(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2007 | ||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Delaware
(STATE OR OTHER JURISDICTION OF |
51-0317849
(I.R.S. EMPLOYER |
|
INCORPORATION OR
ORGANIZATION)
|
IDENTIFICATION NO.) | |
311 ENTERPRISE DRIVE
|
08536 | |
PLAINSBORO, NEW JERSEY
|
(ZIP CODE) | |
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
|
Title of Each Class
|
Name of Exchange on Which Registered
|
|
Common Stock, Par Value $.01 Per Share
|
The Nasdaq Stock Market LLC |
Large accelerated
filer
þ
|
Accelerated filer o |
Non-accelerated
filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
ITEM 1. | BUSINESS |
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2
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4
5
6
7
8
9
10
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| general economic and business conditions, both nationally and in our international markets; | |
| our expectations and estimates concerning future financial performance, financing plans and the impact of competition; | |
| anticipated trends in our business; | |
| existing and future regulations affecting our business; | |
| our ability to obtain additional debt and equity financing to fund capital expenditures and working capital requirements and acquisitions; | |
| physicians willingness to adopt our recently launched and planned products, third-party payors willingness to provide reimbursement for these products and our ability to secure regulatory approval for products in development; | |
| initiatives launched by our competitors; | |
| our ability to protect our intellectual property, including trade secrets; | |
| our ability to complete acquisitions, integrate operations post-acquisition and maintain relationships with customers of acquired entities; | |
| work stoppages at our facilities; and | |
| other risk factors described in the section entitled Risk Factors in this report. |
12
ITEM 1A. | RISK FACTORS |
| the impact of acquisitions; | |
| the impact of our restructuring activities; | |
| the timing of significant customer orders, which tend to increase in the second and fourth quarters to coincide with the end of budget cycles for many hospitals; | |
| market acceptance of our existing products, as well as products in development; | |
| the timing of regulatory approvals; | |
| changes in the rates of exchange between the U.S. dollar and other currencies of foreign countries in which we do business, such as the euro and the British pound; | |
| expenses incurred and business lost in connection with product field corrections or recalls; | |
| increases in the cost or decreases in the supply of raw materials, including energy and steel; | |
| our ability to manufacture our products efficiently; | |
| the timing of our research and development expenditures; and | |
| reimbursement for our products by third-party payors such as Medicare, Medicaid and private health insurers. |
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| our collagen-based products, such as the Integra ® Dermal Regeneration Template and wound dressing products, the DuraGen ® family of products, and our Absorbable Collagen Sponges; |
19
| our products made from silicone, such as our neurosurgical shunts and drainage systems and hemodynamic shunts; and | |
| products which use many different electronic parts from numerous suppliers, such as our intracranial monitors and catheters. |
20
| major third-party payors of hospital services and hospital outpatient services, including Medicare, Medicaid and private healthcare insurers, annually revise their payment methodologies, which can result in stricter standards for reimbursement of hospital charges for certain medical procedures; | |
| Medicare, Medicaid and private healthcare insurer cutbacks could create downward price pressure on our products; | |
| recently effected local Medicare coverage determinations will eliminate reimbursement for certain of our matrix wound dressing products in most regions, negatively affecting our market for these products, and future determinations could eliminate reimbursement for these products in other regions and could eliminate reimbursement for other products; | |
| potential legislative proposals have been considered that would result in major reforms in the U.S. healthcare system that could have an adverse effect on our business; | |
| there has been a consolidation among healthcare facilities and purchasers of medical devices in the United States who prefer to limit the number of suppliers from whom they purchase medical products, and these entities may decide to stop purchasing our products or demand discounts on our prices; | |
| we are party to contracts with group purchasing organizations, which negotiate pricing for many member hospitals, that require us to discount our prices for certain of our products and limit our ability to raise prices for certain of our products, particularly surgical instruments; |
21
| there is economic pressure to contain healthcare costs in domestic and international markets; | |
| there are proposed and existing laws, regulations and industry policies in domestic and international markets regulating the sales and marketing practices and the pricing and profitability of companies in the healthcare industry; | |
| proposed laws or regulations that will permit hospitals to provide financial incentives to doctors for reducing hospital costs (known as gainsharing) and to award physician efficiency (known as physician profiling) could reduce prices; and | |
| there have been initiatives by third-party payors to challenge the prices charged for medical products that could affect our ability to sell products on a competitive basis. |
| government officials charged with responsibility for enforcing those laws will not assert that our sales and marketing practices or customer discount arrangements are in violation of those laws or regulations; or | |
| government regulators or courts will interpret those laws or regulations in a manner consistent with our interpretation. |
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ITEM 1B. | UNRESOLVED STAFF COMMENTS |
ITEM 2. | PROPERTIES |
ITEM 3. | LEGAL PROCEEDINGS |
26
ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
2007 | 2006 | |||||||||||||||
High | Low | High | Low | |||||||||||||
Fourth Quarter
|
$ | 49.74 | $ | 39.44 | $ | 43.57 | $ | 36.36 | ||||||||
Third Quarter
|
$ | 51.46 | $ | 46.08 | $ | 39.51 | $ | 34.56 | ||||||||
Second Quarter
|
$ | 52.85 | $ | 44.99 | $ | 42.90 | $ | 36.27 | ||||||||
First Quarter
|
$ | 46.08 | $ | 40.15 | $ | 41.72 | $ | 35.00 |
27
Total Number
|
Approximate
|
|||||||||||||||
of Shares
|
Dollar Value of
|
|||||||||||||||
Purchased as
|
Shares that
|
|||||||||||||||
Total
|
Part of
|
May Yet be
|
||||||||||||||
Number
|
Average
|
Publicly
|
Purchased
|
|||||||||||||
of Shares
|
Price Paid
|
Announced
|
Under the
|
|||||||||||||
Purchased | per Share | Program | Program | |||||||||||||
October 1, 2007 October 31, 2007
|
| | | $ | 75,000,000 | |||||||||||
November 1, 2007 November 30, 2007
|
374,248 | $ | 41.14 | 374,248 | 59,605,204 | |||||||||||
December 1, 2007 December 31, 2007
|
125,752 | 40.33 | 125,752 | 54,533,276 | ||||||||||||
Total
|
500,000 | $ | 40.93 | 500,000 | $ | 54,533,276 | ||||||||||
28
88
89
90
91
92
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ITEM 6.
SELECTED
FINANCIAL DATA
Years Ended December 31,
2007
2006
2005
2004
2003
(In thousands, except per share data)
$
550,459
$
419,297
$
277,935
$
229,825
$
185,599
483,171
360,553
221,830
205,046
145,952
67,288
58,744
56,105
24,779
39,647
(10,197
)
(8,426
)
(265
)
555
471
2,971
(2,010
)
(739
)
2,674
3,071
60,062
48,308
55,101
28,008
43,189
26,591
18,901
17,907
10,811
16,328
$
33,471
$
29,407
$
37,194
$
17,197
$
26,861
$
1.13
$
0.97
$
1.15
$
0.55
$
0.86
29,578
32,747
34,565
31,102
33,104
December 31,
2007
2006
2005
2004
2003
(In thousands)
$
57,339
$
22,697
$
143,384
$
195,982
$
206,743
818,012
613,618
448,432
456,713
412,526
330,000
508
118,378
118,900
119,427
98,175
66,336
36,929
(265
)
(17,462
)
260,429
296,162
289,818
307,823
268,530
(1)
In 2003, we recorded $11.0 million of other revenue related
to the acceleration of the recognition of unused minimum
purchase payments and deferred license fee revenue from ETHICON,
Inc., a division of Johnson & Johnson, following the
termination of the supply distribution and collaboration
agreement with ETHICON in December 2003.
(2)
In 2004, we recorded $23.9 million in share-based
compensation charges incurred in connection with the extension
of the employment agreement of our President and Chief Executive
Officer.
(3)
In 2004, we recorded a $1.4 million gain in other income
related to an unrealized gain on a foreign currency collar which
was used to reduce our exposure to fluctuations in the exchange
rate between the euro and the US dollar as a result of our
commitment to acquire Newdeal Technologies SAS for
38.5 million euros. The collar contract expired on
January 3, 2005, concurrent with our acquisition of Newdeal
Technologies. In 2003, we recorded a $2.0 million gain in
other income (expense) associated with a termination payment
received from ETHICON.
(4)
In 2003, we issued $120.0 million of 2.5% contingent
convertible subordinated notes due 2008. The net proceeds
generated by the notes, after expenses, were
$115.9 million. In 2006, we exchanged $119.5 million
of these notes for the equivalent amount of new notes. Because
the closing price of our stock at the issuance date was higher
than the market price trigger of the new notes, the new notes
were classified as a current liability. In
29
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March 2008, these notes matured and we repaid the principal
amount in cash and issued 768,000 shares of our common
stock.
ITEM 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
30
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31
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Luxtec
The market-leading manufacturer of
fiber optic headlight systems for the medical industry through
its
Luxtec
®
brand. The Luxtec products are manufactured in a
31,000 square foot leased facility located in West Boylston.
LXU Medical
A leading specialty surgical
products distributor with a sales force calling on surgeons and
key clinical decision makers, covering 18,000 operating rooms in
the southeastern, midwestern and mid-Atlantic United States. LXU
Medical is the exclusive distributor of the Luxtec fiber optic
headlight systems in these territories.
Bimeco
A critical care products distributor
with direct sales coverage in the southeastern United States.
32
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33
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2007
2006
2005
(In thousands)
$
(388
)
$
1,035
$
3,861
1,969
1,299
2,340
4,600
5,875
500
2,806
1,578
478
4,238
4,640
466
1,879
1,425
1,014
335
$
14,574
$
17,731
$
7,645
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2007
2006
2005
(In thousands)
$
207,536
$
166,432
$
134,598
342,923
252,865
143,337
550,459
419,297
277,935
214,674
168,314
107,052
335,785
250,983
170,883
61
%
60
%
61
%
2007
2006
Revenues
Revenues
% Change
(In thousands)
$
37,760
$
151,277
98,110
54
%
361,422
321,187
13
%
550,459
419,297
31
%
35
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2007
2006
2005
6
%
6
%
4
%
41
%
38
%
35
%
2
%
2
%
2
%
36
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37
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2007
2006
2005
$
$
(690
)
$
690
373
343
(821
)
$
373
$
(347
)
$
(131
)
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United States
Europe
Asia Pacific
Other Foreign
Consolidated
(In thousands)
$
417,035
$
85,764
$
21,399
$
26,261
$
550,459
317,503
77,100
12,315
12,379
419,297
207,409
48,645
11,403
10,478
277,935
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40
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41
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42
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43
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Less than
1-3
3-5
More than
Total
1 year
Years
Years
5 years
(In millions)
$
120.0
$
120.0
$
$
$
330.0
165.0
165.0
31.6
11.0
18.6
2.0
3.2
3.2
17.2
5.0
6.3
1.9
4.0
22.7
17.4
5.3
1.3
0.4
0.5
0.2
0.2
0.8
0.8
0.5
0.5
$
527.3
$
158.3
$
195.7
$
169.1
$
4.2
*
Amounts shown under Employment Agreements do not include
executive compensation or compensation resulting from a change
in control relating to our executive officers. This is covered
in the section related to Potential Payments Upon Termination or
Change in Control.
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45
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46
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47
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ITEM 7A.
Quantitative
and Qualitative Disclosures About Market Risk
ITEM 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
48
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ITEM 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A.
CONTROLS
AND PROCEDURES
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On September 6, 2007, we accepted the resignation of our
Chief Financial Officer.
Reassigned our former corporate controller from the business
development department to the finance organization to assist
with the quarterly close and process improvements.
50
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Recruited additional accounting and tax professionals who can
provide the adequate experience and knowledge to improve the
timeliness and effectiveness of our account reconciliations and
ultimately the financial reporting processes. Several
individuals have been hired within the finance organization and
management continues to recruit additional personnel. We have
utilized our internal audit group and outside consultants as
needed to assist with executing the preparation
and/or
reviews of reconciliations under our direction. Training for
current and new personnel is being addressed. We also have
developed a group that is solely dedicated to developing and
administrating training materials to departmental personnel as
well as enhancing communication channels among departments and
organizations within the company.
Enhancements to the reconciliation process have been made during
the 2007 fiscal year. Reconciliations are being reviewed by
several levels of management prior to finalization. In addition,
during the first quarter of 2008, management developed
reconciliation policies and procedures that will be administered
to all departments in 2008.
Management continues to address the control weaknesses around
intercompany accounting transactions. Detailed intercompany
reconciliations will be prepared each period and analyzed by
several levels of management. Process changes are being
identified and implemented, which enforce compliance with
existing and revised processes for intercompany transactions and
allow for easier accounting and monitoring of such transactions.
Process improvements are still being analyzed and addressed by
management.
Several individuals have been hired in the tax department. These
individuals have been working on assessing the current tax
structure and reviewing the transactions in the tax accounts.
Management will continue working on addressing the control
weaknesses as it relates to assessing and recording tax
transactions.
The Company performed a detailed study related to its controls
associated with the use of its primary financial reporting
system and has a working group in place focused on implementing
the key findings from that assessment. The Business Process
Management team was established and has been recruiting IT and
project management professionals with the necessary knowledge
and experience to continue the optimization efforts around the
Companys Enterprise Resource Planning system (ERP) and
supporting business processes. The team continues its planning
around additional phases of ERP rollouts in international
locations and the integration of acquired businesses. We expect
the remediation in this area to continue for a number of months.
ITEM 9B.
OTHER
INFORMATION
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ITEM 10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
46
President, Chief Executive Officer and Director
52
Executive Vice President and Chief Operating Officer
46
Executive Vice President, Finance and Administration and Chief
Financial Officer
58
Senior Vice President, Regulatory, Quality Assurance and
Clinical Affairs
48
Vice President and Corporate Controller
65
Chairman of the Board
44
Director
63
Director
42
Director
47
Director
64
Director
60
Director
52
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53
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54
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55
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56
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ITEM 11.
EXECUTIVE
COMPENSATION
Stuart M. Essig, our President and Chief Executive Officer;
John B. Henneman, III, our Executive Vice President,
Finance and Administration and Chief Financial Officer;
Gerard S. Carlozzi, our Executive Vice President and Chief
Operating Officer;
Maureen B. Bellantoni, our former Executive Vice President and
Chief Financial Officer;
Judith E. OGrady, our Senior Vice President, Regulatory,
Quality Assurance and Clinical Affairs; and
Jerry E. Corbin, our Vice President and Corporate Controller.
57
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58
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59
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60
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61
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leadership;
leveraging and maintaining high quality relationships with the
investment community and key customers;
keeping the Board informed and consulted on appropriate matters;
ensuring corporate governance and ethical responsibilities are
met;
employee development;
business development;
aligning and motivating the organization;
recruiting high quality executives and developing succession
planning for critical positions;
supporting and guiding the strengthening of organization
development and planning efforts;
maintaining corporate environment for continuous improvement;
supporting the development of business opportunities;
achieving operating synergies projected in operating plans;
improving diversity;
encouraging employee equity ownership;
reviewing and enhancing compliance programs;
improving the timeliness and effectiveness of the finance
function (for Messrs. Essig and Henneman);
improving and enhancing commitment to quality systems;
continuing to enhance evaluation process by tying compliance
initiatives with performance evaluations; and
participating in the development of the industry and public
policy positions and action plans.
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2007
Percentage
Base Salary
Increase from 2006
$
550,000
10.0
%
$
420,000
N/A
$
420,000
5.0
%
$
325,000
8.3
%
$
235,000
2.2
%
$
210,000
8.8
%
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66
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67
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THOMAS J. BALTIMORE, JR.
NEAL MOSZKOWSKI
68
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Change in
Pension
Value and
Non-Equity
Nonqualified Deferred
Stock
Option
Incentive Plan
Compensation
All Other
Salary
Bonus
Awards(1)
Awards(1)
Compensation(2)
Earnings
Compensation(3)
Total
Name and Principal Position
Year
($)
($)
($)
($)
($)
($)
($)
($)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
2007
550,000
3,421,373
550,000
3,875
4,525,248
2006
500,000
2,531,090
500,000
3,750
3,534,840
2007
220,673
(117,091
)
349,213
(4)
452,795
2006
293,077
117,091
120,000
118,411
(5)
648,579
2007
420,000
1,233,430
617,287
168,000
3,875
2,442,592
2006
420,000
1,169,462
785,907
168,000
3,750
2,547,119
2007
416,538
1,233,430
878,020
168,000
2,695,988
2006
400,000
1,169,462
973,568
160,000
2,703,030
2007
234,135
87,260
155,088
69,619
3,875
549,977
2006
227,577
37,411
167,828
44,112
3,750
480,678
2007
207,058
48,388
51,844
3,875
311,165
2006
97,242
6,320
32,191
1,821
137,574
(1)
The amounts in Columns (e) and (f) reflect the dollar
amount recognized for financial statement reporting purposes for
the fiscal year ended December 31, 2007 in accordance with
FAS 123R of awards pursuant to the Companys equity
incentive plans and therefore may include amounts from awards
granted in 2007 and prior periods. Assumptions used in the
calculation of these amounts for awards granted in fiscal years
ended December 31, 2007, 2006, 2005 and 2004 are included
in Note 2, Summary of Significant Accounting Policies, in
the Companys audited financial statements for the fiscal
year ended December 31, 2007, included in Item 15 of
this Annual Report. Assumptions used in the calculation of these
amounts for the fiscal years ended December 31, 2003 and
2002 are included in Note 2, Summary of Significant
Accounting Policies, in the Companys audited financial
statements for the fiscal year ended December 31, 2003,
included in the Companys Annual Report on
Form 10-K
for the year ended December 31, 2003 as filed with the
Securities and Exchange Commission on March 12, 2004. The
amounts shown exclude the impact of estimated forfeitures
related to service-based vesting conditions.
(2)
The amounts in column (g) reflect cash awards earned under
the MICP and/or as a discretionary bonus or pursuant to
employment agreements.
(3)
Except with respect to Ms. Bellantoni, (a) the amounts
in this column consist of matching contributions made by the
Company under the Companys 401(k) plan and (b) the
aggregate amount of perquisites and other personal benefits for
each executive officer was less than $10,000.
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(4)
This amount consists of (a) $325,000 of severance payments
made pursuant to Ms. Bellantonis separation
agreement, (b) $9,708 of COBRA payments made or to be made
by the Company on Ms. Bellantonis behalf for the
twelve months in connection with the termination of her
employment on September 6, 2007, (c) $11,563 of
accrued personal time paid to Ms. Bellantoni in connection
with the termination of her employment, (d) $2,642 of
Company matching contributions made by the Company under the
Companys 401(k) plan and (e) $300 paid by the Company
for the annual fee for a corporate credit card provided only to
certain employees.
(5)
This amount consists of (a) $116,380 for moving and
relocation expenses paid by the Company, (b) $1,731 of
Company matching contributions made by the Company under the
Companys 401(k) plan, and (c) $300 paid by the
Company for the annual fee for a corporate credit card provided
only to certain employees.
(6)
Ms. Bellantoni was the Companys principal financial
officer from January 10, 2006 until September 6, 2007.
Ms. Bellantonis last day with the Company was
September 6, 2007.
(7)
Mr. Henneman was appointed Acting Chief Financial Officer
on September 6, 2007 and Chief Financial Officer on
May 13, 2008.
(8)
Mr. Corbin joined the Company in June 2006 as Vice
President and Corporate Controller.
All Other
All Other
Stock
Option
Grant
Awards:
Awards:
Exercise
Date Fair
Estimated Future Payouts
Number of
Number of
or Base
Value of
Estimated Future Payouts
Under Equity Incentive Plan
Shares of
Securities
Price of
Stock and
Date of
Under Non-Equity Incentive Plan Awards(1)
Awards(2)
Stock or
Underlying
Option
Option
Grant
Comp.
Threshold
Target
Maximum
Threshold
Target
Maximum
Units(3)
Options
Awards
Awards(4)
Name
Date
Committee
($)
($)
($)
(#)
(#)
(#)
(#)
(#)
($/Sh)
($)
(b)
Action
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
12-18-07
12-18-07
200,000
(6)
40.34
3,366,000
01-02-07
07-21-04
(5)
550,000
04-02-07
03-15-07
4,366
(7)
200,006
01-02-07
01-08-06
(5)
130,000
(7)
04-02-07
03-15-07
4,366
200,006
01-02-07
12-19-05
(5)
168.000
04-02-07
03-15-07
4,366
200,006
01-02-07
12-19-05
(5)
168,000
01-02-07
03-15-07
56,400
70,500
105,750
04-02-07
03-15-07
3,612
165,466
01-02-07
03-15-07
42,000
52,500
78,750
04-02-07
03-15-07
2,636
120,755
(1)
The amounts shown in these columns represent each
executives annual incentive opportunity under the MICP or
pursuant to an employment agreement. See
Compensation Discussion and
Analysis Elements of Compensation Annual
Cash Incentives for more information regarding the MICP
and applicable employment agreement. The Target is
calculated by multiplying the officers base salary by the
executives target award percentages provided in the
applicable employment agreement for Messrs. Essig, Henneman
and Carlozzi and Ms. Bellantoni and under the MICP for
Ms. OGrady and Mr. Corbin. Under the MICP, the
Maximum is calculated by multiplying the
Target by 150%. The Threshold shows the
amount payable if the performance goals under the MICP are
achieved at the minimum required 90% level.
(2)
The amounts shown in these columns represent shares of
performance stock granted under the Companys 2003 Equity
Incentive Plan. See Compensation Discussion
and Analysis Elements of Compensation
Long-Term Equity-Based Incentives for a description of the
material terms of these performance stock awards.
(3)
The amounts shown in this column represent shares of restricted
stock granted under the Companys 2003 Equity Incentive
Plan. See Compensation Discussion and
Analysis Elements of Compensation
Long-Term Equity-Based Incentives for a description of the
material terms of these restricted stock awards.
(4)
This column reflects the full grant date fair value of the
restricted stock, performance stock and stock options under
FAS 123R granted to each named executive officer in 2007.
Generally, the full grant date fair value is the amount that the
Company would expense in its financial statements over the
awards vesting schedule. For
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restricted stock and performance stock, fair value is calculated
using the closing price of the Companys common stock on
the grant date noted, which was $45.81 on April 2, 2007.
For the stock options granted to Mr. Essig, fair value is
calculated using the binomial distribution value on the grant
date. The fair value shown for stock awards and option awards
are accounted for in accordance with FAS 123R. For
additional information on the valuation assumptions, refer to
Note 2 of the Companys financial statements in
Item 15 of this Annual Report. These amounts reflect the
Companys accounting expense and do not correspond to the
actual value that will be recognized by the named executive
officers.
(5)
The Compensation Committee approved the terms of the
executives employment agreement, including the bonus
opportunity, on this date.
(6)
This amount represents the annual stock option grant to
Mr. Essig. 25% of the award vests one year after the grant
date and the remaining 75% vests monthly thereafter over
36 months. The option has a term of 10 years.
(7)
Ms. Bellantoni forfeited this award in connection with the
termination of her employment with the Company.
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Option Awards(1)
Stock Awards
Equity
Incentive
Equity
Plan Awards:
Incentive
Market or
Plan Awards:
Payout
Number of
Value of
Market
Unearned
Unearned
Number of
Number of
Number of
Value of
Shares,
Shares,
Securities
Securities
Shares or
Shares or
Units or
Units or
Underlying
Underlying
Units of
Units of
Other
Other
Unexercised
Unexercised
Option
Stock
Stock
Rights
Rights
Options
Options
Exercise
Option
That Have
That Have
That Have
That Have
(#)
(#)
Price(2)
Expiration
Not Vested
Not Vested(3)
Not Vested
Not Vested(4)
Name
Exercisable
Unexercisable
($)
Date
(#)
($)
(#)
($)
(b)
(c)
(e)
(f)
(g)
(h)
(i)
(j)
282,086
11.00
12/22/2010
36,208
17.65
12/31/2008
24,479
521
28.78
1/2/2010
150,000
50,000
34.49
12/17/2014
213,541
36,459
31.38
7/27/2014
100,000
100,000
35.57
12/19/2015
50,000
150,000
42.53
12/19/2016
200,000
40.34
12/18/2017
(5)
(5)
(6)
(6)
(6)
(6)
10,000
14.87
8/2/2008
5,000
17.72
11/21/2008
1,000
17.60
12/16/2008
19,062
17.65
12/31/2008
20,000
18.63
2/24/2009
20,000
22.78
4/7/2009
5,000
32.39
11/3/2009
24,479
521
28.78
1/2/2010
17,500
2,500
32.32
6/1/2010
19,261
5,739
35.52
11/15/2010
5,312
2,188
38.72
2/1/2011
50,000
50,000
30.25
7/26/2011
4,366
(7)
183,066
100,000
(8)
4,193,000
12,500
27.32
9/26/2009
834
32.39
11/3/2009
4,688
522
28.78
1/2/2010
2,500
2,500
32.32
6/1/2010
4,687
5,730
35.52
11/15/2010
1,406
2,188
38.72
02/01/2011
25,000
50,000
30.25
07/26/2011
4,366
(7)
183,066
100,000
(8)
4,193,000
1,875
14.87
08/02/2008
500
17.60
12/16/2008
9,583
17.65
12/31/2008
500
22.78
04/07/2009
2,000
32.39
11/03/2009
14,687
313
28.78
01/02/2010
4,375
625
32.32
06/01/2010
1,732
518
32.02
11/01/2010
11,435
3,565
35.52
11/15/2010
3,750
3,750
33.48
11/01/2011
7,394
(9)
310,030
4,090
(10)
171,494
(1)
For option awards made to Mr. Essig and option awards made
prior to July 26, 2005 to other officers, 25% of the award
vests one year after the grant date and the remaining 75% vests
monthly thereafter over 36 months.
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Option awards made on or after July 26, 2005 to employees
other than Mr. Essig vest in four equal annual installments
beginning on the first anniversary of the grant date. Options
issued to Mr. Essig have a term of 10 years. Options
issued to other officers have a term of six years.
(2)
The option exercise price is equal to the closing price of our
common stock as reported by the NASDAQ Global Select Market on
the date of grant.
(3)
Market value is calculated by multiplying the number of shares
in column (g) by $41.93, the closing price of the
Companys common stock as reported by the NASDAQ Global
Select Market on December 31, 2007.
(4)
Market value is calculated by multiplying the number of shares
in column (i) by $41.93, the closing price of the
Companys common stock as reported by the NASDAQ Global
Select Market on December 31, 2007.
(5)
500,000 and 750,000 shares of common stock underlying
restricted stock units granted to Mr. Essig in 2000 and
2004, respectively, were vested as of the grant date. However,
Mr. Essig is not entitled to receive such underlying shares
until after December 31, 2007. Therefore, they are shown in
the Nonqualified Deferred Compensation Table.
(6)
As of September 6, 2007, all outstanding awards held by
Ms. Bellantoni were forfeited as a result of her
termination of employment with the Company on that date.
(7)
Consists of 4,366 shares of common stock underlying a
performance stock award. The terms of the award provide that
these shares will be deliverable as soon as practicable after
December 31, 2009 if the performance condition is met. The
performance condition was met in 2007.
(8)
Consists of 100,000 shares of common stock underlying a
performance stock award. The terms of the award provide that
these shares will be deliverable as soon as practicable after
December 31, 2008 if the performance condition is met. The
performance condition was met in 2006.
(9)
Consists of 2,500 shares of restricted stock that will vest
on January 3, 2009, 1,282 shares of restricted stock
that will vest on July 3, 2009, and 3,612 shares of
restricted stock that will vest on April 2, 2010 (in each
case subject to continued employment).
(10)
Consists of 769 shares of restricted stock that will vest
on July 3, 2009, 685 shares of restricted stock that
will vest on November 1, 2009, and 2,636 shares of
restricted stock that will vest on April 2, 2010 (in each
case subject to continued employment).
Option Awards
Stock Awards
Number of Shares
Value Realized
Number of Shares
Value Realized
Acquired on Exercise
on Exercise(1)
Acquired on Vesting
on Vesting
Name
(#)
($)
(#)
($)
(b)
(c)
(d)
(e)
31,565
681,804
152,000
2,954,311
41,613
744,317
7,500
117,757
(1)
Value realized is calculated on the basis of the difference
between the per share exercise price and the market price of the
Companys common stock as reported by the NASDAQ Global
Select Market on the date of exercise, multiplied by the number
of shares of common stock underlying the options exercised.
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Aggregate
Executive
Registrant
Aggregate
Aggregate
Balance at
Contributions in
Contributions in
Earnings
Withdrawals/
Last Fiscal
Last Fiscal Year
Last Fiscal Year
in Last
Distributions
Year-End(1)
Name
($)
($)
Fiscal Year
($)
($)
(b)
(c)
(d)
(e)
(f)
52,412,500
(1)
This represents the year-end value of 500,000 shares of
common stock underlying restricted stock units granted in 2000
and 750,000 shares of common stock underlying restricted
stock units granted in 2004. These restricted units vested as of
the grant date, but Mr. Essig did not have the right to
receive the underlying shares of common stock as of
December 31, 2007. The 500,000 shares underlying the
2000 grant were delivered to Mr. Essig on March 4,
2008. The 750,000 shares underlying the 2004 grant are
deliverable as soon as administratively practicable on or after
the first business day that occurs immediately following the
6-month
period after the date of Mr. Essigs separation from
service from the Company. Mr. Essig has the right to defer
the delivery of these shares until June 20, 2029 if certain
conditions are met. The aggregate balance shown above is based
on the $41.93 closing price of our common stock on
December 31, 2007.
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75
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76
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77
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78
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Termination
Without
Cause or
Termination
With Good
Without Cause
Reason
Upon a
or With Good
(Before a
Change in
Reason (After
Change in
Non-Renewal
Control (No
a Change in
Control)
of Agreement
Death
Disability
Termination)
Control)
$
1,250,000
$
550,000
$
1,100,000
$
3,839,000
$
29,400
$
14,700
$
14,700
$
29,400
$
1,716,973
$
1,716,973
$
1,716,973
$
1,716,973
$
1,716,973
$
1,716,973
$
31,447,500
$
31,447,500
$
31,447,500
$
31,447,500
$
52,412,500
$
52,412,500
$
74,301
$
34,443,873
$
33,164,473
$
33,729,173
$
34,279,173
$
54,129,473
$
58,072,174
$
588,000
$
588,000
$
420,000
$
1,758,120
$
14,700
$
14,700
$
14,700
$
44,100
$
658,687
$
658,687
$
658,687
$
658,687
$
658,687
$
658,687
$
4,376,066
$
2,832,404
$
4,376,066
$
4,376,066
$
4,376,066
$
4,376,066
$
5,637,453
$
4,093,791
$
5,469,453
$
5,034,753
$
5,034,753
$
6,836,973
$
588,000
$
588,000
$
420,000
$
1,758,120
$
14,700
$
14,700
$
14,700
$
44,100
$
658,642
$
658,642
$
658,642
$
658,642
$
658,642
$
658,642
$
4,376,066
$
2,832,404
$
4,376,066
$
4,376,066
$
4,376,066
$
4,376,066
$
961,373
$
5,637,408
$
4,093,746
$
5,469,408
$
5,034,708
$
5,034,708
$
7,798,301
$
555,433
$
14,700
$
69,795
$
69,795
$
310,030
$
310,030
$
379,825
$
949,958
(1)
The cost of continued participation in the Companys health
and other employee benefit plans for each executive is assumed
to be $1,225 per month.
(2)
Includes the value of certain vested and deferred restricted
stock units.
(3)
The Essig, Henneman and Carlozzi Agreements provide for
reasonable legal fees and expenses that may be incurred by each
executive as a result of his termination of employment related
to a change in control. However, the table does not include a
value for these fees and expenses because they would be incurred
only if there is a
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dispute under these Agreements. Thus, these amounts are
undeterminable. For Mr. Essig only, the $74,301 value
represents the interest on his cash severance payment if it is
required to be delayed for six months because of the application
of section 409A of the Code, with such interest applied at
the rate of 3.84% compounded monthly.
Fees Earned or
Stock
Option
Paid in Cash(1)
Awards(2)
Awards(2)(3)
Total
Name
($)
($)
($)
($)
(b)
(c)
(d)
(h)
147,497
147,497
147,497
147,497
178,328
178,328
208,224
208,224
26,549
27,477
130,575
184,601
9,511
147,497
157,008
19,022
208,224
227,246
(1)
Includes amounts earned for 2007, but not paid until 2008.
(2)
Reflects the dollar amount recognized for financial statement
reporting purposes for the fiscal year ended December 31,
2007 in accordance with FAS 123R. Assumptions used in the
calculation of these amounts are included in Note 2 of the
Companys financial statements in Item 15 of this
Annual Report. However, as required, the amounts shown exclude
the impact of estimated forfeitures related to service-based
vesting conditions.
(3)
The aggregate number of options held by each director as of
December 31, 2007 was as follows: Thomas J. Baltimore,
Jr. 0; Keith Bradley 30,000; Richard E.
Caruso 55,000; Neal Moszkowski 24,460;
Christian Schade - 15,000; James M. Sullivan 40,000
and Anne M. VanLent 39,460. All of these options had
vested as of such date. No shares of restricted stock were held
by any director as of such date.
(4)
Mr. Baltimore joined the Board of Directors on
March 5, 2007.
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Number of Securities
Weighted-Average
to be Issued Upon
Exercise Price of
Number of Securities
Exercise of
Outstanding
Remaining Available for
Outstanding Options,
Options, Warrants
Future Issuance Under
Warrants and Rights
and Rights
Equity Compensation Plans(1)
4,391,695
(2)
$
30.81
(3)
2,116,168
(4)(5)
4,391,695
$
30.81
2,116,168
(1)
Excludes securities to be issued upon the exercise of
outstanding options, warrants and rights.
(2)
Consists of (a) 1,251,310 shares of common stock
underlying Restricted Stock Units of which 500,000 were
converted to shares and distributed on March 4, 2008,
(b) 208,732 shares of common stock underlying
outstanding performance stock, (c) 13,198 shares of
common stock underlying outstanding contract stock and
(d) 2,918,455 shares of common stock underlying
outstanding options. Of these amounts, the following securities
are issuable under the 2003 Plan, (a) 753,518 shares
of common stock underlying Restricted Stock Units,
(b) 208,732 shares of common stock underlying
outstanding performance stock, (c) 10,990 shares of
common stock underlying outstanding contract stock and
(d) 2,666,091 shares of common stock underlying
outstanding options.
(3)
Excluding the Restricted Units, performance stock and contract
stock, the weighted average exercise price is $30.81.
(4)
Consists of 1,093,443 shares of common stock which remain
available for issuance under the Employee Stock Purchase Plan
and 1,022,725 shares which remain available for issuance
under the other Approved Plans, including 993,220 shares
under the 2003 Plan. The 1998 Stock Option Plan expired on
February 26, 2008. Although 2,310 shares remained
available for issuance under that plan as of December 31,
2007, no grants were made or shares issued after
December 31, 2007 under that plan.
(5)
This number does not include the 750,000 additional shares
proposed to be authorized for issuance under the 2003 Equity
Incentive Plan as proposed by the Board to be amended, subject
to stockholder approval.
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ITEM 12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Amount and Nature of
Beneficial Ownership
Percent
Shares(1)
of Class
3,293
*
36,197
(2)
*
6,711,614
(3)
24.6
%
2,217,813
(4)
7.8
%
27,971
(5)
*
16,223
(6)
*
69,796
(7)
*
40,708
(8)
*
0
*
231,775
(9)
*
61,785
(10)
*
6,385
*
79,225
(11)
*
9,502,785
(12)
33.1
%
3,425,735
(13)
12.6
%
6,614,543
(14)
24.2
%
6,591,205
(15)
24.1
%
2,852,195
(16)
10.4
%
2,224,300
(17)
8.1
%
1,993,280
(18)
7.3
%
1,437,962
(19)
5.3
%
*
Represents beneficial ownership of less than 1%.
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(1)
Shares not outstanding but deemed beneficially owned by virtue
of the right of an individual to acquire them within
60 days of May 1, 2008 upon the exercise of an option
or other convertible security are treated as outstanding for
purposes of determining beneficial ownership and the percentage
beneficially owned by such individual.
(2)
Consists of 30,000 shares that Dr. Bradley has the
right to acquire within 60 days of May 1, 2008 upon
the exercise of options held by him.
(3)
Includes 6,591,205 shares held by TRU ST PARTNERSHIP, L.P.,
a Pennsylvania general partnership (TRU ST) (also
see footnote 15 below). Also includes 23,338 shares
held by Provco Leasing Corporation (Provco), of
which Dr. Caruso is President and sole director and
19,000 shares held by The Uncommon Individual Foundation,
of which Dr. Caruso is the Chief Executive Officer. Provco
is the corporate general partner of TRU ST. Dr. Caruso may
be deemed to have shared voting and dispositive power over the
shares held by TRU ST and Provco. Also includes
38,071 shares owned by Dr. Caruso and
40,000 shares that Dr. Caruso has the right to acquire
within 60 days of May 1, 2008 upon the exercise of
options held by him. Dr. Caruso disclaims beneficial
ownership of the shares held by TRU ST, except to the extent of
his pecuniary interest therein. Dr. Carusos address
is
c/o TRU
ST PARTNERSHIP, L.P, 795 E. Lancaster Avenue,
Suite 200, Villanova, PA 19085.
(4)
Includes 963,085 shares that Mr. Essig has the right
to acquire within 60 days of May 1, 2008 upon the
exercise of options held by him. Excludes outstanding Restricted
Units awarded to Mr. Essig in 2004, which entitle him to
receive an aggregate of 750,000 shares of common stock.
These 750,000 Restricted Units held by Mr. Essig vested on
the grant date, but are not yet deliverable and do not give him
the right to acquire any shares within 60 days of
May 1, 2008. Pursuant to the terms of a forward sale
contract entered into with Credit Suisse First Boston Capital
LLC on December 14, 2004, Mr. Essig is obligated to
deliver to Credit Suisse First Boston Capital LLC on
March 28, 2013 between 264,550 and 500,000 shares of
common stock (or, at the election of Mr. Essig, the cash
equivalent of such shares). Mr. Essig retains voting power
over these shares pending the settlement of the forward sale
contract.
(5)
Includes 24,460 shares that Mr. Moszkowski has the
right to acquire within 60 days of May 1, 2008 upon
the exercise of options held by him.
(6)
Includes 15,000 shares that Mr. Schade has the right
to acquire within 60 days of May 1, 2008 upon
the exercise of options held by him.
(7)
Includes 30,000 shares that Mr. Sullivan has the right
to acquire within 60 days of May 1, 2008 upon
the exercise of options held by him.
(8)
Includes 39,460 shares that Ms. VanLent has the right
to acquire within 60 days of May 1, 2008 upon
the exercise of options held by her.
(9)
Includes 203,703 shares that Mr. Henneman has the
right to acquire within 60 days of May 1, 2008
upon the exercise of options held by him.
(10)
Includes 58,700 shares that Mr. Carlozzi has the right
to acquire within 60 days of May 1, 2008 upon
the exercise of options held by him.
(11)
Includes 53,600 shares that Ms. OGrady has the
right to acquire within 60 days of May 1, 2008
upon the exercise of options held by her.
(12)
See footnotes 2 through 11 above.
(13)
FMR LLC, a holding company of investment companies, and Edward
C. Johnson 3d each report beneficially owning and having sole
dispositive power over 3,425,735 shares of which FMC LLC
has sole voting power over 864,558 shares. Of the
3,425,735 shares, Fidelity Management & Research
Company (Fidelity), a wholly-owned subsidiary of FMR
LLC and an investment adviser registered under Section 203
of the Investment Advisers Act of 1940 (the 1940
Act), is the beneficial owner of 2,499,717 shares as
a result of acting as such an investment advisor, Edward C.
Johnson 3d and FMR LLC, through its control of Fidelity, and the
funds each has sole dispositive power over 2,
499,717 shares owned by the funds. Members of the family of
Mr. Johnson, Chairman of FMR LLC, are the predominant
owners, directly or through trusts, of Series B voting
common shares of FMR LLC, representing 49% of the voting power
of FMR LLC. The Johnson family group and all other Series B
shareholders have entered into a shareholders voting
agreement under which all
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Series B voting common shares will be voted in accordance
with the majority vote of Series B voting common shares.
Accordingly, through their ownership of voting common shares and
the execution of the voting agreement, members of the Johnson
family group may be deemed under the 1940 Act to form a
controlling group with respect to FMR LLC. Neither FMR LLC nor
Mr. Johnson has the sole power to vote or direct the voting
of the shares owned directly by the Fidelity funds, which power
resides with the funds board of trustees. Pyramis Global
Advisors, LLC (PGALLC), an indirect wholly-owned
subsidiary of FMR LLC and an investment advisor registered under
the 1940 Act, is the beneficial owner of 120,200 shares as
a result of its serving as an investment advisor.
Mr. Johnson and FMR LLC, through its control of PGALLC,
each has sole dispositive power and sole voting power over
120,200 shares. Pyramis Global Advisors Trust Company
(PGATC), an indirect wholly-owned subsidiary of FMR
LLC and a bank as defined under Section 3(a)(6) of the Exchange
Act, is the beneficial owner of 731,609 shares as a result
of its serving as an investment manager. Mr. Johnson and
FMR LLC, through its control of PGATC, each has sole dispositive
power over 731,609 shares and sole voting power over
670,149 shares. Fidelity International Limited
(FIL) is the beneficial owner of 74,209 shares.
Partnerships controlled predominately by members of the family
of Mr. Johnson and FIL, or trusts for their benefit, own
shares of FIL stock with the right to cast approximately 47% of
the total votes which may be cast by all holders of FIL voting
stock. FMR LLC and FIL are of the view that they are not acting
as a group for purposes of Section 13(d) under
the Exchange Act. However, FMR LLC made the filing of its
Schedule 13G/A on a voluntary basis as if all the shares
are beneficially owned by FMR LLC and FIL on a joint basis. The
foregoing information has been included solely in reliance upon,
and without independent investigation of, the disclosures
contained in the Schedule 13G/A filed by FMR LLC with the
Securities and Exchange Commission on February 13, 2008.
(14)
Includes 6,591,205 shares held by TRU ST (see
footnote 15 below), of which Provco is the general
corporate partner. Provco may be deemed to have shared voting
and dispositive power over these shares.
(15)
Pursuant to the terms of a forward sale contract entered into
with Credit Suisse First Boston Capital LLC on November 23,
2004, TRU ST is obligated to deliver to Credit Suisse First
Boston Capital LLC on January 15, 2013 between 322,581 and
600,000 shares of common stock (or, at the election of TRU
ST, the cash equivalent of such shares). TRU ST retains voting
power over these shares pending the settlement of the forward
sale contract.
(16)
Neuberger Berman Inc. and Neuberger Berman, LLC each have shared
dispositive power over all of these shares, shared voting power
over 2,415,402 of these shares and sole voting power over 1,600
of these shares Neuberger Berman Management Inc has shared
dispositive power over and shared voting power over 2,415,402 of
these shares. Neuberger Berman Equity Funds has shared
dispositive power over and shared voting power over 2,398,802 of
these shares The foregoing information has been included solely
in reliance upon, and without independent investigation of, the
disclosures contained in the Schedule 13G/A filed by
Neuberger Berman Inc., Neuberger Berman, LLC, Neuberger Berman
Management Inc, and Neuberger Berman Equity Funds with the
Securities and Exchange Commission on February 8, 2008.
(17)
T. Rowe Price Associates, Inc. (T. Rowe Price) has
sole dispositive power over all of these shares and has sole
voting power over 255,200 of these shares. These securities are
owned by various individual and institutional investors which T.
Rowe Price Associates, Inc. (Price Associates)
serves as investment adviser with power to direct investments
and/or sole power to vote the securities. For purposes of the
reporting requirements of the Exchange, Price Associates is
deemed to be a beneficial owner of such securities; however,
Price Associates expressly disclaims that it is, in fact, the
beneficial owner of such securities. The foregoing information
has been included solely in reliance upon, and without
independent investigation of, the disclosures contained in the
Schedule 13G/A filed by T. Rowe Price with the Securities
and Exchange Commission on February 14, 2008.
(18)
William Blair & Company, L.L.C. (William
Blair) has sole dispositive and voting power over all of
these shares. The foregoing information has been included solely
in reliance upon, and without independent investigation of, the
disclosures contained in the Schedule 13G/A filed by
William Blair with the Securities and Exchange Commission on
January 9, 2008.
(19)
Oz Management LP, Och-Ziff Holding Corporation, Och-Ziff Capital
Management Group LLC and Daniel S. Och. have shared dispositive
voting power and shared voting power over these shares. Oz
Master Fund, Ltd.
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has shared dispositive power and shared voting power over
1,421,231 of these shares. For purposes of the reporting
requirements of the Exchange, Oz Management LP, Och-Ziff Holding
Corporation, Och-Ziff Capital Management Group LLC, Daniel S.
Och and Oz Master Fund, Ltd. may be deemed to be a beneficial
owner of such securities; however, each of them expressly
disclaims that it or he is, in fact, the beneficial owner of
such securities. The foregoing information has been included
solely in reliance upon, and without independent investigation
of, the disclosures contained in the Schedule 13G filed by
Oz Management LP, Och-Ziff Holding Corporation, Och-Ziff Capital
Management Group LLC, Daniel S. Och and Oz Master Fund, Ltd with
the Securities and Exchange Commission on March 10, 2008.
ITEM 13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTONS, AND DIRECTOR
INDEPENDENCE
85
Table of Contents
ITEM 14.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
Actual Fees
2007
2006
(In thousands)
$
3,805
$
2,174
773
284
$
4,578
$
2,458
194
377
$
4,772
$
2,835
86
ITEM 15.
EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES
3
.1(a)
Amended and Restated Certificate of Incorporation of the Company
(Incorporated by reference to Exhibit 3.1(a) to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)
3
.1(b)
Certificate of Amendment to Amended and Restated Certificate of
Incorporation dated May 22, 1998 (Incorporated by reference
to Exhibit 3.1(b) to the Companys Annual Report on
Form 10-K
for the year ended December 31, 1998)
87
Table of Contents
3
.1(c)
Certificate of Amendment to Amended and Restated Certificate of
Incorporation dated May 17, 1999 (Incorporated by reference
to Exhibit 3.1(c) to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)
3
.2
Amended and Restated By-laws of the Company (Incorporated by
reference to Exhibit 3.1 to the Companys Current
Report on
Form 8-K
filed on November 3, 2006)
4
.1
Indenture, dated as of March 31, 2003, between the Company
and Wells Fargo Bank Minnesota, National Association
(Incorporated by reference to Exhibit 4.1 to the
Companys Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2003)
4
.2
Registration Rights Agreement, dated as of March 31, 2003,
between the Company and Credit Suisse First Boston, LLC, Banc of
America Securities LLC and U.S. Bancorp Piper Jaffray Inc.
(Incorporated by reference to Exhibit 4.3 to the
Companys Registration Statement on
Form S-3
filed on June 30, 2003 (File
No. 333-106625))
4
.3(a)
Credit Agreement, dated as of December 22, 2005, among
Integra LifeSciences Holdings Corporation, the lenders party
thereto, Bank of America, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer, Citibank FSB and SunTrust Bank, as
Co-Syndication Agents, and Royal Bank of Canada and Wachovia
Bank, National Association, as Co-Documentation Agents
(Incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on December 29, 2005)
4
.3(b)
First Amendment, dated as of February 15, 2006, among
Integra LifeSciences Holdings Corporation, the lenders party
thereto, Bank of America, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer, Citibank FSB and SunTrust Bank, as
Co-Syndication Agents, and Royal Bank of Canada and Wachovia
Bank, National Association, as Co-Documentation Agents
(Incorporated by reference to Exhibit 4.3(b) to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)
4
.3(c)
Second Amendment, dated as of February 23, 2007, among
Integra LifeSciences Holdings Corporation, the lenders party
thereto, Bank of America, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer, Citibank FSB and SunTrust Bank, as
Co-Syndication Agents, and Royal Bank of Canada and Wachovia
Bank, National Association, as Co-Documentation Agents
(Incorporated by reference to Exhibit 4.1 to the
Companys Current Report on
Form 8-K
filed on February 27, 2007)
4
.3(d)
Third Amendment, dated as of June 4, 2007, among Integra
LifeSciences Holdings Corporation, the lenders party thereto,
Bank of America, N.A., as Administrative Agent, Swing Line
Lender and L/C Issuer, Citibank, N.A., successor by merger to
Citibank, FSB, as Syndication Agent and JPMorgan Chase Bank,
N.A., Deutsche Bank Trust Company Americas and Royal Bank
of Canada, as Co-Documentation Agents (Incorporated by reference
to Exhibit 4.1 to the Companys Current Report on
Form 8-K
filed on June 6, 2007)
4
.3(e)
Fourth Amendment, dated as of September 5, 2007, among
Integra LifeSciences Holdings Corporation, the lenders party
thereto, Bank of America, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer, Citibank, N.A., successor by merger
to Citibank FSB, as Syndication Agent and JPMorgan Chase Bank,
N.A., Deutsche Bank Trust Company Americas and Royal Bank
of Canada, as Co-Documentation Agents (Incorporated by reference
to Exhibit 4.1 to the Companys Current Report on
Form 8-K
filed on September 6, 2007)
4
.4
Security Agreement, dated as of December 22, 2005, among
Integra LifeSciences Holdings Corporation and the additional
grantors party thereto in favor of Bank of America, N.A., as
administrative and collateral agent (Incorporated by reference
to Exhibit 4.4 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)
4
.5
Pledge Agreement, dated as of December 22, 2005, among
Integra LifeSciences Holdings Corporation and the additional
grantors party thereto in favor of Bank of America, N.A., as
administrative and collateral agent (Incorporated by reference
to Exhibit 4.5 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)
4
.6
Subsidiary Guaranty Agreement, dated as of December 22,
2005, among the guarantors party thereto and individually as a
Guarantor), in favor of Bank of America, N.A., as
administrative and collateral agent (Incorporated by reference
to Exhibit 4.6 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)
4
.7
Indenture, dated as of September 29, 2006, between the
Company and Wells Fargo Bank, N.A. (Incorporated by reference to
Exhibit 4.1 to the Companys Current Report on
Form 8-K
filed on October 5, 2006)
Table of Contents
4
.8
Indenture, dated June 11, 2007, among Integra LifeSciences
Holdings Corporation, Integra LifeSciences Corporation and Wells
Fargo Bank, N.A., as trustee (Incorporated by reference to
Exhibit 4.1 to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
4
.9
Form of 2.75% Senior Convertible Note due 2010 (included in
Exhibit 4.8) (Incorporated by reference to Exhibit 4.2
to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
4
.10
Indenture, dated June 11, 2007, among Integra LifeSciences
Holdings Corporation, Integra LifeSciences Corporation and Wells
Fargo Bank, N.A., as trustee (Incorporated by reference to
Exhibit 4.3 to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
4
.11
Form of 2.375% Senior Convertible Note due 2012 (included
in Exhibit 4.10) (Incorporated by reference to
Exhibit 4.4 to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
4
.12
Registration Rights Agreement, dated June 11, 2007, among
Integra LifeSciences Holdings Corporation, Banc of America
Securities LLC, J.P. Morgan Securities Inc. and Morgan
Stanley & Co., Incorporated, as representatives of the
several initial purchasers (Incorporated by reference to
Exhibit 4.5 to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
4
.13
Registration Rights Agreement, dated June 11, 2007, among
Integra LifeSciences Holdings Corporation, Banc of America
Securities LLC, J.P. Morgan Securities Inc. and Morgan
Stanley & Co., Incorporated, as representatives of the
several initial purchasers (Incorporated by reference to
Exhibit 4.6 to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
10
.1(a)
Lease between Plainsboro Associates and American Biomaterials
Corporation dated as of April 16, 1985, as assigned to
Colla-Tec, Inc. on October 24, 1989 and as amended through
November 1, 1992 (Incorporated by reference to
Exhibit 10.30 to the Companys Registration Statement
on Form 10/A (File
No. 0-26224)
which became effective on August 8, 1995)
10
.1(b)
Lease Modification #2 entered into as of the 28th day of
October, 2005, by and between Plainsboro Associates and Integra
LifeSciences Corporation (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on November 2, 2005)
10
.2
Equipment Lease Agreement between Medicus Corporation and the
Company, dated as of June 1, 2000 (Incorporated by
reference to Exhibit 10.1 to the Companys Quarterly
Report on
Form 10-Q
for the quarter ended June 30, 2000)
10
.3
Form of Indemnification Agreement between the Company and [ ]
dated August 16, 1995, including a schedule identifying the
individuals that are a party to such Indemnification Agreements
(Incorporated by reference to Exhibit 10.37 to the
Companys Registration Statement on
Form S-1
(File
No. 33-98698)
which became effective on January 24, 1996)*
10
.4
1993 Incentive Stock Option and Non-Qualified Stock Option Plan
(Incorporated by reference to Exhibit 10.32 to the
Companys Registration Statement on Form 10/A (File
No. 0-26224)
which became effective on August 8, 1995)*
10
.5
1996 Incentive Stock Option and Non-Qualified Stock Option Plan
(as amended through December 27, 1997) (Incorporated by
reference to Exhibit 10.4 to the Companys Current
Report on
Form 8-K
filed on February 3, 1998)*
10
.6
1998 Stock Option Plan (amended and restated as of July 26,
2005) (Incorporated by reference to Exhibit 10.3 to the
Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2005)*
10
.7
1999 Stock Option Plan (amended and restated as of July 26,
2005) (Incorporated by reference to Exhibit 10.4 to the
Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2005)*
10
.8(a)
Employee Stock Purchase Plan (as amended on May 17, 2004)
(Incorporated by reference to Exhibit 4.1 to the
Companys Registration Statement on
Form S-8
(Registration
No. 333-127488)
filed on August 12, 2005)*
10
.8(b)
First Amendment to the Companys Employee Stock Purchase
Plan, dated October 26, 2005 (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on November 1, 2005)*
10
.9
2000 Equity Incentive Plan (amended and restated as of
July 26, 2005) (Incorporated by reference to
Exhibit 10.5 to the Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2005)*
Table of Contents
10
.10
2001 Equity Incentive Plan (amended and restated as of
July 26, 2005) (Incorporated by reference to
Exhibit 10.6 to the Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2005)*
10
.11
2003 Equity Incentive Plan (amended and restated as of
July 26, 2005) (Incorporated by reference to
Exhibit 10.7 to the Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2005)*
10
.12(a)
Second Amended and Restated Employment Agreement dated
July 27, 2004 between the Company and Stuart M. Essig
(Incorporated by reference to Exhibit 10.1 to the
Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2004)*
10
.12(b)
Amendment
2006-1,
dated as of December 19, 2006, to the Second Amended and
Restated Employment Agreement, between the Company and Stuart M.
Essig (Incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on December 22, 2006)*
10
.12(c)
Amendment
2008-1,
dated as of March 6, 2008, to the Second Amended and
Restated Employment Agreement, between the Company and Stuart M.
Essig*
10
.13
Indemnity letter agreement dated December 27, 1997 from the
Company to Stuart M. Essig (Incorporated by reference to
Exhibit 10.5 to the Companys Current Report on
Form 8-K
filed on February 3, 1998)*
10
.14(a)
Registration Rights Provisions for Stuart M. Essig (Incorporated
by reference to Exhibit B of Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on February 3, 1998)*
10
.14(b)
Registration Rights Provisions for Stuart M. Essig (Incorporated
by reference to Exhibit 10.2 to the Companys Current
Report on
Form 8-K
filed on January 8, 2001)*
10
.14(c)
Registration Rights Provisions for Stuart M. Essig (Incorporated
by reference to Exhibit B of Exhibit 10.1 to the
Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2004)*
10
.15(a)
Amended and Restated 2005 Employment Agreement between John B.
Henneman, III and the Company dated December 19, 2005
(Incorporated by reference to Exhibit 10.16 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)*
10
.15(b)
Amendment
2008-1,
dated as of January 2, 2008, to the Amended and Restated
2005 Employment Agreement between John B. Henneman, III and
the Company*
10
.16(a)
Amended and Restated 2005 Employment Agreement between Gerard S.
Carlozzi and the Company dated December 19, 2005
(Incorporated by reference to Exhibit 10.17 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)*
10
.16(b)
Amendment
2008-1,
dated as of January 2, 2008, to the Amended and Restated
2005 Employment Agreement between Gerard S. Carlozzi and the
Company*
10
.17(a)
Severance Agreement between Judith OGrady and the Company
dated as of January 1, 2007 (Incorporated by reference to
Exhibit 10.17 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2006)*
10
.17(b)
Severance Agreement between Judith OGrady and the Company
dated as of January 1, 2008*
10
.18
Lease Contract, dated April 1, 2005, between the Puerto
Rico Industrial Development Company and Integra CI, Inc.
(executed on September 15, 2006) (Incorporated by reference
to Exhibit 10.3 to the Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2006)
10
.19(a)
Industrial Real Estate Triple Net Sublease dated July 1,
2001 between Sorrento Montana, L.P. and Camino NeuroCare, Inc.
(Incorporated by reference to Exhibit 10.24(a) to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)
10
.19(b)
First Amendment to Sublease dated as of July 1, 2003 by and
between Sorrento Montana, L.P. and Camino NeuroCare, Inc.
(Incorporated by reference to Exhibit 10.24(b) to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)
10
.19(c)
Second Amendment to Sublease dated as of June 1, 2004 by
and between Sorrento Montana, L.P. and Camino NeuroCare, Inc.
(Incorporated by reference to Exhibit 10.24(c) to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)
Table of Contents
10
.19(d)
Third Amendment to Sublease dated as of June 15, 2004 by
and between Sorrento Montana, L.P. and Integra LifeSciences
Corporation (Incorporated by reference to Exhibit 10.24(d)
to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)
10
.19(e)
Fourth Amendment to Sublease, dated as of August 15, 2006,
by and between Sorrento Montana, L.P. and Integra LifeSciences
Corporation (Incorporated by reference to Exhibit 10.1 to
the Companys Current Report on
Form 8-K
filed on August 17, 2006)
10
.20
Restricted Units Agreement dated December 27, 1997 between
the Company and Stuart M. Essig (Incorporated by reference to
Exhibit 10.3 to the Companys Current Report on
Form 8-K
filed on February 3, 1998)*
10
.21
Stock Option Grant and Agreement dated December 22, 2000
between the Company and Stuart M. Essig (Incorporated by
reference to Exhibit 4.1 to the Companys Current
Report on
Form 8-K
filed on January 8, 2001)*
10
.22
Stock Option Grant and Agreement dated December 22, 2000
between the Company and Stuart M. Essig (Incorporated by
reference to Exhibit 4.2 to the Companys Current
Report on
Form 8-K
filed on January 8, 2001)*
10
.23(a)
Restricted Units Agreement dated December 22, 2000 Between
the Company and Stuart M. Essig (Incorporated by reference to
Exhibit 4.3 to the Companys Current Report on
Form 8-K
filed on January 8, 2001)*
10
.23(b)
Amendment
2006-1,
dated as of October 30, 2006, to the Stuart M. Essig
Restricted Units Agreement dated as of December 22, 2000
(Incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on November 3, 2006)*
10
.24
Stock Option Grant and Agreement dated July 27, 2004
between the Company and Stuart M. Essig (Incorporated by
reference to Exhibit 10.30 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2004)*
10
.25(a)
Contract Stock/Restricted Units Agreement dated July 27,
2004 between the Company and Stuart M. Essig (Incorporated by
reference to Exhibit 10.31 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2004)*
10
.25(b)
Amendment
2006-1,
dated as of October 30, 2006, to the Stuart M. Essig
Contract Stock/Restricted Units Agreement dated as of
July 27, 2004 (Incorporated by reference to
Exhibit 10.2 to the Companys Current Report on
Form 8-K
filed on November 3, 2006)*
10
.25(c)
Amendment
2008-1,
dated as of March 6, 2008, to the Stuart M. Essig Contract
Stock/Restricted Units Agreement dated as of July 27, 2004*
10
.26
Form of Stock Option Grant and Agreement between the Company and
Stuart M. Essig (Incorporated by reference to Exhibit 10.32
to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)*
10
.27
Form of Notice of Grant of Stock Option and Stock Option
Agreement (Incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on July 29, 2005)*
10
.28
Form of Non-Qualified Stock Option Agreement
(Non-Directors)
(Incorporated by reference to Exhibit 10.35 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)*
10
.29
Form of Incentive Stock Option Agreement (Incorporated by
reference to Exhibit 10.36 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2004)*
10
.30
Form of Non-Qualified Stock Option Agreement (Directors)
(Incorporated by reference to Exhibit 10.37 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)*
10
.31
Compensation of Directors of the Company (Incorporated by
reference to Exhibit 10.33 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2006)*
10
.32
Form of Restricted Stock Agreement for Non-Employee Directors
under the Integra LifeSciences Holdings Corporation 2003 Equity
Incentive Plan (Incorporated by reference to Exhibit 10.2
to the Companys Current Report on
Form 8-K
filed on May 17, 2005)*
10
.33
Form of Restricted Stock Agreement for Executive Officers
(Incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on January 9, 2006)*
Table of Contents
10
.34
Asset Purchase Agreement, dated as of September 7, 2005, by
and between Tyco Healthcare Group LP and Sherwood Services, AG
and Integra LifeSciences Corporation and Integra LifeSciences
(Ireland) Limited (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on September 13, 2005)
10
.35(a)
Performance Stock Agreement by and between John B.
Henneman, III and the Company dated January 3, 2006
(Incorporated by reference to Exhibit 10.42 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)*
10
.35(b)
Amendment
2008-1,
dated as of January 2, 2008, to the John B.
Henneman, III Performance Stock Agreement, dated as of
January 3, 2006*
10
.36(a)
Performance Stock Agreement by and between Gerard S. Carlozzi
and the Company dated January 3, 2006 (Incorporated by
reference to Exhibit 10.43 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2005)*
10
.36(b)
Amendment
2008-1,
dated as of January 2, 2008, to the Gerard S. Carlozzi
Performance Stock Agreement, dated as of January 3, 2006*
10
.37(a)
Form of Performance Stock Agreement for Gerard S. Carlozzi and
John B. Henneman, III (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on March 21, 2007)*
10
.37(b)
New Form of Performance Stock Agreement for Gerard S. Carlozzi
and John B. Henneman, III*
10
.38
Employment Agreement by and between Maureen B. Bellantoni and
the Company dated January 10, 2006 (Incorporated by
reference to Exhibit 10.44 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2005)*
10
.39
Performance Stock Agreement by and between Maureen B. Bellantoni
and the Company dated January 10, 2006 (Incorporated by
reference to Exhibit 10.45 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2005)*
10
.40
Separation Agreement between Maureen B. Bellantoni and Integra
LifeSciences Holdings Corporation dated as of September 6,
2007 (Incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on September 7, 2007)
10
.41
Stock Purchase Agreement, dated as of April 19, 2006, by
and between ASP/Miltex LLC and Integra LifeSciences Corporation
(Incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on April 25, 2006)
10
.42
Stock Agreement and Plan of Merger, dated as of June 30,
2006, by and between Integra LifeSciences Corporation, Integra
California, Inc., Kinetikos Medical, Inc., Telegraph Hill
Partners Management LLC, as Shareholders Representative, and the
Shareholders party thereto (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on July 7, 2006)
10
.43(a)
Integra LifeSciences Holdings Corporation Management Incentive
Compensation Plan (Incorporated by reference to
Exhibit 10.1 to the Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2006)*
10
.43(b)
First Amendment to Integra LifeSciences Holdings Corporation
Management Incentive Compensation Plan (Incorporated by
reference to Exhibit 10.5 to the Companys Quarterly
Report on
Form 10-Q
for the quarter ended March 31, 2007)*
10
.43(c)
Integra LifeSciences Holdings Corporation Management Incentive
Compensation Plan, as amended and restated as of January 1,
2008*
10
.44
Form of Restricted Stock Agreement for Gerard S. Carlozzi and
John B. Henneman, III (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on February 27, 2007)*
10
.45
Form of 2010 Convertible Bond Hedge Transaction Confirmation,
dated June 6, 2007, between Integra LifeSciences Holdings
Corporation and dealer (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
10
.46
Form of 2012 Convertible Bond Hedge Transaction Confirmation,
dated June 6, 2007, between Integra LifeSciences Holdings
Corporation and dealer (Incorporated by reference to
Exhibit 10.2 to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
10
.47
Form of 2010 Amended and Restated Issuer Warrant Transaction
Confirmation, dated June 6, 2007, between Integra
LifeSciences Holdings Corporation and dealer (Incorporated by
reference to Exhibit 10.3 to the Companys Current
Report on
Form 8-K
filed on June 12, 2007)
Table of Contents
10
.48
Form of 2012 Amended and Restated Issuer Warrant Transaction
Confirmation, dated June 6, 2007, between Integra
LifeSciences Holdings Corporation and dealer (Incorporated by
reference to Exhibit 10.4 to the Companys Current
Report on
Form 8-K
filed on June 12, 2007)
10
.49
Agreement and Plan of Merger among Integra LifeSciences Holdings
Corporation, ICE Mergercorp, Inc. and IsoTis, Inc., dated
as of August 6, 2007 (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on August 7, 2007)
21
Subsidiaries of the Company
31
.1
Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
31
.2
Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
32
.1
Certification of Principal Executive Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
32
.2
Certification of Principal Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
*
Indicates a management contract or compensatory plan or
arrangement.
Table of Contents
By:
President, Chief Executive Officer and Director (Principal
Executive Officer)
May 16, 2008
Executive Vice President, Finance and Administration and Chief
Financial Officer (Principal Financial Officer)
May 16, 2008
Vice President and Corporate Controller (Principal Accounting
Officer)
May 16, 2008
Chairman of the Board
May 16, 2008
Director
May 16, 2008
Director
May 16, 2008
Director
May 16, 2008
Director
May 16, 2008
Director
May 16, 2008
Director
May 16, 2008
94
Table of Contents
F-1
Table of Contents
F-2
Table of Contents
Year Ended December 31,
2007
2006
2005
In thousands, except per share amounts
$
550,459
$
419,297
$
277,935
214,674
168,314
107,052
30,658
25,732
11,960
225,187
157,706
98,273
12,652
8,801
4,545
483,171
360,553
221,830
67,288
58,744
56,105
3,552
2,194
3,900
(13,749
)
(10,620
)
(4,165
)
2,971
(2,010
)
(739
)
60,062
48,308
55,101
26,591
18,901
17,907
$
33,471
$
29,407
$
37,194
$
1.21
$
1.00
$
1.23
$
1.13
$
.97
$
1.15
27,712
29,300
30,195
29,578
32,747
34,565
F-3
Table of Contents
Year Ended
December 31,
2007
2006
In thousands
$
57,339
$
22,697
103,539
85,018
144,535
94,387
22,254
10,010
12,264
9,649
339,931
221,761
61,730
42,559
195,766
179,716
207,438
162,414
13,147
7,168
$
818,012
$
613,618
$
$
100,000
119,962
119,542
23,232
20,329
2,901
4,319
16,877
12,454
28,699
17,373
191,671
274,017
330,000
508
16,052
31,356
19,860
11,575
557,583
317,456
323
315
395,266
367,277
(252,380
)
(145,846
)
19,768
10,045
(723
)
(1,965
)
98,175
66,336
260,429
296,162
$
818,012
$
613,618
F-4
Table of Contents
Year Ended December 31,
2007
2006
2005
In thousands
$
33,471
$
29,407
$
37,194
25,627
19,018
11,313
4,600
5,875
500
(111
)
755
1,412
2,096
820
(1,224
)
(1,335
)
(12,720
)
3,235
9,895
364
1,908
15,394
14,115
146
791
336
(41
)
(2,841
)
(26,131
)
491
(18,591
)
3,461
(9,984
)
616
(2,465
)
30
364
(799
)
(66
)
118
14,011
(1,494
)
1,235
7,496
6,294
(3,071
)
2,409
(158
)
1,956
(146
)
47,026
71,702
56,848
109,872
93,315
411
689
(13,074
)
(65,499
)
(22,572
)
(11,520
)
(8,053
)
(100,810
)
(228,662
)
(50,602
)
(122,971
)
(142,695
)
(30,839
)
75,000
162,000
(175,045
)
(63,530
)
(245
)
330,000
21,662
(46,771
)
(9,832
)
(1,132
)
18,781
15,867
9,382
(106,534
)
(70,031
)
(56,341
)
1,224
1,335
108,485
45,641
(48,336
)
2,102
1,160
(639
)
34,642
(24,192
)
(22,966
)
22,697
46,889
69,855
$
57,339
$
22,697
$
46,889
$
10,870
$
8,060
$
3,275
38,664
16,395
7,721
$
1,478
$
$
1,123
294
765
199
F-5
Table of Contents
Accumulated
Other
Retained
Additional
Comprehensive
Earnings /
Preferred
Common
Treasury
Paid-In
Income
(Accumulated
Total
Stock
Stock
Stock
Capital
(Loss)
Deficit)
Equity
In thousands
$
$
292
$
(19,474
)
$
320,602
$
6,668
$
(265
)
$
307,823
37,194
37,194
18
18
(1
)
(1
)
(11,375
)
(11,375
)
(83
)
(83
)
$
25,753
6
9,170
9,176
146
146
3,261
3,261
(56,341
)
(56,341
)
$
$
298
$
(75,815
)
$
333,179
$
(4,773
)
$
36,929
$
289,818
29,407
29,407
254
254
547
547
12,345
12,345
(293
)
(293
)
$
42,260
17
15,888
15,905
3,237
3,237
14,973
14,973
(70,031
)
(70,031
)
$
$
315
$
(145,846
)
$
367,277
$
8,080
$
66,336
$
296,162
F-6
Table of Contents
Accumulated
Other
Retained
Additional
Comprehensive
Earnings /
Preferred
Common
Treasury
Paid-In
Income
(Accumulated
Total
Stock
Stock
Stock
Capital
(Loss)
Deficit)
Equity
In thousands
$
$
315
$
(145,846
)
$
367,277
$
8,080
$
66,336
$
296,162
33,471
33,471
9,723
9,723
1,242
1,242
$
44,436
8
18,528
18,536
17,542
17,542
3,087
3,087
15,478
15,478
(106,534
)
(106,534
)
(46,771
)
(46,771
)
21,662
21,662
(1,573
)
(1,573
)
(1,632
)
(1,632
)
36
36
$
$
323
$
(252,380
)
$
395,266
$
19,045
$
98,175
$
260,429
F-7
Table of Contents
1.
BUSINESS
2.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
F-8
Table of Contents
December 31,
2007
2006
(In thousands)
$
103,172
$
74,324
27,812
14,416
37,639
20,433
(24,088
)
(14,786
)
$
144,535
$
94,387
F-9
Table of Contents
December 31
2007
2006
Lives
(In thousands)
$
1,861
$
1,405
6,187
3,762
30-40 years
24,035
18,364
2-22 years
31,950
26,108
2-15 years
33,671
25,279
3-10 years
11,061
5,818
108,765
80,736
(47,035
)
(38,177
)
$
61,730
$
42,559
F-10
Table of Contents
2007
2006
(In thousands)
$
162,414
$
68,364
207
8,667
1,218
27,547
4,468
1,028
682
(2,132
)
21,054
694
43,018
23,089
3,339
6,195
$
207,438
$
162,414
Weighted
December 31, 2007
December 31, 2006
Average
Accumulated
Accumulated
Life
Cost
Amortization
Net
Cost
Amortization
Net
13 years
$
51,673
$
(11,663
)
$
40,010
$
35,632
$
(8,573
)
$
27,059
12 years
75,719
(17,548
)
58,171
67,872
(10,671
)
57,201
34 years
40,769
(5,202
)
35,567
35,350
(4,029
)
31,321
Indefinite
31,600
31,600
31,600
31,600
5 years
6,504
(4,486
)
2,018
7,151
(4,079
)
3,072
30 years
29,300
(1,595
)
27,705
29,300
(620
)
28,680
15 years
1,531
(836
)
695
1,620
(837
)
783
$
237,096
$
(41,330
)
$
195,766
$
208,525
$
(28,809
)
$
179,716
F-11
Table of Contents
F-12
Table of Contents
F-13
Table of Contents
December 31,
2007
2006
(In thousands)
$
1,325
$
696
21
358
(323
)
300
(253
)
(29
)
$
770
$
1,325
F-14
Table of Contents
Year Ended
Year Ended
December 31, 2007
December 31, 2006
$
732
$
639
14,341
13,161
321
315
15,394
14,115
5,376
4,550
$
10,018
$
9,565
F-15
Table of Contents
Fiscal Year Ended
December 31, 2005
(In thousands, except
per share amounts)
$
37,194
103
(7,264
)
$
30,033
$
1.23
$
0.99
$
1.15
$
0.94
F-16
Table of Contents
2007
2006
2005
0
%
0
%
0
%
32
%
39
%(1)
43
%
3.19 to 5.20
%
4.3 to 5.1
%
3.8
%
6.6 years
6.1 years
5.4 years
(1)
A volatility rate of 39% in 2006 that decreases 1% in each
subsequent year for the length of the term was used.
(2)
Risk free interest rates ranged based on the duration of the
grant.
F-17
Table of Contents
F-18
Table of Contents
3.
ACQUISITIONS
F-19
Table of Contents
$
25
3,243
820
65
603
10
Wtd. Avg. Life
421
15 years
2,971
15 years
100
5 years
285
20 years
4,468
13,011
594
1,625
2,219
$
10,792
F-20
Table of Contents
$
10,666
17,796
10,502
3,841
Wtd. Avg. Life
3,400
10 years
11,000
15 years
4,600
Expensed
immediately
27,547
500
89,852
16,209
5,256
21,465
$
68,387
F-21
Table of Contents
$
1,063
926
81
Wtd. Avg. Life
1,191
10 years
100
5 years
57
<1 year
1,218
4,636
538
538
$
4,098
Luxtec
The market-leading manufacturer of
fiber optic headlight systems for the medical industry through
its
Luxtec
®
brand. The Luxtec products are manufactured in a
31,000 square foot leased facility located in West Boylston.
LXU Medical
A leading specialty surgical
products distributor with a sales force calling on surgeons and
key clinical decision makers, covering 18,000 operating rooms in
the southeastern, midwestern and mid-Atlantic United States. LXU
Medical is the exclusive distributor of the Luxtec fiber optic
headlight systems in these territories.
Bimeco
A critical care products distributor
with direct sales coverage in the southeastern United States.
F-22
Table of Contents
$
7,700
4,932
1,059
322
1,600
Wtd. Avg. Life
3,100
15 years
4,700
Indefinite
1,700
5 years
8,666
1,448
35,227
4,938
224
5,162
$
30,065
$
454
339
Wtd. Avg. Life
642
20 years
450
10 years
143
5 years
207
$
2,235
F-23
Table of Contents
F-24
Table of Contents
F-25
Table of Contents
Canada
Kinetikos
Radionics
Miltex
Microsurgical Ltd
Medical Inc
(All amounts in thousands)
$
8,201
$
24,824
$
2,697
$
5,009
1,365
7,699
1,646
49,000
57,900
7,568
16,625
18,961
44,046
632
23,089
72
219
21
1,260
77,599
134,688
10,918
47,629
425
3,988
730
1,933
21,049
2,737
3,953
1,605
5,667
671
2,030
30,704
4,138
5,886
$
75,569
$
103,984
$
6,780
$
41,743
F-26
Table of Contents
2007
2006
(In thousands, except per share amounts)
$
607,337
$
571,437
18,914
16,809
$
0.68
$
0.57
$
0.64
$
0.51
4.
RESTRUCTURING
ACTIVITIES
F-27
Table of Contents
Research
Selling, General
Cost of
and
and
Sales
Development
Administrative
Total
(In thousands)
$
(24
)
$
$
(364
)
$
(388
)
$
290
$
$
745
$
1,035
$
2,596
$
183
$
1,082
$
3,861
155
155
Employee
Termination
Facility Exit
Costs
Costs
Total
(In thousands)
$
2,420
$
124
$
2,544
1,035
1,035
220
155
375
(116
)
(116
)
(2,107
)
(118
)
(2,225
)
104
9
113
$
1,556
$
170
$
1,726
103
103
578
616
1,194
(491
)
(491
)
(1,231
)
(170
)
(1,401
)
100
9
109
$
615
$
625
$
1,240
F-28
Table of Contents
5.
DEBT
F-29
Table of Contents
F-30
Table of Contents
F-31
Table of Contents
6.
DERIVATIVE
INSTRUMENTS
2007
2006
2005
(In thousands)
$
$
(690
)
$
690
373
343
(821
)
$
373
$
(347
)
$
(131
)
F-32
Table of Contents
7.
TREASURY
STOCK
8.
STOCK
PURCHASE AND AWARD PLANS
F-33
Table of Contents
Weighted Average
Shares
Exercise Price
(In thousands)
3,683
$
23.42
1,089
34.53
(576
)
13.83
(195
)
30.28
4,001
27.50
273
40.75
(705
)
22.20
(131
)
33.27
3,438
29.41
231
41.56
(682
)
27.08
(63
)
34.97
2,924
$
30.82
F-34
Table of Contents
Options Exercisable
Weighted
Avg.
Exercise
Shares
Price
(In thousands)
298
$
11.20
317
19.93
339
29.28
288
31.57
274
33.96
243
35.48
202
36.61
50
42.53
31
49.33
2,044
$
28.24
F-35
Table of Contents
Performance Stock and Contract
Restricted Stock Awards
Stock Awards
Wtd. Avg. Fair
Wtd. Avg. Fair
Value per
Value per
Shares
Share
Shares
Share
19
$
35.08
$
194
38.38
218
35.41
(11
)
38.18
(17
)
41.46
185
38.08
218
35.41
153
46.42
15
45.81
(40
)
41.19
(10
)
35.82
(14
)
40.65
284
$
42.29
223
$
36.10
F-36
Table of Contents
9.
RETIREMENT
BENEFIT PLANS
2007
2006
2005
Non U.S.
Non U.S.
Non U.S
U.S. Plan
Plans
U.S. Plan
Plans
Plans
(In thousands)
$
$
160
$
$
182
$
178
24
715
25
585
567
(30
)
(600
)
(24
)
(483
)
(464
)
23
382
28
337
215
17
657
29
621
496
53
$
17
$
657
$
82
$
621
$
496
2007
2006
2005
Non-U.S.
Non-U.S.
Non-U.S.
U.S. Plan
Plans
U.S. Plan
Plans
Plans
5.5
%
5.5
%
5.5
%
5.2
%
4.7
%
7.0
%
5.7
%
7.0
%
5.7
%
4.9
%
3.0
%
3.5
%
N/A
3.1
%
3.5
%
F-37
Table of Contents
December 31,
2007
2006
U.S. Plan
Non-U.S. Plans
U.S. Plan
Non-U.S. Plans
(In thousands)
$
437
$
13,870
$
$
11,647
160
182
24
715
25
585
28
33
(384
)
(425
)
(1,172
)
13
211
(104
)
503
48
1,637
$
461
$
13,265
$
437
$
13,870
December 31,
2007
2006
U.S. Plan
Non-U.S. Plans
U.S. Plan
Non-U.S. Plans
(In thousands)
$
340
$
10,315
$
$
8,673
33
835
24
440
150
443
57
278
28
33
(336
)
(104
)
(333
)
363
(60
)
1,224
$
523
$
11,225
$
340
$
10,315
$
62
$
(2,040
)
$
(97
)
$
(3,555
)
198
1,384
223
2,584
(198
)
(1,384
)
(223
)
(2,584
)
$
62
$
(2,040
)
$
(97
)
$
(3,555
)
F-38
Table of Contents
December 31,
2007
2006
U.S. Plan
Non-U.S. Plans
U.S. Plan
Non-U.S. Plans
60
%
21
%
61
%
46
%
33
%
32
%
37
%
43
%
36
%
18
%
3
%
3
%
3
%
3
%
1
%
100
%
100
%
100
%
100
%
$
427,000
447,000
481,000
521,000
593,000
3,557,000
10.
LEASES
F-39
Table of Contents
Related
Parties
Third Parties
Total
(In thousands)
$
341
$
4,632
$
4,973
341
3,940
4,281
326
1,646
1,972
281
938
1,219
254
417
671
1,316
2,700
4,016
$
2,859
$
14,273
$
17,132
11.
INCOME
TAXES
2007
2006
2005
(In thousands)
$
36,598
$
20,000
$
46,111
23,464
28,308
8,990
$
60,062
$
48,308
$
55,101
F-40
Table of Contents
2007
2006
2005
35.0
%
35.0
%
35.0
%
1.1
%
1.9
%
2.0
%
(4.2
)%
(1.6
)%
(4.6
)%
2.7
%
4.3
%
0.9
%
1.4
%
2.5
%
3.8
%
(2.5
)%
5.0
%
(1.9
)%
0.1
%
44.3
%
39.1
%
32.5
%
F-41
Table of Contents
2007
2006
2005
(In thousands)
$
24,635
$
7,454
$
2,547
5,138
1,332
2,038
9,538
6,880
3,427
39,311
15,666
8,012
$
(5,369
)
$
2,049
$
13,706
(2,113
)
(256
)
(409
)
(5,238
)
1,442
(3,402
)
(12,720
)
3,235
9,895
$
26,591
$
18,901
$
17,907
F-42
Table of Contents
December 31,
2007
2006
(In thousands)
$
2,317
$
1,103
15,485
7,242
3,129
256
6,200
1,454
27,131
10,055
(593
)
(45
)
(1,531
)
(2,124
)
(45
)
(2,753
)
22,254
10,010
11,023
6,108
8,848
4,032
2,167
961
45,148
4,713
17,897
10
731
4,142
1,714
89,235
18,259
(44,224
)
(35,506
)
(19,632
)
(11,977
)
(548
)
(500
)
(64,404
)
(47,983
)
(40,883
)
(1,632
)
(16,052
)
(31,356
)
$
6,202
$
(21,346
)
F-43
Table of Contents
$
6,792
1,826
714
(165
)
(9
)
(325
)
$
8,833
F-44
Table of Contents
12.
NET
INCOME PER SHARE
2007
2006
2005
(In thousands, except per share amounts)
$
33,471
$
29,407
$
37,194
$
1.21
$
1.00
$
1.23
27,712
29,300
30,195
$
33,471
$
29,407
$
37,194
9
2,254
2,440
$
33,480
$
31,661
$
39,634
$
1.13
$
0.97
$
1.15
27,712
29,300
30,195
938
710
856
928
2,737
3,514
29,578
32,747
34,565
2007
2006
2005
(In thousands)
267
1,551
570
13.
DEVELOPMENT,
DISTRIBUTION, AND LICENSE AGREEMENTS
F-45
Table of Contents
14.
COMMITMENTS
AND CONTINGENCIES
F-46
Table of Contents
15.
SEGMENT
AND GEOGRAPHIC INFORMATION
2007
2006
2005
(In thousands)
$
207,536
$
166,432
$
134,598
342,923
252,865
143,337
$
550,459
$
419,297
$
277,935
United States
Europe
Asia Pacific
Other Foreign
Consolidated
(In thousands)
$
417,035
$
85,764
$
21,399
$
26,261
$
550,459
317,503
77,100
12,315
12,379
419,297
207,409
48,645
11,403
10,478
277,935
$
50,953
$
23,923
$
$
$
74,876
33,646
16,081
$
49,727
F-47
Table of Contents
16.
SELECTED
QUARTERLY INFORMATION UNAUDITED
Fourth
Third
Second
First
Quarter
Quarter
Quarter
Quarter
(In thousands, except per share data)
$
157,645
$
135,015
$
134,767
$
123,032
$
125,394
$
116,647
$
100,121
$
77,135
95,219
84,152
81,959
74,455
73,949
69,088
58,748
49,198
5,383
9,673
9,341
9,074
10,131
2,594
7,977
8,705
$
0.20
$
0.36
$
0.33
$
0.32
$
0.35
$
0.09
$
0.27
$
0.29
$
0.19
$
0.33
$
0.31
$
0.30
$
0.34
$
0.09
$
0.26
$
0.28
Fourth
Third
Second
First
Quarter
Quarter
Quarter
Quarter
(In thousands)
$
(127
)
$
$
(331
)
$
70
693
63
199
80
1,120
667
2,074
155
17.
SUBSEQUENT
EVENT
F-48
Table of Contents
SCHEDULE II
Balance at
Charged to
Charged to
Balance at
Beginning of
Costs and
Other
End of
Period
Expenses
Accounts(1)
Deductions
Period
(In thousands)
$
4,114
$
4,858
$
$
(1,156
)
$
7,816
14,786
10,627
4,455
(5,780
)
24,088
1,632
2,302
39,702
43,636
$
3,508
$
650
$
350
$
(394
)
$
4,114
9,768
4,706
2,862
(2,550
)
14,786
5,126
(3,494
)
1,632
$
2,749
$
1,279
$
34
$
(554
)
$
3,508
7,600
2,191
247
(270
)
9,768
5,360
(234
)
5,126
(1)
All amounts shown were recorded to goodwill in connection with
acquisitions except for the $3.5 million reduction in the
deferred tax asset valuation allowance in 2006, which was
written off against the gross deferred tax asset and the 2007
amount charged to APIC for $2.7 million.
F-49
Table of Contents
3
.1(a)
Amended and Restated Certificate of Incorporation of the Company
(Incorporated by reference to Exhibit 3.1(a) to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)
3
.1(b)
Certificate of Amendment to Amended and Restated Certificate of
Incorporation dated May 22, 1998 (Incorporated by reference
to Exhibit 3.1(b) to the Companys Annual Report on
Form 10-K
for the year ended December 31, 1998)
3
.1(c)
Certificate of Amendment to Amended and Restated Certificate of
Incorporation dated May 17, 1999 (Incorporated by reference
to Exhibit 3.1(c) to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)
3
.2
Amended and Restated By-laws of the Company (Incorporated by
reference to Exhibit 3.1 to the Companys Current
Report on
Form 8-K
filed on November 3, 2006)
4
.1
Indenture, dated as of March 31, 2003, between the Company
and Wells Fargo Bank Minnesota, National Association
(Incorporated by reference to Exhibit 4.1 to the
Companys Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2003)
4
.2
Registration Rights Agreement, dated as of March 31, 2003,
between the Company and Credit Suisse First Boston, LLC, Banc of
America Securities LLC and U.S. Bancorp Piper Jaffray Inc.
(Incorporated by reference to Exhibit 4.3 to the
Companys Registration Statement on
Form S-3
filed on June 30, 2003 (File
No. 333-106625))
4
.3(a)
Credit Agreement, dated as of December 22, 2005, among
Integra LifeSciences Holdings Corporation, the lenders party
thereto, Bank of America, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer, Citibank FSB and SunTrust Bank, as
Co-Syndication Agents, and Royal Bank of Canada and Wachovia
Bank, National Association, as Co-Documentation Agents
(Incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on December 29, 2005)
4
.3(b)
First Amendment, dated as of February 15, 2006, among
Integra LifeSciences Holdings Corporation, the lenders party
thereto, Bank of America, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer, Citibank FSB and SunTrust Bank, as
Co-Syndication Agents, and Royal Bank of Canada and Wachovia
Bank, National Association, as Co-Documentation Agents
(Incorporated by reference to Exhibit 4.3(b) to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)
4
.3(c)
Second Amendment, dated as of February 23, 2007, among
Integra LifeSciences Holdings Corporation, the lenders party
thereto, Bank of America, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer, Citibank FSB and SunTrust Bank, as
Co-Syndication Agents, and Royal Bank of Canada and Wachovia
Bank, National Association, as Co-Documentation Agents
(Incorporated by reference to Exhibit 4.1 to the
Companys Current Report on
Form 8-K
filed on February 27, 2007)
4
.3(d)
Third Amendment, dated as of June 4, 2007, among Integra
LifeSciences Holdings Corporation, the lenders party thereto,
Bank of America, N.A., as Administrative Agent, Swing Line
Lender and L/C Issuer, Citibank, N.A., successor by merger to
Citibank, FSB, as Syndication Agent and JPMorgan Chase Bank,
N.A., Deutsche Bank Trust Company Americas and Royal Bank
of Canada, as Co-Documentation Agents (Incorporated by reference
to Exhibit 4.1 to the Companys Current Report on
Form 8-K
filed on June 6, 2007)
4
.3(e)
Fourth Amendment, dated as of September 5, 2007, among
Integra LifeSciences Holdings Corporation, the lenders party
thereto, Bank of America, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer, Citibank, N.A., successor by merger
to Citibank FSB, as Syndication Agent and JPMorgan Chase Bank,
N.A., Deutsche Bank Trust Company Americas and Royal Bank
of Canada, as Co-Documentation Agents (Incorporated by reference
to Exhibit 4.1 to the Companys Current Report on
Form 8-K
filed on September 6, 2007)
4
.4
Security Agreement, dated as of December 22, 2005, among
Integra LifeSciences Holdings Corporation and the additional
grantors party thereto in favor of Bank of America, N.A., as
administrative and collateral agent (Incorporated by reference
to Exhibit 4.4 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)
4
.5
Pledge Agreement, dated as of December 22, 2005, among
Integra LifeSciences Holdings Corporation and the additional
grantors party thereto in favor of Bank of America, N.A., as
administrative and collateral agent (Incorporated by reference
to Exhibit 4.5 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)
Table of Contents
4
.6
Subsidiary Guaranty Agreement, dated as of December 22,
2005, among the guarantors party thereto and individually as a
Guarantor), in favor of Bank of America, N.A., as
administrative and collateral agent (Incorporated by reference
to Exhibit 4.6 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)
4
.7
Indenture, dated as of September 29, 2006, between the
Company and Wells Fargo Bank, N.A. (Incorporated by reference to
Exhibit 4.1 to the Companys Current Report on
Form 8-K
filed on October 5, 2006)
4
.8
Indenture, dated June 11, 2007, among Integra LifeSciences
Holdings Corporation, Integra LifeSciences Corporation and Wells
Fargo Bank, N.A., as trustee (Incorporated by reference to
Exhibit 4.1 to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
4
.9
Form of 2.75% Senior Convertible Note due 2010 (included in
Exhibit 4.8) (Incorporated by reference to Exhibit 4.2
to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
4
.10
Indenture, dated June 11, 2007, among Integra LifeSciences
Holdings Corporation, Integra LifeSciences Corporation and Wells
Fargo Bank, N.A., as trustee (Incorporated by reference to
Exhibit 4.3 to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
4
.11
Form of 2.375% Senior Convertible Note due 2012 (included
in Exhibit 4.10) (Incorporated by reference to
Exhibit 4.4 to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
4
.12
Registration Rights Agreement, dated June 11, 2007, among
Integra LifeSciences Holdings Corporation, Banc of America
Securities LLC, J.P. Morgan Securities Inc. and Morgan
Stanley & Co., Incorporated, as representatives of the
several initial purchasers (Incorporated by reference to
Exhibit 4.5 to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
4
.13
Registration Rights Agreement, dated June 11, 2007, among
Integra LifeSciences Holdings Corporation, Banc of America
Securities LLC, J.P. Morgan Securities Inc. and Morgan
Stanley & Co., Incorporated, as representatives of the
several initial purchasers (Incorporated by reference to
Exhibit 4.6 to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
10
.1(a)
Lease between Plainsboro Associates and American Biomaterials
Corporation dated as of April 16, 1985, as assigned to
Colla-Tec, Inc. on October 24, 1989 and as amended through
November 1, 1992 (Incorporated by reference to
Exhibit 10.30 to the Companys Registration Statement
on Form 10/A (File
No. 0-26224)
which became effective on August 8, 1995)
10
.1(b)
Lease Modification #2 entered into as of the 28th day of
October, 2005, by and between Plainsboro Associates and Integra
LifeSciences Corporation (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on November 2, 2005)
10
.2
Equipment Lease Agreement between Medicus Corporation and the
Company, dated as of June 1, 2000 (Incorporated by
reference to Exhibit 10.1 to the Companys Quarterly
Report on
Form 10-Q
for the quarter ended June 30, 2000)
10
.3
Form of Indemnification Agreement between the Company and [ ]
dated August 16, 1995, including a schedule identifying the
individuals that are a party to such Indemnification Agreements
(Incorporated by reference to Exhibit 10.37 to the
Companys Registration Statement on
Form S-1
(File
No. 33-98698)
which became effective on January 24, 1996)*
10
.4
1993 Incentive Stock Option and Non-Qualified Stock Option Plan
(Incorporated by reference to Exhibit 10.32 to the
Companys Registration Statement on Form 10/A (File
No. 0-26224)
which became effective on August 8, 1995)*
10
.5
1996 Incentive Stock Option and Non-Qualified Stock Option Plan
(as amended through December 27, 1997) (Incorporated by
reference to Exhibit 10.4 to the Companys Current
Report on
Form 8-K
filed on February 3, 1998)*
10
.6
1998 Stock Option Plan (amended and restated as of July 26,
2005) (Incorporated by reference to Exhibit 10.3 to the
Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2005)*
10
.7
1999 Stock Option Plan (amended and restated as of July 26,
2005) (Incorporated by reference to Exhibit 10.4 to the
Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2005)*
10
.8(a)
Employee Stock Purchase Plan (as amended on May 17, 2004)
(Incorporated by reference to Exhibit 4.1 to the
Companys Registration Statement on
Form S-8
(Registration
No. 333-127488)
filed on August 12, 2005)*
Table of Contents
10
.8(b)
First Amendment to the Companys Employee Stock Purchase
Plan, dated October 26, 2005 (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on November 1, 2005)*
10
.9
2000 Equity Incentive Plan (amended and restated as of
July 26, 2005) (Incorporated by reference to
Exhibit 10.5 to the Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2005)*
10
.10
2001 Equity Incentive Plan (amended and restated as of
July 26, 2005) (Incorporated by reference to
Exhibit 10.6 to the Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2005)*
10
.11
2003 Equity Incentive Plan (amended and restated as of
July 26, 2005) (Incorporated by reference to
Exhibit 10.7 to the Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2005)*
10
.12(a)
Second Amended and Restated Employment Agreement dated
July 27, 2004 between the Company and Stuart M. Essig
(Incorporated by reference to Exhibit 10.1 to the
Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2004)*
10
.12(b)
Amendment
2006-1,
dated as of December 19, 2006, to the Second Amended and
Restated Employment Agreement, between the Company and Stuart M.
Essig (Incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on December 22, 2006)*
10
.12(c)
Amendment
2008-1,
dated as of March 6, 2008, to the Second Amended and
Restated Employment Agreement, between the Company and Stuart M.
Essig*
10
.13
Indemnity letter agreement dated December 27, 1997 from the
Company to Stuart M. Essig (Incorporated by reference to
Exhibit 10.5 to the Companys Current Report on
Form 8-K
filed on February 3, 1998)*
10
.14(a)
Registration Rights Provisions for Stuart M. Essig (Incorporated
by reference to Exhibit B of Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on February 3, 1998)*
10
.14(b)
Registration Rights Provisions for Stuart M. Essig (Incorporated
by reference to Exhibit 10.2 to the Companys Current
Report on
Form 8-K
filed on January 8, 2001)*
10
.14(c)
Registration Rights Provisions for Stuart M. Essig (Incorporated
by reference to Exhibit B of Exhibit 10.1 to the
Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2004)*
10
.15(a)
Amended and Restated 2005 Employment Agreement between John B.
Henneman, III and the Company dated December 19, 2005
(Incorporated by reference to Exhibit 10.16 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)*
10
.15(b)
Amendment
2008-1,
dated as of January 2, 2008, to the Amended and Restated
2005 Employment Agreement between John B. Henneman, III and
the Company*
10
.16(a)
Amended and Restated 2005 Employment Agreement between Gerard S.
Carlozzi and the Company dated December 19, 2005
(Incorporated by reference to Exhibit 10.17 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)*
10
.16(b)
Amendment
2008-1,
dated as of January 2, 2008, to the Amended and Restated
2005 Employment Agreement between Gerard S. Carlozzi and the
Company*
10
.17(a)
Severance Agreement between Judith OGrady and the Company
dated January 1, 2007 (Incorporated by reference to
Exhibit 10.17 to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2006)*
10
.17(b)
Severance Agreement between Judith OGrady and the Company
dated as of January 1, 2008*
10
.18
Lease Contract, dated April 1, 2005, between the Puerto
Rico Industrial Development Company and Integra CI, Inc.
(executed on September 15, 2006) (Incorporated by reference
to Exhibit 10.3 to the Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2006)
10
.19(a)
Industrial Real Estate Triple Net Sublease dated July 1,
2001 between Sorrento Montana, L.P. and Camino NeuroCare, Inc.
(Incorporated by reference to Exhibit 10.24(a) to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)
10
.19(b)
First Amendment to Sublease dated as of July 1, 2003 by and
between Sorrento Montana, L.P. and Camino NeuroCare, Inc.
(Incorporated by reference to Exhibit 10.24(b) to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)
Table of Contents
10
.19(c)
Second Amendment to Sublease dated as of June 1, 2004 by
and between Sorrento Montana, L.P. and Camino NeuroCare, Inc.
(Incorporated by reference to Exhibit 10.24(c) to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)
10
.19(d)
Third Amendment to Sublease dated as of June 15, 2004 by
and between Sorrento Montana, L.P. and Integra LifeSciences
Corporation (Incorporated by reference to Exhibit 10.24(d)
to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)
10
.19(e)
Fourth Amendment to Sublease, dated as of August 15, 2006,
by and between Sorrento Montana, L.P. and Integra LifeSciences
Corporation (Incorporated by reference to Exhibit 10.1 to
the Companys Current Report on
Form 8-K
filed on August 17, 2006)
10
.20
Restricted Units Agreement dated December 27, 1997 between
the Company and Stuart M. Essig (Incorporated by reference to
Exhibit 10.3 to the Companys Current Report on
Form 8-K
filed on February 3, 1998)*
10
.21
Stock Option Grant and Agreement dated December 22, 2000
between the Company and Stuart M. Essig (Incorporated by
reference to Exhibit 4.1 to the Companys Current
Report on
Form 8-K
filed on January 8, 2001)*
10
.22
Stock Option Grant and Agreement dated December 22, 2000
between the Company and Stuart M. Essig (Incorporated by
reference to Exhibit 4.2 to the Companys Current
Report on
Form 8-K
filed on January 8, 2001)*
10
.23(a)
Restricted Units Agreement dated December 22, 2000 Between
the Company and Stuart M. Essig (Incorporated by reference to
Exhibit 4.3 to the Companys Current Report on
Form 8-K
filed on January 8, 2001)*
10
.23(b)
Amendment
2006-1,
dated as of October 30, 2006, to the Stuart M. Essig
Restricted Units Agreement dated as of December 22, 2000
(Incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on November 3, 2006)*
10
.24
Stock Option Grant and Agreement dated July 27, 2004
between the Company and Stuart M. Essig (Incorporated by
reference to Exhibit 10.30 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2004)*
10
.25(a)
Contract Stock/Restricted Units Agreement dated July 27,
2004 between the Company and Stuart M. Essig
(Incorporated by reference to Exhibit 10.31 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)*
10
.25(b)
Amendment
2006-1,
dated as of October 30, 2006, to the Stuart M. Essig
Contract Stock/Restricted Units Agreement dated as of
July 27, 2004 (Incorporated by reference to
Exhibit 10.2 to the Companys Current Report on
Form 8-K
filed on November 3, 2006)*
10
.25(c)
Amendment
2008-1,
dated as of March 6, 2008, to the Stuart M. Essig Contract
Stock/Restricted Units Agreement dated as of July 27, 2004*
10
.26
Form of Stock Option Grant and Agreement between the Company and
Stuart M. Essig (Incorporated by reference to Exhibit 10.32
to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)*
10
.27
Form of Notice of Grant of Stock Option and Stock Option
Agreement (Incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on July 29, 2005)*
10
.28
Form of Non-Qualified Stock Option Agreement
(Non-Directors)
(Incorporated by reference to Exhibit 10.35 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)*
10
.29
Form of Incentive Stock Option Agreement (Incorporated by
reference to Exhibit 10.36 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2004)*
10
.30
Form of Non-Qualified Stock Option Agreement (Directors)
(Incorporated by reference to Exhibit 10.37 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2004)*
10
.31
Compensation of Directors of the Company (Incorporated by
reference to Exhibit 10.33 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2006)*
10
.32
Form of Restricted Stock Agreement for Non-Employee Directors
under the Integra LifeSciences Holdings Corporation 2003 Equity
Incentive Plan (Incorporated by reference to Exhibit 10.2
to the Companys Current Report on
Form 8-K
filed on May 17, 2005)*
10
.33
Form of Restricted Stock Agreement for Executive Officers
(Incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on January 9, 2006)*
Table of Contents
10
.34
Asset Purchase Agreement, dated as of September 7, 2005, by
and between Tyco Healthcare Group LP and Sherwood Services, AG
and Integra LifeSciences Corporation and Integra LifeSciences
(Ireland) Limited (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on September 13, 2005)
10
.35(a)
Performance Stock Agreement by and between John B.
Henneman, III and the Company dated January 3, 2006
(Incorporated by reference to Exhibit 10.42 to the
Companys Annual Report on
Form 10-K
for the year ended December 31, 2005)*
10
.35(b)
Amendment
2008-1,
dated as of January 2, 2008, to the John B.
Henneman, III Performance Stock Agreement, dated as of
January 3, 2006*
10
.36(a)
Performance Stock Agreement by and between Gerard S. Carlozzi
and the Company dated January 3, 2006 (Incorporated by
reference to Exhibit 10.43 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2005)*
10
.36(b)
Amendment
2008-1,
dated as of January 2, 2008, to the Gerard S. Carlozzi
Performance Stock Agreement, dated as of January 3, 2006*
10
.37(a)
Form of Performance Stock Agreement for Gerard S. Carlozzi and
John B. Henneman, III (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on March 21, 2007)*
10
.37(b)
New Form of Performance Stock Agreement for Gerard S. Carlozzi
and John B. Henneman, III*
10
.38
Employment Agreement by and between Maureen B. Bellantoni and
the Company dated January 10, 2006 (Incorporated by
reference to Exhibit 10.44 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2005)*
10
.39
Performance Stock Agreement by and between Maureen B. Bellantoni
and the Company dated January 10, 2006 (Incorporated by
reference to Exhibit 10.45 to the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2005)*
10
.40
Separation Agreement between Maureen B. Bellantoni and Integra
LifeSciences Holdings Corporation dated as of September 6,
2007 (Incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on September 7, 2007)
10
.41
Stock Purchase Agreement, dated as of April 19, 2006, by
and between ASP/Miltex LLC and Integra LifeSciences Corporation
(Incorporated by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on April 25, 2006)
10
.42
Stock Agreement and Plan of Merger, dated as of June 30,
2006, by and between Integra LifeSciences Corporation, Integra
California, Inc., Kinetikos Medical, Inc., Telegraph Hill
Partners Management LLC, as Shareholders Representative, and the
Shareholders party thereto (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on July 7, 2006)
10
.43(a)
Integra LifeSciences Holdings Corporation Management Incentive
Compensation Plan (Incorporated by reference to
Exhibit 10.1 to the Companys Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2006)*
10
.43(b)
First Amendment to Integra LifeSciences Holdings Corporation
Management Incentive Compensation Plan (Incorporated by
reference to Exhibit 10.5 to the Companys Quarterly
Report on
Form 10-Q
for the quarter ended March 31, 2007)*
10
.43(c)
Integra LifeSciences Holdings Corporation Management Incentive
Compensation Plan, as amended and restated as of January 1,
2008*
10
.44
Form of Restricted Stock Agreement for Gerard S. Carlozzi and
John B. Henneman, III (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on February 27, 2007)*
10
.45
Form of 2010 Convertible Bond Hedge Transaction Confirmation,
dated June 6, 2007, between Integra LifeSciences Holdings
Corporation and dealer (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
10
.46
Form of 2012 Convertible Bond Hedge Transaction Confirmation,
dated June 6, 2007, between Integra LifeSciences Holdings
Corporation and dealer (Incorporated by reference to
Exhibit 10.2 to the Companys Current Report on
Form 8-K
filed on June 12, 2007)
10
.47
Form of 2010 Amended and Restated Issuer Warrant Transaction
Confirmation, dated June 6, 2007, between Integra
LifeSciences Holdings Corporation and dealer (Incorporated by
reference to Exhibit 10.3 to the Companys Current
Report on
Form 8-K
filed on June 12, 2007)
Table of Contents
10
.48
Form of 2012 Amended and Restated Issuer Warrant Transaction
Confirmation, dated June 6, 2007, between Integra
LifeSciences Holdings Corporation and dealer (Incorporated by
reference to Exhibit 10.4 to the Companys Current
Report on
Form 8-K
filed on June 12, 2007)
10
.49
Agreement and Plan of Merger among Integra LifeSciences Holdings
Corporation, ICE Mergercorp, Inc. and IsoTis, Inc., dated as of
August 6, 2007 (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on
Form 8-K
filed on August 7, 2007)
21
Subsidiaries of the Company
31
.1
Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
31
.2
Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
32
.1
Certification of Principal Executive Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
32
.2
Certification of Principal Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
*
Indicates a management contract or compensatory plan or
arrangement.
2
3
4
5
6
7
8
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
|
||||
By: | /s/ Richard Caruso | |||
Name: | Richard Caruso | |||
Title: | Chairman | |||
EXECUTIVE
|
||||
/s/ Stuart M. Essig | ||||
Stuart M. Essig | ||||
9
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INTEGRA LIFESCIENCES HOLDINGS CORPORATION
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By: | /s/ Stuart M. Essig | |||
Name: | Stuart M. Essig | |||
Title: | President and Chief Executive Officer | |||
EXECUTIVE
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/s/ John B. Henneman, III | ||||
John B. Henneman, III | ||||
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INTEGRA LIFESCIENCES HOLDINGS CORPORATION
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By: | /s/ Stuart M. Essig | |||
Name: | Stuart M. Essig | |||
Title: | President and Chief Executive Officer | |||
EXECUTIVE
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/s/ Gerard S. Carlozzi | ||||
Gerard S. Carlozzi | ||||
(a) | Base Salary shall mean a minimum base salary of $235,000.00 per year (Base Salary), payable in periodic installments in accordance with Companys regular payroll practices in effect from time to time. Executives Base Salary shall be subject to annual reviews, and may increase pursuant to such reviews, in which case the increased Base Salary shall become the Base Salary. | ||
(b) | Board shall mean the Board of Directors of Company, or any successor thereto. | ||
(c) | Cause , as determined by the Board in good faith, shall mean Executive has |
(1) | failed to perform his stated duties in all material respects, which failure continues for 15 days after his receipt of written notice of the failure; | ||
(2) | intentionally and materially breached any provision of this Agreement and not cured such breach (if curable) within 15 days of his receipt of written notice of the breach; | ||
(3) | demonstrated his personal dishonesty in connection with his employment by Company; | ||
(4) | engaged in a breach of fiduciary duty in connection with his employment with the Company; |
(5) | engaged in willful misconduct that is materially and demonstrably injurious to the Company or any of its subsidiaries; or | ||
(6) | has been convicted or has entered a plea of guilty or nolo contendere to a felony or to any other crime involving moral turpitude which conviction or plea is materially and demonstrably injurious to the Company or any of its subsidiaries. |
(d) | A Change in Control of Company shall be deemed to have occurred: |
(1) | if the beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of securities representing more than fifty percent (50%) of the combined voting power of Company Voting Securities (as herein defined) is acquired by any individual, entity or group (a Person), other than Company, any trustee or other fiduciary holding securities under any employee benefit plan of Company or an affiliate thereof, or any corporation owned, directly or indirectly, by the stockholders of Company in substantially the same proportions as their ownership of stock of Company (for purposes of this Agreement, Company Voting Securities shall mean the then outstanding voting securities of Company entitled to vote generally in the election of directors); provided , however, that any acquisition from Company or any acquisition pursuant to a transaction which complies with clauses (i), (ii) and (iii) of paragraph (3) of this definition shall not be a Change in Control under this paragraph (1); or | ||
(2) | if individuals who, as of the date hereof, constitute the Board (the Incumbent Board) cease for any reason during any period of at least 24 months to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by Companys stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or |
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consents by or on behalf of a Person other than the Board; or | |||
(3) | upon consummation by Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Company or the acquisition of assets or stock of any entity (a Business Combination), in each case, unless immediately following such Business Combination: (i) Company Voting Securities outstanding immediately prior to such Business Combination (or if such Company Voting Securities were converted pursuant to such Business Combination, the shares into which such Company Voting Securities were converted) (x) represent, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination (the Surviving Corporation), or, if applicable, a corporation which as a result of such transaction owns Company or all or substantially all of Companys assets either directly or through one or more subsidiaries (the Parent Corporation) and (y) are held in substantially the same proportions after such Business Combination as they were immediately prior to such Business Combination; (ii) no Person (excluding any employee benefit plan (or related trust) of Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 50% or more of the combined voting power of the then outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) except to the extent that such ownership of Company existed prior to the Business Combination; and (iii) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) were members of the Incumbent Board at the time of the execution of the initial agreement, or the action of the Board, providing for such Business Combination; or | ||
(4) | upon approval by the stockholders of Company of a complete liquidation or dissolution of Company. |
(e) | Code shall mean the Internal Revenue Code of 1986, as amended. |
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(f) | Company shall mean Integra LifeSciences Holdings Corporation and any corporation, partnership or other entity owned directly or indirectly, in whole or in part, by Integra LifeSciences Holdings Corporation. | ||
(g) | Disability shall mean Executives inability to perform his duties hereunder by reason of any medically determinable physical or mental impairment which is expected to result in death or which has lasted or is expected to last for a continuous period of not fewer than six months. | ||
(h) | Good Reason shall mean: |
(1) | a material breach of this Agreement by Company which is not cured by Company within 15 days of its receipt of written notice of the breach; | ||
(2) | during the one-year period following a Change in Control, the relocation by the Company of the Executives office to a location more than forty (40) miles from Princeton, New Jersey, or, where Executives office is located other than at the Companys headquarters in Plainsboro, New Jersey, to a location more than forty (40) miles from the location of Executives office on the date hereof; | ||
(3) | Company fails to obtain the assumption of this Agreement by any successor to Company; or | ||
(4) | during the one-year period following a Change in Control, the Company, without Executives express written consent: (i) reduces Executives base salary, bonus opportunity (if applicable) or the aggregate fringe benefits provided to Executive; or (ii) substantially alters the Executives authority and/or title or otherwise diminishes the nature or status of Executives responsibilities in a manner reasonably construed to constitute a demotion. |
(i) | Retirement shall mean the termination of Executives employment with Company in accordance with the retirement policies, including early retirement policies, generally applicable to Companys salaried employees. | ||
(j) | Termination Date shall mean the date specified in the Termination Notice. | ||
(k) | Termination Notice shall mean a dated notice which: (i) indicates the specific termination provision in this Agreement relied upon (if any); (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for the termination of Executives employment under such |
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provision; (iii) specifies a Termination Date; and (iv) is given in the manner specified in Section 16(i). |
(a) | Prior to a Change in Control . Executives rights upon termination of employment prior to a Change in Control shall be governed by the Companys standard employment termination policies and practices applicable to Executive in effect at the time of termination or, if applicable, any written employment agreement between the Company and Executive other than this Agreement in effect at the time of termination. | ||
(b) | After a Change in Control . |
(i) | From and after the date of a Change in Control during the term of this Agreement, the Company shall not terminate Executive from employment with the Company except as provided in this Section 3(b) or as a result of Executives Disability, Retirement or death. | ||
(ii) | From and after the date of a Change in Control during the term of this Agreement, the Company shall have the right to terminate Executive from employment with the Company at any time during the term of this Agreement for Cause, by written notice to Executive, specifying the particulars of the conduct of Executive forming the basis for such termination. | ||
(iii) | From and after the date of a Change in Control during the term of this Agreement: (x) the Company shall have the right to terminate Executives employment without Cause, at any time; and (y) Executive shall, upon the occurrence of such a termination by the Company without Cause, or upon the voluntary termination of Executives employment by Executive for Good Reason, be entitled to receive the benefits provided in Section 4 hereof. Executive shall evidence a voluntary termination for Good Reason by written notice to the Company given within 60 days after the date of the occurrence of any event that Executive knows or should reasonably have known constitutes Good Reason for voluntary termination. Such notice need only identify Executive and set forth in reasonable detail the facts and circumstances claimed by Executive to constitute Good Reason. Any notice given by |
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Executive pursuant to this Section 3 shall be effective five business days after the date it is given by Executive. |
(a) | Termination with Salary Continuation . As consideration for the restrictive covenants contained in Section 5, in the event that within twelve months of a Change in Control (i) Executive terminates his employment for Good Reason, or (ii) Executives employment is terminated by Company for a reason other than Retirement, Disability, death or Cause, then Company shall: |
(i) | pay Executive a severance amount equal to Executives Base Salary (determined without regard to any reduction that would give rise to Good Reason) as of his last day of active employment; the severance amount shall be paid in a single sum on the first business day of the month following the Termination Date; and | ||
(ii) | maintain and provide to Executive, for a period ending on the earlier of (A) the end of the twelfth month after the Termination Date, or (B) Executives death, continued health coverage in the plan in which Executive was participating immediately prior to the Termination Date; provided that the continuation of such coverage is not prohibited by the terms of the plan or by the Company for legal reasons; and provided further, that in order to receive such continued coverage, Executive shall be required to pay to the Company at the same time that premium payments are due for the month an amount equal to the full monthly premium payments required to pay for such coverage and the Company shall reimburse to Executive the amount of such monthly premium, less the amount that Executive was required to pay for such coverage immediately prior to the Termination Date (the Health Payment), no later than the next payroll date of the Company that occurs after the date the premium for the month is paid by Executive . In addition, on each date on which the monthly Health Payments are made, the Company shall pay to Executive an additional amount equal to the federal, state and local income and payroll taxes that Executive incurs on each monthly Health Payment (the Health Gross-up Payment). The Health Payment and the Health Gross-up Payment shall be reimbursed to Executive in a manner that complies with the requirements of Treas. Reg. §1.409A-3(i)(1)(iv); and | ||
(iii) | pay to Executive a lump sum cash payment within thirty (30) days following Executives Termination Date equal to the premium cost of continuing the life and disability insurance in effect on Executives Termination Date for the period ending on the earlier of |
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(A) the end of the twelfth month after the Termination Date, or (B) Executives death; provided that the continuation of such benefits is not prohibited by the terms of the plan or by the Company for legal reasons. |
(iv) | If any payment or benefit to Executive under this Agreement would be considered a parachute payment within the meaning of Section 280G(b)(2) of the Code and, if, after reduction for any applicable federal excise tax imposed by Section 4999 of the Code (the Excise Tax) and federal income tax imposed by the Code, Executives net proceeds of the amounts payable and the benefits provided under this Agreement would be less than the amount of Executives net proceeds resulting from the payment of the Reduced Amount described below, after reduction for federal income taxes, then the amount payable and the benefits provided under this Agreement shall be limited to the Reduced Amount. The Reduced Amount shall be the largest amount that could be received by Executive under this Agreement such that no amount paid to Executive under this Agreement and any other agreement, contract or understanding heretofore or hereafter entered into between Executive and the Company (the Other Agreements) and any formal or informal plan or other arrangement heretofore or hereafter adopted by the Company for the direct or indirect provision of compensation to Executive (including groups or classes of participants or beneficiaries of which Executive is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for Executive (a Benefit Plan) would be subject to the Excise Tax. In the event the amount payable to Executive shall be limited to the Reduced Amount, then Executive shall have the right, in Executives sole discretion, to designate those payments or benefits under this Agreement, any Other Agreements, and/or any Benefit Plans, that should be reduced or eliminated so as to avoid having the payment to Executive under this Agreement be subject to the Excise Tax. | ||
(v) | Notwithstanding any provision to the contrary herein, if at the time of Executives termination of employment the Companys stock is publicly traded and Executive is a specified employee (as such term is defined in section 409A(2)(B)(i) of the Code and its corresponding regulations), then all cash payments to Executive pursuant to this Section 4(a) that are deemed as deferred compensation subject to the requirements of section 409A of the Code shall not be paid to Executive until as soon as administratively practicable following the expiration of the six month period following the date of Executives Termination Date, but not later than the first Company payroll date that occurs after the end of such six month period. If Executive dies during such |
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six-month period and prior to the payment of the postponed cash amounts hereunder, the amounts withheld on account of section 409A of the Code shall be paid to the personal representative of Executives estate within thirty (30) days after the date of Executives death. If any of the cash payments payable pursuant to this Section 4(a) are deferred due to such requirements, there shall be added to such payments interest during the deferral period at a rate, per annum, equal to the applicable federal short-term deferral rate (compounded monthly) in effect under section 1274(d) of the Code on Executives Termination Date. |
(b) | Other Termination . In the event Executives employment terminates other than as set forth in Section 4(a), Executives rights upon termination shall be governed by the Companys standard employment termination policies and practices applicable to Executive in effect at the time of termination or, if applicable, any written employment agreement between the Company and Executive other than this Agreement in effect at the time of termination. | ||
(c) | Termination Notice . Except in the event of Executives death, a termination under this Agreement shall be effected by means of a Termination Notice. |
(a) | Covenant Not to Compete . During the term of this Agreement and for a period of one year following the Termination Date of Executives employment, Executive shall not, without the express written consent of the Company, directly or indirectly: (I) engage, anywhere within the geographical areas in which the Company is conducting business operations or providing services as of the date of Executives termination of employment, in the tissue engineering business (the use of implantable absorbable materials, with or without a bioactive component, to attempt to elicit a specific cellular response in order to regenerate tissue or to impede the growth of tissue or migration of cells) (the Tissue Engineering Business), neurosurgery business (the use of surgical instruments, implants, monitoring products or disposable products to treat the brain or central nervous system) (Neurosurgery Business), instrument business (general surgical handheld instruments used for general purposes in surgical procedures) (Instrument Business), reconstruction business (bone fixation devices for foot and ankle reconstruction procedures) (Reconstruction Business) or in any other line of business the revenues of which constituted at least 50% of the Companys revenues during the six (6) month period prior to the Termination Date (together with the Tissue Engineering Business, Neurosurgery Business, Instrument Business and Reconstruction Business, the Business); (II) be or become a stockholder, partner, owner, officer, director or employee or agent of, or a |
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consultant to or give financial or other assistance to, any person or entity engaged in the Business; (III) seek in competition with the Business to procure orders from or do business with any customer of Company; (IV) solicit, or contact with a view to the engagement or employment by any person or entity of, any person who is an employee of Company; (V) seek to contract with or engage (in such a way as to adversely affect or interfere with the business of Company) any person or entity who has been contracted with or engaged to manufacture, assemble, supply or deliver products, goods, materials or services to Company; or (VI) engage in or participate in any effort or act to induce any of the customers, associates, consultants, or employees of Company to take any action which might be disadvantageous to Company; provided, however, that nothing herein shall prohibit Executive and his affiliates from owning, as passive investors, in the aggregate not more than 5% of the outstanding publicly traded stock of any corporation so engaged and provided, further, however, that nothing set forth in this Section 5(a) shall prohibit Executive from becoming an employee or agent of, or consultant to, any entity that is engaged in the Business so long as Executive does not engage in any activities in the Business in any capacity for said entity. |
(b) | Confidentiality . Executive acknowledges a duty of confidentiality owed to Company and shall not, at any time during or after his employment by Company, retain in writing, use, divulge, furnish, or make accessible to anyone, without the express authorization of the Board, any trade secret, private or confidential information or knowledge of Company obtained or acquired by him while so employed. All computer software, business cards, telephone lists, customer lists, price lists, contract forms, catalogs, Company books, records, files and know-how acquired while an employee of Company are acknowledged to be the property of Company and shall not be duplicated, removed from Companys possession or premises or made use of other than in pursuit of Companys business or as may otherwise be required by law or any legal process, or as is necessary in connection with any adversarial proceeding against Company and, upon termination of employment for any reason, Executive shall deliver to Company all copies thereof which are then in his possession or under his control. No information shall be treated as confidential information if it is generally available public knowledge at the time of disclosure or use by Executive. | ||
(c) | Inventions and Improvements . Executive shall promptly communicate to Company all ideas, discoveries and inventions which are or may be useful to Company or its business. Executive acknowledges that all such ideas, discoveries, inventions, and improvements which heretofore have been or are hereafter made, conceived, or reduced to practice by him at any time during his employment with Company heretofore or hereafter gained by him at any time during his employment with Company are the property of Company, and Executive hereby irrevocably assigns all such ideas, |
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discoveries, inventions and improvements to Company for its sole use and benefit, without additional compensation. The provisions of this Section 5(c) shall apply whether such ideas, discoveries, inventions, or improvements were or are conceived, made or gained by him alone or with others, whether during or after usual working hours, whether on or off the job, whether applicable to matters directly or indirectly related to Companys business interests (including potential business interests), and whether or not within the specific realm of his duties. Executive shall, upon request of Company, but at no expense to Executive, at any time during or after his employment with Company, sign all instruments and documents reasonably requested by Company and otherwise cooperate with Company to protect its right to such ideas, discoveries, inventions, or improvements including applying for, obtaining and enforcing patents and copyrights thereon in such countries as Company shall determine. |
(d) | Breach of Covenant . Executive expressly acknowledges that damages alone will be an inadequate remedy for any breach or violation of any of the provisions of this Section 5 and that Company, in addition to all other remedies, shall be entitled as a matter of right to equitable relief, including injunctions and specific performance, in any court of competent jurisdiction. If any of the provisions of this Section 5 are held to be in any respect unenforceable, then they shall be deemed to extend only over the maximum period of time, geographic area, or range of activities as to which they may be enforceable. | ||
(e) | Survivability . Executives obligations under this Section 5 shall survive termination of this Agreement and/or termination of Executives employment regardless of the manner of termination and shall be binding upon Executives heirs, executors, administrators and legal representatives. |
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(a) | Amendment . No provision of this Agreement may be amended unless such amendment is signed by Executive and such officer as may be specifically designated by the Board to sign on Companys behalf. | ||
(b) | Nature of Obligations . Nothing contained herein shall create or require Company to create a trust of any kind to fund any benefits which may be payable hereunder, and to the extent that Executive acquires a right to |
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receive benefits from Company hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company. |
(c) | ERISA . For purposes of the Executive Retirement Income Security Act of 1974, this Agreement is intended to be a severance pay Executive welfare benefit plan, and not an Executive pension plan, and shall be construed and administered with that intention. | ||
(d) | Prior Employment . Executive represents and warrants that his acceptance of employment with Company has not breached, and the performance of his duties hereunder will not breach, any duty owed by him to any prior employer or other person. | ||
(e) | Headings . The Section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation or this Agreement. In the event of a conflict between a heading and the content of a Section, the content of the Section shall control. | ||
(f) | Gender and Number . Whenever used in this Agreement, a masculine pronoun is deemed to include the feminine and a neuter pronoun is deemed to include both the masculine and the feminine, unless the context clearly indicates otherwise. The singular form, whenever used herein, shall mean or include the plural form where applicable. | ||
(g) | Severability . If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable under any applicable law, such event shall not affect or render invalid or unenforceable any other provision of this Agreement and shall not affect the application of any provision to other persons or circumstances. | ||
(h) | Binding Effect . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns, heirs, executors and administrators. | ||
(i) | Notice . For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given if hand-delivered, sent by documented overnight delivery service or by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below: |
Integra LifeSciences Holdings Corporation
311 Enterprise Drive Plainsboro, New Jersey 08536 Attn: President and CEO |
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The Companys General Counsel: |
Ms. Judith OGrady
XXXXX XXXXX |
(j) | Entire Agreement . This Agreement sets forth the entire understanding of the parties and supersedes all prior agreements, arrangements and communications, whether oral or written, pertaining to the subject matter hereof. | ||
(k) | Governing Law . The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the United States where applicable and otherwise by the laws of the State of New Jersey. | ||
(l) | Section 409A . |
(i) | This Agreement shall be interpreted to avoid any penalty sanctions under section 409A of the Code. If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under section 409A, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed. All payments to be made upon a termination of employment under this Agreement may only be made upon a separation from service under section 409A of the Code. For purposes of section 409A of the Code, each payment made under this Agreement shall be treated as a separate payment. In no event may Executive, directly or indirectly, designate the calendar year of payment. | ||
(ii) | All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of section 409A, including, where applicable, the requirement that (A) any reimbursement is for expenses incurred during Executives lifetime (or during a shorter period of time specified in this Agreement), (B) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (C) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (D) the right to reimbursement is not subject to liquidation or |
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exchange for another benefit. If expenses are incurred in connection with litigation, any reimbursements under the Agreement shall be paid not later than the end of the calendar year following the year in which the litigation is resolved. |
INTEGRA LIFESCIENCES
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EXECUTIVE | |
EXECUTIVE HOLDINGS CORPORATION
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By: /s/ Stuart M. Essig
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/s/ Judith E. OGrady | |
Its: President and Chief Executive Officer
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INTEGRA LIFESCIENCES
HOLDINGS CORPORATION |
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By: | /s/ Richard Caruso | |||
Name: | Richard Caruso | |||
Title: | Chairman | |||
EXECUTIVE
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/s/ Stuart M. Essig | ||||
Stuart M. Essig | ||||
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INTEGRA LIFESCIENCES
HOLDINGS CORPORATION |
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By: | /s/ Stuart M. Essig | |||
Name: | Stuart M. Essig | |||
Title: | President and Chief Executive Officer | |||
EXECUTIVE
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/s/ John B. Henneman, III | ||||
John B. Henneman, III | ||||
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INTEGRA LIFESCIENCES
HOLDINGS CORPORATION |
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By: | /s/ Stuart M. Essig | |||
Name: | Stuart M. Essig | |||
Title: | President and chief Executive Officer | |||
EXECUTIVE
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/s/ Gerard S. Carlozzi | ||||
Gerard S. Carlozzi | ||||
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THE PARTICIPANT | INTEGRA LIFESCIENCES | |||
HOLDINGS CORPORATION | ||||
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By: | |||
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Name
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Stuart M. Essig | |||
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President and Chief Executive Officer | |||
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Name: | |||
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1. | Purpose |
2. | Definitions |
2
3. | Eligibility |
4. | Administration |
3
5. | Determination of Awards |
4
6. | Changes to the Target |
7. | Payment of Awards |
8. | Limitations on Rights to Payment of Awards |
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9. | Amendments |
10. | Termination |
11. | Miscellaneous Provisions |
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State or Country of | ||
Incorporation or | ||
Name of Subsidiary | Organization | |
Canada Microsurgical ULC
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Canada | |
Caveangle Limited
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United Kingdom | |
EndoSolutions, Inc.
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Delaware | |
GMS mbH
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Germany | |
ILS Services Switzerland Ltd.
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Switzerland | |
Integra CI, Inc.
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Cayman Islands | |
Integra Clinical Education Institute, Inc.
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Delaware | |
Integra Healthcare Products LLC
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Delaware | |
Integra LifeSciences (Canada) Holdings, Inc.
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Delaware | |
Integra LifeSciences Corporation
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Delaware | |
Integra LifeSciences (France) LLC
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Delaware | |
Integra LifeSciences Holdings SAS
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France | |
Integra LifeSciences (Ireland) Limited
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Ireland | |
Integra LifeSciences NR Ireland Limited
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Ireland | |
Integra LifeSciences Sales (Ireland) Limited
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Ireland | |
Integra LifeSciences Services (France) SAS
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France | |
Integra LifeSciences Shared Services (Ireland)
Limited
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Ireland | |
Integra ME GmbH
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Germany | |
Integra NeuroSciences Gmbh
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Germany | |
Integra NeuroSciences Holdings B.V.
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Netherlands | |
Integra NeuroSciences Holdings (France) SA
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France | |
Integra NeuroSciences Holdings (UK) Limited
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United Kingdom | |
Integra NeuroSciences Implants (France) SA
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France | |
Integra NeuroSciences (International), Inc.
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Delaware |
State or Country of
Incorporation or
Name of Subsidiary
Organization
United Kingdom
Delaware
Delaware
Delaware
Germany
Delaware
Delaware
Germany
Germany
Belgium
Texas
France
France
United Kingdom
United Kingdom
France
Delaware
Massachusetts
Massachusetts
Massachusetts
Massachusetts
Delaware
Florida
Delaware
Switzerland
Washington
Netherlands
Germany
Netherlands
California
New Jersey
/s/
Stuart
M. Essig
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/s/
John
B. Henneman, III
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/s/
Stuart
M. Essig
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/s/
John
B. Henneman, III
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