AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) dated as of March
11, 2008, is by and between Isolagen, Inc., a Delaware corporation (together with its subsidiaries,
the “Company” or “Isolagen”), and Xxxx X. Xxxxxxxxx, an individual residing in Hockessin, Delaware
(the “Executive”).
WITNESSETH:
WHEREAS, the Executive and the Company are parties to an agreement dated March 13, 2006
providing for Executive to serve as the Company’s Vice President, Finance and Corporate Controller
(the “Original Employment Agreement”); and
WHEREAS, the Company effective March 11, 2008 appointed Executive to serve as its Chief
Financial Officer; and
WHEREAS, the Parties desire to amend the Original Employment Agreement to reflect Executive’s
current responsibilities and to extend the term through December 31, 2010;
NOW THEREFORE in consideration of the mutual benefits to be derived from this Agreement, the
Company and the Executive hereby agree as follows:
1. Term of Employment; Office and Duties.
(a) Commencing on the date hereof (the “Employment Date”), and for an initial term ending
December 31, 2010 the Company shall employ the Executive as an executive of the Company with the
title of Chief Financial Officer, 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 Executive by the Board of Directors.
Specifically included in the Executive’s responsibilities shall be the identification, recruitment
and retention of the members of the finance and accounting team of the Company, with the advice and
consent of the Board of Directors. Executive 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 Executive and the
Company at least thirty (30) days prior to its expiration.
(b) The Executive shall devote substantially 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
Executive from devoting time required: (i) delivering lectures or fulfilling speaking engagements;
or (ii) engaging in charitable and community activities provided that such activities do
not interfere with the performance of his duties hereunder.
2. Compensation and Benefits.
For all services rendered by the Executive in any capacity during the period of Executive’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 Executive shall be compensated as follows:
(a) Base Salary. The Company shall pay the Executive a fixed salary (“Base Salary”)
at a rate of Two Hundred Forty Thousand Dollars ($240,000) per year. The Board of Directors may
periodically review the Executive’s Base Salary and may determine to increase (but not decrease)
the Executive’s salary, in accordance with such policies as the Company may hereafter adopt from
time to time, if it deems appropriate. Base Salary will be payable in accordance with the
customary payroll practices of the Company.
(b) Executive will also 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 120 days after the end of the Company’s most recently completed fiscal year based upon a 40%
target bonus, with the targets for any given fiscal year being established by the chief executive
officer and agreed to by the Compensation Committee. The final determination on the amount of the
Annual Bonus will be made by the Compensation Committee of the Board of Directors, within ninety
(90) days of the end of each fiscal year. The Compensation Committee may also consider other more
subjective factors in making its determination.
(c) Fringe Benefits, Option Grants and Miscellaneous Employment Matters.
(i) The Executive 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. In addition, the Executive
shall be entitled to the following benefits:
(ii) Contemporaneous with the execution of this Agreement, Executive received a grant (the
“Stock Option Grant”) of stock options (the “Stock Options”) to purchase 200,000 shares at an
exercise price equal to the closing transaction price of the Company’s Common Stock on the
effective date of execution of this Agreement. The Stock Options shall have a term of ten (10)
years, shall become exercisable when vested, and shall vest pro rata in three equal annual
installments (1/3rd on the first, second and third anniversary dates of the execution of the
Agreement). Notwithstanding the foregoing, the Stock Options shall terminate ninety (90) days
following a termination of the Executive for “Cause.” However, if Executive’s employment with the
Company is terminated without “Cause”, all unvested portions of the Stock Option Grant shall vest
immediately upon such termination.
(iii) The vesting of the Stock Options shall accelerate and vest immediately 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.
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(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. The Company shall, to the extent such benefits can be obtained at a
reasonable cost, provide the Executive with disability insurance benefits.
(f) Death. The Company shall, to the extent such benefits can be obtained at a
reasonable cost, provide the Executive with life insurance benefits.
(g) Vacation. Executive shall receive four (4) weeks of vacation annually,
administered in accordance with the Company’s existing vacation policy.
(h) Life Insurance. The Company shall provide the Executive with one million
($1,000,000) of term life insurance, on an annual basis.
3. Business Expenses.
The Company shall pay or reimburse all reasonable travel and entertainment expenses incurred
by the Executive in connection with the performance of his duties under this Agreement, including
travel between Executive’s current domicile in the Hockessin, Delaware metropolitan area, travel to
the Company’s various offices (other than his primary assigned office in Exton, PA) and facilities
in the United states and abroad, reimbursement for attending out-of-town meetings of the Board of
Directors, and such other travel as may be required or appropriate to fulfill the responsibilities
of his office, all in accordance with such policies and 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. The Company shall pay to
Executive a non-accountable automobile allowance of four hundred ($400) dollars per month for all
expenses incurred by the Executive for Executive’s automobile (including lease payments, insurance,
maintenance, and gasoline).The Company shall also pay or reimburse Executive for reasonable
membership fees and dues in appropriate professional associations and organizations utilized by
Executive in the course of his service for the Company including reasonable expenses of Continuing
Education Courses to satisfy requirement of his State Society CPE requirements..
4. Termination of Employment.
Notwithstanding any other provision of this Agreement, Executive’s employment with the Company
may be terminated upon written notice to the other party as follows:
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(a) By the Company, in the event of the Executive’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,
Executive by a governmental authority of competent jurisdiction for charges involving criminal
fraud or embezzlement; (ii) the conviction of Executive of a crime involving an act or acts of
dishonesty, fraud or moral turpitude by the Executive, which act or acts constitute a felony; (iii)
Executive 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
or; (iv) Executive having committed acts or omissions constituting gross negligence or willful
misconduct with respect to the Company; (v) Executive having committed acts or omissions
constituting a material breach of Executive’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) Executive having committed acts or omissions constituting a material
breach of this Agreement, including any failure of the Executive to follow a directive from the
Board of Directors and/or its Audit Committee, 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 (vii)
Executive having failed to meet agreed upon minimum performance criteria. A determination that
Cause exists as defined in clauses (iv), (v), (vi) or (vii) (as to this Agreement) of the preceding
sentence shall be made in good faith and by at least a majority of the members of the Board of
Directors. For purposes of this Agreement, “Disability” shall mean the inability of Executive, 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 Executive specify the event relied upon for termination pursuant to this
Section 4(a), and Executive’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 Executive 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 Cause, the Company shall have no further obligations to Executive
under this Agreement, and any and all options granted hereunder shall terminate according to their
terms. In the event of a termination due to Executive’s Disability or death, the Company shall
comply with its obligations under Sections 2(e) and 2(f).
(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 Executive the Base Salary (at a monthly rate equal to the rate in
effect immediately prior to such termination) for the lesser of the remaining term as defined above
or twelve months from the date of termination (the “Termination Payments”), when, as and if such
payments would have been made in the absence of Executive’s termination subject to the following
limitation: if the Executive becomes employed following termination, all Termination Payments
shall cease except that Executive shall receive at least six months of Termination Payments
notwithstanding reemployment. Executive shall be obliged to make best efforts to attempt to
mitigate the amount of Termination Payments due hereunder.
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5. Non-Competition.
During the period of Executive’s employment hereunder and during the period, if any, during
which payments are required to be made to the Executive by the Company pursuant to Sections 4(b) or
4(c), the Executive shall not, within any state or foreign jurisdiction in which the Company or any
subsidiary of the Company is then providing services or products or marketing its services or
products (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 engaged
in any business engaged in by the Company (unless the Board of Directors shall have authorized such
activity and the Company shall have consented thereto in writing). The term “business engaged in
by the Company” shall mean the development and commercialization of autologous fibroblast system
technology for application in, among other therapies, dermatology, surgical and post-traumatic
scarring, skin ulcers, cosmetic surgery, periodontal disease, reconstructive dentistry, vocal chord
injuries, urinary incontinence, and digestive and gastroenterological disorders and other
applications relating to the market for autologous fibroblast or UMC cells and the five derivative
cell lines: osteoblast, chondroblast, fibroblast, adipocyte, and neuroectoderm. Investments of 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 Executive and so long as
Executive shall have executed the mutual release required under Section 4(d), Executive’s
obligations under this Section 5 arising after the termination of Executive 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 Executive 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 Executive 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. [For
purposes of this Section 6, “Company” shall mean to Company and each of its controlled
subsidiaries.] Therefore, subject to the provisions of Section 14 hereof, the Executive hereby
agrees as follows, recognizing that the Company is relying on these agreements in entering into
this Agreement:
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(i) The Executive 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. Executive 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.
(iv) During the period of Executive’s employment with the Company and for twenty-four (24)
months thereafter, (a) the Executive 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 Executive will not directly or indirectly hire or cause to be hired 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.
7. Indemnification.
The Company will indemnify (and advance the costs of defense of) the Executive (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 Executive, and the Executive 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 Executive for
liabilities resulting from conduct of the Executive with respect to which a court of competent
jurisdiction has made a final determination that Executive committed gross negligence or willful
misconduct.
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8. Litigation Expenses.
In the event of any litigation or other proceeding between the Company and the Executive 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 Executive, which
judgment or order is substantially inconsistent with the positions asserted by the Company in such
litigation or proceeding, the Company shall reimburse the prevailing party for all of his/its
reasonable costs and expenses relating to such litigation or other proceeding, including, without
limitation, his/its reasonable attorneys’ fees and expenses.
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
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 Executive 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, 10, 11, 12 and 14 shall survive the termination for any reason of
this Agreement (whether such termination is by the Company, by the Executive, upon the expiration
of this Agreement or otherwise).
11. Executive’s Representations.
The Executive hereby represents and warrants to the Company that (i) the execution, delivery
and performance of this Agreement by the Executive 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 Executive is a party or by which he is bound, (ii) the Executive is not a party to or
bound by any employment agreement, non-compete 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 Executive, enforceable in
accordance with its terms. The Executive 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.
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12. Company’s Representations.
The Company hereby represents and warrants to the Executive 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 Executive, this Agreement shall be the valid and binding obligation of the
Company, enforceable in accordance with its terms.
13. Enforcement.
Because the Executive’s services are unique and because the Executive 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 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
Executive 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.
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15. Entire Agreement; Amendment.
Except as otherwise set forth in this Agreement, this Agreement contains the entire agreement
between the Company and the Executive 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:
| (a) To the Company: | (b) To the Executive: | |||
| Isolagen, Inc. | Xxxx X. Xxxxxxxxx | |||
| 000 Xxxxxxxxx Xxxx. | [Home Address] | |||
| Xxxxx, XX 00000 | ||||
| Attention: Xxxxxx Xxxx | ||||
| with copy by like means to : | ||||
| Cozen X’Xxxxxx | ||||
| 0000 Xxxxxx Xxxxxx | ||||
| Xxxxxxxxxxxx, XX 00000 | ||||
| Attn: Cavas Xxxxx, Esq. |
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 Commonwealth of
Pennsylvania.
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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.
IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date
first above written.
| COMPANY: ISOLAGEN, INC. |
||||
| By: | ||||
| Xxxxxx Xxxx, Chief Executive Officer | ||||
| EXECUTIVE: |
||||
| Xxxx X. Xxxxxxxxx | ||||
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