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EXHIBIT 10.23
LETTER AGREEMENT
BETWEEN XXXXXXX XXXXX
AND THE COMPANY DATED
JANUARY 9, 1998
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EXHIBIT 10.23
January 9, 1998
Xx. Xxxxxxx Xxxxx
0000 X. Xxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Dear Dick:
After a thorough review of your qualifications, I am pleased to offer you the
position of Executive Vice President, Global Manufacturing & Operations of
Sofamor Xxxxx Group, Inc. In this position you will be the executive in charge
of all of Sofamor Xxxxx'x manufacturing and distribution activities worldwide
and you will be part of the senior management team leading our company in the
years ahead. You will report directly to Xxxxxx Xxxxxxx and will be responsible
for our current Warsaw, Memphis, French and Florida manufacturing and
distribution facilities. The Surgical Navigation Technologies assembly operation
in Colorado will continue to report to Xxx Xxxxx, President, SNT Division.
Based on our conversations, I assume you will be available to begin full-time
employment on or before February 1, 1998. The major points of the offer are
outlined in the paragraphs below and reflect the verbal agreement we reached and
which were approved by the Compensation Committee on December 12, 1997.
SALARY
Your annual salary will be $225,000. The salary will remain at this level unless
increased by the Compensation Committee at that committee's annual review. This
review process occurs in the fourth quarter of each year for compensation
changes for the following year.
BONUS
As agreed, you will participate in the Executive Level of the Management Bonus
Program beginning in 1998. Your bonus plan will be consistent with the overall
company program and based upon EVA (economic value added) performance, A minimum
bonus of $50,000 for 1998 will be guaranteed based on a start date of not later
than February 1, 1998.
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In addition, we recognize that by joining Sofamor Xxxxx by February 1, you will
have to forgo an earned 1997 bonus at your current employer. To mitigate that
loss, we propose to pay you on April 1, 1998 a one-time signing bonus of
$25,000.
STOCK OPTIONS
Sofamor Xxxxx Group, Inc., is granting you options on 100,000 shares of Sofamor
Xxxxx Group, Inc., common stock at the closing price on December 12, 1997, of
$59.25 per share. These options will be non-qualified options. In connection
with the grant of these stock options, the Company requires a one year
competitive restriction. To accept this stock option grant you will be required
to sign the enclosed one year non-compete agreement.
The grant of these Options is subject to the Company obtaining the approval of
its shareholders, no later than the next annual meeting of shareholders, to
increase the number of Shares available for issuance under the Plan. The Board
of Directors has unanimously approved recommendation of such increase to be
included in the proxy statement for the May 20, 1998 annual meeting. In the
event that such approval is not obtained, the Options granted hereby shall be
null and void and of no further force and effect.
The stock will vest one-fifth each year over five years beginning on the first
anniversary date of the grant. The vesting is contingent upon your continued
employment with Sofamor Xxxxx Group, Inc. Details of the option grant will be
contained in your Employment Agreement. All other terms of the options are
contained in the Company's Long Term Incentive Plan.
As a full-time employee and Executive Vice President of Sofamor Xxxxx Group,
Inc., you will receive the following benefits:
1. Medical insurance coverage will be effective the first of the month
following your hire date. Pre-existing medical conditions will be covered
by this medical insurance.
2. Life insurance coverage equal to two times your annual salary, subject to
a 90-day probationary period.
3. Short-term and long-term disability.
4. Eligibility for 40 1 (k) Tax Deferred Savings Plan after six (6) months
of employment.
5. Eligibility for the Sofamor Xxxxx Group, Inc. Employee Stock Purchase
plan after six (6) months of employment and per the Plan's enrollment
requirements.
6. At least four weeks vacation per year.
7. Payment or reimbursement for business related club dues or cellular phone
charges of $300.00 per month.
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8. Spouse travel of $6,000.00 per year.
9. Subscription reimbursement of $300.00 per year.
You will be an employee at will; either you or Sofamor Xxxxx Group, Inc., may
terminate your employment at any time for any reason subject to the conditions
of your Employment Agreement. Sofamor Xxxxx Group, Inc., reserves the right to
modify or eliminate any benefits, policies, plans or programs at any time for
any reason with or without notice unless otherwise specified in your Employment
Agreement.
Sofamor Xxxxx Group, Inc.'s Board of Directors, Xxx Xxxxxxx, Xxx Xxxxxxxx and I
are all enthusiastic about having you as a senior executive of the Company.
Please signify your acceptance of our offer by signing below and returning one
original of this letter to me at your earliest convenience.
Sincerely,
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Group President, Operations
ACCEPTED BY:
/s/ Xxxxxxx Xxxxx January 27, 1998
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Xxxxxxx Xxxxx Date
