Document:

Exhibit 10.50

Exhibit 10.50

					
	 	 	 	 	 
	
	 	EMPLOYMENT AGREEMENT
	 	 

This Employment Agreement made effective as of April 12, 2010 (the “Effective Date”).

BETWEEN:

QLT INC., having an address of 887 Great Northern Way, Suite 101,
Vancouver, British Columbia, V5T 4T5, Canada.

(“QLT” or the “Company”)

AND:

DIPAK PANIGRAHI 

(“Dr. Panigrahi”)

WHEREAS:

	A.	 	QLT has offered to Dr. Panigrahi employment with QLT as Senior Vice President, Research &
Development and Chief Medical Officer.

	 
	B.	 	QLT and Dr. Panigrahi wish to enter into this Agreement to set out the terms and conditions
of Dr. Panigrahi’s employment with QLT.

NOW THEREFORE in consideration of the compensation to be paid under this Agreement by QLT to Dr.
Panigrahi, the promises made by each party to the other as set out in this Agreement and other good
and valuable consideration, the receipt and sufficiency of which the parties acknowledge and agree,
QLT and Dr. Panigrahi agree as follows:

1. POSITION AND DUTIES

	1.1	 	Position Effective the date QLT and Dr. Panigrahi mutually agree that his employment
will commence (the “Commencement Date”), QLT will employ Dr. Panigrahi in the position of
Senior Vice President, Research & Development and Chief Medical Officer and Dr. Panigrahi
agrees to be employed by QLT in that position, subject to the terms and conditions of this
Agreement. Dr. Panigrahi’s Commencement Date will be no later than May 17, 2010. A condition
of Dr. Panigrahi’s employment and continued employment is that he seek, obtain and maintain
the required permits from the Government of Canada to permit him to work in Canada in this
position. QLT will reimburse Dr. Panigrahi for the costs associated with obtaining the NAFTA
Work Permit and permanent resident status for Dr. Panigrahi and Dr. Panigrahi’s immediate
family members (spouse and children).

	 
	1.2	 	Duties, Reporting and Efforts — In the performance of his duties as Senior Vice
President, Research & Development and Chief Medical Officer, Dr. Panigrahi will:

	 	(a)	 	Overall Responsibilities — Have overall responsibility for leading QLT’s R&D portfolio
including Clinical, Pharmaceutical Development, and Formulations Development, Regulatory
and such other responsibilities as may be directed or delegated from time to time by the
President and Chief Executive Officer of QLT.

			
	 	 	 
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	 	(b)	 	Report — Report, as and when required, to the President and Chief Executive Officer of
QLT or such person appointed by the Board of Directors of QLT (the “Board”) to either of
such positions.

	 
	 	(c)	 	Best Efforts — Use his best efforts, industry and knowledge to improve and increase
QLT’s business, to comply with all of QLT’s rules, regulations, policies (including QLT’s
Code of Ethics and Code of Exemplary Conduct) and procedures, as established from time to
time and to ensure that QLT is at all times in compliance with applicable provincial,
state, federal and other governing statutes, policies and regulations.

	 
	 	(d)	 	Working Day — Devote the whole of his working day attention and energies to the
business and affairs of QLT.

2. COMPENSATION

	2.1	 	Annual Compensation — In return for his services under this Agreement, effective as
of the Commencement Date, QLT agrees to pay or otherwise provide the following total annual
compensation in Canadian dollars to Dr. Panigrahi:

	 	(a)	 	Base Salary — A base salary in the amount of $393,750 (less statutory withholdings) in
24 equal installments payable semi-monthly in arrears. Dr. Panigrahi’s performance and
salary will be reviewed annually after the Commencement Date by and at the discretion of
the Executive Compensation Committee of QLT’s Board of Directors.

	 
	 	(b)	 	Benefit Plans — Effective as of the Commencement Date, coverage for Dr. Panigrahi and
his eligible dependents under any employee benefit plans provided by/through QLT to its
employees, subject to:

	 	I.	 	Each plan’s terms for eligibility, including a 3-month residency requirement
under the Medical Services Plan of British Columbia. During the 3-month waiting period,
QLT will either reimburse Dr. Panigrahi for the cost of his existing private medical
coverage or provide for Dr. Panigrahi and his eligible dependents similar medical
coverage through a private medical insurer, subject to any eligibility requirements;
and

	 
	 	II.	 	Dr. Panigrahi taking the necessary steps to ensure effective enrollment or
registration under each plan; and

	 
	 	III.	 	Customary deductions of employee contributions for the premiums of each plan.

	 	 	 	As at the date of this Agreement, the employee benefit plans provided by/through QLT to its
employees include life insurance, accidental death and dismemberment insurance, dependent
life insurance, vision-care insurance, health insurance, dental insurance and short and long
term disability insurance. QLT and Dr. Panigrahi agree that employee benefit plans provided
by/through QLT to its employees may change from time to time.

	 
	 	(c)	 	Expense Reimbursement — Reimbursement, in accordance with QLT’s Policy and Procedures
Manual (as amended from time to time), of all reasonable business related accommodation
and/or travel expenses incurred by Dr. Panigrahi, subject to him maintaining proper
accounts and providing documentation for these expenses upon request. Collectively, these
expenses and payments are the “Expenses”.

	 
	 	(d)	 	Vacation — Four weeks of paid vacation per year as determined in accordance with QLT’s
standard vacation policy for executive level employees. As per QLT’s Policy and Procedures
Manual (as amended from time to time):

			
	 	 	 
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	 	I.	 	All vacation must be taken within the calendar year in which it is earned by
Dr. Panigrahi; and

	 
	 	II.	 	Vacation entitlement will not be cumulative from calendar year to calendar
year; except that Dr. Panigrahi may carry forward 150 hours of vacation from the
calendar year in which it is earned to the following calendar year (but not subsequent
years).

	 	(e)	 	RRSP Contributions — Provided the conditions set out below have been satisfied, in
January or February of the year following the year in which the income is earned by Dr.
Panigrahi (the “Income Year”), QLT will make a contribution of up to 7% of Dr. Panigrahi’s
annual base salary for the Income Year to Dr. Panigrahi’s Registered Retired Savings Plan
(“RRSP”). The contribution to Dr. Panigrahi’s RRSP as set out above is subject to the
following conditions:

	 	I.	 	The maximum contribution to be made by QLT to Dr. Panigrahi’s RRSP is 50% of
the annual limit for Registered Retirement Savings Plans as established by Canada
Revenue Agency for the Income Year,

	 
	 	II.	 	Dr. Panigrahi must have contributed an equal amount into his RRSP, and

	 
	 	III.	 	Dr. Panigrahi is still actively employed by QLT when the matching contribution
would otherwise be made.

	 	(f)	 	Cash Incentive Compensation Plan — Participation in the Cash Incentive Compensation
Plan offered by QLT to its senior executives in accordance with the terms of such Plan, as
amended from time to time by the Board, at a target cash incentive compensation payment of
45% of your base salary, prorated in the first year of employment. Subject to the
provisions of this Agreement, the amount of that payment and the individual and corporate
goal achievement each year will be determined at the sole discretion of the Board and will
be based on the performance of Dr. Panigrahi and QLT relative to pre-set individual and
corporate objectives and milestones for the immediately preceding fiscal year. In order to
receive payment, Dr. Panigrahi must be employed by QLT at the time when the Cash Incentive
Compensation Plan is otherwise actually paid to eligible employees (which usually occurs in
February or March of the year following the calendar year in which such Cash Incentive
Compensation amount relates) The Board of Directors has the discretion to alter the cash
incentive compensation plan and payments thereunder.

	 
	 	(g)	 	Stock Option Plan — Participation in any stock option plan offered by QLT to its
executive officers, in accordance with the terms of the plan in effect at the time of the
stock option offer(s).

	 
	 	(h)	 	Relocation - QLT will reimburse Dr. Panigrahi for the costs of his relocation in
accordance with, and subject to, the terms described in Schedule “A” to this Agreement.

	 
	 	(i)	 	Signing Stock Options — Conditional on Dr. Panigrahi entering into this Agreement and
commencing employment with QLT and final approval of the Board of Directors of QLT, Dr.
Panigrahi will receive an option to purchase 300,000 common shares of QLT. Subject to
applicable laws, rules and regulations, these options will be granted at the next regularly
scheduled board meeting following Dr. Panigrahi’s Commencement Date. These options will be
subject to the terms and conditions set out in QLT’s current Stock Option Incentive Plan,
have a five-year term and will vest monthly in equal installments over three years from the
grant date. The exercise price of the signing options will be the closing price of the
common shares on the Toronto Stock Exchange on the grant date. These options will vest
over three (3) years. Notwithstanding the vesting and exercise periods, Dr. Panigrahi will
not be entitled to exercise any rights under the stock option agreement until he has
successfully completed six months of employment with QLT and maintained an employment
record of good standing during such time.

			
	 	 	 
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	 	(j)	 	Signing Bonus — QLT will pay Dr. Panigrahi a signing bonus of $315,000, less statutory
withholdings, to be paid in two (2) installments. The first installment of $210,000 (the
“First Installment”) will be paid on the first payroll date following the Dr. Panigrahi’s
Commencement Date. The second installment of $105,000 (the “Second Installment”) will be
paid on the first payroll date following the 2nd anniversary of Dr. Panigrahi’s
Commencement Date, provided that Dr. Panigrahi must be actively employed by QLT on such
payment date in order to receive the 2nd installment payment of $105,000. In the event of a
termination of employment on Dr. Panigrahi’s part or by QLT for cause (pursuant to
paragraphs 3.1 and 5.1, respectively) prior to the completion of thirty-six (36) months of
employment from Dr. Panigrahi’s Commencement Date, Dr. Panigrahi shall be required to
reimburse QLT a pro-rated amount of the aggregate of the First Installment and the Second
Installment actually paid to Dr. Panigrahi prior to the date of termination of his
employment, such pro-rated amount to be calculated based on the number of days out of the
thirty-six (36) month period from the Commencement Date that Dr. Panigrahi has actively
been employed up to and until his termination date. Any amount payable by Dr. Panigrahi to
QLT under this paragraph 2.1(j) shall be payable by Dr. Panigrahi to QLT within ten (10)
days of the termination of employment with QLT.

	 
	 	(k)	 	Reimbursement of Resignation Costs — QLT will reimburse Dr. Panigrahi for certain costs
resulting from his resignation from employment immediately prior to and in order to
commence his employment with QLT hereunder, in accordance with, and subject to, the terms
described in Schedule “C” to this Agreement. In the event of a termination of employment
on Dr. Panigrahi’s part or by QLT for cause (pursuant to Sections 3.1 and 5.1,
respectively) prior to the completion of thirty-six (36) months of employment from Dr.
Panigrahi’s Commencement Date, Dr. Panigrahi shall be required to reimburse QLT a prorated
amount of the aggregate amount paid to Dr. Panigrahi under this subparagraph 2.1(k), such
pro-rated amount to be calculated based on the number of days out of the thirty-six (36)
month period from the Commencement Date that Dr. Panigrahi has actively been employed up to
and until his termination date. Any amount payable by Dr. Panigrahi to QLT under this
paragraph shall be payable by Dr. Panigrahi to QLT within ten (10) days of the termination
of employment with QLT.

3. RESIGNATION

	3.1	 	Resignation — Dr. Panigrahi may resign from his employment with QLT by giving QLT 60
days prior written notice (the “Resignation Notice”) of the effective date of his resignation.
On receiving a Resignation Notice, QLT may elect to provide the following payments in lieu of
notice to Dr. Panigrahi and require him to leave the premises forthwith:

	 	(a)	 	Base Salary — Base salary owing to Dr. Panigrahi to the end of the 60-day notice
period.

	 
	 	(b)	 	Benefits — Except as set out below in this subparagraph 3.1(b), for the 60-day notice
period, all employee benefit plan coverage enjoyed by Dr. Panigrahi and his eligible
dependents prior to the date of his Resignation Notice. Dr. Panigrahi acknowledges and
agrees that any short and long term disability plans provided through QLT will not be
continued beyond the last day that Dr. Panigrahi works at QLT’s premises (the “Last Active
Day”).

	 
	 	(c)	 	Expense Reimbursement — Reimbursement (in accordance with QLT’s Policy and Procedures
Manual, as amended from time to time) of all reasonable business related accommodation
and/or travel expenses incurred by Dr. Panigrahi prior to his Last Active Day, subject to
the expense reimbursement provisions set out in subparagraph 2.1(c).

	 
	 	(d)	 	Vacation Pay — Payment in respect of accrued but unpaid vacation pay owing to Dr.
Panigrahi as at the expiry of the 60-day notice period.

			
	 	 	 
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	 	(e)	 	Prorated RRSP Contribution — Payment of any unpaid RRSP contribution in respect of any
calendar year preceding the calendar year in which the 60-day period expires and a prorated
contribution to the RRSP, the pro-ration to be with respect to the portion of the current
calendar year worked by Dr. Panigrahi, up to and including the 60-day notice period, and
the contribution to be subject to the conditions set out in subparagraph 2.1(e).

	3.2	 	Others — In the event of resignation of Dr. Panigrahi as set out in paragraph 3.1,
the parties agree:

	 	(a)	 	No Bonus — Dr. Panigrahi will have no entitlement to any unpaid amounts under QLT’s
Cash Incentive Compensation Plan; and

	 
	 	(b)	 	Stock Option Plan — Dr. Panigrahi’s participation in any stock option plan offered by
QLT to its employees will be in accordance with the terms of the plan and option agreement
applicable to each stock option grant made to Dr. Panigrahi.

4. RETIREMENT

	4.1	 	Retirement — Effective the date of retirement (as defined in QLT’s Policy and
Procedures Manual, as amended from time to time) of Dr. Panigrahi from active employment with
QLT, the parties agree that:

	 	(a)	 	This Agreement — Subject to the provisions of paragraph 10.6, both parties’ rights and
obligations under this Agreement will terminate without further notice or action by either
party.

	 
	 	(b)	 	Stock Options —Dr. Panigrahi’s participation in any stock option plan offered by QLT
to its employees will be in accordance with the terms of the plan and option agreement
applicable to each stock option grant made to Dr. Panigrahi.

5. TERMINATION

	5.1	 	Termination for Cause — QLT may terminate Dr. Panigrahi’s employment at any time for
cause (as “cause” is determined under the laws of the Province of British Columbia). Should
Dr. Panigrahi be terminated for cause, he will be entitled to all compensation due and owing
to the date of termination but will not be entitled to any advance notice of termination or
pay in lieu thereof. If Dr. Panigrahi is refused permission to work in Canada, or permission
expires or is revoked at any time before or during Dr. Panigrahi’s employment with QLT, QLT
will have the right to terminate Dr. Panigrahi’s employment and to treat such termination as a
termination for “cause”.

	 
	5.2	 	Termination Other than for Cause — QLT reserves the right to terminate Dr.
Panigrahi’s employment at any time without cause. However, if QLT terminates Dr. Panigrahi’s
employment for any reason other than for cause, then, except in the case of Dr. Panigrahi
becoming completely disabled (which is provided for in paragraph 5.6) and subject to the
provisions set forth below, Dr. Panigrahi will be entitled to receive notice, pay and/or
benefits (or any combination of notice, pay and/or benefits) as more particularly set out in
paragraph 5.3.

	 
	5.3	 	Severance Notice and Pay — In the event QLT terminates Dr. Panigrahi’s employment as
set out in paragraph 5.2, Dr. Panigrahi will be entitled to:

	 	(a)	 	Notice — Advance written notice of termination (“Severance Notice”) or pay in lieu
notice of termination (“Severance Pay”), or any combination of Severance Notice and
Severance Pay, as more particularly set out below:

	 	I.	 	A minimum of twelve months Severance Notice, or Severance Pay in lieu thereof,
and

			
	 	 	 
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	 	II.	 	One additional month’s Severance Notice, or Severance Pay in lieu thereof, for
each complete year of continuous employment with QLT,

	 	 	 	up to a maximum total of 24 months’ Severance Notice, or Severance Pay in lieu of Severance
Notice. Dr. Panigrahi acknowledges and agrees that Severance Pay is in respect of base
salary only and, provided Dr. Panigrahi executes and provides to QLT the release referred to
in paragraph 5.5(b) within the time period specified therein all Severance Pay will be paid
to Dr. Panigrahi by the later of 15 days after his Last Active Day or 15 days after the
delivery to QLT of such executed release. If Dr. Panigrahi does not execute and provide to
QLT such release within that time period, QLT will pay to Dr. Panigrahi the Severance pay on
a bi-weekly or monthly basis, at QLT’s discretion.

	 
	 	(b)	 	Benefits — Except as set out below, for 30 days after Dr. Panigrahi’s Last Active Day,
all employee benefit plan coverage enjoyed by Dr. Panigrahi and his dependents prior to the
date of termination. Thereafter, and in lieu of employee benefit plan coverage, Dr.
Panigrahi will receive compensation (“Benefits Compensation”) in the amount of 10% of his
base salary for the balance of his Severance Notice period. Dr. Panigrahi acknowledges and
agrees that short and long term disability plans provided through QLT will not be continued
beyond Dr. Panigrahi’s Last Active Day.

	 
	 	(c)	 	Out Placement Counseling — QLT will pay to an out placement counseling service (to be
agreed to by Dr. Panigrahi and QLT, each acting reasonably) a maximum of $5,000 for
assistance rendered to Dr. Panigrahi in seeking alternative employment.

	 
	 	(d)	 	Other Compensation — QLT will provide the following additional compensation:

	 	I.	 	Reimbursement or payment of Expenses (in accordance with subparagraph 2.1(c))
incurred by Dr. Panigrahi or due and owing on or prior to his Last Active Day.

	 
	 	II.	 	Payment to Dr. Panigrahi in respect of his accrued but unpaid base salary and
vacation pay to the date of termination of his employment with QLT.

	 
	 	III.	 	Payment of any unpaid RRSP contribution in respect of any calendar year
preceding the calendar year in which the Last Active Day occurs and a prorated
contribution to the RRSP, the pro-ration to be with respect to the portion of the
current calendar year worked by Dr. Panigrahi and the contribution to be subject to the
conditions set out in subparagraph 2.1(e).

	 
	 	IV.	 	Prorated payment to Dr. Panigrahi in respect of his entitlement to participate
in QLT’s Cash Incentive Compensation Plan and any other incentive compensation plan in
place, the pro-ration to be with respect to the portion of the current calendar year
worked by Dr. Panigrahi and the entitlement to be at the target level Dr. Panigrahi
would have otherwise been eligible to receive in the current calendar year if all
corporate, and, if applicable, individual goals were met but not exceeded provided that
if the Last Active Day precedes the date that the amount under the Cash Incentive
Compensation Plan or other incentive compensation is otherwise actually paid to QLT’s
executive officers for a preceding year then Dr. Panigrahi will also receive a payment
in respect of his entitlement to participate in QLT’s Cash Incentive Compensation Plan
and any other incentive compensation plan in place for the preceding calendar year and
the entitlement to be at the target level Dr. Panigrahi would have otherwise been
eligible to receive in the that calendar year if all corporate, and individual goals
were met but not exceeded.

	 
	 	V.	 	Dr. Panigrahi’s participation in any stock option plan offered by QLT to its
employees will be in accordance with the terms of the plan and option agreement
applicable to each stock option grant made to Dr. Panigrahi.

	5.4	 	Acknowledgement and Release — Dr. Panigrahi acknowledges and agrees that in the event
QLT

			
	 	 	 
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	 	 	terminates Dr. Panigrahi’s employment as set out in paragraph 5.2, in providing:

	 	(a)	 	The Severance Notice or Severance Pay, or any combination thereof;

	 
	 	(b)	 	The Benefits Compensation;

	 
	 	(c)	 	Out placement counseling service as more particularly set out in subparagraph 5.3(c);
and

	 
	 	(d)	 	The other compensation set out in subparagraph 5.3(d);

	 	 	QLT will have no further obligations, statutory or otherwise, to Dr. Panigrahi in respect of
this Agreement and Dr. Panigrahi’s employment under this Agreement.

	 
	5.5	 	Duty to Mitigate

	 	(a)	 	Duty to Mitigate — Dr. Panigrahi acknowledges and agrees that if his employment is
terminated without cause as set out in paragraph 5.2 and he does not sign the Release
attached hereto as provided in paragraph 5.5(b), his entitlement to Severance Pay, Benefits
Compensation and other compensation as set out in paragraph 5.3 is subject to his duty to
mitigate such payments by looking for and accepting comparable alternative employment or
contract(s) for services provided that Dr. Panigrahi will not be obligated to accept any
such alternative employment or contract if the duration of the engagement is less than one
half of the remaining Severance Period notice. If Dr. Panigrahi obtains (i) new employment
or (ii) contract(s) for services of a duration totaling longer than one-half of the
remaining Severance Period at the time such contract(s) is entered into, Dr. Panigrahi
agrees that he will notify QLT of this fact in writing (the “New Employment Notice”) within
five working days of such an occurrence and in this event the following provisions apply:

	 	I.	 	Dr. Panigrahi acknowledges and agrees that his entitlement to Severance Pay and Benefits
Compensation will cease as of the date on which his new employment or contract for services
commences.

	 
	 	II.	 	Within 10 working days of receipt of the New Employment Notice, QLT agrees that it will
pay Dr. Panigrahi a lump sum amount equivalent to 50% of the Severance Pay and Benefits
Compensation as set out in paragraph 5.3 otherwise owing to Dr. Panigrahi for the balance of
the Severance Notice period.

	 	(b)	 	Waiver of Duty to Mitigate on Delivery of Release — In the event that, either on or
before the date of termination of Dr. Panigrahi’s employment with QLT or within 30 days
after termination of his employment, Dr. Panigrahi executes and delivers to QLT a release
in the form set out in Schedule “B” to this Agreement, the provisions of paragraph 5.5(a)
shall be deemed to not apply and Dr. Panigrahi shall have no duty to mitigate and there
will be no reduction in the Severance Pay or Benefits Compensation in the event that he
obtains alternative employment or contract(s) for service. If Dr. Panigrahi has failed to
deliver to QLT such release within that 30-day time period, QLT shall notify Dr. Panigrahi
of such failure and provide to Dr. Panigrahi an additional 15 days in which to deliver such
executed release to QLT.

	5.6	 	Termination Due to Inability to Act

	 	(a)	 	Termination — Subject to applicable law, QLT may immediately terminate this Agreement
by giving written notice to Dr. Panigrahi if he becomes completely disabled (defined below)
to the extent that he cannot perform his duties under this Agreement either:

	 	I.	 	For a period exceeding six consecutive months, or

	 
	 	II.	 	For a period of 180 days (not necessarily consecutive) occurring during any
period of 365 consecutive days,

			
	 	 	 
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	 	 	 	and no other reasonable accommodation can be reached between QLT and Dr. Panigrahi.
Notwithstanding the foregoing, QLT agrees that it will not terminate Dr. Panigrahi pursuant
to this provision unless and until Dr. Panigrahi has been accepted by the insurer for
ongoing long-term disability payments or, alternatively, has been ruled definitively
ineligible for such payments.

	 
	 	(b)	 	Payments — In the event of termination of Dr. Panigrahi’s employment with QLT
pursuant to the provisions of this paragraph 5.6, QLT agrees to pay to Dr. Panigrahi
Severance Pay and Benefits Compensation as set out in paragraph 5.3 and if Dr. Panigrahi
ceases to be completely disabled, then the provisions of paragraph 5.3(c) (out placement
counseling) will apply. The payment will be due and owing within 30 days of the date that
Dr. Panigrahi is either no longer entitled to receive disability or WCB payments or is
definitively ruled ineligible for such payments unless the payment will not effect the
receipt of such benefits by Dr. Panigrahi in which case the payment will be made within 30
days of receipt of notice from Dr. Panigrahi that the payment is due and owing.

	 
	 	(c)	 	Definition — The term “completely disabled” as used in this paragraph 5.6 will mean
the inability of Dr. Panigrahi to perform the essential functions of his position under
this Agreement by reason of any incapacity, physical or mental, which a licensed physician
acceptable to Dr. Panigrahi and the Board, acting reasonably, determines keeps Dr.
Panigrahi from satisfactorily performing the essential functions of his position for QLT
during the foreseeable future.

	5.7	 	Death — Except as set out below, effective the date of death (the “Date of Death”)
of Dr. Panigrahi, this Agreement and the employment of Dr. Panigrahi under this Agreement will
terminate without further notice or action by either party. Within 30 days after the Date of
Death (and the automatic concurrent termination of employment under this Agreement), QLT will
pay the following amounts to Dr. Panigrahi’s estate:

	 	(a)	 	Base Salary — Base salary owing to Dr. Panigrahi up to his Date of Death.

	 
	 	(b)	 	Payment in Lieu of Benefits — In lieu of employee benefit coverage for his eligible
dependents after his Date of Death, a payment in the amount of 10% of his annual base
salary in effect at his Date of Death.

	 
	 	(c)	 	Expense Reimbursement — Reimbursement of Expenses incurred by Dr. Panigrahi or due and
owing prior to his Date of Death, subject to subparagraph 2.1(c).

	 
	 	(d)	 	Vacation Pay — Payment in respect of accrued but unpaid vacation pay owing to Dr.
Panigrahi as at his Date of Death.

	 
	 	(e)	 	RRSP Contribution — Payment of any unpaid RRSP contribution in respect of any calendar
year preceding the Date of Death and a prorated contribution to Dr. Panigrahi’s RRSP, the
pro-ration to be with respect to the portion of the current calendar year worked by Dr.
Panigrahi and the contribution to be subject to the conditions set out in subparagraph
2.1(e).

	 
	 	(f)	 	Bonus — A prorated payment to Dr. Panigrahi in respect of his entitlement to
participate in QLT’s Cash Incentive Compensation Plan and any other incentive compensation
plan in place, the pro-ration to be with respect to the portion of the current calendar
year worked by Dr. Panigrahi and the entitlement to be at the target level Dr. Panigrahi
would have otherwise been eligible to receive in the current calendar year if all
corporate, and, if applicable, individual goals were met but not exceeded provided that if
the Date of Death precedes the date that the amount under the Cash Incentive Compensation
Plan or other incentive compensation is otherwise actually paid to QLT’s executive officers
for a preceding year then Dr. Panigrahi will also receive a payment in respect of his
entitlement to participate in QLT’s Cash Incentive Compensation Plan and any other
incentive

			
	 	 	 
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	 	 	 	compensation plan in place for the preceding calendar year and the entitlement to be at the
target level Dr. Panigrahi would have otherwise been eligible to receive in the that
calendar year if all corporate, and individual goals were met but not exceeded.

	 	 	After his Date of Death, Dr. Panigrahi’s participation and/or entitlement under any stock option
plan offered by QLT to its employees will be in accordance with the terms of the plan and stock
option agreement applicable to each stock option grant made to Dr. Panigrahi.

	 
	5.8	 	No Duplication — In the event that the Severance Pay provisions of this Agreement
and the payment provisions of the Change of Control Agreement entered into between QLT and Dr.
Panigrahi are both applicable, Dr. Panigrahi agrees that he will give written notice to QLT
with respect to which agreement he wishes to be paid out under and that he is not entitled to
severance pay under both agreements.

6. CONFLICT OF INTEREST

	6.1	 	Avoid Conflict of Interest — Except as set out below, during the term of his
employment with QLT, Dr. Panigrahi agrees to conduct himself at all times so as to avoid any
real or apparent conflict of interest with the activities, policies, operations and interests
of QLT. To avoid improper appearances, Dr. Panigrahi agrees that he will not accept any
financial compensation of any kind, nor any special discount or loan from persons,
corporations or organizations having dealings or potential dealings with QLT, either as a
customer or a supplier or a co-venturer. QLT and Dr. Panigrahi acknowledge and agree that
from time to time the Chief Executive Officer of QLT may consent in writing to activities by
Dr. Panigrahi which might otherwise appear to be a real or apparent conflict of interest.

	 
	6.2	 	No Financial Advantage — During the term of his employment with QLT, Dr. Panigrahi
agrees that neither he nor any members of his immediate family will take financial advantage
of or benefit financially from information that is obtained in the course of his employment
related duties and responsibilities unless the information is generally available to the
public.

	 
	6.3	 	Comply with Policies — During the term of his employment with QLT, Dr. Panigrahi
agrees to comply with all written policies issued by QLT dealing with conflicts of interest.

	 
	6.4	 	Breach Equals Cause — Dr. Panigrahi acknowledges and agrees that material breach by
him of the provisions of this Section 6 will be cause for immediate termination by QLT of his
employment with QLT.

7. CONFIDENTIALITY

	7.1	 	Information Held in Trust — Dr. Panigrahi acknowledges and agrees that all business
and trade secrets and confidential information which Dr. Panigrahi acquires during his
employment with QLT relating to the business and affairs of QLT, its affiliates or
subsidiaries or to technology, systems, programs, ideas, products or services which have been
or are being developed or utilized by QLT, its affiliates or subsidiaries or in which QLT, its
affiliates or subsidiaries are or may become interested (collectively, “Confidential
Information”), will for all purposes and at all times, both during the term of Dr. Panigrahi’s
employment with QLT and at all times thereafter, be kept confidential by Dr. Panigrahi and
used by Dr. Panigrahi only for the exclusive benefit of QLT.

	 
	7.2	 	Non Disclosure —Dr. Panigrahi acknowledges and agrees that both during the term of
his employment with QLT and at all times thereafter, without the express or implied consent of
QLT, Dr. Panigrahi will not:

	 	(a)	 	Disclose — Disclose to any company, firm or person, other than QLT and its directors
and officers, any of the private affairs of QLT or any Confidential Information; or

			
	 	 	 
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	 	(b)	 	Use — Use any Confidential Information that he may acquire for his own purposes or for
any purposes, other than those of QLT.

	7.3	 	Intellectual Property Rights

	 	(a)	 	Disclose Inventions — Dr. Panigrahi agrees to promptly disclose to QLT any and all
ideas, developments, designs, articles, inventions, improvements, discoveries, machines,
appliances, processes, methods, products or the like (collectively, “Inventions”) that Dr.
Panigrahi may invent, conceive, create, design, develop, prepare, author, produce or reduce
to practice, either solely or jointly with others, in the course of his employment with
QLT.

	 
	 	(b)	 	Inventions are QLT Property — All Inventions and all other work of Dr. Panigrahi in
the course of his employment with QLT will at all times and for all purposes be the
property of, and are hereby assigned by Dr. Panigrahi to, QLT for QLT to use, alter, vary,
adapt and exploit as it will see fit, and will be acquired or held by Dr. Panigrahi in a
fiduciary capacity solely for the benefit of QLT.

	 
	 	(c)	 	Additional Requirements — Dr. Panigrahi agrees to:

	 	I.	 	Treat all information with respect to Inventions as Confidential Information.

	 
	 	II.	 	Keep complete and accurate records of Inventions, which records will be the
property of QLT and copies of which records will be maintained at the premises of QLT.

	 
	 	III.	 	Execute all assignments and other documents required to assign and transfer to
QLT (or such other persons as QLT may direct) all right, title and interest in and to
the Inventions and all other work of Dr. Panigrahi in the course of his employment with
QLT, and all writings, drawings, diagrams, photographs, pictures, plans, manuals,
software and other materials, goodwill and ideas relating thereto, including, but not
limited to, all rights to acquire in the name of QLT or its nominee(s) patents,
registration of copyrights, design patents and registrations, trade marks and other
forms of protection that may be available.

	 
	 	IV.	 	Execute all documents and do all acts reasonably requested by QLT to give
effect to this provision.

	7.4	 	Records — Dr. Panigrahi agrees that all records or copies of records concerning
QLT’s activities, business interests or investigations made or received by him during his
employment with QLT are and will remain the property of QLT. He further agrees to keep such
records or copies in the custody of QLT and subject to its control, and to surrender the same
at the termination of his employment or at any time during his employment at QLT’s request.

	 
	7.5	 	No Use of Former Employer’s Materials and Information — Mr. Panigrahi certifies,
warrants and represents that his performance of all provisions of this Agreement will not
breach any agreement or other obligation to keep in confidence proprietary or confidential
information known to him before or after the commencement of employment with QLT. Mr.
Panigrahi will not disclose to QLT, use in the performance of his work for QLT, or induce QLT
to use, any Inventions (as defined above), confidential or proprietary information, or other
material or documents belonging to any previous employer or to any other party in violation of
any obligation of confidentiality to such party or in violation of such party’s proprietary
rights; including without limitation whether any products or services of such previous
employer or other person actually incorporated, used, or were designed or modified based upon
such information, and even if such information constitutes negative know-how.

8. POST-EMPLOYMENT RESTRICTIONS

	8.1	 	Non-Compete — Dr. Panigrahi agrees that, by virtue of his senior position with QLT,
he will possess strategic sensitive information concerning the business of QLT, its affiliates
and subsidiaries. As a

			
	 	 	 
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	 	 	result, and in consideration of the payments to be made by QLT to Dr. Panigrahi under this
Agreement, without the prior written consent of QLT, for a period of one year following
termination of his employment with QLT for any reason (by resignation or otherwise), as measured
from his Last Active Day, Dr. Panigrahi will not:

	 	(a)	 	Participate in a Competitive Business — Directly or indirectly, own, manage, operate,
join, control or participate in the ownership, management, operation or control of, or be a
director or an employee of, or a consultant to, any business, firm or corporation that, as
a part of conducting its business, is in any way competitive with QLT or any of its
affiliates or subsidiaries with respect to:

	 	I.	 	the development and/or commercialization and/or marketing of pharmaceutical
products that are directly competitive with QLT’s or its subsidiaries’ then current
commercial products, Visudyne or any other products then being commercialized by or on
behalf of QLT or its affiliates or subsidiaries which individually have worldwide
annual net sales of U.S.$50 million or more in the calendar year preceding Dr.
Panigrahi’s Last Active Day,

	 
	 	II.	 	the development and/or commercialization and/or marketing of light-activated
pharmaceutical products for photodynamic therapy in the treatment of ophthalmic
indications,

	 
	 	III.	 	the development and/or commercialization and/or marketing of pharmaceutical
products for treating ophthalmic indications associated with endogenous retinyl
deficiencies in the eye, or

	 
	 	IV.	 	the development and/or commercialization and/or marketing of pharmacuetical
products and/or devices that are or include lacrimal inserts and punctal plugs, and/or
drug-eluting lacrimal implants and drug-eluting punctal plugs, and insertion,
extraction and detection devices used in connection therewith, for the treatment or
prevention for disease, including ocular diseases,

	 	 	 	anywhere in Canada, the United States or Europe.

	 	(b)	 	Solicit on Behalf of a Competitive Business — Directly or indirectly call upon or
solicit any QLT employee or QLT customer or known prospective customer of QLT on behalf of
any business, firm or corporation that, as part of conducting its business, is in any way
competitive with QLT with respect to:

	 	I.	 	the development and/or commercialization and/or marketing of pharmaceutical
products that are directly competitive with QLT’s or its subsidiaries’ then current
commercial products, Visudyne or any other products then being commercialized by or on
behalf of QLT or its affiliates or subsidiaries which individually have worldwide
annual net sales of U.S.$50 million or more in the calendar year preceding Dr.
Panigrahi’s Last Active Day,

	 
	 	II.	 	the development and/or commercialization and/or marketing of light-activated
pharmaceutical products for photodynamic therapy in the treatment of ophthalmic
indications,

	 
	 	III.	 	the development and/or commercialization and/or marketing of pharmaceutical
products for treating ophthalmic indications associated with endogenous retinyl
deficiencies in the eye, or

	 
	 	IV.	 	the development and/or commercialization and/or marketing of pharmacuetical
products and/or devices that are or include lacrimal inserts and punctal plugs, and/or
drug-eluting lacrimal implants and drug-eluting punctal plugs, and insertion,
extraction and detection devices used in connection therewith, for the treatment or
prevention for disease, including ocular diseases,

	 	 	 	anywhere in Canada, the United States or Europe.

			
	 	 	 
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	 	(c)	 	Solicit Employees — Directly or indirectly solicit any individual to leave the
employment of QLT or any of its affiliates or subsidiaries for any reason or interfere in
any other manner with the employment relationship existing between QLT, its affiliates or
subsidiaries and its current employees other than by way of advertisements of broad
distribution not targeted at employees of QLT or its affiliates or subsidiaries.

	 
	 	(d)	 	Solicit Customers — Directly or indirectly induce or attempt to induce any customer,
supplier, distributor, licensee or other business relation of QLT or its affiliates or
subsidiaries to cease doing business with QLT, its affiliates or subsidiaries or in any way
interfere with the existing business relationship between any such customer, supplier,
distributor, licensee or other business relation and QLT or its affiliates or subsidiaries.

	8.2	 	Minority Share Interests Allowed — The parties agree that nothing contained in
paragraph 8.1 is intended to prohibit Dr. Panigrahi from owning less than 5% of the issued and
outstanding stock of any company whose stock or shares are traded publicly on a recognized
exchange.

9. REMEDIES

	9.1	 	Irreparable Damage — Dr. Panigrahi acknowledges and agrees that:

	 	(a)	 	Breach — Any breach of any provision of this Agreement could cause irreparable damage
to QLT; and

	 
	 	(b)	 	Consequences of Breach — In the event of a breach of any provision of this Agreement
by him, QLT will have, in addition to any and all other remedies at law or in equity, the
right to an injunction, specific performance or other equitable relief to prevent any
violation by him of any of the provisions of this Agreement including, without limitation,
the provisions of Sections 7 and 8.

	9.2	 	Injunction — In the event of any dispute under Sections 7 and/or 8, Dr. Panigrahi
agrees that QLT will be entitled, without showing actual damages, to seek a temporary or
permanent injunction restraining his conduct, pending a determination of such dispute and that
no bond or other security will be required from QLT in connection therewith.

	 
	9.3	 	Additional Remedies — Dr. Panigrahi acknowledges and agrees that the remedies of QLT
specified in this Agreement are in addition to, and not in substitution for, any other rights
and remedies of QLT at law or in equity and that all such rights and remedies are cumulative
and not alternative or exclusive of any other rights or remedies and that QLT may have
recourse to any one or more of its available rights and remedies as it will see fit.

10. GENERAL MATTERS

	10.1	 	Tax Withheld — The parties acknowledge and agree that all payments to be made by QLT
to Dr. Panigrahi under this Agreement will be subject to QLT’s withholding of applicable
withholding taxes.

	 
	10.2	 	Debarrment — Dr. Panigrahi represents, warrants and covenants that he is not now nor
has in the past been debarred by the United States Food and Drug Administration under the
Food, Drug and Cosmetic Act or under the Generic Drug Enforcement Act and the Employee has
never been convicted under the Food, Drug and Cosmetic Act or under the Generic Drug
Enforcement Act, or under any other federal law for conduct relating to the development or
approval of a drug product and/or relating to a drug product.

	 
	10.3	 	Independent Legal Advice — Dr. Panigrahi acknowledges that he has obtained or had
the opportunity to obtain independent legal advice with respect to this Agreement and all of
its terms and conditions.

			
	 	 	 
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	10.4	 	Binding Agreement — The parties agree that this Agreement will enure to the benefit
of and be binding upon each of them and their respective heirs, executors, successors and
assigns.

	 
	10.5	 	Governing Law — The parties agree that this Agreement will be governed by and
interpreted in accordance with the laws of the Province of British Columbia and the laws of
Canada applicable to this Agreement. All disputes arising under this Agreement will be
referred to the Courts of the Province of British Columbia, which will have exclusive
jurisdiction, unless there is mutual agreement to the contrary.

	 
	10.6	 	Notice — The parties agree that any notice or other communication required to be
given under this Agreement will be in writing and will be delivered personally or by facsimile
transmission to the addresses set forth on page 1 of this Agreement to the attention of the
following persons:

	 	(a)	 	If to QLT — Attention: Chief Executive Officer, Fax No. (604) 707-7001,

	 	 	 	with a copy to:

	 
	 	 	 	QLT Inc.

887 Great Northern Way, Suite 101

Vancouver, British Columbia

Attention:          Corporate Counsel

Fax No.:            (604) 873-0816

	 	(b)	 	If to Dr. Panigrahi — To the address for Dr. Panigrahi specified on page 1 of this
Agreement;

		 	or to such other addresses and persons as may from time to time be notified in writing by the
parties. Any notice delivered personally will be deemed to have been given and received at the
time of delivery. Any notice delivered by facsimile transmission will be deemed to have been
given and received on the next business day following the date of transmission.

	10.7	 	Survival of Terms

	 	(a)	 	Dr. Panigrahi’s Obligations —Dr. Panigrahi acknowledges and agrees that his
representations, warranties, covenants, agreements, obligations and liabilities under any
and all of Sections 7, 8 and 10 of this Agreement will survive any termination of this
Agreement.

	 
	 	(b)	 	Company’s Obligations — QLT acknowledges and agrees that its representations,
warranties, covenants, agreements, obligations and liabilities under any and all of
Sections 3, 4, 5 and 10 of this Agreement will survive any termination of this Agreement.

	 
	 	(c)	 	Without Prejudice — Any termination of this Agreement will be without prejudice to any
rights and obligations of the parties arising or existing up to the effective date of such
expiration or termination, or any remedies of the parties with respect thereto.

	10.8	 	Waiver — The parties agree that any waiver of any breach or default under this
Agreement will only be effective if in writing signed by the party against whom the waiver is
sought to be enforced, and no waiver will be implied by indulgence, delay or other act,
omission or conduct. Any waiver will only apply to the specific matter waived and only in the
specific instance in which it is waived.

	 
	10.9	 	Entire Agreement — The parties agree that the provisions contained in this
Agreement, any Stock Option Agreements and the Change of Control Agreement entered into
between QLT and Dr. Panigrahi constitute the entire agreement between QLT and Dr. Panigrahi
with respect to the subject matters hereof

			
	 	 	 
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	 	 	and thereof, and supersede all previous communications, understandings and agreements (whether
verbal or written) between QLT and Dr. Panigrahi regarding the subject matters hereof and
thereof. To the extent that there is any conflict between the provisions of this Agreement, the
Change of Control Agreement and any Stock Option Agreements between QLT and Dr. Panigrahi, the
following provisions will apply:

	 	(a)	 	Change of Control — If the conflict is with respect to an event, entitlement or
obligation in the case of a Change of Control of QLT (as defined in the Change of Control
Agreement between QLT and Dr. Panigrahi), the provisions of the Change of Control Agreement
will govern (unless Dr. Panigrahi otherwise elects as contemplated in paragraph 5.8 of this
Agreement).

	 
	 	(b)	 	Stock Options — If the conflict is with respect to an entitlement or obligation with
respect to stock options of QLT, the provisions of the Stock Option Agreements will govern
(unless the parties otherwise mutually agree).

	 
	 	(c)	 	Other — In the event of any other conflict, the provisions of this Agreement will
govern (unless the parties otherwise mutually agree).

	10.10	 	Severability of Provisions — If any provision of this Agreement as applied to
either party or to any circumstance is adjudged by a court of competent jurisdiction to be
void or unenforceable for any reason, the invalidity of that provision will in no way affect
(to the maximum extent permissible by law):

	 	(a)	 	The application of that provision under circumstances different from those adjudicated
by the court;

	 
	 	(b)	 	The application of any other provision of this Agreement; or

	 
	 	(c)	 	The enforceability or invalidity of this Agreement as a whole.

	 	 	If any provision of this Agreement becomes or is deemed invalid, illegal or unenforceable in any
jurisdiction by reason of the scope, extent or duration of its coverage, then the provision will
be deemed amended to the extent necessary to conform to applicable law so as to be valid and
enforceable or, if the provision cannot be so amended without materially altering the intention
of the parties, then such provision will be stricken and the remainder of this Agreement will
continue in full force and effect.

	10.11	 	Captions — The parties agree that the captions appearing in this Agreement have
been inserted for reference and as a matter of convenience and in no way define, limit or
enlarge the scope or meaning of this Agreement or any provision.

	 
	10.12	 	Amendments — Any amendment to this Agreement will only be effective if the
amendment is in writing and is signed by QLT and Dr. Panigrahi.

IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year first
written above.

QLT INC.

	 	 	 	 	 
	By:

	 	/s/ Robert L. Butchofsky
	 	/s/ Dipak Panigrahi
	 

	 	 
	 	 
	 

	 	ROBERT L. BUTCHOFSKY 

President and Chief Executive Officer
	 	DIPAK PANIGRAHI

			
	 	 	 
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SCHEDULE “A”

RELOCATION EXPENSES

Part I — Relocation to Vancouver:

	1.	 	Return air fares to Vancouver (tickets provided by QLT) for Dr. Panigrahi and Dr. Panigrahi’s
spouse to find suitable accommodation together with hotel and rental of an economy car for a
period of 3 to 4 days.

	 
	2.	 	If required, up to thirty six (36) months of accommodation upon arrival in Vancouver to a
maximum of $6,000 per month ($72,000 per year) , payable in up to three (3) installments on an
annual basis for the rental accommodation in the immediately preceding year, such that any
such payment, if and to the extent payable, shall be payable on the first payroll date
following the first, second and third anniversary dates of Dr. Panigrahi’s Commencement Date,
provided that Dr. Panigrahi must be actively employed by QLT on each such payment date in
order to receive the payment, and further provided that Dr. Panigrahi provides to QLT evidence
satisfactory to QLT, in its sole discretion acting reasonably, of the monthly rental rate
actually paid in the prior year and the contractual obligation relating thereto. QLT will
assist in locating this accommodation, if necessary. As required under the Income Tax Act, to
the extent these payments are not used to provide for temporary accommodation while Dr.
Panigrahi is waiting to occupy his new permanent residence, they will be subject to the same
required statutory withholdings in Canada as base salary. As a result, a portion of any
rental accommodation assistance provided as described above may be subject to required
statutory withholdings. In the event of a termination of employment on Dr. Panigrahi’s part
or by QLT for cause (pursuant to paragraphs 3.1 and 5.1, respectively, of the Agreement)
within thirty-six (36) months of the Commencement Date, QLT will be obligated to reimburse Dr.
Panigrahi for rental accommodation only up to and until the date of termination of employment
with QLT, to the extent not previously reimbursed in accordance with this Part I(2). In the
event of termination of employment by QLT other than for cause (pursuant to paragraph 5.2 of
the Agreement) within thirty-six (36) months of the Commencement Date, QLT will be obligated
to reimburse Dr. Panigrahi for rental accommodation only up to and until the date of
termination of employment plus that number of months calculated pursuant to paragraph
5.3(a)(I) and (II) of the Agreement for purposes of calculating Dr. Panigrahi’s Severance Pay
in accordance with paragraph 5.2 of the Agreement, to the extent not previously reimbursed in
accordance with this Part I(2).

	 
	3.	 	Moving costs for household possessions, including two (2) automobiles, and excluding bulky
items of low value. QLT will assign a corporate moving company.

	 
	4.	 	Moving expenses incurred as a result of moving from Dr. Panigrahi’s interim accommodations to
Dr. Panigrahi’s permanent residence in the Greater Vancouver area, to a maximum of $2,000.00.
QLT will assign a corporate moving company.

	 
	5.	 	Reimbursement for the rental of an economy car for a one-month period if necessary.

	 
	6.	 	One-way air fares for Dr. Panigrahi and Dr. Panigrahi’s immediate family from their present
location to Vancouver at the time of the move (or return air fare for Dr. Panigrahi if Dr.
Panigrahi relocates to Vancouver prior to his family).

	 
	7.	 	Accountable allowance: Reimbursement of up to $5,000.00 to cover other reasonable
expenses associated with Dr. Panigrahi’s move. The following outlines those moving-related
expenses which Canada Customs and Revenue Agency (CCRA) allows us to reimburse Dr. Panigrahi
for without incurring a taxable benefit. Supporting receipts will be required:

			
	 	 	 
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	 	 	 	Previous Residence

	 
	 	•	 	Disconnection charges and fees for telephone, water, space heaters, air
conditioners, barbecues, automatic garage doors, water heater and household
appliances.

	 
	 	•	 	Premiums paid to discharge a mortgage on the former residence where the
purchaser does not assume the mortgage, and lease cancellation fees (including
costs incurred to sub-lease a dwelling)

	 
	 	•	 	Expenses in carrying the former residence after the move in situations where,
notwithstanding all reasonable efforts, a sale of the former residence was not
successfully completed. These expenses include property taxes, heat, hydro,
insurance and grounds maintenance costs.

	 
	 	 	 	New Residence

	 
	 	•	 	Connection fees or installation costs for items where they existed at the old
residence. These include telephone, water, heating, hydro, cable TV, barbeques,
water softners, water heaters, air conditioners, automatic garage openers, space
heaters, carpets, curtains, drapes, and household appliances.

	 
	 	•	 	Costs and fees for acquisition of new automobile licences, including provincial
automobile inspection.

	 
	 	•	 	Costs incurred to adapt household belongings to the new location where such
items were owned at the old residence, including alterations to household
furniture, piano and organ tuning, adjustments to drapes, blinds and carpets, and
plumbing/watering modifications.

	 
	 	•	 	Expenses incurred by the employee and spouse to locate a home at the new
location, including travel/childcare expenses and boarding of pets.

	 
	 	•	 	Legal costs associated with Will revisions necessitated by the move.

	 
	 	•	 	Long distance telephone charges in connection with the disposition of the former
residence or the acquisition of the new residence.

	8.	 	Non-accountable allowance: As part of Dr. Panigrahi’s relocation, Dr. Panigrahi will
likely incur a number of incidental expenses which may not appear on the above list (e.g.
cleaning costs). QLT will reimburse Dr. Panigrahi for these costs up to $650.00 on a tax-free
basis in line with CCRA’s accepted policy for non-accountable allowances (this is in addition
to the accountable allowance noted above). Note that we do not require Dr. Panigrahi to
supply supporting receipts for this reimbursement, however, Dr. Panigrahi will be required to
provide us with a memo certifying that he incurred at least this much in incidental costs. If
Dr. Panigrahi does not provide QLT with this memo, these costs will be treated as a taxable
benefit. Any additional reimbursement Dr. Panigrahi receive for “incidentals” that are not on
the attached list will be considered a taxable benefit.

	 
	9.	 	Tax Advice Associated with Relocation to Canada: QLT will reimburse you for
reasonable expenses to a maximum of Cdn. $3,000 incurred in connection with seeking
independent tax consultation regarding your employment status in Canada.

			
	 	 	 
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Part II — Relocation Back to Texas Upon Termination of Employment by QLT:

	 	 	In the event that QLT terminates the employment of Dr. Panigrahi other than for cause within
12 months from the commencement of his employment with QLT, QLT will provide financial
assistance for Dr. Panigrahi to relocate back to Texas, or another location in North
America, for purposes of new employment. That financial assistance will be additional to
any severance or other termination payments made to Dr. Panigrahi under this Agreement and
will cover the cost of Dr. Panigrahi’s move to such location and such other expenses as are
contemplated in paragraphs 1, 3, 4, 5, 6 and 7, but will exclude the cost of any interim
accommodation or any costs associated with the purchase by Dr. Panigrahi of a new home. The
amount of such financial assistance will be computed in the same manner as the corresponding
expenses under Part I of this Schedule “A”, but in no event will the amount payable exceed
the amount originally paid for the corresponding expenses under each of paragraphs 1, 3, 4,
5, 6 and 7 of this Schedule “A” to relocate Dr. Panigrahi to Vancouver.

	 
	 	 	The financial assistance to be provided under this Part II of Schedule “A” will only be
provided by QLT in the event that the relocation by Dr. Panigrahi occurs within six (6)
months from the effective date of termination of Dr. Panigrahi’s employment with QLT.

	 
	 	 	While some of the relocation expenses reimbursed to move Dr. Panigrahi to Vancouver may not
be taxable benefits, as outlined above, Dr. Panigrahi acknowledges that under the CCRA’s
rules some or all of such financial assistance to relocate Dr. Panigrahi to Texas, or
another location in North America, may be considered a taxable benefit. Unlike the amounts
paid under Part I of Schedule “A”, QLT will not be responsible to gross up any
amounts paid to Dr. Panigrahi pursuant to this Part II of Schedule “A”.

			
	 	 	 
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SCHEDULE “B”

FINAL RELEASE

IN CONSIDERATION OF the payments made to me by QLT Inc. (hereinafter called “QLT”) pursuant to
paragraph 5.3 of the employment agreement dated          day of                      , 20
 _____ 
between the
undersigned and QLT and in consideration of the waiver by QLT of its rights under paragraph 5.5(a)
of that employment agreement, effective the date of this Release, I,                      of
                     do hereby remise, release and forever discharge QLT, having a place of business
at 887 Great Northern Way, Suite 101, in the City of Vancouver, Province of British Columbia, V5T
4T5, its officers, directors, servants, employees and agents, and their heirs, executors,
administrators, successors and assigns, as the case may be, of and from any and all manner of
actions, causes of action, suits, contracts, claims, damages, costs and expenses of any nature or
kind whatsoever, whether in law or in equity, which as against QLT or such persons as aforesaid or
any of them, I have ever had, now have, or at any time hereafter I or my personal representatives
can, shall or may have, by reason of or arising out of my employment with QLT and/or the subsequent
termination of my employment with QLT on or about                     , 20
 _____ 
, or in any other way
connected with my employment with QLT and more specifically, without limiting the generality of the
foregoing, any and all claims for damages for termination of my employment, constructive
termination of my employment, loss of position, loss of status, loss of future job opportunity,
loss of opportunity to enhance my reputation, the timing of the termination and the manner in which
it was effected, loss of bonuses, loss of shares and/or share options, loss of benefits, including
life insurance and short and long-term disability benefit coverage, and any other type of damages
arising from the above. Notwithstanding the foregoing, nothing in this Release will act to remise,
release or discharge QLT from obligations, if any, which QLT may have pursuant to any indemnity
agreements previously entered into between me and QLT or from any rights I may have to claim
coverage under QLT’s past, current or future director and/or officer insurance policies, in either
case with respect to existing or future claims that may be brought by third parties.

IT IS UNDERSTOOD AND AGREED that this Release includes any and all claims arising under the
Employment Standards Act, Human Rights Code, or other applicable legislation and that the
consideration provided includes any amount that I may be entitled to under such legislation.

IT IS FURTHER UNDERSTOOD AND AGREED that this Release is subject to compliance by QLT with the said
conditions as stipulated in paragraph 5.3 of the aforementioned employment agreement entered into
with QLT.

IT IS FURTHER UNDERSTOOD AND AGREED THAT QLT will withhold and remit income tax and other statutory
deductions from the aforesaid consideration and I agree to indemnify and hold harmless QLT

			
	Page 18
	 	Initials      

 

 

 

from any further assessments for income tax, repayment of any employment insurance benefits
received by me, or other statutory deductions which may be made under statutory authority.

IT IS FURTHER UNDERSTOOD AND AGREED that this is a compromise and is not to be construed as an
admission of liability on the part of QLT. The terms of this Release set out the entire agreement
between QLT and me with respect to the matters described herein and are intended to be contractual
and not a mere recital.

IT IS FURTHER UNDERSTOOD AND AGREED that I will keep the contents of this settlement and all
communication relating thereto confidential except to Revenue Canada or as is required to obtain
legal and tax advice, or to enforce my rights hereunder in a court of law, as is required by law.

IT IS FURTHER UNDERSTOOD AND AGREED that the consideration described herein was voluntarily
accepted by me for the purpose of making a full and final settlement of all claims described above
and that prior to agreeing to the settlement, I was advised by QLT of my right to receive
independent legal advice.

IN WITNESS WHEREOF this Release has been executed effective the       day of                     , 20___.

	 	 	 	 	 	 
	SIGNED, SEALED AND DELIVERED 

By                      in the presence of:

	 	)

)

)

)	 	 	 
	(seal)
	 	)	 	DIPAK PANIGRAHI	 
	Name 

	 	)	 	 	 
	 
	 	)	 	 	 
	Address
	 	)	 	 	 
	 
	 	)	 	 	 
	 
	 	)	 	 	 
	 
	 	)	 	 	 
	Occupation
	 	)	 	 	 

			
	Page 19
	 	Initials      

 

 

 

SCHEDULE “C”

REIMBURSEMENT OF RESIGNATION COSTS

If required, QLT will reimburse Dr. Panigrahi for any signing bonus or relocation and moving costs
which was paid to Dr. Panigrahi and for which Dr. Panigrahi has been required to, and is
contractually obligated to, repay to his former employer (such former employer to be that which
employed Dr. Panigrahi immediately prior to his commencement of employment with QLT hereunder) (the
“Former Employer”) as a result of his resignation of employment in order to commence employment
with QLT hereunder. Reimbursement by QLT will occur once QLT receives written documentation from
Dr. Panigrahi, providing evidence satisfactory to QLT, in its sole discretion acting reasonably, of
the amounts required to be repaid by such Former Employer in each of the above categories and the
contractual or legal obligation for repayment therefor. The maximum amount that QLT will reimburse
is $200,000 USD.

			
	Page 20
	 	InitialsExhibit 10.51

Exhibit 10.51

April 12, 2010

STRICTLY PERSONAL AND CONFIDENTIAL

Dr. Dipak Panigrahi

Dear Dipak:

INTRODUCTION

A dedicated executive management team is essential to protecting and enhancing the best
interests of QLT Inc. (the “Company” or “QLT”) and its shareholders. The Company wishes to provide
its executives with compensation and benefits arrangements which would come into effect in
circumstances related to a change in control which are competitive with those of other
corporations, in order to ensure the Company receives the benefit of the full attention and
dedication of the executives at all times, and notwithstanding any threatened or pending change in
control of the Company.

The purpose of this Letter Agreement is to document the terms of the severance package to
which you as a Company executive shall be entitled if material changes in the terms of your
employment with the Company occur without your consent, or if your employment with the Company is
terminated, in connection with a change in control of the Company. Except as contemplated under
Section 2.5 of this Letter Agreement, the Letter Agreement supersedes and replaces any prior
agreements entered into between you and the Company with respect to your entitlement to severance
benefits in the event of a change of control of QLT. This letter shall not be effective unless and
until you actually commence employment with QLT.

NOW THEREFORE in consideration of $10.00, the promises made by each party to the other as set
out in this Letter Agreement and other good and valuable consideration, the receipt and sufficiency
of which each of the parties acknowledges, QLT and you agree as follows:

PART I

DEFINITIONS

1.1 Definitions. In this Letter Agreement:

	 	(a)	 	“Affiliate” has the meaning given to it in the Business Corporations Act (British
Columbia);

	 
	 	(b)	 	“Benefit Plans” means the coverage under the Company’s group benefit plan for employees
which the Company provides to you and your eligible dependants, including all medical,
dental, life and other benefit plans but excluding short and long term disability coverage,
out-of-province medical coverage and the RRSP contribution benefit;

	 
	 	(c)	 	“Board” means the Company’s Board of Directors;

	 
	 	(d)	 	“Change of Control” means any of the following events:

	 	(i)	 	Merger. A merger, consolidation, reorganization or arrangement involving the
Company other than a merger, consolidation, reorganization or arrangement in which
stockholders of

 

 

 

	 	 	 	the Company immediately prior to such merger, consolidation, reorganization or
arrangement own, directly or indirectly, securities possessing at least 65% of the
total combined voting power of the outstanding voting securities of the corporation
resulting from such merger, consolidation, reorganization or arrangement in
substantially the same proportion as their ownership of such voting securities
immediately prior to such merger, consolidation, reorganization or arrangement;

	 
	 	(ii)	 	Tender Offer. The acquisition, directly or indirectly, by any person or related
group of persons acting jointly or in concert (other than the Company or a person that
directly or indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership of securities possessing more than 35% of the total
combined voting power of the Company’s outstanding securities pursuant to a tender
offer made directly to the Company’s stockholders;

	 
	 	(iii)	 	Sale. The sale, transfer or other disposition of all or substantially all of
the assets of the Company other than a sale, transfer or other disposition to an
Affiliate of the Company or to an entity in which stockholders of the Company
immediately prior to such sale, transfer or other disposition own, directly or
indirectly, securities possessing at least 65% of the total combined voting power of
the outstanding voting securities of the purchasing entity in substantially the same
proportion as their ownership of such voting securities immediately prior to sale,
transfer or other disposition; or

	 
	 	(iv)	 	Board Change. A change in the composition of the Board over a period of 24
consecutive months or less such that a majority of the Board members ceases to be
comprised of individuals who either have been:

	 	(A)	 	Board members continuously since the beginning of such period, or

	 
	 	(B)	 	appointed or nominated for election as Board members during such period by at least a
majority of the Board members described in subsection (A) above who were still in office at the
time the Board approved such appointment or nomination.

	 	(e)	 	“Involuntary Termination” means any one of the following:

	 	(i)	 	the termination of your employment by the Company or the giving of written
notice to you by the Company of the intended termination of your employment, in either
case for reasons other than cause, permanent disability or death, within the 24 month
period following the occurrence of a Change of Control, or

	 
	 	(ii)	 	your giving written notice to the Company, within 24 months after a Triggering
Event, in which you advise that a Triggering Event has occurred and tender your
resignation from employment with the Company;

	 	(f)	 	“Successor” shall mean any corporation which is the legal successor to the Company, or which
acquires substantially all of the assets of the Company, pursuant to a Change of Control;

	 
	 	(g)	 	“Triggering Event” shall mean, without your express written consent, the occurrence of any
one or more of the following circumstances after a Change of Control:

 

 

 

	 	(i)	 	the assignment to you of any duties which are materially inconsistent, in an adverse
respect, with your position, authority, duties or responsibilities prior to the Change of
Control, or any other action by the Company or its Successor which results in a material
diminution in such position, authority or responsibilities, except an isolated and
inadvertent action not taken in bad faith and which is remedied by the Company or its
Successor promptly after receipt of notice thereof from you;

	 
	 	(ii)	 	any reduction by the Company or a Successor in your base salary;

	 
	 	(iii)	 	a reduction by the Company or a Successor of 25% or more of your annual cash
incentive compensation opportunity;

	 
	 	(iv)	 	the Company or a Successor’s requiring you to, or notifying you that you will be
required to, relocate to or be based at, or situate one day or more per week in, a
location which is 100 kilometers or more from the location where you were based immediately
prior to the Change of Control;

	 
	 	(v)	 	the failure by the Company or a Successor to continue, substantially as in effect
immediately prior to the Change of Control, all of the Company’s Benefit Plans, in which
you participate (or substantially equivalent successor plans, programs, policies,
practices or arrangements) or the failure by the Company or a Successor to continue your
participation therein on substantially the same basis as existed immediately prior to the
Change of Control;

	 
	 	(vi)	 	the failure of the Company to obtain an agreement from any Successor to assume and
agree to perform this Letter Agreement, as contemplated in Section 3.5 of this Letter
Agreement, and your Employment Agreement with the Company (the “Employment Agreement”); or

	 
	 	(vii)	 	any purported termination by the Company or a Successor of your employment other
than for cause, permanent disability or death.

PART II

CHANGE OF CONTROL BENEFITS

2.1 Severance Payment. Upon the occurrence of an Involuntary Termination, you shall receive
a severance payment from the Company equal to the base salary, maximum bonus entitlement, and
maximum RRSP contribution to which you would have been entitled in an 18 month period (the
“Severance Period”), calculated as follows:

	 	(a)	 	the rate of base salary will be that in effect at the time of the
Involuntary Termination or as was in effect immediately prior to the occurrence of
a Triggering Event, whichever rate is greater; and

	 
	 	(b)	 	the maximum bonus entitlement will be calculated as the maximum amount
available to you under the Company’s cash incentive compensation plan at the time
of the Involuntary Termination as if 100% of your individual goals (if applicable)
and the corporate goals were met but not exceeded or the entitlement which was
available to you immediately prior to the occurrence of a Triggering Event,
whichever amount is greater, pro-rated for any portion of the Severance Period of
less than a year; and

 

 

 

	 	(c)	 	a contribution to your RRSP, equal to that to which you would have been
entitled had you been employed by the Company throughout the Severance Period,
pro-rated for any period of less than a year, and subject to terms of the RRSP
contribution provisions set out in your Employment Agreement with the Company.

2.2 Other Compensation. In addition to the amounts paid under Section 2.1, upon the
occurrence of an Involuntary Termination, the Company shall:

	 	(a)	 	Expenses — reimburse you for all reasonable business related promotion,
entertainment and/or travel expenses incurred by you during the course of your
employment with the Company, subject to the expense reimbursement provisions set
out in your Employment Agreement with the Company and the Company’s Policy and
Procedures Manual, as amended from time to time;

	 
	 	(b)	 	Vacation — make a payment to you in respect of your accrued but unpaid
vacation pay up to and including your last day of employment with the Company;

	 
	 	(c)	 	RRSP — make a prorated contribution to your RRSP, the pro-ration to be
with respect to the portion of the then current calendar year worked by you up to
and including the last day of your employment with the Company and subject to the
RRSP contribution provisions set out in your Employment Agreement with the
Company;

	 
	 	(d)	 	Cash Incentive
Compensation Earned Prior to Involuntary Termination —
in addition to the payments under Section 2.1(b) above, the Company shall make a
payment to you in respect of your entitlement to participate in the Company’s cash
incentive compensation plan in respect of the current calendar year, and the prior
year if such payment has not yet been made, to be pro-rated with respect to the
portion of the current calendar year worked by you up to and including your last
day of employment with the Company and, in respect of the current calendar year,
shall be calculated at the maximum annual bonus entitlement available to you under
the Company’s cash incentive compensation plan at the time of the Involuntary
Termination as if 100% of your individual goals (if applicable) and the corporate
goals were met but not exceeded or the entitlement which was available to you
immediately prior to the occurrence of any prior Triggering Event, whichever amount
is greater;

	 
	 	(e)	 	Benefits — continue to provide you and your eligible dependants with
coverage under the Company’s Benefit Plans for a period of 30 days after your last
day of employment with the Company and, at your request, for such further period
(the aggregate of which shall not exceed the Severance Period) as the insurer shall
permit (not to exceed the duration of the Severance Period), provided that the
Company’s obligation to maintain coverage for you and your eligible dependants
under this subsection will be conditional upon you and your eligible dependants
remaining in Canada. For any portion of the Severance Period during which such
coverage is not maintained (whether because you no longer reside in Canada or
decline to request such coverage beyond the initial 30-day period), the Company
shall pay to you compensation in the amount of 10% of your base salary, calculated
in accordance with Section 2.1(a) for such period;

 

 

 

	 	(f)	 	Moving Expenses — pay such moving expenses as may be reasonably
incurred by you to relocate you and your family to a new location for future
employment purposes or the location from which you traveled to Vancouver, as the
case may be, including, in the event that you are unable to sell your home in
Vancouver before you are required to pay costs of accommodation at your new
location, the costs of such accommodation until you derive proceeds from the sale
of you home in Vancouver, or six months, whichever period is longer, together with
any additional relocation reimbursement to which you may then be entitled under the
terms of your Employment Agreement with the Company, such expenses to be calculated
and paid in accordance with terms of your Employment Agreement, provided that there
is no duplication of payments pursuant to the Employment Agreement and this clause;

	 
	 	(g)	 	Out-Placement Counselling — reimburse you for out-placement counselling
services from a qualified counsellor to be agreed to by you and the Company to a
maximum of CAD5,000 for services rendered to you in seeking alternative employment.

2.3 Timing of Payment. The amounts set out in Sections 2.1 and 2.2 shall be paid to you in
a lump sum payment within 30 days of your Involuntary Termination, except for the RRSP payments
described in Section 2.1(c) and 2.2(d), which will be payable in accordance with the terms of your
Employment Agreement in the same manner as if you were employed throughout the Severance Period.

2.4 No Duplication. The Company agrees that an Involuntary Termination by you, as defined
in subsection 1.1(e)(ii), shall constitute a termination of your employment by the Company without
cause pursuant to your Employment Agreement and any other agreement in effect between you and the
Company. In the event that the severance payment and other compensation provisions set out in
Sections 2.1 and 2.2 of this Letter Agreement and the severance payment provisions in your
Employment Agreement with the Company are both applicable, you agree that, upon the Company’s
request, you shall give written notice to the Company with respect to which agreement you wish to
be paid out under and that you shall not be entitled to severance pay under both agreements.

2.5 Options. Upon the occurrence of an Involuntary Termination, the provisions of your
Stock Option Agreement(s) with the Company shall govern all stock option issues, including, without
limitation, acceleration of vesting and the time period remaining to exercise any vested options.

2.6 Acknowledgement. In the event of an Involuntary Termination, payment by the Company of
the amounts set out in Sections 2.1 and 2.2 or, if you elect to receive severance under your
Employment Agreement payment of the amounts set out therein, in lieu of receiving a duplicative
payment hereunder, shall be in full and final satisfaction of all amounts that might otherwise be
payable by the Company to you by way of compensation for length of service, damages in lieu of
notice of termination or any other obligations arising under your employment with the Company and
the Company shall have no further obligations, statutory or otherwise, arising out of or in respect
of your employment and you shall execute a complete and general release in the form set out in
Schedule A as an express condition of your right to receive the payments and benefits referred to
in Sections 2.1 and 2.2 or under your Employment Agreement, as the case may be.

2.7 Termination for Cause, Permanent Disability or Death. For greater certainty, if your
employment is terminated for cause, permanent disability or death or you terminate your employment
other than as an Involuntary Termination, you shall not be entitled to payment of the amounts under
this Letter Agreement and the terms of your Employment Agreement with the Company shall govern.

 

 

 

2.8 Waiver of Non-Competition Covenant. Effective upon your Involuntary Termination, the
Company hereby waives any and all rights it has to insist upon compliance with or to enforce any
covenant, undertaking or agreement by you under your Employment Agreement or otherwise, pursuant to
which you have agreed not to compete with the Company in your future employment or otherwise limit
your future employment opportunities. Your obligations of confidentiality to the Company contained
in your Employment Agreement shall remain in full force and effect and are not altered by this
Letter Agreement.

2.9 Right to Waive any and all Consideration. In your discretion, upon your
written request to the Company made within 15 days of your Involuntary Termination, you may elect
to irrevocably waive your right to any of the consideration payable by the Company pursuant to this
Letter Agreement.

PART III

MISCELLANEOUS PROVISIONS

3.1 Term of Agreement. This Letter Agreement shall remain in effect for the term of your
employment with the Company and for a further six month period thereafter, unless the parties
mutually agree to an earlier termination, provided that the expiry or termination of this Letter
Agreement shall not affect the rights and obligations of the parties arising under this Letter
Agreement prior to its termination or expiry.

3.2 Legal Fees. The Company shall pay, to the full extent permitted by law, all legal fees
and expenses which you may reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Company or its successors or Affiliates, you or others of the validity or
enforceability of, or liability under,
any provision of this Letter Agreement or any guarantee of performance thereof (including as a
result of any contest by you about the amount of any payment pursuant to this Letter Agreement).

3.3 Withholding Taxes. The Company may withhold from any amounts payable under this Letter
Agreement such federal, provincial, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

3.4 General Creditor Status. Except as provided by law, the benefits to which you may
become entitled under this Letter Agreement shall be paid, when due, from the general assets of the
Company. Your right (or the right of the executors or administrators of your estate) to receive
any such payments shall at all times be that of a general creditor of the Company and shall have no
priority over the claims of other general creditors of the Company.

3.5 Successors; Binding Agreement. The Company shall require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of its
business and/or assets to assume and agree to perform this Letter Agreement by express written
agreement in the same manner and to the same extent that it would be required to perform it if no
such succession had taken place. Failure of the Company to obtain such assumption and agreement
within 30 days of any such succession shall be a breach of this Letter Agreement and shall entitle
you to compensation from the Company in the same amount and on the same terms as you would be
entitled under this Letter Agreement, except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the date of the Involuntary
Termination.

 

 

 

3.6 Death. Notwithstanding anything else in this Letter Agreement, should you die after
becoming entitled to benefits under this Letter Agreement but before receipt of all benefits to
which you became entitled under this Letter Agreement, then the payment of such benefits shall be
made, on the due date or dates hereunder had you survived, to the executors or administrators of
your estate.

3.7 Governing Law. The provisions of this Letter Agreement shall be governed by and
interpreted in accordance with the laws of the Province of British Columbia and the laws of Canada
applicable to this Letter Agreement. All disputes arising under this Letter Agreement shall be
referred to the Courts of the Province of British Columbia, which shall have exclusive
jurisdiction, unless there is mutual agreement to the contrary.

3.8 Notice. The parties agree that any notice or other communication required to be given
under this Letter Agreement will be in writing and will be delivered personally to the addresses
set forth on page 1 of this Letter Agreement (or, in your case, to the most recent address for you
which the Company has on record), or to such other addresses and persons as may from time to time
be notified in writing by the parties.

3.9 Entire Agreement. This Letter Agreement, the Employment Agreement and any Stock Option
Agreements you have with the Company constitute the entire agreement between the Company and you
with respect to the subject matter hereof, and supersede all previous communications,
understandings and agreements (whether verbal or written) between the Company and you regarding the
subject matter hereof. To the extent that there is any conflict between the provisions of this
Letter Agreement, the Employment Agreement and any Stock Option Agreements between you and the
Company, the following provisions shall apply:

	 	(i)	 	If the conflict is with respect to an event, entitlement or obligation in the
event of a Change of Control, the provisions of this Letter Agreement shall govern
(unless you elect to have those terms in the Employment Agreement apply).

	 
	 	(ii)	 	If the conflict is with respect to an entitlement or obligation with respect
to stock options of the Company, the provisions of the Stock Option Agreements shall
govern (unless you and the Company otherwise mutually agree).

	 
	 	(iii)	 	In the event of any other conflict, the provisions of the Employment
Agreement shall govern (unless you and the Company otherwise mutually agree).

3.10 Severability of Provisions. If any provision of this Letter Agreement as applied to
either party or to any circumstance should be adjudged by a court of competent jurisdiction to be
void or unenforceable for any reason, the invalidity of that provision shall in no way affect (to
the maximum extent permissible by law):

	 	(i)	 	The application of that provision under circumstances different from those
adjudicated by the court;

	 
	 	(ii)	 	The application of any other provision of this Letter Agreement; or

	 
	 	(iii)	 	The enforceability or invalidity of this Letter Agreement as a whole.

If any provision of this Letter Agreement becomes or is deemed invalid, illegal or unenforceable in
any jurisdiction by reason of the scope, extent or duration of its coverage, then the provision
shall be deemed

 

 

 

amended to the extent necessary to conform to applicable law so as to be valid and enforceable or,
if the provision cannot be so amended without materially altering the intention of the parties,
then such provision shall be stricken and the remainder of this Letter Agreement shall continue in
full force and effect.

3.11 Captions. The captions appearing in this Letter Agreement have been inserted for
reference and as a matter of convenience and in no way define, limit or enlarge the scope or
meaning of this Letter Agreement or any provision.

3.12 Amendments. Any amendment to this Letter Agreement shall only be effective if the
amendment is in writing and is signed by the Company and by you.

3.13 Remedies. All rights and remedies provided pursuant to this Letter Agreement or by law
shall be cumulative, and no such right or remedy shall be exclusive of any other. A party may
pursue any one or more rights or remedies hereunder or may seek damages or specific performance in
the event of another party’s breach hereunder or may pursue any other remedy by law or equity,
whether or not stated in this Letter Agreement.

3.14 No Employment or Service Contract. Nothing in this Letter Agreement shall confer upon
you any right to continue in the employment of the Company for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Company or you, which rights are
hereby expressly reserved by each, to terminate your employment at any time in accordance with the
terms of your Employment Agreement.

Please indicate your acceptance of the foregoing provisions of this Letter Agreement by
signing the enclosed copy of this Letter Agreement and returning it to the Company.

	 	 	 	 	 
	QLT INC.

 	 	 
	By:  	/s/ Robert L. Butchofsky
 	 	 
	 	Robert L. Butchofsky 	 	 
	 	President and Chief Executive Officer 	 	 

	 	 	 	 	 
	 
	ACCEPTED AND AGREED TO this 12th day of April, 2010 by:

 
	Signature:  	/s/ Dipak Panigrahi
 	 	 
	 	Dipak Panigrahi 	 	 

 

 

 

SCHEDULE A

FINAL RELEASE

IN CONSIDERATION OF the payments made to me by QLT Inc. (hereinafter called “QLT”) pursuant to that
letter dated                      day of                     , 20      from QLT to me, effective the date of this Release, I,
                                         of                                         
 do hereby remise, release and forever discharge QLT,
having a place of business at 887 Great Northern Way, Suite 101, in the City of Vancouver, Province
of British Columbia, V5T 4T5, its officers, directors, servants, employees and agents, and their
heirs, executors, administrators, successors and assigns, as the case may be, of and from any and
all manner of actions, causes of action, suits, contracts, claims, damages, costs and expenses of
any nature or kind whatsoever, whether in law or in equity, which as against QLT or such persons as
aforesaid or any of them, I have ever had, now have, or at any time hereafter I or my personal
representatives can, shall or may have, by reason of or arising out of my employment with QLT
and/or the subsequent termination of my employment with QLT on or about                                         , 20     , or
in any other way connected with my employment with QLT and more specifically, without limiting the
generality of the foregoing, any and all claims for damages for termination of my employment,
constructive termination of my employment, loss of position, loss of status, loss of future job
opportunity, loss of opportunity to enhance my reputation, the timing of the termination and the
manner in which it was effected, loss of bonuses, loss of shares and/or share options, loss of
benefits, including life insurance and short and long-term disability benefit coverage, and any
other type of damages arising from the above. Notwithstanding the foregoing, nothing in this
Release will act to remise, release or discharge QLT from obligations, if any, which QLT may have
pursuant to any indemnity agreements previously entered into between me and QLT or from any rights
I may have to claim coverage under QLT’s past, current or future director and/or officer insurance
policies, in either case with respect to existing or future claims that may be brought by third
parties.

IT IS UNDERSTOOD AND AGREED that this Release includes any and all claims arising under the
Employment Standards Act, Human Rights Code, or other applicable legislation and that the
consideration provided includes any amount that I may be entitled to under such legislation.

IT IS FURTHER UNDERSTOOD AND AGREED that this Release is subject to compliance by QLT with the said
conditions as stipulated in the aforementioned letter from QLT.

 

 

 

IT IS FURTHER UNDERSTOOD AND AGREED THAT QLT will withhold and remit income tax and other statutory
deductions from the aforesaid consideration and I agree to indemnify and hold harmless QLT from any
further assessments for income tax, repayment of any employment insurance benefits received by me,
or other statutory deductions which may be made under statutory authority.

IT IS FURTHER UNDERSTOOD AND AGREED that this is a compromise and is not to be construed as an
admission of liability on the part of QLT. The terms of this Release set out the entire agreement
between QLT and me with respect to the matters described herein and are intended to be contractual
and not a mere recital.

IT IS FURTHER UNDERSTOOD AND AGREED that I will keep the contents of this settlement and all
communication relating thereto confidential except to Revenue Canada or as is required to obtain
legal and tax advice, or to enforce my rights hereunder in a court of law, as is required by law.

IT IS FURTHER UNDERSTOOD AND AGREED that the consideration described herein was voluntarily
accepted by me for the purpose of making a full and final settlement of all claims described above
and that prior to agreeing to the settlement, I was advised by QLT of my right to receive
independent legal advice.

IN WITNESS WHEREOF this Release has been executed effective the            day of                     , 20     .

	 	 	 	 	 	 	 
	SIGNED, SEALED AND DELIVERED)
	 	 	 	 	 	 
	By                     in the presence of:)
	 	 	 	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 

	 

	 	 	)	 	 	Dipak Panigrahi
	Name

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Address

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Occupation

	 	 	)

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