| || || || |
| ||AQUINOX PHARMACEUTICALS (CANADA) INC. || |
| ||450 887 Great Northern Way || ||Tel   ###-###-####|
| ||Vancouver, BC, Canada V5T 4T5 || ||Fax   ###-###-####|
| || || ||Web www.aqxpharma.com|
May 8, 2019
RE: Retention Bonus
On the condition you remain employed and continue to provide service to Aquinox Pharmaceuticals (Canada) Inc. (the Company), the Company is prepared to provide you with a Retention bonus of US$319,375 (equating 2.5x your annual target bonus) paid to you on the earlier of (a) a Change of Control (as defined in the Executive Employment Agreement, dated May 13, 2014, as amended, between you and Company (the Employment Agreement)) (b) consummation of a Board Approved Strategic Alternative (c) December 31, 2019, or (d) termination of your employment by the Company without Cause (as defined in the Employment Agreement).
For purposes of this letter agreement, a Board Approved Strategic Alternative means (a) any transaction or series of transactions approved by the Board whereby the Company or its affiliate acquires, via merger, acquisition, license or otherwise, the rights to additional products, product candidates or development programs, even if such transaction or series of transactions is not a Change of Control or (b) a return of capital, via dividend or otherwise, by Aquinox Pharmaceuticals, Inc. to its stockholders in an aggregate amount of at least 50% of its consolidated cash and cash equivalents.
In addition, the first sentence of section 5(d) of your Employment Agreement is amended to insert the words or Board Approved Strategic Alternative after the words Change in Control such that the first sentence of Section 5(d) reads as follows: In the event of a Good Reason occurring within the period of twelve (12) months after a Change in Control or Board Approved Strategic Alternative, you may terminate your employment by providing one months written notice to the Board and, moreover, the definition of Board Approved Strategic Alternative as set forth above is incorporated by reference into the Employment Agreement.
Should the Company determine that your services are necessary beyond the consummation of a Board Approved Strategic Alternative, you and the Company will negotiate in good faith a separate consulting agreement on terms agreeable to both you and the Company.
The above bonus program replaces the previous Company annual bonus program.
|/s/ David Main|
|David Main, President and CEO|