Exhibit 10.27
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into on
September 19, 2000 by and between REGENERATION TECHNOLOGIES, INC. ("Regeneration
Technologies"), a Delaware corporation having its principal address at 1
Innovation Drive, Alachua, Florida 32615 and David R. Bilyeu ("Employee").
Regeneration Technologies and the Employee are collectively referred to as the
"Parties" throughout this Agreement. For purposes of this Agreement,
Regeneration Technologies includes any and all of its subsidiaries, affiliates,
any other company or entity owned and/or operated in whole or in part by any
officer or director of Regeneration Technologies.
INTRODUCTION
Regeneration Technologies operates a tissue processing/manufacturing
facility and desires to employ the Employee. The Employee desires to accept
employment during the term of this Agreement upon the terms and conditions in
this Agreement.
In consideration of the covenants, mutual promises, representations, and
understandings in this Agreement, the Parties agree as follows:
1. EMPLOYMENT.
Regeneration Technologies agrees to employ or continue to employ the
Employee and the Employee agrees to accept employment or to continue in the
employment of Regeneration Technologies. The duties of the Employee shall be
those established by Regeneration Technologies' Board of Directors, or its
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officers, from time to time and as needed.
2. TERM OF AGREEMENT.
This Agreement shall become effective when the Parties execute and date
this Agreement. This Agreement is intended to remain in effect for a period of
two (2) years from the date this Agreement is executed, unless this Agreement is
terminated earlier as hereinafter provided. This agreement will be subject to an
annual renewal option extending beyond this initial two (2) year period.
3. COMPENSATION.
a. ANNUAL SALARY.
Regeneration Technologies shall pay to the Employee as compensation for the
Employee's services $8,076.92 bi-weekly computed from an annual figure of
$210,000, payable in accordance with the payroll policies of Regeneration
Technologies. The Employee's salary shall be reviewed annually by Regeneration
Technologies' Board of Directors, at which time the Employee's salary may be
adjusted by Regeneration Technologies' Board of Directors.
b. PERFORMANCE BONUS.
To provide a greater incentive for the Employee, a cash bonus may be paid
to the Employee at any time during the year, or after the close of the year,
based upon the performance of Regeneration Technologies and the performance of
the Employee during such year; provided, however, that the payment of any such
bonus and the amount shall be within the sole discretion of Regeneration
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Technologies' Board of Directors. Bonus agreements made as indicated by the
initial employment offer shall be honored provided all conditions and
responsibilities remain the same. In making bonus determinations, executive
management of Regeneration Technologies will consider the following:
(i) The net profit of Regeneration Technologies for the year:
(ii) The base salary of the Employee:
(iii) The Employee's overall performance as an employee of the
Regeneration Technologies;
(iv) A comparison of the Employee's performance with the
performance of the other employees of Regeneration
Technologies; and
(v) such other matters as may be considered appropriate by
executive management.
c. STOCK OPTIONS.
The Employee shall be granted an option to purchase shares of common stock
of Regeneration Technologies, Inc. in the amount of 240,000 option shares at a
price of $14.00 per option as stipulated by Regeneration Technologies in its
offer letter to the Employee. These options are subject to vesting of 20% per
calendar year on the anniversary date of the options grant and all other
requirements as are set forth in the Omnibus Stock Plan, the
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Employee Restricted Stock Agreement and the Incentive Stock Option Grant
Agreement of Regeneration Technologies.
d. BUSINESS EXPENSES.
Except as otherwise provided in this Agreement, Regeneration Technologies
shall pay, either directly or by reimbursement to the Employee, such reasonable
and necessary business expenses incurred by the Employee in the course of his
employment by Regeneration Technologies as are consistent with Regeneration
Technologies' policies in existence from time to time, subject to such dollar
limitations and verification and record keeping requirements as may be
established from time to time by Regeneration Technologies.
e. EMPLOYEE BENEFITS.
The Employee shall be entitled to such vacation days, sick days, insurance
and other employee benefit programs as are established for all other employees
of the Regeneration Technologies, on the same basis as such other employees are
entitled thereto. In addition, the employee shall be entitled to an enhanced
benefit plan (Attachment - Schedule A). It is understood that the establishment,
change or termination of any such employee benefit programs is within the sole
discretion of Regeneration Technologies and that any such termination or change
in any such program shall not affect this Agreement.
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4. DEVOTION TO EMPLOYMENT.
During the term of this Agreement, the Employee shall devote his full time
to Regeneration Technologies and the Employee shall not engage in any other
gainful employment without the written consent of Regeneration Technologies.
Nothing in this Agreement shall prohibit the Employee, however, from investing
or trading in stocks, bonds, commodities, or other forms of investments in other
companies or entities which would not be in conflict with the best interest of
Regeneration Technologies, and their business objectives.
5. TERMINATION OF EMPLOYMENT.
a. VOLUNTARY TERMINATION.
Either the Employee or Regeneration Technologies may voluntarily terminate
the Employee's employment with Regeneration Technologies (and, except as
otherwise specifically provided hereunder, this Agreement) at any time, by
delivering to the other party written notice of such intention not less than
thirty (30) days prior to the effective date of termination. Notwithstanding the
foregoing, if notice of termination is given by Employee to Regeneration
Technologies, Regeneration Technologies shall have the right, within three (3)
business days of receipt of the Employee's notice, to terminate the Employee's
employment prior to the Employee working the remainder of the thirty (30) day
notice period.
b. TERMINATION FOR CAUSE.
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Regeneration Technologies may immediately terminate the Employee's
employment (and, except as otherwise specifically provided hereunder, this
Agreement) for cause by giving written notice (without regard to the thirty (30)
day notice period provided in paragraph a above) of such termination to Employee
specifying the grounds therefor. The decision to terminate Employee's employment
for cause shall be made at the sole discretion of Regeneration Technologies'
President and CEO and the Board of Directors.
A termination for cause may include, but is not limited to, any one or more
of the following reasons:
(i) Willfully or negligently damaging Regeneration Technologies'
property, business, reputation, or goodwill;
(ii) Willfully injuring any employee of Regeneration
Technologies;
(iii) Willfully injuring any person in the course of the
performance of services for Regeneration Technologies;
(iv) Lawfully charged with commission of a felony;
(v) Stealing, dishonesty, fraud, or embezzlement;
(vi) Deliberate and continuous neglect of duty;
(vii) Failure to properly or satisfactorily perform the
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Employee's duties;
(viii) Use of alcohol or narcotics to the extent it prevents, in
the sole judgement of Regeneration Technologies' executive
management, the Employee from effectively performing his or
her duties described in Paragraph I above;
(ix) Violating the covenants set forth in Paragraphs 6, 7, 9, 10
and 11 of this Agreement.
c. TERMINATION UPON DEATH, INCOMPETENCY, OR DISABILITY.
Regeneration Technologies shall have the right to terminate the Employee's
employment with Regeneration Technologies (and, except as otherwise specifically
provided hereunder, this Agreement) immediately and without prior written notice
to the Employee as required by paragraph "a" above in the event that the
Employee dies, is adjudicated incompetent, or is permanently disabled, as
defined by this Agreement. In this Agreement, the term permanently disabled
shall mean that the Employee is unable to perform adequately his or her regular
duties under this Agreement as a result of sickness or accident and such health
condition appears to be permanent. The determination of permanent disability
shall be made at the sole discretion of Regeneration Technologies' President and
CEO and the Board of Directors and such a determination shall be final and
binding on the Employee.
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6. CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY.
The Employee acknowledges, recognizes and understands that, in connection
with the Employee's employment with Regeneration Technologies, the Employee has
and will have access to certain proprietary, sensitive and confidential
information of Regeneration Technologies including but not limited to: the
identity of Regeneration Technologies' clients, prospective clients, and other
client information; the existence of negotiations with prospective clients of
Regeneration Technologies; marketing data and plans; financial information and
financial data not publicly disclosed; all drawings, records, sketches, and
models; trade secrets and trade secrets relating to services of Regeneration
Technologies; and, products being developed by Regeneration Technologies
("Confidential Information").
Employee also acknowledges, recognizes and understands that Regeneration
Technologies owns or has access to various types of intellectual property that
are protected or may be protected by copyright, trademark, patent, trade secret,
or other laws. The types of intellectual property that are considered
proprietary to Regeneration Technologies and that must be protected include but
are not limited to: patent applications; trademarks; programs; source and
relocatable code for all programs; engineering, research, and technical
documents; unpublished product specifications; products under development; and,
information belonging to other companies that is provided to Regeneration
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Technologies under confidentiality agreements ("Intellectual Property").
The Employee acknowledges and agrees that the maintenance of the
confidentiality of the Confidential Information and Intellectual Property and
restrictions on the use of the Confidential Information and Intellectual
Property is essential to Regeneration Technologies.
The provisions of this Paragraph 6 shall survive the termination of
Employee's employment with Regeneration Technologies.
7. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY.
The Employee shall not, during or after the termination of his or her
employment with Regeneration Technologies: (a) directly or indirectly publish,
disclose, reproduce, record, make facsimiles of, abstract, summarize, remove,
make accessible, or misappropriate any Confidential Information or Intellectual
Property as defined under this Agreement, to any person (including family
members and friends), firm, corporation, or association or other entity,
competitor or third party, for any reason whatsoever; or, (b) use, keep, or
otherwise deal in or with such Confidential Information or Trade Secrets, except
during employment with Regeneration Technologies and for the benefit of
Regeneration Technologies, without prior written permission of the President and
CEO of Regeneration Technologies. The Employee agrees not to disclose any
Confidential Information or Intellectual Property to other employees of
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Regeneration Technologies unless authorized by the President and CEO of
Regeneration Technologies.
All of the Confidential Information or Intellectual Property listed in
Paragraph number six (6) above is, and shall remain, the exclusive property of
Regeneration Technologies, and shall not be removed from Regeneration
Technologies' premises, without the prior written consent of the President and
CEO of Regeneration Technologies. The Employee shall return all Confidential
Information and Intellectual Property described in Paragraph number six (6)
prior to or at the termination of his or her employment with Regeneration
Technologies. The Employee agrees that he is under no obligation to any former
employer which is in any way inconsistent with this Agreement or which imposes
any restriction on behalf of Regeneration Technologies or the Employee. The
Employee also acknowledges that he has been instructed by Regeneration
Technologies that during his employment with Regeneration Technologies, he is
not to divulge to Regeneration Technologies, its employees, or its consultants,
any confidential information or intellectual property obtained by the Employee
from any previous employers, entities, or persons. The provisions of this
Paragraph 7 shall survive the termination of Employee's employment with
Regeneration Technologies and the termination of this Agreement.
8. IRREPARABLE HARM.
The Employee acknowledges and agrees that any disclosure of
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Confidential Information and Intellectual Property delineated in paragraph
number six (6) by the Employee would cause severe and irreparable harm to
Regeneration Technologies. In the event there is a breach or a threatened breach
by the Employee of the Non-Disclosure provisions of this Agreement, Regeneration
Technologies shall be entitled to an injunction restraining the Employee from
disclosing, in whole or in part, such Confidential Information and Intellectual
Property or from rendering a service to any person, firm, corporation,
association, or other entity, to whom such information has been disclosed and to
recover all costs of pursuing such remedy, including reasonable attorneys' fees,
costs, and expenses. Nothing in this Agreement shall be construed as prohibiting
Regeneration Technologies from pursuing other remedies as may be available to it
for the Employee's breach or threatened breach, including recovery of damages
from the Employee. The provisions of this Paragraph 8 shall survive the
termination of Employee's employment with Regeneration Technologies and the
termination of this Agreement.
9. EMPLOYEE DEVELOPMENTS.
The Employee is aware and understands that during the term of the
Employee's employment with Regeneration Technologies or with the financial and
other assistance that may be provided by Regeneration Technologies, the Employee
may invent, create, develop, and improve certain valuable property such as, but
not limited to, patents, trademarks, inventions, other patentable
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inventions and other trade secrets and formula ("Employee Developments"). The
Employee agrees that all Employee Developments that may be developed or produced
by the Employee during the Employee's employment by Regeneration Technologies
are and will be the property of Regeneration Technologies and that the Employee
further agrees that he will, at the request of Regeneration Technologies,
execute such documents Regeneration Technologies may reasonably request from
time to time, to assign and transfer all of the right, title and interest in
Employee Developments that are the property of Regeneration Technologies to
Regeneration Technologies and he will cooperate with Regeneration Technologies
in connection with any patent applications. In this regard, the Employee will,
at all times, fully advise and inform Regeneration Technologies of all matters
that the Employee may be developing or working on while employed by Regeneration
Technologies. The Employee further agrees that upon the termination of his or
her employment with Regeneration Technologies for any reason whatsoever, the
Employee shall immediately deliver and surrender to Regeneration Technologies
any and all plans, documents and other materials of any nature relating to the
Employee Developments. Regeneration Technologies may provide additional
compensation to the Employee as consideration for Employee Developments in
accordance with any patent policy of Regeneration Technologies. The provisions
of this Paragraph 9 shall survive the termination of Employee's employment with
Regeneration
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Technologies and the termination of this Agreement.
10. NON-COMPETITION.
In the event of the termination of the Employee's employment with
Regeneration Technologies either by Regeneration Technologies for cause or
voluntarily by the Employee, the Employee agrees that for a period of two (2)
years following the effective date of the termination, the Employee will not
engage in or be associated with or employed by any "Licensed Tissue Bank"
organization, which engages in the business of recovery, procurement,
manufacturing, or distributing products from bone tissue in the United States.
The Licensed Tissue Bank organizations that Employee specifically agrees not to
become employed by or in any way associate with for a two (2) year period
following the effective date of Employee's termination are as follows:
Musculoskeletal Transplant Foundation; CryoLife; LifeCell; Allosource; Tissue
Banks International; Osteotech, Inc.; LifeLink Tissue Bank; Life Net; Community
Tissue Services; American Red Cross; BioGenetics; and, Cryogenic. The Employee
also agrees that for a two (2) year period following the effective date of
Employee's termination not to participant in, assist with or in any become
associated with or employed by any new start up venture engaged in the business
of a Licensed Tissue Bank. This limitation of employment excludes any and all
non-biologic implantable medical devices.
This non-compete is valid only if employee is terminated for cause or
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voluntarily terminates his employment.
In the event the employee is terminated without cause. Employee agrees that
for a period of one (1) year following the effective date of such termination,
Employee will not engage in any business which harvests or delivers human tissue
or products derived from human tissue within the Corporation's service area;
provided, however, that Employee shall then be entitled to a severance payment
in the amount of six (6) months salary (computed without reference to fringe
benefits, bonuses, or any other form of compensation and subject to applicable
taxes). The Corporation may require the Employee to execute a release of claims
against the Corporation as a condition precedent to its obligation to make the
severance payment described herein.
The Employee acknowledges that this restrictive covenant is reasonably
necessary to protect Regeneration Technologies' legitimate business interests,
which are represented by, among other things, the substantial relationships
between Regeneration Technologies and its licensees and tissue sources, as well
as the goodwill established by Regeneration Technologies with licensees and
tissue sources in the United States and other countries where Regeneration
Technologies' tissues are distributed over a protracted period, specialized
training, and other legitimate business reasons.
The Employee recognizes that Regeneration Technologies would not sign this
Agreement without the inclusion of this covenant, and the Employee confirms
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the sufficiency of the consideration received by the Employee, in the form of
employment or continued employment by Regeneration Technologies, in accepting
this covenant as a material term of this Agreement. The provisions of this
Paragraph 10 shall survive the termination of Employee's employment with
Regeneration Technologies and the termination of this Agreement.
11. NON-SOLICITATION.
The Employee agrees during his employment with Regeneration Technologies,
and for a period of two (2) years from the termination date of his employment
with Regeneration Technologies, not to: (a) engage, hire, employ, or solicit any
employee of Regeneration Technologies, or any subsidiary or affiliate of
Regeneration Technologies, or otherwise induce or attempt to induce any employee
of Regeneration Technologies to leave the employment of Regeneration
Technologies; or (b) directly or indirectly attempt to solicit any client or
customer of Regeneration Technologies, or any client or customer of any
subsidiary or affiliate of Regeneration Technologies, or directly or indirectly
interfere with Regeneration Technologies' relationship, or any subsidiary's or
affiliate's relationship, with any of its clients or customers. The provisions
of this Paragraph 11 shall survive the termination of Employee's employment with
Regeneration Technologies and the termination of this Agreement.
12. REMEDIES FOR BREACH OF LIMITATION OF EMPLOYMENT AND NON-SOLICITATION.
It is understood and agreed by the Parties that Regeneration Technologies
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shall be entitled, upon application to a court of competent jurisdiction, to
obtain injunctive relief to enforce the provisions of Paragraphs 10 and 11,
which injunctive relief shall be in addition to any other rights or remedies
available to Regeneration Technologies. If such a violation occurs, the Employee
shall be responsible for the payment of reasonable attorneys' fees and other
costs and expenses incurred by Regeneration Technologies in enforcing the
covenants contained in Paragraphs 10 and 11, whether incurred at the trial level
or in any appellate proceeding.
13. NON-DISPARAGEMENT.
While employed by Regeneration Technologies or any affiliate of
Regeneration Technologies and after the Employee's employment terminates for
whatever reason, the Employee agrees not to disparage, denigrate, or comment
negatively upon, either orally or in writing, Regeneration Technologies, or any
of its affiliates, officers, or directors, to or in the presence of any person
or entity.
14. INVALID PROVISION.
In the event any provision of this Agreement should be or become invalid or
unenforceable, the invalid provision shall not affect the validity and
enforceability of any other provision of this Agreement. Similarly, if the scope
of any restriction or covenant contained in this Agreement should be or become
too broad or extensive to permit enforcement of the covenant or provision to its
full extent, then any restriction or covenant shall be enforced to the maximum
extent
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permitted by law. The Employee consents and agrees that the scope of any
restriction or covenant may be modified accordingly in any judicial proceeding
brought to enforce the restriction or covenant.
15. MEDIATION.
The Parties acknowledge and agree that in the event that a dispute arises
between Regeneration Technologies and the Employee pertaining to the employment
provisions of this Agreement (paragraphs 1, 2, 3, 4, and 5), the Parties agree
to mediate the dispute within thirty (30) days of the dispute and prior to
either of the Parties instituting a lawsuit under the Agreement. The Parties
agree to mutually select and agree upon a mediator and to split the costs and
expenses equally associated with the mediation. If either of the Parties fail to
agree to or hinder the mediation process, such conduct shall be a breach of this
Agreement.
16. DISPUTES, ATTORNEY'S FEES, COSTS AND EXPENSES.
Except as provided in paragraphs 8 and 12 above, in the event a dispute
arises between the Parties and a suit is instituted, the prevailing party in
such litigation shall be entitled to recover reasonable attorney's fees and
other costs and expenses from the non-prevailing party, whether incurred at the
trial level or in any appellate proceeding. In addition, each party, to the
fullest extent permitted by applicable law, irrevocably waives all right to a
trial by jury as to any issue in any action, proceeding or counterclaim arising
out of this Agreement.
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17. APPLICABLE LAW AND VENUE.
This Agreement shall be interpreted under and governed by the laws of the
State of Florida. The venue of any action brought under this Agreement shall be
Alachua County, Florida.
18. COMPLETE AGREEMENT.
The Employee acknowledges and agrees that no representation, promise, or
agreement regarding the subject matter of this Agreement has been made to or
with the Employee that is not provided for in this Agreement. This Agreement
represents the complete Agreement between Regeneration Technologies and the
Employee regarding the subject matter of this Agreement. Any representations or
agreements regarding the subject matter of this Agreement not explicitly
included in this Agreement are considered waived and/or merged into this
Agreement, and are thus unenforceable. Any previous agreements between
Regeneration Technologies and the Employee regarding the subject matter of this
Agreement are superseded by the execution of this Agreement, and shall lack any
continuing force or effect.
19. AMENDMENTS OR MODIFICATIONS.
No amendments or modifications to this Agreement shall be binding on any of
the Parties unless such amendment or modification is in writing and executed by
all of the Parties to this Agreement.
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20. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of
Regeneration Technologies' successors and assigns.
21. CONSTRUCTION.
The Employee agrees and understands that the headings and captions of this
Agreement are provided for convenience only and are intended to have no effect
in construing or interpreting this Agreement. The language in all parts of this
Agreement shall be construed according to its fair meaning and not strictly for
or against Regeneration Technologies or the Employee.
22. NON-WAIVER.
The failure of Regeneration Technologies or the Employee in any instance to
exercise any right, power, or privilege under this Agreement or under law shall
not constitute a waiver of any other right, power, or privilege. All waivers by
either Regeneration Technologies or the Employee must be contained in writing
signed by the party to be charged, and in the case of Regeneration Technologies,
by an officer or director of Regeneration Technologies.
23. READ AND UNDERSTAND.
The Parties to this Agreement represent and agree that they have carefully
read and fully understand all of the provisions of this Agreement and that they
are entering into this Agreement with the intent to be bound by its terms and
conditions. The Employee represents and agrees that his or her initials on
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each page of this Agreement is irrefutable evidence that he or she has read and
fully understands all of the provisions of this Agreement.
IN THE PRESENCE OF WITNESSES, the Parties execute this eighteen (18) page
Agreement.
DATED this ______ day of __________, 2000.
EMPLOYEE: ON BEHALF OF REGENERATION
TECHNOLOGIES, INC.:
Signature: /s/ DAVID R. BILYEU Signature: /s/ JAMES M. GROOMS
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Title: V.P. OF ADMINISTRATIVE SERVICES Title: PRESIDENT/CEO
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Date: 10/09/00 Date: 10/10/00
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WITNESS: WITNESS:
Name: /s/ GARY JOSEPHSON Name: /s/KATHLEEN M. DAVIS
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Date: 10/09/00 Date: 10/10/00
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Attachment.
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