Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.1

April 21, 2008

David R. Hathaway, MD

7250 Rosencrans Way

San Jose, CA 95139

Dear Dr. Hathaway:

We are pleased to offer you a position with HeartWare, Inc. (the “Company”) on the terms and
conditions set forth below:

1. Position. Your title will be Chief Medical Officer. As such, you will be responsible,
among other things, for managing the overall Clinical and Regulatory department.
Responsibilities include establishing clinical and regulatory strategies, recruitment,
administration, and management of staff, budgets and vendors associated with clinical and
regulatory functions. Formulate and implement policies and procedures, and participate in all
facets of strategic and operational decision making pertaining to the clinical and regulatory
affairs. Oversight of all medical issues related to product development, clinical trial data, post
commercial complaints, data presentation and medical journal publications. You shall report
directly to the Chief Executive Officer of the Company, and shall provide such other services as
may be requested by the Chief Executive Officer or the Board of Directors of the Company,
consistent with your position with the Company. Your usual place of business will be at the
Company’s office in Framingham, Massachusetts. You understand and agree that the Company may from
time to time require you to travel to and work at other locations.

2. Compensation. Your base salary (“Base Salary”) shall be at the annual rate of $250,000
(two hundred fifty thousand dollars), payable in accordance with the Company’s payroll policies as
from time to time in effect. Your Base Salary will be reviewed annually by the Board of Directors
and may be increased by the Board in its discretion. In addition, you will receive a one-off bonus
of $25,000 (twenty five thousand dollars), payable within 60 days of your commencement provided you
continue to be employed by the Company at that date.

3. Vacation, Insurance and Benefits; Expenses.

(a) You shall be entitled to all legal holidays recognized by the Company, and twenty (20)
days of paid vacation per annum. Any unused vacation shall be subject to Company policy as from
time to time in effect. Vacation days for the first fiscal year of your employment will be
prorated.

 

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(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 Company’s Board of Directors in its sole discretion. You shall
also be entitled to participate in any employee benefit programs that the Company’s Board of
Directors may establish for Company employees generally, including but not limited to health
insurance, 401k Plan and stock purchase or option plans.

(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.

(d) The Company shall reimburse you for reasonable expenses of relocating yourself and your
family to Boston provided that such costs are pre-approved by the Chief Executive Officer.

(e) You shall be eligible to participate in any discretionary bonus scheme as determined by
the Company from time to time.

4. Stock Options. Within 90 days of commencement of your employment, the Company shall
recommend to the Board of Directors that you be granted options to purchase up to an aggregate of
1,300,000 (one million three hundred thousand) ordinary shares of HeartWare Limited (the “Option
Shares”) under the HeartWare Limited Employee Share Option (“ESOP”), an Australian corporation that
is the parent company of the Company (the “Parent”). The exercise price for such Option Shares
shall be determined by the Board of Directors at or about the date of such grant. Twenty-five
percent (25%) of the Option Shares shall vest on the 12-month anniversary of the grant date, and
the balance vesting in three (3) equal annual installments thereafter, so long as you continue to
be employed by the Company and subject to the terms and conditions of the rules of the ESOP.

5. 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. Subject to clause 5(c) below, you are free to
terminate your employment at any time for any reason by providing three (3) months’ prior notice in
writing to the Company or the Chief Executive Officer (as the case may be) and the Company is free
to terminate your employment at any time for any reason by providing you with three (3) months
notice in writing unless the termination is for “cause” (as defined in clause (c) below) or if
termination occurs within the first 6 months of employment in which case the Company shall not be
required to provide notice. Without limiting the generality of this Section 5(a), you understand
that there will be an employee review at the end of the initial 90 days of your employment in order
to assess your performance as of such date.

(b) Should your employment with the Company terminate for any reason, you shall be entitled to
receive only the pro rata portion of your base salary through the date of your termination,
together with such other compensation or benefits to which you may be entitled by law or under the
terms of the Company’s compensation and benefit plans then in effect. Without limiting the above, the Company may, at its sole discretion, substitute payment in lieu of any
or all of any period of notice of termination. Such payment shall be calculated at the rate of
your Base Salary immediately prior to the termination.

 

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(c) Without limiting the above, the Company may at anytime immediately terminate your
employment for cause if:

(i) You are convicted of any offence which is punishable by imprisonment, or commit and are
convicted of any other act of dishonesty, fraud or misrepresentation or, in any such case, you
admit in writing your culpability therefore;

(ii) Any proceeding under bankruptcy or insolvency laws are brought by or against you (and not
dismissed within 60 days) or if a receiver is appointed to or applied for by you;

(iii) You commit any act which, in the reasonable opinion of the Board, brings you into
disrepute or otherwise adversely and materially affects the interest of the Company, including its
reputation; or

(iv) You commit a breach of your obligations under this letter agreement which continues
unremedied for 20 days after written notice of that breach has been given to you.

6. 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 Employee Confidentiality,
Inventions, Non-competition and Non-solicitation Agreement. This offer of employment is contingent
upon your signing that Agreement.

7. Federal Employment Law. Please note that Federal law requires you to provide the Company
with documentation of your eligibility to work in the United States. Accordingly, this offer is
further conditioned upon your providing such documentation to the Company within three business
days after the Commencement Date.

8. 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.

To indicate your acceptance of our offer, please sign and return the following to me no later than
April 24, 2008:

	 	•	 	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.

If we do not receive your signed copy of this letter by April 24, 2008, this offer shall be null
and void and of no further force or effect.

 

A-3

 

	 	 	 	 	 
	 	Sincerely,

HEARTWARE, INC.

 	 
	 	By:  	/s/ Douglas Godshall
 	 
	 	 	Name:  	Douglas Godshall 	 
	 	 	Title:  	President & CEO 	 
	 

Agreed to and accepted:

	 	 	 	 	 
	/s/ David Hathaway
	 	 
	 	 	 
	David Hathaway, M.D.
	 	 
	 
	 	 	 	 
	Dated:

	 	April 23, 2008	 	 
	 

	 	 	 	 

 

A-4

 

Exhibit A

Form of Proprietary Information, Confidentiality, and Inventions Assignment Agreement

 

3351 Executive Way Miramar, FL 33025 T: 954-874-1400 F: 954-874-1401Filed by Bowne Pure Compliance

 

Exhibit 10.1

Performance Restricted Stock Agreement

Flowserve Corporation

2004 Stock Compensation Plan

This Performance Restricted Stock Agreement (the “Agreement”) is made and entered into by and
between Flowserve Corporation, a New York corporation (the “Company”) and Lewis Kling (the
“Participant”) as of March 7, 2008 (the “Date of Grant”).

W I T N E S S E T H

WHEREAS, the Company has adopted the Flowserve Corporation 2004 Stock Compensation Plan (the
“Plan”) to strengthen the ability of the Company to attract, motivate and retain Employees, Outside
Directors and Consultants who possess superior capabilities and to encourage such persons to have a
proprietary interest in the Company; and

WHEREAS, the Organization and Compensation Committee of the Board of Directors of the Company
believes that the grant of Performance Restricted Stock to the Participant as described herein is
consistent with the stated purposes for which the Plan was adopted; and

NOW, THEREFORE, in consideration of the mutual covenants and conditions hereafter set forth
and for other good and valuable consideration, the Company and the Participant agree as follows:

1. Performance Restricted Stock

In order to encourage the Participant’s contribution to the successful performance of the
Company, and in consideration of the covenants and promises of the Participant herein contained,
the Company hereby grants to the Participant as of the Date of Grant,
an Award of                      shares of Common Stock (the “Performance Shares”), subject to the conditions and restrictions set
forth below and in the Plan.

2. Vesting of Performance Shares

	 	(a)	 	Prior to March 30, 2008, the Committee shall establish a
threshold, target and maximum Performance Goal with respect to the Award, in
accordance with the requirements of Section 6.7 of the Plan, based upon the
Company’s return on net assets for the period beginning January 1, 2008 and
ending December 31, 2010 (the “Performance Cycle”). Following the end of the
Performance Cycle, the Committee shall compare the actual performance of the
Company with the Performance Goal and certify, in writing, whether and to what
extent the Performance Goal has been achieved for such Performance Cycle.
Subject to the provisions of Paragraph 3 below, upon written certification by
the Committee, which shall occur no later than March 31, 2011, whether, and to
what extent, the Performance Goal has been achieved, the Performance Shares
will become vested (the “Vesting Date”) in accordance with the table set forth
below; provided, however, that the Performance Shares shall not vest and shall
be forfeited to the extent the Performance Goal is not achieved for the
Performance Cycle. The number of Performance Shares vested is contingent upon
the Company’s achievement of the Performance Goal for the Performance Cycle.

 

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	Performance Goal	 	Percentage of Performance Restricted	 
	Achieved	 	Stock Vested	 
	Less Than Threshold
	 	 	0	%
	Threshold
	 	 	25	%
	Target
	 	 	100	%
	Maximum
	 	 	200	%

	 	(b)	 	Immediately following the execution of this Agreement, the
Performance Shares will be transferred of record to the Participant and a
certificate or certificates representing said Performance Shares will be issued
in the name of the Participant. Each of such Performance Share certificates
will bear a legend as provided by the Company, conspicuously referring to the
terms, conditions and restrictions as permitted under Section 15.9 of the Plan.
The Company either shall retain custody of such Performance Share
certificate(s) prior to vesting or require the Participant to enter into an
escrow arrangement under which such Performance Share certificate(s) will be
held by an escrow agent. Certificates for shares of Common Stock free of
restriction under this Agreement and the Plan shall be delivered to the
Participant promptly after, and only after, the Committee has certified that
the Performance Goals were met. The delivery of any shares of Restricted Stock
pursuant to this Agreement is subject to the provisions of Paragraph 9 below.
The Participant, by his or her acceptance of this Agreement, shall irrevocably
grant to the Company a power of attorney to transfer any shares forfeited
pursuant to Paragraph 3 and agrees to execute any documents requested by the
Company in connection with such forfeiture and transfer. The provisions of
this Paragraph 2 shall be specifically performable by the Company in a court of
equity or law.

	 
	 	(c)	 	Absent prior written consent of the Committee, the Performance
Shares granted hereunder to the Participant may not be sold, assigned,
transferred, pledged or otherwise encumbered, whether voluntarily or
involuntarily, by operation of law or otherwise, from the Date of Grant until
said shares shall have become vested in the Participant.

	 
	 	(d)	 	Consistent with the foregoing, except as contemplated by
Paragraph 5, no right or benefit under this Agreement shall be subject to
transfer, anticipation, alienation, sale, assignment, pledge, encumbrance or
charge, whether voluntary, involuntary, by operation of law or otherwise, and
any attempt to transfer, anticipate, alienate, sell, assign, pledge, encumber
or charge the same shall be void. No right or benefit hereunder shall in any
manner be liable for or subject to any debts, contracts, liabilities or torts
of the person entitled to such benefits. If the Participant or his Beneficiary
hereunder shall become bankrupt or attempt to transfer, anticipate, alienate,
assign, sell, pledge, encumber or charge any right or benefit hereunder, other
than as contemplated by Paragraph 8, or if any creditor shall attempt to
subject the same to a writ of garnishment, attachment, execution,
sequestration, or any other form of process or involuntary lien or seizure,
then such right or benefit shall cease and terminate.

 

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3. Effect of Termination of Employment or Services

	 	(a)	 	The Performance Shares granted pursuant to this Agreement shall
vest in accordance with the vesting schedule reflected in Paragraph 2(a) above,
as long as the Participant remains employed by the Company or a Subsidiary.
The Performance Shares granted pursuant to this Agreement shall cease vesting
and shall be immediately forfeited upon the date the Participant terminates
employment, unless:

	 	(i)	 	the Company and its Subsidiaries terminate the
Participant’s employment prior to February 28, 2010 without “cause” (as
such term is defined in the Participant’s existing employment
agreement);

	 
	 	(ii)	 	the Participant’s employment terminates prior
to February 28, 2010 by reason of his “disability” (as such term is
defined in the Participant’s existing employment agreement) or his
death;

	 
	 	(iii)	 	the Participant resigns his employment with
the Company prior to February 28, 2010 upon the appointment of a
successor Chief Executive Officer of the Company; or

	 
	 	(iv)	 	the Participant terminates his employment with
the Company prior to February 28, 2010 following the assignment to the
Participant of duties materially inconsistent with his positions with
the Company or following any actions by the Company resulting in a
material diminution of his position or duties;

in which case, the Performance Shares that have not previously vested in
accordance with the vesting schedule reflected in Paragraph 2(a) above, as
of the date of such termination of employment shall continue to vest as if
the Participant continued to provide services to the Company up to the
Vesting Date.

4. Limitation of Rights

Nothing in this Agreement or the Plan shall be construed to:

	 	(a)	 	give the Participant any right to be awarded any further
Performance Shares or any other Award in the future, even if Performance Shares
or other Awards are granted on a regular or repeated basis, as grants of
Performance Shares and other Awards are completely voluntary and made solely in
the discretion of the Committee;

	 
	 	(b)	 	give the Participant or any other person any interest in any
fund or in any specified asset or assets of the Company or any Subsidiary; or

	 
	 	(c)	 	confer upon the Participant the right to continue in the
employment or service of the Company or any Subsidiary, or affect the right of
the Company or any Subsidiary to terminate the employment or service of the
Participant at any time or for any reason.

 

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5. Prerequisites to Benefits

Neither the Participant, nor any person claiming through the Participant, shall have any right
or interest in the Performance Shares awarded hereunder, unless and until all the terms, conditions
and provisions of this Agreement and the Plan which affect the Participant or such other person
shall have been complied with as specified herein.

6. Data Privacy

By execution of this Agreement, the Participant acknowledges that he/she has read and
understands the Flowserve Corporation Employee Data Protection Policy (the “Policy”). The
participant hereby consents to the collection, processing, transmission, use and electronic and
manual storage of their personal data by the Company, Merrill Lynch & Co., Inc. (“Merrill Lynch”)
and Solium Capital LLC (“Solium”) in order to facilitate Plan administration. The Participant
understands and acknowledges that this consent applies to all personally-identifiable data relevant
to Plan administration, including: name, home address, work email address, job title, GEMS ID,
National Identification Number or Social Security Number, employee status, work location, work
phone number, tax class, previous equity grant transaction data and compensation data.

The Participant understands that for purposes of Plan administration, the Participant’s
personal data will be collected and processed at 5215 N. O’Connor Blvd, Suite 2300, Irving, Texas
(USA), and transferred to Merrill Lynch at 4 World Financial Center, 250 Vesey St., New York, New
York (USA) and Solium at 25900 West Eleven Mile, Suite 140, Southfield, Michigan (USA).

7. Rights as a Stockholder

Subject to the limitations and restrictions contained herein, the Participant (or Beneficiary)
shall have all rights as a stockholder with respect to the shares of Performance Shares, including
the right to vote and receive dividends.

8. Successors and Assigns

This Agreement shall bind and inure to the benefit of and be enforceable by the Participant,
the Company and their respective permitted successors and assigns (including personal
representatives, heirs and legatees), except that the Participant may not assign any rights or
obligations under this Agreement except to the extent and in the manner expressly permitted herein.

9. Securities Act

The Company will not be required to deliver any shares of Common Stock pursuant to this
Agreement if, in the opinion of counsel for the Company, such issuance would violate the Securities
Act of 1933, as amended (the “Securities Act”) or any other applicable federal or state securities
laws or regulations. The Committee may require that the Participant, prior to the issuance of any
such shares, sign and deliver to the Company a written statement, which shall be in a form and
contain content acceptable to the Committee, in its sole discretion (“Investment Letter”):

	 	(a)	 	stating that the Participant is acquiring the shares for
investment and not with a view to the sale or distribution thereof;

	 
	 	(b)	 	stating that the Participant will not sell any shares of Common
Stock that the Participant may then own or thereafter acquire except either:

	 	(i)	 	through a broker on a national securities
exchange or

	 
	 	(ii)	 	with the prior written approval of the Company;
and

	 	(c)	 	containing such other terms and conditions as counsel for the
Company may reasonably require to assure compliance with the Securities Act or
other applicable federal or state securities laws and regulations.

 

4

 

10. Federal and State Taxes

	 	(a)	 	Any amount of Common Stock that is payable or transferable to
the Participant hereunder may be subject to the payment of or reduced by any
amount or amounts which the Company is required to withhold under the then
applicable provisions of the laws of the jurisdiction where the Participant is
employed, and, if applicable, the Internal Revenue Code of 1986, as amended
(the “Code”), or its successors, or any other foreign, federal, state or local
tax withholding requirement. When the Company is required to withhold any
amount or amounts under the applicable provisions of any foreign, federal,
state or local requirement or the Code, the Company shall withhold from the
Common Stock to be issued to the Participant a number of shares necessary to
satisfy the Company’s withholding obligations. The number of shares of Common
Stock to be withheld shall be based upon the Fair Market Value of the shares on
the date of withholding.

	 
	 	(b)	 	Notwithstanding Paragraph 10(a) above, if the Participant
elects, and the Committee agrees, the Company’s withholding obligations may
instead be satisfied as follows:

	 	(i)	 	the Participant may direct the Company to
withhold cash that is otherwise payable to the Participant;

	 
	 	(ii)	 	the Participant may deliver to the Company a
sufficient number of shares of Common Stock then owned by the
Participant to satisfy the Company’s withholding obligations, based on
the Fair Market Value of the shares as of the date of withholding;

	 
	 	(iii)	 	the Participant may deliver sufficient cash to
the Company to satisfy its withholding obligations; or

	 
	 	(iv)	 	any combination of the alternatives described
in Paragraphs 10(b)(i) through 10(b)(iii) above.

	 	(c)	 	Authorization of the Participant to the Company to withhold
taxes pursuant to one or more of the alternatives described in Paragraph 10(b)
above must be in a form and content acceptable to the Committee. The payment
or authorization to withhold taxes by the Participant shall be completed prior
to the delivery of any shares pursuant to this Agreement. An authorization to
withhold taxes pursuant to this provision will be irrevocable unless and until
the tax liability of the Participant has been fully paid.

 

5

 

11. Definitions; Copy of Plan

Except as specifically provided otherwise herein, all capitalized terms used in this Agreement
shall have the same meanings ascribed to them in the Plan. By the execution of this Agreement, the
Participant acknowledges receipt of a copy of the Plan.

12. Administration

This Agreement is subject to the terms and conditions of the Plan. The Plan will be
administered by the Committee in accordance with its terms. The Committee has sole and complete
discretion with respect to all matters reserved to it by the Plan and the decisions of the majority
of the Committee with respect to the Plan and this Agreement shall be final and binding upon the
Participant and the Company. In the event of any conflict between the terms and conditions of this
Agreement and the Plan, the provisions of the Plan shall control.

13. Adjustment of Number of Performance Shares

The number of Performance Shares granted hereunder shall be subject to adjustment in
accordance with Articles 11 and 12 of the Plan.

14. No Right to Stock

No Participant and no beneficiary or other person claiming under or through such Participant
shall have any right, title or interest in any shares of Common Stock allocated or reserved under
the Plan or subject to this Agreement, except as to such shares of Common Stock, if any, that have
been issued or transferred to such Participant.

15. Notice

Any notice to be given to the Company or the Committee shall be addressed to the Company in
care of its Secretary at its principal office. Any such notice shall be in writing and shall be
delivered personally or shall be sent by first class mail, postage prepaid, to the Company.

16. Amendments

This Agreement may be amended only by a written agreement executed by the Company and the
Participant. Any such amendment shall be made only upon the mutual consent of the parties, which
consent (of either party) may be withheld for any reason.

17. Governing Law

This Agreement shall be governed by, construed and enforced in accordance with the laws of the
State of Texas.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its officers
thereunto duly authorized, and the Participant has hereunto set his/her hand as of the day and year
first above written.

	 	 	 	 	 
	 	FLOWSERVE CORPORATION

 	 
	 	By:  	/s/ William C. Rusnack
 	 
	 	 	Name:  	William C. Rusnack 	 
	 	 	Title:  	Chairman, Organization and Compensation Committee 	 
	 
	 	Lewis Kling

 	 
	 	Name:  	/s/ Lewis M. Kling
 	 
	 	 	 	 
	 	 	 	 
	 

 

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