Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT (this “Agreement”) is entered into as of this 9th day of
September, 2014 (the “Effective Date”), by and between MRI INTERVENTIONS, INC.,
a Delaware corporation (the “Company”), and FRANCIS P. GRILLO (the “Executive”).

 

WITNESSETH:

 

WHEREAS, the Company desires to employ the Executive to serve as the Chief
Executive Officer and President of the Company on the terms and conditions set
forth herein;

 

WHEREAS, the Company and the Executive each deem it necessary and desirable to
execute a written document setting forth the terms and conditions of said
relationship; and

 

WHEREAS, to the extent this Agreement provides for any “deferred compensation”
within the meaning of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), the Agreement will be administered in compliance with
Section 409A of the Code and the regulations promulgated thereunder.

 

NOW, THEREFORE, in consideration of the premises and mutual obligations
hereinafter set forth, the parties agree as follows:

 

1.     Definitions. For purposes of this Agreement, the following terms shall
have the following definitions:

 

“Accounting Firm” has the meaning set forth in Section 11(b) of this
Agreement.     

 

“Affiliate” has the same meaning ascribed to such term in Rule 12b-2 under the
Exchange Act.

 

“Agreement” has the meaning set forth in the preamble above.

 

“Award Agreement” has the meaning set forth in Section 11(b) of this Agreement.

 

“Award Plans” has the meaning set forth in Section 4(d) of this Agreement.

 

“Base Salary” means the annual salary to be paid to the Executive as set forth
in Section 4(a) of this Agreement.

 

“Benefit Plans” has the meaning set forth in Section 4(e) of this Agreement.

 

“Board” means the Board of Directors of the Company.

 

“Bonus” has the meaning set forth in Section 4(b) of this Agreement.

 

“Change of Control” means the occurrence with respect to the Company of any of
the following events: (i) a change in the ownership of the Company; (ii) a
change in the effective control of the Company; or (iii) a change in the
ownership of a substantial portion of the assets of the Company.

 

For purposes of this definition, a change in the ownership of the Company occurs
on the date on which any one person, or more than one person acting as a group,
acquires ownership of stock of the Company that, together with stock held by
such person or group, constitutes more than 50% of the total fair market value
or total voting power of the stock of the Company. A change in the effective
control of the Company occurs on the date on which either (i) a person, or more
than one person acting as a group, acquires ownership of stock of the Company
possessing 30% or more of the total voting power of the stock of the Company,
taking into account all such stock acquired during the 12-month period ending on
the date of the most recent acquisition, or (ii) a majority of the members of
the Board is replaced during any 12-month period by directors whose appointment
or election is not endorsed by a majority of the members of such Board prior to
the date of the appointment or election. A change in the ownership of a
substantial portion of the assets of the Company occurs on the date on which any
one person, or more than one person acting as a group, other than a person or
group of persons that is related to the Company, acquires assets from the
Company that have a total gross fair market value equal to or more than 40% of
the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions, taking into account all
such assets acquired during the 12-month period ending on the date of the most
recent acquisition.

 

 
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The determination as to the occurrence of a Change of Control shall be based on
objective facts and in accordance with the requirements of Section 409A of the
Code.

 

“Change of Control Termination” means (i) a Termination Without Cause or (ii) a
Termination for Good Reason, in either case within two (2) months prior to, on,
or within one (1) year after, a Change of Control.

 

“Code” has the meaning set forth in the recitals above.

 

“Company” has the meaning set forth in the preamble above.

 

“Company Incentive Plan” means, collectively, the Company’s current equity
incentive plan, as such may be amended from time to time, and any other equity
incentive plan adopted by the Company from time to time.

 

“Company Shares” means shares of common stock of the Company or any securities
of a successor company which shall have replaced such common stock.

 

“Compensation Committee” means the compensation committee of the Board.

 

“Confidentiality Agreement” means that certain Non-Disclosure and Proprietary
Rights Agreement between the Company and the Executive in substantially the form
attached hereto as Exhibit A.

 

“Effective Date” has the meaning set forth in the preamble above.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Excise Tax” means the excise tax imposed by Section 4999 of the Code with
respect to the Total Payments, together with any interest or penalties with
respect to such excise tax.

 

“Executive” has the meaning set forth in the preamble above.

 

“Net After-Tax Benefit” means (i) the Total Payments, less (ii) the amount of
all United States federal, state and local income and employment taxes payable
with respect to the Total Payments (calculated at the maximum applicable
marginal income tax rate for the Executive under the Code), and less (iii) the
amount of the Excise Tax imposed (based upon the rate for such year as set forth
in the Code at the time of the first payment of the foregoing).

 

 
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“Non-Compete Agreement” means that certain Non-Compete Agreement between the
Company and the Executive in substantially the form attached hereto as Exhibit
B.

 

“Non-Qualified Stock Option Agreement” means that certain Non-Qualified Stock
Option Agreement between the Company and the Executive in substantially the form
attached hereto as Exhibit C.

 

“Option(s)” means (i) any option issued to the Executive pursuant to a Company
Incentive Plan, (ii) other than options described in the preceding clause (i),
any option issued to the Executive by the Company to purchase Company Shares, or
(iii) any option granted under the plan of any successor company that replaces
or assumes the Company’s options.

 

“Permanent Disability” means the Executive: (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than twelve (12) months; or (ii) is, by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan
covering employees or directors of the Company. Medical determination of
Permanent Disability may be made by either the Social Security Administration or
by the provider of an accident or health plan covering employees or directors of
the Company provided that the definition of “disability” applied under such
disability insurance program complies with the requirements of the preceding
sentence. Upon the request of the Company, the Executive must submit proof to
the Company of the Social Security Administration’s or the provider’s
determination.

 

“Restricted Stock” means (i) any restricted Company Shares issued to the
Executive pursuant to a Company Incentive Plan, or (ii) any restricted stock
granted under the plan of any successor company that replaces or assumes the
Company’s restricted stock awards.

 

“Section 4999 Limit” has the meaning set forth in Section 11(a) of this
Agreement.

 

“Start Date” has the meaning set forth in Section 3(a) of this Agreement.

 

“Specified Employee” means a key employee (as defined in Section 416(i) of the
Code without regard to paragraph 5 thereof) of the Company if any stock of the
Company is publicly traded on an established securities market or otherwise.

 

“Term” has the meaning assigned to it in Section 3(a) of this Agreement.

 

“Termination Date” means the date on which the employment of the Executive is
terminated, which date shall be (i) in the case of the Executive’s death, the
date of death, (ii) in the case of the Executive’s Permanent Disability, thirty
(30) days after a Termination Notice is given, provided the Executive does not
return to the full-time performance of his duties within such thirty (30) day
period, (iii) in the case of a Termination With Cause, the date specified in the
Termination Notice, or (iv) in all other instances, the date specified as the
Termination Date in the Termination Notice,, which date shall not be less than
ten (10) days from the date the Termination Notice is given.

 

 
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“Termination for Good Reason” means the termination of the Executive’s
employment with the Company by the Executive based on any of the following
circumstances, if, within the six (6) month period preceding the Executive’s
termination, the Executive notified the Company in writing of such circumstances
within ninety (90) days of occurrence and the Company did not remedy such
circumstances within thirty (30) days thereafter:

 

(i)     a material demotion or diminution in the Executive’s authority, duties
or responsibilities without the Executive’s consent;

 

(ii)     except as contemplated in Section 2(b) below, the Company requiring the
Executive to be based at any place other than a location within a fifty (50)
mile radius of the Executive’s work location as of the Effective Date without
the Executive’s consent, except for reasonably required travel on the Company’s
business; or

 

(iii)     any action or inaction that constitutes a material breach by the
Company of this Agreement.

 

“Termination Notice” means a written notice of termination of employment by the
Executive or the Company.

 

“Termination of Employment” means the termination of the Executive’s employment
with the Company for reasons other than death or Permanent Disability. Whether a
Termination of Employment takes place is determined based on the facts and
circumstances surrounding the termination of the Executive’s employment and
whether the Company and the Executive intended for the Executive to provide
significant services for the Company following such termination. A change in the
Executive’s employment status will not be considered a Termination of Employment
if the Executive continues to provide services as an employee of the Company or
in any other capacity at an annual rate that is twenty percent (20%) or more of
the services rendered, on average, during the immediately preceding three full
calendar years of employment (or, if employed less than three years, such lesser
period).

 

“Termination With Cause” means the termination of the Executive’s employment by
the Company for any of the following reasons: (i) the Executive’s gross
negligence or willful misconduct in the performance of the Executive’s duties
where such gross negligence or willful misconduct has resulted or is likely to
result in substantial and material damage to the Company; (ii) the material
violation by the Executive of any federal or state law or regulation or the
Company’s compliance program in the performance of the Executive’s duties; (iii)
the Executive’s material breach of the Confidentiality Agreement; (iv) the
Executive’s commission of any act of fraud with respect to the Company; (v) the
Executive’s conviction of, or the Executive’s entry of a guilty plea or plea of
nolo contendere with respect to, a felony; or (vi) the Executive’s willful
failure to perform duties consistent with this Agreement or the Executive’s
position or to follow or comply with the reasonable directives of the Board or
the Executive’s supervisor(s) (to the extent not inconsistent with the terms of
this Agreement), provided that (A) the Executive shall have received written
notice that specifically identifies the manner in which the Company believes
that Executive has engaged in such failure and (B) the Executive shall not have
cured such failure within thirty (30) days following receipt of such notice,
provided further that such opportunity to cure a failure shall not apply if the
Executive has received more than one notice with respect to the same or similar
conduct pursuant to this clause (vi) during any twelve (12) consecutive month
period.

 

“Termination Without Cause” means the termination of the Executive’s employment
by the Company for any reason other than (i) Termination With Cause or (ii)
termination by the Company due to the Executive’s death or Permanent Disability.

 

 
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“Total Payments” means the total payments or other benefits that the Executive
becomes entitled to receive from the Company or an Affiliate thereof in
connection with a Change of Control that would constitute a “parachute payment”
(within the meaning of Section 280G of the Code), whether payable pursuant to
the terms of this Agreement or any other plan, arrangement or agreement with the
Company or an Affiliate thereof.

 

“Voluntary Termination” means the Executive’s voluntary termination of his
employment hereunder for any reason, other than a Termination for Good Reason.
If the Executive gives a Termination Notice of Voluntary Termination and, prior
to the Termination Date, the Executive voluntarily refuses or fails to provide
substantially all the services described in Section 2 hereof, the Voluntary
Termination shall be deemed to be effective as of the date on which the
Executive so ceases to carry out his duties. Voluntary refusal to perform
services shall not include (i) taking vacation otherwise permitted in accordance
with Section 4(f) hereof, (ii) the Executive’s failure to perform services on
account of his illness or the illness of a member of the Executive’s immediate
family, provided such illness is adequately substantiated at the reasonable
request of the Company, or (iii) any other absence from service with the written
consent of the Board.

 

“West Coast Facilities” has the meaning set forth in Section 2(b) of this
Agreement.

 

 

2.             Employment; Services; Location.

 

(a)     The Company shall employ the Executive, and the Executive agrees to be
so employed, in the capacity of the President as of the Start Date, and in the
capacity of the Chief Executive Officer and President as of January 1, 2015 and
through the remaining Term hereof. The Executive shall assume and discharge such
duties and responsibilities as are commensurate with the Executive’s position.
The Executive shall be a full-time employee of the Company and shall exert his
best efforts and devote substantially all of his business time and attention to
the Company’s affairs and the performance of his duties hereunder.

 

(b)     It is acknowledged that, as of the Effective Date, the Executive resides
in the San Francisco Bay Area of California. Notwithstanding, the Executive
acknowledges and agrees that he shall spend meaningful time in, and shall be
principally officed out of, the Company’s principal west coast facilities, which
are currently located in Irvine, California (the “West Coast Facilities”). At
the Board’s request, the Executive shall relocate to the vicinity of the West
Coast Facilities; provided, that in no event may the Company require the
Executive to relocate prior to October 15, 2016 without his consent and
election. For the avoidance of doubt, the Company understands that the Executive
is not likely to relocate prior to October 15, 2016. The Executive shall be
entitled to relocation benefits as mutually agreed between the Executive and the
Compensation Committee. In addition, prior to the Executive’s relocation, the
Company shall pay the Executive (subject to applicable withholdings) an amount
equal to (i) the reasonable cost of travel between the Executive’s current
residence and the West Coast Facilities, and (ii) the reasonable cost of lodging
for the Executive when he is at the West Coast Facilities, and (iii) an amount
equal to the aggregate federal and state income taxes resulting from the receipt
of payments under clauses (i) and (ii) and this clause (iii); provided, however,
that in no event shall the aggregate monthly payment for amounts under clauses
(i) and (ii) exceed $4,000 unless agreed to in writing by the Chairperson of the
Compensation Committee. For purposes of computing the amount of federal and
state income taxes payable by the Executive, (x) any deduction for state income
taxes payable allowed in computing federal income taxes shall be taken into
account, and (y) the Executive’s tax liability shall be computed using the
maximum applicable federal and state marginal income tax rates for the Executive
without regard to any other deductions, credits or losses that might be
available to the Executive to offset income, gain or taxes of the Executive.

 

 
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3.             Term; Termination.

 

(a)     The term of the Executive’s employment under this Agreement (the “Term”)
shall commence as of October 6, 2014 (the “Start Date”) and shall end as of the
Termination Date.

 

(b)     Any purported termination of employment by the Executive or the Company,
other than by reason of the Executive’s death, shall be communicated by a
Termination Notice. The Termination Notice shall indicate the specific
termination provision in this Agreement relied upon and, in the event of a
Termination With Cause or a Termination for Good Reason, set forth the facts and
circumstances claimed to provide a basis for termination.

 

4.             Compensation.   

 

(a)     Base Salary. During the Term, the Company shall pay the Executive for
his services a “Base Salary” of Three Hundred Fifty Thousand Dollars ($350,000)
per year, to be paid in accordance with customary Company policies. The Base
Salary shall be subject to increase or decrease according to policies and
practices adopted by the Compensation Committee or the Board, as the case may
be; provided, however, that in no event (i) shall the Base Salary for any year
be decreased by more than ten percent (10%) from the immediately preceding
year’s Base Salary, and (ii) shall the Base Salary be less than Three Hundred
Fifty Thousand Dollars ($350,000).

 

(b)     Bonus. Starting with the Company’s fiscal year commencing on January 1,
2015, the Executive shall be eligible to receive an annual target incentive
bonus of forty percent (40%) of the Executive’s Base Salary (a “Bonus”), subject
to the terms and conditions established by the Compensation Committee in
consultation with the Executive, including amounts in excess of 40% of Base
Salary for exceptional performance. The Compensation Committee shall determine
in good faith the Executive’s entitlement to a Bonus based on the achievement or
satisfaction of such terms, conditions and goals as soon as reasonably
practicable after the end of each calendar year. The Company shall pay the
Bonus, if any, to the Executive within ten (10) days after the Compensation
Committee makes such determination and in any event not later than March 15 of
the year following the calendar year in which the services upon which the Bonus
is based were performed; provided, however, that, notwithstanding any provision
of this Agreement to the contrary, the Company shall not be obligated to pay,
and the Executive shall not be entitled to receive, any such Bonus unless the
Executive remains employed by the Company on the date of payment.

 

(c)     Inducement Grant. To induce the Executive to commence employment with
the Company as of the Start Date, the Company shall grant the Executive, on the
Start Date, a stock option on the terms and conditions set forth in the
Non-Qualified Stock Option Agreement.

 

(d)     Award Plans. During the Term, the Executive shall generally be eligible
to participate in Company Incentive Plans and any other incentive compensation,
profit participation or extra compensation plan that is adopted by the Company
and in which the Company’s executive officers generally participate
(collectively, “Award Plans”), according to the policies and practices adopted
by the Compensation Committee or the Board, as the case may be.

 

 
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(e)     Benefit Plans. During the Term, the Executive shall be entitled to
participate in, and to all rights and benefits provided by, the health, life,
medical, dental, disability, insurance and welfare plans that are maintained
from time to time by the Company for the benefit of the Executive, the
executives of the Company generally or for the Company’s employees generally,
provided that the Executive is eligible to participate in such plan under the
eligibility provisions thereof that are generally applicable to the participants
thereof (collectively, “Benefit Plans”).

 

(f)     Vacation. The Executive shall be entitled each year to vacation time,
during which time his compensation shall be paid in full. The time allotted for
such vacation shall be three (3) weeks, to be taken at such time or times as
shall be mutually convenient and consistent with his duties and obligations to
the Company. Vacation accrues based on the Executive’s anniversary date. Any
unused vacation shall be subject to the Company’s policies regarding same, as
such may be amended from time to time.

 

(g)     Overall Qualification. Nothing in this Agreement shall be construed as
preventing the Company from modifying, suspending, discontinuing or terminating
any of the Benefit Plans or Award Plans without notice or liability to the
Executive so long as (i) the modification, suspension, discontinuation or
termination of any such plan is authorized by and performed in accordance with
the specific provisions of such plan and (ii) such modification, suspension,
discontinuation or termination is taken generally with respect to all similarly
situated employees of the Company and does not single out or discriminate
against the Executive.

 

5.             Expenses. The Company recognizes that the Executive will have to
incur certain out-of-pocket expenses, including but not limited to travel
expenses, related to his services and the Company’s business and the Company
agrees, subject to the applicable limitations set forth in Section 2(b), to
reimburse the Executive for all reasonable expenses necessarily incurred by him
in the performance of his duties upon presentation of documentation indicating
the amount and business purposes of any such expenses; provided, that the
Executive complies with the Company’s policies and procedures regarding business
expenses.

 

6.             Voluntary Termination; Termination With Cause. If the Executive
shall cease being an employee of the Company on account of the Executive’s
Voluntary Termination or a Termination With Cause, the Executive shall have no
further rights against the Company hereunder after the Termination Date, except
for the right to receive (i) any Base Salary and bonus compensation earned but
unpaid as of the Termination Date, and (ii) reimbursement of business expenses
to which the Executive is entitled as of the Termination Date pursuant to
Section 5. In the event of a Voluntary Termination or a Termination With Cause,
the Executive shall continue to be subject to the Confidentiality Agreement and
the Non-Compete Agreement.

 

7.             Termination Upon Death or Permanent Disability.

 

(a)     Death. The Executive’s employment with the Company shall terminate
automatically upon the Executive’s death. Upon termination of employment due to
the Executive’s death, the Executive’s estate shall have no further rights
against the Company hereunder after the Termination Date, except for the right
to receive (i) any Base Salary and bonus compensation earned but unpaid as of
the Termination Date, plus (ii) any unreimbursed business expenses to which the
Executive is entitled as of the Termination Date pursuant to Section 5, plus
(iii) the lump sum amount of Eighteen Thousand Dollars ($18,000). In addition,
the Executive’s estate shall be entitled to any vested benefits under the
Company’s Award Plans and Benefit Plans as of the Termination Date, in
accordance with the terms of such plans.

 

 
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(b)     Permanent Disability. In the event of the Executive’s Permanent
Disability, the Company may terminate the Executive’s employment with the
Company if the Executive does not return to the full-time performance of his
duties within thirty (30) days after a Termination Notice is given. Upon
termination of employment due to the Executive’s Permanent Disability, the
Executive shall have no further rights against the Company hereunder after the
Termination Date, except for the right to receive (i) any Base Salary and bonus
compensation earned but unpaid as of the Termination Date, plus (ii) any
unreimbursed business expenses to which the Executive is entitled as of the
Termination Date pursuant to Section 5, plus (iii) the lump sum amount of
Eighteen Thousand Dollars ($18,000). In addition, the Executive shall be
entitled to any vested benefits under the Company’s Award Plans and Benefit
Plans as of the Termination Date, in accordance with the terms of such plans. In
the event of a termination of employment upon the Executive’s Permanent
Disability, the Executive shall continue to be subject to the Confidentiality
Agreement and the Non-Compete Agreement.

 

(c)     Life Insurance. Upon the Company’s request, the Executive shall
cooperate with the Company in obtaining “key man” life insurance on the life of
the Executive with death benefits payable to the Company.

 

8.             Termination Without Cause; Termination for Good Reason. The
Company may terminate the Executive’s employment for any reason, or no reason at
all, at any time, and the Executive may effect a Termination for Good Reason at
any time; provided, that upon a Termination for Good Reason or a Termination
Without Cause, except as otherwise provided in Section 10 of this Agreement, the
Company shall provide the compensation and benefits set forth in this Section 8.
The Executive may effect a Termination for Good Reason notwithstanding any
incapacity due to physical or mental illness. In the event of a Termination
Without Cause or a Termination for Good Reason, the Executive shall continue to
be subject to the Confidentiality Agreement and the Non-Compete Agreement.

 

(a)     Base Salary, Bonus, Benefit Plans and Award Plans. The Company shall pay
to the Executive, on the Termination Date, a lump sum amount which is equal to
the sum of: (i) an amount equal to the Executive’s annual Base Salary in effect
on the Termination Date; plus (ii) an amount equal to the average annual cash
bonus, if any, paid to the Executive for the two (2) years preceding the year in
which the Termination Date occurs (or if Executive has been employed for less
than two full years such average shall be annualized for any partial years and
if such termination occurs during 2014 or 2015, the average cash bonus shall be
deemed to be the target bonus for such year); plus (iii) Eighteen Thousand
Dollars ($18,000); plus (iv) any Base Salary and bonus compensation earned but
unpaid as of the Termination Date; plus (v) any unreimbursed business expenses
to which the Executive is entitled as of the Termination Date pursuant to
Section 5. The Company shall also pay the Executive any amounts due to the
Executive pursuant to the terms of any Award Plans and/or Benefit Plans in which
the Executive was a participant, in accordance with the terms of such plans.
Notwithstanding the foregoing, if the Executive is a Specified Employee and the
total of the payments under this Section 8(a) exceeds the limit set forth in
Treas. Reg. §1.409A-1(b)(9)(iii)(A) (related to separation pay), then the amount
in excess of such limit shall be delayed for six (6) months following the
Termination Date. The delayed amount shall be paid in a lump sum after the end
of the six-month delay.

 

(b)     Options; Restricted Stock. Notwithstanding the terms of any award
agreement heretofore or hereafter granted to the Executive under any Award Plan,
or any other agreement granting the Executive Options or Restricted Stock (in
each case, an “Award Agreement”), upon a Termination Without Cause or
Termination for Good Reason, (i) all Options and Restricted Stock granted to the
Executive which do not constitute deferred compensation for Code Section 409A
purposes granted to the Executive shall become fully vested on the Termination
Date and immediately prior to the time of termination, and (ii) the Executive
shall continue to have the right to exercise any such Options until the earlier
to occur of (A) the three (3) year anniversary of the Termination Date or (B)
the final expiration date for such Options as provided for in the applicable
Award Agreement. In the event of any conflict between the terms of this
Section 8(b) and the terms of any Award Agreement heretofore or hereafter
granted to the Executive, the terms of this Section 8(b) shall control and
govern.

 

 
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9.             [Intentionally Omitted]

 

10.           Change of Control.

 

(a)     Accelerated Vesting. Notwithstanding the terms of any Award Agreement
heretofore or hereafter granted to the Executive, in the event of a Change of
Control, all Options and Restricted Stock granted to the Executive which do not
constitute deferred compensation for Code Section 409A purposes shall become
fully vested on the date of the Change of Control and immediately prior to the
time of the Change of Control. In the event of any conflict between the terms of
this Section 10(a) and the terms of any Award Agreement heretofore or hereafter
granted to the Executive, the terms of this Section 10(a) shall control and
govern.

 

(b)     Change of Control Termination. Notwithstanding any other provision in
this Agreement to the contrary, in the event of a Change of Control Termination,
the Company shall, on the Termination Date, pay the Executive a lump sum amount
which is equal to the sum of: (i) the product of (A) the Executive’s Base Salary
in effect as of the Termination Date multiplied by (B) two (2), plus (ii) the
product of (A) the average of the two highest annual cash bonuses paid to the
Executive for the three years preceding the year in which the Termination Date
occurs (or if Executive has been employed for less than two full years such
average shall be annualized for any partial years and if such termination occurs
during 2014 or 2015, the average cash bonus shall be deemed to be the target
bonus for such year), multiplied by (B) two (2); plus (iii) Eighteen Thousand
Dollars ($18,000); plus (iv) any Base Salary and bonus compensation earned but
unpaid as of the Termination Date, plus (v) any unreimbursed business expenses
to which the Executive is entitled as of the Termination Date under Section 5.
The Company shall also pay the Executive any amounts due to the Executive
pursuant to the terms of any Award Plans and/or Benefit Plans in which the
Executive was a participant, in accordance with the terms of such plans.
Notwithstanding the foregoing, if the Executive is a Specified Employee and the
total of the payments under this Section 10(b) exceeds the limit set forth in
Treas. Reg. §1.409A-1(b)(9)(iii)(A) (related to separation pay), then the amount
in excess of such limit shall be delayed for six (6) months following the
Executive’s Termination Date, and such delayed amount shall be paid in a lump
sum after the end of the six-month delay. In the event of a Change of Control
Termination, the Executive shall continue to be subject to the Confidentiality
Agreement and the Non-Compete Agreement.

 

(c)     Options. Notwithstanding the terms of any Award Agreement heretofore or
hereafter granted to the Executive, in the event of a Change of Control
Termination, the Executive shall continue to have the right to exercise any
Options granted to the Executive prior to the Change of Control until the
earlier to occur of (A) the three (3) year anniversary of the Termination Date
or (B) the final expiration date for such Options as provided for in the
applicable Award Agreement. In the event of any conflict between the terms of
this Section 10(c) and the terms of any Award Agreement heretofore or hereafter
granted to the Executive, the terms of this Section 10(c) shall control and
govern.

 

 
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11.           Maximum Net After-Tax Benefit.

 

(a)     Potential Reduction in Total Payments. It is the parties’ objective to
maximize the Executive’s Net After-Tax Benefit if any payments or benefits
provided hereunder would be subject to the Excise Tax. Accordingly, in the event
the Company or the Executive believes that the Total Payments to or for the
benefit of the Executive, whether paid or payable or distributed or
distributable or otherwise, including, by example and not by way of limitation,
acceleration of the date of vesting or payment under any agreement, arrangement,
plan or program, would be subject to the Excise Tax, calculations shall be made
to determine (i) the maximum amount of payments and benefits that may be
provided to the Executive so that no portion thereof will be subject to the
Excise Tax (the “Section 4999 Limit”), (ii) the Executive’s Net After-Tax
Benefit assuming application of the Section 4999 Limit, and (iii) the
Executive’s Net After-Tax Benefit without the application of the Section 4999
Limit. Based on such calculations or otherwise, and notwithstanding anything
contained in this Agreement to the contrary, the Executive may elect to reduce
the amount of the Total Payments up to the Section 4999 Limit so that no portion
of the Total Payments received by the Executive will be subject to the Excise
Tax. Alternatively, the Executive may elect to receive all Total Payments, in
which case the Executive shall be solely liable for any and all Excise Tax
related thereto.

 

(b)     Manner of Determination. Unless otherwise agreed between the Company and
the Executive, all calculations required to be made under this Section 11 shall
be made, at the Company’s expense, by the accounting firm which is the Company’s
accounting firm immediately prior to the Change of Control or another nationally
recognized accounting firm designated by the Board (or a duly authorized
committee thereof) prior to the Change of Control (the “Accounting Firm”). The
Accounting Firm shall provide its calculations, together with supporting
documentation, both to the Company and to the Executive at such time as
reasonably requested by the Company or the Executive.

 

(c)     Order of Reduction. If the Executive elects to reduce the Total Payments
as contemplated in Section 11(a), the Executive may select the order of
reduction; provided, however, that none of the selected payments may be
“nonqualified deferred compensation” subject to Section 409A of the Code. In the
event the Executive fails to select an order in which Total Payments are to be
reduced, or does not select such an order without selecting payments that would
be “nonqualified deferred compensation” subject to Section 409A of the Code, the
Company shall (to the extent feasible) reduce the Total Payments in the
following order: (i) reduction of any cash severance payments otherwise payable
to the Executive that are exempt from Section 409A of the Code; (ii) reduction
of any other cash payments or benefits otherwise payable to the Executive that
are exempt from Section 409A of the Code, but excluding any payments
attributable to any acceleration of vesting or payments with respect to any
Options or other equity or equity-type awards that are exempt from Section 409A
of the Code; (iii) reduction of any other payments or benefits otherwise payable
to the Executive on a pro rata basis or in such other manner that complies with
Section 409A of the Code, but excluding any payments attributable to any
acceleration of vesting and payments with respect to any Options or other equity
or equity-type awards that are exempt from Section 409A of the Code; and (iv)
reduction of any payments attributable to any acceleration of vesting or
payments with respect to any Options or other equity or equity-type awards that
are exempt from Section 409A of the Code; in each case beginning with payments
that would otherwise be made last in time.

 

12.           Exclusive Remedy. To the extent permitted by applicable law, the
payments contemplated by Section 7, Section 8 and Section 10 shall constitute
the exclusive and sole remedy for any termination of the Executive’s employment
due to death or Permanent Disability, any Termination Without Cause or any
Termination for Good Reason. The Executive agrees, for himself and any
administrator, beneficiary, devisee, executor, heir, legatee or personal
representative, (i) to not assert or pursue any remedies, other than an action
to enforce the payments due to the Executive (or the Executive’s estate) under
this Agreement, at law or in equity, with respect to the termination of the
Executive’s employment under Section 7, Section 8, Section 9 or Section 10, as
applicable, and (ii) to execute a release and waiver on such terms and
conditions as the Company may reasonably require as a condition of entitlement
to such payments.

 

 
10

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13.          Confidentiality and Noncompetition. The Executive shall enter into
the Confidentiality Agreement and the Non-Compete Agreement. The Executive’s
execution of those agreements is a material inducement for the Company to enter
into this Agreement. Therefore, this Agreement will be null and void unless the
Executive enters into the Confidentiality Agreement and the Non-Compete
Agreement.

 

14.          Employment Status. The parties acknowledge and agree that the
Executive is an employee of the Company, not an independent contractor. Any
payments made to the Executive by the Company pursuant to this Agreement shall
be treated for federal and state payroll tax purposes as payments made to a
Company employee, irrespective whether such payments are made subsequent to the
Termination Date.

 

15.          Notices. All notices or deliveries authorized or required pursuant
to this Agreement shall be deemed to have been given when in writing and
personally delivered or when deposited in the U.S. mail, certified, return
receipt requested, postage prepaid, addressed to the parties at the following
addresses or to such other addresses as either may designate in writing to the
other party:

 

 

To the Company:

One Commerce Square

Suite 2550

Memphis, TN 38103

Attn: Vice President, Business Affairs

   

To the Executive:

Francis P. Grillo

1181 Lammy Place

Los Altos, CA 94024

 

16.           Entire Agreement. This Agreement contains the entire understanding
between the parties hereto with respect to the subject matter hereof and shall
not be modified in any manner except by instrument in writing signed, by or on
behalf of, the parties hereto. This Agreement shall be binding upon and inure to
the benefit of the heirs, successors and assigns of the parties hereto. In the
event of any inconsistencies between the terms of this Agreement and any Award
Agreement, the terms of this Agreement shall govern.

 

17.          Certain 409A Matters. Notwithstanding any provision herein to the
contrary, for purposes of identifying Specified Employees or determining when a
Termination of Employment has occurred. or for any other purpose where Section
409A of the Code applies, references to the Company shall be deemed to include
Affiliates of the Company which are required to be aggregated with the Company
under Section 409A of the Code.

 

18.           Applicable Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware without giving effect to
conflict of laws principles thereof.

 

 
11

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19.           Assignment. The Executive acknowledges that his services are
unique and personal. Accordingly, the Executive may not assign his rights or
delegate his duties or obligations under this Agreement.

 

20.           Headings. Headings in this Agreement are for convenience only and
shall not be used to interpret or construe its provisions.

 

21.           Successors; Binding Agreement. The Company will require any
successor to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle Executive to compensation from
the Company in the same amount and on the same terms as Executive would be
entitled to hereunder upon a Change of Control Termination. The Company’s rights
and obligations under this Agreement shall inure to the benefit of and shall be
binding upon the Company’s successors and assigns.

  

 

[The remainder of this page is intentionally left blank.]

 

 

 
12

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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first above written.

  

 

MRI INTERVENTIONS, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Timothy T. Richards

 

 

Name: 

Timothy T. Richards

 

 

Title:

Chairman of the Compensation Committee

 

 

 

  

 

EXECUTIVE:

 

 

 

 

 

 

 

 

 

 

/s/ Francis P. Grillo

 

 

Francis P. Grillo

 

 

 

 

 

 

 

 
13

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Exhibit A

 

NON-DISCLOSURE AND PROPRIETARY RIGHTS AGREEMENT

 

 

See Attached

 

 

--------------------------------------------------------------------------------

 

 

 

MRI INTERVENTIONS, INC.

 

NON-DISCLOSURE AND PROPRIETARY RIGHTS AGREEMENT

 

In consideration and as a condition of my employment (or my continued
employment) with MRI Interventions, Inc., or any of its current or future
subsidiaries, affiliates, successors or assigns (collectively, the “Company”),
and in consideration of my receipt of Confidential Information (as defined in
Section 2 below) and of the compensation now and hereafter paid to me by the
Company, the undersigned (hereinafter referred to as “Employee”) hereby
acknowledges and agrees to the following:

 

1.     Purpose of Agreement. Employee understands that the Company is engaged in
a continuous program of research, development, production and marketing in
connection with its business and that it is critical for the Company to preserve
and protect its Confidential Information (as defined in Section 2 below), its
rights in Inventions (as defined in Section 7 below) and in all related
intellectual property rights. Accordingly, Employee is entering into this
Non-Disclosure and Proprietary Rights Agreement (this “Agreement”) as a
condition of his or her employment (or continued employment) with the Company,
regardless of whether Employee is expected to create Inventions of value for the
Company.

 

 

2.     Non-Disclosure of Confidential Information. At all times during his or
her employment with the Company and thereafter, Employee will hold the
Confidential Information in strictest confidence and Employee will not disclose,
communicate, reproduce, copy, publish, license, distribute, modify, adapt,
transmit, reverse engineer, decompile, disassemble or use any Confidential
Information, except (a) as may be necessary for Employee to perform his or her
duties as an employee of the Company for the exclusive benefit of the Company or
(b) to the extent an officer of the Company expressly authorizes such in
writing. Employee will take all appropriate action, whether by instruction,
agreement or otherwise, to ensure the protection, confidentiality and security
of the Confidential Information and to satisfy Employee’s obligations under this
Agreement. Employee will notify the Company immediately upon discovery of any
loss, misuse, misappropriation or disclosure of Confidential Information or any
other breach of this Agreement by Employee, and Employee will cooperate with the
Company in every reasonable way to help the Company regain possession of the
Confidential Information and prevent its further unauthorized use or disclosure.

 

For purposes of this Agreement, the term “Confidential Information” means, but
is not limited to, all information that is possessed by or developed for the
Company and which relates to the Company’s existing or potential business, which
information is not reasonably knowable by the Company’s competitors or by the
general public through lawful means. Without limiting the generality of the
foregoing, such Confidential Information also includes, but is not limited to,
all Proprietary Rights (as defined in Section 3 below), all Third Party
Information (as defined in Section 4 below) and all information regarding the
Company’s operations, research and development efforts, plans for products or
services, methods of doing business, business strategies, customers, suppliers,
service providers, manufacturers, business relations, product prices and costs,
markets, marketing plans, budgets and forecasts, financial information and/or
Inventions, as well as information regarding the skills, know how and
compensation of other employees of the Company. Confidential Information may be
expressly designated as confidential or proprietary on its face (whether
verbally, in writing or otherwise) or be of such a nature that a reasonable
person under the circumstances should understand or believe it to be
confidential or proprietary. Confidential Information may be oral, written,
recorded magnetically or electronically or otherwise stored, and may be that
which Employee originates as well as that which otherwise comes into the
possession or knowledge of Employee.

 

 
1 

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3.     Recognition of Company’s Rights. Employee acknowledges and agrees that
all Confidential Information will be the sole property of the Company and that
the Company will be the sole owner of all patents, patent applications, design
patents or registration, design patent applications, copyrights, mask works,
trademarks, trade secrets and all other intellectual property rights throughout
the world (collectively, “Proprietary Rights”) in connection therewith.
Accordingly, Employee hereby assigns and agrees to assign to the Company any
rights Employee may have or acquire in any Confidential Information and
Proprietary Rights.

 

4.     Non-Disclosure of Third Party Information. Employee understands that the
Company may from time to time receive from third parties confidential
information (“Third Party Information”), subject to a duty on the Company's part
to maintain the confidentiality of such information and to use it only for
certain limited purposes. At all times during Employee’s employment with the
Company and thereafter, Employee will hold the Third Party Information in
strictest confidence and Employee will not disclose, communicate, reproduce,
copy, publish, license, distribute, modify, adapt, transmit, reverse engineer,
decompile, disassemble or use any Third Party Information, except (a) as may be
necessary for Employee to perform his or her duties as an employee of the
Company for the exclusive benefit of the Company or (b) to the extent an officer
of the Company expressly authorizes such in writing. Employee will take all
appropriate action, whether by instruction, agreement or otherwise, to ensure
the protection, confidentiality and security of the Third Party Information and
to satisfy Employee’s obligations under this Agreement. Employee will notify the
Company immediately upon discovery of any loss, misuse, misappropriation or
disclosure of Third Party Information or any other breach of this Agreement by
Employee, and Employee will cooperate with the Company in every reasonable way
to help the Company prevent its further unauthorized use or disclosure.

 

5.     Return of Information; Inspections. Employee will, at the Company’s
request and/or upon termination of the employment relationship for any reason,
return all originals, copies, reproductions and summaries of any Confidential
Information and all other tangible materials and devices provided to Employee as
Confidential Information or containing Confidential Information, and/or, at the
Company’s option, certify destruction of the same. In addition, Employee will,
at the Company’s request and/or upon termination of the employment relationship
for any reason, return all originals, copies, reproductions and summaries of any
Third Party Information and all other tangible materials and devices provided to
Employee as Third Party Information or containing Third Party Information,
and/or, at the Company’s option, certify destruction of the same. Upon
termination of his or her employment with the Company, Employee will promptly
deliver to the Company all property in Employee’s possession, custody or control
that is owned by the Company. Employee agrees that any property situated on the
Company’s premises and owned by the Company, including, but not limited to,
computers, disks and other storage media, is subject to inspection by Company
personnel at any time without notice.

 

6.     No Improper Use of Materials. During his or her employment with the
Company, Employee will not improperly use or disclose any Confidential
Information or trade secrets, if any, of any former employer or any other person
to whom Employee has an obligation of confidentiality, and Employee will not
bring onto the premises of the Company any unpublished documents or any property
belonging to any former employer or any other person to whom Employee has an
obligation of confidentiality unless consented to in writing by that former
employer or person.

 

7.     Assignment of Inventions. Employee hereby irrevocably assigns to the
Company all right, title and interest of Employee in and to any and all
Inventions (and all Proprietary Rights with respect thereto), whether or not
patentable, copyrightable or protectable as trade secrets, made, conceived,
reduced to practice or created by Employee, either alone or jointly with others,
during the period of his or her employment with the Company. Employee
acknowledges that all original works of authorship which are made by Employee
(alone or jointly with others) within the scope of his or her employment and
which are copyrightable are "works made for hire," as that term is defined in
the United States Copyright Act. In addition to the foregoing assignment of
Inventions (and all Proprietary Rights with respect thereto) to the Company,
Employee hereby irrevocably assigns to the Company any and all Moral Rights (as
defined below) that Employee may have in or with respect to any Invention, and
Employee forever waives and agrees not to assert any and all Moral Rights he or
she may have in or with respect to any Invention, even after termination of
employment with the Company.

 

 
 2

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For purposes of this Agreement, the term “Inventions” means inventions,
discoveries, improvements, designs, techniques, ideas, processes, compositions
of matter, formulas, data, software programs, databases, mask works, works of
authorship, know-how and trade secrets.

 

For purposes of this Agreement, the term “Moral Rights” means any right to claim
authorship of an Invention, to object to or prevent the modification of any
Invention, or to withdraw from circulation or control the publication or
distribution of any Invention, and any similar right, existing under judicial or
statutory law of any country or under any treaty, regardless of whether such
right is denominated or generally referred to as a “moral right.”

 

8.     Disclosure of Inventions. Employee will promptly disclose to the Company
all Inventions that Employee makes, conceives, reduces to practice or creates,
either alone or jointly with others, during the period of his or her employment
with the Company. In addition, Employee will disclose to the Company all patent
applications filed by Employee within three (3) years after termination of
employment with the Company.

 

9.     Assistance. Employee agrees to assist the Company in every proper way to
obtain and, from time to time, enforce United States and foreign Proprietary
Rights relating to Inventions assigned hereunder to the Company in any and all
countries. To that end, Employee will execute, verify and deliver such documents
and perform such other acts (including appearances as a witness) as the Company
may reasonably request for use in applying for, obtaining, perfecting,
evidencing, sustaining and enforcing such Proprietary Rights and the assignment
thereof. In addition, Employee will execute, verify and deliver assignments of
such Proprietary Rights to the Company or its designee. Employee’s obligation to
assist the Company with respect to Proprietary Rights relating to Inventions in
any and all countries will continue beyond the termination of Employee’s
employment, but the Company agrees to compensate Employee at a reasonable rate
after Employee’s termination for the time actually spent by Employee at the
Company's request on such assistance. Employee hereby irrevocably designates and
appoints the Company and its duly authorized officers and agents as Employee’s
agent and attorney-in-fact to act for and on behalf of Employee (a) to execute,
verify and file any document needed in connection with the actions specified in
this section and (b) to do all other lawfully permitted acts to further the
purposes of this section, in each case with the same legal force and effect as
if executed or performed by Employee. Employee hereby waives and quitclaims to
the Company any and all claims, of any nature whatsoever, which Employee now or
may hereafter have for infringement of any Proprietary Rights assigned hereunder
to the Company.

 

10.     Prior Inventions. Inventions, if any, which Employee made prior to the
commencement of his or her employment with the Company are excluded from the
scope of this Agreement. To preclude any possible uncertainty, Employee has set
forth on Exhibit A hereto a complete list of all Inventions that Employee,
whether alone or jointly with others, has conceived, developed or reduced to
practice or caused to be conceived, developed or reduced to practice prior to
commencement of his or her employment with the Company, that Employee considers
to be his or her property or the property of third parties and that Employee
wishes to have expressly excluded from the scope of this Agreement.

 

11.     Efforts; Non-Competition. Employee acknowledges that his or her
employment with the Company requires his or her full attention and effort during
normal business hours, and Employee will give his or her best effort, skill and
inventive ability to the business interests of the Company. During the term of
his or her employment with the Company, Employee will not, directly or
indirectly, participate in the management, operation, financing or control of,
or be employed by or consult for or otherwise render services to, any person or
entity that competes anywhere in the world with the Company in the conduct of
the business of the Company as conducted or as proposed to be conducted (a
“Competing Business”), nor will Employee engage in any other activities that
conflict with his or her obligations to the Company.

 

 
 3

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12.     Non-Solicitation. During the term of his or her employment by the
Company and for a period of two (2) years after the date his or her employment
with the Company ends for any reason, Employee will not, directly or indirectly,
(a) engage or solicit to hire or engage any individual who was engaged as a
contractor or consultant or employed by the Company while Employee was employed
by the Company and who (i) is engaged as a contractor or consultant or employed
by the Company at the time of the proposed solicitation or engagement or (ii)
was engaged as a contractor or consultant or employed by the Company within six
months of the proposed solicitation or engagement, (b) otherwise induce or
attempt to induce any such individual to terminate engagement or employment by
the Company, (c) in any way interfere with the relationship between the Company
and any such individual, (d) solicit (other than for the exclusive benefit of
the Company) any customer of the Company if the purpose of such activity is to
solicit such customer for a Competing Business, to encourage such customer to
discontinue, reduce or adversely alter the amount of such customer’s business
with the Company or to other interfere with the Company’s relationship with such
customer, or (e) in any way interfere with the Company’s relationship with any
supplier, manufacturer, service provider or other business relation of the
Company.

 

13.     No Conflicting Obligation. Employee represents and agrees that his or
her performance of the provisions of this Agreement does not, and will not,
breach any agreement to keep in confidence information acquired by Employee in
confidence or in trust prior to his or her employment by the Company. Employee
agrees not to enter into any agreement, either written or oral, in conflict
herewith.

 

14.     Reasonableness of Restrictions. Employee agrees that the restrictions on
Employee’s activities outlined in this Agreement are reasonable and necessary to
protect the Company’s legitimate business interests, that the consideration
provided by the Company is fair and reasonable, and that given the importance to
the Company of its Confidential Information, the post-employment restrictions on
Employee’s activities are likewise fair and reasonable.

 

15.     Injunctive Relief. Employee acknowledges and agrees that failure to
adhere to the terms of this Agreement will cause the Company irreparable damage
for which monetary damages alone would be inadequate compensation. Therefore,
Employee agrees that, in addition to monetary damages, the Company will be
entitled to an injunction and other equitable relief, including ex parte
injunctive relief, in the event of any breach or threatened breach (such
threatened breach being determined in the sole judgment of the Company) of the
provisions of this Agreement. Employee waives the making of a bond or showing
actual damages as a condition for obtaining injunctive relief. Such remedy shall
not be deemed the exclusive remedy for the breach of this Agreement by Employee,
but will be in addition to all other remedies available to the Company whether
at law or in equity. Additionally, if Employee breaches this Agreement, the
Company will be entitled to its reasonable attorney’s fees and costs associated
with enforcing this Agreement. Notwithstanding any judicial determination that
any provision of this Agreement is not specifically enforceable, the Company
will nonetheless be entitled to recover monetary damages as a result of any
breach by Employee.

 

16.     Governing Law. This Agreement will be governed by and construed in
accordance with the internal laws of the state of Delaware, without giving any
effect to that state’s conflict of laws principles.

 

 
4 

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17.     Employment. Employee acknowledges and agrees that this Agreement does
not create an employment contract with the Company for any term, nor does it in
any way limit the Company’s right to otherwise terminate Employee’s employment.
Any change or changes in Employee’s duties, salary or compensation will not
affect the validity or scope of this Agreement.

 

18.     Severability. Whenever possible, each provision of this Agreement will
be interpreted in a manner to be effective, valid and enforceable. If, however,
any provision of this Agreement is held to be illegal, invalid or unenforceable
under any present or future law, then such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating or affecting
in any manner whatsoever the remainder of such provision or the remaining
provisions of this Agreement. Furthermore, there shall be added automatically as
a part of this Agreement a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and still have such
similar provision be construed and enforced as legal, valid, and enforceable.

 

19.     Amendments; Waivers. No modification or amendment to this Agreement, nor
any waiver of any rights under this Agreement, will be effective unless in
writing signed by the party to be charged. No waiver by the Company of any
breach of this Agreement will be a waiver of any preceding or succeeding breach.

 

20.     Assignment. The Company may assign its rights under this Agreement. This
Agreement, and the duties and obligations of Employee hereunder, may not be
assigned or delegated by Employee.

 

21.     Survival. The terms of this Agreement, and Employee’s duties and
obligations hereunder, will survive any termination of Employee’s employment
with the Company for any reason.

 

22.     Headings. Headings in this Agreement are for informational purposes only
and will not be used to construe the intent of this Agreement.

 

23.     Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the Company and Employee concerning the matters addressed
herein.

 

24.     Further Assurances. Employee will cooperate reasonably with the Company
in connection with any steps required to be taken as part of Employee’s
obligations under this Agreement, and Employee will (a) execute and deliver to
the Company such other documents, and (b) do such other acts and things, in each
case as the Company may reasonably request for the purpose of carrying out the
provisions of this Agreement.

 

 
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25.     Acknowledgment. Employee acknowledges that he or she has received a copy
of this Agreement, which he or she has read and understood, and Employee
voluntarily agrees to abide by its terms. Employee authorizes the Company to
notify any future employer(s) of Employee of the terms of this Agreement and
Employee’s obligations hereunder.

 

*****

  

 

/s/ Francis P. Grillo

 

 

9/10/2014

 

Employee Signature      Date                       Francis P. Grillo        
Employee Name        

 

Accepted by:

 

MRI Interventions, Inc.

 

 

By: /s/ Kimble Jenkins                     Name: Kimble Jenkins          

 

 

 

 

 

Title: CEO        

 

 
6

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Exhibit A

  

 

The following is a complete list of all inventions or improvements relevant to
the subject matter of my employment with the Company that have been made,
conceived, first reduced to practice or created by me, alone or jointly with
others, prior to my employment with the Company that I desire to remove from the
operation of the Company's Non-Disclosure and Proprietary Rights Agreement:

      

☑

No inventions or improvements

 

 

☐

See below:

 

 

 

 

 

 

 

 

 

 

            ☐ Additional sheets attached.

  

 

I propose to bring to my employment the following materials and documents of a
former employer:

 

☑

No materials or documents

 

 

☐

See below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

☐ Additional sheets attached.

     

 

/s/ Francis P. Grillo     9/10/2014   Employee Signature      Date              
        Francis P. Grillo        

Employee Name

 

 

 

 

 

 

 
 7

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Exhibit B

 

NON-COMPETITION AGREEMENT

 

See Attached

 

 
 

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MRI INTERVENTIONS, INC.

 

NON-COMPETITION AGREEMENT

 

In consideration and as a condition of my employment (or my continued
employment) with MRI Interventions, Inc., or any of its current or future
subsidiaries, affiliates, successors or assigns (collectively, the “Company”),
and in consideration of my receipt of the compensation now and hereafter paid to
me by the Company, the undersigned (hereinafter referred to as “Employee”)
hereby acknowledges and agrees to the following:

 

 

1.     Defined Terms. For purposes of this Agreement, the following terms have
the meanings specified or referred to in this Section 1: 

 

(a)     “Conflicting Organization” means any individual or entity that, directly
or indirectly, engages in, or is about to become engaged in, Conflicting
Research or the development, design, production, manufacture, promotion,
marketing, sale, support or service of a Conflicting Product.

 

(b)     “Conflicting Product” means medical devices, goods, products, product
lines or services, and each and every component thereof, developed, designed,
produced, manufactured, marketed, promoted, sold, supported or serviced, or that
are in development or the subject of research, by anyone other than the Company
that are the same or similar to, perform any of the same or similar functions
as, may be substituted for, or are intended or used for any of the same purposes
as, a Company Product.

 

(c)     “Conflicting Research” means any research or development of any kind or
nature conducted by anyone other than the Company, which is intended for, or may
be useful in, any aspect of the development, design, production, manufacture,
marketing, promotion, sale, support or service of a Conflicting Product.

 

(d)     “Company Product” means any medical device, goods, products, product
lines or services (i) that during the last one (1) year in which Employee was
employed by the Company, Employee, or persons under Employee’s management,
direction or supervision, performed research regarding, designed, developed,
produced, manufactured, marketed, promoted, sold, solicited sales of, supported
or serviced on behalf of the Company, or (ii) with respect to which Employee at
any time received or otherwise obtained or learned Confidential Information.

 

(e)     “Restricted Area” means the United States of America or in any other
country in which the Company has received or applied for regulatory clearances
or approvals for Company Products.

 

2.     Efforts; Non-Competition. Employee acknowledges that his or her
employment with the Company requires his or her full attention and effort during
normal business hours, and Employee will give his or her best effort, skill and
inventive ability to the business interests of the Company. During the term of
his or her employment with the Company, Employee will not, directly or
indirectly, participate in the management, operation, financing or control of,
or be employed by or consult for or otherwise render services to, any individual
or entity that competes with the Company in the Restricted Area in the conduct
of the business of the Company as conducted or as proposed to be conducted, nor
will Employee engage in any other activities that conflict with his or her
obligations to the Company.

 

In addition, for a period of one (1) year after the date his or her employment
with the Company ends for any reason, Employee will not, directly or indirectly,
participate in the management, operation, financing or control of, or be
employed by or consult for or otherwise render services to, any Conflicting
Organization in the Restricted Area in connection with or relating to a
Conflicting Product or Conflicting Research.

 

 
 1

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3.     No Conflicting Obligation. Employee represents and agrees that his or her
performance of the provisions of this Agreement does not, and will not, breach
any agreement to keep in confidence information acquired by Employee in
confidence or in trust prior to his or her employment by the Company. Employee
agrees not to enter into any agreement, either written or oral, in conflict
herewith.

 

4.     Reasonableness of Restrictions. Employee agrees that the restrictions on
Employee’s activities outlined in this Agreement are reasonable and necessary to
protect the Company’s legitimate business interests, that the consideration
provided by the Company is fair and reasonable, and that the post-employment
restrictions on Employee’s activities are fair and reasonable.

 

5.     Injunctive Relief. Employee acknowledges and agrees that failure to
adhere to the terms of this Agreement will cause the Company irreparable damage
for which monetary damages alone would be inadequate compensation. Therefore,
Employee agrees that in addition to monetary damages, the Company will be
entitled to an injunction and other equitable relief, including ex parte
injunctive relief, in the event of any breach or threatened breach (such
threatened breach being determined in the sole judgment of the Company) of the
provisions of this Agreement. Employee waives the making of a bond or showing
actual damages as a condition for obtaining injunctive relief. Such remedy shall
not be deemed the exclusive remedy for the breach of this Agreement by Employee,
but will be in addition to all other remedies available at law or in equity to
the Company. Additionally, if Employee breaches this Agreement, the Company will
be entitled to its reasonable attorney’s fees and costs associated with
enforcing this Agreement. Notwithstanding any judicial determination that any
provision of this Agreement is not specifically enforceable, the Company will
nonetheless be entitled to recover monetary damages as a result of any breach by
Employee.

 

6.     Governing Law. This Agreement will be governed by and construed in
accordance with the internal laws of the state of Delaware, without giving any
effect to that state’s conflict of laws principles.

 

7.     Employment. Employee acknowledges and agrees that this Agreement does not
create an employment contract with the Company for any term, nor does it in any
way limit the Company’s right to otherwise terminate Employee’s employment. Any
change or changes in Employee’s duties, salary or compensation will not affect
the validity or scope of this Agreement.

 

8.     Severability. Whenever possible, each provision of this Agreement will be
interpreted in a manner to be effective, valid and enforceable. If, however, any
provision of this Agreement is held to be illegal, invalid or unenforceable
under any present or future law, then such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating or affecting
in any manner whatsoever the remainder of such provision or the remaining
provisions of this Agreement. Furthermore, there shall be added automatically as
a part of this Agreement a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and still have such
similar provision be construed and enforced as legal, valid, and enforceable.

 

9.     Amendments; Waivers. No modification or amendment to this Agreement, nor
any waiver of any rights under this Agreement, will be effective unless in
writing signed by the party to be charged. No waiver by the Company of any
breach of this Agreement will be a waiver of any preceding or succeeding breach.

 

 
2 

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10.     Assignment. The Company may assign its rights under this Agreement. This
Agreement, and the duties and obligations of Employee hereunder, may not be
assigned or delegated by Employee.

 

11.     Survival. The terms of this Agreement, and Employee’s duties and
obligations hereunder, will survive any termination of Employee’s employment
with the Company for any reason.

 

12.     Headings. Headings in this Agreement are for informational purposes only
and will not be used to construe the intent of this Agreement.

 

13.     Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the Company and Employee concerning the matters addressed
herein.

 

14.     Further Assurances. Employee will cooperate reasonably with the Company
in connection with any steps required to be taken as part of Employee’s
obligations under this Agreement, and Employee will (a) execute and deliver to
the Company such other documents, and (b) do such other acts and things, in each
case as the Company may reasonably request for the purpose of carrying out the
provisions of this Agreement.

 

15.     Acknowledgment. Employee acknowledges that he or she has received a copy
of this Agreement, which he or she has read and understood, and Employee
voluntarily agrees to abide by its terms. Employee authorizes the Company to
notify any future employer(s) of Employee of the terms of this Agreement and
Employee’s obligations hereunder.

 

 

 

/s/ Francis P. Grillo     9/10/2014   Employee Signature       Date            
          Francis P. Grillo        

Employee Name

 

 

 

 

 

 

 

Accepted by:

 

MRI Interventions, Inc.

 

  

By: /s/ Kimble Jenkins                     Name: Kimble Jenkins          

 

 

 

 

 

Title: CEO         

 

 
3 

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Exhibit C

 

NON-QUALIFIED STOCK OPTION AGREEMENT

 

See Attached

 

 
 

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THIS OPTION AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR APPLICABLE STATE SECURITIES LAWS. THIS OPTION, AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF, MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR THE AVAILABILITY OF
AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS.

 

MRI INTERVENTIONS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

 

THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is made effective
as of the 6th day of October, 2014 (the “Effective Date”), by and between MRI
INTERVENTIONS, INC., a Delaware corporation (the “Company”), and FRANCIS P.
GRILLO (the “Optionee”).

 

WHEREAS, the Company desires to afford the Optionee an opportunity to purchase
shares of the Company’s common stock, par value $.01 per share (the “Shares”),
subject to the terms and conditions hereinafter set forth;

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:

 

1.             Grant of Option.

 

(a)     The Company grants as of the date of this Agreement the right and option
(the “Stock Option”) to purchase two million four hundred thousand (2,400,000)
Shares, in whole or in part (the “Option Shares”), at an exercise price of
$_____ per Share (the “Option Exercise Price Per Share”), on the terms and
conditions set forth in this Agreement.

 

(b)     The Stock Option shall be a non-qualified stock option. The Stock Option
is not intended to be an “incentive stock option” under Section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”). In order to comply with
all applicable federal or state tax laws or regulations, the Company may take
such action as it deems appropriate to insure that, if necessary, all applicable
federal, state or other taxes are withheld or collected from the Optionee. This
Agreement is not subject to, and the Stock Option is not granted under, the
Company’s 2013 Incentive Compensation Plan.

 

2.            Exercisability Schedule. No portion of the Stock Option may be
exercised until such portion shall have become exercisable. Except as set forth
below, and subject to the discretion of the Company’s Board of Directors or a
duly authorized committee thereof (in either case, the “Board”) to accelerate
the exercisability schedule hereunder, the Stock Option shall be exercisable
with respect to the following number of Option Shares on the dates indicated:

 

Incremental Number of

Option Shares Exercisable

 

Exercisability Date

800,000

 

On the first anniversary of the Effective Date

800,000

 

On the second anniversary of the Effective Date

800,000

 

On the third anniversary of the Effective Date

 

 

 
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Notwithstanding anything herein to the contrary, in the event of a Change of
Control, the Stock Option shall become fully exercisable as of the effective
time of the Change of Control. For purposes of this Agreement, the term “Change
of Control” shall have the same meaning given to that term in the Company’s 2013
Incentive Compensation Plan.

 

3.             Manner of Exercise.

 

(a)     The Optionee may exercise the Stock Option only in the following manner:

 

The Optionee may give written notice to the Company of his election to purchase
some or all of the Option Shares purchasable at the time of such notice. This
notice shall specify the number of Option Shares to be purchased.

 

Payment of the purchase price for the Option Shares may be made by one or more
of the following methods: (i) in cash or its equivalent (e.g., by personal
check) at the time the Stock Option is exercised; (ii) in Shares having a Fair
Market Value equal to the aggregate Option Exercise Price Per Share for the
Option Shares being purchased and satisfying such other requirements as may be
imposed by the Board; provided, that such Shares have been held by the Optionee
for no less than six months (or such other period as established from time to
time by the Board in order to avoid adverse accounting treatment applying
generally accepted accounting principles); (iii) partly in cash and partly in
Shares (as described in the preceding clause (ii)); (iv) if there is a public
market for the Shares at such time, through the delivery of irrevocable
instructions to a broker to sell Shares obtained upon the exercise of the Stock
Option and to deliver promptly to the Company an amount out of the proceeds of
such sale equal to the aggregate Option Exercise Price Per Share for the Option
Shares being purchased, provided that in the event the Optionee chooses to pay
the Option Exercise Price Per Share as so provided, the Optionee and the broker
shall comply with such procedures and enter into such agreements of indemnity
and other agreements as the Board shall prescribe as a condition of such payment
procedure; or (v) through “net settlement” in Shares. In the case of a “net
settlement” of the Stock Option, the Company will not require a cash payment of
the Option Exercise Price Per Share for the Option Shares being purchased, but
will reduce the number of Shares issued upon the exercise by the largest number
of whole Shares that have a Fair Market Value that does not exceed the aggregate
Option Exercise Price Per Share for the Option Shares set forth in this
Agreement. With respect to any remaining balance of the aggregate Option
Exercise Price Per Share for the Option Shares, the Company shall accept a cash
payment. Payment instruments will be received subject to collection.

 

The transfer to the Optionee on the records of the Company or of the transfer
agent of the Option Shares will be contingent upon (i) the Company’s receipt
from the Optionee of the full purchase price for such Option Shares, as set
forth above, (ii) the fulfillment of any other requirements contained herein or
in any other applicable agreement or applicable laws and regulations, and (iii)
the receipt by the Company of any agreement, statement or other evidence that
the Company may require to satisfy itself that the issuance of the Shares
pursuant to the exercise of the Stock Option and any subsequent resale of such
Shares will be in compliance with applicable laws and regulations.

 

(b)     The Shares purchased upon exercise of the Stock Option shall be
transferred to the Optionee on the records of the Company or of the transfer
agent upon compliance to the satisfaction of the Board with all requirements
under applicable laws or regulations in connection with such transfer and with
the requirements hereof. The determination of the Board as to such compliance
shall be final and binding on the Optionee. The Optionee shall not be deemed to
be the holder of, or to have any of the rights of a holder with respect to, any
Shares subject to the Stock Option unless and until the Stock Option shall have
been exercised pursuant to the terms hereof, the Company or the transfer agent
shall have transferred the Shares to the Optionee, and the Optionee’s name shall
have been entered as the stockholder of record on the books of the Company.

 

 
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(c)     The minimum number of Shares with respect to which the Stock Option may
be exercised at any one time shall be 100 Shares, unless the number of Shares
with respect to which the Stock Option is being exercised is the total number of
Shares subject to exercise under the Stock Option at the time.

 

(d)     Notwithstanding any other provision hereof, no portion of the Stock
Option shall be exercisable after the Expiration Date hereof.

 

4.             Termination of Employment. If the Optionee’s employment by the
Company (or any affiliate of the Company) is terminated, the period within which
to exercise the Stock Option may be subject to earlier termination as set forth
below or as set forth in that certain Employment Agreement dated as of September
____, 2014 by and between the Company and the Optionee (as the same may be
amended from time to time, the “Employment Agreement”).

 

(a)     Termination Due to Death. If the Optionee’s employment terminates by
reason of the Optionee’s death, any portion of the Stock Option outstanding on
such date may be exercised, to the extent exercisable on the date of Optionee’s
death, by the Optionee’s legal representative or legatee for a period of 12
months from the date of death or until the Expiration Date, if earlier. Any
portion of the Stock Option that is not exercisable on the date of death shall
terminate immediately and be of no further force or effect.

 

(b)     Termination Due to Disability. If the Optionee’s employment terminates
by reason of the Optionee’s Disability, any portion of the Stock Option
outstanding on such date may be exercised, to the extent exercisable on the date
of Disability, by the Optionee, or the Optionee’s legal representative or
guardian, as applicable, for a period of 12 months from the date of Disability
or until the Expiration Date, if earlier. Any portion of the Stock Option that
is not exercisable on the date of Disability shall terminate immediately and be
of no further force or effect.

 

(c)     Termination for Cause. If the Optionee’s employment with the Company (or
any affiliate thereof) terminates for Cause, any portion of the Stock Option
outstanding on such date shall terminate immediately and be of no further force
or effect. For purposes of this Agreement, “Cause” shall have the meaning set
forth in the Employment Agreement.

 

(d)     Voluntary Termination. If the Optionee voluntarily terminates his
employment, (i) any portion of the Stock Option outstanding on such date may be
exercised, to the extent exercisable on the date of termination, for a period of
three months from the date of termination or until the Expiration Date, if
earlier, and (ii) any portion of the Stock Option that is not exercisable on the
date of termination shall terminate immediately and be of no further force or
effect.

 

        (e)      Other Termination. If the Optionee’s employment terminates for
any reason other than the Optionee’s voluntary termination, the Optionee’s
death, the Optionee’s Disability or for Cause, the terms of the Employment
Agreement shall control and govern the exercisability of the Stock Option
following such termination.     

 

The Board’s determination of the reason for termination of the Optionee’s
employment shall be conclusive and binding on the Optionee and his
representatives or legatees.

 

5.        Termination of Option. The Option will expire as of 5:00 pm (Central
time) on the tenth anniversary of the Effective Date (the “Expiration Date”)
with respect to any then unexercised portion thereof, unless terminated earlier
as set forth herein or the Employment Agreement.

 

6.        Registration; Legend. The Company acknowledges its intention to
prepare and file with the U.S. Securities and Exchange Commission a registration
statement on Form S-8 covering the Shares issuable upon exercise of the Stock
Option. Upon exercise of the Stock Option, the certificate evidencing the
purchased Shares shall set forth any legend required by applicable law.

 

 
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7.        Adjustments. In the event that any unusual or non-recurring
transactions, including an unusual or non-recurring dividend or other
distribution (whether in the form of an extraordinary cash dividend, dividend of
Shares, other securities or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination or other similar corporate transaction or event affects the Shares,
then the Company shall, depending on the particular circumstances, in an
equitable and proportionate manner (and, as applicable, in such equitable and
proportionate manner as is consistent with Section 409A of the Code and the
regulations thereunder) either: (a) adjust any or all of (i) the number of
Shares or other securities of the Company (or number and kind of other
securities or property) subject to the Stock Option, provided that the number of
Shares subject to the Stock Option shall always be a whole number; and (ii) the
Option Exercise Price Per Share with respect to the Stock Option; (b) provide
for an equivalent award in respect of securities of the surviving entity of any
merger, consolidation or other transaction or event having a similar effect; or
(c) make provision for a cash payment to the Optionee in lieu of the Stock
Option.

 

8.        No Obligation to Continue Employment. Neither the Company nor any of
its affiliates is obligated by or as a result of this Agreement to continue the
Optionee in employment and this Agreement shall not interfere in any way with
the right of the Company or any of its affiliates to terminate the employment of
the Optionee at any time, subject to the terms of the Employment Agreement.

 

9.        Amendments to Stock Option. The Company may waive any conditions or
rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, the Stock Option, prospectively or retroactively; provided that any
such waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would adversely affect the rights of the Optionee or any holder
or beneficiary of the Option shall not to that extent be effective without the
consent of the Optionee, holder or beneficiary affected.

 

9.        Limited Transferability. Unless otherwise approved by the Board, this
Agreement is personal to the Optionee, is non-assignable and is not transferable
in any manner, by operation of law or otherwise, other than by will or the laws
of descent and distribution. Except as provided in Section 4(b) of this
Agreement, the Stock Option is exercisable, during the Optionee’s lifetime, only
by the Optionee, and thereafter, only by the Optionee’s legal representative or
legatee.

 

10.      Reservation of Shares. At all times during the term of the Stock
Option, the Company shall use its best efforts to reserve and keep available
such number of Shares as shall be sufficient to satisfy the requirements of this
Agreement.

 

11.      Severability. If any provision of this Agreement is, or becomes, or is
deemed to be, invalid, illegal, or unenforceable in any jurisdiction or to
either party, such provision shall be construed or deemed amended to conform to
the applicable laws, or if it cannot be construed or deemed amended without, in
the determination of the Board, materially altering the intent of this
Agreement, such provision shall be stricken as to such jurisdiction or party,
and the remainder of this Agreement shall remain in full force and effect.

 

12.      Tax Withholding. The Optionee shall, not later than the date as of
which the exercise of the Stock Option becomes a taxable event for federal
income tax purposes, pay to the Company or make arrangements satisfactory to the
Committee for payment of any federal, state, and local taxes required by law to
be withheld on account of such taxable event. The minimum required tax
withholding obligation may be satisfied, in whole or in part, by the Company
withholding from the Option Shares to be issued a number of Shares with an
aggregate Fair Market Value that would satisfy the withholding amount due.

 

 
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13.       Notices. Notices hereunder shall be mailed or delivered to the Company
at its principal place of business and shall be mailed or delivered to the
Optionee at the address on file with the Company or, in either case, at such
other address as one party may subsequently furnish to the other party in
writing.

 

14.      Certain Defined Terms. Although the Stock Option is not granted under
the Company’s 2013 Incentive Compensation Plan, for purposes of this Agreement,
the terms “Change of Control,” “Disability” and “Fair Market Value” shall have
the same meanings given to those terms in such 2013 Incentive Compensation Plan.

 

15.      Governing Law. The validity, construction and effect of this Agreement
shall be determined in accordance with the laws of the State of Delaware without
giving effect to conflicts of laws principles.

 

16.      Successors in Interest. This Agreement shall inure to the benefit of
and be binding upon any successor to the Company. This Agreement shall inure to
the benefit of the Optionee’s administrators, executors, heirs and legal
representatives. All obligations imposed upon the Optionee and all rights
granted to the Company under this Agreement shall be binding upon the Optionee’s
administrators, executors, heirs and legal representatives.

  

 

[The next page is the signature page]

 

 
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IN WITNESS WHEREOF, the parties have executed this Non-Qualified Stock Option
Agreement to be effective as of the Effective Date.

  

 

 

MRI INTERVENTIONS, INC.

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

Francis P. Grillo

 

 

 6