EXHIBIT
10.16


 


June 18, 2008


 


Mr. James G. Thomasch


One Rosebud Lane


Westford, MA 
01886


 


Dear Jim:


 


You and PLC Medical Systems (“PLCM”) are
parties to a letter agreement dated November 4, 1999 (the “Letter
Agreement”), which outlines the terms and conditions of your employment with
PLCM.  In light of recent tax legislation
under Section 409A of the Internal Revenue Code (“Section 409A”), you
and PLCM mutually desire to amend certain provisions of the Letter Agreement as
set forth below:


 


1.  Third
Paragraph of Paragraph No. 8.


 


The third paragraph of Paragraph No. 8
of the Letter Agreement shall be deleted in its entirety and replaced with the
following:


 


“For purposes of this Paragraph No. 8, “good
reason” means:  (i) a material
diminution in your duties, authority or responsibilities; (ii) a material
reduction in your base compensation; or (iii) your relocation more than 30
miles from Franklin, Massachusetts; provided that you must give notice to PLCM
of the existence of the condition giving rise to the Good Reason within 90 days
of the initial existence of such condition and PLCM has 30 days in which to
cure the condition; and provided further that your termination as a result of
the Good Reason condition must occur within two years of the initial existence
of the condition giving rise to the Good Reason.”


 


2.  Paragraph
No. 9.


 


A new Paragraph No. 9 is added to the
Letter Agreement:


 


9)                                      (a) Subject
to this Paragraph No. 9, severance payments payable to you under the
Letter Agreement shall begin only upon the date of your “separation from
service” (determined as set forth below) which occurs on or after the
termination of your service with PLCM. 
The following rules shall apply with respect to distribution of the
severance payments, if any, to be provided to you under the Letter Agreement,
as applicable:


 


(i)                                      It
is intended that each installment of the severance payments provided under the
Letter Agreement shall be treated as a separate “payment” for purposes of Section 409A.  Neither PLCM nor you shall have the right to
accelerate or defer the delivery of any such severance payments except to the
extent specifically permitted or required by Section 409A.


 


(ii)                                   If,
as of the date of your “separation from service” from PLCM, you are not a “specified
employee” (within the meaning of Section 409A), then each installment of
the severance payments shall be made on the dates and terms set forth in the
Letter Agreement.


 

















 


(iii)                                If,
as of the date of your “separation from service” from PLCM, you are a “specified
employee” (within the meaning of Section 409A), then:


 


(A)                                 Each
installment of the severance payments due under the Letter Agreement that, in
accordance with the dates and terms set forth herein, will in all
circumstances, regardless of when your separation from service occurs, be paid
within the Short-Term Deferral Period (as hereinafter defined) shall be treated
as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to
the maximum extent permissible under Section 409A.  For purposes of this Letter Agreement, the “Short-Term
Deferral Period” means the period ending on the later of the 15th day of the third month following the end of
your tax year in which the separation from service occurs and the 15th day of the third month following the end of
PLCM’s tax year in which the separation from service occurs; and


 


(B)                                   Each
installment of the severance payments due under the Letter Agreement that is
not described in Paragraph No. 9(a)(iii)(A) and that would, absent
this subparagraph, be paid within the six-month period following your “separation
from service” from PLCM shall not be paid until the date that is six months and
one day after such separation from service (or, if earlier, your death), with
any such installments that are required to be delayed being accumulated during
the six-month period and paid in a lump sum on the date that is six months and
one day following your separation from service and any subsequent installments,
if any, being paid in accordance with the dates and terms set forth herein;
provided, however, that the preceding provisions of this sentence shall not
apply to any installment of payments if and to the maximum extent that that
such installment is deemed to be paid under a separation pay plan that does not
provide for a deferral of compensation by reason of the application of Treasury
Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an
involuntary separation from service). 
Any installments that qualify for the exception under Treasury Regulation
Section 1.409A-1(b)(9)(iii) must be paid no later than the last day
of your second taxable year following your taxable year in which the separation
from service occurs.


 


(b).                              The
determination of whether and when your separation from service from PLCM has
occurred shall be made and in a manner consistent with, and based on the
presumptions set forth in, Treasury Regulation Section 1.409A-1(h).  Solely for purposes of this Paragraph No. 9(b),
“PLCM” shall include all persons with whom PLCM would be considered a single
employer under Section 414(b) and 414(c) of the Code.


 


(c).                               All
reimbursements and in-kind benefits provided under the Letter Agreement shall
be made or provided in accordance with the requirements of Section 409A to
the extent that such reimbursements or in-kind benefits are subject to Section 409A.


 


(d).                              PLCM
makes no representation or warranty and shall have no liability to you or to
any other person if any of the provisions of the Letter Agreement (including
this amendment) are


 

















 


determined to constitute deferred compensation subject to Section 409A
but that do not satisfy an exemption from, or the conditions of, that section.


 


Except as specifically provided herein, all
other terms of the Letter Agreement shall remain in full force and effect.  If the terms of this amendment are acceptable
to you, please sign and return the copy of this amendment enclosed for that
purpose no later than June 24, 2008.


 


Sincerely,


 


PLC Medical Systems, Inc.


 


	
  By:

  	
  /S/ MARK R. TAUSCHER

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  CEO

  	
   

  



 


 


The foregoing correctly sets forth the terms of my continued employment
with PLCM.  I am not relying on any
representations other than as set out in the Letter Agreement and the amendment
thereto set forth above.  I have been
given a reasonable amount of time to consider this amendment and to consult an
attorney and/or advisor of my choosing. 
I have carefully read this amendment, understand the contents herein,
freely and voluntarily assent to all of the terms and conditions hereof, and
sign my name of my own free act.


 


 


	
  /S/ JAMES G. THOMASCH

  	
   

  
	
  James G. Thomasch

  	
  Date: June 24, 2008

  



 


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