Document:

Exhibit

Exhibit 10.1

EXECUTIVE SEVERANCE AND CHANGE IN CONTROL LETTER AGREEMENT 

Dear Mark:

This Executive Severance and Change in Control Letter Agreement (the “Agreement”) is made and entered into effective as of August 31, 2015 by and between ChannelAdvisor Corporation (“ChannelAdvisor”) and Mark E. Cook (“You”) to set forth certain obligations if Your employment with ChannelAdvisor is terminated under different scenarios.  

1.Definitions
“Award” shall mean any rights held by You to receive shares of ChannelAdvisor stock under a ChannelAdvisor equity incentive plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a Performance Stock Award, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right, or any Other Stock Award, each as defined in the applicable ChannelAdvisor equity incentive plan.
“For Cause” termination shall mean the termination of Your employment for (i) Your conviction of, or plea of nolo contendere to, a felony involving fraud, moral turpitude or dishonesty; (ii) Your willful participation in a fraud or act of dishonesty against ChannelAdvisor, or Your breach of Your fiduciary duty to ChannelAdvisor, which results in material harm or damage to ChannelAdvisor; (iii) willful violation of a reasonable ChannelAdvisor written policy that causes material harm or damage to ChannelAdvisor that is not cured within thirty days after written notice thereof; (iv) Your intentional damage to ChannelAdvisor’s real and intellectual property which results in harm to ChannelAdvisor; (v) Your death; or (vi) Your physical or mental inability to perform substantially all of Your duties for a period of one hundred eighty (180) days, whether or not consecutive, during any 365-day period.
“Good Reason” termination shall mean the termination of Your employment by Your resignation in the following circumstances: (i) the forced relocation of You to a location that is outside of a thirty (30) mile radius of Morrisville, NC; or (ii) a material reduction in Your total compensation which is not a part of a general reduction or other concessionary arrangement affecting all employees or affecting all senior executive officers on a pro rata, equitable basis.  For each event listed in (i) and (ii) above, You shall give ChannelAdvisor notice thereof within ninety (90) days of the initial existence of the event, after which date ChannelAdvisor shall have no less than thirty (30) days to cure the event which would otherwise constitute Good Reason and You must terminate Your employment with the Company for such Good Reason no later than one (1) year after the initial existence of the event giving rise to Good Reason.
“Change in Control” shall have the meaning stated in the ChannelAdvisor Corporation 2013 Equity Incentive Plan, as amended from time to time.  If required for compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), in no event will a Change in Control be deemed to have occurred if such transaction is not also a “change 

Exhibit 10.1

in the ownership or effective control of” ChannelAdvisor or “a change in the ownership of a substantial portion of the assets of” ChannelAdvisor as determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).  ChannelAdvisor may, in its sole discretion and without Your consent, amend the definition of “Change in Control” to conform to the definition of “Change in Control” under Section 409A of the Code, and the regulations thereunder.
“Resignation” shall mean Your resignation of employment from ChannelAdvisor in circumstances other than Good Reason.
“Termination Date” shall mean the date Your employment at ChannelAdvisor ends.
2.    Compensation and Benefits Upon Termination
(A)    By ChannelAdvisor For Cause or by You Upon Resignation
If ChannelAdvisor terminates Your employment For Cause or You submit Your Resignation, You shall not be entitled to any of the severance benefits in Sections 2(B) or 2(C) below.  However, on the next regularly scheduled payroll date after the Termination Date, ChannelAdvisor shall pay You (i) all earned and unpaid salary and variable compensation, if any, payable pursuant to the applicable variable compensation plan, through the Termination Date; (ii) all accrued and unused vacation time in accordance with ChannelAdvisor policies; and (iii) all of Your outstanding business expenses incurred through the Termination Date pursuant to ChannelAdvisor policies, provided that You submit invoices in accordance with ChannelAdvisor policies (collectively, the “Employment Termination Payments”). 
(B)    By ChannelAdvisor other than for Cause or by You for Good Reason
If ChannelAdvisor terminates Your employment, other than For Cause, or You terminate Your employment for Good Reason, and provided that such termination of employment constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h)) (a “Separation From Service”), You will receive the Employment Termination Payments, and, subject to Your execution and nonrevocation within the permitted revocation period of a waiver and release in substantial conformity with the form attached hereto as Attachment 1 (“Severance Agreement”): 
		
	i.
	 ChannelAdvisor shall pay to You a payment equal to six (6) months of Your base compensation (“Base Compensation”) plus one month of Your Base Compensation for each Year of Service up to a total maximum of twelve (12) months of Base Compensation.  A “Year of Service” means a calendar year of service You complete from the date of Your hire until the Termination Date, rounded up to the nearest whole year if You are 6 months and a day or more into the next Year of Service.

In addition, ChannelAdvisor shall pay to You either:

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Exhibit 10.1

(a)    if Your compensation includes a quarterly variable incentive component and the Termination Date is not the last day of the calendar quarter, then one calendar quarter of Your then current quarterly variable incentive compensation calculated at 100% achievement; OR
(b)     if Your compensation includes an annual variable incentive compensation component and the Termination Date is not the last day of the calendar year, a prorated share (for the period from the beginning of the calendar year  to the Termination Date) of Your then current annual variable compensation calculated at 100% achievement.
Payment of the amounts in this Section 2(B)(1) shall be made in a one-time lump sum payment on the next available regularly scheduled payroll date within sixty (60) days following the Termination Date.
		
	1.
	If You timely and properly elect COBRA continuation coverage under ChannelAdvisor’s group health plan for medical or dental coverage, ChannelAdvisor shall pay the monthly premium for the coverage directly to the insurance provider for a period of up to 12 months following the Termination Date.  If You receive subsequent employment that includes one or both of these benefits, then upon the first date You are eligible to receive the benefits, You shall promptly notify ChannelAdvisor in writing.  Upon receipt of Your notice, ChannelAdvisor shall cease payment for any benefits that are provided by Your new employer.  If You delay in notifying ChannelAdvisor of a change in benefits status, You shall promptly return all overpayments.

		
	2.
	ChannelAdvisor shall accelerate vesting of all of the Awards that are unvested as of the Termination Date by one quarter of a year (3 months).  

		
	3.
	ChannelAdvisor shall extend the exercise period for the Awards until two (2) years from the Termination Date, but in no event will the exercise period extend beyond the original term of the Award.

(C)    Termination in Connection with Change in Control Event
If there is a Change in Control, and if, within the period during the two (2) months before or the twelve (12) months after the Change in Control, ChannelAdvisor (or the acquiring entity) (i) terminates Your employment, other than For Cause, or (ii) You terminate Your employment for Good Reason, in each case provided that the termination of employment constitutes a Separation From Service, You will receive the Employment Termination Payments, and, subject to Your execution and nonrevocation within the permitted revocation period of the Severance Agreement, on the next available regularly scheduled payroll date within sixty (60) days following the Termination Date, ChannelAdvisor shall provide You (1) the benefits in Sections 2(B)(1), (2) and (4) above, and (2) full acceleration of vesting 

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Exhibit 10.1

of all Your Awards that are unvested as of the Termination Date, with the effect that all such Awards shall be fully vested and exercisable as of the Termination Date.  
3.    Change in Control with No Termination
If there is a Change in Control and Your employment has not been terminated for any reason as of the first anniversary of the Change in Control, then You shall receive one (1) year of acceleration of vesting of all Your Awards that are unvested as of the first anniversary of the Change in Control, with the additional vesting being credited on the first anniversary of the Change in Control.

4.    Section 280G
(A)Notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement  to the contrary, if (i) any of the payments or benefits provided or to be provided by ChannelAdvisor to You or for Your benefit pursuant to the terms of this Agreement or otherwise (“Covered Payments”) constitute “parachute payments” within the meaning of Section 280G of the Code  subject to the excise tax imposed under Section 4999 of the Code (or any successor provision) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), and (ii) the aggregate present value of the parachute payments reduced by the Excise Tax would be less than three (3) times Your “base amount” as defined in Section 280G(b)(3) of the Code, then the Covered Payments shall be reduced (but not below zero) to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax.

(B)Any such reduction shall be made by in accordance with Section 409A of the Code and the following:
		
	(i)
	the Covered Payments which do not constitute nonqualified deferred compensation subject to Section 409A of the Code shall be reduced first; 

		
	(i)
	all other Covered Payments shall then be reduced as follows: (A) cash payments shall be reduced before non-cash payments; and (B) payments to be made on a later payment date shall be reduced before payments to be made on an earlier payment date; and

		
	(ii)
	in the event that accelerated vesting of Awards is to be reduced, such acceleration will be cancelled in the reverse order of the dates on which the Awards were granted.

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Exhibit 10.1

(C)You shall provide ChannelAdvisor with such information and documents as ChannelAdvisor may reasonably request in order to make a determination under this Section 4.  

		
	5.
	     Compliance with Section 409A of the Code  

It is intended that all of the payments payable under this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code provided under Treasury Regulation Sections 1.409A-1(b)(4) and 1.409A-1(b)(9), and this Agreement will be construed to the greatest extent possible as consistent with those provisions.  If any of the payments are not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A of the Code, and incorporates by reference all required definitions and payment terms.  For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Your right to receive any installment payments under this Agreement (whether severance payments, expense reimbursements or otherwise) will be treated as a right to receive a series of separate payments and, accordingly, each installment payment under this Agreement will at all times be considered a separate and distinct payment.  Notwithstanding any provision to the contrary in this Agreement, if You are deemed by ChannelAdvisor at the time of Your Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, and if any of the payments, including the severance benefits provided under this Agreement, upon Separation From Service set forth herein and/or under any other agreement with ChannelAdvisor are deemed to be “deferred compensation,” then to the extent delayed commencement of any portion of such payments is required to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code and the related adverse taxation under Section 409A of the Code, such payments will not be provided to You prior to the earliest of (i) the expiration of the six (6)-month period measured from the date of Your Separation From Service with ChannelAdvisor, (ii) the date of Your death or (iii) such earlier date as permitted under Section 409A of the Code without the imposition of adverse taxation.  Upon the first business day following the expiration of such applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Paragraph will be paid in a lump sum to You, and any remaining payments due will be paid as otherwise provided in this Agreement or in the applicable agreement.  No interest will be due on any amounts so deferred.
6.General
ChannelAdvisor shall take any required corporate actions needed as of the Termination Date to insure the acceleration of the Awards and extension of the exercise period as described in this Agreement.  This Agreement constitutes the entire agreement between the parties with respect to termination of Your employment with ChannelAdvisor except for that certain ChannelAdvisor Corporation Special Terms and Conditions of Employment between You and ChannelAdvisor dated August 31, 2015, as may be amended from time to time.  If there is a conflict between the terms of this and any other agreement between You and ChannelAdvisor, this Agreement shall control.  Any amendments to this Agreement and any material changes to Attachment 1 hereto must be in writing and executed by both parties.  

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Exhibit 10.1

This Agreement may be entered into by each party in separate counterparts and shall constitute one fully executed Agreement upon execution by both You and ChannelAdvisor.  This Agreement shall be construed in accordance with the laws of the State of North Carolina, without regard to conflict of laws principles.  If the parties enter into legal proceedings in dispute of any of the terms of this Agreement, the losing party shall pay all reasonable legal fees of the prevailing party.  This Agreement is binding upon ChannelAdvisor’s successors (whether by merger, sale of stock, or sale of all or substantially all its assets) and assigns.
	
					
	 
	 
	 
	 
	 

	 
	 
	 
	Sincerely,
	 

	 
	 
	 
	 
	 

	 
	 
	 
	CHANNELADVISOR CORPORATION

	 
	 
	 
	 
	 

	 
	 
	 
	/s/ David J. Spitz
	 

	 
	 
	 
	David J. Spitz
	 

	 
	 
	 
	 
	 

	Accepted and agreed to by:
	 
	 

	 
	 
	 
	 
	 

	/s/ Mark E. Cook
	 
	 
	 
	 

	Mark E. Cook
	 
	 
	 
	 

6

Exhibit 10.1

Attachment 1 to the Agreement

SEVERANCE AGREEMENT
This Severance Agreement (“Severance Agreement”), containing a release and waiver among other terms, is made as of the ________ day of _________________________, by and between ________________ (“Employee”) and ChannelAdvisor Corporation, for the benefit of its employees, officers, directors, successors and assigns (collectively and individually, “ChannelAdvisor”).
1.    Separation.  Employee’s last day of work with ChannelAdvisor and Employee’s employment termination date will be____________________ (the “Separation Date”).
2.    Payment to Employee.
a.Accrued Compensation.  Employee agrees that, upon payment by ChannelAdvisor of Employee’s earned salary and variable compensation, if any, payable pursuant to the applicable variable compensation plan through the Separation Date (collectively, “Compensation”), Employee has received from ChannelAdvisor all compensation due to Employee.  Employee further agrees that Employee will be paid for all accrued and unused vacation time due to Employee in accordance with ChannelAdvisor policies.  The ChannelAdvisor vacation policy is that upon termination, eligible employees are paid for accrued but unused vacation, up to a maximum of 40 hours.  Employee will receive these Compensation and vacation payments on the first regular pay date following the Separation Date in accordance with ChannelAdvisor’s normal pay cycle, regardless of whether or not Employee signs this Severance Agreement
b.Expense Reimbursements.  If Employee has been issued any ChannelAdvisor credit or calling cards, ChannelAdvisor will cancel these card(s) effective as of the Separation Date.  Employee agrees that, on the Separation Date, Employee will submit Employee’s final documented expense reimbursement statement reflecting all business expenses Employee incurred through the Separation Date, if any, for which Employee seeks reimbursement.  ChannelAdvisor will reimburse Employee for reasonable business expenses pursuant to ChannelAdvisor’s regular business practice.  Employee will receive these payments regardless of whether or not Employee signs this Severance Agreement
c.Severance Payment and Benefits.  In accordance with and subject to the terms of that certain Executive Severance and Change in Control Letter Agreement between Employee and ChannelAdvisor dated _________________ (the “Agreement”) in particular, the requirement that this Severance Agreement becomes effective by the twenty-ninth (29th) day following the Separation Date as provided in Paragraph 11 of this Severance Agreement, ChannelAdvisor will:
		
	a.
	pay Employee an amount equal to $___________ pursuant to Section 2(B)(1) of the Agreement, which total amount shall be paid in a one-time lump sum payment on the next available regularly scheduled payroll date within sixty (60) days following the Separation Date, and,

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Exhibit 10.1

		
	b.
	if Employee timely and properly elects COBRA continuation coverage under ChannelAdvisor’s group health plan for medical or dental coverage, ChannelAdvisor will pay the monthly premium for the coverage directly to the insurance provider for a period of up to 12 months.  If Employee receives subsequent employment that includes one or both of these benefits, then upon the first date Employee is eligible to receive the benefits, Employee shall promptly notify ChannelAdvisor in writing.  Upon receipt of Employee’s notice, ChannelAdvisor shall cease payment for any benefits that are being provided by Employee’s new employer.  If Employee delays in notifying ChannelAdvisor of the change in benefits status, Employee shall promptly return all overpayments.

(a)    Withholding.  Employee agrees that all payments made pursuant to this Paragraph are compensation income and that ChannelAdvisor will make these payments net of applicable withholding and other employment related taxes, with withholding on payments under Paragraph 2(c) shall be made at the lower of Employee’s normal withholding rate or the statutory rate for supplemental wages.
(b)    No Other Payments Related to Employment.  Employee agrees that upon payment of the amounts specified in Paragraphs 2(a), (b) and (c) no further amounts (including without limitation base salary, bonus, incentive or variable compensation, equity, severance or benefits) are due to Employee from ChannelAdvisor for any cause or reason with respect to, related to, or arising from Employee’s employment with ChannelAdvisor after the Separation Date except as otherwise set forth in this Severance Agreement.
(c)    Awards.  Exhibit A states the number of Awards (as defined in the Agreement) held by Employee to receive shares of ChannelAdvisor stock under a ChannelAdvisor equity incentive plan and vested as of the Separation Date, after giving effect to any applicable acceleration provisions in the Agreement relating to the Awards.  Upon expiration of an Award, Employee shall have no further rights under the Award.
1.    Worker’s Compensation, 401(k) Plan and other Benefits.  Employee understands that this Severance Agreement does not affect any rights Employee may have with respect to any applicable worker’s compensation claims, but represents that as of the execution of this Severance Agreement Employee has no injuries or physical or mental limitations, restrictions or impairments that preclude Employee from working in any way and has not suffered any on-the-job injury for which Employee has not already filed a claim.  Employee understands that Employee’s right to participate in all ChannelAdvisor employee benefit plans terminates on the Separation Date, except for continuation of medical and dental coverage as provided herein.  Any benefits accrued and vested as of the Separation Date and which, by their express terms, survive any termination of employment, shall survive in accordance with their respective terms.  Following the Separation Date, the ChannelAdvisor 401(k) Plan administrator will provide Employee with information regarding the distribution and/or rollover of any 401(k) funds.  
2.    Ongoing Obligations.  Employee acknowledges that all obligations under the applicable ChannelAdvisor Corporation Special Terms and Conditions of Employment by and 

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Exhibit 10.1

between ChannelAdvisor and Employee, dated __________, 20__ (“Special Terms”), shall continue and shall remain in full force and effect following Employee’s termination in accordance with the terms and conditions of the Special Terms.  In particular, Employee understands that all obligations concerning non-disclosure and non-use of confidential information, ownership of confidential information and work product, assistance after employment and non-competition shall continue in accordance with the terms and conditions of the Special Terms.  Employee acknowledges that Employee will abide by the terms set forth in the Special Terms, including without limitation the terms regarding noncompetition, non-disclosure and non-use of confidential information.  
3.    Pre-Employment Excluded Work Product.  If Employee listed certain excluded pre-employment work product or creation (collectively, “Excluded Work Product”) from ChannelAdvisor Ownership in Employee’s Special Terms, Employee represents and warrants that no Excluded Work Product, as defined in the Special Terms, was ever included in any product, process, methodology, service, or machine that Employee worked on or worked in conjunction with while employed with ChannelAdvisor.  Without limiting the preceding, if in the course of Employee’s employment with ChannelAdvisor, Employee incorporated, whether intentional or incidental, Excluded Work Product into a ChannelAdvisor product, process, methodology, service, or machine, ChannelAdvisor is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, fully-paid, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to make, have made, modify, make (and own) derivative works of, publicly perform, use, sell, import, and exercise any and all present and future rights in such Excluded Work Product
4.    Return of Property.  By the Separation Date, Employee shall return to ChannelAdvisor all property of ChannelAdvisor, whether tangible or intangible, in Employee’s possession or control, including without limitation, the ChannelAdvisor laptop computer Employee has been using, electronic storage devices, and any other equipment provided by ChannelAdvisor (without deletion of any information stored thereon), company credit cards and calling cards, ChannelAdvisor office keys, and any documents, books, rolodexes (in paper or electronic form), or other information, and all copies thereof.  Please coordinate return of ChannelAdvisor property with [_____].  Employee represents that as of the Separation Date, Employee does not have any other ChannelAdvisor equipment, materials, resources or confidential information in Employee’s possession or under Employee’s control.  Receipt of the payments and benefits described in this Severance Agreement is expressly conditioned upon return of all ChannelAdvisor property.
5.    Confidentiality.  The provisions of this Severance Agreement will be held in strictest confidence by Employee and will not be publicized or disclosed in any manner whatsoever; provided, however, that: (a) Employee may disclose this Severance Agreement to Employee’s immediate family; (b) Employee may disclose this Severance Agreement in confidence to Employee’s attorney, accountant, auditor, tax preparer, and financial advisor; and (c) Employee may disclose this Severance Agreement to the extent required by law, a governmental investigatory agency or legal process.
6.    Nondisparagement.  Employee agrees not to disparage ChannelAdvisor or ChannelAdvisor’s attorneys, directors, managers, partners, employees, agents and affiliates, in any 

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Exhibit 10.1

manner likely to be harmful to them or their business, business reputation or personal reputation; provided that Employee may respond accurately and fully to any question, inquiry or request for information by a governmental investigatory agency or when required by legal process.  ChannelAdvisor and its directors, officers and employees agree not to disparage Employee in any manner likely to be harmful to the goodwill and good reputation of Employee, provided that ChannelAdvisor may respond accurately and fully to any question, inquiry, or request for information when required by a governmental investigatory agency or legal process.
7.    Inquiries.  In consideration of the payments and benefits provided to Employee by this Severance Agreement, Employee agrees to answer from time to time, inquiries from ChannelAdvisor related to work undertaken by Employee during Employee’s employment with ChannelAdvisor.
8.    Waiver and Release.
a.In consideration of the payments and benefits made pursuant to this Severance Agreement the sufficiency of which is hereby acknowledged, Employee hereby voluntarily, willingly, absolutely, unconditionally and irrevocably, fully releases and discharges ChannelAdvisor (and its officers, directors, employees, agents and representatives) of and from any and all debts, demands, actions, causes of action, suits, promises, representations, contracts, obligations, claims, counterclaims, defenses, rights of setoff, demands or liability whatsoever of every name and nature, both at law and in equity including, by way of example and not limitation, rights and claims arising under [[Applicable only if over 40] the Age Discrimination in Employment Act (the “ADEA”) of 1967, as amended, the Older Worker Benefit Protection Act, ] Title VII of the Civil Rights Act of 1964, as amended, Sections 1981 - 1983 of Title 42 of the United States Code, the Equal Pay Act of 1963, as amended, the Americans with Disabilities Act, and any other applicable state and federal employment discrimination laws, breach of contract (including without limitation breach of contract to provide Employee with additional stock in ChannelAdvisor), unpaid expenses or benefits, wrongful discharge, interference with contract, breach of any ChannelAdvisor policy, practice or procedure, negligence, the Employee Income Retirement Security Act of 1974, as amended, loss of consortium, loss of fringe benefits, fraud, misrepresentation, defamation and/or all other claims of tortious conduct which Employee or Employee’s successors in interest or assigns now have, ever have had, or can, shall or may have, as of the date hereof, whether known or unknown, suspected or unsuspected, against ChannelAdvisor arising from or in any manner related to Employee’s employment, or the termination thereof, for whatever cause, or arising from or relating to any other event occurring prior to the date Employee executes this Severance Agreement; provided however that this waiver and release does not cover any claim Employee may have for breach of the terms of this Severance Agreement by ChannelAdvisor and does not effect Employee’s right and ability to enforce the terms of this Severance Agreement.  Employee represents that Employee has no lawsuits, claims or actions pending in Employee’s name, or on behalf of any other person or entity, against ChannelAdvisor or any other person or entity subject to the release granted in this Paragraph.  Notwithstanding the foregoing, Employee is not releasing ChannelAdvisor from any claims that cannot be waived by law, Employee is not releasing ChannelAdvisor from any obligation undertaken in any preexisting obligation to indemnify Employee pursuant to ChannelAdvisor articles and bylaws or applicable 

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Exhibit 10.1

law, and Employee is not waiving Employee’s right to make any claim, charge or complaint with any governmental agency or participate in an investigation by any such agency.  Employee is waiving, however, Employee’s right to any monetary or other relief if any governmental agency or entity, including without limitation the U.S. Equal Employment Opportunity Commission or the federal or a state department of labor, pursues any claims on Employee’s behalf.
b.In consideration of the execution of this Severance Agreement by Employee, ChannelAdvisor hereby voluntarily, willingly, absolutely, unconditionally and irrevocably, releases and discharges Employee of and from any and all debts, demands, actions, causes of action, suits, promises, representations, contracts, obligations, claims, counterclaims, defenses, rights of setoff; demands or liability whatsoever of every name and nature, both at Law and in Equity which ChannelAdvisor or its successors in interest or assigns now have, ever have had, or can, shall or may have, whether known or unknown, suspected or unsuspected, against Employee arising from or in any manner related to Employee’s employment, or the termination thereof, for whatever cause, or arising from or relating to any other event occurring prior to the date hereof.  ChannelAdvisor represents that ChannelAdvisor has no lawsuits, claims or actions pending in ChannelAdvisor’s name, or on behalf of any person or entity, against the Employee or any other person or entity subject to the release granted in this Paragraph.  ChannelAdvisor warrants and covenants it shall maintain for at least six (6) years following Employee’s Termination Date, liability insurance coverage (Director’s and Officer’s liability insurance coverage or tail coverage), sufficient to cover (but no less than $3 million dollars) Employee’s actions as a director and/or officer of ChannelAdvisor with respect to matters arising prior to or as of Employee’s Termination Date.
9.    ADEA Waiver.  [Applicable only if over 40] Employee acknowledges that Employee is knowingly and voluntarily waiving and releasing any rights Employee may have under the ADEA, as amended.  Employee also acknowledges that (i) the consideration given to Employee in exchange for the waiver and release in this Severance Agreement is in addition to anything of value to which Employee was already entitled, and (ii) that Employee has been paid for all time worked and has received all the leave, leaves of absence and leave benefits and protections for which Employee is eligible.  Employee further acknowledges that Employee has been advised by this writing that: (a) Employee’s waiver and release do not apply to any rights or claims that may arise after the execution date of this Severance Agreement; (b) Employee has been advised hereby that Employee should consult with an attorney prior to executing this Severance Agreement; (c) Employee twenty-one (21) days to consider this Severance Agreement (although Employee may choose to voluntarily execute this Severance Agreement earlier and, if Employee does, Employee will sign the Consideration Period waiver below); (d) Employee has seven (7) days following Employee’s execution of this Severance Agreement to revoke the Severance Agreement in writing actually delivered to [_____] at ChannelAdvisor; and (e) this Severance Agreement shall not be effective until the date upon which the revocation period has expired unexercised, which shall be the eighth day after this Severance Agreement is executed by Employee (the “Effective Date”).
10.    No Admission.  This Severance Agreement does not constitute an admission by ChannelAdvisor of any wrongful action or violation of any federal, state, or local statute, or common 

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Exhibit 10.1

law rights, including without limitation those relating to the provisions of any law or statute concerning employment actions, or of any other possible or claimed violation of law or rights.
11.    Breach. Employee agrees that upon any breach of this Severance Agreement by Employee, Employee will forfeit all amounts paid or owing to Employee under this Severance Agreement and ChannelAdvisor will be relieved of its obligations hereunder except to the extent that such forfeiture and relief would result in an invalidation of the release set forth above.  Further, Employee acknowledges that it may be impossible to assess the damages caused by Employee’s violation of the terms of Paragraphs 4 to 11 of this Severance Agreement and further agrees that any threatened or actual violation or breach of those paragraphs of this Severance Agreement will constitute immediate and irreparable injury to ChannelAdvisor.  Employee therefore agrees that any such breach of this Severance Agreement is a material breach of this Severance Agreement, and, in addition to any and all other damages and remedies available to ChannelAdvisor upon Employee’s breach of this Severance Agreement, ChannelAdvisor shall be entitled to an injunction to prevent Employee from violating or breaching this Severance Agreement.
12.    Reliance.  Employee acknowledges and represents that in executing this Severance Agreement Employee is not relying, and has not relied, upon any representation or statement not expressly stated in this Severance Agreement made by ChannelAdvisor, its agents, employees, representatives, or agents with regard to the subject matter of this Severance Agreement
13.    Waiver.  No waiver of any right or remedy with respect to any occurrence or event shall be valid unless it is in writing and executed by the waiving party, and further no such valid waiver shall be deemed a waiver of such right or remedy with respect to such occurrence or event in the future, and shall not excuse a subsequent breach of the same term.
14.    Successors and Assigns.  This Severance Agreement is binding upon the parties hereto, and their respective heirs, successors and assigns.
15.    Legal Review.  Both parties have had an opportunity for legal review of all terms of this Severance Agreement.  The parties agree that in interpreting any issues which may arise, any rules of construction related to who prepared the Severance Agreement shall be inapplicable, each party having contributed or having had the opportunity to contribute to clarify any issue.
16.    Severability; Entire Agreement.  Each provision of this Severance Agreement is severable from every other provision of this Severance Agreement.  Any provision of this Severance Agreement that is determined by any court of competent jurisdiction to be invalid or unenforceable will not affect the validity or enforceability of any other provision hereof or the invalid or unenforceable provision in any other situation or in any other jurisdiction.  Any provision of this Severance Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.  Employee acknowledges that this Severance Agreement, together with any agreements specifically referenced herein, contains the entire agreement of the parties with respect to the subject matter hereof.  Any agreement between the parties purporting to amend a term or condition of this Severance Agreement shall be in writing and shall specifically identify the paragraph number of the term or condition to be changed, as well as state the parties’ specific intent to amend that term or condition.

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Exhibit 10.1

Please return this signed Severance Agreement by _________________, otherwise, this Severance Agreement shall expire and Employee will forfeit any and all right to the considerations described above.
IN WITNESS WHEREOF, each of the parties to this Severance Agreement has freely and knowingly executed this Severance Agreement.
	
					
	EMPLOYEE
	 
	CHANNELADVISOR CORPORATION

	 
	 
	 
	 
	 

	By:
	 
	 
	By:
	 

	Name:
	 
	 
	Name:
	 

	Date:
	 
	 
	Its:
	 

	 
	 
	 
	 
	 

	Forwarding Address:
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

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Exhibit 10.1

Applicable only if over 40
CONSIDERATION PERIOD
I, ___________________, understand that I have the right to take at least 21 days to consider whether to sign this Severance Agreement, which I received on _________________, 201[_].  If I elect to sign this Severance Agreement before 21 days have passed, I understand I am to sign and date below this paragraph to confirm that I knowingly and voluntarily agree to waive the 21 day consideration period.
	
			
	AGREED:
	 
	 

	 
	 
	 

	 
	 
	 

	Employee Signature
	 
	Date

	 
	 
	 

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Exhibit 10.1

Exhibit A
Employee Vested Equity Incentive AwardsExhibit

AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of November 4, 2015, by and between Masimo Corporation, a Delaware corporation (the “Company”), and Joe Kiani (the “Executive”). 
RECITALS 
A.    The Executive is the founder of the Company and has been its Chairman of the Board and Chief Executive Officer (“CEO”) since its inception.  The Board of Directors of the Company (the “Board”) recognizes that the Executive’s contributions as Chairman of the Board and CEO have been instrumental to the success of the Company.  The Executive and the Company entered into an amended and restated employment contract dated February 7, 2012 (the “Prior Agreement”).  The Board and the Executive desire to amend and restate the Prior Agreement pursuant to the terms hereof to assure the Company of the Executive’s continued employment in an executive capacity and to compensate him therefor.
B.    The Company considers the establishment and maintenance of a sound management to be essential to protecting and enhancing the best interests of the Company and its stockholders.
C.    The Board has determined that appropriate steps should be taken to retain the Executive and to reinforce and encourage his continued attention and dedication to his assigned duties.
D.    The Company desires to retain the services of the Executive, and the Executive desires to be employed by the Company pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual promises and the mutual covenants and agreements hereinafter set forth, the Company and the Executive hereby agree that the Prior Agreement is amended and restated in its entirety as follows:
1.EMPLOYMENT. During the “Employment Period”, as that term is defined in Section 2 hereof, the Company hereby agrees to continue to employ the Executive and the Executive hereby agrees to continue to serve the Company, on the terms and conditions contained in this Agreement.
2.POSITION AND DUTIES. The Executive shall serve the Company as its Chairman of the Board and CEO and shall report to the Board.  The Executive’s responsibilities, duties and authority shall remain consistent with the Executive’s present responsibilities, duties and authority as the Chairman of the Board and CEO.  The Executive hereby accepts such employment and agrees to devote substantially all of his full business and professional time and energy to the business and affairs of the Company.  Notwithstanding the foregoing, the Executive shall be permitted to (i) serve as an employee, consultant, officer and/or director of, and provide services to, Cercacor Laboratories, Inc., a Delaware corporation (f/k/a Masimo Laboratories, Inc.), (ii) serve on the board of directors of any company or entity, (iii) manage the Executive’s 

personal investments, (iv) engage in other personal activities on a basis substantially consistent with past practice and (v) without limiting the foregoing, provide the services and engage in the activities previously disclosed to the Board. 
3.EMPLOYMENT PERIOD. The “Employment Period” shall mean the period commencing on the date hereof and ending on December 31, 2017; provided that, beginning on January 1, 2018 and on January 1 of each year thereafter, the Employment Period shall be extended automatically for an additional year unless a notice of non−renewal of this Agreement (“Notice of Non-Renewal”) is given by either the Executive or the Company to the other party at least one year prior to the scheduled expiration of the Employment Period.
4.PLACE OF PERFORMANCE. In connection with his employment by the Company, the Executive shall be based at the Company’s office or facility where, on the date hereof, the Executive is regularly rendering services on behalf of the Company and shall not be required to be absent therefrom on travel status or otherwise more than a reasonable number of days in any calendar year.  For purposes of the preceding sentence, the parties hereto agree that a “reasonable number of days” shall mean such number of days which is not in excess of one hundred twenty−five percent (125%) of the number of days on which the Executive was on travel status or otherwise required by the Company to be absent from such office or facility during the calendar year immediately prior to the year of computation.
5.COMPENSATION.
5.1    BASE SALARY. In consideration for services performed pursuant to this Agreement, the Company will pay or cause to be paid to the Executive, and the Executive will be entitled to receive and hereby agrees to accept, effective August 1, 2015, an annual base salary of one million dollars ($1,000,000) subject to increases in the discretion of the Board or the Compensation Committee of the Board (“Base Salary”), payable in accordance with the Company’s normal payroll payment policy.
5.2    BONUS. The Executive shall be eligible to receive an annual bonus equal to one-hundred percent (100%) of his Base Salary based on the Company’s attaining certain financial goals established by the Board (or designated committee); provided that, in the event the Board (or designated committee) determines that the Company achieved each of the financial measures included in the criteria for the “Company Factor” for a “Plan Year” under the Masimo Corporation Executive Annual Cash Bonus Award Plan, as may be amended or restated from time to time, or any successor plan (each as defined therein), the Executive shall automatically receive a bonus equal to one-hundred percent (100%) of the Executive’s Base Salary (or such higher percentage approved by the Board (or designated committee)) for such year.  In addition, the Executive may be entitled to receive such additional bonus amounts as the Board (or designated committee) shall determine in its discretion, such as pursuant to the Masimo Corporation Executive Multi−Year Cash Bonus Award Plan, as may be amended or restated from time to time, or any successor plan.  In determining such additional amounts, if any, the Board (or Compensation Committee of the Board) shall consider among other things the Executive’s contribution to the accomplishment of the Company’s long−range business goals, the success of 

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various corporate strategies in which the Executive participated, and the Executive’s unique services in connection with the maintenance or increase in stockholder values in the Company.
5.3    STOCK OPTIONS AND RELATED INCENTIVE PLANS. The Executive shall be eligible to participate in the Company’s existing incentive programs and any additional or successor incentive plan or plans, including the Masimo Corporation 2007 Stock Incentive Plan (the “Stock Incentive Plan”).  During each of fiscal years 2016 and 2017, the Executive shall be granted a non-qualified stock option to purchase an aggregate of at least 300,000 shares of the Company’s common stock (“Common Stock”) (as adjusted for stock splits, stock dividends, recapitalizations and similar transactions) that vests at a rate of twenty percent (20%) per year, with an exercise price per share equal to one-hundred percent (100%) of the fair market value (as defined under the applicable stock option plan pursuant to which the grant was made) of one share of Common Stock on the date of grant. All option grants made to the Executive pursuant to such plans shall provide for an expiration date consistent with the provisions of such plans, without regard to termination of employment; provided, however, that in no event shall any option remain exercisable beyond its stated expiration date. During each fiscal year during the Employment Period after fiscal year 2017, the Executive shall receive equity grants of the value at least consistent with equity grants made to comparable chief executive officers of comparable companies (taking account revenues, market capitalization and industry).
5.4    EXPENSES. The Company shall reimburse the Executive for all reasonable expenses incurred and paid by the Executive in the course of the performance of his duties pursuant to this Agreement.  In addition, the Company shall reimburse the Executive for all reasonable travel and lodging expenses for the Executive’s immediate family, if the Executive elects to have his immediate family accompany him during his business travel.  Notwithstanding anything to the contrary set forth in the Company’s Business Travel and Expense Policy, dated October 22, 2003, as may be amended or restated from time to time (the “Travel and Expense Policy”) or the Company’s 2006 Employee Handbook, as may be amended or restated from time to time (the “Employee Handbook”), for purposes of this Agreement, “reasonable” expenses shall be deemed to include travel and hospitality expenses for first class airplane travel and accommodations and expenses for travel using private or chartered aircraft.  In addition, the following Company reimbursement policies and provisions shall not apply to the Executive: (i) the Travel and Expense Policy; and (ii) the section entitled “Expense Reimbursements” in the Employee Handbook.  Expenses reimbursable under this paragraph must be reimbursed within a reasonable period of time following the Executive’s submission to the Company of the reimbursement request and supporting documentation reasonably requested by the Company and in no event later than the end of the calendar year following the calendar year in which the expenses were incurred by the Executive.
5.5    FRINGE BENEFITS. The Executive shall be entitled to continue to participate in or receive benefits under all of the Company’s employee benefits plans and arrangements that he participates in on the date hereof or plans or arrangements providing the Executive with at least equivalent benefits thereunder.  The Company agrees that, without the Executive’s prior written consent, it will not make any changes in such plans or arrangements 

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which would adversely affect the Executive’s rights or benefits thereunder without the provision of at least equivalent benefits thereunder.  The Executive shall be entitled to participate in or receive benefits under any pension plan, profit−sharing plan, savings plan, stock option plan, life insurance, health−and−accident plan or arrangement made available by the Company in the future to its executives and key management employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements.  No amounts paid or benefits provided to the Executive under any plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of compensation to the Executive hereunder.
5.6    VACATIONS. The Executive shall be entitled to the number of paid vacation days in each calendar year determined by the Board from time to time for the Company’s senior executive officers (prorated in any calendar year during which the Executive is employed by the Company for less than the entire such year in accordance with the number of days in such calendar year during which he is so employed).  The Executive shall also be entitled to all paid holidays given by the Company to its senior executive officers.
5.7    PERQUISITES. The Executive shall be entitled to continue to receive the fringe benefits appertaining to the offices of Chairman of the Board and CEO of the Company in accordance with present practice, except that the Executive shall not be entitled to any tax reimbursements, gross-ups or similar payments. 
6.    CONFIDENTIAL INFORMATION. The Executive has entered into and agrees to be bound by the terms and conditions of the Company’s Equity-Holder Non-Competition and Confidentiality Agreement dated as of the date hereof and attached as Exhibit A hereto (the “Restrictive Covenant Agreement”).
7.    TERMINATION.
7.1    DEATH. The Executive’s employment hereunder shall terminate upon his death.
7.2    DISABILITY. If, as a result of the Executive’s incapacity due to physical or mental illness, the Executive shall have been absent from his duties hereunder on a full time basis for one hundred twenty (120) consecutive business days, and within thirty (30) days after written “Notice of Termination”, as that term is defined in Section 7.5 hereof, is given shall not have returned to the performance of his duties hereunder on a full-time basis, the Company may terminate the Executive’s employment hereunder.
7.3    CAUSE. The Company may terminate the Executive’s employment hereunder for Cause.  For the purposes of this Agreement, the Company shall have “Cause” to terminate the Executive’s employment hereunder upon (i) the willful and continued failure by the Executive to substantially perform his duties hereunder, other than any such failure resulting from the Executive’s incapacity due to physical or mental illness or (ii) the willful engaging by the Executive in gross misconduct materially injurious to the Company, or (iii) the willful violation by the Executive of the confidentiality and trade secret protection provisions of 

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Restrictive Covenant Agreement attached hereto, provided that such violation results in demonstrably material injury to the Company.  For purposes of this paragraph, no act, or failure to act, on the Executive’s part shall be considered “willful” unless done, or omitted to be done, by him not in good faith and without reasonable belief that his action or omission was in the best interests of the Company.  Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Executive a copy of a resolution, duly adopted by the affirmative vote of not less than three−quarters of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to the Executive and an opportunity for him, together with his counsel, to be heard before the Board), resolving that in the good faith opinion of the Board the Executive engaged in conduct set forth above in clause (i),  (ii), or (iii), and specifying the particulars thereof in detail.
7.4    TERMINATION BY THE EXECUTIVE. The Executive may terminate his employment hereunder (i) for Good Reason, (ii) if his health should become impaired to an extent that makes the continued performance of his duties hereunder hazardous to his physical or mental health or his life, or (iii) at any time by giving six (6) months’ written notice to the Company of his intention to terminate.  For purposes of this Agreement, “Good Reason” shall mean (A) except in connection with a termination of the Executive’s employment for Cause, any diminution in the Executive’s responsibilities, duties and authority set forth in Section 2 hereof, whether due to the assignment to the Executive of any responsibilities, duties or authority that constitute such a diminution or otherwise,  including (i) the Executive ceasing to serve as a Chief Executive Officer of a publicly-traded company or (ii) the Executive ceasing to serve as the Chairman of the Board of the Company or the designation of any director other than the Executive as the lead director of the Board, (B) a reduction in the Executive’s rate of compensation or a reduction in the Executive’s fringe benefits or any other failure by the Company to comply with Section 5 hereof, (C) any failure by the Company to comply with Section 4 hereof, (D) the provision of a Notice of Non-Renewal by the Company, or (E) the occurrence of a “Change in Control”, as that term is defined in Section 9 hereof, provided that, in each case of clauses (A) through (C) above, “Good Reason” shall not be deemed to exist unless (x) Executive provides the Company a Notice of Termination within ninety (90) days following the initial occurrence of such event, (y) the Company fails to cure the event giving rise to Good Reason within thirty (30) days following its receipt of such Notice of Termination (the “Cure Period”) and (z) Executive’s resignation for Good Reason is effective within thirty (30) days after the expiration of the Cure Period.  
7.5    NOTICE OF TERMINATION. Any termination by the Company pursuant to Section 7.2 or 7.3 hereof or by the Executive pursuant to Section 7.4 hereof shall be communicated by written Notice of Termination to the other party hereto.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.

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7.6    DATE OF TERMINATION. “Date of Termination” shall mean (i) if the Executive’s employment is terminated by his death, the date of his death, (ii) if the Executive’s employment is terminated pursuant to Section 7.2 hereof, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the performance of his duties on a full−time basis during such thirty (30) day period), (iii) if the Executive’s employment is terminated pursuant to Section 7.3 hereof or clause (iii) of Section 7.4 hereof, the date specified in the Notice of Termination, or (iv) if the Executive’s employment is terminated for any other reason, the date on which a Notice of Termination is given; provided that if within sixty (60) days after a Notice of Termination is given the party receiving such Notice of Termination notifies the other party that it disputes the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties, or by a final determination by the Superior Court of California for the County of Orange.
8.    COMPENSATION UPON TERMINATION, DEATH OR DURING DISABILITY.
8.1    DEATH. If the Executive’s employment shall be terminated by reason of his death during the Employment Period, the Company shall pay to such person as he shall designate in a notice filed with the Company, or, if no such person shall be designated, to his estate as a death benefit, an annual amount equal to one−half (1/2) of the Executive’s Base Salary at the rate in effect on the date of the Executive’s death.  Such amount shall be paid each year for each of three (3) consecutive years following the Executive’s death, in substantially equal monthly installments commencing within thirty (30) days following the Executive’s death.  This amount shall be exclusive of and in addition to any payments the Executive’s surviving spouse, beneficiaries or estate may be entitled to receive pursuant to any pension or employee benefit plan or life insurance policy maintained by the Company. For avoidance of doubt, if the Executive has not specifically designated a beneficiary of these payments, no other beneficiary designation in effect for any other Company benefit or insurance shall serve as a beneficiary designation for these payments and they will instead be paid to his estate.
8.2    DISABILITY. During any period during the Employment Period that the Executive fails to perform his duties hereunder as a result of incapacity due to physical or mental illness, the Executive shall continue to receive his full Base Salary and incentive compensation until the Executive’s employment is terminated pursuant to Section 7.2 hereof, or until the Executive terminates his employment pursuant to clause (ii) of Section 7.4 hereof, whichever first occurs.  After any such termination, the Executive shall be paid an annual amount equal to three−fourths (3/4) of his Base Salary at the rate then in effect, payable each year for a period of two (2) consecutive years following the date of such termination and, subject to Section 8.6 hereof, commencing within thirty (30) days following the Executive’s termination.  To the extent permitted by Treasury Regulation § 1.409A−3(i)(1)(ii)(A), such disability benefits shall be reduced by any disability payment otherwise payable by or pursuant to disability plans maintained by the Company and actually paid to the Executive and shall be paid in substantially equal monthly installments in accordance with the Company’s normal payroll payment policy.

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8.3    CAUSE. If the Executive’s employment shall be terminated for Cause, the Company shall pay the Executive his full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and the Company shall have no further obligations to the Executive under this Agreement.
8.4    OTHER. If, during the Employment Period, the Company shall terminate the Executive’s employment other than pursuant to Sections 7.1, 7.2 or 7.3 hereof or if the Executive shall terminate his employment pursuant to clause (i) of Section 7.4 hereof (each, a “Qualifying Termination”), then:
(i)Standard Severance.  The Company shall pay to the Executive in cash a severance benefit equal to two times the sum of (i) the Executive’s Base Salary at the rate then in effect, and (ii) the average annual bonus paid to the Executive during the immediately prior three (3) years.  Such amount shall be paid over a period of two (2) years in substantially equal installments in accordance with the Company’s normal payroll payment policy and, subject to Section 8.6 hereof, commencing within thirty (30) days following the Executive’s termination of employment.
(ii)Equity Treatment.  The Company shall vest, effective as of immediately prior to such Qualifying Termination, all of the Executive’s stock options and other equity awards (if any).
(iii)Other Payments.
(1)Effective as of the date hereof, the Company shall grant the Executive a one-time grant of 2,700,000 restricted share units (“RSUs”) (as adjusted for stock splits, stock dividends, recapitalizations and similar transactions) under the Stock Incentive Plan and the restricted share unit award agreement attached as Exhibit B hereto (the “Award Agreement”).  Each RSU shall vest effective as of immediately prior to a Qualifying Termination (the “Vesting Date”) during the Employment Period, provided that 270,000 RSUs (as adjusted for stock splits, stock dividends, recapitalizations and similar transactions) shall terminate without the payment of any consideration to the Executive, to the extent then unvested, on January 1 of each year, beginning on January 1, 2018.  Each RSU shall represent the right to receive, on the tenth (10th) day following the Vesting Date (subject to Section 8.6 hereof), one share of Common Stock.  Notwithstanding the foregoing, the Board, in its sole discretion, may accelerate the vesting of some or all of the RSUs at any time prior to the Vesting Date, provided that payment of the RSUs accelerated in accordance with this sentence shall be made in shares of Common Stock on the (10th) day following the date of the Executive’s “separation from service” within the meaning of Treasury Regulation Section 1.409A−1(h) (subject to Section 8.6 hereof).  In the event of any inconsistency between the terms of this Agreement and the Award Agreement or the Plan, the terms of this Agreement shall govern.
(2)Upon a Qualifying Termination, the Company shall pay to the Executive in a single lump sum on the sixtieth (60th) day following the Executive’s termination of employment (subject to Section 8.6 hereof) a cash amount equal to thirty-five million dollars ($35,000,000) (the “Cash Payment”, and together with the RSUs, the “Special 

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Payment”), provided that the Cash Payment shall be reduced by three million five-hundred thousand dollars ($3,500,000) on January 1 of each year, beginning on January 1, 2018.  A portion of the cash and shares of Common Stock delivered under the Special Payment with a value not to exceed thirty-five million dollars ($35,000,000) (the “Non-Competition Payment”) is being paid to the Executive in consideration of the Executive’s agreement to comply with Sections 1 and 11 of the Restrictive Covenant Agreement and shall be subject to repayment to the Company in the event of a final determination by the Superior Court of California for the County of Orange that the Executive has materially breached such covenants.  The Company agrees that the Non-Competition Payment constitutes reasonable compensation under Section 280G(b)(4)(A) of the Internal Revenue Code of 1986, as amended (the “Code”).
(iv)Rabbi Trust.  Immediately prior to a Change in Control, the Company shall fund a grantor trust (the “Trust”) and the Executive shall enter into an escrow agreement to provide for the payment of (i) the benefits under Sections 8.4(i) and 8.4(iii)(2) hereof and (ii) the RSUs under Section 8.4(iii)(1) hereof (together with the payments under clause (i), the “Benefits”), and the Company shall place amounts in escrow, funded in cash and shares of Common Stock, as applicable, equal to one hundred percent (100%) of the aggregate Benefits assuming that the Executive incurred a termination of employment entitling him to the Benefits immediately following the Change in Control.  The cash amounts held in the Trust shall be credited with interest at the prime interest rate as published in the Wall Street Journal.  Alternatively, in lieu of interest, the Executive may elect at the time the Trust is funded in accordance with this Section for cash amounts held in the Trust to be deemed invested in any of the investment alternatives then available under the Company’s 401(k) retirement plan or otherwise specified by the Executive.  In addition, the Executive may elect at any time for the shares of Common Stock that are held in the Trust to be sold and any cash received therefrom to be held in the Trust and either credited with interest or deemed invested, in either case in accordance with the preceding sentences.  In the event the Executive’s employment terminates on or prior to the second anniversary of the Change in Control in a manner entitling him to the Benefits, the Executive shall be entitled to receive, in full satisfaction of the Benefits, and on the payment dates specified in this Section 8.4, the amounts contributed to the Trust, as adjusted to reflect the applicable interest or gains (or losses) of any deemed investments, as applicable.  Notwithstanding the establishment of any such Trust, the Executive’s rights to the Benefits will be solely those of a general unsecured creditor.  In the event the Executive’s employment is not terminated on or prior to the second anniversary of the Change in Control in a manner entitling him to the Benefits, the amounts held in the Trust shall revert to the Company, provided that such reversion shall have no effect on the Executive’s continuing entitlement to receive the Benefits in accordance with this Section 8.4.  In addition, any amount remaining in the Trust immediately following the date that the last payment of the Benefits to which the Executive becomes or could become entitled has been made shall revert to the Company as of such date.   
8.5    EMPLOYEE BENEFIT PLANS.
(i)    Unless the Executive’s employment is terminated pursuant to Section 7.3 hereof, the Company shall maintain in full force and effect, for the continued benefit of the Executive for the full Employment Period as then in effect without regard to any 

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termination of employment, all employee benefit plans and programs in which the Executive was entitled to participate immediately prior to the Date of Termination, provided that the Executive’s continued participation is possible under the general terms and provisions of such plans and programs.
(ii)    In the event that the Executive’s participation in any such plan or program is barred, the Company shall reimburse expenses actually incurred by the Executive during such period to obtain similar coverage, but only to the extent the Executive’s requested reimbursement of expenses for similar coverage does not exceed the Company’s premiums or contributions that the Company would otherwise pay under the terms of this Agreement as of the date of the Executive’s termination, or date of payment if later, to continue the Executive’s participation in the underlying plan for the period the expenses were incurred by the Executive. Expenses reimbursable under this paragraph shall be reimbursed within thirty (30) days following the Executive’s submission to the Company of the reimbursement request and supporting documentation reasonably requested by the Company and in no event later than the end of the calendar year following the calendar year in which the expenses were incurred by the Executive. The expenses eligible for reimbursement under this paragraph during any calendar year shall not affect the expenses eligible for reimbursement under this paragraph in any other calendar year.
8.6    CODE SECTION 409A COMPLIANCE. Notwithstanding anything in this Agreement to the contrary, if any benefit or amount payable to the Executive under this Agreement on account of the Executive’s termination of employment constitutes “nonqualified deferred compensation” within the meaning of Section 409A (“409A”) of the Code, payment of such benefit or amount shall commence when the Executive incurs a “separation from service” within the meaning of Treasury Regulation Section 1.409A−1(h), which provides that a separation from service will be deemed to occur if the Company and the Executive reasonably anticipate that the Executive shall perform no further services for the Company and any entity that would be considered a single employer with the Company under Sections 414(b) or 414(c) of the Code (whether an employee or an independent contractor) or that the level of bona fide services the Executive will perform in the future (whether as an employee or an independent contractor) will permanently decrease to no more than forty-nine percent (49%) of the average level of bona fide services performed (whether as an employee or independent contractor) over the immediately preceding thirty-six (36) month period.  Such payments or benefits shall be provided in accordance with the timing provisions of this Agreement by substituting the references to “termination of employment” or “termination” with “separation from service”; however, if at the time the Executive incurs a separation from service, the Executive is a “specified employee” within the meaning of 409A, any benefit or amount payable to the Executive under this Agreement on account of the Executive’s termination of employment that constitutes nonqualified deferred compensation subject to 409A shall be delayed until the first day of the seventh month following the Executive’s separation from service (the “409A Suspension Period”).  Within five (5) calendar days after the date the Executive incurs such separation from service, the Company shall contribute to the Trust an amount in cash or shares of Common Stock, as applicable, equal to any payments that the Company would otherwise have been required to pay under this Agreement during the 409A Suspension Period (plus the required 

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interest on any cash amounts, calculated as described in the following sentence).  Within fourteen (14) calendar days after the end of the 409A Suspension Period, the Company shall pay to the Executive (or his estate or beneficiary, as applicable), from the assets of the Trust or otherwise, a lump sum payment in cash or shares of Common Stock, as applicable, equal to any payments (including interest on any such cash payments, at an interest rate equal to the average prime interest rate, as published in the Wall Street Journal, over the 409A Suspension Period) that the Company would otherwise have been required to pay under this Agreement during the 409A Suspension Period.  Notwithstanding the foregoing, in lieu of interest, the Executive may elect at the time the Trust is funded in accordance with this Section for cash amounts held in the Trust to be deemed invested in any of the investment alternatives then available under the Company’s 401(k) retirement plan or otherwise specified by the Executive, and within fourteen (14) calendar days after the end of the 409A Suspension Period, the Executive shall be entitled to receive, in full satisfaction of the payments that the Company would otherwise have been required to pay under this Agreement during the 409A Suspension Period, the amounts contributed to the Trust, as adjusted to reflect the gains (or losses) of such deemed investments.  Thereafter, the Executive shall receive any remaining payments due under this Agreement in accordance with the terms of this Agreement (as if there had not been any suspension period beforehand).  In addition, the Executive may elect at any time, to the extent permitted by law, for shares of Common Stock that are held in the Trust to be sold and any cash received therefrom to be held in the Trust and either credited with interest or deemed invested, in either case in accordance with the preceding sentences.  For purposes of this Agreement, each payment that is part of a series of installment payments shall be treated as a separate payment for purposes of 409A.  Notwithstanding anything in this Agreement to the contrary, all reimbursements and in−kind benefits provided under this Agreement shall be made in accordance with the following requirements of 409A: (i) the reimbursement of eligible expenses will be made no later than the end of the calendar year following the calendar year in which the expenses were incurred by the Executive; (ii) the amount of 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 to be provided in any other calendar year; and (iii) any right to reimbursement of eligible expenses or in−kind benefits is not subject to liquidation or exchange for any other benefit.
8.7    PARACHUTE PAYMENTS.
(i)    Notwithstanding any other provisions of this Agree-ment, in the event that any payment or benefit received or to be received by the Executive (including any payment or benefit received in connection with a Change in Control or the termination of the Executive’s employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits, including the Severance Payments, being hereinafter referred to as the “Total Payments”) would be subject (in whole or part), to any excise tax imposed under Section 4999 of the Code (the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, arrangement or agreement, the cash portion of Total Payments payable pursuant to the terms of this Agreement shall first be reduced, and the noncash portion of the Total Payments payable pursuant to the terms of this Agreement shall thereafter be reduced, to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if 

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(A) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (B) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments); provided, however, that the Executive may elect which portion of the Total Payments payable pursuant to the terms of this Agreement shall be so reduced (or eliminated). 
(ii)    For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken into account, (ii) no portion of the Total Payments shall be taken into account which, in the opinion of a nationally-recognized professional services firm or firms (the “Calculating Firm”) reasonably acceptable to the Executive, does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into account which, in the opinion of the Calculating Firm, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (within the meaning of Section 280G(b)(3) of the Code) allocable to such reasonable compensation, and (iii) the value of any non‐cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Calculating Firm in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
(iii)    At the time that payments are made under this Agree-ment, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from the Calculating Firm or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement).  
9.    CHANGE IN CONTROL OF THE COMPANY. For purposes of this Agreement “Change in Control” shall be deemed to have occurred at such time as:
(i)    any person or more than one person acting as a group within the meaning of Treasury Regulation § 1.409A−3(i)(5)(v)(B) acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) beneficial ownership, as determined under the constructive ownership rules of Section 318(a) of the Code, shares of capital stock of the Company entitling such person or persons to exercise more than thirty-five percent (35%) of the total voting power of all voting shares of the Company; or

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(ii)    any person or more than one person acting as a group within the meaning of Treasury Regulation § 1.409A−3(i)(5)(v)(B) acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets of the Company that have a total fair market value equal to or more than forty percent (40%) of the total gross fair market value of all the assets of the Company immediately before such acquisition or acquisitions; or
(iii)    there shall occur a change in the Board in which the individuals who constituted the Board at the beginning of the twelve (12) month period immediately preceding such change cease for any reason to constitute two-thirds or more of the directors then in office.  For purposes of this Section 9(iii), a director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to, a consent solicitation, relating to the election of directors of the Company) whose election by the Board or whose nomination for election by the stockholders of the Company was approved by a vote of at least a majority of the directors then in office either who were directors at the beginning of such period or whose election or nomination for election was previously so approved will be treated as a member of the Board at the beginning of the twelve (12) month period.
10.    BINDING AGREEMENT. This Agreement and all rights of the Executive hereunder shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
11.    NON−WAIVER OF RIGHTS. The failure to enforce, at any time, any of the provisions of this Agreement, or to require, at any time, performance by the other party of any of the provisions hereof shall in no way be construed to be a waiver of such provision or to affect either the validity of this Agreement, or any part hereof, or the right of either party thereafter to enforce each and every provision in accordance with the terms of this Agreement.
12.     INVALIDITY OF PROVISIONS. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions were omitted.
13.    ASSIGNMENTS; COMPANY BOOKS.
(i)    This Agreement is binding upon the parties hereto and their respective personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. Except as otherwise provided herein, neither of the parties hereto may make any assignment of this Agreement, or any interest herein, without the prior written consent of the other party, except that, without such consent, this Agreement shall be assigned to any corporation or entity which shall succeed to the business presently being operated by the Company, by operation of law or otherwise, including by dissolution, merger, consolidation, transfer of assets, or otherwise.

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(ii)    The Company currently owns all right, title and interest in and to the two books authored by Skip Press tentatively entitled Microfixing and False Claims (collectively, “Company Books”), both of which are works made for hire of the Company.  The Company shall and hereby does irrevocably transfer and assign to the Executive, free and clear of all liens and encumbrances, (i) all right, title and interest in the Company Books (including all copyrights and other intellectual property rights therein or thereto) throughout the world, (ii) the right to enforce the copyrights and other intellectual property rights in and to the Company Books against third parties for past, present and future infringement, and (iii) all proceeds from any of the foregoing.
14.    COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
15.    AMENDMENTS. No modification, amendment or waiver of any of the provisions of this Agreement shall be effective unless in writing specifically referring hereto, and signed by the parties hereto.
16.    NOTICES. For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered by United States certified mail, return receipt requested, postage prepaid, addressed as follows:
	
		
	If to the Executive:
	At the address shown in the Company’s personnel records

	 
	 

	If to the Company:
	Masimo Corporation

	 
	52 Discovery

	 
	Irvine, CA 92618

	 
	Attention: Chairman of the Compensation

	 
	Committee of the Board of Directors

or to such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
17.    SURVIVAL. Sections 6, 10‐13 and 15‐20 hereof shall survive termination or expiration of this Agreement.  For purposes of this Agreement, “expiration” is the ending of this Agreement by reason of a Notice of Non-Renewal being given by one of the parties in accordance with Section 3 hereof.  Provisions of Sections 5.4 and 8 hereof that provide for obligations conditional on the existence of a state of affairs shall survive termination or expiration of this Agreement only to the extent that any such state of affairs exists prior to termination or expiration of this Agreement.  For the sake of clarity, all payments and benefits that may become owing as a result of the specified terminations shall only be due and become owing for terminations that occur during the Employment Period as then in effect without regard 

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to any termination of employment but shall be owing and paid regardless of whether the Employment Period has ended prior to such payments having been completed. 
18.    JURISDICTION. Any suit, action or proceeding arising out of or relating to this Agreement shall be brought in the Superior Court of California for the County of Orange, and the parties hereby irrevocably accept the exclusive personal jurisdiction of such court for the purpose of any suit, action or proceeding.  In addition, the parties each hereby irrevocably waive, to the fullest extent permitted by law, any objection which they may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in the Superior Court of California for the County of Orange, and hereby further irrevocably waive any claim that any suit, action or proceeding brought in such court has been brought in an inconvenient forum.  Notwithstanding the pendency of any such suit, action or proceeding, the Company shall continue to pay the Executive his full compensation in effect when the notice giving rise to any dispute was given (including, but not limited to, base salary and any bonus due) and continue the Executive as a participant in all compensation, benefit and insurance plans in which the Executive was participating when the notice giving rise to the dispute was given, until the dispute is finally resolved.  Amounts paid under this Section are in addition to all other amounts due under this Agreement and shall not be offset against or reduce any other amounts due under this Agreement. The Company also shall pay to the Executive, on an as-incurred basis, all legal fees and expenses incurred by the Executive in seeking to obtain or enforce any benefit or right provided by this Agreement, but in no event shall the Company pay more than three million dollars ($3,000,000) in legal fees and expenses.  Such payments shall be made within five (5) business days after delivery of the Executive’s written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require.  If, prior to the occurrence of a Change in Control, the Superior Court of California for the County of Orange makes a final determination that the Executive did not prevail in any part of the actions to obtain or enforce any benefit or right provided by this Agreement, the Executive shall reimburse the Company for all such legal fees and expenses paid to him by the Company; provided that, for the avoidance of doubt, if the Executive prevailed in any part of any such action, the Executive shall not be required to make such reimbursement.  The Executive's obligation, if any, to reimburse the Company shall be unsecured and no interest shall be charged thereon.
19.    ENTIRE AGREEMENT. Except for the Restrictive Covenant Agreement, this Agreement supersedes all prior employment agreements, both written and oral, between the Company and the Executive, including, without limitation, the Prior Agreement and the tolling agreement dated as of March 27, 2015 between the Company and the Executive. 
20.     INTERPRETATION. This Agreement shall in all respects be interpreted, construed and governed by and in accordance with the laws of the State of California, without regard to conflicts of laws principles. 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the Company at the direction of the Compensation Committee of the Board has caused this Agreement to be executed as of the day and year first above written.
	
		
	“Company”
	MASIMO CORPORATION

	 
	 

	 
	By: /s/ Mark P. de Raad

	 
	Name: Mark P. de Raad

	 
	Its: Executive Vice President and 
Chief Financial Officer

	 
	 

	 
	 

	“Executive”
	/s/ Joe Kiani                                        .

	 
	Joe Kiani

[Signature Page to Amended and Restated Employment Agreement]

15

EXHIBIT A

[RESTRICTIVE COVENANT AGREEMENT]

16

EXHIBIT B

[RESTRICTED SHARE UNIT AGREEMENT]

17

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