Exhibit 10.5
RETENTION
AGREEMENT
AGREEMENT, made and entered into as
of February 15, 2005, by and between REGENERATION TECHNOLOGIES,
INC., a Delaware corporation (the “Company”), and
JOSEPH CONDON (the “Executive”).
WHEREAS, the Company has previously
announced it is exploring a range of strategic alternatives to
enhance stockholder value; and
WHEREAS, the Company desires to
provide certain incentive opportunities and severance protection to
the Executive in the event the strategic review process leads to a
sale of the Company (a “Transaction”—which is
defined in numbered paragraph 7(c) below)).
NOW THEREFORE, the parties agree as
follows:
1. Transaction Incentive
Opportunity . Executive will be entitled to receive a retention
bonus of $83,200 if a Transaction occurs before December 31, 2005,
and (a) Executive’s employment with the Company (or its
successor) continues until the date that is six months following
the date on which the Transaction is consummated (the
“Closing Date”), or (b) Executive’s employment is
terminated before that date by the Company (or its successor)
without “Cause” (as defined below) or by reason of the
Executive’s death. The retention bonus (if any) payable under
this Agreement will be payable in the form of a single sum cash
payment immediately following the end of such six-month retention
period or, if applicable, upon the earlier death or termination of
Executive’s employment, subject to applicable
withholding.
2. Severance Protection . If
a Transaction occurs before December 31, 2005, and if, before the
second anniversary of the Closing Date, the Company or any
successor entity (the “Employer”) terminates
Executive’s employment without Cause or such employment is
terminated by the Executive following the Closing Date for
“Good Reason” (as defined below), then, within ten days
following such termination of employment, the Executive will be
entitled to receive from the Employer (a) a single sum cash payment
equal to the sum of (1) Executive’s annual incentive target
for the year in which such termination occurs (or, if higher, for
the year in which the Transaction occurs), pro-rated to reflect the
portion of the year that has elapsed as of the date of
Executive’s termination of employment, and (2) an amount
equal to one times Executive’s annual salary plus annual
incentive target (based on the higher of Executive’s present
or then current annual incentive target and salary), and (b)
continuing participation in the Employer’s group health plan
on the same basis as active employees for a period of at least one
year following the termination of Executive’s employment or,
if earlier, until the Executive becomes eligible for comparable
coverage under another employer’s plan (or an additional cash
payment equal to the Employer’s cost of such continuing
coverage if such continuing coverage is not permitted under the
provisions of the applicable plan). The Executive’s right to
receive severance payments and benefits under this numbered
paragraph 2 shall not affect the Executive’s right to receive
a retention bonus under numbered paragraph 1, and vice
versa.
3. Effect of Transaction on Stock
Options . All outstanding Company stock options held by
Executive shall become fully vested immediately before the
occurrence of the Transaction if (a) Executive is then still
employed by Company or an Affiliate; or (b)
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Executive’s employment with the Company
terminated before the Closing Date for any reason other than
voluntarily by the Executive or by the Company for Cause. If
Executive becomes vested in a stock option award pursuant to part
(b) of the preceding sentence, then, immediately before the
Transaction, the Company will make a cash payment to Executive
equal to the number of shares covered by the option multiplied by
the excess of the Transaction purchase price per share over the per
share option exercise price. The vesting and other terms
and
