Exhibit 10.1

 

AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT

 

This Amended and Restated Change of Control Agreement (the “Agreement”) is made
and entered into effective as of December 14, 2007, by and between Kathryn A.
Tunstall (the “Employee”) and Conceptus, Inc., a Delaware corporation (the
“Company”).

 

R E C I T A L S

 

A.            The Company and Employee entered into that certain Change of
Control Agreement effective as of May 13, 1997 (the “Original Agreement”) and
now wish to amend and restate the Original Agreement.

 

B.            It is expected that another company or other entity may from time
to time consider the possibility of acquiring the Company or that a change of
control may otherwise occur, with or without the approval of the Company’s Board
of Directors (the “Board”).  The Board recognizes that such consideration can be
a distraction to the Employee, the Chairman of the Board of the Company, and can
cause the Employee to consider alternative opportunities.  The Board has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication and objectivity of
the Employee, notwithstanding the possibility, threat or occurrence of a Change
of Control (as defined below) of the Company.

 

C.            The Board believes that it is in the best interests of the Company
and its stockholders to provide the Employee with an incentive to continue his
or her employment with the Company.

 

D.            The Board believes that it is imperative to provide the Employee
with certain benefits upon a Change of Control and, under certain circumstances,
upon termination of the Employee’s employment in connection with a Change of
Control, which benefits are intended to provide the Employee with financial
security and provide sufficient income and encouragement to the Employee to
remain with the Company notwithstanding the possibility of a Change of Control.

 

E.             To accomplish the foregoing objectives, the Board of Directors
has directed the Company, upon execution of this Agreement by the Employee, to
agree to the terms provided in this Agreement.

 

F.             Certain capitalized terms used in the Agreement are defined in
Section 4 below.

 

In consideration of the mutual covenants contained in this Agreement, and in
consideration of the continuing employment of Employee by the Company, the
parties agree as follows:

 

1.             At-Will Employment. The Company and the Employee acknowledge that
the Employee’s employment is and shall continue to be at-will, as defined under
applicable law.  If the Employee’s employment terminates for any reason,

 

 

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including (without limitation) any termination prior to a Change of Control, the
Employee shall not be entitled to any payments or benefits, other than as
provided by this Agreement, or as may otherwise be available in accordance with
the terms of the Company’s then existing employee plans and written policies in
effect at the time of termination.  The terms of this Agreement shall terminate
upon the earlier of (i) the date on which Employee ceases to be employed as the
Chairman of the Board of the Company, other than as a result of an involuntary
termination by the Company without Cause (ii) the date that all obligations of
the parties hereunder have been satisfied, or (iii) two (2) years after a Change
of Control. A termination of the terms of this Agreement pursuant to the
preceding sentence shall be effective for all purposes, except that such
termination shall not affect the payment or provision of compensation or
benefits on account of a termination of employment occurring prior to the
termination of the terms of this Agreement.

 

2.             Stock Options and other Equity Awards.  Subject to Sections 5 and
6 below, in the event of a Change of Control and regardless of whether
Employee’s employment with the Company is terminated in connection with the
Change of Control, each stock option or other equity award granted for the
Company’s securities held by the Employee shall become fully vested and
immediately exercisable and any contractual restrictions on transfer will
thereupon lapse on the effective date of the transaction and shall be
exercisable to the extent so vested in accordance with the provisions of the
Stock Option Agreement or other agreement and Stock Option Plan or other equity
plan pursuant to which such stock option or other equity award was granted.

 

3.             Change of Control.

 

(a)           Termination Following A Change of Control.  Subject to Section 5
and 6 below, if the Employee’s employment with the Company is terminated at any
time within two (2) years after a Change of Control, then the Employee shall be
entitled to receive severance benefits as follows:

 

(i)            Voluntary Resignation.  If the Employee voluntarily resigns from
the Company (other than as an Involuntary Termination (as defined below) or if
the Company terminates the Employee’s employment for Cause (as defined below)),
then the Employee shall not be entitled to receive severance payments.  Subject
to Section 3(b), the Employee’s benefits will be terminated under the terms of
the Company’s then existing benefit plans and policies in accordance with such
plans and policies in effect on the date of termination or as otherwise
determined by the Board of Directors of the Company.

 

(ii)           Involuntary Termination.  If the Employee’s employment is
terminated as a result of an Involuntary Termination other than for Cause, the
Employee shall be entitled to receive the following benefits:  (i) severance
payments during the period from the date of the Employee’s termination until the
date 18 months after the effective date of the termination (the “Severance
Period”) equal to the salary which the Employee was receiving at the time of
such termination, which payments shall be paid in substantially equal bi-weekly
installments during the Severance Period; (ii) 

 

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continuation of all health and life insurance benefits through the end of the
Severance Period substantially identical to those to which the Employee was
entitled immediately prior to the termination, or to those being offered to
officers of the Company, or a successor corporation, if the Company’s benefit
programs are changed during the Severance Period (and the Employee shall be
eligible to invoke her rights under Section 3(b) thereafter); and
(iii) reimbursement for additional health care premiums during or after the
Severance Period and not already covered by clause (ii) with a total value not
to exceed $15,000.  For purposes of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”) (including, without limitation, for purposes of
Treasury Regulation Section 1.409A-2(b)(2)(iii)), the Employee’s right to
receive the installment payments above shall be treated as a right to receive a
series of separate payments and, accordingly, each installment payment shall at
all times be considered a separate and distinct payment.

 

(iii)          Involuntary Termination for Cause.  If the Employee’s employment
is terminated for Cause, then the Employee shall not be entitled to receive
severance payments.  The Employee’s benefits will be terminated under the
Company’s then existing benefit plans and policies in accordance with such plans
and policies in effect on the date of termination.

 

(b)           Termination Apart from A Change of Control; Health Care Coverage. 
In the event the Employee’s employment terminates for any reason, either prior
to the occurrence of a Change of Control or after the two year period following
the effective date of a Change of Control, then the Employee shall not be
entitled to receive any severance payments under this Agreement.  The Employee’s
benefits will be terminated under the terms of the Company’s then existing
benefit plans and policies in accordance with such plans and policies in effect
on the date of termination or as otherwise determined by the Board of Directors
of the Company.  Notwithstanding the foregoing but not in diminution of any
other provision of this Agreement, if the Employee’s employment with the Company
terminates at anytime due to Employee’s retirement or for any other reason, then
at the Employee’s request, the Company shall use its best efforts to make health
care benefits coverage available to the Employee, and if the Employee elects
such coverage, the Employee shall pay the incremental out-of-pocket costs
incurred by the Company in connection with obtaining such coverage for the
Employee.

 

4.             Definition of Terms.  The following terms referred to in this
Agreement shall have the following meanings:

 

(a)           Change of Control.  “Change of Control” shall mean the occurrence
of any of the following events:

 

(i)            Ownership.  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 twenty percent
(20%) or more of the

 

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total voting power represented by the Company’s then outstanding voting
securities without the approval of the Board of Directors of the Company; or

 

(ii)           Merger/Sale of Assets.  A merger or consolidation of the Company
whether or not approved by the Board of Directors 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) at least 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 an
agreement for the sale or disposition by the Company of all or substantially all
of the Company’s assets.

 

(iii)          Change in Board Composition.  A change in the composition of the
Board of Directors of the Company, as a result of which fewer than a majority of
the directors are Incumbent Directors. “Incumbent Directors” shall mean
directors who either (A) are directors of the Company as of May 13, 1997 or
(B) are elected, or nominated for election, to the Board of Directors of the
Company with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but shall not include an
individual whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of directors to the Company).

 

(b)           Cause.  “Cause” shall mean (i) gross negligence or willful
misconduct in the performance of the Employee’s duties to the Company where such
gross negligence or willful misconduct has resulted or is likely to result in
substantial and material damage to the Company or its subsidiaries,
(ii) repeated unexplained or unjustified absence from the Company, (iii) a
material and willful violation of any federal or state law; (iv) commission of
any act of fraud with respect to the Company; or (v) conviction of a felony or a
crime involving moral turpitude causing material harm to the standing and
reputation of the Company, in each case as determined in good faith by the Board
of Directors of the Company.

 

(c)           Involuntary Termination.  “Involuntary Termination” means the
Employee’s Separation from Service (as defined below)  with the Company other
than for Cause and the Employee’s Separation from Service with the Company by
reason of resignation, upon 30 days prior written notice to the Company,
following (i) any material reduction of the Employee’s base compensation (other
than in connection with a general decrease in base salaries for most similarly
situated employees of the successor corporation); or (ii) a material change in
the geographic location at which the Employee performs services for the
Company.  The Employee’s Separation from Service by reason of resignation from
employment with the Company shall be an “Involuntary Termination” only if the
Employee provides notice to the Company of the condition giving rise to her
Involuntary Termination within 90 days after the initial existence of such
condition.

 

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(d)           “Separation from Service” with respect to the Employee means the
Employee’s “separation from service” as  defined in the Treasure Regulation
Section 1.409A-1(h).

 

5.             Limitation on Payments.  To the extent that any of the payments
or benefits provided for in this Agreement to the Employee constitute “parachute
payments” within the meaning of Section 280G of the Code and, but for this
Section 5, would be subject to the excise tax imposed by Section 4999 of the
Code, the Company shall reduce the aggregate amount of such payments and
benefits such that the present value thereof (as determined under the Code and
the applicable regulations) is equal to 2.99 times the Employee’s “base amount”
as defined in Section 280G(b)(3) of the Code.

 

6.             Successors.  Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company’s business and/or assets
shall assume the obligations under this Agreement and agree expressly to perform
the obligations under this Agreement in the same manner and to the same extent
as the Company would be required to perform such obligations in the absence of a
succession.  The terms of this Agreement and all of the Employee’s rights
hereunder shall inure to the benefit of, and be enforceable by, the Employee’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

 

7.             Notice.  Notices and all other communications contemplated by
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by U.S. registered or certified mail,
return receipt requested and postage prepaid.  Mailed notices to the Employee
shall be addressed to the Employee at the home address which the Employee most
recently communicated to the Company in writing.  In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.

 

8.             Miscellaneous Provisions.

 

(A)           NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IF AT
THE TIME OF THE EMPLOYEE’S TERMINATION OF EMPLOYMENT WITH THE COMPANY, THE
EMPLOYEE IS A “SPECIFIED EMPLOYEE” AS DEFINED IN CODE SECTION 409A, AS
DETERMINED BY THE COMPANY IN ACCORDANCE WITH SECTION 409A OF THE CODE, AND THE
DEFERRAL OF THE COMMENCEMENT OF ANY PAYMENTS OR BENEFITS OTHERWISE PAYABLE
HEREUNDER AS A RESULT OF SUCH TERMINATION OF EMPLOYMENT IS NECESSARY IN ORDER TO
PREVENT ANY ACCELERATED OR ADDITIONAL TAX UNDER SECTION 409A OF THE CODE, THEN
THE COMPANY WILL DEFER THE COMMENCEMENT OF THE PAYMENT OF ANY SUCH PAYMENTS OR
BENEFITS HEREUNDER (WITHOUT ANY REDUCTION IN THE PAYMENTS OR BENEFITS ULTIMATELY
PAID OR PROVIDED TO EMPLOYEE) UNTIL THE DATE THAT IS AT LEAST SIX (6) MONTHS
FOLLOWING THE EMPLOYEE’S TERMINATION OF EMPLOYMENT WITH THE COMPANY (OR THE
EARLIEST DATE PERMITTED UNDER SECTION 409A OF THE CODE), WHEREUPON THE COMPANY
WILL PAY THE EMPLOYEE A LUMP-SUM AMOUNT EQUAL TO THE CUMULATIVE AMOUNTS THAT
WOULD HAVE OTHERWISE BEEN PREVIOUSLY PAID TO THE EMPLOYEE UNDER THIS AGREEMENT
DURING THE PERIOD IN WHICH SUCH PAYMENTS OR

 

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BENEFITS WERE DEFERRED.  THEREAFTER, PAYMENTS WILL RESUME IN ACCORDANCE WITH
THIS AGREEMENT.

 

(B)           NO DUTY TO MITIGATE.  THE EMPLOYEE SHALL NOT BE REQUIRED TO
MITIGATE THE AMOUNT OF ANY PAYMENT CONTEMPLATED BY THIS AGREEMENT (WHETHER BY
SEEKING NEW EMPLOYMENT OR IN ANY OTHER MANNER), NOR, EXCEPT AS OTHERWISE
PROVIDED IN THIS AGREEMENT, SHALL ANY SUCH PAYMENT BE REDUCED BY ANY EARNINGS
THAT THE EMPLOYEE MAY RECEIVE FROM ANY OTHER SOURCE.

 

(e)           Waiver.  No provision of this Agreement shall be modified, waived
or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Employee and by an authorized officer of the Company
(other than the Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.

 

(f)            Whole Agreement.  No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof.  This Agreement
supersedes any agreement of the same title and concerning similar subject matter
dated prior to the date of this Agreement, including the Original Agreement, and
by execution of this Agreement both parties agree that any such predecessor
agreement shall be deemed null and void.

 

(g)           Choice of Law.  The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California without reference to conflict of laws provisions.

 

(h)           Severability.  If any term or provision of this Agreement or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining terms and
provisions of this Agreement or the application of such terms and provisions to
circumstances other than those as to which it is held invalid or unenforceable,
and a suitable and equitable term or provision shall be substituted therefor to
carry out, insofar as may be valid and enforceable, the intent and purpose of
the invalid or unenforceable term or provision.

 

(i)            Arbitration.  Any dispute, claim or controversy based on, arising
out of or relating to the Employee’s employment or this Agreement shall, at the
option of either party hereto, be settled by final and binding arbitration in
San Clara County, California, before a single neutral arbitrator in accordance
with the National Rules for the Resolution of Employment Disputes (the “Rules”)
of the American Arbitration Association, and judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction.  Arbitration may
be compelled pursuant to the California Arbitration Act (Code of Civil Procedure
§§ 1280 et seq.).  If the parties are unable to agree upon an arbitrator, one
shall be appointed by the AAA in accordance with

 

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its Rules.  Each party shall pay the fees of its own attorneys, the expenses of
its witnesses and all other expenses connected with presenting its case;
however, the Employee and the Company agree that, to the extent permitted by
law, the arbitrator may, in his discretion, award reasonable attorneys’ fees to
the prevailing party.  Other costs of the arbitration, including the cost of any
record or transcripts of the arbitration, AAA’s administrative fees, the fee of
the arbitrator, and all other fees and costs, shall be borne by the Company.  If
either of the parties hereto elect to submit a dispute, claim or controversy to
arbitration in accordance with this Section 8(i), this Section 8(i) is intended
to be the exclusive method for resolving any and all claims by the parties
against each other for payment of damages under this Agreement or relating to
the Employee’s employment; provided, however, that neither this Agreement nor
the submission to arbitration shall limit the parties’ right to seek provisional
relief, including, without limitation, injunctive relief, in any court of
competent jurisdiction pursuant to California Code of Civil Procedure § 1281.8
or any similar statute of an applicable jurisdiction.  Seeking any such relief
shall not be deemed to be a waiver of such party’s right to compel arbitration.
Pursuant to California Civil Code Section 1717, each party warrants that it was
represented by counsel in the negotiation and execution of this Agreement,
including the attorneys’ fees provision herein

 

(j)            Legal Fees and Expenses.  The parties shall each bear their own
expenses, legal fees and other fees incurred in connection with this Agreement.

 

(k)           No Assignment of Benefits.  The rights of any person to payments
or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor’s process, and any action in violation of this subsection (i) shall be
void.

 

(l)            Employment Taxes.  All payments made pursuant to this Agreement
will be subject to withholding of applicable income and employment taxes.

 

(m)          Assignment by Company.  The Company may assign its rights under
this Agreement to an affiliate, and an affiliate may assign its rights under
this Agreement to another affiliate of the Company or to the Company; provided,
however, that no assignment shall be made if the net worth of the assignee is
less than the net worth of the Company at the time of assignment. In the case of
any such assignment, the term “Company” when used in a section of this Agreement
shall mean the corporation that actually employs the Employee.

 

(n)           Counterparts.  This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.

 

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year first
above written.

 

CONCEPTUS, INC.

KATHRYN A. TUNSTALL

 

 

/s/ Mark Sieczkarek

/s/ Kathryn A. Tunstall

 

 

By:

Mark Sieczkarek

 

 

 

Title:

President and Chief Executive Officer

 

 

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