Exhibit 10.2

 

 

CUTERA, INC.

 

CHANGE OF CONTROL AND SEVERANCE AGREEMENT

 

This Change of Control and Severance Agreement (the “Agreement”) is made and
entered into by and between Mr. Dave Mowry (“Employee”) and Cutera, Inc., a
Delaware corporation (the “Company”), effective as of date that Employee
commences employment with the Company (the “Effective Date”).

 

RECITALS

 

A.     The Company may from time to time consider the possibility of an
acquisition by another company or other change of control, or may terminate
Employee’s employment without cause or may cause Employee to resign his or her
employment as a result of actions taken by the Company that materially and
negatively change Employee’s employment relationship with the Company. The
Compensation Committee of the Board of Directors of the Company (the
“Committee”) recognizes that the risk of such events occurring can be a
distraction to Employee and can cause Employee to consider alternative
employment opportunities. The Committee 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 Employee, notwithstanding the
possibility that such events may occur.

 

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

 

C.     The Committee believes that it is imperative to provide Employee with
certain severance benefits in certain instances upon Employee’s termination of
employment. These benefits will provide Employee with enhanced financial
security and incentive and encouragement to remain with the Company
notwithstanding the possibility that certain events may occur that lead to the
termination of Employee’s employment.

 

D.     Certain capitalized terms used in the Agreement are defined in Section 6
below.

 

E.     This Agreement supersedes and replaces, in its entirety, any prior
agreement between the Company and Employee relating to the subject matter that
is contained in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:

 

1.     Term of Agreement. This Agreement will have an initial term of four (4)
years commencing on the Effective Date (the “Initial Term”). On the fourth
anniversary of the Effective Date, this Agreement will renew automatically for
additional one (1) year terms (each, an “Additional Term”) unless either party
provides the other party with written notice of non-renewal at least sixty (60)
days prior to the date of automatic renewal. Notwithstanding the foregoing
sentence, if a Change of Control occurs at any time during either the Initial
Term or an Additional Term, the term of this Agreement will extend automatically
through the date that is twelve (12) months following the effective date of the
Change of Control. If Employee becomes entitled to benefits under Section 4
during the term of this Agreement, the Agreement will not terminate until all of
the obligations of the parties hereto with respect to this Agreement have been
satisfied.

 

 

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2.     At-Will Employment. The Company and Employee acknowledge that Employee’s
employment is and will continue to be at-will, as defined under applicable law.
If Employee’s employment terminates for any reason, including (without
limitation) any termination prior to or following a Change of Control as
provided herein, Employee will not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this Agreement or as
provided in any employment agreement entered into between the Company and
Employee, and the payment of accrued but unpaid wages, as required by law, and
any unreimbursed reimbursable expenses.

 

3.     Change of Control. In the event of a Change of Control, with respect to
any equity awards granted to Employee by the Company during the twelve (12)
month period occurring immediately prior to the date of the Change of Control
that, as of the Change of Control, are outstanding and, but for this Section 3,
would be subject to achievement of performance-based vesting conditions (other
than continued service), but excluding any performance-based restricted stock
unit granted to Employee as a “New Employee Grant” as referenced in the offer
letter between Employee and the Company dated June 22, 2019 (such
performance-based awards other than the “New Employee Grant,” the “Performance
Awards”), (a) any portion of such Performance Awards for which the performance
period is ongoing as of the date of the Change of Control (the “Eligible
Portion”) will be shortened to a date determined by the Board or Committee, in
its sole discretion, that occurs shortly before the date of the Change of
Control (up to ten (10) days prior to the date of the Change of Control),
(b) the Board or Committee, in its sole discretion, will determine the extent to
which the applicable performance criteria for such shortened performance period,
prorated or otherwise appropriately adjusted to reflect the shortened
performance period, have been achieved, (c) the Eligible Portion will vest as of
immediately prior to the Change of Control to the extent that such applicable
performance criteria have been met, and (d) any remaining portion of the
Performance Awards that has not vested prior to the Change of Control will
terminate.

 

4.     Severance Benefits.

 

(a)     Termination without Cause Not in Connection with a Change of Control. If
the Company terminates Employee’s employment with the Company without Cause (and
other than due to his death or Disability) other than during the period
beginning three (3) months before, and ending twelve (12) months following, a
Change of Control (such period, the “Change of Control Period”), and Employee
signs and does not revoke a release of claims with the Company (in substantially
the same form as set forth in Exhibit A) (the “Release”) and provided that such
Release becomes effective and irrevocable no later than sixty (60) days
following Employee’s termination date (such deadline, the “Release Deadline”),
then subject to this Section 4, Employee will receive the following:

 

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(i)     Severance Payment. Employee will receive a lump-sum payment equal to the
sum of (A) twelve (12) months of Employee’s annual base salary as in effect
immediately prior to Employee’s termination date, less applicable withholdings,
(B) one hundred percent (100%) of Employee’s actual bonus for the prior fiscal
year of the Company, less applicable withholdings, and (C) the product of (x)
twelve (12) months, multiplied by (y) the amount of monthly premium that
Employee otherwise would be required to pay for Employee and any of Employee’s
eligible dependents (if applicable) for the first month of Company group health
care coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended (“COBRA”), without regard to whether Employee elects continued health
coverage under COBRA for Employee and any of Employee’s eligible dependents less
to applicable withholdings.

 

(ii)     Accrued Compensation. The Company will pay Employee all accrued but
unpaid vacation, expense reimbursements, wages, and other benefits due to
Employee under any Company-provided plans, policies, and arrangements.

 

(b)     Termination without Cause or Resignation for Good Reason in Connection
with a Change of Control. If the Company terminates Employee’s employment with
the Company without Cause (and other than due to his death or Disability) or if
Employee resigns from such employment for Good Reason, and such termination
occurs during the Change of Control Period, and Employee signs and does not
revoke the Release and provided that such Release becomes effective and
irrevocable no later than the Release Deadline, then subject to this Section 4,
Employee will receive the following:

 

(i)     Severance Payment. Employee will receive a lump-sum payment equal to the
sum of (A) twelve (12) months of Employee’s annual base salary as in effect
immediately prior to Employee’s termination date or, if greater, at the level in
effect immediately prior to the Change of Control, less applicable withholdings,
(B) one hundred percent (100%) of Employee’s actual bonus for the prior fiscal
year of the Company, less applicable withholdings, and (C) the product of (x)
twelve (12) months, multiplied by (y) the amount of monthly premium that
Employee otherwise would be required to pay for Employee and any of Employee’s
eligible dependents (if applicable) for the first month of Company group health
care coverage under COBRA, without regard to whether Employee elects continued
health coverage under COBRA for Employee and any of Employee’s eligible
dependents, less applicable withholdings.

 

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(ii)     Vesting Acceleration of Equity Awards. The forfeiture restrictions on
all shares of time-based vesting restricted stock as to which such restrictions
remain in place that are outstanding as of the date of termination of Employee’s
employment with the Company will lapse immediately, and all unvested, time-based
vesting stock options, restricted stock units, and other similar equity awards
granted by the Company that are outstanding as of the date of termination of
Employee’s employment with the Company will vest immediately as to one hundred
percent (100%) of the shares subject thereto. Except as may be set forth in an
award agreement or other agreement between the Company and Employee any equity
awards that are to vest, and/or for which the amount of the awards to vest is to
be determined, based on the achievement of performance criteria (e.g., PSU) as
of the date of termination of Employee’s employment with the Company shall not
be eligible for the vesting acceleration described in this Section 4(b). If
Employee is terminated for Cause or due to death or Disability, resigns with or
without Good Reason outside of the Change of Control Period, or resigns without
Good Reason during the Change of Control Period, then the unvested equity awards
that are outstanding as of the date of employment termination shall terminate
immediately pursuant to their terms. If Employee’s employment has been
terminated by the Company without Cause (and other than due to his death or
Disability) or by Employee for Good Reason prior to a Change of Control, then
Employee’s unvested, time-based equity awards will remain outstanding and
unvested for an additional three (3) months following termination (but in no
event beyond each such equity award’s original maximum term to expiration, if
applicable) solely for purposes of determining whether a Change of Control
occurs during such period. For the avoidance of doubt, the immediately preceding
sentence will not apply to any Performance Awards. If a Change of Control does
not occur during the three (3) month period following Employee’s termination
then the unvested, time-based equity awards shall terminate at the end of such
period. If Employee’s employment has been terminated by the Company without
Cause (and other than due to his death or Disability) or by Employee for Good
Reason and a Change of Control occurs during such three (3) month period
following termination, such unvested, time-based equity awards that are
outstanding as of the date of termination of Employee’s employment with the
Company (and are still within their maximum term to expiration) shall accelerate
vesting in accordance with the terms of this Section 4.

 

(iii)     Accrued Compensation. The Company will pay Employee all accrued but
unpaid vacation, expense reimbursements, wages, and other benefits due to
Employee under any Company-provided plans, policies, and arrangements.

 

(c)     Timing of Payments.

 

(i)     If the Release does not become effective and irrevocable by the Release
Deadline, Employee will forfeit any rights to severance or benefits under this
Agreement other than the accrued compensation set forth in Section 4(a)(ii) and
Section 4(b)(iii). In no event will severance payments or benefits be paid or
provided until the Release becomes effective and irrevocable.

 

(ii)     Unless otherwise required by Section 4(g), the Company will pay any
severance payments set forth in Section 4(a)(i) and Section 4(b)(i) in a
lump-sum payment payable within sixty (60) days following Employee’s termination
date; provided, however, that no severance or other benefits, other than the
accrued compensation set forth in Section 4(a)(ii) and Section 4(b)(iii), will
be paid or provided until the Release in Section 4(a) and Section 4(b) becomes
effective and irrevocable. If Employee should die before all of the severance
amounts have been paid, such unpaid amounts will be paid in a lump-sum payment
promptly following such event to Employee’s designated beneficiary, if living,
or otherwise to the personal representative of Employee’s estate.

 

(d)     Voluntary Resignation; Termination for Cause. If Employee’s employment
with the Company terminates (i) voluntarily by Employee (with or without Good
Reason) outside of the Change of Control Period or by Employee other than for
Good Reason during the Change of Control Period, or (ii) for Cause by the
Company, then Employee will not be entitled to receive severance or other
benefits except for those (if any) as may then be established under the
Company’s then existing severance and benefits plans and practices or pursuant
to other written agreements with the Company.

 

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(e)     Disability; Death. If the Company terminates Employee’s employment as a
result of Employee’s Disability, or Employee’s employment terminates due to his
or her death, then Employee will not be entitled to receive any other severance
or other benefits except for those (if any) as may then be established under the
Company’s then existing written severance and benefits plans and practices or
pursuant to other written agreements with the Company.

 

(f)     Exclusive Remedy. In the event of a termination of Employee’s employment
as set forth in Section 4(a) and Section 4(b) of this Agreement, the provisions
of this Section 4 are intended to be and are exclusive and in lieu of any other
rights or remedies to which Employee or the Company otherwise may be entitled,
whether at law, tort or contract, in equity, or under this Agreement (other than
the payment of accrued but unpaid wages, as required by law, and any
unreimbursed reimbursable expenses). Employee will be entitled to no benefits,
compensation or other payments or rights upon a termination of employment prior
to or following a Change of Control other than those benefits expressly set
forth in Section 4 of this Agreement. For purposes of clarity, in the event a
termination of Employee’s employment as set forth in Section 4(a) or
Section 4(b) of this Agreement occurs during the period within three (3) months
prior to a Change of Control, any severance payments and benefits to be provided
to Employee under Section 4(b) will be reduced by any amounts that already were
provided to Employee under Section 4(a).

 

(g)     Section 409A.

 

(i)     Notwithstanding anything to the contrary in this Agreement, no severance
pay or benefits to be paid or provided to Employee, if any, pursuant to this
Agreement that, when considered together with any other severance payments or
separation benefits are considered deferred compensation under Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”), and the final
regulations and any guidance promulgated thereunder (“Section 409A”) (together,
the “Deferred Compensation Separation Benefits”) will be paid or otherwise
provided until Employee has a “separation from service” within the meaning of
Section 409A. Similarly, no severance payable to Employee, if any, pursuant to
this Agreement that otherwise would be exempt from Section 409A pursuant to
Treasury Regulation Section 1.409A-1(b)(9) will be payable until Employee has a
“separation from service” within the meaning of Section 409A.

 

(ii)     Any severance payments or benefits under this Agreement that would be
considered Deferred Compensation Severance Benefits will be paid on, or, in the
case of installments, will not commence until, the sixtieth (60th) day following
Employee’s separation from service, or, if later, such time as required by
Section 4(g)(iii). Except as required by Section 3(g)(iii), any installment
payments that would have been made to Employee during the sixty (60) day period
immediately following Employee’s separation from service but for the preceding
sentence will be paid to Employee on the sixtieth (60th) day following
Employee’s separation from service and the remaining payments shall be made as
provided in this Agreement.

 

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(iii)     Notwithstanding anything to the contrary in this Agreement, if
Employee is a “specified employee” within the meaning of Section 409A at the
time of Employee’s termination (other than due to death), then the Deferred
Compensation Separation Benefits that are payable within the first six (6)
months following Employee’s separation from service, will become payable on the
first payroll date that occurs on or after the date six (6) months and one (1)
day following the date of Employee’s separation from service. All subsequent
Deferred Compensation Separation Benefits, if any, will be payable in accordance
with the payment schedule applicable to each payment or benefit. Notwithstanding
anything herein to the contrary, if Employee dies following Employee’s
separation from service, but prior to the six (6) month anniversary of the
separation from service, then any payments delayed in accordance with this
paragraph will be payable in a lump sum as soon as administratively practicable
after the date of Employee’s death and all other Deferred Compensation
Separation Benefits will be payable in accordance with the payment schedule
applicable to each payment or benefit. Each payment, installment and benefit
payable under this Agreement is intended to constitute a separate payment for
purposes of Section 1.409A-2(b)(2) of the Treasury Regulations. To the extent
necessary to comply with Section 409A, references to the termination of
Employee’s employment with the Company or similar terms shall mean a “separation
from service” within the meaning of Section 409A.

 

(iv)     Any amount paid under this Agreement that satisfies the requirements of
the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the
Treasury Regulations will not constitute Deferred Compensation Separation
Benefits for purposes of clause (i) above. It is the intent of this Agreement
that all cash severance payments under Sections 4(a)(i) and 4(b)(i) will satisfy
the requirements of the “short-term deferral” rule.

 

(v)     Any amount paid under this Agreement that qualifies as a payment made as
a result of an involuntary separation from service pursuant to Section
1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section
409A Limit (as defined below) will not constitute Deferred Compensation
Separation Benefits for purposes of clause (i) above.

 

(vi)     The foregoing provisions are intended to be exempt from or comply with
the requirements of Section 409A so that none of the severance payments and
benefits to be provided hereunder will be subject to the additional tax imposed
under Section 409A, and any ambiguities or ambiguous terms herein will be
interpreted to be exempt or so comply. The Company and Employee agree to work
together in good faith to consider amendments to this Agreement and to take such
reasonable actions which are necessary, appropriate or desirable to avoid
imposition of any additional tax or income recognition prior to actual payment
to Employee under Section 409A. In no event will the Company or any of its
parent, subsidiaries or affiliates have any liability or obligation to
reimburse, indemnify, or hold harmless Employee for any taxes, penalties, or
interest imposed, or other costs incurred, as a result of Section 409A.

 

(h)     Other Requirements. Employee’s receipt of any payments or benefits under
this Section 4 will be subject to Employee continuing to comply with the terms
of any confidential information agreement executed by Employee in favor of the
Company and the provisions of this Agreement.

 

5.     Limitation on Payments. In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to Employee (i)
constitute “parachute payments” within the meaning of Section 280G of the Code,
and (ii) but for this Section 5, would be subject to the excise tax imposed by
Section 4999 of the Code, then Employee’s benefits under Section 4 will be
either:

 

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(a)     delivered in full, or

 

(b)     delivered as to such lesser extent which would result in no portion of
such benefits being subject to the excise tax under Section 4999 of the Code,

 

whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the excise tax imposed by Section 4999, results
in the receipt by Employee on an after-tax basis, of the greatest amount of
benefits, notwithstanding that all or some portion of such benefits may be
taxable under Section 4999 of the Code. If a reduction in severance and other
benefits constituting “parachute payments” is necessary so that benefits are
delivered to a lesser extent, reduction will occur in the following order:
(i) reduction of cash payments in reverse chronological order (that is, the cash
payment owed on the latest date following the occurrence of the event triggering
the Excise Tax will be the first cash payment to be reduced); (ii) cancellation
of equity awards that were granted “contingent on a change in ownership or
control” within the meaning of Section 280G of the Code in the reverse order of
date of grant of the awards (that is, the most recently granted equity awards
will be cancelled first); (iii) reduction of the accelerated vesting of equity
awards in the reverse order of date of grant of the awards (that is, the vesting
of the most recently granted equity awards will be cancelled first); and
(iv) reduction of employee benefits in reverse chronological order (that is, the
benefit owed on the latest date following the occurrence of the event triggering
the Excise Tax will be the first benefit to be reduced). In no event shall
Employee have any discretion with respect to the ordering of payment reductions.
Employee will be solely responsible for the payment of all personal tax
liability that is incurred as a result of the payments and benefits received
under this Agreement, and Employee will not be reimbursed, indemnified, or held
harmless by the Company for any of those payments of personal tax liability.

 

Unless the Company and Employee otherwise agree in writing, any determination
required under this Section 5 will be made in writing by nationally recognized
accounting or valuation firm selected by the Company or such other person or
entity to which the parties mutually agree (the “Accountants”), whose
determination will be conclusive and binding upon Employee and the Company for
all purposes. For purposes of making the calculations required by this Section
5, the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code. The Company
and Employee will furnish to the Accountants such information and documents as
the Accountants may reasonably request in order to make a determination under
this Section. The Company will bear the costs and make all payments for the
Accountants’ services in connection with any calculations contemplated by this
Section. The Company will have no liability to Employee for the determinations
of the Accountants.

 

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

 

(a)     Cause. “Cause” will mean Employee’s termination only upon:

 

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(i)     Employee’s willful failure to substantially perform Employee’s duties
(subject to notice and a reasonable period to cure), other than a failure
resulting from Employee’s complete or partial incapacity due to physical or
mental illness or impairment.

 

(ii)     Employee’s willful act which constitutes gross misconduct and which is
injurious to the Company;

 

(iii)     Employee’s willful breach of a material provision of this Agreement
(subject to notice and reasonable period to cure); or

 

(iv)     Employee’s knowing, material and willful violation of a federal or
state law or regulation applicable to the business of the Company.

 

(b)     Change of Control. “Change of Control” will mean the occurrence of any
of the following events:

 

(i)     Change in Ownership of the Company. A change in the ownership of the
Company which occurs on the date that any one person, or more than one person
acting as a group (“Person”), acquires ownership of the stock of the Company
that, together with the stock held by such Person, constitutes more than 50% of
the total voting power of the stock of the Company, except that any change in
the ownership of the stock of the Company as a result of a private financing of
the Company that is approved by the Company’s Board of Directors (the “Board”)
will not be considered a Change of Control; or

 

(ii)     Change in Effective Control of the Company. A change in the effective
control of the Company which occurs on the date that a majority of members of
the Board is replaced during any twelve (12) month period by directors whose
appointment or election is not endorsed by a majority of the members of the
Board prior to the date of the appointment or election. For purposes of this
clause (ii), if any Person is considered to be in effective control of the
Company, the acquisition of additional control of the Company by the same Person
will not be considered a Change of Control; or

 

(iii)     Change in Ownership of a Substantial Portion of the Company’s Assets.
A change in the ownership of a substantial portion of the Company’s assets which
occurs on the date that any Person acquires (or has acquired during the twelve
(12) month period ending on the date of the most recent acquisition by such
person or persons) assets from the Company that have a total gross fair market
value equal to or more than 50% of the total gross fair market value of all of
the assets of the Company immediately prior to such acquisition or acquisitions.
For purposes of this subsection (iii), gross fair market value means the value
of the assets of the Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.

 

For these purposes, persons will be considered to be acting as a group if they
are owners of a corporation that enters into a merger, consolidation, purchase
or acquisition of stock, or similar business transaction with the Company.

 

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Notwithstanding the foregoing provisions of this definition, a transaction will
not be deemed a Change of Control unless the transaction qualifies as a change
in control event within the meaning of Section 409A.

 

(c)     Disability. “Disability” will mean that Employee is unable to engage in
any substantial gainful activity, and specifically, the essential functions of
Employee’s position, with or without reasonable accommodation, by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than twelve (12) months. Termination resulting from Disability may only be
effected after at least thirty (30) days’ written notice by the Company of its
intention to terminate Employee’s employment. In the event that Employee resumes
the performance of substantially all of his or her duties hereunder before the
termination of his or her employment becomes effective, the notice of intent to
terminate will automatically be deemed to have been revoked.

 

(d)     Good Reason. “Good Reason” will mean Employee’s termination of
employment within ninety (90) days following the expiration of any cure period
(discussed below) following the occurrence of one or more of the following,
without Employee’s consent:

 

(i)     A material reduction in Employee’s authority, duties, or
responsibilities relative to duties, position or responsibilities in effect
immediately prior to such reduction;

 

(ii)     A material reduction in Employee’s cash compensation as in effect
immediately prior to such reduction; or

 

(iii)     A material change in the geographic location at which Employee must
perform services (in other words, the relocation of Employee to a facility that
is more than fifty (50) miles from Employee’s then-current location).

 

Employee will not resign for Good Reason without first providing the Company
with written notice within ninety (90) days of the event that Employee believes
constitutes “Good Reason” specifically identifying the acts or omissions
constituting the grounds for Good Reason and a reasonable cure period of not
less than thirty (30) days following the date of such notice and such grounds
for “Good Reason” have not been cured during such cure period.

 

(e)     Section 409A Limit. “Section 409A Limit” will mean the lesser of two (2)
times: (i) Employee’s annualized compensation based upon the annual rate of pay
paid to Employee during the Employee’s taxable year preceding the Employee’s
taxable year of Employee’s separation from service as determined under, and with
such adjustments as are set forth in, Treasury Regulation Section
1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with
respect thereto; or (ii) the maximum amount that may be taken into account under
a qualified plan pursuant to Section 401(a)(17) of the Code for the year in
which Employee’s separation from service occurred.

 

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7.     Successors.

 

(a)     The Company’s Successors. Any successor to the Company (whether direct
or indirect and whether by purchase, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company’s business and/or assets
will 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. For all purposes under this Agreement, the term “Company” will
include any successor to the Company’s business and/or assets which executes and
delivers the assumption agreement described in this Section 7(a) or which
becomes bound by the terms of this Agreement by operation of law.

 

(b)     Employee’s Successors. The terms of this Agreement and all rights of
Employee hereunder will inure to the benefit of, and be enforceable by,
Employee’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.

 

8.     Arbitration.

 

(a)     The Company and Employee each agree that any and all disputes arising
out of the terms of this Agreement, Employee’s employment by the Company,
Employee’s service as an officer or director of the Company, or Employee’s
compensation and benefits, their interpretation and any of the matters herein
released, will be subject to binding arbitration under the arbitration rules set
forth in California Code of Civil Procedure Sections 1280 through 1294.2,
including Section 1281.8 (the “Act”), and pursuant to California law. Disputes
that the Company and Employee agree to arbitrate, and thereby agree to waive any
right to a trial by jury, include any statutory claims under local, state, or
federal law, including, but not limited to, claims under Title VII of the Civil
Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age
Discrimination in Employment Act of 1967, the Older Workers Benefit Protection
Act, the Sarbanes-Oxley Act, the Worker Adjustment and Retraining Notification
Act, the California Fair Employment and Housing Act, the Family and Medical
Leave Act, the California Family Rights Act, the California Labor Code, claims
of harassment, discrimination, and wrongful termination, and any statutory or
common law claims. The Company and Employee further understand that this
agreement to arbitrate also applies to any disputes that the Company may have
with Employee. The Company and Employee further agree that, to the fullest
extent permitted by law, Employee may bring any arbitration proceeding only in
Employee’s individual capacity, and not as a plaintiff, representative, or class
member in any purported class, collective, or representative lawsuit or
proceeding. Nothing in this agreement prevents Employee from bringing a
representative lawsuit or proceeding as permitted by the California Labor Code’s
Private Attorneys General Act of 2004.

 

(b)     Procedure. The Company and Employee agree that any arbitration will be
administered by Judicial Arbitration & Mediation Services, Inc. (“JAMS”),
pursuant to its Employment Arbitration Rules & Procedures (the “JAMS Rules”).
The Arbitrator will have the power to decide any motions brought by any party to
the arbitration, including motions for summary judgment and/or adjudication,
motions to dismiss and demurrers, and motions for class certification, prior to
any arbitration hearing. The Arbitrator will have the power to award any
remedies available under applicable law, and the Arbitrator will award
attorneys’ fees and costs to the prevailing party, except as prohibited by law.
The Company will pay for any administrative or hearing fees charged by the
Arbitrator or JAMS except that Employee will pay any filing fees associated with
any arbitration that Employee initiates, but only so much of the filing fees as
Employee would have instead paid had he or she filed a complaint in a court of
law. The Arbitrator will administer and conduct any arbitration in accordance
with California law, including the California Code of Civil Procedure, and the
Arbitrator will apply substantive and procedural California law to any dispute
or claim, without reference to rules of conflict of law. To the extent that the
JAMS Rules conflict with California law, California law will take precedence.
The decision of the Arbitrator will be in writing. Any arbitration under this
Agreement will be conducted in San Mateo County, California.

 

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(c)     Remedy. Except as provided by the Act and this Agreement, arbitration
will be the sole, exclusive, and final remedy for any dispute between Employee
and the Company. Accordingly, except as provided for by the Act and this
Agreement, neither Employee nor the Company will be permitted to pursue court
action regarding claims that are subject to arbitration.

 

(d)     Administrative Relief. Employee understands that this Agreement does not
prohibit him or her from pursuing any administrative claim with a local, state,
or federal administrative body or government agency that is authorized to
enforce or administer laws related to employment, including, but not limited to,
the Department of Fair Employment and Housing, the Equal Employment Opportunity
Commission, the National Labor Relations Board, or the Workers’ Compensation
Board. This Agreement does, however, preclude Employee from pursuing court
action regarding any such claim, except as permitted by law.

 

(e)     Voluntary Nature of Agreement. Each of the Company and Employee
acknowledges and agrees that such party is executing this Agreement voluntarily
and without any duress or undue influence by anyone. Employee further
acknowledges and agrees that he or she has carefully read this Agreement and has
asked any questions needed for him or her to understand the terms, consequences,
and binding effect of this Agreement and fully understand it, including that
Employee is waiving his or her right to a jury trial. Finally, Employee agrees
that he or she has been provided an opportunity to seek the advice of an
attorney of his or her choice before signing this Agreement.

 

9.     Notice.

 

(a)     General. Notices and all other communications contemplated by this
Agreement will be in writing and will be deemed to have been duly given when
personally delivered when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid or when delivered by a private courier
service such as UPS, DHL or Federal Express that has tracking capability. In the
case of Employee, mailed notices will be addressed to him or her at the home
address which he or she most recently communicated to the Company in writing. In
the case of the Company, mailed notices will be addressed to its corporate
headquarters, and all notices will be directed to the attention of its
President.

 

(b)     Notice of Termination. Any termination by the Company for Cause or by
Employee for Good Reason will be communicated by a notice of termination to the
other party hereto given in accordance with Section 9(a) of this Agreement. Such
notice will indicate the specific termination provision in this Agreement relied
upon, will set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination under the provision so indicated, and will
specify the termination date (which will be not more than ninety (90) days after
the giving of such notice). The failure by Employee to include in the notice any
fact or circumstance which contributes to a showing of Good Reason will not
waive any right of Employee hereunder or preclude Employee from asserting such
fact or circumstance in enforcing his or her rights hereunder.

 

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10.     Miscellaneous Provisions.

 

(a)     No Duty to Mitigate. Employee will not be required to mitigate the
amount of any payment contemplated by this Agreement, nor will any such payment
be reduced by any earnings that Employee may receive from any other source.

 

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

 

(c)     Headings. All captions and section headings used in this Agreement are
for convenient reference only and do not form a part of this Agreement.

 

(d)     Entire Agreement. This Agreement constitutes the entire agreement of the
parties hereto and supersedes in their entirety all prior representations,
understandings, undertakings or agreements (whether oral or written and whether
expressed or implied) of the parties with respect to the subject matter hereof.
No waiver, alteration, or modification of any of the provisions of this
Agreement will be binding unless in writing and signed by duly authorized
representatives of the parties hereto and which specifically mention this
Agreement.

 

(e)     Choice of Law. The validity, interpretation, construction and
performance of this Agreement will be governed by the laws of the State of
California (with the exception of its conflict of laws provisions). Any claims
or legal actions by one party against the other arising out of the relationship
between the parties contemplated herein (whether or not arising under this
Agreement) will be commenced or maintained in any state or federal court located
in the jurisdiction where Employee resides, and Employee and the Company hereby
submit to the jurisdiction and venue of any such court.

 

(f)     Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement will not affect the validity or enforceability of
any other provision hereof, which will remain in full force and effect.

 

(g)     Withholding. All payments made pursuant to this Agreement will be
subject to withholding of applicable income, employment and other taxes.

 

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

 

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(i)     Protected Activity. Nothing in this Agreement is intended to limit
Employee’s rights to discuss the terms, wages, and working conditions of his
employment, nor to deny him the right to disclose information pertaining to
sexual harassment or any unlawful or potentially unlawful conduct, as protected
by applicable law. Nothing in this Agreement limits or prohibits Employee from
filing and/or pursuing a charge or complaint with, or otherwise communicating or
cooperating with or participating in any investigation or proceeding that may be
conducted by, any federal, state or local government agency or commission,
including the Securities and Exchange Commission, the Equal Employment
Opportunity Commission, the Occupational Safety and Health Administration, and
the National Labor Relations Board (“Government Agencies”), including disclosing
documents or other information as permitted by law, without giving notice to, or
receiving authorization from, the Company. Notwithstanding, in making any such
disclosures or communications, Employee to take all reasonable precautions to
prevent any unauthorized use or disclosure of any information that may
constitute the Company’s confidential information to any parties other than the
Government Agencies. Employee further understands that Employee is not permitted
to disclose the Company’s attorney-client privileged communications or attorney
work product.

 

 

 

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 set forth
below.

 

COMPANY:   EMPLOYEE:           Cutera, Inc.                           By: /s/
Greg Barrett    By: /s/ Dave Mowry           Name: Greg Barrett    Name: Dave
Mowry           Title: For the Cutera Board of Directors      

          

 

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EXHIBIT A

 

RELEASE

 

1.     Release of All Claims. In consideration for the benefits to which
Employee is entitled pursuant to that certain CHANGE OF CONTROL AND SEVERANCE
AGREEMENT dated ____________, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Employee, for Employee
and Employee’s heirs, assigns, and all persons and entities claiming by,
through, or under Employee, hereby irrevocably, unconditionally, and completely
releases, discharges, and agrees to hold harmless the Company and its Affiliates
(hereinafter referred to, both individually and collectively, as “Releasees”) of
and from any and all claims, liabilities, charges, demands, grievances,
lawsuits, and causes of action of any kind or nature whatsoever, including
without limitation claims for contribution, subrogation, or indemnification,
whether direct or indirect, liquidated or unliquidated, known or unknown, which
Employee has, had, or may claim to have against Releasees (hereinafter
collectively referred to as “Claim(s)”).

 

2.     The release, discharge, and agreement to hold harmless set forth in this
Section 2 includes, without limitation, any Claim(s) that Employee had, has, or
may claim to have against Releasees:

 

a.     for wrongful or constructive discharge or termination, negligent or
intentional infliction of emotional distress, breach of express or implied
contract, breach of the covenant of good faith and fair dealing, violation of
public policy, defamation, promissory estoppel, detrimental reliance,
retaliation, tortious interference with contract or prospective economic
advantage, invasion of privacy, whistleblower protection, hostile work
environment, personal injury (whether physical or mental), or any other
Claim(s), whether arising in tort or in contract;

 

b.     for discrimination, hostile work environment / harassment, retaliation,
or otherwise arising under federal, state, or local law, including without
limitation Title VII of the Civil Rights Act of 1964, the Civil Rights Act of
1991, the Equal Pay Act, all claims under Titles 29 and 42 of the United States
Code, the Americans with Disabilities Act of 1990, the Rehabilitation Act of
1973, or any other federal, state, or local law prohibiting discrimination,
harassment, or retaliation on the basis of race, color, national origin,
religion, age, sex, sexual orientation, gender identity, disability, veteran
status, or any other protected group status;

 

c.     for discrimination, hostile work environment / harassment, retaliation,
or otherwise arising under the Age Discrimination in Employment Act, as amended
by the Older Workers Benefit Protection Act arising on or before the date of
this Agreement; and/or

 

d.     arising under the Employee Retirement Income Security Act (“ERISA”);

 

e.     arising under the Family and Medical Leave Act (“FMLA”);

 

f.     arising under any state or local employment and antidiscrimination law;

 

 

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g.     arising under the Dodd-Frank Wall-Street Reform and Consumer Protection
Act or other whistleblower protection to the full extent allowed by law;

 

h.     for unpaid wages, bonuses, commissions, or other compensation of any type
or kind to the full extent allowed by law;

 

i.     for attorney’s fees and/or costs;

 

j.     for any other Claim(s) in any way related to or arising out of Employee’s
employment with the Company or the termination of that employment;

 

k.     Arising under the California Fair Employment and Housing Act; and/or

 

l.     Arising under the federal Worker Adjustment and Retraining Notification
Act (29 U.S. Code Chapter 23)(“WARN Act”) and California Labor Code §§ 1400 et
seq. (“Cal-WARN Act”), which may entitle employee to 60 days advance notice
prior to termination.

 

3.     Employee hereby waives the provisions of section 1542 of the California
Civil Code, which states: “A general release does not extend to claims which the
creditor does not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have materially
affected his or her settlement with the debtor.”

 

4.     Nothing in this Agreement waives Employee’s rights, if any, to (i)
continue Employee’s participation in the Company’s employee health benefit plan,
as allowed by COBRA and the terms, conditions, and limitations of the plan, (ii)
any vested rights that Employee may have under any employee pension or welfare
benefit plan in which Employee participated as an employee of the Company,
and/or (iii) any claims Employee has or may claim to have for worker’s
compensation or unemployment benefits, and/or (iv) any claims that are
non-waivable by law.

 

5.     Exclusion for Certain Claims. Notwithstanding the foregoing, the Company
and Employee agree that the releases set forth in Sections 1 and 2 above do not
apply to any claims arising after the Employee’s termination date, nor does
anything herein prevent Employee or the Company from instituting any action to
enforce the terms of this Agreement. The Parties agree and acknowledge that the
release and waiver set forth in Sections 1 and 2 above do not prevent Employee
from filing a charge of discrimination with or from participating or otherwise
cooperating in any investigation or proceeding conducted by the Equal Employment
Opportunity Commission, the California Department of Fair Employment and
Housing, or any other comparable federal, state, or local agency relating to any
claim or allegation of unlawful discrimination, harassment or retaliation.
Notwithstanding the foregoing, Employee agrees that, to the full extent allowed
by law, Employee is not entitled to and hereby waives any right to recover
compensation, damages, or any other form of relief of any type or kind and/or
reinstatement to employment that may be awarded or ordered by any court or
administrative agency to or for Employee’s benefit arising from or relating to
any Claim(s) released by Employee under this Agreement. Employee further
specifically acknowledges and agrees that Employee is waiving, on behalf of
Employee and Employee’s attorneys, all claims for fees and expenses and court
costs.

 

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6.     Full and Complete Release. Employee understands and agrees that Employee
is releasing and waiving any Claim(s) that Employee does not know exists or may
exist in Employee’s favor at the time Employee signs this Agreement which, if
known by Employee, would materially affect Employee’s decision to sign this
Agreement. Nonetheless, for the purpose of implementing a full and complete
release of all Claim(s), Employee expressly acknowledges that the release set
forth in Sections 1 and 2 is intended to include, without limitation, all
Claim(s) that Employee does not know or suspect to exist in Employee’s favor and
that the release set forth in Sections 1 and 2 includes the release and
extinguishment of any such Claim(s). In addition, Employee agrees that Employee
will not seek re-employment with the Company at any time in the future and that
the provisions of this Section 6 are adequate and legal grounds to (a) reject
Employee’s application for re-employment or (b) terminate Employee’s employment
should Employee be rehired by the Company in violation of this Section 6.

 

7.     Employee agrees and covenants not to sue or prosecute any claim that
might now or ever be asserted arising out of, or pertaining to, his or her
employment with the Company and any of its predecessors or affiliates.

 

8.     Should any provision of this Agreement be held to be invalid or wholly or
partially unenforceable by a final, non-appealable judgment in a court of
competent jurisdiction, such holding shall not invalidate or void the remainder
of this Agreement, and those portions held to be invalid or unenforceable shall
be revised and reduced in scope so as to be valid and enforceable or, if such is
not possible, then such portions shall be deemed to have been wholly excluded
with the same force and effect as if it had never been included herein.

 

9.     Employee and his or her representatives, attorneys, and agents will not
make any public or private statement with respect to the Company (including, as
to Employee, any statement with respect to the directors, officers, employees,
representatives, attorneys, and agents of the Company) that is derogatory,
disparaging or may tend to injure the Company or such person in its or their
business, public or private affairs. The foregoing obligations do not apply to
information required to be disclosed or requested by any governmental agency,
court or stock exchange, or any law, rule or regulation. Any public disclosure
related to this Agreement as required by any law, rule or regulation will be
negotiated by the Parties in advance, except that the Company has the final,
sole discretion as to the content of any such announcement.

 

10.     This Agreement is governed by and construed and enforced, in all
respects, in accordance with the laws of the State of California without regard
to conflict of law principles unless preempted by federal law, in which case
federal law governs.

 

11.     Review and Revocation. Employee acknowledges and agrees that he or she
has 45 days from the date he or she receives this Agreement to consider the
terms of and to sign this Agreement. Employee may, at Employee’s sole and
absolute discretion, sign this Agreement prior to the expiration of the above
review period. In addition, information is available to Employee as required by
the Older Workers Benefit Protection Act.

 

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12.     Employee may revoke this Agreement for a period of up to 7 days after
Employee signs it (not counting the day it was signed) and the Agreement shall
not become effective or enforceable until the 7-day revocation period has
expired. To revoke this Agreement, Employee must give written notice stating
that Employee wishes to revoke the Agreement to the Company’s Vice President,
Global HR. Any notice stating that Employee wishes to revoke this Agreement must
emailed (with a reply confirmation from the Company’s Vice President, Global
HR), hand-delivered, or mailed (with confirmation of delivery) to the Company,
as set forth in this paragraph, in sufficient time to be received by the Company
on or before the expiration of the 7-day revocation period.

 

AGREED AND ACCEPTED, on this ____ day of ____________, 20__.

 

 

 

 

 

 

 

 

 

 

 

 

 

Printed Name:

David H. Mowry 

 

 

 

 

 

 

 

 

 

 

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