reduction in the
responsibilities of the Executive.

 

6.             Successors

 

The terms and conditions hereof shall bind the Corporation, its
successors and assignees.

 

15

 

Schedule A

 

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

 

A Person shall not be deemed the “Beneficial
Owner” of or to “Beneficially Own”
any security:

 

(A)          as
a result of such security having been deposited or tendered pursuant to 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 or associates or any other Person acting jointly or in concert with
such Person until such deposited or tendered security is taken up and paid for;

 

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

 

(C)           as
a result of (a) such Person or any of the affiliates or associates of such
Person holding such security provided that the ordinary business of any such
Person (the “Fund Manager”) includes
the management of investment funds for others and such security is held by the
Fund Manager in the ordinary course of such business in the performance of such
Fund Manager’s duties for the account of any other Person (a “Client”); (b) such Person (the “Trust Company”) being licensed to carry on
the business of a trust company under applicable laws and, as such, acting as
trustee or administrator or in a similar capacity in relation to the estates of
deceased or incompetent Persons (each an “Estate
Account”) or in relation to other accounts (each an “Other Account”) and holding such security
in the ordinary course of such 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 province thereof or the laws of the United
States of America or any state thereof and such security being held by the Plan
Administrator or the Plan in the ordinary course 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 ordinary business or activity of such Person includes, the
management of investment funds for employee benefit plans, pension plans or
insurance plans of various public bodies and such security is held

 

16

 

by the Crown Agent in the ordinary course of the management of such
investment funds; or (e) such Person being a Plan and such security being
held by the Plan in the ordinary course of such Plan’s activities; provided,
however, that in any of the foregoing cases the Fund Manager, the Trust
Company, the Plan Administrator, the Crown Agent or the Plan, as the case may be,
is not then making 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 by the Corporation or by means of market transactions made in the
ordinary course of business of such Person (including pre-arranged trades
entered into in the ordinary course of business of such Person) executed
through the facilities of a stock exchange or organized
over-the-counter-market;

 

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

 

(E)           because
such Person is a Client of a Fund Manager and such security is owned at law or
in equity by the Fund Manager, or because such Person is an Estate Account or
an Other Account of a Trust Company and such security is owned at law or in
equity by the Trust Company, or because such Person is a Plan 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 result of carrying on
the business of, or acting as, a nominee of a securities depositary.

 

17

 

Schedule B

 

Exceptions to the definition of “Acquiring Person” (Section 2
(D)(i) of the Program)

 

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

 

(ii)             the Corporation or
any corporation controlled by the Corporation;

 

(ii)             any Person who
becomes the beneficial owner of fifty percent
(50%) or more of the outstanding Voting Shares as a result of one or
any combination of: (a) a Voting Share Reduction; (b) an Exempt
Acquisition; or (c) a Pro Rata Acquisition; provided, however, that if a
Person shall become the Beneficial Owner of fifty
percent (50%) or more of the outstanding Voting Shares by reason of
one or any combination of a Voting Share Reduction, an Exempt Acquisition or a
Pro Rata Acquisition, and thereafter becomes the Beneficial Owner of an
additional one percent of any Voting Shares then outstanding (otherwise than
pursuant to an additional Voting Share Reduction, Exempt Acquisition or Pro
Rata Acquisition), then, as of the date that such Person becomes a Beneficial
Owner of such additional Voting Shares, such Person shall become an “Acquiring Person”; or

 

(iii)            an underwriter or
member of a banking or selling group acting in such capacity that becomes the
Beneficial Owner of fifty percent (50%) or
more of the Voting Shares in connection with a distribution of securities
pursuant to an underwriting agreement with the Corporation;

 

For purposes of the Program, the capitalized terms used herein shall
have the following meaning:

 

(a)           “Voting Share Reduction” means an acquisition or
redemption by the Corporation or any corporation controlled by the Corporation
of Voting Shares which, by reducing the number of Voting Shares outstanding,
increases the percentage of Voting Shares Beneficially Owned by any Person to
fifty percent (50%) or more of the Voting Shares then outstanding;

 

 

(b)           “Exempt  Acquisition”
means  an  acquisition  whereby  a  Person  became  an  Acquiring  Person  by  inadvertence  and  without  any  intention  to  become,  or  knowledge  that  it  would  become,  an  Acquiring  Person  under  this  Program  and,  in  the  event  that  a  waiver  is  granted  by  the  Board  of  Directors,  such  acquisition  shall  be  deemed  not  to  have  occurred  for  the  purposes  hereof.  Any  such  waiver  may  only  be  given  on  the  condition  that  such  Person,  within  10  days  after  the  foregoing  determination  by  the  Board  of  Directors  or  such  later  date  as  the  Board  of  Directors  may  determine  (the  “Disposition  Date”),  has  reduced  its  Beneficial  Ownership  of  Voting  Shares  such  that  the  Person  is  no  longer  an  Acquiring  Person  and  such  waiver  shall  only  be  effective  if  the  reduction  has  occurred  within  such  10-day  period;  [NTD:  To
consider  whether
such  an  event
can  ever  occur]

 

(c)           “Pro Rata Acquisition” means an acquisition
by a Person of Voting Shares pursuant to (i) any dividend reinvestment
plan, such purchase plan or other plan of the Corporation made available to all
holders of Voting Shares (other than holders resident in any jurisdiction where
participation in such plan is restricted or impractical as a result of
applicable law); (ii) a stock dividend, a stock split or other event
pursuant to which such Person becomes the Beneficial Owner of Voting Shares on
the same pro rata basis as all other holders of Voting Shares of the same class or
series; (iii) the acquisition or exercise of rights to purchase Voting
Shares distributed to all holders of Voting Shares (other than holders resident
in any jurisdiction where such distribution or exercise is restricted or
impractical as a result of applicable law) by the Corporation pursuant to a
rights offering (but only if such rights are acquired directly from the
Corporation); or (iv) a distribution of Voting Shares or convertible
securities in respect thereof offered pursuant to a prospectus or by way of a
private placement by the Corporation or a conversion or exchange of any such
convertible security, provided that such Person does not thereby acquire a greater
percentage of Voting Shares or convertible securities so offered than the
Person’s percentage of Voting Shares Beneficially Owned immediately prior to
such acquisition.

 

2

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