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Severance Agreement and Release

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Title:

Severance Agreement and Release

Entities:

Curon Medical, Inc.

Date:

2002

Size:

Preview shows 8KB of 25KB total

Price:

$40

ID:

#939562

► Legal ► Releases ► Agreements ► Severance Agreements & Release
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SEVERANCE AGREEMENT AND RELEASE

RECITALS

This Severance Agreement and Release (Agreement) is made by and between John W. Morgan (Employee) and Curon Medical, Inc. (Company) (collectively referred to as the Parties):

WHEREAS, Employee was employed by the Company;

WHEREAS, the Company and Employee entered into an Employee Proprietary Information Agreement (the Confidentiality Agreement);

WHEREAS, the Company and Employee executed an offer letter dated September 28, 1999, in which the Company agreed to loan Employee Eight Thousand Five Hundred Dollars per month for a four-year period (the Offer Letter);

WHEREAS, the Company and Employee have entered into a Stock Option Agreement, dated October 27, 1999 in which Employee was granted the option to purchase 325,000 shares (post-split, 185,250 shares) of Company stock (the Option Agreement), and a Stock Option Agreement dated October 27, 1999 in which Employee was granted the option to purchase 650,000 shares (post-split, 370,500 shares) of Company stock and a related Restricted Stock Purchase Agreement, pursuant to which the Employee purchased 650,000 shares (post-split, 370,500 shares) of the Companys common stock, subject to the terms and conditions of the Companys 1997 Stock Option Plan and the Restricted Stock Purchase Agreement (the Restricted Stock Agreement), and further subject to the Companys Repurchase Option, as set forth in the Restricted Stock Purchase Agreement (the Repurchase Option) (all stock agreements collectively referred to herein as the Stock Agreements);

WHEREAS, Employees employment with Company was terminated on or about July 17, 2002 (the Termination Date);

WHEREAS, the Parties, and each of them, wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions and demands that the Employee may have against the Company as defined herein, including, but not limited to, any and all claims arising or in any way related to Employees employment with, or separation from, the Company;

NOW THEREFORE, in consideration of the promises made herein, the Parties hereby agree as follows:

COVENANTS

1. Consideration.

(a) The Company agrees to pay Employee a lump sum of Two Hundred Seventy Five Thousand Dollars ($275,000), less applicable withholding. This payment will be made to Employee

within ten (10) business days after the Effective Date (as defined in Section 27, below) by direct deposit into the Employee account that the Company has on file.

(b) Stock. The Parties agree that for purposes of determining the number of shares of the Companys common stock which have been released from the Companys Repurchase Option under the Restricted Stock Agreement (the Released Shares) the Employee shall be considered to have vested in and the Companys Repurchase Option shall be considered to have been terminated as to 100% of the total shares subject to the Restricted Stock Agreement and purchased by the Employee (post-split, 370,500 shares). Employee agrees that, within 90 days of the Termination Date, he will purchase no more than 69,469 shares (post-split) under the Option Agreement, at a purchase price of 26.3 cents ($0.263) per share. All shares, including those no longer subject to the Repurchase Option, shall continue to be subject to all other terms of the Stock Agreements. Employee shall be entitled to no additional stock; though Employee has been granted additional options, Employee acknowledges that such options will terminate unexercised.

(c) Benefits. Employees health insurance benefits will cease at the end of July, subject to Employees right to continue his/her health insurance under COBRA. Employees participation in all other benefits and incidents of employment ceased on the Termination Date. Employee ceased accruing employee benefits, including, but not limited to, vacation time and paid time off, as of the Termination Date.

(d) Loan Forgiveness. The Company agrees that it shall forgive Employees obligation to repay any outstanding loan amounts pursuant to the Offer Letter as of the Effective Date.

(e) Computer. The Company agrees that Employee shall give Employee his Company computer following the Company examination of the computer. Employee agrees that he will turn the computer over to the Company prior to the Effective Date, so that the Company may engage in the examination, and Company agrees to return the computer to Employee as soon as reasonably possible following their performance of the examination. The Company reserves the right to remove all files from the computer that are the property of the Company.

2. Confidential Information. Employee shall continue to maintain the confidentiality of all confidential and proprietary information of the Company and shall continue to comply with the terms and conditions of the Confidentiality Agreement between Employee and the Company. Employee shall return all of the Companys property and confidential and proprietary information in his/her possession to the Company on the Effective Date of this Agreement.

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