AMENDMENT #1 TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT 10.3
THIS AMENDMENT #1 TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Amendment #1”) is made
and entered into as of the 21st day of February, 2008 (the “Effective Date”) by and between XXXXX
X. XXXXXXXX, an individual (“Xxxxxxxx”) and I-FLOW CORPORATION, a Delaware corporation (the
“Company”).
Background
A. The Company and Xxxxxxxx previously entered into that certain Amended and Restated
Employment Agreement dated as of May 24, 2007 (the “Agreement”).
B. The Internal Revenue Service issued final regulations interpreting the rules and standards
under Section 409A of the Internal Revenue Code on April 10, 2007 (the “Final 409A Regulations”).
C. To comply with the Final 409A Regulations, the Company and Xxxxxxxx wish to amend and
modify certain provisions of the Agreement as provided herein, effective as of the Effective Date,
while leaving unchanged all other provisions of the Agreement.
Agreement
In consideration of the foregoing, and for other good and valuable consideration the receipt
of which is hereby acknowledged, Xxxxxxxx and the Company hereby agree as follows:
1. Termination Without Cause. The first paragraph of Section 3(b) and Section 3(b)(i)
and Section 3(b)(ii) of the Agreement are hereby amended and restated as follows:
(b) Termination Without Cause. In the event Xxxxxxxx’x employment as
provided herein is terminated by the Company without cause, or in the event Xxxxxxxx
resigns his employment because his job location is transferred (without his prior,
voluntary consent) to a site more than thirty (30) miles away from his current place
of employment, after having given the Company at least 30 days prior written notice
of his intent to resign and a reasonable opportunity to cure during such 30-day
notice period, the Company shall be obligated to pay and provide and Xxxxxxxx shall
be entitled to receive, as severance, the following payments (to be made in a lump
sum immediately upon termination of employment) and benefits:
(i) A cash payment equal to one (1) times the sum of (A) Xxxxxxxx’x annual
salary in effect at the time of termination, plus
(B) the average annual bonus earned by Xxxxxxxx in the previous three full
fiscal years;
(ii) Any bonus, or relevant pro rata portion thereof, earned by Xxxxxxxx for
the fiscal year in which the termination occurs, payable in lump sum within
30 days following the date of such termination of employment;
2. Disability. Section 3(c)(i) of the Agreement is hereby amended and restated as
follows:
(i) In the event that Xxxxxxxx is terminated as a result of a Disability (as defined
below), Xxxxxxxx shall receive amounts equal to 60% of his total compensation in
effect at the time of such termination, with such amount payable in equal
installments in accordance with the Company’s standard payroll practices, but no
less than monthly, until Xxxxxxxx achieves the age of 65, or until such time as
Xxxxxxxx shall have recovered from such disability and is able to secure full time
employment, whichever first occurs. To this end, the Company shall secure disability
coverage for Xxxxxxxx, which coverage shall be sufficient to pay Xxxxxxxx the
amounts set forth in the foregoing sentence. During any such period of disability,
options and restricted stock granted to Xxxxxxxx shall not lapse by virtue of such
disability.
3. Compliance with Section 409A. A new Section 17 of the Agreement is hereby added as
follows:
17. Compliance with Section 409A. Notwithstanding any provision of this
Agreement to the contrary, if, at the time of Xxxxxxxx’x termination of employment
with the Company, Xxxxxxxx is a “specified employee” as defined in Section 409A of
the Code, and one or more of the payments or benefits received or to be received by
Xxxxxxxx pursuant to this Agreement would become subject to the additional tax under
Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under
Section 409A of the Code (“Section 409A Taxes”) if provided at the time otherwise
required under this Agreement, no such payment or benefit will be provided under
this Agreement until the earliest of (a) the date which is six (6) months after
Xxxxxxxx’x “separation from service” or (b) the date of Xxxxxxxx’x death, or such
shorter period that, as determined by the Company, is sufficient to avoid the
imposition of Section 409A Taxes. The provisions of this Section 17 shall only
apply to the minimum extent required to avoid Xxxxxxxx’x incurrence of any
Section 409A Taxes. In addition, if any provision of this Agreement would cause
Xxxxxxxx to incur any penalty tax or interest under Section 409A of the Code or any
regulations or Treasury guidance promulgated thereunder, the Company may reform such
provision to maintain to the maximum extent practicable the original intent of the
applicable provision without violating the provisions of Section 409A of the Code.
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4. No Other Changes. Except as otherwise set forth herein, all terms and provisions
of the Agreement remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have entered into this Amendment #1 as of the Effective
Date.
| I-FLOW CORPORATION | XXXXX X. XXXXXXXX | |||||||||
By:
|
/s/ Xxxxxx X. Xxxxxxx | By: | /s/ Xxxxx X. Xxxxxxxx | |||||||
| Xxxxxx X. Xxxxxxx | Xxxxx X. Xxxxxxxx | |||||||||
| Chairman, President and | ||||||||||
| Chief Executive Officer | ||||||||||
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