EMPLOYMENT AGREEMENT
This employment agreement (this "Agreement") is made as of the 10th day
of September, 2002 by and between Integra LifeSciences Holdings Corporation, a
Delaware Corporation (the "Company") and Xxxxx X. Xxxxx ("Executive").
Background
Executive is currently the Senior Vice President, Finance, of Company.
Company desires to continue to employ Executive, and Executive desires to remain
in the employ of Company, on the terms and conditions contained in this
Agreement. Executive will be substantially involved with Company's operations
and management and will learn trade secrets and other confidential information
relating to Company and its customers; accordingly, the noncompetition covenant
and other restrictive covenants contained in Section 14 of this Agreement
constitute essential elements hereof.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein and intended to be legally bound hereby, the parties
hereto agree as follows:
Terms
1. Definitions. The following words and phrases shall have the meanings
set forth below for the purposes of this Agreement (unless the context clearly
indicates otherwise):
(a) "Base Salary" shall have the meaning set forth in Section 5.
(b) "Board" shall mean the Board of Direcetors of Company, or
any successor thereto.
(c) "Cause," as determined by the Board in good faith,
shall mean Executive has --
(1) failed to perform his stated duties in all material
respects, which failure continues for 15 days after
his receipt of written notice of the failure;
(2) intentionally and materially breached any provision
of this Agreement and not cured such breach (if
curable) within 15 days of his receipt of written
notice of the breach;
(3) demonstrated his personal dishonesty in connection
with his employment by Company;
(4) engaged in willful misconduct in connection with his
employment with the Company;
(5) engaged in a breach of fiduciary duty in connection
with his employment with the Company; or
(6) willfully violated any law, rule or regulation, or
final cease-and-desist order (other than traffic
violations or similar offenses) or engaged in other
serious misconduct of such a nature that his
continued employment may reasonably be expected to
cause the Company substantial economic or
reputational injury.
(d) A "Change in Control" of Company shall be deemed to
have occurred:
(1) if the "beneficial ownership" (as defined in Rule
13d-3 under the Securities Exchange Act of 1934) of
securities representing more than fifty percent
(50%) of the combined voting power of Company Voting
Securities (as herein defined) is acquired by any
individual, entity or group (a "Person"), other than
Company, any trustee or other fiduciary holding
securities under any employee benefit plan of
Company or an affiliate thereof, or any corporation
owned, directly or indirectly, by the stockholders
of Company in substantially the same proportions as
their ownership of stock of Company (for purposes of
this Agreement, "Company Voting Securities" shall
mean the then outstanding voting securities of
Company entitled to vote generally in the election
of directors); provided, however, that any
acquisition from Company or any acquisition pursuant
to a transaction which complies with clauses
(i), (ii) and (iii) of paragraph (3) of this
definition shall not be a Change in Control under
this paragraph (1); or
(2) if individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board")
cease for any reason to constitute at least a
majority of the Board; provided, however, that
any individual becoming a director subsequent to
the date hereof whose election, or nomination for
election by Company's stockholders, was approved
by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be
considered as though such individual were a member
of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial
assumption of office occurs as a result of an actual
or threatened election contest with respect to the
election or removal of directors
or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than
the Board; or
(3) upon consummation by Company of a reorganization,
merger or consolidation or sale or other
disposition of all or substantially all of the
assets of Company or the acquisition of assets or
stock of any entity (a "Business Combination"),
in each case, unless immediately following such
Business Combination: (i) Company Voting
Securities outstanding immediately prior to
such Business Combination (or if such Company
Voting Securities were converted pursuant to
such Business Combination, the shares into which
such Company Voting Securitie were converted) (x)
represent, directly or indirectly, more than 50%
of the combined voting power of the then outstanding
voting securities entitled to vote generally in the
election of directors of the corporation resulting
from such Business Combination (the "Surviving
Corporation"), or, if applicable, a corporation
which as a result of such transaction owns
Company or all or substantially all of Company's
assets either directly or through one or more
subsidiaries (the "Parent Corporation") and (y)
are held in substantially the same proportions after
such Business Combination as they were immediately
prior to such Business Combination; (ii) no Person
(excluding any employee benefit plan (or related
trust) of Company or such corporation resulting
from such Business Combination) beneficially owns,
directly or indirectly, 50% or more of the combined
voting power of the then outstanding voting
securities eligible to elect directors of the
Parent Corporation (or, if there is no
Parent Corporation, the Surviving Corporation)
except to the extent that such ownership of Company
existed prior to the Business Combination; and
(iii) at least a majority of the members of the
board of directors of the Parent Corporation (or,
if there is no Parent Corporation, the Surviving
Corporation) were members of the Incumbent Board at
the time of the execution of the initial agreement,
or the action of the Board, providing for such
Business Combination; or
(4) upon approval by the stockholders of Company of a
complete liquidation or dissolution of Company.
(e) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(f) "Company" shall mean Integra LifeSciences Holdings
Corporation and any corporation, partnership or other
entity owned directly or indirectly, in whole or in
part, by Integra LifeSciences Holdings Corporation.
(g) "Disability" shall mean Executive's inability to
perform his duties hereunder by reason of any
medically determinable physical or mental impairment
which is expected to result in death or which has
lasted or is expected to last for a continuous period
of not fewer than six months.
(h) "Good Reason" shall mean:
(1) a material breach of this Agreement by Company
which is not cured by Company within 15 days of
its receipt of written notice of the breach;
(2) without Executive's express written consent, the
Company reduces Executive's Base Salary or the
aggregate fringe benefits provided to Executive
(except to the extent permitted by Section 5 or
Section 6, respectively) or substantially alters
the Executive's authority and/or title as set
forth in Section 2 hereof in a manner reasonably
construed to constitute a demotion; provided,
Executive resigns within 90 days after the change
objected to; and provided further that neither (i)
` the appointment of a Chief Financial Officer to
whom Executive will report nor (ii) the appointment
of Executive as president of European operations
or similar positions shall be deemed to constitute a
demotion hereunder; or
(3) without Executive's express written consent,
Executive fails at any point during the one-year
period following a Change in Control to hold the
title and authority (as set forth in Section 2
hereof) with the Parent Corporation (or if there is
no Parent Corporation, the Surviving Corporation)
that Executive held with the Company immediately
prior to the Change of Control, provided Executive
resigns within one year of the Change in Control;
(4) Company fails to obtain the assumption of this
Agreement by any successor to Company.
(i) "Principal Executive Office" shall mean Company's
principal office for executives, presently located at
000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000.
(j) "Retirement" shall mean the termination of
Executive's employment with Company in accordance
with the retirement policies, including early
retirement policies, generally applicable to
Company's salaried employees.
(k) "Termination Date" shall mean the date specified in
the Termination Notice.
(l) "Termination Notice" shall mean a dated notice which:
(i) indicates the specific termination provision in
this Agreement relied upon (if any); (ii) sets forth
in reasonable detail the facts and circumstances
claimed to provide a basis for the termination of
Executive's employment under such provision; (iii)
specifies a Termination Date; and (iv) is given in
the manner specified in Section 15(h).
2. Employment. Company hereby employs Executive as Senior Vice
President, Finance, responsible for the Finance Department of the Company, and
Executive hereby agrees to accept such employment and agrees to render services
to Company in such capacity (or in such other capacity in the future as the
Board may reasonably deem equivalent to such position) on the terms and
conditions set forth in this Agreement. Executive's primary place of employment
shall be at the Principal Executive Office and Executive shall report to the
Chief Executive Officer.
3. Term.
(a) Term and Renewal of Agreement. Unless earlier
terminated by Executive or Company as provided in
Section 10 hereof, the term of Executive's employment
under this Agreement shall commence on the date of
this Agreement and terminate on December 31, 2003.
Subject to subsection 3(b), this Agreement shall be
deemed automatically, without further action, to
extend for an additional year on December 31, 2003
and each anniversary thereof.
(b) Annual Review. Prior to December 31, 2003 and each
anniversary thereof, the Board shall consider
extending the term of this Agreement. The term shall
continue to extend in the manner set forth in
subsection 3(a) unless either the Board does not
approve the extension and provides written notice to
Executive of such event, or Executive gives written
notice to Company of Executive's election not to
extend the term. In either case, the written notice
shall be given not fewer than 30 days prior to any
such renewal date. References herein to the term of
this Agreement shall refer both to the initial term
and successive terms.
4. Duties. Executive shall:
(a) faithfully and diligently do and perform all such
acts and duties, and furnish such services as are
assigned to Executive as of the date this Agreement
is signed, and (subject to Section 2) such
additional acts, duties and services as the Board
may assign in the future; and
(b) devote his full professional time, energy, skill
and best efforts to the performance of his duties
hereunder, in a manner that will faithfully and
diligently further the business and interests of
Company, and shall not be employed by or participate
or engage in or in any manner be a part of the
management or operations of any business enterprise
other than Company without the prior consent of the
Chief Executive Officer or the Board, which consent
may be granted or withheld in his or its sole
discretion; provided, however, that notwithstanding
the foregoing, Executive may serve on civic or
charitable boards or committees so long as such
service does not materially interfere with
Executive's obligations pursuant to this Agreement.
5. Compensation. Company shall compensate Executive for his services at
a minimum base salary of $185,000 per year ("Base Salary"), payable in periodic
installments in accordance with Company's regular payroll practices in effect
from time to time. Executive's Base Salary shall be subject to annual reviews,
but may not be decreased without Executive's express written consent (unless the
decrease is pursuant to a general compensation reduction applicable to all, or
substantially all, executive officers of Company). Bonus payments may be made as
determined appropriate by the Board in its sole discretion.
6. Benefit Plans. Executive shall be entitled to participate in and
receive benefits under any employee benefit plan or stock-based plan of Company,
and shall be eligible for any other plans and benefits covering executives of
Company, to the extent commensurate with his then duties and responsibilities
fixed by the Board. Company shall not make any change in such plans or benefits
that would adversely affect Executive's rights thereunder, unless such change
affects all, or substantially all, executive officers of the Company.
7. Vacation. Executive shall be entitled to paid annual vacation in
accordance with the policies established from time to time by the Board, which
shall in no event be fewer than three weeks per annum.
8. Business Expenses. Company shall reimburse Executive or otherwise
pay for all reasonable expenses incurred by Executive in furtherance of or in
connection with the business of Company, including, but not limited to,
automobile and traveling expenses and all reasonable entertainment expenses,
subject to such reasonable documentation and other limitations as may be
established by the Company.
9. Disability. In the event Executive incurs a Disability, Executive's
obligation to perform services under this Agreement will terminate, and the
Board may terminate this Agreement upon written notice to Executive.
10. Termination.
(a) Termination without Salary Continuation. In the
event(i)Executive terminates his employment hereunder
other than for Good Reason, or (ii) Executive's
employment is terminated by Company due to his
Retirement, or death, or for Cause, Executive shall
have no right to compensation or other benefits
pursuant to this Agreement for any period after his
last day of active employment.
(b) Termination with Salary Continuation (No Change in
Control). Except as provided in subsection 10(c) in
the event of a Change in Control, in the event (i)
Executive's employment is terminated by Company for a
reason other than Retirement, death or Cause, or (ii)
Executive terminates his employment for Good Reason,
or (iii) Company shall fail to extend this Agreement
pursuant to the provisions of Section 3, then Company
shall:
(1) pay Executive a severance amount equal to
Executive's Base Salary (determined without regard to
any reduction in violation of Section 5) as of his
last day of active employment; the severance amount
shall be paid in a single sum on the first business
day of the month following the Termination Date; and
(2) maintain and provide to Executive, at no cost to
Executive, for a period ending at the earliest of (i)
the first anniversary of the Termination Date; (ii)
the date of Executive's full-time employment by
another employer; or (iii) Executive's death,
continued participation in all group insurance, life
insurance, health and accident, disability, and other
employee benefit plans in which Executive would have
been entitled to participate had his employment with
Company continued throughout such period, provided
that such participation is not prohibited by the
terms of the plan or by Company for legal reasons.
(c) Termination with Salary Continuation (Change in
Control). Notwithstanding anything to the contrary
set forth in subsection 10(b), in the event within
twelve months of a Change in Control: (i) Executive
terminates his employment for Good Reason, or (ii)
Executive's employment is terminated by Company for a
reason other than Retirement, death or Cause, or
(iii) Company shall fail to extend this Agreement
pursuant to Section 3, then Company shall:
(1) pay Executive a severance amount equal to 2.99
times Executive's Base Salary (determined without
regard to any reduction in violation of Section 5)
as of his last day of active employment; the
severance amount shall be paid in a single sum on the
first business day of the month following the
Termination Date;
(2) maintain and provide to Executive, at no cost to
Executive, for a period ending at the earliest of (i)
the fifth anniversary of the date of this Agreement;
or (ii) Executive's death, continued participation in
all group insurance, life insurance, health and
accident, disability, and other employee benefit
plans in which Executive would have been entitled to
participate had his employment with Company continued
throughout such period, provided that such
participation is not prohibited by the terms of the
plan or by Company for legal reasons; and
(3) pay to Executive all reasonable legal fees and
expenses incurred by Executive as a result of such
termination of employment (including all fees and
expenses, if any, incurred by Executive in contesting
or disputing any such termination or in seeking to
obtain to enforce any right or benefit provided to
Executive by this Agreement whether by arbitration or
otherwise).
(d) Termination Notice. Except in the event of
Executive's death, a termination under this Agreement
shall be effected by means of a Termination Notice.
11. Withholding. Company shall have the right to withhold from all
payments made pursuant to this Agreement any federal, state, or local taxes and
such other amounts as may be required by law to be withheld from such payments.
12. Assignability. Company may assign this Agreement and its rights and
obligations hereunder in whole, but not in part, to any entity to which Company
may transfer all or substantially all of its assets, if in any such case said
entity shall expressly in writing assume all obligations of Company hereunder as
fully as if it had been originally made a party hereto. Company may not
otherwise assign this Agreement or its rights and obligations hereunder. This
Agreement is personal to Executive and his rights and duties hereunder shall not
be assigned except as expressly agreed to in writing by Company.
13. Death of Executive. Any amounts due Executive under this Agreement
(not including any Base Salary not yet earned by Executive) unpaid as of the
date of Executive's death shall be paid in a single sum as soon as practicable
after Executive's
death to Executive's surviving spouse, or if none, to the duly appointed
personal representative of his estate.
14. Restrictive Covenants.
(a) Covenant Not to Compete. During the term of this Agreement
and for a period of one (1) year following the Termination
Date, Executive shall not directly or indirectly:(i) engage,
anywhere within the geographical areas in which Company
is conducting business operations or providing services
as of the date of Executive's termination of employment, in
the development, manufacturing or selling of medical devices
for use by neurosurgeons, or any other business the revenues
of which constituted at least 30% of Company's revenues
during the six (6) month period prior to the Termination Date
(the "Business"); (ii) be or become a stockholder, partner,
owner, officer, director or employee or agent of, or a
consultant to or give financial or other assistance to,
any person or entity engaged in the Business; (iii) seek in
competition with the business of the Company to procure
orders from or do business with any customer of Company; (iv)
solicit or contact with a view to the engagement or
employment by any person or entity of any person who is an
employee of Company; (v) seek to contract with or engage (in
such a way as to adversely affect or interfere with the
business of Company) any person or entity who has been
contracted with or engaged to manufacture, assemble,
supply or deliver products, goods, materials or services to
Company; or (vi) engage in or participate in any effort or
act to induce any of the customers, associates, consultants,
or employees of Company to take any action which might be
disadvantageous to Company; provided, however, that nothing
herein shall prohibit Executive and his affiliates from
owning, as passive investors, in the aggregate not more than
5% of the outstanding publicly traded stock of any
corporation so engaged.
(b) Confidentiality. Executive acknowledges a duty of
confidentiality owed to Company and shall not, at any time
during or after his employment by Company, retain in writing,
use, divulge, furnish, or make accessible to anyone, without
the express authorization of the Board, any trade
secret, private or confidential information or knowledge
of Company obtained or acquired by him while so employed.
All computer software, business cards, telephone lists,
customer lists, price lists, contract forms, catalogs,
Company books, records, files and know-how acquired while an
employee of Company are acknowledged to be the property of
Company and shall not be duplicated, removed from Company's
possession or
premises or made use of other than in pursuit of Company's
business or as may otherwise be required by law or any legal
process, or as is necessary in connection with any adversarial
proceeding against Company and, upon termination of employment
for any reason, Executive shall deliver to Company all copies
thereof which are then in his possession or under his control.
No information shall be treated as "confidential information"
if it is generally available public knowledge at the time of
disclosure or use by Executive.
(c) Inventions and Improvements. Executive shall promptly
communicate to Company all ideas, discoveries and inventions
which are or may be useful to Company or its business.
Executive acknowledges that all such ideas, discoveries,
inventions, and improvements which heretofore have been or
are hereafter made, conceived, or reduced to practice by him
at any time during his employment with Company heretofore
or hereafter gained by him at any time during his employment
with Company are the property of Company, and Executive
hereby irrevocably assigns all such ideas, discoveries,
inventions and improvements to Company foR its sole use and
benefit, without additional compensation. The provisions
of this Section 14(c) shall apply whether such ideas,
discoveries, inventions, or improvements were or are
conceived, made or gained by him alone or with others,
whether during or after usual working hours, whether on or
off the job, whether applicable to matters directly or
indirectly related to Company's business interests
(including potential business interests), and whether or
not within the specific realm of his duties. Executive shall,
upon request of Company, but at no expense to Executive,
at any time during or after his employment with Company,
sign all instruments and documents reasonably requested by
Company and otherwise cooperate with Company to protect
its right to such ideas, discoveries, inventions,
or improvements including applying for, obtaining and
enforcing patents and copyrights thereon in such
countries as Company shall determine.
(d) Breach of Covenant. Executive expressly
acknowledges that damages alone will be an inadequate
remedy for any breach or violation of any of the
provisions of this Section 14 and that Company, in
addition to all other remedies, shall be entitled as
a matter of right to equitable relief, including
injunctions and specific performance, in any court
of competent jurisdiction. If any of the provisions
of this Section 14 are held to be in any respect
unenforceable, then they shall be deemed to extend
only over the maximum period of time, geographic
area, or range of activities as to which they may be
enforceable.
15. Miscellaneous.
(a) Amendment. No provision of this Agreement may be
amended unless such amendment is signed by Executive
and such officer as may be specifically designated by
the Board to sign on Company's behalf.
(b) Nature of Obligations. Nothing contained herein
shall create or require Company to create a trust of
any kind to fund any benefits which may be payable
hereunder, and to the extent that Executive acquires
a right to receive benefits from Company hereunder,
such right shall be no greater than the right of any
unsecured general creditor of the Company.
(c) Prior Employment. Executive represents and warrants
that his acceptance of employment with Company has
not breached, and the performance of his duties
hereunder will not breach, any duty owed by him to
any prior employer or other person.
(d) Headings. The Section headings contained in this
Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation
or this Agreement. In the event of a conflict between
a heading and the content of a Section, the content
of the Section shall control.
(e) Gender and Number. Whenever used in this
Agreement, a masculine pronoun is deemed to include
the feminine and a neuter pronoun is deemed to
include both the masculine and the feminine, unless
the context clearly indicates otherwise. The
singular form, whenever used herein, shall mean or
include the plural form where applicable.
(f) Severability. If any provision of this Agreement or
the application thereof to any person or circumstance
shall be invalid or unenforceable under any
applicable law, such event shall not affect or render
invalid or unenforceable any other provision of this
Agreement and shall not affect the application of any
provision to other persons or circumstances.
(g) Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the parties hereto
and their respective successors, permitted assigns,
heirs, executors and administrators.
(h) Notice. For purposes of this Agreement, notices and
all other communications provided for in this
Agreement shall be in writing
and shall be deemed to have been duly given if
hand-delivered, sent by documented overnight delivery
service or by certified or registered mail, return
receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
To the Company:
Integra LifeSciences Holdings Corporation
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: President
With a copy to:
The Company's General Counsel
To the Executive:
Xxxxx X. Xxxxx
Chez Xxxxxxx Xxxxxxx
00 Xxxxxx Xx. Xxxx
00000 Xxxxxx, Xxxxxx
(i) Entire Agreement. This Agreement sets forth the
entire understanding of the parties and supersedes
all prior agreements, arrangements and
communications, whether oral or written, pertaining
to the subject matter hereof.
(j) Governing Law. The validity, interpretation,
construction and performance of this Agreement shall
be governed by the laws of the United States where
applicable and otherwise by the laws of the State of
New Jersey.
IN WITNESS WHEREOF, this Agreement has been executed as of the
date first above written.
INTEGRA LIFESCIENCES HOLDINGS EXECUTIVE
CORPORATION
By: /s/ Xxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxx
Its: President and Chief Executive Officer
