EMPLOYMENT AGREEMENT
Exhibit 10.33
This
Employment Agreement (the "Agreement"), entered
into and effective as of April 11, 2008 (the "Effective Date"), is
by and between Orthofix Inc., a Minnesota corporation (the "Company"), and
Xxxxxx Xxxx, an individual (the "Executive").
PRELIMINARY
STATEMENTS
A.
The Company and the Executive are parties to an Amended and Restated Employment
Agreement entered into as of December 7, 2007 and a side letter agreement
related thereto dated December 6, 2007 (together, the "Prior Agreements"),
but desire to replace the Prior Agreements to memorialize the terms of their
relationship in order to retain the continued services of the
Executive.
B.
The Executive desires to render such services, upon the terms and
conditions contained herein.
C.
The Company and the Executive agree and acknowledge that
pursuant to this Agreement the Executive will receive consideration and other
benefits over and above that which he was entitled to receive under the Prior
Agreements and over and above that which he would otherwise be entitled to
receive as compensation for services performed for the Company.
D.
The Company is a subsidiary of Orthofix International N.V., a
corporation organized under the laws of the Netherlands Antilles (the "Parent") for whom
Executive will also perform services as contemplated hereby, and under certain
compensation plans of which Executive shall be eligible to receive compensation,
and Parent is agreeing to provide such compensation and guarantee the Company's
payment obligations hereunder.
E.
Capitalized terms used herein and not otherwise defined have the
meaning for them set forth on Exhibit A attached
hereto and incorporated herein by reference.
The
parties, intending to be legally bound, hereby agree as follows:
I. EMPLOYMENT
AND DUTIES
1.1 Duties. The
Company hereby employs the Executive as an employee, and the Executive agrees to
be employed by the Company, upon the terms and conditions set forth
herein. While serving as an employee of the Company, the Executive
shall serve as the Chief Financial Officer, Treasurer and Assistant Secretary of
the Company, and be appointed to serve as the Chief Financial Officer, Treasurer
and Assistant Secretary of the Parent. The Executive shall have such
power and authority and perform such duties, functions and responsibilities as
are associated with and incident to such positions, and as the Board of
Directors of Parent (the "Board") may from time
to time require of him. The Executive also agrees to serve, if
elected, as an officer or director of any other direct or indirect subsidiary of
the Parent, in each such case at no compensation in addition to that provided
for in this Agreement, but the Executive serves in such positions solely as an
accommodation to the Company and such positions shall grant him no rights
hereunder.
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Exhibit 10.33
1.2 At-will
Employment. The Executive's employment is on an at-will basis
terminable by either party at any time for any or no reason, subject only to the
30-day advance notice of termination provisions set forth in Article
IV. Excluding any periods of vacation, sick leave or disability, the
Executive agrees to devote his full business time, attention and efforts to the
business and affairs of the Company.
II. COMPENSATION
2.1 General. The base salary and
Incentive Compensation (as defined in Section 2.3) payable to the Executive
hereunder, shall be determined from time to time by the Board and paid pursuant
to the Company's customary payroll practices or in accordance with the terms of
Section 2.3.
2.2 Base
Salary. The Executive shall be paid a base salary of no less
than $29,166.67 per month ($350,000 on an annualized basis) while he is employed
by the Company, payable in accordance with the Company's customary payroll
practices.
2.3 Bonus or other Incentive
Compensation. With respect to each fiscal year of the Company
(or portion thereof) during the time the Executive is employed by the Company,
the Executive shall be eligible to receive annual bonus compensation in an
amount based on reasonable goals for the earning of such compensation as may be
determined by the Board from time to time (the "Goals"). Amounts
that may be earned upon attainment of all reasonably achievable annual Goals
will be targeted to equal not less than 50% of the annual base salary in such
fiscal year. The amount of any actual payment under the Bonus Plan
will depend upon the achievement (or not) of the various performance metrics
comprising the Goals, with an opportunity to earn maximum annual bonus
compensation of not less than 75% of annual base salary in such fiscal year
under Parent's Executive Annual Incentive Plan or any successor plan or as may
be determined by the Board from time-to-time (the "Bonus
Plan"). Amounts will be less than either such target if the
Goals are not met as set forth under the terms of the plan. Amounts
payable under the Bonus Plan shall be determined by the Board and shall be
payable following such fiscal year and no later than two and one-half months
after the end of such fiscal year. In addition, the Executive shall
be eligible to receive such additional bonus or incentive compensation as the
Board may establish from time to time in its sole discretion. Any
bonus or incentive compensation under this Section 2.3 under the Bonus Plan or
otherwise is referred to herein as "Incentive
Compensation." Stock-based compensation shall not be
considered Incentive Compensation under the terms of this Agreement unless the
parties expressly agree otherwise in writing.
2.4 Stock
Compensation. As an inducement for the Executive to enter into
this Agreement, on the Effective Date the Executive shall be granted 50,000
stock options (the "Incentive Options")
which shall vest in one-third increments beginning on the first anniversary of
the Effective Date (subject to acceleration of vesting on termination of
employment, as provided below). The Incentive Options shall be
subject in all respects to the terms and conditions of the related stock option
agreement evidencing the Incentive Options, which shall be executed by the
Executive and Parent on the Effective Date. The exercise price of the Incentive
Options shall be determined as of the Effective Date based on the fair market
value of the Parent's common stock in accordance with the Parent's stock option
grant policies.
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Exhibit 10.33
2.5 Additional
Payments. As an inducement for the Executive to enter into
this Agreement, the Company shall pay to the Executive: (a) the Good Reason
Payment (as defined in the Prior Agreements) of US$407,726.00 on the earliest to
occur of (i) January 1, 2009, (ii) the Executive's termination of employment for
any reason other than this death, subject to the provisions of Section 7.16 and
(iii) the Executive's death and (b) the Retention Bonus (as defined in the Prior
Agreements) of US$150,000.00 on July 15, 2008 (other than in the event of a
Voluntary Termination (as defined below) prior to that date or a termination for
Cause). The Good Reason Payment and Retention Bonus shall each be
made in one lump sum. The Company further acknowledges and agrees
that all stock options held by the Executive as of November 19, 2007, were fully
vested and excercisable as of that date (with the extended exercise date
approved by the Company) and may now be exercised by the Executive. The payment
of the Good Reason Payment as described in clause (a) above is pursuant to the
Executive's voluntary election pursuant to Notice 2007-86, Section
3.01.
III. EMPLOYEE
BENEFITS
3.1 General. Subject
only to any post-employment rights under Article V, so long as the Executive is
employed by the Company pursuant to this Agreement, he shall be eligible for the
following benefits to the extent generally available to senior executives of the
Company or by virtue of his position, tenure, salary and other
qualifications. Any eligibility shall be subject to and in accordance
with the terms and conditions of the Company's benefits policies and applicable
plans (including as to deductibles, premium sharing, co-payments or other
cost-splitting arrangements).
3.2 Savings and Retirement
Plans. The Executive shall be entitled to participate in, and
enjoy the benefits of, all savings, pension, salary continuation and retirement
plans, practices, policies and programs available to senior executives of the
Company.
3.3 Welfare and Other
Benefits. The Executive and/or the Executive's eligible
dependents, as the case may be, shall be entitled to participate in, and enjoy
the benefits of, all welfare benefit plans, practices, policies and programs
provided by the Company (including without limitation, medical, prescription,
drug, dental, disability, salary continuance, group life, dependent life,
accidental death and travel accident insurance plans and programs) and other
benefits (including, without limitation, executive physicals and tax and
financial planning assistance) at a level that is available to other senior
executives of the Company.
3.4 Vacation. The
Executive shall be entitled to 4 weeks paid vacation per 12-month
period.
3.5 Expenses. The
Executive shall be entitled to receive prompt reimbursement for all reasonable
business-related expenses incurred by the Executive in performing his duties
under this Agreement. Reimbursement of the Executive for such
expenses will be made upon presentation to the Company of expense vouchers that
are in sufficient detail to identify the nature of the expense, the amount of
the expense, the date the expense was incurred and to whom payment was made to
incur the expense, all in accordance with the expense reimbursement practices,
policies and procedures of the Company.
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Exhibit 10.33
3.6 Key Man
Insurance. The Company shall be entitled to obtain a "key man"
or similar life or disability insurance policy on the Executive, and neither the
Executive nor any of his family members, heirs or beneficiaries shall be
entitled to the proceeds thereof. Such insurance shall be available
to offset any payments due to the Executive pursuant to Section 5.1 of this
Agreement due to his death or disability.
IV. TERMINATION
OF EMPLOYMENT
4.1 Termination by Mutual
Agreement. The Executive's employment may be terminated at any
time by mutual written agreement of the Company and the Executive.
4.2 Death. The
Executive's employment hereunder shall terminate upon his death.
4.3 Termination by the
Company. The Executive understands and acknowledges the
"at-will" status of his employment with the Company. The Company may
terminate the Executive's employment at any time by delivering to the Executive
a Notice of Termination 30 days in advance of the date of termination; provided
that as part of such notice the Company may request that the Executive
immediately tender the resignations contemplated by Section 4.6 and otherwise
cease performing his duties hereunder. The Notice of Termination need
not state any reason for termination and such termination can be for any reason
or no reason (including for Cause). The date of termination shall be
the date set forth in the Notice of Termination.
4.4 Voluntary
Termination. The Executive may voluntarily terminate his
employment at any time by delivering to the Company a Notice of Termination 30
days in advance of the date of termination (a "Voluntary
Termination"). For purposes of this Agreement, a Voluntary
Termination shall include voluntary termination upon retirement in accordance
with the Company's retirement policies. A Voluntary Termination shall
not be considered a breach or other violation of this Agreement.
4.5 Notice of
Termination. Any termination of employment under this
Agreement by the Company or the Executive requiring a notice of termination
shall require delivery of a written notice by one party to the other party (a
"Notice of
Termination"). A Notice of Termination must indicate the date
of termination, which shall comply with the time periods required under this
Article IV and may in no event be earlier than the date such Notice of
Termination is delivered to or received by the party getting the
notice. If the Executive fails to include a date of termination in
any Notice of Termination he delivers, the Company may establish such date in
its sole discretion. The terms "termination" and "termination of
employment," as used herein are intended to mean a termination of employment
which constitutes a "separation from service" under Section 409A.
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4.6 Resignations. Upon
ceasing to be an employee of the Company for any reason, or earlier upon request
by the Company pursuant to Section 4.3, the Executive agrees to immediately
tender written resignations to the Company with respect to all officer and
director positions he may hold at that time with any member of the Parent
Group.
V. PAYMENTS
ON TERMINATION
5.1 Termination other than
Voluntary Termination or for Cause. If at any time the
Executive's employment is terminated pursuant to Sections 4.1 through 4.3 and
for a reason other than termination by the Company for Cause, the Executive
shall be entitled to the following only:
(a) any
unpaid base salary and accrued unpaid vacation then owing through the date of
termination or Incentive Compensation that is as of such date actually earned or
owing under Article II, but not yet paid to the Executive, which amounts shall
be paid to the Executive within 30 days of the date of termination; provided,
however, the Executive shall be entitled to receive the pro rata amount of any
Bonus Plan Incentive Compensation for the fiscal year of his termination of
employment (based on the number of business days he was actually employed by the
Company during the fiscal year in which the termination of employment occurs)
that he would have received had his employment not been terminated during such
year. Nothing in the foregoing sentence is intended to give the
Executive greater rights to such Incentive Compensation than a pro rata portion
of what he would ordinarily be entitled to under the Bonus Plan Incentive
Compensation that would have been applicable to him had his employment not been
terminated, it being understood that Executive's termination of employment shall
not be used to disqualify Executive from or make him ineligible for a pro rata
portion of the Bonus Plan Incentive Compensation to which he would otherwise
have been entitled. The pro rata portion of Bonus Plan Incentive
Compensation shall, subject to Section 7.16, be paid at the time such
Incentive Compensation is paid to senior executives of the Company ("Severance Bonus Payment
Date").
(b) if
termination of employment occurs prior to the payment of the Retention Bonus,
the Retention Bonus, payable in accordance with Section 2.5.
(c) the
Incentive Options shall vest in full and be immediately exercisable,
notwithstanding any language to the contrary appearing in the stock option
agreement relating to the Incentive Options.
(d) to
the fullest extent permitted by the Company's then-current benefit plans,
continuation of coverage (including family coverage) under basic employee group
benefits that are welfare benefits (such as group health and group life
benefits), but not pension, retirement, profit-sharing, severance or similar
compensatory benefits, for the Executive and the Executive's spouse
substantially similar to coverage they were receiving or which they were
entitled to immediately prior to the termination of the Executive's employment
until the Executive's 65th
birthday.
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Exhibit 10.33
In the
event that the terms of an employee welfare plan do not permit the Executive's
continued participation in such plan, the Company agrees as follows: (i) if the
employee welfare benefit plan is a group health plan, the Company will pay the
premiums for COBRA continuation coverage of the Executive and his spouse; (ii)
if the employee welfare benefit plan can be converted to individual coverage for
the Executive and his spouse at a reasonable expense, the Company will assist
the Executive in exercising such conversion rights and will reimburse the
Executive for any conversion costs and or any premium or other coverage costs
incurred for the Executive and his spouse prior to the Executive's 65th
birthday; and (iii) in the event that the employee welfare benefit plan does not
fall under clauses (i) or (ii) of this sentence, or the Company, in its sole
discretion, determines that the cost of conversion to individual coverage is
unreasonable or if this option is otherwise preferable to it, then the Company
will purchase a suitable replacement policy for the Executive and his spouse
(the "Replacement
Policy") which provides coverage for the Executive and his spouse
equivalent to the coverage provided to the Executive and his spouse under the
employee welfare benefit plan on the date of the Executive's termination, and
the Company will pay the premiums on the Replacement Policy through the
Executive's 65th
birthday. In the event of the Executive's death prior to his 65th
birthday, the Company will provide continuation coverage to his surviving spouse
in accordance with the provisions of this subparagraph (d) until the date that
would have been the Executive's 65th
birthday. The Executive agrees to provide any assistance or
information required by the insurer necessary to obtain the Replacement
Policy. In order to receive the benefits provided for in this Section
5.1(d), the Executive or his spouse must continue to make any required
co-payments, deductibles, premium sharing or other cost-splitting arrangements
the Executive was otherwise paying immediately prior to the date of termination
and nothing herein shall require the Company to be responsible for such
items. Payments to the Executive pursuant to this Section 5.1(d)
shall be treated as a series of separate payments for purposes of Section 409A
to the extent applicable thereto. The Executive agrees to indemnify
and hold harmless the Company from any liability, expense, cost or charge
incurred by the Company (including interest and penalties) due to or as a result
of its failure to withhold, pay or remit any applicable tax in connection with
the benefits paid or payable to the Executive under this Section
5.1(d).
(e) the
Good Reason Payment, payable in accordance with Section 2.5.
5.2 Termination for Cause;
Voluntary Termination. If at any time while this Agreement is
in effect the Executive's employment with the Company is terminated for Cause or
pursuant to Section 4.4, the Executive shall be entitled to only the
following:
(a) any
unpaid base salary and accrued unpaid vacation then owing through the date of
termination or Incentive Compensation that is as of such date actually earned or
owing under Article II, but not yet paid to the Executive, which amounts shall
be paid to the Executive within 30 days of the date of
termination. Nothing in this provision is intended to imply that the
Executive is entitled to any partial or pro rata payment of Incentive
Compensation on termination unless the Bonus Plan expressly provides as much
under its specific terms.
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Exhibit 10.33
(b) the
right to exercise any portion of the Incentive Options (or other stock options)
that are already vested as of the date of termination, all to be exercisable in
accordance with the terms of the award documents related thereto.
(c) the
Good Reason Payment, payable in accordance with Section 2.5.
5.3 Release. The
Company's obligation to pay or provide any benefits to the Executive following
termination (other than in the event of death pursuant to Section 4.2) is
expressly subject to the requirement that he execute and not breach or rescind a
release relating to employment matters and the circumstances surrounding his
termination in favor of the members of the Parent Group and their officers,
directors and related parties and agents, in a form acceptable to the Company at
the time of termination of employment.
5.4 Other
Benefits. Except as expressly provided otherwise in this
Article V, the provisions of this Agreement shall not affect the Executive's
participation in, or terminating distributions and vested rights under, any
pension, profit-sharing, insurance or other employee benefit plan of the Parent
Group to which the Executive is entitled pursuant to the terms of such plans, or
expense reimbursements he is otherwise entitled to under Section
3.5.
5.5 No
Mitigation. The parties hereto expressly agree that the
payment of severance compensation in accordance with the terms of this Agreement
will be liquidated damages, and that the Executive shall not be required to seek
other employment, or otherwise, to mitigate any payment provided for
hereunder.
5.6 Limitation; No Other
Rights. Any amounts due or payable under this Article V are in
the nature of severance payments or liquidated damages, or both, and the
Executive agrees that such amounts shall fully compensate the Executive, his
dependents, heirs and beneficiaries and the estate of the Executive for any and
all direct damages and consequential damages that they do or may suffer as a
result of the termination of the Executive's employment, or both, and are not in
the nature of a penalty. Notwithstanding the above, no member of the
Parent Group shall be liable to the Executive under any circumstances for any
consequential, incidental, punitive or similar damages. The Executive
expressly acknowledges that the payments and other rights under this Article V
shall be the sole monies or other rights to which the Executive shall be
entitled to relating to his employment with the Company or any other services
provided to any other member of the Parent Group and such payments and rights
will be in lieu of any other rights or remedies he might have or otherwise be
entitled to. In the event of any termination under this Article V,
the Executive hereby expressly waives any rights to any other amounts, benefits
or other rights, including without limitation whether arising under current or
future compensation or severance or similar plans, agreements or arrangements of
any member of the Parent Group (including as a result of changes in (or of)
control or similar transactions), unless Executive's entitlement to participate
or receive benefits thereunder has been expressly approved by the
Board. Similarly, no one in the Parent Group shall have any further
liability or obligation to the Executive following the date of termination,
except as expressly provided in this Agreement.
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Exhibit 10.33
5.7 No Right to Set
Off. The Company shall not be entitled to set off against
amounts payable to the Executive hereunder any amounts earned by the Executive
in other employment, or otherwise, after termination of his employment with the
Company, or any amounts which might have been earned by the Executive in other
employment had he sought such other employment.
5.8 Adjustments Due to Excise
Tax.
(a) If
it is determined that any amount or benefit to be paid or payable to the
Executive under this Agreement or otherwise in conjunction with his employment
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise in conjunction with his employment) would give
rise to liability of the Executive for the excise tax imposed by Section 4999 of
the Code, as amended from time to time, or any successor provision (the "Excise Tax"), then
the amount or benefits payable to the Executive (the total value of such amounts
or benefits, the "Payments") shall be
reduced by the Company to the extent necessary so that no portion of the
Payments to the Executive is subject to the Excise Tax. Such
reduction shall only be made if the net amount of the Payments, as so reduced
(and after deduction of applicable federal, state, and local income and payroll
taxes on such reduced Payments other than the Excise Tax (collectively, the
"Deductions"))
is greater than the excess of (1) the net amount of the Payments, without
reduction (but after making the Deductions) over (2) the amount of Excise Tax to
which the Executive would be subject in respect of such Payments.
(b) In
the event it is determined that the Excise Tax may be imposed on the Executive
prior to the possibility of any reductions being made pursuant to Section
5.8(a), the Company and the Executive agree to take such actions as they may
mutually agree in writing to take to avoid any such reductions being made or, if
such reduction is not otherwise required by Section 5.8(a), to reduce the amount
of Excise Tax imposed.
(c) The
independent public accounting firm serving as the Company's auditing firm, or
such other accounting firm, law firm or professional consulting services
provider of national reputation and experience reasonably acceptable to the
Company and Executive (the "Accountants") shall
make in writing in good faith all calculations and determinations under this
Section 5.8, including the assumptions to be used in arriving at any
calculations. For purposes of making the calculations and
determinations under this Section 5.8, the Accountants and each other party may
make reasonable assumptions and approximations concerning the application of
Section 280G and Section 4999. The Company and Executive shall
furnish to the Accountants and each other such information and documents as the
Accountants and each other may reasonably request to make the calculations and
determinations under this Section 5.8. The Company shall bear all
costs the Accountants incur in connection with any calculations contemplated
hereby.
VI. PROTECTIVE
PROVISIONS
6.1 Noncompetition. Without
the prior written consent of the Board (which may be withheld in the Board's
sole discretion), so long as the Executive is an employee of the Company or any
other member of the Parent Group and for a one-year period thereafter, the
Executive agrees that he shall not anywhere in the Prohibited Area, for his own
account or the benefit of any other, engage or participate in or assist or
otherwise be connected with a Competing Business. For the avoidance
of doubt, the Executive understands that this Section 6.1 prohibits the
Executive from acting for himself or as an officer, employee, manager, operator,
principal, owner, partner, shareholder, advisor, consultant of, or lender to,
any individual or other Person that is engaged or participates in or carries out
a Competing Business or is actively planning or preparing to enter into a
Competing Business. The parties agree that such prohibition shall not
apply to the Executive's passive ownership of not more than 5% of a
publicly-traded company.
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Exhibit 10.33
6.2 No Solicitation or
Interference. So long as the Executive is an employee of the
Company or any other member of the Parent Group (other than while an employee
acting solely for the express benefit of the Parent Group) and for a one-year
period thereafter, the Executive shall not, whether for his own account or for
the account or benefit of any other Person, throughout the Prohibited
Area:
(a) request,
induce or attempt to influence (i) any customer of any member of the Parent
Group to limit, curtail, cancel or terminate any business it transacts with, or
products or services it receives from or sells to, or (ii) any Person employed
by (or otherwise engaged in providing services for or on behalf of) any member
of the Parent Group to limit, curtail, cancel or terminate any employment,
consulting or other service arrangement, with any member of the Parent Group.
Such prohibition shall expressly extend to any hiring or enticing away (or any
attempt to hire or entice away) any employee or consultant of the Parent
Group.
(b) solicit
from or sell to any customer any products or services that any member of the
Parent Group provides or is capable of providing to such customer and that are
the same as or substantially similar to the products or services that any member
of the Parent Group, sold or provided while the Executive was employed with, or
providing services to, any member of the Parent Group.
(c) contact
or solicit any customer for the purpose of discussing (i) services or products
that are competitive with and the same or closely similar to those offered by
any member of the Parent Group or (ii) any past or present business of any
member of the Parent Group.
(d) request,
induce or attempt to influence any supplier, distributor or other Person with
which any member of the Parent Group has a business relationship or to limit,
curtail, cancel or terminate any business it transacts with any member of the
Parent Group.
(e) otherwise
interfere with the relationship of any member of the Parent Group with any
Person which is, or within one-year prior to the Executive's date of termination
was, doing business with, employed by or otherwise engaged in performing
services for, any member of the Parent Group.
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Exhibit 10.33
6.3 Confidential
Information. During the period of the Executive's employment
with the Company or any member of the Parent Group and at all times thereafter,
the Executive shall hold in secrecy for the Company all Confidential Information
that may come to his knowledge, may have come to his attention or may have come
into his possession or control while employed by the Company (or otherwise
performing services for any member of the Parent
Group). Notwithstanding the preceding sentence, the Executive shall
not be required to maintain the confidentiality of any Confidential Information
which (a) is or becomes available to the public or others in the industry
generally (other than as a result of disclosure or inappropriate use, or
caused, by the
Executive in violation of this Section 6.3) or (b) the Executive is
compelled to
disclose under any applicable laws, regulations or directives of any government
agency, tribunal or authority having jurisdiction in the matter or under
subpoena. Except as expressly required in the performance of his
duties to the Company under this Agreement, the Executive shall not use for his
own benefit or disclose (or permit or cause the disclosure of) to any Person,
directly or indirectly, any Confidential Information unless such use or
disclosure has been specifically authorized in writing by the Company in
advance. During the Executive's employment and as necessary to
perform his duties under Section 1.2, the Company will provide and grant
the Executive access to the Confidential Information. The Executive
recognizes that any Confidential Information is of a highly competitive value,
will include Confidential Information not previously provided the Executive and
that the Confidential Information could be used to the competitive and financial
detriment of any member of the Parent Group if misused or disclosed by the
Executive. The Company promises to provide access to the Confidential
Information only in exchange for the Executive's promises contained herein,
expressly including the covenants in Sections 6.1, 6.2 and 6.4.
6.4 Inventions.
(a) The
Executive shall promptly and fully disclose to the Company any and all ideas,
improvements, discoveries and inventions, whether or not they are believed to be
patentable ("Inventions"), that
the Executive conceives of or first actually reduces to practice, either solely
or jointly with others, during the Executive's employment with the Company or
any other member of the Parent Group, and that relate to the business now or
thereafter carried on or contemplated by any member of the Parent Group or that
result from any work performed by the Executive for any member of the Parent
Group.
(b) The
Executive acknowledges and agrees that all Inventions shall be the sole and
exclusive property of the Company (or member of the Parent Group) and are hereby
assigned to the Company (or applicable member of the Parent
Group). During the term of the Executive's employment with the
Company (or any other member of the Parent Group) and thereafter, whenever
requested to do so by the Company, the Executive shall take such action as may
be requested to execute and assign any and all applications, assignments and
other instruments that the Company shall deem necessary or appropriate in order
to apply for and obtain Letters Patent of the United States and/or of any
foreign countries for such Inventions and in order to assign and convey to the
Company (or any other member of the Parent Group) or their nominees the sole and
exclusive right, title and interest in and to such Inventions.
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Exhibit 10.33
(c) The
Company acknowledges and agrees that the provisions of this Section 6.4 do not
apply to an Invention: (i) for which no equipment, supplies, or facility of any
member of the Parent Group or Confidential Information was used; (ii) that was
developed entirely on the Executive's own time and does not involve the use of
Confidential Information; (iii) that does not relate directly to the business of
any member of the Parent Group or to the actual or demonstrably anticipated
research or development of any member of the Parent Group; and (iv) that does
not result from any work performed by the Executive for any member of the Parent
Group.
6.5 Return of Documents and
Property. Upon termination of the Executive's employment for
any reason, the Executive (or his heirs or personal representatives) shall
immediately deliver to the Company (a) all documents and materials
containing Confidential Information (including without limitation any "soft"
copies or computerized or electronic versions thereof) or otherwise containing
information relating to the business and affairs of any member of the Parent
Group (whether or not confidential), and (b) all other documents, materials
and other property belonging to any member of the Parent Group that are in the
possession or under the control of the Executive.
6.6 Reasonableness;
Remedies. The Executive acknowledges that each of the
restrictions set forth in this Article VI are reasonable and necessary for the
protection of the Company's business and opportunities (and those of the Parent
Group) and that a breach of any of the covenants contained in this Article VI
would result in material irreparable injury to the Company and the other members
of the Parent Group for which there is no adequate remedy at law and that it
will not be possible to measure damages for such injuries
precisely. Accordingly, the Company and any member of the Parent
Group shall be entitled to the remedies of injunction and specific performance,
or either of such remedies, as well as all other remedies to which any member of
the Parent Group may be entitled, at law, in equity or otherwise, without the
need for the posting of a bond or by the posting of the minimum bond that may
otherwise be required by law or court order.
6.7 Extension;
Survival. The Executive and the Company agree that the time
periods identified in this Article VI will be stayed, and the Company's
obligation to make any payments or provide any benefits under Article V shall be
suspended, during the period of any breach or violation by the Executive of the
covenants contained herein. The parties further agree that this
Article VI shall survive the termination or expiration of this Agreement for any
reason. The Executive acknowledges that his agreement to each of the
provisions of this Article VI is fundamental to the Company's willingness to
enter into this Agreement and for it to provide for the severance and other
benefits described in Article V, none of which the Company was required to do
prior to the date hereof. Further, it is the express intent and
desire of the parties for each provision of this Article VI to be enforced to
the fullest extent permitted by law. If any part of this Article VI,
or any provision hereof, is deemed illegal, void, unenforceable or overly broad
(including as to time, scope and geography), the parties express desire is that
such provision be reformed to the fullest extent possible to ensure its
enforceability or if such reformation is deemed impossible then such provision
shall be severed from this Agreement, but the remainder of this Agreement
(expressly including the other provisions of this Article VI) shall remain in
full force and effect.
11
Exhibit 10.33
VII. MISCELLANEOUS
7.1 Notices. Any
notice required or permitted under this Agreement shall be given in writing and
shall be deemed to have been effectively made or given if personally delivered,
or if sent via U.S. mail or recognized overnight delivery service or sent via
confirmed e-mail or facsimile to the other party at its address set forth below
in this Section 7.1, or at such other address as such party may designate
by written notice to the other party hereto. Any effective notice hereunder
shall be deemed given on the date personally delivered, three business days
after mailed via U.S. mail or one business day after it is sent via overnight
delivery service or via confirmed e-mail or facsimile, as the case may be, to
the following address:
If to the
Company:
Orthofix
Inc.
Attn:
General Counsel
The
Storrs Building
Suite
250
00000
Xxxxxx Xxx.
Xxxxxxxxxxxx,
XX 00000
Facsimile: 000-000-0000
E-mail:
xxxxxxxx@xxxxxxxx.xxx
With a
copy which shall not constitute notice to:
Xxxxx
& XxXxxxxx LLP
Pennzoil
Place, South Tower
000
Xxxxxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000-0000
Attention:
Xxxxxxxx X. Xxxxxx
Telephone
No.: (000) 000-0000
Facsimile
No.: (000) 000-0000
E-mail:
Xxxxxxxx.X.Xxxxxx@Xxxxxxxx.xxx
If to the
Executive:
At the
most recent address on file with the Company
With a
copy which shall not constitute notice to:
Ogletree,
Deakins, Xxxx, Xxxxx & Xxxxxxx, P.C.
000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Attention:
Xxxxxx X.Xxxxxxx
Telephone
No.: (000) 000-0000
Facsimile
No.: (000) 000-0000
E-mail: Xxxxxx.Xxxxxxx@Xxxxxxxxxxxxxxx.xxx
12
Exhibit 10.33
7.2 Legal
Fees.
(a) The
Company shall pay all reasonable legal fees and expenses of the Executive's
counsel in connection with the preparation and negotiation of this
Agreement.
(b) It
is the intent of the Company that the Executive not be required to bear the
legal fees and related expenses associated with the enforcement or defense of
the Executive's rights under this Agreement by litigation, arbitration or other
legal action because having to do so would substantially detract from the
benefits intended to be extended to the Executive hereunder. Accordingly, the
parties hereto agree that any dispute or controversy arising under or in
connection with this Agreement shall be resolved exclusively and finally by
binding arbitration in Huntersville, North Carolina, in accordance with the
rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any
court having jurisdiction. The Company shall be responsible for its
own fees, costs and expenses and shall pay to the Executive an amount equal to
all reasonable attorneys' and related fees, costs and expenses incurred by the
Executive in connection with such arbitration unless the arbitrator determines
that the Executive (a) did not commence or engage in the arbitration with a
reasonable, good faith belief that his claims were meritorious or (b) the
Executive's claims had no merit and a reasonable person under similar
circumstances would not have brought such claims. If there is any
dispute between the Company and the Executive as to the payment of such fees and
expenses, the arbitrator shall resolve such dispute, which resolution shall also
be final and binding on the parties, and as to such dispute only the burden of
proof shall be on the Company.
7.3 Severability. If
an arbitrator or a court of competent jurisdiction determines that any term or
provision hereof is void, invalid or otherwise unenforceable, (a) the
remaining terms and provisions hereof shall be unimpaired and (b) such
arbitrator or court shall replace such void, invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the void, invalid or unenforceable term
or provision. For the avoidance of doubt, the parties expressly intend that this
provision extend to Article VI of this Agreement.
7.4 Entire
Agreement. This Agreement represents the entire agreement of
the parties with respect to the subject matter hereof and shall supersede any
and all previous contracts, arrangements or understandings between the Company,
the Parent and the Executive relating to the Executive's employment by the
Company, expressly including the Prior Agreements, which Prior Agreements are
hereby terminated in their entirety and of no further force and effect. The
Executive expressly acknowledges that he has no further rights, and hereby
waives or forfeits any and all rights he may have or may have had, under the
Prior Agreements as a result of its termination hereby, and neither the Company
nor any member of the Parent Group shall have any obligation to make any
payments or satisfy any other liability to him thereunder. Nothing in
this Agreement shall modify or alter the Indemnity Agreement dated August 1,
2005, by and between Parent and the Executive (the "Indemnity Agreement")
or alter or impair any of the Executive's rights under the Plans or related
award agreements. In the event of any conflict between this Agreement
and any other agreement between the Executive and the Company (or any other
member of the Parent Group), this Agreement shall control.
13
Exhibit 10.33
7.5 Amendment; Modification. This
Agreement may be amended at any time only by mutual written agreement of the
Executive and the Company; provided, however, that,
notwithstanding any other provision of this Agreement, the Plans (or any award
documents under the Plans) or the Indemnity Agreement, the Company may reform
this Agreement, the Plans (or any award documents under the Plans), the
Indemnity Agreement or any provision thereof (including, without limitation, an
amendment instituting a six-month waiting period before a distribution) or
otherwise as contemplated by Section 7.16 below.
7.6 Withholding. The
Company shall be entitled to withhold, deduct or collect or cause to be
withheld, deducted or collected from payment any amount of withholding taxes
required by law, statutory deductions or collections with respect to payments
made to the Executive in connection with his employment, termination (including
Article V) or his rights hereunder, including as it relates to stock-based
compensation.
7.7 Representations.
(a) The
Executive hereby represents and warrants to the Company that (i) the execution,
delivery and performance of this Agreement by the Executive do not and shall not
conflict with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which the Executive is a party or by
which he is bound, and (ii) upon the execution and delivery of this Agreement by
the Company, this Agreement shall be the valid and binding obligation of the
Executive, enforceable in accordance with its terms. The Executive
hereby acknowledges and represents that he has consulted with legal counsel
regarding his rights and obligations under this Agreement and that he fully
understands the terms and conditions contained herein.
(b) The
Company hereby represents and warrants to the Executive that (i) the execution,
delivery and performance of this Agreement by the Company do not and shall not
conflict with, breach, violate or cause a default under any material contract,
agreement, instrument, order, judgment or decree to which the Company is a party
or by which it is bound and (ii) upon the execution and delivery of this
Agreement by the Executive, this Agreement shall be the valid and binding
obligation of the Company, enforceable in accordance with its
terms.
7.8 Governing Law;
Jurisdiction. This Agreement shall be construed, interpreted,
and governed in accordance with the laws of the State of North Carolina without
regard to any provision of that State's rules on the conflicts of law that might
make applicable the law of a jurisdiction other than that of the State of North
Carolina. Except
as otherwise provided in Section 7.2, all actions or proceedings arising out of
this Agreement shall exclusively be heard and determined in state or federal
courts in the State of North Carolina having appropriate
jurisdiction. The parties expressly consent to the exclusive
jurisdiction of such courts in any such action or proceeding and waive any
objection to venue laid therein or any claim for forum
nonconveniens.
14
Exhibit 10.33
7.9 Successors. This
Agreement shall be binding upon and inure to the benefit of, and shall be
enforceable by the Executive, the Company, and their respective heirs,
executors, administrators, legal representatives, successors, and
assigns. In the event of the consummation of a reorganization,
merger, consolidation or other business combination or the sale or other
disposition of all or substantially all of the assets of Parent (including
assets that are shares held by Parent in its subsidiaries) (any such
transaction, a "Business Combination"), the provisions of this Agreement shall
be binding upon and inure to the benefit of the parent or entity resulting from
such Business Combination or to which the assets shall be sold or transferred,
which entity from and after the date of such Business Combination shall be
deemed to be the Company for purposes of this Agreement. In the event
of any other assignment of this Agreement by the Company, the Company shall
remain primarily liable for its obligations hereunder; provided, however, that if the
Company is financially unable to meet its obligations hereunder, the Parent
shall assume responsibility for the Company's obligations hereunder pursuant to
the guaranty provision following the signature page hereof. The
Executive expressly acknowledges that the Parent and other members of the Parent
Group (and their successors and assigns) are third party beneficiaries of this
Agreement and may enforce this Agreement on behalf of themselves or the
Company. Both parties agree that there are no third party
beneficiaries to this Agreement other than as expressly set forth in this
Section 7.9.
7.10 Nonassignability. Neither
this Agreement nor any right or interest hereunder shall be assignable by the
Executive, his beneficiaries, dependents or legal representatives without the
Company's prior written consent; provided, however, that nothing
in this Section 7.10 shall preclude (a) the Executive from designating a
beneficiary to receive any benefit payable hereunder upon his death or (b) the
executors, administrators or other legal representatives of the Executive or his
estate from assigning any rights hereunder to the Person(s) entitled
thereto.
7.11 No
Attachment. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation in
favor of any third party, or to execution, attachment, levy or similar process
or assignment by operation of law in favor of any third party, and any attempt,
voluntary or involuntary, to effect any such action shall be null, void and of
no effect.
7.12 Waiver. No
term or condition of this Agreement shall be deemed to have been waived, nor
there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.
15
Exhibit 10.33
7.13 Construction. The
headings of articles or sections herein are included solely for convenience of
reference and shall not control the meaning or interpretation of any of the
provisions of this Agreement. References to days found herein shall be actual
calendar days and not business days unless expressly provided
otherwise.
7.14 Counterparts. This
Agreement may be executed by any of the parties hereto in counterparts, each of
which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
7.15 Effectiveness. This
Agreement shall be effective upon the Effective Date when signed by the
Executive and the Company.
7.16 Code Section
409A.
(a) It
is the intent of the parties that payments and benefits under this Agreement
comply with Section 409A and, accordingly, to interpret, to the maximum extent
permitted, this Agreement to be in compliance therewith. If the
Executive notifies the Company in writing (with specificity as to the
reason therefore) that the Executive believes that any provision of this
Agreement (or of any award of compensation, including equity compensation or
benefits) would cause the Executive to incur any additional tax or interest
under Section 409A and the Company concurs with such belief or the Company
(without any obligation whatsoever to do so) independently makes such
determination, the parties shall, in good faith, reform such provision to try to
comply with Code Section 409A through good faith modifications to the minimum
extent reasonably appropriate to conform with Code Section 409A. To
the extent that any provision hereof is modified by the parties to try to comply
with Code Section 409A, such modification shall be made in good faith and shall,
to the maximum extent reasonably possible, maintain the original intent of the
applicable provision without violating the provisions of Code Section
409A. Notwithstanding the foregoing, the Company shall not be
required to assume any economic burden in connection therewith.
(b) If
the Executive is deemed on the date of "separation from service" to be a
"specified employee" within the meaning of that term under Section
409A(a)(2)(B), then with regard to any payment or the provision of any benefit
that is specified as subject to this Section, such payment or benefit shall be
made or provided at the date which is the earlier of (A) the expiration of the
six (6)-month period measured from the date of such "separation from service" of
the Executive, and (B) the date of the Executive's death (the "Delay
Period"). Upon the expiration of the Delay Period, all payments and
benefits delayed pursuant to this Section 7.16 (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to the Executive in a lump sum, and any
remaining payments and benefits due under this Agreement shall be paid or
provided in accordance with the normal payment dates specified for them
herein. If a payment is to be made promptly after a date, it shall be
made within sixty (60) days thereafter.
16
Exhibit 10.33
(c) Any
expense reimbursement under this Agreement shall be made promptly upon
Executive's presentation to the Company of evidence of the fees and expenses
incurred by the Executive and in all events on or before the last day of the
taxable year following the taxable year in which such expense was incurred by
the Executive, and no such reimbursement or the amount of expenses eligible for
reimbursement in any taxable year, or the in-kind benefits provided, shall
in any way affect the expenses eligible for reimbursement, or the in-kind
benefits to be provided, in any other taxable year, except for any limit on
the amount of expenses that may be reimbursed under an arrangement described in
Code Section 105(b).
7.17 Termination; Survival. This Agreement shall be
deemed terminated and no longer in force or effect when either party terminates
the Executive's employment with the Company pursuant to Article
IV. Notwithstanding the above, in accordance with their respective
terms, Articles V, VI and VII shall survive the termination or
expiration of this Agreement for any reason.
17
Exhibit 10.33
IN WITNESS WHEREOF, the
parties have executed this Agreement as of the Effective Date.
|
ORTHOFIX
INC.
|
EXECUTIVE
|
||
| /s/ Xxxxxxx X. Xxxxx | /s/ Xxxxxx Xxxx | ||
|
Xxxxxx Xxxx,
an individual
|
|||
|
Name:
|
Xxxxxxx X. Xxxxx |
|
|
|
Title:
|
Senior Vice President, General Counsel and Corporate Secretary | ||
Guaranty by
Parent
Parent
(Orthofix International N.V.) is not a party to this Agreement, but joins in
this Agreement for the sole purpose of guaranteeing the obligations of the
Company to pay, provide, or reimburse the Executive for all cash or other
benefits provided for in this Agreement, including the provision of all benefits
in the form of, or related to, securities of Parent and to elect or appoint
Executive to the positions with Parent and provide Executive with the authority
relating thereto as contemplated by Section 1.1 of this Agreement, and to ensure
the Board will take the actions required of it hereby.
ORTHOFIX
INTERNATIONAL N.V.
| /s/ Xxxxxxx X. Xxxxx | ||
|
Name:
|
Xxxxxxx X. Xxxxx | |
|
Title:
|
Senior Vice President, General Counsel and Corporate Secretary | |
18
Exhibit 10.33
EXHIBIT
A
Definitions
For
purposes of this Agreement, the following capitalized terms have the meanings
set forth below:
"Cause" shall mean termination of
the Executive's employment because of the Executive's: (i)
involvement in fraud, misappropriation
or embezzlement related to the business or property of the Company; (ii)
conviction for, or guilty plea to, or plea of nolo contendere to, a felony or
crime of similar gravity in the jurisdiction in which such conviction or guilty
plea occurs; (iii) intentional wrongful disclosure of Confidential Information
or other intentional wrongful violation of Article VI; (iv) willful
and continued failure by the Executive to follow the reasonable instructions of
the Board or Chief Executive Officer; (v) willful commission by the Executive of
acts that are dishonest and demonstrably and materially injurious to a member of
the Parent Group, monetarily or otherwise; (vi) willful or material violation
of, or willful or material noncompliance with, any securities law, rule or
regulation or stock exchange listing rule adversely affecting the Parent Group
including without limitation (a) if the Executive has undertaken to provide any
chief financial officer or principal financial officer certification required
under the Xxxxxxxx-Xxxxx Act of 2002, including the rules and regulations
promulgated thereunder (the "Xxxxxxxx-Xxxxx Act"),
and he willfully or materially fails to take reasonable and appropriate steps to
determine whether or not the certificate was accurate or otherwise in compliance
with the requirements of the Xxxxxxxx-Xxxxx Act or (b) the Executive's willful
or material failure to establish and administer effective systems and controls
applicable to his area of responsibility necessary for the Parent to timely and
accurately file reports pursuant to Section 13 or 15(d) of the Exchange
Act. No act or omission shall be deemed willful or material for
purposes of this definition if taken or omitted to be taken by Executive in a
good faith belief that such act or omission to act was in the best interests of
the Parent Group or if done at the express direction of the Board.
"Code" shall mean the Internal
Revenue Code of 1986, as amended.
"Competing
Business" means
any business or activity that (i) competes with any member of the Parent Group
for which the Executive performed services or the Executive was involved in for
purposes of making strategic or other material business decisions and involves
(ii) (A) the same or substantially similar types of products or services
(individually or collectively) manufactured, marketed or sold by any member of
the Parent Group during the Executive's employment or (B) products or services
so similar in nature to that of any member of the Parent Group during the
Executive's employment (or that any member of the Parent Group will soon
thereafter offer) that they would be reasonably likely to displace substantial
business opportunities or customers of the Parent Group.
"Confidential
Information"
shall include Trade Secrets and includes information acquired by the Executive
in the course and scope of his activities under this Agreement, including
information acquired from third parties, that (i) is not generally known or
disseminated outside the Parent Group (such as non-public information), (ii) is
designated or marked by any member of the Parent Group as "confidential" or
reasonably should be considered confidential or proprietary, or (iii) any member
of the Parent Group indicates through its policies, procedures, or other
instructions should not be disclosed to anyone outside the Parent
Group. Without limiting the foregoing definitions, some examples of
Confidential Information under this Agreement include (a) matters of a technical
nature, such as scientific, trade or engineering secrets, "know-how", formulae,
secret processes, inventions, and research and development plans or projects
regarding existing and prospective customers and products or services, (b)
information about costs, profits, markets, sales, customer lists, customer
needs, customer preferences and customer purchasing histories, supplier lists,
internal financial data, personnel evaluations, non-public information about
medical devices or products of any member of the Parent Group (including future
plans about them), information and material provided by third parties in
confidence and/or with nondisclosure restrictions, computer access passwords,
and internal market studies or surveys and (c) and any other information or
matters of a similar nature.
19
Exhibit 10.33
"Parent
Group" shall mean Parent, together with its subsidiaries including the
Company.
"Person" shall include individuals or entities
such as corporations, partnerships, companies, firms, business organizations or
enterprises, and governmental or quasi-governmental bodies.
"Prohibited
Area" means North
America, South America and the European Union, which Prohibited Area the parties
have agreed to as a result of the fact that those are the geographic areas in
which the members of the Parent Group conduct a preponderance of their business
and in which the Executive provides substantive services to the benefit of the
Parent Group.
"Section
409A" shall mean
Section 409A of the Code and regulations promulgated thereunder (and any similar
or successor federal or state statute or regulations).
"Trade
Secrets" are
information of special value, not generally known to the public that any member
of the Parent Group has taken steps to maintain as secret from Persons other
than those selected by any member of the Parent Group.
20
