Exhibit 10.1

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (“Agreement”) made and entered into as of the 16th day of
January, 2012, by and between AtriCure, Inc. (the “Company”), with principal
offices located at 6217 Centre Park Drive, West Chester, Ohio 45069 and Andrew
Lux (the “Executive”) currently residing at 6591 Dunbarton Drive, Hudson, Ohio
44236.

WITNESSETH:

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

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

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

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

2. Term; Start Date. The term of Executive’s employment hereunder shall commence
on the Effective Date and shall end on that date on which such employment shall
be terminated under the provisions of Section 8 hereof. Such term, regardless of
the length thereof, shall be referred to herein as the “Employment Term”. For
purposes of this Agreement, the term “Contract Year” shall refer to each twelve
(12) month period beginning on the day and month of the Effective Date and
ending on the day immediately preceding the yearly anniversary of the Effective
Date. Notwithstanding the above, the parties agree that the Executive shall
begin to actually render services hereunder, and accordingly begin to earn his
Base Salary (as defined below) hereunder, on such date, on or prior to
January 16, 2012 as the Executive shall hereafter designate in a notice to the
Company (such designated date being the “Start Date”).

3. Work Location. The Executive’s principal place of employment shall be the
Company’s current principal office at 6217 Centre Park Drive, West Chester, Ohio
45069. This Agreement requires the Executive to relocate within a fifty
(50)-mile radius of the Company’s current principal office by April 1, 2013.

4. Duties and Responsibilities.

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

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b. Time and Effort. The Executive shall:

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

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

iii. use his best efforts to promote the interests of the Company and its
affiliates.

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

5. Compensation.

a. Base Salary. The Company shall pay the Executive a base salary at the rate of
two hundred seventy thousand dollars ($270,000) per year (as in effect from time
to time in accordance with the provisions below, the “Base Salary”), payable in
accordance with the Company’s payroll procedures, subject to all withholdings
provided for in Section 11. The Company shall review the Base Salary annually
for merit increases, which shall be made subject to and at the sole and absolute
discretion of the Board of Directors or, if the Board shall so elect, the
Compensation Committee thereof. Once increased, the Base Salary shall not
thereafter be decreased.

b. Bonus. The Executive shall receive such year-end annual bonus, if any, to
which he may be entitled under such Management Incentive Program (or similar
plan) as the Company may adopt with respect to each fiscal year of the Company,
subject to the terms, plans, qualifications and conditions of any such plan. The
potential of the year-end annual bonus is a target of 40% of the Base Salary and
shall be paid in accordance with the Company’s procedures for its year end
Management Incentive Program (or similar plan).

c. Stock. Subject to the approval of the Compensation Committee of the Board of
Directors of the Company, the Executive will be granted the following:

i. options to purchase seventy thousand (70,000) shares of the Company’s common
stock under the Company’s 2005 Equity Incentive Plan (the “Incentive Plan”) at a
per-share exercise price equal to the fair market value of the Company’s common
stock on the date of grant, all as determined under the Incentive Plan, with
(A) 25% of such options vesting on the first anniversary of the date of the
grant and (B) the balance of such options vesting in equal amounts on a monthly
basis during the three year period following the first anniversary of the date
of the grant; and

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ii. a grant of 10,000 restricted shares of the Company’s common stock under the
Incentive Plan with 25% of such shares being issued to Executive on the each of
the first four anniversaries of the date of the grant.

The date of the grant of such options and restricted shares shall be the date
such actions are approved by the Compensation Committee of the Board of
Directors of the Company. All such options and shares are subject to the terms,
conditions and restrictions set forth in the Incentive Plan.

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

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

b. Paid Time Off. The Executive shall be entitled to Level 2 Paid Time Off
(PTO), which is 22 days, on an annual basis, to be taken in accordance with the
Company’s PTO policy. The Executive’s PTO will be scheduled at such times as
will least interfere with the business of the Company.

7. Reimbursement of Expenses.

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

b. Relocation Expenses.

i. General; Gross-Up. The Company will reimburse the Executive, in an amount up
to one hundred twenty-five thousand dollars ($125,000), for out-of-pocket
expenses, of the types described below, incurred by him in connection with his
relocation to the greater Cincinnati area by April 1, 2013, provided that the
Executive timely furnishes to the Company a complete and accurate accounting of
all such expenses. The out-of-pocket expenses which are reimbursable under this
Section i are: (A) reasonable out-of-pocket expenses associated with two
house-hunting trips, (B) temporary housing costs, incurred during the Relocation
Period, which are pre-approved by the Company, (C) pre-approved travel expenses
incurred by Executive, during the Relocation Period, in connection with
traveling back and forth between Hudson, Ohio and Cincinnati, Ohio,
(D) reasonable legal fees on the sale of the Executive’s current residence and
the purchase of a new residence and (E) reasonable expenses incurred in
connection with the transportation of personal property. In the event that the
reimbursements to the Executive under this Section i are taxable to him as
income under applicable federal and/or state law, the Company will not
“gross-up” such payments and the Executive shall be solely responsible for any
such tax.

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

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If the Termination Date occurs any time during the:

  

Percentage to be
repaid to Company:

First Contract Year

   100%

Second Contract Year

   50%

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

a. Death. The Executive’s employment hereunder shall terminate upon his death.

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

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

d. Termination by the Executive for Good Reason. The Executive, in this case the
Vice President and Chief Operating Officer, may immediately terminate his
employment hereunder for Good Reason at any time by notice given to the Company.
For purposes of this Agreement, the term “Good Reason” shall mean the occurrence
of any of the following and the failure of the Company to rectify the same
within thirty (30) days after the Executive shall have given written notice to
the Company which identifies the action complained of and demands that it be
rectified: (i) a breach by the Company of this Agreement; (ii) a material
reduction, in the Executive’s duties and responsibilities hereunder; (iii) a
reduction in the Executive’s Base Salary; or (iv) a change in the Executive’s
principal place of employment to a location that is not within a fifty (50)-mile
radius of 6217 Centre Park Drive, West Chester, Ohio 45069.

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e. Voluntary Termination. Either the Company or the Executive may terminate the
Executive’s employment under this Agreement at any time for any reason or no
reason upon such prior written notice to the other party, if any, as is provided
for below (a termination effected by the Company under this provision being
referred to as a termination “Without Cause”). Accordingly, each of the Company
and the Executive acknowledges that Executive’s employment with the Company is
on a so-called “at-will” basis, and that no minimum period of employment is
required hereunder or otherwise. Executive shall give the Company at least
forty-five (45) days’ prior written notice in the event of a termination by him
under this Section e. The Company shall not be obligated to give the Executive
any prior written notice in connection with a termination by it under this
Section e, but may do so in its sole and absolute discretion.

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

9. Economic Consequences of a Termination of Employment.

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

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

ii. Payment for any accrued and unpaid PTO or similar pay to which he is
entitled under Company policies;

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

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

b. Termination Without Cause or With Good Reason.

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

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Executive immediately prior to Termination; provided that such benefits shall be
discontinued to the extent that Executive obtains employment providing
comparable benefits during such Severance Period. For purposes of the proviso in
the immediately preceding sentence, if Executive becomes employed by a new
employer, for Executive’s health and welfare benefits to be determined to be
“comparable,” new employer must maintain a major medical plan that does not
limit, restrict or exempt Executive or Executive’s dependents with respect to
any pre-existing conditions which were covered under the Company’s medical plan
prior to Executive’s termination of employment. Executive’s right to
continuation coverage under the Consolidated Omnibus Budget Reconciliation Act
of 1985 (“COBRA”) shall be provided at the earlier of the end of the six
(6) month Severance Period or the discontinuance of coverage because the
Executive obtains employment providing comparable benefits.

ii. Change of Control. In the event that (A) either the Company shall terminate
the employment of the Executive hereunder Without Cause or the Executive shall
terminate his employment hereunder for Good Reason and (B) the related
Termination Notice shall have been given during a Change of Control Period, the
Executive shall, in addition to those rights provided under Section 9(a), be
entitled to a severance payment equal to (x) eighteen (18) months of the
Executive’s then Base Salary, which payment shall be paid to him during the
eighteen (18) month period following the Termination Date (the “Severance
Period”) in substantially equal installments, as and when regular payroll
payments are made by the Company to its employees plus (y) an amount equal to
Executive’s “full bonus potential” for the year in which the Termination Date
shall have occurred, which payment shall be made in a lump sum within ten
(10) days after the termination of Executive. In such circumstances, during the
eighteen (18) month Severance Period, the Executive shall also be entitled to
medical, dental, life insurance or similar “welfare” benefits substantially
similar in scope and cost to Executive as such benefits available to Executive
immediately prior to the Change in Control Period; provided that such benefits
shall be discontinued to the extent that Executive obtains employment providing
comparable benefits during such Severance Period. For purposes of the proviso in
the immediately preceding sentence, if Executive becomes employed by a new
employer, for Executive’s health and welfare benefits to be determined to be
“comparable,” new employer must maintain a major medical plan that does not
limit, restrict or exempt Executive or Executive’s dependents with respect to
any pre-existing conditions which were covered under the Company’s medical plan
prior to Executive’s termination of employment. Executive’s right to
continuation coverage under the Consolidated Omnibus Budget Reconciliation Act
of 1985 (“COBRA”) shall be provided at the earlier of the end of the eighteen
(18) month Severance Period or the discontinuance of coverage because the
Executive obtains employment providing comparable benefits.

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

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

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

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

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

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

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

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

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

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

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

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

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

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17. Assignment. The rights and obligations of the Executive under this
Agreement, other than accrued and unpaid amounts due under Section 5 hereof, are
personal to the Executive and are not assignable or delegable. This Agreement
may not be assigned by the Company except to an affiliate of the Company,
provided that such affiliate assumes the Company’s obligations under this
Agreement; provided, further, that if the Company merges or effects a
consolidation or share exchange with or into, or sells or otherwise transfers
substantially all its assets to, another business entity, the Company may
assign, its rights hereunder to that business entity without the consent of the
Executive, provided that it causes such business entity to assume the Company’s
obligations under this Agreement. This Agreement shall be binding upon the
Company and any successors thereto.

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

19. Offer Time. This offer will remain open until January 6, 2012.

[Signature Pages Follow]

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

 

ATRICURE, INC. By:   /s/ David Drachman

Name:

Title:

 

David Drachman

President and Chief Executive Officer

 

/s/ Andrew Lux Andrew Lux