Exhibit 10.1
AGREEMENT
          This Agreement (this “Agreement”) is made and entered into as of
January 5, 2011, by and among SurModics, Inc. (the “Company” or “SurModics”) and
the entities and natural persons listed on Exhibit A hereto (collectively, the
“Ramius Group”) (each of the Company and the Ramius Group, a “Party” to this
Agreement, and collectively, the “Parties”).
          WHEREAS, the Ramius Group duly submitted a nomination letter to the
Company on November 10, 2010 (the “Nomination Letter”) nominating three
individuals as director candidates for election to the Company’s board of
directors (the “Board”) at the 2011 annual meeting of shareholders of the
Company (including any adjournment or postponement thereof, the “2011 Annual
Meeting”); and
          WHEREAS, the Company and the members of the Ramius Group have
determined (i) that the interests of the Company and its shareholders would be
best served by, among other things, avoiding an election contest and the expense
and disruption that may result therefrom and (ii) to come to an agreement with
respect to the composition of the Board, certain matters related to the 2011
Annual Meeting and certain other matters, as provided in this Agreement.
          NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound hereby, agree as
follows:

1.   Board Matters; Board Appointments; 2011 Annual Meeting; Committee
Appointments; Replacement Directors.

  (a)   Prior to the execution of this Agreement, (i) the Corporate Governance
and Nominating Committee of the Board has reviewed and approved the
qualifications of Jeffrey C. Smith and David Dantzker, M.D. (each a “New
Appointee” and together, the “New Appointees”) to serve as members of the Board
and (ii) the Board has determined, based on information provided by Mr. Smith
and Dr. Dantzker, that each New Appointee is “independent” as defined by the
listing standards of the NASDAQ Stock Market. The New Appointees shall comply
with the Company’s current policies to the extent such policies are consistent
with law and applicable to all the Company’s directors.     (b)   Simultaneously
with the execution of this Agreement, the Company has taken all necessary
actions to (i) increase the size of the Board from ten (10) to twelve (12)
members, and (ii) appoint the New Appointees to fill the vacancies on the Board
created by increasing its size to twelve (12) members. Dr. Dantzker shall be
appointed to the class of directors whose terms expire in 2012, and Mr. Smith
shall be appointed to the class of directors whose terms expire in 2011.     (c)
  Upon execution of this Agreement, the Ramius Group hereby withdraws the
Nomination Letter.

 

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  (d)   The Company has taken all action necessary to establish a special
committee (the “Pharma Special Committee”) composed of four directors including
Jeffrey C. Smith (who will be Chair), David Dantzker, M.D., Susan E. Knight, and
John W. Benson. The Pharma Special Committee will be responsible for reviewing
the strategic alternatives available to the Company regarding the Company’s
Pharmaceuticals business, which shall include the right to work with, direct and
seek advice from the Company’s investment bank, and recommending to the Board an
appropriate course of action, which recommendation shall be subject to the
review and approval of the Board.     (e)   The Company has taken all action
necessary to appoint Jeffrey C. Smith to the Organization and Compensation
Committee of the Board and to appoint David Dantzker, M.D. to the Audit
Committee and Corporate Governance and Nominating Committee of the Board. If any
new Committee of the Board is formed after the date of this Agreement and while
Mr. Smith is a director of the Company, Mr. Smith shall be appointed the Chair
of any such Committee.     (f)   The Company agrees that in the Company’s
definitive proxy statement for the 2011 Annual Meeting (the “2011 Proxy
Statement”), it will include as a voting matter, and recommend to shareholders
that they vote in favor of, setting the size of the Board at 10 members.
Pursuant to the provisions of the Company’s Corporate Governance Guidelines
relating to the tenure of directors, John A. Meslow, shall retire from the Board
effective at the conclusion of the 2011 Annual Meeting. The Company acknowledges
that it has received a letter from Mr. Meslow, whereby Mr. Meslow has resigned
as a member of the Board, effective at the conclusion of the 2011 Annual
Meeting.     (g)   The Company and the Ramius Group agree that following the
conclusion of the 2011 Annual Meeting the size of the Board shall not exceed 10
members until the conclusion of the Company’s 2012 annual meeting of
shareholders (including any adjournment or postponement thereof, the “2012
Annual Meeting”). There will be four (4) directors up for election at the 2012
Annual Meeting.     (h)   The Company agrees that if Mr. Smith is unable or
refuses to serve as a director, resigns as a director or is removed as a
director prior to the Annual Meeting of the shareholders of the Company to be
held in 2014 (the “2014 Annual Meeting”), the Ramius Group shall have the
ability to recommend a substitute person(s), who will qualify as “independent”
pursuant to NASDAQ Stock Market listing standards, to replace Mr. Smith, subject
to the approval of SurModics’ Corporate Governance and Nominating Committee in
good faith after exercising its fiduciary duties (any such replacement nominee
appointed in accordance with the provisions of this clause (h) shall be referred
to as the “Smith Replacement Director”). In the event the Corporate Governance
and Nominating Committee does not accept a substitute person(s) recommended by
the Ramius Group, the Ramius Group will have the right to recommend additional
substitute persons for consideration by the Corporate Governance and Nominating
Committee. Upon the acceptance of a replacement director nominee by the
Corporate Governance and Nominating Committee, the

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      Board will appoint such replacement director to the Board no later than
five business days after the Corporate Governance and Nominating Committee’s
recommendation of such replacement director. The Smith Replacement Director
shall be deemed a New Appointee for all purposes of this Agreement.

  (i)   The Company agrees that if Dr. Dantzker is unable or refuses to serve as
a director, resigns as a director or is removed as a director prior to the 2014
Annual Meeting, a substitute person to replace Dr. Dantzker shall be recommended
for appointment to the Board by the Corporate Governance and Nominating
Committee, following the identification of a candidate identified by Ramius
mutually acceptable to the Company and the Ramius Group (any such replacement
appointed in accordance with the provisions of this clause (i) shall be referred
to as the “Dantzker Replacement Director”). Such substitute person shall qualify
as “independent” pursuant to NASDAQ Stock Market listing standards. Once the
Company and the Ramius Group identify a mutually acceptable candidate, the Board
shall appoint such candidate as a Dantzker Replacement Director to the Board no
later than five (5) business days after the Corporate Governance and Nominating
Committee’s recommendation of such replacement director.     (j)   The Parties
acknowledge that the only matters that are to be presented by the Company for
consideration by shareholders at the 2011 Annual Meeting include (i) electing
the Company’s director-nominees, Jeffrey C. Smith (or the Smith Replacement
Director, if applicable), Robert C. Buhrmaster, and Susan E. Knight (the “2011
Nominees”), (ii) setting the number of directors on the Board at 10, (iii)
ratifying the Company’s independent registered public accounting firm, (iv) a
non-binding advisory vote on executive compensation, and (v) a non-binding
advisory vote regarding the frequency of non-binding shareholder advisory votes
on executive compensation (the “2011 Proposals”).     (k)   The Company agrees
that Dr. Dantzker shall be nominated as part of the Company’s slate of directors
at the 2012 Annual Meeting (such slate, the “2012 Nominees”).     (l)   The
Company agrees to recommend, support and solicit proxies for the election of
Mr. Smith (or the Smith Replacement Director, if applicable) at the 2011 Annual
Meeting in the same manner as for the other 2011 Nominees. The Company agrees to
recommend, support and solicit proxies for the election of Dr. Dantzker (or the
Dantzker Replacement Director, if applicable) in the same manner as for the
Company’s other 2012 Nominees at the 2012 Annual Meeting.     (m)   At the 2011
Annual Meeting, the Ramius Group agrees to appear in person or by proxy and vote
all shares of Common Stock beneficially owned by it and its Affiliates (i) in
favor of the election of the 2011 Nominees, setting the number of directors on
the Board at ten (10) and the ratification of the Company’s independent
registered public accounting firm, and (ii) in a manner consistent with the
recommendation of RiskMetrics with respect to the Company’s compensation of its
named executive officers and the annual non-binding shareholder advisory vote on
executive compensation (provided, however, if for any reason RiskMetrics fails
to provide a

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      recommendation on the two proposals identified in this subsection (ii),
the Ramius Group shall be free to vote as it chooses on these two proposals). No
later than forty-eight hours prior to the 2011 Annual Meeting, the Ramius Group
shall cause to be executed proxies for the 2011 Proposals (in the form utilized
by the Company to solicit proxies for all shareholders) so as to vote all shares
of Common Stock beneficially owned by it and its Affiliates in accordance with
this Section 1(m). The Ramius Group shall not withdraw or modify any such
proxies. From the date hereof through the 2011 Annual Meeting, neither the
Company, the Ramius Group nor any member of the Ramius Group shall directly or
indirectly make any statements or engage in any activities in opposition to the
2011 Proposals or enter into any agreement, understanding or arrangement with
the purpose or effect to cause or further any of the foregoing.

  (n)   Neither the Ramius Group nor any member of the Ramius Group shall
(i) nominate any person for election at the 2011 Annual Meeting, (ii) submit any
proposal for consideration at, or bring any other business before, the 2011
Annual Meeting, directly or indirectly, or (iii) take any action to call a
special meeting of the shareholders of the Company prior to the 2012 Annual
Meeting. The Ramius Group shall not enter into any agreement, understanding or
arrangement with a third party with the purpose or effect to cause or further
any of the foregoing or otherwise engage in any activities with the purpose or
effect to cause or further any of the foregoing.     (o)   Notwithstanding
anything to the contrary herein, if at any time prior to the conclusion of the
2014 Annual Meeting the Ramius Group’s aggregate beneficial ownership of Common
Stock decreases to less than three percent (3%) of the Company’s then
outstanding Common Stock, Mr. Smith (or the Smith Replacement Director) shall
promptly tender to the Company an irrevocable resignation letter in a form
satisfactory to the Company, pursuant to which he shall resign from the Board
and all committees thereof to which he is then a member, and the rights of the
Ramius Group to recommend a Smith Replacement Director to fill the vacancy
caused by the resignation of Mr. Smith (or any Smith Replacement Director)
pursuant to Section 1(h) and to any involvement in identifying a substitute
director under Section 1(i) shall automatically terminate. The Ramius Group has
obtained the conditional resignation letter from Mr. Smith (and will obtain such
a letter from Smith Replacement Director prior to his or her appointment to the
Board) and agrees to provide the resignation letter to the Company to the extent
required by this Section 1(o).     (p)   As used in this Agreement, the terms
“Affiliate” and “Associate” shall have the respective meanings set forth in
Rule 12b-2 promulgated by the SEC under the Exchange Act; the terms “beneficial
owner” and “beneficial ownership” shall have the respective meanings as set
forth in Rule 13d-3 promulgated by the SEC under the Exchange Act; and the terms
“person” or “persons” shall mean any individual, corporation (including
not-for-profit), general or limited partnership, limited liability company,
joint venture, estate, trust, association, organization or other entity of any
kind or nature.

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2.   Representations and Warranties of the Company.

          The Company represents and warrants to the Ramius Group that (a) the
Company has the corporate power and authority to execute this Agreement and to
bind it thereto, (b) this Agreement has been duly and validly authorized,
executed and delivered by the Company, constitutes a valid and binding
obligation and agreement of the Company, and is enforceable against the Company
in accordance with its terms, except as enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws generally affecting the rights of creditors and
subject to general equity principles, and (c) the execution, delivery and
performance of this Agreement by the Company does not and will not violate or
conflict with (i) any law, rule, regulation, order, judgment or decree
applicable to it, or (ii) result in any breach or violation of or constitute a
default (or an event which with notice or lapse of time or both could become a
default) under or pursuant to, or result in the loss of a material benefit
under, or give any right of termination, amendment, acceleration or cancellation
of, any organizational document, agreement, contract, commitment, understanding
or arrangement to which the Company is a party or by which it is bound.

3.   Representations and Warranties of the Ramius Group.

          The Ramius Group shall cause its Affiliates to comply with the terms
of this Agreement. Each member of the Ramius Group listed herein, on behalf of
himself or itself, as applicable, represents and warrants to the Company that
(a) as of the date hereof, the Ramius Group and each member of the Ramius Group
beneficially owns only the number of shares of Common Stock as set forth
opposite his or its name on Exhibit A and Exhibit A includes all Affiliates of
any members of the Ramius Group that own any securities of the Company
beneficially or of record, (b) the authorized signatory of each member of the
Ramius Group set forth on the signature page hereto has the power and authority
to execute this Agreement and to bind such member to this Agreement, (c) this
Agreement has been duly authorized, executed and delivered by such member, and
is a valid and binding obligation of such member, enforceable against such
member in accordance with its terms, except as enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws generally affecting the rights of
creditors and subject to general equity principles, (d) the execution of this
Agreement, the consummation of any of the transactions contemplated hereby, and
the fulfillment of the terms hereof, in each case in accordance with the terms
hereof, will not conflict with, or result in a breach or violation of the
organizational documents of any member of the Ramius Group as currently in
effect and (e) the execution, delivery and performance of this Agreement by each
member of the Ramius Group does not and will not violate or conflict with
(i) any law, rule, regulation, order, judgment or decree applicable to it, or
(ii) result in any breach or violation of or constitute a default (or an event
which with notice or lapse of time or both could become a default) under or
pursuant to, or result in the loss of a material benefit under, or give any
right of termination, amendment, acceleration or cancellation of, any
organizational document, agreement, contract, commitment, understanding or
arrangement to which such member is a party or by which it is bound.

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4.   Press Release.

          Promptly following the execution of this Agreement, the Company and
the Ramius Group shall jointly issue a mutually agreeable press release (the
“Mutual Press Release”) announcing the terms of this Agreement, in the form
attached hereto as Exhibit B. Prior to the issuance of the Mutual Press Release,
neither the Company nor the Ramius Group shall issue any press release or public
announcement regarding this Agreement without the prior written consent of the
other party.

5.   Specific Performance.

          Each of the members of the Ramius Group, on the one hand, and the
Company, on the other hand, acknowledges and agrees that irreparable injury to
the other party hereto would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached and that such injury would not be adequately compensable in
damages. It is accordingly agreed that the members of the Ramius Group or any of
them, on the one hand, and the Company, on the other hand (the “Moving Party”),
shall each be entitled to specific enforcement of, and injunctive relief to
prevent any violation of, the terms hereof, and the other party hereto will not
take action, directly or indirectly, in opposition to the Moving Party seeking
such relief on the grounds that any other remedy or relief is available at law
or in equity.

6.   Expenses.

          The Company shall reimburse the Ramius Group for its reasonable,
documented out of pocket fees and expenses (including legal expenses) incurred
in connection with the matters related to the 2011 Annual Meeting and the
negotiation and execution of this Agreement, provided that such reimbursement
shall not exceed twenty-five thousand dollars ($25,000) in the aggregate.

7.   Severability.

          If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated. It is hereby stipulated and declared to be the
intention of the parties that the parties would have executed the remaining
terms, provisions, covenants and restrictions without including any of such
which may be hereafter declared invalid, void or unenforceable. In addition, the
parties agree to use their best efforts to agree upon and substitute a valid and
enforceable term, provision, covenant or restriction for any of such that is
held invalid, void or enforceable by a court of competent jurisdiction.

8.   Notices.

          Any notices, consents, determinations, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent

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by facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii) one
business day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be:
               If to the Company:
SurModics, Inc.
9924 West 74th Street
Eden Prairie, MN 55344
Attention: General Counsel
Facsimile: (952) 345-3560
               With a copy to:
Faegre & Benson LLP
2200 Wells Fargo Center
90 South 7th Street
Minneapolis, MN 55402
Attention: Douglas P. Long
Facsimile: (612) 766-1600
               If to the Ramius Group or any member of the Ramius Group:
Ramius Value and Opportunity Master Fund Ltd
c/o Ramius Value and Opportunity Advisors LLC
599 Lexington Avenue, 20th Floor
New York, New York 10022
Attention: Owen S. Littman
Facsimile: (212) 845-7995
               With a copy to:
Olshan Grundman Frome Rosenzweig & Wolosky LLP
Park Avenue Tower
65 East 55th Street
New York, NY 10022
Attention: Steven Wolosky
Facsimile: (212) 451-2222

9.   Applicable Law.

          This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Minnesota without reference to the
conflict of laws principles thereof. Each of the Parties hereto irrevocably
agrees that any legal action or proceeding with respect to this Agreement and
the rights and obligations arising hereunder, or for recognition and enforcement
of any judgment in respect of this Agreement and the rights and obligations
arising hereunder

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brought by the other Party hereto or its successors or assigns, shall be brought
and determined exclusively in the Federal or State courts of the State of
Minnesota or New York. Each of the Parties hereto hereby irrevocably submits
with regard to any such action or proceeding for itself and in respect of its
property, generally and unconditionally, to the personal jurisdiction of the
aforesaid courts and agrees that it will not bring any action relating to this
Agreement in any court other than the aforesaid courts. Each of the Parties
hereto hereby irrevocably waives, and agrees not to assert in any action or
proceeding with respect to this Agreement, (i) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any reason,
(ii) any claim that it or its property is exempt or immune from jurisdiction of
any such court or from any legal process commenced in such courts (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise), and (iii) to the
fullest extent permitted by applicable legal requirements, any claim that
(A) the suit, action or proceeding in such court is brought in an inconvenient
forum, (B) the venue of such suit, action or proceeding is improper, or (C) this
Agreement, or the subject matter hereof, may not be enforced in or by such
courts.
10.     Counterparts. This Agreement may be executed in one or more counterparts
which together shall constitute a single agreement.

11.   Entire Agreement; Amendment and Waiver; Successors and Assigns.

          This Agreement contains the entire understanding of the parties hereto
with respect to its subject matter. There are no restrictions, agreements,
promises, representations, warranties, covenants or undertakings between the
Parties other than those expressly set forth herein. No modifications of this
Agreement can be made except in writing signed by an authorized representative
of each the Company and the Ramius Group. No failure on the part of any Party to
exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of such
right, power or remedy by such Party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided by
law. The terms and conditions of this Agreement shall be binding upon, inure to
the benefit of, and be enforceable by the Parties hereto and their respective
successors, heirs, executors, legal representatives, and permitted assigns. No
Party shall assign this Agreement or any rights or obligations hereunder
without, with respect to any member of the Ramius Group, the prior written
consent of the Company, and with respect to the Company, the prior written
consent of the Ramius Group.

12.   Nondisparagement.

          For a period beginning on the effective date of this Agreement and
ending on the date that is twenty (20) business days prior to the shareholder
nomination deadline for the 2012 Annual Meeting, each of the Parties covenants
and agrees that, for so long as either of the New Appointees or their respective
Replacement Director(s) is serving as a member of the Board, neither it nor any
of its respective subsidiaries, affiliates, successors, assigns, officers, key
employees or directors shall in any way publicly disparage, attempt to
discredit, or otherwise call into disrepute, the other Parties or such other
Parties’ subsidiaries, affiliates, successors, assigns, officers (including any
current officer of a Party or a Parties’ subsidiaries who no longer serves

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in such capacity following the execution of this Agreement), directors
(including any current director of a Party or a Parties’ subsidiaries who no
longer serves in such capacity following the execution of this Agreement),
employees, shareholders, agents, attorneys or representatives, or any of their
products or services, in any manner that would damage the business or reputation
of such other Parties, their products or services or their subsidiaries,
affiliates, successors, assigns, officers (or former officers), directors (or
former directors), employees, shareholders, agents, attorneys or
representatives.
[The remainder of this page intentionally left blank]

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          IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized signatories of the parties as of the date
hereof.

            SURMODICS, INC.
      By:   /s/ Philip D. Ankeny         Name:   Philip D. Ankeny       
Title:   Senior Vice President and
Chief Financial Officer     

THE RAMIUS GROUP:

              RAMIUS VALUE AND OPPORTUNITY
MASTER FUND LTD   RAMIUS ADVISORS, LLC
 
           
By:
  Ramius Value and Opportunity Advisors LLC,   By:   Ramius LLC,
 
  its investment manager       its sole member
 
            RAMIUS VALUE AND OPPORTUNITY
ADVISORS LLC   RAMIUS LLC
 
           
By:
  Ramius LLC   By:   Cowen Group, Inc.,
 
  its sole member       its sole member
 
            COWEN OVERSEAS INVESTMENT LP   COWEN GROUP, INC.
 
           
By:
  Ramius Advisors, LLC,        
 
  its general partner        
 
                    RCG HOLDINGS LLC
 
           
 
      By:   C4S & Co., L.L.C.,
 
          its managing member

            C4S & Co., L.L.C.
      By:   /s/ Owen S. Littman         Name:   Owen S. Littman        Title:  
Authorized Signatory     

                /s/ Owen S. Littman       Name:   Owen S. Littman        As
attorney-in-fact for Jeffrey M. Solomon, Peter A. Cohen, Morgan B. Stark, Thomas
W. Strauss and David Dantzker, M.D.            /s/ Jeffrey C. Smith      
JEFFREY C. SMITH             

Signature Page — Agreement

 

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EXHIBIT A
The Ramius Group

          Name   Shares
 
       
Ramius Value and Opportunity Master Fund Ltd
    1,566,567  
Cowen Overseas Investment LP
    522,193  
Ramius Value and Opportunity Advisors LLC
    1,566,567  
Ramius Advisors, LLC
    522,193  
Ramius LLC
    2,088,760  
Cowen Group, Inc.
    2,088,760  
RCG Holdings LLC
    2,088,760  
C4S & Co., L.L.C.
    2,088,760  
Peter A. Cohen
    2,088,760  
Morgan B. Stark
    2,088,760  
Thomas W. Strauss
    2,088,760  
Jeffrey M. Solomon
    2,088,760  
Jeffrey C. Smith
    0  
David Dantzker, M.D.
    500  

EXHIBIT A

 

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EXHIBIT B
Mutual Press Release
EXHIBIT B