Re: OFFER LETTER
Exhibit
10.3
December
12, 2008
Xxxxxxx
Xxxxxxxx
Re: OFFER
LETTER
Dear
Xxxxxxx:
You and
Micrus Endovascular Corporation, a Delaware corporation (the “Company”), signed an
offer letter, dated November 1, 2005 (the "Offer
Letter"). This letter agreement amends the Offer Letter in
order for the cash severance payments under the Offer Letter to be exempt from
or comply with Section 409A of the Internal Revenue Code of 1986, as amended
(the "Code"). Except
as otherwise amended in this letter agreement, the Offer Letter remains in full
force and effect.
Specifically,
this letter agreement amends and restates the language contained in the third
paragraph and all subsequent paragraphs under the "Benefits" Section to read as
follows:
Severance Benefits in
connection with Change in Control
Notwithstanding
the foregoing, in the event a Change in Control (as defined below) occurs and,
in connection therewith or within one (1) year thereafter, you experience an
involuntary separation, as defined in Treasury Regulation 1.409A-1(h) (“Separation”), by the
Company for a reason other than for Cause (as defined below), death or Permanent
Disability (as defined below) or by you for Good Reason (as defined below), and
you satisfy the following conditions, you will receive certain cash severance
and vesting acceleration, as described in the paragraph below. To
receive the cash severance and vesting acceleration described below, you
must execute (and do not revoke) a full and complete general release
of all claims in a form provided by the Company without alteration (the "Release") and return
all Company property (collectively, the "Conditions"), in each
case within thirty (30) days after the Separation (the "Deadline").
Provided
that you've satisfied the Conditions within the Deadline, then the
Company shall continue to pay you (as severance pay) your regular bi-weekly base
salary as in effect on the Termination Date (exclusive of bonus or any other
compensation) for six months, subject to applicable withholding and according to
the Company's standard payroll schedule, commencing on the Company's first
regular payroll date following the last day of the
Deadline. Additionally, on your last day of employment, in the event
that you have experienced a Separation, as described in the immediately
preceding paragraph, the vesting of each of the stock options to purchase shares
of common stock of the Company as set forth above shall be accelerated in full,
such that you shall be entitled to exercise such stock options (in accordance
with the exercise terms and conditions set forth in the option agreement and/or
plan pursuant to which such stock options were granted) to
the same extent as you would have been entitled had you been continuously
employed by the Company until the end of the vesting period related to each such
stock option.
For
purposes of this letter, the following terms shall have the following
meanings:
(a)
"Cause" shall mean a good faith finding by the Company of: (i) gross negligence
or willful misconduct by you in connection with your employment duties, (ii)
your failure to perform your duties or responsibilities required pursuant to
your employment, if such failure is not cured within ten (10) days after written
notice thereof, (iii) your misappropriation of the assets or business
opportunities of the Company, or its affiliates, (iv) embezzlement or other
financial fraud committed, (v) your knowingly allowing any third party to commit
any of the acts described in any of the preceding clauses (iii) or (iv), or (vi)
your indictment for, conviction of, or entry of a plea of no contest with
respect to, any felony.
(b) The
conditions set forth in this paragraph will be considered "Good Reason" only if
(i) you give the Company written notice of one of the conditions described in
this paragraph within thirty (30) days after the condition comes into existence;
(ii) the Company fails to remedy the condition within thirty (30) days after
receiving your written notice; and (iii) after the Company's failure to remedy
the condition within the previously described 30-day period, you resign from the
Company within ninety (90) days after one of the following conditions has come
into existence without your consent. "Good Reason" shall mean: (i)
the unilateral relocation by the Company of your principal work place for the
Company to a site more then 60 miles from the location of your primary workplace
before such relocation occurs; (ii) a material reduction in your then current
base salary, without your consent; or (iii) a material diminution of your
authority, duties or responsibilities .
(c) "Change
in Control" shall mean the consummation of any of the following events: (i) a
sale, lease or disposition of all or substantially all of the assets of the
Company, or (ii) a sale, merger, consolidation, reorganization,
recapitalization, sale of assets, stock purchase, contribution or other similar
transaction (in a single transaction or a series of related transactions) of the
Company with or into any other corporation or corporations or other entity, or
any other corporate reorganization, where the stockholders of the Company
immediately prior to such event do not retain (in substantially the same
percentages) beneficial ownership, directly or indirectly, of more than fifty
percent (50%) of the voting power of and interest in the successor entity or the
entity that controls the successor entity, provided, however, that no Change in
Control shall be deemed to have occurred due to the conversion or payment of any
equity or debt instrument of the Company which is outstanding on the date
hereof.
(d) "Termination
Date" shall mean your last day of employment with the Company.
(e) “Permanent Disability”
shall mean your inability to perform the essential functions of your position
with or without reasonable accommodation for a period of 120 consecutive days
because of your physical or mental impairment.
Severance Benefits not in
connection with Change in Control
In the
event you experience a Separation by the Company for a reason other than for
Cause (as defined above), death or Permanent Disability (as defined above) that
does not occur in connection with, or within twelve months after, a Change in
Control (as defined above), and you have satisfied the Conditions (as defined
above) within the Deadline (as defined above), the Company shall continue to pay
you (as severance pay), your regular bi-weekly base salary as in effect on the
Termination Date (exclusive of bonus or any other compensation), for six (6)
months, subject to applicable withholding and according to the Company's
standard payroll schedule, commencing on the Company's first regular payroll
date following the last day of the Deadline.
(a)For purposes of Code
Section 409A, each salary continuation payment that is paid as severance
pay, as described above, is hereby designated as a separate
payment. Notwithstanding anything stated herein to the contrary, each
of the salary continuation payments provided in connection with your Separation
under "Severance Benefits in connection with Change in Control" or "Severance
Benefits not in connection with Change in Control", as applicable, is intended
to be exempt from Code Section 409A pursuant to Treasury Regulation Section
1.409A-1(b)(9)(iii) and to the extent it is exempt pursuant to such section, it
will in any event be paid no later than the last day of your second taxable year
following the taxable year in which your Separation has occurred; provided that,
to the extent that any of such salary continuation payments and any other
payments paid to you in connection with your Separation does not qualify to be
exempt from Code Section 409A pursuant to Treasury Regulation Section
1.409A-1(b)(9)(iii) or otherwise exceeds the limit set forth in Treasury
Regulation Section 1.409A-1(b)(9)(iii)(A) or any similar limit promulgated by
the Treasury or the IRS, the portion of the salary continuation payments that
does not qualify or otherwise exceeds such limit, as determined by the Company
in its sole discretion, will be paid by no later than the fifteenth (15th) day
of the third (3rd) month following the end of your first tax year in which your
Separation occurs, or, if later, the fifteenth (15th) day of the third (3rd)
month following the end of the Company's first tax year in which your Separation
occurs, as provided in Treasury Regulation Section 1.409A-1(b)(4).
Notwithstanding
the above, if any of the salary continuation payments provided in connection
with your Separation under "Severance Benefits in connection with Change in
Control" or "Severance Benefits not in connection with Change in Control", as
applicable, does not qualify for any reason to be exempt from Code Section 409A
pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii) or Treasury
Regulation Section 1.409A-1(b)(4) and you are deemed by the Company at the time
of your Separation to be a “specified employee,” as defined in Code Section
409A, each such salary continuation payment will not be made or commence until
the date which is the first day of the seventh month after your Separation and
the installments that otherwise would have been paid during the first six months
after your Separation will be paid in a lump sum on the first day of the seventh
month after your Separation. Such deferral will only be effected to the extent
required to avoid adverse tax treatment to you, including (without limitation)
the additional twenty percent (20%) federal tax for which you would otherwise be
liable under Section 409A(a)(1)(B) of the Code in the absence of such
deferral.
This
letter, along with any agreements relating to proprietary rights between you and
the Company, set forth the terms of your employment with the Company and
supersede any prior representations or agreements.
This
amendment to the Offer Letter may be executed in two or more counterparts, each
of which will be deemed an original, but all of which together will constitute
one and the same instrument. To indicate your acceptance of this
amendment to the Offer Letter, please sign and date this letter in the space
provided below and return it to me.
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Very
truly yours
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MICRUS
ENDOVASCULAR
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CORPORATION
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By:
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/s/
Xxxx X. Xxxxxxxx
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Name:
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Xxxx
X. Xxxxxxxx
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Title:
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CEO
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ACCEPTED
AND AGREED:
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XXXXXXX
XXXXXXXX
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/s/
Xxxxxxx X. Xxxxxxxx
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(Signature)
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12/15/2008
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Date
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