Document:

Prepared by R.R. Donnelley Financial -- EX-10.7

 Exhibit 10.7 

XENON PHARMACEUTICALS INC. 

AMENDED AND RESTATED STOCK OPTION PLAN 
  

	1.	PURPOSE OF THE PLAN 

 Xenon Pharmaceuticals Inc. (“Xenon”) hereby
establishes a stock option plan for directors, officers and Service Providers (as defined below) of Xenon, to be known as the “Xenon Pharmaceuticals Stock Option Plan” (the “Plan”). The purpose of the Plan is to give directors,
officers and Service Providers, as additional compensation, the opportunity to participate in the progress of Xenon by granting to such individuals options, exercisable over a period of 10 years, to buy shares of Xenon at a price equal to the market
price prevailing on the date the option is granted. 
  

	2.	DEFINITIONS 

 In this Plan, the following terms shall have the following
meanings: 
  

	2.1	“Associate” means an associate as defined in the Securities Act (British Columbia). 

  

	2.2	“Board” means the board of directors of Xenon. 

  

	2.3	“Blackout Period” means any period during which an Optionee is prevented from trading the Shares pursuant to a policy of Xenon, including but not limited to Xenon’s insider trading policy, as amended and
in force from time to time, any lockup or similar agreement described in the first registration statement that is filed by Xenon and declared effective pursuant to Section 12(g) of the Exchange Act with respect to any class of Xenon’s
securities, and any lockup or similar agreement between Xenon and a third party restricting the trading of Shares; 

  

	2.4	“Business Day” means a day, other than Saturday, Sunday and any other day which is a statutory holiday in British Columbia, Canada or New York, U.S.A; 

 

	2.5	“Disability” means any disability with respect to an Optionee which the Board, in its sole and unfettered discretion, considers likely to prevent permanently the Optionee from: 

 

	 	(a)	being employed or engaged by Xenon, in a position the same as or similar to that in which he was last employed or engaged by Xenon; or 

 

	 	(b)	acting as a director or officer of Xenon. 

  

	2.6	“Exchange Act” means the United States Securities Exchange Act of 1934, as amended. 

  

	2.7	“Exchanges” means any stock exchange on which the Shares are listed at the time. 

  

	2.8	“Expiry Date” means the date set by the Board under section 3.1 of the Plan, as the last date on which an Option may be exercised. 

  
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	2.9	“Grant Date” means the date specified in an Option Agreement as the date on which an Option is granted. 

  

	2.10	“Xenon” means Xenon Pharmaceuticals Inc. and its successors. 

  

	2.11	“Insider” means: 

  

	 	(a)	an Insider as defined in the Securities Act (British Columbia), other than a person who is an Insider solely by virtue of being a director or senior officer of a subsidiary of Xenon; and 

 

	 	(b)	an Associate of any person who is an Insider under subsection (a). 

  

	2.12	“Market Price” of Shares at any Grant Date means: 

  

	 	(a)	if the Shares are listed and posted for trading on an Exchange, the closing price per Share on such Exchange (or, in the event that the Shares are listed on more than one Exchange, on such Exchange on which Shares are
listed as is selected for the purpose by the Board) for the last day Shares were traded prior to the Grant Date; 

  

	 	(b)	if the Shares are not listed on any Exchange, but are quoted on an over-the-counter market, the price per Share on the over-the-counter market determined by dividing the aggregate sale price of the Shares sold by the
total number of such Shares so sold on the applicable market for the last day prior to the Grant Date; or 

  

	 	(c)	if the Shares are not listed and posted for trading on a stock exchange or over-the-counter market, the price per Share as determined from time to time by the Board. 

 

	2.13	“Option” means an option to purchase Shares granted pursuant to this Plan. 

  

	2.14	“Option Agreement” means an agreement, in the form attached hereto as Schedule A, whereby Xenon grants to an Optionee an Option. 

 

	2.15	“Optionee” means each of the directors, officers and Service Providers granted an Option pursuant to this Plan and their heirs, executors and administrators. 

 

	2.16	“Option Price” means the exercise price per Share specified in an Option Agreement, adjusted from time to time in accordance with the provisions of subsection 3.1 and section 6. 

 

	2.17	“Option Shares” means the aggregate number of Shares which an Optionee may purchase under an Option. 

  
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	2.18	“Plan” means this Xenon Pharmaceuticals Stock Option Plan. 

  

	2.19	“Shares” means the common shares in the capital stock of Xenon as constituted on the date of this Plan provided that, in the event of any adjustment pursuant to section 6, “Shares” shall thereafter
mean the shares or other property resulting from the events giving rise to the adjustment. 

  

	2.20	“Service Provider” means: 

  

	 	(a)	an employee or Insider of Xenon; 

  

	 	(b)	any other person or company engaged to provide ongoing, management or consulting services for Xenon or for any entity controlled by Xenon; and 

 

	 	(c)	any person who is providing ongoing management or consulting services to Xenon or to any entity controlled by Xenon indirectly through a company that is a Service Provider under subsection 2.18(b). 

 

	2.21	“Unissued Option Shares” means the number of Shares, at a particular time, which have been allotted for issuance upon the exercise of an Option but which have not been issued, as adjusted from time to time in
accordance with the provisions of section 6, such adjustments to be cumulative. 

  

	3.	GRANT OF OPTIONS 

  

	3.1	Option Terms 

 The Board may from time to time authorize the issue of Options to
directors, officers and Service Providers of Xenon having such terms and conditions as the Board in its discretion deems consistent with the Plan. The Option Price under each Option shall be the Market Price on the Grant Date. The Expiry Date for
each Option shall be set by the Board at the time of issue of the Option and shall be 10 years after the Grant Date. Options shall not be assignable by the Optionee. 
  

	3.2	Limits on Shares Issuable on Exercise of Options 

 The maximum number of Options (and the
corresponding Option Shares issuable upon exercise of such Options) which from time to time may be reserved for issue under the Plan shall not exceed 7,800,000. For clarification, in determining at any time whether the maximum number of Options (or
corresponding Option Shares) issuable under the Plan is reached, any Option that has been granted and exercised shall not be relevant or included in such determination. 

  
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	3.3	Option Agreements 

 Each Option shall be confirmed by the execution of an Option
Agreement setting out the terms and conditions of such Option as determined by the Board in accordance with section 3.1. Each Optionee shall have the option to purchase from Xenon the Option Shares at the time and in the manner set out in the Plan
and in the Option Agreement applicable to that Optionee. The execution of an Option Agreement shall constitute conclusive evidence that it has been completed in compliance with this Plan. 

 

	4.	EXERCISE OF OPTION 

  

	4.1	Manner of Exercise 

  

	 	(a)	The Option shall be exercisable by delivering to Xenon a notice specifying the number of Shares in respect of which the Option is exercised together with payment in full for each such Share. Upon notice and payment
there will be a binding contract for the issue of the Shares in respect of which the Option is exercised, upon and subject to the provisions of the Plan. 

  

	 	(b)	The Board will determine the acceptable form of consideration for exercising an Option, including the method of payment. Such consideration may consist entirely of: (A) cash; (B) cheque; (C) other Shares,
provided that such Shares have a Market Price on the date of surrender equal to the aggregate exercise price of the Option Shares as to which such Option will be exercised and provided that accepting such Shares will not result in any adverse
accounting consequences to Xenon, as the Board determines in its sole discretion; (D) consideration received by Xenon under a broker-assisted (or other) cashless exercise program (whether through a broker or otherwise) implemented by
Xenon in connection with the Plan; (E) by net exercise; (F) such other consideration and method of payment for the issuance of Shares to the extent permitted by the applicable securities laws and all applicable rules and regulations of all
regulatory authorities to which Xenon is subject; or (G) any combination of the foregoing methods of payment. 

  

	4.2	General Rule 

 Subject to section 4.3 and to the terms of the Option regarding vesting,
if any, an Option may be exercised to purchase any number of Shares up to the number of Unissued Option Shares at any time after the Grant Date up to 5:00 p.m. Vancouver time on the Expiry Date. 

  
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	4.3	Termination of Affiliation 

 If an Optionee ceases to be a director, officer or Service
Provider of Xenon, each Option held by the Optionee and granted under the Plan shall be exercisable as follows: 
  

	 	(a)	Death 

 If the Optionee ceases to be a director, officer or Service Provider of Xenon
due to death or Disability or, in the case of an Optionee that is a company, the death or Disability of the person who provides management or consulting services to Xenon or to any entity controlled by Xenon, each Option held by the Optionee shall
be exercisable at any time up to but not after the earlier of the Expiry Date of that Option and the date which is 365 days after the date of death or Disability; 
  

	 	(b)	Termination or Voluntary Resignation 

 Subject to subsections 4.3(c), 4.3(d) and 4.3(e)
below, if an Optionee (or, in the case of an Optionee who satisfies the definition of “Service Provider” set out in subsection 2.18(c), the Optionee’s employer) ceases to be employed or engaged by Xenon or voluntarily resigns or
retires as a director, officer or Service Provider, each Option held by the Optionee shall be exercisable: 
  

	 	(i)	subject to subsection 4.3(b)(ii) below, at any time up to but not after the earlier of the Expiry Date of that Option and the date which is ninety (90) days after the Optionee ceases to be employed or engaged by
Xenon or voluntarily resigns or retires as a director, officer or Service Provider; or 

  

	 	(ii)	in the case of an Optionee that is a director of Xenon and not otherwise employed or engaged as an officer or Service Provider of Xenon, at any time up to but not after the earlier of the Expiry Date of that Option and
the date which is twenty-four (24) months after the Optionee ceases to be a director of Xenon; 

  

	 	(c)	Termination for Cause 

 Subject to subsection 4.3(e) below, in the event that an
Optionee’s employment or engagement is terminated by Xenon for “cause” (as determined by Xenon in its sole discretion), any Options held by such Optionee shall be exercisable at any time up to but not after 5:00 p.m. Vancouver time on
the date of termination of such Optionee’s employment or engagement by Xenon; 
  

	 	(d)	Exercise Period if Xenon Becomes a “Public” Company 

 Subject to subsection
4.3(e) below, in the event Xenon becomes a reporting issuer in any jurisdiction in Canada, or becomes a registrant with the United States Securities and Exchange Commission, the option exercise periods described in subsections 4.3(b)(i) and
4.3(b)(ii) above shall each be ninety (90) days after such Optionee ceases to be employed or engaged by Xenon or voluntarily resigns or retires as a director, officer or Service Provider; and 

  
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	 	(e)	Board may Extend Exercise Period 

 Notwithstanding any other provision of the Plan, the
board of directors of Xenon may, at any time prior to the Expiry Date of an Option granted under the Plan, extend the period of time within which an Optionee may exercise such Option in the event such Optionee ceases to be a director, officer or
Service Provider, provided that, except as provided in Section 4.4 below, any such extension shall not exceed the original Expiry Date of such Option. 
  

	4.4	Blackout Periods 

 Notwithstanding any other provision in this Article 4, if the expiry
of an Option pursuant to Section 4.2, 4.3(a), 4.3(b), 4.3(d) or 7.2(c) occurs during a Blackout Period applicable to the Optionee or within five Business Days after the last day of a Blackout Period applicable to the Optionee, the expiry
date for the Option will be the last day of such five Business Day period, provided, however, that the extension in this section 4.4 shall be applied to any Option held by an Optionee who is a U.S. taxpayer only to the extent that it would not
violate Section 409A of the U.S. Internal Revenue Code of 1986, as amended. 
  

	4.5	Exclusion From Severance Allowance, Retirement Allowance or Termination Settlement 

 If
the Optionee, or, in the case of an Option granted to an Optionee who falls under the definition of Service Provider set out in subsection 2.18(c), the Optionee’s employer, retires, resigns or is terminated from employment or engagement with
Xenon, the loss of any right to purchase Shares pursuant to sections 4.3, 5, 6 or 7 shall not give rise to any right to damages and shall not be included in the calculation of nor form any part of any severance allowance, retiring allowance or
termination settlement of any kind whatever in respect of such Optionee. 
  

	5.	THIRD PARTY OFFER 

 Subject to section 7, at any time when an Option granted under
the Plan remains unexercised with respect to any Option Shares, an offer to purchase all of the issued and outstanding Shares is made by a third party, Xenon may, upon giving each Optionee written notice to that effect, require the acceleration of
the time for the exercise of the unexercised Options granted under the Plan and of the time for the fulfilment of any conditions or restrictions on such exercise. 
  

	6.	ALTERATIONS IN OPTION SHARES 

 Subject to section 7, in the event of a stock
dividend, subdivision, redivision, consolidation, share reclassification, amalgamation, merger, consolidation, corporate arrangement, reorganization, liquidation or the like of or by Xenon, the Board may, subject to any required prior regulatory
approval, make adjustments, if any, to the number of Option Shares that may be purchased upon exercise of unexercised Options or to the Option Price therefor, or both, as it shall deem appropriate and may amend the Option Agreements relating to
those 

  
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Options to give effect to such adjustments and may adjust the maximum number of Option Shares available under the Plan as may be appropriate. If because of a proposed merger, amalgamation or
other corporate arrangement or reorganization, the exchange or replacement of Option Shares for shares or other securities in another company is imminent, the Board of Directors may, in a fair and equitable manner and subject to prior regulatory
approval, determine the manner in which all unexercised Options granted under the Plan shall be treated including, for example, requiring the acceleration of the time for the exercise of such Options by the Optionees and of the time for the
fulfilment of any conditions or restrictions on such exercise. 
  

	7.	CHANGE OF CONTROL 

  

	7.1	Definitions 

 In this section, the following terms shall have the following meanings:

  

	 	(a)	“Cause” means conduct by a Departing Service Provider that is finally determined (after all rights of appeal have been exhausted or have expired) by a court of competent jurisdiction to be, or is agreed in
writing by such person to be, conduct that would absent any contrary express agreement entitle Xenon to terminate the Departing Service Provider’s employment or engagement with Xenon without any notice or compensation in lieu thereof.

  

	 	(b)	“Change of Control” means 

  

	 	(i)	a dissolution, liquidation or sale of all or substantially all of the assets of Xenon; 

  

	 	(ii)	a merger, consolidation, amalgamation, arrangement or reorganization in which Xenon is not the surviving corporation; 

  

	 	(iii)	a reverse merger in which Xenon is the surviving corporation but the Shares outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash
or otherwise; or 

  

	 	(iv)	the acquisition by any person, entity or group within the meaning of Section 13(d) of the Exchange Act, or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or
maintained by Xenon) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of Xenon representing at least 35% of the combined voting power entitled to vote in
the election of directors. 

  
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	 	(c)	“Departing Service Provider” means a director, officer or Service Provider of Xenon (or, in the case of a person who satisfies the definition of Service Provider set out in subsection 2.18(c), such
person’s employer) who has ceased to be employed or engaged by Xenon as a result of termination by Xenon or the resignation or retirement of such Service Provider. 

 

	 	(d)	“Good Reason” means any of the following: 

  

	 	(i)	without the express written consent of the Departing Service Provider, any change or series of changes in the responsibilities or status of the Departing Service Provider with Xenon, such that immediately after such
change or series of changes the responsibilities and status of the Departing Service Provider, taken as a whole, and taking into account the size and complexity of the business of Xenon, are not at least substantially equivalent to those assigned to
him immediately prior to such change or series of changes, except in connection with a termination of the Departing Service Provider’s employment or engagement by Xenon for Cause; or 

 

	 	(ii)	a reduction by Xenon in the Departing Service Provider’s annual salary as in effect prior to the Change of Control; or 

  

	 	(iii)	the taking of any action by Xenon, or the failure by Xenon to take any action, that would materially adversely affect the Departing Service Provider’s participation in, or materially reduce the Departing Service
Provider’s benefits under, the package of incentive, bonus, compensation, pension, life insurance, health, accident disability and other similar plans in which the Departing Service Provider is participating prior to the Change of Control, or
the taking of any action by Xenon, or the failure by Xenon to take any action, that would deprive the Departing Service Provider of any material fringe benefit or perquisite enjoyed by the Departing Service Provider prior to the Change of Control;
or 

  

	 	(iv)	 the requirement that the Departing Service Provider be based anywhere other than Xenon’s principal offices or locations in Vancouver and Burnaby,
British Columbia (or, if the Departing Service Provider is presently based at Xenon’s offices at another place, the requirement that the Departing Service Provider be based anywhere other than such offices at such place) or the requirement that
the Departing Service Provider travel on Xenon’s business to an extent that is not substantially consistent with the Departing Service Provider’s travel obligations prior to the Change of Control, or in the event the Departing Service
Provider consents to any such relocation, the failure by Xenon to pay (or reimburse the Departing Service Provider for) all reasonable moving expenses incurred by the Departing Service Provider or to indemnify the Departing

  
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Service Provider against any excess in (1) the cost of a principal residence in the new location which is comparable to the Departing Service Provider’s principal residence at the time
of relocation, over (2) the amount realized by the Departing Service Provider upon the sale of his principal residence at the time of the relocation; or 

  

	 	(v)	the failure of Xenon to obtain from a Successor Corporation that acquires all or substantially all of the business and/or assets of Xenon the agreement in favour of the Departing Service Provider contemplated by section
7.3; or 

  

	 	(vi)	any reason which would be considered to amount to constructive dismissal by a court of competent jurisdiction; 

but “Good Reason” shall not have occurred or exist by reason only of a request by Xenon to the Departing Service Provider to remain
with Xenon for up to three months after a Change of Control, to assist in the transition resulting from the Change of Control, where there is no other event or omission that would constitute “Good Reason” according to
subsections 7.1(d)(i),(ii),(iii),(iv),(v) or (vi) above. 
  

	 	(e)	“Successor Corporation” means, in connection with a Change of Control, the surviving or acquiring corporation. 

  

	7.2	Change of Control 

 Notwithstanding the provisions of sections 5 and 6, in the event of a
Change in Control: 
  

	 	(a)	any Successor Corporation shall assume Xenon’s obligations in respect of all outstanding Options or shall deliver to each holder of Options, in substitution for such Options, options to purchase securities of such
Successor Corporation (“Successor Options”) equivalent in value to such holder’s Options; or 

  

	 	(b)	in the event that a Successor Corporation does not assume Xenon’s obligations in respect of outstanding Options or substitute Successor Options in exchange for such Options: 

 

	 	(i)	the vesting of all Options held by persons who are directors, officers or Service Providers at the time of such Change of Control, and the time during which such Options may be exercised, shall be accelerated prior to
completion of the Change of Control and, unless exercised after such acceleration and prior to completion of the Change of Control, such Options shall be terminated; and 

  
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	 	(ii)	all outstanding Options held by persons who are not directors, officers or Service Providers at the time of such Change of Control shall be terminated unless exercised prior to the Change of Control. 

 

	 	(c)	In addition to subsections 7.2 (a) and (b) above, any Options or Successor Options held by a director, officer or Service Provider shall immediately become fully vested, and exercisable in accordance with
Article 4 herein, in the event that, within 12 months following completion of a Change of Control, such director, officer or Service Provider becomes a Departing Service Provider by reason of (1) a termination of such director, officer or
Service Provider (or, in the case of an Option or Successor Option held by a person who satisfies the definition of Service Provider set out in subsection 2.18(c), the termination of such person’s employer) by Xenon or the Successor Corporation
other than for Cause or (2) resignation or retirement by such director, officer or Service Provider (or, in the case of an Option or Successor Option held by a person who satisfies the definition of Service Provider set out in subsection
2.18(c), resignation of such person’s employer) for Good Reason. 

  

	7.3	Binding on Successor Corporations 

 Xenon will require any Successor Corporation (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of 
 Xenon, by agreement in
favour of each person who is a director, officer or Service Provider at the time of a Change of Control to expressly assume and agree to observe and perform all the obligations of Xenon that would be required to be observed or performed by Xenon in
the event that within 12 months of completion of the Change of Control that led to such successorship, such person becomes a Departing Service Provider. For the purposes of this section 7, “Xenon” shall mean Xenon as herein before defined
and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this section or which otherwise becomes bound by all the terms and provisions of the Plan by operation of law. 

 

	8.	MISCELLANEOUS 

  

	8.1	Form of Notice 

 A notice given to Xenon shall be in writing, signed by the Optionee and
delivered to the Secretary of Xenon. 
  

	8.2	Right to Employment 

 Neither this Plan nor any of the provisions hereof shall affect in
any way the Optionee’s right to continued employment with Xenon or Xenon’s right to terminate such employment. 

  
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	8.3	Amendment and Waiver 

 Xenon may from time to time amend any provisions of the Plan,
subject to prior regulatory approval where required, but no such amendment can impair any of the rights of any Optionee under any Option then outstanding. 
  

	8.4	No Assignment 

 No Optionee may assign any of his rights under the Plan. 

 

	8.5	Conflict 

 In the event of any conflict between the provisions of this Plan and an Option
Agreement, the provisions of this Plan shall govern. 
  

	8.6	Time of Essence 

 Time is of the essence of this Plan and of each Option Agreement. No
extension of time will be deemed to be or to operate as a waiver of the essentiality of time. 
  

	8.7	Entire Agreement 

 This Plan and the Option Agreement sets out the entire agreement
between Xenon and the Optionees relative to an Option and supersedes all prior agreements, undertakings and understandings, whether oral or written. 

  
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 SCHEDULE A 

XENON PHARMACEUTICALS INC. 

STOCK OPTION PLAN - OPTION AGREEMENT 

This Option Agreement is entered into between Xenon Pharmaceuticals Inc. (“Xenon”) and the Optionee named below pursuant to the
Xenon Stock Option Plan (the “Plan”), a copy of which is attached hereto, and confirms that: 
  

	1.	on — (the “Grant Date”); 

  

	2.	— (the “Optionee”); 

  

	3.	was granted the option to purchase — Common Shares (the “Option Shares”) of Xenon; 

 

	4.	for the price (the “Option Price”) of $— per share; 

  

	5.	vesting over a — year term as follows: —; 

 

	6.	all fully-vested options are exercisable, in whole or in part, up to — (the “Expiry Date”) 

all on the terms and subject to the conditions set out in the Plan. 

By signing this Option Agreement, the Optionee acknowledges that the Optionee has read and understands the Plan and agrees to the terms and
conditions of the Plan and this Option Agreement. 
 IN WITNESS WHEREOF the parties have executed this Option Agreement as of the
            day of             , 20        . 

 

			
	XENON PHARMACEUTICALS INC.
		
	By:	 	  

		 	Simon N. Pimstone
		 	President & CEO
		
	By:	 	  

		 	—

  
 12Prepared by R.R. Donnelley Financial -- EX-10.9

 
  
 

 
  
  
  

 
 XENON 

PHARMACEUTICALS INC. 
 3650 Gilmore Way 

Burnaby, BC 
 Canada V5G 4W8 

T 604-484-3300 
 F 604-484-3450 

www.xenon-pharma.com 

			
		  	

 

 Exhibit 10.9 
  

 
 October 3, 2014 

Confidential 
 Via Electronic Mail 

Simon N. Pimstone 
 c/o Xenon Pharmaceuticals Inc. 

3650 Gilmore Way 
 Burnaby, BC V5G 4W8 

Dear Simon, 
 Re: Offer of Continued Employment 

We are pleased to offer you continued employment with Xenon Pharmaceuticals Inc. (the “Company”), on the terms and conditions herein, and in
consideration for the change of control protections provided to you by the Company. This Agreement will replace and supersede your existing employment agreement in its entirety; please read it carefully. If you wish to accept the terms herein,
please execute and return this agreement to me today (the “Effective Date”). 
 As of the Effective Date, you will continue to be engaged
by the Company in the full-time position of President & CEO. 
 A. Base Salary. As of the Effective Date, you will continue to earn a base
salary of $392,202 per year, less statutory and other applicable deductions as required, for all work and services you perform for the Company (the “Base Salary”). The Base Salary is payable semi-monthly in arrears in accordance
with the Company’s applicable payroll policies. 
 B. Annual Discretionary Bonus. In addition to your Base Salary, you are eligible to earn an
annual discretionary bonus of up to 50% percent of your Base Salary, less statutory and other applicable deductions as required, for each completed calendar year of service. You will be eligible for this bonus in respect of the full 2014 calendar
year without regard to the Effective Date. The payment and amount of the annual bonus is within the sole discretion of the Board of Directors (the “Board”) and will be evaluated in January of each year in relation to the achievement
of corporate and personal objectives. Such objectives will be established annually by the Board in its sole discretion. If you work the entire bonus year, you will be eligible for an annual discretionary bonus determined in the ordinary course using
relevant criteria in a manner consistent with prior practice, even if the Company terminates your employment after the bonus year prior to the payment of the annual bonuses. 

C. Annual Review. Your compensation package, including your salary and bonus percentage, will continue to be reviewed annually; any adjustment to the
same is at the sole discretion of the Company provided that the Base Salary will not be reduced without your consent and subject to Sections L and M of this Agreement. 

D. Expense Reimbursement. In accordance with its expense policy as amended from time to time, the Company will reimburse any authorized expenses
actually and reasonably incurred in the course of performing your employment 

 

  

					
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duties. The Company will also provide to you, for the duration of your employment, any necessary work tools, such as a laptop computer and mobile phone. Subject to approval by the Company, you
will also be reimbursed for out-of-pocket expenses incurred for attending courses or workshops related to your employment duties. 
 E. Reporting
Structure/Responsibilities. You will report to the Board of Directors of the Company (the “Board”). You will continue to perform the responsibilities and duties of your position, and subject to Sections L and M such other
responsibilities and duties as may be requested by the Board from time to time. You will at all times continue to: (i) conform to the reasonable and lawful directions of the Company and the Board; (ii) adhere to all applicable Company
policies; (iii) give the Company the full benefit of your knowledge, expertise, skill and ingenuity; (iv) well and faithfully serve the Company; (v) devote your best efforts to furthering the interests of the Company; and
(vi) exercise the degree of care, diligence and skill that a prudent executive would exercise in comparable circumstances. 
 You will not during your
employment with the Company, be employed by, or provide products or services of any nature whatsoever to, any other person, company, organization or other entity without prior written permission from the Company. This does not restrict you from
performing reasonable volunteer activities; however, you must obtain the consent of the Company if you wish serve on a board of directors or advisory board, or if you perform any paid work or services for another organizations. Schedule A contains a
description of all such appointments and positions that you currently occupy, and all paid work and services you currently provide to outside organizations, to which the Company confirms that it has provided, and continues to provide, at its
discretion, its permission. 
 F. Vacation and Sick Days. In accordance with the Company’s policies, you will earn twenty (20) days of
vacation per calendar year on a pro rata basis, and accrue five (5) sick days per calendar year on a pro rata basis. You must take your vacation within twelve (12) months of it being earned. Unused sick days will not be paid out at the end
of the calendar year and may not be carried over. 
 G. Non-Disclosure, Non-Solicitation & Non-Competition Agreement. As a condition of
entering into this agreement, you must enter into the enclosed Employee Non-Disclosure, Non-Solicitation and Non-Competition Agreement. Please note that this agreement also deals with confidentiality and the ownership of intellectual property
developments. By entering into this agreement, you are agreeing that compliance with its provisions is reasonable and a necessary requirement in our highly competitive industry, and may be required by our agreements with our suppliers, customers,
and distributors. 
 H. Stock Options. You will be eligible to participate in (i) the Company’s Amended and Restated Stock Option Plan (the
“Current SOP”), a current copy of which is enclosed with this Agreement, and (ii) if implemented, the 2014 Equity Incentive Plan that the Company is planning to adopt in connection with an initial public offering of the Company
under the US Securities Exchange Act of 1934 (the “2014 EIP”), a current copy of which is enclosed with this Agreement, each as amended from time to time (together referred to as the “Stock Option Plan”).
Nothing in this Agreement will affect in any way the stock options granted to you by the Company to date, all of which will, except as expressly provided in this

 

  

					
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Agreement, continue to vest and be exercisable in accordance with the terms of the Company’s grant and the applicable stock option plan of the Company (all applicable prior stock option
plans, and the Stock Option Plan, are referred to as the “Stock Option Plans”). 
 I. Benefits. You will be eligible to continue to
participate in the Company’s employee group benefit plans as offered to the Company’s executives, and as amended, from time to time, subject to the Company’s policies, eligibility rules, and the terms established by the service
providers, as amended from time to time. You will be eligible to continue to participate in the Company’s current Group RRSP Plan, under which the Company will pay you the greater of (i) an amount equal to your annual RRSP contributions or
(ii) 5% of your Base Salary, provided that the Company will pay the portion equal to your RRSP annual contribution limit directly to your RRSP account and the balance directly to you, less applicable withholdings and deductions (the
“RRSP Contributions”). 
 J. Taxes. Any taxes, withholdings and premiums applicable to your employment compensation package with the
Company will be deducted and remitted to the appropriate authorities and service providers in accordance with the Company’s standard policies and the law. 

K. Insurance and Indemnification. As an officer of the Company, you will be covered by its Directors’ and Officers’ Liability Insurance
Policy, subject to the terms of the policy and any amendments made from time to time at the Board’s discretion. Your coverage under such insurance policy will continue after your employment ends, in respect of your employment, subject to the
terms of the policy. 
 L. Change of Control. In this Agreement: 
  

	a.	“Average Bonus” means an amount that is (i) the sum of the annual bonus awards (expressed as a percentage of the applicable year’s Base Salary) that you earned in each of the three
(3) completed calendar years preceding the date your employment with the Company terminates, divided by (ii) three (3), multiplied by (iii) your Base Salary at the time your employment with the Company terminates [for example (15% +
5% + 10%) /3 = 10% of Base Salary]. 

  

	b.	“Change of Control” means: 

  

	 	(i)	the acquisition by any person or persons acting jointly or in concert (as determined by the Securities Act) (“Person”), whether directly or indirectly, of voting securities of the Company that,
together with all other voting securities of the Company held by such Person, constitute in the aggregate more than 50% of all outstanding voting securities of the Company; provided, however, that for purposes of this subsection, the acquisition of
additional securities by any one Person, who owns more than 50% of all outstanding voting securities of the Company will not be a Change of Control; 

  

	 	(ii)	 an amalgamation, arrangement or other form of business combination of the Company with another corporation that results in the holders of voting
securities of that other corporation holding, in the aggregate, more than 50% of all outstanding voting securities of the corporation resulting from the

 

  

					
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business combination; provided, however, that for purposes of this subsection, the acquisition of additional securities by any one Person, who owns more than 50% of all outstanding voting
securities of the Company will not be a Change of Control; or 

  

	 	(iii)	a change in the ownership of a substantial portion of the Company’s assets, including the sale, lease, transfer or exchange of a substantial portion of the Company’s assets, to another Person, other than in
the ordinary course of business of the Company, which occurs on the date that such Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets
from the Company that have a total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided,
however, that for purposes of this subsection (iii), the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to a Related Entity, or (B) a transfer of assets by the
Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity of which the Company has Control, (3) a Person, that owns, directly
or indirectly, fifty percent (50%) or more of the all outstanding voting securities of the Company, or (4) an entity of which a Person described in this subsection (iii)(B)(3) has Control. For purposes of this subsection (iii), gross
fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets; 

provided, however, that a Change in Control will not be deemed to have occurred if such Change in Control results solely from the issuance, in
connection with a bona fide public offering, financing or series of financings by the Company, of voting securities of the Company or any rights to acquire voting securities of the Company which are convertible into voting securities. 

Further and for the avoidance of doubt, a transaction will not constitute a Change of Control if: (x) its sole purpose is to change the
state or jurisdiction of the Company’s incorporation, or (y) its sole purpose is to create a holding company the voting securities of which will be owned in substantially the same proportions by the persons who held the Company’s
voting securities immediately before such transaction. 
  

	c.	“Good Reason” means any of the following occurring within twelve (12) months after the occurrence of a Change of Control: 

 

	 	(i)	any unilateral change or series of adverse changes to your employment responsibilities, reporting relationship or status within the Company, such that immediately after such a change or series of adverse changes to your
responsibilities, reporting relationship and status, taken as a whole, and taking into account the size and complexity of the business of the Company at that time, are substantially less than those assigned to you immediately prior to such change or
series of adverse changes; or 

 

  

					
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	 	(ii)	a material reduction by the Company in your Base Salary or other compensation as in effect prior to the Change of Control that would constitute a constructive dismissal at common law; or 

 

	 	(iii)	the taking of any action by the Company, or the failure by the Company to take any action, that would materially adversely affect your participation in, or materially reduce your aggregate benefits under, the total
package of incentive, bonus, compensation, RRSP, life insurance, health, accident disability and other similar plans in which you are participating prior to the action by the Company or the failure by the Company to take any action; or

  

	 	(iv)	the unilateral requirement that you relocate anywhere outside Metro Vancouver (or, if based at the Company’s offices in another place, the requirement that you relocate somewhere else) where the new location you
are required to report to is either not in Canada or both (i) more than 60 kilometers from your previous work location and (ii) more than 60 kilometers from your primary residence; or 

 

	 	(v)	failure or refusal of the Successor Company to offer you terms and conditions of employment, including the provisions of Section M of this Agreement, that are substantially the same as the provisions of this Agreement;

  

	 	(vi)	subject to the terms of this Agreement, any reason which would be considered to amount to constructive dismissal by an arbitrator under the laws applicable in British Columbia; or 

 

	 	(vii)	termination of your employment without cause by the Company or a Successor Company, 

 provided
that any change or series of in reporting relationship alone will not constitute good reason. 
  

	d.	“Successor Company” means, in connection with a Change of Control, the surviving or acquiring company or entity. 

M. Good Reason in Connection With or Following Change of Control: In the event of Good Reason, where the Good Reason occurs: 

 

	a.	prior to the Change of Control but is related or connected to the Change of Control; or 

  

	b.	within twelve (12) months of the date of the Change of Control, 

 then your employment will end on the
date it is terminated by the Company or Successor Company or the date terminated by you for Good Reason, in which case the Company or Successor Company will provide you with the following: 

 

	a.	twelve (12) months’ Base Salary, plus one (1) additional month of Base Salary for every year of consecutive service with the Company and Successor Company including service prior to the Effective Date, up
to a combined maximum of eighteen (18) months (the “Payment Period”); 

 

  

					
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	b.	payment of your Average Bonus pro-rated for the period of the bonus year you actually worked, less statutory and other applicable deductions as required, payable within four (4) weeks of the termination date
provided that if a bonus has not yet been determined for the preceding completed calendar year, the Company or Successor Company will first make that determination in the ordinary course using relevant criteria in a manner consistent with prior
practice so that the Average Bonus can then be determined and paid in accordance with this provision; 

  

	c.	the RRSP Contributions the Company or Successor Company would have paid on your behalf during the Payment Period and, if unpaid, for the period earned and accrued up to the termination of your employment;

  

	d.	notwithstanding any provision in the Stock Option Plans to the contrary: 

  

	 	(i)	immediate vesting of all unvested stock options and other deferred compensation awards already granted to you by the Company or the Successor Company; 

 

	 	(ii)	with respect to stock options granted pursuant to the Current SOP and any prior stock option plan, continued exercise rights up to ninety (90) days after the end of the Payment Period, at which time such rights
will be null and void; and 

  

	 	(iii)	with respect to stock options and other deferred compensation granted pursuant to the 2014 EIP and any subsequent deferred compensation plan, continued exercise rights for the longer of the period stipulated in the
applicable plan or grant and 6 months from the termination of your employment. 

  

	e.	subject to the applicable insurer’s terms of coverage, the Company or Successor Company will arrange for you to continue to receive group benefits insurance coverage up to the earlier of (i) the end of the
Payment Period, or (ii) the date you commence full-time employment. In the event the insurer does not continue coverage, the Company will pay you an amount equivalent to the cost of the monthly premiums the Company would have paid on your
behalf for the group benefits insurance coverage that are terminated. 

 In the case of Good Reason (other than Good Reason under Section
L.c.(vii)), you must provide the Company or Successor Company with thirty (30) days’ written notice of Good Reason within three (3) months of the occurrence of Good Reason or, where based on a series of changes, within three
(3) months from the occurrence of the last change in the series of changes. Where the Good Reason is based in whole or in part on a series of changes, the notice period that is based on three (3) months from the occurrence of Good Reason
will commence on the occurrence of the last change in the series. Within thirty (30) days of receipt of written notice of Good Reason, the Company or the Successor Company may correct, reverse, rectify or otherwise resolve the change or series
of changes that constitute Good Reason, in which case your employment with the Company or Successor Company will continue. 

 

  

					
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 The payments above will be paid to you within four (4) weeks of the termination date, will be inclusive of
any termination or severance pay owing to you under applicable employment standards legislation, and will be subject to statutory withholdings and other regular payroll deductions. You will be entitled to the pay, if any, accrued and owing under
this Agreement up to the date of termination of your employment. In the event you trigger termination under the Change of Control/Good Reason terms above or are entitled to the termination provisions above as a result of the termination of your
employment without cause, you will not be eligible for any payment pursuant to the termination sections below. 
 Termination: 

N. Resignation. If for any reason you should wish to leave the Company, you will provide the Company with three (3) months’ prior written
notice of your intention (the “Resignation Period”). You agree that in order to protect the Company’s interests, the Company may, in its sole and unfettered discretion, waive the Resignation Period and end your employment
immediately by delivering to you a written notice promptly followed by payment of the Base Salary due to you during the remainder of the Resignation Period and any pay accrued and owing under this Agreement up to the date of termination of your
employment. 
 O. Termination for Cause. The Company may terminate your employment at any time for cause, effective upon delivery by the Company to
you of a written notice of termination of your employment for cause. You will not be entitled to receive any further pay or compensation (except for pay, if any, accrued and owing under this Agreement up to the date of termination of your
employment), severance pay, notice, payment in lieu of notice, benefits or damages of any kind, and for clarity, without limiting the foregoing, you will not be entitled to any bonus or pro rata bonus payment that has not already been awarded by the
Company. 
 P. Termination Without Cause. The Company may terminate your employment without cause at any time upon providing you working notice of
termination, or a lump sum payment of Base Salary in lieu of said notice, or an equivalent combination of working notice and a lump sum payment of Base Salary in lieu of notice, in the amount of twelve (12) months plus one (1) additional
month for every one (1) year of consecutive service with the Company including service prior to the Effective Date, up to a combined maximum of eighteen (18) months (the “Payment Period”). 

In the event the Company provides you with any Base Salary in lieu of notice: 
  

	 	(i)	subject to the insurer’s terms of coverage, the Company will arrange for you to continue to receive group benefits insurance coverage up to the earlier of (I) the end of the Payment Period, or (II) the date
you commence full-time employment (in the event the insurer does not continue coverage, the Company will pay you an amount equivalent to the cost of the monthly premiums the Company would have paid on your behalf for the group benefits insurance
coverage that are terminated); 

 

  

					
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	 	(ii)	the Company will pay you an Average Bonus pro-rated for the period of the partial bonus year you actually worked immediately prior to the termination of your employment, less statutory and other applicable deductions as
required, payable within four (4) weeks of the termination date, provided that if a bonus has not yet been determined for the preceding completed calendar year, the Company will first make that determination in the ordinary course using
relevant criteria in a manner consistent with prior practice so that the Average Bonus can then be determined and paid in accordance with this provision; 

  

	 	(iii)	the Company will pay you the RRSP Contributions it would have paid on your behalf for the balance of the Payment Period; and 

  

	 	(iv)	notwithstanding any provision in this Agreement or in the Stock Option Plans to the contrary, the Company will extend the vesting and exercise rights of your vested and unvested stock options and other deferred
compensation as follows: 

  

	 	(I)	for stock options granted under the Current SOP and any prior stock option plan, the stock options will continue vesting until the end of the Payment Period, at which time all unvested options will be null and void, and
all vested stock options will be exercisable until the earlier of the original expiry date of the options and the date that is three (3) months following the end of the Payment Period; and 

 

	 	(II)	for stock options and other deferred compensation granted under the 2014 EIP and any subsequent incentive compensation plan, the stock options and other deferred compensation will continue to vest for a period of three
(3) months after the date your employment terminates and all vested stock options and other deferred compensation will be exercisable until the earlier of the original expiry day of the stock options and deferred compensation and the date that
is six (6) months after the date your employment terminates. 

 Any payment in lieu of notice provided to you will be inclusive of any
termination or severance pay owing to you under applicable employment standards legislation and subject to statutory withholdings and other regular payroll deductions. You will not be entitled to receive any further pay or compensation except
(i) as expressly set out in this Agreement, and (ii) the pay, if any, accrued and owing under this Agreement up to the date of termination of your employment. 

No Implied Entitlement. Other than as expressly provided herein, you will not be entitled to receive any further pay or compensation, severance pay,
notice, payment in lieu of notice, incentives, bonuses, benefits or damages of any kind. 
 Continued Effect. Notwithstanding any changes in the
terms and conditions of your employment which may occur in the future, including any changes in position, duties or compensation, the termination provisions in this Agreement will continue to be in effect for the duration of your
employment with the Company unless otherwise amended in writing and signed by the Company. 

 

  

					
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 Authorization to Deduct Debts. If, on the date you leave employment, you owe the Company any money, you
hereby authorize the Company to deduct any such debt from your final pay or any other payment due to you to the extent permitted by the Employment Standards Act if applicable. Any remaining debt will be immediately payable to the Company and
you agree to satisfy such debt within 14 days of any demand for repayment. 
 Dispute Resolution. In the event of a dispute arising out of or in
connection with this Agreement, or in respect of any legal relationship associated with it or from it, which does not involve the Company seeking a court injunction or other injunctive or equitable relief to protect its business, confidential
information or intellectual property, or enforce the covenants hereunder, that dispute will be resolved confidentially as follows: 
  

	a.	Amicable Negotiation – The parties agree that, both during and after the performance of their responsibilities under this Agreement, each of them will make bona fide efforts to resolve any disputes
arising between them by amicable and expeditious negotiations. 

  

	b.	Mediation – If the parties are unable to negotiate resolution of a dispute, either party may with the agreement of the other party refer the dispute to mediation by providing written notice to the other
party. If the parties cannot agree on a mediator within fifteen (15) days of receipt of the notice to mediate, then either party may make application to the British Columbia Arbitration and Mediation Society to have one appointed. The mediation
will be held in Vancouver, BC, in accordance with the British Columbia International Commercial Arbitration Centre’s (the “BCICAC”) Commercial Mediation Rules, and each party will bear its own costs, including one-half share of
the mediator’s fees. 

  

	c.	Arbitration – If, after mediation, the parties have been unable to resolve a dispute or, at any time, if mediation is not undertaken, either party may refer the dispute for final and binding arbitration by
providing written notice to the other party. If the parties cannot agree on an arbitrator within fifteen (15) days of receipt of the notice to arbitrate, then either party may make application to the British Columbia Arbitration and Mediation
Society to appoint one. The arbitration will be held in Vancouver, BC, in accordance with the BCICAC’s Shorter Rules for Domestic Commercial Arbitration. Each party will bear its own costs, including one-half share of the arbitrator’s
fees, provided that the arbitrator will have discretion to award costs against either party. 

 Legal Counsel. You have been advised by
the Company to retain independent legal advice with respect to this offer of employment. 
 Currency. Except as otherwise specifically indicated, all
monetary amounts referenced herein are in Canadian dollars. 
 Severability. If any part, article, section, clause, paragraph or subparagraph of this
Agreement is held to be indefinite, invalid, illegal or otherwise voidable or 

 

  

					
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unenforceable for any reason, the entire Agreement will not fail on the account thereof and the validity, legality and enforceability of the remaining provisions will in no way be affected or
impaired thereby. 
 Entire Understanding. We also confirm that this Agreement and the attached Non-Disclosure, Non-Solicitation and Non-Competition
Agreement set forth our entire understanding of the terms of your employment with the Company, and cancels and supersedes all previous invitations, proposals, letters, correspondence, negotiations, promises, agreements (including your attached
former employment agreement), covenants, conditions, representations and warranties with respect to the subject matter of this Agreement. Any modifications to these employment terms must be made in writing and signed by both you and the Company.

 Governing Law. This Agreement and all matters arising hereunder will be governed by and construed in accordance with the laws of the Province of
British Columbia. 
 If you have any questions or concerns regarding the above, please do not hesitate to contact me. 

To accept this Agreement on the terms set out herein, please sign where indicated below, and return a signed copy of this Agreement along with a signed copy
of the Employee Non-Disclosure, Non-Competition and Non-Solicitation Agreement to me. 
 Yours sincerely, 

XENON PHARMACEUTICALS INC. 
 /s/ Karen Corraini

 Name: Karen Corraini 
 Title: General Counsel and
Corporate Secretary 
 Attachments: 
  

	 	1)	Your former Employee Agreement 

  

	 	2)	Xenon Employee Non-Disclosure, Non-Solicitation and Non-Competition Agreement 

  

	 	3)	Current Amended and Restated Stock Option Plan 

  

	 	4)	2014 Equity Incentive Plan 

 I hereby confirm that I have read, understand and voluntarily accept the terms of
this Agreement: 
  

					
	 /s/ Simon N. Pimstone
	  		  	 October 3, 2014

	Simon N. Pimstone	  		  	Date

 
 

  

					
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 SCHEDULE A 

Disclosure of Volunteer, Board and Other External Commitments 
  

					
	Position	  	Organization	  	Length of Appointment/Engagement
			
	Director	  	EupraxiaTherapeutics	  	Two years
	Director	  	Cyon Therapeutics	  	One year
	Director	  	Enject Therapeutics	  	Three years
	Ass. Clinical Professor	  	University of B.C.	  	To start by end of 2014

 
 

  

					
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