EMPLOYMENT AGREEMENT
EXHIBIT 10.13
THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into and becomes effective as of July 1,
2005 (the “Effective Date”) by and between Artes Medical USA, Inc. (“Employer” or “Company”) and
Xxxxxx X. Xxxxxxxxx (“Employee”).
RECITALS
A. Employer is a Delaware corporation and is qualified to do business in the State of
California. Employee has provided services to Employer as a consultant since approximately February
1, 2004; and the parties desire to memorialize their relationship in writing pursuant to the terms
of this Agreement, which shall be a fully integrated agreement superceding any and all prior oral
or written understandings, representations, promises, or agreements between the parties.
B. The Parties desire that Employee serve Employer as an employee in the capacity of Chief
Creative Officer as of the Effective Date.
IN CONSIDERATION of the mutual promises and covenants of the Parties contained herein, and for
other good and valuable consideration, receipt of which is hereby acknowledged, the Parties agree
as follows:
AGREEMENT
1. Employment. Employer hereby engages Employee to serve as Chief Creative Officer
and Employee hereby accepts such engagement upon the terms and conditions set forth herein.
a. Revocation of Prior Agreements/Assignment of Intellectual Property Rights. The
parties hereby rescind and revoke that certain License Agreement dated as of June 25, 2005 (the
“License Agreement”) and that certain Employment Agreement as of July 1, 2005 and all exhibits
attached thereto (“Employment Agreement”) and agree that this Agreement and its exhibits shall
supercede all such agreements and the License Agreement and Employment Agreement are hereby void
and of no effect.
2. Term. The term of this Agreement shall begin on the Effective Date stated above
and shall remain in effect for four (4) years, unless terminated pursuant to Section 12. The
Agreement shall continue from year to year after July 1, 2009, unless or until terminated pursuant
to Section 12.
3. Duties. Employee is employed to serve as Chief Creative Officer and shall perform
such duties as are set forth on Exhibit A, those duties which are customarily performed by a Chief
Creative Officer and such other duties as the Chief Executive Officer assigns from time to time.
Employee acknowledges that he will report to the Chief Executive Officer who will be Employee’s
supervisor until such time that such reporting requirements are modified by the Chief Executive
Officer. As part of Employee’s duties, Employee acknowledges and
understands that: (a) Employee will devote his utmost knowledge and best skill to the
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performance of his duties; (b) except as set forth otherwise below in Section 4, Employee will
devote one hundred percent of his professional time, attention and skill to the Employer and his
duties and responsibilities as the Chief Creative Officer; and (c) except as set forth otherwise
below in Section 4, Employee will not engage in any other gainful occupation which requires his
personal attention without prior consent of Employer, with the exception that Employee may
personally trade in stock, bonds, securities, commodities or real estate investments for his own
benefit.
4. Non-Competition. During the Employment Term and for any subsequent period of time
during which Employee continues to receive compensation from Employer, Employee shall not, without
the prior written permission of Employer, directly or indirectly, (a) render any services to any
person, firm or corporation engaged in any Competitive Business (as defined below); (b) engage in
any Competitive Business for his own account; (c) become associated with or interested in any
Competitive Business as an individual, partner, shareholder, creditor, director, officer,
principal, agent, employee, trustee, consultant, advisor or in any other relationship of capacity;
(d) employ or retain, or have or cause any other person or entity to employ or retain, any person
who was employed or retained by Employer or its affiliates while the Employee was employed by
Employer. However, nothing in this Agreement shall preclude the Employee from investing his
personal assets in the securities of any Competitive Business if such securities are traded on a
national stock exchange or in the over-the-counter market if such investment does not result in his
beneficially owning, at any time, more than 4.9% of the publicity-traded equity securities of such
competitor. “Competitive Business” shall mean any business or enterprise which (a) designs, sells,
manufactures, markets and/or distributes injectable material for soft tissue augmentation or (b)
engages in any other business in which Employer is or has been involved during the twelve month
period immediately prior to the termination of the Employee’s employment. Notwithstanding the
foregoing, the parties acknowledge and Employer consents to the artistic and creative activities of
Employee, including those performed as a professional photographer, which are not performed during
Employee’s work hours and not for the benefit of Employer, so long as such activities do not
interfere with his duties as an employee of Employer, as set forth above in Section 3 and are in
compliance with the terms, conditions and obligations of this Section 4 and Exhibit B, attached
hereto and incorporated herein by this reference.
5. Confidentiality and Non-Disclosure. Employee shall not disclose any information
relating to Employer, its employees or customers, and information regarding the affairs or
operations of Employer, including Employer proprietary information, trade secrets, patents and
customer lists, to any third party or parties during or after the term of this Agreement, without
the prior written consent of Employer. Employee also shall not solicit, interfere with, or
endeavor to entice away from Employer any of its customers or sources of supply. In connection
with these obligations, Employee shall execute a Proprietary Information and Inventions Agreement
attached hereto as Exhibit B.
6. Limitations on Authority. The limitations on the authority of Employee to bind
Employer with respect to agreements with third parties shall be in accordance with Employer’s
policies and procedures as amended from time to time.
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7. Personnel Policies and Procedures. The Employer has established an Employee
Handbook setting forth policies and procedures of the Employer and retains the authority to amend
the provisions of the Employee Handbook and establish from time to time new or revised personnel
policies and procedures to be followed by its employees. Employee agrees to comply with the
Employee Handbook and any additional policies and procedures of the Employer. To the extent any
provisions in Employer’s Employee Handbook or other personnel policies and procedures differ with
the terms of this Agreement, the terms of this Agreement shall apply.
8. Compensation.
a. Salary. Employee shall be paid a base salary of One Hundred Fifty-Five Thousand
Dollars ($155,000.00) per year, subject to standard payroll deductions and withholdings, payable
bi-weekly pursuant to the payroll procedures regularly established, and amended, by the Employer
during the term of this Agreement.
b. Stock Options and Warrants. As consideration for services rendered and in lieu of
additional compensation prior to this Agreement, Employer and Employee acknowledge that Employee
has been granted fully-paid warrants to purchase 42,500 shares of common stock in accordance with
the terms of that certain Warrant Agreement attached as Exhibit C. No further warrants shall be
granted as consideration for services after the Effective Date of this Agreement. In addition to
the warrants in lieu of compensation, Employee has been granted options to purchase 135,000 shares
of common stock on a vesting schedule set forth in that certain Stock Option Agreement, in the form
attached hereto as Exhibit D and incorporated herein by this reference.
c. Additional Consideration.
i. The parties acknowledge and agree that in consideration of the assignment by Employee of
all Rights in Proprietary Information to Employer created or produced by Employee or assigned to
Employee by a third party prior to commencement of this Agreement (as set forth in the Proprietary
Information and Inventions Agreement attached hereto as Exhibit B and executed by the parties as of
the date of this Agreement), Employee shall be granted warrants to purchase 25,000 shares of common
stock at an exercise price of $1.25 per share in accordance with the terms of that certain Warrant
Agreement attached hereto as Exhibit E and incorporated herein by this reference.
ii. The parties acknowledge and agree that in consideration of the quality of the materials
created or produced by Employee and Employee’s efforts in promoting the brand name of the Company
to date through his creative efforts, Employee shall be granted warrants to purchase an additional
50,000 shares of common stock at an exercise price of $1.25 per share in accordance with the terms
of that certain Warrant Agreement attached hereto as Exhibit F and incorporated herein by this
reference
d. Consideration for Prior Services. Employee agrees that all consulting services
rendered by Employee for the benefit of Company from and after March 25, 2004 through the date of
this Agreement have been fully paid to Employee or to any affiliate or agent of Employee, including
but not limited to Employee’s company, iCetera, LLC (“Affiliates”), and
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no consideration is due by Employer to Employee or any of Employee’s Affiliates for such
consulting services, including any activities provided by Employee consisting of creating motion
picture or still photography in any print or media format, as well as videotape, video disc,
digital and any other mechanical or electronic means of recording and reproducing images created or
produced on behalf of the Company and for its benefit.
9. Fringe Benefits. Employee shall receive all such benefits for which Employee is
eligible and which are available to all similarly situated employees as set forth in the Employer’s
Employee Handbook and in accordance with all other policies and procedures of Employer regarding
benefits of employment, as modified from time to time.
10. Paid Time Off. Employee shall be entitled to Paid Time Off (PTO) for which
Employee becomes eligible and which is available to all similarly situated employees as set forth
in the Employer’s Employee Handbook and in accordance with all other policies and procedures of
Employer regarding PTO and leave benefits, as modified from time to time. The parties agree that
Employee is hereby granted one hundred and seventy-three (173) hours of PTO; and shall be subject
on and after the date of this Agreement to all accrual requirements and limitations applicable to
employees whose date of hire is July 1, 2005.
11. Expenses. Employer shall reimburse Employee for reasonable and necessary expenses
incurred by Employee in the ordinary course of business for Employer, in accordance with Employer’s
policies and procedures.
12. Termination. This Agreement and Employee’s employment shall terminate upon the
happening of any one of the following events:
a. Employee unilaterally elects to terminate employment with Employer by prior written notice;
b. Circumstances occur that Employer determines in good faith make it impossible or
impractical for Employer to continue its business, or as a result of a slow-down in business, or
similar circumstance, Employer determines in good faith that Employee’s services are no longer
needed;
c. The death of Employee;
d. The disability of Employee (permanent disability shall exist if, in the sole opinion of
Employer, as determined in good faith, Employee suffers from a condition of mind or body that
prevents him, after reasonable accommodation by Employer, from further performance of the essential
functions of his position for a period of ninety (90) consecutive days in any twelve month period);
e. Employee ceases to hold a valid and effective immigration visa, work permit, license(s) or
approvals required by any rule, regulation, law or the bylaws of Employer, that is/are a
prerequisite to Employee holding his position with Employer;
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f. Employer provides Employee written notice that Employee’s employment is being discharged
for “good cause.” Employer has “good cause” to discharge Employee, for the reasons listed below:
i. Employee fails or refuses to adequately and diligently perform the duties and
responsibilities of his position with Employer and fails or refuses to cure such performance
failure to Employer’s satisfaction within thirty (30) days after written notice thereof is given to
Employee by Employer; or
ii. Employee fails or refuses to comply with the policies, standards and/or rules of Employer,
which Employer may from time to time establish or modify; or
iii. Employee fails or refuses to act in accordance with any lawful direction or order of
Employer; or
iv. It is determined that Employee has conducted himself in an unprofessional, unethical,
illegal or fraudulent manner, or has acted or failed to act in a manner detrimental to the
reputation, character or standing of Employer; including, but not limited to, theft or
misappropriation of Employer’s assets, engaging in discriminatory or harassing conduct, the filing
of false expense or related reports, or being convicted of (or pleading nolo contender to) a felony
or a misdemeanor involving moral turpitude; or
v. Employee violates any term or condition of this Agreement;
g. Employer completes a “Change of Control,” as defined below, and after which Employee’s
employment is terminated for any reason other than as set forth in Paragraphs 12(a), 12(c), l2(d),
12(e), or 12(t).
“Change of Control” as used in this Agreement shall mean (a) the merger,
acquisition or consolidation between Employer and any other entity, regardless of
whether Employer is the surviving or disappearing entity; or (b) a sale or exchange
of all or substantially all of the assets of Employer; unless the shareholders of
record of Employer immediately prior to such acquisition or sale will, immediately
after such acquisition or sale (by virtue of securities issued as consideration for
such acquisition or sale or otherwise), hold at least fifty percent (50%) of the
voting securities of the surviving or acquiring entity;
h. Employer gives Employee sixty (60) days prior written notice of its intent to terminate
this Agreement and Employee’s employment. At Employer’s option, Employer may terminate this
Agreement immediately upon the giving of written notice and provide Employee with 60-days pay in
lieu of notice;
13. Obligations of Employee on Termination. Employee acknowledges and agrees that all
property, including keys, credit cards, books, manuals, records, notes, contracts, customer lists,
Proprietary Information or Company Materials (as defined in the Artes Medical USA, Inc. Proprietary
Information and Inventions Agreement attached hereto as Exhibit B), documents (in electronic, hard
copy or other media), copies of any of the foregoing, and any equipment furnished to Employee by
Employer, belong to Employer and shall be promptly returned to
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Employer upon termination of employment. Further, upon termination of employment, Employee
shall be deemed to have resigned from all offices and directorships then held with Employer.
14. Obligations of Employer on Termination.
a. Upon termination of this Agreement and Employee’s employment for any reason set forth in
Paragraphs 12(a), 12(c), 12(d), 12(e), or 12(f), Employer’s obligations to Employee under this
Agreement shall be limited to: (a) the prorated payment of Employee’s salary through the date of
termination to the extent not paid by then; (b) the payment of earned and accrued bonus and
incentive plan payments due Employee, if any, under any bonus or incentive plan in which Employee
participated prior to termination; (c) the payment of any unused accrued PTO through the date of
termination; and (d) the payment of any reimbursable business expenses that were documented by
Employee prior to the termination of this Agreement in accordance with Employer’s expense
reimbursement policies, and that were not reimbursed by Employer at the time of the termination of
this Agreement. As of the date of termination of this Agreement, Employer’s obligations to
Employee shall terminate and Employer shall have no further obligation to pay Employee, or
Employee’s estate, beneficiaries, or legal representatives any compensation or any other amounts
except as otherwise provided by law.
b. Upon termination of this Agreement and Employee’s employment for any reason set forth in
Paragraphs 12(b), 12(g), or 12(h), Employer’s obligations to Employee under this Agreement shall be
limited to: (a) the prorated payment of Employee’s salary through the date of termination to the
extent not paid by then; (b) the payment of earned and accrued bonus and incentive plan payments
due Employee, if any, under any bonus or incentive plan in which Employee participated prior to
termination; (c) the payment of any unused accrued PTO through the date of termination; (d) the
payment of any reimbursable business expenses that were documented by Employee prior to the
termination of this Agreement in accordance with Employer’s expense reimbursement policies, and
that were not reimbursed by Employer at the time of the termination of this Agreement; and (e) upon
Employee’s execution and delivery to Employer of a full general release of claims against the
Company, the payment of a lump sum equal to three (3) months base salary at Employee’s then current
rate of compensation, less applicable withholdings and authorized deductions.
15. Arbitration/Sole Remedy for Breach of Agreement. In the event of any dispute
between Employer and Employee concerning any aspect of the employment relationship, including any
disputes relating to termination, all such disputes shall be resolved by binding arbitration before
a single neutral arbitrator pursuant to the following terms. This provision shall supersede any
prior arbitration agreement, policy or understanding between the parties. The parties intend to
revoke any prior arbitration agreement.
a. Claims Covered by the Agreement. Employee and Employer mutually consent to the
resolution by final and binding arbitration of any and all disputes, claims, demands, causes of
action, controversies — past, present or future — that either party could otherwise pursue in court
that arise from or relate in any way to Employee’s hiring, employment, or termination of Employee’s
employment with Employer, or any contracts or agreements between the parties. This includes any
claim by Employer against Employee and any claim by
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Employee against Employer, its directors, officers, employees, agents, partners, or pension or
benefit plans administrators or fiduciaries, or franchisors, or any parent, subsidiary or
affiliated company or corporation based on any state or federal law (including but not limited to
claims for employment discrimination, retaliation or harassment, or based on the California Labor
Code), as well as any common law claim (including claims for breach of contract, wrongful
discharge, defamation, misrepresentation, fraud, and infliction of emotional distress). This
Agreement does not affect Employee’s right to seek administrative relief from the United States
Equal Employment Opportunity Commission or the California Department of Fair Employment and
Housing. Further, this Agreement does not cover claims Employee may have for workers’
compensation, unemployment compensation benefits, state disability benefits, or claims under the
National Labor Relations Act. Nothing in this Agreement shall prohibit or limit the parties from
seeking provisional relief pursuant to California Code of Civil Procedure 1281.8 or any similar
statute of an applicable jurisdiction.
b. Required Notice of Claims and Statute of Limitations. Arbitration may be initiated
by Employee by serving or mailing a written notice to the Chief Executive Officer of Employer.
Arbitration may be initiated by Employer by serving or mailing a written notice to Employee at his
last known address. The notice shall identify and describe the nature of all claims asserted and
the facts upon which such claims are based. The written notice shall be served or mailed within
the applicable statute of limitations period set forth by federal or state law.
c. Arbitration Procedures.
i. After demand for arbitration has been made by serving written notice under the terms of
Section 14(b) of this Agreement, the party demanding arbitration shall file a demand for
arbitration with the American Arbitration Association (“AAA”) in San Diego, California. The
arbitrator shall be selected from the AAA panel and the arbitration shall be conducted pursuant to
AAA policies and procedures. All rules governing the arbitration shall be the rules as set forth
by AAA.
ii. The arbitrator shall apply the substantive law of the state of California, or federal law,
or both, as applicable to the claim(s) asserted.
iii. Either party may file a motion for summary judgment with the arbitrator under the Federal
Rules of Civil Procedure. The arbitrator is entitled to resolve some or all of parties’ claims
through such a motion.
d. Arbitration Decision. The arbitrator’s decision will be final and binding. A
party’s right to appeal the decision is limited to grounds provided under applicable federal or
state law.
e. Arbitration Fees and Costs. Employer shall be responsible for the arbitrator’s
fees and costs. Except as provided by statute, each party shall be responsible for its own
attorneys’ fees.
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f. Waiver of Jury Trial/Exclusive Remedy. Employee and Employer waive any
constitutional right to have any dispute between them decided by a court of law and/or by a jury in
a court proceeding and/or by any administrative agency.
16. Successors and Assigns. The lights and obligations of Employer under this
Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of
Employer. Employee shall not be entitled to assign any of Employee’s rights or obligations under
this Agreement.
17. Governing Law. This Agreement shall be interpreted, construed, governed and
enforced in accordance to the laws of the State of California.
18. Amendments. No amendment or modification of the terms or conditions of this
Agreement shall be valid unless in writing and signed by the Parties hereto.
19. Separate Terms/Severability. Each term, condition, covenant or provision of this
Agreement shall be viewed as separate and distinct, and in the event that any such term, covenant
or provision shall be held by a court or arbitrator of competent jurisdiction to be invalid,
unenforceable or void, the remaining provisions shall continue in full force and effect.
20. Waiver. A waiver by either party of a breach of provision or provisions of this
Agreement shall not constitute a general waiver, or prejudice the other party’s right otherwise to
demand strict compliance with that provision or any other provisions in this Agreement.
21. Notices. Any notice required or permitted to be given under this Agreement shall
be sufficient, if in writing, and personally delivered or sent by mail to Employee’s last known
residence address, or in the case of Employer, its principal place of business.
22. Legal Counsel. Employee acknowledges that Employee has sought the advice of
independent counsel of Employee’s own choosing, or has declined to do so, with respect to this
Agreement. Employee further acknowledges that Employee fully understands Employee’s legal rights
and obligations under this Agreement, and that Employee has read and understands this Agreement.
23. Entire Agreement. Employee acknowledges receipt of this Agreement and agrees that
this Agreement (including all exhibits attached hereto) represents the entire Agreement with
Employer concerning the subject matter hereof, and supersedes any previous oral or written
communications, representations, understandings or agreements with Employer or any agent thereof.
Employee understands that no representative of Employer has been authorized to enter into any
agreement or commitment with Employee which is inconsistent in any way with the terms of this
Agreement.
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IN WITNESS HEREOF, the parties have executed this Agreement as of the date set forth above.
| /s/ Xxxxxx Xxxxxxxxx | ||||
| Xxxxxx X. Xxxxxxxxx | ||||
| Artes Medical USA, Inc. | ||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||
| Xxxxxx Xxxxxxxx | ||||
| Chief Executive Officer | ||||
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Exhibit A
(Duties of Chief Creative Officer)
Employee’s duties shall include, but are not limited to, the following:
| 1. | Develop, define and manage the global creative direction of Artes Medical (“the Company”) and any affiliates; | ||
| 2. | Define the corporate identity and guidelines for the Company and its brand; |
||
| 3. | Execute the visual language of the Artes brand throughout the Company and product line; | ||
| 4. | Develop, define and direct the execution of all visual branding on all Company collateral materials; | ||
| 5. | Identify, research, develop and propose new and improved ways to communicate the branding mission of the Company and increase its brand value; | ||
| 6. | Oversee and coordinate that the Company’s corporate branding mission will be upheld in the activities of the Company; | ||
| 7. | Interact and cooperate closely with the marketing department of the Company, exchanging ideas on a regular basis and collaborate to ensure brand consistency and integration with the Company’s strategic plans; | ||
| 8. | Work closely with marketing strategic objectives which are aimed at improving the Company’s ability to assist and respond to global market requirements. | ||
| 9. | Activities consisting of creating motion picture or still photography in any print or media format, as well as videotape, video disc, digital and any other mechanical or electronic means of recording and reproducing images created or produced on behalf of the Company and for its exclusive, proprietary and perpetual benefit. This includes images or likenesses of any person made for or on behalf of the Company related in any way to the business of the Company. |
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Exhibit B
(Proprietary Information and Inventions Agreement)
(Proprietary Information and Inventions Agreement)
Intentionally omitted.
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Exhibit C
(Warrant to Purchase Common Stock Agreement)
(Warrant to Purchase Common Stock Agreement)
Intentionally omitted.
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Exhibit D
(Stock Option Agreement)
(Stock Option Agreement)
Intentionally omitted.
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Exhibit E
(Warrant to Purchase Common Stock Agreement)
(Warrant to Purchase Common Stock Agreement)
Intentionally omitted.
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