CHANGE IN CONTROL
AGREEMENT
This Change in
Control Agreement (“Agreement”) is made effective as of
March 13, 2006, by and between Restore Medical Inc., a
Minnesota corporation (the “Company”), and John Foster,
an individual resident of Minnesota (the
“Employee”).
WHEREAS ,
the Company desires to employ Employee as its Senior Vice President
of Commercial Operations, and Employee desires to accept such
employment and designation, both subject to the terms and
conditions of this Agreement;
WHEREAS ,
the parties have decided it is in their mutual best interests to
memorialize in writing certain terms and conditions of the
employment relationship between them; and
WHEREAS ,
Employee understands that nothing in this Agreement creates any
guarantee of continuous employment with the Company, and that
Employee’s employment may be terminated by either the Company
or Employee at any time, upon such notice as may be required in
this Agreement;
NOW,
THEREFORE , in consideration of Employee’s employment
with the Company and the foregoing premises, the mutual covenants
set forth below, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Company
and Employee agree as follows.
1.
Term of Agreement . As set forth herein, the
parties’ respective obligations under this Agreement shall
commence on March 13, 2006, and shall extend indefinitely
until this Agreement is terminated by either party according to
Section 4 below (the “Term”), provided, however,
that any provision in this Agreement that by its terms survives
expiration of this Agreement shall so survive and Employee shall
continue to be bound by the terms of each such provision for the
time period set forth therein. The Employee shall be employed on an
at-will basis. This Agreement is not, and shall not be construed
as, an employment contract affecting in any way the duration of the
Employee’s employment or any terms and conditions thereof
except those set forth herein. As set forth below, the Employee and
the Company may terminate their employment relationship at any
time, for any reason or for no reason, with cause or without
cause.
2.
Position and Duties . During the Term, the Employee
agrees to serve as Senior Vice President of Commercial Operations,
subject and reporting to the President and Chief Executive Officer
(“CEO”). The Employee agrees to perform such reasonable
duties and responsibilities as are customary for the
Employee’s position and such other duties and
responsibilities that may be assigned by the President and CEO from
time to time. During the Term, the Employee agrees to serve Company
faithfully and to the best of the Employee’s ability and to
devote the Employee’s full business time, attention and
efforts to the business and affairs of Company (exclusive of any
period of vacation, sick, disability, or other leave to which
Employee is entitled) during normal business hours. The principal
place of employment and the location of Employee’s principal
office and normal place of work shall be within the Minneapolis-St.
Paul Metropolitan Area. Employee will be expected to travel to
other locations, as necessary, in the performance of
Employee’s duties during the term of this
Agreement.
3.
Compensation and Benefits .
(a) Base
Salary . During the Term, the Company shall pay the
Employee a “Base Salary” of $17,853.33 monthly,
which equates to an annualized Base Salary of $214,240.00, paid in
accordance with the Company’s regular payroll procedures,
policies, and practices and subject to all required deductions,
withholdings, and reporting obligations. Employee’s Base
Salary may be reviewed by the Company from time to time for
potential increases on the basis of the Employee’s
performance and the financial standing of the Company.
(b)
Additional Performance Incentive . In addition to
Base Salary, the Employee will be eligible to receive an additional
performance incentive pursuant to the Company’s Management
Incentive Plan, as such plan may be amended from time to time.
Employee’s target bonus under the Management Incentive Plan
shall be 25% of Base Salary. The details of Employee’s
eligibility for and receipt of this additional performance
incentive shall be governed by the terms and conditions of the
Management Incentive Plan.
(c) Other
Employee Benefits . During the Employee’s employment
with the Company, the Employee shall be entitled to participate in
the retirement and health and welfare benefits offered generally by
the Company to its employees, including medical, dental, flexible
spending account, group life, group disability, and 401(k), to the
extent that the Employee’s position, tenure, salary, health,
and other qualifications make the Employee eligible to participate.
The Employee’s participation in such benefits shall be
subject to the terms of the applicable plans, as the same may be
amended from time to time. The Company does not guarantee the
adoption or continuance of any particular employee benefit during
the Employee’s employment, and nothing in this Agreement is
intended to, or shall in any way restrict the right of the Company,
to amend, modify or terminate any of its benefits during the Term
of this Agreement. The Employee also will be eligible for the
benefits described in the Company’s Executive Compensation
Plan, subject to the terms of such Plan, as the same may be amended
from time to time. The value of any such benefits the Employee
receives shall be imputed and reported to the Employee as income,
as required.
4.
Termination of Employment .
(a) By the
Company, at Any Time, With Cause . At any time during the
Term, the Company may terminate the Employee’s employment for
Cause. In the event of a termination with Cause, the
Company’s obligations to the Employee hereunder shall
terminate, except as to amounts already vested or earned by but
unpaid to the Employee as of the date of termination.
(b) By the
Company, at Any Time Prior to a Change in Control, Without
Cause . The Company may terminate the Employee’s
employment at any time without Cause. In the event such a
termination without Cause occurs at any time prior to a Change in
Control occurring during the Term, in addition to amounts already
vested or earned by but unpaid to the Employee as of the date of
termination, the Employee shall
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be entitled to
receive six (6) months Base Salary continuation, paid
according to the Company’s normal payroll schedule and
subject to all required withholdings and reporting obligations. The
Company shall also provide the Employee and his current family
members with continued group health coverage, including medical and
dental coverage, as otherwise required under applicable
continuation law and the Consolidated Omnibus Budget Reconciliation
Act of 1986, 29 U.S.C. §§ 1161-1168; 26 U.S.C. §
4980B(f), as amended, and all applicable regulations (referred to
collectively as “COBRA”). Provided that Employee makes
the necessary COBRA elections, the Company will pay the total
applicable premium cost for such medical and dental COBRA
continuation coverage for Employee and his family for a period of
up to 6 months commencing on the date of termination of
employment; provided, however, that the Company’s obligation
to pay for such premiums shall terminate if (i) Employee or
his wife becomes covered under another company’s like benefit
plan; (ii) Employee is eligible (whether or not covered) under
Medicare; or (iii) Employee dies. Such COBRA premiums paid on
Employee’s behalf will be imputed to Employee as income, as
required by law. After expiration of the 6 month period in
which the Company pays the above-described premiums, if necessary,
Employee will be responsible for payment of such premiums for as
long a period as is allowable under applicable law.
(c) By the
Company, at Any Time Following a Change in Control, Without
Cause . In the event that a termination without Cause
occurs following the closing date of the last transaction necessary
to effect a Change in Control occurring during the Term, in
addition to amounts already vested or earned by but unpaid to the
Employee as of the date of termination, the Employee shall be
entitled to receive twelve (12) months Base Salary
continuation, paid according to the Company’s normal payroll
schedule and subject to all required withholdings and reporting
obligations. The Company shall also provide the Employee and his
current family members with continued group health coverage,
including medical and dental coverage, as otherwise required under
applicable continuation law and the Consolidated Omnibus Budget
Reconciliation Act of 1986, 29 U.S.C. §§ 1161-1168; 26
U.S.C. § 4980B(f), as amended, and all applicable regulations
(referred to collectively as “COBRA”). Provided that
Employee makes the necessary COBRA elections, the Company will pay
the total applicable premium cost for such medical and dental COBRA
continuation coverage for Employee and his family for a period of
up to 12 months commencing on the date of termination of
employment; provided, however, that the Company’s obligation
to pay for such premiums shall terminate if (i) Employee or
his wife becomes covered under another company’s like benefit
plan; (ii) Employee is eligible (whether or not covered) under
Medicare; or (iii) Employee dies. Such COBRA premiums paid on
Employee’s behalf will be imputed to Employee as income, as
required by law. After expiration of the 12 month period in
which the Company pays the above-described premiums, if necessary,
Employee will be responsible for payment of such premiums for as
long a period as is allowable under applicable law.
(d) By the
Employee, at Any Time Following a Change in Control, as the Result
of a Constructive Termination . In the event that a
Constructive Termination occurs at any time during the Term and
following the closing date of the last transaction necessary to
effect a Change in Control occurring during the Term, in addition
to
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amounts already
vested or earned by but unpaid to the Employee as of the date of
termination, the Employee shall be entitled to receive twelve
(12) months Base Salary continuation, paid according to the
Company’s normal payroll schedule and subject to all required
withholdings and reporting obligations. The Company shall also
provide the Employee and his current
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