Document:

exv10w1

Exhibit 10.1

SEVERANCE AGREEMENT AND RELEASE OF CLAIMS

     This Severance Agreement and Release of Claims (“Agreement”) is made and entered into
on February 22, 2010 by and between Roger A. Derse (“Executive”) and White Electronic
Designs Corporation and all of its affiliated companies and divisions (collectively referred to as
“Company”) and is intended by the parties hereto to settle and dispose of all claims and
liabilities that exist between Executive and Company as indicated herein.

RECITALS

     A. Executive is the Senior Vice President and Chief Financial Officer.

     B. Executive and the Company are parties to that certain Executive Employment Agreement dated
January 21, 2009 (the “Employment Agreement”).

     C. Executive hereby tenders his resignation which will be effective as of March 1, 2010 (the
“Resignation Date”). Executive has resigned from his position as Senior Vice President and
Chief Financial Officer and any other offices he holds with the Company and with each of Company’s
subsidiaries and affiliated entities on that date.

     D. By entering into this Agreement, the parties mutually and voluntarily agree to be legally
bound by the terms set forth below.

COVENANTS

     NOW, THEREFORE, for valuable consideration, the parties agree as follows:

I.

     A. Within three days of the Resignation Date, the Company agrees to pay Executive the cash
sum of forty two thousand nine hundred eighty dollars and thirty five cents ($42,980.35), less
all lawfully required withholdings, which represents (i) his accrued but unused vacation, and
(ii) any of his earned but not paid Base Salary (as defined in the Employment Agreement) through
the Resignation Date. The Company will also pay Executive appropriate expense reimbursement
requests, if any, timely and properly submitted by Executive (with supporting documentation as
required by the Company consistent with existing Company policy and procedures).

     B. In addition, for a period of eighteen (18) months from the Resignation Date, the Company
shall continue to pay Executive’s Base Salary (as defined in the Employment Agreement), less all
lawfully required withholdings; provided, however that the Company shall not be required to make
any payments under this Section I.B until the expiration of the Revocation Period (as defined in
Section VIII below), assuming that Executive has not revoked his signature during that Revocation
Period.

 

 

     C. If the Executive elects to continue his group health plan coverage (medical and dental)
under Consolidated Omnibus Budget Reconciliation Act
(“COBRA”), the Company shall pay Executive’s COBRA continuation premiums until the earlier
of (i) the date Executive is eligible to receive group health benefits from another employer or
(ii) eighteen (18) months after the Resignation Date.

     D. The Company and Executive agree to the following concerning outstanding grants of stock
options and restricted stock to Executive:

	 	•	 	Executive agrees and represents that immediately prior to the Resignation
Date, the following grants are his only existing option grants: (i) 50,000
options granted on May 26, 2004 at a strike price of $6.38, (ii) 10,000 options
granted on December 15, 2004 at a strike price of $6.45, and (iii) 40,000 options
granted on September 12, 2006 at a strike price of $4.70 (together, the “Existing
Options”). The parties also agree that other than 5,834 shares under the option
grant set forth in clause (iii) above, each of these options was fully vested as
of the date immediately prior to the date of this Agreement. Assuming that
Executive has not revoked his signature during the Revocation Period, the
Existing Options shall be fully vested as of the day following the end of the
Revocation Period, exercisable until the tenth (10th) anniversary of
the grant date of such option (and this Agreement shall be deemed an amendment of
all such stock option grants or award agreements for the purpose of the extension
of the period of exercise provided for in this clause); provided, however, that
if the Company determines in good faith that the extension of any of the Existing
Options’ exercise periods results in the options being considered deferred
compensation subject to Section 409A of the Internal Revenue Code, such extension
shall be shortened or nullified as determined in good faith by the Company. In
the event that Executive revokes his signature during the Revocation Period, the
exercisability and vesting of these Existing Options shall operate pursuant to
the applicable option grant or award agreement and Company equity plan.
	 
	 	•	 	Executive agrees and represents that he has 25,000 shares of unvested
restricted stock relating to the Company’s common stock pursuant to one (1)
outstanding grant with a grant date of December 10, 2008 (the “Unvested RSAs”).
Assuming that Executive has not revoked his signature during the Revocation
Period, such Unvested RSAs shall automatically accelerate and be fully vested as
of the day following the end of the Revocation Period. In the event that
Executive revokes his signature during the Revocation Period the vesting of these
Unvested RSAs shall operate pursuant to the applicable grant agreement and
Company equity plan.
	 
	 	•	 	Executive agrees that any other unvested right to receive Company securities,
if any, shall terminate on the Resignation Date.

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     E. Executive acknowledges that upon receipt of the above, he is not owed any further money
or any further equity compensation by the Company. Executive also agrees to reasonably cooperate
to the extent required with respect to timing of payments hereunder for purposes of complying
with Section 409A of the Internal Revenue Code.

     F. Effective as of the Resignation Date, Executive hereby resigns his position as an
employee and executive officer of the Company, and any other positions he holds with the Company
and with each of Company’s subsidiaries and affiliated entities and the Company hereby accepts
the resignation(s). At the request of Company, Executive agrees to execute any documents
reasonably requested to effectuate or to facilitate his resignation(s) and the transition of such
positions or responsibilities to other employees of the Company. Executive also agrees that his
resignation and departure from his position(s) from the Company is not because of a disagreement
with the Company on any matter relating to the Company’s operations, policies or practices,
including those that would require disclosure under Item 5.02 of Form 8-K.

II.

     In consideration of the compensation and covenants set forth in Paragraph I above and the
covenants herein:

     A. Executive, on behalf of himself, his marital community if any, and his heirs or assigns,
expressly releases Company and its subsidiaries, affiliated companies, directors, officers, all
of their agents, employees, and attorneys; and all their predecessors and successors
(collectively the “Released Entities”) from ANY AND ALL RIGHTS, CLAIMS, DEMANDS, CAUSES
OF ACTION, OBLIGATIONS, DAMAGES, PENALTIES, FEES, COSTS, EXPENSES, AND LIABILITIES OF ANY NATURE
WHATSOEVER WHICH EXECUTIVE HAS, HAD, OR MAY HAVE HAD AGAINST COMPANY OR ANY OR ALL OF THE
RELEASED ENTITIES IN CONNECTION WITH ANY CAUSE OR MATTER WHATSOEVER, WHETHER KNOWN OR UNKNOWN TO
THE PARTIES AT THE TIME OF EXECUTION OF THIS AGREEMENT AND EXISTING FROM THE BEGINNING OF TIME TO
THE DATE OF THE EXECUTION OF THIS AGREEMENT AND INCLUDING, WITHOUT LIMITATION, ALL MATTERS
RELATED TO EXECUTIVE’S SERVICE WITH THE COMPANY AND HIS RESIGNATION.

     By signing this Agreement, Executive agrees to FULLY WAIVE AND RELEASE ALL CLAIMS without
limitation, such as attorneys’ fees, and all rights and claims arising out of, or relating to, his
employment service to the Company including, BUT NOT LIMITED TO, any claim or other proceeding
arising under (without assuming the applicability of such statute or law to the service of
Executive):

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	•	 	The Civil Rights Act of 1866 (“Section 1981”);
	 
	•	 	Title VII of the Civil Rights Act of 1964 as amended by the Civil Rights Act of 1991;
	 
	•	 	The Americans with Disabilities Act (“ADA”) and its subsequent amendments;
	 
	•	 	The Age Discrimination in Employment Act (“ADEA”);
	 
	•	 	The Labor Management Relations Act (“LMRA”);
	 
	•	 	The National Labor Relations Act (“NLRA”);
	 
	•	 	The Fair Labor Standards Act (“FLSA”);
	 
	•	 	The Family and Medical Leave Act of 1993 (“FMLA”) and its subsequent amendments;
	 
	•	 	The Arizona Civil Rights Act;
	 
	•	 	The Arizona Employment Protection Act;
	 
	•	 	The Older Workers Benefit Protection Act;
	 
	•	 	The Employee Retirement Income Security Act of 1974 (“ERISA”); and/or
	 
	•	 	Any common law or statutory cause of action arising out of Executive’s employment or
termination of employment with the Company.

     This Agreement may be used by the Company to completely bar any action or suit before any
court, arbitral, or administrative body, other than with respect to any claim under federal, state,
local or other law relating to the obligations under this Agreement. Furthermore, Executive
specifically agrees that, except as set forth herein, he will not be entitled to any further
payment of any kind from the Company or its Board of Directors. Notwithstanding any provision
hereof to the contrary, however, Executive does not release his rights to indemnification under
provisions of the Company’s articles of incorporation, bylaws or applicable law or to continuing
coverage under the Company’s directors and officers liability insurance policy.

     Executive represents and warrants that he is the sole and lawful owner of all right, title and
interest in and to every claim and other rights that are being released above and that no other
party has received any assignment or other right of substitution or subrogation to any such claim
or right. Executive also represents that he has the full power and authority to enter into the
waivers and releases set forth in this Agreement. With respect to the foregoing release, Executive
hereby waives all rights or protection under law of any state, territory, country or any political
division thereof, to the extent applicable, which purports to restrict or govern the granting of
waivers and releases (such foregoing language is not intended to indicate that the law of any
jurisdiction other than Arizona is applicable to this Agreement).

     B. Executive shall deliver to Company any Company property, including any laptops,
computers, equipment, documents, materials, files, or computer files, or copies, reproductions,
duplicates, transcriptions, or replicas thereof, relating to Company’s business or affairs, which
are in Executive’s possession or control, or of which Executive is aware.

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     C. After the date hereof, Executive hereby agrees to comply with the “prohibition on
securities trading using inside information” and the “treatment of confidential information” as
contained in the Company’s Code of Ethics and Business Conduct. In addition, Executive hereby
agrees to comply with other provisions of the company’s policies, including the Code of Ethics
and Business Conduct, to the extent such provisions remain relevant to Executive after the date
hereof, particularly with respect to his knowledge of the Company’s operations and proprietary
information. In this regard, the Executive agrees to comply with the Company’s Insider Trading
Policy from the Resignation Date until such time that he reasonably determines that he no longer
is in possession of non-material public information of the Company (unless otherwise specifically
provided by the Company’s Insider Trading Policy).

     D. Executive acknowledges that in the course of his service with the Company, he has been
allowed to become acquainted with the Company’s business affairs, information, trade secrets, and
other matters which are of a proprietary or confidential nature, including but not limited to the
Company’s and its affiliates’ operations, business opportunities, price and cost information,
finance, customer information, business plans, various sales techniques, manuals, letters,
notebooks, procedures, reports, products, processes, services, and other confidential information
and knowledge (collectively the “Confidential Information”) concerning the Company’s and
its affiliates’ business. Executive understands and acknowledges that the Confidential Information
is confidential, and he agrees not to disclose such Confidential Information to anyone outside the
Company except to the extent that (i) Executive is required by order of a court of competent
jurisdiction (by subpoena or similar process) to disclose or discuss any Confidential Information,
provided that in such case, Executive shall promptly inform the Company of such event, shall
cooperate with the Company in attempting to obtain a protective order or to otherwise restrict such
disclosure, and shall only disclose Confidential Information to the minimum extent necessary to
comply with any such court order; (ii) such Confidential Information becomes generally known to and
available for use in the Company’s industry, other than as a result of any action or inaction by
Executive, directly or indirectly; or (iii) such information has been published in a form generally
available to the public prior to the date Executive proposes to disclose or use such information.
Executive agrees this covenant shall survive this Agreement and continue to be binding upon
Executive after the expiration or termination of this Agreement. Executive further agrees that he
will not use such Confidential Information in competing, directly or indirectly, with the Company
or provide such Confidential Information to other party or entity for the purpose of competing with
the Company. Consistent with Section II.B above, as of the date hereof, Executive will immediately
turn over to the Company all Confidential Information, including papers, documents, writings,
electronically stored information, other property, and all copies of them provided to or created by
him during the course of his service with the Company.

     E. For a period of one (1) year after the Resignation Date, Section 7 of Executive’s
Employment Agreement shall remain in effect and be fully enforceable against Executive pursuant to
the terms thereof.

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III.

     The provisions of this Agreement are severable. This means that if any provision is
invalid, it will not affect the validity of the other provision. If the scope of any
restrictions of this Agreement should ever be deemed to exceed that permitted by applicable law or
be otherwise overbroad, Executive agrees that a court of competent jurisdiction shall enforce that
restriction to the maximum scope permitted by law under the circumstances.

IV.

     Executive agrees, for a period of two years after the Resignation Date, that he will not seek
nor accept employment or Board of Director service in the future with the Company or any of its
subsidiaries, affiliates, successors, or divisions.

V.

     By his signature below, Executive affirms that he has been given at least 21 days during which
to consider this Agreement. Executive has been advised to seek legal counsel and his legal counsel
has been provided the opportunity to review and comment on this Agreement prior to signing this
Agreement.

VI.

     The parties, by their execution of this Agreement, affirm that the following statements are
true:

     A. The parties have been given the opportunity to, and have, read this entire Agreement, and
have had all questions regarding its meaning answered to their satisfaction;

     B. The contents of this Agreement are written in a manner understood by the parties, and they
fully understand its content, and understand that it is a FULL WAIVER AND RELEASE OF ALL CLAIMS;

     C. The parties acknowledge that they enter into this Agreement of their own free will, that
they have not been pressured or coerced in any manner whatsoever into signing this Agreement, and
that they been advised to consult with their own attorney prior to executing this Agreement;

     D. This Agreement is not to be construed as an admission of liability by any party; and

     E. The parties shall bear their own costs and attorneys’ fees incurred herein including,
without limitation, any costs or fees incurred in connection with the negotiation and execution of
this Agreement.

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VII.

     The Company and Executive mutually agree not to disparage the other, either directly or
indirectly. However, nothing in this Section precludes either party from testifying or
participating in any legal proceeding in which the party is required by law to provide information
about the other party.

VIII.

     The parties agree that upon the Resignation Date, the parties shall execute the Re-Affirmation
Certificate in substantially the form attached hereto at Exhibit A and Executive will have
a seven (7) days revocation period in which he can revoke this Agreement following such date (the
“Revocation Period”). A revocation by the Executive must be provided in writing and received
before the end of the Revocation Period. To be effective, the revocation must be received by the
following individual:

Gerald R. Dinkel

White Electronic Designs Corporation

3601 East University Drive, Suite 475

Phoenix, AZ 85034

     This Agreement shall not become enforceable until the foregoing Revocation Period has expired.

IX.

     Other than as specifically and explicitly set forth herein and in the Employment Agreement,
this Agreement supersedes and replaces all prior discussions, understandings, and oral agreements
between the parties except as noted herein, and contains the entire agreement between them on the
matters herein contained. This Agreement may not be changed orally, but only by a written
agreement signed by Executive and Company.

X.

     The laws of the State of Arizona will govern and apply to this Agreement.

XI.

     Except as to claims, rights or demands that arise from Executive’s obligations to Company
under this Agreement, the Company, on behalf of itself and its subsidiaries, affiliated
companies, and all their predecessors and successors hereby release Executive and his attorneys,
heirs or assigns, (collectively the “Released Parties”) from ANY AND ALL KNOWN RIGHTS,
CLAIMS, DEMANDS, CAUSES OF ACTION, OBLIGATIONS, DAMAGES, PENALTIES, FEES, COSTS, EXPENSES, AND
LIABILITIES OF ANY NATURE WHATSOEVER WHICH THE COMPANY HAS, HAD OR MAY HAVE HAD AGAINST THE
RELEASED PARTIES OR ANY OR ALL OF THE RELEASED PARTIES IN CONNECTION WITH ANY CAUSE OR MATTER

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WHATSOEVER, WHETHER KNOWN OR UNKNOWN TO THE PARTIES AT THE TIME OF EXECUTION OF THIS AGREEMENT
AND EXISTING FROM THE BEGINNING OF TIME TO THE DATE OF THE EXECUTION OF THIS AGREEMENT AND
INCLUDING, WITHOUT LIMITATION, ALL MATTERS RELATED TO EXECUTIVE’S SERVICE WITH THE COMPANY,
WHETHER AS AN EMPLOYEE OR EXECUTIVE OFFICER.

     Other than with respect to his obligations under this Agreement, this Agreement may be used by
Executive to bar any action or suit before any court, arbitral, or administrative body with respect
to any claim under federal, state, local or other law.

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The parties execute this Agreement as of the date first written above.

	 	 	 	 	 
	EXECUTIVE

 	 	 
	/s/ Roger A. Derse
 	 	 
	Roger A. Derse 	 	 
	 	 	 
	 
	WHITE ELECTRONIC DESIGNS CORPORATION

 	 	 
	/s/ Gerald R. Dinkel
 	 	 
	By:     Gerald R. Dinkel 	 	 
	Title:  	Chief Executive Officer 	 	 
	 

[SIGNATURE PAGE OF

SEVERANCE AGREEMENT]

 

 

EXHIBIT A

Reaffirmation of Separation Agreement and Release of Claims

(NOT TO BE EXECUTED UNTIL THE RESIGNATION DATE, MARCH 1, 2010)

     For the consideration set forth in that certain Separation Agreement and Release of Claims
dated February 22, 2010, between the parties set forth in the signature lines below (the
“Agreement”), Executive and the Company hereby reaffirm their respective covenants, obligations,
representations and releases contained in this Agreement. Terms not otherwise defined in this
Reaffirmation are defined in the Agreement.

FOR THE SAKE OF CLARITY, BY SIGNING THIS DOCUMENT, THE PARTIES REAFFIRM AND BRING DOWN ALL
RELEASES, WAIVERS AND OBLIGATIONS INCLUDED IN THE AGREEMENT TO THE DATE HEREOF.

Dated: March 1, 2010

EXECUTIVE:

 

Dated: March 1, 2010

WHITE ELECTRONIC DESIGNS CORPORATION

 

By:

Title:Exhibit 10.05

Exhibit 10.05

16 December 2009

Mr David J McIntyre

3734 E Coquina Way

Weston FL USA 33332

Dear David:

We are pleased to offer you the revised terms and conditions of your continuing employment with
HeartWare, Inc. (the “Company” or “we” or “us”):

1. Position. Your title will be Executive Vice President, Chief Financial Officer & Chief
Operating Officer and you will be appointed as Company Secretary of HeartWare International, Inc.
(the “Parent”). As such, you will be responsible for, among other things, all financial, legal,
operations management, human resources and secretarial activities and participating as a member of
the senior management leadership team. You shall perform such duties and responsibilities as are
customarily assigned to individuals serving in similar positions of other public companies. You
shall report directly to the President / Chief Executive Officer of the Parent. Your usual place
of business will be at the Company’s offices in Miami Lakes, Florida.

2. Compensation. With effect from January 1, 2010 your base salary shall be at the annual
rate of $358,000, payable in accordance with the Company’s payroll policies as from time to time in
effect (“Base Salary”). Your Base Salary will be reviewed annually by the Board of Directors of
the Parent (“Board”) and may be increased by the Board in its discretion. Your Base Salary shall
not be subject to reduction without your prior written consent except that if the Board reduces the
salary of all senior managers of the Company, the Base Salary shall be reduced by the same
percentage as the percentage reduction in salary of such senior managers.

3. Annual Bonus. The Company may pay you an annual cash bonus based on your performance
(which may be measured by specific goals), as determined by the Board in its discretion. The
Company shall pay the annual cash bonus for a calendar year, if at all, on or after January 1st,
but by no later than March 15th, of the next year. No annual cash bonus is guaranteed. Payment of
all annual bonuses rests in the sole discretion of the Board regardless of the achievement of
pre-specified goals, and you must be employed with the Company on the payment date in order to be
eligible to receive any such annual bonus.

 

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4. Vacation, Insurance and Benefits; Expenses.

(a) You shall be entitled to all legal holidays recognized by the Company, and 20 days of paid
vacation per annum. Any unused vacation shall be subject to Company policy as from time to time in
effect.

(b) You shall be eligible for participation in any health, dental, and other insurance plans
that may be established and maintained by the Company from time to time for its employees of your
level, all as determined by the Board in its discretion. You shall also be entitled to participate
in any employee benefit programs that the Board may establish for Company employees generally,
including but not limited to health insurance, 401(k) Plan and stock purchase or option plans. The
Company’s employee benefit programs will be discussed during your orientation.

(c) The Company shall reimburse you for all usual and ordinary business expenses incurred by
you in the scope of your employment hereunder in accordance with the Company’s expense
reimbursement policy as from time to time in effect. Specifically, you, your spouse and all your
legal dependents shall be entitled each calendar year to travel once to Australia and the Company
shall reimburse you for the cost of all such roundtrip airfares. In addition, in the event of
death in you or your spouse’s immediate family, you, your spouse and all your legal dependents
shall be entitled to travel to Australia and the Company shall reimburse you for the cost of all
such roundtrip airfares.

5. Relocation Benefit.

(a) The Company shall reimburse you for the following costs of relocating you, your spouse and
all your legal dependents to Australia on termination of your employment (for whatever reason):

(i) One home-finding roundtrip to Australia for you and your spouse, including
actual expenses for transportation, meals, and lodging for up to a total of seven
days;

(ii) Actual cost of transportation, airfares, meals, lodging, moving, shipment,
and full replacement value insurance relating to the relocation of you, your spouse
and all your legal dependents to Australia;

(iii) Up to 60 days of accommodation and temporary living expenses for you,
your spouse and all your legal dependents, and up to 60 days of storage of household
goods;

(iv) If you buy a new home, the Company shall reimburse the following buyer
closing costs, as applicable: title insurance; property transfer taxes (e.g. stamp
duty); reasonable attorney’s fees; real estate appraisal; credit report; recording
fees; title search, examination and opinion; revenue stamps; state deed tax;
inspections required by the lender, such as pest,
structural/mechanical, water/well, septic and radon; and loan origination fees
up to a maximum of 2%;

 

A-2

 

(v) If you buy a new home before selling your existing home, the Company shall
reimburse the following duplicate carrying costs, as applicable: mortgage interest,
real estate taxes, utilities, and homeowners insurance. The Company shall reimburse
the lesser of the total monthly expenses for your new home or your old home. Items
not paid on a monthly basis, e.g., real estate taxes, will be prorated; and

(vi) If you are required to terminate a lease as a result of your relocation,
the Company shall reimburse reasonable expenses directly related to subleasing or
terminating your lease of up to one month’s rent.

(b) In addition to the above the Company shall, on termination of your employment (for
whatever reason), pay you a lump sum one-off payment equivalent to one month of your Base Salary
for the purposes of meeting out of pocket expenses that you may incur on relocation to Australia.

(c) If you should die during the course of your employment, the Company shall provide to your
spouse all the benefits set out in this Clause 5.

6. Severance Pay.

(a) If your employment is terminated by the Company without “Cause” (as defined below) or by
you for “Good Reason” (as defined below) other than in connection with a Change in Control (as
described below), and subject to the notice and release requirements described below, the Company
shall pay, beginning within 15 days after your termination of employment, (i) your Base Salary for
a period of 12 months, payable in accordance with the standard payroll practices then in effect for
active senior executives; and (ii) the employee portion of your COBRA continuation coverage (to the
extent that you elect coverage) for a period of 12 months or, if earlier, until you become entitled
to participate in another employer’s health plan.

(b) If your employment is terminated by the Company without “Cause” (as defined below) or by
you for “Good Reason” (as defined below) coincident with or within 18 months after a Change in
Control (as defined below), and subject to the notice and release requirements described below, the
Company shall cause to be paid, on or beginning within 15 days after your termination of
employment, (i) a lump-sum cash payment in an amount equal to 2 times your Total Salary; and (ii)
the employee portion of your COBRA continuation coverage (to the extent that you elect coverage)
for a period of 24 months or, if earlier, until you become entitled to participate in another
employer’s health plan. The severance pay provided under this Section 6(b) shall
supersede, and not be in duplication of, the severance pay provided under Section 6(a).
“Total Salary” means your then current Base Salary plus the most recent amount paid to you as your
Annual Bonus.

 

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(c) “Cause” means your: (i) material or persistent breach of this letter agreement; (ii)
engaging in any act that constitutes serious misconduct, theft, fraud, material misrepresentation,
serious dereliction of fiduciary obligations or duty of loyalty to the Company; (iii) conviction of
a felony, or a plea of guilty or nolo contendere to a felony charge or any criminal act involving
moral turpitude or which in the reasonable opinion of the Board brings you, the Board, the Company
or any affiliate into disrepute; (iv) neglect of or negligent performance of your duties under this
letter agreement; (v) willful, unauthorized disclosure of material confidential information
belonging to the Company, or entrusted to the Company by a client, customer, or other third party;
(vi) repeatedly being under the influence of drugs or alcohol (other than prescription medicine or
other medically related drugs to the extent that they are taken in accordance with their
directions) during the performance of your duties under this letter agreement, or, while under the
influence of such drugs or alcohol, engaging in grossly inappropriate conduct during the
performance of your duties under this letter agreement; (vii) repeated failure to comply with the
lawful directions of your immediate supervisor or the Board that are not inconsistent with the
terms of this letter agreement; or (viii) actual engagement in conduct that violates applicable
state or federal laws governing the workplace that could reasonably be expected to bring the
Company or any affiliate into disrepute. In order for the Company to terminate your employment for
Cause under any of clauses (i), (iv), (vi) or (vii) in the preceding sentence, the Company must
provide you with written notice of its intention to terminate employment for Cause and describing
the acts or omissions upon which such termination for Cause is based, and you shall be provided a
30-day period from the date of such notice within which to cure or correct such acts or omissions
if they are reasonably susceptible of cure or correction.

(d) “Good Reason” means the occurrence of any of the following without your consent:

(i) a material diminution in your Base Salary;

(ii) a material diminution in your authority, duties, or responsibilities;

(iii) a material diminution in the authority, duties, or responsibilities of
the supervisor to whom you are required to report, including a requirement that you
report to a corporate officer or employee instead of the Board;

(iv) a material diminution in the budget over which you retain authority; or

(v) any other action or inaction that constitutes a material breach by the
Company of any agreement under which you provide services.

Notwithstanding the above, no “Good Reason” exists unless (I) you notify the Company in writing
within 90 days after the initial existence of any condition listed above, and the Company fails to
cure the condition within 30 days after receiving notice, and (II) you terminate employment by no
later than 2 years after the initial existence of any condition listed above.

 

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(e) A “Change in Control” means the earliest to occur of any of the following events,
construed in accordance with section 409A of the Internal Revenue Code:

(i) Any one Person or more than one Person Acting as a Group (each as defined
below) acquires, or has acquired during the 12-month period ending on the date of
the most recent acquisition by such Person or Group, beneficial ownership of more
than a majority of the total fair market value or total voting power of the
then-outstanding securities of HeartWare International, Inc. (the “Parent”), a
Delaware corporation that is the ultimate parent company of the Company;

(ii) Any one Person or more than one Person Acting as a Group (each as defined
below) acquires, or has acquired during the 12-month period ending on the date of
the most recent acquisition by such Person or Group, the assets of the Parent that
have a total gross fair market value (as determined by the Board) of more than 50%
of the total gross fair market value of all of the assets of, as applicable, the
Parent immediately prior to the initiation of the acquisition; or

(iii) A majority of the members of the board of directors of the Parent is
replaced during any 12-month period by directors whose appointment or election is
not endorsed or approved by a majority of the members of the board who were members
of the board prior to the initiation of the replacement.

For purposes of this Section 6(e), a “Person” means any individual, entity or group within
the meaning of section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended,
other than (A) the Parent, (B) any trustee or other fiduciary holding securities under an employee
benefit plan of the Parent, or (C) any corporation owned, directly or indirectly, by the
stockholders of the Company Parent in substantially the same proportions as their ownership of
stock of the Parent. Persons will be considered to be “Acting as a Group” (or a “Group”) if they
are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of
stock, or similar business transaction with the corporation. If a Person owns stock in both
corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar
transaction, such stockholder is considered to be Acting as a Group with other stockholders only
with respect to the ownership in that corporation before the transaction giving rise to the change
and not with respect to the ownership interest in the other corporation. Persons will not be
considered to be Acting as a Group solely because they purchase assets of the same corporation at
the same time or purchase or own stock of the same corporation at the same time, or as a result of
the same public offering.

For purposes of this Section 6(e), section 318(a) of the Internal Revenue Code applies to
determine stock ownership. Stock underlying a vested option is considered owned by the individual
who holds the vested option (and the stock underlying an unvested option is not considered owned by
the individual who holds the unvested option). For purposes of the preceding sentence, however, if
a vested option is exercisable for stock that is not substantially vested (as defined by Treasury
regulation section 1.83 3(b) and (j)), the stock underlying the option is not treated as owned by
the individual who holds the option.

 

A-5

 

(f) Your right to receive severance pay under this Section 6 is conditioned upon (i)
your signing and delivering to the Company, before any payment is due or scheduled to begin, a
general release of claims, in form and substance reasonably acceptable to the Company, by which you
release the Company from any claim arising from your employment by, or termination of employment
with, the Company, in consideration for the payment; and (ii) your compliance with Sections
8, 9, 10 and 11 of this letter agreement. The Company shall make no
payment before the general release becomes effective upon the expiration of any applicable
revocation period.

(g) Although your employment may be terminated immediately by the Company at any time for any
reason, if your employment is terminated by the Company other than for Cause upon less than 90
days’ prior written notice of such termination, the Company agrees to pay you that portion of your
compensation attributable to the period for which the Company fails to satisfy the 90 day notice
requirement described above. Any such payment of compensation in lieu of notice will be paid in
accordance with the provisions of Section 6(a) or 6(b), as applicable. Any
termination of employment by you for any reason shall require 90 days’ prior written notice.

(h) Notwithstanding the above, on termination of your employment (for whatever reason) you
shall be entitled to receive the pro rata portion of your Base Salary through to the date of your
termination, together with such compensation or benefits to which you may be entitled by law or
under the terms of the Company’s compensation and benefit plans in effect including, without
limitation, amounts owed to you for unpaid vacation leave accrued during the course of your
employment with the Company or HeartWare Limited (arising prior to your transfer to the United
States).

7. At Will Employment.

(a) This letter agreement describes the compensation and benefits that you are entitled to
receive for so long as you remain employed by the Company, but is not a contract or guarantee of
employment for any particular period of time. At all times you will remain an employee at will,
and you and the Company are free to terminate your employment at any time for any reason.

(b) Should your employment with the Company be terminated by the Company for Cause, by you
without Good Reason, or as a result of your death or permanent disability or other physical or
mental incapacity, you shall be entitled to receive only the prorated portion of your Base Salary
through the date of your termination of employment, together with such other compensation or
benefits to which you may be entitled by law, the terms of this letter agreement, or under the
terms of the Company’s compensation and benefit plans then in effect.

8. Noncompetition.

(a) You will not without the prior written consent of the Company or the Parent during your
employment either directly or indirectly in any capacity (including without limitation as
principal, agent, partner, employee, stockholder, unit holder, joint venturer, director, trustee,
beneficiary, manager, consultant, or advisor) carry on, advise, provide services to or be
engaged, concerned or interested in or associated with any Competitive Business (as defined
below), or be engaged or interested in any public or private work or duties which in the reasonable
opinion of the Board or the Parent, may hinder or otherwise interfere with the performance of your
duties.

 

A-6

 

(b) You will not at any time in the 12 months after the termination of your employment (for
whatever reason) without the written consent of the Company or the Parent:

(i) on a worldwide basis directly or indirectly in any capacity (whether as
principal, agent, partner, employee, stockholder, unit holder, joint venturer,
director, trustee, beneficiary, manager, consultant, or advisor) carry on, advise,
provide services to or be engaged, concerned or interested in or associated with any
Competitive Business (as defined below); or

(ii) counsel, procure, or otherwise assist any person to do any of the acts
referred to in Section 8(b)(i).

Given that the business of the Company and the Parent is and is expected to continue to be
conducted on a worldwide basis, and you will be actively involved with and intimately familiar with
the business of the Company on a worldwide basis, you acknowledge and agree that more narrow
geographical limitations of any nature on this noncompetition covenant (and the nonsolicitation
covenant below) are therefore not appropriate and would not adequately protect the Company or the
Parent.

Nothing in this Section 8(b) prohibits you (whether directly or through nominees) of
holding shares listed on a recognized stock exchange, provided you do not hold more than 5% of the
issued capital of a company.

(c) “Competitive Business” means any business or activity which is involved in the research,
development, sale, distribution and/or marketing of mechanical circulatory assist devices.

9. Nonsolicitation. During your employment with the Company and for 12 months after your
termination of employment (for whatever reason), you shall not, directly or indirectly, on your own
behalf or on behalf of any third party, without the express written consent of the Company or the
Parent:

(a) canvass, solicit, target, induce or entice or endeavor to solicit, target, induce or
entice away from the Company or the Parent, or attempt to divert, reduce or take away, the business
or patronage (with respect to products or services of the kind or type developed, produced,
marketed, furnished or sold by the Company with which you were substantively involved during the
course of your employment with the Company) of, of any of the clients, customers, vendors,
suppliers or accounts, or prospective clients, customers, suppliers, vendors or accounts of the
Company or the Parent that you contacted, solicited or served while employed by the Company or
supplier to or in the habit of dealing with the Company or the Parent;

 

A-7

 

(b) target, recruit, solicit, hire away, or otherwise interfere with the employment
relationship of, or endeavor to entice away, any employee of the Company or the Parent, or
otherwise induce any such employee to cease their relationship with the Company or the Parent; or

(c) counsel, procure or otherwise assist any person to do any of the acts referred to in
Section 9(a) or (b).

10. Nondisparagement. You shall not, while employed by the Company or at any time after your
termination of employment, directly, or through any other personal entity, make any public or
private statements that are disparaging of the Company or the Parent, their respective businesses
or employees, officers, directors, or stockholders. The Company agrees that, after your
termination of employment with the Company for any reason, it will refrain from making any public
statements that disparage you. The Company’s obligations under this Section 10 extend only
to the then-current officers and members of the Board, and only for so long as those individuals
are officers or directors of the Company. Nothing herein shall be deemed to prevent you or the
Company from complying with their respective legal obligations or responding to a subpoena or other
court order.

11. Proprietary Information. Both during and after your employment with the Company, you will
treat all proprietary or other confidential information as strictly confidential. Further, you
agree to sign and comply with the terms and conditions of the enclosed Proprietary Information,
Confidentiality, and Inventions Assignment Agreement, which is incorporated by reference into
this letter agreement. This offer of continued employment is contingent upon your signing that
agreement.

12. Injunctive Relief: Clawback. You recognize and acknowledge that it would be difficult to
ascertain the damages arising from a breach or threatened breach of the covenants set forth in
Sections 8 (noncompetition), 9(nonsolicitation), 10 (nondisparagement), and
11 (proprietary information) and that any such breach or threatened breach could result in
irreparable harm to the Company. You therefore agree that, notwithstanding anything in this letter
agreement to the contrary, including but not limited to the forfeiture and clawback provision
below, the Company shall have the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any such breach, without prior notice to you and without the
posting of a bond or other guarantee, to enforce this letter agreement. You hereby waive any and
all defenses you may have on the ground of lack of jurisdiction or competence of the court to grant
such an injunction or other equitable relief. The existence of this right shall not preclude any
other rights and remedies at law or in equity that the Company may have. The provisions of
Section 12 shall survive termination of this letter agreement and/or your employment with
the Company. The existence of a claim or cause of action of any kind by you against the Company
shall not constitute a defense to the enforcement by the Company of the rights provided in this
Section 12 and shall not be a defense to any injunction proceeding. In addition,
notwithstanding anything herein to the contrary, if the Board, in its discretion, determines that
you have engaged in any activity that contravenes any covenant set forth in Section 8,
9, 10 or 11, you shall forfeit any amount payable under Section 6
(severance pay), and you agree to repay the Company, within 30 days after you receive notice of the
Board’s determination, any amount previously paid by the Company under Section 6.

 

A-8

 

13. Blue Pencil; Severability. If any provision of this letter agreement is construed by a
court of competent jurisdiction to be invalid or unenforceable, that construction does not affect
the remainder of this agreement, which is to be given full force and effect without regard to the
invalid or unenforceable provision. Any invalid or unenforceable provision is to be reformed to
the maximum time, geographic and/or business limitations permitted by applicable laws, so as to be
valid and enforceable.

14. Waivers. No delay or omission by the Company in exercising any right under this letter
agreement operates as a waiver of that or any other right. The Company’s waiver or consent on any
one occasion is effective only for that occasion and is not be construed as a bar or waiver of any
right on any other occasion.

15. Federal Employment Law. Please note that Federal law requires you to provide the Company
with documentation of your identity and eligibility to work in the United States. In addition, the
Company verifies the validity of social security numbers. Accordingly, this offer is further
conditioned upon your providing the required documentation to the Company within three business
days after your start date. A list of the required documentation will be provided during your
orientation.

16. Prior Employers. By accepting this offer of employment, you are representing that you are
not party to any agreement with any prior employer that prevents your working for the Company or
that would prevent you from performing your assigned duties for the Company.

17. Background Check. The Company reserves the right to conduct a background check of its
employees, and your employment may be conditioned on satisfactory results.

18. Tax Withholding. The Company may withhold from any amounts payable under this letter
agreement such federal, state, local or foreign income and employment taxes as shall be required to
be withheld under applicable law.

19. Section 409A Compliance. The following rules relate to section 409A of the Internal
Revenue Code of 1986 and any regulations and Treasury guidance promulgated thereunder (“Section
409A”), which govern deferred compensation:

(a) This letter agreement is intended to comply with, or otherwise be exempt from, Section
409A.

(b) The Company shall undertake to administer, interpret, and construe this letter agreement
in a manner that does not result in the imposition on you of any additional tax, penalty, or
interest under Section 409A.

(c) The Company and you agree to execute any and all amendments to this letter agreement
permitted under applicable law, as mutually agreed in good faith, as may be necessary to ensure
that this letter agreement complies with Section 409A.

(d) The preceding provisions, however, shall not be construed as a guarantee by the Company of
any particular tax effect to you under this letter agreement. The Company shall not be liable to
you for any payment made under this letter agreement that is determined to
result in an additional tax, penalty, or interest under Section 409A, nor for reporting in
good faith any payment made under this letter agreement as an amount includible in gross income
under Section 409A.

 

A-9

 

(e) For purposes of Section 409A, the right to a series of installment payments under this
letter agreement shall be treated as a right to a series of separate payments.

(f) With respect to any reimbursement of expenses of, or any provision of in-kind benefits to,
you, as specified under this letter agreement, such reimbursement of expenses or provision of
in-kind benefits shall be subject to the following conditions: (i) the expenses eligible for
reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the
expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable
year, except for any medical reimbursement arrangement providing for the reimbursement of expenses
referred to in section 105(b) of the Internal Revenue Code; (ii) the reimbursement of an eligible
expense shall be made no later than the end of the year after the year in which such expense was
incurred; and (iii) the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit.

(g) “Termination of employment,” or words of similar import, as used in this letter agreement
means, for purposes of any payments under this letter agreement that are payments of deferred
compensation subject to Section 409A, your “separation from service” as defined in Section 409A.

(h) If a payment obligation under this letter agreement arises on account of your separation
from service while you are a “specified employee” (as defined under Section 409A and determined in
good faith by the Board), any payment of “deferred compensation” (as defined under Treasury
regulation section 1.409A-1(b)(1), after giving effect to the exemptions in Treasury regulation
sections 1.409A-1(b)(3) through (b)(12)) that is scheduled to be paid within six months after such
separation from service shall accrue without interest and shall be paid within 15 days after the
end of the six-month period beginning on the date of such separation from service or, if earlier,
within 15 days after the appointment of the personal representative or executor of your estate
following your death.

20. Indemnification. Except in the case of negligence, fraud, embezzlement or
misrepresentation the Company hereby agrees to indemnify and hold harmless Executive to the fullest
extent permitted by Section 145 of the Delaware General Corporation Law and to cause any parent or
subsidiary of the Company (including, without limitation, the Parent) to indemnify and hold you
harmless to the fullest extent permitted by the provisions of the laws of the jurisdiction of its
incorporation against any liability, loss or expense (including reasonable attorney’s fees and
costs incurred in defense of such claims) incurred in connection with the your services as an
officer or director of the Company or any of its subsidiaries or affiliates, including the Parent,
if in each of the foregoing cases, (i) you acted in good faith and in a manner you believed to be
in, or not opposed to, the best interests of the Company, and, with respect to any criminal
proceeding, had no reasonable cause to believe your conduct was unlawful, and (ii) your conduct did
not constitute gross negligence or willful or wanton misconduct. Without limitation of the
foregoing, this Section 19 shall be deemed to grant to the you the rights to indemnification
provided by the Company’s and the Parent’s certificate of incorporation and by-laws, as

 

A-10

 

currently constituted, regardless of any subsequent amendment or modification of the
applicable provisions of such instruments, with such provisions being deemed incorporated herein by
reference. The Company shall advance or cause its subsidiaries to advance all expenses (including
all reasonable legal fees and expenses) reasonably incurred by you in defending any such claim,
action or proceeding, whether civil, administrative, criminal or otherwise, brought against you in
your capacity as an officer of director of the Company or any of its subsidiaries or affiliates,
including the Parent, to the fullest extent permitted under applicable law, provided Executive
provides an undertaking pursuant to which he agrees to repay all such advances if it is ultimately
determined that you are not entitled to indemnification under the circumstances.

Notwithstanding anything else contained in this letter agreement, the above shall not apply
where the liability, loss or expense (including reasonable attorney’s fees and costs incurred in
defense of such claims) incurred by you arise as a result, directly or indirectly, of any claim or
action taken against you by the Company, the Parent or any of their respective subsidiaries or
affiliates.

21. Successors, Binding Agreement. This letter agreement shall not be assignable by you.
This letter agreement may be assigned by the Company to any affiliate or to any other person that
is a successor in interest to all or substantially all of the business operations of the Company.
This letter agreement shall be binding upon, and inure to the benefit of, the parties hereto and
their respective successors, heirs and permitted assigns.

22. Governing Law. This letter agreement shall be governed in all respects, including as to
validity, interpretation and effect, by the laws of the state of Florida, without regard to its
conflict of laws principles.

23. Entire Agreement, Amendments. This letter agreement, including the proprietary
information, confidentiality, and inventions assignment agreement incorporated herein by reference,
sets forth the entire agreement between you and the Company regarding your employment with the
Company and supersedes all prior agreements or other understandings, whether written or oral,
express or implied, between the parties to the extent that such agreements or understandings
contain provisions addressed herein. This letter agreement may not be amended or modified except
by a written agreement executed by the parties hereto or their respective successors and legal
representatives.

* * * *

To indicate your acceptance of these updated terms and conditions of your employment, please sign
and return the following to me no later than date that is one week after date of offer letter:

	 	•	 	one copy of this letter, and
	 
	 	•	 	one copy of the Company’s standard Proprietary Information, Confidentiality, and
Inventions Assignment Agreement, the form of which is annexed hereto as Exhibit
A.

 

A-11

 

This is a great opportunity for both you and the Company, and we look forward to having you
continue as a member on our team.

	 	 	 	 	 
	 	Sincerely,

HEARTWARE, INC.

 	 
	 	By:  	/s/
Douglas Godshall
 	 
	 	 	Name:  	Douglas Godshall 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

	 	 	 	 	 
	Agreed to and accepted:

 	 	 
	/s/ David J. McIntyre
 	 	 
	David J. McIntyre 	 	 

Dated: December 16, 2009

 

A-12

 

Exhibit A

Form of Proprietary Information, Confidentiality, and Inventions Assignment Agreement

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