EXHIBIT
10.1
EXECUTIVE EMPLOYMENT
AGREEMENT
This Executive Employment Agreement
(the “ Agreement ”) is made effective as of
September 15, 2008 (the “ Effective Date
”), by and between Northstar Neuroscience, Inc. (“
Northstar ”) and Deborah Sheffield (“
Employee ”).
The parties agree as
follows:
1. Employment . Company
hereby employs Employee, and Employee hereby accepts such
employment, upon the terms and conditions set forth
herein.
2. Duties .
2.1 Position . Employee is
employed as Vice President, Clinical and Regulatory Affairs,
reporting to the Chief Executive Officer, and shall have such
duties and responsibilities consistent with such position as may be
reasonably assigned from time to time.
2.2 Best Efforts; Full-time .
Employee shall faithfully and diligently perform all duties
assigned to Employee. Employee will expend Employee’s best
efforts on behalf of Northstar, and will abide by all policies and
decisions made by Northstar, as well as all applicable federal,
state and local laws, regulations or ordinances. Employee will act
in the best interest of Northstar at all times. Employee shall
devote Employee’s full business time and efforts to the
performance of Employee’s assigned duties for Northstar,
unless Employee notifies Northstar in advance of Employee’s
intent to engage in other paid work and receives Northstar’s
express written consent to do so.
2.3 Work Location .
Employee’s principal place of work shall be located in
Seattle, Washington, or such other location as the parties may
agree from time to time.
3. Term . The term of this
Agreement shall begin on the Effective Date and shall continue
until it is terminated pursuant to Section 7 herein (the
“ Term ”).
4. Compensation .
4.1 Base Salary . As
compensation for Employee’s performance of Employee’s
duties hereunder, Northstar shall pay to Employee her current base
salary approved by the Compensation Committee of the Board of
Directors of the Company ($177,300 as of the Effective Date),
payable in accordance with Northstar’s normal payroll
practices.
4.2 Performance and Salary
Review . Northstar may periodically review Employee’s
performance. Adjustments to salary or other compensation, if any,
will be made by Northstar in its sole and absolute
discretion.
4.3 Employment Taxes . All of
Employee’s compensation shall be subject to customary
withholding taxes and any other employment taxes as are commonly
required to be collected or withheld by Northstar.
5. Customary Fringe Benefits
. Employee will be eligible for all customary and usual fringe
benefits generally available to senior executives of Northstar,
subject to the terms and conditions of Northstar’s benefit
plan documents. Northstar reserves the right to change or eliminate
the fringe benefits on a prospective basis, at any time, effective
upon notice to Employee.
6. Business Expenses .
Employee will be reimbursed for all reasonable, out-of-pocket
business expenses incurred in the performance of Employee’s
duties on behalf of Northstar. To obtain reimbursement, expenses
must be submitted promptly, with appropriate supporting
documentation, in accordance with Northstar’s
policies.
7. Termination .
7.1 At-Will Employment .
Either Employee or Northstar shall have the right to terminate the
employment relationship at any time, with or without cause or
advance notice. It is expressly understood that the employment
relationship is at-will, and nothing in this Agreement alters such
at-will employment relationship. Any change to this at-will
employment relationship must be by a separate, specific, written
agreement signed by Employee and an authorized representative of
Northstar.
7.2 Termination for Cause by
Northstar . Northstar may terminate Employee’s employment
immediately at any time for Cause, with or without advanced notice.
For purposes of this Agreement, “ Cause ” is
defined as a good faith determination of the Board, in its sole and
absolute discretion, of any of the following: (a) acts or
omissions constituting gross negligence, recklessness or willful
misconduct on the part of Employee; (b) Employee’s
material breach of this Agreement or the Confidentiality,
Inventions and Noncompetition Agreement between Northstar and
Employee (the “ Confidentiality Agreement ”);
(c) Employee’s conviction or entry of a plea of nolo
contendere for fraud, misappropriation or embezzlement, or any
felony or crime of moral turpitude; (d) Employee’s
willful or habitual neglect of duties; (e) Employee’s
failure to perform the essential functions of Employee’s
position, with or without reasonable accommodation, due to a mental
or physical disability; (f) sustained unsatisfactory
performance; or (g) Employee’s death. In the event
Employee’s employment is terminated in accordance with this
Section 7.2, Employee shall be entitled to receive only unpaid
base salary at the rate then in effect and accrued and unused paid
time off, each prorated to the date of termination, and Northstar
shall have no further or other obligations to Employee pursuant to
this Agreement.
7.3 Termination Without Cause or
Resignation for Good Reason Prior to a Change in Control . In
the event that, prior to a Change in Control (as defined in the
Northstar 2006 Performance Incentive Plan (the “
2006” Plan )), Employee is terminated by Northstar
other than for Cause or Employee resigns prior to a Change in
Control as a result of either: (i) a material adverse change
both in Employee’s duties and title, without Employee’s
consent, as measured against Employee’s title and duties
immediately prior to such change; or (ii) the office at which
Employee is required to report is relocated by more than fifty
(50) miles from Northstar’s present location, without
Employee’s consent (each, a “ Good Reason
”), Employee will receive Employee’s base salary then
in effect and accrued and unused paid time off, each prorated to
the date of termination or resignation, and, subject to the second
to last sentence of this Section 7.3: a severance payment
equivalent to Employee’s base salary for a period of six
(6) months, payable in accordance with Northstar’s
regular payroll cycle; vesting of an additional twelve
(12) months of Employee’s stock options from date of
termination or resignation; any earned bonus for which Employee was
eligible, prorated to the date of termination or resignation to be
paid out according to Northstar’s pay-out
schedule after Northstar is able to
determine whether a bonus is payable and, if so, the amount of such
prorated bonus; and should Employee timely elect COBRA insurance
continuation coverage and remain eligible for such
