Dear__________,
Exhibit 10.1
March 4, 2011
Dear__________,
This letter agreement confirms the material compensation terms of your continued employment
with NuVasive. This letter agreement supersedes all prior agreements relating to your compensation
arrangements and is in addition to any and all benefits that are made generally available to
NuVasive employees. It is also in addition to benefits available to you as an executive of
NuVasive. Defined terms used herein have the meanings set forth in the attached Appendix of
Defined Terms.
This letter agreement has no impact on other types of agreements or arrangements between you
and NuVasive, including agreements related to confidentiality, intellectual property ownership,
non-solicitation or non-competition obligations, etc. You agree to continue abiding by all such
arrangements, as well as all NuVasive policies and procedures.
Your current annual Base Salary is (See Schedule I) , payable in installments in
accordance with NuVasive’s regular payroll practices. Your Base Salary is subject to change and is
reviewed at least annually. You are eligible to receive an annual performance-based bonus. The
performance bonus is determined at the sole discretion of the Board of Directors and is based on a
combination of company performance and your individual performance. The performance bonus, if any,
that is payable to you shall be paid in the calendar year following the calendar year in which it
is earned, but no later than March 15th of that year. (See Schedule II).
You also have the following benefits related to an Involuntary Termination of your employment
or a Change of Control of NuVasive. In the event of an Involuntary Termination of your
employment, you shall be entitled to the Severance Benefit. In the event of a Change of Control of
NuVasive, you shall be entitled to the Change of Control Benefit. In addition, the Section 409A
Terms shall be applicable to payments described in that Section.
We look forward to your continued success with NuVasive.
| Truly yours, NUVASIVE, INC. |
||||
| Xxxxxx X. Xxxxxxxx | ||||
I have read and accept the terms of this letter.
| Executive Signature | ||||
“Base Salary” means the executive’s then-current annual base salary.
“Change of Control” means either a Change in Control or Fundamental Transaction, each as defined in
the 2004 Equity Incentive Plan.
“Change of Control Benefit” means the Company Acceleration Plan applies with respect to 50% of
unvested equity awards vesting immediately upon a Change of Control, and the remaining unvested
equity awards vesting in twelve (12) equal monthly installments following the Change of Control;
provided that all unvested equity awards shall immediately vest upon an Involuntary Termination
within twelve (12) months following a Change of Control.
“Company Acceleration Plan” means all equity awards under the Company’s equity compensation plans
(including the 1998 Stock Option/Stock Issuance Plan and 2004 Equity Incentive Plan) have the
following acceleration terms: 50% of all unvested equity awards immediately accelerate upon a
Change of Control, and all remaining equity awards immediately accelerate upon an involuntary
termination of service within eighteen (18) months following such an event.
“Compensation” means Base Salary plus the annual performance bonus most recently paid (even if not
in prior year) prior to the Involuntary Termination.
“Involuntary Termination” means the termination of the executive’s employment, including a
voluntary termination by the executive for Good Reason (as defined below), for reasons other than
death, disability or Cause. “Cause” means any of the following: (i) the executive’s repeated
failure to satisfactorily perform the executive’s job duties; (ii) the executive’s refusal or
failure to follow lawful directions of the Company’s board of directors; (iii) the executive’s
conviction of a crime involving moral turpitude; or (iv) the executive engaging or in any manner
participating in any activity which is directly competitive or injurious to the Company. “Good
Reason” means a voluntary resignation by the executive following any of the following: (i) a
significant reduction of the executive’s job responsibilities or title; (ii) a requirement (refused
by the executive) that the executive move for his/her principal place of employment more than 50
miles from the then-current principal place of employment (unless such requirement was a condition
of employment); or (iii) a reduction of greater than 15% in the executive’s base pay or bonus
opportunity (where not all executives are similarly affected).
“Section 409A Terms” — Notwithstanding anything in this letter agreement to the contrary, to the
extent required to avoid the imposition of additional taxes and penalties under Section 409A of the
Internal Revenue Code of 1986, as amended, and the guidance promulgated thereunder (collectively
“Section 409A”), no Severance Benefit or similar payment which becomes payable pursuant to this
Agreement on account of executive’s Involuntary Termination shall be paid until executive has
incurred a “separation from service” within the meaning of Section 409A. Furthermore, to the
extent that such amount constitutes a “deferral of compensation,” the Severance Benefit shall be
paid on the later of (i) the first payroll date occurring on or after the 45th day after
the termination giving rise to such payment; and (ii) if executive is a “specified employee”
(within the meaning of Section 409A), the date (the “Delayed Payment Date”) which is the first day
of the seventh month after the date of Executive’s separation from service or, if earlier, the date
of executive’s death following such separation from service. The Delayed
Payment Date rule described in the second clause of the preceding sentence shall apply to all other
payments of “deferred compensation” (as defined by Section 409A) to the extent required by Section
409A. All such amounts that would, but for these provisions, become payable prior to the Delayed
Payment Date will be accumulated and paid on the Delayed Payment Date. The Company intends that
payments will not be subject to taxation under Section 409A. The provisions of this letter
agreement shall be interpreted and construed in favor of satisfying any applicable requirements of
Section 409A. However, the Company does not guarantee any particular tax effect for income
provided to executive pursuant to this letter agreement. In any event, except for the Company’s
responsibility to withhold applicable income and employment taxes from compensation paid or
provided to executive, the Company shall not be responsible for the payment of any applicable taxes
on compensation paid or provided to Executive pursuant to this letter agreement.
“Severance Benefit” upon the Involuntary Termination of the executive’s employment at any time,
severance is equal to 150% of Compensation. Such amount shall be due and payable immediately upon
any such Involuntary Termination and upon the condition that the executive execute NuVasive’s
standard form of release of claims, and that such release of claims becomes effective in accordance
with its terms on or prior to the 45th day following such termination.
SCHEDULE I
| Executive | Annual Base Salary ($) | |||
Xxxxx X. Xxxxxxxxx |
525,000 | |||
Xxxxxxx X. Xxxxxxx |
473,000 | |||
Xxxxxxx Xxxxx |
473,000 | |||
Xxxxx X. Xxxxxx |
420,000 | |||
Xxxxxxx X. Xxxxx |
420,000 | |||
Xxxxx X. Xxxxxxxxxx |
320,000 | |||
Xxxxx X. Xxxxxxxx |
300,000 | |||
SCHEDULE II
The following paragraph applies with respect to Xx. Xxxxxxx:
Additionally, you are eligible to receive, in the discretion of the Board of Directors, an
annual grant of NuVasive equity securities pursuant to the 2004 Equity Incentive Plan with a target
grant of 50,000 restricted stock units representing shares of NuVasive stock in 2012.