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EXHIBIT
10.4
EMPHASYS MEDICAL,
INC.
EMPLOYMENT
AGREEMENT
This Employment Agreement
(the “ Agreement ”) is made and entered into as
of August 6, 2007 (the “ Effective Date ”),
by and between Emphasys Medical, Inc., a Delaware corporation (the
“ Company ”), and John G. McCutcheon (“
Employee ”).
A. The Company and Employee
mutually desire to enter into this Agreement, which will supersede
any and all existing agreements with respect to the subject matter
hereof and to restate the Company’s obligations with respect
to any termination of Employee’s employment relationship with
the Company.
B. Certain capitalized terms
used in the Agreement are defined in Section 5
below.
The parties hereto agree as
follows:
1. TERM OF AGREEMENT .
This Agreement shall terminate upon the date that all obligations
of the parties hereto with respect to this Agreement have been
satisfied.
2. AT-WILL EMPLOYMENT
. The Company and Employee acknowledge that Employee’s
employment is and shall continue to be at-will, as defined under
applicable law. If Employee’s employment is terminated for
any reason, Employee shall not be entitled to any benefits,
damages, awards or compensation other than as expressly set forth
herein or as may otherwise be available in accordance with the
Company’s established employee plans and
practices.
3. SEVERANCE
BENEFITS.
(a) Subject to
Section 4 below, in the event of the Involuntary Termination
or Constructive Termination (as such terms are defined in
Section 5 below) of Employee’s employment relationship
with the Company (or its successor), Employee will be entitled to
continue to receive his base salary for a period of six months (the
“ Severance Period ”). Any such payments shall
be made ratably over the Severance Period according to the
Company’s standard payroll schedule.
(b) During the
Severance Period, the Company shall provide to Employee continued
coverage under such long-term disability, medical and dental plans
as in effect for senior level executives of the Company (or
substantially comparable coverage) for Employee and, where
applicable, Employee’s spouse, dependents and beneficiaries,
at the same contribution or premium rate as may be charged from
time to time for active employees of the Employer generally, as if
Employee had continued in employment during such period. The COBRA
health care continuation coverage period under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“
COBRA ”) and the Company’s applicable benefit
plans, shall commence immediately after the Severance
Period.
(c) The
Company’s obligation to provide the benefits set forth in
this Section 3 shall be conditioned upon the Employee’s
execution and delivery to the Company of a general release of
claims in form and substance satisfactory to the Company and its
counsel and the effectiveness of such release.
(d) Notwithstanding
the foregoing, in the event that Employee commences a New
Employment Relationship (as defined below) during the Severance
Period, Employee shall provide written notice to the Company at
least 10 calendar days prior to commencing such employment.
The
Severance Period will automatically
terminate upon the commencement of the New Employment Relationship,
and the Company’s obligations to provide the severance
benefits set forth in subsections (a) and (b) shall
terminate.
(e) In the event that
Employee’s employment is terminated, and such termination is
not an Involuntary Termination or Constructive Termination, then
Employee shall not be entitled to receive any benefits except for
those (if any) as may then be established under the Company’s
then existing benefits plans and practices.
(f) The parties
acknowledge and agree that nothing in this Agreement shall affect
the vesting provisions of any stock options held by Employee (or
Common Stock subject to the Company’s right of repurchase),
and that such stock options and/or Common Stock shall vest in
accordance with their terms, including, without limitation, any
provisions providing for acceleration of vesting upon the
termination of Employee’s employment relationship with the
Company under certain circumstances.
4. LIMITATION ON
PAYMENTS . In the event that the severance and other benefits
provided for in this Agreement or otherwise payable to Employee
(i) constitute “parachute payments” within the
meaning of Section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”), and (ii) but for this
Section 4, would be subject to the excise tax imposed by
Section 4999 of the Code (or any corresponding provisions of
state income tax law), then Employee’s severance benefits
under Section 3(a) or (b) shall be either
(a) delivered in full,
or
(b) delivered as to such
lesser extent which would result in no portion of such severance
benefits being subject to excise tax under Section 4999 of the
Code, whichever of the foregoing amounts, taking into account the
applicable federal, state and local income taxes and the excise tax
imposed by Section 4999, results in the receipt by Employee on
an after-tax-basis, of the greater amount of severance
benef
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