exv10w20



 




Exhibit 10.20




EMPLOYMENT AGREEMENT




THIS AGREEMENT is made effective as of the 6th day of December, 1999.




BETWEEN:





WESTAIM
BIOMEDICAL INC., a corporation incorporated under the laws of
Delaware,




(the “Corporation”)



AND:





SCOTT
H. GILLIS, of the City of Shelton, in the State of Connecticut,




(the
“Executive”)



RECITAL:





	A.	 	The Corporation and the Executive wish to enter into this Agreement to set forth the rights
and obligations of each of them in respect of the Executive’s employment with the Corporation;




NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement
and other good and valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the Corporation and the Executive agree as follows:





	1.	 	Definitions
	 
	 	 	In this Agreement,






	 	(a)	 	“Affiliate” and “Associate” have the meanings attributed to such terms in the
Business Corporations Act (Alberta) as the same may be amended from time to time and
any successor legislation thereto;












 



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	 	(b)	 	“Agreement” means this agreement as it may be amended or supplemented from
time to time, and the expressions “hereof”, “herein”, “hereto”, “hereunder”, “hereby” and
similar expressions refer to this agreement and unless otherwise indicated, references to
sections are to sections in this agreement;
	 
	 	(c)	 	“Allowance” has the meaning attributed to such term in section 5(d).
	 
	 	(d)	 	“Business Day” means any day, other than Saturday, Sunday or any statutory
holiday in Alberta;
	 
	 	(e)	 	“CEO” means the President & Chief Executive Officer of The Westaim
Corporation;
	 
	 	(f)	 	“Change of Control” has the meaning attributed to such term in the Change of
Control Agreement;
	 
	 	(g)	 	“Change of Control Agreement” means the change of control agreement between
the Corporation and the Executive, dated effective as of the date of this Agreement,
relating to the Executive’s rights in the event of a Change of Control of the Corporation,
as defined therein;
	 
	 	(h)	 	“Confidential Information” means all confidential or proprietary information, intellectual
property (including trade secrets) and confidential facts relating to the business and
affairs of the Corporation and its Subsidiaries, Associates and Affiliates;
	 
	 	(i)	 	“Disability” means the mental or physical state of the Executive such that:






	 	(i)	 	the directors of the Corporation, other than the Executive, determine that
the Executive has been unable, due to illness, disease, mental or physical disability
or similar cause, to fulfil his obligations as an employee of the Corporation either
for any consecutive seven (7) month period or for any












 



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	 	 	 	period of twelve (12) months (whether or not consecutive) in any
consecutive twenty-four (24) month period; or
	 
	 	(ii)	 	a court of competent jurisdiction has declared the Executive to be
mentally incompetent or incapable of managing his affairs;






	 	(j)	 	“Employment Period” has the meaning attributed to such term in section 4;
	 
	 	(k)	 	“Just Cause” means failure of the Executive to properly carry out his duties after written
notice by the Corporation of the failure to do so and an opportunity for the Executive to
correct the same within a reasonable time from the date of receipt of such written notice from
the Corporation, or theft, fraud or dishonesty or misconduct by the Executive involving the
property or affairs of the Corporation or the carrying out of the Executive’s duties, or a
criminal conviction against the Executive, the nature of which adversely reflects against the
character, integrity or reputation of the Executive or the ability of the Executive to perform
his duties hereunder;
	 
	 	(l)	 	“Person” means any individual, partnership, limited partnership, joint venture, syndicate,
sole proprietorship, company or corporation with or without share capital, unincorporated
association, trust, trustee, executor, administrator or other legal personal representative,
regulatory body or agency, government or governmental agency, authority or entity however
designated or constituted;
	 
	 	(m)	 	“Salary” has the meaning attributed to such term in section 5(a);
	 
	 	(n)	 	“Stop Work Notice” has the meaning attributed to such term in section 8(a)(iii);
	 
	 	(o)	 	“Subsidiary” has the meaning attributed to such term by the Business Corporations Act
(Alberta) as the same may be amended from time to time and any successor legislation thereto;











 



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	 	(p)	 	“Time Period” means twelve (12) months; and
	 
	 	(q)	 	“Year of Employment” means any twelve (12) month period commencing on the
date of this Agreement or on any anniversary of such date.






	2.	 	Employment of the Executive
	 
	 	 	The Corporation shall employ the Executive, and the Executive shall serve the Corporation,
in the position of President, on the conditions and for the remuneration hereinafter set
out. In such position, the Executive shall perform or fulfil such duties and
responsibilities as the Corporation may designate and as are consistent with the Executive’s
position and the Executive’s education and training.
	 
	3.	 	Performance of Duties
	 
	 	 	During the Employment Period, the Executive shall faithfully, honestly and diligently serve
the Corporation and shall carry out such tasks as the Corporation may from time to time
request. The Executive shall (except in the case of illness or accident) devote
substantially all of his working time and attention to his employment hereunder and shall
use his best efforts to promote the interests of the Corporation and its Affiliates and
Subsidiaries. The Executive shall report to and accept direction from such individual as may
be specified from time to time by the Corporation. Until further notice, the Executive shall
report to the CEO. The CEO shall direct the employment of the Executive hereunder on behalf
of the Corporation.
	 
	4.	 	Employment Period
	 
	 	 	The Executive’s employment under this Agreement shall, subject to section 8, be for an
indefinite period of time. Accordingly, the Corporation shall employ the Executive and the
Executive shall serve the Corporation as an employee in accordance with this Agreement for
the period beginning as of the date hereof and ending on the effective date












 



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	 	 	the employment of the Executive under this Agreement is terminated in accordance with
section 8(b) (the “Employment Period”).
	 
	5.	 	Remuneration






	 	(a)	 	Basic Remuneration. The Corporation shall pay the Executive a gross
salary in
respect of each Year of Employment in the Employment Period (before deduction
for income taxes and other required deductions) of $225,000 (the “Salary”)
payable in equal installments on the 15th and last day in each month
during such
year, with a pro-rata adjustment in the Salary in the event that such year begins or
terminates on a day other than the 15th or last day in a month.
	 
	 	(b)	 	Variable Pay. The Executive shall be entitled to participate in the
Corporation’s
variable pay program, at such levels and with such performance goals as may be
agreed to between the Corporation and the Executive, from time to time.
	 
	 	(c)	 	Benefits. The Corporation shall provide to the Executive, in addition
to Salary,
benefits pursuant to health insurance, life insurance, disability insurance, and
other benefit plans as are provided from time to time by the Corporation for its
senior employees.
	 
	 	(d)	 	Additional Employment Perquisites. The Corporation shall
provide to the
Executive an annual allowance (the “Allowance”) in lieu of perquisites of
$20,000, payable in the same manner as Salary.






	6.	 	Expenses
	 
	 	 	The Corporation shall pay or reimburse the Executive for all travel and out-of-pocket
expenses reasonably incurred or paid by the Executive in the performance of his duties upon
presentation of expense statements or receipts or such other supporting documentation as
the Corporation may reasonably require.












 



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	7.	 	Vacation
	 
	 	 	The Executive shall be entitled during each Year of Employment during the Employment Period
to vacation with pay of three (3) weeks. Vacation shall be taken by the Executive at such
time as may be acceptable to the Corporation having regard to its operation.
Notwithstanding the foregoing, in the event that the Executive’s employment under this
Agreement is terminated pursuant to section 8, the Executive shall not be entitled to
receive any payment in lieu of any vacation to which he was entitled and which had not then
been taken by him except to the extent, if any, of payments required by any legislation
applicable to the Executive’s employment.
	 
	8.	 	Termination






	 	(a)	 	Notice. The Executive’s employment hereunder may be terminated:






	 	(i)	 	by the Corporation without notice for reasons of Just Cause or
because of the occurrence of Disability;
	 
	 	(ii)	 	by the death of the Executive;
	 
	 	(iii)	 	in any other case, by the Corporation giving written notice
(a “Stop Work Notice”) to the Executive (which may be given by the Corporation
at any time) to require that the Executive immediately cease his duties under
this Agreement and cease attending the Corporation’s premises immediately upon
the giving of the Stop Work Notice; or
	 
	 	(iv)	 	by the Executive on at least one (1) month prior written
notice, provided however that upon service of such notice by the Executive to
the Corporation, the Corporation may, in its sole discretion, waive the one
(1) month notice period (or any other period of notice that the Executive may
specify).











 



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	 	(b)	 	Effective Date. The effective date on which the Executive’s employment
hereunder shall be terminated shall be:






	 	(i)	 	in the case of termination under section 8(a)(i), the day the Corporation
notifies (either in writing or orally) the Executive of such termination;
	 
	 	(ii)	 	in the case of the death of the Executive, the day of death;
	 
	 	(iii)	 	in the case of termination under section 8(a)(iii), the day the Corporation
serves the Stop Work Notice; and
	 
	 	(iv)	 	in the case of termination under section 8(a)(iv), the earlier to occur of:






	 	(A)	 	the last day of the applicable notice period referred to in
the notice
served by the Executive; and
	 
	 	(B)	 	the date the Corporation waives the notice period referred to
in the
notice served by the Executive.






	 	(c)	 	Payment Upon Stop Work Notice. If a Stop Work Notice is given by the
Corporation to the Executive under section 8(a)(iii), the Corporation shall pay or
provide to the Executive the following:






	 	(i)	 	a lump sum payment equal to the Salary and Allowance of the Executive for
the Time Period, less any required withholdings;
	 
	 	(ii)	 	subject to section 9(b), the Executive shall be entitled to continue to
remain on all benefit plans provided by the Corporation to the Executive as at the
date of the Stop Work Notice to the first to occur of:






	 	(A)	 	the end of the Time Period; or











 



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	 	(B)	 	the day when the Executive commences employment with a new
employer and is eligible to receive benefits from such new employer;
and






	 	(iii)	 	subject to section 9(b), the Corporation shall reimburse the
Executive for any expenses incurred for outplacement services to a maximum of
$10,000, payable immediately upon submission of receipts for such services,
provided that such expenses are incurred by the Executive within the first to
occur of:






	 	(A)	 	the end of the Time Period; and
	 
	 	(B)	 	the day when the Executive commences employment
with a new
employer.






	 	(d)	 	Change of Control. Notwithstanding any provision of this Agreement, in
the event there is a Change of Control of the Corporation, then the provisions of the
Change of Control Agreement shall govern and supersede any provision of this Agreement
to the contrary. Except to the extent that this Agreement is superseded by the Change
of Control Agreement in accordance with the foregoing, this Agreement shall continue
to govern the other terms of the Executive’s employment by the Corporation in the
event of a Change of Control of the Corporation.






	9.	 	Non-Competition






	 	(a)	 	Agreement to Not Compete. The Executive shall not, either during the
Employment Period or for a period of twelve (12) months thereafter, directly or
indirectly, in any manner whatsoever including, without limitation, either
individually, or in partnership, jointly or in conjunction with any other Person, or
as employee, principal, agent, director or shareholder:













 



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	 	(i)	 	be engaged in any undertaking;
	 
	 	(ii)	 	have any financial or other interest (including an interest by way of
royalty or other compensation arrangements) in or in respect of the business of any
Person which carries on a business; or
	 
	 	(iii)	 	advise, lend money to, or guarantee the debts or obligations of any Person
which carries on a business;






	 	 	 	in Canada or the United States which is the same as or substantially similar to or which
competes with or would compete with the business carried on at that time by the
Corporation or any of its Subsidiaries.
	 
	 	 	 	It is acknowledged by the Corporation that the Executive shall not be in breach of this
paragraph by reason only of owning shares in a publicly traded company (including indirect
ownership through a mutual fund) in circumstances where the Executive is only a minor
public shareholder and does not exercise any influence or direction over such company.
	 
	 	(b)	 	Breach of Non-Compete. If, upon the giving of a Stop Work Notice by the Corporation
to the Executive, the Executive subsequently breaches his agreement to not compete contained
in section 9(a), then, in addition to any other remedies that may be available to the
Corporation:






	 	(i)	 	the Executive shall forthwith repay to the Corporation a percentage of the
total compensation paid by the Corporation to the Executive pursuant to section
8(c)(i) equal to X/12, where X equals 12 less the number of months from termination
of the Executive’s employment to the date of the Executive’s breach of section 9(a);
	 
	 	(ii)	 	the Executive shall no longer be entitled to receive benefits as provided
for in section 8(c)(ii);












 



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	 	(iii)	 	the Executive shall not be entitled to any further
reimbursement of outplacement services expenses incurred after the date of
breach as provided for in section 8(c)(iii); and
	 
	 	(iv)	 	all unvested stock options or stock appreciation rights shall
forthwith be cancelled and terminated, notwithstanding the provisions of any
agreements (including stock option agreements) to the contrary.






	10.	 	Confidentiality
	 
	 	 	The Executive shall not, either during the Employment Period or at any time thereafter,
directly or indirectly, use or disclose to any Person any Confidential Information
provided, however, that nothing in this section shall preclude the Executive from
disclosing or using Confidential Information if:






	 	(a)	 	the Confidential Information is in the public domain at the time of such
disclosure
or use, without breach of this Agreement; or
	 
	 	(b)	 	disclosure of the Confidential Information is required to be made by any law,
regulation, governmental body or authority or by court order.






	 	 	The Executive acknowledges and agrees that the obligations under this section are to remain
in effect in perpetuity. The Executive also acknowledges that this covenant is in addition
to the covenants of the Executive contained in any non-disclosure agreement that the
executive may sign upon commencement of employment
	 
	11.	 	Remedies
	 
	 	 	The Executive acknowledges that a breach or threatened breach by the Executive of the
provisions of sections 9 or 10 will result in the Corporation and its Subsidiaries and
their shareholders suffering irreparable harm which cannot be calculated or fully or
adequately compensated by recovery of damages alone. Accordingly, the Executive agrees
that the












 



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	 	 	Corporation shall be entitled to interim and permanent injunctive relief, specific
performance and other equitable remedies, in addition to any other relief to which the
Corporation may become entitled.
	 
	12.	 	Notices
	 
	 	 	Any notice or other communication required or permitted to be given hereunder shall be in
writing and shall be given by facsimile or other means of electronic communication or by
hand-delivery as hereinafter provided. Any such notice or other communication, if sent by
facsimile or other means of electronic communication, shall be deemed to have been received
on the Business Day following the sending, or if delivered by hand shall be deemed to have
been received at the time it is delivered to the applicable address noted below either to
the individual designated below or to an individual at such address having apparent
authority to accept deliveries on behalf of the addressee. Notice of change of address shall
also be governed by this section. Notices and other communications shall be addressed as
follows:






	 	(a)	 	if to the Executive, to the most current address of the Executive shown in the
records of the Corporation or in any notice to the Corporation by the Executive,
which address as of the date hereof is:
	 
	 	 	 	154 High Hill

Shelton, CT 06484
USA
	 
	 	(b)	 	if to the Corporation:
	 
	 	 	 	Suite 1010, 144 — 4th Avenue S.W.
Calgary, Alberta T2P 3N4

Canada





	 	 	 	 	 
	 

	 	Attention:
	 	Senior Vice President, General Counsel
	 

	 	 	 	& Corporate Secretary
	 
	 	 	 	 
	 

	 	Telecopier number:
	 	(403) 237-8181













 



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	13.	 	Assignment
	 
	 	 	This Agreement is not assignable by the Executive. The Corporation may assign this
Agreement to a purchaser or assignee of the assets and business of the Corporation, and
upon such assignment Westaim Biomedical Inc. shall be relieved of any further obligations
or liability hereunder.
	 
	14.	 	Headings
	 
	 	 	The inclusion of headings in this Agreement is for convenience of reference only and shall
not affect the construction or interpretation hereof.
	 
	15.	 	Invalidity of Provisions
	 
	 	 	Each of the provisions contained in this Agreement is distinct and severable and a
declaration of invalidity or unenforceability of any such provision by a court of competent
jurisdiction shall not affect the validity or enforceability of any other provision hereof.
	 
	16.	 	Entire Agreement, Waiver
	 
	 	 	This Agreement, as supplemented by the Change of Control Agreement, and any employee
non-disclosure agreement constitutes the entire agreement between the parties hereto
pertaining to the subject matter hereof and thereof. There are no warranties,
representations or agreements between the parties in connection with such subject matter
except as specifically set forth or referred to in this Agreement and the Change of Control
Agreement. Except as expressly provided in this Agreement, no amendment or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound thereby. No
waiver of any provision of this Agreement shall constitute a waiver of any other provision
nor shall any waiver of any provision of this Agreement constitute a continuing waiver
unless otherwise expressly provided.












 



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	17.	 	Currency
	 
	 	 	Except as expressly provided in this Agreement, all amounts in this Agreement are
stated and shall be paid in United States currency.
	 
	18.	 	Governing Law
	 
	 	 	This Agreement shall be governed and interpreted in accordance with the laws of the
Province of Alberta and the federal laws of Canada applicable therein.
	 
	19.	 	Counterparts
	 
	 	 	This Agreement may be signed in counterparts and by facsimile transmission and each of such
counterparts shall constitute an original document and such counterparts, taken together,
shall constitute one and the same instrument.





IN WITNESS WHEREOF the parties have executed this Agreement.




	 	 	 	 	 
	 	 	WESTAIM BIOMEDICAL INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 





	 	 	 	 	 	 	 
	WITNESS:

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	)	 	 	SCOTT H. GILLIS