RESTRICTED UNITS AGREEMENT
AGREEMENT, dated as of December 27, 1997, by and between Integra
LifeSciences Corporation, a Delaware corporation (the "Company") and Xxxxxx X.
Xxxxx ("Executive").
WHEREAS, the Company and Executive have entered into an agreement
(the "Employment Agreement"), dated as of December 27, 1997, pursuant to which
Executive will serve as President and Chief Executive Officer of the Company, on
the terms and conditions set forth and described therein; and
WHEREAS, pursuant to the Employment Agreement the Company has agreed
to grant to Executive an aggregate of 2,000,000 restricted units (the "Units")
representing an equal number of shares of common stock of the Company, par value
$.01 per share ("Common Stock"), on the terms set forth herein.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein shall
have the meaning set forth in the Employment Agreement, unless otherwise
indicated.
2. Grant of Units. Pursuant to the Employment Agreement, Executive
is hereby granted, as of December 27, 1997, deferred compensation in the form of
2,000,000 (two million) Units pursuant to the terms of this Agreement.
3. Dividend Equivalents. Executive shall be paid, on a quarterly
basis with respect to all outstanding Units (as such Units may be adjusted under
Section 6), dividend equivalent amounts equal to the regular quarterly cash
dividend payable to holders of Common Stock (to the extent regular quarterly
cash dividends are paid) as if Executive were an actual shareholder with respect
to the number of shares of Common Stock equal to his outstanding Units. Such
dividend equivalents shall be paid on the same date as the regular quarterly
cash dividend is paid by the Company in respect of the Common Stock.
4. Payments of Units. (a) The shares of Common Stock underlying the
Units shall be paid out to Executive on January 1, 2002, if Executive is still
employed by the Company on December 31, 2001. In the event Executive's
employment with the Company terminates prior to December 31, 2001 or a
Triggering Event occurs, the timing of the payment of the Common Stock
underlying the Units shall be governed by the terms of the Employment Agreement.
(b) Any shares of Common Stock delivered shall be deposited in an
account designated by Executive and maintained at a brokerage house selected by
Executive. Any such shares of Common Stock shall be duly authorized, fully paid
and non-assessable shares, listed with NASDAQ or the principal United States
securities exchange on which the Common Stock
is admitted to trading and registered on the Company Registration Statement, if
registration is requested by Executive.
(c) Except as otherwise provided in this Agreement, Executive shall
not be deemed to be a holder of any Common Stock pursuant to a Unit until the
date of the issuance of a certificate to him for such shares and, except as
otherwise provided in this Agreement, Executive shall not have any rights to
dividends or any other rights of a shareholder with respect to the shares of
Common Stock covered by a Unit until such shares of Common Stock have been
issued to him, which issuance shall not be unreasonably delayed.
(d) The Company may require that Executive pay to the Company, or
the Company may otherwise withhold, at the time of payment of the value of a
Unit, any such amount as is required by law or regulation to be withheld for
Federal, state or local income tax or any other taxes incurred by reason of the
payment.
(e) Executive's right to receive payment of any amounts under this
Agreement shall be an unfunded entitlement and shall be an unsecured claim
against the general assets of the Company.
5. Representations. The Company represents and warrants that this
Agreement has been authorized by all necessary action of the Company, has been
approved by the Board and is a valid and binding agreement of the Company
enforceable against it in accordance with its terms and that the shares of
Common Stock described in Section 12 of this Agreement will be listed with
NASDAQ or the principal United States securities exchange on which the Common
Stock is admitted to trading, and will be validly issued, fully paid and
non-assessable shares. The Company further represents and warrants that the
grant of Units under this Agreement has been approved by the Committee and that
the Company will file a Xxxx Xxxxx Xxxxxx application with respect to Executive
on a timely basis, if necessary, in connection with the acquisition of Common
Stock by Executive under this Agreement.
6. Changes in the Common Stock and Adjustment of Units. (a) In the
event the outstanding shares of the Common Stock shall be changed into an
increased number of shares, through a share dividend or a split-up of shares, or
into a decreased number of shares, through a combination of shares, then
immediately after the record date for such change, the number of Units then
subject to this Agreement shall be proportionately increased, in case of such
share dividend or split-up of shares, or proportionately decreased, in case of
such combination of shares. In the event the Company shall issue any of its
shares of stock or other securities or property (other than Common Stock which
is covered by the preceding sentence), in a reclassification of the Common Stock
(including without limitation any such reclassification in connection with a
consolidation or merger in which the Company is the continuing entity), the kind
and number of Units subject to this Agreement immediately prior thereto shall be
adjusted so that the Executive shall be entitled to receive the same kind and
number of shares or other securities or property which the Executive would have
owned or have been entitled to receive after the happening of any of the events
described above, had he owned the shares of the Common Stock represented by the
Units under this Agreement immediately prior to the
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happening of such event or any record date with respect thereto, which
adjustment shall become effective immediately after the effective date of such
event retroactive to the record date, if any, for such event.
(b) In the event the Company shall distribute to all holders of the
Common Stock evidences of its indebtedness or assets (including leveraged
recapitalizations with special cash distributions, but excluding regular
quarterly cash dividends), then in each case the number of Units thereafter
subject to this Agreement shall be determined by multiplying the number of Units
theretofore subject to this Agreement by a fraction, (i) the numerator of which
shall be the then current market price per share of Common Stock (as determined
in paragraph (c) below) on the record date for such distribution, and (ii) the
denominator of which shall be the then current market price per share of the
Common Stock less the then fair value (as mutually determined in good faith by
the Board and the Executive) of the portion of the assets or evidences of
indebtedness so distributed applicable to a share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of distribution retroactive to the record date for
the determination of shareholders entitled to receive such distribution.
(c) For the purpose of any computation under paragraph (b) of this
Section 6, the current market price per share of the Common Stock at any date
shall be deemed to be the average of the daily Stock Prices for 15 consecutive
Trading Days commencing 20 Trading Days before the date of such computation.
"Stock Price" for each Trading Day shall be the "Fair Market Value" of the
Common Stock (as defined in the Company Stock Option Plan, as in effect on the
date of this Agreement) for such Trading Day. "Trading Day" shall be each
Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on which the
Common Stock is not traded on the exchange or in the market which is the
principal United States market for the Common Stock.
(d) For the purpose of this Section 6, the term "Common Stock" shall
mean (i) the class of Company securities designated as the Common Stock at the
date of this Agreement, or (ii) any other class of equity interest resulting
from successive changes or reclassifications of such shares consisting solely of
changes in par value, or from par value to no par value, or from no par value to
par value. In the event that at any time, as a result of an adjustment made
pursuant to the second sentence of Section 6(a) above, the Executive shall
become entitled to Units representing any shares other than the Common Stock,
thereafter the number of such other shares represented by a Unit shall be
subject to adjustment from time to time in a manner and on the terms as nearly
equivalent as practicable to the provisions with respect to the shares contained
in this Section 6, and the provisions of this Agreement with respect to the
shares of Common Stock represented by the Units shall apply on like terms to any
such other shares.
(e) In case of any consolidation of the Company or merger of the
Company with another corporation as a result of which Common Stock is converted
or modified, or in case of any sale or conveyance to another corporation of the
property, assets and business of the Company as an entirety or substantially as
an entirety, the Company shall modify the Units so as to provide the Executive
with Units reflecting the kind and amount of shares and other securities
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and property that he would have owned or have been entitled to receive
immediately after the happening of such consolidation, merger, sale or
conveyance had his Units immediately prior to such action actually been shares
and, if applicable, other securities of the Company represented by those Units.
The provisions of this Section 6(e) shall similarly apply to successive
consolidations, mergers, sales or conveyances.
(f) If the Company distributes rights or warrants to all holders of
its Common Stock entitling them to purchase shares of Common Stock at a price
per share less than the current market price per share on the record date for
the distribution, the Company shall distribute to Executive equivalent amounts
of such rights or warrants as if Executive were an actual shareholder with
respect to the number of shares of Common Stock equal to his outstanding Units.
Such rights or warrants shall be exercisable at the same time, on the same
terms, and for the same price as the rights or warrants distributed to holders
of the Common Stock.
(g) In case any event shall occur as to which the provisions of this
Section 6 are not applicable but the failure to make any adjustment would not
fairly protect the rights represented by the Units in accordance with the
essential intent and principles of this Section 6 then, in each such case, the
Company shall make an adjustment, if any, on a basis consistent with the
essential intent and principles established in this Section 6, necessary to
preserve, without dilution, the rights represented by the Units. The Company
will promptly notify the Executive of any such proposed adjustment.
(h) Notwithstanding anything to the contrary contained herein, the
provisions of Section 6 shall not apply to, and no adjustment is required to be
made in respect of, any of the following: (i) the issuance of shares of Common
Stock upon the exercise of any other rights, options or warrants that entitle
the holder to subscribe for or purchase such shares (it being understood that
the sole adjustment pursuant to this Section 6 in respect of the issuance of
shares of Common Stock upon exercise of rights, options or warrants shall be
made at the time of the issuance by the Company of such rights, options or
warrants, or a change in the terms thereof); (ii) the issuance of shares of
Common Stock to the Company's employees, directors or consultants pursuant to
bona fide benefit plans adopted by the Company's Board; (iii) the issuance of
shares of Common Stock in a bona fide public offering pursuant to a firm
commitment offering; (iv) the issuance of shares of Common Stock pursuant to any
dividend reinvestment or similar plan adopted by the Company's Board to the
extent that the applicable discount from the current market price for shares
issued under such plan does not exceed 5%; and (v) the issuance of shares of
Common Stock in any arm's length transaction, directly or indirectly, to any
party.
(i) Notwithstanding anything in this Agreement to the contrary, in
the event of a spin-off by the Company to its shareholders, Executive's
participation in such spin-off with respect to the Units and the adjustment of
the Units shall be determined in an appropriate and equitable manner, and it is
the intention of the parties hereto that, to the extent practicable, such
adjustment shall include an equity interest in the spin-off entity.
(j) In the event the parties hereto cannot agree upon an appropriate
and equitable adjustment to the Units, the services of an independent investment
banker mutually acceptable to Executive and the Company shall (at the sole
expense of the Company) be retained to determine an appropriate and equitable
adjustment, and such determination shall be binding upon the parties.
7. No Right to Employment. Nothing in this Agreement shall confer
upon Executive the right to remain in employ of the Company or any subsidiary
of the Company.
8. Nontransferability. This Agreement shall not be assignable or
transferable by the Company (other than to successors of the Company) and this
Agreement and the Units shall not be assignable or transferable by the Executive
otherwise than by will or by the laws of descent and distribution, and the Units
may be paid out during the lifetime of the Executive only to him. More
particularly, but without limiting the generality of the foregoing, the Units
may not be assigned, transferred (except as provided in the preceding sentence),
pledged, or hypothecated in any way (whether by operation of law or otherwise),
and shall not be subject to execution, attachment or similar process. Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
the Units contrary to the provisions of this Agreement, and any levy of any
attachment or similar process upon the Units, shall be null and void and without
effect.
9. Arbitration, Legal Fees and Expenses. If any contest or dispute
shall arise between the Company and Executive regarding any provision of this
Agreement, the Company shall reimburse Executive for all legal fees and expenses
reasonably incurred by Executive in connection with such contest or dispute,
pursuant to the provisions of Section 8.1 of the Employment Agreement. The
application of this Section 9 (and Section 8.1 of the Employment Agreement)
shall survive the termination of the Employment Agreement. Such reimbursement
shall be made as soon as practicable following the resolution of such contest or
dispute (whether or not appealed) to the extent the Company receives reasonable
written evidence of such fees and expenses. Any dispute or controversy arising
under or in connection with this Agreement, shall be settled exclusively by
arbitration in Wilmington, Delaware in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect.
Judgment may be entered on the arbitrator's award in any court having
jurisdiction.
10. Entire Agreement. This Agreement and the Employment Agreement
contain all the understandings between the parties hereto pertaining to the
matters referred to herein, and supersede all undertakings and agreements,
whether oral or in writing, previously entered into by them with respect
thereto. The Executive represents that, in executing this Agreement, he does not
rely and has not relied upon any representation or statement not set forth
herein made by the Company with regard to the subject matter, bases or effect of
this Agreement or otherwise.
11. Amendment or Modification; Waiver. No provision of this
Agreement may be amended, modified or waived unless such amendment or
modification is agreed to in writing, signed by the Executive and by a duly
authorized officer of the Company, and such waiver is set forth in writing and
signed by the party to be charged. No waiver by any party
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hereto of any breach by another party hereto of any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same time, any prior time or
any subsequent time.
12. Notices. Any notice to be given hereunder shall be in writing
and shall be deemed given when delivered personally, sent by courier or telecopy
or registered or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other
address as such party may subsequently give notice of hereunder in writing:
To the Executive:
Xxxxxx X. Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile: 000-000-0000
To the Company:
Integra LifeSciences Corporation
000 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Chairman
Facsimile: 000-000-0000
Any notice delivered personally or by courier under this Section 12
shall be deemed given on the date delivered and any notice sent by telecopy or
registered or certified mail, postage prepaid, return receipt requested, shall
be deemed given on the date telecopied or mailed.
13. Severability. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the application
of such provision to such person or circumstances, other than those to which it
is so determined to be invalid and unenforceable, shall not be affected thereby,
and each provision hereof shall be validated and shall be enforced to the
fullest extent permitted by law.
14. Noncontravention. The Company represents that the Company is not
prevented from entering into, or performing, this Agreement by the terms of any
law, order, rule or regulation, its certificate of incorporation or by-laws, or
any agreement to which it is a party.
15. Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement or Executive's
employment to the extent necessary for the intended preservation of such rights
and obligations.
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16. Successors. This Agreement shall inure to the benefit of and be
binding upon each successor of the Company, and upon the Executive's
beneficiaries, legal representatives or estate, as the case may be.
17. Governing Law. This agreement will be governed by and construed
in accordance with the laws of the State of Delaware, without regard to its
conflicts of laws principles.
18. Headings. All descriptive headings of sections and paragraphs in
this Agreement are for convenience of reference only, and they form no part of
this Agreement and shall not affect its interpretation.
19. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
INTEGRA LIFESCIENCES CORPORATION
By:/s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx, Chairman
/s/ Xxxxxx X. Xxxxx
--------------------------------------
Xxxxxx X. Xxxxx
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