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Exhibit 10.10
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, dated as of September 20, 2006, is made by
and between Biomet, Inc., an Indiana corporation (the "
Company "), and Roger P. van Broeck (the " Executive
").
Recitals
A. The Company considers it essential to the best interests of
its shareholders to foster the continuous employment of certain key
management personnel, including the Executive who is currently
serving as President, International Operations, Biomet, Inc..
B. The Board recognizes that, as is the case with many
publicly-held corporations, the possibility of a Change in Control
exists and that such a possibility, and the uncertainty and
questions that it may raise among management, may result in the
departure or distraction of certain key management personnel to the
detriment of the Company and its shareholders.
C. The Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and
dedication of members of the Company’s management, including
the Executive, to their assigned duties without distraction in the
face of potentially disturbing circumstances arising from, among
other things, the possibility of a Change in Control.
D. The parties intend that no amount or benefit will be payable
under this Agreement unless both of the following events occur:
(i) a Change in Control occurs; and (ii) the
Executive’s employment with the Company is terminated as
provided in this Agreement.
AGREEMENT
In consideration of the premises and the mutual covenants and
agreements set forth below, the Company and the Executive agree as
follows:
ARTICLE I
Term of Agreement
Section 1.01 Term . The " Term " of this
Agreement is the period commencing on the date hereof and ending on
the second anniversary of the date hereof; provided, however, that
commencing on the date one year after the date hereof, and on each
annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the "
Renewal Date "), unless previously terminated, the Term
shall be automatically extended so as to terminate two years from
such Renewal Date, unless at least 60 days prior to the Renewal
Date the Board shall give notice to the Executive that the Term not
be so extended. Notwithstanding any notice to the Executive that
the Term shall not be extended, if a Change in Control occurs prior
to the expiration of the Term, then the Term shall be automatically
extended so as to expire two years from the date of such Change in
Control.
Section 1.02 Post-Change in Control Employment
Period . Subject to the terms and conditions of this Agreement,
the Company hereby agrees to continue the Executive in its employ,
and the Executive hereby agrees to remain in the employ of the
Company for the period commencing on the first date on which a
Change in Control occurs during the Term and ending on the second
anniversary of such date (the " Post-CIC Employment Period
").
ARTICLE II
Termination of Employment
Section 2.01 Death or Disability . The
Executive’s employment shall terminate automatically upon the
Executive’s death during the Term. If the Company determines
in good faith that the Disability (pursuant to the definition of
Disability set forth below) of the Executive has occurred during
the Term, it may give to the Executive written notice in accordance
with Article VII of this Agreement of its intention to terminate
the Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the
Executive (the " Disability Effective Date "), provided
that, within the thirty days after such receipt, the Executive
shall not have returned to full-time performance of the
Executive’s duties. For purposes of this Agreement, "
Disability " shall mean the absence of the Executive from
the Executive’s duties with the Company on a full-time basis
for 180 consecutive business days as a result of incapacity due to
mental or physical illness, which is determined to be a disability
pursuant to the Company’s then existing long term disability
plan or, in the absence of such a plan, a disability determined to
be total and permanent by a physician selected by the Company and
acceptable to the Executive or the Executive’s legal
representative.
Section 2.02 Cause . The Company may terminate the
Executive’s employment during the Term for Cause.
Section 2.03 Good Reason . The Executive’s
employment may be terminated by the Executive for Post-CIC Good
Reason.
Section 2.04 Notice of Termination . Any termination
by the Company for Cause, or by the Executive for Post-CIC Good
Reason, shall be communicated by Notice of Termination to the other
party hereto given in accordance with Article VII of this
Agreement. For purposes of this Agreement, a " Notice of
Termination " means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon,
(ii) to the extent applicable, sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision
so indicated and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies
the termination date. The failure by the Executive or the Company
to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Post-CIC Good Reason or Cause
shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing
the Executive’s or the Company’s rights hereunder.
Section 2.05 Date of Termination . " Date of
Termination " means (i) if the Executive’s
employment is terminated by the Company for Cause, or by the
Executive for Post-CIC Good Reason, the date of receipt of the
Notice of Termination or any later date up to six months thereafter
specified therein, as the case may be, (ii) if the
Executive’s employment is terminated by the Company other
than for Cause or Disability, the Date of Termination shall be the
date on which the Company notifies the Executive of such
termination or any later date specified therein within 30 days of
such notice and (iii) if the Executive’s employment is
terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the
Disability Effective Date, as the case may be.
ARTICLE III
Obligations of the Company Upon
Termination
Section 3.01 Post-CIC Good Reason; Other Than for Cause
or Disability . If, during the Post-CIC Employment Period, the
Executive shall terminate employment for Post-CIC Good Reason or
the Company shall terminate the Executive’s employment other
than for Cause or Disability (entitling the Executive to benefits
under the Company’s long-term disability plan, after any
applicable waiting period):
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(a) The Company shall pay to the Executive in a
lump sum in cash on the tenth (10) Business Day following the
Date of Termination the aggregate of the following
amounts:
(i) the sum of (1) the Executive’s Annual Base Salary
(which for this purpose shall include any allowance for perquisites
that is paid directly to the Executive) through the end of the
fiscal year containing the Date of Termination; (2) an amount
equal to (x) the higher of the target bonus amount or the
bonus actually paid to the Executive under the Company’s
incentive bonus plan (or any comparable successor plan(s)) for the
fiscal year of the Company prior to the Date of Termination (or the
first date on which a Change in Control occurs, if such date is
earlier) or (y) the target bonus amount payable to the
Executive under such plan(s) for the fiscal year of the Company
which contains the Date of Termination, whichever of (x) or
(y) is higher (the " Target Bonus "); (3) the
total contributions (other than salary reduction contributions)
made by the Company to all qualified retirement plans on behalf of
the Executive through the end of the fiscal year containing the
Date of Termination; (4) the total car allowance contributions
made by the Company to the Executive through the end of the fiscal
year containing the Date of Termination; and (5) any accrued
vacation or other pay not theretofore paid (the sum of the amounts
described in clauses (1), (2), (3), (4) and (5) are
herein referred to as the " Accrued Obligations "); and,
(ii) the amount equal to the product of (1) two and
(2) the sum of (w) the Executive’s Annual Base
Salary (which for this purpose shall include any allowance for
perquisites that is paid directly to the Executive) and
(x) the higher of (aa) the Target Bonus and (bb) the highest
annual incentive bonus earned by Executive during the last two
(2) completed fiscal years of the Company immediately
preceding Executive’s Date of Termination (annualized in the
event Executive was not employed by the Company for the whole of
any such fiscal year), with the product of (1) and
(2) reduced by the amounts paid, if any, to the Executive
pursuant to any other contractual arrangement with the Executive or
plan providing coverage to the Executive as a result of such
termination; (y) the total contributions (other than salary
reduction contributions) made by the Company to all qualified
retirement plans on behalf of the Executive for the calendar year
immediately preceding the calendar year in which the Change in
Control occurs; and (z) the total car allowance contributions
made by the Company to the Executive for the calendar year
immediately preceding the calendar year in which the Change in
Control occurs.
(b) The Company shall provide the following benefit payments to
the Executive:
(i) For a 24-month period after the Date of Termination, the
Company will arrange to provide the Executive with life insurance
benefits and long-term disability benefits substantially similar to
those that the Executive was receiving from the Company immediately
prior to the Date of Termination (or the first date on which a
Change in Control occurs, if such date is earlier). Life insurance
benefits and long-term disability benefits otherwise receivable by
the Executive pursuant to the preceding sentence will be reduced to
the extent comparable benefits are actually received by or made
available to the Executive by any source other than the Company
without greater cost to him than as provided by the Company during
the 24-month period following the Executive’s termination of
employment (and the Executive will report to the Company any such
benefits actually received by or made available to the Executive).
If, as of the Date of Termination, the Company reasonably
determines that the continued life insurance coverage and/or
long-term disability coverage required by this Section 3.01(b)
is not available from the Company’s group insurance carrier,
cannot be procured from another carrier, and cannot be provided on
a self-insured basis without adverse tax consequences to the
Executive or his death beneficiary, then, in lieu of continued life
insurance coverage and/or long-term disability coverage, the
Company will pay the Executive a lump sum payment, in cash, equal
to 24 times the full monthly premium payable to the Company’s
group insurance carrier for comparable coverage for an executive
employee under the Company’s group life insurance plan or
long-term disability plan then in effect.
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(ii) The Company will offer the Executive and any
eligible family members the opportunity to elect to continue
medical and dental coverage pursuant to the continuation coverage
requirements of the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended (" COBRA "). The Executive will be
responsible for paying the required monthly premium for that
coverage, but the Company will pay the Executive a lump sum cash
stipend equal to 24 times the monthly premium then charged to
qualified beneficiaries for full family COBRA continuation coverage
under the Company’s medical and dental plans, which the
Executive may choose to use for the payment of COBRA premiums. The
Company will pay the stipend to the Executive whether or not the
Executive or anyone in his family elects COBRA continuation
coverage, whether or not the Executive continues COBRA coverage for
a full 24 months, and whether or not the Executive receives health
coverage from another employer while the Executive is receiving
COBRA continuation coverage.
(c) All outstanding Options will become immediately vested and
exercisable (to the extent not yet vested and exercisable as of the
Date of Termination) and shall remain exercisable until the earlier
of (i) the expiration of the option term or (ii) five
(5) years after the Date of Termination. To the extent not
otherwise provided under the written agreement, if any, evidencing
the grant of any restricted Shares to the Executive, all
outstanding Shares that have been granted to the Executive subject
to restrictions that, as of the Date of Termination, have not yet
lapsed will lapse automatically upon the Date of Termination, and
the Executive will own those Shares free and clear of all such
restrictions.
(d) For 12 months following the Date of Termination the Company
shall, at its sole expense, reimburse the Executive for the cost
(but not in excess of $25,000 in the aggregate), as incurred, for
outplacement services the scope and provider of which shall be
selected by the Executive in Executive’s sole discretion.
(e) To the extent not theretofore paid or provided, the Company
shall timely pay or provide to Executive any other amounts or
benefits required to be paid or provided or which Executive is
eligible to receive under any plan, program, policy, practice,
contract or agreement of the Company (such other amounts and
benefits shall be hereinafter referred to as the " Other
Benefits ").
Section 3.02 Death . If the Executive’s
employment is terminated by reason of the Executive’s death
during the Term and prior to a Change in Control, this Agreement
shall terminate without further obligations to the
Executive’s legal representatives under this Agreement.
Anything in this Agreement to the contrary notwithstanding, if the
Executive’s death occurs after a Change In Control, then this
Section 3.02 shall not apply and the Executive’s estate
and/or beneficiaries shall be entitled to the benefits of
Section 3.01.
Section 3.03 Disability . If the Executive’s
employment is terminated by reason of the Executive’s
Disability during the Term, this Agreement shall terminate without
further obligations to the Executive, other than for payment of
Accrued Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the Executive in a
lump sum in cash on the twentieth (20th) Business Day
following the Date of Termination. The term "Other Benefits" as
utilized in this Section 3.03 shall include, without
limitation, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits
at least equal to the most favorable of those generally provided by
the Company and its affiliated companies to disabled executives
and/or their families in accordance with such plans, programs,
practices and policies relating to disability, if any, as in effect
generally with respect to other peer executives and their families
at any time during the 120-day period immediately preceding the
Date of Termination (or the date on which a Change in Control
occurs, if such date is earlier) or, if more favorable to the
Executive and/or the Executive’s family, as in effect at any
time thereafter generally with respect to other peer executives of
the Company and their families.
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Section 3.04 Termination in Anticipation
of a Change in Control .
(a) An " Anticipatory Termination " occurs if either
(i) (1) the Company terminates the Executive’s
employment other than for Cause or Disability prior to the date on
which a Change in Control occurs, (2) it is reasonably
demonstrated by the Executive that such termination of employment
(x) was at the request or instruction of a third party who had
taken steps reasonably calculated to effect a Change in Control or
(y) otherwise arose within six months of, and was in
connection with or in anticipation of, a Change in Control, and
(3) a Change in Control occurs, or
(ii) (1) during the Term, an event occurs that would have
constituted Post-CIC Good Reason if the date on which a Change in
Control occurs was deemed to be the date immediately prior to the
date of such event and the Executive terminated his employment
subsequent to such event, (2) the Executive can reasonably
demonstrate that such Post-CIC Good Reason event (x) was at
the request or instruction of a third party who had taken steps
reasonably calculated to effect a Change in Control or
(y) otherwise arose within six months of, and was in
connection with or in anticipation of, a Change in Control, and
(3) a Change in Control occurs.
(iii) For purposes of clauses (i)(1)(y) and (ii)(1)(y) of this
Section 3.04(a), it shall be presumed that such event was in
connection with or in anticipation of a Change in Control unless
the Company establishes otherwise by clear and convincing
evidence.
(b) If the Executive has reason to believe that an Anticipatory
Termination may have occurred, he shall provide a notice setting
forth such belief in accordance with Article VII of this Agreement
within 120 days after a Change in Control has occurred. Upon an
Anticipatory Termination, the Executive shall be entitled to
(A) the payments specified in Sections 3.01(a),(d) and
(e) (to the extent not previously paid), (B) the benefits
specified in Section 3.01(b) (to the extent not previously
provided) (or the after-tax equivalent thereof to the extent that
such benefits have not been or are not provided in kind),
(C) to the extent that the Executive has outstanding any
unexercised stock options and other stock-based awards, the
provisions of Section 3.01(c) shall apply to them, (D) in
respect of any stock options or other stock based awards that were
forfeited by the Executive as a result of his termination of
employment but would have vested had Section 3.01(c) applied,
such awards shall be reinstated (or if not reinstated, the
Executive shall be paid in cash the fair value of such award), and
(E) liquidated damages of $25,000 for penalties associated
with the Anticipatory Termination. For the purposes of this
Section 3.04(b), the Executive’s Date of Termination
shall be deemed to be his last date of employment by the
Company.
Section 3.05 Nonexclusivity of Rights . Nothing in
this Agreement shall prevent or limit the Executive’s
continuing or future participation in any plan, program, policy or
practice provided by the Company and for which the Executive may
qualify, nor, subject to Section 8.02, shall anything herein
limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company. Amounts which are
vested benefits or which the Executive is otherwise entitled to
receive under any plan, policy, practice, or program of or any
contract or agreement with the Company at or subs
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