EMPLOYMENT AGREEMENT
This employment agreement (this "Agreement") is made as of the 10th day
of September, 2002 by and between Integra LifeSciences Holdings Corporation, a
Delaware Corporation (the "Company") and Xxxx X. Xxxxxxxx, III ("Executive").
Background
Executive is currently the Chief Administrative Officer of Company.
Company desires to continue to employ Executive, and Executive desires to remain
in the employ of Company, on the terms and conditions contained in this
Agreement. Executive will be substantially involved with Company's operations
and management and will learn trade secrets and other confidential information
relating to Company and its customers; accordingly, the noncompetition covenant
and other restrictive covenants contained in Section 14 of this Agreement
constitute essential elements hereof.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein and intended to be legally bound hereby, the parties
hereto agree as follows:
Terms
1. Definitions. The following words and phrases shall have the meanings
set forth below for the purposes of this Agreement (unless the context clearly
indicates otherwise):
(a) "Base Salary" shall have the meaning set forth in Section 5.
(b) "Board" shall mean the Board of Direcetors of Company, or
any successor thereto.
(c) "Cause," as determined by the Board in good faith,
shall mean Executive has --
(1) failed to perform his stated duties in all material
respects, which failure continues for 15 days after
his receipt of written notice of the failure;
(2) intentionally and materially breached any provision
of this Agreement and not cured such breach (if
curable) within 15 days of his receipt of written
notice of the breach;
(3) demonstrated his personal dishonesty in connection
with his employment by Company;
(4) engaged in willful misconduct in connection with his
employment with the Company;
(5) engaged in a breach of fiduciary duty in connection
with his employment with the Company; or
(6) willfully violated any law, rule or regulation, or
final cease-and-desist order (other than traffic
violations or similar offenses) or engaged in other
serious misconduct of such a nature that his
continued employment may reasonably be expected to
cause the Company substantial economic or
reputational injury.
(d) A "Change in Control" of Company shall be deemed to
have occurred:
(1) if the "beneficial ownership" (as defined in
Rule 13d-3 under the Securities Exchange Act
of 1934) of securities representing more than
fifty percent (50%) of the combined voting power
of Company Voting Securities (as herein defined)
is acquired by any individual, entity or group
(a "Person"), other than Company, any trustee or
other fiduciary holding securities under any
employee benefit plan of Company or an affiliate
thereof, or any corporation
owned, directly or indirectly, by the stockholders
of Company in substantially the same proportions
as their ownership of stock of Company (for
purposes of this Agreement, "Company Voting
Securities" shall mean the then outstanding
voting securities of Company entitled to vote
generally in the election of directors); provided,
however, that any acquisition from Company or any
acquisition pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of
paragraph (3) of this definition shall not be a
Change in Control under this paragraph (1); or
(2) if individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of
the Board; provided, however, that any individual
becoming a director subsequent to the date hereof
whose election, or nomination for election by
Company's stockholders, was approved by a vote of
at least a majority of the directors then
comprising the Incumbent Board shall be considered
as though such individual were a member of the
Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of
office occurs as a result of an actual or
threatened election contest with respect to the
election or removal of directors
or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person
other than the Board; or
(3) upon consummation by Company of a reorganization,
merger or consolidation or sale or other
disposition of all or substantially all of the
assets of Company or the acquisition of assets or
stock of any entity (a "Business Combination"), in
each case, unless immediately following such
Business Combination: (i) Company Voting Securities
outstanding immediately prior to such Business
Combination (or if such Company Voting Securities
were converted pursuant to such Business
Combination, the shares into which such Company
Voting Securities were converted) (x) represent,
directly or indirectly, more than 50% of the
combined voting power of the then outstanding
voting securities entitled to vote generally in the
election of directors of the corporation resulting
from such Business Combination (the "Surviving
Corporation"), or, if applicable, a corporation
which as a result of such transaction owns Company
or all or substantially all of Company's assets
either directly or through one or more
subsidiaries (the "Parent Corporation") and
(y) are held in substantially the same
proportions after such Business Combination as
they were immediately prior to such Business
Combination;(ii) no Person (excluding any employee
benefit plan (or related trust) of Company
or such corporation resulting from such Business
Combination) beneficially owns, directly or
indirectly, 50% or more of the combined voting
power of the then outstanding voting securities
eligible to elect directors of the Parent
Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) except to
the extent that such ownership of Company existed
prior to the Business Combination; and (iii) at
least a majority of the members of the board of
directors of the Parent Corporation (or, if there
is no Parent Corporation, the Surviving Corporation)
were members of the Incumbent Board at the time of
the execution of the initial agreement, or the
action of the Board, providing for such Business
Combination; or
(4) upon approval by the stockholders of Company of a
complete liquidation or dissolution of Company.
(e) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(f) "Company" shall mean Integra LifeSciences Holdings
Corporation and any corporation, partnership or other
entity owned directly or indirectly, in whole or in
part, by Integra LifeSciences Holdings Corporation.
(g) "Disability" shall mean Executive's inability to
perform his duties hereunder by reason of any
medically determinable physical or mental impairment
which is expected to result in death or which has
lasted or is expected to last for a continuous period
of not fewer than six months.
(h) "Good Reason" shall mean:
(1) a material breach of this Agreement by Company
which is not cured by Company within 15 days
of its receipt of written notice of the breach;
(2) the relocation by the Company of the Executive's
office location to a location more than thirty (30)
miles from Princeton, New Jersey;
(3) without Executive's express written consent, the
Company reduces Executive's Base Salary or the
aggregate fringe benefits provided to Executive
(except to the extent permitted by Section 5 or
Section 6, respectively) or substantially alters the
Executive's authority and/or title as set forth in
Section 2 hereof in a manner reasonably construed to
constitute a demotion, provided, Executive resigns
within 90 days after the change objected to; or
(4) without Executive's express written consent,
Executive fails at any point during the one-year
period following a Change in Control to hold the
title and authority (as set forth in Section 2
hereof) with the Parent Corporation (or if there is
no Parent Corporation, the Surviving Corporation)
that Executive held with the Company immediately
prior to the Change of Control, provided Executive
resigns within one year of the Change in Control;
(5) Company fails to obtain the assumption of this
Agreement by any successor to Company.
(i) "Principal Executive Office" shall mean Company's
principal office for executives, presently located at
000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000.
(j) "Retirement" shall mean the termination of
Executive's employment with Company in accordance
with the retirement policies, including early
retirement policies, generally applicable to
Company's salaried employees.
(k) "Termination Date" shall mean the date specified in
the Termination Notice.
(l) "Termination Notice" shall mean a dated notice which:
(i) indicates the specific termination provision in
this Agreement relied upon (if any); (ii) sets forth
in reasonable detail the facts and circumstances
claimed to provide a basis for the termination of
Executive's employment under such provision; (iii)
specifies a Termination Date; and (iv) is given in
the manner specified in Section 15(h).
2. Employment. Company hereby employs Executive as Chief Administrative
Officer, responsible for the business development department, the law
department, the regulatory affairs and quality assurance department, and the
human resources department of the Company, and Executive hereby agrees to accept
such employment and agrees to render services to Company in such capacity (or in
such other capacity in the future as the Board may reasonably deem equivalent to
such position) on the terms and conditions set forth in this Agreement.
Executive's primary place of employment shall be at the Principal Executive
Office and Executive shall report to the Chief Executive Officer.
3. Term.
(a) Term and Renewal of Agreement. Unless earlier
terminated by Executive or Company as provided in
Section 10 hereof, the term of Executive's employment
under this Agreement shall commence on the date of
this Agreement and terminate on December 31, 2003.
Subject to subsection 3(b), this Agreement shall be
deemed automatically, without further action, to
extend for an additional year on December 31, 2003
and each anniversary thereof.
(b) Annual Review. Prior to December 31, 2003 and each
anniversary thereof, the Board shall consider
extending the term of this Agreement. The term shall
continue to extend in the manner set forth in
subsection 3(a) unless either the Board does not
approve the extension and provides written notice to
Executive of such event, or Executive gives written
notice to Company of Executive's election not to
extend the term. In either case, the written notice
shall be given not fewer than 30 days prior to any
such renewal date. References herein to the term of
this Agreement shall refer both to the initial term
and successive terms.
4. Duties. Executive shall:
(a) faithfully and diligently do and perform all such
acts and duties, and furnish such services as are
assigned to Executive as of the
date this Agreement is signed, and (subject to
Section 2) such additional acts, duties and services
as the Board may assign in the future; and
(b) devote his full professional time, energy, skill and
best efforts to the performance of his duties
hereunder, in a manner that will faithfully and
diligently further the business and interests of
Company, and shall not be employed by or participate
or engage in or in any manner be a part of the
management or operations of any business enterprise
other than Company without the prior consent of the
Chief Executive Officer or the Board, which consent
may be granted or withheld in his or its sole
discretion; provided, however, that notwithstanding
the foregoing, Executive may serve on civic or
charitable boards or committees so long as such
service does not materially interfere with
Executive's obligations pursuant to this Agreement.
5. Compensation. Company shall compensate Executive for his services at
a minimum base salary of $270,000 per year ("Base Salary"), payable in periodic
installments in accordance with Company's regular payroll practices in effect
from time to time. Executive's Base Salary shall be subject to annual reviews,
but may not be decreased without Executive's express written consent (unless the
decrease is pursuant to a general compensation reduction applicable to all, or
substantially all, executive officers of Company). Bonus payments may be made as
determined appropriate by the Board in its sole discretion.
6. Benefit Plans. Executive shall be entitled to participate in and
receive benefits under any employee benefit plan or stock-based plan of Company,
and shall be eligible for any other plans and benefits covering executives of
Company, to the extent commensurate with his then duties and responsibilities
fixed by the Board. Company shall not make any change in such plans or benefits
that would adversely affect Executive's rights thereunder, unless such change
affects all, or substantially all, executive officers of the Company.
7. Vacation. Executive shall be entitled to paid annual vacation in
accordance with the policies established from time to time by the Board, which
shall in no event be fewer than three weeks per annum.
8. Business Expenses. Company shall reimburse Executive or otherwise
pay for all reasonable expenses incurred by Executive in furtherance of or in
connection with the business of Company, including, but not limited to,
automobile and traveling expenses and all reasonable entertainment expenses,
subject to such reasonable documentation and other limitations as may be
established by the Company.
9. Disability. In the event Executive incurs a Disability, Executive's
obligation to perform services under this Agreement will terminate, and the
Board may terminate this Agreement upon written notice to Executive.
10. Termination.
(a) Termination without Salary Continuation. In the event
(i) Executive terminates his employment hereunder
other than for Good Reason, or (ii) Executive's
employment is terminated by Company due to his
Retirement, or death, or for Cause, Executive shall
have no right to compensation or other benefits
pursuant to this Agreement for any period after his
last day of active employment.
(b) Termination with Salary Continuation (No Change in
Control). Except as provided in subsection 10(c) in
the event of a Change in Control, in the event (i)
Executive's employment is terminated by Company for a
reason other than Retirement, death or Cause, or (ii)
Executive terminates his employment for Good Reason,
or (iii) Company shall fail to extend this Agreement
pursuant to the provisions of Section 3, then Company
shall:
(1) pay Executive a severance amount equal to
Executive's Base Salary (determined without regard
to any reduction in violation of Section 5) as of
his last day of active employment; the severance
amount shall be paid in a single sum on the first
business day of the month following the Termination
Date; and
(2) maintain and provide to Executive, at no cost to
Executive, for a period ending at the earliest of
(i) the first anniversary of the Termination Date;
(ii) the date of Executive's full-time employment
by another employer; or (iii) Executive's death,
continued participation in all group insurance, life
insurance, health and accident, disability, and
other employee benefit plans in which Executive
would have been entitled to participate had his
employment with Company continued throughout such
period, provided that such participation is not
prohibited by the terms of the plan or by Company
for legal reasons.
(c) Termination with Salary Continuation (Change in
Control). Notwithstanding anything to the contrary
set forth in subsection 10(b), in the event within
twelve months of a Change in Control: (i) Executive
terminates his employment for Good Reason, or (ii)
Executive's employment is terminated by Company for a
reason other than Retirement, death or Cause, or
(iii) Company shall fail
to extend this Agreement pursuant to Section 3, then
Company shall:
(1) pay Executive a severance amount equal to 2.99 times
Executive's Base Salary (determined without regard to
any reduction in violation of Section 5) as of his
last day of active employment; the severance amount
shall be paid in a single sum on the first business
day of the month following the Termination Date;
(2) maintain and provide to Executive, at no cost to
Executive, for a period ending at the earliest of (i)
the fifth anniversary of the date of this Agreement;
or (ii) Executive's death, continued participation in
all group insurance, life insurance, health and
accident, disability, and other employee benefit
plans in which Executive would have been entitled to
participate had his employment with Company continued
throughout such period, provided that such
participation is not prohibited by the terms of the
plan or by Company for legal reasons; and
(3) pay to Executive all reasonable legal fees and
expenses incurred by Executive as a result of such
termination of employment (including all fees and
expenses, if any, incurred by Executive in contesting
or disputing any such termination or in seeking to
obtain to enforce any right or benefit provided to
Executive by this Agreement whether by arbitration or
otherwise).
(d) Termination Notice. Except in the event of
Executive's death, a termination under this Agreement
shall be effected by means of a Termination Notice.
11. Withholding. Company shall have the right to withhold from all
payments made pursuant to this Agreement any federal, state, or local taxes and
such other amounts as may be required by law to be withheld from such payments.
12. Assignability. Company may assign this Agreement and its rights and
obligations hereunder in whole, but not in part, to any entity to which Company
may transfer all or substantially all of its assets, if in any such case said
entity shall expressly in writing assume all obligations of Company hereunder as
fully as if it had been originally made a party hereto. Company may not
otherwise assign this Agreement or its rights and obligations hereunder. This
Agreement is personal to Executive and his rights and duties hereunder shall not
be assigned except as expressly agreed to in writing by Company.
13. Death of Executive. Any amounts due Executive under this Agreement
(not including any Base Salary not yet earned by Executive) unpaid as of the
date of Executive's death shall be paid in a single sum as soon as practicable
after Executive's death to Executive's surviving spouse, or if none, to the duly
appointed personal representative of his estate.
14. Restrictive Covenants.
(a) Covenant Not to Compete. During the term of this
Agreement and for a period of one (1) year following
the Termination Date, Executive shall not directly or
indirectly: (i) engage, anywhere within the
geographical areas in which Company is conducting
business operations or providing services as of the
date of Executive's termination of employment, in the
development, manufacturing or selling of medical
devices for use by neurosurgeons, or any other
business the revenues of which constituted at least
30% of Company's revenues during the six (6) month
period prior to the Termination Date (the
"Business"); (ii) be or become a stockholder, partner,
owner, officer, director or employee or agent of,
or a consultant to or give financial or other
assistance to, any person or entity engaged in the
Business; (iii) seek in competition with the business
of the Company to procure orders from or do business
with any customer of Company; (iv) solicit or contact
with a view to the engagement or employment by any
person or entity of any person who is an employee
of Company; (v) seek to contract with or engage (in
such a way as to adversely affect or interfere with
the business of Company) any person or entity who has
been contracted with or engaged to manufacture,
assemble, supply or deliver products, goods, materials
or services to Company; or (vi) engage in or
participate in any effort or act to induce any of the
customers, associates, consultants, or employees of
Company to take any action which might be
disadvantageous to Company; provided, however, that
nothing herein shall prohibit Executive and
his affiliates from owning, as passive investors,
in the aggregate not more than 5% of the outstanding
publicly traded stock of any corporation so engaged.
(b) Confidentiality. Executive acknowledges a duty of
confidentiality owed to Company and shall not, at any
time during or after his employment by Company, retain
in writing, use, divulge, furnish, or make accessible
to anyone, without the express authorization of the
Board, any trade secret, private or confidential
information or knowledge of Company obtained or
acquired by him while so employed. All computer
software, business cards, telephone lists, customer
lists, price lists, contract forms, catalogs, Company
books, records, files and know-how acquired while an
employee of Company are acknowledged to be the property
of Company and shall not be duplicated, removed from
Company's possession or premises or made use of other
than in pursuit of Company's business or as may
otherwise be required by law or any legal process, or
as is necessary in connection with any adversarial
proceeding against Company and, upon termination of
employment for any reason, Executive shall deliver to
Company all copies thereof which are then in his
possession or under his control. No information shall
be treated as "confidential information" if it is
generally available public knowledge at the time of
disclosure or use by Executive.
(c) Inventions and Improvements. Executive shall promptly
communicate to Company all ideas, discoveries and
inventions which are or may be useful to Company or
its business. Executive acknowledges that all such
ideas, discoveries, inventions, and improvements which
heretofore have been or are hereafter made, conceived,
or reduced to practice by him at any time during his
employment with Company heretofore or hereafter
gained by him at any time during his employment with
Company are the property of Company, and Executive
hereby irrevocably assigns all such ideas,
discoveries, inventions and improvements to Company
for its sole use and benefit, without additional
compensation. The provisions of this Section 14(c)
shall apply whether such ideas, discoveries,
inventions, or improvements were or are conceived,
made or gained by him alone or with others, whether
during or after usual working hours, whether on or
off the job, whether applicable to matters directly or
indirectly related to Company's business interests
(including potential business interests), and
whether or not within the specific realm of his duties.
Executive shall, upon request of Company, but at no
expense to Executive, at any time during or after
his employment with Company, sign all instruments
and documents reasonably requested by Company and
otherwise cooperate with Company to protect its right
to such ideas, discoveries, inventions, or improvements
including applying for, obtaining and enforcing
patents and copyrights thereon in such countries as
Company shall determine.
(d) Breach of Covenant. Executive expressly acknowledges
that damages alone will be an inadequate remedy for
any breach or violation of any of the provisions of
this Section 14 and that Company, in addition to all
other remedies, shall be entitled as a matter of
right to equitable relief, including injunctions and
specific performance, in any court of competent
jurisdiction. If any of the provisions of this
Section 14 are held to be in any
respect unenforceable, then they shall be deemed to
extend only over the maximum period of time, geographic
area, or range of activities as to which they may be
enforceable.
15. Miscellaneous.
(a) Amendment. No provision of this Agreement may be
amended unless such amendment is signed by Executive
and such officer as may be specifically designated by
the Board to sign on Company's behalf.
(b) Nature of Obligations. Nothing contained herein shall
create or require Company to create a trust of any
kind to fund any benefits which may be payable
hereunder, and to the extent that Executive acquires
a right to receive benefits from Company hereunder,
such right shall be no greater than the right of any
unsecured general creditor of the Company.
(c) Prior Employment. Executive represents and warrants
that his acceptance of employment with Company has
not breached, and the performance of his duties
hereunder will not breach, any duty owed by him to
any prior employer or other person.
(d) Headings. The Section headings contained in this
Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation
or this Agreement. In the event of a conflict between
a heading and the content of a Section, the content
of the Section shall control.
(e) Gender and Number. Whenever used in this Agreement, a
masculine pronoun is deemed to include the feminine
and a neuter pronoun is deemed to include both the
masculine and the feminine, unless the context
clearly indicates otherwise. The singular form,
whenever used herein, shall mean or include the
plural form where applicable.
(f) Severability. If any provision of this Agreement or
the application thereof to any person or circumstance
shall be invalid or unenforceable under any
applicable law, such event shall not affect or render
invalid or unenforceable any other provision of this
Agreement and shall not affect the application of any
provision to other persons or circumstances.
(g) Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and
their respective successors, permitted assigns,
heirs, executors and administrators.
(h) Notice. For purposes of this Agreement, notices and
all other communications provided for in this
Agreement shall be in writing and shall be deemed to
have been duly given if hand-delivered, sent by
documented overnight delivery service or by certified
or registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set
forth below:
To the Company:
Integra LifeSciences Holdings Corporation
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: President
With a copy to:
The Company's General Counsel
To the Executive:
Xxxx X. Xxxxxxxx, III
00 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
(i) Entire Agreement. This Agreement sets forth the
entire understanding of the parties and supersedes
all prior agreements, arrangements and
communications, whether oral or written, pertaining
to the subject matter hereof.
(j) Governing Law. The validity, interpretation,
construction and performance of this Agreement shall
be governed by the laws of the United States where
applicable and otherwise by the laws of the State of
New Jersey.
IN WITNESS WHEREOF, this Agreement has been executed as of the
date first above written.
INTEGRA LIFESCIENCES HOLDINGS EXECUTIVE
CORPORATION
By:_/s/ Xxxxxx X. Essig______________ /s/Xxxx X. Xxxxxxxx, III
Its: President and Chief Executive Officer
