EX-10.3 2 ex10-3.htm EXHIBIT 10.3

Exhibit 10.3

 

Xtant Medical Holdings, Inc.

Board of Directors Services Agreement

 

 

This Board of Directors Services Agreement (the “Agreement”), dated ________,
2016, is entered into between Xtant Medical Holdings, Inc., a Delaware
corporation (the “Company”), and _______________, an individual with a principal
place of _________, __________(“Director”).

 

WHEREAS, the Company desires to retain the services of Director for the benefit
of the Company and its stockholders; and

 

WHEREAS, Director desires to continue to serve on the Company’s Board of
Directors for the period of time and subject to the terms and conditions set
forth herein;

 

NOW, THEREFORE, for consideration and as set forth herein, the parties hereto
agree as follows:

 

1.     Board Duties. Director agrees to provide services to the Company as a
member of the Board of Directors. Director shall, for so long as he remains a
member of the Board of Directors, but in any case not less than three years from
the date hereof, meet with the Company upon written request, at dates and times
mutually agreeable to Director and the Company, to discuss any matter involving
the Company or its subsidiaries, which involves or may involve issues of which
Director has knowledge and cooperate in the review, defense or prosecution of
such matters. Director acknowledges and agrees that the Company may rely upon
Director’s expertise in product development, marketing or other business
disciplines where Director has a deep understanding with respect to the
Company’s business operations and that such requests may require substantial
additional time and efforts in addition to Director’s customary service as a
member of the Board of Directors. Director will notify the Company promptly if
he is subpoenaed or otherwise served with legal process in any matter involving
the Company or its subsidiaries. Director will notify the Company if any
attorney who is not representing the Company contacts or attempts to contact
Director (other than Director’s own legal counsel) to obtain information that in
any way relates to the Company or its subsidiaries, and Director will not
discuss any of these matters with any such attorney without first so notifying
the Company and providing the Company with an opportunity to have its attorney
present during any meeting or conversation with any such attorney.

 

2.     Compensation. All compensation arrangements that existed prior to
execution of this Agreement are hereby terminated. As compensation for the
services provided herein, the Company shall pay to Director the compensation set
forth on Exhibit A. The parties agree that the compensation set forth on Exhibit
A is subject to annual review by the Compensation Committee of the Board of
Directors and may be adjusted from time to time as approved by the full Board of
Directors.

 

3.     Benefits and Expenses. The Company will obtain a Directors and Officers
Insurance Policy from a carrier and at levels approved by the Board of
Directors. The Company will reimburse Director for reasonable business expenses
incurred on behalf of the Company prior to the date hereof. The Company shall
also reimburse Director for reasonable out-of-pocket expenses incurred in
connection with discharging his or her duties as a Board member. Any additional
expenses shall be pre-approved by the CEO or CFO of the Company and will be
reimbursed subject to receiving reasonable substantiating documentation relating
to such expenses.

 

 

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4.     Mutual Non-Disparagement. Director and the Company mutually agree to
forbear from making, causing to be made, publishing, ratifying or endorsing any
and all disparaging remarks, derogatory statements or comments made to any party
with respect to either of them. Further, the parties hereto agree to forbear
from making any public or non-confidential statement with respect to the any
claim or complain against either party without the mutual consent of each of
them, to be given in advance of any such statement.

 

5.     Conflicting Obligations. Director certifies that Director has no
outstanding agreement or obligation that is in conflict with any of the
provisions of this Agreement or that would preclude Director from complying with
the provisions of this Agreement. Director will not enter into any such
conflicting agreement during or after the term of this Agreement. Director’s
violation of this section will be considered a material breach of this
Agreement.

 

6.     Term and Termination.

 

(a)     Term. The initial term of this Agreement shall be three years and will
continue until the earlier of (i) final completion of the services or
(ii) termination as provided in Section 6(b).

 

(b)     Termination. Either party may terminate this Agreement upon giving the
other party 30 days’ prior notice of such termination. The Company may terminate
this Agreement immediately and without prior notice if Director refuses to or,
at Company’s sole discretion, it determines, (i) Director is unable to perform
the services or (ii) Director is in breach of any provision of this Agreement.

 

(c)     Survival. Upon such termination, all rights and duties of the Company
and Director toward each other shall cease except:

 

(i)     The Company will pay, within 30 days after the effective date of
termination, all amounts owing to Director for services completed and accepted
by the Company prior to the termination date and related expenses, if any,
submitted in accordance with the Company’s policies and in accordance with the
provisions of Section 3 of this Agreement; and

 

(ii)     Section 5 (Conflicting Obligations), Section 7 (Independent
Contractor), and Section 10 (Confidentiality) will survive termination of this
Agreement.

 

7.     Independent Contractor. It is the express intention of the Company and
Director that Director perform the services as an independent contractor to the
Company. Nothing in this Agreement shall in any way be construed to constitute
Director as an agent, employee, representative, joint venture, legal
representative or partner of the Company, unless otherwise authorized by the
Board of Directors. Without limiting the generality of the foregoing, Director
is not authorized to bind the Company to any liability or obligation or to
represent that Director has any such authority. Director acknowledges and agrees
that Director is obligated to report as income all compensation received by
Director pursuant to this Agreement. Director agrees to and acknowledges the
obligation to bear all employment or self-employment obligations and other taxes
on such income as may correspond. The Company shall assume no responsibility in
such determination.

 

 

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8.     Cooperation. In the event of any claim or litigation against the Company
and/or Director based upon any alleged conduct, acts or omissions of Director
during the tenure of Director as an officer of the Company, whether known or
unknown, threatened or not as of the time of this writing, the Company will
cooperate with Director and provide to Director such information and documents
as are necessary and reasonably requested by Director or his/her counsel,
subject to restrictions imposed by federal or state securities laws or court
order or injunction. The Company shall cooperate in all respects to ensure that
Director has access to all available insurance coverage and shall do nothing to
damage Director’s status as an insured, and shall provide all necessary
information for Director to make or tender any claim under applicable coverage.

 

9.     Status of Director. Membership on the Board of Directors shall require
adherence to board member conduct policies adopted by the board and enforced
equally upon all directors. Director may voluntarily resign his or her position
on the Board of Directors at any time and without penalty or liability of any
kind, subject to Section 6 above.

 

10.     Confidentiality.

 

(a) Definition. “Confidential Information” means any non-public information that
relates to the actual or anticipated business or research and development of the
Company or its affiliates, technical data, trade secrets or know-how, including,
but not limited to, research, product plans or other information regarding
Company's or its affiliates’ products or services and markets therefore,
customer lists and customers (including, but not limited to, customers of the
Company on whom Director called or with whom Director became acquainted during
the term of this Agreement), software, developments, inventions, processes,
formulas, technology, designs, drawing, engineering, hardware configuration
information, marketing, finances or other business information. Confidential
Information does not include information that (i) is known to Director at the
time of disclosure to Director by the Company as evidenced by written records of
Director, (ii) has become publicly known and made generally available through no
wrongful act of Director or (iii) has been rightfully received by Director from
a third party who is authorized to make such disclosure.

 

(b) Nonuse and Nondisclosure. Director will not, during or subsequent to the
term of this Agreement, except as required by applicable law, (i) use the
Confidential Information for any purpose whatsoever other than the performance
of the services on behalf of the Company or (ii) disclose the Confidential
Information to any third party. Director agrees that all Confidential
Information will remain the sole property of the Company. Director also agrees
to take all reasonable precautions to prevent any unauthorized disclosure of
such Confidential Information. Without the Company’s prior written approval,
Director will not directly or indirectly disclose to anyone the terms or the
existence of this Agreement or the fact that Director has this arrangement with
the Company.

 

 

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(c) Third Party Confidential Information. Director recognizes that the Company
has received and in the future will receive from third parties their
confidential or proprietary information subject to a duty on the Company’s part
to maintain the confidentiality of such information and to use it only for
certain limited purposes. Director agrees that, during the term of this
Agreement and thereafter, that all such information shall be treated as
Confidential Information as defined in this Agreement. Director owes the Company
and such third parties a duty to hold all such confidential or proprietary
information in the strictest confidence and not to disclose it to any person,
firm or corporation or to use it except as necessary in carrying out the
services for the Company consistent with the Company’s agreement with such third
party.

 

(d) Return of Materials. Upon the termination of this Agreement, or upon
Company’s earlier request, Director will deliver to the Company all of the
Company’s property, including but not limited to all electronically stored
information and passwords to access such property, or Confidential Information
that Director may have in Director’s possession or control.

 

(e) Confidentiality of Agreement. Subject to exceptions mutually agreed upon by
the parties to this Agreement in advance and in writing, the terms and
conditions of this Agreement shall remain confidential and protected from
disclosure except as required by law in connection with any registration or
filing, in relation to a lawful subpoena, or as may be necessary for purposes of
disclosure to accountants, financial advisors or other experts, who shall be
made aware of and agree to be bound by the confidentiality provisions hereof.

 

11.     Governing Law. This Agreement shall be governed by the law of the State
of Delaware. In the event of any dispute regarding the performance or terms
hereof, the prevailing party in any litigation shall be entitled to an award of
reasonable attorneys’ fees and costs of suit, together with any other relief
awarded hereunder or in accordance with governing law.

 

12.     Assignability. Except as otherwise provided in this Agreement, Director
may not sell, assign or delegate any rights or obligations under this Agreement.

 

13.     Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersedes all prior written and oral agreements between the parties regarding
the subject matter of this Agreement.

 

14.     Headings. Headings are used in this Agreement for reference only and
shall not be considered when interpreting this Agreement.

 

15.     Severability. If any provision of this Agreement is found to be illegal
or unenforceable, the other provisions shall remain effective and enforceable to
the greatest extent permitted by law.

 

 

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16.     Counterparts. This Agreement may be executed in two counterparts each of
which shall be deemed an original but all of which taken together shall
constitute one and the same instrument. Signatures to this Agreement transmitted
by email, portable document format (.pdf) or by any other electronic means
intended to preserve the original graphic and pictorial appearance of this
Agreement shall have the same effect as the physical delivery of the paper
document bearing the original signatures.

 

In witness whereof, the parties hereto enter into this Agreement as of the date
first set forth above.

 

             

THE COMPANY:

  

 

 

  

DIRECTOR:

       

  

     

  

 

Name:

  

     

  

 

Title

  

     

  

 

 

 

 

 

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EXHIBIT A

 

Director will be compensated for his or her service as follows:

 

 

●

an annual base retainer of $40,000 payable in cash;

 

 

●

an additional $40,000 payable 100% in the form of restricted stock units or
options to purchase the Company’s common stock (Director may elect to receive
50% in restricted stock units and 50% in options);

 

 

●

if Director serves as Chairman of the Board of Directors, an additional $20,000
payable in cash;

 

 

●

if Director serves as Chairman of a Committee of the Board of Directors, the
following additional amounts will be payable in cash: $12,500 for service as the
Chairman of the Audit Committee; $12,500 for service as the Chairman of the
Business Development Committee; $10,000 for service as the Chairman of the
Compensation Committee; and $10,000 for service as the Chairman of the
Nominations and Governance Committee;

 

 

●

if Director serves on a Committee of the Board of Directors, the following
additional amounts will be payable in cash: $5,000 for service on the Audit
Committee; $5,000 for service on the Business Development Committee, $4,000 for
service on the Compensation Committee; and $4,000 for service on the Nominations
and Governance Committee;

 

 

●

if Director serves on a Special Committee of the Board of Directors, any
additional compensation for such service will be set at that time by the Board
of Directors; and

 

 

●

Director will receive an additional $1,500 per day for service at any meeting or
other Board service (as may be approved from time.

 

Director will be paid his or her cash compensation quarterly on the 15th day of
the month following the end of the applicable fiscal quarter. Any restricted
stock unit or options payable to Director will be awarded in July of each year,
valued using the market price of the Company’s common stock on the date of
grant, and will fully vest upon one year of service.