Document:

10.2 EmploymentAgreementdatedJanuary22013betweenEndologixIncandShelleyBThunen

Exhibit 10.2 

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of January 2, 2013, by and between ENDOLOGIX, INC., a Delaware corporation (the “Company”), and Shelley B. Thunen, an individual (the “Executive”).
R E C I T A L

The Company desires to employ the Executive in the capacity hereinafter stated, and the Executive desires to enter into the employ of the Company in that capacity pursuant to the terms and conditions set forth herein.
A G R E E M E N T

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, the Company and the Executive, intending to be legally bound, hereby agree as follows:
1.Employment.  The Company hereby agrees to employ the Executive as the Chief Financial Officer of the Company, reporting to the Chief Executive Officer of the Company, and the Executive accepts such employment and agrees to devote substantially all her business time and efforts and skills on such reasonable duties as shall be assigned to her by the Company commensurate with such position.  The Board of Directors of the Company intends to review, amend and restate the Agreement during the first quarter of the 2013 calendar year to add terms and provisions regarding the Executive’s employment that are consistent with those found in comparable peer company agreements.
2.    Definitions.
For purposes hereof, “Change in Control” means the occurrence of any of the following:
(a)    The acquisition, directly or indirectly, in one transaction or a series of related transactions, by any person or group (within the meaning of Section 13(d)(3) of the Exchange Act) of the beneficial ownership of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of all outstanding securities of the Company;
(b)    A merger or consolidation in which the Company is not the surviving entity, except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such merger or consolidation hold as a result of holding Company securities prior to such transaction, in the aggregate, securities possessing more than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the surviving entity (or the parent of the surviving entity) immediately after such merger or consolidation;
(c)    A reverse merger in which the Company is the surviving entity but in which the holders of the outstanding voting securities of the Company immediately prior to such merger hold, in the aggregate, securities possessing less than fifty percent (50%) of the total combined voting 

Exhibit 10.2 

power of all outstanding voting securities of the Company or of the acquiring entity immediately after such merger;
(d)    The sale, transfer or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company, except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such transaction(s) receive as a distribution with respect to securities of the Company, in the aggregate, securities possessing more than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the acquiring entity immediately after such transaction(s); or
(e)    The approval by the stockholders of a plan or proposal for the liquidation or dissolution of the Company. 
3.    Termination.
3.1    Termination by the Company for Cause.  Any of the following acts or omissions shall constitute grounds for the Company to terminate the Executive’s employment pursuant to this Agreement for “cause”:
(a)    Willful misconduct by the Executive causing material harm to the Company but only if the Executive shall not have discontinued such misconduct within 30 days after receiving written notice from the Company describing the misconduct and stating that the Company will consider the continuation of such misconduct as cause for termination of this Agreement;
(b)    Any material act or omission by the Executive involving gross negligence in the performance of the Executive’s duties to, or material deviation from any of the policies or directives of, the Company, other than a deviation taken in good faith by the Executive for the benefit of the Company;
(c)    Any illegal act by the Executive which materially and adversely affects the business of the Company, provided that the Company may suspend the Executive with pay while any allegation of such illegal act is investigated; or
(d)    Any felony committed by the Executive, as evidenced by conviction thereof, provided that the Company may suspend the Executive with pay while any allegation of such felonious act is investigated.
Termination by the Company for cause shall be accomplished by written notice to the Executive and, in the event of a termination pursuant to Sections 3.1(a), 3.1(b), and/or 3.1(c) above, shall be preceded by a written notice providing a reasonable opportunity for the Executive to correct her conduct.
3.2    Termination for Death or Disability.  In addition to termination for cause pursuant to Section 3.1 hereof, the Executive’s employment pursuant to this Agreement shall be immediately terminated without notice by the Company (i) upon the death of the Executive or (ii) upon the Executive becoming totally disabled.  For purposes of this Agreement, the term “totally disabled” means an inability of the Executive, due to a physical or mental illness, injury or impairment, to perform a substantial portion of her duties for a period of one hundred eighty (180) or 

Exhibit 10.2 

more consecutive days, as determined by a competent physician selected by the Company’s Board of Directors and reasonably agreed to by the Executive, following such one hundred eighty (180) day period.
3.3    Termination for Good Reason.  The Executive’s employment pursuant to this Agreement may be terminated by the Executive for “good reason” if the Executive voluntarily terminates her employment as a result of any of the following:
(a)    Without the Executive’s prior written consent, a material reduction in her then current Base Salary;
(b)    Without the Executive’s prior written consent, a material reduction in the Executive’s authority, duties, or responsibilities; or
(c)    Without the Executive’s prior written consent, a material change in the geographic location of the Executive’s principal place of employment.
In order for any of the foregoing conditions or events to constitute “good reason” under this Agreement, all of the following must occur: (i) the Executive must provide written notice to the Company of the occurrence of any of the foregoing events or conditions within ninety (90) days of the occurrence of such event or condition; (ii) the Company or any surviving entity shall have failed to cure such event or condition within the succeeding thirty (30) day period after the Company’s receipt of written notice of such event or condition from the Executive; and (iii) the Executive’s termination of employment following such thirty (30) day cure period must occur no later than the date that is two (2) years following the initial occurrence of one of the foregoing events or conditions 
3.4    Termination Without Cause.  The Company may terminate this Agreement, and the employment of the Executive under this Agreement, without cause, at any time upon at least thirty (30) days’ prior written notice to the Executive.  This Section 3.4 shall not apply to a termination of the Executive by the Company as a result of a Change in Control, but, instead, the provisions of Section 3.5 below shall apply.
3.5    Termination Due to Change in Control.  The Company may terminate this Agreement and the employment of the Executive under this Agreement, upon at least thirty (30) days’ prior written notice to the Executive in the event of a Change in Control during the period of the Executive’s employment.  The Executive may terminate this Agreement and the employment of the Executive under this Agreement if any of subsections (a) through (c) of Section 3.3 are satisfied following the occurrence of a Change in Control during the period of the Executive’s employment.
3.6    Payments Upon Removal or Termination. 
(a)    If, during the term of this Agreement, the Executive resigns for one of the reasons stated in Section 3.3, or if the Company terminates the Executive’s employment pursuant to Section 3.4 above, the Executive shall be entitled to the following compensation:  (i) the portion of her then current Base Salary which has accrued through her date of termination; (ii) any payments for unused vacation and reimbursement expenses, which are due, accrued or payable at the date of Executive’s termination; (iii) severance payment in an amount equal to six-months of the Executive’s then-current Base Salary (the “Severance Amount”); and (iv) to the extent not already vested all of 

Exhibit 10.2 

the Executive’s options to purchase shares of the Company’s common stock and all of the Executive’s restricted stock shall vest by six additional months, and all of the Executive’s restricted stock units shall remain subject to vesting for six additional months in accordance with their terms, and such options shall otherwise be exercisable in accordance with their terms.  In addition, in such event, the Executive shall be entitled to (a) a prorated payment equal to the target bonus amount for which the Executive would be eligible for the year in which such resignation or termination occurred to be paid in lump sum within sixty (60) days after the Executive’s date of termination, and (b) continuation of the insurance benefits set forth in Exhibit A, for six-months.  The payments provided by this paragraph 3.6(a) shall be the Executive’s complete and exclusive remedy for any such termination. 
(b)    If, during the term of this Agreement, the Company terminates the Executive’s employment pursuant to Section 3.5 above or the Executive terminates her employment pursuant to Section 3.5 above, the Executive shall be entitled to the following compensation:  (i) the portion of her then current Base Salary which has accrued through her date of termination, (ii) any payments for unused vacation and reimbursement expenses, which are due, accrued or payable at the date of the Executive’s termination, (iii) severance payment in an amount equal to twelve-months of the Executive’s then-current Base Salary (the “Severance Amount”); and (iv) to the extent not already vested all of the Executive’s options to purchase shares of the Company’s common stock and all of the Executive’s restricted stock and restricted stock units shall accelerate and automatically vest, and such options shall otherwise be exercisable in accordance with their terms.  In addition, in such event the Executive shall be entitled to (a) a prorated payment equal to the target bonus amount for which the Executive would be eligible for the year in which such resignation or termination occurred to be paid in lump sum within sixty (60) days after the Executive’s date of termination, and (b) continuation of the insurance benefits set forth in Exhibit A, for twelve-months.  The payments provided by this paragraph 3.6(b) shall be the Executive’s complete and exclusive remedy for any such termination.
(c)    All payments required to be made by the Company to the Executive pursuant to this Section 3 shall be paid on a regular basis in accordance with the Company’s normal payroll procedures and policies as in effect as of the date of the Executive’s termination, including, without limitation, the Severance Amount which shall be paid in equal installments on the Company’s regular payroll dates in accordance with the Company’s normal payroll procedures and policies over the number of months immediately succeeding the date of termination that is equal to the number of months of Base Salary payable as the Severance Amount.  For purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), the Executive’s right to receive the installment payments of the Severance Amount shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment shall at all times be considered a separate and distinct payment. Amounts payable to the Executive under subsections (a)(ii) and (b)(ii) of this Section 3.6, as a reimbursement of expenses, shall be made in accordance with Treasury Regulation Section 1.409A-3(i)(1)(iv) and be paid on or before the last day of the Executive’s taxable year following the taxable year in which the Executive incurred the expenses.  If the Company terminates the Executive’s employment pursuant to Sections 3.1 or 3.2, or if the Executive voluntarily resigns (except as provided in Section 3.3 or Section 3.5), then the Executive shall be entitled to only the compensation set forth in items (i) and (ii) of Section 3.6(a).

Exhibit 10.2 

(d)    To the extent that any or all of the payments and benefits provided for in this Agreement constitute “parachute payments” within the meaning of Section 280G of the Code and, but for this paragraph, would be subject to the excise tax imposed by Section 4999 of the Code, then at the Executive’s election:
(i)    The Executive shall receive all such payments and benefits the Executive is entitled to receive hereunder, and any liability for taxes pursuant to the above shall be the liability solely of the Executive; or 
(ii)    The aggregate amount of such payments and benefits shall be reduced such that the present value thereof (as determined under the Code and applicable regulations) is equal to 2.99 times the Executive’s “base amount” (as defined in Section 280G of the Code).
The determination of any reduction or increase of any payment or benefits under this paragraph pursuant to the foregoing provision shall be made by a nationally recognized public accounting firm chosen by the Company in good faith, and such determination shall be conclusive and binding on the Company and the Executive.  
4.    Section 409A. 
4.1    Payment Delay.  Notwithstanding anything herein to the contrary, to the extent any payments to the Executive pursuant to Section 3 are treated as non-qualified deferred compensation subject to Section 409A of the Code, then (i) no amount shall be payable pursuant to such section unless the Executive’s termination of employment constitutes a “separation from service” with the Company (as such term is defined in Treasury Regulation Section 1.409A-1(h) and any successor provision thereto) (a “Separation from Service”), and (ii) if the Executive, at the time of her Separation from Service, is determined by the Company to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code and the Company determines that delayed commencement of any portion of the termination benefits payable to the Executive pursuant to this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code (any such delayed commencement, a “Payment Delay”), then such portion of the Executive’s termination benefits described in Section 3 shall not be provided to the Executive prior to the earlier of (A) the expiration of the six-month period measured from the date of the Executive’s Separation from Service, (B) the date of the Executive’s death, or (C) such earlier date as is permitted under Section 409A.  Upon the expiration of the applicable Code Section 409A(a)(2)(B)(i) deferral period, all payments deferred pursuant to a Payment Delay shall be paid in a lump sum to Executive within 30 days following such expiration, and any remaining payments due under this Agreement shall be paid as otherwise provided herein.  The determination of whether the Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of her Separation from Service shall made by the Company in accordance with the terms of Section 409A of the Code and applicable guidance thereunder (including without limitation Treasury Regulation Section 1.409A-1(i) and any successor provision thereto).
4.2    Exceptions to Payment Delay.  Notwithstanding Section 4.1, to the maximum extent permitted by applicable law, amounts payable to Executive pursuant to Section 3 shall be made in reliance upon Treasury Regulation Section 1.409A-1(b)(9) (with respect to separation pay plans) or Treasury Regulation Section 1.409A-1(b)(4) (with respect to short-term deferrals).  

Exhibit 10.2 

Accordingly, the severance payments provided for in Section 3 are not intended to provide for any deferral of compensation subject to Section 409A of the Code to the extent (i) the severance payments payable pursuant to Section 3, by their terms and determined as of the date of Executive’s Separation from Service, may not be made later than the 15th day of the third calendar month following the later of (A) the end of the Company’s fiscal year in which Executive’s Separation from Service occurs or (B) the end of the calendar year in which Executive’s Separation from Service occurs, or (ii) (A) such severance payments do not exceed an amount equal to two times the lesser of (1) the amount of Executive’s annualized compensation based upon Executive’s annual rate of pay for the calendar year immediately preceding the calendar year in which Executive’s Separation from Service occurs (adjusted for any increase during the calendar year in which such Separation from Service occurs that would be expected to continue indefinitely had Executive remained employed with the Company) or (2) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) for the calendar year in which Executive’s Separation from Service occurs, and (B) such severance payments shall be completed no later than December 31 of the second calendar year following the calendar year in which Executive’s Separation from Service occurs.
4.3    Interpretation.  To the extent the payments and benefits under this Agreement are subject to Section 409A of the Code, this Agreement shall be interpreted, construed and administered in a manner that satisfies the requirements of Sections 409A(a)(2), (3) and (4) of the Code and the Treasury Regulations thereunder (and any applicable transition relief under Section 409A of the Code).  
5.    Assignment.  This Agreement shall not be assignable, in whole or in part, by either party without the written consent of the other party, except that the Company may, without the consent of the Executive, assign its rights and obligations under this Agreement to an Affiliate or to any corporation, firm or other business entity (i) with or into which the Company may merge or consolidate, or (ii) to which the Company may sell or transfer all or substantially all of its assets.  After any such assignment by the Company, the Company shall be discharged from all further liability hereunder and such assignee shall thereafter be deemed to be the Company for the purposes of all provisions of this Agreement including this Section 5.
6.    Successors.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  If the Executive should die while any amounts are still payable to her hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee or, if there be no such designee, to the Executive’s estate.  
7.    Miscellaneous.
7.1    Governing Law.  This Agreement is made under and shall be governed by and construed in accordance with the laws of the State of California.  
7.2    Prior Agreements.  This Agreement contains the entire agreement of the parties relating to the subject matter hereof and supersedes all prior agreements and understanding with respect to such subject matter, and the parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement which are not set forth herein.

Exhibit 10.2 

7.3    Arbitration.  In the event of any controversy, claim or dispute between the parties hereto arising out of or relating to this Agreement, the matter shall be determined by arbitration, which shall take place in Orange County, California, under the rules of the American Arbitration Association.  The arbitrator shall be a retired Superior Court judge mutually agreeable to the parties and if the parties cannot agree such person shall be chosen in accordance with the rules of the American Arbitration Association.  The arbitrator shall be bound by applicable legal precedent in reaching her or her decision.  Any judgment upon such award may be entered in any court having jurisdiction thereof.  Any decision or award of such arbitrator shall be final and binding upon the parties and shall not be appealable.  The parties hereby consent to the jurisdiction of such arbitrator and of any court having jurisdiction to enter judgment upon and enforce any action taken by such arbitrator.  The fees payable to the American Arbitration Association and the arbitrator shall be paid by the Company.
7.4    Withholding Taxes.  The Company may withhold from any salary and benefits payable under this Agreement all federal, state, city or other taxes or amounts as shall be required to be withheld pursuant to any law or governmental regulation or ruling.  
7.5    Amendments.  No amendment or modification of this Agreement shall be deemed effective unless made in writing signed by the parties hereto.  
7.6    No Waiver.  No term or condition of this Agreement shall be deemed to have been waived nor shall there be any estoppel to enforce any provisions of this Agreement, except by a statement in writing signed by the party against whom enforcement of the waiver or estoppel is sought.  Any written waiver shall not be deemed a continuing waiver unless specifically stated, shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.  
7.7    Severability  To the extent any provision of this Agreement shall be invalid or unenforceable, it shall be considered deleted herefrom and the remainder of such provision and of this Agreement shall be unaffected and shall continue in full force and effect.
7.8    Counterpart Execution.  This Agreement may be executed by facsimile and in counterparts, each of which shall be deemed an original and all of which when taken together shall constitute but one and the same instrument.
7.9    Attorneys’ Fees.  Should any legal action or arbitration be required to resolve any dispute over the meaning or enforceability of this Agreement or to enforce the terms of this Agreement, the prevailing party shall be entitled to recover its or her reasonable attorneys fees and costs incurred in such action, in addition to any other relief to which that party may be entitled.  
7.10    Notices.  Any notice required or permitted to be given hereunder shall be in writing and may be personally served or sent by United States Mail, and shall be deemed to have been given when personally served or two days after having been deposited in the United States Mail, registered mail, return receipt requested, with first class postage prepaid and properly addressed as follows:

Exhibit 10.2 

	
		
	If to Executive:
	Shelley B. Thunen

 

	If to the Company:
	Endologix, Inc.  
11 Studebaker
Irvine, CA  92618 
Attn:  Chief Executive Officer 

7.11    Proprietary Information and Inventions Agreement.  Executive agrees to sign the Company’s standard form of employee proprietary information and inventions agreement.  
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year set forth above.
	
	
	“COMPANY” 

ENDOLOGIX, INC., a Delaware corporation 

By:  /s/ John McDermott   
Its:   President and Chief Executive Officer

	“EXECUTIVE” 

/s/ Shelley B. Thunen   
Shelley B. Thunen

Exhibit 10.2 

EXHIBIT A

SHELLEY THUNEN’S BENEFITS

		
	•
	Health Insurance

		
	•
	Dental Insurance 

		
	•
	Prescription Drug Insurance 

		
	•
	Group Life Insurance  

		
	•
	Endologix, Inc. 401(k) Plan

		
	•
	Endologix, Inc. Employee Stock Purchase Plan

		
	•
	Vacation Accruals10.3 SeveranceAgreementandGeneralReleasedatedDecember312012betweenEndologixIncandRobertJKrist

Exhibit 10.3

SEVERANCE AGREEMENT AND GENERAL RELEASE
Endologix, Inc. (“Company”) and Robert J. Krist (“Employee”) hereby enter into the following Severance Agreement and General Release (this “Agreement”):
1.Employee shall retire from Company, and as a director and/or officer, as applicable, of each subsidiary of Company, and the employment relationship between Employee, Company and each subsidiary of Company will be separated effective December 31, 2012 (the “Separation Date”).  In reliance on Employee’s representations and releases in this Agreement, Company will provide Employee with the following:
(a)    (i)  payment of a lump sum severance, equivalent to six months base pay, in the gross amount of $132,500, (ii) payment of the pro rated amount of Employee’s target bonus for the 2012 calendar year in the gross amount of $92,750 and (iii) payment of Employee’s accrued vacation pay in the gross amount of $40,760, each less applicable withholdings as required by law (collectively, the “Severance Payment”).  The Severance Payment shall be made on or before December 31, 2012, provided Employee executes, and does not revoke, this Agreement;
(b)    accelerated vesting of the unvested portion of stock option nos. 1728 and 2091 and restricted stock award no. 1521 by six months, and accelerated vesting of twenty-five percent (25%) of the unvested portion of restricted stock unit award no. 2486, each effective as of the Separation Date; 
(c)    payment of COBRA coverage for Employee under Company’s health insurance plans (medical, dental, prescription drug and group life) through June 30, 2013; and 
(d)    a Consulting Agreement in the form of Exhibit A attached hereto (the “Consulting Agreement”).    
The consideration described in this paragraph exceeds the amounts Employee would otherwise be eligible to receive under law, agreement and/or Company policies.    
2.    Employee and Company agree that Employee’s rights and obligations with regard to any equity in Company shall be governed by the terms of any applicable stock option, restricted stock purchase and restricted stock unit agreement(s) between Employee and Company, except as modified by this Agreement.  Upon execution of this Agreement, Employee will own the number of vested shares of restricted stock, vested stock options and vested restricted stock units set forth on Exhibit B attached hereto (inclusive of the consideration provided in paragraph 1 above).  Employee’s stock options (but not his restricted stock units) will continue to vest during the period of his consultancy, pursuant to the terms of the Consulting Agreement attached hereto as Exhibit A.  Employee acknowledges and agrees that his right to exercise any vested stock options shall expire in accordance with the terms of the applicable stock option agreement, as extended by this Agreement and the Consulting Agreement.  For purposes of clarity, Employee’s right to exercise any vested stock options shall expire 90 days following (a) the expiration of the Term (as defined in the Consulting Agreement) or (b) such earlier date if Employee terminates the Consulting Agreement prior to the expiration of the Term.  Employee further acknowledges and agrees that any incentive stock options held by Employee will cease to be so characterized if exercised by Employee more than 90 days following his Separation Date.  
3.    As consideration for Company to enter into this Agreement, Employee agrees that he will not file any complaints or other proceedings against Company or any Released Party (as defined below) 

Exhibit 10.3

with any court or arbitrator based on any claim released by this Agreement, and that if any court or arbitrator assumes jurisdiction of any proceeding against Company or any Released Party on his behalf, Employee will immediately take all actions necessary to assure the matter is dismissed or closed.  This Agreement does not limit Employee’s right to file a charge or complaint with any state or federal agency, or to cooperate in such a matter, although Employee expressly waives and relinquishes all right to any relief that any governmental agency may obtain on his behalf.  
4.    In exchange for the consideration referred to in paragraph 1 above, Employee waives and releases all claims, known and unknown, which he might otherwise have had, as of the date of execution of this Agreement, against Company or any of its parent or affiliated companies, or any of its or their respective officers, directors, stockholders, employees, attorneys, insurers, agents, successors or assigns (collectively, the “Released Parties”), including but not limited to claims regarding any aspect of Employee’s employment or compensation, the cessation of Employee’s employment, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, Title VII of the Civil Rights Act of 1964, 42 U.S.C. section 1981, the Fair Labor Standards Acts, the California Fair Employment and Housing Act, California Government Code section 12900, et seq., the Unruh Civil Rights Act, California Civil Code section 51, all provisions of the California Labor Code and the Employee Retirement Income Security Act, 29 U.S.C. section 1001, et seq., all as amended, any other federal, state or local law, regulation or ordinance or public policy, contract, tort or property law theory, or any other cause of action whatsoever that arose on or before the date Employee executes this Agreement.
5.    It is further understood and agreed that as a condition of this Agreement, all rights under Section 1542 of the Civil Code of the State of California are expressly waived by Employee.  Such Section reads as follows:
“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”
Notwithstanding Section 1542, and for the purpose of implementing a full and complete release and discharge of the Released Parties, Employee expressly acknowledges that this Agreement is intended to include and does include in its effect, without limitation, all claims which Employee does not know or suspect to exist in Employee’s favor against the Released Parties at the time of execution hereof, and that this Agreement expressly contemplates the extinguishment of all such claims.  
6.    Employee acknowledges that he is entering into this Agreement in return for the consideration referred to in paragraph 1 above.  Employee further agrees that no promises, representations, or inducements have been made to him which caused him to sign this Agreement other than those which are expressly set forth above in paragraph 1.  This Agreement contains all of the terms, promises, representations, and understandings made between the parties regarding the subject matter of this Agreement; provided, however, that notwithstanding any provision of this Agreement to the contrary, Employee’s Proprietary Information and Inventions Agreement and Indemnification Agreement shall remain in full force and effect in accordance with their terms.  
7.    Employee agrees not to make any written or oral statements about Company or any of the Released Parties that are disparaging, including via internet and media.  Nothing in this Agreement shall preclude Employee from communicating or testifying truthfully (a) to the extent expressly required by law, (b) to any state or federal government agency, (c) in response to subpoena to testify issues by a court of competent jurisdiction, or (d) in any action to challenge or enforce the terms of this Agreement.

Exhibit 10.3

8.    Employee acknowledges that he has been paid all wages and Company benefits due and owing as of the Separation Date, less appropriate withholdings, including all accrued vacation pay, and is not owed any additional amounts, other than those to which Employee may be entitled under this Agreement.
9.    Employee represents that he has returned all Company property in his possession, whether in tangible or electronic form, including, without limitation, computers, phones, printers, furniture and all data, analysis and reports regarding Company and its business, operations, intellectual property, other assets and products or potential products.  
10.    This Agreement will be interpreted in accordance with the laws of the State of California.  All provisions of this Agreement are severable.  Accordingly, if any provision of this Agreement is found to be unenforceable, the other provisions shall remain fully valid and enforceable.  
11.    Employee acknowledges that:  (a) Company has advised Employee to consult with an attorney and tax advisor prior to the execution of this Agreement; (b) Employee has had the opportunity to discuss this Agreement with his attorneys and tax advisors, to the full extent he so desires; (c) Employee has carefully read and fully understands all of the provisions of this Agreement; (d) Employee fully understands that this Agreement releases all of his claims, both known and unknown, against Company and the Released Parties; (e) Employee signs this Agreement voluntarily; and (f) Employee has the capacity to enter into this Agreement.
12.    Employee understands that he has twenty-one (21) days to review and fully consider this Agreement before signing it, and that he may take as much of that period as he wishes prior to signing it.  Employee also understands that within seven (7) days of the date of signing this Agreement, he has the right to revoke this Agreement.  Any such revocation must be made in a signed writing delivered to Company, c/o John McDermott, Chief Executive Officer, within the seven (7) day revocation period.  If Employee timely revokes this Agreement, it shall not be effective or enforceable, Employee must immediately return the Severance Payment and any other benefits received by Employee prior to the expiration of such revocation period and Employee will not thereafter receive any other benefits described in this Agreement.  
[Remainder of Page Intentionally Left Blank; Signature Page Follows]

Exhibit 10.3

THE SIGNATURES BELOW MEAN THAT THE UNDERSIGNED HAVE READ THIS SEVERANCE AGREEMENT AND GENERAL RELEASE, FULLY UNDERSTAND SAME, AND AGREE AND VOLUNTARILY CONSENT TO ALL THE TERMS AND CONDITIONS CONTAINED IN THIS AGREEMENT.

	
		
	DATED:  December 31, 2012
	ROBERT KRIST

/s/ Robert Krist   
   (Signature)

	

DATED:  December 31, 2012
	

ENDOLOGIX, INC.

By: /s/ John McDermott   

John McDermott
Chief Executive Officer
 

Exhibit 10.3

EXHIBIT A
CONSULTING AGREEMENT
AGREEMENT FOR INDEPENDENT CONTRACTOR SERVICES
This Agreement for Independent Contractor Services (the “Agreement”) is entered into by and between Endologix, Inc. (the “Company”) and Robert J. Krist (the “Independent Contractor”).  
WHEREAS, the Company desires to retain Independent Contractor to perform services for the Company, as more particularly described herein; 
WHEREAS, Independent Contractor is in the business of providing such services and has agreed to provide such services pursuant to the terms and conditions set forth in this Agreement; 
NOW, THEREFORE, the parties agree as follows:  
1.Services to Be Performed.  The Independent Contractor will consult for, advise the Company on, and/or perform services relating to the Company’s accounting and finance operations.  The Independent Contractor also agrees to provide the Company with related services that may be reasonably requested from time to time by the Chief Executive Officer of the Company.  The Independent Contractor agrees to use his best efforts in the performance of his obligations under this Agreement.  The Independent Contractor shall cooperate with the Company’s personnel and shall observe all Company rules, including specifically those relating to discrimination and harassment, security and confidentiality.  
2.Proprietary Information and Inventions Agreement.  The Independent Contractor agrees to sign and abide by the Company’s Proprietary Information and Inventions Agreement, attached hereto as Exhibit A (“PIIA”).
3.Termination.  The term of this Agreement shall begin on January 1, 2013 (the “Start Date”) and expire on June 30, 2013 (the “Term”).  Notwithstanding the above, during the Term, this Agreement may be terminated by either party, at any time, with or without cause, and with or without prior notice.  In the event that this Agreement is terminated by the Company or the Independent Contractor, the Company shall have no further obligations to the Independent Contractor other than payment of outstanding invoices for work performed prior to the date of termination, if any; provided, however, that in the event that this Agreement is terminated by the Company, the Independent Contractor’s stock options and restricted common stock awards shall continue to vest through the end of the Term in accordance with paragraph 5 herein.
4.Independent Contractor Status.  It is the express intention of the parties hereto that the Independent Contractor is and at all times during the Term of this Agreement shall remain an independent contractor and not an employee, agent, joint venturer or partner of the Company for any purposes whatsoever.  
(a)Performance of Services.  The Company and the Independent Contractor shall mutually agree upon the time, place, methods, manner and means of performing the Services.  In performing the Services, the amount of time devoted by the Independent Contractor on any given day will be mutually agreed upon by the Company and the Independent Contractor.  

Exhibit 10.3

(b)Final Results.  In the performance of the Services, the Independent Contractor has the authority to control and direct the performance of the details of the Services, the Company being interested only in the results obtained.  However, the Services contemplated herein must meet the Company’s standards and approval.  
(c)Non-Exclusivity.  The Independent Contractor retains the right to contract with other companies or entities for consulting services or employment, subject to the terms of the PIIA.
(d)Taxes – Form 1099.  Since the Independent Contractor is an independent contractor, all compensation under this Agreement shall be paid to the Independent Contractor without the Company withholding any payroll taxes or deductions and shall be reported by the Company on Form 1099.
(e)No Employment Benefits.  The Independent Contractor shall not be entitled to any employment benefits made available to employees from time to time, other than those to which he may be entitled under the Severance Agreement and General Release signed by the parties.  The Independent Contractor shall be solely responsible for all state and federal income taxes, unemployment insurance, social security taxes and state disability insurance and for maintaining adequate workers’ compensation insurance coverage to the extent legally required.
(f)Compensation.  For the full and proper performance of this Agreement, the Company agrees to compensate the Independent Contractor as follows:  (1) continued vesting of the Independent Contractor’s stock options and restricted common stock awards through June 30, 2013, or the date of termination of this agreement by the Independent Contractor, whichever is earlier; and (2) $150.00 per hour for each hour of service to the Company in any calendar month in excess of 30 hours.  The Company does not guarantee any minimum hours of work.  Notwithstanding anything to the contrary herein, the Independent Contractor’s restricted stock unit awards shall not be subject to continued vesting under this Agreement.
5.Expenses.  Unless otherwise explicitly agreed to, the Independent Contractor shall be responsible for all business expenses incurred by the Independent Contractor in connection with, or related to, the performance of services under this Agreement.
6.No Authority to Bind.  The Independent Contractor shall have no power to obligate, commit or legally bind the Company in any manner whatsoever, and the Company shall have no liability to the Independent Contractor or to others for any acts or omissions of the Independent Contractor. 
7.Warranties.  The Independent Contractor will assume sole responsibility for his compliance with applicable federal and state laws and regulations, and shall rely exclusively upon his own determination, or that of its legal advisers, that the performance of services and the receipt of fees hereunder comply with such laws and regulations.
8.Non-Assignability of Contract.  This Agreement is personal to the Independent Contractor and he shall not have the right to assign any of his rights or delegate any of his duties without the express written consent of the Company.  
9.Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of California.

Exhibit 10.3

10.Severability.  In the event any provision of this Agreement shall be held invalid, the same shall not invalidate or otherwise affect in any respect any other term or terms of this Agreement, which term or terms shall remain in full force and effect.
11.Amendment.  This Agreement may be amended or modified only by a written instrument executed by both the Company and the Independent Contractor.
12.Counterparts.  This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which taken together shall constitute one and the same instrument.
13.Complete Agreement.  This Agreement, along with the PIIA, contains the entire understanding between the parties and supersedes, replaces and takes precedence over any prior or contemporaneous understanding or oral or written agreement between the parties respecting the subject matter of this Agreement; provided, that nothing in this Agreement is intended to alter the Severance Agreement and General Release signed by the parties.  There are no other representations, agreements, arrangements, nor understandings, oral or written, between the parties hereto relating to the subject matter of this Agreement which are not fully expressed herein.
This Agreement is executed and entered into on the date(s) set forth below.

ROBERT KRIST                    ENDOLOGIX, INC. 
/s/ Robert Krist                        By: /s/ John McDermott                  (Signature)                               (Signature)
Date:    December 31, 2012                Name:    John McDermott
Title:     Chief Executive Officer
Date:    December 31, 2012

Exhibit 10.3

EXHIBIT B
VESTED EQUITY AWARDS
		
	•
	stock option no. 1728

		
	•
	stock option no. 2091

		
	•
	restricted stock award no. 1521

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