Employment Agreement

EXECUTIVE EMPLOYMENT AGREEMENT



Aspreva Pharmaceuticals Inc











PRIVATE AND CONFIDENTIAL



23 September 2004



Charles F. Goulburn

346 Mount Prospect Road

Far Hills, New Jersey, 07931



Dear Rick:



Re: Terms of Employment with Aspreva Pharmaceuticals Inc




This Agreement confirms the terms and conditions of your employment by Aspreva Pharmaceuticals Inc (the " Corporation ") and will constitute your employment agreement (the " Agreement "). Those terms and conditions are set out below. We also seek to complete pre-employment, an appropriate medical check, drug screen and criminal check.



1. Position and Duties . You will be employed by and will serve the Corporation as its General Manager (USA), and you hereby accept such employment. You will perform such duties and functions customarily associated with your then current title, consistent with the Bylaws of the Company and as required by the Company's Board of Directors (the " Board "), including those duties and functions particularly described in Schedule A attached to this Agreement. You will initially report directly to the President of Aspreva Pharmaceuticals Corporation. Your duties and functions pertain to the Corporation and any of its parents and subsidiaries from time to time and may be varied or added to from time to time by the President, the Chief Executive Officer or the Board, at its discretion, exercised reasonably. Your primary office location shall be based in New Jersey, (the final location to be determined). The Corporation reserves the right to reasonably require you to perform your duties at places other than its corporate headquarters from time to time, and to require reasonable business travel. The employment relationship between the parties shall also be governed by the general employment policies and practices of the Company, including those relating to protection of confidential information and assignment of inventions, except that when the terms of this Agreement differ from or are in conflict with the Company's general employment policies or practices, this Agreement shall control.




2. Term . The terms and conditions of this Agreement shall have effect as of and from 18 th October, 2004 (the " Effective Date ") and your employment hereunder shall continue unless terminated prior thereto by either the Corporation or you as provided herein.









3. Base Salary . The Corporation shall pay you an annualized base salary at the rate of US $250,000 per year (the " Base Salary "), payable semi-monthly, subject to payroll withholding and deductions.




4. Annual Review . The compensation committee (the " Compensation Committee ") established by the Board for the purposes of this Agreement shall review your Base Salary annually. This review shall not result in a decrease of your Base Salary nor shall it necessarily result in an increase in your Base Salary and any increase shall be in the discretion of the Board.




5. Performance Bonus . The Corporation shall review the performance of your duties and functions under this Agreement annually. You will be eligible for an annual bonus in an amount to be determined by the Board in its sole discretion of up to 30% of your Base Salary, if the Board, in its sole discretion, determines that the Corporation has met its short-term and long-term business performance objectives and you have met objectives related to your personal performance (together, the " Objectives "), respectively weighted 40% and 60%. The Objectives will be established from time to time by the President or Chief Executive Officer in consultation with you. For the remainder of 2004, you will be eligible for a pro-rated performance bonus, based on initial performance against objectives, from the Effective Date. Payment of any performance bonus set out in this Section 5 shall be made to you within a reasonable time following the end of each fiscal year and shall be subject to payroll withholding and deductions.




6. Benefits . You shall be entitled to all rights and benefits for which you are eligible under the terms and conditions of the standard Corporation benefits and compensation practices which may be in effect from time to time and provided by the Corporation to its employees generally. These will include, health cover, dental cover, life assurance, short and long term disability. You may be required to provide information and undergo reasonable assessments of the insurers in order to determine your eligibility for benefits coverage. Please note that coverage under any benefit plan in effect from time to time is subject to availability and other requirements of the applicable insurer and plan. The Corporation reserves the right to change, alter, or terminate any benefit plan in its sole discretion. If in the short term you are required to use COBRA cover, the company will reimburse any relevant costs.




7. Vacation . During your employment with the Corporation under this Agreement, you will be entitled to an annual paid vacation as determined by the Corporation from time to time, at a rate of 20 days per annum. The Corporation reserves the right, acting reasonably, to request that vacations be scheduled so as not to conflict with critical business operations.






- 2 -








8. Reimbursement for Expenses . During your employment under this Agreement, the Corporation shall reimburse you for reasonable travelling and other expenses actually and properly incurred by you in connection with the performance of your duties and functions, such reimbursement to be made in accordance with, and subject to, the policies of the Corporation from time to time. For all such expenses you will be required to keep proper accounts and to furnish statements, vouchers, invoices and/or other supporting documents to the Corporation within 30 days after the date the expenses are incurred.




9. Stock Options . You will be eligible to receive a grant of an option to purchase 100,000 shares of common stock in Aspreva Pharmaceuticals Corporation (the ? Option ") at an exercise price and on such other terms set forth in the Aspreva 2002 Incentive Stock Option Plan (the " Plan "), subject to approval of the Board of Aspreva Pharmaceuticals Corporation and applicable securities regulatory authorities and to execution and delivery by you of a stock option agreement in a form acceptable to Aspreva Pharmaceuticals Corporation. Except as otherwise provided herein, no Option will vest and become exercisable during the first year following the Effective Date ("First Anniversary Date"), and thereafter one thirty-sixth (1/36 th ) of the options vest at the end of each month for the next 36 months commencing at the end of the first month following the First Anniversary Date. Thus the total grant will vest and become exercisable over a four (4) year period, in accordance with the Corporation's standard vesting and exercisability policy, as long as you remain in continuous service with the Corporation. The Option shall be governed by the terms and conditions set forth in the Plan, the applicable stock option agreement, and the grant document.




The options granted in this Section 9 will cease to vest on the earlier of the following:



(a) on the date you provide the Corporation with written notice of your decision to resign your employment pursuant to Section 14 (Termination by Executive);




(b) on the date the Corporation provides you with written notice of its decision to terminate your employment pursuant to Section 15 (Termination without Cause);




(c) on the date the Corporation terminates your employment pursuant to Section 16 (Termination for Cause);




(d) otherwise on the date this Agreement is terminated or deemed terminated; or




(e) as provided by the Plan or the stock option agreement.




For greater certainty; neither the period of notice nor any payment in lieu thereof will be considered as extending the period of your employment with respect to the vesting or exercise of the options granted in this Section 9.



Additionally, any option granted under the terms of the "Plan", where your employment is terminated under Section 15 (Termination without Cause, or Section 14 (Termination by Executive) clause 6.5 (b) will apply and you will have no more than (3) three months to exercise any vested options, before the option expires.





- 3 -






10. Compliance with Insider Trading Guidelines and Restrictions . As a result of your position as General Manager you are subject to insider trading regulations and restrictions and are required to file insider reports disclosing the grant of any options as well as the purchase and sale of any shares in the capital of Aspreva Pharmaceutical Corporation. Aspreva Pharmaceutical Inc or Aspreva Pharmaceutical Corporation may from time to time publish trading guidelines and restrictions for its employees, officers and directors as are considered by the Board, or the Board of Aspreva Pharmaceutical Corporation, in its discretion. It is a term of your employment as a senior officer of Aspreva Pharmaceutical Inc that you comply with such guidelines and restrictions.




11. Directors' & Officers' Liability Insurance and Indemnification . The Corporation shall use commercially reasonable efforts to provide you with directors' and officers ? liability insurance under the policies for such insurance arranged by the Corporation from time to time upon such terms and in such amounts as the Board may reasonably determine in its discretion. You shall enjoy the same indemnification rights provided to other officers of the Corporation, as set forth in the Bylaws of the Corporation.




12. No Other Compensation or Benefits . You expressly acknowledge and agree that unless otherwise expressly agreed in writing by the Corporation subsequent to execution of this Agreement by the parties hereto, you shall not be entitled by reason of your employment by the Corporation or by reason of any termination of such employment, to any remuneration, compensation or benefits other than as expressly set forth in this Agreement.




13. Service to Employer . During your employment under this Agreement you will:




(a) well and faithfully serve the Corporation, at all times act in, and promote, the best interests of the Corporation, and devote substantially the whole of your working time, attention and energies to the business and affairs of the Corporation;




(b) comply with all rules, regulations, policies and procedures of the Corporation;




(c) not, without the prior approval of the Board, carry on or engage in any other business or occupation or become a director, officer, employee or agent of or hold any position or office with any other corporation, firm or person; provided, however, that you may serve as a volunteer for a non-profit organization so long as such activities for not materially interfere with the performance of your duties hereunder.






- 4 -






14. Termination By Executive




(a) You may terminate your employment hereunder, on giving 1 month's prior written notice of the effective date of your resignation. On the giving of any such notice, the Corporation shall have the right to elect, in lieu of the notice period, to pay you a lump sum equal to 1 month's Base Salary, as referred to in Section 3 (Base Salary) and as adjusted from time to time in accordance with Section 4 (Annual Review), plus other sums owed for arrears of salary, vacation pay and, if granted pursuant to Section 5 (Performance Bonus), bonus.




(b) If the Corporation elects to pay you such lump sum in lieu of the 1 month's notice period, the Corporation shall, subject to the terms and conditions of any benefit plans in effect from time to time, maintain the benefits and payments set out in Section 6 (Benefits) of this Agreement for 1 month after the date of your notice, to the extent provided by the plans and applicable law, but in all other respects, your resignation and the termination of your employment will be effective immediately upon notice by the Corporation that it will pay you the lump sum in lieu of the notice period.




15. Termination by the Corporation Without Cause .




(a) The Corporation may terminate your employment at any time without Cause (as defined below) by giving you written notice of the effective date of such termination and in all respects, except as set out below, the termination of your employment will be effective immediately.




(b) If your employment is terminated by the Corporation pursuant to this Section, unless otherwise determined by the Board, the Corporation shall pay severance payments in the form of a (1) a lump sum payment to you equal to 6 months, plus one additional month for each completed year of employment (measured on the anniversary of the Effective Date), of Base Salary, as referred to in Section 3 (Base Salary) and as adjusted from time to time in accordance with Section 4 (Annual Review), up to a total maximum number of twelve months; and (2) if you timely elect and remain eligible for continued coverage under COBRA, the Company, as part of this Agreement, will pay that portion of your group health insurance premiums it was paying prior to the date of the termination or your employment towards your COBRA premiums for the first six months following the date of termination of your employment. Such payments will only be made, however, if sign and make effective a full, general release of all claims against the Corporation in a form acceptable to the Corporation in order to receive such payment. You will also receive such sums owed for arrears of salary, vacation pay and, if granted pursuant to Section 5 (Performance Bonus), bonus.




(c) You are not entitled to any notice period under this Section 15.






- 5 -






16. Termination by the Corporation for Cause . Notwithstanding Section 14 (Termination by Executive) or Section 15 (Termination by the Corporation without Cause), the Corporation may terminate your employment for Cause at any time without any notice or severance. In this Agreement, " Cause " shall include, but not be limited to, the following:




(a) the commission of theft, embezzlement, fraud, obtaining funds or property under false pretences or similar acts of misconduct with respect to the property of the Corporation or its employees or the Corporation's customers or suppliers; your entering of a guilty plea or your conviction for any crime involving fraud, misrepresentation or breach of trust, or your entering a guilty plea or your conviction for any serious criminal offence that impacts adversely on the Corporation; breach of your duties to the Corporation;




(b) persistent unsatisfactory performance of your job duties after written notice from the Board and a reasonable opportunity to cure, if possible;




(c) intentional damage to any property of the Corporation;




(d) conduct by you which in the good faith and reasonable determination of the Board demonstrates gross unfitness to serve;




(e) incapacity to perform the essential functions of your job for a period of ninety (90) calendar days, or for at least sixty-five (65) business days within a twelve (12)-month period;




(f) death; or.




(g) any other matter constituting just cause at common law.




any of which shall entitle the Corporation to terminate your employment under this Section 16.



17. No Additional Compensation upon Termination . It is agreed that you shall not, as a result of the termination of your employment, be entitled to any notice, fee, salary, bonus, severance or other payments, benefits or damages arising by virtue of, or in any way relating to, your employment or any other relationship with the Corporation (including termination of such employment or relationship) in excess of what is specified or provided for in Section 14 (Termination by Executive), Section 15 (Termination by the Corporation Without Cause) or Section 16 (Termination by the Corporation for Cause), whichever is applicable. Payment of any amount whatsoever pursuant to Section 14 (Termination by Executive) or Section 15 (Termination by the Corporation without Cause) shall be subject to payroll withholding and deductions.






- 6 -






18. Termination Following Change in Control . You may terminate your employment following a Change of Control of the Corporation, as defined in the Aspreva 2002 Incentive Stock Option Plan, at any time during the term of this Agreement, upon the occurrence of an "Activation Event." For purposes of this Agreement, an "Activation Event" shall mean any of the following events after a Change of Control: (1) your assignment without express written approval, of duties inconsistent with your position, duties, responsibilities, titles, offices or status with the Corporation immediately prior to the Change of Control, or your removal from the General Manager (USA) position; ; (2) a material reduction, in the aggregate, in your Base Salary, or incentive, health benefits, bonus or other compensation plans in effect immediately prior to the Change of Control; (3) any request by the Corporation or any other affiliate of the Corporation that you participate in an unlawful act; ; (4) the failure of the Corporation to provide you with benefits at levels that were applicable to you immediately prior to the Change of Control; (5) your involuntary relocation to any place other than the location at which you performed your duties, except for your required travel on the Corporation's business to an extent substantially consistent with your business travel obligations immediately prior to a Change of Control; (6) any purported termination of your employment that is not effected pursuant to this Agreement.




19. Confidentiality and Assignment of Inventions . Concurrently with execution and delivery of this Agreement and in consideration of your employment by the Corporation, you and the Corporation will enter into a " Confidentiality Agreement and Assignment of Inventions " in the form attached hereto as Schedule B.




20. Disclosure of Conflicts of Interest . During your employment with the Corporation, you will promptly, fully and frankly disclose to the Corporation in writing:




(a) the nature and extent of any interest you or your Associates (as hereinafter defined) have or may have, directly or indirectly, in any contract or transaction or proposed contract or transaction of or with the Corporation or any subsidiary or affiliate of the Corporation;




(b) every office you may hold or acquire, and every property you or your Associates may possess or acquire, whereby directly or indirectly a duty or interest might be created in conflict with the interests of the Corporation or your duties and obligations under this Agreement; and




(c) the nature and extent of any conflict referred to in subsection (b) above.




In this Agreement, " Associates " shall include all those persons and entities with or in whom you have a ? Substantial Financial Interest ." Substantial Financial Interest is defined as (i) more than 1% stake in a publicly traded company; (ii) a stake which constitutes greater than 5% of your assets; or (iii) a venture capital investment of any amount. Associates shall also include your spouse, children, parents, brothers and sisters.



You further represent and warrant that your employment by the Corporation will not conflict with any prior employment or consulting agreement or other agreement with any





- 7 -






third party, and that you will perform your duties to the Corporation without violating any such agreement. You represent and warrant that you do not possess confidential information arising out of prior employment, consulting, or other third party relationships, which would be used in connection with your employment by the Corporation, except as expressly authorized by that third party. During your employment by the Corporation, you will use in the performance of your duties only information that is generally known and used by persons with training and experience comparable to your own, common knowledge in the industry, otherwise legally in the public domain, or obtained or developed by the Corporation or by you in the course of your work for the Corporation.



21. Avoidance of Conflicts of Interest . You acknowledge that it is the policy of the Corporation that all interests and conflicts of the sort described in Section 20 (Disclosure of Conflicts of Interest) be avoided, and you agree to comply with all policies and directives of the Board from time to time regulating, restricting or prohibiting circumstances giving rise to interests or conflicts of the sort described in Section 20 (Disclosure of Conflicts of Interest). During your employment with the Corporation, without Board approval, in its sole discretion, you shall not enter into any agreement, arrangement or understanding with any other person or entity that would in any way conflict or interfere with this Agreement or your duties or obligations under this Agreement or that would otherwise prevent you from performing your obligations hereunder, and you represent and warrant that you or your Associates have not entered into any such agreement, arrangement or understanding.




22. Remedies . You acknowledge and agree that any breach or threatened breach of any of the provisions of Section 10 (Compliance with Insider Trading and Guidelines and Restrictions), Section 13 (Service to Employer), Section 19 (Confidentiality and Assignment of Inventions), Section 20 (Disclosure of Conflicts of Interest) or Section 21 (Avoidance of Conflicts of Interest) could cause irreparable damage to the Corporation or its partners, parents, subsidiaries or affiliates, that such harm could not be adequately compensated by the Corporation's recovery of monetary damages, and that in the event of a breach or threatened breach thereof, the Corporation shall have the right to seek an injunction, specific performance or other equitable relief as well as any equitable accounting of all your profits or benefits arising out of any such breach. It is further acknowledged and agreed that the remedies of the Corporation specified in this Section 22 are in addition to and not in substitution for any rights or remedies of the Corporation at law or in equity and that all such rights and remedies are cumulative and not alternative and that the Corporation may have recourse to any one or more of its available rights or remedies as it shall see fit.






- 8 -








23. Binding Effect . This Agreement shall be binding upon and inure to the benefit of the Corporation and its successors and assigns. Your r ...