Exhibit 10.2
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (the
“Agreement”), made this 18th day of October, 2006 (the
“Commencement Date”), is entered into among Steven M.
Yasbek (“Executive”), Alphatec Spine, Inc., a
California corporation (the “ASI”), and Alphatec
Holdings, Inc., a Delaware corporation (“Parent”)
(collectively, ASI and Parent shall be referred to as the
“Company”).
1. Commencement . This
Agreement shall become effective on the Commencement Date and shall
govern Executive’s employment by the Company.
2. At-will Employment . The
parties to this Agreement agree and acknowledge that the
Executive’s employment pursuant to this Agreement shall be
considered at will. Either party may terminate this Agreement at
any time, with or without Cause (as defined below) pursuant to the
terms of this Agreement.
3. Title; Capacity; Office .
The Company shall employ Executive, and Executive agrees to work
for the Company, as its Vice President and Chief Financial Officer.
Executive shall perform the duties and responsibilities inherent in
the position in which Executive serves and such other duties and
responsibilities as the President and Chief Executive Officer (or
his or her designee(s)) shall from time to time reasonably assign
to Executive. Executive shall report to the President and Chief
Executive Officer (or his or her designee(s)).
4. Compensation and Benefits
. While employed by the Company, Executive 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
Executive is not employed by the Company upon the happening of such
event):
4.1 Salary . Commencing on
the Commencement Date, the Company shall pay Executive an annual
base salary of $225,000.00, less applicable payroll withholdings,
payable in accordance with the Company’s customary payroll
practices, with salary increases, if any, to be determined by the
Board on an annual basis in January of each subsequent year of
Executive’s employment.
4.2 Performance Bonus .
Executive will be eligible to receive a cash performance bonus each
fiscal year in an amount equal to 40% of the annual base salary for
such fiscal year (the “Total Bonus Amount”) based on
Executive’s achievement of quarterly and annual performance
objectives established by the Board or their designee(s) at the
beginning of each fiscal year. Up to twelve and a half percent
(12.5%) of the Total Bonus Amount shall be payable within 60
days of the end of each fiscal quarter (for a total of up to 50% of
the Total Bonus Amount), based on Executive’s achievement of
quarterly objectives, and up to fifty percent (50%) of the
Total Bonus Amount shall be payable within 60 days after the end of
the fiscal year, based on Executive’s achievement of annual
objectives. For fiscal year 2006, the Total Bonus Amount shall be
based on the achievement of objectives established by the board of
directors of the Company or their designee(s) (collectively, the
“Board”) for such year.
4.3 Fringe Benefits .
Executive shall be entitled to participate in all benefit programs
that the Company establishes and makes available to its management
employees. Executive 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, with no forfeiture for
unused vacation days.
4.4 Reimbursement of Expenses
. Executive shall be entitled to prompt reimbursement for
reasonable expenses incurred or paid by Executive in connection
with, or related to the performance of, Executive’s duties,
responsibilities or services under this Agreement, upon
presentation by Executive of documentation, expense statements,
vouchers and/or such other supporting information as the Company
may reasonably request.
4.5 Equity . Upon the
execution of this Agreement, the Executive shall be granted options
to purchase 37,910 shares of the common stock of Parent (the
“Options”), which Options shall have an exercise price
equal to the closing price of Parent’s common stock on the
trading day prior to issuance. The Options shall vest over a
five-year period in equal amounts beginning on the first
anniversary of the date of issuance, and shall vest immediately
upon a Change in Control (as defined in the Plan referenced below).
The Options shall be subject, in all respects, to (i) the
Alphatec Holdings, Inc. 2005 Employee, Director and Executive Stock
Plan (the “Plan”), (ii) a Nonqualified Stock
Option Agreement to be entered into by Holdings and the Executive,
and (iii) the Stockholders’ Agreement dated as of
March 17, 2005 between Holdings and its stockholders, to which
the Executive hereby agrees to be subject.
5. Termination of Employment
. The Executive’s employment shall terminate upon the
occurrence of any of the following:
5.1 Termination by the Company
for Cause . This Agreement may be terminated by the Company for
Cause upon the occurrence of any of the following (each of which
shall constitute “Cause”): (i) Executive being
convicted of a felony; (ii) Executive committing any act of
fraud or dishonesty resulting or intended to result directly or
indirectly in personal enrichment at the expense of the Company;
(iii) failure or refusal by Executive to follow policies or
directives reasonably established by the President and Chief
Executive Officer or his or her designee(s) that goes uncorrected
for a period of thirty (30) consecutive days after written
notice has been provided to Executive; (iv) a material breach
of this Agreement that goes uncorrected for a period of thirty
(30) consecutive days after written notice has been provided
to Executive; (v) any gross or willful misconduct or gross
negligence by Executive in the performance of Executive’s
duties; (vi) egregious conduct by Executive that brings
Company or any of its subsidiaries or affiliates into public
disgrace or disrepute; or (vii) a material violation of the
Company’s Code of Conduct.
5.2 Termination Without Cause
. At the election of the Company, without Cause, at any time, upon
thirty (30) days written notice to Executive.
5.3 Voluntary Termination .
At the election of the Executive, for any reason, upon thirty
(30) days notice to the Company.
6. Effect of Termination
.
2
6.1 Termination for Cause or at
the Election of Executive . In the event that Executive’s
employment is terminated for Cause pursuant to Section 5.1 or
at the election of the Executive pursuant to Section 5.3, the
Company shall have no further obligations under this Agreement
other than to pay to Executive the base salary and benefits,
including payment for accrued but untaken vacation days, otherwise
payable to Executive under Sections 4.1 through 4.3 respectively
through the last day of Executive’s actual employment by the
Company.
6.2 Termination by the Company
Without Cause . In the event that Executive’s employment
is terminated pursuant to Section 5.2, the Company shall
continue for a period of twelve (12) months (the
“Severance Period”), to pay to Executive the annual
base salary then in effec
