Eclipse Surgical Technologies, Inc.
1049 Kiel Court
Sunnyvale, CA 94089
October 16, 2000
Mr. Michael J. Quinn
25 Oakbrook
Coto de Caza, CA 92679
Dear Mike:
On behalf of Eclipse Surgical Technologies, Inc. ("Company"), I am
pleased to offer you the position of Chief Executive Officer, reporting to the
Board of Directors, subject to our satisfactory review of your references. As
Chief Executive Officer, you will be responsible for the day-to-day management
of the Company.
You will receive a monthly salary of $27,500, which will be paid
semimonthly in accordance with the Company's normal payroll procedures. This is
an exempt position. As a Company employee, you are also eligible to receive all
employee benefits offered by the Company to its other employees in similar
positions, when such employee benefits are established. The Company retains the
right to modify or change its benefits and compensation policy from time to time
as it deems necessary.
It will be recommended to the Board of Directors that they approve a
bonus of 35% of your salary to be paid to you for the year ended December 31,
2001, contingent upon your achieving the objectives defined in Exhibit A.
Furthermore, the Board of Directors will be open to a discussion during the
latter part of 2001, based upon your performance, to further expansion of the
bonus opportunity.
Upon your acceptance of full time employment with the Company, it will
also be recommended to the Board of Directors that that you be granted an option
to purchase 700,000 shares of the Company's Common Stock pursuant to the terms
of the Company's Stock Option Plan (the "Option"). The exercise price of options
under the Company's Stock Option Plan is the fair market value on the date of
the option grant. The Option shall vest over a three (3) year period with
one-thirty sixth (1/36) of the total number of shares subject to the Option
vesting for each month of employment, beginning on your first day of employment,
provided that your employment with the Company shall not have terminated for any
reason (including death or Disability (as defined below)) prior to any such
vesting date. Notwithstanding the foregoing:
(i) Should your employment with the Company terminate for any reason
other than for "Cause" (as defined below) or voluntary termination
after the first year of your employment with the Company, the Company
will pay you six months of salary, andthe vesting on your Option and
any subsequent options granted to you shall accelerate as to an
additional twelve (12) months of vesting on your options; and
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Michael J. Quinn
October 16, 2000
(ii) In the event of a "Change in Control" (as defined below)
and either (a) your employment is terminated other than for "Cause" (as
defined below) or (b) a "Constructive Termination" (as defined below)
occurs, within twelve months of such Change in Control, then all
unvested shares subject to the Option shall accelerate and become fully
exercisable and vested; provided however, if this acceleration in the
event of a Change of Control set forth in this subsection (ii), as
reasonably determined by the Company and its independent public
auditors, would not allow the Company or a third party acquiring the
Company, to account for a merger or similar transaction as a pooling of
interests, this subsection (ii) shall be of no force and effect.
For this purpose, "Cause" is defined as: (i) an act of
dishonesty made by you in connection with your responsibilities as an employee
that causes serious reputational harm to the Company, (ii) your conviction of,
or plea of nolo contendere to, a felony, (iii) your gross misconduct, or (iv)
your failure to perform in any material respect any material aspect of your
employment duties as defined by the Board.
For this purpose, "Change of Control" of the Company is defined as: (i)
any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities of
the Company representing 50% or more of the total voting power represented by
the Company's then outstanding voting securities; or (ii) the date of the
consummation of a merger or consolidation of the Company with any other
corporation that has been approved by the stockholders of the Company, other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve a plan of complete liquidation of the Company; or (iii)
the date of the consummation of the sale or disposition by the Company of all or
substantially all of the Company's assets.
For this purpose, "Constructive Termination" is defined as (i) a
material reduction in your responsibilities, duties, or base pay or (ii)
relocation of your workplace to any place more than 50 miles from the Company's
current headquarters in Sunnyvale, California. .
For this purpose, "Disability" occurs upon both of the following
conditions being met: (i) your becoming unable to perform the essential
functions of your job with or without a reasonable accommodation, and (ii) 90
days following written notice by the Company to you of such determination by an
independent physician acceptable to the Board and to you (which acceptance will
not be unreasonably withheld), provided, however, that if you resume work on a
regular basis prior to the end of such 90 day period, you shall not be deemed to
have a "Disability."
The Company understands that you will incur expenses in connection with
your temporary apartment residence within 30 miles of the Company's headquarters
in Sunnyvale (the "South Bay Area"). The Company will pay you a fixed sum of
$3,500 per month to cover all expenses, for up to up to 24 months.
The Company agrees to reimburse you in an amount equal to the amount
needed to pay any increased income tax, owed by you which is directly
attributable to the $3,500 fixed sum described in the paragraph above.
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Michael J. Quinn
October 16, 2000
The Company would also allow any of the unused $84,000 to be applied to
your re-location expenses, at any time that you and your family decide to move
permanently to the South Bay Area, provided that you are still an employee of
the Company.
You should be aware that your employment with the Company constitutes
"at-will" employment. This means that your employment relationship with the
Company may be terminated at any time with or without notice, with or without
good cause or for any or no cause, at either party's option. You understand and
agree that neither your job performance nor promotions, commendations, bonuses
or the like from the Company give rise to or in any way serve as the basis for
modification, amendment, or extension, by implication or otherwise, of your
employment with the Company. If your employment is terminated at any time, other
than for Cause or voluntary termination, you will receive a lump sum payment
equal to six (6) months of your then current monthly salary, subject to
applicable withholdings.
As a condition of your employment with the Company, you will be
required to sign the Company's standard Proprietary Agreement ("Agreement"), two
originals of which are attached.
For purposes of Federal Immigration law, you will be required to
provide to the Company documentary evidence of your identity and eligibility for
employment in the United States. Such documentation must be provided to us
within three (3) business days of your date of hire, or our employment
relationship with you may be terminated.
By signing this letter you hereby represent to the Company that (i)
except as previously disclosed to the Company: (a) your employment with the
Company is not prohibited under any employment agreement or other contractual
arrangement, and (b) you do not know of any conflicts which would restrict your
employment with the Company, and (ii) you agree not to bring with you to your
employment any confidential or proprietary information belonging to any previous
employers.
This offer is valid through October 17, 2000, and is contingent on your
starting employment by October 24, 2000 (or a later date, mutually agreed to by
you and the Company). We look forward to your early acceptance and would be
pleased to have you start as soon as your present commitments allow. Enclosed
are two originals of this letter. Please sign and return one to me, to indicate
your acceptance.
Sincerely,
Alan L. Kaganov, Sc.D.
Chief Executive Officer
I accept employment with Eclipse Surgical Technologies, Inc., subject to the
terms and conditions hereof. I understand that the terms set forth in this
letter supersede all oral or written discussions I have had, or may have, with
anyone in the Company regarding the subject matter hereof.
AGREED AND ACCEPTED
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Michael J. Quinn
October 16, 2000
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Michael J. Quinn
Date:
Encl.
Attachments - Bonus Plan; Eclipse standard Proprietary Agreement
Exhibit A
Eclipse Surgical Technologies CY 2001
Mike Quinn Bonus Plan
Target Payout of Bonus Plan @ 35%
Projected Payout at 100% - $115,500.
(1) Requires 6 months of ability to market and sell (based on FDA approval prior
to Q2 '01 and adequate product availability)
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Objective Weight Subweight Cash Payout
--------- ------ -------- -----------
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Financial 100%
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Revenue of $40 M (1) 75% 1.0 $86,250
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Net Loss (Q3+Q4)=$0.00 25% 1.0 $28,750
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