Document:

Exhibit

MASIMO CORPORATION 
2007 STOCK INCENTIVE PLAN 
RESTRICTED SHARE UNIT AWARD AGREEMENT
You (the “Participant”) are hereby awarded restricted share units (the “RSUs”) subject to the terms and conditions set forth in the employment agreement made and entered into as of November 4, 2015, by and between the Company and you (as it may be amended from time to time, the “Employment Agreement”), this Restricted Share Unit Award Agreement (this “Award Agreement”), and the Masimo Corporation 2007 Stock Incentive Plan (the “Plan”).
Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Plan.  In the event of any inconsistency between the terms of the Employment Agreement, this Award Agreement and the Plan, the terms of the Employment Agreement shall govern, and in no event shall the RSUs be subject to forfeiture or cancellation except as set forth in the Employment Agreement.
1.    Specific Terms. The RSUs shall have the following terms:
	
		
	Name of Participant
	Joe Kiani

	Number of RSUs
	2,700,000

	Award Date
	November 4, 2015

	Vesting
	As provided in the Employment Agreement.

	Settlement
	As provided in the Employment Agreement.

2.    Dividends. When Shares are delivered to you pursuant to the vesting of the RSUs as provided in the Employment Agreement, you shall also be entitled to receive with respect to each Share issued (i) an amount equal to any cash dividends (plus simple interest at a rate of 5% per annum), provided that, at your election, you shall be credited in lieu of the foregoing with an additional number of restricted share units (subject to same terms and conditions as the RSUs) on the applicable dividend record date determined by dividing the total amount of any cash dividends which were declared and paid to the holders of Shares on such dividend record date by the closing price of a Share on such dividend record date and (ii) a number of Shares equal to any stock dividends, in each case which were declared and paid to the holders of Shares between the Grant Date and the date such Share is issued.  For purposes of this Award Agreement and the Employment Agreement, the term “RSUs” shall include any additional restricted share units which are credited to you in accordance with the preceding sentence.
3.    Changes in Capitalization. The Committee shall equitably adjust the number of Shares underlying the RSUs to reflect any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, spin-off, spin-out, merger, consolidation, combination, recapitalization or reclassification of the Shares, or any other changes in corporate structure.

4.    Restrictions on Transfer. Except as set forth in the Plan, the RSUs may not be sold, pledged, or otherwise transferred without the prior written consent of the Committee. Notwithstanding the foregoing or anything set forth in the Plan, you may transfer the RSUs (i) by instrument to an inter vivos or testamentary trust (or other entity) in which each beneficiary is a permissible gift recipient, as such is set forth in clause (ii) of this Section, or (ii) by gift to charitable institutions or foundations or by gift or transfer for no consideration to any of your relatives as follows (or to an inter vivos trust, testamentary trust or other entity primarily for the benefit of any of your relatives as follows): any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, domestic partner, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships.  Any transferee of your rights shall succeed to and be subject to all of the terms of the Employment Agreement, this Award Agreement and the Plan.
5.    Withholding Taxes and Deferred Compensation. The RSUs shall, in all respects, be subject to any applicable required tax withholding.  Any amount payable to you under this Award Agreement on account of your termination of employment which constitutes “nonqualified deferred compensation” within the meaning of Section 409A of the Code shall be made in accordance with Section 8.6 of the Employment Agreement. 
6.    Notices. Any notice or communication required or permitted by any provision of this Award Agreement to be given to you shall be in writing and shall be delivered personally or sent by certified mail, return receipt requested, addressed to you at the last address that the Company had for you on its records.  Each party may, from time to time, by notice to the other party hereto, specify a new address for delivery of notices relating to this Award Agreement.  Any such notice shall be deemed to be given as of the date such notice is personally delivered or properly mailed.
7.    Binding Effect. Except as otherwise provided in this Award Agreement or in the Plan, every covenant, term, and provision of this Award Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees, and assigns.
8.    Modifications. This Award Agreement may only be modified or amended with your written agreement.
9.    Headings. Section and other headings contained in this Award Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or intent of this Award Agreement or any provision hereof.
10.    Counterparts. This Award Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

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11.    Governing Law. The laws of the State of Delaware (without regard to conflicts of laws principles) shall govern the validity of this Award Agreement, the construction of its terms, and the interpretation of the rights and duties of the parties hereto; provided that, to the extent any provision of this Award Agreement requires interpretation of any provision of the Employment Agreement, such provisions 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).
BY YOUR SIGNATURE BELOW, along with the signature of the Company’s representative, you and the Company agree that the RSUs are hereby awarded under and governed by the terms and conditions of the Employment Agreement, this Award Agreement and the Plan.

	
			
	 
	 
	MASIMO CORPORATION

	 
	 
	 

	 
	By:
	/s/ Mark P. de Raad

	 
	Name:
	Mark P. de Raad

	 
	Its:
	Executive Vice President and Chief Financial Officer

	
			
	 
	 
	PARTICIPANT

	 
	 
	 

	 
	By:
	/s/ Joe Kiani

	 
	Name:
	Joe Kiani

[Signature Page to Restricted Unit Award Agreement]

3Exhibit

MASIMO CORPORATION
EQUITY-HOLDER NON-COMPETITION AND CONFIDENTIALITY AGREEMENT
This Equity-Holder Non-Competition and Confidentiality Agreement (this “Agreement”), dated November 4, 2015, is made by and between the undersigned equity-holder (“Holder”), on the one hand, and Masimo Corporation, a Delaware corporation (“Masimo”), on the other hand.
RECITALS
A.    Holder acknowledges that Holder is a substantial holder of an equity interest in Masimo, is the founder of Masimo and has been its Chairman of the Board and Chief Executive Officer since its inception, and that Holder will receive substantial consideration as a result of any transaction in which Holder sells his entire equity interest in Masimo, together with the goodwill of Masimo (an “Equity Sale”).  Therefore, Holder is willing to enter into this Agreement as an inducement for any acquirer to enter into agreements to effectuate an Equity Sale and to protect such acquirer’s legitimate interests as a buyer of the stock, goodwill and assets (including confidential, proprietary and/or trade secret information) of Masimo. 
B.    Masimo and Holder acknowledge and agree that Masimo has conducted and engaged in the “Business” (as defined below) and that Masimo has undertaken to continue to conduct and engage in the Business and to seek to make its products and services available to customers throughout each of the fifty (50) states of the United States and throughout the world (the “Restricted Territory”).
NOW, THEREFORE, in exchange for good and valuable consideration, receipt of which is hereby acknowledged, Holder, intending to be legally bound, hereby agrees as follows:
1.    During (i) Holder’s employment with Masimo (other than in accordance with Holder’s position at and duties to Masimo and position at and duties to Cercacor Laboratories, Inc. (“Cercacor”) a Delaware corporation (f/k/a Masimo Laboratories, Inc.) or as otherwise set forth in the Employment Agreement (as defined below)) and (ii) subject to the payment of the “Non-Competition Payment” (as defined in the Employment Agreement) to Holder pursuant to the terms of the Employment Agreement, the “Restricted Period” (as defined below) in the Restricted Territory, Holder agrees that Holder will not, as an employee, agent, consultant, advisor, independent contractor, general partner, officer, director, investor, lender, guarantor of any person, or in any other capacity, for Holder or on behalf of any other person, directly or indirectly participate or engage in the Business or acquire or hold any interest in any person engaged in the Business.  Notwithstanding the foregoing, Holder may (i) participate and engage in the Business as an investor, employee, consultant, officer and/or director of, and provide services to, Cercacor or Masimo, (ii) serve on the board of directors of any company or entity that is not engaged in the Business, (iii) own, directly or indirectly, solely as an investment, (A) up to one percent (1%) of any class of “publicly traded securities” of any person or entity that engages in the Business or (B) up to five percent (5%) of the securities that are not “publicly traded securities” of any person or entity that engages in the Business, provided in each case that Holder does not also actively manage or serve as an advisor to such person or entity, and 

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provided further that the ownership restrictions in this clause (iii) shall not apply to Holder’s director or indirect ownership of securities of Masimo or Cercacor and (iv) work for a division, entity or subgroup of any person or entity that engages in the Business so long as such division, entity or subgroup does not also engage in the Business.  For purposes of this Agreement, (a) “publicly traded securities” shall mean securities that are traded on a national securities exchange, (b) “Business” means the design, research, development, use, marketing, sale or distribution of any products or services in the field of non-invasive blood constituent monitoring, and (c) the “Restricted Period” means the period commencing on the date of Holder’s Qualifying Termination (as defined in the Amended and Restated Employment Agreement dated as of the date hereof by and between Masimo and Holder (the “Employment Agreement”) following an Equity Sale and ending on the fifth (5th) anniversary of the date of such Qualifying Termination.
2.    Masimo has and will develop, compile and own certain proprietary and confidential information that has great value in its business (“Confidential Information”).  Confidential Information includes information and physical material not generally known or available outside Masimo and information and physical material entrusted to Masimo in confidence by third parties.  Confidential Information includes, without limitation: (i) company “Inventions” (as defined below); and (ii) technical data, trade secrets, know-how, research, product or service ideas or plans, software codes and designs, developments, laboratory notebooks, processes, formulas, techniques, mask works, engineering designs and drawings, hardware configuration information, lists of, or information relating to, employees and consultants of Masimo (including, but not limited to, the names, contact information, jobs, compensation, and expertise of such employees and consultants), lists of, or information relating to, suppliers and customers (including, but not limited to, customers of Masimo on whom Holder called or with whom Holder became acquainted during employment with Masimo), price lists, pricing methodologies, cost data, market share data, marketing plans, licenses, contract information, business plans, financial forecasts, historical financial data, budgets or other business information disclosed to Holder by Masimo either directly or indirectly, whether in writing, electronically, orally, or by observation. Holder acknowledges that such information is secret, valuable and owned by Masimo.
3.    During and after Holder’s employment by Masimo, Holder agrees to keep confidential, and not disclose or make use of any Confidential Information except with Cercacor or as otherwise authorized by Masimo or as necessary for the performance of Holder’s duties as a Masimo employee or director.
4.    During Holder’s employment with Masimo, Holder will not disclose to Masimo or make use of any confidential, proprietary or trade secret information or material belonging to a former employer or other third party.
5.    Prior to Holder’s employment with Masimo, Holder did not create any inventions, works of authorship, or trade secrets that relate to the Business as conducted and engaged in by Masimo, except for those identified on the list attached to this Agreement as Exhibit A hereto.
6.    Holder agrees to promptly disclose to Masimo or Cercacor, as appropriate, all discoveries, developments, designs, ideas, improvements, inventions, formulas, processes, techniques, know-

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how, and data works of authorship, (whether or not patentable or registrable under copyright or similar statutes) made, conceived, reduced to practice, or learned by Holder (either alone or jointly with others) during Holder’s employment with Masimo, that are related to or useful in the Business as conducted and engaged in by Masimo, or which result from tasks assigned to Holder by Masimo, or from the use of premises owned, leased, or otherwise acquired by Masimo.  For the purposes of this Agreement, all of the foregoing are referred to as “Inventions”.
7.    Holder acknowledges and agrees that all Inventions that relate to the Business as conducted and engaged in by Masimo, other than those listed in Exhibit A hereto, and other than those that holder is obligated to assign to Cercacor, belong to and shall be the sole property of Masimo and shall be Inventions of Masimo subject to the provisions of this Agreement.  Holder hereby assigns to Masimo all rights that Holder may have to such Inventions, except for inventions which Holder is allowed to retain under California Labor Code section 2870, a copy of which is attached to this Agreement as Exhibit B hereto.
8.    Holder agrees that all works of authorship to which Holder contributes and that relate to the Business as conducted and engaged in by Masimo during and as a part of Holder’s employment shall be considered “works made for hire” and shall be the sole property of Masimo or Cercacor, as appropriate.
9.    Holder will cooperate with Masimo and do whatever is necessary or appropriate to obtain patents, copyrights, or other legal protection on projects to which Holder contributes and are subject to an obligation of assignment to Masimo, and, if Holder is incapacitated for any reason from doing so, Holder hereby authorizes Masimo to act as Holder’s agent and to take whatever reasonable action is needed on Holder’s part to carry out this Agreement.  After Holder’s employment, Masimo will pay Holder for his time for such assistance at an hourly rate equal to Holder’s highest full time compensation at Masimo calculated on an hourly basis.
10.    Upon termination of Holder’s employment for any reason, Holder will promptly assemble all property of Masimo in Holder’s possession or under Holder’s control and return it to Masimo.
11.    Except where prohibited by law, Holder agrees that during (i) Holder’s employment and (ii) subject to the payment of the Non-Competition Payment to Holder pursuant to the terms of the Employment Agreement, the Restricted Period, Holder will not, without express written authorization from Masimo, (a) solicit or induce any employee or consultant of Masimo to quit their employment or cease doing business with Masimo, or (b) other than on behalf of any charitable or non-profit enterprise, solicit Masimo’s customers or suppliers, provided that each of the restrictions in this paragraph shall not apply in respect of Cercacor.
12.    Holder hereby acknowledges and agrees that (a) this Agreement is necessary for the protection of the legitimate business interests of Masimo and any acquirer in acquiring and realizing the value of the stock, goodwill and assets of Masimo in connection with an Equity Sale, (b) the scope of the covenants set forth in this Agreement in time, geography and types and limitations of activities restricted is reasonable and necessary to protect Masimo’s and any acquirer’s legitimate interest in the goodwill, trade secrets, properties and assets and Confidential Information of Masimo, and (c) Holder has had adequate opportunity to consult with counsel 

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prior to entering into this Agreement.  Notwithstanding anything set forth in this Agreement to the contrary, none of the restrictions in this Agreement shall prohibit Holder from participating and engaging in the Business as an investor, employee, consultant, officer and/or director of, and providing services to, Cercacor.    
13.    Holder agrees that a violation of this Agreement may cause irreparable harm to Masimo’s reputation, customer relationships, and other aspects of its business for which an award of money damages would be inadequate. Holder therefore agrees that Masimo shall be entitled to injunctive relief as appropriate to prevent Holder from violating this Agreement, in addition to any claims for money damages not to exceed repayment of the Non-Competition Payment pursuant to the terms of the Employment Agreement. 
14.    For purposes of enforcing this Agreement, Holder hereby consents to jurisdiction in the Superior Court of California for the County of Orange, as well as any other jurisdiction allowed by law.
15.    This Agreement shall be governed by the law of the state in which Holder resides, or Delaware if Holder resides outside the United States.
16.    Holder understands that Holder’s obligations under this Agreement remain in effect even after Holder’s employment with Masimo terminates.
17.    This Agreement does not guarantee Holder any term of employment or limit Holder’s or Masimo’s right to terminate Holder’s employment at any time, with or without cause and with or without notice.
18.    If a court finds any provision of this Agreement invalid or unenforceable as applied to any circumstance, the remainder of this Agreement and the application of such provision to other persons or circumstances shall be interpreted so as best to effect the intent of the parties hereto.
19.    This Agreement is binding on Holder’s successors and assigns, and will benefit the successors and assigns of Masimo.
20.    Except for the applicable provisions of the Employment Agreement, this Agreement represents Holder’s entire agreement with Masimo with respect to the subject matter herein, superseding any previous oral or written understandings or agreements with Masimo or any of its officers, including, without limitation, the Masimo Employee Confidentiality Agreement dated as of March 3, 2010, between Masimo and Holder.  This Agreement may be amended or modified only in writing signed by all the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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	MASIMO
	HOLDER

	 
	 

	 
	 

	By:
	/s/ Mark P. de Raad
	Signature: 
	/s/ Joe Kiani

	 
	 

	Name:
	Mark P. de Raad
	Name:
	Joe Kiani

	 
	 

	Title:
	Executive Vice President and 
Chief Financial Officer
	Date:
	November 4, 2015

	 
	 

[Signature Page to Equity-Holder Non-Competition and Confidentiality Agreement]

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EXHIBIT A
LIST OF PRIOR INVENTIONS
AND ORIGINAL WORKS OF AUTHORSHIP*
	
			
	Title
	Date
	Identifying Number 
or Brief Description

	NONE
	NONE
	NONE

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

Name of Holder:    Joe Kiani
* If there are none, so state.

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EXHIBIT B
CALIFORNIA LABOR CODE SECTION 2870
EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS
“(a) Any provision in an employment agreement which provides that an employee shall assign or offer to assign any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:
(1)    Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer.
(2)    Result from any work performed by the employee for the employer.
(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.”

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