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Exhibit 10.1 EMPLOYMENT AGREEMENT
This Employment Agreement
(this " Agreement ") is made by and amongst
Volcano Corporation (the " Company "), having
its principal offices at 11455 El Camino Real, Suite 460, San
Diego, CA 92130, and JORGE J. QUINOY (the "
Executive "), effective as of December 10, 2008.
Whereas , the Company desires
to employ the Executive in the position of EVP, US Sales for the
Company; Whereas , the
Executive desires to be employed by the Company as its EVP, US
Sales. Now Therefore , in
consideration of the premises and the mutual covenants herein
contained, the Company and the Executive hereby agree as follows:
1. Definitions. For
purposes of this Agreement, the following terms shall have the
meanings set forth below:
(a)
" Annual Base Salary " shall mean the Executive’s
rate of regular base annual compensation prior to any reduction
under (i) a salary reduction agreement pursuant to Section
401(k) or Section 125 of the Code or (ii) any plan or
arrangement deferring any base salary.
(b)
" Board " shall mean the Board of Directors of the
Company. The Board may delegate its authority to a committee of the
Board (the " Committee "), including without
limitation a remuneration committee, which shall consist of outside
directors as defined under Section 162(m) the Code, and related
Treasury regulations, and "non-employee directors" as defined under
Rule 16b-3 under the Securities Exchange Act of 1934 (the "
Exchange Act "). Unless otherwise specified in the
Agreement, the term "Board" shall include any Committee (or
sub-committee) to which the Board’s authority has been
delegated to.
(c)
" Cause " any of the following (i) conviction of
the Executive by a court of competent jurisdiction of any felony or
a crime involving moral turpitude; (ii) the Executive’s
knowing failure or refusal to follow reasonable instructions of the
CEO or reasonable policies, standards and regulations of the
Company or its affiliates; (iii) the Executive’s failure
or refusal to faithfully and diligently perform the usual,
customary duties of his employment with the Company or its
affiliates; (iv) unprofessional, unethical, immoral or
fraudulent conduct by the Executive; (v) conduct by the Executive
that materially discredits the Company or any affiliate or is
materially detrimental to the reputation, character and standing of
the Company or any affiliate or (vi) the Executive’s
material breach of the Patent, Copyright and Nondisclosure
Agreement or his Information and Inventions Agreement. An event
described in (ii) — (vi) above shall not be treated as
"Cause" until after the Executive has been given written notice of
such event, failure or conduct and the Executive fails to cure such
event, failure, conduct or breach, if curable, within thirty
(30) days from such written notice. In any event, the
Executive shall not be deemed to have been terminated for Cause
unless the Company shall have given a reasonable opportunity to
Executive to appear before the Board to request
reconsideration.
1.
Failure of the Company to meet financial or performance targets
or goals shall not be deemed to be a breach pursuant to subjections
(ii) or (iii) above.
(d)
" Change in Control " shall mean the occurrence of one
(1) or more of the following events:
(i) The date that any Person (other than a trustee or
other fiduciary holding securities under an employee benefit plan
of the Company, or a company owned directly or indirectly by the
stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company), or more than one such
Person acting as a group (as determined under Treasury Regulations
Section 1.409A-3(i)(5)(v)(B)), acquires ownership of the stock
of the Company representing more than thirty-five percent (35%) of
the total combined voting power of the Company’s
then-outstanding stock;
(ii) The date that any Person (other than a trustee or
other fiduciary holding securities under an employee benefit plan
of the Company, or a company owned directly or indirectly by the
stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company), or more than one such
Person acting as a group (as determined under Treasury Regulations
Section 1.409A-3(i)(5)(v)(B)), acquires assets from the
Company that have a total gross fair market value equal to or more
than 40% of the total gross fair market value of all of the assets
of the Company immediately before such acquisition (with "gross
fair market value" determined without regard to any liabilities
associated with such assets);
(iii) The date that the majority of members of the
Board are replaced during any twelve (12)-month period by directors
whose appointment or election is not endorsed by a majority of the
members of the Board prior to the date of such appointment or
election.
(iv) Notwithstanding the foregoing, in no event shall
a Change in Control be deemed to have occurred if, with respect to
the Executive, the Executive is part of a purchasing group which
consummates the Change in Control transaction. The Executive shall
be deemed "part of the purchasing group" for purposes of the
preceding sentence if the Executive is an equity participant or has
agreed to become an equity participant in the purchasing company or
group (except for (a) passive ownership of less than five percent
(5%) of the voting securities of the purchasing company; or
(b) ownership of equity participation in the purchasing
company or group which is otherwise deemed not to be significant,
as determined prior to the Change in Control by a majority of the
non-employee continuing directors of the Board).
(e)
" COBRA " shall mean the Consolidated Omnibus Budget
Reconciliation Act of 1985, as well as any state law of similar
effect.
(f)
" Code " shall mean the Internal Revenue Code of 1986,
as amended, and, as applicable, Treasury Regulations promulgated
thereunder.
(g)
" Company " shall mean Volcano Corporation and any
successor to its business and/or assets which assumes (either
expressly, by operation of law or otherwise) and/or agrees to
perform this Agreement by operation of law or otherwise (except in
determining, under
2.
subsection (d) hereof, whether or not any Change in Control
of the Company has occurred in connection with such succession).
(h)
" Date of Termination " shall mean with respect to any
purported termination of the Executive’s employment, the
effective date of the Executive’s Separation from Service.
(i)
" Disability " shall mean the Executive’s
inability for medical reasons to perform the essential duties of
the Executive’s position for either ninety
(90) consecutive calendar days or one hundred twenty
(120) business days in a twelve month period by reason of any
medically determined physical or mental impairment as determined by
a medical doctor selected by written agreement of the Company and
the Executive upon the request of either party by notice to the
other.
(j) " Good Reason " shall mean (i) a material
change in the character or scope of the Executive’s position,
duties, Annual Base Salary, responsibilities, reporting or
authority; (ii) a material change initiated by the Company in
the living or commuting relationship currently utilized by the
Executive and/or his family or the Company’s relocation of
its principal place of business to a location that is greater than
fifty (50) miles from the Atlanta office location that is
being used as of the effective date of the Agreement and the
Company requiring the Executive to perform a substantial
performance of his services at such location; (iii) failure of
the Company to renew the Agreement; (iv) failure of the
Company to have any successor entity assume and perform this
Agreement pursuant to Section 7(d); (iv) the material
breach of the Agreement by the Company or any successor thereto; or
(v) written notice of resignation from the Executive during
the sixty (60) day period following the date which is six months
after a Change in Control.
(k)
" Patent, Copyright and Nondisclosure Agreement " shall
mean the Patent, Copyright and Nondisclosure Agreement between the
Executive and the Company dated March 15, 2002.
(l)
" Person " shall have the meaning ascribed thereto in
Section 3(a)(9) of the Exchange Act, as modified, applied and
used in Sections 13(d) and 14(d) thereof; provided ,
however , a Person shall not include (i) the Company or
any of its respective subsidiaries, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the
Company or any of its respective subsidiaries (in its capacity as
such), (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities.
(m)
" Release " shall mean a general mutual release of the
Company and the Executive containing a mutual non-disparagement
clause in substantially the form attached hereto as
Exhibit A , subject to such modifications as mutually
agreed to by the parties hereto. The Release must be signed by the
Executive and become effective in accordance with its terms not
later than sixty (60) days following the Date of Termination,
unless a longer period for execution and effectiveness is expressly
required by applicable law.
(n)
" Separation from Service " shall mean the date after
which (i) no further services are reasonably expected to be
performed by the Executive or (ii) the level of bona fide
3.
services that the Executive would perform (whether as an
employee or as an independent contractor) would permanently
decrease to no more than 20% of the average level of bona fide
services performed (whether as an employee or as an independent
contractor) over the preceding 36-month period. The determination
of such date shall be made in good faith by the Board based on the
applicable facts and circumstances.
2. Term of this Agreement . The term of this Agreement
shall commence upon the date of this Agreement set forth above and
shall continue until the third anniversary of the date of this
Agreement; provided however , that the term of this
Agreement shall automatically be extended for an additional term of
one year on each anniversary, up to a maximum of five
(5) total years (the " Term ") unless either
party to this Agreement delivers a written notice of non-extension
to the other party by at least ninety (90) days prior to the
expiration of the Term. This Agreement will expire, in all cases,
on December 10, 2013.
3. Duties; Scope of Employment; Compensation and
Benefits.
(a) Position and Duties. The Company shall employ the
Executive to the position of EVP, US Sales. During the Term, the
Executive will devote substantially all of the Executive’s
business efforts and time to the Company. The Executive agrees not
to actively engage in any other employment, occupation or
consulting activity for any direct or indirect remuneration without
the prior approval of the Board, provided, however , that
the Executive may engage in the following as long as such
activities do not materially interfere with the Executive’s
duties and responsibilities with the Company: (i) serve on the
board of one (1) unaffiliated corporation or the boards of
trade associations or charitable organizations; (ii) engage in
charitable activities and community affairs; or (iii) manage
the Executive’s personal investments and affairs;
provided, however , that service on the Board on an
unaffiliated corporation shall be subject to the reasonable prior
approval of the Board, which shall not be unreasonably withheld or
delayed.
(b) Annual Base Salary. The Executive’s Annual
Base Salary shall equal Three Hundred Thousand Dollars
($300,000.00). This amount shall be reviewed annually in January of
each year by the CEO and the Board and, in the sole discretion of
the Board, may be adjusted upward with such adjustments effective
January 1 of the respective year. Notwithstanding the preceding
sentence, the Executive’s annual salary may be reduced if
such reduction is pro rata among substantially all of the
Company’s senior level executives as a group.
(c) Bonus. The Executive’s target bonus
opportunity shall be $150,000 (the " Target Bonus "),
assuming achievement at 100% level of the performance objectives,
with amounts earned at other levels of performance as outlined on
Exhibit B . This target percentage shall be reviewed
annually in by the Board (or a duly authorized committee thereof)
and, in its sole discretion, may be adjusted upward. The
Executive’s actual bonus earned shall be determined based on
the Executive’s performance against the objectives outlined
on Exhibit B , as may be amended from time to time. Any
earned annual bonus will be paid in no event later than
March 15 of the year following the year of performance. The
Executive shall also be eligible to receive an additional bonus in
the form of an annual stock option grant to purchase additional
shares of Company stock pursuant to the terms of the Volcano
Corporation 2005
4.
Equity Compensation Plan (the " Equity Plan ")
based upon the Executive’s performance and achievement of
target objectives agreed to by the Company and the Executive.
(d) Pension and Welfare Plans. During the Term, the
Executive and the Executive’s dependents, if applicable,
shall be entitled to participate in all incentive, savings and
retirement plans, health and welfare benefit plans, practices,
policies and programs (including, without limitation, medical,
prescription, dental, disability, employee life, group life,
accidental death and travel accident insurance plans and programs)
sponsored by the Company or its affiliates on the same terms and
conditions generally applicable to executives of the Company
generally.
(e) Equity Plans. The Executive shall be entitled to
participate in any stock option, restricted stock, stock
appreciation rights, or any other equity compensation plan or
program sponsored by the Company or its affiliates on the same
terms and conditions generally applicable to executives of the
Company. Notwithstanding the foregoing, the Executive shall not be
entitled to awards under such plans at any time or in any
particular amount. Any equity interests or rights to purchase
equity interests in the Company held by the Executive and issued
pursuant to the Equity Plan shall be administered and subject to
the terms of the Equity Plan and any amendments thereto, including,
without limitation, the Equity Plan’s provisions relevant to
a Change in Control.
(f) Designation as Qualified Performance-Based
Compensation. The Company may determine that any bonus or
equity awards issued under Sections 3(c) or 3(e) of this Agreement
(" Awards ") shall be considered "qualified
performance-based compensation" under Section 162(m) of the Code.
Any Awards shall be administered by the Committee in accordance
with this Section 3(f).
(g) Fringe Benefits and Prerequisites. The Executive
shall be entitled to fringe benefits and prerequisites available to
executives in accordance with the plans, practices, programs and
policies of the Company from time to time. Specifically to this
position, Executive shall be entitled to a monthly auto allowance
in the amount of $950.00 per month payable as $438.46 per pay
period.
(h) Expenses . The Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the applicable policy of the
Company and its affiliated companies.
(i) Paid Time Off. The Executive shall be entitled to
accrue such number of days per year of paid time off in accordance
with the general policy of the Company.
4. Termination. The
Executive’s employment shall terminate upon the occurrence of
any of the following events:
(a) Termination Without Cause; Resignation for Good
Reason.
(i) The Company may remove the Executive at any time
without Cause from the position in which the Executive is employed
hereunder upon not less than thirty (30) days’ prior
written notice of termination to the Executive; provided,
however , that, in the event that such notice is given, the
Executive shall be allowed reasonable time away from the office to
seek other employment. In addition, the Executive may initiate
termination of
5.
employment by resigning under this Section 4(a) for Good Reason.
The Executive shall give the Company not less than thirty
(30) days’ prior written notice of termination of such
resignation for Good Reason.
(ii) Upon any removal or resignation described in
Section 4(a)(i) above, the Executive shall be entitled to
receive, subject to the effectiveness of the Release, the
following:
(1) The Executive shall receive cash severance (the "
Cash Severance ") equal to the sum of (a) one
(1) year of the Executive’s Annual Base Salary at the
rate in effect immediately prior to the Date of Termination,
(b) a pro-rated bonus (the " Pro-Rated Bonus ")
for the year in which the Date of Termination occurs, c
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