EXHIBIT
10.1
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 Greg Hartman
(“ 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 transitioning 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 Chief
Financial Officer.
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.
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 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 to promptly pay the
Discount.
(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 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 ”)).
(c)
Remaining Options . 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 unvested
options as a consequence of his retirement from the Company.
All unexercised options previously granted to Executive that are
not described in Section 3(b) 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,
Executive’s heirs, successors, and assigns, hereby knowingly
and voluntarily release and forever discharge 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 ”),
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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
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 by-laws of the Company or applicable law; or
(iii) any claims that may arise from any violation 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 to 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 this 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
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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; (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 w aiver, 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.
5.
Continuing Indemnification . Subject to the terms and
conditions of Section 6.3 of the Company's Restated Articles of
Incorporation 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; (b) any
other proceeding against Executive pending as of the date hereof
arising out of his position as a director, officer, or employee of
the Company; and (c) any other proceeding against or involving the
Company in which Executive may be involved; 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.
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 six month 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 or his designee (the “ Company
Representative ”), including, without limitation,
assisting the Company in preparing its financial statement and
other related documents and transitioning to other Company
personnel the information necessary to prepare the Company’s
financial statements (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
could require reasonable amounts of travel. Executive agrees
to use his best efforts to perform the Services in a professional
and competent manner.
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8.
Consulting Compensation and Expense .
(a)
During the Consulting Term, Executive shall receive for the
Services to be rendered hereunder a monthly retainer (the “
Retainer ”) of $29,166 (i.e., an aggregate Retainer of
$175,000), which shall be paid monthly in
arrears.
(b)
The Company shall
reimburse Executive for reasonable expenses incurred in connection
with rendering the Services hereunder in accordance with policies
adopted by the Company form time to time.
(c)
During the
Consulting Term, the Company shall pay or reimburse Executive the
monthly amounts necessary to continue health care coverage for
Executive and his eligible dependents pursuant to Section 4980B of
the Code.
(d)
Promptly after the later of the expiration of the Consulting Term
and closing of the transactions contemplated by Agreement and Plan
of Merger by and Among Biomet, Inc., LVB Acquisition Merger Sub,
Inc. and LVB Acquisitions LLC (the “ Transaction
Agreement ”) at a price per share of common stock,
without par value, of the Company (a “ Share ”)
of at least $44, the Company shall pay Executive a bonus in an
amount equal to the sum of $325,000 (the “
Final Payment ”); provided that Executive shall
be entitled to the Final Payment if the Transaction is consummated
at a price per share of less than $44 and the Company determines in
its sole discretion that the reduction in purchase price is
unrelated, in whole or in part, to (i) the Investigation and (ii)
any other matter related to the account practices or financial
statements of the Company or its subsidiaries. As a condition
to receiving
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