Exhibit
10.4
Biomet, Inc. Executive Severance Pay Plan
Effective as of September 22,
2006
BIOMET, INC. EXECUTIVE
SEVERANCE PAY PLAN
The Biomet, Inc. Executive Severance
Pay Plan (“Plan”) is hereby adopted by Biomet, Inc.
(“Company”), effective September 22, 2006, for a select
group of key management employees of the Company and its affiliates
and/or subsidiaries. The Plan is intended to qualify as a
welfare plan for certain selected employees within the meaning 29
C.F.R. §2520.104-24.
ARTICLE 1
General
Provisions
Biomet, Inc. has established the
Plan, effective September 22, 2006, to provide severance pay and
benefits for Eligible Employees in the case of certain involuntary
Terminations of Employment, as determined by the Administrator in
its sole discretion.
ARTICLE 2
Use of Defined
Terms
Certain defined terms are used
throughout the Plan. The definitions of these terms are
contained in Appendix A attached hereto. Whenever a defined
term is used, it begins with a capital letter. Please refer
to Appendix A for the meaning of capitalized terms as you read the
provisions of the Plan.
ARTICLE 3
Participation
An employee of the Company will
become a Participant immediately upon becoming an Eligible
Employee, and such employee will cease to be a Participant upon the
later of (i) the date on which such employee ceases to be an
Eligible Employee or (ii) the date on which such employee is no
longer entitled to future benefits under the Plan.
ARTICLE 4
Funding of Plan
All Plan benefits are paid from the
Company’s general assets.
ARTICLE 5
Severance
Benefits
Section
5.01.
Payment of Severance Benefits . Subject to the
terms specified herein, if a Participant’s Employment
terminates in a Qualifying Termination, the Employer will pay the
following amounts and provide the following benefits:
(a)
Salary Continuation, in accordance with the Employer’s
standard payroll practices, at the Salary Continuation Rate,
throughout the Continuation Period. Salary Continuation shall
not be considered compensation for purposes of any other benefit
plan of the Company, unless expressly provided for
therein;
(b)
If the Participant is eligible for and elects Continuation Coverage
pursuant to COBRA (with respect to the Participant and/or the
Participant’s dependents who are eligible to elect COBRA
under the Company’s group health plan(s) as a direct result
of the Participant’s Termination of Employment), the Company
shall pay (as of the first of each applicable month) the premiums
for such coverage (or reimburse the Participant for such premiums)
for the Benefits Continuation Period. If the Company pays the
premiums for such coverage, they will constitute taxable income to
the Participant;
(c)
Continued payment of the Participant’s Employer-provided car
allowance, if any, for a period of twelve months from the
Termination Date;
(d)
Payment of a pro-rated portion of the Participant’s target
bonus established from time to time by the Employer for the fiscal
year in which the Termination Date occurs (payable within 75 days
after the end of the Employer’s fiscal year). The
applicable pro-rated percentage to be applied to the
Participant’s target bonus shall be determined, in the sole
discretion of the Employer, based upon the Employer’s
performance and any other performance criteria related to the
Participant’s target bonus; and,
(e)
All outstanding options granted to the Participant by the Employer
on any common shares of stock of Biomet, Inc. will become
immediately vested and exercisable (to the extent not yet vested
and exercisable) as of the Termination Date and shall remain
exercisable until the earlier of (i) the expiration of the
applicable option term (associated with each such option) or (ii)
five (5) years after the Termination Date. To the extent not
otherwise provided under the written agreement, if any, evidencing
the grant of any restricted common shares of stock of Biomet,
Inc. to the Participant by an Employer, all such outstanding
shares that have been granted to the Participant subject to
restrictions that, as of the Termination Date have not yet lapsed,
will lapse automatically upon the Termination Date, and the
Participant will become the owner of such shares free and clear of
all such restrictions.
(f)
Notwithstanding the preceding provisions or any provision in this
Plan to the contrary, this Plan and all payments pursuant hereto
are intended to comply with Code Section 409A and the guidance
thereunder, and this Plan shall be construed accordingly. To
the extent that compliance with Section 409A(a)(2)(B)(i) would
require any payment otherwise provided for by this Plan to be
delayed, such payment shall be made as soon as administratively
feasible after the period of delay required by Code Section
409A(a)(2)(B)(i).
Section
5.02.
Qualified Terminations.
(a)
Subject to the provisions of Subsection (b), the Termination of a
Participant’s Employment will be deemed to be a Qualified
Termination if the termination is, as determined
by the
Administrator, for reasons unrelated to the Participant’s (i)
performance of his employment duties or (ii) his commission of an
act or acts outside of the scope of his employment duties that
would constitute the basis of a termination for cause under his
Change in Control Agreement.
(b)
Notwithstanding Subsection (a), a Termination of Employment will
not be considered a Qualified Termination under any of the
following circumstances, as determined by the
Administrator:
(1)
the Participant
fails to comply with the requirements of Section 5.03;
(2)
the Participant
is offered and accepts employment with (i) the Company (or any of
its related entities) or (ii) an entity (or any of its related
entities) that acquires part or all of the business operations of
the Company;
(3)
the Participant
is offered and rejects Comparable Employment with (i) the Company
(or any of its related entities) or (ii) an entity (or any of its
related entities) that acquires part or all of the business
operations of the Company;
(4)
the
Participant’s employment is terminated because of the
limitation or interruption of business operations by occurrences
beyond the Company’s control, such as an act of war, civil
disturbance, fire, flood, or other disaster;
(5)
the Participant
is entitled to payments or benefits under Participant’s
Change in Control Agreement as a result of the Termination of
Employment;
(6)
the Participant
voluntarily resigns, quits or retires from his position of
employment; or
(7)
the
Participant’s employment is terminated for any reason other
than as provided in Subsection (a).
Section
5.03.
Prerequisites to Receiving Benefits . As a
prerequisite to receiving any benefit hereunder, the Participant
must submit to the Administrator a signed release acceptable to the
Administrator, on a form provided by the Administrator, releasing
the Company and certain related entities from any liability
whatsoever in connection with Participant’s employment
or the termination thereof, except as provided in such release. The
release must have become valid according to its terms, and the
period for revoking the release must have passed. In
addition, Participant must submit to the Administrator a signed
Confidentiality and Non-Compete Agreement acceptable to the
Administrator, on a form provided by the Administrator.
ARTICLE 6
Plan
Administration
The Plan shall be administered by
the Company, which shall be a named fiduciary within the meaning of
the ERISA. In administering the Plan, the Company shall have
the authority to interpret the terms of the Plan, prescribe rules
for administering the Plan, decide disputes regarding the rights of
Participants under the Plan, and perform all other functions
necessary or appropriate to the administration of the Plan.
In performing its duties as Administrator, the Company shall have
the authority to exercise its discretion to the maximum extent
permitted by law. Benefits shall be paid under this Plan only
if the Administrator, in its sole discretion, determines that the
applicant for benefits hereunder is entitled to such
benefits.
ARTICLE 7
Claims and Appeals
Procedures
Section
7.01.
Claims for Benefits .
(a)
All claims for Plan benefits will be subject to the rules set out
in this Article. If a Participant believes that he is
entitled to benefits that have not been provided, he may file a
claim, either directly or through an authorized representative, by
mailing a written notice of the claim to the Company’s
General Counsel .
(b)
The Administrator will provide the claimant with written or
electronic notice of its approval or denial of a properly filed
claim within 90 days after receiving the claim, unless special
circumstances require an extension of the decision period. If
special circumstances require an extension of the period for
processing the claim, the first 90-day decision period may be
extended for up to an additional 90 days. If an extension of
the first 90-day period i
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