Document:

<PAGE>

                                                                    EXHIBIT 10.7

                           INDEMNIFICATION AGREEMENT
                           -------------------------

     This Indemnification Agreement (the "Agreement") is made as of
                                          ---------
_______________, by and between RITA Medical Systems, Inc., a Delaware
corporation (the "Company"), and _________________ (the "Indemnitee").
                  -------                                ----------

                                   RECITALS
                                   --------

     The Company and Indemnitee recognize the increasing difficulty in obtaining
liability insurance for directors, officers and key employees, the significant
increases in the cost of such insurance and the general reductions in the
coverage of such insurance.  The Company and Indemnitee further recognize the
substantial increase in corporate litigation in general, subjecting directors,
officers and key employees to expensive litigation risks at the same time as the
availability and coverage of liability insurance has been severely limited.
Indemnitee does not regard the current protection available as adequate under
the present circumstances, and Indemnitee and agents of the Company may not be
willing to continue to serve as agents of the Company without additional
protection.  The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, and to indemnify its directors,
officers and key employees so as to provide them with the maximum protection
permitted by law.

                                   AGREEMENT
                                   ---------

     In consideration of the mutual promises made in this Agreement, and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the Company and Indemnitee hereby agree as follows:

     1.  Indemnification.
         ---------------

         (a) Third Party Proceedings.  The Company shall indemnify Indemnitee
             -----------------------
if Indemnitee is or was a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while an
officer or director or by reason of the fact that Indemnitee is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) actually and reasonably incurred by
Indemnitee in connection with such action, suit or proceeding if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe Indemnitee's
conduct was unlawful.  The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that Indemnitee did
not act in good faith and in a manner which Indemnitee
<PAGE>

reasonably believed to be in or not opposed to the best interests of the
Company, or, with respect to any criminal action or proceeding, that Indemnitee
had reasonable cause to believe that Indemnitee's conduct was unlawful.

          (b) Proceedings By or in the Right of the Company.  The Company shall
              ---------------------------------------------
indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made
a party to any threatened, pending or completed action or proceeding by or in
the right of the Company or any subsidiary of the Company to procure a judgment
in its favor by reason of the fact that Indemnitee is or was a director,
officer, employee or agent of the Company, or any subsidiary of the Company, by
reason of any action or inaction on the part of Indemnitee while an officer or
director or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees) and, to the fullest extent permitted by
law, amounts paid in settlement (if such settlement is approved in advance by
the Company, which approval shall not be unreasonably withheld), in each case to
the extent actually and reasonably incurred by Indemnitee in connection with the
defense or settlement of such action or suit if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company and its stockholders, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which Indemnitee shall have been finally adjudicated by court order or judgment
to be liable to the Company in the performance of Indemnitee's duty to the
Company and its stockholders unless and only to the extent that the court in
which such action or proceeding is or was pending shall determine upon
application that, in view of all the circumstances of the case, Indemnitee is
fairly and reasonably entitled to indemnity for such expenses which such court
shall deem proper.

          (c) Mandatory Payment of Expenses.  To the extent that Indemnitee has
              -----------------------------
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Section 1(a) or Section 1(b) or the defense of any
claim, issue or matter therein, Indemnitee shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by Indemnitee in
connection therewith.

     2.  No Employment Rights.  Nothing contained in this Agreement is intended
         --------------------
to create in Indemnitee any right to continued employment.

     3.  Expenses; Indemnification Procedure.
         -----------------------------------

         (a) Advancement of Expenses.  The Company shall advance all expenses
             -----------------------
incurred by Indemnitee in connection with the investigation, defense, settlement
or appeal of any civil or criminal action, suit or proceeding referred to in
Section l(a) or Section 1(b) hereof (including amounts actually paid in
settlement of any such action, suit or proceeding).  Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the extent that, it
shall ultimately be determined that Indemnitee is not entitled to be indemnified
by the Company as authorized hereby.

         (b) Notice/Cooperation by Indemnitee.  Indemnitee shall, as a
             --------------------------------
condition precedent to his or her right to be indemnified under this Agreement,
give the Company notice in

                                      -2-
<PAGE>

writing as soon as practicable of any claim made against Indemnitee for which
indemnification will or could be sought under this Agreement. Notice to the
Company shall be directed to the Chief Executive Officer of the Company and
shall be given in accordance with the provisions of Section 12(d) below. In
addition, Indemnitee shall give the Company such information and cooperation as
it may reasonably require and as shall be within Indemnitee's power.

          (c) Procedure.  Any indemnification and advances provided for in
              ---------
Section 1 and this Section 3 shall be made no later than twenty (20) days after
receipt of the written request of Indemnitee.  If a claim under this Agreement,
under any statute, or under any provision of the Company's Certificate of
Incorporation or Bylaws providing for indemnification, is not paid in full by
the Company within twenty (20) days after a written request for payment thereof
has first been received by the Company, Indemnitee may, but need not, at any
time thereafter bring an action against the Company to recover the unpaid amount
of the claim and, subject to Section 11 of this Agreement, Indemnitee shall also
be entitled to be paid for the expenses (including attorneys' fees) of bringing
such action.  It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in connection with any action,
suit or proceeding in advance of its final disposition) that Indemnitee has not
met the standards of conduct which make it permissible under applicable law for
the Company to indemnify Indemnitee for the amount claimed, but the burden of
proving such defense shall be on the Company and Indemnitee shall be entitled to
receive interim payments of expenses pursuant to Section 3(a) unless and until
such defense may be finally adjudicated by court order or judgment from which no
further right of appeal exists.  It is the parties' intention that if the
Company contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be for the court to decide, and
neither the failure of the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its stockholders) to have made a determination that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Company (including its Board of Directors, any committee or
subgroup of the Board of Directors, independent legal counsel, or its
stockholders) that Indemnitee has not met such applicable standard of conduct,
shall create a presumption that Indemnitee has or has not met the applicable
standard of conduct.

          (d) Notice to Insurers.  If, at the time of the receipt of a notice of
              ------------------
a claim pursuant to Section 3(b) hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies.  The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.

          (e) Selection of Counsel.  In the event the Company shall be obligated
              --------------------
under Section 3(a) hereof to pay the expenses of any proceeding against
Indemnitee, the Company, if appropriate, shall be entitled to assume the defense
of such proceeding, with counsel approved by Indemnitee, upon the delivery to
Indemnitee of written notice of its election so to do.  After delivery of such
notice, approval of such counsel by Indemnitee and the retention of such counsel

                                      -3-
<PAGE>

by the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees of counsel subsequently incurred by Indemnitee with
respect to the same proceeding, provided that (i) Indemnitee shall have the
right to employ counsel in any such proceeding at Indemnitee's expense; and (ii)
if (A) the employment of counsel by Indemnitee has been previously authorized by
the Company, (B) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Company and Indemnitee in the conduct of any
such defense or (C) the Company shall not, in fact, have employed counsel to
assume the defense of such proceeding, then the fees and expenses of
Indemnitee's counsel shall be at the expense of the Company.

     4.   Additional Indemnification Rights; Nonexclusivity.
          -------------------------------------------------

          (a) Scope.  Notwithstanding any other provision of this Agreement, the
              -----
Company hereby agrees to indemnify the Indemnitee to the fullest extent
permitted by law, notwithstanding that such indemnification is not specifically
authorized by the other provisions of this Agreement, the Company's Certificate
of Incorporation, the Company's Bylaws or by statute.  In the event of any
change, after the date of this Agreement, in any applicable law, statute, or
rule which expands the right of a Delaware corporation to indemnify a member of
its board of directors or an officer, such changes shall be deemed to be within
the purview of Indemnitee's rights and the Company's obligations under this
Agreement.  In the event of any change in any applicable law, statute or rule
which narrows the right of a Delaware corporation to indemnify a member of its
board of directors or an officer, such changes, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement shall have
no effect on this Agreement or the parties' rights and obligations hereunder.

          (b) Nonexclusivity.  The indemnification provided by this Agreement
              --------------
shall not be deemed exclusive of any rights to which Indemnitee may be entitled
under the Company's Certificate of Incorporation, its Bylaws, any agreement, any
vote of stockholders or disinterested members of the Company's Board of
Directors, the General Corporation Law of the State of Delaware, or otherwise,
both as to action in Indemnitee's official capacity and as to action in another
capacity while holding such office.  The indemnification provided under this
Agreement shall continue as to Indemnitee for any action taken or not taken
while serving in an indemnified capacity even though he or she may have ceased
to serve in any such capacity at the time of any action, suit or other covered
proceeding.

     5.   Partial Indemnification. If Indemnitee is entitled under any provision
          -----------------------
of this Agreement to indemnification by the Company for some or a portion of the
expenses, judgments, fines or penalties actually or reasonably incurred in the
investigation, defense, appeal or settlement of any civil or criminal action,
suit or proceeding, but not, however, for the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion of such expenses,
judgments, fines or penalties to which Indemnitee is entitled.

     6.  Mutual Acknowledgment.  Both the Company and Indemnitee acknowledge
         ---------------------
that in certain instances, Federal law or public policy may override applicable
state law and prohibit the Company from indemnifying its directors and officers
under this Agreement or otherwise.

                                      -4-
<PAGE>

For example, the Company and Indemnitee acknowledge that the Securities and
Exchange Commission (the "SEC") has taken the position that indemnification is
                          ---
not permissible for liabilities arising under certain federal securities laws,
and federal legislation prohibits indemnification for certain ERISA violations.
Indemnitee understands and acknowledges that the Company has undertaken or may
be required in the future to undertake with the SEC to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.

     7.  Officer and Director Liability Insurance.  The Company shall, from time
         ----------------------------------------
to time, make the good faith determination whether or not it is practicable for
the Company to obtain and maintain a policy or policies of insurance with
reputable insurance companies providing the officers and directors of the
Company with coverage for losses from wrongful acts, or to ensure the Company's
performance of its indemnification obligations under this Agreement. Among other
considerations, the Company will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage.  In all policies of
director and officer liability insurance, Indemnitee shall be named as an
insured in such a manner as to provide Indemnitee the same rights and benefits
as are accorded to the most favorably insured of the Company's directors, if
Indemnitee is a director; or of the Company's officers, if Indemnitee is not a
director of the Company but is an officer; or of the Company's key employees, if
Indemnitee is not an officer or director but is a key employee.  Notwithstanding
the foregoing, the Company shall have no obligation to obtain or maintain such
insurance if the Company determines in good faith that such insurance is not
reasonably available, if the premium costs for such insurance are
disproportionate to the amount of coverage provided, if the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient
benefit, or if Indemnitee is covered by similar insurance maintained by a parent
or subsidiary of the Company.

     8.  Severability.  Nothing in this Agreement is intended to require or
         ------------
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law.  The Company's inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach of
this Agreement.  The provisions of this Agreement shall be severable as provided
in this Section 8.  If this Agreement or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.

     9.  Exceptions.  Any other provision herein to the contrary
         ----------
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:

          (a) Claims Initiated by Indemnitee.  To indemnify or advance expenses
              ------------------------------
to Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the Delaware General Corporation Law, but such indemnification or

                                      -5-
<PAGE>

advancement of expenses may be provided by the Company in specific cases if the
Board of Directors finds it to be appropriate;

          (b) Lack of Good Faith.  To indemnify Indemnitee for any expenses
              ------------------
incurred by Indemnitee with respect to any proceeding instituted by Indemnitee
to enforce or interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by Indemnitee in such
proceeding was not made in good faith or was frivolous;

          (c) Insured Claims.  To indemnify Indemnitee for expenses or
              --------------
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) to the
extent such expenses or liabilities have been paid directly to Indemnitee by an
insurance carrier under a policy of officers' and directors' liability insurance
maintained by the Company; or

          (d) Claims under Section 16(b).  To indemnify Indemnitee for expenses
              --------------------------
or the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.

     10.  Construction of Certain Phrases.
          -------------------------------

          (a) For purposes of this Agreement, references to the "Company" shall
                                                                 -------
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
if Indemnitee is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, Indemnitee shall stand in
the same position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.

          (b) For purposes of this Agreement, references to "other enterprises"
                                                             -----------------
shall include employee benefit plans; references to "fines" shall include any
                                                     -----
excise taxes assessed on Indemnitee with respect to an employee benefit plan;
and references to "serving at the request of the Company" shall include any
                   -------------------------------------
service as a director, officer, employee or agent of the Company which imposes
duties on, or involves services by, such director, officer, employee or agent
with respect to an employee benefit plan, its participants, or beneficiaries;
and if Indemnitee acted in good faith and in a manner Indemnitee reasonably
believed to be in the interest of the participants and beneficiaries of an
employee benefit plan, Indemnitee shall be deemed to have acted in a manner "not
                                                                             ---
opposed to the best interests of the Company" as referred to in this Agreement.
--------------------------------------------

     11.  Attorneys' Fees.  In the event that any action is instituted by
          ---------------
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee

                                      -6-
<PAGE>

with respect to such action, unless as a part of such action, the court of
competent jurisdiction determines that each of the material assertions made by
Indemnitee as a basis for such action were not made in good faith or were
frivolous. In the event of an action instituted by or in the name of the Company
under this Agreement or to enforce or interpret any of the terms of this
Agreement, Indemnitee shall be entitled to be paid all court costs and expenses,
including attorneys' fees, incurred by Indemnitee in defense of such action
(including with respect to Indemnitee's counterclaims and cross-claims made in
such action), unless as a part of such action the court determines that each of
Indemnitee's material defenses to such action were made in bad faith or were
frivolous.

     12.  Miscellaneous.
          -------------

          (a) Governing Law.  This Agreement and all acts and transactions
              -------------
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Delaware, without giving effect to principles of conflict of law.

          (b) Entire Agreement; Enforcement of Rights.  This Agreement sets
              ---------------------------------------
forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them.  No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in writing signed by the parties
to this Agreement.  The failure by either party to enforce any rights under this
Agreement shall not be construed as a waiver of any rights of such party.

          (c) Construction.  This Agreement is the result of negotiations
              ------------
between and has been reviewed by each of the parties hereto and their respective
counsel, if any;  accordingly, this Agreement shall be deemed to be the product
of all of the parties hereto, and no ambiguity shall be construed in favor of or
against any one of the parties hereto.

          (d) Notices.  Any notice, demand or request required or permitted to
              -------
be given under this Agreement shall be in writing and shall be deemed sufficient
when delivered personally or sent by telegram or fax, or forty-eight (48) hours
after being deposited in the U.S. mail, as certified or registered mail, with
postage prepaid, and addressed to the party to be notified at such party's
address as set forth below or as subsequently modified by written notice.

          (e) Counterparts.  This Agreement may be executed in two or more
              ------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

          (f) Successors and Assigns.  This Agreement shall be binding upon the
              ----------------------
Company and its successors and assigns, and inure to the benefit of Indemnitee
and Indemnitee's heirs, legal representatives and assigns.

                                      -7-
<PAGE>

          (g) Subrogation.  In the event of payment under this Agreement, the
              -----------
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
to effectively bring suit to enforce such rights.

                            [Signature Page Follows]

                                      -8-
<PAGE>

     The parties hereto have executed this Agreement as of the day and year set
forth on the first page of this Agreement.

                              RITA Medical Systems, Inc.

                              By:_____________________________

                              Title:__________________________

                              Address:    967 Shoreline Blvd.
                                          Mountain View, CA  94043

AGREED TO AND ACCEPTED:

_____________________________
(Signature)

Address:

                                      -9-<PAGE>

                                                                    Exhibit 10.8

                                 March 21, 1997

Barry N. Cheskin
43 West 61st Street
Apartment 19N
New York, NY  10023

Dear Barry:

     On behalf of Rita Medical Systems, Inc, (the "Company"), I am pleased to
offer you the position of President and Chief Executive Officer of the Company.
Speaking for myself, as well as the other members of the Company's Board of
Directors, we are all very impressed with your credentials and we look forward
to your future success in this position.

     The terms of your new position with the Company are as set forth below:

     1. Position.

        a. You will become the President and Chief Executive Officer of the
Company, working out of the Company's headquarters office in Mountain View,
California. As President and Chief Executive Officer, you will have overall
responsibility for the affairs of the Company. You will report directly to the
Chairman of the Company's Board of Directors and will be appointed to the Board
of Directors (the "Board") at the time you commence service as President and
Chief Executive Officer. The Company will use its best efforts to maintain you
on the Board throughout your period of employment with the Company as Chief
Executive Officer by taking all action necessary to nominate you for election to
the Board at each shareholders meeting held during your period of service as
Chief Executive Officer at which Board members are to be elected.

        b. You agree to the best of your ability and experience that you will at
all times loyally and conscientiously perform all of the duties and obligations
required of and from you pursuant to the express and implicit terms hereof, and
to the reasonable satisfaction of the Company. During the term of your
employment, you further agree that you will devote all of your business time and
attention to the business of the Company, the Company will be entitled to all of
the benefits and profits arising from or incident to all such work services and
advice, you will not render commercial or professional services of any nature to
any person or organization,
<PAGE>

whether or not for compensation, without the prior written consent of the Board,
and you will not directly or indirectly engaged or participate in any business
that is competitive in any manner with the business of the Company. Nothing in
this letter agreement will prevent you from accepting speaking or presentation
engagements in exchange for honoraria, from serving on boards of charitable
organizations or otherwise rendering minor or insubstantial services for any
religious or charitable organizations of which you are a member or from owning
no more than one percent (1%) of the outstanding equity securities of a
corporation whose stock is listed on a national stock market.

     2. Start Date. Subject to fulfillment of any conditions imposed by this
letter agreement, you will commence this new position with the Company within
forty-five (45) days after execution of this agreement. The date you actually
commence employment with the Company will be designated as your Start Date.

     3. Proof of Right to Work. For purposes of federal immigration law, you
will be required to provide to the Company documentary evidence of your identity
and eligibility for employment in the United States. Such documentation must be
provided to us within three (3) business days of your date of hire, or our
employment relationship with you may be terminated.

     4. Compensation.

     a. Base Salary. You will be paid a monthly salary of $16,666.67, which is
equivalent to $200,000 on an annualized basis. Your salary will be payable in
two equal payments per month pursuant to the Company's regular payroll policy
(or in the same manner as other officers of the Company).

     b. Bonus. You will be eligible to receive an incentive bonus of up to
thirty percent (30%) of your annual base salary, pro-rated for the portion of
the fiscal year ending December 31, 1997 which transpires from and after your
actual Start Date. Payment of the bonus will be at the discretion of the Board
and will be based on achievement of mutually agreeable objectives to be
determined by you and the Board within ninety (90) days after your Start Date.
You will also be eligible to earn incentive bonuses in future years of up to
thirty percent (30%) of your then current rate of annual base salary, again
based on achievement of mutually-agreed upon objectives and your continued
employment.

     c. Annual Review. Your base salary will be reviewed at the end of each
calendar year as part of the Company's normal salary review process.

     5. Stock Options.

     a. Initial Grant. The Board has authorized the following stock option grant
(the "Initial Option") under the Company's 1994 Incentive Stock Option Plan (the
"1994 Plan") which will become effectively immediately upon your Start Date. The
option will provide you with the right to purchase that number of shares of the
Company's Common Stock ("Shares") which represent seven percent (7%) of the
Company's capital stock outstanding on your Start Date, calculated on a fully
diluted basis, taking into account all outstanding convertible
<PAGE>

securities, warrants, options and similar instruments and the number of shares
of Common Stock which remain available for future option grant or issuance under
the 1994 Plan. The option will have an exercise price equal to the fair market
value per share of Common Stock on your Start Date (currently the fair market
value per share is $0.30). The option will be immediately exercisable for fifty
percent (50%) of the total option shares as fully-vested shares and will become
exercisable for the balance of those shares in a series of twenty-four (24)
successive equal monthly installments upon your completion of each month of
service with the Company, whether as an employee, non-employee Board member or
independent consultant, over the twenty-four (24)-month period measured from the
second anniversary of your Start Date. The option will be an incentive stock
option to the maximum extent allowed by the tax code and will be subject to the
terms of the Company's 1994 Plan and the Stock Option Agreement between you and
the Company.

     b. Anti-Dilution Protection. In the event the Company raises additional
capital through one or more equity issuances effected after your Start Date
other than through the exercise or conversion of securities taken into account
in calculating your initial seven percent (7%) interest or through an initial
public offering of the Company's common stock, your seven percent (7%) equity
interest shall be protected through the first $7,500,000 of such equity capital,
calculated on an aggregate basis. In no event shall your seven percent (7%)
equity interest be diluted below five percent (5%). In addition, your initial
seven percent (7%) equity interest will be protected against any dilution
attributable to any increase in the number of shares of the Company's capital
stock authorized for issuance under the 1994 Plan (or any successor or
additional employee stock option plan) effected prior to the initial public
offering of the Company's common stock. Your anti-dilution protection will be
provided through a series of additional option grants ("Anti-Dilution Options")
made to you under the 1994 Plan at each time a dilutive event is consummated
after your Start Date. Each Anti-Dilution Option will have an exercise price per
share equal to the fair market value of the Common Stock at the time a dilutive
event is consummated and will become exercisable for the option shares in
accordance with the same vesting schedule in effect for your Initial Option
(i.e., immediate vesting in fifty percent (50%) of the option shares and vesting
in the balance of the shares over the twenty-four (24) month period measured
from the second anniversary of your Start Date). No such anti-dilution
protection will be provided you in connection with the initial public offering
of the Common Stock or any subsequent issuance of securities effected
thereafter.

     c. Change in Control Protection. In the event (i) the Company sells all or
substantially all of its assets, (ii) the Company merges with another entity
pursuant to which shareholders of the Company immediately prior to the merger
own less than fifty percent (50%) of the voting securities of the surviving
entity or (iii) the Company's securities holders sell securities possessing
fifty percent (50%) or more of the total combined voting power of the Company's
outstanding securities, then immediately prior to the closing of such
sale/merger transaction, your Initial Option and each Anti-Dilution Option will
become exercisable for seventy-five percent (75%) of your then invested option
shares. The balance of the shares subject to each such option will vest, at the
rate of 2.0833% of the total number of shares for which that option was
originally granted, upon your completion of each additional month of service
with the Company or the successor entity following the sale/merger transaction.
<PAGE>

     d. Tax Gross-Up. Should the accelerated vesting of your option shares,
either at the time of the sale/merger transaction pursuant to paragraph 5.c or
your subsequent termination of employment pursuant to paragraph 8, trigger an
excess parachute payment under Section 280(G) of the Internal Revenue Code in
connection with a sale/merger transaction consummated before any of the
Company's securities have become tradable on an established securities market,
then the Company shall provide you with a full tax-gross-up with respect to your
parachute tax liability under Section 4999 of the Internal Revenue Code.

     e. Company Repurchase Rights. Should any of the following events
("Repurchase Event") occur during the first twenty-four (24) months of your
employment: (i) you voluntarily leave the Company's service other than for Good
Reason or (ii) your employment is terminated by the Company for Misconduct, then
the Company will have the following repurchase rights with respect to up to
fifty percent (50%) of the shares purchased or purchasable under your paragraph
5.a and 5.b stock options:

          - The number of shares which the Company may repurchase will be equal
     to fifty percent (50%) of the total number of shares subject to all your
     paragraph 5.a and 5.b options if the Repurchase Event occurs before you
     have completed six (6) months of service. The number of the shares
     repurchasable by the Company will decrease to thirty seventy and one-half
     percent (37.5%) of that total upon your completion of six (6) months of
     service and will decline by an additional 2.0833% of your total option
     shares upon your completion of each of the next eighteen (18) months of
     service so that the Company's repurchase rights will terminate as to all
     your option shares upon your completion of twenty-four (24) months of
     service measured from your Start Date.

          - The amount payable per repurchased share by the Company will be
     equal to the fair market value per share of the Company's common stock at
     the time of the repurchase (as determined in good faith by the Board) in
     the event of a clause (i) Repurchase Event and will be equal to the option
     exercise price paid per share in the event of a clause (ii) Repurchase
     Event.

          - The Company's repurchase rights under this paragraph 5.e will
     immediately terminate upon a sale/merger transaction under paragraph 5.c
     which triggers the accelerated vesting of your option shares.

     f. Subsequent Option Grants. Subject to the discretion for the Board, you
may be eligible to receive additional grants of stock options or purchase rights
from time to time in the future, on such terms and subject to such conditions as
the Board shall determine as of the date of any such grant.

     6. Benefits.

     a. Insurance Benefits. The Company will provide you and your eligible
dependents with standard medical and dental insurance benefits. You will also be
eligible to
<PAGE>

participate in al other benefit programs available to the Company's executives,
including group-term life insurance coverage and the long-term disability income
plan, to the extent you satisfy the applicable eligibility requirements. In
addition, the Company currently indemnifies all officers and directors to the
maximum extent permitted by law, and you will be requested to enter into the
Company's standard form of Indemnification Agreement (in the form attached as
Exhibit A) giving you such protection. Pursuant to the Indemnification
Agreement, the Company will agree to advance any expenses for which
indemnification is available to the extent allowed by applicable law.

     b. Vacation. You will be entitled to four (4) weeks paid vacation per year,
pro-rated for the remainder of this calendar year.

     c. Auto Allowance. The Company will pay you a monthly automobile allowance
of Seven Hundred Fifty Dollars ($750.00).

     d. Relocation Expenses. In connection with your relocation from New York to
Northern California, the Company will, to the extent required to avoid
out-of-pocket cost to you, reimburse you for up to six (6) months of rental
payments on your New York apartment ($2,500 per month for a maximum of six (6)
months). In connection with your purchase of a residence in Northern California,
the Company will also provide you with a housing subsidy of Thirty-Five Hundred
Dollars ($3,500) per month for the first twenty-four (24) months of your
employment with the Company. In addition, the Company will reimburse you for the
following expense ("Relocation Expenses"):

          - all reasonable relocation expenses, including house-hunting trips,
     moving of household goods and automobile and other reasonable out-or-pocket
     expenses, including expenses incurred in any second move you may have to
     make from any apartment or other temporary lodgings you rent upon your
     relocation to your new permanent residence (but excluding home decorating
     expenses, differences in mortgage rates, differences in costs of comparable
     housing, etc.), closing costs and fees including up to 1.5 mortgage points,
     up to a maximum aggregate reimbursable amount of Thirty Five Thousand
     Dollars ($35,000);

          - reasonable temporary living expenses not to exceed three (3) months,
     and

          - The cost of up to four (4) trips in the aggregate between New York
     and San Francisco by either you or your spouse in the event your spouse is
     unable to relocate immediately with you.

     All amounts received by you for relocation expense reimbursement under this
Paragraph 6.d will be reported as taxable income to you in the year received as
required by applicable tax law. However, the Company will reimburse you on a
"gross-up" basis for the income tax effect of your non-deductible reimbursed
Relocation Expenses so that you will not incur any out-of-pocket cost with
respect to those latter expenses.
<PAGE>

     7. Confidential Information and Invention Assignment Agreement. Your
acceptance of this offer and commencement of employment with the Company is
contingent upon the execution, and delivery to an officer of the Company, of the
Company's Confidential Information and Invention Assignment Agreement, a copy of
which is enclosed for your review and execution (the "Confidentiality
Agreement"), prior to or on your Start Date.

     8. Severance Agreement.

     a. Severance Benefits. In the event (i) your employment is terminated by
the Company or its successor for any reason other than Misconduct or (ii) you
resign for Good Reason, you will be entitled to the following severance
benefits:

          - You will receive continuation of your base salary for up to twelve
     (12) months following the date of your termination or resignation (the
     "Severance Period"). In the event you commence full-time employment during
     the Severance Period, the Company's obligation to pay any severance shall
     cease at the time of such employment. For purposes of this paragraph,
     "full-time employment" shall be defined as at least 35 hours per week of
     compensated labor, including, but not limited to, consulting or other
     contract work.

          During the Severance Period the Company shall pay for your purchase of
     continued health care coverage for you and your eligible dependents upon
     your election to receive such continued health benefits under COBRA; any
     additional COBRA coverage to which you and your dependents may be entitled
     following the expiration of the Severance Period will be at your own cost.

          The shares subject to each of your outstanding stock options will
     immediately vest in full. If the Company has not yet effected the initial
     public offering of its Common Stock, then you will have until the earlier
     of (i) the end of the one (1)-year period following your termination date
     or (ii) the expiration of the ten (10)-year option term in which to
     exercise those options.

     b. Definitions. For purposes of this letter agreement, the following
definitions will be in effect:

          You will be deemed to have resigned for Good Reason if such
     resignation occurs by reason of (i) a change in your position with the
     Company which materially reduces your duties or level of responsibility,
     (B) a reduction in the level of your base compensation by more than fifteen
     percent (15%) or (C) a relocation of your place of employment by more than
     fifty (50) miles.

          Your employment will be deemed to have been terminated for Misconduct
     if such termination occurs by reason of your commission of any act of
     fraud, embezzlement or dishonesty, your unauthorized user or disclosure
<PAGE>

     by you of confidential information or trade secrets of the Company, or any
     other gross negligence or intentional misconduct on your part which
     adversely affects or is likely to adversely affect the business or affairs
     of the Company in a material manner.

     9. Confidentiality of Terms. You agree to follow the Company's strict
policy that employees must not disclose, either directly or indirectly, any
information, including any of the terms of this letter agreement, regarding
salary, bonuses, or stock purchase or option allocations to any person,
including other employees of the Company; provided, however, that you may
discuss such terms with members of your immediate family and any legal, tax or
accounting specialists who provide you with individual legal, tax or accounting
advice and may disclose such terms to the extent required by law.

     10. Governing Law/Successors and Assigns. The provisions of this letter
agreement shall, in all respects, be governed by the laws of the State of
California applicable to agreements executed and to be wholly performed within
the State of California. The provisions of this letter agreement shall inure to
the benefit of, and shall be binding upon, the Company and its successors and
assigns, and you, the personal representative of your estate and your heirs and
legatees. Should th Board or the Company's shareholders authorize any
reorganization of the Company prior to your actual Start Date, then the Company
will structure such reorganization so that the successor entity will assume all
obligations and commitments of the Company hereunder, and you will accordingly
be allowed to commence your employment with such successor entity in accordance
with all the terms and provisions of this letter agreement.

     11. At-Will Employment. Your employment with the Company will be on an "at
will" basis, meaning that either you or the Company may terminate your
employment at any time for any reason or no reason, without further obligation
or liability other than any severance benefits to which you are entitled under
Paragraph 8 of this letter agreement.

     We are all delighted to be able to extend you this offer and look forward
to working with you. To indicate your acceptance of the Company's offer, please
sign and date this letter in the space provided below and return it to me, along
with a singed and dated copy of the Confidentiality Agreement.

     In the event it is determined by the Board, upon consultation with Company
management and the Company's independent auditors, that the enforcement of
paragraph 5.c of this letter agreement, which allows for the partial
acceleration of vesting of stock options upon the effective date of a sale or
merger of the Company, would preclude accounting for any proposed business
combination of the Company as a pooling of interests, and the Board otherwise
desires to approve such a proposed business transaction which requires as a
condition to the closing of such transaction that it be accounted for as a
pooling interests, then such paragraph 5.c of this letter agreement shall be
null and void. For purposes of this paragraph, the Board's determination shall
require the unanimous approval of the non-employee Board members.

     This letter, together with the Confidentiality Agreement and
Indemnification Agreement, set forth the terms of your employment with the
Company and supersede any prior
<PAGE>

representations or agreements, whether written or oral. This letter may not be
modified or amended except by a written agreement, signed by the Company and by
you. This offer to you will expire and be of no further force or effect at the
close of business on March 24, 1997, unless you accept this offer prior to that
time.

                                               Very truly yours,

                                               RITA MEDICAL SYSTEMS, INC.

                                               By: /s/ J. Thomas McMurray
                                                   -----------------------------
                                                   J. Thomas McMurray
                                                   Title:  Chairman of the Board

ACCEPTED AND AGREED:

BARRY N. CHESKIN

/s/ Barry N. Cheskin
--------------------
Signature

March 21, 1997
--------------------
Date

Enclosure: Confidential Information and Invention Assignment Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00008-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00008-of-00352.parquet"}]]