Employment Agreement - Vascular Sciences Corp. and William G. Dumencu
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made effective as of the 1st day of
August, 2003 by and between Vascular Sciences Corporation, a Delaware
corporation, with an office, located at 5280 Solar Drive, Mississauga, Ontario,
Canada L4W 5M8 (the "Company"), and William G. Dumencu (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is currently under contract with the Company and
desires to obtain full time employment upon the terms and conditions set forth
herein;
WHEREAS, the Company wishes to continue to employ the Employee upon such
terms and conditions; and
WHEREAS, the Employee has received and will be given access by the Company
to its Trade Secrets, confidential business and professional information;
NOW, THEREFORE, for the consideration given and received herein, and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Employee and the Company hereby agree as follows:
1. Recitals Incorporated. The foregoing recitals and any referenced
Exhibits are specifically incorporated in their entirety herein and made a part
hereof.
2. Definitions.
"Non-Competition Period" shall mean that period of time commencing
upon the date of execution of this Agreement by Employee and continuing during
his employment with the Company, and for no less than one (1) years following
termination of his employment with the Company (regardless of the circumstances
of termination);
"Trade Secret" shall mean information, including a formula, a
pattern, compilation, program, device, method, treatment, therapy, material or
process that; (a) derives independent economic value, actual or potential, from
not being generally known to and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use; and
(b) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
3. Employment. The Company hereby employs the Employee, and the
Employee hereby accepts such employment, upon the terms and conditions stated
herein.
4. Term. The term of employment under this Agreement shall commence on
August 1, 2003 and shall continue indefinitely until terminated in accordance
with the provisions of termination as hereafter provided in this Agreement,.
5. Duties.
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(a) The Employee is engaged to serve as the Vice-President of
Finance of the Company, and shall have such other duties as may from time to
time be reasonably assigned to him by the President of the Company. During the
term hereof, the Employee shall devote his full time, energy and attention to
his duties and responsibilities hereunder and shall not engage in or carry on or
be employed by, directly or indirectly, any other business or profession.
(b) Notwithstanding the provisions of Section 5(a), the parties
acknowledge that during the term of this Agreement, the Employee will spend
approximately 17% of his work efforts on behalf of RHEO Clinic Inc. and 17% of
his work efforts on behalf of Occulogix L.P.. Such entities have undertaken to
reimburse the Company for the cost of such services performed by the Employee.
Therefore, as between the Employee and the Company, for all purposes under this
Agreement, any services provided to such entities shall be deemed to be services
provided to the Company.
6. Compensation.
(a) The Company shall pay to the Employee as compensation for all
services rendered by the Employee hereunder including the services rendered to
Occulogix L.P. and RHEO Clinic Inc. a base salary of US$_110,000, subject to
such reductions as may be agreed upon by the parties or required by law. This
salary shall be paid in accordance with Company's customary payroll procedure.
The parties agree that the base salary payable hereunder may be paid in Canadian
dollars ($), the exchange rate of which shall be adjusted prospectively as of
the last day of each calendar quarter (an "Adjustment Date"). As of each
Adjustment Date, the amount payable in Canadian dollars ($) shall be increased
or decreased, as necessary, based on the then-current exchange ratio between the
United States dollar and the Canadian dollar (as reported in the Globe and Mail
or a mutually-acceptable identified rate on the Adjustment Date, or if the
Adjustment Date is not a business day, on the last business day prior thereto),
such that the base salary payable hereunder shall equal the number of Canadian
dollars that could be obtained in exchange for US$110,000. In no event shall any
such adjustment affect any amount of compensation paid hereunder prior to the
Adjustment Date.
The Company shall provide employee benefits, incentive compensation, stock
options and vacation to the Employee in accordance with its benefit plans,
policies and procedures as may be in effect, which may be amended from time to
time. The Company warrants that all such benefits made available to the Employee
shall be consistent with those offered and made available to other employees at
the same or similar level as that of the Employee; provided, however, that the
Employee's vacation level shall initially be an entitlement of 15 days as at the
date of this agreement and an entitlement to earn 15 days per year, accruing in
accordance with the Company's vacation policy. Notwithstanding the foregoing, in
the event that Employee cannot participate in one or more of such plans by
reason of the Employee's Canadian citizenship or residency, then the Company
shall provide a reasonably equivalent cash reimbursement to permit the Employee
to obtain the such benefits on an individual basis, or on a group basis with
other Canadian employees of the Company, to the extent reasonably available. The
parties anticipate that one of such plans will be a stock option plan providing
for the grant to employees of options to purchase the common stock of the
Company, which
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plan the Company expects to implement before December 31, 2003. The Employee
shall be entitled to an annual bonus of 20% of Employee's annual base salary,
which bonus shall be granted at the sole discretion of the Company based on
specific measurable objectives determined by the Company.
(b) The Employee shall be reimbursed for all usual and customary
out-of-pocket expenses incurred as the result of any and all business-related
activities pursuant to this Agreement, all in accordance with a uniform policy
established by the Board of Directors of the Company from time to time;
provided, however, that reimbursement under this Section shall not be made until
and unless the Employee has furnished the Company with an appropriate receipt or
such other documents as may be reasonably required by the Company to
substantiate the nature and amount of the expenses incurred by the Employee.
7. Termination of Agreement.
(a) Termination For Cause. The Company may elect to impose
disciplinary sanctions, up to and including termination of this Agreement in the
event:
(i) The Employee is convicted of a misdemeanor or felony
substantially related to or adversely affecting the Employee's ability to
perform hereunder in a safe, competent and ethical manner;
(ii) The Company determines, after consultation with the
Employee's physician or other appropriate health care provider, that the
Employee has a substantial dependence on any addictive substance,
including but not limited to, narcotic drugs or other controlled
substances;
(iii) The Employee commits an act of fraud, or an unethical
practice related to his obligations hereunder;
(iv) The Employee commits an act damaging to the Company's
reputation in the community;
(v) The Employee presents, submits or prepares fraudulent or
false claims, documents and/or records, including employment records and
employment information;
(vi) The Employee willfully fails or refuses to comply with
all policies, procedures, standards and regulations of the Company that
are established from time to time, or willfully fails or refuses to
substantially perform or observe all other covenants and conditions which
are required to be performed and observed by the Employee under this
Agreement.
(b) Termination Without Cause. The Employee or the Company may
voluntarily elect to terminate this Agreement without cause by delivering to the
other party, at least sixty (60) days prior to the date upon which termination
is desired, written notice of such intention to terminate; provided, however,
that, if either party gives notice pursuant to this Section 7(b), the Company
shall have the right to relieve the Employee, in whole or in
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part, of his duties under this Agreement (without reduction in compensation),
with compensation to the Employee payable to the date of termination.
(c) Payment Upon Termination. If the employment of the Employee is
terminated by the Employee or by the Company pursuant to the provisions of
Section Section 7(a), then the Company shall pay to the Employee any
compensation earned but not paid to the Employee prior to the effective date of
such termination. If the employment of the Employee is terminated by the Company
pursuant to the provisions of Section 7(b), then the Company shall pay to the
Employee any compensation earned but not paid to the Employee prior to the
effective date of such termination, and the Employee shall be entitled to
receive severance pay equal to twelve months salary hereunder, payable in either
equal monthly installments or in a lump sum payment at the discretion of the
employee. In either event, such payment(s) shall be in full and complete
discharge of any and all liabilities or obligations of the Company to the
Employee hereunder, and the Employee shall be entitled to no further benefits
under this Agreement. Any amounts owing to the Employee under any retirement
plans or other compensation arrangements, if any, with the Company shall be
handled solely in accordance with the terms of such plans or arrangements and
not by the terms of this Agreement.
8. Interests of the Company. The Employee acknowledges and agrees that:
(a) The Company has, owns or possesses the right to certain
legitimate business interests, Trade Secrets, professional information and
confidential information; and
(b) The Company's possession, ownership and use of such legitimate
business interests, Trade Secrets, professional and confidential information
derives actual or potential independent economic value from not being generally
known to, and not being readily ascertainable by proper means by other persons
who could potentially obtain economic value from its disclosure or use; and
(c) The Company has taken and will continue to undertake
substantial efforts that are commercially reasonable under the circumstances to
maintain the secrecy of its present and future legitimate business interests,
Trade Secrets and other professional and confidential information, and requires
Employee to do the same; and
(d) Companies or individuals or other entities that provide goods
and services similar to those of the Company derived from its access to its
Trade Secrets gained from a current or former Employee of the Company, without
its express permission, license or franchise, regardless of geographic location,
would cause irreparable harm and undue hardship, and would materially jeopardize
the Company's business and materially jeopardize the ability of the Company to
attain its goals, thus reducing significantly its value should the Employee
compete with the Company, or assist, induce or cause other persons to compete
with the Company; and
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(e) The value of such harm would be substantial and
unquantifiable. As such, Employee agrees that the violation of this covenant
would cause irreparable harm to the Company.
9. Covenant not to Compete. Recognizing that the business and success
of the Company is predicated upon the existence and preservation of its
legitimate business interests, Trade Secrets and other professional and
confidential information, the Employee covenants and agrees that during the
Non-Competition Period, in the geographic area for which the Company has
distribution rights for the products and services that it offers, he will not,
directly or indirectly (through one or more intermediaries), whether
individually, or as an officer, director, agent, shareholder, partner, joint
venturer, investor, consultant or otherwise, compete, induce or cause others to
compete, induce or attempt to compete, in whole or in part with, or assist any
individual, company, business enterprise or other entity in competing or
intending or attempting to compete in whole or in part with, the business then
engaged in by the Company, or expressly contemplated to be undertaken by the
Company.
10. Secrecy. The Employee agrees that during the course of the Non-
Competition Period, he shall not disclose or cause the disclosure of any
information relating to the Company obtained before or during the course of his
employment, including the Company's Trade Secrets, and other professional and
confidential information and shall maintain such as secret. Further, the
Employee shall not, whether directly or indirectly use, or cause others to use,
communicate, disclose or disseminate any information of a secret, proprietary,
confidential or generally undisclosed nature relating to the Company, including,
without limitation, its structure, its contacts, its products, processes and
services, including information relating to testing, research, development,
manufacturing, financial condition, statistics, marketing and selling, and the
Employee shall strictly maintain the foregoing as secret during the course of
the Non Competition Period.
11. No Interference. The Employee agrees that he will not, whether for
his own account or for the account of any other individual, partnership, firm,
company or other business organization (other than the Company), directly or
indirectly hire, employ, solicit, endeavor to entice away from the Company, or
otherwise interfere with the relationship of the Company, with any person who is
employed by or otherwise engaged to provide products to or perform services for
the Company, nor will Employee directly or indirectly interfere with the
business of the Company or its customers, suppliers, or other such persons or
entities with which the Company transacts business for any purpose, which may
result in or may be construed to result in having an adverse effect upon the
Company's business activities, Trade Secrets or professional and confidential
information of the Company.
12. No Violation. The Employee represents warrants and agrees that his
execution of and performance of all the terms of this Agreement does not and
will not breach any agreement or duty to which he is subject at the time of
execution of this Agreement. The Employee agrees not to enter into any written
or oral agreement in conflict herewith and represents and agrees that he has not
brought and will not bring with him to the Company or use in the performance of
his responsibilities at the Company
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any materials or documents of a former company which are not generally available
to the public.
13. Indemnification. The Company will indemnify and hold harmless the
Employee in respect of liability, damage, cost or expense, including reasonable
attorneys' fees incurred in connection with the defenses of any claim, action,
suit or proceeding to which the Employee is a party, or threat thereof, by
reason of being an employee of the Company. Notwithstanding the forgoing, the
Company will not indemnify and hold harmless the Employee from any act or
omission arising out of (i) an intentional act by the Employee, (ii) the
negligence or fraudulent conduct of the Employee, or (iii) any other act or
omission of the Employee committed outside of the scope of the Employee's
duties.
14. Travel Visa. The Company shall arrange for requisite visa for
Employee to travel to the US from Canada for travel by Employee for the business
of the Company.
15. Tax Preparation Assistance. The Company agrees to provide sufficient
resources and assistance to the Employee to enable Employee to properly file US
personal tax and other tax returns as may be required to be filed by the
Employee.
16. Arbitration. The Company and the Employee agree that any dispute or
controversy arising out of, in relation to, or in connection with this
Agreement, or the making, interpretation, construction, performance or breach
thereof, shall be finally settled by binding arbitration under the then current
rules of the American Arbitration Association by one (1) arbitrator appointed in
accordance with such rules. The arbitrator may grant injunctive or other relief
in such dispute or controversy. The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator's decision in any court of competent jurisdiction. The
parties agree that, any provision of applicable law notwithstanding, they will
not request, and the arbitrator shall have no authority to award, punitive or
exemplary damages against any party. The costs of the arbitration, including
administrative and arbitrator's fees, attorneys, fees and expert witness fees
shall be borne by the prevailing Party.
17. Successors and Assigns. This Agreement shall be binding upon the
Employee, his heirs, executors and administrators; provided, however, the
Employee shall not have the right to assign this Agreement.
18. Prior Agreements. If the Employee currently has a written or other
Employment Agreement with the Company, then this Agreement supersedes the
provisions of such Agreement.
19. Severability. Wherever there is any conflict between any provision
of this Agreement (or part thereof), and any statute, law, regulation or
judicial precedent, the latter shall prevail, but in such event the provisions
of this Agreement thus affected shall be curtailed and limited only to the
extent necessary to bring it within the requirement of the law. In the event
that any provision of this Agreement shall be held by a court of proper
jurisdiction to be indefinite, invalid or otherwise unenforceable, the entire
Agreement shall not fail on account thereof, but the balance of the Agreement
shall continue in full force and effect.
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20. Choice of Law, Choice of Forum. This Agreement shall be governed and
construed exclusively by laws of the Province of Ontario, except for any law,
rule or principle which might require application of the substantive law of
another Jurisdiction. Exclusive venue shall lie with the provincial or federal
courts of competent jurisdiction in Ontario Canada.
21. Entire Agreement; Amendment and Waiver. This Agreement and the
Exhibits attached hereto, constitute the entire understanding of the parties
hereto relating to the subject matter hereof and supersede all prior agreements
or understandings with respect to the subject matter hereof among the parties.
This Agreement may be amended, and the observance of any term of this Agreement
may be waived only with the written consent of each of the parties hereto. Any
such wavier does not imply or express that any other similar or dissimilar
wavier shall be granted or agreed to by the Company.
22. Cost of Enforcement. In the event of any dispute arising out of this
Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and costs from the non-prevailing party.
23. Section Headings. The headings of the sections and subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
24. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the date first written above.
Vascular Sciences Corporation
By:/s/ Elias Vamvakas
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Elias Vamvakas
/s/ Bill Dumencu
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Bill Dumencu
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AMENDMENT TO EMPLOYMENT AGREEMENT
This AMENDMENT to the Employment Agreement between Vascular Sciences
Corporation, a Delaware corporation (the "Company") and William G. Dumencu (the
"Employee") dated the 1st day of August, 2003 is made effective as of September
30, 2003.
W I T N E S S E T H:
WHEREAS, The Company and the Employee entered an Employment Agreement on
August 1, 2003 (the "Agreement"), a copy of which is attached as Exhibit "A";
and
WHEREAS, The Company and the Employee desire to amend the Agreement in
certain respects;
NOW, THEREFORE, for the consideration given and received herein, and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Employee and the Company agree as follows:
1. Section 6 of the Agreement is hereby amended to read as follows:
6. Compensation.
(a) The Company shall pay to the Employee as compensation for all
services rendered by the Employee hereunder including the services rendered to
Occulogix L.P. and RHEO Clinic Inc. a base salary of Cdn. $154,080.00, subject
to such reductions as may be agreed upon by the parties or required by law. This
salary shall be paid in accordance with Company's customary payroll procedure.
The Company shall provide employee benefits, incentive compensation, stock
options and vacation to the Employee in accordance with its benefit plans,
policies and procedures as may be in effect, which may be amended from time to
time. The Company warrants that all such benefits made available to the Employee
shall be consistent with those offered and made available to other employees at
the same or similar level as that of the Employee; provided, however, that the
Employee's vacation level shall initially be an entitlement of 15 days as at the
date of this agreement and an entitlement to earn 15 days per year, accruing in
accordance with the Company's vacation policy. Notwithstanding the foregoing, in
the event that Employee cannot participate in one or more of such plans by
reason of the Employee's Canadian citizenship or residency, then the Company
shall provide a reasonably equivalent cash reimbursement to permit the Employee
to obtain the such benefits on an individual basis, or on a group basis with
other Canadian employees of the Company, to the extent reasonably available. The
parties anticipate that one of such plans will be a stock option plan providing
for the grant to employees of options to purchase the common stock of the
Company, which
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plan the Company expects to implement before December 31, 2003. The Employee
shall be entitled to an annual bonus of 20% of Employee's annual base salary,
which bonus shall be granted at the sole discretion of the Company based on
specific measurable objectives determined by the Company.
(b) The Employee shall be reimbursed for all usual and customary
out-of-pocket expenses incurred as the result of any and all business-related
activities pursuant to this Agreement, all in accordance with a uniform policy
established by the Board of Directors of the Company from time to time;
provided, however, that reimbursement under this Section shall not be made until
and unless the Employee has furnished the Company with an appropriate receipt or
such other documents as may be reasonably required by the Company to
substantiate the nature and amount of the expenses incurred by the Employee.
2. All other Sections of the Agreement shall remain the same, in full
force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to Employment
Agreement to be executed and delivered as of the date first written above.
Vascular Sciences Corporation
By:/s/ Elias Vamvakas
------------------
Elias Vamvakas
/s/ Bill Dumencu
------------------
Bill Dumencu