AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit 10.4
AMENDMENT TO
This Amendment (this “Amendment”) is made effective as of June 15, 2007, and is
entered into by and between Replidyne, Inc. (the “Company”), and Xxxxxxx Xxxxxx
(“Employee”) and, together with the Company, the “Parties”).
RECITALS
WHEREAS, the Company and Employee are parties to that certain Employment Agreement
dated April 3, 2006 (the “Employment Agreement”);
WHEREAS, in order to reflect the final terms and conditions related to Employee’s change in
control benefits and certain other changes to the Employment Agreement, the Parties desire to amend
certain terms of the Employment Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
AGREEMENT
| 1. | All capitalized terms used but not defined herein shall have the meanings assigned to them in the Employment Agreement. |
| 2. | The introductory paragraph of the Employment Agreement is hereby amended and restated to reflect this Amendment, and will now read in its entirety as follows: |
This Employment Agreement (the “Agreement”) is made as of this 3rd day
of April, 2006, and amended effective June 15, 2007, by and between Replidyne,
Inc., (the “Company”), and Xxxxxxx Xxxxxx (“Employee”) (collectively, the
“Parties”).
Whereas, the Company wishes to continue to employ Employee and to
assure itself of the continued services of Employee on the terms set forth herein;
Whereas, Employee wishes to be so employed under the terms set forth
herein;
Whereas, Employee and the Company are parties to that certain Amended
and Restated Executive Employment Agreement dated February 20, 2002;
Whereas, the Parties desire to amend and restate the Executive
Employment Agreement to reflect certain additional and revised terms of Employee’s
employment; and
Whereas, the Parties intend that this Agreement, as amended, shall
supersede and replace any similar agreements that presently exist or may have
previously existed between the Parties regarding the terms of Employee’s employment
with the Company.
| 3. | Section 7 of the Employment Agreement is amended and restated to read in its entirety as follows: |
7. Bonus. Employee may be eligible to receive an annual
performance bonus of up to 40% of his Base Salary subject to employment taxes,
withholding and deductions (“Bonus”) based upon Employee’s achievements of certain
milestones and performance objectives established by the Company (“Variable
Incentive Bonus Plan”). Except as expressly provided otherwise herein, Employee
must remain employed with the Company throughout the applicable bonus year in order
to be eligible for any Bonus. The Board of Directors, in its sole discretion, shall
determine the extent to which Employee has achieved the performance targets upon
which Employee’s Bonus is based, and the amount of Bonus to be paid to Employee, if
any. Bonuses are not earned until they are approved in writing by the Board of
Directors.
| 4. | Section 10(f) of the Employment Agreement is amended and restated to read in its entirety as follows: |
(f) Definition of Good Reason. Employee may voluntarily terminate Employee’s
employment for “Good Reason” by notifying the Company in writing, within thirty (30)
days after the occurrence of one of the following events taken without Employee’s
consent, that Employee intends to terminate Employee’s employment for Good Reason on
the thirtieth (30th) day following the Company’s receipt of Employee’s notice, if
the Company has not cured the event that gives rise to Good Reason before the end of
such thirty (30) day period: (i) a reduction in Employee’s Base Salary, bonus (if
any) or benefits that would materially diminish the aggregate value of Employee’s
total compensation and benefits and which for purposes of this Section 10(f) shall
constitute a material breach of the Employment Agreement; (ii) the assignment to
Employee of duties that are substantially and materially inconsistent with the
position held by Employee prior to the Change in Control and that are not a
reasonable advancement of Employee’s position within the Company; or (iii) a
material change in geographic location (more than 50 miles) from Employee’s current
principal place of performing services on behalf of the Company.
| 5. | Section 11(b) of the Employment Agreement is amended and restated to read in its entirety as follows: |
(b) Change of Control Termination. If within the thirteen (13) months
immediately following a Change in Control or the one (1) month immediately preceding
a Change in Control: (i) Employee is involuntarily terminated by the Company (or
its successor entity) other than for Cause or (ii)
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Employee voluntarily terminates his employment with the Company (or its successor
entity) for Good Reason (either constituting a “Change of Control Termination”), and
in each case Employee signs a Release and written acknowledgment of Employee’s
continuing obligations under the Proprietary Information Agreement, Employee shall
be entitled to the equivalent of eighteen (18) months of his Base Salary as in
effect immediately prior to the Change of Control Termination Date, payable on the
same basis and at the same time as previously paid and subject to employment tax
withholdings and deductions, commencing on the first regularly scheduled pay date
following the Effective Date of the Release. Provided that Employee is eligible for
and timely elects continuation of his health insurance pursuant to COBRA, for a
period of eighteen (18) months following a Change in Control Termination, the
Company shall also reimburse Employee for the cost of COBRA premiums to be paid in
order for Employee to maintain medical insurance coverage that is substantially
equivalent to that which Employee received immediately prior to the termination
provided, however, that the Company’s obligation to pay Employee’s COBRA premiums
will cease immediately in the event Employee becomes eligible for group health
insurance during the eighteen (18) month period, and Employee hereby agrees to
promptly notify the Company if he becomes eligible to be covered by group health
insurance in such event (the salary continuation and COBRA reimbursement are
collectively referred to as the “Change in Control Severance Benefits”).
In addition, the Company will vest all of the shares subject to the options and such
vesting shall occur upon the occurrence of the Change of Control in the case of a
Change of Control Termination occurring prior to the Change in Control or upon
termination in the case of a Change of Control Termination occurring after the
Change of Control. All other terms and conditions set forth in the options, the
Plan, and the applicable stock option agreements shall remain in full force and
effect.
Employee shall also be eligible to receive a bonus equal to the average of
Employee’s annual bonus for the two years prior to such Change in Control
Termination to be paid at the same time as bonuses are paid pursuant to the
Company’s policy.
| 6. | Section 12 of the Employment Agreement is amended and restated to read in its entirety as follows: |
12. Deferred Compensation. Severance Benefits and Change of Control Severance
Benefits pursuant to Sections 10(d) and 11(b) above, to the extent of payments made
from the date of termination of Executive’s employment through March 15 of the
calendar year following such termination, are intended to constitute separate
payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and thus
payable pursuant to the “short-term deferral” rule set forth in Section
1.409A-1(b)(4) of the Treasury Regulations; to the extent such payments are made
following said March 15, they are intended to constitute
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separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations
made upon an involuntary termination from service and payable pursuant to Section
1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by
said provision, with any excess amount being regarded as subject to the distribution
requirements of Section 409A(a)(2)(A) of the Internal Revenue Code of 1986, as
amended (the “Code”), including, without limitation, the requirement of Section
409A(a)(2)(B)(i) of the Code that payment to Executive be delayed until 6 months
after Executive’s separation from service if Executive is a “specified employee”
within the meaning of the aforesaid section of the Code at the time of such
separation from service.
| 7. | Except as set forth above, the Employment Agreement, as amended, shall remain in full force and effect in accordance with its terms. |
| 8. | This Amendment may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. |
| 9. | This Amendment shall be governed by and construed and enforced in accordance with the laws of the State of Colorado applicable to contracts made and to be performed entirely within such state. |
| 10. | This Amendment shall be effective upon its execution by each of the Company and Employee. |
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and year first
written above.
| /s/ Xxxxxxx Xxxxxx | ||||
| Xxxxxxx Xxxxxx | ||||
| REPLIDYNE, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Chief Executive Officer | |||
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