Exhibit 10.2


 


AMENDED AND RESTATED
EMPLOYMENT AGREEMENT


 


THIS AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into by and
between Merit Medical Systems, Inc., a Utah corporation (the “Company”) and
Kent W. Stanger (the “Executive”), as of the 31st day of December,
2008.


 


RECITALS:


 


WHEREAS, the
Executive currently serves as an executive employee of the Company and may have
had a previous Employment Agreement (the “Prior Agreement”); and


 


WHEREAS, the
Board of Directors of the Company (the “Board”) has determined that it is in
the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding
the possibility, threat or occurrence of a Change in Control (as defined below)
of the Company; and


 


WHEREAS, the
Company and the Executive desire to amend and restate the Executive’s
Employment Agreement to read as follows:


 


A G R E E M E N T :


 


NOW, THEREFORE, any Prior Agreement is hereby amended and restated to
read in its entirety as follows:


 


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


 


(a)                                  “Affiliated Companies” shall mean any
corporation, partnership, limited liability company or other business entity
controlled by, controlling or under common control with the Company.  One entity shall be presumed to control
another if it owns directly, or indirectly through other Affiliated Companies,
a majority of the outstanding voting equity interests of the other entity.


 


(b)                                 “Change in Control” shall mean:


 


(i)                                     The acquisition in one or more integrated
transactions by any individual, entity or group (within the meaning of Section 13(d) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) (a “Person”) of beneficial ownership (within the meaning of Rule 13d—3
promulgated under the Exchange Act) of 20% or more of either:


 


(A)          the then outstanding
shares of common stock of the Company (the “Outstanding Company Common Stock”);
or


 


(B)           the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”);


 


provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change in Control


 


(C)           any acquisition by
the Company;


 


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(D)          any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company; or


 


(E)           any acquisition by
any corporation or other entity pursuant to a transaction which complies with
clauses (A), (B) and (C) of subsection (iii) of this Section 1(a);
or


 


(ii)                                Individuals who, as of the date hereof,
constitute the Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company’s shareholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board; or


 


(iii)                             Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company (a “Business Combination”), in each case, unless,
following such Business Combination,


 


(A)          all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be;


 


(B)           no Person (excluding
any corporation resulting from such Business Combination or any employee
benefit plan (or related trust) of the Company or such corporation resulting
from such Business Combination) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination; and


 


(C)           at least a majority
of the members of the Board of Directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board providing for
such Business Combination; or


 


(iv)                              Approval by the shareholders of the Company
of a complete liquidation or dissolution of the Company.


 


(c)                                  “Code” means the Internal Revenue Code
of 1986, as amended.


 


(d)                                 “Company” shall mean Merit Medical
Systems, Inc.


 


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(e)                                  “Employment Period” shall mean the
period commencing on the date hereof and continuing through the effective date
of termination of Executive’s employment as provided below.


 


(f)                                    “Executive” shall mean Kent W.
Stanger.


 


(g)                                 “Separation from Service” means a “separation
from service” (as defined in Treasury Regulation Section 1.409A-1(h) or
any successor provision thereto) from the Company.


 


(h)                                 “Specified Employee” means a “specified
employee” within the meaning of Code Section 409A(2)(B).  The Executive will be a Specified Employee
if, as of the Executive’s date of Separation from Service, the Executive is a “key
employee” of the Company or any Affiliated Companies.  The Executive shall be treated as a “key
employee” for the entire 12-month period beginning on each April 1 (a “Specified
Employee Effective Date”) if the Executive meets the requirements of Code Section 416(i)(1)(A)(i),
(ii), or (iii) (applied in accordance with applicable regulations
thereunder and without regard to Code Section 416(i)(5)) at any time
during the 12-month period ending on the December 31 immediately preceding
that Specified Employee Effective Date. 
In the event of corporate transactions described in Treasury Regulation Section 1.409A-1(i)6),
the identification of Specified Employees shall be determined in accordance
with the default rules described therein, unless the Employer elects to
utilize the available alternative methodology through designations made within
the timeframes specified therein.


 


2.                                                                                       Employment.  Subject to termination as
provided below, the Company hereby agrees to continue the Executive in its
employ “at will”, and the Executive hereby agrees to remain in the employ of
the Company “at will”, subject to the terms and conditions of this
Agreement.  As an “at will” employee, the
Company may terminate the Executive’s employment, and the Executive may resign
his employment with the Company, at any time and for any or no reason.


 


3.                                                                                       Terms of Employment.


 


(a)                                  Position and Duties.


 


(i)            During the
Employment Period, the Executive’s duties and position shall be Chief Financial
Officer. Notwithstanding the foregoing, upon a Change in Control: (A) the
Executive’s position (including offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least commensurate in all
material respects with the most significant of those held, exercised and
assigned at any time during the 120–day period immediately preceding the
effective date of a Change in Control; and (B) the Executive’s services
shall be performed at the location where the Executive was employed immediately
preceding the Effective Date or any office or location less than 35 miles from
such location.


 


(ii)           During the
Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the business and affairs of
the Company and, to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder, to use the Executive’s reasonable best
efforts to perform faithfully and efficiently such responsibilities.  During the Employment Period it shall not be
a violation of this Agreement for the Executive to: (A) serve on
corporate, civic or charitable boards or committees, provided that the
Executive obtains the Company’s prior, written consent, which will not be
unreasonably withheld; (B) deliver lectures, fulfill speaking engagements
or teach at educational institutions; and (C) manage personal investments,
so long as such activities do not significantly interfere with the performance
of the Executive’s responsibilities as an employee of the Company in 


 


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accordance with this Agreement. 
It is expressly understood and agreed that to the extent that any such
activities have been conducted by the Executive prior to the effective date of
a Change in Control, the continued conduct of such activities (or the conduct
of activities similar in nature and scope thereto) subsequent to the effective
date shall not thereafter be deemed to interfere with the performance of the
Executive’s responsibilities to the Company.


 


(b)                                 Compensation.


 


(i)            Base Salary.  During the Employment Period the Executive
shall receive an annual base salary (“Annual Base Salary”), which shall
be paid in equal monthly installments, at least equal to $230,000 per year or
such other amount as is authorized by the Compensation Committee of the Board
of Directors of the Company; provided, however that following a Change in
Control, the Executive’s rate of Annual Base Salary for any fiscal year of the
Company following the Change in Control shall not be less than twelve times the
highest monthly base salary paid or payable (including any base salary which
has been earned but deferred) to the Executive by the Company and its
Affiliated Companies in respect of the twelve–month period immediately
preceding the month in which the Change in Control occurs.  During the Employment Period, the Annual Base
Salary shall be reviewed no more than 12 months after the last salary increase
or decrease applicable to the Executive and thereafter at least annually.  Any increase or decrease in Annual Base
Salary shall not serve to limit or reduce any other obligation to the Executive
under this Agreement.


 


(ii)           Annual Bonus.  In addition to Annual Base Salary, for each
fiscal year of the Company that ends during the Employment Period (a “Bonus
Award Year”) the Executive shall be awarded an annual bonus (the “Annual
Bonus”) in cash in such amount as the Company’s Board of Directors
determines in its sole discretion; provided that (A) no Annual Bonus shall
be payable for a particular Bonus Award Year unless the Executive is still
employed by the Company on the last day of the Bonus Award Year in question;
and (B) for any Company fiscal year ending on or after the effective date
of a Change in Control, the Annual Bonus shall be at least equal to the
Executive’s average annual cash bonus for the last three full 12-month fiscal
years ending prior to the Change in Control (annualized in the event that the
Executive was not employed by the Company for the whole of any such full 12-month
Company fiscal year) (the “Average Annual Bonus”).  Each such Annual Bonus shall be paid to the
Executive not later than the 15th day of the third month following the calendar
year in which the Annual Bonus is earned, unless the Executive shall elect to
defer the receipt of such Annual Bonus pursuant to a non-qualified deferred
compensation plan maintained by the Company that complies with the requirements
of Code Section 409A.  The Executive
shall not be entitled to any Annual Bonus for a Bonus Award Year unless the
Executive remains employed by the Company through the last day of the Bonus
Award Year in question.


 


(iii)          Stock Incentive
and Retirement Plans.  During the
Employment Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its Affiliated
Companies.  In no event shall such plans,
practices, policies and programs provide the Executive with incentive opportunities
(measured with respect to both regular and special incentive opportunities, to
the extent, if any, that such distinction is applicable), savings opportunities
and retirement benefit opportunities, in each case, materially less favorable,
in the aggregate following the effective date of a Change in Control, than the
those provided by the Company and its Affiliated Companies for the Executive
under such plans, practices, policies and programs as in effect at any time
during the 120—day period immediately preceding the Change in Control or if
more favorable to the Executive, those provided generally at any time after the
Change in Control to other peer executives of the Company and its Affiliated
Companies.


 


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(iv)          Welfare Benefit
Plans.  During the Employment Period,
the Executive shall be eligible for participation in and shall receive all
benefits under welfare benefit plans, practices, policies and programs provided
by the Company and its Affiliated Companies (including, without limitation,
medical, prescription, dental, disability, employee life, group life,
accidental death and travel accident insurance plans and programs for the
Executive, the Executive’s spouse and the Executive’s qualifying dependent
children ) to the extent applicable generally to other peer executives of the
Company and its Affiliated Companies, but in no event shall such plans,
practices, policies and programs provide the Executive with benefits following
a Change in Control which are materially less favorable, in the aggregate, than
the plans, practices, policies and programs in effect for the Executive at any
time during the 120–day period immediately preceding the Change in Control or,
if more favorable to the Executive, those provided generally at any time after
the Change in Control to other peer executives of the Company and its
Affiliated Companies.


 


(v)           Expenses.  During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable policies,
practices and procedures of the Company and its Affiliated Companies.  In no event shall such policies, practices
and procedures be materially less favorable, in the aggregate, following a
Change in Control than the policies, practices and procedures in effect for the
Executive at any time during the 120–day period immediately preceding the
Change in Control or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its Affiliated Companies.


 


(vi)          Fringe Benefits.  During the Employment Period, the Executive
shall be entitled to fringe benefits, including, without limitation, tax and
financial planning services, payment of club dues, and, if applicable, use of
an automobile and payment of related expenses, in accordance with the generally
applicable plans, practices and programs of the Company for its executive
employees.  In no event shall such
policies and programs be materially less favorable following a Change in
control than the most favorable plans, practices, programs and policies of the
Company and its Affiliated Companies in effect for the Executive at any time
during the 120–day period immediately preceding the Change in Control or, if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and its Affiliated
Companies.


 


(vii)         Office and
Support Staff.  During the Employment
Period, the Executive shall be entitled to an office or offices of a size and
with furnishings and other appointments, and to exclusive personal secretarial
and other assistance, generally provided to other executive officers of the Company
and its Affiliated Companies.


 


(viii)        Vacation.  During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the generally applicable
plans, practices and programs of the Company for its executive employees.  In no event shall such policies and programs
be materially less favorable following a Change in Control than the most
favorable plans, policies, programs and practices of the Company and its
Affiliated Companies as in effect for the Executive at any time during the 120–day
period immediately preceding the Change in Control or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its Affiliated Companies.


 


4.                                                                                       Termination of Employment.


 


(a)                                  Death or Disability.  The
Executive’s employment shall terminate automatically upon the Executive’s death
during the Employment Period.  If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the 


 


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Executive written notice in accordance with Section 10(b) of
this Agreement of its intention to terminate the Executive’s employment.  In such event, the Executive’s employment
with the Company shall terminate effective on the 30th day after receipt of
such notice by the Executive (the “Disability Effective Date”), provided that,
within the 30 days after such receipt, the Executive shall not have returned to
full–time performance of the Executive’s duties.  For purposes of this Agreement, “Disability”
shall mean the absence of the Executive from the Executive’s duties with the
Company on a full–time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness which is determined to be total
and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive’s legal representative.


 


(b)                                 By the Company for Cause.  The
Company may terminate the Executive’s employment at any time during the
Employment Period for Cause.  For
purposes of this Agreement, “Cause” shall mean:


 


(i)            the willful and
continued failure of the Executive to perform substantially all of the
Executive’s duties with the Company or one of its Affiliates (other than any
such failure results form incapacity due to physical mental illness), after a
written demand for substantial performance is delivered to the Executive by the
Board or the Chief Executive Officer of the Company which specifically
identifies the manner in which the Board or Chief Executive Officer believes
that the Executive has not substantially performed the Executive’s duties,


 


(ii)           the willful
engaging by the Executive in illegal conduct, intentional misconduct or gross
negligence which is materially and demonstrably injurious to the Company, or


 


(iii)          violation of
written Company policies prohibiting workplace discrimination, sexual
harassment and alcohol or substance abuse.


 


For purposes of this provision, no act or failure to act, on the part
of the Executive, shall be considered “willful” unless it is done, or omitted
to be done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Company.  Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or upon the
instructions of the Chief Executive Officer or a senior officer of the Company
or based upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith and
in the best interests of the Company. 
Following a Change in Control, the cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three–quarters of the entire membership of
the Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, the Executive is guilty of the
conduct described in subparagraph (i) or (ii) above, and specifying
the particulars thereof in detail.


 


(c)                                  By the Company without Cause. The Company, acting through its Board of
Directors, may terminate the Executive’s employment with the Company at any
time “at will” for any or no reason upon written notice of termination to the
Executive.


 


(d)                                 By the Executive for Good Reason.  The Executive may terminate and resign the
Executive’s employment for Good Reason effective on or after the date of a
Change in Control upon not less than ten (10) days advance written notice
of termination to the Company.  For
purposes of this Agreement, “Good Reason” shall mean:


 


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(i)            the Company’s
assignment  to the Executive upon or
within two (2) years after a Change in Control of any duties inconsistent
in any respect with the Executive’s position (including offices, titles and
reporting requirements), authority, duties or responsibilities as contemplated
by Section 4(a) of this Agreement, or any other action by the Company
upon or within two (2) years after a Change in Control which results in a
diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;


 


(ii)           the Company’s
failure upon or within two (2) years following a Change in Control to
comply with any of the provisions of Section 4(b) of this Agreement,
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;


 


(iii)          upon or within two (2) years
following a Change in Control, the Company’s requiring the Executive to be
based at any office or location other than as provided in Section 4(a)(i)(B) hereof
or the Company’s requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the Effective
Date; and


 


(iv)          any failure by the
Company to comply with and satisfy Section 9(c) of this Agreement.


 


Additionally, if the Executive resigns and terminates the Executive’s
employment with the Company on or within 30 days after the date of a Change in
Control for any other reason (as determined in the Executive’s sole
discretion), the Executive shall be deemed to have resigned and terminated the
Executive’s employment for Good Reason notwithstanding any other provision in
this Agreement.


 


(e)                                  By Executive without Good Reason.  The
Executive may resign and terminate the Executive’s employment with the Company
without Good Reason at any time “at will” upon written notice of termination to
the Company.


 


(f)                                    Notice of Termination.  Any
termination by the Company for Cause, by the Executive for Good Reason, or by
either party without Cause or Good Reason shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 10(b) of
this Agreement.  For purposes of this
Agreement, a “Notice of Termination” means a written notice which


 


(i)            indicates the
specific termination provision in this Agreement relied upon,


 


(ii)           to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive’s employment under the
provision so indicated, and


 


(iii)          if the Date of
Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall not be more than 30
days after the giving of such notice). 
The failure by the Executive or the Company to set forth in the Notice
of Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively,
from asserting such fact or circumstance in enforcing the Executive’s or the
Company’s rights hereunder.


 


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(e)                                  Date of Termination.  For
purposes of this Agreement the term “Date of Termination” means:


 


(i)            if the Executive’s
employment is terminated by the Company for Cause, or upon or following a
Change in Control by the Executive for Good Reason, the date of the receipt of
the Notice of Termination;


 


(ii)           if the Executive’s
employment is terminated by the Company other than for Cause, death or
Disability; the Date of Termination shall be the tenth (10th) day after the Company notifies the Executive of such termination,
provided that the Notice of Termination may specify a later effective Date of
Termination (which date shall not be more than 30 days after the giving of such
notice);


 


(iii)          if the Executive
voluntarily resigns his employment (other than for Good Reason upon or
following a Change in Control), the Date of Termination shall be the tenth (10th) day after the Executive notifies the Company of such resignation,
provided that the Notice of Termination may specify a later Date of Termination
(which date shall not be more than 30 days after the giving of such notice);
and


 


(iv)          if the Executive’s
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.


 


5.                                                                                       Obligations of the Company upon Termination
of Executive’s Employment.


 


(a)                                  General.  Upon termination of the
Executive’s employment with the Company the Company shall provide the Executive
with the payments and benefits set forth in the applicable subsection of this Section 5.  The amounts payable under this Section 5
are in addition to the Company’s obligations to the Executive under the Company’s
various retirement, deferred compensation, stock option and long-term
incentive, employee stock purchase and welfare benefit plans.  The Company’s obligations under this Section 5
vary depending upon whether or not the Executive’s termination of employment is
in “Connection with a Change in Control.”  
For purposes of this Agreement, termination of the Executive’s
employment shall be deemed to be in “Connection with a Change in Control”
if and only if:


 


(i)            the Executive’s
Date of Termination is on or within two (2) years after the effective date
of a Change in Control; or


 


(ii)           the Company
terminates the Executive’s employment without Cause within six (6) months
prior to the date on which a Change in Control occurs and the Executive
reasonably demonstrates that such termination of employment (A) was at the
request of a third party who has taken steps reasonably calculated to effect a
Change in Control; or (B) otherwise arose in connection with or
anticipation of a Change in Control.


 


(b)                                 Termination Other Than in Connection with a
Change in Control.  If the Executive’s employment shall terminate
for any reason, voluntarily or involuntarily with or without Cause, other than
in Connection with a Change in Control, the Company shall pay to the Executive
(or if deceased to the Executive’s estate) the following amounts:


 


(i)            a lump sum cash
payment equal to the Executive’s Annual Base Salary earned through the Date of
Termination to the extent  not
theretofore paid and any accrued vacation pay through the Date of Termination,
which lump sum shall be paid ten (10) days after the Date of Termination;


 


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(ii)                                a lump sum cash payment equal to the
Executive’s accrued Annual Bonus earned for the last Company fiscal year ending
immediately prior to the Date of Termination to the extent not theretofore
paid, which lump sum shall be paid within the time period set forth in Section 3(b)(ii);
and


 


(iii)                             such additional
severance benefits, if any, as the Board of Directors approves in its sole and
absolute discretion without reference to the amount of severance benefits, if
any, paid to any other executive officer or employee of the Company; provided,
however, that no such discretionary severance benefits shall be paid in a
manner or amount that renders such payments non-qualified deferred compensation
subject to additional tax or interest under Section 409A(a)(1)(B) of
the Code.


 


(c)                                  Resignation for
Good Reason or Termination without Cause in Connection with a Change in Control.  If the Executive resigns for Good Reason in
Connection with a Change in Control (i.e., on or within two (2) years
after the date of a Change in Control) or the Company terminates the Executive
without Cause in Connection with a Change in Control, the Company shall:


 


(i)                                   Pay to the
Executive the following amounts:


 


(A)          a lump sum cash
payment equal to the Executive’s Annual Base Salary through the Date of
Termination to the extent not theretofore paid and any accrued vacation pay
through the Date of Termination, which lump sum shall be paid ten (10) days
after the Date of Termination (on a date within that 10 day period designated
by the Company); and


 


(B)           a lump sum cash
payment equal to the Executive’s accrued Annual Bonus, if any, for the last
Company fiscal year ending immediately prior to the Date of Termination to the
extent not theretofore paid, which lump sum shall be paid within the time
period set forth in Section 3(b)(ii). 
The sum of the amounts described in clauses (A) and (B) shall
be hereinafter referred to as the “Accrued Obligations;” and


 


(ii)                                Pay to the
Executive a cash severance benefit (the “Severance Benefit”) in an
amount equal to two (2) times the sum of: (A) the Executive’s Annual
Base Salary (computed at the highest rate in effect at any time during the
12-month period immediately preceding the Change in Control); and (B) the
Executive’s Average Annual Bonus as defined in Section 3(b)(ii).  The Severance
Benefit payable under this Section 5(c)(ii) shall be paid:


 


(A) in a lump sum within 30 days after the date of the Executive’s
Separation from Service with the Company to the limited extent the amount so
paid (x) constitutes “separation pay” due to an “involuntary separation
from service” within the meaning and dollar limitations of Treasury Regulation Section 1.409A-1(b)(9)(iii),
or any successor regulation, and (y) as a result is excluded from the
definition of nonqualified deferred compensation subject to Code Section 409A;
and


 


(B) the balance of the Severance Benefit, in a lump sum, on the
second day of the sixth (6th) calendar month after the month of the Executive’s Separation from
Service with the Company.  The balance of
the Severance Benefit payable to Executive under this clause (B) shall
bear interest from the Date of Termination at an annual rate equal to the “prime
rate” of Zions Bank, NA in effect on the Date of Termination plus four (4) percentage
points, which interest the Company shall pay to the Executive contemporaneously
with payment of the Severance Benefit.


 


Section 5(c)(ii)(A) shall be interpreted and applied to
permit the payment of Severance Benefits prior to the second day of the sixth
(6th) month after
the Executive’s Separation from Service 


 


9

















 


with the Company only to the extent such payments would not thereby
constitute a deferral of compensation subject to Code Section 409A.


 


(iii)          To the extent
permitted by law and the Company’s applicable insurance policies, for two (2) years
after the Executive’s Date of Termination, continue benefits to the Executive
and/or the Executive’s eligible spouse and dependent children at least equal to
those which would have been provided to them in accordance with the welfare
plans, programs, practices and policies described in Section 3 of this
Agreement if the Executive’s employment had not been terminated or, if more
favorable to the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its Affiliated Companies
and their families, provided, however, that if the Executive becomes reemployed
with another employer and is eligible to receive medical and other welfare
benefits described herein shall be secondary to those provided under such other
plan during such applicable period of eligibility.


 


(iv)          Provide at the
Company’s sole expense the Executive with outplacement services the scope and
provider of which shall be selected by the Executive in his sole discretion;
and


 


(v)           To the extent not
theretofore paid or provided, the Company shall timely pay or provide to the
Executive any other amounts or benefits required to be paid or provided or
which the Executive is eligible to receive under any plan, program, policy or
practice or contract or agreement of the Company and its Affiliated Companies
(such other amounts and benefits shall be hereinafter referred to as the “Other
Benefits”) in accordance with the terms of such other plans, programs,
policies or practices.


 


(d)                                 Death on or
after Change in Control.  If
the Executive’s employment is terminated by reason of the Executive’s death on
or after the date of a Change in Control, this Agreement shall terminate without
further obligations to the Executive’s legal representatives under this
Agreement, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits.  Accrued
Obligations shall be paid to the Executive’s estate or beneficiary, as
applicable, in cash in the manner and within the time frames set forth in Section 5(b)(i) and
(ii), as applicable.  With respect to the
provision of Other Benefits, the term Other Benefits as utilized in this Section 5(d) shall
include, without limitation, and the Executive’s estate and/or beneficiaries
shall be entitled to receive, benefits at least equal to the most favorable
benefits provided by the Company and Affiliated Companies to the estates and
beneficiaries of peer executives of the Company and such Affiliated Companies
under such plans, programs, practices and policies relating to death benefits,
if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120–day period immediately preceding the
Effective Date of a Change in Control, or, if more favorable to the Executive’s
estate and/or the Executive’s beneficiaries, as in effect on the date of the
Executive’s death with respect to other peer executives of the Company and its
Affiliated Companies and their beneficiaries.


 


(e)                                  Disability on
or after Change in Control.  If the Executive’s employment is terminated
by reason of the Executive’s Disability on or after the date of a Change in
Control, this Agreement shall terminate without further obligations to the
Executive, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits.  Accrued
Obligations shall be paid to the Executive in cash in the manner and within the
time frames set forth in Section 5(b)(i) and (ii), as applicable.
With respect to the provision of Other Benefits, the term Other Benefits as
utilized in this Section 5(e) shall include, and the Executive shall
be entitled after the Disability Effective Date to receive, disability and other
benefits at least equal to the most favorable of those generally provided by
the Company and its Affiliated Companies to disabled executives and/or their
families in accordance with such plans, programs, practices and policies
relating to disability, if any, as in effect generally with respect to other
peer 


 


10

















 


executives and their families at any time during the 120–day period
immediately preceding the Effective Date of a Change in Control, or, if more favorable
to the Executive and/or the Executive’s family, as in effect at any time
thereafter generally with respect to other peer executives of the Company and
its Affiliated Companies and their families.


 


(f)                                    Termination for
Cause or Resignation Other than for Good Reason on or after a Change in Control.  If the Company terminates the Executive’s for
Cause on or after the date of a Change in Control, this Agreement shall
terminate without further obligations to the Executive hereunder other than the
obligation to pay to the Executive (i) his Annual Base Salary and accrued
vacation through the Date of Termination, and (ii) Other Benefits, in each
case to the extent theretofore unpaid. 
If the Executive voluntarily terminates employment upon or following a Change
in Control (excluding a resignation for Good Reason in Connection with a Change
in Control) this Agreement shall terminate without further obligations to the
Executive under, other than for Accrued Obligations and timely payment or
provision of Other Benefits.  In such
case, all Accrued Obligations shall be paid to the Executive in cash in the
manner and within the time frames set forth in Section 5(b)(i) and
(ii), as applicable.


 


(g)                                 Golden
Parachute Payments.  Any
provision of this Agreement to the contrary notwithstanding, if any amount
otherwise payable to the Executive under this Agreement would, when added to
all other “parachute payments” to the Executive within the meaning of Section 280G
of the Code, as amended (the “Code”), result in the payment of an “excess
parachute payment” to the Executive within the meaning of Section 280G and
4999 of the Code, then:


 


(i)            the cash payments
otherwise owed to the Executive hereunder shall be reduced by the minimum
amount necessary to avoid imposition of an excise or penalty tax on the
Executive under Code Section 4999 (or any successor provision thereto)
provided the amount of such reduction in payments does not exceed one thousand
dollars ($1,000.00); or


 


(ii)           in all other cases,
the Company shall pay to the Executive an additional amount (on a
fully-grossed-up, after-tax basis) sufficient to place the Executive in the
same after-tax position that the Executive would have been in had the payments
under this Agreement not been subject to the excise tax under Code Section 4999
(or any successor provision thereto). 
Such additional payment to the Executive shall include the amount of the
excise tax payable under Code Section 4999 and all income, employment and
additional excise taxes on the amount payable under this paragraph (ii).


 


Unless the Company and the Executive otherwise agree in writing, the
determination of the amount of reduction required under Section 5(g)(i) or
the additional amount required to be paid under Section 5(g)(ii), as
applicable, shall be made in writing by the Company’s independent auditors who
are primarily used by the Company immediately prior to the Change in Control
(the “Accountants”).  For purposes of
making the calculations required by this Section, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on good faith interpretations concerning the application of Sections 280G
and 4999 of the Code.  The Company and
the Executive shall furnish to the Accountants such information and documents
as the Accountants may reasonably request in order to make a determination
under this Section 5(g).  Company
shall bear all reasonable costs and expenses incurred in connection with the
performance of the calculations contemplated by this Section 5(g).  The Company shall pay any amount due under
this Section 5(g)(ii) to the Executive as soon as reasonably
practicable after the calculation of the amount of tax gross-up payment due and
in no event later than the close of the calendar year following the calendar
year in which the Executive remits the underlying Code Section 4999 excise
tax to the Internal Revenue Service.


 


6.                                                                                     Non–exclusivity
of Rights.  Nothing in
this Agreement shall prevent or limit the Executive’s continuing or future
participation in any plan, program, policy or practice provided 


 


11

















 


by the Company or any of its Affiliated Companies and for which the
Executive may qualify, nor shall anything herein limit or otherwise affect such
rights as the Executive may have under any contract or agreement with the
Company or any of its Affiliated Companies. 
Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its Affiliated Companies at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.


 


7.                                                                                     Full Settlement.  In no event shall the Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement
and such amounts shall not be reduced whether or not the Executive obtains
other employment.


 


8.                                                                                     Confidential
Information.  Executive
shall hold in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or any of
its Affiliated Companies, and their respective businesses, which shall have
been obtained by the Executive during the Executive’s employment by the company
or any of its Affiliated Companies and which shall not be or become public
knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). 
After termination of the Executive’s employment with the Company, the
Executive shall not, without the prior written consent of the Company or as may
otherwise be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it.  In no event shall an
asserted violation of the provisions of this Section 8 constitute a basis
for deferring or withholding any amounts otherwise payable to the Executive
under this Agreement.


 


9.                                                                                     Successors.


 


(a)           This Agreement is
personal to the Executive and without the prior written consent of the Company
shall not be assignable by the Executive otherwise than by will or the laws of
descent and distribution.  This Agreement
shall inure to the benefit of and be enforceable by the Executive’s legal
representatives.


 


(b)           This Agreement shall
inure to the benefit of and be binding upon the Company and its successors and
assigns.


 


(c)           The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly 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 success 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 assumed and agrees to perform this Agreement by operation of
law, or otherwise.


 


10.                                                                               Miscellaneous.


 


(a)           This Agreement shall
be governed by and construed in accordance with the laws of the State of Utah,
without reference to principles of conflict of laws.  The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect.  This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.  No waiver of any party’s rights or benefits
under this Agreement shall be effective unless such party signs a written
waiver of its rights or benefits.


 


12

















 


(b)                                 All notices and
other communications hereunder shall be writing and shall be given by hand
delivery to the other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:


 


If to the Executive:


 


 


If to the Company:


 


Merit Medical Systems, Inc.


1600 West Merit Parkway


South Jordan, Utah  84095


Attention:  General Counsel


 


or to such other address as either party shall have furnished to the
other in writing in accordance herewith. 
Notice and communications shall be effective when actually received by
the addressee.


 


(c)                                  The invalidity
or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.


 


(d)                                 The Company may
withhold from any amounts payable under this Agreement such Federal, state,
local or foreign taxes as shall be required to be withheld pursuant to any
applicable law or regulation.  The
Company makes no representation or warranty to the Executive regarding the tax
consequences of any payment or benefit under this Agreement, including any
representation as to the application of Code Section 409A to such
payments.


 


(e)                                  The Executive’s or the Company’s failure
to insist upon strict compliance with any provision of this Agreement or the
failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason, shall not be deemed to be a waiver of such
provision or right of this Agreement.


 


(f)                                    This Agreement
constitutes the entire agreement between the parties with respect to the
Executive’s employment by the Company and supersedes and replaces all other
agreements, oral or written, between the parties with respect to the subject
matter hereof including without limitation any Prior Agreement between the
Company and the Executive.


 


(g)                                 The Company and
the Executive irrevocably: (i) agree that any claim, law suit, cause of
action or dispute arising under or with respect to this Agreement or the
Executive’s employment hereunder (a “Claim”) shall be adjudicated solely in the
United States Federal District Court or Utah State Courts situated in Salt Lake
City, Utah (collectively the “Utah Courts”); (ii) consent and submit to
the personal jurisdiction of the Utah Courts with respect to any Claim; (iii) agree
that the Utah Courts shall have exclusive subject matter jurisdiction over any
such Claims and that venue with respect to any such Claims is proper and most
convenient in the Utah Courts; and (iv) agree and covenant not to assert
any objection to personal jurisdiction, subject matter jurisdiction or venue in
the Utah Courts with respect to any Claim. TO THE FULLEST EXTENT PERMITTED BY
LAW, THE COMPANY AND THE EXECUTIVE IRREVOCABLY WAIVE AND RELEASE ANY RIGHT TO
TRIAL BY JURY WITH RESPECT TO ANY CLAIM ARISING UNDER OR WITH RESPECT TO THIS
AGREEMENT OR THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY.


 


13

















 


(h)                                 If the
Executive or the Company retains legal counsel and/or incurs other costs and
expenses in connection with the enforcement of any or all of the provisions of
this Agreement, the prevailing party shall be entitled to recover from the
other party reasonable attorneys’ fees, costs, and expenses incurred by the
prevailing party in connection with the enforcement of this Agreement.  Notwithstanding the foregoing, in the event
that following a Change in Control the Executive engages legal counsel to
enforce the Executive’s rights or seek a determination under this Agreement,
the Company shall pay the expenses of such legal counsel regardless of the
outcome of any legal proceeding resulting therefrom; provided that such claim
is not determined by a trier of fact to be frivolous or in bad faith.


 


[Remainder of Page Intentionally
Left Blank—Signature Page Follows]


 

















 


IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s
hand, pursuant to the authorization from its Board of Directors, the Company
has caused these presents to be executed in it name on its behalf, all as of
the date and year first above written.


 


 


	
  EXECUTIVE:

  	
   

  	
  /s/ Kent W. Stanger

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPANY:

  	
   

  	
  MERIT MEDICAL SYSTEMS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
    /s/ Fred P.
  Lampropoulos

  
	
   

  	
   

  	
  Its

  	
  President and CEO