SECURITIES AND EXCHANGE COMMISSION
Washington, DC 2054
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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 22, 2000
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 0-26224 51-0317849
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
105 MORGAN LANE
PLAINSBORO, NEW JERSEY 08536
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (609) 275-0500
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS.
On December 22, 2000, Integra LifeSciences Holdings Corporation entered into an
Amended and Restated Employment Agreement with Stuart M. Essig, Integra's
current President and Chief Executive Officer, extending the term of Mr. Essig's
employment with Integra as its President and Chief Executive Officer through
December 31, 2005. The Amended Employment Agreement supersedes Mr. Essig's prior
employment agreement with Integra.
Under the Amended Employment Agreement, Integra will pay Mr. Essig an annual
base salary of $325,000 for 2001 and $400,000 for 2002. For each subsequent year
that he is employed, Mr. Essig's annual base salary will be $400,000 plus such
increases, if any, as may be established by Integra's Board of Directors. Mr.
Essig is also eligible to receive a performance bonus of up to fifty percent
(50%) of his base salary, based upon the satisfaction of certain performance
goals established by Integra's Board of Directors. Mr. Essig is also entitled to
life insurance equal 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 Integra by paying premium payments of $5,000 per
year for such policy. At the request of Mr. Essig, Integra will disburse a loan
to Mr. Essig in the amount of up to $500,000 subject to certain conditions. Mr.
Essig is also entitled to participate in Integra's medical, disability, pension
and other employee benefit plans and programs maintained from time to time by
Integra for the benefit of its senior executives. The Amended Employment
Agreement is for an initial term through December 31, 2005 and shall
automatically extend on December 31, 2005 and on each subsequent one-year
anniversary thereof for one year unless Integra or Mr. Essig provides written
notice of termination at least six months prior to the expiration of the
then-current term.
The Amended Employment Agreement further provides that Integra generally will
reimburse, or "gross-up," Mr. Essig on an after-tax basis for any excise tax
liability he may incur by reason of any "excess parachute payments" he receives
from Integra. Section 280G of the Internal Revenue Code of 1986, as amended,
provides that if payments of compensation that are contingent on a change in
control exceed three times an employee's "base amount" (his average annual
compensation during certain prior years), they will constitute "parachute
payments," and the excess of such parachute payments over such base amount
generally will constitute "excess parachute payments." Such excess parachute
payments are nondeductible by the employer and are subject to a 20% excise tax
payable by the employee.
In connection with the extension of the term of Mr. Essig's employment pursuant
to the Amended Employment Agreement, Integra granted Mr. Essig (i) a
non-qualified stock option to purchase 250,000 shares of Integra common stock
under Integra's 1999 Stock Option Plan, (ii) a non-qualified stock option to
purchase 250,000 shares of Integra common stock under Integra's 2000 Equity
Incentive Plan and (iii) 1,250,000 "Restricted Units" under Integra's 2000
Equity Incentive Plan. Each stock option (each, an "Option") expires on December
21, 2010 and has an exercise price equal to $11.00 per share (the closing price
of Integra's common stock on The Nasdaq National Market on December 21, 2000).
Assuming the continuation of Mr. Essig's employment with Integra, each Option
will vest and become exercisable with respect to 62,500 shares on December 22,
2002 and thereafter with respect to 1/36th of the remaining shares on the first
business day of each following month. In the event of a (i) "change in control"
of Integra (as defined in the Amended Employment Agreement) or (ii) the
termination of Mr. Essig's employment with Integra (a) by Integra without
"cause" (as defined in the Amended Employment Agreement) or (b) by Mr. Essig for
"good reasons" (as defined in the Amended Employment Agreement), the Options
shall vest and become exercisable immediately. The Option granted pursuant to
Integra's 1999 Stock Option Plan may be transferred by Mr. Essig to members of
his immediate family, to trusts established for the benefit of his immediate
family or to partnerships or limited liability companies of which the partners
or members are members of his immediate family. Otherwise, the Options may not
be transferred by Mr. Essig other than by will or by the laws of descent and
distribution.
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Under a Restricted Units Agreement, Integra issued to Mr. Essig a fully vested
equity-based signing award bonus in the form of 1,250,000 restricted units (the
"Restricted Units"). Each Restricted Unit represents the right to receive one
share of the Integra's common stock. The shares of Integra's common stock
underlying the Restricted Units ("Unit Shares") shall be delivered to Mr. Essig
on January 1, 2006 if Mr. Essig is employed by Integra on December 31, 2005 or
on such earlier date as a change in control of Integra occurs; provided,
however, that Mr. Essig has the right to defer the delivery of the Unit Shares
on as many occasions as Mr. Essig determines from time to time through, but not
beyond, June 30, 2025. The Unit Shares may be delivered to Mr. Essig prior to
January 1, 2006 in the event of a termination of Mr. Essig's employment with
Integra other than (a) for cause or (b) due to his voluntary departure (other
than for good reasons or due to disability). If, prior to December 31, 2005 and
prior to a change of control of Integra, (i) Mr. Essig's employment with Integra
is terminated for cause or (ii) Mr. Essig voluntarily leaves his employment with
Integra (other than for good reasons or due to disability), the Unit Shares will
be distributed to Mr. Essig on January 1, 2010.
Integra has also granted Mr. Essig registration rights requiring Integra to file
a "shelf" registration statement at Mr. Essig's request that will provide for
the registration and sale on a continuous or delayed basis of the shares of
Integra common stock underlying the Options and the Restricted Units.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS.
Exhibit Number
(Referenced to
Item 601 of
Regulation S-K) Description of Exhibit
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4.1 Stock Option Grant and Agreement dated December 22, 2000 between
Integra LifeSciences Holdings Corporation and Stuart M. Essig
(Exhibit A-1 to Amended and Restated Employment Agreement).
4.2 Stock Option Grant and Agreement dated December 22, 2000 between
Integra LifeSciences Holdings Corporation and Stuart M. Essig
(Exhibit A-2 to Amended and Restated Employment Agreement).
4.3 Restricted Units Agreement dated December 22, 2000 between Integra
LifeSciences Holdings Corporation and Stuart M. Essig (Exhibit C
to Amended and Restated Employment Agreement).
10.1 Amended and Restated Employment Agreement dated December 22, 2000
between Integra LifeSciences Holdings Corporation and Stuart M.
Essig.
10.2 Registration Rights Provisions (Exhibit B to Amended and Restated
Employment Agreement).
99 Press Release dated December 22, 2000 issued by Integra
LifeSciences Holdings Corporation.
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SIGNATURES
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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 HOLDINGS
CORPORATION
Date: January 8, 2001 By: /s/ Stuart M. Essig
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Stuart M. Essig, President and
Chief Executive Officer
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INDEX OF EXHIBITS
Exhibit No. Description of Exhibit
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4.1 Stock Option Grant and Agreement dated December 22, 2000 between
Integra LifeSciences Holdings Corporation and Stuart M. Essig
(Exhibit A-1 to Amended and Restated Employment Agreement).
4.2 Stock Option Grant and Agreement dated December 22, 2000 between
Integra LifeSciences Holdings Corporation and Stuart M. Essig
(Exhibit A-2 to Amended and Restated Employment Agreement).
4.3 Restricted Units Agreement dated December 22, 2000 between Integra
LifeSciences Holdings Corporation and Stuart M. Essig (Exhibit C
to Amended and Restated Employment Agreement).
10.1 Amended and Restated Employment Agreement dated December 22, 2000
between Integra LifeSciences Holdings Corporation and Stuart M.
Essig.
10.2 Registration Rights Provisions (Exhibit B to Amended and Restated
Employment Agreement).
99 Press Release dated December 22, 2000 issued by Integra
LifeSciences Holdings Corporation.