EXHIBIT 10(u)
AGREEMENT
THIS AGREEMENT (the "Agreement") is made on this 11th day of February, 1998 by
and among Cross Medical Products, Inc., a Delaware corporation ("DECORP"),
Cross Medical Products, Inc., an Ohio corporation ("OHCORP") (collectively
DECORP and OHCORP are hereinafter referred to as the "Companies"). Xxxxxx X.
Xxxx Irrevocable Life Insurance Trust #1 ("Trust #1"), Xxxxxx X. Xxxx
Irrevocable Life Insurance Trust #2 ("Trust #2), and Xxxxxx X. Xxxx ("Xxxx").
RECITALS
1. Effective January 1, 1994, Funk entered into written employment
agreements with the Companies (the "Employment Agreements"). The Employment
Agreements are effective until December 31, 2003, unless earlier terminated
pursuant to the terms of the Employment Agreements. Under the Employment
Agreements, Funk has been paid a combined salary the Companies at an annual rate
of $90,000 per year. In addition, pursuant to the Employment Agreements, the
Companies agreed to provide medical insurance coverage to Funk and his spouse
and to pay premiums on certain split-dollar life insurance policies owned by
irrevocable life insurance trusts established by Funk in 1988.
2. Trust #1 and Trust #2 each own a policy of insurance on the life of
Funk in the face amount of $250,000 (the "Policies"). Trust #1, Trust #2, and
DECORP are parties to Split Dollar Insurance Plan agreements entered into
November 10, 1988 (the "Plans"), with Northwestern Mutual Life Insurance
Company as the insurer ("Insurer"), and Funk and his spouse as the insureds.
Under the Plans, the Companies have paid approximately $176,000 in advance
premiums since the inception of the Plans. The present cash surrender value
of the Policies is approximately $140,000.
3. The Companies have this date entered into an Agreement and Plan of
Merger ("Merger Agreement") with Interpore International ("Successor"),
whereby a subsidiary of Successor will merge into DECORP, with DECORP surviving
and the stockholders of DECORP receiving shares of stock of Successor for their
shares of DECORP as outlined in the Merger Agreement.
4. The parties desire to terminate the Employment Agreements and the Plans
pursuant to the terms and conditions provided herein conditioned and
effective upon the consummation of the proposed merger with Successor as set
forth in the Merger Agreement.
STATEMENT OF AGREEMENT
In consideration of the foregoing, the parties agree as follows:
1. TERMINATION OF EMPLOYMENT AGREEMENTS; RESIGNATION. The Companies and
Funk agree that for the good and valuable consideration provided herein, the
Employment Agreements shall be terminated and Funk shall resign as a director,
officer and employee of the Companies as of the Effective Time as defined in
Section 1.2 of the Merger Agreement (the "Effective Date").
2. TERMINATION OF PLANS; ASSIGNMENT OF POLICIES TO DECORP.
(a) Funk, DECORP, Trust #1 and Trust #2 agree to terminate the Plans
as of the Effective Date.
(b) Trust #1 and Trust #2 agree to assign, transfer and convey
their respective ownership interest in the Policies, as of the Effective
Date, to DECORP as complete payment and return of premiums advanced by
the Companies under the Plans.
(c) The Policies shall remain in full force, and Trust #1 and Trust
#2 will have no rights or interests in the Policies or any proceeds from
the Policies after assignment to DECORP.
3. NONCOMPETITION. Funk agrees that for a period beginning on the
Effective Date and ending December 31, 2003:
(a) he will not engage or participate, directly or indirectly,
either as principal, agent, employee, employer, consultant, stockholder
(except as the holder of not more than two percent of the stock of any
publicly traded corporation), or in any other individual or
representative capacity whatsoever, in the operation, management or
ownership of any business, firm, corporation, association, or other
entity engaged in the design, license, manufacture, marketing, or sale
of devices and instruments used in spinal surgery or in any other
business engaged in by DECORP or OHCORP at the Effective Date; and
(b) he will not directly or indirectly, for himself or in conjunction
with or on behalf of any other individual or entity, solicit, diver
take away or endeavor to take away from DECORP or OHCORP any customer,
account or employee of the Company who was a customer, account or
employee of DECORP or OHCORP at any time during the 12 months prior to
the Effective Date.
4. CONSIDERATION. The Companies agree to pay Funk $240,000 on the
Effective Date in immediately available funds constituting lawful money of the
United States of America.
5. ASSIGNMENT. This Agreement is personal to Funk, and Funk may not
assign or delegate any of his rights or obligations hereunder. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of
the respective parties hereto, their heirs, executors, administrators,
successors and assigns.
6. WAIVER. The waiver by either party hereto of any breach or violation
of any provision of this Agreement by the other party shall not operate as or
be construed to be a waiver of any subsequent breach of such waiving party.
7. CONSENT OF JURISDICTION. The parties to this Agreement, jointly and
severally, (a) acknowledge that this Agreement was executed in Franklin County,
Ohio, and (b) consent to the jurisdiction of the Court of Common Pleas for
Franklin County, Ohio, to determine any dispute regarding the performance or
nonperformance of any obligations evidenced by this Agreement or any guarantee
thereof.
8. GOVERNING LAW. This Agreement shall be interpreted, construed and
governed according to the laws of the State of Ohio applicable to contracts
made and to be wholly performed within such state.
9. AMENDMENT. This Agreement may be amended in any and every respect by
agreement in writing executed by both parties hereto.
10. SECTION HEADINGS. Section headings contained in this Agreement are
for convenience only and shall not be considered in construing any provision
hereof.
11. ENTIRE AGREEMENT. This Agreement terminates, cancels and supersedes
all previous agreements relating to the employment of Funk with the Companies,
written or oral, and this Agreement contains the entire understanding of the
parties with respect to the subject matter of this Agreement. This Agreement
was fully reviewed and negotiated on behalf of each party and shall not be
construed against the interest of either party as the drafter of this Agreement.
12. SEVERABILITY. The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability
of any other provisions of this Agreement or parts thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
CROSS MEDICAL PRODUCTS, INC.
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
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Its: President
CROSS MEDICAL PRODUCTS, INC.
an Ohio corporation
By: /s/ Xxxxxx X. Xxxxxx
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Its: President
XXXXXX X. XXXX IRREVOCABLE LIFE
INSURANCE TRUST #1
By: /s/ Xxxxxx X. Xxxxxxxx
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Its: Trustee
XXXXXX X. XXXX IRREVOCABLE LIFE
INSURANCE TRUST #2
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Its: Trustee
/s/ Xxxxxx X. Xxxx
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XXXXXX X. XXXX
