Exhibit 10.32
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (“
Agreement ”), dated as of March 3, 2008 (the
“ Effective Date ”), is made by and between
Biomet, Inc., an Indiana corporation (the “ Company
”), and Jon Serbousek (the “ Executive
”).
WHEREAS, the Company desires to
engage the Executive, and the Executive desires to be engaged by
the Company, as President, Biomet Orthopedics, Inc.; and
WHEREAS, the Company and the
Executive desire to enter into this Agreement to set out the terms
and conditions for the employment relationship of the Executive
with the Company;
NOW, THEREFORE, in consideration of
the mutual covenants and agreements set forth herein and for other
good and valuable consideration, the receipt and sufficiency of
which hereby are acknowledged, the parties hereto agree as
follows:
1. Employment Agreement . On
the terms and conditions set forth in this Agreement, the Company
agrees to employ the Executive and the Executive agrees to be
employed by the Company for the Employment Period set forth in
Section 2 and in the positions and with the duties set forth
in Section 3. Terms used herein with initial capitalization
not otherwise defined are defined in Section 23.
2. Term . The initial term of
employment under this Agreement shall be for a three-year period
commencing on the Effective Date (the “ Initial Term
”). The term of employment shall be automatically extended
for an additional consecutive 12-month period (the “
Extended Term ”) on the first anniversary of the
Effective Date and each subsequent anniversary of the Effective
Date, unless and until the Company or Executive provides written
notice to the other party in accordance with Section 11 hereof
not less than 90 days before such anniversary date that such party
is electing not to extend the term of employment under this
Agreement (“ Non-Renewal ”), in which case the
term of this Agreement shall end as of the end of such Initial Term
or Extended Term, as the case may be, unless sooner terminated as
hereinafter set forth. Such Initial Term and all such Extended
Terms are collectively referred to herein as the “
Employment Period .”
3. Position and Duties .
During the Employment Period, the Executive shall serve as
President, Biomet Orthopedics, Inc. In such capacity, the Executive
shall report to the Company’s Chief Executive Officer. During
the Employment Period, the Executive shall have the powers and
authority customarily exercised by individuals serving as President
of a major business unit (of the size and nature of Biomet
Orthopedics, Inc.) of a company of the size and nature of the
Company. The Executive shall devote the Executive’s
reasonable best efforts and full business time to the performance
of the Executive’s duties hereunder and the advancement of
the business and affairs of the Company; provided that the
Executive shall be entitled to serve as a member of the board of
directors of another company approved by the Board, to serve on
civic, charitable, educational, religious, public interest or
public service boards approved by the Board, and to manage the
Executive’s personal and family investments, in each case, to
the extent such activities do not, individually or in the
aggregate, materially interfere with the performance of the
Executive’s duties and responsibilities hereunder.
4. Place of Performance .
During the Employment Period, the Executive shall be based
primarily at the principal executive offices of the Company in
Warsaw, Indiana, except for reasonable travel on the
Company’s business consistent with the Executive’s
position. It is agreed and understood that Executive will commute
to and from the principal executive offices of the Company for the
initial eighteen months of the Employment Period.
5. Compensation and
Benefits
(a) Base Compensation .
During the Employment Period, the Company shall pay to the
Executive a base salary (the “ Base Salary ”) at
the rate of no less than $390,000 per year. The Base Salary shall
be reviewed for increase by the Company no less frequently than
annually and shall be increased in the discretion of the Company
and any such adjusted Base Salary shall constitute “Base
Salary” for purposes of this Agreement. The Base Salary shall
be paid in substantially equal installments in accordance with the
Company’s regular payroll procedures.
(b) Annual Bonus . The
Executive shall be given the opportunity to earn an annual
incentive bonus for each fiscal year that ends during the
Employment Period in accordance with the annual bonus plan
generally applicable to the Company’s executive officers, as
the same may be in effect from time to time (the “ Annual
Plan ”). The Executive’s target annual incentive
bonus opportunity under the Annual Plan shall be no less than 80%
of the Executive’s Base Salary for on-target performance with
the possibility of exceeding 80% for high achievement, provided
that, for the Company’s fiscal year 2008 (ending May 31,
2008), Executive shall be eligible for a prorated annual incentive
bonus for fiscal year 2008; subsequent thereto, Executive will be
eligible for the annual incentive bonus as provided herein. The
actual amount payable to the Executive as an annual bonus under the
Annual Plan shall be dependent upon the achievement of performance
objectives established in accordance with the Annual Plan by the
Board or the compensation committee of the Board (or its successor
committee) (the “ Compensation Committee ”). Any
bonus payable pursuant to this Section 5(b) shall be paid at
the same time annual bonuses are payable to other officers of the
Company in accordance with the terms of the Annual Plan.
(c) Vacation; Benefits .
During the Employment Period, the Company shall provide to the
Executive employee benefits and perquisites on a basis that is no
less favorable than that provided to other senior officers of the
Company, including participation in the Company’s deferred
compensation plan (if any), as in effect from time to time. It is
agreed that Executive will be eligible for four (4) weeks
vacation each fiscal year during the Employment Period commencing
in fiscal year 2009. Subject to the terms of this Agreement, all
benefits are provided at the Company’s sole discretion.
Subject to the terms of this Agreement, the Company shall have the
right to change insurance carriers and to adopt, amend, terminate
or modify employee benefit plans and arrangements at any time and
without the consent of the Executive.
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(d) Relocation Expenses . In
connection with the Executive’s commencement of his
employment with the Company, pursuant to and subject to the terms
of the Biomet Relocation Service Policy, the Company shall pay (or
reimburse Executive for) Executive’s actual relocation
expenses from Tennessee to the greater Warsaw, Indiana
area.
(e) Sign-On Bonus . The
Company shall pay to Executive, within thirty (30) days of the
date on which Executive commences his active employment with the
Company, a lump sum cash payment of $200,000 (the “
Sign-On Bonus ”). The Executive shall be required to
repay the Sign-On Bonus to the Company if, prior to the second
anniversary of the Effective Date, the Executive terminates his
employment with the Company other than for Good Reason or the
Company terminates the Executive’s employment for Cause,
provided that such repayment obligation shall lapse with respect to
twenty-five percent (25%) of the Sign-On Bonus for each six
(6) month period of employment completed by Executive
commencing on the Effective Date.
6. Expenses . The Executive
is expected and is authorized to incur reasonable expenses in the
performance of his duties hereunder. The Company shall reimburse
the Executive for all such expenses reasonably and actually
incurred in accordance with policies which may be adopted from time
to time by the Company promptly upon periodic presentation by the
Executive of an itemized account, including reasonable
substantiation, of such expenses.
7. Confidentiality,
Non-Disclosure and Non-Competition Agreement . The Company and
the Executive acknowledge and agree that during the
Executive’s employment with the Company, the Executive will
have access to and may assist in developing Company Confidential
Information and will occupy a position of trust and confidence with
respect to the Company’s affairs and business and the affairs
and business of the Company’s Affiliates. The Executive
agrees that the following obligations are necessary to preserve the
confidential and proprietary nature of Company Confidential
Information and to protect the Company and its Affiliates against
harmful solicitation of employees and customers, harmful
competition and other actions by the Executive that would result in
serious adverse consequences for the Company and its
Affiliates:
(a) Non-Disclosure . During
the Executive’s employment with the Company and thereafter,
the Executive will not knowingly use, disclose or transfer any
Company Confidential Information other than as authorized in
writing by the Company or within Executive’s good faith
interpretation of the scope of the Executive’s duties.
Anything herein to the contrary notwithstanding, the provisions of
this Section 7(a) shall not apply (i) when disclosure is
required by law or by any court, arbitrator, mediator or
administrative or legislative body (including any committee
thereof) with actual or apparent jurisdiction to order the
Executive to disclose or make accessible any information; or
(ii) to information that becomes generally known to the public
or within the relevant trade or industry other than due to the
Executive’s violation of this Section 7(a).
(b) Materials . The Executive
will not remove any Company Confidential Information or any other
property of the Company or any of its Affiliates from the
Company’s premises or make copies of such materials except
for normal and customary use in the
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Company’s business. The Company
acknowledges that the Executive, in the ordinary course of his
duties, routinely uses and stores Company Confidential Information
at home and other locations. The Executive will return to the
Company all Company Confidential Information and copies thereof and
all other property of the Company or any of its Affiliates at any
time upon the request of the Company and in any event promptly
after termination of Executive’s employment. The Executive
agrees to attempt in good faith to identify and return to the
Company any copies of any Company Confidential Information after
the Executive ceases to be employed by the Company. Anything to the
contrary notwithstanding, nothing in this Section 7 shall
prevent the Executive from retaining a home computer, papers and
other materials of a personal nature (including diaries and
calendars), information relating to his compensation or relating to
reimbursement of expenses, information that he reasonably believes
may be needed for tax purposes, and copies of plans, programs and
agreements relating to his employment.
(c) No Solicitation or Hiring of
Employees . During the Non-Compete Period, the Executive shall
not solicit, entice, persuade or induce any individual who is
employed by the Company or any of its Affiliates (or who was so
employed within 180 days prior to the Executive’s action) to
terminate or refrain from continuing such employment or to become
employed by or enter into contractual relations with any other
individual or entity other than the Company or any of its
Affiliates, and the Executive shall not, directly or indirectly,
hire, or participate in the hiring, as an employee, consultant or
otherwise, any such Person.
(d) Non-Competition
.
(i) During the Non-Compete Period,
the Executive shall not, directly or indirectly, (A) solicit
or encourage any client or customer of the Company or any of its
Affiliates, or any Person who was a client or customer within 180
days prior to Executive’s action to terminate, reduce or
alter in a manner adverse to the Company, any existing business
arrangements with the Company or any of its Affiliates or to
transfer existing business from the Company or any of its
Affiliates to any other Person, (B) provide services to any
entity that competes with the Company or its Affiliate in the
United States or any other jurisdiction in which the Executive has
any responsibility during his employment hereunder or that provides
a product or service competitive with any product or service
provided by the Company or its Affiliate or (C) own an
interest in any entity described in subsection (B) immediately
above; provided, however, that Executive may own, as a passive
investor, securities of any such entity that has outstanding
publicly traded securities so long as his direct holdings in any
such entity shall not in the aggregate constitute more than 2% of
the voting power of such entity. The Executive agrees that, before
providing services, whether as an employee or consultant, to any
entity during the Non Compete Period, he will provide a copy of
this Agreement to such entity and acknowledge, to the Company in
writing, that he has done so. Notwithstanding the foregoing,
nothing in this Section 7 shall prevent the Executive from
providing services to a division or a subsidiary of an entity that
does not compete with the Company or any of its Affiliates and that
does not provide products or services competitive with products or
services provided by the Company or any of its Affiliates even if
other divisions or subsidiaries of that entity compete with the
Company so long as the Executive does not have any managerial or
supervisory authority with respect to such competitive division or
subsidiary. The Executive acknowledges that this covenant has a
unique, very substantial and immeasurable value to the
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Company, that the Executive has sufficient
assets and skills to provide a livelihood for the Executive while
such covenant remains in force and that, as a result of the
foregoing, in the event that the Executive breaches such covenant,
monetary damages would be an insufficient remedy for the Company
and equitable enforcement of the covenant would be proper. The
Executive further covenants that he shall not challenge the
reasonableness of any of the covenants set forth in this
Section 7, but reserves the right to challenge the
Company’s interpretation of such covenants.
(ii) If the restrictions contained
in Section 7(d)(i) shall be determined by any court of
competent jurisdiction to be unenforceable by reason of their
extending for too great a period of time or over too great a
geographical area or by reason of their being too extensive in any
other respect, Section 7(d)(i) shall be modified to be
effective for the maximum period of time for which it may be
enforceable and over the maximum geographical area as to which it
may be enforceable and to the maximum extent in all other respects
as to which it may be enforceable.
(e) Publicity . During the
Employment Period, the Executive hereby grants to the Company the
right to use, in a reasonable and appropriate manner, the
Executive’s name and likeness, without additional
consideration, on, in and in connection with technical, marketing
or disclosure materials, or any combination thereof, published by
or for the Company or any of its Affiliates.
(f) Conflicting Obligations and
Rights . The Executive represents and warrants that he is not
subject to agreement or contractual commitment that prevents or in
any way limits his ability to fully discharge his duties and
responsibilities hereunder and that he is not in possession of any
confidential or proprietary information of another Person that will
be used in connection with the discharge of his duties hereunder,
provided that the parties acknowledge and agree that the scope of
the Executive’s duties hereunder shall not include performing
services in the spinal and biologics businesses as those businesses
were understood by Medtronic, Inc. at the time of Executive’s
effective resignation date as an employee of Medtronic, Inc. The
Executive acknowledges and agrees that the accuracy of the
foregoing representation and warranty is a condition precedent to
the enforceability of the Company’s obligations
hereunder.
(g) Enforcement . The
Executive acknowledges that in the event of any breach of this
Section 7, the business interests of the Company and its
Affiliates will be irreparably injured, the full extent of the
damages to the Company and its Affiliates will be impossible to
ascertain, monetary damages will not be an adequate remedy for the
Company and its Affiliates, and the Company will be entitled to
enforce this Agreement by a temporary, preliminary and/or permanent
injunction or other equitable relief, without the necessity of
posting bond or security, which the Executive expressly waives. The
Executive understands that the Company may waive some of the
requirements expressed in this Agreement, but that such a waiver to
be effective must be made in writing and should not in any way be
deemed a waiver of the Company’s right to enforce any other
requirements or provisions of this Agreement. The Executive agrees
that each of the Executive’s obligations specified in this
Agreement is a separate and independent covenant and that the
unenforceability of any of them shall not preclude the enforcement
of any other covenants in this Agreement.
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8. Termination of Employment
. The Executive’s employment hereunder may be terminated
during the Employment Period under the following
circumstances:
(a) Death . The
Executive’s employment hereunder shall terminate upon the
Executive’s death;
(b) By the Company . The
Company may terminate the Executive’s employment
for:
(i) Disability . If the
Executive shall have been substantially unable to perform the
Executive’s material duties hereunder by reason of illness,
physical or mental disability or other similar incapacity, which
inability shall continue for 90 consecutive days or 180
non-consecutive days in any 24-month period and which qualified
Executive for long term disability coverage under applicable
Company disability plans (a “ Disability
”);
(ii) Cause . The Company may
terminate the Executive’s employment for Cause as defined
herein; or
(iii) Without Cause . The
Company may terminate the Executive’s employment without
Cause at any time upon not less than 90 days notice to the
Executive. The Company’s Non-Renewal of the Initial Term or
the Extended Term shall constitute a termination of the
Executive’s employment by the Company without Cause, and the
Company’s notice of Non-Renewal pursuant to Section 2
hereof shall constitute notice of termination without Cause for
purposes of this Section 8(b)(iii). Notwithstanding the
foregoing, the Company’s Non-Renewal of the Initial Term or
the Extended Term shall constitute a termination of the
Executive’s employment by the Company without Cause only if
the Company determines that a “separation from service”
within the meaning of Treasury Regulation 1.409A-1(h) has
occurred.
(c) By the Executive . The
Executive may terminate his employment with or without Good Reason
upon not less than 90 days notice to the Company. The
Executive’s Non-Renewal of the Initial Term or the Extended
Term shall constitute a termination of employment by the Executive
without Good Reason, and the Executive’s notice of
Non-Renewal pursuant to Section 2 hereof shall constitute
notice of the Executive’s termination of his employment for
purposes of this Section 8(c). During this 90-day notice
period, the Company may, without breaching this Agreement or
constituting Good Reason or a Termination without Cause, relieve
the Executive of his positions, titles, duties and responsibilities
and direct the Executive to cease appearing on Company property.
Notwithstanding the foregoing, the Executive’s Non-Renewal of
the Initial Term or the Extended Term shall constitute a
termination of employment by the Executive without Good Reason only
if the Company determines that a “separation from
service” within the meaning of Treasury Regulation
1.409A-1(h) has occurred.
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(d) Notice of Termination .
Any termination of the Employment Period, other than pursuant to
the Executive’s death, shall be effected by delivery to the
other party of a notice of termination (a “ Notice of
Termination ”) from the party terminating the Employment
Period.
(e) Other Resignations . Upon
any termination of the Executive’s employment, he shall
automatically resign, and shall automatically be deemed to have
resigned, from all positions with the Company and its
Affiliates.
9. Compensation Upon
Termination .
(a) Death . If the
Executive’s employment is terminated during the Employment
Period as a res
