Exhibit 10.18

 

KYTHERA BIOPHARMACEUTICALS, INC.

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is entered into as of March 23, 2013
(the “Effective Date”) by and between Kythera Biopharmaceuticals, Inc. (the
“Company”) and Frederick Beddingfield, III, MD, PhD (“Employee”).

 

1.                                                                                     
Duties and Scope of Employment.

 

(a)                                 Positions and Duties.  As of the Effective
Date, Employee will serve as Chief Medical Officer.  Employee will render such
business and professional services in the performance of his or her duties,
consistent with Employee’s position within the Company, as will reasonably be
assigned to him or her by the Company’s Chief Executive Officer (“CEO”).  The
period of Employee’s employment under this Agreement is referred to herein as
the “Employment Term.”

 

(b)                                 Obligations.  During the Employment Term,
Employee will perform his duties faithfully and to the best of his ability and
will, other than the private patient practice noted below,  devote his full
business efforts and time to the Company.  For the duration of the Employment
Term, Employee agrees not to actively engage in any other employment, occupation
or consulting activity for any direct or indirect remuneration without the prior
approval of the Company’s CEO.  Specifically, we acknowledge that you intend to
continue to see private Dermatology and Aesthetic patients for between one half
and one day a week.  Notwithstanding the above, you acknowledge that this is a
full-time, salary-based role that will often demand work outside of normal
office hours.  You understand that the Company’s primary place of business is
the Company Headquarters and agree to target working from the Company
Headquarters, outside of company related travel, a minimum of four days per
week.  As discussed, service as a corporate Board member may be discussed and
approved per the above, assuming no conflicts of interest and limited overall
time requirements.

 

2.                                      At-Will Employment.  The parties agree
that Employee’s employment with the Company will be “at-will” employment and may
be terminated at any time with or without cause or notice.  Employee understands
and agrees that neither his or her job performance nor promotions,
commendations, incentive compensation or the like from the Company give rise to
or in any way serve as the basis for modification, amendment, or extension, by
implication or otherwise, of his or her employment with the Company.

 

3.                                                                                     
Compensation.

 

(a)                                 Base Salary.  The Company will initially pay
Employee as compensation for his services a salary at the annualized rate of
$385,000,which may be increased from time to time (as the “Base Salary”).  The
Base Salary will be paid in accordance with the Company’s normal payroll
practices and be subject to the usual, required withholdings and authorized
deductions.

 

(b)                                 Annual Bonus.  Employee will also be
eligible to be paid an annual cash incentive.  This annual cash incentive will
initially be targeted at 35 % of actual earned Base Salary (the “Annual Bonus”),
but may be adjusted from time to time.  The formula for calculating

 

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achievement against this target bonus will be tied to the achievement of both
annual corporate and personal goals.  Any cash incentive earned pursuant to this
paragraph will be paid to Employee no later than March 15 of the year following
the year in which such bonus was earned.

 

(c)                                  Sign-On Bonus.  Employee will receive a
sign-on bonus of $50,000 (the “Sign-On Bonus”). The Sign-On Bonus will be paid
in accordance with the Company’s normal payroll practices for the first payroll
period following the Effective Date and be subject to the usual, required
withholdings and authorized deductions. Should the Employee voluntarily
terminate his employment with the Company prior to the one-year anniversary of
the Effective Date, the Sign-On Bonus will be subject to repayment by the
Employee.

 

(d)                                 Retention Bonus.  Employee will receive a
retention bonus of $50,000 (the “Retention Bonus”). The Retention Bonus will be
paid in accordance with the Company’s normal payroll practices for the first
payroll period following the one-year anniversary of the Effective Date and be
subject to the usual, required withholdings and authorized deductions. Should
the Employee voluntarily terminate his employment with the Company prior to the
second anniversary of the Effective Date, the Retention Bonus will be subject to
repayment by the Employee.

 

(e)                                  Equity Awards.  Subject to approval by the
Board of Directors, the Company shall grant Employee equity and stock options as
follows:

 

(i)             Restricted Stock.  Employee shall be granted 50,000 restricted
shares of Company Common Stock to vest as follows: 12,500 shares will vest on
the one-year anniversary of the Effective Date; an additional 12,500 shares will
vest on the two-year anniversary of the Effective Date; and 100% of the
originally granted 50,000 shares (or the remaining unvested portion) will vest
at the earlier of a) US Approval of ATX-101, or b) 3 years from the date of
grant.

 

(ii)          Stock Options. The Company shall grant Employee an option to
purchase 1

 

(iii)       125,000 shares of Company Common Stock (the “Options”).  The Options
shall be exercisable at the fair market value of the underlying Common Stock on
the date of grant.

 

(1)                                 75,000 of the Options will vest as follows:
25% (18,750) will vest one year after the Effective Date; thereafter, 1/48th
(approximately 1,562) will vest on the same day of each calendar month for the
36 months following the one-year anniversary of the Effective Date, so that
75,000 Options will be fully vested four (4) years from the Effective Date,
subject to Employee’s continued service with the Company on each vesting date;

 

(2)                                 The remaining 50,000 Options will vest
accordingly to corporate milestones approved by our Board of Directors, as
follows: 20% (i.e. 10,000) will vest at ATX-101 US Phase III Datalock, an
additional 20% (i.e. 10,000) will vest at NDA Acceptance for ATX-101 and the
remaining 60% (i.e. 30,000) will vest at US Approval of ATX-101, or in the event
the foregoing milestones are not achieved, 100% (i.e. 50,000 options) will vest
at the earlier of 4 years from the date of grant or at the US approval of
ATX-101.

 

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4.                                      Employee Benefits.  During the
Employment Term, Employee will be entitled to participate in the employee
benefit plans currently and hereafter maintained by the Company of general
applicability to other employees of the Company, including, without limitation,
the Company’s group medical, dental, vision, disability, life insurance, and
flexible-spending account plans.  The Company reserves the right to cancel or
change the benefit plans and programs it offers to its employees at any time.

 

5.                                      Vacation.  Employee will be entitled to
paid vacation in accordance with the Company’s vacation policy, with the timing
and duration of specific vacations mutually and reasonably agreed to by the
parties hereto.

 

6.                                      Expenses.  The Company will reimburse
Employee for reasonable travel, entertainment or other expenses incurred by
Employee in the furtherance of or in connection with the performance of
Employee’s duties hereunder, in accordance with the Company’s expense
reimbursement policy as in effect from time to time.

 

7.                                      Change of Control.    Notwithstanding
anything to the contrary contained herein, in the event of a Change of Control,
and subject to Employee’s continued status as an employee with the Company
through the effective date of such Change of Control, 50% of Employee’s
outstanding, unvested equity awards granted in accordance with sections
3(e)(i) and (ii) above will vest and become exercisable on the effective date of
such Change of Control.  The remaining portion of Employee’s unvested equity
awards that were granted in accordance with sections 3(e)(i) and (ii) will
continue to vest and become exercisable in accordance with their original
vesting schedule; provided, however, that any unvested portion of these
outstanding equity awards will vest and become exercisable on the first to occur
of (i) Employee’s termination by the Company other than for Cause;
(ii) Employee’s termination for Good Reason; or (iii) if Employee remains an
employee through such date, the date that is twelve (12) months following the
effective date of the Change of Control.

 

8.                                      Severance.

 

(a)                                 Other than During a Change of Control
Period.  If, at any time other than during a Change of Control Period,
Employee’s employment with the Company terminates due to an involuntary
termination by the Company other than for Cause, death, or Disability or a
voluntary termination of Employee’s employment for Good Reason (as defined
below), then, subject to Employee delivering a Release (the “Release”) to the
Company in a form prescribed by the Company in substantially the form attached
hereto and marked as Exhibit A that becomes effective and irrevocable no later
than sixty (60) days following the termination date (such deadline, the “Release
Deadline”), and subject to Section 8(d), (i) Employee will receive a lump sum
cash payment equal to six (6) months of Base Salary, less applicable
withholding, in accordance with the Company’s standard payroll practices, with
such lump sum payment to be paid no later than ten (10) business days following
the date the Release becomes effective and irrevocable, (ii) if Employee timely
elects continuation coverage pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”) for Employee and Employee’s
dependents, within the time period prescribed pursuant to COBRA, the Company
will reimburse Employee for the COBRA premiums for such coverage for Employee
and his or her covered dependents for the lesser of (A) six (6) months from the
date of Employee’s termination of employment, or (B) the date upon which
Employee and his or her covered dependents are covered by similar plans of
Employee’s new employer; and (iii) if Employee

 

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has elected coverage for Employee or Employee and Employee’s covered dependents
under the Company’s high deductible health plan as of immediately prior to
Employee’s termination of employment, Employee shall be paid an amount equal to
fifty percent (50%) of the full amount of healthcare savings account
contributions the Company intended to make in the year in which Employee
terminated employment, without regard to any amount the Company has already made
to Employee’s healthcare savings account for such year, such payment to be made
in a cash lump sum, less applicable withholding, no later than ten (10) business
days after the Release Deadline (COBRA reimbursements will be made by the
Company to Employee consistent with the Company’s normal expense reimbursement
policy).

 

(b)                                 During a Change of Control Period.  If,
during a Change of Control Period, Employee’s employment with the Company
terminates due to an involuntary termination by the Company other than for
Cause, death, or Disability, or due to Employee’s voluntary termination for Good
Reason, then, subject to Employee delivering a Release to the Company in a form
prescribed by the Company in substantially the form attached hereto and marked
as Exhibit A that becomes effective and irrevocable no later than the Release
Deadline, and subject to Section 8(d), (i) Employee will receive a lump sum cash
payment equal to twelve (12) months of Base Salary, less applicable withholding,
in accordance with the Company’s standard payroll practices, with such lump sum
payment to be paid no later than ten (10) business days following the date the
Release becomes effective and irrevocable, (ii) the vesting and, if applicable,
exercisability of each outstanding option, restricted stock unit, restricted
stock award and other equity award held by Employee on the date of such
termination shall fully accelerate as of the date of such termination and
(iii) if Employee timely elects continuation coverage pursuant to COBRA for
Employee and Employee’s dependents, within the time period prescribed pursuant
to COBRA, the Company will reimburse Employee for the COBRA premiums for such
coverage for Employee and his or her covered dependents for the lesser of
(A) twelve (12) months from the date of Employee’s termination of employment, or
(B) the date upon which Employee and his or her covered dependents are covered
by similar plans of Employee’s new employer and (iv) if Employee has elected
coverage for Employee or Employee and Employee’s covered dependents under the
Company’s high deductible health plan as of immediately prior to Employee’s
termination of employment, Employee shall be paid an amount equal to the full
amount of healthcare savings account contributions the Company intended to make
in the year in which Employee terminated employment, without regard to any
amount the Company has already made to Employee’s healthcare savings account for
such year, such payment to be made in a cash lump sum, less applicable
withholding, no later than ten (10) business days after the Release Deadline. 
COBRA reimbursements will be made by the Company to Employee consistent with the
Company’s normal expense reimbursement policy.

 

(c)                                  Timely Release Required.  In no event will
severance payments or benefits (including, without limitation, any accelerated
vesting in the event of a Change of Control) be paid or provided until the
Release actually becomes effective and irrevocable.  If the Release does not
become effective by the Release Deadline, Employee will forfeit any rights to
severance or benefits under this Agreement.  It is expected that all severance
under this Agreement will be exempt from Section 409A (as defined below) as a
payment that satisfies the requirements of the “short-term deferral” rule set
forth in Section 1.409A-1(b)(4) of the Treasury Regulations.  However, if this
is not the case, then any severance payments or benefits under this Agreement
that would be considered Deferred Compensation Separation Benefits (as defined
herein) will be paid on, or, in the case of installments, will not commence
until, the sixtieth (60th) day following Employee’s separation from service, or,
if

 

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later, such time as required by the provisions of Section 409A (see
Section 8(b) below).  Subject to Section 8(b), any installment payments that
would have been made to Employee during the sixty (60) day period immediately
following Employee’s separation from service but for the preceding sentence will
be paid to Employee on the sixtieth (60th) day following Employee’s separation
from service and the remaining payments will be made as provided in this
Agreement.  If Employee should die before all of the severance amounts to which
Employee is entitled have been paid, such unpaid amounts will be paid in a
lump-sum payment promptly following such event to Employee’s designated
beneficiary, if living, or otherwise to the personal representative of
Employee’s estate.

 

(d)                                 Section 409A.

 

(i)                                     Notwithstanding anything to the contrary
in this Agreement, no severance payable to Employee, if any, pursuant to this
Agreement that, when considered together with any other severance payments or
separation benefits, are considered deferred compensation under Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”) and the final
regulations and any guidance promulgated thereunder (“Section 409A”) (together,
the “Deferred Compensation Separation Benefits”) will be payable until Employee
has a “separation from service” within the meaning of Section 409A.

 

(ii)                                  Notwithstanding anything to the contrary
in this Agreement, if Employee is a “specified employee” within the meaning of
Section 409A at the time of Employee’s termination (other than due to Employee’s
death), then the Deferred Compensation Separation Benefits that are payable
within the first six (6) months following Employee’s separation from service
will become payable on the first payroll date that occurs on or after the date
six (6) months and one (1) day following the date of Employee’s separation from
service.  All subsequent Deferred Compensation Separation Benefits, if any, will
be payable in accordance with the payment schedule applicable to each payment or
benefit.  Notwithstanding anything herein to the contrary, if Employee dies
following Employee’s separation from service but prior to the six (6) month
anniversary of the separation, then any payments delayed in accordance with this
paragraph will be payable in a lump sum as soon as administratively practicable
after the date of Employee’s death (and in all cases within ninety (90) days of
Employee’s death) and all other Deferred Compensation Separation Benefits will
be payable in accordance with the payment schedule applicable to each payment or
benefit.  Each payment and benefit payable under this Agreement is intended to
constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the
Treasury Regulations.

 

(iii)                               Any amount paid under this Agreement that
satisfies the requirements of the “short-term deferral” rule set forth in
Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred
Compensation Separation Benefits for purposes of clause (i) above.

 

(iv)                              Any amount paid under this Agreement that
qualifies as a payment made as a result of an involuntary separation from
service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that
do not exceed the Section 409A Limit (as defined below) will not constitute
Deferred Compensation Separation Benefits for purposes of clause (i) above.  For
purposes of this Agreement, “Section 409A Limit” means 2 times the lesser of:
(i) Employee’s annualized compensation based upon the annual rate of pay paid to
Employee during Employee’s taxable year preceding Employee’s taxable year of
Employee’s separation from service as determined under Treasury Regulation
Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance

 

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issued with respect thereto, or (ii) the maximum amount that may be taken into
account under a qualified plan pursuant to Section 401(a)(17) of the Code for
the year in which Employee’s separation from service occurred.

 

 

(v)                                 The foregoing provisions are intended to
comply with the requirements of Section 409A so that none of the severance
payments and benefits to be provided hereunder will be subject to the additional
tax imposed under Section 409A, and any ambiguities herein will be interpreted
to so comply.  The Company and Employee agree to work together in good faith to
consider amendments to this Agreement and to take such reasonable actions which
are necessary, appropriate or desirable to avoid imposition of any additional
tax or income recognition prior to actual payment to Employee under
Section 409A.

 

9.                                      Section 280G.

 

(a)                                 In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to Employee
(i) constitute “parachute payments” within the meaning of Section 280G of the
Code, and (ii) would be subject to the excise tax imposed by Section 4999 of the
Code (the “Excise Tax”), then Employee’s benefits under this Agreement will be
either

 

(1)                                 delivered in full, or

 

(2)                                 delivered as to such lesser extent which
would result in no portion of such benefits being subject to the Excise Tax,

 

whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the Excise Tax, results in the receipt by
Employee on an after-tax basis, of the greatest amount of benefits,
notwithstanding that all or some portion of such benefits may be taxable under
Section 4999 of the Code.  Any reduction in payments and/or benefits required by
this Section 9 will occur in the following order: (1) reduction of cash
payments; (2) reduction of vesting acceleration of equity awards; and
(3) reduction of other benefits paid or provided to Employee.  In the event that
acceleration of vesting of equity awards is to be reduced, such acceleration of
vesting will be cancelled in the reverse order of the date of grant for
Employee’s equity awards.  If two or more equity awards are granted on the same
date, each award will be reduced on a pro-rata basis.  In no event will Employee
exercise any discretion with respect to the ordering of any reductions of
payments or benefits under this Section 9.

 

(b)                                 Unless the Company and Employee otherwise
agree in writing, any determination required under this Section 9 will be made
in writing by the Company’s independent public accountants or a national “Big
Four” accounting firm selected by the Company (the “Accountants”), whose
determination will be conclusive and binding upon Employee and the Company for
all purposes.  For purposes of making the calculations required by this
Section 9, the Accountants may make reasonable assumptions and approximations
concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Section 280G and 4999 of the
Code.  The Company and Employee will furnish to the Accountants such information
and documents as the Accountants may reasonably request in order to make a
determination under this Section 9.  The Company will bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section 9.

 

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10.                               Definitions.

 

(a)                                 “Cause” will mean: Employee’s failure to
perform his or her assigned duties or responsibilities as an employee (other
than a failure resulting from Employee’s Disability) after written notice
thereof from the Company describing Employee’s failure to perform such duties or
responsibilities; (ii) Employee engaging in any act of dishonesty, fraud or
misrepresentation with respect to the Company; (iii) Employee’s violation of any
federal or state law or regulation applicable to the business of the Company or
its affiliates; (iv) Employee’s breach of any confidentiality agreement or
invention assignment agreement between Employee and the Company (or any
affiliate of the Company); or (v) Employee being convicted of, or entering a
plea of nolo contendere to, any crime of moral turpitude.

 

(b)                                 “Change of Control” will mean the occurrence
of any of the following events:

 

(i)                                     Any “person” (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) becomes the “beneficial owner” (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Company representing
more than 50% of the total voting power represented by the Company’s then
outstanding voting securities; or

 

(ii)                                  The consummation of the sale or
disposition by the Company of all or substantially all of the Company’s assets;
or

 

(iii)                               The consummation of a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or its parent) at least 50% of the total voting power
represented by the voting securities of the Company or such surviving entity or
its parent outstanding immediately after such merger or consolidation.

 

Notwithstanding the foregoing provisions of this definition, a transaction will
not be deemed a Change of Control unless the transaction qualifies as a “change
in control event” within the meaning of Section 409A.

 

(c)                                  “Change of Control Period” will mean the
period of time commencing one month prior to a Change of Control and ending
eighteen (18) months after the Change of Control.

 

(d)                                 “Disability” will mean that Employee is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
(12) months.

 

(e)                                  “Good Reason” will mean Employee’s
termination of employment within ninety (90) days following the expiration of
any cure period (as discussed below) following the occurrence of one or more of
the following, without Employee’s express consent: (i) a material diminution of
Employee’s Base Salary or target annual performance bonus; (ii) a material
diminution in Employee’s authority, duties or responsibilities; or (iii) a
material negative change in geographic location at which Employee must perform
services (that is, Employee’s relocation to a location more

 

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than fifty (50) miles from Employee’s then present location).  Employee may not
resign for Good Reason without first providing the Company with written notice
within ninety (90) days of the first occurrence of the event that Employee
believes constitutes “Good Reason” specifically identifying the acts or
omissions constituting the grounds for Good Reason and a cure period of thirty
(30) days during which the event is not cured.

 

Notwithstanding the foregoing, and only for purposes of the acceleration of
Employee’s equity awards pursuant to Section 8(b)(ii) of this Agreement, “Good
Reason” will also include Employee’s termination of employment within ninety
(90) days following the expiration of any cure period (as discussed above)
following the occurrence of:  (i) Employee’s differential treatment from other
senior management within the Company in a manner that affects Employee
materially and adversely, excluding differences that arise by virtue of
differences in the office and job responsibilities of each member of senior
management, including, but not limited to, the following:

 

(1)                                 payment of or increase in Base Salary,

 

(2)                                                         aggregate amount,
percentage or timing of payment of Base Salary (including increases),

 

(3)                                                         amount, percentage,
timing, calculation or payout of any special or annual bonuses,

 

(4)                                 setting of any special or annual bonus
targets,

 

(5)                                                         grant of,
participation in, or costs charged for benefits of any kind, including, but not
limited to, medical, vision, dental, life insurance, disability insurance, sick
pay, and vacation leave,

 

(6)                                                         participation,
amount, vesting or conditions of equity grants (including stock options),

 

(7)                                                         participation,
amount, vesting, conditions or award calculations of long-term incentive
programs,

 

(8)                                                         participation,
amount, vesting, conditions or award calculations of stock unit awards,

 

(9)                                                         participation,
amount, vesting, conditions or award calculations of deferred compensation,

 

(10)                                                  participation, amount,
vesting, conditions or award calculations of retirement contributions, or

 

(11)                                                  participation, amount,
vesting, conditions or award calculations for supplemental retirement plans.

 

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11.                               Confidential Information.  Employee agrees to
continue to abide by the Company’s standard Confidential Information and
Invention Assignment Agreement (the “Confidential Information Agreement”) upon
commencing employment hereunder.

 

12.                               Assignment.  This Agreement will be binding
upon and inure to the benefit of (a) the heirs, executors and legal
representatives of Employee upon Employee’s death and (b) any successor of the
Company.  Any such successor of the Company will be deemed substituted for the
Company under the terms of this Agreement for all purposes.  For this purpose,
“successor” means any person, firm, corporation or other business entity which
at any time, whether by purchase, merger or otherwise, directly or indirectly
acquires all or substantially all of the assets or business of the Company. 
None of the rights of Employee to receive any form of compensation payable
pursuant to this Agreement may be assigned or transferred except by will or the
laws of descent and distribution.  Any other attempted assignment, transfer,
conveyance or other disposition of Employee’s right to compensation or other
benefits will be null and void.

 

13.                               Notices.  All notices, requests, demands and
other communications called for hereunder will be in writing and will be deemed
given (i) on the date of delivery if delivered personally; (ii) one (1) day
after being sent by a well established commercial overnight service; or
(iii) four (4) days after being mailed by registered or certified mail, return
receipt requested, prepaid and addressed to the parties or their successors at
the following addresses, or at such other addresses as the parties may later
designate in writing:

 

If to the Company:

 

Kythera Biopharmaceuticals, Inc.

27200 West Agoura Road, Suite 200

Calabasas, California 91301

Attn:  Corporate Secretary

 

If to Employee:

 

at the last residential address known by the Company.

 

14.                               Severability.  In the event that any provision
hereof becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement will continue in full force and
effect without said provision.

 

15.                               Arbitration.

 

(a)                                 General.  The Company and Employee each
agree that any and all disputes arising out of the terms of this Agreement,
Employee’s employment by the Company, Employee’s service as an officer or
director of the Company, or Employee’s compensation and benefits, their
interpretation and any of the matters herein released, will be subject to
binding arbitration under the arbitration rules set forth in California Code of
Civil Procedure Sections 1280 through 1294.2, including Section 1281.8 (the
“Act”), and pursuant to California law.  Disputes that the Company and Employee
agree to arbitrate, and thereby agree to waive any right to a trial by jury,
include any statutory claims under local, state, or federal law, including, but
not limited to, claims under Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act of 1990, the Age Discrimination

 

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in Employment Act of 1967, the Older Workers Benefit Protection Act, the
Sarbanes-Oxley Act, the Worker Adjustment and Retraining Notification Act, the
California Fair Employment and Housing Act, the Family and Medical Leave Act,
the California Family Rights Act, the California Labor Code, claims of
harassment, discrimination, and wrongful termination, and any statutory or
common law claims.  The Company and Employee further understand that this
agreement to arbitrate also applies to any disputes that the Company may have
with Employee.

 

 

(b)                                 Procedure.  The Company and Employee agree
that any arbitration will be administered by Judicial Arbitration & Mediation
Services, Inc. (“JAMS”), pursuant to its Employment Arbitration Rules &
Procedures (the “JAMS Rules”).  The Arbitrator will have the power to decide any
motions brought by any party to the arbitration, including motions for summary
judgment and/or adjudication, motions to dismiss and demurrers, and motions for
class certification, prior to any arbitration hearing.  The Arbitrator will have
the power to award any remedies available under applicable law, and the
Arbitrator will award attorneys’ fees and costs to the prevailing party, except
as prohibited by law.  The Company will pay for any administrative or hearing
fees charged by the Arbitrator or JAMS except that Employee will pay any filing
fees associated with any arbitration that Employee initiates, but only so much
of the filing fees as Employee would have instead paid had he or she filed a
complaint in a court of law.  The Arbitrator will administer and conduct any
arbitration in accordance with California law, including the California Code of
Civil Procedure, and the Arbitrator will apply substantive and procedural
California law to any dispute or claim, without reference to rules of conflict
of law.  To the extent that the JAMS Rules conflict with California law,
California law will take precedence.  The decision of the Arbitrator will be in
writing.  Any arbitration under this Agreement will be conducted in Los Angeles
County, California.

 

(c)                                  Remedy.  Except as provided by the Act and
this Agreement, arbitration will be the sole, exclusive, and final remedy for
any dispute between Employee and the Company.  Accordingly, except as provided
for by the Act and this Agreement, neither Employee nor the Company will be
permitted to pursue court action regarding claims that are subject to
arbitration.

 

(d)                                 Administrative Relief.  Employee understands
that this Agreement does not prohibit him or her from pursuing any
administrative claim with a local, state, or federal administrative body or
government agency that is authorized to enforce or administer laws related to
employment, including, but not limited to, the Department of Fair Employment and
Housing, the Equal Employment Opportunity Commission, the National Labor
Relations Board, or the Workers’ Compensation Board.  This Agreement does,
however, preclude Employee from pursuing court action regarding any such claim,
except as permitted by law.

 

(e)                                  Voluntary Nature of Agreement.  Each of the
Company and Employee acknowledges and agrees that such party is executing this
Agreement voluntarily and without any duress or undue influence by anyone. 
Employee further acknowledges and agrees that he or she has carefully read this
Agreement and has asked any questions needed for him or her to understand the
terms, consequences, and binding effect of this Agreement and fully understand
it, including that Employee is waiving his or her right to a jury trial. 
Finally, Employee agrees that he or she has been provided an opportunity to seek
the advice of an attorney of his or her choice before signing this Agreement.

 

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16.                               Integration.  This Agreement, together with
the Confidential Information Agreement represents the entire agreement and
understanding between the parties as to the subject matter herein and supersedes
all prior or contemporaneous agreements whether written or oral including,
without limitation, the Prior Agreement.  No waiver, alteration, or modification
of any of the provisions of this Agreement will be binding unless in writing and
signed by duly authorized representatives of the parties hereto.

 

17.                               Tax Withholding.  All payments made pursuant
to this Agreement will be subject to withholding of applicable taxes.

 

18.                               Governing Law.  This Agreement will be
governed by the laws of the State of California with the exception of its
conflict of laws provisions.

 

19.                               Acknowledgment.  Employee acknowledges that he
or she has had the opportunity to discuss this matter with and obtain advice
from his or her private attorney, has had sufficient time to, and has carefully
read and fully understands all the provisions of this Agreement, and is
knowingly and voluntarily entering into this Agreement.

 

20.                               Miscellaneous Provisions.

 

(a)                                 Amendment.  No provision of this Agreement
will be modified, waived or discharged unless the modification, waiver or
discharge is agreed to in writing and signed by Employee and by an authorized
officer of the Company (other than Employee) that is expressly designated as an
amendment to this Agreement.

 

(b)                                 Waiver.  No waiver by either party of any
breach of, or of compliance with, any condition or provision of this Agreement
by the other party will be considered a waiver of any other condition or
provision or of the same condition or provision at another time.

 

(c)                                  Headings.  All captions and section
headings used in this Agreement are for convenient reference only and do not
form a part of this Agreement.

 

(d)                                 Counterparts.  This Agreement may be
executed in counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by their duly authorized officers, as of the day and year first
above written.

 

 

KYTHERA BIOPHARMACEUTICALS, INC.

 

 

 

 

 

By:

/s/ Susan Lundeen for Keith Leonard

 

 

 

Title:

VP Human Resources

 

 

 

 

 

FREDERICK BEDDINGFIELD, III, MD, PHD:

 

 

 

 

 

Signature:

/s/ Frederick Beddingfield, III, M.D., Ph.D.

 

 

 

Print Name:

Frederick Beddingfield, III, M.D., Ph.D.

 

 

 

[Signature Page to Employment Agreement]

 

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Exhibit A

 

SEPARATION AGREEMENT AND RELEASE

 

This Separation Agreement and Release (“Agreement”) is made by and between
Frederick Beddingfield, III, MD, PhD (“Employee”) and Kythera
Biopharmaceuticals, Inc. (the “Company”) (collectively referred to as the
“Parties” or individually referred to as a “Party”).

 

RECITALS

 

WHEREAS, Employee was employed by the Company;

 

WHEREAS, Employee signed an Employment Agreement with the Company dated [insert
date], 2013 (the “Employment Agreement”);

 

WHEREAS, Employee signed a Confidential Information and Invention Assignment
Agreement with the Company on [insert date signed] (the “Confidentiality
Agreement”);

 

WHEREAS, the Company and Employee have entered into a Stock Option Agreement,
dated [DATE], granting Employee the option to purchase shares of the Company’s
common stock subject to the terms and conditions of the Company’s [YEAR] Stock
Option Plan and Stock Option Agreement (collectively the “Stock Agreements”);

 

[WHEREAS, the Company and Employee have entered into a Restricted Stock Purchase
Agreement dated [DATE] for Employee to purchase shares of the Company’s common
stock subject to the terms and conditions of the Restricted Stock Purchase
Agreement (the “Restricted Stock Purchase Agreement”), and further subject to
the Company’s option to repurchase the restricted stock, as set forth in the
Restricted Stock Purchase Agreement (the “Repurchase Option”);]

 

WHEREAS, the Employee’s employment with the Company terminated effective [DATE]
(the “Termination Date”); and

 

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WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints,
grievances, charges, actions, petitions, and demands that the Employee may have
against the Company and any of the Releasees as defined below, including, but
not limited to, any and all claims arising out of or in any way related to
Employee’s employment with or separation from the Company;

 

NOW, THEREFORE, in consideration of the mutual promises made herein, the Company
and Employee hereby agree as follows:

 

COVENANTS

 

1.             Consideration.  The Company agrees to provide Employee the
severance pursuant to Section 8 of the Employment Agreement.  For the avoidance
of doubt, such severance includes the payment to Employee of a lump sum
equivalent to [NUMBER] months of Employee’s base salary, for a total of [TYPE
AMOUNT] Dollars ($[AMOUNT]), less applicable withholdings.  This payment will be
made to Employee within ten (10) business days after the Effective Date of this
Agreement, but in all cases will be paid no later than March 15 of the year
following the Termination Date (assuming this Agreement becomes effective by
such date).  Company further agrees to reimburse Employee for COBRA coverage for
Employee and his or her covered dependents from the Effective Date of this
Agreement through [DATE], or until Employee and his or her covered dependents
are covered by similar plans of Employee’s new employer, whichever occurs first,
provided Employee timely elects COBRA coverage.  COBRA reimbursements shall be
made monthly by the Company to Employee consistent with the Company’s normal
expense reimbursement policy.  Pursuant to this Agreement, Employee is obligated
to notify the Company within five (5) business days of the date Employee and his
or her covered dependents are covered by similar plans of Employee’s new
employer.

 

2.             Payment of Salary and Receipt of All Benefits.  Employee
acknowledges and represents that, other than the consideration detailed in
Section 1 of this Agreement, the Company has paid or provided all salary, wages,
bonuses, accrued vacation/paid time off, leave, housing allowances, relocation
costs, interest, severance, outplacement costs, fees, reimbursable expenses,
commissions, stock, stock options, vesting (including any acceleration of
vesting pursuant to the Employment Agreement), and any and all other benefits
and compensation due to Employee.

 

3.             Stock.  The Parties agree that for purposes of determining the
number of shares of the Company’s common stock that Employee is entitled to
purchase from the Company, pursuant to the exercise of outstanding options, and
including any acceleration provisions contained in the Employment Agreement or
the Stock Agreements, Employee will be considered to have vested only up to the
time of the Termination Date.  Employee acknowledges and agrees that he or she
has vested in [NUMBER, INCLUDING ANY SHARES ACCELERATED PURSUANT TO THE
EMPLOYMENT AGREEMENT OR THE STOCK AGREEMENTS] shares as of the Termination

 

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Date.  The exercise of Employee’s vested options and shares shall continue to be
governed by the terms and conditions of the Company’s Stock Agreements.

 

[The Parties agree that for purposes of determining the number of shares of the
Company’s common stock that have been released from the Company’s Repurchase
Option under the Restricted Stock Purchase Agreement, and including any
acceleration provisions contained in the Employment Agreement or the Restricted
Stock Purchase Agreement, Employee shall be considered to have vested in, and
the Company’s Repurchase Option shall be considered to have been terminated as
to, [NUMBER, INCLUDING ANY SHARES ACCELERATED PURSUANT TO THE RSPA] of the total
shares purchased by Employee pursuant to the Restricted Stock Purchase
Agreement.  The Repurchase Option shall continue to exist with respect to the
remaining [NUMBER] of the total shares purchased by Employee pursuant to the
Restricted Stock Purchase Agreement.  All shares, including those no longer
subject to the Repurchase Option, shall continue to be governed by the terms and
conditions of the Restricted Stock Purchase Agreement.]

 

4.             Release of Claims; Non-Disparagement.  In exchange for the
consideration provided under this Agreement, Employee agrees to release any and
all claims arising against the Company or any of its directors, officers, or
current and former employees as of the date of the execution of this Agreement
including, but not limited to, the following: (a) claims arising under the
federal or any state constitution; (b) claims arising under the federal or any
state statute, including the Age Discrimination in Employment Act of 1967 and
the Older Workers Benefit Protection Act; (c) claims arising under federal,
state or local laws prohibiting discrimination in employment; (d) claims for
wrongful termination, breach of contract, breach of public policy, physical or
mental harm or distress; (e) any claim for attorneys’ fees and costs; (f) any
and all claims relating to, or arising from, Employee’s right to purchase, or
actual purchase of shares of stock of the Company; and (g) any and all other
claims arising from Employee’s employment relationship with the Company or the
termination of that relationship.  Employee agrees that he or she will not file
any legal action asserting any such claims.  Employee agrees that the release
set forth in this section shall be and remain in effect in all respects as a
complete general release as to the matters released.  This release does not
extend to any obligations incurred under this Agreement.  This release does not
release claims that cannot be released as a matter of law.  In addition,
Employee agrees not to defame, disparage, publish any defamatory materials or
make statements or disparaging remarks which could embarrass or cause harm to
the Company, its name and reputation, its business, or any of its owners,
directors, officers or employees.  The foregoing shall not be violated by
truthful statements given when compelled by law.

 

5.             Acknowledgment of Waiver of Claims under ADEA.  This section is
only applicable to employees over the age of 40 on the Termination Date. 
Employee acknowledges that he or she is waiving and releasing any rights he or
she may have under the Age Discrimination in Employment Act of 1967 (“ADEA”),
and that this waiver and release is knowing and voluntary.  Employee agrees that
this waiver and release does not apply to any rights or claims that may arise
under the ADEA after the Effective Date of this Agreement.  Employee
acknowledges that the consideration given for this waiver and release is in
addition to anything of value to which Employee was already entitled.  Employee
further acknowledges that he or she has been advised by this writing that:
(a) he or she

 

3

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should consult with an attorney prior to executing this Agreement; (b) he or she
has twenty-one (21) days within which to consider this Agreement; (c) he or she
has seven (7) days following his or her execution of this Agreement to revoke
this Agreement; (d) this Agreement shall not be effective until after the
revocation period has expired; and (e) nothing in this Agreement prevents or
precludes Employee from challenging or seeking a determination in good faith of
the validity of this waiver under the ADEA, nor does it impose any condition
precedent, penalties, or costs for doing so, unless specifically authorized by
federal law.  In the event Employee signs this Agreement and returns it to the
Company in less than the 21-day period identified above, Employee hereby
acknowledges that he or she has freely and voluntarily chosen to waive the time
period allotted for considering this Agreement.

 

6.             California Civil Code Section 1542.  Employee acknowledges that
he or she has been advised to consult with legal counsel and is familiar with
the provisions of California Civil Code Section 1542, a statute that otherwise
prohibits the release of unknown claims, which provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

Employee, being aware of said code section, agrees to expressly waive any rights
he or she may have thereunder, as well as under any other statute or common law
principles of similar effect.

 

7.             Trade Secrets and Confidential Information/Company Property. 
Employee reaffirms and agrees to observe and abide by the terms of the
Confidentiality Agreement, specifically including the provisions therein
regarding nondisclosure of the Company’s trade secrets and confidential and
proprietary information, and non-solicitation of Company employees.  Employee’s
signature below constitutes his or her certification under penalty of perjury
that he or she has returned all documents and other items provided to Employee
by the Company, developed or obtained by Employee in connection with his or her
employment with the Company, or otherwise belonging to the Company.

 

8.             Governing Law.  This Agreement shall be governed by the laws of
the State of California, without regard for choice-of-law provisions.

 

9.             Effective Date.  If the Employee is over the age of 40 on the
Termination Date, each Party has seven (7) days after that Party signs this
Agreement to revoke it.  This Agreement will become effective on the eighth
(8th) day after Employee signed this Agreement, so long as it has been signed by
the Parties and has not been revoked by either Party before that date (the
“Effective Date”).

 

4

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If the Employee is under the age of 40 on the Termination Date this Agreement
will become effective on the date it was signed by both Parties (the “Effective
Date”)

 

10.          Voluntary Execution of Agreement.  Employee understands and agrees
that he or she has executed this Agreement voluntarily, without any duress or
undue influence on the part or behalf of the Company or any third party, with
the full intent of releasing all of his or her claims against the Company.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.

 

 

 

 

Frederick Beddingfield, III, MD, PhD, an individual

 

 

 

 

 

 

Dated:

 

 

 

 

 

Frederick Beddingfield, III, MD, PhD

 

 

 

 

 

 

 

 

Kythera Biopharmaceuticals, Inc.

 

 

 

 

 

 

Dated:

 

 

By

 

 

 

 

[Click and Type Officer Name]

 

 

 

[Click and Type Title]

 

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