EPMD EP Medsystems (MM)

If either Senior Officer is employed by the Company immediately prior to a change in control of the Company (as defined in each Senior Management Incentive Agreement), each such Senior Officer will be entitled to a lump sum cash payment in an amount equal to two (2) times his annual base salary (at the rate in effect immediately prior to the date such change in control takes place). Such lump sum payment will be paid within 10 business days of the date the change in control transaction is consummated.

If either Senior Officer is employed by the Company immediately prior to a change in control of the Company, any unvested options to acquire the Company’s common stock held by either Senior Officer will vest immediately prior to the consummation of such change in control. This provision is consistent with the Company’s policy, previously approved by the Board of Directors, that all options to purchase common stock granted to Company employees (including all senior officers) will vest immediately prior to a change of control.

Should any of the payments described above (the “Incentive Payments”) be deemed “parachute payments” under Section 280G(b)(1) of the Internal Revenue Code of 1986, as amended, each Senior Officer will be entitled to a “gross-up” payment (each such payment, a “Gross-Up Payment”) in an amount equal to (i) any excise tax imposed any Incentive Payment, (ii) all income, employment and excise taxes imposed upon any Gross-Up Payment and (iii) any interest or penalties imposed with respect to income and employment taxes imposed on any Gross-Up Payment; provided however, that the amount of all Gross-Up Payments payable to either Senior Officer will not exceed twenty percent (20%) of the aggregate value of the cash payment and accelerated vesting (as described above) to which such Senior Officer is entitled to under his Senior Management Incentive Agreement.