Exhibit 10.1

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (“Agreement”) made and entered into as of the 5th day of
January 2007, by and between Atricure, Inc. (the “Company”), with principal
offices located at 6033 Schumacher Park Drive, West Chester, Ohio 45609 and
Julie A. Piton (the “Executive”) currently residing at 3058 Harbor Winds Drive,
Suamico, Wisconsin 54173.

WITNESSETH:

WHEREAS, the Company desires to employ the Executive and the Executive desires
to become employed by the Company;

WHEREAS, the Company and the Executive desire to enter into this Agreement,
which, effective as of the date hereof (the “Effective Date”), shall govern the
terms of the Executive’s employment;

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
below and other good and valuable consideration, the receipt of which is hereby
acknowledged, the Company and the Executive hereby agree, as follows:

1. Employment. The Company hereby employs the Executive as Vice President of
Finance and Administration and Chief Financial Officer of the Company with the
duties and responsibilities set forth in Section 4.

2. Term; Start Date. The term of Executive’s employment hereunder shall commence
on the Effective Date and shall end on that date on which such employment shall
be terminated under the provisions of Section 8 hereof. Such term, regardless of
the length thereof, shall be referred to herein as the “Employment Term”. For
purposes of this Agreement, the term “Contract Year” shall refer to each twelve
(12) month period beginning on the day and month of the Effective Date and
ending on the day immediately preceding the yearly anniversary of the Effective
Date. Notwithstanding the above, the parties agree that the Executive shall
begin to actually render services hereunder, and accordingly begin to earn her
Base Salary (as defined below) hereunder, on such date, on or prior to
January 23, 2007 as the Executive shall hereafter designate in a notice to the
Company (such designated date being the “Start Date”).

3. Work Location. The Executive’s principal place of employment shall be in West
Chester, Ohio or within a fifty (50)-mile radius of the Company’s current
principal office at 6033 Schumacher Park Drive. This Agreement requires the
Executive to relocate within a fifty (50)-mile radius of the Company’s current
principal office within 6 months of the Start Date (the “Relocation Period”).

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4. Duties and Responsibilities.

(a) Description. The Executive shall be employed by the Company in such capacity
or capacities, and shall perform such duties and exercise such powers, as are
(i) commensurate with a Vice President of Finance and Administration and Chief
Financial Officer of a business of comparable size and type and (ii) consistent
with her title, subject to such directions and restrictions as the Board of
Directors or the Chief Executive Officer and President of the Company may from
time to time designate. The Executive shall report to (A) the Chief Executive
Officer and (B) if, as and when requested by the Chief Executive Officer or the
Board of Directors with respect to a particular matter, to the Board of
Directors.

(b) Time and Effort. The Executive shall:

(i) devote her full working time and attention to the business and affairs of
the Company, its subsidiaries and other affiliates and shall not, without the
prior consent in writing of the Company, directly or indirectly, undertake any
other business or occupation or become an employee, agent or director (or a
person acting in a capacity similar to that of a director) of, or a consultant
to, any other company, trust, firm, individual or person. Nothing herein shall
be construed so as to prevent the Executive from making investments of a
strictly passive nature, so long as the undertaking forming the subject matter
of any such investment is not otherwise in conflict with the Executive’s
contractual or other legal obligations to the Company;

(ii) perform those duties that may be assigned by the Board of Directors or the
Chief Executive Officer of the Company to the Executive diligently and
faithfully to the best of the Executive’s abilities and in the best interests of
the Company and its affiliates; and

(iii) use her best efforts to promote the interests of the Company and its
affiliates.

(c) Non-Disclosure Agreement. Nothing in this Agreement is intended to impair or
be in derogation of the Executive’s obligations under that certain
Non-Competition, Proprietary Information and Inventions Agreement, executed by
the Executive in connection with her employment hereunder (the “Non-Disclosure
Agreement”).

5. Compensation.

(a) Base Salary. The Company shall pay the Executive a base salary at the rate
of two hundred twenty-five thousand dollars ($225,000) per year (as in effect
from time to time in accordance with the provisions below, the “Base Salary”),
payable in accordance with the Company’s payroll procedures, subject to all
withholdings provided for in Section 11. The Company shall review the Base
Salary annually for merit increases, which shall be made subject to and at

 

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the sole and absolute discretion of the Board of Directors or, if the Board
shall so elect, the Compensation Committee thereof. Once increased, the Base
Salary shall not thereafter be decreased.

(b) Bonus. The Executive shall receive such year-end annual bonus, if any, to
which she may be entitled under such Management Incentive Program (or similar
plan) as the Company may adopt with respect to each fiscal year of the Company,
subject to the terms, plans, qualifications and conditions of any such plan. The
full potential of the year-end annual bonus is a minimum of 30% of the Base
Salary and shall be paid in accordance with the Company’s procedures for its
year end Management Incentive Program (or similar plan).

(c) Stock Options. The Executive will be granted an option to purchase one
hundred thousand (100,000) shares of the Company’s common stock under the
Company’s 2005 Equity Incentive Plan (the “Incentive Plan”) at a per-share
exercise price equal to the fair market value of the Company’s common stock on
the date of grant, all as determined under the Incentive Plan.

6. Other Benefits. The Executive shall also be entitled to the following:

(a) Employee Benefit Plans. The Executive shall also be entitled to such
benefits, and to participate in such benefit plans, as may be in effect from
time to time and generally available to senior executive officers of the Company
(and subject in any event to the participation standards and other terms and
conditions of any such benefits or plans).

(b) Vacation. The Executive shall be entitled to four (4) weeks of vacation each
year in accordance with the Company policies. The Executive’s vacations will be
scheduled at such times as will least interfere with the business of the
Company.

7. Reimbursement of Expenses.

(a) General. The Company shall reimburse the Executive for such expenses as may
be reasonably incurred by the Executive in furtherance of the Executive’s
performance of her duties hereunder, subject to and in accordance with the
Company policies concerning reimbursement of such expenses and provided, in any
event, that the Executive timely furnishes to the Company a complete and
accurate accounting of all such, expenses.

(b) Relocation Expenses.

(i) General; Gross-Up. The Company will reimburse the Executive, in an amount up
to one-hundred thousand dollars ($100,000), for out-of-pocket expenses, of the
types described below, incurred by her in connection with her relocation to the
greater Cincinnati area, provided that the Executive timely furnishes to the
Company a complete and accurate accounting of

 

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all such expenses. The out-of-pocket expenses which are reimbursable under this
Section 7(b)(i) are: (A) reasonable out-of-pocket expenses associated with two
house-hunting trips, (B) temporary housing costs, incurred during the Relocation
Period, which are pre-approved by the Company, (C) pre-approved travel expenses
incurred by Executive, during the Relocation Period, in connection with
traveling back and forth between Suamico and Cincinnati, (D) real estate
broker’s commissions, (E) reasonable legal fees on the sale of the Executive’s
current residence and the purchase of a new residence and (F) reasonable
expenses incurred in connection with the transportation of personal property. In
addition, in the event and to the extent that the reimbursements to the
Executive under this Section 7(b)(i) are taxable to her as income under
applicable federal and/or state law, the Company will pay to the Executive an
additional, so called “gross-up”, amount designed to make the Executive’s net
outlay for the expenses referred to above, after giving effect to applicable
taxes, zero.

(ii) Repayment. In the event that the Executive voluntarily terminates her
employment with the Company for any reason whatsoever (other than “Good Reason”,
as defined below) during the two (2) year period following the Effective Date,
the Executive will repay to the Company, within thirty (30) days after the
Termination Date (as defined below), a portion of the total sum previously
reimbursed to the Executive under Section 7(b)(i) as follows:

 

If the Termination Date occurs any time during the:

   Percentage to be
repaid to Company:  

First Contract Year

   75 %

Second Contract Year

   50 %

8. Termination of Employment. The Executive’s employment hereunder shall or may,
as the case may be, be terminated under the following circumstances:

(a) Death. The Executive’s employment hereunder shall terminate upon her death.

(b) Total Disability. The Company may terminate the Executive’s employment
hereunder upon the Executive becoming “Totally Disabled.” For purposes of this
Agreement, the Executive shall be deemed “Totally Disabled” if (i) she is deemed
“totally disabled” (or other words to such effect) under any long-term
disability plan maintained by the Company or (ii) she is unable, by reason of
physical or mental disability, to perform, in all material respects (with due
consideration for the availability of reasonable accommodations), her duties and
responsibilities under this Agreement for either one substantially continuous
period of four (4) months or a total of six (6) months in any given period of
nine (9) months. If requested by the Company, the Executive shall submit to one
or more examinations by one or more physicians selected by the Company in
connection with the Company’s attempts to determine whether the Executive is
Totally Disabled.

 

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(c) Termination by the Company for Cause. The Company may immediately terminate
the Executive’s employment hereunder for Cause at any time by notice given to
the Executive. For purposes of this Agreement, the term “Cause” shall mean any
of the following: (i) the commission by the Executive of a felony, or of any
criminal act involving moral turpitude, which results in a conviction; (ii) the
deliberate and material failure or refusal by the Executive to perform,
consistent with the terms of this Agreement her employment duties hereunder
(other than as a result of vacation, sickness, illness or injury), and the
failure to rectify the same within thirty (30) days after the Company shall have
given notice to the Executive identifying such failure or refusal and demanding
that it be rectified; (iii) the Executive’s commission of any act of fraud,
embezzlement, dishonesty or other willful misconduct that has caused, or would
reasonably be expected to cause, material injury to the Company; (iv) an act of
gross negligence on the part of the Executive that has caused, or would
reasonably be expected to cause, material injury to the Company; (v) a
deliberate and material violation of a written Company policy; or (vi) a
material breach of this Agreement or the Non-Disclosure Agreement (or, in each
case, any successor thereto or amendment thereof) which (and only if the same
shall be curable) Executive fails to cure within thirty (30) days after the
Company shall have given notice to the Executive identifying such breach and
demanding that it be cured.

(d) Termination by the Executive for Good Reason. The Executive may immediately
terminate her employment hereunder for Good Reason at any time by notice given
to the Company. For purposes of this Agreement, the term “Good Reason” shall
mean the occurrence of any of the following and the failure of the Company to
rectify the same within thirty (30) days after the Executive shall have given
notice to the Company which identifies the action complained of and demands that
it be rectified: (i) a breach by the Company of this Agreement; (ii) a material
reduction, in the Executive’s duties and responsibilities hereunder; (iii) a
reduction in the Executive’s Base Salary; or (iv) a change in the Executive’s
principal place of employment to a location that is not within a fifty (50)-mile
radius of 6033 Schumacher Park Drive.

(e) Voluntary Termination. Either the Company or the Executive may terminate the
Executive’s employment under this Agreement at any time for any reason or no
reason upon such prior written notice to the other party, if any, as is provided
for below (a termination effected by the Company under this provision being
referred to as a termination “Without Cause”). Accordingly, each of the Company
and the Executive acknowledges that Executive’s employment with the Company is
on a so-called “at-will” basis, and that no minimum period of employment is
required hereunder or otherwise. Executive shall give the Company at least
forty-five (45) days’ prior written notice in the event of a termination by her
under this Section 9(e). The Company

 

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shall not be obligated to give the Executive any prior written notice in
connection with a termination by it under this Section 9(e), but may do so in
its sole and absolute discretion.

(f) Notice of Termination. Any termination by the Company or the Executive under
this Agreement shall be communicated by Notice of Termination to the other party
hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a
notice in writing which shall indicate the specific termination provision in
this Agreement relied upon to terminate the Executive’s employment and, except
in the case of Section 8(e), setting forth, in reasonable detail, the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated.

9. Economic Consequences of a Termination of Employment.

(a) Under all Circumstances. Under all circumstances, upon termination, the
Executive or her estate, as the case may be, shall be entitled to:

(i) Any accrued but unpaid Base Salary for services rendered up to the date on
which the Executive’s employment shall actually have ceased (the “Termination
Date”);

(ii) Payment for any accrued and unpaid vacation or similar pay to which she is
entitled under Company policies;

(iii) Any medical, dental, life insurance or similar “welfare” benefits to which
the Executive may be entitled upon termination pursuant to the plans, policies
and arrangements referred to in Section 6 hereof, which shall be paid in
accordance with the terms of such plans, policies and arrangements; and

(iv) Exercise her vested stock options in accordance with the terms of the
relevant stock option plan(s).

(b) Termination Without Cause or With Good Reason.

(i) No Change of Control. In the event that (A) either the Company shall
terminate the employment of the Executive hereunder Without Cause or the
Executive shall terminate her employment hereunder for Good Reason and (B) the
related Termination Notice shall not have been given during a Change of Control
Period (as defined below), the Executive shall, in addition to those rights
provided under Section 9(a), be entitled to a severance payment equal to six
(6) months of the Executive’s then Base Salary, which payment shall be paid to
her during the six (6) month period following the Termination Date in
substantially equal installments, as and when regular payroll payments are made
by the Company to its employees.

 

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(ii) Change of Control. In the event that (A) either the Company shall terminate
the employment of the Executive hereunder Without Cause or the Executive shall
terminate her employment hereunder for Good Reason and (B) the related
Termination Notice shall have been given during a Change of Control Period, the
Executive shall, in addition to those rights provided under Section 9(a), be
entitled to a severance payment equal to (A) six (6) months of the Executive’s
then Base Salary plus (B) an amount equal to Executive’s “full bonus potential”
for the year in which the Termination Date shall have occurred, which payment
shall be paid to her during the six (6) month period following the Termination
Date in substantially equal installments, as and when regular payroll payments
are made by the Company to its employees.

(c) Definitions. For purposes of this Agreement, the following terms shall have
the meanings assigned thereto below:

(i) “Change of Control” shall have the same meaning ascribed thereto in the
Incentive Plan, as the same may be amended from time to time; and

(ii) “Change of Control Period” shall mean the period beginning on the date on
which a Change of Control occurs and ending on the one (1) year anniversary of
such date.

(d) Release. Prior to the receipt of any benefits under Section 9(b), the
Executive shall be required to execute a release of claims agreement (the
“Release”) in the form provided by the Company. Without limiting the foregoing,
such Release shall specifically relate to all of the Executive’s rights and
claims in existence at the time of such execution (other than those surviving
rights referred to in this Section 9) and shall confirm the Executive’s
obligations under the Non-Disclosure Agreement.

(e) Violation of Non-Disclosure Agreement. The Executive consents and agrees
that if she breaches any of the provisions of the Non-Disclosure Agreement (or
any other confidentiality, non-competition or non-solicitation provision in
favor of the Company to which she is bound) in any material respect, she shall
be deemed to have immediately and permanently forfeited any payments which are
or would become payable to her under Section 9(b) (and including any such sums
which may already have been paid to her), regardless whether the termination of
her employment shall have occurred prior to or after such breach.

(f) Specified Benefits. Except as specifically provided in this Section 9, the
Executive shall not be entitled to any compensation or other benefits in
connection with any termination of her employment.

10. Amendment to Non-Disclosure Agreement. In consideration for the additional
rights and benefits granted to the Executive under this Agreement,

 

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the Executive agrees that the Non-Disclosure Agreement is hereby amended to
substitute, in Section 4(a) thereof, the words “twelve (12) months” for the
words “six (6) months” and specifically acknowledges the reasonableness of such
extended period, particularly in light of the key nature of her position and her
pervasive knowledge of the Company’s business and operations.

11. Withholding of Taxes. The Company may withhold from any compensation and
benefits payable under this Agreement all applicable federal, state, local and
other taxes.

12. Entire Agreement and Amendments. This Agreement shall constitute the entire
agreement between the parties and supersedes all existing agreements between
them, whether oral or written, with respect to the subject matter hereof. Any
waiver, alteration, or modification of any of the provisions of this Agreement,
or cancellation or replacement of this Agreement shall be accomplished in
writing and signed by the respective parties.

13. Notices. All notices, requests, demands and other communications provided
for or permitted under this Agreement shall be in writing and shall be either
personally delivered (including delivery by express couriers such as Federal
Express) or sent by prepaid certified mail, return receipt requested, addressed
to the party to which notice is to be given at the address set forth above for
such party, or to such other address as such party may have fixed by notice
given in accordance with the terms hereof. Any notice sent as aforesaid shall be
deemed given and effective upon the earlier of (a) delivery to the address for
the receiving party provided for herein and (b) the date falling three days
after notice of attempted delivery has been left at the address to which a
notice to the receiving party is to be sent hereunder.

14. Governing Law. This Agreement shall be construed in accordance with, and the
rights of the parties shall be governed by, the laws of the State of Ohio.

15. Severability. If any term or provision of this Agreement is declared illegal
or unenforceable by any court of competent jurisdiction and cannot be modified
to be enforceable, such term or provision shall immediately become null and
void, leaving the remainder of this Agreement in full force and effect.

16. Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original and when taken together shall constitute
one agreement.

17. Assignment. The rights and obligations of the Executive under this
Agreement, other than accrued and unpaid amounts due under Section 5 hereof, are
personal to the Executive and are not assignable or delegable. This Agreement
may not be assigned by the Company except to an affiliate of the

 

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Company, provided that such affiliate assumes the Company’s obligations under
this Agreement; provided, further, that if the Company merges or effects a
consolidation or share exchange with or into, or sells or otherwise transfers
substantially all its assets to, another business entity, the Company may
assign, its rights hereunder to that business entity without the consent of the
Executive, provided that it causes such business entity to assume the Company’s
obligations under this Agreement. This Agreement shall be binding upon the
Company and any successors thereto.

18. Waiver. No waiver of any party hereto of a breach of any provision of this
Agreement by any other party shall operate or be construed as a waiver of any
subsequent breach by such other party. The failure of any party hereto to take
any action by reason of such breach shall not deprive such party of the right to
take action at any time while such breach continues,

19. Offer Time. This offer will remain open until 5pm EST January 5, 2007.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by the
undersigned duly authorized persons as of the day and year first stated above.

 

ATRICURE, INC. By:  

/s/ David Drachman

Printed Name:   David Drachman Title:   PRESIDENT CEO

/s/ Julie A. Piton

Julie A. Piton

 

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