Exhibit 10.7
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (the
“Agreement”), effective as of the 6th day of February,
2006, is entered into among Stephen T.D. Dixon (the
“Employee”), Alphatec Manufacturing, Inc., a California
corporation (the “Company”), and Alphatec Holdings,
Inc., a Delaware corporation (“Parent”).
1.
Employment . Employee’s employment with the
Company shall commence on February 6, 2006 (the “Commencement
Date”) and shall continue upon the terms set forth in this
Agreement for the period set forth in Section 2 hereof.
2.
Term of Employment .
(a)
Until such time as either the Employee or the Company terminates
the employment as set forth herein, the term of the
Employee’s employment shall be three years from the
Commencement Date (the “Initial Term”).
(b)
The Initial Term shall be automatically renewed as of each
anniversary of the Commencement Date for an additional twelve-month
period unless the Company or the Employee delivers to the other, at
least 30 days prior to each anniversary date, written notice
specifying that the Employee’s employment will not be renewed
at the end of the then-applicable term of the
Agreement.
3.
Title; Capacity; Office .
(a) The
Company shall employ Employee, and Employee agrees to work for the
Company as its Chief Financial Officer and Vice President.
Employee shall perform the duties and responsibilities inherent in
the position in which he serves and such other duties and
responsibilities as the President and Chief Executive Officer (the
“CEO”) shall from time to time reasonably assign to
him. Employee shall report to the CEO.
(b)
Employee’s office shall be located at the Company’s
headquarters in Carlsbad, California, or at such other corporate
headquarters approved by the Board of Directors (the
“Board”).
4.
Compensation and Benefits . While employed by the
Company, Employee shall be entitled to the following (it being
agreed, for the avoidance of doubt, that, except as provided in
Section 6.2, amounts payable on the happening of any specified
event will not be payable if the Employee is not employed by the
Company upon the happening of such event):
4.1
Salary . The Company shall pay Employee an annual base
salary of $285,000.00, less applicable payroll withholdings,
payable in accordance with the Company’s customary payroll
practices, with salary increases, if any, to be determined by the
CEO on an annual basis beginning January, 2007.
4.2
Performance Bonus . Employee will be eligible to
receive a cash performance bonus each fiscal year, payable the
conclusion of the Company’s end of the fiscal year audit, in
an amount of up to 50% of the base salary received by Employee for
such fiscal year. Performance bonuses shall be based upon the
achievement of objectives established by the CEO.
4.3
Intentionally Omitted .
4.4
Fringe Benefits . Employee will be entitled to
participate in all benefit programs that the Company establishes
and makes available to its management Employees. Employee
will also be entitled to take fully paid vacation in accordance
with Company policy, which shall be not less than three (3) weeks
per calendar year. Following the second anniversary of the
Commencement Date Employee shall be entitled to four (4) weeks of
vacation per calendar year.
4.5
Reimbursement of Expenses . Subject to the
Company’s standard policies and procedures, as determined by
the CEO or the Board from time to time, Employee shall be entitled
to prompt reimbursement for reasonable expenses incurred or paid by
him in connection with, or related to the performance of, his
duties, responsibilities or services under this Agreement, upon
presentation by Employee of documentation, expense statements,
vouchers and/or such other supporting information as the Company
may reasonably request.
4.6
Equity . Upon the Commencement Date, Employee shall be
granted options to purchase 35,000 shares of Series A-1 Common
Stock of Parent. The options shall be issued at the fair
market value of the Series A-1 Common Stock on the date of issuance
and shall be issued pursuant to an incentive stock option agreement
that shall, among other things, contain a five-year vesting period
with immediate vesting upon a change of control.
5.
Termination of Employment Period . The Agreement shall
terminate upon the occurrence of any of the following:
5.1
Termination for Cause . At the election of the
Company, for Cause. For the purposes of this Section 5.1,
“Cause” for termination shall be deemed to exist upon
the occurrence of any of the following:
(a)
a written finding by the CEO made after reasonable investigation
that Employee has engaged in dishonesty, gross negligence or gross
misconduct that is injurious to the Company, and notice to such
Employee of such written finding;
(b)
Employee’s conviction or entry of nolo contendere to any
felony or crime involving moral turpitude, fraud or embezzlement of
Company property; and
(c)
a written finding by the CEO that Employee has engaged in a
material breach of this Agreement, and that, after written notice
of the right to cure within thirty (30) days, has not cured such
material breach.
5.2
Termination by the Company Without Cause . At the
election of the Company, without Cause, at any time, upon thirty
(30) days’ written notice to Employee. Any
2
material change
in the duties or reporting responsibilities of Employee shall be
treated, at the election of Employee, as a termination without
cause.
5.3
Voluntary Termination . At the election of the
Employee, for any reason, upon thirty (30) days’ notice to
the Company.
6.
Effect of Termination .
6.1
Termination for Cause or at the Election of Employee .
In the event that Employee’s employment is terminated for
Cause pursuant to Section 5.1 or at the Election of the Employee
pursuant to Section 5.3, the Company shall have no further
obligations under this Agreement other than to pay to Employee the
compensation and benefits, including payment for accrued but
untaken vacation days, otherwise payable to him under Section 4
through the last day of his actual employment by the
Company.
6.2
Termination by the Company Without Cause . In the
event that Employee’s employment is terminated pursuant to
Section 5.2, the Company shall continue for a period of 12 months
(“Severance Period”), to pay to Employee his annual
base salary then in effect in the manner set forth in Section 4.1
and payment for accrued but untaken vacation days. During the
Severance Period, Employee shall be entitled to continue to
participate in all benefit programs that the Company establishes
and makes available to its management Employees.
7.
Non-disclosure and Non-competition .
7.1
Proprietary Information .
(a)
Employee agrees that all information and know-how, whether or not
in writing, of a private, secret or confidential nature concerning
the Company’s business or financial affairs (collectively,
“Proprietary Information”) is and shall be the
exclusive property of the Company. By way of illustration,
but not limitation, Proprietary Information may include inventions,
products, processes, methods, techniques, formulas, compositions,
compounds, projects, developments, plans, research data, clinical
data, financial data, personnel data, computer programs, and
customer and supplier lists. Employee will not disclose any
Proprietary Information to others outside the Company or use the
same for any unauthorized purposes without written approval by an
officer of the Company, either during or after his employment,
unless and until such Proprietary Information has become public
knowledge without fault by Employee. `
(b) &n
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