EXECUTIVE EMPLOYMENT AGREEMENT

Exhibit 10.22

 

 

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Agreement dated 15 October 2007

 

BETWEEN:

 

RUI AVELAR , of 1989 West King Edward Avenue, Vancouver,

British Columbia, V6J 2W7

 

("Executive")

 

AND:

 

ANGIOTECH PHARMACEUTICALS, INC.,

a corporation incorporated under the laws of British Columbia

 

("Angiotech")

 

BACKGROUND

 

A.

Angiotech wishes to continue to employ the Executive in the position of Chief Medical Officer, on and subject to the terms and conditions of this Agreement.

 

B.

The Executive wishes to continue to be so employed.

 

AGREEMENTS

 

For good and valuable consideration, the receipt and sufficiency of which each party acknowledges, the parties agree as follows:

 

1.

EMPLOYMENT

 

1.1

Angiotech will employ the Executive, and the Executive will serve Angiotech, subject to and in accordance with the terms of this Agreement.

 

1.2

The Executive:

 

(a)

will be employed in the position of Chief Medical Officer at Angiotech's offices in Vancouver, British Columbia;

 

(b)

will report to Angiotech's Chief Executive Officer; and

 

(c)

will perform those duties and responsibilities assigned to the Executive by Angiotech from time to time.

 

1.3

Angiotech may ask the Executive to serve as an officer of Angiotech, and/or as a director and/or officer of one or more of Angiotech's affiliates or subsidiaries.

 

 

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1.4

The Executive will be employed by Angiotech on a full-time basis, and agrees that:

 

(a)

the Executive's hours of work will vary, and will be those hours required to perform the Executive's duties and responsibilities under this Agreement; and

 

(b)

the remuneration paid to the Executive under this Agreement constitutes remuneration, compensation, and payment in full for all hours worked and all services provided by the Executive in connection with the Executive's employment with Angiotech or otherwise, including any work performed or services provided as a director or officer of Angiotech or any of its affiliates or subsidiaries.

 

1.5

Angiotech may, from time to time, establish or change written policies and procedures concerning its business and the conduct of its employees, which will, upon publication to the Executive, be binding on the Executive as if incorporated into this Agreement, provided that if there is a conflict between the terms of such policies and procedures and the terms of this Agreement, the terms of this Agreement will prevail and govern.

 

1.6

This Agreement is effective as of January 1, 2007 ("Effective Date"), and will continue in effect until terminated by either party in accordance with its terms.

 

1.7

The first day of the Executive's employment continues to be January 2, 2002 for all purposes under this Agreement, which will also continue to be the anniversary date of the Executive's employment for all purposes under this Agreement.

 

2.

EXCLUSIVE SERVICE

 

2.1

The Executive will, to the best of the Executive's ability, diligently and faithfully devote all of the Executive's business time, attention, energies, and abilities exclusively to the Business of Angiotech and the performance of the Executive's duties and responsibilities under this Agreement, and will at all times use best efforts to promote the interests of Angiotech.

 

2.2

During the Executive's employment with Angiotech, the Executive will not, directly or indirectly:

 

(a)

be employed by or render services of a business, professional, or commercial nature, including services as an owner, shareholder, partner, joint venturer, officer, director, employee, advisor, contractor, consultant, agent, or otherwise, to any other person, firm, entity, or business, whether for remuneration or otherwise, without the prior written authorization of Angiotech's Chief Executive Officer; or

 

(b)

otherwise engage in any activity that is competitive with the Business of Angiotech, or that negatively affects the performance of the Executive's duties and responsibilities under this Agreement, whether alone, or as an owner, shareholder, partner, joint venturer, officer, director, employee, advisor, contractor, consultant, or agent of any other person, firm, entity, or business.

 

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2.3

For greater certainty, paragraph 2.2(b) does not, subject to Part 11, restrict the Executive from:

 

(a)

with Angiotech's prior written authorization under paragraph 2.2(a), rendering services to, or serving as an officer or director of a person, firm, entity, or business that is not a Competitor of Angiotech;

 

(b)

investing in a firm, entity, or business that is not a Competitor of Angiotech;

 

(c)

owning a legal or beneficial interest not exceeding 1% in a Competitor of Angiotech; or

 

(d)

engaging in charitable activities with a social or philanthropic purpose that do not have a material negative effect on the performance of the Executive's duties and responsibilities under this Agreement or on the interests of Angiotech.

 

3.

FIDUCIARY DUTY

 

3.1

The Executive has a fiduciary relationship with Angiotech, whereby the Executive has an absolute duty of trust, care, fidelity, and honesty to Angiotech, including a duty to avoid any conflict of interest, and to act with undivided loyalty to Angiotech and with the utmost good faith, exclusively and selflessly in the best interests of Angiotech.

 

4.

BASE SALARY

 

4.1

Angiotech will pay the Executive an annual base salary of $362,250 per year or such other amount as the Board may determine, from time to time, in accordance with this Agreement ("Base Salary"), payable on Angiotech's normal payroll schedule.

 

4.2

The Board may, from time to time, in its sole discretion, review the Base Salary and determine if any increase is appropriate having regard to the Executive's performance and contributions, as assessed by the Board in its sole discretion, and any other factor or factors the Board may consider appropriate.

 

5. BONUS PLAN

 

5.1

Subject to paragraph 5.3, the Executive will be eligible to participate in Angiotech's bonus plan for executive employees ("Bonus Plan"), which currently provides for bonuses based on a target bonus opportunity of 40% of the Base Salary earned by the Executive during a fiscal year, provided that the Board may determine, in its sole discretion, that the amount of the payment made to the Executive under the Bonus Plan in respect of a fiscal year may be greater or lesser than the target bonus opportunity, or that no payment will be made to the Executive from the Bonus Plan in respect of a fiscal year, having regard to individual and company performance and any other factor or factors the Board may consider appropriate.

 

5.2

Any one payment to the Executive under the Bonus Plan will not obligate Angiotech to make any other payment to the Executive under the Bonus Plan or otherwise.

 

 

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5.3

The Board may, from time to time, in its sole discretion and without prior notice to the Executive, change or terminate the Bonus Plan. If there is a conflict between the Bonus Plan and the teems of this Agreement (other than paragraph 5.1), the terms of this Agreement (other than paragraph 5.1) will prevail and govern.

 

6.

STATUTORY DEDUCTIONS

 

6.1

The Base Salary, any payments under the Bonus Plan or under Part 10 or 14, and any other payment, award, or benefit made or provided to the Executive under this Agreement or otherwise are subject to all required statutory deductions and withholdings, and any other amount required by law to be deducted or withheld from such payment.

 

7.

INSURANCE, RETIREMENT, AND OTHER EMPLOYEE BENEFITS

 

7.1

Subject to paragraphs 7.3 and 7.4, during the Executive's employment with Angiotech, the Executive will be eligible to participate in:

 

(a)

the group health, dental, life insurance, and short and long term disability plans made generally available by Angiotech for its comparably situated executive employees, and any other employee benefit plans that Angiotech may make generally available from time to time for its comparably situated executive employees, and, in each such instance, subject to and in accordance with the terms of the applicable plan; and

 

(b)

the group RRSP plan made available by Angiotech for its comparably situated executive employees, or in any other retirement plan that Angiotech may make generally available from time to time for its comparably situated executive employees, and, in each such instance, subject to and in accordance with the terms of the applicable plan.

 

7.2

If the Executive is a director or officer of Angiotech or any of its affiliates or subsidiaries, Angiotech will maintain a policy of directors' and officers' liability insurance for the Executive while the Executive is so serving.

 

7.3

The Executive's eligibility for any benefits under any employee benefit plan, including any health, dental, life insurance, or disability plan, or under any retirement plan, including any group RRSP plan or other retirement plan, or under any liability insurance policy, will be determined solely on the basis of the applicable plan or plans or insurance policy or policies, and Angiotech's sole obligation in relation to such benefits will be:

 

(a)

to pay premium costs, or a portion or percentage thereof, on behalf of or for the benefit of the Executive, to the extent that Angiotech may generally make such payments on behalf of or for the benefit of its comparably situated executive employees; and

 

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(b)

to make contributions to the group RRSP plan or other retirement plan, for the benefit of the Executive, to the extent that Angiotech may generally make such contributions for the benefit of its comparably situated executive employees.

 

7.4

Angiotech may, in its sole discretion and without prior notice to the Executive, change or terminate any employee benefit or insurance coverage made available to its executive employees, including the portion or percentage of premium costs (if any) paid by Angiotech under paragraph 7.3(a).

 

7.5

Any disputes concerning the Executive's rights under any employee benefit plan, retirement plan, or insurance policy must be directed against the provider of the benefit and not against Angiotech.

 

7.6

The Executive's eligibility for any health, dental, life insurance, disability, or other insurance or employee benefits, or to participate in any retirement plan, under this Part 7 will cease on the Last Day of Employment (subject to any applicable conversion privileges), and Angiotech will not be liable for any sickness, injury, illness, disability, or death, or for any claims, damages, losses, costs, or expenses directly or indirectly suffered or incurred thereafter, or as a result thereof

 

8. STOCK OPTIONS AND OTHER EQUITY-BASED INCENTIVE PLANS

 

8.1

Subject to paragraph 8.2, the Executive:

 

(a)

will continue to hold any options to purchase common shares of Angiotech held by the Executive as of the Effective Date, subject to the terms of any applicable stock option agreement, plan, or program; and

 

(b)

may, from time to time, be eligible to receive additional stock option grants, or grants or awards under other equity-based incentive plans or programs, if and to the extent awarded to the Executive under the terms of any applicable stock option agreement, plan, or program, or other equity-based incentive plan or program, which may be approved by the Board and the shareholders of Angiotech.

 

8.2

The Board may, in its sole discretion and without prior notice to the Executive, change or terminate any stock option plan or program or any equity-based incentive plan or program referred to in paragraph 8.1, subject to the terms of the applicable plan or program that govern such change or termination, and any applicable laws or regulatory requirements; provided that such change or termination will not, without the Executive's written consent, adversely affect any then outstanding stock options or other grants or awards held by the Executive (unless such change or termination occurs solely as a result of a change in applicable laws or regulatory requirements).

 

8.3

Subject to paragraph 14.8(f), if the Executive's employment is terminated, any rights and obligations of the Executive in respect of any then outstanding stock options or other grants or awards held by the Executive will continue to be governed by the provisions of the applicable agreement, plan, or program referred to in paragraph 8.1.

 

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8.4

If there is a conflict between the terms of this Agreement and the terms of any stock option agreement, plan, or program, or other equity-based incentive plan or program, referred to in paragraph 8.1, this Agreement will prevail and govern, unless applicable laws or regulatory requirements do not permit this, in which case the terms of such stock option agreement, plan, or program, or other equity-based incentive plan or program will prevail and govern to the extent required by such laws or regulatory requirements.

 

9.

VACATION

 

9.1

The Executive will receive an annual vacation of 25 working days for each fiscal year of employment under this Agreement, prorated for partial years of employment, in accordance with Angiotech's policies regarding vacations in effect from time to time.

 

9.2

The Executive may take an annual vacation at such times as are mutually convenient to the Executive and Angiotech, but subject to Angiotech's operational requirements.

 

9.3

Unless otherwise provided in Angiotech's policies regarding vacations,

 

(a)

if the Executive does not use all of the Executive's vacation entitlement in a given fiscal year, the vacation not taken will be available to be used in a later fiscal year; and

 

(b)

if the Executive's employment is terminated before the end of a given fiscal year, the Executive will be paid for:

 

(i)

any unused vacation days for previous fiscal years; and

 

(ii)

any unused vacation days for the fiscal year in which the Executive's employment is terminated, on a prorated basis.

 

9.4

Angiotech may, in its sole discretion and without prior notice to the Executive, change Angiotech's policies, plans, or practices regarding vacations.

 

10.

EXPENSES

 

10.1

Angiotech will, upon the submission by the Executive of appropriate receipts, reimburse the Executive for:

 

(a)

business expenses incurred by the Executive that Angiotech, in its sole discretion, determines are reasonably necessary for the proper discharge of the Executive's duties and responsibilities, in accordance with Angiotech's policies in effect from time to time; and

 

(b)

the following perquisites, for so long as Angiotech may make such perquisites generally available for its comparably situated executive employees, and up to a combined maximum amount of US$15,000 for each fiscal year:

 

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(i)

automobile lease;

 

(ii)

financial or tax planning services; and

 

(iii)

health club membership.

 

11.

RESTRICTIONS ON SOLICITATION AND COMPETITION

 

11.1

In this Agreement:

 

(a)

"Business of Angiotech" means the business of Angiotech through the Executive's Last Day of Employment, including, without limitation, the business of researching, developing, manufacturing, and selling medical devices and/or medical implants, including, for example, stents, stent grafts, vascular grafts, vascular wraps, catheters, needles, blades, sutures (including barbed or self- retaining sutures), filters, vascular snares, biopsy devices, guidewires, ophthalmic implants, orthopedic devices and implants, hemostats and hemostatic pads, and tissue sealants, fillers, and glues, as well as drug-loaded and/or polymer-coated versions of these products;

 

(b)

"Competitor of Angiotech" means any person, persons, entity, firm, association, corporation, or other enterprise engaged in any business or activity, anywhere in the world, that is or is being prepared to be in competition with the Business of Angiotech, including, without limitation, the development, manufacture, or sale of any product or service in competition with a product or service developed, in development, manufactured, or sold by Angiotech through the Executive's Last Day of Employment;

 

(c)

"Customer of Angiotech" means any customer or client or prospective customer or client of Angiotech to whom the Executive provided services, or for whom the Executive transacted business, or whose identity became known to the Executive in connection with or as a consequence of the Executive's relationship with or employment by Angiotech;

 

(d)

"Solicitation" means any direct or indirect communication of any kind, regardless of who initiates the communication, that in any way invites, advises, encourages, or asks any person to take or refrain from taking any action.

 

11.2

Angiotech is engaged in the Business of Angiotech, the Business of Angiotech is worldwide in scope, and the current and potential Competitors of Angiotech and Customers of Angiotech are located throughout the world.

 

11.3

While the Executive is employed by Angiotech, and for a period of 12 months after the Last Day of Employment, the Executive will not, whether as an owner, shareholder, partner, joint venturer, officer, director, employee, advisor, contractor, consultant, agent, or otherwise, either on his own or in conjunction with any person, persons, entity, firm, association, corporation, or other business enterprise, or in any other manner whatsoever, directly or indirectly:

 

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(a)

carry on or engage in the Solicitation of any Customer of Angiotech, except, while the Executive is employed by Angiotech, for a purpose consistent with the performance of the Executive's duties and responsibilities under this Agreement;

 

(b)

interfere with, impair, or damage any relationship between Angiotech and any Customer of Angiotech;

 

(c)

carry on or engage in the Solicitation of any employee or consultant of Angiotech (including any person who was an employee or consultant of Angiotech within a period of six months before the date of the Solicitation) to end his or her employment or consulting relationship with Angiotech, or to commence an employment or consulting relationship or any other relationship with any Competitor of Angiotech;

 

(d)

carry on or engage in any business or activity that is, will be, or is being prepared to be in competition with the Business of Angiotech, and that is substantially related to any business, activity, or services:

 

(i)

that the Executive engaged in or performed, directly or indirectly, for or on behalf of Angiotech through the Executive's Last Day of Employment; or

 

(ii)

for which the Executive had direct or indirect responsibility or oversight with Angiotech through the Executive's Last Day of Employment;

 

(e)

advise, assist, lend money to, guarantee the debts or obligations of, or manage or supervise personnel of, any Competitor of Angiotech engaged in any business or activity described in subparagraph (d)(i) or (ii); or

 

(f)

subject to paragraphs 11.4 and 11.5, own more than a 1% legal or beneficial interest in any Competitor of Angiotech.

 

11.4

If the Executive owns or acquires more than a 1% legal or beneficial interest in any entity, firm, association, corporation, or other enterprise which is not a Competitor of Angiotech but which later becomes a Competitor of Angiotech while the Executive is employed by Angiotech, or, subject to paragraph 11.5, during the 12-month period after the Last Day of Employment:

 

(a)

the Executive will, within 90 days after the Executive knows, or should have known, that such entity, firm, association, corporation, or other enterprise has become a Competitor of Angiotech (or, if requested by the Executive, such longer time period as Angiotech may agree, such agreement not to be unreasonably withheld), either

 

(i)

dispose of that interest to the extent necessary to comply with paragraph 11.3(f), or

 

(ii)

notify Angiotech that the Executive owns more than a 1% legal or beneficial interest in such entity, firm, association, corporation, or other enterprise, and ask that the Board decide whether the Executive must comply with paragraph 11.3(f);

 

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(b)

if the Executive asks the Board under subparagraph (a)(ii) to decide whether the Executive must comply with paragraph 11.3(f), the Board will decide, in its sole discretion, whether the Executive will be required to dispose of the Executive's legal or beneficial interest in the entity, firm, association, corporation, or other enterprise that has become a Competitor of Angiotech, to the extent necessary to comply with paragraph 11.3(f), or to any lesser extent specified by the Board, and Angiotech will notify the Executive of the Board's decision; and

 

(c)

if the Board decides under subparagraph (b) that the Executive must dispose of any portion of the Executive's legal or beneficial interest in the entity, firm, association, corporation, or other enterprise that has become a Competitor of Angiotech,

 

(i)

the Executive will, within 90 days of being notified of the Board's decision (or, if requested by the Executive, such longer time period as Angiotech may agree, such agreement not to be unreasonably withheld), dispose of that interest to the extent required by the Board under subparagraph (b), and

 

(ii)

if the Executive incurs a loss as a result of having to comply with the Board's decision under subparagraph (b), Angiotech will provide reasonable compensation to the Executive for that loss, which will not, in any event, exceed the difference, if any, between the acquisition cost of the interest and the proceeds of disposition of the interest (without regard for the tax consequences of the disposition).

 

11.5

Despite paragraphs 11.3 and 11.4, during the 12-month period after the Last Day of Employment, the Executive may own or acquire more than 1% of the shares of any class of a Competitor of Angiotech that are publicly traded on a stock exchange or trade reporting system, provided that the Executive:

 

(a)

does not, on his own behalf, or in association with or on behalf of any other person, entity, or group of persons or entities acting jointly or in concert, become a "control person" as defined under the Ontario Securities Act; and

 

(b)

otherwise complies with paragraph 11.3(a) to (e).

 

11.6

If paragraph 11.3, or any portion thereof, is found to be unreasonable or unenforceable to any extent by an arbitrator under Part 21 or by a Court of competent jurisdiction determining its validity or enforceability, whether as to the subject matter or scope of the restriction or restrictions, the geographic area of the restriction or restrictions, or the duration of the restriction or restrictions, then the restriction or restrictions will be changed or reduced to that which is determined to be reasonable or enforceable by the arbitrator or the Court.

 

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12.

WORK PRODUCT

 

12.1

In this Agreement:

 

(a)

"Intellectual Property" means all proprietary rights and interests in, to, or associated with Work Product, including, without limitation, all registered and unregistered copyrights, patents, industrial designs, trade-marks, trade names, trade secrets, goodwill, all applications and all rights to file applications for all of the foregoing, and all rights of action for infringement, misappropriation, or other misuse, and any other rights in and to the Work Product;

 

(b)

"Non-Angiotech Invention" means any concept, method, process, technology, invention, development, or other work which:

 

(i)

subject to paragraph 12.8, is disclosed in Appendix B; or

 

(ii)

is determined by the Board to be a Non-Angiotech Invention under paragraph 12.7;

 

(c)

"Work Product" means all work product of every kind, including, without limitation, all inventions, discoveries, concepts, ideas, know-how, plans, strategies, developments, technologies, computer programs, software source and object codes, writings, formulas, algorithms, compilations, information, data, devices, designs, prototypes, drawings, diagrams, schematics, practices, processes, methods, products, procedures, manuals, techniques, and other works of authorship, and all modifications and improvements to any of the foregoing, whether or not patented, registered, or otherwise protected, that is invented, made, created, authored, generated, compiled, conceived, developed, completed, reduced to practice, or worked on by the Executive, whether alone or with others, whether during or outside the Executive's working hours, and whether before or during the Executive's employment with Angiotech:

 

(i)

relating to the Business of Angiotech;

 

(ii)

resulting from work performed by the Executive with the use of Angiotech's equipment, facilities, Confidential Information, materials, or personnel;

 

(iii)

resulting from any work performed by the Executive for Angiotech;

 

(iv)

resulting from, based on, or using any of Angiotech's assets, property, products, or research; or

 

(v)

relating to an opportunity that is identified by or presented to the Executive, or of which the Executive becomes aware, in whole or in part as a consequence of the Executive's employment with Angiotech, or the functions performed by the Executive on behalf of Angiotech;

 

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but excluding any Non-Angiotech Inventions.

 

12.2

Angiotech is and will be the sole owner of all Work Product and Intellectual Property.

 

12.3

For greater certainty:

 

(a)

the Executive irrevocably assigns and transfers to Angiotech all rights, title, and interest in and to all Work Product and Intellectual Property, and all rights of action for infringement or other misuse, including all rights to file applications, and all pending applications, to patent, register, or record the Work Product and Intellectual Property;

 

(b)

to the extent the Executive holds or acquires legal title to any Work Product or Intellectual Property, the Executive holds it as trustee and agent for Angiotech; and

 

(c)

on request by Angiotech, the Executive will, during and after the Executive's employment with Angiotech, execute and deliver immediately to Angiotech all instruments that Angiotech considers necessary or helpful to effect, perfect, register, or record its interest in Work Product and Intellectual Property, or to patent, register, or record Work Product and Intellectual Property in Angiotech's name, or to obtain, maintain, or enforce its rights and interest in Work Product and Intellectual Property in connection with any interference, litigation, opposition, or other proceeding to which Work Product or Intellectual Property is relevant, provided that Angiotech reimburses the Executive for all reasonable expenses incurred to fulfill these obligations.

 

12.4

The Executive irrevocably nominates, appoints, and constitutes Angiotech as the Executive's true and lawful attorney with power to do all things and execute all documents on the Executive's behalf as may be required to give effect to this Part 12, including, without limitation, the actions contemplated in paragraph 12.3. The attorney so appointed may exercise this power as the attorney deems appropriate to give effect to the intent of this Part 12.

 

12.5

The Executive will, during and after the Executive's employment with Angiotech, assist Angiotech as much as is reasonably necessary to establish, protect, and enforce Work Product and Intellectual Property, provided that Angiotech:

 

(a)

reimburses the Executive for all reasonable expenses thereby incurred; and

 

(b)

provides reasonable compensation to the Executive for efforts thereby expended after the end of the Executive's employment with Angiotech.

 

12.6

The Executive irrevocably waives in favour of Angiotech any and all moral rights that the Executive may have with respect to any Work Product, including, without limitation, the right to attribution of authorship, the right to restrain or claim damages for any distortion, mutilation, modification, or enhancement of any Work Product, and the right to retain, use, or reproduce any Work Product in any context and in connection with any product, service, or business, and Angiotech may use or alter any Work Product, as Angiotech sees fit, in its sole discretion.

 

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12.7

A concept, method, process, technology, invention, development or other work developed by the Executive may be determined to be a Non-Angiotech Invention under paragraph 12.1(b)(ii) if:

 

(a)

subject to paragraph 12.11, the Executive immediately and fully discloses that concept, method, process, technology, invention, development, or other work, in writing, to both Angiotech's General Counsel and its Human Resources Department; and

 

(b)

the Board determines, in its sole discretion, that the concept, method, process, technology, invention, development, or other work is a Non-Angiotech Invention, provided that, for greater certainty, the Board may determine that a concept, method, process, technology, invention, development, or other work is not a Non­Angiotech Invention if one or more of the following apply to that concept, method, process, technology, invention, development, or other work:

 

(i)

it was developed by the Executive during the Executive's business time for Angiotech, or using any equipment, facilities, materials, personnel, trade secrets, or Confidential Information of Angiotech;

 

(ii)

it relates to the Business of Angiotech or to Angiotech's current or anticipated research or development; or

 

(iii)

it is otherwise derived from any work performed by the Executive for Angiotech.

 

12.8

If the disclosure of any Non-Angiotech Invention in Appendix B would violate any obligation of confidentiality that the Exec