Document:

exv10w21

 

Exhibit 10.21

STOCK OPTION AGREEMENT

     THIS AGREEMENT is made effective as of the 6th day of December, 1999, among:

WESTAIM BIOMEDICAL CORP., a corporation incorporated under the laws of Alberta (the
“Corporation”)

- and -

THE WESTAIM CORPORATION, a corporation incorporated under the laws of Alberta
(“Westaim”)

- and-

SCOTT H. GILLIS (the “Executive”)

WHEREAS the Executive is an employee of Westaim Biomedical;

AND WHEREAS the Corporation has established the 1998 Equity Incentive Plan (the “Plan”) to govern
the granting of options to purchase Common Shares in the capital of the Corporation;

AND WHEREAS pursuant to the Plan, the Corporation wishes to grant to the Executive certain options
to purchase Common Shares of the Corporation;

AND WHEREAS Westaim Biomedical is a subsidiary of the Corporation;

AND WHEREAS
the Corporation is a subsidiary of Westaim;

NOW THEREFORE the parties agree as
set forth below.

1. Definitions

Terms and expressions defined in the Plan and not otherwise defined herein shall have the same
meanings when used herein as in the Plan.

In this Agreement,

 

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“Call Period” means the time period commencing upon the date of grant of the Option (as
hereinafter defined) and concluding upon the date that the Common Shares are listed and posted for
trading on an Exchange;

“Change of Control” shall have the meaning as defined in the Change of Control Agreement dated
December 6, 1999 entered into between Westaim Biomedical and the Executive;

“Expiry Date” means December 6, 2009;

“Just Cause” means failure of the Executive to properly carry out his duties after written notice
by the Corporation or Westaim Biomedical of the failure to do so and an opportunity for the
Executive to correct the same within a reasonable time from the date of receipt of such written
notice from the Corporation or Westaim Biomedical, or theft, fraud or dishonesty or misconduct by
the Executive involving the property or affairs of the Corporation or Westaim Biomedical or the
carrying out of the Executive’s duties, or a criminal conviction against the Executive, the nature
of which adversely reflects against the character, integrity or reputation of the Executive or the
ability of the Executive to perform his duties;

“Outstanding Option Rights” means, at a given time, the then remaining rights of the Executive or
his personal legal representative under this Agreement to acquire Optioned Shares, whether such
rights are vested or not;

“Put-Call Notice” means the written notice to be delivered by a party who wishes to exercise a put
right or a call right, as the case may be, to the other party affected by such put right or call
right, as described in section 9 of this Agreement;

“Put Period” means the time period commencing upon the earlier to occur of:

	 	(i)	 	the 5th anniversary of the date of grant of the Option (as hereinafter defined),
	 
	 	(ii)	 	the date of death, Disability, or termination of the employment by
Westaim Biomedical of the Executive without Just Cause; and
	 
	 	(iii)	 	the occurrence of a Change of Control;

and concluding on the date that the Common Shares are listed and posted for trading on an Exchange;

“Termination Date” means the date which is the earlier of (i) the date on which the Executive’s
employment with Westaim Biomedical is terminated, and (ii) the date upon which Westaim Biomedical
notifies the Executive, or the Executive notifies Westaim Biomedical of such termination; and

“Westaim Biomedical” means Westaim Biomedical Inc., a company incorporated under the laws of
Delaware.

 

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2. Grant of Options

The
Corporation hereby grants to the Executive, subject to the terms and conditions of this
Agreement and the Plan, an option (the “Option”) to purchase 300,000 Common Shares (the “Optioned Shares”)
a $2.40 per share (the “Option Price”). This Agreement
supersedes and replaces the section titled
“Long Term Incentives” of the offer of employment letter
dated November 1, 1999 made by Westaim
to the Executive.

3. Times at Which Options Become Exercisable

Except as otherwise specifically provided in this Agreement, the Option shall be exercisable
to the extent and within the following times:

	 	(a)	 	as to 100,000 Optioned Shares, from and after December 6, 2000, until the
Expiry Date;
	 
	 	(b)	 	as to a further 100,000 Optioned Shares, from and after December 6, 2001,
until the Expiry Date; and
	 
	 	(c)	 	as to the final 100,000 Optioned Shares, from and after
December 6, 2002,
until the Expiry Date;

provided that, such Option may also be exercised in respect of all or any portion of the
Optioned Shares in respect of which it was entitled to be exercised in any prior year but was
not so exercised.

4. Expiry of Option

The Option shall terminate on, and may not be exercised in whole or in part after, 5:00 p.m.
(Calgary time) on the Expiry Date.

5. Exercise in a Change of Control of the Corporation

Notwithstanding section 3, in the event that a Change of Control occurs prior to the Expiry
Date, the Option shall immediately become fully exercisable as to all the Optioned Shares.

6. Termination of Employment

	 	(a)	 	If before the Expiry Date, the Executive’s employment with Westaim
Biomedical is terminated for Just Cause or by the resignation of the Executive for reasons
other than the death or Disability of the Executive, the Executive may, within 30 days
after the Termination Date or before the Expiry Date, whichever is earlier, exercise
all or any portion of the Options of the Executive that have vested as of the
Termination Date in accordance with the terms of this Agreement. At the end of such period
or the Expiry Date, whichever is earlier, the Option shall forthwith terminate and
be of no further force or effect whatsoever.
	 
	 	(b)	 	If before the Expiry Date, the Executive’s employment with Westaim
Biomedical is terminated by Westaim Biomedical for reasons other than Just Cause or the death
or

 

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	 	 	 	Disability of the Executive, then the Option shall continue to vest and remain in
force, and shall, subject to section 9(b)(iv) of the Employment Agreement between
Westaim Biomedical and the Executive dated December 6, 1999, be exercisable by the
Executive at the times and to the extent provided in this Agreement for 12 months
after the Termination Date or until the Expiry Date, whichever is earlier (the
“Specified Period”); provided, however, that the Corporation may during the
Specified Period (but not after the expiry of the Call Period), by written notice
to the Executive, (i) cause all but not less than all of the Options that would
have vested during the Specified Period to immediately vest, and (ii) limit the
period (the “Amended Specified Period”) during which the Executive is entitled to
exercise such Options so as to have such right to exercise end on the 30th day
following the date the Executive receives such written notice. In all
circumstances, the Option shall forthwith terminate and be of no further force or
effect whatsoever at the end of the Specified Period or the Amended Specified
Period, whichever is earlier. If the Corporation limits the period during which the
Executive is permitted to exercise the Option as specified in 6(b)(ii) above, then
the Executive shall, notwithstanding section 8, be entitled to apply as against the
applicable purchase price payable for the Optioned Shares being purchased all or
part of the proceeds to be paid to the Executive as a result of any exercise by the
Executive of the put option specified in section 9(b).

7. Death or Disability of the Executive

In the event of the death or Disability of the Executive, the personal legal representative (or,
in the case of Disability, the Executive himself if he is competent to do so) may, within 180 days
after the date of death or Disability or before the Expiry Date, whichever is earlier, exercise
all or any portion of the Options of the Executive that have vested as of the date of death or
Disability. At the end of such period or the Expiry Date, whichever is earlier, the Option shall
forthwith terminate and be of no further force or effect whatsoever.

8. Method of Exercise of Option

The Option shall be exercisable by the Executive or his personal legal representative from time to
time, in accordance with the terms and provisions of this Agreement and the Plan, by giving notice
in writing to the Corporation referring to this Agreement and setting forth the number of the
Optioned Shares in respect of which the Option is then being exercised, and such notice shall be
accompanied by cash or a certified cheque payable to the Corporation, or any other form of payment
satisfactory to the Corporation, in the full amount of the purchase price for the Optioned Shares
being purchased (such purchase price being equal to the Option Price times the number of Optioned
Shares being purchased). The parties acknowledge and agree that during the Call Period the original
share certificate or certificates for the Optioned Shares being purchased shall be legended as
provided for in section 12 of this Agreement and shall be retained by the secretary of the
Corporation or his designee and the Executive agrees to immediately, upon the request of Westaim or
the Corporation, duly endorse such share certificate or certificates in blank for transfer for
purposes of section 9 of this Agreement.

 

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9. Puts and Calls

	 	(a)	 	Westaim shall be irrevocably entitled to deliver to the Executive, at any time
during the Call Period, a Put-Call Notice requiring the Executive to sell to Westaim all
but not less than all of the Outstanding Option Rights and/or all or such portion of the
Optioned Shares held by the Executive as may be specified in such Put-Call Notice
and, upon receipt of such Put-Call Notice, the Executive shall sell to Westaim that
number of the Outstanding Option Rights and/or Optioned Shares described in such
Put-Call Notice upon the terms and conditions set out in section 9(c) of this
Agreement. As a condition precedent to Westaim delivering a Put-Call Notice to the
Executive in circumstances where there are Outstanding Option Rights of the
Executive which Westaim intends to purchase pursuant to such Put-Call Notice,
Westaim shall, at least 3 business days prior to delivering such Put-Call Notice
(the
“3 Day Period”), deliver to the Executive a preliminary Put-Call Notice (the
“Preliminary Put-Call Notice”) specifying therein that Westaim will be delivering at
the end of the 3 Day Period a Put-Call Notice to the Executive which will, at a
minimum, require the Executive to sell to Westaim all but not less than all of the
Outstanding Option Rights held by the Executive at such time. Upon receipt of such
Preliminary Put-Call Notice, the Executive shall be entitled during the 3 Day Period
to fully exercise the Option (notwithstanding section 3) with respect to all
Outstanding Option Rights. The Optioned Shares acquired by the Executive as a
result of exercising such Outstanding Option Rights shall be included in the
Optioned
Shares which Westaim requires the Executive to sell to Westaim pursuant to the Put-Call Notice. The call right described in this section 9(a) shall be assignable
without
restriction by Westaim.
	 
	 	(b)	 	The Executive shall be irrevocably entitled to deliver to the Corporation, at
any time
during the Put Period, a Put-Call Notice requiring the Corporation to purchase all
or
any portion of the Optioned Shares held by the Executive and, upon receipt of such
Put-Call Notice, the Corporation shall purchase that number of the Optioned Shares
described in such Put-Call Notice upon the terms and conditions set out in section
9(c) of this Agreement.
	 
	 	(c)	 	The sale of the Outstanding Option Rights and/or Optioned Shares pursuant to
section 9(a) and the sale of the Optioned Shares pursuant to section 9(b) of this
Agreement shall be governed by the following terms and conditions:

	 	(i)	 	the purchase price payable for such Outstanding Option Rights
and/or Optioned Shares shall be the fair market value of such Outstanding
Option Rights (being the amount, if any, by which the fair market value of an
Optioned Share exceeds the Option Price of such Outstanding Option) and/or
Optioned Shares as at the date of the Put-Call Notice as established by Westaim
or the Corporation, as the case may be, acting reasonably, (the “Purchasing
Party”) and notified in writing (the “FMV Notice”) to the Executive by the
Purchasing Party either in the Put-Call Notice (where Westaim is exercising its
call right), or within 15 days of receipt by the

 

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	 	 	 	Corporation of the Put-Call Notice (where the Executive is exercising his put right);
	 
	 	(ii)	 	if the Executive does not agree with the fair market value established by the Purchasing
Party in accordance with section 9(c)(i) above, the Executive shall so notify the Purchasing
Party in writing (the “Notice of Objection”) within 15 days of the receipt by the Executive
of the FMV Notice and include in the Notice of Objection the Executive’s determination of the
fair market value for such Outstanding Option Rights and/or Optioned Shares and the basis for
arriving at such amount (if the Executive does not deliver to the Purchasing Party a Notice
of Objection within such 15 day period, the Executive shall be deemed to have accepted the
fair market value established by the Purchasing Party in accordance with section 9(c)(i)
above);
	 
	 	(iii)	 	if, in circumstances where the Executive provides a Notice of Objection to the Purchasing
Party, the Executive and the Purchasing Party do not agree on the fair market value for such
Outstanding Option Rights and/or Optioned Shares within 15 days of the date of receipt by the
Purchasing Party of the Notice of Objection, the matter shall be referred in a timely manner
for arbitration under the Arbitration Act (Alberta) (in any such arbitration the parties
agree to proceed as expeditiously as possible). The arbitrator shall be such individual as is
mutually agreed to in writing by the Executive and the Purchasing Party or, failing such
agreement within 25 days of the date of receipt by the Purchasing Party of the Notice of
Objection, such individual as shall be selected by a Justice of the Court of Queen’s Bench of
Alberta upon the application of either the Executive and/or the Purchasing Party. The
arbitrator shall be a partner with a major accounting firm, other than the auditors of
Westaim (currently Deloitte & Touche), or a credible valuation firm, or, with the consent of
the Purchasing Party, a qualified individual from an investment bank. Each of the Executive
and the Purchasing Party shall bear all costs of their respective advisors and
representatives. The remaining arbitration costs shall be borne by the Purchasing Party if
the arbitrator makes an award in favour of the Executive and shall be split equally by the
Purchasing Party and the Executive if the arbitrator makes an award in favour of the
Purchasing Party;
	 
	 	(iv)	 	the Corporation and Westaim shall, subject to the Executive agreeing to reasonable
safeguards with respect to confidentiality, give the Executive, on request, immediate access
to corporate records relevant to determining the fair market value of his Outstanding Option
Rights and/or Optioned Shares;
	 
	 	(v)	 	notwithstanding any referral to arbitration of the fair market value of such Outstanding
Option Rights and/or Optioned Shares pursuant to section 9(c) (iii), the closing of the sale
of such Outstanding Option Rights and/or Optioned Shares shall not be delayed and the sale and
subsequent cancellation of such Outstanding Option Rights and/or the sale and transfer

 

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	 	 	 	of such Optioned Shares shall take place and shall for all purposes be deemed to have
taken place at the principal office of the Purchasing Party on the 20th day following the
date of the FMV Notice unless a Notice of Objection has been duly delivered to the
Purchasing Party within the time period specified in section 9(c)(ii) in which case such
closing shall take place at the principal office of the Purchasing Party on the 5th day
following the date of agreement by the Purchasing Party and the Executive as to the
applicable fair market value of such Outstanding Option Rights and/or Optioned Shares or
the 15th day following the date of receipt by the Purchasing Party of the Notice of
Objection, whichever is earlier, or, in any event, at such other place or on such other
date as the Purchasing Party and the Executive may agree upon; and
	 
	 	(vi)	 	unless otherwise agreed by the Purchasing Party and the Executive, the purchase price for
such Outstanding Option Rights and/or Optioned Shares shall, for purposes of closing, be the
purchase price set out in the FMV Notice and such purchase price shall be paid in full by the
Purchasing Party to the Executive at the closing of the sale of such Outstanding Option
Rights and/or Optioned Shares (if necessary, the closing purchase price shall be subsequently
adjusted to account for the decision of the arbitrator(s) under section 9(c)(iii) and the
Purchasing Party shall within 5 days of the date of the decision of the arbitrator(s) pay to
the Executive any amount determined by the arbitrator(s) to be owing to the Executive in
connection with such Outstanding Option Rights and/or Optioned Shares above the amounts
previously paid by the Purchasing Party to the Executive, but the transaction shall
nevertheless and for all purposes be deemed to have irrevocably closed at the time of closing
as specified in section 9(c)(v));
	 
	 	(vii)	 	notwithstanding section 9(c)(vi), in the sole discretion of Westaim (if Westaim is the
Purchasing Party) and, if other than Westaim, the Purchasing Party and Westaim, all or any
portion of the closing purchase price and/or any subsequent adjustment thereto referred to in
section 9(c)(vi) may, subject to compliance with any legal, regulatory, stock exchange or
other similar requirements and to such method of payment not being materially adverse to the
interests of the Executive, be paid by the issuance to the Executive of such number of common
shares in the share capital of Westaim as equal the quotient obtained when the dollar amount
otherwise payable to the Executive pursuant to section 9(c)(vi) is divided by the weighted
average trading price of the common shares of Westaim on The Toronto Stock Exchange for the 5
trading days immediately preceding the time of closing as specified in section 9(c)(v);
	 
	 	(viii)	 	upon the closing of the sale of such Outstanding Option Rights and/or Optioned Shares, the
Executive (the “Releasor”, which term includes the Executive’s successors, assigns, heirs,
executors, personal representatives and administrators) shall provide a release to the
Purchasing Party in form

 

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	 	 	 	acceptable to the Purchasing Party releasing and forever discharging the
Purchasing Party and its Affiliates and their respective directors,
officers, employees and agents (the “Releasees”, which term includes their
respective successors, assigns, heirs, executors, personal representatives
and administrators) of and from any and all actions, causes of action,
suits, debts, liabilities, agreements, claims and demands whatsoever which
the Releasor ever had, now has or may hereafter have against the Releasees,
or any of them, for or by reason of, or in any way arising out of the Plan
or this Agreement other than in relation to an issue which at the time is
the subject of arbitration under section 9(c)(iii) or with respect to the
unmatured or unexercised rights of the Executive under the Plan or this
Agreement unrelated to the Outstanding Option Rights and/or Optioned Shares
which are the subject of such sale, and if such a release in form
satisfactory to the Purchasing Party is not provided by the Executive to the
Purchasing Party at such closing, the Releasor shall be deemed to have so
released the Releasees;
	 
	 	(ix)	 	for purposes of the sale of such Outstanding Option Rights
and/or Optioned Shares, the Executive covenants and agrees to take or cause to
be taken all such actions and obtain such approvals as may be necessary to
effectively transfer and assign to the Purchasing Party such Outstanding
Option Rights and/or Optioned Shares at the time of closing as specified in
section 9(c)(v) and the Executive hereby irrevocably appoints the secretary of
the Purchasing Party to be its attorney in order to execute any deeds,
transfers, conveyances, assignments or other documents in the name and on
behalf of the Executive in order to effect the foregoing including without
limitation irrevocably constituting and appointing the secretary of the
Corporation to be the attorney of the Executive to cancel such Outstanding
Option Rights and/or transfer such Optioned Shares on the register of
transfers and books of the Corporation, with full power of substitution in the
premises.

	 	(d)	 	The Executive acknowledges and agrees that the establishment of the fair
market value of the Outstanding Option Rights and/or Optioned Shares under this
section 9 is purely an economic issue not giving rise to harm which would entitle the
Executive to injunctive or other similar relief or to otherwise delay the closing of
any transaction contemplated under this section 9 and the Executive covenants and
agrees not to seek, directly or indirectly, any such relief or delay.

10. Plan Interpretation

This Agreement and the terms and conditions herein set forth are subject in all respects to the
terms and conditions of the Plan, the terms of which are hereby made a part of this Agreement. The
Plan provides that the Committee may from time to time make changes to the Plan, interpret the
Plan, and establish regulations for the administration thereof, provided that such actions by the
Committee do not adversely alter or impair Options granted pursuant to this Agreement. The
Executive, by acceptance of this Agreement, agrees to be bound by the Plan and such regulations and
acknowledges having received a copy of the Plan and this Agreement, being advised by the

 

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Corporation and Westaim to seek independent counsel with respect to the Plan and this Agreement,
and to having read and understood the Plan and this Agreement.

11. Compliance with Law/Securities Regulations

The Option may not be exercised if such exercise or the issuance of any Common Shares issuable
upon exercise would be contrary to law or the regulations of any governmental authority having
jurisdiction. The Executive agrees to comply with all regulatory requirements applicable to the
resale of Common Shares acquired upon the exercise of any Options.

12. Transfer and Assignment

Except as provided in sections 7 and 9, the Executive’s rights under Options granted under this
Agreement and, during the Call Period, with respect to any Optioned Shares (which shall be
appropriately legended) are not assignable or transferable by the Executive or subject to any
other alienation, sale, pledge or encumbrance by the Executive. The obligations of the Executive
shall be binding on his heirs, executors and administrators. This Agreement shall be binding upon
any successor or successors of the Corporation.

13. Notice

Any notice required to be given under the terms hereof shall be given by a party hereto by
delivering such notice to the party to which it is to be given at the address below or at such
other existing municipal address as such party may provide in writing to the other party in lieu
thereof in accordance with this section 13 or by sending such notice by means of recorded
telecommunications to the party to which it is to be given at the fax number below or at such other
fax number as such party may provide in writing to the other parties in lieu thereof in accordance
with this section 13:

	 	 	 
	If to the Corporation:

	 	c/o The Westaim Corporation
	 

	 	Suite 1010, West Tower
	 

	 	144 - 4th Avenue S.W.
	 

	 	Calgary, Alberta T2P 3N4
	 
	 	 
	 

	 	Attention: Senior Vice President, General Counsel
	 

	 	Fax: (403) 237-8181
	 
	 	 
	If to Westaim:

	 	The Westaim Corporation
	 

	 	Suite 1010, West Tower
	 

	 	144 -  4th Avenue S.W.
	 

	 	Calgary, Alberta T2P 3N4
	 
	 	 
	 

	 	Attention: Senior Vice President, General Counsel
	 

	 	Fax: (403) 237-8181

 

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	If to the Executive:

	 	Scott H. Gillis
	 

	 	80 Alford Circle
	 

	 	Concord, MA 01742

Any such notice shall be deemed to have been received by a party hereto immediately upon delivery
to such party at its address in such notice or on the first business day in the place where the
recorded telecommunication is to be received following the day of sending.

14. Time of the Essence

Time shall be of the essence of this Agreement.

15. Interpretation

The contra preferentem rule shall not be applied in any interpretation of this Agreement.

IN
WITNESS WHEREOF the parties have executed this Agreement.

	 	 	 	 
	WESTAIM BIOMEDICAL CORP.

 	 
	By:  	/s/ (ILLEGIBLE)
 	 
	By:  	(ILLEGIBLE) 	 
	 	 	 
	 

 

Witness

	 	 	 	 
	THE WESTAIM CORPORATION

 	 
	By:  	/s/ (ILLEGIBLE)
 	 
	By:  	(ILLEGIBLE) 	 
	 	 	 
	 

/s/ SCOTT H. GILLIS

 

SCOTT H. GILLIS

 

 

December 6, 1999

THE WESTAIM CORPORATION and
WESTAIM
BIOMEDICAL CORP.
c/o Suite 1010,144 — 4th Avenue S.W.
Calgary, AB

T2P 3N4

Re: Stock Option Agreement made as of the 6th day of December, 1999 (the “Stock Option Agreement”)

 

The purpose of this letter is to confirm the following:

	1.	 	I acknowledge and understand that, pursuant to the terms of the Stock Option Agreement
(Section
9), I have granted to The Westaim Corporation and Westaim Biomedical Corp. (“Westaim”) the
right to purchase from me at any time prior to a public listing of the shares of Westaim
Biomedical Corp. (the “Company”), all of the options issued to me under the Stock Option
Agreement, as well as any shares of the Company that may be issued to me as a result of my
exercise of any options granted to me under the Stock Option Agreement.
	 
	2.	 	I acknowledge that I have read and understand the mechanism for establishing the fair market
value for the price of my shares and/or options in the event that Westaim exercises its
rights
described in paragraph 1 above, and that I am in agreement with this process. Further, I
understand that if the determination of such fair market price is ultimately decided by
arbitration,
then notwithstanding this, the completion of the sale of my options and/or shares to
Westaim will
still be completed in accordance with the timeframe set out in paragraph 9(c)(v) of the
Stock
Option Agreement, which will be prior to completion of the arbitration, and that the
arbitration
will be solely to determine if there needs to be an adjustment to the purchase price paid
to me by Westaim for my options and/or shares.
	 
	3.	 	I acknowledge and agree that if Westaim exercises its option as provided for in paragraph 1
above
(which it is able to do in its sole discretion), I do not have any ability to prevent the
sale of my
shares and/or options to Westaim, including by way of attempting to obtain an injunction or
otherwise, and that this provision is necessary and reasonable and that I have agreed to it
and
fully understand it.
	 
	4.	 	I have been advised by Westaim and the Company to obtain independent legal advice in respect
of this matter and I have either obtained such independent advice or have waived my right
to do so.

Sincerely,

/s/ Scott H. Gillis

Scott H. Gillisexv10w22

 

EXHIBIT 10.22

(NUCRYST LOGO)

March 16,2005

Personal & Confidential

Eliot M. Lurier, CPA

3 Whitridge Road

Natick, MA 01760

Re: Offer of Employment

Dear Eliot,

I am pleased to offer you a position with NUCRYST Pharmaceuticals Inc., currently a subsidiary
company of The Westaim Corporation (“Westaim”), on the following terms and conditions:

	 	 	 
	Employer:

	 	NUCRYST Pharmaceuticals Inc. (“NUCRYST” or the “Company”)
	 
	 	 
	Position:

	 	Vice President, Finance and Administration
	 
	 	 
	Reporting To:

	 	Scott H. Gillis, President
	 
	 	 
	Start Date:

	 	April 5, 2005 or a date as mutually agreed.
	 
	 	 
	Base Salary:

	 	U.S. $135,000.00 per annum, payable in arrears in equal semi-monthly installments.
	 
	 	 
	Variable Pay:

	 	An annual bonus (prorated for any partial year) based on the Company’s variable pay
program, utilizing the following percentages of base salary:

	 	 	 	 	 
	Threshold
	 	 	20	%
	 
	 	 	 	 
	Target
	 	 	35	%
	 
	 	 	 	 
	Stretch
	 	 	50	%

	 	 	 
	Long Term

Incentives:

	 	You will participate in the NUCRYST Pharmaceuticals Corp. 1998 Equity Incentive Plan, as amended,
(“Plan”) whereby you will be granted 30,000 stock options. Your options will have an exercise price
equal to the exercise price for options issued under the Plan in effect on your commencement date.

NUCRYST Pharmaceuticals Inc.

 

50 Audubon Road, Suite B, Wakefield, MA 0188O  Telephone: 781-224-1444  Fax: 781-246-6002

 

 

(NUCRYST LOGO)

Eliot M. Lurier

March 16, 2005

Page 2

	 	 	 
	Confidentiality &
	 	 
	Non-Compete:

	 	As a condition of your employment and prior to commencing employment, you will be required to sign
the Company’s standard Employee Confidentiality Agreement, in the form attached to this letter,
relating to confidentiality of information and assignment of inventions and, in your case,
containing a non-compete covenant.
	 
	 	 
	Location:

	 	Wakefield, Massachusetts
	 
	 	 
	Benefits:

	 	NUCRYST will provide you with the opportunity to participate in a comprehensive Company sponsored
benefit plan which includes health, dental, life and disability insurance and a 401k plan (refer to
the attached document). Your participation in the Company benefit plan will be pursuant to the
provisions of the benefit plan, as it may be modified, amended or eliminated from time-to-time.
	 
	 	 
	Vacation:

	 	Four weeks annually, prorated from your start date.

This letter is not to be construed as an agreement, express or implied, to employ you for any
stated term; rather, your employment with the Company will be “at-will”, meaning that either you or
NUCRYST may terminate your employment at any time and for any reason.

This offer is open for acceptance until 5:00 p.m. (Eastern Standard Time) for five (5) days from
the receipt of this letter. Please confirm your acceptance of this offer by signing below and
forwarding to my attention.

Eliot, we are very excited at the prospect of you joining NUCRYST and are confident that it will be
a great fit for both of us.

Sincerely,

 

/s/ Scott H. Gillis

Scott H. Gillis

President

NUCRYST Pharmaceuticals Inc.

Accepted this 17 day of MARCH 2005

/s/ Eliot
M. Lurier

 

NAME

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