Re: OFFER LETTER
Exhibit
10.2
December
12, 2008
Xxxxxx
Xxxxx
Re: OFFER
LETTER
Dear
Xxxxxx:
You and
Micrus Endovascular Corporation, a Delaware corporation (the “Company”), signed an
offer letter, dated November 5, 2003 (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 Sections 4 and 5 of the Offer Letter
in their entirety to read as follows:
4. Severance Pay for
Termination in Certain Circumstances
(a) Severance Pay Following a
Change in Control. In the event a Change in Control (as
defined below) occurs and, 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 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").
(b) 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 one (1) year, subject to reduction as set forth in Paragraph
(c) below and applicable withholding, according to the Company's standard
payroll schedule, commencing on the Company's first regular payroll date
following the last day of the Deadline.
(c) Additionally,
on your last day of employment in the event that you have experienced a
Separation, as described in the first paragraph above, 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.
(d) Severance Pay Absent a
Change in Control. In the event you experience a Separation by
the Company for a reason other than for Cause (as defined below), death or
Permanent Disability (as defined below) that does not occur upon a Change in
Control (as defined below) or within one (1) year thereafter, 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 one (1) year, subject to reduction as set forth
in paragraph (c) below and applicable withholding, according to the Company's
standard payroll schedule, commencing on the Company's first regular payroll
date following the last day of the Deadline.
(e) Reduction for Other
Employment. If during the one-year period while you are
receiving the severance pay, as described under Section 4(a) or 4(b), as
applicable, you become an employee of another entity or engage in full-time
(i.e., 30 hours/week or more) consulting for one or more entities, you agree to
notify the Company. Micrus will be entitled to reduce by two thirds
the separation payments described under Section 4(a) or 4(b), as applicable,
that remain owing after the commencement of such employment or full time
consulting.
(f) 409A. For
purposes of Code Section 409A, each salary continuation payment under
Section 4(a) or 4(b), as applicable, 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 Section 4(a) or 4(b), 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 Section 4(a) or 4(b), 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.
5. Definitions. For
purposes of this Agreement, the following terms shall have the following
meaning:
(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) failure by you 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)
mis-appropriation by you of the assets or business opportunities of the Company,
or its affiliates, (iv) embezzlement or other financial fraud committed by you,
(v) you 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.
(g) (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 during
the Employment Period: (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.
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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XXXXXX
XXXXX
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/s/
Xxxxxx X. Xxxxx
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(Signature)
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12/15/2008
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Date
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