Document:

exv10w1

 

Exhibit 10.1

LEVI STRAUSS & CO.

EXECUTIVE SEVERANCE PLAN

(Effective January 16, 2008)

 

 

Table of Contents

	 	 	 	 	 
	 	 	PAGE
	1. Definitions

	 	 	1	 
	 
	 	 	 	 
	2. Eligibility for Severance Payments and Severance Benefits

	 	 	2	 
	 
	 	 	 	 
	3. Amount and Form of Severance Payments and Severance Benefits

	 	 	3	 
	 
	 	 	 	 
	4. Administration

	 	 	6	 
	 
	 	 	 	 
	5. Amendment or Termination

	 	 	6	 
	 
	 	 	 	 
	6. Claims Procedure

	 	 	6	 
	 
	 	 	 	 
	7. Non-Compete

	 	 	7	 
	 
	 	 	 	 
	8. Non-Solicitation of Employees and Consultants

	 	 	8	 
	 
	 	 	 	 
	9. Confidential Information

	 	 	8	 
	 
	 	 	 	 
	10. Cooperation/Non Disparagement

	 	 	8	 
	 
	 	 	 	 
	11. Source of Payments

	 	 	8	 
	 
	 	 	 	 
	12. Inalienability

	 	 	8	 
	 
	 	 	 	 
	13. Recovery of Payments Made by Mistake

	 	 	9	 
	 
	 	 	 	 
	14. No Enlargement of Employment Rights

	 	 	9	 
	 
	 	 	 	 
	15. Applicable Law

	 	 	9	 
	 
	 	 	 	 
	16. Severability

	 	 	9	 
	 
	 	 	 	 
	17. Execution

	 	 	9	 

 

 

LEVI STRAUSS & CO.

EXECUTIVE SEVERANCE PLAN

(Effective May 1, 2004, and

Amended and Restated Effective January 16, 2008)

     Introduction. Levi Strauss & Co. (the “Company”) established the Levi Strauss & Co. Executive
Severance Plan (the “Plan”) effective May 1, 2004 for the benefit of certain eligible Executives of
the Company. By this instrument, the Company hereby amends and restates the Plan effective January
16, 2008.

     The purpose of the Plan is to provide an eligible Executive with Severance Payments and
Severance Benefits in the event that the Executive’s employment is involuntarily terminated under
circumstances entitling the Executive to Severance Payments and Severance Benefits, as determined
in the sole discretion of the Company. The Plan is an unfunded deferred compensation plan for a
select group of management or highly compensated employees that is intended to qualify for the
exemptions provided in ERISA Sections 201, 301 and 401 and for the alternative reporting method
provided in DOL Reg. §2520.104-23. This Plan supersedes all prior policies and practices of the
Company with respect to severance or separation pay for Executives whose employment is
involuntarily terminated after January 16, 2008. This Plan is the only severance program for such
Executives.

1. Definitions.

     1.1. “Company” means Levi Strauss & Co.

     1.2. “Comparable Position” means any job that has no negative impact on base salary.
To be a “Comparable Position” the different job must be performed at the same or geographically
proximate work site with the same or comparable work schedule, as determined in the sole discretion
of the Company.

     1.3. “Compensation” means (i) the sum of the Executive’s (a) annual base salary rate
in effect on his or her Termination Date, plus (b) target bonus amount under the Annual Incentive
Plan (“AIP”) for the fiscal year in which the termination is announced to the Executive
(ii) divided by 52. Compensation is solely used for purposes of determining an eligible
Executive’s Enhanced Severance Pay under the Plan.

	 	 	 	 	 
	
Compensation = annual base salary + AIP target bonus for the fiscal year in which the termination is announced

	52

     1.4. “Employee” means a common-law employee of the Company on the Home Office Payroll,
including an employee classified by the Company as a U.S. expatriate employee, who is not subject
to the overtime provisions of the Fair Labor Standards Act, and who is a Home Office Payroll
employee, and who has not signed an agreement that he or she is not entitled to benefits from the
Company. Employee does not include any person who is designated by the Company as an independent
contractor or a “leased employee,” within the meaning of Section 414(n) of the Internal Revenue
Code of 1986, as amended, or any individual who has entered into an independent contractor or
consultant agreement with the Company.

 

 

     1.5. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     1.6. “Executive” means a (i) WLT Member, or (ii) an Employee whose position is
classified under the Executive Band or Leader Band in the Company’s World-Wide Compensation Plan.

     1.7. “General Release Agreement” means a legally binding document in which an Employee
waives any and all claims against the Company (as defined in the General Release Agreement) related
to his or her employment or separation from employment. Whether or not an Executive chooses to
sign the General Release Agreement is completely at his or her discretion.

     1.8. “Plan” means the Levi Strauss & Co. Executive Severance Plan, as set forth in
this instrument and as hereafter amended.

     1.9. “Severance Payment(s)” or “Severance Pay” means the payments to an
eligible Executive pursuant to Section 3 on account of his or her involuntary termination from the
Company.

     1.10. “Termination Date” means the final day of employment with the Company which date
shall be communicated by the Company to the Executive.

     1.11. “WLT Member” means each Employee identified on Appendix A.

     1.12. “Year of Service” means a twelve-month period of employment beginning on the
later of the Executive’s date of hire or most recent date of rehire. Years of Service are
calculated in full twelve month periods with no credit for partial years.

2. Eligibility for Severance Payments and Severance Benefits.

     2.1. General Eligibility. Except as otherwise provided in the Plan, an Executive is
entitled to Severance Payments and Severance Benefits under the Plan only if his or her employment
with the Company is involuntarily terminated by action of the Company after January 16, 2008, on
account of a reduction in force, layoff or position elimination.

     2.2. Exclusions. An Executive is not eligible for Severance Payments and Severance
Benefits if he or she:

     (a) Voluntarily resigns before his or her Termination Date;

     (b) Is terminated because of failure to return from an approved leave of absence;

     (c) Resigns or is involuntarily terminated because the Company has determined that he
or she violated any policy, procedure or rule of the Company, engaged in dishonest or
wrongful conduct, committed any crime or performed his or her duties in an unacceptable
manner;

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     (d) Resigns or is terminated after declining to accept an offer of a Comparable
Position with the Company;

     (e) Ceased to be an Executive as defined by the Plan;

     (f) Terminates employment with the Employer by reason of death;

     (g) Receives consulting fees from the Company following his or her Termination Date;

     (h) Is entitled to long-term disability benefits from the Company-sponsored long-term
disability plan as of the date the involuntary termination would have occurred had the
individual been actively at work on such date; or

     (i) Has an individual written agreement with the Company that provides for any form of
severance, separation, or special retirement program.

     2.3. Certain Corporate Transactions. Unless, and only to the extent expressly
authorized by the Company or set forth in this Plan, no Severance Payments or Severance Benefits
are payable under the Plan to an Executive in the event of the sale or other disposition of the
Company, any affiliate or any assets or stock of either, if the Executive (i) continues to be
employed by the Company, its successor or an affiliate on or after the date of such sale or other
disposition, (ii) is offered a Comparable Position with the acquiring entity or any of its
affiliates, or (iii) is offered a Comparable Position with an entity that was an affiliate of the
Company immediately prior to the sale or other disposition.

3. Amount and Form of Severance Payments and Severance Benefits.

     3.1. Payment Amount. An eligible Executive shall be entitled to receive the following
Severance Payments:

     (a) Base Severance Pay: Subject to Section 3.3, except as otherwise provided
in this Plan, an eligible Executive will receive two weeks of his or her base salary
beginning on the date he or she is notified that his or her employment is terminated. If
the Company requests, the eligible Executive will remain in his or her position during this
two (2) week period.

     (b) Enhanced Severance Pay: In exchange for providing the Company with an
enforceable General Release Agreement, in a form acceptable to the Company, an Executive who
is involuntarily terminated from the Company, shall be eligible to receive Enhanced
Severance Pay and Severance Benefits, subject to Section 3.3. The consideration for the
voluntary General Release Agreement shall be the Enhanced Severance Pay and Severance
Benefits the eligible Executive would not otherwise be eligible to receive. An eligible
Executive will receive Enhanced Severance Pay in accordance with the following table:

3

 

	 	 	 
	WLT Member

	 	78 weeks of Compensation
	 
	 	 
	Executive Band

	 	26 weeks of Compensation, plus two additional weeks of
Compensation for each Year of Service in excess of five,
limited to a maximum period of 52 weeks of Compensation.
	 
	 	 
	Leader Band

	 	26 weeks of Compensation, plus two additional weeks of
Compensation for each Year of Service in excess of five
Years of Service, limited to a maximum period of 52 Weeks
of Compensation.

     3.2. Severance Benefits.

     (a) If an Executive and/or his or her covered dependents elect(s) to receive medical
coverage continuation through Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”), the Company will pay the same percentage of the monthly cost of his or her COBRA
medical coverage as it paid for Executive’s medical coverage during his or her active
employment for the duration of the Executive’s severance payment period under Section 3.1
above, up to a maximum coverage period of 18 months.

     During the Company-subsidized COBRA coverage period, Executive will be responsible for
payment of the remainder of the cost of his or her COBRA medical coverage and for the full
cost of any dental or vision coverage elected by the Executive. All periods of
Company-subsidized coverage are counted toward the 18-month COBRA entitlement. After the
Company-subsidized coverage period ends, the Executive will be responsible for payment of
his or her entire COBRA premium. Continuation of COBRA coverage will not extend beyond the
date on which a terminated Executive becomes eligible for coverage under another group
health plan unless the new plan has a pre-existing condition limitation or the Executive is
entitled to Medicare.

     (b) The Company will pay the cost of premiums under its standard basic life insurance
program of $10,000 for the same duration that it subsidizes the COBRA coverage in subsection
(a) above.

     (c) If an Executive retires and becomes covered by Company retiree health benefits, the
Company will fully pay for retiree medical coverage for the same duration that it subsidizes
the COBRA coverage set forth in subsection (a) above. For purposes of Section 3.2(a) and
(c), the continued medical payments are designated as separate payments for purposes of the
exemption for medical expense reimbursements under Treasury Regulation Section
1.409A-1(b)(9)(v)(B).

     (d) Eligible Executives may be entitled to receive reasonable outplacement counseling
and job search benefits. In no event shall the Company provide such outplacement benefits
to an eligible Executive later than December 31 of the second year following his or her
Termination Date. An Executive may not receive cash in lieu of the available outplacement
services.

4

 

     3.3. Conditions and Limitations on Severance Payments and Severance Benefits.
Enhanced Severance Pay and Severance Benefits are specifically conditioned upon the Executive
signing and not later revoking a General Release Agreement at a time and in a manner to be
determined by the Company. Under no circumstances will any Enhanced Severance Pay or Severance
Benefits be made to an Executive who elects not to sign, or who revokes, a General Release
Agreement.

     3.4. Form and Timing of Severance Payments and Severance Benefits.

     (a) Severance Payments will be paid in installments in accordance with the Company’s
regular payroll payment schedule following the eligible Executive’s Termination Date,
however any Enhanced Severance Pay and Severance Benefits which become available will be
provided only after the seven (7) day revocation period for a signed General Release
Agreement has passed.

     (b) If the Company reemploys an eligible Executive who is receiving Enhanced Severance
Pay and Severance Benefits under the Plan, the individual shall become ineligible and such
pay and benefits shall cease effective as of the reemployment date.

     (c) If an Executive dies before Severance Payments are completed, any remaining
Severance Payments will be made to the Executive’s estate in a lump-sum within 60 days after
the Company is provided with proof of the Executive’s death.

     3.5. Plant Shut-Down or Mass Layoff. If the Executive is laid off or discharged
because of a plant shut-down or mass layoff to which the Worker Adjustment and Retraining Notice
Act of 1988 (“WARN”) applies, Severance Payments and Severance Benefits shall not be available,
except as provided in this section. The Company shall provide notice of termination of employment,
or pay in lieu of notice, or a combination of notice and pay in lieu of notice in accordance with
the provisions of WARN. The amount of Severance Payments to which the Executive is entitled under
the Plan shall be determined by subtracting the number of days’ pay in lieu of notice he or she
receives pursuant to WARN from the amount of Severance Payments to which he or she would be
otherwise entitled under this Section 3. Likewise, the period of Company-subsidized medical
coverage under Section 3.2 is reduced by the time during which the eligible Executive received
medical coverage during the WARN Notice Period.

     3.6. General Release Agreement. The General Release Agreement shall be furnished to
an eligible Executive along with a written explanation regarding the General Release Agreement. It
is completely within the eligible Executive’s own discretion as to whether he or she elects to sign
the applicable General Release Agreement. An eligible Executive is encouraged to review the
applicable General Release Agreement with his or her personal attorney at his or her own expense,
if he or she so desires.

     In order to receive Enhanced Severance Pay and Severance Benefits, an eligible Executive must
sign, date and return the General Release Agreement to the Company within forty-five (45) days from
the date he or she receives the General Release Agreement or as of the date such Executive
separates from employment with the Company and is no longer on the

5

 

Company payroll, whichever is later. If an eligible Executive elects to sign the General
Release Agreement, he or she then has seven (7) days from the date of such signing to revoke the
signed General Release Agreement. Any such revocation must be in writing and must be received by
the Company or its designee within the seven (7) day revocation period. If an eligible Executive
elects to revoke his or her signed General Release Agreement, such Executive shall not receive any
Enhanced Severance Pay or Severance Benefits.

     3.7. Withholding. The Company will withhold from all Severance Payments and Severance
Benefits all required federal, state, local and other taxes and any other payroll deductions
required.

4. Administration.

     The Company has the sole and unlimited discretion to interpret the terms of the Plan and to
make all determinations about eligibility and payment of benefits. All decisions of the Company,
any action taken by the Company with respect to the Plan and within the powers granted to the
Company under the Plan, and any interpretation by the Company of any term or condition of the Plan,
are conclusive and binding on all persons, and will be given the maximum possible deference allowed
by law. The Company may delegate and reallocate any authority and responsibility with respect to
the Plan.

5. Amendment or Termination.

     The Company reserves the right, in its sole and unlimited discretion, to amend or terminate
the Plan at any time by action of the Company’s Chief Executive Officer, or his or her designee,
without prior notice to any Executive.

6. Claims Procedure.

     (a) Any person who believes he or she is entitled to any payment under the Plan
(“Applicant”) may submit a claim in writing to the Company. Any such claim should be sent
to the Health & Welfare Plans Administrative Committee (the “Committee”), c/o Levi Strauss &
Co. P.O. Box 7215, San Francisco, CA 94120, Attention: Vice President, Compensation,
Benefits & HR Services. If a claim is denied in whole or in part, the Committee shall
furnish the Applicant within 90 days after receipt of such claim with a written notice which
specifies the reason for the denial, refers to the pertinent provisions of the Plan on which
the denial is based, describes any additional material or information necessary for properly
completing the claim and explains why such material or information is necessary, and
explains the claim review procedures of this Section 6, including the Applicant’s right to
file suit in accordance with subsection (d) if the claim is denied following review. The 90
day period for responding to a claim may be extended by up to an additional 90 days if the
Applicant is given a written notice of the extension, including an explanation of the reason
for the extension and an estimate of when the claim will be resolved, by the end of the
initial 90 day period.

     (b) If within 60 days after receipt of a notice of denial pursuant to subsection (a),
the Applicant so requests in writing, the Committee shall review such decision. The
Committee’s decision on review shall be in writing, and shall include specific reasons for

6

 

the decision, written in a manner calculated to be understood by the Applicant, and
shall include specific references to the pertinent provisions of the Plan on which the
decision is based, and shall explain the Applicant’s right to file suit in accordance with
subsection (d). It shall be delivered to the Applicant within 60 days after the request for
review is received, unless extraordinary circumstances require a longer period, in which
event the 60 day period may be extended by up to an additional 60 days if the Applicant is
given a written notice of the extension, including an explanation of the reason for the
extension and an estimate of when the appeal will be resolved, by the end of the initial 60
day period.

     (c) The provisions of this Section 6 are intended to comply with the requirements of
ERISA Section 503 and the regulations issued thereunder, and shall be so construed. In
accordance with such regulations, each Applicant shall be entitled, upon written request and
without charge, to review and receive copies of all material relevant to his claim within
the meaning of Department of Labor Regulations 29 C.F.R. Section 2560.503-1(m)(8), and to be
represented by a qualified representative.

     (d) In further consideration of being permitted to participate in the Plan, each
eligible Executive agrees on behalf of himself, and all other persons claiming through him,
that he will not commence any action at law or equity (including without limitation any
action under ERISA Section 502), or any proceeding before any administrative agency, for
payment of any benefit under this Plan without first filing a written claim for such benefit
and appealing the denial of that claim in accordance with the provisions of this Section 6,
and in any event not more than one hundred eighty (180) days after the appeal is denied in
accordance with subsection (b).

7. Non-Compete.

     While employed by the Company and for the shorter of (i) the period the Executive receives
Enhanced Severance Pay, or (ii) a 12 month period immediately following Executive’s Termination
Date, the Executive will not, directly or indirectly for the Executive’s own account or account of
others, own, manage, operate, control or participate in the ownership, management, operation or
control of, or be connected as a principal, employee, officer, director, independent contractor,
representative, stockholder, financial backer, partner, advisor, manager, consultant or in any
other individual or representative capacity with, any business which engages in any business within
any market area served by the Company or any of its affiliates, including VF Corporation, Haggar,
Tropical Sportswear International Corporation, CK jeans, Guess, The Limited, Savane International
Corporation, Nautica Enterprises, Liz Claiborne, Polo Jeans Company, The Gap and any jeanswear or
khakiwear business in any apparel company in the United States (a “Competing Business”). Ownership
for personal investment purposes of less than 5% of the voting stock of any publicly held Competing
Business shall not constitute a violation hereof. Subject to any period limitation imposed by a
particular jurisdiction, the Company will enforce this provision in jurisdictions where such a
restraint is legally permissible.

7

 

8. Non-Solicitation of Employees and Consultants.

     While employed by the Company and for the 12 month period immediately following the
Executive’s Termination Date, the Executive will not directly or indirectly: (i) solicit or induce
any employee or consultant of the Company to leave employment with the Company, or (ii) offer
employment to any employee employed by the Company or consultant working with the Company as of the
Executive’s Termination Date. Subject to any period limitation imposed by a particular
jurisdiction, the Company will enforce this provision in jurisdictions where such a restraint is
legally permissible.

9. Confidential Information.

     An eligible Executive may have access to trade secrets, information regarding the Company’s
operations, product lines, costs, operational processes, strategic planning, financial data,
marketing plans, sales forecasts, customers, suppliers, personnel and other confidential and
proprietary information (hereinafter “Confidential Information”) with regard to the Company’s
business. Recognizing that the disclosure or improper use of such Confidential Information will
cause serious and irreparable injury to the Company, an eligible Executive with such access
acknowledges that (i) he or she will not at any time, directly or indirectly, disclose Confidential
Information to any third party or otherwise use such Confidential Information for his or her own
benefit or the benefit of others, (ii) payment of Enhanced Severance Pay and Severance Benefits
under the Plan shall cease if the Executive discloses or improperly uses such Confidential
Information, and (iii) retention of Enhanced Severance Pay and Severance Benefits already received
under the Plan is conditioned upon the Executive not disclosing or improperly using such
Confidential Information.

10. Cooperation/Non Disparagement.

     Each eligible Executive shall cooperate with the Company and its legal counsel in connection
with any current or future investigation or litigation relating to any matter to which the eligible
Executive was involved or of which the Executive has knowledge or which occurred during the
Executive’s employment. Such assistance shall include, but not be limited to, depositions and
testimony and shall continue until such matters are resolved. In addition, an Executive shall not
in any way disparage the Company nor any person associated with the Company to any person,
corporation, or other entity.

11. Source of Payments.

     All Severance Payments will be paid in cash from the general funds of the Company; no separate
fund will be established under the Plan; and the Plan will have no assets. Any right of any person
to receive any payment under the Plan will be no greater than the right of any other unsecured
creditor of the Company.

12. Inalienability.

     In no event may any Executive sell, transfer, anticipate, assign or otherwise dispose of any
right or interest under the Plan. At no time will any such right or interest be subject to the
claims of creditors nor liable to attachment, execution or other legal process.

8

 

13. Recovery of Payments Made by Mistake.

     An eligible Executive shall be required to return to the Company any Severance Payment, or
portion thereof, made by a mistake of fact or law.

14. No Enlargement of Employment Rights.

     Neither the establishment or maintenance of the Plan, the payment of any amount by the Company
nor any action of the Company shall confer upon any individual any right to be continued as an
Employee nor any right or interest in the Plan other than as provided in the Plan. Other than an
Employee who has a written agreement to the contrary signed by the President, Chief Executive
Officer or a Senior Vice President of the Company, every Employee is an employee-at-will whose
employment with the Company may be terminated by the Company or the Employee at any time with or
without cause and with no notice.

15. Applicable Law.

     The provisions of the Plan will be construed, administered and enforced in accordance with
ERISA and, to the extent applicable, the laws of the State in which the Executive resides on his or
her Termination Date.

16. Severability.

     If any provision of the Plan is held invalid or unenforceable, its invalidity or
unenforceability will not affect any other provision of the Plan, and the Plan will be construed
and enforced as if such provision had not been included.

17. Execution.

     IN WITNESS WHEREOF, Levi Strauss & Co., by its duly authorized officer, has executed the Plan
on the date indicated below.

	 	 	 	 	 
	 	 	LEVI STRAUSS & CO.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John Anderson
	 

	 	 	 	 
	 
	 

	 	Its:
	 	Chief Executive Officer
	 
	 

	 	Dated:
	 	January 16, 2008

9

 

APPENDIX A

For purposes of this plan, the following positions are designated as Worldwide Leadership Team
members (WLT), assuming the employee in the position is also a U.S. Home Office Payroll employee at
the time of termination:

President and Chief Executive Officer

President, Levi Strauss North America

President, Levi Strauss Europe

President, Asia Pacific Division

Senior Vice President and Chief Financial Officer

Senior Vice President and Chief Information Officer

Senior Vice President, General Counsel

Senior Vice President, Global Sourcing

Senior Vice President, Strategy and Worldwide Marketing

Senior Vice President, Worldwide Human Resources

Vice President, Global Communications

Vice President, Worldwide Community Affairs

President and General Manager,
Dockers® United States — only applicable to the incumbent in this position as of January 16, 2008.

This list is subject to change and may be revised at any time.

 

 

LEVI STRAUSS & CO.

EXECUTIVE SEVERANCE PLAN

GENERAL RELEASE AGREEMENT

To receive Enhanced Severance Pay and Severance Benefits under the Levi Strauss & Co. Executive
Severance Plan (the “Plan”), you must agree to sign and not later revoke this General Release
Agreement.

You and Levi Strauss & Co. (“LS&CO.”) hereby agree as follows:

	1.	 	Generally. If you sign this General Release Agreement, you will receive the Enhanced
Severance Pay and Severance Benefits under the Plan for which you are eligible, as set forth
in the terms of the Plan.
	 
	2.	 	General Release.

	 	a.	 	In consideration for the Enhanced Severance Pay and Severance Benefits provided
to you under the Plan, you, on your own behalf and on behalf of your heirs, executors,
administrators, attorneys and assigns, hereby unconditionally and irrevocably release,
waive and forever discharge LS&CO. and its predecessors, successors, assigns,
subsidiaries, related entities, officers, directors, voting trustees, shareholders,
employees, agents, attorneys and insurers (collectively referred to as the “Company”)
from any and all claims, suits, actions, causes of action, demands, rights, damages,
costs, expenses, attorney’s fees, and compensation in any form whatsoever, whether now
known or unknown, which you have or may have (up through and including the date on
which you sign this Agreement) against the Company on account of or in any way related
to your employment by the Company or your separation therefrom, including but not
limited to any and all claims for damages or injury, claims for wages, employment
benefits, tort claims, and claims under Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Civil Rights Act of 1866, the Age Discrimination in
Employment Act of 1967 (“ADEA”), the Employee Retirement Income Security Act of 1974,
the National Labor Relations Act, the Fair Labor Standards Act, the Rehabilitation Act
of 1973, the Family and Medical Leave Act of 1993, the Americans with Disabilities Act
of 1990, and under any other federal, state or local law, statute (including but not
limited to, the California Fair Employment & Housing Act or the California Labor Code),
ordinance, guideline, regulation, order or common-law principle relating to employment,
employment contracts, wrongful discharge or any other matter.
	 
	 	b.	 	Notwithstanding the above General Release of all claims, you are not waiving or
releasing: (i) claims for workers’ compensation; (ii) claims for medical conditions
caused by exposure to hazards during your employment of which you were not aware before
or at the time you sign this Agreement; (iii) claims arising after the date on which
you sign this Agreement; (iv) claims for vested or accrued benefits under a Company’s
employee benefit plan; or (v) your right to file a charge with the Equal Employment
Opportunity Commission (“EEOC”) or to

 

 

	 	 	 	participate in an EEOC investigation. You are, however, waiving all rights to
recover money or other individual relief in connection with any EEOC charge or
investigation.

	3.	 	California Based Employees. You also waive, release and promise never to assert any
rights and benefits afforded by Section 1542 of the California Civil Code and any similar law
of any state or territory of the United States and do so understanding and acknowledging the
significance and consequences of such specific waiver of said provisions of law. Section
1542 of the California Civil Code states 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 General Release, which, if known to him or her must
have materially affected his or her settlement with the Debtor.”

	4.	 	Covenant Not to Sue. A “covenant not to sue” is a legal term which means you promise
not to file a lawsuit in court. It is different from the General Release of claims contained
in Section 1 above. Besides waiving and releasing the claims covered by Section 1, you
further promise and represent that: (a) you have no pending lawsuits against the Company with
any municipal, state, or federal court or non-governmental entity; and (b) you will not sue
the Company for any reason whatsoever relating to anything that has happened through the date
of this General Release Agreement. If you break this promise, you will be required to repay
all but $200 of Enhanced Severance Pay and LS&CO. (and/or any Company) shall be excused from
providing any further Severance Benefits under the Plan. Alternatively, at the Company’s
option, you will be liable for the payment of all legal costs, including reasonable attorneys’
fees, paid by the Company in connection with any lawsuit you file. However, this promise not
to sue does not preclude you from bringing a lawsuit to challenge the enforceability of this
General Release Agreement under the ADEA.
	 
	5.	 	No Admission. The parties acknowledge and agree that this General Release Agreement
does not constitute, is not intended to be, and shall not be construed, interpreted or treated
in any respect as, an admission of liability or wrongdoing by either party for any purpose
whatsoever. Further, each party acknowledges and agrees that there has been no determination
that either party has violated any federal, state or local law, regulation, order or other
legal principle or authority. You further acknowledge that no precedent, practice, policy or
usage shall be established by this General Release Agreement or the Enhanced Severance Pay and
Severance Benefits offered under the Plan.
	 
	6.	 	Consequences of Other Breach. In consideration for and as a condition to the
Enhanced Severance Pay and Severance Benefits, you agree that if you breach the (1)
Non-Compete, (2) Non-Solicitation, (3) Confidential Information, or (4) Cooperation/Non
Disparagement provisions in the Plan then (a) LS&CO. (and/or any Company) shall be entitled to
apply for without bond and receive an injunction to restrain such breach, (b) LS&CO. (and/or
any Company) shall not be obligated to continue payment of the Enhanced Severance Pay and
availability of Severance Benefits to you, and (c) you shall be obligated to pay to LS&CO.
(and/or any Company) its costs and

2

 

	 	 	expenses in enforcing the (1) Non-Compete, (2) Non-Solicitation, (3) Confidential
Information, or (4) Cooperation/Non Disparagement provisions in the Plan (including court
costs, expenses and reasonable legal fees). The Company will enforce the Plan’s Non-Compete
and Non-Solicitation provisions in jurisdictions where, and to the extent, such a restraint
is legally permissible.
	 
	7.	 	Time To Consider Agreement. You acknowledge that you have been given at least 45
days to thoroughly consider this General Release Agreement.
	 
	8.	 	Attorney Consultation. You acknowledge that you have been advised in writing to
consult with an attorney at my own expense, if desired, prior to signing this General Release
Agreement.
	 
	9.	 	Time To Revoke Agreement. You understand that you may revoke this General Release
Agreement within seven (7) days after its signing and that any revocation must be made in
writing and submitted within such seven day period by registered mail, return receipt
requested, to Greg Holmes, Vice President of Compensation, Benefits & HR Services, 1155
Battery Street, San Francisco, CA 94111. You further understand that if you revoke this
General Release Agreement, you shall not receive the Enhanced Severance Pay nor the Severance
Benefits.
	 
	10.	 	Consideration For Agreement. You also understand that the Enhanced Severance Pay and
Severance Benefits which you will receive in exchange for signing and not later revoking this
General Release Agreement are in addition to anything of value to which you already are
entitled.
	 
	11.	 	Release Of Unknown Claims. YOU FURTHER UNDERSTAND THAT THIS GENERAL RELEASE
AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS TO DATE.
	 
	12.	 	Severability. You acknowledge and agree that if any provision of this General
Release Agreement is found, held or deemed by a court of competent jurisdiction to be void,
unlawful or unenforceable under any applicable statute or controlling law, the remainder of
this General Release Agreement shall continue in full force and effect.
	 
	13.	 	Governing Law. This General Release Agreement in all respects shall be interpreted,
enforced and governed under applicable federal law and in the event reference shall be made to
State law, the internal laws of the State in which the Executive resides on his or her
termination date will apply.
	 
	14.	 	Acknowledgement. You further acknowledge and agree that you have carefully read and
fully understand all of the provisions of this General Release Agreement and that you
voluntarily enter into this General Release Agreement by signing below.

[signature page follows]

3

 

	 	 	 
	 

	 	 
	 

	 	(Name of eligible Executive — Please Print)
	 
	 	 
	 

	 	 
	 

	 	(Signature of eligible Executive)
	 
	 	 
	 

	 	 
	 

	 	(Date)
	 
	 	 
	 

	 	PLEASE RETURN TO:
	 
	 	 
	 

	 	[Insert Name, Title and Address]

4exv10w1

 

Exhibit 10.1

January 15, 2008

Mr. Peter Osborne

1737 Fabian Drive

San Jose, CA 95124

Dear Peter:

On behalf of VNUS Medical Technologies, Inc. (“VNUS” or the “company”), I am pleased to offer you
the position of Chief Financial Officer and Vice President of Finance & Administration, reporting
to the President and CEO. In making this offer we are expressing our enthusiastic support of your
abilities to help VNUS become a great success. You bring a skill set to this company that is
essential to achieving our goals, both short and long term. The purpose of this letter is to offer
you a position and detail the terms of your employment.

	 	 	 
	Job Title:

	 	CFO & Vice President of Finance and Administration
	 
	 	 
	Starting Date:

	 	Friday, January 18, 2008, or an earlier mutually agreed date.
	 
	 	 
	Salary:

	 	$280,000, payable in accordance with the company’s standard payroll policies (currently bi-monthly). Your
initial performance review will be performed with an effective date of January 1, 2009. You are also eligible
to participate in the company’s 2008 officer bonus plan for a target bonus of approximately 35 percent of annual
salary, pro-rated to your date of hire.
	 
	 	 
	Stock:

	 	Subject to Board approval, you will be granted 20,000 restricted stock units at $0.00 per share as soon as
practicable during the open trading window following your first day of employment. These RSUs will vest 25%
each year. The first vesting will occur on the first anniversary of your date of hire, for a total vesting period
of 4 years, so long as you are an employee of the company.
	 
	 	 
	 

	 	Subject to Board approval, you will be granted 60,000 Stock Options as
soon as practicable during the open trading window following your first
day of employment. These options will be exercisable at the fair market
value of the shares on the date of the grant, and will vest 25 percent
(15,000 shares) 12 months from your date of hire, and 1/36th (1250 shares)
of the remaining balance for each month thereafter for an additional 36
months, for a total vesting period of 4 years. These options may be
exercised up to 10 years from the date of grant so long as you are an
employee of the company.

 

 

	 	 	 
	 

	 	Subject to Board approval, you will be granted a contingent performance
award totaling not less than 10,000 RSUs vesting annually at 25 percent
over four years. The criteria for achievement of the contingent award
will be determined by the Compensation Committee.
	 
	 	 
	Benefits:

	 	The company will provide to you, medical, dental and vision coverage beginning the first
of the month after your start date. For an additional monthly charge, coverage for your
spouse and children may also be added. You are eligible to participate in the company’s 401(k)
plan beginning the first of the month after your start date. The company has a discretionary
match of one-half of the first six percent of base salary deferred into the VNUS 401(k) plan,
capped at $2500.
	 
	 

	 	Life insurance coverage equal to twice your annual salary is provided to
you as part of the employee benefits program. Long-term disability
insurance is also provided after one month of employment. To help
employees pay for healthcare and dependent care expenses, the company has
adopted a flexible spending/reimbursement accounts program. This allows
you to pay for out-of-pocket medical, dental, and vision costs, as well as
dependent care expenses, with pre-tax wages
	 
	 	 
	Paid Time Off:

	 	You are eligible to accrue 18 days of Paid Time Off during your first year of
employment. Two days of PTO accrual are added for each year of service up to a maximum of 28
days per year. You may accumulate up to 40 days of banked PTO-time. In addition, in 2008, the
company will be closed for 13 holidays including the days from December 24 to December 31.

This offer is contingent upon your executing VNUS’ Proprietary Information and Inventions
Agreement for new employees, signing the Arbitration Agreement, and providing the company with the legally required proof of your identity and authorization to work in
the United States within 72 hours of your first day of employment. VNUS is an at-will employer.
Employment-at-will may be terminated with or without cause, and with or without notice at any time,
by the employee or the company.

This offer will remain in effect through January 16, 2008. If you do accept, and I sincerely hope
you will, please fax an endorsed letter to HR’s confidential fax at 408-365-8489, and return an
original signed copy by mail shortly thereafter.

Peter, we believe you will be an outstanding addition to the company. We have an exciting
opportunity ahead of us to which you can make a significant contribution. We look forward to
working with you in a productive and mutually beneficial relationship.

	 	 	 	 	 
	Sincerely,	 	Foregoing terms and conditions hereby accepted:
	 
	 	 	 	 
	/s/ Brian E. Farley

	 	/s/ Peter Osborne	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	Brian E. Farley

	 	Peter Osborne
	 	Date
	President and
	 	 	 	 
	Chief Executive Officer

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