Document:

zbh-ex102_64.htm

EXHIBIT 10.2

	
	
 

 

Confidential

 

June 28, 2018

 

Didier Deltort 

 

Dear Didier:

We are pleased to offer you the role of President, EMEA of Zimmer Biomet Holdings, Inc. (“Zimmer Biomet” or the “Company”) reporting to Bryan C. Hanson, President and Chief Executive Officer.  Your salary grade will be level Z04.  We will mutually agree on your start date, which we expect would be no later than August 20, 2018.  You will also be a member of the Company’s global Leadership Team.

 

This will be an addendum to your Swiss-based contract dated June 28, 2018.

 

Position Location

This position will be based in Winterthur, Switzerland (address/physical location).  Your tax home will be in Winterthur and business meetings and activities will occur in Winterthur.

 

Annual Merit Adjustment

Zimmer Biomet’s annual merit review process involves base pay adjustments consistent with job performance.  Merit adjustments are based on performance during the calendar year.  You will be eligible for a merit increase beginning in 2019.  

 

Former Employer Bonus Forfeiture

Since you will forfeit eligibility to receive a bonus payment for this fiscal year from your current employer due to your separation to accept this role with Zimmer Biomet, we will pay you a one-time bonus forfeiture amount to approximate your foregone bonus for January 1, 2018 through July 31, 2018.  We estimated your pro-rata bonus forfeiture at CHF 95,132.  Please provide the appropriate documentation to support this amount as soon as you are able.  Upon acceptance of the documentation and your commencement of employment, we will process payment within 90 days of your start date.  This bonus forfeiture payment will not be included as income for purposes of calculating any other bonus or determining compensation for any benefit plan purposes, and will be subject to applicable tax withholdings.  As a condition to receipt of this payment, you must agree by your signature below that you will repay to Zimmer Biomet the entire gross amount paid to you of CHF 95,132 if you voluntarily leave employment with Zimmer Biomet within 12 months of the payment date. 

 

Sign-On Bonus

In connection with your commencement of employment, Zimmer Biomet will provide you a one-time cash sign-on bonus for consideration of your relocation to the Winterthur area and potential higher cost of living in the amount of CHF 50,000.  This payment will not be included as income for purposes of calculating any other bonus or determining compensation for any benefit plan purposes, and will be subject to applicable tax withholdings.  This payment will be processed within 90 days of your start date.  As a condition to receipt of this payment, you must agree by your signature below that you will repay to Zimmer Biomet the entire gross amount paid to you if you voluntarily leave employment with Zimmer Biomet within 12 months of the payment date. 

 

 

 

		
	

	
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Sign-On and Equity Replacement Grants

In connection with your commencement of employment, Zimmer Biomet will provide you a one-time long-term incentive grant with a grant date fair value of approximately $1,200,000 (USD). 

 

Equity Replacement Grant

Approximately $750,000 (USD) will consist of time-vested restricted stock units (“RSUs”).  The grant date will be the first business day of the month following your commencement of employment.  These RSUs will vest at the rate of 25% per year over four years beginning on the first anniversary of the grant date, again assuming your continued employment with Zimmer Biomet. 

 

Sign-On Equity Grant

Approximately $450,000 (USD) will consist of stock options.  The grant date will be the first business day of the month following your commencement of employment.  The stock options will vest at the rate of 25% per year over four years beginning on the first anniversary of the grant date (assuming your continued employment with Zimmer Biomet) and will expire on the tenth anniversary of the grant date. 

All equity awards are subject to Compensation and Management Development Committee (“Compensation Committee”) approval and other terms and conditions of the 2009 Stock Incentive Plan, as amended from time to time; award agreements; and your execution of a non-compete agreement in the form provided by the Company. 

Executive Officer (Section 16)

We expect that you will be designated by the Board of Directors as an “officer” of Zimmer Biomet for purposes of Rule 16a-1(f) and as an “executive officer” for purposes of Rule 3b-7 under the Securities Exchange Act of 1934, as amended.  

As an executive officer, you will be subject to stock ownership guidelines established by the Board of Directors in order to align the interests of executive officers more closely with those of stockholders.  The guidelines will require you to own shares with a value equal to at least three (3) times your base salary.  Under the guidelines, all shares you hold, including RSUs and PRSUs (at the target award level), will count toward this ownership requirement.  In addition, one-half of any gain on vested stock options will count toward this requirement.  You will have up to five (5) years to achieve the required level of stock ownership.  Further, every executive officer must obtain clearance prior to selling any shares of Company common stock, in part to ensure that all officers remain in compliance with the stock ownership guidelines.

Contractual Obligations

It is our understanding that you do not have any contractual obligations (such as a non-competition or non-solicitation agreement) with a former or current employer that you would violate by accepting this role.  If our understanding is incorrect, please notify me immediately.  If you have a confidentiality obligation with a former or current employer, it is your responsibility to refrain from using or disclosing confidential information.  If you have any questions about this responsibility, please let us know.

Section 409A

To the extent that any payments or benefits under this letter are deemed to be subject to Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), this letter will be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder in order to (a) preserve the intended tax treatment of the benefits provided with respect to such payments and (b) 

 

		
	

	
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comply with the requirements of Section 409A of the Code.  A termination of employment shall not be deemed to have occurred for purposes of any provision of this letter providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A.  Nothing in this letter shall be construed as a guarantee by the Company of any particular tax effect.  The Company shall not be liable to you for any tax, penalty, or interest imposed on any amount paid or payable hereunder by reason of Section 409A, or for reporting in good faith any payment made under this letter as an amount includible in gross income under Section 409A.

 

If there is any discrepancy between this letter and/or the Swiss contract and the plan documents, the plan documents will govern.  While Zimmer Biomet intends to continue benefits referenced in this offer, we reserve the right to change or discontinue them at any time for any reason.  Please note in particular that any amount payable or paid to you pursuant to the Company EPIP or LTI Plan or any other similar performance-based compensation may be subject to forfeiture or repayment in accordance with the Company’s Executive Compensation Recoupment Policy or applicable plan document or award agreement as approved, adopted and/or revised by the Board or Committee from time to time, and/or subject to recoupment as required by any other provisions of any law (including, without limitation, Section 10D of the Securities Exchange Act of 1934, as amended), governmental regulation or stock exchange listing requirement.  By signing below you acknowledge your understanding that any such repayment obligation will apply notwithstanding anything else stated in this letter.

 

We are very excited to have you join us and are looking forward to receiving your signed offer letter.  We believe you will make a valuable contribution and find your career with Zimmer Biomet challenging and rewarding. 

CONFIRMATION OF ACCEPTANCE

Please indicate your acceptance of this offer by signing below and returning the signed letter to me.  

 

Sincerely,

 

 

Bill P. Fisher

Senior Vice President, Global Human Resources

 

 

Accepted:

 

 

			
	
/s/ Didier Deltort
	
 
	
July 2, 2018

	
Didier Deltort
	
 
	
Date

 

 

 

 

		
	

	
Page 3 – June 28, 2018zbh-ex103_63.htm

EXHIBIT 10.3

 

	
	

 

 

	
	
Confidentiality, Non-Competition, and Non-Solicitation Agreement 

 

This Confidentiality, Non-Competition and Non-Solicitation Agreement ("Agreement") is made by and between Zimmer GmbH ("Employer") and Didier Deltort ("Employee").

Recitals

	
(A)
	
For purposes of this Agreement, "Parent" means an entity which is a holding company of or holds a controlling interest in Zimmer, Inc. ("Company" or "ZINC"); "Affiliate" means a subsidiary of Company or the Parent of Company or a company over which Company or any holding company of Company has control, including but not limited to Employer; and the definition of each of Company; Parent and Affiliates, includes any of their successors-in-interest, including, but not limited to, ZINC.
	
 

	
(B)
	
Company, Parent and the Affiliates (collectively, and each individually "Zimmer Biomet Group") are part of the global holdings of Zimmer Biomet Holdings, Inc., a publicly traded corporation incorporated under the laws of the state of Delaware, U.S.A., the primary purpose of which is to serve as the umbrella entity for ZINC.  Zimmer Biomet Group is engaged in the design, development, manufacture, distribution, and sale of musculoskeletal healthcare products and solutions, including orthopedic medical and/or oral rehabilitation devices, products, and services. 
	
 

	
(C)
	
By virtue of his position as President EMEA and General Manager of the Employer and his particular responsibilities for the markets of Germany, UK, France, Italy, Spain and Switzerland and the overall responsibility for the EMEA Regions, the Employee has been and will be granted access and introduced to major customers of Zimmer Biomet Group in Europe, Middle East and Africa and will be prominently involved in strategic decision making processes, including but not limited to strategic acquisitions, product development, business and marketing strategies as well as price strategies and similar measures, restructuring projects, etc.  Therefore, Zimmer Biomet Group has an imminent interest to protect this information, know-how and its business secrets throughout the term of the Employee's employment and for a certain period after its termination has taken effect.
	
 

	
 
	
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Confidentiality, Non-Competition, and Non-Solicitation Agreement 

 

	
1.
	
Confidentiality
	
 

	
1.1
	
As used herein, "Confidential Information" shall include, but not be limited to, all business, trade, and technical information of Zimmer Biomet Group, and of any third party, whether patentable or not, which is of a confidential, trade secret and/or proprietary character and which is either developed by Employee (alone or with others) or to which Employee has had access during his employment with the Zimmer Biomet Group.
	
 

	
1.2
	
Confidential Information includes, without limitation, the following:
	
 

	
 
	
(a)
	
Marketing, sales, and advertising information such as lists of actual or potential customers; customer preference data, marketing and sales techniques, strategies, efforts, and data; merchandising systems and plans; confidential customer information including identification of purchasing personnel, account status, needs and ability to pay; business plans, product development and delivery schedules; market research and forecasts; marketing and advertising plans, techniques, and budgets; overall pricing strategies; the specific advertising programs and strategies utilized, and the success or lack of success of those programs and strategies;
	
 

	
 
	
(b)
	
Organizational information such as personnel and salary data; merger, acquisition and expansion information; restructuring plan information, information concerning methods of operation; and divestiture information;
	
 

	
 
	
(c)
	
Financial information such as product costs; supplier information; overhead costs; profit margins; banking and financing information; and pricing policy practices;
	
 

	
 
	
(d)
	
Technical information such as product specifications, compounds, formulas, improvements, discoveries, developments, designs, inventions, techniques, new products and surgical training methods;
	
 

	
 
	
(e)
	
Information disclosed to Employee as part of a training process;
	
 

	
 
	
(f)
	
Information of third parties provided to Employee subject to non-disclosure restrictions for use in Employee's business for the Zimmer Biomet Group; and
	
 

	
 
	
(g)
	
Any work product created by Employee in rendering services for the Zimmer Biomet Group.
	
 

	
1.3
	
Employee shall not at any time during the continuance of his employment with the Zimmer Biomet Group or at any time thereafter directly or indirectly use for his own purposes or for any purposes other than those of the Zimmer Biomet Group, record, divulge, disclose or communicate to any person, company, business entity or other organization or, through any failure to exercise due care and diligence, cause any unauthorized disclosure of, any trade secrets or Confidential Information except as may be necessary for the proper performance of Employee's duties or as may be specifically authorized in writing by the Employer.
	
 

	
 
	
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1.4
	
Employee will notify Employer in writing of any circumstances which may constitute unauthorized disclosure, transfer, or use of Confidential Information. Employee will use best efforts to protect Confidential Information from unauthorized disclosure, transfer, or use. Employee will implement and abide by all procedures adopted by the Zimmer Biomet Group to prevent unauthorized disclosure, transfer, or use of Confidential Information.
	
 

	
1.5
	
Upon termination of his employment with the Zimmer Biomet Group (for whatever reason), and at any other time at Employer's request, Employee shall, without retaining any copies or other record thereof, deliver to Employer or any person Employer may nominate each and every document and all other material of whatever nature in the possession or under the control of Employee containing or relating directly or indirectly to any Confidential Information.
	
 

	
1.6
	
The confidentiality undertaking set forth in this Section 1 shall cease to apply to any information which shall become available to the public generally otherwise than through the default of Employee.
	
 

	
2.
	
Non-Competition, Non-Solicitation
	
 

	
2.1
	
Employee shall not, for as long as he remains an employee of the Zimmer Biomet Group and during a period of 18 months from the taking effect of the termination of his employment with the Zimmer Biomet Group ("Non-Competition Period"), alone, or jointly with, or as manager, agent for, or employee of any person or as a shareholder, directly or indirectly carry on or be engaged, concerned or interested in any business competitive to the business of Zimmer Biomet Group with an effect in Switzerland, the European Community and the EFTA States or any other country for which Employee possesses and will possess knowledge of Confidential Information. Without limiting the generality of the foregoing, the non-compete undertaking set forth in this Section 2.1 shall apply to any product competing with the Zimmer Biomet Group's product lines and in particular but not limited to products of Johnson & Johnson (DePuy, Synthes), Stryker, Smith & Nephew, Mathys, Lima, Wright Medical, Tornier and Exactech, including their respective affiliates and subsidiaries, assignees, and successors (also as a consequence of de-mergers or spin-offs). The Employee acknowledges and agrees that the making available of Confidential Information to competitors of Zimmer Biomet Group will considerably harm Zimmer Biomet Group's business.
	
 

	
2.2
	
Employee shall not during the Non-Competition Period (i) solicit, induce or attempt to induce any person who is an employee of the Zimmer Biomet Group to leave the Zimmer Biomet Group or to engage in any business that competes with the Zimmer Biomet Group; (ii) hire or assist in the hiring of any person who is an employee of the Zimmer Biomet Group to work for any business that competes with the Zimmer Biomet Group, or (iii) solicit, induce or attempt to induce any person or company that is a customer of the Zimmer Biomet Group to discontinue or modify its customer relationship with the Zimmer Biomet Group.
	
 

	
 
	
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3.
	
Non-Competition Period Payments
	
 

	
3.1
	
To the extent Employee is unable to obtain employment consistent with Employee's training and education solely because of the provisions of this Agreement, the following terms will apply upon expiration of any severance benefits to which Employee is otherwise eligible to receive ("Non-Competition Period Payments"):
	
 

	
 
	
(a)
	
Employer will make payments to Employee equal to Employee's monthly base pay at the time of Employee's termination (exclusive of bonus, extra compensation and any other employee benefits) for each month of such unemployment through the end of the Non-Competition Period which shall in no event be less than 50% of the Employees pro-rated annual income on a monthly basis (inclusive of bonus, extra compensation and any other employee benefits);
	
 

	
 
	
(b)
	
to the extent Employee is able to obtain employment which does not violate this Agreement, but solely because of this Agreement, the monthly base pay for the replacement employment is less than Employee's monthly base pay at the time of Employee's termination (as calculated in accordance with 3.1(a) above), Employer agrees to pay the difference for each such month through the end of the Non-Competition Period. A reduction of the Non-Competition Period Payments shall only take place to the extent the aggregate compensation exceeds 110% of the Employee's former monthly income (inclusive of bonus, extra compensation and any other employee benefits);
	
 

	
 
	
(c)
	
on the 15th day of each month of such unemployment, Employee will give Employer a detailed written account of Employee's efforts to obtain employment and an explanation exclusively attributing Employee's inability to obtain replacement employment to the provisions of this Agreement.
	
 

	
3.2
	
In the event of Employee's breach, Employee agrees that Employee will still be bound by all of the provisions set forth in this Agreement, including, but not limited to, the non-competition, non-solicitation, non-disparagement and non-disclosure covenants, until the end of the Non-Competition Period. Zimmer Biomet Group reserves the right to release Employee from Employee's non-competition obligations set forth in this Agreement during the Non-Competition Period respecting a notice period of six (6) months after which Employer's payment obligations under this Section 3 shall cease immediately and Employee shall not be entitled to any Non-Competition Period Payment or other compensation.
	
 

	
4.
	
Remedies
	
 

	
4.1
	
For each violation of the covenants set forth in Section 1 and/or 2, Employee shall pay to Employer or, at Employer's instruction, any other affiliate of the Zimmer Biomet Group, and amount corresponding to 50% of the Employee's last annual salary at the time of Employee's termination (inclusive of bonus payments, extra compensation and any other employee benefits) as liquidated damages, plus such additional damages as may be incurred by Employer and/or any other affiliate of 
	
 

	
 
	
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Confidentiality, Non-Competition, and Non-Solicitation Agreement 

 

		
the Zimmer Biomet Group. The payment of this sum shall not operate as a waiver of the above obligations. Employer and/or any other affiliate of the Zimmer Biomet Group shall, in addition to all other damages, be entitled to obtain a court's order for specific performance, as well as adequate injunctive relief or any other adequate judicial measure, to immediately stop such violation.
	
 

	
4.2
	
To the extent that Employee breaches any provision of this Agreement during the Non-Competition Period and/or fails to timely submit the written account required by Section 3, Employer reserves, in addition to all other relief to which Employer shall be entitled, the right to cease making any Non-Competition Period Payments.
	
 

	
5.
	
Miscellaneous
	
 

	
5.1
	
This Agreement constitutes and expresses the entire agreement between the Parties pertaining to the subject matter contained herein and supersedes all prior and contemporaneous oral or written agreements, representations, understandings and the like between the Parties.
	
 

	
5.2
	
This Agreement may not be modified, amended, altered or supplemented, in whole or in part, except by a written agreement signed by the Parties.
	
 

	
5.3
	
If any provision of this Agreement is found by any competent authority to be void, invalid or unenforceable, such provision shall be deemed to be deleted from this Agreement and the remaining provisions of this Agreement shall continue in full force. In this event, the Agreement shall be construed, and, if necessary, amended in a way to give effect to, or to approximate, or to achieve a result which is as close as legally possible to the result intended by the provision hereof determined to be void, illegal or unenforceable.
	
 

	
6.
	
Waiver
	
 

The Employer may at its sole discretion waive all or certain of the restrictions under this Agreement within 2 weeks after it has received or issued the notice of termination by/to the Employee. In case the Non-Competition restriction is waived, the Employee is aware that there will be no entitlements to Non-Competition Period Payments under clause 3 of this Agreement.

	
7.
	
Governing Law and Jurisdiction
	
 

	
7.1
	
This Agreement shall be governed by, interpreted and construed in accordance with the substantive laws of Switzerland.
	
 

	
7.2
	
The ordinary courts and the domicile of Employer competent shall have exclusive jurisdiction of all disputes arising out of or in connection with this Agreement.
	
 

Employee's signature below indicates that Employee has read the entire Agreement, Employee understands what Employee is signing, and is signing it voluntarily. Employee agrees that Zimmer Biomet Group advised Employee to consult with an attorney prior to signing the Agreement.

	
 
	
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Confidentiality, Non-Competition, and Non-Solicitation Agreement 

 

 

This Agreement enters into force on the later date set-out below.

 

Winterthur, June 28, 2018

 

Zimmer GmbH

 

		
	
/s/ Guillaume Génin                
	
/s/ Asif Hussain

	
Guillaume Génin
	
Asif Hussain

	
Vice President,
	
Vice President,

	
Associate General Counsel, EMEA
	
Human Resources, EMEA

 

 

"Employee"

 

 

/s/ Didier Deltort

Didier Deltort

 

Date: June 28, 2018

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