Exhibit 10.23
THERMAGE, INC.
CHANGE OF CONTROL AND SEVERANCE
AGREEMENT
This Change of Control Severance
Agreement (the “Agreement”) is made and entered into by
and between [NAME] (“Executive”) and Thermage, Inc.
(the “Company”), effective as of June 16, 2008
(the “Effective Date”).
RECITALS
1. It is expected that the Company
from time to time will consider the possibility of an acquisition
by another company or other change of control. The Compensation
Committee (the “Committee”) of the Board of Directors
of the Company (the “Board”) recognizes that such
consideration can be a distraction to Executive and can cause
Executive to consider alternative employment opportunities. The
Committee has determined that it is in the best interests of the
Company and its stockholders to assure that the Company will have
the continued dedication and objectivity of Executive,
notwithstanding the possibility, threat or occurrence of a Change
of Control of the Company.
2. The Committee believes that it is
in the best interests of the Company and its stockholders to
provide Executive with an incentive to continue his or her
employment and to motivate Executive to maximize the value of the
Company upon a Change of Control for the benefit of its
stockholders.
3. The Committee believes that it is
imperative to provide Executive with certain severance benefits
upon Executive’s termination of employment following a Change
of Control. These benefits will provide Executive with enhanced
financial security and incentive and encouragement to remain with
the Company notwithstanding the possibility of a Change of
Control.
4. Certain capitalized terms used in
the Agreement are defined in Section 5 below.
AGREEMENT
NOW, THEREFORE, in consideration of
the mutual covenants contained herein, the parties hereto agree as
follows:
1. Term of Agreement . This
Agreement will continue indefinitely until terminated by written
consent of the parties hereto. Notwithstanding the previous
sentence, if Executive becomes entitled to benefits pursuant to
Section 3 of this Agreement, the Agreement will terminate when
all of the obligations of the parties hereto with respect to this
Agreement have been satisfied.
2. At-Will Employment . The
Company and Executive acknowledge that Executive’s employment
is and will continue to be at-will, as defined under applicable
law. If Executive’s employment terminates for any reason,
Executive will not be entitled to any payments, benefits, damages,
awards or compensation other than as provided by this Agreement and
the payment of accrued but unpaid wages, as required by law, and
any unreimbursed reimbursable expenses.
3. Severance Benefits
.
(a) Termination without Cause or
Resignation for Good Reason Apart From a Change of Control . If
the Company terminates Executive’s employment with the
Company without Cause or if Executive resigns from such employment
for Good Reason, and such termination occurs either prior to three
(3) months before or after twelve (12) months following a
Change of Control, and Executive signs and does not revoke a
release of claims with the Company (in a form reasonably acceptable
to the Company and substantially similar to the form attached
hereto as Exhibit A and effective no later than March 15 of
the year following the year in which the termination occurs), then
Executive will receive the following from the Company:
(i) Accrued Compensation .
The Company will pay Executive all accrued but unpaid vacation,
expense reimbursements, wages, and other benefits due to Executive
under any Company-provided plans, policies, and
arrangements.
(ii) Severance Payment .
Executive will receive a lump sum payment of severance equal to 50%
of Executive’s annual base salary as in effect immediately
prior to Executive’s termination date.
(iii) Equity Awards .
Executive will not receive any accelerated vesting of his or her
outstanding equity awards, except as may be set forth in
Executive’s individual equity award agreements or the terms
of the Company’s equity award plans.
(iv) Continued Employee
Benefits . If Executive elects continuation coverage pursuant
to the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”) for Executive and Executive’s
eligible dependents, within the time period prescribed pursuant to
COBRA, the Company will reimburse Executive for the COBRA premiums
for such coverage (at the coverage levels in effect immediately
prior to Executive’s termination) until the earlier of
(A) a period of six (6) months from the last date of
employment of Executive with the Company, or (B) the date upon
which Executive and/or Executive’s eligible dependents
becomes covered under similar plans. COBRA reimbursements will be
made by the Company to Executive consistent with the
Company’s normal expense reimbursement policy.
(b) Termination without Cause or
Resignation for Good Reason in Connection with a Change of
Control . If the Company terminates Executive’s
employment with the Company without Cause or if Executive resigns
from such employment for Good Reason, and such termination occurs
within the period beginning three (3) months before and ending
twelve (12) months after a Change of Control, and Executive
signs and does not revoke a release of claims with the Company (in
a form reasonably acceptable to the Company and substantially
similar to the form attached hereto as Exhibit A and effective no
later than March 15 of the year following the year in which
the termination occurs), then Executive will receive the following
from the Company:
(i) Accrued Compensation .
The Company will pay Executive all accrued but unpaid vacation,
expense reimbursements, wages, and other benefits due to Executive
under any Company-provided plans, policies, and
arrangements.
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(ii) Severance Payment .
Executive will receive a lump sum payment of severance equal to 50%
of the sum of (x) Executive’s annual base salary as in
effect immediately prior to Executive’s termination date or
(if greater) at the level in effect immediately prior to the Change
of Control and (y) Executive’s annual target bonus for
the fiscal year of Executive’s termination or (if greater)
Executive’s annual target bonus in effect immediately prior
to the Change of Control.
(iii) Equity Awards .
Executive’s outstanding equity awards will vest in full as to
100% of the unvested portion of the award.
(iv) Continued Employee
Benefits . If Executive elects continuation coverage pursuant
to COBRA for Executive and Executive’s eligible dependents,
within the time period prescribed pursuant to COBRA, the Company
will reimburse Executive for the COBRA premiums for such coverage
(at the coverage levels in effect immediately prior to
Executive’s termination) until the earlier of (A) a
period of six (6) months from the last date of employment of
Executive with the Company, or (B) the date upon which
Executive and/or Executive’s eligible dependents becomes
covered under similar plans. COBRA reimbursements will be made by
the Company to Executive consistent with the Company’s normal
expense reimbursement policy.
(c) Timing of Severance
Payments . Unless otherwise required by Section 3(g), the
Company will pay any severance payments in a lump sum in a lump sum
one (1) month after Executive’s termination date;
provided, however, that no severance or other benefits will be paid
or provided until the release of claims discussed in
Section 3(a) or 3(b) becomes effective, and any severance
amounts or benefits otherwise payable between Executive’s
termination date and the date such release becomes effective will
be paid on the effective date of such release. If Executive should
die before all of the severance amounts have been paid, such unpaid
amounts will be paid in a lump-sum payment promptly following such
event to Executive’s designated beneficiary, if living, or
otherwise to the personal representative of Executive’s
estate.
(d) Voluntary Resignation;
Termination for Cause . If Executive’s employment with
the Company terminates (i) voluntarily by Executive (other
than for Good Reason) or (ii) for Cause by the Company, then
Executive will not be entitled to receive severance or other
benefits except for those (if any) as may then be established under
the Company’s then existing severance and benefits plans and
practices or pursuant to other written agreements with the
Company.
(e) Disability; Death . If
the Company terminates Executive’s employment as a result of
Executive’s Disability, or Executive’s employment
terminates due to his or her death, then Executive will not be
entitled to receive severance or other benefits except for those
(if any) as may then be established under the Company’s then
existing written severance and benefits plans and practices or
pursuant to other written agreements with the Company.
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(f) Exclusive Remedy . In the
event of a termination of Executive’s employment as set forth
in Section 3(a) or 3(b) of this Agreement, the provisions of
Section 3(a) or 3(b), as applicable, are intended to be and
are exclusive and in lieu of any other rights or remedies to which
Executive or the Company may otherwise be entitled, whether at law,
tort or contract, in equity, or under this Agreement (other than
the payment of accrued but unpaid wages, as required by law, and
any unreimbursed reimbursable expenses). Executive will be entitled
to no benefits, compensation or other payments or rights upon a
termination of employment other than those benefits expressly set
forth in Section 3 of this Agreement.
(g) Section 409A
.
(i) Notwithstanding anything to the
contrary in this Agreement, if Executive is a “specified
employee” within the meaning of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”)
and the final regulations and any guidance promulgated thereunder
(“Section 409A”) at the time of Executive’s
termination (other than due to death), then the severance payable
to Executive, if any, pursuant to this Agreement, when considered
together with any other severance payments or separation benefits
that are considered deferred compensation under Section 409A
(together, the “Deferred Compensation Separation
Benefits”) that are payable within the first six
(6) months following Executive’s termination of
employment, will become payable on the first payroll date that
occurs on or after the date six (6) months and one
(1) day following the date of Executive’s termination of
employment. All subsequent Deferred Compensation Separation
Benefits, if any, will be payable in accordance with the payment
schedule applicable to each payment or benefit. Notwithstanding
anything herein to the contrary, if Executive dies following his or
her termination but prior to the six (6) month anniversary of
his or her termination, then any payments delayed in accordance
with this paragraph will be payable in a lump sum as soon as
administratively practicable after the date of Executive’s
death and all other Deferred Compensation Separation Benefits will
be payable in accordance with the payment schedule applicable to
each payment or benefit. Each payment and benefit payable under
this Agreement is intended to constitute separate payments for
purposes of Section 1.409A-2(b)(2) of the Treasury
Regulations.
(ii) Any amount paid under this
Agreement that satisfies the requirements of the “short-term
deferral” rule set forth in Section 1.409A-1(b)(4) of
the Treasury Regulations shall not constitute Deferred Compensation
Separation Benefits for purposes of clause
(i) above.
(iii) Any amount paid under this
Agreement that qualifies as a payment made as a result of an
involuntary separation from service pursuant to
Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that
do not exceed the Section 409A Limit shall not constitute
Deferred Compensation Separation Benefits for purposes of clause
(i) above.
(iv) The foregoing provisions are
intended to comply with the requirements of Section 409A so
that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under
Section 409A, and any ambiguities herein will be interpreted
to so comply. The Company and Executive agree to work together in
good faith to consider amendments to this Agreement and to take
such reasonable actions which are necessary, appropriate or
desirable to avoid imposition of any additional tax or
