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Exhibit
10.2
SEPARATION AND
RETIREMENT AGREEMENT
THIS RETIREMENT AGREEMENT
(this “ Agreement ”) is made as of June 6,
2007 by and between BIOMET, INC., an Indiana corporation (“
Company ”), and Charles E. Niemier (“
Executive ”).
WHEREAS, Executive has
elected to retire from the Company and to resign all his positions
with the Company effective as of June 18, 2007;
WHEREAS, the Company is
currently negotiating a sale that would result in a Change in
Control Event should the sale be consummated;
WHEREAS, the parties have
agreed to resolve certain matters related to Executive’s
retirement;
NOW, THEREFORE, in
consideration of the foregoing premises and the respective
agreements hereinafter set forth and the mutual benefits to be
derived herefrom, Company and Executive hereby agree as
follows:
1. Retirement and
Resignation . Effective as of June 18, 2007 (the “
Separation Date ”), Executive hereby retires from the
Company and, as a consequence, voluntarily resigns his employment
and all positions with the Company and all of its affiliates,
including without limitation Executive’s position as Senior
Vice President, Biomet, Inc., President EBI, L.P., Biomet Spine and
Biomet Trauma; provided that Executive shall retain his position as
a member of the Company’s Board of Directors (the “
Board ”).
2. Severance . The
parties acknowledge and agree that Executive’s termination of
employment constitutes a “Qualified Termination” under
the Biomet, Inc. Executive Severance Plan (the “ Severance
Plan ”). Commencing on the Effective Date (as defined
below), Executive shall be entitled to receive the applicable
payments and benefits specified in the Severance Plan until the
occurrence of a Change in Control Event, at which point Executive
shall no longer have any rights to benefits or payments thereunder;
provided that in lieu of the provisions regarding options
provided in 5.01(e) of the Severance Plan, the vesting of and
exercisability of Executive’s options shall be covered
exclusively by Section 3 of this Agreement; provided
further that in lieu of the car allowance provided in 5.01(c)
of the Severance Plan, executive shall be granted full ownership of
the 2001 BMW 525i (VIN WBADT43421GX24535) currently provided by the
Company; provided further that the pro-rated portion of the
Participant’s target bonus payable pursuant to 5.01(d) shall
be 100% of his target bonus established for fiscal year 2007 (50%
of which Executive acknowledges he has previously received).
Executive and the Company hereby agree that (i) the Change in
Control Agreement dated as of September 20, 2006 by and
between Executive and the Company (the “ CIC Agreement
”) will continue in effect for the six-month period following
the Separation Date (the “ Tail Period ”);
(ii) Executive’s termination of employment will be
considered to be an Anticipatory Termination (as defined in
Section 3.04(a) of the CIC Agreement) if a Change
in
Control as defined in the CIC Agreement
that also constitutes a change in ownership or effective control of
the Company, or in the ownership of a substantial portion of the
assets of the Company within the meaning of
Section 409A(a)(2)(A)(v) of the Internal Revenue Code) occurs
during the Tail Period (a “ Change in Control Event
”); and (iii) Executive shall be entitled to the
payments and benefits (as modified by this Agreement) applicable
under the CIC Agreement in the event of an Anticipatory Termination
if a Change in Control Event occurs upon the terms and conditions
specified in the CIC Agreement (including, without limitation,
execution, delivery and non-revocation of the release contemplated
by the CIC Agreement). In the event of a Change in Control Event,
the payments and benefits to which Executive is entitled under the
CIC Agreement shall be modified as follows:
(a) Executive shall not be
entitled to any payment or benefits pursuant to
Section 3.01(a)(i), Section 3.01(c),
Section 3.01(d), or Section 3.04(b)(E) of the CIC
Agreement.
(b) The amount Executive is
eligible to receive pursuant to Section 3.01(a)(ii) of the CIC
Agreement shall be reduced by the payments Executive previously
received pursuant to Section 5.01(a) and (c) of the
Severance Plan.
(c) Executive’s Date of
Termination (within the meaning of the CIC Agreement) shall be
deemed to be the Separation Date.
(d) Executive shall be
entitled to retain the computer, mobile phone, and mobile phone
number currently provided to him by the company; provided that as
of the Separation Date Company shall no longer reimburse Employee
for any costs associated with the operation of such computer and
mobile phone.
In the event a Change in Control Event
does not occur during the Tail Period, Executive shall be paid on
the date that is thirty days following the end of the Tail Period
the benefits and payments described in Section 3.01(a)(ii) of
the CIC Agreement, reduced by the payments Executive previously
received pursuant to Section 5.01(a) and (c) of the
Severance Plan. To the extent required by Code
Section 409A(a)(2)(B)(i), any amounts that cannot be paid
consistently with Section 409A of the Code during the six
month period following Executive’s Separation Date shall be
deferred and paid in a lump sum within 10 days of the end of such
six-month period.
3. Treatment of
Options . Executive acknowledges that the Company is conducting
an investigation (the “ Investigation ”) to
determine the extent to which compensatory options previously
granted by the Company were granted with an exercise price lower
than the fair market value of the Company’s common stock on
the applicable date of grant. The Company and Executive hereby
agree to the following with respect to options granted to him by
the Company.
(a) Previously Exercised
Options . Executive shall repay to the Company in accordance
with this Section 3(a) the aggregate amount (the “
Discount ”) by which the exercise price of any or all
compensatory options granted to Executive by the Company that
Executive exercised prior to the date hereof was less than the fair
market value of the Company’s common stock on the applicable
date of grant of each such option. The Company shall
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determine the amount of the Discount in
good faith and, absent manifest error, the Company’s
determination shall be final, binding and conclusive. Executive
shall pay the amount of the Discount to the Company promptly after,
but in any event within thirty days after, receipt of a written
notice from the Company setting out in reasonable detail the
calculation of the Discount. Notwithstanding anything to the
contrary in this Agreement, the maximum amount that Executive will
pay pursuant to this Section 3(a) is $227,033. Without in any
way limiting Executive’s obligation to repay the Discount
directly, Executive hereby authorizes the Company to withhold the
Discount from any and all amounts otherwise payable to Executive
hereunder or otherwise in the event Executive fails within thirty
days of receipt of the written notice specified above to pay the
Discount.
(b) Vested Options .
Executive agrees that, with respect to all unexercised options
previously granted to Executive that are vested and exercisable on
the date hereof (the “ Vested Options ”), the
Company may, without any further need for Executive’s
consent, increase the exercise price of such options to an amount
the Company determines in good faith is equal to the fair market
value of the Company’s common stock on the date such options
were originally granted. Absent manifest error, the Company’s
determination of the appropriate exercise price shall be final,
binding and conclusive. Executive agrees to execute any document
related to such adjustment reasonably requested by the Company. In
the event Executive exercises any options described in this
Section 3(b) prior to any adjustment contemplated hereby, such
options shall be treated in accordance with Section 3(a).
Vested Options shall otherwise be exercisable after the Separation
Date in accordance with their terms, it being agreed that the
Vested Options shall remain exercisable until the earlier of
(i) the date such Accelerated Options would otherwise expire
(in the absence of Executive’s retirement), (ii) the
fifth anniversary of the Separation Date, or (iii) the date
such options are cashed out in connection with a Change in Control
Event.
(c) Unvested Options .
Effective as of the Effective Date, the Company agrees to
accelerate the vesting and exercisability of the options described
on Exhibit A (the “ Accelerated Options ”),
which Accelerated Options shall then remain exercisable after the
Separation Date in accordance with their terms, it being agreed
that the Accelerated Options shall remain exercisable until the
earlier of (i) the date such Accelerated Options would
otherwise expire (in the absence of Executive’s retirement),
(ii) the fifth anniversary of the Separation Date, or
(iii) the date such options are cashed out in connection with
a Change in Control Event. Executive acknowledges and agrees that
he will not be entitled to, and hereby waives and entitlement he
might otherwise have to, accelerated vesting of any other options
other than the Accelerated Options as a consequence of his
retirement from the Company.
(d) If the Company agrees to
accept liability for or otherwise reimburse all other present or
former executive officers for adverse tax consequences resulting
from the mispricing of stock options, the Company agrees to provide
the same benefit to Executive.
4. Release of
Claims.
(a) General Release .
In consideration of the Company’s obligations hereunder and
acceptance of Executive’s retirement and resignation,
Executive, on behalf of
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himself and Executive’s heirs,
successors, and assigns, hereby knowingly and voluntarily releases
and forever discharges the Company and its subsidiaries and
affiliates, together with all of their respective current and
former officers, directors, consultants, agents, representatives
and employees, and each of their predecessors, successors and
assigns (collectively, the “ Releasees ”), from
any and all debts, demands, actions, causes of actions, accounts,
covenants, contracts, agreements, claims, damages, omissions,
promises, and any and all claims and liabilities whatsoever, of
every name and nature, known or unknown, suspected or unsuspected,
both in law and equity (“ Claims ”), which
Executive ever had, now has, or may hereafter claim to have against
the Releasees by reason of any matter, cause or thing whatsoever
arising from the beginning of time to the time Executive executes
this Agreement (the “ General Release ”). This
General Release of Claims shall apply to any Claim of any type,
in
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