SEPARATION PAY AGREEMENT By and Between WRIGHT MEDICAL TECHNOLOGY, INC. and LANCE A. BERRY APRIL 1, 2009
Exhibit
10.1
By and Between
XXXXXX MEDICAL TECHNOLOGY, INC.
and
XXXXX
X. XXXXX
APRIL 1, 2009
TABLE OF CONTENTS
1. Definitions |
1 | |||
2. Xxxxxxxx-Xxxxx Act of 2002 |
5 | |||
3. Notice and Date of Termination |
6 | |||
4. Termination from the Board and any Offices Held |
6 | |||
5. Severance Benefits upon Involuntary Termination Prior to Change in Control |
6 | |||
6. Severance Benefits upon Involuntary Termination in Connection with and after a Change in
Control |
8 | |||
7. Severance Benefits upon Termination by the Company for Cause or by the Executive Other than
for Good Reason |
9 | |||
8. Severance Benefits upon Termination due to Death |
10 | |||
9. Adjustments to Maximize After-Tax Benefits |
10 | |||
10. Nonexclusivity of Rights |
10 | |||
11. Full Settlement; Mitigation |
11 | |||
12. Representations |
11 | |||
13. Executive’s Covenants |
11 | |||
14. Specific Remedies for Executive Breach of the Covenants as outlined in Section 13 |
13 | |||
15. Potential Impact of Accounting Restatements on Certain Bonuses and Profits |
14 | |||
16. Successors |
14 | |||
17. Administration Prior to Change in Control |
15 | |||
18. Delayed Commencement of Certain Payments |
15 | |||
19. Miscellaneous |
15 | |||
EXHIBIT A |
18 | |||
EXHIBIT B |
21 |
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THIS SEPARATION PAY AGREEMENT (“Agreement”), dated as of April 1, 2009 (the
“Effective Date”) is made by and between XXXXXX MEDICAL TECHNOLOGY, INC., a corporation
organized and existing under the laws of the State of Delaware with its principal place of business
at 0000 Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000 (the
“Company”), and XXXXX X. XXXXX (the
“Executive”).
WHEREAS, the Company or its Affiliate (collectively referred to as the “Company”)
employs the Executive as Executive Vice President & Chief Financial Officer and recognizes the
Executive as performing key functions for the success of the Company; and
WHEREAS, the Company has determined that it is in the best interests of the Company to
institute formalized separation arrangements for certain executives of the Company, including
Executive, in the event of a separation of employment; and
WHEREAS, the Executive desires to enter into this Agreement with Company;
NOW, THEREFORE, based on the foregoing, and for and in consideration of the mutual covenants
contained in this Agreement, the Company and the Executive hereby agree as follows:
1. Definitions. For the purposes of this Agreement, the following capitalized terms
have the meanings set forth below:
1.1.“ Accounting Firm” has the meaning assigned thereto in Section 9.4 hereof.
1.2. “Act” has the meaning assigned in Section 2 hereof.
1.3. “Affiliate” has the meaning set forth in Rule 12b-2 promulgated under the
Exchange Act.
1.4. “Buyer” has the meaning assigned thereto in Section 19.11 hereof.
1.5. “Cause” means:
1.5.1. Prior to a Change in Control, (i) the willful failure by the Executive to substantially
perform the Executive’s duties with the Company (other than any such failure resulting from the
Executive’s incapacity due to physical or mental illness) as determined by the Board, which failure
amounts to an intentional and extended neglect of the Executive’s duties, (ii) continued,
documented poor performance on the part of the Executive following a reasonably sufficient time for
the Executive to improve, (iii) the determination by the Board, in its sole discretion, that the
Executive has engaged or is about to engage in conduct materially injurious to the Company, (iv)
the Executive’s conviction of or entering of a guilty or no contest plea to a felony charge (or
equivalent thereof) in any jurisdiction; and/or (v) the Executive’s participation in activities
proscribed in Sections 13.1, 13.3, and 13.4 or the material breach of any other covenants contained
herein. For the purposes of clause (i) of this definition, no act, or failure to act, on the
Executive’s part shall be deemed to be “willful” unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the Executive’s act, or failure to
act, was in the best interests of the Company.
1.5.2. From and after a Change in Control, (i) the willful failure by the Executive to
substantially perform the Executive’s duties with the Company (other than any such failure
resulting from the Executive’s incapacity due to physical or mental illness) as determined by the
Board, which failure amounts to an intentional and extended neglect of the Executive’s duties, (ii)
the determination by the Board, in its sole discretion, that the Executive has engaged or is about
to engage in conduct materially injurious to the Company, (iii) the Executive’s conviction of or
entering of a guilty or no contest plea to a
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felony charge (or equivalent thereof) in any jurisdiction; and/or (iv) the Executive’s
participation in activities proscribed in Sections 13.1, 13.3, and 13.4 or the material breach of
any other covenants contained herein. For the purposes of clause (i) of this definition, no act,
or failure to act, on the Executive’s part shall be deemed to “willful” unless done, or omitted to
be done, by the Executive not in good faith and without reasonable belief that the Executive’s act,
or failure to act, was in the best interests of the Company. Notwithstanding the foregoing, the
Executive shall not be deemed terminated for Cause pursuant to clause (i) of this definition unless
and until the Executive shall have been provided with reasonable notice of and, if possible, a
reasonable opportunity to cure the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment for Cause.
1.6. “Change in Control” shall be deemed to have occurred on or after the Effective
Date of any of the following:
1.6.1. the acquisition by any Person or Persons acting as a group of capital stock of Xxxxxx
Medical Group, Inc. (“WMG”), a Delaware corporation and the sole stockholder of the
Company, which when added to any capital stock of WMG already owned by the Person, constitutes more
than fifty percent (50%) of either (i) the total fair market value of the outstanding capital stock
of WMG, or (ii) the total voting power of the outstanding capital stock of WMG; provided, however,
that a Change in Control will not be deemed to have occurred when any Person who owns more than
fifty percent (50%) of the total fair market value or the total voting power of the outstanding
capital stock of WMG as of the date of this Agreement acquires any additional capital stock of WMG;
and provided further, that an increase in the percentage of the outstanding capital stock of WMG
owned by a Person as a result of a transaction in which WMG acquires its capital stock in exchange
for property will be treated as an acquisition of such capital stock by such Person; or
1.6.2. the acquisition by a Person, in a single transaction or a series of transactions within
a twelve (12) month period, of capital stock of WMG representing not less than thirty-five percent
(35%) of the total voting power of the outstanding capital stock of WMG; or
1.6.3. the acquisition by a Person, in a single transaction or a series of transactions within
a twelve (12) month period, of consolidated assets of WMG which have a total gross fair market
value of not less than forty percent (40%) of the total gross fair market value of all the
consolidated assets of WMG immediately prior to such acquisition(s), in each case without regard to
any liabilities associated with such assets; provided, however, that a Change in Control will not
be deemed to have occurred when such assets are acquired by:
1.6.3.1. an entity of which WMG owns, directly or indirectly, fifty
percent (50%) or more of
the total fair market value or the total voting power of the outstanding capital stock;
1.6.3.2. a Person which owns, directly or indirectly, fifty percent
(50%) or more of the total
fair market value or the total voting power of the outstanding capital stock of WMG;
1.6.3.3. an entity of which a Person described in clause ii above
owns, directly or
indirectly, fifty percent (50%) or more of the total fair market value or the total voting power of
the outstanding capital stock;
1.6.3.4. an entity which is controlled by the stockholders of WMG
immediately after the
transfer; or
1.6.3.5. a stockholder of WMG in exchange for or with respect to
capital stock of WMG.
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1.6.4 a majority of the members of the WMG Board of Directors (the “Board”) is
replaced in any twelve (12) month period by directors whose appointment or election is not endorsed
by a majority of the members of the Board prior to the date of the appointment or election; or
1.6.5 there is consummated a merger or consolidation of the Company or any direct or indirect
subsidiary of the Company with any other corporation or partnership which results in a forty
percent (40%) or more of the Company’s assets to be transferred under the control of a different
legal entity.
1.7. “Change in Control Date” means the date on which a Change in Control occurs.
1.8. “Code” means the Internal Revenue Code of 1986, as amended and the Treasury
Regulations promulgated thereunder, as in effect from time to time.
1.9. “Compensation Committee” means the compensation committee of the Board.
1.10. “Competitive Business” means the manufacturing, supplying, producing,
selling,
distributing, marketing or providing for sale of any product, device or instrument manufactured or
sold by the Company or any of its Affiliates or subsidiaries, in each case as of the Executive’s
Date of Termination.
1.11. “Confidential Information” means non-public
privileged or confidential
information and trade secrets concerning the operations, future plans and methods of doing
business.
1.12. “Date of Termination” has the meaning assigned thereto in Section 3.2
hereof.
1.13. “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
applicable rulings and regulations thereunder.
1.14. “Excise Tax” has the meaning assigned thereto under Section 9 hereof.
1.15.“Good Reason” means:
1.15.1. Prior to a Change in Control, the occurrence of any of the
following without the prior
written consent of the Executive, unless such act or failure to act is corrected prior to the Date
of Termination specified in the Notice of Termination (as discussed in Section 3 hereof):
1.15.1.1. the assignment to the
Executive of any duties materially inconsistent with the range
of duties and responsibilities appropriate to a senior executive within the Company, such range
determined by reference to past, current and reasonable practices within the Company;
1.15.1.2. a material reduction in the
Executive’s overall standing and responsibilities within
the Company, but not including a mere title change or a transfer within the Company which does not
singly or together adversely affect the Executive’s overall status within the Company, provided
however, that no change in reporting relationship resulting from organizational realignment due to
the addition of a Chief Operating Officer or Chief Commercial Officer or for reassignment of
responsibilities for Information Technology to another officer shall be included in this definition
of Good Reason;
1.15.1.3. a material reduction by the
Company in the Executive’s aggregate annualized
compensation and benefits opportunities, except for across-the-board reductions or modifications of
benefit plans similarly affecting all similarly situated executives of comparable rank with the
Executive;
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1.15.1.4. the failure by the Company to
pay to the Executive any portion of the Executive’s
current compensation and benefits under any program with the Company within thirty (30) days of the
date such compensation and/or benefits are due;
1.15.1.5. any purported termination of
the Executive’s employment that is not effected
pursuant to a Notice of Termination satisfying the requirements of Section 3 hereof; for the
purposes of this Agreement, no such purported termination shall be effective;
1.15.1.6. the failure by the Company to
obtain a satisfactory agreement from any successor of
the Company requiring such successor to assume and agree to perform the Company’s obligations under
this Agreement, as contemplated in Section 16.3 hereof;
1.15.1.7. the failure of the Company to
provide indemnification and D&O insurance protection
as required in Section 10 of this Agreement; or
1.15.1.8. the failure by the Company to
comply with any material provision of this Agreement.
1.15.2. From and after a Change in Control, the occurrence of any of
the following without the
prior written consent from the Executive, unless such act or failure to act is corrected prior to
the Date of Termination specified in the Notice of Termination (as discussed in Section 3 hereof):
1.15.2.1. a material and adverse change
in the Executive’s title, authority as an executive
officer, duties, responsibilities or reporting lines as in effect immediately prior to the Change
in Control;
1.15.2.2. a material reduction in the
Executive’s aggregate annualized compensation
opportunities or the failure to continue in effect any material benefit plan in which the Executive
participates immediately prior to the Change in Control, unless an equitable arrangement, agreeable
to the Executive, has been made with respect to such plan as replacement or the reduction in
participation levels of such replacement plans of the Executive;
1.15.2.3. the relocation of the
Executive’s principal place of employment immediately prior to
the Change in Control Date (the “Principal Location”) to a location which is more than
forty (40) miles from the Principal Location.
1.15.3. Notwithstanding any of the foregoing, placing the Executive on
a paid leave for up to
ninety (90) days pending a determination of whether there is a basis to terminate the Executive for
Cause shall not constitute a Good Reason.
1.15.4. Following a Change in Control, the Executive’s
determination that an act or failure to
act constitutes Good Reason shall be presumed to be valid unless the Company can provide
incontrovertible evidence to the contrary. The Executive’s right to terminate the Executive’s
employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or
mental illness. The Executive’s continued employment shall not constitute consent to, or a waiver
of rights with respect to, any act or failure to act constituting Good Reason hereunder.
1.16. “Incentive Compensation Awards” means awards granted under Incentive
Compensation Plans providing the Executive with the opportunity to earn, on a year-by-year or a
multi-year basis, annual and long-term incentive compensation.
1.17. “Incentive Compensation Plans” means annual incentive compensation plans and
long-term incentive compensation plans of the Company, which long-term incentive compensation plans
may include plans offering stock options, restricted stock and other forms of long-tern incentive
compensation.
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1.18. “Involuntary Termination” means (a) a termination of employment by the
Company
for other than for Cause or death, or (b) the Executive’s resignation of employment for Good
Reason; provided, however, that except as provided in the last paragraph of Section 6 hereof, a
termination of the Executive’s employment by reason of the Executive’s retirement on or after age
[65] prior to a Change in Control shall not constitute an Involuntary Termination hereunder. In
addition, an Involuntary Termination that would cause an amount to be paid to an Executive which is
non-qualified deferred compensation subject to Code Section 409A, shall also mean an Executive’s
“separation from service” within the meaning of Section 409A of the Code.
1.19. “Notice of Termination” has the meaning assigned thereto under
Section 3.1
hereof.
1.20. “Payment” has the meaning assigned thereto in Section 9 hereof.
1.21. “Person” has the meaning set forth in Section 3(a)(9) of the Exchange
Act, as
modified and used in sections 13(d) and 14(d) thereof, except that the term shall not include (i)
the Company or any of its Affiliates, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, (iv) a corporation owned, directly
or indirectly, by the shareholders of the Company in substantially the same proportions as their
ownership of the stock in the Company, or (v) a person or group as used in Rule 13d-1(b)
promulgated under the Exchange Act.
1.22. “Post-Change In Control Accrued Obligations” has the meaning assigned thereto
in
Section 6.3.1 hereof.
1.23. “Post-Change In Control Severance Payment” has the meaning assigned thereto
in
Section 6 hereof.
1.24. “Pre-Change In Control Accrued Obligations” has the meaning assigned thereto
in
Section 5.3.1 hereof.
1.25. “Pre-Change In Control Severance Payment” has the meaning assigned thereto in
Section 5 hereof.
1.26. “Principal Location” has the meaning assigned thereto in
Section 1.15.2.3 above.
1.27. “Release” has the meaning assigned thereto in Section 13.5 hereof.
1.28. “Total Number of Months” has the meaning assigned thereto in Sections 5
and 6
hereof.
1.29. “Underpayment” has the meaning assigned thereto in Section 9.2 hereof.
2. Xxxxxxxx-Xxxxx Act of 2002. Notwithstanding anything herein to the contrary, if
the Company determines, in its good faith judgment, that any provision of this Agreement is likely
to be interpreted as a personal loan prohibited by the Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations promulgated thereunder (the “Act”), then such provision shall be modified as
necessary or appropriate so as to not violate the Act; and if this cannot be accomplished, then the
Company shall use its best efforts to provide the Executive with similar, but lawful, substitute
benefit(s) at a cost to the Company not to significantly exceed the amount the Company would have
otherwise paid to provide such benefit(s) to the Executive. In addition, if the Executive is
required to forfeit or to make any repayment of any compensation or benefit(s) to the Company under
the Act or any other law, such forfeiture or repayment shall not constitute Good Reason.
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3. Notice and Date of Termination
3.1. Any termination of the Executive’s employment by the Company or by the Executive shall be
communicated by a written notice of termination to the other party (the “Notice of
Termination”). Where applicable, the Notice of Termination shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the Executive’s employment
under the provision so indicated. Unless the Board determines otherwise, a Notice of Termination
by the Executive alleging a termination for Good Reason must be made within 90 days of the initial
instance, or the initial instance which should reasonably have been known to the Executive, of an
act or failure to act that the Executive alleges to constitute Good Reason.
3.2. The date of the Executive’s termination of employment with the Company (the “Date
of
Termination”) shall be determined as follows:
3.2.1. If due to Company terminating the Executive’s employment,
either with or without Cause,
the Date of Termination shall be the date specified in the Notice of Termination; if for other than
Cause, the Date of Termination shall not be less than two (2) weeks from the date such Notice of
Termination is given, unless the Company elects to pay the Executive for that period in lieu of
notice.
3.2.2. If due to death, the Date of Termination is the date of death.
3.2.3. If the basis of the Executive’s Involuntary Termination is
the Executive’s resignation
for Good Reason, the Date of Termination shall be determined by the Company, but shall not be less
than two (2) weeks nor more than eight (8) weeks form the date such Notice of Termination is given.
4. Termination from the Board and any Offices Held. Upon termination of the
Executive’s employment for any reason, the Executive agrees the Executive’s membership on the Board
of the Company, the board of directors of any of the Company’s Affiliates, any committees of the
Board, any committees of the board of directors of any of the Company’s Affiliates and any and all
offices held, if applicable, shall be automatically terminated. Executive hereby agrees to
cooperate with the Company and execute any documents reasonably required by the Company or
competent authorities to effect this provision.
5. Severance Benefits upon Involuntary Termination Prior to Change in Control. Except
as provided in Sections 6 and 17 hereof, in the event of the Involuntary Termination of the
Executive prior to a Change in Control, the Company shall pay to the Executive the following
Pre-Change in Control Severance Payment in the following amounts and manner:
5.1. The total payment will be equal to the product of twelve (12) months (the “Total
Number of Months”) multiplied by 1.45 times monthly base pay. Provided, however, if the
termination occurs within the first two (2) years of the Executive’s initial employment, the
Total Number of Months shall not be less than eighteen (18) months.
5.2. The payment will be made as follows: (i) half in a lump sum payable at or within a
reasonable period of time after the Date of Termination and (ii) subject to receipt of an executed
Release that has not been revoked, the remaining half in installments starting six (6) months after
the Date of Termination with a final installment of all remaining amounts to be paid on or before
March 15 of the calendar year following the year in which the Date of Termination occurred. The
amount of each installment payment described in clause (ii) of the preceding sentence will be
determined by dividing half of the total payment by 50% of the Total Number of Months. The final
installment will be equal to the total payment reduced by all the amounts previously paid (i.e.,
the lump sum payment and the sum of all the installment payments previously paid). Notwithstanding
the provisions of clause (ii) to the contrary, if the
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six month period would cause the installments to begin to be paid after the March 15 date described in the first sentence of this section 5.2,
then no installments will be paid, and the second payment will be a lump sum equal to half the
total payment and that payment will be paid on or before March 15 of the calendar year following
the year in which the Date of Termination occurred. The installment payments (or the second lump sum payment, if applicable) are specifically designated as consideration for
execution of the Release required in Section 13 and compliance with Executive’s covenants outlined
in Section 13. All payments will have applicable taxes withheld and any installment payments will
be paid at the same time as the normal Company payroll.
5.3. In addition to the Pre-Change in Control Severance Payment, the Executive shall be
entitled to receive the following additional benefits:
5.3.1. Accrued Obligations. The Company shall pay to the
Executive a lump sum amount
in cash equal to the sum of (i) the Executive’s annual base salary through the Date of Termination
to the extent not theretofore paid, (ii) an amount equal to any annual cash Incentive Compensation
Awards earned (based on the performance for the most recently completed incentive period, whether
that period is the prior quarter or the prior calendar year), but not yet paid, (iii) an amount
equal to the value of any accrued and/or untaken vacation, if any, and (iv) reimbursement for
unreimbursed business expenses, if any, properly incurred by the Executive in the performance of
the Executive’s duties in accordance with the policies established from time to time by the Board.
(The amounts specified in clauses (i), (ii), (iii) and (iv) shall be hereinafter referred to as the
“Pre-Change in Control Accrued Obligations”.)
5.3.2. Equity Based Compensation. All equity-based Incentive
Compensation Awards
(including, without limitation, stock options, stock appreciation rights, restricted stock awards,
restricted stock units, performance share awards or other related awards) held by the Executive
shall be governed by the terms of the applicable Incentive Compensation Plan and Incentive
Compensation Award agreement, and this Agreement shall have no effect upon them.
5.3.3. Welfare Benefits. Subject to Section 11 herein, the
Executive shall be
eligible for health and dental coverage as provided for under COBRA, using the normal COBRA
administration process of the Company. The Company will pay all costs of these benefits for a
period up to, but not exceeding 18 months. If the Executive accepts employment with another
employer or otherwise is no longer eligible for COBRA coverage, these welfare benefits will cease
to be provided.
5.3.4. Outplacement Benefits. The Executive shall receive
outplacement assistance and
services following the Date of Termination for a period of months equal to the Total Number of
Months. These services will be provided by a national firm whose primary business is outplacement
assistance, selected by the Company. Notwithstanding the above, if the Executive accepts
employment with another employer, these outplacement benefits shall cease on the date of such
acceptance.
5.3.5. Financial Planning Services. The Executive shall receive
financial planning
services for a period of months equal to the Total Number of Months following the Date of
Termination, at a level consistent with the benefits provided under the Company’s financial
planning program for the Executive as in effect immediately prior to the Date of Termination.
5.3.6. Annual Physical. The Executive may, within the
12 months following the Date of
Termination, receive an annual physical consistent with the physical provided under the Company’s
annual physical program as in effect immediately prior to the Date of Termination.
5.3.7. General Insurance Benefit. No later than March 15
of the calendar year
following the year in which the Date of Termination occurred, provided Executive has made a request
for the payment described in this section 5.3.7 on such form as the Company may require. Executive
shall
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receive a payment for use in continuation of insurance coverage, such payment to be equal to
the annual supplemental executive insurance benefit provided to the Executive prior to the
Executive’s Date of Termination. The Company will use its best efforts to make this payment at the
time requested.
5.3.8. Attorney’s Fees in Defense of This Agreement.
Notwithstanding any provision in
this Agreement, the Company shall pay all reasonable attorneys’ fees and expenses for the
Executive if the Executive must engage an attorney in order to enforce this Agreement
following the Executive’s Date of Termination. The Company will make payments on at least a
quarterly basis based on xxxxxxxx presented by the Executive from his or her legal counsel.
6. Severance Benefits upon Involuntary Termination in Connection with and after a Change
in Control. Notwithstanding the provisions of Section 5 above, in the event of the Involuntary
Termination of the Executive within twelve (12) months following a Change in Control, the Company
shall pay to the Executive the following Post-Change in Control Severance Payment in the
following amounts and manner:
6.1.
The total payment will be equal to twelve (12) months multiplied
by 1.45 times monthly
base pay. This is the Total Number of Months (the “Total Number of Months”). Provided,
however, if the termination occurs within the first two (2) years of the Executive’s initial
employment, the Total Number of Months shall not be less than eighteen (18) months.
6.2. The payment will be made as follows: (i) half in a lump sum payable at or within a
reasonable period of time after the Date of Termination and (ii) subject to receipt of an executed
Release that has not been revoked, the remaining half in installments starting six (6) months after
the Date of Termination with a final installment of all remaining amounts to be paid on March 15 of
the calendar year following the year in which the Date of Termination occurred. The amount of each
installment payment described in clause (ii) of the preceding sentence will be determined by
dividing half of the total payment by 50% of the total Number of Months. The final installment
will be equal to the total payment reduced by all the amounts previously paid (i.e., the lump sum
payment and the sum of all the installment payments previously paid). Notwithstanding the
provisions of clause (ii) to the contrary, if the six month period would cause the installments to
begin to be paid after the March 15 date described in the first sentence of this section 6.2, then
no installments will be paid, and the second payment will be a lump sum equal to half the total
payment and that payment will be paid on March 15 of the calendar year following the year in which
the Date of Termination occurred. The installment payments (or the second lump sum payment, if
applicable) are specifically designated as consideration for execution of the Release required in
Section 13 and compliance with Executive’s covenants outlined in Section 13. All payments will
have applicable taxes withheld and any installment payments will be paid at the same time as the
normal Company payroll.
6.3. In addition to the Post-Change in Control Severance Payment, the Executive shall be
entitled to receive the following additional benefits:
6.3.1. Accrued Obligations. The Company shall pay to the
Executive a lump sum amount
in cash equal to the sum of (i) the Executive’s annual base salary through the Date of Termination
to the extent not theretofore paid, (ii) an amount equal to any annual cash Incentive Compensation
Awards earned (based on most recently completed performance period, whether that period is the
prior quarter or the prior year), but not yet paid, (iii) an amount equal to the value of any
accrued and/or untaken vacation, if any, (iv) reimbursement for unreimbursed business expenses, if
any, properly incurred by the Executive in the performance of the Executive’s duties in accordance
with the policies established from time to time by the Board and (v) an annual incentive payment at
target for the year that includes the Date of Termination, prorated. (The amounts specified in
clauses (i), (ii), (iii), (iv) and (v) shall be hereinafter referred to as the “Post-Change in
Control Accrued Obligations”.)
6.3.2. Equity Based Compensation. All equity-based Incentive
Compensation Awards
(including, without limitation, stock options, stock appreciation rights, restricted stock awards,
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restricted stock units, performance share awards or other related awards) held by the Executive
shall be governed by the terms of the applicable Incentive Compensation Plan and Incentive
Compensation Award agreement, and this Agreement shall have no effect upon them.
6.3.3. Welfare Benefits. Subject to Section 11 herein, the
Executive shall be
eligible for health and dental coverage as provided for under COBRA, using the normal COBRA
administration process of the Company. The Company will pay all costs of these benefits for a
period up to, but not exceeding 18 months. If the Executive accepts employment with another employer or
otherwise is no longer eligible for COBRA coverage, these welfare benefits will cease to be
provided.
6.3.4. Outplacement Benefits. The Executive shall receive
outplacement assistance and
services following the Date of Termination for a period of months equal to the Total Number of
Months. These services will be provided by a national firm whose primary business is outplacement
assistance, selected by the Company. Notwithstanding the above, if the Executive accepts
employment with another employer, these outplacement benefits shall cease on the date of such
acceptance.
6.3.5. Financial Planning Services. The Executive shall receive
financial planning
services for a period of months equal to the Total Number of Months following the Date of
Termination, at a level consistent with the benefits provided under the Company’s financial
planning program for the Executive as in effect immediately prior to the Date of Termination.
6.3.6. Annual Physical. The Executive shall, within the
12 months following the Date
of Termination, receive an annual physical consistent with the physical provided under the
Company’s annual physical program as in effect immediately prior to the Date of Termination.
6.3.7. General Insurance Benefit. No later than March 15
of the calendar year
following the year in which the Date of Termination occurred, provided Executive has made a request
for the payment described in this section 6.3.7 on such form as the Company may require. Executive
shall receive a payment for use in continuation of insurance coverage, such payment to be equal to
the annual supplemental executive insurance benefit provided to the Executive prior to the
Executive’s Date of Termination. The Company will use its best efforts to make this payment at the
time requested.
6.3.8. Attorney’s Fees in Defense of This Agreement.
Notwithstanding any provision in
this Agreement, the Company shall pay all reasonable attorneys’ fees and expenses for the Executive
if the Executive must engage an attorney in order to enforce this Agreement following the
Executive’s Date of Termination. The Company will make payments on at least a quarterly basis
based on xxxxxxxx presented by the Executive from his or her legal counsel.
6.4. Notwithstanding anything contained herein, if a Change in Control occurs and the
Executive’s employment with the Company is terminated by reason of Involuntary Termination prior to
the Change in Control Date, and if such termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect the Change in Control or (ii) otherwise
arose in connection with or in anticipation of the Change in Control, then the Executive shall, in
lieu of the payments described in Section 5 hereof, be entitled to the Post-Change in Control
Severance Payment and the additional benefits described in this Section 6 as if such Involuntary
Termination had occurred within twelve (12) months following the Change in Control.
7. Severance Benefits upon Termination by the Company for Cause or by the Executive Other
than for Good Reason. If the Executive’s employment shall be terminated for Cause, or if the
Executive terminates employment other than for Good Reason, the Company will have no further
obligations to the Executive under this Agreement other than the Pre-Change in Control Accrued
Obligations and any amounts described in Section 10 hereof.
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8. Severance Benefits upon Termination due to Death. If the Executive’s employment
shall terminate by reason of death, the Company shall pay the Executive’s estate the Post-Change in
Control Accrued Obligations and any amounts or benefits described in Section 10 herein. Such
payments shall be in addition to those rights and benefits to which the Executive’s estate may be
entitled under the relevant Company plans or programs.
9. Adjustments to Maximize After-Tax Benefits. In the event it shall be determined
that any payment or distribution by the Company or its Affiliates to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments required under this Section 9 ( a
“Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by the Executive with respect to such excise tax (such excise
tax, together with any such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”) , then the Executive’s Unreduced and Reduced Net Benefit shall be determined
and the Payments shall be adjusted in accordance with Section 9.3.
9.1. For purposes of Section 9.3 the Unreduced Net Benefit shall equal the Payments, less the
amount of federal, state and local income and other taxes (including the excise tax under Code
Section 4999) payable with respect to such benefits. For these purposes, the federal, state, local
and any other taxes shall be calculated at the maximum marginal income tax rates applicable to such
Executive for each year in which the foregoing amounts shall be paid.
9.2. For purposes of Section 9.3 the Reduced Net Benefit shall equal the amount determined
under Section 9.1 but with the Payments first reduced by an amount such that the present value of
all payments and benefits that the Executive receives or is entitled to receive from the Company
that would constitute “parachute payments” within the meaning of Code Section 280G does not exceed
2.99 times the Executive’s “base amount,” as defined under Code Section 280G. For purposes of
calculating the aggregate present value of such parachute payments, the requirements of Code
Section 280G shall be followed.
9.3. If the Executive’s Reduced Net Benefit is greater than the Unreduced Net Benefit, then
the amount of the Payments set forth in Section 9.2 of the Agreement shall be reduced to an
aggregate present value amount that does not subject any of the payments to taxation under Code
Section 4999.
9.4. A nationally recognized accounting firm as may be agreed upon by the Company and the
Executive (the ”Accounting Firm”) shall perform any and all calculations required under Code
Section 280G, and shall determine the Executive’s Reduced and Unreduced Net Benefit. Such
determination shall be made within ten (10) business days of the date of a change in control or
ownership as determined under Code Section 280G and such determinations shall be binding on the
Company and the Executive. In the event a reduction of the Payments is to be made pursuant to
Section 9.3, the Executive shall have discretion to determine which and how much of the Payments
shall be eliminated or reduced consistent with the requirements of Section 9.3 and in accordance
with the requirements of Code Section 409A. The Executive shall make such decision no later than
five (5) business days following the determination by the independent accounting firm of the
Executive’s Reduced and Unreduced Net Benefit.
10. Nonexclusivity of Rights. Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any benefit plan, program, policy or practice
provided by the Company and for which the Executive may qualify (except with respect to any benefit
to which the Executive has waived the Executive’s rights in writing), including, without
limitation, any and all indemnification arrangements in favor of the Executive (whether under
agreements or under the Company’s charter documents or otherwise), and insurance policies covering
the Executive, nor shall anything herein limit or otherwise affect such rights as the Executive may
have under any other contract or agreement entered into after the Effective Date with the Company.
Amounts which are vested benefits or which the
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Executive is otherwise entitled to receive under any benefit, plan, policy, practice or
program of, or any contract or agreement entered into with, the Company shall be payable in
accordance with such benefit, plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement. At all times during the Executive’s employment with the
Company and thereafter, the Company shall provide the Executive with indemnification and director
and officer insurance insuring the Executive against insurable events which occur or have occurred
while the Executive was a director or executive officer of the Company, on terms and conditions
that are at least as generous as that then provided to any other current or former director or
executive officer of the Company or any Affiliate.
11. Full Settlement; Mitigation. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform the obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others, provided that nothing herein shall preclude
the Company from separately pursuing recovery from the Executive based on any such claim. In no
event shall the Executive be obligated to seek other employment or take any other action by way of
mitigation of the amounts (including amounts for damages for breach) payable to the Executive under
any of the provisions of this Agreement, and such amounts shall not be reduced whether or not the
Executive obtains other employment.
12. Representations. The Executive hereby represents to the Company that the
Executive is legally entitled to enter into this Agreement and to perform the Executive’s
obligations hereunder, and that the Executive has the full right, power and authority, subject to
no rights of any third parties, to grant to the Company the rights contemplated in Section 13.2.
13. Executive’s Covenants. The Executive hereby agrees to the following:
13.1. Confidentiality. The Executive recognizes and acknowledges that the Company’s
and its predecessor’s Confidential Information is a valuable, special and unique asset of the
Company’s businesses, access to and knowledge of which are essential to the performance of the
Executive’s duties. Confidential Information shall include trade secrets and includes information
acquired by the Executive in the course and scope of the Executive’s job with the Company,
including information acquired from third parties, that is (i) not generally known or disseminated
outside the Company (such as nonpublic information), (ii) is designated or marked by the Company as
“confidential” or reasonably should be considered confidential or proprietary, or (iii) the Company
indicates through its policies, procedures or other instructions should not be disclosed to anyone
outside the Company. Without limiting the foregoing definitions, some examples of Confidential
Information under this Agreement include (a) matters of a technical nature, such as scientific,
trade or engineering secrets, “know-how”, formulae, secret processes, inventions, and research and
development plans or projects regarding existing and prospective customers, and products and
services, (b) information about costs, profits, markets, sales, customer lists, customer needs,
customer preferences and customer purchasing histories, supplier lists, internal financial data,
personnel evaluations, nonpublic information about medical devices or products of the Company
(including future plans about them), information and material provided by third parties in
confidence and/or with nondisclosure restrictions, computer access passwords, and internal market
studies or surveys and (c) any other information or matters of a similar nature. The Executive
shall not, during or after the Executive’s employment by the Company, in whole or in part, disclose
such Confidential Information to any person, firm, corporation, association or other entity for any
reason or purpose whatsoever, nor shall the Executive make use of any such property for the
Executive’s own purposes or for the benefit of any person firm, corporation, association or other
entity (except the Company) under any circumstances during or after the Executive’s employment by
the Company; provided, however, that after the Executive’s employment by the Company ceases these
restrictions shall not apply to such Confidential Information, if any, which are then in the public
domain, and provided further that the Executive was not responsible, directly or indirectly, for
such Confidential Information entering the public domain without the Company’s consent.
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13.2. Inventions. The Executive hereby sells, transfers and assigns to the Company
or to any person or entity designated by the Company all of the right, title and interest of the
Executive in and to all inventions, ideas, disclosures and improvements, whether patented or
unpatented, and copyrightable material, made or conceived by the Executive, solely or jointly,
during the Executive’s employment by the Company or any of its predecessors which relate to
methods, apparatus, designs, products, processes or devices sold, leased, used or under
consideration or development by the Company or any of its predecessors, or which otherwise relate
to or pertain to the business, functions or operations of the Company or any of its predecessors,
or which arise from the efforts of the Executive during the Executive’s employment with the Company
or any of its predecessors. The Executive shall, during and after the Executive’s employment with
the Company, communicate promptly and disclose to the Company, in such form as the Company
requests, all information, details and data pertaining to the aforementioned inventions, ideas,
disclosures and improvements. The Executive shall, during and after the Executive’s employment by
the Company, execute and deliver to the Company such formal transfers and assignments and such
other papers and documents as may be necessary by the Company to file and prosecute the patent
applications and, as to copyrightable material, to obtain copyright thereof. Any invention
relating to the business of the Company and disclosed by the Executive within one (1) year after
the Executive’s employment with the Company ceases shall be deemed to fall within the provisions of
this Section 13.2 unless proved to have been first conceived and made following such termination or
expiration.
13.3. Non-Solicitation of Employees. The Executive recognizes that the Executive
possesses and will possess confidential information about other employees of the Company and its
Affiliates relating to their education, experience, skills, abilities, compensation and benefits,
and inter-personal relationships with customer of the Company and its Affiliates. The Executive
recognizes that the information the Executive possesses and will possess about these other
employees is not generally known, is of substantial value to the Company and its Affiliates in
developing their business and in securing and retaining customers, and has been and will be
acquired by the Executive because of the Executive’s business position with the Company and its
Affiliates. The Executive agrees that at all times during the Executive’s employment with the
Company and for a period equal to the Executive’s Total Number of Months thereafter, the Executive
will not, directly or indirectly, solicit or recruit any employee of the Company or its Affiliates
for the purpose of being employed by the Executive or by any competitor of the Company or its
Affiliates on whose behalf the Executive is acting as an agent, representative or employee and that
the Executive will not convey such confidential information or trade secrets about other employees
of the Company and its Affiliates to any other Person; provided, however, that it shall not
constitute a solicitation or recruitment of employment in violation of paragraph to discuss
employment opportunities with any employee of the Company or its Affiliates who has either first
contacted the Executive or regarding whose employment the Executive has discussed with and received
the written approval of the Company’s Vice President, Human Resources (or, if such position is
vacant, the Company’s then Chief Executive Officer), prior to making such solicitation or
recruitment. In view of the nature of the Executive’s employment with the Company, the Executive
likewise agrees that the Company and its Affiliates would be irreparably harmed by any such
solicitation or recruitment in violation of the terms of this paragraph and that the Company and
its Affiliates shall therefore be entitled to preliminary and/or permanent injunctive relief
prohibiting the Executive from engaging in any activity or threatened activity in violation of the
terms of this paragraph and to any other relief available to them.
13.4. Non-Interference and Non-Competition. During the Executive’s employment by
the Company and its Affiliates and for a period of months equal to the Executive’s Total Number of
Months after such employment ceases, the Executive shall not, directly or indirectly (whether as an
officer, director, owner, employee, partner, or other participant), engage in any Competitive
Business. During this period, the Executive shall not solicit or entice any agent, supplier,
consultant, distributor, contractor, lessors or lessees of the Company or its Affiliates to make
any changes whatsoever in their current relationships with the Company or its Affiliates, and will
not assist any other Person or entity to interfere with or dispute such relationship. In view of
the nature of the Executive’s employment with the Company,
the Executive likewise agrees that the Company and its Affiliates would be irreparably harmed
by any
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such interference or competitive actions in violation of the terms of this paragraph and
that the Company and its Affiliates shall therefore be entitled to preliminary and/or permanent
injunctive relief prohibiting the Executive from engaging in any activity or threatened activity in
violation of the terms of this paragraph and to any other relief available to them.
13.5. Release. The Executive and the Company agree that if the Executive’s employment
is terminated for any reason other than Cause or death, the Executive and the Company will execute
a release (the “Release”) of all claims substantially in the form attached hereto as
Exhibit A within forty-five (45) days after the applicable Date of Termination and does not revoke
such Release in accordance to the terms thereof. The Executive recognizes and agrees that
notwithstanding any other section to the contrary, this executed Release is required to be made
prior to any payments of any kind under this Agreement. Furthermore, in the event that the
Executive is covered under the Age Discrimination in Employment Act (“ADEA”), the Executive
agrees to execute the ADEA Release of all ADEA claims substantially in the form attached
hereto as Exhibit B as provided in the ADEA Release.
13.6. Cooperation with Legal Matters. Executive agrees to cooperate with the Company
and its designated attorneys, representatives and agents in connection with any actual or
threatened judicial, administrative or other legal or equitable proceeding in which the Company is
or may become involved. Upon reasonable notice, Executive agrees to meet with and provide to the
Company or its designated attorneys, representatives or agents all information and knowledge
Executive may have relating to the subject matter of any such proceeding. The Company agrees to
reimburse Executive for any reasonable costs incurred by Executive in providing such cooperation.
14. Specific Remedies for Executive Breach of the Covenants as outlined in Section 13.
Without limiting the rights and remedies available to the Company, and notwithstanding the rights
of the Executive set forth in Section 11, in the event of any breach by the Executive of the
covenants set forth in Section 13 above, the following actions may be taken by the Company:
14.1. if the Company believes a breach has occurred, it will deliver to the Executive a
summary of the breach and a demand for explanation or agreement that such breach has occurred; the
Executive shall have twenty (20) business days to respond in writing to this demand, whereupon the
Company will make a decision as to whether the breach has, in fact, occurred; if it is determined
such a breach has occurred, then
14.2. the Company’s obligation to make any payment or provide any benefits to the Executive
under Sections 5, 6, 7, 8 or 9 of this Agreement shall cease immediately and permanently, which
shall not have any impact whatsoever on the Executive’s continuing obligations under Sections 14.3
and 14.4 below, except, however, the benefits outlined in Sections 5.3.8 and 6.3.8 will continue to
be provided;
14.3. the Executive shall repay to the Company, within ten (10) days after the Executive
receives written demand therefore, an amount equal to ninety percent (90%) of the payments and
benefits previously received by the Executive under this Agreement, plus interest on such amount at
an annual rate equal to the lesser of ten percent (10%) or the maximum non-usurious rate under
applicable law, from the dates on which such payments and benefits were received to the date of
repayment to the Company; and
14.4. the Executive shall pay to the Company from time to time, within ten (10) days after the
Executive receives written demand therefore, an amount or amounts equal to the reasonable costs and
expenses (including reasonable attorney’s fees and expenses) incurred by or on behalf of the
Company in enforcing this Section 14 from and after the date on which the Company delivers notice
of such breach to the Executive.
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14.5. It is the desire and intent of the parties that the provisions of this Section 14 be
enforced to the fullest extent permissible under the applicable laws in each jurisdiction in which
enforcement is sought. Accordingly, if any portion of this Section 14 is adjudicated to be invalid
or unenforceable, this Section 14 shall be deemed curtailed, whether as to time or location, to the
minimum extent required for its validity under applicable law and shall be binding and enforceable
with respect to the Executive as so curtailed, such curtailment to apply only with respect to the
operation of this Section 14 in the jurisdiction in which the such adjudication is made. If a
court in any jurisdiction, in adjudicating the validity of this Section 14, imposes any additional
terms or restrictions with respect to this Section 14, this Section 14 shall be deemed amended to
incorporate such additional terms or restrictions.
14.6. Executive agrees and acknowledges that Executive has received good and adequate
consideration for the covenants set forth in this Section 14 in the form of employment,
compensation and benefits separate and independent of any payments or potential payments in this
Agreement.
15. Potential Impact of Accounting Restatements on Certain Bonuses and Profits.
15.1. If the Company is required to prepare an accounting restatement of the Company’s
consolidated balance sheet or statement of operations affecting any reporting period that
transpires during the term of this Agreement due to the material noncompliance of the Company with
any financial requirements under the securities laws, the Company’s Board will be entitled to
determine whether the noncompliance was the result of knowing, intentional, fraudulent or illegal
conduct by the Executive, and if it so determines, to require the Executive to reimburse the
Company for (i) any bonus or other incentive-based or equity-based compensation received by the
Executive from the Company during the term of this Agreement and (ii) any profits realized from the
sale of securities of the issuer by the Executive during the term of this Agreement.
15.2. In making the determination whether to seek reimbursement from Executive, the Board will
consider whether any bonus, incentive payment, equity award, or other compensation has been awarded
or received by the Executive during the term of this Agreement and whether such compensation was
based on any financial results or operating metrics that were satisfied as a result of the
Executive’s knowing, intentional, fraudulent or illegal conduct. The Board has sole discretion in
determining whether the Executive’s conduct has or has not met the standard of such forfeiture.
15.3. If the Board determines that a forfeiture is appropriate, such amounts shall be withheld
from any future amounts owed to the Executive as compensation. The Company may commence legal
action to collect such sums as the Board determines is owed to the Company.
16. Successors.
16.1. Assignment by the Executive. This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive’s legal representatives.
16.2. Successors and Assigns of the Company. This Agreement shall inure to the
benefit of and be binding upon the Company, its successors and assigns. The Company may not assign
this Agreement to any person or entity (except for a successor described in Section 16.3 below)
without the Executive’s written consent.
16.3. Assumption. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform this Agreement in
the same manner and to the
same extent that the Company would be required to perform it if no such succession had taken
place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor
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to its business and/or assets as aforesaid that assumes and agrees to perform this
Agreement by operation of law or otherwise.
17. Administration Prior to Change in Control. Prior to a Change in Control, the
Compensation Committee shall have full and complete authority to construe and interpret the
provisions of this Agreement, to determine an individual’s entitlement to benefits under this
Agreement, to make in its sole and absolute discretion all determinations contemplated under this
Agreement, to investigate and make factual determinations necessary or advisable to administer or
implement this Agreement. All determinations made under this Agreement by the Compensation
Committee shall be final and binding on all interested persons. Prior to a Change in Control, the
Compensation Committee may delegate responsibilities for the operation and administration of this
Agreement to one or more officers or employees of the Company. The provisions of this Section 17
shall terminate and be of no further force and effect upon the occurrence of a Change in Control.
18. Delayed Commencement of Certain Payments.
18.1. Any payment due hereunder that is not considered non-qualified deferred compensation and
is not subject to Section 409A of the Code shall be paid no later than March 15 of the calendar
year following the year in which the Executive’s Date of Termination occurs provided that all other
payment conditions, including the execution of an unrevoked Release, are met.
18.2. Not withstanding any provision of this Agreement to the contrary, the parties intend
that this Agreement be construed and applied in a manner that will conform its provisions with the
requirements for exemption from Section 409A of the Code or, if and to the extent payments are
subject to Section 409A of the Code, to conform to Section 409A of the Code in order to avoid the
imposition of additional federal income tax pursuant to Section 409A of the Code. Without limiting
the foregoing, in the event that the Executive is a “specified employee” within the contemplation
of Section 409A(a)(2)(B) of the Code at the time that any payment that is subject to Section 409A
of the Code is made on account of the Executive’s Involuntary Termination the Executive’s
separation from service with the Company and its Affiliates within the contemplation of Section
409A(a)(2)(A)(i) of the Code), then in no event shall such payment or the commencement thereof be
made before the six-month anniversary of the Date of Termination or, if earlier, the date of the
Executive’s post-separation death.
18.3. Any reimbursement payment made under this Agreement that is considered non-qualified
deferred compensation within the meaning of Section 409A of the Code shall be made within the
timing requirements of Treasury Regulation Section 1.409A-3(i)(iv).
19. Miscellaneous.
19.1. Governing Law. This Agreement shall be governed by, construed under and
enforced in accordance with the laws of the State of Tennessee without regard to conflicts-of-laws
principles that would require the application of any other law. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect.
19.2. Amendment. This Agreement may not be amended, modified, repealed, waived,
extended or discharged except by an agreement in writing of both parties. No person, other than
pursuant to a resolution of the Board or the Compensation Committee, shall have authority on behalf
of the Company to agree to amend, modify, repeal, waive, extend or discharge any provision of this
Agreement or anything in reference thereto.
19.3. Insurance. The Company may, at its election and for its benefit, insure the
Executive against accidental loss or death, and the Executive shall submit to such physical
examination and supply such information to the insurance company as may be required in connection
therewith; provided,
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however, that no detailed information concerning the Executive’s physical
examination will be provided to the Company or made available to the Company by the insurance
company.
19.4. Waiver of Breach. A waiver by the Company or the Executive of a breach of any
provision of this Agreement by the other party shall not operate or be construed as a waiver of any
subsequent breach of the other party.
19.5. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
19.6. Notices. Any notice required or permitted to be given under this Agreement
shall be sufficient in writing and if sent by certified mail or express delivery to the Executive
at his home address or to the Company at Xxxxxx Medical Technology, Inc., Attention: General
Counsel, 0000 Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000, or to such other address as either party
shall notify the other. Notices and communications shall be effective when actually received by
the addressee.
19.7. Taxes. The Company may withhold from any amounts payable under this Agreement
such federal, state or local taxes as shall be required to be withheld pursuant to any applicable
law or regulation.
19.8. Entire Agreement. This Agreement contains the entire agreement of the parties
with respect to the subject matter referred to herein and supersedes any and all prior
negotiations, understandings, arrangements, letters of intent, and agreements, whether written or
oral, between the Executive and the Company and its Affiliates, or any of its or their directors,
officers, employees or representatives with respect thereto.
19.9. No Right of Employment. Nothing in this Agreement shall be construed as giving
the Executive any right to be retained in the employ of the Company or shall interfere in any way
with the right of the Company to terminate the Executive’s employment at any time, with or without
Cause.
19.10. Unfunded Obligation. The obligations under this Agreement shall be unfunded.
Benefits payable under this Agreement shall be paid from the general assets of the Company. The
Company shall have no obligation to establish any fund or to set aside any assets to provide
benefits under this Agreement.
19.11. Termination. Notwithstanding anything contained herein, this Agreement shall
automatically terminate and be of no further force and effect and no benefits shall be payable
hereunder in the event that the Company sells or otherwise disposes of any part of the business or
assets of the Company (other than such a sale or disposition which is part of a transaction or
series of transactions which would result in a Change in Control) and as a result of such
transaction, the Executive is offered employment by the buyer of such business or assets (the
“Buyer”) in an executive position with reasonably comparable status, compensation, benefits
and separation agreement and which is consistent with the Executive’s experience and education, but
the Executive declines to accept such offer.
19.12. Term. The term of this Agreement shall commence from the Effective Date and
shall continue until the third (3rd) anniversary of the Effective Date; provided,
however, that commencing on the second (2nd) anniversary of the Effective Date (and each
anniversary of the Effective Date thereafter), the term of this Agreement shall automatically be
extended for one (1) additional year, unless at least ninety (90) days prior to such date, the
Company or the Executive shall give written notice to the other party that it or he, as the case
may be, does not wish to so extend this Agreement. Notwithstanding the foregoing, if the Company
gives such written notice to the Executive less than one (1) year after a Change in
Control, the term of this Agreement shall be automatically extended until the later of (a) the
date that is one (1) year after the anniversary of the Effective Date that follows such written
notice or (b) the second (2nd) anniversary of the Change in Control Date.
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IN WITNESS WHEREOF, the parties executed this Agreement as of the Effective Date.
AGREED AND ACCEPTED
XXXXXX MEDICAL TECHNOLOGY, INC.
|
XXXXX X. XXXXX | |||
By: /s/ Xxxxx X. Xxxx
|
/s/ Xxxxx X. Xxxxx
|
|||
Title: Vice President, General Counsel and Secretary |
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EXHIBIT A
MUTUAL RELEASE AGREEMENT
THIS MUTUAL RELEASE AGREEMENT (“Release”) dated as of (the “Effective
Date”) is made by and between XXXXXX MEDICAL TECHNOLOGY, INC., a corporation organized and
existing under the laws of the State of Delaware with its principal place of business at 0000
Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000 (the
“Company”), and XXXXX X. XXXXX (the
“Executive”) as provided in the Separation Pay Agreement between the parties.
The Executive, on behalf of the Executive and the Executive’s heirs, executors,
administrators, successors and assigns, whether herein named or referred to or not, does hereby
release, discharge, and acquit and by these presents does hereby release, acquit, and forever
discharge Company, its successors and assigns, its agents, servants, and employees, its divisions,
subdivisions, and affiliates (collectively, the “Company”), of and from any and all past, present,
and future claims, counterclaims, demands, actions, causes of action, liabilities, damages, costs,
loss of services, expenses, compensation, third-party actions, suits at law or in equity, of every
nature and description, whether known or unknown, suspected or unsuspected, foreseen, or
unforeseen, real or imaginary, actual or potential, and whether arising at law or in equity, under
the common law, state or federal law, or any other law, or otherwise, including, but not limited
to, any claims that have been or might have been asserted as a result of the establishment or
termination of the employer-employee relationship, hereinafter collectively referred to as claims.
It is the intention of the parties hereto to effect a full and final general release of all such
claims. It is expressly understood and agreed that this release and agreement is intended to
cover, and does cover, not only all now known injuries, losses, and damages, but any future
injuries, losses, and damages not now known or anticipated, but which may later develop or be
discovered, including all the effects and consequences thereof.
Executive does hereby declare that the Executive does understand, covenant, and agree that the
Executive will not make any claims or demands, or file any legal proceedings against Company or
join Company as a party to any claim, demand, or legal proceedings nor shall Executive proceed
against any other party, person, firm, or corporation on the claims described above except as is
necessary in order to enforce the terms and conditions of this Release and the Separation Pay
Agreement.
THE FILING OF ANY CLAIM, DEMAND, OR ANY AND ALL OTHER LEGAL PROCEEDINGS, BY THE EXECUTIVE, AGAINST
COMPANY, SHALL BE DEEMED TO BE A MATERIAL BREACH OF THE TERMS OF THIS AGREEMENT. SUCH BREACH SHALL,
IMMEDIATELY, TERMINATE COMPANY’S DUTY TO PAY ANY FURTHER SUMS TO EXECUTIVE AND SHALL ALSO BIND
EXECUTIVE TO REPAY ANY AND ALL SUMS PAID TO EXECUTIVE PURSUANT TO THE TERMS OF THIS AGREEMENT.
ADDITIONALLY, EXECUTIVE SHALL INDEMNIFY AND HOLD HARMLESS COMPANY FROM ANY AND ALL JUDGMENTS,
COSTS, EXPENSES, OR ATTORNEY FEES WHATSOEVER ARISING ON ACCOUNT OF THE FILING OF ANY SUCH CLAIM,
DEMAND, OR OTHER LEGAL PROCEEDINGS BY THE EXECUTIVE.
It is further understood and agreed that the acceptance of the consideration more fully
described in the Separation Pay Agreement between the parties is in full accord and satisfaction of
any obligations, claims, and/or disputes that Executive may have with Company.
And the parties hereby declare, understand, covenant, and agree that the terms of the
Separation Pay Agreement, and the amount stated therein, are the sole consideration for this
release and agreement and that the parties voluntarily accept said consideration for the purpose of
making a full and final compromise, adjustment and settlement of all claims for injuries, losses,
and damages resulting, or to result, from said claims.
| Xxxxxx Medical Technology, Inc. Separation Pay Agreement Page 19 |
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Except for any claim under Sections 13, 14 or 15 of the Separation Pay Agreement, the Company,
on behalf of itself, its agents, servants, and employees, its divisions, subdivisions, and
affiliates (collectively, the “Company”), successors and assigns, whether herein named or referred
to or not, does hereby release, discharge, and acquit and by these presents does hereby release,
acquit, and forever discharge Executive, the Executive’s heirs, executors, administrators,
successors and assigns, of and from any and all past, present, and future claims, counterclaims,
demands, actions, causes of action, liabilities, damages, costs, loss of services, expenses,
compensation, third-party actions, suits at law or in equity, of every nature and description,
whether known or unknown, suspected or unsuspected, foreseen, or unforeseen, real or imaginary,
actual or potential, and whether arising at law or in equity, under the common law, state or
federal law, or any other law, or otherwise, including, but not limited to, any claims that have
been or might have been asserted as a result of the establishment or termination of the
employer-employee relationship, hereinafter collectively referred to as claims. It is the
intention of the parties hereto to effect a full and final general release of all such claims. It
is expressly understood and agreed that this release and agreement is intended to cover, and does
cover, not only all now known injuries, losses, and damages, but any future injuries, losses, and
damages not now known or anticipated, but which may later develop or be discovered, including all
the effects and consequences thereof.
Company does hereby declare that the Company does understand, covenant, and agree that the
Company will not make any claims or demands, or file any legal proceedings against Executive or
join Executive as a party to any claim, demand, or legal proceedings nor shall Company proceed
against any other party, person, firm, or corporation on the claims described above except as is
necessary in order to enforce the terms and conditions of this Release and the Separation Pay
Agreement.
THE FILING OF ANY CLAIM, DEMAND, OR ANY AND ALL OTHER LEGAL PROCEEDINGS, BY THE COMPANY, AGAINST
EXECUTIVE, SHALL BE DEEMED TO BE A MATERIAL BREACH OF THE TERMS OF THIS AGREEMENT. SUCH BREACH
SHALL, IMMEDIATELY, TERMINATE EXECUTIVE’S DUTY TO COMPLY WITH THE NON-SOLICITATION,
NON-INTERFERENCE, AND NON-COMPETITION COVENANTS OF THE SEPARATION PAY AGREEMENT BETWEEN THE
PARTIES. ADDITIONALLY, COMPANY SHALL INDEMNIFY AND HOLD HARMLESS EXECUTIVE FROM ANY AND ALL
JUDGMENTS, COSTS, EXPENSES, OR ATTORNEY FEES WHATSOEVER ARISING ON ACCOUNT OF THE FILING OF ANY
SUCH CLAIM, DEMAND, OR OTHER LEGAL PROCEEDINGS BY THE COMPANY.
It is further understood and agreed that the acceptance of the consideration more fully
described in the Separation Pay Agreement between the parties is in full accord and satisfaction of
any obligations, claims, and/or disputes that Company may have with Executive.
It is further understood and agreed that this is the full and complete understanding of the
parties, that it is the integrated memorial of their agreement and that there are no other written
or oral understandings, agreements, covenants, promises, or arrangements, directly or indirectly
connected with this release, that are not incorporated herein. The terms of this release are
contractual and are not mere recitals.
Notwithstanding the foregoing, nothing in this Release shall release either party from
obligations resulting from the Separation Pay Agreement nor prohibit either party from seeking the
enforcement of the Separation Pay Agreement.
IN WITNESS WHEREOF, the parties executed this Release as of the Effective Date.
AGREED AND ACCEPTED
| Xxxxxx Medical Technology, Inc. Separation Pay Agreement Page 20 |
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| XXXXXX MEDICAL TECHNOLOGY, INC. | XXXXX X. XXXXX | |||||
By: |
||||||
Title:
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| Xxxxxx Medical Technology, Inc. Separation Pay Agreement Page 21 |
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EXHIBIT B
ADEA RELEASE AND AGREEMENT
As a material inducement to Xxxxxx Medical Technology, Inc. (hereinafter referred to as
“Xxxxxx” or “Employer”) to enter into this ADEA Release and Agreement (the “Release or “Agreement”)
with XXXXX X. XXXXX (hereinafter referred to as “Executive”) (for Executive, Executive’s heirs,
executors, administrators and assigns), Executive hereby unconditionally releases and forever
discharges Xxxxxx and each of the Xxxxxx’x stockholders, predecessors, successors, assigns, agents,
directors, officers, employees, representatives, attorneys, divisions, subsidiaries, affiliates and
all persons acting by, through, under, or in concert with any of them from any and all charges,
complaints, claims, liabilities, obligations, promises, agreements, controversies, damages,
actions, causes of action, suits, rights, demands, costs, losses, debts and expenses (including
attorney’s fees and costs actually incurred) of any nature whatsoever, known or unknown, suspected
or unsuspected, including, but not limited to, rights, under the Age Discrimination in Employment
Act of 1967, as amended from time to time, and other federal, state, or local laws prohibiting
discrimination, any claims the employee may have with regard to Executive’s hiring, employment, or
electing the re-employment program and termination of employment claims growing out of any legal
restrictions on Xxxxxx’x right to terminate its employees (“Claim” or Claims”), which the
Executive now has, owns or holds, or claims to have owned or held, or which the Executive at any
time hereinafter may have owned or held or claimed to have owned or held against Xxxxxx.
To comply with the Older Workers Benefit Protection Act of 1990, as amended from time to time,
the Release and Agreement has advised Executive of the legal requirements of this Act and fully
incorporates the legal requirements by reference into this Agreement as follows:
| a. | This Agreement is written in xxxxxx’x terms, and the Executive understands and comprehends its terms; | ||
| b. | Executive has been advised of Executive’s rights to consult an attorney to review the Agreement; | ||
| c. | Executive does not waive any rights or claims that may arise after the date the Release is executed; | ||
| d. | Executive is receiving consideration beyond anything of value to which he already is entitled; | ||
| e. | Executive has been given a reasonable period of time to consider this Agreement (45 days). |
As consideration for this Release, Xxxxxx agrees to provide the items listed in the Separation Pay
Agreement dated April 1, 2009. The Executive enters into this Release with full knowledge of its
contents and enters into this Agreement voluntarily.
| Xxxxxx Medical Technology, Inc. Separation Pay Agreement Page 22 |
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AGREED AND ACCEPTED
EXECUTIVE:
|
XXXXXX MEDICAL TECHNOLOGY, INC. | |
I acknowledge that I fully understand and
agree that this Agreement may be pleaded
by Xxxxxx Medical Technology, Inc. as a
complete defense to any claim which
hereafter may be asserted by me or a claim
against Xxxxxx Medical Technology, Inc.
for or on account of any matter or thing
whatsoever arising out of the employment
relationship or my termination from active
employment.
|
||
| By:
|
||
Title: |
||
SWORN TO AND SUBSCRIBED, before me, a
Notary Public, in my presence this
day of
, 2009
|
SWORN TO AND SUBSCRIBED, before me, a Notary Public, in my presence this day of , 2009 | |
Notary Public
|
Notary Public |
|
County
of
|
Shelby County Tennessee |
|
State
of
|
||
My Commission
Expires:
|
My Commission Expires: |
NOTE: EXECUTIVE IS HEREBY ADVISED OF HIS OR HER RIGHT TO RESCIND AND NULLIFY THIS AGREEMENT, WHICH
RIGHT MUST BE EXERCISED, IF AT ALL, WITHIN SEVEN (7) DAYS OF THE DATE OF EXECUTIVE’S SIGNATURE.
EXECUTIVE MUST REVOKE RELEASE BY LETTER TO XXXXXX MEDICAL TECHNOLOGY, INC., ATTENTION: GENERAL
COUNSEL, 0000 XXXXXXX XXXX, XXXXXXXXX, XX 00000, WITHIN SEVEN (7) DAYS. NO CONSIDERATION SHALL BE
CONVEYED UNTIL SUCH TIME PERIOD HAS EXPIRED.
