Document:

Exhibit 10.26

Executive Performance Incentive Plan

Effective January 1, 2007

Performance Period: January 1 – December 31, 2007

 

I.                                         Purpose
of the Plan

ev3 Inc.’s
compensation philosophy is to pay for performance.  The purpose of the ev3 Inc. Executive Performance Incentive Plan (the “Plan”) is
to align the interests of ev3 Inc.
and its subsidiaries (the “Company”), executive-level employees, and
stockholders by providing annual incentives for the achievement of key business
and individual performance measures that are critical to the success of the
Company and linking a significant portion of each executive employee’s annual
compensation to the achievement of such measures.

II.                                     Eligible
Participants

The Company will determine eligibility criteria for
the Plan on an annual basis and in its sole discretion.  For 2007, the Plan covers the following:  (i) all regular, salaried, exempt United
States employees in Levels 6 and above, and (ii) international and expatriate/inpatriate
employees in Levels 6 and above who are determined by the Company to be
eligible for participation (“Executives” or “Participants”).  Notwithstanding the foregoing, Participants
in positions covered by sales compensation plans are not eligible Participants
in the Plan.

The Plan year runs from January 1 - December 31 of
each year (the “Plan Year”).  Payouts
will be made on a quarterly basis (the “Plan Quarter”).  Participants with less than a full Plan
Quarter of service or whose incentive target percent has changed during a Plan
Quarter may be eligible to participate in the plan on a prorated basis,
determined by the percentage of time they were eligible to participate during
that Plan Quarter under applicable criteria. 
Participants with less than one full month of eligible service in a Plan
Quarter will not be eligible to receive an award under the Plan for that Plan
Quarter.

III.                                 Administration
of the Plan

The Compensation Committee of the Board of Directors
of the Company will administer the Plan. 
The Compensation Committee, in its sole discretion, may delegate to the
Company’s Chief Executive Officer activities relating to Plan administration
that are not required to be exercised by the Compensation Committee under
applicable laws, rules, regulations and the Compensation Committee Charter.  Non-delegable activities include, but are not
limited to, final approval of any payouts under the Plan to Executive Officer
level employees.  Delegable activities
include, but are not limited to, final approval of recommendations regarding payouts
under the Plan to Executive Officer level employees and to Participants that
are not Executive Officer level employees. 
All decisions of the Compensation Committee and Chief Executive Officer
will be final and binding upon all parties, including the Company and Plan
Participants.

IV.                                Incentive
Targets

Incentive targets have been approved by the
Compensation Committee, in the case of Participants that are Executive Officer
level employees, and by the Chief Executive Officer, for all other eligible
Plan Participants, in each case based upon their level of responsibility within
the Company and impact on the business. 
These incentive targets represent the incentive (as a percent of a Plan
Participant’s base salary) that a Participant is eligible to receive under the
Plan.  It is the Company’s intention to
provide significant incentive and reward opportunities to its Executives for
world-class performance achievement.

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V.                                    Individual
Performance Measures

Individual performance measures for a Plan Year are
established during the annual goal setting process.  Additionally, performance measures are
established for each of the four quarters of the Plan Year.  For each Plan Quarter, all Participants will
be assigned the Company’s quarterly goals as their individual objectives for
the Plan Quarter.  Individual objectives
for Executive Officer level employees other than the Company’s quarterly goals
must be agreed to and approved by the Compensation Committee.  Individual objectives for all other
Participants other than the Company’s quarterly goals must be agreed to and
approved by the Chief Executive Officer.

VI.                                Company
Performance Measures

For each Plan Quarter, the Compensation Committee,
together with input from the Company’s Chief Executive Officer, will identify
critical Company performance measures and determine the incentive pool funding
for the Plan based on achievement of such Company performance measures.  The 2007 Company performance measures are:

·                  Worldwide Revenue

·                  Worldwide Operating Expense
(Controllable) as a % of Revenue

·                  Worldwide Gross Margin

·                  Working
Capital

·                  Earnings Before
Interest, Taxes, Depreciation and Amortization, adjusted for Non-Cash, Stock-Based
Compensation (“EBITDA”)

The Compensation Committee, with input from the
Company’s Chief Executive Officer, will take into consideration the relative
performance by each division of the Company with regard to Divisional Revenue,
Operating Expenses, Gross Margin, and Working Capital.

VII.                            Incentive
Pool Funding

The incentive pool funding is the amount of money that
is available for distribution to Plan Participants under the Plan based on
achievement of the Company performance measures.  Appendix A describes in more detail
how the five Company performance measures will impact the incentive pool funding.
The incentive pool is funded quarterly on the following basis:  20% of the annual pool in Q1, 20% of the
annual pool in Q2, 20% of the annual pool in Q3 and 40% of the annual pool in
Q4.

VIII.                        Individual
Incentive Payment Criteria, Calculation, and Payout

A Plan Participant must be actively employed by the
Company on the last day of the month of the Plan Quarter to be eligible for an
incentive payment under the Plan for that Plan Quarter.

The incentive payment under the Plan for any eligible
Plan Participant for a particular Plan Quarter will vary depending upon the
approved incentive pool funding level for that Plan Quarter, the Participant’s
base salary as of the first day of the last month of the Plan Quarter, the
Participant’s incentive target for that Plan Quarter, and the Participant’s
overall individual performance during that Plan Quarter, relative performance
to other Executives and achievement of objectives relative to other eligible
Executives.  The total of incentive
payments to all eligible Plan Participants may not exceed the funding pool(s)
established by the Compensation Committee for each Plan Quarter.

As soon as practicable after the appropriate financial
and other data has been compiled after the end of each Plan Quarter, individual
incentive payments under the Plan will be determined as follows:  With respect to Participants that are Executive
Officer level employees, the Chief Executive Officer will recommend to the
Compensation Committee the amount of each incentive payment to be made

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to each such Plan Participant under the Plan and the
Compensation Committee will then approve the final amount of each incentive
payment to be made to each such Plan Participant, taking into account the
recommendation of the Chief Executive Officer and such other factors as the
Compensation Committee determines appropriate. 
With respect to all other Participants that are not Executive Officer
level employees, the Chief Executive Officer will approve the final amount of
each incentive payment to be made to each such Plan Participant.  All final individual incentive payouts under
the Plan to Participants that are Executive Officer level employees will be
certified in writing by the Compensation Committee and all final individual
incentive payouts under the Plan to other Participants that are not Executive
Officer level employees will be certified in writing by the Chief Executive
Officer.  Individual incentive payments
under the Plan will be made in a lump sum, less applicable withholding taxes,
as soon as reasonably practicable after the determination of such payments.

In approving final individual incentive payments under
the Plan, the Compensation Committee, in the case of payments to Executive
Officer level employees, and the Chief Executive Officer, in the case of all
other payments under the Plan, reserves the right to recognize individual
performance and to provide appropriate differential incentive compensation.

IX.                                Plan
Discretion

All benefits payable under the
Plan are discretionary and no Plan Participant shall have any right to payment
under the Plan until actually paid.

To the extent necessary with respect to any Plan
Quarter, in order to avoid any undue windfall or hardship due to external
causes, the Compensation Committee may, without the consent of any affected
Plan Participants, revise one or more of the Company performance measures or
otherwise make adjustments to payouts under the Plan to take into account any
acquisition or disposition by the Company not planned for at the time the
Company performance measures were established, any change in accounting
principles or standards, or any extraordinary or non-recurring event or item,
so as equitably to reflect such event or events, such that the criteria for
evaluat­ing whether a Company performance measure has been achieved will be
substantially the same (as determined by the Compensation Committee) following
such event as prior to such event.

X.                                    Termination,
Suspension, or Modification

The Company may terminate, suspend, modify and if
suspended, may reinstate or modify, all or part of the Plan at any time, with
or without notice to the Plan Participants. 
Exceptions to the eligibility of, or the extent to which the Plan
applies to, any particular Plan Participant must be approved, on a case-by-case
basis, by the Compensation Committee.

XI.                                Limitation
of Liability

No member of the Company’s Board
of Directors, the Compensation Committee, any officer, employee, or agent of
the Company, or any other person participating in any determination of any question
under the Plan, or in the interpretation, administration, or application of the
Plan, shall have any liability to any party for any action taken, or not taken,
in good faith under the Plan.

XII.                            No
Right to Employment

This document sets forth the terms of the Plan and it
is not intended to be a contract or employment agreement between any Plan
Participant and the Company.  Nothing contained in the Plan (or in any other
documents related to the Plan) shall confer upon any employee or Plan
Participant any right to continue in the employ or other service of the Company
or constitute any contract or limit in any way

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the right of the Company to
change such person’s compensation or other benefits or to terminate the
employment or other service of such person with or without cause or notice.

XIII.                        Non-Assignability

Except for the designation of a
beneficiary(ies) to receive payments of benefits for a particular Plan Quarter
following a Plan Participant’s death after the completion of such Plan Quarter,
no amount payable at any time under the Plan shall be subject to sale,
transfer, assignment, pledge, attachment, or other encumbrance of any
kind.  Any attempt to sell, transfer,
assign, pledge, attach, or otherwise encumber any such benefits, whether
currently or thereafter payable, shall be void.

XIV.                       Withholding
Taxes

The Company is entitled to withhold and deduct from
any payments made pursuant to the Plan or from future wages of a Plan
Participant (or from other amounts that may be due and owing to the Plan Participant
from the Company), or make other arrangements for the collection of, all
legally required amounts necessary to satisfy any and all federal, state, and
local withholding and employment-related tax requirements attributable to any
payment made pursuant to the Plan.

XV.                           Unfunded
Status of Plan

The Plan shall be unfunded.  No provisions of the Plan shall require the
Company, for the purpose of satisfying any obligations under the Plan, to
purchase assets or place any assets in a trust or other entity to which
contributions are made or otherwise to segregate any assets.  Plan Participants shall have no rights under
the Plan other than as unsecured general creditors of the Company.

XVI.                       Other

Except to the extent in connection with other matters
of corporate governance and authority (all of which shall be governed by the
laws of the Company’s jurisdiction of incorporation), the validity,
construction, interpretation, administration and effect of the Plan and any
rules, regulations, and actions relating to the Plan will be governed by and
construed exclusively in accordance with the internal, substantive laws of the
State of Minnesota, without regard to the conflict of law rules of the State of
Minnesota or any other jurisdiction.

 5Exhibit
10.27

AMENDMENT TO AGREEMENT

This Amendment to
Agreement (this “Amendment”) effective as of December 31, 2006 is by and among
ev3 Inc., a Delaware corporation (“ev3 Inc.”), ev3 Endovascular, Inc., a
Delaware corporation previously known as ev3 Inc. (“ev3 Endovascular”) (ev3
Inc. and ev3 Endovascular are collectively referred to herein as “ev3”), and L.
Cecily Hines (“Employee”).

WHEREAS, ev3 Endovascular
and Employee have previously entered into that certain Employee
Confidentiality/Non-Compete/Non-Solicitation Agreement dated as of March 8,
2002 (the “Original Agreement”);

WHEREAS, Employee has
voluntarily resigned as Vice President, Secretary and Chief Legal Officer of
ev3 Inc. effective December 31, 2006 to have more time to pursue other interests;

WHEREAS, ev3 recognizes
Employee’s valuable contributions to the historical success of ev3; and

WHEREAS, because of
Employee’s significant experience and expertise with ev3 and its business,
Employee and ev3 wish for Employee to remain as a part-time employee of ev3
Endovascular to assist ev3 with certain areas of its business.

NOW, THEREFORE, in
consideration of the covenants and promises contained herein, of Employee’s
continued at-will employment by ev3 Endovascular, and of the compensation and
benefits received by Employee from ev3, the parties hereby agree to the amended
terms of employment as contained herein.

1.                                       Resignation
from Officer Position.  Employee
hereby resigns, effective December 31, 2006, as Vice President, Secretary and
Chief Legal Officer.

2.                                       Part-Time
Employment.  Employee shall continue
to work as an employee of ev3 Endovascular on a part-time basis and shall
devote approximately 80 hours per month to ev3. Employee’s new position will
commence as of January 1, 2007, reporting to ev3’s Chief Legal Officer.
Employee will no longer be a member of ev3’s Operating Committee, nor an
executive officer of ev3 or a reporting person under Section 16 of the
Securities Exchange Act of 1934, as amended, with respect to ev3’s common
stock.

3.                                       Duties.  Employee shall work on projects as agreed
upon with ev3’s  Chief Legal
Officer regarding various legal issues facing ev3. Initially, it is
contemplated that Employee will focus on projects involving ev3’s international
business, patent litigation and patent prosecution matters.

4.                                       Compensation.  Employee shall receive a monthly salary of
$15,000 per month, payable in equal bi-weekly installments, and in arrears, in
accordance with the standard payroll 

practices of ev3.
Employee will not be a participant in any of ev3’s performance incentive plans
or any other annual bonus plans for fiscal 2007 or thereafter. Employee shall
remain eligible for a fourth quarter 2006 bonus under the ev3 Inc. Executive
Performance Incentive Plan with respect to ev3’s and Employee’s performance
during fourth quarter 2006.

5.                                       Benefits.  Employee shall be eligible for participation
in all benefit programs of ev3 that are available to part-time employees. ev3
will either provide a monthly amount or reimburse Employee for medical, dental
and disability coverage for Employee and her spouse, in accord with all
applicable laws and regulations.

6.                                       Change
in Control Agreement.  The change in
control letter agreement dated as of September 18, 2006 among ev3 Inc., ev3
Endovascular and Employee (the “Change in Control Agreement”) shall remain in
fill force and effect.

7.                                       Acceleration
of Stock Options and Release of Restrictions on Stock Grants.  As of June 30, 2008, provided that Employee
remains an employee of ev3 as of such date, all outstanding stock options to
purchase shares of ev3 common stock then held by Employee as of such date will
automatically vest and become immediately exercisable and all outstanding
restricted stock grants relating to ev3’s common stock held by Employee as of
such date will become free of restrictions and non-forfeitable.

8.                                       
Additional Stock Option, Stock Grant and Other Equity-Based Grants.
Employee shall be eligible to receive additional stock option, stock grant and
other equity-based grants by ev3 Inc., but such grants shall be at the sole
discretion of ev3’s Chief Executive Officer, and ultimately, the Board of
Directors of ev3 Inc. or a committee of such Board.

9.                                       Termination.  Employee’s employment with ev3 remains “at
will”. Notwithstanding the foregoing, however, in the event ev3 decides to
terminate Employee’s employment for any reason other than for Cause (as
hereinafter defined) prior to June 30, 2008, ev3 shall provide Employee up to
eight (8) months prior written notice. The required notice period shall depend
upon when ev3 decides to terminate Employee’s employment and shall be as
follows:

	
  Date ev3 Decides to Terminate 

  Employee’s Employment

  	
   

  	
  Required Notice 

  Period

  	
   

  
	
  On or before November 30, 2007

  	
   

  	
  Eight
  (8) months

  	
   

  
	
  On or after December 1, 2007 and on or before
  December 31, 2007

  	
   

  	
  Seven
  (7) months

  	
   

  
	
  On or after January 1, 2008 and on or before January
  31, 2008

  	
   

  	
  Six
  (6) months

  	
   

  
	
  On or after February 1, 2008 and on or before
  February 29, 2008

  	
   

  	
  Five
  (5) months

  	
   

  
	
  On or after March
  1, 2008 and on or before March 31, 2008

  	
   

  	
  Four
  (4) months

  	
   

  
	
  On or after
  April 1, 2008 and on or before April 30, 2008

  	
   

  	
  Three
  (3) months

  	
   

  

 

	
  On or after May 1, 2008 and
  prior to May 31, 2008

  	
   

  	
  Two
  (2) months

  	
   

  
	
  On or after June 1, 2008
  and prior to June 30, 2008

  	
   

  	
  One (1) month

  	
   

  

 

During such required
notice period, Employee shall continue to perform the duties as agreed upon
with ev3’s Chief Legal Officer. During such required notice period so long as
Employee remains an employee of ev3, her stock options and restricted stock
grants will continue to vest, or restrictions eliminated as the case may be, in
accordance with the terms of such grants.

For purposes of this
Section 9, “Cause” shall mean: (A) Employee has engaged in conduct that in the
judgment of ev3’s Chief Executive Officer constitutes gross negligence,
misconduct, willful breach of duty or habitual neglect of duty in the
performance of her duties and responsibilities, (B) Employee has engaged in
dishonesty, fraud, embezzlement or theft, in each case related to ev3, (C) any
unlawful or criminal activity of a serious nature, or (D) Employee has engaged
in a material breach of this Amendment or the Original Agreement.

10.                                 Reaffirming
Original Agreement.  Employee
reaffirms her commitments to the terms of her Original Agreement which have not
been modified by this Amendment.

11.                                 Business
Support and Reimbursement of Expenses. 
As a member of the Legal Department, ev3 agrees that Employee shall
continue to utilize the staff in the Legal Department for support in accordance
with the policies and procedures implemented from time to time by the Chief
Legal Officer, and that all of her reasonable out-of-pocket business expenses
incurred in connection with the performance of her duties hereunder, including
but not limited to travel, computer, phone, supplies and services shall be
reimbursed by ev3, provided that Employee properly accounts to ev3 for all such
expenses in accordance with ev3’s standard policies relating to reimbursement
of business expenses. All international travel of Employee required in
connection with the performance of her duties hereunder shall be business
class; provided, however, that such level of travel is then ev3’s  current policy with respect to
international travel for ev3’s most senior level employees. Notwithstanding any
of the foregoing, all expenses incurred by Employee will be subject to review
and approval by ev3’s Chief Legal Officer in accordance with ev3 policies and
procedures.

12.                                 Other
Endeavors by Employee.  ev3
recognizes and agrees that Employee shall be free to engage in other business,
political and/or nonprofit activities unrelated to ev3; provided, however, that
such activities do not constitute a breach of her commitments to ev3 in her
Original Agreement or this Amendment; and provided, further that Employee does
not purport to act on behalf of ev3 or otherwise represent any affiliation with
ev3 in connection with her participation in such activities.

13.                                 No
Other Changes.  Except as specifically
amended by this Amendment, all other provisions of the Original Agreement shall
remain in full force and effect.  This
Amendment shall not constitute or operate as a waiver of; or estoppel with
respect to, any provisions of the Original Agreement by any party hereto.

14.                                   Governing
Law: Venue.  This Agreement shall be
governed by, and construed and enforced in accordance with Minnesota law,
except to the extent it is pre-empted by federal law. The parties agree that
any dispute relating to this Agreement shall be subject to the jurisdiction of
the courts within the State of Minnesota, Hennepin County.

15.                                 Entire
Agreement.  This Amendment and the
Original Agreement together contains all the understandings and agreements
between the parties concerning Employee’s employment with ev3 and supersedes
any and all prior agreements and understandings, whether written or oral,
relating to the matters addressed in this Amendment, except the Change in
Control Agreement, which shall remain in full force and effect. The parties
agree that there were no inducements or representations leading to the
execution of this Amendment except as stated in this Amendment. Any
modification of or addition to this Amendment must be in writing and signed by
Employee and on behalf of ev3 Inc. and ev3 Endovascular, by ev3’s Chief
Executive Officer or ev3’s Vice President of Human Resources.

16.                                 Counterparts.  This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.

[Remainder
of page intentionally left blank]

This
Amendment shall be effective as of the date first above written.

	
  ev3 Inc.

  	
  Employee

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/James M.
  Corbett

  	
   

  	
  /s/L. Cecily
  Hines

  	
   

  
	
  By: James M.
  Corbett

  	
  L. Cecily Hines

  
	
  Its: President
  and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Ev3
  Endovascular, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/James M.
  Corbett

  	
   

  	
   

  
	
  By: James M.
  Corbett

  	
   

  
	
  Its: President
  and Chief Executive Officer

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