Exhibit 10.5
AMENDED and RESTATED
CHANGE IN CONTROL SEVERANCE
AGREEMENT
THIS AGREEMENT is entered into as of the
1 st
day of August, 2008 (the
“Effective Date”) by and between CONMED Corporation, a
New York corporation (the “Company”), and Luke A.
Pomilio, residing at 8668 Teugega Point, Rome, New
York 13440
W I T N E S S E T H
WHEREAS, the Company considers the establishment
and maintenance of a sound and vital management to be essential to
protecting and enhancing the best interests of the Company and its
stockholders; and
WHEREAS, the Company recognizes that, as is the
case with many publicly held corporations, the possibility of a
change in control may arise and that such possibility may result in
the departure or distraction of management personnel to the
detriment of the Company and its stockholders; and
WHEREAS, the Company and Executive have
previously entered into a Change in Control Severance Agreement,
dated as of May 2, 2000, which is hereby amended and restated;
and
WHEREAS, the Board (as defined in Section 1) has
determined that it is in the best interests of the Company and its
stockholders to secure Executive ’ s continued
services and to ensure Executive ’ s continued
dedication to his duties in the event of any threat or occurrence
of a Change in Control (as defined in Section 1) of the Company;
and
WHEREAS, the Company wishes Executive to enter
into a confidentiality agreement, which Executive is willing to do,
as a condition of entering into this Agreement; and
WHEREAS, the Board has authorized the Company to
enter into this Agreement.
NOW, THEREFORE, for and in consideration of the
premises and the mutual covenants and agreements herein contained,
the Company and Executive hereby agree as follows:
1.
Definitions . As used in this Agreement,
the following terms shall have the respective meanings set forth
below:
(a)
“ Board ” means the Board of Directors of
the Company.
(b)
“ Bonus Amount ” means the highest annual
incentive bonus earned by Executive from the Company (or its
affiliates) during the last three (3) completed fiscal years of the
Company immediately preceding Executive ’ s Date of
Termination (annualized in the event Executive was not employed by
the Company (or its affiliates) for the whole of any such fiscal
year).
(c)
“ Cause ” means (i) the willful and
continued failure of Executive to perform substantially his duties
with the Company (other than any such failure resulting from
Executive ’ s incapacity due to physical or mental
illness or any such failure subsequent to Executive being delivered
a Notice of Termination without Cause by the Company or delivering
a Notice of Termination for Good Reason to the Company) after a
written demand for substantial performance is delivered to
Executive by the Board which specifically identifies the manner in
which the Board believes that Executive has not substantially
performed Executive ’ s duties, or (ii) the willful
engaging by Executive in illegal conduct or gross misconduct which
is demonstrably and materially injurious to the Company or its
affiliates. For purpose of this paragraph (b), no act or
failure to act by Executive shall be considered “
willful ” unless done or omitted to be done by
Executive in bad faith and without reasonable belief that Executive
’ s action or omission was in the best interests of
the Company or its affiliates. Any act, or failure to
act, based upon authority given pursuant to a resolution duly
adopted by the Board, based upon the advice of counsel for the
Company or upon the instructions of the Company ’ s
chief executive officer or another senior officer of the Company
shall be conclusively presumed to be done, or omitted to be done,
by Executive in good faith and in the best interests of the
Company. Cause shall not exist unless and until the
Company has delivered to Executive a copy of a resolution duly
adopted by three-quarters (3/4) of the entire Board (excluding
Executive if Executive is a Board member) at a meeting of the Board
called and held for such purpose (after reasonable notice to
Executive and an opportunity for Executive, together with counsel,
to be heard before the Board), finding that in the good faith
opinion of the Board an event set forth in clauses (i) or (ii) has
occurred and specifying the particulars thereof in
detail.
(d)
“ Change in Control ” means the
occurrence of any one of the following events:
(i) individuals
who, as of the Effective Date, constitute the Board (the
“ Incumbent Directors ” ) cease for any
reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the Effective
Date, whose election or nomination for election was approved by a
vote of at least two-thirds of the Incumbent Directors then on the
Board (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee
for director, without written objection to such nomination) shall
be an Incumbent Director; provided, however, that no individual
initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to
directors or as a result of any other actual or threatened
solicitation of proxies or consents by or on behalf of any person
other than the Board shall be deemed to be an Incumbent
Director;
(ii) any
“ person ” (as such term is defined in
Section 3(a)(9) of the Securities Exchange Act of 1934 (the
“ Exchange Act ” ) and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
“ beneficial owner ” (as defined in Rule
13d-3 under the Exchange Act),
directly or
indirectly, of securities of the Company representing 25% or more
of the combined voting power of the Company ’ s then
outstanding securities eligible to vote for the election of the
Board (the “ Company Voting Securities ”
); provided, however, that the event described in this paragraph
(ii) shall not be deemed to be a Change in Control by virtue of any
of the following acquisitions: (A) by the Company or any
Subsidiary, (B) by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Subsidiary, (C) by
any underwriter temporarily holding securities pursuant to an
offering of such securities, (D) pursuant to a Non-Qualifying
Transaction (as defined in paragraph (iii)), or (E) pursuant to any
acquisition by Executive or any group of persons including
Executive (or any entity controlled by Executive or any group of
persons including Executive);
(iii) the
consummation of a merger, consolidation, statutory share exchange
or similar form of corporate transaction involving the Company or
any of its Subsidiaries that requires the approval of the Company
’ s stockholders, whether for such transaction or the
issuance of securities in the transaction (a “
Business Combination ” ), unless immediately following
such Business Combination: (A) more than 50% of the
total voting power of (x) the corporation resulting from such
Business Combination (the “ Surviving Corporation
” ), or (y) if applicable, the ultimate parent
corporation that directly or indirectly has beneficial ownership of
100% of the voting securities eligible to elect directors of the
Surviving Corporation (the “ Parent Corporation
” ), is represented by Company Voting Securities that
were outstanding immediately prior to such Business Combination
(or, if applicable, is represented by shares into which such
Company Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such
Company Voting Securities among the holders thereof immediately
prior to the Business Combination, (B) no person (other than any
employee benefit plan (or related trust) sponsored or maintained by
the Surviving Corporation or the Parent Corporation), is or becomes
the beneficial owner, directly or indirectly, of 25% or more of the
total voting power of the outstanding voting securities eligible to
elect directors of the Parent Corporation (or, if there is no
Parent Corporation, the Surviving Corporation) and (C) at least a
majority of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) following the consummation of the Business Combination
were Incumbent Directors at the time of the Board ’ s
approval of the execution of the initial agreement providing for
such Business Combination (any Business Combination which satisfies
all of the criteria specified in (A), (B) and (C) above shall be
deemed to be a “ Non-Qualifying Transaction
” ); or
(iv) the
stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company or a sale of all or substantially all
of the Company ’ s assets.
Notwithstanding the foregoing, a Change in
Control of the Company shall not be deemed to occur solely because
any person acquires beneficial
ownership of
more than 25% of the Company Voting Securities as a result of the
acquisition of Company Voting Securities by the Company which
reduces the number of Company Voting Securities outstanding;
provided, that if after such acquisition by the Company such person
becomes the beneficial owner of additional Company Voting
Securities that increases the percentage of outstanding Company
Voting Securities beneficially owned by such person, a Change in
Control of the Company shall then occur.
(e)
“ Date of Termination ” means (1) the
effective date on which Executive ’ s employment by
the Company terminates as specified in a prior written notice by
the Company or Executive, as the case may be, to the other,
delivered pursuant to Section 10 or (2) if Executive ’
s employment by the Company terminates by reason of death, the date
of death of Executive.
(f)
“ Disability ” means termination of
Executive ’ s employment by the Company due to
Executive ’ s absence from Executive ’ s
duties with the Company on a full-time basis for at least one
hundred eighty (180) consecutive days as a result of Executive
’ s incapacity due to physical or mental
illness.
(g)
“ Good Reason ” means, without Executive
’ s express written consent, the occurrence of any of
the following events after a Change in Control:
(i) (A)
any change in the duties or responsibilities
(including reporting responsibilities) of Executive that is
inconsistent in any material and adverse respect with Executive
’ s position(s), duties, responsibilities or status
with the Company immediately prior to such Change in Control
(including any material and adverse diminution of such duties or
responsibilities); provided, however, that Good Reason shall not be
deemed to occur upon a change in duties or responsibilities (other
than reporting responsibilities) that is solely and directly a
result of the Company no longer being a publicly traded entity and
does not involve any other event set forth in this paragraph (g) or
(B) a material and adverse change in Executive ’ s
titles or offices with the Company as in effect immediately prior
to such Change in Control;
(ii) a
material reduction by the Company in Executive
’ s rate of annual base salary or annual target bonus
opportunity (including any material and adverse change in the
formula for such annual bonus target), as in effect immediately
prior to such Change in Control or as the same may be increased
from time to time thereafter;
(iii) any
requirement of the Company that Executive (A) be based anywhere
more than fifty (50) miles from the office where Executive is
located at the time of the Change in Control or (B) travel on
Company business to an extent substantially greater than the travel
obligations of Executive immediately prior to such Change in
Control;
(iv) the
failure of the Company to continue in effect any material
employee benefit compensation welfare benefit or
fringe benefit plan in which Executive is eligible to participate
in immediately prior to such Change in Control or the taking of any
action by the Company which would materially
adversely affect
Executive
’ s contribution level or ability to participate in or
materially reduce Executive ’ s benefits
under any such plan, unless Executive is permitted to participate
in other plans providing Executive with substantially equivalent
benefits in the aggregate (at substantially equivalent Executive
contribution with respect to welfare benefit plans)
or
(v) the
failure of the Company to obtain the assumption of this Agreement
from any successor as contemplated in Section 9(b).
An isolated, insubstantial and inadvertent
action taken in good faith and which is remedied by the Company
within ten (10) days after receipt of notice thereof given by
Executive shall not constitute Good Reason. Executive
’ s right to terminate employment for Good Reason
shall not be affected by Executive ’ s incapacities
due to mental or physical illness and Executive ’ s
continued employment shall not constitute consent to, or a waiver
of rights with respect to, any event or condition constituting Good
Reason; provided, however, that such event shall not
constitute Good Reason under this Agreement unless (i) Executive
provides notice to the Company within the ninety (90)
days following the initial existence of an event constituting Good
Reason , (ii) the Company does not remedy such event (if
remediation is possible) within thirty (30) days following the
Company’s receipt of notice of such event, and (iii)
Executive separates from service with the Company within two (2)
years following the initial existence of such an event constituting
Good Reason.
(h)
“ Qualifying Termination ” means a
termination of Executive ’ s employment (i) by the
Company other than for Cause or (ii) by Executive for Good
Reason. Termination of Executive ’ s
employment on account of death, Disability or Retirement shall not
be treated as a Qualifying Termination.
(i)
“ Retirement ” means Executive
’ s mandatory retirement (not including any mandatory
early retirement) in accordance with the Company ’ s
retirement policy generally applicable to its salaried employees,
as in effect immediately prior to the Change in Control, or in
accordance with any retirement arrangement established with respect
to Executive with Executive ’ s written
consent.
(j)
“ Subsidiary ” means any corporation or
other entity in which the Company has a direct or indirect
ownership interest of 50% or more of the total combined voting
power of the then outstanding securities or interests of such
corporation or other entity entitled to vote generally in the
election of directors or in which the Company has the right to
receive 50% or more of the distribution of profits or 50% of the
assets or liquidation or dissolution.
(k)
“ Termination Period ” means the period
of time beginning with a Change in Control and ending two (2) years
and six (6) months following such Change in
Control. Notwithstanding anything in this Agreement to
the contrary, if (i) Executive ’ s employment is
terminated prior to a Change in Control for reasons that would have
constituted a Qualifying Termination if they had occurred following
a Change in Control; (ii) Executive reasonably demonstrates that
such termination (or Good Reason event) was at the request of a
third party who had indicated an intention or taken steps
reasonably
calculated to
effect a Change in Control; and (iii) a Change in Control involving
such third party (or a party competing with such third party to
effectuate a Change in Control) does occur, then for purposes of
this Agreement, the date immediately prior to the date of such
termination of employment or event constituting Good Reason shall
be treated as a Change in Control. For purposes of
determining the timing of payments and benefits to Executive under
Section 4, the date of the actual Change in Control shall be
treated as Executive ’ s Date of Termination under
Section 1(e).
2.
Obligation of Executive . In the event of a
tender or exchange offer, p
