SEVERANCE AGREEMENT
Exhibit 10.1
THIS SEVERANCE AGREEMENT (“Agreement”) is made and entered into by and between Xxxxx X.
X’Xxxxx (“Executive”) and NuVasive, Inc. (“Employer”), and inures to the benefit of each of
Employer’s current, former and future parents, subsidiaries, related entities, Executive benefit
plans and their fiduciaries, predecessors, successors, officers, directors, shareholders, agents,
attorneys, Executives and assigns.
RECITALS
A. Executive has been employed by Employer since January 2003, as its Executive Vice President
and Chief Financial Officer since December 2004.
B. Executive has agreed to resign his employment, and Employer has agreed to accept
Executive’s resignation, effective upon the earlier of January 4, 2010, and the start date of the
employee hired to replace Executive (with Executive’s last day of employment referred to herein as
the “Separation Date”); provided that, with respect to the provision of services to Employer for
purposes of continued vesting of existing stock options, the Separation Date shall be no earlier
than January 4, 2010. Executive and Employer agree to jointly announce Executive’s resignation on
September 2, 2009, or such other date designated by Employer, with the stated cause of the
resignation being “personal and family reasons.”
C. Executive and Employer (collectively, the “Parties”) wish permanently to resolve any and
all actual and/or potential disputes between them, including disputes arising out of Executive’s
employment with Employer or the cessation of that employment.
NOW, THEREFORE, for and in consideration of the execution of this Agreement and the mutual
covenants contained in the following paragraphs, Employer and Executive agree as follows:
1. No Admission of Liability. The Parties agree that neither this Agreement, nor
performance of the acts required by it, constitute an admission of liability, culpability,
negligence or wrongdoing on the part of anyone, and will not be construed for any purpose as an
admission of liability, culpability, negligence or wrongdoing by any party and/or by any party’s
current, former or future parents, subsidiaries, related entities, predecessors, successors,
officers, directors, shareholders, agents, employees and assigns.
2. Separation Benefit. In consideration of the releases granted by Executive herein,
Employer agrees to provide Executive with the following: (a) a lump sum payment in the amount of
seven hundred sixty-five thousand dollars ($765,000.00), less applicable withholdings, payable in
equal installments over the twelve months following the Separation Date (either monthly or upon
regular payroll periods at Employer’s discretion); (b) salary continuation through the remainder of
2009 even if the Separation Date occurs prior to the end of 2009, (c) payment of continuation
premiums for Executive to maintain coverage for up to eighteen (18) months (or shorter if Executive
receives health benefits from another employer), beginning January 2010, in the event Executive
timely elects to continue his participation in Employer’s group health insurance plan beyond the
Separation Date, pursuant to the terms of the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”); and (d) the release (the “Employer
General Release”) at Section 9, below (collectively referred to herein as the “Separation
Benefit”). Executive expressly waives any preexisting right to a severance benefit, including,
without limitation, those rights granted in the written amendment signed by Executive and Employer
on or around August 5, 2008, as amended to date. Executive acknowledges and agrees that he is not
otherwise entitled to the Separation Benefit.
3. Wages and Vacation Time Paid. Executive acknowledges that he has been paid all
wages by Employer, through the Effective Date of this Agreement, and that such receipt has not been
conditioned upon the execution of this Agreement.
4. Protection of Confidential Information. Executive acknowledges that during the
course of his employment, he has had ongoing access and exposure to, and has obtained knowledge of
Confidential Information belonging to Employer. For purposes of this Agreement, “Confidential
Information” means all information that has actual or potential economic value to Employer from not
being generally known to the public or to other persons who can obtain economic value from its
disclosure or use. Confidential Information includes, among other things, any and all information
disclosed to Executive or known by Executive as a consequence of his employment with Employer that
is not generally available to the public (unless such information enters the public domain and
becomes available to the public through no fault on Executive’s part), about Employer, its
finances, operations, business programs, officers, directors, partners, joint ventures, employees,
contractors, vendors, suppliers, processes, procedures manuals, computer programs, sales services,
research projects, product plans and pipelines, data, accounts, billing methods, pricing, profit
margins, sales, statistical data, business methods, systems, plans, internal affairs, legal
affairs, potential or existing reorganization plans, clients, transactions with clients, lists of
clients’ names and addresses, sales and marketing techniques, any and all information entrusted to
Employer by third parties and any and all information defined as a “Trade Secret” under the Uniform
Trade Secrets Act. Executive represents and warrants that he is in full compliance with Employer’s
Proprietary Information and Inventions Agreement, and will continue to comply with the terms of
that agreement. Executive agrees that he will not use, or willfully disclose to any Person, at any
time, any Confidential Information (determined as of the Effective Date of this Agreement), except
(a) in the normal course of business on behalf of Employer; (b) with the prior written consent of
Employer; or (c) to the extent necessary to comply with law or the valid order of a court of
competent jurisdiction, in which event Executive shall notify Employer as promptly as practicable
(and, if possible, prior to making such disclosure). Executive also agrees to use reasonable
efforts to prevent any such prohibited use by any other Person.
5. Future Cooperation. Executive agrees to cooperate reasonably with Employer, its
successors, and all Employer affiliates (including Employer’s outside counsel) in connection with
the contemplation, prosecution and defense of all phases of existing, past and future litigation,
regulatory or administrative actions about which Employer reasonably believes Executive may have
knowledge or information. Executive further agrees to make himself available at mutually
convenient times during and outside of regular business hours as reasonably deemed necessary by the
Employer’s counsel. Employer shall not utilize this Section to require Executive to make himself
available to an extent that it would unreasonably interfere
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with employment responsibilities that he may have, and shall reimburse Executive for any
pre-approved reasonable business travel expenses that he incurs on Employer’s behalf as a result of
this Section, after receipt of appropriate documentation consistent with Employer’s business
expense reimbursement policy. Executive agrees to appear without the necessity of a subpoena to
testify truthfully in any legal proceedings in which Employer calls him as a witness. Executive
further agrees that he shall not voluntarily provide information to or otherwise cooperate with any
individual or private entity that is contemplating or pursuing litigation or any type of action or
claim against Employer, its successors or affiliates, or any of their current or former officers,
directors, employees, agents or representatives.
6. Non-Disparagement; Reference. Executive agrees not to disparage Employer, its
officers, directors, employees, shareholders, and agents, in any manner likely to be harmful to its
or their business, business reputation, or personal reputation, and Employer agrees to take
reasonable steps to ensure that none of its officers and/or directors disparage Executive, in any
manner likely to be harmful to his business or personal reputation; provided that each Party may
respond accurately and fully to any question, inquiry or request for information when required by
legal process. Employer’s Chief Executive Officer agrees to provide Executive with a positive
reference, for future employment or board of director opportunities.
7. Executive’s General Release. In consideration of the benefits provided under this
Agreement, including without limitation the Separation Benefit, Executive on his own individual
behalf and on behalf of his heirs, executors, administrators, assigns and successors, fully and
forever releases and discharges Employer and each of its current, former and future parents,
subsidiaries, related entities, employee benefit plans and their fiduciaries, predecessors,
successors, officers, directors, shareholders, agents, employees and assigns (collectively,
“Releasees”), with respect to any and all claims, liabilities and causes of action, of every
nature, kind and description, in law, equity or otherwise, which have arisen, occurred or existed
at any time prior to the signing of this Agreement, arising out of, or in connection with, or
resulting from Executive’s employment with Employer, or the cessation of that employment.
8. Waiver of Employment-Related Claims. Executive understands and agrees that, with
the exception of potential employment-related claims identified below, he is waiving and releasing
any and all rights or remedies he may have had or now has to pursue against Employer or any of the
Releasees for any employment-related causes of action, including without limitation, claims of
wrongful discharge, breach of contract (including, without limitation, stock option-related
contracts and grants), breach of the covenant of good faith and fair dealing, fraud, violation of
public policy, defamation, discrimination, personal injury, physical injury, emotional distress,
claims under Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act, the
Federal Rehabilitation Act, the Family and Medical Leave Act, the Health Insurance and Portability
and Accountability Act, the California Fair Employment and Housing Act, the California Family
Rights Act, the Equal Pay Act of 1963, the provisions of the California Labor Code and any other
federal, state or local laws and regulations relating to employment, conditions of employment
(including wage and hour laws) and/or employment discrimination. Claims not covered by Executive’s
release are (i) claims for unemployment insurance benefits, (ii) claims under the California
Workers’ Compensation Act (Executive represents, however, that he is not aware of having sustained
any work-related
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injuries), (iii) administrative charges before the U.S. Equal Employment Opportunity
Commission (Executive represents, however, that he is not aware of any factual or legal basis for
making any such administrative charge), and (iv) claims arising out of the breach of this
Agreement. Executive expressly acknowledges that Employer would not enter into this Agreement but
for the representation and warranty that Executive is hereby releasing any and all claims of any
nature whatsoever, known or unknown, whether statutory or at common law, which Executive now has or
could assert directly or indirectly against any of the Releasees (other than as expressly set forth
herein).
9. Employer’s General Release. In consideration of the benefits provided under this
Agreement, Employer, on behalf of its current, former and future subsidiaries, related entities,
employee benefit plans and their fiduciaries, predecessors, successors, officers, directors,
shareholders, agents, employees and assigns, fully and forever releases and discharges Executive,
his heirs, executors, administrators, assigns and successors, with respect to any and all claims,
liabilities and causes of action, of every nature, kind and description, in law, equity or
otherwise, which have arisen, occurred or existed at any time prior to the signing of this
Agreement, arising out of, or in connection with, or resulting from Executive’s employment with
Employer, or the cessation of that employment.
10. Waiver of Unknown Claims. The Parties expressly waive any and all statutory
and/or common law rights they may have to the effect that a General Release does not release
unknown claims, including any rights under Section 1542 of the Civil Code of the State of
California, which states as follows:
“A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his
settlement with the debtor.”
The Parties expressly agree and understand that the Releases given by them pursuant to this
Agreement apply to all unknown, unsuspected and unanticipated claims, liabilities and causes of
action which may exist against one another, or any of the other Releasees.
11. Consideration/Revocation Period. This Agreement is intended to release and
discharge any claims by Executive under the Age Discrimination and Employment Act. To satisfy the
requirements of the Older Workers’ Benefit Protection Act, 29 U.S.C. section 626(f), the Parties
agree as follows:
(a) Executive acknowledges that he has read and understands the terms of this Agreement.
(b) Executive acknowledges that he has been advised to consult with independent counsel
regarding this Agreement, and that he has received all counsel necessary to willingly and knowingly
enter into this Agreement.
(c) Executive acknowledges that he has been given twenty-one (21) days to consider the terms
of this Agreement (the “Consideration Period”), has taken sufficient time to
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consider whether to execute it, and has chosen to enter into this Agreement knowingly and
voluntarily. If Executive does not present an executed copy of this Agreement to Employer’s
General Counsel on or before the expiration of the Consideration Period, this Agreement and the
offer it contains will lapse.
(d) For seven (7) days following the execution of this Agreement (should he elect to execute
it), Executive may revoke this Agreement by delivering a written revocation to Employer’s General
Counsel. This Agreement shall not become effective until the eighth (8th) day after Executive
executes and does not revoke it (the “Effective Date”). If Executive either fails to sign the
Agreement during the Consideration Period, or revokes it prior to the Effective Date, he shall not
receive the Separation Benefit described herein.
12. Severability. The Parties agree that if any provision of the releases given under
this Agreement is found to be unenforceable, it will not affect the enforceability of the remaining
provisions and the courts may enforce all remaining provisions to the extent permitted by law.
13. Confidentiality of Settlement. The Parties promise and agree that, unless
compelled by legal process, they will not disclose to others and will keep confidential both the
fact of and the terms of this settlement, including the Separation Benefit referred to in this
Agreement, except that they may disclose this information to attorneys, accountants and other
professional advisors to whom the disclosure is necessary to accomplish the purposes for which they
have consulted such professional advisors. Executive expressly promises and agrees that, unless
compelled by legal process, he will not disclose to any present or former Executives of Employer
the fact or the terms of this Agreement.
14. Integrated Agreement. The Parties represent and warrant that they are not
relying, and have not relied, upon any representations or statements, verbal or written, made by
any other with regard to the facts involved in this controversy, or their rights (or asserted
rights) arising out of their alleged claims, or the execution and/or terms of this Agreement,
except as provided herein. The Parties acknowledge that this Agreement contains the entire
agreement between the Parties concerning its subject matter, and further acknowledge and agree that
parol evidence shall not be required to interpret the Parties’ intent. The Parties acknowledge the
existence of an Indemnification Agreement executed between Executive and Employer Dated March 2,
2004, and further acknowledge that such agreement remains in full force and effect.
15. Tax Liability/Indemnification. Executive assumes full responsibility for any and
all taxes, interest and/or penalties that may ultimately be assessed upon the Separation Benefit
hereunder. In the event that any taxing authority seeks to collect taxes, interest and/or
penalties from Employer on the Separation Benefit conveyed to Executive under this Agreement,
Executive will hold Employer harmless from any and all claims for such taxes, interest and/or
penalties and will indemnify Employer against any such claims.
16. Voluntary Execution. The Parties acknowledge that they have read and understand
this Agreement and that they sign it voluntarily and without coercion. The Parties further agree
that if any of the facts or matters upon which they relied in signing this Agreement prove to be
otherwise, this Agreement will nonetheless remain in full force and effect.
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17. Waiver, Amendment and Modification. The Parties agree that no waiver, amendment
or modification of any of the terms of this Agreement shall be effective unless in writing and
signed by all parties affected by the waiver, amendment or modification. No waiver of any term,
condition or default of any term of this Agreement shall be construed as a waiver of any other
term, condition or default.
18. Counterparts. This Agreement may be signed in counterparts and said counterparts
shall be treated as though signed as one document.
| Dated: 9/2/09 | /s/ Xxxxx X. X’Xxxxx | |||
| Xxxxx X. X’Xxxxx | ||||
| NuVasive, Inc. |
||||
| Dated: 9/2/09 | /s/ Xxxxx Xxxxxx | |||
| By: Xxxxx Xxxxxx | ||||
| Senior VP, General Counsel and Secretary | ||||
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