EX-10.5 Amended Employment Agreement/Ferre, M.D.



 





Exhibit 10.5




MAURICE R. FERRÉ

AMENDED EMPLOYMENT AGREEMENT




          THIS AMENDED EMPLOYMENT AGREEMENT (this “Agreement”) is dated November 12, 2007 and amends the
Employment Agreement dated as of September 18, 2007, by and between MAKO Surgical Corp., a Delaware
corporation (the “Company”), and Maurice R. Ferré (the “Executive”).




          WHEREAS, the Company desires to employ the Executive as its President and Chief Executive
Officer and the Executive desires to accept such employment, on the terms set forth below.




          Accordingly, the parties hereto agree as follows:




     1. Term. The Company hereby employs the Executive, and the Executive hereby accepts
such employment for an initial term commencing as of the date hereof and ending December 31 , 2010,
unless sooner terminated in accordance with the provisions of Section 4 or Section 5 (the period
during which the Executive is employed hereunder being hereinafter referred to as the “Term”).
If either the Company or Executive does not wish to renew this Agreement when it expires at the end
of the initial or any renewal term hereof as hereinafter provided, or if either the Company or
Executive wishes to renew this Agreement on different terms than those contained herein, it or he
shall give written notice in accordance with Section 10.4 below of such intent to the other party
at least one hundred twenty (120) days prior to the expiration date. In the absence of such
notice, this Agreement shall be renewed on the same terms and conditions contained herein for a
term of one (1) year from the date of expiration. The parties expressly agree that designation of a
term and renewal provisions in this Agreement does not in any way limit the right of the parties to
terminate this Agreement at any time as hereinafter provided. Reference herein to the term of this
Agreement shall refer both to the initial term and any successive term as the context requires.



     2. Duties. The Executive, in his capacity as President and Chief Executive, shall
faithfully perform for the Company the duties of said office and shall perform such other duties
consistent with his position of an executive, managerial or administrative nature as shall be
specified and designated from time to time by the Company’s board of directors or similar governing
body of the Company (the “Board”) (including the performance of services for, and serving on the
Board of Directors of, any subsidiary or affiliate of the Company without any additional
compensation). In addition, for so long as Executive remains President and Chief Executive Officer
of the Company, the Board shall nominate him as a member of the Board of Directors of the Company
(the “Board) and shall use its best efforts to cause his election as a Member of the Board. The
Executive shall devote substantially all of the Executive’s business time and effort to the
performance of the Executive’s duties hereunder, provided that in no event shall this sentence
prohibit the Executive from performing personal, investment and charitable



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activities and any other activities, including serving on the board of directors of other
companies, provided, however, that the Executive may serve on the board of directors of Z-KAT, Inc.
only if approved by a majority of the disinterested members of the Board, so long as such
activities do not materially and adversely interfere with the Executive’s duties for the Company.
The Board may delegate its authority to take any action under this Agreement to the Compensation
Committee of the Board (the “Compensation Committee”).



     3. Compensation.



     3.1 Salary. The Company shall pay the Executive during the Term an Annual Salary at
the rate of three hundred thousand dollars ($300,000) per annum (the “Annual Salary”), payable
semi-monthly and subject to regular deductions and withholdings as required by law. The Annual
Salary may be increased annually by an amount as may be approved by the Board or the Compensation
Committee, and, upon such increase, the increased amount shall thereafter be deemed to be the
Annual Salary for purposes of this Agreement.



     3.2 Annual Cash Incentive. The Executive’s target Annual Cash Incentive amount will
be 50% of the Annual Salary then in effect for each applicable year, provided, however, that
Executive’s Annual Cash Incentive, if any, may be below, at, or above the target based upon the
achievement of individual and objective Company annual performance criteria established by the
Compensation Committee, in its discretion. The Annual Cash Incentive will be paid within 2 1/2
months after the end of the calendar year to which the Annual Cash Incentive relates. For 2007 and
2008, the Annual Cash Incentive will be based on the approved Bonus Structure for the Company’s
Metric Scorecard (as attached hereto as Exhibit ___).



     3.3 Benefits — In General. The Executive shall be permitted during the Term to
participate in any group life, hospitalization or disability insurance plans, health programs,
pension and profit sharing plans and similar benefits that may be available to other senior
executives of the Company generally, on the same terms as may be applicable to such other
executives, in each case to the extent that the Executive is eligible under the terms of such plans
or programs.



     3.4 Vacation. During the Term, the Executive shall be entitled to vacation of twenty
(20) working days per year. Unused vacation will carry over from year-to-year in accordance with
the terms of any Company policy.



     3.5 Expenses. The Company shall pay or reimburse the Executive for all ordinary and
reasonable out-of-pocket expenses actually incurred (and, in the case of reimbursement, paid) by
the Executive during the Term in the performance of the Executive’s services under this Agreement,
provided that the Executive submits such expenses in accordance with the policies applicable to
senior executives of the Company generally.



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     3.6 Equity Awards in the Event of a Change in Control. In the event of a Change in
Control (as defined in Section 6.2), all equity awards held by Executive which vest based on time
shall become vested and all other terms of such awards shall be governed by the plans and programs
and the agreements and other documents pursuant to which such awards were granted.



     4. Termination Due to Death or Disability.



     4.1 Death. In the event of Executive’s death which results in the termination of
Executive’s employment, the Term will terminate, all obligations of the Company and Executive under
Sections 1 through 3 will immediately cease except for obligations which expressly continue after
death, and the Company will pay Executive’s beneficiary or estate, and Executive’s beneficiary or
estate will be entitled to receive, the following:




	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	In lieu of any annual incentive compensation under Section 3.2 for the year in
which Executive dies, a Partial Year Bonus (as defined in Section 6.6);
	 
	 	(iii)	 	All equity awards held by Executive at termination which vest based on time
shall become vested and all other terms of such awards shall be governed by the plans
and programs and the agreements and other documents pursuant to which such options were
granted; and
	 
	 	(iv)	 	All other rights under any other compensatory or benefit plan shall be governed
by such plan. In addition, at Company expense, Executive’s spouse and dependent
children shall be entitled to continuation of health insurance coverage under any
applicable law for a period of nine months, and thereafter at the expense of
Executive’s spouse and dependent children.





     4.2 Disability. The Company may terminate the employment of Executive hereunder due to the
Disability (as defined in Section 6.4) of Executive. Upon termination of employment, the Term will
terminate, all obligations of the Company and Executive under Sections 1 through 3 will immediately
cease except for obligations which expressly continue after termination of employment due to
Disability, and the Company will pay Executive, and Executive will be entitled to receive, the
following:




	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	In lieu of any annual incentive compensation under Section 3.2 for the year in
which Executive becomes disabled, a Partial Year Bonus (as defined in Section 6.6);




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	 	(iii)	 	All equity awards held by Executive at termination which vest based on time
shall become vested and all other terms of such awards shall be governed by the plans
and programs and the agreements and other documents pursuant to which such options were
granted; and
	 
	 	(iv)	 	Disability benefits shall be payable in accordance with the Company’s plans,
programs and policies; and
	 
	 	(v)	 	All other rights under any other compensatory or benefit plan shall be governed
by such plan. In addition, at Company expense, Executive and his spouse and dependent
children shall be entitled to continuation of health insurance coverage under any
applicable law for a period of nine months and thereafter at Executive’s expense.





     4.3 Other Terms of Payment Following Death, or Disability. Nothing in this Section 4 shall
limit the benefits payable or provided in the event Executive’s employment terminates due to death
or Disability under the terms of plans or programs of the Company more favorable to Executive (or
his beneficiaries) than the benefits payable or provided under this Section 4 (except in the case
of the Annual Cash Incentive in lieu of which amounts are paid hereunder), including plans and
programs adopted after the date of this Agreement. Subject to Section 5.6, amounts payable under
this Section 4 following Executive’s termination of employment will be paid as promptly as
practicable after such termination of employment, and, in any event, within 2 1/2 months after the
end of the year in which employment terminates.



     5. Termination of Employment For Reasons Other Than Death or Disability.



     5.1 Termination by the Company for Cause. The Company may terminate the employment of
Executive hereunder for Cause (as defined in Section 6.1) at any time. At the time Executive’s
employment is terminated for Cause, the Term will terminate, all obligations of the Company and
Executive under Sections 1 through 3 will immediately cease, and the Company will pay Executive,
and Executive will be entitled to receive, the following:




	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	The vesting and exercisability of stock options, restricted stock, RSUs and
other equity awards held by Executive at termination and all other terms of such awards
shall be governed by the plans and programs and the agreements and other documents
pursuant to which such options were granted; and
	 
	 	(iii)	 	All other rights under any other compensatory or benefit plan shall be
governed by such plan. In addition, at Executive’s expense, Executive and his spouse
and dependent children shall be entitled to continuation of health insurance coverage
under any applicable law.




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     5.2 Termination by Executive Other Than For Good Reason. Executive may terminate his
employment hereunder voluntarily for reasons other than Good Reason (as defined in Section 6.5) at
any time upon at least 30 days’ written notice to the Company. An election by Executive not to
extend the Term pursuant to Section 2 hereof shall be deemed to be a termination of employment by
Executive for reasons other than Good Reason at the date of expiration of the Term. At the time
Executive’s employment is terminated by Executive other than for Good Reason, the Term will
terminate, all obligations of the Company and Executive under Sections 1 through 3 will immediately
cease, and the Company will pay Executive, and Executive will be entitled to the same compensation
and rights specified in Section 5.1.



     5.3 Termination by the Company Without Cause. The Company may terminate the employment of
Executive hereunder without Cause upon at least 30 days’ written notice to Executive. An election
by the Company not to extend the Term pursuant to Section 2 hereof shall be deemed to be a
termination of employment by the Company Without Cause at the date of expiration of the Term. At
the time Executive’s employment is terminated by the Company (i.e., at the expiration of such
notice period), the Term will terminate, all remaining obligations of the Company and Executive
under Sections 1 through 3 will immediately cease (except as expressly provided below), and the
Company will pay Executive, and Executive will be entitled to receive, the following:




	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	A single severance payment in cash in an aggregate amount equal to the sum of:
(i) one (1) times the Executive’s Annual Salary plus (ii) one (1) times the average of
the two highest Annual Cash Incentive received by Executive during the preceding three
completed performance years provided, however, that if such termination shall occur in
anticipation of a Change in Control (as defined in Section 6.2) or on or within two (2)
years after a Change in Control, such severance payment shall be two (2) times the
Executive’s Annual Salary and average Annual Cash Incentive;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under Section 3.2 for the year in
which Executive’s employment terminates, a Partial Year Bonus (as defined in Section
6.6);
	 
	 	(iv)	 	All equity awards held by Executive at termination which vest based on time
shall become vested and all other terms of such awards shall be governed by the plans
and programs and the agreements and other documents pursuant to which such options were
granted;




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	 	(v)	 	Any performance objectives upon which the earning of performance-based
restricted stock, RSUs, and other equity awards and other long-term incentive awards
(including cash awards,) is conditioned shall be deemed to have been met at the greater
of (A) target level at the date of termination, or (B) actual performance at the date
of termination, and such amounts shall become fully vested and non-forfeitable as a
result of termination of employment at the date of such termination, and, in other
respects, such awards shall be governed by the plans and programs and the agreements
and other documents pursuant to which such awards were granted; and
	 
	 	(vi)	 	All other rights under any other compensatory or benefit plan shall be governed
by such plan. In addition, at Company’s expense, Executive and his spouse and
dependent children shall be entitled to continuation of health insurance coverage
(i.e., medical, dental and vision) under the Company’s group health plan(s) in which
the Executive was participating on the date of termination or if such plan(s) have been
terminated, in the plan(s) in which senior executives of the Company participate for a
period of one (1) year after the date Executive’s employment terminates.




Payments and benefits under this Section 5.3 are subject to Section 5.6.




     5.4 Termination by Executive for Good Reason. Executive may terminate his employment
hereunder for Good Reason upon 30 days’ written notice to the Company which notice must be given
within 90 days of the occurrence of the condition that is the basis for such Good Reason; provided,
however, that, if the basis for such Good Reason is correctible and the Company has corrected the
basis for such Good Reason within 30 days after receipt of such notice, Executive may not then
terminate his employment for Good Reason with respect to the matters addressed in the written
notice, and therefore Executive’s notice of termination will automatically become null and void.
At the time Executive’s employment is terminated by Executive for Good Reason (i.e., at the
expiration of such notice period), the Term will terminate, all obligations of the Company and
Executive under Sections 1 through 3 will immediately cease (except as expressly provided below),
and the Company will pay Executive, and Executive will be entitled to receive, the same
compensation and rights specified in Section 5.3(i) — (vi) and the text following clause (vi).


If any payment or benefit under this Section 5.4 is based on Annual Salary or other level of
compensation or benefits at the time of Executive’s termination and if a reduction in such Annual
Salary or other level of compensation or benefit was the basis for Executive’s termination for Good
Reason, then the Annual Salary or other level of compensation in effect before such reduction shall
be used to calculate payments or benefits under this Section 5.4.





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     5.5 Other Terms Relating to Certain Terminations of Employment. In the event
Executive’s employment terminates for any reason set forth in Section 5.2 through 5.4, Executive
will be entitled to the benefit of any terms of plans or agreements applicable to Executive which
are more favorable than those specified in this Section 5 (except without duplication of payments
or benefits, including in the case of the Annual Cash Incentive in lieu of which amounts are paid
hereunder). Except as otherwise provided under Section 5.6, amounts payable under this Section 5
following Executive’s termination of employment, other than those expressly payable on a deferred
or installment basis, will be paid as promptly as practicable after such a termination of
employment and, in any event, within 2 1/2 months after the end of the year in which employment
terminates.



     5.6 Limitations Under Code Section 409A. Anything in this Agreement to the contrary
notwithstanding, if (A) on the date of termination of Executive’s employment with the Company or a
Subsidiary, any of the Company’s stock is publicly traded on an established securities market or
otherwise (within the meaning of Section 409A(a)(2)(B)(i) of the Internal Revenue Code, as amended
(the “Code”)), (B) if Executive is determined to be a “specified employee” within the meaning of
Section 409A(a)(2)(B) of the Code, (C) the payments exceed the amounts permitted to be paid
pursuant to Treasury Regulations section 1.409A-1(b)(9)(iii) and (D) such delay is required to
avoid the imposition of the tax set forth in Section 409A(a)(1) of the Code, as a result of such
termination, the Executive would receive any payment that, absent the application of this Section
5.6, would be subject to interest and additional tax imposed pursuant to Section 409A(a) of the
Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such payment
shall be payable prior to the date that is the earliest of (1) six (6) months after the Executive’s
termination date, (2) the Executive’s death or (3) such other date as will cause such payment not
to be subject to such interest and additional tax (with a catch-up payment equal to the sum of all
amounts that have been delayed to be made as of the date of the initial payment).



     It is the intention of the parties that payments or benefits payable under this Agreement not
be subject to the additional tax imposed pursuant to Section 409A of the Code. To the extent such
potential payments or benefits could become subject to such Section, the parties shall cooperate to
amend this Agreement with the goal of giving the Executive the economic benefits described herein
in a manner that does not result in such tax being imposed.



     6. Definitions Relating to Termination Events.



     6.1 “Cause”. For purposes of this Agreement, “Cause” shall mean Executive’s:




	 	(i)	 	conviction for commission of a felony or a crime involving
moral turpitude;
	 
	 	(ii)	 	willful commission of any act of theft, fraud, embezzlement or
misappropriation against the Company or its subsidiaries or affiliates;




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	 	(iii)	 	willful and continued failure to substantially perform
Executive’s duties hereunder (other than such failure resulting from
Executive’s incapacity due to physical or mental illness), which failure is not
remedied within 30 calendar days after written demand for substantial
performance is delivered by the Company which specifically identifies the
manner in which the Company believes that Executive has not substantially
performed Executive’s duties.




No act, or failure to act, on the part of Executive shall be deemed “willful” unless done, or
omitted to be done, by Executive not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company. Notwithstanding the foregoing, Executive shall
not be deemed to have been terminated for Cause unless and until (i) Executive shall have been
given notice within 90 days of the occurrence of the condition that is the basis for such Cause and
(ii) there shall have been delivered to Executive a copy of the resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the independent members of the Board at a
meeting of the Board (after reasonable notice to Executive and an opportunity for Executive,
together with Executive’s counsel, to be heard before the Board) finding that, in the good faith
opinion of the Board, Executive was guilty of conduct set forth above in this definition and
specifying the particulars thereof in detail.




     6.2 “Change in Control”. For purposes of this Agreement, a “Change in Control” means the
following:




	 	(i)	 	A transaction or series of transactions (other than an offering
of Stock to the general public through a registration statement filed with the
Securities and Exchange Commission) whereby any “person” or related “group” of
“persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other than
the Company, any of its subsidiaries, an employee benefit plan maintained by
the Company or any of its subsidiaries or a “person” that, prior to such
transaction, directly or indirectly controls, is controlled by, or is under
common control with, the Company) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company and immediately after such acquisition possesses more
than 50% of the total combined voting power of the Company’s securities
outstanding immediately after such acquisition; or
	 
	 	(ii)	 	During any period of two consecutive years, individuals who, at
the beginning of such period, constitute the Board together with any new
director(s) (other than a director designated by a person who shall have




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	 	 	 	entered into an agreement with the Company to effect a transaction described
in Section 6.2(i) hereof or Section 6.2(iii) hereof) whose election by the
Board or nomination for election by the Company’s stockholders was approved
by a vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of the two-year period or whose
election or nomination for election was previously so approved, cease for
any reason to constitute a majority thereof; or
	 
	 	(iii)	 	The consummation by the Company (whether directly involving
the Company or indirectly involving the Company through one or more
intermediaries) of (x) a merger, consolidation, reorganization, or business
combination or (y) a sale or other disposition of all or substantially all of
the Company’s assets in any single transaction or series of related
transactions or (z) the acquisition of assets or stock of another entity, in
each case other than a transaction:






	 	(A)	 	Which results in the Company’s voting
securities outstanding immediately before the transaction continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the Company or the person that, as a result of the
transaction, controls, directly or indirectly, the Company or owns,
directly or indirectly, all or substantially all of the Company’s
assets or otherwise succeeds to the business of the Company (the
Company or such person, the “ Successor Entity “)) directly or
indirectly, at least a majority of the combined voting power of the
Successor Entity’s outstanding voting securities immediately after the
transaction, and;
	 
	 	(B)	 	After which no person or group (as such terms
are used in Sections 13(d) and 14(d)(2) of the Exchange Act)
beneficially owns (within the meaning of Rule 13d-3 under the Exchange
Act) voting securities representing 50% or more of the combined voting
power of the Successor Entity; provided, however, that no person or
group shall be treated for purposes of this Section 6.2(iii)(B) as
beneficially owning 50% or more of combined voting power of the
Successor Entity solely as a result of the voting power held in the
Company prior to the consummation of the transaction; or






	 	(iv)	 	The Company’s stockholders approve a liquidation or dissolution
of the Company and all material contingencies to such liquidation or
dissolution have been satisfied or waived.




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     6.3 “Compensation Accrued at Termination”. For purposes of this Agreement, “Compensation Accrued
at Termination” means the following:




	 	(i)	 	The unpaid portion of annual Annual Salary at the rate payable, in accordance
with Section 3.1 hereof, at the date of Executive’s termination of employment, pro
rated through such date of termination, payable in accordance with the Company’s
regular pay schedule;
	 
	 	(ii)	 	Except as otherwise provided in this Agreement, all earned and unpaid and/or
vested, nonforfeitable amounts owing or accrued at the date of Executive’s termination
of employment under any compensation and benefit plans, programs, and arrangements set
forth or referred to in Sections 3.2-3.3 hereof (including any earned and vested Annual
Cash Incentive and accrued but unused vacation) in which Executive theretofore
participated, payable in accordance with the terms and conditions of the plans,
programs, and arrangements (and agreements and documents thereunder) pursuant to which
such compensation and benefits were granted or accrued; and
	 
	 	(iii)	 	Reasonable business expenses and disbursements incurred by Executive prior to
Executive’s termination of employment, to be reimbursed to Executive, as authorized
under Section 3.5, in accordance the Company’s reimbursement policies as in effect at
the date of such termination.





     6.4 “Disability”. For purposes of this Agreement, “Disability” means the Executive is unable due
to a physical or mental condition to perform the essential functions of his position with or
without reasonable accommodation for six (6) months in the aggregate during any twelve (12) month
period or based on the written certification by two licensed physicians of the likely continuation
of such condition for such period. This definition shall be interpreted and applied consistent
with the Americans with Disabilities Act, the Family and Medical Leave Act, Section 409A of the
Code and other applicable law.



     6.5 “Good Reason”. For purposes of this Agreement, “Good Reason” shall mean, without Executive’s
express written consent, the occurrence of any of the following circumstances unless, if
correctable, such circumstances are fully corrected within 30 days of the notice of termination
given in respect thereof:




	 	(i)	 	The assignment to Executive of duties materially inconsistent with Executive’s
position and status hereunder, or an alteration, materially adverse to Executive, in
the nature of Executive’s duties, responsibilities, and authorities, Executive’s
positions or the conditions of Executive’s employment from those specified in Section 2
or otherwise hereunder (other than inadvertent actions which are promptly remedied);
except the foregoing shall not constitute Good Reason if




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	 	 	 	occurring in connection with the termination of Executive’s employment for Cause,
Disability, as a result of Executive’s death, or as a result of action by or with
the consent of Executive;
	 
	 	(ii)	 	a material reduction by the Company in Executive’s Annual Salary or the setting
of Executive’s annual target incentive opportunity or payment of earned Annual
Incentives in amounts materially less than specified under or otherwise not in
conformity with Section 3 hereof;
	 
	 	(iii)	 	the relocation of Executive’s principal office to a location that is more than
twenty five (25) miles from the Company’s current headquarters;
	 
	 	(iv)	 	the failure of Executive to be elected or relected to the Board or the removal
of the Executive from the Board, other than due to Cause;
	 
	 	(v)	 	the failure of the Company to obtain a satisfactory agreement from any
successor to the Company to fully assume the Company’s obligations and to perform under
this Agreement; or
	 
	 	(vi)	 	any other failure by the Company to perform any material obligation under, or
breach by the Company of any material provision of, this Agreement;





     6.6 “Partial Year Bonus”. For purposes of this Agreement, a Partial Year Bonus is an amount equal
to the target Annual Cash Incentive compensation that would have become payable to Executive for
that year multiplied by a fraction the numerator of which is the number of days Executive was
employed in the year of termination and the denominator of which is the total number of days in the
year of termination.



     7. Excise Tax-Related Provisions. In the event Executive becomes entitled to any
amounts or benefits payable in connection with a Change in Control or other change in control
(whether or not such amounts are payable pursuant to this Agreement) (the “Severance Payments”), if
any of such Severance Payments are subject to the tax (the “Excise Tax”) imposed by Section 4999 of
the Code (or any similar federal, state or local tax that may hereafter be imposed), the Company
shall pay to Executive at the time specified in Section 7(iii) hereof an additional amount (the
“Gross-Up Payment”) such that the net amount retained by Executive, after deduction of any Excise
Tax on the Total Payments (as hereinafter defined) and any federal, state and local income tax and
Excise Tax upon the payment provided for by Section 7(i), shall be equal to the Total Payments;
provided, however that in the event the aggregate value of the Total Payments exceeds three times
the Executive’s “base amount,” as defined in Section 280G(b)(3) of the Code, (the “Parachute
Threshold”) by less than 10%, one or more of the Total Payments shall be reduced so that the
aggregate value of the Total Payments is $1.00 less than the Parachute Threshold. Unless the
Executive shall have given prior written notice specifying a



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different order to the Company to effectuate the foregoing, the Company shall reduce or
eliminate the Total Payments by first reducing or eliminating the portion of the Total Payments
which are not payable in cash and then by reducing or eliminating cash payments, in each case in
reverse order beginning with payments or benefits which are to be paid the farthest in time from
the Change in Control. Any notice given by the Executive pursuant to the preceding sentence shall
take precedence over the provisions of any other plan, arrangement or agreement governing the
Executive’s rights and entitlements to any benefits or compensation. For the avoidance of doubt,
in no event shall the Company be required to pay to Executive any amount under this Section 7 with
respect to any taxes or interest that may arise as a result of Section 409A of the Code.





	 	(i)	 	For purposes of determining whether any of the Severance Payments will be
subject to the Excise Tax and the amount of such Excise Tax:






	 	(A)	 	any other payments or benefits received or to be received by
Executive in connection with a Change in Control or Executive’s termination of
employment (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person whose actions result in a
Change in Control or any Person affiliated with the Company or such Person)
(which, together with the Severance Payments, constitute the “Total Payments”)
shall be treated as “parachute payments” within the meaning of Section
280G(b)(2) of the Code, and all “excess parachute payments” within the meaning
of Section 280G(b)(1) of the Code shall be treated as subject to the Excise
Tax, unless in the opinion of nationally-recognized tax counsel or compensation
consultant the selection of which was approved under Section 7(iv) such other
payments or benefits (in whole or in part) do not constitute parachute
payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code in excess of the base amount within the meaning
of Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax;
	 
	 	(B)	 	the amount of the Total Payments which shall be treated as
subject to the Excise Tax shall be equal to the lesser of (x) the total amount
of the Total Payments and (y) the amount of excess parachute payments within
the meaning of Section 280G(b)(1) of the Code (after applying Section 7(i)(A)
hereof); and
	 
	 	(C)	 	the value of any non-cash benefits or any deferred payments or
benefit shall be determined by a nationally-recognized accounting or consulting
firm the selection of which was approved under Section 7(iv) in
accordance with the principles of Sections 280G(d)(3) and (4) of the Code.




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	 	(ii)	 	For purposes of determining the amount of the Gross-Up Payment, Executive shall
be deemed to pay federal income taxes at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and locality
of Executive’s residence on the date of termination, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and local
taxes. In the event that the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder at the time of termination of Executive’s
employment, Executive shall repay to the Company within ten days after the time that
the amount of such reduction in Excise Tax is finally determined the portion of the
Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up
Payment attributable to the Excise Tax and federal and state and local income tax
imposed on the Gross-Up Payment being repaid by Executive if such repayment results in
a reduction in Excise Tax and/or federal and state and local income tax deduction) plus
interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B)
of the Code. In the event that the Excise Tax is determined to exceed the amount taken
into account hereunder at the time of the termination of Executive’s employment
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an additional
gross-up payment in respect of such excess within ten days after the time that the
amount of such excess is finally determined.
	 
	 	(iii)	 	The payments provided for in this Section 7 shall be made not later than the
thirtieth day following the date of Executive’s termination of employment; provided,
however, that if the amount of such payments cannot be finally determined on or before
such day, the Company shall pay to Executive on such day an estimate, as determined in
good faith by the Company, of the minimum amount of such payments and shall pay the
remainder of such payments (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no
event later than the sixtieth day after the date of Executive’s termination of
employment. In the event that the amount of the estimated payments exceeds the amount
subsequently determined to have been due, such excess shall constitute a loan by the
Company to Executive, payable on the fifteenth day after the demand by the Company
(together with interest at the rate provided in Section 1274(b)(2)(B) of the Code).
	 
	 	(iv)	 	All determinations under this Section 7 shall be made at the expense of the
Company by a nationally recognized public accounting or consulting firm selected by the
Company and subject to the approval of Executive, which
approval shall not be unreasonably withheld. Such determination shall be binding
upon Executive and the Company.




13









 











     8. Discoveries and Works; Confidentiality; Non-Competition and Non-Disclosure; Executive
Cooperation; Non-Disparagement.



     8.1 Discoveries and Works. The Executive understands and agrees that any and all
Confidential Information (as hereinafter defined) of the Company which he has access to, uses or
creates during his employment with the Company is and shall at all times remain the sole and
exclusive property of the Company, and the Executive further agrees to assign to the Company any
right, title or interest he may have in such Confidential Information to the Company. The Executive
also agrees that, if he is asked by the Company (at its expense), he will do all things and sign
all necessary documents reasonably necessary in the opinion of the Company to eliminate any
ambiguity as to the right of the Company in such Confidential Information including but not limited
to providing his full cooperation to the Company in the event of any litigation to protect,
establish or obtain such rights of the Company.



     The Executive understands that this Section 8.1 does not waive or transfer his rights to any
invention for which no equipment, supplies, facility or trade secret or Confidential Information of
the Company was used and which was developed entirely on his own time, unless the invention relates
to the business of the Company, or to the Company’s actual demonstratively anticipated research or
development, or the invention results from any work that he performed for the Company during the
term of his employment relationship with the Company.



     The Executive hereby assigns and transfers to the Company, its successors, legal
representatives and assigns, his entire right, title, and interest in and to any and all present
and future works of authorship, inventions, know-how, confidential information, proprietary
information, or trade secrets resulting from work done by him on behalf of the Company
(collectively, the “Intellectual Property”). The Executive agrees to waive all moral rights
relating to the Intellectual Property developed or produced, including without limitation any and
all rights of identification of authorship, any and all rights of approval, restriction or
limitation on use or subsequent modifications and any and all rights to prevent any changes
prejudicial to his honor or reputation. The Executive further agrees to provide all assistance
reasonably requested by the Company in the establishment, preservation and enforcement of its
rights in the Intellectual Property, such assistance to be provided at the Company’s expense, but
without any additional compensation to the Executive.



     8.2 Confidential Information. The Executive acknowledges that, during the course of
his employment with the Company, the Executive may receive special training and/or may be given
access to or may become acquainted with Confidential Information (as hereinafter defined) of the
Company. As used in this Section 8.2, “Confidential Information” of the Company means all trade
practices, business plans, price lists, supplier lists, customer lists, marketing plans,
financial information, software and all other compilations of information which relate to the
business of the Company, or to any of its subsidiaries, and which have not been disclosed by the
Company to the public, or which are not otherwise generally available to the public.



14









 





     The Executive acknowledges that the Confidential Information of the Company, as such may exist
from time to time, are valuable, confidential, special and unique assets of the Company and its
subsidiaries, expensive to produce and maintain and essential for the profitable operation of their
respective businesses. The Executive agrees that, during the course of his employment with the
Company, or at any time thereafter, he shall not, directly or indirectly, communicate, disclose or
divulge to any Person (as such term is hereinafter defined), or use for his benefit or the benefit
of any Person, in any manner, any Confidential Information of the Company or its subsidiaries
acquired during his employment with the Company or any other confidential information concerning
the conduct and details of the businesses of the Company and its subsidiaries, except as required
in the course of his employment with the Company or as otherwise may be required by law. For
purposes if this Agreement, “Person” shall mean any individual, partnership, corporation, trust,
unincorporated association, joint venture, limited liability company or other entity or any
government, governmental agency or political subdivision.



     All documents relating to the businesses of the Company and its affiliates including, without
limitation, Confidential Information of the Company, whether prepared by the Executive or otherwise
coming into the Executive’s possession, are the exclusive property of the Company and such
respective subsidiaries, and must not be removed from the premises of the Company, except as
required in the course of the Executive’s employment with the Company. The Executive shall return
all such documents (including any copies thereof) to the Company when the Executive ceases to be
employed by the Company or upon the earlier request of the Company or the Board.



     8.3 Noncompetition. During the Term of this Agreement (including any extensions
thereof) and for a period of one (1) year following the termination of the Executive’s employment
under this Agreement for any reason, which period shall be extended to two (2) years if such
termination occurs in anticipation of a Change in Control (as defined in Section 6.2) or on or
within two (2) years after a Change in Control, the Executive shall not, except with the Company’s
express prior written consent, directly or indirectly, in any capacity, for the benefit of any
entity or person (including the Executive):




	 	(i)	 	Become employed by, own, operate, manage, direct, invest in (except through a
mutual fund), or otherwise, directly or indirectly, engage in, or be employed by, any
entity or person which competes with the Business (as hereinafter defined) within the
Territory. For purposes of this Agreement, “Business” shall mean minimally invasive
knee replacement surgery in combination with surgical navigation and robotics. For
purposes of this Agreement, “Territory” shall mean
the United States of America.




15









 






	 	(ii)	 	Divert or take away any customer or client of the Company, or any of its
subsidiaries, or solicit, service, or promote a competing service that competes with
the Business to any customer, client or employee of the Company, its subsidiaries or
any of its respective businesses.
	 
	 	(iii)	 	Solicit or hire any employee of the Company, or any of its subsidiaries.





     8.4 Cooperation With Regard to Litigation. Executive agrees to cooperate with the Company,
during the Term and thereafter (including following Executive’s termination of employment for any
reason), by making himself available to testify on behalf of the Company or any subsidiary or
affiliate of the Company, in any action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, and to assist the Company, or any subsidiary or affiliate of the
Company, in any such action, suit, or proceeding, by providing information and meeting and
consulting with the Board or its representatives or counsel, or representatives or counsel to the
Company, or any subsidiary or affiliate of the Company, as may be reasonably requested and after
taking into account Executive’s post-termination responsibilities and obligations. The Company
agrees to reimburse Executive, on an after-tax basis, for all reasonable expenses actually incurred
in connection with his provision of testimony or assistance and if such cooperation is provided
more than one (1) year after Executive’s termination of employment, which period shall be extended
to two (2) years in the event Executive has been paid severance pursuant to Section 5.2(ii) equal
to two (2) times Executive’s Base Salary and average Annual Cash Incentive, Executive shall be paid
a reasonable per diem fee.



     8.5 Non-Disparagement. Executive shall not, at any time during the Term and thereafter
make statements or representations, or otherwise communicate, directly or indirectly, in writing,
orally, or otherwise, or take any action which may, directly or indirectly, disparage or be
damaging to the Company, its subsidiaries or affiliates or their respective officers, directors,
employees, advisors, businesses or reputations, nor shall members of the Board of Directors or
Executive’s successor in office, or other executive officers of the Company, make any such
statements or representations regarding Executive. Notwithstanding the foregoing, nothing in this
Agreement shall preclude Executive or his successor or members of the Board of Directors or other
executive officers of the Company from making truthful statements that are required by applicable
law, regulation or legal process.



     8.6 Release of Employment Claims. Executive agrees, as a condition to receipt of any
termination payments and benefits provided for in Sections 4 and 5 herein (other than Compensation
Accrued at Termination) (the “Termination Benefits”), that he will execute a general release in
substantially the form attached hereto as Exhibit A.



16









 





     8.7 Forfeiture of Outstanding Options and Other Equity Awards. The provisions of
Sections 4 and 5 notwithstanding, if Executive fails to comply with the restrictive covenants under
Section 8.1 — 8.3, all options to purchase Common Stock and other equity awards granted by the
Company at and after the Effective Date and then held by Executive or a transferee of Executive
shall be immediately forfeited and thereupon such options and equity awards shall be cancelled.
Notwithstanding the foregoing, Executive shall not forfeit any option or equity award unless and
until there shall have been delivered to him, within six months after the Board (i) had knowledge
of conduct or an event allegedly constituting grounds for such forfeiture and (ii) had reason to
believe that such conduct or event could be grounds for such forfeiture, a copy of a resolution
duly adopted by a majority affirmative vote of the membership of the Board (excluding Executive) at
a meeting of the Board called and held for such purpose (after giving Executive reasonable notice
specifying the nature of the grounds for such forfeiture and not less than 30 days to correct the
acts or omissions complained of, if correctable, and affording Executive the opportunity, together
with his counsel, to be heard before the Board) finding that, in the good faith opinion of the
Board, Executive has engaged in conduct set forth in this Section 8.7 which constitutes grounds for
forfeiture of Executive’s options and equity awards; provided, however, that if any option is
exercised or equity award is settled after delivery of such notice and the Board subsequently makes
the determination described in this sentence, Executive shall be required to pay to the Company an
amount equal to the difference between the aggregate value of the shares acquired upon such
exercise of the option at the date of the Board determination and the aggregate exercise price paid
by Executive and an amount equal to the fair market value of the shares delivered in settlement of
the equity award at the date of such determination (net of any cash payment for the shares by
Executive). Any such forfeiture shall apply to such options notwithstanding any term or provision
of any option agreement. In addition, options and equity awards granted to Executive on or after
the Effective Date, and gains resulting from the exercise of such options and settlement of such
equity awards, shall be subject to forfeiture in accordance with the Company’s standard policies
relating to such forfeitures and clawbacks, as such policies are in effect at the time of grant of
such options or equity awards.



     8.8 Survival. The provisions of this Section 8 shall survive the termination of the Term
and any termination or expiration of this Agreement.



     8.9 Remedies. Executive agrees that any breach of the terms of this Section 8 would
result in irreparable injury and damage to the Company for which the Company would have no adequate
remedy at law; Executive therefore also agrees that in the event of said breach or any threat of
breach and notwithstanding Section 9 the Company shall be entitled to an immediate injunction and
restraining order from a court of competent jurisdiction to prevent such breach and/or threatened
breach and/or continued breach by Executive and/or any and all persons and/or entities acting for
and/or with Executive, without having to prove damages. The availability of injunctive relief shall
be in addition to any other remedies to which the Company may be entitled at law or in equity, but
remedies other than injunctive relief may only be pursued in an



17









 







arbitration brought in accordance with Section 8. The terms of this paragraph shall not
prevent the Company from pursuing in an arbitration any other available remedies for any breach or
threatened breach of this Section 8, including but not limited to the recovery of damages from
Executive. Executive hereby further agrees that, if it is ever determined, in an arbitration
brought in accordance with Section 9, that willful actions by Executive have constituted wrongdoing
that contributed to any material misstatement or omission from any report or statement filed by the
Company with the U.S. Securities and Exchange Commission or material fraud against the Company,
then the Company, or its successor, as appropriate, may recover all of any award or payment made to
Executive, less the amount of any net tax owed by Executive with respect to such award or payment
over the tax benefit to Executive from the repayment or return of the award or payment, pursuant to
Sections 5.3 or 5.4, and Executive agrees to repay and return such awards and amounts to the
Company within 30 calendar days of receiving notice from the Company that the Board has made the
determination referenced above and accordingly the Company is demanding repayment pursuant to this
Section 8.9. The Company or its successor may, in its sole discretion, affect any such recovery by
(i) obtaining repayment directly from Executive; (ii) setting off the amount owed to it against any
amount or award that would otherwise be payable by the Company to Executive; or (iii) any
combination of (i) and (ii) above.



     9. Governing Law; Disputes; Arbitration.



     9.1 Governing Law. This Agreement is governed by and is to be construed, administered, and
enforced in accordance with the laws of the Florida, without regard to conflicts of law principles.
If under the governing law, any portion of this Agreement is at any time deemed to be in conflict
with any applicable statute, rule, regulation, ordinance, or other principle of law, such portion
shall be deemed to be modified or altered to the extent necessary to conform thereto or, if that is
not possible, to be omitted from this Agreement. The invalidity of any such portion shall not
affect the force, effect, and validity of the remaining portion hereof. If any court determines
that any provision of Section 9 is unenforceable because of the duration or geographic scope of
such provision, it is the parties’ intent that such court shall have the power to modify the
duration or geographic scope of such provision, as the case may be, to the extent necessary to
render the provision enforceable and, in its modified form, such provision shall be enforced.



     9.2 Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Broward County, Florida by three
arbitrators in accordance with the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association in effect at the time of submission to arbitration. Judgment may
be entered on the arbitrators’ award in any court having jurisdiction. For purposes of entering
any judgment upon an award rendered by the arbitrators, the Company and Executive hereby consent to
the jurisdiction of any or all of the following courts: (i) the United States District Court for
the Southern District of Florida, (ii) any of the courts of the State of Florida, or (iii) any
other court having jurisdiction. The Company and Executive further agree



18









 







that any service of process or notice requirements in any such proceeding shall be satisfied if the
rules of such court relating thereto have been substantially satisfied. The Company and Executive
hereby waive, to the fullest extent permitted by applicable law, any objection which it may now or
hereafter have to such jurisdiction and any defense of inconvenient forum. The Company and
Executive hereby agree that a judgment upon an award rendered by the arbitrators may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by law. Each party
shall bear its or his costs and expenses arising in connection with any arbitration proceeding
pursuant to this Section 9. Notwithstanding any provision in this Section 9, Executive shall be
paid compensation due and owing under this Agreement during the pendency of any dispute or
controversy arising under or in connection with this Agreement.



     9.3 Interest on Unpaid Amounts. Any amount which has become payable pursuant to the terms
of this Agreement or any decision by arbitrators or judgment by a court of law pursuant to this
Section 9 but which has not been timely paid shall bear interest at the prime rate in effect at the
time such amount first becomes payable, as quoted by the Company’s principal bank.



     9.4 LIMITATION ON LIABILITIES. IF EITHER EXECUTIVE OR THE COMPANY IS AWARDED ANY DAMAGES
AS COMPENSATION FOR ANY BREACH OR ACTION RELATED TO THIS AGREEMENT, A BREACH OF ANY COVENANT
CONTAINED IN THIS AGREEMENT (WHETHER EXPRESS OR IMPLIED BY EITHER LAW OR FACT), OR ANY OTHER CAUSE
OF ACTION BASED IN WHOLE OR IN PART ON ANY BREACH OF ANY PROVISION OF THIS AGREEMENT, SUCH DAMAGES
SHALL BE LIMITED TO CONTRACTUAL DAMAGES PLUS INTEREST ON ANY DELAYED PAYMENT AT THE MAXIMUM RATE
PER ANNUM ALLOWABLE BY APPLICABLE LAW FROM AND AFTER THE DATE(S) THAT SUCH PAYMENTS WERE DUE AND
SHALL EXCLUDE CONSEQUENTIAL DAMAGES AND PUNITIVE DAMAGES EVEN IF THE RULES REFERRED TO IN SECTION
9.2 WOULD PROVIDE OTHERWISE.



     9.5 WAIVER OF JURY TRIAL. TO THE EXTENT APPLICABLE, EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL FOR ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER
OF THIS AGREEMENT. This provision is subject to Section 9.2, requiring arbitration of disputes
hereunder.



     10. Miscellaneous.



     10.1 Integration. This Agreement cancels and supersedes any and all prior agreements and
understandings between the parties hereto with respect to the employment of Executive by the
Company, any parent or predecessor company, and the Company’s subsidiaries during the Term, but
excluding existing contracts relating to compensation under executive compensation



19









 







and employee benefit plans of the Company and its subsidiaries. This Agreement constitutes the
entire agreement among the parties with respect to the matters herein provided, and no modification
or waiver of any provision hereof shall be effective unless in writing and signed by the parties
hereto. Executive shall not be entitled to any payment or benefit under this Agreement which
duplicates a payment or benefit received or receivable by Executive under such prior agreements and
understandings or under any benefit or compensation plan of the Company.



     10.2 Successors; Transferability. The Company shall require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise, and whether or not the corporate
existence of the Company continues) 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.
As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise and, in the case of an acquisition of the Company in
which the corporate existence of the Company continues, the ultimate parent company following such
acquisition. Subject to the foregoing, the Company may transfer and assign this Agreement and the
Company’s rights and obligations hereunder to another entity that is substantially comparable to
the Company in its financial strength and ability to perform the Company’s obligations under this
Agreement. Neither this Agreement nor the rights or obligations hereunder of the parties hereto
shall be transferable or assignable by Executive, except in accordance with the laws of descent and
distribution or as specified in Section 10.3.



     10.3 Beneficiaries. Executive shall be entitled to designate (and change, to the extent
permitted under applicable law) a beneficiary or beneficiaries to receive any compensation or
benefits provided hereunder following Executive’s death.



     10.4 Notices. Whenever under this Agreement it becomes necessary to give notice, such
notice shall be in writing, signed by the party or parties giving or making the same, and shall be
served on the person or persons for whom it is intended or who should be advised or notified, by
Federal Express or other similar overnight service or by certified or registered mail, return
receipt requested, postage prepaid and addressed to such party at the address set forth below or at
such other address as may be designated by such party by like notice:

If to the Company:


MAKO Surgical Corp.

Attn: Chief Financial Officer

2901 Simms Street

Hollywood, Florida 33020]




20









 








With a copy to:



William L. Neff, Esquire

Hogan & Hartson LLP

555 13th Street NW

Washington, D.C. 20004




If to Executive:



Maurice R. Ferré

521 S. Mashta Dr.

Key Biscayne, FL 33149



If the parties by mutual agreement supply each other with fax numbers for the purposes of providing
notice by facsimile, such notice shall also be proper notice under this Agreement. In the case of
Federal Express or other similar overnight service, such notice or advice shall be effective when
sent, and, in the cases of certified or registered mail, shall be effective two days after deposit
into the mails by delivery to the U.S. Post Office.




     10.5 Reformation. The invalidity of any portion of this Agreement shall not be deemed to
render the remainder of this Agreement invalid.



     10.6 Headings. The headings of this Agreement are for convenience of reference only and do
not constitute a part hereof.



     10.7 No General Waivers. The failure of any party at any time to require performance by
any other party of any provision hereof or to resort to any remedy provided herein or at law or in
equity shall in no way affect the right of such party to require such performance or to resort to
such remedy at any time thereafter, nor shall the waiver by any party of a breach of any of the
provisions hereof be deemed to be a waiver of any subsequent breach of such provisions. No such
waiver shall be effective unless in writing and signed by the party against whom such waiver is
sought to be enforced.



     10.8 No Obligation To Mitigate. Executive shall not be required to seek other employment
or otherwise to mitigate Executive’s damages upon any termination of employment; provided, however,
that, to the extent Executive receives from a subsequent employer health or other insurance
benefits that are substantially similar to the benefits referred to in Section 3.3 hereof, any such
benefits to be provided by the Company to Executive following the Term shall be correspondingly
reduced.



21









 





     10.9 Offsets; Withholding. The amounts required to be paid by the Company to Executive
pursuant to this Agreement shall not be subject to offset other than with respect to any amounts
that are owed to the Company by Executive due to his receipt of funds as a result of his fraudulent
activity. The foregoing and other provisions of this Agreement notwithstanding, all payments to be
made to Executive under this Agreement, including under Sections 4 and 5, or otherwise by the
Company, will be subject to withholding to satisfy required withholding taxes and other required
deductions.



     10.10 Successors and Assigns. This Agreement shall be binding upon and shall inure to the
benefit of Executive, his heirs, executors, administrators and beneficiaries, and shall be binding
upon and inure to the benefit of the Company and its successors and assigns.



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



     10.12 Due Authority and Execution. The execution, delivery and performance of this
Agreement have been duly authorized by the Company and this Agreement represents the valid, legal
and binding obligation of the Company, enforceable against the Company according to its terms.



     10.13 Representations of Executive. Executive represents and warrants to the Company that
he has the legal right to enter into this Agreement and to perform all of the obligations on his
part to be performed hereunder in accordance with its terms and that he is not a party to any
agreement or understanding, written or oral, which prevents him from entering into this Agreement
or performing all of his obligations hereunder. In the event of a breach of such representation or
warranty on Executive’s part or if there is any other legal impediment which prevents him from
entering into this Agreement or performing all of his obligations hereunder, the Company shall have
the right to terminate this Agreement forthwith in accordance with the same notice and hearing
procedures specified above in respect of a termination by the Company for Cause pursuant to Section
5.1 and shall have no further obligations to Executive hereunder. Notwithstanding a termination by
the Company under this Section 10.13, Executive’s obligations under Section 9 shall survive such
termination.



     11. D&O Insurance and Indemnification.



     The Company will maintain directors’ and officers’ liability insurance during the Term and for
a period of six years thereafter, covering acts and omissions of Executive during the Term, on
terms substantially no less favorable than those in effect on the Effective Date. To the fullest
extent permitted under applicable law, the Company shall indemnify, defend and hold the Executive
harmless from and against any and all causes of action, claims, demands, liabilities,



22









 







damages, costs and expenses of any nature whatsoever (collectively, “Damages”) directly or
indirectly arising out of or relating to the Executive discharging the Executive’s duties hereunder
on behalf of the Company and/or its respective subsidiaries and affiliates, so long as the
Executive acted in good faith within the course and scope of the Executive’s duties with respect to
the matter giving rise to the claim or Damages for which the Executive seeks indemnification. The
Company also shall advance expenses for which indemnification may be ultimately claimed as such
expenses are incurred to the fullest extent permitted under applicable law, subject to any
requirement that Executive provide an undertaking to repay such advances if it is ultimately
determined that Executive is not entitled to indemnification; provided, however, that any
determination required to be made with respect to whether Executive’s conduct complies with the
standards required to be met as a condition of indemnification or advancement of expenses under
applicable law and the Company’s governing documents or other agreement shall be made by
independent counsel mutually acceptable to Executive and the Company (except to the extent
otherwise required by law). This Section 11 shall survive the termination of the Term and any
termination of the Agreement until such time as no indemnifiable liability can be lawfully asserted
against Executive.



     12. Certain Definitions. For purposes of this Agreement:



          (a) an “affiliate” of any person means another person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control with, such first
person, and includes subsidiaries.




          (b) A “business day” means the period from 9:00 am to 5:00 pm on any weekday that is not a
banking holiday in New York City, New York.




          (c) A “subsidiary” of any person means another person, an amount of the voting securities,
other voting ownership or voting partnership interests of which is sufficient to elect at least a
majority of its board of directors or other governing body (or, if there are no such voting
interests or no board of directors or other governing body, 50% or more of the equity interests of
which) is owned directly or indirectly by such first person.




     IN WITNESS WHEREOF, the parties hereto have signed their names as of the day and year first
above written.



	 	 	 	 	 
	 	MAKO SURGICAL CORP.

 	 
	 	By:  	/s/ Christopher C. Dewey 	 
	 	 	Name: 	Christopher C. Dewey 	 
	 	 	Title: 	Chairman, Compensation Committee 	 
	 



	 	 	 	 	 
	 	 	 
	 	                                                   /s/ Maurice R. Ferré 
 	 
	 	Maurice R. Ferré 	 
	 	 	 
	 




23









 








EXHIBIT A 1



For and in consideration of the payments and other benefits due to [NAME] (the “Executive”)
pursuant to the Employment Agreement dated as of ___, 2007 (the “Employment Agreement”), by
and between MAKO Surgical Corp., (the “Company”) and the Executive, and for other good and valuable
consideration, the Executive hereby agrees, for the Executive, the Executive’s spouse and child or
children (if any), the Executive’s heirs, beneficiaries, devisees, executors, administrators,
attorneys, personal representatives, successors and assigns, to forever release, discharge and
covenant not to sue the Company, or any of its divisions, affiliates, subsidiaries, parents,
branches, predecessors, successors, assigns, and, with respect to such entities, their officers,
directors, trustees, employees, agents, shareholders, administrators, general or limited partners,
representatives, attorneys, insurers and fiduciaries, past, present and future (the “Released
Parties”) from any and all claims of any kind arising out of, or related to, his employment with
the Company, its affiliates and subsidiaries (collectively, with the Company, the “Affiliated
Entities”) or the Executive’s separation from employment with the Affiliated Entities, which the
Executive now has or may have against the Released Parties, whether known or unknown to the
Executive, by reason of facts which have occurred on or prior to the date that the Executive has
signed this Release. Such released claims include, without limitation, any and all claims relating
to the foregoing under federal, state or local laws pertaining to employment, including, without
limitation, the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. Section 2000e et. seq., the Fair Labor Standards Act, as amended, 29 U.S.C.
Section 201 et. seq., the Americans with Disabilities Act, as amended, 42 U.S.C. Section 12101 et.
seq. the Reconstruction Era Civil Rights Act, as amended, 42 U.S.C. Section 1981 et. seq., the
Rehabilitation Act of 1973, as amended, 29 U.S.C. Section 701 et. seq., the Family and Medical
Leave Act of 1992, 29 U.S.C. Section 2601 et. seq., and any and all state or local laws regarding
employment discrimination and/or federal, state or local laws of any type or description regarding
employment, including but not limited to any claims arising from or derivative of the Executive’s
employment with the Affiliated Entities, as well as any and all such claims under state contract or
tort law.



The Executive has read this Release carefully, acknowledges that the Executive has been given at
least 21 days to consider all of its terms and has been advised to consult with any attorney and
any other advisors of the Executive’s choice prior to executing this Release, and the Executive
fully understands that by signing below the Executive is voluntarily giving up any right which the
Executive may have to sue or bring any other claims against the Released Parties, including any
rights and claims under the Age Discrimination in Employment Act. The Executive also






 




			
	1	 	This release may be amended by the Company to
reflect new laws and changes in applicable laws.














 









understands that the Executive has a period of seven days after signing this Release within which
to revoke his agreement, and that neither the Company nor any other person is obligated to make any
payments or provide any other benefits to the Executive pursuant to the Agreement until eight days
have passed since the Executive’s signing of this Release without the Executive’s signature having
been revoked other than any accrued obligations or other benefits payable pursuant to the terms of
the Company’s normal payroll practices or employee benefit plans. Finally, the Executive has not
been forced or pressured in any manner whatsoever to sign this Release, and the Executive agrees to
all of its terms voluntarily.



Notwithstanding anything else herein to the contrary, this Release shall not affect: (i) the
Company’s obligations under any compensation or employee benefit plan, program or arrangement
(including, without limitation, obligations to the Executive under the Employment Agreement, any
stock option, stock award or agreements or obligations under any pension, deferred compensation or
retention plan) provided by the Affiliated Entities where the Executive’s compensation or benefits
are intended to continue or the Executive is to be provided with compensation or benefits, in
accordance with the express written terms of such plan, program or arrangement, beyond the date of
the Executive’s termination; (ii) rights to indemnification the Executive may have under the
Employment Agreement or a separate agreement entered into with the Company; or (iii) rights
Executive may have as a shareholder, unit holder or prior member of the operating partnership.



This Release is final and binding and may not be changed or modified except in a writing signed by
both parties. Section 9 of the Employment Agreement shall apply to this Release.




	 	 	 
	 

	 	 
	Date

	 	Maurice R. Ferré
	 
	 	 
	 

	 	 
	Date

	 	MAKO Surgical Corp.







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