Document:

Exhibit

Exhibit 10.13 

Execution Version

GOLDMAN, SACHS & CO. | 200 WEST STREET | NEW YORK, NEW YORK 10282-2198 | TEL:  212-902-1000
Opening Transaction

	
		
	To:
	

Intuitive Surgical, Inc.
1266 Kifer Rd
Sunnyvale, CA 94086 

	A/C:
	#########

	From:
	Goldman, Sachs & Co.

	Re:
	Accelerated Stock Repurchases

	Ref. No:
	As provided in the Supplemental Confirmation

	Date:
	January 24, 2017

	 
	 

This master confirmation (this “Master Confirmation”), dated as of January 24, 2017 is intended to set forth certain terms and provisions of certain Transactions (each, a “Transaction”) entered into from time to time between Goldman, Sachs & Co. (“GS&Co.”) and Intuitive Surgical, Inc. (“Counterparty”).  This Master Confirmation, taken alone, is neither a commitment by either party to enter into any Transaction nor evidence of a Transaction.  The additional terms of any particular Transaction shall be set forth in (i) a Supplemental Confirmation in the form of Schedule A hereto (a “Supplemental Confirmation”) and (ii) a trade notification in the form of Schedule B hereto (a “Trade Notification”), each of which shall reference this Master Confirmation and supplement, form a part of, and be subject to this Master Confirmation.  This Master Confirmation, each Supplemental Confirmation and the related Trade Notification together shall constitute a “Confirmation” as referred to in the Agreement specified below.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Master Confirmation.  This Master Confirmation, each Supplemental Confirmation and the related Trade Notification evidence a complete binding agreement between Counterparty and GS&Co. as to the subject matter and terms of each Transaction to which this Master Confirmation, such Supplemental Confirmation and Trade Notification relate and shall supersede all prior or contemporaneous written or oral communications with respect thereto.
This Master Confirmation, each Supplemental Confirmation and each Trade Notification supplement form a part of, and are subject to an agreement in the form of the ISDA 2002 Master Agreement (the “Agreement”) as if GS&Co. and Counterparty had executed the Agreement on the date of this Master Confirmation (but without any Schedule except for (i) the election of New York law (without reference to its choice of laws doctrine other than Title 14 of Article 5 of the New York General Obligations Law) as the governing law, (ii) the election that subparagraph (ii) of Section 2(c) will not apply to the Transactions, and (iii) the election that the “Cross Default” provisions of Section 5(a)(vi), as amended by (x) deleting the words “, or becoming capable at such time of being declared,” from Section 5(a)(vi)(1) and (y) inserting at the end of Section 5(a)(vi) “; provided, however, that notwithstanding the foregoing, an Event of Default shall not be deemed to have occurred at any time under clause (2) hereof if the default is a failure to pay caused, as demonstrated to the reasonable satisfaction of the other party, solely by an error or omission of an administrative or operational nature where (i) funds required to make payment were available to the relevant party to enable it to make the relevant payment when due and (ii) such payment is in fact made within 2 Local Business Days after the relevant party receives written notice from an interested party of such default”, shall apply to GS&Co. and Counterparty, with a “Threshold Amount” of USD 50 million in each case).

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The Transactions shall be the sole Transactions under the Agreement.  If there exists any ISDA Master Agreement between GS&Co. and Counterparty or any confirmation or other agreement between GS&Co. and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between GS&Co. and Counterparty, then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to which GS&Co. and Counterparty are parties, the Transactions shall not be considered Transactions under, or otherwise governed by, such existing or deemed ISDA Master Agreement.
All provisions contained or incorporated by reference in the Agreement shall govern this Master Confirmation, each Supplemental Confirmation and each Trade Notification except as expressly modified herein or in the related Supplemental Confirmation. 
If, in relation to any Transaction to which this Master Confirmation, a Supplemental Confirmation and a related Trade Notification relate, there is any inconsistency between the Agreement, this Master Confirmation, any Supplemental Confirmation, any Trade Notification and the Equity Definitions, the following will prevail for purposes of such Transaction in the order of precedence indicated: (i) such Trade Notification; (ii) such Supplemental Confirmation; (iii) this Master Confirmation; (iv) the Equity Definitions; and (v) the Agreement.
1.Each Transaction constitutes a Share Forward Transaction for the purposes of the Equity Definitions.  Set forth below are the terms and conditions that, together with the terms and conditions set forth in the Supplemental Confirmation and Trade Notification relating to any Transaction, shall govern such Transaction.
General Terms:
		
	Trade Date:
	For each Transaction, as set forth in the related Supplemental Confirmation.

		
	Buyer:
	Counterparty

		
	Seller:
	GS&Co.

		
	Shares:
	Common Stock, par value USD 0.001 per share, of Counterparty (Ticker: ISRG)

		
	Exchange:
	The NASDAQ Global Select Market

		
	Related Exchange(s):
	All Exchanges.

Prepayment\Variable
		
	Obligation:
	Applicable

		
	Prepayment Amount:
	For each Transaction, as set forth in the related Supplemental Confirmation.

		
	Prepayment Date:
	For each Transaction, as set forth in the related Supplemental Confirmation.

Valuation:
		
	VWAP Price:
	For any Exchange Business Day, as determined by the Calculation Agent based on the NASDAQ 10b-18 Volume Weighted Average Price per Share for the regular trading session (including any extensions thereof) of the Exchange on such Exchange Business Day (without regard to pre-open or after hours trading outside of such regular trading session for such Exchange Business Day), as published by Bloomberg at 4:15 p.m. New York time (or 15 minutes following the end of any extension of the regular trading session) on such Exchange Business Day, on Bloomberg page “ISRG Q <Equity> AQR_SEC” (or any successor thereto), or if such price is not so reported on such Exchange Business Day for any reason or is, in the Calculation Agent’s reasonable discretion, erroneous, such VWAP Price shall be as reasonably determined by the Calculation Agent.  For purposes of calculating 

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the VWAP Price, the Calculation Agent will include only those trades that are reported during the period of time during which Counterparty could purchase its own shares under Rule 10b-18(b)(2) and are effected pursuant to the conditions of Rule 10b-18(b)(3), each under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (such trades, “Rule 10b-18 eligible transactions”).
		
	Forward Price:
	The average of the VWAP Prices for the Exchange Business Days in the Calculation Period, subject to “Valuation Disruption” below.

Forward Price
		
	Adjustment Amount:
	For each Transaction, as set forth in the related Supplemental Confirmation and Trade Notification.

		
	Calculation Period:
	The period from and including the Calculation Period Start Date to and including the Termination Date.

		
	Calculation Period Start Date:
	For each Transaction, as set forth in the related Supplemental Confirmation.

		
	Termination Date:
	The Scheduled Termination Date; provided that GS&Co. shall have the right to designate any Exchange Business Day on or after the First Acceleration Date to be the Termination Date (the “Accelerated Termination Date”) by delivering notice to Counterparty of any such designation prior to 6:00 P.M. New York City time on the designated Accelerated Termination Date.

		
	Scheduled Termination Date:
	For each Transaction, as set forth in the related Supplemental Confirmation, subject to postponement as provided in “Valuation Disruption” below.

		
	First Acceleration Date:
	For each Transaction, as set forth in the related Supplemental Confirmation.

		
	Valuation Disruption:
	The definition of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “at any time during the one-hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” and inserting the words “at any time on any Scheduled Trading Day during the Calculation Period or Settlement Valuation Period” after the word “material,” in the third line thereof.

Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof.
Notwithstanding anything to the contrary in the Equity Definitions, to the extent that a Disrupted Day occurs (i) in the Calculation Period, the Calculation Agent may, in its good faith and commercially reasonable discretion, postpone the Scheduled Termination Date, or (ii) in the Settlement Valuation Period, the Calculation Agent may extend the Settlement Valuation Period.  If any such Disrupted Day is a Disrupted Day because of a Market Disruption Event (or a deemed Market Disruption Event as provided herein), the Calculation Agent shall determine whether (i) such Disrupted Day is a Disrupted Day in full, in which case the VWAP Price for such Disrupted Day shall not be included for purposes of determining the Forward Price or the Settlement Price, as the case may be, or (ii) such Disrupted Day is a Disrupted Day only in part, in which case the VWAP Price for such Disrupted Day shall be determined by the Calculation Agent based on Rule 10b-18 eligible transactions in the Shares on such Disrupted Day effected before the relevant Market Disruption Event occurred and/or after the relevant Market Disruption Event ended, and the weighting of the VWAP Price for the 

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relevant Exchange Business Days during the Calculation Period or the Settlement Valuation Period, as the case may be, shall be adjusted in a commercially reasonable manner by the Calculation Agent for purposes of determining the Forward Price or the Settlement Price, as the case may be, with such adjustments based on, among other factors, the duration of any Market Disruption Event and the volume, historical trading patterns and price of the Shares.  Any Scheduled Trading Day on which the Exchange is scheduled to close prior to its normal close of trading shall be deemed to be a Disrupted Day in full.
If a Disrupted Day occurs during the Calculation Period or the Settlement Valuation Period, as the case may be, and each of the nine immediately following Scheduled Trading Days is a Disrupted Day, then the Calculation Agent, in its good faith and commercially reasonable discretion, may deem such ninth Scheduled Trading Day to be an Exchange Business Day that is not a Disrupted Day and determine the VWAP Price for such ninth Scheduled Trading Day using its good faith estimate of the value of the Shares on such ninth Scheduled Trading Day based on the volume, historical trading patterns and price of the Shares and such other factors as it deems appropriate.
Settlement Terms:    
		
	Settlement Procedures:
	If the Number of Shares to be Delivered is positive, Physical Settlement shall be applicable; provided that GS&Co. does not, and shall not, make the agreement or the representations set forth in Section 9.11 of the Equity Definitions related to the restrictions imposed by applicable securities laws with respect to any Shares delivered by GS&Co. to Counterparty under any Transaction.  If the Number of Shares to be Delivered is negative, then the Counterparty Settlement Provisions in Annex A shall apply. 

Number of Shares
		
	to be Delivered:
	A number of Shares equal to (i) (a) the Prepayment Amount divided by (b) the Divisor Amount minus (ii) the number of Initial Shares. 

		
	Divisor Amount:
	The greater of (i) the Forward Price minus the Forward Price Adjustment Amount and (ii) $60.00.  

		
	Excess Dividend Amount:
	For the avoidance of doubt, all references to the Excess Dividend Amount shall be deleted from Section 9.2(a)(iii) of the Equity Definitions.

		
	Settlement Date:
	If the Number of Shares to be Delivered is positive, the date that is one Settlement Cycle immediately following the Termination Date.

		
	Settlement Currency:
	USD

		
	Initial Share Delivery:
	GS&Co. shall deliver a number of Shares equal to the Initial Shares to Counterparty on the Initial Share Delivery Date in accordance with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date deemed to be a “Settlement Date” for purposes of such Section 9.4. 

		
	Initial Share Delivery Date:
	For each Transaction, as set forth in the related Supplemental Confirmation.

		
	Initial Shares:
	For each Transaction, as set forth in the related Supplemental Confirmation.

Share Adjustments:

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	Potential Adjustment Event:
	Notwithstanding anything to the contrary in Section 11.2(e) of the Equity Definitions, an Extraordinary Dividend shall not constitute a Potential Adjustment Event.

It shall constitute an additional Potential Adjustment Event if the Scheduled Termination Date for any Transaction is postponed pursuant to “Valuation Disruption” above, in which case the Calculation Agent may, in its commercially reasonable discretion, adjust any relevant terms of any such Transaction as appropriate to account for the economic effect on the Transaction of such postponement.    
		
	Extraordinary Dividend:
	Any dividend or distribution on the Shares (other than any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) or (B) of the Equity Definitions).

		
	Method of Adjustment:
	Calculation Agent Adjustment

Extraordinary Events:
Consequences of 
Merger Events:    

		
	(a)
	Share-for-Share:        Modified Calculation Agent Adjustment

		
	(b)
	Share-for-Other:        Cancellation and Payment

		
	(c)
	Share-for-Combined:    Component Adjustment

		
	Tender Offer:
	Applicable; provided that (i) Section 12.1(l) of the Equity Definitions shall be amended (x) by deleting the parenthetical in the fifth line thereof, (y) by replacing “that” in the fifth line thereof with “whether or not such announcement” and (z) by adding immediately after the words “Tender Offer” in the fifth line thereof “, and any publicly announced change or amendment to such an announcement (including the announcement of an abandonment of such intention)” and (ii) Sections 12.3(a) and 12.3(d) of the Equity Definitions shall each be amended by replacing each occurrence of the words “Tender Offer Date” by “Announcement Date”.

Consequences of 
Tender Offers:    

		
	(a)
	Share-for-Share:    Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of GS&Co.

		
	(b)
	Share-for-Other:    Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of GS&Co.

		
	(c)
	Share-for-Combined:    Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of GS&Co.

Nationalization, 
		
	Insolvency or Delisting:
	Cancellation and Payment; provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, NYSE MKT, The NASDAQ Global Select Market or The NASDAQ Global Market (or their 

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respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange.
Additional Disruption Events:
		
	(a)
	Change in Law:    Applicable

		
	(b)
	Failure to Deliver:    Applicable

		
	(c)
	Insolvency Filing:    Applicable

		
	(d)
	Loss of Stock Borrow:    Applicable

Maximum Stock Loan Rate:    275 basis points per annum
		
	Hedging Party:
	GS&Co.; provided that, upon request from Counterparty, GS&Co. shall promptly provide Counterparty with a written explanation describing in reasonable detail any determination or calculation made by GS&Co. as Hedging Party (but without disclosing GS&Co.’s proprietary models or other information that may be proprietary or subject to contractual, legal or regulatory obligations to not disclose such information).  Whenever the Hedging Party is required to act or to exercise judgment in any way with respect to any Transaction hereunder (but not, for the avoidance of doubt, the making of any election it is entitled to make as “Hedging Party”), it will do so in good faith and in a commercially reasonable manner.

		
	Determining Party:
	GS&Co.; provided that, upon request from Counterparty, GS&Co. shall promptly provide Counterparty with a written explanation describing in reasonable detail any determination or calculation made by GS&Co. as Determining Party (but without disclosing GS&Co.’s proprietary models or other information that may be proprietary or subject to contractual, legal or regulatory obligations to not disclose such information). Whenever the Determining Party is required to act or to exercise judgment in any way with respect to any Transaction hereunder, it will do so in good faith and in a commercially reasonable manner. 

		
	Hedging Adjustments:
	For the avoidance of doubt, whenever the Calculation Agent is called upon to make an adjustment pursuant to the terms of this Master Confirmation or the Equity Definitions to take into account the effect of an event, the Calculation Agent shall make such adjustment by reference to the effect of such event on GS&Co., assuming that GS&Co. maintains a commercially reasonable Hedge Position.

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	Additional Termination Event(s):
	Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, any Transaction would be cancelled or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event (with such terminated Transaction(s) (or portions thereof) being the Affected Transaction(s) and Counterparty being the sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to such Affected Transaction(s). 

The declaration by the Issuer of any Extraordinary Dividend, the ex-dividend date for which occurs or is scheduled to occur during the Relevant Dividend Period, will constitute an Additional Termination Event, with Counterparty as the sole Affected Party and all Transactions hereunder as the Affected Transactions. For the avoidance of doubt, any amount payable under Section 6(d)(ii) of the Agreement in respect of such Additional Termination Event shall be calculated without regard to such Extraordinary Dividend.
		
	Relevant Dividend Period:
	The period from and including the Calculation Period Start Date to and including the Relevant Dividend Period End Date.

Relevant Dividend Period 
		
	End Date:
	If Annex A applies, the last day of the Settlement Valuation Period; otherwise, the Termination Date. 

Non-Reliance/Agreements and
Acknowledgements Regarding 
Hedging Activities/Additional 
		
	Acknowledgements:
	Applicable

		
	Transfer:
	Notwithstanding anything to the contrary in the Agreement, GS&Co. may assign, transfer and set over all rights, title and interest, powers, privileges and remedies of GS&Co. under any Transaction, in whole or in part, to an affiliate of GS&Co. whose obligations are guaranteed by The Goldman Sachs Group, Inc. without the consent of Counterparty. GS&Co. shall promptly, and in any event within ten (10) Exchange Business Days, provide a written notice of such transfer pursuant to the immediately preceding sentence to Counterparty.

		
	GS&Co. Payment Instructions:
	Chase Manhattan Bank New York

For A/C Goldman, Sachs & Co.
A/C #############
ABA: ##########

Counterparty’s Contact Details
		
	for Purpose of Giving Notice:
	To be provided by Counterparty

    
GS&Co.’s Contact Details for
Purpose of Giving Notice:    Goldman, Sachs & Co.
200 West Street
New York, NY 10282-2198
Attention: ############, Equity Capital Markets
Telephone: ############
Facsimile: ############
Email: ###################

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With a copy to:

Attention:  #############, Equity Capital Markets
Telephone: ############
Facsimile: ############
Email: ####################

And email notification to the following address:
#####################################
2.    Calculation Agent. GS&Co.; provided that, upon receipt of a written request from Counterparty, the Calculation Agent shall use good faith efforts to provide to Counterparty, within five (5) Exchange Business Days from the receipt of such request, a written explanation describing in reasonable detail any calculation, adjustment or determination made by it (including any quotations, market data or information from external sources used in making such calculation, adjustment or determination, as the case may be, but without disclosing the Calculation Agent’s proprietary models or other information that is subject to contractual, legal or regulatory obligations to not disclose such information). 
3.    Additional Mutual Representations, Warranties and Covenants of Each Party.  In addition to the representations, warranties and covenants in the Agreement, each party represents, warrants and covenants to the other party that:
(i)    Eligible Contract Participant.  It is an “eligible contract participant”, as defined in the U.S. Commodity Exchange Act (as amended), and is entering into each Transaction hereunder as principal (and not as agent or in any other capacity, fiduciary or otherwise) and not for the benefit of any third party.
(ii)    Accredited Investor.  Each party acknowledges that the offer and sale of each Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(a)(2) thereof.  Accordingly, each party represents and warrants to the other that (i) it has the financial ability to bear the economic risk of its investment in each Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined under Regulation D under the Securities Act and (iii) the disposition of each Transaction is restricted under this Master Confirmation, the Securities Act and state securities laws.
3A.    Guarantee of The Goldman Sachs Group, Inc.  The obligations of GS&Co. in respect of each Transaction hereunder will be guaranteed by The Goldman Sachs Group, Inc. pursuant to (i) the General Guarantee Agreement, dated January 30, 2006, made by The Goldman Sachs Group, Inc. relating to certain obligations of GS&Co. (available as Exhibit 10.45 to The Goldman Sachs Group, Inc. Annual Report on Form 10-K for the fiscal year ended November 25, 2005), or (ii) any replacement or successor guarantee, which may be in the form of a general guarantee or a guarantee that specifically references the Transactions.  The parties agree and acknowledge that any such guarantee shall not be a Credit Support Document hereunder, and that the Goldman Sachs Group, Inc. shall not be a Credit Support Provider hereunder.
4.    Additional Representations, Warranties and Covenants of Counterparty.  In addition to the representations, warranties and covenants in the Agreement, Counterparty represents, warrants and covenants to GS&Co. that: 
(a)    The purchase or writing of each Transaction and the transactions contemplated hereby will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.
(b)    It is not entering into any Transaction (i) on the basis of, and is not aware of, any material non-public information with respect to the Shares, (ii) in anticipation of, in connection with, or to facilitate, a distribution of its securities, a self-tender offer or a third-party tender offer or (iii) to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares).
(c)    Each Transaction is being entered into pursuant to a publicly disclosed Share buy-back program and its Board of Directors has approved the use of derivatives to effect the Share buy-back program. 

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(d)    Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that neither GS&Co. nor any of its affiliates is making any representations or warranties or taking any position or expressing any view with respect to the treatment of any Transaction under any accounting standards including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity.
(e)    As of (i) the date hereof and (ii) the Trade Date for each Transaction hereunder, Counterparty is in compliance with its reporting obligations under the Exchange Act and its most recent Annual Report on Form 10-K, together with all reports subsequently filed by it pursuant to the Exchange Act, taken together and as amended and supplemented to the date of this representation, do not, as of their respective filing dates, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(f)    Counterparty shall report each Transaction as required under Regulation S-K under the Exchange Act.
(g)    The Shares are not, and Counterparty will not cause the Shares to be, subject to a “restricted period” (as defined in Regulation M promulgated under the Exchange Act (“Regulation M”)) at any time during any Regulation M Period (as defined below) for any Transaction unless Counterparty has provided written notice to GS&Co. of such restricted period not later than the Scheduled Trading Day immediately preceding the first day of such “restricted period”; Counterparty acknowledges that any such notice may cause a Disrupted Day to occur pursuant to Section 5 below; accordingly, Counterparty acknowledges that its delivery of such notice must comply with the standards set forth in Section 6 below; “Regulation M Period” means, for any Transaction, (i) the Relevant Period (as defined below) and (ii) the Settlement Valuation Period, if any, for such Transaction. “Relevant Period” means, for any Transaction, the period commencing on the Calculation Period Start Date for such Transaction and ending on the earlier of (i) the Scheduled Termination Date and (ii) the last Additional Relevant Day (as specified in the related Supplemental Confirmation) for such Transaction, or such earlier day as elected by GS&Co. and communicated to Counterparty on such day (or, if later, the First Acceleration Date without regard to any acceleration thereof pursuant to “Special Provisions for Acquisition Transaction Announcements” below).

(h)    As of the Trade Date and the Prepayment Date for each Transaction, Counterparty is not “insolvent” (as such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be able to purchase a number of Shares with a value equal to the Prepayment Amount in compliance with the laws of the jurisdiction of Counterparty’s incorporation.

(i)    Counterparty is not and, after giving effect to any Transaction, will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. 
(j)    Counterparty has not and will not enter into agreements similar to the Transactions described herein where any initial hedge period, calculation period, relevant period or settlement valuation period (each however defined) in such other transaction will overlap at any time (including as a result of extensions in such initial hedge period, calculation period, relevant period or settlement valuation period as provided in the relevant agreements) with any Relevant Period or, if applicable, any Settlement Valuation Period under this Master Confirmation.  In the event that the initial hedge period, relevant period, calculation period or settlement valuation period in any other similar transaction overlaps with any Relevant Period or, if applicable, Settlement Valuation Period under this Master Confirmation as a result of any postponement of the Scheduled Termination Date or extension of the Settlement Valuation Period pursuant to “Valuation Disruption” above, Counterparty shall promptly amend such transaction to avoid any such overlap.  
5.    Additional Covenants of GS&Co. In addition to the covenants in the Agreement, the Master Confirmation and herein, GS&Co. agrees to use commercially reasonable efforts, during any Settlement Valuation Period under this Master Confirmation, to make all purchases of Shares in connection with the Transaction in a manner that would comply with the limitations set forth in clauses (b)(2), (b)(3) and (b)(4) of Rule 10b-18 under the Exchange Act (“Rule 10b-18”), as if such rule was applicable to such purchases and taking into account any applicable Securities and Exchange Commission no-action letters as appropriate, and subject to any delays between the execution and reporting of a trade of the Shares on the Exchange and other circumstances beyond GS&Co.’s control; provided that, without limiting the 

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generality of the first sentence of this Paragraph 3, GS&Co. shall not be responsible for any failure to comply with Rule 10b-18(b)(3) to the extent any transaction that was executed (or deemed to be executed) by or on behalf of the Counterparty or an affiliated purchaser pursuant to a separate agreement is not deemed to be an “independent bid” or an “independent transaction” for purposes of Rule 10b-18(b)(3).
6.    Regulatory Disruption.  In the event that GS&Co. reasonably concludes in good faith and based on the advice of counsel, that it is appropriate with respect to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by GS&Co., but provided that such requirements, policies or procedures are generally applicable in similar situations and applied to the relevant Transaction in a non-discriminatory manner), for it to refrain from purchasing Shares on any Scheduled Trading Day or Days during the Calculation Period or, if applicable, the Settlement Valuation Period, GS&Co. may by written notice to Counterparty elect to deem that a Market Disruption Event has occurred and will be continuing on such Scheduled Trading Day or Days; provided that if such deemed Market Disruption Event is deemed to have occurred solely in response to such related policies or procedures, such Scheduled Trading Day or Days will each be a Disrupted Day in full.  GS&Co. shall promptly notify Counterparty upon exercising its rights pursuant to this provision and shall subsequently notify Counterparty in writing on the Scheduled Trading Day GS&Co. reasonably believes in good faith and upon the advice of counsel that it may resume its market activity.
7.    10b5-1 Plan.  Counterparty represents, warrants and covenants to GS&Co. that:
(a)    Counterparty is entering into this Master Confirmation and each Transaction hereunder in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”) or any other antifraud or anti-manipulation provisions of the federal or applicable state securities laws and that it has not entered into or altered and will not enter into or alter any corresponding or hedging transaction or position with respect to the Shares.  Counterparty acknowledges that it is the intent of the parties that each Transaction entered into under this Master Confirmation comply with the requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 and each Transaction entered into under this Master Confirmation shall be interpreted to comply with the requirements of Rule 10b5-1(c). 
(b)    Counterparty will not seek to control or influence GS&Co.’s decision to make any “purchases or sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under any Transaction entered into under this Master Confirmation, including, without limitation, GS&Co.’s decision to enter into any hedging transactions.  Counterparty represents and warrants that it has consulted with its own advisors as to the legal aspects of its adoption and implementation of this Master Confirmation, each Supplemental Confirmation and each Trade Notification under Rule 10b5-1.
(c)    Counterparty acknowledges and agrees that any amendment, modification, waiver or termination of this Master Confirmation, the relevant Supplemental Confirmation or Trade Notification must be effected in accordance with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c).  Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such amendment, modification or waiver shall be made at any time at which Counterparty or any officer, director, manager or similar person of Counterparty is aware of any material non-public information regarding Counterparty or the Shares.
8.    Counterparty Purchases.  Counterparty (or any “affiliated purchaser” as defined in Rule 10b-18) shall not, without the prior written consent of GS&Co., directly or indirectly purchase any Shares (including by means of a derivative instrument), listed contracts on the Shares or securities that are convertible into, or exchangeable or exercisable for Shares (including, without limitation, any Rule 10b-18 purchases of blocks (as defined in Rule 10b-18)) during any Relevant Period or, if applicable, Settlement Valuation Period, except through GS&Co. Notwithstanding the immediately preceding paragraph or anything herein to the contrary, Counterparty may purchase Shares on any Exchange Business Day during any Relevant Period pursuant to any Rule 10b5-1 or Rule 10b-18 repurchase plan entered into with GS&Co., so long as, on any such Exchange Business Day, such purchases do not in the aggregate exceed 5% of the ADTV (as such term is defined in Rule 10b-18(a)(1)) on such Exchange Business Day. 

10

9.    Special Provisions for Merger Transactions.  Notwithstanding anything to the contrary herein or in the Equity Definitions: 
(a)    Counterparty agrees that it:
(i)    will not during the period commencing on the Trade Date through the end of the Relevant Period or, if applicable, the Settlement Valuation Period for any Transaction make, or permit to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction or potential Merger Transaction unless such public announcement is made prior to the opening or after the close of the regular trading session on the Exchange for the Shares;
(ii)    shall promptly notify GS&Co. following any such announcement that such announcement has been made (and Counterparty shall use commercially reasonable efforts to so notify GS&Co. prior to the next opening of the regular trading session on the Exchange); and
(iii)    shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide GS&Co. with written notice specifying (i) Counterparty’s average daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar months immediately preceding the announcement date that were not effected through GS&Co. or its affiliates and (ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months preceding the announcement date.  Such written notice shall be deemed to be a certification by Counterparty to GS&Co. that such information is true and correct.  In addition, Counterparty shall promptly notify GS&Co. of the earlier to occur of the completion of such transaction and the completion of the vote by target shareholders.  Counterparty acknowledges that any such notice may cause the terms of any Transaction to be adjusted or such Transaction to be terminated; accordingly, Counterparty acknowledges that its delivery of such notice must comply with the standards set forth in Section 6 above. 
(b)    GS&Co. in its commercially reasonable discretion may (i) make adjustments in good faith and in a commercially reasonable manner to the terms of any Transaction, including, without limitation, the Scheduled Termination Date or the Forward Price Adjustment Amount, and/or suspend the Calculation Period and/or any Settlement Valuation Period or (ii) treat the occurrence of such public announcement as an Additional Termination Event with Counterparty as the sole Affected Party and the Transactions hereunder as the Affected Transactions and with the amount under Section 6(e) of the Agreement determined taking into account the fact that the Calculation Period or Settlement Valuation Period, as the case may be, had fewer Scheduled Trading Days than originally anticipated.
“Merger Transaction” means any merger, acquisition or similar transaction involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act, other than, solely for purposes of this Section 9, any such transaction in which the consideration consists solely of cash and there is no valuation period.
10.    Special Provisions for Acquisition Transaction Announcements.  (a) If an Acquisition Transaction Announcement occurs on or prior to the Settlement Date for any Transaction, then the Calculation Agent shall make such adjustments to the exercise, settlement, payment or any other terms of such Transaction (including, without limitation, the Forward Price Adjustment Amount) as the Calculation Agent determines appropriate, at such time or at multiple times as the Calculation Agent determines appropriate, to account for the economic effect on such Transaction of such Acquisition Transaction Announcement (including adjustments to account for changes in volatility, expected dividends, stock loan rate and liquidity relevant to the Shares or to such Transaction).   If an Acquisition Transaction Announcement occurs after the Trade Date, but prior to the First Acceleration Date of any Transaction, the First Acceleration Date shall be the date of such Acquisition Transaction Announcement.  
(b)    “Acquisition Transaction Announcement” means (i) the announcement of an Acquisition Transaction, (ii) an announcement that Counterparty or any of its subsidiaries has entered into an agreement, a letter of intent or an understanding designed to result in an Acquisition Transaction, (iii) the announcement of the intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, an Acquisition Transaction, (iv) any other announcement that in the reasonable judgment of the Calculation Agent may result in an 

11

Acquisition Transaction or (v) any announcement of any change or amendment to any previous Acquisition Transaction Announcement (including any announcement of the abandonment of any such previously announced Acquisition Transaction, agreement, letter of intent, understanding or intention).  For the avoidance of doubt, announcements as used in the definition of Acquisition Transaction Announcement refer to any public announcement whether made by the Issuer or a third party.
(c)    “Acquisition Transaction” means (i) any Merger Event (for purposes of this definition the definition of Merger Event shall be read with the references therein to “100%” being replaced by “15%” and to “50%” by “75%” and without reference to the clause beginning immediately following the definition of Reverse Merger therein to the end of such definition), Tender Offer or Merger Transaction or any other transaction involving the merger of Counterparty with or into any third party, (ii) the sale or transfer of all or substantially all of the assets of Counterparty, (iii) a recapitalization, reclassification, binding share exchange or other similar transaction, (iv) any acquisition, lease, exchange, transfer, disposition (including by way of spin-off or distribution) of assets (including any capital stock or other ownership interests in subsidiaries) or other similar event by Counterparty or any of its subsidiaries where the aggregate consideration transferable or receivable by or to Counterparty or its subsidiaries exceeds 15% of the market capitalization of Counterparty and (v) any transaction in which Counterparty or its board of directors has a legal obligation to make a recommendation to its shareholders in respect of such transaction (whether pursuant to Rule 14e-2 under the Exchange Act or otherwise).
		
	11.
	Acknowledgments.  (a) The parties hereto intend for:

(i)    each Transaction to be a “securities contract” as defined in Section 741(7) of the Bankruptcy Code, a “swap agreement” as defined in Section 101(53B) of the Bankruptcy Code and a “forward contract” as defined in Section 101(25) of the Bankruptcy Code, and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 362(b)(27), 362(o), 546(e), 546(g), 546(j), 555, 556, 560 and 561 of the Bankruptcy Code;
(ii)    the Agreement to be a “master netting agreement” as defined in Section 101(38A) of the Bankruptcy Code;
(iii)    a party’s right to liquidate, terminate or accelerate any Transaction, net out or offset termination values or payment amounts, and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the termination or cancellation of any Transaction to constitute a “contractual right” (as defined in the Bankruptcy Code); and
(iv)    all payments for, under or in connection with each Transaction, all payments for the Shares (including, for the avoidance of doubt, payment of the Prepayment Amount) and the transfer of such Shares to constitute “settlement payments” and “transfers” (as defined in the Bankruptcy Code).
(b)     Counterparty acknowledges that:
(i)    during the term of any Transaction, GS&Co. and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to establish, adjust or unwind its hedge position with respect to such Transaction;
(ii)    GS&Co. and its affiliates may also be active in the market for the Shares and derivatives linked to the Shares other than in connection with hedging activities in relation to any Transaction, including acting as agent or as principal and for its own account or on behalf of customers;
(iii)    GS&Co. shall make its own determination as to whether, when or in what manner any hedging or market activities in Counterparty’s securities shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Forward Price and the VWAP Price;

12

(iv)    any market activities of GS&Co. and its affiliates with respect to the Shares may affect the market price and volatility of the Shares, as well as the Forward Price and VWAP Price, each in a manner that may be adverse to Counterparty; and
(v)    each Transaction is a derivatives transaction in which it has granted GS&Co. an option;  GS&Co. may purchase shares for its own account at an average price that may be greater than, or less than, the price paid by Counterparty under the terms of the related Transaction.
(c)    Counterparty:
(i)    is an “institutional account” as defined in FINRA Rule 4512(c);
(ii)    is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, and will exercise independent judgment in evaluating the recommendations of GS&Co. or its associated persons, unless it has otherwise notified GS&Co. in writing; and
(iii)    will notify GS&Co. if any of the statements contained in clause (i) or (ii) of this Section 10(c) ceases to be true.
12.    Credit Support Documents.  The parties hereto acknowledge that no Transaction hereunder is secured by any collateral that would otherwise secure the obligations of Counterparty herein or pursuant to the Agreement. 
13.    No Netting or Set-off.  Obligations under any Transaction shall not be netted, recouped or set off (including pursuant to Section 6 of the Agreement) against any other obligations of the parties, whether arising under the Agreement, this Master Confirmation, any Supplemental Confirmation, any Trade Notification or under any other agreement between the parties hereto, by operation of law or otherwise, and no other obligations of the parties shall be netted, recouped or set off (including pursuant to Section 6 of the Agreement) against obligations under any Transaction, whether arising under the Agreement, this Master Confirmation, any Supplemental Confirmation, any Trade Notification or under any other agreement between the parties hereto, by operation of law or otherwise, and each party hereby waives any such right of setoff, netting or recoupment.
14.    Delivery of Shares.  Notwithstanding anything to the contrary herein, GS&Co. may, by prior notice to Counterparty, satisfy its obligation to deliver any Shares or Alternative Delivery Property on any date due (an “Original Delivery Date”) by making separate deliveries of Shares or such Alternative Delivery Property, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate number of Shares and/or Alternative Delivery Units so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered on such Original Delivery Date.
15.    Early Termination.  In the event that an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to any Transaction (except as a result of a Merger Event in which the consideration or proceeds to be paid to holders of Shares consists solely of cash), if either party would owe any amount to the other party pursuant to Section 6(d)(ii) of the Agreement or Article 12 of the Equity Definitions (any such amount, a “Payment Amount”), then, in lieu of any payment of such Payment Amount, Counterparty may, no later than the Early Termination Date or the date on which such Transaction is terminated, elect to deliver or for GS&Co. to deliver, as the case may be, to the other party a number of Shares (or, in the case of a Merger Event, a number of units, each comprising the number or amount of the securities or property that a hypothetical holder of one Share would receive in such Merger Event (each such unit, an “Alternative Delivery Unit” and, the securities or property comprising such unit, “Alternative Delivery Property”)) with a value equal to the Payment Amount, as determined by the Calculation Agent (and the parties agree that, in making such determination of value, the Calculation Agent may take into account a number of factors, including the market price of the Shares or Alternative Delivery Property on the date of early termination and, if such delivery is made by GS&Co., the prices at which GS&Co. purchases Shares or Alternative Delivery Property, in a commercially reasonable manner and over a commercially reasonable time period, to fulfill its delivery obligations under this Section 15); provided that in determining the composition of any Alternative 

13

Delivery Unit, if the relevant Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash. If such delivery is made by Counterparty, paragraphs 2 through 7 of Annex A shall apply as if such delivery were a settlement of the Transaction to which Net Share Settlement applied, the Cash Settlement Payment Date were the Early Termination Date and the Forward Cash Settlement Amount were zero (0) minus the Payment Amount owed by Counterparty.
16.    Calculations and Payment Date upon Early Termination.  The parties acknowledge and agree that in calculating (a) the Close-Out Amount pursuant to Section 6 of the Agreement and (b) the amount due upon cancellation or termination of any Transaction (whether in whole or in part) pursuant to Article 12 of the Equity Definitions as a result of an Extraordinary Event, GS&Co. may (but need not) determine such amount based on (i) expected losses assuming a commercially reasonable (including, without limitation, with regard to reasonable legal and regulatory guidelines) risk bid were used to determine loss or (ii) the price at which one or more market participants would offer to sell to the Seller a block of Shares equal in number to the Seller’s hedge position in relation to the Transaction.  Notwithstanding anything to the contrary in Section 6(d)(ii) of the Agreement or Article 12 of the Equity Definitions, all amounts calculated as being due in respect of an Early Termination Date under Section 6(e) of the Agreement or upon cancellation or termination of the relevant Transaction under Article 12 of the Equity Definitions will be payable on the second Exchange Business Day immediately following the day that notice of the amount payable is effective; provided that if Counterparty elects to receive or deliver Shares or Alternative Delivery Units in accordance with Section 15, such Shares or Alternative Delivery Units shall be delivered on a date selected by the Calculation Agent as promptly as practicable thereafter.
17.    Automatic Termination Provisions.  Notwithstanding anything to the contrary in Section 6 of the Agreement, if a Termination Price is specified in any Supplemental Confirmation, then an Additional Termination Event with Counterparty as the sole Affected Party and the Transaction to which such Supplemental Confirmation relates as the Affected Transaction will automatically occur without any notice or action by GS&Co. or Counterparty if the price of the Shares on the Exchange at any time falls below such Termination Price at any time on two consecutive Exchange Business Days, and such second consecutive Exchange Business Day will be the “Early Termination Date” for purposes of the Agreement.
18.    Delivery of Cash.  For the avoidance of doubt, nothing in this Master Confirmation shall be interpreted as requiring Counterparty to deliver cash in respect of the settlement of the Transactions contemplated by this Master Confirmation following payment by Counterparty of the relevant Prepayment Amount, except in circumstances where the required cash settlement thereof is permitted for classification of the contract as equity by ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity as in effect on the relevant Trade Date (including, without limitation, where Counterparty so elects to deliver cash or fails timely to elect to deliver Shares or Alternative Delivery Property in respect of the settlement of such Transactions).
19.    Claim in Bankruptcy.  GS&Co. acknowledges and agrees that this Master Confirmation is not intended to convey to it rights with respect to any Transaction hereunder that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy.
20.    [Reserved].  
21.    [Reserved].
22.    Governing Law.  The Agreement, this Master Confirmation, each Supplemental Confirmation, each Trade Notification and all matters arising in connection with the Agreement, this Master Confirmation, each Supplemental Confirmation and each Trade Notification shall be governed by, and construed and enforced in accordance with, the laws of the State of New York (without reference to its choice of laws doctrine other than Title 14 of Article 5 of the New York General Obligations Law).
		
	23.
	Offices.

(a)    The Office of GS&Co. for each Transaction is:  200 West Street, New York, NY 10282-2198.    

14

(b)    The Office of Counterparty for each Transaction is: Intuitive Surgical, Inc., 1266 Kifer Rd, Sunnyvale, CA 94086.
24.    Arbitration.  The Agreement, this Master Confirmation, each Supplemental Confirmation and each Trade Notification are subject to the following arbitration provisions:
(a)    All parties to this Master Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed.
(b)    Arbitration awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.
(c)    The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings.
(d)    The arbitrators do not have to explain the reason(s) for their award.
(e)    The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless Counterparty is a member of the organization sponsoring the arbitration facility, in which case all arbitrators may be affiliated with the securities industry.
(f)    The rules of some arbitration forums may impose time limits for bringing a claim in arbitration.  In some cases, a claim that is ineligible for arbitration may be brought in court.
(g)    The rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Master Confirmation.
Counterparty agrees that any and all controversies that may arise between Counterparty and GS&Co., including, but not limited to, those arising out of or relating to the Agreement or any Transaction hereunder, shall be determined by arbitration conducted before FINRA Dispute Resolution (“FINRA-DR”), or if FINRA-DR declines to hear the matter, before the American Arbitration Association, in accordance with their arbitration rules then in force.  The award of the arbitrator shall be final, and judgment upon the award rendered may be entered in any court, state or federal, having jurisdiction. 
No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the class is decertified; or (iii) Counterparty is excluded from the class by the court.
Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Master Confirmation except to the extent stated herein.
25.    Counterparts.    This Master Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Master Confirmation by signing and delivering one or more counterparts.

    

15

Counterparty hereby agrees (a) to check this Master Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by GS&Co.) correctly sets forth the terms of the agreement between GS&Co. and Counterparty with respect to any particular Transaction to which this Master Confirmation relates, by manually signing this Master Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, facsimile No. ###############.
Yours faithfully,
GOLDMAN, SACHS & CO.
	
		
	By:
	/s/ DANIELA ROUSE

	 
	Authorized Signatory

	 
	Name: Daniela Rouse

	 
	Title: Vice President

Agreed and Accepted By:
INTUITIVE SURGICAL, INC.
	
		
	By:
	 /s/ MARSHALL L. MOHR

	 
	Name: Marshall L. Mohr

	 
	Title: Senior Vice President and Chief Financial Officer

16

SCHEDULE A 
 
SUPPLEMENTAL CONFIRMATION
	
		
	To:
	

Intuitive Surgical, Inc.
1266 Kifer Rd
Sunnyvale, CA 94086

	From:
	Goldman, Sachs & Co.

	Subject:
	Accelerated Stock Repurchases

	Ref. No:
	[Insert Reference No.]

	Date:
	[Insert Date]

The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the Transaction entered into between Goldman, Sachs & Co. (“GS&Co.”) and Intuitive Surgical, Inc. (“Counterparty”) (together, the “Contracting Parties”) on the Trade Date specified below.  Supplemental Confirmation is a binding contract between GS&Co. and Counterparty as of the relevant Trade Date for the Transaction referenced below.
1.    This Supplemental Confirmation supplements, forms part of, and is subject to the Master Confirmation dated as of January 24, 2017 (the “Master Confirmation”) between the Contracting Parties, as amended and supplemented from time to time.  All provisions contained in the Master Confirmation govern this Supplemental Confirmation except as expressly modified below.
2.    The terms of the Transaction to which this Supplemental Confirmation relates are as follows:
	
		
	Trade Date:
	[               ]

	Forward Price Adjustment Amount:   
	As set forth in the Trade Notification, to be the product of the Relevant Closing Price on the Reference Date and the Discount Percentage.

	Reference Date:
	The first Exchange Business Day following the Trade Date

	Testing Times:
	Each of 1:00 p.m., New York City time, 2:00 p.m., New York City time, 3:00 p.m., New York City time, and 3:30 p.m., New York City time.

A-1

	
		
	Discount Percentage:
	The Discount Percentage shall be set forth in the Trade Notification and shall be determined by the Calculation Agent based on the Discount Percentage Table in Appendix I hereto (the “Table”) by reference to the Reference Implied Volatility.  In each such case, 
(ii)    the figures appearing in the Table are the Discount Percentage for those Reference Implied Volatilities that appear exactly in the relevant row of such table; 
(iii)    for Reference Implied Volatilities falling between the amounts appearing in such column or row, as applicable, the Discount Percentage will be calculated by the Calculation Agent using linear interpolation; 
(iv)    if the Discount Percentage is otherwise not determinable pursuant to the foregoing because the Reference Implied Volatility is less than the lowest Reference Implied Volatility appearing in the Table, the Discount Percentage will be determined by the Calculation Agent by reference to such lowest Reference Implied Volatility; and
(v)    if the Discount Percentage is otherwise not determinable pursuant to the foregoing because the Reference Implied Volatility is greater than the highest Reference Implied Volatility appearing in the Table, such Discount Percentage will be determined by the Calculation Agent by reference to such highest Reference Implied Volatility.

	Reference Implied Volatility:
	The arithmetic average of the Relevant Listed Volatilities for each Option Reference Date at each Testing Time.  The Reference Implied Volatility determined as described above shall be set forth in the Trade Notification.

	Relevant Listed Volatility:
	If, for any Option Reference Date at any Testing Time, there is a listed put option expiring on such Option Reference Date with a strike price equal to the Intraday Price as of such Testing Time, the Relevant Listed Volatility for such Option Reference Date at such Testing Time shall be the Listed Volatility at such Testing Time for such listed put option.  If, for any Option Reference Date and any Testing Time, the Intraday Price as of such Testing Time does not match any of the strike prices of the listed put options expiring on such Option Reference Date, the Relevant Listed Volatility for such Option Reference Date at such Testing Time shall be the volatility determined for the put option expiring on such Option Reference Date by the Calculation Agent using the Listed Volatility at such Testing Time of the listed put option expiring on such Option Reference Date with a strike price that is next-higher than the Intraday Price as of such Testing Time.  If, for any Option Reference Date at any Testing Time, there are no listed put options expiring on such Option Reference Date with a strike price that is higher than the Intraday Price as of such Testing Time, the Relevant Listed Volatility for such Option Reference Date at the relevant Testing Time shall be as determined by the Calculation Agent in a commercially reasonable manner.

	Listed Volatility:
	For any listed option and any Testing Time, as determined by the Calculation Agent based on bid implied volatility (IVB) as published by Bloomberg on Bloomberg page “ISRG Q <equity> OMON <GO>” (or any successor thereto) at such Testing Time, or if such Exchange Business Day is a Disrupted Day (in whole or in part), such volatility is not so reported at such Testing Time for any reason or the reported volatility is clearly erroneous, the Listed Volatility shall be as determined by the Calculation Agent in a commercially reasonable manner.

A-2

	
		
	Option Reference Dates:
	The scheduled listed options expiry dates for each of April 2017 and July 2017.

	Relevant Closing Price:
	For any Exchange Business Day, the closing price per Share for the regular trading session (including any extensions thereof) of the Exchange on such Exchange Business Day, as determined by the Calculation Agent based on Bloomberg page “ISRG Q <equity> QR <GO>” (or any successor thereto) at 4:15 p.m. New York City time (or 15 minutes following the end of any extension of the regular trading session of the Exchange) on such Exchange Business Day, or if such Exchange Business Day is a Disrupted Day (determined pursuant to the Equity Definitions without any amendment or modification), if such price is not so reported on such Exchange Business Day for any reason or the reported price is clearly erroneous, the Relevant Closing Price shall be as determined by the Calculation Agent in a commercially reasonable manner.

	Intraday Price:
	For any Testing Time, the per Share price on the Exchange at such Testing Time as determined by the Calculation Agent, or if a Market Disruption Event (determined pursuant to the Equity Definitions as modified by the Master Confirmation) is ongoing at such Testing Time, if such price is not so reported on the Exchange at such Testing Time for any reason or if the reported price on the Exchange at such Testing Time is clearly erroneous, the Intraday Price at such Testing Time shall be as determined by the Calculation Agent in a commercially reasonable manner.

	Calculation Period Start Date:
Scheduled Termination Date:
	[               ]
[               ]

	First Acceleration Date:
	[               ]

	Prepayment Amount:
	[               ]

	Prepayment Date:
	[               ]

	Initial Shares:
	[               ] Shares; provided that if, in connection with the Transaction, GS&Co. is unable to borrow or otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that GS&Co. is able to so borrow or otherwise acquire ; provided further that if the Initial Shares are reduced as provided in the preceding proviso, then GS&Co. shall use commercially reasonable efforts to borrow or otherwise acquire an additional number of Shares equal to the shortfall in the Initial Shares delivered on the Initial Share Delivery Date and shall deliver such additional Shares as promptly as practicable, and all Shares so delivered shall be considered Initial Shares.

	Initial Share Delivery Date:
	[               ]

	Termination Price:
	USD [       ] per Share

	Additional Relevant Days:
	The 5 Exchange Business Days immediately following the Calculation Period.

3.    Counterparty represents and warrants to GS&Co. that neither it nor any “affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act during either (i) the four full calendar weeks immediately preceding the Trade Date or (ii) during the calendar week in which the Trade Date occurs.
4.    Notwithstanding anything to the contrary herein or in the Master Confirmation: 

A-3

(i)            the effectiveness of the Transaction evidenced by this Supplemental Confirmation is conditioned on Counterparty’s release, and public dissemination thereof, following execution hereof (and in all cases on the Trade Date), of the press release disclosing (x) its entry into this Transaction and (y) earnings and related financial results for the quarter ending on or about December 31, 2016  (such time of release and public dissemination, the “Release Time”); and
(ii)          the representations and warranties of Counterparty in clause (i) of Section 4(b) shall be deemed to be given immediately following the Release Time on the Trade Date and not as of the time that Counterparty executes this Supplemental Confirmation.
5.    This Supplemental Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Supplemental Confirmation by signing and delivering one or more counterparts.

A-4

Counterparty hereby agrees (a) to check this Supplemental Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by GS&Co.) correctly sets forth the terms of the agreement between GS&Co. and Counterparty with respect to the Transaction to which this Supplemental Confirmation relates, by manually signing this Supplemental Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, facsimile No. ###############.
Yours sincerely, 
 
GOLDMAN, SACHS & CO.
	
		
	By:
	/s/ DANIELA ROUSE

	 
	Authorized Signatory

	 
	Name: Daniela Rouse

	 
	Title: Vice President

Agreed and Accepted By:
INTUITIVE SURGICAL, INC.
	
		
	By:
	 /s/ MARSHALL L. MOHR

	 
	Name: Marshall L. Mohr

	 
	Title: Senior Vice President and Chief Financial Officer

A-5

APPENDIX I

DISCOUNT PERCENTAGE TABLE

	
		
	Reference Implied Volatility
	Discount Percentage

	[ ]
	[ ]

A-6

SCHEDULE B
TRADE NOTIFICATION
	
		
	To:
	

Intuitive Surgical, Inc.
1266 Kifer Rd
Sunnyvale, CA 94086

	From:
	Goldman, Sachs & Co.

	Subject:
	Accelerated Stock Repurchases

	Ref. No:
	[Insert Reference No.]

	Date:
	[Insert Date]

The purpose of this Trade Notification is to notify you of certain terms in the Transaction entered into between Goldman, Sachs & Co. (“GS&Co.”) and Intuitive Surgical, Inc. (“Counterparty”) (together, the “Contracting Parties”) bearing the trade reference number set forth above.  
This Trade Notification supplements, forms part of, and is subject to (i) the Supplemental Confirmation dated as of January 24, 2017 between the Contracting Parties, as amended and supplemented from time to time (the “Supplemental Confirmation”) and (ii) the Master Confirmation dated as of January 24, 2017 between the Contracting Parties, as amended and supplemented from time to time (the “Master Confirmation”). All provisions contained in the Master Confirmation and Supplemental Confirmation govern this Trade Notification except as expressly modified below.
	
		
	Relevant Closing Price:
	USD [     ]

	Discount Percentage:
	[     ]

	Reference Implied Volatility:
	[     ]

	Forward Price Adjustment Amount:
	USD [     ]

Yours sincerely,
GOLDMAN, SACHS & CO.
By:  ________________________________ 
Authorized Signatory

B-1

ANNEX A
COUNTERPARTY SETTLEMENT PROVISIONS
1.    The following Counterparty Settlement Provisions shall apply to the extent indicated under the Master Confirmation:
		
	Settlement Currency:
	USD

		
	Settlement Method Election:
	Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby amended by deleting the word “Physical” in the sixth line thereof and replacing it with the words “Net Share” and (ii) the Electing Party may make a settlement method election only if the Electing Party represents and warrants to GS&Co. in writing on the date it notifies GS&Co. of its election that, as of such date, the Electing Party is not aware of any material non-public information concerning Counterparty or the Shares and is electing the settlement method in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws.

		
	Electing Party:
	Counterparty

Settlement Method 
		
	Election Date:
	The earlier of (i) the Scheduled Termination Date and (ii) the second Exchange Business Day immediately following the Accelerated Termination Date (in which case the election under Section 7.1 of the Equity Definitions shall be made no later than 10 minutes prior to the open of trading on the Exchange on such second  Exchange Business Day), as the case may be.

		
	Default Settlement Method:
	Cash Settlement

Forward Cash Settlement 
		
	Amount:
	The Number of Shares to be Delivered multiplied by the Settlement Price.

		
	Settlement Price:
	The average of the VWAP Prices for the Exchange Business Days in the Settlement Valuation Period, subject to Valuation Disruption as specified in the Master Confirmation.

		
	Settlement Valuation Period:
	A number of Scheduled Trading Days selected by GS&Co. in its good faith commercially reasonable discretion by reference to (x) the then-prevailing volume limitations of Rule 10b-18 in respect of the Shares and (y) the number of commercially reasonable Scheduled Trading Days necessary or advisable to unwind a commercially reasonable hedge position, beginning on the Scheduled Trading Day immediately following the earlier of (i) the Scheduled Termination Date or (ii) the Exchange Business Day immediately following the Termination Date.  

		
	Cash Settlement:
	If Cash Settlement is applicable, then Buyer shall pay to Seller the absolute value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date. 

1

Cash Settlement 
		
	Payment Date:
	The date one Settlement Cycle following the last day of the Settlement Valuation Period.

Net Share Settlement
		
	Procedures:
	If Net Share Settlement is applicable, Net Share Settlement shall be made in accordance with paragraphs 2 through 7 below.  

2.    Net Share Settlement shall be made by delivery on the Cash Settlement Payment Date of a number of Shares satisfying the conditions set forth in paragraph 3 below (the “Registered Settlement Shares”), or a number of Shares not satisfying such conditions (the “Unregistered Settlement Shares”), in either case with a value equal to the absolute value of the Forward Cash Settlement Amount, as determined by the Calculation Agent, with such Shares’ value determined by the Calculation Agent (which value shall, in the case of Unregistered Settlement Shares, take into account a commercially reasonable illiquidity discount).

3.    Counterparty may only deliver Registered Settlement Shares pursuant to paragraph 2 above if:
(a)    a registration statement covering public resale of the Registered Settlement Shares by GS&Co. (the “Registration Statement”) shall have been filed with the Securities and Exchange Commission under the Securities Act and been declared or otherwise become effective on or prior to the date of delivery, and no stop order shall be in effect with respect to the Registration Statement; a printed prospectus relating to the Registered Settlement Shares (including any prospectus supplement thereto, the “Prospectus”) shall have been delivered to GS&Co., in such quantities as GS&Co. shall reasonably have requested, on or prior to the date of delivery;
(b)    the form and content of the Registration Statement and the Prospectus (including, without limitation, any sections describing the plan of distribution) shall be satisfactory to GS&Co.;
(c)    as of or prior to the date of delivery, GS&Co. and its agents shall have been afforded a reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for underwritten offerings of equity securities of similar size and the results of such investigation are satisfactory to GS&Co., in its discretion; and
(d)    as of the date of delivery, an agreement (the “Underwriting Agreement”) shall have been entered into with GS&Co. in connection with the public resale of the Registered Settlement Shares by GS&Co. substantially similar to underwriting agreements customary for underwritten offerings of equity securities of similar size, in form and substance satisfactory to GS&Co., which Underwriting Agreement shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, GS&Co. and its affiliates and the provision of customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters.
4.    If Counterparty delivers Unregistered Settlement Shares pursuant to paragraph 2 above:
(a)    all Unregistered Settlement Shares shall be delivered to GS&Co. (or any affiliate of GS&Co. designated by GS&Co.) pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof;
(b)    as of or prior to the date of delivery, GS&Co. and any potential purchaser of any such shares from GS&Co. (or any affiliate of GS&Co. designated by GS&Co.) identified by GS&Co. shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for private placements of equity securities for an issuance of similar size (including, without limitation, the 

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right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them); 
(c)    as of the date of delivery, Counterparty shall enter into an agreement (a “Private Placement Agreement”) with GS&Co. (or any affiliate of GS&Co. designated by GS&Co.) in connection with the private placement of such shares by Counterparty to GS&Co. (or any such affiliate) and the private resale of such shares by GS&Co. (or any such affiliate), substantially similar to private placement purchase agreements customary for private placements of equity securities for an issuance of similar size, in form and substance commercially reasonably satisfactory to GS&Co., which Private Placement Agreement shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, GS&Co. and its affiliates and the provision of customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters, and shall provide for the payment by Counterparty of all reasonable fees and expenses in connection with such resale, including all reasonable fees and expenses of counsel for GS&Co., and shall contain representations, warranties, covenants and agreements of Counterparty reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales; and
(d)    in connection with the private placement of such shares by Counterparty to GS&Co. (or any such affiliate) and the private resale of such shares by GS&Co. (or any such affiliate), Counterparty shall, if so requested by GS&Co., prepare, in cooperation with GS&Co., a private placement memorandum in form and substance reasonably satisfactory to GS&Co. 
5.    GS&Co., itself or through an affiliate (the “Selling Agent”) or any underwriter(s), will sell all, or such lesser portion as may be required hereunder, of the Registered Settlement Shares or Unregistered Settlement Shares and any Makewhole Shares (as defined below) (together, the “Settlement Shares”) delivered by Counterparty to GS&Co. pursuant to paragraph 6 below commencing on the Cash Settlement Payment Date and continuing until the date on which the aggregate Net Proceeds (as such term is defined below) of such sales, as determined by GS&Co., is equal to the absolute value of the Forward Cash Settlement Amount (such date, the “Final Resale Date”).  If the proceeds of any sale(s) made by GS&Co., the Selling Agent or any underwriter(s), net of any fees and commissions (including, without limitation, underwriting or placement fees) customary for similar transactions under the circumstances at the time of the offering, together with commercially reasonable carrying charges and expenses incurred in connection with the offer and sale of the Shares (including, but without limitation to, the covering of any over-allotment or short position (syndicate or otherwise)) (the “Net Proceeds”) exceed the absolute value of the Forward Cash Settlement Amount, GS&Co. will refund, in USD (or, at Counterparty’s election, Shares of equivalent value, as determined by the Calculation Agent), such excess to Counterparty on the date that is three (3) Currency Business Days following the Final Resale Date, and, if any portion of the Settlement Shares remains unsold, GS&Co. shall return to Counterparty on that date such unsold Shares.  
6.    If the Calculation Agent determines that the Net Proceeds received from the sale of the Registered Settlement Shares or Unregistered Settlement Shares or any Makewhole Shares, if any, pursuant to this paragraph 6 are less than the absolute value of the Forward Cash Settlement Amount (the amount in USD by which the Net Proceeds are less than the absolute value of the Forward Cash Settlement Amount being the “Shortfall” and the date on which such determination is made, the “Deficiency Determination Date”), Counterparty shall on the Exchange Business Day next succeeding the Deficiency Determination Date (the “Makewhole Notice Date”) deliver to GS&Co., through the Selling Agent, a notice of Counterparty’s election that Counterparty shall either (i) pay an amount in cash equal to the Shortfall on the day that is one (1) Currency Business Day after the Makewhole Notice Date, or (ii) deliver additional Shares.  If Counterparty elects to deliver to GS&Co. additional Shares, then Counterparty shall deliver additional Shares in compliance with the terms and conditions of paragraph 3 or paragraph 4 above, as the case may be (the “Makewhole Shares”), on the first Clearance System Business Day which is also an Exchange Business Day following the Makewhole Notice Date in such number as the Calculation Agent reasonably believes would have a market value on that Exchange Business Day equal to the Shortfall.  Such Makewhole Shares shall be sold by GS&Co. in accordance with the provisions above; provided that if the sum of the Net Proceeds from the sale of the originally delivered Shares and the Net Proceeds from the sale of any Makewhole Shares is less than the absolute 

3

value of the Forward Cash Settlement Amount then Counterparty shall, at its election, either make such cash payment or deliver to GS&Co. further Makewhole Shares until such Shortfall has been reduced to zero. 
7.    Notwithstanding the foregoing, in no event shall the aggregate number of Settlement Shares and Makewhole Shares be greater than the Reserved Shares minus the amount of any Shares actually delivered by Counterparty under any other Transaction(s) under this Master Confirmation (the result of such calculation, the “Capped Number”).  Counterparty represents and warrants (which shall be deemed to be repeated on each day that a Transaction is outstanding) that the Capped Number is equal to or less than the number of Shares determined according to the following formula:
A – B
		
	Where
	A = the number of authorized but unissued shares of the Counterparty that are not reserved for future issuance on the date of the determination of the Capped Number; and

B = the maximum number of Shares required to be delivered to third parties if Counterparty elected Net Share Settlement of all transactions in the Shares (other than Transactions in the Shares under this Master Confirmation) with all third parties that are then currently outstanding and unexercised.
“Reserved Shares” means initially, 6,106,591 Shares.  The Reserved Shares may be increased or decreased in a Supplemental Confirmation.

4Blueprint

 

Exhibit 10.1

 

SEPARATION AND RELEASE AGREEMENT

 

 

THIS
SEPARATION AND RELEASE AGREEMENT is entered into on this 3rd day of
February, 2017, by and between David Storey
(“EMPLOYEE”) and RELM Wireless Corporation
(“COMPANY”). For purposes of this Agreement, EMPLOYEE
and COMPANY shall be collectively referred to as the
“Parties.”

 

WHEREAS, EMPLOYEE
was employed by COMPANY as an at-will employee;

 

WHEREAS, the
Parties have determined that EMPLOYEE’s employment shall
terminate effective January 16, 2017;

 

WHEREAS, the
Parties do not anticipate that they will have any disputes or
grievances as a result of this termination, but desire to take
action to avoid any such disputes;

 

WHEREAS, the
Parties desire to terminate their relationship amicably and make
certain promises and representations to achieve this
objective;

 

NOW,
THEREFORE, in full satisfaction of any and all disputes and claims,
and in consideration of the promises and releases made herein and
for other good and valuable consideration, and upon the terms and
conditions, the premises and promises and the covenants stated
below, the Parties agree as follows:

 

1.           Employment,
Board of Directors, and Insurance Coverage Dates.
EMPLOYEE’S separation from employment with COMPANY is hereby
acknowledged and agreed to be effective at the close of business on
January 16, 2017 (“Termination Date”). Employee agrees
that upon the termination of his employment, he has also resigned
from any and all positions held on the Company’s Board of
Directors as of the Termination Date. EMPLOYEE’S health
insurance benefits will cease on January 31, 2017, subject to
EMPLOYEE’S right to continue his health insurance under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”). EMPLOYEE’S participation in all
benefits and incidents of employment including, not limited to,
accrual of bonuses, vacation and paid time off, cease as of the
Termination Date. As of the Termination Date, EMPLOYEE shall be
deemed to have resigned from any officer position with the Company.
Subject to any press release or other statements already made by
the Company, the Company will indicate in its personnel records
that EMPLOYEE resigned.

 

2.           Separation
Payments.

 

A.           Severance.
Within ten (10) days of the date on which this Agreement becomes
effective and no longer revocable, COMPANY agrees to begin to pay
and EMPLOYEE agrees to accept a separation payment in the gross
amount of $300,000 (the “Severance Payment”). The
Severance Payment will be paid in equal installments over a period
of 12 months, in accordance with the COMPANY’S regular
payroll practices beginning on the COMPANY’S first regular
pay date after the Effective Date, from which there will be
deducted and withheld, all taxes, including United States and all
applicable state income taxes, Medicare and FICA amounts and
EMPLOYEE’S portion of healthcare premium for January,
2017.

 

1

 

 

B.           Benefits.
EMPLOYEE and, as applicable, the EMPLOYEE’S covered
dependents, may elect to continue health care coverage by electing
continuation of benefits through COBRA. If EMPLOYEE elects to
continue benefits through COBRA for himself and applicable
dependents, he shall pay the same dollar cost paid by EMPLOYEE as
is in effect at the time of termination. If EMPLOYEE elects COBRA,
COMPANY agrees to pay the difference in cost between the EMPLOYEE
portion and COBRA’s actual cost for coverage through December
31, 2017 (“COBRA Subsidy”). The COBRA Subsidy shall be
paid directly to EMPLOYEE on a monthly basis, subject to applicable
withholdings, provided that EMPLOYEE elects COBRA coverage. If
EMPLOYEE subsequently discontinues COBRA coverage for any reason
prior to December 31, 2017, COMPANY’s COBRA Subsidy payments
shall cease and shall not be reinstated.

 

C.           Paid
Time Off/Sick Leave. EMPLOYEE acknowledges that he has
received all accrued, but unused paid time off or sick leave to
which he was entitled.

 

3.           Unemployment
Benefits and References. COMPANY does not control the
ultimate determination for an award of unemployment benefits, and
it will respond truthfully to requests for information from the
appropriate state agency. COMPANY will not appeal any award of
unemployment compensation to EMPLOYEE. In addition, if COMPANY is
contacted by potential employers of EMPLOYEE for references or
information about EMPLOYEE’s employment, COMPANY will follow
its standard practice and only provide EMPLOYEE’s dates of
employment, title and salary.

 

4.           
401(k) Retirement
Plan. It is understood and agreed that EMPLOYEE did
participate in a retirement plan offered by COMPANY and therefore
COMPANY has no further obligation to withhold any deductions nor
make any contributions to any such plan on behalf of EMPLOYEE.
Therefore for purposes of the retirement plan, EMPLOYEE is no
longer considered an employee and voluntary contributions will not
be withheld from the Severance Payment. The Parties agree that
nothing in contained in this Agreement shall impact
EMPLOYEE’s rights with respect to retirement benefits that
were vested as of the Termination Date and that all such rights are
governed by the terms of the applicable plan.

 

5.           
Mutual Release of
Claims. EMPLOYEE agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed
to EMPLOYEE by the COMPANY and its current and former officers,
directors, employees, agents, investors, attorneys, shareholders,
administrators, affiliates, benefit plans, plan administrators,
insurers, trustees, divisions, and subsidiaries, and predecessor
and successor corporations and assigns (collectively, the
"Releasees"). EMPLOYEE, on his own behalf and on behalf of his
respective heirs, family members, executors, agents, and assigns,
hereby and forever releases the Releasees from, and agrees not to
sue concerning, or in any manner to institute, prosecute, or
pursue, any claim, complaint, duty, obligation, demand, or cause of
action relating to any matters of any kind, whether presently known
or unknown, suspected or unsuspected, that EMPLOYEE may possess
against any of the Releasees arising from any omissions, acts,
facts, or damages that have occurred up until and including the
Effective Date of this Agreement, including, without
limitation:

 

a. any
and all claims relating to or arising from EMPLOYEE’S
employment relationship with the COMPANY, the termination of that
relationship, payment of compensation or bonuses, or the failure or
refusal to provide EMPLOYEE with any benefits pursuant to any
employee benefit plan or arrangement maintained, administered,
sponsored, or funded by the COMPANY;

 

b. any
and all claims for wrongful discharge of employment; termination in
violation of public policy; discrimination; harassment;
retaliation; breach of contract, both express and implied; breach
of covenant of good faith and fair dealing, both express and
implied; promissory estoppel; negligent or intentional infliction
of emotional distress; fraud; negligent or intentional
misrepresentation; negligent or intentional interference with
contract or prospective economic advantage; unfair business
practices; defamation; libel; slander; negligence; personal injury;
assault; battery; invasion of privacy; false imprisonment;
conversion; and disability benefits;

 

2

 

 

c. any
and all claims for violation of any federal, state, or municipal
statute, including, but not limited to, Title VII of the Civil
Rights Act of 1964; the Civil Rights Act of 1991; the
Rehabilitation Act of 1973; the Americans with Disabilities Act of
1990; the Equal Pay Act;; the Fair Credit Reporting Act; the Age
Discrimination in Employment Act of 1967; the Older Workers Benefit
Protection Act; the Employee Retirement Income Security Act of 1974
(including but not limited to any claim for denial of benefits,
interference with benefits, or breach of fiduciary duty); the
Worker Adjustment and Retraining Notification Act; the Family and
Medical Leave Act; the Sarbanes-Oxley Act of 2002; any and all
amendments to any such laws; and other applicable federal, state,
or local fair employment and anti-discrimination statutes not
listed above;

 

d. any
and all claims arising out of any other laws and regulations
relating to employment or employment discrimination;
and

 

e. any
and all claims for attorneys' fees and costs.

 

EMPLOYEE
agrees that the release set forth in this section will be and
remain in effect in all respects as a complete general release as
to the matters released. This release does not extend to any
obligations incurred under this Agreement. The release also does
not alter EMPLOYEE’s vested retirement benefits, his rights
as an existing shareholder of COMPANY or his vested rights under
the Incentive Compensation Stock Option Agreement that otherwise
exist, but EMPLOYEE acknowledges that all such rights are governed
by the terms of the applicable plans, stock certificates or COMPANY
By-Laws as appropriate. This release does not release claims that
cannot be released as a matter of law, including, but not limited
to, EMPLOYEE’S right to (1) respond accurately and fully to
any question, inquiry or request for information when required by
legal process; (2) file a charge or complaint with or participate
in a charge by the Equal Employment Opportunity Commission, the
Department of Justice, the Securities and Exchange Commission, the
Department of Labor, the National Labor Relations Board, the
Occupational Safety and Health Administration, or any other local,
state, or federal administrative body or government agency
(“Governmental Agency”) against the COMPANY; or (3)
disclose information, report possible violations to, or participate
in investigations or proceedings that may be conducted by any
Governmental Agency. Further, such communications with any
Governmental Agency will not be considered a breach of any other
provision in this Agreement, including any non-disparagement or
confidentiality provision. EMPLOYEE is not required to contact the
COMPANY before engaging in any such communications. This Agreement
does not limit EMPLOYEE’s right to receive an award from any
Governmental Agency for information provided to the Governmental
Agency.

 

For its
part, in consideration of EMPLOYEE’s execution of this
Agreement and his performance of the obligations set forth herein,
the COMPANY on behalf of itself and its affiliates, subsidiaries
and assigns, agrees that it shall release EMPLOYEE, and his
respective heirs, family members, executors, agents, and assigns,
from, and agree not to sue concerning, or in any manner to
institute, prosecute, or pursue, any claim, complaint, duty,
obligation, demand, or cause of action relating to any matters of
any kind, whether presently known or unknown, suspected or
unsuspected, that COMPANY may possess against EMPLOYEE arising from
any omissions, acts, facts, or damages that have occurred up until
and including the Effective Date of this Agreement.

 

 

3

 

 

6.
Acknowledgment of Waiver
of Claims under ADEA. EMPLOYEE acknowledges that he is
waiving and releasing any rights he may have under the Age
Discrimination in Employment Act of 1967 ("ADEA"), and that this
waiver and release is knowing and voluntary. EMPLOYEE agrees that
this waiver and release does not apply to any rights or claims that
may arise under the ADEA after the Effective Date of this
Agreement. EMPLOYEE acknowledges that the consideration given for
this waiver and release is in addition to anything of value to
which EMPLOYEE was already entitled. EMPLOYEE further acknowledges
that he has been advised by this writing that: (a) he should
consult with an attorney prior to executing this Agreement; (b) he
has twenty-one (21) days within which to consider this Agreement;
(c) he has seven (7) days following his execution of this Agreement
to revoke this Agreement; (d) this Agreement will not be effective
until after the revocation period has expired; and (e) nothing in
this Agreement prevents or precludes Employee from challenging or
seeking a determination in good faith of the validity of this
waiver under the ADEA, nor does it impose any condition precedent,
penalties, or costs for doing so, unless specifically authorized by
federal law. In the event EMPLOYEE signs this Agreement and returns
it to the COMPANY in less than the 21-day period identified above,
EMPLOYEE hereby acknowledges that he has freely and voluntarily
chosen to waive the time period allotted for considering this
Agreement.

 

7.           Confidentiality.
EMPLOYEE agrees that the existence of this Agreement and its terms
and conditions are to be held in strict confidence. EMPLOYEE
further agrees not to disclose the existence or terms of this
Agreement to any past, present or future agent or employee of
COMPANY or any other individual or entity except EMPLOYEE’S
spouse, his tax consultants, accountants and attorneys, state and
federal taxing authority (if required and upon request), or as may
be otherwise required by law. This provision will not prevent
EMPLOYEE from disclosing the fact that COMPANY employed him through
January 16, 2017.

 

8.           
No Claims. EMPLOYEE
represents that he has not filed any complaints or lawsuits against
COMPANY with any court and that he will not do so at any time
hereafter involving COMPANY and relating to any matter arising
prior to the date of this Agreement. EMPLOYEE likewise represents
that he has not suffered any discrimination on account of his age,
sex, national origin, marital status or any other protected status
and none of these has been an adverse factor used against him by
COMPANY; that he has not suffered any job-related wrongs or
injuries for which he might still be entitled to compensation or
relief such as an injury for which EMPLOYEE might receive a worker
compensation award in the future; EMPLOYEE has not been denied any
leave to which he is legally entitled; EMPLOYEE acknowledges that
he has reported workplace injuries or illnesses, if any; EMPLOYEE
has no knowledge of any wrongdoing by the COMPANY that would
subject COMPANY to any harm, civil or criminal; EMPLOYEE
acknowledges that he has been paid in full for all hours worked and
there is no compensation or benefits owed to him whatsoever other
than the specific payments set forth in this
Agreement.

 

9.           
COMPANY Property.
EMPLOYEE understands and agrees that he shall return any and all
COMPANY files, keys, equipment and any and all documents and
property belonging to COMPANY. EMPLOYEE further states that he has
not retained any documents or electronic information or data, or
any copies thereof, belonging to COMPANY. EMPLOYEE further states
that he has not damaged, marred, spoiled, ruined or otherwise
destroyed any property, equipment or electronic files belonging to
COMPANY and acknowledges that COMPANY may hold EMPLOYEE liable for
any damage caused by EMPLOYEE to the property, equipment and
electronic files belonging to COMPANY, whether such damage is
currently known or subsequently discovered after EMPLOYEE’S
separation of employment. EMPLOYEE’S signature below
constitutes his certification under penalty of perjury that he has
returned all documents and other items provided to EMPLOYEE by the
COMPANY, developed or obtained by EMPLOYEE in connection with his
employment with the COMPANY, or otherwise belonging to the
COMPANY.

 

4

 

 

10.           
Trade Secrets and
Confidential Information/COMPANY Property. Subject to the
terms set forth below, EMPLOYEE reaffirms and agrees to observe and
abide by the terms of the General Confidentiality Obligations set
forth in the COMPANY’S employee handbook, specifically
including the provisions therein regarding nondisclosure of the
COMPANY’S trade secrets and confidential and proprietary
information, and non-solicitation of COMPANY employees. Moreover,
EMPLOYEE reaffirms the confidentiality obligation set forth in
Executive’s Executive Change in Control Agreement. In
addition, EMPLOYEE understands that an individual shall not be held
criminally or civilly liable under any federal or state trade
secret law for the disclosure of a trade secret that is made in
confidence to a federal, state, or local government official or to
an attorney solely for the purpose of reporting or investigating a
suspected violation of law. An individual shall not be held
criminally or civilly liable under any federal or state trade
secret law for the disclosure of a trade secret that is made in a
complaint or other document filed in a lawsuit or other proceeding,
if such filing is made under seal. An individual who files a
lawsuit for retaliation by an employer for reporting a suspected
violation of law may disclose the trade secret to the attorney of
the individual and use the trade secret information in the court
proceeding, if the individual files any document containing the
trade secret under seal; and does not disclose the trade secret,
except pursuant to court order. Nothing in this Agreement or any
other agreement between the parties is intended to conflict with 18
U.S.C. § 1833(b) or create liability for disclosures of trade
secrets that are expressly permitted by 18 U.S.C. §
1833(b).

 

11.           
Mutual
Non-Disparagement. Subject to the other terms stated herein,
EMPLOYEE agrees to refrain from any disparagement, defamation,
libel, or slander of any of the Releasees, and agrees to refrain
from soliciting for business or interfering with the contracts and
relationships of any of the Releasees have with their current or
former customers. In addition, subject to the other terms stated
herein, COMPANY agrees to instruct and ensure that the following
people refrain from any disparagement, defamation, libel, or
slander of EMPLOYEE: Kyle Cerminara, Lewis Johnson and Timothy
O’Neil. Notwithstanding this provision, the PARTIES may
respond truthfully in communications to government agencies,
auditors or as required by legal process.

 

12.           
Non-solicitation;
Cooperation. EMPLOYEE agrees that for a period of twelve
(12) months immediately following the Effective Date of this
Agreement, EMPLOYEE will not directly or indirectly solicit any of
the COMPANY’S employees to leave their employment at the
COMPANY. EMPLOYEE also agrees that for a period of twelve (12)
months immediately following the Effective Date of this Agreement,
EMPLOYEE will not directly or indirectly solicit COMPANY’S
customers or prospective customers on behalf of himself or any
other entity. In addition, EMPLOYEE agrees to cooperate with any
reasonable requests from COMPANY to transition matters or respond
to requests for information as directed to him from time to
time.

 

13.           
SEC Whistleblower
Protections.  NOTWITHSTANDING ANY PROVISIONS TO THE CONTRARY
WHEREVER CONTAINED, EMPLOYEE UNDERSTANDS THAT NOTHING IN THIS
AGREEMENT, ANY OTHER AGREEMENT THAT EMPLOYEE AND THE COMPANY ARE
PARTIES TO, AND ANY POLICY OF THE COMPANY SHALL INTERFERE WITH
EMPLOYEE’S RIGHT TO (1) FILE A CHARGE OR COMPLAINT WITH OR
PARTICIPATE IN A CHARGE BY THE EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION, THE DEPARTMENT OF JUSTICE, THE SECURITIES AND EXCHANGE
COMMISSION, THE DEPARTMENT OF LABOR, THE NATIONAL LABOR RELATIONS
BOARD, THE OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION, OR ANY
OTHER LOCAL, STATE, OR FEDERAL ADMINISTRATIVE BODY OR GOVERNMENT
AGENCY (“GOVERNMENTAL AGENCY”) OR (2) DISCLOSE
INFORMATION, REPORT POSSIBLE VIOLATIONS TO, OR PARTICIPATE IN
INVESTIGATIONS OR PROCEEDINGS THAT MAY BE CONDUCTED BY ANY
GOVERNMENTAL AGENCY.  FURTHER, SUCH COMMUNICATIONS WITH ANY
GOVERNMENTAL AGENCY WILL NOT BE CONSIDERED A BREACH OF ANY OTHER
PROVISION IN THIS AGREEMENT, ANY OTHER AGREEMENT THAT EMPLOYEE AND
THE COMPANY ARE PARTIES TO, AND ANY POLICY OF THE COMPANY,
INCLUDING ANY AND ALL NON-DISPARAGEMENT OR CONFIDENTIALITY
PROVISIONS.  EMPLOYEE IS NOT REQUIRED TO CONTACT THE COMPANY
BEFORE ENGAGING IN ANY SUCH COMMUNICATIONS. NOTWITHSTANDING
ANY PROVISIONS TO THE CONTRARY WHEREVER CONTAINED, THIS AGREEMENT,
ANY OTHER AGREEMENT THAT EMPLOYEE AND THE COMPANY ARE PARTIES TO,
AND ANY POLICY OF THE COMPANY SHALL NOT LIMIT EMPLOYEE’S
RIGHT TO RECEIVE AN AWARD FROM ANY GOVERNMENTAL AGENCY FOR
INFORMATION PROVIDED TO THE GOVERNMENTAL
AGENCY.

 

5

 

 

14.           
Non-Admission of
Liability. The Parties agree that the promises contained in
this Agreement are not to be construed as any admission of any
liability on the part of either Party arising out of EMPLOYEE's
employment or termination. By signing this document, the Parties
intend to avoid any action arising out of or related to the
employment or employment termination of EMPLOYEE.

 

15.           
Indemnification/Insurance
Coverage. Notwithstanding any other provision of this
Agreement, the Parties agree that EMPLOYEE shall retain all
indemnification rights he had as an executive, officer or employee
of the COMPANY pursuant to Article IV of the COMPANY By-Laws. In
addition, this Agreement does not alter the terms of the
COMPANY’s Directors & Officers’ insurance policies.
EMPLOYEE acknowledges that he has received a copy of the
COMPANY’s D&O policy currently in effect.

 

16.           
Acknowledgment of
Understanding. EMPLOYEE hereby declares, agrees, and
warrants that he: (a) understands the terms set forth herein; (b)
voluntarily accepts without coercion or duress those terms for the
purpose of obtaining the separation benefits as promised herein and
providing the full release of all claims against COMPANY and
(c) was advised by COMPANY to consult with an attorney of his
own choosing prior to the execution of this Agreement.

 

17.           
Severability. In
the event that any provision or any portion of any provision hereof
or any surviving agreement made a part hereof becomes or is
declared by a court of competent jurisdiction or arbitrator to be
illegal, unenforceable, or void, this Agreement will continue in
full force and effect without said provision or portion of
provision.

 

18.           
Compliance with Section
409A. The intent of the parties is that payments and
benefits under this Agreement comply with Section 409A of the
Internal Revenue Code (“Section 409A”) or are exempt
therefrom and, accordingly, to the maximum extent permitted, this
Agreement shall be interpreted to be in compliance therewith. In
that regard, (a) each installment in any series of installment
payments pursuant to this Agreement shall be treated as a separate
payment for purposes of Section 409A; (b) the parties will take all
steps necessary to ensure that EMPLOYEE’S termination of
employment constitutes a “separation from service”
within the meaning of Section 409A; (c) if EMPLOYEE is a "specified
employee," as determined by the COMPANY in accordance with Section
409A, then to the extent required in order to comply with Section
409A, all payments, benefits or reimbursements paid or provided
under this Agreement that constitute a "deferral of compensation"
within the meaning of Section 409A, that are provided as a result
of EMPLOYEE’S separation from service and that would
otherwise be paid or provided during the first six months following
EMPLOYEE’S separation from service shall be accumulated
through and paid or provided within 30 days after the first
business day following the six month anniversary of
EMPLOYEE’S separation from service (or, if EMPLOYEE should
die during such six-month period, within 30 days after
EMPLOYEE’S death); (d) the amount of any expenses eligible
for reimbursement, or in-kind benefits provided, during a calendar
year may not affect the expenses eligible for reimbursement, or
in-kind benefits provided, during any other calendar year; (e) the
right to any reimbursement or in-kind benefit is not subject to
liquidation or exchange for another benefit; and (f) if the period
from EMPLOYEE’S Termination Date to the date that Pay
Continuation payments may commence begins in one calendar year and
ends in a second calendar year, then to the extent necessary to
comply with Section 409A, any Pay Continuation payable under this
Agreement will commence in the second calendar year.

 

6

 

 

19.           
Entire Agreement.
This Agreement represents the entire agreement and understanding
between the COMPANY and EMPLOYEE concerning the subject matter of
this Agreement and EMPLOYEE’S employment with and separation
from the COMPANY and the events leading thereto and associated
therewith, and supersedes and replaces any and all prior agreements
and understandings concerning the subject matter of this Agreement
and EMPLOYEE’S relationship with the COMPANY, with the
exception of those provisions of the EMPLOYMENT AGREEMENT that
survive termination of employment or Employee’s Executive
Change in Control Agreement. This provision shall not affect
EMPLOYEE’s rights as a shareholder or any vested rights to
retirement savings or stock options that exist prior to his
Termination Date, subject to the terms of any applicable plan.
EMPLOYEE acknowledges that he is not otherwise entitled to the
payments and benefits provided in this Agreement unless he executes
and does not revoke this Agreement. Each Party is responsible for
its own costs, expenses and attorneys’ fees incurred in
preparation of this Agreement. Acceptance of the terms of this
Agreement must occur no later than February 6, 2017. EMPLOYEE
agrees that any modifications, material or otherwise, made to this
Agreement at any time by EMPLOYEE or COMPANY prior to the Effective
Date, and even after the Termination Date, do not restart or affect
in any manner the original 21-day consideration period provided in
section 21.

 

19.           
No Oral
Modification. This Agreement may only be amended in writing
signed by EMPLOYEE and the COMPANY’S Chairman.

 

20.           
Binding
Effects/Venue. This Agreement shall be binding upon the
Parties, as well as their successors, assigns, heirs, beneficiaries
and designees. This Agreement shall be construed and enforced in
accord with the laws of the State of[Florida without application of
Florida’s choice of law rules and principles. The Parties
acknowledge and agree that the exclusive venue for any proceeding
or action to enforce this Agreement or any provision thereof shall
be in a Federal or State Court of competent jurisdiction in the
State of Florida for Brevard County.

 

21.           Rescission
Rights/Effective Date. EMPLOYEE understands that this
Agreement will be null and void if not executed by him within
twenty-one (21) days of the Termination Date. EMPLOYEE has seven
(7) days after execution to revoke it. This Agreement will become
effective on the eighth (8th) day after EMPLOYEE signed this
Agreement, so long as it has been signed by the Parties and has not
been revoked before that date (the "Effective Date"). To be
effective, this revocation must be in writing and delivered to the
COMPANY’S Chairman within this seven (7) day period. If sent
by mail, the revocation must be: (1) postmarked within the seven
(7) day period; (2) properly addressed to COMPANY; and
(3) sent by certified mail, return receipt
requested.

 

 

7

 

 

I
understand that if I revoke this Agreement as outlined above, that
this Agreement will not be effective or enforceable and that I will
not be eligible to receive any severance benefits under this
Agreement or otherwise.

 

BY SIGNING BELOW, EMPLOYEE ACKNOWLEDGES THAT HE HAS RECEIVED THIS
SEPARATION AGREEMENT AND RELEASE ON JANUARY 16, 2017 AND HAS READ
AND UNDERSTANDS ALL OF ITS TERMS. EMPLOYEE HAS BEEN ADVISED IN
WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THE AGREEMENT.
EMPLOYEE UNDERSTANDS THAT WHETHER OR NOT HE CONSULTS WITH AN
ATTORNEY IS HIS DECISION. EMPLOYEE UNDERSTANDS THAT A SIGNED COPY
OF THIS AGREEMENT MUST BE RECEIVED ON THE 21ST DAY FOLLOWING HIS
RECEIPT OF THIS AGREEMENT IN ORDER TO BE ELIGIBLE TO RECEIVE ANY
SEPARATION BENEFITS. FURTHER, EMPLOYEE ACKNOWLEDGES THAT THIS
AGREEMENT IS EXECUTED VOLUNTARILY AND WITH FULL KNOWLEDGE OF ITS
SIGNIFICANCE AND THAT HIS DECISION TO SIGN IT IS BASED ON THE
WRITTEN PROVISIONS AND NOT ON ANY OTHER STATEMENT BY OR ON BEHALF
OF COMPANY OR THE OTHER RELATING TO MY EMPLOYMENT OR ANY OTHER
MATTER.

 

 

IN
WITNESS WHEREOF the parties have entered into this Agreement on the
3rd day of February, 2017.

 

EMPLOYEE

 

 

/s/ David P. Storey

 

STATE
OF FLORIDA

COUNTY
OF (Brevard)

The
foregoing instrument was acknowledged before me this 3rd day of
February, 2017 by DAVID STOREY.

/s/ Notary Public

Notary
Public

 

Notary
Stamp

COMPANY 

 

By:
/s/ Timothy W.
O’Neil

       Timothy
O’Neil

       Its
(Title): Chairman of the Board, Relm Wireless

 

8

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