Document:

Exhibit 4.4

 

AMENDMENT #1 TO THE SERVICE CONTRACT FOR MANAGING
DIRECTOR ENTERED INTO ON

SEPTEMBER 1ST, 2008

 

	
  BETWEEN:

  	
   

  	
  ÆTERNA
  ZENTARIS GmbH,
  Weismüllerstraße 50, 60314 Frankfurt am Main

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (hereinafter
  referred to as the “Company”)

  
	
   

  	
   

  	
   

  
	
  AND:

  	
   

  	
  PROF. JUERGEN
  ENGEL,
  domiciled [civic address
  redacted for privacy reasons], Alzenau

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (hereinafter
  referred to as the “Managing Director”)

  

 

WHEREAS the
Company and the Managing Director entered into a Service Contract for Managing
Director (“Service Contract”) on December 5, 2007;

 

WHEREAS the
Managing Director has since been appointed President and Chief Executive
Officer of the Company’s parent Company;

 

AND WHEREAS
it has become appropriate to amend some provisions of the original Service
Contract in order to take into account the above-mentioned appointment.

 

THEREFORE, in
consideration of the mutual promises and covenants hereinafter set forth, the
parties agree as follows:

 

1.             Article 2 of the Service Contract shall
now read as follows:

 

The Managing Director shall
devote his full working time and ability to the Company’s business and also to
that of the Company’s parent company, Æterna Zentaris Inc. Any other activity
for remuneration and any activity which normally entitles to remuneration,
including any part time work, is subject to the explicit prior written consent
of the Company. The Company may refuse to grant such consent without giving
reasons therefore. The Company hereby already consents to the Managing Director’s
employment agreement with Æterna Zentaris Inc. as its President and Chief
Executive Officer and also to his secondary consulting activities for Degussa
AG (now Evonik Degussa), Neryx Biopharmaceuticals and as a member of the
scientific advisory board of GIG, as long as it is non-competitive with the
Company ́s business.

 

2.             Article 5 of the Service Contract shall
now read as follows:

 

5.1           The
Managing Director shall be entitled to a gross annual salary in the amount of €
312,000 as of September 1st, 2008 to be paid
according to the Company’s standard payroll practice. The annual salary will be
revised yearly to be effective on January 1st of each calendar year.

 

5.2           The
Managing Director shall be
entitled to an annual target bonus, in respect of each full or partial fiscal
year of the Company, which is from January 1 to December 31. The
annual bonus for the 2008 fiscal year, which shall not be prorated, shall be € 91,000
for the first 8 months on an annual basis and € 156,000 for the last 4 months
on an annual basis. In all cases, the Executive’s eligibility to such annual
bonus is conditional upon the attainment of annual targets that shall be agreed
upon between the Board of the parent Company and the Executive. Actual bonus payments,
if any, may be less than equal to or equal to the target.

 

1

 

5.3           By payment
of the above mentioned remuneration, all activities, which the Managing
Director has to perform under this Service Contract, shall be compensated. In
particular, the Managing Director shall not be entitled to any additional
compensation of overtime work nor shall he be entitled to any other salary or
bonus from the parent Company.

 

3.             All other provisions of the Service Contract
remain unchanged and in full force.

 

IN WITNESS WHEREOF the parties hereto have caused this amendment
to be executed on September 1st, 2008.

 

	
  ÆTERNA ZENTARIS GmbH

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Prof. Juergen Engel

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

2Exhibit 4.5

 

EMPLOYMENT
AGREEMENT OF PROF. JUERGEN ENGEL

 

ÆTERNA ZENTARIS INC.

 

Dated
September 1st, 2008

 

 

EMPLOYMENT
AGREEMENT

 

	
  BETWEEN:

  	
   

  	
  ÆTERNA
  ZENTARIS INC., a Corporation duly incorporated under the laws of
  Canada, having its head office at 1405 Parc-Technologique Blvd., Québec, QC GIP 4P5

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (hereinafter
  the “Corporation”)

  
	
   

  	
   

  	
   

  
	
  AND:

  	
   

  	
  PROF.
  JUERGEN ENGEL, at [civic address redacted for privacy reasons] Alzenau

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (hereinafter
  the “Executive”)

  
	
   

  	
   

  	
   

  
	
  AND:

  	
   

  	
  ÆTERNA
  ZENTARIS GmbH, Weismüllerstraße 50, 60314 Frankfurt am Main

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (hereinafter
  the “Intervening Party”)

  

 

SECTION 1 — PURPOSE

 

1.1           The Corporation wishes to employ the Executive as its President and
Chief Executive Officer, starting on September 1st,
2008 (the “Effective date”).  The Executive is willing to be employed by
the Corporation, on the terms and conditions set forth herein in this
Employment Agreement (the “Agreement”).  The Executive shall report to the Board of
Directors of the Corporation (the “Board”).  In addition to the duties and
responsibilities inherent to his position, the Executive shall have any powers
and carry out mandates that may be entrusted to him by the Board from time to
time.

 

SECTION 2
— DUTIES

 

2.1           The Executive agrees to devote his full business time to the
Corporation, including its subsidiaries, Æterna Zentaris GmbH and Zentaris IVF
GmbH, to make every effort necessary to perform adequately the duties that are
assigned to him and to act in the best interests of the Corporation at all
times. The Corporation hereby consents to the Executive’s secondary consulting
activities for Degussa AG (now Evonik Degussa), Neryx Biopharmaceuticals and as
a member of the scientific advisory board of GIG, as long as it is
non-competitive with the Corporation’s business.  The Executive shall refrain from any activity
that could be prejudicial to the Corporation’s interests.  In performing his duties with the
Corporation, the Executive shall act faithfully and honestly at all times.

 

2.2           The Executive shall carry out his duties from Frankfurt am Main, Germany.  However, the Executive acknowledges that his
position will require traveling, and the Executive agrees to devote the
necessary and reasonable time to such traveling.

 

2.3           The Executive declares that he has no obligation toward any person,
including his former employers, that would be incompatible with this Agreement
or that could be an impediment to the performance of his duties with the
Corporation. For the avoidance of doubt, the Executive has to fulfill all
duties with respect to his position as Managing Director of the Intervening
Party.

 

1

 

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

 

2.5           The Executive shall be entitled to sit on a board of directors of
another corporation, solely with the prior written authorization of the Board.

 

SECTION 3
— COMPENSATION, VACATION AND STOCK OPTIONS

 

3.1           Compensation and Vacation

 

                The compensation and vacation to which
the Executive is entitled shall be those provided for in the Service Contract
for Managing Director entered into between the Executive and the Intervening
Party on December 5, 2007 and modified on September 1st, 2008 (the “Contract”) and shall
continue after the Contract has expired for the duration of the present
Agreement.

 

3.2           Stock Options

 

Subject to regulatory approval, the
Corporation shall grant to the Executive, no later than the Effective Date or as soon as legally
possible, 200,000 options under the Corporation’s Stock
Option Plan (the “Plan”).  These stock options shall vest equally over a
period of three (3) years from the date of the original grant.  The said options, the exercise price, the
period during which they may be exercised and the other terms and conditions
attaching to their exercise shall be subject to the terms and conditions of the
Plan.

 

SECTION 4
— GROUP INSURANCE

 

4.1           Medical/Dental Insurance, Life and Disability Insurance

 

For the avoidance of doubt, the Executive
shall receive all social security benefits under German law as stated in the
Contract as well as any pension stated in the Contract.

 

SECTION 5
— DURATION AND TERMINATION

 

5.1           Duration

 

This contract is for an indeterminate term.

 

5.2           Automatic termination

 

Upon the resignation or the death of the Executive, he or his
dependents, as the case may be, can claim to be paid his monthly gross base
salary for a duration of three months.

 

The Executive’s employment may also be terminated by the Corporation
for cause upon simple notice in writing transmitted to the Executive, without
the Corporation being bound to pay any compensation whatsoever, in the
following cases, hereinafter referred to as “Cause”:

 

a)     If the Executive is declared bankrupt or insolvent or makes an
assignment of his property or is placed under protective supervision, which
situations the Executive acknowledges to be incompatible with the continuation
of his employment.

 

b)    If the Executive becomes physically or mentally disabled to such an
extent as to make him unable to perform his duties normally and adequately and
without his fault. In such a case, he shall be entitled to a continuation of
his monthly gross base salary for a duration of up to one year or, if earlier, until
the end of this Agreement, provided the relevant doctor’s certificates are
furnished.

 

c)     If the Executive breaches the terms of this Agreement.

 

2

 

d)    If the Executive commits any fraud, theft, embezzlement or other
criminal act of a similar nature.

 

e)     If the Executive has committed serious misconduct or willful negligence
in the performance of his duties.

 

f)     If the Executive refuses or fails to follow reasonable directives of
the Corporation.

 

g)    If the Executive’s demonstrates willful or reckless conduct causing
material damage to the Corporation or the Corporation’s business.

 

h)    If the Executive misuses or abuses alcohol, drugs or controlled
substances.

 

5.3           Termination without Cause

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

c)     The Executive acknowledges that the said
payments are fair and sufficient and, in consideration of the Corporation
giving him such payments in the event of the termination of his employment
without cause, the Executive shall grant the Corporation and its directors,
officers, employees, shareholders, representatives and agents, and the
directors, officers, employees, shareholders, representatives and agents of any
affiliate of the Corporation, a full and final release and discharge from any
and all claims, past, present or future, that he has or may have, arising
directly or indirectly from the termination of his employment, whether for
prior notice of termination, severance pay, damages in lieu thereof or for any
other reason.

 

3

 

5.4           Resignation

 

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

 

SECTION 6
— TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE OF CONTROL

 

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

 

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

 

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

 

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

 

SECTION 7
— CONFIDENTIALITY

 

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

 

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

 

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

 

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

 

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

 

7.2.2        technical
knowledge and methods, quality control processes, inspection methods,
laboratory and testing methods, information processing programs and systems;
manufacturing processes, plans, drawings, tests, test reports and software;

 

7.2.3        equipment,
machinery, devices, tools, instruments and accessories;

 

7.2.4        financial
information, production cost data, marketing strategies, raw materials
supplies, suppliers, staff and client lists and related information, marketing
plans, sales techniques and policies, including pricing policies, sales and
distribution data and present and future expansion plans; and

 

4

 

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

 

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

 

SECTION 8
— OWNERSHIP OF INTELLECTUAL PROPERTY

 

8.1           The
Executive hereby assigns and agrees to assign to the Intervening Party, for the
whole duration of this Agreement, all his intellectual property rights as of
their creation and to make full and prompt disclosure to the Intervening Party
of all information relating to anything made or designed by him or that may be
made or designed by him during the period of his employment, whether alone or
jointly with other persons, or within a period of two (2) years following
the termination of his employment and resulting from or arising out of any work
performed by the Executive on behalf of the Corporation or connected with any
matter relating or possibly relating to any business in which the Corporation
or any of its subsidiaries or related or associated companies is involved
unless specifically released from such obligation in writing by the Board.

 

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

 

8.3           At
any time during the period of his employment or after the termination of his
employment, the Executive shall sign, acknowledge and deliver, at the
Corporation’s expense, but without compensation other than a reasonable sum for
his time devoted thereto if his employment has then terminated, any document
required by the Corporation to give effect to section 10.1, including patent
applications and documents evidencing the assignment of ownership. The
Executive shall also provide such other assistance as the Corporation may
require with respect to any proceeding or litigation relating to the protection
or defense of intellectual property rights belonging to the Corporation.

 

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

 

8.5           In
this Section, the expression “Intervening Party” shall refer to the Intervening
Party, its successors or anyone of its designated subsidiaries, associated or
related companies.

 

SECTION 9
— OWNERSHIP OF FILES AND OTHER PROPERTY

 

9.1           Any file, sketch, drawing, letter, report, memo or other document, any
equipment, machinery, tool, instrument or other device, any diskette, recording
tape, compact disc or software or any other property which comes into the Executive’s
possession during his employment with the Corporation, in the performance or in
the course of his duties, regardless of whether he has participated in its
preparation or design, how it may have come into his possession and whether or
not it is an original or a copy, shall at all times remain the property of the
Corporation and, upon the termination of the Executive’s employment, shall be
returned to the Corporation or its designated representative before the
Executive leaves his place of work. The Executive may not keep a copy or give
one to a third party.

 

SECTION 10
— TERMINATION OF PRIOR CONTRACTS

 

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

 

SECTION 11
— AMENDMENT OF THE AGREEMENT

 

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

 

5

 

SECTION 12
— NOTICES

 

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

 

SECTION 13
— ELECTION OF DOMICILE

 

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

 

SECTION 14
— SUCCESSORS

 

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

 

SECTION 15
— FINAL PROVISION

 

15.1         It is
understood between the parties that the Contract and this Agreement shall
coexist for the duration of either one of them.

 

SECTION 16
— INTERPRETATION

 

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

 

SECTION 17
— LANGUAGE

 

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

 

WITNESS
WHEREOF the parties hereto have duly signed this Agreement on this 1st day of September, 2008.

 

	
   

  	
   

  	
   

  
	
  Prof. Juergen Engel

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ÆTERNA
  ZENTARIS INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Juergen
  Ernst

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ÆTERNA
  ZENTARIS GmbH

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Matthias
  Seeber

  	
   

  	
   

  

 

6

 

ANNEX 1

 

CHANGE OF CONTROL PROGRAM (the “Program”)

 

1.             Applicability
of the Program

 

The Executive shall be entitled to the benefit of the Program if both
conditions mentioned below occur:

 

(A)          there is a “Change of Control” of the
Corporation, as defined below; and

 

(B)           The Executive’s
employment is terminated, within twelve (12) months following a Change of
Control :

 

(i)        involuntarily, at the request of the
Corporation or its successors, except “for Cause” or

 

(ii)       by him, for “Good
Reason”.

 

2.             Definitions

 

(A)          For purposes of the Program and unless
otherwise defined, the capitalized terms used herein shall have the following
meaning:

 

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

 

(ii)       Subject to the exceptions set out in Schedule
A hereto, a Person shall be deemed the “Beneficial
Owner” of or to “Beneficially Own”  (a) any securities of which such
Person or any of such Person’s affiliates or associates, as such terms are
defined in National Instrument 45-106 — Prospectus and
Registration Exemptions, is owner at law or in equity; (b) any
securities which the Person or any of such Person’s affiliates or associates
has the right to acquire within 60 days (whether such right is exercisable
immediately or after the passage of not more than 60 days thereafter or upon
the occurrence of a contingency or the making of a payment) pursuant to any
securities convertible into Voting Shares, agreement, arrangement, pledge or
understanding, whether or not in writing (other than customary agreements with
and between underwriters and/or banking group and/or selling group members with
respect to a distribution of securities or pledges of securities in the
ordinary course of the pledgee’s business); and (c) any securities that
are Beneficially Owned within the meaning of clauses (i) or (ii) of
this Subsection 2(A)(ii) by any other Person with which such Person is
acting jointly or in concert;

 

(iii)      “Voting Shares”
means the common shares and any other securities the holders of which are
entitled to vote generally on the election of directors of the Corporation.

 

(B)           For purposes of the Program, involuntary
termination of employment “for Cause” includes the following:

 

(i)        if the Executive commits any fraud, theft,
embezzlement or other criminal act of a similar nature; or

 

(ii)       if the Executive is guilty of serious misconduct
or willful negligence in the performance of his duties.

 

(C)           For purposes of the Program, “Good Reason”
means the occurrence, without the Executive’s express written consent, of any
of the following acts:

 

7

 

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

 

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

 

(iii)      a forced relocation; or

 

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

 

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

 

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

 

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

 

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

 

(iv)          if, for any reason, including an
amalgamation, merger or consolidation of the Corporation with or into another
company, the individuals who at the date hereof constitute the Board of
Directors of the Corporation (and any new directors whose appointment by the
Board of Directors of the Corporation or whose nomination for election by the
Corporation’s shareholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the date
hereof or whose appointment or nomination for election was previously so
approved) cease to constitute a majority of the members of the Board of
Directors of the Corporation.

 

3.             Payment

 

In the event that the two (2) conditions mentioned in Section 1
above are met, the Executive shall receive, in a lump sum, at the latest within
ten (10) days of the effective date of the termination of employment, the
payment of the amounts mentioned in section 6 of the
Agreement.

 

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

 

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

 

8

 

4.             Release

 

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

 

5.             General

 

The Executive’s participation in the Program shall end immediately upon
the termination of his employment with the Corporation or one of its affiliates
for any reason whatsoever. The Program is for an indefinite term commencing on
the date of this Agreement. Furthermore, the Corporation shall have the right
prior to the occurrence of a Change of Control, in its sole discretion, to
terminate the Executive’s participation in the Program at the end of each
twelve (12)-month period commencing on the date of this Agreement by sending
him a written notice of termination at least thirty (30) days prior to the
first anniversary date of this Agreement and of each anniversary date
thereafter. For example, the Corporation would be entitled to exercise its
discretion to terminate the Executive’s participation in the Program if, as of
the date of the notice of termination, there has been during said twelve
(12)-month period a material reduction in the responsibilities of the
Executive.

 

6.             Successors

 

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

 

9

 

Schedule A

 

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

 

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

 

(A)          as a result of such security having been deposited or tendered pursuant
to a take-over bid (as such term is defined in the Securities Act
(Ontario)) made by such Person or any of such Person’s affiliates or
associates or any other Person acting jointly or in concert with such Person
until such deposited or tendered security is taken up and paid for;

 

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

 

(C)          as a result of (a) such Person or any of the affiliates or
associates of such Person holding such security provided that the ordinary
business of any such Person (the “Fund  Manager”) includes the management of investment funds for
others and such security is held by the Fund Manager in the ordinary course of
such business in the performance of such Fund Manager’s duties for the account
of any other Person (a “Client”); (b) such
Person (the “Trust  Company”)
being licensed to carry on the business of a trust company under applicable
laws and, as such, acting as trustee or administrator or in a similar capacity
in relation to the estates of deceased or incompetent Persons (each an “Estate  Account”) or in
relation to other accounts (each an “Other  Account”) and holding such security in the ordinary course
of such duties for such Estate Accounts or for such Other Accounts;  (c) such Person (the “Plan  Administrator”)
being the administrator or the trustee of one or more pension funds or plans (a “Plan”) registered under the laws of Canada or any province
thereof or the laws of the United States of America or any state thereof and
such security being held by the Plan Administrator or the Plan in the ordinary
course of such Plan Administrator’s or Plan’s activities; (d) such Person
(the “Crown  Agent”)
being established by statute for purposes that include, and the ordinary
business or activity of such Person includes, the management of investment
funds for employee benefit plans, pension plans or insurance plans of various
public bodies and such security is held by the Crown Agent in the ordinary
course of the management of such investment funds; or (e) such Person
being a Plan and such security being held by the Plan in the ordinary course of
such Plan’s activities; provided, however, that in any of the foregoing cases
the Fund Manager, the Trust Company, the Plan Administrator, the Crown Agent or
the Plan, as the case may be, is not then making or has not then announced a
current intention to make a take-over bid (as such term is defined in the Securities Act (Ontario)), alone or by acting jointly or in
concert with any other Person, other than an offer to acquire the Voting Shares
pursuant to a distribution by the Corporation or by means of market
transactions made in the ordinary course of business of such Person (including
pre-arranged trades entered into in the ordinary course of business of such
Person) executed through the facilities of a stock exchange or organized
over-the-counter-market;

 

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

 

(E)           because such Person is a Client of a Fund Manager and such security is
owned at law or in equity by the Fund Manager, or because such Person is an
Estate Account or an Other Account of a Trust Company and such security is
owned at law or in equity by the Trust Company, or because such Person is a
Plan and such security is owned at law or in equity by the Plan Administrator;
or

 

10

 

(F)           because such Person is the registered holder of securities as a result
of carrying on the business of, or acting as, a nominee of a securities
depositary.

 

11

 

Schedule B

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

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