EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") dated as of
September 5, 2003, but effective as of July 15, 2003, is by and between Isolagen
Technologies, Inc., a Delaware corporation (together with its subsidiaries, the
"Company" or "Isolagen"), and Xxxxxxx X. Xxxx (the "Employee" or "Tomz").
W I T N E S S E T H:
WHEREAS, the Employee desires to serve the Company as its Chief
Financial Officer and Secretary; and WHEREAS, the Company desires to employ Tomz
as Chief Financial Officer and Secretary of Isolagen;
NOW THEREFORE in consideration of the mutual benefits to be derived
from this Agreement, the Company and the Employee hereby agree as follows:
1. Term of Employment; Office and Duties.
(a) Commencing on the date of execution of this Agreement
(the "Employment Date"), and for an initial term ending July 15, 2005, the
Company shall employ the Employee as a senior executive of the Company with the
title of Chief Financial Officer and Secretary, with the duties and
responsibilities prescribed for such offices in the Bylaws of the Company and
such additional duties and responsibilities consistent with such positions as
may from time to time be assigned to the Employee by the Board of Directors.
Employee agrees to perform such duties and discharge such responsibilities in
accordance with the terms of this Agreement. This Agreement shall be renewed for
an additional one (1) year term, by the mutual written agreement of the Employee
and the Company at least thirty (30) days prior to its expiration.
(b) The Employee shall devote all of his working time to
the business and affairs of the Company other than during vacations of four
weeks per year and periods of illness or incapacity; provided, however, that
nothing in this Agreement shall preclude the Employee from devoting time
required: (i) for serving as a director or officer of any organization or entity
not in a competing business with the Company, and any other businesses in which
the Company becomes involved; (ii) delivering lectures or fulfilling speaking
engagements; or (iii) engaging in charitable and community activities; provided,
however, that such activities do not interfere with the performance of his
duties hereunder.
2. Compensation and Benefits.
For all services rendered by the Employee in any capacity during the
period of Employee's employment by the Company, including without limitation,
services as an executive officer or member of any committee of the Board of
Directors or any subsidiary, affiliate or division thereof, from and after the
Effective Date the Employee shall be compensated as follows:
(a) Base Salary. The Company shall pay the Employee a
fixed salary ("Base Salary") at a rate of Two Hundred Thousand Dollars
($200,000) per year. The Board of
Directors may periodically review the Employee's Base Salary with a view to
increasing such Base Salary if, in the judgment of the Board of Directors, the
earnings of the Company or the services of the Employee merit such an increase.
Base Salary will be payable in accordance with the customary payroll practices
of the Company.
(b) Bonus. Employee will be entitled to receive an annual
bonus ("the "Annual Bonus"), payable each year subsequent to the issuance of
final audited financial statements, but in no case later than 150 days after the
end of the Company's most recently completed fiscal year. The final
determination on the amount of the Annual Bonus will be made by the Compensation
Committee of the Board of Directors. The targeted amount of the Annual Bonus
shall be a percentage of the Employee's base salary. The targeted percentage is
30%.
(c) Fringe Benefits.
(i) The Employee shall be entitled to
participate in such disability, health and life insurance and other fringe
benefit plans or programs, including a Section 401(k) retirement plan, of the
Company established from time to time by the Board of Directors, if any, to the
extent that his position, tenure, salary, age, health and other qualifications
make him eligible to participate, subject to the rules and regulations
applicable thereto. Such additional benefits shall include, but not be limited
to, paid sick leave and individual health insurance, the latter in accordance
with the policies of the Company. Where possible, all waiting and eligibility
periods will be waived.
(ii) skipped
(iii) The vesting of any options held by the
Employee shall accelerate: a) upon a change in control of the Company as defined
in Rule 405 of the Securities Act of 1933; b) upon sale of substantially all of
the assets of the Company or the merger out of existence of the Company; c) if
the Employee's employment with the Company is terminated with or without cause;
d) if the Employee's employment with the Company is terminated by Death or
Disability; e) or if the Employee's employment with the Company is terminated by
the Employee for "Good Reason".
(d) Withholding and Employment Tax. Payment of all
compensation hereunder shall be subject to customary withholding tax and other
employment taxes as may be required with respect to compensation paid by an
employer/corporation to an employee.
(e) Disability. skipped
(f) Death. skipped
(g) Vacation. Employee shall receive four (4) weeks of
vacation annually, administered in accordance with the Company's existing
vacation policy.
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3. Business Expenses.
The Company shall pay or reimburse all reasonable travel and
entertainment expenses incurred by the Employee in connection with the
performance of his duties under this Agreement, including reimbursement for
attending out-of-town meetings of the Board of Directors in accordance with such
procedures as the Company may from time to time establish for senior officers
and as required to preserve any deductions for federal income taxation purposes
to which the Company may be entitled and subject to the Company's normal
requirements with respect to reporting and documentation of such expenses.
4. Termination of Employment.
Notwithstanding any other provision of this Agreement, Employee's
employment with the Company may be terminated upon written notice to the other
party as follows:
(a) By the Company, in the event of the Employee's death
or Disability (as hereinafter defined) or for Cause (as hereinafter defined).
For purposes of this Agreement, "Cause" shall mean either: (i) the indictment
of, or the bringing of formal charges against, Employee by a governmental
authority of competent jurisdiction for charges involving criminal fraud or
embezzlement; (ii) the conviction of Employee of a crime involving an act or
acts of dishonesty, fraud or moral turpitude by the Employee, which act or acts
constitute a felony;; (iii) Employee having willfully caused the Company,
without the approval of the Board of Directors, to fail to abide by either a
valid contract to which the Company is a party or the Company's Bylaws; (iv)
Employee having committed acts or omissions constituting gross negligence or
willful misconduct with respect to the Company; (v) Employee having committed
acts or omissions constituting a material breach of Employee's duty of loyalty
or fiduciary duty to the Company or any material act of dishonesty or fraud with
respect to the Company which are not cured in a reasonable time, which time
shall be 30 days from receipt of written notice from the Company of such
material breach; or (vi) Employee having committed acts or omissions
constituting a material breach of this Agreement which are not cured in a
reasonable time, which time shall be 30 days from receipt of written notice from
the Company of such material breach. A determination that Cause exists as
defined in clauses (iv), (v), or (vi) (as to this Agreement) of the preceding
sentence shall be made by at least a majority of the members of the Board of
Directors. For purposes of this Agreement, "Disability" shall mean the inability
of Employee, in the reasonable judgment of a physician appointed by the Board of
Directors, to perform his duties of employment for the Company or any of its
subsidiaries because of any physical or mental disability or incapacity, where
such disability shall exist for an aggregate period of more than 120 days in any
365-day period or for any period of 90 consecutive days. The Company shall by
written notice to the Employee specify the event relied upon for termination
pursuant to this Section 4(a), and Employee's employment hereunder shall be
deemed terminated as of the date of such notice. In the event of any termination
under this Subsection 4(a), the Company shall pay all amounts then due to the
Employee under Section 2(a) of this Agreement for any portion of the payroll
period worked but for which payment had not yet been made up to the date of
termination, and, if such termination was for Death, Disability or Cause, the
Company shall have no further obligations to Employee under this Agreement,
except, any and all unvested options granted hereunder shall immediately vest.
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(b) By the Company, in the absence of Cause, for any
reason and in its sole and absolute discretion, provided that in such event the
Company shall, as liquidated damages or severance pay, or both, continue to pay
to Employee the Base Salary (at a monthly rate equal to the rate in effect
immediately prior to such termination) for six months from the date of
termination (the "Termination Payments"). Finally, any and all unvested options
granted hereunder shall immediately vest.
(c) By the Employee for "Good Reason," (as the Employee
shall determine in good faith) which shall be deemed to exist: (i) if the
Company's Board of Directors fails to elect or reelect the Employee to, or
removes the Employee from, any of the offices referred to in Section 1(a); (ii)
if the scope of Employee's duties, responsibilities, authority or position is
significantly reduced (excluding, for this purpose, changes in responsibilities
resulting from the growth or shrinkage of the Company's business) (but not
excluding changes resulting from a sale of the Company, whether by merger,
tender offer or otherwise) provided that Employee shall act within 30 days of
any such diminution in the scope of his duties, responsibilities, authority or
position; (iii) if the Company shall have continued to fail to comply with any
material provision of this Agreement after a 30-day period to cure (if such
failure is curable) following written notice to the Company of such
non-compliance; or, (iv) upon a change in control of the Company as defined in
Rule 405 of the Securities Act of 1933 or upon sale of substantially all of the
assets of the Company or the merger out of existence of the Company. In the
event of any termination under this Section 4(c), the Company shall, as
liquidated damages or severance pay, or both, pay the Termination Payments to
Employee. Finally, any and all unvested options granted hereunder shall
immediately vest.
(d) During any period in which Employee is obligated not
to compete with the Company pursuant to Section 5 hereof (unless Employee was
terminated for Cause), Employee and his family shall continue to be covered by
the Company's life, medical, health and death plans. Such coverage shall be at
the Company's expense to the same extent as if Employee were still employed by
the Company. In the event of a termination pursuant to Sections 4(b) or 4(c),
the Company shall provide to Employee, at the Company's expense, outplacement
services of a nature customarily provided to a senior executive. Notwithstanding
the foregoing, the obligations of the Company pursuant to this Section 4(d)
shall remain in effect no longer than the term of the Termination Payments.
5. Non-Competition.
During the period of Employee's employment hereunder, the Employee
shall not, within any state in which the Company or any subsidiary of the
Company is duly qualified to do business, or in any state in which the Company
is then providing services or marketing its services (or engaged in active
discussions to provide such services), or within a one hundred (100) mile radius
of any such state, directly or indirectly own any interest in, manage, control,
participate in, consult with, render services for, or in any manner engage in
any business competing with the businesses of the Company as such businesses
exist or are in development on the date of the termination of the Employee's
employment (unless the Board of Directors shall have authorized such activity
and the Company shall have consented thereto in writing).
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Investments in less than five percent of the outstanding securities of any class
of a corporation subject to the reporting requirements of Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended, shall not be
prohibited by this Section 5. At the option of Employee and so long as Employee
shall have executed the mutual release required under Section 4(d), Employee's
obligations under this Section 5 arising after the termination of Employee shall
be suspended during any period in which the Company fails to pay to him
Termination Payments required to be paid to him pursuant to this Agreement. The
provisions of this Section 5 are subject to the provisions of Section 14 of this
Agreement.
6. Inventions and Confidential Information.
The parties hereto recognize that a major need of the Company is to
preserve its specialized knowledge, trade secrets, and confidential information.
The strength and good will of the Company is derived from the specialized
knowledge, trade secrets, and confidential information generated from experience
with the activities undertaken by the Company and its subsidiaries. The
disclosure of this information and knowledge to competitors would be beneficial
to them and detrimental to the Company, as would the disclosure of information
about the marketing practices, pricing practices, costs, profit margins, design
specifications, analytical techniques, and similar items of the Company and its
subsidiaries. The Employee acknowledges that the proprietary information,
observations and data obtained by him while employed by the Company concerning
the business or affairs of the Company are the property of the Company. By
reason of his being a senior executive of the Company, the Employee has or will
have access to, and has obtained or will obtain, specialized knowledge, trade
secrets and confidential information about the Company's operations and the
operations of its subsidiaries, which operations extend throughout the United
States. Therefore, subject to the provisions of Section 14 hereof, the Employee
hereby agrees as follows, recognizing that the Company is relying on these
agreements in entering into this Agreement:
(i) During the period of Employee's employment
with the Company and for three (3) years thereafter, the Employee will not use,
disclose to others, or publish or otherwise make available to any other party
any inventions or any confidential business information about the affairs of the
Company, including but not limited to confidential information concerning the
Company's products, methods, engineering designs and standards, analytical
techniques, technical information, customer information, employee information,
and other confidential information acquired by him in the course of his past or
future services for the Company. Employee agrees to hold as the Company's
property all books, papers, letters, formulas, memoranda, notes, plans, records,
reports, computer tapes, printouts, software and other documents, and all copies
thereof and therefrom, in any way relating to the Company's business and
affairs, whether made by him or otherwise coming into his possession, and on
termination of his employment, or on demand of the Company, at any time, to
deliver the same to the Company within twenty four (24) hours of such
termination or demand.
(ii) During the period of Employee's employment
with the Company and for one (1) year thereafter, (a) the Employee will not
directly or indirectly through another entity induce or otherwise attempt to
influence any employee of the Company to leave the Company's employ and (b) the
Employee will not directly or indirectly hire or cause to be hired
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or induce a third party to hire, any such employee (unless the Board of
Directors shall have authorized such employment and the Company shall have
consented thereto in writing) or in any way interfere with the relationship
between the Company and any employee thereof and (c) induce or attempt to induce
any customer, supplier, licensee, licensor or other business relation of the
Company to cease doing business with the Company or in any way interfere with
the relationship between any such customer, supplier, licensee or business
relation of the Company.
Notwithstanding any language to the contrary, the terms of this Section
6 will be without force and effect if the Company terminates the Employee
without cause.
7. Indemnification.
The Company will indemnify (and advance the costs of defense of) the
Employee (and his legal representatives) to the fullest extent permitted by the
laws of the state in which the Company is incorporated, as in effect at the time
of the subject act or omission, or by the Certificate of Incorporation and
Bylaws of the Company, as in effect at such time or on the date of this
Agreement, whichever affords greater protection to the Employee, and the
Employee shall be entitled to the protection of any insurance policies the
Company may elect to maintain generally for the benefit of its executive
officers, against all judgments, damages, liabilities, costs, charges and
expenses whatsoever incurred or sustained by him or his legal representative in
connection with any action, suit or proceeding to which he (or his legal
representatives or other successors) may be made a party by reason of his being
or having been an officer of the Company or any of its subsidiaries except that
the Company shall have no obligation to indemnify Employee for liabilities
resulting from conduct of the Employee with respect to which a court of
competent jurisdiction has made a final determination that Employee committed
gross negligence or willful misconduct.
8. Litigation Expenses.
In the event of any litigation or other proceeding between the Company
and the Employee with respect to the subject matter of this Agreement and the
enforcement of the rights hereunder and such litigation or proceeding results in
final judgment or order in favor of the Employee, which judgment or order is
substantially inconsistent with the positions asserted by the Company in such
litigation or proceeding, the Company in such event shall reimburse the Employee
for all of his reasonable costs and expenses relating to such litigation or
other proceeding, including, without limitation, his reasonable attorneys' fees
and expenses. In no event shall the Employee be required to reimburse the
Company for any of the costs and expenses relating to such litigation or other
proceeding.
9. Consolidation; Merger; Sale of Assets; Change of Control.
Nothing in this Agreement shall preclude the Company from combining,
consolidating or merging with or into, transferring all or substantially all of
its assets to, or entering into a partnership or joint venture with, another
corporation or other entity, or effecting any other kind of corporate
combination provided that the corporation resulting from or surviving such
combination, consolidation or merger, or to which such assets are transferred,
or such partnership
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or joint venture assumes this Agreement and all obligations and undertakings of
the Company hereunder. Upon such a consolidation, merger, transfer of assets or
formation of such partnership or joint venture, this Agreement shall inure to
the benefit of, be assumed by, and be binding upon such resulting or surviving
transferee corporation or such partnership or joint venture, and the term
"Company," as used in this Agreement, shall mean such corporation, partnership
or joint venture or other entity, and this Agreement shall continue in full
force and effect and shall entitle the Employee and his heirs, beneficiaries and
representatives to exactly the same compensation, benefits, perquisites,
payments and other rights as would have been their entitlement had such
combination, consolidation, merger, transfer of assets or formation of such
partnership or joint venture not occurred.
10. Survival of Obligations.
Sections 4, 5, 6, 7, 8, 9, 11, 12 and 14 shall survive the termination
for any reason of this Agreement (whether such termination is by the Company, by
the Employee, upon the expiration of this Agreement or otherwise).
11. Employee's Representations.
The Employee hereby represents and warrants to the Company that (i) the
execution, delivery and performance of this Agreement by the Employee do not and
shall not conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which the Employee is a
party or by which he is bound, (ii) the Employee is not a party to or bound by
any employment agreement, noncompete agreement or confidentiality agreement with
any other person or entity and (iii) upon the execution and delivery of this
Agreement by the Company, this Agreement shall be the valid and binding
obligation of the Employee, enforceable in accordance with its terms. The
Employee hereby acknowledges and represents that he has consulted with legal
counsel regarding his rights and obligations under this Agreement and that he
fully understands the terms and conditions contained herein.
12. Company's Representations.
The Company hereby represents and warrants to the Employee that (i) the
execution, delivery and performance of this Agreement by the Company do not and
shall not conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which the Company is a party
or by which it is bound and (ii) upon the execution and delivery of this
Agreement by the Employee, this Agreement shall be the valid and binding
obligation of the Company, enforceable in accordance with its terms.
13. Enforcement.
Because the Employee's services are unique and because the Employee has
access to confidential information concerning the Company, the parties hereto
agree that money damages would not be an adequate remedy for any breach of this
Agreement. Therefore, in the event of a breach or threatened breach of this
Agreement, the Company may, in addition to other rights and remedies existing in
its favor, apply to any court of competent jurisdiction for specific
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performance and/or injunctive or other relief in order to enforce, or prevent
any violations of, the provisions hereof (without posting a bond or other
security).
14. Severability.
In case any one or more of the provisions or part of a provision
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect in any jurisdiction, such invalidity, illegality
or unenforceability shall be deemed not to affect any other jurisdiction or any
other provision or part of a provision of this Agreement, nor shall such
invalidity, illegality or unenforceability affect the validity, legality or
enforceability of this Agreement or any provision or provisions hereof in any
other jurisdiction; and this Agreement shall be reformed and construed in such
jurisdiction as if such provision or part of a provision held to be invalid or
illegal or unenforceable had never been contained herein and such provision or
part reformed so that it would be valid, legal and enforceable in such
jurisdiction to the maximum extent possible. In furtherance and not in
limitation of the foregoing, the Company and the Employee each intend that the
covenants contained in Sections 5 and 6 shall be deemed to be a series of
separate covenants, one for each county of the State of Texas and one for each
and every other state, territory or jurisdiction of the United States and any
foreign country set forth therein. If, in any judicial proceeding, a court shall
refuse to enforce any of such separate covenants, then such unenforceable
covenants shall be deemed eliminated from the provisions hereof for the purpose
of such proceedings to the extent necessary to permit the remaining separate
covenants to be enforced in such proceedings. If, in any judicial proceeding, a
court shall refuse to enforce any one or more of such separate covenants because
the total time, scope or area thereof is deemed to be excessive or unreasonable,
then it is the intent of the parties hereto that such covenants, which would
otherwise be unenforceable due to such excessive or unreasonable period of time,
scope or area, be enforced for such lesser period of time, scope or area as
shall be deemed reasonable and not excessive by such court.
15. Entire Agreement; Amendment.
Except as otherwise set forth in this Agreement, this Agreement
contains the entire agreement between the Company and the Employee with respect
to the subject matter hereof and thereof. This Agreement may not be amended,
waived, changed, modified or discharged except by an instrument in writing
executed by or on behalf of the party against whom enforcement of any amendment,
waiver, change, modification or discharge is sought. No course of conduct or
dealing shall be construed to modify, amend or otherwise affect any of the
provisions hereof.
16. Notices.
All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if physically
delivered, delivered by express mail or other expedited service or upon receipt
if mailed, postage prepaid, via registered mail, return receipt requested,
addressed as follows:
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(a) To the Company: (b) To the Employee:
Isolagen, Inc. Xxxxxxx X. Xxxx
0000 Xxxxxxxx, 0xx Xxxxx 0000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000 Xxxxxxxx, XX 00000
and to:
Xxxxxxxx Xxxxxx, LLP
0000 X. Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxx Xxxxxxxxx Xxxxxxxxx, Esquire
and/or to such other persons and addresses as any party shall have specified in
writing to the other.
17. Assignability.
This Agreement shall not be assignable by either party and shall be
binding upon, and shall inure to the benefit of, the heirs, executors,
administrators, legal representatives, successors and assigns of the parties. In
the event that all or substantially all of the business of the Company is sold
or transferred, then this Agreement shall be binding on the transferee of the
business of the Company whether or not this Agreement is expressly assigned to
the transferee.
18. Governing Law.
This Agreement shall be governed by and construed under the laws of the
State of Texas.
19. Waiver and Further Agreement.
Any waiver of any breach of any terms or conditions of this Agreement
shall not operate as a waiver of any other breach of such terms or conditions or
any other term or condition, nor shall any failure to enforce any provision
hereof operate as a waiver of such provision or of any other provision hereof.
Each of the parties hereto agrees to execute all such further instruments and
documents and to take all such further action as the other party may reasonably
require in order to effectuate the terms and purposes of this Agreement.
20. Headings of No Effect.
The paragraph headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
(SIGNATURE PAGE TO FOLLOW)
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
COMPANY:
ISOLAGEN TECHNOLOGIES, INC.
By: __________________________________
EMPLOYEE:
______________________________________
Xxxxxxx X. Xxxx
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