exv10w1



 








Exhibit 10.1




AMENDED AND RESTATED VNUS SEVERANCE PLAN

FOR MANAGEMENT AND KEY EMPLOYEES




     The Board of Directors of VNUS Medical Technologies, Inc., a Delaware corporation (the
“Company”) has determined that it is in the best interests of the Company and its stockholders to
secure the continued services, dedication and objectivity of certain officers and employees of the
Company without concern as to whether such officers or employees might be hindered or distracted by
personal uncertainties and risks in connection with a Change of Control. To encourage the full
attention and dedication to the Company by such officers and employees, the Board of Directors of
the Company has authorized the Company to adopt this Amended and Restated VNUS Severance Plan (the
“Plan”).




	 	1.	 	Definitions. As used in this Plan, the following terms shall have the respective meanings
set forth below:
	 
	 	(a)	 	“Administrator” means the person designated by the Board as the administrator of this
Plan.
	 
	 	(b)	 	“Base Salary” means the Participant’s annual rate of base salary in effect immediately
prior to the Effective Date.
	 
	 	(c)	 	“Board” means the Board of Directors of the Company.
	 
	 	(d)	 	“Bonus” means the Participant’s target bonus opportunity determined immediately prior to
the Effective Date under the Company’s annual bonus plan.
	 
	 	(e)	 	“Cause” means (1) the willful and deliberate failure by a Participant to perform his or
her duties and responsibilities (other than as a result of incapacity due to physical or mental
illness) which is not remedied in a reasonable period of time after receipt of written notice from
the Company specifying such failure, (2) willful misconduct by a Participant which is demonstrably
injurious to the business or reputation of the Company, or (3) a Participant’s conviction of, or
plea of guilty or nolo contendere to, a felony or other crime involving moral turpitude. The
Company must notify such Participant that it believes “Cause” has occurred within ninety (90) days
of its knowledge of the event or condition constituting Cause or such event or condition shall not
constitute Cause hereunder.
	 
	 	(f)	 	“Change of Control” means the occurrence of any one of the following events:






	 	(i)	 	any “person” (as such term is used in Section 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)), is or becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly of securities of the Company
representing 50% or more of the combined voting power of the Company’s then outstanding securities;
or
	 
	 	(ii)	 	during any period of two consecutive years (not including any period prior to the
execution of this Agreement) individuals who at the beginning of such period constitute the Board
and any new director whose election by the Board or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds (2/3) of the directors at the beginning
of the 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 of a merger, consolidation, statutory share exchange or similar form of
corporate transaction involving the Company or any of its subsidiaries that requires the approval
of the Company’s stockholders, whether for such transaction or the issuance of securities in the
transaction (a “Reorganization”), or sale or other disposition of all or substantially all of the
Company’s assets to an entity that is not wholly owned by the Company (a “Sale”), unless
immediately following such Reorganization or Sale, more than 50% of the total voting power (in
respect of the election of directors, or similar officials in the case of an entity other than a
corporation) of either (x) the surviving corporation or entity resulting from such Reorganization
or the entity which has acquired all or substantially all of the assets of the Company (in either
case, the “Surviving Entity”), or (y) if applicable, the ultimate parent entity that directly or
indirectly has beneficial ownership of 50% or more of the total voting power (in respect of the
election





 









 






of directors, or similar officials in the case of an entity other than a corporation) of the
Surviving Entity (the “Parent Entity”), is represented by Company voting securities that were
outstanding immediately prior to such Reorganization or Sale (or, if applicable, is represented by
shares into which such Company voting securities were converted pursuant to such Reorganization or
Sale), and such voting power among the holders thereof is in substantially the same proportion as
the voting power of such Company voting securities among the holders thereof immediately prior to
the Reorganization or Sale, or the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company.




	 	(g)	 	“Company” means VNUS Medical Technologies, Inc., a Delaware corporation and 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, by operation of law, or otherwise.
	 
	 	(h)	 	“Date of Termination” means the date on which a Participant’s employment with the Company
terminates.
	 
	 	(i)	 	“Effective Date” means the date on which a Change in Control occurs.
	 
	 	(j)	 	“Good Reason” means the occurrence of any of the following without the Participant’s
express written consent: (1) any reduction in a Participant’s annual rate of base salary in effect
immediately prior to the Effective Date, as such may be increased thereafter, (2) the termination
or material reduction of the levels of pension and welfare benefits that were provided to a
Participant immediately prior to the Effective Date, as such may be increased thereafter, (3) the
requirement by the Company that the Participant have his principal location of work changed to any
location that is in excess of 25 miles from its location on the Effective Date, or (4) with respect
to Participants that are employees of the Company at the vice president level and above, removal of
duties customarily assigned to an employee with such Participant’s title, or a substantial adverse
alteration in the nature or status of such Participant’s duties; provided, however, that a
significant reduction in job responsibility and/or authority shall not be deemed to have occurred
simply by virtue of a Change of Control, the fact that the Company becomes a subsidiary of another
entity or the Company’s status changing from publicly-traded to privately-held, as a result of the
Change in Control.
	 
	 	(k)	 	“Participant” means the CEO, vice presidents, directors and managers of the Company, other
than those persons whose most recent performance evaluation is below standard.
	 
	 	(l)	 	“Plan” means this VNUS Severance Plan as set forth herein and as amended from time to
time.
	 
	 	(m)	 	“Qualifying Termination” means the termination of a Participant’s employment by the
Company other than for Cause or by a Participant for Good Reason, which termination occurs during a
Termination Period.
	 
	 	(n)	 	“Separation Benefit” means the benefit payable in accordance with Section 2(a)(1) of this
Plan.
	 
	 	(o)	 	“Service” means a Participant’s service with the Company.
	 
	 	(p)	 	“Termination Period” means, with respect to the occurrence of a Change of Control, the
period of time beginning with the Effective Date and ending on the two-year anniversary of the
Effective Date.
	 
	 	2.	 	Payments Upon Termination of Employment.
	 
	 	(a)	 	If, during a Termination Period, the employment of a Participant who was a Participant at
the Effective Date for such Termination Period is terminated by reason of a Qualifying Termination,
such Participant shall be entitled to receive:






	 	(i)	 	(A) if such termination occurs on or before the one year anniversary of the Effective
Date, a lump sum payment equal to the percent of his or her Base Salary and Bonus shown in column A
below, or (B) if such termination occurs on a date following the one year anniversary of the
Effective Date but prior to the two year anniversary of the Effective Date, a lump sum payment
equal to the percent of his or her Base Salary and Bonus shown in column B below;





 









 






	 	(ii)	 	continued coverage under any and all life, medical, dental, vision and disability
insurance in which such Participant was participating immediately prior to the Effective Date. Such
benefits will continue (A) if such termination occurs on or before the one year anniversary of the
Effective Date, for the number of months shown in column A below following the Termination Date or
(B) if such termination occurs after the one year anniversary of the Effective Date but prior to
the two year anniversary of the Effective Date, for the number of months shown in column B below
following the Termination Date; provided, however, that upon the Participant’s acceptance of
comparable employment, such continued coverage under plans and programs of the Company shall be
secondary to the benefits available, if any, from the benefit plans provided by the Participant’s
new employer; and
	 
	 	(iii)	 	full vesting and immediate exercisability of any outstanding stock options or restricted
stock units held by the Participant.
	 
	 	(iv)	 	immediate lapsing of all repurchase rights relative to shares held by the Participant.





	 	 	 	 	 
	 	 	A	 	B
	 	 	Qualifying Termination	 	Qualifying Termination
	 	 	Within first year of	 	Between 1 and 2 years
	 	 	Change of Control	 	after Change of Control
	CEO & vice presidents

	 	100% of Base Salary & Bonus
12 months of benefits
	 	67% of Base Salary & Bonus
8 months of benefits
	Directors

	 	50% of Base Salary & Bonus

6 months of benefits
	 	33% of Base Salary & Bonus

4 months of benefits
	Managers

	 	33% of Base Salary & Bonus

4 months of benefits
	 	25% of Base Salary & Bonus

3 months of benefits







	 	(b)	 	Lump sum payments of amounts due a Participant pursuant to this Section 2 shall be payable
within ten (10) working days following the Participant’s Date of Termination. The benefits
described in this Section 2 shall be payable in addition to, and not in lieu of, all other accrued,
vested or deferred compensation, rights, options or other benefits which may be owed to a
Participant following termination of employment, including but not limited to accrued sick pay and
vacation pay, amounts or benefits payable under any bonus or other compensation plan, stock option
plan, stock ownership plan, stock purchase plan, life insurance plan, health plan, disability plan
or similar or successor plan; provided, however, that any Separation Benefit a Participant is
entitled to hereunder shall be reduced by the amount of any cash payments in the nature of
separation allowance, severance pay, or “notice” pay which the Company is required to pay such
Participant upon termination of employment pursuant to any applicable law or other severance
program or arrangement. For this purpose, unemployment compensation benefits shall not reduce the
Separation Benefit hereunder.
	 
	 	3.	 	Confidentiality. The benefits provided in Section 2 are expressly conditioned upon
Participant’s agreement not to, directly or indirectly, for a period of one (1) year after his or
her Date of Termination, disclose or utilize any trade secrets or confidential information of the
Company, and the provision of such benefits shall immediately cease in the event of the
Participant’s violation of the provisions of this Section 3.
	 
	 	4.	 	Withholding Taxes. The Company may withhold from all payments due hereunder all taxes
which, by applicable federal, state, local or other law, it is required to withhold therefrom.
	 
	 	5.	 	Reimbursement of Expenses and Settlement of Disputes. If any contest or dispute shall arise
under this Plan involving termination of a Participant’s employment or involving the failure or
refusal of the Company to perform fully in accordance with the terms hereof, the Company shall
reimburse such Participant, on a current basis, for all reasonable legal fees and expenses, if any,
reasonably incurred by such in connection with such contest or dispute (to the extent the
Participant prevails in such contest or dispute), provided, that, if it is determined by a court or
by arbitration that such Participant did not enter into the contest or dispute in good faith, such
Participant shall be obligated to return to the Company such reimbursed fees and expenses. All
disputes hereunder shall be settled exclusively by arbitration in the State of California in
accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitration award in any court having
jurisdiction. The Company shall bear all costs and expenses in connection with the retention of the
arbitration panel for any proceeding.





 









 






	 	6.	 	Termination or Amendment of Plan.
	 
	 	(a)	 	Subject to paragraph (b) below, this Plan shall be in effect as of May 3, 2001.
	 
	 	(b)	 	The Board shall have the right at any time prior to a Change of Control, in its sole
discretion, to terminate or amend the Plan, which right includes, but is not limited to, the right
to add any person to the Plan as a Participant or to remove any Person from the Plan as a
Participant. In no event shall this Plan be terminated or amended following a Change of Control in
any manner which would adversely affect the rights or potential rights of a Participant (or his or
her dependents) under this Plan with respect to such Change of Control.
	 
	 	7.	 	Successors.
	 
	 	(a)	 	This Plan shall not be terminated by any merger, consolidation, share exchange or similar
event involving the Company whereby the Company is or is not the surviving or resulting entity. In
the event of any merger, consolidation, share exchange or similar event, the provisions of this
Plan shall be binding upon the surviving or resulting corporation or the person or entity to which
the Company’s assets are transferred.
	 
	 	(b)	 	Concurrently with any merger, consolidation, share exchange or sale, lease or transfer of
all or substantially all of its assets, the Company will cause any successor or transferee
unconditionally to assume all of the obligations of the Company hereunder.
	 
	 	(c)	 	This Plan shall inure to the benefit of and be enforceable by each Participant’s personal
or legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees. If a Participant shall die while any amounts are payable to such Participant hereunder,
all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of
this Plan to such Participant’s surviving spouse or, if none, to such Participant’s estate.
	 
	 	8.	 	No Mitigation, Offset. The obligation of the Company to provide a Participant with the
benefits specified in Section 2 and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against such Participant or others. In no event shall a Participant be
obligated to seek other employment or take other action by way of mitigation of the amounts payable
to such Participant under any of the provisions of this Plan and such amounts shall not be reduced
whether or not such Participant obtains other employment, except as provided in Section 2(a)(ii) of
this Plan.
	 
	 	9.	 	Governing Law; Law Validity. The interpretation, construction and performance of this Plan,
unless preempted by the Standard Participant Retirement Income Security Act of 1974, as amended
(“ERISA”), shall be governed by and construed and enforced in accordance with the laws of the State
of California without regard to the principle of conflicts of laws. The invalidity or
unenforceability of any provision of this Plan shall not affect the validity or enforceability of
any other provision of this Plan, which other provisions shall remain in full force and effect.
	 
	 	10.	 	Administration. The Plan shall be administered by the Administrator. Consistent with the
requirements of ERISA and the regulations of the Department of Labor, the Administrator shall
provide adequate written notice to any Participant covered by the Plan whose claim for a Separation
Benefit or other benefits hereunder has been denied, setting forth specific reasons for such
denial, written in a manner calculated to be understood by such Participant and affording such
Participant a full and fair review of the decision denying the claim.
	 
	 	11.	 	Miscellaneous.
	 
	 	(a)	 	The Company shall not be required to fund or otherwise segregate assets to be used for the
payment of any benefits under the Plan. The Company shall make such payments only out of its general corporate
funds, and therefore its obligation to make such payments shall be subject to any claims of its
other creditors having priority as to its assets.





 









 






	 	(b)	 	This Plan does not constitute a contract of employment or impose on the Company any
obligation to retain a Participant as an officer or employee (as the case may be), to retain a
Participant as a Participant (prior to a Change in Control), not to change the status of a
Participant’s employment, or not to change the policies of the Company regarding termination of
employment.
	 
	 	(c)	 	No rights of any Participant (or beneficiary) to payments of any amounts under the Plan
shall be sold, exchanged, transferred, assigned, pledged, hypothecated or otherwise disposed of
other than by will or by the laws of descent and distribution.
	 
	 	(d)	 	Unless the Company specifically provides otherwise, any benefits payable under this Plan
shall not be taken into account for purposes of determining benefits payable to a Participant under
any other benefit plan or program.
	 
	 	(e)	 	The Company’s obligations hereunder shall be subject to all applicable laws, and the
Separation Benefit and other benefits payable hereunder may be adjusted to comply with any such
laws.





     IN WITNESS WHEREOF, the foregoing VNUS Severance Plan has been duly adopted by the Board of
Directors of the Company as of the 7th of November 2005.



	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ Brian E. Farley	 
	 	 	Brian E. Farley, Chief Executive Officer 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ Timothy A. Marcotte	 
	 	 	Timothy A. Marcotte, Secretary