Exhibit 10.34

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made by and between World Heart
Corporation with offices at 4750 Wiley Post Way, Suite 120, Salt Lake City,
Utah  84116 (the “Company”), and Jal S. Jassawalla (“Executive”).

 

The parties hereto agree as follows:

 

1.             AMENDMENT AND RESTATEMENT OF OFFER LETTER.  THE OFFER LETTER
BETWEEN THE COMPANY AND EXECUTIVE DATED JUNE 23, 2000, AND AMENDED AS OF
OCTOBER 28, 2004 AND DECEMBER 29, 2008, IS HEREBY AMENDED, RESTATED AND
SUPERSEDED AS SET FORTH HEREIN AS OF FEBRUARY 4, 2009.

 

2.             TERM OF EMPLOYMENT.  THIS AGREEMENT WILL BE EFFECTIVE AS OF
FEBRUARY 4, 2009 (THE “EFFECTIVE DATE”).  AT ANY TIME DURING THE TERM OF THIS
AGREEMENT, EITHER PARTY MAY TERMINATE THIS AGREEMENT AND EXECUTIVE’S EMPLOYMENT
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 7 OF THIS AGREEMENT.

 

3.             POSITION AND DUTIES.

 

(A)           GENERAL.  EFFECTIVE AS OF FEBRUARY 4, 2009, EXECUTIVE WILL SERVE
AS EXECUTIVE VICE PRESIDENT AND CHIEF TECHNOLOGY OFFICER OF THE COMPANY.  IN
SUCH CAPACITY EXECUTIVE WILL REPORT TO AND BE SUBJECT TO THE DIRECTION AND
CONTROL OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THE COMPANY (THE
“CEO”).  EXECUTIVE WILL RENDER SUCH BUSINESS AND PROFESSIONAL SERVICES IN THE
PERFORMANCE OF HIS DUTIES, CONSISTENT WITH HIS POSITION WITHIN THE COMPANY, AS
WILL REASONABLY BE ASSIGNED TO EXECUTIVE BY THE CEO, AND PERFORM HIS SERVICES ON
A FULL-TIME BASIS, EXCEPT AS SET FORTH IN SECTION 3(C) BELOW, AT THE COMPANY’S
OFFICES IN OAKLAND, CALIFORNIA.  EXCEPT AS SET FORTH IN SECTION 3(C) BELOW,
EXECUTIVE WILL DEVOTE SUBSTANTIALLY ALL OF HIS FULL WORKING TIME AND ATTENTION
TO THE BUSINESS AFFAIRS OF THE COMPANY, PROVIDED THAT HE MAY SERVE ON BOARDS OF
DIRECTORS OF OTHER COMPANIES OR IN ANY OTHER CAPACITY WITH CIVIC, EDUCATIONAL,
OR CHARITABLE ORGANIZATIONS UPON CONSENT FROM THE BOARD, WHICH WILL NOT BE
UNREASONABLY WITHHELD.  EXECUTIVE WILL COMPLY WITH AND BE BOUND BY THE COMPANY’S
OPERATING POLICIES, PROCEDURES AND PRACTICES FROM TIME TO TIME IN EFFECT DURING
THE TERM OF THIS AGREEMENT.

 

(B)           TRANSITION PERIOD.  DURING THE ONE YEAR TRANSITION PERIOD FROM
FEBRUARY 4, 2009  THROUGH FEBRUARY 3, 2010 (THE “TRANSITION PERIOD”), IN
ADDITION TO SERVING AS EXECUTIVE VICE PRESIDENT AND CHIEF TECHNOLOGY OFFICER,
EXECUTIVE WILL PROVIDE TRANSITION BRIEFING AND ASSISTANCE AS REQUESTED BY THE
CEO.

 

(C)           REDUCED TIME COMMITMENT.  AFTER THE TRANSITION PERIOD, EXECUTIVE
SHALL HAVE THE OPTION TO REDUCE HIS TIME COMMITMENT FROM FULL TIME TO A LESSER
AMOUNT, BUT IN ANY EVENT NO LESS THAN 50% TIME, SHOULD HE FIND IT NECESSARY TO
DO SO.  IN THE EVENT THAT EXECUTIVE ELECTS TO REDUCE HIS TIME COMMITMENT, THE
COMPANY SHALL HAVE THE

 

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ABILITY TO REDUCE EXECUTIVE’S BASE SALARY AND BONUS AND TO ADJUST THE VESTING
SCHEDULE OF EXECUTIVE’S OUTSTANDING OPTION GRANTS BY THE SAME PERCENTAGE AS
EXECUTIVE HAS REDUCED HIS TIME COMMITMENT.

 

4.             SALARY, BONUS AND BENEFITS.

 

(A)           SALARY.  COMMENCING FEBRUARY 4, 2009, THE COMPANY WILL PAY
EXECUTIVE AN ANNUAL BASE SALARY OF $287,400 (THE “BASE SALARY”).  EXECUTIVE WILL
RECEIVE AN INCREASE IN EXECUTIVE’S 2009 BASE SALARY AT THE SAME TIME AND IN THE
SAME PERCENTAGE RANGE AS THE OTHER SENIOR EXECUTIVES OF THE COMPANY.

 

(B)           BONUS.  EXECUTIVE WILL BE ELIGIBLE FOR A TARGET ANNUAL BONUS OF UP
TO 25% OF HIS ANNUAL BASE SALARY (THE “BONUS”) AWARDED IN THE DISCRETION OF THE
BOARD AS EXERCISED IN ACCORDANCE WITH THE INCENTIVE COMPENSATION PRACTICES AND
PLANS OF THE COMPENSATION COMMITTEE AND THE BOARD FROM YEAR TO YEAR.  TO EARN A
BONUS EXECUTIVE MUST BE EMPLOYED AS OF THE DATE OF THE BOARD’S DETERMINATION OF
THE BONUS PAYMENT, IF ANY, PAYABLE TO EXECUTIVE FOR A PARTICULAR YEAR.  ANY
BONUS EARNED WILL BE PAID ON OR BEFORE MARCH 15 OF THE YEAR FOLLOWING THE YEAR
IN WHICH THE BONUS IS EARNED.

 

(C)           STOCK OPTIONS.

 

(i)            Initial Grant.  In connection with the execution of this
Agreement, the Company will recommend that the Board grant Executive a stock
option (the “Initial Option”) to purchase 265,079 common shares of the Company
(representing approximately 2% the Company’s total issued and outstanding shares
as of the date of grant of the Initial Option).  The Initial Option will vest
and become exercisable, contingent on Executive’s continued employment with the
Company, on each respective vesting date, at the rate of 25% of the shares, or
66,269 common shares, on the twelve (12) month anniversary of the Effective
Date, and the remaining shares will vest monthly thereafter at the rate of 1/48
of the total number of shares underlying the Initial Option, or approximately
5,522 common shares.

 

(ii)           Performance Options.  On each of the first and second
anniversaries of the Effective Date and conditioned upon Executive’s continued
employment with the Company and achievement of certain performance-based metrics
to be reasonably agreed upon between Executive and the Board, the Company will
grant Executive a stock option to purchase that number of common shares of the
Company representing 0.5% of the Company’s total issued and outstanding shares
as of each such grant date (each a “Performance Option”).  Each Performance
Option will vest and become exercisable, contingent on Executive’s continued
employment with the Company on each respective vesting date, at the rate of 1/48
of the total number of shares underlying such Performance Option each month. 
Each of these grants is conditioned on Executive’s being a full time employee of
the Company at the time of the grant.

 

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(III)          OTHER OPTION TERMS.  BOTH THE INITIAL OPTION AND THE PERFORMANCE
OPTIONS (COLLECTIVELY, THE “OPTIONS”) WILL BE SUBJECT TO THE TERMS AND
CONDITIONS SPECIFIED IN THIS SECTION 4(C)(III).  THE OPTIONS WILL BE GRANTED
WITH A PER SHARE EXERCISE PRICE EQUAL TO THE CLOSING SALES PRICE OF A COMMON
SHARE OF THE COMPANY AS REPORTED ON THE NASDAQ STOCK MARKET ON THE TRADING DAY
PRIOR TO THE APPLICABLE DATE OF GRANT. THE OPTIONS WILL HAVE TEN YEAR TERMS
UNLESS THEY EXPIRE EARLIER IN CONNECTION WITH A CHANGE OF CONTROL OF THE COMPANY
OR EXECUTIVE’S TERMINATION OF SERVICE TO THE COMPANY.  THE OPTIONS WILL BE
GRANTED UNDER THE COMPANY’S 2006 EQUITY INCENTIVE PLAN, AS MAY BE AMENDED FROM
TIME TO TIME (THE “STOCK PLAN”), AND WILL BE SUBJECT TO THE FURTHER TERMS AND
CONDITIONS OF THE STOCK PLAN AND THE STOCK OPTION AGREEMENTS TO BE ENTERED INTO
BETWEEN EXECUTIVE AND THE COMPANY. THE OPTIONS WILL BE INTENDED TO QUALIFY AS
“INCENTIVE STOCK OPTIONS” WITHIN THE MEANING OF SECTION 422 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), TO THE MAXIMUM EXTENT POSSIBLE
WITHIN THE LIMITATIONS OF THE CODE.

 

(IV)          OTHER OPTIONS.  ANY UNVESTED STOCK OPTIONS OUTSTANDING AS OF THE
EFFECTIVE DATE WILL CONTINUE TO VEST DURING EXECUTIVE’S EMPLOYMENT PURSUANT TO
THEIR EXISTING TERMS.  THE OPTIONS DESCRIBED ABOVE WILL NOT PRECLUDE THE BOARD
FROM CONSIDERING OTHER ROUTINE ANNUAL STOCK OPTION GRANTS IN 2010 AND 2011.

 

(D)           CHANGE IN CONTROL AND OTHER TERMINATION BENEFITS.  THE BOARD IS
CURRENTLY EVALUATING THE ADVISABILITY OF ADOPTING A PROGRAM FOR ITS SENIOR
EXECUTIVES GOVERNING TERMINATIONS OF EMPLOYMENT IN CONNECTION WITH A CHANGE OF
CONTROL OF THE COMPANY AND IN CONNECTION WITH OTHER TERMINATION SCENARIOS.  IN
THE EVENT THAT THE COMPANY ADOPTS SUCH A PROGRAM, EXECUTIVE WILL BE ELIGIBLE TO
RECEIVE TERMINATION-RELATED AND OTHER BENEFITS UNDER SUCH A PROGRAM TO THE SAME
EXTENT AS THE COMPANY’S OTHER SENIOR EXECUTIVES.

 

(E)           OTHER BENEFITS.  DURING EXECUTIVE’S EMPLOYMENT BY THE COMPANY,
EXECUTIVE WILL BE ELIGIBLE TO PARTICIPATE IN ANY MEDICAL INSURANCE PLANS,
401(K) PLANS, DEFERRED COMPENSATION PLANS, LIFE INSURANCE PLANS, VACATION, OR
OTHER BENEFIT PLANS WHICH ARE GENERALLY AVAILABLE TO THE COMPANY’S EXECUTIVE
VICE PRESIDENTS OR IF THERE ARE NO OTHER EXECUTIVE VICE PRESIDENTS, THEN TO THE
COMPANY’S SENIOR VICE PRESIDENTS, PURSUANT TO THE TERMS AND CONDITIONS OF SUCH
PLANS. THE COMPANY WILL BE UNDER NO OBLIGATION TO INSTITUTE OR CONTINUE THE
EXISTENCE OF ANY SUCH BENEFIT PLAN AND MAY FROM TIME TO TIME AMEND, MODIFY OR
TERMINATE ANY SUCH BENEFIT PLAN.

 

5.             EXPENSE REIMBURSEMENT.  EXECUTIVE WILL BE ENTITLED TO TIMELY
REIMBURSEMENT FOR ALL ORDINARY AND REASONABLE OUT-OF-POCKET BUSINESS EXPENSES
WHICH ARE INCURRED BY EXECUTIVE IN FURTHERANCE OF THE COMPANY’S BUSINESS AND IN
ACCORDANCE WITH THE COMPANY’S STANDARD POLICIES.

 

6.             INDEMNIFICATION.  THE COMPANY AGREES TO INDEMNIFY EXECUTIVE AND
HOLD HIM HARMLESS TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW AND UNDER
THE BYLAWS OF THE COMPANY AGAINST AND IN RESPECT TO ANY AND ALL ACTIONS, SUITS,
PROCEEDINGS, CLAIMS, DEMANDS,

 

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JUDGMENTS, COSTS, EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES), LOSSES AND
DAMAGES RESULTING FROM EXECUTIVE’S GOOD-FAITH PERFORMANCE OF HIS DUTIES AND
OBLIGATIONS TO THE COMPANY.  THE COMPANY WILL COVER EXECUTIVE UNDER DIRECTORS
AND OFFICERS LIABILITY INSURANCE BOTH DURING AND, WHILE POTENTIAL LIABILITY
EXISTS (BUT IN ANY CASE NOT FOR MORE THAN SIX YEARS), AFTER THE TERM OF THIS
AGREEMENT IN THE SAME AMOUNT AND ON THE SAME TERMS AS THE COMPANY COVERS ITS
OTHER ACTIVE OFFICERS AND DIRECTORS, IF SUCH COVERAGE IS OBTAINABLE, BUT IN ALL
EVENTS SUCH COVERAGE WILL BE AT LEAST IN SUBSTANTIALLY THE SAME AMOUNT AND ON
SUBSTANTIALLY THE SAME TERMS AS THE COMPANY COVERS ITS OTHER ACTIVE OFFICERS AND
DIRECTORS.

 

7.             TERMINATION AND SEVERANCE.

 

(A)           GENERAL.  EXECUTIVE’S EMPLOYMENT WITH THE COMPANY WILL AT ALL
TIMES BE “AT WILL,” WHICH MEANS THAT EITHER EXECUTIVE OR THE COMPANY MAY
TERMINATE EXECUTIVE’S EMPLOYMENT AT ANY TIME, FOR ANY OR NO REASON, SUBJECT ONLY
TO THE SPECIFIC PROVISIONS OF THIS AGREEMENT AND ANY PROGRAMS ADOPTED UNDER
SECTION 4(D) OF THIS AGREEMENT.  THIS AGREEMENT WILL CONSTITUTE THE FULL AND
COMPLETE AGREEMENT BETWEEN EXECUTIVE AND THE COMPANY ON THE “AT WILL” NATURE OF
EXECUTIVE’S EMPLOYMENT, WHICH MAY ONLY BE CHANGED IN AN EXPRESS WRITTEN
AGREEMENT SIGNED BY EXECUTIVE AND A DULY AUTHORIZED OFFICER OF THE COMPANY.
EXECUTIVE MAY TERMINATE HIS EMPLOYMENT HEREUNDER WITH OR WITHOUT GOOD REASON (AS
DEFINED BELOW) UPON WRITTEN NOTICE TO THE COMPANY.  IF EXECUTIVE CONTENDS THAT
GOOD REASON EXISTS FOR HIS TERMINATION, SUCH NOTICE WILL BE SUBJECT TO
SECTION 7(E) BELOW.  THE COMPANY MAY TERMINATE EXECUTIVE’S EMPLOYMENT HEREUNDER,
SUBJECT TO THE TERMS OF THIS AGREEMENT, WITH OR WITHOUT CAUSE (AS DEFINED IN THE
STOCK PLAN) UPON WRITTEN NOTICE TO EXECUTIVE.  IF THIS AGREEMENT IS TERMINATED,
ALL COMPENSATION AND BENEFITS OTHER THAN SEVERANCE BENEFITS DESCRIBED IN
SECTION 7(B) THROUGH 7(D) BELOW, TO THE EXTENT APPLICABLE, WILL IMMEDIATELY
CEASE, EXCEPT THAT (I) EXECUTIVE WILL BE ENTITLED, THROUGH THE DATE OF
TERMINATION, TO PAYMENT OF HIS SALARY AND BENEFITS UNDER COMPANY BENEFIT
PROGRAMS AND PLANS IN ACCORDANCE WITH THEIR TERMS AND (II) EXECUTIVE’S VESTED
STOCK OPTIONS SHALL REMAIN EXERCISABLE IN ACCORDANCE WITH THE TERMS OF THE
APPLICABLE STOCK OPTION AGREEMENTS.

 

(B)           TERMINATION DURING TRANSITION PERIOD.  IN THE EVENT THE COMPANY
TERMINATES EXECUTIVE’S EMPLOYMENT WITHOUT CAUSE DURING THE TRANSITION PERIOD AND
SUCH TERMINATION CONSTITUTES A “SEPARATION FROM SERVICE” WITHIN THE MEANING OF
TREASURY REGULATION SECTION 1.409A-1(H) (A “SEPARATION FROM SERVICE”), THE
COMPANY WILL PAY EXECUTIVE A LUMP SUM SEVERANCE PAYMENT EQUAL TO TWO YEARS OF
EXECUTIVE’S BASE SALARY, AS THEN IN EFFECT, SUBJECT TO EXECUTIVE’S EXECUTION OF
A GENERAL RELEASE OF CLAIMS IN A FORM SUBSTANTIALLY SIMILAR TO THE FORM ATTACHED
HERETO AS EXHIBIT A (THE “RELEASE”), AS SET FORTH IN SECTION 7(G) BELOW.

 

(C)           TERMINATION DURING YEAR 2.  IN THE EVENT THE COMPANY TERMINATES
EXECUTIVE’S EMPLOYMENT WITHOUT CAUSE OR EXECUTIVE RESIGNS FROM HIS EMPLOYMENT
WITH THE COMPANY FOR GOOD REASON ON OR AFTER FEBRUARY 4, 2010 AND PRIOR TO
FEBRUARY 4, 2011 (“YEAR 2”) AND SUCH TERMINATION OR RESIGNATION CONSTITUTES A
SEPARATION FROM SERVICE, THE COMPANY WILL PAY EXECUTIVE A LUMP SUM SEVERANCE
PAYMENT EQUAL TO

 

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24 MONTHS OF EXECUTIVE’S BASE SALARY, AS THEN IN EFFECT, MINUS ONE MONTH OF
EXECUTIVE’S BASE SALARY, AS THEN IN EFFECT, FOR EACH COMPLETE MONTH OF SERVICE
WORKED DURING YEAR 2, SUBJECT TO EXECUTION OF A RELEASE, AS SET FORTH IN
SECTION 7(G) BELOW.  IN ADDITION, ANY COMPANY STOCK OPTIONS HELD BY EXECUTIVE
THAT ARE VESTED ON THE DATE OF EXECUTIVE’S TERMINATION OR RESIGNATION WILL BE
EXERCISABLE FOR UP TO TWELVE MONTHS AFTER SUCH TERMINATION OR RESIGNATION;
PROVIDED THAT SUCH EXTENDED EXERCISE PERIOD MAY BE MODIFIED BY THE TERMS OF THE
DEFINITIVE AGREEMENT FOR A CHANGE OF CONTROL OF THE COMPANY.

 

(D)           TERMINATION AFTER YEAR 2.  IN THE EVENT THE COMPANY TERMINATES
EXECUTIVE’S EMPLOYMENT WITHOUT CAUSE OR EXECUTIVE RESIGNS FROM HIS EMPLOYMENT
WITH THE COMPANY FOR GOOD REASON ON OR AFTER FEBRUARY 4, 2011, AND SUCH
TERMINATION OR RESIGNATION CONSTITUTES A SEPARATION FROM SERVICE, THE COMPANY
WILL PAY EXECUTIVE A LUMP SUM SEVERANCE PAYMENT EQUAL TO THE HIGHEST LEVEL OF
SEVERANCE TO WHICH ANY OTHER EXECUTIVE VICE PRESIDENT OR SENIOR VICE PRESIDENT
OF THE COMPANY IS ENTITLED PURSUANT TO A WRITTEN AGREEMENT WITH, OR WRITTEN PLAN
OR POLICY AFFECTING, SUCH EXECUTIVE, BUT IN NO EVENT WILL EXECUTIVE’S SEVERANCE
PAYMENT EQUAL LESS THAN SIX MONTHS OF EXECUTIVE’S BASE SALARY, AS THEN IN
EFFECT, SUBJECT TO EXECUTION OF A RELEASE, AS SET FORTH IN SECTION 7(G) BELOW. 
IN ADDITION, ANY COMPANY STOCK OPTIONS HELD BY EXECUTIVE THAT ARE VESTED ON THE
DATE OF EXECUTIVE’S TERMINATION OR RESIGNATION WILL BE EXERCISABLE FOR UP TO
TWELVE MONTHS AFTER SUCH TERMINATION OR RESIGNATION; PROVIDED THAT SUCH EXTENDED
EXERCISE PERIOD MAY BE MODIFIED BY THE TERMS OF THE DEFINITIVE AGREEMENT FOR A
CHANGE OF CONTROL OF THE COMPANY.

 

(E)           GOOD REASON.  FOR PURPOSES OF THIS AGREEMENT, “GOOD REASON” WILL
CONSIST OF ANY ONE OF THE FOLLOWING:  (I) A MATERIAL DIMINUTION OF EXECUTIVE’S
AUTHORITY OR RESPONSIBILITIES AS EXECUTIVE VICE PRESIDENT/CHIEF TECHNOLOGY
OFFICER; (II) OTHER THAN AS SET FORTH IN SECTION 3(C) OF THIS AGREEMENT, A
MATERIAL DECREASE OF EXECUTIVE’S COMPENSATION OR BENEFITS, UNLESS THE DECREASE
IS PROPORTIONAL TO AN ACROSS-THE-BOARD DECREASE AFFECTING ALL SENIOR EXECUTIVES;
(III) A MATERIAL BREACH BY THE COMPANY OF ANY MATERIAL PROVISION OF THIS
AGREEMENT; OR (IV) AN INVOLUNTARY RELOCATION OF EXECUTIVE’S PRINCIPAL WORK
LOCATION FOR THE COMPANY OUTSIDE OF THE SAN FRANCISCO BAY AREA.  BEFORE ANY
RESIGNATION FOR GOOD REASON, EXECUTIVE WILL PROVIDE THE COMPANY WITH SPECIFIC
WRITTEN NOTICE ABOUT THE CIRCUMSTANCES ALLEGEDLY CONSTITUTING GOOD REASON WITHIN
90 DAYS AFTER THE OCCURRENCE OF THE CIRCUMSTANCES, AND THE COMPANY WILL HAVE 30
DAYS TO CURE, IF SUCH CONDUCT IS REASONABLY SUSCEPTIBLE TO BEING CURED.  A
RESIGNATION FOR GOOD REASON MUST TAKE PLACE WITHIN 60 DAYS AFTER THE END OF THE
CURE PERIOD.

 

(F)            TERMINATION DUE TO DEATH OR DISABILITY.  IN THE EVENT EXECUTIVE’S
EMPLOYMENT WITH THE COMPANY TERMINATES DUE TO DEATH OR DISABILITY (AS DEFINED IN
THE PLAN), THE PLAN WILL GOVERN EXECUTIVE’S OUTSTANDING STOCK OPTIONS, PROVIDED
THAT EXECUTIVE’S VESTED OPTIONS WILL BE EXERCISABLE FOR UP TO TWELVE MONTHS
AFTER SUCH TERMINATION EVENT, AS PERMITTED BY THE PLAN.

 

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(G)           RELEASE OF CLAIMS.  THE COMPANY’S OBLIGATION TO MAKE THE PAYMENTS
AND PROVIDE THE BENEFITS UNDER SECTIONS 7(B) THROUGH (D) WILL BE CONDITIONED
UPON (I) EXECUTIVE’S EXECUTION OF A RELEASE WITHIN 70 DAYS FOLLOWING EXECUTIVE’S
SEPARATION FROM SERVICE AND (II) EXECUTIVE’S NOT REVOKING SUCH RELEASE WITHIN
ANY PERIOD PERMITTED UNDER APPLICABLE LAW.  IN NO EVENT WILL SEVERANCE BENEFITS
BE PROVIDED TO EXECUTIVE UNLESS AND UNTIL THE RELEASE BECOMES EFFECTIVE.  ANY
LUMP SUM PAYMENT OWED TO EXECUTIVE WILL BE PAID WITHIN 30 DAYS FOLLOWING THE
EFFECTIVE DATE OF THE RELEASE, BUT IN NO EVENT LATER THAN MARCH 15 OF THE YEAR
FOLLOWING THE YEAR IN WHICH THE SEPARATION FROM SERVICE OCCURS.

 

8.             SECTION 409A OF THE INTERNAL REVENUE CODE AND SPECIFIED
EMPLOYEES.   NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN THIS AGREEMENT, IF
EXECUTIVE IS DEEMED BY THE COMPANY AT THE TIME OF HIS SEPARATION FROM SERVICE TO
BE A “SPECIFIED EMPLOYEE” FOR PURPOSES OF SECTION 409A(A)(2)(B)(I) OF THE CODE,
TO THE EXTENT DELAYED COMMENCEMENT OF ANY PORTION OF THE BENEFITS TO WHICH
EXECUTIVE IS ENTITLED UNDER THIS AGREEMENT IS REQUIRED IN ORDER TO AVOID A
PROHIBITED DISTRIBUTION UNDER SECTION 409A(A)(2)(B)(I) OF THE CODE, SUCH PORTION
OF EXECUTIVE’S BENEFITS WILL NOT BE PROVIDED TO EXECUTIVE PRIOR TO THE EARLIER
OF (I) THE EXPIRATION OF THE SIX-MONTH PERIOD MEASURED FROM THE DATE OF THE
EXECUTIVE’S SEPARATION FROM SERVICE OR (II) THE DATE OF EXECUTIVE’S DEATH.  UPON
THE FIRST BUSINESS DAY FOLLOWING THE EXPIRATION OF THE APPLICABLE CODE
SECTION 409A(A)(2)(B)(I) PERIOD, ALL PAYMENTS DEFERRED PURSUANT TO THIS
SECTION 8 WILL BE PAID IN A LUMP SUM TO EXECUTIVE (OR EXECUTIVE’S ESTATE OR
BENEFICIARIES), AND ANY REMAINING PAYMENTS DUE UNDER THE AGREEMENT WILL BE PAID
AS OTHERWISE PROVIDED HEREIN.  FOR PURPOSES OF SECTION 409A OF THE CODE,
EXECUTIVE’S RIGHT TO RECEIVE THE PAYMENTS OF COMPENSATION PURSUANT TO THE
AGREEMENT WILL BE TREATED AS A RIGHT TO RECEIVE A SERIES OF SEPARATE PAYMENTS
AND ACCORDINGLY, EACH PAYMENT WILL AT ALL TIMES BE CONSIDERED A SEPARATE AND
DISTINCT PAYMENT.

 

9.             MISCELLANEOUS.

 

(A)           LEGAL FEES.  THE COMPANY WILL REIMBURSE EXECUTIVE’S REASONABLE AND
DOCUMENTED LEGAL FEES INCURRED IN CONNECTION WITH REVIEW OF THIS AGREEMENT AND
THE RELATED TERM SHEET, UP TO A MAXIMUM OF $2,000.  ANY SUCH REIMBURSEMENT WILL
BE PAID TO EXECUTIVE WITHIN 60 DAYS OF DELIVERY TO THE COMPANY OF THE
APPROPRIATE DOCUMENTATION, PROVIDED EXECUTIVE MUST DELIVER SUCH DOCUMENTATION TO
THE COMPANY NO LATER THAN JANUARY 10, 2010.  THE RIGHT TO REIMBURSEMENT SHALL
NOT BE SUBJECT TO LIQUIDATION OR EXCHANGE FOR ANOTHER BENEFIT.

 

(B)           TAX MATTERS.  EXECUTIVE AGREES THAT EXECUTIVE IS RESPONSIBLE FOR
ANY APPLICABLE TAXES OF ANY NATURE (INCLUDING ANY PENALTIES OR INTEREST THAT MAY
APPLY TO SUCH TAXES) THAT THE COMPANY REASONABLY DETERMINES APPLY TO ANY PAYMENT
OR EQUITY AWARD MADE TO EXECUTIVE HEREUNDER (OR ANY ARRANGEMENT CONTEMPLATED
HEREUNDER), THAT EXECUTIVE’S RECEIPT OF ANY BENEFIT HEREUNDER IS CONDITIONED ON
EXECUTIVE’S SATISFACTION OF ANY APPLICABLE WITHHOLDING OR SIMILAR OBLIGATIONS
THAT APPLY TO SUCH BENEFIT, AND THAT ANY CASH PAYMENT OWED TO EXECUTIVE
HEREUNDER WILL BE REDUCED TO SATISFY ANY SUCH WITHHOLDING OR SIMILAR OBLIGATIONS
THAT MAY APPLY THERETO.

 

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(C)           SEVERABILITY.  IF ONE OR MORE PROVISIONS OF THIS AGREEMENT ARE
HELD TO BE UNENFORCEABLE UNDER APPLICABLE LAW, THE PARTIES AGREE TO RENEGOTIATE
SUCH PROVISION IN GOOD FAITH.  IN THE EVENT THAT THE PARTIES CANNOT REACH A
MUTUALLY AGREEABLE AND ENFORCEABLE REPLACEMENT FOR SUCH PROVISION, THEN (I) SUCH
PROVISION SHALL BE EXCLUDED FROM THIS AGREEMENT, (II) THE BALANCE OF THIS
AGREEMENT SHALL BE INTERPRETED AS IF SUCH PROVISION WERE SO EXCLUDED AND
(III) THE BALANCE OF THIS AGREEMENT SHALL BE ENFORCEABLE IN ACCORDANCE WITH ITS
TERMS.

 

(D)           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.

 

(E)           ADVICE OF COUNSEL.  EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES
THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK
THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE
TERMS AND PROVISIONS OF THIS AGREEMENT.  THIS AGREEMENT SHALL NOT BE CONSTRUED
AGAINST ANY PARTY BY REASON OF THE DRAFTING OF PREPARATION HEREOF.

 

(F)            DISPUTE RESOLUTION.  TO ENSURE THE RAPID AND ECONOMICAL
RESOLUTION OF ANY AND ALL DISPUTES THAT ARISE IN CONNECTION WITH THIS AGREEMENT
OR EXECUTIVE’S EMPLOYMENT WITH THE COMPANY, EXECUTIVE AND THE COMPANY AGREE THAT
ANY AND ALL DISPUTES, CLAIMS, OR CAUSES OF ACTION, IN LAW OR EQUITY, ARISING
FROM OR RELATING TO THE ENFORCEMENT OR INTERPRETATION OF THIS AGREEMENT,
EXECUTIVE’S EMPLOYMENT OR THE TERMINATION OF EXECUTIVE’S EMPLOYMENT
(COLLECTIVELY, “CLAIMS”), WILL BE RESOLVED TO THE FULLEST EXTENT PERMITTED BY
LAW EXCLUSIVELY BY FINAL, BINDING, AND CONFIDENTIAL ARBITRATION IN SAN
FRANCISCO, CALIFORNIA, CONDUCTED BY THE AMERICAN ARBITRATION ASSOCIATION (“AAA”)
OR ITS SUCCESSORS, UNDER THE THEN APPLICABLE AAA RULES BY A SINGLE ARBITRATOR. 
CLAIMS SUBJECT TO THIS ARBITRATION PROVISION WILL (I) INCLUDE, BUT NOT BE
LIMITED TO, CLAIMS PURSUANT TO ANY FEDERAL, STATE OR LOCAL LAW OR STATUTE,
INCLUDING (WITHOUT LIMITATION) THE AGE DISCRIMINATION IN EMPLOYMENT ACT, AS
AMENDED; TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE AMERICANS
WITH DISABILITIES ACT OF 1990; THE FEDERAL FAIR LABOR STANDARDS ACT; AND STATE
ANTI-DISCRIMINATION STATUTES; AND CLAIMS PURSUANT TO ANY COMMON LAW, TORT LAW OR
CONTRACT LAW, INCLUDING (WITHOUT LIMITATION) BREACH OF CONTRACT OR OTHER
PROMISE, DISCRIMINATION, HARASSMENT, RETALIATION, WRONGFUL DISCHARGE, FRAUD,
MISREPRESENTATION, DEFAMATION, AND EMOTIONAL DISTRESS; AND (II) EXCLUDE CLAIMS
THAT BY LAW ARE NOT SUBJECT TO ARBITRATION.  THE ARBITRATOR WILL:  (1) HAVE THE
AUTHORITY TO COMPEL ADEQUATE DISCOVERY FOR THE RESOLUTION OF ALL CLAIMS AND TO
AWARD SUCH RELIEF AS WOULD OTHERWISE BE PERMITTED BY LAW; AND (2) ISSUE A
WRITTEN ARBITRATION DECISION INCLUDING THE ARBITRATOR’S ESSENTIAL FINDINGS AND
CONCLUSIONS AND A STATEMENT OF THE AWARD.  THE COMPANY WILL PAY ALL OF THE
ARBITRATOR’S FEES.  EXECUTIVE AND THE COMPANY ACKNOWLEDGE THAT, BY AGREEING TO
THIS ARBITRATION PROCEDURE, BOTH EXECUTIVE AND THE COMPANY WAIVE THE RIGHT TO
RESOLVE ANY CLAIMS THROUGH A TRIAL BY JURY OR JUDGE OR BY ADMINISTRATIVE
PROCEEDING.  NOTHING IN THIS AGREEMENT IS INTENDED TO PREVENT EXECUTIVE OR THE
COMPANY FROM OBTAINING INJUNCTIVE RELIEF IN COURT IF THE AWARD TO WHICH SUCH
PARTY MIGHT OBTAIN IN ARBITRATION MAY BE RENDERED INEFFECTUAL WITHOUT
PROVISIONAL RELIEF.  AS PROVIDED

 

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IN THE AAA RULES, ANY ARBITRATION AWARD MAY BE ENFORCED BY ANY COURT OF
COMPETENT JURISDICTION.

 

(G)           GOVERNING LAW.  THIS AGREEMENT WILL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.

 

(H)           ENTIRE AGREEMENT.  THIS AGREEMENT, THE PROPRIETARY RIGHTS
AGREEMENT, THE AMENDED AND RESTATED CODE OF CONDUCT AND THE INSIDER TRADING
POLICY THAT EXECUTIVE HAS PREVIOUSLY ENTERED INTO WITH THE COMPANY AND ALL
OUTSTANDING EQUITY AWARD AGREEMENTS ISSUED TO EXECUTIVE SET FORTH THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE EXECUTIVE AND THE COMPANY ON THE SUBJECT
MATTER HEREOF, AND SUPERSEDE ANY OTHER NEGOTIATIONS, AGREEMENTS, UNDERSTANDINGS,
ORAL AGREEMENTS, REPRESENTATIONS AND PAST OR FUTURE PRACTICES, WHETHER WRITTEN
OR ORAL, ON THE SUBJECT MATTER HEREOF.  NO PROVISION OF THIS AGREEMENT MAY BE
AMENDED, SUPPLEMENTED, MODIFIED, CANCELLED, OR DISCHARGED UNLESS SUCH AMENDMENT,
SUPPLEMENT, MODIFICATION, CANCELLATION OR DISCHARGE IS AGREED TO, IN WRITING,
SIGNED BY EXECUTIVE AND A DULY AUTHORIZED OFFICER OF THE COMPANY (OTHER THAN
EXECUTIVE); AND NO PROVISIONS HEREOF MAY BE WAIVED, EXCEPT IN WRITING, SO SIGNED
BY OR ON BEHALF OF THE PARTY GRANTING SUCH WAIVER.

 

(I)            VALIDITY.  THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION OR
PROVISIONS OF THIS AGREEMENT WILL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF
ANY OTHER PROVISION OF THIS AGREEMENT, WHICH WILL REMAIN IN FULL FORCE AND
EFFECT.

 

(J)            NOTICES.  FOR THE PURPOSES OF THIS AGREEMENT, NOTICES, DEMANDS
AND ALL OTHER COMMUNICATIONS PROVIDED FOR IN THIS AGREEMENT WILL BE IN WRITING
AND WILL BE DEEMED TO HAVE DULY GIVEN WHEN PERSONALLY DELIVERED OR MAILED BY
UNITED STATES CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, POSTAGE
PREPAID, ADDRESSED AS FOLLOWS:

 

If to the Executive:

 

Jal S. Jassawalla

34 East Altarinda Drive

Orinda, CA 94563

 

If to the Company:

 

Chief Executive Officer

World Heart Corporation

4750 Wiley Post Way, Suite 120

Salt Lake City, Utah  84116

 

(K)           SUCCESSORS.  THE COMPANY WILL REQUIRE ANY SUCCESSOR (WHETHER
DIRECT OR INDIRECT, BY PURCHASE, MERGER, CONSOLIDATION OR OTHERWISE) TO ALL OR
SUBSTANTIALLY ALL THE BUSINESS AND/OR ASSETS OF THE COMPANY, BY AGREEMENT IN
FORM AND SUBSTANCE SATISFACTORY TO EXECUTIVE, EXPRESSLY TO ASSUME AND AGREE TO
PERFORM THIS AGREEMENT IN THE SAME MANNER AND TO THE SAME EXTENT THAT THE
COMPANY WOULD BE

 

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REQUIRED TO PERFORM IT IF NO SUCH SUCCESSION HAD TAKEN PLACE.  THIS AGREEMENT
AND ALL RIGHTS UNDER THE AGREEMENT WILL BE BINDING UPON AND WILL INURE TO THE
BENEFIT OF AND BE ENFORCEABLE BY THE PARTY’S PERSONAL OR LEGAL REPRESENTATIVES,
EXECUTORS, ADMINISTRATORS, HEIRS, AND SUCCESSORS.

 

In witness whereof, the parties have executed this Agreement as of the Effective
Date.

 

Executive:

 

World Heart Corporation:

 

 

 

 

 

 

/s/ Jal S. Jassawalla

 

By

/s/ Michael Sumner Estes

Jal S. Jassawalla

 

 

Michael Sumner Estes

 

 

 

Chairman, on behalf of the Board of Directors

 

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Exhibit A

 

Form of Release Agreement

 

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