CHANGE IN CONTROL AGREEMENT
AGREEMENT by and between Osteotech, Inc., a Delaware corporation (the
"Company"), and Xxxxx Xxxxxxxxxxxx (the "Executive"), dated as of the 8th day of
September, 1997.
The Board of Directors of the Company (the "Board") has determined that it
is in the best interests of the Company and its stockholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change in Control (as defined in Section
1(e)) of the Company. The Board believes it is imperative to diminish the
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change in Control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change in Control, and to provide the
Executive with compensation and benefits arrangements upon a Change in Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and that such compensation and benefits are competitive with
those of other corporations. Therefore, in order to accomplish these objectives,
the Board has caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
For purposes of this Agreement:
(a) An "Affiliate" means any member of the same affiliated group
(within the meaning of Section 1504 of the Internal Revenue Code of 1986,
as amended (the "Code"),determined without regard to Section 1504(b) of the
Code), that includes the Company.
(b) The Executive's "Base Period Compensation" is (i) the average
annual "compensation" (as defined below) which was includible in his gross
income for his base period (i.e., his most recent five taxable years or
such lesser number of taxable years or portions thereof during which the
Executive performed services for the Company ending before the date of the
Change in Control); and (ii) if Executive's base period includes a short
taxable year or less than all of a taxable year, compensation for such
short or
incomplete taxable year shall be annualized for the base period. (In
annualizing compensation, the frequency with which payments are expected to
be made over an annual period shall be taken into account. Thus, any amount
of compensation for such a short or incomplete taxable year that represents
a payment that would not be made more than once per year shall not be
annualized). For purposes of this definition, Executive's "compensation" is
the compensation which was payable to him by the Company or an Affiliate,
determined without regard to the following Sections of the Code: 125
(cafeteria plans), 402(a)(8) (cash or deferred arrangements), 402(h)(1)(B)
(elective contributions to simplified employee pensions), and, in the case
of employer contributions made pursuant to a salary reduction agreement,
403(b) (tax sheltered annuities).
(c) The "Commencement Date" shall mean the first date during the
Change in Control Period (as defined in Section 1(d)) that a Change in
Control (as defined in Section 1(e)) occurs.
(d) The "Change in Control Period" shall mean the period commencing on
the date hereof and ending on the third anniversary of the date hereof;
provided, however, that commencing on the first anniversary of the date
hereof, and on each successive annual anniversary of the date hereof (such
date and each annual anniversary thereof shall be hereinafter referred to
as the "Renewal Date"), the Change in Control Period shall be automatically
extended so as to terminate three years from such Renewal Date, unless at
least sixty (60) days prior to the Renewal Date the Company shall give
notice to the Executive that the Change in Control Period shall not be so
extended.
(e) "Change in Control" shall mean:
(i) a "Board Change" which, for purposes of this Agreement, shall
have occurred if a majority of the seats (not counting vacant seats)
on the Company's Board were to be occupied by individuals who were
neither (A) nominated by a majority of the Incumbent Directors nor (B)
appointed by directors so nominated. An "Incumbent Director" is a
member of the Board who has been either (A) nominated by a majority of
the directors of the Company then in office or (B) appointed by
directors so nominated, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such term is used
in Rule 14a-11 of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) or other actual
or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
(ii) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of
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beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of a majority of the then outstanding voting
securities of the Company (the "Outstanding Company Voting
Securities"); provided, however, that the following acquisitions shall
not constitute a Change in Control: (A) any acquisition by the
Company, or (B) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (C) any public offering,
private placement or other issuance by the Company of its voting
securities; or
(iii) a merger or consolidation of the Company with another
entity in which neither the Company nor a corporation that, prior to
the merger or consolidation, was a subsidiary of the Company, shall be
the surviving entity; or
(iv) a merger or consolidation of the Company following which (A)
the Company or a corporation that, prior to the merger or
consolidation, was a subsidiary of the Company shall be the surviving
entity and (B) a majority of the Outstanding Company Voting Securities
is owned by a Person or Persons who were not beneficial owners (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of a
majority of the Outstanding Company Voting Securities immediately
prior to such merger or consolidation; or
(v) a voluntary or involuntary liquidation of the Company; or
(vi) a sale or disposition by the Company of at least 80% of its
assets in a single transaction or a series of transactions (other than
a sale or disposition of assets to a subsidiary of the Company in a
transaction not involving a Change in Control or a change in control
of such subsidiary).
2. Employment Period.
(a) Term of Employment. Commencing on the Commencement Date and ending
on the first anniversary of such date (the "Employment Period"), the
Executive hereby agrees to remain in the employ of the Company, and the
Company hereby agrees to continue the Executive in its employ, in
accordance with, and subject to, the terms and provisions of this
Agreement, in the capacity of Executive Vice President, Sales and
Marketing, responsible for, among other things, the sales and marketing
functions of the Company, and, subject to the general supervision
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of the Chief Executive Officer, such other duties and responsibilities as
are not inconsistent with the express terms of this Agreement.
(b) Position and Duties.
(i) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be in accordance with
Section 2(a) hereof and (B) the Executive's services shall be
performed at the location where the Executive was employed immediately
preceding the Commencement Date or any office which is the
headquarters of the Company and is less than fifteen (15) miles from
such location.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote reasonable attention and time during normal
business hours to the business and affairs of the Company and, to the
extent necessary to discharge the responsibilities assigned to the
Executive hereunder, to use the Executive's reasonable best efforts to
perform faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for
the Executive to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions, and (C) manage personal
investments, so long as such activities do not interfere with the
performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement.
(c) Compensation.
(i) Base Salary.During the Employment Period, the Executive shall
receive an annual base salary ("Annual Base Salary") in an amount at
least equal to that which he was receiving immediately prior to the
Change in Control.
(ii) Incentive, Savings Retirement and Stock Option Plans. During
the Employment Period, the Executive shall be entitled to participate
in all incentive, savings, retirement and stock option plans,
practices, policies and programs applicable generally to other peer
executives of the Company, but in no event shall such plans,
practices, policies and programs provide the Executive with
opportunities and benefits
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less favorable than those in effect and applicable to the Executive
immediately preceding the Change in Control.
(iii) Benefit Plans. During the Employment Period, the Executive
and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental
death and travel accident insurance plans and programs) to the extent
applicable generally to other peer executives of the Company, but in
no event shall such plans, practices, policies and programs provide
the Executive with benefits which are less favorable than such plans,
practices, policies and programs in effect and applicable to the
Executive immediately preceding the Change in Control.
(iv) Expenses. During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable
employment related expenses incurred by the Executive in accordance
with the policies, practices and procedures of the Company which shall
not be less favorable than those in effect immediately preceding the
Change in Control.
(v) Office and Support Staff. During the Employment Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings, and to exclusive personal secretarial and other
assistance, which shall be at least equal to that provided to the
Executive by the Company immediately preceding the Change in Control.
(vi) Vacation. During the Employment Period Executive shall be
entitled to paid vacations at least equal to that to which the
Executive was entitled immediately preceding the Change in Control.
(vii) Options. Upon a Change in Control all options to purchase
shares of the Company's Common Stock held by Executive (the
"Options"), whether or not vested, shall vest and become exercisable
in accordance with their terms immediately prior to the effective date
of such Change in Control (and Executive will be provided a reasonable
opportunity to exercise such Options prior to such effective date),
notwithstanding anything to the contrary contained in the option
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certificates or any plan covering the Options (collectively, the
"Plan"). Upon a Change in Control all Options held by Executive shall
be exercisable in accordance with their terms for such securities or
property to which Executive would have been entitled had Executive
exercised such Options prior to such Change in Control,
notwithstanding anything to the contrary contained in any Plan
covering such Options. Upon a Change in Control pursuant to Section
1(e)(iii) or 1(e)(v), all Options held by Executive, whether or not
vested, shall terminate as of the effective date of such Change in
Control to the extent not previously exercised, provided that
Executive shall have been provided with a reasonable opportunity to
exercise such options prior to such effective date, notwithstanding
anything to the contrary contained in the Plan covering such Options.
Notwithstanding the foregoing, the terms of the Option Agreement for
the option to purchase 50,212 shares of Common Stock granted to the
Executive on July 31, 1997 and not the terms of this Agreement shall
govern with respect to such options in the event of a Change in
Control.
3. Termination of Employment.
(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If
the Company determines in good faith that the Disability of the Executive
has occurred during the Employment Period (pursuant to the definition of
Disability set forth below), it may give to the Executive written notice in
accordance with Section 3(d) of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company
shall terminate effective on the 30th day after receipt of such notice by
the Executive (the "Disability Effective Date"), provided that, within the
thirty (30) days after such receipt, the Executive shall not have returned
to full-time performance of the Executive's duties. For purposes of this
Agreement, "Disability" shall mean a physical or mental condition which
prohibits Executive from performing his duties hereunder for a continuous
six (6) month period or for a total of six (6) months during any eighteen
(18) month period.
(b) Just Cause. Executive's employment may be terminated by the
Company for Just Cause. For purposes hereof, "Just Cause" shall mean:
(i) the commission by Executive of a willful act of material
fraud in the performance of his duties on behalf of the Company; or
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(ii) the conviction of Executive for commission of a felony in
connection with the performance of his duties on behalf of the
Company.
Prior to termination for Just Cause, the Board shall by a majority
vote have declared that Executive's termination is for Just Cause
specifically stating the basis for such determination.
(c) Good Reason. Executive's employment during the Employment Period
may be terminated by Executive with Good Reason. For purposes hereof, "Good
Reason" shall mean:
(i) the assignment to Executive of any duties of lesser status,
dignity and character than his duties immediately prior to the Change
in Control or a substantial reduction in the nature or status of his
responsibilities from those in effect immediately prior to the Change
in Control;
(ii) any failure by the Company to comply with the provisions of
Section 2(c);
(iii) relocation of Executive's office to a location which is
more than fifteen (15) miles from the location in which Executive
principally worked for the Company immediately prior to the Change in
Control; or his being required by the Company in order to perform
duties of substantially equal status, dignity and character to those
duties he performed immediately prior to the Change in Control to
travel on the Company's business to a substantially greater extent
than is consistent with his business travel obligations immediately
prior to a Change in Control;
(iv) the failure by the Company to comply with Section 7(a),
provided that the successor has received at least twenty (20) days'
prior written notice from the Company or the Executive of the
requirements of Section 7(a); or,
(v) the voluntary termination by the Executive for any reason at
any time after the 180th day immediately following a Change in
Control.
For purposes of this Sections 3(c) any good faith determination of
"Good Reason" made by the Executive shall in all cases be conclusive;
provided, however, that for purposes of Sections 3(c)(i), (ii), (iii) and
(iv), Executive shall have given the Company prior written notice thereof
and not less than twenty (20) days to cure such "Good Reason".
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(d) Notice of Termination. Any termination by the Company for Just
Cause or by the Executive for Good Reason shall be communicated by Notice
of Termination to the other party hereby given in accordance with Section
8. For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provision so
indicated and (iii) specifies the Date of Termination (as defined below)
(which date shall be not more than thirty (30) days after the giving of
such notice). The failure by the Executive or the Company to set forth in
the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Just Cause shall not waive any right of the
Executive or the Company hereunder or preclude the Executive or the Company
from asserting such fact or circumstance in enforcing the Executive's or
the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means the date the
Company or the Executive specifies as the date of termination in the Notice
of Termination or if the Executive's employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Effective Date, as the case may be.
4. Obligations of Company upon Termination.
(a) Termination by Company for Just Cause. If at any time on or prior
to the 180th day following the Commencement Date, the Executive's
employment shall be terminated by the Company for Just Cause, then,
Executive shall receive all then accrued pay, benefits, executive
compensation and fringe benefits, including (but not limited to), pro rata
bonus and incentive plan earnings through the Date of Termination, plus the
amount of any compensation previously deferred by the Executive, in each
case to the extent theretofore unpaid. The foregoing payments and benefits
shall be deemed compensation payable for the duties to be performed by
Executive pursuant to Section 2. If at any time after the 180th day
following the Commencement Date, the Executive's employment shall be
terminated by the Company for Just Cause, then the Executive shall be
entitled to the payment and benefits described in Section 4(b), below.
(b) Termination by Executive for Good Reason; Termination by the
Company at Any Time Other Than For Just Cause; Termination by the Company
For Just Cause After the 180th Day Following the Commencement Date;
Termination Upon Expiration of the Employment Period. If (i) the Company
shall terminate the Executive's employment at any time other than for Just
Cause; or, (ii) the Company shall terminate Executive's employment for Just
8
Cause after the 180th day following the Commencement Date; or, (iii) the
Executive shall terminate his employment at any time for Good Reason; or
(iv) the Executive's employment with the Company shall terminate upon the
expiration of the Employment Period, in addition to any other sums,
benefits or compensation otherwise payable to him by the Company:
(i) Executive shall receive, no later than the next pay period
following the Date of Termination, all then accrued pay, benefits,
executive compensation and fringe benefits, including (but not limited
to), his pro rata bonus and incentive plan earnings accrued through
the Date of Termination, plus the amount of any compensation
previously deferred by the Executive, in each case to the extent
theretofore unpaid;
(ii) Executive shall receive, at the Company's expense, medical,
health and disability benefits which are substantially similar to the
benefits the Company is providing him immediately preceding the Change
in Control for a period of thirty-six (36) months immediately
following the Date of Termination;
(iii) Executive shall receive an amount equal to one dollar less
than the sum of (A) 300% of his Base Period Compensation, plus (B)
interest thereon for the period beginning on the Commencement Date
through the date or dates of payment, at a rate equal to 120% of the
applicable Federal rate, determined under Section 1274(d) of the Code,
compounded semiannually.
(iv) Except in the case of a termination by the Company for Just
Cause or a voluntary termination by the Executive in accordance with
Section 3(c)(v), Executive shall receive the balance of all pay,
benefits, compensation and fringe benefits, including (but not limited
to), pro rata salary, bonus and incentive plan earnings payable
through the remainder of the Employment Period; and,
(v) Except in the case of a termination by the Company for Just
Cause or a voluntary termination by the Executive in accordance with
Section 3(c)(v), Executive shall be entitled to a private office with
furnishings and secretarial and other reasonable services for the
period beginning with the Date of Termination and ending on the first
anniversary thereof.
The foregoing payments and benefits shall be deemed compensation
payable for duties to be performed by Executive pursuant to Section 2.
Except for the payments and benefits
9
described in Sections 4(b)(i), 4(b)(ii), and 4(b)(v) the sums due pursuant
to this Section 4(b) shall be paid in one lump-sum payable no later than
sixty (60) days after the Date of Termination. All sums of money due
hereunder shall be subject to appropriate withholding and statutory
requirements. Executive shall not be required to mitigate the amount of any
payment provided for in this Section 4(b) by seeking other employment or
otherwise. Notwithstanding anything stated in this Section 4(b) to the
contrary, Company shall not be required to provide medical, health and/or
disability benefits to the extent such benefits would duplicate benefits
received by Executive in connection with his employment with any new
employer.
The determination of the amounts and benefits payable to the Executive
pursuant to Sections 4(b)(i), 4(b)(iii) and 4(b)(iv) (the "Combined
Amount") shall first be made by the Company in good faith, and the Company
shall notify the Executive of the Combined Amount as soon as possible after
the Date of Termination, but in no event later than forty-five (45) days
prior to the payment date of the sums due under Section 4(b)(iii) and
4(b)(iv). If the Executive disagrees with the Company's determination of
the Combined Amount, then within ten (10) days after the date of such
notification to the Executive, the Executive shall notify the Company of
such disagreement, the extent of such disagreement (the "Disputed Amount")
and the amount that is undisputed (the "Undisputed Amount"). The Undisputed
Amount shall be paid in one lump-sum payable sixty (60) days after the Date
of Termination, subject to appropriate withholding and statutory
requirements. If the Company disagrees with the Executive's determination
of the Combined Amount, then within ten (10) days after the date of such
notification to the Company, it shall furnish Executive with a written
appraisal of the Combined Amounts (the "First Appraisal") prepared by an
independent certified public accountant regularly employed by the Company
(the "First Appraiser"). If Executive disagrees with the amounts determined
pursuant to the First Appraisal, then within ten (10) days after notice of
the First Appraisal, he shall furnish the Company with a written appraisal
of the Combined Amount (the "Second Appraisal") prepared by an independent
certified public accountant (the "Second Appraiser"). Within ten (10) days
after notice of the Second Appraisal, the First Appraiser and the Second
Appraiser shall meet and shall endeavor, within ten (10) days of such
meeting, to agree upon the Combined Amount and notify the Company and the
Executive thereof; provided, however, that if they are unable to agree upon
the Combined Amount, then, within (10) days of such meeting, they shall
engage an independent certified public accountant (the "Third Appraiser")
and notify the Company and the Executive of their engagement of the Third
Appraiser, whose determination of the Combined Amount, if any, shall be
final and conclusive and binding on the Company and the Executive. Within
ten (10) days after notice of such engagement, the Third
10
Appraiser shall determine the Combined Amount and notify the Company and
the Executive of his determination (the "Final Amount"). Except for the
benefits described in Sections 4(b)(ii) and 4(b)(v), the Final Amount, as
adjusted by any prior payment of the Undisputed Amount or any payment made
pursuant to Section 4(b)(i), shall be paid in one lump-sum payable on the
later of (i) sixty (60) days after the Date of Termination, or (ii) twenty
(20) days after notification of the Final Amount, in either case subject to
appropriate withholding and statutory requirements; provided, however, that
notwithstanding the foregoing, the Executive shall have the option to
decline the benefits described in Section 4(b)(ii) no later than ten (10)
days prior to such payment date.
(c) Disability or Death. If the Executive's employment during the
Employment Period is terminated at any time by reason of the Executive's
Disability or death, this Agreement shall terminate without further
obligations to the Executive, his estate or legal representative, as the
case may be, except that the Company shall (i) pay to Executive within
sixty (60) days after the Date of Termination (A) amounts due and owing
under Sections 4(b)(i) and 4(b)(iii) and (B) Executive's Annual Base Salary
for the lesser of the six (6) month period following the Date of
Termination or the remaining portion of the Employment Period, reduced in
the case of Disability by amounts received by Executive under any employee
disability policy maintained by the Company for the benefit of Executive
and (ii) provide Executive, his estate or legal representative, as the case
may be, with the benefits provided by Section 4(b)(ii).
5. Additional Payment
Upon a Change in Control, Executive shall be entitled to a payment (the
"Additional Payment") equal to the product of (A) 64,788 multiplied by (B) the
amount by which (i)(x) the value of the consideration per share received or to
be received by the shareholders of the Company in connection with such Change in
Control event or (y) in the event the Change in Control does not result in any
payment to the shareholders of the Company, the average of the last reported
sale price of the Company's Common Stock for the five (5) trading days
immediately preceding the effective date of such Change in Control, exceeds (ii)
$12.75. Such Additional Payment shall be paid to Executive within five (5)
business days after the effectiveness of such Change in Control, subject to all
withholdings required by law.
6. Nonexclusivity of Rights.
Nothing in this Agreement shall prevent or limit the Executive's continuing
or future participation in any plan, program, policy or practice provided by the
Company and for which
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the Executive may qualify, nor shall anything herein limit or otherwise affect
such rights as the Executive may have under any contract or agreement with the
Company. Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice or
program or contract or agreement, except as explicitly modified by this
Agreement.
7. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or indirect
by purchase, merger, consolidation or otherwise, to all or substantially
all of the business and/or assets of the Company) to expressly assume and
agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had
taken place.
(b) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
8. Notices. All notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be deemed to have
been given when delivered by hand and acknowledged by receipt or when mailed at
any general or branch United States Post Office enclosed in a registered or
certified postpaid envelope and addressed to the address of the respective party
stated below or to such changed address as the party may have fixed by notice.
If to the Company:
Osteotech, Inc.
00 Xxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Corporate Secretary
With a copy to:
Xxxxxx & Whitney LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
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If to the Executive:
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-----------------------------
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9. Miscellaneous. This Agreement may not be modified or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by
Executive and such officers of the Company as may be specifically designated by
its Board. The failure of either party to this Agreement to object to any breach
by the other party or the non-breaching party's conduct or conduct forbearance
shall not constitute a waiver of that party's rights to enforce this Agreement.
No waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of any subsequent
breach by such other party or any similar or dissimilar provisions or conditions
at the same or any prior or subsequent time. Except for that certain employment
agreement dated as of January 1, 1996 and entered into by and between the
Company and the Executive (the "Employment Agreement") and that certain
non-qualified stock option agreement dated as of July 31, 1997 by and between
the Company and the Executive (the "Option Agreement"), no agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The Company and Executive agree that to the extent any
of the terms of the Employment Agreement and this Agreement conflict, it is
their intention that Executive in each case receive the benefits under that
agreement which are most favorable to the Executive. In this regard, it is
expressly agreed that the terms of this Agreement that relate to a Change in
Control (as defined in this Agreement) shall be controlling over the terms of
the Employment Agreement that relate to a Change in Control. It is expressly
agreed that the terms of the Option Agreement relating to the vesting and
exercise of the option represented by such Option Agreement shall be controlling
over the terms of this Agreement that relate to the vesting and exercise of
options. The validity, interpretation, construction and performance of this
Agreement shall be governed by the internal laws of the State of New Jersey,
without giving any effect to any conflict of laws.
10. Severability. The Invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
11. Survival. The obligations of the parties under this Agreement shall
survive the term of this Agreement.
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12. EMPLOYMENT PRIOR TO CHANGE IN CONTROL. THE EXECUTIVE AND THE COMPANY
ACKNOWLEDGE THAT, EXCEPT AS OTHERWISE PROVIDED IN THE EMPLOYMENT AGREEMENT, OR
ANY RENEWAL, EXTENSION OR REPLACEMENT THEREOF, THE EMPLOYMENT OF THE EXECUTIVE
BY THE COMPANY IS, AND PRIOR TO THE COMMENCEMENT DATE WILL CONTINUE TO BE, "AT
WILL" AND, PRIOR TO THE COMMENCEMENT DATE, MAY BE TERMINATED BY EITHER THE
EXECUTIVE OR THE COMPANY AT ANY TIME UPON SIXTY (60) DAYS' PRIOR TO WRITTEN
NOTICE. MOREOVER, IF PRIOR TO THE COMMENCEMENT DATE, THE EXECUTIVE'S EMPLOYMENT
WITH THE COMPANY TERMINATES, THEN THE EXECUTIVE SHALL HAVE NO FURTHER RIGHTS
UNDER THIS AGREEMENT.
OSTEOTECH, INC.
By: /S/XXXXXXX X. XXXXX
--------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and Chief
Executive Officer
EXECUTIVE
/S/XXXXX XXXXXXXXXXXX
--------------------------
Xxxxx Xxxxxxxxxxxx
