SETTLEMENT AGREEMENT Parties: KCI Europe Holding B.V. Jörg Menten Execution Copy 25 June 2007 Houthoff Buruma N.V.
Exhibit 10.2
Parties:
KCI Europe Holding B.V.
Xxxx Xxxxxx
Execution Copy
25 June 2007
Houthoff Buruma N.V.
X.X. Xxx 00000, 0000 XX Xxxxxxxxx
Xxxxxx Xxxxxxxxxxx 00, Xxxxxxxxx
Parties:
This Agreement ("Agreement") is made between:
I. KCI Europe Holding B.V., having its seat (statutaire zetel) at Zeist, the Netherlands,
and its registered address at Van Heuven Xxxxxxxxxxxx 00, 0000 XX Xxxxxxxxxx, xxx
Xxxxxxxxxxx, which is represented in this matter by Xxxxxxx X. Xxxxxx ("KCI");
II. Xxxx Xxxxxx, born on 28 December 1957, residing at Xxxxxxxxxxxxxxxxx 00, 00000
Xxxxxxxx, Xxxxxxx ("Menten");
Recitals:
A. Menten has been employed by KCI since 1 July 2001, as President KCI International
Division and managing director (statutair bestuurder) of KCI.
B. The current fixed salary of Menten is €273,000 gross per annum inclusive of 8% holiday
allowance.
C. Between the parties a difference of opinion has arisen regarding the policy of KCI,
which has made a productive cooperation impossible. As a consequence KCI has taken
the initiative to terminate the employment agreement with Menten.
D. The parties have agreed that Menten’s corporate and employment positions with KCI and
all other affiliated companies (together the “KCI Group”) will be terminated under the
terms and conditions set forth in this Agreement.
It is hereby agreed as follows:
1. Termination of employment by the court
1.3 Menten may raise a defence against the petition described in clause 1.1 of this Agreement,
but shall do so only as a formality and only for the purpose of preserving the right to
social security benefits. Furthermore, Menten shall timely send a letter to the court stating
that Menten does not require an oral hearing.
2. Resignation from directorships
3. Release of duties
3.1 Menten has been released from his duty to perform activities under the employment
agreement with KCI as per 30 April 2007.
3.2 Menten shall nevertheless cooperate in the best interests of KCI and shall continue to
provide services as of the date of this Agreement and until the Separation Date to ensure a
proper transfer of tasks and responsibilities.
4. Salary and benefits up to the Separation Date
4.1 Until 1 May 2007 Menten’s fixed salary and the usual allowances will be paid by KCI in
the normal way.
4.2 From 1 May 2007 until the Separation Date Menten’s fixed salary solely including the
allowances relating to remuneration (this is limited to health insurance (including
disability insurance), holiday and pension allowances) will be paid by KCI. Menten can
continue to use his Company Car, phone, laptop and company credit card (for company
car related purposes only) during this period.
5. Final payment
5.1 Within one month after the Separation Date, KCI will effect a normal final payment
(eindafrekening).
6. Severance payment
6.1 Within one month after the Separation Date, KCI will pay Menten a lump sum amount of
€484,000 (in writing: four hundred eigthy four thousand Euro) gross.
6.2 KCI will pay the lump sum amount in the manner requested by Menten. The manner
chosen by Menten for making payment must be in accordance with national and
international tax legislation and regulations and must not result in any cost or expense to
KCI.
6.3 If Menten requests payment in the form of an annuity (stamrecht), KCI shall make the
severance payment to Menten in the form of an annuity (or arrange for this to be done), as
allowed under article 11(1)(g) of the Wages and Salaries Tax Act (Wet op de
Loonbelasting 1964) and shall, at the request of Menten, place this annuity with an insurer
that is duly authorised for this purpose under the Wages and Salaries Tax Act.
If the aforementioned annuity is placed with a professional insurer,
KCI is not required to
pay the gross amount to the insurer until KCI has received a written statement from the
insurer stating that the amount will be used exclusively for an annuity that is in
compliance with article 11(1)(g) of the 1964 Wages and Salaries Tax Act (Wet op de
Loonbelasting 1964) and that the payment gives KCI a full and final discharge with
regard to the payment.
If the aforementioned annuity is placed with another permitted type of insurer (i.e. a
stamrecht-BV) (the “Annuity Company”), KCI is not required to make payment until
after receiving a written statement from the tax inspector that KCI may make payment
without deducting payroll taxes. If the tax inspector does not provide that written
statement for no reason other than that such permission is, in the opinion of the tax
inspector, not required because of an exemption for an annuity, and if it has not been
demonstrated that the tax inspector does not have any substantive objection, KCI is not
required to make payment until an annuity agreement that is to the satisfaction of KCI and
that states that the annuity meets the requirements of article 11(1)(g) of the Wages and
Salaries Tax Act has been signed by Menten, KCI and the Annuity Company. This
annuity agreement must include a clause in which Menten and the Annuity Company
irrevocably indemnify KCI for any amount claimed by the tax authorities with respect to
the compensation, including interest, penalties, expenses and costs reasonably incurred to
challenge the claim of the tax authorities. Further, this annuity agreement contains a
clause stating that, upon payment to the Annuity Company of the gross amount agreed
upon, Menten gives KCI a full and final discharge of the obligation to pay the
compensation as meant in clause 2.1 of this Agreement.
7.1 In view of Menten leaving KCI after 1 July 2007, Menten will in accordance with past
practice be entitled to a pro rated bonus for the year 2007. The pro rated bonus for
the
year 2007 amounts in aggregate to €109,000 (in writing: a hundred and nine
thousands
Euro) gross. Menten will not be entitled to any other bonus and hereby
unconditionally
and irrevocably waives any other bonus entitlements he has or may have.
8.1 Menten will use up all his remaining vacation days before the Separation Date. In any
case Menten will be deemed to have used up all his vacation entitlements by this date.
9. Company property and company car
9.1 Menten will return to KCI everything that KCI provided or made available to Menten in
relation to the employment agreement (amongst others the Company Car, phone and
laptop). Menten will return everything in good
condition not later than the Separation
Date.
10.1 KCI shall comply with all employment-related and termination-related obligations that it
has towards Menten under the Pension Act (Pensioenwet) and the applicable pension or
savings scheme. Menten hereby acknowledges that he has been informed that he has the
option of transferring the pension.
11. Non-competition and penalty clause
11.2 This obligation only applies to the above-mentioned activities or involvement of KCI in
the field of wound care, wound care surfaces, or any businesses in which KCI operates as
of 30 April 2007.
11.3 If Menten does not fulfil his obligations under clause 11.1 of this Agreement, Menten will
to the extent required notwithstanding
Section 7:650, paragraphs 3, 4 and 5, of the Dutch
Civil Code (“DCC”) and without notice of default, be subject to the requirement to pay to
KCI a penalty of €10,000 for each violation and also a penalty of €1,000 per day for each
day that Menten remains, despite a warning, in violation of the aforementioned
obligations, none of which will prejudice the right of KCI to claim full compensation
instead of the penalty payments.
12. Confidentiality clause and penalty clause
12.1 The confidentiality clause and the penalty clause that KCI and Menten have agreed to and
that are contained in the employment agreement (schedule 1 employment agreement dated
1 July 2001) will remain fully in effect after the date of termination of the employment
agreement.
13. Non-solicitation clause and penalty clause
13.1 The non-solicitation clause and the penalty clause that KCI and Menten have agreed to
and that are contained in the employment agreement (schedule 1 employment agreement
dated 1 July 2001) will be prolonged until 30 April 2008 and will remain fully in
effect
until that time.
14. Stock options and restricted shares
14.1 In accordance with the applicable option plans, award agreements and other option rules,
Menten has had 30 days to exercise any vested stock options as per 30 April 2007. Any
stock options which were unvested as of 30 April 2007 and any restricted shares for
which restrictions were still in place on 30 April 2007 have expired and have become null
and void on 30 April 2007.
15.1 Any internal or external announcement regarding the departure of Menten shall only be
made by the mutual consent of KCI and Menten.
16.1 KCI and Menten shall not disclose any information to any third party regarding the
existence or the contents of this Agreement, unless there is a statutory obligation to do so.
17.1 The parties will in the future behave in a good and careful manner towards the other party.
They will not refer to the other party vis-à-vis other parties in a negative way. On
the side
of Menten this obligation relates to KCI and its affiliated companies.
18. Legal costs
18.1 Within four weeks after receipt of a well specified invoice, KCI will pay for the legal
costs of Menten till a maximum of €5,000 exclusive of VAT and inclusive of office
costs.
19. Costs tax filing obligations
20. KCI will pay for the services of PricewaterhouseCoopers, both in the Netherlands as well
as in Germany, to assist Menten with his tax filing obligations for 2007 until his 2007 tax
returns have been filed to the Dutch and German tax authorities.
21. Indemnification
21.1 Subject to the provisions of this Agreement, KCI will hold harmless Menten from and
against any claims, damages, penalties, fines, liabilities, obligations, losses, costs
and
expenses (collectively “Damages”) made against or incurred or suffered
by Menten, other
than damages from KCI, in or outside the Netherlands, as a result of or arising out of
any
acts of decisions (including any failure to act or decide) of Menten in his capacity
of
managing director (statutair bestuurder) of KCI and its affiliated companies, except
if and
to the extent that such Damages and/or facts or circumstances that will or may give rise
to
any such Damages are caused by intent (opzet) or deliberate recklessness
(bewuste
roekeloosheid) according to Section
7:661 DCC or, in connection with a fact or
circumstance that Menten had actual knowledge of, constitute serious misconduct
(ernstig
verwijt) as such notion is
interpreted in the context of Section 2:9 DCC.
21.2 The indemnification set out in clause 21.1 will not in any way prejudice or mitigate any
rights or recovery which Menten may have against the liability insurer and/or other
third
party in relation to the Damages or the facts or circumstances that will or may give rise
to
any such Damages, nor will this indemnification in any way prejudice or mitigate the
obligation of Menten to seek any such recovery, if available.
21.3 To the extent that Menten recovers any monies in relation to the same matter from the
liability insurer or any other third party, Menten will account to KCI for all the amount
so
received or, if less, the amount of money paid by KCI by way of indemnity.
22. Discharge
22.1 Upon compliance with each provision in this Agreement, each party grants the other a full
and final discharge, except for possible redress for Dutch wage tax (loonheffing) directly
related to the salary over the months July, August and September 2007 and the pro rated
bonus for 2007, with respect to the employment agreement and the termination thereof.
On the side of Menten this discharge relates to KCI and its affiliated companies and the
discharge is inclusive of all possible obligations of KCI under the employment
agreement
to pay Menten a severance package or a compensation. KCI shall put the resolution for
discharge on the agenda of its annual general meeting along with the annual accounts.
Discharge will not be withheld on unreasonable grounds and KCI currently does not
have
knowledge of any fact or circumstance that may bar such discharge.
23. Full and binding nature of Agreement
23.1 This Agreement constitutes the entire agreement between the parties with respect to the
termination of the employment agreement between them. This Agreement replaces all
previous agreements, which are therefore no longer valid.
23.2 If the decision of the court differs from what the parties have agreed upon in this
Agreement, including with regard to compensation, the termination date or anything else,
the parties shall treat the decision of the court in this matter as non-binding and this
Agreement shall remain valid and binding upon them. The parties waive any right to
enforce any such decision.
24. Miscellaneous
24.1 The parties hereby irrevocably waive the right to seek rescission and/or annulment of this
Agreement.
24.2 This agreement constitutes a settlement agreement (vaststellingsovereenkomst) in
accordance with Section 7:900 of the DCC and further.
25. Governing law
25.1 This Agreement will be governed by the laws of the Netherlands.
26. Competent Court
26.1 In accordance with Section 23 and 21 of the EC Execution Regulation (EEX-verordening),
the parties hereby explicitly agree that all disputes between them including the pro
forma
procedure mentioned in clause 1 of this Agreement will be brought before the Cantonal
Court in Amsterdam, the Netherlands.
In witness whereof, agreed upon and signed in two counterparts by:
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/s/ Xxxxxxx X. Xxxxxx |
/s/ Xxxx Xxxxxx |
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KCI Europe Holding B.V. |
Xxxx Xxxxxx |
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Name: Xxxxxxx X. Xxxxxx |
Place: Amsterdam |
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Position: Sr. Vice President, General Counsel |
Date: June 25, 2007 |
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Place: Amsterdam |
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Date: June 25, 2007 |
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