SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 27, 1997
INTEGRA LIFESCIENCES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-26224 51-0317849
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
105 Morgan Lane
Plainsboro, New Jersey 08536
(Address of principal executive offices) (Zip code)
(609) 275-0500
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
On December 27, 1997, Integra LifeSciences Corporation (the "Company")
entered into an Employment Agreement, a Stock Option Grant and Agreement and a
Restricted Units Agreement with Stuart M. Essig ("Executive").
Under the Employment Agreement, Executive is to serve as the President
and Chief Executive Officer of the Company and report directly to the Board of
Directors. As compensation for Executive's services during the first year of the
agreement, the Company will pay Executive an annual salary of $300,000. For each
subsequent year of the Employment Agreement, Executive's salary will be $300,000
plus any increases as may be established by the Board. Executive is also
entitled to receive a performance bonus of up to 50% of Executive's base salary,
based upon the satisfaction of certain performance goals pertaining to the
trading price of the Company's common stock. Executive is also entitled to the
lesser of (a) a $3,000,000 four-year minimum renewable term life insurance
policy, and (b) the four-year minimum renewable term life policy purchasable by
the Company by paying premium payments of $5,000 per year for such policy. At
the request of Executive, the Company will disburse a loan in the amount of up
to $500,000 subject to certain conditions. Executive is also entitled to
participate in the Company's medical, disability, pension and other employee
benefit plans and programs maintained from time to time by the Company for the
benefit of its senior executives. The Employment Agreement is for an initial
term through December 31, 2001 and shall automatically extend on December 31,
2001 and on each subsequent one-year anniversary thereof for one year unless the
Company or Executive provides written notice of termination at least six months
prior to such anniversary.
Under the Stock Option Grant and Agreement, the Company granted
Executive options under the Company's 1996 Incentive Stock Option and
Non-Qualified Stock Option Plan, as amended (the "1996 Option Plan"), to
purchase 1,000,000 shares (the "Option Shares") of the Company's common stock at
an exercise price of $2.9375 per share and with an expiration date of December
26, 2007. The options shall vest and become exercisable with respect to 250,000
shares on December 27, 1998 and shall vest and become exercisable thereafter
with respect to 1/36th of the remaining shares on the first business day of each
following month; provided that the option shall become immediately vested and
exercisable in the event of (a) a change in control of the Company or (b) the
termination of Executive's employment (i) by the Company without cause, (ii) by
Executive for good reason or (iii) due to Executive's death.
Under the Restricted Units Agreement, the Company granted Executive
2,000,000 restricted units, each unit representing the right to receive one
share of the Company's common stock. The shares of common stock underlying the
restricted units (the "Unit Shares") shall be delivered to Executive on January
1, 2002 if Executive is employed by the Company on December 31, 2001. Executive
has the right to defer delivery of the Unit Shares for a period of up to six
years. The Unit Shares may be delivered to Executive prior to January 1, 2002 in
the
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event of (a) a change of control of the Company while he is employed by the
Company or (b) a termination of Executive's employment with the Company other
than (i) for cause or (ii) due to his voluntary departure (other than for good
reason or due to disability). If, prior to December 31, 2001, (a) Executive's
employment with the Company is terminated for cause or (b) he voluntarily leaves
his employment with the Company (other than for good reason or due to
disability), the Unit Shares shall be distributed to Executive on January 1,
2018. The Company also agreed to file, following the request of Executive, a
registration statement with the Securities and Exchange Commission to register
the sale by Executive of the Option Shares and the Unit Shares pursuant to the
Securities Act of 1933, as amended. In connection with the Restricted Units
Agreement, the Company will incur a non-cash deferred compensation charge of
$5,875,000 in the fourth quarter of 1997.
In connection with the authorization by the Board of Directors of the
execution and delivery of the foregoing agreements, the Board of Directors
approved (a) an amendment to the Company's by-laws to provide that (i) the
Company shall have a Chief Executive Officer, who shall have full authority with
respect to the conduct of the business of the Company, subject only to approval
of the Board, and (ii) in the absence of a duly appointed Chief Executive
Officer, such authority shall devolve upon the Company's President, (b) an
amendment to Section 4 of the Company's 1996 Stock Option Plan to increase the
number of options issuable under the Plan to any one individual over any
one-year period from 300,000 to 1,000,000, and (c) an amendment to Section 12(b)
of the Company's 1996 Stock Option Plan to provide that the Plan may be amended
by the Company's shareholders pursuant to written consent in lieu of a meeting.
ITEM 7. EXHIBITS
Exhibit Number Description of Exhibit
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3 Amended and Restated By-Laws of Integra LifeSciences
Corporation
10.1 Employment Agreement dated December 27, 1997 between Integra
LifeSciences Corporation and Stuart M. Essig
10.2 Stock Option Grant and Agreement made December 27, 1997
between Integra LifeSciences Corporation and Stuart M. Essig
10.3 Restricted Units Agreement dated December 27, 1997 by and
between Integra LifeSciences Corporation and Stuart M. Essig
10.4 Integra LifeSciences Corporation 1996 Incentive Stock Option
and Non-Qualified Stock Option Plan (as amended through
December 27, 1997)
10.5 Indemnity letter agreement dated December 27, 1997 from
Integra LifeSciences Corporation to Stuart M Essig
99 Integra LifeSciences Corporation's press release dated
December 30, 1997 announcing the appointment of Stuart M.
Essig as the Company's Chief Executive Officer and President
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTEGRA LIFESCIENCES CORPORATION
Date: January 29, 1998 By: /s/ David B. Holtz
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David B. Holtz
Vice President, Treasurer
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EXHIBIT INDEX
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Exhibit Number Description of Exhibit
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3 Amended and Restated By-Laws of Integra LifeSciences
Corporation
10.1 Employment Agreement dated December 27, 1997 between Integra
LifeSciences Corporation and Stuart M. Essig
10.2 Stock Option Grant and Agreement made December 27, 1997
between Integra LifeSciences Corporation and Stuart M. Essig
10.3 Restricted Units Agreement dated December 27, 1997 by and
between Integra LifeSciences Corporation and Stuart M. Essig
10.4 Integra LifeSciences Corporation 1996 Incentive Stock Option
and Non-Qualified Stock Option Plan (as amended through
December 27, 1997)
10.5 Indemnity letter agreement dated December 27, 1997 from
Integra LifeSciences Corporation to Stuart M Essig
99 Integra LifeSciences Corporation's press release dated
December 30, 1997 announcing the appointment of Stuart M.
Essig as the Company's Chief Executive Officer and President
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