Document:

EX-10.33

 Exhibit 10.33 
 ENTEROMEDICS INC. 
 NON-INCENTIVE STOCK OPTION AGREEMENT 

 

									
	 GRANTED TO
	  	 GRANT
DATE
	  	 NUMBER OF
SHARES SUBJECT
TO
OPTION
	  	 EXERCISE PRICE
PER SHARE
	  	 EXPIRATION
DATE

		  		  		  		  	

  

	1.	This Agreement. This agreement, together with Exhibit A (collectively, the “Agreement”), sets forth the terms and conditions of a non-incentive
stock option award representing the right to purchase shares of common stock (“Common Stock”) of EnteroMedics Inc., a Delaware corporation (the “Company”). 

 

	2.	The Grant. Pursuant to the Inducement Option Plan adopted December 22, 2015 (the “Plan”), the Company hereby grants to the individual named
above (the “Optionee”), as of the above grant date (the “Grant Date”), an option (the “Option”) to purchase the number of shares of Common Stock of the Company set forth above (the
“Shares”) at the price per share set forth above (the “Exercise Price”) with the expiration date set forth above (the “Expiration Date”). The Option constitutes an employment inducement grant under
NASDAQ Rule 5635(c)(4) and is being granted pursuant to the terms of the Employment Agreement, entered into as of                     , between the
Company and the Optionee (the “Employment Agreement”). The Option is not intended to qualify as an incentive stock option within the meaning of Section 422A of the Internal Revenue Code of 1986, as amended (the
“Code”). 

  

	3.	Exercise of Option. The exercise of the Option is subject to the following terms and conditions: 

 

	 	(a)	During the lifetime of Optionee, the Option shall be exercisable only by Optionee. The Option shall not be assignable or transferable by Optionee, other than by will or
the laws of descent and distribution. The Option may be exercised only by the Optionee (or by the Optionee’s appropriate legal representatives or guardian in the event of the Optionee’s death or if the Optionee becomes Disabled, as defined
in the Employment Agreement), in whole or in part from time to time as provided in paragraph 3(b) below, during the period commencing on the date set forth in paragraph 3(b) below and ending on the earlier of (i) the Expiration Date or
(ii) the expiration of the applicable period following the date of the Optionee’s termination of employment with the Company, as provided in paragraph 5 below. In no event, however, may the Option be exercised to any extent after the
Expiration Date. 

  

	 	(b)	The Option shall become exercisable in accordance with the schedule set forth below. Once the Option has become exercisable, the Optionee may exercise it to the extent
set forth in the schedule at any time thereafter, subject to the provisions of this Agreement and the Employment Agreement. 

  

			
	 On or after each of
 the following dates
	 	Shares as to which the
Option is vested
	  	 	  

	 Each subsequent monthly anniversary for          months
	 	

  

	 	(c)	In the event the Optionee’s employment is terminated (i) without Cause (as defined in the Employment Agreement), (ii) by the Optionee for Good Reason (as
defined in the Employment Agreement), or (iii) as a result of the Company giving notice to Employee of Company’s desire to terminate the Employment Agreement (pursuant to Section        of the
Employment Agreement), then provided that Optionee has executed, delivered and not rescinded a written release as described in Section         of the Employment Agreement, the remaining unvested shares of the
Option shall vest in accordance with the terms of the Employment Agreement). 

  

	 	(d)	 Upon the occurrence of a Change in Control, the Option shall become fully exercisable on the date the Change of Control is completed. In addition, upon
a Change in Control, the Committee may, in its sole discretion, provide that upon the consummation of such Change in Control, the Option shall be cancelled 

  
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(after its full acceleration) in exchange for a cash payment equal to the difference between (a) the per share amount paid to holders of the Common Stock in such transaction and (b) the
Exercise Price. 

  

	4.	Manner of Exercise. The Option shall be exercised by the delivery of written notice of exercise (the “Notice”) to the Company at its principal
executive office. The Notice shall be in such form as the Committee may prescribe (including electronic form) and shall specify the number of Shares as to which the Optionee is exercising the Option, and shall be accompanied by payment of the
Exercise Price of the Shares either in cash (bank check, certified check or personal check payable to the Company or by wire transfer to the Company) or by the delivery of Shares owned by the Optionee with a Fair Market Value (as defined in the
attached Exhibit A) equal to the amount of the Exercise Price, or a combination of both. The Notice shall also be accompanied by such other information and documents as the Committee, in its discretion, may request. 

 

	5.	Effect of Termination of Relationship with the Company. 

  

	 	(a)	In the event that Optionee’s relationship with the Company or its Affiliates shall terminate, for any reason other than for Cause or Optionee’s death or
Disability, Optionee shall have the right to exercise the Option at any time within five years after such termination to the extent of the full number of Shares Optionee was entitled to purchase under the Option on the Separation Date, subject to
the condition that the Option shall not be exercisable after the expiration of its term. 

  

	 	(b)	In the event that Optionee’s relationship with the Company or its Affiliates shall terminate for Cause, the Option shall terminate as of the Separation Date and
shall not be exercisable thereafter. 

  

	 	(c)	If Optionee shall die during its relationship with the Company or its Affiliates, or within three months after termination of such relationship with the Company for any
reason other than for Cause, or if Optionee’s relationship with the Company or its Affiliates is terminated because the Optionee has become Disabled (as defined in Section        of the Employment
Agreement), and Optionee shall not have fully exercised the Option, the Option may be exercised at any time within twelve months after the date of Optionee’s death or termination of Optionee’s relationship because of Disability by the
legal representative or, if applicable, guardian of Optionee or by any person to whom the Option is transferred by will or the applicable laws of descent and distribution to the extent of the full number of Shares Optionee was entitled to purchase
under the Option on the date of death (or Separation Date, if earlier) or termination of Optionee’s relationship because of Disability, and subject to the condition that the Option shall not be exercisable after the Expiration Date.

  

	6.	Income Taxes. The Optionee is liable for any federal, state and local income or other taxes applicable upon the grant or exercise of the Option or the
disposition of the Shares, and the Optionee acknowledges that he should consult with his own tax advisor regarding the applicable tax consequences. Upon exercise of the Option, the Optionee shall promptly pay to the Company the minimum statutory
withholding taxes required to be withheld or collected by the Company in connection with the exercise of the Option. The Optionee may pay all or a portion of the minimum statutory withholding taxes by (a) having the Company withhold Shares
otherwise to be delivered upon the exercise of the Option with a Fair Market Value equal to the amount of such taxes, (b) delivering to the Company shares of Common Stock other than Shares issuable upon the exercise of the Option with a Fair
Market Value equal to the amount of such taxes or (c) paying cash. For federal income tax purposes, the Option shall not be eligible for treatment as a qualified or incentive stock option. 

 

	7.	No Right to Employment. The grant of the Option shall not be construed as giving the Optionee the right to be retained as an employee of the Company or any
Affiliate, nor will it affect in any way the right of the Company or an Affiliate to terminate the Optionee’s employment at any time, with or without Cause. 

 

	8.	Plan. The Option is issued pursuant to the Plan and is subject to its terms. In the event that any of the terms of this Option conflict or are inconsistent in
any respect with the terms of the Plan, the Plan terms shall control. Optionee hereby acknowledges receipt of a copy of the Plan. The Plan is also available for inspection during business hours at the principal office of the Company.

  

	9.	Adjustments. In the event that there is any change in the Common Stock or corporate structure of the Company as a result of any dividend or other distribution
(whether in the form of cash, Common Stock, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Common Stock or
other securities of the Company, issuance of warrants or other rights to purchase Common Stock or other securities of the Company or other similar corporate transaction or event, then the Committee shall, in such manner as it deems equitable, adjust
the number and type of Shares and the Exercise Price; provided, however, that the number of Shares covered by the Option shall always be a whole number. 

  
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	10.	Governing Law. The validity, construction and effect of the Agreement, and any rules and regulations relating to the Agreement, shall be determined in accordance
with the laws of the State of Minnesota. 

  

	11.	Acknowledgment. This Option shall not be effective until the Optionee dates and signs the form of Acknowledgment below and returns a signed copy of this
Agreement to the Company. By signing the Acknowledgment, the Optionee agrees to the terms and conditions of this Agreement. 

  

									
	ACKNOWLEDGMENT:	 		 		 		 	ENTEROMEDICS INC.
					
	 	 		 		 		 	
	OPTIONEE’S SIGNATURE	 		 		 		 	
					
	 	 		 		 		 	
	DATE	 		 		 		 	
		 		 		 	By:	 	 
		 		 		 		 	[Name]
		 		 		 		 	[Title]

  
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 EXHIBIT A 
 DEFINED TERMS USED IN THE 
 STOCK OPTION AGREEMENT 

The following terms used in this Agreement have the following meanings: 
 “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 promulgated under the Exchange Act. 
 “Associate” shall have the meaning ascribed to such term in Rule 12b-2 promulgated under the Exchange Act. 
 “Change in Control” shall mean: 
 (i) any
“person” (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act who did not own shares of the capital stock of the Company on the date of grant of the Option shall, together with his, her or its Affiliates and Associates
(as such terms are defined in Rule 12b-2 promulgated under the Exchange Act), become the “Beneficial Owner” (as such term is defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s then outstanding securities (any such person being hereinafter referred to as an “Acquiring Person”); 

(ii) the Continuing Directors cease to constitute a majority of the Company’s Board; 

(iii) There should occur (A) any consolidation or merger involving the Company and the Company shall not be the
continuing or surviving corporation or the shares of the Company’s capital stock shall be converted into cash, securities or other property; provided, however, that this subclause (A) shall not apply to a merger or
consolidation in which (i) the Company is the surviving corporation and (ii) the stockholders of the Company immediately prior to the transaction have the same proportionate ownership of the capital stock of the surviving corporation
immediately after the transaction; (B) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company; or (C) any liquidation or dissolution of
the Company; or 
 (iv) The majority of the Continuing Directors determine, in their sole and absolute
discretion, that there has been a Change in Control. 
 “Committee” shall mean the Compensation Committee of the Company’s
Board of Directors. 
 “Continuing Director” shall mean any person who is a member of the Board of Directors of the Company,
while such person is a member of the Board of Directors, who is not an Acquiring Person, an Affiliate or Associate of an Acquiring Person or a representative of an Acquiring Person or of any such Affiliate or Associate and who (i) was a member
of the Company’s Board of Directors on the date of grant of the Option or (ii) subsequently became a member of the Board of Directors, upon the nomination or recommendation, or with the approval of, a majority of the Continuing Directors.

 “Exchange Act” shall mean the Securities and Exchange Act of 1934, as amended. 

“Fair Market Value” shall mean the closing sale price of the Common Stock as reported on the NASDAQ Capital Market on such date or, if
such market is not open for trading on such date, on the most recent preceding date when such market is open for trading. 

  
 A-1EX-10.45

 Exhibit 10.45 
 CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE 
 This Confidential
Separation Agreement and General Release (hereinafter “Agreement”) is entered into by and between Bradford Hancock (hereinafter “you”) and EnteroMedics Inc. (hereinafter “EnteroMedics”). 

WHEREAS, you and EnteroMedics entered into an Executive Employment Agreement dated November 17, 2014
(“Employment Agreement”) which terminates effective January 6, 2016, except as to certain provisions outlined below; 
 WHEREAS, EnteroMedics wishes to provide you with the separation benefits described in Section 2 below; and 

WHEREAS, you and EnteroMedics want to fully and finally settle all issues, differences, and claims, whether
potential or actual, between you and EnteroMedics, including, but not limited to, any claim that might arise out of your employment with EnteroMedics or the termination of your employment with EnteroMedics; 

NOW, THEREFORE, in consideration of the provisions and of the mutual covenants contained herein, you and EnteroMedics agree
as follows: 
 1. Separation from Employment. Effective January 6, 2016 (your “date of separation”), your
employment with EnteroMedics terminates. Except as provided in this Agreement, all benefits and privileges of employment end as of your date of separation. 
 2. Separation Benefits. As consideration for your promises and obligations under this Agreement, and subject to the terms and conditions of this Agreement, including the release of claims set forth
below, EnteroMedics agrees to pay you, as separation pay, the gross amount of three hundred thirty thousand dollars ($330,000.00), less applicable deductions and withholdings for state and federal taxes, which amount represents 12 months of
your base salary as of your date of separation. The separation pay will be divided and paid to you in substantially equal periodic payments at the usual and customary pay intervals of EnteroMedics, less deductions and withholdings. The payments will
begin within 30 business days of the date on which EnteroMedics receives this Agreement signed by you, provided that you do not revoke or rescind this Agreement as set forth below. You agree that you are not entitled to the separation
benefits provided to you in this Agreement if you do not sign this Agreement. 
 3. 2015 Incentive Compensation.
EnteroMedics will notify you in writing no later than February 12, 2016, of the amount of incentive compensation, if any, to be paid to you related to the objectives set for you for calendar year 2015. 

4. Medical, Dental, and Life Insurance. If you elect to extend EnteroMedics-provided medical, dental, and/or life insurance
coverage under COBRA after your date of separation, then EnteroMedics will pay the same share of any COBRA premiums as it paid of the premiums while you were employed for the shorter of (a) twelve (12) months beginning February 1,
2016, and continuing through January 31, 2017, or (b) until you obtain comparable benefits through another employer or entity. You agree that any COBRA premium paid on your behalf and/or any reimbursement made to you for COBRA premiums
paid by you will be treated as taxable by EnteroMedics. 

 5. Stock Options. All options to purchase shares of common stock of EnteroMedics held
by you (the “Options”) are subject to the terms of one or more Stock Option Agreements between you and the Company (each, an “Option Agreement”) and were granted pursuant to the EnteroMedics Inc. Amended and Restated 2003 Stock
Incentive Plan, as amended (the “Plan”). Pursuant to the terms and conditions set forth in the Option Agreements, EnteroMedics agrees that, notwithstanding anything to the contrary set forth in such Option Agreements or the Plan, during
the two-year period following your date of separation, you shall be permitted to exercise any Option immediately to the extent that such Option was vested as of your date of separation or would have vested within one year of your date of separation
had your employment with Company not terminated. Notwithstanding anything to the contrary set forth in such Option Agreements or the Plan, EnteroMedics shall have a right, following your date of separation, to buy back all such Options based on the
per share exercise price under the applicable Option Agreement. The parties agree and acknowledge that, with respect to any Options that were intended by the parties to be treated as “incentive stock options” within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended, such Options, to the extent they may be exercised by you more than 90 days following your date of separation, shall be treated as non-qualified options, notwithstanding any provision
in the Option Agreements to the contrary. 
 6. Confidential Information; Noncompetition and Nonsolicitation. You
executed an Employment Agreement with EnteroMedics, a copy of which is attached hereto as Exhibit A. All provisions of the Employment Agreement that, by their terms, survive the termination of your employment will continue in full force and effect
and are not negated or otherwise affected by this Agreement, including but not limited to Article IV: Confidential Information and Article VI: Noncompetition and Nonsolicitation; and Section 7.1: Company Remedies. 

7. Return of EnteroMedics Property. You acknowledge that, on or before the date you sign this Agreement, you have returned all
EnteroMedics property in your possession, including, but not limited to, all files, memoranda, documents, records, copies of the foregoing, any EnteroMedics credit card, computer, fax machine, printer, copier, keys, access cards, and any other
property of EnteroMedics in your possession. You also acknowledge that, on or before the date you sign this Agreement, you have provided EnteroMedics with any and all pass codes and/or personal identification numbers used by you to access the
EnteroMedics computer system, e-mail system, and/or the Internet, and/or documents or files contained on and saved in the EnteroMedics computer system. 
 8. Duty to Cooperate. You agree that, beginning on the date you are presented with this Agreement, you will cooperate with EnteroMedics with respect to the transition of your duties, the
preservation of effective operations and customer service, and EnteroMedics’ strategic and commercial initiatives. As part of your agreement to cooperate, you will provide a list identifying the status of major projects under way, pending
customer interactions, the status of sale cycles with customers, the names and contact information of key contacts at customers, and any other information reasonably requested by EnteroMedics regarding your duties and responsibilities. You further
agree that, in the 30 day period following your acceptance of this Agreement you will periodically make yourself accessible and available during normal business hours for consultation with EnteroMedics representatives in connection with the
transition of your duties and responsibilities. You agree that such consultation may include appearing from time to time at the office of EnteroMedics for conferences. 

  
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 9. Confidentiality. You agree that the existence and terms and conditions of this
Agreement (other than Exhibit A) shall remain confidential and that you will not disclose any information concerning the provisions of this Agreement to any person or entity, including, but not limited to, any present or former employee of
EnteroMedics. These confidentiality provisions are subject to the following exceptions: you may disclose the provisions of this Agreement to your attorneys, accountants, tax and financial advisors, and immediate family, or in the course of legal
proceedings involving EnteroMedics, or in response to a subpoena, court order, or inquiry by a government agency. You further agree that, if any information concerning the provisions of this Agreement is revealed as permitted by this section, you
shall inform the recipient of the information that it is confidential, and the recipient shall agree to keep the information confidential. 
 10. Release. By this Agreement, you intend to settle any and all claims that you have or may have against EnteroMedics as a result of EnteroMedics hiring you, your employment with EnteroMedics, and
the decision to terminate your employment with EnteroMedics. You agree that, in exchange for EnteroMedics’ promises in this Agreement, and in exchange for the consideration provided to you by EnteroMedics, described above in Section 2,
you, on behalf of your heirs, successors and assigns, hereby release and discharge EnteroMedics, its predecessors, successors, assigns, parents, affiliates, subsidiaries, and related companies, and their officers, directors, shareholders, agents,
servants, employees, and insurers (collectively “the Released Parties”) from all liability for damages and from all claims that you may have against the Released Parties occurring up through the date you sign this Agreement. You understand
and agree that your release of claims in this Agreement includes, but is not limited to, any claims you may have under: Title VII of the Federal Civil Rights Act of 1964, as amended; the Americans with Disabilities Act; the Equal Pay Act; the
Employee Retirement Income Security Act; the Age Discrimination in Employment Act of 1967, as amended; the Older Workers Benefit Protection Act; the Family and Medical Leave Act; the Worker Adjustment and Retraining Notification Act of 1988; the
False Claims Act; the Minnesota Human Rights Act; Minnesota Equal Pay for Equal Work Law, Minn. Stat. §§ 181.66–181.71; Minn. § 181.81 (age discrimination); Minn. Stat. § 176.82 (retaliatory discharge); Minn. Stat.
§§ 181.931, 181.932, 181.935 (whistleblower protection); Minn. Stat. §§ 181.940–181.944 (family leave); or any other federal, state, or local statute, ordinance, or law. 

You also agree and understand that you are giving up all other claims, whether grounded in contract or tort theories, including but not limited to:
wrongful discharge; breach of contract; any claim for unpaid compensation (including, but not limited to, any claims for PTO or severance except as set forth in this Agreement, or for incentive compensation from calendar year 2016); tortious
interference with contractual relations; promissory estoppel; detrimental reliance; breach of the implied covenant of good faith and fair dealing; breach of express or implied promise; breach of manuals or other policies; breach of fiduciary duty;
assault; battery; fraud; false imprisonment; invasion of privacy; intentional or negligent misrepresentation; defamation, including libel, slander, discharge defamation and self-publication defamation; discharge in violation of public policy;
whistleblower; qui tam actions; intentional or negligent infliction of emotional distress; or any other theory, whether legal or equitable. 

  
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 You understand that nothing contained in this Agreement, including but not limited to this Section 10,
will be interpreted to prevent you from filing a charge with the Equal Employment Opportunity Commission (“EEOC”), or any other governmental agency, or from participating in or cooperating with an EEOC or other governmental agency
investigation or proceeding. However, you agree that you are waiving the right to monetary damages or other individual legal or equitable relief awarded as a result of any such proceeding. 

11. Time to Accept. You are hereby informed that the terms of this Agreement shall be open for acceptance and execution by you
through and including February 12, 2016, during which time you may consult with an attorney and consider whether to accept this Agreement. You may not sign this Agreement until February 12, 2016. Changes to this Agreement, whether material
or immaterial, will not restart the running of this acceptance period. You hereby are advised to consult with an attorney prior to signing this Agreement. 
 12. Right to Revoke and Rescind. You are hereby informed of your right to revoke your release of claims, insofar as it extends to potential claims under the Age Discrimination in Employment Act, by
informing EnteroMedics of your intent to revoke your release of claims within 7 calendar days following your signing of this Agreement. You are also informed of your right to rescind your release of claims, insofar as it extends to potential claims
under the Minnesota Human Rights Act, by delivering a written rescission to EnteroMedics within 15 calendar days after your signing of this Agreement. You understand that any such revocation or rescission must be made in writing and delivered by
hand or by certified mail, return receipt requested, postmarked on or before the last day within the applicable revocation period to: Greg Lea, Senior Vice President, CFO and COO, EnteroMedics, Inc., 2800 Patton Road, St. Paul, MN 55113. 

If you exercise your right to revoke or rescind this Agreement, EnteroMedics may, at its option, either nullify this Agreement in its entirety, or keep
it in effect in all respects other than as to that portion of your release of claims that you have revoked or rescinded. You agree and understand that if EnteroMedics chooses to nullify the Agreement in its entirety, EnteroMedics will have no
obligations under this Agreement to you or to others whose rights derive from you. 
 13. Entire Agreement. This
Agreement, as well as the exhibits hereto and any agreements referenced herein, is the final, complete and exclusive agreement of the parties and sets forth the entire agreement between EnteroMedics and you with respect to your employment by
EnteroMedics, and there are no undertakings, covenants or commitments other than as set forth herein. The Agreement may not be altered or amended, except by a writing executed by you and a member of the Board. Except as otherwise indicated, this
Agreement supersedes, terminates, replaces and supplants any and all prior understandings or agreements between the parties relating in any way to you hiring or employment by EnteroMedics. 

14. Governing Law. The laws of the State of Minnesota will govern the validity, construction and performance of this Agreement,
without regard to the conflict of law provisions of any other jurisdictions. If any part of this Agreement is construed to be in violation of any 

  
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law, such part shall be modified to achieve the objective of the parties to the fullest extent permitted and the balance of this Agreement shall remain in full force and effect. If such
modification is not possible, said provision will be deemed severable from the remaining provisions of this Agreement and the balance of this Agreement shall remain in full force and effect. 

15. Remedies. To the extent that the EnteroMedics wishes to pursue remedies against you under Section 7.1 of the Employment
Agreement, you and EnteroMedics agree that such action shall be venued in Minnesota District Court, Hennepin County, or United States District Court, District of Minnesota. For any other dispute, you and EnteroMedics irrevocably consent that any
litigation commenced or arising in connection with the interpretation or enforcement of this Agreement that has not been settled through negotiation within a period of thirty (30) days after the date on which either party shall first have
notified the other party in writing of the existence of a dispute shall be settled by final and binding arbitration under the then-applicable Commercial Arbitration Rules of the American Arbitration Association (“AAA”). Any such
arbitration shall be conducted by one (1) neutral arbitrator appointed by mutual agreement of the parties or, failing such agreement, in accordance with the AAA Rules. The arbitrator shall be an experienced attorney with a background in
employment law. Any arbitration shall be conducted in Minneapolis, Minnesota. An arbitration award may be enforced in any court of competent jurisdiction. Notwithstanding any contrary provision in the AAA Rules, the following additional procedures
and rules shall apply to any such arbitration: 
  

	 	(A)	Each party shall have the right to request from the arbitrator, and the arbitrator shall order upon good cause shown, reasonable and limited pre-hearing discovery,
including ( 1) exchange of witness lists, (2) depositions under oath of named witnesses at a mutually convenient location, (3) written interrogatories, and (4) document requests; 

 

	 	(B)	Upon conclusion of the pre-hearing discovery, the arbitrator shall promptly hold a hearing upon the evidence to be adduced by the parties and shall promptly render a
written opinion and award; 

  

	 	(C)	The arbitrator may award damages or injunctive relief consistent with the terms of this Agreement but may not award or assess punitive damages against either party; and

  

	 	(D)	Each party shall bear his or its own costs and expenses of the arbitration and one-half (1/2) of the fees and costs of the arbitrator, subject to the power of the
arbitrator, in his or her sole discretion, to award all such reasonable costs, expenses and attorneys’ fees to the prevailing party. 

 16. No Admission. Nothing in this Agreement is intended to be, and nothing will be deemed to be, an admission of liability by EnteroMedics or you that either party has violated any state or federal
statute, local ordinance or principle of common law, or that either party has engaged in any wrongdoing. 

  
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 17. Waiver. No waiver of any provision of this Agreement shall be binding unless
executed in writing by the party making the waiver. The waiver by either party of a breach by the other party of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach. 

IN WITNESS WHEREOF, the parties have duly executed this Agreement on the dates set forth below to be effective as of the date shown below. 

I acknowledge and agree that I have read this Agreement in its entirety and that I agree to the conditions and obligations set forth herein. Further,
I agree that I have had adequate time to consider the terms of this Agreement and that I am voluntarily entering into this Agreement with a full understanding of its meaning. I understand that I am hereby advised to consult with an attorney before
signing this Agreement. 
  

									
		 		 		 	DO NOT SIGN BEFORE FEBRUARY 12, 2016
				
	Dated:	 	February 12, 2016	 		 	/s/ Bradford Hancock
		 		 		 	Bradford Hancock
				
		 		 		 	ENTEROMEDICS INC.
					
	Dated:	 	February 24, 2016	 		 	By	 	/s/ Greg S. Lea
					
		 		 		 	Its	 	CFO

  
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 Exhibit A 
 ENTEROMEDICS INC. 
 EXECUTIVE EMPLOYMENT AGREEMENT 

This Employment Agreement (“Agreement”) is made and entered on November 17, 2014 (“Agreement Date”) between
EnteroMedics Inc. (“Company”), a Delaware corporation with its principal place of business at 2800 Patton Road, St. Paul, Minnesota 55113, and Bradford Hancock (“Employee”), a Minnesota resident, whose address is 8680 Great
Waters Alcove, Eden Prairie, MN 55347, for the purpose of setting forth the terms and conditions of Employee’s employment by the Company. 
 RECITALS 
 WHEREAS, Employee possesses certain skills,
talents, contacts, judgment and knowledge of the business of Company; 
 WHEREAS, Employee is currently employed by the
Company as Chief Commercial Officer, the Company desires to have the continued benefit of Employee’s employment in such capacities, and Employee desires to continue to serve in such capacities, pursuant to the terms and conditions set forth in
this Agreement; 
 WHEREAS, Employee will continue to be a key employee of the Company with significant access to
confidential and proprietary information concerning the Company and its business, and Employee understands and agrees that the disclosure of such information or the engaging in competitive activities would cause substantial harm to the Company; and

 WHEREAS, Employee understands that such continued employment is expressly conditioned on execution of this Agreement.

 AGREEMENT 
 NOW, THEREFORE, in consideration of Employee’s continued employment with Company and the foregoing premises, the mutual covenants set forth below and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, Company and Employee agree as follows: 
 ARTICLE I: EMPLOYMENT,
TERM, AND DUTIES 
 1.1 Employment. Company hereby employs Employee as Chief Commercial Officer and Employee accepts such employment
and agrees to perform services for Company pursuant to the terms and conditions set forth in this Agreement. 
 1.2 Term. The term
(“Term”) of this Agreement shall commence on the Agreement Date and, unless earlier terminated in accordance with Article III of this Agreement, shall terminate one year from the Agreement Date; provided, however, the term of this
Agreement shall automatically renew for successive one year terms thereafter unless prior to ninety (90) days of the expiration of the initial Term or any additional Terms, either party provides written notice to the other of its or his desire
to terminate this Agreement. 

  
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 1.3 Position and Duties. 

1.3.1 Service with Company. During the Term, Employee agrees to perform such duties and responsibilities as are assigned to
him from time to time by the CEO and Company’s Board of Directors (“Board”) which currently encompasses financial and administrative services. 
 1.3.2 Performance of Duties. During the Term, Employee agrees to serve Company in an Executive capacity as Chief Commercial Officer and shall perform such duties as are required by the CEO
and the Board. Employee hereby warrants and represents that Employee has no contractual commitments or other obligations to third parties inconsistent with Employee’s acceptance of this employment and performance of the obligations set forth in
this Agreement. Employee shall perform such duties and carry out Employee’s responsibilities hereunder faithfully and to the best of Employee’s ability, and shall devote Employee’s full business time and best efforts to the business
and affairs of the Company (exclusive of periods of vacation, sickness, disability, or other leaves to which Employee is entitled). Employee will perform all of Employee’s responsibilities in compliance with all applicable laws and in a
professional manner consistent with generally accepted industry practices and procedures and any specific Company policies or guidelines, and Employee will ensure that the operations Employee manages are in compliance with all applicable laws

 ARTICLE II: COMPENSATION, BENEFITS AND EXPENSES 
 2.1 Base Salary. Subject to the provisions of Article III of this Agreement, during the Term, Company shall pay Employee a Base Salary not less than $330,000 per year or such higher
annual rate as may from time to time be approved by the Board. Such Base Salary shall be paid in substantially equal regular periodic payments, less deductions and withholdings, in accordance with Company’s regular payroll procedures, policies
and practices as such may be modified from time to time. The Base Salary shall be reviewed by the compensation committee of the Board annually for potential adjustment on the basis of performance and Employee shall be eligible, at Company’s
sole discretion, for annual salary increases consistent with Company’s procedures, policies and practices. If Employee’s Base Salary is increased from time to time during the Term, the increased amount shall become the Base Salary for the
remainder of the Term and any extensions of the Term and for as long thereafter as required pursuant to Article III as applicable, subject to any subsequent increases. 
 2.2 Incentive Compensation. In addition to Base Salary, Company shall make Employee eligible for such cash and equity pursuant to Company’s Incentive Compensation Plan, if any, as may
be applicable and adopted by Company. Payment of incentive compensation will be subject to Employee achieving certain objectives set annually by Employee and the Compensation Committee of the Board, with the target amount of any cash incentive
compensation for any calendar year to be approved by the Compensation Committee of the Board, which in no event shall exceed 40% of Employee’s base salary in effect from time to time. Employee and the CEO will meet and review the objectives set
by the CEO for the upcoming calendar year prior to March 31 of each year. 
 2.3 Participation in Benefits. During the Term
of Employee’s employment by Company, Employee shall be entitled to participate in the employee benefits offered generally by Company 

  
 8 

 
to its employees in accordance with the Company’s existing policies and benefits plans, to the extent that Employee’s position, tenure, salary, health and other qualifications make
Employee eligible to participate. Without limiting the foregoing, Employee shall be eligible to participate in any pension plan, or group life, health or accident insurance or any such other plan or policy that may presently be in effect or that may
hereafter be adopted by the Company for the benefit of its employees and corporate officers generally. Employee is eligible to receive Paid Time Off (“PTO”) on an annual basis subject to Company’s PTO policy. PTO includes all forms of
personal leave including vacation and sick leave. Employee’s participation in such benefits shall be subject to the terms of the applicable plans, as the same may be amended from time to time. Company does not guarantee the adoption or
continuance of any particular employee benefit during Employee’s employment, and nothing in this Agreement is intended to, or shall in any way restrict the right of Company, to amend, modify or terminate any of its benefits during the Term of
this Agreement. As with all benefits, the Company reserves the right to alter related policies and plans, or to cancel such policies or plans altogether, at any time and at its sole discretion. 

ARTICLE III: TERMINATION AND COMPENSATION FOLLOWING TERMINATION 
 3.1 Termination. Subject to the respective continuing obligations of the parties under this Agreement, this Agreement and Employee’s employment hereunder may be terminated prior to the
end of the Term (the “Separation Date”) under the following circumstances; in no event, however, shall the Separation Date be deemed to occur until Employee experiences a “separation from service” within the meaning of
Section 409A of the Internal Revenue Code: 
 3.1.1 Termination By Mutual Agreement. By mutual written
agreement of the parties at any time. 
 3.1.2 Termination By Employee’s Death. In the event of
Employee’s death. 
 3.1.3 Termination By Employee’s Disability. In the event Employee becomes Disabled.
For purposes of this Agreement, “Disabled” or “Disability” means the incapacity or inability of Employee, whether due to accident, sickness or otherwise (with the exception of the illegal use of drugs), as determined by a medical
doctor acceptable to Company and confirmed in writing by such doctor, to perform the essential functions of Employee’s position under this Agreement, with or without reasonable accommodation (provided that no accommodation that imposes undue
hardship on Company will be required) for an aggregate of ninety (90) days during any period of one hundred eighty (180) consecutive days, or such longer period as may be required under applicable law, including any entitlement to any
applicable disability-related leave of absence if Employee requests to take such leave and satisfies all eligibility requirements for such leave and provided such leave does not impose an undue hardship on the Company. 

3.1.4 Termination By Company For Cause. Company may terminate this Agreement and Employee’s employment for Cause at
any time after providing written notice to Employee. For purposes of this Agreement, “Cause” means: (a) willful breach of Employee’s duties to Company or willful breach of this Agreement; (b) conviction of any felony or any
crime involving fraud, dishonesty, or moral turpitude; (c) participation in any fraud against or affecting 

  
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Company or any subsidiary, affiliate, customer, supplier, client, agent, or employee thereof; or (d) any other act Company determines constitutes gross or willful misconduct detrimental to
Company including, but not limited to, unethical practices, dishonesty, disloyalty, or any other acts harmful to Company; provided, however that a for Cause termination pursuant to clause (a), if susceptible of cure, shall not become effective
unless Employee fails to cure such failure to perform or breach within thirty (30) days after his receipt of written notice from Company, such notice to describe such failure to perform or breach and identify what reasonable actions shall be
required to cure such failure to perform or breach. 
 3.1.5 Termination By Employee Without Good Reason. The
Employee may terminate Employee’s employment under this Agreement at any time for any reason or no reason with thirty (30) days written notice. Upon receiving Employee’s notice, Company has the option, at its discretion (a) to
continue to engage Employee’s services through the 30-day notice period until the Separation Date, or (b) terminate the use of Employee’s services during the 30-day notice period, but for salary purposes, treat the Employee as if
employment continued through the 30-day notice period through the Separation Date. In the event that Employee fails to provide thirty (30) days’ prior written notice, Employee shall not be entitled to any payment of incentive compensation,
in accordance with Section 3.2.2 below. 
 3.1.6 Termination By Company Without Cause. Company may terminate
Employee’s employment under this Agreement at any time for any reason or no reason with 30 days written notice including following a Change in Control as defined in Employee’s applicable Company Incentive Stock Option Agreement(s) or
Non-Incentive Stock Option Agreement(s) (“Employee’s Stock Option Agreements”) as the case may be, except that no notice shall be required for a termination without Cause following a Change in Control. In the event the Company should
give Employee notice of termination without Cause, the Company has the option, at its discretion (a) to continue to engage Employee’s services through the 30-day notice period until the Separation Date, or (b) terminate the use of
Employee’s services during the 30-day notice period, but for salary purposes, treat the Employee as if employment continued through the 30-day notice period through the Separation Date. 

3.1.7 Termination By Employee For Good Reason. Employee may terminate Employee’s employment pursuant to this Agreement
for Good Reason. For purposes of this Agreement, “Good Reason” means: (a) at any time, the assignment by Company to Employee of employment duties, functions or responsibilities that are significantly different from, and result in a
substantial diminution of, Employee’s compensation, duties, functions or responsibilities without Employee’s consent; or (b) at any time, a requirement that Employee be based at any office or location more than 75 miles from
Employee’s primary work location prior to the date of this Agreement without Employee’s consent, provided that the Employee shall have Good Reason to terminate Employee’s employment if (i) within 30 days following
Employee’s actual knowledge of the event which Employee determines constitutes Good Reason, Employee notifies the Company in writing that Employee has determined a Good Reason exists and specifies the event creating Good Reason, and
(ii) following receipt of such notice, the Company fails to remedy such event within 30 days. If either condition is not met, Employee shall not have a Good Reason to terminate employment. 

  
 10 

 3.2 Compensation Following Termination Prior to End of the Term. In the event that
Employee’s employment pursuant to this Agreement is terminated prior to the end of the Term, Employee shall be entitled to the following compensation and benefits upon such termination: 

3.2.1 Payment of Base of Salary. In the event that Employee’s employment is terminated pursuant to any subsection of
Section 3.1 of this Agreement, Company shall pay to Employee, Employee’s spouse or Employee’s estate, as the case may be, any amounts due to Employee for Base Salary through the Separation Date in accordance with applicable law.

 3.2.2 Payment of Incentive Compensation. In the event that Employee’s employment is terminated prior to
the expiration of the Term pursuant to subsections 3.1.1; 3.1.2; 3.1.3; 3.15 (with proper notice); 3.1.6; or 3.1.7 of Section 3.1 of this Agreement, Company shall, within 14 calendar days following the Separation Date or following the
expiration of any revocation and/or rescission period in any applicable release of claims, whichever is later, also pay to Employee, Employee’s spouse or Employee’s estate, as the case may be, an amount equivalent to a pro rata portion of
any payment under the Company’s Incentive Compensation Plan to which Employee would have been entitled pursuant to Section 2.2 of this Agreement and the Company’s policies had Employee remained employed through the end of the year in
question, to be determined at the sole discretion of the Compensation Committee of the Board. 
 3.2.3 Payment of
Severance for Termination By Company Without Cause or By Employee for Good Reason. In the event that Employee’s employment is terminated by the Company at the end of the term in accordance with Section 1.2 (Term), or prior to the
expiration of the Term pursuant to subsection 3.1.6 (By Company Without Cause) or 3.1.7 (By Employee for Good Reason), and provided Employee has executed a written release to Company in substantially the same form attached hereto as
Exhibit A and the revocation and/or rescission period specified therein has expired, Company shall also continue to pay, as severance pay, Employee’s Base Salary at the rate in effect on the Separation Date, for a period of
6 months following the Separation Date if employment is terminated by either party within the first 6 months of Employee’s employment with the Company, and for a period of 12 months following the Separation Date if employment is terminated
at or after 6 months of Employee’s employment with the Company. Such payments will be at usual and customary pay intervals of Employer and will be subject to all appropriate deductions and withholdings. In the event that a Change in Control
occurs, to the extent Employee receives related severance benefits, Employee shall be entitled to receive either of the following options at the Employee’s discretion: (a) severance pay to be capped at an amount $1.00 below the allowable
amount under Internal Revenue Code Sections 280G and 4999, or (b) unreduced severance pay, with Employee assuming all responsibility for any excise tax liability. 
 Additionally, pursuant to the terms and conditions set forth in Employee’s applicable Stock Option Agreements with Company, Company agrees that, notwithstanding anything to the contrary set forth in
such Stock Option Agreements or Company’s Stock Incentive Plan, as may be amended from time to time, during the two-year period following the Separation Date, Employee shall be permitted to exercise immediately all Options granted to Employee
that have vested as of the Separation Date and those Options that would have vested within one year of the Separation Date had Employee’s employment with Company not terminated. Notwithstanding anything to the contrary set forth in such Stock
Option Agreements or Company’s Stock 

  
 11 

 
Incentive Plan, the Company shall have a right, following the Separation Date, to buy back all such Options granted to Employee based on the per share exercise price under the applicable option
agreement. The parties hereto agree and acknowledge that, with respect to any Options previously granted to Employee that were intended by the parties to be treated as “incentive stock options” within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended, such Options, to the extent they may be exercised by Employee more than 90 days following the Separation Date shall be treated as non-qualified Options, notwithstanding any provision in Employee’s
Stock Option Agreements to the contrary. 
 In the event that a Change in Control occurs, and Employee is not terminated, the
vesting schedule of Options held by Employee shall accelerate such that on the date the Change of Control is completed 50% of any unvested shares of Employee shall immediately vest and shall anything to the contrary set forth in Employee’s
applicable Stock Option Agreements with the Company or Company’s Stock Incentive Plan; provided, however, that if, in connection with the consummation of the transaction resulting in the Change in Control, Employee receives a cash payment with
respect to each Option equal to the difference or “spread” between (i) the per share amount paid to holders of Common Stock in such transaction and (ii) the per share exercise price under the applicable option agreement, his
Options shall be cancelled upon the consummation of the Change in Control in exchange for such cash payment. 
 In the event
that a Change in Control occurs, and Employee is terminated, the vesting schedule of Options held by Employee shall accelerate such that on the date the Change of Control is completed 100% of any unvested shares of Employee shall immediately vest
and shall be exercisable during the five-year period following the Separation Date notwithstanding anything to the contrary set forth in Employee’s applicable Stock Option Agreements with the Company or Company’s Stock Incentive Plan;
provided, however, that if, in connection with the consummation of the transaction resulting in the Change in Control, Employee receives a cash payment with respect to each Option equal to the difference or “spread” between (i) the
per share amount paid to holders of Common Stock in such transaction and (ii) the per share exercise price under the applicable option agreement, his Options shall be cancelled upon the consummation of the Change in Control in exchange for such
cash payment. 
 3.2.4 General Provision Regarding Treatment of Options. Except as otherwise specified in
Sections 3.2.3 of this Agreement, the terms of the Stock Incentive Plan and Employee’s Stock Option Agreements, as applicable, shall govern the treatment of Employee’s Options following the Separation Date. 

3.3 Benefits Following Termination Prior to the End of the Term. In the event that Employee’s employment is terminated pursuant to
subsections 3.1.2; 3.1.3; 3.1.6; or 3.1.7 of Section 3.1 of this Agreement, Employee shall, at no cost to Employee, be entitled to continue to participate in Company-provided medical, dental, and life insurance programs for a period of
6 months following the Separation Date if employment is terminated by either party within the first 6 months of Employee’s employment with the Company, and for a period of 12 months following the Separation Date if employment is terminated
at or after 6 months of Employee’s employment with the Company – or until Employee obtains comparable benefits through another entity – irrespective of any then pre-existing health conditions of Employee or Employee’s spouse. To
avoid adverse tax consequences to Employee under rules that prohibit discrimination 

  
 12 

 
in favor of highly compensated individuals with respect to health plan eligibility or benefits, the Company must collect the full fair market value of the cost of Employee’s medical, dental,
and life insurance coverage (using applicable COBRA rates to determine the cost of such coverage) from Employee’s salary on an after-tax basis or by personal check from Employee. Because Employee is only obligated to pay the employee share of
the cost of coverage during this period, the Company will reimburse Employee on a taxable basis for the difference between the full fair market value of the cost of the coverage and the employee rate. The Company will provide a gross up so the net
result is Employee’s payment of the employee rate for coverage. 
 If this Agreement is terminated as a result of Employee’s death,
Employee’s then current spouse shall be entitled to continue to participate in Company-provided medical and dental insurance programs for one year after Employee’s death irrespective of any then pre-existing health conditions, unless, in
each case, such continued participation is prohibited by any applicable laws or benefits plans or would otherwise jeopardize the tax qualified status of any such programs. If Company is prohibited by applicable law or benefits plans or would
otherwise jeopardize the tax qualified status of any medical, dental, or life insurance plan and as a result Company terminates coverage, it shall promptly reimburse Employee (or Employee’s spouse as the case may be) for the cost of obtaining
comparable third party coverage irrespective of any then preexisting health conditions of Employee and/or his spouse. 
 Except
as otherwise provided in this Section 3.3, the benefits to which Employee (or, as applicable, Employee’s spouse or estate) may be entitled upon termination pursuant to the plans and policies of Company specified Article II of this
Agreement shall be determined and paid in accordance with such plans and policies. 
 3.4 Surrender of Records and Property. Upon
termination of Employee’s employment with Company, Employee shall deliver promptly to Company all Confidential Information as defined in Section 4.1 and all Company property including, but not necessarily limited to records, manuals,
books, blank forms, documents, letters, memoranda, business plans, minutes, notes, notebooks, reports, computer disks, computer software, computer programs (including source code, object code, on-line files, documentation, testing materials and
plans and reports), computer print-outs, member or customer lists, credit cards, keys, identification, products, access cards, designs, drawings, sketches, devices, specifications, formulae, data, tables or calculations or copies thereof, and all
other tangible or intangible property relating in any way to the business of Company that are the property of Company or any subsidiary or affiliate, if any, or which relate in any way to the business, products, practices or techniques of Company or
any subsidiary or affiliate. After returning any such documents, data, and other property Employee will permanently delete from any electronic media in Employee’s possession, custody, or control (such as computers, cell phones, hand-held
devices, back-up devices, zip drives, PDAs, etc.), or to which Employee has access (such as remote e-mail exchange servers, back-up servers, off-site storage, etc.), all documents or electronically stored images of the Company, including writings,
drawings, graphs, charts, sound recordings, images, and other data or data compilations stored in any medium from which such information can be obtained. 
 Furthermore, Employee agrees that, on or before the Separation Date, Employee will provide the Company with a list of any documents that Employee created as, or is otherwise aware to be, password
protected and the password(s) necessary to access such password-protected documents. 

  
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 ARTICLE IV: CONFIDENTIAL INFORMATION 
 4.1 Definition. For purposes of this Agreement, “Confidential Information” means any information that is not generally known to the public or to other persons who can obtain
economic value from its disclosure or use; information which derives independent economic benefit from not being known to such persons; and/or information about the activities or business of Company that is not generally known to others engaged in
similar business or activities, its products, services, finances, trade secrets, contracts, patents filed or pending, the techniques used in completing customer projects, research and development, data and information, processes, designs,
engineering, marketing plans or techniques, organization or operation. The foregoing list is intended to be illustrative rather than comprehensive. Additionally, the term “Confidential Information” shall mean any confidential information
as that term is defined in any other agreements Employee has entered with the Company, in any Company policies, as well as in any agreement the Company may have with its customers or other third parties from time to time. 

4.2 Nondisclosure. During the term of this Agreement or at any time thereafter, Employee agrees not to disclose Confidential information to
any other third party or company, other than in connection with Employee’s employment with Company, or use such information, directly or indirectly, for any purpose whatsoever, without the prior written consent of Company. 

4.3 Confidential Information of Others. 
 4.3.1 No Conflicts. Employee represents that Employee’s performance of all the terms of this Agreement does not and will not breach any agreement to keep in confidence proprietary
information acquired by me in confidence or in trust prior to the execution of this Agreement. Employee has not entered into, and shall not enter into, any agreement, either written or oral, in conflict with this Agreement. 

4.3.2 No Unauthorized Use of Others’ Secrets. Employee represents that Employee has not brought and will not bring
with Employee to the Company, or use in the performance of my responsibilities at the Company, any materials or documents of a present or former employer or client that are not generally available to the public, unless Employee has obtained the
express written authorization from the present or former employer or client for their possession and use and provided a copy of such authorization to the Company. 
 4.4 The terms of this Article 4 are in addition to, and not in lieu of, the covenants set forth in the Non-Disclosure Noncompetition Agreement dated October 26, 2014 as well as any statutory or
other contractual or legal obligation to which Employee may be subject relating to the protection of Confidential Information. 
 ARTICLE
V: INVENTIONS 
 5.1 Disclosure and Assignment of Inventions and Other Works. During the term of this Agreement and for one
year following the Separation Date, Employee shall promptly disclose to Company in writing all ideas, improvements and discoveries, whether or not such are patentable or copyrightable, and whether or not in writing or reduced to practice
(“Inventions”) and any writings, drawings, diagrams, charts, tables, databases, software (in object or source code and recorded on any medium), and any other works of authorship, whether or not such are

  
 14 

 
copyrightable (“Works of Authorship”) that are conceived, made, discovered, written or created by Employee alone or jointly with any person, group or entity, whether during the normal
hours of his employment at Company or on Employee’s own time. Employee hereby assigns all rights to all such Inventions and Works of Authorship to Company. Employee shall give Company all the assistance it reasonably requires for Company to
perfect, protect, and use its rights to such Inventions and Works of Authorship. Employee shall sign all such documents, take all such actions and supply all such information that Company considers necessary or desirable to transfer or record the
transfer of Company’s entire right, title and interest in such Inventions and Works of Authorship and to enable Company to obtain exclusive patent, copyright, or other legal protection for Inventions and Works of Authorship anywhere in the
world, provided Company shall bear all reasonable expenses of Employee in rendering such cooperation. 
 5.2 Notice and
Acknowledgement. In accordance with Minnesota Statute § 181.78, the foregoing Section 5.1 does not require Employee to assign or offer to assign to Company any of Employee’s rights in an Invention that Employee developed
entirely on Employee’s own time without using Company’s equipment, supplies, facilities or trade secret information, and (1) that does not relate directly to Company’s business or to Company’s actual or demonstrably
anticipated research or development, or (2) that does not result from any work performed by Employee for Company. For the purpose of this Section, “Company’s business” shall be defined as development pertaining to implantable
medical devices to treat obesity or devices to apply signals to a vagus nerve to treat a gastrointestinal disorder (e.g., obesity, pancreatitis or irritable bowel syndrome). 
 To the extent a provision in this Agreement purports to require Employee to assign Inventions otherwise excluded by this paragraph, the provision is against the public policy of the State of Minnesota and
is unenforceable. By signing this Agreement, Employee acknowledges receipt of the notification required by Minnesota Statute § 181.78. 
 5.3 Previous Works or Inventions. As a matter of record Employee has identified in Exhibit B attached hereto all Works of Authorship or Inventions that have been generated or
conceived or first reduced to practice, written, composed, created or learned by Employee, alone or jointly with others, prior to Employee’s employment by the Company, which Employee desires to remove from the operation of this Agreement.
Employee represents and warrants that such list is complete and accurate. If there is no such list Exhibit B, Employee represents that Employee has no such Inventions or Works of Authorship at the time of signing this Agreement. 

ARTICLE VI: NONCOMPETITION AND NONSOLICITATION 
 6.1 Agreement Not to Compete. During the Term of Employee’s employment by Company, and for a period of 1 (one) year from the Separation Date (whether termination of employment is
occasioned by Employee or Company), Employee shall not, directly or indirectly, in any place in the world, render services to any conflicting organization, or engage in competition with Company, in any manner or capacity, nor direct any other
individual or business enterprise to engage in competition with Company in any manner or capacity, (e.g., as an advisor, principal, agent, partner, officer, director, stockholder of more than 1% of the outstanding shares of the capital stock of a
publicly traded company, employee, member of any association or limited liability company or otherwise) on any products competitive with 

  
 15 

 
Company’s existing products, any products competitive with Company’s announced products or any products competitive with Company’s pending products that have not yet been announced
but which Employee has, or should have, actual or constructive knowledge. For the purposes of this Section, “conflicting organization” shall be defined as any person, corporation or entity that competes with any product, process or
service, in existence or under development, of Company pertaining to implantable medical devices to treat obesity or devices to apply signals to a vagus nerve to treat a gastrointestinal disorder (e.g., obesity, pancreatitis or irritable bowel
syndrome). 
 6.2 Agreement Not to Solicit. Employee hereby acknowledges that the Company’s customers constitute vital and
valuable aspects of its business on a worldwide basis. In recognition of that fact, for a period of one (1) year following the Separation Date (whether termination of employment is occasioned by Employee or Company), Employee shall not solicit,
or assist anyone else in the solicitation of, any of the Company’s then-current customers to terminate their respective relationships with the Company and to become customers of any enterprise with which Employee may then be associated,
affiliated or connected. 
 6.3 Agreement Not to Recruit. 
 Employee hereby acknowledges that the Company’s employees, consultants and other contractors constitute vital and valuable aspects of its business and missions on a worldwide basis. In recognition of
that fact, for a period of one (1) year following the Separation Date (whether termination of employment is occasioned by Employee or Company), Employee shall not solicit, or assist anyone else in the solicitation of, any of the Company’s
then-current employees, consultants and other contractors to terminate their respective relationships with the Company and to become employees, consultants and other contractors of any enterprise with which Employee may then be associated,
affiliated or connected. 
 6.4 Judicial Enforcement.  

6.4.1 Employee and the Company agree that, if the period of time or the scope of any of the provisions set forth in this Article 6 shall
be adjudged unreasonably overbroad in any court or other proceeding, then the period of time and/or scope shall be modified accordingly so that the covenants contained herein may be enforced to the fullest extent permissible by law. 

6.4.2 In the event of a breach or violation of any provision of this Article 6 by Employee, the parties agree that, in addition to any
other remedies it may have, the Company shall be entitled to equitable relief for specific performance, and Employee hereby agrees and acknowledges that the Company has no adequate remedy at law for the breach of the employment covenants contained
herein. 
 6.5 The terms of this Article 6 are in addition to, and not in lieu of, the covenants set forth in the Nondisclosure and
Noncompetition Agreement, as well as any statutory or other contractual or legal obligation to which Employee may be subject relating to non-competition and non-solicitation. 

  
 16 

 ARTICLE VII: MISCELLANEOUS PROVISIONS 
 7.1 Company Remedies. Employee acknowledges and agrees that the restrictions and agreements contained in this Agreement are reasonable and necessary to protect the legitimate interests of
Company, that the services to be rendered by Employee are of a special, unique and extraordinary character, that it would be difficult to replace such services and that any violation of Articles IV, V or VI of this Agreement would be highly
injurious to Company, that Employee’s violation of any of Articles IV, V or VI of this Agreement would cause Employer irreparable harm that would not be adequately compensated by monetary damages and that the remedy at law for any breach
of any of the provisions of Articles IV, V and VI will be inadequate. Accordingly, Employee specifically agrees that Company shall be entitled, in addition to any remedy at law, to preliminary and permanent injunctive relief and specific
performance for any actual or threatened violation of this Agreement and to enforce the provisions of Articles IV, V and VI of this Agreement. 
 7.2 Assignment. This Agreement shall not be assignable, in whole or in part, by Employee without the written consent of Company and any purported or attempted assignment or transfer of this
Agreement or any of Employee’s duties, responsibilities or obligations hereunder shall be void. This Agreement is binding upon Employee, Employee’s heirs and personal representatives. This Agreement shall inure to the benefit of and be
binding upon Company and its successors and assigns. Notwithstanding the foregoing, Company may, without the consent of Employee, assign its rights and obligations under this Agreement to any business entity that has become the successor to Company
in the event of a sale, merger, liquidation or similar transaction. After any such assignment by Company, Company shall be discharged from all further liability hereunder and such successor assignee shall thereafter be deemed to be Company for the
purposes of all provisions of this Agreement. 
 7.3 Notices. All notices, requests, demands and other communications under this
Agreement shall be in writing, shall be deemed to have been duly given on the date of service if personally served on the parties to whom notice is to be given, or on the third day after mailing if mailed to the parties to whom notice is given,
whether by first class, registered, or certified mail, and properly addressed as follows: 
  

											
		  	If to the Company, at:	  		  	 EnteroMedics Inc.

2800 Patton Road

St. Paul, MN 55113
	  		  	
						
		  	If to Employee, at:	  		  	 26321 607th Street
 Mantorville, MN 55955
	  		  	

 Any party may change the address for the purpose of this Section by giving the other written notice of the new address in
the manner set forth above. 
 7.1 Governing Law /Venue. The validity, interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Minnesota, without regard to conflicts of laws principles thereof. The parties agree that any disputes arising out of this Agreement shall be venued in Minnesota District Court, Hennepin
County, or United States 

  
 17 

 
District Court, District of Minnesota. The parties consent to the exclusive jurisdiction of the Minnesota District Court, Hennepin County, or the United States District Court for the
District of Minnesota, for this purpose. 
 7.2 Arbitration. The parties irrevocably consent that any litigation commenced or
arising in connection with the interpretation or enforcement of this Agreement that has not been settled through negotiation within a period of thirty (30) days after the date on which either party shall first have notified the other party in
writing of the existence of a dispute shall be settled by final and binding arbitration under the then-applicable Commercial Arbitration Rules of the American Arbitration Association (“AAA”). Any such arbitration shall be conducted by one
(1) neutral arbitrator appointed by mutual agreement of the parties or, failing such agreement, in accordance with the AAA Rules. The arbitrator shall be an experienced attorney with a background in employment law. Any arbitration shall be
conducted in Minneapolis, Minnesota. An arbitration award may be enforced in any court of competent jurisdiction. Notwithstanding any contrary provision in the AAA Rules, the following additional procedures and rules shall apply to any such
arbitration: 
  

	 	(A)	Each party shall have the right to request from the arbitrator, and the arbitrator shall order upon good cause shown, reasonable and limited pre-hearing discovery,
including (1) exchange of witness lists, (2) depositions under oath of named witnesses at a mutually convenient location, (3) written interrogatories, and (4) document requests; 

 

	 	(B)	Upon conclusion of the pre-hearing discovery, the arbitrator shall promptly hold a hearing upon the evidence to be adduced by the parties and shall promptly render a
written opinion and award; 

  

	 	(C)	The arbitrator may award damages or injunctive relief consistent with the terms of this Agreement but may not award or assess punitive damages against either party; and

  

	 	(D)	Each party shall bear his or its own costs and expenses of the arbitration and one-half (1/2) of the fees and costs of the arbitrator, subject to the power of the
arbitrator, in his or her sole discretion, to award all such reasonable costs, expenses and attorneys’ fees to the prevailing party. 

 7.3 Construction. Notwithstanding the general rules of construction, both Company and Employee acknowledge that both parties were given an equal opportunity to negotiate the terms and
conditions contained in this Agreement, and agree that the identity of the drafter of this Agreement is not relevant to any interpretation of the terms and conditions of this Agreement. 
 7.4 Severability. hi the event any provision of this Agreement (or portion thereof) shall be held illegal or invalid for any reason, said illegality or invalidity shall not in any way affect
the legality or validity of any other provision of this Agreement. To the extent any provision (or portion thereof) of this Agreement shall be determined to be invalid or unenforceable in any jurisdiction, such provision (or portion thereof) shall
be deemed to be deleted from this Agreement as to such jurisdiction only, and the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected. 

  
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 7.5 Entire Agreement. This Agreement, as well as the exhibits hereto and any agreements
referenced herein, is the final, complete and exclusive agreement of the parties and sets forth the entire agreement between Company and Employee with respect to Employee’s employment by Company, and there are no undertakings, covenants or
commitments other than as set forth herein. The Agreement may not be altered or amended, except by a writing executed by Employee and a member of the Board. Except as otherwise indicated, this Agreement supersedes, terminates, replaces and supplants
any and all prior understandings or agreements between the parties relating in any way to the hiring or employment of Employee by Company. 

7.6 Survival. The parties expressly acknowledge and agree that the provisions of this Agreement that by their express or implied terms
extend beyond the expiration of this Agreement or the termination of Employee’s employment under this Agreement, shall continue in full force and effect, notwithstanding Employee’s termination of employment under this Agreement or the
expiration of this Agreement. 
 7.7 Waivers. No failure on the part of either party to exercise, and no delay in exercising, any
right or remedy under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise of any right or remedy under this Agreement preclude any other or further exercise thereof or the exercise of any other right or remedy
granted hereby or by any related document or by law. 
 7.8 Attorneys’ Fees. Upon receipt by Company of a statement for legal
services from the attorneys representing Employee, Company shall reimburse Employee or pay on behalf of Employee the reasonable and necessary attorneys’ fees and associated expenses incurred by Employee in connection with the negotiation of
this Agreement. 
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written. 
  

									
	ENTEROMEDICS INC.	 		 	EMPLOYEE
					
	By:	 	/s/ Mark B. Knudson	 		 	By:	 	/s/ Bradford Hancock
		 	Mark B. Knudson	 		 		 	Bradford Hancock
		 	Its: President and CEO	 		 		 	

									
					
	Date:	 	February 2, 2015	 		 	Date:	 	January 9, 2015

  
 19 

 EXHIBIT A 

GENERAL RELEASE 
 This General Release is made and entered into as of the              day of
            , by Employee (“Employee”). 

WHEREAS, EnteroMedics Inc. (“Company”) and Employee are parties to an Employment Agreement dated
                    ; 
 WHEREAS, Employee intends to settle any and all claims that Employee has or may have against Company as a result of Employee’s employment with Company and the cessation of Employee’s
employment with Company; and 
 WHEREAS, Under the terms of the Employment Agreement, which Employee agrees are fair and
reasonable, Employee agreed to enter into this General Release as a condition precedent to the severance arrangements described in Article III of the Employment Agreement. 

NOW, THEREFORE, in consideration of the provisions and the mutual covenants herein contained, the parties agree as follows:

 1. Release. For the consideration expressed in the Employment Agreement, Employee does hereby fully and completely
release and waive any and all claims, complaints, causes of action, demands, suits and damages, of any kind or character, which Employee has or may have against the Released Parties, as hereinafter defined, arising out of any acts, omissions,
conduct, decisions, behavior or events occurring up through the date of Employee’s signature on this General Release, including Employee’s employment with Company and the cessation of that employment. For purposes of this General Release,
“Released Parties” means collectively Company, its predecessors, successors, assigns, parents, affiliates, subsidiaries, related companies, officers, directors, shareholders, agents, servants, employees and insurers, and each and all
thereof. 
 Employee understands and accepts that Employee’s release of claims includes any and all possible discrimination
claims, including, but not limited to, claims based upon: Title VII of the Federal Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act; the Americans with Disabilities Act; the Equal Pay Act; the Fair Labor Standards
Act; the Employee Retirement Income Security Act; the Minnesota Human Rights Act; Minn. Stat. §181.81; or any other federal, state or local statute, ordinance or law, except for any claims raised with the Equal Employment
Opportunity Commission (“EEOC”), or other local civil rights enforcement agency. Employee also understands that Employee is giving up all other claims, including those grounded in contract or tort theories, including, but not limited to:
wrongful discharge; violation of Minn. Stat. §176.82; breach of contract; tortious interference with contractual relations; promissory estoppel; breach of the implied covenant of good faith and fair dealing; breach of express or implied
promise; breach of manuals or other policies; assault; battery; fraud; false imprisonment; invasion of privacy; intentional or negligent misrepresentation; defamation, including libel, slander, discharge defamation and self-publication defamation;
discharge in violation of public policy; whistleblower; intentional or negligent infliction of emotional distress; or any other theory, whether legal or equitable. 

  
 20 

 Employee further understands that Employee is releasing, and does hereby release, any claims
for damages, by charge or otherwise, whether brought by Employee or on Employee’s behalf by any other party, governmental or otherwise, and agrees not to institute any claims for damages via administrative or legal proceedings against any of
the Released Parties. Employee also waives and releases any and all rights to money damages or other legal relief awarded by any governmental agency related to any charge or other claim against any of the Released Parties. 

This General Release does not apply to any post-termination claim that Employee may have for benefits under the provisions of any
employee benefit plan maintained by Company. 
 Employee’s release of claims shall not apply to any claims Employee might
have to indemnification under Minnesota Statute §302A.521, any other applicable statute or regulation or Company’s by-laws. 
 2. Right to Revoke or Rescind. Employee is hereby informed of Employee’s right to revoke the release of claims, insofar as it extends to potential claims under the Age Discrimination in
Employment Act, by informing the Company of Employee’s intent to do so within 7 calendar days following the signing of this Agreement. Employee is also informed of Employee’s right to rescind Employee’s release of claims, insofar as
it extends to potential claims under the Minnesota Human Rights Act, by delivering a written rescission to the Company within 15 calendar days after the signing of this Agreement. Employee understands that any such revocation or rescission must be
made in writing and delivered by hand or by certified mail, return receipt requested, postmarked on or before the last day within the applicable revocation period to: EnteroMedics, 2800 Patton Road, St. Paul, MN 55113. 

If Employee exercises the right to revoke or rescind any portion of the release of claims, the Company may, at its option, either nullify
this Agreement in its entirety, or keep it in effect in all respects other than as to that portion of the release of claims that Employee has revoked or rescinded. Employee agrees and understands that if the Company chooses to nullify the Agreement
in its entirety, the Company will have no obligations under this Agreement. 
 3. Acceptance Period; Advice of Counsel.
The terms of this General Release will be open for acceptance by Employee for a period of 21 days during which time Employee may consider whether or not to accept this General Release. Employee agrees that changes to this General Release,
whether material or immaterial, will not restart this acceptance period. Employee is hereby advised to seek the advice of an attorney regarding this General Release. 
 4. Binding Agreement. This General Release shall be binding upon, and inure to the benefit of, Employee and Company and their respective successors and permitted assigns. 

5. Representation. Employee hereby acknowledges and states that Employee has read this General Release. Employee further
represents that this General Release is written in language that is understandable to Employee, that Employee fully appreciates the meaning of its terms, and that Employee enters into this General Release freely and voluntarily. 

IN WITNESS WHEREOF, Employee, after due consideration, has authorized, executed and delivered this General Release all as of the
date first written. 
  

	
	
	  
	Employee

  
 21 

 EXHIBIT B 

LIST OF ALL WORKS OF AUTHORSHIP AND INVENTIONS 
 TO ENTEROMEDICS, INC.: 
 The following is a complete list of all works of
authorship or inventions that may be relevant to the subject matter of my service as an employee of EnteroMedics, Inc. (the “Company”) and that have been written, composed, created, generated, conceived or first reduced to practice or
learned by me, alone or jointly with others, prior to my employment by the Company: 

 ̈ There are no such works of authorship or inventions. 

 ̈ See below: 
  ̈ Additional Sheets are Attached. 
  

	
	
	  
	(Employee’s signature)
	
	  
	(Employee’s name — please print)
	
	Date:
                                         
               

  
 22

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