1
EXHIBIT 10.30
AMENDED AND RESTATED
LOAN FORGIVENESS AGREEMENT
DATED OCTOBER 11, 1996 BETWEEN
THE COMPANY AND X. X. XXXXXXX
2
EXHIBIT 10.30
AMENDED AND RESTATED LOAN FORGIVENESS AGREEMENT
This Agreement, which is effective this 11TH day of October, 1996, is
by and between Sofamor Xxxxx Group, Inc., an Indiana corporation with principal
offices at 0000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxx 00000 (the "Company") and X.
X. Xxxxxxx ("Xxxxxxx"),
WHEREAS, Xxxxxxx is the Chairman and Chief Executive
Officer of the Company; and
WHEREAS, the Company loaned Xxxxxxx $1,740,000 pursuant
to a Promissory Note dated November 30, 1990, as amended, related to
the exercise of certain stock options, and $2,424,997 pursuant to
various Promissory Notes, as amended, for taxes related to the
exercise of those stock options (collectively, the "Loans"), which
Loans have a maturity date of March 31, 2006;
WHEREAS, the Loans are secured by shares of the
Company's common stock that are owned by Xxxxxxx;
WHEREAS, the Company and Xxxxxxx entered into a loan
forgiveness agreement on August 26, 1991 (the "Original Agreement"),
which has been, pursuant to the action of the Company's Board of
Directors, amended on February 16, 1995, December 15, 1995 and
October 13, 1996; and
WHEREAS, the Company and Xxxxxxx desire to amend the
Original Agreement and all amendments thereto and restate them in
one document.
3
NOW, THEREFORE, in consideration of the mutual promises and
obligations contained herein, and each act done in furtherance thereof,
the Company and Xxxxxxx agree as follows:
1. TERM. This Agreement shall commence as of October 11, 1996
and shall terminate on March 31, 2006.
2. LOAN FORGIVENESS CREDIT. As used in this Agreement, "Loan
Forgiveness Credit" means a reduction in the principal balance
of the Loans between the Company and Xxxxxxx. During the term
of this Agreement there shall accrue to Xxxxxxx, subject to the
terms and conditions of this Agreement, Loan Forgiveness
Credits in the amounts and on the dates set forth below:
DATE AMOUNT
---- ------
December 31, 1996 $ 450,000
December 31, 1997 $ 450,000
December 31, 1998 $ 450,000
December 31, 1999 $ 450,000
December 31, 2000 $ 450,000
December 31, 2001 $ 450,000
December 31, 2002 $ 450,000
December 31, 2003 $ 450,000
December 31, 2004 $ 450,000
March 31, 2005 $ 114,997
3. VESTING OF LOAN FORGIVENESS CREDIT. Each Loan Forgiveness
Credit shall vest in favor of Xxxxxxx and shall become
effective if, but only if, on the date that a Loan Forgiveness
Credit is accrued pursuant to the schedule set forth above in
Section 2 of
4
this Agreement, the following conditions have been fully
satisfied: (a) Xxxxxxx shall have remained, at his sole
discretion, employed by the Company, and (b) that the Company
shall have met or exceeded operational performance thresholds
as determined by the Company Board of Directors on an annual
basis.
4. CHANGE OF CONTROL. In the event of a change of control or a
threatened change of control in the Company, any Loan
Forgiveness Credit which has not accrued to and vested in
Xxxxxxx shall immediately vest upon the Change of Control and
the Company shall further pay to Xxxxxxx an amount equal to
cover any applicable taxes, interest, penalties and charges,
including without limitation, any interest and penalties
related in any way to the vesting of the Loan Forgiveness
Credits, together with any payments to Xxxxxxx necessary to
make the Loan Forgiveness tax neutral to Xxxxxxx.
For purposes of this Section 4 the terms "Change of
Control" and "Threatened Change of Control" shall have the
same definitions as those terms have and are used in Section
10 of the Company's Long Term Incentive Plan as of the
effective date of this Agreement.
5. ADDITIONAL COMPENSATION TO XXXXXXX. In connection with this
agreement the Company shall also continue to pay to
Xxxxxxx, as further compensation, a full tax gross up equal
to Xxxxxxx'x personal tax liabilities resulting from (1) any
and all Loan Forgiveness Credits, and (2) the tax gross up
payments
5
resulting therefrom. The Company shall also continue
to pay to Xxxxxxx, as additional compensation, an
amount equal to the amount of interest due on the
loans, plus a full tax gross up equal to Xxxxxxx'x
personal tax liabilities resulting from (1) such
additional compensation, and (2) the tax gross up
payments resulting therefrom. The purpose of this
Section 5 is that all payments made by the Company to
Xxxxxxx and any and all Loan Forgiveness Credits
vested in Xxxxxxx shall be tax neutral for Xxxxxxx.
6. EXTENSION OF OPTION LOAN TERM. All appropriate
action necessary shall be taken to cause the term of
the Loans to be extended and make terminus with the
term of this Agreement.
7. ENTIRE AGREEMENT; AMENDMENT AND MODIFICATIONS. This
Agreement contains the entire agreement of the Parties
and supersedes any prior understandings and agreements
between the Company and Xxxxxxx with respect to the
subject matter of this Agreement. It may not be
changed orally, but only by agreement in writing,
signed by both the Company and Xxxxxxx.
8. RIGHT TO TERMINATE EMPLOYMENT. Nothing contained in
this Agreement shall restrict the right of the
Company to terminate the employment of Xxxxxxx at any
time.
9. BINDING EFFECT. This Agreement shall adhere to the
benefit of and be binding upon the parties hereto and
the respective heirs, executors, administrators,
successors and assigns.
6
10. ENTIRE AGREEMENT. This Agreement supersedes and replaces the
Original Agreement and all amendments thereto.
11. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of
Tennessee.
IN WITNESS WHEREOF, the Company and Xxxxxxx have executed this Amended
and Restated Loan Forgiveness Agreement as of October 11, 1996.
X. X. Xxxxxxx Sofamor Xxxxx Group, Inc.
/s/ X. X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------- ---------------------------------
Xxxxx X. Xxxxxxxx
President & Chief Operating Officer
