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EXHIBIT 10.22
LETTER AGREEMENT
BETWEEN XXXXXXX X. XXXXX
AND THE COMPANY DATED
MAY 15, 1997
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EXHIBIT 10.22
May 15, 1997
Xx. Xxxxxxx X. Xxxxx, Xx.
0 Xxx Xxxx
Xxxxx, XX 00000
Dear Xxx:
After a thorough review of your qualifications, I am pleased to offer you the
position of President, Image Guided Surgery of Sofamor Xxxxx Group, Inc. This
position will report to Xxx Xxxxxxx and assumes you will be available to begin
full-time employment on or before August 1, 1997. The major points of the offer
are outlined in the paragraphs below and reflect the verbal agreement we reached
on May 12.
SALARY
Your bi-weekly salary will be $7,692.30. The salary will remain at this level
unless increased by the Compensation Committee at that committee's annual
review. This review process occurs in the fourth quarter of each year for
compensation changes for the following year.
BONUS
As agreed, you will participate in the Executive Level of the Management Bonus
Program beginning in 1997. Your bonus plan will be consistent with the overall
company program and based upon EVA (economic value added) performance. A minimum
bonus of $100,000 for 1997 will be guaranteed based on a start date of not later
than August 1, 1997.
STOCK OPTIONS
Sofamor Xxxxx Group, Inc., is granting you options on 120,000 shares of Sofamor
Xxxxx Group, Inc., common stock at the closing price on May 12. These options
will be non-qualified options.
The stock will vest one-fifth each year over five years beginning on the first
anniversary date of the grant. The vesting is contingent upon your continued
employment with Sofamor Xxxxx
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Group, Inc. Details of the option grant will be contained in your Employment
Agreement. All other terms of the options are contained in the Company's Long
Term Incentive Plan.
RELOCATION
Sofamor Xxxxx Group, Inc., will assist you with your relocation to Memphis,
Tennessee, as indicated below:
1. House Hunting Trip Expenses, Sofamor Xxxxx Group, Inc., will pay and/or
reimburse you for the cost of your family's house hunting trips from
Acton to Memphis. This reimbursement will include transportation, car
rental, lodging, meals, and other reasonable expenses.
2. Moving Cost. Sofamor Xxxxx Group, Inc., will pay and/or reimburse you for
the cost of packing, transporting, storing, and unpacking your household
goods from Acton to Memphis. Sofamor Xxxxx will further pay the cost of
transporting two automobiles, should that be necessary.
3. Real Estate Commission. Sofamor Xxxxx Group, Inc., will reimburse you for
the real estate commission on the sale of your Acton home, not to exceed
6% of the sale price.
4. Closing Cost. Sofamor Xxxxx Group, Inc., will reimburse you for any
closing cost, appraisals, and legal fees associated with the sale of your
current residence and the purchase of your new home in Memphis.
This total cost is not to exceed $25,000.
S. Sale of Massachusetts Home. In the event you are unable to sell your home
in Massachusetts, Sofamor Xxxxx Group, Inc., will purchase or cause to
have purchased such house. The purchase price shall be the average of
three appraisals, provided by mutually agreeable appraisal firms. The
Company will also pay for the appraisal costs.
6. Dual Temporary Living Expenses. Sofamor Xxxxx Group, Inc., agrees to pay
dual temporary living expenses of $3,000 per month for a maximum of six
months.
7. Payment of Tax Liability, In the event that you incur any additional
federal or state income tax liability because the relocation expenses are
treated as income to you, are not deductible and are taxable, Sofamor
Xxxxx Group, Inc., agrees to pay (a) a dollar amount equal to the tax
liability, and (b) an amount equal to the tax liability on the dollar
amount determined under 7(a). The total amount calculated under 7 shall
be paid by Sofamor Xxxxx Group, Inc., directly to the United States
Internal Revenue Service and the Massachusetts Department of Revenue, and
will appear on a form W-2 that Sofamor Xxxxx Group, Inc., will prepare
and deliver to your as appropriate.
8. Repayment of Relocation Expenses. You acknowledge and agree that these
relocation expenses are integral parts of Sofamor Xxxxx Group, Inc.'s
offer of employment to you and that Sofamor Xxxxx Group, Inc., is
advancing and/or spending substantial funds to relocate
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you and your family to Memphis, Tennessee. In consideration thereof, you
agree that if you voluntarily leave Sofamor Xxxxx Group, Inc., within two
(2) years of your employment date, then you agree to repay Sofamor Xxxxx
Group, Inc., all relocation expenses paid and/or reimbursed under the
terms of our offer letter.
As a full-time employee and President, Image Guided Surgery of Sofamor Xxxxx
Group, Inc., you will receive the following benefits:
1. Medical insurance coverage subject to a 90-day probationary period.
Should you decide to continue your current medical coverage for the
90-day probationary period, Sofamor Xxxxx Group, Inc., will reimburse you
for the medical insurance premiums paid by you during this period.
Pre-existing medical conditions will be covered by this medical
insurance.
2. Life insurance coverage equal to two times your annual salary, subject to
a 90-day probationary period.
3. Short-term and long-term disability.
4. Eligibility for 401(k) Tax Deferred Savings Plan after six (6) months of
employment.
5. Eligibility for the Sofamor Xxxxx Group, Inc. Employee Stock Purchase
plan after six (6) months of employment and per the Plan's enrollment
requirements.
6. At least four weeks vacation per year.
7. Payment or reimbursement for business related club dues or cellular phone
charges of $300.00 per month.
8. Spouse travel of $4,000.00 per year.
9. Subscription reimbursement of $300.00 per year.
You will be an employee at will; either you or Sofamor Xxxxx Group, Inc., may
terminate your employment at any time for any reason subject to the conditions
of your Employment Agreement. Sofamor Xxxxx Group, Inc., reserves the right to
modify or eliminate any benefits, policies, plans or programs at any time for
any reason with or without notice unless otherwise specified in your Employment
Agreement.
Sofamor Xxxxx Group, Inc., will assume responsibility for the handling of any
issue raised by a third party that relates to your taking the position of
President, Image Guided Surgery of Sofamor Xxxxx Group, Inc.
Sofamor Xxxxx Group, Inc.'s Board of Directors, Xxx Xxxxxxx, Xxx Xxxxxxx and I
are enthusiastic about having you as a senior executive of the Company. Please
signify your
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acceptance of our offer by signing below and returning one original of this
letter to me at your earliest convenience.
Sincerely,
/s/ Xxx Xxxxxxxx
Xxx Xxxxxxxx
President, Chief Operating Officer
ACCEPTED BY:
/s/ Xxxxxxx X. Xxxxx, Xx. May 29, 1997
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Xxxxxxx X. Xxxxx, Xx. Date
