THIS EMPLOYMENT
AGREEMENT (“Agreement”) is entered into and becomes
effective as of July l, 2004 (the “Effective Date”) by
and between Artes Medical USA, Inc. (“Employer” or
“Company”) and William von Brendel
(“Employee”).
A. Employer
is a Delaware corporation and is qualified to do business in the
State of California with its principal offices located at 4660 La
Jolla Village Drive, Suite 825, San Diego, California
92122..
B. Both
Employer and Employee desire that Employee serve Employer in the
capacity of Vice President, Worldwide Sales & Marketing and
both parties desire to memorialize this relationship in
writing.
IN CONSIDERATION
of the promises and of the mutual covenants contained herein, and
for other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto do hereby agree as
follows:
1.
Employment . Employer hereby engages Employee to serve as
Vice President, Worldwide Sales & Marketing and Employee hereby
accepts such engagement upon the terms and conditions set forth
herein.
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. If
the Agreement is not terminated pursuant to Section 12, the
Agreement shall continue from year to year after July 1, 2008,
unless either party to the Agreement gives written notice to the
other of a desire to change, amend, modify or terminate the
Agreement, at least sixty (60) days prior to the expiration of
the then-current term of the Agreement.
3.
Duties . Employee is employed to serve as Vice President,
Worldwide Sales & Marketing and shall perform such duties as
are customarily performed by a Vice President, Worldwide Sales
& Marketing and such other duties as the Chief Executive
Officer assigns from to time. Such duties shall include those
duties identified on Exhibit A, which is incorporated herein
by this reference. Employee acknowledges that he will report to the
Chief Executive Officer who will be Employee’s supervisor. As
part of Employee’s duties, Employee acknowledges and
understands that: (a) Employee will devote his utmost
knowledge and best skill to the performance of his duties; (b)
Except as set forth otherwise below, Employee will devote his full
business time to the rendition of such services, subject to
absences for customary vacations and for temporary illness; and (c)
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, subject to Section 4 below.
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4.
Non-Competition . During the Employment Term and for three
(3) months after Employee’s employment terminates, if it
is terminated pursuant to Section 13(b) or 13(c) of this Agreement,
Employee shall not, without the prior written permission of
Employer, in the United States, its territories and possessions or
within an one hundred (100) mile radius of any Competitive
Business of Employer, its affiliates or subsidiaries located
outside the United States, directly or indirectly, (a) enter
into the employ of or 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 or
(e) solicit, interfere with, or endeavor to entice away from
Employer any of its customers or sources of supply. 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 involved
at any time during the twelve month period immediately prior to the
termination of the Employee’s employment.
5.
Confidentiality . 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. In connection herewith, Employee shall execute a
Confidentiality and Non-Disclosure Agreement attached hereto as
Exhibit B and incorporated herein by this
reference.
6.
Limitations on Authority . Employee understands that he may
not enter into any of the following types of agreements that exceed
Fifteen Thousand Dollars ($15,000.00) in amount, without the
express written approval of the Chief Executive Officer or his
designee:
a.
Pledge the credit of Employer or any of its other
employees;
b.
Bind the Employer under any contract, agreement, note, mortgage or
otherwise;
c.
Release or discharge any debt due to Employer unless the Employer
has received the full amount thereof, and,
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d.
Sell, mortgage, transfer or otherwise dispose of any assets of the
Employer.
7.
Personnel Policies and Procedures . The Employer shall have
the authority to establish from time to time personnel policies and
procedures to be followed by its employees. Employee agrees to
comply with the policies and procedures of the Employer. To the
extent any provisions in Employer’s personnel policies and
procedures differ with the terms of this Agreement, the terms of
this Agreement shall apply. Any employees subject to the direction
and supervision of Employee shall be hired or terminated only upon
consultation with Employee.
a.
Salary . Employee shall be paid an annual base salary, less
income taxes and other applicable withholdings, of One Hundred and
Fifty Thousand Dollars ($150,000.00). Employee shall be eligible
for a performance bonus up to fifty percent (50%) of annual salary
at the discretion of Employer’s Board of Directors for
meeting performance milestones prior to the marketing of
Employer’s product Artefill TM which are set forth on Exhibit A, attached
hereto. From and after the launch of the marketing of
Artefill TM
Employee shall be eligible for sales
commission payments in accordance with the policies and procedures
of Employer which shall be adopted by Employer’s Board of
Directors and set forth in writing, and thereafter made a part of
this Agreement,
b.
Stock Options . As consideration for services rendered and
in lieu of additional salary, Employee shall be 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 C and incorporated herein by this
reference.
9. Fringe
Benefits . The benefits set forth in this Section 9 shall
continue through the term of the Agreement and any renewals
thereof, subject to any modifications thereof which shall be set
forth in writing and signed by the parties; and such benefits shall
continue upon termination for other than good cause (as defined
below) until (a) the last day of a three (3) month period
after the effective date of termination or (b) the date upon
which Employee accepts employment from a third party after the
effective date of termination, which ever date first
occurs.
a.
Medical Dental and Long-Term Disability . Employee shall
receive medical insurance, dental insurance and long-term
disability benefits as currently provided to full-time employees of
Employer.
b.
Life Insurance . Employee shall receive whole life insurance
in amounts currently provided by Employer. Such life insurance
shall stay in effect during Employee’s employment with
Employer. If Employee desires that the Employer increase the amount
of life insurance currently provided to Employee, Employee shall
agree to pay the difference between the current premiums and those
required to be paid in order to increase the current coverage of
said policy. Such amounts shall be paid by Employee as a payroll
deduction.
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c.
Vehicle Allowance . Employee will be provided ($0) as a car
allowance per month during his employment with Employer to cover
costs of maintenance, gasoline, insurance and other expenses
related thereto. The parties acknowledge that Employee shall
perform duties for Employer out of his home office, until such time
that an office becomes available in Employer’s principal
offices,
d.
Retirement Benefits . Employee shall receive retirement
benefits (defined benefit contribution (401 K) and pension plan) as
currently available to full-time employees of Employer.
10.
Vacation and Leave . From and after such time that Employer
shall receive notice from the FDA that its product
Artecoll/Artefill is approved for commercial sale and distribution,
Employee shall be entitled to three (3) weeks of paid vacation
per year and personal leave time (including sick days) which must
be used during the year in which such time is accrued or such time
shall be forfeited. Notwithstanding the foregoing, Employee shall
be permitted to take one full week of vacation (7 days) prior
to Employer’s receipt of FDA approval, after forty-five
(45) days of continuous employment under this
Agreement.
11.
Expenses . Employer shall reimburse Employee for reasonable
and necessary expenses incurred by Employee in the
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