AMENDMENT #2 TO EMPLOYMENT AGREEMENT
EXHIBIT 10.2
THIS AMENDMENT #2 TO EMPLOYMENT AGREEMENT (this “Amendment”) is made and entered into as of
the 23rd day of February, 2006 (the “Effective Date”) by and between XXXXXX X. XXXXXXX, an individual
(“Employee”), and I-FLOW CORPORATION, a Delaware corporation (“Company”).
Background
A. The Company and Employee previously entered into that certain Employment Agreement dated
May 16, 1990 (the “Employment Agreement”), as subsequently amended by Amendment #1 to Employment
Agreement dated as of June 21, 2001 (“Amendment #1”, and collectively with the Employment
Agreement, the “Agreement”). Capitalized terms in this Amendment and not otherwise defined herein
shall have the meanings given them in the Agreement.
B. The Company and Employee wish to amend and modify certain provisions in the Agreement as
provided herein and effective as of the Effective Date hereof, while leaving unchanged all other
provisions of the Agreement.
Agreement
1. Termination Without Cause. To provide that the Company no longer has a deferred
payment option with respect to severance payments provided under the Agreement, Section 2.5(b)(i)
of the Agreement (as previously amended by Section 6 of Amendment #1) is hereby deleted and
replaced in its entirety with the following:
(i) A cash payment equal to three (3) times the sum of (A) Employee’s annual salary
rate in effect at the time of termination, plus (B) the average annual bonus earned
by Employee in the previous three full fiscal years;
2. Termination Without Cause. Section 2.5(b)(iv) of the Agreement (as previously
amended by Section 6 of Amendment #1) is hereby deleted and replaced in its entirety with the
following:
(iv) Employee’s unvested and outstanding stock options, restricted stock or other
equity-based awards shall immediately and automatically become fully vested and (to
the extent relevant) exercisable. Any stock options and stock appreciation rights
shall remain exercisable for their remaining terms (but in no event later than the
last day prior to the day that any extension would cause such options or rights to
become subject to Section 409A of the Code).
3. Section 409A Compliance. In recognition that Section 409A of the Code may prohibit
the payment of certain payments or benefits under the Agreement in connection with
Employee’s
termination of employment earlier than six (6) months following Employee’s termination of
employment, a new Section 6.12 is added to the Agreement as follows:
6.12 Compliance with Section 409A. Notwithstanding any provision of this
Agreement to the contrary, if, at the time of Employee’s termination of employment
with the Company, he 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
Employee pursuant to this Agreement would constitute deferred compensation subject
to Section 409A, no such payment or benefit will be provided under this Agreement
until the earliest of (A) the date which is six (6) months after his “separation
from service” for any reason, other than death or “disability” (as such terms are
used in Section 409A(a)(2) of the Code), (B) the date of his death or “disability”
(as such term is used in Section 409A(a)(2)(C) of the Code) or (C) the effective
date of a “change in the ownership or effective control” of the Company (as such
term is used in Section 409A(a)(2)(A)(v) of the Code). The provisions of this
Section 6.12 shall only apply to the extent required to avoid Employee’s incurrence
of any penalty tax or interest under Section 409A of the Code or any regulations or
Treasury guidance promulgated thereunder. In addition, if any provision of this
Agreement would cause Employee 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.
4. No Other Changes. Except as otherwise set forth in this Agreement, 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 as of the Effective
Date.
| I-FLOW CORPORATION | XXXXXX X. XXXXXXX | |||||||||
By:
|
/s/ Xxxxx X. Dal Porto | By: | /s/ Xxxxxx X. Xxxxxxx | |||||||
| Executive VP, COO | ||||||||||
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