Exhibit
10.2
EXECUTION COPY
RETIREMENT AND CONSULTING
AGREEMENT
THIS RETIREMENT AND CONSULTING
AGREEMENT (this “ Agreement ”) is made as of
March 30, 2007 by and between BIOMET, INC., an Indiana
corporation (“ Company ”), and Daniel P. Hann
(“ Executive ”).
WHEREAS, Executive has elected to
retire from the Company and to resign all his positions with the
Company effective as of March 30, 2007;
WHEREAS, the parties have agreed to
resolve certain matters related to Executive’s
retirement;
WHEREAS, the Company desires to
engage Executive as a consultant on the terms set forth in this
Agreement to assist in the transition of certain matters for which
Executive was previously responsible; and
WHEREAS, Executive desires to
provide such consulting services to the Company on the terms set
forth in this Agreement
NOW, THEREFORE, in consideration of
the foregoing premises and the respective agreements hereinafter
set forth and the mutual benefits to be derived herefrom, Company
and Executive hereby agree as follows:
1.
Retirement and Resignation . Effective as of March 30,
2007 (the “ Separation Date ”), Executive hereby
retires from the Company and, as a consequence, voluntarily
resigns his employment with the Company and all of its
affiliates, including without limitation Executive’s position
as Executive Vice President of Administration and as a member of
the Company’s Board of Directors (the “ Board
”) and the board of directors of all the Company’s
subsidiaries and affiliates.
2. No
Entitlement to Severance . Executive acknowledges and
agrees that Executive is not entitled to, and hereby waives any
potential entitlement to, any severance or termination benefits
that could be payable in connection with his retirement and
resignation from employment with the Company. Without
limiting the foregoing, Executive hereby agrees that the Severance
and Change in Control Agreement dated as of September 20, 2006 by
and between Executive and the Company (the “ Severance
Agreement ”) is hereby terminated and of no further force
or effect. Executive agrees that Executive shall not be
entitled to, and hereby waives any potential future entitlement to,
any of the benefits or payments described in the Severance
Agreement. Promptly after, but in any event within thirty
days after, the Effective Date, the Company will pay Executive
$133,333 in full discharge of Executive’s annual bonus for
the Company’s 2007 fiscal year and shall pay Executive any
other amounts accrued and owing under the terms of any other
compensation or benefit program of the Company (excluding any
severance or termination program) in which Executive
participates.
3.
Treatment of Options . Executive acknowledges that the
Company is conducting an investigation (the “
Investigation ”) to determine the extent to which
compensatory options previously granted by the Company were granted
with an exercise price lower than the fair market value of the
Company’s common stock on the applicable date of grant.
The Company and Executive hereby agree to the following with
respect to options granted to him by the Company.
(a)
Previously Exercised Options . Executive shall repay
to the Company in accordance with this Section 3(a) the aggregate
amount (the “ Discount ”) by which the exercise
price of any or all compensatory options granted to Executive by
the Company that Executive exercised prior to the date hereof was
less than the fair market value of the Company’s common stock
on the applicable date of grant of each such option. The
Company shall determine the amount of the Discount in good faith
and, absent manifest error, the Company’s determination shall
be final, binding and conclusive. Executive shall pay the
amount of the Discount to the Company promptly after, but in any
event within thirty days after, receipt of a written notice from
the Company setting out in reasonable detail the calculation of the
Discount. Without in any way limiting Executive’s
obligation to repay the Discount directly, Executive hereby
authorizes the Company to withhold the Discount from any and all
amounts otherwise payable to Executive hereunder or otherwise in
the event Executive fails within thirty days of receipt of the
written notice specified above to pay the Discount. If the
Company agrees to accept liability for or otherwise reimburse all
other present or former executive officers or directors for adverse
tax consequences resulting from any disqualification of stock
options, the Company agrees to consider in good faith providing the
same benefit to Executive.
(b)
Vested Options . Executive agrees that, with respect
to all unexercised options previously granted to Executive that are
vested and exercisable on the date hereof (the “ Vested
Options ”), the Company may, without any further need for
Executive’s consent, increase the exercise price of such
options to an amount the Company determines in good faith is equal
to the fair market value of the Company’s common stock on the
date such options were originally granted. Absent manifest
error, the Company’s determination of the appropriate
exercise price shall be final, binding and conclusive.
Executive agrees to execute any document related to such adjustment
reasonably requested by the Company. In the event Executive
exercises any options described in this Section 3(b) prior to any
adjustment contemplated hereby, such options shall be treated in
accordance with Section 3(a). Vested Options shall otherwise
be exercisable after the Separation Date in accordance with their
terms, it being agreed that the Vested Options shall remain
exercisable until the earlier of (i) the date such Vested Options
would otherwise expire (in the absence of Executive’s
retirement) or (ii) the three month anniversary of the Separation
Date (or, if earlier, the latest date on which such Vested Options
may be exercised without incurring any penalty under Section 409A
of the Internal Revenue Code of 1986, as amended (the “
Code ”)). The Company shall consider in good
faith permitting Executive to cancel the Vested Options in exchange
for a cash payment from the Company in an amount equal to the net
amount Executive would have realized upon exercise of the Vested
Options.
(c)
Unvested Options . Effective as of the Effective Date,
the Company agrees to accelerate the vesting and exercisability of
the options described on Exhibit A (the “ Accelerated
Options ”), which Accelerated Options shall then remain
exercisable after
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the Separation Date in accordance
with their terms, it being agreed that the Accelerated
Options shall remain exercisable until the earlier of (i) the date
such Accelerated Options would otherwise expire (in the absence of
Executive’s retirement) or (ii) the three month anniversary
of the Separation Date (or, if earlier, the latest date on which
such Accelerated Options may be exercised without incurring any
penalty under Section 409A of the Code). Promptly after, but
in any event within thirty business days after, the exercise or
cash-out of the Accelerated Options, the net proceeds (which shall
be in the form of shares if the Accelerated Options are exercised
and in cash if the Accelerated Options are cashed out) of such
exercise or cash-out (i.e., after taking into account the payment
of the applicable exercise price, any associated brokerage and
interest costs and applicable taxes) (the “ Escrowed
Funds ”) shall be deposited in escrow (pursuant to an
escrow agreement substantially in the form attached hereto as
Exhibit B and with such changes required by the entity selected as
escrow agent) and held until the expiration of the Consulting Term
(as defined below). The Escrowed Funds shall be payable to
Executive in accordance with the applicable terms of this
Agreement. Any Escrowed Funds that are not payable to
Executive under the terms of this Agreement shall be paid to the
Company after the expiration or termination of the Consulting Term.
The Escrowed Funds will be reduced by the aggregate amount, if any,
that the exercise price of any options described in this Section
3(c) would have been increased pursuant to Section 3(b) if they had
not been exercised prior to any such adjustment. Executive
acknowledges and agrees that he will not be entitled to, and hereby
waives and entitlement he might otherwise have to, accelerated
vesting of any other options other than the Accelerated Options as
a consequence of his retirement from the Company. The Company
shall consider in good faith permitting Executive to cancel the
Accelerated Options in exchange for a cash payment from the Company
in an amount equal to the value of the Escrowed Funds that would
have paid to Executive if (i) the Accelerated Options were
exercised on the date they were terminated, (ii) the net proceeds
of such deemed exercise were deposited into escrow in the form of
shares and (iii) the shares were converted to a cash value at the
time of payment to Executive. For the sake of clarity,
Executive’s entitlement to such payment shall be subject to
the terms and conditions of this Agreement and will not (A) be paid
to Executive if the Escrowed Funds would not have been paid to
Executive and (B) exceed the value of the Escrowed Funds that would
have been paid to Executive but for the application of the
immediately preceding sentence.
(d)
Remaining Options . All unvested options previously
granted to Executive that are not listed on Exhibit A shall be
terminated and canceled as of Executive’s Separation
Date.
4.
Release of Claims .
(a)
General Release . In consideration of the
Company’s obligations hereunder and acceptance of
Executive’s retirement and resignation, Executive, on behalf
of himself and Executive’s heirs, successors, and assigns,
hereby knowingly and voluntarily releases and forever discharges
the Company and its subsidiaries and affiliates, together with all
of their respective current and former officers, directors,
consultants, agents, representatives and employees, and each of
their predecessors, successors and assigns (collectively, the
“ Releasees ”), from any and all debts, demands,
actions, causes of actions, accounts, covenants, contracts,
agreements, claims, damages, omissions, promises, and any and all
claims and liabilities whatsoever, of every name and nature, known
or unknown, suspected or unsuspected, both in law and equity
(“ Claims ”), which Executive ever had, now has,
or may hereafter claim to have against the Releasees by reason of
any matter, cause or thing whatsoever arising from the beginning of
time to the time Executive executes this Agreement (the “
General Release ”). This General Release of
Claims shall apply to any Claim of any type, including, without
limitation, any and all Claims of any type that Executive may have
arising under the common law, under Title VII of the
Civil Rights Act of 1964, the Civil Rights Act
of 1991, the Age Discrimination in
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Employment Act
(“ADEA”), the Older Workers Benefit Protection Act, the
Americans With Disabilities Act, the Family and Medical Leave
Act, the Employee Retirement Income Security Act
(“ERISA”), the Sarbanes-Oxley Act of 2002 or the
California Fair Employment and Housing Act, the California Family
Rights Act, or the California Labor Code section 1400
et seq. , each as amended, and any other
Federal, state or local statutes, regulations, ordinances or common
law, or under any policy, agreement, contract, understanding or
promise, written or oral, formal or informal, between any of the
Releasees and Executive, and shall further apply, without
limitation, to any and all Claims in connection with, related to or
arising out of Executive’s employment, or the termination of
Executive’s employment, with the Company; provided ,
however , that this General Release shall not apply to or
impair (i) claims for vested benefits (excluding any severance
or termination benefits which are specifically waived hereunder)
pursuant to any other Company employee benefit plan, as defined in
ERISA, in which Executive were a participant before the Separation
Date; (ii) any rights to indemnification Executive may have
under the charter, by-laws of the Company or applicable law; or
(iii) any claims that may arise from any violation or breach
of this Agreement. For the purpose of implementing a full and
complete release, Executive understands and agrees that this
Agreement is intended to include all claims, if any, which
Executive may have and which Executive does not now know or suspect
exist in Executive’s favor against the Company or any of the
Releasees and that this Agreement extinguishes those
claims.
(b)
No Claims . Executive represents and warrants that
Executive has not filed any complaints or charges with any court or
administrative agency against the Company or any of the Releasees,
which have not been dismissed, closed, withdrawn or otherwise
terminated on or before the date of this Agreement. Executive
further represents and warrants that Executive has not assigned or
transferred or attempted to assign or transfer, nor will Executive
attempt to assign or transfer, to any person or entity not a party
to this Agreement any of the Claims Executive is releasing in this
Agreement. Furthermore, by signing this General Release of
Claims, Executive represents and agrees that Executive will not be
entitled to any personal recovery in any action or proceeding that
may be commenced on Executive’s behalf arising out of the
matters released hereby.
(c)
ADEA/OWBPA Waiver . Executive specifically releases
and waives any right or claim against the Company arising out of
his employment or his resignation of employment with the Company
under the Age Discrimination in Employment Act, as amended,
29 U.S.C. § 621 et seq. (“
ADEA ”) and the Older Workers Benefit Protection Act,
29 U.S.C. § 621 et seq. (“
OWBPA ”) (such release and waiver referred to as the
“ Waiver ”). Executive understands and
agrees that (i) this Agreement is written in a manner that he
understands; (ii) he does not release or waive rights or
claims that may arise after he signs this Agreement; (iii) he
waives rights and claims he may have had under the OWBPA and the
ADEA, but only in exchange for payments and/or benefits in addition
to anything of value to which he is already entitled;
(iv) Executive has been advised to consult with an attorney
before signing this Agreement; (v) he has twenty-one (21)
calendar days (the “ Offer Period ”) from
receipt of this Agreement to consider whether to sign it. If
Executive signs before the end of the Offer Period, Executive
acknowledges that his decision to do so was knowing, voluntary, and
not induced by fraud, misrepresentation, or a threat to withdraw,
alter, or provide different terms prior to the expiration of the
Offer Period. Executive agrees that changes or revisions to
this Agreement, whether material or immaterial, do not restart the
running of the Offer Period; À
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(vi) Executive has
seven (7) calendar days after signing this Agreement to revoke
the waiver (the “ Revocation Period ”) and
(vii) this Waiver shall not become effective or enforceable
until the Revocation Period has expired. If Executive revokes
the Waiver, Section 5 of this Agreement and the provisions of this
Agreement relating to Executive’s services as a Consultant
(i.e., Sections 6, 7, 8, and 9) shall not be effective or
enforceable and Executive shall not be entitled to the payments or
benefits provided for in Sections 8 or 9 of this
Agreement. To be effective, the revocation must be in writing
and received by Jeffrey R. Binder, Chief Executive Officer, at the
Company’s address set forth in Section 13. The “
Effective Date ” means the date as of which the
Revocation Period expires without Executive having revoked the
Waiver.
5.
Continuing Indemnification . Subject to the terms and
conditions of Section 6.3 of the Company’s Restated Articles
of Incorporation and, to the extent relevant, the Company’s
by-laws, in each case, as in effect on the date hereof, the Company
will advance and pay reasonable expenses (including
attorneys’ fees but not including judgments, penalties,
fines, or settlements) incurred by Executive in connection with (a)
proceedings arising out the Company’s historic grant of
compensatory stock options; and (b) any other proceeding
against or involving the Company in which Executive may be involved
arising out of his position as a director, officer, or employee of
the Company; provided that the Company’s obligation to
advance and pay such expenses shall be subject to the terms of any
undertaking signed by Executive prior to the date hereof (which,
under certain circumstances, requires repayment of expenses paid or
advanced) or, in the absence of such an undertaking, to the
Company’s usual and customary practice with regard to its
current and former employees in such matters. The Company
will indemnify Executive against any judgment, penalty, fine or
settlement related to any of the matters described in the preceding
sentence on the terms and conditions provided in the
Company’s Restated Articles of Incorporation and, to the
extent relevant, by-laws, in each case, as in effect on the date
hereof.
6.
Consulting Term . The Company hereby agrees to engage
Executive as a consultant during the period commencing on the
Separation Date and, unless terminated earlier pursuant to Section
9, continuing until the first anniversary of the Separation Date
(as applicable, the “ Consulting Separation Date
”). The period from the Separation Date to the
Consulting Separation Date shall be referred to as the “
Consulting Term .”
7.
Consulting Services . During the Consulting Term,
Executive shall make himself available to provide such transition
services as are reasonably requested by the Company’s Chief
Executive Officer (“CEO”) or his designee (the “
Company Representative ”), including, without
limitation, services related to transitioning client, supplier,
vendor and distributor relationships to other Company personnel
(the “ Services ”). Executive agrees to
provide the Services at such times and locations as the Company
Representative reasonably requires, it being understood and agreed
that the performance of the Services will require reasonable
amounts of travel. Executive agrees to use his best efforts
to perform the Servi
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