Document:

EXHIBIT 10.9

VOTING SUPPORT AGREEMENT

THIS AGREEMENT is made as of December 11, 2013.

BETWEEN:

2396638 Ontario Inc., a corporation existing under the laws of Ontario, Canada (the "Purchaser")

- and -

Jack M. Kay, an individual and resident in the Province of Ontario, Canada (the "Securityholder")

- and -

Emergent BioSolutions Inc., a corporation existing under the laws of Delaware, USA (the "Parent")

RECITALS:

	
1.

	
The Securityholder is the beneficial owner, directly or indirectly, of certain Company Shares.

	
2.

	
The Securityholder understands that the Company, the Purchaser and the Parent have entered into the Arrangement Agreement.

	
3.

	
This Agreement sets out, among other things, the terms and conditions of the agreement of the Securityholder to abide by the covenants in respect of the Subject Securities and the other restrictions and covenants set forth herein.

	
4.

	
The Parent owns all of the outstanding securities of the Purchaser.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged) the parties hereto agree as follows:

ARTICLE 1

 INTERPRETATION

	
1.1

	
Definitions

Capitalized terms used herein and not otherwise defined have the meanings ascribed thereto in the Arrangement Agreement. In this Agreement, including the recitals:

"affiliate" of any Person means, at the time such determination is being made, any other Person controlling, controlled by or under common control with such first Person, in each case, whether directly or indirectly, and "control" and any derivation thereof means the holding of voting securities of another entity sufficient to elect a majority of the board of directors (or the equivalent) of such entity;

"Arrangement Agreement" means the arrangement agreement dated December 11, 2013 between the Purchaser, the Company and the Parent, a copy of which is attached to this Agreement as Schedule "B";

"Company" means Cangene Corporation, a corporation existing under the laws of the Province of Ontario;

"Deadline Date" means (i) if Parent or Purchaser has not commenced an Alternative Transaction prior to June 30, 2014, then June 30,2014, and (ii) if Parent or Purchaser has commenced an Alternative Transaction prior to June 30, 2014, the earlier of (A) the termination of the Alternative Transaction and (B) July 31, 2014;

"Expiry Time" has the meaning ascribed thereto in Section 3.1(a);

"Governmental Entity" means any national, supra-national, federal, state, municipal, local or foreign government, or any court, tribunal, arbitrator, administrative agency, commission or other governmental or quasi-governmental authority or instrumentality, including any government-owned or government-controlled enterprise, in each case whether domestic or foreign, any stock exchange or similar self-regulatory organization or any quasi-governmental body exercising any regulatory, taxing or other governmental or quasi-governmental authority;

"Law" means all United States or foreign federal, state, national, supra-national, provincial, municipal or local laws, constitutions, statutes, codes, rules, common law, regulations, ordinances, executive orders, treaties, decrees or edicts by a Governmental Entity having the force of law;

"Notice" has the meaning ascribed thereto in Section 4.9;

"Subject Securities" means the Company Shares currently owned by the Securityholder as specified in Schedule "A" hereto, and any other Company Shares acquired by the Securityholder or any of its affiliates subsequent to the date hereof, and will include all securities which such Subject Securities may be converted into, exchanged for or otherwise changed into;

	
1.2

	
Singular; Plural, etc.

In this Agreement, words importing the singular number include the plural and vice versa and words importing gender include the masculine, feminine and neuter genders.

	
1.3

	
Currency

Unless otherwise expressly stated, all references to currency herein will be deemed to be references to U.S. currency.

	
1.4

	
Headings, etc.

The division of this Agreement into Articles, Sections and Schedules and the insertion of the recitals and headings are for convenience of reference only and will not affect the construction or interpretation of this Agreement and, unless otherwise stated, all references in this Agreement or in the Schedules hereto to Articles, Sections and Schedules refer to Articles, Sections and Schedules of and to this Agreement or of the Schedules in which such reference is made, as applicable.

	
1.5

	
Date for any Action

In the event that any date on which any action is required to be taken hereunder by any of the parties is not a Business Day, such action will be required to be taken on the next succeeding day which is a Business Day.  In this Agreement, references from or through any date mean, unless otherwise specified, from and including that date and/or through and including that date, respectively.

	
1.6

	
Governing Law

This Agreement will be governed, including as to validity, interpretation and effect, by the laws of the Province of Ontario and the laws of Canada applicable therein, and will be construed and treated in all respects as an Ontario contract.  Each of the parties hereby irrevocably attorns to the exclusive jurisdiction of the Courts of the Province of Ontario in respect of all matters arising under and in relation to this Agreement.

	
1.7

	
Incorporation of Schedules

Each of Schedules "A" and "B" attached hereto, for all purposes hereof, forms an integral part of this Agreement.

ARTICLE 2

 REPRESENTATIONS AND WARRANTIES

	
2.1

	
Representations and Warranties of the Securityholder

The Securityholder represents and warrants to the Purchaser and the Parent (and acknowledges that they are relying on these representations and warranties in completing the transactions contemplated hereby and by the Arrangement Agreement) the matters set out below:

	
(a)

	
The Securityholder is an individual and resident in the Province of Ontario, Canada.

	
(b)

	
The Securityholder has all necessary power, authority, capacity and right to enter into this Agreement and to carry out each of its obligations under this Agreement. This Agreement has been duly executed and delivered by the Securityholder and constitutes a legal, valid and binding obligation of the Securityholder enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other laws affecting the enforcement of creditors' rights generally and subject to the qualification that equitable remedies may only be granted in the discretion of a court of competent jurisdiction.

	
(c)

	
The Securityholder owns all of the Subject Securities.  Other than the Subject Securities, neither the Securityholder nor any of its affiliates, beneficially own, or exercise control or direction over any additional securities, or any securities convertible or exchangeable into any additional securities, of the Company or any of its affiliates.

	
(d)

	
Currently the Securityholder is, and at the time at which the Subject Securities are acquired by the Purchaser under the Arrangement will be, the sole beneficial owner of the Subject Securities, with good and marketable title thereto, free and clear of all Liens.

	
(e)

	
The Securityholder has the sole right to sell and vote or direct the sale and voting of the Subject Securities.

	
(f)

	
No Person has any agreement or option, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option, for the purchase, acquisition or transfer of any of the Subject Securities or any interest therein or right thereto, except the Purchaser pursuant to the Arrangement.

	
(g)

	
No consent, approval, order or authorization of, or declaration or filing with, any Person is required to be obtained by the Securityholder in connection with the execution and delivery of this Agreement by the Securityholder and the performance by it of its obligations under this Agreement.

	
(h)

	
There is no proceeding, claim or investigation pending before any Governmental Entity, or to the best of the knowledge of the Securityholder, threatened against the Securityholder or any of its properties that, individually or in the aggregate, could reasonably be expected to have an adverse effect on the Securityholder's ability to execute and deliver this Agreement and to perform its obligations contemplated by this Agreement.

	
(i)

	
None of the Subject Securities is subject to any proxy, voting trust, vote pooling or other agreement with respect to the right to vote, call meetings of any of the Company's securityholders or give consents or approvals of any kind.

	
(j)

	
None of the execution and delivery by the Securityholder of this Agreement or the completion of the transactions contemplated hereby or the compliance by the Securityholder with its obligations hereunder will violate, contravene, result in any breach of, or be in conflict with, or constitute a default under, or create a state of facts which after notice or lapse of time or both would constitute a default under, any term or provision of: (i) any constating documents of the Securityholder; (ii) any contract to which the Securityholder is a party or by which the Securityholder is bound; (iii) any judgment, decree, order or award of any Governmental Entity; or (iv) any applicable Law.

	
2.2

	
Representations and Warranties of the Purchaser and Parent

The Purchaser and the Parent jointly and severally represent and warrant to the Securityholder (and acknowledge that the Securityholder is relying on these representations and warranties in completing the transactions contemplated hereby and by the Arrangement Agreement) the matters set out below:

	
(a)

	
The Purchaser is a corporation duly incorporated and validly existing under the laws of Ontario, Canada and has all necessary corporate power, authority and capacity to enter into this Agreement. The execution and delivery of this Agreement and the performance of this Agreement have been duly authorized by all necessary corporate action on the part of the Purchaser. This Agreement constitutes a legal, valid and binding obligation of the Purchaser enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other laws affecting the enforcement of creditors' rights generally and subject to the qualification that equitable remedies may only be granted in the discretion of a court of competent jurisdiction.

	
(b)

	
None of the execution and delivery by the Purchaser of this Agreement or the compliance by the Purchaser with the Purchaser's obligations hereunder will violate, contravene, result in any breach of, or be in conflict with, or constitute a default under, or create a state of facts which after notice or lapse of time or both would constitute a default under, any term or provision of: (i) any constating documents of the Purchaser; (ii) any contract to which the Purchaser is a party or by which the Purchaser is bound; (iii) any judgment, decree, order or award of any Governmental Entity; or (iv) any applicable Laws.

	
(c)

	
No material consent, approval, order or authorization of, or declaration or filing with, any Governmental Entity is required to be obtained by the Purchaser in connection with the execution and delivery of this Agreement, the performance by it of its obligations under this Agreement and the consummation by the Purchaser of the Arrangement, other than those which are contemplated by the Arrangement Agreement.

	
(d)

	
There is no proceeding, claim or investigation pending before any Governmental Entity, or to the best of the knowledge of the Purchaser, threatened against the Purchaser or any of its properties that, individually or in the aggregate, could reasonably be expected to have an adverse effect on the Purchaser's ability to execute and deliver this Agreement and to perform its obligations contemplated by this Agreement.

	
(e)

	
The Parent is a corporation duly incorporated and validly existing under the laws of Delaware, USA and has all necessary corporate power, authority and capacity to enter into this Agreement.  The execution and delivery of this Agreement and the performance of this Agreement have been duly authorized by all necessary corporate action on the part of the Parent. This Agreement constitutes a legal, valid and binding obligation of the Parent enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other laws affecting the enforcement of creditors' rights generally and subject to the qualification that equitable remedies may only be granted in the discretion of a court of competent jurisdiction.

	
(f)

	
None of the execution and delivery by the Parent of this Agreement or the compliance by the Parent with the Parent's obligations hereunder will violate, contravene, result in any breach of, or be in conflict with, or constitute a default under, or create a state of facts which after notice or lapse of time or both would constitute a default under, any term or provision of: (i) any constating documents of the Parent; (ii) any contract to which the Parent is a party or by which the Parent is bound; (iii) any judgment, decree, order or award of any Governmental Entity; or (iv) any applicable Laws.

	
(g)

	
No material consent, approval, order or authorization of, or declaration or filing with, any Governmental Entity is required to be obtained by the Parent in connection with the execution and delivery of this Agreement, the performance by it of its obligations under this Agreement and the consummation by the Parent of the Arrangement, other than those which are contemplated by the Arrangement Agreement.

	
(h)

	
There is no proceeding, claim or investigation pending before any Governmental Entity, or to the best of the knowledge of the Parent, threatened against the Parent or any of its properties that, individually or in the aggregate, could reasonably be expected to have an adverse effect on the Parent's ability to execute and deliver this Agreement and to perform its obligations contemplated by this Agreement.

ARTICLE 3

 COVENANTS

	
3.1

	
Covenants of the Securityholder

	
(a)

	
The Securityholder hereby covenants with the Purchaser and the Parent that from the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms and the Effective Time (the "Expiry Time"), the Securityholder will not:

	
(i)

	
without having first obtained the prior written consent of the Parent, which consent shall not be unreasonably withheld, sell, transfer, gift, assign, convey, pledge, hypothecate, encumber, option or otherwise dispose of any right or interest in any of the Subject Securities or enter into any agreement, arrangement, commitment or understanding in connection therewith, other than (A) pursuant to the Arrangement or (B) transfers to or between affiliates of the Securityholder (provided that (1) the Securityholder will notify Parent of any such transfer; (2) such transfer does not relieve the Securityholder of any of its obligations under this Agreement with respect to the Subject Securities; and (3) any affiliate of the Securityholder will be required, in Parent's sole discretion, to enter into an agreement with Purchaser and the Parent substantially in the form of this Agreement with respect to all of such Subject Securities);

	
(ii)

	
other than as set forth herein, grant or agree to grant any proxies or powers of attorney, deposit any Subject Securities into a voting trust or pooling agreement, or enter into a voting agreement, commitment, understanding or arrangement, oral or written, with respect to the voting of any Subject Securities; or

	
(iii)

	
requisition or join in the requisition of any meeting of any of the securityholders of the Company for the purpose of considering any resolution.

	
(b)

	
The Securityholder hereby covenants, undertakes and agrees from time to time, until the Expiry Time, to vote (or cause to be voted) all the Subject Securities:

	
(i)

	
at any meeting of any of the securityholders of the Company at which the Securityholder is entitled to vote, including the Company Meeting; and

	
(ii)

	
in any action by written consent of the securityholders of the Company,

in favour of the approval, consent, ratification and adoption of the Arrangement Resolution and the transactions contemplated by the Arrangement Agreement (and any actions required for the consummation of the transactions contemplated by the Arrangement Agreement).  In connection with the foregoing, subject to this Section 3.1(b), the Securityholder hereby agrees to deposit a proxy, or voting instruction form, as the case may be, duly completed and executed in respect of all of the Subject Securities as soon as practicable following the mailing of the Company Circular and in any event at least 10 calendar days following such mailing, voting all such Subject Securities in favour of the Arrangement Resolution. The Securityholder hereby agrees that it will not take, nor permit any Person on its behalf to take, any action to withdraw, amend or invalidate any proxy or voting instruction form deposited pursuant to this Agreement notwithstanding any statutory or other rights or otherwise which the Securityholder might have unless this Agreement has at such time been previously terminated in accordance with Section 4.1.

	
(c)

	
The Securityholder hereby covenants, undertakes and agrees from time to time, until the Expiry Time, to vote (or cause to be voted) the Subject Securities against any proposed action by the Company, its Shareholders, any of the Company's Subsidiaries or any other Person: (i) in respect of any Acquisition Proposal or Superior Proposal or other merger, take-over bid, amalgamation, plan of arrangement, business combination or similar transaction involving the Company or any Subsidiary of the Company, other than the Arrangement; (ii) which would reasonably be regarded as being directed towards or likely to prevent or delay the successful completion of the Arrangement, including without limitation any amendment to the articles or by-laws of the Company or any of its affiliates or their respective corporate structures; or (iii) any action or agreement that would result in a breach of any representation, warranty, covenant or other obligation of the Company under the Arrangement Agreement if such breach requires Shareholder approval;

	
(d)

	
Until the Expiry Time, the Securityholder hereby covenants, undertakes and agrees, in the event that any transaction other than the Arrangement is presented for approval of, or acceptance by, the Shareholders, whether or not it may be recommended by the Company's directors, not to directly or indirectly, (i) accept, knowingly assist or otherwise knowingly further the successful completion of such transaction or (ii) purport to tender or deposit into any such transaction any of the Subject Securities, and, in the event the directors of the Company make a Change in Recommendation, the Securityholder will, if requested by the Parent, publicly affirm its commitment to vote in favour of the Arrangement in accordance with the terms of this Agreement.

	
(e)

	
Until the Expiry Time, the Securityholder will not, and will ensure that its affiliates do not, directly or indirectly, through any officer, director, employee, representative or agent or otherwise:

	
(i)

	
solicit proxies or become a participant in a solicitation in opposition to or in competition with the Purchaser in connection with the Arrangement;

	
(ii)

	
assist any affiliate or knowingly assist any other Person in taking or planning any action that would compete with, restrain or otherwise serve to interfere with or inhibit the Purchaser in connection with the Arrangement;

	
(iii)

	
act jointly or in concert with others with respect to voting securities of the Company for the purpose of opposing or competing with the Purchaser in connection with the Arrangement;

	
(iv)

	
solicit, initiate, knowingly assist, knowingly encourage or otherwise facilitate (including by way of entering into any agreement, arrangement or understanding), any inquiry, proposal or offer relating to any Acquisition Proposal or potential Acquisition Proposal (other than the Purchaser's Acquisition Proposal pursuant to the Arrangement Agreement);

	
(v)

	
participate in any discussions or negotiations regarding any Acquisition Proposal (other than the Purchaser's Acquisition Proposal pursuant to the Arrangement Agreement);

	
(vi)

	
accept or enter into, or publicly propose to accept or enter into, any letter of intent, agreement, arrangement or understanding related to any Acquisition Proposal (other than the Purchaser's Acquisition Proposal pursuant to the Arrangement Agreement); or

	
(vii)

	
cooperate in any way with, participate in or knowingly assist, knowingly encourage or otherwise facilitate any effort or attempt by any other Person to do or seek to do any of the foregoing.

	
(f)

	
The Securityholder will not (i) exercise any dissent rights in respect of the Arrangement; or (ii) take any other action of any kind, in each case which would reasonably be regarded as likely to reduce the success of, or materially delay or interfere with the completion of, the transactions contemplated by the Arrangement Agreement.

	
(g)

	
The Securityholder will, and will cause each of its affiliates to, immediately cease and cause to be terminated any existing discussions or negotiations with any parties with respect to any potential Acquisition Proposal (other than the Purchaser's Acquisition Proposal pursuant to the Arrangement Agreement).

	
(h)

	
Until the Expiry Time, at the request of the Purchaser, the Parent or the Company, the Securityholder will use all commercially reasonable efforts in its capacity as a Shareholder to assist the Company, the Purchaser and the Parent to make all regulatory filings required to complete the Arrangement and the other transactions contemplated by the Arrangement Agreement and this Agreement.

	
(i)

	
The Securityholder hereby consents to:

	
(i)

	
details of this Agreement being set out in any press release, information circular, including the Company Circular, and court documents produced by the Company, the Purchaser, the Parent or any of their respective affiliates in connection with the transactions contemplated by this Agreement and the Arrangement Agreement, provided that to the extent any such filing contains disclosure regarding the Securityholder or its affiliates, the Securityholder has been provided with a reasonable opportunity to review and comment on such disclosure and reasonable consideration has been given by the Purchaser to any such comments; and

	
(ii)

	
this Agreement being made publicly available, including by filing on the System for Electronic Document Analysis and Retrieval (SEDAR) operated on behalf of the Canadian Securities Administrators and/or by filing with or furnishing to the SEC, provided that the parties agree that this Agreement, including schedules, will be filed in its entirety on SEDAR and/or filed with or furnished to the SEC, without redaction other than (A) certain facsimile information in Section 4.9(a) hereof and Section 11.7 [Notices] of the Arrangement Agreement; and (B) specific dollar amounts referred to in Section 6.1 [Conduct of Business] of the Arrangement Agreement.

	
(j)

	
Except as required by applicable Law or applicable stock exchange requirements, the Securityholder will not, and will ensure that its affiliates do not, make any public announcement with respect to the transactions contemplated herein or pursuant to the Arrangement Agreement without the prior written approval of the Purchaser.

	
3.2

	
Alternative Forms of Transaction

If the event that, in lieu of the Arrangement, the Purchaser, the Parent or the Company determines in its good faith judgment that it is necessary or desirable to complete the acquisition of the Company Shares pursuant to an Alternative Transaction (as defined below), then the Securityholder shall, during the term of this Agreement, upon request of the Purchaser or the Parent support the completion of such Alternative Transaction in the same manner as the Arrangement in accordance with the terms and conditions of this Agreement, including by depositing or causing the deposit of the Subject Securities into the Alternative Transaction and not withdrawing them. For the purposes of this Agreement, an "Alternative Transaction" means a take-over bid made by the Parent (or an affiliate) in compliance with applicable securities Laws, to all of the shareholders of the Company that satisfies each of the following conditions (a) it provides for economic terms which, in relation to the Securityholder, on an after-tax basis, are in all respects at least equivalent to or better than those contemplated by the Arrangement Agreement, (b) it provides for conditions that are not more onerous than those set forth in the Arrangement Agreement, (c) it expires (following any extensions) no later than the earlier of (i) 70 days from the date that the Purchaser commences any take-over bid, and (ii) the Deadline Date, (d) it is, from the perspective of the Securityholder acting reasonably, otherwise on terms not materially more onerous on the Securityholder than the Arrangement, and (e) it is subject to a minimum tender condition of at least 662/3% of the outstanding Company Shares that cannot be waived without the approval of the Securityholder.

	
3.3

	
Covenant of the Purchaser and Parent

Subject to Section 4.1, each of Purchaser and the Parent will (a) comply with its respective obligations under the Arrangement Agreement and (b) take all steps required of it to cause the Arrangement to occur in both cases in accordance with the terms of and subject to the conditions set forth in the Arrangement Agreement.

ARTICLE 4

 GENERAL

	
4.1

	
Termination

This Agreement will automatically terminate upon written notice from any party hereto and be of no further force or effect upon the earliest to occur of:

	
(a)

	
the agreement in writing of the Purchaser, the Parent and the Securityholder;

	
(b)

	
the termination of the Arrangement Agreement in accordance with its terms, unless prior to or concurrently with the termination of the Arrangement Agreement, the Parent (or an affiliate) commences an Alternative Transaction;

	
(c)

	
written notice by the Securityholder to the Parent if:

	
(i)

	
subject to Section 4.3, any representation or warranty of the Purchaser or the Parent under this Agreement is untrue or incorrect in any material respect;

	
(ii)

	
without the prior written consent of the Securityholder, there is any decrease in, or change in the form of, the consideration as set out in the Arrangement Agreement, other than any adjustment to the consideration pursuant to the terms of the Arrangement Agreement;

	
(iii)

	
without the prior written consent of the Securityholder, (A) the conditions to the consummation of the Arrangement as set forth in the Arrangement Agreement have been amended in a manner that is adverse to the Securityholder, or (B) the terms of the Arrangement Agreement have been otherwise varied in a manner that is materially adverse to the Securityholder; or

	
(iv)

	
subject to Section 4.3, the Purchaser or the Parent has not complied in any material respect with its covenants contained herein;

provided that at the time of such termination, the Securityholder is not in material default in the performance of its obligations under this Agreement;

	
(d)

	
written notice by the Purchaser or the Parent to the Securityholder if:

	
(i)

	
subject to Section 4.3, any representation or warranty of the Securityholder under this Agreement is untrue or incorrect in any material respect; or

	
(ii)

	
the Securityholder has not complied in any material respect with its covenants contained herein;

provided that at the time of such termination, neither the Purchaser nor the Parent is in material default in the performance of its obligations under this Agreement; and

	
(e)

	
the Deadline Date, if the conditions provided in Section 3.1 [Mutual Conditions] or Section 3.2 [Conditions in Favour of Company] of the Arrangement Agreement have not been satisfied by the Parent or Purchaser or waived by Company on or before the Deadline Date, provided however that this Agreement shall not terminate pursuant to this Section 4.1(e) if the Company's failure to fulfill any of its obligations under the Arrangement Agreement or if its breach of any of its representations and warranties under the Arrangement Agreement has been the cause of, or resulted in, the failure of the consummation of the Arrangement to occur by the Deadline Date.

	
4.2

	
Time of the Essence

Any date, time or period referred to in this Agreement will be of the essence, except to the extent to which the Securityholder, the Purchaser and the Parent agree in writing to vary any date, time or period, in which event the varied date, time or period will be of the essence.

	
4.3

	
Notice and Cure Provisions

	
(a)

	
Each party will give prompt notice to the other of the occurrence, or failure to occur, at any time from the date hereof until the termination of this Agreement of any event or state of facts which occurrence or failure would, or would be likely to give rise to a right of termination by the other party pursuant to Sections 4.1(c) or 4.1(d). Notification provided under this Section 4.3 will not affect the representations, warranties, covenants, agreements or obligations of the parties (or remedies with respect thereto).

	
(b)

	
The Securityholder may not exercise its right to terminate this Agreement pursuant to Sections 4.1(c)(i) or 4.1(c)(iv) and the Purchaser or the Parent may not exercise its right to terminate this Agreement pursuant to Section 4.1(d) unless the party seeking to terminate the Agreement delivers a written notice to the other party specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the party delivering such notice is asserting as the basis for the termination right.  If any such notice is delivered prior to the Company Meeting, provided that a party is proceeding diligently to cure such matter and such matter is capable of being cured, no party may exercise such termination right until the earlier of (a) two Business Days prior to the Company Meeting, and (b) the date that is 10 Business Days following receipt of such notice by the party to whom the notice was delivered, if such matter has not been cured by such date.  If any such notice is delivered after the date of the Company Meeting, provided that a party is proceeding diligently to cure such matter and such matter is capable of being cured, no party may exercise such termination right until the earlier of (a) five Business Days prior to the Deadline Date, and (b) the date that is 10 Business Days following receipt of such notice by the Party to whom the notice was delivered.

	
4.4

	
Effect of Termination

If this Agreement is terminated in accordance with the provisions of Section 4.1, no party will have any further liability to perform its obligations under this Agreement, provided that neither the termination of this Agreement nor anything contained in Section 4.1 will relieve any party from any liability for any breach by it of this Agreement, including from any inaccuracy in its representations and warranties and any non-performance by it of its covenants made herein. 

	
4.5

	
Equitable Relief

	
(a)

	
The parties hereby agree that irreparable damage would occur in the event that any provision of this Agreement were not performed in accordance with its specific terms or were otherwise breached, and that money damages or other legal remedies would not be an adequate remedy for any such damages. Accordingly, the parties acknowledge and hereby agree that in the event of any breach or threatened breach by the Securityholder, on the one hand, or the Purchaser or the Parent, on the other hand, of any of their respective covenants or obligations set forth in this Agreement, the Securityholder, on the one hand, and the Purchaser or the Parent, on the other hand, shall be entitled to an injunction or injunctions to prevent or restrain breaches or threatened breaches of this Agreement by the other, and to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the other under this Agreement. Each of the parties hereby agrees not to raise any objections to the availability of the equitable remedy of specific performance to prevent or restrain breaches or threatened breaches of this Agreement by it, and to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the other parties under this Agreement.

	
(b)

	
The parties hereto further agree that (x) by seeking the remedies provided for in this Section 4.5, a party shall not in any respect waive its right to seek any other form of relief that may be available to a party under this Agreement in the event that this Agreement has been terminated or in the event that the remedies provided for in this Section 4.5 are not available or otherwise are not granted, and (y) nothing set forth in this Section 4.5 shall require any party hereto to institute any proceeding for (or limit any party's right to institute any proceeding for) specific performance under this Section 4.5 prior or as a condition to exercising any termination right under Section 4.1 (and pursuing damages after such termination), nor shall the commencement of any legal proceeding restrict or limit any party's right to terminate this Agreement in accordance with the terms of Section 4.1 or pursue any other remedies under this Agreement that may be available then or thereafter.

	
4.6

	
Waiver; Amendment

Each party hereto agrees and confirms that any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by all of the parties or in the case of a waiver, by the party against whom the waiver is to be effective and no failure or delay by any party in exercising any right, power or privilege hereunder will operate as a waiver thereof nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  No waiver of any of the provisions of this Agreement will be deemed to constitute a waiver of any other provision (whether or not similar).

	
4.7

	
Entire Agreement

This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings among the parties with respect thereto.

	
4.8

	
Survival of Representations, Warranties and Covenants

The representations and warranties of the parties set out in Article 2 shall survive the closing of the Arrangement Agreement and remain in full force and effect for 18 months thereafter.  This Section 4.8 shall not limit any covenant or agreement of the parties, which by its terms contemplates performance after the Effective Time.

	
4.9

	
Notices

Any notice, consent or approval required or permitted to be given in connection with this Agreement (each, a "Notice") will be in writing and will be sufficiently given if delivered (whether in person or other personal method of delivery) or if sent by prepaid overnight courier:

	
(a)

	
if to the Purchaser or the Parent:

Emergent BioSolutions Inc.

General Counsel

2273 Research Boulevard, Suite 400

Rockville, Maryland 20850

 United States

Attention:                          General Counsel

Facsimile:                          301-795-6783

with a copy (which will not constitute notice) to:

DLA Piper LLP (US)

The Marbury Building

6225 Smith Avenue

Baltimore, Maryland 21209-3600

United States

Attention:                          Howard S. Schwartz

Facsimile:                          410-580-3251

and to:

McCarthy Tétrault LLP

66 Wellington Street West

Suite 5300

Toronto Dominion Bank Tower

Toronto, ON   M5K 1E6

Attention:                          Graham P.C. Gow

                                  Ian Michael

Facsimile:                          416-868-0673

	
(b)

	
if to the Securityholder:

Jack M. Kay

150 Signet Drive

 Toronto, ON  M9L 1T9

Facsimile:                          416-401-3808

Any notice sent by prepaid overnight courier will be deemed to have been delivered as of the following Business Day.  Any party hereto may, from time to time, change its address by giving Notice to the other parties in accordance with the provisions of this Section.

	
4.10

	
Severability

To the extent permitted by applicable Law, the parties waive any provision of applicable Law which renders any provision of this Agreement invalid or unenforceable in any respect. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any applicable Law or public policy, all other conditions and provisions of this Agreement will nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto will negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are fulfilled to the fullest extent possible.

	
4.11

	
Successors and Assigns

The provisions of this Agreement will be binding upon and enure to the benefit of the parties hereto and their respective successors, permitted assigns and legal personal representatives, provided that no party may assign, delegate or otherwise transfer any of its rights, interests or obligations under this Agreement without the prior written consent of the other parties hereto.

	
4.12

	
Expenses

Each party will pay all costs and expenses (including the fees and disbursements of legal counsel and other advisers) it incurs in connection with the negotiation, preparation and execution of this Agreement and the transactions contemplated by this Agreement provided that each party (the "breaching party") shall pay the fees and disbursements of legal counsel to another party (the "non-breaching party") to the extent related to any Proceedings brought by a non-breaching party to enforce this Agreement as a result of a breach of any provision of this Agreement by the breaching party.

	
4.13

	
Independent Legal Advice

Each of the parties hereby acknowledges that it has been afforded the opportunity to obtain independent legal advice and confirms by the execution and delivery of this Agreement that they have either done so or waived their right to do so in connection with the entering into of this Agreement.

	
4.14

	
Further Assurances

The parties hereto will, with reasonable diligence, do all things and provide all such reasonable assurances as may be required to consummate the transactions contemplated by this Agreement, and each party will provide such further documents or instruments required by the other party as may be reasonably necessary or desirable to effect the purpose of this Agreement and carry out its provisions, whether before or after the Effective Time.

	
4.15

	
Language

The parties expressly acknowledge that they have requested that this Agreement and all ancillary and related documents thereto be drafted in the English language only. Les parties aux présentes reconnaissent avoir exigé que la présente entente et tous les documents qui y sont accessoires soient rédigés en anglais seulement.

	
4.16

	
Execution and Delivery

This Agreement may be executed by the parties in counterparts and may be executed and delivered by facsimile or other electronic means and all the counterparts and facsimiles or other electronic copies together constitute one and the same agreement, and such facsimile or other electronic copies will be legally effective to create a valid and binding agreement between the parties.

	
4.17

	
Fiduciary Duties

For the avoidance of doubt, nothing in this Agreement shall limit any individual who is a director or officer of Company or any of its Subsidiaries from performing his or her fiduciary duties as a director or an officer of Company or any such Subsidiary, including for greater certainty, doing any act or thing permitted by the Arrangement Agreement, and no action taken by any such individual described pursuant to this Section 4.17 shall constitute a breach of this Agreement by the Securityholder or any of its affiliates.

[The remainder of this page has been intentionally left blank.]

 

IN WITNESS OF WHICH the parties have executed this Agreement.

	
 

	
 

	
2396638 Ontario Inc.

 

	
By:

	
/s/ Daniel J. Abdun-Nabi

	
 

	
Name:            Daniel J. Abdun-Nabi

	
 

	
Title:            Vice President

	
 

	
 

	
Jack M. Kay

 

	
 

	
/s/ Jack M. Kay

	
 

	
 

	
 

	
 

	
 

	
 

	
Emergent BioSolutions Inc.

 

	
By:

	
/s/ Daniel J. Abdun-Nabi

	
 

	
Name:            Daniel J. Abdun-Nabi

	
 

	
Title: President and Chief Executive Officer

SCHEDULE "A"

COMPANY SHARES

	
Securityholder

	
Company Shares

	
Jack M. Kay

	
247,800 common shares

SCHEDULE "B"

ARRANGEMENT AGREEMENTlulu-2013.11.03-EX 10.1

Exhibit 10.1

Private and Confidential
This Agreement is dated for reference as of October 15, 2013.
To:    Tara Poseley
Dear Tara:
Re:    Executive Employment Agreement
This Agreement contains the terms and conditions of our offer of employment in the position of Executive Vice President, Chief Product Officer.  This Agreement will take effect as of the Effective Date and will continue until terminated in accordance with its terms.
If you accept employment on the terms and conditions set out below, please execute this Agreement where indicated.
ARTICLE 1 - INTERPRETATION
		
	1.01
	Definitions

In this Agreement, unless something in the subject matter or context is inconsistent therewith:
“Affiliate” has the meaning attributed to such term in the Canada Business Corporations Act and includes each direct and indirect subsidiary of the Company and any other entities, including joint ventures and franchises, in which the Company has an interest.
“Agreement” means this agreement, including its recitals and schedules, as amended from time to time in accordance with Section 6.05.
“Approvals” means collectively, a Canadian work permit and all other necessary authorizations and approvals for the Executive to work in Canada.
“Base Salary” has the meaning attributed to such term in Section 3.01.
“Board” means the board of directors of the Company in office from time to time.
“Bonus Plan” means the Company's Executive Bonus Plan as amended by the Company from time to time.
“Cause” means (a) acts or omissions constituting gross negligence, recklessness or willful misconduct on the part of Executive with respect to the Executive’s obligations or otherwise relating to the business of Company; (b) any acts or conduct by the Executive that are materially adverse to the Company’s interests; (c) the Executive’s material breach of this Agreement; (d) the Executive’s conviction or entry of a plea of nolo contendere for fraud, misappropriation or embezzlement, or any felony or crime of moral turpitude or that otherwise negatively impacts the Executive’s ability to effectively perform the Executive’s duties hereunder; (e) the Executive’s willful neglect of duties; (f) the Executive’s breach of the warranties and affirmations set forth in this Agreement or, (g) while employed in Canada, Cause shall have the usual meaning 

of just cause under the common law.  In the event of any of the foregoing, the Executive will have fifteen (15) days from receipt of notice from the Company to cure the issue, if curable, and failure to timely effect such cure shall entitle the Company to terminate the Executive's employment for Cause.
“Company” means lululemon athletica inc., a Delaware corporation.
“Compensation Committee” means the compensation committee of the Board.
“Effective Date” of this Agreement means November 11,  2013, unless Executive elects to start on an earlier date.
“Executive” means Tara Poseley.
“Plan” means the Company’s 2007 Equity Incentive Plan.
“Relocation” has the meaning attributed to such term in Section 2.03(2).
“Restrictive Covenant Agreement” has the meaning attributed to such term in Section 4.05.
“Termination Date” has the meaning attributed to such term in Section 5.01.
ARTICLE 2 - EMPLOYMENT
		
	2.01
	Employment

(1)    Subject to the terms and conditions of this Agreement, the Company will, commencing on the Effective Date, employ the Executive in the position of Executive Vice‐President, Chief Product Officer, on the terms and conditions set out herein.
(2)    The Executive will report to the Chief Executive Officer (the “CEO”) of the Company.
(3)    The Executive will perform the duties and functions of an Executive Vice-President, Chief Product Officer of a corporation in a business and of a size similar to the Company and such other services and duties as may reasonably be assigned from time to time by the CEO, subject always to the control and direction of the CEO.
		
	2.02
	Term

The term of this Agreement and the Executive’s employment under this Agreement will commence on the Effective Date and will continue for an indefinite period, subject to termination in accordance with the terms of this Agreement.  While employed by Company in the United States, Executive’s employment shall be at-will, subject to the provisions regarding termination set forth below, which means that Company recognizes the Executive’s right to terminate the relationship at any time and for any reason, and similarly, the Company reserves the right to alter, modify or terminate the relationship at any time with or without cause or advance notice.  

2

		
	2.03
	Place of Employment/Affirmation for Approvals

(1)    Until the Relocation, the Executive will be based in San Francisco, California.  During the Executive’s employment with the Company, both before and after the Relocation, Executive’s position shall require frequent travel to Company’s offices and retail stores, wherever located, as directed by the Company.
(2)    Within thirty (30) days after the Approvals are granted, the Executive will relocate her primary residence to Vancouver, B.C. (the “Relocation”) and will perform her work and services for the Company at the principal executive offices of the Company and the Executive will reside within a reasonable daily commuting distance of such offices.
(3)    The Executive warrants and affirms that there exist no circumstances with respect to her professional or personal history that would prevent the Executive from obtaining the Approvals.  The Company agrees to pay all costs and expenses in connection with processing and obtaining the Approvals for the Executive, including, without limitation, reimbursing the Executive if the Executive has to travel to Canada or engage her own counsel as part of the process of obtaining the work permit.
ARTICLE 3 - REMUNERATION AND BENEFITS
		
	3.01
	Base Salary

The Company will pay the Executive a base salary (the “Base Salary”) in the amount of USD$600,000 per annum before the Relocation, or CAD $600,000 per annum after the Relocation.  The Base Salary will be payable in accordance with the Company’s usual payroll practices and dates, and subject to deductions required by law or authorized by the Executive.  The Executive will be eligible for an annual merit increase on or about March of each year, beginning in March 2014.
		
	3.02
	Bonus

(1)    The Executive will be eligible to receive an annual bonus pursuant to the terms and conditions of the Bonus Plan.  The Executive’s bonus target under the Bonus Plan shall be 75% of Base Salary, provided the target bonus for 2013 shall be 75% of the Executive’s pro-rated Base Salary received in 2013.
(2)    In exchange for Executive accepting employment with the Company and remaining employed for a period of twelve (12) months (“Retention Period”), the Company agrees to provide the Executive with a retention bonus in the amount of USD $300,000 (“Retention Bonus”), less applicable tax and other withholdings.  Within fifteen (15) days following the Effective Date of this Agreement, the Company will pay to the Executive the Retention Bonus in advance of the Executive actually having remained employed for the Retention Period.  The Retention Bonus is an advance of wages that the Executive has not yet earned.  Because the Company is advancing this unearned Retention Bonus to the Executive in anticipation of retaining the Executive’s services for at least twelve (12) months, in the event the Executive should voluntarily resign Executive’s employment with the Company or is terminated for Cause prior to completing the Retention Period, the Executive will reimburse the Company the Retention Bonus in full within 15 days of the date of such resignation or termination.  Should the Company terminate the Executive's employment without Cause or due to the Executive's death or disability at any 

3

time prior to the Executive completing the Retention Period, or should the Executive terminate her employment for Good Reason (as defined below) during the Retention Period, then the Retention Bonus shall be considered earned in full on the date of such termination and it shall not be repaid or reimbursed by the Executive (or her estate) to the Company.  For purposes of this Section 3.02(2) only, Executive will be deemed to have resigned for Good Reason if Executive voluntarily terminates Executive’s employment with Company within thirty (30) days after the occurrence of one or more of the following circumstances:  (a) a material reduction in Executive’s Base Salary or (b) a material diminution of Executive’s duties so that Executive’s duties are no longer consistent with the position of a senior executive reporting directly to the CEO, without Executive’s prior written approval; provided, however, that Company has been provided with written notice of the circumstance and fifteen (15) days from receipt of written notice in which to cure such circumstance.
		
	3.03
	Onboarding Equity

(1)    Subject to the approval of the Compensation Committee, the Executive will be awarded a one-time grant of performance-based restricted stock units consisting of the right to receive on the settlement date 8,360 shares of the Company’s common stock (“PSUs”), in accordance with the Plan and pursuant to the Company’s applicable agreements, practices and policies on granting PSU awards, including the Company’s standard PSU award agreement.  The PSUs will be subject to a three year performance period consisting of the Company’s 2013, 2014 and 2015 fiscal years based on the Company’s achievement of certain financial performance measures determined by the Compensation Committee.  The PSUs will have a vesting date on or about the third anniversary of the effective grant date.
(2)    Subject to the approval of the Compensation Committee, the Executive will be awarded a one-time grant of stock options to purchase 17,570 shares of the Company’s common stock (“Options”) in accordance with the Plan and pursuant to the Company’s applicable agreements, practices and policies on granting stock options, including the Company’s standard stock option agreement.  Such Options shall have a per share exercise price equal to the closing sale price of a share of the Company’s common stock as reported on the Nasdaq Global Select Market on the effective grant date.  The Options will vest in equal instalments over four years (25% per year) on the anniversary of the effective grant date.
		
	3.04
	Incentives

As an employee of the Company, the Executive will be eligible for annual equity awards as determined by the Compensation Committee currently consisting of stock options and PSU awards, based on the Executive’s position. 
		
	3.05
	Benefits

The Executive will be entitled to participate in all of the Company's benefit plans generally available to its senior executives from time to time, including and without limitation, health, disability and death, subject to and in accordance with the terms and conditions of the applicable plans, subject to any express limitations by this Agreement or unless a greater benefit is expressly provided to the Executive under this Agreement.  The Executive further acknowledges that the Company may amend or terminate the benefit plans from time to time.

4

		
	3.06
	Plan documents and right to change

(1)    Some of the compensation and benefit plans and programs referred to in this Agreement are governed by insurance contracts and other plan or policy documents, which will in all cases govern.  
(2)    The Company reserves the right to amend, change or terminate any or all of its plans, programs, policies and benefits at any time for any reason without notice to the Executive, including without limitation bonus, commission, benefit, or compensation plans and programs.
		
	3.07
	Vacation

The Executive will be entitled to accrue up to four (4) weeks paid vacation each year.  Such vacation entitlement will be pro-rated for any part of a year.  The Executive will take such vacation at times having regard to the best interests of the Company pursuant to the Company’s vacation policy.  Except as may be required by applicable law, upon separation of employment, the Executive will not be paid out for any accrued but unused vacation and the Executive agrees that any unearned advanced vacation may be deducted from the Executive’s final pay should her employment with the Company end for any reason.
		
	3.08
	Relocation and Temporary Living Expenses

(1)    Contingent upon and following the Executive’s receipt of the Approvals, the Company will provide the Executive with the following:
		
	(a)
	Relocation services through a third party vendor as per the Company’s relocation policy.  The Company will pay for the following items in connection with the Executive’s Relocation to Vancouver, B.C. (collectively the “Relocation Fees”):

		
	(i)
	the reasonable cost of travel for the Executive and her immediate family to Vancouver, Canada; 

		
	(ii)
	the reasonable cost of transporting the Executive’s household goods and vehicles to Vancouver; 

		
	(iii)
	One house hunting trip for the Executive’s family to Vancouver, as per the Company’s relocation policy; 

		
	(iv)
	Two house hunting trips for the Executive and her spouse to Vancouver, as per the Company’s relocation policy; and

		
	(b)
	In addition, following the Relocation the Executive will receive a flex budget of up to CAD $10,000 (the “Flex Budget”) in accordance with the Company’s Flex Budget Policy for reasonable expenses relating to the relocation but not covered under items (1)(a)(i) and (ii).  The Executive must submit receipts for reimbursement in order to use the Flex Budget.  The Company will also remit up to 43.7% of the tax due to the Canada Revenue Agency (or comparable US Agency) on the relocation benefits in this Section 3.08 (the “Gross Up Amounts”) on behalf of the Executive.

5

(2)    If the Executive terminates her employment with the Company for other than Good Reason (as defined in Section 3.02(2)) or is terminated for Cause any time within one year following the Effective Date, the Executive agrees to repay to the Company the cost of the Relocation Fees, the Flex Budget and Gross Up Amounts.  The Executive shall not be required to repay to the Company the cost of the Relocation Fees, the Flex Budget and Gross Up Amounts if the Company terminates the Executive's employment without Cause or due to the Executive's death or disability, or should the Executive terminate her employment for Good Reason (as defined in Section 3.02(2)).
		
	3.09
	Temporary Living Provision

(1)    The Company will provide the Executive with accommodation in a furnished one bedroom apartment in Vancouver (or in reasonable alternative accommodation), from the grant of the Approvals until Executive’s Relocation, provided the Relocation must be completed no later than thirty (30) days after the Approvals are granted.
(2)    During any time between Executive’s Relocation and the relocation of the Executive’s family to Vancouver, the Executive will be provided with reimbursement for up to two economy round trip flights for the Executive to travel from Vancouver to San Francisco, per calendar month, provided that Executive shall be required to relocate her family to Vancouver no later than July 1, 2014.
		
	3.10
	Tax Advice

The Company will pay for the services of an accountant chosen by the Company to assist with the Executive’s tax filing in Canada and the USA for the 2013 and 2014 tax filing years.
		
	3.11
	Expenses

Other than the relocation expenses specifically addressed in this Agreement, the Company will reimburse the Executive for all reasonable out-of-pocket expenses properly incurred by her in the course of the Executive’s employment with the Company, in accordance with the Company’s expense reimbursement policy in effect as at the date the Executive incurs any such expenses.  The Executive will provide the Company with appropriate statements and receipts verifying such expenses as the Company may require.
ARTICLE 4 - EXECUTIVE’S COVENANTS
		
	4.01
	Full Time Service

The Executive will devote all of her time, attention and effort to the business and affairs of the Company, and will well and faithfully serve the Company and will use her best efforts to promote the interests of the Company and its Affiliates.  
		
	4.02
	Duties and Responsibilities

The Executive will duly and diligently perform all of the duties assigned to her while in the employ of the Company provided such duties and responsibilities are consistent and commensurate with her position as Executive Vice-President, Chief Product Officer.

6

		
	4.03
	Policies, Rules and Regulations

The Executive will be bound by and will faithfully observe and abide by all of the policies, rules and regulations of the Company from time to time in force which are applicable to senior executives of the Company and which are brought to her notice or of which she should reasonably be aware, including but not limited to the Company’s Code of Business Conduct and Ethics and Integrity Line.
		
	4.04
	Conflict of Interest

The Executive will refrain from any situation that may create, seem to create, or be perceived to create a conflict between the Executive’s personal interest and the interests of the Company.  If the Executive feels that she may have a conflict of interest or a potential conflict of interest, the Executive will disclose the situation to, and obtain approval from, the CEO.
		
	4.05
	Restrictive Covenants

Effective commencing on the Relocation, the Executive agrees to be bound by the terms and conditions of the Restrictive Covenant Agreement (the “Restrictive Covenant Agreement”) between the Company and the Executive, a copy of which is attached to this Agreement as Schedule A and is incorporated by reference and deemed to be a part of this Agreement.  
ARTICLE 5 - TERMINATION
		
	5.01
	Termination by the Company

The Company may terminate the Executive’s employment with the Company at any time by giving notice in writing to the Executive and stipulating the last day of employment (the “Termination Date”).
5.02    Termination by the Executive
The Executive may terminate her employment with the Company at any time by giving the Company thirty (30) days’ notice in writing (the “Notice of Resignation Period”).  The Company may waive such notice, in whole or in part, in which case the Executive shall only be entitled to (i) payment of the Executive’s Base Salary for the period from the effective date of the waiver of the Notice of Resignation Period to the end of the Notice of Resignation Period; (ii) continued group benefit coverage under Section 3.05, subject to and in accordance with the terms and conditions of the applicable plans, for the period ending the last day of the Notice of Resignation Period; (iii) the value of the pro-rated vacation leave with pay for that portion of the calendar year up to the end of the Notice of Resignation Period, and (iv) any payments or entitlements under the Bonus Plan that the Executive would otherwise receive during the Notice of Resignation Period.  

7

		
	5.03
	Payments on Termination Without Cause, for Constructive Dismissal, or due to the Executive's Disability

(1)    If the Executive's employment with the Company is terminated by the Company without Cause, then the Executive will only be entitled to the following payments and benefits:
		
	(a)
	Accrued Compensation.  The Company will pay the Executive her Base Salary accrued and unpaid up to and including the Termination Date, including accrued vacation pay, at the rate in effect at the time notice of termination is given by the Company.

		
	(b)
	Bonus Compensation.  The Executive shall not receive any bonus payment whatsoever pursuant to Section 3.02 or the Bonus Plan except such bonus which is already earned and due to be paid up to and including the Termination Date, notwithstanding any period following the Termination Date during which the Executive may receive any payments or benefits under the terms of this Agreement or at law.

		
	(c)
	Notice or Pay in lieu/Severance. The Executive will be entitled to fifteen months’ notice or payment of Base Salary (at the rate in effect prior to the event of termination) in lieu, or a combination of notice and payment (“Severance Payment”).  Any payment made pursuant to this Section 5.03(1)(c) shall be:

		
	(i)
	less any termination or severance pay paid pursuant to the Employment Standards Act, British Columbia, 

		
	(ii)
	subject to regular and statutory withholdings, 

		
	(iii)
	paid in equal instalments on the Company’s normal paydays beginning on the first regular payday occurring 60 days following the termination date, and 

		
	(iv)
	for any payment above the minimum required under the Employment Standards Act (British Columbia), contingent upon the Executive compliance with all surviving provisions of this Agreement and the Executive’s execution of a full general release in a form acceptable to the Company, releasing all claims, known or unknown, that the Executive may have against the Company arising out of or any way related to the Executive’s employment or termination of employment with Company, and such release has become effective in accordance with its terms prior to the 60th day following the Termination Date.

		
	(d)
	Any amounts owing to the Executive pursuant to Section 5.03(1)(c) that are above the minimum required under the Employment Standards Act (British Columbia) are paid in consideration of Executive’s compliance with the Restrictive Covenant Agreement and, accordingly, shall be forfeited if the Executive fails to comply with the Restrictive Covenant Agreement.

		
	(e)
	Performance Share Units and Stock Options.  The Executive’s rights regarding  the PSU’s, the Options, and any other Performance Share Units or stock options from the Company will 

8

be governed by the terms of the Plan and the applicable Performance Share Unit agreements, stock option agreements, and policies.
		
	(f)
	Deductions.  The Company may deduct from the amounts payable by it to the Executive or for her benefit pursuant to Section 5.03(1)(a), (b) or (c), any amounts owing to the Company by the Executive.  Any deduction of an amount payable pursuant to this provision shall not occur until the amount is otherwise payable to the Executive.

		
	(g)
	Fair and Reasonable.  The parties agree that the provisions of Section 5.03  are fair and reasonable and that the amounts payable by the Company to the Executive or for her benefit pursuant to Section 5.03 are reasonable.

		
	(h)
	No Other Payments or Benefits.  The terms and conditions of this Section 5.03 and the amounts paid and the benefits provided to the Executive hereunder are in full satisfaction of any payments or benefits which the Executive may otherwise have been entitled to receive in relation to the termination of this Agreement and her employment hereunder pursuant to the common law and any applicable laws, including, without limitation, the British Columbia Employment Standards Act, the British Columbia Human Rights Code, or any of the Bonus Plan or the Company’s programs, policies, plans, contracts or agreements, whether written or verbal. Upon receipt of the payments and benefits described herein, the Executive will have no action, cause of action, claim or demand against the Company, the Company’s Affiliates or any other person arising out of or in relation to the Executive’s employment under this Agreement or the termination of this Agreement and the Executive’s employment hereunder, other than to enforce the terms of this Agreement and remedy any breach thereof by the Company.

		
	(i)
	No Mitigation.  The Executive shall not be required to mitigate the amount of any payments provided for under Section 5.03 of this Agreement by seeking other employment nor shall any payment provided for in such Section be reduced by any compensation or remuneration and/or benefits earned by the Executive as a result of employment by another employer or the rendering of services after the date of termination.

		
	5.04
	Payments on Termination by Company for Cause

(1)    If the Executive’s employment with the Company is terminated by the Company for Cause, the Executive will only be entitled to receive the following compensation: 
		
	(a)
	Accrued Base Salary.  The Company will pay the Executive her Base Salary accrued but unpaid up to and including the Termination Date, including accrued vacation pay, at the rate in effect at the time the notice of termination is given.

		
	(b)
	Accrued Expenses.  The Company will reimburse the Executive for any business expenses reasonably incurred by the Executive up to and including the Termination Date in accordance with the Company's normal expenses policy applicable to the Executive at that time.

9

		
	(c)
	Bonus Compensation.  The Executive shall not receive any bonus payment whatsoever pursuant to Section 3.02 or the Bonus Plan except such bonus which is already earned and due to be paid up to and including the Termination Date, notwithstanding any period following the Termination Date during which the Executive may receive any payments or benefits under the terms of the Agreement.

		
	(d)
	Performance Share Units and Stock Options.  The Executive’s rights regarding the PSUs, the Options, and any other Performance Share Units or stock options from the Company will be governed by the terms of the Plan and the applicable Performance Share Unit agreements, stock option agreements, and policies.

		
	5.05
	Fair and Reasonable

The Executive acknowledges and agrees that the payments and/or benefits pursuant to this Article 5 will be in full satisfaction of all terms or requirements regarding termination of the Executive’s employment, including without limitation common law notice of termination or compensation in lieu of such notice and compensation for length of service and any other entitlement pursuant to the British Columbia Employment Standards Act as amended from time to time.  Except as expressly provided in this Article 5, the Executive will not be entitled to any termination payments, damages, or compensation whatsoever.
		
	5.06
	Return of Property

Upon termination of her employment with the Company, the Executive will deliver or cause to be delivered to the Company promptly all books, documents, money, securities or other property of the Company that are in the possession, charge, control or custody of the Executive.
		
	5.07
	No Termination Claims

Upon any termination of the Executive’s employment by the Company in compliance with this Agreement or upon any termination of the Executive’s employment by the Executive, the Executive will have no action, cause of action, claim or demand against the Company, its Affiliates, any related or associated corporations or any other person as a consequence of such termination.
		
	5.08
	Resignation as Director and Officer

Upon any termination of the Executive’s employment under this Agreement, the Executive will be deemed to have resigned as a director and officer of all Affiliates of the Company contemporaneously with the date of termination of the Executive’s employment for any reason and will immediately, on request of the Company, sign forms of resignation indicating her resignation as a director and officer of the Company and any Affiliates of the Company and of any other entities of which the Executive occupies similar positions as part of or in connection with the performance by the Executive of her duties under this Agreement, if applicable.

10

		
	5.09
	Provisions which Operate Following Termination

Notwithstanding any termination of the Executive’s employment under this Agreement for any reason whatsoever and with or without cause, all provisions of this Agreement necessary to give efficacy thereto, including without limitation the Restrictive Covenant Agreement, will continue in full force and effect following such termination.
ARTICLE 6 - MISCELLANEOUS
		
	6.01
	Application of Section 409A.

(1)    Notwithstanding anything set forth in this Agreement to the contrary, no amount payable pursuant to this Agreement which constitutes a “deferral of compensation” within the meaning of the Treasury Regulations issued pursuant to Section 409A of the Code (the “Section 409A Regulations”) shall be paid unless and until the Executive has incurred a “separation from service” within the meaning of the Section 409A Regulations.  Furthermore, to the extent that the Executive is a “specified employee” within the meaning of the Section 409A Regulations as of the date of the Executive’s separation from service, no amount that constitutes a deferral of compensation which is payable on account of the Executive’s separation from service shall be paid to the Executive before the date (the “Delayed Payment Date”) which is first day of the seventh month after the date of the Executive’s separation from service or, if earlier, the date of the Executive’s death following such separation from service.  All such amounts that would, but for this Section, become payable prior to the Delayed Payment Date will be accumulated and paid on the Delayed Payment Date.
(2)    The Company intends that income provided to the Executive pursuant to this Agreement will not be subject to taxation under Section 409A of the Code.  The provisions of this Agreement shall be interpreted and construed in favor of satisfying any applicable requirements of Section 409A of the Code.  However, the Company does not guarantee any particular tax effect for income provided to the Executive pursuant to this Agreement.  In any event, except for the Company’s responsibility to withhold applicable income and employment taxes from compensation paid or provided to the Executive, the Company shall not be responsible for the payment of any applicable taxes on compensation paid or provided to the Executive pursuant to this Agreement.  
(3)    Notwithstanding anything herein to the contrary, the reimbursement of expenses or in-kind benefits provided pursuant to this Agreement shall be subject to the following conditions: (1) the expenses eligible for reimbursement or in-kind benefits in one taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits in any other taxable year; (2) the reimbursement of eligible expenses or in-kind benefits shall be made promptly, subject to the Company’s applicable policies, but in no event later than the end of the year after the year in which such expense was incurred; and (3) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.
(4)    For purposes of Section 409A of the Code, the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. 

11

		
	6.02
	Deductions

The Company will deduct all statutory deductions and any amounts authorized by the Executive from any amounts to be paid to the Executive under this Agreement.
		
	6.03
	Entire Agreement

This Agreement, including the Schedules to this Agreement, the Bonus Plan, the Plan, and the Restrictive Covenant Agreement, the Company’s standard stock option agreement and the Company’s standard PSU award agreement, constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and cancels and supersedes any prior understandings and agreements between the parties to this Agreement with respect to the subject matter of this Agreement and any rights which the Executive may have by reason of any such prior agreements.  There are no representations, warranties, forms, conditions, undertakings or collateral agreements, express, implied or statutory between the parties other than as expressly set forth in this Agreement.
		
	6.04
	Severability

If any provision of this Agreement is determined to be invalid or unenforceable in whole or in part, such invalidity or unenforceability will attach only to such provision or part of such provision and the remaining part of such provision and all other provisions of this Agreement will continue in full force and effect.  
		
	6.05
	Amendments and Waivers

No amendment to this Agreement will be valid or binding unless set forth in writing and duly executed by both of the parties.  No waiver of any breach of any provision of this Agreement will be effective or binding unless made in writing and signed by the party purporting to give the same and, unless otherwise provided in the written waiver, will be limited to the specific breach waived.
		
	6.06
	Notices

Any demand, notice or other communication to be given in connection with this Agreement must be given in writing and will be given by personal delivery, by registered mail, or by electronic means of communication addressed to the recipient as follows:
To the Company:
lululemon athletica inc.
1818 Cornwall Avenue
 Vancouver, BC
 V6J 1C7
 Attention: Director of Legal
To the Executive:
Tara Poseley

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or such other address, individual or electronic communication number as may be designated by notice given by either party to the other.
		
	6.07
	Governing Law/Venue

Before the Relocation, this Agreement will be governed by and construed in accordance with the laws of Delaware.  After the Transition Date, this Agreement will be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein.  Each party consents to the jurisdiction and venue of the courts in Vancouver, British Columbia, if applicable, in any action, suit, or proceeding arising out of or relating to this Agreement
Yours truly,
lululemon athletica inc.
	
						
	By:
	/s/ CHRISTINE DAY
	 
	 
	 

	 
	Chief Executive Officer
	 
	 

	 
	 
	 
	 

	SIGNED, SEALED AND DELIVERED in the presence of:
	 
	 

	 
	 
	 
	 

	 
	 
	 
	/s/ TARA POSELEY

	Witness Signature
	 
	Tara Poseley

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

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